30 comments Thursday, December 16, 2010

Central Sales Tax Act 1956 envisages single point of taxation i.e tax at the first point of sales. Subsequent sales during the movement of the goods from one state to another have been exempted under section 6(2) of CST Act.

Before proceeding to understand which sale is exempted under section 6(2) and the conditions for exemption, one should understand some relevant concepts relating to it.

What is sales by transfer of documents of title: Section 3(b) provides that a sale or purchase effected by transfer of documents of title to the goods during their movement from one state to another shall be deemed to take place in the cource of interstate trade or commerce.

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0 comments Tuesday, December 14, 2010
Section 143 of the Income-tax Act, 1961 - Assessment - General - Clarification regarding processing of ITR-1 and ITR-2 returns - Credit for tax deducted at source for A.Y. 2009-10
INSTRUCTION NO. 9/2010 [F. NO. 225/25/2010/IT (A-II)], DATED 9-12-2010
1. Reference may be made to Board’s Instruction No. 7, dated 16-8-2010 in which it has been stated, inter alia, that in cases where the return is filed in ITR-1 and ITR-2 for the A.Y. 2009-10, and where the TDS claim does not exceed Rs. three lakh and where the refund computed does not exceed Rs. Twenty five thousand, the TDS claim of the taxpayer shall be accepted at the time of processing of the returns provided the TDS payment reported in AS-26 is more than Rs. zero.

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F forms under CST Act 1956

17 comments Sunday, December 5, 2010

To constitute interstate sales one of the basic requirement is that there should be sale. If a person sends goods outside from its state to its  branch office in another state then it is not sale because you cannot sell goods to oneself. Similarly if a dealer sends goods to its agent in another state who stocks and sells goods on behalf of the dealer, such agent is called consignment agent and such stock transfer is also not considered as interstate sales since there is no sales involved in it, sales will take place when such agent will sell goods. But to prove such stock/branch transfer, F form is required to be produced as proof.

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0 comments Tuesday, November 30, 2010
Section 69 of Income Tax Act deals with the cases of unexplained investments which have been made by the assessee but not accounted for in his books of accounts if any maintained and for which no satisfactory explanation is offered by the assessee.

I have seen some cases where higher stock than actual is declared by assesses to their bankers for availing more credit and at the time of assessment u/s 143(3) of Income Tax Act such assesses face difficulties to explain such higher stock declared to their bankers, if the assessing officer summons such stock statements from the bankers for the purpose of making assessment.

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0 comments Saturday, November 13, 2010

The Excise and Taxation Department, Government of Punjab has amended rule 21 of Punjab VAT rules to add sub rule 2-A in the said rule to provide for that ITC shall be allowed to a taxable person to the extent of tax payable on the resale value of goods or sale value of manufactured/processed goods where such goods are sold below the purchase price in case of resale or cost price in case of manufactured/processed goods. The balance ITC shall be reversed.

Implications of the ammendment: The implications that follow from this amendment are that now if a person sells goods below the purchase price in case of traded goods and below the cost price in case of manufactured goods then the resultant excess ITC that will arise due to loss that arises will have to be reversed. In other words ITC will be available only upto the sale or resale value of the goods in question.

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0 comments Monday, November 8, 2010

For registration under the Punjab VAT Act 2005 one of the requirement u/s 25(1) is furnishing of security for securing the payment of tax under PVAT Act 2005. This requirement is compulsory as per the wording of section 25(1) of PVAT Act 2005 which runs as under:

Every person applying for registration under this Act, shall furnish a security of rupees fifty thousand in the manner, prescribed for securing proper and timely payments of tax or any other sum, payable by him under this Act:
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No Input Tax Credit under PVAT Act on Purchase of Diesel used for capitve generation of electric power - Punjab and Haryana High Court

0 comments Saturday, October 16, 2010
The Honourable Punjab and Haryana High court has held in an important decision in the case of
State of Punjab & others.
M/s Malwa Cotton & Spinning Mills Ltd.(decided on 24/08/2010)
reversing the decision of the Punjab VAT Tribunal that no input tax credit will be available on the purchase of  Diesel used in generation of electric power for capitve use in the factory under clause (i) of section 13(5).

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No penalty u/s 271B, If the audit report is obtained within the due date, but return is filed after the due date.

0 comments Tuesday, September 28, 2010
I have had a discussion lately on the topic whether penalty u/s 271B is imposable in case the audit report u/s 44AB is obtained within the due date of filing the ITR u/s 139 but the ITR is filed after such due date? I have tried to examine such situation out of my Legal conscience as follows:

The due date for filing Income Tax Return for corporate and those assessees who are required to get their accounts audited is 30th september every year. But it has been extended to 15th October this year. The Due date for furnishing Audit report u/s 44AB to the Income Tax Department is also 30th september every year which also has been extended to 15th october this year.

Earlier before the introduction of annexure less forms the audit report was required to be submitted with the department before the due date of return of Income, otherwise it attracted penal provisions u/s 271B. Penalty under section 271 B is a sum equal to half per cent of the total sales, turnover or gross receipts from business or profession as the case may be , in such financial year or one lakh rupees, whichever is less.

But after the introduction of annexure less forms i.e ITR4, ITR5, ITR6 etc., the Tax Audit Report is not required to be submitted along with the Return of Income nor it is to be submitted separately any time before or after the due date. But one should get the Tax Audit Report from his CA before the due date of submitting the Return of Income and fill the relevant columns of the Return of Income on the basis of such report.

The Tax Audit Report is required to be submitted if it is called for by the Income Tax Officer during the Assessment proceedings. This has also been explained in CBDT's circular No 3 of 2009. The relevant portion of the said circular is reprduced herebelow:
"7. Following clarifications are also issued in respect of certain issues arising from furnishing
the returns in the above mentioned forms:

(i) An assessee should obtain the report of audit from an accountant under
section 44AB of the Act on or before the due date of the furnishing of the return and
should fill out the relevant columns of the return forms on the basis of such report.
However, the report of audit should not be attached with the return or furnished
separately any time before or after the due date. The assessee should retain the report
with himself. If called for by any income-tax authority during any proceeding under the
Act, it shall be incumbent upon the assessee to furnish/produce the same in original. No
penalty under section 271B shall be initiated or levied for not furnishing the tax audit
report on or before the due date. However, if the audit report has not been obtained before
the due date, provisions of section 271B shall continue to be attracted."

As per the above circular You are not in contravention of any provisions if tax audit report is obtained before due date.
There is no Penalty attracted if the Tax Audit Report is not submitted along with the Income Tax Return on or before the due date. However , if the Tax Audit report has not been obtained from the CA on or before the due date of filing return of Income, Penalty under section 271 B shall be attracted.
Although section 234A is attracted for late filing of return .There was one view expressed by someone to me that filing up the ITR ( particularly tax audit columns) is furnishing of the tax audit report and if that is not done before due date , penalty can be levied .  
 In my view  circular asks the assessee to fill up the relevant tax audit columns in the return of Income and file the return . It no where mentions that fill up the columns and file the ITR before due date. Moreover section 271B should be read with section 44AB and not with section 139.
Penalty u/s 271B is imposed on two grounds i.e for not getting the books of accounts audited within due date and for not furnishing the audit report within due date of filling of return of income. Now as per above circular furnishing of audit report has been done away with after the introduction of annexureless forms. The only thing that is required is to obtain the audit report within due date and fill the relavant audit columns of the ITR,  if it is done no penalty can be initiated u/s 271B.
Therefore in my view if you have got the audit report from your C.A. on or before the due date of furnishing the Return of Income, there is no penalty u/s 271B attracted even if you file return after the due date. 
Please Note: The views expressed are my Personal Views only.
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Due date of auditable Income Tax Returns extended from 30th september to 15th october

0 comments Monday, September 27, 2010
F.No. 225/72/2010-ITA.II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Dated : September 27, 2010
Order under Section 119 of the Income Tax Act, 1961
On consideration of the reports of disturbance of general life caused due to floods and heavy rains, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the due date of filing of returns of income for the Assessment Year 2010-11 from 30.09.2010 to 15th October 2010. Accordingly the due date for Tax Audit report u/s. 44AB of the Income Tax Act is also extended to 15th October, 2010.
(Ajay Goyal)
Director (ITA. II)
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Supply of SIM card is not sale, discount on sale of SIM cards and recharge coupans liable to TDS u/s 194H - Kerala High Court

0 comments Wednesday, September 22, 2010
The Kerala High Court in an important Judgement namely Vodafone Essar Cellular vs. ACIThas decided that the discount given on the SIM cards and recharge coupans to the dealers of the telecom company is commission u/s 194H and is liable to TDS. The court held that "The terminology used by the assessee for payment to the distributors is immaterial. In substance the discount given at the time of sale of Sim Cards or Recharge coupons by the assessee to the distributors is a payment for services rendered to the assessee and falls within s. 194H."
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A finding of mens rea is a condition precedent for levying penalty under section 10(b) read with section 10A of Central Sales Tax Act

0 comments Friday, September 17, 2010

  • The use of the expression “falsely represents” is indicative of the fact that the offence under Section 10(b) comes into existence only where a dealer acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct; therefore, in proceedings for levy of penalty under Section 10A burden would be on the revenue to prove the existence of circumstances constituting the said offence

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12 comments Sunday, September 12, 2010
Under CST Act 1956 there are lot of Forms and declarations which help in saving CST on the interstate transactions. C form is an important and foremost common among dealers registered under CST Act 1956 engaged in interstate sales or purchases.

Although the CST Act 1956 is on the verge of its end with the advent of GST knocking at the doors waiting to change the whole picture of Indirect taxation in India. But still I feel inclined to discuss some issues relating to C forms under CST Act since due to the pendency of assessments under VAT and CST Acts many dealers have been facing problems in getting and producing the C forms for finalization of their assessments. Some important issues relating to the C forms are discussed as below for the benefit of dealers all around India:

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4 comments Monday, September 6, 2010
  1. Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few categories of cases listed below.
  2. List of cases selected during each month in accordance with the selection criteria mentioned below shall be submitted by the Assessing Officers to their respective Range heads by the 15th of the following month and also displayed on the Notice Board of their office.
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Software Supply Is Not "Sale"- Madras High Court

1 comments Friday, September 3, 2010
The Madras High court has held in Infotech software Dealers Association vs UOI that though software is a good but a supply of it may be a service and not a sales. When a person enters into an agreement with the developer of software like an end user licence agreement for marketing the software to end user, then such transaction between the end user and the person marketing such software is only a service and not a sale.

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New Direct tax code is cleared:Exemption limits hiked, will have to pay less tax under DTC

2 comments Thursday, August 26, 2010
The cabinet has cleared new Direct tax code which is proposed to be implemented from 01-04-2011 onwards. The new Direct Tax code proposes to raise the basic exemption limit for individual tax payers from Rs 1.6 lakh to Rs 2 lakh. So there will be no tax on incomes below Rs 2 lakh. The exemption for senior citizens has been raised to Rs 2.5 lakh, up from 2.4 lakh at present.

Direct Tax Code incorporates all three direct tax act; IT Act of 1961, Wealth Tax of 1957, Dividend Distribution Tax of 1997.The Bill also seeks to remove surcharge and cess on corporate tax, providing relief to business houses. According to the new direct tax code corporate tax rate will be 30 per cent including all taxes, down from the existing 33 per cent.

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Development of IT infrastructure must before implementation of GST

0 comments Tuesday, August 24, 2010
Goods and Service tax (GST) is the most talked about topic in the field of indirect taxation today in India. Everybody is keenly waiting for the proposed GST draft which will replace the existing system of VAT in India. The central government wants the GST to be implemented in India by 1st April, 2011. Although there are and will be been many hurdles which are to be crossed before GST is implemented in India.

With the advent of GST the whole picture of indirect taxation in India will change. GST will help bringing to an end tax cascading i.e. tax on tax. But before GST is implemented all over the nation, the IT infrastructure connecting all the states must be developed.

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1 comments Sunday, August 15, 2010
T.D.S means the Tax deducted at source. Whenever a person liable to deduct tax of another person under Income Tax Act, deducts tax, the credit of such tax is given to the deductee when his liability to pay income tax is calculated. Such credit is given on the basis of the information given by the deductor to the Income Tax Department by way of filing his T.D.S statements, wherein the full detail about the tax deducted, the PAN No of deductee etc are given, so that the right credit of T.D.S can be given to the deductee.

Rule 37BA(1) provides that credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chepter XVII, shall be given to the person to whom payment has been made or credit has been given (i.e.Deductee), on the basis of information relating to deduction of tax furnished by the deductor to the income tax authority or the person authorized by such authority.
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The Punjab Govt has imposed entry tax on some new items and rate of entry tax on certain items has been revised. These revised rates of entry tax and imposition of entry tax on new items will come into force w.e.f 18/08/2010. The new items and revised rate of entry tax is given herebelow in the public notice issued by the Punjab Government.

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1 comments Sunday, August 8, 2010

There are many presumptive income schemes for small businessmen engaged in civil construction, transport business, retailers etc. A person covered under these schemes can declare his income under these sections on presumptive basis and can get himself free from the botheration of maintaining regular books of accounts u/s 44AA.

However these provisions are optional and an assessee covered under these schemes can also declare income outside such schemes by declaring lower profits as compare to what is required under these presumptive schemes. But in such case he will have not only to maintain compulsory books of accounts u/s 44AA but also will have to get his books of accounts audited u/s 44AB.

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A big Flaw and Mistake in The Punjab VAT Act 2005

0 comments Friday, August 6, 2010

There are many sections under the Punjab VAT Act where the word Designated officers is used. Many  powers under the Punjab VAT Act 2005 like of assessments, of levying penalties etc have been conferred on the Designated Officers. These Designated officers are appointed and conferred powers upon under section 3 of Punjab VAT Act 2005. Wherein the state govt has been authorised to confer various powers under the Punjab VAT Act 2005 on the different officials and allow them to act as designated officers under various sections of the PVAT Act 2005 by issuing a notification to that effect.
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0 comments Monday, August 2, 2010

The due date for filing income tax return for  corporate aseessees and other aseessees who are  required to get their accounts audited under Income Tax Act 1961 or under any other law for the time being in force is 30th September and for others it is 31st July every year as have been prescribed u/s 139(1).

These due dates are also sometimes extended by the CBDT as this year has been done, extending the due date from 31st July to 4h August. For a layman sometimes it may create doubt if he fails to file his return of Income within due date, whether he can file his return of Income after the due date, especially when  he is under no obligation  to get his accounts audited under Income Tax Act or under any other law.

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1 comments Saturday, July 31, 2010
CBDT has extended the due date for filing income tax returns for assessment yeas 2010-11 has been extended till 4th August 2010. All paper and efilled returns will be considered as filed within due date if filed on or before 4th August 2010.
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New VAT form 16-A and 16-B notified for Brick Klin and Dhaba owners opting for lump sum payment of tax under Punjab VAT Act 2005

1 comments Thursday, July 15, 2010

The Excise and taxation department has notified new VAT form returns 16A and 16B for the Brick Klin owners and Dhaba owners respectively under the new rule 36-A added to Punjab VAT Rules. These  returns forms are required to be filed quatorly by those brick klin and dhaba owners who opt for the Lump Sum payment of tax under Punjab VAT Act 2005. The relevant notification as well as the form 16-A and 16-B are available for download at the official website of the department and the same is reproduced herebelow for ready reference.  

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Efiling of Income Tax Return made compulsory for Individuals and HUFs who are covered under section 44AB

6 comments Sunday, July 11, 2010
The Efiling of ITR 4 has been made compulsory by the Income Tax Department for the Assessment year 2010-11 for those individuals and HUFs who are required to get their accounts audited u/s 44AB of Income Tax Act by a notofication No.49/2010[F.No.142/15/2010-TPL], dated 9-7-2010.Earlier it was only Firms  who were liable to get their accounts audited u/s 44AB and the companies were compulsorly required to file their ITR online.
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Filling Stations in Punjab need not to calculate Input Tax or Output Tax on Petrol and Diesel under Punjab VAT Act 2005

1 comments Thursday, July 8, 2010

Filling Station dealers i.e. Retail outlets of oil companies are not required under the Punjab VAT Act 2005 to calculate output tax or input tax on the sale and purchase of petrol and diesel in view of explanation 8 which was added lately to section 2(zg) explaining the sale price of oil companies in relation to the petrol and diesel under the Punjab VAT Act which runs as under:
“The amount received or receivable by oil companies for the sale of diesel and petrol, shall be deemed to be equivalent to the price, on which the retail outlets will sell these commodities to the consumer”

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Understanding the provisions relating to Transfer Pricing under Income Tax Act 1961

1 comments Sunday, June 20, 2010

With the advent of MNCs(Multi National Concerns) a trend has also been adopted by the MNCs to structure their investments and business strategy in such a way that profits are maximized in such jurisdictions where tax rates are low, which give rise to the emerging  problem of transfer pricing all over the world. Many countries have made laws to deal with the issue of transfer pricing. India has been a late enterant in making provisions under the Income Tax Act to tackle the issue of transfer pricing. Although there existed section 92 under Income tax Act 1961 but there were not relevant rules which could help tackle the issue of transfer pricing. Section 92A to 92F had been inserted to deal with transfer pricing by the Finance Act, 2001. Some views are expressed in this article as below explaining provisions under the Income Tax Act 1961 dealing with transfer pricing.

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Validity of the Entry Fees/Tax imposed on the vehicles carrying Pilgrims By State of J & K

1 comments Thursday, June 17, 2010
Jammu and Kashmir government said on 10th June, 2010 that Rs 2,000 would be charged as entry fee per vehicle carrying pilgrims to the cave shrines of Mata Vaishnodevi and Amarnath for a period of 3 days.

According to a notification issued by the government under Jammu and Kashnir Motor Vehicle Taxtion Act, 1957, the vehicles carrying passengers to Mata Vaishnodevi Yatra would be charged Rs 2,000 at entry point for a period of 3 days and after that Rs 2,000 will be charged per day.

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Compulsory Maintenance of books of account under Income Tax Act 1961

19 comments Saturday, June 5, 2010
It is generally seen that there is confusion among taxpayers about maintenance of books of accounts under Income Tax Act like who is required compulsorly to maintain the books of accounts and for how many years one has to keep his books of accounts.  Some views are expressed on this topic as follows:

Maintainence of books of accounts by Professionals: Section 44AA of Income Tax Act and rule 6F of Income Tax rules deal with the provisions regarding maitenance of books of accounts under Income tax Act. As per section 44AA(1) read with rule 6F the persons carrying on any of the profession as mentioned below are required to maintain books of accounts and other documents as may enable the assessing officer to compute his total income, if yearly gross receipts of the profession exceeded  Rs 150000
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Meaning of Turnover or sales for the purpose of Tax Audit

0 comments Monday, May 31, 2010
A person is required to get his accounts audited u/s 44AB if
1)The turnover of  business exceeds Rs 60 Lakhs, or
2)The Gross Receipts of Profession exceed Rs 15 Lakhs.

In case of business what should be the meaning of turnover/sales? Should it be Gross sales or net sales? Should it include VAT, Sales tax or excise duty? The meaning of turnover/sales for the purpose of tax audit is dissussed as follows:

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0 comments Sunday, May 30, 2010
Assessment under the Punjab VAT Act 2005 are made u/s 29. The assessment under Punjab VAT Act is made after the filing of the VAT 20 i.e annual return except in the case of Provisional Assessment. The assessment of Tax under section 29 of Punjab VAT Act 2005 can be done by two ways which can be discussed as follows:

Assessment on the basis of return filed by the dealer: Assessment  may  be  framed  on  the  basis  of  the  return or  returns  filed  by  the  taxable  persons u/s 29(1) . Where  the  return  is filed under  Sec.26 the  assessing  officer  under  Rule  43   scrutinizies  the  same and proceed to make assessment  under  Sec. 29(1) of the Act. Section 29(1) of Punjab VAT Act 2005 runs as under:
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Rule 36 of Punjab VAT Rules regarding monthy filing of VAT returns ammended

0 comments Wednesday, May 26, 2010
Rule 36 of Punjab VAT rules which deals with the filing of VAT returns has been ammended w.e.f 18/05/2010 vide notification No . G.S.R.   /P.A.8/2005/S.70/Amd.(  )/2010. s.The second and third Proviso to Rule 36 (1) have been ammended to provide that the monthly VAT returns are now required to be filed by only those dealers whose annual tax liability was Rs 2 Lakh or more in the previous Year and once the dealer's annual tax liability exceeds Rs  2 lakhs he will continue to file his monthly VAT returns in Form VAT 16 for all the subsequent years irrespective of the fact that his annual tax liability becomes less than Rs 2 lakhs in the subsequent years. 

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List of relitives U/S 56(2)VII of Income Tax Act 1961

0 comments Friday, May 21, 2010

Relatives from whom Gift is permissible under Income Tax Act
List of Male Donors                                           List of Female Donors
Father (Papa or Pitaji)                                         Mother (Maa or Mummy)
Brother (Bhai)                                                     Sister (Bahin)
Son (Beta or Putra)                                             Daughter (Beti or Putri)
Grand Son (Pota or Potra)                                  Grand Daughter (Poti or Potri)
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Procedure for VAT registration under Punjab VAT Act 2005 and CST Act 1956

0 comments Wednesday, May 19, 2010

Who is required to get registered as a VAT Dealer under Punjab VAT Act 2005
Every person, except a casual trader and one dealing exclusively in goods declared tax free, whose gross turnover during the year  exceeded the taxable quantum, as provided below, is  liable to pay tax under the Punjab VAT Act by way of VAT on the taxable turnover.

(i)            in relation to any person, who imports taxable goods for sale or use in manufacturing or processing any goods in the State, rupee one;
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Excess ITC can be utilised for payment of 25% of additional demand u/s 62(5) of PVAT Act 2005

0 comments Sunday, May 9, 2010
I have written an article earlier explaining the provisions of section 15(3) of Punjab VAT Act 2005. Section 15 of Punjab VAT Act deals with the Net Tax Payable by a taxable person. According to section 15(3) excess ITC after adjustment u/s 15(2) shall be adjusted against any outstanding tax, penalty or interest under this Act or under the Central Sales Tax Act, 1956, as the case may be.

Thus not only penalties but also any outstanding Tax or interest can be adjusted from the Excess ITC. Now the Punjab VAT Tribunal has confirmed in Ganesh Iron and General Store, Killinwari (muktsar) Vs. State of Punjab decided on 18-05-2009 [(2010) 14 STM 486 (PVAT-Tri.)] that excess ITC can also be utilised for payment of additional demand which is pre condition for hearing appeal.
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Section 51 of PVAT Act 2005

0 comments Sunday, May 2, 2010

Under section 51 of PVAT Act 2005 information collection centres have been esteblished by the Punjab Government at various places with a view to prevent and check the evasion and avoidance of tax under PVAT Act. Section 51(1) of PVAT Act authorizes the state government to esteblish such information collection centre or check posts by notification.

DOCUMENTS TO BE CARRIED WITH GOODS VEHICLE: According to sub section 2 of section 51 the owner or person incharge of a goods vehicle needs to carry with him the following documents:
1)a goods vehicle record,
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0 comments Tuesday, April 27, 2010
The most awaited SARAL II form i.e ITR-1 has been notified by the CBDT for the A.Y 2010-11 vide notification  dated 23/04/2010. The new SARAL II Form is different from the earlier ITR-1 form in many respects.

The new SARAL II (ITR-1) form is of two pages only. The earlier ITR-1 form was also of two pages but the earlier ITR form could be filed by only those assessee who had income from the salaries/Pension and Income from Interest if any. But the new form can be filed by the asseessees having salary/pension Income, Income from one house property (excluding loss brought forward from previous years),Income from Other Sources (Excluding Winning from Lottery and Income from Race Horses).

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FIRs should be made compulsory

0 comments Sunday, April 18, 2010
FIR means First Information Report i.e report about the happening of a crime. Whenever anyone meet with a crime or see the crime happening and he informs the police, it should constitute an FIR and police should not refuse to register it.

But the reality is that the whenever a common man goes for registering a FIR its never easy for him. It is generaly seen that the Police always first start enquiring about the crime whether it has happened or not instead of registering FIR. But actualy what should happen is that after registering the FIR the enquiry should be started because the basis of Police enquiry should be FIR.
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Provisions of Section 269SS and 269T under Income Tax Act

39 comments Sunday, March 28, 2010
Finance is the important part and need of every business. The own capital of a person may not be always sufficient to meet the needs of finance of the business. Therefore the Loans and deposits become necessary and important to meet the financial needs of the business. But while taking loans and accepting deposits one also has to keep in mind the restrictions imposed under the Income Tax Act on the mode of taking such loans and deposits.

Such provisions regulating the mode of accepting or taking loans or deposits and mode of repayment of certain loans and deposits are contained under section 269SS and 269T of the Income Tax Act 1961.
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Input Tax Credit on goods purchased under the PVAT Act is admissible only upto the fourth stage of its Purchase

0 comments Monday, March 22, 2010
The Punjab VAT Rules have been ammended to provide for that the input tax credit on purchase of goods from manufacturer or importer will be available to a dealer only upto the fourth stage of its purchase. The dealers will also have to mention on the bills that on which stage he is selling the goods. VAT form 23 and 24 has also been ammended to this effect.

The relevent notification is reproduced herebelow for ready reference:
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The VAT Forms under PVAT Act been updated

0 comments Sunday, March 21, 2010
The VAT forms i.e VAT 15 form has been updated in view of the change in the rate in the PVAT Act on schedule B goods from 4% to 5% and additional surcharge levied @ 10%. The next quatorly VAT Return under the PVAT Act 2005 is due to be filed in the next month of april.

All the software companies dealing in VAT E filling softwares and the dealers, C.As and Lawyers practising PVAT Act and accountants have been waiting for the changes in the VAT return forms in view of the increase in VAT rate from 4% to 5% on schedule B goods and the surcharge levied @ 10% under the PVAT Act 2005. The relevent important changes made in the worksheet of VAT form 15 regarding the changed rate and surcharge is as follows:
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Precondition of Deposit of 25% of tax penalty interest u/s 62(5) of PVAT Act 2005 not neccessary where the goods are detained by the Department

0 comments Tuesday, March 16, 2010
Section 62(5) of the PVAT Act 2005 provides for the precondition of deposit of 25% of total amount of tax, penalty and interest , if any before entertaining any appeal. Such condition was also imposed evan on those appealent whose entire goods are detained by the department u/s 51 evan if the value of such detained goods exceed the total amount of tax, penality, interest. In such cases it results in burdening the assessee with another liability.

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Proposed Imporant Changes in Income Tax in the budget of 2010-2011

0 comments Friday, February 26, 2010
The Budget for the year 2010-11 has been presented on 26/02/2010. The proposed important changes in Income Tax Act 1961 and rates in the finance bill 2010 are provided here below:

Upto Rs. 1,60,000 Nil.
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Penalities under PVAT or CST Act can be adjusted against Excess Input Tax Credit

0 comments Wednesday, February 24, 2010
Section 15 of PVAT Act 2005 deals with the Net Tax Payable by a taxable person. Sub section 1 of Section 15 provides that the output tax under PVAT Act shall be adjusted from the Input Tax Credit for determining Net Tax Payable by a taxable Person. If any excess ITC is still left then it is to be adjusted from the CST liability under CST Act 1956 at the option of the taxable person as per section 15(2) of PVAT Act.

Section 15(3) of PVAT Act provides that the Excess ITC if any left after adjustment of output tax or CST liability u/s 15(1) and 15(2) then such ITC shall be adjusted against any outstanding tax, Penality or Interest under PVAT Act 2005 or CST Act 1956 as the case may be.
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Some Views on Penal Provisions u/s 29(8) of MVAT Act

0 comments Tuesday, February 16, 2010
t is well esteblished principle that the power to levy penality under taxation laws is incidental and ancillary to the power of collection of tax and is provided to make sure the compliance of tax deposits by the assessees. Taxation laws are welfare laws i.e they are for the welfare of the general public at large.
Recently I have come across section 29(8) of MVAT Act which provides for the leving of penality on the dealers who fails to file their return for any period within the prescribed time to the tune of Rs. 5000 and the word ‘shall’ has been used in the said section for leving penality. The section 29(8) of MVAT Act runs as under:
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Treatment of Entry Tax under PVAT Act levied in Punjab

0 comments Friday, February 12, 2010

The Government of Punjab has recently imposed Entry Tax on 12 new items under section 3A of Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No.9 of 2000). The List of which has already been provided in the articles published earlier.
The Entry Tax has been levied in the hands of every person including a taxable person registered under PVAT Act 2005. The word person has been defined under the Punjab Tax on Entry of Goods into Local Areas Act, 2000 as including:
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C Forms under CST Act can be submitted evan at the appellatte stage

2 comments Monday, February 8, 2010
Under section 8(1) of the Central Sales Tax Act 1956 an Interstate sale to a registered dealer can be made at the concessional rate of Central sales tax i.e @2% existing at this time. But for claiming concessional rate of CST the seller needs to produce a declaration in the prescribed form duly filed and signed by the registered dealer in a prescribed form obtained from a prescibed authority.

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Capital Gains under Income Tax Act 1961

0 comments Sunday, February 7, 2010
Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain.

1.Short Term Capital Gains : If any taxpayer has sold a Capital asset within 36 months and Shares or securities within 12 months of its purchase then the gain arising out of its sales after deducting therefrom the expenses of sale(Commission etc) and the cost of acquistion and improvement is treated as short term capital gain and is included in the income of the taxpayer.
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Summary on declared goods under CST Act 1956

0 comments Saturday, February 6, 2010
Declared goods are the goods of special importance on which there are certain restrictions placed under CST Act 1956 on imposition of sales tax or VAT by the states. Article286(3)(a) of the Constitution of india authorises parliament to declare some goods as of special importance and to impose restrictions and conditions in regard to power of the states in regard to levy, rates and other incidence of tax on such goods. Exercising this power the Parliament vide section 14 of the Central Sales Tax Act 1956 has declared some goods as of special importance and has placed restrictions u/s 15 of CST Act on the imposition of sales tax or VAT on such goods by the state Governments.

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Entry Tax Imposed on new goods in Punjab

0 comments Thursday, February 4, 2010
The Government of Punjab,Department of Excise & Taxation has levied Entry tax on 12 new items Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No.9 of 2000) with effect from 05-02-2010 vide notifications dated 01-02-2010. The new goods on which entry tax has been imposed along with the tax rate applicable are summarized hereinafter

Name of Goods Rate Applicable

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Surcharge Additional Tax levied under PVAT Act

The Government of Punjab has levied Surcharge/Additional Tax @10% on all the goods under Punjab VAT Act 2005 other than those seecified as declared goods under section 14 of Central sales Tax Act 1956 with effect from 05-02-2010. However this surcharge or additional tax will be levied on Liquor with effect from 01-04-2010.
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Scrutiny Assessements under Income Tax Act 1961

0 comments Wednesday, February 3, 2010

The Scrutiny Assessements under Income Tax Act 1961 are made u/s 143(3). For many years now many of the returns of the assesses are accepted as they are being filed by the assesses and intimation is sent u/s 143(1) and only fewer cases are selected for scrutiny assessement based upon some predetermined criterias. Therefore every assessee desires that his return should be accepted as it is filed u/s 143(1) and not subjected to scrutiny. Some important points relating to the assessements and scrutiny assessements are discussed herebelow:
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0 comments Thursday, January 28, 2010
The VAT rate on goods as mentioned in schedule B has been changed from 4% to 5% with effect from 29-01-2010. As per a Notification issued by the EXCISE AND TAXATION DEPARTMENT, PUNJAB NoS.O. /P.A.8/2005/S.8/2010. dated 29-01-2010 the VAT rate on schedule B goods other than declared goods under PVAT Act 2005 has been enhanced from 4% to 5%. The above notification can be found at the following link of the official website of the Excise and Taxation Department, Punjab

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2 comments Sunday, January 3, 2010
Rules of natural justice are important part of fundamental rights as enshirined in our constitution. Rules of natural justice means fair play in action i.e. to save the citizens from arbitrariness in administrative or quasi judicial action. Rules of natural justice are part of Rule of law as ensured under article 14 of our constitution. Violation of rules of natural justice result in arbitrariness and violation of fundamental rights as provided by our constitution to the citizens of India. The rules of natural justice ensures that any person is not subjected to arbitrariness and justice not only appear to have been done with him but manifestly have been done.

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