Strategic Indirect Tax Management

Strategic Indirect Tax
Management

INDIRECT TAXES FOR DECISION MAKING

By CA Abdur Rahman Musba

May 2011

Disclaimer

This Presentation is only to provide various conceptual
clarity of Indirect Tax Planning and Decision Making
All the facts, case studies and information presented should
be crossed checked with the provisions of law, including
any notifications, exemptions, circulars, judgement,
clarifications and amendments
The position stated herein may vastly differ from actual
interpretation by experts and vary from established
industry practices
The Presenter shall have no liability for the accuracy of
information or the correct interpretation of law

CA Abdur Rahman Musba

Factors Affecting Decision Making

Tax - whether Creditable or Not
Nature of Business
Input
Output
Seller
Buyer
Value Addition & Value Chain
Location
Concessions and Schemes


Nature of Taxes

Central Excise
Basic Excise Duty - Creditable
Education Cess - Creditable
Custom Duty
Basic Custom Duty – Not Creditable
Education Cess on Custom - Not Creditable
Countervailing Duty (Excise Duty) - Creditable
Education Cess on Countervailing Duty – Creditable
Special Additional Duty – Creditable
Service Tax
Service Tax – Creditable
Education Cess – Creditable


Nature of Taxes

Central Sale Tax – Not Creditable
Sale Tax – Not Creditable
Value Added Tax –Creditable
Electricity Duty – Not Creditable
Entry Tax – Not Creditable
State Excise – Not Creditable
Royalty (on mined products) – Not Creditable
Stamp Duty – Not Creditable
Various Other Cess and Taxes


Nature of Business

A Service Provider cannot avail credit of VAT and
Special Additional Duty of Customs
A Non-Excise Registered Dealer cannot avail Credit
of Service Tax and Central Excise.
In case of lease of Tangible Goods, VAT is attracted if
control is given to the lessee and Service Tax is
attracted if control is not given to lessee.
Accordingly, credit can be availed.


Input and Output

Restriction on taking Credit on certain input
No Input Credit under Central Excise for Petrol & Diesel
Certain Input not taxable
No Excise Duty on Vegetables
Certain Output is Exempted or Non Taxable


Seller & Buyer

Seller Exemption from Tax
SSI under Central Excise
Buyer cannot avail credit
Final Consumers cannot take credit, but can claim refund on
wrong claims


Value Addition & Value Chain

If Value Additions is low, it is better to avail full
credit, as compared to concessional scheme, if option
exists
For By-Cycle manufacturers, when excisable components are
out-sourced, it is better to pay output Excise duty @ 5% after
availing Cenvat Credit rather than pay 1% without availing
Cenvat Credit
Ensure that the entire value chain takes the benefits
of the Credit System
In a value chain, if one of the supplier is Non-Excise
Dealer/SSI unit claiming Excise Exemption; the input Excise
Duty for that supplier would be a cost in the system


Location

If the supplier is outside the State, CST is a cost
If the supplier is Foreign Country or SEZ unit,
custom duty is Cost
If the manufacturer is in Excise Exempted Area,
input Central Excise is a cost and there is no output
Excise Duty


Concessions & Schemes

Lesser Rate of CST for purchases against Form C
Concessional Custom Duty under Project Imports
Various Schemes under Foreign Trade Policy
Advance licence, Export Promotion Capital Goods Scheme
(EPCG)


Formalities

Registration
Under CST, exemption is available for goods mentioned in the
registration certificate
Credit/Exemption available only based on proper
Documentations


Detailed Discussions


Structure of the Presentation

Service Tax
Exemption
VAT/Sales Tax/CST
High Seas Sales
Works Contract Tax (Service Tax and VAT)
Central Excise
Exemption under Central Excise
Inputs and Capital Goods
Reversal of Cenvat Credit
Outsourcing Decision
Formalities
Case Studies


Structure of the Presentation (Contd)

Contracts – Capital Expenditure – Tax Liability
Custom Duty
Concession of Custom Duty
Benefits under Foreign Trade Policy
Fiscal benefits for Specific Projects
Tips for Better Compliance – Strategic Level


Service Tax


Service Tax

Service Tax and Education Cess is creditable.
However, when abatement is availed; Credit is not
available
Restriction of Credit on Composite Scheme
Credit interchangeable with Central Excise to some
extent.
Restriction of Credit on certain industries like
Banking


Some Exemption under Service Tax

Statutory Activities
For Taxable Service Up to Rs. 10 lakhs
Services to SEZ Developers and Units (Cenvat Credit
needs not be reversed)
Exports of Services
Refund of Service Tax for Exporter of Goods and
Exemption on Reverse Charge Basis (for GTA and
Foreign Commission agent)
Services to UN and International Agencies, foreign
diplomatic missions


Some Exemption under Service Tax

Service Provided in Jammu & Kashmir
Service Provided to EOU not exempted. EOU can
claim rebate under Cenvat Credit Rules
For Construction of Roads, Airports, Railways,
Transport Terminals Bridges, Tunnels, Dams;
Service Tax is exempted


Cenvat Credit

Cenvat Credit available on
Inputs
Inputs Service
Capital Goods
More Discussions under Central Excise


Formalities

Registration of each office and premise on which
Invoices are raised by the Service Provider
Registration of each office and premises, on which
invoices are raised on the Service Recipient to claim
input credit/Service Tax exemption
Central Registration possible


Sales Tax/VAT


Central Sales Tax/Value Added Tax/Sales Taxes

Central Sales Tax is not Creditable
State Sales Tax not Creditable. Covers items like
Petrol, Diesel and ATF
Value Added Tax is Creditable
VAT under Composition Scheme – Not Creditable


Concession under CST

Sale to a Registered Dealer
Stock Transfer
Sale to Exporter
Sale to SEZ Developer/Unit
Sale made in course of Inter-State Sales (E1/E2
sales)


Formalities under Sales Tax

Registration of Goods to be sold for Inter State Sales
Registration of each place of Sales
Registration of place for purchase under Inter State
Sales


Case Study

A Works Contractor is also a manufacturer of goods
which is used in works contract
The manufacturing unit is one state and the works
contracts in another state.
The Manufacturing Unit should be registered under
CST for the sale of goods.
The works contract site should be registered under
CST for purchase of Construction Material
Goods should be transferred under Form F (Stock
Transfer)

High Seas Sales

Sale outside the territory is High Sea Sales
When Celebrities sell precious stones like Diamonds,
they take a flight across the Atlantic to avoid Sale Tax
These are “High Seas Sales”
High Seas Sales are made to avoid CST/VAT, in case of
imported Goods.
Sales should be executed after goods are left the foreign
destination and before arriving in India
Bill of Lading is a negotiable Document.
Airway Bill in not negotiable document. Delivery Challan
should be endorsed.


Sales in Course of Imports

Sales is made after the goods are imported (after
Customs Formalities is completed before delivery is
taken)
Sales in Course of Import does not attract CST/VAT.
“High Seas Sales” and “Sales in Course of Imports”
option should be decided on case to case to basis
Usually, when Custom Duty is wholly exempted, High
Seas Sales is better.
In case of High Seas Sales, the assessable value for
Customs Duty is the price charged by importer to the
assessee.


Taxation of Works Contract

WORKS CONTRACT ATTRACT BOTH VAT AND
SERVICE TAX


VAT on Works Contract

Taxation under Vat – Eg Civil Works

Particulars Regular Abatement Composition
Amount on On Material On 70% (For On Full Value
which VAT is Portion civil works)
payable
Rate at Which Full Rate Full Rate 4%
the amount is
Taxable
Effective Rate Computed 9.8% 4%
Input credit Available Available Not Available


Service Tax on Works Contract

Particulars Full Rate Abatement Composition Calculation (as
Scheme per VAT law)
Amount on Full Value On 33% of On Full Value On Service
which Service the Value Portion
Tax is payable
Rate at Which Full Rate Full Rate 4.12% Full Rate
the amount is
Taxable
Effective Rate 10.3% 3.399% 4.12% Computed
Credit on Input Available Not Not Available Not Available
Goods Available
Credit on Input Available Not Available Available
Service Available
Credit on Available Not Available Available
Capital Goods Available

Central Excise


Central Excise

Normally, Central Excise by nature is Creditable
Credit available for Education Cess
Credit of Service Tax interchangeable
Compound Levy Scheme – Credit not available
Restriction of Credit on certain industries like Ship
Breaking


Exemption under Central Excise

Some Exemption of Central Excise
Power Project
Water Infrastructure Project
UN/ADB funded projects
Project Under International Competitive Bidding
Supply to Defence
Supply to SEZ, EOU, Exports
Supply against EPCG Authorisation
Exemption for SSI units
Exemption in Excise Free States
Exemption of products under specific Notification


Case Study – When Located in an Excise Free
Zone

Some states like Himachal Pradesh are exempted
from Central Excise?
Is it beneficial to set up a unit in Himachal Pradesh?


Analysis

Check whether the input are excisable
Check whether the buyer can claim Credit
Check the value addition
Check the place from which input should be procured
and the output shall be distributed
Example: Food Processing Industry
The vegetables and fruits does not attract Excise Duty
and the customers cannot avail credit of Excise Duty
Hence, it is beneficial to set up a food processing unit in
Excise Free states


Analysis of Inputs

Analysis of “Input” under Cenvat Credit Rules is
important
Some of the items excluded from Input are
Inputs used outside the Factory (except certain cases)
Petrol, Diesel excluded from definition of inputs
Inputs used for Civil Works
Consumption of Employees


Analysis of Input Service

Similarly, analysis of “Input Service” is critical
The analysis of Input and Input Service should be
seen from specific business point of view.
Some of the Items exclude are
Service on Civil Works
Service Tax on Motor Vehicle (like Rent a cab, insurance on
cars)
For Consumption of Employees


Analysis of Capital Goods

Cenvat Credit on Capital Goods is available for
specified list of Goods
Cenvat Credit/Exemption not available for
construction of Civil Works (except for Civil Works
for SEZ and Service Tax exemption for certain
Infrastructures)


Analysis of Capital Goods(Contd)

While analysing use of Cenvat Credit of Capital
Goods, financial modelling should be used to
ascertained when the Cenvat Credit of Capital Goods
can be fully used.
For captive intensive industries, interest cost should
be added for utilisation of Cenvat Credit of Capital
Goods, if the utilisation of credit is over a longer time
vis-à-vis exemption scheme like EOU, SEZ etc (in
case of direct comparison)


Case Study on Cenvat Credit on Capital Goods

Thumb Rule for factors considering how fast Cenvat Credit
on Capital Goods can be used
Huge Capital Investment
Less Value Addition (in terms of Percentage)
Excisable Input (in case the input is mine products like
Crude Oil, Iron Ore, Cenvat credit cannot be availed)
Rate of Excise Duty of output vis-à-vis the rate of Excise
Duty of input.
Detailed Computations can be done only using financial
modelling


Analysis of Output

Whether Output is chargeable to Excise
In case of pure power plant, Electricity is not
Chargeable to Excise Duty. Therefore, tax on input
becomes a cost. However, if the power plant is set up
as part of existing industrial plant, tax on input can
be taken as credit.


Cenvat Credit Reversal

When manufacturer/service provider is
manufacturing/ providing both taxable and non
taxable service/goods, Cenvat Credit have to be
reversed.
In case, the person opts to pay an specified
“amount”, Cenvat credit need not be reversed
For supplies to SEZ, EOU, Exports, Projects under
Competitive Bidding, Some Power Projects, Cenvat
Credit need not be reversed.


Case Study on Reversal

Pipes are required for Water Project, partly within
SEZ and partly outside SEZ.
There is Excise Duty exemption for within SEZ and
cenvat credit needs not be reversed
For water projects (from Source), pipes are exempted
from Excise Duty. However, Cenvat Credit have to be
reversed.
How to analysis the impact of Central Excise?


Case Study on Reversal

Various types of pipes can be procured. Therefore,
first check the raw material for the pipe
manufacturer
For Ductile Iron Pipes, the main inputs are Iron Ore
and Coal. Both the items are not excisable. (Coal has
now Energy Cess)
The Price should not vary much due to Cenvat Credit
availability
However, for other pipes, where input are taxable
products, the manufacturer would charge 5% more;
if detailed calculation or reversal is not made.


Case Study (when Final Product is exempted)

For Ship Building (and Aircraft Building), Central
Excise is exempted.
Even Custom Duty is exempted for imports of ships
Therefore, should any tax planning be made in this
case?


Case Study (when Final Product is exempted)
[Contd]

Shipping Building unit purchase components after
paying Central Excise/Custom Duty.
If the Shipyard is located in an EOU (Export
Oriented Unit), Central Excise is exempted on
purchase of components.
Similarly, Custom Duty is exempted for import of
components.
On Sale in domestic market, there would not be
Excise Duty.
Net Foreign Exchange earning should be satisfied.

Outsourcing Decision and
Taxes


Outsourcing Decision and Taxes

Analysis the Value Chain and the Taxability of each
point of value addition
If the Value Chain does not have taxes, the
outsourced vendor should not have any input Tax as
cost nor charge any Output Tax which credit cannot
be taken
If the Value Chain has Taxes, the outsourced vendor
should able to at least avail and pass on the
creditable tax and further not add Tax cost.


Case Study on Outsourcing

For Input used outside the Factory, Cenvat Credit
cannot be availed
For Example, Cenvat Credit cannot be taken on
Excise Duty paid on Explosive used by Cement
Factory for blasting Limestone.
Cenvat Credit cannot be taken for the tipper and
dumper used for carrying limestone from the site to
factory (for such vehicles owned by the Factory or
Goods Transport Agency)
How to avail Cenvat Credit on these inputs and
Capital Goods?

Case Study on Outsourcing (Contd)

The activities of the Limestone Mining can be
outsourced to Service Provider of Mining of Mineral
Excise Duty on explosive can be availed as input, and
credit can be availed
Tippers and Dumpers can be treated as Capital
Goods for Mining activities


Other Points to Consider

Level of Control on the Third Party Service Provider
Maturity of the Service Provider and competitiveness
in the Industry
Quality of Service Level
Confidentiality
Administrative Cost and Management time to set up
own Service Provider
Effect on future changes in law


Formalities


Formalities

To avail Credit/Refund/Exemption proper formalities
have to be complied
Registration is one of the important Formalities. The
Registration show the ground plan.
Only area shown in Ground Plan, Cenvat Credit can be
availed. (Any Capital Goods installed outside the Ground
Plan, Cenvat Credit cannot be availed).
Land owned by the unit or lease by the unit can be shown
in Ground Plan.
In case of Project, where Contractor has leased out land,
the lessee right should be assigned to the Unit.


Formalities (Contd)

Any additional land taken for the purpose of unit, and
any manufacturing activities or storage is done in such
land, the Ground Plan should be amended.
Even if storage is made in additional area (not mentioned
in Ground Plan) it may be construed as “removal”.
Cenvat Credit can be taken for a particular Unit. If the
factory is at different location, Cenvat Credit for each
factory should be taken.
In case, there are two units at the same location, Cenvat
Credit should be taken for each unit separately.


Case Study (Installation outside Ground Plan)

An Factory has to set up a Transformer for its factory
The Transformer is being set up outside the factory
on Government Land.
How can Cenvat Credit be availed on installation of
the Transformer?


Case Study (Installation outside Ground Plan)

The Cenvat Credit of Central Excise cannot be
availed directly
A contractor has to be appointed for Supply and
Installation of Transformer (Composite Contract)
The Contractor has to Purchase the Transformer
from the Manufacturer/Excise Dealer and take
Cenvat Credit on Central Excise
After Installation, the Contractor has to Charge
Service Tax on the Whole Value of Works at Full
Rate.
Cenvat Credit can be taken on Service Tax.


Contracts – Capital Goods –
Tax Liability


Formalities - Contracts

Capital Goods can be purchase through three ways
Supply Contract
Works Contract
Supply & Erection Contract


Supply Contracts

Cenvat Credit Under Central Excise can be taken
easily as the Invoice is in the name of Buyer
For Inter-State Sales, C Form can be issued to
minimise Sale Tax.
For Regular Purchases, the option for seller to open a
depot in the State should be analysed, if input of VAT
can be availed


Supply and Erection Contracts

For Supply and Erection Contracts, (Divisible
Contracts), the Purchase Order and Work Order
should be issued
Where the supplier is supplying goods from Third
Party Manufacturer/Excise Dealer, the Invoice of the
third party manufacturer should mention that the
Goods are on Account of the Ultimate Buyer.
(Contractor should not take Cenvat Credit).


Supply and Erection Contracts (Contd)

The Consignee in the Lorry Receipt (LR) should be in
the name of the contractor. The LR should be
endorse in favour of Buyer before delivery of goods.
The Contractor should not receive the Goods at
Destination (especially in case of Sale in the course
of Inter State sale).
Invoice should be raise on the date of endorsement
of LR.
C Form and E1, E2 Forms should be exchanged.


Case Study

In such Contracts, the Supplier Contractor is
responsible till Erection is over and handed over.
The Contractor has to take insurance till handing
over.
If the Buyer accepts the goods delivered, what is the
Liability of the Contractor after delivery? (Who is
responsible for Security and Insurance?)


Case Study

When the Goods are received at site, the goods
should be handed over to the Contractor, under a
contract of Bailment, in pursuant of the Main
Agreement, through a Delivery Challan.


Works Contracts

For Works Contract, the Contractor can take Cenvat
Credit. The Contractor has to charge normal Service
Tax on Full Value.
However, in case of civil works, Cenvat Credit cannot
be availed. In Case of SEZ, Exemption of Central
Excise and Service Tax can be obtained even for Civil
Works.
Whether Works Contract can be split in Supply &
Erection Contract should be analysed.
Example: In Electrical Works and Goods can be
purchased Inter-State and Form C can be issued


Custom Duty


Computation of Custom Duty

S Particulars Working Legend Amount
No
1 Assessable Value (CIF + 1% of A 1000
CIF)
2 Basic Custom Duty (BCD) 10% of A B 100
3 CVD 10% of A+B C 110
4 Education Cess on CVD 3% on C D 3.3
5 Education Cess on BCD 3% on A+B+C E 6.40
6 Special Additional Duty 4% on F 48.79
A+B+C+D
7 Total 1268.49
Effective Duty 26.85%


Credit for Custom Duty

A manufacturer can claim Cenvat Credit on CVD,
Education Cess on CVD and SAD
A Service Provider can claim Cenvat Credit on CVD
and Education Cess on CVD, and not on SAD.
A Trader can claim Refund of SAD, if the trader sells
the Goods charging VAT/Sales Tax.
In a supply and erection contract (Divisible), the
Contractor can claim refund of SAD, and the Unit
can claim input Credit of CVD, Education Cess on
CVD and VAT.


Concession under Custom Duty – Capital Goods

Project Imports – Concessional Rate of Custom Duty at
5% or 0% for new Industrial & Infrastructural projects or
substantially expansion of old projects. No Condition
attached
Export Promotion Capital Goods Scheme under the
Foreign Trade Policy: Concessional Rate of 3% or 0%
Custom Duty.
Export Oriented Unit: Custom Duty Exemption (for
Capital Goods and Input).
Special Economic Zone: Custom Duty Exempted
Road Project: Machinery for Construction Exempted


Concession under Custom Duty – Input

Advance License Scheme
Duty Free Import Authorisation
Preferential Rate of Duty


Case Duty - Delay Payment of Custom Duty

When Huge Amount of Raw Material is imported (to
be used over a period of time), to avail Economy of
Scale during Purchase.
The Manufacturer does not have the cash to pay the
Custom Duty or wants to avoid interest of funds used
to pay Custom Duty.
What can be done?


Delay Payment (Contd)

The Goods can be stored in a Custom Bonded
Area/Warehouse.
At the time of removal from Warehouse, Custom
Duty can be Paid


Case Study – Avoid Demurrage

A Capital Goods in imported which is eligible for
concessional duty under Project Imports or Export
Promotion Capital Goods Scheme.
However, the necessary formalities are not
completed
If the Capital Goods are kept at the Port, huge
demurrages to be paid.
How to Avoid the Demurrages?


Avoid Demurrage

The Goods should be transfer to Custom Bonded
Area and Project Can be registered in the Custom
Bonded Area and clear the goods at a concessional
rate of Duty.


Benefits under Foreign Trade Policy

Pre-Shipment
Advance License
Duty Free Import Authorisation
Post Shipment
Duty Drawback
Duty Entitlement Passbook Scheme
Market Focus Scheme
Product Focus Scheme
Served from India Scheme


Foreign Trade Policy

Projects
Export Promotion Capital Goods Scheme
Manufacturers of Products
Hotels, Retailers, Project Imports
Export Oriented Unit Scheme
Special Economic Zones
Deemed Exports
Refinery
Power Projects
EOU, SEZ


Barriers to Foreign Trade

Tariff Barriers
High Rate of Import Duty
Export Duty
Free Trade Agreement/Pacts
Non Tariff Barriers
Phytosanitary Conditions
Intellectual Property Rights
Transfer of Technology


Fiscal Benefits for Specific
Projects


Benefits for New Projects

Concessional Custom Duty under Project Imports
Deferred Payment of VAT on Sales
Exemption of Stamp Duty on Lease, Loan
Exemption of Electricity Duty, Entry Tax
Subsidy, Grant from Government
Concessional Interest from Financial Institution


Income Tax Benefit for New Projects

Exemption for Income Tax under 10AA, 35AD, 80 IA,
IAB, IB for various Industrial, Infrastructure Projects.
Power, Road, Water Infrastructure, SEZ, Cold Storage,
Industrial Project in Backward area, are some of the
exempted Project
MAT is applicable on all Projects, but Creditable in
nature. (Cash flow Issue: IRR, NPV, DSCR)
The exemption of Tax may not be available due to initial
higher depreciation, initial cash losses
However, actual exemption available should be
determined by Financial Modelling.


Power Projects

Exemption from Excise and Custom Duty for Mega
Power Projects
Export Benefits Available for supplies to Mega Power
Projects
Cenvat Credit need not be reversed for suppliers to Mega
Power Project
Income Tax exemption is available
For other Independent Power Project; Excise, Custom is
a cost
Cenvat Credit can be available for Captive Power Plants,
even if set up outside the Factory.


Export Promotion Capital Goods Scheme

Capital Goods used for Earning Forex
Can be used by Hotel, Retailer, Project Imports and other
Service Providers
Import of Goods under Concessional Custom Duty/Nil
Custom Duty
Can also avail Indigenous Goods without Payment of
Excise Duty
Domestic Supplier can avail Export Benefit like Duty
Drawback
Supply for Deemed Exports is counted for Export
Obligations Fulfilment


100% Export Oriented Unit

Exemption under Excise Under CT – 3, ARE 3
Procedure.
Supplier of Goods need not reverse Cenvat Credit
Supply to EOUs eligible for Export Benefits as
deemed exports.
Exemption of Custom Duty
Service Tax can be availed as Credit and refund can
be obtained.
CST is eligible for Refund
Rate of Excise Duty is equivalent to Custom Duty


Computation of Duty for EOU Sale

S Particulars Working Legend Amount
No
1 Assessable Value A 1000
2 Basic Custom Duty (BCD) 10% of A B 100
3 CVD 10% of A+B C 110
4 Education Cess on CVD 3% on C D 3.3
5 Education Cess on BCD 3% on A+B+C E 6.40
6 Total Excise Duty B+C+D+E F 219.7
Education Cess on Excise Duty 3% on F G 6.59
7 Total 1226.29
+ VAT/CST


Special Economic Zone

Exemption of Excise Duty, CST, Custom Duty, Service
Tax, R&D Cess for Authorised Operations
Cenvat Credit on Goods or Service need not be reversed
by the supplier/Service Providers
Export Benefits can be availed. However, for units some
export benefits is subject to payment made in Forex
Exemption of taxes for Civil Works
Exemption of taxes for Construction Equipment of the
Contractors
Income Tax benefit under Section 80IAB, 10AA


Special Economic Zone (Contd)

VAT is exempted by way of refund
Exemption of Entry Tax (except certain Petroleum
Goods)
Exemption of Stamp Duty (100% for Developer/Co-
Developer and 50% for units)
Exemption of Electricity Duty
Custom Duty is payable when Sale made to DTA. (If the
product is generally not being imported and Custom
Duty is not exempted, the Seller have to bear the impact
of Custom Duty component)
Net Foreign Exchange Earning should be positive


Case Study on SEZ

Analysis of Input and Output Taxes is very critical for
determination whether unit should be located in SEZ
For IT/Electronic hardware, the main products output
are exempted from Custom Duty. However, the IT
components (inputs) attract Custom Duty
Sale of IT related goods in DTA is covered under the Net
Foreign Exchange Earning
Hence, it is beneficial to set up a unit in SEZ than DTA,
as SEZ unit can procure inputs without Custom Duty and
sell without paying Excise Duty or Custom Duty


Devil Lies in the Details


Tips to ensure Compliance

Scrutinise the Registration Certificates from time to
time
Keep Proper Documents, even if there is no tax
payable.
How do you convince the Government Official that your
turnover has not exceed the taxable turnover?
Maintain proper Registers
Have effective internal control
Follow Proper System
Remember the Security tracks the movements of goods


Tips to ensure Compliance (Contd)

Check the official rules relating to documentations both
for documents in which exemption/Credit is obtain as
well as documents which is issued by the organisation
Maintain Proper Record of Suppliers and Purchasers
Have adequate personnel for compliance or outsource
the job
Give regular training to the personnel
Conduct regular audits to minimise contravention of law
Structure the wording of the Contract, Invoice, Letters


Any Questions


Strategic Indirect Tax Management

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