Salaries are not subject to GST, Media Report alleging Tax Authorities want to impose GST on Salaries is Factually Incorrect: CBIC

.
The Central Board of Indirect Taxes & Customs (CBIC) today clarified that salaries are not subject to GST and no GST has been demanded on salaries paid to CEOs or employees.
.
The CBIC said that the media report in this regard alleging that tax authorities want to impose GST on salaries paid to employees is factually incorrect and misrepresents tax authorities.
.
The Board emphasised the GST law position which clearly states under Section 7(2) read with Schedule III of the Central Goods and Services Act, 2017 (CGST Act) that the salaried services by an employee to the employer shall be treated neither as a supply of goods nor as a supply of services. So, salaries as such cannot be subject to GST. CBIC said that in this regard no notice has been issued to any companies demanding GST on salaries whatsoever.
.
The CBIC further clarified that it has already been made amply clear vide its press release dated 10′ July, 2017 that the services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods nor supply of services).
.
.

.
The CBIC also said that the GST charged on the prices/charges by any supplier of goods or services from his consumers does comprise all costs including the cost of raw material, capital goods, input services and employee costs, etc. But this does not mean that salaries paid to the employees by the employer are being taxed under GST.
.
It must also be made clear that offices of an organisation in different States are regarded as distinct persons under Section 25 of CGST Act. Hence, what is taxable under GST is the supply of goods and services by the head office to its branch office/s and vice versa. Any tax charged on such supplies is available to the recipient as an input tax credit. This is not any additional cost to the organisation. Also, it is a worldwide practice under GST laws.

CBDT extends due date for filing of Income Tax Returns / Tax Audit Reports in Union Territory of Jammu and Kashmir and Ladakh

.
The Central Board of Direct Taxes ( CBDT ) has extended due date for filing of Income Tax Returns / Tax Audit Reports to 30th November, 2019 in respect of Union Territory of Jammu and Kashmir and Union Territory of Ladakh.
.
The Notification issued by CBDT said that, “On consideration of reports of disturbances in internet facility in certain areas of Jammu and Kashmir, the Central Board of Direct Taxes (CBDT) has extended the ‘due date’ for filing Income Tax Returns / Tax Audit Reports to 30th November, 2019 in respect of all categories of Income Tax Assessees in the Union Territory of Jammu and Kashmir and Union Territory of Ladakh who were/are required to file the Income Tax Returns / Tax Audit Reports by the due date specified under Section 139 (1) of the Act read with order of CBDT under Section 119 of the Act.”
.
The CBDT also clarified that, “ITRs filed by the certain categories of Income Tax assesses who were required to file ITRs by 31.08.2019, but have filed ITRs after 31.08.2019 till the date of issuance of this order shall be deemed to have been filed within the due date specified under Section 139 (1) of the Act read with CBDT’s order”.
.
.
To Read the full text of the Order
.

CLICK HERE

CA Students protest against ICAI’s Evaluation Methods: ICAI issues Clarification on Exam Evaluation

.

The Institute of Chartered Accountants of India (ICAI) has made an announcement with respect to Evaluation of answer books of CA exams on September 21, 2019. Thereafter, a webinar was conducted on September 22, 2019, wherein the procedure and processes followed in the examination system were explained and all the misgivings about the examination process were cleared.
.
1. Digital evaluation: As communicated in January 2019 Chartered Accountant Student newsletter, continuing further from the pilot e evaluation for the first group of Intermediate Nov 2018 exams; all papers of Intermediate and Foundation level exams in November 2019/May 2020 will be put through the digital evaluation mode bringing in following benefits

• Doing away with stages of physical handling of answer books
• Avoiding variations in marks awarded by examiners.
• Eliminating scope of any totalling errors
• Continuous review of performance of the Examiners on real time basis;
• Generation of analytical reports enabling quality control checks;
  .

2. Central evaluation:Further the Central Evaluation is being carried out in several papers of CA exams, w.e.f November 2018 wherein examiners evaluate answer books under the supervision of Head Examiner/Associate Head Examiners.
.
3. Machine-based evaluation: Effective May, 2019 exams, objective type questions for 30 marks have been introduced in select papers of Intermediate and Final Exams. Further, the Institute has decided to introduce OMR based evaluation for MCQ’s of Elective Papers 6A to 6F of final New course with effect from November 2019 which are machine processed thus avoiding subjectivity.
.
4.Stepwise marking: Provision regarding stepwise marking is being enforced whereby in case the stepwise marks are not awarded; it will be deemed as the unevaluated answer and stepwise marks will be awarded during the course of re-verification of marks
.
5.Mandatory on-line test for empanelment of examiners: All applicants shortlisted for empanelment as examiners are required to qualify an on-line test in the subject of their choice before inclusion of their names in the Panel of Examiners. It has further been decided that all existing examiners would also be required to undergo an online test in their respective subjects, once in 3 years.
.
.
Currently, the Regulation 39(4) dealing with the subject matter provides as under:-
.
(4)        (i)  Information as to whether a candidate’s answers in any particular paper or papers of any examination have been examined and marked shall be supplied to the candidate on his submitting within a month of the declaration of the result of the said examination, an application, accompanied by a fee as may be fixed by the Council which shall not exceed rupees five hundred in any case.]
.
(ii)  The fee shall be only for verifying whether the candidate’s answers in any particular paper or papers have been examined and marked, and not for the re-examination of the answers.
.
(iii) The marks obtained by a candidate in individual questions or in sections of a paper shall not be supplied.
.
(iv) If as a result of such verification, it is discovered that there has been either an omission to examine or mark any answer or answers or there has been a mistake in the totalling of the marks, the fee for verification shall be refunded in full to the candidate.
.
.
The above Chartered Accountants Regulations allow correction of marks awarded in case of :

• No marks awarded to any answer or part of it.
• Totalling errors in step-wise marks awarded for an answer
• Wrong carry forward or it’s part of marks awarded to answer on the cover page of the answer books. Beyond this, the Regulation does permit any subjectivity in checking of answer books.

The representatives were explained about the afore-stated provisions of Chartered Accountants Regulations 39(4) of the Chartered Accountants Regulations, 1988.
.
However, they were insistent on the demand for allowing re-evaluation of the answer books.  They were informed that due process will be followed for consideration of their demand. They were also requested to call off the agitation and students be advised to concentrate on their studies and preparation for the forthcoming examination. In spite of the same; the representatives mentioned that they would continue with this agitation till the time the matter is sorted out.
.
All the students are advised not to be carried away by such issues. The Institute is seized of their problems and will be considered and taken up at the appropriate forum by following due process.

GST Council Recommends reduced GST Rate on Services

.
 .
The GST Council in the 37th meeting held on 20th September, 2019 at Goa took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues.

• (A) EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA:

Rate reduction sector wise:
Hospitality and tourism:

• To reduce the rate of GST on hotel accommodation service as below: -

Transaction Value per Unit (Rs) per day	GST
Rs 1000 and less	Nil
Rs 1001 to Rs 7500	12%
Rs 7501 and more	18%

• To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC. The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.

Job work service:

• To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds.
  
• To reduce rate of GST from 18%to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%.

Exemption sector wise: Warehousing:

• To exempt prospectivelyservices by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea.
  

Transportation:

• To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e. till 30.09.2020.

Insurance:

• To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government.
• To exempt services of life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the respective Group Insurance Schemes of these Central Armed Paramilitary forces.
  

Export promotion:

• To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.
  
• To issue a notification under Section 13(13) of IGST Act notifying the place of supply of specified R&Dservices (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease,Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays,Drug metabolism and pharmacokinetics of new chemical entities,Safety Assessment/ Toxicology,Stability Studies,Bio Equivalence and Bio Availability Studies, Clinical trials,Bio analytical studies) provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service i.e. location of the service recipient.
  
• To clarify that the place of supply of chip design software R&Dservices provided by Indian companies to foreign clients by using sample test kits in India is the location of the service recipient and section 13(3)(a) of IGST Act, 2017 is not applicable for determining the place of supply in such cases.

Miscellaneous

• To allow the registered authors an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.
  
• To notify grant of liquor licence by State Governments against payment of license fee as a “no supply” to remove implementational ambiguity on the subject.
  
• To exempt services related to FIFA Under-17 Women's World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017.
  
  
   
  • (B) RATIONALIZATION/ TRADE FACILITATION MEASURES:
    
•  To allow payment of GSTon securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, such taxpayers will not be required to pay tax again.
  
• To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities.
  
  
  • (C) CLARIFICATIONS:
    
•  To clarify the scope of the entry ‘services of exploration, mining or drilling of petroleum crude or natural gas or both”.
  
• To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF) levied by airport operators.

Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 1^st October, 2019.

DOWNLOAD FILE IN PDF FORMAT BELOW

37th GST Council Meeting: Major Recommendations

.
The 37th GST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant, Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.
.
The GST Council, in its meeting, recommended the following Law & Procedure related changes :

1. Relaxation in filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19 as under:
   • waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; and
   • filing of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have aggregate turnover up to Rs. 2 crores made optional for the said tax periods.

2. A Committee of Officers to be constituted to examine the simplification of Forms for Annual Return and reconciliation statement.
   .
3. Extension of last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional.
   .
4. In order to nudge taxpayers to timely file their statement of outward supplies, imposition of restrictions on availment of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017.
   .
5. New return system now to be introduced from April, 2020 (earlier proposed from October, 2019), in order to give ample opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 - March, 2020.
   .
6. Issuance of circulars for uniformity in application of law across all jurisdictions:
   -procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum;
   -eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and
   -clarification regarding  supply  of  Information Technology  enabled  Services  (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as intermediary.
   .
7. Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount.
   .
8. Suitable amendments in CGST Act, UTGST Act, and the corresponding SGST Acts in view of creation of UTs of Jammu & Kashmir and Ladakh.
   .
9. Integrated refund system with disbursal by single authority to be introduced from 24^th September, 2019.
   .
10. In principle decision to link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds.
    .
11. In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers.
    .

 .

DOWNLOAD FILE IN PDF FORMAT BELOW

 .

GST Rate on Goods as Recommended by The GST Council in Its 37th Meeting

.
The 37th GST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant, Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.
.
The council took the following decisions in respect to rates relating to goods.

• GST rates reduction, –
  -18% to 12% on parts of Slide Fasteners
  -18% to 5% on Marine Fuel 0.5% (FO)
  -12% to 5% on Wet Grinders(consisting stone as a grinder)
  -5% to Nil on:-
  -Dried tamarind
  -Plates and cups made up of leaves/ flowers/bark
  -3% to 0.25% on cut and polished semi- precious stones
  -Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)
  .
• Exemptions from GST/IGST on:-
  -imports of specified defence goods not being manufactured indigenously (upto 2024)
  -supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
  -supply of goods and services to the Food and Agriculture Organisation (FAO) for specified projects in India.
  .
• GST rates have been recommended to be increased from, –
  -5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches, rolling stock (without refund of accumulated ITC). This is to address the concern of -ITC accumulation with suppliers of these goods.
  -18% to 28% +12% compensation cess on caffeinated Beverages
  .
• Measures for Export Promotion
  -Exemption from GST/IGST:-
  -at the time of import on Silver/Platinum by specified nominated agencies
  -supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,
  -Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters.
  -A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%)
  .
• GST concession in certain cases for specific period: –
  -Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability offishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited.
  -12% GST duringthe period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under Heading 8483) and used as parts of agricultural machinery.
  -Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petrol and length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for a diesel vehicle. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but up to 13 persons. (Presently these vehicles attract compensation cess at the rate of 15%)
  .
• Other miscellaneous Changes:
  -Aerated drink manufacturers shall be excluded from the composition scheme.
  -Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon(DGH) as non-serviceable.
  -Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
  -Prescribing modalities for allowing concessions on spare parts imported temporarily by foreign airlines for the repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.
  -Certain other changes of technical nature for the sake of clarity in the application of notification.
  -Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes:
  -Mere heating ofleguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HS code 0713.
  -All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
  -Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate.
  -Exclusive parts and accessories suitable for use solely or principally with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12%.
  -Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
  -Imported stores for Navy would be entitled to exemption from IGST

 .
The rate changes shall be made effective with effect from 1st October, 2019.

.

DOWNLOAD FILE IN PDF FORMAT BELOW

Income Tax Return filing Date Extended

.
The Central Board of Direct Taxes (CBDT) has extended the due date for filing income tax returns to 31st August 2018 from this July 31st.
.
As the due date has been coming closer, the Board had received several requests from the tax practitioners body and the Institute of Chartered Accountants of India (ICAI) requesting a due date extension due to several reasons.
.
As per reports, over 1.46 crore income tax returns have been filed so far, of which 90.8 lakh have been filed by individuals with total income up to Rs 50 lakh.
.
As per data released by the department, a total of over 7.94 lakh tax returns were alone filed on July 16, of which over 5.26 lakh was ITR-1 or Sahaj.
.
Since there are penal consequences in delay in filing tax returns, the income tax department is under pressure to grant some more time to the taxpayers. Recently, the format of tax returns as well as in the tax deducted at source (TDS) certificates issued by employers and the TDS returns to be filed by employers had been changed recently.
.
The tax department usually allows an extension for a few days if the public faces any difficulty in meeting the deadline and a longer extension for assessees in states in case there are exceptional events like a natural calamity.
 .
.
To Read the full text of the Order DOWNLOAD Here
.

DOWNLOAD NOW