Notifications
Agricultural Income Tax treatment / Taxability

Agriculture income is exempt under the Indian Income Tax Act. This means that income earned from agricultural operations is not taxed. The reason for exemption of agriculture income from Central Taxation is that the Constitution gives exclusive power to make laws with respect to taxes on agricultural income to the State Legislature. However while computing tax on non-agricultural income agricultural income is also taken into consideration. 

 

Introduction:

Agricultural income earned by a taxpayer in India is exempt under Section 10(1) of the Income Tax Act, 1961. Agricultural income is defined under section 2(1A) of the Income-tax Act.

As per section 2(1A), agricultural income generally means  (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. (b) Any income derived from such land by agriculture operations including processing of agricultural produce so as to render it fit for the market or sale of such produce. (c) Any income attributable to a farm house subject to satisfaction of certain conditions specified in this regard in section 2(1A). Any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income.

Meaning of Agricultural Income:

Section 2 (1A) of the Income Tax Act, 1961 defines “agricultural income” as an income under the following three sources:

(i) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes: The assessee will not be liable to pay tax on the rent or revenue arising from agricultural land subject to the conditions:

(a) The land should either be assessed to land revenue in India or be subject to a local rate assessed and collected by officers of the Government.

(b) In instances where such a land revenue is not assessed or not subject to local rate, the land should not be situated within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board, and which has a population of more than ten thousand (according to the last preceding census which has been published before the first day of the previous year in which the sale of land takes place); or it should not be situated:

  • more than 2kms. from the local limits of any municipality or cantonment board and which has a population of more than 10,000 but not exceeding 1,00,000; or
  • not being more than 6kms. from the local limits of any municipality or cantonment board and which has a population of more than 1,00,000 but not exceeding 10,00,000; or
  • not being more than 8kms. from the local limits of any municipality or cantonment board and which has a population of more than 10,00,000.

(c) The revenue must not include any income arising out of transfer of such land.

Further, a direct nexus between the agricultural land and the receipt of income by way of rent or revenue is essential. (For instance, a landlord could receive revenue from a tenant.)

(ii) Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent in kind or any process ordinarily employed by cultivator or receiver of rent-in-kind so as to render it fit for the market, or sale of such produce.

(iii) Any income derived from any building owned and occupied by the assessee, receiving rent or revenue from the land, by carrying out agricultural operations: The building must be on or in the immediate vicinity of the land. It must be used by the assesee as a dwelling house or store-house or an out-building, in connection with the land.

 

- Read the Full Article

17-December-2015
Delhi VAT-Filling of reconciliation return for year 2014-15- Date extended to 15.01.2016

In partial modification to this department’s Circular No.28 of 2015-16 on the subject cited, above and in exercise of the powers conferred under Rule 49A of  the Delhi Value Added Tax Rules, 2005 read with section 9(2) of Central Sales Tax Act, 1956, I, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last date of filing of online return in Form 9 for the year 2014-15, prescribed under Rule 4 of Central Sales Tax (Delhi) Rules, 2005 to 15/01/2016.

GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI

DEPARTMENT OF TRADE AND TAXES

(POLICY BRANCH)

VYAPAR BHAWAN, IP. ESTATE, NEW DELHI-110 002

No.F.3(589)/Policy/VAT/2015/1162-68

Dated 15/12/2015

CIRCULAR NO. 32 of 2015-16

Sub: Filling of reconciliation return fothe year 2014-15.

In partial modification to this department’s Circular No.28 of 2015-16 on the subject cited, above and in exercise of the powers conferred under Rule 49A of  the Delhi Value Added Tax Rules, 2005 read with section 9(2) of Central Sales Tax Act, 1956, I, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last date of filing of online return in Form 9 for the year 2014-15, prescribed under Rule 4 of Central Sales Tax (Delhi) Rules, 2005 to 15/01/2016.

 

The return is to be filed by dealers who have made interstate sale at concessional rates against statutory forms ‘C’ or stock transferred against ‘F’ forms or sold the goods against  ‘H’ forms to dealers (other than Delhi) or claimed deduction from taxable turnover against E-I/EII forms or I/J forms etc.

The dealers who have not made the sale as mentioned above need not file reconciliation return in Form 9.

(S.S. Yadav)

Commissioner, Value Added Tax

- Read the Full Article

17-December-2015
Delhi VAT-Filling of reconciliation return for year 2014-15- Date extended to 15.01.2016

CIRCULAR NO. 32 of 2015-16 In partial modification to this department’s Circular No.28 of 2015-16 on the subject cited, above and in exercise of the powers conferred under Rule 49A of the Delhi Value Added Tax Rules, 2005 read with section 9(2) of Central Sales Tax Act, 1956, I, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last date of filing of online return in Form 9 for the year 2014-15, prescribed under Rule 4 of Central Sales Tax (Delhi) Rules, 2005 to 15/01/2016.

 

 

GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI

DEPARTMENT OF TRADE AND TAXES

(POLICY BRANCH)

VYAPAR BHAWAN, IP. ESTATE, NEW DELHI-110 002

No.F.3(589)/Policy/VAT/2015/1162-68

Dated 15/12/2015

CIRCULAR NO. 32 of 2015-16

Sub: Filling of reconciliation return fothe year 2014-15.

In partial modification to this department’s Circular No.28 of 2015-16 on the subject cited, above and in exercise of the powers conferred under Rule 49A of  the Delhi Value Added Tax Rules, 2005 read with section 9(2) of Central Sales Tax Act, 1956, I, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last date of filing of online return in Form 9 for the year 2014-15, prescribed under Rule 4 of Central Sales Tax (Delhi) Rules, 2005 to 15/01/2016.

 

The return is to be filed by dealers who have made interstate sale at concessional rates against statutory forms ‘C’ or stock transferred against ‘F’ forms or sold the goods against  ‘H’ forms to dealers (other than Delhi) or claimed deduction from taxable turnover against E-I/EII forms or I/J forms etc.

The dealers who have not made the sale as mentioned above need not file reconciliation return in Form 9.

(S.S. Yadav)

Commissioner, Value Added Tax

 

- Read the Full Article

17-December-2015
Gearing up for GST- Draft Law at a Glance

Goods and Service Tax-A dual tax system, proposed in the report submitted by the Joint Working Group of the Empowered Committee of the State Finance Ministers in November 2007, was to be implemented in April 2010,one for the Centre and other for the states replacing the state VAT and Cenvat. However the final decision on the time of its implementation is still pending as it is hanging between the ruling and opposition party due to certain undecided terms and conditions. 

GEARING UP FOR GOODS AND SERVICES TAX-Vol I

(DRAFT LAW- AT A GLANCE)

“IMPACT AND IMPLICATIONS”

The article (Vol I) broadly covers the various specific provisions related to working and operation of Goods and Services Tax vis-à-vis the statutory requirements of Model Draft law released by Govt w.r.t. concept of Txable event under GST i.e. Supply of goods and services.

The article also brings out the clarity on the various issues addressed in the reports of registration and refund released by the Govt.

As a part of Vol II, other provisions and pending reports will be summarised and issues will be addressed as contemplated in the reports of payment and return issued by Govt.)

Authors

Goods and Service Tax-A dual tax system, proposed in the report submitted by the Joint Working Group of the Empowered Committee of the State Finance Ministers in November 2007, was to be implemented in April 2010,one for the Centre and other for the states replacing the state VAT and Cenvat. However the final decision on the time of its implementation is still pending as it is hanging between the ruling and opposition party due to certain undecided terms and conditions.

GST is a value added tax to be levied on both goods and services, except the exempted goods and services. The tax will be levied on the value of the product or service supplied. The taxes levied at the multiple stages such as CENVAT, Central sales tax, State Sales Tax, Octroi etc will be replaced by GST to be introduced at Central and State level.

Why GST- How GST will be better than existing tax structure

The single comprehensive tax is expected to give following advantages over and above the existing tax structure-

  • Dual model GST under federal structure i.e. CGST & SGST,
  • Elimination of cascading effects of the taxes,
  • CGST & SGST to be charged on same price,
  • Set-off relief fully captured,
  • Destination based tax structure,
  • Free movement of goods & service through out the country,
  • Applicable to all transactions of Goods & Services with some exceptions,
  • Input tax credit (ITC) for the CGST/SGST and could be utilized for payment of CGST/SGST, but cross utilization not allowed, except IGST
  • Inter State GST (IGST) –new model for Interstate transactions
  • It will also improve the International cost competitiveness of native Goods and Services.

Government Has Released Model Draft of Proposed GST Act, 2016 and the 130 page report has been divided into 14 parts, 81 sections, 3 schedules and GST Valuation(Determination of the value of Supply of Goods and Services) Rules 2016.The issues covered in the report broadly covers the following

  1. Definition of 77 terms
  2. Meaning and scope of supply of goods and services
  3. Classes and powers of officers under the act
  4. Time of supply of goods and services
  5. Identifying the nature of Supply- interstate or intrastate
  6. Place of supply of goods and services
  7. Value of taxable supply
  8. Manner of taking input tax credit and utilisation thereof
  9. Remission of tax on supplies found deficient in quantity
  10. Recovery of tax not paid or short paid or erroneously refunded
  11. Interest on delayed payment of tax
  12. Refund of tax and interest on delayed refund
  13. Registration-amendment, cancellation, revocation
  14. Accounts and records –tax invoice, credit and debit notes, other records including period of retention
  15. Furnishing details of inward and outward supplies
  16. Payment of taxes, penalty, interest and other amounts.
  17. Offences and penalties.

1. GST applicable on ‘supply of goods and services’

Section 3- Meaning and Scope of Supply

  • Supply includes supply of goods and services
  • Includes all forms of supplies
    • sale
    • Transfer
    • Barter
    • Exchange
    • License
    • Rental
    • Lease
    • Disposal
    • Importation of services

made or agreed to made For a consideration by a person in the course or furtherance of business

Matters to be treated as supply even without consideration– Schedule 1

  1. Permanent transfer/ disposal of business assets
  2. Temporary application of business assets to a private or non business use
  3. Services put to a private or non business use
  4. Self supply of goods and or services
  5. Assets retained after deregistration

Explanation to Schedule II

Supply of goods Supply of services
1.   Transfer of title of goods

 

2.   Transfer of title of goods   under an agreement of transferring property in goods at a future date

3.   Transfer of Business Assets with or without any consideration

–        Which are no longer required

By/ under directions of the person carrying on business

4.   Transfer of goods included in business assets

–        Sold by other person who has the power to do

–        To recover any debt

–        Owed by taxable person

1.   Transfer of goods / transfer of rights in goods/ undivided share of goods without transferring title of goods.

 

2.   Lease, tenancy, easement, license to occupy land

3.   Lease or letting out of the building– commercial, industrial, residential

for business/ commerce

wholly or partly

4.   Treatment/ process applied to another person’s goods

5.   Goods held or used for the purposes of business

–        Put to any private use

–        Made available to any person for use

–        For any purpose other than the business purpose

–        With or without any consideration

 2. GST payable as per time of supply

The liability to pay CGST / SGST will arise at the time of supply as determined in the following provisions prescribed separately for Goods and Servoces.

Sec 11- Time of Supply of Goods

1. On the basis of the Movement of Goods

Goods required to be moved-Date on which the goods are removed by the supplier for supply to the buyer

Goods not required to be moved-Date on which goods are made available to the buyer.

2. On the basis of transactions- either of the following

a. Date of issue of invoice by supplier

b. Date of receipt of payment by supplier

c. Date of receipt of goods entered into books of accounts of buyer.

3. On the basis of continuous supply of goods

Successive statement of accounts and payments involved-Date of expiry of period to which it relates

Successive statement of accounts and payments not involved-Date of issue of invoice or Date of receipt of payment whichever is earlier

4. When goods are sent or taken on approval or sale or return or similar terms

In this goods are removed before it is known whether the supply will take place

  • Time when it is known that supply has taken place or
  • 12 months from the date of removal

Whichever is earlier

5. In any other case

Periodical return has to be filed- Date on which such return has to be filed

Periodical return no to be filed- Date of payment of CGST/ SGST

Sec 12- Time of Supply of Services

1. On the basis of issue of Invoice

  • Invoice issued within the prescribed period-Date of issue of invoice or date of receipt of payment whichever is earlier
  • Invoice not issued within the prescribed period- Date of completion of provision of service or the date of payment whichever is earlier
  •  In other case- Date on which the recipient shows the receipt of service in his books of accounts

2. On the basis of continuous supply of services

  • If the due date is ascertainable- Date of liability of payment to service provider
  • If the due date is not ascertainable- Date of receipt of payment or issue of an invoice whichever is earlier

3. In other situations

-the payment is linked to the completion of an event When the event gets completed
-if tax is paid on reverse charge basis Earliest of-

 

–  Date of receipt of services

–  Date of payment

–  Date of receipt of invoice

–  Date of debit in books of accounts

Supply ceases before completion of service At the time of cessation

4. In any other case

  • Periodical return has to be filed- Date on which such return has to be filed
  • Periodical return no to be filed- Date of payment of CGST/ SGST

(Sec 13 explains the various situations when there is a change in rate of tax in respect of supply of services)

3. Determining Place of Supply

Typically for ‘goods’ the place of supply would be location where the good are delivered. Whereas for ‘services’ the place of supply would be location of recipient.

Sec 15- Place of supply of Goods

Distance supply+ Movement of goods Place of delivery of goods
No movement of goods Place of delivery of goods(handed over to receiver)
Assembly/ installation of goods at site Place of such installation/ assembly
Supplied on board/ conveyance/ vessel Such place
Other cases As recommended by Govt

 Sec 16- Place of Supply of Services

Immovable property

 

Restaurant and catering service

Artistic/ sporting/scientific/ educational/ Entertainment

Transportation of goods

Passenger transportation service

Board a conveyance/ vessel etc

Telecommunication service

Banking/ other financial service

Insurance services

Advertisement services

Provided to registered person- Location of Service recipient

 

Not provided to registered person- Location of Service provider

4. Valuation of Taxable Supply

  • GST would be payable on the ‘transaction value’.
  • Transaction value is the price actually paid or payable for the said supply of goods and/or services between un-related parties.
  • The transaction value is also said to include all expenses in relation to sale such as packing, commission etc.
  • Even subsidies linked to supply will be includable.
  • As regards discounts/ incentives, it will form part of ‘transaction value’ if it is allowed aftersupply is effected.
  • However, discounts/ incentives given before or at the time of supply will be permissible as deduction from transaction value.

Apart from this ,GST Valuation (Determination of the value of Supply of Goods and Services) Rules 2016 have also been provided in the draft law.

 

- Read the Full Article

17-December-2015
Why CGST, SGST and IGST in India and Principle of Subsumation of Taxes
It is a known fact that Dual VAT/GST Model has been sought to be brought in place in India. The common thought of people of the country is that why National VAT/GST has been brought instead of Dual VAT/GST It is a known fact that Dual VAT/GST Model has been sought to be brought in place in India. The common thought of people of the country is that why National VAT/GST has been brought instead of Dual VAT/GST and does the lawmaker’s were not farsighted enough about the option of National GST rather than Dual GST. It also appeared to public at large that why when the people of the country with little knowledge about taxation structure could see the benefits of National GST, could the lawmakers who deemed to have the expertise in the subject not see the benefits of National GST in place of Dual GST. It’s only the half picture that we see. The two models of GST i.e. Dual GST and National GST were both considered in the year 1994 before the implementation of State VAT. After detailed discussion as narrated below Dual GST with independent taxation powers to Centre and State upto a certain part of supply chain with full fledged Credit Mechanism under Excise and State VAT was implemented with an eye on the future for a full fledged Dual GST in the country and National GST was discarded deeming it inappropriate in India. So what is National GST or Dual GST and what are the merits and the demerits of the same and why Dual GST has been preferred over the National GST. The reason for bringing in SGST and CGST also lies in the same answer as well. 
 

♣ What is National VAT/GST:

The Bagchi Report i.e. the Report on “Reform of Domestic Trade Taxes in India: Issues and Options”, National Institute of Public Finance and Policy, New Delhi described National GST as follows:

“A National VAT – VAT as a National levy implemented through a Parliamentary legislation and administered by the Centre (or the States on behalf of the Centre)replacing both Central excise and sales tax, covering all goods and services, with arrangement for revenue sharing.”

The report further went on to provide that

“A unified system of taxing domestic trade in the form of a national VAT imposed and administered by the Centre would appear to be most attractive from many angles. It would, at one stroke, bring about harmonization and help remove the tax on inter-State trade.”

It would be pertinent here to provide that National GST/VAT is presently in place in Australia, Germany, Austria, Switzerland etc.

  • Why National VAT/GST was not implemented and was ill favored by the lawmakers:

The big question arises that why the law makers implemented Dual GST Model and National GST i.e. one common GST model was not brought in place in the country.

To understand it better, we would have to consider an hypothetical example wherein entire revenue from the taxes in the country say Rs 5 Lakh Crore revenue is administered and imposed by Centre and which is to be distributed by the Centre between all the States and Centre on an appropriate basis.

One possible scenario in the given situation is that some of the States might get the desired revenue and some would not be satisfied and allegations would then be levied regarding political backlash etc. It could be a harsh reality that leaving aside the States ruled by Political Party ruling the Centre might feel short charged in the entire scheme of distribution of revenue.

- Read the Full Article

17-December-2015
Input Tax Credit in Model GST Law, 2016

Input Tax Credit means credit of input tax. Every taxable person is entitled to take credit of input tax. Input tax means the IGST, CGST or SGST/ IGST and CGST/ IGST and SGST charged on any supply of goods/ services which are used, or are to be used, in the course or furtherance of business. Taxable Person means a person who carries on any business at any place in India/State and who is registered or required to be registered under Schedule III of this Act for payment of tax.Every taxable person may deduct the amount of admissible credit in respect of a tax period from the output tax for the same period and pay the remaining amount, if any.

♠ Tax period means the period for which the tax return is required to be filed.

♠ Output tax means the IGST/CGST/SGST chargeable on taxable supply of goods and/or services and Includes tax payable on reverse charge basis.

♠ In case goods/ services are being used partly in business and partly for other purposes, only the input tax credit which attributable to the purpose of business will be available.

♠ In case goods except capital goods / services are being used partly for taxable supplies and partly for non-taxable supplies including exempt supplies, only the input tax credit which attributable to the taxable supplies will be available. Zero rated supplies will be treated as taxable supplies.

♠ Exempt supplies means supply of any goods/ services which are not taxable under this act and includes such supply of goods/ services which are specified in this behalf as exempt supplies.

♠ Taxable supply means a supply of goods/services which is chargeable to tax under this act.

♠ Zero-rated supply means a supply of any goods/services on which no tax is payable but credit of the input tax related to that supply is admissible.

♠ Utilisation of input tax credit will be as per below order:

Nature of TAX Adjustment order
  CGST SGST IGST
CGST 1st NA 2nd
SGST NA 1st 2nd
IGST 2nd 3rd 1st

♠ Excess credit may be carried forward for adjustment against the output tax of the subsequent period.

♠ Any unadjusted input tax credit at the end of the any tax period may be refunded. However if any amount is due from the assessee or he has defaulted in submission of any return, such refund may be uphold or can be adjustment for the liability due to the assessee.

♠ No refund is possible in cases other than exports or where credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on outputs. Also in case of export, no refund will be allowed if goods exported out of India are subjected to export duty.

♠  To claim Input tax credit, there should be a tax invoice issued by a registered supplier and also tax charged in such tax invoice should be paid to the appropriate government either in cash or utilisation of input tax credit. However, no input tax credit will be available on the followings:

  • Motor vehicles except those supplied in the usual course of business or used for commercial purposes including imparting training on motor driving skills.
  • HSD, petrol, ATF, crude oil & aviation gasoline and those goods not liable to pay GST.
  • Goods or services provided in relation to outdoor catering, health services, beauty treatment, life insurance, health insurance & other services, when such goods/ services are used primarily for personal use or consumption of any employee.
  • Goods used in construction of immovable property other than plant & machinery
  • Goods/ services acquired in the execution of works contract when such contracts results in construction of immovable property, other than plant & machinery.
  • Goods / services on which tax has been paid under Compounded Levy scheme
  • Goods/ services used for private or personal consumption
- Read the Full Article

27-November-2015
Amendment in Noti. No. (75) & (76) Dt. 07-10-2014 [Form-18 (Self Assessment) Date Extended up to... VAT/CST/ET :F-10/78/2014/CT/V (86) Dt. 31/12/2014

comming soon

- Read the Full Article

27-November-2015
VAT :F-10-23/2015/CT/V (53) Dt. 03/07/2015 Steel Bars & Steel Structural VAT @ 3% for the period 09-01-2015 to 31-01-2015.

Coming Soon

- Read the Full Article

27-November-2015
VAT :F-10-23/2015/CT/05 (45) Dt. 30/04/2015 Time Barring Assessment period FY 09-10 Extended up to 31st July, 2015 & FY 10-11 extended up to...

VAT :F-10-23/2015/CT/05 (45) Dt. 30/04/2015
Time Barring Assessment period FY 09-10 Extended up to 31st July, 2015 & FY 10-11 extended up to...

- Read the Full Article

27-November-2015
VAT :F-10-12/2015/CT/05 (15) Dt. 30/03/2015 Exemption from Part "C" in Form-18 conditionally upto 30-06-2015 for FY 12-13 & 13-14.

VAT :F-10-12/2015/CT/05 (15) Dt. 30/03/2015
Exemption from Part "C" in Form-18 conditionally upto 30-06-2015 for FY 12-13 & 13-14.

- Read the Full Article

26-November-2015



Copyright 2015 SRKN & ASSOCIATES. All Rights Reserved.

Powered by : WISPL