Date for filing the ST-3 return, for the period from October, 2012 to March, 2013

Date for filing the ST-3 return, for the period from October, 2012 to March, 2013 has been extended from 25th April, 2013 to 31st August, 2013. Order No. 03/2013-ST, [F.No.137/99/2011-Service Tax], dated 23-04-2013.

EPF Rate for 2012-13

Government notifies Employee Provident Fund rate for 2012-13 at 8.5%. Those who settled or transferred their accounts in last 14 months to approach Provident Fund department for balance 0.25%.

Reopening not valid

Reopening not valid if reasons silent on quantum of escaped tax under Income Tax Act. Allahabad High Court, Mahesh Kumar Gupta.

CBEC clarifies certain issues on Service Tax Amnesty Scheme

CBEC clarifies certain issues on Service Tax Amnesty Scheme

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME - CBEC CLARIFIES CERTAIN ISSUES – MERE PENDENCY OF LETTER SEEKING GENERAL INFORMATION NOT AN IMPEDIMENT TO PERSON SEEKING THIS SCHEME

CIRCULAR NO. 169/4/2013-ST [F.NO.B1/19/2013-TRU], DATED 13-5-2013

The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect upon enactment of the Finance Bill, 2013 on the 10th May, 2013. The Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to bring into effect the Scheme. Some references have been received seeking clarification as regards the scope and applicability of the Scheme.

2. The issues have been examined and clarifications thereto are as follows:

S. No.	Issues	Clarification
1	Whether a person who has not obtained service tax registration so far can make a declaration under VCES?	Any person who has tax dues to declare can make a declaration in terms of the provisions of VCES. If such person does not already have a service tax registration he will be required to take registration before making such declaration.
2	Whether a declarant shall get immunity from payment of late fee/penalty for having not taken registration earlier or not filed the return or for delay in filing of return.	Yes. It has been provided in VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made thereunder.
3	Whether an assessee to whom show-cause notice or order of determination has been issued can file declaration in respect of tax dues which are not covered by such SCN or order of determination?	In terms of section 106 (1) of the Finance Act, 2013 and second proviso thereto, the tax dues in respect of which any show cause notice or order of determination under section 72, section 73 or section 73A has been issued or which pertains to the same issue for the subsequent period are excluded from the ambit of the Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme.
4	What is the scope of section 106(2)(a)(iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106 (2) (a)(iii) for rejection of declaration under the said section?	Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made thereunder, and such inquiry or investigation is pending as on the 1st day of March, 2013. The relevant provisions, beside section 14 of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act, 1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows,- (i) Section 72 of the Act envisages requisition of documents and evidences by the Central Excise Officer if any person liable to pay service tax fails to furnish the return or having made a return fails to assess the tax in accordance with the provision of the Chapter or rules made thereunder. (ii) Rule 5A of the Service Tax Rules, 1994 prescribes for requisition of specified documents by an officer authorised by the Commissioner for the purposes specified therein. The provision of section 106(2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of any of the above stated statutory provisions and the inquiry so initiated against the declarant is pending as on the 1st day of March, 2013. No other communication from the department would attract the provisions of section 106(2)(a)(iii) and thus would not lead to rejection of the declaration.

3. Trade Notice/Public Notice may be issued to the field formations and tax payers.

No penalty on gift of Resurgent India Bonds from Non Relative NRI under Income Tax Act.

No penalty on gift of Resurgent India Bonds from Non Relative NRI under Income Tax Act.
In the Income Tax Appellate Tribunal, Indore Bench, Indore, Smt.Sangeeta Rathi.

President Assent to Finance Bill 2013

Finance Bill gets enacted as Act No.17 of 2013; President gives assent on 10^th May,2013

Constitution Amendment Bill 2011

revised E-TDS Fee

Revised filing fee for E-TDS/TCS, Form 24G & AIR at TIN-FCs: 0100 records: Rs 35, 100- 1000 records: Rs 200 and more than 1000 records: Rs 650 (inclusive of ST).

S. 40(a)(ia) TDS: Special Bench verdict in Merilyn Shipping is not good law

S. 40(a)(ia) TDS: Special Bench verdict in Merilyn Shipping is not good law

The assessee, engaged in the business of transport contractor and commission agent, incurred expenditure of Rs. 8.74 crores on payment to contractors where no TDS was deducted. The AO & CIT(A) held that the expenditure had to be disallowed u/s 40(a)(ia). On appeal, the Tribunal, relying on Merilyn Shipping & Transports 146 TTJ 1 (Viz) (SB) held that as the said amount had already been paid and was not "payable" as of 31st March, the disallowance u/s 40(a)(ia) could not be made. On appeal by the department to the High Court, HELD reversing the Tribunal:

In Merilyn Shipping 146 TTJ 1 (Viz) (SB) the majority held that as the Finance Bill proposed the words "amount credited or paid" and as the Finance Act used the words "amounts payable", s. 40(a)(ia) could only apply to amounts that are outstanding as of 31st March and not to amounts already paid during the year. This view is not correct for two reasons. Firstly, a strict reading of s. 40(a)(ia) shows that all that it requires is that there should be an amount payable of the nature described, which is such on which tax is deductible at source but such tax has not been deducted or if deducted not paid before the due date. The provision nowhere requires that the amount which is payable must remain so payable throughout during the year. If the assessee's interpretation is accepted, it would lead to a situation where the assessee who though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of the year. There is no logic why the legislature would have desired to bring about such irreconcilable and diverse consequences. Secondly, the principle of deliberate or conscious omission is applied mainly when an existing provision is amended and a change is brought about. The Special Bench was wrong in comparing the language used in the draft bill to that used in the final enactment to assign a particular meaning to s. 40(a)(ia). Accordingly, Merilyn Shippingdoes not lay down correct law. The correct law is that s. 40(a)(ia) covers not only to the amounts which are payable as on 31th March of a particular year but also which are payable at any time during the year.

Post Budget changes in Custom and Excise Duty rate

Post Budget changes in Custom and Excise Duty rates w.e.f. 08.05.2013[Notification Nos 16/2013-Central Excise,25/2013-Customs and 26/2013 –Customs, all dated 8th May, 2013 have been issued on 08.05.2013]

Amendment to Abatement Notification on Construction Complex Service

Note on Change in Abatement in Construction Complex Service

Abatement Notification No.02/2013 dt.01/03/2013 has been amended.

To avail the abatement of 75% in the case of Construction of Complex Service both the following conditions to be satisfied:

1.in carpet area of the unit is less than 2000 square feet; and

2.the amount charged for the unit is less than rupees one core

Security Service Service tax

Security services used for securing office premises are eligible as input service under Service Tax Act. [CESTAT Bangalore bench, C. Cubed Solutions (P) Ltd.]

e Filing of Tax Audit Report Mandatory

Audit report to be filed electronically; threshold limit for e-filing of return reduced to Rs. 5 lakhs; return can't be filed in ITR-1 if assessee earns exempt income which exceeds 5,000.

Income-tax (3rd Amendment) Rules, 2013 redefines the conditions and eligibility to choose from a variety of Income-tax return forms. In addition, certain important amendments are also being brought in, which are as follows:

1) Return in ITR 1 can't be filed if assessee incurs losses under the head 'Income from other sources'.

2) Return in ITR 1 can't be filed if assessee claims tax relief or has any income which is exempt under Chapter III. i.e. section 10, 10A, 10AA, etc.

3) Return in ITR 4S can't be filed if assessee claims tax relief or has any income which is exempt under Chapter III. i.e. section 10, 10A, 10AA, etc.

4) Mandatory e-filing of audit reports.

5) Mandatory e-filing of return if income exceeds Rs. 5,00,000 or if assessee claims tax relief.

No TAN for immovable property purchase

Finance Bill 2013 amendment: No need for buyer to obtain TAN to deduct tax from payment made for purchasing immovable property of more than 50 lacs.

5% TDS in Long Term Infra bonds

Finance Bill 2013 amendment of Sec 206AA: TDS normal rate of 5% on interest on long-term infrastructure bonds to NRI even if he does not have PAN.

TCS on gold

W.e.f. 01-06-2013, TCS @ 1% applicable on cash purchase of more than Rs 2 lacs of coins or other articles of upto 10 grams also which were till now exempt.

Section 12A

Six month time limit for disposal of trust registration application is directory under Section 12A of the Income Tax Act. [High Court of Madras Sheela Christian Charitable Trust].

Central govt DA

Dearness allowance (DA) enhanced for Central Government employees with effect from 01.01.2013 from 72% to 80%.[Notification No. 1(2)/2013-E-II(B) Date: 25.04.2013]

Amendments to Finance Bill 2013

The Finance Bill 2013 has been passed by the Lok Sabha today (30.04.2013) after incorporating several important amendments. Among the important amendments is the proposed insertion of sub-section (3) to s. 252 to provide that the Central Government may inter alia appoint a person who is a sitting or retired Judge of a High Court as the President of the Tribunal

NO ST on CHIT

ST : Notification No.26/2012-ST dated 20-6-2012 quashed

ST : In a chit business, the subscription is tendered in any one of the forms of 'money' as defined in section 65B(33). It would, therefore, be a transaction in money. So considered, the transaction would fall within the exclusionary part of the definition of the word 'service' as being merely a transaction in money. This would be the result if the argument that the exclusionary part of the definition in clause (a) of section 65B(44) is considered to have been enacted ex abundant cautela; if the argument based on Explanation 2 to section 65B(44) read with the exclusionary part of the definition is accepted as correct, even then the services rendered by the foreman of the chit business for which a separate consideration is charged, not being an activity of the nature explained in the said Explanation, would be out of the clutches of the definition. Either way, there can be no levy of service tax on the footing that the services of a foreman of a chit business constitute a taxable service

Coaching Institute as trust

Coaching institute cannot be treated and registered as a charitable institution under Income Tax Act. [ITAT Cochin Bench M Star Charitable Society]