Income Tax |
SC Rejects Govt claim of Service Tax on Shipowners |
| The Supreme Court has dismissed the Center’s plea challenging the Bombay High Court ruling that restrained it from levying service tax from Indian National Ship owners Association for services received abroad between March 2002 and April 2006. The high court had held that services received by vessels and ships outside India who are not residents of India or are outside India cannot be taxed. |
New Perk rules on ESOPS |
| Employee Stock Options Plans (ESOPs) and its different variants like Employees Stock Purchase Plans, Stock Appreciation Rights, Stock Awards, etc, have been used by employers to attract, retain and motivate employees. ESOPs have been popular primarily in the knowledge-based industries like IT, biotechnology, etc. However, in the recent past, they have gained prominence even in traditional industries like manufacturing. |
To avoid Higher Tax Quote PAN in TDS Transactions |
| Get ready to cough up higher tax upfront from the next fiscal in case you do not quote the Permanent Account Number (PAN) in transactions subject to tax deduction at source. “Tax at the higher prescribed rate or 20% will be deducted on all transactions liable to TDS where the PAN of the deductee is not available,” said the finance ministry. |
Exporters: Switch to Turnover Tax in Lieu of Income Tax |
| Exporters have proposed switching over to a turnover tax in lieu of income tax to reduce their administrative burden. In its pre-budget memorandum to the finance ministry, exporters’ body FIEO said that such a tax will dispense with all other direct taxes and exemptions including depreciation. The tax can be collected through banks at the time of receipt of foreign exchange to plug any leakage and will reduce cost of collection. |
From 1st Apr ‘10 TDS on Non-PAN Transactions is 20% |
| A new provision relating to tax deduction at source (TDS) will come into effect from April 1, 2010 whereby all transactions where the deductee’s permanent account number (PAN) is not available will be charged at a higher, prescribed rate of 20%, the Central Board of Direct Taxes (CBDT) has stated in a notification. The new provision applies to non-residents as well. |
Reopening U/s 147 on change of Opinion is not Permissible |
| In CIT vs. Kelvinator of India Ltd. 256 ITR 1 the Full Bench of the Delhi High Court was considering a case of reopening u/s 147 within 4 years from the end of the assessment year. It was held that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. On appeal by the department to the Supreme Court, HELD dismissing the appeal. |
Shares Capital Gains is not Business Income |
| Capital Gains on sale of shares treated as investment income in earlier years can’t be treated as business income in subsequent years if there is no change in the facts and circumstances in the case of the assessee. This was the gist of a recent Bombay High Court order dismissing an appeal against a tribunal order in the case of Commissioner of Income Tax versus assessee Gopal Purohit. |
SC Pronounces a Landmark ruling in case of Oracle India |
| Last week, the Supreme Court pronounced a landmark ruling in the case of Oracle India holding that the process of duplication of software from master copy tantamount to ‘manufacture’. The Apex court allowed Oracle much awaited relief with respect to a tax holiday claim available for new undertakings engaged in manufacture and processing of articles and things. |
Right to Set-Off Loss is a “Vested Right” |
| In AY 2002-03, the assessee suffered a long-term capital loss. U/s 74(1), such loss could be carried forward and set off against all capital gains including short-term capital gains. S. 74 was amended in AY 2003-04 to provide that long-term capital loss could only be set-off against long-term capital gains. When the assessee claimed a set-off in AY 2004-05 the question arose whether the amended law should apply or the un-amended law. HELD deciding in favour of the assessee |
FM likely to keep the Corporate Tax Rate unchanged at 30% |
| The finance ministry is likely to keep the corporate tax rate unchanged at 30%, as it faces stiff resistance from companies to the draft direct tax code’s proposal to cut the rate to 25% and remove all exemptions. The industry prefers the current system where the effective corporate tax rate is only about 20% due to various exemptions, he said requesting anonymity. |
Inter-Company Loans under I-T Scanner |
| The Income Tax (I-T) Department has decided to put an end to the contentious issue of taxation of deemed dividend or inter-company loans given to common shareholders of unrelated Companies. The department proposes to amend the I-T Act in this regard. Inter-company loans, known as ‘deemed dividends’, are used by companies to route dividend in the form of loans to companies which have common shareholders — both in the company giving the loan and the one borrowing it. |
Company Law |
Separate sets of Accounting Standards U/s 211(3c) of the Co’s Act |
| There will be two separate sets of Accounting Standards u/s Section 211(3C) of the Companies Act, 1956. First set would comprise of the Indian Accounting Standards which are converged with the IFRSs which shall be applicable to the specified class of companies. The second set would comprise of the existing Indian Accounting Standards and would be applicable to other companies, including Small and Medium Companies (SMCs). |
Sales Tax |
MP Govt may Increase the Upper Slab of VAT to 15 % |
| Stung by the Centre’s indication to compensate half of what was promised as full compensation against phasing out of Central Sales Tax (CST), the Madhya Pradesh government may increase the upper slab of value added tax to 15 per cent from the existing 12.5 per cent before goods and service tax (GST) comes into effect. FM has asked the empowered committee of state finance ministers to work out a package to share 50 per cent of the CST losses. |
Traders Opposes VAT Hike & asks for a Roll Back |
| The consumers are already burdened with price rise and the state government’s present hike in VAT on a few important goods has put more burden on them, said Gaddam Subba Rao, president, The Vijayawada Chamber of Commerce and Industry. He feels that the hike is a punishment for honest trader and it also leads to more evasion of tax and corruption. |
ICAI |
PE–II, PCE & IPCE Results to be Declared on 29th Jan ‘10 |
| The results of the Chartered Accountants PE–II, PCE and IPCE Results held in November, 2009 are likely to be declared on Friday, the 29th January, 2010 around 2 P.M. and the same as well as the merit list on all India basis will be available on the following website: http://www.caresults.nic.in |
Declaration of the Election Results to the Twenty First Council |
| With the notification in the Gazette of India (Extraordinary) dated 18th January, 2010 of the names of candidates declared elected under the Chartered Accountants (Election to the Council) Rules, 2006, the Twenty-First Council of the Institute shall be constituted, in accordance with the provisions of the Chartered Accountants Act, 1949. Click here to download PDF file of ICAI Gazate of India |
Announcement for Chartered Accountants Examinations – May 2010 |
| The next Professional Education–II, Professional Competence Course (PCE), Integrated Professional Competence Course (IPCE) and Final Examinations of the Institute will be held from 3rd May to 17th May, 2010 The last dates for receipt of application forms are 26th February,2010 (without late fee) and 5th March, 2010 (with late fee of Rs. 500/-). Following are the Centres: |
Registration Number of the firm required in the Audit Reports |
| Include, in addition to the other requirements relating to signature on the audit report, as prescribed under the relevant Standard on Auditing, the registration number of the firm as allotted by ICAI, in the audit reports signed by them; and Ensure that the resolution passed by the company regarding appointment of the statutory auditor of the company under section 224 of the Companies Act, 1956, also contain the registration number of the firm of the auditor(s) with the ICAI. |
Rajasthan HC Order Copy on ICAI Results |
| Rajasthan High Court Has Vacated the Stay Order for declaration of Council Results. Rajasthan High Court directed to recount votes after considering the postal ballots. Click here to get the Copy of the Order. |
Final & CPT Results Declared |
| CHECK RESULTS [ Common Proficiency Test Results] [Final Results] [Final (New Course) Results] CHECK MERIT LIST [ Common Proficiency Test Results ] [Final Results] [Final (New Course) Results] |
Customs |
Custom Notification No. 5/2010 |
| G.S.R.43(E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 146/94-Customs, dated 13th July, 1994 |
GST |
How will Carbon Credits be Taxed under GST? |
| The Government should implement the GST regime with defined sharing arrangement between the State and the Centre, thereby protecting the interest of the State in generating revenue. The discussion paper has not come out with any specific definition whether it is to be considered as goods or services for the purpose of levying a tax. |
Service Tax |
Problems in Availing Refund of excess credit in Service Tax |
| CENVAT Credit Rules, 2004 permit taking of credit of inputs and input services which are used for providing output services or output goods. In order to zero-rate the exports, Rule 5 of CENVAT Credit Rules, 2004 provides that such accumulated credit can be refunded to the exporter subject to stipulated conditions. Notification No. 5/2006-CE (NT) dated 14.03.2006 provides the conditions, safeguards and limitations for obtaining refund of such credit. |
12 % Service Tax Rate may be Restored & Excise Duty could be Increased |
| The government may take the first step towards fiscal consolidation in Budget 2010-11 by partially rolling back tax cuts given to the industry last year. The service tax rate may be restored to 12 per cent, while excise duty could be increased marginally. According to government sources, all options were being discussed and a final decision would be taken by Finance Minister Pranab Mukherjee in consultation with Prime Minister Manmohan Singh. |
General |
Govt plans to raise Limit of Gratuity Payment |
| The government said there was “near unanimity” among all stakeholders to raise the ceiling of payment on gratuity for private sector employees from Rs 3.5 lakh to Rs 10 lakh and hoped a decision in this regard will be taken before the forthcoming Budget session. The Sixth Pay Commission recommendation had raised the limit for Central government employees. |
Duty Entitlement Passbook Scheme may get Scraped |
| One of the most favoured duty reimbursement schemes among exporters – the Duty Entitlement Passbook (DEPB) scheme – is likely to be scrapped, as the government gears up to introduce the Goods and Services Tax (GST) from April 1. The scheme, which was extended till December 31 in the Foreign Trade Policy 2009-2014, is widely viewed as one of the best incentive schemes by exporters. |
‘In-Person’ verification Mandatory for Trading Account: SEBI |
| The Securities Exchange Board of India (Sebi) has said that ‘in-person’ verification of clients is a mandatory requirement for opening account by a depository participant (DP). This will hold good for opening trading account by a stock broker and vice versa, if the stock broker and DP is the same entity or if one of them is the holding or subsidiary company of the other, said Sebi. |
RBI Reference Rate for US $ and Euro – 22nd January 2010 |
| The Reserve Bank of India’s Reference Rate on January 18, 2010 for the US Dollar was Rs. 45.66 and for Euro was Rs. 65.64, and by weekend, i.e. on January 22, 2010 the Reference Rate for the US Dollar was Rs. 46.17 for Euro was Rs. 65.27. |
Week 18th to 23rd Jan '10 Highlights
January 23rd, 2010
