Nov 30, 2015

New Rational Provision of TDS and TCS

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New Rational Provision of TDS and TCS
Under Chapter XVII-B of the Income-tax Act, a person is required to deduct tax on certain specified payments at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Income-tax Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) is also required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date.

47.2 In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Income-tax Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Income-tax Act has proved to be an effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector.

47.3 Finance (No.2) Act, 2009 inserted section 200A in the Income-tax Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Income-tax Act, the existing provisions of section 200A of the Income-tax Act did not provide for determination of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statements. Therefore, the provisions of section 200A of the Income-tax Act has been amended so as to enable
computation of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statement under section 200A of the Income-tax Act.

47.4 Currently, the provisions of sub-section (3) of section 200 of the Income-tax Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Income-tax Act inter alia provides processing of the TDS correction statement. However, there did not exist any provision in the Income-tax Act for allowing a collector to file correction statement in respect of TCS statement already furnished. Therefore, the provision of section 206C of the Income-tax Act has been amended so as to allow the collector to furnish TCS correction statement.

47.5 The Income-tax Act contains detailed provisions for processing of TDS statements, however, there did not exist any provision for processing of TCS statement. As the mechanism of TCS statement is similar to TDS statement, a new section 206CB has been inserted in the Income-tax Act for enabling processing of TCS statements on the lines of existing provision for processing of TDS statement contained in section 200A of the Income-tax Act. This newly inserted section also incorporates the mechanism for computation of fee payable under section 234E of the Income-tax Act for late furnishing of TCS statement.

47.6 Under the existing provisions of the Income-tax Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable. This intimation is (i) subject to rectification under section154 of the Income-tax Act; (ii) appealable under section 246A of the Income-tax Act; and (iii) deemed as notice of demand under section 156 of the Income-tax Act. As the intimation generated after the processing of TCS statement is similar to the intimation generated after processing of TDS statement, the provisions of the Income-tax Act have been further, amended to provide that intimation generated after processing of TCS statement shall also be—
(i) subject to rectification under section 154 of the Income-tax Act;
(ii) appealable under section 246A of the Income-tax Act; and
(iii) deemed as notice of demand under section 156 of the Income-tax Act.

47.7 As the intimation generated after proposed processing of TCS statement shall be deemed as a notice of demand under section 156 of the Income-tax Act, the failure to pay the tax specified in the intimation shall attract levy of interest as per the provisions to the limit of the amount deductible or collectible, shall be levied in case of failure to furnish the said statement.

47.13 Under section 192 of the Income-tax Act, the person responsible for paying income chargeable under the head “salaries” under the Income-tax Act (DDO) is authorised to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Income-tax Act for the purposes of estimating income of the assessee or computing the amount of the tax deductible under the said section.

47.14 The evidence/proof/particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the employee such as rent receipt for claiming exemption of HRA, evidence of interest payments for claiming loss from self occupied house property etc. is generally not available with the DDO. In these circumstances, the DDO has to depend upon the evidence/particulars furnished, if any, by the employees in support of their claim of deductions, exemptions, etc. As the
provisions of the Income-tax Act did not contain any guidance regarding nature of evidence/documents to be obtained by the DDO, there was no uniformity in the approach of the DDO in this matter.

47.15 In order to bring uniformity and certainty in this matter, the provisions of section 192 of the Income-tax Act have been amended so as to provide that the person responsible for paying, for the purposes of estimating income of the assessee or computing tax deductible under section 192(1) of the Income-tax Act, shall obtain from the assessee evidence or proof or particulars of the prescribed claim (including claim for set-off of loss) under the provisions of the Income-tax Act in the prescribed form and manner.


47.16 The existing provisions of sub-section (6) of section 195 of the Income-tax Act, prior to its amendment by the Act, provided that the person referred to in section 195(1) of the Income-tax Act shall furnish prescribed information. Section 195(1) of the Income-tax Act provides that any person responsible for paying any interest (other than interest referred to in sections 194LB or 194LC or 194LD of the Income-tax Act) or any sum chargeable to tax (not being salary income) to a non-resident, not being a company, or to a foreign company, shall deduct tax at the rates in force.


47.17 The mechanism of obtaining of information in respect of remittances fulfils twin objectives of ensuring deduction of tax at appropriate rate from taxable remittances as well as identifying the remittances on which the tax was deductible but the payer has failed to deduct the tax. Therefore, obtaining of information only in respect of remittances which the remitter declared as taxable defeats one of the main principles of obtaining information for foreign remittances i.e. to identify the taxable remittances on which tax was deductible but was not deducted.

47.18 In view of this, the provisions of section 195 of the Income-tax Act have been amended so as to provide that the person responsible for paying any sum, whether chargeable to tax or not, to a non-resident, not being a company, or to a foreign company, shall be required to furnish the information of the prescribed sum in such form and manner as may be prescribed. Further, there was no provision for levying of penalty for non-submission/inaccurate submission of the prescribed information in respect of remittance to non-resident.


47.19 For ensuring submission of accurate information in respect of remittance to nonresident, a new section 271-I has been inserted in the Income-tax Act to provide that in case of non-furnishing of information or furnishing of incorrect information under subsection (6) of section 195 of the Income-tax Act, a penalty of one lakh rupees shall be levied. Further, the provisions of section 273B of the Income-tax Act have been amended so as to provide that no penalty shall be imposable under this new provision if it is proved that there was reasonable cause for non-furnishing or incorrect furnishing of information under sub-section (6) of section 195 of the Income-tax Act.


47.20 Applicability:- These amendments take effect from 1st June, 2015.

Due Date of Filing Forms MGT-7 and AOC-4 extended for one month

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Due Date of Filing Forms MGT-7 and AOC-4 extended for one month
Relaxation of addiuonal fees and extension of last date of in filing of forms MGT-7 (Annual Return) and AOc-4 (Financial Statement) under the Companies Act, 2013-reg.

In continuation of this Ministry's General Circular 1412015 dated 28.10.2015, keeping in view requests received from various stakeholders, it has been decided to relax the additional fe€s payable on e-forms AOC4, AOC (CFS) AOC-4 XBRL and e- Form MGT-7 upto 30.12,2015, wherever additional fee is applicable.

2. This issues with the approval of the competent authority.

Nov 27, 2015

CBDT signed new 11 Advance Pricing Agreements

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CBDT signed new 11 Advance Pricing Agreements
It has been the endevour of the Government to foster an environment of co-operation in matters of taxation through predictability of laws and reduced litigation. In a major push towards providing certainty to foreign investors in the arena of transfer pricing, the Central Board of Direct Taxes has entered into 11 more unilateral Advance Pricing Agreements (APAs). These APAs were signed with Indian subsidiaries of foreign companies operating in various segments of the economy like investment advisory services, engineering design services, marine products, contract R&D, software development services, IT enabled services, cargo handling support services, etc.

While 7 of these APAs have rollback provisions contained in them, the other 4 are Agreements for future five years. APAs with rollback provisions can cover a maximum period of 9 years in total. With this round of signing, CBDT has so far entered into 31 APAs (30 unilateral and one bilateral).

The APA programme was introduced in the Income-tax Act, 1961 in 2012 vide the Finance Act, 2012. 5 APAs were concluded in the first year and 4 APAs got signed in the second year. The pace of negotiations has picked up in the current year. This year has already witnessed the conclusion of 22 APAs. It is the aim of the CBDT to finalise another 30 to 40 APAs before the end of this fiscal to provide stability and confidence to foreign enterprises operating in India.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT 

Service tax leviability on Seed Testing

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Service tax leviability on Seed Testing
Service tax department issued a circular no. 189/2015 dated 26 November 2015 about leviability of service tax on seed testing with effect from 1 July 2012. Full circular is as under.

It has come to the notice of the Board that certain field formations have taken a view that all activities incidental to seed testing are leviable to service tax and only the activity in so far it relates to actual testing has been exempted in the Negative List.

2.         The matter has been examined. In this regard, Negative list entry under Clause (d) of section 66D of the Finance Act, 1994 is reproduced as under :

“(d) services relating to agriculture or agricultural produce by way of—
(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; “

2.1       Term ‘agriculture ‘ has been defined under section 65B clause (3) as under:-
(3) “agriculture” means the cultivation of plants and rearing of all life-forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products;
2.2       Term ‘agriculture produce ‘ has been defined under section 65B clause (5) as under:-

(5) “agricultural produce” means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market;

2.3       There is no doubt that seed is not covered under the definition of agriculture produce.  All services relating to agriculture by way of agriculture operations directly relating to production of agriculture produce including testing is covered. Testing and certification can be done as per the Act and rules made there under in this regard. Testing cannot stand in isolation of certification and other ancillary activities. Testing cannot be random, somebody has to register for  testing. If certificate is not received and seeds are not tagged, testing is irrelevant. Therefore, all processes are  a part of the composite process and cannot be separated from testing.

2.4       “Agricultural operations” have not been defined in the Chapter V of the Finance Act, 1994 and an inclusive and indicative list of such operations has been given. Thus it has been defined as “Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing”. The exemption is thus not limited to the  specified operations. The word ‘seed’ from testing in agricultural operations was deleted so as to broaden the scope of coverage of the negative list entry and to cover any testing in agricultural operations in negative list, which are directly linked to production of agriculture produce and not to limit its scope only to seeds.

3.0       It may be recalled that prior to introduction of Negative List, the services [technical testing and analysis and technical inspection and certification of seeds], rendered by notified Central/ State Seed Testing Laboratories /Agency were exempt from Service Tax [notification No.10/2010-Service Tax]. This notification was rescinded by another notification [No.34/3012-Service Tax, dated 20-06-2012], w.e.f. 01-07-2012, when the Negative List entry came into force. The intent of rescinding the said notification was not to withdraw the above stated exemption but the said exemption was being subsumed elsewhere. The relevant entry in the Negative list as on 01.07.2012 read as under:-

(d) services relating to agriculture or agricultural produce by way of—
(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;
3.1       Further, in the subsequent Budget 2013-14, the word “seed” prefixed to “seed testing” was omitted w.e.f. 10.05.2013. The intent was clarified by the Joint Secretary (Tax Research Unit) vide Budget D.O.F. No. 334/3/2013-TRU, New Delhi, dated February 28, 2012, in para 1 (iii) of the letter that the negative list entry in sub-clause (i) of clause (d) of section 66D is being modified by deleting the word “seed”. This will allow the benefit to all other testing in relation to “agriculture” or “agricultural produce”.

4.         In view of the above, it is clarified that all testing and ancillary activities to testing such as seed certification, technical inspection, technical testing, analysis,  tagging of seeds, rendered during testing of seeds, are covered within the meaning of ‘testing’ as mentioned in sub-clause (i) of clause (d) of section 66D of the Finance Act, 1994. Therefore, such services are not liable to Service Tax under section 66B of the Finance Act, 1994.

Nov 25, 2015

Issue date of Gold Bonds in postponed to 30 November 2015

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Issue date of Gold Bonds in postponed to 30 November 2015
Reserve bank of India postponed date of issue of gold bonds to 30 November 2015. The applicant will receive interest as per saving bank account in this regard. 

A reference is invited to circular IDMD.CDD.No. 939/14.04.050/2015-16 dated October 30, 2015 on Sovereign Gold Bond scheme.

2. It has been decided to shift the issue date of the Sovereign Gold Bond from November 26, 2015 to November 30, 2015. In this regard, please refer to the Operational Guidelines issued vide circular IDMD.CDD.No. 968/14.04.050/2015-16 dated November 4, 2015, wherein it was stated that applicants will be paid interest at prevailing savings bank rate from the date of realization of payment to the settlement date i.e. period for which they are out of funds. As the settlement date has now been shifted to November 30, 2015, the interest at prevailing savings bank rate shall be paid from the date of realization of payment to the new settlement date i.e. November 30, 2015.

3. Other terms and conditions of the above circulars remain unchanged.

Nov 23, 2015

New MGT 7 form with clarifications notified

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MCA issued a notification of new MGT 7 form with more clarification of this annual return form for companies. Full notification is as under.

In exercise of the powers conferred under sub-sections (2) and (3) of section 92 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Management and Administration) Rules, 2014, namely:-

Short title and commencement
1. (1) These rules may be called the Companies (Management and Administration) Third Amendment Rules, 2015.

(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Management and Administration) Rules, 2014, for Form No. MGT-7, the following form shall be substituted, namely:-
mgt 7 form company


Download New MGT 7 form
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Nov 21, 2015

Income tax new plans of deduction under income tax act

6:34 PM 0
Income tax new plans of deduction under income tax act
The Finance Minister in his Budget Speech, 2015 has indicated that the rate of corporate tax will be reduced from 30% to 25% over the next four years along with corresponding phasing out of exemptions and deductions. This is a step towards simplification of tax laws, which is expected to bring about transparency and clarity.

The Government proposes to implement this decision in the following manner:

1- Profit linked, investment linked and area based deductions will be phased out for both corporate and non-corporate tax payers.

2- The provisions having a sunset date will not be modified to advance the sunset date. Similarly the sunset dates provided in the Act will not be extended.

3- In case of tax incentives with no terminal date, a sunset date of 31.3.2017 will be provided either for commencement of the activity or for claim of benefit depending upon the structure of the relevant provisions of the Act.

4- There will be no weighted deduction with effect from 01. 04.2017.

The details of proposed phasing out of deductions are available on the website of the Department at www.incometaxindia.gov.in.

Comments on this proposal may be sent within 15 days to Director (TPL-III) on mail at dirtpl3@nic.in or by post at Director (TPL III), Central Board of Direct Taxes,Room No. 147G, North Block, New Delhi- 110001.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT 
Tags-income tax new deductions,new deductions income tax,income tax deduction for corporate,corporate it deductions,corporate income tax deductions,deductions for corporate income tax,income tax deduction for corporate,income tax new deductions for corporate,income tax new deductions

Nov 20, 2015

10 points to know about Seventh pay scale recommendation

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Central government employees got a huge gift from the 7th Pay Commission report which recommended on Thursday a 23.55% per cent jump in their salary and allowances. The 7th Pay Commission is headed by Justice A K Mathur and the other members of the commission are Vivek Rae, a retired IAS officer of 1978 batch, and Rathin Roy, an economist. Meena Agarwal is secretary of the commission. The central government constitutes the pay commission every 10 years to revise the pay scale of its employees and often these are adopted by states after some modifications. The Pay Commission was set up by the UPA government in February 2014 to revise remuneration of about 48 lakh central government employees and 55 lakh pensioners. 

Following are the highlights of the recommendations made by the 7th Pay Commission report, which was submitted to Finance Minister Arun Jaitley on Thursday:

1. 7th Pay Commission: 23.55 per cent increase in pay and allowances recommended
(*Recommendations to be implemented from January 1, 2016)

2. 7th Pay Commission: Minimum pay fixed at Rs 18,000 per month; maximum pay at Rs 2.25 lakh.

3. 7th Pay Commission: The rate of annual increment retained at 3per cent.

4. 7th Pay Commission: One Rank One Pension proposed for civilian government employees on line of OROP for armed forces.
7th pay scale recommendations report



 
5.  7th Pay Commission: Ceiling of gratuity enhanced from Rs 10 lakh to Rs 20 lakh; ceiling on gratuity to be raised by 25 per cent whenever DA rises by 50 per cent.

6. 7th Pay Commission: Cabinet Secretary to get Rs 2.5 lakh as against Rs 90,000 per month pay band currently. 

7. 7th Pay Commission: Financial impact of implementing recommendations in toto will be Rs 1.02 lakh crore - Rs 73,650 crore to be borne by Central Budget and Rs 28,450 crore by Railway Budget.

8.  7th Pay Commission: Total impact of Commission's recommendation to raise the ratio of expenditure on salary and wages to GDP by 0.65 percentage points to 0.7 per cent.

9. 7th Pay Commission: Military Service Pay (MSP), which is a compensation for the various aspects of military service, will be admissible to the defence forces personnel only

10. 7th Pay Commission: MSP for service officers more than doubled to Rs 15,500 per month from Rs 6,000 currently; for nursing officers to Rs 10,800 from Rs 4,200; for JCO/ORs to Rs 5,200 from Rs 2,000 and for non-combatants to Rs 3,600 from Rs 1,000; Short service commissioned officers will be allowed to exit the armed forces at any point in time between 7 to 10 years of service
Tags-7th pay commission highlights,highlights of 7th pay commission,7th pay commission calculator,7th pay commission excel calculator,seventh pay scale recommendations,7th pay scale recommendations

Nov 19, 2015

Online booking and payment of LPG Gas Cylinders

3:44 PM 0
Taking delivery of LPG cylinder refills has always been a pain in one form or the other, even if it is being delivered to your home. But starting this month, things are about to change as consumers of Indane (IOC), BharatGas (BPCL) and HPGas (HPCL) will be able to book and pay for their LPG cylinder refills via online payment across the country. “This would help consumers who are working and not available at home when the cylinder delivery boy arrives. Nowadays, many consumers use smartphones and it would be convenient for them,” an official said. Check out how LPG online booking works in 5 easy steps:

1. The idea is to allow consumers to book and pay on the go. After booking and making the payment for the refill, a pre-paid voucher would be generated at the distributor. The consumer would get SMSs and emails confirming the payment and status of delivery.

2. There would be two mechanisms to pay for LPG cylinder refills using a credit or debit card, internet banking, or mobile wallets such as PayTM. In the first mechanism, a LPG consumer can book the refill online after creating a log in ID on www.mylpg.in and pay for it. The facility could be availed on the mobile app too.

3. The consumer will have to pay the market price on the particular day for the LPG cylinder, while subsidy amount would be credited to the linked bank account after delivery of the refill. This facility would be made available to consumers in November.

4. In the second mechanism, which is expected to be rolled out in December, the distributor would issue a smart card and PIN to the consumer. The LPG refill cylinder could be booked over telephone or SMS. The delivery person would bring with him a device, similar to one in shops and restaurants, where the consumer needs to swipe the smart card and verify his details with the PIN. Following this, he can pay using his credit or debit card.

5. While the option of paying via a credit or debit card, internet banking, or mobile wallets such as PayTM are being made available for LPG buyers, the mode of cash payment on delivery would continue to exist.
Tags-online booking lpg cylinders,lpg cylinders online booking,lpg cylinders payment debit card,lpg cylinders payment credit card,online payment lpg cylinders,lpg cylinders online payment and booking

Procedure for export under claim for brand rate under rule 7 of drawback rule

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Procedure for export under claim for brand rate under rule 7 of drawback rule
The exporters opting for claim of brand rate under rule 6 the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 shall continue to declare the figure “9801” as an identifier under the Drawback details in the shipping bills filed.

2. For shipping bills filed on or after 23.11.2015, the exporters opting for claim of brand rate under rule 7 of Drawback Rules, 1995 shall declare the figure “9807” (instead of “9801”) as an identifier in the shipping bill under the Drawback details. Immediately after the said identifier, the tariff item number of goods as shown in column (1) of the Schedule shall be declared followed by the character “B”. For example, if “Tractors (other than tractors of heading 8709)” are exported under claim for brand rate under rule 7 and the related Drawback Tariff Item number for such tractors in the AIR Schedule is 8701, the declaration on the shipping bill would be “98078701B”. Similarly, for “Bicycle pump” the related Drawback Tariff Item number in the AIR Schedule is 841403 and the declaration on the shipping bill would be “9807841403B”. Such a shipping bill is to be processed by the Customs for payment of provisional drawback amount equivalent to the Customs component (‘B’ column of AIR Schedule consisting of rate and cap) for the said declared Drawback TI of AIR Schedule. This processing is subject to same conditions as applicable to AIR drawback wherein there is claim for only Customs component. Suitable change in EDI is being implemented by DG (Systems).

3.1 After goods are exported, the exporter may apply to the relevant Central Excise office for fixation of brand rate under rule 7. In case of a timely filed complete application for fixation of brand rate under rule 7, subsequent drawback payments may arise against such shipping bill on account of provisional brand rate letter issued by Central Excise in terms of para 5A-5B of Instruction No.603/01/2011-DBK dated 11.10.2013 and/or the final brand rate letter and here the above said provisional drawback amount already paid shall also be taken into account.


3.2 However, in case of a timely filed complete application for fixation of brand rate under rule 7, if the brand rate request is denied after verification, the rejection letter issued by Central Excise and endorsed to the Customs formation should carry the information about the details of the eligibility for the rate and cap specified in ‘A’ column of AIR Schedule in terms of all the Notes and Conditions with the Schedule and on this basis the Customs shall update the record and after taking into account the payments already made, finalise the claim in terms of the AIR provisions.

3.3 It may be noted that only the first drawback amount processed through the EDI system is electronically validated with respect to Rule 8A of Drawback Rules, 1995. Therefore, wherever there is any subsequent EDI processing on basis of the AIR, this validation must be enforced by the Customs officer for the total drawback amount against relevant tariff item.

4. For shipping bills filed before 23.11.2015, the exporters opting for claim of brand rate under rule 7 of the Drawback Rules, 1995 would, as before, have declared the figure “9801” as an identifier in the shipping bill under the Drawback details. In such cases, if the Let Export Order date is to be on or after 23.11.2015, the exporter shall be facilitated to amend, prior to the actual LEO, the identifier along the lines mentioned in item 2 above. However, even if the LEO occurs on or after 23.11.2015 without such amendment, the exporter may provide the information to the Asst/Dy. Commissioner of Customs at the port of export that the option for claim of brand rate reflected in the shipping bill was intended to be under rule 7 of the Drawback Rules, 1995 and also indicate the Tariff Item number (as shown in column (1) of the AIR Schedule) corresponding to the export goods (exported in the shipping bill) and seek provisional drawback amount equivalent to the Customs component. The Customs shall enter this information in its records along with details of the calculation of the amount. The payment of the provisional drawback amount shall be processed with conditions as applicable to AIR drawback wherein there is claim for only the Customs component.

Duty Drawback rates of all industries and changes in Duty Drawback Scheme

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Duty Drawback rates of all industries and changes in Duty Drawback Scheme
The revised All Industry Rates (AIR) of Duty Drawback has been notified vide Notification No. 110/2015-Customs (N.T.), dated 16.11.2015 which comes into force on 23.11.2015. These AIRs broadly take into account certain broad average parameters including, inter alia, prevailing prices of inputs, input output norms, share of imports in input consumption, the rates of central excise and customs duties, the factoring of incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods, factoring incidence of duty on HSD/furnace oil, value of export goods, etc.

2. The notification may be downloaded from Board’s website and carefully perused for details of the changes. However, some of the changes are highlighted below –

(a)  The composite rates have been increased in many cases like frozen shrimps/ prawns (chp 3, 16), perfumed agarbatti (chp 33), finished/ lining leather (chp 41), leather hand bags/ wallet/ belts (chp 42), industrial gloves (chp 42), certain MMF yarn/ fabric (chp 54, 55), readymade garment made of cotton, wool & cotton with lycra (chp 61, 62), made-ups of cotton/ MMF (chp 63), hand tools (chp 82), etc.

(b)Separate entries have been provided in the Drawback Schedule for Accelerated Freeze Dried (AFD) shrimps, lobster/crab, pasteurized tinned chilled crab meat (chp 3, 16), fish oil (chp 15), fish meal (chp 23), potassium chlorate (chp 28), leather carpets (chp 42), polypropylene mats (chp 46), cotton yarn of 100 or more counts (chp 52), belting fabrics (chp 54), filtration fabric made of polyester filament yarn/ polypropylene filament yarn/ polybutylene terephthalate (chp 54), suits, jackets & trousers (chp 61 & chp 62)- by trifurcating existing single entry, protective industrial wear made of aramid fibre/ modacrylic fibre/ cotton fibre (chp 62), glass art-ware/ handicrafts with silver coating (chp 70), aluminium conductor steel reinforced (chp 76), turbo charger (chp 84), tractor parts (chp 87), self-loading or self-unloading trailers and semi-trailers of a type used for agricultural purposes (chp 87), leg guards (chp 95).

(c)  Rate has been provided for granulated slag (chp 26) and the description under heading 6802 has been reworded with respect to constituent material for tiles, handicrafts, etc.

(d)  Certain products earlier having only customs rates, have been provided with composite rates. These include bicycle tyres (chp 40), bicycle tubes (chp 40), woven fabrics of other vegetable textile fibres/ woven fabrics of paper yarn (chp 53), headgear (chp 65), umbrellas/walking sticks etc. (chp 66), artificial flowers etc. (chp 67), acrylic blankets (chp 63).

(e)  Iron and steel (chp 72 from heading 7207 onwards), articles of iron and steel (chp 73), tools and parts of base metal (chp 82), miscellaneous articles made from steel (chp 83), machinery and appliances (chp 84), electrical machinery (chp 85), rolling stock (chp 86) and ships (chp 89) have been provided with increased customs rate of 2%, with certain exceptions.  

(f)  Composite rates for wooden art ware (chp 44), papier mache (chp 48), yarn/ fabric/ garment of silk (chp 50, 61, 62), certain MMF yarn/ fabric (chp 54, 55), carpets (chp 57), brass artware/ articles (chp 74), certain sports goods (chp 95) etc. see a reduction.

(g)  AIR has been fixed as Rs. 209.3/gm for gold jewellery /parts and Rs. 2790/kg for silver jewellery /articles.

(h)  Rates on remaining of the erstwhile DEPB items are being aligned with residuary rates, except where higher rates were due.  

(i)  Drawback caps, wherever meaningfully possible, have been provided normally in entries with rates higher than 1.9% (the highest residuary rate). It may be noted that the drawback cap of the nature provided for certain project exports applies when the conditions specified in the relevant Notes and conditions are met and it does not apply to other cases.

2. The Customs, Central Excise and Service Tax Drawback Rules, 1995 have also been amended vide Notification No. 109/2015-Customs (N.T.) dated. 16.11.2015 effective from 23.11.2015. This notification may also be perused. The first of these amendments enables exporters of “wheat” to function under the brand rate mechanism. The second change relates to payment of provisional drawback in certain cases of export under claim for brand rate. Presently, after export, a complete application for determination of brand under rule 7 of these Rules has to be filed at the Central Excise office to enable issuance of provisional drawback letter. The sub-rule (3) of Rule 7 has been amended so that Central Government may specify an amount for payment as provisional drawback by proper officer of Customs. Notification No. 110/2015-Customs (N.T.), dated 16.11.2015 (paragraph 3) specifies this amount as equivalent to the Customs component of AIR corresponding to the export goods, if applicable, and subject to the same conditions as applicable to a claim for the ‘B’ column in the Schedule. The modified procedure for export under claim for brand rate under rule 7 of Drawback Rules 1995 is at Annexure 1. The amount paid as provisional drawback under the above dispensation shall be taken into account by the Central Excise to authorize further provisional drawback, where necessary. The brand rate facilitation in terms of Para’s 5A-5C of Instruction No. 603/01/2011-DBK dated 11.10.2013 would continue and there should be no delay by Central Excise formations in finalizing applications for fixation of brand rate.

3. The Commissioners are expected to ensure due diligence to prevent any misuse. The shipping bills with parameters considered to be sensitive should be handled with adequate care at the time of export itself. Further, in case of claim of the composite (higher) rate of AIR, the processing should specifically ensure availability of ‘Non-availment of Cenvat certificate’ etc. at the export stage itself. There is also need for continued scrutiny for preventing any excess drawback arising from mismatch of declarations made in the Item Details and the Drawback Details in a shipping bill. It may continue to be ensured that exporters do not avail of the refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming AIR.

4. Suitable public notice and standing order should be issued for guidance of the trade and officers. Any inconsistency, error or difficulty faced should be intimated to the Board. Details may be informed in case of any specific product on which the new Schedule has resulted in removal of drawback cap which is accompanied by an increase in the relative drawback amount per unit of product.
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Nov 17, 2015

Service tax calculator after Swachh Bharat Cess introduced

4:35 PM 2
Service tax calculator after Swachh Bharat Cess introduced
Service tax rate is increased indirectly after introduction of Swachh Bharat Cess on receipts at 0.5%. So indirectly service tax rate is increased from 14% to 14.5%. There are many other points too which needs to know. ( FAQs on Swachh Bharat Cess).

So there is an excel based calculator to calculate service tax amount including Swachh Bharat Cess.




There are many points to remember

•        Swachh bharat cess is not available for cenvat credit

•        Threshold limit of service tax is 10 lakhs.

•        Service tax rate is 14% from 1 June 2015.

•        Swachh Bharat cess is applicable on service at 0.5% from 15 November 2015.

•        Service covered in special valuation provision the effective rate will be calculated with 14.5%. For example the effective rate of tax on GTA service would be 14.5%*30=4.35% and not 14%*30=4.2%.
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Nov 16, 2015

FAQs on Swachh Bharat Cess

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FAQs on Swachh Bharat Cess
Chapter VI (Section 119) of the Finance Act 2015 contains provisions for levy and collection of Swachh Bharat Cess (SBC). Now the Government has announced 15th November, 2015 as the date from which the provisions of Section 119 would come into effect (notification No.21/2015-Service Tax, dated 6th November, 2015 refers). Simultaneously, Government has also notified levy of Swachh Bharat Cess at the rate of 0.5% on all taxable services. Effectively, the rate of SBC would be 0.5% and new rate of service tax plus SBC would be 14.5%. As such SBC translates into a tax of 50 paisa only on every one hundred rupees worth of taxable services.

The proceeds from this cess will be exclusively used for Swachh Bharat initiatives. In this context, the relevant Chapter of the Finance Act, 2015 is reproduced below:-

“CHAPTER VI
SWACHH BHARAT CESS
119. (1) This Chapter shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint.

(2) There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Swachh Bharat Cess, as service tax on all or any of the taxable services at the rate of two per cent. on the value of such services for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.

(3) The Swachh Bharat Cess leviable under sub-section (2) shall be in addition to any cess or service tax leviable on such taxable services under Chapter V of the Finance Act, 1994, or under any other law for the time being in force.

(4) The proceeds of the Swachh Bharat Cess levied under sub-section (2) shall first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the Swachh Bharat Cess for such purposes specified in sub-section (2), as it may consider necessary.

(5) The provisions of Chapter V of the Finance Act, 1994 and the rules made thereunder, including those relating to refunds and exemptions from tax, interest and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Swachh Bharat Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under Chapter V of the Finance Act, 1994 or the rules made thereunder, as the case may be.”

On this issue, Hon’ble FM in his speech for Budget 2015-16 has stated as under:-
“10. The third is ‘Swachh Bharat’ which we have been able to transform into a movement to
regenerate India. I can speak of, for example, the 50 lakh toilets already  constructed in 2014-15, and I can also assure the Members of this august House that we will indeed attain the target of building six crore toilets. But, Madam, Swachh Bharat is not only a programme of hygiene and cleanliness but, at a deeper level, a programme for preventive health care, and building awareness.”

“123. ----It is also proposed to have an enabling provision to levy Swachh Bharat Cess at a rate of 2% or less on all or certain services if need arises. This Cess will be effective from a date to be notified. Resources generated from this cess will be utilised for financing and promoting initiatives towards Swachh Bharat.”

Q.1 What is Swachh Bharat Cess (SBC)?
Ans. It is a Cess which shall be levied and collected in accordance with the provisions of Chapter VI of the Finance Act, 2015,called Swachh Bharat Cess, as service tax on all the taxable services at the rate of 0.5% of the value of taxable service.

Q.2 What is the date of implementation of SBC?
Ans. The Central Government has appointed 15th day of November, 2015 as the date from which
provisions of Swachh Bharat Cess will come into effect (notification No.21/2015-Service Tax, dated 6th November, 2015 refers).

Q.3 Whether SBC would be leviable on exempted services and services in the negative list?
Ans. Swachh Bharat Cess is not leviable on services which are fully exempt from service tax or those covered under the negative list of services.

Q.4 Why has SBC been imposed?
Ans. SBC has been imposed for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.

Q. 5 Where will the money collected under SBC go?
Ans. Proceeds of the SBC will be credited to the Consolidated Fund of India, and the Central
Government may, after due appropriation made by Parliament, utilise such sums of money of the
SBC for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.

Q.6 How will the SBC be calculated?
Ans. SBC would be calculated in the same way as Service tax is calculated. Therefore, SBC would be levied on the same taxable value as service tax.

Q. 7 Whether SBC would be required to be mentioned separately in invoice?
Ans. SBC would be levied, charged, collected and paid to Government independent of service tax. This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code which would be notified shortly. SBC may be
charged separately after service tax as a different line item in invoice. It can be accounted and treated similarly to Education cesses.

Q. 8 Whether separate accounting code will be there for Swachh Bharat Cess?
Ans. Yes, for payment of Swachh Bharat Cess, a separate accounting code would be notified shortly in consultation with the Principal Chief Controller of Accounts. These are as follows:- 
Swachh Bharat Cess (Minor Head)
Tax Collections
Other Receipts
Penalties
Deduct
Refunds
0044-00-506
00441493
00441494
00441496
00441495

Q. 9 What would be effective rate of service tax and SBC post introduction of SBC?
Ans. Effective rate of service tax plus SBC, post introduction of SBC, would be [14% + 0.5%].

Q.10 Whether SBC is a ‘Cess’ on tax’ and we need to calculate SBC @ 0.50% on the amount of service tax like we were earlier doing for calculating Education Cess and SHE Cess?
Ans. No, SBC is not a cess on Service Tax. SBC shall be levied @ 0.5% on the value of taxable services.

Q. 11 Whether SBC is levied on all or selected services?
Ans. The Central Government was empowered to impose SBC either on all or some of the taxable services. Vide notification No 22/2015-ST dated 6-11-2015, Government has notified  that SBC shall be applicable on all taxable services except services which are either fully exempt from service tax under any notification issued under section 93(1) of the Finance Act, 1994 or are otherwise not leviable to service tax under section 66B of the Finance Act, 1994.

Q.12 How will the SBC be calculated for services under reverse charge mechanism?
Ans. In case of reverse charge under section 68(2) of the Finance Act, 1994, the liability has been shifted from service provider to the service recipient. As per section 119 (5) of the Finance Act, 2015, the provisions of Chapter V of the Finance Act, 1994, and the rules made thereunder are applicable to SBC also. Thus, the reverse charge under section 68(2) of the Finance Act, 1994, is made applicable to SBC. In this context, to clarify, Government has issued notification No. 24/2015-Service Tax dated 12th November, 2015 to provide that reverse charge under notification No.30/2012-Service Tax dated 20th June, 2012 shall be applicable for the purpose of levy of Swachh Bharat Cess mutatis mutandis.

Q.13 How will SBC be calculated for services where abatement is allowed?
Ans. Taxable services, on which service tax is leviable on a certain percentage of value of taxable service, will attract SBC on the same percentage of value as provided in the notification No. 26/2012-Service Tax, dated 20th June, 2012. So, this notification would apply for SBC also in the same manner as it applies for service tax.
For example, in the case of GTA, [Service Tax + SBC]% would be (14% Service Tax + 0.5%
SBC) X 30% = 4.35% (4.20%+0.15%)

Q.14 Whether Cenvat Credit of the SBC is available?
Ans. SBC is not integrated in the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC cannot be paid by utilizing credit of any other duty or tax.

Q.15 What would be the point of taxation for Swachh Bharat Cess?
Ans. As regards Point of Taxation, since this levy has come for the first time, all services (except
those services which are in the Negative List or are wholly exempt from service tax) are being
subjected to SBC for the first time. SBC, therefore, is a new levy, which was not in existence
earlier. Hence, rule 5 of the Point of Taxation Rules would be applicable in this case. Therefore, in cases where payment has been received and invoice is raised before the service becomes taxable, i.e. prior to 15th November, 2015, there is no lability of Swachh Bharat Cess. In cases  where payment has been received before the service became taxable and invoice is raised within 14 days, i.e. upto 29th November, 2015, even then the service tax liability does not arise. Swachh Bharat Cess will be payable on services which are provided on or after 15th Nov, 2015, invoice in respect of which is
issued on or after that date and payment is also received on or after that date. Swachh Bharat Cess will also be payable where service is provided on or after 15th Nov, 2015 but payment is received prior to that date and invoice in respect of such service is not issued by 29th Nov, 2015.

Q.16 How would the tax (Service Tax and SBC) be calculated on services covered under Rule 2A, 2B or 2C of Service Tax (Determination of Value) Rules, 2006.?
Ans. The tax (Service Tax and SBC) on services covered by Rule 2A, 2B or 2C of Service Tax
(Determination of Value) Rules, 2006, would be computed by multiplying the value determined in accordance with these respective rules with [14% + 0.5%]. Therefore, effective rate of Service Tax plus SBC in case of original works and other than original works under the works contract service would be 5.8% [(14% + 0.5%)*40%] and 10.15% [(14% + 0.5%)*70%] respectively. Similar, would be the tax treatment for restaurant and outdoor catering services.

Q.17 How would the tax be calculated on restaurant services covered under Service Tax
(Determination of Value) Rules, 2006.?
Ans. Swachh Bharat Cess would be calculated on the value arrived at in accordance with the Service Tax (Determination of Value) Rules, 2006. For example, the effective Swachh Bharat Cess in respect of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air–conditioning or central air-heating in any part of the establishment, would be 0.5% of 40% of the total amount, i.e, 0.2% of the total amount. The cumulative service tax and Swachh Bharat Cess liability would be [14% ST + 0.5% SBC] of 40% of the total amount, i.e., 5.8% of the total amount charged.

Q.18 Whether SBC would be applicable on services covered by Rule 6 of Service Tax Rules (i.e. air travel agent, life insurance premium, purchase and sale of foreign currency and services by lottery distributors/selling agents)
Ans. Sub-rule (7D) to rule 6 has been inserted vide notification 25/2015-Service Tax, dated 12th November, 2015 so as to provide that the person liable for paying the service tax under sub- rule (7), (7A), (7B) or (7C) of rule 6 of Service Tax Rules, shall have the option to pay SBC as determined as per the following formula:-
Service Tax liability [calculated as per sub-rule (7), (7A), (7B) or (7C)] X 0.5%/14%
The option under this sub-rule once exercised, shall apply uniformly in respect of such services and shall not be changed during a financial year under any circumstances.

Q. 19 How would liability be determined in case of reverse charge services where services have been received prior to 15.11.2015 but consideration paid post 15.11.2015?
Ans. In respect of reverse charge mechanism, SBC liability is determined in accordance with Rule 7 of Point of Taxation Rules, as per which, point of taxation is the date on which consideration is paid to the service provider. Thus, SBC liability in such case will be 0.5% X Value of taxable service.

Q.20 Does a person providing both exempted and taxable service and reversing credit @ 7% of value of exempted service under Rule 6 of Cenvat Credit Rules, does he need to reverse the SBC also?
Ans. As SBC is not integrated in the Cenvat Credit chain and reversal under Rule 6 is payment of amount equal to 7% of the value of exempted services, hence, reversal of SBC is not required under Rule 6 of Cenvat Credit Rules, 2004.
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Nov 15, 2015

New PAN and TAN application fees wef 15.11.2015

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New PAN and TAN application fees wef 15.11.2015
PAN and TAN application fees have been revised due to increase of service tax from 14% to 14.5% (0.5% Swacch Bharat Cess has included in service tax wef 15-11-2015). So new revised PAN and TAN application fees W. e. f.  15-11-2015 are as under.

W. e. f. November 15, 2015, PAN & TAN application fees have been revised as under:

1.For dispatch of PAN card in India:- 107 (inclusive of service tax).

2.For dispatch of PAN card outside India: - 989 (inclusive of service tax).

3.For TAN applications:- 63 (inclusive of service tax)
Tags- pan card application fee,fees for pan card,fees for tan card,application fees tan card,application fees tan card,pan fees,tan fees

Nov 14, 2015

IPO will list within 6 working days after issue closure

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IPO will list within 6 working days after issue closure
SEBI issue a circular about reducing the time taken in listing of IPO. From 1 January 2016, IPO will list within 6 working days after the closing date of issue. 

Streamlining the Process of Public Issue of Equity Shares and Convertibles
1. As a part of the continuing endeavor to streamline the process of public issue of equity shares and convertibles, it has been decided, in consultation with the market participants -

(i) to reduce the time taken for listing after the closure of issue to 6 working days as against the present requirement of 12 working days, and

(ii) to broad-base the reach of investors by substantially enhancing the points for submission of applications.

In this regard, necessary amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 have already been notified.

2. The operational details to implement the above are outlined below:

2.1.All the investors applying in a public issue shall use only Application Supported by Blocked Amount (ASBA) facility for making payment i.e. just writing their bank account numbers and authorising the banks to make payment in case of allotment by signing the application forms, thus obviating the need of writing the cheques.

2.2.In addition to the Self Certified Syndicate Banks (SCSBs), Syndicate Members and Registered Brokers of Stock Exchanges, the Registrars to an Issue and Share Transfer Agents (RTAs) and Depository Participants (DPs) registered with  SEBI are now permitted to accept application forms (both physical as well as online) in public issues.

2.3.The RTAs and DPs shall provide their contact details, where the application forms shall be collected by them, to the recognized stock exchanges by November 30, 2015 as per the format specified at Annexure-A and the same shall be disclosed by the stock exchanges on their websites. RTAs and DPs shall regularly update the said details by furnishing current information to the
stock exchanges which shall be disclosed by the stock exchanges. 
Processing of Applications by Intermediaries
2.4.Intermediaries accepting the application forms shall be responsible for uploading the bid along with other relevant details in application forms on the electronic bidding system of stock exchange(s) and submitting the form to SCSBs for blocking of funds (except in case of SCSBs, where blocking of funds will be done by respective SCSBs only). They shall undertake the various activities in
accordance with indicative timelines as specified in this circular.

2.5.All applications shall be stamped and thereby acknowledged by the intermediary at the time of receipt.

Alerts by Stock Exchanges
2.6.Similar to the systems prevalent in case of secondary market transactions, the stock exchanges shall develop the systems to facilitate the investors to view the status of their public issue applications on their websites and sending the details of applications and allotments through SMS and E-mail alerts to the investors.

Timelines
2.7.The revised indicative timelines for various activities are specified at AnnexureB to this circular.

2.8.All intermediaries shall co-ordinate with one another to ensure completion of listing of shares and commencement of trading by T+6.

Other Requirements
2.9.Amount of commission payable to RTA / DP shall be determined on the basis of applications which have been considered eligible for the purpose of allotment. In order to determine to which RTA / DP the commission is payable to, the terminal from which the bid has been uploaded will be taken into account.

2.10. The details of commission and processing fees payable to each intermediary and the timelines for payment shall be disclosed in the offer document and this shall be implemented strictly. 

3. The intermediaries shall provide guidance to their investors on making applications in public issues.

4. The merchant bankers shall ensure that appropriate disclosures are made in offer documents in accordance with this circular.

5. All intermediaries are advised to take necessary steps to ensure compliance with this circular. 

7. This circular shall be applicable for all public issues opening on or after January 01, 2016.

8. This circular is being issued in exercise of the powers under section 11 read with section 11A of the Securities and Exchange Board of India Act, 1992.

9. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.