CASH PAYMENTS OVER RS 2 LAKH , MEIS WITHDRAWAL & STAMP PAPER DO NOT H...

PENALTY ON RECEIPT OF AN AMOUNT OF RS. 2 LAKH OR
MORE IN CASH UNDER INCOME -TAX ACT ,1961

Section 269ST (as inserted by the Finance Act, 2017 with effect from
1/4/2017) provides that no person shall receive an amount of Rs. 2,00,000 or
more,

(a) In aggregate
from a person in a day;

[As amended by Finance Act, 2020]

(b) In respect of a
single transaction; or

(c) In respect of transactions relating to one event or occasion from a person,

otherwise than by an account
payee cheque or account payee bank draft or use of electronic clearing system
through a bank account, or through such other electronic mode as may be
prescribed.

However, the said restriction shall not apply to Government, any banking company, post office
savings bank, co-operative bank or a person notified by the Central
Government.

Penalty for Contravention of Section 271DA

Section 271DA provides for levy
of penalty on a person who receives a sum in contravention of the
provisions of section 269ST. The penalty shall be equal to the amount of such receipt. However, the
penalty shall not be levied if the person proves that there were good and sufficient reasons for
such contravention

Example:

X organizes a marriage reception in a star hotel and
the hotel charges him a bill of Rs 5 Lakh. X clears the bill in 5 installments
of Rs 1 Lakh each on four different dates. Here, the cash receipts got by hotel
are less than Rs 2 Lakh received on different dates but it is related to a single bill/ single
transaction. Here, Hotel will be liable for the penalty of Rs 5 Lakhs.
So, splitting of payments over several days will also attract penalty.

MEIS SCHEME INCENTIVE IS WITHDRAWN AGAINST THE EXPORTS MADE FROM 01
JANUARY 2021

MEIS SCHEME ( DGFT ): MERCHANDISE EXPORT FROM
INDIA SCHEME

What is MEIS Scheme ?

More than 4000 items of
exports are eligible to get benefit under MEIS DGFT. Under MEIS Scrips shall be
granted as rewards. The value of the scrips is 2% to 5% of the FOB value of goods exported. The
Scrips shall be freely transferable against goods imported / domestically
procured. First time exporters from SEZ are also covered under this initiative.

Objective of MEIS Scheme DGFT

Merchandise Exports from India Scheme (MEIS) Aims to offset infrastructural
inefficiencies and associated costs involved in export of goods or products
produced as well as manufactured in the country, especially products of high
export intensity, employment potential and to improve India’s export
competitiveness in the world market. Under Merchandise Exports from India Scheme, GOI provides up to 5%
incentives to exporters.

Following are the main features of MEIS scrip:

They are issued to exporters

The scrip allows duty deduction (non-payment of taxes) of a specified amount
in the scrip. The scrip value or the amount of tax deduction will be specified
in the scrip.

The scrip value or tax reduction is expressed as a percentage of export
turnover of the exporter.

The scrip value usually varies between 3 per cent to 5 per cent under
Foreign Trade Policy 2015.

What is Duty Credit scrip?

Duty Credit scrips are scrips given to exporters as “incentives” by the
Government of India. Through Merchandise Exports from India Scheme (MEIS
Scheme) scrips are given for goods exports and through Service Exports from
India Scheme (SEIS Scheme)scrips are given for services exports

Recent Amendment

MEIS incentive is withdrawn against the exports made from 01 January
2021

- MEIS incentive against exports made between 01 September 2020 and 31
December 2020 is limited to 2 Crores per IEC subject following additional
conditions

1. No MEIS incentive for exporters registered for IEC after 01 September
2020

2. No MEIS incentive for exporters who have not made exports during one
year preceding 01 September 2020

3. The MEIS incentive may be subject to downward revision of the
incentives claimed crosses allocated budget of 5000 crores

4.Benefit of MEIS for exports for the period from 01.09.2020 to
31.12.2020 is restricted to Rs. 2 crores per IEC.

5- Benefit of MEIS is not eligible to IEC holder who did not do any
export during the period from 01.09.2019 to 31.08.2020 as well as new IEC
holder who registered after 01.09.2020.

6- Benefit of MEIS is not eligible with effect from 01.01.2021