Q2.
Explain the procedure for registration under Service Tax?
ANSWER SERVICE TAX REGISTRATION PROCEDURE :
Every person liable to pay service tax is required to register himself by making an application to SCE as per section 69. The service provider before registering himself shall ensure that he has crossed the exemption limit of registration for the small service provider which is Rs. 10 lakhs, specified by notification 6/2005 ST dated 01.03.05 as amended from time to time. Branded service providers i.e. providing services under brand name or trade name of others, would not be admissible for the exemption. The provisions under service tax with regard to registration not only require the assessee to register himself when he starts providing a taxable service, but also to amend his certificate of registration every time there is a change in his business profile. He is also required to state at the time of registering as whether he wants to opt for centralized registration or not. This option can be exercised even at a later date in which case, he would have to get his Registration Certificate amended. Apart from a service provider, even a service receiver who is liable to pay service tax u/s 68(2) of Chapter V of Finance Act 1994 would be required to register himself under service tax for the purpose of paying service tax. The requirement as to registration would also extend to an Input Service Distributor who would want to distribute Cenvat credits on inputs, input services or capital goods to the unit providing taxable service or engaging in manufacturing of dutiable final products. The procedures with regard to registration under service tax in each of the scenarios would basically be the same with very minor changes which would be evident on the application for registration. Steps and Procedure of registration 1. The assessee shall make an application in form ST 1 to the Superintendent of Central Excise in duplicate. Such application can be filed online www.aces.gov.in. For this the following procedure shall be adhered to : a) The user shall first log onto the site aces.gov.in and select “Service Tax” option on the left side of the screen b) He shall then register himself by clicking on “New users to click here to register with ACES” option. On clicking the same he will be required to give certain basic details and a e-mail id. The password for such registration will be sent to this mail id. c) On submitting the form the password will be sent to the ID above and the user shall login into ACES with this password. Such a password is only to gain access to ACES and it does not imply that registration with the department is done. d) In the case of an existing assessee, he shall fill in the “Declaration Form for ACES” (in Appendix I) and submit it to the respective commissionerate. The assessee will then receive a user ID and password at the mail ID specified in such form to activate his registration number in ACES. An existing assessee is NOT required to fill Form ST-1 again in ACES. e) For a new assessee who does not have a service tax registration certificate, shall register with ACES with the ID and password that is sent as mentioned in ‘c’ above and select the option “REG” and “Fill ST-1”. f) The form shall be filed online with all the required details and submitted online itself. g) A print of the form submitted online shall be taken and along with this the documents as mentioned in 5 below shall be submitted to the department at the concerned commissionerate.
2. The application shall be filed within 30 days from the date of providing taxable service and shall bear the address sought to be registered 3. The application should be filled up carefully without errors and columns and boxes which are not applicable may contain “NA” stated across them. All the taxable services provided should be mentioned on the application and there would not be separate applications for each of such taxable services 4. The Form should be signed by the director/partner/sole proprietor as the case may be or the authorized signatory. 5. The application shall be accompanied by copies of the following documents a. Self certified copy of PAN, (where allotment is pending, copy of the application for PAN may be given) b. Copy of MOA/AOA in case of Companies c. Copy of Board Resolution in case of Companies d. Copy of Lease deed/Rental agreement of the premises e. A brief technical write up on the services provided f. Registration certificate of Partnership firm g. Copy of a valid Power of Attorney where the owner/MD/Managing Partner does not file the application 6. Once filed, the acknowledgement for having filed the application is to be obtained on the duplicate copy for one’s own reference 7. If the Particulars stated in the Form are correct, then the registration certificate would be provided within a period of seven days. Where not so provided, the registration is deemed to have been granted. Centralized registration Centralized registration is opted for in a case where the accounting and billing operations of the assessee are centralized in an administrative office which may be a branch or Head Office despite the services being provided from more than one location. The premises that is registered here is the one where the centralized accounting and billing is done. This decision is at the option of the tax payer and he can also opt to have multiple registrations which however may not be advisable. The procedure would be the same as explained above with a few exceptions 1.
The registration in case of centralized registration would be granted by the Commissioner of Central Excise having jurisdiction over the centralized premises
2.
The registration formality at the department’s end takes a little longer than the period stated above and the concept of deemed registration need not apply here. The following documents are required in addition to the documents needed under the aforesaid procedurea. Proof of address of each such premises or branches for which centralized registration is sought b. Proof of address of branches, new offices opened if any.
Q7.
Explain the different kind of provident fund.
ANSWER At present there are 4 types of Provident Funds: 1. Recognized Provident Fund (RPF): This scheme is applicable to an organization which employs 20 or more employees. An organization can also voluntarily opt for this scheme. All RPF schemes must be approved by The Commissioner of Income Tax. Here the company can either opt for government approved scheme or the employer and employees can together start a PF scheme by forming a Trust. The Trust so created shall invest funds in specified manner. The income of the trust shall also be exempt from income taxes. 2. Unrecognized Provident Fund (URPF): Such schemes are those that are started by employer and employees in an establishment, but are not approved by The Commissioner of Income Tax. Since they are not recognized, URPF schemes have a different tax treatment as compared to RPFs. 3. Statutory Provident Fund (SPF): This Fund is mainly Government/University/Educational Institutes (affiliated to university) employees.
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4. Public Provident Fund (PPF): This is a scheme under Public Provident Fund Act 1968. In this scheme even self-employed persons can make a contribution. The minimum contribution is Rs.500 per annum and the maximum contribution is Rs.70,000 per annum. The contribution made along with interest earned is repayable after 15 years, unless extended. The rate of interest is statutorily set at 8% per annum.
Q5.
Discuss briefly the provisions relating to set off and carry forward of nonspeculative business losses?
Answer Set Off and Carry Forward of Losses in Business Example – Where a person carries on two businesses and one business gives him a loss and the other a profit, then the income under the head ‘Profits and gains of business or profession’ will be the net income i.e. after the adjustment of the loss. Similarly, if there is a loss under one head of income, it should normally be adjusted against the income from another head of income while computing the Gross Total Income, of course subject to certain restrictions. These provisions for set off and carry forward and set off of loss are contained in sections 70 to 80 of Income tax Act Clubbing of Income Rules There are whole lots of combinations when it comes to adjusting profits and losses intra and inter heads, I shall bring to you some very important ones which are practically very significant Steps in Set Off and Carry Forward of Losses Before we get any further, let’s understand the steps that need to be followed for carrying out this calculation. Briefly, it’s about three simple steps –
