Refund of excess TDS paid under Section 195

CBDT has issued circular number 7/2011 dated 27.9.2011 which seeks to amend circular number 7/2007 dated 23.10.2007.  If a deductor has deducted tax as per Double Taxation Avoidance Agreement (DTAA) and this rate of tax is higher than that prescribed under the Income Tax Act then the dedcutor can claim the difference between the lower income tax rate and DTAA rate as refund.  This amendment is made to avoid hardship to the resident deductor where deduction is made under a higher rate of DTAA

Documents Required for Registration under Service Tax

Order No.2/2011 - Service Tax dated 13.12.2011 issued under F.No.137/120/2011 of Ministry of Finance provide the following documents as mandatory for issuing registration under Service Tax Rules, 1994

• Copy of Permanent Account Number (PAN)
• Proof of Residence
• Constitution of Applicant
• Power of Attorney in respect of the Authorised Person

The above documents should be filed within 15 days of submitting of application for registration.  Within Seven days of submission of the application and all the above documents the Central Excise Officer should provide registration under Service Tax.

Exports to Nepal brought under Rule 18 & Rule 19 of Central Excise Rules effective 1.3.2012

Procedure for exports to Nepal & Bhutan from India slightly departed from general export Rules 18 & 19 of Central Excise Rules, 2002 and where specified in notification number 45/2001-CE (N.T.) dated 26.6.2001.  Now Nepal has been removed from the ambit of the above mentioned notification and therefore procedure for export to Nepal will also comply with Rule 18 & 19 of Central Excise Rules 2002.

The Ministry of Finance has issued a series of notifications from numbers 24 to 29 /2011 (N.T.) dated 5.12.2011 to be effective from 1st March 2012 so that exports to Nepal is not governed under specific procedures but general procedures as followed for exports to all other countries.

This change comes in the backdrop of the recent Treaty between India and Nepal

However Bhutan continues to have special treatment for exports and not covered under Rule 18 & 19

Nil TDS on Transport Charges (Section 194C) & TDS Returns

With effect from 1.10.2009, Finance Act (2) of 2009 has provided that no TDS needs to be deducted on payments made to Transporters who provide service of Plying, hiring or leasing goods carriage.  The Caveat here is that these service providers should provide their PAN number to the deductor, if not deduction will be made at 20%.

Even though TDS is not deducted on transport charges these transport charges has to be furnished in the Quarterly eTDS return with tax deduction shown as "NIL".

To quote the words in the Finance Act (2) of 2009

"(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

(7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed."

There are instances where the transport charges are not forming part of the quarterly e-returns which is a violation, so please ensure that your e-returns capture the same

Can a director remain outside state forever - Indian Companies Act, 1956

Question : Can a director remain outside state forever

Yes there is no restriction in the location of a Director.  Section 252 to Section 284 of the Companies Act, 1956 deals with appointment, qualification, disqualification, restriction etc of Directors, which does not specify any conditionality on location of directors

As the director is overseas care should be taken under section 283(1)(g) which states that a director shall vacate office if

"he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the board"

So it should be ensured that this directors attends the board meetings or takes a proper leave of absence.