Direct Taxation
CBDT extends due date for filing Income Tax Returns and Tax Audit Report for the AY 20-21
The Central Board of Direct Taxes vide notification dated the 29th October, 2020 has extended the time-limit for furnishing of annual income tax return. Every person who has entered into an international transaction or specified domestic transaction during the previous year shall submit the return by 31st day of January, 2021. In respect of other assesses, the due date shall stand extended to the 31st day of December, 2020. Furnishing of report of audit under any provision of that Act, the time-limit for furnishing of such report of audit shall stand extended to the 31st day of December, 2020. This notification shall come into force from the date of its publication in the Official Gazette. Read more
Ministry of Finance extends the time till 31st March 2020 for making payment under Vivad Se Vishwas scheme
The Ministry of Finance vide its notification dated 27th October 2020 has extended the time limit for making payment under the direct tax dispute settlement scheme Vivad se Vishwas by three months to 31st March 2021. Further, it has notified 31st December 2020 as the cut-off date for filing declaration under the Vivad se Vishwas Act, 2020. Read more
Clarifications on Payment under Direct Tax Vivad se Vishwas Act, 2020
The Central Board of Direct Taxes vide Circular dated 28th October, 2020 has issued Clarifications in respect of the Direct Tax Vivad se Vishwas Act, 2020. 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. 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 shall allow the declarant to make payment without additional amount on or before 31st March, 2021. Read more.
Clarification on calculation of Arm’s Length Price of International Transaction or Specified domestic transaction for AY 20-21
The Ministry of Finance vide notification dated the 19th October, 2020 has notified that where the variation between the arm’s length price determined under section 92C of the said Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent of the latter in respect of wholesale trading and three percent of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for assessment year 2020-2021. Read more
Amendment of the Income Tax Rules, 1962 to prescribe manner relating to option under section 115BAC and 115BAD, and that of determination of depreciation under section 115BAA to 115BAD, of the Income Tax Act 1961
The Central Board of Direct Taxes (CBDT) on October 01, 2020 has issued the Income-tax (22nd Amendment) Rules, 2020 to further amend the Income-tax Rules, 1962.
The following amendments have been made:
• Rule 5(1), which specifies the depreciation of the block of assets to 40%, has been substituted, namely:
“Provided that the allowance under clause (ii) of sub-section (1) of Section 32 in respect of depreciation of any block of assets entitled to more than forty per cent shall be restricted to forty per cent on the written down value of such block of assets in case of:
1. A domestic company which has exercised option under sub-section (4) of Section 115BA or under sub-section (5) of Section 115BAA, or under sub-section (7) of Section 115BAB.
2. An individual or Hindu undivided family which has exercised option under sub-section (5) of section 115BAC.
3. A co-operative society resident in India which has exercised option under sub-section (5) of section 115BAD.
• A new Rule 21AG, which specifies the exercise of option under sub-section (5) of Section 115BAC, has been inserted, namely:
“The option to be exercised in accordance with the provisions of sub-section (5) of Section 115BAC by a person, being an individual or Hindu undivided family, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall be in Form No. 10-IE.”
• A new Rule 21AH, which specifies the exercise of option under sub-section (5) of Section 115BAD, has been inserted, namely:
“The option to be exercised in accordance with the provisions of sub-section (5) of Section 115BAD by a person, being a cooperative society resident in India, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall be in Form No. 10-IF.” Read more
The Equalization Amendment Rules, 2020
The Central Board of Direct Taxes vide its notification dated 28th October 2020 has published the Equalization levy (Amendment) Rules, 2020. The ‘Equalization Levy’ has been introduced to provide for an equalization levy of 6% to be deducted from amounts paid to a non-resident not having any permanent establishment in India, for specified services.
Through this amendment, a new definition for the term “electronic verification code” has been inserted which states that it is a code generated for the purpose of electronic verification of the person furnishing the statement of specified services as per the data structure and standards laid down by the Principal Director- General of Income-tax (Systems) or Director General of Income-tax (Systems), as the case may be.
The assessee or e-commerce operator, as the case may be, who are required to deduct and pay equalization levy, shall pay the amount of such levy, by remitting it into the Reserve Bank of India or in any branch of the State Bank of India or of any authorized Bank accompanied by an equalization levy challan. Read more
Income Tax Compliance Calendar for Nov’2020
| Due Date | Purpose | Period | Description |
| 7th Nov | TDS /TCS Liability Deposit |
Oct ‘20 | Depositing TDS/ TCS liability |
| 15th Nov | PF/ESI Payment | Oct’20 | Depositing contribution towards PF/ESI |
| 15th Nov | Professional Tax return | Oct’20 | Gujarat Monthly Professional tax Return |
| 30th Nov | TDS Challan cum Statement in case of Section 194IA, 194IB and 194-M | Oct‘20 | Furnishing of challan-cum-statement under Section 194IA, 194IBand 194-M |
| 30th Nov | Income Tax Return | AY 2019-20 | Belated Income tax Return for AY 2019-20 |
Indirect Taxation
CBIC extends the due date for filing of GSTR-9, GSTR-9A and GSTR-9C till December 31, 2020
The Central Board of Indirect Taxes and Customs (CBIC) on October 24, 2020 has issued a press release for the extension of due dates for Annual Returns and Reconciliation Statement for 2018-19. Due to the COVID-19 pandemic, the Board has decided to further extend the due date for filing of Annual Returns in GSTR-9A and GSTR-9 and Reconciliation Statement in GSTR-9C for the financial year 2018-19 to December 31, 2020.
Further, the filing of annual returns is optional for taxpayers having an aggregate turnover of below 2 crores. In addition to this, the filing of reconciliation statement is optional for taxpayers having aggregate turnover up to 5 crores. Read more
CBIC extends the due date for filing of GSTR-1 for registered person with aggregate turnover up to 1.5 crores
The Central Board of Indirect Taxes and Customs (CBIC) on October 15, 2020 has issued a notification specifying that the registered persons having an aggregate turnover of up to 1.5 crores in the preceding financial year or the current financial year shall follow a special procedure for furnishing the details of outward supply of goods or services or both.
The said registered persons shall furnish the details of outward supply of goods or services or both in FORM GSTR-1 under the Central Goods and Services Tax Rules, 2017, effect during the quarter as specified:
• For the quarter of October 2020 to December 2020 the details shall be furnished by January 13, 2021.
• For the quarter of January 2021 to March 2021 the details shall be furnished by April 13, 2021.
Read more.
CBIC extends the due date of filing of GSTR-1 for registered person with aggregate turnover of more than 1.5 crores
The Central Board of Indirect Taxes and Customs (CBIC) on October 15, 2020 have issued a notification extending the time limit for the filing of Form GSTR-1 which specifies the furnishing of details of outward supplies. The class of registered persons, who have an aggregate turnover of more than 1.5 crores, in the preceding financial year or the current financial year for each of the months from October, 2020 to March, 2021 till the eleventh day of the month succeeding such month. Read more
CBIC extends the due date of filing of GSTR-3B for registered person with aggregate turnover up to 5 crores
The Central Board of Indirect Taxes and Customs (CBIC) on October 15, 2020 has issued a notification stating that all the registered person (Aggregate turnover of more than 5 Crore) filing Form GSTR-3B shall do so electronically through the common portal, on or before the 20th of every month, succeeding each month for the months October 2020 to March 2021.
All the taxpayers, who had an aggregate turnover of up to 5 crores in the previous financial year, and who have the place of business as Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep, the return in GSTR Form-3B shall filed on or before the 22nd of every month and the succeeding month, through the electronic portal for the months of October 2020 to March 2021. Read more
E-invoicing Relaxations and Latest Changes
Keeping in view the hardships faced by the taxpayers due to COVID-19 lockdown and as some of these taxpayers are still not ready, as a last chance, Government had given relaxation that invoices raised by notified taxpayers during October, 2020 without following e-invoice procedure (i.e. uploading invoice details on e-invoice portal (IRP), obtaining IRN and issuing invoice with QR Code) will be deemed to be valid and no penalty will be there if the IRN(Invoice Reference Number) for such invoices is obtained within 30 days of date of invoice. Read more
Blocking of E- way Bill Generation facility for Tax Payers with Aggregate Annual Turnover over Rs. 5 crore, after 15th October 2020
If the GSTIN associated with the respective PAN (with AATO over Rs 5 Cr.) has failed to file their GSTR-3B Return for 02 or more tax periods, up to the month of tax period of August, 2020, their EWB generation facility will be blocked on the EWB Portal. Please note that the EWB generation facility for such GSTINs (whether as consignor or consignee or by transporter) will be blocked on EWB Portal after 15th October, 2020. Read more
Filing NIL Form CMP-08 statement through SMS on GST Portal
A Composition taxpayer may now file NIL statement in Form GST CMP-08 for a quarter, through an SMS, apart from filing it through online mode, on GST Portal.
To file NIL Form GST CMP-08 through SMS, the taxpayer must fulfill following conditions:
• Taxpayer must be registered as composition taxable person (by filing Form GST REG-01) or the taxpayer might have opted for composition levy (by filing Form GST CMP-02).
• Taxpayer must have filed all the applicable statement(s) in Form GST CMP-08 for the previous quarter(s).
• Authorized signatory and his/ her phone number must be registered on the GST Portal.
• There must not be any data in save stage, in online version of Form GST CMP-08, on the GST Portal.
• NIL Form CMP-08 for a tax period must be filed by the taxpayer, if there is no:
a) outward supplies;
b) liability due to reverse charge (including import of services); and
c) Other tax liability for the quarter, for which the statement is being filed.
d) Steps to File Nil Form GST CMP-08 through SMS are as below:
1) Send SMS to 14409 number to file Nil Form CMP-08 ie NIL space Return Type space GSTIN space Return Period.(For example for NIL Filing for Tax Period Apr-Jun 2020: NIL C8 07AQDPP8277H8Z6 062020).
2) Send SMS again on the same number 14409 with Verification Code to confirm filing of Nil Form CMP-08.(For Example: If Verification Code received here is 324961: CNF space Return Type space Code – CNF C8 324961)
3) After successful validation of “Verification Code”, GST Portal will send back ARN to same mobile number and on registered e-mail ID of the taxpayer to intimate successful Nil filing of Form GST CMP-08.
All the authorized representatives for a particular GSTIN, with unique mobile number can file NIL Form GST CMP-08 through SMS.
The due date for filing of Form GST CMP-08 is 18th of the month following the quarter. Read more
GST ITC cannot be disallowed when seller had not paid tax to government if purchaser have valid invoice
Input Tax Credit (ITC) basically means reducing the taxes paid on inputs from taxes to be paid on output. When any supply of services or goods is supplied to a taxable person, the GST charged is known as Input Tax.
Claiming ITC can sometimes be complex as the tax authorities generally disallow eligible ITC. Let us refer to the case of Sri Ranganathar Valves (P.) Ltd vs. Assistant Commissioner (CT) (2020), where one of the issues was Prior Sufferance of Taxes.
Observations of the High court:
The Assessing Officer (AO) was of the view that some of the sellers from whom the petitioner had purchased the goods had not paid tax to the Government and therefore had disallowed the ITC of the petitioner.
This issue was dealt with in the case of Assistant Commissioner (CT) v. Infiniti Wholesale Ltd. [2017] (Mad), wherein it was held that ITC could not be disallowed on the ground that the seller had not paid tax to the Government, when the purchaser was able to prove that the seller had collected tax and issued invoices to the purchaser.
The HC, therefore in this case concluded that, restriction of the amount of ITC on this ground, could not be sustained and required re-consideration.
Conclusion by Madras HC:
ITC could not be disallowed on the ground that the seller had not paid tax to the Government, when the purchaser was able to prove that the seller had collected tax and issued invoices to the purchaser.
Summary for 42nd GST Council Meet
The 42nd GST Council met under the chairmanship of Union Finance and corporate affairs minister Smt Nirmala Sitharaman. The meeting was attended by union, state and UT’s Finance ministers. The GST council has made the following recommendations:-
1. Levy of Compensation cess to be extended beyond transition period, i.e. beyond June 22, to meet the revenue gap.
2. Centre is releasing compensation of Rs.20,000 cr to state towards loss of revenue during2020-2021 and an amount of Rs.25000 cr towards IGST of 2017-18 by next week.
3. Enhancement in features of return filing:-
The approved framework by council to simplify return filing and reduce tax compliance includes the following:
• Due date of furnishing quarterly GSTR 1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f 01.01.2021.
• Roadmap for auto generation of GSTR3B from GSTR 1 by:
o Auto population of liability from own GSTR 1 w.e.f 01.01.2021
o Auto population of ITC from suppliers’ GSTR 1 through the newly developed facility in the FORM GSTR 2B for monthly filers w.e.f 01.01.2021 and for quarterly filers w.e.f 01.04.2021;
• In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, Form GSTR 1 would be mandatorily required to be filed before form GSTR 3B w.e.f 1.4.2021.
• The present GSTR 1/3B returns filing system to be extended till 31.3.2021.
4. To reduce burden compliance for small taxpayers having aggregate turnover of less than Rs. 5cr, they will be allowed to file returns on a quarterly basis with monthly payments which will be implemented w.e.f 1.1.2021. Such quarterly taxpayer would for the first two months have an option to pay 35% of net cash tax liability of the last quarter through auto generated challan.
5. Revised requirement of declaring HSN for Goods and SAC for services in invoices and in form GSTR 1 will come in effect from 01.04.2021.
6. Various amendments in CGST Rules and Forms have been recommended which include provision for furnishing nil form CMP-08 through SMS.
7. Refund to be paid/ disbursed in a validated bank account linked with the PAN and Aadhar of registrant with effect from 01.01.2021.
8. To encourage domestic launch of satellites particularly by young start ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd and NSIL would be exempted.
GST Compliance Calendar for Nov’2020
| Applicable form | Due Date | Obligation |
| GSTR 01 (T.O. more than 1.5 Crore) | 11/11/2020 | Monthly (October 2020) |
| GSTR 2 | 15/11/2020 | Monthly statement of Inward supplies of taxable goods and / or services by the registered taxable recipient. |
| GSTR 3B | 22/11/2020 | Annual Turnover of up to INR 5cr in Previous FY – Oct 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 | 24/11/2020 | Annual Turnover of up to INR 5 Cr in Previous FY – Oct 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 | 20/11/2020 | Annual Turnover of more than INR 5cr in Previous FY – Oct 2020 |
| GSTR 5 | 20/11/2020 | Monthly- October 2020 for Non Resident tax payers |
| GSTR 5A | 20/11/2020 | Monthly- October 2020 for NRI, OIDAR service provider |
| GSTR 6 | 13/11/2020 | Monthly- October 2020 for Input Service distributor |
| GSTR 7 | 10/11/2020 | Monthly- October 2020 for TDS Deductor |
| GSTR 8 | 10/11/2020 | Monthly- October 2020 for TCS Collector |
Ministry of Corporate Affairs (MCA)
The companies (Prospectus and Allotment of Securities) Amendment Rules, 2020
The Ministry of Corporate Affairs vide its notification dated 16th October 2020 has published the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2020 to further amend the Companies (Prospectus and Allotment of Securities) Rules, 2014.
The Amendment is brought under rule 14 which deals with private placement in which a company may make an offer or invitation to subscribe to securities through issue of a private placement offer letter in Form PAS-4.
A private placement offer letter shall be accompanied by an application form serially numbered and addressed specifically to the person to whom the offer is made and shall be sent to him, either in writing or in electronic mode, within thirty days of recording the names of such persons in accordance with sub-section (7) of section 42.
Through this amendment the following proviso has been inserted under rule 14:
“Provided also that in case of offer or invitation of any securities to qualified institutional buyers, it shall be sufficient if the company passes a previous special resolution only once in a year for all the allotments to such buyers during the year” Read more
Special Measures under the Companies Act 2013 and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak- Extension
In continuation to General Circular No.11/2020 dated 24th March, 2020, it is hereby clarified that non compliance of minimum residency in India for a period of at least 182 days in a year, by at least one director in every company, under section 149 of the Companies Act 2013 shall not be treated as non compliance for the Financial Year 2020-21 also. Read more
Reserve Bank of India (RBI)
Digital Payment Transactions- Streamlining QR code Infrastructure
Reserve Bank had constituted a Committee (Chairperson: Prof Deepak Phatak) to review the current system of Quick Response (QR) Codes in India and suggest measures for moving towards interoperable QR Codes. The report of the Committee containing various recommendations was placed on the Reserve Bank website for public comments and feedback.
After examining the recommendations and the feedback received, the following has been decided:
i. The two interoperable QR codes in existence – UPI QR and Bharat QR – shall continue as at present.
ii. Payment System Operators (PSOs) that use proprietary QR codes shall shift to one or more interoperable QR codes; the process of migration shall be completed by March 31, 2022.
iii. No new proprietary QR codes shall henceforth be launched by any PSO for any payment transaction.
iv. RBI shall continue a consultative process to standardize and improve interoperable QR codes, to enable beneficial features identified by the Phatak Committee.
v. PSOs may take initiative to increase awareness about interoperable QR codes. Read more
Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020)
The Government of India has announced the Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020) (the ‘Scheme’) on October 23, 2020, which mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. Read more
Security Exchange Board of India (SEBI)
SEBI extends settlement scheme for illiquid stock option cases till Dec 31’ 2020
In view of the large-scale disruption caused by the COVID-19 pandemic, markets regulator SEBI has extended till December 31, 2020 the one-time settlement scheme for entities that executed reversal of trades in stock options segment of the BSE during 2014 and 2015. The settlement scheme, introduced by the regulator in July, commenced on August 1, 2020 and was supposed to end on October 31, 2020.
However, amidst the disruption caused by the pandemic, SEBI received many representations seeking extension of the period of the scheme, the regulator said in a public notice issued late on 31st October 2020.The competent authority has approved the extension of the period of the scheme till December 31, 2020.
As per the notice issued by SEBI in July, entities who do not avail the one-time settlement opportunity will be liable for action after the expiry of the scheme. Under the scheme, the entities which executed trade reversals on the stock options segment of the BSE during April 1, 2014 to September 30, 2015 period and against whom any proceedings are pending, are eligible to avail the settlement opportunity.
To arrive at an indicative settlement amount, SEBI considered three objective parameters — artificial volume, number of non-genuine trades and number of contracts resulting in creation of artificial volume or non-genuine trades, the regulator had said. Further, a uniform consolidated settlement factor in all cases wherein the entities had executed reversal trades would be applicable while arriving at the indicative settlement amounts.
As part of its ongoing surveillance, SEBI had come across several instances wherein a set of entities were consistently making losses by their trading in options on individual stocks listed on the BSE.
It noted that the trading of these entities appeared abnormal because they were consistently seen to be making significant losses by their trades, which were reversed with the same counterparties either on the same day or the next day. Accordingly, an analysis of the stock options segment of the BSE for April 1, 2014 to September 30, 2015 period was carried out.
It was observed that there were several entities that consistently made significant losses, whereas there were others who consistently made significant profits by executing reversal trades in stock options on the BSE.
Out of 21,652 entities that executed trades on the BSE stock options segment, a total of 14,720 entities were involved in generation of artificial volume by executing non-genuine or reversal trades on the same day. Read more
