KEY INDIRECT TAX PROPOSALS BUDGETS 2019

KEY INDIRECT TAX PROPOSALS BUDGETS 2019

GST

Ø  GST aims to benefit small traders, manufacturers and service providers. Exemptions from GST for small businesses has been doubled from Rs. 20 lakh to Rs. 40 lakh.

Ø  Further, small businesses having turnover up to Rs. 1.5 crore have been given an attractive composition scheme wherein they pay only 1% flat rate and have to file one annual return only.

Ø  Similarly, small service providers with turnover upto Rs. 50 lakh can now opt for composition scheme and pay GST at 6% instead of 18%.

Ø  More than 35 lakhs small traders, manufacturers and service providers will benefit from these trader friendly measures. Soon, businesses comprising over 90% of GST payers will be allowed to file quarterly return for Businesses with less than Rs 5 crore annual turnover.

Ø  Our Government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest.

Ø  Assuring minimum 14% revenue of GST to State Government by Central Government.

Customs

To promote the “Make in India” initiative, Government have undertaken rationalization of customs duties and procedures. Government has abolished duties on 36 capital goods. A revised system of importing duty-free capital goods and inputs for manufacture and export has been introduced, along with introduction of single point of approval under section 65 of the Customs Act. Indian Customs is introducing full and comprehensive digitalization of export/import transactions and leveraging RFID technology to improve export logistics.

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*Wrong Interpretation about NO Income Tax upto Rs 5 lakh to all tax payer, Income Tax is still payable @5% on Income upto Rs 5 lakh*

Finance Minister while presenting the Budget speech has clearly stated that there will not be any Income Tax to the on Income up to Rs 5 lakh, but when Finance Bills came on the records it clear the myth spread on the news media and other websites.

As per the Clause 8 of the Bill seeks to amend section 87A of the Income-tax Act to provide relief to the individual taxpayers by increasing the maximum amount of tax rebate to twelve thousand five hundred rupees from existing two thousand five hundred rupees. The tax rebate shall now be admissible to taxpayers having total income up to five hundred thousand rupees, instead of existing three hundred fifty thousand rupees.

No tax upto total taxable Income of 5Lakh is in the form of rebate under section 87A which means It will be available to only those Individuals whose Total Taxable Income is less than or equal to 5Lakh (after availing all available deductions).

There is no change in Tax slabs and there is no exemption to those Individuals whose total Taxable Income (after all deductions) is more than 5Lakh.

Highlights of Budget 2019 from Direct Tax and Indirect Tax Perspetive

1.Within 2 years, Tax assessment will be done electronically
2.IT returns processing in just 24 hours
3.Minimum 14% revenue of GST to states by Central Govt.
4.Custom duty has abolished from 36 Capital Goods
5.Recommendations to GST council for reducing GST rates for home buyers
6.Full Tax rebate upto 5 lakh annual income after all deductions.
7.Standard deduction has increase from 40000 to 50000
8.Exempt on tax on second self-occupied house
9.Ceiling Limit of TDS u/s 194A has increased from 10000 to 40000
10.Ceiling Limit of TDS u/s 194I has increased from 180000 to 240000
11.Capital tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
12.Benefit u/s 80IB has increased to one more year i.e. 2020
13.Benefit has given to unsold inventory has increased to one year to two years.

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Highlights of the Interim Budget for 2019-20 (Apr-Mar), presented by Finance Minister Piyush Goyal in Parliament today

FY20 ESTIMATES

* Will spend 190 bln rupees FY20 on rural road plan

* 600 bln rupees being allocated for MNREGA FY20

* Will provide more if needed for MNREGA in FY20

* Defence outlay at 3 trln rupees in FY20

* Allocated 645.8 bln rupees for railways FY20

* FY20 northeast infra allocation at 581.7 bln rupees

* Railway operating ratio seen 96.2% in FY19, 95% in FY20



FY19 REVISED 

* FY19 fiscal deficit seen at 3.4% of GDP

* Allocated 200 bln rupees for farm income scheme in FY19



FISC HEALTH

* Restored fiscal balance

* India has been in best phase of macroeconomy in last 5 yrs

* Contained fisc deficit despite raising states' tax share

* India attracted $239 bln as FDI in 5 years

* Most FDI came through automatic route

* Current account deficit seen at 2.5% of GDP

* Will provide additional funds for Defence, if needed

* Disbursed over 350 bln rupees for one-rank-one-pension plan



GROWTH, INFLATION

* Average growth in 5 yrs highest since econ reforms began

* 2008-2014 saw expansive credit growth

* Reforms have set stage for decades of high growth

* Inflation is unfair tax on poor, middle class

* Have broken the back of back-breaking inflation

* Contained double digit inflation



FINANCIAL SECTOR, MARKETS

* RBI's AQR revealed hidden NPAs in 2015

* Had guts to tell RBI to do asset quality review of banks

* Have run a corruption-free govt

* Ushered in new era of transparency

* Banks' merger being done to improve access to capital

* Spent 2.6 trln rupees so far on bank recapitalisation

* Bank mergers done to get economies of scale

* Expect other banks to soon exit prompt corrective action

* IBC a resolution friendly mechanism retaining assets' value

* On IBC: Even big businessmen now worry about loan repayment

* 3 trln rupees already recovered by banks

* IBC has institutionalised recovery of NPAs

* Govt stopped culture of phone banking

* Measures undertaken to ensure clean banking

* 175-bln-rupee orders placed on govt e-marketplace

* Govt e-marketplace being extended to all PSUs



INFRASTRUCTURE, INDUSTRY

* 7.23 trln rupees MUDRA loans given so far

* India 2nd largest hub for start-ups now

* To create 100,000 digital villages in 5 years

* Mobile data consumption increased 5 times in last 5 years

* Need to improve hydropower capacity to cut oil, gas import

* Solar power generation capacity raised 10 times

* To start container cargo movement in northeast

* All unmanned level crossings on broad gauge eliminated

* 27 km of highways being built each day

* India fastest highways developer in the world

* Gone beyond incremental growth in infra



FARM SECTOR

* Seek a new India where farmers' income would have doubled

* Income support scheme to be given in 3 equal instalments

* Income support for farmers holding less than 2 ha land

* Kisaan scheme to transfer 6,000 rupees/yr to small farmers

* To create PM Kissan Fund for small, medium farmers

* Fall in commodity, farm pdt prices have reduced farm income

* There is a need for structured income support for farmers

* Agriculture continues to be main driver of rural economy

* Increased allocation for Gokul scheme to 7.5 bln rupees

* 1st instalment of 2,000 rupees to be given to farmers soon

* Income support scheme to cost 750 bln rupees per year

* Farm income scheme to be effective from Dec 1, 2018

* 120 mln small farmers to benefit from income support scheme

* Farm income scheme to be fully funded by central govt

* Interest subvention for farmers hit by natural disasters

* To set up Rashtriya Kamdhenu Aayog

* To start drive to bring all farmers under Kisan credit plan

* 2% interest subvention for animal husbandry, fisheries



SOCIAL SECTOR, EDUCATION
* Ayushman Bharat to provide facilities to 500 mln people

* Massive scale-up in healthcare in last 5 years

* Construction of rural roads tripled under PM road plan

* Swachh Bharat world's largest behavioural change movement

* Conducted transparent auction of natural resources

* To set up 22nd AIIMS in Haryana

* Households saved 30 bln rupees from Ayushman Bharat

* 1.7 trln rupees spent for food at affordable rates for poor

* 5-bln-rupee allocation for new "mega" pension plan

* Half of GDP is from 420 mln workers in informal sector

* EPFO data shows formalisation of econ, job creation

* Jobs are created when there is high growth

* Aim 80 mln LPG connections under Ujjwala plan by next yr

* To allot more funds for new "mega" pension plan, if needed

* To give 3,000 rupees/month under new PM pension plan

* New pension plan for workers earning below 15,000 rupees/month



MISCELLANEOUS

* India is solidly back on track

* Have reversed policy paralysis engulfing the nation

* Goyal wishes speedy recovery to Jaitley

* People of India gave strong mandate to our govt

* India 6th largest economy in the world

* India fastest growing major economy in the world today

* India recognised as a bright spot in last five years

* India marching towards growth, prosperity

* Have run a corruption-free govt

* Ushered in new era of transparency

More to come

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MANDATORY TO OBTAIN CERTIFICATE OF COMMENCEMENT OF BUSINESS FOR REGISTERED COMPANIES

*MANDATORY TO OBTAIN CERTIFICATE OF COMMENCEMENT OF BUSINESS FOR REGISTERED COMPANIES:*

Companies registered on or after November 02, 2018 is required to file the declaration for commencement of business with the Registar of companies.

*Time limit :* The decleration for commencement of business shall be filled within 180 days from the date of getting CERTIFICATE OF INCORPORATION. 

*PENALTY IF NOT FILED THE ABOVE MENTIONED FORM:*

• Company is liable to pay Rs 5000 

• Directors is liable to pay Rs 1000 Per day and maximum 1 lacs after expiration of 180 days from the date of registration.

*CONSEQUENCES IF FORM IS NOT FILED WITHIN TIME-*

• Company cannot start his business
• Company cannot borrow money
• Company will be closed by the Registrar of Companies.
• Department will remove of name of the company from the Registrar of Companies.

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FinTax
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Eway Bill to GSTR1 new feature

Now No need to punch all Invoices in GSTR-1.
You can directly import your all invoices declared in E-Way Bill system into Form GSTR-1.
Only those invoices will be punched, for which no Eway Bill has been generated.

--
FinTax
Tax and Finance Consultant

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*14 Amendments to take effect under GST from 1st Febuary 2019*

1. Upper limit of turnover for opting of composition scheme shall be raised from Rs. 1 Cr to Rs. 1.5 Cr.

2. A Composite dealer(in goods) shall be allowed to supply services (other than restaurant services), for a value not exceeding -

Higher of 10% of turnover in the preceding financial year, or Rs. 5 lakh.

3. The threshold limit of Turnover for exemption from registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand shall be increased to Rs. Twenty Lakh from Rs. Ten Lakh.

4. In case of purchase of notified goods from unregistered suppliers, Reverse charge mechanism shall be applicable to notified registered persons.

5. Taxpayers may opt for multiple registrations within a State/U.T in respect of multiple places of business located within the same State/U.T on the same PAN.

6. Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.

7. Registration shall be remain temporarily suspended while cancellation of registration is under process, so that the taxpayer could get relief of further continued compliance under the law.(i.e Taxpayers will not be required to file returns).

8. The following transactions shall not treated as supply (i.e no tax payable under GST) under Schedule III:-

a. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;
b. Supply of warehoused goods to any person before clearance for home consumption; and
c. Supply of goods in case of high sea sales.

9. Input tax credit would now be available in respect of the following:-

a. Most of the activities or transactions specified in Schedule III;
b. Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft;
c. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
d. Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.

10. Registered persons may issue consolidated credit/debit notes to a party in respect of multiple invoices issued in a Financial Year to that party.

11. Commissioner may extend the time limit for return of inputs and capital sent on job work, upto a period of 1 year and 2 years, respectively.

12. If RBI would permit, Supply of services outside India shall be regarded as exports, even if payment is received in Indian Rupees.

13. Place of supply shall be outside India, where job work or any treatment or process has been done on goods temporarily imported into India and then exported out of India without putting them to any other use in India except the uses which were necessary for the purpose of such job work or treatment or process.

14. Recovery of taxes, interest, fine, penalty etc. can be made from distinct persons, even if such distinct persons are present in different State/Union.

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