Tuesday, March 29, 2016

Your Queries on Service Tax

Query – We have obtained contract from a company for running two canteens. We prepare food and serve to employees of company. The company has one AC canteen which is under Factories Act as company employs more than 250 employees. Company has another non AC canteen in another unit, where employees are less than 250 and is not under Factories Act.
The company is of the view that service tax is not chargeable by us to them in both the cases. However, department is taking a view that our services are 'outdoor catering services' and we are liable to pay service tax on 60% of value.
Answer - Section 66E(i) of Finance Act, 1994 defines following as 'declared service' - Service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity.

Real Estate Bill - Internal control implications

1.0 Introduction
The Real Estate (Regulation and Development) Bill has been cleared by both houses of parliament. The provisions of this new legislation assume critical importance in the context of internal controls at real estate companies. CFOs, controllers and audit committees of companies in this sector need to gear up for system and process changes to ensure compliance with this new legislation and at the same time comply with the provisions of section 134 of the Companies Act.
2.0 Internal Controls - Provisions of Companies Act
As per section 134 of the Companies Act, 2013, the Board of Directors, in case of a listed company, are responsible for laying down internal financial controls and ensuring the adequacy and effectiveness of such controls. The Directors are also responsible for devising proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.