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Financial Management
OF BHEL
Submitted to:-
1
Acknowledgment
I have taken efforts in this project. However, it would not
have been possible without the kind support and help of
many mentors and organization.
I will like to extend my sincere thanks to all of them. I am
highly indebted to my guide Mr. Vipin Sagar for their
guidance and constant supervision as well as for
providing necessary information regarding the project &
also for their support in completing the project.
I will like to express my gratitude towards my parents
and members of BHEL for their kind co-operation and
encouragement which helps me in completion of this
project.
I will express my special gratitude and thanks to people
who have willingly help me out with there ability.
2
INDEX
1 Executive Summary 4
2 Company profile 5
3 Bank Guarantee 14
4 Letter Of Credit 19
6 Tendering 40
7 Budgeting 49
8 Taxation 54
9 Sales Tax 65
10 Service Tax 80
11 Cash Management 99
12 Bibliography 105
3
INTRODUCTION
EXECUTIVE SUMMARY
Company: Bharat Heavy Electrical Limited
The project on Financial Management was carried out in BHEL PS-NR
Sector 16, Noida. The intention behind taking over this project with
BHEL was to primarily understand the role of Power Sectors in Financial
Management and advices to its customers. The project was carried out
for the period of 30 days i.e. from 23 June 2016 to 23 July 2016. The
project was done by analyzing the different financial department of the
enterprise. For the purpose of knowing the company financial
Management five different financial department of the company under
the supervision of their respective head was analyzed. Finally the ideal
mapping of enterprise was created to understand the importance of
Financial Management in power Sector.
4
BHEL
Corporate Profile
It has been granted the prestigious Maharatna (big gem) status in 2013 by Govt
of India for its outstanding performance. The elite list of Maharatna contains
another 6 behemoth PSU companies of India.
History
BHEL was established in 1964 Heavy Electricals (India) Limited was merged with
BHEL in 1974. In 1982, it entered into power equipment, to reduce its dependence
on the power sector. It developed the capability to produce a variety of electrical,
electronic and mechanical equipments for all sectors, including transmission,
transportation, oil and gas and other allied industries. In 1991, it was converted
into a public limited company. By the end of 1996, the company had handed over
100 Electric Locomotives to Indian Railway and installed 250 Hydro-sets across
India.
5
Operations
BHEL has retained its market leadership position during 2015-16 with
74% market share in the Power Sector. An improved focus on project
execution enabled BHEL record its highest ever
commissioning/synchronization of 15059 MW of power plants in
domestic and international markets in 2015-16, marking a 59% increase
over 2014-15. With the all-time high commissioning of 15000 MW in a
single year FY2015-16, BHEL has exceeded 170 GW installed base of
power generating equipments.
It also has been exporting its power and industry segment products and
services for over 40 years. BHEL's global references are spread across
over 76 countries across all the six continents of the world. The
cumulative overseas installed capacity of BHEL manufactured power
plants exceeds 9,000 MW across 21 countries including Malaysia,
Oman, Iraq, UAE, Bhutan, Egypt and New Zealand. Their physical
exports range from turnkey projects to after sales services.
6
Main manufacturing facilities
Centralised Stamping Unit & Fabrication Plant (CSU & FP), Jagdishpur
Insulator Plant (IP), Jagdishpur
Electronics Division (EDN), Bangalore
Electronic System Division (ESD), Bangalore
Electro-Porcelains Division (EPD), Bangalore
Heavy Electrical Plant (HEP), Bhopal
Industrial Valves Plant (IVP), Goindwal
Heavy Electrical Equipment Plant (HEEP), Ranipur (Haridwar)
Central Foundry Forge Plant (CFFP), Ranipur (Haridwar)
Heavy Power Equipment Plant (HPEP), Hyderabad
Transformer Plant (TP), Jhansi
Boiler Auxiliaries Plant (BAP), Ranipet
Component Fabrication Plant (CFP), Rudrapur
High Pressure Boiler Plant (HPBP), Tiruchirappalli
Seamless Steel Tube Plant (SSTP), Tiruchirappalli
Power Plant Piping Unit (PPPU), Thirumayam
Heavy Plates & Vessels Plant (HPVP), Visakhapatnam
7
Shareholding
BHEL's equity shares are listed on Bombay Stock Exchange and National Stock
Exchange of India.
Central Government of India and State governments in India hold majority of the
shares of BHEL.
Others 1.34%
Total 100.00%
8
Awards and recognitions
Appreciation shield (June 2016) by the External Affairs Minister Sushma Swaraj
and the Union Minister of Water Resources, River Development and Ganga
Rejuvenation Uma Bharati for successful commissioning of Salma Dam project in
Afghanistan.
BHEL wins India Pride Award 2015-16 for Excellence in Heavy Industries.
The company bagged PSE Excellence Award 2014 for R&D & Technology
Development
BHEL received the National Intellectual Property Award 2014 and WIPO Award
for Innovative Enterprises
In 2014, BHEL won ICAI National Award for Excellence in Cost Management for
the ninth consecutive year.
BHEL received two awards in CII-ITC Sustainability Awards 2012 from the
President of India.
In the year 2011, it was ranked ninth most innovative company in the world by
US business magazine Forbes.
The company won the prestigious ‘Golden Peacock Award for Occupational
Health & Safety 2011’ for significant achievements in the field of Occupational
Health & Safety.
BHEL wins MoU Excellence Award for the year 2006–07 for the highest growth
rate in Market Capitalization
9
Research and development
BHEL's investment in R&D is amongst the largest in the corporate sector in India.
During the year 2012-13, the company invested about Rs. 1,252 Crore on R&D efforts,
which corresponds to nearly 2.50% of the turnover of the company, focusing on new
product and system developments and improvements in existing products for cost
competitiveness, higher reliability, efficiency, availability and quality etc. To meet
customer expectations, the company has upgraded its products to contemporary levels
through continuous in-house efforts as well as through acquisition of new technologies
from leading engineering organizations of the world. The IPR (Intellectual Property
Rights) capital of BHEL grew by 21.5% in the year, taking the total to 2170.
The Corporate R&D division at Hyderabad leads BHEL’s research efforts in a number of
areas of importance to BHEL’s product range. Research & product development (RPD)
BHEL has established Centres of Excellence for Simulators, Computational Fluid
Dynamics, Permanent Magnet Machines, Surface Engineering, Machine Dynamics,
Centre for Intelligent Machines and Robotics, Compressors & Pumps, Centre for Nano
Technology, Ultra High Voltage Laboratory at Corporate R&D; Centre of Excellence for
Hydro Machines at Bhopal; Power Electronics and IGBT & Controller Technology at
Electronics Division, Bengaluru, and Advanced Fabrication Technology and Coal
Research Centre at Tiruchirappalli.
BHEL has established four specialized institutes, viz., Welding Research Institute (WRI)
at Tiruchirappalli, Ceramic Technological Institute (CTI) at Bangalore, Centre for
Electric Traction (CET) at Bhopal and Pollution Control Research Institute (PCRI) at
Haridwar. Amorphous Silicon Solar Cell plant at Gurgaon pursues R&D in Photo Voltaic
applications.
1000 R&D
Expenditure(Rs
500 crore)
0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
10
Financial Statement of BHEL
Balance sheet
11
Year at Glance
12
Six-point Agenda 0f BHEL
Engineering and
Technology
Capability
Diversification Enhancement
BHEL
People Development Accelerated Project
Execution
Product cost
competitiveness
&
Quality
13
BANK GUARANTEE
This is a surety that is provided by a bank or a financial institution that they will pay off
the debts and liabilities incurred by an individual or a business entity in case they are
unable to do so.
This enables a business to grow and expand by deferring payment of goods and services
they are utilizing now to a later date. This helps a business to invest on a larger scale
than would have been possible without the bank guarantee.
It is an agreement between 3 parties Guarantor – The Bank who gives the
guarantee Applicant – The Company on whose behalf the guarantee is
given Beneficiary – The Company on whose favor guarantee is given. In case of Foreign
Bank Guarantee- apart from these 3 there is also a “Correspondent Bank”. If a bank
does not have branch in some foreign bank country, it issue Bank Guarantee in that
country through its correspondent bank.
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Characteristics of Bank Guarantees
Some important characteristics of Bank Guarantees should be
noted:
Bank Guarantees are written specifically for a purpose; where an account
holder will instruct his bank to issue a guarantee to another bank on behalf
of their account holder.
The bank will hold adequate assets of the account holder as security for the
Bank Guarantee.
Upon Expiry, Bank Guarantees are terminated, they are not traded.
A Bank Guarantee has no end value and does not accumulate any
investment element or maturity value.
They should not be ‘touted’ on the open market as the issue of a Bank
Guarantee is between closed parties (the Issuer and Beneficiary only).
Banks do not issue them to raise money and should not be confused with
Medium Term Notes (MTNs).
15
How Do Bank Guarantees Work?
The system for providing bank guarantees work like this:
Applicant and the creditor ascertain that there is a need for a bank
guarantee.
The applicant furnishes the security and the bank, or the financial
institution processes the bank guarantee.
The bank guarantee is sent to the creditor’s bank or the creditor, or the
applicant may be asked to collect it in person to give it to their creditor.
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Importance of Bank Guarantees
Importance of bank guarantee is reflected in below points:
Adds to Creditworthiness: BGs reflect the confidence of the bank on your
business and indirectly certify soundness of your business.
Confidence of Performance: When new parties associate in the business and are
skeptic about the performance of the company undertaking the project,
performance guarantees help in reducing the risk of the beneficiary.
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Payment Guarantee/Loan Guarantee: The guarantee is for assuring the
payment/loan repayment. In case, the party fails to do so, a guarantor is
bound to pay on behalf of the defaulting borrower.
18
Letter Of Credit
A Letter of Credit is a letter from a bank guaranteeing that a
buyer's payment to a seller will be received on time and for the
correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover
the full or remaining amount of the purchase. Due to the
nature of international dealings, including factors such as
distance, differing laws in each country, and difficulty in
knowing each party personally, the use of letters of credit has
become a very important aspect of international trade
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Elements of a Letter of Credit
A payment undertaking given by a bank (issuing bank)
On behalf of a buyer (applicant)
To pay a seller (beneficiary) for a given amount of money
On presentation of specified documents representing the supply of goods
Within specified time limits
Documents must conform to terms and conditions set out in the letter of
credit
Documents to be presented at a specified place
Beneficiary
The beneficiary is entitled to payment as long as he can provide the
documentary evidence required by the letter of credit. The letter of credit is a
distinct and separate transaction from the contract on which it is based. All
parties deal in documents and not in goods. The issuing bank is not liable for
performance of the underlying contract between the customer and beneficiary.
The issuing bank's obligation to the buyer, is to examine all documents to insure
that they meet all the terms and conditions of the credit. Upon requesting
demand for payment the beneficiary warrants that all conditions of the
agreement have been complied with. If the beneficiary (seller) conforms to the
letter of credit, the seller must be paid by the bank.
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Issuing Bank
The issuing bank's liability to pay and to be reimbursed from its customer
becomes absolute upon the completion of the terms and conditions of the letter
of credit. Under the provisions of the Uniform Customs and Practice for
Documentary Credits, the bank is given a reasonable amount of time after
receipt of the documents to honor the draft.
The issuing banks' role is to provide a guarantee to the seller that if compliant
documents are presented, the bank will pay the seller the amount due and to
examine the documents, and only pay if these documents comply with the terms
and conditions set out in the letter of credit.
Advising Bank
An advising bank, usually a foreign correspondent bank of the issuing bank will
advise the beneficiary. Generally, the beneficiary would want to use a local
bank to insure that the letter of credit is valid. In addition, the advising bank
would be responsible for sending the documents to the issuing bank. The
advising bank has no other obligation under the letter of credit. If the issuing
bank does not pay the beneficiary, the advising bank is not obligated to pay.
Confirming Bank
The correspondent bank may confirm the letter of credit for the beneficiary. At
the request of the issuing bank, the correspondent obligates itself to insure
payment under the letter of credit. The confirming bank would not confirm the
credit until it evaluated the country and bank where the letter of credit
originates. The confirming bank is usually the advising bank.
21
Characteristics of Letter of Credit
Negotiability
The beneficiary of a letter of credit has right to payment because of the
letter of credit. This contractual relationship is independent of the
relationship in trade that may have prompted the need for the letter of
credit. To be negotiable, the letter of credit must contain either an
unconditional promise to pay at any time the holder wishes or at a definite
time. Negotiable notes become transferable in a way comparable to money
when they have this feature.
Revocability
A letter of credit may be revocable or irrevocable. In the case of a revocable
letter of credit, it is possible that the obligation to pay may be revoked or
modified at any time or for any reason. An irrevocable letter cannot be
changed without agreement by all of the affected parties.
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Advantages of Letter of Credit
Letter of credit advantages for the seller
The seller has the obligation of buyer's bank's to pay for the shipped goods;
Reducing the production risk, if the buyer cancels or changes his order
The opportunity to get financing in the period between the shipment of the
goods and receipt of payment (especially, in case of deferred payment).
The seller is able to calculate the payment date for the goods.
The buyer will not be able to refuse to pay due to a complaint about the
goods
The buyer can control the time period for shipping of the goods;
By a letter of credit, the buyer demonstrates his solvency;
In the case of issuing a letter of credit providing for delayed payment, the
seller grants a credit to the buyer.
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Types of Letter of Credit
There are various types of letters of credit used in the trade transactions. Some of
the letters of credit may be defined by their purpose. The following are the
different types of letters of credit:
Export/Import LC: The same letter of credit can be called export or import
depending on who uses it. The exporter will term it as an exporter letter of
credit whereas an importer will term it as an importer letter of credit.
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supplier. Such letter of credit allows the beneficiary to provide its own
documents but transfer the money further.
Irrevocable LC: A letter of credit that does not allow the issuing bank to
make any changes without the approval of the beneficiary.
Standby LC: A letter of credit that is designed to assure the payment if
something wrong happens. If the beneficiary proves that the promised
payment was not made, a standby LC becomes payable. It does not facilitate
a transaction but ensures the payment.
25
Green Clause LC: A letter of credit that pays advance to the seller just not
against the written undertaking and a receipt, but also a proof of
warehousing the goods.
Sight LC: A letter of credit that demands payment on the submission of the
required documents. The bank reviews the documents and pays the
beneficiary if the documents meet the conditions of the letter.
Direct Pay LC: A letter of credit where the issuing bank directly pays the
beneficiary and then asks the buyer to repay the amount. The beneficiary
may not interact with the buyer.
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Corporate Social Responsibility
Introduction
Business is an indispensable part of the society and gets its manpower and other
resources from society .it are permitted by the society to carry on industrial or
commercial activities thereby earn profits. When the existence of a business
organization depend on society, it should not its responsibility towards the society
.It should conduct the activities in a manner that fulfill its obligation toward the
society. It should not indulge in any socially undesirable practices (like black
marketing, adulteration, etc.).Business can get success in the long only when it is
socially responsible and follow ethical behavior.
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The concept of social responsibility with respect to business implies that the firm
operates in a manner that it will accomplish social gains along with economic
gains, in which the business firm is intereste. A socially responsible business must
act with due concern for the effect on the lives of the other people. It should not
keep ‘profit maximization‘ as the sole objective.
Owners are the persons who own the business. They contribute capital and bear the
business risks. The primary responsibilities of business towards its owners are to:
Investors are those who provide finance by way of investment debentures, bonds,
deposits, etc. Banks, financial institutions, and investing public are all included in
this category. The responsibilities of business towards its investors are :
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Business needs employees or workers to work for it. These employees put their
best effort for the benefit of the busing it is the prime responsibility of every
business to take care of the interest of their employees. If the employees are
satisfied and efficient, then only the business can be successful. The
responsibilities of business towards its employees include:
Suppliers are businessmen who supply raw materials and other items required by
manufacturers and traders. Certain suppliers, called distributors, supply finished
products to the consumers. The responsibilities of business towards these suppliers
are:
Products and services must be able to take care of the needs of the
customers.
Product and services are must be qualitative
There must be regularity in supply of goods and services.
Price of the goods and services should be reasonable and affordable.
All the advantages and disadvantages of products as well as procedure to use
the products must be informed do the customers,
There must be proper after-sales service.
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Grievances of the consumers, if any, must be settled quickly.
Unfair means like under weighing the product, adulteration, etc. must be
avoided.
Business activities are governed by the rules and regulations framed by the
government. The various responsibilities of business towards-government are:
A society consists of individuals, groups, organizations, families, etc. They all are
the members of the society. They interact with each other and are also dependent
on each other in almost all activities. There exists a relationship among them,
which may be direct or indirect. Business, being a part of the society, also
maintains its relationship with all other members of the society. Thus, it has certain
responsibilities towards society, which may be as follows:
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to generate employment
to protect the environment
to conserve natural resources and wildlife
to promote sports and culture
To provide assistance in the field of developmental research on education,
medical science, technology, etc.
31
Business Ethics : Meaning and Elements
The word ‘ethics’ is derived from the Greek word ‘ethos’ which means-
character, norms, ideals, morals or standards of behaviors.
‘Ethics’ defines what is right and wrong. An act, decision or behavior is
ethical if it is in conformity with prevailing norms or standards of the
society.
Business ethics refers to the socially determined moral principles or
standards which govern business activities.
Business ethics is related to individuals running the business.
Business ethics is governed by a set of principles or code of
conduct.
Business ethics requires businessman to be honest with themselves
and with others.
Business ethics is not related to law. It contains norms or standards
of behavior higher than law. All acts which are against the law are
punishable but all unethical behavior is not punishable.
A few example of business ethics are:
1. Charging fair charges from customers,
2. Using fair weight for measurement of commodities,
3. Giving fair treatments’ to workers,
4. Earning reasonable profits, and
5. Paying taxes to the government honestly.
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ELEMENTS
An enterprise can foster ethics at the workplace by following basic elements of
business ethics:
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Features of Business Ethics
The characteristics or features of business ethics are:-
34
economic, legal and other limits of business. Business must be
conducted within these limits.
5. Voluntary : Business ethics must be voluntary. The businessmen
must accept business ethics on their own. Business ethics must be
like self-discipline. It must not be enforced by law.
6. Requires education and guidance : Businessmen must be given
proper education and guidance before introducing business ethics.
The businessmen must be motivated to use business ethics. They
must be informed about the advantages of using business ethics.
Trade Associations and Chambers of Commerce must also play an
active role in this matter.
7. Relative Term : Business ethics is a relative term. That is, it
changes from one business to another. It also changes from one
country to another. What is considered as good in one country may
be taboo in another country.
8. New concept: Business ethics is a newer concept. It is strictly
followed only in developed countries. It is not followed properly in
poor and developing countries.
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BHEL Corporate Social Responsibility
The major focus of corporate Social Responsibility (CSR) is inclusive growth aimed at
capacity building, empowerment of communities, environment protection, and
development of backwards region and upliftment of the marginalized & under-
privileged sector of the society. Company has supported various social initiatives across
the country by undertaking project in diversified areas like Community Development,
Health and Hygiene, Education, Environment protection, Disaster Management, and
talent up gradation /Skill development. BHEL undertakes CSR initiative for
implementation through various NGOs /Trusts /Social Welfare Society engaged in social
activities throughout the country. Our focus area wise major CSR activities undertaken
by the company is as follow:
HEALTHY INDIA
BHEL joined hands with Help Age India by providing them with 05 mobile medical
units (MMUs) for operation in the vicinity Regions.
BHEL is contributing with its dream CSR project titled ‘Heal a soul’ that involves
providing medical assistance to people including children suffering from
Hemophilia.
BHEL has conducted two eye check-up camps at Chowari and Tissa tehsils of
Chamba district, Himachal Pradesh along with Doctors from Rotary Eye Hospital,
Palampur (Maranda).
Providing financial support for contruction of “Ganga Prem Hospice”- a 30-bed
cancer hospice near Rishikesh through an NGO named “Shradha Cancer Care
Trust”.
Developed two Mobile Medical Vans- One each for operation in flood-ravaged
state of Jammu &Kashmir and Hudhud cyclone-affected regions of Andhra
Pradesh(AP)
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CLEAN INDIA
BHEL contributed Rs 20 crore to ‘Swachh Bharat Kosh’ under ‘Clean India
Initiative ‘of the Govt. of India.
The company has undertaken a prestigious CSR project under the Govt.
of India’s Clean India Initiative by signing MoU with FICCI for installation of
25 Bio-digester toilet clusters on the banks of river Ganges near Rishikesh
&Haridwar.
The employee pledge to work 2 Hour every week under Swachh Bharat
Abhiyaan and this campaign is being run across the whole of BHEL.
EDUCATED INDIA
BHEL supported a project to promoted education and skill development of
disadvancement children and youth by imparting non-formal education to
1260 street/ slum children including skill training to 240 youth living in ten
slum cluster of Delhi.
BHEL is providing financial support for education of more than 20000
school children in 23 schools located in the premises of the township of its
various units.
Provided financial support for Renovation and Modernization of Library at
National College Trichy (Tamil Nadu).
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HERITAGE INDIA
Signed MoU with National Culture Fund and Archaeological Survey of
India for refurbishments of Swatantrata Sangram in Red Fort premises of
Delhi –a CSR initiative of BHEL under its thrust area titled ‘Heritage India’.
1. DISASTER MANAGEMENT
BHEL’s HPVP unit at vizag was a victim of the cyclone. The team of
volunteer from BHEL armed with power saws and cranes, joined in the
rescue /relief operations clearing the roads blocked by the fallen tree.
On receiving SOS request form GVMC, post office, SBI a BHEL-
HPVP team was quickly pressed in service for their assistance.
Meals and food supplements were arranged for the NDRF team,
police personnel and Five Brigade personnel.
In addition to this, BHEL has started a CSR Project “Development of
Mobile Medical Van” for one year in Hudhud affected area of
Visakhapatnam in association with a NGO named Workhardt
Foundation.
A team from BHEL-PSSR had distributed essential items such as
food, medicines and water in the flood-affected area of
Visakhapatnam viz.MVP Labor Colony, Shramik Nagar, China
Waltair, Jallara Peta, Beach Road after consultation with the local
authorities.
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2. Support during J&K Disaster:
BHEL plunged into action to alleviate the suffering of people severely affected by
unprecedented floods in the state of Jammu and Kashmir. To support the
humanitarian cause, the company has rushed two of its HelpAge run Mobile
Medicare Units to effectively engage in medical relief operation for the flood-
ravaged people of the J&K.
GREEN INDIA
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Tender
Meaning of Tender
A tender can be said as an offer to do work or supply goods at a fixed price.
Initiating step of a tendering process in which qualified contractors are invited to
submit sealed bids for construction or for supply of specific and clearly defined
goods or services during a specified timeframe. The tender process is designed to
ensure that the work to be done for client/government is given out in a fairway.
Tendering
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Tender request documents; also referred to as invitations to tender, Requests for
Tender (RTF), Requests for Proposal (RFP) etc outline what is required, that is,
what the requesting organization’s needs are. These documents also outline the
particular requirements, criteria, and instructions that are to be followed.
Types of Tenders:
Open Tendering
An open tendering process is an invitation to tender by public advertisement.
There are no restrictions placed on who can submit a tender, however,
suppliers are required to submit all required information and are evaluated
against the stated selection criteria.
Select Tendering
A select tender is only open to a select number of suppliers. The suppliers may
be a short list sourced from an open tender or be a compilation of businesses
that the organization has worked with previously.
Multi-stage Tendering
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Multi-stage tendering is used when there are a large number of respondents.
At each stage in the process, the suppliers are culled to those who are most
suited to the specific contract requirements.
Invited Tendering
An organization contacts a select number of suppliers directly and requests
them to perform the contract, it is generally used for specialist work, emergency
situations or for low value, low risk and off the shelf options,
Request for proposal (RFP) - used where the project requirements have
been defined, but an innovative or flexible solution is needed.
Request for quotation (RFQ) - invites businesses to provide a quote for the
provision of specific goods or services.
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Tender requests are invitations to suppliers to provide a competitive offer to win
a contract for the supply of their products or services.
There are many different terms for tender requests, and each may have slight
differences, with the most common being request for tender (RFT) and invitation
to tender. Other terms include request for proposal (RFP), expression of interest
(EOI), and call for bids etc.
Description of the goods and services to be procured: this will include what
the work will involve, and any technical specifications or details relating to
requirements, deliverables or outcomes of the project.
Conditions of tender: this stipulates the terms and requirements that must
be met in order to be considered for the project or contract. There may be
technical qualifications, experience, licensing, legal or financial conditions
that ought to be met in order to be eligible.
Evaluation criteria: this outlines how your submission will be assessed and
evaluated. This should be adhered to and used as a guide when preparing
your tender submission.
Submission content and format: details may be provided on how you
should present your submission. There may be specifications relating to
length of submissions, file format, presentation etc. Templates or response
forms may also be provided. It is important to use these when available,
and adhere to format and presentation instructions.
Process rules and information: this may include things such as the deadline
for submission; where and when it should be submitted, what should be
included in the submission; for example pricing information or schedule,
and person(s) to contact for clarification or enquiries regarding the tender.
Conditions of Contract: Draft contract conditions: this may indicate the
general or standard terms and conditions of the contract, with additions or
alterations made when a winning tender is announced. This should also
include any non-standard terms and conditions - these should be
highlighted within the tender documents.
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Tender Evaluation
Once tenders have been submitted and received, they are then evaluated. This
process involves an assessment of tenders against the criteria referred to in the
Request for Tender or invitation documents, as well as an analysis of the
strengths and weaknesses of the submitted tenders.
If the tender does not meet this initial check, it is deemed as non-compliant and
will be excluded from further consideration.
Should your tender pass the initial compliance check then it will proceed to be
considered against the tender selection criteria.
The selection criteria that your tender will be evaluated on may include:
Of course price is an area of evaluation, but this does not necessarily mean that
the cheapest price will win the tender. The costs and benefits of your tender will
be assessing other factors such as:
Risks
Warranty
Energy conservation
Disposal Value
Payments terms
Once the evaluation process is complete, a tenderer will be selected, and notified
45
of their successful tender. Other tenderers will also be notified of their
unsuccessful submission.
Tender process
Once it has been determined that a purchase is required, and the funding has
been approved, the seven main steps in the tender purchasing process are:
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The organization requesting the tender will determine the type of tender that will
be used, as well as what will be involved in the tender process.
4. Suppliers respond
You should first obtain all relevant documentation. Then:
Conditions of Tender;
specifications, including any plans and other attachments;
the tender response; and
Standard Conditions of Contract.
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BUDGET
A budget is a plan for your future income and expenditures that you
can use as a guideline for spending and saving.
A budget will help you plan for short-term expenses, like your monthly
bills, and mid-term expenses, like vacations, as well as long-term
expenses, like buying a house, paying for a child's college education and
putting money away for retirement.
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Types of Budgets
Budgets help businesses track and manage their resources. Businesses use a variety
of budgets to measure their spending and develop effective strategies for
maximizing their assets and revenues. The following types of budgets are
commonly used by businesses:
Master Budget
A master budget is an aggregate of a company's individual budgets designed to
present a complete picture of its financial activity and health. The master budget
combines factors like sales, operating expenses, assets, and income streams to
allow companies to establish goals and evaluate their overall performance, as well
as that of individual cost centers within the organization. Master budgets are often
used in larger companies to keep all individual managers aligned.
Operating Budget
An operating budget is a forecast and analysis of projected income and expenses
over the course of a specified time period. To create an accurate picture, operating
budgets must account for factors such as sales, production, labor costs, materials
costs, overhead, manufacturing costs, and administrative expenses. Operating
budgets are generally created on a weekly, monthly, or yearly basis. A manager
might compare these reports month after month to see if a company is
overspending on supplies.
Financial Budget
A financial budget presents a company's strategy for managing its assets, cash
flow, income, and expenses. A financial budget is used to establish a picture of a
company's financial health and present a comprehensive overview of its spending
relative to revenues from core operations. A software company, for instance, might
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use its financial budget to determine its value in the context of a public stock
offering or merger
Purpose of Budgeting
In the context of business management, the purpose of budgeting
includes the following three aspects:
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In managing a business responsibly, expenditure must be tightly
controlled. When the budget for advertising has been fully expended,
the decision on "can we spend money on advertising" is likely to be
"no".
3. Monitoring
business
performance
The purpose of
budgeting is to enable
the actual business
performance to be
measured against the
forecast business
performance i.e. is the business living up to our expectations.
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Objectives of Budgeting
Provide structure. A budget is especially useful for giving a company
guidance regarding the direction in which it is supposed to be going. Thus, it
forms the basis for planning what to do next. A CEO would be well advised
to impose a budget on a company that does not have a good sense of
direction. Of course, a budget will not provide much structure if the CEO
promptly files away the budget and does not review it again until the next
year. A budget only provides a significant amount of structure when
management refers to it constantly, and judges’ employee performance
based on the expectations outlined within it.
Predict cash flows. A budget is extremely useful in companies that are
growing rapidly, that have seasonal sales, or which have irregular sales
patterns. These companies have a difficult time estimating how much cash
they are likely to have in the near term, which results in periodic cash-
related crises. A budget is useful for predicting cash flows, but yields
increasingly unreliable results further into the future. Thus, providing a view
of cash flows is only a reasonable budgeting objective if it covers the next
few months of the budget.
Allocate resources. Some companies use the budgeting process as a tool for
deciding where to allocate funds to various activities, such as fixed asset
purchases. Though a valid objective, it should be combined with capacity
constraint analysis (which is more of an industrial engineering function than
a financial function) to determine where resources should really be allocated.
Model scenarios. If a company is faced with a number of possible paths
down which it can travel, you can create a set of budgets, each based on
different scenarios, to estimate the financial results of each strategic
direction. Though useful, this objective can result in highly unlikely results
if management lets itself become overly optimistic in inputting assumptions
into the budget model.
Measure performance. A common objective in creating a budget is to use it
as the basis for judging employee performance, through the use of variances
from the budget. This is a treacherous objective, since employees attempt to
modify the budget to make their personal objectives easier to achieve.
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Taxation
Taxes are the government’s way of earning an income which can then be
used for various projects that the government needs to indulge in to help
boost the country’s economy or its people. Taxes in India are decided on
by the central and state governments with local governments, such as
municipalities, also deciding on smaller taxes that can be levied within
their jurisdiction. It must, however, be remembered that the government
cannot impose any tax that it wishes to. All the taxes imposed by the
government must be laws.
Types of Taxes:
1) Direct Tax: These are the taxes which are paid directly by the person. It means
taxes which are not shifted. The incidence and the impact are on the same person.
Some of the direct tax act are:
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This is also known as the IT Act of 1961 and sets the rules that govern income tax
in India. The income, which this act taxes, can come from any source like a
business, owning a house or property, gains received from investments and
salaries, etc. This is the act that defines how much the tax benefit on a fixed
deposit or a life insurance premium will be. It is also the act that decides how
much of your income can you save through investments and what the slab for the
income tax will be.
The Wealth Tax Act was enacted in 1951 and is responsible for the taxation
related to the net wealth of an individual, a company or a Hindu Unified Family.
The simplest calculation of wealth tax was that if the net wealth exceeded Rs. 30
lakhs, then 1% of the amount that exceeded Rs. 30 lakhs was payable as tax. It
was abolished in the budget announced in 2015. It has since been replaced with a
surcharge of 12% on individuals that earn more than Rs. 1 crore per annum. It is
also applicable to companies that have a revenue of over Rs. 10 crores per annum.
The new guidelines drastically increased the amount the government would
collect in taxes as opposed the amount they would collect through the wealth tax.
The Gift Tax Act came into existence in 1958 and stated that if an individual
received gifts, monetary or valuables, as gifts, a tax was to be to be paid on such
gifts. The tax on such gifts was maintained at 30% but it was abolished in 1998.
Initially if a gift was given, and it was something like property, jewellery, shares
etc. it was taxable. According to the new rules gifts given by family members like
brothers, sister, parents, spouse, aunts and uncles are not taxable. Even gifts given
to you by the local authorities is exempt from this tax. How the tax works now is
that if someone, other than the exempt entities, gifts you anything that exceeds a
value of Rs. 50,000 then the entire gift amount is taxable.
This is an act that came into existence in 1987 and deals with the expenses you, as
an individual, may incur while availing the services of a hotel or a restaurant. It is
applicable to all of India except Jammu and Kashmir. It states that certain
expenses are chargeable under this act if they exceed Rs. 3,000 in the case of a
hotel and all expenses incurred in a restaurant.
The Interest Tax Act of 1974 deals with the tax that was payable on interest
earned in certain specific situations. In the last amendment to the act it was stated
that the act does not apply to interest that was earned after March 2000.
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Merits of Direct taxes:
I. They are imposed accordingly to the ability of the person to pay. Therefore these
taxes are considered progressive.
II. The revenue is income elastic; because of the progressive characteristics revenue
will increase faster than the increase in income.
III. These taxes create better civic consciousness because the person paying knows
clearly how much he has paid. This incidentally fulfils the objective of certainty.
IV. They best serve the purpose of transference of income from the rich and to the
poor, through provision of amenities to the poor or even direct monetary help like
old age pensions.
I. The ability to pay is difficult to determine; only a rough idea can be formed.
II. Because of undeclared sources of income or evasion, the actual payment may not be
strictly according to the ability to pay. It is also sometimes said that direct taxes are
taxes on the honesty of the person.
III. Such taxes necessitate proper maintenance of accounts which some of the payers may
not be able to do.
IV. The assessment procedure is also cumbersome requiring expert assistance of tax
advisers. The direct tax system is often very complicated.
Income Tax:
This is one of the most well-known and least understood taxes. It is the tax that is levied
on your earning in a financial year. There are many facets to income tax, such as the tax
slabs, taxable income, tax deducted at source (TDS), reduction of taxable income, etc.
The tax is applicable to both individuals and companies. For individuals, the tax that they
have to pay depends on which tax bracket they fall in. This bracket or slab determines the
tax to be paid based on the annual income of the assessee and ranges from no tax to 30%
tax for the high income groups.
This is a tax that is payable whenever you receive a sizable amount of money. It could be
from an investment or from the sale of a property. It is usually of two types, short term
capital gains from investments held for less than 36 months and long term capital gains
from investments held for longer than 36 months. The tax applicable for each is also very
different since the tax on short term gains is calculated based in the income bracket that
you fall in and the tax on long term gains is 20%. The interest thing about this tax is that
the gain doesn’t always have to be in the form of money. It could also be an exchange in
kind in which case the value of the exchange will be considered for taxation.
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Securities Transaction Tax:
It’s no secret that if you know how to trade properly on the stock market, and trade in
securities, you stand to make a substantial amount of money. This too is a source of
income but it has its own tax which is known as the Securities Transaction Tax . How this
tax is levied is by adding the tax to the price of the share. This means that every time you
buy or sell shares, you pay this tax. All securities traded on the Indian stock exchange
have this tax attached to them.
Perquisite Tax:
Perquisites are all the perks or privileges that employers may extend to employees. These
privileges may include a house provided by the company or a car for your use, given to
you by the company. These perks are not just limited to big compensation like cars and
houses, they can even include things like compensation for fuel or phone bills. How this
tax is levied is by figuring out how that perk has been acquired by the company or used
by the employee. In the case of cars, it may be so that a car provided by the company and
used for both personal and official purposes is eligible for tax whereas a car used only for
official purposes is not.
Corporate Tax:
Corporate tax is the income tax that is paid by companies from the revenue they earn.
This tax also comes with a slab of its own that decides how much tax the company has to
pay. For example a domestic company, which has a revenue of less than Rs. 1 crore per
annum, won’t have to pay this tax but one that has a revenue of more than Rs. 1 crore per
annum will have to pay this tax. It is also referred to as a surcharge and is different for
different revenue brackets. It is also different for international companies where the
corporate tax may be 41.2% if the company has a revenue of less than Rs. 10 million and
so on.
Wealth Tax:
The wealth tax, governed by the Wealth Tax Act, allows the government to impose a tax
on the net wealth of a person, an HUF or a company. This tax is set to be abolished in
2016 but until then the tax levied on the net wealth is about 1% of the wealth that exceeds
Rs. 30 lakhs. There are exceptions to this tax which are organisations that don’t have to
pay wealth tax. These organisations could be trusts, partnership firms, social clubs,
political parties, etc.
2) Indirect Tax:
Indirect taxes are those taxes that are levied on goods or services. They differ from direct taxes
because they are not levied on a person who pays them directly to the government, they are
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instead levied on products and are collected by an intermediary, the person selling the product.
The most common examples of indirect tax can be VAT (Value Added Tax), Taxes on
Imported Goods, Sales Tax, etc. These taxes are levied by adding them to the price of the
service or product which tends to push the cost of the product up.
I. These taxes are often criticized for their regressive character. Taxes on necessaries of life
will certainly mean taxing the poor and that mean taxing the rich and poor alike.
II. Also it is contended that these taxes do not create social consciousness because they also
not felt by the tax payers.
III. Government is not certain about the proceeds of these taxes.
IV. The burden of the indirect taxes can be sifted forward or backward. In most of the cases
the consumers have to bear the ultimate burden of indirect taxes.
V. These taxes can also be evaded by such methods as smuggling, falsification of accounts
etc.
Sales Tax:
As the name suggests, sales tax is a tax that is levied on the sale of a product. This
product can be something that was produced in India or imported and can even cover
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services rendered. This tax is levied on the seller of the product who then transfers it onto
the person who buys said product with the sales tax added to the price of the product. The
limitation of this tax is that it can be levied only ones for a particular product, which
means that if the product is sold a second time, sales tax cannot be applied to it.
Service Tax:
Like sales tax is added to the price of goods sold in India, so is service tax added to
services provided in India. In the reading of the budget 2015, it was announced that the
service tax will be raised from 12.36% to 14%. It is not applicable on goods but on
companies that provide services and is collected every month or once every quarter based
on how the services are provided. If the establishment is an individual service provider
then the service tax is paid only once the customer pays the bills however, for companies
the service tax is payable the moment the invoice is raised, irrespective of the customer
paying the bill. An important thing to remember is that since the service at a restaurant is
a combination of the food, the waiter and the premises themselves, it is difficult to pin
point what qualifies for service tax. To remove any ambiguity, in this regard, it has been
announced that the service tax in restaurants will be levied only on 40% of the total bill.
The value added tax is a tax that is levied at the discretion of the state government and
not all states implemented it when it was first announced. The tax is levied on various
goods sold in the state and the amount of the tax is decided by the state itself. For
example in Gujrat the government split all the good into various categories called
schedules. There are 3 schedules and each schedule has its own VAT percentage. For
Schedule 3 the VAT is 1%, for schedule 2 the VAT is 5% and so on. Goods that have not
been classified into any category have a VAT of 15%.
When you purchase anything that needs to be imported from another country, a charge is
applied on it and that is the customs duty. It applies to all the products that come in via
land, sea or air. Even if you bring in products bought in another country to India, a
customs duty can be levied on it. The purpose of the customs duty is to ensure that all the
goods entering the country are taxed and paid for. Just as customs duty ensures that goods
for other countries are taxed, octroi is meant to ensure that goods crossing state borders
within India are taxed appropriately. It is levied by the state government and functions in
much the same way as customs duty does.
Excise Duty:
This is a tax that is levied on all the goods manufactured or produced in India. It is
different from customs duty because it is applicable only on things produced in India and
is also known as the Central Value Added Tax or CENVAT. This tax is collected by the
government from the manufacturer of the goods. It can also be collected from those
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entities that receive manufactured goods and employ people to transport the goods from
the manufacturer to themselves.
Objectives of Taxation:
1. Economic Development These four are principle
2. Full Employment of good tax system:
3. Price Stability (1) Equality,
(2) Certainty,
4. Control of Cyclical Fluctuations
(3) Convenience, and
5. Reduction of BOP Difficulties (4) Economy.
6. Non-Revenue Objective
A good tax system must fulfill certain principles if it is to raise adequate revenue and fulfill
certain social objectives. Adam Smith had explained four canons of taxation which he thought a
good tax must fulfill.
(1) Equality,
(2) Certainty,
(4) Economy.
The first canon or principle of a good tax system emphasised by Adam Smith is of equality.
According to the canon of equality, every person should pay to the Government according to his
ability to pay, that is in proportion of the income or revenue he ET jove onder the protection of
the State.
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Thus under the tax system based on equality principle the richer persons in the society will pay
more than the poor. On the basis of this canon of equality or ability to pay Adam Smith argued
that taxes should be proportional to income, that is, everybody should pay the same rate or
percentage of his income as tax.
However, modem economists interpret equality or ability to pay differently from Adam Smith.
Based on the assumption of diminishing marginal utility of money income, they argue that
ability to pay principle calls for progressive income tax, that is, the rate of tax increases as
income rises. Now, in most of the countries, progressive system of income and other direct taxes
have been adopted to ensure equality in the tax system..
2. Canon of Certainty:
Another important principle of a good tax system on which Adam Smith laid a good deal of
stress is the canon of certainty. To quote Adam Smith, ‘The tax which each individual is bound
to pay ought to be certain and not arbitrary.
The time of payment, the manner of payment, the quantity to be paid ought all to be clear and
plain to the contributor and to every other person. A successful function of an economy requires
that the people, especially business class, must be certain about the sum of tax that they have to
pay on their income from work or investment.
The tax system should be such that sum of tax should not be arbitrarily fixed by the income tax
authorities. While taking a decision about the amount of work effort that a person should put in
or how much investment should he undertake under risky circumstances, he must know with
certainty the definite amount of the tax payable by him on his income. If the sum of tax payable
by him is subject to much discretion and arbitrariness of the tax assessment authority, this will
weaken his incentive to work and invest more.
Moreover, lack of certainty in the tax system, as pointed out by Smith, encourages corruption in
the tax administration. Therefore in a good tax system, “individuals should be secure against
unpredictable taxes levied on their wages or other incomes. The law should be clear and specific;
tax collectors should have little discretion about how much to assess tax payers, for this is a very
great power and subject to abuse.
3. Canon of Convenience:
According to the third canon of Adam Smith, the sum, time and/manner of payment of a tax
should not only be certain but the time and manner of its payment should also be convenient to
the contributor. If land revenue is collected at the time of harvest, it will be convenient since at
this time farmers reap their crop and obtain income.
In recent years efforts have made to make the Indian income tax convenient to the tax payers by
providing for its payments in installments as advance payments at various times during the year.
Further, income tax in India is levied on the basis of income received rather than income accrued
during a year. This also makes the income tax system convenient. However, there is a lot of
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harassment of the tax payers as they are asked to come to the income tax office several times
during a year for clarifications of their income tax returns.
4. Canon of Economy:
The Government has to spend money on collecting taxes levied by it- Since collection costs of
taxes add nothing to the national product, they should be minimized as far as possible. If the
collection costs of a tax are more than the total revenue yielded by it, it is not worthwhile to levy
it.
More complicated a tax system, more elaborate administrative machinery will be employed to
collect it and consequently collection costs will be relatively larger. Therefore, even for
achieving economy in the tax collection, the taxes should be as simple as possible and tax laws
should not be subject to different interpretations.
CONCLUSION
Taxation is cardinal in financing development undertaking. Revenue raised through taxation
is more sustainable than reliance on borrowing. However, in order to raise sufficient revenue,
there is need to have an effective tax system which should be developed by taking into
account the discussed principles.
Objectives of Taxation:
The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most
governmental activities must be financed by taxation. But it is not the only goal. In other words,
taxation policy has some non-revenue objectives.
Truly speaking, in the modern world, taxation is used as an instrument of economic policy. It
affects the total volume of production, consumption, investment, choice of industrial location
and techniques, balance of payments, distribution of income, etc.
1. Economic Development
2. Full Employment
3. Price Stability
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6. Non-Revenue Objective
1. Economic Development:
To overcome the scarcity of capital, governments of these countries mobilize resources so that a
rapid capital accumulation takes place. To step up both public and private investment,
government taps tax revenues. Through proper tax planning, the ratio of savings to national
income can be raised.
By raising the existing rate of taxes or by imposing new taxes, the process of capital formation
can be made smooth. One of the important elements of economic development is the raising of
savings- income ratio which can be effectively raised through taxation policy.
2. Full Employment:
Second objective is the full employment. Since the level of employment depends on effective
demand, a country desirous of achieving the goal of full employment must cut down the rate of
taxes. Consequently, disposable income will rise and, hence, demand for goods and services will
rise. Increased demand will stimulate investment leading to a rise in income and employment
through the multiplier mechanism.
3. Price Stability:
Thirdly, taxation can be used to ensure price stability—a short run objective of taxation. Taxes
are regarded as an effective means of controlling inflation. By raising the rate of direct taxes,
private spending can be controlled. Naturally, the pressure on the commodity market is reduced.
But indirect taxes imposed on commodities fuel inflationary tendencies. High commodity prices,
on the one hand, discourage consumption and, on the other hand, encourage saving. Opposite
effect will occur when taxes are lowered down during deflation.
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5. Reduction of BOP Difficulties:
Fifthly, taxes like custom duties are also used to control imports of certain goods with the
objective of reducing the intensity of balance of payments difficulties and encouraging domestic
production of import substitutes.
6. Non-Revenue Objective:
Importance of Tax
Tax is a major source of government revenue and its contributes for the overall development and
prosperity of a country.
Raising government revenue in terms of income tax, custom duty, excise duty,
entertainment tax, VAT, land revenue tax etc. from various sectors in order to initiate
development and welfare programmes.
Regulating the economic sectors into right direction by encouraging the production and
distribution of useful goods and discouraging the harmful products by imposing high tax
rate on them.
Building and strengthening the national economy by encouraging and protecting national
industries and promoting export trade.
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SALES TAX
A Sale is the exchange of a commodity or money as the price of a good or a
service. Sales (plural only) is activity related to selling or the amount of goods or
services sold in a given time period.
The seller or the provider of the goods or services completes a sale in response to
an acquisition, appropriation, requisition or a direct interaction with the buyer at
the point of sale. There is a passing of title (property or ownership) of the item,
and the settlement of a price, in which agreement is reached on a price for which
transfer of ownership of the item will occur. The seller, not the purchaser
generally executes the sale and it may be completed prior to the obligation of
payment. In the case of indirect interaction, a person who sells goods or service
on behalf of the owner is known as salesman or saleswoman.
A Sales tax is a direct tax on consumption that many states and local
governments impose when you purchase goods and services. The amount of tax
you pay is typically figured as a percentage of the sale price. As of 2011, 45 states
and an array of counties and cities charge a sales tax.
A Sales Tax is a tax paid to a governing body for the sales of certain goods and
services. Usually laws allow (or require) the seller to collect funds for the tax from
the consumer at the point of purchase. When a tax on goods or services is paid to
a governing body directly by a consumer, it is usually called a use tax. Often laws
provide for the exemption of certain goods or services from sales and use tax.
It is important to note that sales tax is not revenue that the seller gets to keep.
The seller is simply collecting the tax as part of their agreement to do business in
that city or state. Every month or quarter the seller will have to prepare forms
and pay in the money they collected for taxes to the state or local government
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Types of Sales Tax
Retail Transaction
This is the most common tax people are familiar with. This is one of the
most common ways your state and local government generate revenue and
can often range from a few percentage points to more than ten percent of
the cost of goods! Every time you go shopping, there is a good chance you
are paying this tax. Buying toothpaste, paper towels, soda, and clothing will
all have sales tax attached to the final price.
Vendor Privilege
These taxes are imposed on retailers for the privilege of doing business in a
state. Think of this as a licensing tax to operate a business. It is different
than a retail sales tax because it is charged to the seller rather than the
consumer. Businesses usually have the option of paying this tax out of their
own pocket or passing it along to customers in the form of higher prices.
Excise
This tax is usually charged on items that are not considered necessary for
survival. Cigarettes and alcohol usually have an excise tax tied to them.
These taxes are paid by the people who produce them or the wholesalers.
These taxes ultimately raise the price we pay for these items. For example,
a bottle of wine that normally costs $9 may have an excise tax of $3 on it.
The end result is that you will pay $12 for that bottle of wine.
Use
This is charged to consumers when retail sales tax wasn't charged but
probably should have been. You may be responsible for declaring and
paying a use tax in your home state when you purchase products from an
internet site, catalog, or television network that does not charge retail sales
tax in the state in which you live.
Value-added, Gross Receipts¸ and Wholesale
These are all additional ways that government authorities can raise revenue
based on sales and production of products and services.
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Types of sales
1. Interstate: Interstate business is business conducted between states.
For example, if your company in state A provides a product or service for
someone in another state (state B), you are conducting interstate
business. Intrastate business is business conducted within a particular
state. Section 3(a) of the Central Sales Act, 1956 provide definition of
nature of inter-State
2. Intrastate: Intrastate business is business conducted within a
particular state. So if a company and customer are in the same state,
then you are conducting intrastate business.
3. Export: The term export means shipping in the goods and services out of
the jurisdiction of a country. The seller of such goods and services is
referred to as an "exporter" .In international trade, "exports" refers to
selling goods and services produced in the home country to other
markets. The sale of such goods adds to the producing nation's gross
output.
4. Import: A good or service brought into one country from another. The
party bringing in the good is called an importer. Along with exports,
imports form the backbone of international trade. The higher the value
of imports entering a country, compared to the value of exports, the
more negative that country's balance of trade becomes.
Interstate sales, Export, Import is governed by CST Act (Central State Tax), but
Intrastate sales is governed by State VAT Act.
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Types of Interstate Tax
Central sales tax is an indirect tax which is imposed by the central government on
taxable turnover of interstate sale of goods made by a registered dealer during
the prescribed period in the course of business.
In short, it is a tax on “Inter-state Sales” (sales made from one State to another
State). Interstate Sale as per Sec. 3, of Central Sales Tax, 1956 are of two types:
Points to be noted:
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This is not Interstate sale
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Sec. 3 (b) Sale by Transfer of Documents [Deemed Inter-State Sale]:
The concept is used to indicate whether the buyer or the seller of the goods
has taken possession, and who is paying for transport.
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Movement for sales Sales in Movement
Explanation
Case 1
Mr. A send from Delhi good to Mrs. B at Faridabad, this refer to Direct
sales as Mrs. B takes the possession of the goods when she receive
them.
Case 2
Mr. A send from Delhi good to Mrs. B at Faridabad, this refer to Direct
sales but in this case Mrs. B does not takes the possession of the goods
when she receive them. She directly send it to Mr. C at Gurgaon which
is meant as transits in sales as she does not take the possession of the
good . In Sales in the course of transit; there is “No need for the
payment of Tax”
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Export
The term export means shipping in the goods and services out of the jurisdiction
of a country. The seller of such goods and services is referred to as an "exporter"
.In international trade, "exports" refers to selling goods and services produced in
the home country to other markets. The sale of such goods adds to the producing
nation's gross output.
Case 1
Mr. B Mr. C
Mr. A is a
Export the Purchased
manufactur goods from
er and sold good to
Mr. B
goods to Mr. C
Mr. Bpurchase
“Immediate at before export Tax is exempted”-No Sales
Interstate
Tax’s(CST)”
Case 2
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Mr. A is a Mr. B Mr. C Mr. D
Sell Export Purchase
manufact
goods d goods
urer and the
to Mr. from Mr.
sold good C
D
goods to to
Mr. B at Mr. C
InterstatTaxable Tax-free
In 2nd caseethere are 2 immediate purchase before export. Therefore
first purchase is taxable and second is “tax-free”.
Road Permit
Road permit is a form of declaration for import of goods from other
state issued by commercial tax department. When a party purchasing
goods from other state party. The selling party ask for the road permit
from the purchasing party.
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Border
State A State B
Road Permit
Required
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Board of Direct taxes (CBDT), which comes under the Indian Revenue Services
(IRS).
TDS is collected as a means to keep a stable revenue source for the government
throughout the year, while desisting people from avoiding taxes.
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Advantages of TDS:
TDS is based on the principle of ‘pay as and when you earn’. TDS is a win-win
scenario for both the taxpayers and the government. Tax is deducted when making
payments through cash, credit or cheque, which is then deposited with the central
agencies.
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Central or State Financial Corporations.
Banking companies.
Interest paid under Direct Taxes or refund from the IT department.
UTI, LIC and other insurance or co-operative societies.
Interests earned from recurring deposit or savings account in cooperative
societies or banks.
Interest in Indira Vikas Party, KVP, or NSC.
Interest earned in NRE account.
All institutions notified under no-TDS.
Apart from these, there are other avenues also where TDS may not be applicable,
such as interest on compensation from MVCT (Motor Vehicles Claims Tribunal).
Therefore, taxpayers are advised to check if their interest income is liable for TDS
with a particular institution or not.
TDS Certificate:
As TDS is collected on an ongoing basis, it can be difficult to keep track of
deductions by an individual. As per Section 203 of the ITA, the deductor has to
furnish a certificate of TDS payment to the deductee/payee. This certificate is also
offered by banks making deductions on pension payments etc. The certificate is
typically issued at the deductor’s own letterhead. Individuals are advised to request
for TDS certificate wherever applicable, and if not already provided.
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Forms under CST
To avoid cascading effects of CST and to avail concessions or exemptions, various
forms, like C Form, F Form, H Form, etc. have been prescribed which can be
issued / utilized by adhering to certain procedures.
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C Form / Form ‘C’
The C Form comes into picture when interstate trade takes place. The buyer dealer
of different state issues C Form for compliance of CST Rules of the state of selling
dealer. The buyer can purchase goods at concessional rates, against C Form, in the
inter-state sale. C Form can be issued only by a registered dealer to another
registered dealer. It can be issued, generally, in respect of raw materials, packing
materials goods covered by the certificate of registration of the issuing dealer. If
the buyer dealer fails to provide C Form, the seller dealer has to pay full CST in
due course, therefore it is advisable to obtain appropriate security until C Form is
received by the seller dealer in due course.
The F form is required for stock transfer to branches / consignment agents or vice-
versa from one state to another without attracting charge of CST. As per section
6A(1) of the CST Act, submission of F form with complete details of movement of
goods is mandatory to prove stock transfer. Otherwise, the transaction will be
treated as normal central sale for all purposes of CST Act including for charging
CST at applicable rates. In fact F Form is an evidence to prove that the goods are
sent out to other states on stock transfer basis and not on sale basis. The
consignment agent/ branch/ HO receiving such stock transfer consignment is
required to issue F Form to the selling outlet (HO/ Branch/ Consignment Agent) or
transferror dealer. It may be noted in this regards that if the movement of goods is
occasioned on account of sales, the movement will be treated as interstate sales.
There are many disputes with the VAT Authorities on this issue so the transfreror
unit has to take due care to avoid applicability and attraction of CST on such
transfers. These matters are open for investigation by the VATO and are not settled
until the assessment order is passed by the VATO in due course.
The H Form under CST is issued when the buyer is an exporter and buys the goods
for the purpose of exports. If the exporter buyer issues H form, the selling dealer is
not required to charge or pay any CST on the transaction. The selling dealer should
obtain Form H from the exporter buyer in due course along with Bill of Lading for
onward submission to the VAT Deptt. or else eventually the selling dealer has to
pay CST at full rate as may be applicable. Selling dealer should always obtain
security to the extent of amount of applicable CST / VAT which is not charged due
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to anticipated issuance of Form H and the same may be released after receipt of
duly filled up Form H along with copy of the Bill of Lading in due course.
Form E1
This form is issued by the dealer who makes the first inter-state sale during
movement of goods from one state to another. This enables the purchaser to
claim exemption from CST on the second Inter-State sale during the movement of
goods by transfer of document of title.
Form E2
This form is used by the second or the subsequent seller when the goods move
from one state to another in the series of Inter-State sales by transfer of
document of title. This form enables the purchaser to claim exemption from CST
on subsequent sales of goods.
Service Tax
Service
A Service is an economic activity where an immaterial exchange of value occurs. When a
service such as labor is performed the buyer does not take exclusive ownership of that
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which is purchased, unless agreed upon by buyer and seller. The benefits of such a
service, if priced, are held to be self-evident in the buyer's willingness to pay for it.
Using resources, skill, ingenuity, and experience, service providers’ effect benefit to
service consumers. Thereby, service providers participate in an economy without the
restrictions of carrying inventory (stock) or the need to concern themselves with bulky
raw materials. Furthermore, their investment in expertise does require consistent
service marketing and upgrading in the face of competition.
Sometimes services are difficult to identify because they are closely associated with a
good; such as the combination of a diagnosis with the administration of a medicine. No
transfer of possession or ownership takes place when services are sold, and they (1)
cannot be stored or transported, (2) are instantly perishable, and (3) come into
existence at the time they are bought and consumed.
1. Intangibility
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for transport, storage or stocking of services. Furthermore, a service can be
(re)sold or owned by somebody, but it cannot be turned over from the service
provider to the service consumer.
2. Inventory (perishability)
Services have little or no tangible components and therefore cannot be stored for
a future use. Services are produced and consumed during the same period of
time.
Services are perishable in two regards:
a. The service relevant resources, processes and systems are assigned for
service delivery during a definite period in time. If the designated or
scheduled service consumer does not request and consume the service
during this period, the service cannot be performed for him. From the
perspective of the service provider, this is a lost business opportunity as he
cannot charge any service delivery; potentially, he can assign the resources,
processes and systems to another service consumer who requests a
service. Examples: An empty seat on a plane never can be utilized and
charged after departure.
b. When the service has been completely rendered to the requesting service
consumer, this particular service irreversibly vanishes as it has been
consumed by the service consumer. Example: the passenger has been
transported to the destination and cannot be transported again to this
location at this point in time.
3. Inseparability
The service provider is indispensable for service delivery as he must promptly
generate and render the service to the requesting service consumer. In many
cases the service delivery is executed automatically but the service provider must
preparatorily assign resources and systems and actively keep up appropriate
service delivery readiness and capabilities. Additionally, the service consumer is
inseparable from service delivery because he is involved in it from requesting it up
to consuming the rendered benefits.
4. Inconsistency (variability)
Each service is unique. It is one-time generated, rendered and consumed and can
never be exactly repeated as the point in time, location, circumstances,
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conditions, current configurations and/or assigned resources are different for the
next delivery, even if the same service consumer requests the same service. Many
services are regarded as heterogeneous or lacking homogeneity and are typically
modified for each service consumer or each new situation (consumerised).
5. Involvement
Service tax
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are subsumed with 2% of "Swachh Bharat Cess(0.50%)" has been notified by the
Government.
From 15 November 2015, the effective rate of service tax plus Swachh Bharat
Cess, post introduction of Swachh Bharat Cess, was 14.5%. Currently, Swachh
Bharat Cess and Krishi Kalyan Cess would also be levied on all services on which
Service Tax is being levied and therefore, the Service Tax (including Swachh
Bharat Cess and Krishi Kalyan Cess) applicable from 1 June 2016 has become 15%.
As per Service Tax Law it is mandatory for the following categories of persons
obtain registration:-
Every person mentioned above will have to get themselves registered under the
service tax law within 30 days from the date of commencement of such service or
business.
Whereas in case of service provider whose aggregate value of taxable service not
exceeded 9 lakhs in a financial year not need to obtain registration, where in case
he has obtained registration he is liable to payment of service tax only if the value
of taxable services exceeds 10 lakhs rupees.
http://www.aces.gov.in/STASE/ui/jsp/common/registerWithACES.do
The Account created on the above website would be your permanent account for
all matters related to Service Tax and you are requested to remember the username
and the password for the same. After logging into your Account – an assessee is
required to furnish the ST-1 form available under the REG tab.
On clicking on Fill ST-1, the ST-1 Form will open and the Assessee is required to
furnish details as required in the ST-1 Form. The Form has been attached herewith
for your Ready Reference.
http://www.aces.gov.in/STASE/ui/jsp/common/statelocation.do
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Due Date for Payment of Service Tax
As per Rule 6 of the Service Tax Rules 1994, the due date for payment of service tax is separate
for Individual/ Partnership Firms and others.
The Due Date for Payment of Service Tax in case of Individual/Partnership Firm is 5th of the
Following Quarter in which the Payment is received. However, in case the Service Tax Provider
opts for online payments, he is given a grace period of 1 day and thus the Due Date for Payment
of Service Tax if the Payment is made online is 6th of the following Quarter.
For Others
For all Service Tax Payers (except Individual and Partnership Firms), the Due Date for payment
of Service Tax is 5th of the Following Month in which the Service Tax is collected. However, if
the payment is made online – the due date for payment of service tax becomes 6th of the
following month
Exception: – Service Tax Collected for the month/quarter ending March shall be payable by 31st
March of the said calendar year
The Payment Schedule has been summarized below for ready reference
From the above it is clear that it is beneficial to pay the amount due online as a grace period of 1
day is allotted and moreover the Tax Payer does not have to stand in long queues for depositing
the Service Tax.
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Service Tax Return Filing: Due Date 25th April
Every Assessee who has registered for Service Tax and has been assigned a Service Tax
Registration No. is required to file a Service Tax Return on a half yearly basis. Irrespective of
whether the Assessee has provided taxable services in the period or not, he is required to file his
Service Tax Return on a half yearly basis before the due dates as mentioned below
Although the Service Tax Return is filed half-yearly, payment of service tax received by the
Service Provider shall be deposited with the Govt. on a monthly/quarterly basis.
The Service Tax Return is required to be filed in “Form ST-3” or “ST-3A” as the case may be
and shall include the following monthwise details
As per Notification No. 43/2011 – Service Tax dated 25-08-2011, efiling of Service Tax Returns
in Form ST-3 has been made mandatory for all assesses from 1st Oct 2011. Earlier physical
filing was also permitted but now all asseesees are required to file the Return online on
www.aces.gov.in.
The assesse shall register on this website and then file ST-3 return with the username and
password allocated to him at the time of online registration. The ST-3 Excel Return filing utility
can be downloaded from http://acesdownload.nic.in/
For an Assessee who provides more than one taxable service, only a single service tax return will
sufficient. However the details in each of the columns of the Forms ST-3 have to be furnished
separately for each of the services rendered by him.
If the Return is being filed for the 1st time, it shall be accompanied by a list of all accounts
maintained by the assessee in relation to service tax including memorandum received from his
branch offices.
In case of any error or omission in the Return, an assessee shall furnish a Revised Return of
service tax within 90 days from the date of submission of the Original Return.
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Late fee for Delay in filing Service Tax Return
If the Service Tax Return is not filed before the due date of filing of Service Tax
Return, Late Fee shall be liable to be paid as follows
More than 30 days Rs. 1000 + Rs. 100 per day beyond 30 days
Point of Taxation
Point of taxation means the point in time when a service shall be deemed to have been
provided. The point of taxation enables us to determine the rate of tax, value of taxable
service, rate of exchange and due date for payment of service tax.
• The time when the invoice for the service provided or agreed to be provided is issued;
• If invoice is not issued within prescribed time period (30 days except for specified
financial sector where it is 45 days) of completion of provision of service, then the date
of completion of service;
• The date of receipt of payment where payment is received before issuance of invoice
or completion of service.
Therefore agreements to provide taxable services will become liable to pay tax only on
issuance of invoice or date of completion of service if invoice is not issued within
prescribed period of completion or on receipt of payment.
ANALYSIS
As per rule 3 of the said rules, point of taxation would be determined as follows:-
For the
1. purpose ofisthis
The invoice rule, wherever any advance by
issued
whatever name
within theknown,
prescribedis received by the service
(a) Date of invoice
period of 30 days* from
provider towards the provision of
the date of completion
or taxable service, the
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Where a service is taxed for the first time, then,—
(a) no tax shall be payable to the extent the invoice has been issued and the
payment received against such invoice before such service became taxable;
(b) no tax shall be payable if the payment has been received before the service
becomes taxable and invoice has been issued within 14 days of the date
when the service is taxed for the first time.
ANALYSIS
This rule specifically discusses the situation where a service is charged to tax for the
first time i.e. becomes taxable for the first time.
The rule provides that:-
1. If an invoice has been issued and payment is received before a service
becomes taxable, no tax would be charged even if the service is provided
after the same has become taxable. This provision is consistent with the other
similar provisions in these rules, and ensures that a financial transaction
which has achieved finality before a service was taxable shall not be
reopened for collection of tax.
2. If any payment has been received prior to a service being chargeable to tax,
no tax shall be chargeable if an invoice has also been issued within 14 days
of the date when the service is taxed for the first time.
However, 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.
ANALYSIS
1. Point of taxation in case of services taxed under reverse charge
mechanism: In respect of the persons liable to pay service tax under
reverse charge mechanism, the point of taxation shall be the date on which
payment is made subject to the condition that the payment is made within a
period of six months of the date of invoice.
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In case 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 rule 7 “does not exist”. It
implies that if the service receiver fails to make the payment within six months from
the date of invoice, the point of taxation shall be determined under the general rule-
rule 3.
2. Point of taxation in case of import of services by “associated
enterprises” In case of “associated enterprises” , where the person
providing the service is located outside India, the point of taxation shall be:-
(a) the date of debit in the books of account of the person receiving the service
or
(b) date of making the payment
whichever is earlier.
Rule 8A is the residual rule to determine the point of taxation by way of best judgment to
handle situations where the tax-payer is unable to furnish one or more of the details
needed i.e. date of payment or date of invoice or both to determine point of taxation. It
provides as follows:-
Where the point of taxation cannot be determined as per these rules as the date of
invoice or the date of payment or both are not available, the Central Excise Officer,
may, require the concerned person to produce such accounts, documents or other
evidence as he may deem necessary and after taking into account such material and
the effective rate of tax prevalent at different points of time, shall, by an order in
writing, after giving an opportunity of being heard, determine the point of taxation to the
best of his judgment .
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Place of Provision of Services Rules, 2012
Place of provision of service tax refers to the location where the person is liable to pay tax
according to the Financial Act 1994.
Location of Service Provider and Service Receiver [Rule 2 (h) & (i)]:
As per the said rule, the locations of service provider and service receiver will be determined as
under:
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most directly concerned with the provision directly concerned with the use of
of services; and services; and
In absence of (i) (ii) or (iii) above, his usual In absence of (i) (ii) or (iii) above, his
(iv) place of residence or its place of usual place of residence or its place of
registration or constitution. registration or constitution.
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immovable property.
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Place of destination of goods
Provider of goods transportation services
10 [In case of services provided by goods
(other than by mail or courier)
transportation agency- the location of the
person liable to pay tax].
Where the passenger embarks (boards) on
a conveyance for a continuous journey
(i.e., the journey which has no stopover
between any of the legs of the journey for
11 Provider of passenger transportation services
which one or more than one ticket/invoice
is issued at the same time by one or more
service providers either themselves or
through their agents).
Provider of services on board a conveyance
during the course of a passenger transport
The first scheduled point of departure of
12 operation (including the services intended to
the conveyance for the journey.
be wholly or substantially consumed while on
board)
Notwithstanding anything contained in any of
The place in accordance with the rule that
the above rules, where the provision of
14 occurs later among the rules that merit
service is, prima facie determinable in terms
equal consideration.
of more than one rule.
Further, Rule 13 confers powers to the Central Government to notify any description of service
or the circumstances in which the place of provision of service shall be the place of effective use
or enjoyment of a service, with the object of preventing double or non-taxation of a provision of
service or for uniform application of rules.
Conclusion:
The above analysis of the provisions of Place of Provision of Services Rules, 2012 and other
connected provisions of law it is clear that the legislature has tried to increase the tax base as far
as service tax is concerned. Secondly, the above rules framed are the step towards minimizing
the litigation and bringing clarity in the minds of both the tax payers and tax administrators.
CENVAT CREDIT
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CENVAT Credit is a scheme where the manufacturers or the output service providers are
allowed a set off of the taxes paid on the inputs or the input services that are used while
manufacturing the final products or providing the output service . The word CENVAT Credit is
composed of two words CENVAT and Credit, where CENVAT means Central Excise Duty or
Service Tax and also Custom duty (in a few cases)
Credit means a subsequent claim of set-off of something paid earlier. Therefore , CENVAT
credit means credit of ST/excise and customs(additional duty) paid on purchase of inputs , input
services and capital goods…..such credit can be used/utilized/set-off against ST/excise payable
on clearance of manufactured products and rendering of services…
For Example-Bata India Ltd. a shoe manufacturing co. use the leather as raw material which is
purchased with excise duty as charged by supplier, Bata also uses the services of fashion
designers to make fashionable shoes, thus it paid ST on bills raised by fashion designers, Now
Bata Ltd manufactured shoes and want to clear the same from factory, in that case Bata Ltd
liable to pay excise duty on manufactured shoes, such excise duty can be paid by utilizing the
credit of input excise and input ST as paid and still if anything left unpaid the same to be paid in
cash.
A. All goods used in factory by manufacturer for manufacturing final products and also
includes goods used by service provider to provide output service.(service provider can
use the same even outside the service station/premises)
B. Input also include goods used for generation of electricity or steam for use in factory
(captive consumption) inputs may be used outside the factory i.e. at electricity plant site
but electricity/steam to be used in factory only)
C. iii)All accessories cleared along with final product provided the value of the same is
included in the value of Final product
D. For Example Colgate Limited manufacture toothpaste but clear the toothpaste in packed
box with a free toothbrush attached therewith but in reality the same is not at all free
because the value of same is included in the MRP of paste itself and thus toothbrush
qualify as input.
E. Any goods used for providing free warranty (after sale services)
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2. Input Services: Input services means
– clearance of final products upto place of removal and not beyond that….
iii) Input services also include these 18 services listed below (Inclusive clause)
These 18 services are eligible as input service for both manufacturer and service provider…and
these services are always deemed to be use for manufacturing/service operation
(Like machineries, boilers, various tools , spare parts and accessories of various equipments and
instruments)
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a. mould-a container used to design liquid in desired shape
c. jigs-a device that guides the tools used in any manufacturing process
iv) refractories and refractory materials where refractory – means lining consisting of materials
with a high melting point used to line the inside walls of a furnace
vii) Motor vehicles (other than meant for transport of goods or persons….but including dumpers,
tippers , cranes and loader used for handling of machineries etc. )
Cash Management
Cash is a most liquid assets that a firm owns. It includes money and
instruments like cheque, money order or bank draft which normally
accept for deposit and immediate credit to the depositer’s account. Cash
is the medium of exchange to purchase the good and services to
discharge the liability
Cash management refers to a broad area of finance involving the
collection, handling, and usage of cash. It involves assessing market
liquidity, cash flow, and investments.
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Cash management is the corporate process of collection and managing
cash, as well as using it for investing. It is a key component of ensuring
a company’s financial stability and solvency .Corporate treasurers or
business manager are frequently responsible for overall cash
management and the related responsibilities to remain insolvent. Cash
management is the end process of financial management.
Common services
The following is a list of services generally utilized by larger businesses and
corporations:
1. Account reconciliation
Balancing a chequebook can be a difficult process for a very large business, since it
issues so many cheques it can take a lot of human monitoring to understand which
cheques have not cleared and therefore what the company's true balance is. To address
this, banks have developed a system which allows companies to upload a list of all the
checks that they issue on a daily basis, so that at the end of the month the bank statement
will show not only which checks have cleared, but also which have not.
5. Balance reporting
Corporate clients who actively manage their cash balances usually subscribe to secure
web-based reporting of their account and transaction information at their lead bank.
These sophisticated compilations of banking activity may include balances in foreign
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currencies, as well as those at other banks. They include information on cash positions as
well as 'float' (e.g., checks in the process of collection). Finally, they offer transaction-
specific details on all forms of payment activity, including deposits, checks, wire
transfers in and out, ACH (automated clearinghouse debits and credits), investments, etc.
7. Controlled disbursement
This is another product offered by banks under Cash Management Services. The bank
provides a daily report, typically early in the day, that provides the amount of
disbursements that will be charged to the customer's account. This early knowledge of
daily funds requirement allows the customer to invest any surplus in intraday investment
opportunities, typically money market investments.
8. Lockbox—wholesale services
Often companies (such as utilities) which receive a large number of payments via checks
in the mail have the bank set up a post office box for them, open their mail, and deposit
any checks found. This is referred to as a "lockbox" service.
9. Lockbox—retail services
are for companies with small numbers of payments, sometimes with detailed
requirements for processing. This might be a company like a dentist's office or small
manufacturing company.
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Reverse positive pay is similar to positive pay, but the process is reversed, with the
company, not the bank, maintaining the list of checks issued. When checks are presented
for payment and clear through the Federal Reserve System, the Federal Reserve prepares
a file of the checks' account numbers, serial numbers, and dollar amounts and sends the
file to the bank. In reverse positive pay, the bank sends that file to the company, where
the company compares the information to its internal records. The company lets the bank
know which checks match its internal information, and the bank pays those items. The
bank then researches the checks that do not match, corrects any misreads or encoding
errors, and determines if any items are fraudulent. The bank pays only "true" exceptions,
that is, those that can be reconciled with the company's files.
A wire transfer is an electronic transfer of funds. Wire transfers can be done by a simple
bank account transfer, or by a transfer of cash at a cash office. Bank wire transfers are
often the most expedient method for transferring funds between bank accounts. A bank
wire transfer is a message to the receiving bank requesting them to effect payment in
accordance with the instructions given. The message also includes settlement
instructions. The actual wire transfer itself is virtually instantaneous, requiring no longer
for transmission than a telephone call.
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Objective of Cash Management
2. Minimizing the cash balance: Investment in idle cash balance must be reduced to
the minimum. This objective of cash management is based on the idea that unused
asset earns no income for the firm. The funds locked up in cash balance are a dead
investment and has no earning. Therefore, whatever cash balance is maintained,
the firm is foregoing interest income in that balance. The objective o the cash
management therefore, should be to keep minimum cash balance.
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Cash management is concerned with management of cash in such a way as to
achieve the generally accepted objectives of the firm- maximum profitability with
maximum liquidity of the firm. It is the management's ability to recognize cash
problems before they arise, to solve them when they arise and having made
solution available to delegate someone carry them out.
1. Cash management ensures that the firm has sufficient cash during peak times for
purchase and for other purposes.
2. Cash management helps to meet obligatory cash out flows when they fall due.
4. Cash management helps to arrange for outside financing at favorable terms and
conditions, if necessary.
5. Cash management helps to allow the firm to take advantage of discount, special
purchases and business opportunities.
6. Cash management helps to invest surplus cash for short or long-term periods to
keep the idle funds fully employed.
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Bibliography
BHEL.Com
Tenderproess.weebly.Com
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Bms.co.in
Chrom.com
Study.com
Smallbusiness.com
Investopedia.com
Chartereclub.om
Kalyanity.blogspot.in
Wikipedia.org
Magazine
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