18/02/2020

A. How to opt-in Composition Scheme:

The application for opting-in composition scheme for the financial year, 2020-21 has been made available on GST Portal.

The taxpayers who are already in composition scheme in previous financial year are not required to opt in for composition again for FY 2020-2021.

The eligible registered taxpayers, who want to opt-in for composition scheme for the Financial Year 2020-2021, may file FORM GST CMP-02 application up to 31st March, 2020 on common portal.

The taxpayers should navigate as follows:

Log-in>Services > Registration > Application to opt for Composition Levy>filing form GST CMP-02>file application under DSC/EVC.

Once CMP-02 application is filed, the composition scheme shall be available to the taxpayer w.e.f. 1st April 2020.

The taxpayers who were a regular taxpayers in previous financial year but are opting-in composition scheme for 2020-21 should file ITC-03 for reversal of ITC credit on stocks of Inputs, semi-finished goods and finished goods available with him within a period as prescribed under Rule, 3(3A) of CGST Rules, 2017.

For more information taxpayers may consult user-manual available at GST Portal. Following links may also be used for opening user manual: https://tutorial.gst.gov.in/user…/compositionpoc/index.htm

B. Return /Payment

All taxpayers opting in for composition shall file FORM GST CMP-08 quarterly and pay GST and shall file GSTR-4 annually.

C. Who are eligible taxpayers for opting-in for Composition Scheme:-

Following taxpayers may opt for this scheme:

The normal taxpayers having aggregate turnover (at PAN level) below Rs. 1.5 Crore in the previous financial year, who doesn’t want to avail ITC facility,

The normal taxpayers having aggregate turnover (at PAN level) below Rs. 75 lakh in the previous financial year who are situated in following states:

Arunachal Pradesh,

Manipur,

Meghalaya,

Mizoram,

Nagaland,

Sikkim,

Tripura and

Uttarakhand:

The normal taxpayers supplying services and/or mixed supplies having aggregate turnover of last financial year below Rs. 50 lakhs.

D. Taxpayers, who are not eligible for opting in composition scheme:

Suppliers of the goods/services who are not liable to be taxed under GST,

Inter-State outward suppliers of goods/services,

The taxpayers supplying through e-commerce operators, who are required to collect tax under section 52,

The manufacturers of notified goods like (i) Ice cream and other edible ice, whether or not containing cocoa, (ii) All goods, i.e. Tobacco and manufactured tobacco substitutes and (iii) Pan Masala, (iv) Aerated water

A Casual taxpayer,

A Non-Resident Foreign Taxpayer,

A person registered as Input Service Distributor (ISD),

A person registered as TDS Deductor /Tax Collector,

Declaration of GSTIN mandatory in Import/Export documents

w.e.f. 15th February, 2020

Certain cases have been reported where the importer or exporter did not declare their

GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN. With effect

from 15.02.2020, the declaration of GSTIN shall also be mandatory in import/export

documents for the importers and exporters registered as GST taxpayers.

http://www.cbic.gov.in/…/cs…/Circular-No-09-2020.pdf

February, 2020)

1. SEBI based on the recommendations of a Working Group and inputs from public consultation, reviewed

the framework for regulation of Portfolio Managers and the SEBI (Portfolio Managers) Regulations,

2020(“PMS Regulations”)has been notified on January 16, 2020.

2. In addition to the above, certain changes to the regulatory framework for Portfolio Managers have been

mandated, as under:

3. In partial modification to Cir. /IMD/DF/13/2010 dated October 05, 2010 on Regulation of Fees and

Charges, the following is mandated:

(i) As provided in Regulation 22 (11)of the PMS Regulations, no upfront fees shall be

charged by the Portfolio Managers, either directly or indirectly, to the clients.

(ii) Brokerage at actuals shall be charged to clients as expense.

(iii) Operating expenses excluding brokerage, over and above the fees charged for Portfolio

Management Service, shall not exceed 0.50% per annum of the client’s average daily

Assets under Management (AUM).

(iv) In case client portfolio is redeemed in part or full, the exit load chargedshall be as under:

a) In the first year of investment, maximum of 3%of the amount redeemed.

b) In the second year of investment, maximum of 2%of the amount redeemed.

c) In the third year of investment, maximum of 1%oftheamount redeemed.

d)After a period of three years from the date of investment, no exit load.

4. The Circular further elaborates on Periodic reporting by Portfolio Managers, uniformity of investment

approaches, Direct on-boarding of clients by Portfolio Managers, Reporting of Performance by Portfolio

Managers, Reporting of Performance by Portfolio Managers, etc.

5. The provisions of this Circular shall be applicable with effect from May 01, 2020.

The Circular is available at: https://www.sebi.gov.in/…/guidelines-for…

(1A) of the Central Goods and Services Tax Rules, 2017 in certain cases

In exercise of the powers conferred by sub-rule (1A) of rule 117 of the Central Goods and Services

Tax Rules, 2017 read with Section 168 of the Central Goods and Services Tax Act, 2017 on the

recommendations of the Council, and in supersession of Order No. 01/2019-GST dated

31.01.2019, except as respects things done or omitted to be done before such supersession, the

Commissioner hereby extends the period for submitting the declaration in FORM GST TRAN-1

till 31st March, 2020, for the class of registered persons who could not submit the said

declaration by the due date on account of technical difficulties on the common portal and whose

cases have been recommended by the Council.

Source: http://www.cbic.gov.in/…/htdoc…/gst/order1-2020-cgst.pdf

Other updates related Tax

• PAN cards will be allotted instantly online soon with Aadhaar.

• Proposal to bring down litigation in direct taxation scheme; 4.83 lakh direct cases pending in various appellate forums.

• Vivad se Vishwas scheme for direct tax payers whose appeals are pending at various forum.

• Income Tax Act to be amended to allow faceless appeals against tax orders on lines of faceless assessment.

• Registration of charity institutions to be made completely electronic, donations made to be pre-filled in IT return form to claim exemptions for donations easily.

• Budget proposes deferment of tax payment by employees on ESOPs from startups by five years

• Government extends additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021.

• In a boost to MSMSEs, turnover threshold for audit raised to Rs 5 crore from Rs 1 crore

• Tax on Cooperative societies proposed to be reduced to 22 per cent plus surcharge and cess, as against 30 per cent.

For Individuals:

1. Income tax rates will be significantly reduced for those who forego reliefs, exemptions

Income between

1) Rs 5 to 7.5 lakh tax reduced from 20% to 10%

2) Rs 7.5 to 10 lakh tax reduced from 20% to 15%

3) Rs 10 to 12.5 lakh reduced from 30% to 20%

4) Rs 12.5 to 15 lakh reduced from 30% to 25%

5) Greater than 15 lakh, 30%

2. Income tax rates will not change for those earning above ₹15 lakh and they will continue paying 30%.

For Corporates:

3. Tax audit under section 44AB limit increased to 5 crore from 1 crore.

4. DDT (dividend distribution tax) to be removed. Dividend shall be taxed at the hands of the recipients.

No. SEBI/HO/MRD/DDAP/CIR/P/2020/16 (Dated 28

th January, 2020)

With reference to SEBI circulars dated June 07, 2016, February 23, 2017 and January 10, 2019, which, inter

alia, provides norms on composition of IPF Trust, and functions and composition of committees at MIIs,

SEBI has issued a circular wherein it is clarified that:

a. Norms for composition of IPF Trust, as provided in Clause 3(i) (4) of SEBI circular dated February 23,

2017, are uniformly applicable across Exchanges and Depositories.

b. The functions of IPF Trust, as prescribed in Clause 3(i) (4) of SEBI circular dated February 23, 2017,

shall be applicable only to Exchanges.

Depositories shall ensure compliance with these norms within three months from the date of this circular.

Additionally, with reference to Gazette notification dated June 04, 2019, amending SECC Regulations, 2018

and SEBI (D&P) Regulations, 2018, inter alia, in respect of names of committees at MIIs, it is clarified that

in SEBI circular dated January 10, 2019, read with circular dated February 15, 2019:

a. The name of “Investor grievance redressal committee” shall be read as “Grievance redressal

committee”.

b. The name of “Member selection committee” shall be read as “Member committee”.

The Circular is available at: https://www.sebi.gov.in/…/ipf-trust-and-committees…

SEBI/HO/CDMRD/DRMP/CIR/P/2020/15 (Dated 27th January, 2020)

1. SEBI vide Circular CIR/CDMRD/DRMP/01/2015 dated October 01, 2015 and

SEBI/HO/CDMRD/DRMP/CIR/P/2016/77 dated September 01, 2016 prescribed Risk Management Framework

for the Commodity Derivatives Segment (CDS). These circulars, inter alia, stipulated minimum value for Initial

Margin (IM) and Margin Period of Risk (MPOR).

2. CPSS-IOSCO Principles for Financial Market Infrastructure (PFMI) inter alia prescribes under Key

Considerations for Principle 6 on margin that margining model should to the extent practicable and prudent,

limit the need for destabilising, pro-cyclical changes.

3. It is further explained under Clause 3.6.10 of PFMI that:

a. Limiting procyclicality: A CCP should appropriately address pro-cyclicality in its margin

arrangements. In this context, pro-cyclicality typically refers to changes in risk management practices

that are positively correlated with market, business, or credit cycle fluctuations and that may cause or

exacerbate financial instability.

b. For example, in a period of rising price volatility or credit risk of participants, a CCP may require

additional initial margin for a given portfolio beyond the amount required by the current margin model.

This could exacerbate market stress and volatility further, resulting in additional margin requirements.

To support this objective, a CCP could consider increasing the size of its prefunded default arrangements

to limit the need and likelihood of large or unexpected margin calls in times of market stress. These

procedures may create additional costs for CCPs and their participants in periods of low market

volatility due to higher margin or prefunded default arrangement contributions, but they may also result

in additional protection and potentially less costly and less disruptive adjustments in periods of high

market volatility.

4. In light of the above and given the wide variation of liquidity and volatility among different commodity

derivatives, it has been decided, in consultation with stakeholders, to categorize commodities as per their

realized volatility and to prescribe floor values of IM and IMPOR depending upon their categories.

5. Accordingly, norms regarding Minimum IM and minimum MPOR for commodity derivatives segment stands

revised as per the framework mentioned in the circular. The norms on risk management prescribed vide circulars

referred to at Para ‘1’ above, which are not modified shall continue to prevail.

Initial categorisation of commodities as prescribed under Para ‘5’ of the circular shall be done and notified by

CCs within 15 days of the circular. The revised norms with regard to IM, MPOR and lean period margin may

be implemented by CCs in a phased manner and shall be fully implemented within a period of three months

from the date of the circular. The corresponding update in stress testing scenarios, if applicable, shall also be

done by CCs immediately after the circular is fully implemented.

The circular is available at: https://www.sebi.gov.in/…/review-of-margin-framework…

3. MERCHANTING TRADE TRANSACTIONS (MTT) – REVISED GUIDELINES – RBI/2019-20/152

A.P. (DIR Series) Circular No.20 (Dated 23rd January, 2020)

RBI has issued a circular containing directions issued under sections 10(4) and 11(1) of the Foreign Exchange

Management Act (FEMA), 1999 (42 of 1999) without prejudice to permissions / approvals, if any, required

under any other law wherein attention of Authorised Dealer Category-I banks (AD banks) is invited to A.P.

(DIR Series) Circular No.115 dated March 28, 2014 containing directions relating to merchanting trade

transactions.

With a view to further facilitate merchanting trade transactions, the existing guidelines have been reviewed and

the revised guidelines are being issued in supersession of the A.P. (DIR Series) Circular ibid.

The circular is available at: https://www.rbi.org.in/Scripts/NotificationUser.aspx…

(i) Stakeholders may please note that as part of Government of India’s Ease of Doing Business(EODB) initiatives, the Ministry of Corporate Affairs would be shortly notifying & deploying a new Web Form christened ‘SPICe+’ (pronounced ‘SPICe Plus’) replacing the existing SPICe form.

(ii) 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.

(iii) Upon notification & deployment, all new name reservations for new companies as well as new incorporations shall be applied through SPICe+ only

(iv) However, incorporation of companies for names reserved through the existing RUN service shall continue to be filed in the existing SPICe eform along with related linked forms as applicable and if marked under resubmission shall be resubmitted in SPICe eform.

(v) Resubmission of SPICe forms submitted prior to date of deployment of SPICe+ web form shall also be filed in the existing SPICe eform and related linked forms as applicable.Message

Due to the proposed changes to the RUN web service (for companies), RESUBMISSION OPTION for name reservation SHALL NOT BE AVAILABLE for forms processed by CRC from 1st Feb 2020 ONWARDS for approximately 15 days. Hence, stakeholders are advised to EITHER AWAIT DEPLOYMENT OF SPICe+ AND THEN APPLY FOR NAMES through SPICe+ web form or perform due diligence while submitting any application in existing RUN web service for name reservation. RUN applications (for companies) processed filed w.e.f 1st February 2020 onwards shall either be approved or rejected based on checks performed by CRC officers. Stakeholders may kindly note and plan accordingly.