Taxman starts questioning & issuing notices to BPOs E-commerce firms not liable to collect TCS from suppliers with less than 20 lakh turnover: CBIC Indenting agents of foreign firms may get relief on IGST AAAR okays GST on Inter-State Office Services Charges for cheque bounce to attract GST Supply to duty-free shops liable to GST rules high court Start- ups accredited by DIPP will no longer be asked to pay angel tax MNC units Indian firms get tax notices for receiving FDI ITR forms will soon be pre-filled for you: CBDT CBDT may scan companies outbound investments Power to approve alteration of AoA delegated to Regional Director SEBI proposes early warming mechanism to prevent diversion of client's securities Volume 10 Issue 1,January 2019 Newsletter SNR COMPANY accountantS & Chartered One month after the Authority of Advance Ruling (AAR) ruled that back office support services qualify as “intermediary” support services and not exports, officers of the indirect tax department have started issuing preliminary notices to captive units of multinationals and Indian companies exporting offshore support services. AAR's directive meant several back offices of multinationals and Indian companies providing offshore support services to foreign companies now face 18% GST liability. The AAR held that some services provided by BPO may qualify as intermediary service and therefore, may not qualify as export service. Highlights For private circulation only among clients and associates Page 1 of 6 Taxman starts questioning & issuing notices to BPOs GST
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Taxman starts questioning & issuing notices to BPOs E-commerce firms not liable to collect TCS from suppliers with less than 20 lakh turnover: CBICIndenting agents of foreign firms may get relief on IGST AAAR okays GST on Inter-State Office ServicesCharges for cheque bounce to attract GSTSupply to duty-free shops liable to GST rules high courtStart- ups accredited by DIPP will no longer be asked to pay angel taxMNC units Indian firms get tax notices for receiving FDIITR forms will soon be pre-filled for you: CBDTCBDT may scan companies outbound investmentsPower to approve alteration of AoA delegated to Regional Director SEBI proposes early warming mechanism to prevent diversion of client's securities
Volume 10 Issue 1,January 2019
NewsletterSNR COMPANY
accountantS
&Chartered
One month after the Authority of Advance Ruling (AAR) ruled that back office support services qualify as “intermediary” support services and not exports, officers of the indirect tax department have started issuing preliminary notices to captive units of multinationals and Indian companies exporting offshore support services. AAR's directive meant several back offices of multinationals and Indian companies providing offshore support services to foreign companies now face 18% GST liability. The AAR held that some services provided by BPO may qualify as intermediary service and therefore, may not qualify as export service.
Highlights
For private circulation only among clients and associates Page 1 of 6
Taxman starts questioning & issuing notices to BPOs
GST
For private circulation only among clients and associates Page 2 of 6
SNR COMPANY
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E-commerce firms not liable to collect TCS from suppliers with less than Rs 20 lakh turnover : CBIC
Indenting agents of foreign firms may get relief on IGST: Sources
In a blow for companies with a presence in multiple states, the Karnataka Appellate Authority for Advance Rulings (AAAR) has upheld the levy of goods and services tax on services rendered by one office branch to other centres. In-house service functions such as human resources and payrolls, if carried out from a centre in one state for offices in other states, will attract GST for which it will have to issue an invoice. A large business based in New Delhi with centralised finance, IT and HR functions for branches across states would be deemed to be providing support services to the other locations and would need to raise invoices charging GST.
AAAR okays GST on Inter-State Office Services
The e-commerce companies are not liable to collect TCS on supplies made by entities with turnover not exceeding Rs 20 lakh and are not registered under GST, the CBIC has said. As per Goods and Services Tax (GST) provisions, beginning October 1, 2018, e-commerce companies deduct 1% tax collected at source (TCS) before making payments to their suppliers.
Volume 10 Issue 1,January 2019
Indenting agents of foreign companies may get partial relief on integrated goods and services tax (IGST). Sources said that the finance ministry officials have assured the indenting agents — agents of foreign companies, who sell their products in India and overseas by charging a commission — that it will consider their demand for exempting them from IGST but only partly. IGST may not be levied on transactions, where the goods are sold overseas.
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For private circulation only among clients and associates Page 3 of 6
Facing flak from start-ups, the government may announce modifications to the “angel tax” law in the coming weeks. All start-ups accredited by the Department of Industrial Policy and Promotion (DIPP) will no longer be asked to pay angel tax, sources involved in the inter-ministerial discussions said. Earlier, the rule said only those start-ups that have been given such an exemption by a government board will be excused.
Supply to duty-free shops liable to GST, rules high court
Income Tax
Charges for cheque bounce to attract GST
Charges for cheque bounce collected by an entity from its customers are liable to be taxed with the applicable Goods and Services Tax (GST) rate, the Authority for Advanced Ruling (AAR) in Maharashtra ruled. The applicant, a non-banking financial company, argued that cheque-bounce charges were a form of penalty or liquidated damages and therefore not a consideration for supply. Hence, such charges collected weren't taxable under the GST. The AAR ruled that the recovery of charges in lieu of cases where a party fails to honour its commitment of timely payment is act of toleration of such an act. Charges ensure that the applicant continues its agreement with its customers despite default. This, therefore, is construed as supply under the GST Act and hence taxable.
Start- ups accredited by DIPP will no longer be asked to pay angel tax
After the Authority for Advanced Ruling (AAR) under the GST, the Madhya Pradesh High Court has also held that a trader supplying goods to duty-free shops at the airport can't be exempted from paying the GST as the supply isn't a form of export. “The petitioner is selling to a person, who is having duty-free shop (to a duty-free operator), which is located in India as per the definition clause as contained under the GST Act,” the order said.
Volume 10 Issue 1,January 2019
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For private circulation only among clients and associates Page 4 of 6
Indian companies setting up operations overseas and, in the process, resorting to aggressive tax planning via investment structures to mitigate their tax liability could find themselves in the harsh spotlight of the taxman. “We now need to think of preserving and augmenting our tax base. We have to look at the Indian industry, which is launching globally. We haven't yet paid much attention to this part of tax compliance (relating to outbound investments).
ITR forms will soon be pre-filled for you: CBDT
Income Tax
MNC units Indian firms get tax notices for receiving FDI
After slapping 'angel tax' notices on startups, the taxman's attention seems to have turned to foreign direct investment (FDI) in multinationals and Indian companies where a 'premium' was paid over and above the 'fair market value' of shares. The income tax department has started issuing notices to several companies that have received FDI, claiming that the 'premiums' they received on such transactions are 'unexplained credits' that can be held as income.
CBDT may scan company’s outbound investments
The process of filing tax returns will soon become a lot easier, with the tax department planning to introduce pre-filled fields based on information already available with it, cutting out the tediousness of this annual excercise. Data available from entities that deduct tax at source such as employers and banks would be used to offer pre-filled tax return forms to people, Sushil Chandra, chairman of Central Board of Direct Taxes (CBDT), said, adding that work on this project was on. A pre-filled return could be submitted directly or after required modifications, he said.
Volume 10 Issue 1,January 2019
For private circulation only among clients and associates Page 5 of 6
In order to tackle issues related to diversion of client securities, the market regulator, SEBI has decided to put in place an early warning mechanism which will help to sharing information between the stock exchanges, depositories and clearing corporations to detect the diversion of client's securities.
SEBI proposes early warming mechanism to prevent diversion of client’s securities
The Ministry of Corporate Affairs (MCA) has delegated its power related to Alteration of Articles of Association of companies having the effect of conversion of a public company into a private company to the Regional Directors at Mumbai, Chennai, Kolkata, New Delhi, Ahmedabad, Hyderabad and Shillong.
Power to approve alteration of AoA delegated to Regional Director
Volume 10 Issue 1,January 2019
Income Tax
For private circulation only among clients and associates
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RBI / FEMAStock Indices
Opening[ 01-Dec-2018]
Closing[31-Dec-2018]
Change (%)
Sensex
Nifty
Dow Jones
FTSE
Gold
Silver
36,068.30
10862.55
23,327.46
6,728.24
INR / 10 gm32,675.00
INR / Kg34,620.57
-0.48%
-0.62%
-9.68%
-1.89%
4.19%
5.76%
US ($) - INR 69.65 Euro (�) - INR 78.85 GBP (£) - INR 88.82
Source - Global Indices, BSE, NSE, RBI, MCX INDIA
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