Accretive Monthly Communique March 2015
Transcription
Accretive Monthly Communique March 2015
MONTHLY COMMUNIQUÉ MARCH 2015 INCOME TAX Quantification of disallowance on default to deduct tax on payments made to non-residents: The Central Board of Direct Taxes (CBDT) vide its instruction no 2/2014 clarified that for disallowance in case of default in deduction of tax at source on payments made to non-residents under section 195, the disallowance shall be restricted to the appropriate income chargeable to tax under the act and Income Tax Central Excise Customs FTP FEMA the same shall be determined by the assessing officer. CBDT has now clarified that where the appropriate income has been determined based on an application to the assessing officer, the same shall form the basis for disallowance. (Circular No. 03-2015 dated 12.02.2015) CENTRAL EXCISE Clarification regarding recovery of arrears in installments and amendment of Garnishee Notice: The CBEC has clarified that the Central Excise officers are empowered to add, amend, vary or rescind a notice issued by them for recovery of arrears of tax due of an assessee from another person (generally known as Garnishee Notice) when the assessee comes forward for payment of arrears, once Garnishee Notice are issued. Further, the CBEC has allowed the recovery of arrears of taxes, interest and penalty in installments. The power to allow payment in monthly installments is discretionary which shall be sanctioned by the Commissioner upto a maximum of 24 monthly installments. It may be extended by another 12 monthly instalments provided the same is sanctioned by the Chief Commissioner. This facility will be granted to companies which show a reasonable cause for payment of arrears in installments such as the company being under temporary financial distress. Frequent defaulters may not be allowed payment of arrears in installments. The decision will be taken on a case to case basis taking into consideration the facts of the case, interest of the revenue and track record of the company its financial situation The procedure to be followed for allowing payments of arrears to be made in instalments is as under: An application should be made by the Company to the jurisdictional Commissioner justifying why the Company is unable to pay the arrears of tax. On satisfaction of the application and reasons given by the Company, the jurisdictional Commissioner should provide the acknowledgement of the approval to make the payment of arrears in instalments. MONTHLY COMMUNIQUÉ MARCH 2015 The sanction / permission shall state the following: • The number of installments; • The month from which the payments of installments shall begin; and • In case of default in payment of installments, the permission shall be withdrawn and action shall be taken for recovery of arrears. (Circular No. 996/3/2015-CX dated 28.2.2015) Clarification regarding ‘Place of Removal’ for CEVNAT Credit of input service: With specific reference to determination of place of removal in case of exports for claim of CENVAT credit of input service, the CBEC has clarified that the place of removal. The place of removal in relation to clearance of goods for exports from the factory of the manufacturer for input service credit could be of two types and the place of removal would be as follows: Clearance of goods for export by manufacturer exporter directly to his foreign buyer – The place of removal would be the Port / ICD / CFS where the shipping bill is filed by the manufacturer exporter and goods are handed over to the shipping line Clearance of goods for export through merchant exporters – The place of removal would be place where the property in the goods passes from the manufacturer to the merchant exporter which is generally, the factory gate of the manufacturer. However, the place of removal cannot be beyond the Port / ICD / CFS where shipping bill is filed by the merchant exporter. (Circular No. 999/6/2015-CX dated 28.2.2015) CUSTOMS Simplification in compliance with Know Your Customer (KYC) norms: In order to address the difficulties in compliance with KYC norms, the CBEC has prescribed 2 documents i.e. one for ‘proof of identity’ and other for ‘proof of address’ for KYC verification. The documents prescribed is provided in Board Circular No 9/2010-Cus dated 08.04.2010 In case of individuals, a single document containing both, 'proof of identity' and 'proof of address would be sufficient if it is one of the documents already prescribed by the Board. Further, ‘Aadhar Card’ is now recognized as a valid document in case of individual. The documents prescribed in the circular mentioned supra are as under: MONTHLY COMMUNIQUÉ MARCH 2015 Form of organisation Individual Documents Prescribed (i) Passport (ii) PAN card (iii) Voter's Identity card (iv) Driving licence (v) Bank account statement (vi) Ration card Company (i) Certificate of incorporation (ii) Memorandum of Association (iii) Articles of Association (iv) Power of Attorney granted to its managers, officers or employees to transact business on its behalf (v) Copy of PAN allotment letter (vi) Copy of telephone bill Partnership firm (i) Registration certificate, if registered (ii) Partnership deed (iii) Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf (iv) Any officially valid document identifying the partners and the person holding the Power of Attorney and their addresses (v) Telephone bill in the name of firm/ partners Trusts, Foundations (i) Certificate of Registration, if registered (ii) Power of Attorney granted to transact business on its behalf (iii) Any officially valid document to identify the trustees, settlers, beneficiaries and those holding the Power of Attorney, founders/ managers/ directors and their addresses (iv) Resolution of the managing body of the foundation/ association (v) Telephone bill (Circular No. 07/2015-Cus dated 12.02.2015) FTP E - IEC Form: The Director General of Foreign Trade has notified a new format for issue of ImportExport Code numbers in electronic form i.e. e-IEC, in respect of applications filed online. The system will generate and send the e-IEC to the applicant or send rejection letter with the grounds for rejection (as the case may be) by e-mail to the registered e-mail address of the applicant. Further, the decision regarding grant or refusal of IEC will be conveyed to the applicant through SMS. In addition, a corrigendum to public notice 79 / (RE-2013)/2009-2014 dated 31.12.2014 has been issued stating that online IEC application fee is Rs.250/- instead of Rs.500/-. (Public Notice No. 84 (RE-2013)/2009-2014 10.02.2015 and Public Notice No.85 (RE-2013)/2009-2014 dated: 13.02.2015) MONTHLY COMMUNIQUÉ MARCH 2015 Deactivation of Multiple IEC against single PAN: As per the provision of Foreign Trade Policy (FTP) and procedure there under every importer / exporter is allowed to have only one Import-Export Code (IEC) against a single PAN. However, it is noticed by the DGFT that multiple IECs have been obtained by some firms/companies from various Regional Authorities against the single PAN. It is now notified that all importers / exporters having multiple IECs against a single PAN have the option of retaining any one IEC and surrender all other IECs to the concerned RAs by 31.03.2015. If the multiple IECs against single PAN is not surrendered before 31.03.2015, the same will be deactivated. (Public Notice No. 87 (RE-2013)/2009-2014 dated: 17.02.2015) FEMA Foreign direct investment (FDI) in manufacturing of medical devices: The Reserve Bank of India (‘RBI’), taking cognizance of the amendment to the FDI Policy of the Government of India, has provided that FDI in manufacturing of medical devices would be permitted 100% under the automatic route. Hitherto, FDI in the said sector was accorded the same treatment as FDI in the pharmaceutical sector where FDI was permitted 100% under the automatic route in case of greenfield investments and under the Government approval route in case of brownfield investments. (A.P. (DIR Series) Circular No.70 dated 02.02.2015) Lock-in-period for investments by Foreign Portfolio investors (FPI): Hitherto, investments only in government securities and debt market in India by FPI required a minimum lock-in period of 3 years. The RBI has now mandated that future investments in corporate bonds would also have a minimum lock-in period of 3 years. It has also been provided that FPIs would now not allowed to make any further investment in liquid, money market mutual fund schemes and commercial papers/debt instruments (including those with optionality clause exercisable within 3 years). The RBI has also provided that FPIs would be permitted to invest coupons received on their existing investments in government securities; and such investments would be kept outside the purview of the current USD 30 billion limit for investments in government securities. (A.P. (DIR Series) Circular No.71 dated 03.02.2015, A.P. (DIR Series), Circular No.72 dated 05.02.2015&A.P. (DIR Series) Circular No.73 dated 06.02.2015) Online submission of returns – Foreign Direct Investment: RBI to promote the simplicity in reporting of transactions under foreign direct investment, has enabled online filing of the following returns with the Reserve Bank of India. MONTHLY COMMUNIQUÉ MARCH 2015 Advance Remittance Form (ARF) - used by the companies to report the foreign direct investment (FDI) inflow to RBI; and FCGPR Form - which a company submits to RBI for reporting the issue of eligible instruments to the overseas investor against the above mentioned FDI inflow. The e-Biz portal requires the customer to login, download the form, update and upload the same using a digital signature certificate. The AD is required to download and verify the contents and upload the same for RBI to process and issue unique identification number (UIN).The manual system of reporting will however continue till further notice. (A.P. (DIR Series) Circular No.77 dated 12.02.2015) Liberalization of procedures for payments against imports: Hitherto, application towards payments for imports into India by persons, firms and companies exceeding USD 5000 or its equivalent is to be made in Form A-1 to the AD Category –I Banks. The RBI in order to simplify and liberalize the procedure has decided to dispense off with the form; however, AD Category –I Banks shall obtain all the requisite details from the importer and satisfy itself about the bonafide of the transactions before effecting the remittance. (A.P. (DIR Series) Circular No.76 dated 12.02.2015) ACCRETIVE SDU CONSULTING PRIVATE LIMITED +91 (80) 2226 1371 | www.accretiveglobal.com | [email protected] Document date: 24.03.2015 The views expressed and the information provided in this newsletter are of general nature and are not intended to address the circumstances of any particular individual or entity. Further, the above content should neither be regarded as comprehensive nor sufficient for making decisions. Although we endeavor to provide accurate and timely information, there is no assurance or guarantee in this regard. No one should act on the information or views provided in this publication without appropriate professional advice. Accretive will not be responsible for any loss arising from any actions taken or to be taken or not taken by anyone based on this publication. This is meant for private circulation only.