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Tax rate for ICICI regular income bond (taxable)

Amol (Service) (65 Points)

28 July 2009

How should interest income from ICICI regular income bond (taxable) be treated?
Will it come under Schedule OS 1 b?

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8 Replies

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 28 July 2009

Yes Anmol it will come under Schedule OS 1b as interest received and will be taxable at normal slab rates as applicable.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 28 July 2009

Mr. Puneet Rathi VAT & Service tax are two seperate things. Service Tax input cannot be taken on Professionla Fees to pay VAT. They are governed by two different laws. Service Tax is levied by the state government whereas VAT is levied by the state government.

Puneet Rathi (JOB) (38 Points)
Replied 28 July 2009

Mr Aditya

I think you have interpreted my query in different way.

I meant whether in this case where the Trader charges Service Tax as well as VAT, while paying Service tax can he claim input credit of service tax or is there any mechanism where he has to calculate the Credit available to him on proporationate basis.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 28 July 2009

For taking service tax input there are cenvat credit rules specified in Cenvat Credit Rules, 2004 for which you can go to site www.cbec.gov.in/ and check the rules in which you fall in. If you are maintaining seperate books for different services then you can take entire CENVAT of ST paid on inputs. However the same is not possible in realty. Therefore they have come out with a formula where you can take entire service tax credit and pay 8% of the value of exempted service (Read not liable for service tax) or pay an amount equivalent to CENVAT Credit attributable to inputs and input service used for providing exempted service.

Puneet Rathi (JOB) (38 Points)
Replied 28 July 2009

Thanks a lot Mr Aditya.

One mor query.

If service provider of Taxable service pays service tax on input service which has got abatement (say payment for catering service where the catering service provider has got 50% abatement) can the service tax paid on such catering services be taken as input credit.

eg. Service provider is of IT services

pays bills of catering services (which includes Service Tax on 50% of Bill amount)

Can the Service Provider of IT services claim the ST paid on catering services as input credit.

Thanks

Puneet Rathi

Amol (Service) (65 Points)
Replied 28 July 2009

Thanks Aditya for answering.

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 28 July 2009

Originally posted by :Puneet Rathi
"	Hi We have one client who deals in selling of Diesel Generator Sets and gives AMC services also. He collects VAT on Sale of DG sets and Service Tax on AMC service. Can he claim CENVAT credit of ST paid on input services such as Mobile Phone, Professional Fees etc. if so then can any plz provide me the relavent section or Case law where can I look into the provisions of the Act. Thanks	"

HI,

U can refer to Cenvat Credit Rules, 2004 whereby any person providing taxable output service on which service tax is payable can claim set off of service tax paid on input services (viz in u'r case proffessional fees, etc). the only thing is to maintain the complete record of input services which include the name, service tax regn no. of input service provider,etc.

For further details, u can refer to Cenvat Credit rules, 2004

Manoj B. Gavali

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 30 July 2009

Originally posted by :Manoj Bhujinga Gavali
"	Originally posted by :Puneet Rathi " Hi We have one client who deals in selling of Diesel Generator Sets and gives AMC services also. He collects VAT on Sale of DG sets and Service Tax on AMC service. Can he claim CENVAT credit of ST paid on input services such as Mobile Phone, Professional Fees etc. if so then can any plz provide me the relavent section or Case law where can I look into the provisions of the Act. Thanks " HI, U can refer to Cenvat Credit Rules, 2004 whereby any person providing taxable output service on which service tax is payable can claim set off of service tax paid on input services (viz in u'r case proffessional fees, etc). the only thing is to maintain the complete record of input services which include the name, service tax regn no. of input service provider,etc. For further details, u can refer to Cenvat Credit rules, 2004 Manoj B. Gavali	"

The restriction on availment of credit in Rule 6 is only for non taxable / exempt services. Trading is niether one of them. Therefore a trader who provides AMC services wouldbe eligible for the entire input services credit on insuracne/ telephone etc whihc is common. However the services exclusively used for trading should be excluded.