TDS – ‘Other Sum Chargeable’ – CBDT Explains

AS per Section 40(a)(i) of the Income Tax Act, while computing the income under the head “Profits or gains of business or profession”, deduction of any interest, royalty, fees for technical services or other sum chargeable, will not be allowed if there has been a failure in deduction or in payment of tax deducted in respect of such amounts.

Doubts have been expressed as to whether the term other sum chargeable refers the whole sum being remitted or only the portion representing the sum chargeable to income-tax under relevant Provisions of the Act.

CBDT had earlier in Instruction No. 2/2014 clarified that in cases where tax is not deducted at source under Section 195 of the Act, the Assessing Officer shall determine the appropriate portion of the sum chargeable to tax, as mentioned in sub-section (1) of section 195, to ascertain the tax-liability on which the deductor shall be deemed to be an assessee in default under section 201 of the Act. It has been further clarified that such appropriate portion of the said sum will depend on facts and circumstances of each case taking into account the nature of remittances, income component therein or any other fact relevant to determine such appropriate proportion.

CBDT now clarifies that for the purpose of making disallowance of ‘other sum chargeable’under section 40 (a) (i) of the Act, the appropriate portion of the sum which is chargeable to tax under the Act shall form the basis of such disallowance and, shall be the same as determined by the Assessing Officer having jurisdiction for the purpose of sub-section (1) of section 195 of the Act as per Instruction No. 2/2014 dated 26.02.2014 of CBDT.
CBDT Circular No. 03/2015., Dated: February 12, 2015
Customs – C0urier – KYC – One Document
All the authorised Courier are required to fulfil ‘Know Your Customer (KYC) norms’. Express Industry Council of India has represented that only one identification/ document instead of minimum two documents should be collected from importer/exporter at the time of delivery/pick up of shipment.
In order to redress the genuine difficulty, CBEC has decided that two documents, one for ‘proof of identity’ and other for ‘proof of address’ are required for KYC verification. This is in line with the KYC norms stipulated by RBI. However, in case of individuals, if any one document listed in the Board Circular No 09/2010-Cus dated 08.04.2010 contains both ‘proof of identity’ and ‘proof of addresses’, the same shall suffice for the purpose of KYC verification. Board has also decided to expand the list of documents required for KYC verification by including ‘Addhar Card’ [perhaps what they mean is AADHAAR Card – at least, the Unique Identification Authority of India wants us to spell it like this. Can’t the Board be a bit careful?] as one of the valid documents for individuals. As regards, documents for KYC verification in case of others (other than individual), the existing instructions will remain in force.

FEMA – Import of Goods into India – Applications in Form A-1
PERSONS, firms and companies must make applications in Form A-1 for making payments, exceeding USD 5,000 or its equivalent towards imports into India.

To further liberalise and simplify the procedure, RBI has decided to dispense with the requirement of submitting request in Form A-1 to the AD Category -I Banks for making payments towards imports into India. Banks may however, need to obtain all the requisite details from the importers and satisfy about the bonafides of the transactions before effecting the remittance.
RBI Circular No. 76/RBI., Dated: February 12, 2015
Foreign Direct Investment – Reporting under FDI Scheme on e-Biz platform
WITH a view to promoting the ease of reporting of transactions under foreign direct investment, the Reserve Bank of India, under the aegis of the e-Biz project of the Government of India has enabled the filing of the following returns with the Reserve Bank of India viz.

– Advance Remittance Form (ARF) – used by the companies to report the foreign direct investment (FDI) inflow to RBI; and
– FCGPR Form – which a company submits to RBI for reporting the issue of eligible instruments to the overseas investor against the above mentioned FDI inflow.

The design of the reporting platform enables the customer to login into the e-Biz portal, download the reporting forms (ARF and FCGPR), complete and then upload the same onto the portal using their digitally signed certificates.
For the present, the online reporting on the e-Biz platform is an additional facility to the Indian companies to undertake their ARF and FCGPR reporting and the manual system of reporting as prescribed in terms of A.P. (DIR Series) Circular No. 102 dated February 11, 2014 would continue till further notice.
RBI Circular No. 77/RBI., Dated: February 12, 2015
CFS – Facilities for Customs
AS per Regulation 5 (1) (i) (b) of the Handling of Cargo in Customs Area Regulations, 2009, the Customs Cargo Service Provider (CCSP) is required to provide office accommodation with the required amenities and facilities for the Customs Staff to the satisfaction of the Commissioner.
Now the Commissioner of Customs has instructed all the CFSs under his jurisdiction that the following minimum facilities are required to be provided by the CFS in addition to the vehicles: (Under what regulations are vehicles prescribed?)
1. Air Conditioned Cabins for Customs officers as per guidelines with proper furniture. A separate room for each AC/DC has to be provided even if the AC/DC is holding additional charge;
2. Two computers for each assessing officer one with ICEGATE connectivity and with Internet access. Both these computers have to be separate. The internet connected computer should be Windows based and should at least run on an Operating system Windows 7 or above;
3. Minimum 2Mbps internet connectivity either through broadband or Wi-Fi;
4. Printer either individual or network connected, for each computer provided to Customs officers;
5. Office Stationary [presumably Stationery]
6. Drinking water
7. Canteen facilities and crockery
8. Call bell
9. Full time dedicated staff to attend the call bell
10. Red light at the door
11. Landline phone with STD facility and caller identification facility
12. Separate Fax machine for Customs. It can be located in either of the AC/DC’s rooms.
13. Proper sanitation facilities with separate facilities for ladies and gents
14. Cupboard with locks
15. Daily cleaning of office space
16. Dedicated xerox machine for Customs
They are also required to file a Monthly Report on Infrastructure (MRI) – and if they do not file this report, their CCSP licence may be suspended.
Other Customs Commissioners can take a leaf….
JN Custom House F. No.: S/5-GEN-78/2014 CFS M. Cell, Dated: February 09, 2015
In-house weekly Training for Babus – Has it started?
ON October 17 2014, the Government had written to all the Ministries and Departments in the Central Government to start a weekly in-house training programme for their staff. This programme is monitored by the PMO. All the departments were requested to send a compliance report to be informed to the PMO. (DDT 2459).
And nobody seems to have bothered.
DoPT is again writing to all the Ministries and Departments to start the in-house training and inform it for apprising the PMO.
DoPT Office Memorandum in F.No.T-17/1/2014-CTP(CSS)., Dated: February 10, 2015
Beware the Ides of March – Indirect Taxes Revenue far below target
INDIRECT Tax assessees of the Country will be the TARGET for overanxious Revenue officers in the next 45 days, for they are far below the target of the Finance Minister. While the Finance Minister told the Parliament that he hoped to collect around 6.23 lakh crores, so far in the first 10 months, the collection is 4.28 lakh crores which is about 69%. The collection should have been about 83%. Of course the Department will make it up by hook or crook – by inflating collections or collecting next year’s revenue this year.
Indirect Tax Collections up to January 2015
Tax Head
Budget Estimate
% of B.E achieved
Central Excise
Service Tax
Strangely even Service Tax is below target.
They have to collect about 2 lakh crores in the next 45 days.
Nonetheless, the Press Release tries to convey a sense of a
chievement by comparing the corresponding figures of collections for the period January to April 2014 vis-à-vis of this year and proudly proclaim that there has been an increase of Customs duty collection by 8.7%, Service Tax by 8.3% and Central Excise by 5.3%. Only a few days back, the Central Statistics Office announced that India is the fastest growing economy – How? [See DDT 2535]. Some placebo effect this!

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