Anti-profiteering

Anti-profiteering

Today we are discussed about the most important topic that is the benefit of Gst will be transferred to the ultimate buyer.

National Anti-profiteering Authority is therefore being constituted by the central Government to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him, this is to ensure that the consumer is protected from arbitrary price increase in the name of GST. The implementation of GST law has brought benefits to both consumers and businesses 

Let us understand anti profiteering with an example. The tax rate on meals in restaurants has approximately reduced to 18% from the initial 20.5%. This means the food supplier should technically sell a Rs.100 worth food item for Rs.118 now and not Rs.120.5. As per the Anti Profiteering rules, this benefit of reduced tax rate should be passed on to the consumer in the form of reduced price. 

Constitution of the Authority:

The National Anti-Profiteering Authority shall be a five member committee consisting of a Chairman who holds or has held a post equivalent in rank to a Secretary to the Government of India; and four Technical Members who are or have been Commissioners of State tax or central tax or have held an equivalent post under existing laws.

Power to determine the methodology and procedure:

 The Authority can determine the methodology and procedure for determination as to whether the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by the registered person to the recipient by way of commensurate reduction in prices.

Duties of the Authority:

The Authority would have the following duties:

(i)                  to determine whether any reduction in the rate of tax on any supply of goods or services or the benefit of input tax credit has been passed on to the recipient by way of commensurate reduction in prices;

(ii)                 to identify the registered person who has not passed on the benefit of reduction in the rate of tax on supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices;

(iii)                to order,

(a)    reduction in prices;

(b)     imposition of penalty; and

(c)     Cancellation of registration.

(d)    Return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount not returned, as the case may be, in case the eligible person does not claim return of the amount or is not identifiable, and depositing the same in the Consumer Welfare Fund;

TDS on 15G and 15H

1. What is Form 15G and Form 15H?

Form 15G and Form 15H are forms you can submit to prevent TDS deduction on your income, if you meet the conditions mentioned below. For this, PAN is compulsory. Some banks allow you to submit these forms online through the bank’s website. Form 15H is for senior citizens, those who are 60 years or older; while Form 15G is for everybody else.

Form 15G and Form 15H are valid for one financial year. So, please submit these forms every year at the beginning of the financial year. This will ensure the bank does not deduct any TDS on your interest income.

2. Conditions you must fulfill to submit Form 15G

1. You are an individual or HUF or trust or any other assessee but not a company or a firm
2. Only Resident Indians can apply
3. You should be less than 60 years old
4. Tax calculated on your Total Income is nil
5. The total interest income for the year is less than the basic exemption limit of that year, which is Rs.2.5 lakh for financial year 2019-20 (AY 2020-21)

3. Conditions you must fulfill to submit Form 15H

1. You are an individual and resident Indian
2. You’re a senior citizen or will be 60 during the year for which you are submitting the form
3. Tax calculated on your Total Income is nil

Check your total tax payable with the help of our Calculator

4. Examples to understand who can submit Form 15G and Form 15H

Person / Category	Neha	Deepak	Swathi	Rahul
Age	50 years	21 years	65 years	68 years
Salary	Rs. 1,80,000	–	–	–
Pension	–	–	1,00,000	–
Fixed Deposit interest income	Rs. 85,000	Rs. 2,60,000	Rs. 1,80,000	Rs. 3,30,000
Total Income before allowing section 80 Deductions	2,65,000	2,60,000	2,80,000	3,30,000
Deductions under section 80	Rs. 45,000	Rs. 30,000	Rs. 10,000	Rs. 55,000
Taxable income	Rs. 2,20,000	Rs. 2,30,000	Rs. 2,70,000	Rs. 2,75,000
Minimum exempt income	Rs. 2,50,000	Rs. 2,50,000	Rs. 3,00,000	Rs. 3,00,000
Eligible to submit Form 15G	Yes	No	No	No
Eligible to submit Form 15H	No	No	Yes	Yes
Explanation	Form 15G can be submitted as age is less than 60 years. Total tax is nil and interest income is less than minimum exempt income.	Form 15G cannot be submitted since interest income is more than the basic exemption limit	Form 15H can be submitted if age is more than 60 years and tax calculated on total income is nil.	Form 15H can be submitted as age is more than 60 years and tax calculated on total income is nil. Form 15H can be submitted although interest income exceeds basic exemption limit.

5. Forgot to submit Form 15G or Form 15H?

A lot of taxpayers forget to submit Form 15G and Form 15H on time. In such a situation, the bank might have already deducted the TDS. Based on your situation, you can do any of the following.

1. File your income tax return to claim refund of TDS

The only way to seek a refund of excess TDS deducted is by filing your income tax return. Banks or other deductors cannot refund TDS to you, since they have already deposited it to the income tax department. Income tax department will refund excess TDS, after you file an income tax return

2. Submit Form 15G and Form 15H immediately

Most banks deduct TDS every quarter. If you forgot to submit Form 15G or Form 15H, don’t worry. Submit it at the earliest so that no TDS is deducted for the remaining financial year.

To claim refund of excess TDS deducted, start filing your return on ClearTax

6. Purposes for which Form 15G or Form 15H can be submitted

While these forms can be submitted to banks to make sure TDS is not deducted on interest, there are a few other places too where you can submit them.

• TDS on EPF withdrawal –TDS is deducted on EPF balance if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw your EPF balance of more than Rs.50,000 (Rs 50,000 effective 1 June 2016, Rs.30,000 prior to that), you can submit Form 15G or Form15H. However, you must fulfil conditions (listed above) to apply for these forms. It means the tax on your total income including EPF balance withdrawn should be nil.
• TDS on income from corporate bonds –If you hold corporate bonds, TDS is deducted on them if your income from them exceeds Rs 5,000. You can submit Form 15G or Form 15H to the issuer requesting non-deduction of TDS.
• TDS on post office deposits –Post offices that are digitised also deduct TDS and accept Form 15G or Form 15H, if you meet the conditions applicable for submitting them.
• TDS on rent – TDS is deducted on rent exceeding Rs 2.4 lakh annually. If tax on your total income is nil, you can submit Form 15G or Form 15H to request the tenant to not deduct TDS (applicable from 1 April 2019).
• TDS on Insurance Commission – TDS is deducted on insurance commission, if it exceeds Rs 15000 per financial year. However, insurance agents can submit Form 15G/Form 15H for non deduction of TDS if tax on their total income is nil (with effect from 1 June 2017).

GSTR-3B Returns in a Staggered Manner

Ministry of Finance
Now the GST Taxpayers can file their GSTR-3B Returns in a Staggered Manner
                     #GSTUpdates #GSTR3B #DueDates #STAGGERED

Posted On: 22 JAN 2020 6:29PM by PIB Delhi
Considering the difficulties faced by trade and industry in filing of returns, the government has decided to introduce several measures to ease the process. The Finance Ministry today said that now GST taxpayers can file their GSTR-3B returns in a staggered manner.

Presently the last date of filing GSTR-3B returns for every taxpayer is 20th of every month. From now on, the last date for filing of GSTR-3B for the taxpayers having annual turnover of Rs 5 crore and above in the previous financial year would be 20th of the month. Thus, around 8 lakh regular taxpayers would have the last date of GSTR-3B filing as 20th of every month without late fees.

The taxpayers having annual turnover below Rs 5 crore in previous financial year will be divided further in two categories. The tax filers from 15 States/ UTs, i.e., Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh will now be having the last date of filing GSTR-3B returns as 22nd of the month without late fees. This category would have around 49 lakh GSTR-3B filers who would now have 22nd of every month as their last date for filing GSTR-3B returns.

For the remaining 46 lakh taxpayers from the 22 States/UTs of Jammu and Kashmir, Laddakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha having annual turnover below Rs 5 crore in previous financial year will now be having last date of filing the GSTR-3B as 24th  of the month without late fees.

The Finance Ministry said that the necessary notification in this regard would be issued later by the competent authority.

In a statement issues, the Ministry further said that it has also taken a note of difficulties and concerns expressed by the taxpayers regarding filing of GSTR-3B and other returns. The matter has been discussed by the GSTN with Infosys, the Managed Service Provider, which has come out with above solution to de-stress the process as a temporary but immediate measure. For further improving the performance of GSTN filing portal on permanent basis, several technological measures are being worked out with Infosys and will be in place by April 2020.

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Decoding of New Rule 36(4) of CGST Rules, 2017, Restriction in Availment of Input Tax Credit (ITC)

Clarification regarding New Rule 36(4) of CGST Rules, 2017, Restriction in Availment of  Input Tax Credit (ITC)

Circular No. 123/42/2019– GST, Dt. 11 Nov 2019

This being a new provision, the restriction is not imposed through the common portal and it is the responsibility of the taxpayer that credit is availed in terms of the said rule and therefore, the availment of restricted credit in terms of sub-rule (4) of rule 36 of CGST Rules shall be done on self-assessment basis by the tax payers.

Various issues relating to implementation of the said sub-rule and the clarification on each of these points is as under: –

Issue No. 1

What are the invoices / debit notes on which the restriction under rule 36(4) of the CGST Rules shall apply?

The restriction of availment of ITC is imposed only in respect of those invoices / debit notes, details of which are required to be uploaded by the suppliers under sub-section (1) of section 37 and which have not been uploaded.

Therefore, taxpayers may avail full ITC in respect of IGST paid on import, documents issued under RCM, credit received from ISD etc. which are outside the ambit of sub-section (1) of section 37, provided that eligibility conditions for availment of ITC are met in respect of the same.

The restriction of 36(4) will be applicable only on the invoices / debit notes on which credit is availed after 09.10.2019.

Issue No. 2

Whether the said restriction is to be calculated supplier wise or on consolidated basis?

The restriction imposed is not supplier wise. The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers. Further, the calculation would be based on only those invoices which are otherwise eligible for ITC.

Accordingly, those invoices on which ITC is not available under any of the provision (say under sub-section (5) of section 17) would not be considered for calculating 20 per cent. of the eligible credit available.

Issue No. 3

FORM GSTR-2A being a dynamic document, what would be the amount of input tax credit that is admissible to the taxpayers for a particular tax period in respect of invoices / debit notes whose details have not been uploaded by the suppliers?

The amount of input tax credit in respect of the invoices / debit notes whose details have not been uploaded by the suppliers shall not exceed 20% of the eligible input tax credit available to the recipient in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub- section (1) of section 37 as on the due date of filing of the returns in FORM GSTR-1 of the suppliers for the said tax period.

The taxpayer may have to ascertain the same from his auto populated FORM GSTR 2A as available on the due date of filing of FORM GSTR-1 under sub-section (1) of section 37.

Issue No. 4

How much ITC a registered tax payer can avail in his FORM GSTR-3B in a month in case the details of some of the invoices have not been uploaded by the suppliers under subsection (1) of section 37.

Sub-rule (4) of rule 36 prescribes that the ITC to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under subsection (1) of section 37, shall not exceed 20 per cent. Of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under subsection (1) of section 37.

The eligible ITC that can be availed is explained by way of illustrations, in a tabulated form, below.

In the illustrations, say a taxpayer “R” receives 100 invoices (for inward supply of goods or services) involving ITC of Rs. 10 lakhs, from various suppliers during the month of Oct, 2019 and has to claim ITC in his FORM GSTR-3B of October, to be filed by 20th Nov, 2019.

Case	Details of suppliers’ invoices for which recipient is eligible to take ITC	20% of eligible credit where invoices are uploaded	Eligible ITC to be taken in GSTR-3B to be filed by 20th Nov.
I	Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 6 lakhs as on the due date	Rs.1,20,000/-	Rs. 6,00,000 (i.e. amount of eligible ITC available, as per details uploaded by the suppliers) + Rs.1,20,000 (i.e. 20% of amount of eligible ITC available, as per details uploaded by the suppliers) = Rs. 7,20,000/-
II	Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 7 lakhs as on the due date	Rs.1,40,000/-	Rs 7,00,000 + Rs. 1,40,000 = Rs. 8,40,000/-
III	Suppliers have furnished in FORM GSTR-1 75 invoices having ITC of Rs. 8.5 lakhs as on the due date	Rs. 1,70,000/-	Rs. 8,50,000/- + Rs.1,50,000/-* = Rs. 10,00,000 * The additional amount of ITC availed shall be limited to ensure that the total ITC availed does not exceed the total eligible ITC.

Issue No. 5

When can balance ITC be claimed in case availment of ITC is restricted as per the provisions of rule 36(4)?

The balance ITC may be claimed by the taxpayer in any of the succeeding months provided details of requisite invoices are uploaded by the suppliers. He can claim proportionate ITC as and when details of some invoices are uploaded by the suppliers provided that credit on invoices, the details of which are not uploaded (under sub-section (1) of section 37) remains under 20 per cent of the eligible input tax credit, the details of which are uploaded by the suppliers.

Full ITC of balance amount may be availed, in present illustration by “R”, in case total ITC pertaining to invoices the details of which have been uploaded reaches Rs. 8.3 lakhs (Rs 10 lakhs /1.20). In other words, taxpayer may avail full ITC in respect of a tax period, as and when the invoices are uploaded by the suppliers to the extent Eligible ITC/ 1.2. The same is explained for Case No. 1 and 2 of the illustrations provided at Sl. No. 4 above as under:

Case-I	“R” may avail balance ITC of Rs. 2.8 lakhs in case suppliers upload details of some of the invoices for the tax period involving ITC of Rs. 2.3 lakhs out of invoices involving ITC of Rs. 4 lakhs details of which had not been uploaded by the suppliers. [Rs. 6 lakhs + Rs. 2.3 lakhs = Rs. 8.3 lakhs]
Case-II	“R” may avail balance ITC of Rs. 1.6 lakhs in case suppliers upload details of some of the invoices involving ITC of Rs. 1.3 lakhs out of outstanding invoices involving Rs. 3 lakhs. [Rs. 7 lakhs + Rs. 1.3 lakhs = Rs. 8.3 lakhs]

Issues not clarified

This circular has failed to address the situation where suppliers have opted for quarterly filing of GSTR-1 while the recipient files monthly GSTR-1. This will create hardship for small taxpayers as recipients would try to get supplies from the dealers (big dealers) who opt for monthly filing of GSTR-1.  

Impact of 20% Rule

Restriction imposed in Rule 36(4) will certainly impact working capital of taxpayers as they have to pay more taxes when suppliers file belated returns in Form GSTR-1. Moreover, the taxpayer would not be able to claim refund of excess tax paid by them due to default of the suppliers. Also, this reconciliation exercise of ITC is going to consume lot of man hours every month.

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Income under the House Properties

Basis of Charge [Section 22]:

Income from house property shall be taxable under this head if following conditions are satisfied:

a) The house property should consist of any building or land appurtenant thereto;

b) The taxpayer should be the owner of the property;

c) The house property should not be used for the purpose of business or profession carried on by the taxpayer.

Computation of income from house property:

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Income from a house property shall be determined in the following manner:

Particulars	Amount
Gross Annual Value	-
Less: Municipal Taxes	-
Net Annual Value	****
Less: Standard deduction at 30% [Section 24(a)]	-
Less: Interest on borrowed capital [Section 24(b)]	-
Income from house property	****

Gross Annual value [Sec. 23(1)]

The Gross Annual Value of the house property shall be higher of following:

a) Expected rent, i.e., the sum for which the property might reasonably be expected to be let out from year to year. Expected rent shall be higher of municipal valuation or fair rent of the property, subject to maximum of standard rent;

b) Rent actually received or receivable after excluding unrealized rent but before deducting loss due to vacancy

Out of sum computed above, any loss incurred due to vacancy in the house property shall be deducted and the remaining sum so computed shall be deemed to the gross annual value.

Deductions:

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Description	Nature of Deductions
Municipal Taxes	Municipal taxes including service-taxes levied by any local authority in respect of house property is allowed as deduction, if: a) Taxes are borne by the owner; and b) Taxes are actually paid by him during the year.
Standard Deduction[Section 24(a)]	30% of net annual value of the house property is allowed as deduction if property is let-out during the previous year.
Interest on Borrowed Capital * [Section 24(b)]	a) In respect of let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction shall be allowed as deduction
	b) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of acquisition or construction of house property shall be allowed as deduction up to Rs. 2 lakhs. The deduction shall be allowed if capital is borrowed on or after 01-04-1999 and acquisition or construction of house property is completed within 5 years.
	c) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property shall be allowed as deduction up to Rs. 30,000.

Note: With effect from Assessment Year 2020-21, deduction for interest paid or payable on borrowed capital shall be allowed in respect of two self-occupied house properties. However, the aggregate amount of deduction under this provision shall remain same i.e., Rs. 30,000 or Rs. 2,00,000, as the case may be.

* Any interest pertaining to the period prior to the year of acquisition/ construction of the house property shall be allowed as deduction in five equal installments, beginning with the year in which the property was acquired/ constructed.

* Deduction for interest on borrowed capital shall be limited to Rs. 30,000 in following circumstances:

a) If capital is borrowed before 01-04-1999 for the purpose of purchase or construction of a house property;

b) If capital is borrowed on or after 01-04-1999 for the purpose of re-construction, repairs or renewals of a house property;

c) If capital is borrowed on or after 01-04-1999 but construction of house property is not completed within five years from end of the previous year in which capital was borrowed.

Deduction for interest on housing loan [Section 80EE]

Deduction of up to Rs 50,000 shall be allowed to an Individual for interest payable on loan taken for the purpose of acquisition of a house property subject to following conditions:

 a)  Loan has been sanctioned by Financial institution during the financial year 2016-17;

 b)  The amount of loan sanctioned does not exceed Rs 35,00,000;

 c)  The value of residential property does not exceed Rs 50,00,000;

 d)  The assessee does not own any residential house property on the date of sanction of loan;

 e)  Where deduction has been allowed under this section, no deduction shall be allowed in respect of such interest under any other provision.

Computation of Income from House Property
S. No.	Property Type	Gross Annual Value of the property	Deduction for municipal taxes	Net Annual Value of the property	Standard Deduction	Interest on borrowed capital
1.	Two self-occupied house property	Nil	Nil	Nil	Nil	Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.
2.	House property could not be occupied by the owner due to employment or business carried on at any other place	Nil	Nil	Nil	Nil	Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.
3.	Let out property	To be computed as per provisions of Section 23(1)	Allowed on actual payment basis	Gross annual value less Municipal taxes	30% of Net Annual Value	Entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments (Subject to certain conditions).
4.	More than two-self occupied properties	Only two properties selected by the taxpayer will be considered as self-occupied house properties and all other properties shall be deemed to be let-out for the purpose of computation of income under the head house property.
5.	A self-occupied property let-out for the part of the year	The house will be taken as let-out property and no concession shall be available for the duration during which the property was self-occupied.
6.	One part of the property is let-out and other part is used for self-occupied purposes	Each part of the property shall be considered as separate property and income will be computed accordingly

Composite Rent

If letting out of building along with movable assets i.e., machinery, plan, furniture or fixtures, etc. forms part of a single transaction and are inseparable, the composite rent shall be taxable under the head “Profits and gains from business or profession” or “Income from other sources”, as the case may be. On the other hand, if the letting out of building is separable from letting of other assets, then income from letting out of building shall be taxable under the head “Income from house property” and income from letting out of other assets shall be taxable under the head “Profits and gains from business or profession” or “Income from other sources”, as the case may be.

Treatment of unrealized rent and arrears of rent [Explanation to section 23(1)]

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Deduction for unrealized rent:

Unrealized rent is that portion of rental income which the owner could not realize from the tenant. Unrealized rent is allowed to be deducted from actual rent received or receivable only if the following conditions are satisfied:

a) The tenancy is bona fide;

b) The defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;

c) The defaulting tenant is not in occupation of any other property of the assessee;

d) The taxpayer has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless.

Arrears of rent or recovery of unrealized rent [Section 25A]

Amount received in respect of arrears of rent or any subsequent recovery of unrealized rent shall be deemed to be the income of taxpayer under the head "Income from house property" in the year in which such rent is realized or received (whether or not the assessee is the owner of that property in that year).

Further, 30% of such rent shall be allowed as deduction.

Co-owner and Deemed Owner

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Property owned by co-owners [Section 26]:

If house property is owned by co-owners and their share in house property is definite and ascertainable than the income of such house property will be assessed in the hands of each co-owner separately. For the purpose of computing income from house property, the annual value of the property will be taken in proportion to their share in the property. In such a case, each co-owner shall be entitled to claim benefit of self-occupied house property in respect of their share in the property (subject to prescribed conditions). However, where the shares of co-owners are not definite, the income of the property shall be assessed as that of an Association of persons.

Deemed owner [Section 27]:

Income from house property is taxable in the hands of its owner. However, in the following cases, legal owner is not considered as the real owner of the property and someone else is considered as the deemed owner of the property to pay tax on income earned from such house property:

1. The holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate;

2. A member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme shall be deemed to be the owner of that building or part thereof;

3. A person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882 shall be deemed to be the owner of that building or part thereof;

4. A person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in section 269UA(f), shall be deemed to be the owner of that building or part thereof.

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