c.v.o. ca's...in learning new things through various webinars, special issue of news &...

NEWS & VIEWSFOR MEMBERS / SUBSCRIBERS / VOL. 23 - NO. 11- MAY 2020

From President's Desk...Dear Professional Colleagues and Readers,

CA Sanjay Visanji Chheda

Thank you all..... Always in Gratitude

C.V.O. CA'S

Follow us on , , LinkedIn@cvocain Join Yahoo group : [email protected]

April 30, 2020.

Back to back, third Communication while in Lock Down and while writing this, one Singapore University Report suggesting that even fourth Communication will be shoot while in Lock Down.

Unprecedented Self Isolation days. Lot and lot of time to do so many things which had taken back seat during normal days of hectic practice. These Lock Down Days, we all have learnt living with minimum things, minimum requirements, minimum needs.

Despite having no travel time, no office working, still almost everyone busy with so many things around. Since not meeting one to one with clients, with office staff, lot more time is now in communication with each of them.

Life has balanced everything more aggressive, more reasonable. Now we all are spending splendid time with own family, extended family of cousins (through games on zoom and WA), reasonable time while helping family with home chores, taking out time for society urgent meetings, calls to clients, to office staff.

We all have started learning one beautiful thing, asking “Well Being” of each other while calling, texting and even while in any online meeting.

CVOCA has remained active or rather proactive in these days, wherein we remained busy to keep you all busy in learning new things through various webinars, special issue of News & Views themed “Write Down in Lock Down” and same will be endeavor till we all resume our normal life.

Events in Retrospect

As we said, CVOCA has remained super active (though always remaining choosy and very selective) during this Lock Down with back to back 10 Webinars for the benefit of practising members, members in industry, student members and public at large. With dual objective of helping aspiring Chartered Accountants in selecting careers and at the same time reaching and establishing connect with CVOCA Members across disciplines across geographies, we had webinar wherein we had eminent speakers from Dubai, London, Switzerland and Canada.

Upcoming Events:

As the signals are coming that this Lock Down is going to have phase 3.0 too, we are brainstorming to give members of CVOCA, most needed topics and best speakers through various webinar. One such webinar is

ndplanned on Saturday 2 May 2020, wherein various Fund Managers will guide us all on various scenario, investment strategies during and post Covid.

Latest issue of CVOCA News & Views

CVOCA Team is approaching each and every member who has shown slightest inclination to write, speak or present anything in any format, whether articles, audio or videos, which can help CVOCA Members and as a result, in the present issue, we have articles which cover topic ranging from... Stress Test Your P&L and Managing Liquidity Corporate Sustainability & Growth, New GST Return System – Old Wine in New Bottle? (Part 2 of 2), Dialing GST Amidst COVID-19, Vivad se Vishawas, Creating your own recipes to achieve success in CA profession.

Hope, wish and pray that you all Stay Home, Stay Safe, Stay Studying

FROM THE DESK OF CHAIRMAN

NEWS BULLETINNEWS BULLETINCOMMITEECOMMITEE

PresidentCA Sanjay Visanji Chheda

Chairman CA Hasmukh Bhavanji Dedhia Convenor CA Parin Dinesh Gala Jt. Convenor CA Umang Lalit Soni Sp. Invitees CA Rakesh Maganlal Vora

Members CA Dharmi Mulchand Kenia CA Hitesh Keshavji Pasad CA Kunjesh Raju Shah CA Nihar Suresh Dharod CA Nisha Ninad Gala CA Priten Bhupendra Shah CA Ankur Kishor Sangoi CA Nainit Digesh Savla

CONTENTSCONTENTS

CA Hasmukh Bhavanji Dedhia

ASSOCIATIONASSOCIATION

C.V.O. CA'S NEWS & VIEWS

Events in Retrospect .....................3

Stress Test Your P & L ...................4and Management LiquidityCorporate Sustainability & Growth

New GST Return System ‐ ............7Old Wine in New Bottle(Part 2 of 2)

Dialing GST Amidst .....................13COVID ‐ 19

Vivad se Vishwas.........................19

Creating your own ......................25 recipes to achieve success in CA profession

From Europe’s Italy .....................28to India and its Italy

Capitalytic ...................................32Understanding Candlestick Brief Update On

SEBI & Corporate Law.................34

FEMA Updates............................38

RERA Updates.............................41

Direct Taxes Law Updates ...........42

GST Updates ...............................48

VOL. 23 - NO. 11 - MAY 2020

2

During the nation-wide lockdown, the word 'Zoom' has become synonym of

webinar or some training session or of video conferencing. Every day there

would be easily 4 to 5 (some days, even more) announcements or information

about some training session or webinar on variety of subjects ranging from

technical topics like tax, GST, accounting, auditing, advisory, valuation, IBC,

business revival etc. to soft or other skills like work-outs or yoga etc.

Obviously, during lockdown one considers best utilization of the available time

and positive side of the problems of restricted movement is that one could

participate in such sessions taking initiatives of learning and development.

In continuation of my last month's communication about role of practicing CA's

in revival of clients' discontinued business operations by partnering with them,

I venture to put some stray thoughts about strategies towards enhancement of

professional practice, leveraging the knowledge and rare experience of newer

challenges (of course, with hidden opportunities!):

Like business, even in profession, the size matters. The statistics of ICAI

always reveal that practice units with 5 to 10 or more partners are lesser in

number. Practice units with one/two/three partners may perhaps find it

difficult to grow (or survive) in the newer world that we shall embrace after

the normalization from current pandemic impacts.

Leveraging technology to the best possible extent would become important

indicator of the growing practice units. Small and Medium Practitioners

would be compelled to streamline the work procedures by best use of

available technologies. 'Work from Home' capabilities of several firms are

evident in announcements of several large corporates' annual financial

results and audited financial statements, even during lockdown period.

Without appropriate technology this could not even be thought of.

Specialization was and would always be the buzz word; sooner or later all

growth seeking practice units would have to consider specialization or

presence in 'niche' areas of profession. 'Dig deep' rather than 'dig wide'

would be wiser strategy.

Immense opportunities in wide variety of fields would arise locally as well

as globally. Therefore, right positioning would matter more rather than

presence in many small, insignificant areas.

Though nothing new in above stray thoughts, but in the light of present

challenges and newer learning, it would be advisable to refresh these thoughts

to build strategies.

“Zoom” barabar “Zoom”…

EVENTS IN RETROSPECT

UPCOMING EVENTS

NEWS & VIEWSVOL. 23 - NO. 11 - MAY 2020 C.V.O. CA'S

3

Date Committee Topic SpeakerAttendance (Zoom, FB &

Youtube)

Fri., April 3, 2020

Study Circle Committee





Recent Case Laws in Direct Taxes

CA Deepesh Talakshi Chheda 100

150

245

220

150

725

492

367

268

1220

Sat., April 4, 2020

Business Continuity Plan in view of COVID-19

CA Hasmukh Bhavanji DedhiaCA Jignesh Vasant KeniaCA Amit Manhar GalaCA Samir Harish GogriCA Sneha Pankaj Gogri

Mon., April 6, 2020

Program Committee

Program Committee

Program Committee

Force Majeure - Impact on Contracts / Agreements due to Corona

CA Janak Bathiya

Wed., April 8, 2020

Issues and Changed Scenario under RERA

CA Ashwin Bhavanji Shah

Sat., April 11, 2020

Path To Succeed Exams

CA Priti Paras SavlaCA Pankti Chetna Heetesh Veera

Tue., April 14, 2020

Technology and Work from Home

CA Adarsh Madrecha


Will, Estate Planning & Private Trust

CA Haresh Kunvarji ChhedaCA Toral Shah

Tue., April 21, 2020

How to Read Faster & Study Effectively

Students Committee

Students Committee

CA Srinivas Vakati

CA Srinivas VakatiWed., April 22, 2020

Master Your Memory


CVOCA Career Connect, Different Discipline, Different Geographies

CA Jenil Krishnakant Shah (India - Actuary)CA Zil Yogesh Savla (Dubai - CFA)CA Viral Vinod Haria (Canada - CPA)CA Kruti Nirav Karani (IIM MBA - Switzerland)CA Biren Harilal Gala (UK - ACCA)

Date Committee Topic Speaker

Sat., May 2, 2020

Capital Market Committee

Investment Opportunities in Capital Market during COVID-19 Crisis

Prakash DiwanCA Jayant Gangji MamaniaCA Bhavin Ramesh ChhedaHarini Dedhia SaxenaYatin Mulchand Mota

Compiled by:


CA Umang Lalit Soni

The year 2020 is going to be known, not just as the year when the entire

world went on lockdown, but also as the year when the world economy

was hit in the worst possible way. Businesses are currently glancing over

their books trying to stress test their P&L and manage their liquidity:

the two essential steps needed to keep any business floating. Every

business must have a contingency fund plan which is a layout of how to

deal with adverse cash flows: a situation that is currently being faced by

almost all businesses across the globe.

The famous world leader Nelson Mandela, who was when asked how he managed his suffering in exile,

had replied that he had done so by preparing for the future. This is exactly what the world leaders and the

business communities of the world are also busy doing: preparing for a world post-Covid-19. In the current

scenario, the entire world is trying to survive not just the virus but also the lockdown imposed to combat this

disease. Once the world finds itself on the downward slope of this pandemic's spread, it will also witness

several transformative changes that will present themselves in front of the industries. One of the most

pressing concerns to plague all businesses alike right now is the liquidity tightening situation. To

sustain this and other such economic changes, the business community needs to be armed with a

contingency plan. This plan is required to sustain the business and to harp on the new opportunities

that will arise as the business matrix of almost all industries will get reworked and redesigned.

The Current Situation

The current situation, if had to be described in one word, is 'Unprecedented', 'Extraordinary', 'Opportunity'

and 'Irresponsible', which can sum up and portray the gravity of the situation very efficiently. Many opined that

the lockdown must be extended beyond the proposed first phase of 21 days which eventually was extended by

another 19 days; however, this standstill phase also presents several opportunities for the industries.

Effective Corporate Management - Need of the Hour

The Corporates can manage the situation by adhering to the effective

engagement of the customers as well as the employees. The roadmap best

suited could be 'Corporates bonding and binding for a common social

cause'. The need for the hour is communication, transparency and

employee management while keeping the Balance Sheet of the business

stable.

Role of Banks in Liquidity Management

During adverse business conditions, all businesses including financial institutions face low cash reserves and

low cash inflows. A major expense that companies foresee pressing their liquidity is fixed expense like salary.

Stress Test Your P&L and Managing LiquidityCorporate Sustainability & Growth

VOL. 23 - NO. 11 - MAY 2020

4


VOL. 23 - NO. 11 - MAY 2020

The role that the RBI and the government are playing in managing the liquidity is quite immense to ensure that

the negative impact of this economic meltdown is reduced. EMIs are being deferred, NPA's are not being

classified and moratoriums on loans have been put in place. At the same time, it's valuable to highlight that

these financial aids will be beneficial only when applied for a short term period like 3 months. Beyond

that period, these measures will become a challenge even for the financial institutions.

There is a need for 'Specific targeted measures for specific sectors'. The impact of this standstill phase is

going to be felt by the businesses for a long time and there is a need to implement innovative measures like

tax carry-back on the lines of a tax carry-forward. What is also important is the execution of these measures

effectively and creating awareness about them among the SME's. The relief packages are being disbursed

efficiently in accounts like Jan Dhan and Jwala that have been started for providing financial relief.

Is Cost-Cutting the Only Way to Salvage the Situation?

Cost-cutting is the automatic response generated in such a financial crisis but is it the right and effective way?

How can the corporate leaders take on the right stand while safeguarding the interests of all stakeholders in

the company like the employees, investors, and vendors along with keeping the company afloat?

'Cost conscience about every penny' is the best mantra to manage the problem. What is needed is cost optimization

and not just mindless cost-cutting. The shareholders are associated with any business, not for a short term benefit but to

reap the benefits that accrue in the long run. Small steps like taking a cut in the profits, the enterprise heads taking pay-

cut, infusing surplus cash into periphery businesses and supporting the entire supply chain will cohesively have a big and

positive impact on the cash flows of the business.

The non-value added costs will have to go and companies will have to forego capital expenditures for some time to come.

The cash flows available will be needed to support the salaries for as long as they can. Start-ups will have to reimagine their

business model, as what was relevant a month back may not be relevant now. The businesses will have to perform a

balancing trick, where the drop in sales will have to be set-off by a reduction in non-essential expenses. This is going to be

a hard call for the corporates, rightly said as 'cutting the flab'.

5


VOL. 23 - NO. 11 - MAY 2020

A Time for Introspection

Can this lockdown phase be productively used for some introspection and to fix certain decisions taken in the past?

Cost efficiency, managing the P&L, cutting losses and not getting

emotional about decisions are ways that will ensure long term

sustainability of the business. Business strategies and their

relevance in the current scenario will also have to be re-evaluated.

We would like to cite the example of 'CoWrks' that runs on the model of

taking working space, adding value to it and selling that space further.

For them, the supply cost is the rent they pay while their revenue is

generated by the fully serviced fee that they charge for that space. Demand for flex workspace will increase as

companies would want to limit the expense of working space. People might also not be too inclined to work

from home because of the psychological impact that the lockdown has had on several employees.

The Operational Process Needed

While it is being discussed many times that the effective operational processes should be put in place and the

opportunities that will arise after the lockdown, it is pertinent to lay stress on the fact that companies need to

sit down and answer basic questions like 'will the outsourced labor come back?' There is a need to gather

information and answers to questions like these to get started in the short run. For the long run, a task force

needs to be generated to lay down a system that would kick in automatically in case such a crisis emerges

again. There is a need for prioritization when it comes to manufacturing industries. The essentials will take

precedence over goods that the customer would not want in the short run. Social distancing is going to be the

norm of the future and this norm is going to define the way businesses will redesign their working model.

Industries like hospitality, aviation, and entertainment industry that includes media houses, malls and

multiplexes will take the biggest hit to their bottom line. In short, any industry that depends on a crowd will

suffer. The pharma industry will be the first to revive. There will be a big change in the trends and behavior

patterns of the population in days to come. The auto industry might see a surge in buying with everyone using

their vehicle instead of public transport.

6


Compiled by:

CA Nihar Suresh Dharod Komal Jethalal Gosar(CVO Student)

New GST Return System – Old Wine in New Bottle? (Part 2 of 2)

In the previous article, we had an overview of the New GST Return System ('NGRS'), its components and the

applicability thereof. The Government claims the same to be a comprehensive and simplified process of

return filing – which would reduce the compliance burden on the taxpayers.

Let us have a detailed review of the NGRS and its components to understand the same.

Process Flow of the NGRS :

The process flow of the NGRS envisages supplier based uploading of the data on the GST Portal. Thus, similar

to the existing system, the supplier would be at the heart of the process. The process flow of the NGRS would

be as under:

Step 1: Selection of the Return Type and Periodicity

At the start of each FY, taxpayer will have to decide on the type and the periodicity of filing the GST returns. It

would depend on the turnover of the preceding FY and nature of supply made by the taxpayer (Refer to the Para

C.2 & F in Part 1). The default periodicity shall be monthly. The periodicity (i.e. quarterly or monthly) once

selected cannot be changed for the entire FY. However, quarterly filers will have the option to switch between

the returns as per the specified norms (Refer to the Para E in Part 1).

Step 2: Uploading of details in GST ANX-1

Once the taxpayer has made the above selection, he is required upload details of his tax liability (i.e. outward

supply, reverse charge, reversal of provisional ITC claimed) in GST ANX-1. The said liability will be accounted

as liability in the GST RET-1/2/3.

Step 3: Action on ITC in GST ANX-2

The invoice details uploaded by the supplier shall be auto-populated in GST ANX-2 of the taxpayer. The

taxpayer is required to take action on the said invoices i.e. to claim the credit, reject the invoices or keep the

invoice pending (i.e. carried forward to next period). The invoices accepted by the taxpayer will be accounted

as ITC in the GST RET-1/2/3.

Step 4: Filing GST Return (GST RET-1/2/3)

Post the above-mentioned steps, summary of GST ANX-1 and GST ANX-2 will be auto-populated in the

taxpayer's GST returns. GST return contains a summary of outward tax liability, ITC claims/reversals,

TDS/TCS credit, interest, late fees, etc. along with the payments thereof. The return filing process is completed

after filing of the GST return.

VOL. 23 - NO. 11 - MAY 2020

7


Detailed Description of Components of NGRS:

A. GST ANX- 1

Supplier can upload details of documents for any supply on real time basis. However, the monthly return th thfiler will not be able to upload documents from 18 to 20 of next month and the quarterly return filer will

rd thnot be able to upload documents from 23 to 25 of next month after end of quarter.

thHowever, the recipient can claim the credit only of the invoices uploaded by the supplier up to 10 of the

month following the end of tax period (month/quarter). Thus, effectively GST ANX-1 has to be uploaded thby 10 of the following month only.

GST ANX-1 does not require verification or filing. After uploading details, when taxpayer files GST RET-

1/2/3, GST ANX-1 will be deemed to be filed (i.e. it cannot be edited).

Some of the key aspects related to details to be uploaded are as follows:

Table No. of Details Remarks

3A Supplies to

URD

- To be reported POS-wise & Rate-wise (net of debit/credit notes)

- HSN Code is not required to be reported in this Table

3B Supplies to

RD

All B2B supplies along with amendments to be reported except:

- Outward Supplies attracting RCM (to be reported by recipient in Table

3H)

- Supply of Goods by SEZ to DTA (Incl. in Table 3K by Importer)

- Supply of Goods/Services to SEZ (Incl. in Table 3E/3F)

3C & 3D Exports - Exports with/ without payment of IGST to be reported along with

shipping bill ('SB') details

- In case GST ANX-1 is uploaded without SB details, same can be

3E & 3F SEZ

Supplies

- SEZ Supplies with/ without payment of tax to be reported

- For supplies on payment of tax, supplier ought to report whether

supplier or SEZ Unit/Developer will claim refund - Claim of refund by

3G Deemed

Export

Supplies

- Deemed Export Supplies to be reported (instead of Table 3B)

- Supplier ought to report whether supplier or recipient will claim refund -

Claim of refund by supplier/recipient (i.e. after availing ITC) will depend

VOL. 23 - NO. 11 - MAY 2020

8


3H Inward

Supplies

attracting

RCM

- Domestic Inward supplies attracting RCM to be reported by recipient

(and not by supplier in his Table 3B)

- Supplies to be reported Supplier's GSTIN/PAN wise i.e. total value of

supplies and tax thereon for each supplier (invoice wise not required)

- Value of supply should be reported net of credit/debit notes and advance

3I Import of

Services

- Import of services attracting RCM to be reported net of credit/debit notes

and advances paid/ advance adjustment, if any

- Import of services from SEZ Unit shall be reported by supplier (i.e. SEZ

3J Import of

Goods

- Details of taxes paid on import of goods to be reported

- Post automatic flow of data from ICEGATE, this table shall be

3K Import of

Goods from

SEZ

- Details of taxes paid on import of goods from SEZ to be reported by

recipient (instead of reported in Table 3B by Supplier)

- Post automatic flow of data from ICEGATE, this table shall be

3L Reversal of

Provisional

ITC

ITC on missing invoices can be claimed provisionally by the taxpayer in a

specified manner. After elapse of 2 tax period (for monthly filers) or 1 tax

period (for quarterly filers), Invoice-wise details of provisional ITC

claimed has to be reported as follows:

- Vendor Uploads: Report and reverse credit (since credit of invoice

uploaded by vendor i.e. as GST ANX-2 would also be claimed) – this will

technically not have any impact on tax liability

- Vendor Does not Upload: Report and reverse credit (since invoice not

uploaded by vendor would be ineligible) – this will result in increase in

4 Supplies

through E-

comm.

Supplies made through e-commerce operators liable to GST TCS u/s. 52

shall be reported at the consolidated level (even though these supplies

have already been reported in Table 3)

Debit/Credit Notes: To be reported in the respective tables only. If debit/credit note is issued for difference

in tax rate, taxable value shall be reported as 'zero' and only differential tax amount shall be reported.

Advances: Taxable advances to be reported in GST RET-1/2/3 directly and not in GST-ANX-1.

Exempted/Non-GST Supplies: Exempted/nil rated supplies, non-GST supplies, outward supplies

attracting RCM shall be reported directly in GST returns and not in GST-ANX-1.

Facility for transitional reporting (i.e. transactions prior to the NGRS) shall also be available.

Negative amounts shall also be allowed to be reported in various tables such as 3A, 3H, 3I, etc.

VOL. 23 - NO. 11 - MAY 2020

9


HSN Code: 6 digits HSN code for goods and services will be reported by taxpayers with annual aggregate

T/O of more than INR 5Cr and for exports, imports and SEZ Supplies. HSN Code shall be optional for

other taxpayers.

Amendment: The NGRS requires amendment/editing to be made by supplier only i.e. recipient can only

take specified actions on documents but cannot amend/edit the same. Details uploaded in GST ANX-1 can

be edited/amended by supplier in following manner:

For B2B Supplies (i.e. Table 3B, 3E, 3F, 3G)

th th- Up to the 10 : Supplier can edit uploaded details up to 10 of the following month only if the document

has not been accepted by the recipient. If the recipient has accepted the same, then such document has to

be reset/unlocked by recipient for editing by the supplier.

th- After the 10 : The uploaded documents shall be visible to the recipient in GST ANX-2 to accept, reject or thkeep pending. Post 10 of the following month, the document which needs to be amended has to be

rejected by the recipient in his GST ANX-2. Such rejected document shall be conveyed to the supplier only

after filing of return by the recipient. These rejected documents may be amended by the supplier before

filing the next return. The liability will be accounted retrospectively i.e. in the period in which documents

have been uploaded but credit will be reflected in GST ANX-2 prospectively i.e. can be claimed after

amendment has been made by the supplier.

- Separate facility shall be provided for amendment of documents which have been accepted by the

recipient.

- In case documents are reported in the wrong table, the recipient has to reject the documents in his GST

ANX-2 and supplier will be given a facility to just shift the documents instead of amending.

For Others (i.e. Table 3A, 3C, 3D, 3H, 3I, 3J, 3K and 4)

- The above-mentioned tables have to be amended by uploading details in GST ANX-1A for the tax period to

which the document belongs. GST ANX-1A has to be uploaded before September following the end of the

FY or actual date of furnishing the annual return, whichever is earlier. Filing process will be similar to

GST ANX-1. If there is upward revision of the liability, then interest will be auto calculated by the system. If

there is downward revision of the liability, then no refund will be granted instead the negative liability will

be adjusted in the next return filed by the taxpayer.

B. GST ANX- 2

Data uploaded by supplier in his GST ANX-1 (irrespective of his return type or periodicity) shall be auto

populated in GST ANX-2 of the recipient on near real-time basis. The documents uploaded by the thsupplier till 10 of the following month will only be visible in the GST ANX-2.

Details of documents uploaded by supplier shall be made available along with supplier's trade/ legal name

and status of supplier's return filing. Following documents/transactions are auto-populated in GST ANX-

2 of the recipient:

- Inward supplies from registered persons i.e. B2B procurements;

- Import of goods from SEZ on bill of entry (after auto flow of data from ICEGATE);

VOL. 23 - NO. 11 - MAY 2020

10


- Import of goods from overseas on bill of entry (after auto flow of data from ICEGATE);

- Eligible ISD Credits

Following action can be taken by the taxpayer on the documents auto-populated in GST ANX-2:

- Till 10th of the following month: The documents can be only accepted or unlocked/reset.

- After 10th of the following month: The recipient can accept, reject or keep pending the documents.

These actions have been summarised below:

Accept – means such supply has been received and details uploaded by the supplier are correct. Acceptance

will result in claim of credit in the GST returns. Once the document is accepted it will not be available for

amendment (amendment can be made only via separate utility by rejecting the said document). Any document

on which no action has been taken by the recipient, it shall deem to be accepted.

thUnlock/Reset – if documents are accepted by the taxpayer before 10 of the following month, the same has to thbe reset/unlock before 10 for making amendments.

Reject – Means non-acceptance of documents by the recipient. Any documents which does not match or

cannot be corrected by way of debit/credit notes or does not belong to the taxpayer may be rejected. The

rejected documents will be conveyed to the supplier for the amendment in the subsequent return.

Keep Pending –means taxpayer has deferred the decision on the invoices. The same may be done for reasons

such as conditions for claiming ITC are not met, document does not match with the books, etc. They will be

carried forward to GST ANX-2 of the next month. ITC of the pending invoices will neither be available in the

main return nor can they be amended until rejected.

If a supplier has not filed main return (i.e. GST RET 1/2/3) for two consecutive tax periods (in case of

monthly filers) or one quarter (in case of quarterly filers), then the details uploaded in the subsequent

GST ANX- 1 of supplier will be visible in the GST ANX-2 of the recipient but recipient will not be able to

accept those documents.

C. GST Returns i.e. GST RET-1/ RET-2 (Sahaj)/ RET-3 (Sugam)

GST RET-1/2/3 are the main GST returns which is required to be filed by the taxpayer. The same is a

mixture of values that are auto-populated from GST Annexures as well as manual inputs. It contains

details of the various categories of tax liability, input tax credits claimed and reversed, TDS/TCS credits

and tax/interest/fee payment.

Some of the key aspects related to GST Returns are:

Summary of all the outward liability will be auto-populated from the tables of GST ANX-1. However, the

details about the advances received/adjustment and exempt/nil-rated/non-GST supplies, outward

supplies attracting RCM and supply of goods by SEZ to DTA have to be reported manually.

Details of the ITC will be auto populated from GST ANX-2. However, claim of provisional ITC, reversals as

per Rule 37, 39, 42, 43, etc. or reclaim of credits have to be reported manually. Further, ITC on capital

goods and services out of the net ITC claimed has to be reported separately.

VOL. 23 - NO. 11 - MAY 2020

11


Adjustments related to transition to the NGRS (for liability and ITC) can also be made. For e.g. if a supply

has been reported in GSTR-3B but not in GSTR-1, then the same needs to be reported in GST ANX -1.

However, as the tax payment has already been made, tax liability will have to be adjusted in the return.

Interest on account of late filing of return or late reporting of invoice will be auto calculated by the system.

Other interest payments, if any have to be calculated and reported by the taxpayer.

An impressive feature which is added in the new return is that “Refund from Electronic Cash Ledger” can

directly be claimed in the main return itself. Procedure/modalities for the same are awaited.

Amendment in GST RET-1/2/3 can be made through GST RET-1A/2A/3A. Auto-populated items from GST

ANX-1 shall be auto populated from GST ANX-1A – if amended. The other details entered manually shall

be editable.

D. Form GST PMT -8

Quarterly return filers have to upload the GST Annexures and file GST Returns on quarterly basis. However,

tax payment has to be made each month on self-assessment basis vide GST PMT-8. Summary i.e. single

amount of outward liability, RCM liability and ITC has to be reported along with payment of taxes. Credit of

this tax payment shall be available in the quarterly GST Return filed. Thus, effectively the quarterly filers have

to undertake tax computation exercise on monthly basis.

Conclusion:

The NGRS seems nothing but a detailed and modified version of the original envisaged return filing system.

Many of the short comings have been addressed and learnings on the procedural parts have been incorporated

– to ensure smooth compliances under GST. Thus, it can be rightly titled as “Old Wine in New Bottle”. Needless

to say, the credit matching still remains the heart of the system.

GST ANX-1 seems only modified version of GSTR-1 and would be manageable. However, reconciliation of ITC

and undertaking action in GST ANX-2 shall pose serious challenges – specifically to MSMEs and SMEs, where

human and technical resources are inadequate.

Further, looking at the constant process changes recommended by the Government such as introduction of e-

invoicing, e-way bills, etc., relying on technology for solution would be imperative. This will ensure that the

return filing processes are adequately automated with minimal human intervention for checks and balances

only.

With the advent of technological disruptions across all the walks of life, Indian business houses and tax

consultants will have to think beyond the traditional methods/processes and embrace the NGRS with open

arms. The implementation of the NGRS will be challenging but technology will be a good support during the

transition. Thus, I would conclude with a famous quote:

“A smooth sea never made a skillful sailor….”

VOL. 23 - NO. 11 - MAY 2020

12


Compiled by:

CA Shreyas Dhirendra Sangoi CA Poojan Mahendra Dedhia

Dialing GST Amidst COVID-19

When the entire world is fighting the COVID-19, the business section of the society is paving new paths to run

their businesses with the advent of digitalization and automation, thereby implementing the words of our

Hon'ble Prime Minister,”Jaan bhi, Jahan bhi”. There have been Standard Operating Procedures and

Business Continuity Plans being rolled out by the business entities to avoid hindrance in the day to day

business activities.

Amidst these times, businesses have seen increased spends on CSR activities, healthcare expenses for staff,

setting up work-from-home infrastructure, liquidated damages and many have been engaged in renegotiation

of contracts. GST rate being 12% to 18% on most of these transactions, the impact of GST on these expenses is

huge. Let us delve into each of these issues to understand its impact on the business ecosystem in India.

(a) CORPORATE SOCIAL RESPONSIBILITY ('CSR') ACTIVITIES

In the present pandemic time, the corporate sector has been involved in various CSR initiatives which

can be bucketed into 3 silos:

(1) Cash donations such as Contribution to PM CARES Fund and PM National Relief Fund

(2) Donations in kind by providing goods such as medical equipment, distributing masks and

sanitizers, providing food. These could be business assets or third-party purchases.

(3) Donations in kind by facilitating or providing services such as mass training to nurses /

paramedical staff and providing transport facilities.

The concept of CSR activities finds legal recognition in section 135 of the Companies Act, 2013, which

mandates companies with a net worth of Rs. 500 crore or more, or a turnover of over Rs. 1,000 crore or a

net profit exceeding Rs. 5 Crore has to spend minimum 2% of the average net profits of the company

made during the immediately preceding financial year. The Ministry of Corporate Affairs has recently

declared all expenditure / grants by companies towards the Covid-19 fight be counted as towards CSR

activities.

Under the Income Tax Act, 1961, CSR expenditure has been disallowed as a deduction. However, in the

GST law, there is no specific mention about treatment for CSR activities.

Levy of GST on CSR activities

Cash Donations

The levy of GST is on “supply” of goods or services which includes all forms of supply made or agreed to

be made for a consideration in the course or furtherance of business. Hence, two essential elements are

required in order to levy GST - (a) Supply of goods or services (b) Existence of consideration for a

particular supply which is also called as 'quid-pro-quo'.

In the case of cash contributions or donations, the same is merely a transaction in money without any

supply of underlying goods or services. Also, there is absence of any reciprocity or quid-pro-quo as the

recipient is not mandated to act for the donor in a specified manner. Hence, cash donations are outside

the purview of GST levy.

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13


However, in scenarios wherein the donee agrees to act in a specified manner for the donor eg. Mandatory

display of company name in a particular manner in lieu of the donation made or naming an event after the

sponsor, it may be disputed by the Department that the transaction is a sponsorship activity or an

advertisement and hence should be subject to GST. Accordingly, if the companies sponsor charities and

receive advertisement space, signage etc. it could amount to benefit received in lieu of donation, making it

a supply triggering GST. Such cases may be considered as barter transaction attracting GST in the hands

of both the parties on their respective supplies.

However, if any event is sponsored without benefit in return, for instance, the recipient merely

acknowledges the contribution or donation in some form, it may still not take a colour of supply.

Accordingly, terms and conditions of the donations made need to be seen in detail in order to determine

the taxability and pure CSR activities should be distinguished from advertisement / sponsorship services

and should not be subject to GST.

Donations in kind

Donations in kind viz. facilitating or providing services should also not be subject to GST as there is no

consideration received for supply of any service.

In relation to donation in kind i.e. distributing goods, entry in schedule 1 to CGST Act needs to be seen

'Permanent transfer or disposal of business assets where input tax credit has been availed on such assets'

even without consideration has been deemed to be a supply. Accordingly, if business assets or third party

purchased goods which have been accounted as business assets of the company and ITC availed thereon,

then GST will get attracted on free distribution of such goods. Alternatively, if ITC has not been availed on

these goods, there would be no GST liability.

Input Tax Credit ('ITC') on CSR expenditure

The definition of ITC for input, input services and capital goods allow availability of ITC on goods or

services which are 'used in the course or furtherance of business'. Secondly, section 17(5)(h) which

pertains to blocked credits, specifically restricts ITC on “goods lost, stolen, destroyed, written off or

disposed by way of gift or free samples”. Hence, in order to be eligible to avail ITC it needs to be shown

that the CSR expenditure was incurred in the course or furtherance of business and the same was not

disposed by way of gift.

Used in the course or furtherance of business

The CSR expenditure can be considered to have a direct nexus with the business of a company as the

same is a legal requirement as mandated by the Companies Act, 2013. To take a step ahead it can also be

argued that CSR activity ultimately benefits the company either directly or indirectly. Reference can be

drawn to the case of Essel Propack v. Commissioner [2018-TIOL-3257-CESTAT-Mumbai] wherein it was

held that CSR activity is not merely in the nature of charity but the same is necessary for production and

sustainability of the company, it augments the credit rating of the company and its standing in the

corporate world and it win the confidence of stakeholder and shareholders etc. Accordingly, it can be

argued that CSR expenditure is in the course or furtherance of business.

Goods disposed by way of gift

It needs to be noted that the said clause applies only to goods and hence ITC on service related CSR

activities should be available to companies. In relation to ITC on goods for CSR activities, the Advance

Ruling given by Kerala Authority for Advance Rulings in the case of Polycab Wires Pvt Ltd [2019 (24)

GSTL 103 (AAR – GST)] has given an adverse ruling on the basis of Section 17(5)(h) that the applicant

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14


distributed electrical items on a free basis without collecting any money and hence, the ITC was denied

on the aforesaid direct supplies as gift.

It is worthwhile to refer the press release dated 10.07.2017, wherein it was observed that: “Gift” has not been defined in the GST law. In common parlance, gift is made without consideration, is

voluntary in nature and is made occasionally. It cannot be demanded as a matter of right by the employee

and the employee cannot move a court of law for obtaining of gift”

As far as companies are concerned it can be argued that they are mandated by the Companies Act and

accordingly the same is a legal requirement cannot be called as voluntary in nature. Therefore, for

companies engaged in distribution of goods, it can be argued that ITC should be available. However, for

companies which are not covered under section 135 of companies Act and other non-corporates, the

Department can dispute the eligibility to avail ITC. However, this goes against the entire principle of

incentivizing the taxpayers to contribute to the welfare of people, especially amidst the Covid-19

pandemic. A timely clarification by the Government on the ITC aspects of CSR activities would be

welcome and can certainly boost CSR spending by taxpayers.

(b) GST ON LIQUIDATED DAMAGES/COMPENSATION FOR NON-FULFILLMENT OF CONTRACT

With the imposition of nation-wide lockdown there has been significant impact on the supply chain

model across various sectors. Due to non-availability of raw materials, transportation, labour etc. it has

been difficult to maintain the supply of goods or services as agreed upon earlier. The suppliers are not

able to fulfill the terms of delivery due to the lockdown which in turn is causing pecuniary impact on the

buyers which may lead to legal battles for imposing liquidated damages / penalty / compensation for non-

fulfillment of contractual obligations.

We would not delve into whether the case falls under the force majeure scenario. Non-fulfillment of

contractual obligations may lead to payment of compensation by either of the parties (supplier or

customer) who have made the breach of the contract as many contracts have specified clauses for

liquidated damages / compensation. A doubt may arise whether receipt of damages or compensation

shall constitute 'supply' and whether the same should be subjected to GST?

Para 5(e) of Schedule-II to the CGST Act mentions 'agreeing to the obligation to refrain from an act, or to

tolerate an act or a situation, or to do an act' as a deemed supply of service. The said phrase has

originated from the Service tax law and the Department has always sought to levy Service tax / GST on the

same on the premise that consideration is received for agreeing to tolerate an act or breach of a contract.

Accordingly, transactions such as liquidated damages, notice pay recovery, demurrage charges by

shipping companies etc. have been scrutinized for levy of Service tax earlier and now GST.

In the connection, the jurisprudence under the Service tax regime has evolved. The Hon'ble CESTAT in

KN Food Industries Private Limited v. Commissioner of CGST [ ] has held 2019‐TIOL‐3651‐CESTAT‐ALL

that receipt of compensation charges would not be subject to Service Tax. Also, the Hon'ble Madras High

Court in GE T&D India Limited v. Deputy Commissioner of Central Excise [ ] 2020‐TIOL‐183‐HC‐MAD‐ST ,

has held in negative about applicability of Section 66E(e) of the Finance Act, 1994 to receipt of notice-pay

by an employer from the employee.

In terms of the GST law, amendment in section 7 to CGST Act, 2017 ('CGST Act') merits detailed

analysis. Prior to the amendment, by way of an inclusive definition, the subject activities discussed above

(as mentioned in Schedule II) qualified as 'supply' vide Section 7(1)(d). However, section 7(1)(d) was

omitted retrospectively w.e.f. 01.07.2017 vide the CGST Amendment Act, 2018. Simultaneously, section

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15


7(1A) was introduced retrospectively w.e.f. 01.07.2017 to provide that where certain activities/

transactions constitute a supply in accordance with Section 7(1), they shall be treated as either supply of

goods or supply of services as referred to in Schedule II. The effect of Section 7(1A) is that the activities

specified in Schedule II must first fall within the description of 'supply' and their inclusion in Schedule II

is only to clarify whether they constitute supply of goods or services. The scheme of this amendment only

reinforces the position that the wide looking wordings of Sr. no. 5(e) in Schedule II cannot override the

requirement of certainty of supply with quid pro quo.

Lastly but importantly, the primary condition for levy of GST is the positive understanding of two

persons towards making of a supply, whether active or passive. In other words, carrying out of the active

or passive act must be certain and accordingly agreed to between the parties. When a person agrees to

make a supply of services to another person for consideration, the certainty of making such supply

constitutes the entry point for contractual understanding between them. Such certainty is completely

absent in the instances illustrated here in above, as the event, triggering the payment of such charges,

may or may not happen. The reason for contemplating such charges is not towards the making of any

supply, but to act as a deterrent against breach of the respective obligations. There is no agreement of

tolerating any act or situation, as the understanding of the parties is to honour the respective obligations,

and not otherwise.

Based on the above, it can be concluded that liquidated damages should not be subject to GST. However,

compensation / damages that bears a nexus to an underlying positive act of supply of goods or services

could be subject to GST. Hence, there cannot be a straight jacket formula which is common for all

transactions but each case needs to be analyzed independently. Below we have sought to tabulate various

scenarios and the GST applicability thereto:

Compensation

bears nexus to a

supply transaction

No case of an

underlying supply

being in existence

Contractual

position – event

identified and

consideration

lowered

Other cases

May qualify as

supply

Arguably should

not qualify as

supply

Adjustment to

original supply

price & may not

constitute an

independent supply

Could

arguably

qualify as

supply

(c) NON – PAYMENT OF RENTALS ON LEASE CONTRACTS

Due to the fixed cost of rentals of shops/establishments, the lessee's including some leading retail chains have shown concern towards the depleting cash reserves and their incapability to pay high cost of rent. Many lessee's have been insisting that the lessors or owners waive off / reduce the rentals during the lockdown period.

Let's examine the above proposition of waiver / reduction of lease rental charges and its impact thereof under the GST Law. Typically, there is a lease agreement/rent agreement between the owner of a property (the lessor) and the lessee / tenant who takes it on rent. The agreement is generally for a fixed period of time and it specifies the fixed periodical milestones wherein the rental payment needs to be made.

Compensation for

delay in payment

of consideration

for supply

Compensation /

charges in event

of cancellation of

supply

Contractual recipient seeking

deductions from consideration

owing to reason of deliverables

being sub-standard

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Lease rental is covered under 'continuous supply of services' wherein the contract is there for a period exceeding three months with periodic payment obligation. In such case, time of supply along-with invoice

thrules is linked to the date on which the payment is liable to be made by the recipient eg. 10 of each month is treated as date of supply of service. The time of supply for payment of GST liability shall be the same whether or not any invoice has been issued or any payment has been received by the supplier.

Now let's take a scenario wherein after discussions and negotiations, lease rent is waived off or is

reduced for a particular period. However, the invoice for rent has already been issued and GST liability

thereon has been discharged. The question that arises is how can the GST liability which has been paid,

be reduced or adjusted or refunded.

Any adjustment in the GST liability cannot be given by classifying the same as post-supply discount

under section 15(3)(b) of CGST Act as the condition of discount being established under an agreement

and being known before the time of supply, does not get fulfilled. Also, a credit note under section 34

cannot be issued as this is not a case of excess price charged but a case of renegotiation.

The possible option would be to enter into an addendum to an agreement or modification in the existing

terms of contract wherein full or partial waiver of rent, shall be effected. After the addendum /

modification of the agreement, only the revised amounts can be considered for the computation of GST

liability on lease rental income.

(d) ITC ELIGIBILITY ON ADDITIONAL EXPENSES DUE TO COVID-19

Most of the business entities have adopted the concept of “Work from Home” and even the ones engaged

in essential items are running their manufacturing facilities/plants with the minimum skeleton of

employees. For this, the companies have been reimbursing to their employees all costs incurred for

setting up inevitable infrastructure required to work relentlessly from home.

The facility of providing of internet connection to employee, hiring laptops on rental basis, shifting of

desks/files to home, setting-up sanitation facility at office etc. are necessary for the conduct of business

and continuance of critical business activity in the given scenario. The aforesaid expenditure has been

incurred in the course or the furtherance of business and hence, the prime test for allowability of ITC is

satisfied.

However, the department could object the claim of ITC on the count of restriction specified under section

17(5) relating to usage of goods or services or both for personal consumption. The same can be defended

on two grounds (i) The expenditure is not for personal use (welfare of the employee) but the expenditure

is undoubtedly incurred for the business to run and sustain (ii) Providing sanitization and other

essential facilities in office is obligatory for most of the business enterprises, hence, the same is statutory

obligation/necessity to work and thereby ITC shall be eligible. Reference can be made to case of Steel

Authority of India Ltd. Vs. CCE & ST., Raipur [2017 (350) ELT 279 (Tri. Delhi)] and similar decisions

under erstwhile regime wherein credit has been allowed when expenditure was incurred as a statutory

obligation.

However, ITC eligibility of the following expenses could be an issue due to specific restriction under

section 17(5):

Health insurance policy taken such as COVID-19 for employees (unless it is mandatory under any law)

Food expenses of employees stuck at factory / office

ITC reversal on perishable goods destroyed

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(e) ISSUANCE OF “CREDIT SHELLS” BY AIRLINE COMPANIES

The cause of widespread of pandemic is the movement of people from one part of the world to other. To

curb this, the Government of India instructed for complete suspension of all domestic and international

flights till further notice. With this announcement came a huge pressure on all airline companies to

refund the money against the tickets to be cancelled. In order to overcome the liquidity crisis, the airlines

companies started issuing “Credit Shells” in the form of refund vouchers redeemable upto a period of 6

months or 1 year. This practice of issuing time-based vouchers has already been challenged before the

Supreme Court. Further, this would also lead to multiple issues pertaining to taxation and accounting of

the transactions. Also, similar practice is being adopted in hospitability industry as well.

The Credit Shells are akin to vouchers and its taxability thereof under GST is covered by specified time

of supply provisions which distinguishes the vouchers based on whether the supply to be made is

identifiable at the time of issuance of voucher or not. Accordingly, if supply is identifiable at the time of

issuance of voucher than the voucher shall be subject to GST on the date of issue of the voucher and in all

other cases, the date of redemption of vouchers shall be the point in time for applicability of GST. Against

Credit Shells, Customer may book domestic flight or international flight or even do hotel bookings,

hence, the terms and conditions of Credit Shells needs to be examined in order to determine the

applicability of GST.

Way Forward

“Hard Times may have held you down, but they will not last forever”. Hence, while we remain cautious on

the pandemic, the industry is preparing for the post-lockdown life. Industry at large has helped Government in

this fight, and it would only be befitting that the Government looks at the issues faced by the taxpayers. On the

GST front, certain relaxations and suitable clarifications on the aforementioned issues would certainly be

welcome.

VOL. 23 - NO. 11 - MAY 2020

18


Vivad se Vishawas

VOL. 23 - NO. 11 - MAY 2020

“You cannot do anything with knowledge unless you know where it stops, and the costs of using it.”

― The Black Swan: The Impact of the Highly ImprobableNassim Nicholas Taleb,

Background

Indian tax system is known for its aggressiveness. As per estimate nearly half a million income-tax cases are

pending at various level. In order reduce tax litigation, while presenting the Union Budget 2020, the Finance

Minister had announced the introduction of `Vivad se Vishwas' Scheme to provide for a fast resolution in

respect of income tax litigations pending at various levels of hierarchy. Pursuant to such announcement, The

Direct Tax Vivad Se Vishwas Bill, 2020 was introduced in the Lok Sabha which was passed and also received

the accent of the Hon'ble President of India and now been enacted as 'The Direct Tax Vivad Se Vishwas Act, st2020' (the 'VSVS'). On 31 March 2020, the Government of India promulgated the Ordinance “The Taxation

and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020”. The ordinance has relaxed the date for

availing the VSVS without payment of additional sums.

Amount payable under scheme:

This Act is applicable to all appeals and petitions filed either by the taxpayers or the income tax department,

and which were pending before the various appellate forum as on 31 January 2020. The appellant shall be

able to settle the tax arrears on payment of 100% of disputed tax (125% in search cases u/s. 132 and 132A) in

which the penalty and interest shall be waived in case of quantum and 25% of the disputed penalty, interest or

fee in cases of payments made till 30th June, 2020. This will stand enhanced to of 110% of disputed tax (135%

in search cases u/s. 153A) in which the penalty and interest shall be waived in case of quantum and 30% of the

disputed penalty, interest or fee in case payment is done after 30th June 2020. However, it pertinent to note

that only the penalty which is related to the disputed tax shall be waived. Thus, penalty u/s. 271A, 271B, 271D,

272A, 271E, 271DA, etc. would not be waived as the same does not relates to disputed tax and the appellant

would still be required to pay 25% of such disputed penalty while opting for VSVS.

Persons eligible to opt for VSVS:

A. A person in whose case an appeal/writ petition/special leave petition filed either by him or by the income

tax department, or by both, and is pending before any appellate forum as on 31.01.2020 or where the time

limit for filing the same has not yet expired as on 31.01.2020.

B. Where a person has filed his objections before Dispute Resolution Panel ('DRP') against the draft

assessment order and the DRP has not issued any direction as on 31.01.2020 or in case the DRP has

issued the directions but the assessment order is not passed by the Assessing Officer as on 31.01.2020

C. Where a person has filed an application for revision u/s. 264 of the Income Tax Act, 1961 and the same is

pending as on 31.01.2020

D. Where declarant has initiated proceedings or given any notice for arbitration, conciliation or mediation

under any law for the time being in force or under any agreement entered into by India with any other

country or territory outside India

Compiled by:

CA Paras Khimji Savla CA Prity Mayur Dharod

19

C.V.O. CA'S NEWS & VIEWSVOL. 23 - NO. 11 - MAY 2020

Some of the important aspects of VSVS have been explained in the form of FAQ's below:

I) Who are the persons ineligible to apply for VSVS?

i. Persons in respect to whom no appeal is pending regarding the tax, interest, penalty or fee as on

31.01.2020;

ii. Persons, in respect to whom the due date for filing of appeal regarding the tax, interest, penalty or fee

has expired as on 31.01.2020;

iii. Cases where search has been initiated u/s. 132 or 132A of the Income Tax Act, 1961 and the amount of

disputed tax exceeds five crore rupees;

iv. Where prosecution has already been instituted unless the prosecution has been compounded on or

before the date of filing of declaration;

v. Cases relating to any undisclosed income from a source located outside India or undisclosed asset

located outside India or relating to an assessment or reassessment made on the basis of information

received under The Double Taxation Avoidance Agreement;

vi. Person in respect of whom an order of detention has been made under the provisions of the

Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974;

vii. Person in respect of whom prosecution for any offence punishable under the provisions of the

Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act,

1985, the Prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the

Prohibition of Benami Property Transactions Act, 1988 has been instituted on or before the filing of

the declaration or such person has been convicted of any such offence punishable under any of those

Acts;

viii. Person in respect of whom prosecution has been initiated by an Income-tax authority for any offence

punishable under the provisions of the Indian Penal Code or for the purpose of enforcement of any

civil liability under any law for the time being in force, on or before the filing of the declaration;

ix. Person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in

Securities) Act, 1992

II) In case of search case involving multiple years, can one opt for VSVS?

In case of search initiated u/s. 132 or 132A of the Income Tax Act, 1961 for multiple years, one can opt

for VSVS only for the years where the disputed tax is Rupees five crores or less. Thus in a case where

search is initiated for 6 years and the disputed tax is less than Rs. 5 crores in each of the 3 years, one

can opt for VSVS for those 3 years.

III) In case dispute is regarding interest u/s. 244A of the Income Tax Act, 1961, is it covered under

VSVS?

If dispute is regarding interest, other than interest on disputed tax, VSVS can be opted only if any appeal is

pending against the same as on 31.01.2020 or time limit for filing appeal has not expired as on

31.01.2020.

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IV) In a case where additions have been confirmed by the CIT(A) and appellant has further filed appeal

with the ITAT. In the meanwhile, AO has passed penalty order against the said addition for which

appellant is in appeal before the CIT(A). Can the appellant avail for VSVS for both the appeals?

How is the disputed tax calculated in such a case?

If appellant is opting for VSVS for quantum additions, penalty and interest related to such disputed

additions is automatically waived. Both the appeals shall stand withdrawn and the disputed tax amount

shall be the income-tax, including surcharge and cess, that is payable, as if such appeal was decided

against him.

V) In case of Q. IV above, is it possible for the appellant to opt for VSVS in case of pending penalty

appeal and continue with his appeal for quantum additions?

No. Without settling quantum appeal, tax payer is not allowed to settle penalty appeal under VSVS.

Appellant does not have the option to settle only the penalty appeal.

�VI) What shall be the treatment of appeal filed, in case VSVS is opted?

Upon filing the declaration before the designated authority (DA), the appeal which is pending before any

Income Tax Authority shall deemed to have been withdrawn from the date certificate is issued by the DA.

Further, the DA shall not institute any proceeding in respect of an offence; or impose or levy any penalty;

or charge any interest under the Income-tax Act in respect of such tax arrears.

VII) What if the appellant has paid excess amount under VSVS?

Any excess amount paid by the appellant in pursuance of a declaration made under VSVS shall not be

refundable. However, where the appellant has before filing of the declaration, paid any amount towards

the tax arrears and such amount paid exceeds the amount payable under VSVS, the excess amount shall

be refunded to the appellant without any interest u/s. 244A of the Income Tax Act, 1961.

VIII) In case where during scrutiny proceedings, part additions were accepted and appellant is into

appeal for only remaining disputed additions, can the appellant bring the agreed additions as fresh

grounds before the CIT(A) and seek relief in VSVS to avoid interest and penalty?

No, VSVS is for settling dispute. An appellant can opt for VSVS only in case of additions for which an

appeal has been filed. No relief of interest and penalty can be claimed in case of agreed additions which

are not disputed by introducing fresh grounds of appeal.

IX) What if the CIT(A) has set aside the order and the case has been remanded back to the AO for a

fresh assessment of facts, can the appellant avail VSVS?

Yes. In case where the matter has been remanded back to the AO for further examination, the appellant

can opt for VSVS as the appeal is still pending. In this case the disputed tax would be the amount of tax

payable had the AO made the additions in respect of the matter which was remanded back.

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X) In case where the appeal before CIT(A) was filed beyond the time limit allowed of 30 days from the

date of service of notice, along with application with condonation i.e. last date to file appeal was

31.12.2020 but the same was filed on 10.01.2020, and the appeal was pending for hearing as on

31.01.2020, whether VSVS can be availed in such a case?

In a case where appeal has been filed late along with an application to condone the delay in filing of the

appeal, and the condonation order has been passed rejecting the application, appellant shall not be

eligible to opt for VSVS. However, where the condonation application is pending for disposal, a better

view can be taken that the appeal is pending as on 31.01.2020, one can opt for VSVS.

XI) What if the Income Tax department has filed an appeal late with condonation for delay and is

pending on 01.02.2020, can the appellant go for VSVS?

Yes. The appellant is eligible to opt for VSVS in case where the department has filed the appeal along with

condonation application.

XII) In case where appeal is pending before the CIT(A) as on 31.01.2020, and later on a defect notice is

received on 05.02.2020, whether the appellant can opt for VSVS?

In case where a defective notice is received asking the appellant to rectify the defect and such defect is

rectified within the given time period, it would be regarded as a valid appeal pending as on 31.01.2020

and the appellant can opt for VSVS. However, in case the appeal is dismissed on the ground of defect in

filing of the appeal, in such a case, the appellant would not be eligible to opt for VSVS.

XIII) In a case where the additions made by the AO have been reduced by the CIT(A), and the assessee as

well as the department have filed further appeal with the ITAT, how would the disputed tax be

calculated?

The appellant has the option to settle either his appeal or the appeal filed by the department or both. In

case appellant desires to settle both the appeals, the tax payable under VSVS shall be calculated

considering the total demand i.e. 100% of tax arrears in case of appeal filed by the appellant and 50% of

the tax arrears in case of appeal filed by the department.

XIV) In a case where appeal is pending before CIT(A) against addition u/s. 50C. Pending the appeal, DVO

report has been received and AO reduces the addition by passing order u/s. 154 of the Income Tax

Act 1961. What shall be the disputed tax for the purpose of VSVS?

The disputed tax in such a case shall be the amount of income tax, including surcharge and cess, that

would be payable by the appellant after giving effect to rectification order.

XV) Penalty has been levied u/s. 271B for failure to get books audited for which the assessee has filed

an appeal. Appeal for quantum additions is also pending. On opting for VSVS in case of quantum

additions, will the penalty u/s. 271B be automatically dropped?

No. Penalty, other than which is levied in respect to disputed income or disputed tax, is not dropped

automatically on opting for VSVS in case of quantum additions. Appellant would have to apply for VSVS

separately for the settlement of disputed penalty, and the same will not stand withdrawn upon opting for

VSVS in case of quantum additions.

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XVI) In case of an appeal which is pending before the CIT(A), and the assessee has a favourable

decision regarding the same issue in another year, also passed by the CIT(A) and is not reversed

till date by any higher appellate authority, will the amount payable under VSVS be calculated as

one-half of the amount disputed tax?

No. The amount payable under VSVS shall be reduced to one-half of the amount disputed tax only in

case where the appellant has a favourable decision regarding the same issue in another year but such

decision should have been adjudged by any appellate authority which is higher than the authority

before which the current appeal is pending.

XVII) Appellant has a pending appeal before the CIT(A) for various issues for a particular assessment

year, of which assessee already has a favourable decision regarding one of the issues in another

year adjudged by the ITAT, does the appellant have to option to settle only part of the issue under

VSVS in respect to which he already has a favourable decision and continue with the appeal for

the other issues.

No. It is not possible to settle part of the issues under VSVS. Once opted, all the issues are to be

included under VSVS for settlement. However, while calculating the amount payable under VSVS, for

issues in respect to which the appellant already has a favourable decision adjudged by the ITAT and not

revered by higher appellate authorities, in any other year, only 50% of the disputed tax shall be

required to be paid and 100% of the disputed tax in case of other issues.

XVIII) How is the disputed tax amount calculated in case where the demand amount is NIL and the

additions made by the AO has the effect of only reduction in business loss?

In case where the additions made has the effect of reduction in losses and the tax demand is NIL, the

appellant shall have 2 options i.e. (1) Pay the amount of tax related to such additions under VSVS and

carry forward the original loss claimed without considering additions made by AO or; (2) do not pay

any amount under VSVS and carry forward the reduced business loss. However, in case where the

original loss has already been claimed by the appellant in any of the succeeding years against business

profits, same shall have to be reversed to the extent of additions and the tax thereon needs to be paid

along with interest. Taxpayer can choose any option considering the facts about set off of losses in

subsequent year.

XIX) How to calculate disputed tax in cases where dispute results to reduction of MAT Credit?

In case of a reduction in MAT credit, the appellant company shall have 2 options i.e. (1) Pay the amount

of MAT Credit reduced by considering the same as disputed tax and carry forward the MAT credit by

ignoring such amount of reduction as per return of income or; (2) do not pay any disputed tax and

carry forward the reduced MAT credit to subsequent years.

XX) Is an assessee eligible for VSVS in case where notice for prosecution has been received?

In a case where only notice for initiation of prosecution has been issued, the assessee can avail for

VSVS. However, VSVS cannot be availed where the prosecution has already been instituted unless the

prosecution is compounded before filing of declaration under VSVS.

23


XXI) In case where rectification is pending before the AO, how shall be the disputed income or

disputed tax be calculated for the purpose of VSVS?

In case of pending rectifications, orders have been issued to the AO to clear them immediately. It is

advisable to approach the AO and get the rectification order before filing of declaration under VSVS.

XXII) In case where appeal was pending before any appellate forum as on 31.01.2020 and thereafter

there has been a hearing in the month of February 2020 and order has been passed against the

appellant, can the appellant now opt for VSVS?

Yes. Since the appeal was pending as on 31.01.2020, the appellant can avail VSVS although the order

has been passed thereafter.

While our Union government has made every attempt to give relief to a sizeable section of tax payers by

announcing complete waiver of penalty and interest in case of disputed tax and waiver of 75% in case of

disputed penalty, interest or fee and also giving immunity from prosecution, thereby reducing long

ongoing litigations which only add to the anxiety of the taxpayers, it is upon the taxpayers to decide on a

case to case basis about the likely outcome of an appeal, litigation costs and chances of success in

appellate proceedings, what would be more beneficial to them

24


Compiled by:

CA Jekin Rajesh Dedhia

‘Ya Aeshu Suptaeshu Jagruti' is the motto of the ICAI, which literally means that a person who is awake in those

that sleep. This approach is a state of self-awareness through which success can be achieved and can further

be elaborated as person who is always alert, knows his destination and knows the path to be followed to

achieve the success. In order to achieve success, a person must be:

- Clear regarding the definition of success

- Have a strong purpose of why he wants to achieve the same

- Path through which he can improve/achieve the success

So, I would like you to start a journey of understanding and ponder on the above questions in whatever stage of

life that you are in right now.

To understand this better, let us try to understand what do you mean by the term 'Success'. Success is it a

destination, or a vision, a goal, a dream in life? By setting a goal, one becomes more focused and concentrated.

For a student who has passed his SSC examination, it may be getting into a reputed college. For a CA student, it

may be the feeling of becoming CA. For a freshly qualified CA, it may be getting a new job or starting a practice.

For an experienced CA, it may be expanding his CA business, or being a partner of a reputed firm. Also, in this

practical world, one has generally associated the term success to achieving material objects like a car, a house,

a good business etc. However, in the search of this material objects, we definitely tend to ignore happiness. As

is said in the search of known, sometimes we miss the obvious. In the current competition, we must take a

pause and ask oneself what it is the thing that provides me happiness. It is subjective analysis and dependent

on various factors. We deeply know what we want, but sometimes we tend to ignore the same. We must

concentrate on our inner calling and put our efforts in the direction of what we naturally love doing.

Imagine a person working day and night, doing his daily routine, without understanding the goal where he

wants to reach. He may never reach the goal or may reach but not as fast than a person with a clear mindset, a

clear vision coupled with dedication who would reach. If Sachin Tendulkar would have never dreamt of cricket

or would be have concentrated on being bowler, he would not be called as the God of cricket… Master blaster of

cricket. Similarly, if Lata Mangeshkar would be in some other field and not singing, she would not be a legend

singer which is her unique trait. Every person has some unique personality and talent. Harnessing the talent

consistently and practicing will make you a diamond from a normal stone. So, it is important to know yourself,

your capabilities and try to capitalize your strengths and overcome weakness. Passion is the key. One must

love what he does and must have passion to do the same. When one does any action with passion, with interest,

and a vision to achieve something, he is fueled with the energy to reach the goal.

A student pursing CA course must have a strong purpose on why he wants to be CA. With that purpose, values

of perseverance are inculcated. One is more focused and efforts put are clearly aligned with the goal to become

CA. With a purpose, it makes life simpler and enjoying.

Creating your own recipes to achieve success in CA profession

VOL. 23 - NO. 11 - MAY 2020

25


Once you have known the destination and know why you want to achieve it, you will focus your energy in the

path to achieve it. There would be many problems being faced by you in order to reach the goal, but by a little

shift in thinking from the word problem to the word challenge, it will boost your confidence to overcome the

challenge, making you more independent and you will tend to take responsibility for your actions.

For a CA student, articleship experience provides a rich exposure and learning to the practical dimension of a

CA. Understanding the work that you are doing, being curious to learn more and grabbing each opportunity

that comes in front of you will definitely help prepare you for the CA Final exams and the strategy to pass the

same. For eg- If filing a return of income is the goal for which there is a deadline, accordingly we plan our time,

prepare a checklist, follow-up with the client for queries, file the excel utility and then pray that the return gets

uploaded in the income tax portal without error. Similarly, the same can be applied in planning for your exams

too, you know you have an exam date, accordingly, you can plan the studies effectively, prepare a broad

checklist of time schedule assigning the subjects to be completed, prioritizing the subjects that require more

attention based on one's ability and capitalizing on the subject that you are more interested and aim to get an

exemption in at least two subjects of each group. I urge the CA students planning to give exams to have a

mentor who is qualified CA and who knows what it takes to become a CA and cares for you. You may have a

constant follow up with him to understand whether you are on the right path and how can you make the limited

time most productive. After your revision, before you give the exams, it is extremely important to give a mock

to be prepared for the final exams. It will give you an actual scenario on your time management skills, help you

know the areas where more attention is required. With all the perseverance and hard work, you are definitely

bound to give your 100% and after giving each exam, you should not discuss that question paper. You would

not be able to control what is already gone. Its done and dusted. The only thing you must focus is on the next

paper. After giving all exams, you must just leave the rest to God.

Also, doing meditation for 5 to 10 mins daily in the morning or before study time and also on exam date, will

provide peace to your mind and in this time, you may imagine or saliently repeat, ''Whatever I have studied till

today, I know everything and come what may the question in the exam, I will be able to answer the same to the

satisfaction of examiner… You may visualize the result day, you sitting on the computer you enter your roll no.

and you see the words 'PASS'… You can imagine the feeling of happiness all around and joy on the face of your

parents, the sacrifice, the efforts that you put in the blessings given to you everything has worked. By doing

this, you will know the feeling of being CA and once you are in that state, with that attitude you will surpass the

CA final exams with flying colours.

As is said to become a outlier or the best in your field you should have certain traits or develop a niche in your

field, your USP, a competitive advantage for which people come to you for advice. Try to constantly develop

your skills, be updated about the recent developments in your area of practice and also have a knowledge of

economy. In our profession, to achieve success, one must not compromise on the values. CA's must practice

the code of conduct diligently. Networking and contacts are the key to develop the CA practice. On a boarder

level, we must be honest in our work and helpful to the society at large. Recently, Narendra Modiji, our prime

minister, has said that 'The CA community looks after the economic health of society'. We become the role

models for the society, and we are community of glory and pride looked upon to by the common people. It is

important that we live upto the expectation of the society and refrain from corrupt practices for few short-term

gains. We must adhere to the ethical standards laid down by the ICAI.

VOL. 23 - NO. 11 - MAY 2020

26


As Swami Vivekanand has rightly said, “We are what our thoughts have made us, so take care about what you

think. Words are secondary. Thoughts live, they travel far”. To become a master of your life you must become a

master of your thoughts. Law of attraction always works. Positive thinking will provide abundance and vice

versa. Positive attitude in our each and every act will boost our morale to achieve more. Life is not what

happens to you but in how you respond to what happens to you. The 3 P's are sure a way to success – passion,

preparation and persistence. By doing this you will feel a sense of happiness and satisfaction.

Sometimes, you may experience failure in order to achieve success. But remember, failures are the

steppingstones to success. It provides one with so much of learning. Important part is not to repeat the

mistakes again. Students by giving mock exams can know the improving areas which require more practice.

Life is full of ups and downs and God forbid, if you encounter any failure in your life remember that sometimes

in the moment to achieve something great, it is glorious even to fail. Never regret, be happy that it happened.

Never question 'why me', say to life 'try me'. It is like either you win, or you learn. We should be grateful for the

learnings too.

Also, being grateful for whatever you have achieved so far will give you more abundance. By being grateful one

becomes humble and more positive. By giving, one receives more. So be thankful for the people who have

contributed to your success. Life is journey and not a destination. Celebrate all tiny victories as well and be

present in the now and not worry about the future or try thinking of changing the past. Thus I would say

success is not only a destination to be reached but true success is a journey to be enjoyed/ to be lived. Success

is a constant state of being happy. If you love what you do, you will achieve success. I would conclude by saying

success is not final and failure is not fatal. It is the courage to continue that counts…!!!

VOL. 23 - NO. 11 - MAY 2020

27


Compiled by:

CA Henik Dilip Shah

From Europe's Italy to India and its Italy

thOn the 13 of March, 2020, Italy introduced a complete lockdown in the entire nation, to combat the Covid-19

pandemic. Earlier, there were lockdown-like restrictions only in the northern parts of Italy, especially the

region of Lombardy, where the city of Milan exists. By then, Italy had total Covid-19 cases at 9,172, which by rd23 (i.e. within 10 days) had jumped to 63,928 and 6,078 deaths, thus having a mortality rate of around 9.5%

stThe graph shows the daily number of cases recorded in Italy (till 21 April). If you observe closely, the peak in stthe number of cases was observed on the 21 of March, almost a week after the complete lockdown.

As at the time of writing this article, world-wide there are around 25 lakh total cases and around 1.7 lakh

deaths, thus the mortality rates comes around 6.8%. So why is Italy's mortality rate so high?

Firstly, because of selective testing, as Italy was testing only those patients with severe symptoms, that too in

areas with high epidemic intensity, like Lombardy. The coronavirus may take up to 14 days before an infection

flares into symptoms, such as fever and dry cough, and during that incubation period, asymptomatic patients

may potentially transmit it, thus making more people vulnerable.

Secondly, Italy's demographics. Italy has the second highest percentage of old age people, next to Japan. 23%

of Italy's population is over 65 years of age. 85.6% of those who have died were over 70 years.

Thirdly, is Italy's health-care system in itself, which provides universal coverage and is largely free of charge.

48% of those who died had around 3 pre-existing illnesses.

Now coming to India and its Italy

“Coronavirus: Is this textile city set to be 'India's Italy'?” was the headline of the article published in the BBC thNews dated 24 March, 2020. It was about Bhilwara, a city in the state of Rajasthan, with a population of

approximately 4 lakh people. The article highlighted the lacklustre approach of the patients and the medical

staff in handling the first few cases of the Covid-19 pandemic.

thThe patient which the BBC traced had come to Brijesh Banger Memorial Hospital, on the 8 of March, with

pneumonia and respiratory problems. Neither he was asked about his travel history, nor did he reveal on his

own. So he was not tested for Covid-19. Two days later, he was sent to Jaipur for specialised treatment. Even ththe hospitals at Jaipur didn't test him. He ultimately died on the 13 of March.

VOL. 23 - NO. 11 - MAY 2020

28


thThe doctor at Bhilwara handling this case had even been to a resort at Udaipur on the 9 of March. Finally the ndnews broke out, people realised and a curfew like situation was imposed. Till the night of 22 March, around

7,000 people were home quarantined, only 69 people were tested and 13 turned to be positive, including the th thdoctor concerned. In between this period (from 20 February to 13 March), that hospital at Bhilwara had

attended a total of 6192 patients from neighbouring districts and 39 patients from other states (all for non-

covid-19 illness).

The responsibility to control the situation was on district magistrate Rajendra Bhatt, who had this six-step

plan—isolate the district, map hotspots, door-to-door screening, aggressive contact tracing, ramp up

quarantine and isolation wards, and put in place a monitoring mechanism for rural areas. Within Bhilwara,

the epicentre's containment and buffer zone were turned into 'no-movement' sectors. The administration

stopped all traffic and ensured daily disinfection. Screening and testing were prioritised for that hospital, the

epicentre of the outbreak. Social distancing was also strictly enforced. No one was allowed to venture out of

their house. The administration had taken upon itself to deliver essentials, including food items, rations and

medicines to everyone's doorstep. If people broke the social distancing rule, they were deprived of their rations

for the day.

thSince 30 March, nobody in Bhilwara has been tested positive. This is an achievement so great that the Central

Government had apparently been studying the Bhilwara model to emulate. (It did emulate as we shall see

later).

thIn India, lockdown for the country at large was introduced on 24 of March, when the total cases were tharound 500, for 21 days, i.e till 14 of April.

rdHowever, considering the situation, the lockdown has been further extended till the 3 of May. As we can see thfrom the graph, before the 20 of April, the number of cases were increasing, but not that exponentially. But the

thspike of the 20 has changed the calculations completely, and even after almost a month to the lockdown,

unlike Italy, India cannot still see the curve flattening.

The Central Government, through its Ministry of Health & Family Welfare (MoHFW), introduced a

containment plan in the first week of April (quite resembling the Bhilwara model) named “Containment Plan

for Large Outbreaks Novel Coronavirus Disease 2019 (COVID-19)”. It talks about strategically handling the

lockdown and post-lockdown phase.

It talks about strategies such as specific geographic quarantine (entire district/city/blocks of places reporting

large outbreak) and cluster containment (measures such as social distancing and creation of awareness,

including geographic quarantine).

VOL. 23 - NO. 11 - MAY 2020

29


And not just strategies, it also talks about the action plan “trigger for action” to implement the above strategies,

both at central and state level. The plan refers to the 2009 H1N1 flu outbreak, wherein it was observed to be

more prevalent in cities, citing a literal action of if the authorities catch a place on the way becoming a hotspot,

better restrict the disease to that hotspot, and don't let it spread out. Looking out for influenza-like illnesses,

studying the infectivity of the area helps, as it is not necessary that the disease spreads at the same rate in all

places across India. There are also provisions of creation of labs-VRDLs (Virus Research & Detection Labs)

and a centralised database for Covid-19. PPE (Personal Protective Equipment) procurement is clearly

mentioned in the plan to be a responsibility of the state governments.

Two other important elements that the plan talks about. One is Media management and other is Psychosocial

support. We all have seen how media mismanagement aggravated the 26/11 Mumbai terrorist attacks. Now

there shall be regular press briefings by designated people (Secretaries and District magistrates) or their

nominees only.

For Psychosocial support, the plan refers to another document “Minding our minds during Covid-19”. It

contains basic ideas to help keep ourselves busy and emotionally stable. It also provides for social behaviour,

especially with Covid-19 patients and others who may be experiencing some trauma. The helpline 080-

46110007 is also made available for any mental health advice.

How are other countries, perceived to be successful in containing the pandemic, actually

dealing with it?

stConsidering Taiwan- with total of only 422 cases and 6 deaths till 21 April, even after being a neighbour of thChina, with active trade and geo-social relations. The first case had come up on 24 January. Taiwan didn't

introduce any lockdown, restaurants and schools have all been functioning. It introduced screening of

passengers coming from Wuhan, even before China declared a lockdown in Wuhan, and banned entry of all

foreign nationals coming from China as early as in first week of February. Further, for all those cases which

emerged, efficient testing and contact tracing was done and hence the number of cases and deaths remains

low.

Also considering South Korea- though it suffers a total of 10,674 cases and 237 deaths, has not introduced any

major lockdowns. In fact some local elections are also being held here. The biggest reason is contact tracing,

by tracing passengers from incoming abroad flights, and asking them to install an app on their smartphones,

which will ask them about their illnesses, if any and look for symptoms. It is from this app that India's “Aarogya

Setu” app is inspired. Then by making the locals install the app, and tracing the location of suspected/ actual

Covid-19 cases, hotspots have been established and people are being refrained from visiting such places. The

South Korean government shall also publish and update this information on their website, keeping the

identity of the patients/suspects hidden.

Point to ponder:

India's lockdown has been extended and government is trying various ways out to contain the pandemic.

However, the irregular pattern of the increase in cases puts up a concern. Will India be able to do away with the rdlockdown on the 3 of May? Will India be going the Italy way or the Bhiwara way?

Think over it. Think different!

VOL. 23 - NO. 11 - MAY 2020

30


References:

News articles:

1. https://www.aljazeera.com/news/2020/03/italy‐coronavirus‐fatality‐rate‐high‐200323114405536.html 2. https://edition.cnn.com/2020/03/09/europe/coronavirus‐italy‐lockdown‐intl/index.html 3. https://www.bbc.com/news/world‐asia‐india‐51997488 4. https://www.outlookindia.com/magazine/story/india‐news‐from‐worst‐to‐a‐role‐model‐how‐bhilwara‐

turned‐the‐corner‐in‐war‐against‐coronavirus/303065

Data, graphs relating to cases and deaths from John Hopkins University- Coronavirus resource centre:

� https://coronavirus.jhu.edu/map.html

MoFHW- Containment plan:

� https://www.mohfw.gov.in/pdf/3ContainmentPlanforLargeOutbreaksofCOVID19Final.pdf

MoFHW- Minding our minds

� https://www.mohfw.gov.in/pdf/MindingourmindsduringCoronaeditedat.pdf

VOL. 23 - NO. 11 - MAY 2020

31


Compiled by:

CS Keyur Jitendra Furia

capitalytic

The candlesticks are the reflections of what buyers and sellers are doing. What extent they move the price and

the strength behind the move. Candles tells you who is in control but do not tell you about the strength of buyer

or sellers behind the move, candle with volume shows that. A candlestick shows an asset's price movement

over a set amount of time. This can be anywhere from a minute to a day, depending on the price chart.

Understanding Candlestick

Components of Candlestick :

Open Price: Open price tells us where the balance between buyers and sellers at the opening of that period, the

opening value is the first trade of the day, the open represents the desired position of investors to begin the day.

High Price: The high is the highest point the stock traded during the session. The high is the furthest point the

bulls were able to push the stock higher before sellers regained control to push the stock back down. The high

represents a stronghold for sellers and a resistance area to buyers.

Low Price: The low is the lowest point the stock traded during the session. The low is the furthest point the

bears were able to force down the stock before buyers regained control to push the stock up. The low

represents an area where enough demand existed to prevent the price from moving lower.

Closing Price: Close price tells us where the balance point was at the end of the period. The close is the last

price agreed between buyers and sellers ending the trading session. The close is the market's final evaluation.

A lot can happen between one close to the next close. The close represents investors' sentiments and

convictions of investors at the end of the day. It is the position investors desire to hold after-hours when

investors are unable to trade with liquidity until the next session opens.

Change in Price: The change is the difference between close to close. The difference in the closing value one

day versus the closing value next day. When this difference is positive, it tells us that demand is outweighing

supply. When this difference is negative, it tells us that supply is increasing beyond demand.

Range: The range is the spread of values within which the stock traded throughout the day. The range spans

between the bar's highest point and the same bar's lowest point.

VOL. 23 - NO. 11 - MAY 2020

32


How to read Candlesticks with colours?

The colour of a candlestick is used to indicate the way in which a market has previously moved or is currently

moving. From the above example, you can see that the chart will be green if the close price is higher than the

open price, and will be red if the close price is lower than the open price. As such, the colour of a candlestick is

a good indicator of whether a market was bullish or bearish during the given period. The current candlestick

can be moving because the current price is used instead of the close price, meaning the candlestick's colour

could shift from green to red or vice versa before the trading period is over.

Important points to remember:

The length of any wick, either to the top or bottom of the candle is ALWAYS the first point of focus because

it instantly shows, strength, weakness, and indecision, and most important where SMART-MONEY enter.

If no wick is created, then this signals strong market sentiment in the direction of the closing price.

SMART-MONEY active there.

A wide-body represents strong market sentiment and a narrow body present week market sentiment

Narrow body with the heavy volume either Smart Money observing for continuous of move or Smart

Money enter on the opposite direction.

Volume validates price. First, see what CANDLESTICK is telling then validated by volume, is It validating

or not with the CANDLESTICK price action.

When a particular timeframe DON'T make sense then move to the next higher time frame for the big

picture or lower timeframe for the microstructure of move.

Candlestick should analyze the context of the move. You should never try and read the market looking

at one day's action in isolation. Always read the market phase-by-phase and then read the latest day's

action into the phase.

VOL. 23 - NO. 11 - MAY 2020

33


BRIEF UPDATE ON SEBI AND CORPORATE LAW

by CA IP Neha Rajen Gada and CA IP Rajen Hemchand Gada

SEBI

A. CIRCULARS

1. Relaxation from compliance with certain

provisions of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015

and certain SEBI Circulars due to the CoVID -

19 virus pandemic – continuation

[Issued by the Securities and Exchange Board

of India vide Circular No. SEBI/HO/DDHS/

ON/P/2020/41 dated March 23, 2020]

SEBI has granted various relaxations in the due

dates for filing of various disclosures to be filed by

issuers who have listed /propose to list their Non-

Convert ible Debentures (NCDs) / Non-

Convertible Redeemable Preference Shares

(NCRPS)/ Commercial Paper(s).

2. Encumbrance on units of Infrastructure Inve-

stment Trusts/Real Estate Investment Trusts


of India vide Circulars No. SEBI/HO/DDHS

/DDHS/CIR/P/2020/43 & SEBI/HO/ DDHS/

DDHS/CIR/P/2020/44 dated March 23, 2020]

SEBI has permitted certain class of InvITs and

REITs to be encumbered. In this regard, it has laid

down the broad guidelines with respect to

creating an encumbrance, conditions for

invocation during the mandatory holding period

and other disclosure requirements.

3. Relaxation in compliance with requirements

pertaining to Mutual Funds


of India vide Circular No. SEBI/HO/IMD/

DF3/CIR/P/2020/47 dated March 23, 2020]

Mutual Funds have been granted relaxations in

submission of various half-yearly and annual

disclosures. Further MFs have also been granted

relaxation in implementation of various policy

initiatives like risk management framework for

liquid and overnight funds and norms governing

investment in short term deposits, Review of

investment norms for mutual funds for

investment in Debt and Money Market

Instruments, Review of investment norms for

mutual funds for investment in Debt and Money

Market Instrument and Valuation of money

market and debt securities.

4. Further relaxations from compliance with

certain provisions of the SEBI (Listing

Obligations and Disclosure Requirements)

Regulations, 2015 (LODR) and the SEBI

circular dated January 22, 2020 relating to

Standard Operating Procedure due to the

CoVID -19 virus pandemic


of India vide Circular No. SEBI/HO/CFD/

CMD1/CIR/P/2020/48 dated March 26, 2020]

SEBI granted further relaxation to Companies

with regard to filing under Regulation 40(9)

relating to Certificate from Practicing Company

Secretary on timely issue of share certificates and

under Regulation 44(5) relating to holding of

AGM by top 100 listed entities by market

capitalization for FY 19-20. Relaxation are also

granted for conduct of committee meetings –

VOL. 23 - NO. 11 - MAY 2020

34


nomination and remuneration committee,

stakeholders relationship committee and risk

management committee; operation of standard

operating procedures and publication of

advertisement in newspapers.


provisions of the SAST Regulations, 2011 due

to the COVID-19 pandemic



DCR1/CIR/P/2020/49 dated March 27, 2020]

SEBI has extended the the due date of filing

annual disclosures, in terms of Regulations

30(1), 30(2) and 31(4) of the SAST

Regulations for the financial year ending March

31, 2020 to June 01, 2020.


provisions of the circulars issued under SEBI

(Credit Rating Agencies) Regulations, 1999

due to the COVID -19 pandemic and

moratorium permitted by RBI


of India vide Circular No. SEBI/HO/MIRSD/

CRADT/CIR/P/2020/ 53 dated March 30, 2020]

Credit Rating Agencies, considering the COVID-

19 pandemic, have been ask to take into

consideration the RBI Circular for moratorium

before recognizing default including issuing press

releases and disclosure on website.

7. Extension of deadline for implementation of

the circular on Stewardship Code for all Mutual

Funds and all categories of AIFs due to the

CoVID-19 pandemic



CMD1/CIR/P/2020/55 dated March 30, 2020]

The implementation of Circular on Stewardship

Code has been extended since it challenging,

inter-alia, to i) effectively monitor and intervene at

appropriate situations with the management of

the investee companies; ii) engage with the boards

of the investee companies.

8. Relaxation in compliance with requirements

pertaining to Portfolio Managers, AIFs and

VCFs


of India vide Circulars No. SEBI/HO/IMD/DF1

/CIR/P/2020/57 and SEBI/HO/IMD/DF1 /CIR/ P/

2020/58 dated March 30, 2020]

Portfolio Managers, Alternate Investment Funds

and Venture Capital Funds have been granted an

extension of two months for filing their monthly

compliances for the months ending on March 31,

2020 and April 30, 2020. Applicability of SEBI

Circular SEBI/HO/IMD/DF1/CIR/P/2020/26 dated

February 13, 2020 on 'Guidelines for Portfolio

Managers' has also been extended for a period of

two months.

9. Relaxation in adherence to prescribed

timelines issued by SEBI due to Covid 19


of India vide Circular No. SEBI/HO/MIRSD/

RTAMB/CIR/P/2020/59 dated April 13, 2020]

In view of the marginal / skeleton staff available

with RTAs in light of the nationwide lockdown,

RTAs have been granted an additional time of 21

days to process various activities / investor

requests / compliance.

10. Relaxation in timelines for compliance with

regulatory requirements by trading members /

clearing members


of India vide Circular No. SEBI/HO/MIRSD

/DOP/CIR/P/2020/61 dated April 16, 2020]

Due to COVID-19 pandemic and extended

lockdown period, the due dates for various

compliances to be made by Trading Members and

Clearing Corporations have been extended till

May 31, 2020 or June 30, 2020 depending on the

original reporting due date.

VOL. 23 - NO. 11 - MAY 2020

35


11. Relaxation in time period for certain activities

carried out by depository participants, RTAs /

issuers, KRAs, stock brokers


of India vide Circular No. SEBI/COVID-

19/2020/01 dated April 16, 2020]

Keeping in view the situation arising due to the

extended lockdown, the period between March

23, 2020 till May 17, 2020 will not be considered

in calculation of time limits for processing of the

demat request form by Issuer / RTA / Participants

and KYC application form and supporting

documents of the clients to be uploaded on

system of KRA within 10 working day.

12. Additional relaxations / clarifications in

relation to compliance with certain provisions

of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 ('LODR') due

to the COVID – 19 pandemic



CMD1/CIR/P/2020/63 dated April 17, 2020]

SEBI has granted various relaxations in respect of

disclosures to be made by listed companies with

respect to prior intimation to stock exchanges

about meetings of the board, intimation to stock

exchanges regarding loss of share certificates

and issue of the duplicate certificates and usage

of digital signature.

CORPORATE LAW

A. RULES

1. Companies (Meetings of Board and its Powers)

Amendment Rules, 2020.

[Issued by Ministry of Corporate Affairs vide

Notification No. G.S.R. ___(E) dated March 19,

2020]

The existing rule 4 has been renumbered as 4(1)

and a new sub-rule 4(2) has been inserted which

permits board meetings between the period

March 19, 2020 till June 30, 2020 to be held

through video conferencing and other audio

visuals means in accordance with rule 3 of the

said Rules.

B. CIRCULARS

1. Clarification on spending of CSR funds for

COVID-19.


General Circular No. 10/2020 dated March 29,

2020]

The Central Government has clarified that

amounts spend for COVID-19 is eligible for CSR

activity. Funds spent for various activities such as

promotion of healthcare, including preventive

health care, sanitation and disaster management

in relation to COVID-19 will be considered for

CSR activity.

2. Special Measures under Companies Act, 2013

(CA-2013) and Limited Liability Partnership

Act, 2008 in view of COVID-19 outbreak



2020]

MCA has granted various relaxations such as:

'

Fresh Start Scheme' to be launched;

One time relaxation of gap between two board

meetings extended from 120 days to 180 days;

CARO 2020 shall become applicable from FY

2020-21 instead of FY 2019-20;

If Independent Directors have not held a meeting

amongst themselves as prescribed under

Companies Act, 2013 then it will not be

considered as a violation. However, they may

circulate their views amongst themselves through

telephone or email, or any other mode of

communication, if they

Requirement of creation of deposit repayment

reserve of 20% of deposits maturing during FY

2020-21 before April deem it necessary;

30, 2020 has been extended to June 30, 2020;

Requirement to invest or deposit 15% of amount

of debentures maturing in specified methods of

investment till April 30, 2020 may be now

complied till June 30, 2020;

New incorporated Companies are now granted

additional 180 days for filing declaration of

Commencement of Business over and above the

existing 180 days; and

VOL. 23 - NO. 11 - MAY 2020

36


Non-compliance of minimum residency in India

for a period of at least 182 days by at least one

director of every company, shall not be treated as

a non-compliance for the financial year 2019-20.

3. Companies Fresh Start Scheme, 2020 (CFSS-

2020)



2020]

MCA has introduced 'Companies Fresh Start

Scheme 2020' to enable companies make good of

any filing-related defaults, irrespective of

duration of default, and make a fresh start as a

fully compliant entity. It also allows inactive

companies to apply for Dormant Company status

as well as Strike-off of name of the Company.

4. Modification to LLP Scheme 2020



2020]

The Scheme shall now commence from April 1,

2020 and will be remain operational till

September 30, 2020.

5. Clarification on passing of ordinary and

special resolutions by companies under the

Companies Act, 2013 and rules made

thereunder on account of the threat posed by

Covid-19.


General Circular No. 14/2020 dated April 8,

2020]

MCA has prescribed the manner in which extra-

ordinary general meetings may be conduct in case

if the company considers that the EOGM is

unavoidable.

6. COVID-19 related FAQs on CSR


General Circular No. 15/2020 dated April 13,

2020]

The Ministry has been receiving several

references/ representations from various

stakeholders seeking clarifications on eligibility

of CSR expenditure related to COVID-19

activities. In this regard, a set of FAQs along with

clarifications have been issued for better

understanding of the stakeholders.

7. Filings under section 124 and section 125 of

the Companies Act 2013 read with IEPFA

(Accounting, Audit, Transfer and Refund)

Rules 2016 in view of emerging situation due

to outbreak of COVID– 19.



2020]

Stakeholders had raised concern over inability to

undertake compliance for transfer of money

remaining unpaid or unclaimed for a period of

seven years in terms of provision of section 124(5

of CA 2013 and transfer of shares in terms of

section 124(6) of CA 2013.

MCA has clarified that the relaxations granted

vide General Circular no. 11/2020 dated March

30, 2020 and General Circular No. 12/2020 of

even date cover such activities and hence the

stakeholders are request to plan their actions

accordingly.

C. NOTIFICATIONS

1. CARO 2020 dated 24.03.2020


Notification No. 1219(E) dated March 24,

2020]

The date for implementation of CARO 2020 shall

now be considered as April 01, 2020 instead of

April 01, 2019.

THE COMPANIES (AMENDMENT) BILL, 2020

various amendment to Companies Act, 2013 was

introduced in Lok Sabha on March 17, 2020.

VOL. 23 - NO. 11 - MAY 2020

37

CA Manoj Chunilal Shah CA Viral Vinod Satra

Compiled by:FEMAUPDATES


Review of FDI Policy for curbing opportunistic takeovers/acquisitions of Indian Companies due to

current COVID 19 pandemic

DIPP Press Note No. 3 (2020 Series) dated April 17, 2020

In order to curb opportunistic takeovers and acquisitions of Indian companies due to COVID 19 pandemic,

government of India has decided to review FDI Policy for making investment in India and has decided to

amend para 3.1.1 of extant FDI Policy circular as under:

Revised Position:

Para 3.1.1:

3.1.1(a) A non-resident entity can invest in India, subject to FDI Policy except in those sectors/activities which

are prohibited. However, an entity of a country, which shares land border with India or where beneficial owner

of an investment into India is situated in or is a citizen of any such country, can invest only under Government

Approval Route. Further a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the

Government route in sectors/activities other than defence, space, atomic energy and sectors/activities

prohibited for foreign investment.

3.1.1(b) In the event of transfer of ownership of any existing or future FDI in an entity in India, directly or

indirectly, resulting in the beneficial ownership falling within the restriction/purview of the para 3.1.1(a) such

subsequent change in beneficial ownership will also require Government approval.

Comments: Previously foreign investment by an entity of Bangladesh or citizen of Bangladesh was

under government approval route. However, with outbreak of COVID 19 pandemic to protect

opportunistic takeovers/acquisitions of Indian Companies government has brought this change in FDI

Policy. Accordingly, it has been decided that any foreign investment by an entity or citizen of any

country connected through land border with India or beneficial owner of investment is situated in any

country connected with land border to India will require prior government approval.

Settlement System under Asian Clearing Union (ACU) Mechanism

A.P. (DIR Series) Circular No. 22 dated March 17, 2020

Board members of ACU have decided to permit Japanese Yen for settling payments among ACU member

countries. Asian Monetary Unit is now denominated as “ACU Dollar”, “ACU Euro” and “ACU Yen” which shall be

equivalent to One US Dollar, ON Euro and One Japanese Yen respectively.

thWith effect from 6 March 2020 participants in ACU will have to settle their transactions in either ACU Dollar

or ACU Euro or ACU Yen.

VOL. 23 - NO. 11 - MAY 2020

38


Investment by Foreign Portfolio Investors (FPI): Investment Limits


The limit for FPI investment in corporate bonds is increased 15% of outstanding stock for FY 2020-21. The

revised limits for FPI investment in corporate bonds shall be as under:

Limits for FPI in Corporate Bonds for FY 2020-21 (Rs. In crore)

Current FPI Limit 3,17,000

Revised limit for HY Apr 2020 – Sep 2020 4,29,244

Revised limit for HY Oct 2020 – Mar 2021 5,41,488

The revised limits for FPI investment in Central Government Securities (G-Sec) and State Development Loans

(SDLs) for FY 2020-21 will be advised separately. Till such time, the current limits (given below) shall

continue:

Limits for FPI Investments in G-Sec and SDLs (Rs. In crore)

G-Sec

General

G-Sec

Long Term

SDL

General

SDL Long Term

FPI Investment Limits 2,46,100 1,15,100 61,200 7,100

Fully Accessible Route (FAR) for investment by Non-residents in Government securities


Certain specified categories of Central Government securities would be opened fully for non-resident

investors without any restriction apart from being available to domestic investors as well. Accordingly, a new

route is introduced known as Fully Accessible Route (FAR) for investment by non-residents in securities

issued by GOI.

The detailed scheme can be accessed from the following link:

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11849&Mode=0#AN1

Realization and Repatriation of Exports proceeds – Relaxation

A.P. (DIR Series) Circular No. 27 dated April 01, 2020

In view of the outbreak of pandemic COVID – 19 it has been decided to extend the period of realization and

repatriation of full value of exports of goods or software or services from 9 months to 15 months with regards

to exports made up to or on July 31, 2020.

The provisions in regard to period of realization and repatriation to India of the full export value of goods

exported to warehouses established outside India remain unchanged.

(Comments: Presently export proceeds need to be realized and repatriated to India within 9 months. However, stconsidering the COVID 19 pandemic, for exports made up to 31 July 2020 period of realization and

repatriation shall be 15 months instead of 9 months).

VOL. 23 - NO. 11 - MAY 2020

39


Rupee Drawing Arrangement: Remittance to PM CARES Fund

A.P. (DIR Series) Circular No. 28 dated April 03, 2020

In wake of the outbreak of pandemic COVID – 19 it has been decided to permit receipt of foreign inward

remittances from non-residents through non-resident exchange houses in favour of 'Prime Minister's Citizen

Assistance and Relief in Emergency Situations (PM-CARES)' subject to condition that AD Cat-I Banks shall

directly credit the remittances to the fund and maintain full details of the remitters.

Extension of Foreign Trade Policy

stNotification No. 57/2015-2020 dated 31 March, 2020 issued by Department of Commerce, Directorate

General of Foreign Trade

The existing Foreign Trade Policy (FTP 2015-2020) which was valid up to31st March, 2020 is now being

extended up to 31st March, 2021.

Various other changes such as extending the date of exemption by 1 year and extending validity of DFIA and

EPCG authorization for import purposes, etc.

Liberalization of FDI Policy relating to Air Transport Services in Civil Aviation Sector

Press Note No. 2 dated March 19, 2020 issued by Department of Promotion of Industry and Internal

Trade (DPIIT)

The consolidated FDI Policy of 2017 has been amended to liberalize FDI Policy relating to the Civil Aviation

Sector in Air transport Services.

The said amendments will take effect from the date of FEMA notification.

The detailed conditions of Press Note No. 2 can be accessed from the following link:

https://dipp.gov.in/sites/default/files/pn2_2020.pdf

Sector/ Activity % of Equity/ FDI Entry route

1(a) Scheduled Air Transport

Services/ Domestic Scheduled

Passenger Airline

(b) Regional Air Transport Services

100% Automatic Up to 49%

(Automatic up to 100%

for NRIs)

Government route

beyond 49%

Non-Scheduled Air Transport

Services

100% Automatic

Helicopter Services/ Seaplane

Services requiring DGCA approvals

100% Automatic

VOL. 23 - NO. 11 - MAY 2020

40


Compiled by:

CA Ashwin Bhawanji Shah

RERA

UPDATESUPDATE ON REAL ESTATE (REGULATION &

DEVELOPMENT) ACT , 2016

Section 6 of Real Estate ( Regulation and

Development ) Act, 2016 - “ Force Majeure.”

The expression force majeure shall mean a case of

war, flood, draught, fire, cyclone, earthquake, or any

other calamity caused by nature affecting the regular

development of the project.

Project extension shall be allowed for all such force

majeure period which were prevailing during the

project development phase.

However, it does not include the following :-

a. Restrictive order of any Court or Authority

b. Factors beyond the control of promoter

c. Delay in approval by any competent authority

The current situation on account of CORONA

outbreak is certainly natural calamity and is very

much covered by force majeure condition.

Maharashtra Real Estate Regulatory Authority

vide its order no. 13 dated 02-04-2020 in exercise

of powers vested in Section 34 of the Act has

decided that :-

For all MahaRERA Registered projects where

completion date, revised completion date or

extended completion date expires on or after

15th March 2020, the period of validity for

registration of such projects shall be extended by

three months. MahaRERA shall accordingly

issue project registration certificates, with

revised timelines for such projects, at the

earliest.

Further, the time limits of all statutory

compliances in accordance with the Real Estate

(Regulation and Development) Act, 2016 and the

rules and regulations made thereunder, which

were due in March / April / May are extended to

30th June 2020.

Further, vide various clarification MahaRera

Authority has extended the date of hearing to

subsequent period and office of MahaRera and

Maharashtra Appellate Tribunal shall remain closed rdtill 3 May 2020.

It , therefore, follows that extension or relaxation

shall be available for various compliances including

filing of Complaint/Appeal and submission of hard

copies with Authority/Tribunal.

Promoter shall be entitled to claim force majeure thperiod up to 30 June 2020 for delay in completion of

projects and such other compliances that are

required to be done by the Promoter.

However, Real Estate Industry is demanding through

various representation that these force majeure

period shall be extended to One Year at least and

further shall be reviewed depending upon the

conditions prevailing on account of CORONA

outbreak.

VOL. 23 - NO. 11 - MAY 2020

41


Compiled by:

CA Haresh Padamshi Kenia

DIRECT TAXES

LAW UPDATE

Announcements of relief measures relating to

statutory and regulatory compliance matters

across sectors made by Union Finance Minister

vide Press Release dated 24.03.2020 in view of

COVID-19 outbreak

The outbreak of Novel Corona Virus (COVID-19)

across many countries of the world has caused

immense loss to the lives of people, and

accordingly, it has been termed as pandemic by

the World Health Organisation and various

Governments including Government of India.

Social distancing has been unequivocally

accepted to be the best way to contain its spread,

leading to announcement of complete lockdown in

the country. Keeping in view the challenges faced

by taxpayers in meeting the compliance

requirements under such conditions, the Union

Finance Minister had announced several relief

measures relating to statutory and regulatory

compliance matters across sectors in view of

COVID-19 outbreak on 24.03.2020 vide a press

release.

Some of the important features and time limits

which get extended by this PRESS NOTE are as

under ;-

Due date extension: The last date to file ITRs for

FY 18-19, extended to 30th June 2020 instead of

31st March 2020. For delayed payments of tax

made till 30th June 2020, penal interest reduced

from 12% to 9%.

Aadhaar-PAN linking due date extended to the

30th June 2020.

The date for making various investment/payment

for claiming deduction under Chapter-VIA-B of IT

Act which includes Section 80C (LIC, PPF, NSC

etc.), 80D (Mediclaim), 80G (Donations), etc. has thbeen extended to 30 June, 2020. Hence the

investment/payment can be made up to

30.06.2020 for claiming the deduction under

these sections for FY 2019-20.

The date for making investment/ construction/

purchase for claiming roll over benefit/deduction

in respect of capital gains under sections 54 to th54GB of the IT Act has also been extended to 30

June 2020. Therefore, the investment/ construc-

tion/ purchase made up to 30.06.2020 shall be

eligible for claiming deduction from capital gains

arising during FY 2019-20

The date for commencement of operation for the

SEZ units for claiming deduction under

deduction 10AA of the IT Act has also extended to

30.06.2020 for the units which received

necessary approval by 31.03.2020.

Due dates for issue of notice intimation/ notifica-

tion/approval order/sanction order/filing of

appeal/applications/reports any other documents

and time limit for completion of proceedings by

the authority and any compliance by the taxpayer

including investment in saving instruments or

investments for roll over benefit of capital gains

under Income Tax Act, Wealth Tax Act, Prohibition

of Benami Property Transaction Act, Black Money

Act, STT law, CTT Law, Equalization Levy law,

Vivad Se Vishwas law where the time limit is

expiring between 20th March 2020 to 29th June

2020 shall be extended to 30th June 2020.

It has provided that reduced rate of interest of 9%

shall be charged for non-payment of Income-tax

(e.g. advance tax, TDS, TCS) Equalization Levy,

Securities Transaction Tax (STT), Commodities

Transaction Tax (CTT) which are due for payment

from 20.03.2020 to 29.06.2020 if they are paid by

30.06.2020. Further, no penalty/ prosecution

shall be initiated for these non-payments.

VOL. 23 - NO. 11 - MAY 2020

42


Under Vivad se Vishwas Scheme, the date has also

been extended up to 30.06.2020. Hence,

declaration and payment under the Scheme can

be made up to 30.06.2020 without additional

payment.

In order to give effect to the announcements made

by the Union Finance Minister vide Press Release

dated 24.03.2020, regarding several relief

measures relating to statutory and regulatory

compliance matters across sectors in view of

COVID-19 outbreak, the govt has brought in an

Ordinance on 31.03.2020 which provides for

extension of various time limits under the

Taxation and Benami Acts. It also provides for

extension of time limits contained in the Rules or

Notification which are prescribed/issued under

these Acts.

The Ordinance also made the another important

announcement with respect to PM CARES FUND

as under ;-

A special fund “Prime Minister's Citizen Assistance

and Relief in Emergency Situations Fund (PM

CARES FUND)” has been set up for providing relief

to the persons affected from the outbreak of

Corona virus. The Ordinance also amended the

provisions of the Income-tax Act to provide the

same tax treatment to PM CARES Fund as available

to Prime Minister National Relief Fund. Therefore,

the donation made to the PM CARES Fund shall be

eligible for 100% deduction under section 80G of

the IT Act. Further, the limit on deduction of 10% of

gross income shall also not be applicable for

donation made to PM CARES Fund.

As the date for claiming deduction u/s 80G under

IT Act has been extended up to 30.06.2020, the

donation made up to 30.06.2020 shall also be

eligible for deduction from income of FY 2019-20.

Hence, any person including corporate paying

concessional tax on income of FY 2020-21 under

new regime can make donation to PM CARES Fund

up to 30.06.2020 and can claim deduction u/s 80G

against income of FY 2019-20 and shall also not

lose his eligibility to pay tax in concessional

taxation regime for income of FY 2020-21.

The press note dated 24.03.2020 and Ordinance

dated 31.03.2020 also contained the similar relief

measures with respect to indirect taxes and the

same are not dealt with here.

Applications by payee u/s 195 and 197/

206C(9) for Lower rate or Nil rate of deduction /

collection for financial year 2020-21. – CBDT

ORDER u/s119 of income Tax Act

1. Due to Outbreak of the Pandemic Covid -19

virus, there is severe disruption in the normal

functioning of all including income tax

department. The applications filed by the payee

for financial year 2020-21 for lower rate of

Deduction / Collection u/s 195, 197 /206C (9) for

financial year could not be attended by TDS / TCS

Officers causing hardship to the Tax Payers.

Considering the constraints of the field officers

and to mitigate the hardship of tax payees, the

CBDT vide order dated 31.03.2020 , has issued

the following directions / clarifications exercising

its power u/s 119 of the act.

2. The following clarifications are issued.

a) All the assesses who have filed application for

lower or nil deduction of TDS/TCS on the Traces

Portal for F.Y.2020-21 and whose applications are

pending for disposal as on date and they have

been issued such certificates for FY 2019-20,

then such certificates would be applicable till

30.06.2020 of F.Y. 2020-21 or disposal of their

applications by the Assessing Officers, whichever

is earlier, in respect of the transaction and the

deductor or collector if any, for whom the

certificate was issued for F.Y. 2019-20.

b) In cases where the assessees could not apply for

issue of lower or nil deduction of TDS/TCS in the

Traces Portal for the FY 2020-21, but were having

the certificates for F.Y. 2019-20, such certificate

will be applicable till 30.06.2020 of F.Y, 2020-21.

However, they need to apply at the earliest giving

d e t a i l s o f t h e t r a n s a c t i o n s a n d t h e

Deductor/Collector to the TDS/TCS Assessing

Officer as per procedure laid down in sub-para c)

below, as soon as normalcy is restored or

30.06.2020, whichever is earlier.

VOL. 23 - NO. 11 - MAY 2020

43


c) In cases where the assessee has not applied for

issue of lower or nil deduction of TDS / TCS in

the Traces Portal, and he is also not having any

such certificate for FY 2019-20, a modified

procedure for application and consequent

handling by the TDS/TCS Assessing Officer is

laid down which is as under .

Application for Lower/Nil Deduction Certificate:

The applicant shall apply for the Lower / Nil

deduction / collection certificate under sections 197 /

206C(9) of the Income Tax Act vide an e-mail

addressed to the Assessing Officer concerned. The

e-mail shall contain data/documents as under:

Duly filled in Form 13 (Annexure I and/or

Annexure III)

The documents/information as required to be

uploaded on TDS-CPC website while filling up of

Form 13

Projected Balance Sheet and P&L account of FY

2020-21

Provisional Balance Sheet and P&L account of FY

2019-20

Balance Sheet and P&L account of FY 2018-19

For 26AS for FY 2019-20 & 2018-19

ITR pertaining to FY 2018-19

For issue of certificates for lower/ nil deduction of tax

under sections 195(2) and 195(3), the process of

furnishing of applications will continue to be same

with the modification that the applications will be

filed via email and certificates will also be issued via

email.

Issuance of the Certificate: The certificate(s) shall

be issued up to 30.06.2020 or any other date (earlier

than 30.06.2020) as specified by the AO. The

Assessing Officer shall communicate the issuance of

certificate vide mail containing specified information

as per format specified. :

d) On payments to Non-residents (including foreign

companies) having Permanent Establishment in

India and not covered by (a) and (b) above, tax on

payments made will be deducted at the rate of

10% including surcharge and cess, on such

payments till 30.06.2020 of F.Y. 2020-21, or

disposal of their applications, whichever is

earlier.

Applications by payee u/s 195 and 197/


collection for financial year 2019-20. – CBDT

ORDER u/s119 of income Tax Act

Due to Outbreak of the Pandemic Covid -19


functioning of all including income tax

department. The applications filed by the payee

for lower rate of Deduction / Collection u/s 195,

197 /206C (9) for financial year 2019-20 could not

be attended in timely manner by TDS / TCS

Officers. This may cause genuine hardship to the

payees and buyers/licensees/lessees who have

raised the invoice in FY 2019-20 but have not

received the payment for the same till date. As

payees and buyers/licensees/lessees were not able

to intimate the rate of deduction/collection on

such amount to the payer and seller/licensor

/lessor, this has created uncertainty about the rate

at which the tax is to be deducted/collected by the

payer and seller/licensor/lessor at the time of

crediting/debiting the amount in his books of

account for FY 2019-20. Considering the

constraints of the field officers and to mitigate the

hardship of tax payees, the CBDT vide order

dated 03.04.2020 , has issued the following

directions / clarifications exercising its power u/s

119 of the act.

In All the cases where assesses (payees or

buyers/licensees/lessees) have timely filed

application for lower or nil deduction of TDS/TCS

on the TRACES Portal for F.Y.2019-20 and such

applications are pending for disposal as on date,

the applicant shall intimate, vide an e-mail

addressed to the Assessing Officer concerned, the

pendency of such applications for FY 2019-20 for

the lower/nil deduction/collection certificate

under sections 195, 197 or 206C(9) of the

Income-tax Act along with the required

documents and evidences of filing their

application in TRACES Portal.

VOL. 23 - NO. 11 - MAY 2020

44


The Assessing Officer shall dispose of the

applications by 27.04.2020 and communicate to

the applicant regarding the issuance/rejection of

certificate vide email. The certificate issued for

lower/nil rate TDS or lower TCS shall be

applicable for the amount credited/debited during

the FY 2019-20 after the date of making of

application u/s 195,197 or 206C(9) but remained

unpaid or not received till the date of issuance of

the certificate by the Assessing Officer.

Issuance of certificate u/s 195 and 197/


collection –Clarification on order dated

31.03.2020 and 03.04.2020 issued u/s119. –

CBDT clarification.

Representations have been received, seeking

further clarifications on orders dated 31.03.2020

and 03.04.2020 issued under section 119 of the

Act by CBDT regarding issuance of certificate for

lower rate/nil deduction/collection of TDS/TCS

u/s 195,197 and 206C (9) of the Act. The matter

has been examined in the Board and following

clarifications w.r.t. above are issued vide CBDT

Order dated 09.04.2020.:

Issue of validity period of lower/nil deduction

/collection certificates of F.Y. 2019-20:

For the purpose of Para 2 (a ) and 2 (b) of the order

dated 31.03.2020, the lower/nil deduction

/collection certificates will be valid for the

particular period for which these were issued for

F.Y. 2019-20 and also for further period from

01.04.2020 to 30.06.2020 for F.Y. 2020-21

subject to conditions as mentioned in the order

dated 31.03.2020. For example, if a certificate

was issued for a period from 01.10.2019 to

15.12.2019, the same shall be valid for F.Y. 2019-

20 for the period from 01.10.2019 to 15.12.2019,

and for F.Y. 2020-21 the same shall be valid from

01.04.2020 to 30.06.2020 subject to conditions

as mentioned in the order dated 31.03.2020.

Issue of threshold/transaction limit for

lower/nil deduction/collection certificates of

F.Y. 2019-20:

For the purpose of Para 2 (a) and 2 (b) of the order

dated 31.03.2020, threshold/transaction limit

mentioned in lower/nil deduction /collection

certificate issued for F.Y. 2019-20 will be taken fresh

for period from 01.04.2020 to 30.06.2020 for F.Y.

2020-21 and the amount of threshold limit will be the

same as was assigned for these certificates for F.Y.

2019-20 subject to other conditions mentioned in the

order dated 31.03.2020.

Issue of approval and communication of

lower/nil deduction/collection certificates

Official emails or other electronic communication

may be used by field authorities of Income Tax

Department for internal approval for issue of

lower/nil deduction/collection certificates and for

communication of the same.

Issue of new/different TAN mentioned for

lower/nil deduction/collection application for

FY 2020-21 or revision of rates mentioned in

certificates of FY 2019-20:

In case the payee or buyer/licensee/lessee

taxpayer had a certificate for lower deduction for

FY 2019-20 and an application has been made for

FY 2020-21 for a new / different TAN mentioned

in the application, the relaxation as provided in

Para 2(a) and 2(b) of the order dated 31.03.2020

shall not apply to such cases and they have to

apply afresh as per procedure, mentioned in para

(c) of the above mentioned order. Similarly, if the

rates of TDS/TCS mentioned in old certificates

are higher and the taxpayer wants revision of the

rates in view of impact of Covid-19 outbreak on

its business, the relaxation as provided in Para

2(a) and 2(b) of the order dated 31.03.2020 shall

not apply to such cases and they will have to

follow the procedure mentioned in the annexure

of the above mentioned order and apply afresh.

VOL. 23 - NO. 11 - MAY 2020

45


Submission of Form 15G and 15H for Financial

Year-2020-21 – Order u/s 119 of Income Tax

Act

Due to Outbreak of the Pandemic Covid -19


functioning of all including functioning of

Banks,other Financial institutions etc. In view of

such situation there can be instances that some

eligible persons may not be able to submit the

Form 15G and 15H timely to the Banks, other

Institutions etc. This would result into the

deduction of TDS by the Banks and other

Institutions even where there is no tax liability. To

mitigate the genuine hardship of such persons,

the CBDT issues fo l lowing direct ions/

clarifications by exercise of its powers u/s 119 of

the Act.

In case if a person had submitted valid Forms 15

and 15H to the Banks or other Institutions for F.Y.

2019-20, then these Form 15G and 15H will be

valid up to 30.06.2020 for FY 2020-21 also. It is

reiterated that the payer who has not deducted tax

on the basis of said Forms 15G and 15H, shall

require to report details of such payments/credits

in the TDS statement for the quarter ending

30.06.2020 in accordance with the provisons of

rule 31A(4)(vii) of the Income-tax Rules, 1962

Clarification regarding short deduction of

TDS/TCS due to increase in rates of surcharge

by Finance (No.2) Act, 2019

The finance (No 2 ) Act, 2019 provided for

increase in rate of surcharge from 15 % to

25%/37% as the case may be. The Finance (No.2)

Bill,2019 was tabled in Lok Sabha on 5th July,

2019 which was passed by both the houses of

Parliament and became Finance (No.2) Act, 2019

which received assent of the President on 1st

August, 2019 The enhanced rates of surcharge

were applicable from the 1st day of April, 2019 for

previous year 2019-20 relevant to assessment

year 2020-21

Several instances have come to the notice of the

Central Government wherein deductors/

collectors were held to be an assessee in default

for short deduction of TDS/short collection of

TCS in cases where final transaction was done

before laying of the Finance (No.2) Bill, 2019 in

the Parliament, i.e. 5th July, 2019. Since the

transaction was completed before the rates of

enhanced surcharge were announced, it has been

requested that in such cases, deductor or

collector should not be held to be an assessee in

default under section 201 of the Income-tax Act.

The above issue has been examined by the Board

and in this regard, it is clarified a person

responsible for deduction/collection of tax under

any provision of the Income-tax Act will not be

considered to be an assessee in default in respect

of transactions where:

Such transaction has been completed and entire

payment has been made to the deductee/payee on

or before 5th July, 2019 and there is no

s u b s e q u e n t t r a n s a c t i o n b e t w e e n t h e

deductor/collector and the deductee/payee in the

financial year 2019-20 from which the shortfall of

tax could have been deducted/collected by the

deductor/collector;

TDS has been deducted or TCS has been

collected by such deductor/collector on such sum

as per the rates in force as per the provisions

prior to the enactment of the Act

Such tax deducted or collected has been

deposited in the account of Central Government

by the deductor/collector on or before the due

date of depositing the same

TDS/TCS statement has been furnished by such

person on before the due date of filing of the said

statement

However, if the person fails to fulfill any of the

conditions as laid down above, such a person

will, with respect to short deduction/collection,

not be eligible for benefit provided under this

circular.

Further, if the deductor/collector has deducted

/collected shortfall of tax after 5th of July, 2019

from the transaction(s) made subsequently after

VOL. 23 - NO. 11 - MAY 2020

46


the said date, interest, if any, for delay in

deduction/collection of such tax shall not be

levied.

The above relaxation does not absolve the

deductee/payee to pay proper tax including

enhanced surcharge by advance tax or self-

assessment tax and file return of income after

paying such tax.

TDS on Salaries - Clarification in respect of

option under section 115BAC of the Income-

tax Act, 1961

The CBDT Vide Circular no – C1 of 2020 dated

13.04.2020 clarified on the issue whether the

provisions of section 115BAC of the Act are to be

considered at the time of deducting tax on

payment of salary made to employees during

financial year 2020-21.

The Finance Act, 2020 w.e.f the assessment year

2021-22,inserted the provision of section 115BAC

which provided an option to pay concessional

rate of tax subject to the condition that the total

income shall be computed without specified

exemption or deduction, set off of loss and

additional depreciation It also provided that a

person, being an individual or a Hindu undivided

family having income other than income from

business or profession”, may exercise option in

respect of a previous year to be taxed under the

said section 115BAC along with his return of

income to be furnished under –section 139 (1) of

the Act for each year.

Representations expressing concern regarding

tax to be deducted at source (TDS) has been

received stating that as the option is required to be

exercised at the time of filing of return, the

deductor, being an employer, would not know if

the person, being an employee, would opt for

taxation under section 115BAC of the Act or not.

Hence, there is lack of clarity regarding whether

the provisions of section 115BAC of the Act are to

be considered at the time of deducting tax.

The CBDT vide circular no C1 of 2020 dated

13.04.2020 clarified that an employee, having

income other than the income under the head

"profit and gains of business or profession” and

intending to opt for the concessional rate under

section 115BAC of the Act, may intimate the

deductor, being his employer, of such intention for

each previous year and upon such intimation, the

deductor shall compute his total income, and

make TDS thereon in accordance with the

provisions of section 115BAC of the Act. If such

intimation is not made by the employee, the

employer shall make TDS without considering

the provision of section 115BAC of the Act.

It is also clarified that the intimation so made to

the deductor shall be only for the purposes of TDS

during the previous year and cannot be modified

during that year. However, the intimation would

not amount to exercising option in terms of sub-s

115BAC of the Act and the person shall be

required to do so along with the return to be

furnished under Section 139 (1) of the Act for that

previous year. Thus, option at the time of filing of

return of income under Section 139 (1) of the Act

could be different from the intimation made by

such employee to the employer for that previous

year.

It is further clarified that in case of a person who

has income under the head “profit and gains of

business or profession" also, the option for

taxation under section 115BAC of the Act once

exercised for a previous year at the time of filing of

return of income under Section 139 (1) of the Act

cannot be changed for subsequent previous years

except in certain circumstances

Accordingly, the above clarification would apply

to such person with a modification that the

intimation to the employer in his case for

subsequent previous years must not deviate from

the option under section 115BAC of the Act once

exercised in a previous year.

VOL. 23 - NO. 11 - MAY 2020

47


Compiled by:GST UPDATESGST UPDATES

CA Nitin Dhanji Kenia CA Bharat Kalyanji Gosar

NOTIFICATIONS - CENTRAL TAX:

Notification No. 10/2020 - Central Tax dated

21st March, 2020

The Notification seeks to provide special

procedure for taxpayers in Dadra and Nagar

Haveli and Daman and Diu consequent to

merger of two union territories.


21st March, 2020

The Notification seeks to provide special

procedure for corporate debtors undergoing the

corporate insolvency resolution process under

the Insolvency and Bankruptcy Code, 2016.


21st March, 2020

The Notification seeks to waive off the

requirement for furnishing FORM GSTR-1 for

2019-20 for taxpayers who could not opt for

availing the option of special composition

scheme under notification No. 2/2019-Central

Tax (Rate).


21st March, 2020

Provision relating to E invoicing applicable to a

Registered person whose aggregate turnover in a

financial year exceeds 100 crore rupees shall be

now operational with effect from 01/10/2020

instead of 01/04/2020.


21st March, 2020

An invoice issued by a specified registered

person, whose aggregate turnover in a financial

year exceeds five hundred crore rupees to an

unregistered person shall have Dynamic Quick

Response (QR) code. It is also provided that

where such registered person makes a Dynamic

Quick Response (QR) code available to the

recipient through a digital display, such B2C

invoice issued by such registered person

containing cross-reference of the payment using

a Dynamic Quick Response (QR) code, shall be

deemed to be having Quick Response (QR) code.

2. This is applicable from 01/10/2020.

Notification No. 15/2020 - Central Tax dated rd23 March, 2020

The Notification seeks to extend the time limit

for furnishing of the annual return specified

under Section 44 of CGST Act, 2017 for the

financial year 2018-2019 till 30.06.2020.


Following Rules are amended in The Central

Goods and Service Tax Rules, 2017. Rules are

effective from 23/03/2020.

Rule 8(4A): Vide this newly added sub rule,

authentication of Aadhar number is made

mandatory for filing application of registration.

This will be effective from 01/04/2020.

Proviso to Rule 9(1): The Proviso is added

effective from 01/04/2020. If authentication of

Addhar card number is not done at the time of

application of registration then the registration

will be granted only after physical verification of

place of business in the presence of applicant.

Maximum time limit of 60 days is provided for

granting registration.

Rule 25: By substituting this rule consequential

amendment is made to upload verification

report in Form GST REG-30 within 15 days

from physical verification of place of business.

Rule 43(1)© This sub clause is newly inserted

related to input tax in respect of capital goods.

Proviso to Rule 80(3): By adding this proviso, it

VOL. 23 - NO. 11 - MAY 2020

48


is now provided that for the financial year 2018-

2019, every registered person whose aggregate

turnover during the financial year 2018-2019

exceeds Rs. 5 crore shall get his accounts

audited under Section 35(5) and he shall furnish

a copy of audited annual accounts and a

reconciliation statement, duly certified, in

FORM GSTR-9C.

Rule 86(4A): In case a registered person has

wrongly paid any tax or has paid excess tax then

proper officer is entitled to give refund by

recredit to the electronic credit ledger by an

passing order in FORM GST PMT-03.

Rule 89(4)©In case of refund of tax in zero rated

supply of goods or services or both, for the value

of “Turnover of zero-rated supply of goods" shall

mean the value of zero-rated supply of goods

made during the relevant period without

payment of tax under bond or letter of

undertaking or the value which is 1.5 times the

value of like goods domestically supplied by the

same or, similarly placed, supplier, as declared

by the supplier, whichever is less, other than the

turnover of supplies in respect of which refund is

claimed under sub-rules (4A) or (4B) or both.

Rule 96B: The new Rule is inserted related to

Recovery of refund of unutilised input tax credit

or integrated tax paid on export of goods where

export proceeds not realized.

FORM GST RFD-01: The Form is amended to

include undertaking by tax payer for giving back

the amount of refund sanctioned along with

interest in case of non-receipt of foreign

exchange remittances as per the proviso to

section 16 of the IGST Act, 2017 read with rule

96B of the CGST Rules, 2017.


Authent icat ion of Aadhar number for

application of registration shall not be

applicable to a person who is not a citizen of

India. Further, it will not be applicable to a class

of persons other than (a) Individual; (b)

authorized signatory of all types; (c) Managing

and Authorized partner; and (d) Karta of Hindu

undivided family. The amendment is effective

from 01/04/2020.

Notification No. 18/2020 - Central Tax dated rd23 March, 2020 and


Provision of Section 25(6B) related to

authent icat ion of Aadhar number for

application of registration by an individual, and

Provision of Section 25(6C) related to

authent icat ion of Aadhar number for

application of registration by class of persons

viz., authorized signatory of all types, Managing

and Authorized partners of a partnership firm,

Karta of an Hindu undivided family is made



The time limit of return in FORM GSTR-7 by a

registered person who is required to deduct tax

at source under Section 51 of the CGST Act, for

the months of July, 2019 to October,2019, whose

principal place of business is in the erstwhile

State of Jammu and Kashmir is extended till

24/03/ 2020. It is further provided that The time

limit of return in FORM GSTR-7 by a registered

person who is required to deduct tax at source

under section 51 of the CGST Act, for the months

of November, 2019 to February, 2020, whose

principal place of business is in the Union

territory of Jammu and Kashmir or the Union

territory of Ladakh is extended till 24/03/ 2020.

This notification is effective from 20/12/2019.





Time limit for furnishing the details of outward

supply in FORM GSTR-1 for the quarters July-

September,2019 & October-December, 2019 by

registered persons whose principal place of

VOL. 23 - NO. 11 - MAY 2020

49


business is in the erstwhile State of Jammu and

Kashmir or the Union territory of Jammu and

Kashmir or the Union territory of Ladakh is

extended till 24/03/2020.

Similarly, time limit for furnishing the details of

outward supply in FORM GSTR-1 for registered

persons having aggregate turnover of more than

1.5 crore rupees in the preceding financial year

or current financial year, whose principal place

of business is in the erstwhile State of Jammu

and Kashmir or in the Union territory of Jammu

and Kashmir or the Union territory of Ladakh

for the months July, 2019 to February, 2020 is

extended till 24/03/2020.



Time limit for furnishing the return in FORM

GSTR-3B for registered persons, whose

principal place of business is in the erstwhile

State of Jammu and Kashmir or in the Union

territory of Jammu and Kashmir or the Union

territory of Ladakh for the months July, 2019 to

February, 2020 is extended till 24/03/2020.



Time limit for furnishing the details of outward

supply in FORM GSTR-1 by registered persons

having aggregate turnover of up to 1.5 crore

rupees in the preceding financial year or the

current financial year for the quarters April,

2020 to June, 2020 and July, 2020 to

September, 2020 shall be 31/07/2020 and

31/10/2020 respectively. Similarly, for registered

persons having aggregate turnover of more than

1.5 crore rupees in the preceding financial year

or the current financial year time limit for

furnishing the details of outward supply in

FORM GSTR-1 for the months from April, 2020 thto September, 2020 shall be 11 of the

succeeding month.

The time limit for furnishing the details or return

under section 38(2) for the months of April,

2020 to September, 2020 shall be subsequently

notified in the Official Gazette.


Notification No. 36/2020 - Central Tax dated rd3 April,2020

Time limit for furnishing return in GSTR 3B for

taxpayers having an aggregate turnover of up to

rupees five crore rupees in the previous financial

year, whose principal place of business is in the

States of Chhattisgarh, Madhya Pradesh,

Gujarat, Maharashtra, Karnataka, Goa, Kerala,

Tamil Nadu, Telangana, Andhra Pradesh, the

Union territories of Daman and Diu and Dadra

and Nagar Haveli, Puducherry, Andaman and

Nicobar Islands or Lakshadweep ,for the

months of April, 2020 to September, 2020 shall ndbe 22 day of the month succeeding such

month, However for the month of May, 2020 due

date shall be 12/07/2020. Further, time limit for

such return for such periods for taxpayers

whose principal place of business is in the States

of Himachal Pradesh, Punjab, Uttarakhand,

Haryana, Rajasthan, Uttar Pradesh, Bihar,

Sikkim, Arunachal Pradesh, Nagaland,

Manipur, Mizoram, Tripura, Meghalaya, Assam,

West Bengal, Jharkhand or Odisha, the Union

territories of Jammu and Kashmir, Ladakh, thChandigarh or Delhi, shall be 24 of the month

succeeding such month, However for the month

of May, 2020 due date shall be 14/07/2020.

Further, time limit for such return for such thperiods for taxpayers other above shall be 20 of

the month succeeding such month. However, for

taxpayers having an aggregate turnover of more

than rupees five crore rupees in the previous

financial year for the month of May, 2020 shall

be 27/06/2020.


Following rules are amended in The Central

Goods and Service Tax Rules, 2017. Rules are


Proviso to Rule 3(3): Time limit for furnishing

an intimation in FORM GST CMP-02 by any

registered person who opts to pay tax under

section 10 as composition person for the

financial year 2020-21 shall be upto 30/06/2020

and he shall furnish the statement in FORM GST

ITC-03 up to 31/07/ 2020. This new proviso is

added with effect from the 31/03/ 2020.

VOL. 23 - NO. 11 - MAY 2020

50


Rule 36(4): As per this Rule, maximum cap of

10 % of eligible ITC as per GSTR 2A has been put

on a registered tax payer for claiming ITC for

which suppliers have not uploaded invoices/

debit notes. Now, it is provided that the said

condition shall apply cumulatively for the period

February, March, April, May, June, July and

August, 2020 and the return in FORM GSTR-3B

for the tax period September, 2020 shall be

furnished with the cumulative adjustment of

input tax credit for the said months in

accordance with the condition stated above.

This new proviso is added with effect from the

03/04/2020.



Notification No. 03/2020 - Integrated Tax thdated 8 April, 2020.

If a taxpayer having an aggregate turnover of

more than rupees 5 crores in the preceding

financial year has furnished return for the

months of February, 2020, March 2020, April,

2020 in FORM GSTR-3B on or before the

24/06/2020, then rate of interest will be Nil for

first 15 days from the due date, and 9 per cent

thereafter.

# If a taxpayer having an aggregate turnover of

more than rupees 1.5 crore but up to 5 crores in

the preceding financial year has furnished

return for the months of February, 2020, March

2020 in FORM GSTR-3B on or before the

29/06/2020 and for the month of April, 2020, on

or before 30/06/2020 then rate of interest will be

Nil.

# If a taxpayers having an aggregate turnover up

to 1.5 crore in the preceding financial year has

furnished return for the months of February,

2020, March 2020, April,2020 in FORM GSTR-

3B on or before the 30/06/2020, 03/07/2020,

06/07/2020 respectively then rate of interest will

be Nil.

In all above categories, if return in GSTR 3B is

filed on or before due date mentioned above then

no late fee will be payable.


No late fee will be payable for the months of

March, 2020, April, 2020 and May, 2020 and for

the quarter ending 31st March, 2020, for the

registered persons who furnishes the said

details in FORM GSTR-1 on or before the 30th

day of June, 2020.


Time limit for furnishing the statement in FORM

GST CMP-08 by a registered person under

composition scheme, containing the details of

payment of self-assessed tax for the quarter

ending 31st March, 2020 is extended till

07/07/2020. The said persons shall furnish the

return in FORM GSTR-4 for the financial year

ending 31st March, 2020, till the 15/07/2020.


Time limit for completion or compliance of any

specified action, by any authority or by any

taxpayer falls during the period from 20/03/2020

to 29/06/2020, but such completion or

compliance is not made within such time, then

the time limit for completion or compliance of

such action is extended till 30/06/2020. Further

an e-way bill is generated where its period of

validity expires during the period 20/03/2020 to

15/04/2020 then the validity period of such e-way

bill is extended till the 30/04/2020.


Refer Notification No. 29/2020 - Central Tax rddated 23 March, 2020

NOTIFICATIONS - CENTRAL TAX- RATE:

Notification No. 02/2020 - Central Tax (Rate) thdated 26 March, 2020

Notification No. 02/2020 - State Tax (Rate) thdated 7 April, 2020.

Notification No. 02/2020 - Integrated Tax th(Rate) dated 26 March, 2020

The rate of GST on Maintenance, repair or

overhaul services in respect of aircrafts, aircraft

VOL. 23 - NO. 11 - MAY 2020

51


engines and other aircraft components or parts

with effect from 01/04/2020 shall be C + S = 2.5

% + 2.5 % or IGST 5 %.

NOTIFICATIONS – INTEGRATED TAX:

Notification No. 02/2020 - Integrated Tax thdated 26 March, 2020.

For the purpose of Section 13(13) of The IGST

Act, 2002, the place of supply of services shall be

the location of the recipient of service in case of

Supply of maintenance, repair or overhaul

service in respect of aircrafts, aircraft engines

and other aircraft components or parts supplied

to a person for use in the course or furtherance

of business. The notification is effective from

01/04/2020.

Notification No. 03/2020 - Integrated Tax thdated 8 April, 2020.

Refer Notification No. 31/2020 - Central Tax rddated 3 April,2020

CIRCULARS - CGST:

th Circular No. 132/02/2020 - GST- dated 18

March, 2020.

It is clarified that the time limit to make appeal/

application to the Appellate Tribunal will be

counted from the date on which President or the

State President enters office. It is directed to the

appellate authority while passing order that they

may mention in the preamble that appeal may be

made to the appellate tribunal whenever it is

constituted within three months from the

President or the State President enters office.

Accordingly, it is recommended to the appellate

authorities that they may dispose all pending

appeals expeditiously without waiting for the

constitution of the appellate tribunal.

rd Circular No. 133/03/2020 - GST- dated 23

March, 2020.

The Circular in details gives Clarification in

respect of apportionment of input tax credit

(ITC) in cases of business reorganization

(demerger/ transfer etc.) under Section 18 (3) of

CGST Act read with rule 41(1) of CGST Rules.


March, 2020.

The Circular in details gives clarification in

respect of issues under GST law for companies

under Insolvency and Bankruptcy Code, 2016.

st Circular No. 135/05/2020 - GST- dated 31

March, 2020.

The Circular has clarified on certain refund

related issues.


April, 2020.

The Circular in details clarifies in respect of

va r ious measures announced by the

Government for providing relief to the taxpayers

in view of spread of Novel Corona Virus (COVID-

19).

th Circular No. 137/07/2020 - GST- dated 13

April, 2020.

The Circular clarifies in respect of certain

challenges faced by the registered persons in

implementation of provisions of GST Laws.

Clarification is given for issues related to an

advance is received by a supplier for a service

contract which subsequently got cancelled,

refund claim when Goods supplied by a supplier

under cover of a tax invoice are returned by the

recipient, etc.

Disclaimer: The views / opinions expressed in the articles are purely of the writers. The readers are requested to take proper professional guidance before abiding the views expressed in the articles. The publisher, the editor and the association disclaim any liability in connection with the use of the information mentioned in the articles.

PRINTED AND PUBLISHED BY MANOJ SHAH ON BEHALF OF C.V.O. CHARTERED AND COST ACCOUNTANTS' ASSOCIATION - 304, JASMINE APARTMENT, DADA SAHEB PHALKE ROAD, DADAR (EAST), MUMBAI - 400014.TEL: 022-24105987. EDITOR: RAMESH CHHEDA

VOL. 23 - NO. 11 - MAY 2020

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