Section 134 of the Companies Act,2013 and Rule 8 & 9 of the Companies (Accounts) Rules,2014 deals with the Financial Statement and Board Report. Signing of the Financial Statement: The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors and shall be signed by
PFA
Many a times dealers face a situation where due to technical error or clerical mistake while making payment of sales tax, tax is wrongly paid in wrong account i.e. instead of paying under the head of Central sales tax, it is paid under the head State VAT/sales tax. In such case whether adjustment between both [
PFA
Detailed Procedure Procedure of Incorporation of a One Person Company (OPC) Under Companies Act,2013. Step 1: Acquire DSC. Step 2: Acquire Director Identification Number Step 3: Register DSC on mca website.
PFAThe concept of Bait Money! Bait Money is a security feature used by various Banks/Bank branches. As its name suggests, this money kept with the Banks/Bank branches helps in tracking the culprits in case of any theft provided it has been taken by the thieves. Bait Money is basically a small pile of currency notes, […]
Bait Money check with respect to Concurrent Audit of Banks
The concept of Bait Money!
Bait Money is a security feature used by various Banks/Bank branches. As its name suggests, this money kept with the Banks/Bank branches helps in tracking the culprits in case of any theft provided it has been taken by the thieves.
Bait Money is basically a small pile of currency notes, information w.r.t. which has been duly noted by the designated Bank officials and is kept in safe custody so that in case of any unfortunate happening, such as theft, that information can be used to track the criminals.
Information w.r.t. Bait Money primarily involves currency Note serial numbers and the same can be maintained in following ways, among others:
Taking the print of currency Notes designated as Bait Money. However, care has to be taken that the print should not be of the actual size of the currency Note, either size of the print should be reduced or it should be increased as compared to the original currency Note size.
- Noting the serial number of currency Notes in a Logbook.
- Putting some distinguishing mark on the designated Bait Money However, this way is not very safe as the distinguishing mark can easily be copied.
- A scan of the respective currency Notes etc.
Care should be taken that not too many currency Notes are kept as Bait Money, especially, in the case where the serial numbers of those currency Notes are being maintained in a Logbook. It's because error might creep in while noting the respective serial numbers.
The best way to go about it would be to keep a print of Bait Money notes and to keep it in safe custody of the designated Bank official.
Our role as Concurrent Auditors!
- We need to check whether Bait Money is being duly maintained by the respective Bank branch.
- The way in which the information w.r.t. Bait Money is being maintained i.e. Logbook, Printouts etc.
- Check whether the information regarding Bait Money is kept in safe custody of the designated official and shall be available at the time when it's required.
- Currency Note pile representing Bait Money should NOT be marked "Bait Money – Not for use" or something like it else the entire purpose might fail.
- Tally the respective information with the respective currency Notes in order to make sure that Bait Money is present in the Bank branch, etc.
Thus, small checks like these will go a long way in ensuring the effectiveness of Concurrent Auditing exercise and safety of the respective Banks.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
Services of maintenance of equipment on behalf of foreign clients to Indian buyers and identifying prospective customers in India qualify as export of services Samsung India Electronics Pvt. Ltd Vs. CCE. Noida [2015 (1) TMI 1098 - CESTAT NEW DELHI] Samsung India Electronics Pvt. Ltd. (the Appellant) was rendering Customer care services to the customers […]
Services of identifying prospective customers in India qualify as export of services
Services of maintenance of equipment on behalf of foreign clients to Indian buyers and identifying prospective customers in India qualify as export of services
Samsung India Electronics Pvt. Ltd Vs. CCE. Noida [2015 (1) TMI 1098 – CESTAT NEW DELHI]
Samsung India Electronics Pvt. Ltd. (the Appellant) was rendering Customer care services to the customers of CDMA mobile phone in India on behalf of Samsung Electronics Company Ltd., Korea (Samsung Korea). The Appellant was also engaged in identifying new prospective customers and effectively communicating to them the features of CDMA products of Samsung Korea. In return, the Appellant was receiving a commission from Samsung Korea in foreign exchange during the period August 2003-December 2003, May 2005-December 2005 and April 2007-March 2012.
The Department demanded Service tax on the amount so received and the demand made against the Appellant was confirmed along with interest and penalties.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Delhi. The Appellant relying upon the decisions in the case of Blue Star Ltd. Vs.
Commissioner of Service Tax [2014-TIOL-2257-Cestat-Mum]("Blue Star case") and Simpra Agencies Ltd. Vs. C.C.E. [2014 TIOL-687-Cestat-Del] submitted that the activities undertaken by the Appellant on behalf of Samsung Korea are in the nature of export of services in terms of Rule 3(3) of the erstwhile Export of Services Rules, 2005 ("the Export Rules") and hence not exigible to Service tax. As regards the period prior to introduction of the Export Rules, the Appellant submitted that they are covered under the Circular No. 56/5/2003/ST dated April 25, 2003.
The Hon'ble CESTAT, Delhi relying upon the decision in the Blue Star case and in the case of Paul Merchants Ltd. Vs. CCE Chandigarh [2012-TIOL-1877-CESTAT-DEL],held that the Appellant has provided the service of procuring purchase orders for their foreign clients and providing maintenance service to the Indian buyers during the warranty period on behalf of their foreign clients on the instructions of foreign clients, which are covered by Rule 3(3) of Export Rules. Therefore, the Appellant was not required to pay Service tax and accordingly are entitled for refund.
Our Comments: The Hon'ble CESTAT, Delhi in the case of Microsoft Corporation (I) (P) Ltd. Vs. Commissioner of Service, New Delhi [2014- TIOL-1964-CESTAT-DEL] set aside the demand of Rs. 256 Crores by holding that the services provided to foreign principals for marketing their products in India qualify as an export of service under the Export Rules and hence not exigible to Service tax.
However, it would not be out of place here to highlight the recent change in the definition of 'intermediary' given under Rule 2(f) of the Place of Provision of Services Rules, 2012 (the POP Rules) to include intermediary in respect of goods also in its scope w.e.f. October 1, 2014. Accordingly, an intermediary of goods, such as a commission agent or consignment agent shall be covered under Rule 9(c) of the POP Rules (Location of service provider) instead of Rule 3 of the POP Rules (Location of service recipient). We are reproducing here under the amended definition of 'intermediary' as effective from October 1, 2014 for the ease of your reference:
"(f) "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the 'main' 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;"
Hence, this change in the definition of 'intermediary' has brought intermediary for goods at par with intermediary for services effective from October 1, 2014 and chargeable to Service tax on the basis of Location of service provider.
Moser Baer India Ltd. Vs. Commissioner of Central Excise, Noida [2015 (1) TMI 1093 - CESTAT NEW DELHI] Moser Baer India Ltd.(the Appellant) is the manufacturer of CDR, CD Rom, DVDR and DVD Rom, falling under Chapter Heading 85 of the Central Excise Tariff Act, 1985, at their factory situated at Noida. The Head Office […]
Input Service Distributor need not be a 'manufacturer' or 'output service provider' for availing Cenvat credit
Moser Baer India Ltd. Vs. Commissioner of Central Excise, Noida [2015 (1) TMI 1093 – CESTAT NEW DELHI]
Moser Baer India Ltd.(the Appellant) is the manufacturer of CDR, CD Rom, DVDR and DVD Rom, falling under Chapter Heading 85 of the Central Excise Tariff Act, 1985, at their factory situated at Noida. The Head Office of the Appellant, located at Okhla, Delhi is registered as an Input Service Distributer (ISD) in terms of Rule 2(m) of the Cenvat Credit Rules, 2004 (the Credit Rules). The Head Office was discharging Service tax liability under Reverse Charge for the various services received by them from foreign country. The Service tax so paid by themwas distributed by the Head Office to the Appellant's factory at Noida, which was utilized by the Appellant in their factory located at Noida.
The Department contended that in as much as the Service tax was being paid by the Head Office, which was neither engaged in the manufacture of any excisable goods nor providing any output services, they were not entitled to avail the said credit and in turn not entitled to pass on the said credit to the Appellant's factory located at Noida.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Delhi.
The Hon'ble CESTAT, Delhi after analysing Rule 2(m) and Rule 7 of the Credit Rules held that:
- In the light of Rule 7 of the Credit Rules which provides the manner of distribution of Cenvat credit by ISD, the basic requisite condition for the distribution of the said credit is that the ISD receives the invoices towards purchase of input services and pays the Service tax. There is nothing in the said Rule to suggest that the Head Office or the office of the manufacturer should be himself in a position to provide any output service or to manufacture any excisable goods;
- Further, Cenvat credit on the input services is not dependent upon the actual receipt of the services in the factory unlike the Cenvat credit of the duty paid on the inputs, which is dependent upon the actual receipt of the inputs or the capital goods in the factory. As such, when the services were first received by the Head Office and then transferred to the factory for further utilization, it cannot be made a ground for denial of Cenvat credit;
- The Tribunal in number of cases has held that where the documents are in the name of Head Office, Cenvat credit can be availed in the factory belonging to the same manufacturer – Modern Petrofils Vs. CCE, Vadodara [2010 (20) S.T.R. 627 (Tri. – Ahmd.)] and CCE, Vapi Vs. DNH Spinners [2009 (244) E.L.T. 65 (Tri. – Ahmd.)].
Therefore, the Hon'ble Tribunal allowed the Cenvat credit to the Appellant transferred from their Head Office.
Once the Assessee has filed an appeal by paying the mandatory pre-deposit amount of 7.5%, their bank account cannot be freeze Kala Mines and Minerals Vs. Commissioner of Customs, Central Excise & Service Tax, Goa [2015-TIOL-193-CESTAT-MUM] In the instant case, an Order was passed by the Ld. Commissioner, Goa confirming Service tax liability on Kala […]
Bank a/c cannot be freezed after mandatory pre-deposit payment
Once the Assessee has filed an appeal by paying the mandatory pre-deposit amount of 7.5%, their bank account cannot be freeze
Kala Mines and Minerals Vs. Commissioner of Customs, Central Excise & Service Tax, Goa [2015-TIOL-193-CESTAT-MUM]
In the instant case, an Order was passed by the Ld. Commissioner, Goa confirming Service tax liability on Kala Mines and Minerals (the Appellant). Being aggrieved by the said Order, the Appellant preferred an appeal before the Hon'ble CESTAT, Mumbai by making a pre-deposit of 7.5% of the Service tax demand confirmed in terms of Section 35F of the Central Excise Act, 1944 (the Excise Act).
Despite of such compliance, the Deputy Director, DGCEI, Goa has written a letter to Appellant's bankers namely HDFC, SBI and Corporation Bank to remit the amounts lying balance in the account of the Appellant in order to credit the same with the Government exchequer against the dues. Pursuant to the said communication, the banks froze the accounts and were not allowing the Appellant to operate the accounts for their day-to-day activities/ functioning.
Being aggrieved, the Appellant made a plea before the Hon'ble Tribunal.
On listing of the matter before the Hon'ble Tribunal on January 19, 2015, the Hon'ble Tribunalheld that once statutorily
mandatory deposit of 7.5% has been made, there is no reason for recovery of any further amount from the Appellant and the action of the Deputy Director, DGCEI seems to be beyond the scope of law. Hence, there is no need to freeze the account of the Appellant as long as the appeal is pending before the CESTAT.
Accordingly, the Hon'ble Tribunal directed the lower authorities, especially the Deputy Director, DGCEI, Goa to defreeze the account forthwith by issuing appropriate instructions to the Appellant's bankers.
Our Comments:The Central Board of Excise & Customs vide Circular No. 984/08/2014-CX dated September 16, 2014 clarified that no coercive measures for the recovery of balance amount i.e., the amount in excess of 7.5% or 10% deposited in terms of Section 35F of the Excise Act or Section 129E of the Customs Act, 1962 shall be taken during the pendency of appeal where the Assessee shows to the Jurisdictional Authorities:
(i) Proof of payment of stipulated amount as pre-deposit of 7.5% / 10%, subject to a limit of Rs.10 crores , as the case may be; and
(ii) Copy of appeal memo filed with the Appellate Authority.
It was further provided that recovery action, if any, can be initiated only after the disposal of the case by the Commissioner (Appeals)/ Tribunal in favour of the Department unless the order of the Tribunal is stayed by the High Court/Supreme Court.
The recovery, in such cases, would include the interest, at the specified rate, from the date duty became payable, till the date of payment.
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