MM TAX CLUB

Reporting 6% rate in GSTR-1

A new tax rate of 6% IGST or 3% CGST+ 3% SGST has been introduced on certain goods vide Notification No. 02/2022 dated 31st March 2022. Changes are being made on the GST portal to include this rate in GSTR-1. As a temporary measure, taxpayers who have to report goods at this rate may do so by reporting the entries in the 5% heading and then manually increasing the system computed tax amount to 6%. This can be done by entering the value in the ‘Taxable value’ column next to 5% tax-rate and then increasing the system computed tax-amount to 6% IGST or 3% CGST + 3% SGST in the ‘Amount of Tax’ column under the relevant Table, namely B2B, B2C or Export, as applicable. This will ensure that correct tax amount is reported in GSTR-1. Meanwhile, this rate will be made available on the GST portal shortly.

Revenue (CT.II) Department – Commercial Taxes Department – Telangana One Time Settlement Scheme 2022 – Orders

G.O.Ms.No. 45  Dated: 09-05-2022

ORDER:-

In the letter read above the Commissioner of Commercial Taxes, Telangana, Hyderabad has informed that there is an arrear amount of around Rs. 3000 Cr pending in various stages of litigation and that this amount is not readily recoverable. In similar context, the state Governments of Maharashtra, Karnataka, Kerala, Bihar and West Bengal have introduced One Time Settlement scheme for disputed taxes. Therefore, the Commissioner of Commercial Taxes, Telangana Hyderabad has proposed a One-Time Settlement Scheme of Tax Arrears to release this locked up revenue and requested the Government for necessary orders in the matter.

After careful examination of proposal of the Commissioner of Commercial Taxes, Telangana, Hyderabad, the Government have decided to introduce a One Time Settlement Scheme to settle disputed tax under the legacy Acts such as Andhra Pradesh General Sales Tax Act, 1957, the Telangana Value Added Tax Act, 2005, the Central Sales Tax Act, 1956 and the Telangana Entry of the Goods into Local Areas Act, 2001 and hereby issued the following orders.

1. This scheme shall be known as The Telangana State One-Time Settlement Scheme 2022.

2. The provisions of this scheme shall apply to all registered and unregistered dealers under the Andhra Pradesh General Sales Tax Act, 1957, the Telangana Value Added Tax Act, 2005, the Central Sales Tax Act, 1956 and the Telangana Entry of the Goods into Local Areas Act, 2001.

3. For settlement of disputes under this Scheme, each year of assessment shall be a distinct unit.

4. 100% of undisputed tax will be payable.

5. (a) The following rates are applicable for disputed tax :

i. Andhra Pradesh General Sales Tax - 40% of balance tax will be collected from dealer and remaining 60% of demand will be waived off.

ii. Value Added Tax & Central Sales Tax – 50% of balance tax will be collected from dealer and remaining 50% of demand will be waived off.

iii. Entry tax on Motor Vehicle & Goods – 60% of balance tax will be collected from dealer and remaining 40% of demand will be waived off.

(b) For the dealers/ persons availing the above scheme, the interest & penalty shall be waived off.

(c) No refunds will be given under this scheme.

(d) The timeframe under the One Time Settlement is as follows:-

(e) The procedure to avail this scheme is as follows:

i. The One-Time Settlement of Tax Arrears will be executed through an online module.

ii. The dealer shall apply for this scheme through an online application. Where the dealer is no more in business, he can apply offline in the respective jurisdictional Circle/STU.

iii. The application shall be scrutinized by a (3) member committee consisting of AC(ST) of Circle, DC(ST) and JC(ST) of the Division. The committee shall send a confirmation letter to the applicant by accepting/rejecting/modifying the proposal of the applicant.

iv. On receipt of the confirmation letter, the applicant will make the payment and submit the payment details along with necessary documents and the application for withdrawal of appeal (wherever applicable).

v. The proceedings for settlement of balance tax, penalty and/or interest will be issued after realization of the total tax payable and disposal of the case as withdrawn by the respective legal forum.

6. For the amounts payable higher than Rs.25 lakhs, installment facility will be provided without interest up-to 4 equal monthly installments. Bank interest rates will be applied for those seeking more installments.

7. Notwithstanding anything contained in any provisions of the respective Acts, the appeal pending before the appellate authority or the Tribunal or the Court in respect of any order or notice, shall be withdrawn fully and un-conditionally by the applicant.

8. The Commissioner of Commercial Taxes, Hyderabad shall take necessary action accordingly.

In exercise of the powers conferred by the Explanation 3 to clause (23FE) of section 10 and fourth, fifth and sixth provisos to clause (23FE) of section 10, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely;-

Short title and commencement— (1) These rules may be called the Income-tax Amendment (Thirteenth Amendment) Rules, 2022.

                (2) They shall come into force from the date of their publication in the Official Gazette.

In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 2DC, the following rule shall be inserted, namely: —

“2DCA. Computation of minimum investment and exempt income for the purposes of clause (23FE) of section 10 of the Act.—

1. For the purposes of clause (23FE) of section 10 of the Act, the percentages referred to in item (c), item (d) and item (e) of sub-clause (iii) , and the exempt income referred to in the fourth, fifth and sixth proviso shall be calculated in accordance with this rule.

2. The percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-
3.  

(A+C+D) * 100

B

Where,-

A = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act or in an Infrastructure Investment Trust referred to in sub-clause (i) of clause (13A) of section 2 of the Act;

B= Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year;

C = Aggregate of eligible investments, appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more domestic companies referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, multiplied by the percentage for those domestic company or companies determined in accordance with sub-rule (3); and

D = Aggregate of eligible investments appearing in the balance sheet of the Alternative Investment Fund as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more nonbanking financial companies referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, multiplied by the percentage for those non-banking financial company or companies determined in accordance with sub-rule (4):

Provided that in the case of financial year 2021-22 being the relevant previous year, the amounts A, B, C and D shall be calculated using the aggregate of eligible investments, appearing in the balance sheet of the financial year 2021-22 as on the 31st day of March 2022:

Provided further that in a case where the relevant previous year is the year in which the first investment is made by the Alternative Investment Fund, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant previous year as on the last date of that year:

Provided also that the amount A, C and D shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the Alternative Investment Fund:

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.

(3) The percentage referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-

  E * 100

  F

Where,-

E = Aggregate of eligible investments, appearing in the balance sheet of the domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year, made in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act; and

F= Aggregate of eligible investments appearing in the balance sheet of the domestic company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year:

Provided that in the case of financial year 2021-22 being the relevant previous year, the above amounts shall be calculated using the aggregate of eligible investments, appearing in the balance sheet of the financial year 2021-22 as on 31st March 2022:

Provided further that in a case where the relevant previous year is the year in which the first investment is made by the domestic company, the above amounts shall be calculated using the aggregate of eligible investments, appearing in its balance sheet of the relevant previous year as on the last date of that year:

Provided also that the amount E shall also include eligible investments which may not be includible in these amounts as on the date of calculation but would have been included if the calculation was carried out anytime within three months after the date of receipt of such eligible investments by the domestic company:

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.

(4) The percentage referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be calculated in the following manner, namely:-

  G * 100

                  H

Where,-

G = Aggregate of eligible lending, appearing in the balance sheet of the non-banking financial company as on the last date of all the financial years starting from the financial year 2021-22 and ending with the financial year immediately preceding the relevant previous year, made to one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act; and

H= Aggregate of eligible lending appearing in the balance sheet of the non-banking financial company as on the last date of all the financial years starting from the financial year 2021-22 and ending on the financial year immediately preceding the relevant previous year:

Provided that in the case of financial year 2021-22 being the relevant previous year, the above amounts shall be calculated using the aggregate of eligible lending appearing in the balance sheet of the financial year 2021-22 as on 31st March 2022:

Provided further that in a case where the relevant previous year is the year in which the first debt or loan is extended by the non-banking financial company, the above amounts shall be calculated using the aggregate of eligible lending appearing in its balance sheet of the relevant previous year as on the last date of that year:

Provided also that for the financial year 2025-26 being the relevant previous year and for subsequent relevant previous years, the percentage referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act shall be deemed to have been satisfied if the same is satisfied for the financial year 2024-25 being the relevant previous year.

(5) For the purposes of the fourth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the income accrued or arisen or attributed to, or received by, the specified person, who is a unit holder of an Alternative Investment Fund, out of investment made in that fund, shall be chargeable to income-tax in the same manner as if it were the income accrued or arisen or attributed to, or received by, such person had the investment made by such investment fund been made directly by him and the calculation of exempt income of the specified person arising from the investment in such fund during the relevant previous year shall be made in the following manner, namely:-

I+J+K+L

where.-

I = Income accrued or arisen or attributed or received during the relevant previous year from the eligible investments made by the Alternative Investment Fund in companies or enterprises or entities referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause, computed in accordance with the provisions of the Act;

J = Income accrued or arisen or attributed or received during the relevant previous year, computed in accordance with the provisions of the Act, from the investments made by the Alternative Investment Fund in one or more domestic companies, referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person multiplied by N and divided by O, where N and O shall have the value assigned to them in sub-rule (6) for each of such domestic company;

K = Income accrued or arisen or attributed or received during the relevant previous year, computed in accordance with the provisions of the Act, from the investments made by the Alternative Investment Fund in one or more non-banking financial companies, referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person multiplied by Q and divided by R, where Q and R shall have the value assigned to them in sub-rule (7) for each such non-banking financial company; and

L = Income accrued or arisen or attributed or received during the relevant previous year from the eligible investments made by the Alternative Investment Fund in Infrastructure Investment Trusts referred to in sub-clause (i) of clause (13A) of section 2 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause, computed in accordance with the provisions of the Act.

(6) For the purposes of fifth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the exempt income during the relevant previous year shall be calculated in the following manner, namely:-

   M * N

   O

Where,-

M = income accrued or arisen or attributed or received during the relevant previous year from the investment made by the specified person in one or more domestic companies referred to in item (d) of sub-clause (iii) of clause (23FE) of section 10 of the Act, computed in accordance with the provisions of the Act;

N = Aggregate of eligible investments, appearing in the balance sheet of the domestic company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible investment has been made during the relevant previous year for the first time), made by domestic company in one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of investment made by the specified person on or after the date of notification of the specified person under the said clause; and

O = Aggregate of investments, appearing in the balance sheet of the domestic company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible investment has been made during the relevant previous year for the first time), out of any investment made by the specified person.

(7) For the purposes of sixth proviso to sub-clause (iii) of clause (23FE) of section 10 of the Act, the exempt income during the relevant previous year shall be calculated in the following manner, namely:-

  P * Q

  R

Where,-

P = income accrued or arisen or attributed or received during the relevant previous year from the investment made by the specified person in one or more non-banking financial companies referred to in item (e) of sub-clause (iii) of clause (23FE) of section 10 of the Act, computed in accordance with the provisions of the Act;

Q = Aggregate of eligible lending appearing in the balance sheet of the non-banking financial company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible lending has been made during the relevant previous year for the first time) made by non-banking financial company to one or more of the company or enterprise or entity referred to in item (b) of sub-clause (iii) of clause (23FE) of section 10 of the Act, out of any investment made by the specified person on or after the date of notification of the specified person under the said clause; and

R = Aggregate of lending appearing in the balance sheet of the non-banking financial company as on the last date of the previous year immediately preceding the relevant previous year (last date of the relevant previous year if eligible lending has been made during the relevant previous year for the first time) out of any investment made by the specified person.

(8) Every Alternative Investment Fund, domestic company and non-banking finance company, which has received funds from any specified person, either directly or through Alternative Investment Fund, shall furnish the details of funds received from specified persons in Form 10BBD for each previous year during which such funds or any part thereof remains invested in such Alternative Investment Fund, domestic company and non-banking finance company.

(9) Form No 10BBD shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorized to verify the return of income of such Alternative Investment Fund, domestic company and non-banking finance company under section 140 of the Act.

(10) Form No. 10BBD shall be furnished on or before the due date referred to in the Explanation 2 to subsection (1) of section 139 of the Act for the assessment year relevant to the previous year in which the eligible investments have been first received from the specified person and all subsequent previous years till the eligible investment received from the specified person is returned.

(11) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall -

                (i) Specify the procedure, formats and standards for ensuring secure capture and

 Transmission of the data in Form No. 10BBD; and

(ii) specify the procedure, format, data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (9), for verification of the person furnishing the said Form; and

(ii) be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the Form No 10BBD so furnished.

Explanation 1: For the purposes of this rule, the expressions -

(a) “Alternative Investment Fund” means Category –I or Category –II Alternative Investment Fund referred to in item (c) of sub-clause (iii) of clause (23FE) of section 10 of the Act;

(b) “Balance Sheet” means the balance-sheet (including the notes annexed thereto and forming part of the accounts) drawn up as on 31st day of March of the relevant financial year which gives a true and fair view of the state of affairs , complies with applicable accounting standards and has been audited by the auditor of the relevant Alternative Investment Fund or respective companies, in accordance with the provisions of regulation sub-regulation (5) of regulation 20 of Securities and Exchange Board of India (Alternate Investment Fund) Regulations, 2012 or section 139 of the Companies Act 2013, as the case may be;

(c) “Domestic company” means a company referred to in item (d) of sub clause (iii) of clause (23FE) of section 10 of the Act;

(d) “Eligible investment” means an investment which has been made by an Alternative Investment Fund or domestic company, as the case may be, on or after the 1st day of April, 2020 but on or before the 31st day of March, 2024;

(e) “Eligible lending” means lending made by a non-banking financial company on or after the 1st day of April, 2020 but on or before the 31st day of March, 2024;

(f) “Investment” shall mean movable and immovable assets including current and non-current investments, loans and advances and cash and cash equivalents;

(g) “Non-banking financial company” means a company referred to in item (e) of sub clause (iii) of clause (23FE) of section 10 of the Act;

(h) “Relevant previous year” means the previous year for which the income exempt under clause (23FE) of section 10 of the Act is to be calculated:

Provided that for the purposes of fourth proviso of sub-rule (2), fourth proviso of sub-rule (3) and third proviso of sub-rule (4), the previous year 2024-25 shall be considered to be relevant previous year even if exempt income under clause (23FE) of section 10 of the Act is not required to be calculated for that year; and

(i) “Specified person” means a person referred to in Explanation 1 to clause (23FE) of section 10 of the Act.‘.

Detailed Notification and form can be accessed from below link

Earlier Ministry of MSME vide notification number Notification No. S.O. 278(E) dated January 19, 2022 notified the criteria for classifying the enterprises as Micro, Small and Medium Enterprises (MSME) and specified the form and procedure for filing the memorandum, in order to extend the date of validation of the existing enterprises registered prior to June 30, 2020, under the Micro, Small and Medium Enterprises Development Act, 2006 till March 31, 2022.

Now Government vide Notification No. S.O. 2134(E) dated May 6, 2022 further extended validity of existing registration registered prior to 30^th June 2020 till 30^th June 2022.

Notification can be accessed from below link

Total Revenue Deficit Grant released to States so far in current financial year gone up to Rs. 14,366.84 crore

States will get a total Revenue Deficit Grant of Rs. 86,201 crore in 2022-23

The Department of Expenditure, Ministry of Finance has on Friday released the 2nd monthly instalment of Post Devolution Revenue Deficit (PDRD) Grant of Rs.7,183.42 crore to 14 States.  The grant has been released as per the recommendations of the Fifteenth Finance Commission.  

The Fifteenth Finance Commission has recommended a total Post Devolution Revenue Deficit Grant of Rs. 86,201 crore to 14 States for the financial year 2022-23. The recommended grant will be released by the Department of Expenditure to the recommended States in 12 equated monthly instalments. With this release, the total amount of Revenue Deficit Grants released to the States in 2022-23 has gone up to Rs. 14,366.84 crore.

The Post Devolution Revenue Deficit Grants are provided to the States under Article 275 of the Constitution.  The grants are released to the States as per the recommendations of the successive Finance Commissions to meet the gap in Revenue Accounts of the States post devolution.

  The eligibility of States to receive this grant and the quantum of grant for the period from 2020-21 to 2025-26 was decided by the Fifteenth Commission based on the gap between assessment of revenue and expenditure of the State after taking into account the assessed devolution during this period.

The States which have been recommended Post Devolution Revenue Deficit Grant by the Fifteenth Finance Commission during 2022-23 are: Andhra Pradesh, Assam, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tripura, Uttarakhand and West Bengal.

State-wise details of Post Devolution Revenue Deficit Grant recommended for 2022-23 and the amount released to States as 2nd Instalment can be accessed from below link;