VAT Refund In SEZ (Karnataka)

Normally there would be zero rating or exemption provided for supplies to SEZ. IN case they have paid the VAT for some reason the same would certainly be refundable.

Retention Amount

Friends, treatment of retention money in both of scenraios will depend upon the underlying agreement. Typically renetntion money is 10 percent (which can be less or more than it) of the contract value and is dedcuted from all the payments to be made to the contractors against the certified work. Retention money is a credit balance payable to contractor upon finalization of satisfied completion and performance of work. It is normally paid to contractor after one year of completion of contract work. However, this will again depend upon agreed terms.

If the contractor does not complete the work or the work performed by him is not satisfactory, the retention money may not be paid to him depending upon agreed terms. In such case, it can be kept as a liability in some "sundry liabilities" account and added back to profit and loss account as other income. Normally people keep the liability for 3 years and then add it back as income. This is done so that no issue arises in taxation as tax laws require adding back after 3 years. Other recoveries, damages or legal proceedings, or arbitration etc, everything will also depend upon the agreement and then legal rights under the specific circumstances.

If the work done is satisfactory, as per requirement, is certified and completed, the amount retained as retention money will keep on standing as liability in the books of account until the payment date AS PER AGREED TERM arrives. On which date the liability will be paid to the contractor. Remember, amount to be retained, retention period, payment methodologies, all dependd upon agreement with contractor.

ITC Company Finance interview questions with answers

majorly they ll ask all abt statutory compliences like sales tax , entry tax, central excixe returns, service tax, TDS and Customs duty,,,,,,,for those statutory compliences i have clearly written on my blog, You please refer my previous posts on my blog....

Difference between net present value and internal rate of return:

• NPV is calculated in terms of currency while IRR is expressed in terms of the percentage return a firm expects the capital project to return;

• Academic evidence suggests that the NPV Method is preferred over other methods since it calculates additional wealth and the IRR Method does not;

• The IRR Method cannot be used to evaluate projects where there are changing cash flows (e.g., an initial outflow followed by in-flows and a later out-flow, such as may be required in the case of land reclamation by a mining firm);

• However, the IRR Method does have one significant advantage -- managers tend to better understand the concept of returns stated in percentages and find it easy to compare to the required cost of capital; and, finally,

• While both the NPV Method and the IRR Method are both DCF models and can even reach similar conclusions about a single project, the use of the IRR Method can lead to the belief that a smaller project with a shorter life and earlier cash inflows, is preferable to a larger project that will generate more cash.

• Applying NPV using different discount rates will result in different recommendations. The IRR method always gives the same recomendation.


Before going to interview have a look at working capital management nad Ratio analysis,,,,ensure that all ratio's should be covered with formula's

Finding Value of Closing Stock from Sales

We may be able to ascertain what is left out if we know what has been sold. This logic may be applied in finding the value of closing stock. However, to know this, we need to ascertain the value of cost of goods sold.
1.Gross Profit = Sales − Cost of Goods Sold

2.Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses − Closing Stock

3.Gross Profit = Sales − (Opening Stock + Purchases + Direct Expenses − Closing Stock) [From (i) and (ii)]
= Sales − Opening Stock − Purchases − Direct Expenses + Closing Stock

4.Closing Stock = Opening Stock + Purchases + Direct Expenses + Gross Profit − Sales [From (iii)]
To use this relation to obtain the value of closing stock, we need the information relating to Gross Profit. All other information in this relation is readily available from the accounting records.

Purchases and Sales journal entries:

Purchases:

Purchase:
To Party/Vendor Cr
By Raw materials Purchases Dr
By Vat(Input) Dr
Purchase Returns:
By Party Dr
To Raw materials Purchases Cr
To vat

Sales:

By Customer Dr
To Local/Interstate sales Cr
TOCentarl Excise(Output)10% cr
TO Edu Cess (Output) 2% cr
To Sec.Edu cess( Output) 1% cr
To Vat/ Entry Tax cr

Sales Returns:To Customer Cr
By Local/Interstate sales Dr
By Centarl Excise(Output)10% Dr
By Edu Cess (Output) 2% Dr
By Sec.Edu cess( Output) 1% Dr
By Vat/ Entry Tax Dr


Accounts Receivables and Payables differences:

Accounts recevables:

Accounts receivable are amounts a company has a right to collect because it sold goods or services on credit to a customer. (Sundry Debtors).
Accounts receivable are assets.

Accounts payable :

Accounts payable are amounts a company owes because it purchased goods or services on credit from a supplier or vendor.(Sundry Creditor).
Accounts payable are liabilities

Due Dates for Statutory Compliances Filing:

CENTRAL EXCISE PLA DEPOSITE- 31st of everymonth

Central Excise ER1 Returns- 10 th of everymonth

Serveice Tax Monthly Returns- 5th of every month

TDS ( Tax Deduction at Source)- 7th of everymonth

TDS -Quartly Returns----
1st Q-Apr to June- Due date-15th of July
2nd Q- July to Sept- Due Date- 15 Th of Oct
3rd Q- Oct to Dec- Due Date- 15th of Jan
4th Q- Jan to Mar- Due Date 15 Th June


ESI-21ST of everymonth

Sales Tax(VAT)- 20 of everymonth
Entry Tax- 20th F EVERYMONTH

Professional Tax- 20th of everymonth


Providend Fund- 14th of everymonth

Service tax - Budget 11

► No change in the effective service tax rate of 10.3%.

► Service tax extended to services by air conditioned
restaurants having liquor license and to short term
accommodation in hotels.

► Scope of seven existing service categories expanded,
including life insurance service, legal service, health
service and commercial training and coaching service.

► Interest for delayed payment of service tax increased to
18% a year and penalty provisions amended.

► Restrictions on Cenvat credit on input services prescribed
in the case of works contractors (availing composition
scheme).

► Outright service tax exemption for input services “wholly
consumed” in a SEZ, linked with Export Rules.

► Point of Taxation Rules, 2011 introduced, deeming the
time of provision of service to be the date of provision of
service or date of invoice or date of payment, whichever
is earlier.

► Performance based criteria for determining export of
“credit rating agency services”, “market research agency
services”, “technical testing and analysis services” and
“transport of goods by air/ road/ rail services” changed
to “location of recipient of service”.

► Definition of “input service” for Cenvat credit purposes
substituted. Services provided for construction of
building or civil structure, outdoor catering, life/ health
insurance services not to be considered as input service.

► “Exempted services” to include trading. For the purposes
of availment of pro rata Cenvat credit, value of trading
will be the difference between sale price and purchase
price of the goods traded.

► Banking companies or financial institutions obligated to
pay an amount equal to 50% of Cenvat credit availed. For services related to life insurance or management of ULIP,such amount to be equal to 20% of credit availed.

► Provision relating to availability of full Cenvat credit on
specified services under Rule 6(5) of Cenvat Credit Rules
deleted.

Excise duty - Budget-11

► Peak rate of duty maintained at 10%. Basic duty rate
increased from 4% to 5% to align with state VAT rates.

► AED under AED (GSI) removed on sugar, textile and
textile products to enable states to levy VAT.

► Duty of 1% (without input Cenvat) imposed on 130 items,
which were earlier exempted. For specified items, option
provided to avail credit and discharge duty at 5%.

► Exemption to packaged or canned software (from value
that represents transfer of right to use) provided to cover
supplies made other than under MRP assessment.

► Interest rate for delayed payment of duty increased from
13% to 18% with effect from 1 April 2011 and penalty
provisions amended.

► Input and input services redefined to exclude specified
goods and services. Exempted services to include trading
“trading” for the purposes of computing credit reversal.

► Definition of capital goods amended to include goods
used outside the factory for generation of electricity for
captive use.

►Rule 6(5) of Credit Rules which specified input services
for full Cenvat credit availability (unless used exclusively
for exempted operations), deleted.

Income-tax - Budget-2011

► Basic exemption limit for individuals increased to
INR 180,000 (for resident women below the age of 60
years exemption limit retained at INR 190,000).

► Age limit for qualifying as senior citizen reduced from 65
years to 60 years and basic exemption limit increased to
INR 250,000.

► Basic exemption limit of INR 500,000 applicable for
senior citizens of the age of 80 years or more.

► Surcharge on domestic companies reduced from 7.5% to
5%.

► Surcharge on foreign companies reduced from 2.5% to
2%.

► Basic rates of corporate tax remain unchanged for both
domestic and foreign companies.

► Activities in the nature of trade, commerce or business or
any related activities, pursued for advancement of object
of general public utility is “charitable purpose”, if annual
receipts from such activities do not exceed
INR 2.5 million (previous limit INR 1 million).

► Specified allowances and perquisites of Chairman and
Members of the UPSC are exempted.

► Exemption provided to specified income of a notified
body or authority or trust or board or commission set up
for regulating or administering an activity for the benefit
of general public, provided it is not engaged in any
commercial activity.

► Weighted deduction for contributions made to national
laboratory or a university or IIT or a specified person for
scientific research, increased to 200%.

► Investment linked tax deduction extended to taxpayers
engaged in developing and building affordable housing
projects under a scheme framed by the Central
Government or a State Government or in production of
fertilizers in India.

► Contribution made by an employer towards a notified
pension scheme allowed as a deduction (restricted to 10%
of the salary of employees).

► Tax holiday sunset clause for power sector extended to
31 March 2012.

► Tax holiday for undertakings engaged in commercial
production of mineral oil will not be available for blocks
licensed under a contract awarded after 31 March 2011.

► Deduction in addition to limit of INR 100,000 specified
under section 80CCE available to employees in respect of
contributions (upto 10% of salary) made to notified
pension scheme by the Government or any other
employer.

► MAT rate increased from 18% to 18.5% of book profit
(plus applicable surcharge and education cess).

► Income of SEZ developers and units will be subject to
MAT.

► Dividends declared by SEZ developers will be subject to
DDT.

► Introduction of AMT for LLPs at 18.5% (plus education
cess) of the adjusted total income. AMT credit allowed to
be carried forward and set off against future income-tax
liability for a period of ten years.

► Due date for filing the return of income by a company
which is required to report its international transactions
in Form 3CEB is extended to 30 November.

► Notified class or classes of persons exempted from filing
the return of income.

► Time limit prescribed for completion of assessment and
reassessments (including search assessments) to exclude
time taken for obtaining information from foreign tax
authorities under agreement for exchange of information
or six months, whichever is less.

► For determining ALP of international transactions,
instead of a 5% variation, the allowable variation will now
be such percentage as may be notified by the
Government.

► TPOs granted power of conducting a survey.

► Transactions with persons located in a NJA brought
within the purview of TP provisions.

► Transactions with a person located in a NJA subject to
certain disallowance/ taxability and higher withholding
tax under certain circumstances.

► The limit for making application before Settlement
Commission is reduced from INR 5 million to INR 1 million
in certain cases.

► Settlement Commission empowered to rectify its order
passed pursuant to the application before it, within a
period of six months from the date of the order.

► Non residents having LOs in India required to file a
statement, giving details of the activities carried out by
the LO, within 60 days from the end of the financial year.

► Revenue authorities empowered to make enquiries and
investigate for collection of information on requests
received from the Revenue authorities outside India,
pursuant to a double taxation avoidance agreement
entered into between India and the respective country.

► Income from infrastructure debt funds notified by the
Central Government will be exempt.

► Interest received by non residents from notified
infrastructure debt funds taxable at 5% (plus applicable
surcharge and education cess).

► Rate of tax on income distributed by mutual funds (other
than equity oriented funds) to a person other than
individual or HUF, increased to 30% (plus applicable
surcharge and cess).

► Dividend received by an Indian company from subsidiary
foreign company will be taxed at the rate of 15% (plus
applicable surcharge and cess), on gross basis.

► Deletion of scheme of DIN for correspondence with tax
authorities.

New Income Tax Return Forms

http://www.incometaxindia.gov.in/download_all.asp