E-facility to view tax and computation sheet for demand raised by AO launched

Income tax Department enables e-facility to view tax and computation sheet for demand raised by Assessing Officer (AO).

Earlier when a taxpayer submitted an objection to an Outstanding Demand appearing in his case in "My Account"on e-filing portal of Income-tax Department, he was not able to view anything further except his own objection. If the demand was raised by CPC then assessee had to verify it by comparing his filed ITR with Sec. 143(1) Intimation. However, where the demand was raised by the jurisdictional Assessing officer then he had to visit the department for getting intimation under section 143(1) in the event of not getting it at communication address. During this process assessee had to face many difficulties and it took long time.

Now the facility to view tax and computation sheet for demand raised by Assessing Officer is made available to the assessee in the e-Filing portal. Thus he can now verify his return with the computation sheet and see the variance and reply accordingly to the department.

To view computation sheet, the assessee has to simply

1. Login to the e-filing portal
2. e-file
3. Click on 'Response to Outstanding Tax Demand'
4. Click on download button next to demand amount
5. Download the details in pdf

CA Kasliwal Ambar

Maharashtra Govt. decides to hike Stamp Duty

The Maharashtra government has decided to allow a 1 per cent increase in stamp duty on property transactions, which will increase overall costs for home buyers in Mumbai, the country’s most expensive real estate market.

The Cabinet had on Tuesday approved a proposal for the increase in stamp duty on property transactions to fund major transportation projects such as the Metro and Monorail corridors. With this, the stamp duty in Mumbai will go up to 6 per cent although senior officials in the revenue department admitted that the Centre had issued guidelines urging states to cap stamp duty on property transactions at 5 per cent. The new rate will come into effect once the government issues a notification.

Senior officials also confirmed that the state government was actively considering a move to levy cess on Transferrable Development Rights (TDR) certificates as means to raise additional revenue. With increased revenue expenditure and revenue collection below par worsening the state’s overall financial position, the finance department is pushing for the move, sources confirmed.

CA Kasliwal Ambar

Lionel Messi facing up to 22 months in jail!

Lionel Messi is facing up to 22 months in jail if he is found guilty of defrauding the Spanish tax authorities.

Prosecutors had argued that the Argentina superstar had no case to answer after he and his father were accused of defrauding the Spanish authorities of nearly £3.5m between 2007 and 2009.

The prosecutors said they believed the Barca forward had no knowledge of the fraud which they alleged was carried out by his father Jorge.But the judge has now accepted the advice of the state attorney, who states that Messi should also stand trial on three counts of tax evasion.The maximum sentence for the offences is 22.5 months. Messi and his father paid the Spanish authorities a 'corrective payment' of £3.7m after they were formally charged in June 2013.

- CA Kasliwal Ambar

Property prices will be hit by tax on unsold inventory held by developers and builders

According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

In a bid to arrest hoarding of residential flats by developers and increase supply across the country, the income-tax department has decided to tax realtors on estimated annual rentals.


The tax could be anywhere between 15% and 20%. The move is as per the central action plan for 2015-16, under which the I-T department can levy tax on any unsold flat by treating it as 'income from house property' under Section 43-CA of the I-T Act, 1961.
According to tax authorities, real-estate companies should have to pay tax based on Annual Letting Value (ALV) on unsold flats as they are the owners of the flats and it does not matter whether the properties are rented out or not.

This means inventory of builders will be taxed on the basis of notional ALV -- a value on which tax has to be paid on the annual value of house property or the rent actually earned, whichever is higher.

A senior IT official said, "The builders' lobby has been creating artificial scarcity through hoarding of flats, only to sell them at higher prices later".

It has been noticed that this practice has been in vogue for over a decade and such flats or stocks are shown 'unsold' in the books of accounts while the main aim was to rig the prices upwards, said a tax official on condition of anonymity.

Taxing unsold stocks will help in two ways, according to a senior I-T official. One, this brings significant revenue, and second, it will force real-estate players to either sell their unsold flats at market-determined price. "Paying tax will further affect their bottomlines," the official, who did not wish to be named, told dna.

According to a recent report on the real-estate market in India by an international property consultant, unsold flats in six major cities hit the highest at 6.88 lakh units in the January-March quarter.

According to the report, it will take 72 months for builders to clear the inventory in Delhi-NCR and 46 months in Mumbai.

So far, unsold projects of builders were exempted from income-tax under the 'stock-in-trade' category. The I-T department believes builders would release more flats into the market, if they have to pay tax on them.

"Real-estate companies show their finished apartments as stock-in-trade and income from these are shown as business income, as in most other businesses. In a rising market, several developers hold apartments to benefit from the price appreciation that will accrue a few years after the project is complete," said a real-estate consultant.

A few years ago, when there was an attempt to tax such unsold stock, builders had moved court. However, the court gave a judgment in favour of the department in 2012.

The court had validated the I-T department's argument that builders will have to pay tax based on the ALV method, irrespective of the fact that these flats were not rented out. The department has now decided to levy this tax uniformly across the country after the proposal was cleared by the finance ministry.

- CA Kasliwal Ambar

Reliance Industries in trouble?

Reliance Industries in trouble?

Reliance Industries' corporate debt has ballooned to around Rs. 1.60 lakh crores and rising. The company borrowed tremendous amounts of money over the last few years and their debt doubled in the same period [1]

Many companies borrow to fund future growth, but Reliance ended up investing its borrowed money in oil reserves, petrochemicals and shale gas reserves. The prices of all of these have gone down significantly and thus Reliance is not generating enough revenue. Last year, for example, saw Reliance's operating revenue go down by Rs. 60,000 crores. Their debt however increased from 1.38 crores to 1.60 lakh crores [2]

Even though RIL has shown that they are making profit, it is highly suspect if they are making enough money to pay off long term debt. Companies have a habit of manipulating numbers to show profit. The revenue numbers however, don't lie.

The big question now is - if Reliance Industries defaults on its loans (high likelihood), will the Government bail them out, or will they aggressively go after their assets after forcing them to file for bankruptcy?

Keep in mind, RIL's assets include the highly controversial KG-gas basin.

The debt bomb is affecting many other Indian companies who greedily went after cheap loans and are now feeling the heat [3]

The international monetary fund has already warned that high corporate debt can destabilize our otherwise healthy economy [4]

References -

[1]http://www.dnaindia.com/money/report-reliance-s-debt-went-up-by-nearly-rs-10000-crore-even-as-it-posted-7-year-high-profit-2107935
[2]https://www.valueresearchonline.com/stocks/Finnance_Annual.asp?code=3252
[3] http://www.businesstoday.in/magazine/cover-story/massive-corporate-debt-may-slow-down-economic-recovery/story/217700.html
[4]http://www.livemint.com/Companies/z4M2jlVmUwrLMTegUZE2wM/Concentration-of-high-debt-among-some-Indian-firms-may-pose.html

Service tax levy on services provided by a Goods Transport Agency

Circular No.186/5/2015­ST

 F. No. 354 / 98 /2015­ - TRU

 Government of India

 Ministry of Finance

 Department of Revenue

 Central Board of Excise & Customs

 *****

 New Delhi, dated 5th October, 2015

To,
Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),
Director General of Service Tax
Director General of Audit
Director General of Central Excise Intelligence Principal Principal Commissioners of Service Tax (All)
Commissioners of Service Tax (All)
Commissioner (DPPR)
webmaster@cbec.gov.in

Sir/ Madam,

Subject: ­ Service tax levy on services provided by a Goods Transport Agency ­reg.

The All India Transport Welfare Association (AITWA) has represented regarding the difficulties being faced by the Goods Transport Agencies (GTAs) in respect of service tax levy on the services of goods transport. Doubts has been raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.

2. The issue has been examined. Since July 1, 2012, service tax has shifted to a negative list regime, by which all the services except those covered in negative list as mentioned in section 66D of the Finance Act, 1994 or those exempted by notification are chargeable to service tax.

3. Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

4. A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The interpretation of specified descriptions of services in such cases shall be based on the principle of interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, if ancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by theGTA, and not by any other person, such services would form part of GTA service and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

5. It is also clarified that transportation of goods by road by a GTA, in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time, should be considered as services of goods transport agency in relation to transportation of goods for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road; and (b) the GTA issues a consignment note, by whatever name called.

6. Pending disputes on the above issues may accordingly be decided expeditiously.

7. Trade & field formations may be informed suitably.

Yours faithfully,
(Dr. Ravindra Kumar)
Technical Officer, TRU-II

PAN Allotment will be suspended in October

‪PAN‬ allotment will remain ‪‎suspended between 05.10.2015 to 09.10.2015.

The Income Tax Department is in the process of upgrading software applications. It is for information of PAN applicants that PAN allotment by Income Tax Department will remain suspended between 05.10.2015 to 09.10.2015 due to PAN data migration activity. However, PAN applications, through on­line and off­line modes, will continue to be received by PAN service centres of M/s NSDL and M/s UTIITSL. The back log of PAN applications will be cleared within three days. Inconvenience to taxpayers is regretted. Read more at: www.incometaxindiaefiling.gov.in