Monday, 23 February 2015


What is IEC?

IMPORTER EXPORTER CODE ( in short IEC ) is a ten digit number granted by Directorate General of Foreign Trade under Ministry of Commerce and Industry, to any bonafideperson/ company for carrying out import/export.

Why IEC is required?

As per Foreign Trade (Development and Regulation) Act 1992
No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorized by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General.

IEC forms the primary document for recognition by Government of India as an Exporter/Importer. On the basis of IEC, companies can obtain various benefits on their exports/imports from DGFT, Customs, Export Promotion Council etc. SSI Registration Services

Validity of IEC No

Only one IEC would be issued against a single PAN number. Any proprietor/company/firm can have only one IEC number and in case there are more than one IEC's allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation. An IEC number allotted to an applicant shall be valid for all its branches /divisions /units /factories.

Status of IEC & details of IEC holder

The applicant can know the status of the IEC application using option "Status of IEC Application" on the website of DGFT ( Also we can see the details of the IEC holder by using the tab "View your IEC" on the website and we need to enter IEC number and first 3 letters of the holder's name.

Duplicate Copy of IEC Number

Where an IEC Number is lost or misplaced, the issuing authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit.

Surrender of IEC Number

If an IEC holder does not wish to operate the allotted IEC number, he may surrender the same by informing the issuing authority. On receipt of such intimation, the issuing authority shall immediately cancel the same and electronically transmit it to DGFT for onward transmission to the Customs and Regional Authorities.

Modification in IEC:

If there are any changes in the details of the applicant like change of name, change of address, additional business places, change of directors the same should be intimated to DGFT (Director General of Foreign Trade) using the same form 'AayaatNiryaat Form - 2A (ANF 2A)'.

IEC No: Exempted Categories

The following categories of importers or exporters are exempted from obtaining Importer -
Exporter Code (IEC) number:

1. Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters
covered by clause 3(2) [except sub-clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.
2. Ministries/Departments of the Central or State Government.
3. Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.
4. Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian Rs.25,000.
5. Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC (HS) except in the case of exports by category (ii) above.

An application for grant of IEC number shall be made by the Registered Office of the company to the nearest Regional Authority of Directorate General Foreign Trade in the 'AayaatNiryaat Form - 2A (ANF 2A)' and shall be accompanied by the following documents in case of company:

1.    Demand Draft of Rs.250 evidencing payment of application fee in favour of the concerned regional office of DGFT. Money can also be paid through Electronic Fund Transfer (EFT).
2.    Certificate from the Banker of the applicant firm in the specified format
3.    Photograph on the banker's certificate should be attested by the banker of the applicant
4.    Copy of Permanent Account Number (PAN) duly signed by authorized director.
5.    Certificate of Incorporation, MOA, AOA duly signed by the authorized director of the company.
6.    Rental agreement duly signed by the authorized Director. List of present directors. Copy of board resolution.
7.    Identity & address proofs of all the directors.
8.    In case of foreign investment in the company, Copy of RBI approval letter has to be submitted.
9.    Two copies of passport size photographs of the authorized director. Self addressed stamped envelope.
10.    Each individual page of the application has to be signed by the applicant. These documents have to be submitted in a flat file

Hope the information will assist you in your Professional endeavors. For query or help, contact: or call at 011-43520194

Tuesday, 17 February 2015



M/s Zeppelin Mobile Systems India Ltd an unlisted Indian subsidiary of M/s Zeppelin Mobile
Systems GmbH (herein after referred to as assessee) a Germany based company. The Indian company is engaged in the business of designing, manufacturing and assembling of Polyurethanes Foam based Prefab Structures, Telecom Shelters and derivatives.

During the year, the assessee had sold part of the shares held by it in its Indian subsidiary
to M/s Sintex Industries Ltd and returned capital gains from such sale on basis of sale price of Rs. 390 per share.

The A.O. made additions in the total income of the assessee by taking the sale consideration
of the shares @ 400/- per share, as against the actual sale consideration of Rs. 390/- per share as taken by the assessee in accordance with pricing guidelines of RBI. income tax consultant in delhi

DRP confirmed the assessment order passed by AO. While doing so, it was observed that,
the RBI Guidelines in respect of pricing of shares would be binding on the assessee since shares are being sold by a non-resident to a resident, and that the case of the assessee fell squarely under Clause 2.3 read with sub-clause (b) (ii) and Option (C) of the RBI Guidelines; that these clauses and sub-clauses in the RBI Guidelines were binding in nature, as they employed the expression 'shall be'. The RBI Guidelines strictly direct the assessee to adopt the lower of the two valuations required to be done and the assessee has no choice to negotiate the price; that therefore, the assessee was wrong in contending that the Assessing Officer had wrongly observed that the RBI Guidelines should be adopted; and that therefore, the Assessing Officer was correct in adopting the valuation of the shares@Rs. 400 per share as against the negotiated priceof Rs. 390 per share disclosed by the assessee.

Whether DRP has illegally confirmed the action of the AO for taking the value of sale consideration @ Rs.400 per share instead of actual sale consideration received @ Rs.390/-
per share a Capital Gain is liable to be computed at Rs.9,55,73,488/-?

It was held that RBI Guidelines are Guidelines for the banks, issued for FEMA purposes. The
very opening paragraph of these Guidelines shows that they are addressed to 'Authorised Dealer (AD) Banks'. Thus the duty to examine the compliance or otherwise of these Guidelines lies squarely within the purview of the 'Authorised Dealer Banks' and not the
Income-tax Authorities
If the assessee, in the view of the Income-tax Authorities, had committed any violation of
these Guidelines, the appropriate course open to them was to bring it to the notice of the banks. Since the Guidelines have been issued for FEMA purposes, it is the FEMA Authorities who are competent to take appropriate action against the assessee on breach of the Guidelines. Rather, it is seen that no objection whatsoever has been raised by the RBI. Had the alleged difference between the rates existed, thereby constituting a violation of the RBI Guidelines by the assessee, such violation would obviously have been taken care of and the approval would not have been accorded. On merits also, Sintex Industries Ltd., to whom the shares were sold by the assessee, has not denied such rate of Rs. 390/-per share. Rather, such rate stands admitted in the Memorandum of Understanding between the assessee and Sintex Industries Ltd. In view of the above, finding the grievance of the assessee to be justified, we accept it assuch. Appeal allowed.Know more about information: Service tax registration and New company registration India

Hope the information will assist you in your Professional endeavors. For query or help, contact: or call at 011-43520194

Sunday, 8 February 2015


INSPITE of all the contributions made to social causes, there is a huge gap between the demand of money from the needy and the amount donated by philanthropists. This probably, is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:

Allowable to all kind of Assessee:- Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deductions subject to conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer.
Donation to Foreign Trust:- Donations made to foreign trusts do not qualify for deduction under this section.

Donation to Political Parties:- You cannot claim deduction for donations made to political parties for any reason, including paying for brochures, souvenirs or pamphlets brought out by such parties.
Only donation made to made to prescribed funds and institutions qualify for deduction: - All donations are not eligible for tax benefits. Tax benefits can be claimed only on specific donations i.e. those made to prescribed funds and institutions.
Maximum allowable deduction:- If aggregate of the sums donated exceed 10% of the adjusted gross total income, the amount in excess of 10% ceases to be entitled for tax benefit.

Documentation Required for Claiming deduction U/s. 80G
  • Stamped receipt:  For claiming deduction under Section 80G, a receipt issued by the recipient trust is a must. The receipt must contain the name and address of the Trust, the name of the donor, the amount donated (please ensure that the amount written in words and figures tally).
  • Mention of Registration No. of the Trust Under 80G on receipt:- The most important requirement is the Registration number issued by the Income Tax Department under Section 80G. This number must be printed on the receipt. Generally, the Income Tax Department issues the registration for a limited period (of 2 years) only. Thereafter, the registration has to be renewed. The receipt must not only mention the Registration number but also the validity period of the registration.
  • Validity of Registration U/s. 80G  on the date of Donation:- The donor must ensure that the registration is valid on the date on which the donation is given. For example, the registration of a trust may be valid from April 1, 2007 to March 31, 2009. Now, if the trust does not get its registration renewed on or after April 1, 2009 then even if donation receipt is issued by the trust to the donor for donations received on or after April 1, 2009, the donor would not get any tax benefit.
  • Photocopy of  the 80G certificate :- Check the validity period of the 80G certificate. Always insist on a photocopy of the 80G certificate in addition to the receipt.

Only donations in cash/cheque are eligible for the tax deduction:-Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits.
Donation made by NRI: - NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds.
Deduction if donation deducted from Salary and donation receipt certificate is on the name of employer:- Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account.
Limit on donation amount: -There is no upper limit on the amount of donation. However in some cases there is a cap on the eligible amount i.e. a maximum of 10% of the gross total income.
Deduction amount U/s. 80G:-Donations paid to specified institutions qualify for tax deduction under section 80G but is subject to certain ceiling limits. Based on limits, we can broadly divide all eligible donations under section 80G into four categories:
a) 100% deduction without any qualifying limit (e.g., Prime Minister’s National Relief Fund).
b) 50% deduction without any qualifying limit (e.g., Indira Gandhi Memorial Trust).
c) 100% deduction subject to qualifying limit (e.g., an approved institution for promoting family planning).
d) 50% deduction subject to qualifying limit (e.g., an approved institution for charitable purpose other than promoting family planning).
For list of Institution donation to whom is eligible to 100% deduction without any qualifying limit,  eligible to 50% deduction without any qualifying limit,  100% & Subject to qualifying limit and of those eligible for 50% deduction subject to qualifying limit please check the link given below:-

Qualifying Limit:- The qualifying limits u/s 80G is 10% of the adjusted gross total income. The limit is to be applied to the adjusted gross total income. The ‘adjusted gross total income’ for this purpose is the gross total income (i.e. the sub total of income under various heads) reduced by the following:
  • Amount deductible under Sections 80CCC to 80U (but not Section 80G)
  • Exempt income
  • Long-term capital gains
  • Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies.
Eligible Donation:-There are thousands of trusts registered in India that claim to be engaged in charitable activities. Many of them are genuine but some are untrue. In order that only genuine trusts get the tax benefits, the Government has made it compulsory for all charitable trusts to register themselves with the Income Tax Department. And for this purpose the Government has made two types of registrations necessary u/s. 12A & U/s. 80G. Only if the trust follows the registration U/s. 12A, they will get the tax exemption certificate, which is popularly known as 80G certificate. The government periodically releases a list of approved charitable institutions and funds that are eligible to receive donations that qualify for deduction. The list includes trusts, societies and corporate bodies incorporated under Section 25 of the Companies Act 1956 as non-profit companies.

Tax benefit depends on rate of Tax applicable to the Assessee:-Let us take an illustration. Mr. X an individual and M/s. Y Pvt. Ltd., a Company both give donation of Rs. 1,00,000/- to a NGO called Satyakaam. The total income for the A.Y. year 2009-2010 of both Mr. X and Ms. Y Pvt. Ltd. is Rs. 3,00,000/-. The tax benefit would be as shown in the table:

Mr. X
MS. Y Pvt. Ltd.
i) Total Income for the year 2008-2009
ii) Tax payable before Donation
iii) Donation made to charitable organisations
iv) Qualifying amount for deduction (50% of donation made)
v) Amount of deduction u/s 80G (Gross Qualifying Amount subject to a maximum limit 10% of the Gross Total Income)
iv) Taxable Income after deduction
v) Tax payable after Donation
vi) Tax Benefit U/S 80G (ii)-(v)
Note :
  • Education Cess& Sec. & Higher Educ. Cess has not been included in working of tax benefit.
1. Donations to private trusts
Step 1: Find out the qualifying amount
The qualifying amount under this category will be lower of the following two amounts:
a) The amount of donation
b) 10 per cent of the gross total income as reduced by all other deductions under Chapter VI-A of the Income Tax Act such as 80C (PPF, LIC etc.), 80D (mediclaim), 80CCC (pension schemes etc.).
For example, a taxpayer named LaxmiArcelor has taxable salary of Rs 500,000. He has deposited Rs 70,000 in Public Provident Fund and Rs 60,000 in his company provident fund. He donates Rs 45,000 to CRY (Child Relief & You) trust. Presuming he has no other income, his taxable income will be computed as under:
Gross salary
Rs 500,000
Less: Deduction under section 80C restricted to
Rs 100,000
Gross total income (before 80G)
Rs 400,000
After making donation to CRY, his qualifying amount for 80G will be:
Actual amount of donation
Rs 45,000
10% of Gross total income as computed above
Rs 40,000 whichever is lower
Since 40,000 is lower, the qualifying amount will be Rs 40,000
Step 2: Find out actual deduction, The next question that arises is how much would be the actual deduction? In the case of donations to private trusts, the actual amount of donation would be 50 per cent of the qualifying amount.
Therefore, in the example given above, since the donation is made to a private trust, the deduction will be 50 per cent of the qualifying amount ie 50 per cent of Rs 40,000 = Rs 20,000.
Gross total income (Before 80G)
Rs 400,000
Less: deduction under section 80G
Rs 20,000
Total income (taxable income)
Rs 380,000
Step 3: Check upper limitFinally, the deduction under section 80G cannot exceed your taxable income. For example, if your income before deduction is Rs 3 lakh and if you have given donation of Rs 5 lakh to the Prime Minister’s National Relief Fund, please do not expect to claim a loss of Rs 2 lakhs. Your income will be NIL (Rs 3 lakh – Rs 3 lakh). The deduction will be restricted to the amount of your income.
ii) Donations to trusts/funds set up by the Government
In this category, the entire amount donated i.e. 100 per cent of the donation amount is eligible for deduction. There is a long list of 21 funds/institutions/purposes for which donations given would qualify for 100 per cent eligibility. Notable among this list are:
- The National Defence Fund
- The Prime Minister’s National Relief Fund
- Any fund set up by the State Government of Gujarat for earthquake relief
The funds that figure in this long list are all set up by the Government. Private Trusts do not figure in this list.
Thus, in this category of donations, the ceiling of 10 per cent of the gross total income as reduced by all other deductions under Chapter VI-A of the Income Tax Act does not apply.
In the above example, if instead of donating to CRY, had the donation been given to say, The Prime Minister’s National Relief Fund, then the calculations would have different as shown below:
Gross Total Income (Before 80G)
Rs 400,000
Less: Deduction under section 80G
Rs 45,000
Total Income (Taxable Income)
Rs 355,000

Know more about information: Service Tax and Tax Consulting firm