I-T to recover Rs 100 cr TDS from 60 shipping cos
The department is also preparing list of film production houses to collect TDS for sale of rights, reports Manish Pachouly.india Updated: Feb 14, 2007 00:40 IST
The Tax Deducted at Source (TDS) wing of the Income Tax (I-T) department has prepared a list of over 60 shipping companies to recover more than Rs 100 crore in tax.
Similar list is being prepared which would comprise of film production houses selling various rights since July 13 last year.
The exercise is following an amendment in some sections of I-T Act on July 13 last year where the TDS rate for hiring ships increased from two per cent to 22.44 per cent.
In addition to this, royalties came under TDS net and as per this all film rights sold (from July 13 last year) would invite TDS at the rate of five per cent.
However, the authorities found that most from the above fraternity were not complying with the amendment and thus evading taxes.
A senior I-T officer, requesting anonymity said that the department started preparing the list for shipping companies from January this year while the list of film production companies is being prepared.
Most of the shipping companies hire ships for transporting goods. “While making the rent payment to those from whom ships were hired, the shipping companies have to deduct TDS and pay the same to the I-T department by seventh of subsequent month,” the officer said.
He added that three shipping companies have been surveyed so far and tax calculation is underway. “From two of them we expect to recover over Rs 40 crore in tax,” the officer said.
The department found that most shipping companies were following the pre-July 13 law and were deducting TDS (from the payment made for hiring of ships) at the rate of only two per cent.
“There are primarily two reasons,” the officer said adding that many companies were till late not aware of the amendment as it came all of a sudden (in July last year). “Also, the consultants of some companies are misguiding them and asking them to keep on deducting TDS at old rate,” the officer pointed out.
About the production houses, he said that the list of those who sold film rights after July 13 last year and to whom, would be prepared in a day or two. The authorities are taking help of film information magazines to prepare the list.
“Following this we would cross check in our records to find out if the purchasers of film rights have deducted TDS while making payments to the production houses,” the officer said. He, however, said that their records already show that hardly any TDS has come from the purchasers of film rights.
The TDS wing has now become aggressive, as they have got a revised target for financial year 2006-07. The target earlier was Rs 13,846 crore which was recently revised to Rs 17,920 crore. The TDS wing has so far collected tax of close to Rs 13,000 crore.
“A huge amount would come in March end which would increase our collection to a great extent,” the officer said adding that frequent surveys would also help in achieving the revised target.
The department has so far, in this financial year, conducted 200 surveys.