Dec 30, 2016

Final Date of Direct Tax Dispute Resolution Scheme is Extended upto 31 January

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In order to reduce the pending litigation, the Direct Tax Dispute Resolution Scheme, 2016 (the Scheme) was introduced by the Finance Act, 2016. The Scheme came into force from 1st June, 2016 vide notification S.O. 1902(E) dated 26th May, 2016. The scheme was to close on 31st December, 2016.

However, in view of the representations received from various stakeholders and for the convenience of the taxpayers, the last date for availing the Scheme has been extended up to 31st January, 2017 vide S.O. 4222(E) dated 29th December, 2016.
Final Date of Direct Tax Dispute Resolution Scheme is Extended upto 31 January

The full text of the notification is available on the departmental website www.incometaxindia.gov.in.
 (Meenakshi J. Goswami)
Commissioner of Income Tax
 (Media and Technical Policy)
 Official Spokesperson, CBDT.

CBDT Signs Two More Advance Pricing Agreements

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The Central Board of Direct Taxes (CBDT) has closed the year 2016 by entering into two more unilateral Advance Pricing Agreements (APAs) today.

The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA scheme has evinced a lot of interest from taxpayers and that has resulted in more than 700 applications (both unilateral and bilateral) being filed in just four years.
CBDT Signs Two More Advance Pricing Agreements

The two APAs signed today pertain to the Information Technology and Automobile sectors of the economy. The international transactions covered in these agreements include Software Development Services, IT enabled Services, Manufacturing and Business Support Services.

With this, the total number of APAs entered into by the CBDT has reached 117. This includes 7 bilateral APAs and 110 Unilateral APAs. In the current financial year, a total of 53 APAs (4 bilateral APAs and 49 unilateral APAs) have already been entered into. The CBDT expects more APAs to be concluded and signed in the near future.

The progress of the APA Scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner. The approach and functioning of the officers in the APA teams have been appreciated and acknowledged by the industry in India and abroad.
 (Meenakshi J. Goswami)
 Commissioner of Income Tax
 (Media and Technical Policy)
 Official Spokesperson, CBDT.

Dec 29, 2016

Explanatory Note on Pradhan Mantri Garib Kalyan Yojana

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The Taxation Laws (Second Amendment) Act, 2016 has been enacted by Parliament on 15.12.2016. The said Act has inter alia amended the provisions of Finance Act, 2016 and inserted a new Chapter on, ‘The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (hereinafter ‘the Scheme’) in the Finance Act, 2016.

2. The Scheme provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity (which includes banks, post office etc.) to declare such income and pay tax, surcharge and penalty totaling in all to 49.9 per cent. of such declared income. Besides, the Scheme provides that a mandatory deposit of not less than 25% of such income shall be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016(hereinafter ‘the PMGKY Deposit Scheme’) which has separately been notified by the Department of Economic Affairs. The Scheme has commenced on 17.12.2016 and shall remain open for declarations/deposit upto 31.03.2017.

Scope of the Scheme
3. A declaration under the aforesaid Scheme may be made in respect of any income in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017. No deduction in respect of any expenditure or allowance  or set-off of any loss shall be allowed against the income in respect of which a valid declaration is made under the Scheme.

Tax, surcharge, penalty & deposit under the Scheme
4. The person making a declaration under the Scheme would be liable to pay tax at the rate of thirty per cent. of the undisclosed income as increased by surcharge to be called the Pradhan Mantri Garib Kalyan Cess calculated at the rate of thirty-three per cent. of such tax. In addition, penalty at the rate of ten per cent. of the undisclosed income shall be payable.

The declarant shall also be required to deposit an amount not less than twenty-five per cent. of the undisclosed income in the PMGKY Deposit Scheme. The deposit shall bear no interest and the amount deposited shall have a lock-in period of four years. 

Time limits for declaration and making payment
5. A declaration under the Scheme can be made anytime on or after 17th December, 2016 but on or before 31st March, 2017. The tax, surcharge and penalty payable under the Scheme and deposit to be made in the Deposit Scheme, shall be paid/made before filing of declaration under the Scheme. The declaration shall be accompanied with proof of payment made in respect of tax, surcharge and penalty payable under the Scheme and proof of deposit made in the PMGKY Deposit Scheme.
Explanatory Note on Pradhan Mantri Garib Kalyan Yojana

Form for declaration
6. A declaration under the Scheme in Form-1 as prescribed in the Rules may be made at any time on or before 31.03.2017. After such declaration has been furnished, the notified Principal CIT/ CIT will issue an acknowledgment in Form-2 to the declarant within 30 days from the end of the month in which the declaration under Form-1 is made. 

Filing of declaration
7. A declaration under the Scheme can be filed:
(i) Electronically under digital signature with CIT(CPC) Bengaluru or jurisdictional Principal CIT/CIT notified under section 120 of the Income-tax Act, 1961.

(ii) Electronically through Electronic Verification Code (EVC) or in print form with jurisdictional Principal CIT /CIT notified under section 120 of the Income-tax Act, 1961.

Declaration not eligible in certain cases
8. The provisions of this Scheme shall not apply—
(a) in relation to any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 subject to the conditions specified under the Scheme.

(b) in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of MoneyLaundering Act, 2002;

(c) to any person notified under section 3 of the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992;

(d) in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Circumstances where declaration shall be invalid
9. A declaration shall be void and shall be deemed never to have been made where a declaration has been made by misrepresentation or suppression of facts or without payment of tax and surcharge or penalty or without depositing the requisite amount in the PMGKY Deposit Scheme, and in such cases all the provisions of the Income-tax Act, including penalties and prosecutions, shall apply accordingly.

Tax, etc., not refundable
10. Any tax, surcharge or penalty paid under the Scheme shall not be refundable under any circumstances.

Effect of valid declaration
11. Where a valid declaration as detailed above has been made, the following consequences will follow:
(a) The amount of undisclosed income declared shall not be included in the total income of the declarant under the Income-tax Act for any assessment year;

(b) A declarant under this Scheme shall not be entitled, in respect of undisclosed income or any amount of tax and surcharge paid thereon, to re-open any assessment or reassessment made under the Income-tax Act or the Wealth-tax Act, 1957, or to claim any set-off or relief in any appeal, reference or other proceeding in relation to any such assessment or reassessment

(c) The contents of the declaration shall not be admissible in evidence against the declarant for the purpose of any proceeding under any Act other than the Acts referred in Para- 8 above.
(Dr Thakur Singh Mapwal)
Under Secretary to the Government of India

Dec 27, 2016

Threshold Limit for ESI Applicability Increases to 21000

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Government hikes threshold limit for ESI applicability from Rs. 15000 to Rs. 21000. Full notification is as under.

Whereas certain draft rules further to amend the Employees’ State Insurance (Central) Rules, 1950 were published in the Gazette of India, Extraordinary, Part-II, section 3, sub-section (i) vide number G.S.R. 957(E), dated the 6th October, 2016, as required by sub-section (1) of section 95 of the Employees’ State Insurance Act, 1948 (34 of 1948), inviting objections and suggestions from all persons likely to be affected thereby before the expiry of a period of thirty days from the date on which the copies of the Official Gazette in which the said notification was published were made available to the public;

 And whereas, the copies of the said Official Gazette were made available to the public on the 6th October, 2016;

And whereas, objections and suggestions received from persons likely to be affected thereby have been considered by the Central Government;
Threshold Limit for ESI Applicability Increases to 21000

Now, therefore, in exercise of the powers conferred by section 95 of the said Act, the Central Government, after consultation with the Employees’ State Insurance Corporation, hereby makes the following rules further to amend the Employees’ State Insurance (Central) Rules, 1950, namely:-

1. (1) These rules may be called the Employees’ State Insurance (Central) Third Amendment Rules, 2016.

 (2) They shall come into force from 1st day of January, 2017.

2. In the Employees’ State Insurance (Central) Rules, 1950, in rule 50, for the words “fifteen thousand rupees” occurring at both the places, the words ‘twenty one thousand rupees” shall be substituted.

[F. No. S-38012/02/2013-SS-I]
RAJEEV ARORA, Jt. Secy.

Dec 26, 2016

CBDT Clarification on the Direct Tax Dispute Resolution Scheme 2016

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 The Direct Tax Dispute Resolution Scheme, 2016 (hereinafter referred to as ‘the Scheme’)
incorporated as Chapter X of the Finance Act, 2016 provides an opportunity to tax payers who are under litigation to come forward and settle the dispute in accordance with the provisions of the Scheme. The provisions of the Scheme have been clarified vide Circular No.33 of 2016 dated 12.09.2016. Subsequently, further queries have been received from the field authorities and other stakeholders. The Central Government has considered the queries and decided to clarify the same in the form of questions and answers as follows.-

Question No.1: There are cases where the Assessing Officer (AO) has made addition on account of provisions under section 9 of the Incometax Act, 1961 (the Act), which was later retrospectively amended, especially with regard to royalty and fees for Technical Services. What would be the position of the case of an assessee vis-à-vis the Scheme, where an addition has been made by AO before such retrospective amendment? Whether the case would be treated as one being in consequence of retrospective amendment and accordingly whether the assessee would be eligible to avail the benefit of the Scheme?
Answer: As per clause (g) of sub-section (1) of section 201 of the Finance Act, 2016, ‘specified tax’ includes a tax which is validated by an amendment made to the Income-tax Act with retrospective effect. Hence, a case where an addition has been made by AO before such retrospective amendment and the addition has got validated by such amendment, is eligible to avail the Scheme provided a dispute in respect of such addition/tax is pending as on 29.02.2016. 

Question No.2: There are assessees who have filed writ petitions in Courts against the constitutional validity of retrospective amendment to the Income-tax Act. Can the assessees who have filed such writs in Courts still contest the constitutional validity of such amendments, even after availing the benefit under the Scheme?
Answer: As per section 203(3)(a) of the Finance Act, 2016, where the declaration under the Scheme is in respect of specified tax and the declarant has filed any writ petition before the High Court or the Supreme Court against any order in respect of the specified tax, he shall withdraw such writ petition with the leave of the Court wherever required and furnish proof of such withdrawal along with the declaration filed under the Scheme. It is hence clear that if the assessee avails the Scheme, he cannot contest the constitutional validity of retrospective amendment in the High Court or Supreme Court.

Question No.3: There are cases where assessees are in different stages of appeal for different years on similar issue(s). In such a situation, if an assessee avails the benefits of the Scheme for a particular year/years, whether the revenue would withdraw its appeal against the assessee, in the year(s) in which the assessee has got the relief? If such is the case, at what stage would the revenue withdraw its appeal?
Answer: In respect of ‘tax arrear’, the Scheme is available only if dispute is pending before Commissioner (Appeals). Hence the question of withdrawal of appeal by revenue does not arise in such cases. In respect of ‘specified tax’, section 203(3) of the Finance Act, 2016 states that the declarant before opting for the said Scheme has to withdraw his pending appeal or writ petition. It also states that in a case where the declarant has initiated or given notice for proceeding of arbitration, conciliation or mediation, he shall withdraw such notice or claim prior to filing of the declaration under the Scheme. The Scheme nowhere speaks of withdrawal of any appeal or proceeding by the revenue. Hence, the question of withdrawal of appeal by the revenue owing to opting of the Scheme by the assessee in some other year(s) on a similar issue does not arise. 
CBDT Clarification on the Direct Tax Dispute Resolution Scheme 2016

Question No.4: Can the tax payments under the Scheme be allowed to be made in instalments, as granted under IDS, 2016?
Answer: Since, the date of making payment under the Scheme is provided in Section 204 of the Finance Act, 2016 itself, the tax payments under the Scheme cannot be allowed to be made in instalments.

Question No.5: Whether an assessee is eligible to make a declaration in respect of ‘specified tax’ where a dispute was pending as on 29.02.2016 in form of a reference made by AO before the Committee constituted by CBDT on 28.08.2014 under section 119 of the Act, but the final order determining the ‘specified tax’ thereon was passed after 29.02.2016, and the
appeal/writ/arbitration/conciliation/ mediation etc. in respect of the same was filed before commencement of the Scheme i.e. 01.06.2016?
Answer: As per the provisions of the Scheme, a declarant may make a declaration in respect of a ‘specified tax’ for which a dispute was pending as on 29.02.2016. The term ‘dispute pending as on 29.02.2016’ refers to the tax determined under the Income-tax Act or the Wealth-tax Act which has been disputed by the assessee. In the above referred case, the specified tax has been determined by AO after 29.02.2016; hence the question of dispute pending in respect of such tax as on 29.02.2016 does not arise. Therefore, the assessee in the present case is not eligible to avail the Scheme.

Question No.6: Whether a penalty order under section 271C or 271CA of the Income-tax Act for which an appeal is pending with CIT(Appeals) is covered under the Scheme?
Answer: As per the Scheme, ‘tax arrear’ in case of penalty is linked to the total income finally determined. Since, penalty order under section 271C or 271CA is not linked to the assessment proceedings, such orders are not covered under the Scheme.

Question No.7: Whether the cases in which, consequent upon search, assessments have been completed under section 143(3) of the Act shall be eligible to avail the Scheme?
Answer: As the search cases are not eligible for the Scheme, an assessment made consequent to search under section 143(3) read with section 153B of the Act is not eligible to avail the Scheme.

Question No.8: Clause(5) of section 203 of the Finance Act, 2016, refers to deemed revival of ‘consequences’ under the Income-tax Act or the Wealthtax Act, as the case may be, under which proceedings against the declarant are or were pending. There is no explicit reference to deemed revival of ‘proceedings’. Please clarify?
Answer: Clause (5) of section 203 provides that in a case where the conditions specified therein are not fulfilled, it shall be presumed as if the declaration was never made under the Scheme; therefore, in case of rejection of declaration, the proceedings pending against the assessee before issuance of certificate under 204(1) shall stand revived.

(Dr. T.S. Mapwal)
Under Secretary to the Government of India

TRACES New Recommedations about Site Use

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TRACES New Recommedations about Site Use
The Centralized Processing Cell (TDS) offers you a variety of value-added services through its web-portal TRACES. As you are aware, these services can be availed after registering on TRACES with a unique User ID and Password. In provision of its services, CPC (TDS) exchanges with its end-users a variety of sensitive TDS related information pertaining to the Tax Deductors and Deductees. Therefore, Data Security and Integrity forms the core of CPC (TDS) Information Security Management System, which is certified with ISO 27001 global standard.

As you handle TDS related sensitive information on the web-portal TRACES every day, your partnership in Information Security endeavors of CPC (TDS) cannot be overemphasized. It is, therefore, imperative that your privileged access to our systems needs to be handle diligently and with due care. To further emphasize this, CPC(TDS) has certain recommendations for you, as follows:

· Your User ID and Password are the most sensitive information, misuse of which can lead to tampering of confidential TDS related information, your own sensitive data and Deductee related confidential information.  If a password is hacked or stolen, it can result in information security breach, leading to undesirable consequences, including privacy violations.

· You are therefore, suggested to exercise caution in use of log-in credentials at TRACES, which should not be disclosed to any unintended or unauthorized individuals. If shared, the person using log-in credentials shall also be liable to consequences.

· To delegate TDS related activities, TRACES has provided facility for Admin and Sub-users to facilitate authorised Sub-users to carry out activities on TRACES and submit to the Admin user. The Admin user has the right to approve the activities of the Sub-users.

· Secure your password with at least 8 characters’ length and a combination of Lower Case, Upper Case, Numeric Characters and Special characters. Do not write your password on notepads or the whiteboard at your desk. 

· Keeping sensitive information such as passwords in emails, folders & files on the computer can be risky. If the email or computer account is hacked, then the perpetrator could misuse the passwords, steal money from your bank accounts, misuse your email account or credit/debit card to access sensitive information from your machine.

· Do not use the same password for different accounts. Using the same password for more than one account is similar to carrying one key that unlocks your house, car, office and safety deposit box. One lost key could let a mischievous unauthorised user unlock all doors.
· It is therefore, not only advised to refrain from sharing the log-in credentials, but also to avoid using the log-in credentials of any person other than the Authorised Person appointed by the deductor, for carrying out any activity on TRACES.

· You are requested to similarly treat Digital Signature Certificate with utmost security, as the User ID and Password on TRACES.

Please note that the "Authorised Person" is referred to as "Person Responsible" in accordance with Section 204 read with Section 200 of the Income Tax Act, 1961 and other relevant provisions for deduction of tax.

We are extremely sure that you will partner with CPC (TDS) in establishing a secure ecosystem by abiding to the Security guidelines of CPC (TDS). CPC (TDS) is committed to provide best possible services to you.
CPC(TDS) Team
Notes:  
· Please maintain updated email address and Contact Number on TRACES to receive regular periodic updates and

  Guidelines from TRACES. 
· Please refer to our FAQs and e-tutorials for detailed screen-driven assistance, before seeking further help.

Dec 14, 2016

100% Income Tax Scrutiny of Revised Return After 8 November 2016

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100% Income Tax Scrutiny of Revised Return After 8 November 2016
Under the existing provisions of section 139(5) of the Income-tax Act, 1961 ('Act'), Revised Return can only be filed if any person, who has filed a return under section 139(1) of the Act or in response to notice ufs 142(1), discovers any omission or any wrong statement therein. Post demonetization of the currency on 8th November, 2016, some taxpayers may misuse this provision to revise the return-of-incanie filed by them for the earlier assessment year, for mani ul of income, cash-in-hand, profits etc. with an intention to show the current year's Undisclosed income (including the unaccounted income held in the form of demonetized currency in current year) in the earlier return.

It is hereby clarified that the provision to file a revised return of income u/s 139(5) of the Act has been stipulated for revising any omission or wrong statement made in t e original return of income and not for resorting to make changes in the income initially declared so as to drastically alter the form, substance and quantum of the earlier disclosed income.

It is brought to the notice of tax payers that any instance coming to the notice of Income-tax Department which reflects manipulation in the amount of income, cash-in-hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and also attract penalty/prosecution in appropriate cases as per provision of law. 

(Meenakshi J.Goswami) 
Commissioner of Income Tax  
CBDT

No Reopen u/s 147 merely on Basis of Increase Sale due to Digital Payments

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No Reopen u/s 147 merely on Basis of Increase Sale due to Digital Payments
Recent initiatives of the Government to curb the black economy in the country has encouraged people to shift towards digital mode of payment while making financial transactions. By adopting digital mode of payment, no financial transactions would remain undisclosed and consequently an enhanced turnover of business might get reflected in the books of accounts. Under the circumstances, an apprehension has been raised that increased turnover in the current year may lead to reopening of earlier years' cases involving lower turnover u/s 147 of the Income-tax Act, 1961 ('Act') by the Assessing Officer causing undue harassment to tax payers.

2. It is hereby clarified that reopening of cases u/s 147 of the Act is feasible only when the Assessing Officer "has reason to believe that any income chargeable to tax has escaped assessment for any assessment year" and not merely on the basis of any reason to suspect. Mere increase in turnover, because of use of digital means of payment or otherwise, in a particular year cannot be a sole reason to believe that income has escaped assessment in earlier years. Hence, Assessing Officers are advised not to reopen past assessments in cases merely on the ground that the current year's turnover has increased.

3. The above may be brought to the notice of all for necessary and strict compliance.
4. Hindi version to follow.

(F. No. 225/326/2016/ITA.II)

Dec 13, 2016

Customers Need to Mention Old and New Currency Notes in Deposit Slips

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Customers Need to Mention Old and New Currency Notes in Deposit Slips
The Ministry of Finance, Government of India through its Department of Financial Services(DFS) has asked all the Public Sector Banks(PSBs) and the Indian Bankers Association (IBA) to ensure hundred percent(100%) that deposits of new currency is properly reflected in the customers’ counterfoils. In a letter addressed to all the Managing Directors (MDs) & Chief Executive Officers (CEOs)/Chairman cum Managing Directors (CMDs) of PSBs and Chairman, IBA, the DFS has stated that maintenance of records regarding deposit of SBN and Non-SBN, as the case may be, is essential both in the bank record as well as the customer’s record. The letter further states though most banks providing correct information to the customers yet to ensure that it is done in 100% of cases without fail, all the bank branches in the country be alerted to reflect correctly the cash deposit in old and new currency and inform the customers about the same.

The Ministry has asked the MDs &CEOs/CMDs of PSBs and Chairman, IBA that this must be followed scrupulously and any deviation in this regard has to be prevented and if noticed, dealt with firmly and immediately.

The letter further states that to educate the public, banks may clearly display a prominent sign (including in the local language) in their respective branches requesting their customers to fill-up deposit slips clearly indicating old and new currency and the denomination of the notes..

The DFS has asked all the MDs &CEOs/CMDs of PSBs and Chairman, IBA to consider this urgently and action taken in this regard be reported by 16.12.2016.

The Ministry also appreciated the role played by the banks post-demonetisation especially when the old currency was accepted and till 24th November, 2016, when exchange of old currency to specified limit was also permitted.

Dec 3, 2016

FAQs on Pradhan Mantri Garib Kalyan Yojana

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FAQs on Pradhan Mantri Garib Kalyan Yojana
The Government has announced demonetization of existing currency of Rs. 500/1000 with effect from the 9th November, 2016. However, concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 ('Act') could possibly be used for concealing black money. So, the Government has introduced Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha to amend the provisions of Income-Tax Act.

The Government has announced Pradhan Mantri Garib Kalyan Yojana 2016 (PMGKY) in the Taxation Laws (Second Amendment) Bill, 2016. As per this PMGKY black money deposited in banks or held in cash can be offered for taxation at 49.9% (i.e., 30% tax, 9.9% surcharge and 10% penalty).

Q1. Who can make a declaration under PMGKY?
  ➢  "Any person" can make declaration as PMGKY available to every person (whether resident or non-resident)

  ➢  Non-resident Indians, Foreign Citizens & Foreign Companies can make declaration under PMGKY.

  ➢  Trustee can make a declaration on behalf of the beneficiary of a trust.

  ➢  Beneficiary can make separate declaration of his other income.

  ➢  Amalgamating company or a company which has converted itself into LLP cannot make declaration as entity no more exists.

  ➢  Declaration can be filed on behalf of a deceased individual/a partitioned HUF/a Company-in-liquidation/a dissolved firm/a dissolved private trust.

  ➢  Declaration can be made by a person who has not filed ITR in the past.

  ➢  If firm has undisclosed income, declaration shall be made by the firm.

  ➢  Partner cannot declare firm's income in his name.

  ➢  Partner may declare his undisclosed income in his name.

  ➢  Company can declare its undisclosed income.

  ➢  Govt. servant can declare undisclosed income inherited by him from his deceased parents provided he can prove that it was really inherited by him.

  ➢  Person who has received notice under section 142/143(2)/148/153A/153C can make declaration.

  ➢  Person searched (raided) or surveyed can also make declaration.

Q2. Who cannot make a declaration under PMGKY?
  ➢  Any person in respect of whom order of detention made under COFEPOSA, 1974.

  ➢  Any person notified as accused in respect of securities scam of 1991-1992.

  ➢  Any person liable to be prosecuted under Chapter IX or Chapter XVII of IPC, 1860.

  ➢  Any person liable to be prosecuted under NDPS Act, 1974.

  ➢  Any person liable to be prosecuted under Unlawful Activities (Prevention) Act, 1967.

  ➢  Any person liable to be prosecuted under Prevention of Corruption Act, 1988.

  ➢  Any person liable to be prosecuted under Prohibition of Benami Property Transactions Act, 1988.

  ➢  Any person liable to be prosecuted under Prevention of Money-Laundering Act, 2002.

  ➢  Person against whom FIR filed under any of the above Acts can declare if charge sheet was not filed nor summons issued.

Q3. Which income can be declared under PMGKY?
  ➢  Undisclosed income which is taxable under the Income-tax Act, 1961 and in the form of cash or deposit in an account with a specified entity can be declared.

  ➢  Undisclosed income in the form of jewellery, bullion, diamonds, other valuables can be declared after selling them and converting them into cash or getting their sales proceeds credited to bank account.

  ➢  Cash or deposits with specified entities.

  ➢  'Black' received in cash in property sales can be declared.

  ➢  Deposits in PPF account can be declared

  ➢  NSC cannot be declared

  ➢  RD balance in bank/post offices can be declared

  ➢  Deposits with NBFCs can be declared if they are notified as 'specified entities'

  ➢  Deposits with co-operative societies can be declared if they are notified as 'specified entities'

  ➢  Deposits with Post Office can be declared

  ➢  It appears credit of TDS in Form 26AS will be available for payment under the Scheme to the extent not claimed in ITR filed.

Q 4. Which income cannot be declared under PMGKY?
  ➢  Undisclosed income in the nature of "Red money" i.e. proceeds of crime, drugs, terrorism, benami property, money-laundering cannot be declared.

  ➢  Undisclosed foreign income/asset chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 cannot be declared.

  ➢  Undisclosed income in the form of jewellery, bullion, diamonds, other valuables, NSCs, investments in capital of firms etc. cannot be declared.

Q5. For which assessment years can declaration be made?
  ➢  Income chargeable to tax under Income-tax Act for any assessment year commencing on or before 1-4-2017 can be declared.

Q6. What is the rate of tax, surcharge, penalty, interest and deposit under the PMGKY?
  ➢  Tax @ 30% of declared undisclosed income

  ➢  Pradhan Mantri Garib Kalyan Cess @ 33% of tax i.e. 9.9% of declared undisclosed income.

  ➢  Penalty @10% of declared undisclosed income.

  ➢  Total payment to be made (tax plus PMGKY cess plus penalty) @ 49.9% of declared undisclosed income.

  ➢  Deposit @ 25% of declared undisclosed income in PMGKY non-transferable non-interest-bearing bonds for 4 years.

  ➢  Payment of 49.9% as well as deposit of 25% to be made before filing declaration.

  ➢  Proof of payment and deposit to be attached to declaration.

  ➢  Last date of declaration to be notified by Govt.

  ➢  No Education cess

  ➢  No Surcharge

  ➢  No Penalty under Section 270A

  ➢  No interest under section 234A or 234B or 234C

  ➢  Tax, cess and penalty paid are non-refundable

  ➢  No rounding off of undisclosed income declared

  ➢  No rounding off of tax payable under PMGKY

Points to Know for Declaring Income under PM Garib Kalyan Yojana

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Points to Know for Declaring Income under PM Garib Kalyan Yojana
1. Declaration to be made only in respect of cash or specified deposits.

2. No crime money can be declared.

3. Declaration in respect of undisclosed income taxable under Income-tax Act, 1961 upto assessment year 2017-18.

4. Do not include foreign income/asset taxable under Black Money Act, 2015.

5. Compute undisclosed income, tax, cess and penalty @ 49.9% of undisclosed income.

6. Compute amount of deposit in PMGKY Bonds @ 25% of undisclosed income.

7. Pay tax, cess and penalty @ 49.9%.

8. Make requisite deposit in PMGKY Bonds @ 25% of undisclosed income.

9. File declaration before notified date with Principal Commissioner or Commissioner along with proof of payment of @ 49.9% and proof of deposit @ 25%.

10. Declaration, payment and deposits all to be made before notified date

Dec 2, 2016

CBDT Clarification on Gold Jewellery under Income Tax Law

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CBDT Clarification on Gold Jewellery under Income Tax Law
In order to remove any doubt about the current position of Income Tax Law with respect
to gold jewellery, the following points are categorically clarified:

- There is no limit on holding of gold jewellery or ornaments by anybody provided it is acquired from explained sources of income including inheritance

- Vide circular dated 11.5.1994, instructions have been issued in the matter of search and seizure of gold jewellery.

- Jewellery and ornaments to the extent of 500 gms for married lady, 250 gms. for unmarried lady and 100 gm for male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assesse.

- Officer conducting search has discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions.

(Meenakshi J. Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
 Official Spokesperson, CBDT.

RBI Clarifies No Restriction on Deposit on Current or CC Account

4:37 PM 0
RBI Clarifies No Restriction on Deposit on Current or CC Account
Reserve Bank of India clarifies that no restrictions made on deposit on current, cash credit or overdraft account. There are some rumors on social media about this restrictions, so RBI needs to clarify this issue. Full clarification is as under.

In the wake of the withdrawal of legal tender character from the Specified Bank Notes (SNBs), Reserve Bank of India has been, from time to time, issuing instructions to the banks through the website of RBI (www.rbi.org.in) and official mail.

2. It has been reported that certain guidelines / instructions purported to be issued by RBI are being circulated in the social media by some unscrupulous elements creating confusion in the minds of the public/ bank personnel.

3. Banks are, therefore, cautioned to abide by only those instructions which are either uploaded on our website (www.rbi.org.in) or mailed through the official mail.

4. The banks should not rely on other unsecured/ unofficial channels like social media wherein the authenticity of the documents circulated is questionable and not verifiable.

5. Please acknowledge receipt.
Yours faithfully,
(Suman Ray)
General Manager

Fake Circular No. RBI/2016-17/166 provides that in case of genuine deposits in Current Account banks are advised to take certificate of cash balance as on Nov. 8, 2016 duly attested by tax authorities along with details of deposits from Nov. 10, 2016 till date.

Actual Circular No. RBI/2016-17/166 provides that banks should not rely on instructions issued on unofficial channels like social media and rely on instructions uploaded on RBI's website.

Nov 30, 2016

RBI Revised Limit of Withdrawl Under PMJDY to Rs. 10000 per Month

2:14 PM 0
RBI Revised Limit of Withdrawl Under PMJDY to Rs. 10000 per Month
Reserve Bank of India revised maximum limit of withdrawl under Pradhan Mantri Jan Dhan Yojana accounts to Rs. 10000 per month. Full notification is  as under.

Please refer to our circular DCM (Plg) No.1424/10.27.00/2016-16 dated November 25, 2016 on “Withdrawal of cash – Weekly limit”. With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 09, 2016. As a temporary measure, the banks are advised to observe the following in respect of the PMJDY accounts:

(1) Fully KYC compliant account holders may be allowed to withdraw Rs. 10,000/- from their account, in a month. The branch managers may allow further withdrawals beyond Rs. 10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record.

Limited or Non KYC compliant account holders may be allowed to withdraw Rs. 5,000 per month from the amount deposited through SBNs after November 09, 2016 within the overall ceiling of Rs. 10,000.

Yours faithfully,
(P Vijaya Kumar)
Chief General Manager

Nov 29, 2016

11 Things to Know about Declaration of Black Money under 50% Scheme

2:24 PM 0
11 Things to Know about Declaration of Black Money under 50% Scheme
The Government announced demonetization of existing currency of Rs 500/1000 as a step forward to curb black money with effect from the 9th November, 2016. However, concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 ('Act') could possibly be used for concealing black money. It is, therefore, important to plug these loopholes within Act so as to prevent misuse of the provisions. Thus, the Govt. has introduced Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha which proposes to make some changes in the Act to ensure that defaulting assessees are subjected to tax at a higher rate with stringent penalty provision.

Disclosure of black money held in banks or cash
1.Black money deposited in banks or held in cash can be offered for taxation at concessional rate under Pradhan Mantri Garib Kalyan Yojna, 2016 ('PMGKY'). This income would be taxed at 49.9% (i.e., 30% tax, 9.9% surcharge and 10% penalty).

2. The persons making declaration under PMGKY will be required to deposit 25% of black money. This amount should be deposited before filing of declaration. This deposit will have lock-in-period of 4 years and they shall bear zero interest.

3. Declarants under PMGKY shall be required to pay tax, surcharge and penalty before filing of declaration. Such undisclosed income declared in PMGKY shall not affect finality of completed assessments. In other words, the declarant shall not be entitled to reopen any assessment made under the Act.

4. Such declaration scheme shall not be applicable in relation to prosecution for any offence punishable under the Prevention of corruption Act, Benami Act and Prevention of money laundering Act. Such scheme shall not apply for undisclosed foreign income and assets to which Black Money (Undisclosed foreign income and assets) and Imposition of Tax Act, 2015 applies.

5. Person making declaration under PMGKY are required to file declarations in the specified format and such income shall not be included in the total income of declaration for any AY under Income-Tax Act.

6. Such PMGKY scheme will be applicable for certain period as notified by the Government.
Disclosure of black money in return of income

7. Disclosure of undisclosed income in return of income would be taxable at 77.25% (i.e., 60% tax, 15% surcharge and 2.25% Cess). Thus, no penalty will be levied under Section 271AAC (newly proposed) if undisclosed income has been disclosed in return of income and tax has been paid on or before end of previous year.

8. Such option is available for those taxpayers who are not eligible for PMGKY Scheme or those who wanted to declare black money in the form of gold, bullion or immovable property, etc.

9. Further, for such disclosure of black money, no penalty will be levied for under-reporting and misreporting of income under Section 270A.

Detection of black money by the AO
10. If any undisclosed income is determined by AO then it would be taxable at 83.25% (i.e., 60% tax, 15% surcharge, 6% penalty* and 2.25% Cess).

11. Further, no penalty will be levied for under-reporting and misreporting of income under Section 270A.

* Penalty is computed on tax amount excluding surcharge and Cess.

RBI Relaxes on Withdraw of Cash from Bank Deposit Account

2:17 PM 0
RBI Relaxes on Withdraw of Cash from Bank Deposit Account
Reserve Bank of India makes relaxation on withdraw of Cash at any limit from bank deposit account. RBI issued a notification on this relaxation on 28 November 2016. Full notification is as under.

It has been reported that certain depositors are hesitating to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.

2. As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits; preferably, available higher denominations bank notes of  Rs. 2000 and Rs. 500 are to be issued for such withdrawals.

Yours faithfully,
(P Vijaya Kumar)
Chief General Manager

Sep 23, 2016

FAQs on Overview of Goods ans Service Tax GST

8:54 AM 1
Q 1. What is Goods and Service Tax (GST)? 
Ans. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer. 

Q 2. What exactly is the concept of destination based tax on consumption? 
Ans. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. 

Q 3. Which of the existing taxes are proposed to be subsumed under GST? 
Ans. The GST would replace the following taxes: 
(i) taxes currently levied and collected by the Centre: 
a. Central Excise duty 
b. Duties of Excise (Medicinal and Toilet Preparations) 
c. Additional Duties of Excise (Goods of Special Importance) 
d. Additional Duties of Excise (Textiles and Textile Products) 4 5 
e. Additional Duties of Customs (commonly known as CVD) 
f. Special Additional Duty of Customs (SAD) 
g. Service Tax 
h. Central Surcharges and Cesses so far as they relate to supply of goods and services 

(ii) State taxes that would be subsumed under the GST are: 
a. State VAT 
b. Central Sales Tax 
c. Luxury Tax 
d. Entry Tax (all forms) 
e. Entertainment and Amusement Tax (except when levied by the local bodies) 
f. Taxes on advertisements 
g. Purchase Tax 
h. Taxes on lotteries, betting and gambling 
i. State Surcharges and Cesses so far as they relate to supply of goods and services 
The GST Council shall make recommendations to the Union and States on the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the GST. 

Q 4. What principles were adopted for subsuming the above taxes under GST? 
Ans. The various Central, State and Local levies were 4 5 examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind: 
(i) Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services. 
(ii) Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the consumption of goods and services at the other. 
(iii) The subsumation should result in free flow of tax credit in intra and inter-State levels. The taxes, levies and fees that are not specifically related to supply of goods & services should not be subsumed under GST. 
(iv) Revenue fairness for both the Union and the States individually would need to be attempted.

Q 5. Which are the commodities proposed to be kept outside the purview of GST? 
Ans. Alcohol for human consumption, Petroleum Products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel& Electricity. 

Q 6. What will be the status in respect of taxation of above commodities after introduction of GST? Ans. The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities. 6 7 

Q 6A. What will be status of Tobacco and Tobacco products under the GST regime? 
Ans. Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products. 

Q 7. What type of GST is proposed to be implemented? 
Ans. It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST). Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services. 

Q 8. Why is Dual GST required? 
Ans. India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism. 

Q 9. Which authority will levy and administer GST? 
Ans. Centre will levy and administer CGST & IGST while respective states will levy and administer SGST. 6 7 

Q 10. Why was the Constitution of India amended recently in the context of GST? 
Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on the sale of goods. In the case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Centre alone that is empowered to levy service tax. 

Introduction of the GST required amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The Constitution of India has been amended by the Constitution (one hundred and first amendment) Act, 2016 recently for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST. 
FAQs on Overview of Goods ans Service Tax GST

Q 11. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)? 
Ans. The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, 8 9 both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State. 

Illustration I: Suppose hypothetically that the rate of CGST is 10% and that of SGST is 10%. When a wholesale dealer of steel in Uttar Pradesh supplies steel bars and rods to a construction company which is also located within the same State for, say Rs. 100, the dealer would charge CGST of Rs. 10 and SGST of Rs. 10 in addition to the basic price of the goods. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not actually pay Rs. 20 (Rs. 10 + Rs. 10 ) in cash as he would be entitled to set-off this liability against the CGST or SGST paid on his purchases (say, inputs). But for paying CGST he would be allowed to use only the credit of CGST paid on his purchases while for SGST he can utilize the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST. 

Illustration II: Suppose, again hypothetically, that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for, let us say Rs. 100, the ad company would charge CGST of 8 9 Rs. 10 as well as SGST of Rs. 10 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not again actually pay Rs. 20 (Rs. 10+Rs. 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilise the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST. 

Q 12. What are the benefits which the Country will accrue from GST? 
Ans. Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved 10 11 tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer. 

Q 13. What is IGST? \
Ans. Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of interState trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. 

Q 14. Who will decide rates for levy of GST? 
Ans. The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council. 

Q 15. What would be the role of GST Council? 
Ans. A GST Council would be constituted comprising the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers to make recommendations to the Union and the States on 
(i) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST; 
(ii) the goods and services that may be subjected to or exempted from the GST; 11 (
iii) the date on which the GST shall be levied on petroleum crude, high speed diesel, motor sprit (commonly known as petrol), natural gas and aviation turbine fuel; 
(iv) model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply; 
(v) the threshold limit of turnover below which the goods and services may be exempted from GST; (vi) the rates including floor rates with bands of GST; 
(vii)any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster; 
(viii) special provision with respect to the NorthEast States, J&K, Himachal Pradesh and Uttarakhand; and 
(ix) any other matter relating to the GST, as the Council may decide. 

Q 16. What is the guiding principle of GST Council? 
Ans. The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services.

Q 17. How will decisions be taken by GST Council? 
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting. One half of the total number of members of the GST Council shall constitute the quorum at its meetings. 

Q 18. Who is liable to pay GST under the proposed GST regime? 
Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the threshold exemption, i.e. Rs.10 lakhs (Rs. 5 lakhs for NE States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all interState supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts. 

Q 19. What are the benefits available to small tax payers under the GST regime? 
Ans. Tax payers with an aggregate turnover in a financial year up to [Rs.10 lakhs] would be exempt from tax. 12 13 [Aggregate turnover shall include the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate turnover shall be computed on all India basis. For NE States and Sikkim, the exemption threshold shall be [Rs. 5 lakhs]. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. 

Q 20. How will the goods and services be classified under GST regime? 
Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2 digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4 digit code. Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices. 
Services will be classified as per the Services Accounting Code (SAC) 

Q 21. How will imports be taxed under GST? 
Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off 14 15 will be available on the GST paid on import on goods and services. 

Q 22. How will Exports be treated under GST? 
Ans. Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. 

Q 23. What is the scope of composition scheme under GST? 
Ans. Small taxpayers with an aggregate turnover in a financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC. The floor rate of tax for CGST and SGST shall not be less than [1%]. A tax payer opting for composition levy shall not collect any tax from his customers. Tax payers making inter- state supplies or paying tax on reverse charge basis shall not be eligible for composition scheme. 

Q 24. Whether the composition scheme will be optional or compulsory? 
Ans. Optional. 

Q 25. What is GSTN and its role in the GST regime? 
Ans. GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central 14 15 and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN would, inter alia, include: (i) facilitating registration; (ii) forwarding the returns to Central and State authorities; (iii) computation and settlement of IGST; (iv) matching of tax payment details with banking network; (v) providing various MIS reports to the Central and the State Governments based on the tax payer return information; (vi) providing analysis of tax payers’ profile; and (vii) running the matching engine for matching, reversal and reclaim of input tax credit. 

The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/ reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. Further, the GSTN is developing back-end modules like assessment, audit, refund, appeal etc. for 19 States and UTs (Model II States). The CBEC and Model I States (15 States) are themselves developing their GST back-end systems. Integration of GST front-end system with back-end systems will have to be completed and tested well in advance for making the transition smooth. 

Q 26. How are the disputes going to be resolved under the GST regime? 
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that the Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute- 16 
(a) between the Government of India and one or more States; or 
(b) between the Government of India and any State or States on one side and one or more other Sates on the other side; or 
(c) between two or more States, arising out of the recommendations of the Council or implementation thereof. 

Q 27. What are the other legislative requirements for introduction of the GST? 
Ans. Suitable legislation for the levy of GST (Central GST Bill, Integrated GST Bill and State GST Bills) drawing powers from the Constitution would need to be passed by the Parliament and the State Legislatures. Unlike the Constitutional Amendment which requires 2/3rd majority, the GST Bills would need to be passed by a simple majority. Obviously, the levy of the tax can commence only after the GST law has been enacted by the Parliament and respective Legislatures.