Clarification on “Completion of service”- regarding. & DownLoad Service Tax Form

Circular No. 144/13/ 2011 – ST

F.No.354/93/2011-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

North Block, New Delhi

18^th July, 2011

To

     Chief Commissioners of Central Excise and Service Tax (All),

     Director General (Service Tax),

     Director General (Central Excise Intelligence),        

     Director General (Audit),

     Commissioners of Service Tax (All),

     Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

     Subject: - Clarification on “Completion of service”- regarding.

      

     Representations requesting clarification on “completion of service” as provided under the Point of Taxation Rules, 2011 and Service Tax Rules, 1994 have been received from certain sections of service providers that in many situations it is not possible to issue invoices within 14 days of the completion of the service since the exact date of completion of service is difficult to identify.  Instances have been given where after the task of providing the service may be physically accomplished, but certain other formalities are required to be completed from the client’s end before an invoice can be issued. 

2.  These representations have been examined. The Service Tax Rules, 1994 require that invoice should be issued within a period of 14 days from the completion of the taxable service. The invoice needs to indicate interalia the value of service so completed. Thus it is important to identify the service so completed. This would include not only the physical part of providing the service but also the completion of all other auxiliary activities that enable the service provider to be in a position to issue the invoice.  Such auxiliary activities could include activities like measurement, quality testing etc which may be essential pre-requisites for identification of completion of service. The test for the determination whether a service has been completed would be the completion of all the related activities that place the service provider in a situation to be able to issue an invoice. However such activities do not include flimsy or irrelevant grounds for delay in issuance of invoice.

The above interpretation also applies to determination of the date of completion of provision of service in case of “continuous supply of service”.

3.  Trade Notice/Public Notice may be issued to the field formations accordingly.

4.  Please acknowledge the receipt of this circular. Hindi version to follow.

(Samar Nanda)

Under Secretary, TRU 

For DownLoad any Service Tax Form Click Here

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TDS Rates Chart assessment year 2012-13 or financial year 2011-12 (ay 12-13 / fy 11-12)

TDS Rates Chart assessment year 2012-13 or financial year 2011-12 (ay 12-13 / fy 11-12)

Relevant Section	Nature of Payment (to resident)	ThresholdLimit	Individual HUF (Resident in India)	Company Firm/Co-op Sec. Local Authority(Domestic Company)
192	Payment of salary to a resident/non-resident		Normal Income Tax Rates: SeeIncome Tax Slab
193	Interest on securities		10	10
194	Deemed dividends  u/s 2(22)(e)		10	10
194A	Interest other than Interest on securities	5000	10	10
194B	Lottery or crossword puzzle or card game or other game of any sort.	10000	30	30
194BB	Horse races	5000	30	30
194C	Contracts/sub-contracts	30000	1	2
194D	Insurance Commission	20000	10	10
194EE	Payment in respect of depositsunder NSS	2500	20	-
194F	Payment on account of repurchase of units of MF or UTI	1000	20	10
194G	Commission on sale of lottery tickets	1000	10	10
194H	Commission or brokerage	5000	10	10
194-I	Rent  of Plant and Machinery	180000	2	2
	Rent of Land or Building or Furniture and Fitting	180000	10	10
194J	Fees for professional or technical services	30000	10	10
194LA	Payment of compensation to a resident on acquisition of certain immovable property	100000	10	10

Notes: we.f. 1.10.2009, no TDS is to be deducted on payment to a contractor/sub-contractor, during the course of business of plying, hiring or leasing goods carriages, if the payee furnishes his PAN to the deductor [sec. 194C(6)]

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RBI Guv meets Pranab ahead of credit policy review

PTI | 11:07 PM,Jul 21,2011 New Delhi, July 21 (PTI) Amid fears that there would be another round of interest rate hikes to tame inflation, RBI Governor D Subbarao met Finance Minister Pranab Mukherjee here today, ahead of the central bank's monetary policy review on Tuesday. "I have come to review the macro-economic situation with Finance Minister before the policy review, slated for July 26," Subbarao said after meeting Mukherjee. The meeting was also attended by other senior officials of the Finance Ministry. The Reserve Bank is scheduled to announce the first quarterly review of credit policy for 2011-12 on July 26. It is is widely believed that the central bank will increase short term lending (repo) and borrowing (reverse repo) rates by another 25 basis points. RBI has increased these key rates 10 times since March 2010 to tame the rising prices. They have gone up by 250 basis points (2.5 per cent) since then, making loans costlier for both industry as well as consumers. The headline inflation for June at 9.44 per cent is much above the comfort zone of 5-6 per cent. The central bank faces a challenging task of managing the inflationary pressure at a time when the industrial growth has started showing signs of slowing down. Besides, the resulting moderation of overall economic growth, GDP, is a major concern before RBI. The government has already lowered India's GDP projection for 2011-12 to 8.6 per cent from the earlier estimate of about 9 per cent on account of slowdown in industry output. The factory output growth rate, as measured by the Index of Industrial Production (IIP), dipped to 9-month low of 5.6 per cent in May due to a poor showing by the manufacturing and mining sectors and lower offtake of capital goods.

Exempt to fill income tax return for salaried taxpayers with total income up to Rs.5 lakh

No.402/92/2006-MC (14 of 2011)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi, dated the 23
rd
 June, 2011
PRESS RELEASE
The Central Board of Direct Taxes has notified the  scheme exempting salaried
taxpayers with total income up to Rs.5 lakh from filing income tax return for assessment year
2011-12, which will be due on July 31, 2011.  
Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable
deductions, consisting of salary from a single employer and interest income from deposits in
a saving bank account up to Rs.10,000 are not required to file their income tax return. Such
individuals must report their Permanent Account Number (PAN) and the entire income from
bank interest to their employer, pay the entire tax by way of deduction of tax at source, and
obtain a certificate of tax deduction in Form No.16.
 
Persons receiving salary from more than one employer, having income from sources
other than salary and interest income from a savings bank account, or having refund claims
shall not be covered under the scheme.
 
 The scheme shall also not be applicable in cases wherein notices are issued for filing
the income tax return under section 142(1) or section 148 or section 153A or section 153C of
the Income Tax Act 1961.

Downloan ITR Form

Notification
New Delhi, the 1st July, 2011
INCOME-TAX
S.O.1497(E).- In exercise of the powers conferred by section 295
read with section 139 of the Income-tax Act, 1961 (43 of 1961), the Central
Board of Direct Taxes hereby makes the following rules further to amend
the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Sixth Amendment) Rules,
2011.
(2) They shall come into force from the date of its publication in the
Official Gazette.
2. In the Income-tax Rules, 1962, in rule 12, in sub-rule (3), in the proviso,
for clauses (a) and (aa) the following clause shall be substituted, namely: –
“ (a) a firm required to furnish the return in Form ITR-5 or an
individual or Hindu Undivided Family (HUF) required to furnish the
return in Form ITR-4 and to whom provisions of Section 44AB are
applicable, shall furnish the return for Assessment year 2011-12 and
subsequent Assessment Years in the manner specified in clause (ii);”
[Notification No.37/2011/ F.No.149/68/2011- SO (TPL)]
(Ashis Mohanty)
Under Secretary to the Government of India
Note.- The principal rules were published in the Gazette of India,
Extraordinary Part-II, Section 3, Sub-section (ii), vide number.S.O.969(E),
dated the 26th March, 1962 and last amended by Income-tax (Fifth
Amendment) Rules, 2011 vide number S.O. 1214(E) dated 26.05.2011.

For the Download ITR Form click below link


https://incometaxindiaefiling.gov.in/portal/downloads.do

First Quarter Review of Monetary Policy 2011-12: Press Statement by Dr. D. Subbarao, Governor

Date : 26 Jul 2011

First Quarter Review of Monetary Policy 2011-12: Press Statement by Dr. D. Subbarao, Governor

"First of all, on behalf of the Reserve Bank of India, I want to welcome all of you to this First Quarter Review of Monetary Policy for 2011-12. 2. A short while ago, we put out the monetary policy measures accompanying this review. To recap, based on an assessment of the current macroeconomic situation, we have decided to: increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points. The repo rate will accordingly move up from 7.5 per cent to 8.0 per cent. 3. Consequently, the reverse repo rate under the LAF, determined with a spread of 100 basis point below the repo rate, automatically adjusts to 7.0 per cent. Similarly, the Marginal Standing Facility (MSF) rate, determined with a spread of 100 bps above the repo rate, stands recalibrated at 9.0 per cent. 4. These changes have come into effect immediately after the announcement. Considerations Behind the Policy Move 5. This policy decision has been informed by two broad considerations. 6. First, demand pressures have remained strong. As we indicated in our May 3 Policy Statement, inflation was expected to remain elevated in the first half of 2011-12. Actual inflation so far has been even higher than expected. In particular, non-food manufactured product inflation has been significantly higher than the average rate of 4 per cent over the last six years. Crude oil prices remain volatile and are a major risk factor. The recent increase in domestic administered fuel prices and the minimum support price for certain food items will also keep inflation under pressure. 7. The second consideration that shaped the policy decision is that there are signs that growth is beginning to moderate, particularly in respect of some interest rate sensitive sectors. However, there is no evidence, as yet, of a sharp or broad-based slowdown. Several indicators such as exports and imports, indirect tax collections, corporate sales and earnings and demand for bank credit suggest that demand is moderating, but only gradually. 8. Although the impact of past monetary policy actions is still getting transmitted, considering the overall growth-inflation scenario, we determined that it is necessary to persevere with the anti-inflationary stance. Monetary Policy Stance 9. Let me now spell out the three broad contours of our monetary policy stance. These are: to maintain an interest rate environment that moderates inflation and anchors inflation expectations; to manage the risk of growth falling significantly below trend; and, finally, to manage liquidity to ensure that monetary transmission remains effective, without exerting undue stress on the financial system. Expected Outcomes 10. The expected outcomes of today’s policy actions are the following: First, the cumulative impact of past actions on demand will be reinforced; second, the credibility of the commitment of monetary policy to controlling inflation, and thereby to keeping medium-term expectations anchored, will be maintained; and, third, the policy actions will reinforce the point that in the absence of complementary policy responses on both demand and supply sides, stronger monetary policy actions are required. Guidance 11. As regards guidance for the future, going forward, the monetary policy stance will depend on the evolving inflation trajectory, which in turn, will be determined by trends in domestic growth and global commodity prices. A change in stance will be motivated by signs of a sustainable downturn in inflation. Global and Domestic Developments 12. As part of the policy review, we have made a careful assessment of the global and domestic macroeconomic situation. I will briefly summarise that. 13. You may recall that the Reserve Bank’s Annual Policy Statement of May 3 had highlighted several risk factors to the growth-inflation outlook. Many of these risks have since materialised. The Global Economy 14. On the global front, the sovereign debt problems that have beset the euro area over the past year now threaten larger economies in the region. There is heightened anxiety about whether the euro area will be able to agree on an economically viable, fiscally sustainable and politically feasible solution to the vexing sovereign debt problem. In this regard, the agreement reached by the euro zone leaders in their meeting on July 21 is a positive development. However, its effective implementation remains to be seen. In the US, concerns over a sovereign default loom over financial markets, with potentially disruptive consequences for global capital flows. 15. Despite sluggish economic activity, inflationary pressures also emerged in advanced economies under the impact of high commodity prices. 16. In striking contrast to advanced economies, emerging market economies (EMEs) are generally dealing with rising inflation, caused by a combination of elevated commodity prices and robust domestic demand. While there has been talk of the two-speed recovery for some time, its very different impact on advanced economies and EMEs is now clearly visible. 17. From the perspective of India's macroeconomic policy imperatives, a critical consideration is the effect that global conditions will have on commodity prices. After the May 3 Policy Statement, the prices of many commodities, including that of crude oil, showed signs of softening, reflecting weakening demand in advanced economies. Had this trend consolidated, it would have provided some welcome relief from inflationary pressures. However, one quarter later, the downtrend has not yet proved to be very strong. Prices are generally still high compared with last year. With no immediate prospects of monetary tightening in the advanced economies, the impact of weakening demand appears to be offset by that of abundant liquidity. The Indian Economy 18. Turning to the domestic economy, output expanded by 8.5 per cent during 2010-11. The revised and rebased index of industrial production (IIP) suggested that earlier signals of a growth deceleration in the second half of last year were exaggerated. In fact, the growth momentum remained strong throughout last year. However, data for the first two months of this fiscal, April-May 2011, suggest that some moderation might be under way. 19. The May 3 Policy Statement projected baseline real GDP growth for 2011-12 at around 8 per cent. This was based on the assumption of a normal monsoon and crude oil prices averaging US$ 110 per barrel. Subsequent data suggest that this projection remains valid. Therefore, the baseline projection of real GDP growth for the current year has been retained at 8.0 per cent. 20. It is important to recognise that in the absence of appropriate actions for addressing supply bottlenecks, especially in food and infrastructure, questions about the ability of the economy to sustain the current growth rate without significant inflationary pressures come to the fore. The economy's ability to grow rapidly for any length of time without provoking inflation is dependent on implementing  policies, with corresponding resource allocations, which will allow the supply of various products and services to keep pace with demand. Inflation 21. Inflation continues to be the dominant macroeconomic concern. The headline WPI inflation rate for the first quarter of this fiscal year remained stubbornly close to double digits and inflationary pressures continued to be broad-based. Both the level and the persistence of WPI inflation are a cause for concern. Non-food manufactured product inflation ruled above 7 per cent in the first quarter suggesting that producers, operating at high levels of capacity utilisation, are able to pass on rising commodity input prices and wage costs to consumers. 22. Inflationary pressures are clearly very strong, notwithstanding signs of moderation of economic activity. Importantly, the softening of commodity prices over the past three months did not translate into a decline in either headline WPI inflation or non-food manufactured products inflation. If the softening reverses, commodity prices are likely to exert inflationary pressures for some time, making moderation in demand necessary to bring inflation down. 23. In our  May 3 Policy Statement, we indicated the upside risks to the inflation outlook. Some of the upside risks have since materialised. These include: the upward revision in prices of petroleum products; the significant increase in the minimum support prices (MSPs) for some agricultural commodities; and the persistence of non-food manufactured products inflation at elevated levels reflecting underlying demand pressures.  24. What factors will shape the inflation outlook going forward? Let me indicate the important ones. The first factor will be the overall performance of the south-west monsoon; both its spatial and temporal distribution will be important. The second factor will be crude oil prices whose outlook for the near future is uncertain. Going by the recent trend, the price of oil could remain volatile because of the pace of global recovery, liquidity conditions, and importantly, the overall oil supply situation; and, Finally, policy decisions with regard to increase in prices of petroleum products and other  administered items will have a significant influence on inflation. 25. Our baseline projection for WPI inflation for March 2012, as indicated in the May 3 policy statement, was 6.0 per cent with an upward bias. We have reviewed that projection. Keeping in view the domestic demand-supply balance, global trends in commodity prices and the likely demand scenario, we have revised the baseline projection for WPI inflation for March 2012 upward to 7.0 per cent. Let me reiterate what we said earlier, which is that inflation is expected to remain elevated for a few more months, before moderating towards the later part of the year. 26. Notwithstanding the current inflation scenario, it is important to recognise that in the last decade, the average inflation rate, measured in terms of both WPI and CPI, had moderated to around 5.5 per cent. Monetary policy will, therefore, condition and contain perceptions of inflation in the range of 4.0-4.5 per cent. This will be in line with the medium-term objective of 3.0 per cent inflation consistent with India’s broader integration into the global economy. Monetary Transmission 27. Now an important, albeit brief, comment on monetary transmission. Taking cues from the monetary policy actions of the Reserve Bank, scheduled commercial banks have been raising their deposit and lending rates. Since March 2010, banks have raised their modal term deposit rate by 225 basis points. 28. On the lending side, since July 2010, the modal Base Rate of banks has also increased by 225 basis points, suggesting strong transmission of policy rates. Liquidity  and Monetary Conditions 29. Turning to liquidity and monetary conditions, consistent with our anti-inflationary policy stance, liquidity conditions have generally remained in deficit mode so far in 2011-12. As per data on July 22, the average daily net injection of liquidity through the LAF window during this year was around Rs.48,000 crore, which was within one per cent of net demand and time liabilities (NDTL).  30. The current trends in money supply (M3) and credit growth remain above the indicative trajectory of the Reserve Bank.  Keeping in view the evolving growth-inflation dynamics, the indicative projection of M3 growth for 2011-12 has been revised downwards from 16.0 per cent, as set out in the May 3 Policy Statement, to 15.5 per cent. Non-food bank credit growth projection has also been revised downwards from 19.0 per cent to 18.0 per cent. Risk Factors 31. Let me now turn to some of the risks to our indicative projections of growth and inflation for 2011-12: First, uncertainty about the future path of global commodity prices, especially oil; second, uncertainty about capital flows from the perspective of financing the current account deficit; third, risks to food inflation stemming from the monsoon performance, higher minimum support prices and inadequate supply response pertaining to protein-rich items; and, fourth, significant upside risks to the projected fiscal deficit for 2011-12 as fiscal deficit has been a key source of demand pressures. 32. Before I close, let me mention that the Reserve Bank is strongly of the view that controlling inflation is imperative both for sustaining growth over the medium-term and for  increasing the potential growth rate. This is a critical attribute of a favourable investment climate, on which the economy's potential growth depends. Fiscal consolidation can contribute to a sustainable growth path by rebalancing demand away from government consumption and towards investment. The Reserve Bank’s efforts of achieving low and stable inflation could also be supported by  concerted policy actions and resource allocations to address domestic supply bottlenecks, particularly in respect of food and infrastructure. 33. The challenge for the Government and the Reserve Bank is to ensure that demand is constrained in the short term to bring inflation down, but to encourage supply response so as to expand the potential output of the economy in the medium term. 34. Thank you for your attention. Ajit Prasad Assistant General Manager Press Release : 2011-2012/133

http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=24786

Issuance of TDS Certificates in Form No. 16A downloaded from TIN Website

CIRCULAR NO. 03 /2011

F. No 275/34/2011-( IT-B)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, dated the   13^th  May, 2011

Subject: Issuance of TDS Certificates in Form No. 16A downloaded from TIN Website and option to authenticate the same by way of digital signature – Circular under section 119 of the Income-tax Act 1961.

  Section 203 of the Income-tax Act 1961 (‘the Act’) read with the Rule 31 of the Income-tax Rules 1962 (‘the IT Rules’) provides for furnishing of certificate of tax deduction at source (TDS) by the deductor to the deductee specifying therein the prescribed particulars like amount of TDS, permanent account number (PAN), tax deduction and collection account number (TAN), etc.  The relevant form for such TDS certificate is Form No.16 in case of deduction under section 192 and Form No.16A for deduction under any other provisions of Chapter XVII-B of the Act. TDS certificate in Form No.16 is to be issued annually whereas TDS certificate in Form No.16A is to be issued quarterly.

2.        Currently, a deductor has an option to authenticate TDS certificate in Form No.16 by using a digital signature.  However, no such option of using a digital signature is available to a deductor for issuing TDS certificate in Form No.16A and it, therefore, needs to be authenticated by a manual signature. The Central Board of Direct Taxes (the Board)  has received representations to allow the option of using digital signature for authentication of TDS certificate in Form No.16A as issuance of TDS certificate in Form No.16A by manual signature is very time consuming, specially for deductors who are required to issue a large number of TDS certificates.

3.        The Department has already enabled the online viewing of Form No.26AS by deductees which contains TDS details of the deductee based on the TDS statement (e-TDS statement)filed electronically by the deductor.  Ideally, there should not be any mismatch between the figures reported in TDS certificate in Form No. 16A issued by the deductor and figures contained in Form No.26AS which has been generated on the basis of e-TDS statement filed by the deductor.  However, it has been found that in some cases the figures contained in Form No.26AS are different from the figures reported in Form No.16A. The gaps in Form No.26AS and TDS certificate in Form No. 16A arise mainly on account of wrong data entry by the deductor or non-filing of e-TDS statement by the deductor.  As at present, the activity of issuance of Form No.16A is distinct and independent of

                                                                                                  Contd p-2

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 filing of e-TDS statement, the chances of mismatch between TDS certificate in Form No.16A and Form No.26AS cannot be completely ruled out. To overcome the challenge of mismatch a common link has now been created between the TDS certificate in Form No.16A and Form No.26AS through a facility in the Tax Information Network website (TIN Website) which will enable a deductor to download TDS certificate in Form No.16A from the TIN Website based on the figures reported in e-TDS statement filed by him.  As both Form No.16A and Form No.26AS will be generated on the basis of figures reported by the deductor in the e-TDS statement filed, the likelihood of mismatch between Form No.16A and Form No.26AS will be completely eliminated. 

4.        In view of the above, for proper administration of the Act, the Board have, in exercise of powers under section 119 of the Act, decided the following :-

                                                                                                 

4.1    ISSUE OF TDS CERTIFICATE IN FORM NO. 16A

 (i) For deduction of tax at source made on or after 01/04/2011:

(a)The deductor, being a company including a banking company to which the Banking Regulation Act,1949 applies and any bank or banking institution, referred to in section 51 of that Act or a co-operative society engaged in carrying the the business of banking, shall issue TDS certificate in Form No.16A generated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted on or after the 1st day of April, 2011 under any of the provisions of Chapter-XVII-B other than section 192.

(b)                 The deductor, being a person other than the person referred to in item (a) above, may, at his option, issue TDS Certificate in Form No.16A generated through TIN central system and which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted on or after the 1st day of April, 2011 under any provisions of Chapter-XVII-B other than section 192.

(ii) For deduction of tax at source made during financial year 2010-11:

The deductor, may, at his option, issue the TDS certificate in Form No.16A generated through TIN central system which is downloaded from the TIN Website with a unique TDS certificate number in respect of all sums deducted during the financial year 2010-11 under any of the provisions of Chapter-XVII-B other than section 192.

Contd p-3

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4.2      AUTHENTICATION OF TDS CERTIFICATE IN FORM NO.16A

(i)   The deductor, issuing the TDS certificate in Form No.16A by downloading from the TIN Website shall authenticate such TDS certificate by either using digital signature or manual signature

(ii)  The deductor being a person other than a person referred to in item 4.1(i)(a) above and who do not issue the TDS Certificate in Form No.16A by downloading from the TIN Website shall continue to authenticate TDS certificate in From No.16A by manual signature only.

5.        The Director General of Income-tax (Systems) shall specify the procedure, formats and standards for the purpose of issuance of TDS certificate in Form No.16A which is downloaded from the TIN Website and shall be responsible for the day-to-day administration in relation to the procedure, formats and standards for  issuance of TDS certificate in Form No.16A in electronic form.

6.        It is further clarified that TDS certificate issued in Form No. 16A by the deductors covered  by  para 4.1(1)(a) in accordance with this circular and procedure, format  and standards specified by the Director General of Income-tax (Systems) shall only be treated as a vilid TDS certificate in Form No. 16A for the purpose of section 203 of the Act read with Rule 31 of the IT Rules,1962.    

7.        Hindi version shall follow.

(AJAY KUMAR)

Director (Budget)

Tel.No.2309-2641

Copy to all  CCsIT/ DsGIT for circulation