BUDGET SEMINAR ACAE jointly with DTPA – MARCH 1, 2016
Tax rate for Domestic Companies:
- Where its total turnover or the gross receipt in the previous year 2014-15 does not exceed Rs. 5 crores – 29% of the total income shall be taxable.
- And in all other cases, it will be 30% of the total income.
Surcharge on domestic companies:
Key Indirect Tax Proposals
Krishi Kalyan Cess @ 0.5% on the value of taxable services proposed to be introduced w.e.f 1st day of June, 2016 to improve agriculture & other purpose relating to it.
Equalisation levy proposed to be charged @6% of the amount of consideration for any specified serviced received or receivable exceeding Rs. 1 lacs in the financial year by a non resident person not having permanent establishment in India from:
- A resident person carrying on business or profession; or
- A non- resident having a permanent establishment in India.
- The Indirect Tax Dispute Resolution Scheme, 2016 proposed to come into force on 1st June, 2016 applicable to the declaration made up to 31st December, 2016:
A person may make a declaration to the designated authority on or before 31st Dec, 2016.
The designated authority shall acknowledge the same in such form as maybe prescribed.
The declaring shall pay tax due along with the interest & penalty equivalent to 25% of the penalty imposed in the impugned order within 15 days of the receipt of acknowledgement & intimate the designated authority within 7 days of making such payment giving details of payment made along with the proof. Within 15 days of the receipt of such proofs, the designated authority shall pass an order of discharge of dues.
- No Service tax for houses built under 60 square meters.
- Notification No. 14/2012 – ST, was amended by notification No. 1/2016 – ST so as to, inter alia, allow refund of service tax on services used beyond the factory etc. for the export. This amendment is being made effective from, 1st July 2012. This will come into effect from the date of enforcement of Finance Bill 2016.
- Quarterly payment of services tax being extended to ‘one Person Company’ (OPC) and HUF also, with effect from 01.04.2016
- Facility of payment of service tax being extended on receipt basis to ‘One Person Company’ (OPC) also, with effect from 01.04.2016
- 13 cesses levied by other Ministries/Departments and administered by the Department of Revenue, where the revenue collection from each of them is less than Rs. 50 crore in a year being abolished.
- CENVAT Credit Rules, 2004 being amended, to improve credit flow, reduce the compliance cost and litigation, particularly those relating to apportionment of credit between exempted and non-exempted final products/ services. Changes are also being made in the provisions relating to input services credit to outsourced manufacturers, under certain circumstances. Amendments will also enable manufactures with multiple manufacturing units to maintain a commom warehouse for inputs and distribute inputs with credits to the individual manufacturing units. This will come into effect from 01.04.2016
- The monetary limit for launching prosecution being increased to Rs. 2 crore of services tax evasion and the power to arrest being restricted only to situations where the tax payer has collected the tax but no deposited in to the exchequer above a certain threshold of Rs. 2 crore. This will come into effect from date of enforcement of Finance Bill 2016.
- Notification No. 27/2012 – C.E. (N.T.) being amended so as to provided that time limit for filling application for refund of Cenvat Credit, in case of export of services, is 1 year from the spevified date, with effect from 01.03.2016.
- Period of limitation in respect of levy/payment/refund of service tax due to some error, is increased to 30 months from 18 months.
Fuel cost to be included for availing abatement on services by renting of motor cab from 01.04.2016.
BUDGET SEMINAR ACAE jointly with DTPA – MARCH 1, 2016
Penalty rates to be 50% of tax case of underreporting of income and 200% of tax where there is misreporting of facts.
Time Limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.
Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of income-tax (Appeals).
Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above 1crore.
New manufacturing companies (set up after 1, 2016 ) to be taxed at 25% plus surcharge and cess.
From FY 17, small companies with exceeding Rs. 5 crore to be taxed at 29% plus surcharge and cess.
Major Amendments in Income Tax
||Existing / Changes
||Amendment of section 2.
||(23c) “hearing includes communication of data documents through electronic mode.
||1st June, 2016
|Sec 6 Clause (3)
||Insertion of new Explanation
Substitution of Clause three – More clarity on place of effective management
|A company is said to be resident in India in any previous year, if –
(i)It is an Indian company; or
(ii)Its place of effective management, in that year, is in India.Explanation. – For the purpose of this clause “place of effective management” means a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole, are in substance made.
|1st April, 2017