KSA Infomatrix

The income tax (I-T) department has notified forms for companies to avail the reduced corporate tax rates that were announced in September last year. The Central Board of Direct Taxes (CBDT) has notified Forms 10-IC and 10-ID for existing companies that want to avail lower I-T rate and new manufacturing firms, respectively. In September 2019, the government announced a cut in base corporate tax for existing companies to 22 per cent from the current 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019, and starting operations before March 31, 2023, to 15 per cent from the current 25 per cent. Companies opting for these new tax rates will have to forego all exemptions and incentives. The effective tax rate for existing units, after considering surcharges and cess such as Swachh Bharat cess and education cess -- which are levied on top of the income and corporate tax rates, will be 25.17 per cent as compared to 34.94 per cent now. For new units, it wi...

India Inc is set to face first ever tax audit under the goods and services tax (GST) regime. The GST authorities have begun issuing notices for the tax audit exercise, which involves detailed scrutiny of the accounts and records for FY18. Tax authorities have issued notices seeking audit of accounts and records from July 2017 till March 2018, the first year of GST implementation. India had rolled out GST, subsuming multiple state and central taxes, from July 1, 2017. “The notices are being issued for the first time, and taxpayers are being asked to furnish detailed records of GST forms, income tax papers, input service invoices, electronic cash/credit ledger and business agreements, among others,” a person familiar with the development said. Tax authorities had issued a detailed GST manual earlier in June, making it clear that at least 70% of taxpayers in each commissionerate have to be audited. However, extensions given for filing of returns for 2017-18 in 2019 several tim...

India’s Finance Ministry has delivered a challenge to its revenue collectors: meet tax targets despite $20 billion of corporate tax cuts. Through a video conference on Dec. 16, officials were exhorted to meet the direct tax mop-up target of Rs 13.4 lakh crore ($187 billion), a government official told reporters. Collection in the eight months to November grew at 5% from a year earlier, against the desired 17%. The missive shows Prime Minister Narendra Modi’s urgent need to buoy public finances in a slowing economy where April-November tax collections were half the amount budgeted. Authorities withheld some payments to states and have capped ministries’ expenditure as the fiscal deficit ballooned beyond target. The government’s efforts to maintain its deficit goal goes against advice from some quarters, including central bank Governor Shaktikanta Das, who urged more spending to spur economic growth. It’s uncertain though how much room Modi’s administration has to boost expen...

Q.1 Is NRC a part of the CAA? Ans . No. CAA is a separate law and NRC is a separate process. The CAA has come into force nationwide after its passage from Parliament, while the NRC rules and procedures for the country are yet to be decided. The NRC process that is going on in Assam has been implemented by the Honourable Supreme Court and mandated by the Assam Accord. Q.2 Do Indian Muslims need to worry about CAA+NRC? Ans . There is no need for an Indian citizen of any religion to worry about CAA or NRC. Q.3 Will NRC be for people of a particular religion? Ans . No. NRC has nothing to do with any religion at all. NRC is for every citizen of India. It is a citizen register, in which names of every will be recorded. Q.4 Will people be excluded in NRC on religious grounds? Ans . No, NRC is not about any religion at all. Whenever NRC will be implemented, it will neither be applied on the basis of religion nor can it be implemented on the basis of religion. No one can be ex...

India’s banks are set for a $7.6 billion earnings windfall this month as the country’s bankruptcy court has made sudden progress in clearing a backlog of large cases. The lenders are expected to benefit from the recovery process from four failed companies - Essar Steel India Ltd., Prayagraj Power Generation Co., Ruchi Soya Industries Ltd. and RattanIndia Power Ltd. - which should be completed in December, according to people familiar with the matter. The gains will be welcome news for banks, which are facing a further increase in their $130 billion pile of bad loans thanks to India’s shadow banking crisis and the slowdown in the economy. Many lenders are expected to set aside additional provisions in their earnings reports for this quarter. The total proceeds from the bankruptcy cases should total Rs 54,000 crore ($7.6 billion), according to Karthik Srinivasan, group head of financial sector at ICRA Ratings, the local arm for Moody’s Investors Service. The banks should be able ...

Under fire over delay in GST compensation, the government today released Rs 35,298 crore to states. Facing heat over delay in compensation, the government today released Rs 35,298 crore to states. The matter was likely to be taken up in the upcoming GST Council meeting where states, especially the Opposition-ruled ones, expected to try and pin the Centre down over the delay in the release of compensation. Speaking at the India Economic Conclave event of the Times Network, finance minister Nirmala Sitharaman, today, acknowledged the delay in payment of compensation on account of shortfall in GST collection. She said that the government at the Centre and the states are working to augment the GST revenue. She said that the shortfall is due to extension granted in filing of returns to flood-hit states and slowdown in consumption faced by certain sectors. On the issue of rates rejig, the finance minister said that the buzz of a rate restructuring is everywhere except at he...

Refutes reports alleging that tax authorities want to impose GST on salaries paid to employees The Finance Ministry on Friday made it clear that Goods & Services Tax (GST) will not be levied on salary. This clarification has come in the wake of reports that GST has been demanded on salaries paid to CEOs (Chief Executive Officer) or employees of a company. “…media report in this regard alleging that tax authorities want to impose GST on salaries paid to employees is factually incorrect and misrepresents the tax authorities,” the Central Board of Indirect Taxes and Custom (CBIC) said in a statement. The indirect tax policy body under the Finance Ministry emphasised the GST law position, which clearly states under Section 7(2) read with Schedule III of the Central Goods and Services Act, 2017 (CGST Act) that salaried services by an employee to the employer shall be treated neither as a supply of goods nor as a supply of services. So, salaries as such cannot be subject to GST...