Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: due date for vat payment :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: VAT Audit :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: empanelment :: form 3cd :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4%
News Headlines »
  10 incomes you need not pay any tax on
 How To File Income Tax Returns In Three Steps By March 31, 2018
 10 things about income tax every taxpayer should know
 What to do if your TDS is not deposited with the government
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31
 5 income tax changes which will come into effect from April 1, 2018
 Why you shouldn't be a last-minute tax filer
 How to calculate income tax for this assessment year on Moneycontrol
 6 Tax notices you may get and how to cope with them Income Tax Notice
 Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide

Telcos set to face service tax audits
October, 16th 2006

Service tax audit of telecom companies may be on the cards, following concerns over the alarming slowdown in the growth of tax revenues from this sector. Service tax collections rose by a mere 4% in FY06, well below the growth in the telecom sector earnings.

Revenues of the telecom sector grew by around 17.6% to top Rs 92,000 crore ($ 20 billion) in FY06 compared to Rs 78,200 crore ($ 17 billion) in FY05, according to the Telecom Regulatory Authority of India (Trai). Service tax revenues stood at Rs 4,092.49 crore in FY06 against Rs 3,934.36 crore in FY05.

The Directorate General of Service Tax (DGST) has voiced concern over the meagre 4% rise in collections, looking at the buoyancy in the telecom sector.

An exercise is underway to pin down reasons for the modest growth, as a possible precursor to service tax audits. Some of the schemes such as free talk time offered to mobile users could come in for closer scrutiny, said official sources.
The mobile subscriber base has been growing at a scorching pace over the last few years. In FY06, there were 140 million telephone users, of which 93 million were mobile subscribers. The subscriber base of mobile phones grew by a robust 78% in FY06 and the growth momentum continues.

The rapid growth in mobile telephone subscriber base should normally translate into higher earnings for telecom companies, however, revenues may have been impacted as these companies have also slashed tariffs, reckons Sachin Menon, partner & head, Indirect Taxes RSM. The government is nevertheless concerned, given that collections from telecom services grew by 46% in FY05 and 71% in FY04 (see table). Telephone services account for over 93% of service tax revenues in the telecom sector.

The spurt in Cenvat credit is being cited as the main reason for the deceleration in collections.This system allows companies to take credit for the duty paid on inputs goods and services and use this to pay service tax on the final product. Simply put, companies do not have to pay cash.

Cenvat credit can be taken on select capital goods as well. Telecom companies have made huge investments in network expansion. In FY06, the capital investment for expansion was around Rs 27,600 crore ($ 6 billion) and this is projected to increase by 15%.

There could be instances where telecom companies may have used the Cenvat credit on capital goods that are not in the specified list. Service tax audits would reveal the correct picture, said an official.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

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