TDS ON GTA

-- Clarification regarding deduction of tax from payments made to transporters u/s 194Cin view of amendment to section 194C(6) effective from 01.06.2015

 

Position up to 31.05.2015

 

On transport contracts, if payment is made or the liability to pay has arisen on or before 31.05.2015, as the case may be, the payer is not liable to deduct tax at source, provided the transport contractor has furnished his PAN to the payer. (i.e. No TDS if transport contractor furnished his pan (irrespective of the size of the transport contractor))

 

Position on or after 01.06.2015

 

1.      The amended provisions apply for payments made or liability to pay reckoned on or after 01.06.2015, as the case may be, in respect of transport contracts of the nature mentioned below;

 

2.      The payer may be engaged in the business of transport or otherwise (this is clarified by the Memorandum explaining the Finance Bill 2015) (i.e. the payer may be engaged in any business);

 

3.      Conditions vis-à-vis the recipient (i.e. the transport contractor)

 

a.       The recipient shall be engaged in the business of plying, hiring or leasing goods carriages (and)

 

b.      The recipient shall not own more than 10 goods carriages at any time during the financial year (and)

 

c.       The recipient shall furnish to the payer a declaration to the above effect and along with copy of his / itsPAN

 

4.      Conditions vis-à-vis payer (i.e. S. 194C(7) which is not amended)

 

The payer shall inform the Income Tax Authority the prescribed particulars in the prescribed manner about the matters dealt with in paragraph 3 above

 

5.      What are the forms prescribed

 

For declaration from recipient

No form is prescribed yet. However it is advisable that declaration may be obtained in the format of erstwhile form 15 - I with suitable modifications. Form 15 I is enclosed for ready reference.

For furnishing of information by payer

Here also no format is prescribed. The options are as under :   1.      Compile information in the format of erstwhile Form 15 – J, with suitable modifications, and produce the details when called for by the assessing officer. Form 15 – J is enclosed for ready reference   2.      Furnish the particulars on a quarterly basis in Form No. 26Q (i.e. disclose as amount paid and no TDS done). On processing of 26Q, this sometimes can result in demands raised by TRACES .

 

 

CA..THOMAS K.GEORGE

MANAGING PARTNER,

THOMAS & ASSOCIATES,

CHARTERED ACCOUNTANTS,C

MOOLAIPARAMBIL ATM CHAMBERS,

OPP.RMS, RAILWAY STATION ROAD,

KOTTAYAM-686001

PHONE : 04812300496

MOB     :919447773937

www.thomasandassociatesindia.com

SERVICE TAX PROVISIONS

Mail from CA.Thomas Kenny 

 

 

Last Saturday we  attended a CPE seminar at Ekm.The first session was the ICDS ie the accounting standards notified for Income Tax purposes. 

The second session dealt with service tax audit.

 

Please find some points   for the benefit of partners who could not attend .Please correct any errors .This email is only for the purpose of facilitating further discussion in our partners meeting on Saturday.

Some of the important points are 

 

1 There is a limitation period for serving  Show Cause Notice (SCN)  by the department ie 5 years from the relevant date if the assessee is involved in fraud, suppression of facts, misrepresentation ,collusion, contravention of the provisions of the rules  etc. ( ie if there is  mala fide intention on assesses part)  .In other cases its 18 months from the relevant date. Note: Previously the ordinary time period was 12 months which was extended to 18 months by Finance Act 2012 dated 28.05.2012.

 

It is important to keep the envelope cover of the show cause notice to establish the date of receipt of the Show Cause Notice ie date stamped on the envelope

 

Relevant date is the due date for filing ST return or the actual date of filing the return whichever is later. 

The period of 5 years or 18 months has to be worked backwards ie from the date of receipt of show cause notice work backwards towards the relevant date. See if this period so worked out exceeds the limitation period of 5 years or 18 months as the case maybe

 

2 When the assesse receives the summons the auditor should not go along with assessed  as in that case auditor cannot later make representation later on behalf of the assesse. 
3 The reply to the show cause notice should cover all possible points .Otherwise it will be difficult for the assessee at the appeals stage to include additional points or to frame new reasoning.
4 When the audit party from service tax dept.  comes for audit the assessee should make all information and documents available to them including accounts. If not so done the audit party can treat all credits as income. The assessee will have no standing if the the information is not so furnished, as at the  appeal stage  the appellate  authority is likely to reject the same 
5 It there is a genuine mistake in not paying service tax admit the same before the service tax authorities ,for example due to ignorance of provisions of law.
6 Before the service of notice by service tax authorities, if its discovered that there is a default in payment, pay the same at the earliest. Paying after the service of notice can attract full penalties 
7 Look for any flaws in the SCN and reply based on the facts of the case 
8 When the assesses is before the service tax authorities  after being summoned and requested to sign any document be sure that the information contained therein is correct 
9 If you sign the above document and discover it was incorrect, the facility of forwarding a retraction letter is available 
10 In case the assessee admits in the ST 3 that service tax is payable ,then recovery proceedings can be initiated. So be careful that any arithmetic errors are not there in the ST 3 return 

 

11 ST 3 return can be revised only once ,within a period of  90 days 

 

12 On taking a new registration, the assessee may send a letter to the department explaining in detail the nature of business, services offered, abatements to be availed and other relevant information .This letter will be helpful if later on if any suppression is alleged.

 

Regards

 

SERVICE TAX PROVISIONS

--

CA..THOMAS K.GEORGE

MANAGING PARTNER,

THOMAS & ASSOCIATES,

CHARTERED ACCOUNTANTS,C

MOOLAIPARAMBIL ATM CHAMBERS,

OPP.RMS, RAILWAY STATION ROAD,

KOTTAYAM-686001

PHONE : 04812300496

MOB     :919447773937

www.thomasandassociatesindia.com