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Income Taxes | 12 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 18 – INCOME TAXES The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the maximum U.S. federal corporate tax rate from 35% to 21%, allows net operating losses incurred in 2018 and beyond to be carried forward indefinitely, allows alternative minimum tax carryforwards to be partially refunded, beginning in 2018, and fully refunded by 2021, and creates new taxes on certain foreign sourced earnings. The following is a geographical breakdown of (loss) income before the provision for income taxes:
|  | Year ended September 30, |
|  | 2018 |  |  | 2017 |
Domestic |  | $ | (5,864,209 | ) |  | $ | (148,185 | )
Foreign |  |  | (4,761,409 | ) |  |  | 4,653,748 |
Income before provision for income taxes |  | $ | (10,625,618 | ) |  | $ | 4,505,563 |
The provision for income taxes consisted of the following:
|  | September 30, 2018 |  |  | September 30, 2017 |
Current (benefit)/provision |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | (38,059 | )
State |  |  | 1,859 |  |  |  | (12,686 | )
Foreign |  |  | 245,419 |  |  |  | 166,393 |
Total current (benefit)/provision |  |  | 247,278 |  |  |  | 115,648 |
Deferred provision |  |  |  |  |  |  |  |
Federal |  |  | (2,155,797 | ) |  |  | - |
State |  |  | (667,270 | ) |  |  | - |
Foreign |  |  | 16,385 |  |  |  | - |
Total deferred provision |  | $ | (2,806,682 | ) |  | $ | - |
Total (benefit)/provision for income taxes |  | $ | (2,559,404 | ) |  | $ | 115,648 |
Effective Income tax rate |  |  | 24.09 | % |  |  | 2.57 | %
The following is a reconciliation of the effective income tax rate to the federal and state statutory rates:
|  | For the Fiscal Year |  |  | For the Fiscal Year |
|  | Ended |  |  | Ended |
|  | September 30, 2018 |  |  | September 30, 2017 |
U.S. statutory rate |  |  | 21.00 | % |  |  | 34.00 | %
State statutory rate |  |  | 6.50 | % |  |  | 9.00 | %
Foreign tax rate differential |  |  | -2.22 | % |  |  | -40.72 | %
Nondeducttible expenses |  |  | -1.20 | % |  |  | 0.29 | %
Effective rate |  |  | 24.09 | % |  |  | 2.57 | %
The effective tax rate decreased mainly due to the change from net income in 2017 to net loss in 2018 and from the impact of the decrease in federal and state income tax rates in 2018. The components of our deferred tax assets and liabilities are summarized as follows:
|  | September 30, 2018 |  |  | September 30, 2017 |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  |  | 4,153,803 |  |  |  | - |
Fixed asset depreciation |  |  | 254,579 |  |  |  | - |
Prepaid expenses |  |  | 12,837 |  |  |  | - |
Gain/loss on fixed asset disposal |  |  | 31,747 |  |  |  | - |
Allowance for bad debt |  |  | - |  |  |  | - |
Total gross deferred taxes |  |  | 4,452,966 |  |  |  | - |
Valuation allowance |  |  | (1,485,437 | ) |  |  | - |
Net deferred tax assets |  |  | 2,967,529 |  |  |  | - |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Accrued vacation |  |  | (4,336 | ) |  |  | - |
Goodwill amortization |  |  | (71,101 | ) |  |  | - |
Research and development expenses |  |  | (69,025 | ) |  |  | - |
Depreciation |  |  | (1,907,385 | ) |  |  | (1,891,000 | )
Total deferred tax liabilities |  |  | (2,051,847 | ) |  |  | (1,891,000 | )
Total deferred tax assets (liabilities) |  |  | 915,682 |  |  |  | (1,891,000 | )
Recorded as: |  |  |  |  |  |  |  |
Non-current deferred tax assets (in other assets) |  |  | 2,967,529 |  |  |  | - |
Non-current deferred tax liabilities |  |  | (2,051,847 | ) |  |  | (1,891,000 | )
Total deferred tax assets (liabilities) |  |  | 915,682 |  |  |  | (1,891,000 | )
As of September 30, 2018, the recorded deferred tax assets were $4,452,966, for the United States and India, offset by a valuation allowance of $1,485,437. At September 30, 2018, the Company has $9,703,148 of operating loss carryovers, expiring at various dates from 2027 through 2030.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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