corporate and professional update oct 1, 2016

Professional Update For the Day:

DIRECT TAX:-

Gujarat HC confirms ITAT order, holds ONGC (‘assessee’) in default u/s 201(1)/(1A) for not deducting TDS on payment of ‘uniform allowance’ to its employees for AY 2010-11.

It Rejected assessee’s stand that the dress code at work place would qualify as uniform and hence exemption u/s Sec 10(14)(i) r.w. Rule 2BB with respect to uniform allowance was allowable. [TS-525-HC-2016(GUJ)]

IT: Deposit of amount of the firm in the bank a/c of partner- may be a violation of Indian Partnership Act but not of Income Tax Act – ITO, W-30 (1), New Delhi Vs Vinod Chadha and Vica-Versa (2016 (9) TMI 1069 – ITAT Delhi)

Delhi ITAT allows depreciation on ‘discarded assets’ which formed part of block, but were not used for the purpose of business during AY 2010-11. [TS-522-ITAT-2016(DEL)]

CBDT extended working hours on 30th September ,2016 for IDS Declaration vide press release dated 27/09/2016.Accordingly, the counters for receiving declarations under the Income Declaration Scheme – 2016 shall be functional till 12:00 midnight on 30th September, 2016.

ITAT Jaipur in the below citied case held that when declared income is more than the estimated income applying 8% of the works contract, no addition can be made while computing of net profit.( M/s Zuberi Engineering Co. Vs. D.C.I.T., Circle-2, Jaipur And A.C.I.T., Circle-2, Jaipur Vs.M/s Zuberi Engineering Co.)

INDIRECT TAX:-

The service tax paid on the renewal of the software by the service provider is eligible to be claimed as refund by the appellant.( Emerson Export Engineering Centre Versus Commissioner of Central Excise)-2016 (9) TMI 1134 – CESTAT MUMBAI – Service Tax

Dumpers and parts thereof are to be treated as used in or in relation to the manufacture of final products and thus qualifies as an input.( M/s. Aditya Cement Versus CCE, Jaipur-II)- 2016 (9) TMI 1127 – CESTAT NEW DELHI – Central Excise

CBEC has issued a notification  regarding Non-levy of service tax on the services by way of advancement of Yoga vide notification No. 42/2016 dated 26/09/2016.

Central Govt. directs that service tax u/s 66B of Finance Act on the service by way of ‘advancement of Yoga’ provided by entities registered u/s 12AA of Income Tax from July 1, 2012 to October 20, 2015 shall not be required to be paid .

Since the services of renovation and modernization were provided by the service provider in the form of works contract which is excluded from the definition of input service Cenvat credit was rightly denied.(JDSU India Pvt. Ltd. Versus Commissioner of Service Tax, Pune)  2016 (9) TMI 1059 – CESTAT MUMBAI – Service Tax

 

GST UPDATES:-

CBEC has issued a presentation on IGST model

CBEC has issued Draft Rules and Formats for return and refund

FAQ as Issued by CBEC – Registration

Q 1. What is advantage of taking registration in GST?

Ans. Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

Legally recognized as supplier of goods or services.

Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.

Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.

Q 2. Can a person without GST registration claim ITC and collect tax?

Ans. No. A person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him.

Q 3. What will be the effective date of registration?

Ans. Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be date of his liability for registration.

Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration.

In case of suomoto registration, i.e. taking registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.

Q 4. Who are the persons liable to take a Registration under the Model GST Law?

Ans. Any supplier who carries on any business at any place in India and whose aggregate turnover exceeds threshold limit as prescribed in a year is liable to get himself registered. However, certain categories of persons mentioned in Schedule III of MGL are liable to be registered irrespective of this threshold.

An agriculturist shall not be considered as a taxable person and shall not be liable to take registration. (As per section 9 (1))

Q 6. Which are the cases in which registration is compulsory?

Ans. As per paragraph 5 in Schedule III of MGL, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit:

1. a)  persons making any inter-State taxable supply;
2. b)  casual taxable persons;
3. c)  persons who are required to pay tax under reverse charge;
4. d)  non-resident taxable persons;
5. e)  persons who are required to deduct tax under section 37;
6. f)  persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;
7. g)  input service distributor;
8. h)  persons who supply goods and/or services, other than branded services, through electronic commerce operator;
9. i)  every electronic commerce operator;
10. j)  an aggregator who supplies services under his brand name or his trade name; and
11. k)  such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

FAQ on Company Law:

Query: Loan from directors are exempted from the definition of deposits but if in case the directors and shareholders are same, what will be the position when company has to take funds from them. Will they be included in the purview of Deposits?

Answer: Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014 exempts any amount received from a person who, at the time of the receipt of the amount, was a director of the company. In case same person are directors and shareholders of a Company, in that case also, any amount of loan taken from such persons shall not be included in the purview of Deposits.

Query: Can you please tell the procedure to strike off LLP and which form is required to be filed for striking off the name of LLP?

Answer: You shall be required to file eForm 24 along with Copy of detailed application, Copy of authority to make the application, Copy of consent of all partners, Copy of consent of all creditors, Copy of the undertaking/ indemnity bond for striking off name, Copy of statement of assets and liabilities duly certified as true and correct by auditor/Chartered Accountant in practice and Copy of acknowledgement of latest Income tax.

Key Dates:

Excise payment for Non SSI for the month of September by G.A.R.- 7 challan(6th if paid electronically)-05/10/2016

Service tax payment for company for the month of September by G.A.R.- 7 challan(6th if paid electronically)-05/10/2016

Service tax payment for Individuals/Proprietory/ Partnership Firms for the quarter ended by G.A.R.- 7 challan(6th if paid electronically)-05/10/2016

Payment of TDS/TCS challan No. 281-07/10/2016

In three words I can sum up everything I’ve learned about life: it goes on.  -Robert Frost

” If you genuinely want something, don’t wait for it–teach yourself to be impatient .”

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