CS Final Group III : Direct and Indirect Taxation Law and Practice - December 2005

CS Final - Group III • Direct and Indirect Taxation Law and Practice • December 2005

This Paper has 30 answerable questions with 0 answered.

Roll No…………
Time allowed : 3 hours	Maximum marks : 100
Total number of questions : 8	Total number of printed pages : 3

PART—A (Answer any two questions from this part.)
Marks

PART—A
(Answer any two questions from this part.)

Marks

1.	(a)	Undertaking–A is set–up by Amol Ltd. in Domestic Tariff Area (DTA) and started manufacture or production of computer software in the financial year 1999–2000. It got approval as 100% EOU on 7th June, 2004. Discuss whether it will be eligible for deduction under Section 10B of the Income–tax Act, 1961. If yes, how and for what period the deduction will be allowed?	5	(0)
	(b)	Can advance ruling be sought on a question relating to tax liability of a resident under the Income–tax Act, 1961? Discuss.	5	(0)
	(c)	Is it right to say that once penalties under Section 271(1)(c) of the Income–tax Act, 1961 are cancelled on the ground that there is no concealment, quashing of prosecution under Section 276C is automatic?	5	(0)
	(d)	What is ‘tonnage tax’? Explain briefly.	5	(0)
2.	(a)	Prudent Ltd. is an Indian company. It owns an industrial undertaking engaged in the manufacture of articles and started production during 2000–01. On 31st March, 2004, it has 80 workmen out of which 20 are casual workmen. On 15th May, 2004, the company appoints 30 regular workmen and paid Rs. 4,000 per month to each such workman. Find out the amount of deduction under Section 80JJAA of the Income–tax Act, 1961 for the assessment year 2005–06.	10	(0)
	(b)	Define ’demerged company’ and ‘resulting company’ under the Income–tax Act, 1961. What are the tax concessions available to a demerged company and its shareholders under the Act?	10	(0)
3.	Write notes on the following:		5each
	(i)	Minimum Alternate Tax (MAT) under Section 115JB of the Income–tax Act, 1961.		(0)
	(ii)	Tax deducted at source on fees paid for professional or technical services.		(0)
	(iii)	Deemed assets under the Wealth–tax Act, 1957.		(0)
	(iv)	Tax management in respect of advance payment of income–tax in the case of a company.		(0)

PART—B (Answer any four questions from this part)

PART—B
(Answer any four questions from this part)

(a)

Define the following terms under the CENVAT Credit Rules, 2004:

(i)

input service distributor.

(0)

(ii)

Output service.

(0)

(b)

What is meant by ‘Export General Manifest’ (EGM) under the Customs Act, 1962? Who is liable to submit EGM and what is the time period for filing the same?

(0)

(c)

Explain with reasons whether ‘canned software’ (i.e., computer software packages off the shelf) like Oracle, Lotus, Master key, N–Export, Unigraphics, etc., can be termed as ‘goods’ and as such be assessable to sales tax.

(0)

(d)

What is service tax liability of an insurer carrying on life insurance business under the Service Tax Rules, 1994?

(0)

(a)

Explain the different types of valuation under the Central Excise Act, 1944.

(0)

(b)

Write a note on ’additional duty’ (countervailing duty) under the Customs Tariff Act, 1975.

(0)

(c)

Anderson is a consulting engineer and citizen of Canada. He does not have any office in India. He renders taxable service in India to an Indian company. Advise whether Anderson is liable to pay service tax in India.

(0)

(d)

Ashok sells goods in the course of export out of the territory of India. Is he liable to pay central sales tax?

(0)

(a)

An SSI unit paid central excise duty for the month of December, 2004 on 15th January, 2005 by demand draft with TR–6 challan. However, the bank received and stamped TR–6 challan on 17th January, 2005 on account of weekly holiday. Whether any interest will be charged on the SSI unit for late payment of duty? If yes, then whether such interest will be charged as per the provisions of Rule 8(3) of the Central Excise Rules, 2002 or as per provisions of delayed payment of duty under Section 11AB of the Central Excise Act, 1944? Also calculate the amount of interest payable by the SSI unit, if the amount of duty is Rs. 31 lakh.

(0)

(b)

Rosy Di–Gen Co. is a manufacturer of diesel generating sets. In the process of manufacture, it uses certain components manufactured by Cosy & Co. The diesel generating sets manufactured by Rosy Di–Gen Co., do not bear the brand name of Cosy & Co., but in the invoices issued to the purchasers, the diesel generating sets are described as ‘Cosy & Co. Diesel Generating Sets’. Discuss with the help of decided case law, if any, whether the SSI exemption is available to Rosy Di–Gen Co. or not?

(0)

(c)

Ever Fresh Ltd. purchases edible vegetable oil from the open market. The oil is subjected to certain processes for the purpose of refining it. The refined edible oil is sold in the market but no excise duty is being paid by Ever Fresh Ltd. claiming, that since no manufacturing activity is involved, no duty is payable on their clearances. A show cause notice has been issued by the proper officer demanding duty on clearance of refined edible oil classifying the product under Tariff Item 1503.10. The contention of the excise department is that refining the edible oil amounted to manufacture, as the process undertaken by Ever Fresh Ltd. is mentioned in Tariff Item 1503.10 which is not disputed. Since subsequent to the refining process, a new and distinct product has emerged, hence, duty is payable on the same.
You have been asked to advise whether refining/ processing of edible oil can be deemed as manufacture or not? Cite case law in support of your views.

(0)

(a)

Green Gel Ltd. imports chemicals from Russia. Compute the education cess payable by the company on the basis of following data:

(i)
(ii)
(iii)
(iv)

Landed value (CIF)
Customs duty
Countervailing duty (CVD)
Education cess

Rs. 5,00,000
@ 16%
@ 16%
@ 2%

(0)

(b)

Enumerate the list of persons who can be searched under Section 100 of the Customs Act, 1962.

(0)

(c)

Link Engineering Ltd. purchases a machine for manufacturing of certain mechanical parts which are exempt from payment of central excise duty. It also occasionally uses the machine for manufacture of small quantities of components which are cleared on payment of duty. Is Link Engineering Ltd. entitled to take credit of the excise duty paid on the machine? Decide by referring to specific legal provisions.

(0)

(a)

State, giving reasons in brief, whether the following statements are correct or incorrect :

2each

(i)

A person, who is not a dealer registered under the Central Sales Tax Act, 1956, can collect central sales tax on the sales made by him in the course of inter–State trade and commerce.

(0)

(ii)

Newspapers, actionable claims, stocks, shares and securities are ‘goods’ under the Central Sales Tax Act, 1956.

(0)

(iii)

The cost of freight does not form part of the sale price under the Central Sales Tax Act, 1956 if it is separately charged in the invoice.

(0)

(b)

Discuss the instances wherein the goods move out of the selling State, but do not amount to inter–State sales under Section 3 of the Central Sales Tax Act, 1956.

(0)

(c)

What are the conditions for taking the CENVAT credit under the CENVAT Credit Rules, 2004?

(0)

Disclaimer ♣ Privacy Policy ♣ Who We Are ♣ Terms of Service