Electronic Return compulsory for all Service tax assessees

From October 1, 2011, i.e. from the next half yearly return, all assessees are required to  file the return electronically. For this, all assessees have to get a user id and password from the Assessing Officer for the aces.gov.in portal, if not already received.

The relevant notification is given below:

NOTIFICATION NO: 43/2011 – ST., Dated: August 25, 2011

G.S.R. 642 (E).- 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 the Service Tax Rules, 1994, namely :-

1. (1) These rules may be called the Service Tax (Fourth Amendment) Rules, 2011.

(2) They shall come into force on the 1st day of October, 2011.

2. In the Service Tax Rules, 1994, in rule 7, -
(a) in sub-rule (2), the proviso shall be omitted;
(b) after sub-rule (2) as so amended, the following sub-rule shall be inserted, namely:-

“(3) Every assessee shall submit the half-yearly return electronically”.

F. No. 137/99/2011 – Service Tax

(Deepankar Aron)
Director (Service Tax)

Trouble for Tax Evaders got bigger!

NEW DELHI: Tax evaders' troubles just got bigger. Indian and foreign banks operating in the country have agreed to give income-tax authorities access to their data, a move that seeks to check accumulation of black money. 

"IBA (the Indian Banks' Association) has written to the Central Board of Direct Taxes saying it is ready to give access to banks' data base," a finance ministry official told ET. IBA represents more than 160 Indian and foreign banks operating in the country. 

Banking sector experts said foreign lenders would take the maximum heat of the IBA move as tax officials often suspect them of helping Indians stash away black money in their overseas branches. 

Modalities for accessing the data will be worked out soon, the official added. 

At present, banks disclose transaction and account details only in response to specific queries from the tax authorities. Banks are legally bound to report all suspicious transactions, or dealings above 10 lakh, to the income tax department's Financial Intelligence Unit under the Prevention of Money Laundering Act. 

But tax authorities have been seeking a more dynamic flow of information from the banks to effectively track black money. 

"Data on bank accounts and transactions can help tax authorities corroborate intelligence received from different sources," an income tax official said. 

It is widely believed that a lot of black money is actually parked in India's banks and lax implementation of know-your-client, or KYC, norms by lenders is abetting the crime. 

A number of cases have been detected in the recent past where customers opened multiple accounts with banks on the basis of just one permanent account number or PAN. In one case detected in eastern UP, 600 bank accounts were opened using 10 PANs, said the income tax official. 

Banks are obliged to inform the income tax department if they detect such cases. Failure to do so could attract prosecution for abetting tax evasion. "Banks have been found flouting not just KYC norms, but they have also been lax in filing suspicious transaction reports," the official said. 

The income tax department recently overhauled its intelligence-gathering wing, the Central Information Branch, giving it powers to summon suspected tax evaders. The branch has the mandate to trace black money parked abroad as well as track excessive spending. 

This intelligence wing, which has 17 directorates all over the country, has put in place smart software that already has extensive information on taxpayers mapped to their respective PAN cards. 

Access to bank data will give tax authorities a 360 degree view of the taxpayer. 

Faced with a possible revenue shortfall this year, the tax department has stepped up action on intelligence received through various sources and is carrying out intensive surveys and searches all over the country. 

Show cause notices have also been issued to individuals who hold accounts in foreign banks. 

India has begun receiving information from other countries on financial transactions of Indians abroad after it signed tax information exchange agreements and revised Double Taxation Avoidance agreements with several countries. 

Switzerland, a favourite destination for tax evaders, will also offer information on bank accounts held by Indians there from December.
(Courtesy: The Economic Times)

GST will bring 10% growth in GDP - Adi Godrej

Adi Godrej, chairman of the R15,000-crore Godrej Group, is fine-tuning the company’s organic and inorganic growth strategy to sustain its growth momentum in the R1,40,000-crore Indian FMCG sector. Godrej strongly believes that the implementation of GST (goods & services tax) will be a major growth driver for the Indian FMCG industry. In an exclusive interview with FE’s Lalitha Srinivasan, Godrej talks about the company’s strategic plans this fiscal.

Do you think the implementation of Goods & Services Tax (GST) will lead to price reduction in the FMCG space?
Yes. Once the GST is implemented, the price reduction in the FMCG space could be around 4 to 5% across categories. As the prices of consumer goods fall, consumption would increase considerably. The introduction of GST will lead to an incremental GDP growth of 1.5 to 2 percentage points. Once GST is introduced, India will have 10% GDP growth for ten years in a row. The government has appointed Sushil Modi, deputy chief minster of Bihar as the head of empowered committee of state finance ministers. He is taking necessary steps for the early implementation of GST.
After clinching seven acquisitions last year, you have acquired a 51% stake in Darling Group Holdings in Africa two months ago. Are you still scouting for acquisitions?
Yes, we are looking at acquisition opportunities both in the domestic as well as international markets. We are looking for acquisitions in hair care, personal wash and household goods sectors. Our acquisition focus is on developing countries.
With the rising input costs, many FMCG companies have taken price hikes in the last few months. Do you think the down-trading syndrome will now gain momentum in India?
It’s possible. Actually, it’s difficult to predict what will happen. But we have to sell our products at different price points to retain our consumers. To offset the rising input costs, we have also taken price hikes for our brands. Over all, I am not apprehensive about the down-trading trend in the FMCG space.
Could you tell us about your rural expansion strategy?
We are planning to set up new plants for Godrej Agrovet in rural India. Also, we are adding on manufacturing capacity for our Oleo chemicals business. In fact, our rural FMCG business has grown by 25 to 30% in the last few months. We plan to sustain our growth momentum in rural India this fiscal.
What are GCPL’s expansion plans in Q2 FY12?
We will be investing in capabilities and distribution models to sustain our performance in FY 2011-12. We are hiking our ad budget by 30% to promote all GCPL brands this fiscal. GCPL’s core strategy will be to leverage the advantages between its new acquisitions and existing brands to fuel sales growth. Our factories have devised ways to maximize production in our existing plants.

(Courtesy: The Financial Express)