Bad news for all Export Commissions / indenting agents in India ?

There are many who provide services of this nature wherein the ultimate recipient of the services resides outside India. This typically happens in the case of the foreign suppliers who were trading their good in the Indian territory and paying the commission to the Indian agents for the promoting their material to the Indian buyers. This notification has now changed the pointer to the provider for services instead of the recipient of the services for this purpose. This makes all indenting agents of this nature (which were previously outside the preview) liable to pay service tax w.e.f. 1st Oct 2014.

Changes in Place of Provision of Services Rules, 2012 (“The POP Rules”) Vide NotificationNo. 14/2014-ST Dated 11-7-2014 (Effective From 1-10-2014):-

Definition of ‘Intermediary’ has been amended to include intermediary of goods in its scope. Accordingly, an intermediary of goods, such as a commission agent or consignment agent shall be covered under Rule 9(c) of the POP Rules instead of Rule 3 of the POP Rules.

Let us analyse above.

Rule 9(c ) of Place of Provision of Service

Rule 9 : Place of provision in respect o following services shall be the location of the service provider:

(C ) Intermediary Services;

INTERMEDIARY SERVICES

Let us analyse Intermediary Service Pre and Post 01.10.2014.

“Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of service between two or more persons, but does not include a person who provides the main service on his account.”

WEF 01.10.2014 Intermediary Means as under.

“Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of service or a supply of goods between two or more persons, but does not include a person who provides the main service or supplies the goods on his account.”

Please mark words written in bold. It is evident that the service of intermediary facilitating supply of goods also be considered intermediary service wef 01.10.2014. Hence Location of service provider will be the place of provision of service.

6 accouting tips for smooth year end closing

March end seems to be very hectic for the accountants and tax professionals. Sometimes, we hear the businessman saying they are busy with the year end closing.

As startups or new entrepreneurs, you may be thinking what really needs to be done?

Here is a top 6 items to be sorted out his year end.

Provisions for Expenses

Prudent accounting thumb rule is debit expenses pertaining to a period eventhough the payments are due in next period. With this in mind all your electricity, telephone, rent, salaries, etc. till march needs to be booked even if due in next month. If actual bills are not received, prudent accounts estimate and Book those to show correct picture. There is a basic matching principle to be kept in mind wherein all expenses corresponding to income generated in that period need to be booked showing correct picture of profit or loss for that period.

Check your VAT and Service Tax Calculations
Whether all the invoices are booked and accounted before the calculation for the same is done.

Has the legitimate setoff been claimed on the purchase side. Many of us miss claiming this while it is available. This has a cash impact and hence very trivial. Taxes once paid are difficult to get refunded. The setoff gets missed in the small expenses like flight tickets, hotel bills, taxi bills, purchase of office equipments, AMC charges, and so on.

Bank Reconciliations
Completely verify your bank statement visa-a-vis the books of account. This will allow you know if there are any cheque which are received but not deposited in the Bank or cheques which are issued but not cleared. This may also throw surprises like cheque bounces not recovered, huge bank charges and so on. Very important to pass all the pending entries in the Bank before deciding on the available balance for payments at the year end.

TDS (Withholding Tax)
Here the expectation is from the payer of income to deduct taxes while doing so. Contractors, Professional Fees, Advertising, Renting broadly attract deductions before making the payments from 1% to 10%. It is necessary to do this even with respect to the provisions of expenses even though the payments would be done later in the next year. As a recipient of the services, please be careful that each and every provision for expense is Tax Deducted

Writeoff all the bad clients
You may have been raising invoices on clients all through out the year. Now is time to clean up. Check if there are any clients not going to settle these and reverse those. This will help you save unnecessary VAT, Service Tax and even the Income Tax. From the commercial point of view, you may have only the real receivable customer balances lying in the books to be recovered. Doing a bill to bill reconciliation is advised instead of account to account.

Check whether your Cash book tallies with that in Hand
It's common that the cash doesn't matches with the balance in hand. Matching the physical cash with that in the book throws up surprises like cash lying with some employees, vouchers not booked, payments made without supporting documents and even theft.

It's like taking "a stitch in time would save nine".  This would not only make the life smoother from taxation angle but also show correct picture for the financial as to what's your profile or loss, which are liabilities to be paid and assets to be collected.

People say that accounting doesn't add any value in the business but we do not tend to agree. It acts like a mirror to show how do you look. It's like a dashboard of the Car which doesn't help in efficiency or speed but it definitely measures the achieved one.

Free Due-date Reminders - a Christmas Gift from MyMuneemji

Christmas is the festival of Cakes, Candles and Carrels. Cake says "be sweet", Carrels say "Love one and all" and Candles say "Light up your mind with knowledge". 

We at MyMuneemji extend warm greetings for Christmas and a Happy New Year 2014.

At this juncture, it is exciting to share that more functional version of MyMuneemji is launched. This welcomes the New Year with added visibility and pro-activeness.

As Just try our Free Signup to start getting free sms and email alerts on before relevant tax filing due-dates and avoid any interest or penalties. Do let us know if there are any suggestions and feedback in this regard to make us better in helping you.

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Mymuneemji is close to completion with it's basic plate of services with a price point which is never tried for the quality which we aspire to offer.

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CBEC extends the date of submission of the return

F.No.137/99/2011-Service Tax Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi, the 15th October, 2012 ORDER NO: 3/2012             In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the  return for the period 1st April 2012 to 30th June 2012, from 25th October, 2012 to  25th November,2012.             The circumstances of a special nature which have given rise to this extension of time are as follows:   a)      ACES will start releasing the return in Form ST3 in a quarterly format, shortly before the due date of 25th October,2012. b)     This will result in all the assesses attempting to file their returns in a short time period, which may result in problems in the computer network and delay and inconvenience to the assesses.  (S.M. Tata) Commissioner Service Tax Central Board of Excise and Customs

SERVICE TAX RETURN DUE DATE ON 25.10.2012

SERVICE TAX RETURN DUE DATE ON 25.10.2012 PERIOD UP TO 30.06.2012 ONLY Service tax return period has been cut short for financial year 2012-13 to three months 01.04.2012 to 30.06.2012 from earlier 01.04.2012 to 30.09.2012 to be filed by 25.10.2012. Notification in this regard is given here under for your ready reference. SERVICE TAX (FOURTH AMENDMENT) RULES, 2012 - AMENDMENT IN RULE 7

NOTIFICATION NO. 47/2012 ST, DATED 28-9-2012

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend theService Tax Rules, 1994, namely:-

1. (1) These rules may be called the Service Tax (Fourth Amendment) Rules, 2012.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Service Tax Rules, 1994, in rule 7, in sub-rule (2), the following proviso shall be inserted, namely:-

"Provided that the Form 'ST-3' required to be submitted by the 25th day of October, 2012 shall cover the period between 1st April to 30th June, 2012 only."

As per existing service tax rules, every assessee has to file their half yearly return for period 1st April to 30 September on or before 25th October and 2nd half yearly return for period 1st October to 31st March by 25th April every year. But this year, period for first half yearly return for service tax has been cut short to quarter and now service tax return is to be filed for period 01.04.2012 to 30.06.2012 only on or before 25.10.2012.  This change is temporary arrangement and this has been done to settle the issue arises due to implementation of negative list regime. As you are aware that w.e.f. 01.07.2012 negative list regime has been started and there is a single code has been notified to deposit service tax for all the services, so there is no idea to get return filed with individual service detail. Therefore service tax return has been bifurcated in two part, i.e. before negative regime up to 30.06.2012 and after negative service list i.e. w.e.f. 01.07.2012. Return for the period w.e.f. 01.07.2012 to 30.09.2012 has not been disclosed or notified as of now.