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Thursday,01-October-2020

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Goa CM Vijai Sardesai asks Election Commission to relax alcohol sale deadline

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 In a letter to the Election Commission (EC), Goa’s Deputy Chief Minister Vijai Sardesai on Friday sought a relaxation in the 11 p.m. deadline for the sale of alcohol in Goa’s bars and clubs, saying the measure would have an adverse impact on the state’s tourism-driven economy.

Sardesai also urged the EC to relax noise pollution norms to facilitate unhindered observance of religious activities during Lent and Easter vigil services observed by Catholic Christians, who account for more than a quarter of the state’s population.

“Imposing such restrictions on an industry, which is already badly hit and which is the mainstay of the state economy, will cause irreparable damage to the economy as a whole,” Sardesai said in his letter, seeking extension of the 11 p.m. deadline for serving alcohol in establishments which are licenced to operate till the early morning hours.

“These apprehensions of the people of Goa have already been discussed with the Chief Electoral Officer (CEO), Goa and as such we seek your intervention in the matter so as to give relief to the stakeholders of the industry,” he added.

Seeking relaxation of the 10 p.m. deadline for playing loud music during festivals, Sardesai said Catholics must be allowed to observe vigil services without being stopped by flying squads under the CEO.

Lent is the 40-day period beginning Ash Wednesday and ending Easter Sunday (April 21), during which Catholics observe fast, repentance and moderation for spiritual renewal.

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Deadline for filing IT returns for AY 2019-20 now November 30

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Income-Tax

In a major relief for taxpayers, the Centre on Wednesday announced extension of the due date for filing income tax returns for assessment year 2019-20 by a couple of months to November 30, 2020.

The decision has come in the wake of many taxpayers facing difficulty in filing their income tax returns due to the outbreak of Covid-19 pandemic.

The last date for filing returns for AY 2019-20 was extended earlier till September 30, the third such extension during the pandemic. It has been further extended till November to provide more time to taxpayers.

“On further consideration of genuine difficulties being faced by taxpayers due to the Covid-19 situation, CBDT further extends the due date for furnishing of belated & revised ITRs for Assessment Year 2019-20 from 30th September, 2020 to 30th November, 2020,” the Income Tax Department said in a tweet.

The government has already extended the date for filing income tax returns for AY 2020-21 to November 30.

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Offered Rs 14K cr to banks as settlement: Vijay Mallya’s UB tells SC

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Fugitive liquor baron Vijay Mallya’s United Breweries (Holding) Ltd on Wednesday told the Supreme Court that it had offered over Rs 14,000 crore to various banks to settle its dues and that the company’s assets exceeded its total debt.

Senior advocate C.S. Vaidyanathan, appearing for United Breweries, submitted before a bench comprising Justices U.U. Lalit, Vineet Saran and S. Ravindra Bhat that the response of the banks had been received.

He contended that since the company’s assets exceeded the total debt, it was not the case wherein the company should be directed to wind up.

He insisted that the Enforcement Directorate (ED) had attached many assets of the company, as a result of which none was available to the banks.

“The total amount offered is over Rs 14,000 crore whereas the total due amount is Rs 6,203 crore plus interest. But the allocation has been only Rs 430 crore,” Vaidyanathan contended.

He added that not a single attached property had been actually attached by the ED since 2009.

Vaidyanathan said that the petitioner was the guarantor though the loans were taken by Kingfisher and others.

The submissions were made during hearing of United Breweries’ plea to challenge the Karnataka High Court order to uphold the winding-up of the company.

The counsel submitted that not a single asset had been acquired since 2009 when bank loans were allegedly siphoned off overseas. In response, Justice Lalit queried: “Has the attachment order been challenged?”

The counsel said that an appeal was filed in the Prevention of Money Laundering Act Tribunal, adding that they were told that the attachment order was for satisfying debts and the bulk of assets were in the form of shares.

He argued that the PMLA probe revealed that a major part of the total money sanctioned by the IDBI Bank was remitted outside India, and used for payments for aircraft and spare parts.

The investigation concluded that IDBI loans were not backed by marketable commodities, while orders for provisional attachment were passed on the ground of involvement in money-laundering, Vaidyanathan said.

Senior Advocate Mukul Rohatgi, representing the State Bank of India, submitted that the appeal was devoid of merits.

In the last hearing, the apex court had queried whether a company’s attached assets could be considered for liquidation for the settlement of debt. The bench will hear the matter on Thursday.

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TCS applicable only on amounts received on or after Oct 1: CBDT

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Tax. (IANS Infographics)

The Central Board of Direct Taxes (CBDT) on Wednesday clarified that Tax Collection at Source (TCS) will be applicable only on the amount received on or after October 1, 2020 and a seller would be required to collect TCS only if his turnover exceeds Rs 10 crore in the last financial year.

Moreover, export of goods has been exempted from the applicability of the provisions of TCS.

The Finance Act, 2020 has amended the provisions relating to TCS with effect from October 1 to provide that seller of goods shall collect tax at the rate of 0.1 per cent (0.075 per cent up to March 31, 2021) if the receipt of sale consideration from a buyer exceeds Rs 50 lakh in the financial year.

The CBDT said TCS has been made applicable to the amount received from October 1 onwards and not before it. A CBDT circular issued on Monday has also stated that TCS shall be applicable only on the amount received on or after October 1.

For example, a seller who has received Rs 1 crore before October 1 from a particular buyer and receives Rs 5 lakh on or after the cut-off period would be required to collect tax on Rs 5 lakh only and not on Rs 55 lakh [i.e, Rs 1.05 crore – Rs 50 lakh (threshold)] by including the amount received before October 1.

The provisions relating to TCS were introduced in the Income Tax Act in 1988. Currently, TCS provisions are applicable on various transactions and rate of TCS varies from 1 to 5 per cent. The TCS collected is treated as advance tax payment/TDS for the taxpayers and he is allowed credit against his actual tax liability and excess amount of TCS, if any, is refunded to the taxpayer, along with interest.

The provisions of TCS also empower the CBDT to issue guidelines. Under it, the guidelines issues on September 29, inter alia, exempted certain transactions such as transactions carried through recognised stock exchanges/clearing houses and sale of fuel to non-resident airlines and also clarified method of computation of threshold, applicability of these provisions on motor vehicle sale, adjustment of sales return, discount, etc.

The CBDT has said that TCS applies only in cases where receipt of sale consideration exceeds Rs 50 lakh in a financial year. As the threshold is based on the yearly receipt, it has also been clarified that only for the purpose of calculation of this threshold of Rs 50 lakh, the receipt from the beginning of the financial year, i.e., from April 1, 2020 shall be taken into account.

For example, in the above illustration, the seller has to collect tax on receipt of Rs 5 lakh after October 1, 2020 because the receipts from April 1, 2020, i.e. Rs. 1.05 crore exceeded the specified threshold of Rs 50 lakh.

The CBDT further said that the seller in most of the cases maintains a running account of the buyer in which payments are generally not linked with a particular sale invoice. Therefore, in order to simplify and ease the compliance of the collector, it has been clarified that this TCS provision shall be applicable on the amount of all sale consideration received on or after October 1, without making any adjustment for the amount received in respect of sales made before this date.

Mandating the collector to identify and exclude the amount in respect of sales made up to September 30 from the amount received on or after October 1 would have resulted into undue compliance burden for the collector and also litigation, the CBDT said.

The CBDT said that this TCS shall be applicable only on the receipt exceeding Rs 50 lakh by a seller from a particular buyer. Therefore, on payment of Rs 1 crore made by a buyer to a particular seller, only Rs 5,000 (i.e. 0.1 per cent of Rs 1 crore – Rs 50 lakh shall be collected). However, the seller would be collecting Rs 3,750 only as the tax rate is reduced to 0.075 per cent till March 31, 2021.

Hence, in case of a person making payment of Rs 1 crore each to 10 different sellers, the total tax collected shall be only Rs 50,000 (i.e. Rs 37,500 this year) i.e 10 into [0.1 per cent of (Rs. 1 crore- Rs 50 lakh)] on the total payment made for purchase of Rs 10 crore to 10 different sellers.

The CBDT said that assuming a net profit of 8 per cent on sales, his business income in respect of this payment of Rs 10 crore made for purchase would be around Rs 87 lakh. The income tax liability on the income of Rs 87 lakh for an individual in new taxation regime would be around Rs 27 lakh. Hence, the amount of TCS collected, i.e. Rs 50,000 (Rs 37,500 this year) would be a miniscule part of his actual tax liability and would be easily adjusted against his tax liability. If the tax liability is less than Rs 50,000 (Rs 37,500 this year), the tax payer shall be entitled for a refund of excess TCS with interest.

It is pertinent to note here that currently, all sellers (except individuals and Hindu undivided family) are required to collect TCS without any threshold of turnover. In case of individuals and Hindu undivided family, the requirement of collection of TCS is applicable if their turnover exceeds Rs 1 crore in business or Rs 50 lakh in profession. Similar provisions exist for the applicability of Tax Deduction at Source (TDS).

It may also be mentioned that in order to reduce the compliance burden, these new provisions are made applicable to only those sellers whose business turnover exceeds Rs 10 crore.

The CBDT said that there are only around 3.5 lakh persons who have disclosed business turnover of more than Rs 10 crore in FY 2018-19 whereas active deductors/collectors as on date is more than 18 lakh. Therefore, the collection under these new provisions would be required to be made by very few persons who in most of the cases would already be complying with the existing provisions of TDS/TCS, it said.

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