Taxes

12 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

TAXES

NOTE 12 – TAXES

(a) Corporate Income Taxes (“CIT”)

The Company was incorporated in the Cayman Islands and is not subject to tax on income or capital gain under the laws of the Cayman Islands.

Happiness Hong Kong was incorporated in Hong Kong and is subject to a statutory income tax rate of 16.5%.

Under the Law of the People’s Republic of China on Enterprise Income Tax (“New EIT Law”), which was effective from January 1, 2008, both domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25% while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Fujian Happiness, the Company’s main operating entity in PRC, was approved as HNTEs and is entitled to a reduced income tax rate of 15% from December 2019 to December 2022.

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2021 and 2020, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the years ended March 31, 2021 and 2020, respectively, and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2021.

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

	For the years ended March 31,
	2021			2020			2019
PRC statutory income tax rate		25	%		25	%		25	%
Effect of PRC preferential tax rate		(10	)%		(10	)%		(10	)%
Effect of other deductible expenses		7.4	%		3.3	%		(0.5	)%
Total		22.4	%		18.3	%		14.5	%

The provision for income tax consisted of the following:

	For the years ended March 31,
	2021		2020		2019
Current income tax provision	$	959,384	$	2,844,087	$	3,183,154
Deferred income tax provision		-		-		-
Total	$	959,384	$	2,844,087	$	3,183,154

Deferred income taxes reflect the net effects of temporary difference between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. The Company recorded no deferred tax assets and liabilities as of March 31, 2021, 2020 and 2019, as there were no material temporary difference between the carrying amounts of assets and liabilities.

(b) Income Tax Payable

The Company’s taxes payable as of March 31, 2021 and 2020 consisted of the following:

	As of March 31,			As of March 31,
	2021			2020
Income tax payable	$	377,025		$	568,830
VAT payable		(53,035	)		109,414
Other tax payables		10,533			18,408
Total	$	334,523		$	696,652