Time of Payment of TDS

Question

Our company had deducted TDS on 31/03/2008 and deposited the same on 31/05/2008.The income tax department issued a demand notice for interest on delayed payment. Is our company  liable to deposit the interest? Sir, guide me on this matter

Answer

As per Rule 30(1)(b)(i)(1) of Income Tax Rules, 1962 TDS can be paid to Government account within 2 months of the expiration of the month in which the credit has been made provided in that month the accounts of the company is being made. (ie) if your accounts are finalised as on 31.3.2008 then you can remit TDS within 2 months from date of such closure which is 31.5.2008. So your payment seems to be in order.

This rule has been amended since 1.4.2010 and Rule 30(2)(a) states that payment has to be made to Government on or before 30th day of April where the income or amount is credited or paid in the month of March.

Point of Taxation & GTA

Query

At present, we are paying Service tax on GTA on payment basis (i.e.when we are paying the amount to the transporters on due date).  During the audit of Central excise team, they informed us to pay the service tax of GTA on Bills booking basis (i.e. when I will book my bills irrespective of payment made).  Now, I am in confusion, which one is right either payment basis or bills booking basis.

Answer

Rule 7(b) of Point of Taxation, Rules 2011 (as amended vide notification number 25/2011 dated 31.3.2011) states the following

"(b) the persons required to pay tax as recipients under the rules made in this regard in respect of services notified under sub-section (2) of section 68 of the Finance Act, 1994;

shall be the date on which payment is received or made, as the case maybe

Provided further that in case of services referred to in clause (b) where the payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if this rule does not exist :"

In short, it means that service tax has to be paid "on payment basis" of GTA bills if payment is made within 6 months from the date of the invoice. If payment is not made within 6 months from the date of invoice then service tax would become payable as if Rule 7(b) does not exist (ie) service tax payment has to be made based on the date of invoice.

Can a director remain outside state forever - Indian Companies Act, 1956

Question : Can a director remain outside state forever

Yes there is no restriction in the location of a Director.  Section 252 to Section 284 of the Companies Act, 1956 deals with appointment, qualification, disqualification, restriction etc of Directors, which does not specify any conditionality on location of directors

As the director is overseas care should be taken under section 283(1)(g) which states that a director shall vacate office if

"he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the board"

So it should be ensured that this directors attends the board meetings or takes a proper leave of absence.