Q&A-6.1
Paper 6 Advanced Tax Laws and Practice
Syllabus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.2
Bird's-Eye View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.5
Line Chart Showing Relative Importance of Chapter . . . . . . . . . . . . . . . Q&A-6.9
Frequency Table Showing Distribution of Marks . . . . . . . . . . . . . . . . . . Q&A-6.10
Frequency Table Showing Marks of Compulsory Questions . . . . . . . . . Q&A-6.11
Legends for the Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.12
Study Material Based Contents
1. Study (I) General Framework of Direct Taxation in India . . . . Q&A-6.13
2. Study (II) Companies Under Income Tax Laws . . . . . . . . . . . Q&A-6.16
3. Study (III) Tax Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.47
4. Study (IV) Tax Management . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.71
5. Study (V) Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.111
6. Study (VI) Central Excise Laws . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.114
7. Study (VII) Custom Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.201
8. Study (VIII) Promissory Estoppel in Fiscal Laws . . . . . . . . . . . . Q&A-6.276
9. Study (IX) Tax Planning and Financial Management Decisions Q&A-6.278
10. Study (X) Basic Concepts of International Taxation . . . . . . . . Q&A-6.279
11. Study (XI) Advance Ruling and Tax Planning . . . . . . . . . . . . . Q&A-6.295
12. Study (XII) Taxation of Inbound Transactions . . . . . . . . . . . . . . Q&A-6.303
13. Study (XIII) Taxation of Outbound Transactions . . . . . . . . . . . . Q&A-6.309
14. Study (XIV) Objective Questions . . . . . . . . . . . . . . . . . . . . . . . . . Q&A-6.311
Question Paper of December, 2011 . . . . . . . . . . . . Q&A-6.342
Question Paper of June, 2012 . . . . . . . . . . . . . . . . . Q&A-6.347
Question Paper of December, 2012 . . . . . . . . . . . . Q&A-6.352
Question Paper of June, 2013 . . . . . . . . . . . . . . . . . Q&A-6.358
Q&A-6.2
SyllabusPaper 6 (100 marks)
Advanced Tax Laws and Practice
Level of knowledge : Expert knowledge
Objectives :
To provide —
(i) knowledge of framework of taxation system in India.
(ii) knowledge of various concepts and their application relating to tax laws with a
view to integrating the relevance of these laws with financial planning and
management decisions.
(iii) an overview of international taxation.
Detailed contents :
Part A : Direct Taxation - Law and Practice (30 marks)
1. General Framework of Direct Taxation in India
Different direct tax laws and their inter-relationship; importance of Income Tax Act
and Annual Finance Act and related Constitutional provisions; harmonisation of tax
regime.
2. Companies under Income-tax Laws
Classification and tax incidence; corporation tax as per Article 366; computation
of taxable income and assessment of tax liability considering special provisions
relating to companies.
3. Tax Planning
Concept of tax planning; Tax planning with reference to setting up a new business;
locational aspects; nature of business; tax holiday, etc. Tax planning with regard
to specific management decisions such as mergers and takeovers; location of
undertaking; introduction of voluntary retirement; tax planning with reference to
financial management decisions such as borrowing or investment decisions;
reorganisation or restructuring of capital decisions. Tax planning with respect to
corporate reorganization; tax planning with reference to employees’ remuneration.
Tax planning vis-à-vis important provisions of wealth-tax including court rulings
and legislative amendments.
4. Tax Management
Return and procedure for assessment; special procedure for assessment of search
cases, e-commerce transactions, liability in special cases; collection and recovery
of tax; refunds, appeals and revisions; penalties imposable, offences and
prosecution.
Q&A-6.3
Part B : Indirect Taxation – Law And Practice (50 marks)
5. Introduction
Special features of indirect tax levies—all pervasive nature, contribution to
Government revenues; constitutional provisions authorizing the levy and collection
of duties of central excise, customs, service tax, central sales tax and VAT.
6. Central Excise Laws
Basis of chargeability of duties of central excise - goods, manufacture,
classification and valuation of excisable goods, CENVAT; assessment procedure,
exemption, payment, recovery and refunds of duties.
Clearance of excisable goods; Central Excise Bonds; maintenance of accounts
and records and filing of returns.
Duties payable by small scale units. set-off of duties – concept, meaning and
scheme; Central Excise Concessions on exports; search, seizure and
investigation; offences and penalty.
Adjudication, Appeal and Revision, including appearance before CEGAT by
Company Secretary as authorised representative; settlement of cases.
7. Customs Laws
Levy of and exemption from, customs duties – specific issues and case studies;
assessment and payment duties; recovery and refund of customs duties.
Procedure for clearance of imported and exported goods; drawback of duties.
Transportation and warehousing
Confiscation of goods and conveyances and imposition of penalties; search,
seizure and arrest, offences and prosecution provisions.
Adjudication, Appeal and Revision; Settlement of Cases. Introduction of New
Syllabus of the Company Secretaryship Course
Student Company Secretary 45 November 2007
8. Promissory Estoppel in Fiscal Laws – principles and applicability with reference
to indirect taxes.
9. Tax Planning and Management - scope and management in customs, with
specific reference to important issues in the respective areas.
Part C: International Taxation (20 marks)
10. Basic Concepts of International Taxation
Residency issues; source of income; tax havens; unilateral relief and Double Tax
Avoidance; transfer pricing; international merger and acquisitions; impact of tax on
GATT 94, WTO, anti dumping processing; the subpart F Regime : definition of
CFC, Subpart F Income and Operating Rules.
Q&A-6.4
11. Advance Ruling and Tax Planning
Authority for advance rulings, its power and procedure; applicability of advance
ruling; application for advance ruling and procedure on receipt of application.
Tax planning and special provisions relating to certain incomes of nonresident
corporate assessee.
Double taxation avoidance agreements; general principles; provisions and tax
implications thereof.
12. Taxation of Inbound Transactions
Taxation of passive investments; capital gains & losses; income taxation; property
taxation; branch profit taxation.
13. Taxation of Outbound Transactions
Foreign tax credit; foreign income exclusions; indirect foreign tax credit (deemed
paid system vs. current pooling system); Controlled Foreign Corporations; PFIC’s
(Passive Foreign Investment Companies); cross border merger, acquisitions and
transfers.
Q&A-6.5
Bird's-Eye View
Paper 6
Advanced Tax Laws and Practice
Question Paper Based Contents of Last Five Examinations
Years Q. No. Chapter Page
No.No. Name
2011
June
1. (a)
(b)
(c)
2. (a)
(b)
(c)(i)
(ii)
3. (a)
(b)
(c)
4. (a)
(b)
(c)
(d)
5. (a)
(b)
(c)
6. (a)
(b)
(c)
(d)
7. (a)
(b)(i)
(ii)
(c) (i)
(ii)
8. (i)
(ii)
(iii)
(iv)
14
14
14
3
3
4
3
4
3
4
14
14
6
6
6
7
6
6
7
7
6
7
6
7
11
11
10
10
12
11
Objective Questions
" " "
" " "
Tax Planning
" "
Tax Management
Tax Planning
Tax Management
Tax Planning
Tax Management
Objective Questions
" " "
Central Excise Laws
" " "
" " "
Custom Laws
Central Excise Laws
" " "
Custom Laws
" "
Central Excise Laws
Custom Laws
Central Excise Laws
Custom Laws
Advance Ruling and Tax Planning
" " " " "
Basic Concepts of International Taxation
Basic Concepts of International Taxation
Taxation of Inbound Transactions
Advance Ruling and Tax Planning
330
330
331
61
61
91
56
91
56
91
332
333
159
160
192
267
160
161
239
239
161
239
123
209
299
299
286
292
305
299
Q&A-6.6
(v)
(vi)
10
10
Basic Concepts of International Taxation
" " " " "
286
280
2011
Dec.
1. (a)
(b)
2. (a)
(b)
(c)
3.
4. (a)
(b)
(c)
(d)
5. (a)
(b)
(c)
6. (a)
(b)
(c)
7. (a)
(b)
(c)
8. (i)
(ii)
(iii)
(iv)
(v)
(vi)
3
3
3
3
3
3
14
14
6
6
6
7
6
6
7
7
6
7
7
10
13
12
11
10
11
Tax Planning
" "
" "
" "
" "
" "
Objective Questions
" "
Central Excise Laws
" " "
" " "
Custom Laws
Central Excise Laws
" " "
Custom Laws
" "
Central Excise Laws
Custom Laws
" "
Basic Concepts of International Taxation
Taxation of Outbound Transactions
Taxation of Inbound Transactions
Advance Ruling and Tax Planning
Basic Concepts of International Taxation
Advance Ruling and Tax Planning
62
49
64
57
57
64
334
334
161
161
192
268
162
193
269
269
163
240
240
287
309
305
299
287
299
2012
June
1. (a)
(b)
2. (a)
(b)
(c)
3.
4. (a)
(b)
(c)
(d)
5. (a)
(b)
14
3
3
3
4
2
14
14
6
7
6
7
Objective Questions
Tax Planning
" "
" "
Tax Management
Companies under Income Tax Laws
Objective Questions
" "
Central Excise Laws
Custom Laws
Central Excise Laws
Custom Laws
335
67
68
68
92
29
336
337
163
270
194
270
Q&A-6.7
(c)
6. (a)
(b)
(c)
7. (a)
(b)
(c)
8. (i)
(ii)
(iii)
7
6
7
7
6
6
7
10
11
12
Custom Laws
Central Excise Laws
Custom Laws
" "
Central Excise Laws
" "
Custom Laws
Basic Concepts of International Taxation
Advance Ruling and Tax Planning
Taxation of Inbound Transactions
271
195
241
241
163
164
241
288
300
305
2012
Dec.
1. (a)
(b)
(c)
2. (a)
(b)
3. (a)
(b)(i)
(ii)
(c)
4. (a)
(b)
(c)
(d)
5. (a)
(b)
(c)
6. (a)
(b)
(c)
7.(a)(i)
(ii)
(b)
(c)
8. (i)
(ii)
(iii)
(iv)
(v)
(vi)
2
3
3
4
2
2
4
3
3
14
14
6
6
6
7
6
6
6
7
6
7
6
7
10
11
12
10
12
10
Companies under Income Tax Laws
Tax Planning
" "
Tax Management
Companies under Income Tax Laws
" "
Tax Management
Tax Planning
" "
Objective Questions
" "
Central Excise Laws
" "
" "
Custom Laws
Central Excise Laws
" "
" "
Custom Laws
Central Excise Laws
Custom Laws
Central Excise Laws
Custom Laws
Basic Concepts of International Taxation
Advance Ruling and Tax Planning
Taxation of Inbound Transactions
Basic Concepts of International Taxation
Taxation of Inbound Transactions
Basic Concepts of International Taxation
31
58
69
109
45
31
93
58
58
338
339
195
164
196
271
196
197
197
272
199
242
165
242
290
302
306
293
303
279
Q&A-6.8
2013
June
1. (a)
(b)
2. (a)
(b)
3. (a)
(b)
(c)
4. (a)
(b)
(c)
(d)
5. (a)
(b)
(c)
6. (a)
(b)
(c)
7. (a)
(b)
(c)
8. (i)
(ii)
(iii)
(iv)
(v)
14
3
2
3
3
4
3
14
14
6
7
6
7
7
6
7
7
6
7
6
10
10
11
10
12
Objective Questions
Tax Planning
Companies under Income Tax Laws
Tax Planning
" "
Tax Management
Tax Planning
Objective Questions
" "
Central Excise Laws
Custom Laws
Central Excise Laws
Custom Laws
" "
Central Excise Laws
Custom Laws
" "
Central Excise Laws
Custom Laws
Central Excise Laws
Basic Concepts of International Taxation
" " " "
Advance Ruling and Tax Planning
Basic Concepts of International Taxation
Taxation of Inbound Transactions
339
59
45
70
70
110
59
340
340
165
273
199
273
274
199
274
274
165
243
165
291
291
302
294
307
Question upto Dec. 2008 are from CS Final Gr. III Old Course and from June - 2009onwards are from CS Professional Programme New Course.
Q&A-6.13
Star Rating
On the basis of Maximum marks from a chapter Nil
On the basis of Questions included every year from a chapter Nil
On the basis of Compulsory questions from a chapter Nil
1 General Framework of
Direct Taxation in India
This Chapter Includes : Different direct tax laws and their inter-relationship;
Importance of Income Tax Act and Annual Finance Act and related Constitutional
provisions; Harmonisation of tax regime.
Marks of Short Notes, Distinguish Between, Descriptive & Practical Questions
SHORT NOTES
2003 - Dec [3] Write notes on the following:
(i) Tax avoidance vs. tax evasion. (5 marks)
Q&A-6.14 Solved Scanner CS Prof. Prog. M-III Paper 6
Answer:
Tax Avoidance Tax Evasion
1 Tax avoidance means planning for
minimization of tax according to legal
requirement but it defeats the basic
intention of the legislature.
Tax evasion means avoiding of tax
liability illegally.
2 Tax avoidance takes into accounts
various lacunas of law.
Tax evasion involves use of unfair
means.
3 Tax avoidance is lawful but involves the
elements of mala fide intention.
Tax evasion is unlawful.
4 Tax avoidance is planning before the
actual liability for tax comes into
existence.
Tax evasion involves avoidance of
payment of tax after the liability of
tax has arisen.
DESCRIPTIVE QUESTIONS
1999 - Dec [5] (b) What is the effect of an administrative circular issued by the Central
Board of Direct Taxes giving extra-legal benefits to tax-payers? Is it enforceable against
the income-tax department when such a circular has not been adhered to in
assessment? Discuss. (8 marks)
Answer:
As per section 119(1) of the Income Tax Act, 1961 all the income tax authorities and
other persons employed in the execution of the act shall observe and follow the orders,
instructions and directions of the Boards i.e., CBDT (Central Board of Direct Taxes). In
view of the binding nature of the circulars, it is not open to the revenue to raise a
contention that is contrary to a binding circular issued by the Board, still a departmental
circular is not law. It may bind the income tax authorities but the appellate authority, the
Tribunal or the High Court is not bound to take a judicial notice of a circular. The duty
of interpreting a statute is of the Court and it has to interpret the law independent of any
interpretation put upon it by the executive.
The circulars can bind the Assessing Officer but will not bind the appellate authority or
the Tribunal or the Court or even the assessee. CIT. v. Hero Cycles Pvt. Ltd. 1997.
However, where a circular gives administrative relief strictly beyond the terms of the
relevant provision of the statute, the contention of the department that the circular has
no legal effect cannot be accepted. It is now the judicial view that circulars giving
administrative relief to assessee in general are binding on the tax authorities. In
Solved Scanner CS ProfessionalProgramme Advanced Tax Laws and
Practice M-III Paper-6 Dec-2013
Publisher : Shuchita Prakashan ISBN : 9789350346044 Author : Dr. Arun Kumar, CSSumit Srivastava
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