PUNE BRANCH OF WIRC OF ICAI ...puneicai.org/wp-content/uploads/Newsletter-April-2018.pdfPUNE BRANCH...

PUNE BRANCH OF WIRC OF ICAIPUNE BRANCH OF WIRC OF ICAI

The Institute of Chartered Accountants of India(Set up by an Act of Parliament)

NEWSLETTERNEWSLETTERIssue No. 4 - April 2018

(Subscribers copy not for sale)

1

PUNE BRANCH OF WIRC OF ICAI

Forthcoming Programmes

SR. NO.

DATE SEMINAR NAME VENUE TIME FEESCPEHRS.

Notes:-

1) Programme timing includes 1st half an hour Registration.

2) For online registrations & detailed programme structure visit www.puneicai.org

5.

2.

4.

Company Law Refresher CourseICAI Bhawan,Bibwewadi,

Pune

19th & 20th May, 2018

1.

3.

“Reality is created by the mind, we can change our reality by changing our mind."

Felicitation of WIRC Members

CA. Priyam Shah

Vice Chairman - WIRC

CA. Sandeep Jain

Chairman - WIRC

CA. Purushottam Khandelwal

Secretary - WIRC

CA. Balkishan Agarwal

Treasurer - WIRC

CA. Vikrant Kulkarni

Chairman-(WICASA)

Certificate Course on Anti Money laundering laws

Under Finalisation Rs. 10,000/- Plus GST20th May, 2018 To

9th June, 2018 (Every Sat & Sun)

9.30 am To 5.30 pm30

Hrs.

National Conference Shegaon Under Finalisation11th & 12th August,

20186.

7th & 8th July, 2018

Women CA RRC jointly with Nashik Branch

Nashik 2 Days Under Finalisation12

Hrs.

12Hrs.

2 Days

9th & 10th June, 2018

Shirdi 2 Days Under Finalisation12

Hrs.National Conference

16th & 17th June, 2018

Pune 2 Days Under Finalisation12

Hrs.National Conference on Direct Taxes

8.30 am To 3.30 pmEarly Bird Fees Rs. 1200/- Plus GST Till 13th May, 18

12Hrs.

2

Congratulations

Pune Branch of WIRC of ICAI glad to announce

Best Branch & Best Students Association Award 2nd Prize

at Regional Level in Large Branch Category

Branch Orientation Programme Organized by WIRC of ICAI

Presentation of Pune Branch

3

Chairman CommuniqueChairman Communique

CA. Anand R Jakhotiya

Chairman

Pune Branch of WIRC of ICAI

Respected Colleagues,

Last month, we had some mega events on Banking. Immediately fifth rd

day of taking Charge i.e. on 3 March, we had Mega Banking Summit at

Hotel Sheraton which was graced by valuable guidance from Banking

Veterans including MDs, Directors and GMs from various nationalised

and other leading banks.

We had orientation and campus placement programme at Pune under the guidance of CPABI (Committee for Professional Accountants in Business Industry). Over Two Hundred newly qualified CAs got benefitted from this orientation and campus placement program. Many Blue Chip listed companies participated including Infosys, TCS, Thermax, Godrej, Tata Motors and many candidates got placed at high packages.

We also had Inter Firm One Act Play Competition. In spite of hectic schedules, so many CAs and CA students have given fantastic performances.

We had given various awards like First Prize Winner, Second Prize Winner, Best Director, Best Actor, Best Actress, Backstage Artist, Best Light Effects, Best Writer etc.

Two Days Bank Audit Conclave at Yashada, was well participated by Four Hundred plus members. It covered various important and relevant topics in interactive manner.

We have planned many events including four National Conferences in coming few months. We have also planned a Saturday Series which will cover various full day and half day CPE events and details of all those events are given separately. It's my earnest request to all the respected members to participate in all the upcoming events in big number like we had in Bank Audit Conclave.

As you are aware, Chartered Accountant Benevolent Fund (CABF) has been created on the concept of 'For the Peer by the Peer' to help our members or their families at the time of need. It is our earnest duty to augment the funds for CABF by making regular contributions. I appeal hereby to All of You to not just become Life Members of CABF but also make voluntary contributions on regular basis.

Kindly also take benefit of the Grievance Cell. For any query, issue, suggestion members and students can kindly meet me at branch on every Thursday and Saturday from 3pm to 6pm.

With Warm Regards,

CA. Anand R. Jakhotiya

Chairman Pune Branch of WIRC of ICAI

4

Sub-Committees of Pune Branch of WIRC of ICAI for the year 2018-2019

CA. Shobhna Gado

Chairman

CA. Sachin Parkale 8888455555 [email protected]

Sr. No.

Name

CA. Charuhas Upasani 9422011860 [email protected]

CA. Suraj Agrawal 9422182447 [email protected]

CA. Abhijeet Kasat 9422318817 [email protected]

Designation Contact No. Email Id

CA. Suraj Agrawal

CA. Abhijeet Kasat

[email protected]

[email protected]

CA. Rajesh Sharma 9920534595 [email protected]

CA. Nilesh Saboo 9923595077 [email protected]

CA. Rajesh Sharma

CA. Nilesh Saboo

[email protected]

[email protected]

CA. Sachin Parkale 8888455555 [email protected]

CA. Shirish Padey 9822031689 [email protected]

CA. Anirudha Asgekar 9420010966

CA. Shirish Padey

CA. Anirudha Asgekar

[email protected]

[email protected]

[email protected]

CA. Amruta Panse 9922416186 [email protected]. Amruta Panse

Vice Chairperson

Vice Chairperson

[email protected]

“Don't judge each day by the harvest you reap but by the seeds that you plant.”

5

CA. Rajesh Agrawal 9823975174

CA. Arun Anandagiri 8796005669 [email protected]


[email protected]

CA. Dhiraj Dandgaval 8055320899 [email protected]

CA. Prajakta Jagtap 9881120660 [email protected]

CA. Dhiraj Dandgaval

CA. Prajakta Jagtap

[email protected]

[email protected]

[email protected]

[email protected]

CA. Kashinath Pathare 9890625758 [email protected]

CA. Kiran Khule 8805185777 [email protected]

CA. Kashinath Pathare

CA. Kiran Khule

“Giving up doesn't always mean you're weak. Sometimes you're just strong enough to let go."


[email protected]

[email protected]

CA. Riya Oswal 9890220081

CA. Riya Oswal

CA. Rahul Tungatkar 9822286205

[email protected]

CA. Rahul Tungatkar

[email protected]

6


About CABF:

Note:-

Earnest appeal to Members of ICAI to Contribute for “Chartered Accountants Benevolent Fund (CABF)”

Chartered Accountants' Benevolent Fund (CABF) established in 1962 by

ICAI, is one of the largest body providing welfare and support to the

Chartered Accountants Fraternity. It provides financial assistance for

medical treatment, education, maintenance or any other similar purpose to

necessitous persons of the CA fraternity. Financial assistance in lump sum

is also given to the widows/relatives of the deceased member in case of

accidental/unnatural death at age below 55 years. A considerable number

of members/families are already getting such assistance from CABF.

All subscription and contribution made towards CABF is eligible for deduction under Section 80 (G) of Income Tax Act, 1961.

“If you can't fly, then run; if you can't run, then walk; if you can't walk,

then crawl; but whatever you do, you have to keep moving forward.”

7

VAT in United Arab Emirates (UAE) – Experience and learnings

Contributed By : CA. Pritam MahureEmail : [email protected]

Phew! Its been more approx. four months since successful introduction of Value Added Tax st(VAT) in United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) from 1 January

2018. Now, the business organisations in UAE and KSA are moving from the pre-VAT era to

now, towards post VAT-era wherein VAT is becoming a day-to-day part of each business

function.

stTill 31 December 2017, there was neither direct tax nor indirect tax in UAE. Thus, for a

country (and rather for the Gulf region), bringing an indirect tax was a biggest socio-

economic change! But did UAE fare well in bringing VAT? Lets understand!

Single rate!

What has worked well with UAE is the fact that it brought VAT with one single rate of 5%! No

other rate! Even the exemptions in UAE are restricted to a list of four items only (one of them

is residential leasing). This has ensured lesser complications in the VAT law. Further, the

reasonable rate of VAT i.e. 5% has ensured higher compliances.

Reverse Charge Mechanism (RCM) is only a disclosure!

In UAE, RCM is not required to be paid in cash (if credit is available). Thus, effectively, RCM

only is a disclosure for VAT return purposes. This also has simplified the VAT compliances to

some extent for the businesses.

One page return!

In UAE only one VAT return is to be filed and its just a one page return. This may sound like a

dream to be true for Indian GST payers. UAE has stayed away from the concept of matching

of invoices, rather, invoice level details are not required to be submitted at the time of filing of

VAT return!

Staggered VAT return filing!

As per recent statistics, more than 2.81 lacs taxpayers registered for VAT in UAE. Given this,

for VAT return filing, the Federal Tax Authorities (FTA) staggered VAT return period for

taxpayers i.e. the system allotted quarterly filing for few taxpayers and for others monthly,

four monthly etc is allotted.

This step of FTA has ensured that there is no overload on the VAT return filing common portal.

This has resulted in more than 98.8% taxpayers filing their first VAT return. This compliance

of 98.8% is one of the highest tax compliance rate in the world!

Prices inclusive of VAT!

For business to consumer (B2C) transactions, the UAE VAT law in UAE mandates that the

displayed prices should be inclusive of VAT. This provision has ensured that the customer

precisely knows how much he is paying for the goods or food etc he is buying.

8

Though few instances were noted, wherein the shopkeepers were fleecing the customers,

however, thanks to the social media savvy consumers, these shopkeepers were penalized by

FTA for their mis-adventures.

Substantive FTA initiatives!

During the transition as well as post-transition, the Federal Tax Authorities (FTA) have regularly

addressed seminars and thrown light on key issues concerning businesses through various VAT

guides and VAT flyers. This has also helped put many doubts on VAT applicability on to rests!

Few challenges!

It cannot be said that there were no challenges in the initial phases of VAT in UAE. Like any

country introducing VAT, in UAE also witnessed and continue to witness few challenges and

confusion on free trade zone, imports, supplies to other GCC countries, determining place of

supply etc

Gulf Co-operation Council (GCC) countries yet to become one common market!

Few challenges are being faced by businesses in GCC as Kingdom of Saudi Arabia (KSA) and

UAE are yet to recognize each other as VAT Implementing States and other 4 signatories to GCC

VAT framework i.e. Oman, Bahrain, Kuwait and Qatar are yet to provide clear roadmap for VAT

introduction.

Way forward for VAT in GCC

It is pertinent to note that the successful introduction of VAT in UAE and KSA, will be considered

as a positive development by the other four signatories to GCC VAT framework i.e. Oman,

Bahrain, Kuwait and Qatar and these countries are likely to introduce VAT in 2019 or onward.

While current economic situation is characterised by volatile global economic conditions,

introduction of VAT remains a new challenge for business to gear-up for businesses in Oman,

Bahrain, Kuwait and Qatar.

Learnings for Indian GST!

In the last more nine months since the introduction, GST has witnessed numerous changes in

each and every aspect of GST, be it rates, rules, notifications, exemptions, GST returns, date of

GST returns etc. Additionally, writ petitions and more recently Advance Rulings also to some

extent impacted the GST legislation.

In next few months as changes in GST are likely to continue as RCM, TDC/TCS, GSTR-2, GST

Audit, simplification (!) of GST returns is under consideration of the Government. Certainly, the

Government should strongly consider sending team of GST officers to UAE and KSA to ensure

that the best methodologies can be replicated in India.

“Giving up doesn't always mean you're weak. Sometimes you're just strong enough to let go."

9

Revision in the Package Scheme of Incentives, 2013[Under the new GST Regime]

Contributed by :- CA. Aalhad Deshmukh

Email :- [email protected]

For dispersion of industries to the less developed industrial areas of the state, Government of Maharashtra has been stimplementing Package Scheme of Incentives since 1964. With effect from 1 April 2013, Maharashtra Industrial

Policy of 2013 came into effect which is popularly known as the Package Scheme of Incentives, 2013 ('PSI 2013').

Amongst all the benefits available under PSI 2013, IPS through Refund of VAT is the main benefit available to eligible stunits. India joined the elite club of modern nations to implement Goods & Service Tax (GST) with effect from 1 July

2017. Maharashtra Value Added Tax (MVAT) was replaced by Goods and Service Tax. Accordingly, VAT based incentives under PI 2013 were expected to be revised to GST based incentives with appropriate changes.

thAccordingly, Government of Maharashtra issued GR No. PSI-2017 / No. 197 / Ind.-8 dated 14 February 2018. Under this GR, other benefits under PSI 2013 were kept intact; and only VAT based incentives were revised as follow.

For Mega and Ultra Mega Projects

Units who have obtained EC under PSI 2001, PSI 2007 and PSI 2013 and the units who will obtain EC under the remaining period of PSI 2013 shall be eligible for the following tax based incentives:

The above incentives shall be subject to the following conditions:

1. Total Annual Incentives shall be limited to Total Incentives available under EC divided by number of years of

Operative Period under EC.

2. If eligible incentives for a given year exceed the average as calculated above, such excess shall be carried

forward to the next year.

3. For Automobile Manufacturing Industry, SGST shall be refundable only on the vehicles manufactured within

the state and registered with RTO Offices.

4. No incentives shall be applicable on units having separate business verticals, paying SGST on inter-unit

transfer even if GST is applicable on such transfer.

For Large Scale Industrial Units

Please refer Para 4.4 of Government Resolution No.: PSI -2013/ (CR- 54 )/IND-8. IPS for LSI units has been revised as under:

Old VAT Based Incentives GST Based Incentives

100% or 50% of VAT 100% or 50% of Gross SGST on Intrastate sales. (on the basis of group-wise location of the unit)

100% of VAT 100% of Net SGST on Intrastate sales

Sr. No. Taluka / Area Old VAT based annual IPS GST based annual IPS

1 Naxalism Affected Area 100% VAT on local sales minus Input Tax Credit (ITC) or zero whichever is more + CST payable

100% of Net SGST paid

2 No Industries Districts, Vidarbha and Marathwada

90% VAT on local sales minus ITC or zero whichever is more + CST payable


3 Group D+ Taluka (Other than Sr. No. 1 and 2)



4 Group D Taluka (Other than Sr. No. 1 & 2)



5 Group C Taluka 60% VAT on local sales minus ITC or zero whichever is more + CST payable


10

“Every great dream begins with a dreamer. Always remember, you have within you the strength,

the patience, and the passion to reach for the stars to change the world.”

For MSME Units

thThe GR has been a game changer for the MSME units. In the revision GR dated 14 February 2018, no differentiation has been made between units situated in different talukas. Please refer Para 4.3 of Government Resolution No.: PSI -2013/ (CR- 54 )/IND-8. IPS for MSME units have been revised as under:

For units eligible for Exemption / Deferred Tax

Decision with respect to inclusion of 2% refund of GST on Intrastate Sales has been withheld by the Government.

stThe above revisions will be applicable with effect from 1 July 2017.

The said GR is available on the website of the Government of Maharashtra. Please follow the link below to access the Original GR in Marathi:

https://www.maharashtra.gov.in/Site/Upload/Government%20Resolutions/English/201802141615482210...pdf

Sr. No. Taluka / Area Old VAT based annual IPS GST based annual IPS

1 Naxalism Affected Area VAT on local sales minus Input Tax Credit (ITC) or zero whichever is more + CST payable + 100% of ITC

100% on Gross SGST on Intrastate sale.

[Irrespective of location of the industrial unit]

2 No Industries Districts VAT on local sales minus ITC or zero whichever is more + CST payable + 75% of ITC

3 Entire Vidarbha and Marathwada (Other than Sr. No. 1 & 2.)

VAT on local sales minus ITC or zero whichever is more + CST payable + 65% of ITC

4 Group D+ Taluka (Other than Sr. No. 1 and 3)


5 Group D Taluka (Other than Sr. No. 1 & 3)


6 Group C Taluka VAT on local sales minus ITC or zero whichever is more + CST payable + 30% of ITC

7 Group B Taluka VAT on local sales minus ITC or zero whichever is more + CST payable + 20% of ITC

Type of Unit Revised GST Based Incentives

Units having Tax Exemption 100% of Gross SGST on Intrastate sales

Units have Tax Deferral 100% of Gross SGST on Intrastate sales as per erstwhile Sales Tax Deferral

11

“The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try.

Once you find something you love to do, be the best at doing it."

Closing Remarks

By issuing this GR, the State Government has concluded all the discussions and speculations with respect of effect

of GST on PSI 2013. The revisions prima-facie look fascinating and industrial units in the state are not expected to

be affected adversely as speculated earlier. Revisions with respect to GST based incentives for MSMEs is a

welcome step by the Government which will boost the Make in India – Make in Maharashtra movement under Ease

of Doing Business.

Existing units having already applied under various earlier package schemes are requested to check expected IPS

claim under the new GST regime with reference to this revision GR. New units proposing to set up operations in

the state should calculated expected benefits on the basis of expected sales and applicable GST thereon.

Mega Banking Summit

Inauguration Participants

Mr. R. P. MaratheSpeaker

CA. K. RaghuSpeaker

CA. S. B. ZawarePanelist

CA. Anil BhandariSpeaker

Mr. SatheSpeaker

Mr. Suman Chowdhury

Speaker

Mr. Bhushan KolekarSpeaker

Mr. B. N. BoraSpeaker

CA. Maheshwar Marathe

Panelist

CA. Jagdish Dhongde

Panelist

Mr. Atul Khirwadkar

Speaker

CA. Dr. D. V. SatbhaiSpeaker

13

Interactive Meet of WIRC Chairman with Past Chairman's of Pune Branch

Orientation Programme for Newly Qualified Chartered Accountants

Inauguration Participants

CA. Dr. J. SridharChief Guest

CA. Prakash HamirwasiaSpeaker

CA. C. V. ChitaleSpeaker

CA. Anil KulkarniSpeaker

CA. Yashwant KasarSpeaker

CA. Paul AlvaresSpeaker

Women's Day Special Programme

CA Poorva Bhatewara-GadiyaSpeaker

Ms. Sonika ShahSpeaker

Felicitations of Senior Women Cas

Participants

Seminar on “LFAR & NPA Provisions”

CA. G. B. RathiSpeaker

“Being defeated is often a temporary condition. Giving up is what makes it permanent."

14

GST Shastra : Mystery of applicability of GST on Transferable Development

Rights (TDR)

Contributed by :- CA. Yogesh Ingale


· Introduction - What is TDR?

When an owner of land transfers his rights of developing a land to a government, local authority or corporation, they use the same land for infrastructure projects such as road widening, metro rail projects, park, garden, schools, new roads orforany other projects of public utility. DRC (Development rights certificate) will then be issued to owner of the land, the main purpose of whole process is to acquire the required amount of land in hassle free manner. Now this DRC will allow the land owner an additional built up area in return of the area for which he has relinquish his rights and enables him to develop the given area by himself of transfer his rights for consideration.

DRC issued to land owner, which is transferable, is known as transferable development rights (TDR), which can be transferred to another entity.

· Legal ambiguity :

a) Whether supply of TDR is to be treated as supply of goods or supply of services?

For the purpose of applicability of GST, there must be supply of either goods or services. As per definitions, “goods” means every kind of movable property. Definition of movable property is not provided under CGST Act, 2017. As per section 3(36) of The General Clauses Act, 1897, movable property shall mean property of every description, except immovable property.

As per section 2(102)of CGST Act, 2017, “services” means anything other than goods, money, and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.

While question remain unanswered as to whether TDR is to be regarded as goods or services, as per various judicial pronouncements, TDR is termed as immovable property.

b) Entry 2(a) of Schedule II Vs. Entry 5 of Schedule III of CGST Act, 2017 -

Schedule III of CGST Act, 2017 which prescribes certain supply to be treated neither as supply of goods nor supply of service includes sale of land and building and hence not leviable to GST.

Further, schedule II of CGST Act, 2017 makes it mandatory to treat any lease, tenancy, easement, and license to occupy land as a supply of service.

In the light of above, one needs to identify legal connotation of terms lease or license (needless to say that TDR cannot be treated as tenancy or easement) and also needs torefer landmark judicial pronouncement that whether benefits to arise out of land is to be treated as immovable property or not.

th c) Notification no. 4/2018 – Central Tax (Rate) dt. 25 January, 2018 prescribes time of supply in certain situations where development rights are transacted. Issuance of this notification led to more confusion as government presumed the applicability of GST on TDR.

· Analysis of legal connotations of terms mentioned under entry 2 of schedule II of CGST Act, 2017 & judicial pronouncements:

a) Whether TDR can be termed as lease ?

Lease as defined under section 105 of Transfer of Property Act, 1882 is as follows :-

“A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms” Essentially the periodicity, perpetuity and right to enjoy such property for certain time are the main elements of a lease.

15

“Limitations live only in our minds. But if we use our imaginations,

our possibilities become limitless."

Why TDR is not a lease ?

· Lease is transfer of right for a certain period of time or in perpetuity. TDR is transfer of rights permanently.· Lease gives revocable right to enjoy property while transfer of TDR is irrevocable. · Lease gives right to enjoy while TDR gives right to develop.· Lessor may re-gains possession of property after lease term which is not the case in respect of TDR.

In the light of above factors, TDR cannot be termed as “lease”.

b) Whether TDR can be termed as license ?

It was held by Apex court in Associated Hotels of India Vs R. N. Kapoor case,

“Under the aforesaid section (section 52 of the Indian Easements Act, 1882), if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose'. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property.”

Why TDR is not a license ?

In the light of above parameters, following can be concluded –

· A license is not connected with the ownership of property while TDR is irrevocable right and it creates interest in property.

· Licensor's discretion stands in case of license while in case of TDR the developer has the discretion to develop land.· Control remains with licensor in case of license however, no control remains with transferor of TDR.

In the light of above factors, TDR cannot be termed as “license”.

c) Land includes benefits arise out of land –

Immovable property or land is not defined under GST Act. In the absence of such definition, following can be referred -· As per section 3(p) of the Right to Fair Compensation, Transparency in Land Acquisition, Rehabilitation Act, 2013, defines land as,

“land” includes benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth.

· As per section 3(26) of General Clause Act, 1897, -“Immovable property” shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth.

· It was held by hon'ble Bombay High Court in the case of Sadoday Builders Pvt. Ltd. Vs. The Jt. Charity Commissioner Nagpur Diocesan Trust Association and M.P.V. Contractors, Builders and Developers,

The Division Bench has held that since TDR is a benefit arising from the land, the same would be immoveable

property and therefore, an agreement for use of TDR can be specifically enforced. The said dictum of the Division

Bench is later on followed by a learned single Judge of this Court in 2009 (4) Mh.L.J. 533 in the matter of Jitendra

Bhimshi Shah v. Mulji Narpar Dedhia HUF and Pranay Investment and Ors. The learned judge relying upon the

judgment of the Division Bench in Chheda Housing Development Corporation (supra) has held that the TDR being an

immovable property, all the incidents of immovable property would be attached to such an agreement to use TDR.

· There are many other judicial pronouncements which follows same view.

· Notification issued under section 148 of CGST Act, 2017 :

th · Notification no. 4/2018 – Central Tax (Rate) dt. 25 January, 2018, issued in exercise of powers conferred by section 148 of CGST Act, 2017. The notification specifies certain class of registered person for which special procedure to determine time of supply in case of supply of development rights has been specified.

16

“The two most important days in your life are the day you are born and the day you find out why."

· It implies that as government is specifying Time of Supply in certain circumstances, it presumed the applicability of GST on transfer of development rights.

· Section 148 of CGST Act, 2017, confers the power of Central Government to notify certain classes of registered persons and special procedures to be followed by such persons including those with regard to registration, furnishing of return, payment of tax and administration of such persons.

· Summary of above discussion and conclusion: -

a) TDR is benefit arising from the land and hence it is to be treated as immovable property.b) Immovable property is not leviable to tax under GST.c) However, as per powers conferred by section 148 of CGST Act, 2017, government may specify certain classes of persons and procedure to be followed by such persons.d) Hence, transfer of development rights is liable to GST as per available provisions, notifications etc. unless specifically challenged in the court of law.

· Impact on real estate sector :

a) Due to applicability of GST on transfer of development rights, real estate sector will face problem of working capital blockage as the tax amount involved in such transactions is huge.b) Provisions of GST act do not allow refunds of accumulated input tax credit balance in case of real estate sector.c) Cost of construction, in such scenario, may increase considering time value of blocked working capital.

· ICAI's representation in this regard :

th a) Institute of Chartered Accountants of India made representation in this regard on 27 March, 2018.b) It is suggested to insert following wordings in Para 2 of schedule II, to avoid conflict between schedule II & Schedule III –

“2. Land and Building

(a) any lease, tenancy, easement, license or any other right to occupy land is a supply of services

(b) …….Subject to a deduction of consideration, if any, actually paid or payable specifically towards sale of land and building referred to in paragraph 5 of schedule III”

17

“Success is empty if you arrive at the finish line alone.

The best reward is to get there surrounded by winners."

Orientation Programme for Newly Qualified Chartered Accountants

Panelists From L To R :- CA Nayan Kothari, CA Milind Kale, CA. S. B. Zaware, Mr. Charanjiv Singh, CA Shriniwas Joshi,

CA Prashant TidkeParticipants

Shri. R. GandhiChief Guest

CA. Maheshwar MaratheSpeaker

CA. Abhijit KelkarSpeaker

CA. Saurabh PeshweSpeaker

CA. Dilip SatbhaiSpeaker

CA. Prashant TidkeSpeaker

CA. Shriniwas JoshiChief Guest

CA. Nayan KothariSpeaker

One Act Play Competition

Ekankika 1 – Rain Maker Ekankika 2 – Ishh: To Dead Ahe Ekankika 3 – Purushartha

Ekankika 4 – Vat Chuklele Raste Ekankika 5 – Cheers

On Dias L To R :- CA. Jagdeesh Dhongde, CA. Abhishek Dhamne,

CA. Ruta Chitale, CA. S. B. Zaware, Ms. Bhagyashri Desai, Marathi Actress

& Director – Judge, Mr. Milind Shintre, Actor, Writer & Director – Judge,

CA. Anand Jakhotiya, CA. Sarvesh Joshi, CA. Rekha Dhamankar

Audience

First Prize Winner

Ekankika – Purushartha

Second Prize Winner

Ekankika 5 – Cheers

18

Way to E -Way BillContributed by :- CA. Vaishali Kharde


stNationwide E-way bill is now a reality from 1 April 2018 for inter-State movement of goods. However, for the

purpose of intra-State movement, each State has an option to decide and implement E-way bill system on or stbefore 1 June 2018. At present, e-Way Bill system for intra-State movement of goods has been rolled out in the

States of Andhra Pradesh, Bihar, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Telangana,

Tripura, Uttarakhand and Uttar Pradesh. Also, as per press release issued by the Government E-Way Bills are getting ndgenerated successfully and till 22 April, 2018 more than one crore eighty-four lakh e-Way Bills have been

successfully generated which includes more than twenty-two lakhs e-Way Bills for intra-State movement of goods.

Now, it is essential that trade and transporter should be aware about the certain key aspect of the E-way Bill. This

article discusses the same.

Applicability of E-Way Bill

As per Sub Rule 1 of Rule 138 of the CGST Rules, every registered person, is required to generate E-Way Bill before

movement of goods, if he causes movement of goods of consignment value exceeding fifty thousand rupees:

· In relation to a supply; or

· For reasons other than supply; or

· Due to inward supply from an unregistered person

The expression 'for reason other than supply' will include movement of goods for Job work, removal of goods for

testing, Goods send on approval basis etc. Further, in two cases as given hereunder even the value of consignment

is below INR 50,000/- E- way bill is mandatory

· Material sent for Job-Work;

· Handicraft goods transported inter-State under who has been exempted from obtaining from registration as

turnover of goods below INR 20 lakh (or 10 lakh in specified state) and enjoying exemption under Notification No.

32/2017-CT, dated 15-9-2017 - first and second proviso to rule 138(1) of CGST Rules inserted w.e.f. 15.09.2017

Who is responsible for generation of E-way Bill

Every registered person who causes movement of goods of consignment value above Rs. 50,000/- can file form EWB

-01 and generate e-way bill (i.e. consignor of the goods). However, If the goods are supplied by an un-registered

supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the

recipient is known at the time of commencement of the movement of goods [Explanation 1 to rule 138(3) of CGST

Rules]. Given this, consignee is responsible for generation of e-way bill where consignor is not registered.

Further, as per proviso to Rule 138(1) of the CGST Rules the consignor or the consignee can authorise transporter to

fill the Part A of the E-way bill on their behalf.

It is to be noted that, Rule 138 (7) of CGST Rules provides that where consignor or consignee has not generated e-

way bill in accordance with provisions of sub-rule (1) and the value of goods carried in the conveyance is more than

INR 50,000/-, the transporter shall generate e-way bill based on the invoice/delivery challan/bill of supply.

However, applicability of the said rule is deferred and hence, the transporter may not have required to carry E-way

bill if a vehicle having two or more consignment of different consignee with each consignment below INR 50,000

even the total value of all consignment is above INR 50,000. This is one of the big relief given at the initial period for

transporter.

GST Corner

19

E-Way Bill Methodology

The aforesaid diagram explains e-way bill methodology. Form EWB-01 is required to be filled by the

Consignor/Consignee/Transporter as the case may be. This Form contains two parts (i.e. Part A and Part B). Part A

contain the details of the Consignment whereas Part B is necessary to be filled for generation of E-way Bill. In

general, Part B is to be filled by person who is transporting the goods. Where the goods are transported by a

consignor or consignee, whether in his own conveyance or a hired one the said person or the recipient may fill

Part B and generate the e-way bill. However, where the goods are transported by road by transporter i.e the goods

are handed over by the consignor or the consignee as the case may be to a transporter for transportation by road the

Consignor /Consignee may fill Part A and shall furnish the information relating to the transporter in Part B of FORM

GST EWB-01. Afterward, the transporter will generate E-Way Bill on the basis of details filled in Part A.

thCertain key Amendments in E-way Bill Rules by way of Notification No.12/2018 – Central Tax dated 7

March 2018

stThe Government has made amendment given below vis-à-vis rules introduced as on 1 February 2018 on the basis

of various representation received by industries

1. Transporter on an authorization received from party, may furnish Part-A of EWB -01. Earlier this authorization was

not needed.

2. Different validity period is specified for Normal Cargo ( i.e.1 day for each 100 Km and part thereof) and over

dimension cargo (i.e.1 day for each 20 Km and part thereof). To compute a day, each day shall be counted as the

period expiring at midnight of the day immediately following the date of generation of EWB.

3. Part-B of EWB can be furnished post commencement of movement of goods via railway, air or vessel.

4. In case of movement of goods by railway relaxation has given and railways are not responsible to generate E-way

Bill. However, railway shall not have allowed to deliver goods until EWB is produced at the time of such delivery.

5. Rule 138(7) of the CGST rules has deffered for certain period. Given this, at present in case of multiple inter-state

consignments and where value of each consignment does not exceed Rs. 50,000/- but in aggregate exceeds INR

50,000 EWB not required.

“Once you replace negative thoughts with positive ones, you'll start having positive results."

20

6.The facility for updating validity of E-way bill is now available in case of exceptional nature including

transshipment.

7. No EWB requires if Goods sent for weightment up to 20 Kms.

8. Procedure for bill to ship to model is prescribed. Also, Press release dated 23rd April 2018 is issued by the

Government for procedure of E-Way bill with respect to Bill-to- Ship to Model.

Challenges in the E-Way Bill System

A report by Rating Agency India Ratings says that "Over the long run, e-way bills would ease the inter-state

movement of goods. Various operational inefficiencies would be minimised and the wait time at checkpoints is

expected to decrease by around 15 per cent". However, in the initial phase of the implementation of E-way bill

the taxpayer could face certain challenges as discussed hereunder:

1. Unawareness of transporter

As discussed aforesaid, transporter is responsible to fill Part B of the form EWB -01 for generation of e-way bill

else E-way bill is not valid. Also, in case of transshipment the person-in-charge of vehicle shall be aware of the

fact that part B of the E-way Bill is required to be updated on common portal. It is not only difficult but in certain

cases it could be impossible due to lack of electronic facilities, awareness, education etc. Further, penalty up to

INR 10,000 or tax evaded could be levied on the personal responsible for generation of E-way bill in case of

carrying improper or irregular E-way bill by the transporter.

2. Applicability of E-way bill in case of Intra-State movement of the goods

As far as Intra-sate movement of the goods is concerned there are numerous transaction that could be taken

place in a day which may require E-way bill. Like the Company may transfer certain goods/ machinery from HO

to warehouse, Builder/Developer could move goods or machinery under the cover of delivery challan from one

site to another said etc. Given this, such numerous transaction could get covered under the roof of E-way bill.

Hence, to generate E-way bill for within State transport could become tedious and time-consuming work in the

environment of technical glitches.

3. Other Challenges

Further, certain additional challenges as discussed given below could be faced by the taxpayer during initial

stage of implementation

· Dependency of technology

· No clarity that whether e-way bill is applicable where both consignor and consignee are unregistered and value

of consignment is above Rs. 50,000/-

· Different dates of implementation in different state could face challenge where the company has presence in

more than one State

Further, certain features of the E-way bill like multiple modes for e-way bill, alerts will be sent to user via mail and

SMS on registered mail id/mobile number, E-way bill can be generated by SMS etc. ease the implementation of

e-way Bill. Given this, now taxpayer should gear up for new digitized nation ahead!

“Courage is the greatest of all virtues, because if you haven't courage,

you may not have an opportunity to use any of the others.”

*Adissional GST - 18%

*3 to 6 Insertions - 10%*7 to 12 Insertions - 15%

Plot No.8, Parshwanath Nagar, CST No. 333,Sr.No.573, Munjeri, Opp. Kale hospital,

Near Mahavir Electronics,Bibwewadi, Pune 411037 Tel: (020) 24212251 / 52Web: www.puneicai.org

Email: [email protected]


PUNE BRANCH OF WIRC OF ICAI ...puneicai.org/wp-content/uploads/Newsletter-April-2018.pdfPUNE BRANCH...

Documents

Transcript of PUNE BRANCH OF WIRC OF ICAI ...puneicai.org/wp-content/uploads/Newsletter-April-2018.pdfPUNE BRANCH...