SUMMER TRAINING REPORT ON

Taxation

For

Sakha Engineers Pvt Ltd.

By

Anurodh Narang 187

In partial fulfillment for the award of Post Graduate Diploma In Management 2011-13

New Delhi Institute of Management

50 (B&C), 60, Tughlakabad Institutional Area, New Delhi-110062 E-mail : placement@ndimdelhi.org Website : www.ndimdelhi.org

1|Page

SUMMER TRAINING REPORT ON

Taxation

For

Sakha Engineers Pvt Ltd.

Under the supervision Of

Mr. Ashok Malhotra

Submitted ByAnurodh Narang Roll number 187

Submitted toProf. V.K. Mahajan

2|Page

CERTIFICATE

3|Page

ACKNOWLEDGEMENT
I wish to express my sincere gratitude to my institute to provide this opportunity to learn TAXATION. There is always discussion with professionals about conceptual matters, which enhance the idea and the knowledge of trainee. Thereby, I would like to acknowledge the contribution and support that each persons at Sakha Engineers Pvt Ltd. extended to me during my training period. I would also like to express my special thanks to my guide Mr. A.Malhotra (V.P.-Finance), Manoj, Shashank, Pradeep who provide me valuable insight about aspect of taxation with respect of the company and the external environment with which it associated.

ANURODH NARANG

4|Page

DECLARATION

I Anurodh Narang student of New Delhi Institute of Management (2011-13) declare that every part of the Project Report Taxation submitted by me is original. I was in regular contact with my faculty guide and contacted 8 times for discussing the project.

Date of project Submission:______________

Faculty Mentor's Comments

5|Page

EXECUTIVE SUMMARY The project contains the brief description of the Taxation. This Report analyses fundamental reforms of corporate income tax systems. This Report presents the trends in the taxation of corporate income. The data shows that corporate tax rates have been declining during the last decade. Larger-sized OECD countries continue to levy corporate taxes at higher rates than the smaller-sized OECD member countries. Corporate tax rates will probably continue to decrease in the near future. However, whether it will be possible to further compensate these rate reductions by additional base broadening measures remains to be seen. The analysis of levying a corporate tax indicates that no strong case can be made for the exemption from tax of the return on capital income either the normal return or the economic rents at the corporate or personal level. In fact, there are good reasons to tax capital income at the corporate level. The main reason for imposing a corporate tax is that the tax plays an important With holding function, acting as a backstop to the personal income tax. The corporate tax might be needed to avoid excessive income shifting between labour income and capital income.

6|Page

CONTENT
S.NO. TOPIC PAGE NUMBER 1 2 PROFILE OF THE ORGANISATION OVERVIEW INDUSTRY OF THE GAS PIPELINE
9 16

3 4

MISSION AND VISSION GOVERNMENT POLICIES AND TAXATION ASPECTS

29 30

5 6 7 8 9 10 11 12

TAXATION INCOME TAX SALE TAX VAT PAN EXCISE DUTY CUSTOM DUTY FINANCE OF SEPL

32 32 44 48 52 54 56 61

7|Page

13 14 15

CONSTRAINTS FACED CONCLUSION BIBILIOGRAPHY

64 65 68

8|Page

PROFILE OF THE ORGANISATION

Sakha Engineers Pvt. Ltd. is ISO 9001:2008 Certified technical organization which is approved by Hindustan Petroleum Corporation Ltd. (HPCL), Indian Oil Corporation Ltd. (IOCL) and Bharat Petroleum Corporation Ltd. (BPCL) as turnkey Contractors for Consultancy, Fabrication and Erection of Commercial and Reticulated LPG installations and also approved contractor from City Gas Distribution (CGD) Companies for Turnkey projects of Natural Gas Pipeline System. SAKHA manufactures all kind of Commercial and Industrial LPG / NG equipments. At present we are doing various projects for all major builders in North and all over India for installation of LPG / NG Domestic Reticulated and Commercial System, consisting more than 35000 Residential Flats and 100 Restaurants / Commercial Premises. Sakha Engineers Pvt. Ltd. also provides technical support to the clients through Consultancy Services as mentioned below:1. Designing / Detailing of Complete System. 2. Execution as per prescribed specification and standard Codes. 3. Finalization of Oil Company. 4. Approval from Oil Company. 5. Commissioning of LP Gas System. 6. Operational training to the customers. 7. Inspection and maintenance of the facility. 8. After sales services and support through our professional and technical team.
9|Page

9. Emergency service at your door steps.

Sakha Engineers Pvt. Ltd is authorized HPCL gas distributor. We can assure you uninterrupted LPG gas supply for residential, commercial and industrial sectors. Our sister concern Sakha Gas Pipelines Pvt. Ltd. is engaged in executing projects for Liquefied Petroleum Gas Pipelines / Natural Gas Pipelines in Delhi / NCR and other parts of India and abroad. In addition we are also engaged in sales of gas gadgets and gases. We are also specialized in conversion from HSD/Diesel/LDO/FO to Liquefied Petroleum Gas and Natural Gas. The company is manned with highly experienced personnel from Gas Pipeline industry. After erection, commissioning and successful execution of the project, we also support our clients by undertaking Annual Maintenance Contracts, after sales service of equipments, wherein our dedicated team stationed at site Sakha Engineers Pvt. Ltd. Sakha Engineers Pvt. Ltd is authorized HPCL gas distributor. We can assure you uninterrupted LPG gas supply for residential, commercial and industrial sectors. Our sister concern Sakha Gas Pipelines Pvt. Ltd.is engaged in executing projects for Liquefied Petroleum Gas Pipelines comprising of Engineers are always available on call for any problem at site. These services are looked after by our other sister organization Sakha Services Pvt. Ltd. Our another sister concern, Sakha Fire Services Pvt. Ltd. is engaged in executing projects for Fire Pipelines, Fire Detection, Fire Alarm Systems, Fire Suppression and Fire Fighting Systems, etc. In Addition we are also providing consultancy for the same and sales of Fire related Gadgets.

10 | P a g e

Sakha Engineers Pvt. Ltd.

Sakha Engineers Pvt. Ltd. is a technical organization which is approved by Hindustan Petroleum Corporation Ltd. (HPCL), Indian Oil Corporation Ltd. (IOCL) and Bharat Petroleum Corporation Ltd. (BPCL) as turnkey Contractors for Consultancy, Fabrication and Erection of Commercial and Residential Reticulated LPG / NG pipeline installations & also working with City Gas Distribution Companies for Turnkey Projects of Natural Gas Pipeline System.

Our presence in implementing LPG / NG systems is well known to the construction industry in North India and now expanding our operations all over India. Currently doing major projects at H.P, Punjab, U.P, Uttaranchal, Haryana, Delhi/NCR, Rajasthan, M.P, Maharashtra, Jharkhand, West Bengal and Karnataka.

We are proud to be associated with almost all 5 Star Hotels/Malls of Delhi/Gurgaon/Noida etc.

The Company is manned by highly experienced personnel from piping industry of Oil and Natural Gas. We are specialized in design and detail Engineering of The complete LPG / PNG Reticulated System along with sale of Liquefied Gas/Natural Gas equipments all over India. The company is manned by highly experienced from Engineering

Procurement & Construction (EPC) Companies. Sakha is a ISO certified 9001- 2008 company. We are also IOCL facilitators for commercial gas for all over India.

11 | P a g e

Sakha was formed in 1986 and is working under the able guidance of our Chairman emeritus Mr. Amarjit Singh Kohli, who was Director, Bureau of Indian Standards and served there for 20 years. He was also National Technical Secretary of BIS for 20 years and prepared all IS specifications on LPG cylinders, regulators, valves, pipes, pressure vessel, boilers and other gas equipments.

The company has top class, qualified professionals, Managers, business executives and Engineers, possessing considerable technical, financial, managerial and administrative expertise. The day to day operations of the Company are managed by representative of the Company. The management team is assisted by a team of highly qualified and experienced professionals with excellent expertise and experience in their respective fields.

Mr.Amarjeet Singh Kohli, Chairman Emeritus Age: 69 years Total Experience: 45 years Education: B.E (Mech.) Ex. Director BIS (Bureau of Indian Standards) Designation: Chairman Emeritus Experience in Relevant Field: 20 years experience as national technical secretary of BIS for standardization of LPG cylinder requirements and 25 years experience in designing and erection of LPG / PNG installation

Mr. Harsh Kohli, Director Age: 30 years Total Experience: 8 years Education: MBA Designation: Director Experience in Relevant Field: A leader and a Coach for his company doing business in the field of Design & turnkey projects of LPG /NG Pipe Line Installations, Fuel Conversations. Fire Fighting Jobs etc. Expertise in General Management/Business Development and Man Management.
12 | P a g e

Dr. Amarjeet Kaur Kohli, Director Age: 65 years Total Experience: 38 years Education: MBA ((Ex. Director-CGHS) Designation: Director Experience in Relevant Field: Expertise in Health & Safety Management, Administration, Compensation & Benefits, including Govt.Rules, Regulations & Statutory Requirements.

Mr. S. D. Sharma, President Age: 60 years Total Experience: 35 years Education: M.Tech. B Sc. DBM, 1st Class Mines Manager [Ex. V.P. Indian Oil Tanking Ltd., Ex-GM- IOCL/IBP] Designation: President Experience in Relevant Field : Extensive 40 years experience in Refinery Projects, Infrastructure Green Field Projects, Steel/Oil/Chemical, etc.

Mr. N. N. Kakkar, Vice President Projects & Services Age: 70 years Total Experience: 42 years Education: B.E (Civil.), Ex. DGM Projects - IOCL Designation: Vice President Projects & Services Experience in Relevant Field: Having 40 years of extensive experience in various field of Oil Operation & engineering in LPG & various other fields

13 | P a g e

Mr. V. K. Bhandari, Vice President- HR/Admin Age: 65 years Total Experience: 42 years Education: Mechanical Engineer ex DGM - HR IOCL Designation: Vice President - HR / Admin Experience in Relevant Field: 30 years of experience in aviation in various departments of the company as head of the local & region. (IOCL).

Mr. Ashok Malhotra, Vice President- Accounts Age: 60 years Total Experience: 31 years Education: Charted Accountant ex - IOCL, Finance Designation: Vice President - Accounts Experience in Relevant Field: Accounts Officer was handling a Regional Office with huge number of offices. Has worked in different capacities at different places and had vast experience of accounts maintenance.

14 | P a g e

Our following clients have appreciated the projects, executed by us at their sites: VIPUL LIMITED BESTECH HOSPITALITIES PVT. LTD. ASSOTECH CONTRACTS (INDIA) LTD. HOTEL EXELSIOR LTD. THE CLERIDGES HOLY FAMILY HOSPITAL INTERCONTINENTAL INDRAPRASTHA MEDICAL CORPORATION LTD. THE PARK HOTEL CJ INTERNATIONAL HOTELS LTD (LE MERIDIAN) TAJ PALACE HOTEL HOTEL ITC MAURYA SHERATON THE IMPERIAL MAB FINLEASE LTD. GRAND HYATT

15 | P a g e

OVERVIEW OF THE GAS PIPELINE INDUSTRY

The structure of the natural gas industry has changed dramatically since the mid-1980. In the past, the structure of the natural gas industry was simple, with limited flexibility and few options for natural gas delivery. Exploration and production companies explored and drilled for natural gas, selling their product at the wellhead to large transportation pipelines. These pipelines transported the natural gas, selling it to local distribution utilities, who in turn distributed and sold that gas to its customers. The prices for which producers could sell natural gas to transportation pipelines was federally regulated, as was the price at which pipelines could sell to local distribution companies. State regulation monitored the price at which local distribution companies could sell natural gas to their customers.

16 | P a g e

SITES OF GAS PIPELINE

S.No Site 1. 2. 3. 4. 5. 6. 7. 8. 9. Indian Oil Corporation ONGC Bharat Petroleum Reliance Petroleum Limited Essar Oil Limited Gas Authority of India Hindustan Petroleum Corporation Aban Oil India Limited

10. Tata Petrodyne 11. Bongaigaon Refinery Gas Projects (India) Private 12. Limited Hindustan Oil Exploration 13. Company Limited 14. India LPG 15. IBP Co. Limited
17 | P a g e

The Recognition:Project Executor on turnkey Basis of reticulated gas pipe line (Residential & commercial) & Fire Fighting for all major builders & Hotels in Delhi/NCR and all over India for installation. Sakha Engineers has been Approved by (HPCL), (IOCL), and (BPCL) as turnkey Contractors for Designing, Consultancy, Fabrication and Erection of Commercial and Reticulated LPG installations and also for manufacturing Commercial/ Industrial LPG/NG equipments. HP Gas Distributorship for LPG supply by Hindustan Petroleum Corporation Limited (HPCL) Intercity & Cross-country gas piping projects. Service Provider for AMC and O & M jobs.

18 | P a g e

19 | P a g e

20 | P a g e

Projects Executed at Sakha:HARYANA # 1 2 3 4 5 6 7 8 9 Project Name Type of Work

10

11 12 13

Ansal Properties & Infrastructure Ltd. Project - Sushant Lok Ansal Properties & Infrastructure Ltd. Project - DSOI (Ansal Mall) Ansal Properties & Infrastructure Limited Project - Ansal Plaza, Gurgaon Bestech Hospitalities Pvt. Ltd. Project - Park Plaza Hotel Bestech Hospitalities Pvt. Ltd. Project - Radisson Suites Hotel Chiranjiv Charitable Trust Project - Chemistry Lab in B-Tech Block Chiranjiv Charitable Trust Project-Kitchen Lab in B-Tech Block DLF Universal Ltd. Project - Cyber City Eldeco Infrastructure & Properties Ltd. Project - Manisonz The Green Wood Co-operative Group Housing Society Pvt. Ltd. Project - GCGHS, Gurgaon Mab Finlease Ltd. Project - Five Star Hotel Sahara India Commercial Corporation Ltd., Project - Sahara Mall Unitech Ltd. Project - Uniworld City

Residential Reticulated 90 Flats + 1 Commercial Commercial Reticulated 3 Restaurants Commercial Reticulated 3 Commercial Commercial Reticulated 3 Restaurants Commercial Reticulated 3 Kitchens Commercial Reticulated 1 Commercial Commercial Reticulated 1 Commercial Commercial Reticulated 24 Restaurants Residential Reticulated 141 Flats + 1 Commercial 45 Flats Commercial Reticulated 3 Restaurants Commercial Reticulated 10 Restaurants Residential Reticulated 527 Flats + 1 Commercial Commercial Reticulated 3 Restaurants Residential Reticulated 506 Flats + 1 Commercial Commercial Residential Reticulated 159 Flats Residential Reticulated 390 Flats Residential Reticulate
21 | P a g e

14 Hotel Marriot Court Yard at Sec-27 , Gurgaon 15 16 17 18 20

Unitech Ltd. Project - Uniworld Garden Unitech Ltd., Project : Sikshantar High School, Gurgaon Unitech Ltd Project : Spa Unitech Ltd Project : The Close North Unitech Ltd.

Vatika Landbase Pvt. Ltd. 22 Project - Vatika City 23 24 25 26 27 28 29 Vatika Hospitality Pvt. Ltd. Project - Vatika Resorts Vatika Hospitality Pvt. Ltd. Project - Vatika Atrium Vatika Hospitality Pvt.Ltd Project: Vatika Jing Gurgaon Punihani International Project - Hotel Building Sector-29, Gurgaon DLF Universal Ltd Project : Aralias Club-Gurgaon Eldeco Infrastructure & Properties Ltd., Project - Eldeco Station 1, Plot No.1, Sec-12, City Center, FBD. Galaxy Hotel (GINC) Sector-29, Gurgaon

Residential Reticulated 630 Flats Commercial Reticulated 4 Restaurants Commercial Reticulated 1 Commercial Commercial Commercial Reticulated 3 Restaurants Commercial Commercial Reticulated Commercial Reticulated (12 Kitchen)

UTTAR PRADESH # Project Name

Type of Work

30 31 32 33 34 35 36 37 38 39 40

Air Force Naval Housing Board Project - Sector 47 Assotech Contracts India Ltd. Project - Windsor Greens Bestech Hospitalities Pvt. Ltd., Project : JOP Hotel ( Park Plaza) Eldeco Infrastructure & Properties Ltd. Project - Ananda Eldeco Infrastructure & Properties Ltd. Project - Green Meadows Pariwar Sahkari Avas Samiti Ltd. Unitech Ltd. Project - IRPPL Mall Omaxe Constructions Ltd. Project - The Forest Ansal Properties & Infrastructure Ltd. Project : Ansal Mall - Gr.Noida Ashiana Homes Pvt. Ltd., Project : Ashiana Upvan Assotech Realty Pvt. Ltd., Project - Windsor Park

Residential Reticulated 383 Flats Residential Reticulated 164 Flats + 1 Commercial Commercial Reticulated 3 Restaurants Residential Reticulated 72 Flats Residential Reticulated 200 Flats Residential Reticulated Commercial Reticulated 30 Restaurants executed Residential Reticulated 105 Flats + 1 Commercial 9 Restaurants Residential Reticulated 450 Flats Residential Reticulated 768 Flats + 7 Commercial
22 | P a g e

DELHI REGION

# 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Project Name

62

Type of Work 4 Commercial Restaurants + Hotel Hans Plaza Boilers 6 Commercial Restaurants + Shangri La Hotel Boilers 8 Commercial Restaurants + ITC Maurya Sheraton Boilers 3 Commercial Restaurants + Holy Family Hospital Boilers 4 Commercial Restaurants + Indraprastha Medical Corpn. Ltd. (Apollo Hospital) Boilers Taj Palace Hotel 7 Commercial Reticulated Boilers 7 Commercial Restaurants + Grand Hyatt Hotel Boilers 6 Commercial Restaurants + The Imperial Hotel Boilers 7 Commercial Restaurants + Le Meridian Hotel Boilers 5 Commercial Restaurants + The Claridges Hotel Boilers 4 Commercial Restaurants + The Park Hotel Boilers 8 Commercial Restaurants + Intercontinental The Grand Hotel Boilers Today Homes & Infrastructure Pvt. Ltd. 7 Commercial Restaurants + Project - West Gate Mall Boilers Unitech Ltd. 40 Commercial Reticulated Project - Rohini Amusement Park Unitech Corporate House (Shantiniketan Buildwell Ltd.), Saket Place, Commercial N.Delhi Gulab Farms Pvt. Ltd., Residential Reticulated 2 Kitchens (Central Park MD's Farm House), Vasantkunj + Boiler Residential Reticulated 4 Unitech MD House installations (Girnar Aesthetics Exports Pvt. Ltd.) Project - Farm House, Vasant Kunj Select Infrastructure Pvt. Ltd. Project -Select City Walk Pragya Products Pvt. Ltd. (BPTP) Project - Shalimar Bagh DLF Services Ltd., Project : Mall, Saket Commercial Reticulated 14 Restaurants Commercial Reticulated 7 Restaurants 18 Restaurants
23 | P a g e

63 64 66

24 | P a g e

PRODUCTS Commercial/Industrial items & Equipments for Hotels/Hospitals/Factories

Burners Adaptors Regulators Mainline Valve Non Return Valve Manifold Gas Measuring Meters LPG/NG Geyser Dosa Bhatti Stainless Steel Table Stainless Steel Trollies LPG/Electric Baking Oven Roll Warmer Potato peeling machine Stainless steel Sink with Drain Board, Wall Mounting Type Dishwashing Machine ELECTRIC/Gas Barin Marie Dech Fat Fryer Electric/ Gas Griller Gas Leak Alarms Pressure Gauges Extension Rod

25 | P a g e

26 | P a g e

Domestic Items:

Domestic Burners Regulators Chimneys Rubber tubes Ball Valves Nozzle Valves Gas Leak Detector Gas Flow Measuring Meter Spares of Gas Stoves Gas Geysers Lighters Automatic Shutdown System Chimney Hoods Cooking Ranges Cook Tops Cooker Hoods Oven Toaster Grill

27 | P a g e

28 | P a g e

Mission
In line with the company's vision statement, SAKHA will deliver the highest value to our customers, suppliers, employees and shareholders as the premier technology marketing, distribution and Services Company, globally. The 21st century is sure to bring more innovation, new services and newer technology, thus new products and services to sell. SAKHA will continue to shape and lead the markets in which it chooses to compete.

Vision
1. Implementation of latest technologies in Gas pipe line projects (Cross country & intercity pipelines, Commercial & Reticulated Pipe lines.) 2. Executing fire Fighting Projects ( Pipelines, Fire detection & Suppression) in most techno feasible innovative ways. 3. Manufacturing LPG/NG equipments with micro quality tolerances. 4. Global presence as a turnkey contractor in diversified fields. 5. Sale & Supply of Gases.( LPG & others) & LPG/NG equipments with friendly after sale support structure. 6. Consultancy , Designing of LPG/ NG Projects.

ABOVE ALL 100 % CUSTOMER SATISFICATION.

29 | P a g e

GOVERNMENT POLICIES AND TAXATION ASPECTS

Compliance with Standards and Regulations 6.45 As explained earlier regarding the various statutory requirements applicable to construction industry, the internal auditor is required to verify the compliance of these statutes and report thereon as a part of his internal audit. Also, the internal auditor needs to verify registration with various statutory authorities and renewal of the same as a part of his audit procedures. 6.46 Apart from the above regulations, the entity may have obtained certifications under various international and Indian organisations for a process or for the entity as a whole. For e.g. ISO 9001 (International Organization for Standardization) certification for various operation processes of an entity, OSHO 2236 (Occupational Safety and Health Administration), an US Department of Labour standard for material handling and storing of material and safety measures for worker. 6.47 ISO 9001:2000 specifies requirements for a quality management system where an organization: (i) Needs to demonstrate its ability to consistently provide product that meets customer and applicable regulatory requirements, and (ii) Aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable regulatory requirements. All requirements of this International Standard are generic and are intended to be applicable to all organizations, regardless of type, size and product provided. The requirements for the Certification include the following:

Major Areas of Internal Audit Significance 95 necessary; and the quality system itself for effectiveness; and 6.48 A organization that has been independently audited and certified to be in conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO 9001 registered".

30 | P a g e

Certification to an ISO 9001 standard does not guarantee any quality of end products and services; rather, it certifies that formalized business processes are being applied. Two types of auditing are required to become registered to the standard: auditing by an external certification body (external audit) and audits by internal staff trained for this process (internal audits). The aim is a continual process of review and assessment, to verify that the system is working as it's supposed to, find out where it can improve and to correct or prevent problems identified. There are other factors such as, choosing a vendor by an entity who has obtained ISO Certification. It is preferred to choose a vendor who is also ISO certified. The internal auditor is required to verify the scope of performance of audit procedures so as to include compliance with these standards also. The internal auditor is required to perform such audit procedures so as to ensure compliance of these standards and effectiveness of the controls prescribed.

INTRODUCTION TO THE PROJECT

31 | P a g e

Taxation

Tax system in India is divided in to two types, Direct Tax and Indirect Tax. Direct Taxes that comprising of income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer. The indirect taxes are levied on goods and services and its ultimate falls indirectly on the consumers. The indirected taxes comprise of sales tax, service tax, VAT, excise duty, custom duty, etc.

Income Tax

Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states.

According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.

The total income of an individual is determined on the basis of his residential status in India.

32 | P a g e

Income Tax Rates Across the World For the Financial Year 2011-12

Country

Personal Income Tax Rate

Australia

0% - 48.5%

Canada

16% - 29%

Estonia

24% - 24%

Denmark

44% - 63%

Hong Kong

0% - 33%

India

0% - 33%

Israel

10% - 49%

33 | P a g e

INCOME TAX RATES/ SLABS FOR THE YEAR 2011-12

In case of individual and HUF Income Level / Slabs Where the total income does not exceed Rs. 1,80,000/-. Where the total income exceeds Rs. 1,80, 000/but does not exceed Rs. 5, 00,000/-. Where the total income exceeds Rs. 5, 00,000/but does not exceed Rs. 8, 00,000/-. Where the total income exceeds Rs. 8, 00,000/-. Education Cess: 3% of the Income-tax. In case of individual being a woman resident in India and below the age of 60 years at any time during the previous year. Income Level / Slabs Where the total income does not exceed Rs. 1, 90,000/-. Where total income exceeds Rs. 1, 90,000/but does not exceed Rs. 5, 00,000/-. Where the total income exceeds Rs. 5, 00,000/but does not exceed Rs. 8, 00,000/-. Where the total income exceeds Rs. 8,00,000/Income Tax Rate NIL 10% Income Tax Rate NIL 10% 20% 30%

20% 30%

34 | P a g e

III. In case of an individual resident who is of the age of 60 years

Income Level / Slabs Where the total income does not exceed Rs. 2, 50,000/-. Where the total income exceeds Rs. 2,50,000/but does not exceed Rs. 5,00,000/Where the total income exceeds Rs. 5,00,000/but does not exceed Rs. 8,00,000/Where the total income exceeds Rs. 8,00,000/-

Income Tax Rate NIL 10% .

20% 30%

B. Association of Persons (AOP) and Body of Individuals (BOI) i. Income-tax: Income Level / Slabs Where the total income does not exceed Rs. 1, 80,000/-. Where the total income exceeds Rs. 1, 80,000/but does not exceed Rs. 5,00,000/-. Where the total income exceeds Rs. 5, 00,000/but does not exceed Rs. 8, 00,000/-. Where the total income exceeds Rs. 8, 00,000/-. Income Tax Rate NIL 10%

20%. 30%

35 | P a g e

ResidenceRules
An individual is treated as resident in a year if present in India

I.

for 182 days during the year or

II.

for 60 days during the year and 365 days during the preceding four

years. Individuals fulfilling neither of these conditions are nonresidents. (The rules are slightly more liberal for Indian citizens residing abroad or leaving India for employment abroad.

A resident who was not present in India for 730 days during the preceding seven years or who was nonresident in nine out of ten preceding years I treated as not ordinarily resident. In effect, a newcomer to India remains not ordinarily resident.

For tax purposes, an individual may be resident, nonresident or not ordinarily resident.

36 | P a g e

INCOME TAX - TAXABLE HEADS OF INCOME

Salary for work done in India is taxable irrespective of the place of receipt.

Salary includes [sec 17(1)]

Salaries and wages (sec 15)

Pension [sec 17(1)(iii)]

Bonus, fees & commissions

Gratuity [sec 10(10)]

Annuity [sec 17(1)(ii)]

Profits in lieu of or in addition to salary [sec.17 (3)]

Advance salary and perquisites [sec.17 (1)(5)]

37 | P a g e

Others:

Allowances

Deferred compensation

Equalization

Besides Salary for work, individuals may be taxed on the following income:

Income from house property

The annual value of property, consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him, the profits of which are chargeable to income tax, shall be chargeable to income tax under the head "Income from House Property".
38 | P a g e

Income from business or professions:-

For charging the income under the head "Profits and Gains of business," the following conditions should be satisfied:

There should be a business or profession

The business or profession should be carried on by the assessee.

Income from capital gains:-

Capital asset means property of any kind held by an assessee whether or not connected with his business or profession.

Income from other sources:-

Income of every kind, which is not chargeable to income tax under the heads

Salary.

Income from house property.

39 | P a g e

Profits and gains of business and profession,

Capital gains can be taxed under the head "income from other

sources".

Surcharge

A 10% surcharge (tax on tax) is applicable if the taxable income (taking into consideration all the deductions) is above Rs. 10 lakh (Rs. 1 million). The limit of 10 lacs was increased to Rs. 1 crore (Rs. 10 million) with effect from 1 June 2007 for corporate assesses.

EDUCATION CESS
All taxes in India are subject to an education cess, which is 2% of the total tax payable. With effect from assessment year 2008-09, Secondary and Higher Secondary Education Cess of 1% is applicable on the subtotal of taxable income

40 | P a g e

FRINGE BENEFIT TAX

Fringe Benefit Tax is a tax payable by companies against benefits that are seen by employees but cannot be attributed to them individually. This tax is paid as 33.99% of the benefit, which is only a percentage of the actual amount paid.

Types of Assessments
Basically assessment is an estimation for an amount assessed while paying Income Tax. It is a compulsory contribution that is required for the support of a government. It is generally of the following types.

Self assessment

The assessee is required to make a self assessment and pay the tax on the basis of the returns furnished. Any tax paid by the assessee under self assessment is deemed to have been paid towards regular assessment.

41 | P a g e

Regular assessment
On the basis of the return of income chargeable to tax furnished by the assessee an intimation shall be sent to the assessee informing him about the tax or interest payable or refundable to him.

Precautionary assessment

Where it is not clear as to who has received the income, the assessing officer can commence proceedings against the persons to determine the question as to who is responsible to pay the tax.

Section80C
Under section 80C of the Income Tax Act, certain investments are deductible (up to a maximum of Rs 1 lakh) from gross total income. This tax exemption is available across individual tax slabs. If you earn Rs 4 lakhs per annum and make investments of Rs 1 lakh in 80c instruments then the taxable amount will be Rs 3 lakhs.

42 | P a g e

Deduction in respect of Life Insurance Premia, Contribution to

Provident Fund, etc.

Rs 1 lakh can be invested under this section without any individual

sub-limits except in the case of Rs 10,000 in pension funds.

Sections 88, 80L, 80CCC and 80CCD is clubbed in.

Schemes eligible for Section 80C benefits

PPF

ELSS(Equity Linked Saving Scheme)

NSC(National Saving Certificate)

Life Insurance

Senior Citizen Saving Scheme 2004

Post Office Time Deposit Account

43 | P a g e

Sale Tax

Central Sales tax is generally payable on the sale of all goods by a dealer in the course of inter-state Trade or commerce or, outside a State or, in the course of import into or, export from India.

Interstate sale

According to S3, a sale or purchase shall be deemed to take place in the course of interstate trade or commerce in the following cases:

When the sale or purchase occasions the movement of goods from one

State to another;

When the sale is affected by a transfer of documents of title to the

goods during their movement from one State to another.

Where the goods are delivered to a carrier or other bailee for transmission, the movement of the goods for the purpose of clause (b) above, is deemed to start at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Also, when the movement of goods starts and terminates in the same State, it shall not be deemed to be a movement of goods from one State to another.

44 | P a g e

To make a sale as one in the course of interstate trade, there must be an obligation to transport the goods outside the state. The obligation may be of the seller or the buyer. It may arise by reason of statute or contract between the parties or from mutual understanding or agreement between them or, even from the nature of the transaction, which linked the sale to such transaction. There must be a contract between the seller and the buyer. According to the terms of the contract, the goods must be moved from one state to another. If there is no contract, then there is no inter-state sale.

There can be an interstate sale even if the buyer and the seller belong to the same state; even if the goods move from one state to another as a result of a contract of sale; or, the goods are sold while they are in transit by transfer of documents.

There can be an interstate sale even if the buyer and the seller belong to the same state; even if the goods move from one state to another as a result of a contract of sale; or, the goods are sold while they are in transit by transfer of documents.

Sales tax is payable to the sales tax authority in the state from which the movement of goods commences. It is to be paid by every dealer on the sale of any goods affected by him in the course of inter-state trade or commerce, notwithstanding that no liability to tax on the sale of goods arises under the tax laws of the appropriate state.

45 | P a g e

The power to levy Sales tax

1. No state can levy sales tax on any sale or purchase where such sale or purchase takes place.

Outside the state and

In the course of import of goods into or export of goods outside India.

2. Only the parliament can levy tax on inter-state sale or purchase of goods

Main Principles in State Sales Tax Laws

1. A sale or purchase of goods is said to take place when the transfer of property in the existing goods or future goods takes place for consideration of money.

2. The goods have been divided into different categories and different rates of sales tax are charged for different categories of goods.

46 | P a g e

3.

In most of the cases related to the sales tax, the tax on the sale or

purchase of goods is at single point.

4.

Under the provisions of some state laws the assesses are divided into

several categories such as manufacturer, dealer, selling agent etc. and such as assess is required to obtain a registration certificate to that effect. The sales tax or the purchase tax is levied on that assessee on the basis of his category such as dealer, manufacturer etc. on production of certain forms or certificates (and differential rates of sales tax are levied).

5.

Generally, a quarter return of sales or purchases is insisted upon and

the assessee is required to furnish the return in the prescribed form.

Sales Tax ID number

A state sales tax ID number is basically a business version of your Social Security number under which you collect and pay tax for any service or product you sell that qualifies for taxation in your state. The state department of taxation provides sales tax ID numbers and it takes about a month to get one.

47 | P a g e

The rule of thumb for sales tax is that most services are exempt and most products are taxable except for food and drugs. However, states have been gradually adding to the list of services that are taxable for the last few years. Check with your state department of taxation to determine if the product or service you sell is taxable in your state.

Exception in the sales taxes

Sales to resellers such as wholesalers and retailers that have a valid

state resale certificate.

Sales to tax-exempt institutions such as schools or charities

VAT
VAT is value added tax, which is charged on value addition. VAT can be considered as a multi-point sales tax with set-off for tax paid on purchases of inputs material and capital goods. Therefore dealers can deduct the amount of tax paid on purchase from the tax collected on sales, thereby paying just the balance amount to the government.

48 | P a g e

According to Sale Tax act:

The manufacturer pays tax on each raw material, which is used to production of finished goods. Such tax paid goes to the government. The manufacturer adds the taxes to his cost. Then labour charge, processing charges and his profit will be added to make up the sales price. Thereafter he paid tax on the entire amount. The government receives tax two times - once on the raw materials bought by the manufacturer and again on the final product. This means manufacturer pays tax on the tax already paid. It has in effect increased the cost of the goods. In the example below, we pay 14.40 sales tax on the bill, but the government receives 26.40. Sales Selling Seller Buyer Price Rate A (Raw Material B (Mfr) 100 12% 12.00 112.00 Tax Amount Tax Total

Supplier) B (value addition by way Consumer of labour, profit etc of Rs 10) Tax collected by Govt 26.40 122 12% 14.40 134.40

49 | P a g e

VAT solves the problem for both the government and the consumer. Each dealer is allowed to deduct the tax paid on their purchases from the tax collected on sales and to pay only the balance to the government. This means that the purchase and sales will be correctly recorded.

Credit on Opening Stock:

1. When VAT is introduced, Opening stock of raw material or consumable (which is purchased as on or after April 1, 2005 and still unsold on 31 st March 2006) will be eligible to receive input credit subject to submission of requisite documents. VAT will be levied on such goods, which is sold on or after April 1, 2006 and input tax credit will be given for the sales tax already paid in the previous year. This tax credit will be available over a period of 12 months. 2. If finished goods held in opening stock as on 01.04.2006 and it was manufactured from tax-paid goods, which have been purchased on or after 01.04.05. Then tax paid on raw material, packing material or explosives consumed in mining, will be allowed as VAT Credit.

For calculation of VAT credit on consumed raw material, FIFO base will be adopted.

50 | P a g e

3. Credit will be allowed only on local purchase i.e. Credit will not be allowed on interstate purchase or purchase under CST. Therefore only local purchase will be considered in calculation of VAT Credit on opening stock. 4. Credit is allowed to registered dealer subject to material purchased from registered dealer. 5. Tax paid on capital goods which is lying in opening stock will not be allowed as Credit.

"Capital goods" means plants, machinery and equipments directly used in the process of manufacture and / or in the course of business excluding such equipments as may be notified."

6. Input Credit on following opening stock will not be allowed-

Receive under replacement Receive Gift Receive Free sample Petrol, diesel, aviation turbine fuel, natural gas, kerosene, liquefied petroleum gas. Furniture and fixture including AC and refrigerator. Material used in capital expenditure in land or civil construction.
51 | P a g e

P.A.N.
Permanent Account Number is a number by which the Assessing Officer can identify any person. Presently the Income Tax Department is allotting PAN under the New Series to all assessees which consists of ten alphanumeric characters and is issued in the form of a laminated card. The PAN is ultimately meant to supplant the General Index Register Number which is currently in use. The General Index Register Number is a number given an Assessing Officer to the assessees in the General Index Register maintained by him which also contains the designation and the particulars of the Assessing Officer. As per section 139A of the Act obtaining PAN is a must for the following persons:-

1. Any person whose total income or the total income of any other person in respect of which he is assessable under the Act exceeds the maximum amount which is not chargeable to tax.

2.Any person who is carry on any business or profession whose

total

sales, turnover or gross receipts are or is likely to exceed Rs. 5 lacs in any previous year.

52 | P a g e

3. Any person who is required to furnish a return of income under section 139(4) of the Act.

The requirement for applying for allotment of PAN under the New Series has now been extended to the whole of India.

PAN is required to be quoted in all the transactions mentioned below:-

In all returns and in all correspondence with the department.

In all challans for payment of any tax or sum due to the department.

53 | P a g e

CENTRAL EXCISE
Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers. The term "excisable goods" means the goods which are specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 , as being subject to a duty of excise and includes salt. The term "manufacture" includes any process, 1. Incidental or ancillary to the completion of a manufactured product and 2. Which is specified in relation to any goods in the Section or Chapter Notes of the First Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture or

3. Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration

54 | P a g e

Alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer. As incidence of excise duty arises on production or manufacture of goods, the law does not require the sale of goods from place of manufacture, as a mandatory requirement. Normally, duty is payable on 'removal' of goods. The Central Excise Rules provide that every person who produces or manufactures any 'excisable goods', or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rules or under any other law. No excisable goods, on which any duty is payable, shall be 'removed' without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided. The word 'removal' cannot be necessarily equated with sale.

Importance of Central Excise Duty

Central excise revenue is the biggest single source of revenue for the Government of India. The Union Government tries to achieve different socio-economic objectives by making suitable adjustments in the scope and quantum of levy of Central Excise duty. The scheme of Central Excise levy is suitably adapted and modified to serve different purposes of price control, sufficient supply of essential commodities, industrial
55 | P a g e

growth, promotion of small scale industries and like Authority for collecting the Central Excise duty.

Article265 of the Constitution of India has laid down that both levy and collection of taxes shall be under the authority of law. The Excise duty is levied in pursuance of Entry 45 of the Central List in Government of India Act,1935 as adopted by entry 84 of List I of the seventh Schedule of the Constitution of India. Charging section is Section 3 of the Central EXCISES and salt Act,1944.

Customs Duty Introduction

The custom Act was formulated in 1962 to prevent illegal imports and exports of goods. Besides, all imports are sought to be subject to a duty with a view to affording protection to indigenous industries as well as to keep the imports to minimum in the interest of securing the exchange rate of Indian currency.

56 | P a g e

Duties of customs are levied on goods imported or exported from India at the rate specified under the customs Tariff Act, 1975 as amended from time to time or any other law for the time being in force. For the purpose of exercising proper surveillance over imports and exports, the Central Government has the power to notify the ports and airports for the unloading of the imported goods and loading of the exported goods, the places for clearance of goods imported or to be exported, the routes by which above goods may pass by land or inland water into or out of Indian and the ports which alone shall be coastal ports.

In order to give a broad guide as to classification of goods for the purpose of duty liability, the central Board of Excises Customs (CBEC) bring out periodically a book called the "Indian Customs Tariff Guide" which contains various tariff rulings issued by the CBEC. The Act also contains detailed provisions for warehousing of the imported goods and manufacture of goods is also possible in the warehouses.

For a person who do not actually import or export goods customs has relevance in so far as they bring any baggage from abroad.

57 | P a g e

Types of Duties
Under the custom laws, the following are the various types of duties which are leviable.

Basic Duty

This is the basic duty levied under the Customs Act. The rate varies for different items from 5% to 40%.

Additional (Countervailing) Duty of customs

This countervailing duty is levible as additional duty on goods imported into the country and the rate structure of this duty is equal to the excise duty on like articles produced in India. The base of this additional duty is c.i.f. value of imports plus the duty levied earlier. If the rate of this duty is on advalorem basis, the value for this purpose will be the total of the value of the imported article and the customs duty on it (both basic and auxiliary).

58 | P a g e

Anti-dumping Duty

Sometimes, foreign sellers abroad may export into India goods at prices below the amounts charged by them in their domestic markets in order to capture Indian markets to the detriment of Indian industry. This is known as dumping. In order to prevent dumping, the Central Government may levy additional duty equal to the margin of dumping on such articles, if the goods have been sold at less than normal value.

Export Duty

Under Customs Act, 1962, goods exported from India are chargeable to export duty The items on which export duty is chargeable and the rate at which the duty is levied are given in the customs tariff act,1975 as amended from time to time under Finance Acts. However, the Government has emergency powers to change the duty rates and levy fresh export duty depending on the circumstances.

59 | P a g e

Protective Duties

Tariff Commission has been established under Tariff Commission Act, 1951. If the Tariff Commission recommends and Central Government is satisfied that immediate action is necessary to protect interests of Indian industry, protective customs duty at the rate recommended may be imposed under section 6 of Customs Tariff Act. The protective duty will be valid till the date prescribed in the notification.

Duty on Bounty Fed Articles

In case a foreign country subsidies its exporters for exporting goods to India, the Central Government may import additional import duty equal to the amount of such subsidy or bounty. If the amount of subsidy or bounty cannot be clearly determined immediately, additional duty may be collected on a provisional basis and after final determination; difference may be collected or refunded, as the case may be.

60 | P a g e

FINANCE OF SAKHA ENGINEERS PVT Ltd

Overall performance The Company during the year shows strong growth of sales Gas Pipeline. Net sales increased to Rs 7,54,78,667 higher by closed to 9.37 % from Rs 6,90,11256 in the previous year The net profit for the year 2010-11 was Rs.65,21,356.82 with a percentage of 8.64.

TAXES PAID BY S.E.P.L

Service Tax Payable Central Sales@12.5% Output Vat 4% Service Tax @ 12.36% Entry Tax 14,65,303 1875 7859 14301 3956

61 | P a g e

TDS| Tax Payable (Contractor)

8993.00

TDS| Tax Payable (Rent)

11,609

TDS on interest

22,095

TDS on Professional

7002

WCT (TDS) Payable

24201.34

W. C. T

Work Corporate Tax is a kind of tax which is paid by Sakha Engineers. The client of Sakha deduct WCT and give certificate every month of the deduction and sakha have to collect the certificate every month from every client.

WCT Sales Tax Aspect

When Sakha file return of sales tax. It will take the credit of WCT deducted by the client and submit the certificate with return.
62 | P a g e

Sales Tax Applicable

(-) WCT Collected

(-)Purchase input

Tax Payable

After Deducting WCT Collected and purchase input of tax, the balance amount is the sales tax and submit the Sales tax quarterly.

TDS certificate will be collected yearly and take credit of certificate when filling Income Tax Return of the financial year.

Service Tax Aspect

Service tax is the liability of the party who provides service to anyone.The rate of service tax is 12.36%.Service Tax is charged by the SEPL because SEPL provides services to clients and charged service tax from every client.

Then Service Tax is deposited by The SEPL to the Government monthly.

The SEPL is registered in the composition Scheme of Service Tax therefore will charge Service Tax@ 4.94% and deposit the same instead of 12.36%.
63 | P a g e

Constraints faced

1. As the topic which was given to me was very wide .It includes lots of aspects .It took a long period of time to complete the project. It was a time consuming project.

2.Another Problem which I faced, I was asked to visit the sites every day, and As a Finance student I Didnt have any work to do at the sites.

3.It was hard to find the relevant information, because the SEPL didnt has the complete Balance Sheet of any year.

64 | P a g e

Conclusion

Taxes - Taxes in India are of two types, Direct Tax and Indirect Tax.

Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.

The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.

Income Tax

No income tax is applicable on all income up to Rs. 1, 80000 per year. (Rs. 1,90000 for women and Rs. 2,50,000 for senior citizens)

From 1,80,001 to 5,00,000 : 10% of amount greater than Rs. 1,80,000 (Lower limit changes appropriately for women and senior citizens)

From 5,00,001 to 8,00,000 : 20% of amount greater than Rs. 5,00,000 + 32,000 (slightly less for women and further less for senior citizens)

Above 8,00,000 : 30% of amount greater than Rs. 8,00,000 +92,000 (slightly less for women and further less for senior citizens)

65 | P a g e

Sale Taxes Central Sales tax is generally payable on the sale of all goods by a dealer in the course of inter-state Trade or commerce or, outside a State or, in the course of import into or, export from India. VAT VAT is value added tax, which is charged on value addition. VAT can be considered as a multi-point sales tax with set-off for tax paid on purchases of inputs material and capital goods. Therefore dealers can deduct the amount of tax paid on purchase from the tax collected on sales, thereby paying just the balance amount to the government. VAT is a more transparent and accurate system of taxation. The existing sales tax structure allows for double taxation thereby cascading the tax burden. In VAT Act we can take credit of tax paid on input.

CENTRAL EXCISECentral Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. Central excise revenue is the biggest single source of revenue for the Government of India. The Union Government tries to achieve different socio-

66 | P a g e

Economic objectives by making suitable adjustments in the scope and quantum of levy of Central Excise duty.

Customs Duty- Duties of customs are levied on goods imported or

exported from India at the rate specified under the customs Tariff Act, 1975 as amended from time to time or any other law for the time being in force. In order to give a broad guide as to classification of goods for the purpose of duty liability, the central Board of Excises Customs (CBEC) bring out periodically a book called the "Indian Customs Tariff Guide" which contains various tariff rulings issued by the CBEC. The Act also contains detailed provisions for warehousing of the imported goods and manufacture of goods is also possible in the warehouses. Types of duties: Basic Duty (5-40%), Additional Duty (Countervailing Duty) (CVD), Anti-dumping Duty, Protective Duty, Duty on Bounty Fed Articles, Export Duty.

67 | P a g e

BIBILIOGRAPHY:-

BOOKS

1. Economic India (2011), Indias Tax Reform, Academic Foundation

Websites WWW.GOOGLE.COM WWW.MONEYCONTROL.COM WWW.WIKIPEDIA.COM WWW.SAKHAENGINEERS.COM WWW.TAXMANN.COM

JOURNALS
Annual report 2010-2011 of SEPL Ltd.

68 | P a g e

69 | P a g e