CS Final :: Direct And Indirect Taxation - Law and Practice : June 2005

Explain the tax treatment in the hands of a company issuing bonus shares and distributing dividend. Discuss whether these are chargeable to dividend tax.

Long-term capital loss of Rs.26,00,000 is incurred by a company on transfer of equity shares on 10th October, 2004. The company has paid securities transaction tax. Is it possible to set off the loss against long-term capital gains on sale of land?

What is the cost of acquisition of bonus shares and bonus units ? Also, discuss the provisions of section 94(8) of the Income-tax Act, 1961.

What are the provisions in respect of revision of assessment orders that are found to be prejudicial to the interest of revenue ?

What are the tax planning issues involved in respect of modernisation, replacement, repair, renewal or renovation?

What is the scope of tax planning available to a company for the purposes of reducing the impact of wealth-tax?

How is the income from international transactions computed having regard to arm’s length price ?

What are the salient features of levy of income-tax on the income pertaining to foreign institutional investors (FIIs)?

What are the areas of tax planning available for Indian collaborators in joint ventures for making payments abroad ?

Explain the powers of the Central Government to increase or levy export duties.

When can the CENVAT credit in respect of input service be availed under the CENVAT Credit Rules, 2004?

Enumerate the matters on which the advance ruling can be sought under the Central Excise Act, 1944.

What is the minimum and maximum penalty imposable for failure to collect or pay service tax under the Finance Act, 1994?

Define ‘place of business’ under the Central Sales Tax Act, 1956.

A manufacturer having a factory at Jaipur has uniform price of Rs.1,000 per unit (excluding taxes) for sale anywhere in India. During the financial year 2003-04, he made the following sales:

(i)	Sale at factory gate in Jaipur : 1,000 units – no transport charges.
(ii)	Sale to buyers in Delhi : 500 pieces – actual transport charges incurred Rs.12,000.
(iii)	Sale to buyers in Chennai : 600 pieces – actual transport charges incurred Rs.48,000.
(iv)	Sale to buyers in Mumbai : 900 pieces – actual transport charges incurred Rs.30,000.
Find assessable value per unit under the central excise.

Mrs. & Mr. Kapoor visited Germany and brought following goods while returning to India on 8th February, 2004 :

(i)	Their personal effects like clothes, etc., valued at Rs.35,000.
(i)	A personal computer bought for Rs.36,000.
(iii)	A laptop computer bought for Rs.95,000.
(iv)	Two litres of liquor bought for Rs.1,600.
(v)	A new camera bought for Rs.37,400.
What is the amount of customs duty payable ?

Ganpati Traders, Jodhpur, Rajasthan made various inter-State sales to registered dealers. Declaration in Form-C were received as follows :

(i)	One Form-C covering sale of Rs.2 lakh was lost. The buyer sent a xerox copy duly certified as true copy by their commercial tax officer.
(ii)
(iii)	One Form-C covering sale of Rs.1 lakh was misplaced in post. The buyer sent another Form-C. It was marked ‘duplicate’
(iv)	One Form-C was received in respect of one invoice of Rs.5 lakh.
If the goods are sold within Rajasthan, the local sales tax rate is 12%. You are required to find out the central sales tax payable, if a surcharge of 15% is also leviable in Rajasthan on sales tax.

Tax on professions, trades, callings or employments is a State subject, under entry 60 of List II (State List). It is argued that service tax cannot be levied by Union Government on profession of Company Secretary. Discuss.

As a Company Secretary, advise the Board of directors of your company in the following matters under central excise laws. Each case may be treated as a separate case :

(i)

Your company has reprocessed duty paid commercial plywood to produce slip proof commercial plywood. The process is an application of PF resin on duty paid plywood under 100% heat and pressure and coating it with wire mesh to make it slip proof commercial plywood. The product is used in body building of motor vehicles or flooring. Directors of your company are of view that there is no manufacture, because both the input (commercial plywood) and the output (slip proof commercial plywood) fall under the same classification (No.44.08) and hence no duty is payable.

You are a Company Secretary in Practice. Discuss the following matters under the customs laws. They do not necessarily relate to the same client :

Gajanan & Co. has imported a plant from UK in June, 2004 paying customs duty of Rs.50 lakh. Due to some major technical problem, the plant could not be installed. In September, 2004, the supplier sent his technicians to India to resolve the problem; but no solution was found. In November, 2004, Gajanan & Co. decided to return the plant to the foreign supplier. Your client (Gajanan & Co.) has approached you for advice whether import duty already paid can be got back from the Central Government, when the plant is returned.

Jolly Ltd. had imported certain goods from USA and stored them in warehouse without payment of duty. Goods could not be cleared even after warehousing period was over and extension was not granted. Customs Officer has issued notice under section 72 of the Customs Act, 1962 demanding duty. Discuss, what is the relevant date for determination of the rate of duty.

Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has granted a stay for recovery of duty and penalty pending appeal, in case of your client Goriputra. The appeal has not been disposed off by CESTAT within 180 days. Examine the consequences and the solutions available to Goriputra in this case.

Whether the following are includible in the value of taxable service under the Finance Act, 1994 :

(i)	The cost of lubricants and coolants sold to the customers during the course of repair of motor cars.
(ii)	The air fare collected by air travel agent in respect of service provided by him.
(iii)	The commission or any amount received by the rail travel agent from the railways.