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Youtube – CSR – Do’s and Dont’s – latest Notifications, guidelines Hotel Marriot, Jaipur

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Youtube – CSR – Do’s and Dont’s – latest Notifications, guidelines Hotel Marriot, Jaipur

Ideas for better CSR compliance. Useful for Small and Medium Companies,

Good & “Practical” ideas.

CSR – Do’s and Dont’s – latest Notifications, guidelines , shot by Finsys Team at Hotel Marriot, Jaipur.

Prevent the risk of Penalty of 200% . Making you safer.

CSR

Did you know about this
200% Penalty… for just mistakes / non compliances

Wishing you More Profits
From 5 to 10 to 20 to 50 to 100 Crores per annum

CSR Tax

THIS IS LIKE A CSR TAX

Detailed checklist
Bill to you, & Ship-to Recipients
One of the best ways of protecting and complying…
Direct payment to Vendor
and Direct delivery of the Actual Goods / Services

Take a Thank you Letter
after delivery of the Actual Goods / Services

Photo also helps
But… direct delivery and direct payment is very important, preferable
CONTACT YOUR CA
YOUR CS / AUDITOR
TAKE PROFESSIONAL ADVICE
FINSYS TEAM , AT YOUR SERVICE

  • This is now Year to Year – so, no need to pay CSR,if last year profit was below 5 Crores ( WOW )
  • Do not give donation to any NGO that has not filed the form CSR-1 and does not have a MCA’s CSR number
  • Do not entertain an NGO that does not have 80G + Take a copy from him of 80G registration
  • Do not entertain an NGO that does not have 10A registration ( income tax exemption) + Take a copy
  • Don’t use the funds to create an movable or immovable asset / any fixed asset… if you do, it must not be in your own company name. It mut be in name of the NGO, not yours
  • Your website must have a separate Page for CSR with required details. Like committee,policy etc
  • 100% of the CSR must be spent by you preferably by 28th February of that year… reason : else risk of “chq in transit” or risk of end user not spending it, and hence 200% penalty
  • if you pay to any NGO… Must get a Utilisation certificate from the NGO in correct format ( contact us for format )
  • CSR committee minutes required on record… 4 meetings in a year.. Minutes required.. Showing that progress was seen
    a four page CSR annexure II to the Directors Report.. Is mandatory. ( contact us for format )
  • CFO certificate to the Board is mandatory… (contact us for format)
  • Try to spend directly, that is the best, example : Spend on purchase of Aata / Food material / Winter clothing etc directy and handover on the Delivery challan of your company… with a thank you letter from any NGO . If possible

Take Guidance of your CA / CS team / Auditors regularly. Monitor this every month / three months.

Finsys is. an ERP Software that helps you Make more money from your men, machines, materials and existing money. This is by implementing the best methods.

Learned out of last 32 years intenstive work with the industry . From India to USA, From Nepal to Nigeria. From Ambala to Angola, From Gujarat to Goa. From Assam to Saudi Arabia, from UAE to UP,

Better ERP, More Profit … and More Profits More CSR Payments

ERP definition in detail ? ERP stands for enterprise resource planning, but what does ERP mean? The simplest way to define ERP is to think about all the core business processes needed to run a company: finance, HR, manufacturing, supply chain, services, procurement, and others…..  

Somebody else would say… a ERP means a single software which help runs all departments.. from Purchase, Sales, Stores, Accounts, Production,  Quality … From Gate to Gate.

Youtube – CSR – Do’s and Dont’s – latest Notifications, guidelines Hotel Marriot, Jaipur

 

What are the CSR guidelines in simple language ? How to prevent penalty ? Simple Audit checklist for CSR. Simple excel

ICSI CSR Guidelines on ICSI page

ICAI Handbook on Audit on CSR . Click here

Contact us at Contact us page

So, you have reached the end of the page ? . ….Now you can see the Nice video below….

Nice Location, Nice Topic. Presented in an Interesting way.

Tips in MSME 43B -Income Tax

Tips in MSME 43B(h) -Income Tax

dated 2-March-2024 : 9 am

  1. Have you made your Financial Budget to pay all eligible MSME vendor’s : Arrange Funds as soon as possible. Keep Buffer for new creditors, new invoices of this period.

  2. Sent letters to all creditors ? Kept evidence ?

  3. Do you have letters or MOU with each MSME vendor, … with overriding clause for 45 days, irrespective of the PO’s and Invoices. ( get the format in the Google drive link below )
  4. Reduce your advance tax ? Pay MSME in Advance. …. yes possible ( most likely.) But conditions apply. Risk involved. But likely due to a past Supreme Court Judgement
  5. turnover sales

  6. Sales Idea.. if you have power to do more sales, and have sufficient funds : Deregister in MSMED Act…. give affidavit to your Potential Customers… “Get More Sales” and “Get more Margin”

  7. Non Registered MSME Vendors ….? The Udhyam Adhar is compulsory. No need to see the Balance Sheet, or take a CA Certificate. Not relevant and not required.

  8. Past or Future ? Future bills only ( 1-4-2023 are not in problem in this section.. they are problem in section 41 .. with bigger consequences

  9. Three year MSME category Rule notification dt 18-10-2022.. Change of category upwards… you can take the benefit of previous classification for three long years. Yes you can. ( see notification in the Google drive link below )

  10. Cheque Hand over ?? This idea can work only if you have 100% clear balance in your bank account… Else… It will not be acceptable

  11. Towards a New INDIA
  12. Faster business cycles. Money is coming automatically to most MSME’s .. every day… Congratulations.

  13. Hope the PSU’s also start paying in the same way. The PSU chief will be shocked with huge tax if he does not organise the payments to all the MSME vendors in time… this will create a new culture.

 

Ideas, Tips, things to take care of… MSME act related 43B(h) income tax topic . Good ideas you can work around with and make more money.

Google Drive link for the Powerpoint presentation of the Session by Mr Sangeet Kr Gupta. in the last Zoom seminar

 

Partnership Deed– Steps

Partnership Deed : Things to remember in documentation

Sirs,
Use a proper template of Partnership Deed
Try to incorporate the stamp paper in the document itself
1. Please print Two Original Sets
2. Stamp of Company on each page… at bottom, and last page only on upper part, noted for signatures
3. sign of one partner as director with the above stamp
4. sign of second partner at relevant places
5. your sign as witness
6. Anybody’s sign as 2nd witness
6A. Put date manually by hand on top page… after all signatures…  .. usually same date as Notarise date
7. Notarise
8. give one original to partner
9. Keep second original set in your office
10. Send scanned copy for PAN and GST etc to us
11. after PAN, apply to bank for bank account
Partnership Deed Printing and Signatures points to remember

Zoom Webinar – MLG Associates- MSME 43B Disallowance – What to do ?

Webinar on Zoom. – Important MSME : 43B(h) : New income tax provisions …

Powerpoint and study material of the webinar … at the bottom of this page

What to do ? How much tax provision to make ? Pay additional tax ? Pay vendors in Time ? What to communicate ? How ? Future expectation ?
Finsys zoom meeting webinar
MLG Associates zoom meeting webinar

Thanks to all attendees.

It was a Successful Zoom Session Date 17-Feb-2024 (Saturday) 3.00 pm onwards upto 4.40 pm.

Please below attached the Zoom Meeting Link

Agenda :- 43B Amendment on Disallowance of Expenses on Unpaid Bills to MSEs. What Businesses should do?

Meeting ID: 622 750 8445
Passcode: 123456


Thanks for Joining us on Zoom Meeting that date/time
https://us02web.zoom.us/j/6227508445?pwd=V2d5cU1wNXV1a1NRc1N6Vm1Ja29Gdz09&omn=88220331465

Must be watched by :  MD, All Directors, Promoter Family member, GM – Finance, Accounts & Taxation Dept Team members,

Also your Purchase Department, who interact with Suppliers.

 

AGENDA

What is the Law ? How it will affect you ?

Provision for Additional Taxes this year ? Plan for Retention Money ? Plan for Disputed money’s ?

Evidence of Communication with the Suppliers ?

Traders as MSME ?

How to reply to your Customer yourself ?

Annual update of the MSME number / website ?

Any Queries .. Contact us at contact us page

MLG Zoom webinar MSME Act . How this affects you, How to manage the situation ? Be Ready. Solutions – How Good and How Bad ?

Try to Watch this session jointly with your team, in your own conference room... since joint discussion may continue after this IMPORTANT Zoom session.

 

What to do ? How much tax provision to make ? Pay additional tax ? Pay vendors in Time ? What to communicate ? How ? Future expectation ?

Google Drive link for the Powerpoint presentation of the Session by Mr Sangeet Kr Gupta.

 

keywords : MLG Zoom Seminar MSME Act 43B(h) income tax disallowance and solutions,

What to do ? How much tax provision to make ? Pay additional tax ? Pay vendors in Time ? What to communicate ? How ? Future expectation ?

GST on Corporate Guarantee , GST on personal Guarantee


Advisory to MLG Clients : GST on Corporate Guarantee , GST on personal Guarantee

What is the final position on Corporate Guarantee Fee or Directors Personal Guarantee Fee ? GST to be charged or not ? What to do ?

Short Summary

Actually, NIL / Zero commission taken for giving Personal Guarantee  

  • If you are not paying any amount to the Director for such service … Normally it is like this only. No MSME Director takes this fee from his own company.
  • Infact, bank sanction letter also usually says so, that you shall give Guarantee… and you shall not charge any commission or fee for the same.
  • Then Value of this service for GST will be mandatory taken as ZERO. And thus, the GST on this will be ZERO

Corporate Guarantee to Group companies

  • If your 1 company is giving Corporate Guarantee to your group company, associate company or subsidiary company.
  • Then, even if you are not paying any amount to the second company for such service …
  • Then Value of this service for GST will be mandatory taken as 1%. And thus, the GST on this will be 18% of that 1%.

Example : Calculations for Corporate Guarantee  Fees to Group companies

  • Main company : ABC Pvt Ltd. Has a standing of 20 years with large profits and large turnover
  • New company is DEF Pvt Ltd, It is formed in 2022. Just a new entity. It has applied for Loan of Rs 10 crores with the State Bank of India.
  • SBI wants Corporate Guarantee
  • so, ABC gives Corporate Guarantees to Bank for DEF for this loan of Rs 10 crores
  • So, what is the GST payable ?
  • Value of this service for GST will be mandatory taken as 1%. That is 1% of 10 cr = Rs 10 lakh
  • And thus, the GST on this will be 18% of that 10 lakhs = Rs 1.80 lakhs.
  • Best will be ABC should (a) tell the bankers that you are doing as per this government circular (b) issue a tax invoice for Rs 10  lakhs. Charge GST of 18% on that
  • and DEF should book the invoice and take ITC on the same.
  • DEF should also deduct TDS as per law.
  • there is no net cost, since both get credit of ITC and TDS as applicable.

Source : The Law says as such

ii) Clarifications regarding taxability of personal guarantee offered by directors to the bank against the credit limits/loans being sanctioned to the company and regarding taxability of corporate guarantee provided for related persons including corporate guarantee provided by holding company to its subsidiary company: The Council has inter alia recommended to:

(a) issue a circular clarifying that when no consideration is paid by the company to the director in any form, directly or indirectly, for providing personal guarantee to the bank/ financial institutes on their behalf, the open market value of the said transaction/supply may be treated as zero and hence, no tax to be payable in respect of such supply of services.

(b) to insert sub-rule (2) in Rule 28 of CGST Rules, 2017, to provide for taxable value of supply of corporate guarantee provided between related parties as one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher.

(c) to clarify through the circular that after the insertion of the said sub-rule, the value of such supply of services of corporate guarantee provided between related parties would be governed by the proposed sub-rule (2) of rule 28 of CGST Rules, 2017, irrespective of whether full ITC is available to the recipient of services or not.

other sources

link 1 : https://www.caclubindia.com/articles/gst-on-personal-corporate-guarantee-50598.asp#:~:text=Changes%20recommended%20in%2052nd%20GST%20council%20meeting%3A&text=It%20is%20also%20clarified%20that,CGST%20dtd%2027th%20October%202023.

Note: Safe Harbor Rules issued by CBDT provides that commission or fee would be considered at 1% of amount guaranteed in case of Corporate Guarantee given to wholly owned subsidiary. Similar valuation principle being considered for GST purpose as well.

Link 2 : https://www.caclubindia.com/articles/analysis-of-taxability-of-personal-guarantee-and-corporate-guarantee-under-gst-from-october-2023-50499.asp

FAQ1. Going forward what would be the value of taxable supplies of service of provision of corporate guarantee by a company to the bank/financial institutions for providing credit facilities to the other company?

Comments – In case of supply between unrelated parties, the value of supply would be as determined in the invoice, in case raised. However, in case of related persons the value of supply would be 1% of the amount of such guarantee offered, or the actual consideration, whichever is higher.

FAQ2. Would the value as per transfer pricing norms in Income Tax affect GST on provision of corporate guarantees?

Comments – Generally as Transfer pricing norms, the value of corporate guarantees is taken as 0.5%. The same may be treated as ‘open market value’ for periods before Rule 28(2). However, post Rule 28(2), the value determined herein i.e. 1% may be considered for transfer pricing regulations.

6. Since director is also a ‘related person’, is the personal guarantee provided by him/her to the company liable to also be taxed as per Rule 28(2)?

Comments – No. Rule 28(2) shall not apply in respect of the activity of providing personal guarantee by the Director to the banks/ financial institutions for securing credit facilities for their companies and no GST would be chargeable on the said transaction.

7. Whether Personal guarantees provided by directors to the banks/ financial institutions for securing credit facilities for their company is taxable under GST?

Comments – The activity of providing personal guarantee by the Director to the banks/ financial institutions for securing credit facilities for their companies is to be treated as a supply of service, even when made without consideration as per Section 7 and read with Schedule I Entry 2 of The CGST Act 2017. In terms of Rule 28 of CGST Rules, the taxable value of such supply of service shall be the open market value of such supply.

 

 

However, as per RBI guidelines, the no consideration by way of commission, brokerage fees or any other form, can be paid to the director by the company, directly or indirectly, in lieu of providing personal guarantee to the bank for borrowing credit limits. As such, when no consideration can be paid for the said transaction by the company to the director in any form, directly or indirectly, as per RBI mandate, there is no question of such supply/ transaction having any open market value. Accordingly, the open market value of the said transaction/ supply may be treated as zero and therefore, taxable value of such supply may be treated as zero. In such a scenario, no tax is payable on such supply of service by the director to the company.

8. Generally banks take the corporate or personal guarantees of a value much higher than the value of the loan. What would be the value of supply for GST purposes in such cases?

Comments – For personal guarantees, the value of supply would be NIL in case they are issued in compliance with RBI guidelines. However, for corporate guarantee cases, the value of supply would be 1% of the amount of such guarantee offered.

9. What about Personal guarantees provided by ex-directors/ KMP to the banks/ financial institutions for securing credit facilities for their companies. Is it taxable under GST?

Comments – In case where the director, who had provided the guarantee, is no longer connected with the management but continuance of his guarantee is considered essential because the new management’s guarantee is either not available or is found inadequate, or there may be other exceptional cases where the promoters, existing directors, other managerial personnel, and shareholders of borrowing concerns are paid remuneration/ consideration in any manner, directly or indirectly.

In all these cases, the taxable value of such supply of service shall be the remuneration/ consideration provided to such a person/ guarantor by the company, directly or indirectly.

However, again to be noted that in case ‘no consideration’ is paid then, even in these circumstances no GST is leviable as they are then not related.

10. What about Personal guarantees provided by director’s relatives to the banks/ financial institutions for securing credit facilities for the companies. Is it taxable under GST?

Comments – In case such person is to be considered as a ‘related party’ as explanation to Section 15 of The CGST Act 2017 and as per mandate provided by RBI in terms of Circular No. RBI/2021-22/121 dated 9th November, 2021, or other regulations, no consideration can be paid to the said persons, directly or indirectly, in lieu of providing personal guarantee to the bank for borrowing credit limits; As such, when no consideration can be paid for the said transaction by the company to the person in any form, directly or indirectly, as per RBI mandate, there is no question of such supply/ transaction having any open market value. Accordingly, the open market value of the said transaction/ supply may be treated as zero and therefore, taxable value of such supply may be treated as zero. In such a scenario, no tax is payable on such supply of service by the director to the company. However, incase there is no such mandate by the RBI, then Rule 28(2) may be applicable depending upon the facts of the case.

 

Details can be seen Vide Notification 52/2023

link : https://blog.saginfotech.com/cbic-central-tax-notification-52-2023-gst-reg-01-opc#:~:text=52%2F2023%20Related%20to%20GST%20REG%2D01%20For%20OPC,-October%2028%2C%202023&text=The%20Central%20Board%20of%20Indirect,a%20%27One%20Person%20Company%27.

How to make such invoice in your Finsys ERP Software :

Make Service bill as usual

(a) Open SAC code, (b) Open 59 series item as a service item (c) Book a Sales order in 41series as a service order, Approve it (d) Make invoice. And make E invoice as applicable.

Helpline contact us page

 

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