The Circular No.47/21/2018- GST dated 08.06.2018 issued by the CBIC refers to the situation where the moulds, jigs etc are given by recipient,[Original Equipment supplier-OEM] on FOC basis to the supplier who uses such moulds, jigs etc. to manufacture and supply the finished goods to the recipient of supply.
It clarifies that it does not constitute a supply under GST since no consideration is charged by the recipient for the moulds, jigs etc. This is only when supplier and recipient are not related persons such as group cos.
The Circular also clarifies that value of usage of moulds, jigs etc. (given on FOC basis) shall not be factored or amortized in the value of supply in a situation where the contract sets out that the recipient of supply shall supply moulds, jigs etc. which would be used by the supplier to manufacture the goods, since the said situation is not covered by Section 15(2)(b) of the CGST Act. Therefore, value of goods supplied on FOC basis cannot be included in the value of the supply as per the existing provisions of CGST Act read in conjunction with the aforesaid circular.
However, it made clear that the case is different where if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components.
Once it is established that the obligation to provide tools on FOC basis is on the customer then the question of adding the amortised value of tools supplied by the customer does not arise. However, the situation is reverse where the obligation to use tools is on the applicant but provision for the same is made by the OEM on FOC basis. Ruling:- The amortized value of the tool received on FOC basis from the customer is not required to be included in the value of finished goods manufactured and supplied by the applicant to the customer.
Capacity Building Workshop “Important To-do things in Accounts Department in April 2022” organized by IamSMEofIndia
Sh. M L Gupta, Founder MLG Team, graced the Dias with his presence . Sh. Sangeet Kr Gupta was of the Main Technical Speaker at event.
Sh. Rajiv Chawla, Chairman of IamSMEofIndia, was the Moderator and Keynote Speaker.
Sh. M L Gupta, Founder MLG Team, graced the Dias with his presence . Sh. Sangeet Kr Gupta was of the Main Technical Speaker at event.
Topics Covered
1. Things you must do in April 2022 for a Better Balance Sheet, – Current Ratio, Debt Equity Ratio, DSCR Ratio
2. Term Loan repayment, is that a good idea ?
3. CC Limit vs OD limit against Property
The Learned Govt of India, officers of the TDS Dept have invoked a decade old rule… they are sending these emails, to warn the TDS deductors… saying that…
……you have not downloaded the TDS certificates… and so, probably not given to your contractors… hence… possibility of penalty is coming nearer
This rule was good in 1980’s and 1990’s, and maybe in early 2000-2010, when there was no 26AS , no AIS and when people used to plead their customer to release their TDS certificates
Crux of this message of the Govt of India
Download TDS certificates and give to your vendors, within 15 days or face penalties ??
Did you know ? You can help your staff “age” with grace… give them safety of regular Pension in Private sector too.
You run a private sector company. + Your staff does not get any pension, after they retire…..
💐
What if their kids don’t take care of them, when they get “Old age”.
🤔
How about giving them the net of pension safety ?
Did you know ? You and they can Save More Income tax than you currently do ? On the “additional Rs 50,000” u/s 80CCD(2).
Many Clients of MLG Associates and Finsys have already started this Innovative Scheme of Govt of India, and getting good tax benefits for self and other staff.
This is called NPS
One can save tax in three ways via NPS. First, NPS investments are eligible for deduction under Section 80C. ( LIC, School Fee, Housing Loan instalment etc)
If one has already exhausted the Rs 1.5 lakh ceilingunder Section 80C, one can claim an additional deduction of up to Rs 50,000 under Section 80CCD(1b). Lastly, up to 10% of the basic salary put in the NPS can be claimed as deduction under Section 80CCD(2).
Even, those very close to retirement, can claim more tax benefits if their company offers the NPS benefit. Under Section 80CCD(2), up to 10% of the basic salary put in the NPS by the company on behalf of the employee is tax free.
Point to note: The entire amount withdrawn will not be tax free. Though there is no reference to this in the tax laws, one can reasonably assume that 60% of the withdrawn amount will be tax free while the balance 40% will be taxed at the normal rate.
This is actually an intelligent, simple and user friendly deferment of tax
So, instead of paying a big 30% tax now
you can deposit now, Save tax.
on the top of it, earn 5% p.a. to 20% p.a. cumulatively on that …. based on your investment profile ( Shares vs Private Debt vs Govt Debt )
You may pay the tax (if any) when you retire
Of course , Old age income ke liye ke liye saving to karni hi Chahiye
Note : By that time the tax exemption limits might have reached Rs 20 lakh or maybe Rs 30 lakhs…. and all your NPS pension money might be tax free after all
This scheme has been introduced by Pension Fund Regulatory and Development Authority (PFRDA) to promote old age income security to all citizens of India including workers of the unorganized sector.
NPS is a voluntary, defined contributions retirement savings scheme & is administered / regulated by PFRDA. It is operated with the participation of Central Record Keeping Agency (CRA) – NSDL e-Governance Infrastructure Limited & KFin Technologies Private Limited.
Resident or Non- Resident Indian between age group of 18 to 70 years; salaried or self employed can join this scheme.
The people within age group 60-70 can also join/re-join NPS.
Account can be opened by Individual and Corporate.
Every individual subscriber will be issued a Permanent Retirement Account Number (PRAN) card having 12 digit unique numbers.
Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is mandatory and the subscriber has option to opt for Tier II account opening and operation. Tier II account can be opened only when Tier I account exists.
Account can be opened Online and Offline through authorized branches.
Flexible: The employer can have the option to select the investment choice for all its employees or may give the option to the employees. The employees have the option to choose from an assortment of asset classes (Equity, Corporate Debt, Government Securities and Alternate Investment Fund) and have the freedom to choose one of the registered Pension Fund.
Online Access– 24 X 7 X 365: Riding on a highly efficient technological platform NPS provides online access to accounts to the subscribers.
Regulated: The funds are managed by professional Pension Funds regulated and actively monitored by PFRDA, the Regulator set up through an Act of Parliament.
Portable: The NPS account (PRAN) can be operated from anywhere in the country even if one changes the job location or the job itself.
Tax Incentives: Tax benefits are available on both employee and employer contributions.
Salient features of these sub-accounts are mentioned below :
Tier-I account: A retirement and pension account which can be withdrawn only upon meeting the exit conditions prescribed under NPS. The applicant shall contribute his/her savings for retirement into this account. This is the retirement account and applicant can claim tax benefits against the contributions made subject to the Income Tax rules in force. Initial amount while opening NPS account is Rs. 500/- with Minimum Yearly Contribution is Rs. 1000/-. There is no upper limit for the maximum contribution.
Tier-II account: This is a voluntary investment facility. The applicants are free to withdraw his/her savings from this account whenever he/she wishes. This is not a retirement account and applicant can’t claim any tax benefits against contributions to this account. Minimum amount per contribution is Rs 250/- & no upper limit for the maximum contribution.
Funds will be invested in 4 different classes:Equity, Government Securities, Corporate Debts & Alternate Investment Fund (A). The investor has 2 Investment options for managing the fund: Auto and Active.
Active Choice: – Under this option, subscribers are free to allocate the investment across the asset class provided E/C/G/A. Subscriber decides allocation pattern amongst E, C, G and A as mentioned below.
Asset Class
Cap on Investment
Equity (E)
75% (Upto age 50)
Corporate Bonds (C)
100%
Government Securities (G)
100%
Alternate Investment Fund (A)
5%
Active choice – This is the default option under NPS and wherein the management of investment of fund is done automatically based on the age profile of the subscriber.
Age (In Years)
Asset Class (E)
Asset Class (C)
Asset Class (G)
Upto 35
50%
30%
20%
36
48%
29%
23%
37
46%
28%
26%
55 and Above
10%
10%
80%
Type of Auto Life Cycle Fund LC50/ LC25/ LC 75:
LC 75– It is the Life cycle fund where the Cap to Equity investments is 75% of the total asset (Aggressive)
LC 25– It is the Life cycle fund where the Cap to Equity investments is 25% of the total asset (Conservative)
LC 50– It is the Life cycle fund where the Cap to Equity investments is 50% of the total asset (Normal/ Moderate)
National Pension System (NPS) is a retirement benefit Scheme introduced by the Government of India to facilitate a regular income post retirement to all the subscribers. PFRDA (Pension Fund Regulatory and Development Authority) is the governing body for NPS.
Salient Features & Benefits
National Pension System (NPS) is based on unique Permanent Retirement Account Number (PRAN) which is allotted to every subscriber. In order to encourage savings, the Government of India has made the scheme reassuring from security point of view and has offered some attractive benefits for. NPS account holders.
An NPS Account offers the following benefits:
Regulated: NPS is regulated by PFRDA (Pension fund regulator under Ministry of Finance, Govt. of India.) which ensures transparent norms governing the activities. NPS Trust ensures adherence to the guidelines through regular monitoring.
Voluntary: It is a voluntary scheme for all citizens of India. You can invest any amount in your NPS account and at anytime.
Flexibility: You have the flexibility to select or change the POP (Point of Presence), investment pattern and fund manager. This ensures that you can optimize returns as per your comfort with various asset class (Equity, Corporate Bonds, Government Securities and Alternate Assets) and fund managers.
Economical : NPS is one of the lowest cost investment products available.
Portability: NPS account or PRAN will remain same irrespective of change in employment, city or state.
Superannuation Fund transfer: NPS account holders can transfer their Superannuation funds to their NPS account without any tax implication. (Post approval from relevant authorities)
Tax Benefits: NPS offers triple tax benefits which are as follows:
Tax benefits for Salaried Individual
Tax Benefits for Self Employed Individual
You can claim tax exemption upto Rs. 50,000 under section 80CCD (1B). This benefit is over an above limit of Rs. 1,50,000 under section 80C.
You can claim tax exemption upto Rs. 50,000 under section 80CCD (1B). This benefit is over an above limit of Rs. 1,50,000 under section 80C.
You may invest upto 10% of your basic salary + dearness allowance and claim tax exemption on the invested amount under section 80CCD(1). This tax exemption is subject to a limit of Rs. 1,50,000 under section 80C of Income Tax Act, 1961.
You may invest upto 20% of your gross annual income and claim tax exemption on the invested amount under section 80CCD(1). This tax exemption is subject to a limit of Rs. 1,50,000 under section 80C of Income Tax Act, 1961.
*Employer contribution benefit is capped upto 7.5 lakhs for NPS, PF & Superannuation
National Pension System (NPS) is a defined contribution pension system introduced by the Government of India as a part of Pension Sector reforms, with an objective to provide social security to all citizens of India. It is administered and regulated by PFRDA.
Tier II – Investment account (Optional A/C – No tax benefit but corpus is withdrawable anytime) Rs. 50,000/- in a Financial Year.
Minimum Contribution during A/C opening is Rs.500 for Tier I
Minimum Contribution during A/C opening is Rs.1,000 for Tier II
Minimum total contribution in a year Rs.1,000 (Min. amount per contribution Rs.500) for Tier I
Minimum total contribution in a year N.A. (Min. amount per contribution Rs.250) for Tier II
A very low-cost product with Fund Management Charges of 0.01%.
Attractive market linked returns
Flexibility of Investments– Subscriber may select a Pension Fund Manager (PFM) of their choice. Subscriber is allowed to change PFM once during a Financial Year. Subscribers may also define their asset allocation, which may be changed twice in a given Financial Year.
Portable across jobs and geographies.
24 X 7 X 365 through Web & Mobile App of Central Recordkeeping Agency (CRA)
One-time shift to NPS- Existing corpus under Superannuation can one-time be transferred to NPS without any Tax Incidence
This is one of the rare Deductions that is available in the “New Regime of Income tax also“…
Employer Share can get Income tax deduction u/s 80CCD(2)
CA Faridabad, CA Firm, BPO, Accounting Outsourcing, Taxation, GST Returns
This is actually an intelligent, simple and user friendly deferment of tax
Note : By that time the tax exemption limits might have reached Rs 20 lakh or maybe Rs 30 lakhs…. and all your NPS pension money might be tax free after all
