Tax Guru

Maharashtra Govt Budget gives relief to small professional taxpayers; hikes VAT

Jun 8, 2009 MVAT

In its recent Budget Maharashtra State Govt. And its Finance Minister offered a mixed bag for the industry, trade and individuals subjected to professional tax. Keeping in mind not the economic slowdown but the forthcoming State Assembly polls in October, the Finance Minister, Mr Dilip Walse Patil has announced exemption of salary upto Rs 5000 from professional tax and also introduced an amnesty scheme for professional taxpayers. This scheme will come into force from July this year.

For small dealers the Minister announced a simplified VAT refund scheme for refund below Rs five lakh. It is hoped that the computerisation of the VAT Department may streamline the procedures for refund which will help all industries.

However, what may pain the industry is the hike in the VAT rate for goodies like high-end cars, liquor, cigarettes and electronic goods. The VAT rate on goods like mobile phones, cordless phones, video phones, video and digital cameras has been hiked from 4% to 12.5%.

Liquor has seemingly borne the brunt of the Minister as the the sales tax rate has been hiked from 20% to 25% on IMFL and imported both. The State Excise duty on IMFL is up from Rs 160 per litre to Rs 180 per litre. Tobacco is another product which could not have expected any favour from the Minister and the VAT in its case except bidi, has been hiked from 12 % to 20%.

However some of the mass goods like energy saving and medical equipment will now attract 4% tax in place of 12.5%. To promote non-conventional energy usage, the Minister has exempted from tax solar energy goodies like solar panels, solar heaters and solar cookers. Duty on CFL has been reduced from 12.5% to 4%.

For the services sector, the Minister has reduced the tax rate from 8% to 5% on restaurants and hotels upto three-star ratings. To give incentive to intimation jewellery industry, the VAT rate has been reduced from 4% to 1%.

To generate some revenue the Minister has doubled the VAT rate on contract for advertisement, rights of telecasting films and copy rights. At present, the stamp duty is levied at the rate of Rs. 2.50 per Rs 100 value of the contracts.

On the motor vehicle tax front, although the Minister did not touch the 7% rate for four-wheelers upto Rs 10 lakh but the rate has been hiked to 8% for vehicles upto Rs 8 lakhs and 9% for above Rs 20 lakh.

Experts have meanwhile criticised the Budget for no proposal on Octroi.

Tags: advertisements, amnesty scheme, cookers, Excise, Excise Duty, Exemption, Professional tax, Refund, refund scheme, sales tax rate, stamps, Vat, vat rate, vat refund

Highlight of Maharashtra State Additional Budget 2009

Jun 4, 2009 MVAT

As Maharashtra braces up for polls and celebrates its golden jubilee year, it tabled a revenue-deficit budget for the year 2009-10 on 4th June 2009 that focuses on infrastructure development and social sector. The major highlights and changes proposed are noted below :

• Penalty for late returns under MVAT Act reduced to Rs.5,000/- from Rs.10,000/-.

• Exemption from Profession Tax for salary income upto Rs.5,000/- i.e increase from Rs.2,500/-.

• Simplified VAT Refund Scheme for the dealers with refund below Rs.5 Lakhs.

• Relief to Tax Payers not yet enrolled under Profession Tax.

• Amnesty Scheme under Profession Tax for transport permit holders.

• Tax Concessions and reduction in Taxes -
  - Tax reduced from 8 percent to 5 percent for Hotel dealers under Composition Scheme.
  - Tax concession to timber upto 31st March 2010.
  - reduction in tax rate on Cotton Ginning and Pressing machinery
  - Tax reduced on Solar energy devices and CFL
  - Tax reduced on Plastic mats and Agarbatti.
  - Domestic LPG stoves, imitation jewellery, Shikakai and Ritha to have lesser rate
  - Reduced tax on composting machines
  - Reduced rate of tax on Medical Equipment

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Know If your Income Tax Refund been returned undelivered

May 27, 2009 Income Tax

MUMBAI: Salaried taxpayers who have not received refunds for assessment years 2003-04 to 2006-07 can find out whether their refunds have been returned undelivered from this link:

http://www.incometaxindia.gov.in/CCIT/refundsearch.asp

You can get the information from the menu `undelivered salary refund management system’, using your PAN number.

If any refund has been returned undelivered due to a change in address, the taxpayer can enter the present address and the refund will be sent to the new address.

Tags: Assessment, income, Income Tax Refund, mumbai, PAN, pan number, Refund, Return, salary, tax, taxpayers

Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009

May 22, 2009 SEBI

Notification of SEBI (Investor Protection and Education Fund) Regulations, 2009

SEBI has notified the SEBI (Investor Protection and Education Fund) Regulations, 2009, on May 19, 2009, with a view to strengthening its activities for investor protection. 

The salient features of these regulations are as follows: 

1. The Fund shall be used for the protection of investors and promotion of investor education and awareness, in ways like:- 

(a) educational activities including seminars, training, research and publications, aimed at investors; 

(b)    awareness programmes through media – print, electronic, aimed at  investors; 

(c)     funding investor education and awareness activities of investors’ associations recognized by the Board; 

(d)    aiding investors’ associations recognized by the Board to undertake legal proceedings in the interest of investors in securities that are listed or proposed to be listed.

1. The Board shall constitute a seven-member advisory committee for recommending investor education and protection activities as mentioned above, to the Board. This Committee would comprise of both SEBI officials and outside experts. 

1. These regulations also provide for suitable amendment to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997, to provide for one of the sources of income for the IPEF.

The entire text of these regulations is as follows:-

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New Income Tax Circular on new TDS and TCS payment and information reporting system

May 21, 2009 Income Tax

NEW TDS AND TCS PAYMENT AND INFORMATION REPORTING SYSTEM- NOTIFICATION NO. 858(E), DATED 25thMARCH, 2009 PUBLISHED IN OFFICIAL GAZETTE

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Want Income Tax Refund Faster – Opt for ECS

May 21, 2009 Income Tax

During 2007, the then Finance Minister P. Chidambaram launched an innovative scheme called as Refund banker Scheme. It was first introduced in New Delhi and Patna. Since then, the scheme has been extended to other cities in India. Here, we take a look at the Refund Banker Scheme, its pros and cons. 

Refund Banker Scheme:-A refund banker is a scheme, in which a particular bank has been sanctioned to issue refunds on behalf of the income tax department. The State Bank of India  is the authorised banker of this scheme. The refunds are issued in the form of cheques/drafts or Electronic Clearing service (ECS).

Reason for Introduction of Scheme:The aim of launching this scheme was to speed up the refund process. After taking over as the Finance Minister, Chidambaram has been trying to make the refund process more transparent and quicker. With introduction of this scheme IT refunds will be dispatched by the bank within 3 days of receiving refund intimation from the income tax department.

Benefit :If you are an individual, you will get your refunds quicker. In case, you have opted for ECS mode of payment, you can get the credit in your bank account within 24 hours. If you are a corporate, you cannot avail of this facility. But in case, if the scheme is extended to corporates, faster refund means more cash to use for business purpose or cash for investment purposes.

With the launch of refund banker system, the finance minister has already clarified his intention of speeding up the refund process. So you can expect your refund very quickly, unlike the olden days, when it would take years to get your refund. Also, there are plans to extend this scheme to other banks, besides SBI. Once it happens, the refund process will speed up further.

Processing of Refund Cheque:-Once your refund is approved by the income tax department, your refund details are sent to the SBI. Under this scheme, the cash management department of SBI processes the refund, within 3 days of receiving  your details.  After this, they prepare your cheque/draft and dispatch it to your address. If you want to speed up the process further, you can opt for ECS, as you don’t have to wait for the cheque to arrive and again for it to clear. Only after your payment is disbursed, will the bank claim the amount refunded from the income tax. This will also help in doing away with the government bureaucracy, thus speeding up the refund process.

Drawback: Yes, there are a few drawbacks of this scheme. For one, you may close the bank account, which you have given to the income tax for claiming the refund. If that happens, the onus of updating your details lies on you. Moreover, your address may change before you receive your refund. 

So it becomes imperative you keep the income tax department updated on your change in status. Also there can be mistakes in printing your name and/or account number on the cheque/draft. In case of ECS, your amount may get transferred to the wrong account number.

Refund Banker Scheme is a very good scheme. Yet it is imperative for the income tax department as well as SBI to follow the scheme very meticulously, to prevent any misuse of the scheme.

Tags: cheques, drawback, ECS, Electronic Clearing Service, Income tax department, Income Tax Refund, Refund, refund cheque, state bank, state bank of india, tax

Claim Interest on Income Tax Refund for delay

May 19, 2009 Income Tax

If you’re a salaried individual working in any organisation in India, you know the irritation that overcomes you when a mail arrives asking you to declare you proposed investments for the year. You invariably end up putting down a very arbitrary selection of investments when the last day for submission dawns. 

But this thoughtless could eventually lead to a lot of unnecessary anxiety. With your company deducting a lot more tax than they actually need to, you’re most likely to be eligible for a tax refund.

Unfortunately, a tax refund is an extremely tedious process, fraught with delays, particularly if you’re in one of the cities which doesn’t have an electronic clearance system (ECS) or if you don’t know which officials to approach. 

DELAYS AREN’T DENIALS 

Before getting into the actual process, it is important to know some of the reasons that may have caused the delay.

“If your bank account details or your PAN number is entered incorrectly in the form or you end up filing your tax in the wrong ward/circle, then the chances for delay are high,” says Neeru Ahuja, partner, Deloitte.

Tax authorities have especially been known to cause delays in cases where the amount to be refunded exceeds Rs 5 lakh, citing additional approvals as the reason. According to Sonu Iyer, partner, Ernst & Young, delay could also be caused if litigation is pending against the refund claimed or against any other issues with higher level of authority. 

“For instance, if an individual is in appeal with Commissioner of Income Tax (Appeals) against an order passed by the assessing officer (AO) level, in our experience, the refund is generally not issued by the AO even though there is nothing in the law to this effect,” says Iyer.

REMEDIAL ACTION 

Moving on to the actual process. In ideal circumstances, you should be able to trace the status of your refund online at the NSDL website using your PAN number and entering the year for which you are to get the refund.

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Tags: acknowledgment, bank account details, department, electronic clearance, investments, money, nsdl, pan number, Refund, RTI, Tax Refund

Concessional ticket to travel Agents cannot be termed as commission

May 17, 2009 Income Tax Case Laws

SUMMARY OF CASE LAW

The relationship between the assessee-airlines and the travel agent is one of principal and agent; the supplementary commission which is the amount retained by the travel agent is commission within the meaning of section 194H read with Explanation (i) to the said section; the difference between the full value of the ticket and the concessional ticket cannot be termed as `commission’ because the concessional ticket may have been given to the travel agent for carrying out his function as an agent; however, the transaction between the two is that of principal to principal.

CASE LAW DETAILS
Decided by: HIGH COURT OF DELHI, In The case of:  CIT v. Singapore Airlines Ltd. , Appeal No. :  ITA Nos. 306/2005 & 123/2006, Decided on: April 13, 2009

RELEVENT PARAGRAPH

1. In these batch of appeals, which have been preferred by the Revenue, there are three issues which require consideration of this Court.

12. In order to come to a definite conclusion whether section 194H of the Act would be applicable to the assessee-airline in respect of transaction, in issue, we propose to first look at the scope and ambit of section 194H of the Act and then analyse the transaction as to whether it falls within the purview of the said Section. In this context, it would be necessary to extract the relevant portions of Section 194H of the Act.

The said provision reads as under:-

“194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft of by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten percent:

Provided xxxx

Provided xxxx

Provided xxxx

Explanation. – For the purposes of this section, -

(i) “Commission or Brokerage ” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of nother person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

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ICAI written CBDT on Undue hardship faced by assessees on account of delay of refund in scrutiny cases in respect of A.Y. 2007-08

May 15, 2009 Income Tax

ICAI – Undue hardship faced by assessees on account of delay of refund in scrutiny cases in respect of A.Y. 2007-08 

May, 15th 2009 
No.DTC/2009- 10/REP-2
13th May, 2009

Yours sincerely
CA. UTTAM PRAKASH AGARWAL 

Tags: CBDT, current market, department of revenue, direct taxes, electronic returns, finance government, ICAI, market scenario, ministry of finance, ministry of finance government of india, Refund, scrutinies, Scrutiny, tax, undue hardship, working capital

Now Expect Income Tax Refund in Four Months

May 11, 2009 Income Tax

Tags: accountants, bank account details, central servers, collections, data migration, Income tax department, Income Tax Refund, MAGNETIC INK CHARACTER RECOGNITION, MICR, Refund, Tax Refund, tax refunds, taxpayer tax, TDS