Lump sum scheme for payment of service tax in works contract introduced0 comments Tuesday, March 20, 2012In works contract service lump sum scheme for payment of service tax in a works contract has been introduced by amendment in Rule 2A of the Service Tax (Determination of Value) Rules, 2006 vide Notification No. 11/2012 - Service Tax dated 17-03-2012. In works contract service there were two types of schemes which were earlier available i.e payment of service tax on actual service involved and the composite scheme. In the composite scheme service tax @ 4.8% is required to be paid on the total value of the whole contract including material part, while in the other case service tax is required to be paid on the actual value of labour and services incorporated in works contract(which can be possible where proper books of accounts are being maintained). Rate of tax in composite scheme under works contract service enhanced to 4.8%0 commentsRate of tax in composite scheme in Works contract service has been changed w.e.f 01-04-2012. The earlier rate of tax in the composite scheme was 4% which now has been enhanced to 4.8%.
Rule 3 of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, has been suitably amended whereby for the words ―four per cent, the figures and words ―4.8 per cent has been substituted. Reverse Charge Mechanism in service tax-more clarifications in works contract service required0 comments In the Budget-2012-13 under the new Reverse Charge Mechanism in certain services the receipient of the service has been made liable to pay tax instead of service provider. In three of services namely hiring of means of transport, construction and man power supply both service receiver and service providers have been made liable to tax in the prescribed percentages. Section 68(2) of the Finance Act, 1994 has been suitably amended in the budget of 2012-13 whereby a proviso has been added to the said section authorising Central Government to notify the service and extent of service tax payable by such person and extent of service tax payable by service receiver. Proposed income tax amendments in Budget 2012-13-Part-20 comments Monday, March 19, 2012Consideration in excess of F.M.V of shares to be treated as income from other source if consideration received is in excess of Face Value of shares: It is proposed to insert a new clause (viib) in the aforesaid sub-section so as to provide that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income-tax under the head “Income from other sources”. However, the said new clause shall not apply where the consideration for issue of shares is received by a venture capital undertaking from a venture capital company or a venture capital fund. Proposed amendments in Budget 2012-13 in Taxation-Part 10 comments Saturday, March 17, 2012RATES OF INCOME-TAX after Budget 2012 presented on 16.03.2012 A. Normal Rates of tax:
Fair Market Value assessed by DVO to be adopted even if its lower than stamp duty valuation0 comments Wednesday, March 14, 2012Kolkata ITAT has held in the following case that Where fair market value assessed by DVO is lower than stamp duty valuation, value adopted by DVO has to be adopted for computing LTCG. In this case during the relevant assessment year, the assessee sold certain property and disclosed sale consideration in the sale deed for her half share at Rs. 20 lakhs and computed long-term capital gains at nil by taking indexed cost of acquisition at Rs. 30.81 lakhs. The Assessing Officer noticed from the sale deed that the stamp valuation of the property was at Rs. 1.3 crores. The Assessing Officer adopted valuation by Stamp Duty Authorities and computed the long-term capital gain at Rs. 50.70 lakhs. On appeal, the Commissioner (Appeals) referred the matter to the DVO for ascertaining the fair market value of the said property. The Commissioner (Appeals) directed the Assessing Officer to adopt the value as per DVO's report for the purpose of computing the capital gains. The DVO valued the property at Rs. 30.87 lakhs. Decision of any High Court is binding on all the subordinate authorities and Tribunals through out India untill contrary view is taken by other High Court0 comments Thursday, March 8, 2012I have found an old judgement but very usefull one namely CIT vs. Godavari Saraf which I want to share for the readers of the blog. It has been held in this judgment by Bombay High Court that until contrary decision is given by any other competent High Court, which is binding on a Tribunal in the relevant State, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land. Plea of alternative remedy not acceptable against writ petition if there is jurisdictional error2 commentsIt is well known that when an alternative remedy is available to a person then the writ petition in the High Court may not be acceptable. Punjab & Haryana High Court in the following case has held that plea of alternative remedy cannot be invoked where the question involved is of lack of jurisdiction on admitted facts. It means that where an order of an authority suffers from error of lack of jurisdiction on admitted facts then in such case writ petition challenging such order can be filed and such writ should be accepted irrespective of the fact that the petitioner had the alternative remedy of filing an appeal against such order and he has not exhausted it before filing writ petition. Capital gains exemption u/s 54EC of Income tax Act, 19612 comments Sunday, March 4, 2012Section 54EC of Income Tax Act, 1961 provides an option to save tax on capital gain arising from transfer of long term capital asset subject to fulfillment of certain conditions. Provisions of section 54EC are being discussed hereinbelow for the benefit of all concerneds. Circumstances under which deduction u/s 54EC is available: The deduction u/s 54EC will be available subject to the following conditions: No denial of exemption u/s 54F merely because sale deed not registered or construction of house not completed within statutory period0 comments Friday, March 2, 2012High court of Karnataka in a very important following case has held that Condition precedent for claiming benefit under section 54F is that capital gains realized from sale of capital asset has been parted with by assessee and invested either in purchasing a residential house or in constructing a residential house. If after making entire payment, merely because a registered sale deed has not been executed and registered in favour of assessee before period stipulated, assessee cannot be denied benefit under section 54F. Income from towers/antennas on roof, or from display of signage/parking space rent not income from house property but from other sources0 commentsDelhi ITAT has held in the following case that Income from installation of towers/antennas on roof top/from display of signage/parking space rent is not income from house property but income from other sources. In this case the assessee claimed income from parking rent, terrace rent, signage rent and licence fee as income under the head house property and consequently claimed deduction u/s 24(1). The AO took the view that such incomes are income from Business and not from house property. However the CIT(A) considered such incomes as income from other sources. On appeal to Tribunal the order of CIT(A) is upheld. Income Tax Scrutiny criterias for F.Y. 2011-12/A.Y. 2012-131 comments Thursday, March 1, 20121. Where value of international transaction as defined u/s. 92B exceeds Rs.15 Crore. 2. Cases where there was addition of Rs.10 Lacs or more in earlier assessment year and question of law or fact is confirmed in appeal or pending before appellate authority. 3. Cases in which addition of Rs.10 Crore or more was made in earlier assessment year on the issue of transfer pricing. No Scrutiny for senior citizens and small tax payers having income upto 10 lakhs0 commentsNo.402/92/2006-MC (07 of 2011) Government of India / Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi dated the 14th March 2011 PRESS RELEASE Streamlining procedure for scrutiny of income-tax returns Adjustment of service tax paid under wrong accounting code is to be allowed0 comments Thursday, February 23, 2012Ahemdabad CESTAT has held in the following case that adjustment of service tax paid under wrong accounting code is to be allowed. In this case assessee was manufacturing a 'diesel generating set'. Besides that it was also providing maintenance of diesel generating sets to its clients. Before taking service tax registration under 'management, maintenance or repair' service, it paid service tax under wrong service tax code relating to 'erection, commissioning or installation' service. PVAT-Three cheques required to be deposited alongwith new VAT-2 form while making payment of VAT by cheque0 commentsRecently a new single challan form namely VAT-2 has been introduced for payment of VAT in Punjab. This form has replaced the earlier three challan forms i.e VAT-2, VAT-2A and VAT-2B. Now for depositing VAT, Punjab Municipal Fund(PMF) and Punjab Municipal Infrastructure Development Fund(PMIDF) only one challan form i.e VAT-2 is required to be filled up.
No Service Tax on Toll collected for user of roads-Clarification of CBEC0 commentsCBEC has clarified in the following circular that Toll collected by SPV for users of roads under an agreement between NHAI or State Authority and concessionaire under PPP or BOT/Operate-transfer model is exempt from service tax. It has been clarified that TOLL is a subject of State List under Constitution hence is not liable to service tax. However if Toll is collected by an independent entity engaged by SPV and for which purpose any commission/charges is paid to such agency by SPV then such commission/charges will be liable to service tax under Business Auxiliary Service. Foreign Lawyers cannot practice in India-Madras High Court0 commentsMadras High Court has held in A.K.Balaji Vs. GOI has held that foreign Lawyers cannot practice law in India but are entitled to visit India for short periods to advice on foreign law & conduct international commercial arbitration Calculation of cost of indexation in case of gifted or inherited capital asset0 comments Tuesday, February 21, 2012Bombay High Court has held in following case that benefit of indexation shall be available from the year when previous owner acquired a capital asset in case such capital asset is acquired under a gift or will. In this case assessee acquired the capital asset under a gift. The donor acquired the capital asset on 29-01-1993 whereas the capital asset was gifted to the assessee on 01-02-2003 and the assessee sold such capital asset on 30-06-2003. Clarification of CBEC-Commitment charges recovered by banks liable to service tax0 comments Sunday, February 19, 2012CBEC has issued following clarification relating to taxability of commitment charges recovered by banks for keeping available the undistributed balance of a loan committment, under the Banking and Financial service. It has been clarified that commitment charges charged by banks is liable to service tax as these are not in the form of interest but they are directly linked to the provision of service provided by the banks under the Banking and Financial Service covered by section 65(105)(zm) of Finance Act, 1994. CBDT exempts salaried persons upto 5 lakh income from return filing in A.Y 2012-130 commentsNOTIFICATION NO 9/2012, Dated: February 17, 2012 In exercise of the power conferred by sub-section (IC) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2012-13, namely:-
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