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Direct Tax

Income Tax department starts scrutinizing fake entries, fake invoices of companies

[Excerpts from The Economic Times, 21 January 2021]

The Income Tax department has initiated a drive for scrutinizing the financial statements of companies to check for any fraudulent transactions/ false entries with the objective of tax evasion. This action of the tax department is basis its suspicion that several companies are forging financial statements to evade taxes. The objective of the above action appears to be in line with the objective of the recent amendment to Section 281B of the Income-tax Act, 1961 (the IT Act), wherein the scope of provisional attachment of property was extended to cases of failure to pay the penalty in case of false/omitted entries from books of accounts.

Central Board of Direct Taxes (CBDT) directs the National Faceless Appeal Centre (NFAC)/ National e-Assessment Scheme (NeAC) to dispose of penalty cases until units under Faceless Penalty Scheme, 2021 are set-up

[Excerpts from Taxsutra 23 January 2021]

The CBDT directs that all penalty cases, pending as well as initiated subsequently, assigned to National Faceless Penalty Centre shall be disposed of by the NFAC, except where penalty proceedings are assigned to central charges, International tax charge and TDS charge. Further, the CBDT directs the income tax authorities of NeAC/ReAC/AUs/RUs to act and perform the functions corresponding to income tax authorities under the Penalty Scheme.

INR 0.95 trillion disputed amount settled under 'Vivad se Vishwas'

[Excerpts from The Economic Times, 2 February 2021]

The Vivad se Vishwas Scheme, which was announced by the finance minister in her Budget speech last year, has helped various categories of taxpayers like corporates, non-corporates, state governments and public sector undertakings (PSUs) to settle their tax disputes. As per the CBDT Chairman, the disputed amount of INR 0.95 trillion has been settled by about 0.12 million entities who opted for the Vivad se Vishwas Scheme to resolve long pending litigation issues with the Income Tax Department.

Faceless assessment bucket has 0.2 million cases; 35,000 completed: CBDT chairman

[Excerpts from The Economic Times, 5 February 2021]

The Faceless Assessment Scheme has evaluated about 0.2 million income tax cases, out of which finality has been achieved in an estimated 35,000 cases. The Income Tax Department has been able to complete more than 35,000 cases under this scheme and of which only 1000 cases faced additions.

Indirect Tax

Extension of Form GSTR-9 and Form GSTR-9C due dates for FY 2019-20

[Notification No. 04/2021 – Central Tax dated 28 February 2021]

In view of various representations received from the industry, the government has extended the due date for furnishing Form GSTR-9 (annual return) and Form GSTR-9C (reconciliation statement) for the financial year 2019-20 to 31 March 2021 (from the earlier 28 February 2021).

Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices

[Circular No. 146/02/2021 – GST dated 23 February 2021]

The government has provided certain clarifications on the applicability of the Dynamic QR code on B2C invoices issued by taxpayers having an aggregate turnover of more than INR 5 billions. Some of the key clarifications issued are as follows:

  • Exports - Supplies for exports are required to comply with e-invoicing provisions by treating them as B2B supplies. Therefore, Dynamic QR code is not applicable on export invoices;
  • Payment capability - Dynamic QR Code should be such that it can be scanned to make a digital payment;
  • Prepaid invoices - In case of prepaid invoices, if cross-reference of the payment received is made on the invoice, then the invoice would be deemed to have complied with the requirement of Dynamic QR Code;
  • Supplies through e-commerce - In case the supplier is making supply through an e-commerce portal or application, and the said supplier gives a cross-reference of the payment received in respect of the said supply on the invoice, then such invoices would be deemed to have complied with the requirements of Dynamic QR Code. In cases other than prepaid supply, i.e., where payment is made after generation/ issuance of the invoice, the supplier shall provide a Dynamic QR Code on the invoice.