Due date of Service Tax return for April- June’2012 extended to 25-11-2012

Due date of filing of Service Tax returns for the period 01-04-2012 to 30-06-12 has been extended from 25-10-2012 to 25-11-2012

Rule 7 of the Service Tax Rule,1994 – Returns – Extension of Time Limit to file return in form ST3

ORDER No 3/2012 (F.NO.137/99/2011-ST), dated 15.10.2012

In exercise of the power conferred by sub-rule (4) of rule 7 of the service tax rule, 1994, the CEBC hereby extends the date of submission of the return of the period 1^st April 2012 to 30^th June 2012, from 25^th October,2012 to 25^th November’12.

The circumstances of a special nature which have given rise to this extension of time are as follows:

(a)           ACES will start releasing the return in Form ST3 in a quarterly format, shortly before the due date of 25^th October, 2012.

(b)           This will result in all assesses attempting to file return in short time period, which may result in problems in the computer network and delay and inconvenience to the assesses.

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SBI Launched Personal Accident Cover for Just Rs.100

SBI Generl Insurance launched an amazing Personal Accident Insurance Offer offer for it’s Saving Account Holders:-

Just pay Rs. 100 annual & Get Rs. 400,000 Personal Accidental Insurance.

Each permanent Indian residence having Saving Bank Account with SBI and ages betwen 18 years to 65 years can take policy of 4 Lakhs for a nominal annual premium of Rs.100. The insurance provider is SBI General.

Policy covers loss of life due to accident.

Some of the major exclusions are:
a. Suicide & Self Inficted Injury
b. HIV,AIDS
c. Persons enrolled in any branch of police, paramilitary, military & armed forces of any Country, whether in peace or war.
d. Accidents under influence of Alcohol, Drugs, or other Intoxicants
e. Participation in Riot, Felony, Crime or Civil Commotion
f. Learning or operating any Aircraft.
g. War, Civil War, Invasion, Insurrection, Revolution, Act of Foreign Enemy etc,
h.  Nuclear Damage
i. Adventure & Dangerous sports
j. Child Birth & Pregnancy
h. Wilful Participation in Illegal act or any Violation or attempted violation of the Law or Resistance to arrest.

For further list of exclusions please refer to the Policy Wording

The process is quite simple: 

1. Visit your SBI branch and fill up a form that will permit them to deduct Rs.100 from your savings account.

2. Within a couple of days the policy document (which is a nothing but a single sheet of paper) and a receipt for the paid premium can be collected from the branch.

3.While collecting the same, you need to fill up the nominee details on this policy document.

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Charging of Service tax on Railway Ticket and refund of service tax on cancellation of ticket issued on or after 01.10.2012

Levy of Service Tax on Railway Passengers Travelling in Ac Classes/First Class from 1st October 2012

 

No Service Tax to be Levied on Tickets Issued Prior to 1st October 2012

 

In Case of Cancellation of Tickets Issued on or after 1st October 2012, the Applicable Amount Including Service Tax to be Refunded by Railways along with refund amount.

 

The Ministry of Railways has made partial modification in levy of Service Tax on the fare of passengers travelling in AC Classes/First Class from 1st October 2012. As per the corrigendum issued by Ministry of Railways on 28.9.2012, there are following changes:

 

(i) Service Tax amounting to 3.708% on the total fare of passenger services in :

(a) AC First Class

(b) Executive Class

(c) AC-2 tier Class

(d) AC-3 tier class

(e) AC Chair Car class

(f) AC Economy class

(g) First Class

is leviable from the 1stday of October 2012. It has been clarified that the Service Tax would be collected on the tickets issued/bookings made on or after 01.10.2012. Service Tax is not leviable on tickets issued prior to 01.10.2012 and hence will not be collected on board the trains.

 

(ii) In case of cancellation of tickets booked by the passengers on or after 01.10.2012, the applicable amount including refundable Service Tax amount will be refunded by Railways as per Railway refund rules and Finance Ministry guidelines.

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Additional services covered under Reverse Charge Mechanism w.e.f 07.08.2012

Now, w. e. f. 07.08.2012, following additional services shall be covered by reverse charge mechanism:

Sl. No.	Nature or Description of service	% of Service Tax payable by service provider	% of Service Tax payable by service Recipient
1.	Security Services provided by Individual, HUF, partnership firm or AOP to body corporate business entity [Security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity- Rule 2(fa) of Service Tax Rules, 1994]	25%	75%
2.	Services  by a director of a company to the said company	Nil	100%

New Servive under Reverse charge W.E.F 01.07.12

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Service Tax Rate

Increase in Service Tax Rate w.e.f 01.04.2012

With effect from 01.04.2012 by virtue of notification no. 2/2012 dated 17.03.2012 the rate of Service Tax has been increase from 10.30% to 12.36%.

Changes have also been made in respect of rate of tax in Service Tax Rule 1994 and Work Contract (Composition Scheme of Payment of Service Tax) Rule 2007. Hence, Special Rate of Tax w .e. f 01.04.2012 for Services in Execution of Work Contract shall be 4.80%.

The Special rate of tax payable in respect of life insurance business services (fall under Rule 6(7) of Service Tax Rule, 1994) has also been increase from 1.5% to 3% in respect of first year premium charged from policy holders. However, in all subsequent years, the rate of service tax has been retained at 1.50% of the amount of premium.

Applicability of Service Tax and Its Registration
Due Date of Payment of Service Tax
New Services Under Reverse Charge

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Due date of payment of Service Tax

Service Tax collected by service provider or service receiver as the case may be to the credit of Central Government on the regular basis before the Due date of payment of service tax.

As per Rule 6 of service tax rule 1994 , the due date of payment of service tax for individual/partnership firm and others are as follows:

Due date of payment of Service Tax for Individual/Partnership firm

For individual/partnership firm due date of payment of service tax is 5^th of the following quarter in which payment is received. However in case of online payment of tax grace payment of 1 day is given and hence service tax payment in case of online can be made upto 6^th of the following quarter.

 

Due date of payment of Service Tax for for Others (Except Individual/Partnership firm)

For all service tax payer except individual/partnership firm due date of payment of service tax is 5^th of the following month in which payment is received. However in case of online payment of tax grace payment of 1 day is given and hence service tax payment in case of online can be made upto 6^th of the following quarter.

Exception:

In all the cases mentioned above service tax collected for month/quarter ending March shall be payable by 31^st of March of the said calendar year.

Applicability of Service Tax and Its Registration

New Services Under Reverse Charge

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Applicability of Service Tax and Its Registration

Service tax provision have been forced since 1994, since 1994 taxation in respect of service tax has been dealt positively, but with the introduction of finance bill 2012 on 16.03.12 service tax shall be charged on all activity undertaken by a person for another for consideration except services specified in the negative list of services as well as those exempted by virtue of exemption notification.

Every person is required to take Service Tax Registration if the value of Services provided by him during the financial year is more than 9 lacs, but the service tax would be payable only when the value of services provided is more than 10 lacs.

Service Tax Payment is deposited by the service provider with government quarterly in case of individual /Partnership firm and monthly in all other cases

Due date of payment of service tax

Service Tax Rate

New Services Under Reverse Charge

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Waiver of Term Loan, Working Capital Loan and its Taxability under Income-tax Act, 1961

With the globalization, business in India has expended manifold. While existing units have expended their footprint, new entities have entered the booming Indian business arena by availing of various types of finances such as term loan and working capital loan from public institution, bank, private parties, etc. Due to various reasons such as stiff global competition, new invention and global recession financial position of many units have deteriorated and, as a result, their accounts with financial institutions or bank have become non-performing assets (NPA).

Such unit enters into a one-time settlement with banks or financial institutions by paying a stipulated amount against the loan amount, while the balance is waived off. A pertinent question arises is the taxability under the Income-tax Act,1961 of the sum waived off term loan and working capital loans by banks, financial institutions or depositors.

Let us refer decision of Delhi High Court in the case of Logitronics (P) Ltd. vs CIT, in the case assessee – company defaulted in payment of loan taken. Company went into the settlement of loan with bank can substantial amount of principal and interest was waived off by the bank. In the income tax return filed by the assessee, it showed the interest waived off as interest waived off to the credit of Profit & Loss account and was offered for taxation but does not offer the amount of principal  amount for taxation and  credited amount of principal to Capital Reserve.

The matter was produced before HC, from the reading of the judgment answer would depend upon the purpose for which loan was taken. If the loan was taken for acquiring the capital assets, waiver thereof would not amount to any income eligible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, the waiver thereof may result in the income more so when it was transferred to the profit and loss account.

Source: ICAI journal, June'12

Note: For more details please reffer ICAI journal June'12.

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TDS Rate For FY 2012-2013

Sl. No.	Section Of Act	Nature of Payment in brief	NO TDS if payment does not exceeds (Rs.)		Rate %
			01.04.2012	01.07.2012	Individual, HUF,AOP.BOI	Others
1	192	Salaries	Salary income must be more then exemption limit after deductions.		Average Rate
2	193	Interest on debentures	2500	5000	10		10
3	194	Deemed dividend	-	-	10		10
4	194A	Interest other than Int. on securities (by Bank)	10000	10000	10		10
4A	194A	Interest other than Int. on securities (By others)	5000	5000	10		10
5	194B	Lottery / Cross Word Puzzle	10000	10000	30		30
6	194BB	Winnings from Horse Race	5000	5000	30		30
7	194C(1) & (2)	Payment to Contractor & Sub-Contractor/Advertisment	30000 for single transaction and Rs. 75000 for aggregate of FY	30000 for single transaction and Rs. 75000 for aggregate of FY	1		2
8	194D	Insurance Commission	20000	20000	10		10
9	194EE	Payments out of deposits under NSS	2500	2500	20		-
10	194F	Repurchase of units by MF/UTI	1000	1000	20		20
11	194G	Commission on sale of lottery tickets	1000	1000	10		10
12	194H	Commission or Brokerage	5000	5000	10		10
13	194I	Rent (Land & building)	180000	180000	10		10
		Rent (P & M , Equipment, furniture & fittings)	180000	180000	2		2
14	194J	Professional/Technical charges/Royalty & Non-compete fees	30000	30000	10		10
15	194J(1)(ba)	Any remuneration or commission paid to director of the company(Effective from 1 July 2012)	NA	NIL	10		10
16	194LA	Compensation on acquisition of immovable property	100000	200000	10		10
17	194LLA	Payment on transfer of certain immovable property other than agricultural land (Finance Minister has withdraw TDS on such transaction on 07/05/2012)	(a) INR 50 lakhs in case such property is situated in a specified urban agglomeration; or(b) INR 20 lakhs in case such property is situated in any other area)		withdrawn by Finance Minister on 07/05/2012 no tds on such transactions		withdrawn by Finance Minister no no tds on transfer of immovable property

Note:

1.       TDS at higher rate ie., 20% has to be made if the deductee does not provide PAN to the deductor
2.       No TDS on Goods Transport  :No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

3.       Surcharge on Income-tax is not deductible/ collectible at source in case of individual/ HUF /Firm/ AOP / BOI/Domestic Company in respect of payment of income other than salary.

4.       In the case of Company other than Domestic Company, the rate of surcharge is @ 2.5% of Income-tax, where the income or the aggregate of such income paid or likely to be paid exceeds Rs.1,00,00,000. 

5.       No Cess on payment made to resident: Education Cess is not deductible/collectible at source in case of resident Individual/HUF/Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary.Education Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and foreign company.

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