CBEC on ST on Restaurants

Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Tax Research Unit North Block, New Delhi CIRCULAR NO 173/8/2013-ST., Dated: October 7, 2013 To Chief Commissioners of Central Excise and Customs (All), Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit), Commissioners of Service Tax (All) Commissioners of Central Excise (All), Commissioners of Central Excise and Customs (All). Madam/Sir, Subject: Restaurant Service- clarification -regarding As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST. This has become operational on the 1 st of April, 2013. 2. In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows: Doubts Clarifications 1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as 'specified restaurant') attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules. 2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax. 3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion. 3. Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows. F.No.334/3/2013-TRU (S. Jayaprahasam) Technical Officer, TRU

Service Tax Return Due Date -25-10-2013

  Service Tax Return (ST-3) for the period April -September' 13 is now available in ACES for e-filing by the assesses in both offline and online version. The last date of filing the ST-3 return for the said period is 25th October, 2013. The assesses can file return either online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from 'DOWNLOADS' Section of ACES website. For details on how to e-file in ACES or any further information/assistance, assessees may read the Instructions given in the return form and the FAQs under 'Help' Section of the ACES website http://www.aces.gov.in/ (https://www.aces.gov.in) or contact their jurisdictional Service Tax Officer.

164 Joint Commissioners of Income tax Appointed in India

Dear Members, CBDT Order On Appointment Of IRS Officers As Joint Commissioners The CBDT has issued Order No. 186 of 2013 dated 01.10.2013 stating that the President has appointed 164 officers of the India Revenue Service (Income Tax) to the grade of Joint Commissioner of Income-tax purely on Ad-hoc basis in the pay scale of Rs. 15,600-39,100 + 7,600/- with immediate effect and until further orders. We wish all the appointees good luck in their new posting.

TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form26AS

TDS Credit must be given even if TDS Certificate is not available/ entry is not shown in Form26AS

Citicorp Finance (India) Ltd vs. ACIT (ITAT Mumbai)

The assessee claimed credit for TDS which was denied by the AO on the ground that the claim did not match the entries shown in Form No. 26AS and that there was a discrepancy. On appeal, the CIT(A) held that the assessee would be entitled to credit to the extent shown in the computer system of the department. On further appeal by the assessee to the Tribunal HELD:

The AO is not justified in denying credit for TDS on the ground that the TDS is not reflected in the computer generated Form 26AS. In Yashpal Sahwney 293 ITR 539 the Bombay High Court has noted the difficulty faced by taxpayers in the matter of credit of TDS and held that even if the deductor had not issued a TDS certificate, still the claim of the assessee has to be considered on the basis of the evidence produced for deduction of tax at source. The Revenue is empowered to recover tax from the person responsible if he had not deducted tax at source or after deducting failed to deposit with Central Government. The Delhi High Court has in Court On Its Own Motion Vs. CIT 352 ITR 273 directed the department to ensure that credit is given to the assessee even where the deductor had failed to upload the correct details in Form 26AS on the basis of evidence produced before the department. Therefore, the department is required to give credit for TDS once valid TDS certificate had been produced or even where the deductor had not issued TDS certificates on the basis of evidence produced by assessee regarding deduction of tax at source and on the basis of indemnity bond.

HC on VCES

The Government introduced Service tax Voluntary Compliance Encouragement Scheme (the Amnesty Scheme) vide Union Budget 2013. The purpose of this Scheme is to provide for one-time waiver in respect of interest, penalty and immunity from prosecution for tax defaults (non-payment of tax) upon settlement of tax dues in a specified manner.

 In this regard, in a recent ruling of Allahabad High Court (the High Court) in the case of Anand Caterer, the High Court has held that when any taxpayer has filed an application under the Amnesty Scheme even after a demand notice/ Order has been being issued, no recovery proceedings could be undertaken until such application has been disposed off.

Reset of password ofITD website

Reset of password on ITD website with registered digital sigbature activated. Helpful for assessess who have forgot thier credentials. Happy efiling..

Income tax Department under Gujarat Region open on weekends

All Offices of Income tax Department under Gujarat Region will remain open on Saturday, 28^th September 2013 and Sunday 29^th September 2013 for accepting  Income Tax Returns and Tax Audit Reports in physical form.

Further on Monday 30^th September 2013 the same will remain open till 08.00 pm. for accepting  Income Tax Returns and Tax Audit Reports in physical form.

Audit Filling Extension-Press release

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

PRESS RELEASE

26^th September, 2013

      

          It has come to the notice of the  CBDT that may assessees who are required to file their income tax returns by September 30, 2013 are finding it difficult to upload the report of Audit electronically as prescribed under the proviso to sub-rule(2) of Rule 12 of the IT Rules for the Assessment Year 2013-14.  Therefore, the CBDT has decided to extend the time for furnishing the report of Audit electronically till October 31, 2013.  However, the assessees are required to file the report of Audit manually with the jurisdictional Assessing Officer by the prescribed due date, i.e. September 30, 2013.  The assessees are also required to file their returns of income electronically by the prescribed due date, i.e. September 30, 2013.

  

(Rekha Shukla)

Commissioner of Income Tax

(Media & Technical Policy Co-ordination)

  Official Spokesperson, CBDT

Safe Harbour Rules Finalized

Press Information Bureau 
Government of India
Ministry of Finance 

18-September-2013 15:49 IST

Safe Harbour Rules Finalized after Considering Comments of Various Stake Holders ; Rules to be Applicable for 5 Assessment Years Beginning from Assessment Year 2013-14 

            Section 92CB of the Income-tax Act provides for framing of safe harbour rules. The determination of arms length price u/s 92C or 92CA of the Act is subject to these safe harbour rules. The definition of safe harbour rule provided in section 92CB means circumstances in which the Income-tax Authority shall accept the transfer price declared by the assessee.

            The draft safe harbour rules were placed in public domain along with Central Board of Direct Taxes (CBDT) Press Release on 14.08.2013 seeking comments of various stake holders. The comments received from various stake holders have been considered and necessary modifications have been made to the draft rules. The finalized safe harbour rules are being notified separately. The salient feature of the modifications incorporated in the final safe harbour rules are:-

(i)                 The safe harbour rules shall be applicable for 5 assessment years beginning from assessment year 2013-14.

(ii)               An assessee can opt for the safe harbour regime for a period of his choice but not exceeding 5 assessment years. This option can be exercised by filing of Form 3CEFA which has been prescribed in the rules.

(iii)             In case of transactions in the nature of routine ITES and ITS activities  the  earlier ceiling of Rs 100 crore has been removed. Transactions upto Rs. 500 crore have been provided safe harbour margin of 20% and transaction above Rs.500 crore  have been provided safe harbour margin of 22% .Similarly, the ceiling of Rs. 100 crore provided for transactions in the nature of corporate guarantee has been removed. The Safe harbour would be available in case of transactions above Rs 100 crore only if the wholly owned subsidiary has been rated to be of adequate to highest safety by a rating agency registered with SEBI. The safe harbour margin for such transactions above Rs 100 crore has been reduced to 1.75% of the amount guaranteed.

(iv)             The definition of Knowledge process outsourcing (KPO) has been rationalized to provide reasonable distinction from routine business process outsourcing activity. The safe harbour operating margin has been reduced from 30% to 25%. Further the ceiling in respect of KPO transactions has been removed.

(v)               The safe harbour provisions would be available only if the assessee satisfies the eligibility conditions provided in the rules and in respect of such international transactions which are eligible for safe harbour as provided in the rules.

(vi)             The rules provide for a time bound procedure for determination of the eligibility of the assessee and the international transactions. Any rejection of the option exercised by the assessee shall be by way of a reasoned order passed after hearing the assessee. The assessee shall have a right to file an objection with the Commissioner against adverse finding regarding the eligibility. The Commissioner shall thereafter decide about the validity of the option exercised by the assessee.

(vii)           In case the action is not taken by any of the authorities within the following time lines  provided in the rules the option exercised by the assessee shall be treated as valid,:-

(a)    the reference by the Assessing Officer (AO) to the Transfer Pricing Officer (TPO) shall be made within a period of two months from the end of the month in which Form No.3CEFA is received by him;

(b)   the TPO shall pass an order determining the validity of the option exercised by the assessee within a period of two months from the end of the month in which reference from AO is received by him;

(c)    the Commissioner shall pass an order on the objection received from the assessee within a period of two months from the end of the month in which the objection has been received by him.

(viii)         Once the option exercise by the assessee is held to be valid it shall remain so for the period opted unless the assessee voluntarily opts out of safe harbour regime by furnishing a statement to this effect to the Assessing Officer.

(ix)             The assessee shall be required to submit a statement regarding the quantum of international transaction, its nature and the operating margins or rate of interest or commission for the relevant assessment years covered under the period for which safe harbour is option is exercised.

(x)               The option exercised by the assessee can be held invalid in an assessment year following the initial assessment year only if there is change in the facts and circumstances relating to the eligibility of the assessee or of the international transaction. However, such withdrawal shall be done only after providing opportunity of being heard to the assessee.  The assessee has a right to file his objection with the Commissioner, who shall after hearing the assessee determine the validity of the option.

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DSM/MJPS/ka

Alert on ITR Vs

Notification for Extension of date for receipt of ITR-Vs in CPC, Bengaluru, for the cases of AY 2012-13 and 2011-12 received in e-filed in FY 2012-13

Alert on Advance Tax

Ministry of Finance12-September, 2013 15:26 IST

Payment of Quarterly Advance Tax on or before 15th September, 2013; All Designated Branches of Authorized Banks to Function on 14th and 15th September, 2013 (Saturday & Sunday)

All designated branches of authorized banks have been asked to function on 14th and 15th September, 2013 (Saturday & Sunday) to accept advance tax payments. If any tax payer fails to pay the advance tax on 14th/15th September, 2013, then he/she can make the payment even on 16th September, 2013.  Payment of Quarterly Advance Tax on or before 15th September, 2013 by the tax payers is a statutory requirement. All such tax payers who are liable to pay advance tax must make payments in the designated branches of the banks authorized to accept tax payments.  ***** DSM/MJPS/ka  (Release ID :99304)

Draft Rules under Companies Act,2013

http://14.140.191.91/

This e-platform for receiving suggestions on draft rules under the Companies Act 2013 has been developed in a user friendly and interactive manner, and will facilitate collation and analysis of suggestions/comments received on the draft rules. Stakeholders are requested to use this platform for providing their suggestions and comments on the draft rules.

30 days left for giving Suggestions on Rules

PFA

Revised Form 15CA-15CB

Twists and turns in Form 15CA and Form 15CB – Comparison of old, new and recent changes

The CBDT has issued Twelfth Amendment Rules on August 5, 2013 vide Notification No. 58/2013 whereby it amended Rule 37BB and prescribed new Forms 15CA and 15CB. However, within a couple of weeks, the CBDT issued one more amendment to Rule 37BB in suppression of earlier notification (amendment rules). The new Forms provide for two categories (.i.e., Part A and Part B of Form 15CA) on which remittances are required to be reported. It provides that only taxable remittances (including salary or interest) are required to be reported in Form 15CA. Before the Twelfth Amendment Rules, the payers were required to submit the remittance details in Form 15CA and they were also required to obtain certificate under Form 15CB, notwithstanding whether the payee was liable to tax in India or not? Then Twelfth Amendment Rules extended some relaxation and provided immunity from obtaining certificate under Form 15CB for certain remittances. Now Fourteenth Amendment Rules provide exemption from filing of Form 15CA if remittance is not chargeable to tax in the hands of payee, it also provides immunity from obtaining Form 15CB if the taxable remittances are covered by Part A of new Form 15CA.

Statement by Dr. Raghuram Rajan on taking office on September 4, 2013

Date : 04 Sep 2013 Dr. Raghuram Rajan assumes charge as Governor, RBI Dr. Raghuram Rajan assumed charge as the 23rd Governor of the Reserve Bank of India on September 4, 2013. Prior to this, he was the Chief Economic Advisor, Ministry of Finance, Government of India and the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago's Booth School. Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund. Dr. Rajan's research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. He has co-authored Saving Capitalism from the Capitalists with Luigi Zingales in 2003. He then wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010. Dr. Rajan is a member of the Group of Thirty. He was the President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences. In January 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40. The other awards he has received include the global Indian of the year award from NASSCOM in 2011, the Infosys prize for the Economic Sciences in 2012, and the Center for Financial Studies-Deutsche Bank Prize for financial economics in 2013. Born on February 3, 1963, Dr. Rajan is married to Radhika and has two children. Alpana Killawala Principal Chief General Manager Press Release : 2013-2014/489

Customs Baggage Regulations,2013

90/2013 Dated 29-8-2013 - Customs - Non Tariff - Customs Baggage Declaration Regulations, 2013

[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. 90/2013-Customs (N.T.) New Delhi Dated the 29th August, 2013 G.S.R.     - In exercise of the powers conferred by clause (a) of section 81 of the Customs Act, 1962, the Central Board of Excise and Customs hereby makes the following regulations, namely:— 1. Short title. - These regulations may be called the Customs Baggage Declaration Regulations, 2013. 2. Extent of application. - These regulations shall apply to baggage including any package comprised therein of the passengers coming to India. These regulations will come into effect w.e.f. 1st January, 2014. 3. Method of Declaration of Baggage. - All passengers who come to India shall declare their accompanied baggage in Form I appended to this regulation. [F. No. 520/13/2013-Cus.VI] (S.C. Ganger) Under Secretary to the Government of India

CIRCULAR ON TDS MISMATCH

CBDT Instruction Regarding Unmatched TDS Challans In Form 26AS

August 31st, 2013

Pursuant to the judgement of the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273, the CBDT has issued Instruction No. 11 of 2013 dated 27.08.2013 stating that where the report by the deductor in the TDS statement are not found available in the OLTAS database resulting in TDS mismatch, the CPC(TDS)/ AOs(TDS) shall immediately issue letters to the deductors, in whose case TDS challans are unmatched, with a view to verify and correct these challans. If necessary, the deductors may be asked to file correction statements, as per the procedure laid down and necessary follow up action be taken. It has been directed that the task should be completed by 31st December 2013 for FY 2012-13 in the case of CPC (TDS) and FYs 2011-12 & earlier in case of AOs (TDS)

HUF-LLP PARTNER

SECTION 5 OF THE LIMITED LIABILITY PARTNERSHIP ACT, 2008 - PARTNERS - WHETHER HINDU UNDIVIDED FAMILY (HUF)/ITS KARTA CAN BECOME PARTNER/DESIGNATED PARTNER (DP) IN LIMITED LIABILITY PARTNERSHIP (LLP)

GENERAL CIRCULAR NO. 13/2013 [F.NO. 1/13/2012-CL-V], DATED 29-7-2013

It has come to the notice of the Ministry that some Hindu Undivided Families (HUFs)/Kartas of such families are applying to become partner/ Designated partner (DP) in LLPs and a question has arisen whether a 'HUF' or a karta can be allowed to do so. The matter has been examined in consultation with Ministry of Law.

2. As per section 5 of LLP Act, 2008 only an individual or body corporate may be a partner in a Limited Liability Partnership. A HUF cannot be treated as a body corporate for the purposes of LLP Act, 2008. Therefore, a HUF or its karta can not become designated partner in LLP.

3. This issues with the approval of Secretary, MCA

ST Return Due Date Extended

ORDER NO 4/2013-Service Tax, Dated : August 30, 2013

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1^st October 2012 to 31^st March 2013, from 31^st August, 2013 to 10^thSeptember, 2013.

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

"Difficulties have been faced by assessees in uploading the offline utilities".

F.No.137/99/2011-Service Tax

Himani Bhayana
Under Secretary (Service Tax) 
Central Board of Excise and Customs

NO TDS ON SERVICE TAX PORTION

ATDS breather on service tax portion

The Rajasthan High Court, in the case of Rajasthan Urban Infrastructure Development Project, ruled that no tax need be withheld under Section 194J on the service tax payable on professional/ technical fees.

Interestingly, the Central Board of Direct Taxes had in an earlier circular held that the scope of withholding tax under Section 194J includes 'any sum' by way of professional/ technical services, and withholding tax applies on the service tax component as well.

However, the High Court ruled that if service tax is payable in addition to professional/ technical fees under the contract, the withholding tax will be restricted to the fees, thereby highlighting that examination of contract terms is imperative.

This ruling may also be relevant in the context of other similarly worded withholding tax provisions.

Very Important Alert on e Filing of Tax Audit Report

Dear Members,

Please note that there is clear instructions from Income-tax Department wherever there is requirement in the Form to be submitted a signed copy of document by an Assessee/ CA as an attachment, upload the scanned copy of the same documents.

Please see the instruction in ITD website.

Please adhere to the instruction while e filing the Balance Sheet and Profit and Loss while uploading the tax audit report.