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CA

GST Implication on renting of immovable property

August 26, 2022



Background:

1. Renting of immovable property was first brought under the service tax net 15 years ago, under the positive list regime in the year 2007. While it was shrouded with some ambiguity, the same was made abundantly clear through retrospective amendments made in law subsequently. Thereafter, with the advent of the negative list regime under the service tax laws from July 2012, a specific entry in the declared service list was incorporated to expressly state that such services are within the ambit of service tax laws, lest a contention may have been raised by taxpayers that mere renting is not a "service".

2. Under the GST regime, the provisions continued Para Materia, by way of inclusion of the words "license, rental, lease" within the definition of "supply" itself.

3. Throughout the above period, the intention of the government seemed to be tacitly clear – to levy tax on commercial rentals and short-term accommodation (subject to threshold limits) while at the same exempt residential rentals.

4. The two-fold tests to determine the eligibility of exemption in the case of residential rentals under the GST regime were – firstly, the nature of property test, i.e. property should be a "residential dwelling"; and secondly, the end-use test, i.e. property should be used as a residence. Other factors such as the registration status of the lessor or lessee were not material.

5. In case of accommodation services by commercial spaces (hotels, inns, guest houses, etc. ) are not covered under the exemption above, separate exemption entry was available where the declared tariff was below Rs. 1,000 per day. If such spaces are rented through eCommerce operators, such operator is required to pay tax under section 9(5) of the CGST/SGST Act in cases where the supplier is unregistered. Where the supplier is registered, tax shall be paid on a forwarding charge basis, but may attract TCS provisions under section 52 of the CGST/SGST Act.

Emerging business models:

6. Whilst the above tax positions were simple enough on paper, practically various business structures emerged which necessitated specific address by the Government. Take for instance a structure where residential properties are rented and used as residences but managed by third parties as part of their commercial operations. For example, a residential property with many units is taken on rent by a commercial operator and run as managed paying-guest accommodations or hostels. Further vagaries in these structures may exist whereby the property may be rented by the commercial operator who in turn sublets to the tenants (sublet model) or the property is directly rented by the landowner to the tenants with the commercial operators taking their share by way of service fees charged to the tenant and/or landowner (agency model) or existence of multiple such operators or managing the properties for institutional customers such as educational institutions (as hostels for students), factories (as PG for workers), etc. . Added to this, the commercial operator may be running the rentals through e-Commerce which would overlap the eCommerce-operator specific GST provisions.

7. In the above backdrop, various rulings of Authority for Advance Rulings were being pronounced across the country wherein some of these structures were evaluated. One such ruling eventually culminated in a Karnataka High Court judgement in the case of Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling [2022]  wherein the Honourable High Court held that the exemption notification does not require the lessee itself to use the premises as a residence, and hence, as long as the dual conditions of a residential dwelling and end-use for residential purposes are fulfilled, the service remains exempt.

Amendments in July 2022:

8. Perhaps considering the emerging models as taking advantage of a loophole in the GST law and to mop-up tax collections, the Government has made a series of amendments in this regard which are effective from 18 July 2022, which can be summarized below :

8.1. A new condition has been added to the exemption notification for residential rentals, whereby apart from the nature of dwelling and end-use conditions which existed earlier, exemption from GST is not available "where the residential dwelling is rented to a registered person". Such residential rental services not covered under the exemption notification are now taxed at 18%.

8.2. The exemption limit of Rs. 1,000 per day is removed in the case of hotels, inns, campsites, etc. and such services are now taxed at 12% (where the declared tariff per day is more than Rs. 7,500 per day, the applicable tax rate remains unchanged at 18%).

8.3. "Service by way of renting of a residential dwelling to a registered person" is now covered under the reverse charge mechanism where the lessee will be the person responsible for remit tax, irrespective of end-use.

Flowchart to determine taxability:

9. With these set of amendments being made, we shall now attempt to simplify the tax implications using the below flowchart :

Note: this is just an attempt to simplify the understanding of GST implications on property rentals in general. Specific implications have to be evaluated appropriately in accordance with applicable law.

Flowchart to determine taxability

Areas of concern:

10. Taxpayers may look out for the following implications and ambiguities :

10.1. RCM applies even when the residential dwelling is used for commercial purposes by the lessee who is a registered person. In other words, if a "residential dwelling" is taken on rent as a commercial office by any registered taxpayer, GST is now payable under RCM even if the landlord is registered (RCM is not optional).

10.2. Where managed residential properties (such as hostels) are directly rented to end customers, the agreement between the landlord and the operator needs to be checked for implied "renting" between the landowner and managed service operator, based on the substance and conduct of the parties.

10.3. Corporates taking residences on rent for providing rent-free accommodation to employees or as hostels, etc. may be required to remit GST under RCM.

10.4. "Residential dwelling" is not defined under GST laws – guidance will have to be taken from records as per Municipal and other authorities, categorization for the purposes of electricity/water/utilities, property tax rates, etc.

10.5. Input tax credit will not be available in cases where output tax is paid under RCM basis by the recipient or where output tax is exempt.

10.6. In a scenario where the residential dwelling is taken on rent by registered persons who in turn rent it to another registered person, GST shall be payable under RCM on both legs of the rentals. Thereby the GST paid under RCM by the first lessee shall not be creditable and will become a cost. The seamless credit chain would be broken.

10.7. Lessors and lessees should have concurrence on the nature of property and end-use. It is suggested to include the same expressly in the rental agreements to avoid future disputes relating to facts.

10.8. Other specific implications on rentals affecting charitable trusts, long-term rentals, rentals from the government, etc. are not covered in this article and will have to be considered separately.

10.9. Rental of residential dwellings taken by educational institutions, hospitals, etc. for use as a residence (as hostels/PGs, etc.) may become taxable if such educational institution/hospital is required to obtain GST registration for any purpose.

10.10. Place of supply in case of rentals would be where the property is located. Hence, for payment of tax under RCM, the registered person would be required to remit tax from the state where the property is located.

Concluding Remarks

11. From the above, it can be seen that the taxability, person liable to pay tax, rate of tax, input tax credits, and other implications vary based on several permutations involved. The implications also vary based on certain keywords and phrases such as "residential dwelling" and "use as a residence" which are not expressly defined under the law. The government is humbly requested to take cognizance of the same and duly clarify the scope and ambit of the vagueness in order to avoid needless litigations. As the saying goes, "Mystification is simple; clarity is the hardest thing of all".


- C.A. Krishna Bansal

Business

Income Tax for NRI and how income will be taxed in India effective from FY 2020-21 (AY 20-21)

May 16, 2020
Among the global pandemic crisis and the expected economic turmoil, the Finance Bill 2020 has been passed by the Parliament with some major relaxations on March 23, 2020. At the stage of the passing of the Bill, the amendments originally proposed in the criteria determining 'residential status' in India of a person in the Finance Bill 2020 were relaxed. This change will directly impact the non-resident Indian (NRI) community. The Finance Bill 2020 has received the President's assent on March 27, 2020.

Let us have a look at the significant amendments to the criteria determining 'residential status' in the Finance Bill 2020 as passed by the Parliament.

  • New rules to determine the residential status of NRIs

Till the end of FY 2019-20, NRIs (covers Indian citizens and Persons of Indian Origin) included those individuals who visited India for less than 182 days in a financial year. In February 2020, the Budget 2020 proposed to reduce this period to 120 days foR all NRIs.

However, an amendment at the time of passing of the Budget provides that the reduced period of 120 days shall apply, only in cases where the total Indian income (i.e., income accruing in India) of such visiting individuals during the financial year is more than Rs 15 lakh. Accordingly, visiting NRIs whose total income (which is defined as taxable income) in India is up to Rs 15 lakh during the financial year will continue to remain NRIs if the stay does not exceed 181 days, as was the case earlier.

As such, besides monitoring the number of days present in India, the visiting Indian is also required to keep tab of his Indian taxable income. This is because once income taxable in India or taxable Indian income exceeds Rs 15 lakh, then provisions related to stay exceeding 120 days, as mentioned above will be applicable.


It may be noted that dividends distributed by Indian companies would be taxable in the hands of the shareholders and as such, would form part of the taxable income. On the other hand, since interest on FCNR and NRE deposits are exempt it will not form a part of taxable income. This amendment is effective from the FY year 2020-21, viz. April 1, 2020 to March 31, 2021.

An NRI, whose taxable income exceeds Rs 15 lakh stays in India for 120 days or more, then such an individual further needs to check whether his stay in India is 365 days or more in the immediately preceding 4 years. Let us assume a non-resident visits India in FY 2020-21 (having taxable income in the financial year exceeding Rs 15 lakh) and stays for say 130 days. Further, during the preceding 4 financial years (i.e., FY2019-20, 2018-19, 2017-18, 2016-17) he was in India for a total of 365 days.

In such a case, he will be treated as a resident individual for income tax purposes. While this may ring alarm bells for many NRIs, but in relief they will be treated as "Resident but Not Ordinarily Resident (RNOR)". This would be a relief as their foreign income (i.e., income accrued outside India) shall not be taxable in India.

RNOR Criteria liberalised

Till and in FY 2019-20, an individual was treated as 'Resident but Not Ordinarily Resident' (RNOR) if any of the following conditions are satisfied:
(a) an individual who has been a non-resident in India in 9 out of 10 previous financial years preceding that year, or
(b) has during the 7 previous years preceding that year been in India for a period of, or periods amounting in all to, 729 days or less.

The above 2 additional conditions have been retained as per the current law. Further, we have noted above that due to the amendment made, an individual whose taxable income exceeds Rs 15 lakh and stays in India for 120 days or more (but less than 182 days) and is treated as a resident individual will still be treated as "Resident but Not Ordinarily Resident (RNOR)".

In the case of RNOR individuals, the foreign income (i.e., income accrued outside India) shall not be taxable in India.
Foreign sources mean income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).

  • Indian Citizens and Global Non-Resident -Deemed Residential Status Relaxed based on Indian income criteria & RNOR Widened


As proposed in Budget 2020, an individual being a citizen of India shall be deemed to be a resident in India in any previous financial year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature. However, this provision will be applicable only if his total taxable Indian income during the financial year is more than Rs 15 lakh as per the amended Finance Bill.

Till FY 2019-20, there was no such provision in the Income-tax Act. This provision of determining residential status for a stateless individual shall not be applicable for OCI (Overseas Citizen of India) cardholders or foreign citizens

A separate clarification was previously issued, which provided that this provision shall not be applicable to "bonafide workers" working outside India. It was clarified vide a CBDT press release, dated February 2, 2020, that in case of an Indian citizen who becomes a deemed resident of India under this proposed provision, income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession.

This has also been clarified by way of an amendment in section 6, wherein Income from foreign sources has been specifically defined and the criteria for RNOR have been widened to include such persons who are deemed to be resident in India due to the above provision. Hence, foreign income is not taxed in such cases and the reporting of foreign assets by such Indian citizens, who are considered to RNOR, shall not be applicable.


In case of NRIs who are residing in UAE, Saudi and certain countries (which do not levy personal income tax) and have taxable Indian income of more than Rs. 15 lakhs, a question arises whether they can be treated as "liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature"

In the context of the Double Tax Avoidance Agreement with the UAE, the Indian judicial and advance ruling authorities have taken a view that " liable to tax" need not be equated with "payment of tax". As per Indian UAE Tax Treaty and the Protocol, a person who stays in UAE for more than 182 days in a year is eligible to get a " tax residency certificate" and is treated as a tax resident. In view of the above and the clarification issued above, such persons would not get covered by the above-deemed resident.

All the above amendments would be effective from the financial year beginning April 1, 2020


1ROR - Resident and Ordinarily Resident,
RNOR - Resident and Not Ordinarily Resident and
NR - Non-Resident

Way forward

NRIs need to carefully consider the total Indian income and plan their travel itinerary based on the amendment for their period of stay. The positive aspect is that in most cases, NRIs can continue to visit India for up to 181 days in the financial year and even in other cases where the period of stay in India is 120 days (and also for 365 days or more in preceding 4 years) or more or in case of Indian citizens who are not tax residents of any other country and are deemed to be tax residents of India, the status would be RNOR and hence foreign income shall not be taxable in India.


ITR Form

Generally,a NRI has to file ITR-2 but till the date of writing this article (16-05-2020) for FY 2019-2020 (AY 2020-2021), the government has notified ITR-1 and ITR 4 only.











NCLAT : In NUI Pulp and Paper Industries Pvt. Ltd. vs. M/s. Roxcel Trading GMBH

August 25, 2019

The Tribunal viz. NCLT has inherent powers to make such order as it may deemed necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.
Rule 11 of the National Company Law Tribunal Rules, 2016 deals with ‘inherent powers’ of the National Company Law Tribunal and reads as follows:
“11. Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.”
From the aforesaid Rule 11, it is clear that the Tribunal viz. NCLT can make any such order as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.
It is clear that once an application under Sections 7 or 9 is filed by the Adjudicating Authority, it is not necessary for the Adjudicating Authority to await hearing of the parties for passing order of ‘Moratorium’ under Section 14 of the ‘I&B Code’. To ensure that one or other party may not abuse the process of the Tribunal or for meeting the ends of justice, it is always open to the Tribunal to pass appropriate interim order.
(Link : https://nclat.nic.in/Useradmin/upload/14411968585d3065a868ff2.pdf)
 .com.

New GST Return Types - Sahaj & Sugam

June 27, 2019
Sugam Return

The Government is set to unveil new GST return types called Sahaj & Sugam from later this year - which will tremendously simplify GST compliance for small businesses. I have provided a short summary of the same below in this email - I hope you find it useful. 

TDS return is due on 31st May for all persons required to deduct tax at source. In case you need help with Form 16 generation or TDS filing, please contact us at the earliest.

Also, GST Annual Return is due next month. In case you require support with filing GST Annual Return, please contact us. We would be happy to help you prepare and file the return for your business.



GST SAHAJ & SUGAM Return

In the 27th GST Council Meeting, the Government announced a simpler GST return filing regime for small taxpayers. Under the new regime, persons having GST registration and a turnover of less than Rs.5 crores would be provided with an option to file quarterly GST return instead of monthly GST return. The Government has recently unveiled the new return type – Regular, SAHAJ, and SUGAM which a taxpayer can file every quarter or every month.

Sahaj Return
  • B2C supply only
  • Nil rated, exempted or Non-GST supply allowed
  • Supply NOT ALLOWED through eCommerce operator
  • Cannot take ITC on missing invoices

    Quarterly or Monthly Filing

    Note: Eligible for filing a quarterly return if newly registered for GST or aggregate annual turnover was less than Rs.5 crores in the previous financial year
    Sugam Return
    • B2B or B2C supply only
    • Nil rated, exempted or Non-GST supply allowed
    • Supply NOT ALLOWED through an eCommerce operator
    • Cannot take ITC on missing invoices

      Quarterly or Monthly Filing

      Note: Eligible for filing a quarterly return if newly registered for GST or aggregate annual turnover was less than Rs.5 crores in the previous financial year
      Regular Return
      • Any type of supply
      • Supply allowed through an eCommerce operator
      • Can take ITC on missing invoices

        Quarterly or Monthly Filing

        Note: Eligible for filing a quarterly return if newly registered for GST or aggregate annual turnover was less than Rs.5 crores in the previous financial year

        Who can file GST SAHAJ return?
        GST SAHAJ return can be filed by a person registered under GST having an annual turnover of less than Rs.5 crores. In case of new business, they will also be allowed to file GST SAHAJ return – as their turnover in the previous would be considered NIL.

        In addition to the above condition, taxpayers opting to file quarterly return ‘Sahaj’ would be allowed to declare only supply under B2C category (For example: Restaurant or Kirana Store) and inward supplies attracting reverse charge only. The taxpayer would also not be allowed to make supplies through e-commerce operators or take an input tax credit on missing invoices.

        Hence, SAHAJ form can be used by taxpayers who supply only to B2C customers and/or have nil rated, exempted or non-GST supplies which need not be declared in a SAHAJ return.

        Filing GST SAHAJ Return
        To start filing GST SAHAJ return, the taxpayer must first opt for the return type on the GST Portal. Normally, all taxpayers would be required to file monthly return – unless they explicitly opt for filing Quarterly GST Return like SAHAJ.

        Once opted for a return type, a change in periodicity of the return filing (from quarterly to monthly and vice versa) would be allowed only once at the time of filing the first return by a taxpayer. Once the monthly or quarterly return type is selected, the periodicity of filing return will remain unchanged over the next financial year unless changed before filing the first return of that year.

        Switching from SAHAJ Return
        Any taxpayer filing Quarterly GST Return can switch over to filing GST SAHAJ or GST SUGAM return.

        Any taxpayer filing GST SUGAM Return can switch over to SAHAJ Return only once in a financial year at the beginning of a quarter.

        Any taxpayer filing GST SUGAM Return can switch over to GST Quarterly Return at the beginning of any quarter without any restrictions (Max: 4 Quarters in a Year).

        Any taxpayer filing SAHAJ return can switch to SUGAM or Quarterly GST Return at the beginning of any quarter without any restrictions (Max: 4 Quarters in a Year).

        In case you want to know more about claiming input tax credit or uploading invoices or see a sample GST Sahaj Return, please click here. To know more about SUGAM return, please click here.

        Business

        Punjab State Professional Development Tax 2018

        March 24, 2019


        Punjab State Professional Development Tax 2018

        1. Registration started on portal PSDT official website

        2. Every Employer having employees with Net taxable income above 2.5 Lakh liable to deduct n deposit the tax on behalf of employees.

        3. Every Businessman or Professional having own Net taxable income above 2.50 Lacs liable to deposit tax.

        4. Tax is 200 per month w.e.f April 2018. However since Act became applicable from 19th April, So the tax is only Rs. 80 for the month of April 2018 and 200 Per month thereafter.

        5. No tax for senior citizens or person having income only under heads other sources, capital gains, house property or Agriculture.

        6.  Tax for any particular financial year shall be payable under this Act only by those persons whose taxable income for the same financial year, before allowing deduction on account of tax levied under this Act, exceeds the maximum amount which is not chargeable to Income Tax by the amount of tax payable by him under this Act for that year.

        7. Tax payable under this Act by any person earning a salary or wage, shall be deducted by his employer from the salary or wages payable to such person, before such salary or wages is paid to him, and such employer shall, irrespective of whether such deduction has been made or not, when the salary or wage is paid to such a person, be liable to pay tax on behalf of all such persons.

        8. Where any person earning a salary or wage is simultaneously engaged in the employment of
        more than one employer and such person furnishes to his employer or employers a declaration Form PSDT- 5 to the effect that he has obtained a certificate of enrolment under this act and that he shall
        pay the tax himself, no deduction or payment of tax shall be made by the employer or employers under this section and such employer or employers, as the case may be, shall not be liable to pay the tax on behalf of such person. OR Employee may choose any one employer for the purpose of payment of tax under the Act and furnish this information to other employers and the designated officer in Form PSDT-5.

        9. Every return shall be accompanied by a proof of payment of the full amount of tax due according to the return. A return without such proof of payment shall not be deemed to have been duly filed.

        10. An application for registration to be made in form PSDT 1 by Employers and PSDT 2 by Businessman or Professionals

        11. Where an employer or person has more than one place of work within the State of Punjab, he shall make a single application in respect of all such places, declaring therein one of such places as the principal place of work and others as additional places of work.

        12. Temporary registration number are getting issued immediately electronically after filing a complete application

        13. Permanent registration number Form PSDT-3 is a certificate of registration for Employers AND Certificate of enrolment Form PSDT-4 is for Businessman or Professionals. Penalty for failure to register can be imposed at Rs. 50/- per day.

        14. Every employer registered under the Act shall furnish an annual return in Form PSDT-6
        for the financial year on or before the thirtieth day of April of the following financial year. Every
        enrolled person Businessman or Professional
        shall furnish an annual return in Form PSDT-7 to the designated officer. The penalty for failure to file returns can be imposed at Rs. 50/- per day.

        15. Every employer responsible for deduction of the due amount of tax from the salary
        or wages of the employees shall deduct every quarter from the salaries or wages payable to the employees.

        16. Every employer responsible to deduct and pay tax shall maintain a register in which the amount of salary and wages paid to each of the employees in his employment and the amount deducted from the salary and wages of the employee on account of tax, shall be entered.

        17. Every payment of tax shall be made by challan in Form PSDT-8 under the head 028-Other Taxes on Income and Expenditure B-Taxes on Professions, Trade, Callings, and Employments. The challan shall be in quadruplicate. Late deduction, Late Payment will attract simple interest @2% for every month or part of the month.

        18.  If the holder of the certificate of registration or enrolment, as the case may be, in one area, shifts his place of work to another area, he shall within fifteen days of such shifting, give notice thereof to
        the designated officer by whom the certificate was issued and shall, at the same time, send a copy of such notice to the designated officer exercising jurisdiction over the area to which the place of work is being or has been shifted.

        19. The employer or the person holding a certificate of registration or enrolment, as the case may be, shall display conspicuously at his place of work, the certificate of registration or enrolment,
        as the case may be, or a copy thereof.

        20. In the event of cessation of liability to pay tax because of the closure of business or for any
        other reason, the employer or the person holding the certificate of registration or enrolment, as the case may be, shall send an intimation in writing to that effect to the designated officer within thirty days of the cessation of liability to pay tax.
        CA

        income tax dept. Don'ts for Cash Transactions

        March 04, 2019

        General Public often find themselves in perplexity while dealing with a cash transaction that they are doing it right or not. There are significant changes in recent times regarding Income Tax guidelines and norms for Cash Transactions which we have tried to present in a summarised form to make it easy to understand for a layman.

        Don'ts

        1) Don't accept cash in excess of Rs. 2 lakh rupees from a single person or relating to a single transaction or a single event or occasion during a year.

        2) Receive or Pay more than Rs. 20,000 in cash in traction relating to immovable property.

        3) Pay in excess of Rs.10,000 in relating to any expense, except to proviso to section 40A(3), in a single day to a single entity.

        4) Donation in excess of Rs. 2,000 in cash.

        5)  Accepting/Taking loans/Deposits in excess of Rs. 20,000 in cash (except from Government, Govt. Co., Banking Co., companies or bodies as notified in notified by Central Government in its official gazette.)

        Contravention to these may attract heavy penalties, litigation under the various acts and even imprisonment. So it is always good to be safe than sorry. As they say, prevention is better than cure, so make sure to consult your advisor before making any such transaction and make sure to be on the right side of the law.

        The author is a tax and finance consultant working with a global consultancy firm working with various MNC's and startups by providing them virtual CFO facility, Acquiring various registrations and licences, also providing taxation and financial advisory at various hierarchies.

        For taking any help or for providing suggestions, feedbacks, I can be reached on my email "cakrishnabansal@gmail.com.
        information

        Religion - An Aide or Absconder of Life

        March 02, 2019

        Some very dear friends feel that Religion should be abolished -- indeed, made a crime towards reason and humanity. I don't have much use for religion in my life. But still, I often speak as a defender of it.

        Consider this. A 'Country' is as nebulous and abstract an idea as Religion. Far more people have been killed defending borders and protecting sovereignty, infinitely more blood has been shed over centuries by rulers and politicians. Isn't that the greater evil, then? But we don't hear calls for the abolishment of all government, armies, and establishing the Earth as a common community. We consider patriotism a perfectly legitimate and noble ideal.

        Money. Another abstraction. Allows some people to 'stock' wealth rather than hunt/gather/farm/pick/labor and survive day by day, as humans were meant to. That's what survival of the fittest meant. Money keeps the majority of the planet poor so that a few can store away their right to 'richness'. Monetary greed has led to even more bloodshed than patriotism. But we're not trying to abolish money; in fact, we encourage our children to work towards wealth and success.
        All of these concepts, these abstractions, go against Reason.

        But Faith, like patriotism and success and achievement, gives people a sense of self. Not everyone is fortunate enough to live thinking, contented lives. Religion is sometimes their very identity and makes a very tough life livable and depend on a holy spirit to keep their faith in life. Don't be in a hurry to take it away from them because some people debase it or use it in twisted, inhuman ways. Make no mistake, those people would have found other devices to kill and control.

        Take away religion and you'll be left with a planet full of very empty, very frightened and very lost people. Lost, frightened people will always be controlled by some force or the other. It might as well be God (or gods), who the vast majority agree wants them to live good lives rather than bad, be moral rather than immoral, and care for each other rather than hate.

        Sweet Shop Cum Restaurant as Composite Supply in GST

        December 15, 2018


        Sweet Shop Cum Restaurant

        In the case of Sweet Shop cum restaurant, the services from the restaurant is a principle supply which provides a bundled supply of preparation & sale of food and serving the same and therefore it constitutes a composite supply. In the instant case, the nature of restaurant services is such that it may be treated as the main supply and the other supplies Combined with such main supply are in the nature of incidental or services. Thus restaurant services get the character of predominant supply over other supplies. Therefore in the present case the supply shall be treated as a supply of service and the sweet shop shall be an extension of the restaurant. Thus the supply of pure food, namkeen, cold drink and other edible items from a sweet Shop which also runs a restaurant is a transaction of supply of service.
        This will fall under the HSN 9963 and a Rate Of 5% Shall be Applicable without any Input Credit.

        -Krishna Bansal
        IncomeTax

        Funniest Tax Facts

        July 05, 2018


        1) An extremely important artifact, the Rosetta Stone, was the main key to the ultimate deciphering of ancient Egyptian hieroglyphics... and the writing found in it is mostly about taxes.

        2) The Roman emperor taxed urine in the 1st century. It was used to launder garments as well as collected for the ammonia.

        3) The country of Romania was trying to get itself out of a major recession in 2011, so they decided to add a new profession to the country’s labor code which would make it subject to taxation. The new profession added was Witchcraft.

        4) This is a story about the stripper who ended up in tax court after attempting to deduct her boob job as a medical deduction. Her name was Cynthia Hess (otherwise known as Chesty Love). 

        The IRS originally disallowed the deduction because cosmetic surgery that isn’t being done to correct a disfigurement or for some other life-saving purpose is not deductible. 

        However, the higher court ended up allowing the expense instead as a legitimate ordinary and necessary business expense.

        5) There are many European nations that have a tax on cow flatulence. It’s really important to them because methane gas is one of the main greenhouse gases that causes climate change. For real.. cow flatulence!

        6. The Russian Emperor Peter the Great taxed beards because he wanted men to be clean shaven.

        Commerce

        KYC of All Directors

        June 30, 2018

        KYC of all Directors to be done again by MCA As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to be notified and deployed shortly.

        Accordingly, every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31st August, 2018. 

        While filing the form,the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password(OTP). The form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA).

        Filing of DIR-3 KYC would be mandatory for Disqualified Directors also. After expiry of the due date by which the KYC form is to be filed,the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’. After the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.

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        Welcome to Finance Facts.

        Hi, I'm Krishna - Chartered Accountant (CA), a certified NCMP. Presently associated with Airbnb and earlier with a MNC Advisory firm and Tax consultant-EMEA -APAC Region to General Electric (Fortune 14).

        I have a demonstrated experience with several MNCs, IT, Manufacturing industries & startups. I am an enthusiast entrepreneur, Tax & wealth consultant, blogger and a financial analyst.

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