Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: due date for vat payment :: form 3cd :: ACCOUNTING STANDARDS :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: articles on VAT and GST in India :: VAT RATES :: TDS :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: cpt
« News Headlines »
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17
 Non-taxing GST apps to make filing income tax return less painful

FBT vs Service Tax
October, 30th 2006

To avoid FBT, the author has suggested forming companies with only non-executive directors and no employees, and outsourcing work to the service providers on a retainership basis. The Circular No. 8/2005, August 29, 2005, has clarified that firms having no employees and a retainer-relationship arrangement will not be liable to FBT.

While thinking of this tax planning, the following aspects should be considered. Back-office services are liable to service tax at 12.24 per cent.

However, service tax is tax deductible; cenvat credit can be availed of on the tax on input services. The work can be assigned to service providers who are exempted under service tax (threshold limit). If the company is not eligible to avail of cenvat credit, the service tax is additional cost to it. There is no service tax, if there is employer-employee relationship.

Therefore, cost comparison between FBT and service tax liability has to be worked out before choosing the route of managing the affairs of the company through service providers.

V. Sundararajan

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions