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TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 1 Chartered Accountants
TAX CONNECT
53Rd
Issue
31 Jan 2016 – 6 FEB 2016
INCOME TAX
CENTRAL EXCISE SERVICE TAX
GST
CUSTOMS
STATE TAXES
JAV & ASSOCIATES
Chartered Accountants
Kolkata:
1, Old Court House Corner
^Toao House_ 1 st
Floor
Room No.-13 (North)
Kolkata-70001
West Bengal
Vadodara:
Quarter no. 3/174
Gujarat Refinery Township
Jawaharnagar
Vadodara-391320
Gujarat
Contact:
+919331042424; +91931594980;
+918697575185; +913322625203 Email:
tb.chatterjee@dic.co.in;
tb.chatterjee@yahoo.co.in;
cavivekjalan@gmail.com; vivek.jalan@icai.org
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 2 Chartered Accountants
Friends,
All the uncertainty w.r.t. extension of date of filing of
WB VAT, CST & ET returns have been finally put to rest
yesterday. The last date of extension of Thee WB VAT,
CST & ET returns has been extended by 1 week.
However the CCT has given all indications that
henceforth the extension of due dates shall be an
exception rather than a rule!
Further, The Government has recently launched The
Start up India Scheme which aims to promote
entrepreneurship. Just to provide you the glimpses of the
Scheme –
Eligibility Criteria –
1. Entity should be incorporated or registered in
India for less than 5 years having a annual
turnover not exceeding INR 25 crore in any
preceding financial year
2. Such entity should not be formed by splitting up,
or reconstruction, of a business in existence.
3. Private limited companies formed under the
Companies Act, 2013, Registered Partnership
firm and Limited Liability Partnership are only
eligible to take the benefit of this scheme
4. A startup shall be eligible for tax benefits only
after it has obtained certification from the Inter-
Ministerial Board, setup for such purpose;
Compliance based on self certification 1. Self certification of laws 2.
No labour law inspection for 3 years
3. Startup which fall under ^white category _ would
able to self certify with environment law.
Legal Support and Fast-tracking Patent Examinatio n
1. The scheme of Startup Intellectual Property
Protection (SIPP) shall facilitate filing of Patents,
trade mark and design by innovative Startup
2. Application for patent registration and disposal
of Startup shall be fast tracked
3. Government shall bear the facilitation cost and
80% rebate shall be provided to the Startups.
Funding 1. To provide funding support to Startups,
Government will set up a fund with initial corpus
of INR 2,500 crore and total of INR 10,000 crore
2. Fund will be provided indirectly through Venture
capital registered under SEBI.
Tax Exemptions 1. Exemptions on capital gains shall be given to
individuals if they have invested such capital gain
2. Profits of startup are exempted from income-tax
for a period of 3 years.
3. if Startup receive any consideration for issue of
shares which exceeds the Fair Market Value
(FMV) of such shares, such excess consideration
is exempted in the hands of recipient.
Just to reiterate that we remain available over a
telecom or e-mail.
Truly Yours
Timir Baran Chatterjee
M.Com, FCS, MBA (International Business)-IIFT, ACMA
Vivek Jalan
FCA, CIDT (ICAI), B. Com
EDITORIAL
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 3 Chartered Accountants
S. NO. TOPICS
PAGE
NO.
1] WORKSHOP ON VAT & SERVICES TAX IN WORKS CONTRACT ON 19TH FEBRUARY, 2016 4
2] COMPLIANCE CALENDAR 5
3]
GOODS & SERVICE TAX (GST) - REPORT OF SUB COMMITTEE - II ON MODEL GST ACT, 2016 – LEVY &
COLLECTION OF TAX : RECOVERY OF TAX NOT PAID/SHORT PAID/ERRONEOUSLY REFUNDED 6
4] CENTRAL TAXES
a) SERVICE TAX 7
Case Law Provision of additional services to the purchaser of Cars like collection of R TO registration charges,
Smart Card Fees, Vehicle Registration Fees and other extra charges cannot be categorised a s ^Business
Support Services _ and made liable to service tax. Case Law If there is documentary proof specifically indicating the value of the goods supplied /sold during repairs,
the demand of Service Tax for the cost of the goods supplied is not sustainable.
b) CENTRAL EXCISE 8
Notification/Circular Insertion of a sunset clause of 31.03.2016 and denial of exemption to specified goods as per No tification
No.56/2002-CE & NO.57/2002-CE dated 14.11.2002
Case Law The packing of the gases into cylinders is not necessary for making the gas mar ketable - these charges
would not be includible in the assessable value.
Case Law When the goods are delivered ex-factory and the place of removal is factory ga te, the freight element
has no bearing on the valuation of the product.
c) CUSTOMS 9
Notification/Circular Customs, Excise & Service Tax Appellate Tribunal (Procedure for Appointment as President) Ru les, 2016
Notification/Circular Revision of exchange rate of foreign currencies into rupee & vice versa
Notification/Circular Grant of Presidential Award of Appreciation Certificate to the officers of the Cu stoms & Central Excise
on the eve of Republic Day, 2016
d) INCOME TAX 10
Notification/Circular Two additional modes (giving Bank details, Demat details) of generation of Electro nic Verification
Code(EVC) for e-ITRs
Notification/Circular Advance Rulings (Procedure for Appointment as Chairman and Vice-Chairman) Rules, 2016
Case Law If software is acquired with the right to use it, the payment made for the same w ould amount to royalty,
however, if the software is acquired as a product for reselling, the consideration paid cannot be
considered as royalty and disallowed under Section 40(a) of the Act for non-ded uction of TDS.
5] STATE TAXES 11
Notification/Circular
Bihar: Bihar Value Added Tax Rules, 2005: Amendment in Rule 14 regarding determination of value of
stock transfers outside the State and deletion of rule 17 regarding Refund of tax to foreign diplomats or
foreign missions
Goa: Amendment in Schedule C - Regarding purchase of the Motor Car by Indian Armed Forces
Haryana: Substitution of section 59A - Amnesty Scheme
Madhya Pradesh : Exemption from Entry Tax under Industrial Promotion Policy, 2014
INDEX
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 4 Chartered Accountants
Workshop on VAT & Services Tax in Works Contract
10.00 a.m. onwards, 19th February, 2016
The Park Kolkata
17, Park Street, Kolkata 700 016
The Indirect Taxes Committee of The Bengal Chamber of Commerce and Industry is org anizing a Workshop on VAT & Services Tax in
Works Contract from 10.00 a.m. onwards, on 19th February, 2016 at The Park Kolkata.
The workshop will broadly deliberate on the following:
• Works Contract under Service Tax
• Real Estate / Construction Industry under Service Tax
• Works Contract under WB VAT Act
• Comparative Study of Works Contract under various States
• GST on Real Estate / Construction
• Issues including various Judgments of Courts on Works Contract under VAT & CST
Eminent tax experts who shall be addressing and interacting with the participants on the above include:
Mr. T B Chatterjee, Chairperson, Indirect Taxes Committee, The Bengal Chamber of Commerce and Ind ustry & Chief Corporate Officer,
Legal and Corporate Affairs, DIC India Ltd
Mr. Pulak Saha, Co-Chairperson, Indirect Taxes Committee, The Bengal Chamber of Commerce and In dustry & Partner - Tax & Regulatory
Services, Price Waterhouse & Co. LLP
Mr. Vivek Jalan, FCA, JAV & Associates, Chartered Accountants
Mr. Avisekh Jaiswal , Sr. Manager – Indirect Tax, Ernst & Young LLP
Mr. M S Mani , Senior Director, Deloitte Touche Tohmatsu India Private Limited
Mr Khalid Anwar , Jt Commissioner, Commercial Taxes, Government of West Bengal
We do hope that the programme will be relevant to you. You may please also nomin ate suitable representatives to attend the
programme. For the purposes of registration, please email the enclosed Ready Reply For m, suitably filled in,
to sarbani@bengalchamber.com.
The participation fee (inclusive of taxes) is Rs 4500/-. A discount of 10% is applicable for a group registration on 4 or more participants
registering from the same organization. An early bird discount of 10% is also available for registrations before 5th February, 2016.
Looking forward to receiving your kind confirmation.
Yours faithfully,
Subhodip Ghosh
Director General Designate
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 5 Chartered Accountants
Due date COMPLIANCES FROM 31st January,
2016 to 6th February, 2016
STATUTE
31st January,
2016
Deposit of VAT of previous month Mizoram VAT Act
Jammu & Kashmir VAT Act
Filing of monthly/quarterly/annual
VAT return
Bihar VAT Act (Quarterly)
Haryana VAT Act (Quarterly)
Jammu & Kashmir VAT Act (Quarterly)
Mizoram VAT Act (Quarterly)
Nagaland VAT Act (Quarterly)
Sikkim VAT Act (Quarterly)
Tripura Vat Act (Monthly/Quarterly)
West Bengal VAT Act (Quarterly)
Rajasthan VAT Act (Annual)
VAT Audit Rajasthan VAT Act
Goa VAT Act
Deposit of WCT of previous month Jammu & Kashmir VAT Act (Quarterly)
Filing of monthly/quarterly WCT return Bihar VAT Act (Monthly)
Chandigarh VAT Act (Monthly)
Haryana VAT Act (Quarterly)
Jammu & Kashmir VAT Act (Quarterly)
Tamil Nadu VAT Act (Monthly)
Issuance of WCT certificate Assam VAT Act (Monthly)
Gujarat VAT Act (Quarterly)
Kerala Vat Act (Quarterly)
Jammu & Kashmir VAT Act (Quarterly)
Deposit of P tax of previous month Maharashtra VAT Act
Deposit of Entry tax of previous month Assam VAT Act
5th February,
2016
Deposit of WCT of previous month Kerala VAT Act
Service Tax deposit of previous month
(Company/ Society)
Finance Act
COMPLIANCE CALENDAR
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 6 Chartered Accountants
REPORT OF SUB COMMITTEE -
II ON MODEL GST ACT,
2016 – REFUND OF TAX
The provisions of refund of tax in CHAPTER V of the
model GST Act can be summarized as follows: Refund of tax
(1) Refund (of tax and interest) can be claimed by
making an application to the proper officer of
IGST/CGST/SGST before the expiry of two years
from the relevant date. The application shall be
accompanied by relevant and sufficient
documentary evidence
(2) The proper officer shall issue the order within
(a) 60 days of application in case of refund arising
from export of goods;
(b) 90 days of application in case of refund arising
from export of services;
(c) 45 days of application in case of refund of
unadjusted input tax credit
(d) 60 days of application in case of refund arising on
account of a judgement, decree, order or
direction of the Appellate Authority or Tribunal or
any Court; and
(e) 90 days of application for refund in any other
case.
The refundable amount shall be credited to the Fund,
except in the following cases where it will be paid to
the applicant:
- Refund where goods and/or services exported out of India or on inputs used in the goods and/or
services which are exported out of India
- Refund of unadjusted input tax credit
- Refund where assessee has not passed on the incidence of tax and interest to any other person - Refund to such other class of applicants as the
Central or a State Government may, specify.
For the purposes here ^ Refund _ includes refund of tax on goods and/or
services exported out of India or on inputs used in the
goods and/or services which are exported out of India,
or refund of unadjusted input tax credit ^ Relevant date _ means –
(a) in the case of goods and/or services exported out of India, the date on which the related return is
filed;
(b) for goods returned for being remade, refined ,
reconditioned etc., the date of entry into the place
of business
(c) for provisionally paid tax, the date of adjustment of
tax after the final assessment
(d) refund as a consequence of judgment, decree, order or direction of Appellate Authority, Appellate
Tribunal or any Court, the date of communication
of such judgment, decree, order or direction;
(e) refund of unadjusted input tax credit - the end of
the financial year in which such claim for refund
arises; and
(f) in any other case, the date of payment of tax.
GOODS & SERVICE TAX (GST)
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 7 Chartered Accountants
SERVICE TAX
COURT DECISIONS
WONDER CARS PVT. LTD. VERSUS COMMISSIONER OF
CENTRAL EXCISE, PUNE I [CESTAT MUMBAI]
BRIEF: Provision of additional services to the purchaser
of Cars like collection of Smart Card Fees, Vehicle
Registration Fees and other extra charges cannot be
categorised as ^Business Support Services _ and made
liable to service tax.
OUR COMMENTS : The assessee is an authorized dealer
of Maruti Cars. The assessee also receives an amount
from its customers against Smart Card Fees, Vehicle
Registration Fees and other extra charges. By extending
these services, he seeked to build a strong supportive
relationship with present and prospective customers.
A per Revenue, these extra charges collected by the
assessee are taxable under the category of Business
Support Services.
The Hon’ble CE“TAT held that the definition of Business
Support Services as per section 65(104c) of the Finance
Act covers ^customer relationship management
services _. However, the definition talks about an entity
rendering customer relationship management services
and not the customer relationship services rendered by
the assessee himself as an aid to his primary business
activity.
Hence, the extra charges collected by the assessee is not
liable to service tax, accordingly, the impugned order
was set aside.
[Decided in favor of assessee]
M/S TANYA AUTOMOBILES PVT LTD. VERSUS
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX,
MEERUTI [CESTAT ALLAHABAD]
BRIEF: If there is documentary proof specifically
indicating the value of the goods supplied/sold during
repairs, the demand of Service Tax for the cost of the
goods supplied is not sustainable.
OUR COMMENTS : The assessee is an authorized service
station of motor vehicles.
The department issued a show cause notice against the
assessee alleging that he was paying Service Tax on the
labour charges only and not on value of spare parts and
lubricants used in the course of servicing of the motor
vehicles.
The Hon’ble CE“TAT
observed that where the party is
liable to pay Service Tax on the entire invoices/bills, then
by virtue of Notification No. 12/03, service tax exemption
is available to the extent of value of the goods and
materials sold by the service provider to the service
recipient provided a documentary proof of such sale
exists and no credit of Central Excise duty paid on
consumables and spares has been taken.
In the above case, though no separate invoice was issued
for the sale of spares and consumables, the assessee is
showing their value separately in the invoice and also
paying VAT/Sales Tax on the same i.e. there is a
documentary proof specifically indicating value of the
goods.
Hence, no service tax liability arises on the value of the
spare parts and lubricants used in the course of servicing.
Accordingly, the impugned order was set aside.
[Decided in favor of assessee]
CENTRAL TAXES
THIS SPACE HAS
BEEN INTENTIONALLY KEPT VACANT
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 8 Chartered Accountants
CENTRAL EXCISE
NOTIFICATIONS/CIRCULARS
INSERTION OF A SUNSET CLAUSE OF 31.03.2016 AND
DENIAL OF EXEMPTION TO SPECIFIED GOODS AS PER
NOTIFICATIONS NO.56/2002-CE & NO.57/2002-CE
DATED 14.11.2002
OUR COMMENTS :
The Dept. of Revenue, Ministry of
Finance, Government of India vide Notification No.
3/2016-Central Excise dated 22.01.2016 has amended
Notification No. 56/2012-CE and 57/2002-CE both dated
14. 11.2012 and insert ed a sunset clause of 31.03.2016
and denied exemption to goods on which certain
specified processes have been undertaken
The notification is self-explanatory. The readers may
refer the said notification.
COURT DECISIONS
COMMISSIONER OF CENTRAL EXCISE, BHOPAL VERSUS
M/S INOX AIR PRODUCTS [CESTAT NEW DELHI]
BRIEF: The packing of the gases into cylinders is not
necessary for making the gas marketable - these
charges would not be includible in the assessable value.
OUR COMMENTS : In the above case, the assessee is
engaged in the manufacture of Oxygen Gas and
Medicinal gas. He collected charges towards cylinder hire
charges/cylinder repair charges and cylinder testing
charges from the buyers which were not included in the
transaction value.
The Revenue issued a show cause notice taking the view
that as per definition of 'transaction value', the assessee
is bound to pay duty on cylinder hire charges, repair
charges and testing charges collected from buyers.
The Hon’ble CE“TAT held that that the substantial
quantity of gases, in question, were marketable and
being supplied in tankers as well as through pipe line and
also in the cylinders brought by the customers and as
such, the packing of the gases into cylinders is not
necessary for making the gas marketable.
Accordingly, the above charges are not includible in the
transaction value.
[Decided against Revenue]
M/S INDICA CHEMICAL INDUSTRIES PVT LTD VERSUS
COMMISSIONER OF CENTRAL EXCISE, MEERUT-
I
[CESTAT NEW DELHI]
BRIEF: When the goods are delivered ex-factory and the
place of removal is factory gate, the freight element has
no bearing on the valuation of the product.
OUR COMMENTS : In the above case, the assessee is
engaged in the manufacture of expanded perlite ore
liable to Central Excise duty. The terms of delivery are ex-
factory.
The revenue contends that there are two points of
dispute regarding the freight element in this case. The
first issue is that assessee does not include freight
(collected separately from the buyers) in the invoice i.e.
in the assessable value. The second issue is that amount
collected in excess of actual freight from the buyers shall
also be added in the assessable value.
On the first issue, the Hon’ble CE“TAT held that in case
of ex-factory transaction, the arrangement for delivery of
goods to the buyer after their clearance from the factory
has nothing to do with the assessable value of the goods
unless it is established that place of removal for valuation
purpose is the delivery point at the buyer's premises.
The second issue also lies unsustainable on the same
ground that when the goods are delivered ex-factory and
the place of removal is factory gate, the freight element
has no bearing on the valuation of the product.
Hence, the freight amount not being shown in the
invoice or some additional income has come to the
appellant from freight charges cannot be the reason to
add extra amounts in the invoice meant for ex-factory
delivery of goods.
Accordingly, the impugned order was set aside.
[Decided in favour of assessee]
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 9 Chartered Accountants
CUSTOMS
NOTIFICATIONS & CIRCULARS
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
(PROCEDURE FOR APPOINTMENT AS PRESIDENT)
RULES, 2016
OUR COMMENTS : The Department of Revenue, Ministry
of Finance, Government of India vide Notification No.
G.S.R. 101(E) dated 21.01.2016 has made ^Customs,
Excise & Service Tax Appellate Tribunal (Procedure for
Appointment as President) Rules, 2016 _ which shall
come into force on the date its publication in the Official
Gazette.
The notification is self-explanatory. The readers may
refer the said notification for details.
REVISION OF EXCHANGE RATE OF FOREIGN CURRENCIES
INTO RUPEE & VICE VERSA
OUR COMMENTS :
The CBEC (Dept. of Revenue), Ministry
of Finance, Government of India vide Notification No.
14/2016-Customs (N.T.) dated 21.01.2016 & in
supersession of Notification No. 02/2016-Customs
(N.T.) dated 07.01.2016 has revised the exchange rate
of foreign currencies specified in col.(2) of each of
Schedule I and Schedule II annexed hereto, into Indian
currency or vice versa, w.e.f. 22.01.2016 to be the rate
mentioned against it in the corresponding entry in
column (3) thereof, for the purpose of the said section,
relating to imported and export goods.
SCHEDULE-I
Sl. No Foreign Currency Rate of exchange of one unit
of foreign currency equivalent
to Indian rupees
(1) (2) (3)
(a) (b)
(For
Imported
Goods)
(For Export
Goods)
1. Australian Dollar 47.70 46.30
2. Bahrain Dinar 185.45 174.80
3. Canadian Dollar 47.35 46.35
4. Danish Kroner 10.05 9.75
5. EURO 74.70 72.90
6. Hong Kong Dollar 8.75 8.60
7. Kuwait Dinar 229.20 216.60
8. New Zealand Dollar 44.30 43.10
9. Norwegian Kroner 7.75 7.55
10. Pound Sterling 97.30 95.15
11. Singapore Dollar 47.65 46.70
12. South African Rand 4.15 3.95
13. Saudi Arabian Riyal 18.60 17.60
14. Swedish Kroner 8.00 7.80
15. Swiss Franc 68.40 66.70
16. UAE Dirham 19.00 18.00
17. US Dollar 68.40 67.35
18. Chinese Yuan 10.45 10.20
SCHEDULE- II
Sl. No Foreign Currency Rate of exchange of 100 units
of foreign currency equv. to
Indian rupees
(1) (2) (3)
(a) (b)
(For
Imported
Goods)
(For Export
Goods)
1. Japanese Yen 58.55 57.25
2. Kenya Shilling 68.20 64.40
GRANT OF PRESIDENTIAL AWARD OF APPRECIATION
CERTIFICATE TO THE OFFICERS OF THE CUSTOMS &
CENTRAL EXCISE ON THE EVE OF REPUBLIC DAY, 2016
OUR COMMENTS : The Department of Revenue, Ministry
of Finance, Government of India vide Notification No.
15/2016 (N.T.) dated 22.01.2016 has awarded an
Appreciation Certificate for Specially distinguished record
of service _ - to specified officers of Customs & Central
Excise Department on the occasion of Republic Day,
2016.
These awards are made under clause (a) (ii) of Para 1 of
the Scheme governing the grant of awards to the officers
and staff of the Customs & Central Excise Department,
Central Bureau of Narcotics, and Directorate of
Enforcement, as published in Part I, Section I of the
Gazette of India Extraordinary, Notification
No.12/139/59-Ad.III (B) dated 5th November, 1962, as
amended from time to time.
The names of the officers awarded have been listed in
the notification. The readers may refer the said
notification.
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 10 Chartered Accountants
INCOME TAX
NOTIFICATIONS & CIRCULARS
TWO ADDITIONAL MODES (GIVING BANK DETAILS,
DEMAT DETAILS) OF GENERATION OF ELECTRONIC
VERIFICATION CODE (EVC) FOR E-ITRS
OUR COMMENTS : The Department of Revenue, Ministry
of Finance, Government of India vide Notification No.
1/2016 dated 19.01.2016 has laid down two additional
modes of generation of Electronic Verification Code
(EVC) in addition to four modes prescribed under
Notification No. 2/2015 dated 13th July 2015.
The two new modes of EVC generation are:
- Generation giving bank details to the efiling website
https://incometaxindiaefiling.gov.in
- Generation using Demat details registered with CDSL/
NSDL
The four modes prescribed earlier under Notification
No. 2/2015 dated 13th July 2015 are:
- generation through Net- Banking
- generation using Aadhaar OTP
- generation using ATM of a Bank
-generation through E -filing Website sent to the
Registered Email ID and Mobile Number of Assessee.
ADVANCE RULINGS (PROCEDURE FOR APPOINTMEN T
AS CHAIRMAN AND VICE-CHAIRMAN) RULES, 2016
OUR COMMENTS : The Department of Revenue, Ministry
of Finance, Government of India vide Notification No.
G.S.R. 100(E) dated 21.01.2016 has made ^Authority for
Advance Rulings (Procedure for Appointment as
Chairman and Vice-Chairman) Rules, 2016 _ which shall
come into force on the date its publication in the Official
Gazette.
The notification is self-explanatory. The readers may
refer the said notification for details.
COURT DECISIONS
THE PRINCIPAL COMMISSIONER OF INCOME TAX-
6
VERSUS M. TECH INDIA P. LTD. [DELHI HIGH COURT]
BRIEF: If software is acquired with the right to use it,
the payment made for the same would amount to
royalty, however, if the software is acquired as a
product for reselling, the consideration paid cannot be
considered as royalty and disallowed under Section
40(a) of the Act for non-deduction of TDS.
OUR COMMENTS : In the above case, the assessee is a
Value Added Reseller (VAR) of the software. He
purchased certain software from Australia and Malaysia
under VAR agreement. Similar purchases made earlier
have been allowed as expenditure for the computation
of taxable income.
However, in AY 2008-09, the Revenue treated these
expenditures as royalty payments and disallowed the
same under section 40(a) in the computation of taxable
income for non-deduction of TDS.
The Hon’ble H igh Court held that in the cases where an
assessee acquires the right to use a software, the
payment so made would amount to royalty. However in
cases where the payments are made for purchase of
software as a product, the consideration paid cannot be
considered to be for use or the right to use the software.
Where software is sold as a product it would amount to
sale of goods.
It is necessary to make a distinction between the cases
where consideration is paid to acquire the right to use a
patent or a copyright and cases where payment is made
to acquire patented or a copyrighted product/material.
Accordingly, the payments made for acquisition of
software for reselling shall be allowed as deduction.
[Decided against revenue]
TAX CONNECT – 53 rd
Issue JAV & ASSOCIATES
(31 Jan. 2016 – 6 Feb. 2016) Page 11 Chartered Accountants
BIHAR
BIHAR VALUE ADDED TAX RULES, 2005: AMENDMENT
IN RULE 14 REGARDING DETERMINATION OF VALUE OF
STOCK TRANSFERS OUTSIDE THE STATE AND DELETION
OF RULE 17 REGARDING REFUND OF TAX TO FOREIGN
DIPLOMATS OR FOREIGN MISSIONS
OUR COMMENTS : The Commercial Tax Department ,
Government of Bihar vide Notification No. S.O.12 dated
13. 01.2016 has amended Rule 14(2)(b)
The value of stock transfers outside the state shall be
arrived as follows:
R2 = [B X I) ÷ P]
Where, R2 = The reverse credit on account of stock transfers
outside the State; B = The total value of stock transfers outside the State;
I = The input tax paid by the dealer on purchase of
inputs, other than those specified in Schedule I, during
the month; and P = The value of goods, other than goods specified in
Schedule I of the Act, purchased during the month from
within the State.
Earlier the formula was: R2 = [B X 4) ÷ 100]
Also, Rule 17 for Refund of tax to foreign diplomats or
foreign missions has been deleted.
GOA
AMENDMENT IN SCHEDULE C - REGARDING PURCHASE
OF THE MOTOR CAR BY INDIAN ARMED FORCES
OUR COMMENTS : The Department of Finance ,
Government of Goa vide Notification No. 4/5/2005- Fin(R&C)(132) dated
20.01 .2016 has amended
Notification No. 4/5/2005-Fin (R&C)(106) dated 13- 05-
2013 and thereby substituted “hedule ZC[ appended to
the Goa Value Added Tax Act, 2005 regarding purchase
of the Motor Car by Indian Armed Forces.
The notification is self-explanatory. The readers may
refer the said notification for details.
HARYANA
SUBSTITUTION OF SECTION 59A - AMNESTY SCHEME
OUR COMMENTS : The Legislative Department,
Government of Haryana vide Notification No. Leg.
1/2016. dated 13. 01.2016 has substituted Section 59A as
follows: ^ 59A Amnesty Scheme - Notwithstanding anything to the
contrary contained in this Act and rules framed
thereunder, the Government may, by notification in the
Official Gazette, notify amnesty scheme covering
payment of tax, interest, penalty or any other dues under
the Act, for the period prior to the 1st April, 2015,
subject to such conditions and restrictions, as may be
specified therein, covering tax, rates of tax, period of
limitation, interest, penalty or any other dues payable by
a class of dealers or classes of dealers or all dealers. _
MADHYA PRADESH
EXEMPTION FROM ENTRY TAX UNDER INDUSTRIAL
PROMOTION POLICY, 20 14
OUR COMMENTS : The Commercial tax Department,
Government of Madhya Pradesh vide Notification No. F
A 3- 33-2014-1-FIVE(03) dated 14.01.2016 has fully
exempt ed an industrial unit from payment of entry tax
which is eligible to avail of the facility of exemption from
payment of entry tax in accordance with the provisions
of Promotion Scheme made by the Commerce, Industry
and Employment Department under the Industrial
Promotion Policy, 2014.
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STATE TAXES
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