Professional tax
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 February 2013
I got a brief reply to my query below indicating I should look up a site. I obviously HAVE looked up the site BEFORE I wrote the query and so the reply was completely unhelpful. Is there anyone who can respond to my questions below in a more pointed form
Background:
I am an independent writer/author (on social issues), trainer, researcher, etc who takes up assignments that last from a few days to a few months – only with non-profits and academic institutions. While carrying out such assignments, I sometimes need to employ a research assistant or support staff for specific assignments. These usually last for a few days or at the most a few months. I usually pay them a fixed amount for the assignment –paying it over the period of the assignment. The amounts would almost inevitably be more than Rs. 5000/-
However, I have no regular employees, since each time I take different persons. Neither am I registered as a company. I myself am paid per assignment by the concerned non-profit organization when the assignment is completed.
As far as my income is concerned, in the last financial year it was above Rs. 15 lakhs (though this year it will most probably be less than 15 lakhs).
Up until this year, I did NOT fall under any of the categories listed out for Service Tax. However, this year because of the ‘negative list’ I fall under the category of “other than in the negative list”. Accordingly when I reached an income of Rs. 10 lakhs in this financial year, I registered for Service Tax, and pay that on all amounts earned above Rs. 10 lakhs in this financial year.
I have also registered online for TAN and have sent my documents as required. I am now awaiting the registration number.
The registration for ST and TAN were done in December 2012 and January 2013 respectively.
Query
In the light of the above background, I write to ask
a) I have looked in the Schedule 1 of the Professional Tax list of professions that must pay Professional Tax and I Do NOT fall in any of those categories. However, there is a category # 21 which reads as follows:
"Persons other than those mentioned in any of the preceding entries who are engaged in any profession, trade, calling or employment and in respect of whom a notification is issued under the second proviso to sub-Section (2) of Section 3."
I am not able to find "Section 3 and Sub-section (2)". Therefore
(i) Can you give me the link where I can find the second proviso to sub-Section (2) of Section 3.this Section 3,
(ii) Am I liable to register to pay professional tax for myself or for those I employ as explained above – and who are not really regular employees of mine?
(iii) Do I need to register for PTRC and PTEC?
b) If I DO have to register for PTEC then I understand that the payment of Rs. 2500 has to be paid before June 30 of every financial year. As I did not have anybody working under me in June 2012, and the next June 30, would be in the next financial year, do I have to pay the Rs. 2500/- and by when. Of course this query holds only IF I have to register for PTEC.
c) Is it possible to register online for the same (IF I have to register) and do I still have to go to the office in Mazgaon (since I stay in Mumbai) to submit documents personally. Can I send the documents by speed post as was done in the case of the TAN registration?
d) Also with regard to the documents to be submitted, I have the following queries (IF I have to register)
i) Is the PAN card and e-acknowledgement enough for a person like me?
ii) They have asked for proof of residence. In my case the residence we are staying in is in the name of my wife - so I have not proof of my own residence. Also my work place is the same as my residence.
iii) They have asked in ENTRY No. 1 for name and address of the employers and the monthly salary received from them etc. I have no monthly salary. And every year different groups are hiring me for short periods. So what kind of information do I submit.
iv) I also have NO COMPANY, but am working under my own name – so what document do I submit.
Any clarification would help.
Thanks again
Background:
I am an independent writer/author (on social issues), trainer, researcher, etc who takes up assignments that last from a few days to a few months – only with non-profits and academic institutions. While carrying out such assignments, I sometimes need to employ a research assistant or support staff for specific assignments. These usually last for a few days or at the most a few months. I usually pay them a fixed amount for the assignment –paying it over the period of the assignment. The amounts would almost inevitably be more than Rs. 5000/-
However, I have no regular employees, since each time I take different persons. Neither am I registered as a company. I myself am paid per assignment by the concerned non-profit organization when the assignment is completed.
As far as my income is concerned, in the last financial year it was above Rs. 15 lakhs (though this year it will most probably be less than 15 lakhs).
Up until this year, I did NOT fall under any of the categories listed out for Service Tax. However, this year because of the ‘negative list’ I fall under the category of “other than in the negative list”. Accordingly when I reached an income of Rs. 10 lakhs in this financial year, I registered for Service Tax, and pay that on all amounts earned above Rs. 10 lakhs in this financial year.
I have also registered online for TAN and have sent my documents as required. I am now awaiting the registration number.
The registration for ST and TAN were done in December 2012 and January 2013 respectively.
Query
In the light of the above background, I write to ask
a) I have looked in the Schedule 1 of the Professional Tax list of professions that must pay Professional Tax and I Do NOT fall in any of those categories. However, there is a category # 21 which reads as follows:
"Persons other than those mentioned in any of the preceding entries who are engaged in any profession, trade, calling or employment and in respect of whom a notification is issued under the second proviso to sub-Section (2) of Section 3."
I am not able to find "Section 3 and Sub-section (2)". Therefore
(i) Can you give me the link where I can find the second proviso to sub-Section (2) of Section 3.this Section 3,
(ii) Am I liable to register to pay professional tax for myself or for those I employ as explained above – and who are not really regular employees of mine?
(iii) Do I need to register for PTRC and PTEC?
b) If I DO have to register for PTEC then I understand that the payment of Rs. 2500 has to be paid before June 30 of every financial year. As I did not have anybody working under me in June 2012, and the next June 30, would be in the next financial year, do I have to pay the Rs. 2500/- and by when. Of course this query holds only IF I have to register for PTEC.
c) Is it possible to register online for the same (IF I have to register) and do I still have to go to the office in Mazgaon (since I stay in Mumbai) to submit documents personally. Can I send the documents by speed post as was done in the case of the TAN registration?
d) Also with regard to the documents to be submitted, I have the following queries (IF I have to register)
i) Is the PAN card and e-acknowledgement enough for a person like me?
ii) They have asked for proof of residence. In my case the residence we are staying in is in the name of my wife - so I have not proof of my own residence. Also my work place is the same as my residence.
iii) They have asked in ENTRY No. 1 for name and address of the employers and the monthly salary received from them etc. I have no monthly salary. And every year different groups are hiring me for short periods. So what kind of information do I submit.
iv) I also have NO COMPANY, but am working under my own name – so what document do I submit.
Any clarification would help.
Thanks again
04 February 2013
http://wirc-icai.org/wirc_referencer/index.htm please try this
click on indirect tax pull down.
click on professional act.
click on indirect tax pull down.
click on professional act.
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 February 2013
The reply given to me is obviously not very helpful. I have obviously looked up that particular site which was recommended, and my questions were written AFTER reading that site. So I would be grateful if there are more meaningful answers to my queries
05 February 2013
Provided also that, a person who is liable to pay tax has remained un-enrolled; then, his liability to pay tax under this section for the periods for which he has remained so un-enrolled shall not exceed eight years from the end of the year immediately preceding the year in which he has obtained the enrolment certificate or the year in which the proceeding for enrolment is initiated against him, whichever is earlier... second proviso
05 February 2013
http://www.mahavat.gov.in/Mahavat
under act & rules... click on acts
Then click on
The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975
You will get the second proviso
under act & rules... click on acts
Then click on
The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975
You will get the second proviso
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 February 2013
Dear Mr. Joglekar
My questions are related to the basic question as to whether I am liable to pay or deduct professional tax from those I employ and so the answer you have given does not really answer that. The fact is that my work is NOT included in Schedule 1. I request you or any other expert to have a careful look at my original queries (a) to (d).
My questions are related to the basic question as to whether I am liable to pay or deduct professional tax from those I employ and so the answer you have given does not really answer that. The fact is that my work is NOT included in Schedule 1. I request you or any other expert to have a careful look at my original queries (a) to (d).
08 February 2013
Thank you for the feed back. Your underlying thought was, because you were unable to find section 3 and sub section (2)......hence I thought it prudent to supply with the section so that you can reconsider your query.
(1) You are a professional WRITER. You need to get yourself registered with Professional Tax. Pay Rs.2500 as Professional Tax.
(2) You also need to deduct Professional Tax from the payment made by you to your research assistant.... subject to however the monthly payment limits as set out in the Act.
(1) You are a professional WRITER. You need to get yourself registered with Professional Tax. Pay Rs.2500 as Professional Tax.
(2) You also need to deduct Professional Tax from the payment made by you to your research assistant.... subject to however the monthly payment limits as set out in the Act.
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 February 2013
Thank you once again. I did read that reference to writers, but Schedule 1 in which this is listed has a description indicating that this WRITER applies to only person who are working in the Media or Entertainment industries as below:
Self-employed persons in the Motion Picture Industry, Theatre, Orchestra, Television, Modelling or Advertising Industries, as follows:
(a) Writers, Lyricists, Directors, Actors and Actresses (excluding Junior Artists), Musicians, Play-back Singers, Cameramen, Recordist, Editors and Still-Photographers,
(b) Junior Artists, Production Managers, Assistant Directors, Assistant Recordists, Assistant Editors and Dancers.
Apparently then other WRITERS are not included. I am a writer on social issues for non media and non entertainment industry entities like UNICEF, International NGOs and Indian NGOs etc
Can you clarify since if my interpretation is correct then I don't have to register for the same. Also my research associates are not receiving a salary but a contractual amount which may be paid in more than one installment (e.g. at time of beginning of contract, in the middle of the assignment and then at the end)
Self-employed persons in the Motion Picture Industry, Theatre, Orchestra, Television, Modelling or Advertising Industries, as follows:
(a) Writers, Lyricists, Directors, Actors and Actresses (excluding Junior Artists), Musicians, Play-back Singers, Cameramen, Recordist, Editors and Still-Photographers,
(b) Junior Artists, Production Managers, Assistant Directors, Assistant Recordists, Assistant Editors and Dancers.
Apparently then other WRITERS are not included. I am a writer on social issues for non media and non entertainment industry entities like UNICEF, International NGOs and Indian NGOs etc
Can you clarify since if my interpretation is correct then I don't have to register for the same. Also my research associates are not receiving a salary but a contractual amount which may be paid in more than one installment (e.g. at time of beginning of contract, in the middle of the assignment and then at the end)
09 February 2013
"person" means any person who is engaged actively or otherwise in any profession, trade, calling or employment in the State of Maharashtra. Your "independent writer /author on social issues, trainer, researcher" amounts to profession.
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 February 2013
Dear Mr. Joglekar
My background in law seems to indicate to me that the right understanding of the legal language in the following quote (see below for full quote) is that "EVERY PERSON....engaged actively or otherwise in any profession, trade callings or employment AND falling under one or other of the classes mentioned in the second column of Schedule 1 shall be liable to pay...
According to me the AND indicates that legally BOTH conditions ought to be fulfilled, namely the person should be engaged in any profession etc AND also come under the listing of Schedule 1.
Isn't that the correct reading of the rule/law? And if BOTH conditions are required, then I would not be fulfilling one of the two conditions - don't you think so?
I give you the full quotation below:
Every person excluding firms (whether registered under the Indian Partnership Act, 1932, or not) and Hindu Undivided family engaged actively or otherwise in any profession, trade callings or employment and falling under one or the other of the classes mentioned in the second column of Schedule I shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in the third column of the said Schedule;
My background in law seems to indicate to me that the right understanding of the legal language in the following quote (see below for full quote) is that "EVERY PERSON....engaged actively or otherwise in any profession, trade callings or employment AND falling under one or other of the classes mentioned in the second column of Schedule 1 shall be liable to pay...
According to me the AND indicates that legally BOTH conditions ought to be fulfilled, namely the person should be engaged in any profession etc AND also come under the listing of Schedule 1.
Isn't that the correct reading of the rule/law? And if BOTH conditions are required, then I would not be fulfilling one of the two conditions - don't you think so?
I give you the full quotation below:
Every person excluding firms (whether registered under the Indian Partnership Act, 1932, or not) and Hindu Undivided family engaged actively or otherwise in any profession, trade callings or employment and falling under one or the other of the classes mentioned in the second column of Schedule I shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in the third column of the said Schedule;
11 February 2013
Yes Sir, what you are saying is absolutely CORRECT. It is AND condition.
I understand that you are an independent write/ author (on social issues), trainer, researcher etc. who takes up assignments that last from a few days to a few months - only with non profits and academic institutions. Right?
Your case will fall under Schedule I : entry 2. (The words used are INCLUDING in that entry) It means list is indicative and not exhaustive.
Your views please.
I understand that you are an independent write/ author (on social issues), trainer, researcher etc. who takes up assignments that last from a few days to a few months - only with non profits and academic institutions. Right?
Your case will fall under Schedule I : entry 2. (The words used are INCLUDING in that entry) It means list is indicative and not exhaustive.
Your views please.
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 February 2013
I am truly enjoying this conversation with you as I perceive you to be an intelligent and thinking expert, rather than one who just gives standard answers. So let me take this forward if you don't mind. Here is section 2 of Schedule 1:
2. (a) Legal Practitioners including Solicitor and Notaries;
(b) Medical Practitioners, including Medical Consultants and Dentists;
(c) Technical and Professional Consultants, including Architects,Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants;
(d)Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licensed under the Insurance Act, 1938, U.T.I. Agents under U.T.I. Scheme, N.S.S. agents under postal Scheme;
(e)Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule);
(f)All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and
(g)Diamond dressers and diamond polishers; having not less than one year’s standing in the profession.
Each of the first three listings does have the term "including". But in each of them there is an overall category UNDER which the "including" has to be read - namely, Legal Practitioners, Medical Practitioners and Technical and Professional Consultants. So the term 'including' is limited by those larger categories Since I don't fall in any of those three larger categories, then I cannot see how I am included in that list.
If at all it is to be argued that by taking up an assignment I am a consultant, in my case that does not hold as I have a decision made by the Service Tax Commissioner's office at a hearing to which I was called (where I had argued this point myself), that admits that I am NOT a consultant.
Your views???
2. (a) Legal Practitioners including Solicitor and Notaries;
(b) Medical Practitioners, including Medical Consultants and Dentists;
(c) Technical and Professional Consultants, including Architects,Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants;
(d)Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licensed under the Insurance Act, 1938, U.T.I. Agents under U.T.I. Scheme, N.S.S. agents under postal Scheme;
(e)Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule);
(f)All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and
(g)Diamond dressers and diamond polishers; having not less than one year’s standing in the profession.
Each of the first three listings does have the term "including". But in each of them there is an overall category UNDER which the "including" has to be read - namely, Legal Practitioners, Medical Practitioners and Technical and Professional Consultants. So the term 'including' is limited by those larger categories Since I don't fall in any of those three larger categories, then I cannot see how I am included in that list.
If at all it is to be argued that by taking up an assignment I am a consultant, in my case that does not hold as I have a decision made by the Service Tax Commissioner's office at a hearing to which I was called (where I had argued this point myself), that admits that I am NOT a consultant.
Your views???
12 February 2013
It is nice to note that Service tax department has upheld your views. This will definitely help us strengthen the arguments before Professional Tax department. Thank you for enlighting.
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 February 2013
If you send me your email address I will send you a soft copy of the order
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