Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Thursday, April 30, 2015

PROCEDURE FOR ONLINE SURRENDER AND CANCELLATION OF SERVICE TAX NUMBER

Guidelines were issued by the department for surrender and cancellation of service tax registration number vide Trade Notice No.40 Dated 17/02/2014 and later on the facility of on line surrender of Service Tax number is also provided on ACES.GOV.IN under REG option after logging in with User ID and Password of the registered Service Tax Assessee later on written as STA in this article.

Such cancellation/surrender may be because of the any of the following reasons:-
a)      STA’s turnover falls below the threshold limit
b)      Change in constitution of the STA like- Individual to partnership
c)       Death of the proprietor
d)      STA closing down the taxable service business.
e)      STA has taken centralized number, so surrendering the multiple number taken separately for all branches.
f)       STA has shifted and taken a new number in new jurisdiction instead of transferring the Service Tax number.
 STA/ Assessee can surrender the registration number online using www.aces.gov.in . After log in with User ID and Password under the option REG as soon as STA goes to surrender of Service Tax number and selects the service tax number already prefilled for surrender the form for surrendering service tax registration ie. ST-2  is displayed  and the STA has to furnish only the reason for surrender or cancellation of service tax registration and submit online.
After submitting ST-2, a printout of ST-2 along with a covering letter as well as Original ST-2 received earlier is to be submitted with Superintendent. Superintendent may check the books of the assessee to ascertain that there are no dues pending from the assessee and all service tax due have been paid. Once both the superintendent and the AC/DC approve the cancellation of service tax registration a auto generated mail is sent to the assessee and after that the assessee cannot login to the account on www.aces.gov.in
Contributed by Pooja Aggarwal

Wednesday, April 29, 2015

Full & Partial Reverse Charge at a Glance for Fin Year 15-16

Reverse Charge and Partial Reverse Charge in Service Tax for Fin. Year 15-16 amended {Notification No.7/2015-Service Tax, Dated- 1st March, 2015}
The Reverse and Partial Reverse Mechanism of Service tax is amended and here under given at a glance how Full and Partial Reverse Charge Mechanism is working wef 01.04.2015. The extent of service tax payable by the Service provider and any other person other than the service provider (Service Recipient or any other person) liable for paying service tax for the taxable services received can be divided into two categories:
A. 50% to be paid by the person providing service and 50% by any person liable for paying service tax other than the service provider:-
a) Services provided or agreed to be provided by way of renting of a passenger vehicle on non abated value to any person not engaged in the similar business by individual, HUF, firm or AOP to Body Corporate. (Revised w.e.f 01.10.2014)
b) Services provided or agreed to be provided in service portion in execution of works contract by individual, HUF, firm or AOP to Body Corporate.

B. 100% to be paid by any person liable for paying service tax other than the service provider.

100 % service tax under reverse charge mechanism is to be paid by any person liable to pay tax other than the service provider.
1. Services by an insurance agent to any person in insurance business.
1A. Services by a recovery agent to a banking company or Non banking financial Company.(Effective from 01.04.2015)
1B.  Services by a mutual fund agent to a mutual fund or asset management company. (Effective from 01.04.2015)
1C. Services by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent.
2. By a goods transport agency for transportation of goods by road to Excise Registered Dealer.
3. By way of sponsorship to anybody corporate or partnership firm.
4. By an arbitral tribunal to any Business entity.
5. By individual advocate or a firm of advocates by way of legal services to any Business entity.
5A. By a director of a company or a body corporate to the said company or the body corporate.
6.By Govt or local authority excluding,- (1) renting of immovable property, and (2) services specifically  excluded  in section 66D to any Business Entity.
7(a). By way of renting of a  passenger  vehicle on abated value to any person who is not engaged in the similar business by individual, HUF, firm or AOP to Body Corporate.
 (b) 50%-50% sharing between Service provider and Service Recipient of Non Abated ( Person liable for service tax Other than Service provider  as described in A (a) above 
8. 50%-50% sharing between Service provider and Service Recipient Works Contract ( Person liable for service tax Other than Service provider  as described in A (b) above
9. By way of supply of manpower for any purpose or security services by individual, HUF, firm or AOP to Body Corporate.
10. Taxable services by any person who is located in a non-taxable territory and received by any person located in the taxable territory.
11. By a person involving an aggregator in any manner to any Business Entity. (Effective from 01.03.2015)


Declaration of Assets and Liabilities by public servants further extended the date upto 15th October 2015

25th April 2015 Ministry Of Personnel, Public Grievances And Pensions Department Of Personnel And Training, New Delhi has further extended the date upto 15th October 2015.
Under Lokpal and Lokayuktas Act 2013 the public servants are required to file property returns under the existing service rules. Earlier the date was extended from December,2014 to 30th April 2015 but now again the last date for filing of revised returns by public servants under the rules has now been further extended from 30th April, 2015 to 15th October, 2015. All Ministries/Departments and cadre authorities are required to ensure the compliance with the revised Rules by all officers and staff in the respective Ministry/Department/PSUs under their control, within the revised time-limit mentioned thereon.
Formal amendments to the Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the Limits for Exemption of Assets in Filing Returns) Rules, 2014 and to the Lokpal & Lokayuktas (Removal of Difficulties) Order, 2014 are being notified separately.


Saturday, April 18, 2015

Reporting Requirements in New ITR Forms for AY 2015-16

[Notification No. 41/2015 Dated 15.04.2015]


Details of Bank Accounts held in India at any time during the Previous Year.

Details of Foreign Assets and Income from any source outside India at any time during the Previous Year:

  • Foreign Bank Accounts.
  • Financial Interest in any Entity.
  • Immovable Property.
  • Any other Capital Asset.
  • Account in which you have signing authority.
  • Trusts, created under the laws of a country outside India, in which you are a trustee, beneficiary  or settler.
  • Any other income derived from any source outside India.
  • Foreign travel and expenses incurred during the year.

The new ITR forms require assessee to provide his Aadhaar Number (if assessee has obtained the same).

New ITR forms requires assessee to provide following figures for Agricultural Income :
Gross agricultural receipts, Expenditure incurred on agriculture, Unabsorbed agricultural loss of previous eight assessment years, Net agricultural income for the year.  

An HUF is required to report date of its formation.

Assessee would be required to enter receipt No. and date of filing of original return where modified return is furnished u/s 92CD.(Section 92CD stated that if any person has entered into APA and return of income u/s 139 is already filed before the agreement is made than modified return should be filed according to APA).

Change is made in ITR of the amendment that LTCG arising from transfer of unit of business trust on which STT is paid shall be exempt from Tax and STCG on which STT is paid shall be chargeable at 15%. 

Change is made in ITR that the concessional tax rate of 10% is only for long term capital gain arising from transfer  of listed securities (other than unit) and zero coupon bonds.   

The Securities held by FIIs shall be deemed as Capital Gains.

Acknowledgment of details relating to exempt Income in ITR-V. 

The assessee is required to fill details of unutilized capital gain on asset transferred during the current and earlier previous years which was deposited in Capital Gains Account Scheme within due date for that year along with details of amount utilized.  

Non-residents are required to fill the details of STCG and LTCG included in its Capital Gain shown in Income Tax Return but not chargeable to tax in India as per DTAA and also to mention the Country Name, Article of DTAA ,and also require to mention whether he has obtained Tax Residency Certificate or not.

From A.Y. 15-16,presumptive income of goods carriage is computed at a uniform rate of Rs 7500 so accordingly changes are made in ITR forms.

If Return filed u/s 119(2)(b), the assessee shall tick the check-box introduced  in new ITR forms. Return shall be treated as valid after the application is submitted by CBDT. 
In Section 119(2)(b)CBDT extends  the date of filing the return if there are genuine circumstances.


7th  Amendment in Rule-12 with effect from 01st day of April,2015 i.e for Asst Year 15-16

Signing authority in any account located outside India.
or
Income from any source outside India.

How can the Return be Furnished?
1. Mandatory E-Filing with Digital Signature
2. Mandatory E-Filing with or without Digital Signature
3. Paper Filing

E-Filing with Digital Signature

1. Individual or HUF, where accounts not required to be audited  u/s 44AB of the Act and the return is furnished in ITR-3 and ITR-4.

2. The person being resident, other than not ordinary resident:-
Has Assets (including financial interest in any entity) located outside India.
He is signing authority in any account located outside India.
He has income from any source outside India.
Any relief claimed for tax paid outside India u/s 90 or 90A or TDS u/s 91
A person other than of the age of 80 years or more furnishing the return in form ITR-1 or ITR-2
- Having Income over  five lacs in previous Year.
- Any refund is claimed.

3. Firm or LLP, not subject to Audit u/s 44AB and filing Form ITR-5

ITR 1 & 2 in Paper Filing

Paper Filing is allowed only
1. In case of a person above the age of 80 years.
2. In case Income is less than 5 Lacs and no refund is claimed.


Contributed by Ms. Tanya Gagneja (Article Assistant, Sandeep Ahuja & Co.)

Thursday, April 16, 2015

Comparison of CARO 2003 with CARO 2015

The Central Government has issued the Companies (Auditor’s Report) Order, 2015 (hereinafter referred to as “CARO, 2015”) dated 10th April, 2015 specifying only 12 matter that are required to be specified in the Auditor’s Report for the financial year ending 31st March, 2015.

A compative analysis of CARO, 2003 and CARO, 2015 is summarized below.





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Income Tax Appeal filing, Forms and Challan

An "Appeal" is a proceeding taken to rectify an erroneous decision of a court by submitting the question to a higher court, or court of appeal. An Appeal under the Income Tax laws can be filed before the Commissioner (Appeals), the Income Tax Appellate Tribunal, the High Court and the Supreme Court when a tax payer is adversely affected by Orders passed by various Income Tax Authorities.


Forms for Filing of Appeals

An Appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] is made thrugh a Memorandum of Appeal in Form No. 35. An Appeal before the I.T.A.T has to be be filed in Form No. 36. Further, a Cross Objection is made in Form 36A.

The Form of Appeal can be signed by the individual tax payer himself or by a person duly authorized by him holding a valid Power of Attorney. In case of an HUF, it is to be signed by the Karta and in case of a company, by the Managing Director. An Authorised Partner may sign it in the case of a firm.

Documents Accompanying the Memorandum of Appeal

Before the CIT(A): Duplicate copies of:

  1. Statement of Facts
  2. Ground of Appeal
  3. Notice of Demand (including the Notice in Original)
  4. Copy of Order against which the Appeal is preferred.

Before the ITAT: Triplicate copies of:

  1. Statement of Facts
  2. Grounds of Appeal
  3. Order of CIT (A)
  4. Copy of Form No. 35 filed before the CIT(A) (with complete set of documents).


Presentation of Appeal

The Appeal must be presented: 
  • in person or by an agent; or
  • sent by Registered Post addressed to the Office of the Commissioner (Appeals).
  • If sent by post, it shall be deemed to have been presented on the day on which it is received by the Office of the Commissioner (Appeals) or the Tribunal.

Time for Filing of Appeal

Appeal to the CIT(A) should be filed within 30 days from the date of Notice of Demand relating to Assessment or Penalty Order, or from the date on which the Order was communicated to the assessee. An Appeal to the Tribunal should be filed within 60 days from the date on which the Order is communicated.

The Appeal may be admitted by the CIT(A)/ITAT even after the expiry of 30/60 days, if the Appellate Authority is satisfied that there was sufficient cause for not presenting the Appeal within the specified period. Application for condonation of delay and reasons for delay, along with necessary evidences, should be filed with Form No. 35/36 at the time of filing of appeal. 

Payment of Admitted Tax

Section 249(4) of the Income Tax Act, 1961 provides that no appeal shall be entertained by the CIT(A) unless, at the time of filing of the appeal, the assessee has paid: 
(a) the taxes due on the returned income, or
(b) where no return is filed, an amount equal to the amount of advance tax which was payable by him. 

The CIT (Appeals) is empowered, for any good and sufficient reason, to exempt the assessee from the operation of this provision in case of (b).

An Appeal is not maintainable in the case where tax is not deducted at source from payment made to non-resident and is not paid to the Govt. prior to the filing of appeal.

An Appeal Before the High Court

One can file an Appeal before the High Court when the case involves a substantial question of law. The Appeal can be filed by the tax payer or by the Chief Commissioner/Commissioner of Income Tax within 120 days of receipt of the Order.

If the High Court is satisfied that a substantial question is involved, it would formulate that question. An Appeal filed before the High Court is heard by a bench of not less than two Judges and the decision is by majority.

When Can an Appeal be Filed?

Before CIT(A)                                              
Before ITAT
·         Order against tax payer where the tax payer denies liability to be assessed under Income Tax Act;
·         Intimation issued under Section 143(1) making adjustments to the returned income
·         Scrutiny Assessment Order u/s 143(3) or an ex-parte Assessment Order u/s 144
·         Re-assessment Order passed after reopening the assessment u/s 147/150
·         Search Assessment Order u/s 153A or 158BC
·         Rectification Order u/s 154/155
·         Order u/s 171 recording finding about partition of Hindu Undivided Family(HUF)
·         Order u/s 115VP(3) refusing approval to opt for tonnage-tax
·         Order determining refund u/s 237
·         Order u/s 201(1)/206C(6A) deeming person responsible for deduction of tax at source as assessee in default on failure to deduct/ collect tax at source
·         Order imposing penalty u/s 221/271 /271A/ 271AAA/ 271F/271FB/272A/272AA/272BB/275(1A)/158BFA(2)/271B/ 271BB/271C/271CA/271D/271E
·   Order by Commissioner(Appeals) u/s 250/154/271/ 271A/272A
·    Order by Commissioner u/s 12AA on registration application by a charitable or religious trust
·   Order by Commissioner u/s 263 revising Assessing Officer’s order considered prejudicial to the interest of revenue;
·   Order by Commissioner u/s 154 to rectify an order u/s 263
·    Penalty order passed by Commissioners u/s 271 or section 272A;
·   Penalty order passed by Chief Commissioner u/s 272A;
·   Order passed by Assessing Officer u/s 143(3)/147 in pursuance of direction of Dispute;

Schedule of Appeal Fees

Particulars
Fees for filing appeal before CIT (A)
Fees for filing appeal before I.T.A.T
Assessed Total Income is Rs. 1 lakh or less
Rs. 250
Rs. 500
Assessed Total Income is more than Rs. 1 lakh but not more than Rs. 2 lakhs
Rs. 500
Rs. 1,500
Assessed Total Income is more than Rs. 2 lakhs
Rs. 1000
1% of Assessed Income subject to a maximum of Rs. 10,000
Where subject matter is not covered under any of above
Rs. 250
Rs. 500
Under Wealth Tax
Rs. 500
Miscellaneous application u/s 254(2)
Rs. 50
Stay Petition
Rs. 500

How to Fill Income Tax Appeal Challan?

An Appeal can be filed only after Appeal Fee is paid. So, one should take care of the following points while making the payment of appeal fee and filling the proper challan as that fee can’t be adjusted against tax payment:

  1. The challan form to be used is Challan No. 280.
  2. If the Appeal is for more than one year, Appeal Fees has to be paid for each year through a separate challan. 
  3. Write Correct Permanent Account Number (PAN)  
  4. For depositing the Appeal Fees in case of Non Corporate and Corporate Assessee, Major Head 020 or 021 is to be selected.
  5. Under ‘Type of Payment’, Minor Head Self Assessment Tax (300) has to be selected.
  6. Under ‘Details of Payments’, the amount has to be entered in the "Others" column. 
  7. Do not use Challan 280 for depositing TDS.

Contributed by Ms. Tanya Gagneja (Article Assistant, Sandeep Ahuja & Co.)

Thursday, April 9, 2015

Clarifications on Service Tax Applicability in 2015

New Service Tax rates have been proposed in the Finance Bill, 2015. These rates shall come into effect only after the Finance Bill becomes the Finance Act 2015 and the effective date is notified. It is, therefore, to be noted that there is no change in the rate of Service Tax w.e.f. 1st April, 2015.


Rate Applicable in Case of Transaction falling in the Transitional Phase 

However, there may be some confusion about the applicable rates in case the date of delivery of service, date of invoice and date of payment happen to occur at a time when some of these dates may fall before the effective date of change of rate and some others may fall after. The manner of determining the rate applicable on such transactions is as under.

In the following examples, "cut-off date" means the date from which the Service Tax rate will be notified as changed.

1. In case the service is provided before the cut-off date.

Situation
Applicable Rate
Both Date of Invoice and Date of Payment are after the cut-off date.
New Rate (14%)
Invoice issued before cut-off date and payment received after cut-off date.
Old Rate (12.36%)
Invoice issued after cut-off date but payment received before cut-off date.
Old Rate (12.36%)

2. In case the service is provided after the cut-off date.

Situation
Applicable Rate
Both Date of Invoice and Date of payment are before cut-off date.
Old Rate (12.36%)
Date of Invoice is before cut-off date but Date of Payment is after cut-off date.
New Rate (14%)
Date of Invoice is after cut-off date but payment received before cut-off date.
New Rate (14%)

Exemptions Withdrawn w.e.f. 1st April 2015

Services provided to:

1. Govt, local authority or Govt authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of:
  • a civil structure meant for use other than for commerce, industry.
  • a structure meant predominantly for use as an educational, clinical, or an art or cultural 
  • a residential complex predominantly meant for self-use or the use of their employees.

2. Services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port.

3. Services provided by a performing artist in folk or classical art form of music, dance or theater,  where amount charged is more than Rs. 1,00,000 for a performance.

4. Transportation of food stuff by rail, or vessels or road will be limited to food grains including rice and pulses, flour, milk and salt.

5. Services provided by a mutual fund agent or distributor to a mutual fund or assets management company.

6. Services of selling or marketing agent of lottery ticket to a distributor.

7. Telecommunication services by
  • Departmentally run public telephone;
  • Guaranteed public telephone operating only local calls;
  • Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued.

New Exemptions w.e.f. 1st April, 2015

  1. All ambulance services.  
  2. Life insurance service provided by way of Varishtha Pension Bima Yojna 
  3. Goods transport agency service provided for transport of export goods by road from the place of removal to a land customs station.  
  4. Service provided by or for
  • a Common Effluent Treatment Plant operator for treatment of effluent. 
  • pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables.  
  • admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve.  
  • exhibition of movie by the exhibitor (theatre owner) to the distributor or an association of persons consisting of such exhibitor as one of its members.  

Abatements


Up to 31.03.2015
W.e.f. 01.04.2015
Services of goods transport agency in relation to transport of goods
Taxable Percentage
25%
30%
Effective Rate
3.09%
3.708%

Services provided in relation to Chit Funds
Taxable Percentage
70%
100%
Effective Rate
8.625%
12.36%

Services in relation to transport of goods in a vessel
Taxable Percentage
40%
30%
Effective Rate
4.944%
3.708%

Transport of Passengers by Air other than in Economy Class
Taxable Percentage
40%
60%
Effective Rate
4.944%
7.416%

Contributed by
Ms. Tanya Gagneja
Article Assistant
Sandeep Ahuja & Co.