| S. No | Due Date | Related to | Compliance to be made |
| 1 | 11.10.2023 | GST | Filing of GSTR 1 for the month of September, 2023 |
| 2 | 20.10.2023 | GST | -Payment of GST for the month of September, 2023 -Filing of GSTR 3B for the month of September, 2023 |
| 3 | 07.10.2023 | TDS/TCS (Income Tax) | · Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of September 2023. · Deposit TDS from Salaries deducted during the month of September 2023 • Deposit TCS for collections made under section 206C including sale of scrap during the month of September 2023, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of September 2023, if any |
| 4 | 31.10.2023 | TDS Return | Filing of 2nd Quarter (1st July to 31st September) TDS return. |
| 5 | 15.10.2023 | TCS Return | Filing of 2nd Quarter (1st July to 31st September) TCS return. |
| 6 | 31.10.2023 | Tax Audit | Filing of Audit Reports 3CA, 3CD, 3CEB for the financial year 2022-23 ** (12A Trust return also due ) |
TAX JOURNAL OCTOBER 2023
CBDT extends time limit for registered charitable institutions for filing audit report and tax return for tax year 2022-23
Executive Summary:
This Flash News summarizes a recent Press Release dated 18 September 2023 followed by Circular No. 16/2023 of even date (Circular) issued by the Central Board of Direct Taxes [1] (CBDT) which granted relief to registered charitable institutions by extending due date for filing audit report (Form 10B/10BB) from 30 September 2023 to 31 October 2023 and tax return (ITR 7) from 31 October 2023 to 30 November 2023 for tax year 2022-23.
Background:
Entities involved in charitable activities (hereinafter referred as charitable entities) are exempt [2] from income tax under the Income tax laws subject to satisfaction of certain conditions. Amongst other conditions, the charitable entities are required to file audit report [3] on or before 30 September of subsequent tax year and tax return [4] on or before 31 October of subsequent tax year.
Earlier, CBDT vide Notification No. 7/2023 dated 21 February 2023 had replaced the old form of audit report with two different forms requiring substantial data/information in relation to receipts earned, amounts spent, nature of spending, source of spending etc. by the charitable entities. Some of the information sought even pertains to earlier tax years. Furthermore, the online utility of audit report was made available only in September 2023.
Various representations were made by the charitable entities and other stakeholders in relation to the difficulties faced in collating the information and submitting the same as the new forms had several clauses which require a deep understanding of the law and were amenable to different interpretations. In view thereof, the CBDT has granted extension in due date for filing audit report and tax return.
CBDT Circular:
The CBDT provided relaxation to charitable entities by extending the time limit to file:
- Audit report from 30 September 2023 to 31 October 2023; and
- Income Tax return from 31 October 2023 to 30 November 2023
The extension is applicable for tax year 2022-23.
Comments:
This is a welcome move. The information and details sought for in the new audit report are extensive. The extension granted by CBDT may give some more time to the charitable entities to compile this information and comply with the reporting requirements of audit report.
However, some of the new reporting requirements are onerous and might require the taxpayer to pull out records since inception (e.g., details of persons who has donated an amount of INR 0.05M in aggregate in past, source of application during the tax year, etc.) but no relaxation is being granted by CBDT with respect to any reporting requirement.
It may be noted that the aforesaid due dates extension is limited for registered charitable institutions and does not apply to other categories of taxpayers (i.e., non-transfer pricing cases) who are required to furnish tax audit report (Form 3CA/3CB/3CD) on or before 30 September 2023 and tax return on or before 31 October 2023.
Amendment to Czech Labour Code
AAR holds goods distributed under target-based schemes as supply while confirming ITC eligibility
This Tax Alert summarizes a recent ruling of the Karnataka Authority for Advance Ruling (AAR) pertaining to Goods and Services Tax (GST) implication on goods distributed to dealers as part of target-based incentive schemes.
Applicant in the given case is engaged in the business of manufacture of cement. In order to achieve sales and marketing objectives, it launched various target-based promotional schemes wherein it would distribute gold coins and other white goods to its dealers, free of cost, on achieving specified targets laid down in the schemes. Accordingly, it sought advance ruling in respect of ITC admissibility and taxability on goods so distributed.
The AAR ruled that:
- The goods are issued to dealers subject to fulfilment of pre-agreed conditions and stipulations. Gift is something which is given without any conditions or stipulations and hence, the above transaction cannot be covered under the scope of “goods disposed of by way of gift”. Accordingly, ITC on the same is not restricted under Section 17(5)(h) of the Central Goods and Services Tax Act, 2017 (CGST Act).
- Achievement of marketing targets set by the applicant is a non-monetary consideration paid by the dealers for the issuance of incentives. Since, such transfer is made for a consideration, the same is covered in the definition of supply as per Section 7 of the CGST Act and hence, taxable.
- Even if the above transaction is not treated to involve consideration, the same will get covered under Entry 1 of Schedule I to the CGST Act (i.e., permanent transfer or disposal of business asset on which ITC has been availed) and hence, will be treated as supply as per Section 7(1)(c) of the CGST Act.
Comments:
- In the past, various AARs have treated goods distributed free of cost under promotional schemes as “gift” and hence, disallowed ITC on the same.
- AAR’s observation that achievement of marketing targets by the distributor becomes consideration for supply of in-kind incentives by the supplier needs to be legally evaluated.
- Although the AAR has held that transfer of goods under incentive schemes will be covered under Entry 1 of Schedule I, it is silent on the valuation mechanism to be adopted for such transactions.
- Even from distributor’s perspective, under the erstwhile service tax regime, there are various judgements to hold that target-based incentive (in the form of rebates, discounts etc.) cannot be treated as consideration for provision of any service by the distributor
GSTN Advisory – Introducing Electronic Credit Reversal and Reclaimed statement
This is to apprise you on a recent advisory issued by GSTN regarding introduction of a new ledger ‘Electronic Credit Reversal and Reclaimed statement’ on the GST portal, to facilitate taxpayers in accurate reporting and keeping a track of ITC reversal and ITC reclaimed in form GSTR-3B. Details of the advisory is captured below :
Background
- To recap, it may be recalled that certain changes were notified by the Government for reporting information relating to ITC availed, ITC reversal, ITC re-claimed and ineligible ITC in Table 4 of Form GSTR-3B effective from July 2022
- Accordingly, per such changes, the reclaimable ITC reversed earlier as ‘temporary reversal’ [in Table 4(B)(2) – “ITC reversed-Others”] may be subsequently re-claimed [in Table 4(A)(5) “ITC available – All other ITC”] on fulfilment of conditions as stipulated under the GST law.
- Further, at the time such ITC was reclaimed in Table 4(A)(5), the said amount was to be disclosed in “Table 4D(1) – ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period” as well.
- In order to enable accurate reporting of the aforesaid ITC details, the GSTN has introduced this new statement which will help taxpayers in tracking and aligning the amount of ITC reversed earlier and thereafter re-claimed for each return period.
Reporting of ITC reversal balance on GSTN portal
- The opening balance of the cumulative ITC reversal can be reported online by logging onto the GST portal (https://www.gst.gov.in) and navigating as follows:
Login à Report ITC Reversal Opening Balance
or
Services à Ledgerà Electronic Credit Reversal and Re-claimed Statementà Report ITC reversal opening balance
Action points:
- Taxpayers are required to report the cumulative ITC reversal amount (ie. amount of ITC reversed earlier and which has not yet been reclaimed) as opening balance:
- Taxpayers filing monthly returns: Opening balance to be updated till the returns filed for July 2023 (considering the ITC reversal already done)
- Taxpayers filing quarterly returns: Opening balance to be updated upto Q1 of the FY 2023-24, considering the ITC reversal made till April-June 2023 return period
- The opening balance of ITC reversal can be reported until 30 November 2023. Further, as per the advisory, 3 amendment opportunities would be made available to make corrections until 31 December 2023.
- Importantly, until 30November 2023, both reporting and amendment facilities will be made available;
- However, after 30 November till 31 December 2023, only amendments will be permitted and the option for fresh reporting will not be available.
- With the provision for taxpayers to report their accumulated ITC reversal balance, the portal will subsequently maintain a record of reversal and re-claimed amounts on a return period basis in this statement.
- A warning message would be triggered at the time of GSTR-3B filing from August 2023, if a taxpayer attempts to re-claim excess ITC in table 4D(1) over and above the available ITC reversal balance in the statement along with ITC reversal made in current return period in Table 4B(2).
- This warning message would facilitate accurate reporting but the taxpayers will still have the option to proceed with filing.
EY Comments
- The said facility would act as a means for accurate tracking of ITC reversal and reclaim thereof, avoiding clerical errors and improve the overall consistency and correctness of the return reporting. Consequently, the said statement shall help taxpayers to align the amount of ITC reversed as temporary reversal with the corresponding ITC re-claimed in GSTR-3B.
- ITC reversals in Form GSTR-3B in Table 4(B)(2) (reported as temporary reversals) may broadly cover cases where credit has not been claimed (due to non-fulfilment of credit availment conditions or otherwise) on invoices/documents which are reflecting in Form GSTR-2B, or where credit claimed earlier has been reversed on account of non-payment for more than 180 days or other reasons, as may be applicable.
- Given that this ledger/statement shall be available on the GSTN portal, such information may also be visible to the concerned jurisdictional officers. Accordingly, it would be important to maintain appropriate details of ITC claimed and reversal details, while filing monthly GSTR 3B – so as to manage queries (if any) that may emanate in instances where amount of ITC reclaimed exceeds the balance available in the said ‘electronic credit reversal and reclaimed statement’.
CBDT releases the fifth Advance Pricing Agreement Annual Report for FY 2022-23
India’s apex tax administration, the Central Board of Direct Taxes (CBDT) or the Indian Tax Administration, issued its fifth Annual Report on India’s Advance Pricing Agreement (APA) program (the Annual Report or the Report). The Annual Report covers the Financial Year (FY) 2022-23. The Report provides various statistical and qualitative aspects of India’s APA program since its inception in 2012, with particular focus on activities during the FY 2022-23, with a view to encouraging discussion and debate among taxpayers, policy makers, media, economists, and similar interests on the strengths and weaknesses of the program.
India launched the APA program in 2012, as a major initiative of the Indian Government towards fostering a non-adversarial tax regime. The APA program allows the Indian Tax Administration to enter into APAs with taxpayers in respect of their international transaction for a maximum period of 5 years with the objective of determining the arm’s length price (ALP) or to specify the manner in which the ALP is to be determined. Post notification of the APA program, rollback provisions were introduced in March 2015. The roll back provision allows the taxpayer to roll-back the agreement reached in the APA to earlier years, subject to a maximum of 4 years prior to the first year of the APA period. Accordingly, the Indian APA program allows the taxpayer to obtain certainty in matters of transfer pricing for a total period of 9 years.
This Annual Report presents ample numerical data cataloguing the popularity and success of the APA program in India. At the same time, it also indicates the challenges faced and provides an assurance on the commitment of the CBDT to take steps to address these challenges.
This alert captures the key information regarding the Indian APA Program as may be discerned from the Annual Report.
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