MCA updates
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Extension of due dates
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The MCA has extended the due dates for filing BEN-2 and DIR-3 KYC as per details below:
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e-Form |
Previous Due Date |
Extended Due Date |
DIR-3 KYC |
30.09.2019 |
14.10.2019 |
BEN-2 (Significant Beneficial Ownership) |
30.09.2019 |
31.12.2019 |
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Income Tax updates
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Payments to Farmers – No TDS
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A commission agent or trader, operating under Agriculture Produce Market Committee (APMC) and registered under any Law relating to Agriculture Produce Market of the concerned State can withdraw cash in excess of Rs. 1 crore for the purpose of making payments to the farmers on account of purchase of agriculture produce subject to certain conditions of disclosure. There will be no TDS under Section 194N.
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Taxation Laws (Amendment) Ordinance, 2019
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The Ministry of Law and Justice has notified the Taxation Laws (Amendment) Ordinance 2019 on 20.09.2019. Following are the highlights:
- Introduction of Section 115BAA – Tax rates for all domestic companies have been reduced to 22% (effective rate 25.17%, including surcharge of 10% and cess of 4%), subject to condition that no tax holidays/ incentives/ exemption are availed. In addition, such companies would not be required to pay Minimum Alternative Tax (MAT).
- Introduction of section 115BAB – Domestic manufacturing companies (including Indian companies with foreign direct investment) incorporated on or after 1st October 2019 shall be required to pay corporate tax @ 15%, (effective rate 17.16% including surcharge and cess). This is subject to the condition that no tax exemption/ incentive is availed and company commences production before 31st March, 2023. Further, such companies shall not be required to pay MAT.
- Companies not opting for concessional tax regime and availing tax exemption/incentive shall continue to pay tax at pre-amended rate. In order to provide relief to such companies, rate of MAT has been reduced from existing 18.5% to 15% (i.e, effective MAT reduction of ~4.076% after considering surcharge and cess).
- Companies can opt for the concessional tax regime (i.e. 22% tax rate) after expiry of tax holiday/exemption period. Option once exercised cannot be subsequently withdrawn.
- The Budget 2019 announcement of expanding the scope of buy-back tax to include buybacks by listed companies has been grandfathered to the extent of shares of such listed companies which have already made a public announcement of buyback before July 5, 2019. Such shares would not be subjected to the buy back tax U/s 115QA.
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Income Tax (9th Amendment) Rules, 2019
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CBDT (Central Board of Direct Taxes) has notified the Income Tax (9th Amendment) Rules, 2019 which shall have deemed to have come into effect from the 23.08.2019. Following are the highlights:
- The depreciation on Motor Cars for personal use has been increased to 30% on WDV basis for purchase of vehicles from 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020.
- The depreciation on Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020 has been increased to 45% on WDV basis.
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GST updates
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RCM – CGST
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W.e.f 01.10.2019, following are the changes in RCM-CGST:
- Supply of services by a music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original dramatic, musical or artistic works to a music company, producer or the like has been amended to exclude the services by an author relating to original literary work.
- Supply of services by a music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under S.13 (1)(a) of the Copyright Act, 1957 relating to original dramatic, musical or artistic works to a music company, producer or the like, has been inserted. UTGST must be levied by the Author subject to certain exceptions.
- Services provided by way of renting of a motor vehicle provided to a body corporate by any person other than a body corporate, paying union territory tax at the rate of 2.5% on renting of motor vehicles with input tax credit only of input service in the same line of business to any Body corporate located in the taxable territory has been inserted.
- Services of lending of securities under Securities Lending Scheme, 1997 (“Scheme”) of Securities and Exchange Board of India (“SEBI”), as amended by a Lender i.e. a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI to a Borrower i.e. a person who borrows the securities under the Scheme through an approved intermediary of SEBI has been inserted.
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Clarification w.r.t Place of Supply – R&D services
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Place of supply in respect of supply of R&D Services related to pharma sector has been clarified as follows :
Nature of supply : Supply of research and development services related to pharmaceutical sector as specified in Column (2) and (3) from Sl. No. 1 to 10 in the Table B by a person located in taxable territory to a person located in the non-taxable territory.
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Place of supply in respect of above: The place of supply of services shall be the location of the recipient of services subject to fulfilment of the following conditions:-
- Supply of services from the taxable territory are provided as per a contract between the service provider located in taxable territory and service recipient located in non-taxable territory.
- Such supply of services fulfils all other conditions in the definition of export of services, except sub- clause.
- provided at clause (6) of Section 2 of Integrated Goods and Services Tax Act, 2017 (13 of 2017).
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Note: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.
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