Negative List of Service Tax, Section 66D

Negative List of Service Tax

Finance Bill 2012 has proposed a complete changes is scheme of levy of Service. As per present scheme service tax is levied on only this service which are listed in service tax law. At present there are as many as 119 service. These services are called taxable service and tax is leviable only on this taxable service and not on any other services. Thus all other services are exempted.

Under proposed scheme all services are taxable and only those services that are mentioned under negative list are exempted. Thus the new scheme is also known as negative list approach, or comprehensive approach  as against present selective approach.

The new scheme shall come in force from the date as notified by the Government after the passing of Finance Bill into Finance Act. Till that time the present scheme shall continue.

Negative List approach to taxation of services will be implemented by introduced vide new sections, namely, 65B Interpretations.

66B Charge of service tax on and after Finance Act, 2012, 

66C Determination of place of provision of service, 

66D Negative list of services, 

66E  Declared services and 

66F Principles of interpretation of specified descriptions of services or bundled services.

These new section are proposed in Chapter V of the Finance Act, 1994 . The services specified in the ‘Negative List’ (section 66D) will remain outside the tax net. All other services, except those specifically exempted by the exercise of powers under section 93(1)of the Finance Act, 1994 (Notification No.12/2012-Service Tax)  will thus be chargeable to service tax. Section 65, 66, 66A, 67 will be deleted from the notified date.

Section 66D

66D. The negative list shall comprise of the following services, namely:––
	(a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere—
		(i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government;
		(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
		(iii) transport of goods or passengers; or
		(iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities;
	(b) services by the Reserve Bank of India;
	(c) services by a foreign diplomatic mission located in India;
	(d) services relating to agriculture by way of—
		(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;
		(ii) supply of farm labour;
		(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;
		(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
		(v) loading, unloading, packing, storage or warehousing of agricultural produce;
		(vi) agricultural extension services;
		(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;
	(e) trading of goods;
	(f) any process amounting to manufacture or production of goods;
	(g) selling of space or time slots for advertisements other than advertisements broadcast by radio or television;
	(h) service by way of access to a road or a bridge on payment of toll charges;
	(i) betting, gambling or lottery;
	(j) admission to entertainment events or access to amusement facilities;
	(k) transmission or distribution of electricity by an electricity transmission or distribution utility;
	(l) services by way of—
		(i) pre-school education and education up to higher secondary school or equivalent;
		(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
		(iii) education as a part of an approved vocational education course;
	(m) services by way of renting of residential dwelling for use as residence;
	(n) services by way of—
		(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount;
		(ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers;
	(o) service of transportation of passengers, with or without accompanied belongings, by—
		(i) a stage carriage;
		(ii) railways in a class other than—
		(A) first class; or
		(B) an airconditioned coach;
		(iii) metro, monorail or tramway;
		(iv) inland waterways;
		(v) public transport, other than predominantly for tourism purpose, in a vessel of less than fifteen tonne net; and
		(vi) metered cabs, radio taxis or auto rickshaws;
	(p) services by way of transportation of goods—
		(i) by road except the services of—
		(A) a goods transportation agency; or
		(B) a courier agency;
		(ii) by an aircraft or a vessel from a place outside India to the first customs station of landing in India; or
		(iii) by inland waterways;
	(q) funeral, burial, crematorium or mortuary services including transportation of the deceased.

Income tax Slab Rates for Assessment Year (A.Y.) 2013-14 i.e. Financial Year (F.Y.) 2012-13

see for Income tax Slab Rates for Assessment Year (A.Y.) 2012-13 i.e. Financial Year (F.Y.) 2011-12 

Income tax Slab Rates for Assessment Year (A.Y.) 2013-14 i.e. Financial Year (F.Y.) 2012-13

1. For Individual (other then Individuals being resident of India and above 65 years of age), Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person:

i	where the total income does not exceed Rs. 2,00,000	Nil;
ii	where the total income exceeds Rs. 2,00,000 but does not exceed Rs. 5,00,000	10 per cent. of the amount by which the total income exceeds Rs. 2,00,000;
iii	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000	Rs. 30,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
iv	where the total income exceeds Rs. 10,00,000	Rs. 1,30,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000.

2. In the case of every individual, being a resident in India, who is of the age of sixty years or more but less then eighty years at any time during the previous year,—

i	where the total income does not exceed Rs. 2,50,000	Nil;
ii	where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000	10 per cent. of the amount by which the total income exceeds Rs. 2,50,000;
iii	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000	Rs. 25,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
iv	where the total income exceeds Rs. 10,00,000	Rs. 1,25,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000.

3. In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year, —

i	where the total income does not exceed Rs. 5,00,000	Nil;
ii	where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000	20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
iii	where the total income exceeds Rs. 10,00,000	Rs. 1,00,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000.

4. In the case of every co-operative society, —

i	where the total income does not exceed Rs. 10,000	10 per cent. of the total income;
i	where the total income exceeds Rs. 10,000 but does not exceed Rs. 20,000	Rs. 1,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 10,000;
iii	where the total income exceeds Rs. 20,000	Rs. 3,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000.

5. In the case of every firm,—

i

On the whole of the total income

30 per cent.

6. In the case of a company,—

i	In the case of a domestic company	30 per cent. of the total income;
ii	In the case of a company other than a domestic company
	(i) on so much of the total income as consists of,—      (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976;               (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government	50 per cent.;
	(ii) on the balance, if any, of the total income	40 per cent.

Surcharge on income-tax

        The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or in section 111A or section 112, shall, in the case of every company, be increased by a surcharge for purposes of the Union calculated,—

        (i) in the case of every domestic company having a total income exceeding one crore rupees, at the rate of five per cent. of such income-tax;

        (ii) in the case of every company other than a domestic company having a total income exceeding one crore rupees, at the rate of two per cent. of such income-tax:

        Provided that in the case of every company having a total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Deduction u/s.80TTA in respect of Deposits in Saving Account

Finance Bill 2012 proposes to introduce new deduction in respect of interest received on deposits in saving account.
Deduction under new section 80TTA will be available to Individual and HUF only
Maximum Deduction will be Rs.10,000/-
Deduction will be allowed on deposits in saving account (not time/fixed term deposits) with

1. Banks,
2. Co-operative Society engaged in carrying on the business of banking, including a co-operative land mortgage bank or co-operative land development bank,
3. Post office Saving Account. Deposit in other scheme of Post office will not be allowed

Where saving account is held in name of Individual on behalf of a firm, association of persons or body of individual no deduction shall be allowed to the partner of member of association or body of individual

The deduction u/s 80TTA will be available from financial year 2012-13

Income Tax Deduction at Source (TDS) on transfer of certain immovable properties other than agricultural land.

Income Tax Deduction at Source (TDS) on transfer of certain immovable properties other than agricultural land.

Finance Bill 2012 has proposed to introduce new section 194LAA for TDS on transfer of certain immovable properties other than agricultural land on and after 1st October 2012.

On transfer of immovable property by a non-resident, tax is required to be deducted at source by the transferee u/s.195. However, new provision has been proposed in Finance Bill 2012 to deduct tax at source on transfer of immovable property by any person(including individual, firms) being a resident except in the case of compulsory acquisition of certain immovable properties.

This is in order to collect tax at the earliest point of time and also to create a reporting mechanism of transactions in the real estate sector, it is proposed to insert a new provision to provide that every transferee, at the time of making payment or crediting any sum by way of consideration for transfer of immovable property (other than agricultural land), shall deduct tax, at the rate of 1% of such sum, if the consideration paid or payable for the transfer of such property exceeds –
(a) fifty lakh rupees in case such property is situated in a specified urban agglomeration; or
(b) twenty lakh rupees in case such property is situated in any other area.

Where the consideration paid or payable for the transfer of such property is less than the value adopted or assessed or assessable by any authority of a State Government for the purposes of payment of stamp duty, the value so adopted or assessed or assessable shall be deemed as consideration paid or payable for the transfer of such immovable property.

Registering officer appointed under the Indian Registration Act, 1908 (Registrar) will not register the transfer of any immovable property where taxes are required to be deducted unless the transferee furnishes proof of deduction and payment of TDS.

On plain reading the provisions of the finance bill, one can conclude that even when flat is purchased from the builder/developer, the purchaser has to deduct income tax even on first time sale. That the purchaser has to deduct 1% while making payment to builder who is in business of building and selling flats/commercial premises,etc. However builders association would like to have clarification if TDS is for all transfer or on second sale.

However there is no corresponding amendment for allowing  deduction of tax at lower rate u/s197.

It also seems that if the seller does not have PAN no than the purchaser will have to deduct tax @ 20% u/s.206AA.

Immovable property means land (other than agricultural land) or building or part of the building. 

Specified are shall mean an area comprising:

1. Greater Mumbai Urban agglomeration,
   
   
2. Dehli Urban agglomeration,
   
   
3. Kolkata Urban agglomeration,
   
   
4. Chennai Urban agglomeration,
   
   
5. Hyderabad Urban agglomeration,
   
   
6. Bangaluru Urban agglomeration,
   
   
7. Ahmedabad Urban agglomeration,
   
   
8. District of Faridabad,
   
   
9. District of Gurgoan,
   
   
10. District of Gautam Budh Nagar,
    
    
11. District of Gaziabad,
    
    
12. District of Gandhinagar and
    
    
13. City of Secundrabad.
    
    

Area comprising Urban agglomeration shall be included in Urban agglomeration on the basis of 2001 Census.

For reducing the compliance burden on the transferee, it is also proposed that a simple one page challan for payment of TDS would be prescribed containing details (including PAN) of transferor and transferee and also certain details of the property. The transferee would not be required to obtain any Tax Deduction and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one time transaction. The transferor would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the challan of payment of TDS.

DEDUCTION U/S.80C OF INCOME TAX

related topic Tax Saving Deduction u/s. 80CCF on Income Tax

Deduction u/s.80C of Income Tax Act is available in respect of or payments made for life insurance premium, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.

Persons to whom deduction is allowed : Individuals & Hindu undivided Family Only (HUF), other class of persons like firm, company are not allowed deduction u/s.80C.

Extend of Deduction : up to Rs.1,00,000/- of amounts eligible invested/payments/deposits mentioned below, along with payments/investments covered u/s.80CCC & sec 80CCD (refer sec 80CCE)
That is total deduction u/s.80C, sec 80CCC & sec 80CCD shall not exceed Rs.1,00,000/-

Investment/Payments Eligible u/s.80C: Some important deposits/payment are listed below

1.	Payment of life insurance policy premium in name of ; in the case of an individual, the individual, the wife or husband and any child of such individual, and in the case of a HUF, any member of HUF.  Amount of premium shall be restricted to 20% of the actual capital sum insured.
2.	Deposits in Public Provident Funds,
3.	Contribution to employees recognised provident fund and approved superannuation fund,
4.	Tuition fees paid to any university, college, school, or education institution situated in India for any two children of an individual,
5.	Housing loan repayment installment, i.e. housing loan EMI
6.	Stamp Duty and Registration Fee paid during the financial year in relation to purchase of house property,
7.	Term Deposit with Scheduled Bank for period of five years,
8.	Deposit in account under the Senior Citizens Savings Scheme Rules, 2004, i..e Senior Citizen Saving Scheme.
9.	Deposit in five year time deposit in an account under the Post Office Time Deposit Rules, 1981,
10.	National Saving Certificate VIIIth Issue.
11.	Subscription to Units of Mutual Fund approved by Board
12.
13

Form/Annexure C, D, G, H, I to be filed along with MVAT Return.

Form/Annexure C

Form/Annexure D

 Form/Annexure G

Form/Annexure H

Form/Annexure I

Circular of Commissioner for filing Form C, D, G, H, I, J1 and J2 by non audit dealers

 

see Annual Statement/Details to be filed under MVAT by non-audit dealer
see Form/Annexure C, D,G, H, I 

This circular is for dealers who are not required to submit VAT Audit report. Hence extended date of filing VAT return may not be applicable to dealers required to submit VAT Audit Report.

TRADE CIRCULAR

Date: 27.02.2012

No.VAT /AMD-2011/lB/Adm-6

Trade Cir. No. 3T of 2012

Sub:	Submission of certain annexures by the dealers who are not required to file Audit Report in Form 704.
Ref:	(1) Notification No. VAT-1511/CR-138/Taxation-l  dated 5th December 2011. (2)  Notification  No.  VAT-AMD-2011/IB/Adm-6, Mumbai dated 4th February 2012.

Gentlemen/Sir/Madam,

As per the provisions of section 61 of MVAT Act, 2002 the dealers covered under this section are liable to submit Audit Report in Form 704. Alongwith Form 704, details of the customer-wise sales and customer-wise purchases are also submitted in annexure Jl and J2 with other requisite details. However, for the dealers who are not required to file Audit Report in Form 704 there was no provision to seek the information about the customer-wise sales and purchases and also other details. The information about the latter category of dealers were not available with the department. As a result of this, it was difficult to cross check the input tax credit in respect of the dealers claiming refunds.

In order to mitigate this problem and to ensure speedy processing of refund claims and to expedite the cross check of input claims, it is felt necessary to prescribe information similar to Form 704 for dealers not liable to file Audit Report. Accordingly amendments have been made to rule 17 and rule 18.

2. The amendment provides that all dealers who are not liable to file Form-704 will now be required to file annexures in C, D, G, H, I, Jl and J2 alongwith last return of that year. This will be applicable from the last return of financial year 2011-12 e.g. return for the period ending on 31st March 2012 will be filed before 30th June 2012 alongwith the aforesaid annexures. For this, the due date of last return has been extended to 90 days instead of 21 and 30 days. It may be noted that the payments have to be made as per earlier provision i.e. all dealers except six monthly dealers by 21^st April 2012 and for six monthly dealers by 30th April 2012. Notifications prescribing the above annexures have been issued and are available on department's website.

3. The annexures notified vide notification cited Ref. (1) above is as under:-

(1)  Annexure-C:- This annexure contains the information with regards to details of TDS certificates received by the dealer.

(2)  Annexure-D:- This annexure contains the information with regards to details of TDS certificates issued by the dealer.

(3)  Annexure-G;- This annexure contains the information with regards to details of the various certificates or declarations as provided under Central Sales Tax Act, 1956 which are received by the dealer.

(4)  Annexure-H:- The information about the details of the declarations in form H, which are not received in respect of local sales is to be provided in this annexure. This H form relates to sale in the course of Export where penultimate sales are local sales.

(5)  Annexure-I:- The information with regards to details of the various certificates or declarations as provided under Central Sales Tax Act, 1956 that are not received is to be furnished in this annexure.

(6)  Annexure-Jl:- This annexure contains the information about the sales effected by the dealer furnishing the said annexure. The information with regards to Customer-wise sales is to be provided.

(7)  Annexure-J2:- This annexure contains the information about the purchases effected by the dealer furnishing the said annexure. The information with regards to Customer-wise purchase is to be provided.

4. The dealers who are not required to file Audit Report in Form 704 shall submit these annexures alongwith the return for the month of March. In other words, in case of a dealer who is required to file return,-

(1)     Monthly: shall submit the requisite annexures along with the last return for the said year i.e. alongwith the return for the month of March of that year.

(2)     Quarterly: shall submit the requisite annexures along with the last return for the said year i.e. alongwith the return for the last quarter starting from I8t January and ending on 31^st March of that year;

(3)     Six-monthly: shall submit the requisite annexures along with the last return for the said year i.e. alongwith the return for the second six-month starting from 1st October of previous year and ending on 31st March of that year.

5. The newly registered dealer shall submit the requisite annexures alongwith the last return for the year in which he has obtained the registration i.e. alongwith the return for the period in which 31st March of that year occurs.

6. In case of a dealer where business is discontinued or disposed off or transferred, then requisite annexures shall be filed alongwith the last monthly return or, last quarterly return or, as the case may be, last six monthly return in which aforesaid contingencies have occurred. In short, the said dealer shall file the annexures alongwith the return required to be filed as per the provisions of sub-rule (2) of rule 18.

7. Downloading of Forms of annexure:

(1)     The template of the aforesaid annexures will be provided on the website of the Sales Tax Department i.e. www.mahavat.gov.in at DOWNLOAD-FORMS<Electronic forms. Every dealer to whom the above notification applies shall download the template of the said form. Only downloaded template of the said form is to be used and uploaded on the website.

(2)     The said template will be made available at the Sales Tax Department's website. This template will contain annexure C, D, G, H, I, Jl and J2. The dealer shall first download the appropriate template.

8. Filing and uploading of annexures:

(1)   After downloading the requisite template as explained above the dealer should make the off line data entry in all the fields provided in the relevant excel sheets in the said work book. The excel sheets are named as annexure C, D, G, H, I, Jl and J2.

(2)   The dealer shall first fill the details in the template. The annexures referred in (1) above shall contain the information for the entire year.

(3)   The completed template of annexures shall be uploaded by the dealer using his login ID and password created by himself for the purpose of e-services. The dealer shall first upload the requisite annexures. The uploading of the said annexures shall be the pre-requisite for uploading the last return i.e. for the month of March of that year.

(4)   In case of the dealer where the business is discontinued, disposed off or transferred, then, in that case with the last return in the month, quarter or as the case may be, six month in which the said contingencies occurs.

9. The dealers covered under Explanation to clause (8) of section 2 of the MVAT Act, 2002 and are not required to submit Audit Report in Form-704 shall submit the details of sales and purchases for entire year in the Annexure-J1, Annexure-J2 and other details in Annexure-C and Annexure-D appended to this notification.

10.   This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

11.  You are requested to bring the contents of this circular to the notice of all the members of your association.

(Sanjay Bhatia)

Commissioner of Sales Tax

Maharashtra State, Mumbai.