TIOL-DDT 431 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<html>
<head>
<meta http-equiv=Content-Type content="text/html; charset=windows-1252">
<link rel=Edit-Time-Data href="Taxindiaonline's%20DDT%20431_files/editdata.mso">
<title>Taxindiaonline's DDT 402</title>
</head>
<body>
<p > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
431</font><br>
21 08 2006<br>
Monday</b></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Service
Tax – mandatory e-payment of Service Tax for major assessees – Board keeps it
a top secret</font></strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
was just a month ago that DDT reported about <b>EASIEST-Electronic Accounting
System in Central Excise & Service Tax </b><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4040">(TIOL-DDT
415 27 07 2006)</a><b>, </b>CBEC’s new initiative of allowing the assessees
to pay Service Tax and excise duty electronically. The Board had clarified that
</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>E-payment
of Central Excise and Service Tax is an <font color="#663399">additional</font>
mode of payment in <font color="#663399">addition </font>to the conventional
methods offered by the banks to their customers. </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>It
is essentially an arrangement <font color="#663399">between the customers [service
tax payers] and the bank. </font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
now the DGST has issued a D.O letter that the Board has decided that with effect
from 1<sup>st</sup> October, 2006, payment of service tax electronically shall
be mandatory for those persons who are required to pay services tax and paid
more than Rs.50 lakhs in the preceding Financial year or paid more than Rs.50
lakhs during the current financial year.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
the e payment is essentially an arrangement between the assessee and the bank,
how can DGST make it mandatory? And can mandate be made by a DO letter from
the DGST?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per Rule 6(2), of the Service Tax Rules, </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
assessee shall deposit the service tax liable to be paid by him with the bank
designated by the Central Board of Excise and Customs for this purpose in Form
TR-6 or in any other manner prescribed by the Central Board of Excise and Customs.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
the manner of payment of tax has to be prescribed by the Board and not communicated
by the DGST in private letters. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
DG’s letter further wants the Chief Commissioners to inform the officers and
the assessees of this <b>mandatory</b> requirement. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
an assessee asks the Chief Commissioner as where the mandate is, what would
be the reply? The DGST’s DO letter? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
the Board wants to make e-payment mandatory, why can’t it issue a notification
publicly instead of making the DGST write DO letters? Or is the DGST an independent
authority that it decides for the Board? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
are certain problems associated with e-payment. Service Tax is to be paid by
5<sup>th</sup> of the month. Now what will happen if the assessee’s computer/net
or the Bank’s system is down on that day? They have to pay interest for delayed
payment. Now a cheque can be presented to the bank on 5<sup>th</sup> and this
cheque comes for collection after two days. So the assessee gets a grace period
of two days, but by e-payment, he should have the requisite balance in the account
in that particular bank on the date of payment. This is certainly not a <b>facility</b>
as the DGST calls it. </font></p>
<table width="450" border="1" align="center" cellpadding="1" cellspacing="0">
<tr>
<td><p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The
DGST’s letter reads as;</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>
D.O.F.NO: V/DGST/30-Misc-27/e-payment/2006</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>
Dated: 6th/7 July 2006</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>S.S.RENJHEN</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECTOR
GENERAL</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Subject:
Mandatory payment of service tax electronically for major assessees –
Reg.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">My
dear </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Considering
that the payment and collection of taxes electronically is admittedly
an efficient and cost effective way of collection of taxes, the Board
has decided that with effect from 1st October, 2006, payment of service
tax electronically shall be mandatory for those persons who are required
to pay services tax and paid more than Rs.50 lakhs in the preceding Financial
year or paid more than Rs.50 lakhs during the current financial year.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
At present 23 nominated banks are providing the facility of a payment
of taxes and 5 more banks have already committed to extend this facility
shortly.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
The officers of the field formations and assessees under your charge may
be suitably informed of this mandatory requirement. Please ensure that
the proposed facility is implemented smoothy. The Commissioners may also
be advised to encourage other assessee, who do not fall within this category,
to pay the service tax electronically.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
The Principal Chief Controller of Accounts has been requested by the Board
to coordinate with the field formations and sort out any specific local
issues arising due to the implementation of the said proposal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
If there are any suggestions or any action needs to be taken at the Board’s
level, the same may please be communicated to this Directorate within
15 days.</font></p>
<p align="right"> </p>
<p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>With
regards,<br>
Yours sincerely,<br>
(G.S.RENJHEN)</strong></font></p></td>
</tr>
</table>
<p > </p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Broad
Criteria for Selection of cases for scrutiny</font></strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
CBDT has announced that Cases are selected for scrutiny based on risk-analysis
conducted through computer- assisted programme and also manually with reference
to broad parameters decided every year for the entire tax-payer population,
inter-alia, considering factors like gross income, deductions and exemptions
claimed, legal issues involved in litigation, quantum and nature of specific
transactions, status of assessees, etc.</font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">TENDER
FOR APPOINTMENT OF A SYSTEMS INTEGRATOR in Income tax opens today.</font></strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Income tax department has invited tenders for Appointment of a Systems Integrator
for providing a turnkey solution towards Supply, Installation, Integration,
Commissioning, Management & Maintenance of Servers, Storage, Security and
other components and Facilities Management Services for the Department. Obviously
this is a huge contract. The security deposit is Rs. Three Crores and the Benchmark
Suite and Data Set is a whopping non refundable Rs. 2 lakhs. The application
form costs Rs. 5000/-</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The Schedule
of Date and Time</b></font></p>
<table width="450" border=1 align="center" cellpadding=3 cellspacing=0 class=MsoTableGrid>
<tr>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i)
<st1:City
w:st="on">Sale of tender document, Release of Benchmark Suite and Data Set </font></p></td>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21.08.06
to 31.08.06</font></p></td>
</tr>
<tr>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii)
Last date for submission of written queries for clarifications on Tender
Document </font></p></td>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">06.09.06</font></p></td>
</tr>
<tr>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii)
Pre-Bid Conference</font></p></td>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12.09.06</font></p></td>
</tr>
<tr>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv)
Last time and date for submission of bids</font></p></td>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">on
or before 1300 Hrs on 16.10.06</font></p></td>
</tr>
<tr>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v)
Time and Date of opening of letters of Pre-qualification and Technical
Bids</font></p></td>
<td width=295 valign=top class="Normal"> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1500
Hrs on 16.10.06</font></p></td>
</tr>
</table>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
you are interested, please contact, Directorate of Income Tax (Systems), CIT(Systems)–IV,
ARA Centre, E-2, Jhandewalan Extension, <st1:City w:st="on">New Delhi –110055</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">“There’s
no special red-carpet tax loophole for the stars, whether you’re popping the
popcorn, sitting in the audience or starring on the big screen, you need to
respect the law and pay your taxes.”</font></b><font color="#663399"> </font>-
IRS (the US version of our Income Tax) Commissioner Mark Everson</font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more DDT </font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day. </font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a
href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
</body>
</html>