 PURPOSE/SCOPE
(i)
This Act is applicable to sales/purchases taking place in course of inter-state
trade and commerce.
(ii)
The interstate nature of transaction is to be determined as defined in
Section 3(a)/(b). If sale/purchase occasions movement of goods from one State
to another State, it is an interstate sale. A sale, affected by transfer of
documents of title to goods when goods are in inter-state movement, is also
an inter-state sale.
(iii)
Section 4 of the CST Act determines suits of sale: i.e. State in which the
sale takes place. Accordingly the suits is to be decided on the location of
the goods at the time of sale.
(iv)
Section 5 defines the sale/purchase taking place in course of import/export
and such transactions are immune from levy of any tax by State Government or
Central Government. [(Sections 5(1), 5(2) and 5(3)].
The
sale of goods to any exporter for the purpose of complying with the
pre-existing order and covered by Section 5(3) is also exempt as deemed
export. These sales are to be supported by Form H along with export order
details and copy of bill of lading etc. as evidence of actual export.
EXEMPTIONS
(i)
Section 6 is charging Section. As per Section 6(2) subsequent inter-state
sale transaction taking place by transfer of documents of title to goods,
when the goods are in course of movement, are exempt. For this purpose the
claimant dealer has to obtain Form E-1 from his vendor (if such vendor is
first seller otherwise, E-II) and Form ‘C’ from the buyer.
(ii)
Sale to notified foreign diplomat authorities is also exempt u/s. 6(3)
against Form ‘J’.
(iii)
The inter-state sale to units situated in Special Economic Zone (SEZ) or
developers of SEZ against Form ‘I’ are exempt as per Sections 8(6) read with
Section 8(8).
BRANCH/CONSIGNMENT TRANSFER
Under
Section 6A, branch/consignment transfer is allowed only if Form ‘F’ is
produced, else it will be deemed to be a sale. Form ‘F’ is required to be
obtained from transferee branch/agent. One Form ‘F’ can cover transfers affected
in one calendar month.
RATES OF TAX
As
per Section 8 of CST Act, the rates of taxes are to be decided as per rates
under Local Act. The rates can be as under:
(Prior to 1-4-2007)
(From 1-4-2007 to 31-5-2008)
(From
1-6-2008 onwards)
REGISTRATION, FORM ‘C’ PURCHASES AND OTHER
PROVISIONS
A) Resale by him
b) Use in manufacturing/processing of
goods for sale
c) Use in mining
d) Use in generation/distribution of
power
e) Use in packing of goods for
sale/resale
F) Use in telecommunication network.
The
Central Government has substituted second and third proviso to Rule 12(1) vides Notification No.
588(E) dated 16th September, 2005. According to these provisos, with effect
from 1st October, 2005, Form C will have to be collected separately for each
quarter of the year. Form D was required to be obtained transaction wise.
However, Form D has been abolished with effect from 1st April, 2007.
Central
Government has also substituted sub rule (7) to rule 12 with effect from 1st
October, 2005. Form C or certificate in Form E-I or E-II will have to be
submitted to sales tax department within three months from the end of the
quarter in which sale is effected. In case of Form F, it is to be obtained on
monthly basis and it is to be submitted to the sales tax department within
three months from the end of the month in which goods are transferred to the
interstate branch or agent. In Maharashtra State, the Commissioner of Sales
Tax has exempted the dealer from submission of Form C, D, F, H, E-I or E-II.
Instead of that, dealers are required to submit the list of missing forms on
quarterly basis as per the format specified in Trade Circular No. 28T of 2005
dated 24.10.2005.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Central Sales Tax Act by CMA Samir Biswal
CLARIFICATION ON CONVERSION OF A FIRM INTO A LIMITED LIABILITY PARTNERSHIP GENERAL CIRCULAR NO. 09/2013 [F.NO. 1/10/2012-CL-V], 2013- 04 -30
(1)The Ministry has been examining some of the issues raised by stakeholders with regard to clarifications on the provisions of the Limited Liability Partnership (LLP) Act,2008 with regard to conversion of a partnership firm into LLP. The issues relate to clarification with regard to (i) conversion of multiple partnership firms (including audit firms) into a single LLP and (ii) manner in which appointee company shall take note of the change in the status of auditor once the relevant CA audit has got itself converted into a CA audit LLP as per the relevant provisions of LLP act 2008.
(2) The relevant issues have been examined in the Ministry in consultation with the 'Expert committee on LLP Issues' set up in the Ministry and following clarifications are conveyed for the guidance of concerned stakeholders:-
(i) The provisions of sections 55 and 58 of the LLP Act, 2008 read with Second Schedule thereto, inter alia, provide for requirements in respect of conversion of a single partnership firm into a single LLP. The LLP Act, 2008 does not provide for conversion of two or more firms into a single LLP.
(ii) The provisions of section 58(4)(b) of the LLP Act, 2008 provide that on conversion of a firm into an LLP, as per the provisions of the said Act all property, assets, interests, rights, privileges, liabilities, obligations relating to the firm and the whole of the undertaking of the firm shall be transferred to and shall vest in the LLP without further assurance, act or deed. Accordingly, if a CA audit firm, being an auditor in a company under the Companies Act, 1956, gets converted into an LLP after complying with the relevant provisions of the LLP Act, 2008, then, such an LLP, in accordance with the provisions of section 58(4)(b) of the LLP Act, 2008 would be deemed to be the auditor of the said company. Reference is also drawn to the notification number SO 1152(E), dated 23rd May, 2011 and General Circular 30A, dated 26 May, 2011 of the Ministry in this regard. The relevant appointee company may take note of such change in status of the auditor through a resolution of the Board.
(3) The concerned stakeholders, Registrar of Companies, appointee companies should take note of the above clarifications and comply accordingly.
This Case Law has been Shared by a Student of ICAI Vinanti Zatakiya. You can reach her at vinanti2504@gmail.com
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90s or non-90s – But they made it big - By Commerceshala
Each one of us has surely once or twice stumbled across a
story that tells about the people who have established themselves despite not having
a formal degree with amazingly good marks, correction great marks, because
nowadays just being good is not good enough. We just read them, forget them and
go back to our normal lives thinking they just got lucky. Yes, luck is
important in shaping our lives in some way but is it just luck? Well to be
lucky, you first have to work hard and give all you got to even have a chance
for the luck factor to work in.
It’s a fact that a college degree does not guarantee
success. In fact no amount of degrees can guarantee success until and unless,
you actually are determined enough to make it big. There are a number of
entrepreneurs who have tasted success despite not having fancy degrees to
flaunt. Bill Gates, Mark Zuckerberg and Steve Jobs are our very famous college
dropout billionaires. Neither Henry Ford, billionaire founder of Ford Motor
Company, nor Jay Van Andel, billionaire co-founder of Amway, attended college.
Ray Kroc, founder of McDonald’s and Richard Branson, billionaire founder of
Virgin Empire, are both high-school dropouts. Subhash Chandra, an Indian Media
mogul who is chairman of Essel Group, an Indian conglomerate, is a billionaire
who dropped out after completing high school. But it is not just entrepreneurs
who have achieved immense success.
In many other fields, people have found success without the
need of degrees. Coco Chanel, fashion magnate and founder of the Coco Chanel
brand, never saw the four walls of school. Bryan Adams, whose music is pure
divine, is a high school dropout. Andre Agassi, a highly talented tennis
player, quit school in the ninth grade and turned tennis pro at the age of 16.
Wolfgang Puck, chef, owner of numerous restaurants and bistros, quit school at
the age of 14. We all know who Salman Khan is, but do you know that he is a
college dropout. I can keep going on with this list, but by now I hope you have
got the gist of it.
There is certainly no dearth of people who have proved the
fact that a shining education degree is not important for a sky rocketing
career. 90s or non-90s, they have truly made it big and changed their lives
completely. So next time when you complaint that you cannot be successful
because you did not get your degree from the best college or did not score well
in your boards, remember that it is not because of your degrees, but because of
your lazy, careless and self-depreciating attitude. If you truly want
something, with pure dedication and perseverance, sky is
your limit.
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TAX RESIDENCE CERTIFICATE
Before explaining Tax Residence Certificate
we all should know about the sections 90 & 90A i.e. Double Taxation
Avoidance Agreement. Under DTAA, the Central Government enter into an agreement
with the government of other countries for the purpose of granting Relief. DTAA
provide relief to the residents of the contracting country to the Agreement.
However, sometimes Taxpayers who were not the residents also resort to claim
the benefit of relief. That’s why Section 90 & 90A are amended by Finance
Act, 2012. As provided in Amended Sections 90 & 90A, now a Non-Resident can
also claim relief but he can claim only if he has obtained TAX RESIDENCE CERTIFICATE (TRC)
from the government of that country or specified territory declaring his
residence of the country outside India or specified territory outside India.
The Tax Residence Certificate should be
duly verified by the Government of the country of which the person claims to be
the Resident. The Tax Residence Certificate should contain the following
particulars:-
Ø Name of the Assessee.
Ø Status i.e. whether the Assessee is a Company, Individual, Firm etc.
Ø Nationality.
Ø Country or Specified Territory of Incorporation.
Ø Assessee’s Tax Identification Number.
Ø Residential Status.
Ø Period for which the certificate is to be issued.
Ø Address of the Assessee.
The submission of TRC shall be a necessary
but not sufficient condition for availing benefits of the agreements referred
to in these sections. Further conditions can also be stipulated for claiming
treaty benefits, in addition to the requirement of submission of TRC.
An Assessee who is a Resident of India can
make an Application in a form as prescribed by CBDT to the Assessing Officer
for obtaining TAX RESIDENCE CERTIFICATE & Assessing Officer after receiving
Application & after being satisfied in this regard shall issue a
Certificate of Residence to such an Assessee.
This Article has been Shared by Student of ICAI Palak Aggarwal. She Can be reached at aggarwal.palak2809@gmail.com
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THE 7 LAWS OF CLEARING CA FINAL
So this is it. The 7 Laws of Clearing CA Final launched. The book is officially on sale now. I am excited (actually super excited!) and satisfied (…deeply) as the book finally reaches its intended readers.
I am more than a 1000% confident that you will not only enjoy the book but will also takeaway lessons & ideas that will stay with you forever and you will not be able to stop yourself for sharing them with others. If you are a CA student, you will find the strategies & methods described in the book absolutely easy to understand & follow.
You can buy the book right now right here on Taxmann’s online bookstore. And I am sure local bookstore in your city should have it in store. (If they refuse.. ask them to get it!)
One last thing… it would mean a lot to me personally if you order the book today on launch day (and also spread the word to others that might be interested)
Wow! This is surely one of the biggest days in my life. The launch of my first book! This has been quite a personal journey for me. Thank you for your continued support during the past 6 months. Thank you for your love and support.
Go ahead! Read the book and share your reviews with me. THANK YOU ALL!!
You can buy the book from following sources.
Infibeam - Cheapest price at this website
Apart from these the book is now available on all major bookstores across the country.
- Nitin Soni
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Why Should We File Income Tax Return On Time?
As per Section 139(1) of Income Tax
Act 1961, if the income of any person exceed maximum amount not chargeable to tax without giving the effect of section 10A/ 10B or Chapter VI-A. Then he or she is required to file his/her income tax return
according to the time limit specified Last dates for filing income tax return for income tax assessment year 2013-14 are as follows:
1. 31st July 2013: for the person whose account need no to be audited.
2. 30th Sept 2013: for the person, firm or company whose account to be audited.
Now the big question is that if we not file return on due date that what is the loss?
Some are as follows:
A. As per Section 139(5) of income tax act 1956, if you discover any omission, mistake, Wrong statement or missing information in the return or any other reason, then you can revise your income tax return. But the revision is only possible if you have filed the return according to section 139 (1).
B. As per the Section 234A of income tax act, if a person have not paid his tax liability on or before due date mention u/s 139(1), the person need to paid off it all liability with interest. The rate of interest on the same is 1% per month.
1. But as the interest is calculated on tax amount and tax amount is calculated after deduction of TDS, TCS and Advance tax. So if tax is due on you then there is no interest also.
2. In simple words if you already paid you tax dues through TDS or TCS or Advance tax, then you need not to worry, no interest will be applicable.
C. Set off and carry forward of losses: if you current year income contain loses from business or profession or from capital gain or House property then you can carry forward the same amount of loss to next assessment year and set off the amount against that year income. But this benefit is available only if you have filed you income tax return according to the section 139(1).
D. To avoid any penalty by the Income Tax Department, you must file your Income Tax Return before the end of the relevant assessment year that is 31st March 2014.
Possibility of Penalty and Prosecution: If you do not file your Income Tax Return by 31st March 2014, the Income Tax Department may impose a penalty of Rs. 5000, even though the tax payable by you may be Zero.
E. Other reasons for filing the returns of income within time If a refund is due after adjustment of prepaid taxes, it is necessary to file the Income Tax Return to get the refund from the Income Tax Department.
Bank Loans: Further, the return is a declaration of your income and it will be extremely helpful when you are applying for a loan from bank. Before granting the loan, banks want to know your financial capacity and your income details as shown by you in income tax returns.
Visas of foreign countries: Many countries want to know if you are financially sound before they issue you a visa and for this purpose they will rely on your income tax returns.
So submit you return on time and save money.
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How Small Business Culture Can Create Success By CMA Samir Biswal
What do you think of
when you think about small business culture? It can mean many things
depending on who you talk to. It can be a “brand,” motto, values, uniforms, or
behaviors. It could also be service level, return/exchange policy, or customer
appreciation gestures. Do you think of Main Street USA, with all the “Mom n’
Pop” shops on both sides of the street? Do you think about a small business
doing business out of a garage?
Culture is a set of
attitudes, beliefs, behaviors, and customs. These cultural cues are ingrained
in the members of the business, team, or group, and then accepted as the norm.
Beliefs about the role of the business, and how business activities fall into
this understanding of culture, is typically dictated by how employees interact
within their own cultural boundaries. Small business culture will determine
what kind of customers it attracts, the service it delivers, and its growth.
Customs of a business
culture might be dress code, communication style, physical environment, or even
the level of formality. Dress code in the workplace projects an image about the
company, to potential and current customers. If a
business doesn’t have a dress code, employees will certainly attempt
to wear whatever they deem to be appropriate, and this may not always be
acceptable. Customers do not want to feel like they are giving their hard
earned money to a business that doesn’t care about its image. In a
business to business relationship, it is important to understand that each
party is a reflection of the other. Business owners/managers should always
protect their interests by having a written dress code policy, otherwise the
business might suffer.
Communication style
(in the literal sense) is another custom that reflects onto the business. If
communication within an organization is relaxed and unprofessional, the same
will occur when meeting with customers. Maintaining professional dialogue will
also minimize the chance for harassment charges. Communication style in the
functional sense is an important part of a business’ success. If communication
breaks down within an organization, service and sales will be compromised.
Businesses should set forth expectations for communication protocol, in order
to prevent lost sales.
Most successful
business leaders would agree that the physical environment of a business can
make or break the bank. In a retail environment it is crucial to have an
inviting environment, which includes clean, uncluttered, and safe. Not many
consumers will frequent dirty, cluttered, and unsafe establishments. A good
rule to follow when creating business culture, especially in retail, is
straight is clean, crooked is dirty.
In a manufacturing
environment, clean, safe, and uncluttered are equally important the success of
the business. If the physical environment in a manufacturing plant is not
maintained, morale tends to be bad, and accidents are frequent. Morale and
injuries tend to go hand in hand, and both affect the company’s bottom line. A
business that creates a culture of cleanliness will also experience better
morale and fewer accidents as employees will be more inclined to maintain a
clean environment.
Professional office
environments must also be maintained and inviting; otherwise customers will
likely avoid visiting or directing new business to the company. Most people
clean their homes before inviting guests; the same should be true in the
workplace.
Attitudes, beliefs,
and behaviors are related, and have a huge impact on business culture. Is
there a difference between large business culture and small business culture?
The answer isn’t easy.
Large businesses have
usually established through expensive media campaigns, and large cash outlays
for remodels, uniforms, or other things that will help them establish their
“brand” or culture. However, despite these investments, they may be challenged
by employees that don’t buy into the campaign. The customer may easily identify
the culture to the business, but that doesn’t guarantee employees will deliver
according to the cultural context.
Small businesses on
the other hand may not have the resources for expensive media campaigns, etc.
but since they are smaller in employee numbers, the employees tend to be more
invested. Small businesses pride themselves on customer intimacy, less
bureaucracy, and ability to “walk the talk”. Employees in small businesses tend
to share the same understanding of goals, processes, and expectations.
Large and small
business cultures require the same ingredients, just on different levels. Both
require established dress codes, communication processes, clean facilities, and
most importantly, EMPLOYEE ENGAGEMENT. If employees don’t buy into the company
culture, everything else is wasted. Company culture should begin in the early
stages of training, train to retain employees that believe in the company
culture. Employees that believe in the company culture will also live and share
it with others.
This article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com
FORMS & PROCEDURES UNDER CST
PROCEDURE:
Every dealer who effects inter-state
sale is required to register with State sales tax authorities who are empowered
to grant registration under CST Act. Application should be in form ‘A’.
Security has to be furnished. Certificate of registration will be in form ‘B’.
PROCEDURE FOR REGISTRATION
1. The dealer must make an application to the
concerned authority in the appropriate state, in Form A within 30 days of the
day when he becomes liable to pay tax. The form contains the following details.
(i) Name of the manager of business
(ii) Name and addresses of proprietor
or partner of the business.
(iii) Date of establishment of
business.
(iv) Date on which first inter-state
sale was made.
(v) Name of the Principal place and
other places of business in the appropriate state.
(vi) Particulars of any license held
by the dealer.
2. Single Place of business – If a dealer has
single place of business in the appropriate State and he is registered in that
state, he shall apply to the sales tax authority of that state only for
obtaining registration under central sales tax Act
3. More than one place of business in
the same state – If a dealer has more than one place of business in the same
state , he shall select one of these places as the principal place of business
and , get only one certificate of registration.
4. More than one place of business in
different states. If a dealer has more than one place of Business in different
states, he will get a separate certificate of registration with respect to each
state.
5. Fees for Registration is Rupees
twenty five to be paid in cash or court fee stamp.
6. The application has to be signed
by, in case of –
• Sole proprietorship , the proprietor
• Partnership firm, any one the
partner
• HUF, the karta
• Company, the director
• Government, authorized officer
Grant of Certificate of Registration sec 7 (3)
If the application is in order and
assessing officer is fully satisfied with the facts contained therein, he will
register the dealer under this Act and issue a certificate of Registration in
Form B. If a dealer has more than one place of business then additional copies
of certificate will be issued.
All items of purchase and sale must be
included in CST Registration Certificate. Otherwise, these are not eligible for
purchase at concessional rate.
FORMS
Form C, E-I/E-II, F, G, H, I and J
have been prescribed to avail concessional rate of CST. Form C and E-I/E-II and
F are required to be collected and submitted on quarterly basis. In case of
forms H, I and J, no time limit has been prescribed. F form is to be obtained
on monthly basis.
If C form is lost, indemnity bond in
form G is to be given and then duplicate C form can be issued.
Prescribed forms under CST
Following
are the forms prescribed under CST (Registration and Turnover) Rules, 1957.
Form
|
Description
|
Frequency
|
A
|
Application for registration
|
Once
|
B
|
Certificate of Registration
|
Once
|
C
|
Declaration by purchasing registered
dealer to obtain goods at concessional rate
|
To be obtained for every quarter and
submitted on quarterly basis
|
D
|
Form of certificate for making
government purchases (D form cannot be issued in case of sale made to
Government on or after 1-4-2007)
|
No question arises after 1-4-2007.
|
E-I/E-II
|
Certificates for sale in transit
|
To be obtained for every quarter and
submitted on quarterly basis
|
F
|
Form by branch/consignment agent for
goods received on stock transfer
|
Monthly, but to be submitted to authorities
quarterly
|
G
|
Indemnity bond when C form lost
|
When required
|
H
|
Certificate of Export
|
Upto the time of assessment by first
assessing authority.
|
I
|
Certificate by SEZ unit
|
Not specified in rules (but should be
submitted before assessment).
|
J
|
Certificate to be issued by foreign
diplomatic mission or consulate in India or the UN Agency
|
Upto the time of assessment by first
assessing authority.
|
This article is compiled by Student of ICAI
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