Binding effect of government circulars: administrative clarifications do not bind courts or quasi judicial authorities and cannot create estoppel. Government circulars and clarifications represent administrative understanding of statutory provisions and do not bind courts or quasi judicial authorities; they cannot create an estoppel against the statute and do not prevent recovery of tax lawfully leviable despite prior communications to taxpayers.
Service elements in works contracts taxable when classifiable under construction or erection services, not limited to a new label. Service elements within a composite works contract that correspond in nature to Commercial or Industrial Construction Service, Construction of Complex Service or Erection, Commissioning or Installation Service are taxable under those service heads; such service elements need not be classified exclusively under the subsequently inserted sub clause, and levy under the existing defined service categories is proper based on the substantive character of the activities.
Resident firm classification for advance ruling expands eligible applicants under service tax advance ruling framework. Notification declares resident firm as a class of persons eligible for advance rulings under section 96A of the Finance Act, 1994 for service tax. It defines "firm" to include partnerships under the Indian Partnership Act, limited liability partnerships (including those without a company partner), sole proprietorships, and One Person Companies, and links the term "resident" to the meaning in the Income-tax Act as applicable to a resident firm.
Example:-During the previous year ending 31st March, 2013, X, a salaried employee received ₹ 10,67,000 as basic salary and ₹ 20,000 as arrears of bonus of the financial year 1992-93. During the previous year 1992-93, X has received ₹ 50,000 as salary. X deposits ₹ 1,500 (during 1992-93) and ₹ 10,000 (during 2012-13) in PPF.
11 August, 2015
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Relief under Section 89(1): compare tax on receipt and accrual bases to determine relief for salary arrears and adjust current tax payable. Relief for salary received in arrears or advance is determined by computing tax on the aggregate income on the receipt basis and comparing it with tax ... Summary
Relief under Section 89(1): compare tax on receipt and accrual bases to determine relief for salary arrears and adjust current tax payable.
Relief for salary received in arrears or advance is determined by computing tax on the aggregate income on the receipt basis and comparing it with tax computed as if the income had been charged to the earlier year(s); the relief equals the difference. The example aggregates salary and arrears, applies standard and specified deductions, computes net income and tax for the years on receipt and accrual bases, and derives the relief amount which is then deducted from current year tax payable.
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