Income Taxes

12 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

16. INCOME TAXES

The Company formed in Cayman Islands is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax is imposed.

The Company subsidiary formed in British Virgin Island is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax is imposed.

The Company's subsidiary formed in Hong Kong is subject to the profits tax rate at 16.5% for income generated and operation in the special administrative region.

The Company's subsidiaries incorporated in the PRC are subject to profits tax rate at 25% for income generated and operation in the country.

The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period.

The Company's subsidiaries incorporated in the PRC has unused net operating losses ("NOLs") available for carry forward to future years for PRC income tax reporting purposes up to five years. The Company recorded a deferred tax asset in the amount of $0 and $0 at March 31, 2020 and 2019, respectively.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Based on the assessment, the Company has established a deferred tax asset relating to NOLs at March 31, 2020 due to the Company's performance in the upcoming years. However, the Company established a full valuation allowance against all of the deferred tax asset relating to NOLs because the benefit from utilization of NOL carry forwards could be subject to limitations as material structural changes resulted from the Company going public through VIE arrangement on August 19, 2016.

Longyun was granted a two year tax holiday by the local PRC government; accordingly, the have not accrued any income tax expense for the year ended March 31, 2020.

The following table reconciles the statutory rates to the Company's effective tax rate:

	For the Years Ended
	March 31, 2020			March 31, 2019			March 31, 2018
Statutory rates in Cayman Islands and BVI		0.0	%		0.0	%		0.0	%
Statutory rates in Hong Kong		16.5	%		16.5	%		15.0	%
Statutory rates in PRC		25.0	%		25.0	%		25.0	%
Temporary tax holiday in the PRC		-25.0	%		-25.0	%		0.0	%
Foreign earned income not subject to taxes in the Cayman Island		-16.5	%		-16.5	%		-40.0	%
Additional accruals in the PRC		0.0	%		0.0	%		83.5	%
Effect of valuation allowance		0.0	%		0.0	%		0.0	%
Effective income tax rate		0.0	%		0.0	%		83.5	%

	For the Years Ended
	March 31, 2020			March 31, 2019			March 31, 2018
Income (loss) before taxes:
Cayman Islands	$	(311,778	)	$	(700,400	)	$	(1,550,037	)
BVI		-			-			-
Hong Kong		(1,062	)		(45,955	)		63,343
PRC		(1,143,671	)		(1,020,951	)		2,245,611
Total income (loss) before taxes		(1,456,511	)		(1,767,306	)		758,917
Provision for taxes (benefits):
Cayman Islands		-			-			-
BVI		-			-			-
Hong Kong		-			-			-
PRC		-			-			633,614
Provision for income taxes (benefits)		-			-			633,614
Deferred tax assets:
Cayman Islands		-			-			-
BVI		-			-			-
Hong Kong		-			-			-
PRC		-			-			179,665
Less: Valuation allowance		-			-			(179,665	)
Currency effect		-			-			-
Deferred tax assets, net		-			-			-
Total provision for taxes	$	-		$	-		$	633,614
Effective tax rate		0.0	%		0.0	%		83.5	%
Effect of tax holiday inside the PRC on basic earnings per share		-			-			0.06