StartUp Movers Monthly Newsletter – January 2020

StartUp Movers Monthly Newsletter – January 2020

We have started our monthly newsletter for startups and business owners so that they can remain on top of everything. The newsletter will cover ‘Top-most updates of the month’ containing key announcements and updates in the area of Income Tax, Goods & Service Tax and Corporate Laws. The updates will be published before the end of each month.

1. Form ITR 1 & 4 Notified

The Central Board of Direct Taxes has notified the Income-tax Return (ITR) Forms 1 and 4 for the Assessment Year 2020-21. These ITR Forms will be applicable for filing of Income-tax return in respect of income earned during the financial year 2019-20. It must be noted that only the ITR Forms have been notified without the corresponding return filing utility. Earlier, there were many changes introduced in the Income Tax Return forms. After the notification was issued, people expressed concern that the changes would cause hardship to individual taxpayers. Hence, few days after the notification, the Central Board of Direct Taxes has withdrawn its decision to prohibit persons having property in joint ownership to file simplified return Form-1 (Sahaj) and Form-4 (Sugam). These persons can now file Income-tax returns for Assessment Year 2020-21 in these simplified forms. New ITR-1 & ITR-4 seek passport details from resident persons having Indian passport. Refer: https://www.incometaxindia.gov.in/communications/notification/notification_01_2020.pdf

2. Staggered filing of GSTR-3B returns

Currently, the last date of filing GSTR-3B returns for every taxpayer is 20th of the month. On 22nd January 2020, the Finance Ministry announced that taxpayers are now allowed to file GSTR-3B returns in a staggered manner. After taking the hassle of return filing into account, the Government has decided to ease the process for trade and industries. The Finance Ministry has issued a press release that there will be different deadlines for different category of taxpayers and hence there will be no clogging of the system on the last day of filing returns. The notification in this regard has not yet been issued. With the changes, there will three dates -- 20th, 22nd and 24th -- of every month for different categories of tax payers. Refer: https://pib.gov.in/newsite/PrintRelease.aspx?relid=197579

3. Union Budget 2020

Union Budget is an annual exercise. Budget generally deals with the central government’s finances, its revenues and expenditures. Budget 2020 speech will be delivered by Union Finance Minister Mrs. Nirmala Sitharaman in the Parliament at 11 AM on February 1. Every section of society has got some expectations from Finance Minister. There are several areas on the taxation front which need urgent attention of the Government. It will be interesting to see what all tax sops are announced by the Government in this union budget. Refer: https://www.indiabudget.gov.in/

4. SOP in case of alerts in IGST Refund:

The Central Board of Indirect Taxes and Customs (CBIC) has published Circular No.131/1/2020-GST regarding the Standard Operating Procedure (SOP) for those exporters whose refund has been stuck due to alerts in IGST refund at custom. In June 2018, the CBIC has noticed instances of fraudulent ITC claims using ineligible documents and subsequent utilization of the credit for the purpose of payment of IGST exports. This Circular has been issued to verify the existence of exporters and mitigate the risk of fraudulent refund of IGST paid through utilizing the ITC which was availed on the basis of fake invoices. In case, any refund remains pending for more than one month, the exporter may register his grievance at cbic.gov.in/issue by giving all relevant details like GSTIN, IEC, Shipping Bill No., Port of Export & CGST formation where the details in prescribed format had been submitted, etc.. All such grievances shall be examined by a Committee headed by Member GST, CBIC for resolution of the issue. Refer: http://www.cbic.gov.in/resources//htdocs-cbec/gst/circular-cgst-131.pdf

5. Mandatory to accept payments in digital mode:

Finance (no. 2) Act, 2019 has inserted a new section 269SU to the Income-tax Act, 1961. The Central Board of Direct Taxes (CBDT) issued a notification effective from January 1, 2020. Every business having total sales, turnover or gross receipts in excess of over Rs 50 crore, in the immediately preceding previous year, should provide facility for payment in electronic mode. The electronic modes prescribed by the CBDT include debit card powered by RuPay Card, Unified Payments Interface (BHIM-UPI) and Unified Payments Interface Quick Response Code (UPI QR Code). If specified person fails to comply with the requirements, he shall be liable to pay a penalty of Rs. 5,000 per day from 01-02-2020 under section 271DB of the Income Tax Act for such failure. Refer: https://www.incometaxindia.gov.in/communications/notification/notification_105_2019.pdf

6. New Form for Company Formation

Ministry of Corporate affairs is launching new form SPICe+ as a part of Government of India’s Ease of Doing Business initiatives. SPICe+ would be an integrated Web form offering multiple services viz. name reservation, incorporation, DIN allotment, mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra) and Opening of Bank Account. It will also facilitate allotment of GSTIN wherever so applied for by the Stakeholders. After deployment of SPICe+ web form, RUN shall be applicable only for change of name of existing companies. Refer: http://www.mca.gov.in/MinistryV2/homepage.html

7. New rules for winding up of companies

The Ministry of Corporate Affairs (MCA) has notified new rules for winding up of companies which shall come into force form April 01, 2020. These rules are Companies (Winding Up) Rules, 2020. Rules contains various provisions related to petition for winding up, statement of affairs, admission of petition and directions, advertisement of petition, application for leave to withdraw petition, affidavit-in-objection, liquidator etc. Refer: http://www.mca.gov.in/Ministry/pdf/Rules_28012020.pdf