In this article, we will discuss the major updates from the Finance and Tax Industry between 29th November 2020 and 5th December 2020.
A. Income Tax Updates
CBDT has issued refunds of over Rs. 1,40,210 crores to more than 59.68 lakh taxpayers till 1st December 2020. The break-up of such refund is given below:
Income Tax Refunds – Rs. 38,105 crores to 57,68,926 taxpayers
Corporate Tax Refunds – Rs. 1,02,105 crores to 1,99,165 taxpayers
2. CBDT issues clarifications on the provisions of the Direct Tax Vivad se Vishwas Act 2020
CBDT has also issued a clarification on the provisions of the Direct Tax Vivad se Vishwas Act 2020 and has released a 2nd set of FAQs for the taxpayers. To read all the FAQs released, click here
3. The Mumbai branch of Income Tax will resume physical hearings on an experimental basis, in the Income Tax Appellate Tribunal, Mumbai Benches w.e.f 7th December 2020. To read the official announcement click here.
5. Income Tax Department conducts searches in Tamil Nadu
The Income Tax Department conducted searches on 27/11/2020 in the case of an IT SEZ developer, its ex-Director, and a prominent stainless-steel supplier in Chennai. The search operation was carried out at 16 premises located in Chennai, Mumbai, Hyderabad, and Cuddalore.
The evidence unearthed includes unaccounted assets worth about Rs. 100 crores accumulated by the ex-Director and his family members in the past 3 years. The search further unearthed that the IT SEZ developer claimed bogus work-in-progress expenses of about Rs. 160 crores in an under-construction project. The entity had also claimed capital expenses of around Rs. 30 crores on account of bogus consultancy fees in an operational project and inadmissible interest expenses to the extent of Rs. 20 crores were also claimed by the entity.
The searches, so far, have resulted in the detection of undisclosed income of more than Rs. 450 crores.
B. Indirect Tax Updates
1. Chhattisgarh and Jharkhand have become the last states to go for Option 1 to meet the GST Implementation Shortfall
Now, all states have opted for Option 1 to meet the GST Implementation Shortfall.
1.1. Jharkhand will get Rs. 1,689 crore through special borrowing window to meet the GST implementation shortfall
1.2. Chhattisgarh will get Rs.3,109 crores through a special borrowing window to meet the GST implementation shortfall
- To read the breakup of borrowing amount given to Chhattisgarh: Click here
- To read the breakup of borrowing amount given to Jharkhand: Click here
Background: In the 42nd GST Council Meet, all states were given two options to meet the GST Implementation Shortfall. However, every state except Jharkhand has opted for Option 1. To know more about both the options given click here
2. CBIC issues clarification over Invoice Furnishing Facility with relation to the QRMP Scheme
CBIC says – “ IFF is an optional facility to be used depending on the needs of the suppliers and their buyers. Taxpayers may file their GSTR-1 for the quarter without filing IFF.”
3. CBIC releases New Exchange Rate for different countries w.e.f. 4th December 2020
With effect from 4th December 2020, the Central Board of Indirect Taxes has released New Exchange Rates for different countries, both for import of goods and export of goods. To know more about, the rate for each country click here
On 3rd December 2020, the Ambassador of the Belgium Embassy Mr. Francois Delhaye called the Central Board of Indirect Taxes, much to their surprise, and interacted with Shri Ajit Kumar, Chairman, and Shri Sandeep M. Bhatnagar, Member of CBIC. Both sides discussed ways to have deeper engagements in areas of drug law enforcement, capacity building, automation, and the use of Artificial Intelligence.
5. GST collection crosses Rs. 1 Lakh Crore mark for 2 months in a row
The Gross GST Revenue collected for the month of November is Rs. 1,04,963, making it the second month in a row to cross the Rs. 1 lakh crore mark. To read the entire breakup of the GST Revenue Collected for the month of November, Click Here
6. CBIC issues classes of supply who have to maintain eight-digit HSN Code
In the 42nd GST Council Meet, the GST Council had specified different HSN Code digits for different categories of businesses. However, the list of businesses who have to maintain an 8-digit HSN Code has released this week. Check the entire list here.
7. GST Portal issues an update on the auto-population of the e-invoice details into GSTR-1
The GST Portal, this week, issued an update on the auto-population of the e-invoice details. The update covered that such taxpayers who had reported e-invoices, should not wait for auto-populated data and are advised to proceed with preparation and filing of GSTR-1 for the months of November 2020 (before the due date) and for October 2020 (in case not yet filed, as on date).
8. DGGI Gurugram arrests one for illegally manufacturing and supplying cigarettes and tax evasion
The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana has arrested one Sh. Satyender Sharma resident of Haryana on charges of manufacturing and supplying illegally manufactured cigarettes without the requisite tax paying documents and without payment of applicable GST and cess.
It became apparent from the investigation conducted to date, that Sh Sharma was engaged in the manufacture and supply of various cigarettes of different lengths. Total tax evasion of more than Rs. 129 crores is pegged to have been committed by the accused.
A facility has now been provided to the taxpayers on the GST Portal, from 28th November 2020 onwards, to file an application online for unblocking of their EWB generation facility (in Form EWB-05), in case their EWB generation facility has been blocked on the EWB Portal.
The Government, on the recommendations of the Council, has waived the amount of penalty payable by any registered person under section 125 of the CGST Act between the period from the 01st day of December 2020 to the 31st day of March 2021
C. Reserve Bank of India Updates
1. Limit for Contactless Cards and UPI Payments to be increased from January 1, 2021
RBI's Governor Shri Shaktikanta Das in his press release announced the following:
1.1. Policy repo rate to remain unchanged at 4%
1.2. At the same time, the Marginal Standing Facility and Bank Rate will also remain unchanged at 4.25%,
1.3. The Reverse Repo Rate too will remain unchanged at 3.35%.
1.4. RTGS system will soon be made 24/7 in the next few days to reduce settlement and default risk in the system, by facilitating settlement of AEPS, IMPS, NETC, NFS, RuPay, UPI transactions on all days of the week.
1.5. Limits for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) to be increased from ₹ 2,000 to ₹ 5,000, from January 1, 2021.
Read the entire press release here
2. Key Decisions made by the Monitory Policy committee
The Monetary Policy Committee (MPC) met on 2nd, 3rd, and 4th December 2020. It reviewed current macroeconomic and financial developments, both domestic and global, and the evolving outlook for the Indian economy. To read the key decisions of the MPC, click here
3. RBI issues a statement on Developmental and Regulatory Policies
This Statement sets out various developmental and regulatory policy measures to
3.1. Enhance liquidity support to targeted sectors of the economy with linkages to other sectors
3.2. Deepen financial markets
3.3. Conserve capital among banks and NBFCs through regulatory initiatives
3.4. Strengthen supervision through the audit function
3.5. Facilitate external trade by improving ease of doing business for exporters; and
3.6. Upgrade payment system services so as to expand financial inclusion and improve customer service.
4. RBI releases Draft Directions on Money Market Instruments under Section 45 W of the RBI Act, 1934. To read the same: Click here
5. Reserve Bank of India imposes monetary penalty
In exercise of powers vested under Section 30 of the Payment and Settlement Systems Act, 2007, the Reserve Bank of India has imposed monetary penalty on 5 entities for non-compliance with regulatory guidelines. The said entities are:
a. Sodexo SVC India Private Limited
b. Muthoot Vehicle & Asset Finance Ltd.
c. QwikCilver Solutions Private Limited
d. Phonepe Private Limited
e. Delhi Metro Rail Corporation Limited
f. Punjab National Bank
6. Fake news doing the rounds that RBI has discontinued the 2000 Rupee note
A fake news had been circulating on social media that RBI has discontinued the Rupee 2000 note. However, that has been verified to be not true.
D. Miscellaneous Updates:
1. IBC issues clarification on the computation of fee payable for delay in filings under regulation 40B of the IBBI Regulations 2016. To read the same: Click here
2. Union FM Smt. Nirmala Sitharaman inaugurates DRI's 63rd Founding Day Celebrations
Smt. Sitharaman unveiled “Smuggling in India Report 2019-20” which analyses organized smuggling trends on Gold & Foreign Currency, Narcotic Drugs, Security, Environment, Commercial Frauds. Pr. DGRI, Shri Balesh Kumar welcomed the dignitaries and presented a report on DRI's performance of the previous financial year.
3. India, USA sign MoU on Intellectual Property cooperation
The Union Cabinet in its meeting dated 19.02.2020 gave the approval for signing the MoU with the United States Patent and Trademark Office (USPTO) in the field of IP Cooperation. The MoU aims at increasing IP co-operation between the two countries
4. DRI to have Virtual Panel Discussion on Trade Based Money Laundering
The Directorate of Revenue Intelligence (DRI) is celebrating its 63rd Founding Day on Friday, the 4th of December, 2020. As part of this year's Founding Day celebrations, a panel discussion on Trade Based Money Laundering is also been organized through video conferencing with the representatives from the Australian Border Force, HM Revenue and Customs, Customs Administration of the Netherlands, and INTERPOL as panelists.
5. Government invites suggestions for the Gender Budget 2021-22
The Government of India has invited suggestions for the Gender Budget 2021-22. Citizens from all walks of life are welcome to be a part of this democratic exercise. Submit your suggestions for the Union Budget 2021-22 here.
In view of large scale disruption caused by the COVID-19 pandemic and after due examination of the representations received from various stakeholders, the Ministry of Corporate Affairs decided to extend the last date of filing of CRA-4 for FY 2019-20 to 31st December 2020.
7. ADB, India sign $50 million loan to boost West Bengal's digital platforms for public finance reforms
The Asian Development Bank (ADB) and the Government of India have signed a $50 million policy-based loan this week, to improve financial management procedures and operational efficiencies aimed at achieving more fiscal savings, promote informed decision making, and improve service delivery in the state of West Bengal.
8. ADB, India sign $132.8 million loan to strengthen Meghalaya's power distribution Sector
The Asian Development Bank (ADB) and the Government of India have signed a $132.8 million loan this week, to strengthen and modernize the distribution network and improve the quality of power supplied to households, industries, and businesses in India's northeastern state of Meghalaya.
9. IFSCA obtains Membership of IAIS
The International Financial Services Centres Authority (IFSCA) obtained membership in the International Association of Insurance Supervisors (IAIS). With this membership, IFSCA would have access to IAIS's global network and would be able to exchange ideas and information with other global regulators. This would help in developing a vibrant global Insurance hub in IFSC at GIFT City.
10.1. FPI inflows stood at Rs 62,782 crore for November 2020
10.2. FDI equity inflows touch US$30,004 million up to September 2020 in FY2020-21-which is15% more than the corresponding period of 2019-20
10.3. In H1 FY21, the total corporate bond issuances amount to Rs. 4.43 lakh crore, 25% higher than Rs. 3.54 lakh crore in the same period last year
11. FM delivers a keynote address at the inauguration of the Sri Lanka Economic Summit 2020
The FM highlighted the measures taken by India to address the challenges related to the pandemic. She also highlighted that cooperation between India and Sri Lanka would be beneficial for sustained growth.
12. US$28.1 billion FDI inflows into the country during the July-September quarter
FDI Equity Inflows during the first half of 2020-21 have shown 15% growth in US$ terms and 23% growth in Rupee terms. Total Foreign Direct Investments (FDI) inflows into India during the second quarter of the financial year 2020-21 (July 2020 to September 2020) have been US$ 28,102 million, out of which FDI equity inflows were US$ 23,441 million or Rs. 174,793 crores.
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