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UNION BUDGET 2019
Blog
Kavit Vijay

Union Budget 2019 – Income Tax amendments applicable from 1 September 2019

The Indian Parliament has passed the Finance Act (No. 2), 2019 (‘2019 Finance Act’) during July 2019 and has received the assent of the President of India on 1 August 2019. Various provisions part of the 2019 Finance Act are applicable retrospectively from 1 April 2019. However, certain provisions pertaining to procedural aspects and compliances like Tax Deducted at Source (‘TDS’) were proposed to be made effective from 1 September 2019. Let us now look at some of the amendments effective from 1 September 2019. Table of Content1. Section 194IA – TDS on incidental payments towards property purchases2. Section 194N

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Impact of GST on Post sales Discount
Blog
Kapil Mittal

IGST Refund to exported| Mismatch between GSTR-1 & GSTR-3B

“Export” is considered as a major contributor to any economy and therefore, government makes all possible efforts to increase it. For this purpose, exports are kept free from any kind of taxes including Goods and Service Tax. To substantiate such principle, export of goods or services or both has been classified as “Zero Rated Supply” under Integrated Goods and Service Tax, 2017 (“IGST Act”) and accordingly, such supply is not liable to Goods and Service Tax (“GST”). To claim benefit of such “zero rated supply”, GST law provides for either of the following options: Exporter may export goods without payment

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Measures to Boost Economy
Blog
Kavit Vijay

Measures to Boost Economy | Announcements by Finance Ministry

Announcements made by the Hon’ble Finance Minister during the Press Conference held on 13 August 2019 The Indian Parliament had passed the Finance Act (No. 2), 2019 during July 2019. Being the first Budget presented by the Government after a sweeping majority in the recent elections to the Lower House of the Parliament, the focus was on stabilising the economy and undertaking structural macro-economic reforms to inter alia derive benefits from the demonetisation exercise conducted in November 2016 and the introduction of Goods and Services Tax in July 2017.  The budget was also focussed on tax optimisation, increasing the tax

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GST on monthly subscription received by RWA
Blog
Kapil Mittal

GST on monthly subscription received by RWA

CBIC clarified that monthly contribution received by RWA upto INR 7,500/- exempted  from GST, RWA is entitled to take ITC on Capital Goods, Input and input services Central Board of Indirect Taxes & Customs (“CBIC” or “Department”) received various representations regarding ambiguity in complying with provisions of Goods and Service Tax (“GST”) on monthly subscription received by Resident Welfare Association (“RWA”) from its members. Accordingly, CBIC issued circular No. 109/28/2019-GST dated 22nd July, 2019 to provide clarification on following issues related to monthly subscription being collected by RWA. Table of Content1. Are the maintenance charges paid by residents to the RWA

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GST on goods sent outside India under sale or approval basis
Blog
Sachin Jindal

GST on goods sent outside India under sale or approval basis

CBIC clarifies on taxability of goods sent/ taken out of India for exhibition or on consignment basis for export promotion Indian exporters engage in several business promotion activities outside India in order to expand their outreach globally and increase volumes. Certain activities may require physically showcasing the goods to the potential buyers in order to strike deals and finalise sale orders. In this connection, the goods would have to be taken outside India for demonstration to the potential buyers either directly in exhibitions, trade fairs, business congregations, industry meets etc. or indirectly through distributors/ agents on consignment basis. The goods

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ITeS and backend support service, Intermediary or not
Blog
Kapil Mittal

ITeS and backend support service, Intermediary or not

Supplier of ITes services will not be covered under the provision of Intermediary and quality for export of services however provide of certain backend support services to foreign customer will fall under the definition of intermediary and not qualified for export benefits under GST The Indian ITeS industry generates significant foreign exchange for India and is one of the emerging hubs of the world.  Nevertheless, the Indian ITeS industry has been facing significant competition from its Asian counterparts like Philippines, Vietnam etc.  In this context, the Government of India has provided various export incentives to make Indian ITeS services exports

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Insolvency and Bankruptcy Code, 2016 is the bankruptcy law
Blog
Kavit Vijay

Insolvency and Bankruptcy Code, 2016 is the bankruptcy law

Insolvency and Bankruptcy Code, 2016 (“The Code”) is the bankruptcy law which contains provisions related to insolvency of companies, partnership firms and individuals. Ministry of Corporate affairs issued a press release dated 17th July, 2019 specifying that Union cabinet approved the proposal to introduce Insolvency and Bankruptcy Code (Amendment) Bill, 2019 (“The Bill”) in parliament on 17th July, 2019 itself. The bill will propose 8 amendments in the code. Major objective of the bill is to fill the critical gaps in the corporate insolvency resolution framework with simultaneously maximizing value from Corporate Insolvency Resolution Process (“CIRP”). CIRP section of the

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Impact of GST on Post sales Discount
Blog
Sachin Jindal

Impact of GST on Post sales Discount

CBIC clarifies the if post sales discount has been given in pursuant to contract at or before sale, GST would not be applicable on such discount however if given discount require some action at dealer end, GST would be applicable on such discounts as separate supply. Applicability and impact of Goods and Services Tax (‘GST’) on sale promotion schemes has always been a complex and litigious issue. The Central Board of Indirect Taxes and Customs (‘CBIC’) had earlier issued Circular No. 92/11/2019-GST dated 7 March 2019 providing clarifications on sales promotion schemes under GST. Read more about GST impact on

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GST Treatment on Diamond imported to export back for cutting and polishing
Blog
Kapil Mittal

GST Treatment on Diamond imported to export back for cutting and polishing

CBIC clarifies on the place of supply in relation in case of services by ports and place of supply in case of supply of various services on unpolished diamonds which are temporarily imported in to India for re export. The Place of Supply (‘POS’) determines the incidence of taxation under the GST law. As GST is a destination based taxation regime, determination of POS is critical to the taxability of a given transaction. The determination of POS in the context of international trade assumes significance as the transaction could be subject to tax only if the POS is within the

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GST on additional/ penal interest under EMI schemes
Blog
Sachin Jindal

GST on additional/ penal interest under EMI schemes

CBIC clarifies on the applicability of GST on additional/ penal interest under EMI schemes An Equated Monthly Instalment (‘EMI’) is a fixed amount paid by the borrower to the lender on a specified date every month. The EMI includes month principal and interest components, which aggregate to an equal amount of outflow every month.  Over a specified period, the loan is fully paid off along with interest. In cases the EMI payment schedule is not complied, there could be levy of additional interest/ penal interest to compensate for the delay.  Clarifications were sought if GST was also applicable on additional/

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