Government Petrol Pump taxation and audit
This query is : Resolved
08 April 2022
A battalion of reserve police force (RPF) has been allotted a petroleum retail outlet by Hindustan Petroleum Corporation Ltd. for sale of Petrol and Diesel.
The battalion office has got its PAN under Government category with 4the character of PAN being 'G' and based on that PAN GSTIN has also been allotted. The petrol pump is selling Petrol and Diesel to public, other departments of state and central governments, and it has captive consumption as well.
The sale during the FY 2021-22 which is the first year of operation is Rs.11.13 crores.
Please advise on followings :
1. Whether Tax Audit will be applicable ?
2. Whether the battalion office would be liable to income tax on the income earned from Petrol Pump operations, if yes, then what would be the rate of income tax?
3. Whether the battalion office being a government office of state government would be required to make TDS u/s 194Q.
The battalion office has got its PAN under Government category with 4the character of PAN being 'G' and based on that PAN GSTIN has also been allotted. The petrol pump is selling Petrol and Diesel to public, other departments of state and central governments, and it has captive consumption as well.
The sale during the FY 2021-22 which is the first year of operation is Rs.11.13 crores.
Please advise on followings :
1. Whether Tax Audit will be applicable ?
2. Whether the battalion office would be liable to income tax on the income earned from Petrol Pump operations, if yes, then what would be the rate of income tax?
3. Whether the battalion office being a government office of state government would be required to make TDS u/s 194Q.
09 April 2022
1 Tax audit not applicable being government entity.
2 Not liable for income tax.
3 TDS under 194Q applicable.
2 Not liable for income tax.
3 TDS under 194Q applicable.
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09 April 2022
Would you please share the provision in income tax act which exempts government entity from income tax and tax audit? If there is any decided case then please also share the same. Thanks
10 April 2022
Income tax applicable on person defined in the Act. Person does not include government.
Section 2(31) in The Income- Tax Act, 1995
(31) " person" includes-
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub- clauses;
Exemption / Income not included in total income u/s 10(20):
The income of a Local Authority which is chargeable under the head Income from House Property, Capital Gains or Income from Other Sources or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service (not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area.
Section 2(31) in The Income- Tax Act, 1995
(31) " person" includes-
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub- clauses;
Exemption / Income not included in total income u/s 10(20):
The income of a Local Authority which is chargeable under the head Income from House Property, Capital Gains or Income from Other Sources or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service (not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area.
Message likes :
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10 April 2022
Thanks for providing definition of Person which made me clear that the battalion of Reserve Police Force being an entity of State Government under the Ministry of Home it will be out of purview of Income Tax but since it is carrying on business it would be required to maintain proper books of account. The accounts of the Petrol Pump would be subject to audit by CAG and tax audit may not be applicable.
The battalion not being a local authority, section 10(20) would not be applicable.
The battalion not being a local authority, section 10(20) would not be applicable.
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