Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get 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) | 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: VAT Audit :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: cpt :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: due date for vat payment :: VAT RATES :: ACCOUNTING STANDARDS
 
 
« General »
 The most thrilling idea before every Budget: No income tax
 Finance Ministry likely to tweak Minimum Alternate Tax norms to boost industry
 Income tax department warns people to keep away from benami transactions
 New helpline for income tax e-filing
 The Central Government notifies the Companies (Amendment) Act, 2017
 GST Returns: Government Relaxes Rectification Norms
 Will govt bring change in income tax slab? here's the present structure
 No income tax exemption to cooperative banks
 Bitcoin investors may have to pay capital gains tax
 What industry expected when Modi government implemented GST
  The Finance Resolution And Deposit Insurance Bill, 2017

Power transmission firms demand TDS waiver
March, 12th 2009

Power transmission utilities, including PowerGrid Corporation, the countrys largest, have sought relaxation in tax deducted at source (TDS) on wheeling charges, which they say are higher than their tax liability.

Wheeling charges are levied by the transmission utilities for use of their network.

Following strict enforcement of TDS rules and show-cause notices, state electricity boards and distribution companies have started deducting TDS on wheeling charges paid to transmission firms from January this year. No TDS was being deducted prior to that.

A concerned PowerGrid, a Navratna public sector enterprise listed on the Bombay Stock Exchange, met the Central Board of Direct Taxes (CBDT) on Monday to seek the relief as it feared more cash outgo than its actual tax liability would result in cash blockage. Like most transmission companies, PowerGrid also pays the Minimum Alternate Tax (MAT).

MAT is levied at 10 per cent (11.33 per cent including education cess and surcharge) of the adjusted book profits in the case of companies where income-tax payable on the taxable income according to the normal provisions of the Income Tax Act, 1961, is less than 10 per cent of the adjusted book profits. With TDS also being deducted at 10 per cent, the cash outgo is likely to be higher as tax is being deducted on the entire transmission bill.

Our concern is that if TDS is higher than the tax liability, then it will result in cash blockage. We have requested the Central Board of Direct Taxes (CBDT) that wheeling charges should not come under TDS net, said a PowerGrid official, who did not wish to be quoted. PowerGrid is expected to pay MAT of Rs 200 crore in the current fiscal year. The company had a transmission income of Rs 4,188 crore in 2007-08.

While the transmission companies are keen to get a favourable response from CBDT, it is unlikely that the Board will agree to their request at a time when tax authorities are desperately trying to overcome a slowdown in tax collection, government sources said.

The department had issued show-cause notices to state electricity boards and distribution companies three months back, asking them why they were not deducting TDS on wheeling charges. However, there is no uniformity on TDS rate as some income-tax branches are collecting TDS at the rate of 10 per cent while others at 2 per cent, the discrepancy in rates have also been brought to the Boards notice.

Unlike PowerGrid, other transmission firms like Gridco in Orissa are smaller entities and do not make much profit. TDS deduction results in cash blockage for them. As distribution firms have started deducting TDS, Gridco is in the process of applying for a non-deduction certificate from the department so that TDS is not deducted by discoms, a Gridco official said.

Transmission companies, including PowerGrid, are already in a dispute with the service tax authorities, which have asked them to pay service tax. Earlier this year, the service tax authorities had slapped a Rs 413-crore tax demand on Power-Grid for various services between May 2006 and September 2008.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

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