[Excerpts from The Economic Times, 02 January 2019]
Flipkart co-founder Sachin Bansal has deposited INR 6.99 billion as an advance tax, including his capital gains tax from the Flipkart-Walmart deal, for Q1 FY2019, according to a report by The Times of India. His partner Binny Bansal, however, is yet to disclose capital gains made on his stake sale in the e-commerce platform, sources in the Income Tax Department told the paper. Both Bansals held more than 5% stake each in Flipkart. Earlier, the Income Tax Department had issued notices to the founders Binny and Sachin to disclose their total income from the Walmart- Flipkart deal. The department had sent notices to Flipkart's promoters as well as 35 other stakeholders.
[Excerpts from The Economic Times, 03 January 2019]
Companies faced with a 30% tax bill on overvaluation premiums are set to get a reprieve after a recent government clarification asked officials not to scrutinize such transactions, said people with knowledge of the matter, adding that this could also bring some relief to startups on the angel tax front. Many firms had received tax demands after the premiums were paid over the ‘fair price’ or ‘fair market value’ for fresh equity or preference shares. The demands could be withdrawn in the coming weeks, said the persons. A 31 December government notification has said that fresh issuance of shares at a premium, in most cases, should be outside the tax ambit.
The Central Board of Direct Taxes (CBDT) vide circular dated 18 December 2018 (read with CBDT circular dated 26 December 2018) has prescribed the timelines with respect to furnishing Country-by-Country Reporting (CbCR) under sub section (4) of section 286 in India as follows:
(a) Where the parent entity is not obligated to file CbCR or, (see note 1 below)
(aa) Where the parent entity being a resident of a country or territory with which India does not have an agreement providing for the exchange of CbCR.
CbCR is required to be furnished within 12 months from the end of the reporting accounting year (see note 2 below)
(b) Where there has been a systemic failure of the country or territory and the same has been intimated by the prescribed authority to such constituent entity.
CbCR is required to be furnished six months from the end of the month in which said systemic failure has been intimated by the prescribed authority.
Note1: Switzerland and Hong Kong have mandatory CbCR filing requirement for accounting year commencing from 1 January 2018. Therefore, Constituent entity resident in India whose parent is in Switzerland or Hong Kong may be required to furnish CbCR in India for the reporting period say 1 January 2017 to 31 December 2017 and also 1 January 2016 to 31 December 2016.
Note 2: For all accounting years ending up to 28 February, 2018 considering the short deadline, the CBDT has extended the time limit to 31 March 2019 (refer circular dated 26 December 2018)
The Government has removed the pre-import condition for imports under Advance Authorization. [Notification No. 1/2019-Central Tax dated 15 January 2019]
- Approval to the levy of disaster cess on the intra-state supply of goods and services within the state of Kerala at a rate not exceeding 1% for a period not exceeding two years. The same is yet to be notified.
- Extension of the composition scheme benefits to the suppliers of services and mixed supplies. The turnover limit to qualify under the scheme has been set at INR 5 million. The applicable tax rate for such suppliers would be 6% (3% CGST and 3% SGST) without ITC benefit. The same is yet to be notified.
The amendments in the GST Law, which were passed by the Parliament in August 2018, have been made applicable from 1 February 2019.
It has been clarified that the supply of food and beverages by an educational institution to its students, faculty and staff, where the educational institution itself makes such supply, is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017, vide Sl. No. 66 w.e.f. 1 June 2017 itself. However, such supply of food and beverages by any person other than the educational institutions based on a contractual arrangement with such institution is leviable to GST at the rate of 5%. [Circular No. 85/04/2019-GST dated 1 January 2019]
The CGST Act has been amended with retrospective effect to allow the transition of Central Value Added Tax (CENVAT) credit under the Central Excise and Service Tax laws, only in respect of “eligible duties.” In this regard, doubts were raised as to whether the expression “eligible duties” would include CENVAT credit of Service Tax within its scope or not. The government has now clarified as follows:
- Under tax statutes, the word “duties" is used interchangeably with the word “taxes,” and in the present context, the two words should not be read in a disharmonious manner. Therefore, CENVAT credit of Service Tax can be transitioned under GST.
- However, no transition of credit of cesses, including cess, which is collected as an additional duty of Customs, i.e., Krishi Kalyan Cess, would be allowed in accordance with the amendment to the CGST Act.
[Circular No. 87/06/2019-GST dated 2 January 2019]
The government’s GST collections in the month of January 2019 stood at INR 1.02 trillion. The government’s monthly target for GST revenue collection of INR 1 trillion was achieved for only the 3rd time in the current financial year.