RE:Central excise duty on iron & steel re rolling
by Neeraj Gupta on Feb 29, 2008 02:28 PM
Central Excise Duty on iron & steel re-rolling reduced to 14% from 16%
RE:Budget - 2008
by RAVI KABRA on Feb 29, 2008 02:22 PM
You have to pay less tax by Rs. 44,000/- if you earn more than Rs. 15 lacs in financial year 2008-2009. CA. Ravi Kabra
why is the " deep gratitude" of the FM to the farmers restricted only to those farmers who have taken loans. Is it not right that most farmers and subsistence level individuals in villages do not have Bank loans ( Too poor to even dream of a loan)
HAPPY TO SEE THAT GROWTH IS MAINTAINED AT 8 % AND HOPE TO SEE INCREMENT IN THE YEARS TO COME.
GOOD STEPS FOR THE FARMERS OF THE COUNTRY AS THE OUTSTANDING TAXES WILL BE WAIVED AND NEW LOANS AT SUBSIDIZED RATE.
NEED TO LOOK INTO THE PROBLEMS OF DISTRIBUTION AND STORAGE ALSO AND REDUCE THE STORAGE LOSS TO HELP FEED THE NATION COMPLETELY.
TAX LIMIT IS SATISFIED AND NEED TO IMPLEMENT 6TH PAY COMMISSION AT THE EARLIEST TO HELP THE WORKERS OF THE COUNTRY.
GOOD STEPS FOR EDUCATION AS NEW IIT'S AND INCREASED PLANNED ALLOCATION FOR SARVA SIKSHA ABHIYAN. NEED TO LOOK INTO PROPER IMPLEMENTATION AND HOW THE PROBLEMS OF DROP OUTS CAN BE ERASED.
NEW TAXES ARE WELCOMED AND SHOULD IMPLEMENT THEM STRICTLY.
MEASURES SHD BE TAKEN TO INCREASE THE INDIRECT TAX COLLECTION
GOOD AMOUNT OF ALLOCATION FOR DEFENCE AND THE SOCIAL ISSUES RELATED TO THE RELATIVES.
ABOVE ALL GOOD BUDGET AND HOPE TO SEE THIS STABLE GOVERNMENT IN THE FUTURE TOO.
It may be recalled that vide the October 1996 Circular; the Finance Ministry had clarified on Service Tax on advertising agencies that "the amount paid, excluding their own commission, by the advertising agency for the space and time in getting the advertisement published in the print media or the electronic media will not be includable in the value of taxable service for the purpose of levy of Service Tax".
However, a Draft Circular (F.No.341/43/2005-TRU dated 10th October, 2005), in total contradiction of the earlier circulars, stated that "the tax is to be levied on the total amount paid by the client to the advertising agency inclusive of the amount paid by the advertising agency to the media".
Luckily, this did not happen as the draft circular was withdrawn.
By hindsight, this "small tax" has already grown into a monster child in ten (10) years; and it has alarmingly become a huge 12.24% (Service Tax @ 12% plus Education Cess @ 2%).
Service Tax, however, has become an extra burden on advertisers; but only if they use the services of an advertising agency.
If the advertiser does not pay it is of no consequence to CBEC. However, if the advertising agency fails to collect the Service Tax, the responsibility for the payment still lies on the advertising agency.
The advertising agency can not claim any exemption from payment of Service Tax to the government, on the grounds that the same was not paid to them by their client. Till today many PSUs, Indian Railways, etc., do not pay this tax to their advertising agencies.
So they have to pay from their pocket.
Media Sales for Space and Time:
You you are an ad agency your media sales are already covered under Sevice tax on Advertising. But still there are contradictions.
Media Sales or Canvassing agents (also called concessionaires) who work for newspapers helping them garner advertisements were -- according to a circular (Circular No. 64/13/2003-ST dated October 28, 2003), exempted. The circular clearly stated that "if the canvassing is limited to space selling then such services would not be liable to any service tax. However, if canvassing is involving receiving the text of advertisement, estimating the space that such advertisement would occupy in the newspaper / periodical / magazine, negotiating the price, forming the general layout of the advertisement that would finally appear in the newspaper then such activity would be liable to service tax under the category of Advertising Agency Services."
Despite this, in the last two-three years, these same exempted concessionaires in Mumbai and Chennai are being hounded and coerced to register under "business auxiliary services" by the same Service Tax authorities.
It is true the poor concessionaires or Media Sales agents have no client (or advertiser) to pass it on to!
So either they cough up and bear the loss or they simply exit from this business.
But the CBEC insists that "canvassing for advertisement shall be taxable under business auxiliary services (Section 65(19)), which includes promotion or marketing of services provided".
Recently, in Febin Advertisers, Palakkad vs CCE, Calicut (2007 11 STJ 205 Cestat, Bangalore), it was held that rendering help for advertisement and canvassing for the Railways is not taxable as advertising agency services. (Also refer CCE Chennai vs Team UPD Ltd (2005 179 ELT 469 Cestat Chennai) and CCE Kolkata vs The Incoda (2004 174 ELT 65 Cestat, Kolkata.)
As such CBEC says it is not a case of advertising services but it would appropriately fall under business auxiliary services. But there is no circular (as in the case of Service Tax) clearly stating it can be passed along to the advertiser or client.
What this infact says that the government (read tax-man) does not want Media Sales agents. Media (newspapers / periodicals / magazines / radio & TV channels) must have in-house media sales people only ... no outsourcing !!!
On top of that, while Service Tax, which is a "central subject", is already being levied on advertising, Maharashtra State Government promulgated an ordinance No.II of 2005, which came into effect on 7th May 2005, imposing a Stamp Duty @ Rs. 2.50 per 1000 on all
Stamp Duty @ Rs. 2.50 per 1000 on all advertising agreements and/or contracts relating to advertisements in mass media and on telecasting and broadcasting operations.
This tantamounts to double taxation on the same items as the States get a share of the Service Tax pie.
I do not think its a very good decesion due to election budget Mr chidambaran provide so much releief ,it adversely effects on investment and on govt revenue .so Govt will find another way to collect revenue in future. CA nikhil Agarwal Baroda.
RE:Income tax.
by rtfd on Feb 29, 2008 02:06 PM
i know exactly what pessimists like you would have said if it was a 'strict budget'. Remember , there is either 'this way' or 'that way'.
