President’s Message | August 2022

Dear Professional Friends,

I bring you greetings of Dussera festival in this month. May you all enjoy the season of festivity and my wishes for a meaningful Gandhi Jayanthi. It is really a month of celebration for all Indians when we overtake the UK to be the 5th largest economy in terms of GDP. The achievement is worth celebrating, but this accomplishment of US$ 3.5 Trillion would be more joyful when the per capita also raises and all citizens are part of this growth journey. Also, Russia’s recent exclusion from the bond market has paved a wave for India’s global bond market which in turn would ease the capital requirement of the Indian market and entail a cheaper cost of capital as well. The current month is one of the busiest months for practicing Chartered Accountants and for those involved in financial reporting, I wish all of you a happy working.

Association currently has two immovable properties; one is a commercial office at SJP road, Bangalore and the other is a KIADB plot at Harohalli, Bangalore. Both assets are currently unused by the association and we welcome any suggestions to monetize both assets of the association.

Association is planning to conduct an Intense Residential Course on GST. We are planning to conduct this in Mysore and this is for all those who would like to expertise in GST. By allowing to participate in group discussions and case studies, we intend to create an environment of competence by conditioning and curating thinking in areas of GST. Please visit the association website for details about the course details.

The current year theme with the tagline ‘Create and Complement’ was designed with the intent to move creative thinking or what is known as design thinking as a problem-solving attempt to practice at the individual level. Also, the current order of growth is not to compete but to complement each other at the practice level and the association would also work on means to strengthen members to­­ grow together. The six colours used in the theme are inspired by Edward de Bono idea of ‘six Thinking Hats’. It depicts our move from vertical to lateral thinking in decision making and individualist to collaborated effort of the existing team of the Executive committee.

Edward de Bono mentions about lateral thinking, the greatest fear of creative thinking is that we would fall being a victim of failure. Order is easy to follow, creativity starts very chaotic and requires one to stand the eyes of judgement. He mentions “Everyone has the right to doubt everything as often as he pleases and the duty to do it at least once. No way of looking at things is too sacred to be reconsidered. No way of doing things is beyond improvement.” I wish all the members to move to newer areas, assume risk and succeed as well.

News Roundup

Direct Tax

From CBDT:

  • CBDT notifies a list of documents to be submitted by an employee to claim exemption on the sum received for COVID-19 treatment.
  • CBDT notifies books & other documents to be maintained by entities under Section 10(23C)/12A.
  • CBDT amends Rule 17 & Form 10 providing accumulation of income by an entity approved u/s 10(23C).
  • CBDT notifies Form 29D to get the refund of tax deducted under section 195.
  • CBDT confirms that TCS provisions u/s 206C (1G) do not apply to Non-resident buyer who doesn’t have PE in India.
  • CBDT extends the time limit for furnishing of Form 67; Foreign Tax Credit (FTC) can be claimed at time of filing belated & updated ITR.

From Judiciary:

  • HC justified reassessment as assessee didn’t disclose receipt which was appearing in Form 26AS.
  • Sum paid on cancellation of JDA agreement is deductible if same had nexus with assessee’s construction project: HC.
  • Loss suffered by writing off sum advanced is capital loss if assessee isn’t engaged in money lending business: HC.
  • HC slams IT Dept. for frequently violating principles of natural justice; imposes cost of Rs. 50 lakhs.
  • No disallowance of Depreciation, if assessee didn’t deduct tax on the sum paid towards purchase of capital assets: ITAT.
  • Date of receiving SCN & holidays to be excluded while computing 7 days period to give response u/s 148A: HC.
  • HC set-asides assessment order as notices were served in email-ids of erstwhile auditors & not in assessee’s e-mail-id.

Indirect Taxes

August has been an eventful month for the Country and Indirect taxes. The country is celebrating 75 years of independence with buoyant tax collections. The August month tax collections have been 1.43 lakh crores and the average collections under GST have remained a steady 1.4 lakh crores in the last 6 months.

Apart from this, certain noteworthy changes have been made to GST more specifically the disclosure requirements in Form GSTR-3B pertaining to supplies made through e-commerce operators and ITC & its bifurcation.

Apex Court had directed the Government to permit registered persons to file Transitional forms to claim the credits from the previous tax regime for a period of 90 days beginning from 1st September. However, this timeline has now been pushed to 1st October onwards.

1st October is also the date when e-invoicing shall be made mandatory for registered persons with aggregate turnover exceeding 10 crores in any of the financial years beginning 1st July 2017.

We, the chartered accountants must be at the forefront to educate and enable the taxpayers to be prepared and ready to implement these changes in the days to come.

Further, September month being the month of tax audits, I request all my professional brethren to be well versed with the GST-related amendments in the tax audit reports and be prepared to give appropriate and correct disclosures in the returns.

Corporate and Allied Laws

The MCA department introduced the process of physical verification of the registered office of the company during the incorporation process. The new companies incorporated will be subject to Physical verification by the Registrar in the presence of two local witness. Also, the MCA has amended the Company rules to give the authority to the Registrar remove the name of a company from the register if he believes that the company is not conducting any business or operations based on the physical verification carried out in accordance with subsection (9) of section 12. The government has extended the tenure of the Company Law Committee formed in 2019 for examining and making recommendations to the government on various issues related to implementation of the Companies Act and Limited Liability Partnership Act, up to September 2023.

KSCAA shall always be ready to help members get acquainted with these new changes and resolve their queries.

Happy Reading!

Yours’ faithfully,

CA. Pramod Srihari