RBI to infuse Rs 3.74 lakh cr liquidity into financial system

Delhi : Reserve Bank Governor Shaktikanta Das on Friday said about Rs 3.74 lakh crore liquidity on aggregate basis will be infused into the financial system to deal with the COVID-19 pandemic. Financial markets are under stress and require steps by the central bank for market stability and revival of economic growth, he said while announcing the decisions taken by the Monetary Policy Committee (MPC) here. As part of liquidity infusion measures, he said, the Reserve Bank of India (RBI) will undertake repo operation of up to Rs 1 lakh crore to infuse liquidity into the market. Further, he announced reduction in cash reserve ratio (CRR) of all banks by 100 bps to 3 per cent from 4 per cent, with effect from March 28 for one year.

RBI Live: Shaktikanta Das allows to pause loan EMIs for 3 months; announces 75 bps emergency repo rate cut

Delhi : Shaktikanta Das has announced 75 basis points cut in repo rate, effectively taking the repo rate to 4.4% from the earlier 5.15%. Along with this, RBI has allowed banks and financial institutions to put a moratorium on term loans. Shaktikanta Das added that the MPC refrained from projecting inflation and growth this time as the situation was too volatile. The RBI has also announced a comprehensive package, including measures to expand liquidity, steps to reinforce monetary transmission, efforts to ease financial stress by relaxing repayment and endeavour to improve the functioning of the market.

Vivad se Vishwas e-filing facility: Race against time for tax dispute resolution

Delhi : The government’s newly introduced e-filing facility to end direct tax disputes under Vivad se Vishwas scheme may not do much help to the taxpayers now. With only 10 days left to reach the deadline of Vivad se Vishwas scheme and amid coronavirus scare keeping people away from offices, the success of the dispute resolution scheme may differ than anticipated. While the overview and the purpose of the scheme were already known to the taxpayers, the exact rules and related forms have reached them only yesterday. Even if the corporations find it worthy to file the dispute resolution to end the long-pending litigation, the new set of rules may make it inconvenient for them to get through this while working from remote locations. “Government has notified rules and forms just 10 days before the deadline for payment of tax under the Vivad se Vishwas scheme and now the portal has recently initiated the acceptance of declarations under the scheme but seems all will go in vain as Covid-19 is in its full swing and the complete lockdown has been requested by Hon’ble prime minister in his speech,” Rajat Mohan, Senior Partner, AMRG & Associates, told Financial Express Online. Corporates are already closing their offices and have asked employees to work from home in such circumstances collating data on tax disputes and in-house deliberation on the same is impossible forcing the companies to opt out of the scheme, he added

Coronavirus: Sebi allows listed companies to file Q4 results by June 30

Delhi : The Securities and Exchange Board of India (Sebi) on Thursday relaxed several compliance norms and allowed listed companies to file their quarterly and annual financial results by June 30, 2020. According to the market regulator, developments arising due to the coronavirus spread warranted the need for temporary easing in compliance requirements for the listed entities. Market participants have welcomed the move. “It’s possible that the next step by Sebi will be to nudge companies into disclosing the impact of coronavirus on their business, revenues, etc, to give investors more clarity on the broader picture, even if results get held up,” said Shruti Rajan, partner, Cyril Amarchand Mangaldas. Sebi has decided to grant relaxations from compliance stipulations specified under the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015, (LODR) to listed entities. Currently under Regulation 33 relating to financial results, listed entities need to file its quarterly results 45 days from the end of the quarter and 60 days from the end of fiscal for annual financial results. Even the US Securities and Exchange Commission gave similar relaxations earlier this month. “But that is on a conditional, targeted basis and requires firms to file reports with it. Sebi’s move is broader because it doesn’t seek an explanation on business continuity issues and is applicable across all listed companies, without exception,” added Rajan.

Govt. notifies Direct Tax Vivad se Vishwas Rules & FormsNotification No.18/2020, dated 18-03-2020

The Central Government has notified the Direct Tax Vivad se Vishwas Rules, 2020 wherein the Forms for making declaration and undertaking, certificate issued by designated authority, intimation of payment and order by designated authority have been notified.Forms shall be furnished electronically under digital signature, if the return of income is required to be furnished under digital signature and through electronic verification code in other cases. The rules also prescribes manners for computing disputed tax in cases where:a) Loss or unabsorbed depreciation is reduced;b) Minimum Alternate Tax (MAT) credit is reduced.

CBDT notifies ‘designated authority’ for the purpose of ‘Direct Tax Vivad se Vishwas Act’Notification 4707, dated 18-03-2020

The Central Board of Direct Taxes (CBDT) has notified jurisdictional Commissioners of Income-tax who shall perform the function of ‘’designated authorities’ under the Direct Tax Vivad Se Vishwas Act, 2020.The Income-tax Dept. has also enabled the e-filing facility of forms to opt for Direct Tax Vivad se Vishwas Scheme on its e-filing portal, i.e., http://www.incometaxindiaefiling.gov.in

Auditors feel companies may have to state coronavirus impact in accounts

 Maharashtra : Financial statements for Indian and multinational companies may have to reflect the impact of the Coronavirus-related shutdown and disruptions if any on business operations, auditors have said. Practice alerts issued by audit firms to clients and to audit teams internally have so far focused on the impact on financial statements for the year ended December 31, 2019 but auditors say that the same rules will apply to firms for the full year ending March 2020 and for subsequent quarters. ET spoke to assurance and audit heads of India’s largest firms who among them audit about 70% of top 1,000 listed companies and almost 80% of biggest multinationals. “While this will have an impact in the next 1 or 2 quarters, companies with strong balance sheets will be able to withstand this. The problem, however, is that no one knows how long this pandemic and its resultant impact on business will last. Auditors have to make judicious calls,” said Sharmila Karve, ex-audit head, PwC. Auditors say that there are two significant issues that may crop up in case of major damage to business activities due to the Coronavirus and they include impairment resulting from financial losses, breach in bank covenants etc and the impact on the company as a going concern.

Tax officials ready with rules, forms to implement Vivad Se Vishwas scheme

Delhi : Tax officials are ready with necessary rules and forms under the Vivad Se Vishwas Scheme to settle direct tax disputes, and will issue them soon after the law gets presidential assent, two officials told ET. The Central Board of Direct Taxes has also directed its officers to be prepared with tax calculations for taxpayers to ensure speedy execution of the scheme, given the tight deadline of March 31, they said. It is also ready with the online system that will be used by taxpayers to avail the scheme. Parliament had on Friday approved the Direct Tax Vivad se Vishwas Bill, 2020, which would give taxpayers an opportunity to settle their disputes by paying due taxes with complete waiver of interest and penalty until March 31. It would also allow dispute settlement with some additional payment till July 31. “The forms and rules are ready,” a senior official told ET on condition of anonymity. “Once the bill is enacted, we will be able to issue them. Even the utility is also ready from the system side, so online declarations can be filed immediately after the bill is enacted.”

Compliance Calendar for the month of March’2020

7th March 2020- TDS/TCS payment for the month of Feb ’2019
11th March 2020- GSTR 1 Filing of returns by registered person with aggregate turnover more than 1.50 crores. for Feb ’ 2019.
15th March 2020- Due date for advance tax for FY 2019-20 (4th Instalment)
15th March 2020- Due date for payment of whole amount of advance tax in respect of assessment year 2020-21 for assessee covered under presumptive scheme of Section 44AD/ 44ADA
15th March 2020- Monthly PF payment for Feb ’2019
15th March 2020- ESIC payment for the month of Feb ’2019
20th March 2020 – GST monthly return (GSTR-3B) for the month of Feb’2019 for taxpayers with an annual gross turnover of Rs. 5 Cr or more (in the previous year)
22th March 2020- GST monthly return (GSTR-3B) for the month of Feb’2019 for taxpayers with an annual gross turnover below Rs. 5 Cr or more (in the previous year)
25th March 2020- Due date for filing monthly return of PF
30th March 2020- Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA (TDS on immovable property) and 194IB (TDS on rent) for the month of Feb , 2020.
31th March 2020- Due date for filing of GSTR-9, 9A and 9C Annual return for FY 18-19
31th March 2020- Due date for filling belated return for AY 2019-20
31th March 2020- Linking of Adhar with Pan
31th March 2020- PT where annual liability above or Rs-50000-payment due for salary

Govt may halve dividend income tax rate for big local investors

Maharashtra : The government may consider effectively halving the tax rate on dividend income for individuals in the highest tax bracket, two people familiar with the development said, likely boosting stocks that are facing a rout globally. The government is looking to tweak the current regulations to bring down the tax on dividends to about 20% from up to 43% for Indian individual investors. The government may offer the concession by offering a flat 20% tax on dividend income. After a change in the budget, dividend income is now taxable up to 43% in the hands of the recipient from April this year. Foreign companies, on the other hand, would have to pay anywhere around 5% to 15% tax on dividends depending on the tax treaty that India has with the country from where the investment is routed.

Company Incorporation SPICe +

As a part of Government of India’s Ease of Doing Business (EODB) initiatives, the Ministry of Corporate Affairs has notified and deployed a new Web Form christened ‘SPICe+’ (pronounced ‘SPICe Plus’) replacing the old SPICe form. SPICe+ has come into force from 23.02.2020. 
SPICe+ is an integrated Web Form which would offer ten services by 3 Central Government Ministries & Departments (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and One State Government (Maharashtra), thereby saving as many procedures, time and cost for Starting a Business in India and has been made applicable for all new company incorporations w.e.f. 23rd February 2020.

Companies can’t evade tax on profit from overseas office after ITAT ruling

Maharashtra : For years, many companies, including some public sector banks, have interpreted India’s treaty provisions with other countries in a way to escape tax on profits from foreign offices. A ruling this month by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) will put an end to this. The practice continued even after 2008 when the tax law was amended to clarify that India may tax earnings of overseas branches. Several companies still avoided tax by citing earlier court decisions that seemed to favour their interpretation. “This will change. The recent decision by the ITAT, Mumbai may impact the valuation of some of the nationalised banks which are undergoing merger. Till now, these banks have been disputing the position in the law and not paying tax on earnings of overseas branches,” said senior chartered accountant Dilip Lakhani. For instance, an entity with Rs 100 crore profits from Indian operations and Rs 20 crore from its Dubai branches paid tax in India only on Rs 100 crore (and not Rs 120 crore) on the back of the argument that since its foreign branches create ‘permanent establishments’ in UAE and the income from the same is liable to tax in the foreign country, the income from overseas offices should be exempt in India.

GST officials bust fake invoicing racket

Delhi : GST officers in Delhi have busted a racket of fake invoicing worth Rs 7,896 crore using a network of 23 shell companies. The officers of Anti Evasion wing of Central Tax, Delhi West Commissionerate have busted a major racket of fake invoicing of Rs 7,896 crore involving fraudulent Input Tax Credit (ITC) of Rs 1,709 crore, using a network of 23 shell companies, Finance Ministry said in a statement. These companies procured and generated invoices without the actual supply of goods and availed as well as passed on input tax credit. Two persons were arrested on February 29, and were remanded to 14 days judicial custody. The accused persons were evading tax by creating several dummy firms for the purpose of passing on input tax credit by generating fake invoices. “They also used banking transactions to make input tax credit appear genuine. These firms issued the fake invoices to buyers, who availed fraudulent input tax credit without actually receiving any goods and defrauded the exchequer by way of availing ineligible input tax credit towards GST liability,” the statement added. PTI JD DRR DRR

LLP Settlement Scheme, 2020

LLP settlement Scheme, 2020 launched ; Shall allow a One-time condonation of delay in filing statutorily required documents with the Registrar

Scheme shall come into force on the 16th March, 2020 and shall remain in force up to 13th June, 2020

Applicable for LLP Form 3, 4, 8 and 11.


GST receipts get a compliance boost as efforts to increase collections pay off

Delhi : Goods and Services Tax (GST) collections, in aggregate, are still way below the targets set by the authorities, but their efforts to improve compliance, check excessive use of input tax credits and frustrate frauds like fake invoicing are paying off, albeit gradually. Since the Centre cut its own budget estimate for GST by over 8% to Rs 6.1 lakh crore, it would likely meet the revised estimate, even with the current pace of collections; but in order to be able to meet the gross collections target, which includes fully compensating the states for any revenue shortfall from the assured annual-growth level of 14%, the March mop-up requires to be an impossibly high Rs 1.4 lakh crore. The compliance rate of monthly returns filing by the registered taxpayers rose to over 80% in February (for January transactions), from just 59% in May 2019. Since the filing of the GSTR 3B, the monthly return, involves discharge of the self-assessed tax liability, the increase in filing of these returns has pushed up collections, especially in the four months to February.

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