TIOL-DDT 614 · the untouched capture
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<p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT 614</font></b><b></b></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><b><br>
16.05.2007<br>
Wednesday</b></font></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Grand Success! CBDT finally manages to notify new forms</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT had announced on April 28<sup>th</sup> that the new IT returns would be officially notified on 14<sup>th</sup> May. On 14<sup>th</sup> May nothing was heard from the Board, but finally they were successful in notifying the forms and amending the Rules late yesterday- of course the notification is dated 14<sup>th</sup> May 2007. Rule 12 of the Income Tax Rules has been substituted with a new Rule, which ordains that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the return of income or the return of fringe benefits relating to the assessment year commencing on the 1st day of April, 2007 or any subsequent assessment year shall be submitted in the following forms;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-1 return</b> of income for Individuals having salary / pension / family pension and interest income and no other income.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-2</b> return of income for Individuals and HUFs having income from any source except from business or profession.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-3 </b>return of income for Individuals and HUFs being partners in firms and not having proprietory business or profession.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-4</b> return of income for Individuals and HUFs having proprietory business or profession.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-5</b> combined form for return of income and fringe benefits for Firms/AOP/BOI .</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-6</b> combined form for return of income and fringe benefits for Companies.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-7</b> combined form for return of income and fringe benefits for Charitable / religious trusts, political parties and other non- profit organizations.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITR-8</b>stand alone form for return of fringe benefits for persons who are not liable to file return of income but are liable to file return of fringe benefits</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Except for ITR-7, the returns should not have any enclosures of</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. statement of computation of the tax payable </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Proof of TDS</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. proof of advance tax</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The returns can be filed in any of the following ways:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. in a paper form</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. electronically under digital signature</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. transmitting the data in the return electronically and later, the verification of the return in Form ITR-V</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. a bar-coded return in a paper form</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the earlier years, the old forms have to be used. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When we carried the draft forms on 30<sup>th</sup> April, some netizens pointed out that the instructions to fill up the forms were missing. We had to inform them that the instructions were not published at that time. We are happy to report now that the notified forms do contain the instructions.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><a href="http://www.taxindiaonline.com/RC2/pdfnoti/pdfcbdt/pdf2007/4th_amendment_rules.pdf">CBDT
Notification S.O. No. 762 (E).- dated 14th May 2007</a>. </u></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/itr_forms.htm">Click here for the new Forms</a></u></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Finance Bill enacted – ER1 and ST3 ready for another round of revision?</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Notification 27/2007 CE (NT), dated 12.5.2007, the Cenvat credit rules have been amended consequent to the Finance Bill receiving the assent of the President. In Sub-rule 7(b) of Rule 3 of these rules, two provisos have been inserted as:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided that the credit of the education cess on excisable goods and the education cess on taxable services can be utilized, either for payment of the education cess on excisable goods or for the payment of the education cess on taxable services: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided further that the credit of the Secondary and Higher Education Cess on excisable goods and the Secondary and Higher Education Cess on taxable services can be utilized, either for payment of the Secondary and Higher Education Cess on excisable goods or for the payment of the Secondary and Higher Education Cess on taxable services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above provisos imply that the credit of ED Cess can not be used for payment of SHE cess and vice versa. Therefore separate accounts shall be maintained for credit of ED Cess and SHECess.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The present ER1 form has nine columns with regard to Cenvat Credit and with separation of ED cess and SHE Cess, two more columns need to be inserted and the ER1 and ST3 form need further revision.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly the proviso to Rule 3(7)(b) from 1.3.2007 to 11.5.2007 was as under:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that the credit of the education cess on excisable goods and the secondary and higher education cess on excisable goods and education cess on taxable services can be utilized, either for payment of the education cess on excisable goods or secondary and higher education cess on excisable goods or for the payment of education cess on taxable services.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, from 1.3.2007 to 11.5.2007, the two cesses could be intermixed and ED Cess could be used for payment of SHE cess and SHE cess could be used for payment of ED cess. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the restriction placed from 12.5.2007 a conscious decision or a problem with drafting?</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Written off inputs/capital goods - Wiping the creases on the forehead of Revenue</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board is at it again, going after mole hills. They have now amended the Cenvat Credit Rules to provide for reversal of credit when inputs/capital goods are written off. A netizen wrote to us,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Notification appears to be contrary to primary provisions of Central Excise Law. The question of payment of duty/reversal of credit arise on any excisable goods only on removal of such goods from the factory. Here, however, the reversal is insisted based on the action taken for the purpose of books of accounts. Further it is not provided as to the treatment to be given to cases where the goods after a gap of reversal of credit are physically removed from the factory. It is not clear as to the nature of document to be prepared, the procedure for the receiver of such goods to avail credit. The notification appears to have been issued in haste.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see a detailed analysis of the new Rule in our <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5475">Breaking News.</a> </u></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service Tax on GTA can be paid from cenvat credit account</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Service Tax on GTA has invited the largest amount of litigation. One of the agitating questions was whether the Service Tax liability of a manufacturer availing GTA services can be discharged by debiting in the Cenvat account. The Department had been insisting that GTA Service Tax has to be paid in cash only as the manufacturer paying the Service Tax as a recipient was not really a service provider. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CESTAT has ruled in favour of the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see our <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5477">Breaking News</a> </u></b>for more details of the case</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Finance Act 2007 – finally available</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally, we managed to get a copy of the elusive Finance Act 2007. After a full six days of its assent, nobody in Government seems to be aware of it or wants it to be kept a closely guarded secret. PIB, Law Ministry, CBEC, CBDT- nobody has any official confirmation about when the Bill became the Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you the Finance Act 2007 today.</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>
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