GST on advances received for future supplies

Dear Esteemed Professional Colleagues,

Greeting of the day!

Friends today i am writing about most important topic of GST i.e. GST on advance receipts. Point wise discussion is as below:

 1. Time of supply: 

  1. Time of supply is earliest of following:
    a) At the time of receipt or payment; or

    b) At the time of issue of invoice

    Accordingly, GST needs to be paid with reference to the time at which advance is received.
    Example:
    An advance of Rs. 20 lacs is received for a supply worth Rs. 1 crore to be made in future. The time of supply to the extent of advance received i.e. Rs.20 lacs shall be at the time of receipt of advance and for the balance amount of Rs. 80 lacs, it shall be determined with reference to date of issue of invoice and other parameters.

    2.Taxability of Advance payment on the basis of GST registration is as under:

    There can be basically 2 types of Registration under GST act
     (A) Composition Scheme
    (B)  Non composition/Regular Scheme

  (A) In case of Composition Scheme:

A Composition dealer is governed by Section 10 of the Act. Composition dealer will not have to pay any tax on advances received, if such advances pertain to his outward supplies. The advances received and goods returned do not form part of taxable supplies and do not form part of the turnover in a state at the end of the quarter (tax period) for the purpose of computing turnover in a state.

 (B) In case of Non composition/Regular Scheme:

If supply is of :

(I) Goods:

(i) exempted from paying GST on Advances received under Notification no. 66/2017 dated 15.11.2017

(II) Services:

(i) GST is to be paid at the time of receipt of advances

3. Nature of Supply and Tax rate (RULE 50):

If Nature of Supply is not Determinable then

(i) It should be treated as inter state supply & GST should be paid accordingly.(ii)Tax rate should be taken as 18%.

 4. Some other Compliances under GST:

As per Section 31 (3) (d) of the CGST Act, 2017, a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment; The receipt voucher shall contain the particulars as contained in Rule 50 of the CGST Rules, 2017 which are as follows:

a) name, address and Goods and Services Tax Identification Number of the supplier;

b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;

c) date of its issue;

d) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient;

e) description of goods or services;

f ) amount of advance taken;

g) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

h) amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);

i) place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce;

j) whether the tax is payable on reverse charge basis; and

k) signature or digital signature of the supplier or his authorized representative.

5. Situations wherein after receiving Advance payment the supply is subsequently not made and the amount of  such advance is to be refunded back:

 If Tax invoice is:

(a) Issued :

(i) Credit note should be issued to square off transaction (Sect 34 read with rule 54)

(b) Not issued:

(ii)Advance taken can be refunded & a refund voucher needs to be created

The refund voucher shall be as per Rule 51 of the Rules ibid and shall contain following particulars:

a) name, address and Goods and Services Tax Identification Number (GSTIN) of the supplier;

b) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters’ hyphen or dash and slash symbolized as “-” and “/” respectively, and any combination thereof, unique for a financial year;

c) date of its issue;

d) name, address and Goods and Services Tax Identification Number (GSTIN) or Unique Identity Number registered of the recipient;

e) number and date of receipt voucher issued in accordance with the provisions of rule 50;

f) description of goods or services in respect of which refund is made;

g) amount of refund made & rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

h) amount of tax paid in respect of such goods or services (central tax, State tax, integrated tax, Union territory tax or cess);

i) whether the tax is payable on reverse charge basis; and

j) signature or digital signature of the supplier or his authorized representative.

As per Rule 56(3) of the Rules, every registered person shall keep and maintain a separate account of advances received, paid and adjustments made thereto.

Table 11 of GSTR 1:

Consolidated Statement of Advances Received/Advance adjusted in the current tax period/ Amendments of information furnished in earlier tax period: Rate wise and intra/interstate wise

Table 11A of FORM GSTR-1 captures information related to advances received, rate-wise, in the tax period and tax to be paid thereon along with the respective place of supply (POS). Table 11B captures adjustment of tax paid on advance received and reported in earlier tax periods against invoices issued in the current tax period. The details of information relating to advances would be submitted in Table 11A only if the invoice has not been issued in the same tax period in which the advance was received. Whereas adjustments made in respect of advances received during the earlier tax period, but invoices issued in the current tax period would be reflected in Table 11B.

My brief Intro:

Myself CA Lalit Aggarwal. I am a part of managing committee of Gurugram branch for tenure 2016-19. I am also founder member of Team “Connecting CAs”. I am re contesting the upcoming election of Gurugram branch of NIRC of ICAI to be held on 16th Feb’19 (Saturday). My brief profile and work executed in last tenure (2016-2019)  under Gurugram branch are enumerated below:

Slide1

Key Points In Creation Of HUF, Tax saving in HUF AND Format of Affidavit for HUF creation and for apply PAN of HUF

KEY POINTS IN CREATION OF HUF AND FORMAT OF DEED/AFFIDAVIT FOR CREATION OF HUF:

  • Under the Income Tax Act, an HUF is a separate entity for the purpose of income tax return.
  • The same tax slabs are applicable to HUF as to individual assessee.
  • You can not transfer your own assets/money into HUF.
  • If you have ancestral property and earning some income from this property, then it is better to transfer this asset to HUF and save tax up to exemption limit applicable to individual.
  • You can transfer the money received on sale of ancestral property /assets into your HUF.
  • The income from property of HUF can be further invested in instruments such as shares, mutual funds, etc. and will be assessed under HUF.
  • Existence of property or multiple members is not a pre-requisite to create HUF. A family which does not own any property may still have the character of Hindu joint family. This jointness is understood in terms of faith and food. This is because as a Hindu is born as a member of the joint family.
  •  Any gifts received by the members of HUF (birthday, marriage, etc.) can be treated as assets of HUF.
  •  The HUF is taxable as separate person under income tax hence one can save tax from basic exemption of Rs. 2.50 lakh. HUF will also gain from the tax slab structure of computing income tax.
  • Apart from basic exemption of Rs. 2.50 lakh, section 80C deduction up to Rs. 1.50 lakh is also available.
  • For example, if you are in 30% tax bracket, then approx tax saving by creating an HUF will be as follows:
    •   Basic exemption up to Rs. 2,50,000 = nil
    •  Rs. 2,50,001-5,00,000 @10% = Rs. 32,000
    •  Rs. 5,00,001-10,00,000 @20% = Rs. 50,000
    • 80C deductions Rs. 1,50,000
  • Therefore total tax payable for HUF on income of Rs. 6,00,000 is only Rs. 21,430.
  • If this income of Rs. 6,00,000 is taxed in individual hand @ 30% tax due is Rs. 1,85,400.
  • Hence, you can save a total of Rs. 1,63,970 by creating an HUF and transferring ancestral property income and other income under HUF.

AFFIDAVIT FOR HUF

 

I, ___________  son of __________  aged ___ years, resident of _______________ and as Karta of my Hindu Undivided Family (HUF) affirm on oath and declare as under :-

 

  1. That I am a Karta of our HUF which is known as ___________ (HUF)

 

  1. That as on today, name of coparceners (including name of Karta) our above said HUF, their father name and their addresses are as under :-

 

S.No. Name Of Coparceners Name Of Father Address
 1.
 2.
 3.
 4.

 

  1. That the above said HUF is in existing since __________

 

 

 

 

Place :

 

Date :                                                                                      …………………

Deponent

 

Verification

 

I _________ son of Shri _________ hereby verify that as per my best knowledge above mentioned contents of this affidavit are true and correct and nothing was hidden there from.

 

…………………………….

Deponent

Regards,

CA Lalit Aggarwal,
9999565491,
lalit.agrwal@gmail.com

JOB WORK PROVISIONS UNDER GST- AT A GLANCE

GST will be new world of opportunity for all the chartered accountants as well as other professionals. As all of us know that migration of existing assessees have been started. In era of competition every client is looking for complete solution under one roof. Job work is very common between manufacturer in India. Here we will try to understand Job work provisions under GST.

We can divide this topic as follows:
A. Basics and preliminary
B. Special procedure for removal of goods on job work (SEC 55)
C. Registration of job worker under GST
D. Input Tax credit
E. Transitional provisions
F. Some test your knowledge questions (From FAQ issued by CBEC)

A. Basics and preliminary

a.) Definition of Job Work: As per Sec 2(61) of the Revised Model GST Law “job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly.

Thus job work means any person who undertakes any activity or carried on any process on goods belonging to another person. Such other person necessarily be a registered taxable person. If the person is unregistered one then the job work relation could not be established under GST law. Further, goods sent for job work should be taxable goods as duty liability will arise only when goods under consideration are taxable. In other words Job work provisions are not applicable to exempted or non-taxable goods or when the sender is a person other than registered taxable person.

This definition is much wider than the one given in excise Notification No. 214/86 – CE dated 23rd March, 1986 as amended, wherein job-work has been defined in such a manner so as to ensure that the activity of job-work must amount to manufacture. Thus the definition of “job work” itself reflects the change in basic scheme of taxation relating to job-work in the proposed GST regime.

b.) Definition of Principal: As per Sec 2(76) of the Revised Model GST Law “principal” means a person on whose behalf an agent carries on the business of supply or receipt of goods and/or services.

In Revised Model GST Law sec 55 itself referred the term principal. As per sec 55 of the Revised Model GST Law “principal” means person who is sending the goods for job work.

B. Special procedure for removal of goods on job work (Sec 55)

(1) The Commissioner may permit (by special order with certain conditions) a registered taxable person (i.e. principal) to send taxable goods to a job worker for job-work without payment of tax. And after completion of job-work allow to-

(a) bring back such goods to any of place of business of principal without payment of tax, for supply there from on payment of tax within India, or with or without payment of tax for export, as the case may be, or

(b) supply such goods from the place of business of a job-worker on payment of tax within India, or with or without payment of tax for export, as the case may be.

Proviso to Sec 55:

The goods shall be permitted to be supplied from the place of business of a job worker in terms of clause (b) only if:

  1. The “principal” declares the place of business of the job-worker as his additional place of business; or
  2. Where the job worker is registered under section 23; or
  3. Where the “principal” is engaged in the supply of such goods as may be notified in this behalf.

(2) The responsibility for accountability of the goods including payment of tax thereon shall lie with the “principal”.

Author Comments:

  1. Goods also can be sent for job work from one job worker to another job worker without payment of duty.
  2. Proviso to sec 55 is very important for migration point of view also. If any manufacturer wants to supply goods (which are not notified in this regards) from unregistered job workers premises then manufacturer must have to declare the place of business of the job-worker as his additional place of business.
  3. Now One important question arise that Whether goods sent by a taxable person to a job-worker will be treated as supply and liable to GST? We can find the solution of this question from “Schedule I”. “Schedule I” specified the matters to be treated as supply without consideration. But proviso to “schedule I” specifically exclude supply of goods by a registered taxable person to a job-worker in terms of section 55. It means supply of goods by a registered taxable person to a job-worker in terms of section 55 shall not be treated as supply of goods.C. Registration of job worker under GST1. As per schedule III of Model GST Law Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds Rs. 20 Lakhs /10 Lakhs (NE states including Sikkim).
    2. Job-worker would be a supplier of services, he would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold.
    3. The supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply of goods by the “principal” referred to in section 55, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.D. Input Tax credit provisions for job worker under GST
    1. Section 55which provides for special procedure for removal of goods on job work does not specify any time limit for receipt of goods back.
    2. In the Revised Model GST Law, aspects relating to taking input tax credit in respect of inputs/capital/scarp goods sent for job-work have been specifically dealt in Section 20.
    3. Input taken mechanism when goods received back after job work with in stipulated time:
Situations Stipulated time for return under Model GST Law Availability of Input Tax Credit Consequence If not received back within the stipulated time
  1. If the inputs sent to a job-worker for job-work and the said inputs, after completion of job-work, are received back to ANY of his place of business.
1 Year from the date of being sent out of inputs Yes, Available to principal It shall be deemed that such inputs had been supplied by the principal to thejob-worker on the day when the said inputs were sent out. An amount equivalent to the input tax credit availed on such inputs has to be paid along with interest by principal. (Please note that the credit can be reclaimed when the inputs are actually received back.)
  1. If the inputs are directly sent to a job worker for job-work without their being first brought to his place of business and the said inputs, after completion of job-work, are received back to ANY of his place of business.
1 Year from the date of receipt of the inputs by the job worker Yes, Available to principal
  1. If Capital Goods (other than moulds and dies, jigs and fixtures, or tools) sent to a job-worker for job-work and the said capital goods, after completion of job-work, are received back
3 Years from the date of being sent out of capital goods Yes, Available to principal It shall be deemed to be supplied by the principal to the job-worker on the day when the said capital goods were sent out. An amount equivalent to the input tax credit availed on such capital goods has to be paid along with interest by principal. (Please note that the credit can be reclaimed when the inputs are actually received back.)
  1. If the Capital Goods (other than moulds and dies, jigs and fixtures, or tools) are directly sent to a job worker for job-work without their being first brought to his place of business and the said capital goods, after completion of job-work, are received back to ANY of his place of business.
3 Years from the date of receipt of the capital goods by the job worker Yes, Available to principal
  1. Moulds and dies, jigs and fixtures, or tools
No condition of receipt back Yes, Available to principal Not applicable

 

  1. Any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax if such job worker is registered, or by the principal, if the job worker is not registered.E. Transitional provisions for job worker under GST
    Presently, a manufacturer can sent material for job work without payment of excise duty. As per Model GST Law if inputs or/ and semi-finished goods were sent for job work prior to introduction of GST law and were lying with the job worker, declaration shall be submitted by both manufacturer and job worker within specified period. The goods can be brought back to place of Principal manufacturer within 6 months from the appointed day without payment of tax.  However, this period of 6 months can be extended by Commissioner for period of 2 months. If the material is not returned within 6 months (or further 2 months if extension is granted) from the appointed day, tax will be payable by job worker or manufacturer.F. Some test your knowledge questions (TYK Questions)TYK Q 1.  Are the provisions of job-work applicable to all category of goods?Ans.  No. The provisions relating to job-work are applicable only when registered taxable person intends to send taxable goods. In other words, these provisions are not applicable to exempted or non-taxable goods or when the sender is a person other than registered taxable person.TYK Q 2.  What is job-work?

    Ans. Section 2(62) of the MGL provides that “job-work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job-worker” shall be construed accordingly. This definition is much wider than the one given in Notification No. 214/86 – CE dated 23rd March, 1986 as amended, wherein job-work has been defined in such a manner so as to ensure that the activity of job-work must amount to manufacture. Thus the definition of jobwork tself reflects the change in basic scheme of taxation relating to job-work in the proposed GST regime.

     

    TYK Q 3.  What are the provisions concerning taking of ITC in respect of inputs sent to a job-worker?

    Ans. In the MGL, aspects relating to taking input tax credit in respect of inputs/capital goods sent for job-work have been specifically dealt in Section 20, which provides that the credit of taxes paid on inputs or capital goods can be taken in the following manner: Principal shall be entitled to take credit of inputs sent to a job-worker if the said inputs, after completion of job-work are received back in 1 year from the date of being sent out. In case the inputs are sent directly to the job-worker, the date shall be counted from the date of receipt of inputs by job-worker. Further an amount equivalent to the input tax credit availed on such inputs has to be paid along with interest, in case the inputs are not received back within the specified time. The credit can be reclaimed when the inputs are actually received back.
    TYK Q 4.  Whether the principal is eligible to avail input tax credit of inputs sent to job worker for job work?

    Ans. Yes, the principal is eligible to avail the input tax credit on inputs sent to job worker for job work in terms of Section 16A(2) of the MGL.

     

    TYK Q 5.  Whether principal has to reverse the input tax credit on inputs which have not been received back from the job worker within 1 year?

    Ans. Yes, the principal has to reverse the credit along with interest on inputs which have not been received back from job worker within 1 year but he can reclaim the credit on receipt of inputs.

     

    TYK Q 6.  What is the liability of the principal if the capital goods sent to job worker have not been received within 3 years from the date of being sent?

    Ans. Principal has to pay an amount equal to credit taken on such capital goods along with interest. But he can reclaim the credit on receipt of inputs.

     

    TYK Q 7.  Shall a manufacturer or a job worker become liable to pay tax if the inputs or semi-finished goods sent for job work under the earlier law are returned after completion of job work after the appointed day?

    Ans. No tax shall be payable by the manufacturer or the job worker under the following circumstances:

    • Inputs/ semi-finished goods are sent to the job worker in accordance with the provisions of the earlier law before the appointed day.

    • The job worker returns the same within six months from the appointed day (or extended period of 02 months).
    • Both the manufacturer and the job worker declare the details of inputs held in stock by

    the job worker on the appointed day in the prescribed form.

     

    TYK Q 8.  What happens if the job worker does not return the goods within the specified time?

    Ans. Tax would be payable by the job worker. Further, the manufacturer will also be liable to pay tax on expiry of the specified time limit.

     

    TYK Q 9.  Whether goods sent by a taxable person to a job-worker will be treated as supply and liable to GST? Why?

    Ans. No. It will not be treated as a supply. In terms of proviso to Para 5 of Schedule I of the MGL the supply of goods by a registered taxable person (principal) to jobworker, in terms of Section 55, shall not be regarded as supply of goods. Therefore, it can be inferred that no GST shall be applicable on the goods supplied by the registered principal to a job-worker.

    TYK Q 10.  Whether the goods of principal directly supplied from the job-worker’s premises will be included in the aggregate turnover of the jobworker?

    Ans. No. It will be included in the aggregate turnover of the principal.

    TYK Q 11.  Whether the job worker will have to be compulsorily registered?

    Ans. No. Section 55 of MGL does not prescribe any such condition.

    TYK Q 12.  Is a job-worker required to take registration?

    Ans. Yes, as a Job-worker would be a supplier of services, he would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold.

    TYK Q 13.  Can a registered taxable person send goods without payment of tax to his job-worker?

    Ans. Yes. Section 55 of the MGL provides that the registered taxable person (principal) can send the taxable goods to a job-worker for job-work without payment of tax. He can further send the goods from one job-worker to another job-worker and so on subject to certain condition.

    It may be noted that provisions of Section 55 are not applicable if non-taxable or exempted goods are proposed to be sent for job-work.

     

    TYK Q 14.  Whether the goods will be permitted to be supplied from the place of business of a job worker?

    Ans. Yes. But only in cases where the job worker is registered or the principal declares the place of business of the job worker as his additional place of business.


    TYK Q 15.  Can the principal supply the goods directly from the premises of the job-worker without bringing it back to his own premises?

    Ans. Yes but with a rider that the principal should have declared the premises of such job-worker as his additional place of business or where the job-worker is a registered person or where the goods have been notified.

     

    TYK Q 16.  Under what circumstances can the principal directly supply goods from the premises of job-worker?

    Ans. The goods can be supplied directly from the place of business of job-worker without declaring it as additional place of business in two circumstances namely where the job-worker is a registered taxable person or where the principal is engaged in supply of such goods as may be notified in this behalf.

Regards,

CA Lalit Aggarwal,
999565491
lalit.agrwal@gmail.com

We have separate GST team to help all of you.

 

BREXIT: How Will It Affect India?

BREXIT: How Will It Affect India?

The United Kingdom has held the referendum for whether to remain in or leave the 28-nation European Union (EU) on 23rd June, 2016 i.e. today; the event which is termed as the most important global event of the year and is expected to have profound implications for various economies across the world. Let us have a look at the IMPACT it would have on the Indian economy:

According to the Commerce and Industry Ministry, India’s bilateral trade with Britain stood at $14.02 Billion in 2015-16 ($8.83 Billion in exports and $5.19 Billion in imports). Thus, the trade balance was a positive $3.64 Billion. This would be affected as a possible Brexit is estimated to shrink Britain’s GDP by 360 basis points in the next two years, shrink the employment rate by 160 basis points and the pound by around 15-20%.

There are around 800 NRI owned businesses in the UK with close to 110,000 employees. Also, India invests more in UK than the rest of the Europe combined; the key factor for this investment being the free cross border access to the European markets from one of its best economies as of date. Brexit ceases them of this privilege bearing a cloud of uncertainty on future investments.

In case of a Brexit, India will not be spared of the collateral damage that it would trigger, especially in the emerging economies, which might witness a selloff, forcing most money managers to shift their exposure to safe haven currencies like the dollar and the yen, and even gold to some extent. This might push the rupee towards the 70 level, considering a short term horizon. But the positive here is that the Indian forex reserves, which stood at a record high at $363.46 Billion for the week ended 3rd June 2016, has been said to be utilized by the central bank to infuse whatever liquidity that is needed to keep a check on the market.

Lastly, the exports of the Indian IT industry which is currently at around $108 Billion, is expected to be impacted the most, by the Brexit, if it happens. As mentioned above, the pound is expected to fall by around 15-20% in case Britain decides to leave the EU. This will affect the ‘Rupee value’ of the exports made by the IT companies and they will have to bear the brunt of this major currency fluctuation.

In a nutshell, earlier, most of the Indian businesses chose to locate their European offices in the UK, to gain the ease of operating in the UK and avail the benefits of remaining in the EU. Removing this gateway would be undesirable for Indian businesses in the UK, who may then choose to relocate their offices and direct their investment elsewhere in Europe.

This might definitely cause temporary hiccups in the Indian stock market, but the bottom line is, Brexit, whether it happens or not, is not going to change the fundamentals of the companies, and the growth stories that they charted, will be continued upon no matter what happens. As a retail investor, you should look at Brexit, as an opportunity to enter into businesses, which you have yet missed, at comparatively lower valuations, as the markets will definitely bounce back when the dust settles and you can hence enjoy that rally.

Consider the following example that proves that such global events do affect emerging stock markets like India in the short run, but they in turn bounced back over the long haul. The Indian markets witnessed a heavy selloff in August 2015, when China devalued its currency Yuan, which sent shockwaves all across the globe. CNX Nifty, India’s benchmark index fell from the 8300 levels it was trading at as on 21st August, 2015 to 7800 levels in the very next trading session. It further plummeted to 7550 levels in the next couple of weeks, only to bounce back sharply to regain its former 8300 levels in the next two and a half weeks.

Retail investors, every time, tend to give too much importance to global events and forget that it is the companies that form and grow the index, and thereby the economy, and not such global events. As mentioned earlier, events like these should be looked at as an opportunity to BUY quality businesses and NOT SELL in panic and fear. Happy Investing!

BASICS OF HARYANA VAT

In era of competition every client is looking for complete solution under one roof. Many of us think that Haryana VAT is not our cup of tea. But I realized that it can be our cup of tea and it is very easy to deal in Haryana VAT. Here we will try to understand some BASIC practical provisions related to Registration, Return and payment under Haryana VAT:

 

REGISTRATION:

 When a person/dealer is liable to pay tax under the HVAT Act? Or Who is liable for registration under the HVAT Act? :

 

Every dealer liable to pay tax under the HVAT Act is liable for registration under the Act. 

Description of class or classes of person / dealers Taxable Quantum Day on and from which the person/ dealer is liable to pay tax/registration
  1. Who sells or purchases any goods in the course of inter-State trade or commerce or in the course of export of the goods out of or the import of the goods into the territory of India.
NIL On and from the day of first sale or purchase
  1. Who imports any goods into State from other States
NIL On and from the day of import of goods into State for the first time.
  1. Who purchases any goods in the State and exports out of State such goods or the goods manufactured there from.
NIL On and from the day of purchase of such goods by him in the State for the first time.
  1. Who resides outside the State but delivers for sale in the State, supplies or distributes in the State, any goods other than those specified in Schedule B
NIL On and from the day of first supply or distribution in the State
  1. Brick-Kiln Owner
NIL On and from the day his gross turnover in any year first exceeds the taxable quantum
  1. Liquor licensee under the Punjab Excise Act, 1914 ( 1 of 1914)
NIL
  1. Who deals in minerals, lottery tickets
NIL
  1. Any other class or classes of dealers
Rs. 5,00,000 On and from the day following the day his gross turnover in any year first exceeds the taxable quantum.
  1. Voluntary Registration
NIL From the date specified in the registration certificate.

            Note:

  1. Where a dealer is covered under more than one of the class or classes mentioned in the Table above, the liability to pay tax shall commerce from the earliest day he becomes liable to tax.

 

  1. A dealer who deals exclusively in exempted goods is not liable to pay tax under the Haryana VAT Act, 2003.

 

  1. Voluntarily Registration: Any dealer not liable to pay tax under the HVAT Act but who does not deal exclusively in exempted goods can apply for voluntarily registration under the HVAT Act.

 Practical aspects of Registration:


  1. Prescribed forms:

– Form A1 with Annexureà For registration under Haryana VAT (within 15 days from his Becoming liable to pay tax under the HVAT Act)

– Form A3  For registration of casual trader* under Haryana VAT (at least 3 days before Commencing his business in the State)

– Form A  For registration under CST (within 30 days of his becoming liable to pay tax under the Act)

– All application must be filed in online mode from 05/08/2015 onwards.

 

* “Casual Trader” means a dealer who imports into and sells goods in the State for a period NOT exceeding 30 days at a time.

 

  1. Fees For Registration (which is to be paid in appropriate Government treasury or in the form of Court fee stamps):

Fee for Registration under VAT act Rs. 500 (recently increased from Rs. 100 to Rs. 500)

Fee for Registration under CST act Rs. 25

 

  1. Basic Documents required for registration:
  • Latest passport size photos and identity proof* of proprietor/ALL the partners/ Karta/ Chairman, MD, Director or principal officer of the company. (*Voter ID/Passport/Ration Card (with Photo)/Driving License/Bank passbook (with photo)/any other document issued by the government having photo ID).
  • Signed Photo of the business premises on left and right sides to the ascertain its proper location.
  • 2 sureties of Rs. 50,000 each for HVAT registration and CST registration/Bank Guarantee of Rs. 50,000 for each one. The surety should be duly attested by a Gazetted officers/notary public/bank manager.
  • Attested copy of PAN of proprietor/business entity as the case may be.
  • Attested copy of rent deed/title deed as the case may be.
  • First Inter-state purchase bill for CST registration.

 

  1. Online aspect:
  2. Download e registration utility from haryanatax.gov.in
  3. Fill up the utility
  4. Register on haryanatax.gov.in
  5. Submit registration form online
  6. Submit physical copy of Application form along with documents to Local VAT department.

 

Practical aspects of VAT Returns:

 

VAT Return Forms:

 

There are different types of forms for different class of dealers/persons. Some forms are to be filed quarterly and some forms are to be filed annually.

 

The Forms and the due dates for filing returns by different class of dealers/persons are as under:-

Primary VAT return forms

S.No. Form Applicable for Class of dealer/person   Frequency Due Date
1. Form VAT-‘R1’ Registered dealers/persons holding registration certificate or whose application for registration is pending. Quarterly return On or before the last day of the month following the quarter.
2. Form VAT-‘R4’ Food grains procuring agencies who are liable to deduct tax at source under Rule 33(1) Quarterly return On or before the last day of the month following the quarter.
3. Form VAT-‘R4A’ Contractees who are liable to deduct tax at source under Rule 33(2) Quarterly return On or before the last day of the month following the quarter.
4. Form VAT-‘R5’ Casual Trader Within 3 days after closure of business in the State
5. Form VAT-‘R6’ Lumpsum Contractor Quarterly return On or before the last day of the month following the quarter.
6. Form VAT-‘R7’ Lumpsum retailer Quarterly return On or before the last day of the month following the quarter.
7. Form VAT-‘R8’ Lumpsum Bricks Kiln Owner Quarterly return On or before the last day of the month following the quarter.
8. Form VAT-‘R11’ Lumpsum ply board manufacturer Quarterly return On or before the last day of the month following the quarter.
9. Form VAT-‘R12’ Dealers required to file return through notice by the Assessing Authority Quarterly return On or before the last day of the month following the quarter.

Additional compulsory VAT return forms

10. Form VAT-‘R2’(Annual Return) Registered dealers/persons holding registration certificate or whose application for registration is pending. Annually On or before 30th November of the immediately succeeding year.
11. Form VAT-‘R3’(Annual commodity tax return) Registered dealers/persons whose tax liability exceeds Rs. 1,00,000 in the last preceding Financial year. Annually On or before 31st October of the immediately succeeding year.

 

Online aspect:

  1. Download e return utility from haryanatax.gov.in
  2. Fill up the utility
  3. Login on haryanatax.gov.in
  4. Submit return form online
  5. Submit physical signed copy of return within 15 days of filing of return to Local VAT office (if not digitally signed).

 

Practical aspects of payment under HaryanaVAT:

 

  1. A casual trader is required to make payment of tax daily on the sales made during the previous day.

 

  1. Due Dates of payment of tax by the lump sum dealer:

 

S.No Types of Lump sum dealer Due date for payment of tax
1 Brick Kiln Owner Equal quarterly instalments payable in the first 45 days of beginning of the quarter or equal monthly instalments payable on or before the 15th day of each month.
2 Ply-board Manufacturer
3 Works Contractor Quarterly within 30 days following the close of quarter
4 Retailer Quarterly within one month of the close of the quarter

  

  1. Due dates for payment of tax by the dealers other than lumpsum dealers and casual traders

 

S.No Types of Lump sum dealer Due date for payment of tax
1 whose aggregate liability to pay tax under the HVAT Act & CST Act during the preceding year was Rs. 1,00,000 or above Equal monthly installments payable by 15th day of the close of the month
2 Others Equal quarterly installments within the month immediately following the quarter

Note: If last date for payment of tax or any other amount due under the Act is a bank holiday, then the last date for payment of dues under the Act shall be the first banking day following such holiday or consecutive holidays.

 

  1. Online aspect of payment:
    Mode of payment: An assessee can make a payment in 2 way. An assessee can make payment by demand draft in favour of assessing authority (City name). An assessee can also pay electronically.
    Payment by demand draft:

Step 1 : Prepare demand draft in the favour of  Assessing Authority (City name). Please note that there must be different demand draft for VAT payment, CST payment or any other payment.

Step 2 : Prepare online challan through https://egrashry.nic.in/. Open this site. Login through using guest as user id and password both. (Assessee can also make an own login id through sign up). Fill up the challan and select manual in type of payment. Please note down the GRN number reflected on screen for future tracking.

Step 3: Take printout of challan and deposit it to local VAT office along with demand draft. (Please note that if detail of challan is duly filled in VAT return including GRN no., then no need of submission of physical copy of challan. Only demand draft can be submitted.)

Electronically Payment:

Step 1 : Login through https://egrashry.nic.in/. Open this site. Login through using guest as user id and password both. (Assessee can also make an own login id through sign up). Step 2 : Fill up the challan and select e-banking in type of payment. Select any bank. These are only collecting bank list. After proceeding with any bank there are all banks available for payment.

Step 3 : No need to submit physical copy of challan to Haryana VAT office.

 

Regards,

CA Lalit Aggarwal,
Team Connecting CA’s…
9999565491

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Records/Registers maintained by a Registered Central Excise Manufacturer / Dealer

Records/Registers maintained by a Registered Central Excise Manufacturer/Dealer:

General/compulsorily records to be maintained by the assessee:

1. RG-1 register, i.e. daily stock account of excisable goods;

2. Form-IV register of receipt and issue of raw material;

3. Personal Ledger Account;

4. Invoice book

5. Job work register as per annexure 87 (To be maintained by Job worker/processor)

Further records to be maintained by the assessee availing Cenvat credit:

1. RG-23A Pt.-I –: entry book of input receipts;

2. RG-23A Pt.-II –: entry book for taking credit of duty paid on inputs;

3. RG-23C Pt.-I –: entry book of capital goods received;

4. RG-23CPt.-II -: entry book for taking credit of duty paid on capital goods;

5. Record of inputs sent for job work outside the factory under Rule 57F(4);

6. Record of inputs received in the factory for job work;

7. Challan book under Rule 4(5)a for sending inputs or partially processed inputs for job work;

8. Challan book for sending capital goods for tests, repairs etc. under Rule 57S.

Further records to be maintained by the manufacturers of sugar: 

1. RG-4 – cane account;

2. RG-6(C) or (G) – register of daily manufacture;

3. RG-7 – daily drier account;

4. RG-8 – Sugar store account;

5. RG-9 – Gunny bag account;

6. RG-11 – Daily account of sugar received for crushing.

Further records to be maintained by the manufacturers of  Matches:

1. RG-2 – daily account of splints and veneers and composition of match heads;

2. RG-3 – register of stock and receipts of Central Excise Stamps purchased;

Further records to be maintained by the manufacturers of Tobacco products:

1. RG-12 – register of manufacture of excisable tobacco products;

Further records to be maintained by the unit of  Embroidery:

1. RG-25 – production register cum account current to be maintained by the manufacturers of embroidery working under special procedure.

Further records to be maintained by the unit of  Tea:

1. RG-17 – daily account of loose tea utilised in the production of package tea.

Further records to be maintained by independent processors.

· 1. lot register;

· 2. register in respect of deemed credit taken under Rule 57A;

Records to be maintained by registered dealers.

1. RG-23D – record of receipt of duty paid goods and issue thereof;

2. Invoice book

Regards,
CA Lalit Aggarwal
9999565491
Connecting CA’s…

Collaborations & Joint Development Agreement and Capital Gains Tax

Collaborations & Joint Development Agreement and Capital Gains Tax:

A joint development agreement is an executory agreement between a land owner or owners and the builder/promoter regarding any real estate joint venture project. A joint venture is one where a land owner with a vacant land or land with building enters an agreement with the builder to construct new projects. The Builder puts up a building. Thereafter, the land owner and builder share the constructed area. The builder delivers the `owner’s share’ to the land-holder and retains the `builder’s share’. This way, the capital, construction and legal work will be carried out by the builder whereas the land will be provided by the land owner.

 

The scope of Capital Gains in Joint Development Agreement is a vast one and is made with an eye on the tax consequences of the transaction.

 

 Important Considerations/issues:
1. Whether the profit is taxable under the head capital gain or business income in the hands of land owner?
2. When does the Capital gain Tax arise for the land owner and developer? Is it at time of signing the joint development agreement, at the time of receiving the constructed buildings, or at the time of selling the buildings?
3. What will be the full value of consideration received on transfer of the capital asset?
4. The Joint Development Agreement between the Landowner and Developer breaks down and the project is not completed, then whether Landowner is liable to pay capital gains tax?

The point by point detailed analysis is as under:

1. Whether the profit is taxable under the head capital gain or business income in the hands of land owner?

Whether the profit is taxable under the head capital gain or business income in the hands of land owner is depend on the complete fact and the circumstances of the case. In the case of Sathappa Textilers (P) Ltd. Vs. CIT, 263 ITR 371(Mad.) court held that there should be genuine case of stock in trade otherwise profit will be taxed only in capital gain head. Merely passing of resolution for conversion of land into stock in trade is not treated as genuine case.

A. As per sec 45(1) any profit/gains arising from transfer of capital asset is taxable under the capital gain head in the previous year in which the asset is transferred.

B. As per sec 45(2) if a capital asset is converted into stock in trade, the capital gain is taxable in the year in which such asset is sold. Thus still taxable as capital gain.

2. When does the Capital gain Tax arise for the land owner and developer? Is it at time of signing the joint development agreement, at the time of receiving the constructed buildings, or at the time of selling the buildings?

Relevant provisions of income tax act:

A. As per sec 45(1) any profit/gains arising from transfer of capital asset is taxable under the capital gain head in the previous year in which the asset is transferred.
B. As per sec 2(47)(v) transfer includes any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 1 (4 of 1882 ).

  • Transaction involving possession to be handed over in part performance of a contract in the nature referred to in Section 53A of Transfer of Property Act, it amounts to transfer. Section 53A clearly explains the concept of part performance of a contract of sale of immovable property. If a buyer is put in possession of a property in part performance of the obligations under the agreement on the buyer paying a substantial portion of the sale consideration, the contract of sale is treated to be in part performance.
  • Where the agreement for transfer of immovable property by itself does not provide for immediate transfer of possession, the date of entering into the agreement cannot be considered to be the date of transfer within the meaning of sub clause (v) of section 2(47) of the Income tax Act.
  • Where the agreement for transfer of immovable property by itself provides for immediate transfer of possession, the date of entering into the agreement shall be considered to be the date of transfer within the meaning of sub clause (v) of section 2(47) of the Income tax Act.

Summary with conclusion:

S.No. Case When does the Capital gain Tax arise Explanation
1. Where possession is transferred at the time of agreement At time of signing the joint development agreement Once it is held that the transaction is treated as transfer as per Sec 2(47)(v), the actual date of taking physical possession will be irrelevant.
2. Where possession is not transferred at the time of agreement At the time of receiving the constructed buildings Such transactions will not be covered under sec 2(47)(v).
3. if a capital asset is converted into stock in trade At the time of selling the buildings Sec 45(2)

3. What will be the full value of consideration received on transfer of the capital asset?

 

S.No. Case Sale consideration Explanation
1. Where possession is transferred at the time of agreement FMV of assets Fair market value of the capital asset on the date of transfer to be taken as sale consideration, in cases where the consideration is not determinable. (Sec 50D)
2. Where possession is not transferred at the time of agreement FMV of flats received by Land owner Such transactions will not be covered under sec 2(47)(v).
3. if a capital asset is converted into stock in trade FMV of assets as on Date of conversion Sec 45(2)

4. Joint Development Agreement between the Landowner and Developer breaks down and the project is not completed, then whether Landowner is liable to pay capital gains tax?

In the case of K.R. Srinath v. Asst. CIT,[2004] 141 Taxman 268 (Mad.), Where the assessee initially paid advance under an agreement for the purchase of a property, reserving right to specific performance of the agreement, and later received consideration under another agreement under which the earlier agreement was cancelled and the vendor was allowed to sell the property to any person at any price, there was a relinquishment of right by the assessee which amounted to ‘transfer’, and the resulting gain was assessable as capital gains. Since the assessee had paid a sum for acquiring the right to acquire the sale deed, it could not be said that there was no cost of acquisition so as to take the view that there could be no assessment to capital gains.

Hence, even if the Joint Development Agreement between the Landowner and Developer breaks down, if the landowner has acquired due to Joint Development Agreement, then what landowner has acquired will come under the definition of “capital asset” and Income Tax department can levy capital gains tax on that capital asset.

Conclusion :

Thus there are three main propositions to be considered while deciding the tax proposition on Joint Development Agreement:

a. Possession and General Power of Attorney and development agreement has been executed further fact that the payment has been postponed to future date is irrelevant. Follow Bombay High Court’s decision in Chaturbhuj Dwarkadas Kapadia’s.


b. Possession has been handed over but from the facts it can be demonstrated that the developer has not performed or not intended to take any efforts which may result in breach of contract- consequently does not amount to transfer u/s 2(47)(v). Binjusaria Properties (P.) Ltd.’s case (supra), Fibars Infratech (P.) Ltd.’s

Please note that Any one should take care while preparing collaboration agreement. Clause of possession in agreement is vital.

Author,
CA Lalit Aggarwal
Mobile: 9999565491
E-mail: lalit.agrwal@gmail.com

Magic of Zero tax on Rs. 10 Lakhs salary Income

Magic of Zero tax on Rs. 10 Lakhs Income
Item No. Nature Amount
1 Basic Tax Exemption    2,50,000
2 Deduction u/s 80C    1,50,000
3 NPS u/s 80CCD (1B)       50,000
4 Employer’s contribution to NPS u/c 80CCD(2)    1,00,000
5 Health insurance premium (Sec 80D) – self/spouse/dependent children       20,000
6 Health insurance premium (Sec 80D) – Parents       30,000
7 Leave travel concession/allowance       25,000
8 Medical Allowance (reimbursement nature)       15,000
9 Transport Allowance       19,200
10 Home Loan Interest u/s 25(b)    2,00,000
Reimbursement/ Perquisites
11 Travel/fuel Expenses    1,00,000
12 Phone/mobile bill reimbursement       30,000
13 Newspapers/magazines       12,000
14 Meal coupons       12,000
TOTAL  10,13,200

Detailed Item wise Analysis:

 

Item no. 1 – Basic income tax exemption of Rs 2,50,000

Every individual can avail this basic exemption of Rs. 2,50,000

Item no. 2 – Claim Exemption of Rs 1,50,000 u/s 80C

Following List of deposit/investment/payment is eligible deductions u/s 80C:

  1. Life Insurance Premium paid for self/spouse/ children.
  2. Tuition fees of two children. No deduction is allowed for the payment of development fees, donation, Transport allowance, term fees or any other payment.
  3. Amount deposited in Public Provident Fund. Anyone can open PPF account with any post office or at any designated bank.
  4. Amount contributed towards the Employee’s Provident Fund (EPF/SPF/RPF)
  5. Post office term deposit for 5 years / Bank FD scheme of 5 years.
  6. National Saving Certificates (NSC)
  7. Tax saving Mutual Funds.
  8. Principal repayment of Home Loan amount.
  9. National Pension System / New Pension Scheme (NPS)
  10. Amount deposited in Sukanya Samriddhi Account

Item no. 3 Claim additional deductions under 80CCD towards NPS Rs 50,000 u/s 80CCD(1B):

Employees can contribute to New Pension Scheme / National Pension Scheme (NPS) up to 10% of their salary. In such case, an employee is eligible to claim additional Rs 50,000 tax benefits over and above 80C.
Item no. 4 Deduction of Employer’s contribution of NPS u/s 80CCD(2) – Rs 100,000:

Many employers are willing to help employees by contributing to schemes like NPS where employees would get tax exemption. Have you checked with your employer whether they can contribute to NPS and deduct from your total CTC (Cost to the company)? They can contribute up to 10% of your salary. This is a good way to claim tax exemption and get the highest interest rate with this safe investment scheme. But maximum deduction of 10% of salary can be claimed as deduction under this section i.e. u/s 80CCD(2).

Item no. 5 Exemption for Health insurance premium up to Rs 20,000:

Assessee can claim health insurance premium exemption up to Rs 20,000 per annum u/s 80D. Medical insurance premium paid (must be paid through other than cash mode) for self, spouse, DEPENDENT children is eligible for deduction under this section. Maximum Deduction of Rs. 5000 paid (can be in cash) for preventive health check up is also allowed within the limit of Rs. 20,000.

Item no. 6 Medical insurance premium for parents – Rs 30,000:

Assessee can claim health insurance premium exemption up to Rs 30,000 per annum u/s 80D. Medical insurance premium paid (must be paid through other than cash mode) for parents is eligible for deduction under this section. Maximum Deduction of Rs. 5000 paid (can be in cash) for preventive health check up is also allowed within the limit of Rs. 30,000.

Item no. 7  Leave Travel Allowance/concession u/s 10(5) – Rs 25,000:

Many of assessee tend to ignore this LTA (Leave Travel Allowance) which one can spend and claim exemption u/s 10(5). As per rules assessee can claim LTA twice in a period of 4 years. Assuming Rs 50,000 as one time in a 2 year period, hence an allocation of Rs 25,000 per annum is done here. Note that this amount would depend on the employer and may change from employer to employer.

Item no. 8 Medical allowance (Reimbursement Nature) – Rs 15,000:

Assessee can submit medical bills to their employer and claim upto Rs 15,000 as medical allowance (Reimbursement) as part of their total compensation (CTC).

Item no. 9 Exemption of Transport Allowance for Rs 19,200 per annum:

From the financial year 2015‐16, the transport allowance exemption has been increased to Rs 1,600 per month i.e. Rs 19,200 per annume.

 

Item no. 10 Assessee can Claim interest on house property loan upto Rs 2,00,000:

If assessee have taken house loan, assessee is eligible to claim interest on home loan (which is termed as loss from house property) up to Rs 2,00,000 u/s 24(b).

Tax Free Allowances / perquisites

Below are some of the tax free allowances / perquisites which employers are providing these days. They would depend on an employer to employer. You can claim to maximum extend to enjoy tax benefits. (Item no. 11 to 14)

Item no. 11 Fuel expenses reimbursement upto Rs 1,00,000:

Many employers provide fuel expense reimbursement for their employees depending on their grade. While at junior level, it may be at Rs 30,000, for employees who are earning above Rs 10 Lakhs per annum, employers are providing Rs 1 Lakh fuel expenses at a minimum. I have not considered any car schemes here, and this is simply fuel expense reimbursement which could be based on actual.

Item no. 12 Phone / Mobile expenses reimbursement – Rs 30,000:

Many employers provide reimbursement of phone and mobile bills to the tune of Rs 30,00 per annum as part of the CTC structure. I heard in some companies, it is over Rs 50,000 per annum. I have considered Rs 30,000 on the conservative side.

Item no. 13 Newspaper / Magazine reimbursements – Rs 14,000:

Many employers are giving reimbursements of newspaper / magazine to the extent of Rs 14,000 per annum for senior employees earning over Rs 10 Lakhs per annum. Some companies are restricting only to magazine cost reimbursement. One can claim this as part of their CTC. I have taken this average after inquiring with some of my friends who are working in MNC and large companies.

Item no. 14 Meal Coupons / Sodexo coupons – Rs 12,000:

Many MNC companies are providing Sodexo coupons as part of their CTC structure. If you are not encashing such perquisites provided by your employers, you are missing something and paying unnecessary taxes. I have taken this amount on the low side as some are providing this as just Rs 1,000 per month, but some MNC companies are providing Rs 3,000 per month.

Besides these benefits there are certain other benefits also can avail by the employees like Gift vouchers of Rs. 5,000, helper allowances, Group Medical insurance etc.

Regards,
CA Lalit Aggarwal
Connecting CA’s…
9999565491

Rules regarding quoting of PAN for specified transactions amended effective from 1st January, 2016

Rules regarding quoting of PAN for specified transactions amended

The Government is committed to curbing the circulation of black money and widening of tax base. To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

 

One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget Speech. The Government has since received numerous representations from various quarters regarding the burden of compliance this proposal would entail. Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.

To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN. The monetary limits have now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable property, to Rs.50,000 from Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted company. In keeping with the Government’s thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN.  Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.

The changes to the Rules will take effect from 1st January, 2016.

The above changes in the rules are expected to be useful in widening the tax net by non-intrusive methods. They are also expected to help in curbing black money and move towards a cashless economy.

A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached.



Sl.
NATURE OF TRANSACTION MANDATORY QUOTING OF PAN (RULE 114B)
Existing requirement New requirement
1. Immovable property Sale/ purchase valued at Rs.5  lakh or more
  1. Sale/ purchase exceeding Rs.10 lakh;
  2. Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2 Motor vehicle (other than two wheeler) All sales/purchases No change
3. Time deposit Time deposit exceeding Rs.50,000/- with a banking company
  1. Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;
  2. Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN
4. Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued
5. Sale or purchase of securities Contract for sale/purchase of a value exceeding Rs.1 lakh No change
6. Opening an account (other than time deposit) with a banking company. All new accounts.
  1. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
  2. Co-operative banks also to comply
7. Installation of telephone/ cellphone connections All instances Discontinued
8. Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs.50,000/-.
9. Cash purchase of bank drafts/ pay orders/ banker’s cheques Amount aggregating to Rs.50,000/- or more during any one day Exceeding Rs.50,000/- on any one day.
10. Cash deposit with banking company Cash aggregating to Rs.50,000/- or more during any one day Cash deposit exceeding Rs.50,000/- in a day.
11. Foreign travel Cash payment in connection with foreign travel  of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex) Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent)
12. Credit card Application to banking company/ any other company/institution for credit card No change.Co-operative banks also to comply.
13. Mutual fund units Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase.
14. Shares of company Payment of Rs.50,000/-  or more to a company for acquiring its shares
  1. Opening a demat account;
  2. Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.
15. Debentures/ bonds Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds Payment exceeding Rs.50,000/-.
16. RBI bonds Payment of Rs.50,000/-or more to RBI for acquiring its bonds Payment exceeding Rs.50,000/-.
17. Life insurance premium Payment of Rs.50,000/- or more in a year as premium  to an insurer Payment exceeding Rs.50,000/- in a year.
18. Purchase of jewellery/bullion Payment of Rs.5 lakh or more at any one time or against a bill Deleted and merged with next item in this table
19. Purchases or sales of goods or services No requirement Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20. Cash cards/ prepaid instruments issued under Payment & Settlement Act No requirement Cash payment aggregating to more than Rs.50,000 in a year.