Latest Blogs from SBS and Company LLP

    SBS Wiki E Journal Aprl 2019

    In this edition, we bring to you certain important articles on various aspects. 

    The article on ‘Changes to Real Estate Sector – GST Perspective’ deals with the recent notifications issued in the context bringing changes to taxation aspects in real estate sector dealing with residential apartments. The rate of tax of 5% which is applicable for new projects which commences on or after 01.04.19 is coming without credit. Even though the new rate appears to be lower than old rate of 12%, the customer would be paying more tax because the credit which was erstwhile allowed and now not being allowed would sit in the cost of project on which customer would be asked to pay 5%. However, under the erstwhile scheme certain builders were collecting 12% and also not passing the benefit of input tax credit which has put the customer in highly disadvantageous position. Now that the builder is not allowed to avail credit, the question of passing of such benefit would not arise and accordingly the customer is benefitted to such an extent. 

    Further, the granting of exemption of development rights by the land owner to the builder is a welcome move and such an act of Government has helped a bit to the dying model of joint development agreement. Hence, I request all the readers to go through the said article to align their projects to the new scheme of taxation. 

    The article on ‘FEMA Compliances vis-à-vis Statutory Audit’ throws certain items which the Statutory Auditor has to examine before expressing true and fair view on the financial statements. Since this is the season of audits, I think this will help fellow professionals to have an understanding as to what aspects have to be examined from the FEMA perspective before expressing true and fair view. 

    The next article is on ‘Evolution of HR Audit’ deals with the overview of audit of HR function, the purposes as to why HR audit is required for the organization, the design and conduct of HR Audits and the process involved in HR Audits. Needless to say, HR is an important function of an organization and making sure that such HR activities align with the objectives of the organization and having an audit check on such process would help the organization in the long run. 

    The next article is on ‘Supplies made by SEZ to EOU – Taxability – SEZ Act vs Customs vs GST’ deals with the important issue as to whether supplies made by SEZ unit to EOU are taxable or not. From the perspective of SEZ Act, the tax on such supplies is required to be paid by EOU, however GST laws state that tax on such supplies shall be paid by SEZ unit. Hence, my team has made an attempt to reconcile both the laws and suggested view point on taxability of such supplies. 

    I hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.

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