(e) The old partners have withdrawn the amounts received as goodwill from C.Prepare revaluation account. Tax planning is critical for budgetary efficiency. Tax planning is done purposely for involving the  people regarding their income . Multi-stage: GST is a multi-stage tax which is levied at every point of sale of goods or services. Taxable Service – As per section 66 of Finance Act, 1994, service tax is payable on taxable service. 20. Source of revenue to the government – it constitutes the basic source of revenue to the  government . The profits in thepreceding three years were ? Revenue so raised is utilized by the government in expenses of defense, provision  of education , infrastructure, This site is using cookies under cookie policy. Healthy Growth of Economy: The growth in an economy depends largely upon the growth of its citizens. It has gotten 5948 views and also has 4.8 rating. Service tax is destination –based consumption tax – Service is a destination based   consumption  tax, as per CBE & C circular No. Section 66 provides that there shall be levied a tax (service tax) @12% of the value of taxable service referred to in various clauses of section 65(105).It will be collected in a manner as may be prescribed. He withdrew 4.200 in 2012. on Reducing Balance Method. your solution of Nature and Scope - Service Tax, Indirect Tax Laws B Com Notes | EduRev search giving you solved answers for the same. Prepare Y'sCapital Account.​, Discuss the relationship between kabuliwala and Mini?​, Answer:IELTIUNIOn 1st January 2006 the position of a retail merchant, who has not kept falldouble entry stood, as follows:Cash in hand Rs. using search above. In such a situation, it is important that the compliance regarding tax payment is followed and used properly so that friction is minimum. The government charges tax on the source of income as personal income, corporate income, property, sales, death and gift and import-export. Nature of GST. Explain nature and Scope of Tax planning and Management. Disclosure of correct income – disclosing correct income and information about income from all  the sources . Fee charged by government- it is a fee charged by the government on a product , income or  activity. ,it was held that service tax is payable on charges of erection and commissioning even if assessee has paid excise duty on entire value of contract including erection and commissioning charges. The definition is different for each class of service, e.g. You can see some Nature and Scope - Service Tax, Indirect Tax Laws B Com Notes | EduRev sample questions with examples at the bottom of this page. Taxation, imposition of compulsory levies on individuals or entities by governments. Service 65(105) of Finance Act 1994 defines what “taxable service” is. Productivity: Among the most important objectives of tax planning is channelization of taxable income to various investment plans. Scope of taxation: In the absence of limitations provided by the constitution, the power to tax is essentially unlimited, plenary, comprehensive, far reaching, and supreme. With  proper tax planning the direct and indirect tax burden is reduced. If you want Nature and Scope - Service Tax, Indirect Tax Laws B Com Notes | EduRev (c) A reserve for doubtful debts at 5% be created on sundry debtors. (6) Stock, plant and machinery is to be depreciated by 10%. Tax planning is for budgetary efficiency. (iii) To cover management cost, an annual charge of 24,000 should be made for the purposegoodwill valuation,(iv) On 1st April, 2016, a machine having a book value of 10,000 was sold for 11,000 but the proceewere wrongly credited to Profit and Loss Account. just for education and the Nature and Scope - Service Tax, Indirect Tax Laws B Com Notes | EduRev images and diagram are even better than Byjus! Legal tax planning – legal tax planning can be done effectively . EduRev is like a wikipedia A reduced tax liability and maximized the ability of retirement plans. B Com. 1.200, 12,000 and ? …, payable @5% per annum. Destination based: It is a tax that is levied on the consumption of goods and services by consumers. on reducing balance method.[Ans. Economic Stability: Stability is supplemented when the tax planning behind a business is proper. There is no sound reason for exempting services from taxation , where goods are taxed and many countries  treat goods and services alike for tax purpose , therefore , propose to make a modest effort in this direction by imposing a tax on services of ‘telephone’, ‘non life insurance’ and ‘stock brokers’. 29,800​, A–55,000; B-32,500; C—15,000.]41. The objective behind  tax planning is insurance of tax . Excise  and service tax are independent taxes– Though excise and  service tax are administered by same department ,both are independent taxes. Minimal Litigation: There is always friction between the collector and the payer of tax. 3,450, cash (d) The value of buildings be increased by 20%. It is a tax which is levied by government on supply of goods and services. …, X, Y and 2 were partners in the ratio of 3: 2:1. Taxation is a very important system for the government. The contribution so made comes back towards the public in  different forms by the government. Section 66 of Finance Act, 1994 is the charing section  of service tax. TAXATION 1. 46,200 Furniture Rs. The said sum is agreed to be capitalised for goodwill calculation subjeto adjustment of depreciation of 10% p.a. Though liability is on provider, the tax can be collected by him from service receiver. Nature and Scope of the Power of Taxation NATURE OF THE POWER OF TAXATION 1. Better planning regarding income of the nation can be done and is recoreded.

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