New ITR Forms for AY 2017-18 (FY 2016-17)

The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2017-18. Same can be downloaded from Income Tax's Portal incometaxindia.gov.in This time ITR-1 is really Saral (Here called Sahaj). One page form, formatting is good. From first instance appears like a form for new mobile connection. Finally Income Tax is getting smart, coming out of Sarkari Babu's Image. :)

How to Start New Financial Year !

In my last Post I wrote How to close books for Financial Year. Here In this post, I am sharing some basic tips to be taken care while starting the new financial year.

1. This is for those, who believe in Almighty. Seek Blessings of God for year to be profitable, cash flow to stay positive entire year, Employees be engaged and motivated, All evil and negative forces stay away from business, Revenue to grow and Cost under control and finally wish all stakeholders to grow with business including Founders, Promoters, Investors, Vendors, Customers and Employees. You can pray according to your faith, Usually people pay their respect to Lord Ganesha, Maa Lakshmi, Lord Kuber and Lord Chitragupt. After completing worshiping rituals put holy symbol of Swastic on Books and Begin the Journey.

2. First Decision: Continue Same Company in Software or Create New Company. Usually in softwares you can continue the same company for new FY or Create new company. Both options have own advantages and disadvantages. In you need to create new chart of accounts, change in accounting system e.g. from GL base to cost centre base, change in units of measure, change in SKU’s, Integrating Inventory module with Bar Codes or adopt batch accounting, Integrate with other systems like Inventory, Payroll or Taxes, better create new company. Take help of technology, Import all masters into new company and then change as per new requirement.

3. Information: Share all relevant information with appropriate audience e.g. Investment Declaration Form for Current FY, Leave Policy and all relevant policies/documents and information. Budget Plans for each department, Incentive Policies. You can just provide them link or send a mail to refer, if using HRMS System or have automated and uploaded all policies, processes and forms on company’s portal.

4. Chart of Accounts: Review All Accounting, Inventory and Taxation Masters and make changes wherever required. Review chart of accounts, eliminate/block GL’s or Master no more required. Keep in mind all expected changes e.g. the flow of transactions in GST Environment and how it would be different from existing system. For better understanding you can download financials of 2-3 companies from the same industry your company belongs from MCA’s Portal and see how they are different from yours, from notes you can analyse if there is any need to create new GL’s.

5. If you are going to make big changes in system, make presentations, take approval from appropriate authority and inform auditors also, so that no issue is created later.

All the Best !

Closing the Books of Accounts – the last ritual of an accountant.

Closing the Books of Accounts – the last ritual of an accountant.

Today is 31^st March’2017. Like every year, all accounting professionals call it an executive or CFO would be thinking about how to close the books? How to handle Audit? Some do it with proper planning and some let it happen as a routine. Just sharing basic tips on books closure that might help accounting professionals to prepare their check list and complete the closure of books without any stress. As it it said this is not skilful who wins, but the one who is prepared.

1.       Don’t let history repeat : Read last year’s audit report, auditors queries or advices, management letter  and check if there were any serious query, material qualification and management’s response or commitments. Ensure all points have been taken care, and not the same issues exist as on today.

2.       Today’s Task: Make a list of tasks to be completed today/tomorrow. Some of the tasks:

a)      Cash Certificate. (Cashier/Accountant to issue, to be verified and signed by someone senior from the management – better if by Head of Accounts/CFO)

b)      To collect certificate from Banks against Balances in Bank, FDR in Banks. (Now a days in most of the banks available online)

c)       RBI Rates- Check RBI Website for exchange rates (If company engaged in international transactions) and Interest Rate for Actuarial Valuation.

d)      Last Numbers: Just note or take Screen shots  from system last invoice number issued, challan no., GRN No., JV No., Cash/Cheque Receipt No., Last cheque number issued (Including PDC’s), Cheques in hands etc.

3.       Assets & Stock Verification: In some organisations internal staff, in some auditors/third party and in some both together conduct physical verification of fixed assets and inventory. Items on have no access, take confirmation letter from holder e.g. Items sent on display/repair/held by third party or employees. Items in transit check the status on portal of dispatch agency. Inventory includes all items from raw material to by/joint products, promo material, packing material, samples, consumables like diesel etc and finished goods.

4.       Correspondence: To send /reply confirmation request as required under MSMED Act, 2006. Balance Confirmation letter and statement of accounts from top vendors/customers. (Including foreign parties and 100% in case of related parties). Send Notice if there is recoverable from a customer.

5.       Closing Entries: Depreciation, Foreign Exchange Gain or Loss, Provisions (including payroll entries, Auditors Fees, Incentives/Commissions payable), Prepaid Expenses, Deferred Revenue etc.

6.       Documents: Ensure all important documents are in place. Minute Book and other Statutory Registers required under company and labour laws. All important agreements duly signed. Accounting Vouchers & Invoices. All correspondence with Banks/Govt/Auditors/Consultants/Tax Departments.

7.       Statutory Compliances: For all applicable taxes, payments and periodic returns. Keep copies of challan and returns ready.

8.       Scrutiny of Trial Balance: 100% - Take Care of following points:

a)      Disputed Parties. (Evaluate the Risk, if show, you admit the liability, if no, may be prior period item next year, contingent liabilities, to take care)

b)      Accounts to be reconciled: All Banks/Branches/Related Parties/Top Vendors & Customers/Review All open items PO/GRN/SO/Advances/Imprests etc. Tax Credits with 26AS, All Tax Liabilities and Tax Credits (Cenvat/Input Tax Credit) Accounts with respective returns.

c)       Write off: Small differences on account of rounding off. Bad Debts not recoverable after all efforts.

d)      Regroup or reclassify the entries where there is change in nature e.g. revenue to capital or vice-versa.

e)      Capitalize revenue items – Intangibles or related to fixed assets.

f)       Issue all invoices- Goods/services have been delivered in terms of agreement.

g)      Chart of Accounts – Some people believe in small chart of accounts, in ERP Environment using multiple cost centres and reason codes etc could help to extract reports but in traditional software’s, Make it big, e.g. instead of one Repair Account, you can use Office Repair, Computer Repair, Printer Repair, Furniture Repair etc. It will help only in cost monitoring, as in financials all will be grouped in one heading.

9.       Provisional Financials: Will be generated in most of accounting softwares, check for Project/Product wise profitability – Gross Profit, Right Cost Allocation among all functions and departments.

10.   Others. These are general points, I have mentioned above. Apart from these check if there is specific requirement for the company or industry e.g. if company is NGO or SEZ. Thanks.

The deadline to migrate existing registration (GST Enrolment) extended to 30th April 2017

Government has extended the deadline to migrate existing registration (GST Enrolment) to 30th April 2017 for all existing registrations to be migrated across state and centre. New Schedule is as hereunder :
Enrolment schedule for your State
The schedule of the enrolment activation drive for states is given below.
State	Start Date	End Date
Puducherry	08-11-2016	30-04-2017
Sikkim	08-11-2016	30-04-2017
Maharashtra	14-11-2016	30-04-2017
Goa	14-11-2016	30-04-2017
Daman and Diu	14-11-2016	30-04-2017
Dadra and Nagar Haveli	14-11-2016	30-04-2017
Chhattisgarh	14-11-2016	30-04-2017
Gujarat	15-11-2016	30-04-2017
Odisha	30-11-2016	30-04-2017
Jharkhand	30-11-2016	30-04-2017
Bihar	30-11-2016	30-04-2017
West Bengal	30-11-2016	30-04-2017
Madhya Pradesh	30-11-2016	30-04-2017
Assam	30-11-2016	30-04-2017
Tripura	30-11-2016	30-04-2017
Meghalaya	30-11-2016	30-04-2017
Nagaland	30-11-2016	30-04-2017
Arunachal Pradesh	30-11-2016	30-04-2017
Mizoram	30-11-2016	30-04-2017
Manipur	30-11-2016	30-04-2017
Uttar Pradesh	16-12-2016	30-04-2017
Jammu and Kashmir	16-12-2016	30-04-2017
Delhi	16-12-2016	30-04-2017
Chandigarh	16-12-2016	30-04-2017
Haryana	16-12-2016	30-04-2017
Punjab	16-12-2016	30-04-2017
Uttarakhand	16-12-2016	30-04-2017
Himachal Pradesh	16-12-2016	30-04-2017
Rajasthan	16-12-2016	30-04-2017
Kerala	01-01-2017	30-04-2017
Tamil Nadu	04-01-2017	30-04-2017
Karnataka	01-01-2017	30-04-2017
Telangana	01-01-2017	30-04-2017
Andhra Pradesh	01-01-2017	30-04-2017
Enrolment of Taxpayers who are registered under Central Excise Act but not registered under State VAT	07-01-2017	30-04-2017
Enrolment of Taxpayers who are registered under Service Tax Act but not registered under State VAT	25-01-2017	30-04-2017
New registration under VAT/Service Tax/Central Excise after January 2016	01-02-2017	30-04-2017
Source : https://www.gst.gov.in/enrolplan

Amenities to employees outside CTC may trigger GST liability

So, Who thinks GST will be Simple Form of Taxation. One thing is sure whenever Govt says we are going to make things simpler or better, be ready for more complications. Now perquisites will not be matter of attraction just for Income Tax Officers, But GST officers would also love to review Salary Packages with all benefits of big bosses to meet their tax collection targets. My Accountant Friends asked me, GST ke aane ke baad to hum bekar ho jayenge, bus return bharo aur chutti, I told them, Mitron, thoda intzar to karo, Bahut maja aane wala hai. Chutti nahi milegi, kaam badne wala hai. :)

Link :  http://retail.economictimes.indiatimes.com/news/industry/amenities-to-employees-outside-ctc-may-trigger-gst-liability/57885167

Clause by Clause Analysis of GST Bills 2017 by ICMAI

GST Bills Analysis

1. GST Bills 2017: 

1. CGST Bill 2017
2. UTGST Bill 2017
3. IGST Bill 2017
4. The Goods & Services Tax (Compensation To States) Bill, 2017

2. Clause by Clause Analysis for : 

1. CGST Bill 2017
2. UTGST Bill 2017
3. IGST Bill 2017

Presentation on GST Bill - 2017

Source : http://icmai.in/icmai/news/GST-Bills-Analysis.php

Download the GST Bills as introduced in Lok Sabha on 27.03.2017

• CGST Bill as introduced in Lok Sabha [Eng. 340 KB)]   
• Compensation Cess Bill as introduced in Lok Sabha [Eng. (42 KB)]  
• IGST Bill as introduced in Lok Sabha [Eng. 77 KB)]  
• UTGST Bill as introduced in Lok Sabha [Eng. 68 KB)]

Source : http://www.cbec.gov.in/htdocs-cbec/gst/gst-bills

Which of the existing taxes are going to be subsumed or “not subsumed” under GST? (Post-2)

Which of the existing taxes are going to be subsumed or “not subsumed” under GST?

Taxes which will be subsumed:

The GST would replace the following taxes:

(i) taxes currently levied and collected by the Centre:

a. Central Excise duty

b. Duties of Excise (Medicinal and Toilet Preparations)

c. Additional Duties of Excise (Goods of Special Importance)

d. Additional Duties of Excise (Textiles and Textile Products)

e. Additional Duties of Customs (commonly known as CVD or Countervailing Duty)

f. Special Additional Duty of Customs (SAD)

g. Service Tax

h. Central Surcharges and Cesses so far as they relate to supply of goods and services

(ii) State taxes that would be subsumed under the GST are:

a. State VAT

b. Central Sales Tax

c. Luxury Tax

d. Entry Tax and Octroi (all forms)

e. Entertainment and Amusement Tax (except when levied by the local bodies)

f. Taxes on advertisements

g. Purchase Tax

h. Taxes on lotteries, betting and gambling

i. State Surcharges and Cesses so far as they relate to supply of goods and services

Taxes which will not be subsumed:

a.      Basic Custom Duty (BED)

b.      Exports Duty

c.      Stamp Duty

d.      Electricity Duty

e.      Property Tax

f.      Toll Tax

g.      Road and Passengers Tax

Also following commodities will be kept outside the purview of GST initially:

Alcohol for human consumption, Petroleum Products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel & Electricity.

What is Goods and Service Tax (GST)? Let’s Simplify GST with SSB. Post–1

What is Goods and Service Tax (GST)?

Ans: It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

Explanations:

1. It is destination based Tax can be charged based either on Origin/Production or Destination/Consumption. GST is decided to be destination based tax that means tax will be levied where goods or services would get consumed. E.g.  If ABC Limited produces the goods in Haryana and sells them to XYZ Limited in Gujrat. Here Gujrat will get the share of tax and not Haryana, as goods are being consumed in Gujrat.

2. Tax on Consumption. It is notable that under Model GST Provision of tax is based on consumption and not just on sale of goods and services. It will include:

Supply of goods or/and services without any consideration e.g. to contractor for job work/supply to related party/Branch Transfers etc.

Free Samples e.g. distribution of samples for promotion of product or medical items to medical practitioners, educational cds to schools/educational institutes etc.

Free Goods or Services e.g. goods given free of cost under some discount scheme, free services for goods sold etc.

3. Tax would be levied at all stages from production to consumption by end user, good part is credit of the tax paid would be available to set-off.

–Sukhvinder Singh Bhatia
#SukhF_GST

Winding up startup? Steps and precautions entrepreneurs should take to avoid trouble

Allow me to die with honor. In the Last scene of One of Best Ninja Movies, Enter the Ninja, when defeated, Sho Kosugi asked his opponent to grant him graceful death as per Ninja’s Tradition. Same with startup, Many enthusiastic professionals just to try their luck turn to be entrepreneur. Many failed instantly for different reasons, many survived for few years and a few managed to run the show for long. No one wants to watch death of it’s business baby, but for peaceful departure/winding up of startup/business, some rituals to be followed. This article explains the same. 

http://retail.economictimes.indiatimes.com/news/industry/winding-up-startup-steps-and-precautions-entrepreneurs-should-take-to-avoid-trouble/57681186