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Legal compliance:

Legal compliance is the process or procedure to ensure that anorganization follows relevant laws, regulations and business rules.

The definition of legal compliance, especially in the context of

corporate legal departments, has recently been expanded to include

understanding and adhering to ethical codes within entire

professions, as well.

There are two requirements for an enterprise to be compliant

with the law,

oFirst its policies need to be consistent with the law.

oSecond, its policies need to be complete with respect to the

law.


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SERVICE TAX :

Service Tax is a form of indirect tax imposed only

on services provided. From the point of view of a layman, providingservices means assistance in any work, taking up of any work on

behalf of others, any professional assignment or rendering

intangible benefits to others.

Service Tax registration is a function of gross turnover. Once the

turnover of the assessee crosses a threshold limit of Rs 9 lacs, the

service provider is required to get itself registered under the law,

And compulsorily required to charge service tax on services

provided once the turnover crosses Rs 10 lacs.

Service Tax returns are due half-yearly shown as under:

April September: 25th October.

October March: 25th April.

Rate of Charge:

The present rate is 12.36 %, which is leviable on all services


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Assessee Duration of Payment Time of Payment

Individual, Sole

Proprietorship or

Partnership or LLPs

Quarterly

If tax paid electronically: 6th of

the month following the

quarter, for manual payment,

5th of the month following the

quarter.

Any other assessee Monthly

If tax paid electronically: 6th of

the month following the

relevant month, for manual

payment, 5th of the month

following the relevant month.

Service Tax

Service Tax for quarter/month ended 31st March: Payable by 31st

March itself

Time of Payment/Deposit of Tax:


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VAT (Value Added Tax):

VAT is a form of indirect tax imposed only on goods sold within

a particular state, which essentially means that the buyer and the seller needs to be in

the same state. Only when tangible goods and products are sold, VAT can be imposed.

VAT registration is compulsory for dealers having turnover exceeding Rs 5 lacs

VAT returns are due on 20th of the succeeding month following the relevant month

i.e. For June, 2012, the due date of VAT return is 20th July, 2012.

VAT is payable by 15th of the succeeding month following the relevant month i.e.

For June,2012, the due date of VAT payment is 15 th July,2012.


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Description Rate of VATNatural and unprocessed products, items which are legally

barred from taxation or items having social implications 0%

Precious stones, precious and semi-precious metals, bullion,

gold and silver ornaments

1

%

Items of basic necessities, all agricultural and industrial outputs,

capital goods and declared goods

4%

Luxury Goods 2

0%All goods other than goods falling under aforesaid categories

13.5

%

VAT do not have any uniform rate. The following table depicts the varied rates of VAT.


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CST (Central Sales Tax) ):

CST is a form of indirect tax imposed only on goods sold from

one state to another state, which particularly takes into account that the buyer and theseller needs to be in two different states.

CST registration is not dependent on amount of turnover. Simply put, registration of

dealer becomes compulsory once he affects an inter-state sale.

CST returns due date are exactly similar to VAT return due dates i.e. 20 th of thesucceeding month following the relevant month.

CST is payable by 20th of the month following the relevant month. i.e. For Oct,2012,

the due date of VAT payment is 20th Nov,2012.


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Nature of

Goods

Sale to Govt.on

submission of D

Form

Sale to registered dealer

for resale/use in

manufacture on

submission of C Form

Sale in any other

case

Declared Goods 4% or State Sales

Tax(or VAT),

whichever is lower

4% or State Sales Tax(or

VAT), whichever is lower

2 * VAT rate

Other Goods 4% or State Sales

Tax(or VAT),

whichever is lower

4% or State Sales Tax(or

VAT), whichever is lower

10% or State

Sales Tax(or

VAT), whichever

is lower

CST rate varies with situations. Unlike Service Tax and VAT, neither CST has any

uniform rate, nor is the rate solely dependent upon the category of goods. The

underlying table will elaborate the applicability of CST rates.


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Excise duty :

Excise duty is applicable to manufacturers of goods and

articles.

If an assessee manufactures goods ofRs.1.5 crore in any financial year, he has

to register himself with the excise office and pay the duty at the specified rate on

every sale of excisable goods.

There are three main types of excise duty

Basic Excise Duty is charged on all excisable goods other than salt at the

rates mentioned in the said schedule

Additional Duties of Excise is charged on goods of special importance, in

lieu of sales Tax and shared between Central and State Governments

Special Excise Duty is charged on all excisable goods on which there is a

levy of Basic excise Duty. Every year the annual Budget specifies if Special

Excise Duty shall be or shall not be levied and collected during the relevant

financial year


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Income (Rs.) Rate of Tax

Up to 1,80,000 Nil

1,80,001-5,00,000 10.30

5,00,001- 8,00,000 20.60

8,00,001 and above 30.90

TAX RATES (INCLUDES SURCHARGE AND EDUCATION CESS) FOR

ASSESSMENT YEAR 2012-13:

Individuals/HUF/Association of Persons (AOP) and Body of Individuals (BOI):


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Up to 1,90,000 Nil

1,90,001-5,00,000 10.30

5,00,001- 8,00,000 20.60

8,00,001 and above 30.90

FOR RESIDENT WOMEN (BELOW 60 YRS. OF AGE):


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Rate of Tax

Income < 1,00,00,000 Income > 1,00,00,000

Firm & LLP 30.90 30.90

Domestic Company 30.90 32.44


Up to 10000 10.30

10001-20000 20.60

20001 and above 30.90

FOR FIRMS/LLP/COMPANY

FOR CO-OPERATIVE SOCIETIES


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