INCOME TAX

Company intending incorporation can now apply for PAN/TAN in Form INC-7 prescribed under Companies Act 2013

[Notification No. 38/2015][F.No.142/15/2013-TPL]

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. in rule 114,

(a) in sub-rule (1), the following proviso shall be inserted, namely:-

“Provided that in case of an applicant, being a company which has not been registered under the Companies Act, 2013 (18 of 2013), the application for allotment of a Permanent Account Number may be made in Form No. INC-7 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.”;

(b) in sub-rule (4),-

(i) in the opening portion, after the words, brackets and figure “referred to in sub rule (1)” the brackets, words and figure “[other than that referred to in the proviso to sub-rule (1)]” shall be inserted;

(ii) in the TABLE, in column (4),- (I) against Sl. No. (1), for item (C) the following item shall be substituted, namely:- “

Proof of date of birth— copy of the following documents if they bear the name, date, month and year of birth of the applicant, namely:-—

against Sl. No. 3, for the words “Copy of Certificate of Registration issued by the Registrar of Companies.”, the following shall be substituted, namely:-

“(a) Copy of Certificate of Registration issued by the Registrar of Companies; or

 (b) corporate identity number allotted by the Registrar under section 7 of the Companies Act, 2013 (18 of 2013).”

Application for allotment of a tax deduction and collection account number

(2) in rule 114A, in sub-rule (1), the following proviso shall be inserted, namely:-

“Provided that in case of an applicant, being a company which has not been registered under the Companies Act, 2013 (18 of 2013), the application for allotment of a tax deduction and collection account number may be made in Form No. INC-7 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.”

SERVICE TAX

Service tax continues to be levied at 12.36% until date of enforcement of new rate would be notified

CircularNo.183/02/2015-ST F. No. B-1/1/2015-TRU/Dated 10th April, 201

Clarification on rate of service tax–

Doubts have been expressed in various forums regarding the proposed increase in the rate of service tax from 12.36% (including education cesses) to 14% on the value of taxable service.

Service Tax Rate:

The rate of Service Tax is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate will be from the existing rate of 12.36% (inclusive of cesses) to 14%, subsuming the cesses.

In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 that sections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.”

The paragraph reproduced above is self-explanatory and it is clear that the new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015. The date will be notified in due course after the enactment

Abatement on value of services

Similarly, certain doubts have been raised with regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006.

In the Union Budget, 2015, no change has been made in these rules; therefore, any confusion is unwarranted. Further, as explained above, the rate of service tax on the specified portion of the amount charged for such supply which is 40% continues to be 12.36% (including cesses) at present i.e. 4.944 %. The rate of Service tax, as discussed above, will continue unchanged till a date which will be notified in due course.

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