Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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: form 3cd :: cpt :: VAT Audit :: TDS :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: due date for vat payment :: list of goods taxed at 4% :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company
 
 
« General »
 Accounting relief for IndAS companies
 How you can reduce your tax to zero if you have income within Rs 10 lakh
 NRIs’ overseas bank info needed only for tax refund
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind

Bharti come under tax scanner
November, 19th 2009

Telecom firms Vodafone Essar Digilink Ltd and Bharti Airtel Ltd will be examined by special auditors for wrongfully availing of Cenvat (Central value-added tax) credit and non-payment of service tax in the Uttar Pradesh (UP) circle, an official said.

This is a special audit covering all aspects of audit with a focus on wrongful availment of Cenvat credit by the two companies, Suchitra Sharma, commissioner, Central excise and service tax, Lucknow, said. Sharma also said that while the Central excise commissioners office undertakes routine audits of companies, this is a special one that will be done by an outside agency.

Cenvat is an input tax on the purchase of raw materials and capital goods. Service providers in India are entitled to claim a set-off of various input levies (such as excise and countervailing duty) on the purchase of capital goods and inputs used in producing output services. This set-off, claimed from the government, is commonly known as Cenvat credit.

Bharti Airtel said the notice was a routine one and that it was compliant with all rules.

At Bharti Airtel, we strictly follow all statutory, regulatory and fiscal guidelines. We have received a letter from the Lucknow office of the Central excise department on the utilization of Cenvat credit in Uttar Pradesh. This is a routine inquiry and the company will comply with all requirements as per law, said a spokesperson.

Vodafone Essar Ltd, which owns Vodafone Essar Digilink, declined to comment on the issue. A Vodafone executive, who didnt want to be identified, said the company hadnt received any notice.

The special audit in the case of Vodafone and Bharti will essentially look into the aspect of leakage of revenue that has been found in the books of accounts of these companies, said a professional close to the development, who did not want to be identified.

A team of cost accountants will look into the books of these companies for five years. In a similar inquiry for the Delhi circle earlier this year, a recovery of Rs125 crore was made.

Sharma said the government has already completed its own audit and had hired professionals for a closer look at the accounts.

The lack of clarity in the definition of capital goods under the Cenvat credit rules has been creating confusion, especially for telecom operators, according to Siddharth Mehta, senior manager (indirect tax) at audit and consulting firm KPMG.

Although I am not aware of this particular audit, telecom service providers have been facing problems in interpreting what qualifies for Cenvat credit and what does not both under capital goods and inputs, he said. For instance, while some service providers consider facilities such as towers and shelters as capital goods, the rules do not consider them as capital goods on a strict interpretation.

Mehta also said the broad objective of the credit scheme under Cenvat in principle is that credit to service providers be available for all goods used in providing taxable services.

The way out now is implementation of the goods and services tax (GST), under which the credit regime is expected to be liberal and applicable to all business activity, he added. The Union government wants to implement a uniform GST across the country by 1 April, a step thats being resisted by some states.

The department of telecommunications (DoT) already has audits running on the two firms along with other major incumbent operators Idea Cellular Ltd and Tata Teleservices Ltd after the Telecom Regulatory Authority of India suggested this be done. All the reviews pertain to fiscal 2007 and 2008. The audits were called after brokerage firms pointed to some discrepancies in revenue reported by Reliance Communications Ltd (RCom). RCom has disputed the findings of the DoT-ordered special audit.

At the end of September, Bharti Airtel, Indias largest telecom firm, had 7.2 million of its 110 million total mobile subscribers from the UP (east) operating area. Vodafone Essar had 8.2 million mobile subscribers from this operating area out of its total 82.8 million subscribers.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

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