@E-Newsletter December 2017

Transcription

1 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA JALGAON BRANCH OF WIRC OF December 2017 Branch Management Committee CA Pallavi Mayur CA Ajay Jain CA Smita Bafna CA Sagar Patni Chairperson Vice-Chairman Secretary Treasurer CA Pankaj Agrawal CA Nitin Zawar RCM CA Shruti Shah Member Imm. Past Chairman Branch Nominee Plot No 10, ICAI Bhawan, Gajanan Colony, Ring Road, Jalgaon Ph Web:

2 Chairperson Desk Respected Members Greeting of the day! The Year 2017 supported the theme of Jalgaon branch Reinvent Ourselves. Learn and Unlearn and Relearn was the challenge for the professionals & public at large on account of GST Act and RERA and other amendments. However, we seek professional opportunities also out of this. In the year 2017 the branch has strived hard to continuously touch all the professional areas with major thrust on GST. We have tried to cover topics on pre GST, post GST, Brain Train Session, Practical difficulties in GST along with topics of Direct Taxes and Workshops on Practical Trainings, health issues, overall management of the member. Eminent personalities and speakers shared their views and guided us with their enriched professional expertise. I would like to extend my gratitude towards President ICAI CA Nilesh Vikamsey Sir and all the Central Council Members along with WIRC Chairman Vishnu Agrawal, CA Sarvesh Joshi, branch nominee CA Shruti Shah and all the Regional Council Members. The year was full of events and activities and I would like to extend my sincere thanks towards each and every member and all the committee members towards their continuous support. The Members Directory of Jalgaon Branch was inaugurated and distributed along with a small token of remembrance amongst the members and Government officials. The opening of Goodness Wall was a new activity started towards the underprivileged of the society, during the year. In the month of November the seminar on Practical Difficulties in Return filling of GST with Recent amendments and question & answer session was kept for the benefit of the members. Also, an awareness programme on mutual fund was taken. In the month of December we have planned various activities like workshop on Microsoft Excel, Effective use of Tally in GST, ERP in Tax Audit. Also a woman s RRC is planned, along with a joint programme with Nasik branch. Most awaited event of students i.e. CA student conclave 2017 and a cultural programme for students Youthvibe will be celebrated in December I appeal all the members to encourage articles to participate in the Students conference. Also, I appeal all the members to generously donate towards CA benevolent fund. I wish you all a very happy New Year ahead. CA Pallavi Mayur Chairperson

3 Memories of 2017

4 Memories of 2017

5 CA Vinay Kawdia Furnishing of Statement of Financial Transaction under Rule 114E and Section 269ST A Comparison Introduction: Every person, as listed in section 285BA(1) is under an obligation to furnish a periodic statement of specified financial transactions as prescribed under Income Tax Rules. Rule 114E of the Income Tax Rules, as amended w.e.f , specifies the nature and value of reportable transactions, periodicity of furnishing of SFT, format of SFT etc. Whereas, In order to reduce generation and circulation of domestic black money the Finance Act 2017 had imposed a prohibition on receipt of cash payments of rupees Two lakhs and above under new section 269ST, applicable w.e.f Any contravention of the aforesaid provision would invite penalty on the recipient under Section 271DA which shall be equivalent to the amount of cash received. However, there would be no penalty if there is good and sufficient reason for contravention of such provision. As far as sale of goods or services is concerned, it is interesting to analyse as to how these two machineries are going to supplement each other. Let s look deeper. Rule 114E: Furnishing of statement of financial transaction: [w.e.f ] 114E. (1) The statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in respect of a financial year in Form No. 61A and shall be verified in the manner indicated therein. (2) The statement referred to above shall be furnished by every person mentioned in column (3) of the Table below in respect of all the transactions of the nature and value specified in the corresponding entry in column (2) of the said Table in accordance with the provisions of subrule (3), which are registered or recorded by him on or after the 1st day of April, 2016, namely:

6 No. * (1) Nature and value of transaction (2) Reporting person (3) 10 Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more. 11. Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.) Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub- Registrar appointed under section 6 of that Act. Any person who is liable for audit under section 44AB of the Act. * Only items as relevant to the discussion of this article are listed. (3) Sub rule (3) of R. 114E specified aggregation mechanism while aggregating the amounts for determining the threshold amount for reporting in respect of any person as specified in column (2) of the said Table. Sub Rule (3) applies to all persons other than the person at Sl. No. 10 and Sl. No. 11 of above table w.e.f (Not. No. 91/2016) (4).. (5) As per Sub-rule (5),the SFT referred to in sub-rule (1) in form 61A shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded. (ALERT: As per sec. 285BA r.w.r. 114E(6)(a) every reporting person mentioned in column (3) of the table under sub rule (2) of rule 114E should obtain a registration number from IT Department for the purpose of filing Statement of Financial Transactions [SFT] in form No. 61A. CBDT vide Notification No. 13 of 2016 dt explained the procedure for Registration and generation of ITD registered Entity Identification Number [ITDREIN]) Issues: Reporting in form 61A [in case of transaction No.11 mentioned at Rule 114E(2) above] applies only to 44AB audit cases.

7 The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT s Notification No. 91/2016 dated 6th October, 2016; clearly indicating that the said transactions did not require aggregation and the reporting requirement under Statement of Financial Transactions [SFT] for this purpose is on receipt of cash payment exceeding Rupees Two Lakh for sale of goods or services PER TRANSACTION. [CBDT press release on ] Refer a summary chart attached at the end of this write up. Section 269ST as inserted by F.A. 2017: S. 269ST. No person shall receive an amount of two lakh rupees or more (a) in aggregate from a person in a day; or (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account: Provided that the provisions of this section shall not apply to (i) any receipt by (a) Government; (b) any banking company, post office savings bank or co-operative bank; (ii) transactions of the nature referred to in section 269SS; (iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify. Comparison: On one hand, any person who is liable for audit under section 44AB of the Act is liable to report, on yearly basis, all his transactions involving receipt of cash payment exceeding two lakh rupees for sale of goods or services of any nature in form 61A electronically. On the other hand, as per newly introduced section 269ST there is equivalent penalty on receipt of cash payments of rupees Two lakhs or above, in the circumstances as specified in clause (a) to (c) of S. 269ST(1)!! Thus these two machineries of the Act are clearly supporting each other for effective implementation of legislative intent to curb black money through restrictions on cash transactions above specified limits. This is further explained below by way of comparative chart in the context of transactions of sale of goods or services.

8 Sr. No. Applicability of Rule 114E and S. 269ST in sales transactions S. 269ST w.e.f applicable Yearly Reporting in Form 61A w.e.f. ( ) Nature of Transaction (1) (2) (3) (4) 1 Single Bill below Rs. 2,00,000/ Full Recovery in cash NO NO Part recovery in cash NO NO Full recovery by Cheque NO NO 2 Single Bill exceeding Rs. 2,00,000/ Full Recovery in cash on single occasion YES YES Part recovery in cash below Rs. 2 Lacs NO NO Part recovery in cash above Rs. 2 Lacs on single occasion YES YES Part recovery in cash above Rs. 2 Lacs on multiple occasions but not a single receipt exceeds Rs. 2 Lacs YES YES Full recovery by Cheque NO NO 3 Multiple Bills issued during year to same person and the aggregate bill amount exceeds Rs. 2,00,000/-. (However not a single bill exceeds Rs. 2 Lacs) Full Recovery in cash on single occasion YES YES Part recovery in cash above Rs. 2 Lacs on multiple occasions (on different days) but not a single receipt exceeds Rs. 2 Lacs Part recovery in cash above Rs. 2 Lacs on multiple occasions (IN SINGLE DAY) but not a single receipt exceeds Rs. 2 Lacs YES NO* Part recovery in cash above Rs. 2 Lacs on single occasion YES NO Full recovery by Cheque NO NO Assumptions: - Multiple bills issued to a person are NOT relating to one event or occasion - On single occasion means at a moment in a day *Refer CBDT press release dt as discusse above NO NO

9 NOTE: In case of - multiple Bills issued during year to same person and the aggregate bill amount exceeds Rs. 2,00,000/-; and One or more bills exceeds Rs. 2 Lakh, Assessee has to establish one to one co-relation in books of accounts between bills issued and cash receipts from time to time, so as to check applicability of section 269ST. Example: Mr. A made following sales to Mr. B: Date Bill No. Bill Amount (Rs.) TOTAL - 4,50,000 Recovery details: Sr. Date Receipt (Rs.) Mode of receipt Cash Cash Cheque Cheque - TOTAL 4,50,000 - Now, if the cash receipts at Sr. No. 1 and 2 above are approprited towards Bill No. 1, the cash receipts at Sr. No. 1 and 2 will attract penalty as per S. 269ST(1)(b). [As per S. 269ST(1)(b), there will be aggregation of all cash receipts in respect of a single sale transaction] On the other hand, if the cash receipt at Sr. No. 1 is approprited towards Bill No. 15 and cash receipt at Sr. No. 2 is approprited towards Bill No. 1, then there will be no contravention of section 269ST!! Therefore, now dealers should specifically mention on every cash receipt the sale Bill No. and date against which the cash is accepted.

10 Diiferecnes: There is a notable difference between the two provisions as discussed above. Section 269ST applies to transactions of receipt of money of Two Lakh rupees or more, whereas, reporting of SFT, as implemented by Rule 114E applies to receipt of cash payment exceeding Two Lakh rupees. Thus, the sales transactions involving receipt of cash of exactly Rs. Two lakhs will go unreported in form 61A under Rule 114E, which are in fact liable to be booked under S. 269ST read with section 271DA of the Act. Thus, to make both the provisions fully supportive to each other, the necessary amendment may be made to remove the above mischief. Procedural Part: Furnishing of SFT in respect of reportable transactions under Rule 114E(2)(11) during F.Y in form 61A up to : Any person who is liable for audit u/s 44AB can only be a reporting person in form 61A. Receipt of cash exceeding Rs. two Lacs per transaction for sale of goods/services of any nature is reportable transaction. Step:1: First create ITDREIN for the reporting person through his IT Login Refer CBDT Not. No. 1/2017 for detailed procedure. Step:2: If there is any reportable transaction in respect of any customer during the F.Y., then following information (customer wise) is required to be filled at part B.3 of form 61A; B.3.2) Aggregate gross amount received from a person; B.3.3) Aggregate gross amount received from a person in cash; B.3.4) Aggregate gross amount paid to a person; NOTES: 1. For sale or purchase, by any person, of goods or services of any nature it is obligatory to quote PAN for amount exceeding two lakh rupees per transaction: (refer Rule 114B) 2. The aggregation rule is not applicable for identification of reportable transactions 3. The relevant reporting format is Part A (Statement Details) and Part B (Report Details) 4. The Report Type should be specified as AF-Aggregated Financial Transactions (A.2.7). 5. The reporting format aggregates the transactions of one person in one report (Customer wise reporting) 6. One report would include details of one person along with transaction details 7. The Product Type should be specified as ZZ Others (B.3.1)

11 Forthcoming Events of December 2017 Date Subjects Speaker CPE Hours Venue 4-Dec-17 Workshop on Microsoft Excel CA K K Badale, Jalgaon 3 ICAI Bhavan, 10, Gajanan Colony, Ring Road, Jalgaon Sheth Lalji Narayanji 4-Dec-17 Career Counselling Programme CA Darshan Jain NA Sarvajanik Vidyalaya, Jalgaon Workshop on Effective Use of ICAI Bhavan, 10, Gajanan 5-Dec-17 CA K K Badale, Jalgaon 3 Tally for GST Colony, Ring Road, Jalgaon Workshop on Effective use of ICAI Bhavan, 10, Gajanan 6-Dec-17 CA K K Badale, Jalgaon 3 ERP in Tax Audit Colony, Ring Road, Jalgaon 10-Dec-17 2nd Series of CPT Mock Test NA NA ICAI Bhavan, 10, Gajanan Colony, Ring Road, Jalgaon Women RRC & Seminar on Role 17-Dec-17 CA Smita Bafna, Jalgaon of CA Women in Make in India 3 Shegaon GST for Charitable Trusts, Co- Mr. YASHWANT Nasik Branch of WIRC of 23-Dec-17 Operative Societies, NPO's & Job 3 JAYWANT KASAR ICAi Work Provisions & E-Way Bill 23rd & 24th Dec Dec-17 CA Students ConferenceTaxation, Company Law, Indian Accounting Standards, Indian Economy & Current Affairs Youthvibe Students Cultural Evening CA Pravin Navandar, CA Harsh Dedhia, RCM CA Pritee Savla, CA G. B. Modi, CA Vinay Kawdia, CA Vishal Poddar, Mr. Kabir Sonalkar NA NA NA Senate Hall, NMU, Jalgaon Convocation Hall, NMU, Jalgaon * Appeal to all CA Members to generously contribute towards the CA Benevolent Fund.

12 Programes of November 2017