Category Archives: For Corporates


The Government of Maharashtra has issued a notification dated 31st March 2016 to public regarding increase in Maharashtra Value Added Tax 2002 (MVAT Act) and Maharashtra Tax Rules 2005 (MVAT Rules).

The said amendment will be with effect from 1st April 2016.

This notification clearly mentions amendment in MVAT rates of commodity where:

It states an increase in the rate of tax from 5% to 5.5% for goods falling under Schedule C of the MVAT Act.

Certain list of declared goods mentioned in Section 14 in the Central Sales Tax Act 1956 have remained unchanged @ 5% some of which includes iron,steel,wire rods & wires, sheets, aviation turbine fuel,coal excluding charcoal,crude oil,Jute ,kerosene oil,oilseeds,fabrics,sugar, hoops, strips and skelp, both black and galvanized, hot and cold rolled plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in rivetted condition, hides and skins, whether in a raw or dressed state.

The rate of tax on Schedule E goods has remained unchanged @ 12.5%. This schedule includes all those goods which are not included in any of the other schedules.

VAT rate for Mamography Machines for Breast Cancer,Hybrid Electric Buses and Battery operated,Handicrafts of bamboo excluding bamboo furniture,Retrofit kits used to modify the vehicles of the handicapped persons have been reduced to NIL rate of tax

VAT rate for sweet corn in a frozen state,sealed container or under a brand name except when served for consumption has been  reduced from 5.5% to NIL rate of tax.

VAT rate reduced to 5.5% for Barbed wire, wire mesh & Chain link. Sterile water for injection. Pyrolysis oil made from plastic scrape and organic waste. Repossessed motor vehicles, sold by banks and financial institutions. Pencil box, gum, glue sticks, stapler pins, tape dispenser, dusters & files. LED tube lights

The above changes shall impact the Central Sales Tax (CST) wherein goods are moving from Maharashtra to any other state of India and NO concessional rates of tax vide any declaration are availed by the dealers.

The below link (A) shows list of schedule A,B,C,D and E along with(B) MVAT Notification dated 30th March 2016  for changes in rate of tax from 5% to 5.5% and other amendments in Schedules.


(A) Tax Rate Schedule 

(B)  MVAT Notification dt 30/03/2016 

The Schedule on the website is NOT updated with the new rates, one needs to compare the schedule with the notification to decide as to what’s the change of rate for the commodity one specifically deals in? It’s a good idea to approach an expert consultant before concluding in this case on what shall be finally charged from 1st of April 2016.

For more information on the above blog please ask expert partner at [email protected]


Interest Rates slashed by Government on Small Savings Scheme

On 18th March 2016,The Government of India sharply reduced interest rates on Small Savings Schemes across the Board. The government has also announced the highest reduction of 130 basis points (1.30%)  on one- year time deposit,  as per  an office order issued by the Finance Ministry.

The move has been made to align rates of these schemes to prevailing market rates.

Recently, the government has started revising interest rates on such schemes every quarter and hence, the new rates will be applicable from April 1, 2016 to June 30, 2016.

The following table will give a bird’s eye view of the changes effected.



Existing Rate

(April 1 ,2015 to March 31, 2016)

New Rate

(April, , 2016 to June 30, 2016)


Savings Deposit




1- Year Time Deposit




2- Year Time Deposit




3- Year Time Deposit




5- Year Time Deposit




5- Year Recurring Deposit




5- Year Senior Citizen Savings Scheme




5- Year Monthly Income Account Scheme




5- Year National Savings Certificate




Public Provident Fund Scheme




KisanVikas Patra




SukanyaSamriddhi Account Scheme




The Government has termed this move to increase economy growth rate. No doubt, small investors will feel the pinch of reduced savings but looking at the overall economy, the measure will create parity between various loan facilities provided by bank since deposit rates have actually reduced over past 3-4 years. The banks will be able to reduce their lending rates as their cost of raising deposits will be reduced. The government will be able to decrease its interest burden and in effect reduce its revenue deficit.

Please feel free to write to us at [email protected] for any further queries on the above blog








JEWELLERY WAS NOT LIABLE FOR EXCISE DUTY TILL FEBRUARY 29, 2016. In #UnionBudget2016, a nominal excise duty of 1% [without input tax credit] and 12.5% [with input tax credit] has been imposed on articles of jewellery. Even for this nominal 1% excise duty, manufacturers are allowed to take credit of input services, which can be utilised for payment of duty on jewellery w.e.f 01st March, 2016.

However some doubts have been expressed by the trade and industry regarding this levy for which some clarifications has been provided by the CBEC, which are as Follows:

  1. Easy Compliance which includes on line application for registration, payment of excise duty and filing of returns and zero interface with departmental officers.
  1. The central excise officers have been directed not to visit the premises of Jewellery manufacturers.
  1. Articles of silver jewellery [other than those studded with diamonds, ruby, emerald or sapphire] are exempt from this duty.
  1. An artisan or goldsmith who only manufactures jewellery on job-work basis is not required to register with the Central Excise, pay duty and file returns, as all these obligations will be on the principal manufacturers.
  1. However, if the turnover of a jeweler during preceding financial year was more than Rs. 12 crore, he will be liable to pay the excise duty. Jewelers having turnover below Rs. 12 crore during preceding financial year will be eligible for exemption unto Rs. 6 crore during next financial year. Such small jewelers will be eligible for exemptions upto Rs.50 lakh for the month of March, 2016. 
  1. For determination of eligibility for the SSI exemption for the month of March, 2016 or financial year 2016-17, a certificate from a Chartered Accountant, based on the books of accounts for 2014-15 and 2015-16 respectively, would suffice.
  1. Further, facility of Optional Centralized Registration has also been provided. Thus, there is no need for a jewellery manufacturer to take separate registrations for all his premises.
  1. Field formations have been directed to grant hassle free registrations, within two working days of submission of the registration application. Further, there will be no post registration physical verification of the premises [online registration –].
  1. Jeweller’s private records or records for State VAT or records for Bureau of Indian Standards (in the case of hallmarked jewellery) will be accepted for all Central Excise purposes. Also, there is no requirement to file a stock declaration to the jurisdictional central excise authorities.
  1. Excise duty is to be paid on monthly basis and not on each clearance, with first installment of duty payment for the month of March, 2016 to be paid by 31st March for March, 2016.
  1. A simplified quarterly return has also been prescribed, for duty paying jewellers [ER-8].


Please feel free to drop an email to us at [email protected] / [email protected] for any further queries on the above blog.

Proposed Change in Tax deducted at source ( TDS ) rates From June 1, 2016

Under Income Tax Act,1961, every person responsible for paying specified amount to any person is required to deduct Tax Deducted at source and pay it to Central Government within specified time. It is applicable based on monitory limits and other person / payment specific payments.

The Finance Minister Mr Arun Jaitley has proposed to modify percentage and monetary limits of tax deduction w.e.f June 1, 2016.

The following table gives a gist of old and new rates applicable from June 1, 2016 and limits for deduction of TDS other than TDS on salary.

Sr. No.

Main Section



Existing Rate of TDS

Existing Threshold Limit (Rs.)

Proposed Rate of TDS

Proposed Threshold Limit (Rs.)


w.e.f. 01/06/2016



192 A

Payment of accumulated balance due to an employee









Interest on Securities

Debentures by government






Debentures by listed company








Deemed Dividend








194 A

Interest other than on Securities

For interest from post office






For other schemes







194 B

Winnings form Lotteries/Puzzle/ Game








194 BB

Winnings from Horse Race








194 C


With Individual and HUF


One Contract- 30,000


One Contract- 30,000


With persons other than Individuals and HUF


Aggregate Annual Limit- 75,000


Aggregate Annual Limit- 100,000



194 D

Insurance Commission








194 DA

Payment in respect of Life Insurance Policy








194 E

Non – Resident Sportsman and Entertainer







194 EE

Payments in respect of NSS Deposits








194 G

Commission on sale of Lottery Tickets








194 H

Commission or Brokerage








194 I


Plant and Machinery






Land, building and Furniture







194 IA

Transfer of Immovable Property (w.e.f. 01.06.2013)








194 J

Professional Fees








194 K

Income in respect of Units

For Company



To be omitted w.e.f 01.06.2016


For other payees





194 L

Payment of Compensation on Acquisition of Capital Asset




To be omitted w.e.f 01.06.2016



194 LA

Payment of Compensation on Acquisition of certain Immovable Property








194 LB

Payment of Interest by an Infrastructure Debt Fund to Non-Resident







194 LC

Interest paid by specified company to non-resident for borrowing from a source outside India







In case of any queries on above topic, feel free to drop an email on [email protected]



There are various categories of sales / purchase which are  as follows:-

Interstate Sales or Interstate Purchase

Sale or purchase of goods from one state to another state is called “Interstate Sales or Interstate Purchase”.

Example:  A of Gujarat (Seller) sells Goods to B of Maharashtra (Buyer) or vice versa

CST is levied in the above case.

What is CST?

It is central sales tax; the liability to pay the tax is on the dealer who sells the goods in the course of interstate trade or commerce (i.e. from one state to another state).

CST is levied at the turnover of the dealer, there is concessional rate or no tax is charged if Declarations forms are submitted.

What is Concessional Rate?

Concessional rate is a discount given to the dealer on the turnover.

Sales tax liability on interstate sales is @ “2%” on the turnover of the dealer or the rate applicable to the sale or purchase of such goods inside the appropriate state  under the sales tax law of that state, whichever is lower that rate is levied.

Otherwise the rate of tax would be the rate which is applicable on the goods sold within that state.

Such concession rate would be applicable if selling dealer provides ‘Form C’ to Tax Authorities as a Proof that the purchasing dealer is eligible to purchase these goods at concessional rate.

  1. Sale in Transit

An inter-State sale or inter-State purchase which is affected by transfer of document of title to the goods during their movement from one State to Another is called “Sale in Transit”. 

E.g:-A of Kolkata Places an order on B of Maharashtra for certain goods and instruct it to deliver it to C of Kerala and A of Kolkata dispatches the goods to C of Kerala.

In the above case sale of goods by A to C is affected by transfer of documents. Documents are transferred to C before goods reach Kerala & C takes delivery thereof.

In the above case Form C,Form E-I/E-II is applicable. For more details kindly click on the below link.

  1. Branch Transfer or Interstate Stock Transfer

Sometimes dealer sends the goods to his consignment agent to another state,so that the goods can be sold.

Similarly, a dealer may send the goods to his own branch/depot in another state from where such goods can be sold.

In the aforesaid cases, although goods have been transferred from State to another, the property in goods does not pass from principal to the agent .

Thus, there is no sale and consequently no CST is payable provided there was no pre-existing agreement for the sale of the goods so transferred.

Factory  at Gujarat  Goods are sent from Gujarat H.o to Mumbai  Branch at Mumbai

Above illustration shown is an interstate stock transfer

In the above case Form F is applicable please refer to the below link for more details :

  1. Intra state Sales or Intrastate Purchase

Sales or Purchase within the state is called Intrastate Sales or Intrastate Purchase.

Example : A of Mumbai sells goods to B of Pune and vice versa

VAT is levied in the above case.

  1. Import and Export

Sales or Purchase from one country to another country is called “Export” & “Import” respectively.

Custom duty is levied in the above case.

Please feel free to write to us at [email protected] for any queries on the above blog.

Declaration Forms Under Sales Tax

What is Declaration Forms?

A dealer has to issue certain declarations in prescribed forms to buyers/sellers (such as Form C,D,H,F,E-1,E-II,I).

 Dealer has to issue declarations in the forms printed and supplied by the Sales Tax authorities only.

 These forms are issued  in triplicate two. [Form D was to be issued by Government and can be printed/typed by the Government department making purchases. Now form D has been abolished w.e.f. 1-4-2007].

 What is the importance of Declaration Form?

The declaration form is required to get the benefit of concessional rate or no tax is required to be paid. If Declarations forms are not submitted with the respective sales tax department the dealer will have to pay the tax at the rate of tax which is applicable on the goods sold within that state.

Another question would arise is who would be able to transact on Declaration Forms?

The concessional rate against declaration form can be claimed if:-

  1. Sales has been made to a registered dealer.
  2. Goods sold are covered in the registration certificate (RC) of the buyer.
  3. The buyer who files the CST Return i.e the buyer has to show in his returns the CST Purchases made by him.(the buyer cannot issue declarations forms of the purchases which are not disclosed by him in return and will have to pay the tax at the normal rates).


Most often question arises which goods are eligible to be registered under (RC)?

 Purpose for which Goods can be purchased under concessional rate : 

  1. Goods as being intended for re-sale.
  2. For use in the manufacture or processing of goods for re-sale.
  3. For use in telecommunication network or mining or
  4. For use in generation or distribution of electricity or any other form of power.
  5. Container or other materials intended for the packing of goods for sale(i.e. packing material).
  6. Container or other materials used for packing of any goods mentioned in pt 1 to 5 above (i.e. Secondary packing material).

Various types of Declaration Forms are as follows:-

 “C” Form:-

 Form “C” is issued by a registered dealer (purchaser) to seller of goods in case of CST so as to charge him sales tax at lesser rate (i.e. concessional rate).

The rate of tax on interstate sales is governed by Central Sales tax Act and if the sale is made to a registered dealer of the state then the rate of tax is 2% but the registered dealer (i.e.) the purchaser have to supply C-form to the seller.

The rate of tax without C-form in case of interstate trade or commerce is equal to the rate of tax applicable in the state of the seller.

In fact C-form is the proof that the sales is made to a registered dealer of another state

“H” Form:-

Form “H” is issued by Merchant exporter to supplier and it is obligatory for the merchant exporter to export material outside India.

No Vat/CST is applicable.

In other words, H Form acts evidence that the purchased goods are only for export purpose .

Note :-Bill of lading need to be attached with H form copy as a proof that the purchased material are exported.

 “E1/E2” Form

E1 Form :-This form is issued by the dealer who makes the first inter-state sale during movement of goods from one State to another. This enables the purchaser to claim exemption from CST on the second inter-state sale during the movement of goods by transfer of documents of title.

  • Buyer (Hyderabad), B – seller (Bangalore). It is the first sale of any particular goods. Then B will issue form E1 to A.

E2 Form:- This form is issued by the second or the subsequent seller when the goods move from one state to another in a series of inter-state sales by transfer of documents of title. This form enables the purchaser to claim exemption form CST on subsequent sale of goods.

A- Buyer of original goods now seller, C- new buyer (Chennai). Here A is selling same goods again in interstate trade it is subsequent sale. Then A will issue form E2 to  C.

These forms are issued in case of Sale in transit.

 In case of sale in transit C form provisions apply to E1/E2 Form:-


X Co.(Maharashtra) place order to Y Co (Kerala)  for a material and Y Co (Kerala)  Place order for that material to Z Co. (Chennai )and inform to supply directly to X in Maharashtra .

Here X is purchaser of Y and Y is the purchaser of Z and Y asking Z to give the ownership of material to X instead of .This is sale in transit.

 Here Consigner is Z and Consignee is X, also other than C form there is E-1 and E-2 form .

 Y purchaser of Z will give C form to Z in exchange of E-1 and Y the seller of X will get C form from X the purchaser.

If X sells that material to ‘A’ in Maharashtra and give ‘A’ E-II form and he will charge 0% tax. This is to avoid double taxation. 

“F” Form:-

 Form “F” is issued against transfer of goods from one state’s godown to another state’s godown.(Within the same company) .

In other words F Form is evidence in case of Branch Transfer of goods or interstate stock transfer

 When to submit the declaration forms?

 Declaration forms can be submitted to the assessing authority within three months after the end of period to which it relates and after filing of Returns.(Forms are applied & issued on quarterly basis).

 How much number of forms to be issued?

 There are three parts of the declaration form (Original, Duplicate & Triplicate) :-Original is to be submitted to the department, Duplicate will be retained by seller and Counterfoil with the buyer.

What documents need to be submitted with Declaration Forms?


  • C Form & F Form doesn’t require any separate documents.(As now Forms are applied online, so no need to attach invoice data separately).


  • H Form -Bill of Lading need to be attached i.e mentioned in H form application.


  • E1/E2 form advisable to attach C form against which E1/E2 forms are issued.


Please feel free to write to us at [email protected] for any further queries on the above blog.


The much aggrieved real estate sector gets some relief with the #UnionBudget2016 proposed by The Finance Minister Arun Jaitely. Union Budget 2016 presented by the Finance Minister has tried to infuse confidence in the real estate market by unveiling a slew of measures to boost affordable housing.

The industry that has been in doldrums for long, facing protracted slump has been looking for some incentives to beat the downturn and banking on the government’s ambitious ‘Housing for All’ scheme by 2022.

The builders and the construction developers whole heartedly and in full fledged supported the Finance Minister for some of the measures he has taken to boost affordable housing by making the following provisions:

  • 100 per cent deduction for profits to an undertaking from a housing project for flats up to 30 square metres in four metro cities
  • Exemption of service tax for houses less than 60-metres will also benefit the real estate developers engaged in creating affordable housing in Partnership”component of PMY the Mumbai Metropolitan Region.

(Service Tax Exemption by way of construction with following 3 conditions – applicable from 01.03.2016:

  • Housing project under PMAY – Pradhan Mantri awas Yogna / HFA – Housing for All

 Additional tax deduction on interest paid for loan amount on homes less than Rs 50-lakh.  

*Condition – first time buyer) (Int benefit Sec24 Rs. 2Lac + Sec80C Principle 1.5Lac + new 50k Sec80EE)

The move would also complement the Prime Minister’s ambitious dream project of ‘Housing for All’ if the housing project is approved by the competent authority before the 31st March, 2019 subject to certain conditions which among the other things include the following :

Approval must be after 01st Jun 2016 but before 31st march 2019

  • The project is completed within a period of three years from the date of approval
  • where residential unit is allotted to an individual, no such unit shall be allotted to him or any member of his family, etc
  • built-up area of shops & other commercial establishment must be less that total built-up area


Plot of Land



Size of the residential (Individual) unit

1000 Sq Meter

Delhi, Mumbai, Chennai & Kolkatta

30 Sq meter

2000 Sq Meter

Other than above

60 Sq meter

The Finance Minister has also addressed the issue of REIT through the exemption of dividend distribution tax.

An increase in tax deduction from Rs 24,000 to Rs 60,000 for those living in rented houses will also benefit the rented flat-holder, thereby complementing indirectly the housing sector.

Many real estate builders and builders have shared a fact of compliments to the Finance Minister  for rationalisation and simplification of the tax structure that will reflect ease of doing business for the corporate sector in terms of certain processes.

Builders and real estate experts say the exemption for affordable housing projects would bring in a 15 % -20 % upside on profits after paying the Minimum Alternate Tax(MAT) tax for a real estate developer building such a project, making it easier for the developer to attract foreign and domestic investment for housing projects.

Please feel free to write to [email protected] for any further queries or issue regarding the above article.


Introduction of Presumptive taxation to professionals

Introduction of Presumptive taxation to professionals

In current scenario, income tax provides for a simplified presumptive taxation scheme for certain eligible persons engaged in certain eligible business only and not for persons earning professional income.

Now, the Finance Minister , Mr Arun Jaitley in his proposed Budget for 2016, has proposed to extend the scheme of presumptive taxation to professionals also. From April 1, 2016 onwards, professionals in the fields of legal, medical, engineering, architecture, accountancy, technical consultancy or interior decoration or any other profession notified by government having receipts of Rs 50 lakhs or less can show profit @ 50% of turnover and discharge taxes on it. A few examples of professions that are getting covered are lawyers, Company secretaries, Chartered Accountants, Cost Accountants, Writers, Actors, Interior designers, architects, etc. Such Small & Medium Enterprise ( SME ) professionals will not be required to maintain books of accounts and go through the tedious process of maintaining accounting records of expenses and for claiming deductions from income. The professionals are required only to maintain documents for revenue shown.

The professionals can take benefit of this provision and reduce their tax compliances in a big way. However, it has to be noted that in case actual profits are less than 50% of the receipts of the professional, he can pay taxes assuming 50% profit or get his accounts audited by a Chartered Accountant and show lower profit and in effect pay tax at lower amount. The professional can exercise any of the above 2 options based on his cost – value analysis.

A simple flow chart will be useful to understand the above concept.FLOW CHART

In case of any discussion required for taxation and audit matters on above matter, feel free to contact me at [email protected]


With the announcement of #UnionBudget2016 Finance Minister Arun Jaitley has proposed 2% excise duty on branded readymade garments and made-up articles of textiles of retail sale price of Rs 1,000 or more under the ambit of Central excise on immediate basis i.e with effect from 1st March,2016.

The Revised Rate will be as follows:

The amendments involving increase in the duty rates will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

  • To increase tariff value of Readymade garments and made up articles of textile changes from 30% of retail sale price to 60% of retail sale price.


  • Branded readymade garments and madeup articles of textiles of retail sale price of Rs.1000 or more changes from NIL (without cenvat credit ) or 6% /12.5% (with cenvat credit) to 2% (without cenvat credit) or 12% (with cenvat credit)

Further it is stated that in case the Owner of Trade mark is not manufacturing himself the ready-made garments but getting it manufactured from Job worker then in this case also the principle or the brand owner or merchant manufacturer shall be liable to discharge the excise duty as per rule 4 of Central Excise Rules ,2002.

Now, the Obvious question would be whether the manufacturer of Ready-Made Garment is eligible to the benefit of Small Scale Industries SSI where Excise turnover of Rs 150 Lacs is exempt? The benefit shall depend upon the turnover of the previous year. If the Previous year turnover is less then 400 Lacs then the benefit of SSI can be taken otherwise we would not be able to take benefit.

Please Note that Turnover will be Calculated at 30% of Retail price of goods cleared in previous year for calculation of turnover for SSI purpose.

Since the Excise forms very vital tax compliance a due care is to be taken for timely compliance.

Please feel free to write to [email protected] for any further queries on the above if any.



Discontinuation of Physical Filing from February 8, 2016 – RBI

Advance Remittance Form (ARF) is used by companies to report FDI inflows to RBI while a company submits Foreign Collaboration General Permission Route(FCGPR) Form for reporting issue of eligible instruments to overseas investor against the FDI inflow.

The Reserve Bank of India (RBI) on  01st February announced the banks to file forms related to Foreign Direct Investment (FDI) only online on the e-Biz portal from February 8. With a view to “promoting ease of reporting” of such transactions, RBI, under the e-Biz project of the government, has enabled online filing of three returns with RBI viz:

  •  ARF,
  • FCGPR 
  • FC-TRS 

Advance Remittance Form (ARF) is used by companies to report FDI inflows to RBI while a company submits Foreign Collaboration General Permission Route(FCGPR) Form for reporting issue of eligible instruments to overseas investor against the FDI inflow.

Foreign Collaboration Transfer of Shares (FC-TRS) Form relates to transfer of securities between a resident and a person outside India. “Based on the experience, it has been decided that beginning February 8, 2016, the physical filing of forms ARF, FCGPR and FC-TRS will be discontinued and forms submitted in online mode only through e-Biz portal will be accepted as per RBI notification.

At present, both the options (online and physical) for filing of the forms are available to users.

Based on the experience it has been decided that beginning February 8, 2016 the physical filing of forms ARF, FCGPR and FC-TRS will be discontinued and forms submitted in online mode only through e-Biz portal will be accepted.

Please find below herewith link of the notification for your ready reference.

RBI Notification

The decision to completely switch over to online filing of forms has been taken after assessing the readiness of banks to file these forms online as per notified by the Reserve Bank of India.

Please feel free to reach me at [email protected] for any further queries