​​ Online Filing of quarterly TDS/TCS statements in the e-Filing portal shall be available with effect from 1st May, 2016

Building GSTN hell of a challenge, says Infosys' Vishal Sikka after meeting Jaitley

Infosys Ltd. Chief Vishal Sikka met Union finance ninister Arun Jaitley in the capital on Thursday for a review meeting of the Goods and Services Tax Network (GSTN), a key project which has been contracted to the country's second largest software firm.

Sikka has been learnt to have given a presentation to Jaitley about the progress in project so far. In an interview to ET Now, Sikka said, "It is a very important project for the country and it is something that the finance minister and the prime minister are extremely keen on and it is something that we are very proud of and so we are putting, Pravin (Rao, Infosys COO) and I are putting all our best efforts into that." He added that GSTN involves many moving parts.
"It is an extremely complex and ambitious exercise. It involves banks. It involves small businesses, big businesses, tax payers, states. Many states are not ready. Many small cities are not ready. So it is going to be a hell of a challenge but we are incredibly excited about it," he said.

GSTN is a not-for-profit entity owned by the Centre, states and non-government financial institutions, and is building the technology backbone for new tax regime. It has been mandated to handle the complex back-end processing when the revolutionary tax reform rolls out from April 1, 2017.

ET had reported in August that Testing of the software should start by October and a beta launch of the GST portal is planned for February. Infosys has been assigned the mandate to develop and run GSTN in a project worth Rs 1,380 crore. The portal itself will be a one stop for filing and processing of all taxes for almost 65 to 70 lakh tax-payers in the country and is being designed by a specialised design unit of Infosys.
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CBDT to honour honest taxpayers

In a novel initiative revived after decades, the CBDT will soon honour lakhs of "honest and compliant" taxpayers from across the country who have paid their Income Tax dues diligently over the years.

The Central Board of Direct Taxes has created four broad categories of taxpayers for the purpose - large, regular, compliant, and diligent taxpayers.

Such people will be issued commendation certificates by the policy-making body of the I-T department under the signature of the CBDT Chairperson.
Officials said the policy to honour "honest and compliant" taxpayers has been revived after decades with the Union Finance Ministry clearing the proposal after obtaining approvals from the top.

As per the scheme, to honour such diligent taxpayers it is expected that while a chosen few will be honoured by physically awarding certificates by Union Finance Minister Arun Jaitley, the rest will be sent these commendations by the CBDT over email.

The certificates, apart from saying a thank you, will commend the taxpayers for honestly making their contributions towards the progress of the country.

Officials said the plan was in the making for quiet sometime now "because it was felt that there are many enforcement measures to detect and haul up tax evaders, but none to honour the compliant taxpayers", who have been paying their taxes honestly for years all together.

"Hence, it has been decided that honest and diligent taxpayers will be honoured and made to feel proud about the contributions they have made till now in the progress of the country," they said.
The CBDT had also discussed the revival of this initiative during the Tax Administrators conference that was held here early this year and as part of the follow-up it had asked regional I-T heads to select the names of "good taxpayers" from their respective jurisdictions.

While the exact figures of the total number of taxpayers who will be honoured is not known, officials said these numbers would be few lakhs.
Such a scheme has been run by the I-T department few decades back but it was shunned after some large taxpayers complained about getting threats from criminal elements.

The award will honour those who have paid the maximum income tax (without disclosing the figure), promptness in making advance tax payments and consistency in paying I-T dues, they said.
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Direct tax mop-up rises 15% to Rs 1.89 lakh crore in April-August

Government's direct tax collections were up 15 per cent in April-August period due to robust increase in personal income tax. Indirect taxes growth was even better at 27.5 per cent over this period because of a healthy rise in excise collections.

In the first five months of the fiscal, the government has managed 22.3 per cent of the budgeted direct tax collection for FY17 and 43.2 per cent of the indirect tax collections.

The government has budgeted Rs 8.47 lakh crore from direct taxes and Rs 7.79 lakh crore from indirect taxes. At the end of August, net direct tax collection was Rs 1.89 lakh crore while indirect taxes added up to Rs 3.36 lakh crore. The lower direct tax collections are largely due to negative growth in net corporate tax collections because of large refunds.

The gross corporate income tax grew at 11.6 per cent while personal income tax kitty was up 24.1 per cent.

After adjusting for refunds, the net corporate collections dropped 1.9 per cent from a year ago period. Net personal income tax collections rose 31.8 per cent.

Refunds of Rs 77,080 crore were given out during April-August, 22.2 per cent more than the refunds issued during the corresponding period last year.

The central excise collections were up 48.8 per cent at .Rs 1.53 lakh crore during April-August from Rs 1.03 lakh crore during the corresponding period in the previous financial year.

Net service tax collections were pegged at Rs 92,696 crore, a growth of 23.2 per cent. Customs mop-up was Rs 90,448 crore, a muted 5.7 per cent rise

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TDS on commission doesn't prove its genuiness; assessee has to prove that services were rendered by recipient

Where assessee, a dealer in both shares and property, incurred loss on derivatives being future option loss on transactions entered on NSE, he would be entitled to set off same against profit on sale of property

Where share transactions were entered into by assessee electronically (screen based) in recognised stock exchanges viz. BSE, NSE, and said transactions were intra day and no delivery of shares had taken place, loss therefrom would be speculative in nature but could not be termed as sham and, thus, said loss deserved setting off

For an assessee to claim expenditure on account of commission, assessee has to prove that services were in fact rendered by recipient of commission from assessee
Refer:[2016] 71 taxmann.com 345 (Kolkata - Trib.)
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Receipt of huge share premium doesn't mean that it is unexplained cash credit; reassessment sets aside

Mere fact that a sizeable sum in nature of share premium was received would not automatically mean that same was artificially increased; initiation of reassessment on basis of this reason was not proper

Refer:[2016] 71 taxmann.com 326 (Gujarat)
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Dy. Director of Income Tax isn't empowered to lodge complaint for prosecution against taxpayer

In view of restrictive preconditions imposed by Section 195 CrPC, Deputy Director of Income Tax is not a competent authority to whom appeal would ordinarily lie from decisions/orders of ITOs involved in search proceedings under Income-tax Act so as to empower him to lodge complaint for prosecution under Sections 109/191/193/196/200/420/120B/34 IPC

Where a single and combine search operation under Income-tax Act had been undertaken simultaneously both at Bhopal and Aurangabad for same purpose, alleged offence can be tried by courts otherwise competent at both aforementioned places; jurisdiction could not be confined only within territorial limits to Court at Aurangabad and Trial Court at Bhopal is also competent to try complaint

Refer:[2016] 73 taxmann.com 32 (SC)
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No reassessment to disallow deprecation which was wrongly allowed at assessment stage after proper verification

Where depreciation was allowed after verification, assessment could not be reopened claiming that depreciation was wrongly claimed on closed down unit.

Refer:[2016] 72 taxmann.com 333 (Gujarat)
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When refund is granted partly, it has to be first adjusted against interest payments and balance against tax

While granting refund in pursuance to appeal effect order, amount of refund granted earlier should be adjusted first against interest component of earlier refund and thereafter balance amount should be adjusted against principal component of tax in refund granted earlier, on which assessee is entitled to get interest under section 244A
Refer:[2016] 72 taxmann.com 348 (Mumbai - Trib.)
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Lok Sabha passes GST Bill with Rajya Sabha amendments

Parliament approved biggest overhaul of indirect taxes on Monday after the lower house ratified a constitutional amendment Prime Minister Narendra Modi called a major step to make doing business easier.

The proposed goods and services tax (GST) is one of the most significant reforms since India opened its economy 25 years ago and the revamping of the tax system since the country's independence in 1947.

The measure will harmonise a mosaic of state and central levies into a national sales tax, creating a single customs union widely expected to reduce business transaction costs, with potentially significant long-term growth benefits.

The upper house, where the measure was stuck for months, passed the bill last week.

Modi hailed the passage of the bill as a "great step by team India, (a) great step towards transformation, great steps towards transparency".

"Today, an important move to free the nation from tax terrorism has begun," he told lawmakers in the lower house of parliament.

The advancement of the new sales tax is the biggest legislative victory for Modi, who swept to power in 2014 promising to nurse India's then faltering economy back to health.

His plans to simplify rules for land sales got scuttled in parliament last year. Similarly, political opposition forced him to put on hold proposed legislative changes aimed at making it easier for companies to hire and fire workers.

It has been 13 years since the tax was first mooted, but forging a political consensus has been a bruising process, as the measure would curb the powers of Indian states.

Ironically, the GST is getting closer to the finish line under Modi, who while running the state of Gujarat vehemently opposed it - a fact that drew criticism from opposition benches.

Modi defended his stance, saying his experience as a provincial chief helped him better understand and address states' concerns.

"Lots of flaws have been overcome as far as the GST is concerned," he said. "A trust between the centre and states has developed."

Under the new regime, companies will get offsets for taxes paid at different stages of the supply chain, mitigating the dangers of double-taxation.

The finance ministry aims to roll out the GST from next April. Meeting the self-imposed deadline, however, will be a race against time, tax experts say.

The bill now needs the approval of half of India's state legislatures and federal and state legislatures must pass three laws to implement the tax.

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RBI launches 'Sachet' portal to check illegal money collection

The Reserve Bank of India (RBI) on Thursday launched a portal to curb illegal collection of money by companies.

The URL of the website is www.sachet.rbi.org.in

This website will enable public to obtain information regarding entities who accept deposits, lodge complaints and also share information regarding illegal acceptance of deposits, said RBI Governor Raghuram Rajan while launching 'Sachet' here.

"Initiating quick follow up and taking cases to logical conclusion by punishing the guilty is paramount to deterring entities in future from carrying out unlawful activity. I hope 'Sachet' would help regulators in doing this as much as it would help members of public in depositing their hard earned money with genuine companies by giving them timely information about them," Rajan said.

The website would also help enhance coordination among regulators and state government agencies.

Explaining the features of the website, Deputy Governor S.S. Mundra said, people can file and track a complaint on this website if any firm has illegally accepted money from them or defaulted in repayment of deposits.

People can also share information regarding any such entity on this portal, Mundra said.

The website also incorporates regulations prescribed by all financial regulators that one has to follow.

'Sachet' also has a section for closed user group for State Level Coordination Committee (SLCCs) wherein they could share market intelligence and other information about their activities as well as agenda and minutes of meetings across the country in real time.

All states have SLCCs comprising of various regulators, including RBI, Securities and Exchange Board of India (Sebi), National Housing Bank (NHB), Insurance Regulatory and Development Authority (IRDA), Registrar of Companies (ROC) and concerned state government departments, such as, home, finance, law and various police authorities.

Mundra hoped that the website will act as a 'force multiplier' and go a long way in making the SLCCs more effective in curbing the menace of unauthorised money raising activities.
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