CA Online

The goods and services tax (GST), India’s new indirect tax regime, makes directors of private limited companies liable for recovery of unpaid taxes, interest or penalties pertaining to supply of goods or services. To complicate matters, the GST Acts do not provide a definition for the term ‘director’ or make any distinction between executive or non-executive directors. Further, the existing directors and officer’s liability insurance — that helps a company hedge against professional and functional risks emanating from managing and running a business – do not cover the additional risks under GST. Section 89 of the Central GST Act refers to recovery of tax, interest and penalties in case of private companies. “In such cases all directors will be held liable unless they prove it is not due to their neglect or breach of duty," says Shriram Subramanian, founder and managing director, InGovern Research Services. Legal experts say VAT Acts of some states put the onus on directors for...

Be careful before categorising it as business income to claim deductions. Court judgements have clearly defined rules for such classification Nowadays, many individuals are investing in real estate to create a regular income stream from rent. Apart from residential property, they are increasingly looking at spaces they can rent out to banks for ATMs, godowns, small shops and even commercial complexes. However, filing tax on the income received from such rent can be tricky—it can be classified business income, income from house property, or as other income depending on owner’s main line of business. Claiming deduction Whether your income from real estate is treated as business income or as income from house property will have a significant impact on the tax deductions you can claim. For example, there are no specific restrictions on the deductions you can claim for business income. The tax payer is free to deduct all eligible expenses from his business income. However, the tax laws ...

The Central Board of Excise and Customs (CBEC) is prepared for the transition to the goods and services tax (GST). Any issues that come forward will be resolved  within the best time possible, VANAJA SARNA, its chief, tells Dilasha Seth. Edited excerpts: What will be on top of your agenda for the next 15 days? With the legal framework put in place, the next and most important step is to hand-hold the taxpayers and other stakeholders, to ensure their smooth transition into this new regime. We will be focusing on helping them in their compliance requirements. All our field offices have opened GST Sewa Kendras, from where taxpayers can get the help they need. Information on various aspects is also being disseminated through the media. Another important aspect will be clarifying any doubts that might arise while interpreting the laws and notifications. How prepared is CBEC (to be soon renamed the Central Board of Indirect Taxes and Customs) for the implementation? We are fully prep...

As many as 223,000 new dealers have entered on the GST Network since June 25, when the registration was opened to them. Issuing a statement on the second day after the GST roll-out, the finance ministry said 63,000 of these dealers had submitted full details of which 32,000 had been granted fresh registrations. The GSTN gives preliminary IDs on the basis of basic information, and final registration after detailed information is submitted on the network. The ministry said the second day passed without any major problems being reported from the field. The revenue department has got encouraging reports from roadside dhabas and big restaurants as well as from kirana shops and departmental stores. Business Standard New Delhi, 03rd July 2017

The Indian stock market could continue to remain volatile with a downward bias as corporates and investors assess the impact of the landmark goods and services tax (GST) on their businesses, investments, and the economy. Market pundits are still trying to get a grip on how the new tax regime will impact inflation, gross domestic product, and profit margins of firms after July 1 roll-out. They, however, are unanimous in their belief that the markets could remain under pressure as the transition to the GST is likely to be fraught with hiccups, which could disrupt economic activities. Ahead of the GST — which subsumes most of the preGST indirect taxes levied by the Centre and states — implementation, the benchmark Nifty declined in six of the previous eight trading sessions, with automobile and banking stocks, in particular, underperforming the market. “The GST may disrupt the system for a few days, maybe weeks or months, as people are not yet fully ready for the execution. The Street...

Event Date Act Applicable Form Obligation 06/07/2017 Service Tax Challan No.GAR-7 E-payment of Service Tax for month ending June for Cos & quarter ending June for others. 07/07/2017 Income Tax Form No.27C (TCS) Submission of Forms received in June  to IT Commissioner 07/07/2017 Income Tax Challan No.ITNS-281 Payment of TDS/TCS deducted/collected in June 10/07/2017 Excise ER-1 Return for Non SSI assessees for June 10/07/2017 Excise ER-2 Return for EOUs for June 10/07/2017 Excise ER-3 Submission of return by SSI units for June quarter 10/07/2017 Excise ER-6 Return by units paying duty >  1 crore (CENVAT + PLA) for June 12/07/2017 D-VAT BE - 2  Advance information for 2nd fortnight of July of functions with booking cost > Rs 1 lakh in Banquet Halls,hotels etc. in Delhi 15/07/2017 D-VAT  DVAT 20  Payment of DVAT TDS for June 15/07/2017 Income Tax  Form 15G/H  E-filing of form 15G/H received during June Quarter 15/07/2017 Income Tax...

The government has lowered the interest rate on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi by 0.1 percentage point for the July—September quarter, a move that will prompt banks to lower deposit rates. The rates have been lowered by 0.1 percentage point across the board compared to the April-June quarter. However, interest on savings deposits has been retained at 4% annually. Quarterly calibration Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.A Finance Ministry notification said investments in the public provident fund (PPF) scheme will fetch a lower annual rate of 7.8%. Kisan Vikas Patra (KVP) investments will yield 7.5% and mature in 115 months.The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.3% annually, from 8.4% at present. The investment on 5-year Senior Citizens Savings Scheme will yield 8.3%. The interest rate on the senior citizens scheme is paid quarter...

The goods and services tax (GST) might adversely affect economic growth in the initial part of 2017-18 before providing a boost from the fourth quarter onwards,  economists said. They added retail price inflation would largely remain unaffected but inflationary expectations would persist as prices would rise for services such as premium  air travel and air-conditioned hotels as well as goods such as aerated drinks, hybrid cars and fertilisers. These items have negligible weights in the consumer  price index (CPI).  Rigid inflationary expectations would not allow inflation to decline significantly, though taxes paid on inputs would be reimbursed, which would have a damping  effect on inflation, some economists said. Also, the wholesale price index-based inflation will not be affected by the GST due to a new way of calculating price rise that does not take into account indirect  taxes. "The GDP will be negatively impacted  for at least two qu...

Liquidity in secondary market for corporate bonds will be increased by minimal number of ISINs Regulator Sebi on Friday put in place a new framework for consolidation in debt securities as part of its efforts to deepen the corporate bond market. Liquidity in the secondary market for corporate bonds will be increased by way of minimal number of ISINs (International Securities Identification Numbers). ISINs code, which has 12 characters, is used for uniquely identifying securities like stocks, bonds warrants and commercial papers. Generally, investors trade in corporate bonds that are freshly issued by a particular issuer. As a result, the outstanding securities of the same issuer  become mostly illiquid. In order to increase liquidity as well as ensure that an issuer's ability to raise funds through debt securities is not curtailed, Sebi has focused on  minimising the number of ISINs. Under the new framework, an issuer will be permitted a maximum of 17 ISINs mat...

The biggest tax reform of independent India, the goods and services tax (GST), was finally rolled out at the midnight hour on Friday, with President Pranab  Mukherjee and Prime Minister Narendra Modi pressing a button to mark the occasion in the historic central hall of Parliament. Calling the GST “a good and simple tax”, Modi said the country was moving towards a modern taxation system, much simpler and more transparent than the  existing one. “From Gandhinagar to Itanagar, from Leh to Lakshadweep, the dream of one nation, one tax will come true,” he added. The GST replaces 17 central and state taxes, including services tax, value-added tax, octroi, duties and other charges, except Customs levy, across the country  except in Jammu and Kashmir. The tax will create a common market in the $2-trillion economy with 1.3 billion people. It is expected to curb “tax terrorism and  inspector raj”.  At the hour-long event, former prime minister H D Deve Gowda, i...

Infosys founder N R Narayana Murthy believes the goods and services tax (GST) will simplify trade, boost the economy, and generate jobs. While the GST Network might encounter a few teething problems, that was part of any large implementation, he said in an interview with Raghu Krishnan. Edited excerpts: Do you think implementation of the GST would boost economic growth? There are different estimates of the impact of the GST. A National Council of Applied Economic Research report says the gross domestic product (GDP) will have an additional 1-2 per cent growth. I’m also told there is a US Fed Reserve report claiming the GST would boost India’s growth by 4 per cent. That would be fabulous. There is absolutely no doubt the GST will boost GDP, as the new tax regime will remove hassles to trade. This will help entrepreneurs and the whole country will benefit. Do you think more people will enter the formal economy? When you have a nationwide tax, which is clear and easy to comp...