RPMD & Associates

RPMD & Associates Chartered Accountant Firm in New Delhi, India RPMD & Associates, a chartered accountant firm, is registered with The Institute of Chartered Accountant of India.

We, at RPMD, are engaged in providing Chartered Accountancy Services, Financial and Consultancy Services, Auditing Services, Business process outsourcing services, Services related to Taxation Matters etc

Our aim is to provide timely services while continuously adding value to whatever we serve. The work is done up to the high level of professionalism and excellence.

01/06/2019

Whether the entities making only exempted supplies is liable to get registered under GST in pursuance of Section 24?

This question came up before the Hon’ble Authority for Advance Rulings, Kerala IN RE: M/S. MEDIVISION SCAN AND DIAGNOSTIC RESEARCH CENTER (P) LTD.
Before proceeding to the question in hand, it is imperative to look into the relevant statutory provisions of the CGST Act. For the purpose, let us go through the Chapter VI of the CGST Act and some of its sections which relates to the registration under the Act.
Section 22 – Person liable for registration
Section 23 – Person not liable for registration
Section24 – Compulsory Registration in certain cases.

For the sake of clarity in discussion, the understanding of these provisions may be divided in two parts:

First Part - Section 22 vis-à-vis Section 23
Second Part - Section 22 and 23 vis-à-vis Section 24

First Part
Section 22 – Person Liable for registration
This provision of the Act mandates the requirement of registration if the aggregate turnover in a financial year exceeds Rs. 20 Lakhs (Rs. 10 Lakh in special category States).
Section 23 – Person not liable for registration
Section 23 exempts the person from taking registration if such person is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt under the CGST Act or IGST Act
Hence, a person dealing exclusively in exempted goods or services are not required to take registration irrespective of the aggregate turnover in financial year.
Section 23 is a separate code than Section 22. Both operate individually in their domain. Section 22 mandates to take registration if the aggregate turnover in a financial year exceeds Rs. 20 Lakhs irrespective of the fact whether such turnover include taxable supplies or exempt supplies. Whereas section 23 specifically exempts person from taking registration if such person are exclusively dealing in exempted goods or services or both.
Section 23 is specifically granting exemption from registration to persons exclusively engaged in making exempt supplies even if the aggregate turnover is more than Rs. 20 Lakhs. So it can be said that even if there is no non-obstante clause in Section 23, section 23 overrides Section 22. Also the rule of harmonious interpretation will arrive at the conclusion wherein section 22 is concerned about the persons whose aggregate turnover is more than Rs. 20 Lakhs while Section 23 is exempting entities engaged exclusively in making exempt supplies.

From the above discussion, it may clearly be understood that the person who is engaged exclusively in making exempt supplies is not liable for registration even if his aggregate turnover exceeds Rs. 20 Lakhs.

Second Part
Section 24 reads as under:
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––

(i) persons making any inter-State taxable supply;
……………
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.

Section 24 starts with a non-obstante clause overriding section 22(1) and making mandatory for persons to obtain registration if they enter into any transaction as listed in clause (i) to clause (xii).
So, a person with a turnover of less than Rs. 20 Lakhs will also be required to get registered under the GST Act if he falls into the category of person as mentioned in Section 24.
For Ex. (1) A person who is making inter-state supply will be required to get registered even if his turnover is less than Rs. 20 Lakhs. (2) A person who is receiving any goods or services on which tax is payable on reverse charge basis, shall be registered irrespective of the quantum of turnover.

What is interesting to note here that the Section 24 overrides Section 22(1) with the non-obstante clause mentioned in the section itself. However, the legislature intentionally chose not to allow Section 24 to override Section 23 as Section 23 is not mentioned in the non-obstante clause of Section 24.
Hence, section 24 is not applicable to the person who has been given exemptions from registrations under section 23. Section 24 which comes after section 23 is overriding only section 22(1) and not Section 23, which shows the intention of the legislature.
Redrafting the above example, it can be said that (1) a person who is exclusively engaged in making exempt supply can make inter-state supply and retain his exemption from registration without falling prey to the provisions of Section 24. (2) A person who is exclusively engaged in making exempt supply can receive supplies on which tax is payable on reverse charge basis and will not be liable for registration.

This question came up before the Hon’ble Authority for Advance Rulings, Kerala IN RE: M/S. MEDIVISION SCAN AND DIAGNOSTIC RESEARCH CENTER (P) LTD.

Hon’ble AAR, Kerala, in this case, held that “
By virtue of Section 23 of State Goods and Services Tax Act, any person engaged exclusively in the business of supplying goods or services or both, that are not liable to tax or wholly exempt from tax under GST Act, are not liable to take registration. However, such persons are liable to obtain registration if they are receiving any goods or services liable to tax under reverse charge as per notifications issued under Section 9(3) of the State Goods and Services Tax Act.”

The Hon’ble AAR, Kerala held that the person is engaged exclusively in making exempt supplies and is exempted from registration as per Section 23. However, the AAR mandated such person to obtain registration if they are receiving any goods or services which are liable to tax under reverse charge.

Conditions for Mandatory registration even if turnover is less than Rs. 20 Lakhs is mentioned in Section 24 which over rides Section 22(1) only. Section 24 has no over-riding effect on Section 23. Section 23 is a separate section, which is independent of Section 22 and Section 24.

In my humble opinion, the decision given by the Hon’ble authority is not in accordance with the provision of law and may require reconsideration.

12/01/2015

Portfolio Management

INTRODUCTION
Generally, most people earn a large portion of their total net income through employment income. However, disciplined saving is necessary for after retirement everyday expenditure and under risk of future uncertainty & growing inflation only savings cannot yield a reasonable income thus, investment in the financial markets can grow moderate savings into large investment portfolios, yielding an investor a large annual investment income.
Now you must be wondering what a portfolio is and how it is managed….
PORTFOLIO MANAGEMENT
Portfolio is a group of financial assets such as shares, stocks, bonds, debt instruments, mutual funds, cash equivalents, etc. A portfolio is planned to stabilize the risk of non-performance of various pools of investment.

Whereas, Management is the organization and coordination of the activities of an enterprise in accordance with well-defined policies and in achievement of its pre-defined objectives.
Thus, Portfolio Management guides the investor in a method of selecting the best available alternative that will provide the expected rate of return for any given degree of risk. It is a strategic decision which is addressed by the investor or portfolio managers.

AREA’s OF INVESTMENT
By reading the definition of portfolio a clear-cut picture of financial assets must be in your mind. However to elaborate, financial assets consist of:-
• Shares: - Stocks are also a viable investment option that can give the investors huge returns if the investment is done carefully. There are so many factors that make the share market a chosen area of investment for millions of investors. Stocks can give multiple returns on investment that no other asset class can match. If you can invest wisely in the potentially strong stocks, you are all set to gain hugely from your investment. But In addition to this it involves higher risk & is usually preferred by those investors who can undertake huge risk. One can buy and sell listed shares through stock exchange

• Mutual funds: - It involves investing in those funds which pool investor’s money and invest them in Diversified portfolio. E.g.: - Equity (Growth) Schemes, Income Schemes, Money Market Schemes, Tax Saving Schemes, Balanced Schemes, etc. Due to the diversity in the fund risk is minimized. These investments usually have lower yield than equity since the risk involved is lower.


• Bonds: - Generally known as debentures in India, Many people invest in bonds for regular interest income and also to preserve their capital investment. Understanding the role bonds play in a diversified investment portfolio is especially important for retirement planning. Since these plans offer greater freedom to an individual in selecting from a range of investment options, for e.g. -. Whatever the purpose—saving for your children’s college education or a new home, increasing retirement income or any of a number of other financial goals—investing in bonds may help you achieve your objectives. Usually Traded in Stock exchanges. It may either be issued by any corporate house or Government. The rate of risk is lower in Government Bonds in comparison to Non-Government bonds.
Usually bond is of two types
Coupon bonds, carrying interest.
Deep Discount bonds e.g. Zero coupon bond issued by IDBI at a price of Rs 2,700 per bond and on maturity in 2017 Rs 1 lakh was payable.

Q- Have you ever imagined what is the rate of return expected by investors at current inflationary rates?

Ans : -Rate of India Government Bond 10Y denotes the current rate of return expected by investors at current inflationary rates

• Currency market : - In present scenario, companies are facing huge losses in currency market, when they are liable to any foreign payments & in case rates of that currency rises, the payer will be at huge loss. He can easily avoid this loss- if he thinks that rates are going to rise in future, purchase the currency today, to avoid huge losses. Therefore often big companies enter into hedging contracts to avoid such losses.
Other forms of investments are
• Future market
• Systematic investment plans(SIP’s), etc

Further, classification can be made on the basis of Risk involved in various securities:-
• Investments involving higher risk,
• Investments involving lower risk
• Hybrid securities( having features of both )

ROLE OF CHARTERED ACCOUNTANTS IN PORTFOLIO MANAGEMENT
Investors readily invest in the financial markets but they face certain problems such as lack of time & knowledge, hence financial professionals I, e, Portfolio managers are appointed by broker company to carry out market research and assist the investors. These professionals are also given the biggest role- managing a mutual fund. Managing a mutual fund is an prime area to earn money. It can be only done by a professional acquainted with knowledge of financial management.
Thus, only a Chartered accountant or an MBA can work in this field. Chartered accountants have already proven themselves in Auditing as well as in Taxation field. Chartered Accountants learn financial management at Intermediate level (Financial Management) as well as at Final level (Strategic Financial management). In conclusion, Chartered Accountant’s have major role to play in area of Market research & Portfolio management. In fact, the top mutual fund brokers are Chartered Accountants.

- Written by Arindam Shukla
[email protected]
+91 – 8470067179

Income – Tax – DeductionsINTRODUCTIONOften you find yourself holding your Income in one hand and Taxes in other. Income ...
12/01/2015

Income – Tax – Deductions
INTRODUCTION
Often you find yourself holding your Income in one hand and Taxes in other. Income Tax Deduction is one such aspect which is ignored by large.
What if you can replace your taxes with deductions (Income Tax Deductions)? Wouldn’t it be a win-win situation for you!
People are unaware of the fact that the area which is neglected by them can save them from the pain of paying taxes. If not zero, they can certainly bring down their taxes substantially.
WHY DEDUCTIONS ARE IGNORED?
Reason for ignorance among masses is that it (Income Tax Deductions) seems too complex with sections, law and technical words involved. Common man doesn’t wants to get into this mess. People feel better off by spending their time, focusing on how to earn more money rather than getting into this deductions’ swamp.
TABULAR PRESENTATION OF INCOME TAX DEDUCTIONS
Therefore, to get you out of this chaos and simplify your thoughts, deductions are presented in explicable format as under. (Attached).

SHIFT IN PARADIGM
Gradually people are learning the importance of saving money and they are realizing that saving money for future is equally important like earning money in present. An old saying, ‘A Penny saved is a penny earned’ gives you an insight of saving money. Claiming income tax deductions doesn’t only saves you taxes but also induces a habit of saving in you.
I have a question here. Why people view income tax deductions just as a tool of saving taxes?
Sometimes, what we see is not what it’s like. We need to get out of this narrow thinking and join a broader perspective. Deductions not only save you taxes but also earn you an extra income, if not today than certainly tomorrow.

ROLE OF CHARTERED ACCOUNTANT
You take care of your business and we will take care of you and your income. That’s what a Chartered Accountant believes.
A Chartered Accountant can give you expert advice that no layman can give. We know the intricacies involved in laws and taxes and who better than a CA itself, can serve you better.
If you still find income tax messy, we are here for you.
If you are focused on saving taxes and don’t know how, we are here for you.
If you want to earn and save money at the same time but don’t know how, we are here for you.
If you have any reservations or doubts on income tax, we are here for you.

CONCLUSION
Future is uncertain and our present deeds must be done not only taking care of our present but also our future. People must do what they are good at i.e. managing their business or outperforming in their jobs. And let your income tax worries be handled by an expert, a chartered accountant.
- Written by Rohit Pandey
[email protected]
+91 – 9654 984 622

12/01/2015

Goods and services tax
(The major tax reform since independence)
• OVERVIEWOF GST:
This is one of the major taxation reforms in Indian taxation system.GST is set to integrate all state economies and increase the overall growth of the country.GST will create unified market and boost the Indian economy. The goods and service tax (GST) is a value added tax to be implemented in India the decision on which is pending.
• How GST works:
It is a comprehensive tax levy on manufacturing, sale and consumption of goods and rendering of services at national level. The centre would levy and collect central goods and services tax (CGST).The state would levy and collect state goods and services (SGST).The centre would also levy and collect the integrated goods and services tax (IGST). This works something like that tax is collected on valued-added in goods and services at each stage of sale or purchase in the supply chain. The system allows set-off of taxes paid at earlier stage in the supply chain. However the ultimate burden of tax falls on final users of goods and services. Because every seller of goods and services recovers the tax from the buyer. But the ultimate users are not in a position to resell the goods and services and recover the tax.
• WHY GST:
1. The present taxation system is like that there is no credit mechanism in between taxes levied by state and the centre.
2. Administration mechanism of the centre and states in some states are different.
3. Sum of multiple taxes like VAT, CST, entertainment tax etc.
• Tax rate under GST:
The GST rate is still not decided. Probably the rate will be around 20%.In addition the proposed:
Tax rate on necessary goods is kept low.
Tax rate on general segment goods is kept medium.
And higher tax will be charged on premium segment goods.
• Taxes and duties which will merged under GST:
Following duties and taxes are merged under GST:
1. Value added tax.
2. Central sales tax.
3. Entertainment tax.
4. Excise duty.
5. Service tax.
6. Additional custom duty (CVD).
7. Special additional custom duty (SAD).
8. And some other taxes.

• Benefits of GST:
1. More transparency in the taxation system.
2. Lower working capital.
3. Return file for less number of times.
4. Increase the growth of country.
5. Lower tax on necessary goods.
Comparison between pre and past GST scenarios:
In the present taxation system various taxes are levied on goods and credit one tax paid is not allowed as set-off for other.
But on the application of GST all these taxes will be merged in a single tax called Goods and Services Tax. And taxes paid at one stage are allowed as sett-off on other stage.
Conclusion:
All goods and services, except alcoholic liquor for human consumption, will be brought under under the purview of GST. However, it has also been provided that petroleum products shall not subject to the levy of GST. It a transparent tax as business premises can show can show the tax imposed in the sales invoice while consumers will know exactly how much tax he or she is paying on the ‘goods bought and services rendered’.

By Vivek Chaudhary

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Link Road
Delhi
110088

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