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Income Tax Department enabled the Form 10IE for AY 2024-25 for filing on the income tax e-filing portal

editor — Sat, 06 Apr 2024 09:56:22 +0000

The Income Tax Department has enabled Form 10IE for AY 2024-25 for filing on the income tax e-filing portal.

Please note: This Form 10IE is applicable to those who opt for the old Tax regime for A.Y .2024-25 as the new Tax regime is the default Tax regime.

Source #Income Tax Portal

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Audit wing of SGST Authority shall keep all proceedings in abeyance if the subject matter is pending before the CGST Authority

editor — Thu, 04 Apr 2024 10:57:29 +0000

The Audit division of the State Goods and Services Tax (SGST) Authority is mandated to suspend all actions if a matter is pending before the Central Goods and Services Tax (CGST) Authority, according to a ruling by the Calcutta High Court in the case of Mahabir Prasad Kedia v. Assistant Commissioner of State Tax [MAT No. 2388 of 2023 dated January 9, 2024].

Facts:

Mr. Mahabir Prasad Kedia, the Appellant, received an audit memo highlighting several discrepancies.
Upon receiving the audit notice, the Appellant informed the SGST Authority about a show cause notice (SCN) issued by the anti-evasion wing of the CGST Department on March 28, 2023, addressing the same issues for the financial years 2017-2018 to 2021-2022.
The Appellant responded to the Impugned SCN on May 04, 2023, and the matter was pending adjudication.
Despite the Appellant's submission, the audit wing of the SGST Authority overlooked it and proceeded with the matter.
The subject was pending adjudication by the CGST Authority, to whom the Appellant had submitted a reply on May 02, 2023.

Held:

The Calcutta High Court ruled that the SGST Authority's audit division should suspend proceedings concerning the discrepancy noted, as the matter was under consideration by the CGST Authority.
Following this decision, the SGST Authority issued an SCN on December 29, 2023, clarifying that the audit wing should not proceed with the matter.
Consequently, the appeal, along with related applications and writ petitions, was disposed of.
The SGST Authority was directed to halt all proceedings regarding the noted discrepancy, including the show cause notice issued on December 29, 2023, and adhere to the adjudication order from the CGST Authority regarding the Impugned SCN.

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Revenue Department is not empowered to seize Cash under GST

editor — Sat, 30 Mar 2024 10:09:45 +0000

The Delhi High Court, in the matter of Jagdish Bansal v. Union of India [W.P. (C) No. 16677 of 2023 dated February 26, 2024], granted relief to the petitioner by allowing the writ petition. The court instructed the Revenue Department to return the seized cash along with interest. The judgment emphasized that the Revenue Department lacks authority to seize cash under the applicable GST laws.

Facts of the case:

Search and seizure procedures were conducted at the premises of Jagdish Bansal, resulting in the confiscation of cash by the Revenue Department.

Displeased by this action, Jagdish Bansal filed a writ petition in the High Court, challenging the lawfulness of the cash seizure.

Issue:

The central issue at hand was whether the Revenue Department possessed the legal authority to seize cash under the GST framework.

Held:

In its ruling on W.P. (C) NO. 16677 OF 2023, the Delhi High Court made the following determinations:

Referencing the decision of the Delhi High Court in K.M Food Infrastructure Pvt Ltd Through Its Director Mukesh Kapoor Vs Director General DGGI Headquarters [W.P. (C) 328/2024 dated February 13, 2024], the court construed Section 67 of the Central Goods and Services Tax Act, 2017.
It observed that cash does not fall under the definition of goods but rather under the definition of money as outlined in Section 2(75) of the CGST Act.
The court reiterated that cash cannot be categorized as goods and therefore cannot be subject to seizure.
It concluded that there was no valid reason for the Revenue Department to retain the seized cash.
Consequently, the court deemed the impugned order as null and directed the Revenue Department to return the seized cash along with interest.

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CBIC Declares March 29-31, 2024 as Working Days for All Customs Field Formations

editor — Fri, 29 Mar 2024 07:06:36 +0000

The Central Board of Indirect Taxes and Customs (CBIC) has announced that March 29th, 30th, and 31st, 2024 will be considered as working days for all Customs field formations. This decision is communicated through a letter dated March 28, 2024, with reference number F.No.401/118/2016-Cus.III (Pt.).

All Customs field offices are required to remain operational during these days, and officers and staff are expected to report for duty as usual. It is requested that this information be disseminated among all personnel for compliance.

The directive has been issued with the approval of the relevant authority.

The full letter can be accessed at: https://www.nyca.in/wp-content/uploads/2024/03/Letter_Customs_Working_Day_280324.pdf

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Interim Budget Updates to Goods and Services Tax

editor — Sat, 16 Mar 2024 12:18:54 +0000

The announcement of GST Amendments in the Interim Budget brings forth significant changes in the taxation landscape, marking a pivotal moment for both businesses and individuals. As Budget Day approaches each year, the anticipation surrounding potential benefits and programs heightens among the populace. This year, in light of the upcoming elections, the Interim Budget for 2024 has replaced the traditional full budget, with the Finance Minister, Smt. Nirmala Sitharaman, unveiling a slew of schemes and welfare programs aimed at pleasing the masses. Dubbed the “Developed India Budget 2024,” the central focus of this budget aims to propel India towards economic advancement.

Key Changes in GST as per Interim Budget:

Key Considerations:

In Summary:

The GST Amendments in the Interim Budget signify a concerted effort by the government to streamline compliance and extend support to targeted industries. Emphasizing the adoption of digital solutions, these measures aim to instill stability and foster investment amid uncertain times, ultimately contributing to a resilient economy that benefits all stakeholders. While these changes are temporary, further developments are anticipated in the upcoming full budget, with the current focus geared towards bolstering businesses and driving growth.

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Proposed Amendments to MSME Development Act to Facilitate Prompt Payments to Small Businesses

editor — Thu, 14 Mar 2024 07:24:54 +0000

The government is considering revisions to the MSME Development Act, 2006, to ensure timely payments to micro, small, and medium enterprises (MSMEs).

Currently, if a payment is delayed by more than 45 days after the receipt of goods or services from an MSME supplier, the buyer is required to pay compound interest at thrice the notified bank rate. Each state has a facilitation council to settle disputes and issue directives for payment, but these measures often fall short, leading to lengthy disputes and defaults. An estimated Rs 10.7 lakh crore is believed to be tied up in such dues.

In response, the Ministry of MSME is contemplating reforms to simplify procedures and expedite payments. They are also exploring ways to ensure the enforcement of awards issued by the facilitation council.

Additionally, the Ministry is considering incorporating mediation as an alternative dispute resolution method, following the passage of the Mediation Act, 2023. While most contracts between MSMEs and buyers include arbitration clauses, this process can be time-consuming.

These proposals are currently under discussion, and the Ministry plans to engage with stakeholders before finalizing them. The overarching goal is to lay the groundwork for these reforms to be implemented by the next government.

Addressing payment delays is crucial for MSMEs to enhance productivity and efficiency. In line with this, amendments to the Income Tax Act, 1961, have been introduced, stipulating that if a company fails to pay an MSME within 45 days, the overdue amount will be added to its profits, subjecting it to corporate tax. This provision will come into effect from April 1 of this year.

Source: https://www.businesstoday.in/latest/economy/story/centre-considering-amendments-to-msme-development-act-to-ensure-timely-payments-to-small-businesses-421130-2024-03-12

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Timely Payment Rule for MSMEs to Begin from April 1: Finance Ministry Officials

editor — Thu, 07 Mar 2024 05:07:54 +0000

Starting from the fiscal year 2025, the government will introduce a regulation mandating that payments to micro, small, and medium enterprises (MSMEs) must be settled within a 45-day period. Failure to comply will result in companies facing taxation on the outstanding amount, as revealed by senior officials from the finance ministry.

The possibility of altering this rule is limited to the Union Budget session in July, according to two high-ranking finance ministry officials. They clarified that the government has no intentions of postponing the rule by one year, despite requests from traders.

Quoting a senior finance ministry official, Moneycontrol reported, “As per the Finance Act 2023, companies are obligated to clear payments to the MSME sector within 45 days, starting from April 1, 2024, or else they forfeit the right to claim deductions on it.”

Introduced through the Finance Act, 2023, Section 43B (h) in the Income Tax Act ensures timely payments to MSMEs, thereby maintaining uninterrupted cash flow. Companies failing to adhere to the 45-day payment deadline will have the overdue amount added to their profit, subjecting them to taxation.

The amendment has received parliamentary approval. Essentially, it stipulates that deductions for tax, duty, cess, or fees payable to the government can only be claimed upon actual payment, irrespective of when the liability was incurred.

“The provision aims to encourage businesses to fulfill their tax obligations promptly, rather than delaying payments indefinitely for tax benefits,” stated the second finance ministry official to Moneycontrol.

It was emphasized that any changes to the rule can only be made during the subsequent budget session in July and require parliamentary approval. Therefore, no alterations are possible before then.

The Confederation of All India Traders (CAIT) had requested a one-year postponement of the rule due to ambiguity. CAIT secretary general Praveen Khandelwal stressed the importance of raising awareness among traders nationwide regarding this provision.

Delayed payments from public and private entities pose significant challenges for MSMEs, disrupting their cash flow and operational capabilities, particularly given their narrow profit margins.

The implementation of this new rule is seen as a positive step towards addressing these challenges. Finance Minister Nirmala Sitharaman has repeatedly highlighted the issue, urging businesses to ensure timely payments, especially in the aftermath of the pandemic.

While some industry experts anticipate initial challenges, they recognize the importance of enforcing the new rule to ensure timely payments to MSMEs. The Confederation of Indian Industry MSME Council Co-chairman expressed support for the rule, emphasizing its stringent enforcement.

Additionally, the government has introduced measures like the Trade Receivables Discounting System (TReDS) to facilitate compliance with payment terms. TReDS enables MSMEs to receive prompt payments by facilitating the discounting of their invoices through an auction mechanism.

Source: https://www.moneycontrol.com/news/business/economy/timely-payment-to-msmes-rule-to-be-enforced-from-april-1-finmin-officials-12404621.html/amp

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FM Sitharaman urges GST officials to provide clarity on classification-related issues

editor — Tue, 05 Mar 2024 11:04:28 +0000

Finance Minister Nirmala Sitharaman has called upon goods and services tax (GST) officials to address classification-related concerns promptly. Speaking at the National Conference of Enforcement Chiefs of the State and Central GST Formations, Sitharaman emphasized the importance of engaging with stakeholders to understand their issues, improve compliance, streamline processes, and enhance transparency and efficiency within the tax system.

GST rates are determined based on the classification of goods and services using harmonized system of nomenclature (HSN) codes, often leading to disputes and litigation. These issues are typically resolved through various judicial and quasi-judicial forums, including GST commissioners and courts. The Central Board of Indirect Taxes and Customs (CBIC) issues circulars and FAQs to clarify classification issues based on GST Council recommendations.

Sitharaman also stressed the use of technology to plug loopholes and provide better taxpayer services, advocating for the sharing of best practices and seamless coordination across states. The conference featured presentations on various topics, including a crackdown on fake registrations and bogus billing, resulting in the detection of significant tax evasion.

In related news, the Income-tax Department has urged taxpayers to file updated returns for the assessment year 2021-22 by March 31, using the annual information statement (AIS) to address mismatches between filed returns and third-party data. Non-filers are also encouraged to submit updated returns to ensure compliance.

Source: https://www.moneycontrol.com/news/business/economy/fm-calls-for-clarity-on-classification-related-issues-under-gst-at-the-earliest-12400741.html

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Government Procurement: An Overview of GeM

editor — Sat, 02 Mar 2024 10:31:59 +0000

In the realm of business, particularly for Micro, Small, and Medium Enterprises (MSMEs), manufacturers, and service providers, accessing government procurement contracts often appears as a secure avenue compared to navigating the uncertainties of the open market. With this premise in mind, the Government E-Marketplace, commonly referred to as GeM, emerged as a significant initiative. GeM serves as a platform facilitating transactions between sellers and various government departments, offering benefits such as fair pricing for goods and services and streamlining procurement processes. Positioned as the National Procurement Portal of India, GeM embodies a pivotal step towards realizing the Digital India vision.

How GeM Operates:

GeM operates as a centralized platform connecting sellers with government entities seeking to procure goods and services. By registering on GeM, businesses gain direct access to government procurement opportunities, significantly reducing the need for extensive marketing efforts. Moreover, the platform minimizes bureaucratic hurdles, as sellers are promptly contacted upon registration, bypassing lengthy tender processes. Additionally, GeM allows for flexible pricing adjustments based on market conditions, ensuring competitiveness without compromising fair pricing practices. Furthermore, registered sellers benefit from timely payments and stay informed about government procurement requirements and plans.

Benefits of Registering on GeM:

Registering on GeM offers numerous advantages, including:

Alternative Portals for Government Procurement:

Apart from GeM, businesses can utilize the Central Public Procurement Portal (e-procure) for engaging with Central Government Organizations. Unlike GeM, e-procure operates on the basis of tender processes, serving as a platform for posting tender enquiries, corrections, and contract awards. While both platforms facilitate government procurement, GeM distinguishes itself by its non-tender-based approach, offering an alternative avenue for businesses seeking to engage with government entities.

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