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Published by kyathish, 2019-07-05 17:35:28

VCAT Union Budget 2019

VCAT - Budget Analysis 2019

BAHI
KHATA

2019

Union Budget 2019

UNION BUDGET 2019

Table of Contents

Ten Focused Areas 1
Budget Flash 2
Economic Survey 3
Direct Tax 6
GST, Excise & Customs 12

UNION BUDGET 2019

Ten Focused Areas

Infrastructure
Sector

Social Housing
Sector Sector

Digital Study in
India India

Water Ayushman
Management Bharat

Space Ease of
Programs Living

Pagenisn Farming 1
Sector
Page no. 1

BAHI KHATA 2019

BUDGET FLASH

Proposals

 Implementation of Innovative Model - Zero Budget Farming;
 Pension benefit to 3 Crore Retailers / Traders under Pradhan Mantri Karam Yogi Maandhan

Scheme (PMKYM) whose Turnover is less than Rs. 1.5 Crore;
 MSMEs Loans up to Rs. 1 Crore in 59 minutes;
 Women SHG Member allowed Mudra Loan of Rs. 1 Lakh; Women SHG interest subvention

program to all districts
 17 Iconic tourism sites to be developed as World Class Tourist Destinations;
 Jal Jeevan Mission – Jal to all Rural Households by 2024;
 FDI to be opened up for Aviation, Media, Insurance Intermediary Sector (100%);
 New Space India Limited (NSIL) has been incorporated as a new commercial arm of

Department of Space to tap the benefits of the Research & Development carried out by ISRO;
 Rs. 400 Cr for setting up of a World Class Institution (Bring Foreign Citizen for Education in

India)- “Study in India Program”;
 New coins released for visually impaired to be made available to public;
 The Startups are being given a whole set of tax benefits;
 Those who do not have PAN can file Income Tax returns by quoting Aadhaar number;
 NRIs with Indian Passport can obtain Aadhaar without waiting for 180days;
 To provide further impetus to affordable housing, additional deduction of 1.5 lakh rupees on

interest paid on loans borrowed up to 31 March 2020 for purchase of house up to ₹45 lakh;
 Additional income tax deduction of 1.5 lakh rupees on the interest paid on the loans taken to

purchase electric vehicles;
 Public sector banks to be provided 70,000 crore rupees to boost capital and improve credit;
 Streamline multiple labour laws into a set of four labour codes;
 PMGSY-III is envisaged to upgrade 1,25,000 kms of road length over the next five years;

Achievements

 Direct to Bank - Digital transfer of subsidies;

 18,452 villages Electrified;

 Approximately 35 crore LED bulbs have been distributed under UJALA Yojana leading to cost

saving of 18,341 crores annually;

 More than 5.6 lakh villages have become Open Defecation Free (ODF);

 1.5 crore houses built under PMAY scheme in the fastest pace and average number of days

taken for completion of houses is 114 days;

 NPA reduced by Over 1 Lakh Crore;

 The Insolvency and Bankruptcy Code to tackle India’s chronic problem of non-performing

assets;

 GST- One Nation One Tax – Implemented the largest tax compliance network;

 Built 35,000 km of highway across 16 states; Average Highway construction 27 Km/day;

 Modernizing 12 major and 185 minor ports;

 National Security took prominence - Surgical Strikes and Air Strikes; Page no. 2

BAHI KHATA 2019

Economic Survey 2018-19

Last Five Years – Accomplishments

Schemes About the scheme Achievement till date
Pradhan Mantri Jan Financial inclusion program to Presently close to 1 lakh crore is
Dhan Yojana expand access to financial services. deposited in more than 35 crore bank
accounts opened under PMJDY
Pradhan Mantri Targeted to provide LPG Till date more than 70 million
connections over a span of three PMUY-LPG connections have been
Ujjwala Yojana years to BPL (Below Poverty Line) released to women residing in more
families with a support of Rs.1,600 than 700 districts
Ayushman Bharat per connection
Yojana (ABY) Provides an insurance cover of Till date, the scheme has empanelled
5,00,000 for cashless treatment to more than 15,000 hospitals, which
UDAN- Ude Desh ka each of the 100 million BPL have admitted about 2.6 million
Aam Naagarik families at a nominal premium of persons from the 346 million enlisted
100 per month beneficiaries
Aadhaar Scheme to foster regional Over 30 unserved and underserved
connectivity by extending flight airports have been mainstreamed
Swachh Bharat connectivity to Tier-3 and Tier-4 under UDAAN with flights creating
Mission towns in the country additional 40 lakh seating capacity
Assigning a unique identification Presently, Aadhaar coverage stands at
number to every individual, the more than 90 per cent of the
government now has the ability to country’s population
provide targeted support
A major focus has been on making As on date, 98.9 per cent of India has
villages Open Defecation Free been covered under SBM and over
(ODF) 9.5 crore toilets have been built all
over the country
Pradhan Mantri Universal household electrification As on March 2019, 2.62 crore
households have been electrified
Sahaj Bijli Har Ghar by providing last mile connectivity since the launch of SAUBHAGYA

Yojana and electricity connections to all

(SAUBHAGYA) remaining un-electrified

households in rural and all poor

households in urban areas.

Page no. 3

BAHI KHATA 2019

The Next Five Years: A Blueprint for Growth and Jobs

During the last five years, India’s economy has performed well. By opening up several pathways for
trickle-down, the government has ensured that the benefits of growth and macroeconomic stability
reach the bottom of the pyramid. To achieve the objective of becoming a USD 5 trillion economy by
2024-25, India needs to sustain a real GDP growth rate of 8%. The Honourable Prime Minister
inspired every citizen to contribute towards this aim by his words, "If every one of the 130 crore Indians
takes one step forward, the country too will go that many steps ahead." The Government formulated
the strategic blueprint for fructifying this vision. Following are the highlights of the strategic blueprint
to achieve USD 5 trillion economy by 2024-25:

a) Shifting Gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand
Investment, especially private investment, is the “key driver”. Exports must form an integral part of
the growth model. Similarly, Job creation is driven by this virtuous cycle.

b) Redesigning a Minimum Wage System in India for Inclusive Growth
Redesigning a Minimum Wage System in India by:
i. Notifying National Floor Minimum Wage and guiding all States to fix minimum wages not lower

than the floor wage.
ii. Setting up ‘National Level Dashboard” - for regular notifications on minimum wages; and
iii. Toll-free number to register grievance on non-payment of the statutory minimum wages.

c) Reorienting policies for MSME Growth
Government focuses on enabling MSMEs to grow for achieving greater profits, job creation and
enhanced productivity. Unshackling MSMEs and enabling them to grow by way of:

•A sunset clause of less than 10 years for all size-based incentives.
•Deregulating labor law restrictions to create significantly more jobs
•Re-calibrating Priority Sector Lending (PSL) guidelines for direct credit flow to young firms in high
employment elastic sectors.

d) Data “Of the People, By the People, For the People”
Data generated by the people can be created as a public good within the legal framework of data
privacy and merging the distinct datasets held by the Government to generate multiple benefits.

e) Ending Matsyanyaya: Ramp up Capacity in the Lower Judiciary
Delays in contract enforcement and disposal resolution are the biggest hurdle to the ease of doing
business and higher GDP growth. Around 87.5% of pending cases are with lower courts. 100%
clearance rate can be achieved by merely filling out the vacancies in the lower courts and in the High
Courts.

Page no. 4

BAHI KHATA 2019

f) Leveraging the behavioral Economics:
Using insights from behavioral economics to create an aspirational agenda for social change:

From To

Beti Bacho Beti Padhao BADLAV-Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi -
Swachh Bharat To enhance contribution of women in the workforce and the economy
Give it up Sundar Bharat- a framework to use behavioural insights for a healthy India
Think about the Subsidy- The default option can be modified so that
Tax evasion households above a certain income threshold have to opt in to continue
their subsidies with the default option being “opt out” of the subsidy.
Tax compliance- to enhance tax compliance, behavioural insights need to
be employed to modify the social norm from “evading taxes is acceptable” to
“paying taxes honestly is honourable.”

Recent developments in the major sectors of the economy

a) 5G India by 2020
The Government has constituted High Level 5G India 2020 Forum to articulate the Vision for
5G in India and constituted seven committees in order to make India 5G ready by 2020,.

b) Focus on Small and Marginal Farmers
The Government has set a target of doubling of farmers’ income by the year 2022 by improving
the efficiency of using resources by Small and Marginal Farmers.

c) Mission Electrification
Mission Electrification aims at electrifying Broad Gauge Network to reduce the nation’s
dependence on imported diesel oil.

Page no. 5

BAHI KHATA 2019

DIRECT TAX

1. Tax Rates: Individuals Senior Citizens Super Senior
(< 60 years) (60 years to 80 Citizens
Income Slabs
(Rs.) - years) (> 80 years)
- -
Upto 2,50,000 5%
2,50,001 3,00,000 20% 5% 20%
30% 20% 30%
to 5,00,000 30%
5,00,001 to 10,00,000
More than 10,00,000

 No Change in Basic Tax rates.

Proposal:

In respect of those having taxable income in excess of 2 crores the Effective tax rate is proposed
to be increased in respect of their taxable income exceeding Rs. 10 Lakhs in respect of
Individuals, HUF, AOP, BOI and Artificial Juridical Persons.

For those having Applicable Effective Tax rate Effective Tax rate
Taxable income of Surcharge NOW (%) in respect of EARLIER (%) in
respect of taxable
Up to 50 Lakhs (%) taxable income in income in excess
50 Lakhs to 1 Crore excess of Rs.10 Lakhs
1 Crore to 2 crores 0 of Rs.10 Lakhs
2 Crore to 5 crores 10 31.20 31.20
5 crores and above 15 34.32
25 35.88 34.32
37 39.00
42.74 35.88

35.88

35.88

 Resident Individuals are eligible for rebate of Rs.12,500/- for taxable income of up to
Rs.5,00,000/-

 Filing of Income tax returns is necessary for claim of such rebate.

Particulars Income Upto 5 Income More

1 Gross Total Income lakhs than 5 lakhs
Less: Chapter VIA Deduction
Amount Amount
2 - 80C
- 80D 675,000 685,000

3 Total Income (1 – 2) (150,000) (150,000)
4 Gross Tax Liability (25,000) (25,000)
5 Less: Rebate U/s 87A 500,000 510,000
6 Net Tax Liability (4 – 5)
7 Add: Cess @ 4% 12,500 14,500
8 Total Tax Payable (6 + 7) (12,500) -

- 14,500
-
- 580Page no. 6

15,080

BAHI KHATA 2019

2. Gift to a Non-Resident made outside India - Section 9(1)(viii):

Proposal:

Any sum of money or any property situated in India received (the value in excess of Rs.50,000/-) by
Non-resident, outside India, from a resident on or after 5th July, 2019 will be treated as Income of the
recipient except for certain exemptions provided in 56(2)(x).

Impact:

Going forward any gifts received by non-residents from residents shall be chargeable to tax in India
even if the gift was received outside India except when received from prescribed relatives.

3. Receipts from National Pension Scheme - Section 10(12A):

60% of amount received from National Pension System Trust on closure of an account will be
considered as exempt as against the existing 40% with effect from 1st April, 2020.

4. Registration of Trusts - Section 12AA:

For Trusts to obtain registration and also to continue to retain their registration need to comply with
material laws (apart from compliance with Income-tax Act 1961) mandatory in achieving the Trusts
objectives.

The Principal Commissioner or the Commissioner has to be satisfied with regard to such compliance
with other laws which are material in achieving its objectives with effective from 1st September,
2019. Registration can be cancelled on account of such non-compliance.

5. With-holding of Tax in case of payments to non-residents - Section 40(a)(i):

Proposal:

A deductor, who has failed to deduct tax at source, shall not be deemed to be an assessee in default if
the recipient has furnished his return of income u/s. 139, disclosing such payment in his Income tax
returns.

Currently, this relief is available to the deductor, only in respect of payments made to a resident and
not in respect of payments to non-resident.

With this proposal the said benefit is extended even in respect of failure to deduct tax on payment to
non-resident.

Impact:

Non-deduction of Tax at source in respect of payment to a Non-resident can be claimed as
expenditure upon the deductee Non-resident filing its returns in India and a certificate from Chartered
Accountant is furnished to this effect which hitherto was not possible.

Page no. 7

BAHI KHATA 2019

6. Repayment of loans borrowed from certain NBFC’s – Claim of Expenditure of Interest paid

Interest expense with respect to loan taken from certain NBFC’s will be allowed as deduction only on
payment basis as per Section 43B.

NBFC in above clause refers to
1. Deposit taking non-banking financial company: NBFC which accepts or hold public deposits and
registered with RBI.
2. Systemically important non-deposit taking non-banking financial company: NBFC which

a. Don’t accepts or holds public deposits and
b. Having total value of assets of Rs. 500 crores or more as per last audited Balance sheet and
c. Registered with RBI.

7. Presumptive Taxation Rate - Section 44AD
Proposal:
Presumptive Income to be at 6% in respect of the amounts of Turnover or Gross Receipts which is
received by an A/c Payee Cheque or Bank draft or Use of ECS through a Bank Account or Prescribed
electronic modes.
Impact:
Now the benefit of presumptive tax rate of 6% will be extended / available for payments received in
any other mode that may be prescribed by CBDT.

8. Exemption for investment in Start up – Company - Section 54GB:
• Exemption claimed upon investment in an eligible start up was to be revoked in the event of such
eligible start up transferring its Computer and Computer Software within a period of 5 years.
• The said period of 5 years is now proposed to be reduced to 3 years.
• Claim of such exemption is extended in respect of long term capital asset, being a residential house
property or a plot of land, sold upto 31.3.2021 as against the existing 31.3.2019.
• Exemption is available by investing at least 25% in the share capital of a start-up company as against
the exiting 50%.

9. Deduction for Contribution to Pension Scheme - Section 80C
Proposal:
A Central Government Employee can now claim deduction under section 80C if investment made in
Pension Scheme for period of 3 Years.
This deduction under section 80C is in addition to the existing limits of 10% of Salary or 20% of GTI
under 80CCD(1) and Rs.50,000 under Section 80CCD(1B).
Deduction for contribution to Pension Scheme - Section 80CCD:
The Quantum of contribution to pension scheme in case of an employee of central government by the
Central Government employer has been increased to 14% of salary as against the existing 10%.
Interest on Loan for purchase of residential house property - Section 80EEA:
Deduction of Interest on Housing Loan for Residential House property upto Rs.1,50,000 is available
to an Individual.

Page no. 8

BAHI KHATA 2019

Conditions:
 Stamp Duty Value of the House property shall not exceed 45 Lakhs
 Loan by a prescribed financial institution sanctioned during FY 2019-20
 As at the date of such sanction the purchaser does not own any other residential house
 Cannot be claimed as expenditure / deduction under any other provision

10. Interest on Loan for Purchase of Electric Vehicle - Section 80EEB:
Deduction of Interest on loan up to Rs.1,50,000 can be claimed upon purchase of Electric Vehicle.
Conditions:
 Loan sanctioned by a prescribed financial institution
 Loan to be sanctioned during 01.04.2019 to 31.03.2023
 Cannot be claimed as expenditure / deduction under any other provision

11. Deduction in Respect of Income from Housing Projects - Section 80IBA:
Proposal:
Deduction 100% of Profits and Gains from housing projects which were approved on or after 1st
September 2019 shall be allowed subject to condition that
 Project is on plot of land measuring not less than 1,000 square metres
 Metropolitan cities Plot Size not less than 1,000 Square metres -Bangalore and Hyderabad and
Delhi National Capital region, Mumbai, Kolkatta, Chennai & Delhi. Carpet Area not more than
60 Square metres. Floor Area Ratio more than 90%
 Any other place : Plot Size not less than 2,000 Square metres and Carpet Area not more than
90 Square Meters. Floor Area Ration more than 80%
 Stamp Duty value of a residential unit in the housing project does not exceed 45 Lakhs

12. Maintenance of Records – Constituent Entity
A Constituent entity of an International Group is mandated to keep and maintain such information
and documents in respect of an international group as may be prescribed irrespective of the
constituent entity entering into international transaction or otherwise.

13. Buy Back of Shares – Additional Tax
Additional Income tax will be levied on the distributed income on account of buyback of shares of
Listed Companies which hitherto was applicable only for entities other than listed companies.
Consequent amendments has been proposed to exempt income received by a person on account of
buy back of shares of a company, provided such company has to pay additional tax as above.

Page no. 9

BAHI KHATA 2019

14. Filing of returns made mandatory
a) Tax base is proposed to be expanded by mandating filing of Income Tax return by a person
 Who has deposited more than one crore rupees in one or more current accounts in a year; or
 Who has expended more than two lakh rupees on foreign travel; or
 Who has paid more than one lakh rupees towards consumption of electricity in a year; or
b) A person claiming benefit of exemption from capital gains on investment in a house or a bond or
other assets, under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB of the Act, shall be
required to furnish a return, if before claim of the such benefit/s, his total income is more than the
maximum amount not chargeable to tax.

15. Permanent Account Number Vis a Vis Aadhaar
 PAN and Aadhaar Number can be used interchangeably.
 Every person entering into transactions or receiving any document relating to such transaction
shall ensure PAN / AADHAR is quoted and also authenticated.

16. Consideration purpose of deduction of tax at source - Section 194-IA
Payment of consideration for transfer of certain immovable property other than agricultural land calls
for deduction of Tax at source at the rate of 1%. The term ‘consideration’ is presently not defined for
the purposes of this section and is now defined;
“consideration for immovable property” shall now be considered to include all charges of the nature
of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee
or any other charges of similar nature, which are incidental to transfer of the immovable property.

17. Transfer Pricing – Primary and Secondary Adjustment:
 When monies relating to primary adjustment or part thereof has not been repatriated within the
prescribed time, the assessee may, at his option, pay additional income-tax @ 18% on such
money not so repatriated or part thereof.
 No deduction under any other provision of Income Tax Act shall be allowed to the assessee in
respect of the amount on which such tax has been paid.
 And person shall not be required to make secondary adjustment and compute interest from the
date of payment of such tax.

18. Payments by Individuals/HUF - Section 194M:

Proposal:

 Payments made to a resident person by an Individual / HUF, who isnot liable to deduct TDS U/s

194C or 194J, for carrying out any work/professional servicesshall be subject to tax at 5%.

 Threshold limit for deduction : Deduction only if the payment or aggregate of payments exceeds

50 lakhs during a year.

Impact:

 Amounts paid on account of personal use in relation to a contract or professional services will

be subjected to deduction of tax at source which hitherto were not.

 There is no requirement for the payer to obtain a TAN.

 The recipient can apply for lower / nil deduction of tax. Page no. 10
 Applicable from 1st September, 2019

BAHI KHATA 2019

19. TDS on Cash Withdrawal - Section 194N:
Proposal:
Aggregate Cash withdrawals in excess of 1 crore during a year from a Banking Company or Post
office or Co-operative Society engaged in the business of banking shall be liable to TDS @ 2%.
Impact:
Tax to be deducted on an amount withdrawn in excess of Rs.1 crore by any person from an account
maintained with above persons. TDS need not be deducted if cash withdrawal is made by
Government and/or above specified persons.
Applicable from 1st September, 2019.

20. Amendments have been proposed in various sections to allow payments vide electronic modes as
may be prescribed apart from payments through banks.
21. Amendment is proposed to mandate electronic mode of receipt by entities with turnover in the
preceding PY exceeding Rs.50 crore

 Impact: Government move is to improve cash less transactions.
 Rs.5,000/- for every day till failure continues;
 W.e.f., 1st November, 2019.
22. Non filing of returns will lead to prosecution if the tax payable is in excess of Rs.10,000/-

Page no. 11

BAHI KHATA 2019

GOODS AND SERVICE TAX

Composition Scheme:
Insertion of composition scheme for person having service turnover up to 50 lakhs in the previous year
in the Act itself. It is in congruence with Notification No.02/2019 CTR, which specified composition
rate of tax at 6% for service providers

To specify that casual taxable person or a non-resident taxable person is not eligible for composition
scheme

To determine the aggregate Turnover of a person for the purpose of eligibility, turnover from first day
of April of a financial year till the date he becomes liable for registration under composition would be
included. However, Interest/Discount income need not be included in determining value of turnover in
a state or UT.

In computation of tax, exempt supply by way of extending deposits/ loans/advances where the
consideration is represented by way interest /discount shall not be considered.

Registration:
Limit for registration, at the request of the state and on council’s recommendation, for the person
engaged exclusively in supply of goods (exception being a person involved in exempt services by way
of extending loans and advances in so far the consideration received as Interest or Discount) would be
enhanced to an amount not exceeding Rs. 40 lakhs.

Integration and Authentication of Aadhaar of Proprietor, Partner, Director, etc,. for existing and new
registrations is being made mandatory. Failing the compliance would lead to cancellation of registration
for existing registrants. Rules in this regard are yet to be notified.

Digital remittances:
Provision provides power to specify Class of registered persons who shall receive the payment in
specified electronic mode. Notification in this regard is awaited.

Returns:
One return for a year declaring outward, inward, tax payable and paid by the composition dealers
(Goods or services). Payment is on quarterly basis.

Payment of Taxes (Adjustment of tax paid in wrong head):
Power to transfer amount lying in Electronic Cash Ledger under any head i.e. tax, interest, penalty, fees
etc. to tax head i.e. CGST, SGST, IGST. This transfer shall be deemed to be refund under this Act.

Interest Computation for delayed payment/filing of return:

Most awaited amendment, i.e. interest to be paid on net tax liability only. However, interest on net

liability is not applicable when tax is payable and return is filed on account of proceedings under Sec 73

or 74 (assessment provisions) Page no. 12

BAHI KHATA 2019

Resolution to conflicting advance ruling
"National Appellate Authority for advance ruling" is formulated to provide procedures to be followed
for hearing appeals against conflicting advancing ruling pronounced on same question by the appellate
authorities of 2 or more states or union territories in case of distinct persons.
Prescribes Constitution of the authority, formulation of selection committee, appointment & vacation of
office of members, duties, functions and Tenure, filing of appeal and time limit for the same, order to
be passed by such authority.

Anti Profiteering – Penalty
"Provisions relating to anti-profiteering has been amended to prescribe penalty of 10% of profiteered
amount if profiteered amount is not deposited to the authority within 30 days of passing the order.

SERVICE TAX

Amendments carried out through the Finance (No. 2) Bill, 2019 come into effect on the date of its
enactment, unless otherwise specified.

S. Retrospective exemptions
No.

1 Services by the State Government by way of grant of license against consideration is
exempted from service tax for the period commencing from 01st April,2016 to 30th
June,2017

2 Services by Indian Institute of Management to it’s students by way of -

a) 2 year full time PG Program in Management or the Post Graduate Diploma in
Management, admissions for which are made on the basis of CAT.

b) Fellow program in Management

c) 5 year integrated program in Management

Except Executive Development Program are exempted from 01st July,2003 to 31st
March,2016.

3 Consideration paid in the form of upfront amount against granting of long term lease
for a period of 30 years or more of plots for development of infrastructure for financial
business by the State Government Industrial Development Corporations or
Undertakings or by any entity having 50% or more ownership of Central Government,
State Government, Union Territory to the developers is exempted from 01st
October,2013 to 30th June,2017

Page no. 13

BAHI KHATA 2019

SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019

1) A new scheme to provide amnesty and settle legacy cases are introduced in the Finance Bill
introduced on 05-7-2019, named “SABKA VISHWAS (LEGACY DISPUTE RESOLUTION)
SCHEME, 2019” hereafter referred to as “Scheme”
2) Effective date of its application – From the date to be notified in this regard
3) Scheme is applicable for most of the taxing statues formulated by the Centre, inter-alia including the
below –

a. Central Excise Act, 1944 or
b. Central Excise Tariff Act, 1985.
c. Service Tax Provisions, including the levies of Swachh Bharath cess & Krishi Kalyan Cess
d. Education Cess & Secondary & Higher Education Cess.
and the rules made there under.
e. Other Indirect taxes and cesses as per the Finance Bill.

4) Government has the power to notify other acts to be eligible for the said scheme.

Who can avail this scheme and on what amount.
1) If there is a single appeal – Duty in dispute
2) In case of multiple appeal – Total Amount of duty in dispute
3) Show cause notice issued and the amount of duty is still payable – Duty mentioned in show cause
notice
4) During enquiry, audit and investigation stage – duty amount has been quantified
5) Voluntary Disclosure – Duty or tax not disclosed in a return as duty or tax payable and before receipt
of an enquiry, audit or investigation

Relief available under scheme.

1) Tax Dues arising for Duty amount related to Show cause notice or appeal or more appeals

Amount of Duty % of relief

< 50 Lakhs 70% of Tax Dues

>50 Lakhs 50% of Tax Dues

2) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of

duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty;

3) Tax Dues are relatable to an amount in arrears and not paid

Amount of Duty % of relief

< 50 Lakhs 60% of Tax Dues

>50 Lakhs 40 % of Tax Dues

4) The tax dues are linked to an enquiry, investigation or audit against the declarant

Amount of Duty % of rebate

< 50 Lakhs 70% of Tax Dues

>50 Lakhs 50 % of Tax Dues

5) The tax dues are payable on account of a voluntary disclosure by the declarant, then, no relief shall

be available with respect to tax dues.

The relief calculated as per above shall be subject to the condition that any amount paid as pre- deposit

at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry,

investigation or audit, shall be deducted when issuing the statement indicating the amount payable by

the declarant: Page no. 14
However, no refund of any excess amount after above relief shall be eligible for Refund

BAHI KHATA 2019

Central GST Notifications and Circulars

Changes in relation to Central Tax Notifications and corresponding implications summarized as per
below:

1) Notification 31/2019 – Central Tax
 Furnishing of Bank Account is required only after issuance of GST Registration Certificate in
Form GST REG – 6. It must be furnished within 45 days from the date of grant of registration or
the date on which return u/s 39 is required to be filed whichever is earlier
Implication:
o Non furnishing of relevant bank details shall call for cancellation of the Registration issued
o All relevant bank accounts operated in the business needs to be updated on the Registration
menu after grant of registration

 Tax Invoice must consist of QR Code, the same shall be made effective from a date to be notified.
Council may recommend if Bill of Supply must contain QR Code.

 Retail Outlet established in departure area of an international airport beyond the immigration
counters, supplying indigenous goods to an outgoing international tourist who is leaving India
shall be eligible to claim refund of tax paid by it on inward supply of such goods.

 Persons who have opted to pay taxes u/s 10 shall be required to file statement in Form GST CMP
– 08 on a quarterly basis.

 Form GSTR-4 is required to be filed on an annual basis.

 Certain other amendments also have been made through this notification.

2) Circular No.102/21/2019

Various representations have been received from the trade and industry regarding applicability of
GST on delayed payment charges in case of late payment of Equated Monthly Instalments (EMI).
An EMI is a fixed amount paid by a borrower to a lender at a specified date every calendar month.
EMIs are used to pay off both interest and principal every month, so that over a specified period,
the loan is fully paid off along with interest. In cases where the EMI is not paid at the scheduled
time, there is a levy of additional / penal interest on account of delay in payment of EMI

Case 1: X sells mobile phone to Y Rs.40,000

Method A) Four instalments of Rs.11,000 each, if any delay in payment of instalment, penal
interest of Rs.500 per month.

Method B) X provides separate invoice for providing the service of loans, consideration for the
same is 2.5% interest per month and penal interest of Rs.500/- per month for delay in payment

Value of Penal Interest charged by Mr.X to Mr.Y will be treated as value of supply as per Section
15(2) of CGST Act,2017 and hence will be eligible to tax irrespective of the manner of invoicing

Case 2: X sells mobile phone to Y Rs.40,000. Y can avail loan from M/s. ABC Ltd at Interest of

2.5% per month, loan is for a term of 4 months, penal interest at 1.25% per month for any delay in

payment additional/Penal Interest is charged by M/s. ABC to Y, this is a service getting covered

under Sl. No.27 of Notfn. 12/2017 – CTR dt. 28.06.2017 and therefore the penal interest would be

exempted to GST and the value of supply shall only be Rs.40,000/- Page no. 15

BAHI KHATA 2019

3) Circular No.103/22/2019 -Clarification regarding determination of place of supply in certain
cases.

Issue Clarification
Services such as haulage of wagons inside port The services provided are ancillary to or related
area up-to place of unloading, siding of wagons to cargo handling services and are not related to
inside the port, unloading of wagons, movement immovable property. Accordingly place of
of unloaded cargo to plot and staking hereof, supply shall be determined as per 12(2) / 13(2)
movement of unloaded cargo to berth, of IGST Act,2017 as the case may be.
shipment/loading on vessel etc. – Place of supply
shall be determined as per 12(2) / 13(2) of IGST Place of supply in case of performance based
Act,2017 or as per 12(3) of IGST Act, 2017 services is determined as per Sec 13(3)(a) of
What is the place of supply in case of supply of IGST Act,2017 and generally it is the where the
various services on unpolished diamonds such as services are actually performed but in cases
cutting and polishing activity which have been where goods are temporarily imported for any
temporarily imported into India and are not put to treatment and exported outside India without
any use in India being used in India, the provisions of 13(2) of
IGST Act shall be applied.

4) Circular No.104/23/2019 - Processing of refund applications in FORM GST RFD-01A
submitted by taxpayers wrongly mapped on the common portal

Issue Clarification
Processing of Refund application – Refund The clarification states that the refund
application has been transmitted by the common application needs to be processed by such tax
portal the tax authority not the one to which the authority to whom the application has been
tax payer has been administratively assigned transmitted by the common portal and after
processing the application, the tax authority is
required to inform the common portal about the
incorrect mapping with a request to update it
suitably on the common portal so that all
subsequent refund applications are transferred to
the correct jurisdictional tax authority.

Page no. 16

BAHI KHATA 2019

5) Circular No.105/24/2019 - Treatment of Secondary or post sales discounts under GST

The circular has examined discounts extended or applied amongst three parties namely Supplier of
Goods(1) [to be construed as Manufacturer or Wholesale Dealer], Dealer(2) [to be construed as
second level person one step down a Supplier of Goods], Buyer(3) [to be construed as an
Individual consumer or a step down person to a Dealer]

Issue Clarification
Post-sale discount is given by the supplier of
goods to the dealer without any further Post-sale discount given by the supplier will be
obligation or action required at the dealer’s end related to the original supply of goods and it would
not be included in the value of supply, in the hands
Additional discount given by the supplier of of supplier of goods, subject to the fulfillment of
goods to the dealer is the post-sale incentive provisions of sub-section (3) of section 15 of the
requiring the dealer to do some act like CGST Act.
undertaking special sales drive, advertisement
campaign, exhibition Such transaction would be a separate transaction
and the additional discount will be the consideration
Additional discount is given by the supplier of for undertaking such activity. The dealer, being
goods to the dealer to offer a special reduced supplier of services, would be required to charge
price by the dealer to the customer to augment applicable GST on the value of such additional
the sales volume discount and the supplier of goods, being recipient
of services, will be eligible to claim input tax credit
Cases where the supplier is not allowed to of the GST so charged by the dealer
reduce post sale discount from his taxable
turnover, can ITC be claimed in entirety by the Discount from supplier in the nature of
dealer or is the dealer required to reverse ITC consideration from ultimate consumer, dealer
attributable on such discounts received from required to charge GST on actual amount received
supplier. from Customer plus discount amount received from
supplier. Customer will be able to claim ITC on tax
amount paid by the customer

Dealer is not required to reverse any ITC
attributable on such discounts received from
supplier, provided that consideration in relation to
such supply post adjustment of
Financial/Commercial credit note is paid along with
the Tax there upon as per Rule 37 read with
Section16

Page no. 17

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Address:
#9, 9th Main, 2nd Block,
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E-mail: [email protected]

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that
such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should

act on such information without appropriate professional advice after a thorough examination of the particular situation.


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