Goods transport agents get tax exemption

Goods transport agents get tax exemption

Publication:Economic Times Delhi;
Date:Jun 27, 2008;
Section:Economy;
Page Number:18
Agents Won’t Have To Pay Service Tax On Renting Of Goods Carriage
Our Bureau NEW DELHI TRANSPORTERS hit by the hike in diesel prices have a reason to cheer. The government has exempted goods transport agents from paying a service tax on renting of goods carriage. The Centre on Thursday issued a notification fully exempting from levy of service tax the supply of transport vehicles (goods carriage) to a goods transport agency (GTA) which is used for transport of goods by road. This follows representations from the All India Confederation of Goods Vehicle Owners’ Associations and the All India Motor Transport Congress requesting the government to provide relief on levy of service tax on supply of goods carriage to GTA for use in transport of goods. GTAs often provide services for transportation of goods by road using the goods carriage obtained on rent or hire basis. They had sought relief on the ground that the service tax paid on renting or hiring of goods carriage could not be claimed as input credit for payment of service tax towards GTA service. Services provided by a GTA in relation to transportation of goods is leviable to service tax under GTA service. However, service tax for the GTA service provided is payable only on 25% of the amount charged for providing the GTA service and the balance amount is exempt from levy of service tax. In the view of this provision, GTAs were not entitled to take input credit under Cenvat credit scheme on goods and services used for GTA service. Moreover, the service tax for GTA services provided in seven specified cases is not required to be paid by the GTA service provider but by the person making payment towards the freight. In this year’s Budget, services provided in relation to supply of tangible goods for use, without transfer of possession and effective control, has been made as separate taxable service and this service has come into force with effect from May 16, 2008. Consequently, supply of goods carriage to the GTA, without transfer of possession and effective control, for using the said goods carriage for transport of goods by road becomes leviable to service tax. “Notification No.29/2008-Service Tax, dated 26.06.2008 exempts fully the levy of service tax on supply of goods carriage to GTA for use in transportation of goods by road,” an official statement said here.

E-PAYMENT OF TAXES- CONCEPT AND

E-PAYMENT OF TAXES- CONCEPT AND
PROCEDURE
E-payment of tax is a facility provided to the tax payers to make tax
payments through internet using net-banking facility.

Click to read more...........

Recent Clarification - Service Tax

Recent Clarification - Service Tax

The Ministry of Finance, Department of Revenue, Tax Research Unit has issued a Circular on January 4, 2008. This circular is an amendment to the master circular no.96/7/2007-ST issued on August 23, 2007. The circular clarifies the departments stand on cenvat credit that can be availed by service providers who either provide or utilize services that come under the category of works contract, construction and rental of immovable property.
The following issues have been addressed: Read More......

19 steel companies under scanner on excise evasion

19 steel companies under scanner on excise evasion

NEW DELHI: The Directorate General of Central Excise Intelligence has issued showcause notices to 19 steel firms for alleged duty evasion of about Rs 108 crore. Parmarth Industries, Kamakhya Steel and Jain Steel are among the defaulters. Taxmen had raided the premises of Parmarth, an Uttar Pradeshbased saria maker about a year ago and recovered Rs 1.78 crore, sources said.

Building flats for sale not liable to service tax

Building flats for sale not liable to service tax

THE Gauhati High Court has held that the activity of construction of flats by a builder for subsequent sale is not chargeable to service tax under construction of complex services. In the relevant case, the petitioners, in the business of development and sale of immovable property (residential flats), entered into agreements for sale of such flats with the prospective purchasers during the course of development/construction and also after completion of construction of such flats. Under these agreements, they accepted installments from the purchasers as advance against the sales price of such flats. At the time of sale, stamp duty was to be paid on the entire consideration for the sale of the flats, including the installment amounts. The petitioners argued that the sale of flats in such circumstances was a transaction of sale of immovable property and not a transaction of provision of residential complex construction services. The high court accepted the argument of the petitioners and held that the construction activities undertaken by the petitioners were in respect of the petitioners’ own behalf and it was only the completed constructed flats which were sold by the petitioners to their buyers. Further, the advances received from prospective buyers were as consideration for the sale of the flats to such prospective buyers and were not for the purpose of obtaining services from the petitioners. It thus held that service tax was not chargeable on such transactions.

Golden Quotes

“Don’t only be close with someone who makes you happy…
Be close with someone who can’t be happy without you. It makes a lot of difference in life."

AS-30 ? A premature birth

AS-30 ? A premature birth

In an environment where usage of complex and hybrid financial instruments is increasingly becoming common; where innocuous sale, purchase and rental transactions might conceal hidden derivatives; where sophisticated instruments have been made available to Indian Corporates; India could not afford to exist without Accounting Standards which prescribe measurement, accounting, presentation and disclosure norms for these instruments.

Accountability of independent directors

Accountability of independent directors
The ongoing global financial crisis has had its effect on a wide variety of persons and events. With losses mounting to more than $400 billion, financial companies have given pink slips to more than 83,000 employees while top bosses at global financial brands such as Citi, Merrill Lynch and UBS have also packed their corner offices and left.
While there can be no doubt that these top bosses own responsibility for the misadventures of the entities they run, a debate is raging abroad about the role that independent directors play in this scenario and whether the top boss is solely responsible.
The debate also criticises the Sarbanes Oxley Act (SOX) of neutralising directors’ efficiency by increasing the burden of financial and regulatory compliance and neglecting the bread-and-butter role of monitoring company strategy.
Surveys of the composition of the boards of eight prominent financial institutions revealed that two-thirds of these boards had no significant experience in banking business and less than half had financial industry service. Stithapragna
Independent directors are defined by their name — independent. They are supposed to function like Stithapragna — the concept mooted in the Mahabharata — whose job role can be defined to be one who is sleeping when others are awake and awake when others are sleeping. He is duty-bound to raise the red flag when he spots an inherent issue which the others could not do merely because they possess a non-independent status.
While this is a tall order, if one visualises a situation in which out of a board of eight, seven agree for vetting a not-so-foolproof risk management policy and all eyes point to the independent director for his nod, chances of his raising a storm are limited as he would opt for a go-with-the-masses policy.
The International Accounting Standards Board (IASB) and other bodies such as the Income-Tax Appellate Tribunal (ITAT) have a solution for this by encouraging the dissenter to document his dissent. While a hare-brained proposal could be dissented, it is the day-to-day decisions taken by the board with no clue as to the implications in the future which could defy normality.
A recent notification from the Institute of Chartered Accountants of India (ICAI) urging companies to mark-to-market derivative losses led to litigation between banks that sold exotic derivatives and the entities that bought them with eyes blindfolded.
Examples in Wall Street have shown that a vast majority of the directors could not fathom the intricacies of a derivative transaction. Indian Situation
The revised Clause 49 of the Listing Agreement in India mandates that if the chairman of the board is a non-executive director, at least one-third of the company’s board should comprise independent directors. If the chairman is an executive director, at least one-half (or 50 per cent) should be independent directors.
The eligibility criteria are laid down in the revised Clause 49 of the Listing Agreement. While the crème-de-la-crème of independent directors have enough directorships of eminent companies, it is the mid-rung and lower mid-rung companies that seek truly independent directors.
All events — whether a crisis or a scam — occur the biggest in the US as its exposure to the complicated world of finance is extreme.
However, financial institutions and banks in India are feeling a minor tremor from the global situation which could act as a warning signal for the future.
A robust and transparent risk-management policy — validated at frequent intervals, being transparent with significant issues amongst all stakeholders in the company and constant communication — seems to be absolutely critical now.

Govt Will adopt Accrual System of Accounting

Accrual-based accounting system on cards
Our Bureau NEW DELHI INWHAT could be a step towards ensuring a transparent accounting system that would reflect the true position of the country’s financial health, the government has accepted, in principle, a gradual move from cash-based to accrual-based accounting. Acknowledging the essential benefits of the accrual-based accounting pattern, under which revenues and expenditure are shown in the books even when they are realised later, controller general of accounts V N Kaila on Thursday said that the government was positive towards changing the old accounting method. “There are definite benefits of accrual accounting that cannot be ignored. The decision makers can know the full cost of services they are providing, and this would result in better resource allocation, better management of assets and liabilities,” said Mr Kaila, speaking at the diamond jubilee function of accounting body ICAI. Speaking on issues involved in transitioning to the accrual system of accounting, Mr Kaila said that there are various factors that have created a demand for a transition to accrual system of accounting, such as the changing information needs of the decision makers, the implications of the Fiscal Responsibility and Budget Management Act and outcome-oriented budgeting. Cash-based accounting is a method of book keeping that records financial events based on cash flows and cash position. Revenue is shown in the books when cash is received and expense is recognised when cash is paid. On the other hand, under accrual accounting, revenue is shown in the balance sheet when it is earned and realised, regardless of when actual payment is received. Overall, accrual-based accounting would create a desirable measure of the complete financial health of the government, he added.

Publication:Economic Times Delhi;
Date:Jul 4, 2008;
Section:Economy & Corporate;
Page Number:22

US under pressure to agree to 2050 emission target

US under pressure to agree to 2050 emission target
The European Union and green groups piled pressure on the United States on Monday to agree to a target to halve global greenhouse gas emissions by mid-century and back the need for rich countries to set 2020 goals as well.