Companies Bill

The Union Cabinet on Thursday approved the long-awaited Companies Bill that will completely recast the key provisions of the decades-old Companies Act 1956.

It will bring in a new corporate responsibility framework, a rigorous regime and greater role for independent directors, more responsibility on independent directors and introduces new concepts like one person company, class action suits and women directors on boards.

"The Cabinet has cleared the Companies Bill, 2011. It is likely to be tabled in the ongoing Winter Session," Corporate Affairs Minster Veerappa Moily said after the Cabinet meeting. The Bill is unlikely to face hurdles in Parliament as it had been vetted by BJPleader Yashwant Sinha-headed Standing Committee on Finance.

The government has been attempting an overhaul of the Companies Act for almost a decade. Experts say the move will bring about a complete change in the corporate law framework, in line with the changing times.

"Corporate laws have to modernise and keep pace with the business environment. The Companies Act is perhaps, the only fundamental legislation that is still based on the 1956 framework. The nod is a welcome move and hopefully, this time, we will see quick and effective legislation of the Bill," said Vivek Gupta, partner, BMR Advisors.

The Satyam scam, which exposed the weakness in the corporate governance framework, the role of auditors and independent directors, forced the government to put the process on the fast track.

The Bill was originally introduced in the Lok Sabha in 2008 but had lapsed because of change of government. It was reintroduced in August 2009. The Bill suggests that profit-making companies above a certain threshold will have to spend at least 2% of the average profits in the preceding three years on CSR activities and make a disclosure to shareholders about the policy adopted in the process.

The government diluted the provision after stiff opposition from the industry and decided not to make 2% CSR spend mandatory. The Bill also seeks to provide for class action suits and a fixed term for independent directors. Among other things, it proposes to tighten laws for raising money from the public.

The Bill also seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence. The Bill will give more powers to the Serious Frauds Investigation Office. The Cabinet had deferred the Bill last month after the Finance Ministry and the Planning Commission aired the Sebi's concerns over conflict of some provisions in the Bill with the existing laws and suggestion of further fine-tuning it.

The Corporate Affairs Ministry had moved a fresh proposal after resolving the overlap issues, and giving Sebi regulations a greater force in case of a conflict with any other law. "The Bill has been through various iterations and the industry anxiously awaits a new corporate law that would lay stress on responsible self-regulation," said Chandrajit Banerjee, Director General, CII.

RBI circular

RBI Circluars dated 04.11.2011 regarding : 

1. RBI has reduced Validity Period of Cheques and Demand Drafts from 6 months to 3 months w.e.f. 01.04.2012.

2. Demand Drafts of Rs.20,000/- and above are issued invariably with Account Payee Crossing.

Details of the Circulars is as per attachment.

Payment of Cheques/Drafts/Pay Orders/Banker’s Cheques

RBI/2011-12/251

DBOD.AML BC.No.47/14.01.001/2011-12

November 4, 2011

The Chairmen/Chief Executive Officers

All Scheduled Commercial Banks (excluding RRBs)/Local Area Banks

Dear Sir,

Payment of Cheques/Drafts/Pay Orders/Banker’s Cheques

In India, it has been the usual practice among bankers to make payment of only such cheques and drafts as are presented for

payment within a period of six months from the date of the instrument.

2. It has been brought to the notice of Reserve Bank by Government of India that some persons are taking undue advantage of the said practice of banks of making payment of cheques/drafts/pay orders/banker’s cheques presented within a period of six

months from the date of the instrument as these instruments are being circulated in the market like cash for six months. Reserve Bank is satisfied that in public interest and in the interest of banking policy it is necessary to reduce the period within which

cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, Reserve Bank hereby directs that with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

3. Banks should ensure strict compliance of these directions and notify the holders of such instruments of the change in practice by printing or stamping on the cheque leaves, drafts, pay orders and banker’s cheques issued on or after April 1, 2012, by issuing suitable instruction for presentment within the period of three months from the date of the instrument.

4. Please acknowledge receipt

Yours faithfully,

(Deepak Singhal)

Chief General Manager in-Charge

ETDS Return Due Date Extended

Income Tax department has changed the date for filing of quarterly E TDS return vide notification 57/2011 dated 24.10.2011.In this notification due date to filing etds returns has been extended by 15 days for first three quarters of the Financial year but remains the same for last quarter ending 31st March. These amendment is applicable form 01.11.2011 so applicable from 3rd quarter of F.Y. 2011-12.This amendment is applicable ONLY FOR GOVERNMENT OFFICES.




Notification reads as follows:-

INCOME-TAX (EIGHTH AMENDMENT) RULES, 2011 - AMENDMENT IN RULES 31A AND 37BA

NOTIFICATION NO. 57/2011 [F.NO. 142/23/2011-SO(TPL)]/S.O. 2429 (E), DATED 24-10-2011

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Eighth Amendment) Rules, 2 (2) They shall come into force on the 1st day of November, 2011.

2. In the Income-tax Rules, 1962, —

(A)  in rule 31A—

(a)  for sub-rule (2), the following sub-rule shall be substituted, namely:—

      "(2) Statements referred to in sub-rule (1) for the quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by

 (i)  the due date specified in the corresponding entry in column (3) of the said Table, if the deductor is an office of Government; and

(ii)  the due date specified in the corresponding entry in column (4) of the said Table, if the deductor is a person other than the person referred to in clause(i)

Table

 Date of ending of    Due date for                 Due date for Others

 the quarter of the        Government Offices

 financial year

30th June                   31st July of the financial year         15th July of the financial year

30th September         31st October of the financial year    15th October of the financial year

31st December           31st January of the financial year 15th January of the financial year

31st March           15th May of the financial year         15th May of the financial year

  immediately following the financial   immediately following the financial

  year in which deduction is made      year in which deduction is made

 

 

(b)  in sub-rule (4), after clause (vi), the following clause shall be inserted, namely;—

      "(vii) furnish particulars of amount paid or credited on which tax was not deducted in view of the furnishing of declaration under sub-section (1) or sub-section (1A) or sub-section (IC) of section 197A by the payee."

(B) in rule 37BA, in sub-rule (2), for clause (i), the following clause shall be substituted, namely:—

      "(i) where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee :

      Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1)."

Last Date of DVAT Return

Today on 11 October,2011 the Sales Tax Bar Association conducted a strike after which the Commissioner of DVAT said that the Last date of filling DVAT returns for August,2011 will be extended upto 31 October,2011 and for September,2011 the last date will be 7 November.
Also he agreed that assesses will be allowed to file online return without form 2A & 2B. These forms will be manually deposited as it was done before.
All the above written information will be confirmed by a circular till Friday.

Circular 12 of DVAT DATED 3 October,2011

LAST DATE OF FILLING OF VAT RETURN ONLINE EXTENDEDConsidering the request of sales tax bar association, the VATdepartment has extended the last date of online filling of the return for tax period of August,2011 along with Annexures 2A & 2B through new software aplication to 14.10.2011  and the hard copy can be submitted by 17.10.2011 

DVAT

DVAT Returns. Public Notice:

Now Annexure 2A and 2B are mandatory along with returns to be filed under section 25 of DVAT act 2004

C Forms

C Forms Under CST ACT 1956

SOME ISSUES PERTAINING TO C FORMS UNDER CST ACT 1956

Under CST Act 1956 there are lot of Forms and declarations which help in saving CST on the interstate transactions. C form is an important and foremost common among dealers registered under CST Act 1956 engaged in interstate sales or purchases.

What is C form:

As per section 8(1) (b) of CST Act 1956 sales tax on interstate sales is 2% or state rate whichever is lower, if the sale is to a registered dealer and goods are covered in the registration certificate of the purchasing dealer. Otherwise the tax applicable is the state rate applicable on the goods sold.

Where from to get the C forms: 

The blank C forms are issued by the sales tax authorities to the purchasing dealer who has made interstate purchases on concessional rate of CST. A dealer is entitled to obtain blank C forms from the sales tax authorities. If the registration is wrong, authorities can amend or cancel the same. However, as long as his registration is in force, blank C forms must be issued to him- Colourgraphs v. STO-(1993) 88 STC 347 (Ker HC).

However the CST rules may provide for non issue of blank C forms to a defaulting dealer in which case no blank forms may be issued. Similar rule was upheld as valid in S.N.E (India) P Ltd v. CST (2003) 131 STC 417 (Del HC DB).

Number of Transactions per C forms:

One declaration in C form can cover all transactions in one quarter, irrespective of total amount/value of transactions during the quarter. (Quarter means period of three months). If a transaction covers more than one quarter, separate C form is required to be issued for each quarter.

Original, Duplicate and Counterfoil copy of C forms:

The C form has been prescribed in three parts Original, Duplicate and Counterfoil. All three parts are identical in contents.

Section 8(4) of and Rule 12(1) do not specify which part of C form should be produced before the assessing authority.

However, if CST rules as ammended by states require submission of original copy, then only that copy will have to be submitted.

Therefore one need to check the relevant CST state rules if any, ammended to this effect before furnishing the duplicate copy of C form.

If the buyer sends both the copies of C form marked as Orginal and Duplicate to seller and if both are lost, then the following procedure should be followed:

If duly completed C form is lost when it was in the custody of purchasing dealer or when the form was in transit to selling dealer, the purchasing dealer will have to furnish Indemnity Bond to sales tax authorities from whom the blank C form was obtained. If the duly completed C form is lost by the seller, then he has to submit indemnity bond to sales tax authorities of his state. The prescribed form of Indemnity bond is in Form G.

If C form is lost(both original and Duplicate copies), the purchasing dealer can issue duplicate declaration in C form with clear declaration in red ink that this is a duplicate declaration being submitted. Details of earlier lost certificate number and of selling dealer has to be given. 

It may be noted that there is no provision to submit certified Xerox copy of earlier certificate and Xerox copy is not acceptable- J N Jetiwa v. state of maharashtra- (1995) 11 MTJ 491 (Mah Trib).

Selling dealer is not liable for false declaration by buyer: 

The purchasing dealer can issue C form for purchase of only those goods which are mentioned in his registration certificate, for other goods no C form can be issued by the buyer, if the buyer so issues C form for goods not mentioned in his R.C. then it will be misuse of C form and the penalty can be imposed on buyer.

But the selling dealer has only the obligation to satisfy himself that the purchasing dealer is a registered dealer for this he can rely upon the representation made by the buyer in the C form. If the purchaser misapplies the goods, the penalty can be imposed on the buyer, but selling dealer, who has relied upon C form issued to him, cannot be held liable.

Selling dealer is not required to hold an enquiry with regard to purpose for which the materials have been purchased by purchasing dealer. Once he furnishes necessary declaration forms from purchasing dealer, nothing more is required to be done.- K G Industries v. STO (1999) 113 STC 49 (MP HC).

Duly filled C form should be issued to seller:

Sometimes, C form is obtained in advance and particulars of invoice etc. are filled in later. This is not legally correct, as section 8(4)(a) uses the words ‘to whom goods are sold’. Thus, duly completed C form should be obtained only after sale. Otherwise C form can be rejected.- Salem Magnesite v. State of Tamil Nadu (1999) 116 STC 110 (Mad HC DB)

Issue/receipt of C form against goods used in works contract: 

Goods used in executing works contract are deemed to be sold and there is sale of material used in the execution of works contract. Hence C form can be issued for materials used in works contract, if the goods are included in the registration certificate of the dealer- United Ltd. v. CTO (1991) 83 STC 207(AP HC)

No C form for rejected goods: 

It was held in Lakshmi and co. v. State of Kerala ( 2001) 121 STC 423 (Ker HC DB) F form can be issued only in case of completed transactions and not in case of rejection goods. Decision in this case of F forms should also be applicable on C forms. The reason is if goods are rejected, buyer cannot issue a certificate that the goods are for manufacture or for resale.

Declaration in C form cannot be rejected for minor defects: 

In Rajsthan Pipes v. CTO (2004) 138 STC 383 (Cal HC), it was held that benefit cannot be denied on ground of omission like date of registration and minor variation in amount.

The authorities should allow ractification of defects in declarations: If there are minor defects in the C form submitted (e.g. challan no., date etc. not mentioned, or name of dealer is mis-spelt), the officer should give reasonable opportunity to the dealer to remove the defects- Anil Kumar Dutta v. Addl Member (1967) 20 STC 528 (Cal)

In State of Orrisa v. Orissa Polish Works (1970) 26 STC 480 (Ori HC), it was held that C form should be returned to the selling dealer for ractification. Selling dealer should be allowed reasonable opportunity for this purpose.

When to submit the C form with the authorities by the seller: 

As per rule 12(7) C form can be submitted to the assessing authority within three months after the end of period to which it relates. STO can allow further time for submission of the form, if there is sufficient cause for not submitting the form in time.

C form can be submitted even at appellate stage if sufficient cause shown: 

Hence the C forms can be submitted even after the filling of annual statement i.e. at the time of assessment or afterwards and the same can be taken cognizance of since no loss is caused to the revenue by not filling the C forms along with annual statement.

C forms generally should be submitted before the first assessing authority. After the assessment, appellate authority can allow submission of C forms if sufficient cause is shown for not submitting the C form before the assessing authority. This is because the appellate authority has powers of reassessment. Appeal in taxation matters is different from power of appellate court in civil matters. The appellate authority is in nature of revising authority. He can revise every process which led to the ultimate computation or assessment- State of AP v Hyderabad Asbestos Cement Products 94 STC 410.

It is advisable that the dealer should maintain proper record of follow up and efforts made with buyer to obtain C forms to prove that he made all possible attempts to obtain C forms within time. In such case it will help proving the sufficient cause for not submitting the C form within time and appellate authority will accept the C forms at appellate stage if obtained after assessment.

NOTIFICATION NO. 45/2011 - SERVICE TAX , DATED 12-9-2011

SECTION 65(105)(zzzzm) OF THE FINANCE ACT, 1994 - LEGAL CONSULTANCY SERVICES - EXEMPTION TO SERVICE PROVIDED BY AN ARBITRAL TRIBUNAL IN RESPECT OF ARBITRATION TO ANY BUSINESS ENTITY

NOTIFICATION NO. 45/2011 - SERVICE TAX , DATED 12-9-2011

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services referred to under item (iii) of sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994.

2. This notification shall come into force on the date of its publication in the Official Gazette.

To clarify sub-clause (zzzzm) of clause (105) of section 65 of Finance Act, 1994 reads as follows:-
 (zzzzm) to a business entity, by any other business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner: 
Provided that any service provided by way of appearance before any court, tribunal or authority shall not amount to taxable service.

Advance VAT in punjab..

The Punjab Value Added Tax (Third Amendment) Ordinance, 2011

(Punjab Ordinance No. 9 of 2011)

An

Ordinance

Further to amend the Punjab Value Added Tax Act, 2005.

 Promuglated by the Governor of Punjab in the Sixty-second Year of Republic of India.

Whereas the Legislative Assembly of the State of Punjab is not in session and the Governoris satisfied that circumstances exit, which render it necessary for him to take immediate action;

Now therefore, in exercise of the powers conferred by clause (1) of article 213 of the Constitution of India, the Governor of Punjab is pleased to promulgate the following Ordinance, namely:-

1.            Short title and commencement. (1) – This Ordinance may be called the PunjabValue Added Tax (Third Amendment) Ordinance, 2011.

(2) It shall come into force on and with effect from the date of its publication in the Official Gazette.

2.            Amendment in section 6 of Punjab Act 8 of 2005.—In the Punjab Value AddedTax Act, 2005 (hereinafter referred to as the principla Act), in section 6, after sub-section 6, the following sub-sections shall be added, namely:-

“(7) Notwithstanding anything contained in sub-section (1) to sub-section (6), the State Government shall charge the tax in advance on the import of goods to be notified in such manner, as may be prescribed, and at such rates, as may be notified, but not exceeding the rates applicable on such goods under the Act:

Provided that such goods are meant for sale or use in manufacturing or processing of any goods for sale:

Provided further that such tax collected in advance, shall be counted towards final liability of the taxable person at the end of each tax paid.

                     (8) The tax collected under the Punjab Tax on Entry of Goods into Local Areas Act, 2000, shall be deemed to have been collected under the Provisions of sub-section (7).”.

3.            Amendment in section 13 of Punjab Act 8 of 2005 – In the principla Act, in section 13, after sub-section (1), the following sub-section shall be inserted, namely:-

“(1-A) The tax collected in advance under sub-section (7) of section 6, shall be treated as Input Tax Credit.”

M/S Air Liquide North India Pvt vs Commnr. Of Central Excise, Jaipur

Issue for consideration is whether repacking of gas purchased in bulk after some testing processes would amount to manufacture..

Introduction:- The issue which falls for consideration in the present appeal is whether the treatment given or the process undertaken by the appellant to Helium gas purchased by it from the open market would amount to manufacture, rendering the goods liable to duty under Chapter Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985 (hereinafter referred to as `the Act'). Chapter Note 10 of Chapter 28 of the Act, in relation to `manufacture', reads as under: "10. In relation to products of this chapter, labelling or relabelling of containers and repacking from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture."
 In order to answer the aforesaid issue which arises for our consideration, it would be necessary to set out some facts giving rise to the present appeal. The appellant is engaged in the manufacture of Oxygen, Nitrogen, Carbon-di-oxide and other gases classifiable under Chapter 28 of the Act. The appellant had purchased Helium gas during the period commencing from December, 1998 to 31st March, 2001, from the market in bulk and repacked the same into smaller cylinders after giving different grades to it and then sold the same in the open market. The appellant purchased the said gas for Rs.520/- per Cum. Various tests were conducted on the gas so purchased and on the basis of the tests and some treatment given, the gas was segregated into different grades having distinct properties and sold at different rates to different customers.


Argument on behalf of Appelant:- Argued that the appellant had only conducted various tests like moisture test, etc. to determine quality and quantity of Helium gas in the cylinders. It was further submitted that even after the activity of testing, Helium gas remained as Helium gas only and there was no change in the chemical or physical properties. No new product, other than Helium gas came into existence and, therefore, it cannot be said that the appellant had carried on any manufacturing activity.


 When purchased by the appellant, was already marketable and, therefore, it cannot be said that the testing of the gas by the appellant had rendered the product marketable. In the circumstances, the process of testing cannot be said to be a manufacturing process, rendering the product marketable. It was also submitted that the crucial requirement for the application of the last portion of Chapter Note 10 of Chapter 28 of the Act is that by adoption of some treatment, the product should become marketable to the consumer. According to the learned counsel, the product, i.e. Helium gas was already in a marketable state when it was purchased by the appellant and, therefore, it cannot be said that the appellant made it marketable. To substantiate his claim, the learned counsel for the appellant relied on the cases of CCE v. LUPIN LABORATORIES 2004 (166) A116 (SC) and LAKME LEVER LTD. v. CCE 2001 (127) ELT 790 (T).
The learned counsel for the appellant brought to our attention a decision of this Court rendered in the case of BOC (I) Ltd. v. CCE 2003 (160) ELT 864 to substantiate his claim that the issuance of certificate along with the cylinder at the time of sale does not amount to re-labelling


Appeal of Respondent:-Per contra, the learned counsel for the respondent submitted that the testing of Helium gas comes under the category of "treatment" as mentioned in Chapter Note 10 of Chapter 28 of the Act and that the Tribunal has clearly given a finding to that effect.

issuance of a separate certificate along with cylinder at the time of sale containing all the details regarding moisture, purification, etc. amounted to re-labelling of the gas cylinders.


It is pertinent to note that when the appellant was asked about the process which was being carried out on Helium gas before selling it to its customers, the representative of the appellant had refused to give any detail with regard to the process because, according to him, that process was a trade secret and he would not like to reveal the same. Thus, the respondent or his subordinate authorities were not informed as to what was being done by the appellant to Helium gas purchased or what treatment was given to the said gas before selling the same to different customers at different rates with different certifications in different containers/cylinders. It is also pertinent to note that the gas which was purchased at the rate of about Rs.520/- per Cum. was sold by the appellant at three different rates namely Rs.700/-, Rs.826/- and Rs.1000/- per Cum. and thereby the appellant used to get 40% to 60% profit.


From the above undisputed facts, it is clear that the gas cylinders were not sold as such but they were sold only after certain tests or processes as specified by the customers of the appellant. It is also clear that only after the analysis and tests, it could be ascertained as to whom the gas was to be supplied and at what rate. The various tests resulted into categorization of the gas into different grades



The fact that the gas was not sold as such is further established from the fact that the gas, after the tests and treatment, was sold at a profit of 40% to 60%. If it was really being sold as such, then the customers of the appellants could have purchased the same from the appellant's suppliers. When this question was put to the officer of the appellant, he could not offer any cogent answer but merely stated that it was the customers' preference. Further, he did not give proper answer as to how the profit margin was so high. The appellant had supplied the gas not as such and under the grade and style of the original manufacturer but under its own grade and standard. Further, while selling the gas, different cylinders were given separate certificates with regard to the pressure, moisture, purification and quality of the gas. This explains the high price at which the appellant was selling the gas.



Therefore, in our opinion, the Tribunal has rightly observed that if no treatment was given to the gas purchased by the appellant, customers of the appellant would not have been purchasing Helium from the appellant at a price 40% to 60% above the price at which the appellant was purchasing.

For the aforetasted reasons, we agree with the Tribunal in holding that the appellant is liable to pay excise duty for the reason that it has manufactured Helium within the meaning of the term `manufacture' as explained in terms of Chapter Note 10 of Chapter 28 of the Act.

Deputation of Employees to other group or organisation is chargeable to service tax

It was a matter of debate for a long time that whether activity of lending employees to other organisation was liable to service tax. The issue gained more complexity when the employees were lent at the actual cost to the lending company. Calculation of actual cost of employees is also not an easy task. It includes many types of payments to them.

This issue is now clarified by the given letter in case of ONGC and now all pending cases have to be dealt in same manner.

SECTION 65(68) OF THE FINANCE ACT, 1994 - MANPOWER RECRUITMENT OR SUPPLY AGENCY'S
SERVICES - APPLICABILITY OF SERVICE TAX ON DEPUTATION OF ONGC OFFICERS IN DIRECTORATE
GENERAL OF HYDROCARBONS
LETTER [F. NO.137/35/2011 - SERVICE TAX], DATED 13-7-2011

Representation has been received seeking clarification on applicability of service tax under Manpower
Recruitment and Supply Service in respect of employees sent on deputation by ONGC to Directorate
General of Hydrocarbons (DGHC).

2. The matter has been examined and it is clarified that activity of ONGC for providing its staff on
deputation to DGHC for a remuneration in the form of reimbursement from DGHC, is chargeable to service
tax under 'Manpower Recruitment or Supply Agency's Service' in terms of section 65(105)(k) of the Finance
Act. As per section 65(68) of the Finance Act, Manpower Recruitment or Supply Agency means any person
engaged in providing any service, directly or indirectly,  in any manner for recruitment or supply of
manpower, temporarily or otherwise, to any other person.

3. In the said definition the key words are, any person; directly or indirectly; in any manner; and
temporarily or otherwise. It thus appears that  organizations that make available their staff to other
entities would be covered under the said definition. The motive for providing such manpower is of no
consequence. The requirement for taxability is that the person should be engaged in an activity that is
covered under section 65(105)(k) ibid. The volume of activity undertaken or the presence or absence of
the profit motive is irrelevant.

4. All pending issues may be decided accordingly.

In simple language following has been explained

The activity of ONGC of providing its staff on deputation to DGHC for a remuneration in the form of reimbursement from DGHC, is chargeable to service tax under 'Manpower Recruitment or Supply Agency's Service' in terms of Section 65 (105) (k) of the Finance Act.

As per Section 65 (68) of the Finance Act, Manpower Recruitment or Supply agency means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person.

In the said definition the key words are, any person; directly or indirectly; in any manner; and temporarily or otherwise.

thus appears that organisations that make available their staff to other entities would be covered under the said definition.

The motive for providing such manpower is of no consequence.

The requirement for taxability is that the person should be engaged in an activity that is covered under Section 65 (105)(k) ibid.

The volume of activity undertaken or the presence or absence of the profit motive is irrelevant.

Understanding VAT/ CST

. Introduction -

In this blog I will talk about the process of registration and Liability i.e " who and when should register " and about all the forms required for Registration. 

2. Registration and Liability - 

A Dealer is required to register under the Dvat act, if :

- The gross turnover in the current year exceeds 10 lakhs,

- Makes any Inter state sales

- Makes any inter state purchases for resale in delhi.

The t/o for registration does not include -

(a) sale of capital goods

(b) sale made in course of winding up of business.

Imp. - For dealers involved in work contrcts, the T/O inludes the total value of contract or contracts executed in Delhi.

The dealer fulfilling any of the above conditions mentioned above is liable to get registered by appling in " DVAT 04 " in 30 days of crossing the threshold limit for registration. Any delay in getting registred will attract a penalty of1000 per day.

No Registration Required -

The dealer dealing in exempted goods, is not required to apply for registration under the Dvat ACT.

Voluntary Registration -

Only a Registered dealer can issue a Tax invoice and claim tax credits.The tax charged by a dealer may be claimed as tax credit by the purchasing dealer.Keeping in view this benefit the act provided for voluntary registration od dealer if he does not fulfil the mandatory requirement .

How to Register ....?

An application for registration may be made in the prescribed Dvat 04 under central act with documents and other requirements. A registration under the central act automatically leads to registration under the state act.

The application can be submitted at " CENTRAL Registration Cell " at an office situated on the first floor of vyapar bhavan. The dealer is required to file an security of re 1 lakh alongwith the application of registration.

If the application for registration is found to be in order, the registration shall be granted from the date of receipt of application in " D vat 06 ".

In case there is any irregularity in the application, a notice in Dvat 05 shall be issued within 15 days from date of application. The ground on which application is rejected will be enumerated in the notice and applicant shall be provided 15 days time to reply such notice.

Ammendment of Registration -           

In the following cases the dealer shall inform the department in form NO. Dvat 07 within 1 month, if he,  

(a) sells or disposes his business in whole or in part,

(b) There is a change in any place of business,

(c) Discontinues his business

(d) changes the name, style, constitution or nature of his business.

The department concerned shall carry out the ammendments in form Dvat 08  and inform the dealer after making any enquiry if deemed necessary. The Dept. shall make ammendment from the date requested by the dealer.