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Income Tax officials that were seeking tax details on their Gmail and Yahoo! email IDs would henceforth use only official email IDs for official communication
The Income-Tax (I-T) department has directed all of its officials to use official email IDs for all official communication. Moneylife had raised the issue of I-T officials sending mails to taxpayers using IDs from free email service providers like Gmail and Yahoo!.
In a circular, issued on 27 September 2013, the Directorate of I-T, has said, "Since official IDs are available with most of the Departmental Officers, it is instructed that hereinafter all official communication(s) on mail shall be only through the official email IDs detailed above. In the event that an official email is required to be sent urgently and the official email ID not available, the official IDs of the Commissioners of I-T (CsI-T) or Directors of I-T (DsI-T) may be utilised for the same.”
As Moneylife pointed out one of the I-T officers sent a reminder to a wealthy individual to pay his advance tax in time and send details to his Gmail email address.
Here is the circular issued by the I-T department...
The Supreme Court upheld the Bombay High Court’s verdict that asked builders to pay 5% value added tax -VAT for under construction flats sold during 20 June 2006 to 31 March 2010.
The Supreme Court had ruled that value added tax (VAT) cannot be imposed on buyers and builders, developers have to pay the tax (5%) for under construction flats sold during 20 June 2006 to 31 March 2010. The apex court also clarified that VAT is not payable, if a fully constructed flat is sold to the buyer and builders will be liable to pay tax only on cost of construction.
However, there are chances that builder will recover these charges from buyers by adding it in costs and it will only create litigations between builders and buyers.
Earlier, citing a circular issued by the Maharashtra Sales Tax Department, builders were asking flat buyers to pay the additional money before 31 October 2012 for their homes bought between 2006 and 2010. However, several consumer organizations like the Grahak Panchayat had maintained that it is the builder, developer who will have to pay VAT and not flat buyers.
The Supreme Court order will have a direct impact on realtors from Karnataka, Maharashtra and Uttar Pradesh. The order also empowers all state government to issue circulars to levy VAT. Maharashtra government had issued a circular in 2006, and subsequently in 2007 levied a VAT of 5% on sale of flats.
The Supreme Court had clubbed 14 appeals from Karnataka and 12 from Maharashtra. Verdict means that developers in states such as Maharashtra, Uttar Pradesh and Karnataka, where VAT has been levied on such transactions will have to pay the charges. Builders were trying to recover this amount from the buyers.
Although, the state governments and even High Court has said that developers have to pay VAT, several were reluctant to pay the tax.
Advocate General for Maharashtra clearly stated, “Implementation of Rule 58(1-A ) of Maharashtra VAT shall not result in double taxation and in any case all claims of alleged double taxation will be determined in the process of assessment of each individual case." As builders have already paid taxes for raw materials and this may create issues of double taxation. However MVAT rule 58 (1-A) provides deduction of expenses on labour and service charges for the execution of the work related to the goods that has already been transferred.
Earlier, builders’ association CREDAI had approached the apex court after the Bombay High Court rejected their plea to impose only 1% VAT. In 2006, the state government imposed a VAT of 5% on constructions made between 2006 and 2010. The move resulted in an additional tax liability on flats, shops and bungalows sold by developers between 20 June 2006, and 31 March 2010.
To know more about VAT read, VAT on sale of under-construction flats in Maharashtra: All you need to know
The ‘safe harbour’ rules would ensure certainty in taxation of overseas transactions between related parties and reduce transfer pricing-related cases
In a move aims to curtail tax-related disputes with multinational corporations (MNCs) operating in India, the finance ministry has notified ‘safe harbour’ rules. These rules are easier than those announced in a draft and would ensure certainty in taxation of overseas transactions between related parties and reduce transfer pricing-related cases.
"This is a welcome move. It reflects the fact that the Indian Government has its ears to the ground and is listening to the taxpayers and softening the disparity between the transfer pricing positions adopted by the revenue officials and the taxpayers to the extent feasible," said Fatema Hunaid, partner for tax and regulatory services- transfer pricing at Grant Thornton India LLP.
This follows a slew of transfer pricing disputes with many MNCs in the past year, which had hurt the investment environment.
The new rules will be applicable for five years beginning from Assessment Year 2013-14.
Safe harbour rules lay down the framework within which the Income Tax authority shall accept the transfer price declared by the taxpayer. Here, taxpayers follow a simple set of rules/margins under which transfer prices are automatically accepted by the Income Tax authorities.
Transfer pricing, or the value at which companies trade products, services, shares or assets between units across borders, is a regular part of doing business for a multinational. According to experts, transfer pricing is used by companies to minimise their tax payouts.
Hunaid said, "The rules seem like a condensed Advanced Pricing Agreement (APA) kind of mechanism for the taxpayers (IT, ITES, KPO and auto-components manufacturers, intra-group outbound loans and corporate guarantees). Notwithstanding the similarity of the safe harbour rules with the APA regime, these do not have the trappings of a regular APA program and is quite real-time and cost effective in providing a fast-track transfer pricing certainty to the taxpayers so to say."
The rules also provide for an almost real-time audit by the revenue officials regarding the eligibility of the safe harbour claim of the taxpayers. The taxpayers have now also been provided with a resolution mechanism in case their claim is objected to by the revenue officials. This heralds real-time course correction by the taxpayers as against waiting for the normal period of three to four years from the end of the relevant financial year for a normal scrutiny audit to take place.
The other key highlights of the final safe harbour rules are that the turnover ceiling of Rs100 crore for IT/ITES has been removed entirely, thereby making this route available to the industry as a whole. A differential safe harbour profit margin declaration of 20% for below Rs500 crore and 22% for above Rs500 crore has been prescribed. Another positive outcome for Knowledge Process Outsourcing (KPO) services in the final rules is that the initial profit margin of 30% has now been reduced to 25% and the definition has also been rationalised to remove regular Business Process Outsourcing (BPO) activities.