Regulation of irregularities in GST claims

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Reference: Central Board of Indirect Taxes & Customs

Update:

Regulation of irregularities in GST claims

The Government of India has taken measures to apply stringent risk parameters-based checks driven by rigorous data analytics and Artificial Intelligence (AI) tools based on which certain taxpayers are taken up for further verification. Moreover, a standard operating procedure has been prescribed for exporters.

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Implication:

To curb cases of wrongful claims of input tax credit, rule 86A has been inserted to CGST Rules, 2017 which empowers tax officer, not below the rank of Assistant Commissioner, to block input tax credit available in the electronic credit ledger of a taxpayer if he has reasons to believe that such credit is ineligible or has been availed fraudulently.

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Update:

Sanction of Prosecution of Group -‘A’ Officers in some cases-reg.

CBIC has prescribed the following procedure for approval of competent authority for sanction of prosecution:

In respect of the proposals emanating from the field formations of Customs [including Directorates, except DRI & DGGSTI], the Commissioner (Investigation-Customs) and the Commissioner (GST-Investigation), shall respectively process the proposals pertaining to prosecution of Group \’A\’ officers through the Member in charge of the Zone forwarding the prosecution proposal. In case the proposal of prosecution is received from DRI/ DGGSTI, Commissioner (Investigation- Customs) and the Commissioner (GST-Investigation) wings will route the file through Member (Investigation), CBIC

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Implication:

Prosecution proposals involving charges under Prevention of Corruption Act, 1988 shall be routed to Directorate General of Vigilance (DGoV).

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Update:

Implementation of PGA eSANCHIT– Paperless Processing under SWIFT-Uploading of Licenses/Permits/Certificates/Other Authorizations (LPCOs) by PGAs – reg.

A facility to upload digitally signed Licenses/Permits/Certificates/Other Authorizations (LPCOs) by Participating Government Agencies (PGAs) on eSANCHIT at all ICES locations across India was introduced from 16.11.2018 vide Circular No. 44/2018-Cus. dated 13.11.2018.

3 more PGAs with their LPCOs are being brought onboard eSANCHIT platform. With this, the total number of PGAs brought on Board becomes 50 as on date.

To facilitate the members of the trade (beneficiaries), the PGAs are required to upload the LPCOs issued by them during the last 15 days from the stated cut-off date. Any LPCOs issued on a prior date may also be uploaded by the PGAs on eSANCHIT, in order to enable the beneficiary to utilize the same.

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Implication:

Since the facility to upload the LPCOs is now being fully made available to these 3 new PGAs, therefore, the beneficiaries i.e. importer/exporters/customs brokers would not be allowed to upload the previously issued LPCOs on eSANCHIT w.e.f 28.02.202

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Reference: Central Board of Direct Taxes

Update:

Procedure of PAN allotment

CBDT has made provisions for the applicants who wish to apply for allotment of permanent account number (PAN), through a common application form notified by the Central Government in the Official Gazette, and the Principal Director General of Income Tax (Systems) or Director General of Income-tax (Systems) shall specify the classes of persons, forms and format along with procedure for safe and secure transmission of such forms and formats in relation to furnishing of Permanent Account Number (PAN).

A Common Application Form (CAl\’) for the purpose of registration, opening of bank and demat accounts and application for Permanent Account Number (PAN) has been notified for the Foreign Portfolio Investors (FPls) in India .

Government has also laid down the classes of persons, forms, format and procedure for Permanent Account Number (PAN) as prescribed in notification.

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Reference : Reserve Bank of India

Update:

Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances

RBI has decided to extend the one-time restructuring of MSME advances. A one-time restructuring of existing loans to MSMEs classified as \’standard\’ without a downgrade in the asset classification is permitted, subject to the following conditions:

• The aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower does not exceed ₹25 crore as on January 1, 2020.
• The borrower’s account was in default but was a ‘standard asset’ as on January 1, 2020 and continues to be classified as a ‘standard asset’ till the date of implementation of the restructuring.
• The restructuring of the borrower account is implemented on or before December 31, 2020.
• The borrowing entity is GST-registered on the date of implementation of the restructuring.

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Implication:

This condition will not apply to MSMEs that are exempt from GST-registration. This shall be determined on the basis of exemption limit obtaining as on January 1, 2020.

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Reference: Securities and Exchange board of India

Update:

Exemption Order in the matter of Motilal Oswal Financial Services Limited

SEBI grants exemption to the Proposed Acquirer, viz. Motilal Oswal Family Trust, from complying with the requirements of Regulations and 5 of the SAST Regulations with respect to the proposed acquisitions in the Motilal Oswal Financial Services Limited, by way of proposed transactions as mentioned:

• The proposed acquisition shall be in accordance with the relevant provisions of the Companies Act, 2013 and other applicable laws.
• On completion of the proposed acquisition, the Proposed Acquirer shall file a report with SEBI within a period of 21 days from the date of such acquisition, as provided in the SAST Regulations.
• The statements/averments made or facts and figures mentioned in the Application and other submissions by the Proposed Acquirer are true and correct.
• The Proposed Acquirer shall ensure compliance with the statements, disclosures and undertakings made in the Application.The Proposed Acquirer shall also ensure compliance with the provisions of the SEBI Circular dated December 22, 2017.
• The Proposed Acquirer shall also ensure that the covenants in the Trust Deed are not contrary to the above conditions and undertaking provided by the transferors. In such case, the Trust Deed shall be suitably modified and expeditiously reported to SEBI.

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Implication:

The exemption granted above is limited to the requirements of making open offer under the SAST Regulations and shall not be construed as exemption from the disclosure requirements.

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