IndianCAs by Ashwin Nagar

04 November 2009

IndianCAs: Profession Tax Amnesty Scheme

TRADE CIRCULAR

Date: 03/11/2009

No.PFT/2009/ P.T./Adm- 29/.../B

(Trade Cir.No.30T of 2009)

Sub:

Profession Tax Enrollment Incentive Scheme 2009 The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

Ref:

1. Budget Speech by Hon'ble Finance Minister.

2. Notification published in the Govt. Gazette Government Resolution No. P.T.-I 109/C.R. 35/Taxation- 3, Mantralaya, Mumbai-400 032 dated 29'" July, 2009.

Gentlemen/Sir/ Madam,

The Maharashlra State Tax on Professions, Trades, Callings and Employments Act, 1975 (Profession Tax Act) is being implemented in the State w.e.f. 1^st April, 1975.

Under the Act, every self employed person engaged in any profession, trade, callings and employment is required to obtain Enrollment Certificate and pay profession lax yearly as per the provisions of the Act. The Government has observed that, many persons/ firms/ societies/ institutions etc. despite being liable to pay Profession Tax have failed to obtain enrollment certificate and arc not paying profession tax. The Act provides for levy of penalty on such "persons" for failure to get enrolled.

2. The Government wishes that un-enrolled self employed persons should come forward, get themselves enrolled, and should pay Profession Tax due from them.

3. Accordingly, in order to provide incentive for enrollment, the Government of Maharashtra issued a resolution referred to at No.2. The aforesaid resolution is available on website www.mahavat. gov.in. This resolution has outlined the scheme of incentives and delegated to Commissioner of Sales Tax the powers to frame the procedure and to implement the scheme. Accordingly this circular is being issued. The salient features of the scheme are as under.

4. Scheme

4.1 Duration of Scheme:

The Amnesty Scheme is open for the period from 1^st August, 2009 to 31^st March, 2010 and is called "Profession tax Enrollment Incentive scheme 2009".

4.2 "Persons" eligible for Amnesty Scheme are:

All persons/ firms/ establishments who are liable but not yet enrolled under the Act.

4.3 Benefits under the scheme:

a) For persons/ firms/ establishments liable for enrollment during any period prior to 1.4.05 and yet not enrolled.

i) Tax, interest & penalty in respect of periods prior to 1/04/2005 would be waived in full.

ii) The amount of penalty on the tax payable for period 1.4.2005 onwards would be waived in full.

b) Person/firms/ establishments liable on or after 1.4.05 but not enrolled

i) The amount of penalty from the year of liability till the date of enrollment would be waived in full.

4.4 Conditions of Amnesty:

i) Persons / firm / establishment not holding Enrollment certificate must apply for Enrollment during the period of said scheme.

ii) The tax payable under the Act for the periods 1st April, 2005 or from the date of liability where such (.late is after 1.4.2005 to 3 Is1 March. 2010 along with interest on it is to be paid by the self employed persons during the Amnesty period.

iii) Under no circumstances the amount paid by the applicant prior to 31st July 2009 shall be adjusted towards the amount to be paid as per the said scheme. Similarly no refund will be granted for the amount paid prior to the said scheme.

4.5 Procedure:

(1) Unenrolled persons are required to apply for EnroIIment Certificate (E.C.) in form II under Maharashtra Profession Tax rules. The application form duly filled and signed should be submitted to Profession Tax registration officer along with the proof of address and the details of profession/Trade/ Calling/employme nt. After entering the mandatory fields in the system, a registration officer will generate erollment number and provide the same to the applicant for the purpose of payment of requisite tax and interest in the bank/ treasury. At this stage the certificate shall not be issued but the number is given to applicant only to facilitate payments.

(2) On obtaining Enrollment number applicant should make the payment of tax and interest as applicable, in full.

(3) An application for the scheme in prescribed format (Annexure-1) along with the proof of payment of requisite amount has to be filed before the registration authority. Upon receipt of the said application, the registering authority will verify the correctness of application and payment made by the applicant. If the registering authority is satisfied that the application is in order as per the scheme, he will issue an acknowledgement to the applicant provided under annexure-I. The registering authority shall not issue any other communication separately.

(4) In case after generating EC number, applicant does not pay the full amount of tax and interest payable within the prescribed period, enrollment certificate will be generated as per the actual liability i.e. without giving him the benefit of the scheme. Full payment of tax and interest with in the prescribed time is the prerequisite for incentive under this scheme.

(5) After completing all the above/referred formalities, registration officer will provide a copy of enrollment certificate to the applicant.

(6) In ease of any difficulty, the applicant may contact the administrative Joint Commissioner (P.T.) or Joint Commissioner of Sales Tax (Adm) VAT of the respective Divisions.

If any member of trade has any doubt, he may refer the matter to this office for further clarification.

You are requested to bring the contents of this circular to the notice of all the members of your Association.

Yours faithfully

(Sanjay Bhatia)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.

ANNEXURE- I

Application form for Profession Tax Enrollment Incentive Scheme- 2009

Date: ____________ ____

1. Name of the Applicant

2. Address:

3. E.C.No.

To,

The Profession Tax Officer ( ),

Registration

Sub: Amnesty Scheme 2009 under Profession Tax Act, 1975.

Ref: Government Resolution No. P.T.-l 109/C.R. 35ATaxation- 3, Mantralaya, Mumbai-400 032 dated 29th July, 2009.

Sir,

1. I ____________ _________ ____ of M/s_________ _________ _________ ________ am unenrolled person liable to pay tax under the said Act.

2. I hereby make an application for availing of the said incentive scheme-2009 declared by Government of Maharashtra under Government Resolution referred above. The terms and conditions laid in the said amnesty scheme are fully acceptable to me.

3. The details of arrears are as follows

TABLE

Sr.No.	Period	Amount Payable
		Tax	Interest	Total
1	2	3	4	5

Amount Paid			Bank and Branch/Treasury	Dt. of payment
Tax	Interest	Total	Bank and Branch/Treasury	Dt. of payment
6	7	8	9	10

4. I hereby enclose self-attested copies of the chalan of payment made by me as detailed above.

Kindly consider my request for amnesty under the said incentive scheme-2009.

Place:

Yours faithfully,

Date:

(Signature, Name and Designation)

ACKNOWLEDGEMENT

E.C. Number:_____________ _________ _

Received your application under Profession Tax Enrollment Incentive Scheme-2009. As you have complied to the conditions under the above scheme, your application is accepted.

Date :

Profession Tax Officer

Registration

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IndianCAs: Survey for ICAI Election for Central Council (WIRC)

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IndianCAs has conducted a survey on the ICAI election to guage the mood of the members about next central council and candidate from WIRC.

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03 November 2009

IndianCAs: Johnny and Service Tax Refund Series

Hello Members,

CA Pradip jain has written really good humorous articles on Service Tax Refunds. Its really interesting reading for a CA who always see the boring lengthy texts of Laws and Acts. There are three articles in this series and posted to our blog IndianCAs. You can access as below by clicking the link, and don't forget to write your comments if you have anything to say on that:

Johnny and Service Tax Refund - Part I:

http://indiancas.blogspot.com/2009/10/johnny-and-service-tax-refund-part-i.html

Johnny and Service Tax Refund - Part II:

http://indiancas.blogspot.com/2009/11/johnny-and-service-tax-refund-part-ii.html

Johnny and Service Tax Refund - Part III:

http://indiancas.blogspot.com/2009/11/johnny-and-service-tax-refund-part-iii.html

Best regards,
--
| Ashwin Nagar | India +91-9833015352 |
Success is not permanent and failure is not final

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Johnny and Service Tax Refund Part - III

By:

CA. Pradeep Jain

Siddharth Rutiya

Visit us at: www.capradeepjain.com

In continuation of the series of previous two articles, elaborating the difficulties in getting the refund claim under GTA service and Port services, we in this article are attempting to present the problems existing in the Service tax refund mechanism under Technical testing and analysis Services (Section 65[105][zzh]). This complete state of affairs is humorously picturisead by the way of poems and conversation between Johnny (an assessee) and his father. This Endeavour is just to bring out the problems faced by exporters.

Johnny and Jill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.

The assesses claiming refund orders under Technical testing and analysis Services are facing enormous complexities in getting their refund orders passed on futile and negligible grounds that not only harass the assessees but also deprives away the faith of assessees on the refund mechanism. These enormous reasons on which the department is refusing the refund claims on the said services are being projected hereunder as follows: -

Johnny-Johnny! Yes papa!

Got the refund?

No Papa,

Telling lies?

No Papa,

What's the reason?

This papa: -

Johnny says: I went to the department to get the refund for Technical Testing and analysis service but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following Flay: -

You have not submitted the written agreement as regards the said service. This is a prerequisite for availing the benefit of refund claim.

Johnny's View:

This is just a means of requirement that can be neglected as it is a fact that if there is any statutory requirements of the Foreign law for technical testing and analysis then we the assessees are unable to bring out the same to your good honour and hence there can't be any written agreement in such respect. But as this service is related to the export of goods the refund ought to have been granted.

Further, this is a set philosophy that no exporter will carry out the technical testing and analysis service from a third party until and unless there is a requirement of same from the foreign buyer's point of view. This further clarifies the situation and makes it ample clear that the said requirement of submitting the written agreements is just a presupposed condition which can be avoided. But the department does not agree.

Johnny says: I went to the department next day again with the corrections but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following more flay: -

The date of technical testing and analysis report of the samples are post dated from the dates on which the export goods were sent to the buyer. Hence, this construe that the samples were sent prior to the date of Technical testing and analysis report and as such this service availed by the exporter is not in respect of goods exported and therefore the refund is rejected.

Johnny's View:

The dates of testing report is post dated as regards the date of consignment of goods to the buyer because the goods after being tested were sent to the buyer and as it was assured on our part in respect of quality of the goods that the same will clear out all the testing we sent the goods to the buyer. This was due to the fact that there was urgent need of the buyer. We normally take out the sample from the consignment and keep it for 6 months for any future claims. We took out the sample and sent the consignment and then send it to concerned lab for testing. The test report has come before the consignment reach the foreign buyer. Thus, the complete scenario clearly picturizes that the service of technical testing and analysis availed by us was directly related to the exports made by us and there is nothing which leads to distrust of this fact. Further, the correlation with export is established from the fact that the Service tax invoice has reference of Report. The report has reference of Batch number. That batch number also appears in shipping bill. Thus, it is clearly established that the technical testing and analysis service is taken for this particular consignment only.

Johnny says: I went to the department next day again with the further corrections but department rejected saying: -

Johnny-Johnny go away,

You won't get refund anyway.
It has following more flay: -

The invoices issued by you do not fulfill all the conditions specified under Rule 4(a) like category of service, Description of service etc. and in addition to this the batch number written in the invoice do not match with the batch number as is specified in the technical testing and analysis report. This further leads to the conclusion that the testing and analysis work carried out is no way connected with the goods exported and as such the refund is disallowed.

Johnny's view: -

Firstly, the Department is interpreting the legal language very strictly whereas the department should be liberal in this aspect, more to in the case of Rule 4A of Service tax rules requirements. Non compliance of the Rule 4A is not of great concern and there should be a practice to avoid allegations if the Rule 4A is not complied in its entirety.

Furthermore, the department's contention that the batch numbers do not match with those specified in the testing report is also no great concern. Just on the behalf of the Batch number it can't be interpreted that the testing and analysis services weren't used in respect of export of goods. These batch numbers are entered manually in the invoices and there are great chances of errors in this respect. Henceforth, the allegation of the department is futile for disallowance of refund claim.

Fruitless again & again;

Johnny now in grief and pain!

Refund order now a dream;

His efforts have downstream!

Via this article the sole endeavor is to picturise the problems faced by assesses in getting the refund order as against the Technical testing and analysis services. To represent the whole situation and to make it somewhat rhythmatic we have graced the article with humorous poems.

With this entertaining and rhythmical article we summarize that the present situation and mental state of assesses alleging refunds against export of goods is alike to the situation of Johnny as pointed out in the poem.

There are a number of services on which the refund is allowed. The assessee is facing difficulty in almost all of those services. Due to the large number of services we were not able to cover all the services in this article and hence we will be bringing further articles on the different services covered therein. Keep visiting for the next article……..

01 November 2009

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Johnny and Service Tax Refund Part - II

Johnny and Service Tax Refund Part - II

By: -

CA. Pradeep Jain

Siddharth Rutiya

Visit us at : www.capradeepjain.com

In continuation of previous article, elaborating the difficulties in getting the refund claim under GTA service, we in this article are unveiling the problems existing in the Service tax refund mechanism under Port Services (Section 65[105][zn]). This complete scenario is being elaborated with the means of humorous poems and conversation between Johnny (an assessee) and his father but the main motive is to bring out the problems faced by exporters.

Johnny and Jill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.

Presently, assesses are claiming refund orders under Port Services are experiencing vast intricacies in getting refunds. The refunds claimed by the assessees as against their exports are their Rights but are being refused by the departmental authorities on various arguments which are of no significance and worth less. The various reasons on which the department is refusing these refund claims on the said services are highlighted as under: -

Johnny-Johnny! Yes papa!

Got the refund?

No Papa,

Telling lies?

No Papa,

What's the reason?

This papa: -

Johnny says: I went to the department to get the refund for Port service but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following Flay: -

The refund claimed by you is regarding port charges of ICD and as per the law refund is allowed for "Service provided by a port or any person authorised by the port in respect of the export of said goods". Further the port charges of ICD are not eligible for refund as they aren't covered under the said service as because of the definition of Port. The definition of port reads as under: -

""port" has the meaning assigned to it in clause (q) of section 2 of the Major Port Trust Act, 1963".

And Major Port Trust Act, 1963 defines the term port as: -

""Port" means any major port to which this Act applies within such limits as may, from time to time, be defined by the Central Government for the purposes of this Act"

The analysis of these definitions of "port" as given here above doesn't include ICD and henceforth the refund order is not to be allowed.

Johnny's View: -

I told that ultimately the goods are to be exported through port only and as such the refund should be granted to us. We have also given the list of the shipping bills along with the ports. But you (the department) do not agree. You say that the goods are exported through ICD and not through the port and as such service tax claimed by you are not port charges. Hence the refund cannot be granted to me.

Johnny says: I went to the department next day again with the corrections but department said: -

Johnny-Johnny go away,
Come again another day.
Your refund order has following more flay: -

I had availed duty drawback in respect of shipping bills in terms of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995.

Johnny's View: -

But my contention was that we are also claiming rebate claim. We pay the duty on FOB value of goods. The rebate claim is given to us by the department on FOB value as reduced by Port charges, Outward Freight, CHA Charges and Insurance charges. Henceforth, the value under consideration for Rebate claim doesn't includes these values and no rebate is given on it.

On the other hand Drawback as given under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 is limited to the scope of duty/tax paid on inputs and input services. Thus, here again the department is taking contention that Drawback will not be allowed on such Port charges as these are not input services and have been availed after the manufacture of final product.

The Department is taking two way contention one while giving rebate they are denying the same on Port Charges alleging that these aren't includible in transaction value and on the second part they are disallowing the refund of service tax alleging the Drawback has been claimed and drawback rates includes these input services. Thus, if Department is taking two way contentions.

But the department said that the value under Central Excise is different from the value under drawback rules. The drawback is sanctioned on FOB value and as such these input services are included while fixing the drawback rates. The department said that if we are taking two stands then you are also taking two stands in replying the same. When we sanction rebate claim then you say that these are includible in transaction value and rebate should be sanctioned on FOB value but when claiming refund you say that these are not input services and as such these are not included in fixing drawback rates.

Johnny says: I went to the department next day again with the further corrections but department rejected saying: -

Johnny-Johnny go away,

You won't get refund anyway.
It has following more flay: -

The service tax invoice issued to you is being issued by the shipper and not by the Port authorities. These shippers are being registered under Business Auxiliary Services or Business Support Services. These services aren't specified under the list of services eligible for refund against export. Thus, the refund order is disallowed on such ground.

Jonny told them that the port authorities do not bill us directly but it is billed to shippers and they bill to us. But the nature of expenses clearly tells that these are incurred at the port. The terminal handling charges and other related charges are clearly incurred at port.

Fruitless again & again;

Johnny now in grief and pain!

Refund order now a dream;

His efforts have downstream!

Although the article is ornamented with humorous poems but the key motive is to bring into light the intricacies involved in the refund orders. With this entertaining and rhythmical article we summarize that the present situation and mental state of assesses alleging refunds against export of goods is alike to the situation of Johnny as pointed out in the poem.

IndianCAs: File - Contact Book of Ashwin Nagar

Please ignore if you have have already updated or not interested

Hi!

I am updating my contact book. If you can please spare some of your time for me to fill it up, I will be grateful to you. To update your details, please click the following link,

http://indiancas.blogspot.com/2009/07/contact-book-of-ashwn-nagar.html

Thanks & with Best Regards,

| Ashwin Nagar | FCA and SAP-FICO\SEM- BCS |
Success is not permanent and failure is not final
Ph: India: +91-98330-15352 US: +1-323-325-4111

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IndianCAs by Ashwin Nagar

04 November 2009

IndianCAs: Profession Tax Amnesty Scheme

IndianCAs: Survey for ICAI Election for Central Council (WIRC)

03 November 2009

IndianCAs: Johnny and Service Tax Refund Series

Johnny and Service Tax Refund Part - III

01 November 2009

IndianCAs: New poll for IndianCAs

Johnny and Service Tax Refund Part - II

IndianCAs: File - Contact Book of Ashwin Nagar

Empanelment of Concurrent Auditors

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