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NEWS & VIEWSFOR MEMBERS / SUBSCRIBERS / VOL. 22 - NO. 9 - MAY - JUNE 2019

From President's Desk...Dear Professional Colleagues and Readers,

CA Sunil V. Dedhia

Thank you all..... Always in Gratitude

June 10, 2019.

C.V.O. CA'S

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From the President's Desk:-

This being my last communication as President of this esteem Association, I sign off with feeling of satisfaction and

fulfillment. I feel happy and privileged serving the august association. As part of team CVOCA we did performed our duty

with best of our ability and with responsibility and contributed to the glory of the association. As a President, the whole

year gave me good learning and made me wealthier in terms experience and wealthier in relationship.

Public Seminar on CSR for trustsstThe Public Seminar on how to make trust CSR compliant was organised on 1 June 2019 at Yogi Sabhagrah to guide and

educate the trustees and office bearers of trusts for making trusts CSR compliant, which was attended by more than 425 invitees from various trust of our community. Feedback received from the participants has reiterate the fact the contents and quality of the CVOCA's seminars are always par excellence. Association also announced CSR clinic for the benefit of the trust to guide and help them to become CSR compliant.

CVO Certified GST and Accountants Course Batch 1 The 1st batch of GST accountant course has been completed successfully in May 2019. In all 23 students have attended the course. This course practical training on GST is covered.

Direct Tax:

As there was dawn of new Financial Year 2019‐20 certain changes related to Direct Taxation have been made by the

Central Board of Direct Taxes (CBDT) through issuance of Notifications, changing the structure of Form 16 and TDS Forms

thereby reducing the bulk of unnecessary data and giving room to the useful data.

Along with the changes for the domestic assessee there has been also changes made in relation to the assessee having its

presence in the International Borders whereby the Treaty between Government of India and Republic of United States of

America on Country‐by‐ Country Reporting has been changed.

Indirect Taxes:

Since the advent of Goods and Service Tax (GST) there has been continuous amendment and clarifications in the form of

amendments and circulars have been issued and recommended by the GST Council, which includes changes in various

due dates for the filing of GST Returns and clarifications and judgements issued by the Judicial Body. Also the changes

related to E‐way Bill System and brief note on the consequences for not adhering to the procedures of E‐way Bill System.

Major changes in State VAT Law's (Maharashtra VAT) were made by the structuring the Amnesty Scheme 2019, which

would focus on fast redressal and transparent way to reduce the pre‐existing as well as the existing cases.

How Money Work's?

In order to accomplish with our tradition of providing social knowledge, here is the interesting topic on the functioning of

the money.

Also it is rightly said; “Success starts counting when your money starts working for you”.

It is now time to step down and pass the legacy to able and worthy successor and wish him for successful and eventful year ahead which enable to carry glory of the association at new height.

Thank you all..... Always in Gratitude

FROM THE DESK OF CHAIRMAN

NEWS BULLETINNEWS BULLETINCOMMITEECOMMITEE

PresidentCA Sunil Dedhia

Chairman CA Dinesh Shah Convenor CA Mehul Gala Jt. Convenor CA Parin Gala Sp. Invitees CA Rakesh Vora

Members CA Hitesh Pasad CA Paras Maru CA Virav Dedhia CA Viral Satra CA Deepesh Chheda CA Keval Satra CA Jinit Bheda CA Nisha Gala

CONTENTSCONTENTS

CA Dinesh Shah

ASSOCIATIONASSOCIATION

C.V.O. CA'S NEWS & VIEWS

Events in Retrospect .....................5

How money works ? .....................6

Maharashtra Amnesty Scheme,

2019..............................................9

Checklist for GSTR 9 ...................16

E‐Way Bill System........................20

GST : Recent Judicial

Pronouncements ........................25

Recent Compounding Orders Under

Fema ..................................29

Brief Update On SEBI &

Corporate Law.............................34

FEMA Updates............................36

Direct Taxes Law Update.............40

GST Updates ...............................42

VOL. 22 - NO. 9 - MAY - JUNE 2019

(Forgiveness, Humility, Straight forwardness and Contentment)

� Friends the key to achieving a higher lever of inner happiness is to get

rid of all Kasayas (Passions), The basic passions are attachment and hatred; we

can subdivide them into an ger, ego, deceit and greed. Nobody is free from

these; and, unless checked, they build up in the individual, leading him or her

to more and more destructive thoughts and behavior. It can be very hard to get

rid of these unpleasant passions. It might take lifetimes and require hard

spiritual effort. Even when the individual has controlled them, it is always

possible to slip back. The path is still difficult and the individual must be

prepared to avoid the most harmful activities: cheating, hurting others' feelings,

killing, lust for material things, and so on.

Kshamä (Forgiveness) Friends we discussed this in Last month's communicationVinay (Humility)

Humility is external and internal respect towards all living beings. In fact,

humility is an inherent virtue of the soul (Ätmä), with other virtues like

knowledge, faith, contentment, forgiveness, and so on.

Humility is the king of all spiritual characteristics. Humility denotes

humbleness, modesty, decency, politeness, courtesy, kindness, reverence,

admiration, honor, and respect. Many popular sayings such as “Ego is the

source of sin,” “One who bows is liked by all,” and “Even the pride of King Rävan

went to dust,” points out that pride is a vice while humility is a virtue. Pride

makes all our fame and great work useless. Without humility, the right

knowledge, the right faith, and the right conduct cannot be obtained; hence, one

cannot improve oneself and cannot achieve liberation.

Developing Humility

Bhagawän Mahävir has said, “Become victorious over ego by humility.”

Bhagawän was once asked, “What do we achieve by practicing humility?”

Bhagawän replied, “With humility, our inner feelings become purified and such

inner feelings eradicate the eight types of ego.”

The following is a brief description of eight types of ego:

Pride of Knowledge

Pride of Worship

2

FOUR : Virtues : Kshamä, Vinay, Saralatä and Santosh


Pride of Family

Pride of Race

Pride of Power

Pride of Accomplishment

Pride of Austerity

Pride of Body

This Eightfold pride disturbs the social, intellectual and spiritual progress of the aspirant. One should

therefore know fully this Eight fold pride, abandon it in the daily routine of life and resort to humility. If this is

done, humility as a virtue will reveal itself in a short time. Humility is the ladder that leads to true

philosophical thinking and a happy life.

Types of Humility

There are numerous types of humility. A few important ones are:

1) Humility of right knowledge (Jnän Vinay);

a) treating knowledge and those who have acquired knowledge with devotion,

b) honoring them,

c) noble contemplation on what our Tirthankar has said,

d) putting in self effort to acquire knowledge and ) putting knowledge into practice.

2) Humility of right belief (Darshan Vinay); i.e. respect for the right faith, respect for

people who have the right faith and, the self_effort needed to acquire the right faith.

3) Humility of right conduct (Chäritra Vinay); respect for right conduct, respect for persons who have

the right conduct and, self effort to practice the right conduct.

4) Humility of right austerity (Tapa Vinay); respect for right austerity, respect for persons

who practice right austerity and, self effort to practice right austerity.

5) Humility towards the spiritual leaders and great people (Upachär Vinay), one must be

polite towards elders and spiritual superiors. One should behave him/herself in their presence,

with decency.

BENEFITS

There are many benefit of adopting humility in daily conduct. Some are as follows:

a) When one becomes considerate of other people's inconveniences, speech becomes softer and courteous, not authoritative, not aggressive, and without hidden intent.

b) A loving conduct and a spirit of tolerance are developed. We learn to apologize when a mistake is made.

c) Real greatness starts emerging, and boasting ends. We start seeing the positive side of others rather than the negative side. We learn to respect others as our equals. We give up the habit of comparing ourselves with others.

d) “I” is replaced by “WE”. There is no presumption about what is right and wrong.

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3


e) Just as trees rich in fruits hang low, similarly, people with true humility always look humble.

f) Like sugar in milk, if humility is associated with knowledge, one attains real greatness. Humility is the

root of the process of purification. It is the necessity for social, professional, intellectual, mental, and

spiritual prosperity.

SUMMARY

Humility is the king of all characteristics. Ego destroys everything we work for.Vinay should be synchronized

in all three phases: in action, in speech, and in thinking.Without humility, one cannot have right

knowledge.Without right knowledge, one cannot have right faith.Without right faith, one cannot have right

conduct. Without the right conduct, one cannot achieve Moksha. Let us develop this great virtue.

Friends we will discuss the other Two in subsequent communication VIRTUES - SARALTA AND SANTOSH

VOL. 22 - NO. 9 - MAY - JUNE 2019

4

SE O UH L T I S. O. N Y . J O EU R N

TREAT OTHER THE WAY YOU WANT TO BE TREATED...

REMEMBER !!


EVENTS IN RETROSPECT EVENTS IN RETROSPECT

Public Program on "How to make Trust CSR Compliant" organised by Program Committee of CVOCA

Association at Yogi Sabhagruh on 1st June 2019.

Various Trustees & Karobari Members of different Trusts & NGOs from Kutch, Vagad & Mumbai like KVOSS,

KVO Deravasi Mahajan, Wagad NGOs, Ahinsadhaam, Suvidha NGO, Matunga Boarding, etc. i.e. 400+ attended

the well managed program on topic of the hour i.e. Corporate CSR kitty's Usage. The program though was

planned for limited invitees, CVOCA was receiving calls till morning of 1st June for the entry passes. We were

quite lucky and our team efforts helped to accommodate all the dignitaries & philanthropists of our

community.

At start of the program, one the biggest philanthropist of our society, MD of Navneet Education Limited and

trustee at different NGOs, Shri Sunil Gala brought in both the sides of the coin i.e. what corporate expect from

NGO & what all NGO can & should do. With his rich experience, he presented to the audience the gap between

corporate requirements and the ground realities of the trusts presently operational in our community. He

clearly advocated for trusts to be professional, marketable and best governed in order to pitch projects to the

trusts. Also he had put in his thoughts on Do's & Don'ts for the trusts while approaching Corporates for CSR

Funding.

Then was the session from our own member of the association, past president of CVOCA, who is also a

technical expert of Corporate Law and Partner at Khimji Kunvarji & Co., CA Hasmukh Bhavanji Dedhia. He not

only addressed on CSR requirements under the law, but also connected to different projects already or being

undertaken or can be executed under the CSR regulations in very simplistic language providing apt examples to

the audience to connect with.

In the end, the last part where our trust needs to improve upon was addressed by the speaker from Delhi, Shri

Parul Soni, Global Managing Partner at TTC. He, with his 20 years experience in bridging gap between CSR

Funds from Corporate to Trusts, well informed the audience on philosophy of corporate, desired

presentations, reports, budgets for the trusts. He stressed upon the entire cycle of CSR funding & utilization

which would be required for corporate and trusts if they want to partner themselves.

Great thanks to the Chairman of program & our Past President CA Dinesh Devchand Ghalla for managing the

entire program effectively and ensuring right time period is provided to speakers making the justice to the topic

& their efforts put in.

Towards the Q&A session, CVOCA declared the launch of CVOCA CSR Clinic in order to help the trusts in their

subjective doubts & queries. This announcement became the feather on the cap of the program.

We would like to thank Bidada Sarvoday Trust for giving us wholehearted support in organizing this program.

Nevertheless the program would not be successful without the audience for whom this was thought through. We

thank all the trusts and their karobari members who made their presence on the day and hope we would have

achieved the objective of program. Once we crystallize the operational mechanism of CVOCA CSR Clinic, we

would approach you all and would like to work with you all for the betterment of our society at large.

VOL. 22 - NO. 9 - MAY - JUNE 2019

5

Compiled by:


CA Henik Shah

“It is well enough that the people do not understand the

banking & monetary systems, for if they did, there may be [1]a revolution before tomorrow morning.” – Henry Ford

What is so complex about the banking & monetary

systems that can be intrusive enough to create a

revolution?

Well, it's all about money.

What is money?

“Money serves as a medium of exchange and a store

of value”.

In earlier phases of human civilization, “barter” was

the medium of exchange whereby goods and services

were exchanged for other goods/services of like value.

However, such transactions faced numerous

problems such as determination of value, the

perishable nature of majority of goods, the intangible

nature of services, etc.

Hence humans soon felt the need to have a

standardized medium of exchange, which unlike

perishables/ intangibles, can be stored for practically

infinite period with a value assigned to it.

Enter the coin-age, wherein the intrinsic value of the

metal involved (say silver) was equal to the value

imprinted on the coin, i.e. its extrinsic value. So, say

if I wanted 'X' priced at Rs. 5,000, I would have to give

coins totalling to Rs. 5,000, as consideration, in

which even the silver content should be worth of Rs.

5,000.

If the intrinsic value becomes less than the extrinsic,

the price of 'X' will rise.

However, if the intrinsic value is more, this is what

will happen:

“…an Indian clerk named Dhirubhai Ambani, then barely

into his twenties, had an open order out in the souk

(marketplace) of Aden for as many Rials as were

available. Ambani had noted that the value of the Rial's

silver content was higher than its exchange value

against the British pound and other foreign currencies.

So he began buying Rials, melting them down, and [2]selling the silver ingots to bullion dealers in London.”

And again for its various disadvantages, money in

such form was practically stopped from circulation

in almost all the economies around the world.

Here we are in today's world, having fiat (token)

money in our pockets, currency notes or digital

cards/wallets where the intrinsic value is an asset

backing from the nation's government.

“I promise to pay the bearer the sum of……” is

mentioned on every note to assert that the currency

note is a legal tender. “Guaranteed by the Central

Government” is also mentioned, as the value

imprinted is backed by the government through it's

central bank i.e. The RBI.

Now what is asset backing?

The money which we use to transact is just token,

while there are reserves held to provide for the

guarantee on the currency. This is asset backing.

Certain Statistics:

thIndia, as on 30 June 2018 has asset backing in gold

& bullion worth Rs 743.49 billion. The notes issued

and in circulation in the economy are of Rs [3]19,119.60 billion. This obviously does not include

the money created by commercial banks, to which we

shall come later.

India's GDP (at 2018-19 prices) is estimated to attain

a level of Rs 1,88,410 billion and Net National [4]Income (NNI) to be Rs 1,67,030 billion.

(NNI is the sum of net income taken from all sectors, [5]including personal, business and government.)

HOW MONEY WORKS ? HOW MONEY WORKS ?

ARE WE SLAVES TO THE SYSTEM ?ARE WE SLAVES TO THE SYSTEM ?

VOL. 22 - NO. 9 - MAY - JUNE 2019

6


Basically, the value of only 0.45% of the Net Income of

our country has been backed by tangible assets. Yet,

there is no hyper-inflation situation like the one

which Zimbabwe experienced.

So, realistically, who is giving value to this money?

We, the people of this country. Our governments,

through the banking & monetary systems, bind us to

give value to this money.

How is value being given?

In two ways:

Time Value of Money, and

Taxation on Personal Income.

Time value of money:

Currency notes are papers on which some numbers

are imprinted by RBI, guaranteed by government.

Treasury bonds are also papers with some numbers

imprinted, payment of which is guaranteed by

government. If the government requires money

supply it will issue treasury bonds. Being the central

bank, RBI purchases treasury bonds issued by the

government and allows overdrawing by government.

Out of this transaction, money has just been

magically created!

Such money is then used for various purposes, say

public expenditure. When new inflow comes in the

economy, the markets as of that moment have not

adjusted their prices in correlation to the new inflow.

But by the time the inflow breaks down into the

smallest of the denominations, the markets would

have already adjusted its prices.

Although the RBI does consider various factors to

decide the quantum of notes to be printed, however,

every new inflow reduces the purchasing power of

money. The prices of goods and services rise, which

in return, call for proportionate increase in profits

and salaries. It's a never-ending cycle, any imbalance

can cause an economic fall.

Again coming back to treasury bonds, the

government got money only to the extent of principal

amount, as consideration. From where will the

government get money to pay for interest on those

bonds?

Enter the second way:

Taxation on personal income:

Commercial banks accept deposits and issue loans.

My net annual income is Rs. 1,00,000 in cash. After

Income tax @30% of Rs. 30,000, I deposit Rs. 70,000 [6]in the bank. Current CRR is 4% and SLR is 19.25%.

Let's assume the bank lends Rs. 50,000 out of my

deposits, to Mr. A, who buys plant and machinery

from Mr. B. Now Mr. B's income is Rs 50,000. Mr. B

will pay for his expenses. Now one man's expense is

another man's income. Further, say his net profit is

Rs. 10,000. He will have a tax liability of Rs 3,000 and

balance Rs. 7,000 is deposited in the bank, Rs. 5,000

of which can be lent further. Also assume that no

other party deposited any cash at bank.

Real cash deposit = Rs.70,000.

Bank generated assets due to lending

= Rs. 50,000 plant of Mr. A + Rs. 28,000 paid for

expenses by Mr. B (Rs 40,000-30%) + Rs. 7,000 in

hand of Mr. B

= Rs. 85,000, which is more than what the bank had

actually received as cash deposit.

Thus lending by commercial banks, magically

created money, again!

As per a 2016 Economic Times report, 92% of the [7]world's currency is digital. Imagine the amount of

money created by banks due to lending and also the

scope of generation of assets in future.

Further,

Income tax on real cash = Rs. 30,000.

Income tax due to lending

= tax on income of Mr. A + Rs 12,000 (30% of Rs

40,000) tax on money expended by Mr. B + Rs. 3,000

of Mr. B.

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7


Even indirect taxes would be collected on these

transactions, ultimately taxing the end consumer.

The government now has the money to pay interest

on those bonds, through the taxes which we pay.

This is how money works. They magically create it,

and we are bound to give value. It is, quite literally

backed on our time and tax.

Why did Henry Ford say that there will be a

revolution?

Simply because in such banking and monetary

systems, those who create money, control the

country. In earlier times, rains and war majorly

affected specific provinces. Today, actions of

governments and banks can affect, not only that

specific province or country, but the entire world at

large (ex.: 2008 crisis). Hence, the ones influencing

this creation and supply reap the benefits and also

enjoy various exemptions, while the others have to

put efforts to earn the magically created money and

pay tax too. This results in sharp economic

inequality.

[8]As per 2018 and 2019 Oxfam reports:

Worldwide, the richest 26 own the same as [9]the 3.8 billion poor half of humanity.

In India, top 10% own 73% of country's [10]

wealth.

Also, share of bottom 90% in India's national [11]income has declined after 1990.

The total wealth of India's knowledge-based

sectors (ex.: IT and pharmaceuticals) is $55

billion, but for those businesses relying on

government contracts (i.e. rent-thick [11]sectors), it is $132 billion.

In 'Commitment to Reducing Inequality (CRI)

Index' India ranks 147th among 157 [12]countries.

Point to ponder:

We all acquire education and skill to be productive in

this society, which rewards in terms of money,

created by such banking and monetary systems.

Shouldn't everyone be made aware of the system?

Would they appreciate it? Or find ways to move out of

the system?

Think over it. Think different!

VOL. 22 - NO. 9 - MAY - JUNE 2019

8


Compiled by:

CA Bharat K. Gosar

The Maharashtra State Government has announced Amnesty Scheme, 2019 vide Ordinance No. V of 2019 thdated 06/03/2019 and it is followed by Trade Circular No. 08T of 2019 dated 08 March, 2019 and Trade

thCircular No. 20T of 2019 dated 15 May, 2019.

This Amnesty Scheme is introduced to settle down tax disputes administered by the Sales Tax Department for thany period upto 30 June, 2017. This scheme aims to close pending cases on fast track mode and give

concession to the dealers in Government dues. This scheme will have two phases. First one is from

01.04.2019 to 30.06.2019 and second one is from 01.07.2019 to 31.07.2019.

The scheme covers all the Acts administered by the Sales Tax Department i.e.

(i)) The Maharashtra Value Added Tax Act, 2002;

(ii) The Central Sales Tax Act, 1956;

(iii) The Bombay Sales of Motor Spirit Taxation Act, 1958;

(iv) The Bombay Sales Tax Act, 1959;

(v) The Maharashtra Purchase Tax on Sugarcane Act, 1962;

(vi) The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975;

(vii) The Maharashtra Sales Tax on the Transfer of Right to use any Goods for any Purpose Act, 1985;

(viii) The Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987;

(ix) The Maharashtra Tax on Luxuries Act, 1987;

(x) The Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works

Contract (Re-enacted) Act, 1989;

(xi) The Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002.

This scheme will have two phases. First one is from 01.04.2019 to 30.06.2019 and second one is from

01.07.2019 to 31.07.2019.

MAHARASHTRA AMNESTY SCHEME, 2019MAHARASHTRA AMNESTY SCHEME, 2019

Table-1

VOL. 22 - NO. 9 - MAY - JUNE 2019

9


a) For the periods upto 31st March 2010.

Table-2

(b) For the periods from 1st April 2010 to 30th June 2017.

The State Government intends to clear all arrears of tax, interest, penalty and fees whether under dispute or

not. For this, we need to understand some important terms defined in the Ordinance.

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Important Definitions:

Section 2 (1)(C): “arrears of tax, interest, penalty or late fee” means the amount of tax, interest, penalty or

late fee, as the case may be,—

(i) payable by an assessee as per any statutory order under the Relevant Act; or

(ii) admitted in the return or, as the case may be, the revised return filed under the Relevant Act and which

has not been paid either wholly or partly; or

(iii) determined and recommended to be payable by the auditor, in the audit report submitted as per section

61 of the Value Added Tax Act, and accepted by the assessee either wholly or partly, whether the notice

under section 32 or 32A of the Value Added Tax Act has been issued or not; or

(iv) in respect of which a notice has been issued, in relation to any proceeding under the Relevant Act; or

(v) determined to be payable by the assessee where no notice in relation to any proceeding under the

Relevant Act is issued,

and such arrears of tax, interest, penalty or late fee, pertains to specified period;

“Return dues” means the amount of tax, interest or late fee, admitted the return or the revised return filed

under the Relevant Act in respect of the specified period but which has remained unpaid either wholly or

partly, at any time on or before the 15th July, 2019;

“Disputed tax” means the tax other than the un-disputed tax

“Undisputed tax” means

(i) the taxes collected separately under the Relevant Act; or

(ii) The deductions allowed by the authorities in the statutory order for the taxes collected separately under

the Relevant Act like deduction under Rule 57 of MVAT Act or under Rule 46A of BST Act; or

(iii) The taxes shown payable in the return or the revised return under the Relevant Act; or

(iv) An amount claimed by the dealer as deductions or allowed by the designated authority as per rule 57 of

the Value Added Tax Rules or similar rules made under other Relevant Act; or

(v) An amount forfeited under the statutory order or excess tax collection shown in the return, revised

return or, Audit report, as the case may be, submitted under the Relevant Act; or

(vi) Any amount of tax, interest or late fee determined and recommended to be payable by the auditor, in the

audit report submitted as per section 61 of the Value Added Tax Act, and accepted by the assessee either

wholly or partly; or

vii) The tax deducted at source (TDS) by the employer under the Relevant Act; or

(viii) The tax collection made under section 31A of the Value Added Tax Act;

Adjustment of any payment already made before 1st April, 2019:

(1) Any amount of tax, interest, penalty or late fee payable as per statutory order pertaining to the period

ending on or before the 30th June 2017 and if any payment in that respect is made after the date of the

said statutory order and on or before the 31st March 2019, then such payment shall first be adjusted

against the tax and thereafter towards the interest and the balance amount remaining unadjusted shall

then be adjusted towards the penalty and late fee, sequentially,

VOL. 22 - NO. 9 - MAY - JUNE 2019

11


(2) After adjustment of the amount paid on or before the 31st March 2019, the amount remaining as on the

1st April 2019 shall be considered as an arrears and the requisite amount for settlement of said

outstanding amount shall be determined depending upon the fact that whether the arrears pertains to the

period upto 31st March 2010 or pertains to the period starting from 1st April 2010 and ending on 30th

June 2017 and also whether the applicant has submitted the application for settlement and made the

payment of the requisite amount before the last date provided for the said payment and submission of

application under the First Phase or the Second Phase.

(3) Further the amount of arrears in respect of the specified period towards the return dues or the tax,

interest or late fee as recommended to be payable by the dealer, in the audit report, by the auditor and

accepted by the dealer wholly or partly, any amount paid towards the arrears on or before the 31st March

2019 shall be subjected to adjustment in the order of tax, interest and late fee. After such adjustment, the

amount outstanding as on 1st April 2019 shall be considered as the amount available for the settlement.

(4) It may be noted that arrears of tax, interest or late fee in respect of the returns or revised returns for the

specified period that are filed or arrears of tax, interest, penalty or late fee payable as per statutory orders

that are passed after the 15th July 2019 shall not be eligible for the settlement.

(5) Similar provisions shall also be applicable to the statutory orders including the order passed in appeal or

order passed by the Tribunal. In case such orders are passed after 15th July 2019, no settlement shall be

available against the arrears of tax, interest, penalty or, as the case may be, the late fee.

(6) Waiver from late fees in respect of the returns filed during the amnesty period shall be available for the

settlement.

(7) Subject to the other provisions of this Ordinance, an applicant whether registered or not under the

Relevant Act, shall be eligible to make an application for settlement of arrears of tax, interest, penalty or l

ate fee in respect of the specified period, whether such arrears are disputed in appeal or not.

(8) The applicant, who has availed benefits under earlier 2016 Amnesty will also be eligible to make an

application under this Ordinance.

Conditions for settlement of arrears:

(1) The applicant shall make a separate application for each class of arrears on or before the last date

provided for the period of Phases mentioned in Annexure-A or Annexure-B.

(2) The application is required to be uploaded online to the nodal officer in Form-I and Form-IA as the case

may be.

(3) Every such application shall be accompanied by the proof of payment of the requisite amount as

determined and the copy or order against which amnesty is preferred.

(4) Where any appellate authority including Tribunal or the Court has remanded case back to any authority

under the Relevant Act, for giving effect to the directions given therein and such order has not been passed

on or before the 15th July 2019, then such cases shall not be eligible for settlement under this Ordinance:

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Provided that, the applicant can settle the amount of tax, interest, penalty or late fee as per the directions

given by the said authority or the Court and in case, no such specific directions are given then such tax,

interest, penalty or late fee can be determined by the applicant on his own and can upload application in

Form-IA.

(5) Under any circumstances, the applicant shall not be entitled to any waiver in respect of undisputed tax.

(6) No application under this Ordinance shall be entertained in respect of the applicant, who has taken the

credit of set off under the Relevant Act, in the Electronic Credit Ledger, provided under the Goods and

Services Tax Act, unless the credit equivalent to the amount for which the settlement application is filed is

reversed by debiting the Electronic Credit Ledger or the Electronic Cash Ledger, on or before the date of

submission of application for settlement.

Withdrawal of appeal:

(1) Where the applicant has filed the appeal, reference, Writ Petition, Special Leave Petition, then withdrawal

of such appeal, reference, Writ Petition, Special Leave Petition shall be condition precedent for availing

the benefits under the Ordinance. The acknowledgement shall be treated as sufficient proof towards the

withdrawal of appeal

(2) However, if in respect of any order, audit objections have been raised and an appeal is preferred against

that order, then the appeal shall not be allowed to be withdrawn. The appellate authorities shall dispose of

such appeals expeditiously. Similarly proceeding of revision/ reassessment/rectification initiated in

pursuance of audit objections shall be completed expeditiously so that dealer can avail the benefit of

settlement. The dealers are requested to approach and co-operate with the concerned authorities for

early disposal of such cases.

(3) Appellate authority including Tribunal is required to pass the order allowing the withdrawal of appeal

either fully or partly as desired by the appellant. This facility is provided so that the maximum cases and

arrears is settled under the Ordinance.

(4) Where, the applicant, desires to withdraw the appeal in respect of certain issues and desires to continue

the appeal for certain other issues, then, the said applicant shall specify details in the appeal withdrawal

application in Form-II about the issues against which the appeal is withdrawn and issues against which

the appeal is continued.

(7) The applicant shall specify, in the said appeal withdrawal application the amount of tax, interest, penalty

or the late fee corresponding to tax, interest, penalty or late fee vis-a-vis issues for which the appeal is

desired to be withdrawn and for which the settlement application is desired to be filed. Further, the

applicant shall also mention in the settlement application the amount of tax, interest, penalty or late fee

for which the settlement is desired.

Verification of correctness and completeness of application and issuance of defect notice:

1) The designated authority shall verify and confirm that the application is accompanied with documents

mentioned in the application form.

(2) On verification of the application, in case it is noticed that, the said application is incorrect or incomplete

or the requisite amount paid is deficient, then, the nodal officer shall issue defect notice, as far as possible

within fifteen days from the date of receipt of the application, and intimate the applicant about the defects

in the application along with the details of the requisite amount to be paid:

VOL. 22 - NO. 9 - MAY - JUNE 2019

13


Provided that, the defect notice in respect of an application shall be issued only once.

(3) The applicant shall, within fifteen days of the receipt of the defect notice, correct the defects and make the

payment, if any, and submit such application to the designated authority:

Provided that, in no case, the applicant shall be permitted to make such payment, as specified in the

defect notice, after the 31st July 2019.

(4) In case the applicant fails to correct the defects so communicated including the additional payment, if any,

then, the nodal officer may, for reasons to be recorded in writing and after giving him an opportunity of

being heard, pass an appropriate order:

Provided that, the designated authority, subject to the provisions of the Ordinance shall not deny the

proportionate benefits as may be available to the said applicant considering the Phase in which the

requisite amount is paid.

Settlement of arrears and passing of order of settlement:

(1) If the designated authority is satisfied that the applicant has paid the requisite amount determined,

then the nodal officer shall pass an order and provide the copy of the said order to the applicant and

thereupon, notwithstanding anything contained in the Relevant Act, such applicant shall be

discharged of his liability to the extent of the amount of waiver specified in the order of the settlement.

(2) Where, the application for settlement of arrears of tax, interest, penalty or late fee is not in accordance

with the provisions of this Ordinance, then, the nodal officer may, by order, in writing, reject the

application, after giving an opportunity of being heard to the applicant.

(3) The nodal officer may, on his own motion or on application of the applicant, within six months from the

date of the receipt of the order of the settlement by the applicant, rectify any error apparent from the

record after giving an applicant an opportunity of hearing.

Appeal against Amnesty Order:

(1) An appeal against the amnesty shall lie to,—

(a) The Deputy Commissioner of Sales Tax, if the order is passed by the authority subordinate to him;

(b) The concerned Joint Commissioner of Sales tax, if the order is passed by the Deputy Commissioner of

Sales Tax, concerned.

(2) The appeal shall be filed within sixty days from the date of receipt of the amnesty order and no appeal filed

thereafter shall be entertained unless the delay is condoned appellate authority.

Credit of tax payment, if Amnesty rejected:

Under no circumstances, the applicant shall be entitled to get the refund of the amount paid under

Amnesty Scheme.

However, the amount paid by the applicant under Amnesty Scheme shall be treated to have been paid under

the respective Act.

VOL. 22 - NO. 9 - MAY - JUNE 2019

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List of Forms:

The list of Forms to be used under this Ordinance are given in the Table-4 below:

Table-4

VOL. 22 - NO. 9 - MAY - JUNE 2019

15


Typically month of May in the calendar year is a relaxing month for a Chartered Accountant. There are no due

dates of various major compliances to be adhered to. However, this year GST Annual return and audit season

is upon us.

These compliances are being carried out for the first time. Hence, one needs to be extra cautious as to how to

efficiently comply with legal provisions and forms. The best way to commence any compliance related work is

to have some kind of a checklist or data template ready. All data / information is collected at one go and nothing

major is missed out.

Brief background

1. GSTR 9 is to be filed by all registered persons other than Input Service Distributor, a person paying tax

under section 51 or section 52, a casual taxable person and a non-resident taxable person.

2. It is to be furnished online before 30th June 2019 pertaining to FY 2017-18

3. GSTR 9 cannot be revised

4. FORM GSTR-1 & FORM GSTR-3B pertaining to FY 2017-18 are required to be filed before the filing of

return FORM GSTR-9

5. Supplies 'made during the year' needs to be reported instead of 'as declared in returns filed during the year'

courtesy of Notification No 74/2018 – Central Tax dated 31st December, 2018. Now additional liability, if

any, can be reported.

6. FORM GSTR 9 cannot be used to avail ITC. If taxpayer has failed to avail ITC pertaining to FY 2017-18

upto due date of filing GSTR 3B return of March 2019, then said ITC shall be lapsed.

7. Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in

this form, through FORM DRC-03. Taxpayers shall select ― Annual Return in the drop down provided in

FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger only.

8. HSN summary of inward supply are required to be declared only for those inward supplies which in value

independently account for 10 % or more of the total value of inward supplies.

9. Decent knowledge of GST legislation and provisions is a pre-requisite to carry out these assignments.

10. Understanding the nature of business of the taxpayer

11. Though persons to whom GST audit is not applicable (turnover below Rs. 2 crores), the information to be

reported has to be thoroughly verified as per books of accounts and Income tax return filed so that any

liability may not arise in future assessments.

Keeping in mind above facts and information, it is best practise to prepare a data sheet template in which

all the relevant details pertaining to GST annual return can be captured

Compiled by:

CA Chintan Rambhia

CHECKLIST FOR GSTR 9CHECKLIST FOR GSTR 9

KEY INFORMATION AND REPORTS REQUIRED TO COMMENCE FILING ANNUAL RETURN IN FORM GSTR- 9

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Key information / reports that could be a part of the data template sheet.

State specific invoice wise detail Outward Supplies made during the year. Following information may be called for:

o Name of the Partyo GSTIN of Recipiento Invoice Numbero Invoice dateo Period which shown in GSTR 1o Total Invoice Valueo Place of Supplyo Invoice Typeo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies

State specific invoice wise detail Credit / Debit notes against sales invoices issued during the period 1 July

2017 to 31 March 2018. Following information may be called for:

o Name of the Partyo GSTIN of Recipiento Credit / debit note numbero Invoice dateo Original Sales Invoice numbero Original Sales Invoice dateo Period which shown in GSTR 1o Total Invoice Valueo Place of Supplyo Reason for issuanceo Document typeo Whether Pre GSTo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies

State specific invoice wise details of Advance received for outward supplies during the year. Following information may be called for:

o Name of the Partyo GSTIN of Recipiento Receipt voucher noo Receipt dateo Total Value received

VOL. 22 - NO. 9 - MAY - JUNE 2019

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o Place of Supplyo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplieso Original invoice no adjustedo Original invoice date adjustedo Refund voucher noo Refund voucher date

Reconciliation of outward supplies reported in books of accounts, GSTR 3B and GSTR 1 and Income tax returns

State specific invoice wise details of RCM payable under Section 9 (3) and Section 9 (4) of CGST Act. Following information may be called for:

o Name of the Suppliero GSTIN of Recipiento Invoice Number / Self invoice numbero Invoice dateo Total Invoice Valueo Place of Supplyo Nature of expenseo Accounting ledger Nameo GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGST

State specific invoice wise details of inward supplies and returns on which ITC is availed. Following information may be called for:

o Name of the Suppliero GSTIN of Suppliero Invoice Numbero Invoice dateo Total Invoice Valueo Place of Supplyo Supplier Typeo Whether Goods or Serviceo Account ledger (to verify eligibility of ITC)o GST Rateo Taxable Valueo IGSTo CGSTo SGST / UGSTo Cess Amounto Exempt / NIL rated supplieso Non-GST supplies

VOL. 22 - NO. 9 - MAY - JUNE 2019

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o Date of goods receivedo Date of paymento Year in which ITC claimed in GSTR 3Bo Reflected in GSTR 2A (Y/N)

State specific HSN summary of inward and outward supplies during the year

o Descriptiono HSNo Unit of measuremento Total Quantityo Total value o Total Taxable Valueo IGST o Central Tax o State Tax o Cess

State specific GST payable / paid reconciliation between books and GST returns for year ending 31 March 2018

State specific details of credits availed in GST FORM TRAN-1

State specific details of demands and refund claimed in following format

A working pertaining to reversal of ITC under Rule 42, 43 of CGST Rules 2017 can also be prepared if said provisions are attracted

Monthly and annual summary of figures reported in Form GSTR 3B and Form GSTR 1 and its comparison

Any other information as may be deemed fit

Details CGST SGST IGST Cess Interest Penalty Late Fees /

Other

Total Refund claimed

Total refund sanctioned

Total refund rejected

Total refund rejected

Total demand of taxes

Total taxes paid in respect of above demand

Total demands pending to be paid out of above demand

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Compiled by:

E Way Bill System with the Forthcoming changes in E-Way bill system dated 25-03-2019 &

23-04-2019 and consequences of not adhering to E-Way Bill norms

The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the government to plug in

the leakage in revenue. It has substituted the Way Bill of the earlier VAT-excise regime.

A consignor/consignee/transporter is obligated under GST law to generate the Electronic Way Bill. The Bill has

to be generated for the transportation of any consignment that is valued at over Rs. 50,000. However as per

Notification No 15E/2018- State Tax issued by Commissioner of State Tax, Maharashtra State, no e-way bill

shall be required to be generated for the intra-state movement in the state of Maharashtra, in respect of any

goods not exceeding RS 1 Lakh and in respect of Hank, Yarn, fabric and Garments if are transported for a

distance of up to fifty kilometers within the state of Maharashtra for the purpose of Job work of any value.

The GST law stipulates that designated field officers can intercept vehicles carrying goods. The officers can

check documents like invoices and e-Way Bills. The verification process can be conducted at any time and at

any place by mobile squads as check posts have been abolished under GST.

If any vehicle transports goods without the Digital e Way Bill, authorities can detain and seize the vehicle

containing the goods. The goods are only released when the appropriate tax and penalty are paid. If the

requisite tax and penalty are not paid within seven days of the detention, authorities can confiscate both the

goods and the vehicle.

The consequences

There are several consequences for not generating and carrying the e Way Bill:

a) It may so happen that tax has been paid on the basis of an invoice generated for the supply of goods but the e

Way Bill has not been generated. In such a case, there is no tax-related implication. However, if caught, the

authorities may levy a fine of Rs. 10,000.

Even if the appropriate taxes are paid, the authorities can allege that the e Way Bill was not generated as the

consignor wanted to evade paying the applicable tax. Therefore, the authorities will be in their limits to impose

a penalty that is equivalent to the tax amount being evaded.

b) Seizure of goods may result in disruption of routine operations of a business. Other businesses may not be

able to allow for the delay in delivery or receipt of goods due to confiscation during transit.

c) Any proceeding for non-compliance against any business is sufficient to put a dent in that business's

reputation. The authorities could take action on other GST assessments. Furthermore, there is always a

chance of future consignments being stopped and checked by authorities. This will lead to unnecessary

hassles.

CA Jinesh P. Gada,

B.Com, A.C.A, ISA, M.B.A., DIP (IFR), U.K.,

E-WAY BILL SYSTEME-WAY BILL SYSTEM

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Central Board of Indirect Taxes and Customs has issued Notification No. 22/2019- Central Tax dated 23-04-

2019 and appointed 21-06-2019 as the date from which the provisions of the Central Goods and Service Tax st(Fourteenth) Amendment Rules, 2018 Rule 12 of (Notification No. 74/2018 – Central Tax dated 31 Dec 2018

shall come into force.

Rule 12 as mentioned above is reproduced as below

12. In the said rules, after rule 138D, from a date to be notified later (now notified date is 21-06-2019), the

following rule shall be inserted, namely:-

“138E. Restriction on furnishing of information in PART A of FORM GST EWB-01.- Notwithstanding anything

contained in sub-rule (1) of rule 138, no person (including a consignor, consignee, transporter, an e-

commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST

EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,— (a) being a person

paying tax under section 10 (paying tax under Composite scheme), has not furnished the returns for two

consecutive tax periods; or (b) being a person other than a person specified in clause (a), has not furnished

the returns for a consecutive period of two months: Provided that the Commissioner may, on sufficient cause

being shown and for reasons to be recorded in writing, by order, allow furnishing of the said information in

PART A of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him:

Provided further that no order rejecting the request of such person to furnish the information in PART A of

FORM GST EWB 01 under the first proviso shall be passed without affording the said person a reasonable

opportunity of being heard: Provided also that the permission granted or rejected by the Commissioner of

State tax or Commissioner of Union territory tax shall be deemed to be granted or, as the case may be, rejected

by the Commissioner. Explanation:– For the purposes of this rule, the expression ―Commissioner� shall

mean the jurisdictional Commissioner in respect of the persons specified in clauses (a) and (b).

My Comments:

So after 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax periods then

Part 'A' of Form GST EWB-01 shall be disallowed to be furnished by any person including a consignor,

consignee, transporter, an e-commerce operator or a courier agency. So if Supplier or Receiver has not filed

April 2019 & May 2019 GST returns if they are supposed to file monthly return then from 21-06-2019, PART

'A 'of Form GST EWB-01 shall not be allowed to be filed by any person including a consignor, consignee,

transporter, an e-commerce operator or a courier agency.

However the jurisdictional Commissioner may, on sufficient cause being shown and for reasons to be

recorded in writing, by order, allow furnishing of the said information in PART 'A' of FORM GST EWB 01,

subject to such conditions and restrictions as may be specified by him. Commissioner may also reject the

request after affording the said person a reasonable opportunity of being heard.

So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.

Forthcoming changes in e-Waybill system Dated 25-03-2019

1. Auto calculation of route distance based on PIN code for generation of EWB. Now, E-waybill system is being

enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source

and destination locations. That is, the e-waybill system will calculate and display the actual distance between

the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of

goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has

displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the

actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the

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user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the

user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having

INVALID PIN codes are flagged for review by the department.

Route distance calculation between source and destination uses the data from various electronic sources.

This data employs various attributes, for example: road class, direction of travel, average speed, traffic data

etc. These attributes are picked up from traffic that is on National highways, state highways, expressways,

district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the

distance between two postal pin codes. The distance thus derived is then provided as the motorable distance

at that point of time.

My Comments:

As, many factors are considered in auto calculating distance so chances of more than 10% variation (which is

not allowed ) by user while entering the actual distance as per his movement of goods and auto calculation of

route distance by system will be remote. The said change is a welcome change & would like to stop entering

fake distance in km by user.

2. Blocking of generation of multiple E-Way Bills on one Invoice/document Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties - consignor, consignee or transporter - can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.

My Comments:

One Invoice, One E-way bill is also a welcome change to find out correct consignment value per E-way bill per

Invoice no. So Government will get correct Management Information System (MIS). Also one has to decide

beforehand who will generate E – Way bill consignor, consignee or transporter.

3. Extension of E-Way Bill in case Consignment is in Transit the transporters had represented to incorporate

the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on

Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.

During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit

or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On

selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the

extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-

way Bill for calculation of distance for movement and validity date. Route distance will be calculated as

explained above.

4. Blocking of Interstate Transactions for Composition dealers. As per the GST Act, the composition tax

payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way

bill for inter-state movement, if the supplier is composition tax payer. Also, the supplies of composition tax

payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of

Composition tax payer, document type of Tax Invoice will not be enabled.

My Comments:

More system controls are introduced in E – way bill system for composition tax payers which are in line with

GST Act.

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Below is the data of e-way bills for the year 2018-2019

One year of successful Journey (2018 - 19)

Few case laws on E-Way Bills

1) After the case of Madhya Pradesh High Court, bench at Indore, W.P. No 12399 of 2018, Kintetsu

Express Pvt Ltd V/S Commissioner, Commissioner Tax of MP & others, we will come to know the

importance of generation of correct e-way bill.

Treating the e-way bill as merely a 'procedural' requirement can have serious consequences, as the Madhya

Pradesh High Court's dismissal of a petition makes the same quiet clear. The petitioner is a Private Limited

Company engaged in the business of muti model transportation of shipments, supply chain management and

other allied services such as door to door pick-up and delivery of the shipments etc. Under the SGST Rules,

the petitioner was required to carry an e-way bill generated in Form GST EWB-01, with details filled in both

Part A and Part B of the form. The petitioner, however, had not filled details of conveyance in Part B of the e-way

bill. The vehicle was intercepted by the authorities and since Part B of the form was incomplete, the authorities

passed an order demanding tax on the value of the goods Rs 19,52,264 as well as a penalty equal to the tax

liability. The penalty was subsequently increased to the value of the goods (INR 1,12,61,419) as the owner of

the goods appears to have failed to present himself before the authorities.

Aggrieved by the order and the rejection of its appeal before the Appellate Authority, the petitioner filed a writ

petition before the Madhya Pradesh High Court. The High Court dismissed the writ petition against the order

of the Appellate Authority, observing that:

The judgment of VSL Alloys relied upon by the petitioner (a similar case in which the penalty was

withdrawn) was not applicable to the present case as VSL Alloys was not liable to fill up Part B. While

the distance was less than 50 km for VSL Alloys, it was 1,200-1,300 km in the given case. Thus, it was

mandatory for the petitioner to file Part B of the e-way bill.

The petitioner violated the provisions of GST Act and the penalty was appropriately levied.

The argument of a technical error could not be accepted by the authority because the portal of the

goods or service tax provides for an option of the grievance in case the petitioner was having any

problem in updating the Part B of the e-way bill. No such grievance has been raised by the petitioner

and has never given any written grievance so that the grievance with regard to the updating the

technical error could not have been considered.

2) In 'Vikram Solar Private Limited V. Union of India' – 2018 (4) TMI 1139 - ALLAHABAD HIGH COURT

(decided on 04.01.2018) the petitioner has challenged the seizure order dated 16.12.2017 passed

No. of e-way bills generated 5577 Lakhs

No. of inter-state e-way bills generated 2487 Lakhs

No. of intra-state e-way bills generated 3090 Lakhs

No. of Tax Payers Registered in EWB 28.89 Lakhs

No. of Transporters enrolled in EWB 0.41 Lakh

VOL. 22 - NO. 9 - MAY - JUNE 2019

23


under section 129(1) of UPGST Act. A show cause notice was issued in this regard under section

129(3) of the Act. The goods have been carried from West Bengal to Ghaziabad. The ground for seizure

is that the E-way bill had not been downloaded. It has come on record that before seizure there was

some problem in downloading the E-way Bill. The High Court directed to release the vehicles and

goods subject to deposit of bank guarantee, equal to the value of the tax on goods.

3) In 'Abicor and Binzel Technoweld Pvt. Ltd. Versus The Union of India and Another' - 2018 (2) TMI 766 -

BOMBAY HIGH COURT, the petitioner says that the Electronic Way Bills Rules have yet to come into

force. Therefore, without access to the online profile, the petitioner cannot generate E-way bills.

Without such E-way bills, the petitioner will not be allowed to move the goods anywhere and that will

paralyze its business. Lack of access would mean that the petitioner is unable to file return or pay tax

or undertake any other compliance required by the statute. The High Court held that the special

sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the

assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. The

High Court hoped and trusted that those in charge of implementation and administration of this law

will at least now wake up and put in place the requisite mechanism.

4) In 'M/s Vinayaga Roofings V. Asst. State Tax Officer' - 2018 (5) TMI 368 - KERLA HIGH COURT (decided

on 27.04.2018) the petitioner challenges the detention of his vehicle ordered. He says that the primary

reason is that the consignment was not supported by e-way bill and though he concedes that this is a

violation of the statutory rules, he offers to furnish bank guarantee for the entire amount for releasing

the vehicle. The High Court ordered the petitioner to furnish a bank guarantee for an amount of Rs.

1,12,148/-, and on the petitioner executing a bond under Rule 140(1) of the CGST Rules. As soon as

the bank guarantee is furnished and the bond is executed, the vehicle will be released to the petitioner.

Conclusions:

1) The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the

government to plug in the leakage in revenue.

2) Consequences of not generating E Way bill as per GST Acts & Rules are very high which is

explained by giving few case laws on E Way bills so one has to be careful while generating E Way

bills.

3) Whether consignor, consignee or transporter will generate e way bill is to be decided

beforehand as now One Invoice, One E Way Bill policy will be followed. One Invoice, One E-way

bill is also a welcome change to find out correct consignment value per E-way bill per Invoice

no. So Government will get correct Management Information System (MIS). 4) Now, E-waybill system is being enabled to auto calculate the route distance for movement of

goods, based on the Postal PIN codes of source and destination locations. User is allowed to

enter the actual distance as per his movement of goods. However, it will be limited to 10% more

than the displayed distance for entry.

5) After 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax

periods then Part 'A' of Form GST EWB-01 shall be disallowed to be furnished by any

person including a consignor, consignee, transporter, an e-commerce operator or a courier

agency. So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.

VOL. 22 - NO. 9 - MAY - JUNE 2019

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Compiled by:

GST: RECENT JUDICIAL PRONOUNCEMENTS

SC stays Gujarat HC decision which held Section 140(3)(iv) ultra-vires

Details: Union of India V/s. Filco Trade Centre

Pvt. Ltd.

Appeal Number: Special Leave to Appeal (C)

No(s). 32709-32710/2018

Date of Judgement: 02/01/2019

View of Gujarat High Court: Gujarat High Court

held that one year restriction u/s. 140(3)(iv) of CGST

Act , 2017 to c la im t rans i t iona l c red i t i s

unconstitutional since duty paid on inputs is as

good as tax paid and creates a vested right, which

cannot be taken away by introducing a condition

with retrospective effect. Judgement was

delivered in Special Civil Application No. 18433

of 2017 dated 05/09/2018.

Decision: Bombay High Court had taken a

different view which was in favour of the

Government but the same was not followed by

the Gujarat High Court in the impugned

judgment. In view of difference of opinion

between the High Courts, operation of

Judgement of Gujarat High Court is stayed.

SC to clarify position of lawon power to arrest

under GST

Details: Union of India V/s. Sapna Jain & Others

(Supreme Court of India)

Appeal No.: SLP(Crl.) Nos. 4322-4324/2019

Date of Judgement : 29/05/2019

Fact: The petitions contest the power of the

Revenue to make arrests for contravention of the

provisions of the GST Act.

Outcome: As the different High Courts took

divergent views in this regard, the position of law

must be clarified by Supreme Court.

Remark cum interim decision by Supreme

Court: While entertaining any such requests in

future, the order of the Telangana High Court be

kept in mind, which has said that individuals

can't be given protection from arrest in such

cases. This order has earlier been upheld by the

apex court.

Decision: The present matters as well as

connected matters be listed before a three judge

Bench to decide the question of law on the power

of arrest.

No Stay on arrest for GST evasion; FIR

Maintainable: Allahabad HC

Details: Govind Enterprises V/s. State of U.P.

(Allahabad High Court)

Appeal No.: Criminal Misc. Writ Petition No. -

7303 of 2019


FIR Details: The dealer fraudulently, with a

dishonest intention, by submitting false

documents, with an intention to evade taxes,

obtained registration, thereafter, took inward

supply and passed on the goods to end users,

without generating outward supply bills, received

money in cash and deposited the same in bank

account which was not declared at the time of

seeking registration.

Assessee's Arguments: Except for offences

specified in 132(5), 132(4) of the U.P. Act renders

all offences under the U.P. Act non cognizable,

therefore no FIR can be lodged.

Decision: Court has observed that in a few

decisions of the Apex Court, it has been held that,

in suitable cases, to ensure that a person's liberty

is not jeopardized, on account of false

implication, protection from arrest, pending

investigation, may be granted by superior courts

but that power is not ordinarily to be exercised in

matters relating to economic fraud. As, in such

matters, stay on arrest may become a hurdle in

thorough investigation of the matter, particularly

in tracing out the money trail. Under the

VOL. 22 - NO. 9 - MAY - JUNE 2019

25

CA Nitin D. Kenia CA Bharat K. Gosar


circumstances, High Court did not find this to be

a fit case where any relief should be granted.

HC denies bail in Wrongful availment of GST

input tax credit Madhya Pradesh HC :

Details: Jagdish Kanani V/s. Commissioner,

CGST & CE

Appeal No.: M. Cr. C. No. 3472/2019


Facts: Assesse along with main accused created

many bogus and fake firms and issued fake

invoices to get the input tax-credit through these

invoices and defrauded the Govt. Exchequer. In

his statement, he has admitted that he did not

receive any goods physically nor he sold any

goods and he did not submit any GST return.

Assesse's Arguments: His statement has already

been recorded and his custody is not required for

further investigation and he will cooperate in

further investigation, if any, and is ready to

appear before the respondent/prosecution as

and when his presence is required. The

investigation may take long time to conclude,

hence he deserves to be released on bail.

Department view: The statement recorded by

the petitioner is admissible in evidence and

which can be used against him in the trial as held

by this Court in the case of M/s. R.S. Company

V/s. Commissioner of Central Excise (CEA

No.24/2012) decided on 8/2/2017. The main

accused have not been arrested so far, hence the

bail application be rejected.

Decision: In view of the statement of the

petitioner recorded u/s. 70 of the GST Act and

the fact that the main accused have not been

arrested so far, in the considered opinion of this

Court, the petitioner is not entitled for grant of

bail.

Release of goods on furnishing security of immovable property Punjab and Haryana

High Court

Details: M/s. R.R. Enterprises And Another V/s.

State of Punjab

Appeal No.: CWP No. 28357 of 2018


Decision: The High Court has directed the department to release the goods and vehicle of

the petitioner after furnishing the immovable security within 2 days.

ITC (GST) denial for default of supplier-

Delhi HC issued notice to UOI

Details: Bharti Telemedia Ltd. V/s. Union of

India & Others

Appeal No.: W.P.(C) 6293/2019


Arguments: The provisions have been

challenged on the grounds that Section 16(2)(c),

proviso to Section 16(4) is violative to Article 14

of the Constitution of India. The Department has

been vested with all the powers to recover any

revenue lost owing to non-payment of taxes by

erring suppliers. The credit cannot be denied to

the recipient for the default on the part of

supplier. Decision: Delhi HC has issued a notice to Union

of India and the matter will be heard on 18/09

2019.

HC Stays recovery of interest demanded on

gross GST liability : Delhi HC

Details: M/s. Landmark Lifestyle V/s. Union of

India & Others (Delhi High Court)

Appeal No.: WP(C) No. 6055/2019


Arguments: The calculation of the interest

payable for delayed payment of GST as

determined by the department is erroneous.

According to him, interest has been calculated

even on the amount constituting the input tax

credit which is in fact to be adjusted against the

tax liability. He states that on the actual tax

liability, interest has been paid by the Petitioner.

He further states that against the total tax

liability of Rs. 3.31 crores the interest liability

works out to Rs. 8.19 crores which makes it

unreasonable and erroneous.

Interim relief: No coercive action be taken

against the assesse for non-payment of the

interest amount.

Hearing: The matter will be heard on

30/09/2019.

VOL. 22 - NO. 9 - MAY - JUNE 2019

26


Interest on Gross amount without Allowing ITC : Telangana High Court

Deta i l s : M / s . M e g h a E n g i n e e r i n g & Infrastructures Ltd. V/s. The Commissioner of Central Tax

Appeal No.: Writ Petition No.44517 of 2018


Interpretation and decision: Until a return is

filed as self-assessed, no entitlement to credit

and no actual entry of credit in the electronic

credit ledger takes place. It is only after a claim is

made in the return that the same gets credited in

the electronic credit leger and it is only after a

credit is entered in the electronic ledger that a

payment could be made. The tax already paid on

the inputs of supplies of goods and services

available somewhere in the air should be tapped

and brought in the form of credit entry in the

electronic credit ledger and payment has to be

made from out of the same if no payment is made,

the mere availability of the same will not

tantamount to actual payment. Hence, the

liability to pay interest u/s 50(1) arises

automatically and the petitioner cannot escape

from this liability. Recommendations of the GST

Council in it's 31st meeting that interest should

be charged only on the net tax liability of the

taxpayer after taking into account the admissible

input tax credit as communicated in the Press

Release of the Ministry of Finance are still on

paper.

ITC allowed on inputs/services used for mall construction for letting out : Orissa High Court

Details: Safari Retreats Private Limited Vs Chief Commissioner of Central Goods & Service tax

Appeal No. W.P. (C) No. 20463 of 2018

�Date of Judgement: 17/04/2019

Arguments of Assesse: *The credit restriction

imposed u/s 17(5)(d) are meant or intended to be

sold post issuance of completion certificate.

Since such sale does attract GST, the tax chain

breaks. Since the mall would be rent out on

which GST will be levied, there is no distortion in

tax chain.

*Section 17(5)(d) does not restrict ITC on

inputs, where the buildings constructed are sold

before issuance of completion certificate. Thus,

it discriminates between the petitioner and other

assesses who are engaged into the business of

sale of immovable property, although both have

a continuous business. Such discrimination

shall be treated as violation of Article 14 of the

Constitution.

*Denial of ITC will tantamount to double-taxation which is against the principles of natural justice.

*Denial of credit is also violative of Article 19(1)(g) of the Constitution.

*Relied upon decision of the Apex Court Eicher

Motors. Ltd V/s. Union of India [(1999) 2 SCC

361] and Collector of Central Excise V/s. Dai

Ichi Karkaria [(1999) 7 SCC 448) to hold that

the credit of excise duty paid on inputs is

admissible if the raw material is to be used in the

production of excisable goods. That the right to

avail credit is indefeasible.

Defense by Revenue: Relied on IOCL V/s. State

of Bihar [TS–347-SC-2017-VAT] & Cellular

Operators Association of India and Others V/s.

UOI [2018-TIOL-310-HC-DEL-ST] further

Section 17(5) prescribes certain restrictions on

utilization of ITC, it would mean that the

legislature has decided in its wisdom the credit

of taxes which would not be allowed and

therefore such claim cannot be obtained

through judicial review.

Decision: The Hon'ble Court observed that the

narrow construction of interpretation put

forward by the department is frustrating the

very objective of the Act. The Hon'ble Court

relied upon Eicher Motors (Supra) and held

that the very purpose of credit is to give benefit

to the assesse, since the petitioner is liable to

pay GST on rental income, the corresponding

credit should not be restricted u/s 17(5)(d). The

provision cannot be held ultra-vires.

Do not levy Penalty for GST system problem due to design limitation: Delhi High Court

Details: Clix Capital Services (Pvt.) Ltd. V/s. Union of India (Delhi High Court)

Appeal No.: W.P. (C) No. 1486 of 2018

VOL. 22 - NO. 9 - MAY - JUNE 2019

27



The problem in system arose on account of

design limitation. The High court directed

department not to raise any demand towards

penalty, interest or late filing fee. Late fee, if any

paid, shall be refunded to the petitioner.

HC allows filing of GSTR-3B without payment of GST : Gujarat High Court

Details: Octagon Communications Pvt. Ltd. V/s. Union of India

Appeal No.: Special Civil Application No. 5873 of 2019

� Date of Judgement: 18/04/2019

Arguments of assesse: There is no condition for

making payment of tax as a pre-condition for

filing return of Form GSTR-3B. It was submitted

that in the absence of any such provision, the on-

line system of the respondents which does not

allow filing of returns without payment of tax

liability admitted as per such returns is contrary

to legal provisions.

Interim relief: The petitioner is permitted to file

manual returns in for the Form GSTR-3Bmonths November, 2017 onwards, which would

be subject to final outcome of the petition.

Decision: The matter will be heard on

13/06/2019.

VOL. 22 - NO. 9 - MAY - JUNE 2019

28


Compiled by:RECENT COMPOUNDING ORDERS RECENT COMPOUNDING ORDERS

1. Introduction:

Compound means to settle a matter by payment of penalty/fee. Compounding is a mechanism that

provides an opportunity to the party to accept the contravention and avoid further consequences after

paying off the monetary payment towards penalty for the contravention.

Under Foreign Exchange Management Act, 1999 (FEMA) the provisions of Section 15 permit

compounding of contraventions and, it empowers Reserve Bank of India (RBI) to compound any

contravention as defined under Section 13 of FEMA, except the contraventions under Section 3(a), on an

application made by the person committing such contravention.

2. Framework of Compounding under FEMA:

Compounding Proceeding Rules, 2000

Master Direction on Compounding of Contraventions

FAQs on Compounding of Contraventions

3. Compounding Process:

A contravention can be suo moto voluntarily admitted and disclosed to RBI or RBI can initiate on

becoming aware of the contravention. On receipt of application for compounding, RBI shall examine the

application based on documents and submissions made in the application and assess whether

contravention is quantifiable and, if so the amount of contravention. Following factors which are only

indicative are taken into consideration for the purpose of passing compounding order and adjudging the

quantum of sum on payment of which the contravention shall be compounded:

a. The amount of unfair advantage, wherever quantifiable.

b. Amount of loss caused to any authority/agency/exchequer as a result of the contravention.

c. Economic benefits accruing to the contravener from delayed compliance or compliance avoided.

d. Repetitive nature of contravention.

e. Track record and / or history of non compliance of contravener.

f. Contravener's conduct in undertaking the transaction and in disclosure of full facts in the application

and submissions made during the personal hearing.

Contraventions relating to any transaction where proper approvals or permission from the

Government or any statutory authority concerned, as the case may be, have not been obtained; such

29

UNDER FEMAUNDER FEMA CA Viral Satra


contraventions would not be compounded unless the required approvals are obtained from the

concerned authorities. Cases of contravention, such as, those having serious contravention suspected

of money laundering, terror financing or affecting sovereignty and integrity of the nation or where the

contravener fails to pay the sum for which contravention was compounded within the specified period

in terms of the compounding order, shall be referred to the Directorate of Enforcement for further

investigation and necessary action under FEMA, 1999 or to the authority instituted for

implementation of the Prevention of Money Laundering Act 2002, or to any other agencies, for

necessary action as deemed fit. In case where adjudication has been done by the Directorate of

Enforcement and an appeal has been filed under section 17 or section 19 of FEMA, 1999, no

contravention can be compounded in terms of Rule 11 of Foreign Exchange (Compounding

Proceedings) Rules, 2000. The applicant shall confirm in the undertaking required to be furnished

along with the compounding application that they have not filed any appeal under section 17 or section

19 of FEMA, 1999. Format of undertaking is prescribed in Master Direction on Compounding of

Contraventions.

RBI has to compound the application within 180 days from the date of receipt of such application.

2. Discussing some of recent Compounding Orders passed by RBI:

a. Acquisition of Agricultural Land by NRI in India

Name of Applicant Sha Mathew

Compounding Application No. C.A. No. 87 /2019 dated 08/03/2019

Authority and Jurisdiction Deputy General Manager,

Reserve Bank of India, New Delhi

Period of Contravention and Period – 5 years 10 months and 4 days

Compounding Fees Compounding Fees – Rs. 24,53,590/-

Facts of Case Mr. Shaw Mathew, NRI has been working in Mexico

since 2007. Since then he has been in Mexico for more

than 182 days in most of financial years. Mr. Mathew

being NRI acquired two agricultural properties in

Kerala in 2012 without obtaining prior permission of

RBI. The cost of both the properties was Rs.

16,38,700/-.

Contravention sought to be Regulation 8 of Notification No. FEMA 21/2000-RB

compounded dated May 03, 2000 states that save as otherwise

provided in the Act or regulations, no person resident

outside India shall transfer any immovable property in

India.

VOL. 22 - NO. 9 - MAY - JUNE 2019

30


Author's Comments In terms of Regulation 8 of FEMA 21, no person

resident outside India shall transfer any immovable

property in India. NRIs are not allowed to acquire

agricultural land in India. In the instant case, Mr.

Mathew being NRI had purchased two agricultural

lands for Rs. 16,38,700/- without prior RBI approval.

Since NRIs are not allowed to own agricultural land,

Mr. Mathew was asked to sale the agricultural land by

RBI and after sale of land RBI compounded the

contravention. Mr. Mathew received 40,30,000/-

towards sales consideration of both lands. He received

undue gain of Rs. 23,91,300/-. The undue gain of Rs.

23,91,300/- earned by Mr. Mathew was fully recovered

by RBI as compounding fees.

Name of Applicant Aricent Technologies (Holdings)

Compounding Application No. C.A. No. 4803/2018 dated 15/04/2019

Authority and Jurisdiction Chief General Manager,

Reserve Bank of India, Mumbai

Period of Contravention and Period – 3 years and 1 month

Compounding Fees Compounding Fees – Rs. 3,72,68,090/-

Facts of Case Aricent Technologies (Holdings) Limited was engaged in

business of providing all kinds of information technology

based and enabled services in India and abroad. With an

intent to expand its business, the company acquired

shares of Mauritius company from its existing

shareholders at USD 9,00,00,000 (Rs. 5,72,58,60,000/-)

. However, Mauritius company was already holding

investment in another Indian Company viz. Aricent

Technologies Private Limited. The resultant structure

amounted to making ODI in an entity with pre-existing

FDI.

Name of Applicant Aricent Technologies (Holdings)




Period of Contravention and Period – 3 years and 1 month

Compounding Fees Compounding Fees – Rs. 3,72,68,090/-

Facts of Case Aricent Technologies (Holdings) Limited was engaged in

business of providing all kinds of information technology

based and enabled services in India and abroad. With an

intent to expand its business, the company acquired

shares of Mauritius company from its existing

shareholders at USD 9,00,00,000 (Rs. 5,72,58,60,000/-)

. However, Mauritius company was already holding

investment in another Indian Company viz. Aricent

Technologies Private Limited. The resultant structure

amounted to making ODI in an entity with pre-existing

FDI.

c. Making ODI Investment in an entity already having investment in India

(Round Tripping)

VOL. 22 - NO. 9 - MAY - JUNE 2019

31


Contravention sought to be The resultant structure of ODI in an entity with

compounded pre existing FDI lead to contravention of Regulation 5(1)

of Notification No. FEMA 120/2004-RB. Such investment

is not allowed without prior RBI approval. Comments In

terms of Regulation 5(1) of FEMA 120, save as otherwise

provided in the Act, rules or regulations made or

directions issued or without prior approval of RBI, no

person resident in India shall make any direct investment

outside India. The transaction of making ODI in an entity

with pre-existing FDI without prior approval of RBI is

contravention of Regulation 5(1). ODI – FDI structure is

regularized by either unwinding FDI leg or unwinding

ODI leg of the transaction. RBI considers ODI-FDI

structure as round tripping and hence does not consider

the same as bonafide business activity for the purposes of

overseas investment even though overseas entity may be

an operating entity with permitted businesses. The act of

investing back to India is considered as 'non bonafide'

business activity.

d. Payables outstanding beyond three years considered as deemed ECB

Name of Applicant SNC Lavalin Engineering India Private Limited




Period of Contravention and Rs. 9,20,373/-

Compounding Fees

Facts of Case SNC Lavalin Engineering Private Limited engaged in

business of financing and asset management, engineering,

procurement, construction, training, operations and

maintenance is wholly owned subsidiary of SNC Lavalin

Inc., Canada. SNC Lavalin India received amounts

towards parental support from its parent company. Due

to liquidity problems, SNC India did not repay the said

amounts.

VOL. 22 - NO. 9 - MAY - JUNE 2019

32


Contravention sought to be Since the amounts remained outstanding for more than 3

compounded years, the same were regarded as deemed ECB.

Accordingly, SNC India was observed to be in

contravention of Regulation 6 of Notification No. FEMA

3/2000-RB dated May 03, 2000 read with para 1(i) – not

an eligible borrower, para 1(iv) – end use not permitted,

para 1(xi) – drawing advance without obtaining Loan

Registration Number, para 1(xii) – non reporting of ECB

transaction.

Comments Amounts payable to entity outside India outstanding for

more than 3 years are regarded as deemed ECB by RBI. In

the instant case, SNC Lavalin India could not repay the

amounts received from its parent company and the same

were outstanding for more than 3 years. Accordingly RBI

regarded the same as deemed ECB for SNC Lavalin India

thereby attracting provisions of ECB regulations. Since

outstanding dues for more than 3 years regarded as ECB,

it resulted in further contravention of borrowing by in

eligible borrower, end use not permitted, receiving

amount with obtaining Loan Registration Number and

non reporting of transaction to RBI.

4. Conclusion:

At times the contraventions occur due to in sufficient knowledge of prevalent laws. The party

undertaking transaction should see that all required compliances are done and in case of ambiguity it

is better to approach RBI prior to execution of transaction and seek approval so as to avoid occurrence

of any contravention.

VOL. 22 - NO. 9 - MAY - JUNE 2019

33


BRIEF UPDATE ON BRIEF UPDATE ON SEBI AND CORPORATE LAW SEBI AND CORPORATE LAW SEBI

by CA IP Neha Gada and CA IP Rajen Gada

A. REGULATIONS:

1. Securities and Exchange Board of India

(Real Estate Investment Trusts)

(Amendment) Regulations, 2019

[Issued by the Securities and Exchange

Board of India vide Notification No.

SEBI/LAD-NRO/GN/2019/09 dated April

22, 2019]

The minimum subscription amount has been reduced to Rs. 50,000/- from Rs. 2,00,000/- in initial as well as follow-on public offer. Further, the trading lot has been revised to unit based lot (i.e. 100 units) in place of value based lot (i.e. Rs. 1,00,000/-).


(Infrastructure Investment Trusts)

(Amendment) Regulations, 2019




22, 2019]

The minimum subscription amount has been reduced to Rs. 10,00,000/- from Rs. 1,00,000/- in initial as well as follow-on public offer. Further, the trading lot has been revised to unit based lot (i.e. 100 units) in place of value based lot (i.e. Rs. 5,00,000/-).

Among other amendments, another key amendment is that InvITs are now permitted to undertake private placement of InvIT units which are not listed.


( M u t u a l Fu n d s ) ( A m e n d m e n t )

Regulations, 2019




26, 2019]

SEBI has amended various provision so as to enable Mutual Funds to invest in Exchange Traded Commodity Derivatives.

B. CIRCULARS

1. Guidelines for determination of bidding,

allotment and trading lot size for Real

Estate Investment Trusts (REITs) and

Infrastructure Investment Trusts

(InvITs)

[Issued by the Securities and Exchange Board of India vide Circular No. SEBI/HO/DDHS/DDHS/CIR/P/2019/59 dated April 23, 2019]

SEBI has laid the Manner of determining minimum allotment for publicly offered InvITs and REITs and the added disclosure requriements.

For further details, please refer SEBI

website at www.sebi.gov.in.

CORPORATE LAW

A. RULES

1. Companies (Incorporation) Fourth

Amendment Rules, 2019

[Issued by Ministry of Corporate Affairs

vide Notification no. GSR ….(E) dated

April 25, 2019]

The last date for filing of Form INC-22A

(ACTIVE) has been extended to June 15,

2019.

VOL. 22 - NO. 9 - MAY - JUNE 2019

34


2. Companies ( Acceptance of Deposits )

Second Amendment Rules, 2019


vide Notification no. GSR 341(E) dated

April 25, 2019]

The last date for filing of Form DTP-3 has

been extended till June 29, 2019.

3. Companies (Registration of Charges)



vide Notification no. GSR …(E) dated

April 30, 2019]

With this amendment, companies will now

be able to create, modify or rectify the

charge subject to Central Government

approval and payment of prescribed fees,

additional fees or advalorem fees.

Amended Forms CHG-1, CHG-8 and CHG9

have been prescribed. These amended

forms with effect from August 1, 2019.

4. C o m p a n i e s ( A p p o i n t m e n t a n d

Qualification of Directors) Amendment

Rules, 2019



April 30, 2019]

The last date for filing of Form DIR-3 KYC

has been extended till June 30, 2019.

5. Companies(Removal of Names of

Companies from the Register of

Companies) Amendment Rules, 2019


vide Notification no. GSR …(E) dated

May 8, 2019]

Central Government has amended the fees

to be paid for strike off of companies to Rs.

10,000/- from Rs. 5,000/-. Further, it has

prescribed that the companies strike off

applications would be processed unless

Annual Returns (i.e. MGT-7 and AOC-4)

including certain other compliances are

filed.

6. Companies Incorporat ion Fi f th




May 10, 2019]

Central Government has substituted

exiting Rule 8 with Rules 8, 8A & 8B so as

to bring in more clarity for name approval

and to remove the ambiguities in the

previous Rule.

B. CIRCULARS

1. Clarification for form ADT-I filed

through GNL-2 under the Companies

Act, 2013- reg.


vide General Circular No. 05/2019

dated May 13, 2019]

Companies which had filed Form ADT-1

through GNL-2 as an attachment (by

selecting 'others') during the period from

01.04.2014 to 20.10.2014 may file E-form

ADT-1 for appointment of Auditor for the

period upto 31.03.2019 without fee, till

15.06.20l9 (since fee had been paid for

filing GNL-2 for the same purpose.

VOL. 22 - NO. 9 - MAY - JUNE 2019

35

CA Manoj Shah CA Viral Satra

Compiled by:

Export and Import of Indian Currency

FEMAFEMAUPDATESUPDATES


A.P. (DIR Series) Circular No. 24 dated March 20, 2019

It has been decided that an individual travelling from India to Nepal or Bhutan may carry RBI notes in new series denomination of Rs. 200/- and Rs. 500/- subject to total limit of Rs. 25,000/-. Previously this limit applied to currency notes of Rs. 500/- and Rs. 1000/- denomination.

Investment by Foreign Portfolio Investors (FPI) in Government Securities – Medium Term Framework


Revision of Limits for 2019-20:

a. The limit for FPI investment in Central Government securities (G-secs), State Development Loans (SDLs) and corporate bonds shall be 6%, 2%, and 9% of outstanding stocks of securities, respectively, in FY 2019-20.

b. The allocation of increase in G-sec limit over the two sub-categories – 'General' and 'Long-term' – has been set at 50:50 for the year 2019-20. The entire increase in limits for SDLs has been added to the 'General' sub-category of SDLs.

c. In terms of para 3 (g) of the circular dated April 06, 2018, the coupon reinvestment arrangement for G-secs shall be extended to SDLs.

Accordingly, the revised limits under various categories after rounding off would be as under:

Establishment of LO-BO-PO or any other place of business in Indian by foreign entities


Prior Approval of RBI was required for opening Branch Office, Liaison Office, Project Office or any other place of business in India, where principal business of applicant was Defence, Telecom, Private Security and Information and Broadcasting Sector.

VOL. 22 - NO. 9 - MAY - JUNE 2019

36

Table 1 – Revised Limits for FPI Investment in Debt 2019-20 (Rupees in billion)

G-Sec G-Sec- SDL- SDL- Corporate Total General Long Term General Long Term Bonds

Current Limit 2233 923 381 71 2891 6499

Revised Limit for 2347 1037 497 71 3031 6983

HY Apr-Sep 2019

Revised Limit for HY 2461 1151 612 71 3170 7465

Oct 2019-Mar 2020


It is advised that for opening of a BO/LO/PO or any other place of business in India, where the principal business of the applicant falls in the Defense Telecom, Private Security and Information and Broadcasting sector, no prior approval of the Reserve Bank of India shall be required, if Government approval or license/permission by the concerned Ministry/ Regulator has already been granted.

Further, in the case of proposal for opening a PO relating to Defense sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/entered into an agreement with the Ministry of Defense or Service Headquarters or Defense Public Sector Undertakings. It is clarified that the term “permission” used in the Notification does not include general permission, if any, available under Foreign Direct Investment in the automatic route, in respect of the above four sectors.

Foreign Exchange Management (Deposit) Regulations 2016 – Opening of NRO accounts by Long Term Visa Holders (LTV), changes related to Special Non-Resident Rupee Account (SNRR), Escrow Account


Following changes have been made:

a. Foreign Portfolio Investor (FPI) and a Foreign Venture Capital Investor (FVCI) registered with SEBI may open and maintain a non-interest bearing foreign currency account for purpose of making investment in terms of FEMA Notification No. 20R.

b. AD Banks may open only one NRO account for a citizen of Bangladesh or Pakistan belonging to minority communities in those countries viz. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who has been granted Long Term Visa (LTV) by the Central Government. The account will be converted to resident account once such person becomes resident of India within meaning of Citizenship Act, 1955. This account can also be opened if such person has applied for LTV which is under consideration of the Central Government, in which case, the account will be opened for a period of six months and may be renewed at six monthly intervals subject to the condition that the individual holds a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned.

The opening of such NRO accounts will be subject to reporting of the details of the accounts opened by the concerned Authorised bank, to the Ministry of Home Affairs (MHA) on a quarterly basis. The report shall contain details of –

(i) name/s of the individual/s;

(ii) date of arrival in India;

(iii) Passport No. and place/country of issue;

(iv) Residential Permit/Long Term Visa reference and date & place of issue;

(v) name of the FRO/FRRO concerned;

(vi) complete address and contact number of the branch where the bank account is being maintained.

The Head Office of the AD bank shall furnish the above details on a quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II Building, Jai Singh Road, New Delhi – 110 001. AD banks are advised to ensure strict compliance to these instructions.

c. As per extant provisions, SNRR accounts cannot be held for more than seven years. It has now been decided that SNRR accounts opened by person resident outside India may remain operative beyond stipulated period of seven years with RBI approval. The restriction of seven years will not be applicable to SNRR accounts opened by persons resident outside India who are registered with SEBI and wish to make investment in India in accordance with FEMA Notification No. 20R.

VOL. 22 - NO. 9 - MAY - JUNE 2019

37


d. The extant Schedule 5 of the Foreign Exchange Management (Deposit Regulations) 2016 pertaining to Escrow Accounts has been replaced to align the same with the provisions of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, in terms of which, Escrow Accounts can be opened by residents and non-residents for acquisition/transfer of capital instruments/convertible notes and can also be funded by guarantee(s).

List of some Compounding Orders passed by Reserve Bank of India

VOL. 22 - NO. 9 - MAY - JUNE 2019

38


Investment by Foreign Portfolio Investors (FPI) in Debt – Review

A.P. (DIR Series) Circular No. 33 dated April 25, 2019As a measure to broaden access of non–resident investors to debt instruments in India, Foreign Portfolio Investors (FPI) are now permitted to invest in municipal bonds. FPI investment in municipal bonds shall be reckoned within the limits set for FPI investment in State Development Loans (SDLs). All other existing conditions for investment by FPIs in the debt market remain unchanged.

Gist of some Compounding Orders passed by Reserve Bank of India

VOL. 22 - NO. 9 - MAY - JUNE 2019

39


Compiled by:

CA Haresh P. Kenia

DIRECT TAXES DIRECT TAXES

1. Income Tax Form No. 16 and Form No. 24Q Amended.

[262 Taxman (st.) 17]. The CBDT vide

notification No. GSR 304(E) [NO.36/2019

( F. N O . 3 7 0 1 4 2 / 4 / 2 0 1 9 - T P L ) ] ,

dated12.04.2019, in exercise of the power

conferred by section 200 and 203 read with

section 295 of the Income Tax Act, hereby

rdgives the Income tax (3 Amendment) Rules,

th2019. It came into force on 12 May, 2019. It

amends Form No. 16 and Form 24Q, in

Appendix II of the Income Tax Rule 1962.

A. Amendment in Form 16

Notes occurring after 'Part A' shall be omitted.

Part B (Annexure) is substituted. Readers

may refer to the above citation of the

Magazine for the changes made in new Part B

(Annexure).

B. Amendment in Form 24Q

Annexure – II' is substituted. Readers may

refer to the above citation of the Magazine for

the changes made in 'Annexure – II'.

2. Deduction of Tax at Source – Certificate for

Tax Deducted (TDS) - Procedure, format

and standards for issuance of certificate for

TDS in Part B of Form 16.

[263 Taxman (st.) 2].

In exercise of the powers delegated by the

CBDT under Rule 31(6A) of the Income Tax

Rule 1962, the Principle Director General of

Income Tax (System) hereby, vide notification

no. 9/2019, dated 06.05.2019 specifies the

procedure, formats and standards for the

purpose of generation and download of

certificates from “TDS Reconciliation

Analysis Correction Enabling System” or

( ) (hereafter called https://www.tdscpc.gov.in

TRACES portal) as below:

Issue of Part B of Form No. 16 for deduction

stof tax at source made on or after 1 day of

April, 2018:

All deductors (including Government

deductors who deposit TDS in the Central

Government Account through book entry)

shall be able to issue the TDS certificate in

part B of Form No. 16 (by generation and

download through TRACES portal) in

respect of all sums deducted on or after the

st1 day of April, 2018 under the provisions for

the fourth quarter i.e. Form 24Q is furnished

alongwith duly filled in Annexure II of Form

24Q as substituted vide Central Board of

Direct Taxes Notification No. 36/2019, dated

12.04.2019. To ensure generation of

accurate TDS certificate in Part B of Form No.

16, the Deductor(s) need to report correct

data in Annexure II of Form 24Q. The

TRACES generated Form No. 16 shall have a

unique TDS certificate number.

LAW UPDATELAW UPDATE

VOL. 22 - NO. 9 - MAY - JUNE 2019

40


Authentication of TDS certificate in Form No.

16:

The deductor, issuing the TDS certificate in

Form No. 16 by downloading it from the

TRACES Portal, shall, before issuing to the

deductee authenticate the correctness of

contents mentioned therein and verify the

same either by signature or by using digital

signature in accordance with sub rule (6) of

rule 31.

Part B (Annexure)' of Form No. 16 item Nos.

2(f) and 10(k):

The item Nos. 2(f) and 10(k) in Part B

(Annexure) of Form 16 required to be filled-in

by the deductor manually shall be made

available at the bottom of the TRACES

generated Form 16 (Part B) and the deductor

shall duly fill details, where available, in item

numbers 2(f) and 10(k) appearing at the

bottom of the Form. The deductor shall duly

fill details, where applicable, in item

numbers 2(f) and 10(k) before furnishing of

Part B (Annexure) to the employee. The

deductors who opt to authenticate Part B of

Form No. 16 using Digital Signature

Certificates (DSC) will be provided with the

download of Part B of Form No. 16 without

item Nos. 2(f) and 10(k) and therefore these

details shall be required to be prepared by

the employer and issued to the employee,

where applicable, before furnishing of Part B

to the employee.

3. Section 286 – Furnishing of Report in

respect of International Group.

[262 Taxman (st.) 25].

The Central Government vide notification No.

S O 1 6 5 3 ( E ) [ N O. 3 7 / 2 0 1 9 ( F. N O.

500/15/2015-APA-I)], dated 25.04.2019, in

exercise of the powers u/s 286(9)(b)(ii) of the

Income Tax Act, hereby notifies the

agreement between the Government of the

Republic of India and the Government of the

United States of America on exchange of

country – by – country reports. Readers may

refer to the above citation for further details.

VOL. 22 - NO. 9 - MAY - JUNE 2019

41


Compiled by:GST UPDATESGST UPDATES

NOTIFICATIONS - CENTRAL TAX:

Notification No 19/2019 -Central Tax ND

dated 22 April,2019

Due date of furnishing the return in FORM

GSTR-3B for month March, 2019 is extended

to 23/04/2019.

Notification No 20/2019 -Central Tax rd

dated 23 April,2019

Vide this notification following Rules are

amended in the Central Goods & Services

Tax Rules, 2017. Amendments are effective rdfrom 23 April, 2019.

Rule 23(1): By adding second proviso it is

provided that all returns from the date of the

order of cancellation of registration till the

date of the order of revocation of cancellation

of registration shall be furnished within 30

days from the date of order of revocation of

cancellation of registration.

And if registration is cancelled with

retrospective effect, the registered person

shall furnish all returns relating to period

from the effective date of cancellation of

registration till the date of order of revocation

of cancellation of registration within 30 days

from the date of order of revocation of

cancellation of registration.

Rule 62: Composition dealer and service

provider opting to pay @ 6% is now required

to furnish a quarterly statement containing

the details of payment of self-assessed tax in

FORM GST CMP08. Due date for such

payment is 18th day of the month succeeding

such quarter. Such person is require to

furnish a return for every financial year in

FORM GSTR-4. Due date for such return is th30 April following the end of financial year.

Notification No 21/2019 -Central Tax rddated 23 April,2019

The notification seeks to notify procedure for

quarterly tax payment and annual filing of

return for composition taxpayers and

taxpayers availing the benefit of Notification

No. 02/2019– Central Tax (Rate), dated the

7th March, 2019.

Notification No 22/2019 -Central Tax rd

dated 23 April,2019

No person will be allowed to furnish PART A

of E way bill if he is composition dealer and

has not furnished the returns for two

consecutive tax periods and for other

taxpayer if he has not furnished the returns

for a consecutive period of two months. Vide

this notification this amendment as per Rule

138E is made effective from 21/06/2019.

Notification No 23/2019 -Central Tax thdated 11 May,2019

Notification No 24/2019 -Central Tax thdated 11 May,2019

Due date for submission of return in FORM

GSTR-1 for April, 2019 for registered

persons whose principal place of business is

in the districts of Angul, Balasore, Bhadrak ,

C u t t a c k , D h e n k a n a l , G a n j a m ,

Jagatsinghpur, Jajpur, Kendrapara,

Keonjhar, Khordha, Mayurbhanj, Nayagarh

and Puri in the State of Odisha is extended to

10/06/2019. Due date for GSTR 3B for these

taxpayers is extended to 20/06/2019.

VOL. 22 - NO. 9 - MAY - JUNE 2019

42

CA Nitin D. Kenia CA Bharat K. Gosar


NOTIFICATIONS - CENTRAL TAX-RATE:

Notification No 10/2019-Central Tax TH(Rate) dated 10 May, 2019.

Notification No 9/2019-Integrated Tax TH(Rate) dated 10 May, 2019.

The notification seeks to amend notification

No.11/ 2017- Central Tax (Rate) so as to

extend the last date for submission of

Annexure IV to 20/05/2019 for exercising the

option by builders, developers, promoters

for exercising option to pay tax at the old rates

of 12%/ 8% with Input Tax Credit.

CIRCULARS - CGST:

Circular No. 100/19/2019-GST-dated rd30 April, 2019.

It is clarified in circular that charges for issue

of seed certificates/tags by the Seed

Certification Agency of Tamil Nadu and

Uttarakhand to the seed producing

organization/ companies are collected for the

composite supply of seed testing and

certification, which is exempt under

Notification No. 12/2017-Central Tax (Rate)

Sl. No. 47 (services by Central/State

Governments by way of testing/certification

relating to safety of consumers and public at

large, required under any law). The

clarification would apply to supply of seed

tags by seed testing and certification agencies

of other states also following similar seed

testing and certification procedure.

Circular No. 101/20/2019-GST-dated rd30 April, 2019.

It is clarified that GST exemption on the

upfront amount (called as premium, salami,

cost, price, development charges or by any

other name) payable for long term lease (of

thirty years, or more) of industrial plots or

plots for development of infrastructure for

financial business under Entry No. 41 of

Exemption Notification 12/2017 – Central

Tax (R) dated 28.06.2017 is admissible

irrespective of whether such upfront amount

is payable or paid in one or more

instalments, provided the amount is

determined upfront.

VOL. 22 - NO. 9 - MAY - JUNE 2019

43

Disclaimer: The views / opinions expressed in the articles are purely of the writers. The readers are requested to take proper professional guidance before abiding the views expressed in the articles. The publisher, the editor and the association disclaim any liability in connection with the use of the information mentioned in the articles.

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