Why Investors are crazy about Cryptocurrencies?

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. Cryptocurrencies are called ‘dark internet’ or ‘another internet world’ for the complexity attached to it. The first cryptocurrency to capture the public imagination was bitcoin, which was launched in 2009 by an individual or a group under the pseudonym Satoshi Nakamoto. Since then, numerous cryptocurrencies have been created.

Why its gaining popularity?

No matter which cryptocurrency one would have invested last year, the returns would have been astronomical.

If one is serious about trading or investing in cryptocurrencies, the way to go about can be having a diversified portfolio of cryptos with higher weightages for bitcoin and ethereum and minimal weightages for other emerging crypto currencies. To choose which crypto currency to invest in, one has to study the underlying blockchain technology and see if it is superior to others, and also check if some of the recognised companies and institutions are accepting the cryptocurrencies. Wider the acceptance, lower the risk in investing in a cryptocurrency.

Source: DSIJ, Wiki, Investopedia

Revisiting GST on Restaurants Services

The government as part of major revamp of GST tax Structure had earlier this month decided to fix the GST rate at 5 percent for all restaurants and not give them input tax credit.

Type of Restaurants	GST Rate
All restaurants	5% no ITC
Restaurants within hotels (room tariff <7,500-5% without ITC)	5% no ITC
Restaurants within hotels (room tariff >7,500) still 18% with ITC	18% with ITC
Outdoor catering	18% with ITC

For Expert Assistance in GST Advisory, Filing, Training, Invoicing, Accounting call us at 9900397777 mail us at info@preethamandco.com

GST Implications on Second Hand Goods

Normally GST is charged on the transaction value of the goods. However, in respect of second hand goods, a person dealing is such goods may be allowed to pay tax on the margin i.e. the difference between the value at which the goods are supplied and the price at which the goods are purchased. If there is no margin, no GST is charged for such supply. The purpose of the scheme is to avoid double taxation as the goods, having once borne the incidence of tax, re-enter the supply and the economic supply chain.

Valuation of second hand goods: As per Rule 32(5) of the CGST Rules, 2017, where a taxable supply is provided by a person dealing in buying and selling of second-hand goods, i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored.

Illustration:

For instance, a company say M/s FirstSource Ltd, which deals in buying and selling of second hand cars, purchases a second hand Maruti Celerio Car of March, 2014 make (Original price Rs. 5 lakhs) for Rs. 3 lakhs from an unregistered person and sells the same after minor furbishing in July, 2017 for Rs. 3,50,000/-. The supply of the car to the company for Rs. 3 lakhs shall be exempted and the supply of the same by the company to its customer for Rs. 3.5 lakhs shall be taxed and GST shall be levied. The value for GST purpose shall be Rs. 50000/-, i.e.the difference between the selling and the purchase price of the company.

In case any other value is added by way of repair, refurbishing, reconditioning etc., the same shall also be added to the value of goods and be part of the margin. If margin scheme is opted for a transaction of second hand goods, the person selling the car to the company shall not issue any taxable invoice and the company purchasing the car shall not claim any ITC.

Taxing Bitcoin Transaction-A Perplexing Issue

With a whopping return of 800 per cent that Bitcoin has given over the last one year it has caught the attention of many in India. Thus, there is a need to understand the IT nuances of their bitcoin transactions. Kindly note Bitcoins in India are unregulated but are not yet illegal. However, the RBI has on occasion cautioned investors of inherent risks. An inter-disciplinary committee set up by the government is examining the framework of virtual currencies.

Tax Implications

Even though Bitcoins are not specifically mentioned in the income tax act, Bitcoins are assets which are usually owned so holder can gain from an increase in its value. In that sense, they acquire the definition of capital gains. Which is a wide definition as per the Income Tax Act. Accordingly these can be classified as long-term when held for more than 3 years and short-term when held for less than 3 years. In case of long-term gains indexation benefit must be allowed and gains taxed at 20 per cent. Short term gains will be taxed as per the applicable income tax slab.

But there is a hitch involved, where there are too many trades in Bitcoins the owner may be classified as a trader and income will have to be reported as income from a business. In the absence of specific guidance on the matter, some taxpayers may choose to report this income under the fifth head of income which is income from other sources.

Conclusion

According to the law if somebody makes some money that should be subject to income tax. Realizing the growing popularity of crypto currencies, the government formed a committee this year in April to give recommendations for regulating the crypto currency market. The report is yet to come out. Having said that, mining, buying and selling virtual currencies is not illegal in India, but it is also not recognized by law either. There is a question mark on the taxability aspect too. So if you have been trading or investing do make sure any gains from the sale of Bitcoins is included in your income tax return.

Source: TOI, BT. Compiled and presented by Preetham Shetty & Co. Chartered Accountants

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GST Reboot Revised Deadlines

GSTR 1 For turnover upto Rs. 1.5 cr:

Period (Quarterly)	Due dates
July- Sept	31st Dec 2017
Oct- Dec	15th Feb 2018
Jan- Mar	30th April 2018

GSTR 1 For turnover of more than Rs 1.5 cr:

Period (Quarterly)	Due dates
July to Oct	31st Dec 2017
November	10th Jan 2018
December	10th Feb 2018
January	10th March 2018
February	10th April 2018
March	10th May 2018

Others GSTR filing extensions

Return	Revised Due Date	Old Due Date
GSTR-5  (for Non Resident)	15th Dec 2017	Earlier of 20th August 2017 or  7 days from date of registration
GSTR-4  (for Composition Dealers)	24th Dec 2017	18th October 2017
GSTR-6  (for ISD)	31st Dec 2017	13th August 2017
ITC-04 (for job work) for quarter of Jul-Sep	31st Dec 2017	25th October 2017
TRAN-1	31st Dec 2017	30th September 2017

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GST Reboot In-Depth analysis of 23rd GST council meeting

Relief in GSTR compliance

All businesses to file GSTR-1 and GSTR-3B till March 2018

GSTR-2 and GSTR-3 filing dates for July 2017 to March 2018 will be worked out later by a Committee of Officers

GSTR 4 due date for July to September extended to 24th December 2017

Turnover under Rs 1.5 Cr to file quarterly GSTR-1

Turnover above Rs 1.5 Cr to file monthly GSTR-1

Changes in Composition Scheme

Composition scheme limit to be increased to Rs 1.5 crore (can be extended to Rs 2 crore later)

1 % GST rate for manufacturers & traders

Composition tax of 1% on turnover of taxable goods (turnover of exempted goods to be excluded)

Composition Returns, GSTR-4 due date extended to 24th December

Those supplying goods and services (services not exceeding Rs 5 lakhs in total) eligible for compositions scheme

Composition dealers cannot make inter-state sales. Input tax benefit not allowed.

Relief for service providers

All service providers with turnover up to Rs 20 lakhs exempt from GST registration. Including those who supply inter-state or supply through e-commerce operator, such service providers do not have to register.

Changes in GST Rates W.e.f. 15th Nov 2017

Only 5% GST (instead of 12% & 18%) on food bills in restaurants 🍕

Reduced from 28% to 18% - Shampoo, Perfume, tiles, watches ⌚️

Reduced from 28% to 12% - Wet grinders, tanks

Reduced from 18% to 12% - condensed milk, refined sugar, diabetic food

Reduced from 12% to 5% - desiccated coconut, idli dosa batter, coir products 🍚

Reduced from 5% to nil - guar meal, khandsari sugar, dried vegetables

Restaurants within hotels (room tariff <7,500- 5% without ITC

Restaurants within hotels (room tariff >7,500 ) still 18% with ITC

1 % composition rate for manufacturers & traders

Outdoor catering 18% with ITC

Late Fees reduced

           For delayed filing of NIL returns, late fee reduced from Rs 200 per day to Rs 20 per day

For Expert Assistance in GST Advisory, Filing, Training, Invoicing, Accounting call us at 9900397777 mail us at info@preethamandco.com

Key Takeaways from 23rd GST Council Meet

Quick insight to Payments Bank.

Payments banks is a new model of banks conceptualized by the Reserve Bank of India (RBI) with the objective of achieving financial inclusion and increased access to financial services. A payments bank is like any other bank, but operating on a smaller scale without involving any credit risk. It can carry out most banking operations but can't advance loans or issue credit cards. It can accept demand deposits (up to Rs.1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers. 

Why payments banks? The main objective of payments bank is to widen the spread of payment and financial services to small business, low-income households, migrant labour workforce in secured technology-driven environment. With payments banks, RBI seeks to increase the penetration level of financial services to the remote areas of the country.

System	Access Deposits	Advance Loans	Make Payment
Commercial Banks like SBI, PNB	YES	YES	YES
Payment Network operations (Master Card, Visa)	NO	NO	YES
Payments Bank	YES	NO	YES

Join the revolution. Start your Digital Savings Account today!

Source: Wiki, The Economic Times. Complied and Presented by Preetham Shetty & Co. Chartered Accountants

Deadline for Filing Tax Audit Reports Extended

Due date for filing ITRs&Tax Audit Reports under ITAct has been extended from30.09.2017to07.11.2017 for those liable to file ITRs by30.09.17

— Income Tax India (@IncomeTaxIndia) October 31, 2017