Damned if you file, damned if you don’t

Publication:Economic Times Delhi;
Date:Jul 10, 2008;
Section:EFM;
Page Number:7
M Padmakshan MUMBAI FILING income-tax returns has never been so saral, as is made out to be. The latest controversy is about filing TDS (tax deducted at source) certificates. Last year, the department had issued an advise to taxpayers not to file any attachment with the returns. However, when taxpayers complied, the department changed its stand. It said the TDS certificates would have to be filed along with the returns, else the returns will not be accepted. Now, taxpayers are in a fix: to file the attachment or not. Chartered accountant Nilesh Kapadia explains the dilemma. He says the income-tax commissioners are refusing to accept the returns if TDS certificates are not filed with the returns. Even when you produce copies of TDS certificates along with the returns, the commissioners continue to reject the returns. The department insists that TDS certificates should be original. The I-T department says the advise by the tax authorities not to file any attachment with the returns was part of its ongoing exercise to automate the whole administration. Office of the chief commissioner, Mumbai, said the instruction for not filing any attachment with the return was made in the financial year 2006-07. The CBDT has already issued instructions that if the TDS claim by the employer is less than Rs 5 lakh or if the refund is less than Rs 25,000, the taxpayer need not produce the TDS certificate. In all other cases, the returns should carry the TDS certificate. The office also explained the reason for the changed stance. Quite often, employers who are supposed to file quarterly returns do not follow the rule. And when they file it, they do not fill in crucial details like the PAN of the employee from whose salary the TDS has been deducted. This prevents the officers from verifying the TDS payment mentioned in the return. Therefore, despite a decision to ask the employees not to file any attachment with the returns, the department had to reconsider the decision. According to tax lawyer Jignesh R Shah, “Till the tax administration becomes completely automated, the taxpayers should be given an option to file returns electronically or manually.”

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KPMG gets notice for tax evasion

KPMG gets notice for tax evasion
Publication:Economic Times Delhi;
Date:Apr 25, 2008;
Section:Economy;
Page Number:10
Deepshikha Sikarwar NEW DELHI Consultancy firms have drawn the ire of the service tax department for alleged evasion. The department has issued show-cause notice to leading consultancy firm KPMG. It is understood that notices have been issued to some other firms of the same league in other cities. The show-cause notice to KPMG group of entities — KPMG (partnership firm), KPMG Advisory Services (P) Ltd, KPMG(I) Pvt Ltd, KPMG Resource Centre (P) Ltd, BSR & Co and BSR & Associates is for service tax totalling Rs 29 crore. The notice has been issued to them on foreign remittances made to entities abroad in respect of professional services received by them on out-of-pocket expenses billed by them on services wrongly claimed as export, on regulatory services and on membership fee during the course of investigation. KPMG group of entities have already deposited service tax amounting to Rs 4.38 crore and interest of Rs 42 lakh. This amount has been paid for period from June, 2005 to March 2007, when an explanation was added to the section 65(105) of the Finance Act, 1994, making such services specifically taxable. But, the department has alleged that the services provided in India by foreign service providers were always taxable and liability to pay tax was on service receiver since August 2002 when the service tax rules were amended. When contacted, a KPMG spokesperson said: “This is an accounting industry issue and not limited to KPMG alone. We believe we have paid taxes wherever applicable. We are examining the issue and will contest it based on merit and as per the law.” Earlier, the Delhi service tax Commissionerate is understood to have issued show cause notices to Ernst & Young group of companies for Rs 8.15 crore on reverse charge issue and out of pocket expenses. Some other consultancy firms have also been issued show cause notices in Mumbai and Kolkata on similar grounds.

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.

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