The EchoThe EchoThe EchoThe EchoCICASA INDORE- NEWSLETTER
December ~ The Month of Achievements
Y e a r 2 0 1 9 V O L U M E - 1 2
Chairman'sMessage
Dear Readers,As I begin to pen down this last message for 2019, my eyes are
filled with tears; tears of happiness that 2019 brought with it!It was a mesmerizing year. This December marks an end as well as
a new beginning!As I think of the glory I got to witness this year, there are showers of
happiness all around.I whole heartedly thank each one of you for making this year more
happening for me and my team.This year, CICASA Committee members left no stone unturned in
serving you all. We aimed at perfection and bringing you the best.Talking about the past month, November began with Campus
Placement at Indore Branch of ICAI. It was another successful
placement drive with deserving candidates getting selected by
MNCs and other renowned organizations.We organized an educational tour to the heritage city-Maheshwar. A three days seminar on Corporate Grooming was organised
wherein students got to learn the Corporate mantras.The upcoming month is going to be a great affair for all of us with
grand events lined up. We are all set to organize three major
events: Festin-O-Beats (Youth Fest) on 14th and 15th December,
National Talent Search 2019 on 20th December and the greatest of
all, CA Students National Conference 2019 on 24th-25th
December.Friends, our efforts materialized into events and events turned
successful with your participation and support. We hope you'll
grace the upcoming events with your participation.
A big thank you!Wish you a happy month ahead.
Regards,
CA Ankush Jain
Chairman, CICASA Indore
CA. ANKUSH JAINChairman,
CICASA, indore
Swerin Sharma Avani Mittal
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Dear Readers,
Rachel Anders once quoted that" the journey of life begins with turning of a page."These words hold true in this era. As we turn the page, we're all set to
embark on a new journey as there's something new to learn everytime.As we head towards the end of this year, it's our pleasure to recollect all the
good times we made together. We started on a journey in March and here
we are today!Beautiful poetries, fabulous write ups and excellent knowledgeable
content provided by you enriched the value of this monthly journal.Thankyou for being such good readers as well as content providers
throughout the year.This edition of 'The Echo' has some precious content.As you turn the pages, you'll learn something new and knowledgeable.The glimpses of events of the past month will let you relive those moments. Hope you enjoy reading this journal!
Best wishes..Happy reading!
Regards,Editorial BoardCICASA Indore
Any Student
can access
the
educational
knowledge
GST Registration
For GST registration as a Normal Taxpayer/ Composition/ Casual Taxable Person perform the following steps:
1. Access the https://reg.gst.gov.in/registration/ URL. 2. The GST Registration Home page is displayed. Click on "services" option.
3. Click on "New Registration". The Application form is divided into two parts:
Part A: 1. GST Registration page is displayed. Select "New Registration".
2. Select "Taxpayer" as the type to be registered. 3. Select your state for which GST Registration is required for your business. 4. Legal Name of Business (As mentioned in PAN).5. Permanent Account Number (PAN) of your business or Proprietor.6. Email Address of Authorized Signatory. 7. Valid mobile number of Authorized Signatory.
8. Enter the captcha text.
9. Click on PROCEED button.
10. OTP Verification box will pop up.
11. Enter OTP you have received on your mobile number & E-mail ID separately.
12. Click on PROCEED button.
13. Temporary Reference Number (TRN) is will be generated.
14. Click on PROCEED button.
Part B :
1. Enter the TRN generated and enter the captcha text.
2. Click on PROCEED button.
3. Enter OTP you have received on your mobile number & E-mail ID separately.
4. Click on PROCEED button.
5. My Saved Application page will be displayed.
{Note: The status of GST registration application is 'Draft' unless the application is submitted. Once the application is submitted, the status will change to 'Pending for Validation'.}
Topmost bar on the page display ten tabs as Business Details, Promoter/ Partners, Authorized Signatory, Authorized Representative, Principal Place of Business, Additional Places of Business, Goods and Services, Bank Accounts, State Specific Information, and Verification.
Click each tab separately and complete the details.
I. BUSINESS DETAILS :
Information related to the business which is required
for GST registration should be filed in this tab.
a) Enter the trade name of your business.
{Note: There is a difference in Trade name and legal
name of the business.}
b) Select the type of business formation. This can be
validated with CBDT under PAN entered in Part A of
form.
c) Choose the district and sector number of your
business.
d) In case you want to opt for composition scheme.
Click on the checkbox.
e) Date of commencement of should be marked.
f) Select the Date on which liability to register arises.
g) A casual taxable person shall electronically submit
an application at least five days prior to the
commencement of business.
II. PROMOTER/ PARTNERS :
Stakeholder details, which is to be constituted in the
details of the business. Details of at most 10
Promoters or Partners can be filed in.
a) Fill in personal details of stakeholder {Name, date
of birth, address, mobile number, email address,
and gender}
b) Enter official information of stakeholder
{ D e s i g n at i o n o f s ta ke h o l d e r, D i re c to r
Identification Number (DIN)}
c) If you are an India citizen select "Yes", In case of No,
Enter your passport number.
d) Mention PAN details.
e) Enter the Aadhar details of the stakeholder.
f) Enter the address of promoters.
g) Upload their recent photograph.
III. AUTHORIZED SIGNATORY :
Details of authorized signatory are displayed here.
a) In case of Primary Authorized Signatory, select the
appropriate option.
b) Enter the personal details of authorized signatory.
c) Enter official information of stakeholder
{ D e s i g n at i o n o f s ta ke h o l d e r, D i re c to r
Identification Number (DIN)}
d) If you are an India citizen select "Yes", In case of No,
Enter your passport number.
e) Mention PAN details.
f) Enter the Aadhaar number of a promoter.
IV. AUTHORIZED REPRESENTATIVE :
Details of authorized representative should be
mentioned here.
In case of GST Registration Practitioner –
Enter the enrolment ID of GST Registration
Practitioner representing you.
Click the SEARCH button.
In case of other –
Name of person, designation, mobile number
a n d e m a i l a d d r e s s o f a u t h o r i z e d
representative.
Click the SAVE & CONTINUE button.
V. PRINCIPAL PLACE OF BUSINESS :
Principal Place of Business is the prime location
Enter the number of bank accounts and click
the ADD NEW button.
Enter the Bank account number.
Select the type of account.
Enter the IFSC code.
Upload the scanned copy of Bank passbook/
statement.
IX. STATE SPECIFIC INFORMATION :
Details of the state in which your business is
located.
Specify your professions tax E.C number.
Professional Tax Registration Certificate
(RC) No. must be mentioned.
State Excise License No. must be specified(if
any)
Specify the name of the person holding the
excise license(if any).
X. VERIFICATION :
Select the Verification checkbox.
Name of authorized signatory should be
selected.
Enter the place where the form is filed.
After filling the enrolment application, digitally
sign the application using Digital Signature
Certificate (DSC)/ E-Signature or EVC
within the State where the substantial activity of
the business is performed.
Fill the address details pertaining to the
principal place of business.
Enter the official contact details
Select the nature of possession of premises
Upload the documents which are required to
be verified
VI. ADDITIONAL PLACES OF BUSINESS :
Enter the number of additional places of
business and click the ADD NEW button.
VII. GOODS AND SERVICES :
Goods and services supplied by the business are
mentioned under this dialogue box.
In case a person deals with Goods or
Commodities, mention the HSN Code in the
Goods tab.
In case a person dealsin services, mention the
Service Classification Code (SCC) in the
Services tab.
VIII. BANK ACCOUNTS :
Bank accounts details maintained for conducting
business are to be mentioned here.
PRAGATI DHUNDALECRO0630951
Lessons from History :
Building up of the
Global Financial Crisis 2008
The 2008 financial crisis is the worst economic disaster since the Great Depression. Unless you understand its true causes, it could happen again. To begin with, let us first understand the financial structure in the 2000s which was the major cause of the magnification of the crisis.
In a traditional bank, the bank receives money from investors and in return provides them with runnable debts (money-like safe securities such as demand deposits). This money is then lent to borrowers. The deposits made by investors are insured by the government sponsored enterprises (heard of Frannie Mae and Freddie Mac?) to the limit of a threshold ($100,000 at that time). Since such insurance only protects the first $100,000 of your deposits. What about the rest (let us say, $1,000,000)? This is when the shadow banking system comes into picture. In fact, in the run up to the crisis, such runnable debts were created in many other forms by these shadow banks:
1. Retail Investors invest into institutions like money market mutual funds and receive shares in return.
2. These institutional investors then go on to invest their cash pool into financial institutions. In a traditional banking system, they would receive runnable debts like demand deposits(insured savings) in return.
3. Banks lend this money received to borrowers and receive loan deeds (mortgages – assets for the bank) in return.
The problem here is that if such institutional investors get runnable debts like deposits, a
major portion of their deposits would be not insured by FDIC due to the large amounts involved. This is when banks came with a solution which later on became the core of the asset bubble in the financial crisis – 'the sub-prime bubble'.
1. What the banks do is that, they transfer all the mortgages (assets forbanks) from borrowers into a box called “Securitization” wherein all the mortgages are bundled together into a pool of assets and divided into tranches – senior tranche (AAA), next tranche (AA),next tranche (BBB) ……… and the last tranche (Unrated) (a.k.a. equity tranche) which are available for sale to the investors with different risk-taking abilities. This process of manufacturing of securities from mortgages of the banks is called securitization and such securitized bonds are known as mortgage backed securities.
2. Then, banks ask investors to buy a slice of those securitized bonds. Alternatively, bank give back collateral to the investors in the form of a slice of those securitized bonds under a repurchase agreement (“repo”) where the investors buy the collateral today with a promise by bank to repurchase it in the future. In effect, both the process are leading to investors getting an additional security in the form of a collateral whose underlying assets are the mortgages of the banks.
Note that in case of any default, the senior tranche is going to be paid first and the junior tranches in the end. Thus, we can say that the presence of junior tranches and the magnitude of their presence determines the magnitude of safety net for the senior tranches. In other words, the senior tranche is going to be a safe
Global Financial Crisis2008
asset as long as there is enough margin below it i.e. if senior tranche is say 60% of the overall value of the trust, then the value of the pool of assets has to reduce by 40% or more before the senior tranche would be in any danger of not being paid back. The $1,000,000 if invested into the senior tranche, then it can be said that the entire $1,100,000 has been invested into safe assets.
Before the dot-com bubble, investors would invest into government treasury bills (safe assets with good return). But subsequent to the fall in the coupon rates of such T-bills, there was a lookout for its substitutes that had low risk but provide better returns. It was unanimously assumed by the markets that house prices will always rise and there is no risk of default in mortgage payments (I mean, who the hell does not pay his mortgages?) ideology was present. Thus, investors started investing into mortgages in the form of mortgage backed securities (“MBS”) manufactured by investment banks.
Investment bankers were making huge amounts of money by securitizing mortgages and selling MBS however, they could manufacture MBS only as long as there are mortgages to be securitized. Thus, when all of the prime mortgageborrowers had purchased homes, it comes the time of sub-prime homeowners i.e. the banks started giving loans to other borrowers who did not have enough credibility to repay their mortgages. However, since those mortgages were securitized, bundled into mortgage backed securities and divided into tranches, it was assumed by the market that the senior tranches are safe. This was, in fact, supported by rating agenci e s S & P ' s a n d Moody 's wh ich gave AAA ratings to the senior tranches of such s u b - p r i m e m o r t g a g e b a n k e d securities.
Now, remember that the expectations of the entire market is that the house prices will always go up. Hence, the mortgage brokers give mortgages to even such risky sub-prime borrowers thinking that even if they default, they can recover the amount of the default from the value of the house. This process of securitizing sub-prime borrowers became so popular that the sub-prime market was in a “mania” of boom during the period prior to 2007.
Now, bankers know that such CDOs are made of shit bag mortgages which are “designed to fail”, so in order to control the downside of their investments, the banks started to buy insurance for their mortgages in the form of credit default swaps i.e. if the mortgage defaults, then the insurance company will pay for the mortgages (in other words, the banks move the risk of potential losses off of their books so they can invest more money, manufacture more CDOs, sell more CDOs and make more money). A notable event here is that in 2000, US government announced the deregulation of derivatives in the financial market. As the financial sector was characterized by highly competitiveness and rather low profit margins for standard products, investment banks were encouraged to “search for new financial products, especially those whose credit-worthiness not everybody agrees on”. One such insurance company which was greedy and bought millions of such swaps was AIG, in return receiving hundreds of millions of dollars
as fees.
THE TURNING POINT: Mortgages start to default. The entire empire
of the housing economy was created on the basic assumption that housing prices will always continue to grow up and “Who does not p a y t h e i r mortgages?” i d e o l o g y.
And majority of the financial system derived its securities and value from the housing economy itself. Thus, when homeowners would start defaulting on these mortgages, it triggered what later become a housing crisis (which got the name of “sub-prime crisis”). But such defaults in mortgages did not start reflecting as fall in the prices of mortgage backed securities until BNP Paribas, on August 9, 2007 declared that they are unable to value exactly what is the worth of the subprime securities in their funds and suspended redemptions in these funds (because you can't redeem and give people money back if you can't value what their, what the assets and the underlying fund are worth). This was a massive shock to the market as all market participants started to worry, if BNP Paribas can't figure out what these things are worth, what hopes do the rest of us have? Hence, sub-prime securities which were considered to be safe assets were now no more “information insensitive”. The implications of this can be seen from the graph below which shows the rapid fall in the value of outstanding ABCPs in the market right after the announcement by BNP Paribas. (ABCPs are asset backed securities like mortgage backed securities discussed above). We define that a program experiences a run in weeks when it does not issue paper but has at least 10% of paper maturing or when the program continues to not issue after experiencing a run in the previous week.
Now, when the mortgages are defaulted only by some borrowers in a CDO, there is no problem as the house prices are rising and he can sell off the property again to recover the amount defaulted. However, when more and more borrowers start defaulting (which is not surprising consider the magnitude of sub-prime mortgages), the supply of houses in the market skyrockets which starts reducing the price of the houses. With such house prices plummeting, there comes a point where the price of the house is less than the value of the loan and at such a point, even the borrowers who can afford to make their monthly payments would consider defaulting on their loans. Overall, what implies is that the house price plummet accelerates. This makes the entire CDOs (especially the sub-prime MBS)
worthless, i.e. even the AAA rated securities are now worth nothing.
All the investment bankers who had insured their mortgages now go to insurance companies for repayment. But the mortgage defaults are of so huge amounts that the insurance companies (who, because of the amount of fees and perceived minimal risk had more than 80% of their portfolio into CDO default swaps) could not pay all of the swap payments AT THE SAME TIME. Because of this, there was a run on insurance companies (like AIG). When the entire bubble collapsed AIG had to honour the claims of the policy holders. They could not handle such huge claims from large number of people. This in turn led to the collapse of AIG which later received a whopping 183 billion dollars bailout package. This meant that every bank they insure had to book massive losses on the same day. In fact, every holder of a CDO, whether insured or uninsured has to book massive losses because of the failure of the housing economy. This includes investment bankers who are the manufacturers of CDOs, investors who already have purchased thousands of CDOs (including Frannie and Freddie), mortgage lenders who have mortgages which the bankers won't buy. What is the result is that the whole financial system is at a sand still with no purchase or sale activities due to lack of liquidity and uncertainty in the market. The sand still continues until everyone starts going bankrupt (With the panic starting with Lehman Brothers).
PRAKHAR GUPTA CRO0612184
What is meant by cancellation of registration?Cancellation of GST registration simply means that the taxpayer will not be a GST registered person any more. He will not have to pay or collect GST.For certain businesses, registration under GST is mandatory. If the GST registration is cancelled and business is still continued, it will mean an offence under GST and heavy penalties will apply.Who can cancel the GST registration?Cancellation of GST registration can be done by-
Cancellationof registrationunderGST
electronically in FORM GST REG-29 at the common portal.
The proper officer shall, after conducting an enquiry as required will cancel the registration.
Cancellation by taxpayer in other cases
Why does a taxpayer wish to cancel his registration?
1. The business has been discontinued.
2. The business has been transferred fully, amalgamated, demerged or otherwise disposed —The transferee (or the new company from amalgamation/ demerger) has to get registered. The transferor will cancel its registration if it ceases to exist.
3. There is a change in the constitution of the business (for example- Private limited company has changed to a public limited company)
Forms for cancellation
All those who cannot follow the above method must file an application for cancellation in FORM GST REG 16.
Application for cancellation has to be made in FORM GST REG 16.
The following details must be included in FORM GST REG 16-
1. Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied.
2. Liability thereon
3. Details of the payment
Cancellation when Turnover is less than 20 lakhs
Every person who was registered under old laws had to mandatorily migrate to GST. Many such persons are not liable to be registered under GST.
For example, the threshold under VAT in most states was 5 lakhs whereas it is 20 lakhs under GST. However, do make sure an individual is not making any inter-state supplies since registration is mandatory for inter-state suppliers except for service providers.
Such a taxpayer can submit an application
*** Application for cancellation, in case of voluntary registrations made under GST, can be made only after one year from the date of registration.
Cancellation of GST
registration
Requested by Tax Payer
Turnover isless then20 lakhd
Other cases ***
Legal heirs, in case of death of
tax payer
Tax Officer
The proper officer has to issue an order for cancellation in FORM GST REG-19 within 30 days from date of application. The cancellation will be effective from a date determined by the officer and he will notify the taxable person
Cancellation by tax officer
Why will the officer cancel registration?
The registration can be cancelled, if the taxpayer-
a) Does not conduct any business from the declared place of business
b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions)
c) Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)
Procedure
i. If the proper officer has reasons to cancel the registration of a person then he will send a show cause notice to such person in FORM GST REG-17.
ii. The person must reply in FORM REG–18 within 7 days from date of service of notice why his registration should not be cancelled.
iii. If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in FORM GST REG –20.
iv. If the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.
Revocation of cancellation of registration
What is revocation of cancellation?
Revocation means the official cancellation of a decision or promise. Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.
When is revocation of cancellation applicable?
This is applicable only when the tax officer has cancelled the registration of a taxable person on
his own motion. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.
Procedure
i. A registered person can submit an application for revocation of cancellation, in FORM GST REG-21, if his registration has been cancelled suomoto by the proper officer.
ii. He must submit it within 30 days from the date of service of the cancellation order at the Common Portal.
iii. If the proper officer is satisfied he can revoke the cancellation of registration by an order in FORM GST REG-22 within 30 days from the date of receipt of the application. Reasons for revocation of cancellation of registration must be recorded in writing.
iv. The proper officer can reject the application for revocation by an order in FORM GST REG-05 and communicate the same to the applicant.
v. Before rejecting, the proper officer must issue a show cause notice in FORM GST REG–23 for the applicant to show why the application should not be rejected. The applicant must reply in FORM GST REG-24 within 7 working days from the date of the service of notice.
vi. The proper officer will take decision within 30 days from the date of receipt of clarification from the applicant in FORM GST REG-24.
Note : Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first along with payment of all dues amounts of tax, interest & penalty.
SOMESH AGASHECRO0617308
Some Important Dates
31/12/19 : GSTR 9
Due date for filing the most comprehensive Annual
Return for FY 17-18 by all the registered persons under
GST having an aggregate turnover of more than Rs. 2
Crores or opted to file Annual Return.
31/12/19 : GSTR/9C
Annual Return for FY 17-18 by registered person
whose Annual Turnover for FY 17-18 is above Rs. 2
Cores
11/12/19 :
Due date for filing GSTR 1 for Nov 19 (Applicable for
taxpayers with Annual Aggregate turnover Above Rs.
1.50 Crore or opted to file monthly Return
10/12/19 :
Due date for filing GSTR8 (to be filed by the
e/commerce operators required to deduct TDS under
GST for Nov 2019)
10/12/19 :
Due date for filing GSTR7 (to be filed by the by the
person who is required to deduct TDS under GST for
Nov 2019.
20/12/19 :
Due date for filing GSTR5 & 5A (to be filed by the
Non/Resident taxable person & OIDAR for Nov 19.
13/12/19 :
Due date for filing GSTR6 (to be filed by Input Service
Distributor for Nov 19)
20/12/19 :
GSTR3B for Nov 19.
07/12/19 :
Due date for depositing Tax deducted by an
assessee other than an office of the Government for
the month of Nov 19.
15/12/19 :
Third installment of advance tax for the assessment
year 2020-21
15/12/19 :
Due date for issue of TDS Certificate for tax deducted
u/s 194IA (TDS on Immovable property) in Oct 19
15/12/19 :
Due date for issue of TDS Certificate for tax deducted
under section 194IB (TDS on Certain Rent payment) in
Oct 19
15/12/19 :
Due date for furnishing of Form 24G by an office of
Government where TDS Nov 19 has been paid
without production of a challan
30/12/19 :
Due date for furnishing of challan-cumstatement in
respect of tax deducted u/s 194IA in month of Nov 19
30/12/19 :
Due date for furnishing of challan-cumstatement in
respect of tax deducted u/s 194 IB in month of Nov 19
15/12/2019 :
PF payment for Nov 19
15/12/19 :
ESIC payment forNov 19
25/12/19 :
PF Return filling for Nov 19
31/12/19 : PAN/Aadhaar linking deadline.
RIYA NIGAM CRO0616047
Glimpses ofMAHESHWAR