The Lok Sabha on Wednesday passed the Finance Bill 2018, allowing the benefit of inflation adjustments to stocks that were unlisted till January 31 while levying long-term capital gains (LTCG) tax. The move might provide tax benefits to shareholders of the National Stock Exchange (NSE), others who have invested in employee stock ownership plans (ESOPs), and in certain merger and acquisition cases. The Bill retained the LTCG tax without removing the securities transaction tax (STT) and the indexation benefits provided to all shares. The amendments to the Bill also provided relief to start-ups and immunity to the holders of public provident funds (PPF) from any attachment of their funds by authorities.The Bill, tabled by Finance Minister Arun Jaitley in February, proposed to levy the LTCG tax at the rate of 10 per cent on listed securities for capital gains exceeding Rs. 100,000. Indexation benefits are also not provided to these, but the proposal grandfathered all gains up to January 31. The amendments have provided indexation benefits to stocks that were unlisted as on January 31 but will be listed when sold from April 1 onwards.
E-way bill relief, for now to e-tail, courier firms
Small orders that are part of a large consignment of multiple deliveries will not require generation of an electronic-way bill from April 1. A relief to e-commerce, courier companies and the like. Only, this relaxation might be temporary. At its meeting on Saturday, the Goods and Services Tax (GST) Council decided to make it mandatory for inter-state movement of goods worth over Rs 50,000 to have e-way bills from April 1. The requirement for such bills in intra-state movement would be implemented in a phased manner. Giving details of the decision, the finance ministry said, “At present (from April 1), there is no requirement to generate an e-way bill where an individual consignment value is less than Rs 50,000, even if the transporter is carrying goods worth than Rs 50,000 in a single conveyance.” This essentially means if a truck out for delivery is carrying 20 orders, of which four are priced over Rs 50,000, only four e-way bills will need to be generated.
‘Related Party’ Clause may be Eased in IBC
The government may seek to ease the ‘related party’ norms of the Insolvency and Bankruptcy Code (IBC) to ensure the law is not overly restrictive and doesn’t cut down the number of those eligible to bid for assets, effectively weakening competition and reducing the amount that banks can recoup, a senior government official told. “We should not have any unintended exclusion,” the official said. “This requires a very diligent review.” The IBC was strengthened by ordinance and then by amendment to prevent promoters from regaining control of assets in insolvency proceedings unless they repaid their dues. It also sought to restrict those related or connected to them in some way from doing so. “A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person has … a connected person not eligible under clauses (a) to (i)” of Section 29A,” according to the law, which defines “connected persons” and includes holding companies, subsidiary companies, associate companies or related parties of a person referred to in clauses (i) and (ii). This provision makes a wide range of persons or entities ineligible because of ties to entities barred under Section 29A.
CBEC field offices observe GST refund fortnight for exporters
The Central Board of Excise and Customs (CBEC) field formations have launched ´goods and services tax (GST) refund fortnight´ beginning Thursday to quickly sanction pending refunds to exporters. The exporters who have integrated GST (IGST) refund or input tax credit (ITC) claim pending with the CBEC can visit the field offices where the tax officials will help them. “Attention Exporters —CBEC is observing Refund Fortnight from March 1529, 2018, across all field formations to deal exclusively with pending GST refund claims (IGST &ITC) #Good And SimpleTax,” the CBEC tweeted. The CBEC has already given refunds to the tune of ~50 billion, but as much as 70 per cent of total refunds to exporters is still stuck even after eight months of GST rollout. The GST was rolled out from July 1, 2017. The issue of refunds to exporters has been delayed for over eight months now, with exporters complaining that delay in the GST refunds has blocked their working capital. The revenue department, on the other hand, has argued that there are discrepancies in forms submitted by exporters with the Customs department and those with the GST Network.
No Extension of March Deadline for Selling Pre-GST Stock
The deadline for selling pre-GST stock with revised maximum retail price (MRP) stickers will not be extended beyond this month, Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan has said.
The government has set March 31 as deadline for selling pre-GST stock with packaging displaying revised MRP alongside the old price, after manufacturers and retailers asked for extension of previous two deadlines of September 30 and December 31.
Representatives from the industry, however, say they are still not prepared for the transition.
When the goods and services tax (GST) was implemented last year from July 1, the government had allowed marketers to display alongside the old MRP, details of the revised MRP on pre-GST stocks by way of stamping, using stickers, or online printing.
FMCG Suppliers Move Court as Sops go Missing in Tax Exempted Zones
Suppliers to major FMCG companies that were given tax exemptions for investing in industrially marginal areas of Uttarakhand, J&K, Himachal Pradesh and the North East have dragged the government to court over the apparent lack of such concessions in the Goods and Services Tax (GST).
Under the erstwhile tax regime, manufacturers who would invest in some areas would get indirect tax exemptions from the state governments – and sometimes from the central government. The idea was to encourage more investments in these exempted zones.
In the past few years, India’s top FMCG companies such as Hindustan Unilever and Godrej Consumer have been sourcing most of their products from manufacturers in these areas. In the writ petition filed in Uttarakhand High Court’s Nainital bench, the vendors said that under GST there is no clarity of what would happen to the exemptions given under the earlier regime. Under the transitional credit rules, these manufactures have not been able to claim credit of the past taxes paid or exemptions availed to set off their current GST liabilities.