ITR: No requirement of scrip wise reporting for day trading and short-term sale or purchase of listed shares

There was a report in certain section of media that stock traders/day traders are required to furnish scrip wise details in the return of income for AY 2020-21. 

The gain from share trading in the case of stock traders or day traders is generally categorised as short-term capital gains or business income. 

This is because their holding period of shares/units in most of the cases is less than one year which is a prerequisite for the gains to be categorised as long-term capital gains. As there is no requirement in the return of income for scrip wise reporting in case of short-term/business income arising from share transactions, these reports are distorted and misleading.

The Finance Act, 2018 allowed exemption to the gains made on the listed shares/specified units up to 31.01.2018 by introducing grandfathering mechanism for the computation of long-term capital gains for these shares. 

The scrip wise details in the return of income for AY 2020-21 is required to be filled up only for the reporting of the long-term capital gains for these shares/units which are eligible for the benefit of grandfathering.

As the grandfathering is to be allowed by comparing different values (such as cost, sale price and market price as on 31.01.2018) for each shares/units, there is a need to capture the scrip wise details for computing capital gains of these shares/units. The scrip wise details are not required in income tax return forms for AY 2020-21 for computation of capital gains/business income from shares/units which are not eligible for grandfathering.

Without this reporting requirement, there may be situations where taxpayer may not claim or wrongly claim the benefit of grandfathering due to lack of understanding of the provisions. Also, if the above calculation is not made scrip wise and taxpayer is allowed to enter the total figures only, there will be no way for the income tax authorities to check the correctness of the claim and therefore many returns will require to be audited, which may lead to unnecessary grievances/rectifications at a later stage. If scrip wise long-term gain is available, it can be cross verified by the Department electronically with stock exchange, brokerage companies, etc and there will be no need to subject these income tax returns to further audits or scrutiny.

Thus, the main intent behind requiring scrip wise detail is to facilitate the taxpayer incorrectly computing the long-term capital gains on these shares/units. The requirement to provide scrip wise information in the income tax return is not unique to India. Internationally also, the taxpayer is required to provide scrip wise information for reporting capital gains. For example in the USA, a taxpayer having capital gains from the transfer of shares is required to fill scrip wise details in Schedule-D of Form 1040 income tax return form in the USA.

The Press Release can be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1659412

Govt after CAG report: No diversion of GST cess

1.jpg The government has dismissed suggestions of diverting GST compensation cess into its books and said that the money was temporarily lying in the Consolidated Fund of India, pending reconciliation. In its latest report, the Comptroller and Auditor General of India had said that during 2017-18 and 201819, there was “short crediting” of compensation cess of around Rs 47,000 crore, which resulted in overstatement of the Centre’s revenue receipts and understatement of fiscal deficit. The finance ministry chose to respond to political criticism from Kerala finance minister Thomas Isaac, who had alleged “diversion” of funds. Denying the charge, a government source said: “…whatsoever was the compensation due to the states for the year 2017-18 and 201819 were fully paid and the time taken in reconciliation of compensation receipts can’t be termed as diversion of GST Cess Fund when the dues were fully released by the central government.” Finance ministry officials said the compensation receipt in the CFI was subject to reconciliation in the coming months in the subsequent financial year.

 “If for that reason the amount remained in the Consolidated Fund of India, how can that be treated as ‘diversion’? Even the CAG in its report has not said so,” a source said. Officials said in line with the Constitutional provi sions, receipts including taxes and cess collected by the Centre need to be first credited into CFI before being transferred to another fund through a budget head. In case of the GST compensation cess, officials said since the final accounts are known only after the end of the financial year, usually around June-end, the excess amount temporarily stays in CFI. “After reconciliation, the amount is transferred to Compensation Fund and from that Fund to states as per their compensation formula,” a source said. During 2017-18, Rs 62,611 crore was collected as compensation cess and Rs 41,146 crore was paid to states. In 2018-19, against collections of Rs 95,081 crore, Rs 69,275 crore was paid. While Rs 47,271 crore did remain unutilised for reconciliation after payment of all the dues, the money has been used up subsequently. “Therefore, it can’t be said that this Rs 47,721 crore was diverted for other uses,” said a source. Read More at: https://timesofindia.indiatimes.com/business/india-business/no-diversion-of-gst-cess-govt-after-cag-report/articleshow/78342219.cms

CNBC-TV18: GSTR 9 & GSTR 9C deadline likely to be extended further by 1 month

http://www.a2ztaxcorp.com/wp-content/uploads/2020/09/GSTR-9-9C.jpg As per the recent tweet of CNBC-TV18, the GST implementation committee considering to extend GSTR-9 & GSTR-9C (For FY18-19) deadline by one month. Extending GSTR-9 & GSTR-9C Deadline For FY18-19 GST Implementation Committee Considering To Extend GSTR-9 & GSTR-9C (For FY18-19) Deadline By One Month Several Trade And Industry Representations Made To The Govt To Extend The Deadline Noting COVID-19 Hardships GST Implementation Committee Yet To Take A Formal Decision Alert: Current Deadline To File GSTR-9 & GSTR-9C (For FY18-19) Is September 30, 2020 Source: https://twitter.com/CNBCTV18Live/status/1309391877934727170

CBIC waived the Late Fees for taxpayers having Nil Liability in Form GSTR-4 for the Period July 2017 to Mar 2020

CBIC vide Notification No. 67/2020 - Central Tax dated September 21, 2020, waived the late fees payable u/s 47 of the CGST Act, in excess of two hundred and fifty rupees (Rs. 250/- for CGST) for the registered taxpayers having liability and fully waived for NIL taxpayers in Form GSTR-4 for the quarters from July, 2017 to March, 2020, if the return is filed between September 22, 2020 to October 31, 2020.

NO EXTENSION

The amended taxation bill passed by loksabha. The ambiguity of language created an impression that dates for filing ITRs etc has been extended.

 However that is not true. 

 The bill starts from third proviso of section 3 which is as under: “Provided also that where the specified Act is the Income-tax Act, 1961 and the compliance relates to— (i) furnishing of return under section 139 thereof, for the assessment year commencing on the— (a) 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of September, 2020” had been substituted; (b) 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of November, 2020” had been substituted; (vii) furnishing of report of audit under any provision thereof for the assessment year commencing on the 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “31st day of October, 2020” had been substituted:“ Now after reading the above amendments many believed for once that due date have been extended to 31 March 2021 for all income tax returns and tax audit reports. However, that’s not true.

 If one reads the above bill carefully the first sub section extends all the due date between 20 March 2020 to 31 December 2020 to 31 March 2021 whereas the next proviso clarifies that for various due dates shall not extend to 31 March 2021 where it will extend to some specific date.

 For eg: 1. Due date for return of A.Y. 2019-20 will be 30 September 2020 instead of 31 March 2021.

 2. Due date for return of A.Y. 2020-21 u/s 139(1) will be 30 November 2020 instead of 31 March 2021.

 3. Due date for tax audit report for A.Y. 2020-21 will be 31 October 2020 instead of 31 March 2021. 

 Thus there is no extension as on 19 September 2020 for ITR filing or Tax Audit Due date 

 CA Amresh Vashisht 

Meerut

GSTN Advisory: Delinking of Credit Note/Debit Note from invoice, while reporting them in Form GSTR-1/GSTR-6 or filing Refund

 GSTN has issued an advisory dated September 17, 2020, on Delinking of Credit Note/Debit Note from an invoice, while reporting them in Form GSTR-1 / GSTR-6 or filing Refund. Till now, the original invoice number was mandatorily required to be quoted by the taxpayers, while reporting a Credit Note or Debit Note in Form GSTR-1 or Form GSTR-6.

The taxpayers have now been provided with a facility on the GST Portal to:

• A report in their Form GSTR-1 or in Form GSTR-6, single credit note or debit note issued in respect of multiple invoices
• Choose the note supply type as Regular, SEZ, DE, Export, etc., to identify the table to which such credit note or debit note pertains
• Indicate Place of Supply (POS) against each credit note or debit note, to identify the supply type i.e. Intra-State or Inter-State
• Debit /Credit Notes can be declared with tax amount, but without any taxable value also i.e. if a credit note or debit note is issued for the difference in tax rate only, then note value can be reported as ‘Zero’. The only tax amount will have to be entered in such cases.
• Similar changes have been made while reporting amendments to credit note or debit note

Corresponding changes have also been made in the refund module. Thus, while applying for a refund, taxpayers can now report such credit notes or debit notes in statements (filed during filing the refund application) without mentioning the related invoice number. The taxpayer would be required to select the document type from a drop-down comprising of invoice/ debit note/ credit note.

The change has been provided while filing refund application of following types/ cases:

• Refund for export of services with payment of tax
• Refund on account of goods & services without payment of tax
• Refund on account of supply of goods or services to SEZ with payment of tax
• Refund on account of supply of goods or services to SEZ without payment of tax
• Refund on account of Inverted duty structure

Source: https://www.gst.gov.in/newsandupdates/read/402

MCA: AGM due date for the FY ended 31.03.2020 has been extended till 31.12.2020 for all Companies

 

Background:-

In terms of Sub-section (1) of Section 96 of the Companies Act, 2013 (the Act) provides inter-alia, that every company, other than a One Person Company, shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting (AGM) and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one AGM of a company and that of the next and WHEREAS, the first proviso to sub-section (1) of Section 96 of the Act provides that in case of the first AGM, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.

WHEREAS, the third proviso to Section 96(1) of the Act provides that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months. WHEREAS, various representations have been received from the companies, Industry bodies and Professional Institutes pointing out that several companies are finding it difficult to hold their AGM for the financial year ended on 31.03.2020 due to the difficulties faced in view of the Covid-19 Pandemic.

Order/Extension:-

MCA vide Order No. ROC/P/Sec 96/2020/414 dated September 08, 2020, have been considered and the undersigned is of the considered opinion that due to such unprecedented special reasons, the time within which the AGM for the financial year ended on 31.03.2020 is required to be held as per provisions of sub-section (1) of Section 96 ought to be extended in terms of the third proviso to Section 96(1).

Therefore, in terms of the power vested with the undersigned under the third proviso to sub-Section (1) of Section 96 of the Act, extends the time to hold the AGM, other than the first AGM, for the financial year ended on 31.03.2020 for companies within the jurisdiction of this office, which are unable to hold their AGM for such period within the due date of holding the AGM by a period of three months from the due date by which the AGM ought to have been held in accordance with the provisions of sub-section (1) of Section 96 of the Act, without requiring the companies to file applications for seeking such extension by filing the prescribed Form GNL-1.

Explanation: It is hereby clarified that the extension granted under this Order shall also cover all the pending applications filed in Form No. GNL-1 for the extension of AGM for the financial year ended on 31.03.2020, which are yet to be approved. Where the approval for the extension of AGM up to 3 months from the due date of the AGM shall be deemed to have been granted by the undersigned without any further action on the part of the company

GSTN: New functionalities made available for TCS and Composition taxpayers

 1. Provision to make amendment, multiple times, in Table 4 of Form GSTR-8

• Earlier, if no action was taken on TCS details, auto-populated in TDS/TCS credit form, by the supplier or if the same were rejected by them in the said form, the TCS (e-commerce operators) could amend the details only once.
• Based on requests received from stakeholders, the restriction of amending the transaction details only once, in the table 4 (i.e. amendment table) of Form GSTR-8, has now been removed.
• Thus, details of table 4 (i.e. amendment table) of Form GSTR-8, can now be amended multiple times, by e-commerce operators liable to collect tax at source under section 52, while filing their Form GSTR-8.

2. TCS facility extended to composition taxpayers

• The taxpayers under composition scheme, who are permitted to make supplies through E-Commerce Operators, e.g. Restaurant Services, will now be able to view and take necessary actions in their TDS/TCS credit received form.
• E-commerce operators would now be able to add GSTIN of such composition suppliers, in their Form GSTR-8 and file the Form.
• The amount of tax collected at source, reported by E-Commerce Operators in their Form GSTR-8, will now be populated to ‘TDS /TCS credit received’ form of respective composition taxpayers.
• The amount so reported by e-commerce operators will now be available to respective composition taxpayers, for accepting or rejecting the same, in their ‘TDS and TCS credit received’ form.
  • For accepted transactions, the amount would be credited to cash ledger of composition taxpayers, after successful filing of ‘TDS/ TCS Credit received’ form.
  • For rejected transactions, the amount would be shown to e-commerce operators for correction.

Source: https://www.gst.gov.in/newsandupdates/read/397

GSTR 2B Advisory: आप सभी को पता होना चाहिए *

*GSTR 2B Advisory: All you need to Know*

1. CBIC has come up with an *advisory module* of admissible Input Tax Credit at the hands of Taxpayer based on details uploaded by the supplier in their respective GST Returns.

2. Data in GSTR 2B will flow from following types of returns filed by Supplier:

A) *GSTR 1* (Statement of         Outward supply by regular taxpayer), 

B) *GSTR 5* (Registered Non Resident) and

C) *GSTR 6* (Input Service Distrubutor)

3. GSTR 2B shall be a static document i.e the value in GSTR 2B generated will not change once populated, which shall be generated on monthly basis irrespective of whether supplier is filing returns on monthly or quarterly basis.

4. GSTR 2B will be generated on 12th of every month which shall capture data reported by respective suppliers during the period12th of previous month till 11th of current month. Eg. July 20 GSTR 2B will shall generate on 12th August,20 shall capture data reported by respective supplier during the period from 00.00 hrs 12th July,20 to 23:59 hrs of 11th August,20

5. GSTR 2B shall capture following Data reported by respective supplier:

A) ITC from registered supplier's (other than RCM)

B) ITC from input service distributor

C) ITC from registered supplier's under RCM

D) ITC on Import of Goods

E) Credit Notes and Amendments in Invoices 

6. The module is on trial basis and going forward it may replace GSTR 2A for the purpose of calculation of ITC under Rule 36(4) because of following limitations:

A) GSTR 2A is a dynamic documents and therefore ITC of recipient cannot be locked for a particular month.

B) GSTR 2A does not bifurcate ITC between eligible and not eligible category which this module does.

C) GSTR 2A does not analyse and populate ITC blocked due to place of supply or time barred

D) GSTR 2A does not lists the ITC reversal in the manner GSTR 2B does.

7. Details of GSTR 2B shall be available online or through offline utility, which should be reconciled with the ITC availed as per books.

Conclusion: 

GSTR 2B is nothing but a new version of GSTR 2A which is static and represents the data on monthly basis. As of now Rule 36(4) is linked to GSTR 2A but we can assume that after a while this can be amended to be linked to GSTR 2B considering the data analytics auto populated in GSTR 2B which is more reader friendly as compared to GSTR 2A

CA Amresh Vashisht

Meerut