R. Wadhwa & Associates

R. Wadhwa & Associates R. Wadhwa & Associates is a leading CA firm specializing in Financial & Tax Advisory.

24/04/2023

GST registered persons who failed to furnish a valid return within a period of thirty (30) days from the service of the assessment order issued on or before the 28th February 2023;

assessment made by the concerned officer on a best judgment basis due to non-filing of GST return;

said assessment order would be deemed to have been withdrawn if such registered persons —

(i) Furnish the said return on or before the 30th day of June 2023;

(ii) Along with the payment of interest due and the late fee payable under the Act,

irrespective of whether or not an appeal had been filed against such assessment order; or whether or not the appeal, if any, filed against the said assessment order has been decided.

~ Notification No. 6/2023 – CENTRAL TAX

19/04/2023

Section 206C requires the collection of tax by the seller from certain transactions like the sale of alcohol, liquor, forest produce, scrap, and so forth. Sub-section (1G) of Section 206C requires tax collection on foreign remittances made under the Liberalised Remittance Scheme (LRS) and on the sale of Overseas Tour Program Packages (TPP).

With effect from 01-07-2023, the Finance Act 2023 has amended the provisions of Section 206C(1G) as follows:

(a) 5% TCS rate in respect of any remittance made under LRS and on the sale of TPP, the rate of TCS shall be 20%;

**(b) The threshold of Rs. 7 lakhs for exemption from TCS is allowed only when the remittance is made for education or medical treatment [first proviso to Section 206C(1G)];

**(c) The clarification that tax is to be collected when the aggregate of remittance exceeds Rs. 7 lakhs applies only when the remittance is for education or medical treatment [second proviso to Section 206C(1G)].

18/04/2023

Those non-resident (NR) taxpayers who were not having PAN and were not required to have PAN as per relevant provisions of the Income-tax Act,1961, read with Income-tax Rules, 1962, were exempted from mandatory electronic filing of Form 10F till 31st March 2023 by the competent authority.

Given the continued practical challenges and to mitigate the genuine hardship being faced by such category of taxpayers, it has been decided by the competent authority to extend the above-mentioned partial relaxation further till 30th September 2023.

It is reiterated that such taxpayers may make statutory compliance of filing Form 10F till 30th September 2023 in manual form.

For Taxpayers who have not filed annual returns for any of the periods from FY 17-18 to FY 21-22 but file the same till ...
17/04/2023

For Taxpayers who have not filed annual returns for any of the periods from FY 17-18 to FY 21-22 but file the same till 30th June 2023, then the maximum late fee would be Rs.20,000/- (CGST+SGST) p.a.

Note: – It may be noted that there is no reduction in the late fees for delay in filing the Return under section 44 of the CGST Act, viz. Annual Return may include the self-certified reconciliation statement (Forms GSTR-9 & GSTR-9C) for the registered persons with aggregate turnover exceeding INR 20 crores in the relevant financial year. The current late fees will apply to such a registered person.

With the start of the new financial year 2023-24 (w.e.f. 01/04/2023), GST taxpayers should start a unique invoice series...
03/04/2023

With the start of the new financial year 2023-24 (w.e.f. 01/04/2023), GST taxpayers should start a unique invoice series for the financial year.

A similar provision is present in the GST Law regarding issuing a Bill of Supply by registered taxpayers availing Composition Scheme, those supplying exempted goods or services, or both.

If these provisions are not adhered to, apart from being a compliance issue, taxpayers may face problems while generating E-way Bills on the E-way bill system or furnishing their Form GSTR 1, or applying for a refund on GST Portal.

So, taxpayers must reset their invoices or bills of supply series to avoid any inconvenience in the future.

Article 1.5 of the Model GloBE Rules specifies those Entities that are Excluded Entities and, therefore, not subject to ...
31/03/2023

Article 1.5 of the Model GloBE Rules specifies those Entities that are Excluded Entities and, therefore, not subject to the GloBE Rules.

Qualification as an Excluded Entity has three practical effects under the GloBE Rules:

a. IIR and UTPR do not apply to Excluded Entities. Therefore, an Excluded Entity that is the UPE of the MNE Group is not required to apply the IIR, and the rule must be applied by the next Entity in the ownership chain (that is not itself an Excluded Entity).

b. GloBE attributes of Excluded Entities (including their profits, losses, taxes accrued, tangible assets, and payroll expenses) are excluded from the various computations under the GloBE Rules, except for the application of the revenue threshold.

c. Excluded Entities do not have any administrative obligations under the GloBE Rules.

Article 1.5 is divided into three provisions.
Article 1.5.1 lists the type of Entities that are Excluded Entities.
Article 1.5.2 extends the exclusion to Entities owned by such Excluded Entities, provided that certain tests are met.
Lastly, Article 1.5.3 provides an option to the Filing Constituent Entity to elect not to treat an Entity as an Excluded Entity under Article 1.5.2.

Article 4 of the UAE Corporate Tax Law lists the "Exempt Person" not covered by the provisions of this Law.A person enga...
30/03/2023

Article 4 of the UAE Corporate Tax Law lists the "Exempt Person" not covered by the provisions of this Law.

A person engaged in Extractive Business is covered under Article 4.

Article 7 lists the provisions applicable to an "Extractive Business" as defined in the Law.

Extractive Business:
Business or Business activity of -
Exploring;
Extracting;
Removing; or
Otherwise, producing and exploiting;
the Natural Resources of the State or any interest therein as determined by the Minister.

Year-end compliance:Income Tax-1. Tax Deductions to be claimed under the old tax regime - Applicable only if the payment...
29/03/2023

Year-end compliance:

Income Tax-

1. Tax Deductions to be claimed under the old tax regime - Applicable only if the payments are made by the end of the financial year.

2. Updated return under Section 139(8A) - Opportunity to rectify errors & omissions or file an ITR for undisclosed income for FY 2019-20. 50% additional tax + interest applicable

27/03/2023

As per Section 30 of the CGST Act, the registered person can apply for the revocation of cancellation of registration by the Officer on their own motion.

The time limit prescribed currently is 30 days from the date of the service of the cancellation order. This limit is further extendable by 30 days upon the approval of the Additional/ Joint Commissioner; an additional 30 days upon the Commissioner's approval.

Therefore, the total time available to the aggrieved person is 90 days, as per the current provisions of the Law.

The Finance Bill 2023, passed by both Houses of Parliament, proposes to extend the overall time limit to 180 days by giving the registered person 90 days to apply for the revocation, which can be further extended by an additional 90 days upon the Commissioner's approval.

The definition of UPE is set out in Article 1.4 of the Model GloBE Rules. The UPE definition is part of the definition o...
24/03/2023

The definition of UPE is set out in Article 1.4 of the Model GloBE Rules. The UPE definition is part of the definition of a Group and is the starting point for identifying all the Entities that comprise the MNE Group.

The identification of the UPE is also relevant in other parts of the GloBE Rules. For example, the GloBE Rules prioritize applying the Income Inclusion Rule (IIR) to the jurisdiction in which the UPE is located (the UPE Jurisdiction).

An Entity is not considered the UPE of a Group if there is another Entity higher in the ownership chain that is required, or that would have been required, to consolidate the first-mentioned Entity on a line-by-line basis.

In cases where the Group is a single Entity with one or more foreign PEs, then the Main Entity is the UPE.

An extended definition of UPE is necessary to ensure that a domestic Entity engaged in cross-border operations through PEs is subject to the GloBE Rules.

As per Section 92A(1) of the Income Tax Act, associated enterprise refers to an enterprise that participates directly or...
21/03/2023

As per Section 92A(1) of the Income Tax Act, associated enterprise refers to an enterprise that participates directly or indirectly or through one or more intermediaries in:

• Management of the other enterprise
• Control of the other enterprise
• Capital of the other enterprise

Section 92A(2) lists situations where enterprises may be deemed associated for transfer pricing compliance.

Some of these situations are listed below:

• Enterprise ownership - one enterprise holds, directly or indirectly, shares carrying at least twenty-six percent of the voting power in the other enterprise.

• Voting power - any person or enterprise holds, directly or indirectly, shares carrying not less than twenty-six percent of the voting power in each such enterprise.

• Lender - a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one percent of the book value of the total assets of the other enterprise.

• Guarantor - one enterprise guarantees not less than ten percent of the total borrowings of the other enterprise.

• Appointment of Board - more than half of the board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of one enterprise, are appointed by the other enterprise.

As we 'March' towards the end of the financial year, there are several compliances one mustn't forget.Amongst other vita...
20/03/2023

As we 'March' towards the end of the financial year, there are several compliances one mustn't forget.

Amongst other vital compliances, the GST Act has some of the most innocuous-sounding ones, which sting businesses with a vengeance if missed!

Furnishing a Letter of Undertaking is critical if one is engaged in zero-rated supplies. Examples of transactions for which LUT can be used are:
1. Zero-rated supply to SEZ without payment of IGST.
2. Export goods to a country outside India without payment of IGST.
3. Providing services to a client in a country outside India without payment of IGST.

Form CMP-02 allows normal registered taxpayers to opt for Composition Levy with the tax authorities. If you miss the deadline, there is no turning back time to file Form CMP-02 for a specific financial year!

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