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INCOME TAXES | 12 Months Ended
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Sep. 30, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 20 – 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. At September 30, 2021, the Company had approximately $37,099,262 of federal and $13,726,364 of state net operating losses. The net operating loss carryforwards, if not utilized, will begin to expire in 2036 for federal purposes and in 2036 for state purposes. The company is currently reviewing net operating losses for Section 382 limitation purposes and will make any required adjustments to the net operating losses at the completion of the study. The following is a geographical breakdown of loss before the provision for income taxes: SCHEDULE OF (LOSS) INCOME BEFORE PROVISION FOR TAX
|  | Year ended September 30, |
|  | 2021 |  |  | 2020 |
|  |  |  |  | Restated |
Domestic |  | $ | 30,957 |  |  | $ | (6,422,704 | )
Foreign |  |  | 738,255 |  |  |  | (933,531 | )
Loss before provision for income taxes |  | $ | 769,212 |  |  | $ | (7,356,235 | )
Cemtrex Inc. and Subsidiaries The provision for income taxes consisted of the following: SCHEDULE OF PROVISION FOR INCOME TAXES
|  | September 30, 2021 |  |  | September 30, 2020 |
|  |  |  |  | Restated |
Current (benefit)/provision |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | 375,434 |  |  |  | (209,032 | )
Foreign |  |  | - |  |  |  | - |
Total current (benefit)/provision |  |  | 375,434 |  |  |  | (209,032 | )
Deferred provision |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | 2,282,867 |
State |  |  | - |  |  |  | - |
Foreign |  |  | - |  |  |  | - |
Total deferred provision |  | $ | - |  |  | $ | 2,282,867 |
Total (benefit)/provision for income taxes |  | $ | 375,434 |  |  | $ | 2,073,835 |
Effective Income tax rate |  |  | 48.81 | % |  |  | -28.19 | %
The following is a reconciliation of the effective income tax rate to the federal and state statutory rates: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
|  | For the Fiscal Year |  |  | For the Fiscal Year |
|  | Ended |  |  | Ended |
|  | September 30, 2021 |  |  | September 30, 2020 |
|  |  |  |  | Restated |
U.S. statutory rate |  |  | 21.00 | % |  |  | 21.00 | %
State statutory rate |  |  | 6.50 | % |  |  | 6.50 | %
Foreign tax rate differential |  |  | 0.00 | % |  |  | 0.00 | %
Change in valuation allowance |  |  | 0.00 | % |  |  | -30.78 | %
Effect of change in rates |  |  | 0.00 | % |  |  | 0.00 | %
Permanent differences |  |  | 21.31 | % |  |  | -24.91 | %
Effective rate |  |  | 48.81 | % |  |  | -28.19 | %
Cemtrex Inc. and Subsidiaries The components of our deferred tax assets and liabilities are summarized as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
|  | September 30, 2021 |  |  | September 30, 2020 |
|  |  |  |  | Restated |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 8,702,738 |  |  | $ | 20,482,973 |
Inventory |  |  | 1,405,057 |  |  |  | - |
Prepaid expenses |  |  | - |  |  |  | - |
Allowance for bad debt |  |  | 35,345 |  |  |  | 3,491 |
Fixed Assets |  |  | - |  |  |  | 19,271 |
Goodwill amortization |  |  | - |  |  |  | - |
Non-qualified stock options |  |  | - |  |  |  | - |
Warrants (interest expense) |  |  | 1,155,642 |  |  |  | - |
Accruals |  |  | 280,447 |  |  |  | 2,699,246 |
Warranty Reserve |  |  | 28,002 |  |  |  | - |
Foreign Tax Credits |  |  | - |  |  |  | 354,000 |
Other |  |  | 4,358 |  |  |  | - |
Total gross deferred taxes |  |  | 11,611,589 |  |  |  | 23,558,981 |
Valuation allowance |  |  | (9,491,650 | ) |  |  | (22,720,711 | )
Net deferred tax assets |  |  | 2,119,939 |  |  |  | 838,270 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Inventory and other Reserves |  |  | (638,230 | ) |  |  | - |
Inventory |  |  | - |  |  |  | (2,277 | )
Prepaid expenses |  |  | (87,934 | ) |  |  | (45,563 | )
Goodwill amortization |  |  | (557,074 | ) |  |  | (428,395 | )
Research and development expenses |  |  | - |  |  |  | - |
Depreciation |  |  | (836,701 | ) |  |  | (319,090 | )
Gain/loss on fixed asset disposal |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | (42,945 | )
Total deferred tax liabilities |  |  | (2,119,939 | ) |  |  | (838,270 | )
Total deferred tax assets (liabilities) |  | $ | - |  |  | $ | - |

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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