Taxes Payable

9 Months Ended

Mar. 31, 2024

Taxes Payable [Abstract]

TAXES PAYABLE

NOTE 11 – TAXES PAYABLE

Enterprise Income Tax

Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The two-year tax exemption and three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, because of the expiration of its tax exemption on March 31, 2007.

Value-Added Tax

All the Company’s fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 9% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009, continuing through March 31, 2015. On August 10, 2015 and August 28, 2015, the SAT released Notice #90. “Reinstatement of VAT for Fertilizer Products”, and Notice #97, “Supplementary Reinstatement of VAT for Fertilizer Products”, which restore the VAT of 13% of the gross sales price on certain fertilizer products includes non-organic fertilizer products starting from September 1, 2015, but granted taxpayers a reduced rate of 3% from September 1, 2015 through June 30, 2016.

On April 28, 2017, the PRC State of Administration of Taxation (SAT) released Notice 2017 #37, “Notice on Policy of Reduced Value Added Tax Rate,” under which, effective July 1, 2017, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 11% of the gross sales price. The tax rate was reduced 2% from 13%.

On April 4, 2018, the PRC State of Administration of Taxation (SAT) released Notice 2018 #32, “Notice on Adjustment of VAT Tax Rate,” under which, effective May 1, 2018, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 10% of the gross sales price. The tax rate was reduced 1% from 11%.

On March 20, 2019, the PRC State of Administration of Taxation (SAT) released Notice 2019 #39, “Announcement on Policies Concerning Deepening the Reform of Value Added Tax,” under which, effective April 1, 2019, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 9% of the gross sales price. The tax rate was reduced 1% from 10%.

Income Taxes and Related Payables

	March 31,			June 30,
	2024			2023
VAT provision	$	(571,042	)	$	(398,499	)
Income tax payable		(2,158,708	)		(2,132,400	)
Other levies		611,741			591,325
Repatriation tax		29,010,535			29,010,535
Total	$	26,892,526		$	27,070,961

The provision for income taxes consists of the following:

	March 31,			March 31,
	2024			2023
Current tax	$	(10,828	)	$	-
Deferred tax		-			-
Total	$	(10,828	)	$	-

Significant components of deferred tax assets were as follows:

	March 31,			June 30,
	2024			2023
Deferred tax assets
Deferred tax benefit		32,874,122			32,464,001
Valuation allowance		(32,765,474	)		(32,366,181	)
Total deferred tax assets	$	108,647			97,820

Tax Rate Reconciliation

Our effective tax rates were approximately 0.1% and 0% for the nine months ended March 31, 2024 and 2023, respectively. Substantially all the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of operations and comprehensive income (loss) differ from the amounts computed by applying the US statutory income tax rate of 21.0% to income before income taxes for the nine months ended March 31, 2024 and 2023 for the following reasons:

March 31, 2024

	China 15% - 25%					United States 21%					Total
Pretax loss	$	(15,060,332	)				(3,005,976	)				(18,066,308	)
Expected income tax expense (benefit)		(3,765,083	)	25.0	%		(631,255	)	21.0	%		(4,396,338	)
High-tech income benefits on Jinong		-		-			-					-
Losses from subsidiaries in which no benefit is recognized		3,754,255		-24.9	%		-					3,754,255
Change in valuation allowance on deferred tax asset from US tax benefit		-		-			631,255		-21.0	%		631,255
Actual tax expense	$	(10,828	)	0.1	%		-		-			(10,828	)	0.1	%

March 31, 2023

	China 15% - 25%					United States 21%					Total
Pretax loss	$	(1,474,883	)				(2,460,172	)			$	(3,932,555	)
Expected income tax expense (benefit)		(368,721	)	25.0	%		(516,636	)	21.0	%		(885,357	)
High-tech income benefits on Jinong		552,397		(37.5	)%		-		-			552,397
Losses from subsidiaries in which no benefit is recognized		(183,676	)	12.5	%		-		-			(183,676	)
Change in valuation allowance on deferred tax asset from US tax benefit		-		0	%		516,636		(21.0	)%		516,636
Actual tax expense	$	-		0	%	$	-		0	%	$	-		0	%