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o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy EDITORIAL Chartered Accountants MONTHLY NEWSLETTER NOVEMBER 2015 HOME S P C M & ASSOCIATES Sincerity Professionalism & Commitment is our Motto 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY C. A. Suhas P. Bora 1211 B, Shukrawar Peth, Subhash Nagar Lane No. 4, Pune 411 002, Phone: (020) 24479119, 24486663 C. A. Pradip M. Katariya 207, Nav Maharashtra House, 43, Shaniwar Peth, Pune 400 030 Phone : (020) 24478059/69 Email : abhay. bora@spcm. co. in DISCLAIMER : Every effort has been made to ensure accuracy in the information. The publishers do not hold themselves responsible for errors that may have arisen. Please take professional advice for further implementation. All rights reserved. STRICTLY FOR PRIVATE CIRCULATION BY INVITATION

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Editorial - CA. Suhas P. Bora Dear All, Wish you a good day today. The government should be appreciated for its earnest effort in keeping the GST bill alive. This is despite the logjam that stalled passing of GST amendment bill during monsoon session of Parliament. Incidentally we must remember that the GST bill was first introduced by the UPA government and then opposition party (now ruling) had created the logjam! Model GST and IGST law is expected to be available in public domain by early November. Model laws, it is stated, have already been circulated among States. CGST will be framed based on model GST law. States will draft their own State GST based on draft model law with minor variation incorporating state based exemption. Four reports of Joint Committees, on registration, refund, payments and returns are already in public domain for feedback on or before 31 st October 2015. Article on detailed analysis of the same is going to be published in our newsletter soon. We are in this month coming out with an Analysis of the Payment Module for the wider discussion and a feedback for our readers. We have also created a team headed by self and assisted by Abhay Bora and other partners that anticipates the GST roll out and would create a series of discussions to further our understanding of the same.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Editorial - CA. Suhas P. Bora Over the years, while it is true that audit reports state that preparation of financial statements and compilation of particulars required for tax audits are the responsibility of auditee but this is more in letter than in spirit. Therefore the auditor has to wear two hats; of an independent entity as well as a committed professional who is also involved in the nitty gritty of the processes. It's time that our profession does some serious introspection on this aspect. We must make our clients aware of their responsibilities and the line between the responsibilities of the auditee and that of auditor must be redrawn clearly. This month we would be celebrating the Diwali is derived from the Sanskrit word Dipawali, formed from Dipa ( light or lamp) and avali ( series, line, row). Dipavali or Deepavalli thus meant a "row" or "series of lights". Spiritually it signifies the victory of light over darkness, knowledge over ignorance, good over evil, and hope over despair. I wish you all a very Happy Diwali and a Prosperous New Year. With best wishes CA. Suhas P. Bora

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER SPCM ACTIVITIES 6 th Due dates Nov. 2015 ACT SERVICE TAX 7 th Nov. 2015 INCOME TAX VAT UPDATES 10 th Nov. 2015 MVAT/CST SERVICE TAX UPDAATES 15 th Nov. 2015 COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – 20 th Nov. 2015 WORKS CONSTRACT TAX UNDER VAT ACT 21 st Nov. 2015 PROVIDENT FUND LOCAL BODY TAX ESIC FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA 21 st Nov. 2015 MVAT/CST 30 th Nov. 2015 MVAT/CST PROFESSION TAX LUXURY TAX INCOME TAX UPDATES GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Chartered Accountants Monthly Due Dates MONTHLY DUE DATES REGISTER FOR NOVEMBER 2015 MONTHLY DUE DATES S P C M & ASSOCIATES 30 th Nov. 2015 Particulars E- Payment of Service tax by Companies for October 2015 TDS/TCS Payment for the month of October 2015 E-filling of Six Monthly Returns for April To September 2015. Provident Fund Payment for the month of October 2015 Payment of Local Body Tax for October 2015 Employee State Insurance Corporation Payment for the month of October 2015 E-Payment of Monthly / Quarterly Tax & WCT TDS for October 2015 E-filling of Monthly Returns for October 2015 E-Payment of Monthly Tax for October 2015 NOTE: - If Due date is on Sunday or Public Holidays, the next working day is to be considered as due date.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER SPCM ACTIVITIES Chartered Accountants SPCM Activities STUDY CIRCLE MEETINGS CONDUCTED 2015 MONTHLY DUE DATES S P C M & ASSOCIATES DATE TOPICS GROUPS 24/10/2015 E-FILING OF RETURNS GROUP-II 31/10/2015 DOMESTIC TRANSFER PRICING Service Tax GROUP-III INCOME TAX UPDATES PRESENTERS KRITIKA MARLECHA LOKESH CHANDAK CHAIR PERSON NIKITA MANIYAR YOGITA CHETAN FORTHCOMING STUDY CIRCLE MEETINGS VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – DATE TOPICS GROUPS PRESENTERS CHAIR PERSON 21/11/2015 BRIEF OVERVIEW OF IFRS AND IND AS GROUP-I 4 PM-6 PM FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA 1. RUCHI GANDHI 2. MAYURI MANDHANE 21/11/2015 SECTION 43 CA AND 50 C GROUP-II ROSHNI BIYANI 6 PM-8 PM GST PAYMENT PROCESS 28/11/2015 SERVICE TAX GROUP-III GAURI 6 pm-8. 30 pm WORKS CONSTRACT TAX UNDER VAT ACT SERVICE TAX ON MANPOWER SUPPLY

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah Income Tax Updates A. Notification and Circulars 1. CBDT Instruction On Revised And Updated Guidance For Implementation Of Transfer Pricing Provisions The CBDT has issued Instruction No. 15/2015 dated 16. 10. 2015 in which it has set out revised and updated guidance for implementation of transfer pricing provisions. The Instruction sets out the circumstances in which a reference can be made to the TPO by the AO, the role of the TPO when such a reference is made, the role of the AO after determination of the ALP by the TPO, etc. The Instruction is of crucial importance to all taxpayers and professionals engaged in the practice of transfer pricing law 2. CBDT Press Release Reg Claiming Of Medical Expenditure For Tax Purposes Made Easy The CBDT has issued a press release dated 14. 10. 2015 stating that the condition of obtaining the certificate for claiming expenditure under section 80 DDB in respect of specified ailments from a specialist working in a Government hospital has been amended. As per amended Rule 11 DD, the prescription can be issued by any specialist mentioned in the amended Rule. Henceforth, it will not be mandatory to obtain a certificate from a specialist working in a Government hospital The Notification is available on the website of the Income Tax Department www. incometaxindia. gov. in.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah B. Recent Reported Decisions - High Court and ITAT 1. Pr. CIT vs. G & G Pharma India Ltd (Delhi High Court) S. 147: Reopening only on the basis of information received that the assessee has introduced unaccounted money in the form of accommodation entries without showing in what manner the AO applied independent mind to the information renders the reopening void Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: “it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries”. In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 2. Motilal R. Todi vs. ACIT (ITAT Mumbai) S. 147: Entire law on whether reopening of assessment in the absence of "fresh tangible material" is permissible reviewed Availability of fresh tangible material in the possession of AO at the time of recording of impugned reasons is a sine qua none, before the AO can record reasons for reopening of the case. We begin with the judgment of Hon’ble Supreme Court in the case of CIT vs. Kelvinator India Ltd. 320 ITR 561 (SC), laying down that for reopening of the assessment, the AO should have in its possession ‘tangible material’.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah The term ‘tangible material’ has been understood and explained by various courts subsequently. There has been unanimity of the courts on this issue that in absence of fresh material indicating escaped income, the AO cannot assume jurisdiction to reopen already concluded assessment. 3. Parinee Developers Pvt Ltd vs. ACIT (ITAT Mumbai) S. 271(1)(c): If the notice does not clearly specify whether the penalty is initiated for "concealment" or for "filing inaccurate particulars", it is invalid. Penalty should be imposed merely because the income has been offered to tax in a later year and not in the present year the penalty notice issued u/s 274 of the Act is ambiguous to the extent for which the penalties are initiated. The said notice does not specify where the present penalty is being levied for concealment of income or furnishing of inaccurate particulars of income. CIT (A) did not strike of The irrelevant limb mentioned in the notice u/s 274 of the Act. CIT (A) is not clear as to the relevant limb of the provisions of section 271(1)(c) of the Act for which penalty should be levied. Further, in the quantum order u/s 250 of the Act, the CIT (A) initiated penalty for assessee’s failure in furnishing inaccurate particulars in respect of estimated cost of future expenditure resulted in suppression of income. In the penalty order of the CIT (A), penalty was levied for “concealment of particulars of income‟ in respect of the change in estimated cost. By all these variations, the CIT (A) is not clear as to whether the penalties are levied for “concealment of income” or “furnishing of inaccurate particulars of income”

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah 4. Hafeez S. Contractor vs. ACIT (ITAT Mumbai) S. 271(1)(c): If the notice does not clearly specify whether the penalty is initiated for "concealment" or for "filing inaccurate particulars", it is invalid. Mere fact that assessee has surrendered income does not justify penalty if his explanation is not found to be false/ not bona fide The notice issued by the AO u/s 274 read with section 271 of the Act at the time of initiation of penalty proceedings states that it is issued for “concealment of particulars of income or furnishing of inaccurate particulars of income”. The assessing officer has not specified that as to which limb the notice was issued, i. e. , whether it is issued for concealment of particulars of income or furnishing of inaccurate particulars of income. The assessing officer should be clear about the charge at the time of issuing the notice and the assessee should be made aware of the charge. The penalty order is liable to be quashed as the AO has not correctly specified the charge 5. CIT vs. B. S. Shantakumari (Karnataka High Court) S. 54 F is a beneficial provision & must be interpreted liberally. It does not require that the construction of the new residential house has to be completed, and the house be habitable, within 3 years of the transfer of the old asset. It is sufficient if the funds are invested in the new house property within the time limit The essence of s. 54 F is to ensure that assessee who received capital gains would invest same by constructing a residential house and once it is established that consideration so received on transfer of his Long Term capital asset has invested in constructing a residential house, it would satisfy the ingredients of Section 54 F If the assessee is able

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah to establish that he had invested the entire net consideration within the stipulated period, it would meet the requirement of Section 54 F and as such, assessee would be entitled to get the benefit of Section 54 F of the Act C. Unreported Decisions 1. Soven Trading & Investment Co. Pvt. Ltd. v. DCIT, ITA No. 5476/M/2014 dt. 07/08/2015, AY 2010 -11, (Mumbai ITAT) Condonation of delay in filing appeal – No tax demand – Bona fide belief that no consequences would follow. The CIT (A) dismissed the appeal filed by the Assessee as belated by 174 days on the ground that the Assessee did not explain the reasons for such delay. Before the Tribunal, the Assessee explained that the reason for delay in filing the appeal before the ld. CIT(A) was that, after the receipt of the assessment order, the assessee company was under a bonafide belief that no penalty or any other consequences will follow and only after receipt of penalty order, the assessee company realized its mistake and filed the appeal and, this act of the assessee was due to ignorance of tax law and was not deliberate. Held, the Assessee could not stand to gain by intentionally delaying the filing of its appeal and initially, the assessee did not file appeal against the Assessment Order, since there was no tax demand. Since no malafide intention could be ascribed to the Assessee, the delay was condoned and the matter was remitted to the CIT (A) for decision on merits.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah 2. ACIT v. Shivam Textile & Proofing Industries, ITA No. 5248/M/2013 dt. 16/07/2015, AY 2010 -11 (ITAT Mumbai) Bogus purchases – No sales without purchases – Bank statement etc. produced. On the basis of information received from Sales Tax Department, the AO asked the Assessee why purchases from a particular party M/s Kripa Multi Trade Pvt. Ltd. should not be disallowed. The assessee filed a detailed reply along with copies of purchase bills, bank statement and confirmation from the said party which the AO dismissed and made the addition. Held, no adverse finding had been given in respect of the sales made by the Assessee. It was a settled proposition that without purchases, there could not be any sales. It was also an undisputed fact that no adverse inferences had been drawn in so far as the purchase invoice of M/s. Kripa Multi Trade Pvt. Ltd was concerned. Since all details regarding purchases were filed and the payments were reflected in the bank statements, addition could not have been made. 3. ITO (E) v. Bhansali Trust, ITA Nos. 5948/Mum/2012 dt. 31/08/2015, AY 2009 -10 (ITAT Mumbai) Assessee was a trust registered under section 12 A carrying out charitable activities for more than 40 years. It claimed exemption under section 11/12 of the Act which the AO denied on the ground that the objects of the assessee-trust had been amended after the grant of Registration under section 12 A without getting itself re-registered. Held, registration granted to the assessee under section 12 A could be cancelled only as per the statutory requirements, which prescribe that either the activities being carried

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah out are not genuine or that they are not being carried out in accordance with the objects, meaning thereby that the amended objects being pursued are non-charitable. A mere non-intimation of the amendments in the Trust Deed to the Department cannot ipso-facto lead to cancellation of registration because the statutory requirement of cancellation of registration contained in section 12 AA(3) of the Act prescribe that the cancellation of registration cannot be effectuated unless a case is made out that the new objects do not fit-in with the existing objects (i. e. new objects are 'non-charitable' in nature) or that the activities are non-genuine. After a clause by clause analysis of the amendments, the Tribunal held that there was no change in the tone and tenor of the objects pursued by the Assessee in a real sense and that the changes in the Trust deed, did not reflect that the objects of the assessee Trust had undergone changes but that the amendments were merely enabling clauses which provide only 'means' or 'power' to achieve objects in the Trust Deed. Therefore, the exemption u/s 11 & u/s 12 was to be allowed. 4. Seetha S. Shetty v. DCIT, ITA No. 807/M/2013 dated 11/09/2015, AY 2006 -07 (Mumbai ITAT Sec 48 - Cost of acquisition – Not ascertainable - Asset acquired by adverse possession. The Assessee did not offer any capital gains on sale of land on the ground that there was no cost of acquisition due to the fact that the Assessee encroached upon the said land as per consent decree passed by the Bombay Civil Court, the Assessee got absolute rights in the property.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Income Tax Updates - Deepali R. Shah Held, there was no provision regarding the charging of capital gains tax on an asset title to which has been acquired in recognition of rights of adverse possession. Hence, it could be said that the cost of acquisition of such an asset was not ascertainable, and hence, its sale was not chargeable to tax.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – SALES TAX UPDATES RECENT NOTIFICATIONS Notification No VAT 1515/C R 128 A/TAXATION-1 Maharashtra State Government has issued Notification No VAT 1515/CR 128 B/TAXATION-1 Dt. 30/09/2015 amending rates of tax for certain commodities and amending certain entries in MVAT schedules ‘B’ and ‘D’ with effect from 01 st October 2015. Sch No B-1 WORKS CONSTRACT TAX UNDER VAT ACT B-2 FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA B-3 GST PAYMENT PROCESS B-4 SERVICE TAX ON MANPOWER SUPPLY Chartered Accountants VAT Updates - CA Gourav Oswal CA Nikita Bajaj MONTHLY NEWSLETTER 2015 MONTHLY DUE DATES S P C M & ASSOCIATES D-1 Old Rate Articles made of precious metals of fineness not less than fifty per 1 % cent, whether or not containing precious stones, semi precious stones, diamonds or pearls whether real or cultured and to which entry 105 in Schedule ‘C’ Precious metals that is to say Gold, Silver, Platinum, Osmium, 1 % Palladium, Rhodium, Ruthenium and alloys of any of them Precious Stones including diamonds, semi precious stones and 1 % pearls whether real or cultured. Hairpins, Imitation Jewellery, beads of glass, plastics or of any 1 % metal other than precious metals and parts and components thereof. Foreign liquor as defined, from time to time, in rule 3(6) (1) of the 50% Bombay Foreign Liquor Rules, 1953 excluding wine. Commodity New Rate 1. 20% 60%

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES MONTHLY NEWSLETTER Sch No D-2 D-3 D-5 VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY D-10 D-13 D-14 S P C M & ASSOCIATES Chartered Accountants VAT Updates - CA Gourav Oswal CA Nikita Bajaj Old Rate Country liquor, as defined in Maharashtra Country Liquor Rules, 50% 1973 Liquor imported from any place outside the territory of India, as 50% defined from time to time in rule 3(4) of Maharashtra Foreign Liquor (Import and Export) Rules, 1963, excluding wine. High Speed Diesel Oil (tax in addition to basic rate) Any other kind of Motor Spirit Rs 1 per (tax in addition to basic rate) ltr Aerated and Carbonated non-alcoholic beverages whether or not 20% containing sugar or other sweetening matter or flavour or any other additives Cigar and cigarettes 25% Commodity New Rate 60% Rs 2 per litre Rs 3 per ltr 25% 35% 2. Maharashtra State Government has issued Notification No VAT 1515/CR 128 B/TAXATION-1 Dt. 30/09/2015 for amending the Notification No VAT 1511/CR 57/TAXATION-1 Dt. 30/04/2011 relating to taxation of liquor with effect from 01 st October 2015. In schedule I appended to the Notification No VAT 1511/C R 57/TAXATION-1 Dt. 30/04/2011, at serial no 1, 2, 4 and 5, in column 4 for the letters, sign and figures “MRP x 25/125” wherever they occur, the letters, sign and figures “MRP x 30/130” has been substituted.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Service Tax Updates - CA Chetan R. Parakh, CA Prerna Dhumavat RECENT AMENDMENTS IN SERVICE TAX : 1) Real estate agent service-Administration charges collected by builder for authorizing transfer of allotment before sale-No service provided to any third person in relation to sale The assessee was the owner of the premises where flats were being constructed. Till the sale is completed in favour of the initial allottee by execution of a written sale deed which is registered under provisions of the Registration Act, there is no sale and, therefore, no transfer of ownership in favour of the allottee. Till such time the title in the property continues with the assessee. Since administrative charges are collected only prior to a concluded sale by the assessee in favour of third parties, the assessee continues to be owner of the real estate and, therefore, could not be considered an agent of his own property. -Vide Ansal Buildwell Limited. v. CCE&ST Stay Order No. ST/S/52758/2014 -CU(DB), in Application No. ST/Stay/55982/2013 in Appeal No. ST/55724/2013, dated 11 -08 -2014 2) Commercial Training or Coaching Service-Amount received by owner of coaching institute in individual capacity-Prima facie not subjected to service tax Assessee has been receiving some amount in individual capacity as a visiting lecturer/faculty. Revenue authorities wanted to tax that amount under the category of Commercial coaching classes as the assessee being a proprietor of the coaching classes.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Service Tax Updates - CA Chetan R. Parakh, CA Prerna Dhumavat The Tribunal observed that the records indicated that the amount received by the proprietor of the assessee has been received in his personal capacity and the Tribunal found strong force in the contentions raised by ld. Chartered Accountant that it cannot be covered under the category of Commercial coaching classes. Vide Professional Coaching Classes Centre v. CST (2015) Misc. Order No. M/13044/2014 -WZB/AHD, in Application No. ST/Stay/12715/2014 in Appeal No. ST/11681/2014 -DB, dated 19 -069 -2014. 3) Stay/waiver of pre-deposit-Mandatory pre-deposit of 7. 5% or 10%-Cannot be reduced by High Court As per the recent amendments, now before filing any appeal, the assessee needs to deposit some percentage (7. 5% or 10%) of the demand amount as Pre-Deposit, which is mandatory in nature. In a recent case, The Hon’ble High Court held that the assessee was bound to pay 7. 5% of the total service tax demand at the time of filing of appeal before the CESTAT. On the contention of the assessee that the levy itself is unwar¬ranted and as such the mandatory payment will cause undue hardship to them, the High Court observed that in terms of the provisions of the Act, payment of 7. 5% of the total tax demand is mandatory and that cannot be reduced by this Court and further, the petitioner could raise all the points raised before this Court before the CESTAT to substantiate its case. (Sree Annapoorna Hospitality Services P. Ltd. v. CCCE&ST (Mad-HC) W. P. No. 9619 of 2015 & M. P. No. 1 of 2015, dated 1 April 2015. )

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER 2015 MONTHLY DUE DATES SPCM ACTIVITIES 1. INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora Compilation of Decisions in relation to Sec. 14 A of Income Tax Act, 1961 If the ITAT has recorded a finding of fact that assessee has sufficiently explained whether or not any expenditure was incurred for earning exempt income then, High Court would not interfere with such a finding. [CIT v. Crish Park Vincom Ltd. , (2015) 59 taxmann. com 25 (Cal), (2015) 371 ITR 15 (Cal)(Mag), (2015) 232 Taxman 574 (Cal) (assessment year not mentioned)] 2. If expenditure was actually incurred for earning exempt income but not claimed as a deduction, then there cannot be any further disallowance under section 14 A. [DCIT v. Trade Apartment Ltd. , ITA No. 1277/Kol/2011 (assessment year 2008 -09)] 3. Revenue is required to establish that interest bearing funds were actually used to make investments earning exempt income. In absence of sufficient evidence, the disallowance under section 14 A cannot be sustained. [Brigade Enterprises Ltd. v. ACIT, (2015) 44 CCH 313 (Bang Trib), (assessment year 2010 -11)] 4. Net interest is to be considered for disallowance under section 14 A when interest is earned as well as expenses are incurred. [ITO v. Adani Infrastructure Services Pvt. Ltd. , (2015) 44 CCH 385 Ahd. Trib (assessment year 2009 -10)] FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY S P C M & ASSOCIATES

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY NEWSLETTER 6. AO is required to ascertain the nature of expenses incurred to earn the exempt income before making disallowance under section 14 A in a mechanical manner and applying Rule 8 D. [Swapna Murarka v. ACIT, (2015) 58 taxmann. com 369 (Mum Trib), (2015) 154 ITD 269 (Mum), (assessment year 2008 -09)] 7. AO can make a disallowance under section 14 A only if he is satisfied that claim made by the assessee is not correct. Even in a case, where AO rejects the claim of the assessee that no expenses were incurred to earn exempt income, it is not mandatory for him to apply Rule 8 D and he is free to make the disallowance on any reasonable basis. [Brigade Enterprises Ltd. v. ACIT, (2015) 44 CCH 313 (Bang Trib), (assessment year 2010 -11)] 8. In the formula laid down under Rule 8 D(ii), the quantum of total interest excludes interest which is directly attributable to any particular taxable income or receipt. [ITO v. Adani Infrastructure Services Pvt. Ltd. , (2015) 44 CCH 385 Ahd. Trib (assessment year 2009 -10) VAT UPDATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora Amount of expenditure disallowed under section 14 A cannot exceed exempt income earned. [Joint Investments Pvt. Ltd. v. CIT, (2015) 59 taxmann. com 295 (Del), (2015) 372 ITR 694 (Del), (2015) 275 CTR 471 (Del)(Mag) (assessment year 2009 -10)] INCOME TAX UPDATES SERVICE TAX UPDAATES Chartered Accountants 5. MONTHLY DUE DATES SPCM ACTIVITIES S P C M & ASSOCIATES

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER 9. S P C M & ASSOCIATES Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora It cannot be assumed that an assessee has not incurred any expenditure liable to disallowance under section 14 A when it has madeinvestment decisions which are highly strategic in nature, required to be made by highly qualified and experienced professionals after market research and analysis. investments in subsidiaries where it would also be required to attend board meetings and make policy decisions with regard to the investments made. [Coal India Ltd. v. ACIT, (2015) 172 TTJ 103 (Kol), para 5. 1 (assessment year 2008 -09)] 10. Disallowance computed under rule 8 D cannot be added in computation of book profit under section 115 JB. [Coal India Ltd. v. ACIT, (2015) 172 TTJ 103 (Kol) (assessment year 2008 -09) relying upon Goetze (India) Ltd. v. CIT, (2009) 32 SOT 101 (Del) (assessment year 2000 -01) and Cadila Healthcare Ltd. v. ACIT, ITA No. 354/Ahd/2012. The Delhi Tribunal decision has been reversed by the High Court. ] 11. If interest income of a branch from the overseas Head Office is treated as exempt on the ground of mutuality or “transaction with self”, the corresponding expenditure is disallowable under section 14 A [Oman International Bank Saog v. JDIT, (2013) 35 CCH 207 (Mum Trib) (assessment year 1998 -99, 1999 -2000, 2002 -03 and 2003 -04)]. 12. For the assessee, it is not mandatory but optional to apply rule 8 D. [CIT Vs. Taikisha Engineering India Ltd, (2015) 54 taxmann. com 109 (Del) (assessment year 2008 -09 and 2009 -10)].

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora 13. Disallowance under section 14 A(1) should be computed on a ‘reasonable’ basis having regard to the facts and circumstances of the case [Chanakya International Pvt. Ltd. v. ACIT, (2012) 33 CCH 272 (Del Trib) (assessment year 2009 -10)] 14. If own funds and other non interest bearing funds exceed the investments yielding exempt income, prima facie the presumption is that investment is made out of such funds and hence, there is no disallowance under section 14 A [ACIT v. Hind Industries Ltd. , (2013) 35 CCH 415 (Del Trib) (assessment year 2008 -09); T and T Motors Ltd. v. ACIT, (2015) 37 ITR (Trib) 682 (Del) 2 (assessment year 2009 -10)] 15. Common expenditure in the nature of insurance expenses, bank charges, audit fees, repairs and maintenance, stamp duty, etc. could be attributable for the earning of exempt income [Sanjay Kumar J. Poddar v. ACIT, (2015) 54 taxmann. com 260 (Mum Trib), para 18 (assessment year 2008 -09)] 16. Expenditure disallowable under section 14 A cannot be more than exempt income [CIT v. Taikisha Engineering India Ltd. , (2015) 54 taxmann. com 109 (Del) (assessment year 2008 -09 and 2009 -10)] 17. Expenditure in relation to dividend from foreign companies is not subject to disallowance under section 14 A [Everest Kanto Cylinder Ltd. v. ACIT, TS-138 -ITAT 2015(Mum) (assessment year 2009 -10)].

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora 18. Expenditure in relation to investment in subsidiary for acquiring controlling interest and not for earning income out of such investment is not subject to disallowance under section 14 A [DCIT v. Selvel Advertising P. Ltd. , (2015) 37 ITR (Trib) 611 (Kol) (assessment year 2006 -07 to 2010 -11)]. 19. Section 14 A does not apply to expenditure in relation to investment in growth mutual funds which do not yield any dividend / exempt income [Manugraph India Ltd. v. DCIT, ITA No. 4761/Mum/2013 (assessment year 2008 -09)]. 20. The satisfaction by the CIT(A) could be considered as satisfaction by the AO for the purposes of section 14 A(2) [T and T Motors Ltd. v. ACIT, (2015) 37 ITR (Trib) 682 (Del) (assessment year 2009 -10)]. 21. In view of the mandatory formula under rule 8 D(2)(ii), the principle of presumption of own funds being invested cannot be applied at the stage of application of rule 8 D(2)(ii) [CIT v. Taikisha Engineering India Ltd. , (2015) 54 taxmann. com 109 (Del) (assessment year 2008 -09 and 2009 -10)]. 22. For rule 8 D(iii), the term ‘investments’ excludes investments in foreign subsidiaries [Everest Kanto Cylinder Ltd. v. ACIT, TS-138 -ITAT-2015(Mum) (assessment year 2009 -10)].

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora 23. Some expenditure can always be attributed to earning of exempt income and could be disallowed under section 14 A(1). [Inautix Technologies India P. Ltd. v. ACIT, (2015) 42 ITR(Trib) 324 (Chny) (assessment year 2008 -09); Manali Petrochemicals Ltd. v. DCIT, (2015) 42 ITR(Trib) 1 (Chny) (assessment year 2007 -08)] 24. Disallowance under section 14 A could be made even if no exempt income was earned. [Lakozy Motors (P. ) Ltd. v. ITO, (2015) 61 taxmann. com 133 (Mum Trib) (assessment year 2009 -10)] 25. Where the borrowing under the cash credit account is within the drawing power (i. e. , the amount that the assessee-borrower could validly draw or avail in terms of the relevant loan agreement), the presumption, both on facts and in law, would only be of the entire sum as having been utilized toward the intended business purpose/s and no disallowance could be made under section 14 A. [Lakozy Motors (P. ) Ltd. v. ITO, (2015) 61 taxmann. com 133 (Mum Trib) (assessment year 2009 -10)] 26. Where the investment in securities had been made out of common pool of funds and not out of specific fund / source, disallowance of interest could be made under section 14 A, even if assessee’s current deposits exceeded its investments yielding tax-free returns. [HDFC Bank Ltd. v. DCIT, (2015) 61 taxmann. com 361 (Mum Trib), TS-553 -ITAT-2015(Mum)(assessment year 2008 -09)].

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Sec. 14 A of Income Tax Act, 1961 - CA Suhas P. Bora 27. Invocation of section 14 A is not automatic and the requirement to determine of the amount of expenditure incurred in relation to exempt income is triggered only if the AO records a finding that he is not satisfied with the correctness of the claim of the assessee [CIT v. I. P. Support Services India (P) Ltd. , TS-573 -HC-2015(Del) (assessment year 2008 -09)]. 28. Where the AO after considering the submissions made by the assessee computed the disallowance under section 14 A, CIT could not resort to revisionary proceedings under section 263 without bringing on record any material to demonstrate that the view taken by AO was an impermissible view. [Deep Industries Ltd. v. CIT, (2015) 61 taxmann. com 348 (Ahd Trib) (assessment year 2009 -10)]

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Chartered Accountants Works Contract under MVAT Act- Adv. Abhay H. Bora Provisions of Works Contract under MVAT Act, 2002 2015 MONTHLY DUE DATES S P C M & ASSOCIATES 1. Composition Scheme for Works Contract [Section 42(3)] • • • Option to contractors — Contract wise Total contract value xxxx Less : Sub-contracts (RD) xxxx Balance contract value xxxx Rate of Composition from 1 -4 -2005 to 20 -6 -2006 8% From 20 -6 -2006 Notified construction contracts 5% Other contracts 8% Such composition sum can be collected separately, to the extent payable by a registered dealer, on any sale of goods [Sec. 60(2)]. Dealers executing works contracts opting for composition may issue ‘ Tax Invoice’ [Sec. 86(4)]. They can also issue normal bill/invoice/cash memo. No need to apply for permission. Not applicable to inter-State sales liable to pay tax under the CST Act. Notified Construction contracts : - The State Government has issued Notification No. VAT. 1506/CR. 134/Taxation-1, dated 30 -11 -2006, specifying contracts to be treated as construction contracts, for the purpose

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY NEWSLETTER VAT UPDATES Any SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Works Contract under MVAT Act- Adv. Abhay H. Bora A) Contracts for construction of, — SPCM ACTIVITIES works Chartered Accountants of 5% composition. Accordingly, following contracts are specified: — MONTHLY DUE DATES INCOME TAX UPDATES S P C M & ASSOCIATES B) Buildings, Roads, Runways, Bridges, Railway over bridges, Dams, Tunnels, Canals, Barrages, Diversions, Rail tracks, Causeways, Subways, Spillways, Water supply schemes, Sewerage works, Drainage, Swimming pools, Water Purification plants and Jettys (A) above, if such works contracts are awarded and executed before the completion of the said contracts. 2. New composition scheme for developers: – While presenting budget for the year 2010 -11 the Finance Minister has proposed to introduce a composition scheme for developers–this scheme will be applicable for the agreements of development entered after 1 -4 -2010. Details of the scheme is Notified in the Notification VAT. 1510/CR-65/TAXATION-1. DATED 9 TH JULY, 2010. 3. Land Deduction Rule 58(1 A) Amendment as per Notification No. VAT-1507/CR-53/Taxation-1, Dated 1 ST JUNE, 2009. – Rule 58 (1 A) In case of a construction contract, where along with the immovable property, the land or, as the case may be, interest in the land, underlying the immovable

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Works Contract under MVAT Act- Adv. Abhay H. Bora property is to be conveyed, and the property in the goods (whether as goods or in some other form) involved in the execution of the construction contract is also transferred to the purchaser such transfer is liable to tax under this rule. The value of the said goods at the time of the transfer shall be calculated after making the deductions under sub-rule (1) and the cost of the land from the total agreement value. The cost of the land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the 1 st January of the year in which the agreement to sell the property is registered: Provided that, deduction towards cost of land under this sub-rule shall not exceed 70% of the agreement value. ” NOTE – THE SAID SUB–RULE 1 A IS DELETED FROM 1 -4 -2005 VIDE NOTFN. DATED. 1 -82012. 4. Determination of taxable Sale Price as per Rule 58 (1 B)(a) Where the dealer undertakes the construction of flats, dwellings, buildings or premises and transfers them in pursuance of an agreement along with the land or interest underlying the land then, after deductions under sub-rules (1) and (1 A) from the total contract price, the value of the goods involved in the works contract shall be determined after applying the percentage provided in column (3) of the following TABLE depending upon the state at which the purchaser entered into contract.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES MONTHLY NEWSLETTER WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Chartered Accountants Works Contract under MVAT Act- Adv. Abhay H. Bora Sr. No. Stage during which the developer enters into a contract with the purchaser Amount to be determined as value of goods involved in works contract (1) (2) (3) (a) Before issue of the Commencement Certificate 100% (b) From the Commencement Certificate to the completion of plinth level 95% (c) After the completion of plinth level to the completion of 100% of RCC framework 85% (d) After the completion of 100% RCC framework to the Occupancy Certificate 55% (e) After the Occupancy Certificate Nil% SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – S P C M & ASSOCIATES (b) For determining the value of goods as per the Table clause (a), it shall be necessary for the dealer to furnish a certificate from the Local or Planning Authority certifying the date of completion of the stages referred above and where such authority does not have a procedure for providing such certificate then such certificate from a registered RCC consultant.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Works Contract under MVAT Act- Adv. Abhay H. Bora These sub-rules were inserted by Notification No. VAT 1513/CR-147/Taxation-1, dated 29 th January, 2014 w. e. f. 20 th June, 2006. (1 C) If the dealer fails to establish the stage during which the agreement with the purchaser is entered, then the entire value of goods as determined after deductions under sub-rules (1) and (1 A) from the value of the entire contract, shall be taxable. ] 5. Input tax credit § Set-off on opening stocks as on 1 -4 -2005, allowable, provided the goods are resold (i. e. , used in the same form) in works contract before 31 -12 -2005 and stock statement is submitted in Form No. 6. § If goods lying in opening stock as on 1 -4 -2005 on which some processes are carried out and then used in Works Contract, then no set-off is available. § Set-off on local RD purchases of any goods, effected on or after 1 -4 -2005, will be allowed after reductions as provided for. § Set-off on goods used for works contract by the contractor/sub-contractor § Works contract — opted for tax provisions — Full set-off § Works contract — opted for Composition Scheme — Set-off shall be reduced by 9/25 i. e. , 36% (i. e. , allowable only 64%) from 20 -6 -2006 — for construction contract — Retention at 4%.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Works Contract under MVAT Act, - Adv. Abhay Bora 6. Main contractors and sub-contractors Relationship shall be deemed to be that of the Principal and Agent [Section 45(4)]. • Their liability to pay tax shall be joint and several. • Deductions will be given to either, based on producing prescribed Certificate/ Declaration i. e. , for main contractor, Form Nos. 406 and 409 to be issued and for subcontractor, Form Nos. 407 and 408 to be issued.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES Under SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants FEMA - CA Yogita S. Mutha FEMA, 1999 Acquisition of Immovable Property by NRI in India In this newsletter we will study the Acquisition of Immovable Property in India by a person resident outside India, i. e. , by a NRI / PIO / foreign national of non-Indian origin by way of purchase / gift / inheritance. Q 1. Who can purchase immovable property in India? Ans: immovable property in India: i) Non-Resident Indian (NRI) ii) Person of Indian Origin (PIO) The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India. Q 2. Can NRI/PIO acquire agricultural land/ plantation property / farm house in India? Ans : No.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY NEWSLETTER Q 3. Ans: MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES Q 4. VAT UPDATES There Ans: SERVICE TAX UPDAATES Can COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Q 5. S P C M & ASSOCIATES Chartered Accountants FEMA - CA Yogita S. Mutha purchase? general permission, is not required to file any documents/reports with the Reserve Bank. How many residential / commercial properties can NRI / PIO purchase under the general permission? that can be purchased. property purchased by NRI / PIO? Ans: No. Q 6. immovable property in India? Ans: purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. However, he / she can acquire or transfer immovable property in India, on lease, not exceeding five years. In such cases, there is no requirement of taking any permission of /or reporting to the Reserve Bank.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 Can HOME EDITORIAL Yes, 2015 MONTHLY NEWSLETTER Q 7. Ans: MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Q 8. Ans: S P C M & ASSOCIATES Chartered Accountants FEMA - CA Yogita S. Mutha property in India? Section 2(v) of FEMA, 1999 can purchaseimmovable property in India, but the person concerned would have to obtain the approvals and fulfil the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. The onus to prove his/her residential status is on the individual as per the extant FEMA provisions, if required by any authority. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank. property in India? business in India, in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through the proper banking channels. A declaration in form IPI should be filed with the Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for the purpose of borrowings. On winding up of the business, the sale proceeds of such

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Q 9. S P C M & ASSOCIATES Chartered Accountants FEMA - CA Yogita S. Mutha property can be repatriated only with the prior approval of the Reserve Bank. Further, acquisition of immovable property by entities incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan and who have set up Branch Offices in India and would require prior approval of the Reserve Bank. However, if the foreign company has established a Liaison Office in India, it cannot acquire immovable property. In such cases, Liaison Offices can acquire property by way of lease not exceeding 5 years. Can a NRI/PIO acquire immovable property in India by way of gift? Can a foreign national acquire immovable property in India by way of gift? freely Ans: PIOs NRIs can Yes, and acquire (a) immovable either property gift of way by from i) a person resident in India ii) an NRI iii) a PIO However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift. (b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATESA SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants FEMA - CA Yogita S. Mutha Q 10. Can a non-resident inherit immovable property in India? Ans: Yes, a person resident outside India i. e. i) an NRI; ii) a PIO; and iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India. Q 11. From whom can a non-resident person inherit immovable property? Ans: origin) can inherit immovable property from (a) a person resident in India (b) a person resident outside India However, the person from whom the property is inherited should have acquired the same in accordance with the foreign exchange law in force or FEMA regulations, applicable at the time of acquisition of the property. We will discuss transfer of immovable property by NRI in India in the next news letter.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Payment Process - Adv. Sanket S. Bora NOTE ON REPORT OF JOINT COMMITTEE ON GST PAYMENT Introduction : Ø The government should be appreciated for its earnest effort in keeping the nation upbeat on GST bill, despite of the logjam that stalled passing of GST amendment bill during monsoon session of Parliament. Ø The optimism of government in implementing GST with effect from 01. 04. 2016 reflected not just in words but in placing on public domain relevant documents which provides the impression that all preparation are going well from side of government and that the only hurdle is the passing of Constitution Amendment Bill. Ø Three reports of Joint Committee respectively on registration, refund and payments are already in public domain for feedback on or before 31 st October 2015. Tax Payment Process under the Present Indirect Tax Regime: 1. VAT/CST • Due date for Filing the Returns and Payment of Tax differs State to State. • Broadly, payment of tax is mandated through Online Banking through Portals of Approved Banks. 2. Service Tax • With effect from 1 st October 2014, every assesse shall electronically pay the Service

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Payment Process - Adv. Sanket S. Bora • Tax/Central Excise Duty payable by him, through Internet Banking vide Notification No. 9/2014 -ST and 19/2014 -CE(NT) dated 11. 07. 2014 respectively. • GAR-7 Challan is used for payment of Service Tax. • Accounting Codes: o Major Head-0044 -Service Tax o Minor Head-0504 -Primary Education Cess o Minor Head-0505 -Secondary and Higher Education Cess Excise • With effect from 1 st October 2014, every assesse shall electronically pay the Service Tax/Central Excise Duty payable by him, through Internet Banking vide Notification No. 9/2014 -ST and 19/2014 -CE(NT) dated 11. 07. 2014 respectively. • GAR-7 Challan is used for payment of Excise Duty. • Accounting Codes: - Major Head - 0038 - Union Excise Duty Salient Features of the Report of the Committee on Business Process for GST Payment: 1. Electronic Generated Challans: • Challan can be generated only from GSTN Common Portal. • No manual Challan to be used. • Unregistered Taxable Person can make payment of tax through tax authorities creating a challan or granting temporary registration number to them.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Payment Process - Adv. Sanket S. Bora 2. GST Payments Through Challan Only: • GST payments to be allowed only by way of a E-Challan. • Payments made by Book Adjustment in case of Government Departments or Payments made by Debit to Export Scrips will not be allowed. 3. Separate Challan for Non-GST: • These challans will be applicable to the taxes and duties that remain outside the purview of GST. • The Payments will continue to be collected in the manner prescribed under existing accounting procedures/rules/manuals, etc. 4. Hassle Free Modes of Payment of Tax : • Three modes of payment of tax under GST regime are proposed : A. Internet Banking or Debit Cards/Credit Cards. Payment of Tax would be made either through Internet Banking (Only Authorized Banks) or Debit Card/Credit Card, using Payment Gateways. B. Over The Counter Payment (OTC) through Authorized Banks. • Payments to be made through Cheque, DD or Cash. • OTC will be available for payments up to Rs. 10000/- per challan only. • Taxpayers whose cheques have once bounced will be debarred from using this mode of payment.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants GST Payment Process - Adv. Sanket S. Bora C. Payment through NEFT/RTGS. • Payments can be made using banks, including other than authorized banks i. e. a bank where taxpayer may have account but that bank may not be authorized by Government to accept GST receipt. • Payments to be made in favour of RBI. • Taxpayer using this mode beyond the validity period (Seven Days) of the CPIN more than two times would be barred by GSTN from availing this mode of payment. 5. Speedy Accounting and Reporting. • Four Main Accounting Codes being CGST, SGST, IGST and Additional Tax are proposed. • Further, Five Sub-codes for Each Main Accounting Code being Tax, Interest, Penalty, Fees and Others are proposed. 6. Other Features: • Warehousing of Digital Challans will be made for reporting and data analysis. • Detailed procedures for sharing of information by GSTN, banks, RBI and Tax authorities have been prescribed. • Electronic Reconciliation of all receipts. • Faster remittance of tax. • Logical Tax Collection data in electronic format.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES MONTHLY NEWSLETTER Issue: It is proposed that CGST, IGST and Additional Tax components will be accounted for under Consolidated Fund of India (CFI). Transfers of due IGST amount and Additional Tax to the States can thereafter be made there from as per the existing procedure. (Refer Para 94) Suggestion: Clarity over how IGST relating to Various Recipient States will be accounted to be provided in the report. 2. Issue: It has been proposed that Tax payers whose cheques are bounced will be barred from using the OTC mode of payment. (Refer Para 52) Suggestion: Specification regarding the duration of such penalty to be provided in the report. 3. Issue: It has been proposed that Tax payers using NEFT/RTGS mode of payment beyond the validity period of CPIN more than two times will be barred from using this mode of payment. (Refer Para 53) Suggestion: Specification regarding the duration of such penalty to be provided in the report. VAT UPDATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY GST Payment Process - Adv. Sanket S. Bora 1. INCOME TAX UPDATES WORKS CONSTRACT TAX UNDER VAT ACT Chartered Accountants Comments: SPCM ACTIVITIES SERVICE TAX UPDAATES S P C M & ASSOCIATES

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER 4. S P C M & ASSOCIATES Chartered Accountants GST Payment Process - Adv. Sanket S. Bora Issue: It has been proposed that Payments made by Book Adjustment in case of Government Departments or Payments made by Debit to Export Scrips will not be allowed(Refer Para 9). Suggestion: Currently DEPB/SEIS scrips are adjusted against various duty payments. It appears that now applying the above proposed provision, they can only be utilized against non GST payments such as customs duty. This may restrict the benefit conferred to license holders. Therefore, report should also address the status of license holders under GST under transitional provisions.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL MONTHLY NEWSLETTER SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY Chartered Accountants Service Tax on Manpower Supply - CA Chetan R. Parakh SERVICE TAX CORNER 2015 MONTHLY DUE DATES S P C M & ASSOCIATES ANALYSIS OF MANPOWER SUPPLY SERVICES Definition: Manpower supply means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control. (Rule 2(g) of service tax rules) In view of above definition, where supplied manpower are working under supervision or control of service recipient then it will fall under the ambit of “Supply of manpower” and thus eligible to service tax under the stated category. Activities Consider as manpower Service: Employees sent for deputation from one company to another covered under manpower supply service. Supply of manpower on man-hour basis. Labour supply for execution of job and under control of principal employer. Work carried out on lump sum basis as a contractor, does not eligible to Service Tax under the Supply of Manpower Services -M/s. Shri Bileshwar Khand Udyog Sahakari Mandali Limited Vs. CCE [(2013) (Ahmedabad – CESTAT] Cleaning service, piece basis/job basis contract are not manpower services. Service Tax: 1. As per the Notification No. 30/2012 -Service Tax dated 20 th June 2012, reverse charge mechanism of service tax has become applicable on manpower service (S. No. 8) w. e. f.

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Service Tax on Manpower Supply - CA Chetan R. Parakh 1 st July 2012. Under this scheme, the service tax was payable under partial reverse charge mechanism i. e 75% by service receiver and 25% by service provider but after budget, 2015 w. e. f. 01 st April, 2015 the 100% service tax is payable by service receiver under full reverse mechanism (Notification no. 7/2015 -ST dated 1 st March, 2015) The reverse charge is applicable if service receiver and service provider satisfy the following conditions: - Service Provider located in taxable territory Individual (Proprietor) Partnership Firm (Registered or unregistered) HUF Association of Persons Limited Liability Partnership Service Receiver located in taxable territory Company / Body Corporate 2. As per Notification no. 33/2012 -St dt. 20 -06 -2012 no threshold exemption of Rs. 10 lacs is available to Service Receiver as this exemption is available to Service Providers only. 3. The service receiver has to register himself under service tax if he is already register then is has to add all the specific services in the registration certificate (ST-2)

o Audit o Direct Taxes o Indirect Taxes o Company Law o Management Consultancy NOVEMBER 2015 HOME EDITORIAL 2015 MONTHLY DUE DATES SPCM ACTIVITIES INCOME TAX UPDATES VAT UPDATES SERVICE TAX UPDAATES COMPILATION OF DECISIONS SEC 14 A OF INCOME TAX ACT – WORKS CONSTRACT TAX UNDER VAT ACT FEMA- INVESTMENTS BY RESIDENT OUTSIDE INDIA GST PAYMENT PROCESS SERVICE TAX ON MANPOWER SUPPLY MONTHLY NEWSLETTER S P C M & ASSOCIATES Chartered Accountants Service Tax on Manpower Supply - CA Chetan R. Parakh Reverse Charge not apply in the following cases: - 1. Supply of labour without superintendence and control of receiver shall be not categorized under “Supply of Manpower” and consequently it cannot fall within the ambit of reverse charge envisaged in the notification 30/2012 -ST and the service provider would only be liable to pay service tax. 2. If service receiver is located in non taxable territory or charity or non-profit organization or government, in the case reverse charge mechanism will not apply. 3. If service receiver is Individual, HUF, Partnership Firm, Proprietary Firm or AOP, then Reverse Charge Mechanism shall not apply. 4. If Service Provider is a Company, then Reverse Charge Mechanism shall not apply. Cenvat Credit : - 1. This service tax liability has to be paid in cash. No Cenvat Credit can be utilized to meet out this liability as Cenvat Credit facility is available for output services only. 2. In case of Input Service where service tax is paid under reverse charge by service recipient, the CENVAT credit in respect of such input service shall be allowed after payment through GAR-7 challan, on the basis of such paid challan only. Credit will be allowed on the date of payment only. 3. f service provider has paid some portion of service tax then service receiver can claim Cenvat on input services on the invoice date itself. 4. In case of Service Providers rendering the services all of which falls within the ambit of complete reverse charge mechanism then he cannot avail Cenvat credit of input or input services.

S P C M & ASSOCIATES Chartered Accountants