Direct Taxation
CBDT to validate Unique Document Identification Number (UDIN) generated from ICAI portal at the time of upload of Tax Audit Reports.
The Central Board of Direct Taxes vides its press release dated 26th November 2020 has decided to validate Unique Document Identification Number (UDIN) generated from ICAI portal at the time of upload of Tax Audit Reports.
ICAI in its earlier notification dated 2nd August 2019 had made generation of UDIN from ICAI website www.icai.org mandatory for every kind of certificate/tax audit report and other attests made by their members as required by various regulators. This was introduced to curb fake certifications by non-CAs misrepresenting themselves as Chartered Accountants and whereas the Income-tax e-filing portal has completed its integration with the Institute of Chartered Accountants of India (ICAI) portal for validation of Unique Document Identification Number (UDIN) generated from ICAI portal by the Chartered Accountants for documents certified/attested by them.
Since the Chartered Accountants was not able to generate UDIN before submission of audit report/certificate, the Income-tax e-filing portal permits such submission, subject to the Chartered Accountant updating the UDIN generated for the form within 15 calendar days from the date of form submission in the Income- tax e-filing portal. If the UDIN for the audit report/certificate is not updated within the 15 days provided for the same, such audit report/certificate uploaded shall be treated as invalid submission.
CBDT directs to condone delay in filing of Form No. 10BB
Central Board of Direct Taxes vide Circular dated the 3rd November, 2020 has directed the Commissioners of Income-tax for Condonation of delay in filing of Form No. 10BB. In all the cases of belated applications in filing of Form No. 10BB for years prior to AY 2018-19, the Commissioners of Income-tax are authorized to admit applications for Condonation of delay, where there is delay of up to 365 days.
The applicant shall show that they were prevented by reasonable cause from filing such application within the stipulated time. All such applications shall be disposed of by 31.03.2021.
Clarifications in respect of the Direct Tax Vivad se Vishwas Act, 2020
With the objective to reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process, the Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as Vivad se Vishwas’) was enacted on 17th March, 2020. The provisions of Vivad se Vishwas had been amended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to provide certain relaxation in view of the COVID-19 pandemic and also to empower the Central Government to notify certain dates.
2. The Central Government vide the notification S.O. 3847(E), dated 27th October, 2020, has extended the date for payment without additional amount under Vivad se Vishwas from 31St December, 2020 to 31″ March, 2021. The said notification also notified the last date for filing declaration under Vivad se Vishwas as 31′ December, 2020.
3. Under the existing provisions of sub-section (2) of section 5 of the Vivad se Vishwas, the declarant is required to pay the amount within a period of 15 days from the date of receipt of certificate from the designated authority. However, as per the aforesaid notification, a declarant who files declaration on or before 31″ December, 2020 can make payment without additional amount on or before 31″ March, 2021. Hence, requiring payment by the declarant within a period of 15 days from the date of receipt of certificate from the designated authority may result into undue hardship for the declarant in whose case the period of 15 days expires before 31st March, 2021.
4. In order to mitigate undue hardship and remove difficulty that may be caused by the aforesaid requirement of payment within 15 days from the date of receipt of certificate from the designated authority, in exercise of powers conferred under section 10 and 11 of Vivad se Vishwas, it is hereby clarified that where a declarant files a declaration under Vivad se Vishwas on or before 31st December, 2020, the designated authority, while issuing the certificate under sub-section (1) of section 5 of the Vivad se Vishwas, shall allow e declarant to make payment without additional amount on or before 31″ March, 2021.
Circle Rate and Stamp Duty: Income Tax relief for real estate developers and home buyers
As part of the AatmaNirbhar Bharat Package 3.0 as announced by Finance Minister on 12th November, 2020, certain income tax relief measures were brought in for real-estate developers and home buyers.
Till 2018, section 43CA of the Income-tax Act, 1961 provided for deeming of the stamp duty value (circle rate) as sale consideration for transfer of real-estate inventory in the case the circle rate exceeded the declared consideration. Consequentially, stamp duty value was deemed as purchase consideration in case of buyer under section 56(2) (x) of the Act.
In order to provide relief to real estate developers and buyers, the Finance Act, 2018, provided a safe harbour of 5%. Accordingly, these deeming provisions triggered only where the difference between the sale/purchase consideration and the circle rate was more than 5%.
In order to provide further relief in this matter, Finance Act, 2020 increased this safe harbour from 5% to 10%. Therefore, currently, the circle rate is deemed to be the sale/purchase consideration for real estate developers and buyers only where the variation between the agreement value and the circle rate is more than 10%.
In order to boost demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory at a rate substantially lower than the circle rate and giving benefit to the home buyers, it has been decided to further increase the safe harbor from 10% to 20% under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in respect of only primary sale of residential units of value up to Rs. 2 crore.
Consequential relief by increasing the safe harbor from 10% to 20% shall also be allowed to buyers of these residential units under section 56(2) (x) of the Act for the said period. Therefore, for these transactions, circle rate shall be deemed as sale/purchase consideration only if the variation between the agreement value and the circle rate is more than 20%.
CBDT gives exemption to Abu Dhabi’s sovereign wealth fund MIC Redwood for investments
The Central Board of Direct Taxes (CBDT) has exempted dividend, interest and long term capital gains made by sovereign wealth fund MIC Redwood 1 RSC Limited, Abu Dhabi, United Arab Emirates in India from income tax subject to certain conditions.
The exemption has been given under the clause 23 FE of section 10 of the Income Tax Act which allows sovereign wealth funds to invest in infrastructure projects in India subject to conditions including prohibition from undertaking any commercial activity within or outside India.
Income Tax Compliance Calendar for Dec’2020
| Due Date | Purpose | Period | Description |
| 7th Dec | TDS /TCS Liability Deposit | Nov ‘20 | Depositing TDS/ TCS liability |
| 15th Dec | PF/ESI Payment | Nov’20 | Depositing contribution towards PF/ESI |
| 15th Dec | Professional Tax return | Nov’20 | Gujarat Monthly Professional tax Return |
| 15th Dec | Advance Tax | Oct’20- Dec’20 | Third Installment for AY 21-22 |
| 30th Dec | TDS Challan cum Statement in case of Section 194IA, 194IB and 194-M | Nov‘20 | Furnishing of challan-cum-statement under Section 194IA, 194IBand 194-M |
| 31st Dec | Return for Income, who is required to furnish a report under section 92E. | AY 2020-21 | Return of income for the assessment year 2020-21 for all assessee other than (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) partner of a firm whose accounts are required to be audited or (d) an assessee who is required to furnish a report under section 92E. |
| 31st Dec | Tax Audit report and Report in respect of International/Specified Domestic Transaction. | AY 2020-21 | Due date for furnishing of various audit reports including tax audit report and report in respect of international/specified domestic transaction for the Assessment Year 2020-21*. |
(Above due dates are subject to any changes notified by the department based on recommendations and situations)
Indirect Taxation
CBIC waves penalty on QR Code on e-invoices till March 31’2021
The Central Board of Indirect Taxes and Customs (CBIC) has waived penalty on non- implementation of dynamic quick response code which is mandatory for companies over Rs 500 crore turnover, till March 31, 2021. According to a notification issued Sunday, the Board said that the waiver will be applicable subject to the condition that compliance will be necessarily undertaken from April 1, 2021.
CBIC extends timeline under the Sabka Vishwas (Legacy Dispute Resolution) Scheme
The Central Board of Indirect Taxes and Customs vide its notification dated 13th November, 2020 has published the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (Removal of Difficulties) Order, 2020 to further amend the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019.
The following timeline has been extended for the persons in the Union Territory of Jammu and Kashmir and Union Territory of Ladakh, in respect of cases eligible under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, as on the15th January 2020.
The Last date for filing the declaration shall be on or before 31st December 2020 and the last date for the issuance of the statement is 31st January 2021.
The last date for the issuance of the estimate of the amount payable is on or before 15th January 2021 and the last date for the payment of the dues by the declarant shall be done on or before 28th February, 2021.
Central Goods and Service Tax (Thirteenth Amendment) Rules, 2020
Central Goods and Services Tax (Thirteenth Amendment) Rules, 2020 have been notified. Highlights of the same are:
• W.e.f. 01.01.2021, an option for quarterly filing of FORM GSTR-1 would be made available to the taxpayers.
• The registered persons required to furnish GSTR 3B return quarterly under proviso to sub-section (1) of section 39 may furnish the details of such outward supplies for the first and second months of a quarter, up to a cumulative value of fifty lakh rupees in each of the months,- using invoice furnishing facility (IFF) from the 1st day of the month succeeding such month till the 13th day of the said month.
• The details furnished using the IFF, shall not be furnished again in FORM GSTR-1 for that quarter.
• The details furnished through IFF shall include only B2B supplies along with relevant DNs and CNs.
• W.e.f. 01.01.2021, FORM GSTR-2A shall also include details furnished through IFF and also details of the integrated tax paid on the import of goods or goods brought in domestic Tariff Area from SEZ unit or a SEZ developer on a bill of entry.
• FORM GSTR-2B has been given legal backing.
• Rule 61 has been amended and FORM GSTR-3B has been notified as the monthly and quarterly return and FORM GSTR-3 has been done away with.
• The due dates for monthly GSTR-3B is the 20th of the succeeding month while that of the quarterly GSTR-3B is the 22nd or 24th of the month succeeding such quarter based on the principal place of business of the Registered Persons.
• Quarterly return filers shall pay tax for the first two months of the quarter by using PMT-06 by 25th day of the succeeding month.
• The amount paid as above shall be credited in the electronic cash ledger and has to be debited while filing GSTR-3B quarterly.
• Rule 61A has been inserted to provide for the manner of opting quarterly GSTR-3B. Such option has to be exercised from the 1st day of the second month of the preceding quarter till the last day of the first month of the quarter for which the option is being exercised. In simple words, quarterly option for Apr-Jun 2021 can be exercised from 01.02.2021 till 30.04.2021.
• A Registered person shall not be eligible to opt for furnishing quarterly return in case the last return due on the date of exercising such option has not been furnished.
• A registered person, whose aggregate turnover exceeds 5 crore rupees during the current financial year, shall opt for furnishing of return on a monthly basis, from the first month of the quarter, succeeding the quarter during which his aggregate turnover exceeds 5 crore rupees.
• HSN Codes have to be mandatorily specified in FORM GSTR-1 as per proviso to Rule 46.
Due Date extension for furnishing form GSTR 1 for the specified periods for monthly/quarterly filers
CBIC extended the time limit for furnishing the details of outward supplies in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017, for each of the tax periods, till the 11th of the month succeeding such tax period.
The time limit for furnishing the details of outward supplies in FORM GSTR-1 of the said rules for the class of registered persons required to furnish return for every quarter under proviso to section 39(1), shall be extended till the 13th of the month succeeding such tax period.
Notification prescribes the class of registered taxpayers with regard to furnishing the return under section 39(1) i.e. GSTR- 3B
Registered Persons having an aggregate turnover of up to Rs 5 crores in the preceding financial year and who have opted for quarterly return filing under Rule 61A as mentioned above can furnish quarterly GSTR-3B provided:
1. The return for the preceding month, as due on the date of exercising such option, has been furnished;
2. Once exercised, such option shall continue unless revised by the registered person.
Default migration has been prescribed for registered persons, who have furnished the return for the tax period October, 2020 on or before 30th November, 2020. Such default option can be changed from 05th December, 2020 to 31st January, 2021.
Special procedure for making payment of 35% as tax liability in first two months
The manner of making payment for the first two months of the quarter for quarterly fillers furnishing returns under section 39(1) of the CGST Act, i.e. GSTR-3B return. Two options are prescribed for monthly payment of taxes in case of quarterly return filers.
Fixed Sum Method: A facility is being made available on the portal for generating a pre-filled challan in FORM GST PMT-06 for an amount equal to 35% of the tax paid in cash in the preceding quarter where the return was furnished quarterly; or equal to the tax paid in cash in the last month of the immediately preceding quarter where the return was furnished monthly.
Self-Assessment Method: The said persons, in any case, can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit available, in FORM GST PMT-06.
In case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due for the first month of the quarter or where there is nil tax liability, the registered person may not deposit any amount for the said month. Similarly, for the second month of the quarter, in case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the cumulative tax due for the first and the second month of the quarter or where there is nil tax liability, the registered person may not deposit any amount.
E-invoicing applicable for registered taxpayers whose turnover exceeds 100 crores
CBIC notifies that E-invoicing is mandatory from 1st January 2021 for every taxpayer (other than SEZ unit) whose aggregate turnover (TO) exceed Rs. 100 crores instead of current limit of 500 crores.
GST Compliance Calendar for Nov’2020
| Applicable form | Due Date | Obligation |
| GSTR 01 (T.O. more than 1.5 Crore) | 11/12/2020 | Monthly (November 2020) |
| GSTR 3B | 22/12/2020 | Annual Turnover of up to INR 5cr in Previous FY – Nov 2020 (Group A: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep) |
| GSTR 3B | 24/12/2020 | Annual Turnover of up to INR 5 Cr in Previous FY – Nov 2020 ( Group B: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh, Chandigarh, Delhi) |
| GSTR 3B | 20/12/2020 | Annual Turnover of more than INR 5cr in Previous FY – Nov 2020 |
| GSTR 5 | 20/12/2020 | Monthly- Nov 2020 for Non Resident tax payers |
| GSTR 5A | 20/12/2020 | Monthly- Nov 2020 for NRI, OIDAR service provider |
| GSTR 6 | 13/12/2020 | Monthly- Nov 2020 for Input Service distributor |
| GSTR 7 | 10/12/2020 | Monthly- Nov 2020 for TDS Deductor |
| GSTR 8 | 10/12/2020 | Monthly- Nov 2020 for TCS Collector |
| GSTR 9,9A and 9C | 31/12/2020 | Financial Year (2018-19) |
Ministry of Corporate Affairs (MCA)
Extension of Last date of filing of CRA-4 (form for filing of Cost Audit report) for FY 2019-20 under the Companies Act 2013
The Ministry of Corporate Affairs released a circular on 1st December, 2020, and provided relaxation of additional fees and extension of the last date of filing of CRA-4 for the financial year 2019-20 under the Companies Act 2013.
CRA-4 Form is used for filing the cost audit report. MCA decided that if the cost auditor submits the cost audit report for the financial year 2019-20 in front of the Board of Directors of the companies by 31st December 2020 then it will not be considered as a violation of rule 6(5) of Companies (cost records and audit) Rules, 2014.
DSC Update: Class 2 DSC’s issuance will be withdrawn as per CCA Directions
The Controller of Certifying Authorities (CCA) issued the update on the Class 2 Digital Signature Certificate (DSC’s) issuance, which will be withdrawn, and only Class 3 DSC will be issued from 1st January 2021. Under the Information Technology Act, Digital Signature Certificates (DSC) is being issued by Certifying Authorities (CA) on successful verification of the identity and addresses credentials of the applicant.
There have been a lot of changes to embrace a newer reality which are summarized as below:
(a) CLASS – 2 DSC will discontinue from 1st January, 2021
(b) Government DSC would require a Video.
(c) There would be no Traditional DSC (No Paper based DSC) from 1stJan 2021.
(d) ALL DSC have to be downloaded within 30 Days after approval.
What will happen and what one should do?
• Please download all the DSC from the system, because all pending download would be rejected by the system automatically.
• All Class-2 DSC approved would be rejected as well (If not downloaded before 31st Dec, 2020), so please approve the same and get the same downloaded before 31st. December 2020.
• Clients should renew the certificates now in Class 2 before 31/12/2020, because renewing the certificate with class-3 will be more expensive then class-2.
• In our system, all links which were generated for class-2 will expire, so one would have to recreate the same.
• ll the conversion would happen automatically, and there would be no manual work required at your end.
• If one have tender or Government Supply, please inform them that the supply would stop as there would be NO Class-2.
Recommendation
The client should be aware about this situation that now from 01/01/2021 Class 3 DSC is mandatory and cost of the Class 3 is higher than class 2 and hence they should renew or generate DSC of Class 2 for two years or 3 years before 31st December, 2020, so that client can save money at least for next 2 or three years.
IBC
Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2020
The Insolvency and Bankruptcy Board of India on November 23, 2020 has issued the Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2020. The Board will prepare a common Panel of IPs for appointment as IRP, Liquidator, RP and BT and share the same with the AA (Hon’ble NCLT and Hon’ble DRT) in accordance with these Guidelines. An IP will be eligible to be in the Panel of IPs, if –
• There is no disciplinary proceeding, whether initiated by the Board or the IPA of which he is a member, pending against him;
• He has not been convicted at any time in the last three years by a court of competent jurisdiction;
• He expresses his interest to be included in the Panel for the relevant period;
• He undertakes to discharge the responsibility as IRP, Liquidator, RP or BT, as he may be appointed by the AA;
• He holds an Authorization for Assignment (AFA), which is valid till the validity of Panel. For example, the IP included in the Panel for appointments during January – June 30, 2021 should have AFA valid up to June 30, 2021.
The liquidator can now assign or transfer a not readily realizable asset to any person.
The Insolvency and bankruptcy board of India vide its notification dated 13th November 2020 has published the Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020 to further amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
The Amendment brings in a new regulation 30A which deals with the transfer of debt due to creditors in which a creditor may assign or transfer the debt due to him or it to any other person during the liquidation process in accordance with the laws for the time being in force dealing with such assignment or transfer and the liquidator shall modify the list of stakeholders in accordance with the provisions of regulation 31.
Further under regulation 37A, the liquidator may assign or transfer a not readily realizable asset through a transparent process, in consultation with the stakeholders’ consultation committee in accordance with regulation 31A, for a consideration to any person, who is eligible to submit a resolution plan for insolvency resolution of the corporate debtor.
IBBI Notifies Insolvency Resolution Process for Corporate Persons (Fifth Amendment) Regulations, 2020
The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2020 which seeks to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Insolvency and Bankruptcy Code, 2016 enables a financial creditor, among others, to initiate a corporate insolvency resolution process against a corporate debtor. The financial creditor, along with the application, is required to furnish “record of the default recorded with the information utility or such other record or evidence of default as may be specified”. In exercise of this power, the IBBI amended the Regulations to specify two ‘other records or evidence of default’, namely, certified copy of entries in the relevant account in the bankers’ book, and order of a court or tribunal that has adjudicated upon the non-payment of a debt.
The IBBI amended the Regulations to require the IRP/RP to submit the list of creditors on an electronic platform for dissemination on its website. This will improve transparency and enable stakeholders to ascertain the details of their claims at a central place. The IBBI further amended that the resolution professional shall, within 15 days of the order of the Adjudicating Authority approving a resolution plan, intimate each claimant, the principle or formulae, as the case may be, for payment of debts under such resolution plan. However this shall apply to every corporate insolvency resolution process ongoing and commencing on or after the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2020.
RBI
RTGS Fund transfer will be available 24 * 7 from December 2020
The Reserve Bank of India has said that Real Time Gross Settlement System (RTGS), used for large value transactions, will be made available round-the-clock from December 2020. Currently, RTGS is available for customers from 7.00 am to 6.00 pm on all working days of a week, except second and fourth Saturdays of every month. Announcing the bi-monthly RBI Monetary Policy decision, RBI Governor Shaktikanta Das said, customers will get round-the clock availability of Real Time Gross Settlement (RTGS) System. “In December 2019, the RBI made available the National Electronic Funds Transfer (NEFT) system on a 24x7x365 basis and the system have been operating smoothly since then. In order to facilitate swift and seamless payments in real time for domestic businesses and institutions, it has been decided to make available the RTGS system round the clock on all days from December 2020.”
MSME
SIDBI Launches portal to help MSME
Small Industrial Development Bank of India (SIDBI) on Monday said it has launched a web portal to help micro; small and medium enterprises (MSMEs) take benefit of the Reserve Bank of India’s one time debt restructuring. In August RBI has announced onetime restructuring for personal and corporate borrowers affected by Covid-19 related stress. With the help of Do-It-Yourself asset restructuring web module, MSME’s will be able to prepare restructuring proposals by keying in only the most essential data for past financials, future projections and restructuring requirement, SIDBI said in a release.
The proposal prepared can be submitted online to the banks and reports can also be generated for submission to banks through E-mail or in Hard Copies.
The module is being offered free of cost as a part of SIDBIs development initiatives.
