CA. Vineet Rathi

30/01/2024

My today’s deliberation on preparation of Form 16 and relevant income tax provisions to the varios ministries of Central Government, Autonomous body and PSU. Wonderful interaction by the participants.

10/11/2022

HC allowed petitioner to amend GSTR-1 & rectify mistake of wrong GSTIN mentioned against invoices as no loss to revenue

Mahalaxmi Infra Contract Ltd. v. Goods and Services Tax Council - [2022] 144 taxmann.com 138 (Jharkhand)


The petitioner-company was engaged in business of mining. There was error in GSTR-1 filed for January 2019 of inadvertently mentioning GSTIN Number due to employee's mistake and this error was noticed only during settlement of accounts in 2021. The purchaser withheld payment in respect of the invoice as the invoice was not reflected in GSTR-2A return for the said period. It filed writ petition seeking relief by way of rectifying GSTR-1.

The Honorable High Court noted that the purchaser had reversed entry of ITC wrongly availed based on entries in books of account since the invoice was not reflected in his GSTR-2A return for the said period. Moreover, the party whose GSTIN was wrongly mentioned had not availed ITC wrongly reflected in its GSTR-2A. Therefore, it was held that there was no loss of revenue to Government and interest of justice would be served if the petitioner would be allowed to make the necessary correction in GSTR-1. Thus, the petitioner was allowed to rectify its GSTR-1 within period of 8 weeks from date of order

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15/09/2022

*MCA Amendment in definition of Small Company, Section 2(85) of the Companies Act, 2013*

With effect from today i.e. 15th September, 2022, MCA has amended the Companies (Specification of definition details) Rules amending the definition of _Small Company_, the limit of Paid up Capital and Turnover for the small company has been increased to Rupees Four Crores (Earlier 2 Crs.) and Rupees Forty Crores (Earlier 20 Crs.) respectively.

Notification Link: https://www.mca.gov.in/bin/dms/getdocument?mds=tiMs9IFJ8xuPm%252B%252Foxc6fUw%253D%253D&type=open

*Nevertheless to mention, as the Amendment is effective from today i.e. 15th September, 2022, the earlier threshold limit of Rupees Two Crores and Twenty Crores for Paid Up Share Capital and Turnover respectively for the purpose of Preparation of Cash Flow Statement and Reporting under CARO, 2020 for the financial year ended 31st March, 2022*

*Some of the benefits of reduction in compliance burden as a result of the revised definition for Small Companies are as under:-*

1. No need to prepare Cash Flow Statement as part of financial statements.

2. Advantage of preparing and filing an Abridged Annual Return.

3. Mandatory rotation of auditor not required.

4. An Auditor of a small company is NOT REQUIRED to report on the adequacy of the Internal Financial Controls *(IFC)* and its operating effectiveness in the auditor’s report.

5. Holding of only two board meetings in a year.

6. Annual Return of the company can be signed by the company secretary, or where there is no company secretary, by a director of the company.

7. Lesser penalties for small companies.

07/09/2022

GST : Important changes in GSTR 3B to hit on portal from 01-09-2022.

a) ITC in GST 2B for a tax period not claimable due to receipt of goods in next period or goods not received at all or because supplier has failed to pay tax:

To be claimed first in Table 4A(5) of GSTR 3B

To be reversed in Table 4B(2) of GSTR 3B

To be claimed again in Table 4A(5) in tax period in which goods are received or tax period in which supplier makes payment of tax

To be shown in Table 4D(1) in the tax period in which ITC is re-claimed.

b) Reversal of ITC wrongly availed in previous tax periods because of inadvertent mistake may be done in 4B(2)

c) Ineligible ITC u/s 17(5) to be first claimed in 4A(5) and then reversed in 4B(1). Ineligible ITC u/s 17(5) shall no longer be reflected in table 4D as was being done in old format of GSTR 3B

d) ITC ineligible due to place of supply restrictions or because of limitation period of claim of itc u/s 16(4) is shown in table 4 of GSTR 3B to be also shown in Table 4D(2) of GSTR 3B. This information shall not be entered in Table 4A or 4B of GSTR 3B

e) Reversal of ITC by banking companies u/s 17(4) read with R.38: First full amount of ITC shall be shown in Table 4A and then reversal shall be made in Table 4B(1)

f) ITC reversed under Rule 42 and 43 because of partial exempt supplies, if reversed by making entry in 4B(1) in excess may require reclaim in Table 4A(5) because of Rule 42, however no row has been kept in table 4D for reclamation of such ITC. Advisory issued by GSTN says that ITC reversed in 4B(1) is not reclaimable, however Rule 42 perceives the restoration of excess reversal.

g) Similarly if ITC blocked in 17(5) and reversed in 4B(1) is subsequently found to be eligible*, though may be reclaimed in 4A(5) but there is no row in 4D to reflect such reclaim. Advisory of GSTN says that ITC reversed in 4B(1) is not reclaimable.

h) Reclaimable reversals for *failure to pay suppliers within 180 days* may be parked in 4B(2). Reclamation at the time of payment through 4A(5) shall be supplemented by disclosure in 4D(1)

i) Lapse of ITC on opting for composition scheme or when taxable goods become exempt* shall be parked in 4B(2).

j) Reversal of ITC on inputs and capital goods held in stock on the date of *cancellation of registration* may also be effected through 4B(2)

k) Supplies of *restaurants, hotels, motorcabs etc., housekeeping* through e-commerce operators to be shown in table 3.1.1(ii) of GSTR 3B. Earlier Point 11 of Circular 167/23/2021 dated 17-12-2021 had required to reflect such supplies in table 3.1 (c) of GSTR 3B for the time being So, treatment as per Circular 167 was only ad hoc treatment.

03/09/2022

30/08/2022

Quick Summary of common error in Tax Audit Reports and few other important points

Quick Summary of Common Errors and few other important points in Tax Audit Report. Things are going tough day by day. Need to do Tax Audit very carefully...

21/08/2022

*Form 3CD- Clause 44: Templates*

*Clause 3 of Form 3CA or Clause 5 of Form 3CB*
Qualification Type – Others


*Situation- 1: Not providing information in Clause 44:*
As informed by the assessee, the information required under clause 44 of Form 3CD has not been maintained in absence of any disclosure requirement thereof under the goods and service tax statute.
Further the standard accounting software used by Assessee is not configured to generate reports as required under this clause in absence of any prevailing statutory requirement. Therefore, it is not possible to determine the break-up of total expenditure of entities registered or not registered under the GST. In view of the above we are unable to verify and report the desired information in this clause.

*Situation 2: Assesse not registered under GST and Not providing information:*
The assessee is not registered under GST and as informed by the assessee, the information required under clause 44 of Form 3CD has not been maintained in absence of any disclosure requirement thereof. Further the standard accounting software used by Assessee is not configured to generate reports as required under this clause in absence of any prevailing statutory requirement. Therefore, it is not possible to determine the break-up of total expenditure of entities registered or not registered under the GST. In view of above we are unable to verify and report the desired information in this clause.

*Situation 3: Providing information – however limitation on obtaining some information*
As informed by the assessee, the information reported under clause 44 of Form 3CD is based on the information extracted from accounting software/ relevant GST report. However this may not be accurate as the accounting software used by Assessee is not configured to generate report as required under this clause in absence of any prevailing statutory requirement. In addition, the software/system does not capture information relating to the entities falling under composition scheme or supply with ineligible credit. Therefore, it is not possible for us to verify the break-up of total expenditure of entities registered or not registered under the GST and unable to comment on accuracy of information provided therein.
Total expenditure reported under the clause includes capital expenditure however does not include depreciation, bad debt and expenditure which is not a supply as per GST.

19/08/2022

MCA Update- Amendment in Incorporation Rules, 2014

Rule 25B to be read after 25A

*25B. PHYSICAL VERIFICATION OF THE REGISTERED OFFICE OF THE COMPANY - BY ROC*

-ROC has to prepare Physical Verification Report of the Registered Office of the company in the given format.

-Report to be filed by ROC-
*Need to attachPhotograph of the Registered Office of the company to his report

*Copy of Agreement/ownership/rent agreement/NOC of the Registered Office of the company from owner/tenant/lessor-Self attested ID-card of the person available, if any

-Independent two witness of the locality

-Registered Office if not found capable than ROC issue notice to Company and Directors.

04/08/2022

Clarifications related to Real Estate Issues

Clarifications provided in the wake of Circular No. 177/09/2022-TRU and 178/10/2022-TRU both dated 03.08.2022:

A. In view of Sl. No. (5) of Schedule III of CGST Act, ‘sale of land’ does not attract GST accordingly, sale of developed land (including levelling, laying down of drainage lines, water lines, electricity lines, etc.) will also not attract the GST.

B. No GST shall be leviable on the notice pay amount.

C. No GST shall be leviable on forfeiture of sale of plots or constructed immovable property.

D. Cancellation charges or forfeiture charges recovered from the buyers by the builder/developer for under construction property shall attract the same rate which is applicable on basis sale price (BSP).

E. Location charges or preferential location charges (PLC) are eligible for the same tax treatment as applicable on BSP.

Further other clarification:

A. No GST applicable on Liquidated damages

B. No GST applicable on penalties imposed for violation of law

C. No GST applicable on forfeiture of salary or payment of bond amount by employee in case of leaving the company

D. No GST applicable on cheque dishonoured fine/penalty

E. No GST applicable on fixed power charges

F. GST on surcharge/
Late fee for making payment of electricity bill/Water bill/ Telephone bill etc will be charged as applicable on main bill

03/08/2022

Relief.....

01/08/2022

E-Invoice will be applicable on supply of above 10 Crores from 01st Oct, 22 replacing the current limit of 20 crores.

CA. Vineet Rathi
9717724704

01/08/2022

*New IT Rules for verification of ITRs*

If ITR for AY 2022-23 filed today (01.08.2022) or in months to come upto 31.12.2022 and not verified within 30 days
1. Date of verification will be taken as date of filing. So interest and late fees will be levied accordingly

CA. VINEET RATHI

2. Where these 30 days expire at any time in 2023 then ITR will be treated as never filed because post 31.12.2022 ITR cannot be filed.

*However, for returns filed upto 31.7.2022 time limit of 120 days shall be available*