Procedure to be followed by Special Auditor for conduCting Special Audit under Section 58A of the DVAT Act, 2004

Circular No. F/V Audit/Spl. Audit/2012/4231-39

Dated : 19/12/2013

1. Special Auditor should always mention the name of the dealer, along with its TIN, whose accounts are to be audited and the period of Audit in the covering letter in all communications made in respect of that dealer.

2. The procurement of documents required for Audit would be the joint responsibility of the Special Auditor and the concerned Asst. Commissioner/VATO. In case of difficulty in obtaining the documents, the Special Auditor shall immediately get in touch with the concerned Additional/Joint Commissioner. If required a legal notice will be issued by the Additional/Joint Commissioner to the dealer who shows reluctance in furnishing the documents within due time.

3. Preliminary discussions between the Special Auditors and the dealer can be held either at the dealer's premise or at the Office of the Addl. Commissioner.

4. Special Auditors are permitted to visit branch offices/back up offices of the dealer for audit verification.

5. During the course of Audit, if there are any queries regarding the classification of goods, taxability or the rate of tax etc. the same may be brought to the notice of the concerned Addl. Commissioner (Zone) and the Addl. Commissioner (Audit) would get them clarified before the submission of final report.

6. All correspondences to the dealer shall also be through email and a copy of the same shall be marked to the zonal Addl. Commissioner and also to the Addl. Commissioner (VAT Audit).

7. Special Auditor shall brief the Addl. Commissioner (Zone) and the Addl. Commissioner (Audit) on any important development/detection during the audit.

8. Special Auditor shall submit a detail audit report in Form AR-l and shall cover various risk parameters of the dealer provided by the Department. In addition, the auditor shall point out any other significant adverse observations recorded during such audit. Three copies of report shall be submitted (i) Addl. Commissioner (Zone) (ii) Addl. Commissioner (Audit) and (iii) Asst. Commissioner (Ward).

9. Special Auditor may have to make a presentation on his findings before the Commissioner.

10. Special Auditor will provide necessary professional help during default assessment proceedings by the Asst. Commissioner. .

11. The Special Auditors shall submit bill in consonance with Circular dated 06.12.2013 of the Department to the concerned Zonal Addl./Joint Commissioners who would verify and forward the bill to the Addl. Commissioner (Audit).

12. The assignment of further audit work to the Special Auditor would depend on the quality and timeliness of his report.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in

Clarification With Regard to Applicability of Section 182(3) of The Companies Act, 2013

Circular no. : 19/2013

Dated : 10/12/2013

Ministry has received representations seeking clarification on disclosures to be made under section 182 of the companies Act, 2013. The same have been examined with the coming into force of the scheme relating to 'Electoral Trust Companies' in terms of section (24AA) of the Income Tax Act, 1961 read with Ministry of Finance Notification No. S.O.309(E) dated 31st January, 2013 it will be expedient to explain the requirements of disclosure on part of a company of any amount or amounts contributed by it to any political parties under section 182(3) of the Companies Act, 2013.

It is hereby clarified as under;

 I. Companies contributing any amount or amounts to an Electoral Trust Company' for contributing to a political party or parties are not required to make disclosures required under section 182(3) of Companies Act 2013. It will suffice if the Accounts of the company disclose the amount released to an Electoral Trust Company.

 II. Companies contributing any amount or amounts directly to a political party or parties will be required to make the disclosures laid down in section 182(3) of the Companies Act, 2013.

 III.  Electoral Trust Companies will be required to disclose all amounts received by them from other companies/sources in their Books of Accounts and also disclose the amount or amounts contributed by them to a political party or parties as required by section 182(3) of Companies Act, 2013.

This issues with the approval of competent authority.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in

DVAT: DISPOSAL OF REFUNDS

Notification No:F.3(378)/Policy/VAT/2013

Dated: 25.11.2013

All dealers whose refund claims are pending and their returns for the year 2009-10 onwards involve central sale/sock transfer against statutory forms are hereby directed to file information online for the pending statutory forms/declaration in Block R 10 of CST return Form 1 by 30thNovember, 2013 for the year 2009-10 and by 31st December, 2013 for the year 2010-11, 2011-12 and 2012-13 in order to help process the refund claims expeditiously. Receipt of the information so filed can be obtained from the website after filing the information.

If no such information is received by the due date, the refund claims will be processed on the basis of latest information of statutory forms available with the Department.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in

Clarification On VCES Scheme

Circular No.174/9/2013 – ST

Date: 21st November, 2013

In the recently held interactive sessions at Chennai, Delhi and Mumbai, which were chaired by the Hon’ble Finance Minister, the trade had raised certain queries and also expressed some apprehensions. Most of these issues have already been clarified in the aforementioned circulars/FAQs. Certain issues raised in these interactive sessions, which have not been specifically clarified hitherto or clarified adequately, are discussed and clarified as below.

S.No.	Issue raised	Clarification
1	An instance was brought to notice wherein a declaration was returned probably on the ground that it was incomplete.	As has already been directed by the Board, vide the said letter dated 22.8.2013 (para 2.4 of the letter), the designated authority shall ensure that no declaration is returned.  In all cases, declaration should be promptly received and duly acknowledged. Request for clarification should be dealt with promptly. Defects in the application, if any, should be explained to the declarant and possible assistance be provided in rectifying these defects. The effort must be to accept a declaration, as far as possible, and recover the arrears of tax.
2	An apprehension was raised that declarations are being considered for rejection under section 106 (2) of the Finance Act, 2013, even though the “tax dues” pertain to an issue or a period which is different from the issue or the period for which inquiry /investigation or audit was pending as on 1.3.2013.	Section 106(2) prescribes four conditions that would lead to rejection of declaration, namely,  (a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of,- (i) search of premises under section 82 of the Finance Act,1994 ; or  (ii) issuance of summons under section 14 of the Central Excise Act, 1944; or  (iii) requiring production of accounts, documents or other evidence under the Finance Act, 1994 or the rules made there under; or       (b) an audit has been initiated, and such inquiry, investigation or audit was pending as on the 1st day of March, 2013. These conditions may be construed strictly and narrowly. The concerned Commissioner may ensure that no declaration is rejected on frivolous grounds or by taking a wider interpretation of the conditions enumerated in section 106(2). If the issue or the period of inquiry, investigation or audit is identifiable from summons or any other document, the declaration in respect of such period or issue alonewill be liable for rejection under the said provision. Examples: (1) If an inquiry, investigation or audit, pending as  on 1.3.2013 was being carried out for the period from 2008-2011, benefit of VCES would be eligible in respect of ‘tax dues’ for the year 2012, i.e., period not covered by the inquiry, investigation or audit. (2) If an inquiry or investigation, pending as on 1.3.2013 was in respect of a specific issue, say renting of immovable property, benefit of VCES would be eligible in respect of ‘tax dues’ concerning any other issue in respect of which no inquiry or investigation was pending as on 1.3.2013. It is also reiterated that the designated authority, if he has reasons to believe that the declaration is covered by section 106(2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating such reasons to reject the declaration. Commissioners should ensure that this time line is followed scrupulously.
3	Whether benefit of VCES would be available in cases where documents like balance sheet, profit and loss account etc. are called for by department in the inquiries of roving nature, while quoting authority of section 14 of the Central Excise Act in a routine manner.	The designated authority/ Commissioner concerned may take a view on merit, taking into account the facts and circumstances of each case as to whether the inquiry is of roving nature or whether the provisions of section 106 (2) are attracted in such cases.
4	Whether the benefit of the Scheme shall be admissible in respect of any amount covered under the definition of ‘taxes dues’, as defined in the Scheme, if paid by an assesses after the date of the Scheme coming into effect, (i.e., 10.5.2013), but before a declaration is filed	Yes, benefit of the Scheme would be available if such amount is declared under the Scheme subsequently, along with the remaining tax dues, if any, provided that Cenvat credit has not been utilized for payment of such amount. Example: A person has tax dues of Rs 10 lakh. He makes a payment of Rs 2 lakh on 15.5.2013, without making a declaration under VCES. He does not utilize Cenvat credit for paying this amount. Subsequently, he makes declaration under VCES on 1.7.2013. He may declare his tax dues as Rs 10 lakh. Rs 2 lakh paid before making the declaration will be considered as payment under VCES.
5	Whether declaration can be made in such case where service tax pertaining to the period covered by the Scheme along with interest has already been paid by the parties, before the Scheme came into effect, so as to get waiver from penalty and other proceedings?	As no “tax dues” is pending in such case, declaration cannot be filed under VCES. However, there may be a case for taking a lenient view on the issue of penalties under the provision of the Finance Act, 1994. In this regard attention is invited to section 73 (3) and section 80 of the Finance Act, 1994.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in

SEZ Unit to Furnish Form A-3 for Service Receive without Payment of Service Tax

Notification No. 15/ 2013-ST 

Date: 21^st November, 2013

The SEZ Unit or the Developer shall furnish to the jurisdictional Superintendent of Central Excise a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax, by 30^th of the month following the particular  quarter:

        Provided that for the quarter of July, 2013 to September, 2013, the said statement shall be furnished by the 15^th of December, 2013.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in

Filling of DVAT Return for 2^nd Qtr 2013-14- Date Extended

Notification no: F.7(420)/VAT/Policy/2011/857-863
Dated: 1^st Oct 2013

Last date of online filing of second quarter return for the year 2013-14, in Form DVAT-16 and DVAT-17,  along with required annexures, and submission of hard copy of acknowledgement in Form DVAT-56, as per schedule given below:

S.No.	Type of dealers	Last date of filling of online return	Last date of filling of hard copy of Acknowledgement Form DVAT- 56
1	GTO< Rs. 1.00.crore in the year 2012-13	25.11.2013	28.11.2013
2	GTO>= Rs. 1.00 crore but< Rs. 10 crore in the year 2012-13	20.11.2013	22.11.2013
3	GTO >= Rs. 10 crore in the year 2012-13	11.11.2013	18.11.2013

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- 8130711885, 9873082769 

Website: www.caaga.co.in