The Institute of Cost and Works Accountants of India 2008 Certification CWA/ICWA Indirect
PAPER - 14
Indirect & Direct Tax Management
TEST PAPER - III14/TXM/2008/T -
Time Allowed: 3hrs Full Marks: 100
Part A Direct Tax
Answer All Questions:
1. a) What are the methods under which the arms length price, relating to an international transaction, is determined u/s 92C?
b) J Ltd., is an Indian Company which is a 100% subsidiary of K Ltd., a foreign company. K Ltd. Sells its product to J Ltd., at 15$ per unit. At the same time, it sells its products to an unrelated party at $ 20 per unit. How will the arms length price be determined in this transaction?
(10)
2. Write a short note on
i) Tax Implication - Make or Buy Decision
ii) Tax Implication - Own or Lease
(10)
3. Given below is the P&L A/C of K,L,M & Associats, a partnership firm for the previous year 2007-2008.
|
Particular |
Rs. |
Particular |
Rs. |
|
Purchase Direct & Indirect Expense Depreciation Interest to partners Salaries to partners Net Profit |
15,45,000 8,00,000 2,00,000 2,00,000 6,60,000 1,40,000 |
Sales Interest on Securities (TDS - Rs.5,000) |
35,00,000 45,000 |
|
35,45,000 |
35,45,000 |
You are further informed
i) Depreciation allowable as per Section 32 is Rs.1,50,000
ii) Purchase include cash purchase of Rs.30,000
iii) A,B,C share profits in the ratio of 4:3:3 C is a sleeping partner
iv) Interest is paid to partners @20% p.a. interest is authorized by partnership deed
v) Salaries, authorized by partnership deed are paid to all the partners equally
Compute (i) Book profit and
(ii) Total income of the firm in the following cases:-
(a) It is a professional form
(b) It is a business form
(c) It does not file the return of its income , leading to best judgment assessment.
(15)
4. a) Enumerate the list of person / entities treated as individual u/s 3 of the Wealth Tax Act.
b) Who are the persons / entities to whom Wealth Tax is not applicable u/s 45 of the Wealth Tax Act?
c) Is Wealth Tax a debt owed on the valuation date and hence deductible while computing net wealth?
d) On what grounds can it be said that partial partition in de-recognised under the Wealth Tax Act?
e) How far is the exemption of Public charitable trust under the Income Tax Act, 1961 relevant for exemption under Wealth Tax Act?
3+3+3+3+3= (15)
Part B Indirect Tax Management
1. Briefly explain with reference to the Central Excise Act, 1944
a. Factory
b. Whole sale dealer
c. Dutiability of Waste and Scrap
(10)
2. Explain in brief the procedure for assessment and clearance of imported goods from customs port.
3. An Importer has imported a machine from UK at FOB cost of 10,000 UK pounds. Other details are as follows:-
a. Freight from UK to Indian Port was 700 pounds
b. Insurance was paid to Insurer insured in India - Rs.6000
c. Design and development charges of 2000UK pounds were paid to a consultancy firm in UK
d. The importer also spent and amount of Rs.50,000 in India for development work connected with the machinery.
e. Rs.10,000 were spent in transporting the machinery from Indian Port to the factory of importer.
f. Rate of exchange RBI: Rs. 68.82 = One UK Pound
g. Rate of exchange as announced by CBE 2C (Board) by Notification u/s 14
(3) (a) (i): Rs.68.70 = One UK Pound
h. Rate at which bank recovered the amount from importer Rs.68.35 = One UK Pound.
i. Foreign exporters have an Agent in India Commission is payable to the agent in Indian Rupees @5% of FOB price.
Custom duty payable was 10%. If similar goods were produced in India, Excise duty payable @24%. There is an excise exemption notification which exempts the duty as in excess of 16%. Education Cess 2% and SAH Education Cess 1%. Find custom duty payable .
How much Cenvat can be availed by importer, if he is manufacturer?
(15)
4. Write Short Note on
a. Identical goods and similar goods with reference to custom valuation Rules 1988.
b. Residual Method of valuation of Imported goods
c. Entry with reference to the provisions of the custom Act 1962.
(15)
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Attachment: |
| Earning: Approval pending. |
