THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (Set up by an Act of Parliament)

BELGAUM BRANCH OF ICAI ISSUE 5 | MAY 2019 | PAGES 08 E-NEWS LETTER

OFFICE BEARERS

CA. Jaykumar N. Patil

Chairman

CA. Satish M. Mehta

Vice Chairman

CA Nitin R Nimbalkar

Secretary

CA. Rahul V. Adake

Treasurer

CA M S Tigadi

SICASA Chairman

Respected Members, It is a matter of pride for Belgaum branch and me to place before you the fourth edition of E-News Letter. I am very much happy to inform you all that, for the first time we have given the Pre-budget Memorandum to the ICAI for inclusion in the ICAI Pre-Budget Memo-randum 2019 to be submitted to the Central Govt. The suggestions were given in order to improve tax collection, re-duce/minimise litigations, rationalise the provisions of taxation laws and remove administrative and procedural difficulties with regard to the laws relating to the Direct & Indirect tax. I thank the Bel-gaum Branch members for giving their suggestion for Pre-Budget Memorandum. The Efforts of Taxation Committee needs to be applauded for this success. GST Certification Course has successful-ly launched on 4th May 2019. Joint Com-missioner of Commercial taxes (ADMN) Belagavi Shri R. D. Meghannavar inaugu-rated the session & addressed the partic-ipants. I am happy to inform you all that we have scored Half-Century for registra-tion of Participants for this course. The speakers for the course will be appreciat-ed by all participants. I thank CA Shiva-kumar Khadabadi and his team for this grand success. Members have started the GST Audit & Annual Return for the financial year end-ing 2018. Since its first year of GST au-dit, many clarification & difficulties have to be resolved. A Special Seminar on GST Audit and Annual Returns is organized at branch on 13th May. The speakers for this seminar are of great knowledgeable and I am confident this will help all the participants.

Our Profession... Our Pride... The preparations for our 5th Regional Residential Conference at Goa on 21st to 23rd June are underway. Once everything finalized the details will be shared and registrations will be opened. This confer-ence news is published in SIRC news let-ter for May 2019 under upcoming pro-grams. I am hoping that delegated from various parts of South India will attend it. The examinations of ICAI will commence this month. Students are preparing for their examinations. I wish all the best to the student fraternity who are appearing for their examinations. The scorching summer and hot wave of politics have made May-2019 a special one. To get the real feel of Hot Wave of Politics a “Political Debate” is organized at branch on 20th of this month. The de-tails of the same will be shared shortly. Committee for Capacity Building of Mem-bers in Practice (CCBMP) of ICAI has tak-en many Initiatives for the benefit of members. Details of Some of such initia-tives are provided in this newsletter. Members are requested to take the bene-fit of this initiatives. A long road map is there for the branch to achieve higher milestones. Without the participation of members and also in the absence of valid suggestions from mem-bers it is difficult to achieve the road map. I request your suggestions to make the branch working more efficient and achieve more and more in the days to come. Regards,

CA Jayakumar N Patil.CA Jayakumar N Patil.CA Jayakumar N Patil.CA Jayakumar N Patil. Chairman Belgaum Branch of SIRC of ICAI

Ya Aeshu Suptaeshu Jagruti

House Holder Insurance at special premium for the Members of ICAI The Committee for Capacity Building of Members in Practice (CCBMP) of ICAI has arranged House Holder Insurance at special premium for the Members of ICAI. The scheme has become effec-tive from 10th February, 2019 for the Members of the ICAI. Mem-bers of ICAI desirous to avail the benefits of the aforesaid scheme may please visit http://icai.newindia.co.in & online solution for the same. Members may purchase the House Holder Insurance Policy online at the website http://icai.newindia.co.in C. A portal for Senior Members of ICAI The Committee has developed a website namely http://seniormembers.icai.org/. The website provides a platform for senior members of ICAI for getting flexi working hours assignment as well as fulltime assignment after their retirement. At the same time it will also help industry to tap experienced talent pool which might not be accessible otherwise in normal course. The said portal would be useful & handy to all the senior members of ICAI. Please visit http://seniormembers.icai.org/. D. Exclusive portal for Women Members of ICAI The Committee has developed a website namely https://womenportal.icai.org/ The website provides a platform for Women members of ICAI for getting Jobs & other opportunities. Also the Success stories & articles relating to women are published here. The said portal would be useful & handy to all the Women mem-bers of ICAI. Please visit https://womenportal.icai.org/ E. Networking & Merger Revised Guidelines of Network The CCBMP has considered practical difficulties in consolidation of CA Firms through medium of Networking. The CCBMP has appro-priately finalized the revised Guidelines of Networking facilitating members and firms for its easy adoption. The details of the Revised Guidelines of Networking is available at http://www.icai.org/post.html?post_id=7710. The details of the Rules on Merger is uploaded at www.icai.org.in. F. Revised Minimum Recommended Scale of the fees for the Professional Assignments done by the Chartered Account-ants for Class ‘A’ & Class ‘B’ cities The Committee has prepared a Brochure on Revised Minimum Recommended Scale of the fees for the Professional Assignments done by the Chartered Accountants for Class ‘A’ & Class ‘B’ cit-ies. The aforesaid Brochure will be circulated to the CA Firms in India for their reference. Please visit https://www.icai.org/new_post.html?post_id=14230

A. Office Management Arrangement of the ‘Quick Heal Total Security for PC at spe-cial price for the Members & Students of ICAI The Capacity Building of Members in Practice (CCBMP), ICAI in order to enable members to have access to antivirus software, has tied up with Quick Heal technologies Pvt. Ltd. Pune for providing access to Quick Heal Total Security for the Members & students of ICAI. Please visit http://www.icai.org/post.html?post_id=11505

B. Social Security Office Protection Shield Insurance The Capacity Building of Members in Practice (CCBMP) of ICAI has arranged Office Protection Shield Insurance at special premi-um for members of ICAI. Members and CA firms desirous to avail the benefits of the aforesaid scheme may please visit http://icai.newindia.co.in & online solution for the same. Please visit http://www.icai.org/post.html?post_id=10097 Motor Vehicle Insurance scheme for Members of ICAI A MOU with New India Assurance Co. Ltd for Motor Vehicle Insurance arranged by the Committee. The Motor Vehicle Insur-ance is basically designed for the members but also has been extend-ed to the students and employees of ICAI.The Motor Vehicle Insur-ance for which MOU is being executed has value added features such as Unique Offer of 65% discount (on erstwhile Tariff Rate) for both Private car and two Wheeler etc. Members and CA firms desirous to avail the benefits of the aforesaid scheme may please visit http://icai.newindia.co.in & online solution for the same. Please visit http://www.icai.org/post.html?post_id=12760 Professional Indemnity Insurance Scheme at Special Premium for Members of ICAI. The Capacity Building of Members in Practice (CCBMP) of ICAI has arranged Professional Indemnity Insurance at special premium for the Members in practice/ Firms of the ICAI from New India assurance Co. Ltd . Members and CA firms desirous to avail the benefits of the aforesaid scheme may please visit http://icai.newindia.co.in & online solution for the same. ICAI-LIC Group Insurance Scheme for Chartered Accountant Members and their spouse The Committee for Capacity Building of Members of ICAI is facili-tating ICAI-LIC Group Insurance Scheme for Chartered Accountant Members and their spouse. Members aged between 21 years to 64 years are eligible to join the Scheme. Spouse aged between 18 years to 64 years may join the scheme. No Health or Medical Underwrit-ing is required at joining of the scheme. Life Insurance Coverage of Rs. 10 Lacs for member of ICAI & Rs. 5 Lacs for spouse of Mem-bers. For further details members may please visit https://www.icai.org/post.html?post_id=15416 Personal Accident Insurance at special premium for the Mem-bers of ICAI The Committee for Capacity Building of Members in Practice (CCBMP) of ICAI has arranged Personal Accident Insurance at special premium for the Members of ICAI. The scheme has become effective from 10th February, 2019 for the Members of the ICAI. Members of ICAI desirous to avail the benefits of the aforesaid scheme may please visit http://icai.newindia.co.in & online solu-tion for the same.

ISSUE 5 | MAY 2019

CA. Lalit V Patel

As the new financial year begins there are lots of changes applicable as far as GST is concerned. One

has to have thorough knowledge and be ready to the changes happening regularly whenever there

are GST council meetings. Various key decisions are taken in every GST council meeting which would

have the impact on the Businesses. Some of these decisions made effective from 1st April, 2019 and al-

so various clarifications have been issued in order to bring clarity to the taxpayers. Let us go through

the changes:

ISSUE 5 | MAY 2019

Sl.No

Particulars Amendments Relevant Notification / Cir-cular

1 C o m p o s i t i o n

scheme extended

to service provid-

ers:

The composition scheme was not available

to the service providers except for the restau-

rant and catering services. However, recently

an amendment is made to allow option of

composition scheme for dealers who are en-

gaged in supply of goods and services but

the supply of services shall not exceed 10% of

turnover or Rs. 5 lakhs whichever is higher.

With effect from April 1, 2019 the service pro-viders can also avail the composition scheme. This scheme shall be available only if supplier is engaged in supply of goods or services within same state and the aggregate turnover of supplier does not exceed Rs. 50 lakhs during the financial year.

For more details refer: No-tification No. 02/2019 – Central Tax (Rate) dated

March 7, 2019.

Note: The above is not

available to service pro-

viders who are engaged

in inter-state supply of ser-

vices or services through e

-commerce websites.

2 C o m p o s i t i o n

scheme threshold

increased to Rs. 1.5

crores:

In respect of special category states (North-Eastern States), the threshold limit has been increased from Rs. 50 lakhs to Rs. 75 lakhs. The existing threshold limit on gross turnover in previous financial year to avail of the com-

position scheme has been increased from Rs. 1 crore to Rs. 1. 5 crores.

This would help taxable persons by substan-

tially reducing their compliance burden as

they would be required to file GST returns on

quarterly basis instead of monthly.

For more details refer: No-tification No. 14/2019 – Central Tax dated March

7, 2019.

3 GST Annual Return

Forms GSTR-9 and

9A are now availa-

ble on portal:

Annual return in Form GSTR-9 and 9A are now live on portal. The last date for filing of Annual Return for the Financial Year 2017-18 is June 30, 2019.

-

ISSUE 5 | MAY 2019

5 Registration thresh-

old limit increased

to Rs. 40 lakhs:

Any person who is engaged in supply of

goods and his total turnover in the current

financial year does not exceed Rs. 40 lakhs,

he is not required to take registration under GST. This exemption from GST registration is

subject to various conditions, inter-alia, he is not making any inter-state supply, he is not a non-resident taxable person, etc.

For more details refer: No-tification No.10/2019 – Central Tax dated March

7, 2019.

6 Due date for filing

of GSTR-3B and

GSTR-1:

The due dates for filing of GSTR-1 and GSTR-3B

for the months of April, May and June of 2019

has been notified, which shall be as follows:

In case of GSTR-3B

Form GSTR-3B shall be filed on monthly basis

by every tax payer who is required to file

GSTR-3B and due date shall be 20th of suc-

ceeding month.

In case of GSTR-1

If the turnover of registered person is up-to

Rs. 1.50 crores for the month of April to June,

2019, he shall file his GSTR-1 on quarterly ba-

sis and the due date shall be 31st July, 2019.

If the turnover of registered person is ex-

ceeds Rs. 1.50 crores for the month of April

to June, 2019, he shall file his GSTR-1 on

monthly basis and the due date shall be

11th of succeeding month.

For more details refer: No-tif. No. 11/2019, Notifica-tion No. 12/2019, and Noti-fication No. 13/2019- Cen-tral Tax dated March 7,

2019.

7 No GST to be lev-

ied on TCS compo-

nent collected by

suppliers:

The CBIC has clarified that if supplier collects TCS form the buyer on sale of a product then GST shall not be charged on the TCS compo-nent collected by the supplier.

For more details refer: Cor-

rigendum to Circular No. 76/50/2018-GST dated December 31, 2018.

4 Clarification for

levy of GST on vari-

ous sales promo-

tional schemes:

The CBIC has issued clarifications on charge-ability of GST, valuation of goods and reversal of ITC in respect of free samples and promo-tional goods distributed by a taxable person.

For more details refer: Cir-cular No. 92/11/2019-GST.

expenditure allowable as business expenditure?

Any expenditure which is not specifically covered by section 30 to 36 and which is not in the nature of capital expenditure or personal expenditure is to be allowed as a deduction provided it is laid out or expended wholly and exclusively for the purpose of business or profession. However, an expenditure which is an offence or which is prohibited by law is not deductible. Celebrating Diwali eve by inviting the staff members with their families and incurring expenditure thereof by recognizing their efforts and service is business expendi-ture as that would improve the working atmosphere and morale of the employees. Taking note of this fact the CBDT Circular No. 13A/20/68/IT (All), dated 03.10.1968 has clarified that expenditure in connection with local fes-tivals such as Diwali and Mahurat are deductible ex-penditure and could not be treated as expenditure of per-sonal ,social or religious nature

Exemption limit for movable and immovable Gifts My client acquired a vacant Plot in August 2017 for Rs.10,20,000 when the guideline value of the said land for the purpose of stamp duty was Rs. 10,60,000. He re-ceived cash gift on his 50th birthday from his friend of Rs. 1,10,000. How much of the amount is liable to tax un-der section 56? The facts given by you consist of two aspects, Viz, Inade-quate consideration in purchase of land and cash gift from friends on the occasion of birthday. Section 56(2) covers 5 categories of gifts , Viz (i) cash gift; (ii) immovable proper-ty without consideration; (iii)immovable property with inadequate consideration; (iv) movable property without consideration; and (v) movable property with inadequate consideration . The monetary Limit of Rs. 50,000 will ap-ply to each of the categories given above. The immovable property acquisition is prior to substitu-tion of item (B) of sub –clause (b) to section 56 (2) (x) and, hence, the benefit of comparing 5% of the consideration with stamp duty value will not apply . However, the bene-fit of acquiring immovable property for inadequate con-sideration is less than Rs. 50,000 Therefore; the said trans-action is not covered and free from tax. As regards cash gift on the occasion of 50th birthday , as the amount exceed Rs. 50,000 and has been received from friends ( non – relatives), the entire amount is chargeable to tax.

Stay of recovery of demand and amount payable Our scrutiny assessment was completed in October, 2018, The Assessing Officer made a high-pitched assess-ment by disallowing expenditure claims for want of vouchers. We submitted that there was not much of vari-ation in claim of expenses in comparison with the earlier years. Now we are planning to prefer an appeal and seek stay of tax recovery till the disposal of appeal. How much we have to pay for grant of stay? Is it on the tax demand or the tax amount excluding interest under sec-tions 234A and 234B?

CBDT in Instruction No.1914 dated 21.03.1996 provided detailed guidelines as regards the procedure to be fol-lowed for recovery of outstanding demand, including pro-cedure for grant of stay of demand. The stay of demand is possible only if there are valid reasons for doing so. Mere filing of appeal is not a sufficient reason to stay the recov-ery of demand. The Assessing Officer may grant stay when the assessee provides suitable security, bank guaran-tee or he may ask the assessee to pay a reasonable amount in lump sum or installments. The CBDT in office Memorandum dated 29.02.2016 pre-scribed when an assessee makes payment of 15% of the disputed demand, the recovery of tax could be kept in abeyance by the Assessing Officer. In partial modification of the Instruction No.1914, the CBDT in office Memoran-dum dated 31.07.2017 has prescribed that the taxpayer has to pay 20% of the disputed demand for obtaining stay of tax recovery proceedings. In case you are disputing the entire tax assessment, you have to pay 20% of the demand for stay of tax recovery. You cannot exclude interest under sections 234A and 234B for the purpose of quantifying the amount equivalent to 20%. Even where the said 20% tax demand payment would create working capital crunch one can approach the jurisdictional administrative Pr.CIT /CIT, who after con-sidering all relevant facts shall decide the quantum of de-mand to be paid as lump sum for granting a stay of the balance of demand.

Is Diwali celebration expenditure by a company a deductible expenditure? Our company celebrate Diwali this year as it coincid-ed with 25th anniversary of our commencement of busi-ness. We invited all our employees with family members to celebrate Diwali eve in our office premises by putting up a shamiana pandal and distributed dress material, sweets, and gifts to them. We incurred Rs. 6 lakhs by way of expense for that one day celebration. Is this

ISSUE 5 | MAY 2019

ISSUE 5 | MAY 2019