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Showing posts from August, 2012

FAQ on Reverse Charge

Reverse charge for Directors & security services - FAQ VIDEnotifications45&46/2012ST Dated 07.08.2012, services provided by non employee directors to the Companies and security agencies have also been subjected to the levy of service tax. In this connection, the following questions are often raised. 1. Is service tax applicable for all directors of a Company? Whole time directors and Managing Directors of the companies are considered as employees of the company in which they are directors. The definition of service itself excludes services provided by the employees to employers. Hence, there is no service tax in respect of such employee directors. Service tax will apply only in case of non employee directors. 2. Does reverse charge apply for all service recipients? In respect of services provided by directors, obviously, the service recipient should be a company established under the Companies Act, like Private Limited Company, Public Limited Company, Government Compa…

Service Tax on Vocational Education

SECTION 66D OF THE FINANCE ACT, 1994 - NEGATIVE LIST OF SERVICES - SERVICE TAX ON VOCATIONAL EDUCATION/TRAINING COURSE CIRCULAR NO. 164/15/2012-ST, DATED 28-8-2012 1. Clarification has been sought in respect of levy of service tax on certain vocational education/training/ skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body. 2. The issue has been examined. When a VEC is offered by an institution of the Government or a local authority, question of service tax does not arise. In terms of section 66D (a), only specified services provided by the Government are liable to tax and VEC is excluded from the service tax. 3. When the VEC is offered by an institution, as an independent entity in the form of society or any other similar body, service tax treatment is determinable by the application of either sub-…

ST Compliance by CA

Service Tax Compliance by Chartered Accountants having turnover exceeding Rs. 50 Lakh
Till 31.03.2011, point of taxation in case of eight specified services including Chartered Accountants (CAs) was determined on the basis of receipt of payment.  However, w.e.f. 01.04.2011, this benefit has been extended to all services albeit, in a slightly modified form.  Now all individuals, partnership firms (including limited liability partnership firms) having a turnover not exceeding Rs. 50 lakh in the previous year can pay service tax on receipt basis in the current financial year.

Relevant provision – Rule 6(1) of the Service Tax Rules, 1994

"(1)     The service tax shall be paid to the credit of the Central Government, -
(i)         by the 6th day of the month, if the duty is deposited electronically through internet banking; and

(ii)        by the 5th day of the month, in any other case,

immediately following the calendar month in which the [Service is deemed to be pro…

MCA ON Borrowing costs on foreign currency loans need not be expensed in P&L

Accounting norm for forex losses relaxed again

Borrowing costs on foreign currency loans need not be expensed in P&L
The Corporate Affairs Ministry has yet again come to the rescue of India Inc on the issue of accounting of exchange differences on long-term foreign currency borrowings. It has now allowed companies to capitalise exchange losses, if any, to the extent such losses represent the difference in interest rates on local and overseas borrowing. This accounting flexibility will help bolster profits for Indian corporates that have borrowed in foreign currency, say accounting experts. Until now, exchange losses on foreign currency borrowings to the extent they are regarded as adjustment to interest cost had to be expensed in the profit and loss account. This is provided in an accounting standard AS-16 (Borrowing Costs) issued by the Union Government, based on the recommendation of National Advisory Committee on Accounting Standards (NACAS). Through a new circular, the Corpor…

Arm's Lengh Price Notified-2012-13 AY

SECTION 92 OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM'S LENGTH PRICE - NOTIFIED PERCENTAGE UNDER SECOND PROVISO TO SECTION 92C(2) NOTIFICATION NO. 31/2012 [F.NO. 500/185/2011-FTD I], DATED 17-8-2012 In exercise of the powers conferred by the second proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that where the variation between the arm's length price determined under section 92C and the price at which the international transaction has actually been undertaken does not exceed five per cent of the latter, the price at which the international transaction has actually been undertaken shall be deemed to be the arm's length price for assessment year 2012-13.

MCA Clarification on Service Tax

Vide Notifications 45/2012 and 46/2012 dated 07/08/2012, Service Tax on reverse charge mechanism was imposed on services rendered by directors to companies (i.e. the recepient company has to pay the entire the Service Tax due on remuneration paid / payable to its directors).
Doubts arose among corporates and tax consultants as to whether remunerations to WHOLE TIME DIRECTORS(I.e. Managing Director / Executive Directors)are covered under these notifications
TheGeneral Circular No. 23/2012 dated 09/08/2012issued byMinistry of Corporate Affairsbrings some respite.
Though the above general circular is issued in the context of 'Managerial Remuneration' under the Companies Act, it clarifies a vital issue as under: "The NON WHOLETIME DIRECTORS of the company are presentlyNOT COVERED(emphasis) under the exempted list and as such the sitting fee / commission payable to them by the company is liable for Service Tax&…

ICAI Elections 2012: Watch this page

The ICAI elections are back. Keep watch this page for all the updates on this election. You can bookmark this. To begin with, the first issue we want to raise is election expenses. Do you know, how much is spent by each regional and central council election contestants? Mind boggling in some cases. Is it worth to spend this exorbitant amount?

A single mailer to all members of the election constituency costs lacs of rupees only postage, forget the cost of printing and stationary. It is worth? Can we go green? Our community is a highly educated one. Can't we ask all contestants to create a blog and post everything you want to on that and let ICAI share the link to all. Let people go to your blog, read, interact with the contestant and decide. When even income tax returns are made mandatory to file online, please don't argue that rural members don't have access to technology or internet.
Can't we ban all postal mailers? Contribute to environment and save cost too?
Is it p…

ST Notifications issued on 07-08-2012

Form 23 B Extended upto 11-08-2012

Ministry vide circular number 14/2012 dated 21/06/2012 had imposed fees on Form 23B (Information by auditor to Registrar) w.e.f.22/07/2012.

Kindly note that the Ministry vide circular number 22/2012 dated03/08/2012 has further extended the last date for filing the Form 23Bwithout fee. Fee shall be charged on any eForm 23B filed on or after12th August, 2012. You are therefore advised to file the pending eForms within the time limit to avoid any last minute rush.

IndianCAs: Frequently Asked Questions on E-filing – CPC [3 Attachments]

[Attachment(s) from Ashwin Nagar included below]To e-file the income-tax returns easily, the Direct Taxes Committee of ICAI had requested the CPC to provide the Frequently Asked Questions (FAQ's) on matters relating thereto. In response to their request, Committee received FAQ's on E-filing of Income-tax Returns and CPC.
If you didn't get it from the committee chairman, please find attached. Hope this will be of help to you. | Ashwin Nagar | FCA and SAP-Finance & Consolidations |Success is not permanent and failure is not final Facebook : Twitter      : Orkut        : Linkedin    :

__._,_.___ Attachment(s) from Ashwin Nagar 3 of 3 File(s) Data utf-8'en-us'FAQ’s on CPC and E-filing.pdf FAQ's relating to Refund,Demand, No refund No demand.pdf Reply to sender | Reply to group |����������…

Interest Subvention of 1% on Housing Loan-2012-13

Press Information Bureau
Government of India
04-July-2012 14:26 IST Interest Subvention of 1% on housing loans The Union Cabinet today approved the proposal for extending the scheme of interest subvention of 1% on housing loans upto Rs.15 lakh where the cost of the house does not exceed Rs.25 lakh for the year 2012-13 and to amend the operational part of guidelines for release of funds.

A budgetary provision of Rs.400 crore has been made for Financial Year 2012-13 for implementing the scheme.

Consequent upon the extension of scheme, the limit of subsidy for an individual borrower would be Rs.14,912 for a loan of Rs.15 lakh and Rs.9925 for a loan of Rs.10 lakh.

The extended scheme will benefit all house loans availed in Financial Year 2012-13.


The original scheme of 1% Interest Subvention on Housing Loans upto Rs.10 lakh, provided the cost of the housing unit does not exceed Rs.20 lakh was approved by the Cabinet in September, 2009. The scheme was revised by iberali…

Draft ST Circular -27-07-2012

Draft Circular on leviability of service tax on staff benefits and employment related transactions Draft CIRCULAR [F.No 354/127/2012-TRU], dated 27-7-2012 Subsequent to the operationlisation of the Negative List, a number of issues have been raised in relation to the manpower supply or the services provided by the directors of a company or by the employer to the employees. These issues have been examined and are proposed to be clarified as follows: A. Scope of manpower supply 2. After the operationlisation of the Negative List, the erstwhile definition of the manpower recruitment or supply agency is no more applicable. Thus, the words manpower supply would have to be given their natural meaning. The manpower supply is understood to mean when one person provides another person with the use of one or more individuals who are contractually employed or otherwise engaged by the first person. The essence of the employment should be that the individuals should be employed by the provider of t…

IndianCAs: Filing of Form 23B without Payment of Fee

Filing of Form 23B without Payment of Fee
As you may be aware, the Ministry of Corporate Affairs vide its circular number 14/2012 dated 21.06.2012 had imposed fees on Form 23B (Information by auditor to Registrar) w.e.f. 22/07/2012. Subsequently, the Ministry vide its circular number 19/2012 dated 27.07.2012 has extended the last date for filing the Form 23B without fee for two weeks. Accordingly, fee shall be charged on any e-Form 23B filed on or after 05.08.2012. The Ministry has requested the Institute to advise its members to file the pending e-forms immediately without waiting for last date to avoid last minute rush on MCA21 system.

Members concerned are accordingly requested to do the needful.
| Ashwin Nagar | FCA and SAP-Finance & Consolidations |
Success is not permanent and failure is not final Facebook : Twitter      : Orkut        : Linkedin    : http:…

Cost Audit Report-XBRL-31-12-2012

Ministry of Corporate Affairs30-July, 2012 17:20 IST Filing of Cost Audit Report and Compliance Report in the Extensible Business Reporting Language (XBRL) ModeThe Ministry of Corporate Affairs has decided that all cost auditors and the concerned companies will be allowed to file their Cost Audit Reports and Compliance Reports for the year 2011-12 [including the overdue reports relating to any previous year(s)] with the Central Government in the XBRL mode, without any penalty, upto 31st December, 2012.

Accordingly the Institute of Cost Accountants of India, 12, Sudder Street, Kolkata – 700 016 Institute has been requested to circulate this for the information of all concerned.

It may be noted that its circular of 10th May, 2012 [as amended on 29th June, 2012], it has already been mandated by the Ministry of Corporate Affairs that all cost auditors and the concerned companies shall file their Cost Audit Reports and Compliance Reports for the year 2011-12 onwards [including the overdue re…