Tax & Regulatory Updates: October- 2019
Direct Tax Updates
Exception to monetary limits for filing appeals specified in any Circular issued under Section 268A of the Income-tax Act, 1961-reg
In Circular No. 23/2019 dated 6th September 2019, CBDT has clarified regarding bogus Long-Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks and department is unable to pursue the cases in higher judicial fora on account of enhanced monetary limits. In this context, Board has decided that notwithstanding anything contained in any circular issued U/S 268A specifying monetary limits for filing of departmental appeals before Income Tax Appellate Tribunal (IT AT), High Courts and SLPs/appeals before Supreme Court, appeals may be filed on merits as an exception to said circular, where Board, by way of special order direct filing of appeal on merit in cases involved in organised tax evasion activity.
Conduct of assessment proceedings through 'E-Proceeding' facility during financial year 2019-20-regd.
In Circular No. 27/2019 dated 26th September 2019, CBDT has clarified regarding assessment proceedings shall be conducted electronically subject to some exceptions. Consequently, assessees are required to produce/ cause to produce their response/evidence to any notice/ communication/ show-cause issued by the Assessing Officer electronically (unless specified otherwise) through their 'E-filing' account on the 'E-filing' portal.
Relaxation of time - Compounding of Offences under Direct Tax Laws – One - time measure -Reg.
In Circular No. 25/2019 dated 09th September 2019, CBDT has clarified regarding filing of Compounding application that it should be filed with in 12 months from filing of complaint in the court. As a one-time measure, the condition that compounding application shall be filed within 12 months, is hereby relaxed, under the following conditions:
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Such application shall be filed before the Competent Authority i.e. the Pro CCIT/CCIT/Pr. DGIT/DGIT concerned, on or before 31.12.2019.
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Relaxation shall not be available in respect of an offence which is generally/normally not compoundable.
Extension of due date for linking of PAN with Aadhaar from 30.09.2019 to 31.1?2.2019.
In this notification No. 75/2019 dated 30th September 2019, CBDT has extended the due date of linking of PAN with Aadhaar from 30-09-2019 to 31-12-2019.
Higher Depreciation on certain motor cars, motor buses, motor lorries and motor taxies
In this notification No. 69/2019 dated 20th September 2019, CBDT has clarified regarding changes in rate of depreciation in PART A relating to Tangible Assets, in item III relating to Machinery and Plant. It is certified that no person is being adversely affected by giving retrospective effect to this notification.
CBDT notifies TDS credit rules for Sec 194N payments
In this notification No. 74/2019 dated 27th September 2019, CBDT has clarified regarding credit for TDS shall be given to the person from whose account tax is deducted and paid to the Central Government account for the assessment year relevant to the previous year in which such tax deduction is made.
Reduction of Corporate Tax Rate via Taxation Laws (Amendment) Ordinance 2019
Tax rates for companies reduced to 15% for manufacturing companies setup on or after 1st October, 2019 and 22% for all other companies subject to certain conditions.
Indirect Tax Updates
CBIC Seeks to amend notification No 14/2019- Central Tax dated 7.3.2019 so as to exclude manufacturers of aerated waters from the purview of composition scheme.
In this notification No. 43/2019-GST dated 30th September 2019, CBIC has clarified regarding exclusion of manufacturers of aerated waters from the purview of composition scheme.
Tax rates on specific goods like Motor vehicles, Grinders, caffeinated Beverages etc. changed in order to give effect to the recommendations of 37th GST Council meeting.
In this notification No. 14/2019-GST dated 30th September 2019, CBIC has clarified regarding Tax rates on specific goods like Motor vehicles, Grinders, caffeinated Beverages etc. changed in order to give effect to the recommendations of 37th GST Council meeting. Similar Notification is issued in Union Territory tax and Integrated Tax.
Grant of alcoholic liquor licence neither a supply of goods nor a supply of service Similar Notification is issued in Union Territory tax.
In this notification No. 25/2019-GST dated 30th September 2019, CBIC has clarified regarding following activities or transactions undertaken by the State Governments in which they are engaged as public authorities, shall be treated neither as a supply of goods nor a supply of service, namely:- “Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called”.
Various services exempted from tax including services by way of storage of cereals, fruits and vegetables.
In this notification No. 21/2019-GST dated 30th September 2019, CBIC has clarified regarding various services exempt from tax including services by way of storage of cereals, fruits and vegetables etc.
Entry related to cement in N/N 7/2019 dated 29-Mar-19 amended so as to widen applicability of RCM on supplies received from unregistered person.
In this notification No. 24/2019-GST dated 30th September 2019, CBIC has clarified regarding entry related to cement in N/N 7/2019 dated 29-Mar-19 amended so as to widen applicability of RCM on supplies received from unregistered person under Section 9(4). Now RCM would be applicable in case Cement falling in chapter 2523 is purchased from any unregistered person.
Companies Act Updates
Directors KYC Update
MCA has announced mandatory annual KYC for all DIN holder for every individual holding DIN with ‘Approved’ status and also to those who are disqualified.
With effect from 25th July 2019 e-Form DIR-3 KYC is to be filed by an individual who holds DIN and is filing his KYC details for the first time or by the DIN holder who has already filed his KYC once in e-form DIR-3 KYC but wants to update his details (i.e. mobile number or email ID) and;
Web service DIR-3-KYC-WEB is to be used by the DIN holder who has submitted DIR-3 KYC e-form in the previous financial year and no update is required in his details.
Due Date- before 30th September
Latest Development: DIR-3 KYC for Financial year 2018-19 has been extended till 14th October 2019.
Transfer Pricing Updates
Note on Secondary Adjustments
As per the Notification issued by the Central board of Direct tax dated 30th September, 2019, the income tax authorities has widen the scope of chargeability of interest on excess money which is not repatriated by replacing the word ‘excess money’ with ‘excess money or part thereof’. Further, the time limit for repatriation of such money have been changed for both in case of primary adjustment to transfer price is determined by an advance pricing agreement entered into by the assessee under section 92CC of the Act and by such resolution under a Double Taxation Avoidance Agreement entered into under section 90or section 90A of the Act.