Works to be done before 31st March 2018.

Works to be done before 31st March 2018.

As we all know that financial year 2017-18 is about end. However, 31st March is an important date for individuals and taxpayers in India as it is the deadline for completing all financial obligations. Here are the lists of some important work you must have to do before 31st March.

1. Linkage of Aadhaar with PAN: It must be noted that the return of income tax payer will not be processed if Aadhaar is not linked to PAN. However the deadline for linking of Aadhaar with mobile phones and bank account has been extended.
2. Filing of Pending Returns: 31st March, 2018 is the last date for filing Income tax return for AY 2016-17 and 2017-18. One must file the belated income tax return by the end of 31st March, 2018.
3. Calculation of GST Turnover: The total turnover in your Current year up to 31st March is to be calculated for the purpose of determining the aspects like applicability of GST Registration, Eligibility of opting Composition Scheme, and Applicability of Filing of specific returns.
4. Compulsory investment under PPF and Sukanya Samridhi Account: The minimum compulsory annual contribution to be made in PPF account and Sukanya Samridhi Account is Rs. 500. So you have to contribute at least Rs. 500 per financial year. The last date of this contribution is 31st March, 2018.
5. Investment Strategies to claim deductions: Various investments are allowed to claim exemptions and deductions along with benefit of opportunity to earn returns on such investments. Thus to avail maximum deductions, such investments are to be made before 31st march to include it in the previous year for the future prospect.
6. Calculation of Deductions: Certain Deductions are allowed to individual tax payers for Investment made in certain specific sectors in order to avail tax benefit. Such calculation shall help you to further diversify the Investments for maximum Deductions like u/s 80C, 80D, 80G etc.
7. Claim reimbursements in case of salaried employees: Salaried individuals are entitled to certain reimbursements on the basis of their salary structure such as medical reimbursements, Telephone, leave travel, house rent allowance etc. To claim such tax exemption, such persons need to submit the proof of such expenses to their employers.

ITC ON CAPITAL GOODS.

Capital Goods

Statuary definition- As per Section 2(19) of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term 'capital goods' means goods, the value of which is capitalized in the books of accounts of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.

In Simple we can say that :- Capital goods are assets such as buildings, machinery, equipment, vehicles and tools that an organization uses to produce goods or services.

Example- A freezer used in ice factory is termed as Capital Goods.

ITC Rules for Capital Goods under GST: RULE 43

We can easily analyse ITC rules through the chart given below-

1. No ITC on Capital Goods, if :-

• Purchased only for personal use
• Purchased only for supply of exempted goods.

2. ITC Available on Capital Goods if purchased for use in Normal course of business.

3. Proportionate ITC, if purchased Partly for Personal/Exempted and Partly for Normal sales. The credit of input tax shall be calculated in the following manner:

• ITC paid on purchase of Capital Goods shall be credited in Electronic Credit Ledger.
• Useful life of such Capital Goods shall be taken as 5yr. from the date of purchase.
• Now the whole amount of ITC credited in Electronic Credit Ledger shall be bifurcated over the useful life (5Yr.) of such Capital Goods. 

Calculations for common credit

-For exempted supplies
The amount of ITC attributable to exempt supplies out of common capital credit –



Remaining amount after deducting credit for exempt supplies will be allowed as ITC.

All the above calculations must be done separately for:

•  Central tax (CGST)

•  State Tax (SGST)

•  Union Territory Tax (UTGST)

•  Integrated Tax (IGST)

Capital Good which was earlier used or intended to be exclusively used for:

• Non- business purpose(Personal use) 

• Effecting exempt supplies

Subsequently used for Normal Sales

Input tax to be credited to electronic credit ledger = Input Tax – 5% of Input tax for every quarter or part thereof from date of invoice

Example- Mr. Ram purchased a Freezer for Personal use only for ₨ 100000/- including GST of Rs 18000/- as input tax on 01/07/2017. On 10/09/2018 he intended to use Freezer for both Personal use and Normal Sales. Calculate eligible Common Input Tax Credit.

Ans- The Eligible Common Input Tax Credit = Input Tax - 5% of input tax for every quarter or part thereof.

• Total no. of Quarter from 01/07/2017 to 10/09/2018 = 5Quarter.

        = 18000 - (5% of 18000) * 5Quarter.
        = 18,000 – 4,500
        = 13,500

Now, this is the common credit available to Mr. Ram. He will credit Rs 13,500 to Electronic Credit ledger.
Now he will calculate the ITC attributable to exempted supplies as per the formula used in Point 3.
Common credit for 1 month = 13,500÷60=225.

Reversal of Input Tax Credit

Following are the circumstances where proportionate ITC will be reversed i.e. added to output tax liability of the Registered Person:-

• Where a normal taxpayer opts to pay tax under composition scheme or goods/services supplied by him become exempt;

• In case of supply of capital goods or plant and machinery, on which input tax credit has been taken;

• Every registered person whose registration is cancelled.

Input tax credit involved in the remaining useful life shall be computed on pro-rata basis, taking the useful life as five years.

Highlights of 26th GST Council Meeting

Major Highlights of 26th GST Council Meeting

GST Council in its 26th Meeting held under the Chairmanship of the Union FM, Shri Arun Jaitley today in New Delhi sent a strong positive signal to exporting community by deciding to extend the available tax exemptions on imported goods for further 6 months beyond 31st March,2018.

Thus, exporters presently availing various Export Promotion Schemes can now continue to avail such exemptions on their imports up to 1st October,2018, by which time an e-Wallet Scheme is expected to be in place to continue the benefits in future.

GST Council also agreed today to:

a.    Defer the implementation of the e-Wallet scheme by 6 months i.e., upto 01.10.2018; and

b.    Extend the present dispensation in terms of exemptions etc. which is available up to 31.03.2018, for a further 6 months i.e., upto 01.10.2018.

In a related development which would benefit the exporters, the GST Council reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit. The Council appreciated that the pace of grant of IGST refund has picked up.

Thereafter, the GST Council directed GSTN to expeditiously forward the balance refund claims to the Customs/Central GST/State GST authorities, as the case may be, for their immediate sanction and disbursal.

For merchant exporters a Special Scheme of payment of GST @ 0.1% on their procured goods was introduced.

Domestic procurement made under Advance Authorization, EPCG and EOU Schemes were recognized as ‘deemed exports’ with flexibility for either the suppliers or the exporters being able to claim a refund of GST/IGST paid thereon. All these avenues were made available upto 31.03.2018.

A new model was discussed extensively and Group of Ministers on IT has been tasked to finalize the same.

Another major recommendation of the Council includes deferment of the liability to pay tax on reverse charge basis till 30.06.2018. Meantime, a Group of Ministers will look into the modalities of its implementation to ensure that no inconvenience is caused to the trade & industry.

Another major recommendation of the GST Council was relating to Grievance Redressal Mechanism. The GST Council in its 26th Meeting today tasked the GST implementation Committee (GIC) with the work of redressing the grievances caused to the taxpayers arising-out of IT glitch.

SUMMARY OF 26TH GST COUNCIL MEETING HELD IN NEW DELHI

SUMMARY OF 26^TH GST COUNCIL MEETING HELD IN NEW DELHI

1. Council decided to extend the current system of filing simplified return i.e. GSTR-3B up to 30 June 2018.
2. No conclusive decision was taken on GSTR 1,2,3 simplifications as the taxman is of the opinion that simplification should not provide room for tax evasion.
3. TDS & TCS provisions also extended till 30 June 2018 for the want of proper IT infrastructure.
4. E-way bill for Interstate movements of goods to become mandatory w.e.f. 1 April 2018 as per amended E-Way bill rules 2018.
5. The whole country divided into 4 regions for the purpose of the intrastate E-Way bill. Each region to have mandatory intrastate e-way bill system on a gap of weekly basis so that all regions can be covered within the month of April.
6. Certain tax exemptions which were earlier given to exporters till March 2018 has been extended for a further period of 6 months.
7. Special exporter GST refund drive to be started from 15 March 2018 so that the refund claims can be cleared up to 31 March 2018.

All about RUN Name approval Form.

RUN Name Approval FORM

RUN or Reserve Unique Name facility is a service offered by the Ministry of Corporate Affairs (MCA) to simplify and speedup the company name approval process. Prior to the introduction of RUN form, any person wishing to obtain a name approval from the MCA must first obtain Director Identification Number (DIN) and then make a name reservation application in Form INC-1.
Now, any person having a MCA login can easily reserve a company name for a period of upto 20 days by applying on the MCA portal. The fee charged by the Government for verifying and approving or rejecting a name approval application made using RUN form is Rs.1000. The average time taken by the Government for processing a RUN name application is less than a day. 

Company or LLP Name to be accepted. 

A company or LLP name must not be identical or similar to an existing company or LLP name or trademark. The MCA RUN name application form automatically detect and prevents users from applying for a company name that is identical to an existing company or LLP name. However, the RUN name application form does not verify if the suggested name is identical to an existing trademark. Using the IndiaFilings tool above, you can verify the availability of name against the MCA and trademark database in one click.

If the name is not identical, the system would allow for submission of the name. On payment of the fee, the application would be forwarded to the MCA Centralised Registration Centre and a MCA Officer would verify if the name is similar to an existing company name or LLP name or trademark. In case the MCA officer feels the name is similar to an existing company name or LLP name or the name is not acceptable as per MCA Incorporation Rules, the RUN name application would be rejected. If the name is acceptable, the name reservation approval would be granted for a period of 20 days.
Before the expiry of the 20 days mentioned on the name approval, the applicant must file the application for incorporation of the company.

Guidelines while applying for reservation of name.

Identical or Similar
Proposed company name cannot be identical or similar to an existing company or LLP or trademark. Plural version, joining or separating words, spacing, different tense, different spelling, addition of place, addition of titles and other minor difference would not make a name unique. 

Constitution 
Proposed company names cannot include words indicative of a separate type of business constitution or legal person or any connotation. For example, words like co-operative, sehkari, trust, partnership, proprietor, society, HUF, firm, Inc., GmbH, SA, PTE, Sdn, AG cannot be a part of company name.

Patronage 
Proposed company name cannot imply association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or occupying important positions in Government. Proposed name cannot imply association with Indian or Foreign Government.

Regulatory Approval 
Proposed company names that include words like insurance, bank, stock exchange, venture capital, asset management, mutual fund or other financial activity may require approval from Regulatory Bodies like RBI, SEBI, IRDAI, etc.,