Rule 43 of the CGST Rules, 2017 deals with input tax credit in respect of capital goods. It provides that ITC can be claimed on capital goods over a period of 5 years (60 months or 20 quarters). The rule assumes capital goods have a useful life of 5 years. It also specifies that if capital goods are used for exempt or non-business purposes during a tax period, the proportionate ITC for that period must be reversed along with applicable interest. The document analyzes and critiques various aspects of Rule 43, such as how it calculates ITC amounts, its treatment of capital goods used for common purposes, and situations it does not clearly address. It uses an example transaction to illustrate potential issues or inconsistencies
Pwc report foreign national working in india 2003Rajesh Javeri
This document summarizes taxation laws for foreign nationals working in India. It discusses that employment income earned in India is taxable in India regardless of payment location. Housing and car benefits provided by employers are taxed at nominal values lower than actual costs. Other benefits like domestic help and utilities are fully taxable based on employer costs. The tax year runs from April 1 to March 31. Individual tax rates are progressive and residential status determines worldwide income taxability.
The document contains frequently asked questions and answers regarding banking, insurance, and stock brokers in relation to GST.
Some key points addressed are:
- Banks are not required to provide ATM details in their GST registration as ATMs alone do not constitute a place of business.
- Third party places like ATMs, business correspondents, or warehouses used by banks are not required to be included in their GST registration.
- For services provided up to June 30, 2017, the applicable tax (GST or prior tax) depends on whether the invoice was issued or payment was made before or after July 1, 2017.
- Banks/insurers must report exempt, non-GST and invoice
Tax Bulletin Draft Notification on POEM - Section 115JH of the ActVispi T. Patel
The CBDT has issued a Draft Notification issued on June 15, 2017 for exception, modification and adaptation in respect of a foreign company said to be resident in India due to its place of effective management (POEM) being in India, under Section 115JH of the Income-tax Act, 1961.
Final gst vth unit payments of tax interest penalty and tdd&tcsSureshBabuMannarColl
1. The document discusses various ways of paying GST in India, such as using input tax credits, cash payments, or tax deduction at source.
2. It explains the different entities responsible for tax payments like suppliers, recipients, tax deductors, and e-commerce operators. Deadlines vary from monthly to quarterly based on the entity.
3. Input tax credits must be used in a priority order of IGST first, then CGST and finally SGST/UTGST. Non-payment can result in interest charges, penalties, and in serious cases, prosecution.
The document discusses the valuation of assets for wealth tax purposes in India. It outlines the steps to value a self-occupied residential building, including calculating the gross maintainable rent (GMR) and net maintainable rent (NMR), capitalizing the NMR, and making adjustments for unbuilt area and unearned increase. It also provides an example calculation valuing a leasehold house. The objective is to understand asset valuation and the filing and assessment of wealth tax returns.
This document provides a 100 question and answer FAQ on various aspects of the Goods and Services Tax (GST) in India. The questions cover topics such as registration, refunds, the composition scheme, input tax credit, invoices, returns, supplies, and transition provisions. For each question, a brief but concise reply is given to address the key issue raised. The FAQ serves to help clarify common queries around GST compliance and administration in a clear and accessible format.
The document provides market updates on stock indices and compliance due dates. Key points:
- The Sensex closed at 28,743.32 on February 28, 2017, up from 27,655.96 on December 31, 2016. The Nifty closed at 8,879.60 on February 28, 2017, up from 8,561.30 on January 31, 2017.
- Various income tax, service tax, VAT, EPF, and ESI compliance due dates for March 2017 are listed, including dates for filing returns and depositing taxes.
- The government plans to make all ration shops Aadhaar enabled by June 30, 2017 to digitize the public distribution system. LIC will equip its
The document provides information on various compliance due dates in April 2017 related to taxes like income tax, service tax, VAT, PF, and ESI. It also summarizes recent changes related to income tax filing including new ITR forms for AY 2017-18, clarifications on ICDS, and the PMGKY scheme. Additionally, it mentions RBI circulars about payment systems closure on April 1st and providing operational flexibility to foreign subsidiaries of multinational entities.
Pwc report foreign national working in india 2003Rajesh Javeri
This document summarizes taxation laws for foreign nationals working in India. It discusses that employment income earned in India is taxable in India regardless of payment location. Housing and car benefits provided by employers are taxed at nominal values lower than actual costs. Other benefits like domestic help and utilities are fully taxable based on employer costs. The tax year runs from April 1 to March 31. Individual tax rates are progressive and residential status determines worldwide income taxability.
The document contains frequently asked questions and answers regarding banking, insurance, and stock brokers in relation to GST.
Some key points addressed are:
- Banks are not required to provide ATM details in their GST registration as ATMs alone do not constitute a place of business.
- Third party places like ATMs, business correspondents, or warehouses used by banks are not required to be included in their GST registration.
- For services provided up to June 30, 2017, the applicable tax (GST or prior tax) depends on whether the invoice was issued or payment was made before or after July 1, 2017.
- Banks/insurers must report exempt, non-GST and invoice
Tax Bulletin Draft Notification on POEM - Section 115JH of the ActVispi T. Patel
The CBDT has issued a Draft Notification issued on June 15, 2017 for exception, modification and adaptation in respect of a foreign company said to be resident in India due to its place of effective management (POEM) being in India, under Section 115JH of the Income-tax Act, 1961.
Final gst vth unit payments of tax interest penalty and tdd&tcsSureshBabuMannarColl
1. The document discusses various ways of paying GST in India, such as using input tax credits, cash payments, or tax deduction at source.
2. It explains the different entities responsible for tax payments like suppliers, recipients, tax deductors, and e-commerce operators. Deadlines vary from monthly to quarterly based on the entity.
3. Input tax credits must be used in a priority order of IGST first, then CGST and finally SGST/UTGST. Non-payment can result in interest charges, penalties, and in serious cases, prosecution.
The document discusses the valuation of assets for wealth tax purposes in India. It outlines the steps to value a self-occupied residential building, including calculating the gross maintainable rent (GMR) and net maintainable rent (NMR), capitalizing the NMR, and making adjustments for unbuilt area and unearned increase. It also provides an example calculation valuing a leasehold house. The objective is to understand asset valuation and the filing and assessment of wealth tax returns.
This document provides a 100 question and answer FAQ on various aspects of the Goods and Services Tax (GST) in India. The questions cover topics such as registration, refunds, the composition scheme, input tax credit, invoices, returns, supplies, and transition provisions. For each question, a brief but concise reply is given to address the key issue raised. The FAQ serves to help clarify common queries around GST compliance and administration in a clear and accessible format.
The document provides market updates on stock indices and compliance due dates. Key points:
- The Sensex closed at 28,743.32 on February 28, 2017, up from 27,655.96 on December 31, 2016. The Nifty closed at 8,879.60 on February 28, 2017, up from 8,561.30 on January 31, 2017.
- Various income tax, service tax, VAT, EPF, and ESI compliance due dates for March 2017 are listed, including dates for filing returns and depositing taxes.
- The government plans to make all ration shops Aadhaar enabled by June 30, 2017 to digitize the public distribution system. LIC will equip its
The document provides information on various compliance due dates in April 2017 related to taxes like income tax, service tax, VAT, PF, and ESI. It also summarizes recent changes related to income tax filing including new ITR forms for AY 2017-18, clarifications on ICDS, and the PMGKY scheme. Additionally, it mentions RBI circulars about payment systems closure on April 1st and providing operational flexibility to foreign subsidiaries of multinational entities.
The document summarizes changes made to India's income tax provisions for the 2013-14 fiscal year that affect salaried individuals. Key points include:
1) Income tax rates remain unchanged, but a 5% surcharge is introduced for domestic companies with income over 1 crore rupees.
2) A rebate of 2000 rupees is provided for individuals with total income up to 5 lakh rupees.
3) A new section 80EE provides a deduction for interest on home loans sanctioned from April 2013 to March 2014, up to 1 lakh rupees.
4) The limit for deductible life insurance premium is raised to 15% of sum assured for
RBI
Prudential Guidelines – Banks’ investment in units of REITs and InvITs
Guidelines on compliance with Accounting Standard (AS) 11 [The Effects of Changes in Foreign Exchange Rates] by banks
Additional Provisions For Standard Advances At Higher Than The Prescribed Rates
MCA
Revision of E-forms
SEBI
Review of the framework of position limits for Interest Rate Futures contracts
TAXATION
GST Bill gets President Assent now becomes The Central Goods and Service Tax Act, 2017
Central Government amends Pradhan Mantri Garib Kalyan Deposit Scheme through a Notification.
Cabinet approves signing of the Protocol amending the Convention between India and Portugal for avoidance of Double Taxation
OTHERS
The Employee's Compensation Act, 1923
Company website-
www.acquisory.com
Unravelling the income tax annual information returnAmeet Patel
The Annual Information Return that the income-tax department of India gets from various agencies contains a treasure trove of information for a tax officer to work upon. All tax payers should be aware of this and also of how the AIR affects their tax assessments. This presentation takes you through the AIR and also the reports of the Central Information Branch (CIB).
I have also dealt with the tax aspects of the recent demonetisation of Rs. 500 & Rs. 1,000 currency notes by the Govt of India.
This document provides an overview of Hero MotoCorp and Royal Enfield motorcycle companies in India. It discusses the history and founders of each company, current models, manufacturing facilities, and financial information. The key points are that Hero MotoCorp is the largest motorcycle manufacturer in the world, founded in 1984 in India, while Royal Enfield was originally founded in England in 1890 and established manufacturing in India in 1955, focusing on high-capacity bikes for the Indian government.
This document provides information about two steel companies - Steel Authority of India Limited (SAIL) and JSW Steel. SAIL is India's largest steel producer, operating multiple integrated steel plants. It produces a wide range of steel products. JSW Steel is also a major steel producer in India. The document discusses the companies' operations and history but does not provide details about JSW Steel's profile. It focuses primarily on providing background information on SAIL.
This document provides background information on two companies - Apollo Tyres and Berger Paints. It discusses the history, operations, and facilities of Apollo Tyres, which is a leading tire manufacturer in India. It also profiles Berger Paints, the second largest paint company in India, including details on its product offerings, manufacturing locations, and international presence. The document serves as an informational report on these two companies.
This document provides an overview of Goods and Services Tax (GST) in India, including how GST works, its history and implementation, types of GST, registration requirements, returns, rates, and advantages. It also provides profiles of two Indian companies, Jindal Steel and Power Ltd and Sun Pharmaceutical Industries Ltd, including their business activities and histories. The document contains this information across multiple chapters in order to analyze these companies' tax rates before and after GST implementation in India.
Here are the key tax rates for Mahindra Holidays & Resorts India Ltd before GST:
- Corporate tax rate: 30%
- Dividend distribution tax: 15% on dividends paid to shareholders
- Service tax: 15% on services provided
- VAT rates varied between states (typically around 12-14%)
IIFL Securities Ltd
Prior to GST, IIFL Securities Ltd was subject to the following key taxes:
- Corporate tax rate: 30%
- Securities transaction tax (STT): Payable on taxable securities transactions. Rates ranged from 0.001-0.2% depending on the type of transaction.
- Service tax: 15%
The meeting reviewed the progress of investigations into the NSEL payment crisis. Key discussion points included:
- The legal challenges posed by recent court verdicts overturning earlier orders regarding NSEL status and asset attachments.
- Concerns that the entire MPID case may be jeopardized if the recent HC order stands, as it has implications for market integrity.
- Deciding that alienation of assets should be prevented and ED may file a counter affidavit in consultation with MoL, in response to a case filed by NSEL in SC for transfer of attached assets.
- Request by ED for details of the SC case from the Competent Authority, as they are yet to receive notice.
Penalties after 14.5.2015 under service taxMyGstMyTax
The document discusses various aspects of valuation of services under Indian service tax law such as the charging provision, principles of valuation under section 67, and penalties. It provides details on valuation in cases of monetary and non-monetary consideration as well as for composite contracts involving works contracts and food supply. The penalties under the law and the procedure for lev
This document provides an overview of basic concepts in Indian income tax law, including:
1) It outlines the history of income tax law in India since its introduction in 1860 and describes the various acts passed over time, culminating in the Income Tax Act of 1961.
2) It defines key terms like assessee, assessment year, previous year, and different types of assessees.
3) It describes the concept of gross total income and total income, and how residential status determines the basis of tax charges.
4) It provides examples of exceptions to the general rule that income of the previous year is taxed in the following assessment year, such as for shipping businesses, persons leaving India,
Capital gain taxation including exemption us 54 & 54 ecVivek Mahajan
This document provides a project report on capital gains taxation including exemptions under sections 54 and 54EC of the Indian Income Tax Act. It begins with an introduction to taxes and defines direct and indirect taxes. Direct taxes discussed include income tax, corporation tax, property tax, and inheritance tax. Indirect taxes discussed include service tax and sales tax. The report then defines capital gains and discusses sections 54 and 54EC which provide exemptions for capital gains reinvested in specified assets. It concludes with a discussion of filing income tax returns.
This document contains answers to frequently asked questions about applying GST to the mining sector in India. Some key points addressed include:
- Small mining leaseholders with turnover under Rs. 75 lakhs can operate under the composition scheme.
- The GST rates for minerals and ores under composition scheme are 1% CGST/SGST for manufacturing processes and 0.5% CGST/SGST otherwise.
- Buyers cannot claim input tax credit for purchases from suppliers under the composition scheme.
- Inter-state supplies are not allowed for those availing the composition scheme.
This document discusses various transactions between employers and employees and analyzes whether they would constitute a supply under GST law. It summarizes the key judgements of the Authority for Advance Rulings, Kerala in the Caltech Polymers case. According to the summary, services provided by an employee to the employer in the course of employment are excluded from GST as per Schedule III. However, recovery of food expenses from employees would be taxable as consideration is involved. Transactions like transport allowance and uniform allowance would not attract GST.
This document provides an overview of Goods and Services Tax (GST) in India through a report on two companies, Britannia Industries and Argo Tech Foods. It discusses what GST is and how it works, the history of GST in India, tax laws before GST, types of GST, registration and returns, calculation of GST, advantages of GST, and the GST Council and GSTN. The report appears to be analyzing the impact of GST implementation on the two food companies.
Key Direct Tax proposals announced by the Finance Minister on February 1, 2017.
CONTENTS on INCOME-TAX
1. Transfer Pricing
2. Non-resident
3. Corporates
4. Capital Gains
5. Assessments
6. Effect of Demonetisation
7. Other Amendments
8. Rates of Tax
Works contract is a deemed sale which involves the transfer of property in goods (whether as goods or in any other form) involved in the execution of the works contract. The concept of taxation of goods transferred during the execution of works contract has been a matter of great litigation over the period.
I am trying to sum up the regularly followed methods and procedures while determining the taxation of works contracts in the hands of contractor.
This document summarizes the two main methods for taxing works contracts under the Rajasthan VAT Act: the exemption fees method and the VAT method. The exemption fees method allows contractors to pay tax as a percentage of the contract value in exchange for foregoing input tax credits. The VAT method calculates taxable turnover by deducting labor and other costs from the gross contract value, then contractors can claim input tax credits and pay the net tax amount. Contractors must choose which method to use based on their individual circumstances and need for input tax credits on goods purchased.
Objectives
Introduction
What is Remittance???
Who are Non-residents???
Relevant Notifications and Circulars
Which assets can be remitted?
How are assets remitted?
Legal Compliances (In special cases)
TransPrice Times 16th - 31st March 2017Akshay KENKRE
Dear Members,
We are pleased to present TransPrice Times for the second fortnight of March 2017.
This periodical covers the important amendments made to Finance Bill 2017, which has now received the Presidential assent. In other recent updates, this issue covers the circular on Income Computation and Disclosure Standards (ICDS) released by CBDT, while the Tax Courts have delivered important rulings addressing key transfer pricing issues related to recharacterization of share application, depreciation adjustment.
We would be happy to know your suggestions. You can write to us at akshaykenkre@transprice.in
Thank You and Happy Reading!!
Sceheme of Levy of MAT & Relevant Case lawsRam Kumar
The document provides an overview of Minimum Alternate Tax (MAT) under Section 115JB of the Indian Income Tax Act, including:
- MAT was introduced to tax companies that report large profits but pay little tax using deductions and exemptions.
- MAT is the higher of tax calculated under normal tax provisions or 18.5% of book profits (profits reported in financial statements).
- Book profits are adjusted by adding back deductions claimed and removing certain incomes to calculate MAT payable.
- Any MAT paid can be carried forward as a tax credit for future years when normal tax exceeds MAT payable.
The document summarizes changes made to India's income tax provisions for the 2013-14 fiscal year that affect salaried individuals. Key points include:
1) Income tax rates remain unchanged, but a 5% surcharge is introduced for domestic companies with income over 1 crore rupees.
2) A rebate of 2000 rupees is provided for individuals with total income up to 5 lakh rupees.
3) A new section 80EE provides a deduction for interest on home loans sanctioned from April 2013 to March 2014, up to 1 lakh rupees.
4) The limit for deductible life insurance premium is raised to 15% of sum assured for
RBI
Prudential Guidelines – Banks’ investment in units of REITs and InvITs
Guidelines on compliance with Accounting Standard (AS) 11 [The Effects of Changes in Foreign Exchange Rates] by banks
Additional Provisions For Standard Advances At Higher Than The Prescribed Rates
MCA
Revision of E-forms
SEBI
Review of the framework of position limits for Interest Rate Futures contracts
TAXATION
GST Bill gets President Assent now becomes The Central Goods and Service Tax Act, 2017
Central Government amends Pradhan Mantri Garib Kalyan Deposit Scheme through a Notification.
Cabinet approves signing of the Protocol amending the Convention between India and Portugal for avoidance of Double Taxation
OTHERS
The Employee's Compensation Act, 1923
Company website-
www.acquisory.com
Unravelling the income tax annual information returnAmeet Patel
The Annual Information Return that the income-tax department of India gets from various agencies contains a treasure trove of information for a tax officer to work upon. All tax payers should be aware of this and also of how the AIR affects their tax assessments. This presentation takes you through the AIR and also the reports of the Central Information Branch (CIB).
I have also dealt with the tax aspects of the recent demonetisation of Rs. 500 & Rs. 1,000 currency notes by the Govt of India.
This document provides an overview of Hero MotoCorp and Royal Enfield motorcycle companies in India. It discusses the history and founders of each company, current models, manufacturing facilities, and financial information. The key points are that Hero MotoCorp is the largest motorcycle manufacturer in the world, founded in 1984 in India, while Royal Enfield was originally founded in England in 1890 and established manufacturing in India in 1955, focusing on high-capacity bikes for the Indian government.
This document provides information about two steel companies - Steel Authority of India Limited (SAIL) and JSW Steel. SAIL is India's largest steel producer, operating multiple integrated steel plants. It produces a wide range of steel products. JSW Steel is also a major steel producer in India. The document discusses the companies' operations and history but does not provide details about JSW Steel's profile. It focuses primarily on providing background information on SAIL.
This document provides background information on two companies - Apollo Tyres and Berger Paints. It discusses the history, operations, and facilities of Apollo Tyres, which is a leading tire manufacturer in India. It also profiles Berger Paints, the second largest paint company in India, including details on its product offerings, manufacturing locations, and international presence. The document serves as an informational report on these two companies.
This document provides an overview of Goods and Services Tax (GST) in India, including how GST works, its history and implementation, types of GST, registration requirements, returns, rates, and advantages. It also provides profiles of two Indian companies, Jindal Steel and Power Ltd and Sun Pharmaceutical Industries Ltd, including their business activities and histories. The document contains this information across multiple chapters in order to analyze these companies' tax rates before and after GST implementation in India.
Here are the key tax rates for Mahindra Holidays & Resorts India Ltd before GST:
- Corporate tax rate: 30%
- Dividend distribution tax: 15% on dividends paid to shareholders
- Service tax: 15% on services provided
- VAT rates varied between states (typically around 12-14%)
IIFL Securities Ltd
Prior to GST, IIFL Securities Ltd was subject to the following key taxes:
- Corporate tax rate: 30%
- Securities transaction tax (STT): Payable on taxable securities transactions. Rates ranged from 0.001-0.2% depending on the type of transaction.
- Service tax: 15%
The meeting reviewed the progress of investigations into the NSEL payment crisis. Key discussion points included:
- The legal challenges posed by recent court verdicts overturning earlier orders regarding NSEL status and asset attachments.
- Concerns that the entire MPID case may be jeopardized if the recent HC order stands, as it has implications for market integrity.
- Deciding that alienation of assets should be prevented and ED may file a counter affidavit in consultation with MoL, in response to a case filed by NSEL in SC for transfer of attached assets.
- Request by ED for details of the SC case from the Competent Authority, as they are yet to receive notice.
Penalties after 14.5.2015 under service taxMyGstMyTax
The document discusses various aspects of valuation of services under Indian service tax law such as the charging provision, principles of valuation under section 67, and penalties. It provides details on valuation in cases of monetary and non-monetary consideration as well as for composite contracts involving works contracts and food supply. The penalties under the law and the procedure for lev
This document provides an overview of basic concepts in Indian income tax law, including:
1) It outlines the history of income tax law in India since its introduction in 1860 and describes the various acts passed over time, culminating in the Income Tax Act of 1961.
2) It defines key terms like assessee, assessment year, previous year, and different types of assessees.
3) It describes the concept of gross total income and total income, and how residential status determines the basis of tax charges.
4) It provides examples of exceptions to the general rule that income of the previous year is taxed in the following assessment year, such as for shipping businesses, persons leaving India,
Capital gain taxation including exemption us 54 & 54 ecVivek Mahajan
This document provides a project report on capital gains taxation including exemptions under sections 54 and 54EC of the Indian Income Tax Act. It begins with an introduction to taxes and defines direct and indirect taxes. Direct taxes discussed include income tax, corporation tax, property tax, and inheritance tax. Indirect taxes discussed include service tax and sales tax. The report then defines capital gains and discusses sections 54 and 54EC which provide exemptions for capital gains reinvested in specified assets. It concludes with a discussion of filing income tax returns.
This document contains answers to frequently asked questions about applying GST to the mining sector in India. Some key points addressed include:
- Small mining leaseholders with turnover under Rs. 75 lakhs can operate under the composition scheme.
- The GST rates for minerals and ores under composition scheme are 1% CGST/SGST for manufacturing processes and 0.5% CGST/SGST otherwise.
- Buyers cannot claim input tax credit for purchases from suppliers under the composition scheme.
- Inter-state supplies are not allowed for those availing the composition scheme.
This document discusses various transactions between employers and employees and analyzes whether they would constitute a supply under GST law. It summarizes the key judgements of the Authority for Advance Rulings, Kerala in the Caltech Polymers case. According to the summary, services provided by an employee to the employer in the course of employment are excluded from GST as per Schedule III. However, recovery of food expenses from employees would be taxable as consideration is involved. Transactions like transport allowance and uniform allowance would not attract GST.
This document provides an overview of Goods and Services Tax (GST) in India through a report on two companies, Britannia Industries and Argo Tech Foods. It discusses what GST is and how it works, the history of GST in India, tax laws before GST, types of GST, registration and returns, calculation of GST, advantages of GST, and the GST Council and GSTN. The report appears to be analyzing the impact of GST implementation on the two food companies.
Key Direct Tax proposals announced by the Finance Minister on February 1, 2017.
CONTENTS on INCOME-TAX
1. Transfer Pricing
2. Non-resident
3. Corporates
4. Capital Gains
5. Assessments
6. Effect of Demonetisation
7. Other Amendments
8. Rates of Tax
Works contract is a deemed sale which involves the transfer of property in goods (whether as goods or in any other form) involved in the execution of the works contract. The concept of taxation of goods transferred during the execution of works contract has been a matter of great litigation over the period.
I am trying to sum up the regularly followed methods and procedures while determining the taxation of works contracts in the hands of contractor.
This document summarizes the two main methods for taxing works contracts under the Rajasthan VAT Act: the exemption fees method and the VAT method. The exemption fees method allows contractors to pay tax as a percentage of the contract value in exchange for foregoing input tax credits. The VAT method calculates taxable turnover by deducting labor and other costs from the gross contract value, then contractors can claim input tax credits and pay the net tax amount. Contractors must choose which method to use based on their individual circumstances and need for input tax credits on goods purchased.
Objectives
Introduction
What is Remittance???
Who are Non-residents???
Relevant Notifications and Circulars
Which assets can be remitted?
How are assets remitted?
Legal Compliances (In special cases)
TransPrice Times 16th - 31st March 2017Akshay KENKRE
Dear Members,
We are pleased to present TransPrice Times for the second fortnight of March 2017.
This periodical covers the important amendments made to Finance Bill 2017, which has now received the Presidential assent. In other recent updates, this issue covers the circular on Income Computation and Disclosure Standards (ICDS) released by CBDT, while the Tax Courts have delivered important rulings addressing key transfer pricing issues related to recharacterization of share application, depreciation adjustment.
We would be happy to know your suggestions. You can write to us at akshaykenkre@transprice.in
Thank You and Happy Reading!!
Sceheme of Levy of MAT & Relevant Case lawsRam Kumar
The document provides an overview of Minimum Alternate Tax (MAT) under Section 115JB of the Indian Income Tax Act, including:
- MAT was introduced to tax companies that report large profits but pay little tax using deductions and exemptions.
- MAT is the higher of tax calculated under normal tax provisions or 18.5% of book profits (profits reported in financial statements).
- Book profits are adjusted by adding back deductions claimed and removing certain incomes to calculate MAT payable.
- Any MAT paid can be carried forward as a tax credit for future years when normal tax exceeds MAT payable.
The document summarizes various announcements made by the Reserve Bank of India, Ministry of Corporate Affairs, tax authorities and Ministry of Finance between June 5-9, 2017 regarding the introduction of a Legal Entity Identifier system for OTC derivatives, revisions to rules for issuing rupee denominated bonds overseas, recording Pension Payment Order numbers in pensioner passbooks, new information technology regulations for non-banking financial companies, clarification on shares transferred to IEPF Authority, transactions not subject to securities transaction tax, extension of deadline for furnishing Form 16 to employees, and status of States passing the State GST Act.
RBI
RBI can direct banks to initiate insolvency resolution process
NEFT system – Settlement at half-hourly intervals
RBI Circular on Timelines for Stressed Assets Resolution
SEBI
Instant Access Facility and Use of e-wallet for investment in Mutual Funds
TAXATION
Draft rules on valuation of ‘unquoted shares’ for Sec. 56(2)(x)/50CA of the Income Tax Act, 1961
OTHERS
IRDA notifies IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017
Clarification on Recently Notified Maternity Benefit (Amendment) Act,2017
Company Website:
www.acquisory.com
Important CA final chapter by CA Final classes in Mumbai.miamiamumbai
We have list of established CA Final classes in Mumbai who have a vision to provide excellent learning opportunity for students. Mia Mia expertise in listing the IPCC Classes in Mumbai. Students can check the list for CA Coaching in Mumbai and get the best information for their career.
Goods and Service Tax (“GST”) is a landmark indirect tax reform knocking at our doors. The government has released a set of model GST laws for public comments, thereby reinforcing its commitment to introduce GST at the earliest opportune time
Goods and Service Tax (“GST”) is a landmark indirect tax reform knocking at our doors. The government has released a set of model GST laws for public comments, thereby reinforcing its commitment to introduce GST at the earliest opportune time. The Finance Minister has indicated his willingness to implement this landmark reform with effect from 01.07.2017
We are one of the leading GST consultants in Mumbai, provide end to end solutions to maintain a good GST compliance rating by a comprehensive understanding.
This document provides an overview of Income Computation and Disclosure Standards (ICDS) implementation in India. It discusses the evolution of ICDS from initial notification of 2 accounting standards in 1996 to the notification of 10 ICDS in 2015 that are applicable from AY 2017-18 onwards. It also summarizes key highlights of ICDS including applicability, precedence over accounting standards/judicial rulings, transitional provisions and additional disclosure requirements.
Budget 2017 - Clause by clause analysis of amendments to direct tax laws (Par...D Murali ☆
Budget 2017 - Clause by clause analysis of amendments to direct tax laws (Part 3) - V. K. Subramani - Article published in Business Advisor, dated March 10, 2017 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Presentation on Industry 2020: Emerging GST Issues due to COVID-19Taxmann
Topics Covered in this Webinar:
1. ITC on invoices not uploaded by vendors – Amendment in Rule 36(4)
2. Refund/Adjustment of GST already paid on bad debts, and discounts
3. ITC implications if goods are destroyed/disposed off.
4. Eligibility of ITC on masks and sanitizers
Important Topics Covered in the Webinar:
1. How to claim ITC on Invoices of February to
August 2020?
2.Whether full ITC can be availed on invoices
pertaining to period 09.10.2019 to 03.04.2020 on
which no ITC was previously availed?
3. Whether remaining ITC can be claimed in any of
the subsequent months GSTR 3B’s where partial
ITC (10/20%) was availed previously as per Rule
36(4)?
Direct Tax Amendments Applicable From 1st April 2017Amarpal Jakhar
As Financial Year is ending, tax proposals in the Budget 2017 have now become law. This Budget focused on rewarding honest taxpayers, taxing the rich and bringing to task economic offenders. Here we are listing some of the major changes in direct taxation that would apply from April 2017.
This document provides an overview of GST audits and reconciliations in India. It defines an audit under GST as the examination of records to verify tax compliance. There are different types of audits including those conducted by tax authorities and annual audits required for businesses over a certain turnover threshold. Annual audits must be conducted by a chartered or cost accountant and involve reconciling financial statements with GST returns. The document also addresses common questions around the applicability of annual GST audits and clarifies key terms like aggregate turnover. Form GSTR-9C is described as the reconciliation statement that must be certified by an auditor and filed along with annual returns.
The Payment of Bonus act, 1965. this PPT has inclusion recent amendments and is done from the view point of students. If anything has been missed out, do let us know through comments.
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Determination and apportionment of input tax credit in respect of capital goods
(Critical analysis of Rule 43 of Central Goods and Services Tax Rules, 2017)
DISCLAIMER
The views expressed in this article are of the author(s). The Institute of Chartered Accountants
of India may not necessarily subscribe to the views expressed by the author(s).
The information cited in this article has been drawn from various sources. While every effort
has been made to keep, the information cited in this article error free, the Institute or any office
of the same does not take the responsibility for any typographical or clerical error which may
have crept in while compiling the information provided in this article.
Input tax credit (‘the ITC’) is the backbone of GST. On a perusal of section 73 and and74 will reveal
that wrong availment of ITC is being treated as violation, irrespective of its actual utilization. In this
article, Rule 43 of CGST Rules, 2017 (‘the Rules’) has been thoroughly discussed and critically
analyzed so as to enable every reader to use this article as a ready reference. Rule 43 talks about ITC
in respect of capital goods, so reference to any section in this article has been modified accordingly to
concentrate on capital goods only. There are certain errors in drafting of Rule 43, which we see with
the flow of discussion.
Issues to be analyzed
I. Emergence of Rule 43 and principles embedded therein
II. Express assumption taken by Rule 43 – does it hold goods in all situations?
III. Contradiction between Rule 43 and GSTR-3B
IV.Understanding Rule 43 – an easy digest of a complex drafting!
V. Situations not specifically covered by law
all above issues has been analyzed in this article at length at relevant places in the form of
discussion.
I. Emergence of Rule 43 and principles embedded therein
Section 17(1) and section 17(2) are cause of creation of Rule 43. Section 17(1) specifies that ITC in
respect of capital goods shall not be available to the extent these are used for non-business purposes.
Similarly, section 17(2) specifies that ITC in respect of capital goods shall not be available to the extent
these are used for effecting exempt outward supplies.
So, Rule 43 is based on following principles –
i. If inward supply of capital goods is used for effecting taxable outward supplies, then ITC shall
be available in respect of such goods to the extent these are used for said purpose.
ii. If inward supply of capital goods is used for effecting zero rated outward supply, then ITC shall
be available in respect of such goods to the extent these are used for said purpose.
iii. If inward supply of capital goods is used for effecting exempt outward supplies, then ITC shall
not be available in respect of such goods to the extent these are used for said purpose.
iv. If inward supply of capital goods is used for non-business purpose, then ITC shall not be
available in respect of capital goods to the extent these are used for said purpose.
ITC in respect of those capital goods shall also not be available, when such goods falls within the scope
of section 17(5).
2. Page 2 of 13
II. An express assumption taken by Rule 43 (for commonly used capital goods)
A capital good has a life of 5 years i.e. 60 months i.e. 20 quarters. So, ITC in respect of a capital goods
shall be available over a period of 5years/60months/20 quarters. Rule 43 specifically uses 5% per
quarter.
An implied intention of Rule 43
When we compare Rule 43 with Rule 42, there is no provision for annual recalculation in Rule 43 as
in Rule 42. So, Rule 43 has been drafted in such a manner that calculation of credit for a particular tax
period (month) must be accurate and final in that period itself.
In other words, as soon as a tax period (i.e. month) ends, self-assessment of 1/60th
of the credit also
must end. Noone needs revisit this 1/60th
part in next tax period(s). Similarly, one can conclude that as
soon a quarter ends, self-assessment of 5% for that quarter also ends. Rule 43 treats part of quarter as
complete quarter for purpose of this computation exercise.
Some other aspects relevant for understanding Rule 43
One can take credit in respect of a capital goods as soon as four conditions as specified in section 16(2)
are fulfilled, if not, credit is ineligible.
Let us analyze above concepts
Situation-1 Suppose certain capital goods were purchased and delivered on 20.07.2017 along with
invoice of even date. IGST charged on invoice was Rs. 6,60,000. Till December 2017, it was being
used exclusively for effecting exempt supplies. But, from January 2018 to June 2018, it was used
commonly for effecting taxable supplies, exempt supplies and non-business purposes. After July 2018,
it was used exclusively for effecting taxable supplies.
Turnover January 2018 February 2018 March 2018 April 2018 May 2018 June 2018
Exempt 4 crores 5 crores 2.5 crores 4 crores 2 crores 3.5 crores
Non-business 1 lakh 1 lakh 1 lakh 1 lakh 1 lakh 1 lakh
Total 10 crores 15 crores 10 crores 20 crores 11 crores 12.25 crores
Since the capital goods were being used for effecting exempt supplies upto December 2017, ITC would
have not been availed.
Monthly proportionate ITC = Total ITC ÷ 60 = 6,60,000 ÷ 60 = 11,000
ITC finalized upto December 2017 = monthly proportionate ITC × number of months lapsed
=11,000 × (months from July 2017 to December 2017)
= 11,000 × 6 = 66,000
So, out of Rs. 6,60,000, self-assessment of ITC of Rs. 66,000 has become final. In other words, since
the capital goods were used from July 2017 to December 2017 (i.e. for 2 quarters) for effecting exempt
3. Page 3 of 13
supplies, proportionate amount of ITC i.e. Rs. 66,000 will stand disallowed. And the remainder of the
available credit is fully available, for now.
Note: definition of quarter may have different impact in different situations (we will discuss this later in this article)
Now, we will consider treatment of remaining amount of ITC of Rs. 5,94,000 i.e. 6,60,000-66,000.
For the month of January 2018, capital goods were used for common purposes. (Assuming requirement
of section 16(3) is taken care; as entire Rule 43 itself is subject to section 16(3))
For this purpose, proviso to Rule 43(1)(c) read with Rule 43(1)(d) specifies that ITC in respect of
commonly used capital goods (i.e. common credit) denoted by “A” [ or ƩA= Tc] shall be calculated as
under –
Input tax on such capital goods 6,60,000
Less: 5% for every quarter from date of invoice 66,000
(i.e., 6,60,000 × 5% × 2)
TC = ƩA 5,94,000
Logically, if we exclude the proportionate exempt or non-business part from this Rs. 5,94,000, balance
credit should be granted to the registered taxable person.
When we move further, we seem to come upon an anomaly in Rule 43. Let’s see this –
As per Rule 43(1)(e), proportionate monthly common credit (denoted by Tm; Tm = Tc / 60) on such
goods shall be Rs. 9,900 i.e. 5,94,000/60 but it should logically have been Rs. 11,000 i.e., 6,60,000/60.
However, treatment flowing from the Rule is beneficial to taxpayer as can be seen below:
Proportionate exempt part i.e. common credit attributable towards exempt supplies denoted by Te shall
be calculated as under –
Te = (E÷F) × Tr
as specified in Rules as it appears logical
Te = (4÷10) × 9900 = 3,960 Te = (4÷10) × 11,000 = 4,400
Calculation of ITC in respect of said capital goods for January 2018
Particulars
Remark /
calculation
Amount
(as specified
in Rules)
Amount
(logically)
Amount to be credited in electronic credit ledger (i) TC 5,94,000 5,94,000
**Amount to be added in output tax liability (ii) Te 3,960 4,400
**Rule 43(1)(h) specifies that it shall be added to output tax liability along with applicable interest for the duration for which this
amount has been availed and held in credit. However, it is important to note that no interest may be levied on this amount in case ITC
is lying unutilized.
Where Tr = Ʃ Tm
E = Exempt turnover for the tax period
i.e. for January 2018 in our example
F = Total turnover for the tax period
i.e. for January 2018 in our example
4. Page 4 of 13
Another aspect to note here is that Rule 43 appears to be silent on proportionate credit relatable to non-
business use, that is, credit attributable towards non-business use of underlying capital goods.
Although such provision is notionally arrived through clause (j) for purpose of Rule 42, section 17(1)
specifies that where capital goods are used for non-business purpose then ITC shall not be available to
that extent. Since, the provisions of the Act ought to prevail, it appears prudent to include non-business
turnover while calculating exempt turnover for the tax period i.e. January 2018 in our example. In this
way, proportionate amount of credit attributable to non-business purposes would also stand reverse.
Non-business turnover can be determined by applying valuation Rules.
+
as suggested, exempt turnover needs to include non-business value also, however for ease of calculation, the same hasn’t been
considered.
$
No need, because Rs. 5,94,000 has already been credited in electronic credit ledger in month of January 2018
*
logically this amount should have been calculated based on Tr being Rs. 11,000 in place of 9900 which is as per Rules.
#
as ITC of Rs. 5,94,000 was taken in January 2018.
Calculation of ITC in respect of said commonly used capital goods from February 2018 to June 2018
Particulars
Remark /
calculation
February
2018
March 2018
April 2018 May 2018 June 2018
Tr (Rs.)
As per
Rules
9,900 9,900 9,900 9,900 9,900
+
E (Rs.)
As per
Rules
5 crores 2.5 crores 4 crores 2 crores 3.5 crores
F (Rs.)
As per
Rules
15 crores 10 crores 20 crores 11 crores 12.25 crores
$
ITC to be
taken
Nil Nil Nil Nil Nil
*Amount
to be
added in
output tax
liability
Te = (E÷F) ×
Tr
(as per
Rules)
3,300 2,475 1,980 1,800 2,828.57
#
Interest
to be
added
As per
Rules on
amount
added above
From Jan-
18 to Feb-
18
From Jan-18
to Mar-18
From Jan-18
to April-18
From Jan-18
to May-18
From Jan-18
to Jun-18
5. Page 5 of 13
Some realignment required in Rule 43 and its andpresentation in GSTR-3B - January 2018
From here, it can be clearly seen that even if Rules intend to add the amount in output tax liability but
while implementing the law, amount is being reversed from ITC.
Now, we can proceed to examine the situation in July 2018.
From July 2018 and onwards, said goods was used for taxable purpose, hence no separate treatment is
required because ITC in respect of said goods has already been availed and for this reason, Rule 43
does not specify any treatment.
Situation 2: when capital goods used exclusively for effecting taxable supplies are subsequently
used for common purpose
Similarly, for such cases, proviso to Rule 43(1)(d) has specified that in such case common credit (Tc)
shall be calculated as under –
Input tax on such capital goods -
Less: 5% for every quarter lapsed from date of invoice -
TC = ƩA -
However, there is no need to take here again, because ITC would have been taken on fulfilment of
conditions of section 16(2) of the Act.
Remaining procedure is exactly the same as discussed in situation-1.
Impact of definition of quarter
Definition of “quarter” as given in section 2(92) of the Act is equally important because as per
definition, quarter is not a period of three months from one date to another date but is a period of three
6. Page 6 of 13
months being April to June, July to September, October to December and January to March between
one date to another date.
If we find out number of quarters from 27.09.2017 to 04.07.2018, then number of quarters as per
definition shall be 5 quarters as under –
27.09.2017 to 30.09.2017
01.10.2017 to 31.12.2017
01.01.2018 to 31.03.2018
01.04.2018 to 30.06.2018
01.07.2018 to 04.07.2018
III. Understanding drafting (provisions) of Rule 43 with a case study
Assumption: GST law was implemented from 01.04.2010. this assumption has been taken so that
reader could imagine the real picture of Rule 43.
For better understanding, take example of October 2018. Please consider the following data to analyze
drafting of Rule 43:
Use for common purpose includes use of capital goods for effecting taxable supplies and exempt
supplies. Taxable supplies include zero rated supplies
Turnover type
Amount (Rs.)
(For October 2018)
Exempt 4 crores
7. Page 7 of 13
Total 10 crores
Now, while preparing returns for October 2018 and onwards.
CG1, CG2
5 years have been lapsed from date of invoice, So, these are not relevant.
Capital goods which are exclusively being used for particular purpose during October 2018
Capital goods which are being used for common purpose for the first time in October 2018
8. Page 8 of 13
Other capital goods which are being used for common purpose in October 2018
CG4: Tc in respect of CG4 would have been calculated in March 2017 as under
CG7: Tc in respect of CG7 would have been calculated in August 2017 as under
CG3 and CG8: Tc in respect of CG3 and CG8would have been calculated in May 2018 as under
9. Page 9 of 13
Amount of ITC on all capital goods whose useful life remains during October 2018 [Tr] shall be
calculated as under [see Rule 43(1)(f)]–
Tr = Ʃ Tm
= 12,050+5,950+10,000+9,400
= 37,400
Amount of credit attributable towards exempted supplies for October 2018 [Te] shall be calculated as
under –
Te = (E÷F) × Tr
= (4÷10) × 37,400
= 14,960/-
Where –
E = Exempt turnover for the tax period
i.e. October 2018 in our example
F = Total turnover for the tax period
i.e. October 2018 in our example
10. Page 10 of 13
Conclusion of determination and apportionment of ITC for October 2018
(As per Rule 43)
Amount to be credited in electronic credit ledger (i.e. ITC to be taken) in respect of –
CG9 : 1,92,000
CG5 : 3,63,000
CG11 : 2,40,000
7,95,000
Te to be added to output tax liability as per Rules (but to be shown as reversal in
GSTR-3B)
14,960
IV. Situations not specifically covered by law
When capital goods being used for common purpose are subsequently used exclusively for effecting
exempt supplies
Issue is not fully addressed in the law. Wherever, taxpayer subsequently deals entirely with exempt
supplies, then it is covered by section 18(1)(d) read with Rule 44. While other case where he continues
to deal with taxable supplies also, but the said capital goods becomes exclusively used for effecting
exempted supplies, then there is no specific provision.
Suppose a capital good was received on 22.09.2017 along with invoice of even date. IGST charged on
invoice was Rs. 1,20,000. Since the date of it’s receipt, it was being used for common purposes but
from 01.10.2018, it is being used exclusively for effecting exempt supplies. Undoubtedly, ITC has to
be reversed in month of October 2018.
Here, it is important to mention that Rule 43(1)(c) specifies that useful life of commonly used goods
shall be taken to be 5 years.
But in the absence of any specific provisions for treatment of ITC in such cases, following questions
arises –
a. Whether ITC to be reversed shall be reduced by 5% per quarter or part of the quarter?
b. Whether ITC to be reversed shall be reduced by 1/60th
per month or part of the month?
Note: calculation on the basis of month may differ from the calculation on the basis of quarter.
It becomes relevant to mention other related provisions like Rule 32 where 5% per quarter has been
used. similarly, again in Rule 40, 5% per quarter has been used. But in Rule 44, 1/60 per month has
been used.
This is matter of differences, so author reserves his views and leaves it to the wisdom of learned
members.
When capital goods being used for common purposes are subsequently used exclusively for effecting
taxable supplies
It is dealt by implication through Rule 43(1)(f). As the assets is no more common capital goods, the
same can be excluded from Tr. ITC would have already been credited in electronic credit ledger.
11. Page 11 of 13
When capital goods being used exclusively for effecting taxable supplies are subsequently used
exclusively for effecting exempt supplies
Issue is not fully addressed in the law. Wherever, taxpayer subsequently deals entirely with exempt
supplies, then it is covered by section 18(1)(d) read with Rule 44. While other case where he continues
to deal with taxable supplies also, but the said capital goods becomes exclusively used for effecting
exempted supplies, then there is no specific provision
As per section 17(2) r.w. Rule 43(1)(a), ITC shall be reversed.
Again, Rule 43 is silent on whether useful life of such capital goods is also to be taken 5 years. But it
becomes relevant here to mention Rule 44 where law states that life of capital goods shall be taken to
be 5 years. So here also, one has to decide whether –
a. Whether ITC to be reversed shall be reduced by 5% per quarter or part of the quarter?
b. Whether ITC to be reversed shall be reduced by 1/60th
per month or part of the month?
When capital goods being used exclusively for effecting exempt supplies are subsequently used
exclusively for effecting taxable supplies
It is covered by section 18(1)(d) read with Rule 40(1). It is also relevant to note the restriction in this
regard in section 18(2). While rule 43 permits ITC on capital goods, which was on receipt used for
effecting exclusively exempt supplies and subsequently used for effecting common supplies, without
time restriction of one year from date of invoice. But, there is restriction when the said item is
subsequently used for effecting exclusively taxable supplies in the section 18(2). However, issue would
remain open as regards capital goods being exclusively used for non-business purpose is subsequently
being used exclusively for business purpose. Subject to conditions under section 16(3) and 16(4), ITC
can be availed after reducing the value (quarterly or monthly).
V. Conclusion
Rule 43 is truly remarkable as it provides great insight into the thinking of relating credit to taxable
outward supplies even if it were for part of useful life of the capital goods. While it has been possible
with capital goods, avoiding cascading of taxes has not been all that successful in other areas and we
can swallow it as Government’s policy such as blocked credits. And a bird’s eye view is also appended.
This analysis of Rule 43 has been authored by CA Shashank Gupta, Agra and reviewed by CA Kasi V
Viswanathan, Chennai. Author’s have explored the workings of the rule based on the specific
circumstances visualized and readers are to consider those circumstances. These are views of the
Authors and ICAI does not endorse the same as its official interpretation of the relevant law.
12. Page 12 of 13
Bird’s eye view of Rule 43
Step-1: Find out all those capital goods which are not older than 5 years from the date of invoice.
Because, as explained above, self-assessment of ITC on capital goods older than 5 years would have
been dealt with earlier.
Step-2: Classification of capital goods as identified in step-1 and respective treatment