TAX AWARENESS PROGRAM “MAKING MARCH MEANINGFUL”
VIA Taxation & Corporate Law Forum organized “Making March Meaningful” for creating awareness for better tax compliances. Expert speakers of the program Adv Kapil Hirani for Income Tax, CA Mahendra Jain, Past Chairman of Sales Tax Bar Association, Nagpur on Indirect Taxes (GST & VAT) & CA Omprakash Bagdia, Past Chairman ofNagpur Branch of WIRC of ICAI, Nagpur on Company laws.
CA Omprakash Bagdia, Past Chairman of Nagpur Branch of WIRC of ICAI, Nagpur on Company laws said we should understand legislature in lay language. He said earlier private limited companies were given relaxation from compliance of many company law provisions but with introduction of Company Act 2013 the relaxations to private limited companies are diluted and new restrictions and compliances are imposed.
Under company law companies cannot avoid filing of requisite form; if any compliance is pending it has to be filed with late fees and penalty. Business commencement certificate also required for private limited and the commencement certificate will issued only after subscribed shares are allotted and money is deposited in Bank Account.
Another restriction for all companies is that Loan to Directors should be avoided as it will attract heavy penalty. He further stated that interest free loan should not be given to directors or related parties or even if interest is charged compliances to be done. Companies cannot take loan from outside or 3rd party. The directors, share holders or relative of shareholder cannot give loan to company out of borrowed money. For precaution, company should take a declaration from lender that loan is given out of capital and not out of borrowed fund.
CA Bagdia explained the new provisions of Company Laws, where the law is more of compliance than governance. He further deliberated that precaution should be that outstanding payment to SME’s over 45 days should be avoided, as it will give them chance to file petition at NCLT. He informed that a compulsory half yearly return to be filed by all companies declaring the outstanding over 45 days due from MSME/ SME. He informed that where a company wants to increase its paid up capital, the issuing company should seek share valuation report and new shares cannot be issued at price below the valuation price. He also explained all the new forms recently brought by Company Law. He finally opined that the increased compliances in all the regulatory laws are diluting the government’s motto of Ease of doing Business.
Adv Kapil Hirani, an expert in Income Tax started with basic compliance to be done by everyone. He said 15th March is the due date for 4th installment of advance tax, it should be paid in time. He added that if an assessee is claiming refund every year due to TDS, then assessee should prefer an application to ITD and asks for lower TDS certificate; this will help in avoiding fund blocking. He further said that a tentative Balance Sheet should be prepared in any case upto February 28, this will bring into light many small issues which might be over looked previously and it will be more appropriate to get opinion of professional so that if required corrective measures can be taken within time.
Adv Kapil also said that entire expenses pertaining to this financial year should be accountant for in current year only, else if it is found during assessments that any expenses related to previous financial year are claimed in assessment year the expenses will treated as prior period expenses and will be disallowed.
He cautioned that if any amount is payable to MSE which are under dispute for any reason a mail regarding to such dispute should be sent to payee stating the reason for dispute and denial of payment, this will help to avoid filling Insolvency application at NCLT against payer. With regards to TDS he said that correct TDS deduction and timely payment not only saves you from disallowance, interest and penalty it saves you more particularly from prosecution.
He further added on TDS issue that interest payable on loans from NBFCs interest paid to these companies are subject to TDS. Deductor should get in touch with NBFCs and ask for interest amount, deduct TDS, pay TDS, issue certificate of deduction and ask NBFC’s to adjust TDS amount against the outstanding loan. Adv Hirani emphasized that take utmost care of accounting and taxation, so that a Clear balance is prepared.
On agriculture income he said that appropriate documents relating to agriculture income should be kept. One should not sale capital asset in March instead sale it in April, this will give an advantage of indexation and extra time will be available for capital gain deduction. He cautioned before execution sale deed one should compare if there is any negative difference in stamp duty valuation and sale deed value and where that answer is yes then take valuation report from CBDT approved valuer before sale deed so that a valid document is available to support your transaction at the time of assessment.
He also covered issue like full advantage of tax saving schemes should be taken, Loan to Director can be treated as deemed dividend, Refrain transactions which are overriding law, avoid interest free loan lending when they are from borrowed fund, take print of 26AS before 31st March and reconcile it, GST returns liabilities should reconciled and check for RCM liability, Household expenses provision should be properly done – supporting your lifestyle, etc.
Former Chairman of Sales Tax Bar Association, Nagpur on Indirect Taxes (GST & VAT)CA Mahendra Jain, has deliberated his talk on indirect taxes covering GST and Professional Tax. He stated that under GST regime accounting is not remained to be yearend aspect, accounting now is to be done daily and continuous basis. This is very useful for all businessmen. He said that before initiating inward supplies check the status of suppliers if the seller is active or not. He also said that check that all the mandatory fields of Tax Invoices are completely filed.
He further added that GSTR 2A data to be matched to have clear picture of ITC claimed, if there are any mismatch then ask the supplier to amend his return wherever required to give correct ITC. Under GST law it is not only March, it is every month where compliances are to be done. Payment for input supplies should be done within 180 days, otherwise ITC will be denied and also interest liability will arise.
For VAT dealers who have taken voluntary registration by depositing Rs.25,000/-, refund application of Rs 25,000/- deposit can be filed upto 31/03/2019, else that claim will lapse. With regard to reverse charge should be looked into every return and if any ITC remained unclaimed RCM should be claimed in March closing return.
VIA EC Co-opted Member,CA Naresh Jakhotia, in his opening remark said we had conducted this program more than 10th consecutive year and which gives good take always to the attendees.
Earlier, Chairman of Taxation & Corporate Law Forum, CA Ashok Chandak, welcomed Adv Kapil Hirani; CA Sarda welcomed CA Mahendra Jain and Jawanjar welcomed CA Omprakash Bagdia with floral bouquets. CA Ashok Chandak, in his welcome address, he said uniform accounting year on 31st March.
Before closing books of accounts all the relevant laws are to be looked into, like taxation or corporate law. All the participants will arrive what are the compliances to be made to avoid penalty in all laws. Accountants, CAs are very important, however, nobody approaches consultants before closing of books of accounts. It is always said half knowledge is always dangerous, it is better to consult your consultant.
This program will give you basic ideas what is to be done are not to be done. Mostly assesses suffer most due to making small mistakes, thus better to avoid small mistakes, he said.
CA Sachin Jajodia, Convener – VIA Taxation & Corporate Law Forum proposed a formal vote of Thanks.