Restoration of Service Tax accounting Codes vide Circular No.165/16/2012 -ST

Restoration of Service Tax accounting Codes vide Circular No.165/16/2012 -ST

Subject: Restoration of service specific accounting codes for payment of service tax - regarding.

          Negative List based comprehensive approach to taxation of services came into effect from the first day of July, 2012. Accounting code for the purpose of payment of service tax under the Negative List approach [“All Taxable Services” – 00441089] was prescribed vide Circular 161/12/2012 dated 6^th July, 2012.

2.         Subsequent to the issuance of the Circular, suggestions were received from the field formations that the service specific old accounting codes should be restored, for the purpose of statistical analysis; also it was suggested that list of descriptions of services should be provided to the taxpayers for obtaining registration. These suggestions were examined and a decision has been taken to restore the service specific accounting codes. Accordingly, a list of 120 descriptions of services for the purpose of registration and accounting codes corresponding to each description of service for payment of tax is provided in the annexure to this Circular.

3.         Descriptions of taxable services given in the annexure are solely for the purpose of statistical analysis. On the advice of the office of the C & AG, a specific sub-head has been created for payment of “penalty” under various descriptions of services. Henceforth, the sub-head “other receipts” is meant only for payment of interest payable on delayed payment of service tax. Accounting Codes under the sub-head “deduct refunds” is not to be used by the taxpayers, as it is meant for use by the field formations while allowing refund of tax.

4.         Registrations obtained under the positive list approach continue to be valid. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services given in the Annexure. Where registrations have been obtained under the description ‘All Taxable Services’, the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure. If any applications for amendment of ST-1 are pending with field formations, seeking the description ‘all taxable services’, such amendment may not be necessary and the officers in the field formations may provide necessary guidance to the taxpayers in this regard. Directorate General of Systems will be making necessary arrangements for display of the list of 120 descriptions of services and their corresponding Accounting Codes in Form ST-1 and Form ST-2 as may be necessary.

Seminor on Service Tax- Reverse charge mechanism only on 29-11-2012

Extension of Service Tax Return Filing Due Date up to 25-11-2012 for the period Apr'12 - Jun'12

F. No. 137/22/2012-Service Tax

28^th September, 2012

Filing of ST-3 only for the period  1^st April to 30^th June 2012

 In terms of sub-rules (1) and (2) of Rule 7 of the Service Tax Rules, 1994, the half yearly return for the period 1^st April to 30^th September 2012, is to be filed by  25^th October, 2012. In the current financial year , an assessee would have had to give data with respect to specific services  and the corresponding legal provisions for the period 1-4-2012 to 30-6-2012. The data for the period   1-7-2012 to 30-9-2012, would have been with respect to  different services  and the corresponding legal provisions. Combination of  all these provisions into one return would have made the return complex for   the assessees . 

I am directed to inform you that  it has been decided that assessees have to provide data only for the period 1-4-2012 to 30-6-2012 in the first half yearly return which is due on 25-10-2012. (The data for the period from 1-7-2012 to 30-9-2012 should not be filed . Modifications will be made in the ACES so that any data filed for this period is rejected. Till such time as the modifications are made, ACES will not be accepting returns) Accordingly notification 47/2012 dated 28-9-2012 has been issued today.

 Data for the period 1-7-2012 to 30-9-2012 will have to be furnished in a return in a revised format. The revised format of the return and the last date for filing it will be indicated separately.

TDS Defaults & Consequences

 

TDS defaults:Failure to deduct the whole or part of the Tax at source (non-deduction, short deduction or delay in deduction)

1. Failure to deposit whole or part of the TDS (non-deposit, short deposit or late deposit)

2. Failure to apply for TAN within the prescribed time limit or failure to quote TAN on allotment as required under section 203A.

3. Failure to furnish, in due time, TDS returns or TDS certificates or to deliver or cause to be delivered a copy of declaration in form no. 15H/15G/27C/copy of quarterly statement.

4. Failure to mention the PAN of the deductee in all quarterly statements as well as in all certificates furnished.

Consequences of Defaults

The following chart indicates the nature of default and its consequences which range from penal interest, penalty to prosecution:

 

In addition to the above, there are other consequences in certain cases, as enumerated below;

▬   Disallowance of specified expenditure (while computing the income of the deductor) if TDS is not deducted from the payment. (Section 40a(ia)).

         ▬   Where the tax has not been paid after its deduction it shall be charge       on the asset of the defaulter to recover the amount of TDS. (section 201(2)).

Challans for Various Tax Payments

Challans to be filled up: 

For Depositing Advance Tax,  Self Assessment Tax,  Tax on Regular Assessment,  Securities Transaction Tax, Tax on Distributed Profits of Domestic Company and Tax on Distributed Income to Unit holders . ITNS 280

For depositing TDS/TCS by company or non company deductee ITNS 281

For depositing Securities transaction tax, Estate duty, Wealth-tax, Gift-tax, Interest-tax, Expenditure/other tax and Hotel Receipt tax ITNS 282

For depositing banking cash Transaction Tax and FBT ITNS 283


 

FAQ on I.T return filing Exemption

1. What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

This notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs.5,00,000, and (ii) the total income consists only of income chargeable to income tax under the head Salaries and interest income from savings bank account if such interest income does not exceed Rs.10,000.

Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest
income to the employer during the course of the year.

2. Whether a salaried taxpayer having total income of less than Rs.5,00,000 and claiming a refund of Rs.3,000 would be eligible under this Scheme.

No. The taxpayer has to file a return of income for making a claim of refund.

3. Is having a valid PAN number a precondition for being covered by the notification?

Yes. The notification clearly specifies that the individual has to report his PAN to the employer. Hence having a valid PAN is a precondition for falling within the ambit of the notification.

4.Can an individual who is getting income under the head “salaries” from more than one employer take benefit of the notification?

No. A salaried taxpayer who has earned income from more than one employer during the financial year is not covered under this Scheme.

5.Whether this notification would also cover taxpayers having ‘loss from house property’, which are often reported by the employees to the employer.

No. Under the existing procedure, DDO/employer can give credit to the employee for a claim for loss under the head “income from house property” u/s 24 made by the employee. As a result, a salaried employee’s total income may reduce to less than Rs.5,00,000 as loss from the head “income from house property” would have been set-off against salary income. Such a taxpayer is not exempted from filing his return of income as the notification exempts only cases where the total income is under the head “salary” and from savings bank account (income from other sources) not in excess of Rs.10,000. If the taxpayer has any loss under the head “income from house property”, he will not be eligible for exemption from filing a return of income.

6.Does savings bank account include other banking accounts like fixed deposits or recurring deposits accounts?

No. The benefit of the notification is available to taxpayers whose interest income comprises of interest earned on savings bank account ONLY.

7. Will a salaried individual having agricultural income, which is exempt from tax, be covered within the ambit of the notification?

A salaried individual with agricultural income exceeding five thousand rupees shall be out of the ambit of the notification. A return will have to be filed in such a case, even if other conditions of the notification are satisfied as the agricultural income (of more than Rs.5,000) has to be included, for rate purposes, in the total
income,.

Cost of Inflation Index

Notification No.35/2011 dated 23.06.2011

Notification of Cost Inflation Index for F.Y 2011-12

Clause (v) of Explanation to section 48 defines "Cost Inflation Index", in relation to a previous year, to mean such index as the Central  Government may; by notification in the Official Gazette, specify in this behalf, having regard to 75% of average rise in the Consumer Price Index for urban Non-manual employees.

Accordingly, the Central Government has, in exercise of the powers conferred by clause(v) of Explanation to section 48, specified the Cost Inflation Index for the Financial Year 2011-12 as 785.

Financial Year	Cost Inflation Index	Financial Year	Cost Inflation Index
1981-82	100	1997-98	331
1982-83	109	1998-99	351
1983-84	116	1999-00	389
1984-85	125	2000-01	406
1985-86	133	2001-02	426
1986-87	140	2002-03	447
1987-88	150	2003-04	463
1988-89	161	2004-05	480
1989-90	172	2005-06	497
1990-91	182	2006-07	519
1991-92	199	2007-08	551
1992-93	223	2008-09	582
1993-94	244	2009-10	632
1994-95	259	2010-11	711
1995-96	281	2011-12	785
1996-97	305	2012-13

Accounting Basic

The main Branches of Accounting are:

1)Financial Accounting:

   It is concerned with recording of business transactions in the books of accounts in such a way

   that  operating result of a particular period and financial position on a particular date can be known.

2)Cost Accounting:

   It relates to collection, classification and ascertainment of the cost of production or job undertaken 

   by the   firm.

3)Management Accounting:

   It relates to the use of accounting data collected with the help of financial accounting and cost                     accounting   for the purpose of policy formulation, planning, control and decision making by the management.

Accounting Basic Terms:

 

Proprietor: A person who owns a business is called its proprietor. He contributes capital to the business with the intention of earning profit.

Capital:It is the amount invested by the proprietor/s in the business. This amount is increased by the amount of profits earned and the amount of additional capital introduced. It is decreased by the amount of
losses incurred and the amounts withdrawn.

Assets:Assets are the properties of every description belonging to the business. Cash in hand, plant and machinery, furniture and fittings,bank balance, debtors, bills receivable, stock of goods, investments,Goodwill are examples for assets.

 Assets can be classified into tangible and intangible.

 
Tangible Assets: These assets are those having physical existence. It can be seen and touched.

Intangible Assets: Intangible assets are those assets having no physical existence but their possession gives rise to some rights and benefits to the owner. It cannot be seen and touched. 

Liabilities:Liabilities refer to the financial obligations of a business. These denote the amounts which a business owes to others, e.g., loans from banks or other persons, creditors for goods supplied, bills payable,
outstanding expenses, bank overdraft etc.

Drawings:It is the amount of cash or value of goods withdrawn from the business by the proprietor for his personal use. It is deducted from the capital.

Debtors: A person (individual or firm) who receives a benefit without giving money or money’s worth immediately, but liable to pay in future or in due course of time is a debtor. The debtors are shown
as an asset in the balance sheet.

Creditors:A person who gives a benefit without receiving money or money’s worth immediately but to claim in future, is a creditor. The creditors are shown as a liability in the balance sheet. 

Purchases: Purchases refers to the amount of goods bought by a business for resale or for use in the production. Goods purchased for cash are called cash purchases. If it is purchased on credit, it is called as
credit purchases. Total purchases include both cash and credit purchases.

Purchases Return or Returns Outward:When goods are returned to the suppliers due to defective quality
or not as per the terms of purchase, it is called as purchases return. To find net purchases, purchases return is deducted from the total purchases.

Sales:Sales refers to the amount of goods sold that are already bought or manufactured by the business. When goods are sold for cash, they are cash sales but if goods are sold and payment is not received at
the time of sale, it is credit sales. Total sales includes both cash and credit sales.

Sales Return or Returns Inward:When goods are returned from the customers due to defective
quality or not as per the terms of sale, it is called sales return o returns inward. To find out net sales, sales return is deducted from total sales.

Stock:Stock includes goods unsold on a particular date. Stock may be opening and closing stock. The term opening stock means goods unsold in the beginning of the accounting period. Whereas the term closing stock includes goods unsold at the end of the accounting perid. 

Revenue:Revenue means the amount receivable or realised from sale of goods and earnings from interest, dividend, commission, etc.

Expense:It is the amount spent in order to produce and sell the goods and services. For example, purchase of raw materials, payment of salaries, wages, etc.

Income:Income is the difference between revenue and expense.

Voucher:It is a written document in support of a transaction. It is a proof that a particular transaction has taken place for the value stated in the voucher. It may be in the form of cash receipt, invoice, cash memo,
bank pay-in-slip etc. Voucher is necessary to audit the accounts.

Invoice:Invoice is a business document which is prepared when one sell goods to another. The statement is prepared by the seller of goods. It contains the information relating to name and address of the seller
and the buyer, the date of sale and the clear description of good with quantity and price.

Receipt:Receipt is an acknowledgement for cash received. It is issued to the party paying cash. Receipts form the basis for entries in cash book.

Account:Account is a summary of relevant business transactions at one place relating to a person, asset, expense or revenue named in the heading. An account is a brief history of financial transactions of a particular person or item. An account has two sides called debit side and credit side.