Insights

Vistra India Update 372

March 16 - March 31 2019

INCOME TAX

1.    Clarification on linking of PAN with Aadhaar

It has been reported in some sections of the media that those PANs which are not linked with Aadhaar number by 31.03.2019 may be invalidated. The matter has been considered by the Central Government and now the cut-off date for intimating the Aadhaar number and linking PAN with Aadhaar is 30.09.2019, unless specifically exempted. Notwithstanding the last date of intimating/linking of Aadhaar Number with PAN being 30.09.2019, it is also made clear that w.e.f. 01.04.2019, it is mandatory to quote and link Aadhaar number while filing the return of income, unless specifically exempted.

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2.    Mandatory to quote Aadhaar while filing the return of income

In order to give effect to judgement(s)/order(s) of Hon'ble Supreme Court, from 01.04.2019 onwards it has been decided by the Board that provision of clause (ii) of sub-section (1) of section 139AA of the Act would be implemented and it is mandatory to quote Aadhaar while filing the return of income unless specifically exempted as per any notification issued under sub-section (3) of section 139AA of the Act. Thus, returns being filed either electronically or manually cannot be filed without quoting the Aadhaar number.

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COMPANY LAW

3.    Companies (Incorporation) 3rd Amendment Rules, 2019

Ministry of Corporate Affairs (MCA) has amended Companies (Incorporation) Rules, 2014 to provide, AGILE (INC-35) - a new form for Incorporation of Companies which includes an application for registrations under following statutes also

  1. Registration under The Central Goods and Services Tax Act, 2017
  2. The Employees Provident Funds and Miscellaneous Provisions Act, 1952
  3. Employees State Insurance Act, 1948 

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4.    Companies (Indian Accounting Standards) First and Second Amendment Rules, 2019 

Ministry of Corporate Affairs (MCA) has notified the Companies Indian Accounting Standards (Ind AS) First and Second Amendment Rules, 2019, applicable effective from 1 April, 2019. The amendment inserts/ substitutes various paragraphs to amend various IND AS (Ind AS 1, 2, 7, 12, 16, 17, 19, 21, 23, 28, 32, 37, 38, 40, 41, 101, 103, 104, 107, 109, 111 etc) and introduces new ‘Ind AS 116 – Leases’ 

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RBI AND FEMA

5.    Amendment to the regulations governing Establishment of Branch Office (BO)/Liaison Office (LO)/Project Office (PO) or any other place of business in India by foreign entities

In an amendment to the regulations governing Establishment of Branch Office (BO)/Liaison Office (LO)/Project Office (PO) or any other place of business in India by foreign entities, RBI has done away with obtaining prior permission from them where the principal business of the applicant falls in the Defence, Telecom, Private Security and Information and Broadcasting sector if Government approval or license/permission by the concerned Ministry/ Regulator has already been granted. In the case of proposal for opening a PO relating to Defence sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/entered into an agreement with the Ministry of Defence or Service Headquarters or Defence Public Sector Undertakings. It is clarified that the term “permission” used in the Notification does not include general permission, if any, available under Foreign Direct Investment in the automatic route, in respect of the above four sectors.

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GOODS AND SERVICES TAX

6.    Clarifications on GST refund related issues 

The Board vide Circular No. 94/13/2019 – Central Board of Indirect Taxes and Customs, GST Policy Wing  has clarified certain issues on which the registered dealers had doubts. Following are few important areas which covers under this clarification.

  • Refund of accumulated ITC on account of inverted tax structure on reversal of ITC etc.
  • Re submission of refund application on issue of deficiency memo

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7.    Verification of applications for grant of new registration

The Board vide Circular No. 95/14/2019 – Central Tax has issued instruction to be followed by the field officer while issuing new registration certificates.

Recently the department has initiated the process of cancellation of registrations of those persons who have not discharged the tax liability or for non-compliances of various statutory provisions under GST.   Since the same persons are required to carry on the business they also need GST registration, hence they have started applying for new registration in order to avoid the payment of tax liability / penalties for the non-compliances as mentioned above.  These instances came to the notice of the department and hence the department has instructed the proper officers to be cautious while approving the registration certificate.

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8.    New manner of Utilizing Input Tax Credit (ITC)

The Board vide Notification No. 16/2019 – Central Tax has further amended Central Goods and Services Tax Rules, 2017.  Among other amendments new manner of utilization of ITC was prescribed.  A new rule 88A was introduced which explains the new method of adjustment of ITC.

a) ITC on IGST has to be first fully utilized towards IGST and balance towards CGST / SGST / UTGST.

b) For utilization of balance IGST credit towards CGST / SGST / UTGST, there is no order of set off as prescribed earlier.

c) Credit can be taken in any order as per convenience.

d) Set off ITC of CGST / SGST / UTGST can be utilized towards IGST, CGST, SGST or UTGST but only after fully exhausting the ITC of IGST.

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CUSTOMS

9.    Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 24/2019 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 21st of March 2019 respectively.  

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