Respected Professional Colleagues,

One of the biggest reforms has been rolled out with effect from 1st July, 2017. In the words of our PM, it is indeed a turning point in the country’s economy and unprecedented moments in the country’s history. It is a tax reform based on processes and compliances. It is a technology driven process. There are various teething problems and hardships being faced by the stakeholders. Some of them are:

a) No cancellation utility has been provided by GSTN till date. By mandate, many traders and service providers, registered under the concerned VAT Act have been migrated under GST law w.e.f. 1-7-2017. They want to surrender their registration number under GST due to their turnover being less than threshold limit but no utility for cancellation is available on GSTN portal and they are made to compulsorily file the GST return in Form 3B.

b) There is no provision for amendment or rectification in Form 3B. Once the error is committed that is perpetuated to the disadvantage of the dealer.

c) Composition dealers under earlier regime have been migrated to GST regime under regular scheme but no option is provided to revert back to composition scheme due to technical glitch in GSTN.

d) Registered suppliers who wish to change their registration particulars due to change of address, constitution etc. cannot file amendment applications despite the fact that under the GST law they are bound to file the same within 30 days from the date of change, as correction / amendment utility is not available on GSTN portal.

e) Filing of First Appeal against rejection order on fresh registration application is not provided so far.

f) There is a very poor response on the part of Department though repeated e-mails are sent to GSTN and phone calls are made to help desk.

g) Utility of filing TRAN-1 Form is made available only on 21-8-2017 i.e., 52 days late from 1-7-2017 whereas last date for filing Form 3B is 28-8-2017. Thus a very short time is given to submit the details.

h) That the rates of many items are not yet cleared.

i) As per order-dated 18-6-2017, it was promised that no penalty would be levied but returns are not accepted without deposit of fee.

j) The provisions of Section 9(4) of CGST Act are to be relooked as these are not revenue yielding at all rather these are against the spirit of SCST and are killing the small businessmen who are under the threshold limit.

Our Federation has filed a detailed representation to Hon’ble Prime Minister and Hon’ble Finance Minister, pointing out all the difficulties and also requesting for extension of time for filing GSTR 3B as the substantial part of the country is suffering from floods. It is also pointed out that in order to achieve object of ease of doing business, the filing of returns be made quarterly though the tax may be monthly paid by due date. We hope that the Government will look into these problems and sort out them.

Now looking to the present situation, Government has issued Notification Nos. 30 & 31 of 2017 on 11th September 2017 and has sympathetically considered the entire position and has extended the date of filing of return as under:

Sl. No.	Details/return	Class of taxable/registered persons	Time period for furnishing of details /return
(1)	(2)	(3)	(4)
1.	GSTR-1	Having turnover of more than one hundred crore rupees	Up to 3rd Oct. 2017
		Having turnover of up to one hundred crore rupees	Up to 10th Oct. 2017
2.	GSTR-2	All	Up to 31st Oct. 2017
3.	GSTR-3	All	Up to 10th Nov. 2017

Similarly, Government has also extended the time limit for furnishing the return by an input service distributor u/s. 39(4) of CGST Act read with Rule 65 of CGST Rules, 2017 for the month of July 2017 up to 13th October, 2017. Government has also clarified that the date for filing the return for the month of August, 2017 u/ss. 37(1), 38(2), 39(1) and 39(4) shall be notified subsequently.

Friends, I may also apprise you that our Government is determinate and taking stern action to fight black money and to fight the menace of shell companies. It is stated that the fight against black money shall be incomplete without breaking the network of shell companies. Ministry of Corporate Affairs, Government of India has released one press information dated 12-9-2017 that in pursuant to the action of the Ministry of Corporate Affairs of cancellation of registration of around 2.10 lakh (2,09,032) defaulting companies and subsequent direction of the Ministry of Finance to banks to restrict operation of bank accounts of such companies by the Directors of such companies or their authorised representatives, the Ministry of Corporate Affairs has identified 1,06,578 Directors for disqualification u/s. 164(2)(a) of the Companies Act, 2013 as on September 12, 2017.

It may be recalled that as per Section 164 of the Companies Act 2013, any person who is or has been a Director in a Company which has not filed financial statements or annual returns for any continuous period of 3 financial years shall not be eligible for reappointment as a Director in that company or appointed in other company for a period of 5 years from the date on which the said company fails to do so. Also, Section 248 of the Act provides that the liability, if any, of every Director, Manager or other Officer who was exercising any powers of management and of every member of the deregistered, dissolved company shall continue and may be enforced as if the company had not been deregistered / dissolved. Further, Section 167 of the Act provides that on suffering the aforesaid disqualification, the Director shall vacate the office.

Friends, last but not the least we have just concluded our two-day Conference at Kolkata on 2nd & 3rd September 2017. Special thanks to Mr. R. D. Kakra and the entire East Zone Team for the success of this Conference which came as a “Sanjeevani” to all the stakeholders in the GST regime. Now I am inviting you all at Mangaluru on 4th & 5 November, 2017 and the unique feature of the Conference is that we are celebrating a Foundation Week, reminding you that AIFTP is entering into its 42nd year.

With these words, I conclude my communiqué with a sincere advice:

“Fill the brain with high thoughts, highest ideals, place them day and night before you and out of that will come a great work.”

With Best Regards,

Prem Lata Bansal
National President

Applicability of ICDS from Assessment Year 2017-18

The Ministry of Finance vide Notification No. 87/2016 dated 29-9-2016 notified ten Income Computation and Disclosure Standards (ICDSs), operationalising a new framework for computation of taxable income by all assessees (other than individual or a HUF who is not required to get his accounts of the previous year audited in accordance with the provisions of Section 44AB of the Income-tax Act, 1961) following the mercantile system of accounting for the purpose of computation of income under the heads “Profits and Gains of Business or profession” or “Income from Other Sources”. These standards became applicable w.e.f. April 1, 2016 and shall apply accordingly to the Assessment Year 2017-18 and subsequent assessment years. These ICDSs will be a new paradigm for computing taxable income of the assessee. Taxable profits would now be determined after making appropriate adjustments to the financial statements [whether prepared under existing AS or Ind-AS] to bring them in conformity with ICDSs.

Winds of change are moving fast for all businesses and professions in the world. Therefore, with the changing environment, knowledge, efficiency, performance and skills of our members need to be continuously enhanced and sharpened to enable them to succeed in this competitive business environment.

Continuous amendments have also been made in taxation laws which have rendered it necessary for members to update themselves with the legislative changes. One of the recent amendments brought in by the CBDT during the year 2015 was the notification of ten Income Computation and Disclosure Standards (ICDSs) vide Notification No. 32/2015 dated 31st March, 2015. Although, the said notification dated 31st March, 2015 was rescinded on 29th September 2016 vide Notification no. 86/2016, yet on the same date, ten revised ICDSs were notified vide Notification No. 87/2016. These ICDSs will have a significant impact on computation of taxable income. Therefore, the members need to be apprised about the change so that their knowledge and skills may be enhanced to the level where they can cater to the needs of their clients efficiently.

The ten ICDSs notified by the CBDT vide notification no. 87/2016 dated
29-9-2016 are to be followed by all assessees (other than individual or an HUF who is not required to get his accounts of the previous year audited in accordance with the provisions of Section 44AB of the Income-tax Act, 1961) following mercantile system of accounting, for the purposes of computation of income chargeable to income tax under the head “Profits and Gains of Business or Profession” or “Income from Other Sources”. The said notification shall apply to the assessment year 2017-18 and subsequent assessment years. The said notification has raised various concerns regarding the applicability, interpretation, implementation and impact of ICDSs on the taxability of an assessee, especially since these are applicable to almost all persons including small businesses and proprietorship concerns.

Undoubtedly, the ICDSs are a significant step forward in the process of bringing computational discipline among taxpayers of all classes and ensuring uniformity and clarity in computation and reporting of taxable income. The ICDSs are a positive attempt at reducing litigation by providing stability and certainty in tax treatments of various items. The implementation of ICDSs is a significant development in light of notification of Ind-AS as it is intended to provide an equitable and uniform tax structure for Ind-AS compliant companies and other taxpayers following the existing Accounting Standards issued by ICAI.

However, the ICDSs require maintenance of information in a systematic manner for items which have a year-on-year impact (e.g., valuation of closing stock-in-trade), even for small taxpayers. This requires elaborate modifications in the information systems employed by small taxpayers, more so because, practically, each and every transaction can undergo a change in view of ICDS.

The implementation of ICDS will go a considerable way in bringing uniform and equitable tax treatment, but the applicability and interpretation of various provisions of ICDS may raise many issues.

H. N. Motiwalla

Joint Editor