Service Tax General Articles

VCES SCHEME UNDER SERVICE TAX

Date: Monday, September 30, 2013

Author: CA Madhukar N.Hiregange & CA Roopa Nayak

Synopsis: In this article we look at the newly introduced VCES scheme along with discussion on some of the issues in service tax in relation thereto. An opportunity to set right non payment of tax for the past due to lack of awareness or any other reason without the additional cost of interest and penalty. Especially meant for those who have registered but not complied with the law.

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Service Tax General Articles

Services by One Person to Another Under Service Tax Law

Date: Monday, September 30, 2013

Author: CA Madhukar N.Hiregange & CA Roopa Nayak

Synopsis: We would be examining the concept of services provided by one person to another. Normally one cannot have an income while dealing with oneself and therefore Income Tax is not applicable. Further one cannot sell to oneself. Therefore the CST/ Sales Tax laws were also clear that in sale to oneself there is no liability till the 46th amendment to the Constitution. However a deeming fiction having been introduced in the service tax law creates liability while one deals with oneself in certain circumstances. We examine the concept and its legality in light of the decision of the recent Gujarat High Court this year.

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Service Tax General Articles

ANALYSIS OF SERVICE TAX ON SUPPLY OF FOOD OR DRINK AND ACCOMMODATION AND THE KERALA HIGH COURT DECISION

Date: Monday, September 30, 2013

Author: CA Madhukar N.Hiregange & CA Roopa Nayak

Synopsis: Article 265 states that no tax shall be levied or collected without the authority of law. Further article 246 governs the subject matter of the laws made by the parliament and by the legislature of states. The matters are listed in the seventh schedule to the Constitution.

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General - Indirect Taxation

Departmental Interaction

Date: Friday, July 19, 2013

Author: Team Hiregange

Synopsis: Though the law and procedures under both service tax and central excise are made user friendly, assessee are still finding difficulties in interaction with the department officials. This may be because of lack of awareness of related law or the psychological image about the department.

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Service Tax General Articles

Best Practices - Reply to Show Cause Notice

Date: Friday, July 19, 2013

Author: Madhukar N. Hiregange

Synopsis: The service tax law has resulted in a large number of disputes [ more than 1 lakhs + pending as on date] mainly due to the fact that the law is changing frequently and drafting has been seen to have many loose ends.

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Service Tax General Articles

Service Tax Audit

Date: Wednesday, May 01, 2013

Author: Hiregange & Associates

Synopsis: The world today is moving to huge concerns in India as well. Turnovers of tens of thousands of crores are quite common. The owners and the management are separate and distinct. In the days of concentrating on core competencies, specialized audits are necessary.

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Service Tax General Articles

Legal Decisions Vs Departmental Circular

Date: Wednesday, May 01, 2013

Author: Hiregange & Associates

Synopsis: In the Indirect Tax Bracket net, there would be plethora of case laws passed by various Tribunals, High Courts and Supreme Court. Further, the CBEC also clarifies the issues to the Industry by way of Circular, Trade Instructions. There may be a scenario, where there would be contradictory view between the Legal Decisions and Departmental Circular. In such a case, which will prevail whether departmental circular or the legal decision.

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Service Tax General Articles

Voluntary Compliance Encouragement Scheme, 2013

Date: Wednesday, May 01, 2013

Author: Madhukar N Hiregange FCA & V.S.Sudhir FCA

Synopsis: Service tax is a new emerging law and there has been lack of clarity on the applicability of the service tax, among the trade, departmental officer and also among the consultants, this would have left lot of assesse not being compliant although has no intention to evade the payment of service tax.

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Service Tax General Articles

A Look at the Budget 2013

Date: Wednesday, May 01, 2013

Author: Hiregange & Associates

Synopsis: Finance Bill, 2013 has been submitted to Parliament by the Union Finance Minister, Mr. P. Chidambaram on 28th February, 2013. We bring you the highlights of the changes proposed in area of Service Tax.

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Service Tax General Articles

Impact of service tax on Film Industry

Date: Wednesday, October 31, 2012

Author: CA. Rajesh Kumar T R, CA. Radhika Maheshwari & CA. Gaurav Shah

Synopsis: The negative list regime sets out that whatever is NOT CLEARLY excluded/ exempted is liable to service tax. A substantial expansion from the earlier limited positive list. The plea of not knowing qwould not cut much ice in this regime as one would have to demonstrate how one is in negative list or exempted. In this article we have tried to ascertain the impact service tax would have on the Film Industry and persons associated with it.

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Service Tax General Articles

Right to Use-Deemed Sale or Service?

Date: Tuesday, October 30, 2012

Author: CA. Sudhir V.S. & CA. Monalisa Khuntia

Synopsis: Double Taxation of a single transaction is a chronic challenge in indirect taxes in India for some time now. The challenge arises because a particular transaction involves two aspects i.e., Sale as well as Service. In other words a particular transaction is deemed both to be a supply of goods in terms of the State Act / law and also as provision of service as per Central Service Tax law. Another equally important challenge is the double non taxation where a transaction is neither taxed under State Act / law nor Central Service Tax Act. Transfer of right to use is one of such challenges where there is levy of VAT and Service Tax on the same.

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Service Tax General Articles

Taxation of Works Contract under Negative List based Taxation

Date: Friday, October 12, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia

Synopsis: The new service tax regime based on Negative list has come into effect from 1st of July 2012. Though there are number of aspects and issues under the same, one of the main issues and concerns is about the works contract. This article discusses the valuation methodology for works contract w.e.f. 01.07.2012.

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Service Tax General Articles

Transition under Service Tax for Construction Contracts

Date: Thursday, October 11, 2012

Author: Team Hiregange, Hyderabad

Synopsis: The taxation laws in the area of real estate under service tax have been vague from the inception. There are myriad issues which are tried to be resolved by issuing circulars and thereafter circulars issued to clarify the previous circulars making the issues and law more complicated rather than clarificatory. Apart from all these issues, the paradigm shift in the Service Tax law from selective approach to Negative list adds additional burden to the tax payer in terms of adding uncertainty and unfairness.

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Service Tax General Articles

Approach to Service Tax Audit

Date: Wednesday, October 10, 2012

Author: CA Madhukar N. Hiregange

Synopsis: In the business world today large size is not longer an exception. Turnovers of thousands of crores are quite common. Also today the owners and the management are separate and distinct. In the days of concentrating on core competencies, specialized audits are necessary for providing comfort to the stakeholders.

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Empowering Students

Choosing A Coaching Class

Date: Friday, October 05, 2012

Author: CA. Madhukar N Hiregange

Synopsis: The objective of any profession of having quality students coming out of the system is one of the important ones. The profession expects that the knowledge requirements are obtained by going through the curriculum along with practice. In the CA course, questions especially at the final level test the understanding of the concepts and the application of the same. The potential employers are also interested in testing the same prior to taking on the professionals in their organizations.

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Central Excise Articles

Approach to Central Excise Audit

Date: Friday, September 28, 2012

Author: CA Madhukar N. Hiregange

Synopsis: The Business world in India is moving in a rapid phase. The owners and management are different sets of people and both have exposure to risk. As India is the 2nd largest populated country in the world, the Business world in India does not primarily require depend on the foreign markets. Indian Business world requires facing Technological changes, effect of recession /slow growth in developed countries, Inflation, Fluctuation in International Exchange rates, political system and developments in the Indian Taxation especially under Indirect Tax.

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Empowering Students

Laugh Out Loud (LOL)

Date: Thursday, September 27, 2012

Author: CA. Dhanashree D. Prabhu

Synopsis: Health is wealth goes an old adage. Good health is as much about mental fitness as it is about physical fitness. In fact, if one is mentally strong and fit, physical fitness will follow. It’s all in our mind to live the way we want to. One way to be mentally fit and in turn physically, is LAUGHTER. Truly, laughter is the best medicine!

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Central Excise Articles

Approach to Understand Central Excise

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange FCA, DISA

Synopsis: This paper provides the bird's eye view of the law and practice of central excise and is focused on the individual who wishes to understand the basics. The definitions, case laws, explanations, notifications that are important are available in the excise manual/ commentaries by various authors.

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Central Excise Articles

Cenvat Credit Rules 2004 – Removal 'As Such'

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange FCA, DISA

Synopsis: The Cenvat Credit Rules 2004 enable a manufacturer under central excise to avail the credit on “input services” which are used directly or indirectly in relation to the manufacture of the final products and clearance of the same from the place of removal. A large proportion of the services consumed by manufacturers therefore would now be an input service. Similarly the service provider is eligible for the cenvat credit on the inputs and capital goods used for providing the output service.

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Central Excise Articles

Job Work Under Central Excise

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange (FCA, DISA), Prateek M (B.Com, ACA)

Synopsis: Job work is one of the important aspects that a manufacturer registered under Central Excise should be familiar with not just because it enables him to plan his processes in order to optimise the benefits available under the Central Excise Act, 1944 but would also enable him to cut costs on his manufacturing. This is so as the processes which pose problems or which are not cost effective at his end [ due to economies of scale] can be sub-contracted or delegated to another manufacturer or processor who is referred to here as the job worker. Many a time, the job worker may be more efficient both in terms of the quality and cost as compared to the main manufacturer due to pursuance of core competencies. Most of the big manufacturers in fact make very good use of this concept and assign processes to more than one vendor which enables them to cut down on manufacturing costs.

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Central Excise Articles

Rule 6 Cenvat Credit Rules 2004

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange (FCA, DISA), Prateek M (B.Com, ACA)

Synopsis: Rule 6 of Cenvat Credit Rules 2004 is perhaps one of the most important rules from the point of view of a manufacturer of both dutiable and exempted goods and a service provider who provides both output as well as exempted services for the simple reason that the said rule contains and exemplifies the core concept of cenvat credit and that is denial of cenvat credits of excise duties paid on inputs and service tax paid on input services used for exempted activity.

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Service Tax General Articles

New Service Tax Regime & Concept of Negative list

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange

Synopsis: Every year Budget introduces amendment in various tax laws with the aim of rationalization in the tax regime of the country. Budget 2012 in the same row came out with various amendments in direct and indirect laws.

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Service Tax General Articles

Budget Updates 2012

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange

Synopsis: The term 'budget' is derived from the French term "bougette" meaning purse. Thus budget literally is keeping the fiscal plans in a wallet. It is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending.

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Service Tax General Articles

Declared Services – An Analysis

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange, CA. Dhanashree D. Prabhu

Synopsis: Every year Budget introduces amendment in various tax laws with the aim of rationalization in the tax regime of the country. Budget 2012 in the same row came out with various amendments in direct and indirect tax laws.

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Service Tax General Articles

Overview Of Service Tax Law

Date: Friday, August 24, 2012

Author: CA. Madhukar N.Hiregange, CA. Dhanashree D. Prabhu

Synopsis: Service tax was being collected in India 3000 years back for a plethora of services some of them being ferry tax, betting tax, courtesans, and many others. Initially 3 services were brought into the net, which expanded to many folds and today the erstwhile conservative or 'positive list' approach of taxing the services has been done away with and revenue augmentation and comprehensive 'negative list' manner of taxing services has been adopted. This is in sync with the developed nations of the world and a step towards GST, which is proposed to subsume the wide gamut of indirect taxes and simplify things.

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Service Tax General Articles

Place Of Provision Of Service Rules, 2012

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia

Synopsis: Under earlier method of taxation (positive list based) the services which was provided in India was taxable. Section 66A was introduced to tax services which was provided from outside India and received in India (commonly known as import of services). At same time there was relaxation from payment of service tax for services considered as Export of services in terms of the conditions set out in Rules.

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Service Tax General Articles

Point of Taxation Rules, 2011

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia

Synopsis: At the outset, we would be examining the law as it stood prior to the introduction of the Point of Taxation Rules .The service tax levy would be attracted at the time of provision of taxable services and crystallize at the time of receipt of the consideration either in full or in part. However where any advance was received for the service to be provided in future, the point of levy and crystallization of levy happened at a single point of time. This is because the taxable service definition as per Section 65(105) read as under-"taxable service" means any service to be provided or to be provided. The services to be provided were included within scope of taxable service by the Finance Act, 2005 wef 16.6.2005. Thus the levy covered even the services to be provided within its scope.

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Service Tax General Articles

Principles of Classification - Service Tax

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia

Synopsis: Service Tax was introduced for the first time in the year 1994 through insertion of Chapter V of Finance Act, 1994. There is no Service tax Act as such. The services were earlier classified as per section 65A of the Act. Section 65A provided for principles for classification of service specified in erstwhile section 65. However, in the Finance Act, 2012, radical changes have been made and now service tax law has done away with the service specific description of services.

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Service Tax General Articles

Reverse Charge and Joint Charge Under Negative List Based Taxation

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia

Synopsis: The new service tax law based on negative based taxation is effective from 1st of July 2012. Though there are number of aspects and issues under the same, one of the main issues and concerns is about the reverse charge and joint charge mechanism. This article discusses the concept for this mechanism w.e.f. 01.07.2012.

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Professionals Value Pack

Note On Writing A Good (Original) Article

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange

Synopsis: A students or professional who takes up writing ends up with several advantages...

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Professionals Value Pack

Self Motivation – A Key To Success

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: In our professional or personal lives we have a number of wants including those we wish to achieve. Wanting is a passive exercise which could be equated to wishful thinking. Motivating oneself to do that is self motivation.

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Professionals Value Pack

Note On Public Speaking

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: The fear of public speaking is considered to be among the top ten phobias. In ancient Greece and Rome oratory was studied along with mathematics and science as an essential skill.

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Professionals Value Pack

Profession Without Bribes- Is it Possible?

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: In India we have seen that the taxmen are becoming very demanding as time passes. Many areas where hitherto there was no corruption, are now full of this disease. The need to meet the revenue targets set by higher ups adds to the effort of such officers to get their "pound of flesh".

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Professionals Value Pack

Delegation – A Key To Success

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: Many of us, CAs in practice as well as employment, are very busy and find it difficult to achieve a work-life balance. We do all the work ourselves for a variety of reasons. We have no time for recreation, family or training ourselves. Our bosses/ clients are satisfied with our work, but we wish we had a little more time. There are a lot of jokes on our lack of humour and creativity.

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Professionals Value Pack

Competence – Fundamental To A Professional

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: Many a times, we are surprised that a client who was unwilling to pay a small fee for a service is willing to pay a large amount to another professional for a work which involves shorter time. This could be by reason of the perception of the professional or his firm in the eyes of the client. It could also be due to the fact that the professional provides the service diligently, considering the latest practices/ legal position while following the current technical and professional standards. That is to say, he or his firm is more competent and therefore commands more respect as well as fees. Professionalism is equally important to one in employment as the competent one would progress faster and command respect of his peers and bosses.

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Professionals Value Pack

Auditors or Articles - Effective Listening/ Learning

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: Audit is a word derived from the Latin word – "auditus" which means hearing which in the past was analogous to listening. In ancient times in India, Egypt audit existed. The accounts would be heard by a competent, highly regarded confidant of the king. The auditor would listen for inconsistencies, aberrations, mathematical accuracy, past and present comparison and the credibility of the person offering the statement and pass the accounts or require further investigation.

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Professionals Value Pack

Client Focus – A Key To Success

Date: Friday, August 24, 2012

Author: CA. Madhukar N. Hiregange

Synopsis: It is not uncommon to hear that the client is unwilling to pay the fees or delays the same inordinately. Even that all services in all taxes, advisory is all in one lump sum. This appears to be more in the moffusil locations. It is the view of the paper writers that the more the value we offer the clients, the same is bound to be remunerated quite happily.

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Empowering Students

Are You Left With Your Right Brain?

Date: Friday, August 24, 2012

Author: CA. Dhanashree D. Prabhu

Synopsis: Does that mean, do you use your right brain effectively like your left brain? Or do you use your right brain at all, due to which it is extinct or not left? Well, it means both!

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Empowering Students

CA – Studies – Exams

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange FCA

Synopsis: The C.A. course is one of the least expensive and most respected. Different updates are provided so that students get new subjects to learn as time changes and with time business needs also undergo a change. It is because of this that the ICAI focuses on computer training for its article students and updates courses with new compliances like US GAAP (for Final course students) and VAT (for PCC) It does not have an all work and no play philosophy as a result of which student study circle meetings, student conferences, elocutions, sports meets are held by different regional offices. Normally depends on the initiative of the student leaders. All this makes a complete personality CA.

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Empowering Students

How To Excel In CA Examination

Date: Friday, August 24, 2012

Author: Madhukar N Hiregange FCA

Synopsis: Every July and January a large number of students who have written the CA examination either at the IPCC level or the Final level wonder what happened and why they have not been successful.

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Empowering Students

Importance Of Proper Articleship

Date: Friday, August 24, 2012

Author: CA Madhukar N. Hiregange, CA Monalisa Khuntia, CA Gaurav Shah

Synopsis: The Chartered Accountancy course in India is amongst the best of its kind in comparison to the courses offered in other countries. Also, it is rated as one of the most difficult professional courses among all other streams of education in the country.

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General - Indirect Taxation

IMPORTANT CONCEPTS IN INDIRECT TAX

Date: Monday, September 12, 2011

Author: Madhukar N Hiregange

Synopsis: The tax is the price which we pay for a Civilised Society- Justice Holmes of US Supreme Court. In a civilised society a citizen demands law and order, basic infrastructure, social/health services etc., and for meeting his demands Government collects funds in various forms from various sources and indirect taxes is one of the main source of such revenue to the Government.

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Professionals Value Pack

Easy Steps To Drafting An Effective Opinion

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Firstly ,there should be a clear idea of what the client is doing, what are the products /services or processes involved.

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Service Tax General Articles

SERVICE TAX BUDGET UPDATES 2011

Date: Friday, March 04, 2011

Author: Madhukar N. Hiregange , Rajesh Kumar TR & Sudhir Vs

Synopsis: SERVICE TAX BUDGET UPDATES 2011 - PROPOSED NEW SERVICES

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Karnataka VAT Articles

Introduction to KVAT

Date: Monday, November 01, 2010

Author: Madhukar N Hiregange

Synopsis: The concept of VAT (Value Added Taxation) was first implemented in France in 1954.More than 130 nations have embraced VAT beneficially. In India itself the adopting of VAT by Haryana has given it an edge and at the same time its revenue has also gone up. VAT is universally accepted and its principals ensure smooth tax collections as at each stage tax on the value addition only is to be paid.

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General - Indirect Taxation

Tax Planning under Indirect Taxation

Date: Thursday, February 18, 2010

Author: Madhukar N Hiregange

Synopsis: Note on Tax Planning under Indirect Taxation

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General - Indirect Taxation

Cascading Effect of Tax in India

Date: Thursday, February 18, 2010

Author: Madhukar N Hiregange

Synopsis: The purpose of this article is to throw light on the cascading effect of taxation present in India and its impact and the possible remedy for the issues arising from the same. The main objective of any taxation in any part of the world is obviously not to levy tax on taxes or in simple words to avoid cascading effect. Cascading effect of tax is one of the major distortions that had crept into Indian taxation. In India, taxes are multi-layered as the central Government levies taxes like excise duty, service tax and central sales tax and State governments levies taxes like VAT/sales tax, entry tax, state excise, octroi etc. However, the fact that Indian Government is now moving towards eradicating this problem by adopting GST in a few years time cannot be overlooked. Some major developments took place in this regard in India in the recent past. Some of them are introduction of Value Added Tax in states by phasing out sales tax, decision taken to reduce the central sales tax over a period of time and phase out the tax by the year 2010 and most importantly the proposition made by the Finance Minister while presenting the budget 2006 to introduce Goods and Service tax with effect from April 2010. It is expected that this date may not be practicable and may have to be extended by a few years.

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General - Indirect Taxation

Representation on Specific Issues

Date: Tuesday, February 24, 2009

Author

Synopsis: This exhaustive notation from our side covers the issues which have been bought to our notice or those where there is a doubt in the minds of the officers/ tax payers. These suggestions would also assure the tax payer that his interests are being emphasized and trust is being reposed in him to pay his just taxes. Issues which have resulted in litigation which could have been avoided had the provisions/ instructions been clear have also been included.

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Karnataka VAT Articles

Common Errors Expected in K-VAT

Date: Thursday, February 19, 2009

Author: Madhukar Hiregange

Synopsis: The dealer or manufacturer or the professional either advising the client or conducting a management audit, internal audit, K-VAT audit, inputs/ capital goods set off audit, valuation audit, due diligence would be better equipped when he/ she is aware of the possible common errors by manufacturers and traders which could have an impact on the costs in case of errors. The saying “forewarned is forearmed” is apt in this circumstance.

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Karnataka VAT Articles

Overview of K-VAT Law

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange

Synopsis: Karnataka Value Added Tax is a tax on sale of goods. The KVAT law provides for setting off of the tax paid on inputs (goods purchased) against the tax payable on sale of goods. This has been done in order to avoid the cascading effect of taxes. This concept was earlier used in Central Excise as Modvat and subsequently as Cenvat Credit scheme.

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Contact Us

Bangalore:

Hiregange & Associates
1010, 1st & 2nd Floor (Above Corporation Bank)
26th Main, 4th T Block, Jayanagar
Bangalore - 560 041
Phone - 080 - 41210703 / 080 - 32489235
               / 080 - 26536405

Hyderabad:

"Basheer Villa"
H.No.8-2-268/1/16/B, 2nd Floor,
Sriniketan Colony, Road No.3,
Banjara Hills, Hyderabad - 500034.
Phone - 040-23606181


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