India Regulatory Brief: Tax Filing for NRIs, No Environmental Clearance for Solid Waste Management Projects
Invoice upload utility on GSTN portal from July 24
Businesses registered on the Goods and Services Network (GSTN) portal will be able to upload their invoices starting July 24. GSTN serves as the information technology platform that administers the GST regime. Once the portal launches the facility, businesses can upload their invoices on a weekly or daily basis – if they wish to avoid the month-end rush.
The GST kicked in on July 1, in a major reform of the indirect taxation system in India. Under the new regime, businesses need to generate invoices for transactions above US$3.11 (Rs 200) and maintain these invoice records in serial number – if they want to claim input tax credit (ITC).
Previously, the GSTN portal introduced an offline MS Excel format for businesses to record their invoices; now these can soon be uploaded.
India’s tax department targets NRI bank accounts
In the continuing attempt to prevent tax avoidance, income tax (IT) authorities have doubled down on non-resident Indians (NRIs) and their finances abroad. This is because of a widespread practice by those trying to escape the IT scanner, where individuals deposit money in offshore bank accounts, and legitimize their NRI status by staying 182 days outside the country. NRI status grants such individuals the right to claim these offshore funds as lawful income earned abroad.
To curtail this practice, the tax department has added a new provision in the income tax return form 2 (ITR2). This requires all NRIs to disclose all the details of their bank accounts and their locations outside India.
However, chartered accountants seem baffled by the sudden disclosure of information required, without any official change to the rules being notified. Moreover, there is confusion over providing such financial information when the Indian government cannot tax interest on income deposited in foreign banks. Finally, several tax havens have already agreed to sharing information with India to reduce scope for money-laundering.
Solid waste management projects exempt from environmental clearance
The environment ministry recently announced a blanket exemption for all solid waste management projects from requiring environment clearances. This is a clear boost to the government’s cleanliness initiatives under the Swachh Bharat Mission.
Barring landfill sites, all solid waste treatment and processing projects will benefit from this relaxation. Previously, urban department officials estimated that applying for green clearances could take anywhere from six months to a year. Moreover, there were different rules for different facilities.
Projects that will be exempt are those involved in door-to-door collection of waste, segregation, composting, refuse-derived fuel production, waste to energy generation through waste to energy plants, and disposal in scientific landfills.
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In this issue of India Briefing Magazine, we discuss payroll processing and reporting in India, and the various regulations and tax norms that impact salary and wage computation. Further, we explain India’s complex social security system and gratuity law, and how it applies to companies. Finally, we describe the importance of IT infrastructure, compliance, and confidentiality when processing payroll in India.
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