Monthly Archives: June 2013

Statutory Compliance Chart – June 2013

 

 

DATE

COMPLAINCE REQUIRED

FORM NO. / CHALLAN NO.

2013 JUNE

5

EXCISE:Payment of Excise Duty for May 2013

GAR 7

SERVICE TAX: Payment of Service Tax for May 2013 by Corporates

6

EXCISE:E-Payment of Excise Duty for May 2013  
SERVICE TAX:E-Payment of Service Tax for May 2013 by Corporates
NOTE: E-Payment manadatory if ST/ED Paid>=10 Lakhs in FY 2012-13

7

INCOME TAX: Deposit of TDS/TCS collected during May 2013

281

10

EXCISE:Monthly returns for Production and removal of Goods and
Cenvat Credit for May 2013

ER 1

EXCISE:Monthly returns of Excisable Goods Manufactured & Receipt
of Inputs & Capital Goods by Units in EOU, STP, HTP for May 2013

ER 2

EXCISE: Monthly returns of Informations relating to Principal Inputs
for May 2013 by Manufacturer of Specified Goods who paid Duty >= Rs. 1 Crore during Financial Year 2012-2013 By PLA/Cenvat/Both

ER 6

15

EPF: Payment of EPF contribution for May 2013  
EPF:Consolidated Statements of dues and remittances under EPF and EDLI for May 2013

12A

EPF: Monthly returns of Employees who Joined/Left the Organisation in May 2013

5/10

INCOME TAX: Due date for Payment of First Instalment of Advance Income Tax for Corporate Assessees for FY 2013-2014

280

20

CST/VAT:Monthly returns and Payment of CST and VAT collected during May 2013  

21

ESI:Deposit of ESI contributions and collections for May 2013  

29

COMPANIES ACT:  Application to Central Government for appointment of Cost Auditor

23C

INCOME TAX:  Return for Securities Transaction Tax

1/2

INCOME TAX: Submisssion of Particulars about of Small Goods Carriage Operators U/S 194C

15 I

INCOME TAX: Quarterly Return of Non-Deduction of Tax at Source U/S 206A
for Quarter Ending Mar 2013 by Banking Company

26QAA

 

Updates in Indirect Taxes – June 2013 Series

1. CCE Vs M/s Australian Foods India (P) Ltd

Decision: Manufacture and sale of specified goods that do not physically bear a brand name, from branded sale outlets: Once it is established that a specified good is a branded good, whether it is sold without any trade name on it, or by another manufacturer, it does not cease to be a branded good of the first manufacturer. It is not necessary for goods to be stamped with a trade or brand name to be considered as branded goods under the SSI notification. Hence not eligible for SSI Exemption. (Central Excise)

2. Circular No.168 / 3 / 2013 dt. 15.04.2013

Issue: Whether the activity of erection of Pandal / Shamiana activity involves transfer of right to use such pandal / shamiana to the customer? Is it included in service?

Clarification:

  • Normally, the activity of erection of Pandal / Shamiana is coupled with other services like supply of Furniture, Sound System, Lighting etc.
  • Such activity prepares a place to hold a function or event. However, effective possession and control over such pandal or shamiana remains with the service provider, even if the specially made–up space for temporary use is handed over to the customer.
  • Hence, the activity of providing pandal and shamiana along with erection and other incidental activities do not amount to transfer of right to use goods. So, Such activity is liable for service tax.

3. Notification No. 03/2013 dt.01.03.2013 –  W.e.f. from 1st April, 2013, the following amendments are made relating to exemptions as specified in Notification No.25/2012 dt. 20.06.2012 (Service Tax)

1. Services provided by Educational Institutions in relation to renting of immovable property or auxiliary educational services are taxable. [Impact: Such services by the educational institution were exempt. Now, the exemption for the above services are available only when they are provided to the educational institution]

2. Services provided by way of temporary transfer or permitting the use or enjoyment of the following rights:

(a)   Copyright relating to original literary, dramatic, musical or artistic works (covered u/s 13(1)(a) of Copyright Act, 1957).

(b)   Copyright of Cinematograph Films for exhibition in a Cinema Hall or Cinema Theatre.

[Impact: Earlier, copyright of cinematograph films covered u/s 13(1)(a) are exempt. Now, copyright in relation to cinematograph films would be exempt irrespective of whether or not it is covered under the Copyright Act]

3.Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess. If such establishment has the facility of air–conditioning or central air–heating in any part of the establishment, at any time during the year, then it is liable for service tax. [Impact: Earlier, restaurants were taxable only when alcoholic beverages were served. Now, any restaurant with AC / heating system is taxable]

4. Transportation of the following products from one place in India to another place by rail or a vessel are taxable – (a) Petroleum or Petroleum Products (b) Postal mail or Mail Bags  (c) Household Effects

[Impact: Earlier the transportation of above products were exempt from Service Tax]

5. Services by a Goods Transport Agency relating to the following products shall also be exempt –

(a)   Foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil (excluding alcoholic beverages)

(b)   Chemical fertilizers and Oil cakes

(c)   Newspaper or Magazines registered with the Registrar of Newspaper

(d)   Relief materials meant for victims of natural or man–made disasters, calamities, accidents, mishap or

(e)   Defence or Military Equipments

(f)    Agricultural Produce [Impact: Earlier, exemption was available only for fruits, vegetables, eggs, milk, food grains or pulses. It is extended to agricultural produce)

6. Services by way of Vehicle Parking to General Public are taxable. [Impact: Earlier, such service was exempt from service tax]

7. Services provided to Government or Local Authority or Governmental Authority by way of repair or maintenance of an aircraft is taxable. [Impact: Earlier such service was exempted].

Exemption is withdrawn for charitable activities relating to advancement of any other object of general public. [Impact: Earlier, exemption was given for services for advancement of objects of general public utility. This is now withdrawn.]

4. Notification Nos.06/2013, 07/2013 and 08/2013 dt. 18.04.2013 - Exemption for Services provided to Exporters under Foreign Trade Policy Schemes

Nature of Exemption:

Input Services shall be exempt if used by exporters, who hold the Focus Market Duty Credit Scrip / Focus Product Duty Credit Scrip / Vishesh Krishi and Gram Udyog Yojana Duty Credit Scrip issued by the Regional Authority under the Foreign Trade Policy.

Conditions for availing exempton:

(a)   The Scrip should be issued against exports to the countries notified in the Appendix to the Handbook of Foreign Trade Procedures.

(b)   The Scrip is registered with the Customs Authority at the port of registration

(c)   The Scrip Holder shall be located in the taxable territory.

(d)   The Scrip Holder may either be the Original Holder or Transferee Holder. He should present the scrip to the Customs Authority along with a letter and an invoice / challan or bill issued by the service provider.

(e)   The Customs Authority shall debit the service tax leviable, in or on the reverse of the Scrip.

(f)    The date of debit in the scrip, by the Customs Authority shall be treated as the date of payment of service tax.

(g)   If the actual due date of payment of service tax is prior to the date of debit in the Scrip, or the actual tax rate is in greater than the rate of service tax mentioned in the invoice, the Scrip Holder shall pay additional service tax along with interest.

(h)   The Scrip Holder presents the scrip debited by the said Customs Authority within 30 days to the Jurisdictional CEO, with an undertaking to pay any short paid service tax along with interest.

(i)    Based on the written advice and undertaking, the CEO shall verify, the details of the service tax leviable, which were debited by the said Customs Authority, and keep a record of payment of such service tax and interest.

(j)    The service provider retains a copy of the scrip, and verified by the said Officer and duly attested by the Scrip Holder in support of the exemption taxable services.

(k)   The Scrip Holder shall be entitled to avail the drawback or CENVAT credit of the service tax, against the service tax debited in the scrip and validated by the said Officer.

Updates in Corporate Law – June 2013 Series

1.   [2013] 33 taxmann.com 33 (SC) – Foreign Exchange Management Act,1999

Manohar Lal Sharma Vs. Union of India

Section 47, read with section 6, of the Foreign Exchange Management Act, 1999 – Power to make Regulations – Petitioner sought for quashing of Press Notes by which policy of Foreign Direct Investment (FDI) in Single-Brand Product Retail Trading, Multi-Brand Retail Trading, Air Transport Services, Broadcasting Carriage Services and Power Exchanges had been reviewed – According to petitioner, same were unconstitutional and without authority of law – Whether on matters affecting a policy, Court does not interfere unless policy is unconstitutional or contrary to statutory provisions or arbitrary or irrational or in abuse of power and impugned policy that allows FDI up to 51 per cent in Multi-Brand Retail Trading does not appear to suffer from any of these vices . Therefore writ petition was dismissed.

 

2.   [2013] 33 taxmann.com 400 (SC) – Companies Act, 1956

Chandran Ratna Swamy Vs. K.C. Palaniswamy

JV partner directed to buy out other JV partner’s shares (return his investment with 8% interest) by CLB & HC(in appeal) in petition filed by the latter for oppression/mismanagement under section 397/398 and directed the former to repay Instead of complying with the CLB & HC orders, the former harassed the latter by filing criminal complaints on matters related to JV contractual disputes which were already settled by CLB & HC. This clearly amounts to abuse of process of law and criminal proceedings and FIRs deserved to be quashed

 

3.   [2013] 33 taxmann.com 199 (SC) – Companies Act, 1956

V.L.S. Finance Ltd. Vs. Union of India

The legislature has conferred the same power to the Company Law Board which can exercise its power either before or after the institution of any prosecution whereas the criminal court has no power to accord permission for composition of an offence before the institution of the proceeding. The legislature in its wisdom has not put the rider of prior permission of the court before compounding the offence by the Company Law Board and in case the contention of the appellant is accepted, same would amount to addition of the words “with the prior permission of the court” in the Act, which is not permissible.

Declared by court that “no prior permission is necessary from court, when the power is exercised by the Company Law Board”. Thus the petition was dismissed on the same ground.

4.   [2013] 33 taxmann.com 350 (SC) – Companies Act, 1956

Spentex Industries Ltd. Vs. Indo Rama Synthetics (India) Ltd

The modifications which the Court can carry out are only to be for the proper working of the Scheme. The Court cannot change the basic fabric of the Scheme. A modification for the proper working of the Scheme is distinct from a modification of the Scheme itself. What is permissible under Section 392(1)(b) is the former and not the latter.

 

 

5.   CircularNo.11/2013 [File No. 17/118/2012 CL V], Dated 29-05-2013

Section 12 Of The Companies Act, 1956 – Memorandum Of Association – Mode Of Forming Incorporated Company – Power Of Rocs To Obtain Declaration/Affidavits From Subscribers/First Directors At The Time Of Incorporation

The matter of protection of interest of investors, including depositors, is very important to ensure healthy corporate capital market environment in the country. The recent instances of raising of monies by companies in a manner which is opaque/convoluted, non-accountable and which does not protect interests of depositors have been taken note of by the Ministry seriously.

Keeping in view the need to protect the interest of investors and ensure that companies raise monies in accordance with the provisions of the Companies Act/Deposit Rules, it is clarified that in exercise of the powers under the Companies Act, the Registrar of Companies may obtain declaration/affidavits from subscribers/first directors first at the time of incorporation and from directors, subsequently whenever company changes its objects, to the effect that company/directors shall not accept deposits unless compliance with the applicable provisions of Companies Act, 1956, RBI Act, 1934 and SEBI Act, 1992 and rules/directions/regulations made thereunder are duly complied and filed with the concerned authorities.

Updates in Direct Taxes – June 2013 Series

A.    Income Tax (3rd amendment) Rules, 2013 have been notified vide Notification 34/2013 dated 01.05.2013 W.e.f. 01.04.2013, bringing the following amendments –

1. E-filing of Audit Reports – Notification No. 34/2013, dated 1-5-2013

Where an assessee is required to furnish a report of audit u/s 44AB (Tax Audit Report in Form 3CA / 3CB and 3CD), Transfer Pricing Audit Report u/s 92E or MAT report in (Form 29B) u/s 115 JB of the act, he shall furnish the same electronically.

 2.     Mandatory E-filing of Returns  – Notification No. 34/2013, dated 1-5-2013

  • E-filing of returns is mandatory for a person other than persons required to file returns in Form ITR–7 [Charitable Trusts, Political Parties, Scientific Research Organisation, Newspaper Agencies, Educational Institutions etc.], if their total income exceeds Rs.5 Lakhs.
  • Assesses required to file returns in form ITR–7, can file the same either in paper form or electronically

3.     Notification of New Forms

  • Amendments have been made and new forms as specified below have been notified –

(a) SAHAJ (ITR-1),

(b)     ITR-2

(c)     ITR-3,

(d) SUGAM (ITR-4S),

(e)      ITR-4

(f)      ITR-V

 B.    Procedural aspect in respect of TDS u/s194 IA –  W.r.t to remittance of tax, furnishing of returns and issuance of certificates for TDS u/s 194 IA (TDS on transfer of immovable property for a consideration of 50 Lakhs or more), the following procedure has been notified –

 1.     Remittance – Any sum deducted u/s 194IA shall be remitted to the Central Government within seven days from the end of the month of deduction

2.     Challan – The remittance shall be accompanied by a Challan-cum-statement in Form 26QB, which has been notified. The same shall be furnished in the manner as may be prescribed by Director General of Income Tax (Systems)

3.     Mode of payment – The TDS shall be remitted electronically within the time limit specified to the RBI / SBI / Authorised Bank in the manner as may be prescribed by Director General of Income Tax (Systems)

4.     TDS Certificate – The Deductor shall issue a TDS Certificate in Form 16B, which has been notified within 15 days from the due date of remittance

C. Recent Case Laws

1.    High court of Delhi Commissioner of Income- tax Vs. Delhi Press Patra Prakashan Ltd. [2013] 33 taxmann.com 133 (Gujarat)

The following issues were decided in the above case –

A.   Issue #1:Industrial undertaking which undertakes job work entitled to section 80-I deduction

 Reasoning: An assessee owning an industrial undertaking may either choose to purchase raw material on its own and process the same or it may acquire raw material on job work basis and utilize the same for carrying on the industrial activity.  In either event so long as the industrial undertaking owned by the assessee fulfills the conditions as specified under Section 80-I(2) of the Act, the benefit of Section 80-I of the Act cannot be denied to the assessee.

B.    Issue #2: Printing amounts to “manufacture or production of an article or thing”

Reasoning: The purpose and usage of a blank paper is completely different from the use and purpose of a printed magazine or periodical. Once the blank paper undergoes a process of printing, the character of blank paper changes completely and the content of the printed material now becomes the identity of a printed paper.

C.  Issue #3: Condition of employment of 10 or more workers-Workers employed in manufacturing/production process not on rolls but employed through another agency also to be included to compute number of workers

Reasoning: The expression “workers” is not defined in the Act and there is no reason to limit the expression “workers” as occurring in section 80-I(2)(iv) of the Act to only mean such workers as are employed directly by the assessee and ignore the workers who are engaged in the manufacturing process carried on by the industrial undertaking albeit employed through another agency.

D.   Issue #4: Interpretation of the condition “industrial undertaking should not be formed by splitting, or reconstruction of a business already in existence”

Reasoning: The test to be applied is whether the new undertaking has been formed as an undertaking independent of the existing undertaking and is capable of carrying on its activity independent of the existing Unit. The test of whether new units were independent undertakings or not, is not to be adjudged on the basis whether the said units were carrying on work for the existing business but whether the Units were independently carrying on the business for which it is formed.

 2.    Commissioner of Income-tax-IV  V. Sikandarkhan N Tunvar [2013] 33 taxmann.com 133 (Gujarat)

 Decision: Section 40(a)(ia) disallowance would cover not only the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year .

 Reasoning: The term used is interest, commission, brokerage etc. is payable to a resident or amounts payable to a contractor or sub contractor for carrying out any work. The language used is not that such amount must continue to remain payable till the end of the accounting year. Any such interpretation would require reading words which the legislature has not used and is not acceptable. Hence the scope of Section 40(a)(ia) would be wide enough to disallow any amount on which TDS has not been made and not only that amount which remain payable on 31st March

3. Commissioner of Income-tax-IV V. Stratex Net Works (India) Private Ltd. [2013] 33 taxmann.com 168 (Delhi)

Decision: The installation/commissioning and maintenance services undertaken by assessee on the products supplied by its Associated Enterprise (AE) were independent services unconnected with the international transactions of warranty support services rendered to the AE. Hence, the transactions pertaining to the installation/commissioning and maintenance services were not international transactions as contemplated under section 92B(1).

They were also not deemed international transactions under section 92B(2) of the said Act since there is no finding that the terms of the transaction of installation/commissioning as well as maintenance had been determined in substance between the customers and the respondent/assessee by the associated enterprise