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Monthly Archives: March 2022

Taxation System in UAE – An Overview

Taxation System in UAE

UAE Taxation System – Analysis

The United Arab Emirates is a federation of seven emirates, with autonomous emirates and local governments. The UAE’s openness to international business and strategic location adds an extra advantage to the region.

History of Taxes in UAE – Taxation System in UAE

At present, there are no tax laws that apply to individuals in the UAE.

However, the Federal Tax Authority does issue tax Residence Certificates to individuals who satisfy the requirements specified by the Authority to take advantage of DTAA. The UAE has entered into a 115 DTA agreement with its trade partner.

Income Tax and Corporate Taxes in UAE – Taxation System in UAE

The Income-tax decrees have been issued in five of the seven Emirates in UAE, being–Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah, but they are not currently enforced on most businesses. Hence, resulting in no corporate taxation in most industries. 

However, the UAE levies the corporate tax on oil and gas exploration and production companies. Also, the branches of foreign banks are subject to income tax under separate banking tax decrees in certain Emirates (E.g. Dubai, Abu Dhabi).

Excise Duty / Tax

The excise tax was also introduced across the UAE in 2017. The Federal Tax Authority in UAE pointed out that the application of Excise Tax laws achieved remarkable success since their implementation, reflecting positive results primarily in the accelerated pace of building a safe and healthy society by reducing the consumption of harmful goods.

Custom Duty in UAE –

UAE is a hub for international trade hence, Customs Duty plays an important role. A customs duty of 5%–is imposed on the cost, insurance, and freight (CIF) of the value of imports. Other rates may apply to certain goods, such as alcohol and tobacco, and certain exemptions and reliefs may also be available.

The United Arab Emirates is part of the GCC Customs Union, which was established in 2003 to remove customs and trade barriers among the GCC member states.

Most significant tax reform – VAT

The year 2018 had been major for the UAE taxation system. It was the year when Value Added Tax impacted the country in a whole new way.

Understanding VAT – Most Significant Tax in UAE

The UAE government implemented a value-added tax (VAT) in the country from January 1, 2018, at a standard rate of 5%.

VAT has provided the UAE with a new source of income. It has also aided the government is moving toward its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

VAT applies equally to tax-registered businesses managed on the UAE mainland and in the free zones. However, if the UAE Cabinet defines a certain free zone as a ‘designated zone, it must be treated as outside the UAE for tax purposes. The transfer of goods between designated zones is tax-free for certain transactions.

There are basically three categories of VAT Rates in UAE–When the tax treatment of financial services, residential buildings (subject to conditions), bare land, and local passenger transport services are exempt; there is another big list under the zero-rated category. The export of goods, export of services, export of telecommunication services, certain means of transport, international transportation of services for passengers and goods, residential buildings (Subject to conditions), Education Services, and healthcare services. All other supplies which are not exempt or zero rates are subject to a VAT Standard Rate of 5%.

Criteria for VAT Registration

If a person is a resident in the UAE, he would be required to get registered for VAT mandatorily if the total value of their taxable supplies and imports made within the UAE exceeds the Mandatory Registration Threshold of AED 375,000 over the previous 12-month period or if the person anticipates that the total value of their taxable supplies or imports will exceed AED 375,000 in the next 30 days.

There is also an option for businesses to get registered for UAE VAT Voluntarily if, at the end of any month, the total value of the person’s taxable supplies and imports or their expenses that were subject to VAT, in the previous 12 months exceeds the Voluntary Registration Threshold of AED 187,500 or the total value of the person’s taxable supplies and imports or their expenses which are subject to VAT, in the next 30 days is expected to exceed the Voluntary Registration Threshold of AED 187,500.

Filing of Returns under VAT

Taxable businesses must file VAT returns with FTA on a regular basis and usually within 28 days of the end of the ‘tax period’, as defined for each type of business. The standard tax period in UAE is quarterly for businesses with an annual turnover below AED150 million and monthly for businesses with an annual turnover of AED150 million or more. The FTA may, at its choice, assign a different tax period for certain types of businesses.

SOME KEY FEATURES OF UAE VAT

Foreign Business Refunds

The Federal Tax Authority (FTA) allows foreign companies to claim back Value Added Tax (VAT) incurred while doing business in the UAE.

To be eligible for the VAT refund, the first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-Implementing GCC States that fully comply with the provisions of the Common VAT Agreement of the Cooperation Council for the Arab States of the Gulf. Such foreign businesses must not be Taxable Persons in the UAE. They must also be registered as an establishment with a competent authority in the jurisdiction in which they are established. And finally, they must be from a country that implements VAT and that equally provides VAT refunds to UAE businesses in similar circumstances.

UAE Designated Free Zones

UAE has specified areas termed “Free Zones”, which are considered different from the UAE Main Land.

Historically, Free Zones have been excluded from the territorial scope of the UAE. However, for VAT purposes, this is not automatically the case. Only those Free Zones listed in a Cabinet Decision qualify for special VAT treatment and that special VAT treatment has certain limitations. These nominated Free Zones are known as Designated Zones for VAT purposes. 

The effect for businesses operating in Designated Zones will be that many supplies of goods will be outside the scope of UAE VAT, subject to strict criteria and detailed record keeping. However, supplies of services are subject to the normal UAE VAT rules.

VAT Refund for tourists:

VAT refunds for tourists are carried out through a fully integrated electronic system that connects retailers registered in the ‘Tax Refund for Tourists Scheme’ with all ports of entry and exit from the UAE.

“Planet” is the exclusive operator of the tax refund system for tourists, which the Federal Tax Authority executes in the UAE. The tourist, however, should have met certain conditions laid by the authority specifically to claim the VAT Refund.

Tourists will receive their refunds through a special device placed at the departure port–airport, seaport, or border port–by submitting the tax invoices for their purchases from the outlets registered in the Scheme, along with copies of their passport and credit card.

Once these documents are submitted, tourists can either recover the VAT in cash in UAE dirhams or have it transferred to their credit card.

VAT IN The Gulf Cooperation Council

When VAT in UAE is getting big and better with each passing day, let’s also see where is UAE and other GCC Countries standing.

The Kingdom of Saudi Arabia has seen a leap in the VAT rate from 5% to 15%. The increase came as a part of additional measures taken by the country in response to the economic impact of the Covid-19 crisis.

Bahrain, having implemented VAT with effect from 1st January 2019, is continuing to issue new sector and topic-specific VAT guidance, to provide support and clarity to businesses operating in the state. Qatar imposes no VAT or sales tax on operations in Qatar.

However, the introduction of VAT in Qatar under a common GCC framework is expected to be introduced in the near future with an anticipated tax rate of 5%. The tax authorities in Kuwait recently announced that it will finally introduce Value Added Tax (VAT) at 5% from 1 April 2021.

Oman is set to be the fourth GCC state to implement VAT since the signing of the GCC VAT Agreement at the end of 2016, with an effective date of 16 April 2021. The Oman VAT Law was published in the official gazette on 18 October 2020. This triggered a 180-day countdown to the effective date of 16 April 2021.

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PVR and INOX announce a blockbuster merger

PVR and INOX a blockbuster merger

PVR and INOX announce a blockbuster merger, to become a combined entity that will be headed by Ajay Bijli (owner and chairman of PVR).

PVR and INOX announce a blockbuster merger to tackle the threat of growing OTT Content. With the OTT onslaught of the theatre business, the aims of theatre owners have risen to an extent that they want to dominate the multiplex market, as the combined entity is assured to have a market share of 50% with a box office share of 42% for Hindi and English content.

But with a higher ambition comes higher scrutiny! This deal will be subject to regulatory and shareholder approval.

From a shareholder’s point of view –

Imp – In this stock deal, for every 10 shares of INOX, the shareholders will receive 3 shares of PVR. Not a bad deal!

Governance Structure –

The structure looks clean, governance wise, as Pavan Kumar Jain (chairman of INOX) will take the seat of a non-executive director with INOX promoters having a 16.66% stake in the combined entity, and Sanjeev Kumar (Joint MD at PVR) being the executive director with PVR promoters having 10.62%.

From a regulatory standpoint –

The combined entity is poised to become the largest film exhibition company in India. CCI is the first one to eye over such a merger, where the entity is set to make multiplex a two-player market.

Cinepolis, the third-largest multiplex chain in India, will become less than one-third of the merged company.

But, here’s a catch! This merger won’t require CCI’s #approval as it is below the threshold of Rs 1,000 cr. This number could have been much higher if there was no pandemic. But the point is maybe we would have never seen a merger if the situation would have been normal.

The market sentiment –

The shareholders have no reason to be upset as this synergy will ramp up the EBIDTA by Rs 150 cr (Rs 90 cr from ads & Rs 60 cr from convenience fee).

The multiplex business derives revenues from two main sources:
~Ad Revenue (INOX’s is at a 33% discount than PVR, per screen wise).
~Convenience Fee (INOX’s is 50% lower than PVR).

This deal can be weighed as if it’s a merger of Amazon Prime with Netflix! Hence, it will be very interesting to see if the regulators take into consideration the present case of bad revenues or keep in mind the real dominance of these top two players.

This deal can be weighed as if it’s a merger of Amazon Prime with Netflix –

Hence, it will be very interesting to see if the regulators take into consideration the present case of bad revenues or keep in mind the real dominance of these top two players.

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Section 194-IA: TDS On Purchase of Immovable Property – Simplified

TDS On Purchase of Immovable Property - Section 194-IA

TDS On Purchase of Immovable Property – Section 194-IA

The buyer of immovable property is under a statutory obligation to deduct the TDS and pay it to the government within the due date. TDS has to be deducted under section 194-IA of the Income Tax Act, 1961. We have tried to explain the provisions in simplified language.

Who is liable to deduct TDS u/s 194-IA?

A Buyer of the property who is responsible for paying (other than the person referred to in section 194LA) to a resident seller any sum by way of consideration for transfer of any immovable property other than agricultural land.

Criteria to be met, so that TDS has to be paid under section 194-IA –

  1. ✓ The buyer of immovable property other than agricultural land is required to deduct tax at source u/s 194-IA. It means if you buy an agricultural land, there is no liability for the payment of the TDS.
  2. ✓ The seller should be a resident person. Thus, this section is not applicable where the seller is a non-resident. In case the seller is a non-resident section, 195 is applicable and TDS has to be paid according to that section.
  3. ✓ Even if the buyer has no income, still TDS has to be deducted and paid.
  4. ✓ The purpose of purchase is not relevant, i.e. it is immaterial whether the property is acquired as stock-in-trade or as a capital asset.

Important definitions for section 194-IA

Q. What is Immovable property?

Ans: Any land or any building or part of a building. But Immovable property shall not include agricultural land, which is not a capital asset.

Q. What is Agricultural Land?

Ans: Agricultural Land means agricultural land in India, not being a land situated in any area referred to in items (a) & (b) of section 2(14)(iii).

Q. What is “Consideration for the purposes of section 194-IA?

Ans: “Consideration for transfer of any immovable property” shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee, or any other charges of similar nature, which are incidental to the transfer of the immovable property.

Meaning of “Agricultural Land” simplified –

Items (a) & (b) of section 2(14)(iii) are as under agricultural land situated –

(a) In any area comprised within jurisdiction of a municipality or a cantonment board having a population not less than 10,000;

or

(b) In any area within the distance, measured aerially,

  • (i) Not being more than 2 km. From local limits of any municipality or cantonment board, which has a population of more than 10,000, but not more than 1,00,000
  • (ii) Not being more than 6 km. From local limits of any municipality or cantonment board, which has a population of more than 1,00,000 but not more than 10,00,000
  • (iii) Not being more than 8 km. From the local limits of any municipality or cantonment board, which has a population of over 10 Lakhs.

When to deduct TDS u/s 194-1A –

• At the time of credit or at the time of payment, whichever is earlier.

TDS rate /s 194-IA –

  1. • TDS Rate: 1%.
  2. • If Pan Not Available: 20%.

Threshold Limit u/s 194-IA –

• No TDS where consideration is less than Rs. 50 Lakhs.

More than 1 buyer or seller –

More than 1 Buyer

• More than one buyer: In the case of more than one buyer and the purchase price of each buyer is less than Rs. 50 lakhs but the aggregate sales consideration of the property is more than Rs. 50 Lakhs, section 194-IA will be applicable and all the buyers will be required to deduct TDS on their respective share of the purchase price.

Note – For contradictory views, refer: Vinod Soni vs. ITO (2019)

• More than one seller: If there is more than one seller in a single sale deed in respect of the property and the aggregate consideration for the property exceeds Rs. 50 Lakhs however the share of each co-owner is less than Rs. 50 Lakhs, section 194-IA will be applicable. Therefore, the buyer would be required to deduct TDS u/s 194-IA.

Important Points on TDS On Purchase of Immovable Property – Section 194-IA –

  • • If the immovable property is purchased from a non-resident person for any value, no TDS is required to be deducted u/s 194-IA as section 195 shall apply in such a case.
  • • It is not necessary that the land or building should be situated in India. Thus, if any person purchases property outside India from a person resident in India, he is liable to deduct tax at source @ 1%.
  • • This is a unique section as TAN is not required in this section for making deduction of tax at source.
  • • Section 194-1A shall not be applicable where the immovable property has been transferred by way of gift, will or inheritance as there is no consideration in this case.
  • • In the case where the property value is Rs. 50 Lakhs or more and payment is made in installments, TDS shall be required to be deducted on every part of payment (installment) of the consideration.

Amendment on Section 194-IA by Finance Bill, 2022:

The cases where the actual consideration is different from stamp duty value Amendment by Finance Bill, 2022:

  • • The Income Tax Act, 1961 provides for deduction of tax at source @ 1% where the sales consideration
    Of the property is not less than Rs. 50 Lakhs. However, section 194-IA was not consistent with the
    provisions of section 43CA and section 50C of the Act.
  • • In order to bring consistency, the Finance Bill, 2022, has proposed amendment in section 194-1A, and
    now TDS @ 1% shall be deductible on the sales consideration or the stamp duty value of the
    immovable property, whichever is higher.
  • • But where both the sales consideration as well as the stamp duty value are less than Rs. 50 Lakhs,
    no deduction of tax will be required u/s 194-IA.
  • • This amendment is effective from 01st April 2022

How and When TDS has to be paid under section 194-IA –

  • • TDS deducted u/s 194-IA is to be deposited within a period of 30 days from the end of the month in which tax is so deducted.
  • • TDS is to be deposited electronically through a challan-cum-statement in Form No. 26QB. This
    challan can be accessed at the NSDL portal.
  • • PAN of both buyer and the seller are sufficient for the purposes of Form 26QB. Other details needed
    are the details of property sold, address details of buyer and seller along with their email id and mobile numbers.
  • • The person (buyer) who has deducted & deposited tax u/s 194-1A shall issue TDS certificate in Form No. 16B to the seller within 15 days from the due date of furnishing the challan-cum-statement in Form No. 26QB.

Important Note – No TAN is required for deduction of tax at source u/s 194-1A and no filing of TDS return is required.

Penalties Applicable on non-filing of Form 26QB.

Interest on:Calculation
Non-deduction of TDS 1% per month for the period from the date on which TDS is deductible/collectible to the date on which TDS/TCS is actually deducted. 
Non-remittance of TDS1.5% per month for the period from the date on which TDS is deducted to the actual date of payment.
Late filing fee:Calculation
Late filing fee under section 234E @ Rs 200
per day 		In case of default of non-filing or late filing of Form 26QB, a penal fee is applicable under section 234E of the income tax act. Rs. 200 has to be paid for every day during which such failure continues. The buyer would also be liable for defaults of late deduction, late payment, and interest thereon. 
PenaltyCalculation
Penalty under section 271H Assessing Officer may levy penalty under section 271H at his discretion. This section is applicable when a statement as required by the tax laws is not submitted timely.
The penalty under this section must be more than Rs 10,000 and can extend to Rs 1 lakh. However, if TDS is deposited with a fee & interest and the statement is submitted within 1 year of the time prescribed, no penalty shall be levied. 
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Seeds are not agricultural Produce and should attract GST – Telangana AAR

seeds are not agricultural produce and should attract GST.

In an interesting judgement on matters related to GST on Seeds, the Telangana Authority of Advance Ruling (AAR) has considered that seeds are not agricultural produce and should attract GST.

It is probably a development that could create additional liability for the agriculture sector as “seed” will be treated separately from “grain”.

The law therefore applicable to grain and seed will be different and the concessions applicable to grain produced by a cultivator will not be applicable to seed, said the ruling in the case of “Ganga Kaveri Seeds and Narasimha Reddy & Sons”

Both the companies are supplying goods which are produced from the cultivation of plants, the AAR ruled. It said the companies were engaged in the production and sale of agricultural seeds and in the process of production they outsourced certain services such as cleaning, drying, grading, and packing to the job workers in relation to the production of seeds.

Applying the ejusdem generis principle, i.e., where general words follow a list of particular things, the general words are restricted to matters of the same kind as those specifically listed.

These rulings held that raw material used in the definition of agricultural produce is confined to food, fiber, etc., which can be consumed, and as seeds are not consumed but cultivated, and the same is liable to GST.

In the definition of agricultural produce, “raw material” is used, which is a general term and is in the company of specific words such as food, fiber, and fuel. These specific words indicate direct consumption by humans or in the industry but not in cultivation, the AAR ruled.

These specific words indicate direct consumption by humans or in the industry but not in cultivation – the supply of seed does not fall under the definition of agricultural produce as the seed does not fulfill the utilities prescribed therein.

“Auxiliary supplies” like storage of the seeds in the leased storage facility or godowns, loading, unloading, and packing of seeds on any basis are not exempt from payment of GST.

In *common parlance, one would tend to perceive seeds to be agricultural produce and hence not liable to GST.

But this is contrary to that perception. Best Chartered in Pimpri Chinchwad.

Agriculture is outside the gamut of tax framework in India for both direct and indirect tax. Tax experts said that seeds are exempt under the GST law and the agricultural produce from seeds or services in relation to agricultural produce are also exempt from GST.

Many experts pointed out that if services, in relation to the production of seeds, are brought under the GST framework, then it could impact the cost of the entire agricultural chain. This could end in an additional cost.

Important Note – While AARs are only applicable to the companies that have approached the bench, often they are taken as a precedent in the case law. In several instances in the past, the tax authorities started issuing notices following one AAR ruling.

Read Other Advance Rulings.

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A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
Phone:
+91 098231 20925
Fax:
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Email:
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Akhil Amit And Associates - Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy | Best CA in Pimpri Chinchwad | Best CA in Pune
Akhil Amit And Associates - Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy | Best CA in Pimpri Chinchwad | Best CA in Pune
5.0
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Kusum BhandariKusum Bhandari
09:15 17 Feb 22
Top CA firm for all audit , GST and Taxation work.Superb services and Mr. Akhil is very calm and knowledgeable and their team is also very professional.
Monica DhootMonica Dhoot
09:12 17 Feb 22
Absolutely hassle free tax return filing.Very satisfied with the services provided.Strongly recommend them for their prompt services and humble behavior.
v marathev marathe
06:36 29 Dec 21
Best services. Proper communication regarding audit /ITR . Prompt response of queries in professional manner. Efficient way of working.
12 - II - E - Atharva Kumbhar12 - II - E - Atharva Kumbhar
10:49 25 Dec 21
Thanks to Akhil Amit sir for nicely explained all the details and filed my ITR-V.Appriciated you good support on tax filing.
Ranjeet SinghRanjeet Singh
19:48 07 Dec 21
Would simply tell, Best ca of pune, very professional. They literally provide all the services related to finance. Good ca firm.
Aryaa DAryaa D
03:54 08 Sep 21
One of the leading Chartered accountant firm in pcmc area giving quality service assurance.Highly recommend this firm! Charges are genuine and they are providing top notch services.Also Mr. Akhil is very humble and knowledgeable.
Vilas BhoiwarVilas Bhoiwar
08:10 07 Jul 21
They are very prompt, efficient and professional. Highly recommended, fast service & great communication. Responded to my questions properly and made the whole process every easy.I appreciate the way they make it transparent. It is value for money as well. Extremely helpful and fantastic service. Highly recommend for your financial needs.
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Payment of Any Cess and Surcharge shall not be allowed as Business Expenditure

Cess-and-Surcharge

Business Expenditure shall not be allowed on payment of any Cess and Surcharge – Finance Bill 2022 makes a retrospective amendment.

The Union Budget 2022 has clarified the treatment of Cess and Surcharge and stated that the same shall be treated as tax and therefore, no deduction shall be allowed as business expenditures. While addressing the Parliament and the country during her Budget speech, Finance Minister Nirmala Sitharaman said that the Courts pronouncing contradictory verdicts are misinterpreting the legislative intent.

Section 40 of the Act specifies the amounts which shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”. Sub-clause (ii) of clause (a) of section 40 of the Act provides that any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”.

Hon’ble Bombay High Court in the case of JCIT vs. Sesa Goa Limited (2020) 117 taxmann.com and Hon’ble Rajasthan High Court in the case of JCIT vs. Chambal Fertilizers & Chemicals Ltd. decided the issue in favor of the taxpayers who were claiming the deduction on account of ‘cess’ after relying on the CBDT circular no. 91/58/66-ITJ (19) dated 18-05-1967. Based on these decisions, ITAT in various judgments has followed the same reasoning and has allowed a deduction on account of payment of “cess”.

Further, ITAT Kolkata in the case of M/s Kanoria Chemicals & Industries Ltd. ITA No. 2184/Kol/2018 (TS-1129-ITAT2021 Kol) dismissed the appeal of the assessee for allowing ‘cess’ as business expenditure based on the judgment of the Supreme Court of India in the case of “CIT vs. K. Srinivasan” that “surcharge” and “additional surcharge” are the part of income tax.

It may be seen that the interpretations of two high courts and various ITATs are against the intent of the legislature and not in line with the judgment of the Supreme Court. Hence, to clarify the position and the intent of the law, the Government has brought an amendment in the law by inserting an explanation in the law on a retrospective basis. 

Such amendment shall have retrospective effect from 1st April 2005 and accordingly apply in relation to the assessment year 2005-06 and onwards.

The Finance Bill 2022 proposes to insert the following Explanation-3 to Section 40(a)(ii) as below:

“Explanation-3- For the removal of doubts, it is hereby clarified that for the purposes of this sub-clause, the term “tax” shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax.”

Thus, the Government has made an attempt to nullify the impact of the above-quoted judgments by

This amendment will take effect retrospectively from 1st April 2005 and will accordingly apply in relation to the assessment year 2005-06 and subsequent assessment years.

We help you in simplifying Income Tax, Filing of Returns, Tax Planning, Filing of Litigations, Handling assessments, and other activities allied to the Income Tax Act, 1961. Contact Us.

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Address:
Akhil Amit And Associates – Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy
A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
Phone:
+91 098231 20925
Fax:
+91 089189 00780
Email:
office@akhilamitassociates.com
Akhil Amit And Associates - Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy | Best CA in Pimpri Chinchwad | Best CA in Pune
Akhil Amit And Associates - Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy | Best CA in Pimpri Chinchwad | Best CA in Pune
5.0
Based on 44 reviews
powered by Google
Ready to review?
Kusum BhandariKusum Bhandari
09:15 17 Feb 22
Top CA firm for all audit , GST and Taxation work.Superb services and Mr. Akhil is very calm and knowledgeable and their team is also very professional.
Monica DhootMonica Dhoot
09:12 17 Feb 22
Absolutely hassle free tax return filing.Very satisfied with the services provided.Strongly recommend them for their prompt services and humble behavior.
v marathev marathe
06:36 29 Dec 21
Best services. Proper communication regarding audit /ITR . Prompt response of queries in professional manner. Efficient way of working.
12 - II - E - Atharva Kumbhar12 - II - E - Atharva Kumbhar
10:49 25 Dec 21
Thanks to Akhil Amit sir for nicely explained all the details and filed my ITR-V.Appriciated you good support on tax filing.
Ranjeet SinghRanjeet Singh
19:48 07 Dec 21
Would simply tell, Best ca of pune, very professional. They literally provide all the services related to finance. Good ca firm.
Aryaa DAryaa D
03:54 08 Sep 21
One of the leading Chartered accountant firm in pcmc area giving quality service assurance.Highly recommend this firm! Charges are genuine and they are providing top notch services.Also Mr. Akhil is very humble and knowledgeable.
Vilas BhoiwarVilas Bhoiwar
08:10 07 Jul 21
They are very prompt, efficient and professional. Highly recommended, fast service & great communication. Responded to my questions properly and made the whole process every easy.I appreciate the way they make it transparent. It is value for money as well. Extremely helpful and fantastic service. Highly recommend for your financial needs.
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Goods and Services Tax in Singapore (GST) – Complete Guide

Goods and Services Tax in Singapore – Detailed Explanation

Goods-and-Services-Tax-in-Singapore

This article explains the Goods and Services Tax in Singapore or GST, a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), and also on supplies of goods and services in Singapore.

GST is also known as Value-Added Tax or VAT In many other countries.

Inland Revenue Authority of Singapore (IRAS) is the tax administrator and acts as the agent of the Government of Singapore. Singapore’s GST system is referred to and applauded by experts around the world.

Before we begin to discuss the concept, applicability, and procedure of GST in Singapore, let’s first understand the different taxes which contribute to revenue generation for Singapore Government.

In Singapore, Direct and Indirect tax revenue in total contributed to approximately 72% of the Government’s operating revenue (FY 2019/20). Taxes that fall within the ambit of Direct and Indirect taxes, through which government revenue is generated, include income tax, GST, Property Tax, Stamp Duty, Betting Tax, etc.

Goods and Services Tax in Singapore – Its History & Implementation.

GST was introduced in Singapore in the year 1994 @ 3% which was gradually increased to 4% in 2003, 5% in 2004, and 7% in 2007. The Government had announced in the Budget of 2018 that the standard rate will be raised from 7% to 9%, between 2021 to 2025.

However, after reviewing national revenue and expenditure projections, and considering the current state of the economy, the Government has decided that the GST rate increase will not take effect in 2021 but the same will be implemented by 2025.

Deputy Prime Minister Heng Swee Keat in a speech to round up the debate on the Government’s Covid-19 strategy said that “We will continue to study the timing of increasing the GST rate carefully, taking into account the pace of our economic recovery, our revenue outlook and how much spending we can defer to later years without jeopardizing our long-term needs.”

As per the Goods and Services Act: “A tax to be known as Goods and Services Tax shall be charged in accordance with the provisions of this Act on the supply of goods and services (including anything treated a supply) and on the importation of goods.”

All supplies of goods and services in Singapore are taxable transactions unless they are exempted.
The following points need to be considered for GST:

  • ⦁ Taxable supply is either a good or a Service. Goods are usually tangible products and services are simply defined as any action done for a consideration.
  • ⦁ Supply should be in Singapore. Goods will be regarded as supplied in Singapore if the goods are in Singapore at the time of supply. Services are considered supplied in Singapore if the person who is serving belongs to Singapore.
  • ⦁ Time of supply for both goods and services will be earlier of issue of invoice vs receipt of payment.
  • ⦁ Value of the supply is an amount on which GST is charged. Value of supply if is not for consideration in money, then it will be open market value.

GST application and procedures are conceptually quite similar to other countries; however, the specifics relating to Singapore GST are highlighted below:

1. REGISTRATION: 

The first step is to evaluate whether the business entity needs to get itself registered as a GST registered to undertake. GST is a self-assessed tax and businesses are required to continually assess whether there is a need to be registered based on the provisions of the law. GST registration falls into two categories: compulsory and voluntary. A business must compulsorily register for GST if:

  • ⦁ Taxable turnover at the end of any calendar year on or after 1 Jan 2019 is more than SGD1 million#.
  • ⦁ If at any time, it is reasonably expected that the taxable turnover in the next 12 months to be more than SGD1 million. To substantiate the expected number to reach taxable turnover, businesses should have proper supporting documents in place.

If the business is not supposed to go for compulsory GST registration, it may still choose to do so voluntarily after careful consideration. The benefit of doing so is that it can get an input tax credit that it has paid to its GST-registered suppliers. However, there will definitely be an increase in cost due to reporting and compliance requirements. So, it is prudent for companies opting for voluntary GST registration to do a cost-benefit analysis.

With effect from 1st January 2020, in case of non-registered businesses that are not entitled to full input tax credit will also have to register for GST to account for the reverse charge if the value of the imported services exceeds SGD1 million in a 12-month period.
Companies will be required to apply for GST within 30 days from the date the company falls under the above conditions. In case of late registration, IRAS may impose a fine of up to SGD10,000 & a penalty of 10% of the GST due. Prosecution action may apply too.
Business can be exempted from compulsory registration if it only makes zero-rated supplies, even though the total taxable turnover exceeds the SGD 1 million.

Note – Before Jan 2019, a business was liable to be registered if at the end of any quarter the last day of which is a day before 1st January 2019, if the total value of the taxable supplies made in Singapore in that quarter and the 3 quarters immediately preceding that quarter has exceeded SGD1 million.

The above registration procedure covers all entities. However, the law provides guidance regarding some specific entities which are as under:

  • ⦁ Overseas Entities: A non-resident entity that does not have a fixed business establishment in Singapore can also register for GST as per the above procedure. However, it has to appoint a local agent in Singapore to fulfill its GST obligations.
  • ⦁ Overseas Suppliers and Overseas Electronic Marketplaces: Overseas Suppliers and Overseas Electronic
    Marketplaces registering for GST under Overseas Vendor Registration Regime (OVR) can register directly with IRAS and they are not required to appoint a local agent. However, in case of voluntary registration, they are required to provide a security deposit.
  • ⦁ Joint Ventures (JV): In case the JV is an ACRA registered legal entity, it can be registered for GST as above. In case it is not, it can only be registered for GST if it is a distinct, organised entity with documentary evidence governing the constitution, objects, rules and activities.
  •  ⦁ Partnerships: Above JV rules apply to partnerships too.

2. APPLICABILITY: 

GST is levied on the supply of goods and services within the country, including import of goods. It is not applicable to all kinds of supplies. Taxable supplies are Standard Rated Supplies and Zero-Rated Supplies. Non-taxable supplies are exempt supplies and Out of Scope Supplies.

Before 1st January 2020, the services procured from local suppliers were subject to GST, but services procured from overseas suppliers were not subjected to GST. To make it at par, with effect from 1st Jan 2020, IRAS introduced the concept of Reverse GST, which are:
ο Reverse Charge (RC) mechanism
ο Overseas Vendor Registration (OVR) regime to tax digital services imported by non-GST registered persons (including private individuals)

Under the Reverse Charge regime:

  • ⦁ The recipient of the services will account for GST on the services he imports as if he was the supplier.
  • ⦁ He may claim GST as his input tax, subject to normal input tax recovery rules.

If a GST registered business procures services from overseas suppliers, then it will be subject to RC if:

  • ⦁ The business is not entitled to claim input tax credit in full (i.e., engaged in taxable supplies and exempt
  • ⦁ Supplies as well or carrying out non-business activities)
  • ⦁ Belongs to a GST group that is not entitled to claim input tax credit in full.

If a non-GST registered business procures services from overseas suppliers, then it would be liable for GST registration by virtue of RC if the business satisfies the below conditions:

  • ⦁ The value of imported services which are within the scope of reverse charge exceed SGD 1 million in 12 months period.
  • ⦁ The business is not entitled to claim GST credit in full.

All imported services are covered under the RC mechanism except the supplies, which are specifically exempted under GST Act.

Under the Overseas Vendor Registration regime, an overseas company is liable for GST registration in Singapore if:

  • ⦁ Annual global turnover exceeding SGD1 million and
  • ⦁ Their B2C suppliers of digital services to customers in Singapore exceeds SGD 100,000.

Under the OVR regime, supplies of digital services to consumers (i.e., individuals and non-GST registered businesses) are subject to GST. A GST-registered overseas service provider will thus have to determine if a customer is GST-registered to charge GST correctly.

3. RESPONSIBILITIES OF GST REGISTERED BUSINESS: 

In case a business is GST registered, it needs to fulfill the following responsibilities:

  • ⦁ Once a business is GST registered, it must charge GST on all taxable supplies, which is Output Tax. Any GST which the business incurs on purchases and expenses (including import of goods) is known as Input Tax. The net tax is either paid or received from the authorities.
  • ⦁ It should file GST returns either on a monthly or quarterly basis, as it has opted at the time of registration. Nil return should be filed in case of nil transaction. Failure to e-File is an offence, punishable with a fine up to SGD5,000 and in default of payment, an imprisonment term up to six months.
  • ⦁ Within one month after filing the GST return, it must pay GST to IRAS. For non/late payment, a 5% penalty will be levied on the amount of tax unpaid by the due date. An additional penalty may also be imposed.
  • ⦁ It must keep proper business and accounting records for at least five years to support GST declarations.
  • ⦁ It must display and quote prices inclusive of GST.
  • ⦁ It must always issue Tax Invoices with GST registration number.
  • ⦁ It must notify IRAS of any changes in the business name, address, financial year-end, principal activity, etc.

4. VARIOUS SCHEMES UNDER GST: 

Some of the schemes introduced by the Government of Singapore to ease cash flow for businesses and to create a pro-business environment are listed below:

  • ⦁ Discounted Sale Price Scheme allows to charge 50% GST of the selling price on a second-hand / used vehicle. No prior permission is needed from IRAS for this treatment.
  • ⦁ Gross Margin Scheme, in which GST is chargeable only on the gross margin of the goods.
  • ⦁ Hand-Carried Exports Scheme is applicable when a business wishes to zero-rate the supply made to an overseas customer and the goods are hand-carried out of Singapore via Changi International Airport.
  • ⦁ Import GST Deferment Scheme wherein GST can be paid on imports when the monthly GST returns are due instead of at the point of importation.
  • ⦁ Major Exporter Scheme is designed to ease the cash flow of major exporters who have significant imports.
  • ⦁ Tourist refund scheme allows tourists who buy goods in Singapore from participating GST registered retailers to claim a refund of the GST paid if the goods are brought out of Singapore.
  • ⦁ Cash Accounting Scheme is for small businesses whose annual sales do not exceed SGD 1 million.
  • ⦁ Zero GST Warehouse Scheme is administered by Singapore Customs. Under this scheme, import GST on non-dutiable overseas goods is suspended when the goods are moved into a Zero GST G warehouse. GST is payable only when the imported goods leave the warehouse and enter the local market.

5. CANCELLATION OF GST REGISTRATION: 

GST registration must be cancelled within 30 days when:

  • ⦁ Business stops making taxable supplies and does not intend to make taxable supplies in the future;
  • ⦁ Business has been ceased;
  • ⦁ Business is transferred as a whole to another person.
  • ⦁ Business constitution has changed (e.g., sole-proprietorship business converted to a partnership etc.).
  • ⦁ However, if a business was previously registered on a voluntary basis, it is required to remain registered for at least 2 years before cancellation.

GST in Singapore is considered being one of the best practices in the world. Singapore has only one tax rate under GST, while many other countries have multiple slabs, including India.

The GST rate in Singapore is one of the lowest in the world even if the rate is increased to the proposed 9% from the current rate of 7% (see comparative chart on the right).
Comparing the GST regime in India with Singapore, several experts were quoted citing examples of Singapore and how India should also do away with multiple tax slabs under the Goods and Services Tax for greater ease of compliance.

Singapore also topped in the research conducted by UNSW Sydney and KPMG, which considered the compliance requirements and administrative burden associated with adhering to Value Added Tax (VAT) and Goods and Services Tax (GST) rules.

Singapore GST compliance requirements are still one of the best in the world.

Contact us for GST Advisory and other GST Compliance.

Address:
Akhil Amit And Associates – Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy
A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
Phone:
+91 098231 20925
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+91 089189 00780
Email:
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18% GST On Poultry Crates, Can be treated as Article for Conveyance or Packing of Goods

GST-On-Poultry-Crates-GST-AAR

The Maharashtra bench of the Authority for Advance Rulings (AAR) has held that 18% GST on Poultry Crates can be treated as articles for conveyance or packing of goods, or plastics.

The applicant, M/s Nilkamal Ltd. has manufactured a wide range of products used in storage, handling, and transportation of goods, including products like plastic carts, poultry crates, plastic pallets, insulated iceboxes and fish tubs, waste management tools, road safety products, hospitality solutions, aquaculture fish cage, manhole chambers, ripening solutions, material handling equipment, metal shelving and racking systems.

The applicant approached the AAR bench in respect of the classification of the product “poultry crates” which is used for safe and convenient transportation of live birds.

  1. ⦁ The primary contention of the applicant is that the impugned product falls under chapter 8436 as poultry-keeping machinery because the impugned poultry crates are manufactured especially for the purpose of use in carrying and transporting live birds from farm to plants;
  2. ⦁ That they are different from ordinary crates/containers and further these poultry crates are manufactured keeping into consideration the safety, hygiene and reduce mental stress to live birds.
  3. ⦁ But the applicant has not brought out anything on record to even remotely suggest that the impugned goods can be considered as machinery.

The bench comprising Sri Rajiv Mangoo, Member, Central Tax, and Sri T. R. Ramnani, Member, State Tax held that “the impugned product-

  1. ⦁ i.e. the poultry crates, is an article of plastic.
  2. ⦁ It is used for the conveyance of poultry and, from a reading Chapter 39, it is clear that the said product is clearly covered under sub-section 392310 of the Tariff.

However, it is seen that the subject product does not fall under 39231010; 39231020; and 39231040.

Thus, the impugned product will be covered under the residual i.e. 39231090 of the Tariff and hence attract GST of 9%”.

Read Complete Order from below –

Contact us or fill out the form below if you need any advisory or support in approaching the AAR bench of GST.

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A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
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Email:
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The wait is over – TCS Buyback Details.

TCS Buyback Details, Day 1 Update, Day 2 Update –

TCS Buyback

TCS Buyback –

  • ⦁ Buyback Window Opens: 09 March.
  • ⦁ Buyback Window Closes: 23 March Settlement.
  • ⦁ Amount Credit Date: 01 April.
  • ⦁ Retail Entitlement Ratio: 6 Shares against 45 Shares (13.33%).
  • ⦁ Expected Retail Acceptance Ratio: 22 – 27%.

Day 1 Summary, Window to close on 23 March –

  • ⦁ Retail Reservation: 60,00,000 Shares.
  • ⦁ Small Shareholders on Record Date: 21,10,824.
  • ⦁ Shares Tendered in Individual Category on Day 1 – 9,10,255.
  • ⦁ Shares Number of Bids Received on Day 1 – 22,496.

Day 2 Summary, Window closes on 23 March (Expected AR – 25%) –

  • ⦁ Retail Reservation: 60,00,000.
  • ⦁ Shares Small Shareholders on Record Date: 21,10,826.
  • ⦁ Shares Tendered in Individual Category till Day 2 – 42,72,848.
  • ⦁ Shares Number of Bids Received till Day 2 – 1,15,424.

Read Older Post.

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Akhil Amit And Associates – Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy
A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
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Documents Required for GST Registration, TDS, TCS Registration

Documents Required for GST Registration, TDS Registration, TCS Registration & GST practitioner –

Following are the documents required for GST Registration based on the constitution of the Business –

GST-Registration-TDS-TCS-Registration

GST Registration Documents required by Sole Proprietorship / Individual –

  • ⦁ PAN card.
  • ⦁ Aadhaar Card.
  • ⦁ Passport-size photo of the sole proprietor (in JPEG format, maximum size–100 KB).
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.
  • ⦁ Bank account details–a copy of the cancelled cheque, the front page of passbook or bank statement – Required after obtaining GST Registration and can be updated within 180 days.

Documents required by Private Limited / Public Limited / One Person Company (Indian or Foreign) –

  • ⦁ PAN Card of the Company.
  • ⦁ Certification of Incorporation.
  • ⦁ Memorandum of Association (MOA) /Articles of Association (AOA).
  • ⦁ PAN card, passport size photograph (in JPEG format, maximum size – 100 KB) and Aadhaar card of all Directors.
  • ⦁ PAN card and Aadhaar card of the authorized signatory.
  • ⦁ Board Resolution or any other proof of appointing authorized signatory.
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.
  • Bank account details-a copy of the cancelled cheque, the front page of passbook or bank statement – Required after obtaining GST Registration and can be updated within 180 days.

Documents required by Partnership Firm/Limited Liability Partnership –

  • ⦁ Documents of Partners:- PAN Card, Passport size photograph (in JPEG format, maximum size–100 KB) and Address Proof of Partners.
  • ⦁ Partnership Deed/LLP Deed.
  • ⦁ PAN card of firm.
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.
  • ⦁ Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement – Required after obtaining GST Registration and can be updated within 180 days.
  • ⦁ Additional documents in case of LLP–
  • ⦁ i. Copy of Board Resolution.
  • ⦁ ii. Registration Certificate of the LLP.
  • ⦁ iii. Proof of appointment of authorized signatory (Digital Signature Certificate of the designated partner).

GST Registration Documents required by HUF –

  • ⦁ PAN card of HUF
  • ⦁ PAN Card and Aadhaar card of Karta
  • ⦁ Passport size Photograph of Karta (in JPEG format, maximum size–100 KB).
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.
  • ⦁ Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement – Required after obtaining GST Registration and can be updated within 180 days.

Documents required for Society or Trust or Club –

  • ⦁ Pan Card of society/Trust/Club
  • ⦁ Registration Certificate of society or club
  • ⦁ Passport size Photograph and PAN Card of Promoter/ Partners (in JPEG format, maximum size–100 KB).
  • ⦁ PAN card and Aadhaar card of the authorized signatory.
  • ⦁ Board Resolution or any other proof of appointing authorized signatory
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.
  • ⦁ Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement – Required after obtaining GST Registration and can be updated within 180 days.

Documents required for GST practitioner –

  • ⦁ Photo of the applicant (in JPG format, maximum size–100 KB).
  • ⦁ Address proof of place where professional practice takes place.
  • ⦁ Proof of qualifying degree (Degree certificate).
  • ⦁ Pension certificate (only in case of retired Government officials).

Documents required for TDS registration under GST – (For deducting tax at source)

  • ⦁ Photo of drawing and disbursing officer (in JPG format, maximum size–100 KB)
  • ⦁ PAN and TAN number of the person being registered
  • ⦁ Photo of authorized signatory (in JPG format, maximum size–100 KB)
  • ⦁ Proof of appointment of authorized signatory
  • ⦁ Address proof of tax deductor.

Documents required for TCS registration under GST – for collecting tax at source (E-commerce operators)

  • ⦁ PAN number of the person being registered.
  • ⦁ Photo of authorised signatory (in JPG format, maximum size–100 KB).
  • ⦁ Proof of appointment of authorised signatory.
  • ⦁ Registered Office Address proof:-
    • 1. Self-owned property–Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
    • 2. Rented property–Rent agreement and No objection certificate (NOC) from the owner of the rented property.

FAQ

Q) For whom GST registration is compulsory?

Ans) Posted Separately.

Q) Do We Provide GST Registration Service & other services we provide in respect of GST?

Ans) Yes, we provide GST Registration, GST Advisory, GST Returns, GST Annual Return, GST Refund, Filing of Litigations, handling of assessments under GST, and many more.

Q) Official Website for GST Registration?

Ans) https://www.gst.gov.in/

Contact us for the GST Registration, GST Advisory, GST Returns, GST Annual Return, GST Refund, Filing of Litigations, and handling of assessments under GST, or fill a quick form below and our team will get back to you.

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Akhil Amit And Associates – Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy
A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
Phone:
+91 098231 20925
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Email:
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Limited Liability Partnership (Second Amendment) Rules, 2022

Limited Liability Partnership (Second Amendment) Rules, 2022 – MCA Notifies

The Ministry of Corporate Affairs (MCA) vide its Notification dated 04th March 2022 has notified Limited Liability Partnership (Second Amendment) Rules, 2022 to amend the existing Limited Liability Partnership Rules, 2009, which shall come into force on the date of its publication in the Official Gazette.

Read Notification From Below –

Limited Liability Partnership (Second Amendment) Rules, 2022

G.S.R. . (E).–In exercise of the powers conferred by sub-sections (1) and (2) of section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby makes the following rules further to amend the Limited Liability Partnership Rules, 2009, namely:–

1. Short title and commencement. –

(1) These rules may be called the Limited Liability Partnership (Second Amendment) Rules, 2022. Limited.

(2) They shall come into force from the date of its publication in the Official Gazette. 2. In the Limited Liability Partnership Rules, 2009 (hereinafter referred to as the said rules), in rule 11,-

(a) in sub-rule (1), in the second proviso, for the word “two’, the word “five” shall be substituted;

(b) in sub-rule (3), after the word and figures “Form 16.”, the following words shall be inserted, namely:- “and shall mention Permanent Account Number and Tax Deduction Account Number issued by the Income Tax Department’.

In rule 19 of the said rules, for sub-rule (4), the following sub-rule shall be substituted, namely:-

” (4) The person making the application shall attach a copy of the incorporation certificate of the limited liability partnership or the company or the registration certification of the entity, as the case may be.”.

4. In rule 24 of the said rules, for sub-rule (6) of, the following sub-rule shall be substituted, namely:-

“(6) Statement of Account and Solvency shall be signed on behalf of the limited liability partnership by its designated partners. Where the corporate insolvency resolution process has been initiated against the limited liability partnership under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) or the Limited Liability Partnership Act, 2008 (06 of 2009) has come under liquidation under the said Code, 2016 or the said Act, 2008, the said Statement of Account and Solvency may be signed on behalf of limited liability partnership by interim resolution professional or resolution professional, or liquidator or limited liability partnership administrator. “.

5. In rule 25 of the said rules, for sub-rule (2) of, the following proviso, shall be inserted, namely:-

‘ Provided that where the corporate insolvency resolution process has been initiated against the limited liability partnership under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) or the Limited Liability Partnership Act, 2008 (06 of 2009) having turnover up to five crore rupees during the corresponding financial year or contribution up to fifty lakh rupees has come under liquidation under the said Code, 2016 or the said Act, 2008, the said annual return may be signed on behalf of limited liability partnership by interim resolution professional or resolution professional, or liquidator or limited liability partnership administrator and no certification by a designated partner shall be required?

6. In rule 34 of the said rules,-

  • (a) in sub-rule (3), in clause (ii), in sub-clause (c), for the word and figures ‘Form 29’, the word and figures “Form 28” shall be substituted;
  • (b) in sub-rule (8), for the word and figures “Form 29”, the word and figures “Form 28′ shall be substituted;

7. In rule 36 of the said rules, in sub-rule (6), after the word, brackets, and figure “sub-rule (7)”, the words and figures In Form 32′. shall be inserted; 8. In rule 37 of the said rules, in sub-rule (1A), in clause (II), for the words and figures “enclose along with Form 24′, the words and figures “furnish in Form 24” shall be substituted.

8. In rule 37 of the said rules, in sub-rule (1A), in clause (II), for the words and figures “enclose along with Form 24′, the words and figures “furnish in Form 24” shall be substituted.

Download Complete Notification

Effect of the notification in simple language-

Limited Liability Partnership (Second Amendment) Rules, 202

 1. There can be 5 Designated partners (without having DIN) at the time of Incorporation. (Earlier 2 was allowed)

 2. LLP Formation Process became web-based, just like the SPICE Forms for company formation.

 3. Director’s Details can be fetched from Digi Locker Database.

 4. PAN TAN of LLP will be available along with LLP Incorporation similar to the company.

 5. All Forms of LLP have now become web-based.

 6. Each and every change in LLP Deed will have to be marked in Form 3 with precise information.

 7. Web-Based Form 9 Consent of Partners is implemented. Resultantly, all Designated Partners Digital Signatures will be required.

 8. Place of maintenance of accounts other than Registered Office – Form 12 is notified.

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Akhil Amit And Associates – Income Tax, GST, Audit, FEMA, Company Law, Finance & RERA Consultancy
A8, First Floor, Om Sai Market, Above Cotton King, Near Sane Chowk, Krishna Nagar, Chikhali Akurdi Road, Chinchwad,
Pimpri Chinchwad
Pune, Maharashtra 411019
 
Phone:
+91 098231 20925
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