Recommendations made during the 28th meeting of the GST Council held in New Delhi on 21st 2018

The GST Council in its 28th meeting has recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act.

The major recommendations are as detailed below:

• Upper limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore. Present limit of turnover can now be raised on the recommendations of the Council.
• Composition dealers to be allowed to supply services (other than restaurant services), for upto a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher.
• Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council.
• The threshold exemption limit for registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya,Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs.
• Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory.
• Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.
• Registration to remain temporarily suspended while cancellation of registration is under process, so that the taxpayer is relieved of continued compliance under the law.
• The following transactions to be treated as no supply (no tax payable) under Schedule III:
• Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;
• Supply of warehoused goods to any person before clearance for home consumption; and
• Supply of goods in case of high sea sales.
• Scope of input tax credit is being widened, and it would now be made available in respect of the following:
• Most of the activities or transactions specified in Schedule III;
• Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft; 
• Motor vehicles for transportation of money for or by a banking company or financial institution;
• Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
• Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
• In case the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but liability to pay interest is being done away with.
• Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.
• Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at Rs. 25 Crores and Rs. 50 Crores, respectively.
• Commissioner to be empowered to extend the time limit for return of inputs and capital sent on job work, upto a period of one year and two years, respectively.
• Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.
• Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, to be outside India.
• Recovery can be made from distinct persons, even if present in different State/Union territories.
• The order of cross-utilisation of input tax credit is being rationalised.

These amendments will now be placed before the Parliament and the legislature of State and Union territories with legislatures for carrying out the amendments in the respective GST Acts.

Recommendations on opening of migration window for tax payers till 31st August ,2018

The GST Council in its 28th meeting has approved the proposal to open the migration window for taxpayers, who received provisional IDs but could not complete the migration process.

The taxpayers who filed Part A of FORM GST REG-26, but not Part B of the said FORM are requested to approach the jurisdictional Central Tax/State Tax nodal officers with the necessary details on or before 31st August, 2018.

The nodal officer would then forward the details to GSTN for enabling migration of such taxpayers.

It has also been decided to waive the late fee payable for delayed filing of return in such cases.Such taxpayers are required to first file the returns on payment of late fees, and the waiver will be effected by way of reversal of the amount paid as late fees in the cash ledger under the tax head.

Taxpayers who intend to complete the migration process are requested to approach their jurisdictional Central Tax/State Tax nodal officers in this regard

Official Liquidator in Voluntary Liquidation

Insolvency Professional:

As per regulation 5 of Insolvency and Bankruptcy Code 2017 summary, an insolvency professional cannot be a person who is in anyway related to corporate involved in the case and cannot be appointed by the corporate person unless he is eligible as per Regulation 6 Further, the remuneration to be paid to liquidator is part of liquidation cost as per Regulation 7.

To be eligible as an insolvency professional, as per sub-regulation 6 of Insolvency and Bankruptcy Code, 2016, he/ she and every partner or director of that insolvency professional entity should be an independent of the corporate person. However, there is no requirement for the insolvency professionals to be an independent from the creditors. Moreover, as per Regulation (2) of Regulation 6 an insolvency professional is not eligible to be appointed as a liquidator if he or any of his entity as an insolvency professional is under a restraint order of the Insolvency and Bankruptcy Board of India (IBBI).

The independency of an Insolvency Professional is defined as below as per regulation 6(1) of Insolvency and Bankruptcy Code, 2016-

• If he is eligible to be appointed as an independent director in the board of corporate as per section 149 of Companies Act, 2013 (18 of 2013), where the corporate person is a company;
• If he is not related to any party associated with corporate person
• If he has never been an employee or proprietor or a partner of firm of auditors or company secretaries or cost auditor for the corporate person
• If he has never been an employee, or proprietor or partner of any legal firm or a consulting firm who have ever had a transaction exceeding ten percent of gross turnover of that firm, in at least past three years.

As per Regulation (3) of Regulation 6, the liquidator is bound to disclose to the Board and Registrar, the existence of any kind of relationship with corporate person or any of its stakeholders as soon as he becomes aware of it. Stakeholders are defined under regulation 2(1)(f) as a person or entity who is entitled to proceeds from sale of liquidation assets under section 53. As per Regulation (4) of regulation 6 of Insolvency and Bankruptcy Code, 2016, an insolvency professional seizes to be a liquidator if he or his related insolvency professional entity (director or partner) represents any other stakeholders in same liquidation.

Duties of Liquidator:

A liquidator is responsible to prepare and submit below reports as per regulation (1) of regulation 8 of Insolvency and Bankruptcy Code, 2016 rules-

• Preliminary Report
• Annual Status Report
• Minutes of consultations with stakeholders
• Final Report

As per Regulation 9 of Insolvency and Bankruptcy code 2016 rules, the liquidator needs to submit the Preliminary Report to corporate person within forty-five days of commencement of liquidation process with details including the capital structure of corporate person, the estimates of his assets and liabilities as on date of commencement of liquidation, whether if he wants to make any further inquiry about promotion, formation or failure of corporate person or conduct of his business thereof, and the proposed plan of action with timelines to carry out liquidation process.

As per Regulation (1) of Regulation 8 of Insolvency and Bankruptcy Code 2016 rules, the liquidator needs to make the minutes and share it with stakeholders in electronic or physical form when he receives an application in writing, or cost of making such reports and undertaking from stakeholders that he shall maintain confidentiality of these reports and will not make use of them to cause undue gain or undue loss to himself or another person.

Voluntary Winding Up of Company by Creditors

Voluntary Winding up by creditors takes place when a company becomes insolvent and is unable to discharge its liabilities. To carry out voluntary winding up of private limited company procedure, a meeting need to be called where a resolution is passed to carry out the winding up procedure of the company. The creditor's winding up meeting should be held either of the days fixed for General meeting or on the very next day.

As per the procedure for winding up of a company in India, the notice for creditor's meeting should be sent by post to each of the creditor while one is sending the notice for general meeting. It should also be published in Official Gazette and two newspapers which are popular in the district where registered office of the company is located.

A Statement of Affairs and list of creditors with due amount should be prepared beforehand and should be laid during the meeting. In case the resolution is passed during creditor's meeting, a copy of such resolution need to be filed with Register within ten working days from the date when resolution is passed.

During same creditor's meeting, a liquidator shall be nominated by the creditors. This liquidator shall be as per the Regulations set by IBC Code 2016 and shall carry out all the functions related to winding up of the company. He shall prepare the detailed list of assets and liabilities of the company and shall also propose the process and timelines for liquidation. As per Insolvency and Bankruptcy Act 2016, the fee to be paid to this liquidator is part of liquidation cost.

Liquidator shall value, sell, recover and realize all assets of the corporate person. He shall open bank account for purpose of receiving money from sale of such assets and will also administer the distribution of such proceed with the stakeholders within six months of receipt of these proceeds. He shall also keep an electronic copy of these reports and will save them for at least next eight years from the date of dissolution of the corporate person.

Once the affairs of the corporate person are completely wound up, the liquidator shall apply with NCLT for its dissolution along with final report. The final report would consist of audited liquidation accounts and statements showing the details of disposed of assets and how they were sold. This Final Report also needs to be filed with ROC and Board.

Once this Final Report is submitted, NCLT shall pass the order for dissolution and the company shall stand dissolved from this date of NCLT order. A copy of this order needs to be forwarded to ROC within 14 days when the order was passed.

As per section 59(8) of Insolvency and Bankruptcy Act 2016, the liquidator need to apply with the Adjudicating Authority for an order to pay into the Companies Public Account in India, any proceeds from liquidation which was unclaimed or any other balance that is need to be paid off to any of the company’s stakeholder on or before the order of dissolution. In case liquidator retains any money from the liquidation process, then he is liable to pay interest on such amounts at a rate of 12 % per annum plus penalty as determined by the IBBI.

Change of email and mobile number of the authorized signatory by taxpayers with assistance from the jurisdictional tax officer under GST system

Complaints are being received from taxpayers that the intermediaries who were authorized by them to apply for registration on their behalf had used their own email and mobile number during the process. They are now not sharing the user credentials with the taxpayer on whose behalf they had done the registration in the first place and the taxpayer is at their mercy.

With a view to address this difficulty of the taxpayer, a functionality to update email and mobile number of the authorized signatory is available in the GST System. The email and mobile number can be updated by the concerned Jurisdictional tax authority of the taxpayer as per the following procedure:

Steps to be followed:-

• Taxpayer is required to approach the concerned jurisdictional Tax Officer to get the password for the GSTIN allotted to the business.
• https://www.gst.gov.in,>. Allotted jurisdiction is displayed in red text>
• Taxpayer would be required to provide valid documents to the tax officer as proof of his/her identity and to validate the business details related to his GSTIN.
• Tax officer will check if the said person is added as a Stakeholder or Authorized Signatory for that GSTIN in the system.
• Tax officer will upload necessary proof on the GST Portal in support to authenticate the activity.
• Tax officer will enter the new email address and mobile phone number provided by the Taxpayer.
• After upload of document, Tax officer will reset the password for the GSTIN in the system.
• Username and Temporary password reset will be communicated to the email address as entered by the Tax Officer.
• Taxpayer need to login on GST Portal https://www.gst.gov.in/ using the First time login link.
• After first time login with the Username and Temporary password that was emailed to him, system would prompt the taxpayer to change username and password. The said username and password can now be used by the taxpayer.

Roll-out of e-Way Bill system for Intra-State movement of goods in the States of Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh from 15th April, 2018.

As per the decision of GST Council, e-Way Bill system for all inter-State movement of goods has been rolled-out from 01st April, 2018. E-way Bill system for Intra-State movement of goods in the State of Karnataka is also operational from the said date. E-Way Bills are getting generated successfully and till 09th April, 2018 more than sixty three lakh e-Way Bills have been successfully generated.

It is hereby informed that e-Way Bill system for Intra-State movement of goods would be implemented from 15th April, 2018 in the following States:-

(i) Andhra Pradesh

(ii) Gujarat 

(iii) Kerala

(iv) Telangana

(v) Uttar Pradesh

With the roll-out of e-Way Bill system in these States, it is expected that trade and industry will be further facilitated insofar as the transport of goods is concerned, thereby eventually paving the way for a nation-wide single e-Way Bill system. Trade and industry and transporters located in these States may obtain registration/ enrolment on e-Way Bill portal namely https://www.ewaybillgst.gov.in at the earliest without waiting for the last date.

CBDT notifies Income Tax Return Forms for Assessment Year 2018-19

The Central Board of Direct Taxes(CBDT) has notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2018-19. For Assessment Year 2017-18, a one page simplified ITR Form-1(Sahaj) was notified. This initiative benefited around 3 crore taxpayers, who have filed their return in this simplified Form. For Assessment Year 2018-19 also, a one page simplified ITR Form-1(Sahaj) has been notified. This ITR Form-1 (Sahaj) can be filed by an individual who is resident other than not ordinarily resident, having income upto Rs.50 lakh and who is receiving income from salary, one house property / other income (interest etc.). Further, the parts relating to salary and house property have been rationalised and furnishing of basic details of salary (as available in Form 16) and income from house property have been mandated.

ITR Form-2 has also been rationalised by providing that Individuals and HUFs having income under any head other than business or profession shall be eligible to file ITR Form-2. The Individuals and HUFs having income under the head business or profession shall file either ITR Form-3 or ITR Form-4 (in presumptive income cases).

In case of non-residents, the requirement of furnishing details of any one foreign Bank Account has been provided for the purpose of credit of refund. Further, the requirement of furnishing details of cash deposit made during a specified period as provided in ITR Form for the Assessment Year 2017-18 has been done away with from Assessment Year 2018-19.

There is no change in the manner of filing of ITR Forms as compared to last year. All these ITR Forms are to be filed electronically. However, where return is furnished in ITR Form-1 (Sahaj) or ITR-4 (Sugam), the following persons have an option to file return in paper form:-

(i) an Individual of the age of 80 years or more at any time during the previous year; or

(ii) an Individual or HUF whose income does not exceed five lakh rupees and who has not claimed any refund in the Return of Income. 

The notified ITR Forms are available on the official website of the Department www.incometaxindia.gov.in.