Senguttuvan K
16 September 2008 at 09:52
Brief Facts
“X” is a FMCG company and products are notified under Schedule III of CEA 1944 and abatement % is notified for each item.
The products are manufactured at their own factory as well at Toll Manufacturers (TM) on P to P basis.
Normal expenditure on advertisement is around 25 to 35% of the sale turnover (TO) and advertisement service is under service tax net.
The understanding of the trade and as per the dictum Tribunal in certain cases, one is eligible for service tax credit on advertisement services received only for the brands produced in own factory and that too only to the extent of the volume done (if same brand is produced at own factory as well at TM, then pro rate basis)
Argument
Abatement is Diminution in amount, degree, or intensity; moderation, The amount lowered; a reduction
Under excise provisions, abatement was granted with an intention not to levy excise duty on the expenses such as taxes payable including excise duty, trade commission and distribution.
From the table it is evident that advertisement and marketing expenses are removed from assessable value by the way of abatement.
Hence the advertisement and marketing expenses were assumed to be part of assessable value (AV) under RSP provision by law makers.
Also, in practice the transfer price of TM to FMCG would be material cost + conversion cost, which is much lower than AV (MRP – abatement).
Since TM is discharging duty liability for the excisable goods produced by them, it should have been a case that TM’s incur the expenses and accordingly valuation (material cost + advertisement expenses to the volume of production + conversion cost) is done for transfer.
Query
The advertisement company can raise invoice on TM directly and FMCG can pay on behalf of the TM and debit to TM
OR
FMCG avails advertisement services and distribute through Debit Note with supporting of relevant agency invoice with pro rate computation (Total Advertisement Expenses for the Brand * volume procured from respective TM / Total volume procured & produced) to TM’s.
With respect to TDS provisions, distribution will not attract TDS under Sec 194C. As per the section “in pursuance of a contract with the sub-contractor for carrying out”.
“in pursuance of a contract (no contract between FMCG & TM. FMCG only facilitates by paying for all such services and getting reimbursed through DN) with the sub-contractor (FMCG is not sub-contractor) for carrying out (nothing has been carried out except receiving and sharing)”
Hence the suggested transaction has no implication from Income Tax Act.
The quantum of abatement is notified by taking into account the amount of excise duty, sales tax and other taxes and trade margins.
Hence, my query is whether suggested procedure for availing credit on service tax paid on advertisement services for brands is viable from the legal perception?
N.K.Assumi
16 September 2008 at 08:51
How many Law College in India have introduced Model United nations in their syllabus?: Should Model united Nations be a compulsory subject in India Law college, considering the impact of changing international scenario?
N.K.Assumi
16 September 2008 at 07:16
Apart from its uniqueness and specialty, what is the beauty of the Indian Advocates Act of 1961?
natarajan
15 September 2008 at 23:26
where the agent is having interest in the subject matter can the principal terminate his agency and what is the position of the agent in case of death of the principal
RADHA PYARI SRIPADA
15 September 2008 at 21:56
assuming there is a property abt. 580 sq.yds. a portion of it admeasuring 176 sq.yds is being sold on the rear side facing east. an easementary right of abt. 10 feet is granted to the purchser permitting entry to the rear side from the southern side of the property. now when we intend to develop the property for the construction of flats, can we include the portion granted for easementary right without impending the right to entry / access to the purchaser after construction of flats. whether he has a right to object development to the extent of 10 ft. granted towards easement?
thanking you in advnce for the immediate response.
RP SRIPADA
Balaram
15 September 2008 at 18:15
Dear Experts...!
As per our policy, 45 days notice / in-lieu of salary is mandatory either side.
Now one person left breaking that with just 2 days of notice and without approval of his resignation.
Can you please tell me what all the possible legal actions can be taken against him ?
Nishtha
15 September 2008 at 18:07
Hi,
I left the company one year back.That was not a formal resignation but i took leave without pay for 3 months and then got married and setteled down and never returned.The problem is that after 3 months the salary had started coming to my salary account. Might be there is some confusion in their accounts deptt.
I want to ask that once they realise it will i be liable to return it back. Since i have not made any offence will i be accused or blamed. Can i use that money? Will i have to return it?
Please help me.
Abhimanyu Soni
15 September 2008 at 17:55
Dear All,
I have worked with a company for almost 5 months i.e. 3 March - 21st July. I was on probation period during this period. I left the co. due to some personal reason. According to appointment letter I had to give 15 days prior notice before resigning. I gave the notice on 11th of july but i left the job on 21st of July only. Till date I didn't get my June month salary which became due on 7th of july.
I have mailed my previous employer regarding my the salary matter, but he replied that, I have to be there in person to fulfill full & final settlement procedure and then only I can get the due amount, if any.
Only 50% of my June month salary was transferd to my account on 7th of July reason being insufficiency of funds.
the rest 50% is stil due. They purposely stopped my salary
Now my query is that, is it necessary to follow the full & final settlement procedure as for me it is not possible to visit the last co. again.
Can i claim for 20 days worked in the month of july also.
Can i file a case where i am staying at present.
Is Limitation Act applies in this case? If yes, then what is the time limit in which I can sue the company.
Kindly suggest
thanks & regards
Abhimanyu Soni
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Tenant refusing to vacate
One person has been occupying my shop for the last 35 odd years. His business is collecting scrap. He has not paid rent for more than 3 years. The rent paid before that was also a paltry Rs.250/- and that too paid irregularly.
And he has become a nuisance with dumping all the waste material coming to his shop in the drain channel which runs in front of the shop and our house. These waste material blocks the drain and all debris flows out during rainy season causing foul smell and dirty water all over the place.
There is no written agreement with him. He has been promising to move out for the last 6 years. The man has many other shops of his own. Now he is arrogantly saying he will not move out.
My wife is planning to start a stitching centre and we need this shop very badly.
Can someone advise me what sort of action should I take to get this man evacuated?