Articles by Taxmann on ArticleSnatch.com

Conversion Of Existing Firms-Limited Liability Partnerships - Various Aspects

Thu, 26 Nov 2009 01:19:55 -0500

Parmod K. Bansal The entire world is gradually drifting towards one global market without any trade barriers between the countries. A small organization led by few partners cannot think of growth on large scale without corporatising itself. Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP Act provides the legal framework for conversion of existing partnership firms, a private company or an unlisted company into LLPs. This write-up deals with the various aspects relating to conversion of existing firms or companies into Limited Liability Partnership. According to the author, the tax aspects on conversion of partnership firms and companies into LLPs are full of confusion in the absence of any clarity from the Legislature. He opines that the omission of certain critical provisions would inhibit any conversions in a big way as stakeholders may not wish to take undue risk by taking any steps in the dark and, thus, it is of almost importance that clear provisions are laid down by the Legislature, setting the tone and tenor of its intent in the Income-tax Act, 1961 itself. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Service Tax On Equipment Leasing And Hire-Purchase - Whether Un-Constitutional ?

Thu, 19 Nov 2009 00:31:44 -0500

Surender Kumar Jain This article makes a comprehensive analysis of the decision of the High Court in Kerala Non-banking Finance Companies Welfare Association v. Union of India [2009] 20 STT 1, wherein a recent issue as to : whether charging of service tax on banking and other financial services which include equipment leasing and hire-purchase, is unconstitutional, has been considered. 1- Vide section 137 of the Finance Act, 2001 service tax is introduced on Banking and other financial services which include equipment leasing and hire-purchase. The impugned provisions providing for service tax on Equipment leasing and hire-purchase transactions are introduced by amending the Finance Act, 1994. The relevant definition of Banking and other financial services is contained in clause (12) of section 65 of the Finance Act, 1994. Along with the introduction of the definition of Banking and other financial services, the charging section, namely, section 66 of the Finance Act, 1994 is also amended to cover tax on value of taxable services referred to in sub-clause (zm) of section 65(105). **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Direct Taxes Code Is Silent On Tax Treatment of Reverse Mortgages

Thu, 12 Nov 2009 00:42:20 -0500

Srinivasan Anand G. The Direct Taxes Code Bill, 2009 is silent on the tax treatment of reverse mortgage. The author opines that having regard to the nature of the transaction, the position which prevails under the Income-tax Act, 1961 will continue under the Code also. However, it is desirable that express provisions be incorporated. 1. Under section 47(xvi) of the Income-tax Act, 1961 (the Act), any transfer of a capital asset in a transaction of reverse mortgage under a scheme made and notified by the Central Government is not regarded as a transfer. Consequently, the amount received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage as above is exempt from tax under section 10(43) of the Act. 2. The Direct Taxes Code Bill, 2009 (the Code) is silent on the tax treatment of reverse mortgages. As the Code is silent on reverse mortgage, a question arises what will be its tax implications under the Code? 3. There is no definition of reverse mortgage either under the Act or under the Code. The reverse mortgage is so-called because the payment stream is reversed. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Certain Issues on taxation of Charitable and Religious institutions

Thu, 05 Nov 2009 00:34:49 -0500

Devendra Jain In a vastly populated developing nation, the parallel role of NGOs in public welfare is indispensable. The Income-tax Act, 1961 has recognized the importance of the very concept of charity in the Indian society. The income derived by charitable institutions is exempt under section 10 or section 11. This article discusses certain issues arising out of section 11, which provides exemption to income derived from property held under trust for charitable or religious purposes. The author opines that the law relating to taxation of charitable institutions ought to be simple looking at the noble cause behind the existence of such institutions. He hopes that with the new Income-tax Code likely to be put in place, we will find a simple and non-controversial taxation system for charitable institutions. 1. In a vastly populated developing nation, the parallel role of NGOs in public welfare is indispensable. Public charity has reached numerous areas which were untouched by the Government due to bureaucracy or otherwise. In fact, the theory of dan or charity is found even in our mythology where we find instances of Karna or Raja Harishchandra. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Alternate Submission Of Proof Of Imports -(For listed companies - Specific facility)

Tue, 27 Oct 2009 01:58:49 -0400

R Balakrishnan Whenever the foreign exchange is acquired and remitted, the proof of import by way of exchange control copy of bill of entry needs to be submitted to the authorised dealer. Non-submission of the proof of imports would invite action against the importer and the Enforcement Directorate can initiate proceedings under the erstwhile Foreign Exchange Regulation Act or under the current Foreign Exchange Management Act. There could be occasions when the importer may not be able to submit the exchange control copy of the bill of entry for one reason or other and the law makes provision in such cases for the submission of alternate proof of import by way of a certification from the chartered accountant accompanied with an affidavit by the importer. However, for the listed companies whose shares are listed on a stock exchange in India, the Foreign Exchange Management Act makes a specific provision under paragraph A.10.2 of the Master Circular. This write-up throws some light upon this specific facility provided to listed companies. 1. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> indian taxes.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Taxation of Import of services in India and levy of Service Tax

Fri, 09 Oct 2009 03:04:29 -0400

N. Vijia Kumar This article deals with the taxation of import of services in India and evaluation of levy of service tax in the light of some relevant circulars and notifications. The author has also referred to a decision of the Bombay High Court in Indian National Shipowners Association v. Union of India [2009] 18 STT 212. 1. Service tax evolution is not only informative but also interesting. This levy was imposed by the Finance Act, 1994 and the subsequent Finance Acts amended this Act to expand the base and increase the levy. This can be stated to be the only instance in the Indian Legislative history where a later Finance Act amends an earlier one. Further, it would be astonishing to note that the Finance Act, 1994 is the only statute on the statute book which has no Statement of Objects and Reasons, and one of the few statutes that has not been considered either by a Parliamentary Committee or a Select Committee of the Parliament. Yet another distinguishing feature is that this levy is imposed on the service sector but enforced by the Central Excise Authorities who are constituted under the Central Excise Act, 1944. 2. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Investment Based Deduction

Thu, 01 Oct 2009 02:09:02 -0400

Kameswara Rao Challa Budget 2009 has taken a new initiative by introducing the concept of allowing deduction under income-tax for investment made in a new business based on investment' and not based on profit earned. It has inserted section 35AD allowing deduction of investment in specified businesses under the Income-tax Act, 1961. This is in place of allowing for exemption or deduction of profit earned from a new business. This amounts to allowing depreciation upfront. With this new initiative, it seems that the Government has changed its priority from investment for indus-trialization to invest-ment made. 1. In the Budget 2009, the Finance Minister, Mr. Pranab Mukherjee, proposed a new initiative by introducing the concept of allowing deduction under income-tax for investment made in a new business based on investment' and not based on profit earned. Mr. Mukherjee said in his Budget Speech, Under the present scheme of the Income-tax Act, tax exemptions are largely profit-linked. Such incentives are inherently inefficient and liable to misuse. Therefore, it is proposed to incentivise businesses by providing investment-linked tax exemptions..... Under this method, all capital expenditure, other than expenditure on land, goodwill and financial instruments will be fully allowable as deduction. Clause No. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

LLP Conceptually Different - Why Taxed As Partnership?

Fri, 25 Sep 2009 03:28:43 -0400

D.P. Mittal, Advocate The Finance (No.2) Act, 2009, amended the definitions of the expressions firm and partner of the Income-tax Act, 1961, to include a Limited Liability Partnership (LLP) and its partners, respectively, as defined in the Limited Liability Partnership Act, 2008. The LLP is an AOP incorporated in accordance with the provisions of the LLP Act. The definition of person in the Income-tax Act, 1961, includes an association of persons or a body of individuals, whether incorporated or not. In view of this, an amendment was not necessary and the LLP would have been taxed as an AOP. Commonality of the word partnership under the LLP Act and Indian Partnership Act, 1932, does not make them similar so as to be given similar tax treatment. The author here has taken up this issue for discussion. 1. The Finance (No. 2) Act, 2009 amended the definitions of the expressions firm and partner of the Income-tax Act, 1961, to include a Limited Liability Partnership (LLP) and its partner, respectively, as defined in the Limited Liability Partnership Act, 2008. Consequential amendments also have been made in other provisions of the IT Act. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Goods And Service Tax - A Consumption Based Destination Tax

Fri, 11 Sep 2009 03:32:40 -0400

V. Gangadharan The Goods and Service Tax (GST), a landmark in the history of tax reforms, after the implementation of VAT, has started its journey by the Finance Minister public endorsement of the dual GST model. The dual GST model will comprise of a Central GST and State GST. The Centre and the State will each legislate, levy and administer the Centre and State GST, separately. GST centres round evolving an efficient and harmonize consumption tax system in the country. For the purpose, amendments to the Constitution are necessary as federal GST would extend beyond manufacturing stage and the States would be able to collect taxes on services. 1. France was the first country which introduced a comprehensive goods and service tax Regime in 1954. Today, it has spread to about 150 countries. The Goods and Service Tax (GST) is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at a national level. Integration of goods and services taxation would give India a world class tax system and improve tax collections. It would end the long standing distortions of differential treatments of manufacturing and service sector. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Non-Indication Of Service Tax In Bill - An Analysis

Thu, 03 Sep 2009 02:57:08 -0400

M. Govindarajan Whenever a service is brought into the service tax net, the service provider is liable to levy service tax on the service provided by him and to pay the service tax so collected from the service receivers. The Service Tax Rules make it mandatory to issue bill/invoice/ challan to the service receivers indicating the details as required by the rules including the service tax payable. In some cases, the Tribunal have held that if service tax is not levied, the gross amount collected may be treated as cum-tax value. But it has been now decided that unless the invoice specifically says that gross amount charged includes service tax, it cannot be treated as cum-tax service price. 1. Rule 4A of the Service Tax Rules, 1994 provides that every person providing taxable service not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier, shall issue an invoice, a bill or, as the case may be, a challan issued by such person or a person authorized by him in respect of such payable service provided or to be provided. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Remanding Of Service Tax Matters

Tue, 25 Aug 2009 02:50:06 -0400

M. Govindarajan Service tax issue is the emerging one in the indirect tax matters. It opens the field to the professionals more to practice. In the proceedings before any quasi-judicial system, the principles of Natural Justice are to be complied with. Otherwise, the matter will be remanded to the original authority of the appellate authority to decide the case afresh which will cause further delay in the proceedings. This article highlights the decisions of the Tribunal in some cases in which cases were remanded. 1. Section 83A of the Finance Act, 1994 (the Act) provides that whereunder the provisions of service tax or rules made thereunder any person is liable to a penalty, such penalty may be adjudged by the Excise Officer conferred with such power as the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 may, by notification, in the Official Gazette, specify. Section 84 of the Act provides the revision of orders by the Commissioner of Central Excise. Section 85 of the Act provides for filing appeal to the Commissioner of Central Excise (Appeals) and section 86 of the Act provides for filing appeals to the Tribunal. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Service Tax Budget Highlights 2009

Fri, 07 Aug 2009 04:44:23 -0400

Service Tax Budget Highlights 2009 Monarch Bhatt- The glimpse of service tax proposals forms the subject- matter of this article. Nothing is certain but death and Tax- Benjamin Franklin 1. Economy may be good or bad, there may be any progress or not, there may be development or not, but imposition and leviability of taxes is certain for the growth of the country. Shri Pranab Mukherjee has also in his Budget done it for the benefit of the country at large. 2. There is no change in the rate of service tax, i.e., 10 per cent service tax, 2 per cent Education Cess and 1 per cent Higher and Secondary Education Cess. Changes effective from July 7, 2009 3. The changes effective from July 7, 2009 are as follows : (i) Territorial jurisdiction of "India" extended - The territorial jurisdiction of India was extended up to Continental Shelf of India (CSI), i.e., up to 12 nautical miles and Exclusive Economic Zone (EEZ). Now, the territorial jurisdiction has been extended to cover the installations, structures and vessels in the entire CSI and EEZ. (Notification No. **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .

Major Changes In Indirect Taxes

Tue, 28 Jul 2009 06:56:22 -0400

V. S. Datey 1. Budget 2009 was presented before Parliament on 6-7-2009. The major changes in indirect taxes are summarised below: 2.1-No change in existing rate of service tax - Existing rate of service tax of 10 per cent continues unchanged. 2.2 -New services and expansion of some services - Four new services are proposed to be taxed. Coverage of some existing services is proposed to be altered/enhanced. The levy on new services and expanded services will be effective after Finance (No. 2) Act, 2009 receives assent of President and date is notified. 2.2-1- New Services a.Transport of goods through rail. b.Transport of coastal goods and goods transported through inland water. c.Legal services of consultancy, advice or technical assistance (but not service of appearance before any court of law or any statutory authority). Service will be taxable only when provided by business entity like firms, associates, enterprises, companies, etc., but not individual. d.Cosmetic and plastic surgery undertaken to preserve or enhance physical appearance or beauty. 2.2-2- Coverage Of Existing Services a.Job work under Business Auxiliary Service (BAS) is exempt if there is "manufacture". **End Summary** Topics: Company Laws]]> Foreign Exchange]]> Service tax]]> Income Tax.]]>]]> About the Author: ]]> Taxmann is growth oriented publishing house with in depended editorial, marking and production division .We have an impressive tally of title on India âinternational taxation, service tax, indian tax, tax calculator , income tax returns , direct tax laws, corporate laws and other judicial SC/HC acts .