Proforma For Obtaining Transfer Pricing & International Tax Information

Proforma For Obtaining Transfer Pricing & International Tax Information

The CBDT has vide Office Memorandum dated 21.11.2011 proposed a proforma for obtaining information relating to Transfer Pricing and in other cases. Information on tax matters is being sought by field officers of the Income Tax Department from countries/jurisdictions with which India has Double Taxation Avoidance Agreement (DTAA) or Tax Information Exchange Agreement (TIEA) under the relevant 'Exchange of Information' Article of DTAA/TIEA through the office of competent authority viz. the Joint Secretary in the Foreign Tax & Tax Division, CBDT. Presently the above information is being sought obtained in a prescribed checklist/proforma (copy enclosed as Annexure-A). Further in the case of U.K. for obtaining banking information, a separate proforma has been prescribed by U.K. tax authorities.

IndianCAs: ICAI to check No. of Tax Audit done by Each CA

 

Dear Professional Colleague,

As you must be aware, recently the ICAI had represented before Central Board of Direct Taxes (CBDT) seekingtax audit data based on returns e-filed during the year 2010-11. I would like to inform you that in response to the representation made to CBDT, the ICAI has been provided with the data relating tonumber of tax audits conducted by themembers along with the membership numbers of the tax auditors.

As per the data provided, the total number oftax audit returns filed in respect of thefinancial year 2010-11 was 16, 16,096 which were conducted by 59,472 auditors. The data so provided is being further processed with regard to fake membership numbers, membership numbers which exceeded the specified number (ceiling) of tax audit assignments, etc. In order to prevent misuse of membership numbers of tax auditors, we have been given assurance that from next year onwards the uploading of tax audit report along with digital signatures would be made mandatory.

Further, the ICAI has also suggested that on the basis of data of practicing Chartered Accountants provided by ICAI, a user id and a password may be made available to all practicing members so that they can view all the tax audit reports uploaded in their name, which in turn would further curb the malpractice of misusing the details of member by the assessee. A tax audit not done by the member may be then reported by him to the Income-tax Department for the action at its end.

The said suggestion found favor with the Department which has assured that the idea would be taken forward for further consideration. I would also request you to kindly provide your valuable suggestion(s) to curb the malpractices being followed further in this regard.

As regards the data being processed, we would keep you posted.

Warm Regards,

CA. G. Ramaswamy

| Ashwin Nagar | FCA and SAP-Finance & Consolidations |

Success is not permanent and failure is not final

 

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PPF-NSC- CHANGES

 

Interest rates on small savings have been hiked in the range of 4 per cent up to 8.6 per cent. The investment limit for Public Provident Fund (PPF) has also been increased by Rs 30,000 to Rs 1 lakh, as also the interest rate at 8.6 per cent from 8 per cent at present.

Announcing the new norms on Friday, the Finance Ministry said the new rates will be applicable from the date of notification which will be announced soon. From next year, the rates would be notified before April 1, it added.

The small saving schemes have been restructured on the basis of the recommendations of the Shyamala Gopinath Committee, which submitted its report in June.

The rate of interest on small savings schemes will be aligned with Government Securities rates of similar maturity, with a spread of 25 basis points with two exceptions. The spread on 10-year National Savings Certificates (new instrument) will be 50 basis points and on Senior Citizens Savings Scheme 100 basis points.

The maturity period for the post office Monthly Income Scheme (MIS) and National Savings Certificate (NSC) has been reduced to five years from six years at present.

AGENTS DISAPPOINTED

Although this is good news for small savers, collection agents are disappointed. According to an office memorandum issued by the Finance Ministry, payment of commission on PPF at the rate of 1 per cent and Senior Citizens Savings Scheme at the rate of 0.5 per cent will be discontinued.

Agency commission under all other schemes (except Mahila Pradhan Kshetriya Bachat Yojana) will be reduced by half, from the existing 1 per cent

Extension of filling date for Form 8 (Statement of Accounts and Solvency) under LLP

Extension of filling date for Form 8 (Statement of Accounts and Solvency) under LLP

"Please note that as per Notification dated 04.11.2011, LLP shall file Form 8 (Statement of Accounts and Solvency) for the financial year ended 31.03.2011 with the Registrar, within a period of sixty days from 30.09.2011 i.e. from the end of six months of the financial year. "

LLP : LLP (Amendment) Rules, 2011 - Amendment in rule 24

Notification (F. No. 2/17/2011-CLV), dated 4-11-2011

In exercise of the powers conferred by sub-sections (1) and (2) of section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby makes the following rules, further to amend the Limited Liability Partnership Rules, 2009 namely :—

1. (1) These rules may be called the Limited Liability Partnership (Amendment) Rules, 2011.

(2) These rules shall come into force from the date of their publication in the Official Gazette.

2. After sub-rule (4) of rule 24 of the Limited Liability Partnership Rules, 2009, the following proviso shall be inserted, namely :—

"Provided that if a limited liability partnership has closed the financial year on the 31st March, 2011, it shall file the Statement of Account and Solvency in Form 8 with the Registrar, within a period of sixty days from the end of six months of the financial year to which the Statement of Account and Solvency relates".

 

RBI allows transfer of shares between NRIs, residents under FDI

Transfer of shares between non-resident Indians and residents under foreign direct investments can be done without the Reserve Bank of India's approval subject to certain conditions.

This is a step towards further liberalising the procedures and policies related to FDI. In a notification issued on Friday, the RBI said transfer of shares from a non-resident to resident or from resident to non-resident under the FDI scheme can be carried out without the prior approval of the RBI.

However, the conditions include ensuring that the original and resultant investment are in line with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditions (such as minimum capitalisation) and documentation, and the pricing for the transaction is compliant with the relevant SEBI guidelines such as IPO or book-building.

A certificate from a chartered accountant indicating compliance with SEBI guidelines is also required, RBI said.

Similarly, transfer of shares where the investee company (the company in which the investment is being done) is in the financial sector can be done without prior RBI approval provided that no-objection certificates are obtained from the respective financial sector regulator, RBI said.

These steps are likely to improve the flow of FDI into Indian companies as it does away with the requirement of prior approval from the RBI, said bankers

NRI PAN Application

INCOME-TAX (SEVENTH AMENDMENT) RULES, 2011 - AMENDMENT IN RULE 114 AND SUBSTITUTION OF FORM NO. 49A

NOTIFICATION NO. 56/2011 [F.NO. 133/48/2011-SO(TPL)], DATED 17-10-2011

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.(1) These rules may be called the Income-tax (7th Amendment) Rules, 2011.

(2) They shall come into force on the 1st day of November, 2011.

2. In the Income-tax Rules, 1962,-

 (A)  in rule 114,-

 (a)  in sub-rule (1), after the words, figures and letter "Form 49A", the words, figures and letters, "or 49AA , as the case may be" shall be inserted:

 (b)  in sub-rule (3),—

  (i)  for the words "accounting year" wherever they occur, the words "financial year" shall be substituted;

 (ii)  after item (iii) the following item shall be inserted, namely:—

"(iv) in the case of a person who is entitled to receive any sum or income or amount , on which tax is deductible under Chapter XVII-B in any financial year, before the end of such financial year.";

  (c)  in sub-rule (4), for the words "Table below shall be accompanied by documents mentioned in Column 3" the words "Table below shall be filed in Forms mentioned in Column 3 and shall be accompanied by the documents mentioned in Column 4" shall be inserted ;

MCA on Date Extension upto 31-10-2011

Attention Stakeholders!!!! Dear Corporates please note that Companies having last date of Annual Filling as October 30th 2011 can file on October 31, 2011 also without any additional fee, on account of Oct 30th 2011 being a Sunday. File before October 31st Midnight and save additional fee (Note: Lean time for filing is after 8 P.M. till 9 A.M. next morning.) In case of any technical difficulty, please contact us: North (011-64506000), East (033-23675242/ 033-64506000), South (044-28152455/ 044-64506000), West (022-65161996/ 022-64506000) or you can write to us at appl.helpdesk@mca.gov.in. Click here to view ROC facilitation office/ helpdesk details for filing assistance

NEW FORM FORM 49A-PAN

WISH YOU HAPPY DIWALI

The Income Tax Department has released a Notification for PAN application-SEE ATTACHMENT

National Manufacturing Policy

Press Information Bureau
Government of India
Ministry of Commerce & Industry

25-October-2011 14:59 IST

National Manufacturing Policy

The Cabinet approved the revised proposal of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry to put in place a National Manufacturing Policy.

The Cabinet in its meeting held on 15" September 2011 considered the National Manufacturing Policy and directed that the policy may be considered by a Group of Ministers (GOM) for further harmonizing the differences in some inter-ministerial positions notably relating to Ministry of Labour and Employment and the Ministry of Environment and Forests. The GOM in its meeting held on 14th October 2011 has resolved the relevant issues. A revised note incorporating the recommendations of the GOM has been approved by the Cabinet today.

The major objectives of the National Manufacturing Policy are to increase the sectoral share of manufacturing in GOP to at least 25% by 2022; to increase the rate of job creation so as to create 100 million additional jobs by 2022; and to enhance global competitiveness, domestic value addition, technological depth and environmental sustainability of growth.

The policy has been formulated after detailed consultations with the industry; subject matter experts; State Governments and the concerned Ministries/Departments of the Government of India. The policy envisages specific interventions broadly in the areas of industrial infrastructure development; improvement of the business environment through rationalization and simplification of business regulations; development of appropriate technologies especially green technologies for sustainable development and skill development of the younger population.

Industrial infrastructure development is envisaged not only generally but also through the creation of large integrated industrial townships called National Investment and Manufacturing Zones (NIMZs) with state-of-the-art infrastructure; land use on the basis of zoning; clean and energy efficient technologies; necessary social and institutional infrastructure in order to provide a productive environment to persons transitioning from the primary to the secondary and tertiary sectors. The land for these zones will preferably be waste infertile land not suitable for cultivation; not in the vicinity of any ecologically fragile area and with reasonable access to basic resources.

It is envisaged to ensure compliance of labour and environmental laws while introducing procedural simplifications and rationalization so that the regulatory burden on industry is reduced. The interventions proposed are generally sector neutral, location neutral and technology neutral except the attempt to incentivize green technology for sustainable development No subsidies are proposed for individual units or areas. The basic thrust is to provide an enabling environment for tapping the potential of the private sector and the entrepreneurial skills of the younger population.

The contribution of the manufacturing sector at just over 16% of India's GOP is much below its potential and a cause of concern especially in the context of other Asian countries in similar stages of development. This also has its socio-economic manifestations and prevents India from fully leveraging the opportunities of globalization. India is a young country with over 60% of its population in the working age group. With over 220 million people estimated to join the work force in the next decade, the manufacturing sector will have to create gainful employment for at least half this number. With a view to accelerating the growth of the manufacturing sector, the manufacturing policy proposes to create an enabling environment suitable for the sector to flourish in India.


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AD/SC/SK/LM

Tax Accounting Standards(Draft)

Drafts of tax accounting standard on construction contracts, government grants issued

The Central Board of Direct Taxes (CBDT) has invited comments and suggestions from stakeholders on the proposed tax accounting standards (TAS) on construction contracts and government grants. The drafts of the TAS on these two issues were released today.

A committee constituted by the CBDT in December last to study the harmonisation of the accounting standards issued by the CA institute with the direct tax laws in India has recommended the draft of these two TAS. The drafts of the other TAS would be issued in due course, the CBDT has said. The CBDT committee, comprising departmental officers and professionals, had submitted its interim report in August. This committee has also been tasked to suggest appropriate amendments to the income tax law in view of transition to IFRS (IND AS) regime. The interim report has recommended that accounting standards notified under the income tax law should be made applicable only to the computation of taxable income and a taxpayer should not be required to maintain books of account on the basis of accounting standards notified under the income tax law.

As two different sets of accounting standards may cause confusion for taxpayers and other stakeholders, the committee has suggested that the accounting standards notified under the Income Tax Act should be termed as "tax accounting standards". So far, under the income tax law only two accounting standards relating to disclosure of accounting policies and disclosure of prior period and extraordinary items and changes in accounting policies have been notified.

ST 3 RETURN DATE EXTENDED

SECTION 70 OF THE FINANCE ACT, 1994 - FURNISHING OF RETURNS - DATE OF FILING RETURN EXTENDED FOR PERIOD APRIL 2011 TO SEPTEMBER 2011 FROM 25-10-2011 TO 26-12-2011

ORDER NO. 1/2011 - SERVICE TAX, DATED 20-10-2011

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules, 1994 read with Notification No. 48/2011-Service-tax, dated 19th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011 from 25th October 2011 to 26th December 2011.

This is being done in view of the fact that the e-filing of service tax returns for all class of service tax assessees has been made mandatory for the first time vide Notification No. 43/2011- Service-tax, dated 25-8-2011, as such leaving less time for the trade to adjust to the requirement of e-filing.

DIN 4 Date Extended

SECTION 266B OF THE COMPANIES ACT, 1956 - ALLOTMENT OF DIRECTOR'S IDENTIFICATION NUMBER (DIN) - TIME FOR FILING DIN-4 BY DIN HOLDERS FOR FURNISHING PAN & TO UPDATE PAN DETAILS EXTENDED

GENERAL CIRCULAR NO. 66/2011, DATED 4-10-2011

In continuation of General Circular No. 32/2011, dated 31-5-2011 on the subject cited matter, I am directed to say that the time for filing DIN-4 by DIN holders for furnishing the PAN and to update PAN details has been extended till 15-12-2011.

Legal -ST-Arbitration -Exemption

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue) 

  

Notification No. 45/2011 – Service Tax

 New Delhi, the 12^th September, 2011

            G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services referred to under item (iii) of sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994.

2. This notification shall come into force on the date of its publication in the Official Gazette.

[F. No. 354/167/2011-TRU]

(Samar Nanda)

 Under Secretary to the Government of India

By virtue of this notification, Services rendered to any business entity, by an arbitral tribunal, in respect of arbitration  shall be exempted from service tax.

V.Imp-e-Filing of Returns-Practical Issues

 E-filing of Returns for Assessment Year 2011-12 - Practical Issues
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ER 5 & ER 6 – Electronic Filing Mandatory

ER 5 & ER 6 – Electronic Filing Mandatory

Every excise assessee is required to file ER-5(Annual Information relating to principal inputs) & ER 6 (Monthly return of Receipts and  Consumption of each of principal inputs) electronically with effect from 1^st October,2011 without any limit in payment of excise duty and cenvat credit mandatorily.

See notification

Advocates -e-Forms -Companies Act

Advocates/corporate advocates cannot be included in list of practicing professionals and they cannot issue various certificates integrated into various e-forms notified under Companies Act and Limited Liability Partnership Act, 2008
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PPF Deposit Limit Increased

MODIFICATION IN PPF SCHEME : DEPOSIT LIMIT RECOMMENDED TO BE RAISED FROM RS. 70,000 TO RS. ONE LAC WHILE RATE OF INTEREST ON ADVANCES AGAINST DEPOSITS IN PPF SCHEME RAISED FROM 1 PER CENT TO 2 PERCENTAGE POINTS

PRESS RELEASE, DATED 6-9-2011

The Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread.

The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1 per cent.

The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate on Government securities of similar maturities with a positive spread of 25 basis points on all schemes except for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. Recommendations of the Committee have been referred to State Governments and concerned Ministries/Departments of Central Government for their comments.

This information was given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question raised in Rajya Sabha today.

CBDT Letter on Appeals

SECTION 268A OF THE INCOME-TAX ACT, 1961 - APPEALS AND REVISION - FILING OF APPEAL OR APPLICATION FOR REFERENCE BY INCOME-TAX AUTHORITY - CBDT's INSTRUCTION NO. 3/2011, DATED 9-2-2011 REVISING MONETARY LIMITS NOT TO APPLY IPSO FACTO TO APPEALS FILED PRIOR TO 9-2-2011

LETTER NO. DIT(L&R)-I/SLP/393/2011/4589, DATED 2-9-2011

1. Kindly refer to the above.

2. In a large number of cases Hon'ble Delhi High Court has summarily dismissed the appeals filed by the department prior to 9-2-2011 on the ground that the tax effect involved was less than the revised monetary limits of tax effect involved prescribed by CBDT Instruction No. 3/2011, dated 9-2-2011.

3. As per Instruction No. 3/2011 the revised monetary limit was applicable only for the appeals filed on or after 9-2-2011 i.e. the date of issue of Instruction. As per para 11 of the Instruction, it was clarified that the appeals filed earlier would be governed by the old instructions operative at the time of filing.

4. On this issue SLP was filed in Supreme Court and one case namely Surya Herbal came up for hearing before the Hon'ble Supreme Court on 29-8-2011. The order passed by the Hon'ble Court in that case in SLP(C) CC No. 13694 of 2011 is enclosed herewith (see Annexure). The Supreme Court has directed that review petition be filed in High Court within two weeks. In such cases the attention of the High Court may be drawn to the observations of Supreme Court with a prayer not to apply the Instruction No. 3/2011 ipso facto in respect of appeals filed prior to 9-2-2011.

5. In view of the above, the Board desires that in all such cases (including the cases in which proposal to file SLP has been sent to Directorate of Legal & Research) immediate steps be taken to file review petition in High Court pointing out the observations of Supreme Court. The officers may be advised not to send any proposals henceforth to file SLP in such cases.

ANNEXURE

SUPREME COURT OF INDIA

Commissioner of Income-tax Central-III

v.

Surya Herbal Ltd.

CHIEF JUSTICE; K.S. RADHAKRISHNAN
AND SWATANTER KUMAR, J.

CC NO. 13694/2011

AUGUST 29, 2011

Goolam E. Vahanvati, Rupesh Kumar, Anand Kannan and B.V. Balaram Das for the Petitioner.

ORDER

Delay condoned.

Liberty is given to the Department to move the High Court pointing out that the Circular, dated 9-2-2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income-tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto. For that purpose, liberty is granted to the Department to move the High Court in two weeks.

The special leave petition is, accordingly, disposed of.

nn

DTAA with Singapore Amended

SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION
AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION
AND PREVENTION OF FISCAL EVASION WITH SINGAPORE - SECOND
PROTOCOL AMENDING SAID AGREEMENT
NOTIFICATION NO. 47/2011 [F. NO. 500/139/2002-FTD-II], DATED 1-9-2011- see attachment

Circular On Monetary Limits For Filing Appeals Applicable Prospectively: CBDT

Government of India
Office of the Director of Income-tax (Legal & Research)-I
3rd Floor, Drum Shape Building, I P Estate, New Delhi – 110002
Phone: 2337 8302 Fax: 2337 8826

No. DIT (L&R) –I/SLP/393/2011/4589 Date: 02/09/11

To
All Chief Commissioners of Income-tax
All Directors General of Income-tax
Sir / Madam,

Sub Observations of Hon'ble Apex Court- Summary dismissal of departmental appeal by Delhi High Court by retrospective application of monetary limits of tax effect revised by CBDT Inst No 3 of 2011 – filing of review petition in High Court – reg


Kindly refer to the above.

2. In a large number of cases Hon'ble Delhi High Court has summarily dismissed the appeals filed by the department prior to 09/02/11 on the ground that the tax effect involved was less than the revised monetary limits of tax effect involved prescribed by CBDT Instruction No 3/2011 dtd 09/02/11.


3. As per Instruction No 3/2011 the revised monetary limit was applicable only for the appeals filed on or after 09/02/11 ie the date of issue of Instruction. As per para 11 of the Instruction, it was clarified that the appeals filed earlier would be governed by the old instructions operative at the time of filing.

4. On this issue SLP was filed in Supreme Court and one case namely Surya Herbal came up for hearing before the Hon'ble Supreme Court on 29/08/11. The order passed by the Hon'ble court in that case in SLP(C) CC No 13694 of 2011 is enclosed herewith. The Supreme Court has directed that review petition be filed in High Court within two weeks. In such cases the attention of the High Court may be drawn to the observations of Supreme Court with a prayer not to apply the Instruction No 3/2011 ipso facto in respect of appeals filed prior to 09/02/11.

5. In view of the above, the Board desires that in all such cases (including the cases in which proposal to file SLP has been sent to Directorate of Legal & Research) immediate steps be taken to file review petition in High Court pointing out the observations of Supreme Court. The officers may be advised not to send any proposals henceforth to file SLP in such cases.

Yours faithfully
(R. K. Gupta)
Director of Income-tax (L&R)-I
New Delhi