Tax: may 2012
In effect, “advancement of any other object of general public utility” would continue to be a “charitable purpose”, if the total receipts from any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business does not exceed Rs.25 lakhs in the relevant previous year.
The limit of Rs.10 lakhs has now been increased to Rs.25 lakhs by the Finance Act, 2011 with effect from A.Y.2012-13.
In effect, “advancement of any other object of general public utility” would continue to be a “charitable purpose”, if the total receipts from any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business does not exceed Rs.25 lakhs in the relevant previous year.
The limit of Rs.10 lakhs has now been increased to Rs.25 lakhs by the Finance Act, 2011 with effect from A.Y.2012-13.
Tax: may 2012
Increase in percentage of weighted deduction under section 35(2AA)
(i) Section 35(2AA) provides for a weighted deduction of 175% in respect of amount paid to National Laboratory, or a University or an IIT or specified person with a specific direction that such sum shall be used for the purpose of an approved scientific research programme.
(ii) The Finance Act, 2011 has increased the percentage of weighted deduction from 175% to 200% with effect from A.Y.2012-13.
(Effective from A.Y.2012-13)
Increase in percentage of weighted deduction under section 35(2AA)
(i) Section 35(2AA) provides for a weighted deduction of 175% in respect of amount paid to National Laboratory, or a University or an IIT or specified person with a specific direction that such sum shall be used for the purpose of an approved scientific research programme.
(ii) The Finance Act, 2011 has increased the percentage of weighted deduction from 175% to 200% with effect from A.Y.2012-13.
(Effective from A.Y.2012-13)
Tax: may 2012
Extension of due date for filing return of income of corporate assessees undertaking international transactions [Section 139(1)]
(i) The due date for filing of return of income of corporate assessees who have undertaken international transactions during the relevant previous year has been extended from 30th September to 30th November of the assessment year, on account of the practical difficulties in accessing contemporary comparable data before 30th September.
(ii) Consequently, the due date within which the sums referred to in section 43B have to be actually paid to escape disallowance under that section would be 30th November of the assessment year in case of such companies.
(iii) Similarly, the tax deducted at source at any time during the year by such companies can be deposited on or before the extended due date of 30th November of the assessment year, to avoid disallowance under section 40(a)(ia).
(iv) The extension of due date for filing of return would, however, not be applicable to non-corporate assessees who have undertaken international transactions during the relevant previous year.
(Effective from A.Y. 2011-12)
Extension of due date for filing return of income of corporate assessees undertaking international transactions [Section 139(1)]
(i) The due date for filing of return of income of corporate assessees who have undertaken international transactions during the relevant previous year has been extended from 30th September to 30th November of the assessment year, on account of the practical difficulties in accessing contemporary comparable data before 30th September.
(ii) Consequently, the due date within which the sums referred to in section 43B have to be actually paid to escape disallowance under that section would be 30th November of the assessment year in case of such companies.
(iii) Similarly, the tax deducted at source at any time during the year by such companies can be deposited on or before the extended due date of 30th November of the assessment year, to avoid disallowance under section 40(a)(ia).
(iv) The extension of due date for filing of return would, however, not be applicable to non-corporate assessees who have undertaken international transactions during the relevant previous year.
(Effective from A.Y. 2011-12)
(These 2 Services are not applicable for May 2012 Exam)
New Services for may12 Exam:
1. 2 new services brought under the service tax net - Section 65
(a) Restaurant service [Section 65(105)(zzzzv)]
1. Service provider: A restaurant having:-
· the facility of air-conditioning in any part of the establishment, at any time during the financial year, and
· licence to serve alcoholic beverages
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.
5. Departmental Clarification: DOF No. 334/3/2011-TRU dated 28.02.2011 clarifies as follows:-
· The new levy is directed at services provided by high-end restaurants that are air-conditioned and have license to serve liquor. If the air-conditioning facility is available at any time during the financial year, the conditions for the levy shall be met.
· Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations.
· It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided.
· The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, as also goods sold at MRP.
6. Abatement of 70% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 70% of the gross amount charged in respect of restaurant services.
[Notification No. 34/2011 ST dated 25.04.2011]
29
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.
(b) Short-term accommodation services [Section 65(105)(zzzzw)]
1. Service provider: A hotel, inn, guest house, club or camps, by whatever name called.
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person by a hotel, inn, guest house, club or camps, by whatever name called, for providing of accommodation for a continuous period of less than three months.
5. Abatement of 50% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 50% of the gross amount charged in respect of short-term accommodation services.
[Notification No. 34/2011 ST dated 25.04.2011]
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.
1. 2 new services brought under the service tax net - Section 65
(a) Restaurant service [Section 65(105)(zzzzv)]
1. Service provider: A restaurant having:-
· the facility of air-conditioning in any part of the establishment, at any time during the financial year, and
· licence to serve alcoholic beverages
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.
5. Departmental Clarification: DOF No. 334/3/2011-TRU dated 28.02.2011 clarifies as follows:-
· The new levy is directed at services provided by high-end restaurants that are air-conditioned and have license to serve liquor. If the air-conditioning facility is available at any time during the financial year, the conditions for the levy shall be met.
· Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations.
· It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided.
· The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, as also goods sold at MRP.
6. Abatement of 70% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 70% of the gross amount charged in respect of restaurant services.
[Notification No. 34/2011 ST dated 25.04.2011]
29
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.
(b) Short-term accommodation services [Section 65(105)(zzzzw)]
1. Service provider: A hotel, inn, guest house, club or camps, by whatever name called.
2. Service receiver: Any person
3. Date from which such service is taxable: 1st May, 2011
4. Scope of taxable service: Any service provided or to be provided to any person by a hotel, inn, guest house, club or camps, by whatever name called, for providing of accommodation for a continuous period of less than three months.
5. Abatement of 50% of the gross amount charged: With effect from 01.05.2011, Notification No. 1/2006 ST dated 01.03.2006 has been amended to grant abatement of 50% of the gross amount charged in respect of short-term accommodation services.
[Notification No. 34/2011 ST dated 25.04.2011]
Conditions to be satisfied for claiming the exemption under Notification No. 1/2006 ST dated 01.03.2006:-
(i) CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004; and
(ii) Service provider has not availed the benefit under the Notification No. 12/2003 ST, dated 20.06.2003.
LAW: may 2012
I/PCC LAW Amendments for May 2012 exam.
LATEST NOTIFICATIONS – RELEVANT FOR CA IPCC
Area Notification Reference / Effect
Voluntary Name Change
– Sec. 21
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to ROC.
Incorporation of Non
Profit Organization – Sec.
25
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.16 / Q.No.19
CG power delegated to ROC.
Conversion of Public to
Private Company – Sec.
31(1)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.21 / Q.No.26
CG power delegated to ROC.
Extension of Time Limit
for filing of Instrument of
Transfer – Sec. 108(1D)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.12.9 / Q.No.14
CG power delegated to ROC.
ROC: ROC of the State in which the registered office of the
Company is situated, or by the ROC of the State in which the
transferee ordinarily resides.
Compulsory Name
Change – Sec. 22
Notfn. No. GSR. 223(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to Regional Director.
Companies (Passing of
the Resolution by Postal
Ballot) Rules, 2011
F.NO. 2/4/2011-CL.V],
Dated 30-5-2011
P.No.13.27 / Q.No.31
Postal Ballot voting can be made through electronic system.
The following definitions are amended: –
a) "Postal Ballot" includes voting by Shareholders by
postal or electronic mode instead of voting personally by
presenting for transacting businesses in a general meeting
of the Company.
b) "Voting by electronic mode" means a process for
recording votes by the members using a Computer based
machine to display an electronic ballot and to record the
vote and also the number of votes polled in favour or
against such that the entire voting gets registered and
counted in a electronic registry in a centralised server.
LATEST CIRCULARS – RELEVANT FOR CA IPCC
Area Circular Reference / Effect
Service of Documents
– Sec. 53
17/2011 dated –
21.04.2011
P.No.15.6 / Q.No.10
Green Initiative in the Corporate Governance: A
Company would have complied with Section 53 of the
Companies Act, if the service of document has been made
through electronic mode provided the Company has
obtained e-mail addresses of its members for sending the
notice/documents through e-mail by giving an advance
opportunity to every shareholders to register their e-mail
address and changes therein from time to time with the
Company.
In cases where any member has not registered his e-mail
address with the Company, the service of document etc. will
be effected by other modes of service as provided under
Section 53 of the Companies Act, 1956.
Restriction on
Transfer of Shares
(Sec. 108A – 108I)
30/21011 dated
23.05.2011
P.No.15.6 / Q.No.24 to Q.No.29:
Sections 108A to 108-I of the Companies Act, 1956 were
become redundant and will have no legal force after the MRTP
Act, 1969 stands repealed.
Criteria for granting
recognition as Public
Financial Institution
u/s 4A (Sec. 4A)
P.No.6.12 / Q.No.13:
a) A Company or Corporation should be established under a
special Act or the Companies Act being Central Act;
b) Main business of the company should be industrial/
infrastructural financing;
c) The Company must be in existence for at least 3 years
and their financial statement should show that their
income from industrial/infrastructural financing exceeds
50% of their income;
d) The net-worth of the company should be Rs.1,000
Crores;
e) Company is registered as Infrastructure Finance Company
(IFC) with RBI or as an Housing Finance Company (HFC)
with National Housing Bank;
f) In the case of CPSUs/SPSUs, no restriction shall apply
with respect to financing specific sector(s) and net-worth.
Participation by
Shareholder in
General Meeting
through Electronic
Mode
27/2011 dated
20.05.2011
Guideline issued for Participation by Shareholder in General
Meeting through Electronic Mode. (See Below for Summary of
the procedure)
Participation by Shareholders in Meetings under The Companies Act, 1956
through Electronic Mode
1. Electronic mode means video conference facility i.e., audio-visual electronic communication facility employed
which enables all persons participating in that meeting to communicate concurrently with
other without an
intermediary, and to participate effectively in the meeting.
2. The notice of the meeting must inform Shareholders regarding availability of participation through video
conference, and provide necessary information to enable shareholders to access the available facility of video
conferencing.
3. The Chairman of the meeting and Secretary shall assume the following responsibilities –
a) To safeguard the integrity of the meeting via video conferencing.
b) To ensure proper video conference equipment/facilities.
c) To prepare the minutes of the meeting.
d) To ensure that no one other than the concerned shareholder or proxy to the shareholder is attending the
meeting through electronic mode.
4. If a statement of a participant in the meeting via video conferencing is interrupted or garbled, the Chairman of
the meeting or Secretary shall request for a repeat or reiteration, and if need be, the Chairman or Secretary shall
repeat what he heard the participant was saying for confirmation or correction.
5. A Company is required to have its Annual General Meeting either at the registered office of the company or at
place within the city, town or the village in which registered office of the company is situated. (Sec. 166)
6. At least 5 members in case of public company and 2 members in case of other company have to be personally
present and shall be the quorum for the general meeting (Sec. 174). In a general meeting, where shareholders
are allowed to participate through electronic mode, the quorum as required u/s 174 as well as chairman of the
meeting shall have to be physically present at the place of the meeting.
7. To provide larger participation and for curbing the cost borne by the Shareholders to attend general meetings,
listed companies may provide video conferencing connectivity during such meetings at least 5 places in India. It
is recommended that these places would be situated all over India in such a way that it covers top 5 States/UTs
based on maximum number of members or at least 1000 members, whichever is more, residing as per the
address registered with the depositories.
LATEST NOTIFICATIONS – RELEVANT FOR CA IPCC
Area Notification Reference / Effect
Voluntary Name Change
– Sec. 21
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to ROC.
Incorporation of Non
Profit Organization – Sec.
25
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.16 / Q.No.19
CG power delegated to ROC.
Conversion of Public to
Private Company – Sec.
31(1)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.6.21 / Q.No.26
CG power delegated to ROC.
Extension of Time Limit
for filing of Instrument of
Transfer – Sec. 108(1D)
Notfn. No. GSR. 222(E)
dated 17–3–2011.
P.No.12.9 / Q.No.14
CG power delegated to ROC.
ROC: ROC of the State in which the registered office of the
Company is situated, or by the ROC of the State in which the
transferee ordinarily resides.
Compulsory Name
Change – Sec. 22
Notfn. No. GSR. 223(E)
dated 17–3–2011.
P.No.8.2 / Q.No.5
CG power delegated to Regional Director.
Companies (Passing of
the Resolution by Postal
Ballot) Rules, 2011
F.NO. 2/4/2011-CL.V],
Dated 30-5-2011
P.No.13.27 / Q.No.31
Postal Ballot voting can be made through electronic system.
The following definitions are amended: –
a) "Postal Ballot" includes voting by Shareholders by
postal or electronic mode instead of voting personally by
presenting for transacting businesses in a general meeting
of the Company.
b) "Voting by electronic mode" means a process for
recording votes by the members using a Computer based
machine to display an electronic ballot and to record the
vote and also the number of votes polled in favour or
against such that the entire voting gets registered and
counted in a electronic registry in a centralised server.
LATEST CIRCULARS – RELEVANT FOR CA IPCC
Area Circular Reference / Effect
Service of Documents
– Sec. 53
17/2011 dated –
21.04.2011
P.No.15.6 / Q.No.10
Green Initiative in the Corporate Governance: A
Company would have complied with Section 53 of the
Companies Act, if the service of document has been made
through electronic mode provided the Company has
obtained e-mail addresses of its members for sending the
notice/documents through e-mail by giving an advance
opportunity to every shareholders to register their e-mail
address and changes therein from time to time with the
Company.
In cases where any member has not registered his e-mail
address with the Company, the service of document etc. will
be effected by other modes of service as provided under
Section 53 of the Companies Act, 1956.
Restriction on
Transfer of Shares
(Sec. 108A – 108I)
30/21011 dated
23.05.2011
P.No.15.6 / Q.No.24 to Q.No.29:
Sections 108A to 108-I of the Companies Act, 1956 were
become redundant and will have no legal force after the MRTP
Act, 1969 stands repealed.
Criteria for granting
recognition as Public
Financial Institution
u/s 4A (Sec. 4A)
P.No.6.12 / Q.No.13:
a) A Company or Corporation should be established under a
special Act or the Companies Act being Central Act;
b) Main business of the company should be industrial/
infrastructural financing;
c) The Company must be in existence for at least 3 years
and their financial statement should show that their
income from industrial/infrastructural financing exceeds
50% of their income;
d) The net-worth of the company should be Rs.1,000
Crores;
e) Company is registered as Infrastructure Finance Company
(IFC) with RBI or as an Housing Finance Company (HFC)
with National Housing Bank;
f) In the case of CPSUs/SPSUs, no restriction shall apply
with respect to financing specific sector(s) and net-worth.
Participation by
Shareholder in
General Meeting
through Electronic
Mode
27/2011 dated
20.05.2011
Guideline issued for Participation by Shareholder in General
Meeting through Electronic Mode. (See Below for Summary of
the procedure)
Participation by Shareholders in Meetings under The Companies Act, 1956
through Electronic Mode
1. Electronic mode means video conference facility i.e., audio-visual electronic communication facility employed
which enables all persons participating in that meeting to communicate concurrently with
other without anintermediary, and to participate effectively in the meeting.
2. The notice of the meeting must inform Shareholders regarding availability of participation through video
conference, and provide necessary information to enable shareholders to access the available facility of video
conferencing.
3. The Chairman of the meeting and Secretary shall assume the following responsibilities –
a) To safeguard the integrity of the meeting via video conferencing.
b) To ensure proper video conference equipment/facilities.
c) To prepare the minutes of the meeting.
d) To ensure that no one other than the concerned shareholder or proxy to the shareholder is attending the
meeting through electronic mode.
4. If a statement of a participant in the meeting via video conferencing is interrupted or garbled, the Chairman of
the meeting or Secretary shall request for a repeat or reiteration, and if need be, the Chairman or Secretary shall
repeat what he heard the participant was saying for confirmation or correction.
5. A Company is required to have its Annual General Meeting either at the registered office of the company or at
place within the city, town or the village in which registered office of the company is situated. (Sec. 166)
6. At least 5 members in case of public company and 2 members in case of other company have to be personally
present and shall be the quorum for the general meeting (Sec. 174). In a general meeting, where shareholders
are allowed to participate through electronic mode, the quorum as required u/s 174 as well as chairman of the
meeting shall have to be physically present at the place of the meeting.
7. To provide larger participation and for curbing the cost borne by the Shareholders to attend general meetings,
listed companies may provide video conferencing connectivity during such meetings at least 5 places in India. It
is recommended that these places would be situated all over India in such a way that it covers top 5 States/UTs
based on maximum number of members or at least 1000 members, whichever is more, residing as per the
address registered with the depositories.
thanx icai
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