Paying Taxes-Mumbai

Paying Taxes Questionnaire - India Mumbai
www.doingbusiness.org
Dear Contributor,
We would like to thank you for your participation in the Doing Business project. Your expertise in the field of taxation is essential to
the success of the Doing Business report, one of the flagship publications of the World Bank Group that benchmarks business
regulations in 190 economies worldwide. The paying taxes indicator, which measures the taxes and mandatory contributions that a
standardized case study firm pays in its second year of operation, as well as new measures of the efficiency of postfiling processes is
one of the 11 indicator sets published by the Doing Business report.
The report attracts much attention around the world. The latest edition, Doing Business 2017: Equal Opportunity for All, introduced
improvements in the paying taxes and protecting minority investors indicators, and included a gender component in 3 of 11 Doing
Business indicator sets. It received over 7,000 media citations within just a week of its publication on October 25, 2016 and the
report was downloaded almost 40,000 times within that same period. A record 137 economies implemented a total of 283 reforms.
Low and middle income countries carried out more than 75% of these reforms, with Sub-Saharan Africa accounting for 80 of them.
Governments worldwide read the report with interest every year, and your contribution makes it possible for the Doing Business
project to disseminate the regulatory best practices that continue to inspire their regulatory reform efforts. Since Doing Business
2006, economies worldwide have implemented 443 reforms making it easier to pay taxes. In 2015, 46 economies implemented such
reforms with the introduction or enhancement of electronic systems for filing and paying taxes as the most popular reform.
We are honored to be able to count on your expertise for Doing Business 2018. Please do the following in completing the
questionnaire:
 Review the assumptions of the case study before updating last year’s information in the questionnaire.
 Describe in detail any reform that has affected paying taxes, obtaining a VAT refund and tax audits in calendar year 2016.
 Be sure to update your name and address if necessary, so that we can mail you a complimentary copy of the report.
 As of last year, we cover questions on postfiling processes (VAT refund, tax audit). We urge you to provide us with answers
to these questions. We included last year’s consolidated answers for ease of reference.
 We included this year new questions on childcare services and tax benefits under section C6.
 Kindly return the questionnaire to the following address: dbtaxes@worldbankgroup.org.
We thank you again for your invaluable contribution to the work of the World Bank Group.
Sincerely,
Ms. Joanna Nasr Ms. Parvina Rakhimova

Phone: +1(202) 458 0893 Fax: (202) 473-5758
Fax: (202) 473-5758 Phone: +1 (202) 458 2126
Email: jnasr@worldbank.org Email: prakhimova@worldbank.org
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First name Last name Position Firm Address Phone E-mail

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A. Case Study Assumptions

The paying taxes indicators record the taxes and mandatory contributions that a standardized case study firm (a medium-size
company) must pay in a given year and also measure the administrative burden of paying taxes and contributions. There are 4
indicators: payments, time, total tax rate and postfiling index. The number of payments indicates the different types of taxes and
contributions which the company has to file and pay, adjusted for the way in which those payments are made. The time indicator
captures the number of hours it takes to prepare, file and pay 3 major types of taxes: profit taxes, consumption taxes, and labor
taxes and mandatory contributions. The total tax rate measures the tax cost borne by the case study firm. The postfiling index
captures the time to comply with a VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and
time to complete a corporate income tax audit.
The standardized case study was developed to ensure comparability of responses across countries. Therefore, in completing the
questionnaire, please keep in mind the following key assumptions about the standardized company, called “TaxpayerCo.”
General Description of the Company

Start of operations: The company (TaxpayerCo.) started operations 2 years ago, on January 1, 2015. On that date, the
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company bought all its assets and hired all its employees.
2 Year of assessment: January 1, 2016–December 31, 2016.
Type and location: TaxpayerCo. is a taxable corporation and operates in a typical manufacturing location in the largest
business city in the country – in Mumbai.
3 The company is liable for taxes levied at the local, state/provincial and national levels. Please consider taxes at all levels when
completing the questionnaire. TaxpayerCo. does not qualify for investment incentives or any special benefits apart from those
related to the age or size of the company.
Ownership: The company is 100% domestically and privately owned; that is, it has no foreign or state ownership. The company
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has 5 owners, none of whom is a legal entity.
5 Sales: INR 84,373,656
6 Capital: The company’s capital has not changed since the company was created.
Accounting rules: Accounting is compliant with generally accepted accounting principles, or GAAP (local or international,
7 depending on your national laws). This includes, for example, the International Financial Reporting Standards/International
Accounting Standards (IAS/IFRS) regime, if applicable to your country.
Type of operation: TaxpayerCo. performs general manufacturing and commercial activities: it produces ceramic flowerpots
8 and sells them at retail. All its transactions are purely domestic, and it does not handle any products subject to a special tax
regime, such as liquor or tobacco.
Specific Assumptions and Definitions
Mandatory tax books and records: In the course of the financial year, companies are required to maintain various books and
records for accounting and audit purposes. These books are often also used for preparing tax computations and completing
tax returns. In some cases, tax laws or tax authorities may also require companies to keep additional books and records
specifically for tax purposes—books and records that are over and above those kept for the accounting and audit processes
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and that are not required for the financial reporting processes. The questionnaire’s sections on compliance time include an
entry under each of the 3 tax categories for time related to maintaining mandatory tax books and records. Please disregard in
those entries any time spent on books and records that are also used for financial accounting or audit purposes. Please only
include time associated with additional books and records specifically required for tax purposes.
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Employees: The company has 60 employees: 4 managers, 8 assistants and 48 workers. All the employees were hired on the
same day: January 1, 2015. No employee has left the company and no new employee has joined the company since January 1,
10 2015. One of the managers is also an owner. All employees at any given level earn the same wage as others at their level. All
employees are nationals and male. Each employee is married with 2 pre-teen children and has no other significant source of
income. Each is a single wage earner (spouse has no income).
Social security contributions and payroll taxes: Please include all social security contributions and payroll taxes paid by the
employer for each category of employees on the wages and salaries paid by the company. These taxes may be referred to by
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different terms in different economies. These taxes and contributions should be split between those that are a cost to the
employer and those that are withheld by the employer on behalf of the employee.
Other labor taxes or mandatory contributions: In this category include all other labor taxes and social contributions paid by
the company, withheld by the company from employees’ pay or paid directly by the employees. Please keep in mind that
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these can be collected by different levels of government. Please include all government-mandated contributions even if paid
to nongovernment entities (e.g., compulsory guarantees and insurance paid to third-party agencies).
Land: On January 1, 2015, the company began operations owning 2 plots of land, each with an area of 557.4 square meters
(6,000 square feet). In early January 2016, plot number 2 was sold.
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Any property transfer tax due on the sale needs to be listed in Section C.1. If there is a stamp duty or any other taxes/fees
payable on the sale contract, please include these taxes/fees as well.
Building: The building where production and storage take place, located on land plot 1, was originally 929 square meters
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(10,000 square feet). It was expanded in 2016 with half the proceeds from the sale of land plot 2.
Truck: The company owns a truck that is used to ship products to customers and is classified as a nonluxury, medium-size unit.
15 This truck covers on average 80,000 km (50,000 miles) a year and weighs 15,300 kilos (34,000 pounds) when loaded. In
addition to this, the company also leases one truck.
Capital gains: At the beginning of the second year of operation (2016), the company sells a plot of land (land plot 2) that it had
owned for 12 months at a price 20% higher than the original cost of the land plot. Please indicate whether there is a capital
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gains tax separate from corporate income tax by including the tax in Section C.1. Please note that half of the proceeds from
this sale are reinvested in assets (by expanding the existing building).
Dividends: In the second year of operation (2016), the company distributes 50% of its profits to its owners. The dividends are
17 paid in cash. The other 50% of profits are kept as retained earnings. Please provide any dividend tax borne by the company in
this transaction. If the company merely withholds tax on paying shareholders, EXCLUDE this withheld dividend tax.
Fuel expenses: TaxpayerCo. purchases vehicle fuel and therefore should pay fuel tax (if applicable). Fuel tax may be embedded
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in the price of fuel paid at the pump.
Environmental duties: TaxpayerCo. produces 2 tons of nontoxic waste a month and therefore must pay the tax or other duties
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(if any) associated with waste production.
Would TaxpayerCo. be considered a micro, small, medium-size or large company in your country? Please specify the criteria for
classification.
Small Size Company based on Investment - less than Rs 5 Cr
B. Reform Update
Please update us of any tax reforms that occurred in your country in calendar year 2016 or that are planned for this year. These
could include new tax codes, a change in rates, a change in the frequency of payment of taxes, unification of tax agencies into one
administration, elimination or merging of taxes, introduction or improvement of online filing systems, or new rules related to audit
or VAT cash refunds, among others.
If yes, please explain:

1. Between January 1, 2016 and As per Rule 12 of the Income Tax Rules, 2016, the taxpayer being a company is
December 31, 2016, were there any Yes required to mandatorily file the return of income electronically through digital
major changes to the tax laws, signature (DSC). Further, on such filing the companies are not required to send the
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regulations or administration in your acknowledgment (ITR V) to the tax authorities in hard copy for processing or
country? verification. This reduces the time for completion of return of income. URL:
goo.gl/8ci9e4
2. Reduction in corporate tax rate from 30% to 29% for domestic companies
whose total turnover/ gross receipts does not exceed INR 50 Million. The
amendment can be referred at Paragraph E of Part III of the First Schedule to the
Finance Act, 2016. Available at http://egazette.nic.in/
3. Under the newly introduced Section 115BA of the Income Tax Act, 1961,
the corporate tax rate has been reduced from 30% to 25% for newly set-up
domestic companies engaged solely in the business of manufacture or production
of article or thing. URL: goo.gl/KIHwOQ
4. 100 per cent deduction of profits for any three consecutive years out of
five years is available to start-ups incorporated up to 31 March 2019. Refer Section
80IAC of the Income Tax Act, 1961. URL: goo.gl/5WPgEQ
5. New Direct Tax Dispute Resolution Scheme, 2016 has been introduced for
speedy settlement and resolution of disputes/pending litigations. Refer Chapter X
of the Finance Act, 2016. URL - goo.gl/TFC82q
6. Rebate under Section 87A raised to INR 5000 from INR 2000 for resident
individuals with income up to INR 500,000. URL: goo.gl/0W9vG8
7. Mandatory online payment of ESI and EPF. Link is available to employer to
make the online payment without using his login and password. The link is 1.
ESIC- goo.gl/hFSEhC and Point No. 2 on this URL: goo.gl/W2AWhu and
EPFO- goo.gl/FaPTYf
8. For making electronic payment of EPF and ESI, private banks were included in the
list. This lead to ease in making online payment of EPF and ESI
EPF Link-
http://epfindia.gov.in/site_docs/PDFs/Updates/Banks_onlinepayment_gateway.pdf
ESI Link- http://www.egazette.nic.in – E gazette notification [F. No. G-
20025/1/2014-SS-II] dated 4 January 2017 by Ministry of Labour and Employment
9. The tax department introduced the facility and procedure for e-audit of
the income tax return. Under the e-audit, the audit of the income tax return would
be undertaken online, all the documents/details/information can be provided by
the taxpayer through his email id. Refer Rule 127 of the Income Tax Rules, 1962
Rule 127 - goo.gl/8ci9e4, Procedures - Notification 2/ 2016 dated 3 February 2016 -
goo.gl/ouP8a1
10. The tax department introduced an online appeal filing procedure (Form
35) for filing an appeal against the order issued by the tax audit official. Rule 45 of
the Income Tax Rules, 1962 has been amended to bring online filing of appeal in
force.
Rule 45 - goo.gl/8ci9e4
11. For the purpose of selection of the taxpayers for the audit purpose, the tax
department is using risk based system and only 2% of the revised returns were
selected for audit after satisfaction of the other risk parameters.
12. Maharashtra Sales Tax Department has formed Nodal Division based on
Geographic Location. Every Tax Identification Number (TIN) is attached to some
Nodal Officer. This is a shift from Function Based System (pl refer attached Trade
Circular 20T of 2015). URL: goo.gl/iusJGy
13. Maharashtra Sales Tax Department is already automated. For giving better
services to the Taxpayers, Department shifted to SAP based automated system
from May 2016.
URL: Trade Circular 18T of 2016 and Circular 32T of 2016 - goo.gl/iusJGy
14. The payment of Value Added Tax (VAT) has been made mandatorily online.
It is provided through 25 Nationalised Banks. Additional facility of e-Payment
through SBI e-Pay and Government Revenue Accounting System (GRAS) made
available to the Taxpayers.
http://www.mahavat.gov.in/Mahavat/index.jsp - refer left side tabs for e-payment
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and e-returns
15. The return has been made invoice based. Nearly 80% of the return fields
are auto populated from invoice based Sales and Purchase Annexure which are part
of the return template itself. Returns under Maharashtra VAT and Central Sales Tax
(CST) are prepared at the same time from the same set of Sales and Purchase
Annexure. No requirement to prepare any separate set of books of accounts or
statements for the purpose of preparation of returns. The invoice data can be
duplicated to Sales/Purchase Annexure from these books of accounts. Given above,
the time required for summarization of data is not required. Refer Trade Circular
22T of 2016 - goo.gl/M2z385
16. The Maharashtra Sales Tax Department is providing a billing Software to
the dealers at free of cost. It is available on the website of the Department. If the
dealer generates invoices using this software, then Sales and Purchase Annexure
are auto generated. This exercise reduces the time required for preparation of
return. Refer Trade Circular 22T of 2016 - goo.gl/M2z385
17. The tax department has issued a circular pursuant to which the refund
claim should be granted within 45 days from due date of filing of VAT Audit Report.
Grant of refund of VAT- Trade Circular 5T of 2016 - goo.gl/WXPqL
18. The online payment of Profession Tax has been made mandatorily online.
It is provided through Government Receipt Accounting System (GRAS) and 25
Nationalised Banks. Additional facility of e-Payment of Profession Tax through SBI
e-Pay made available to the Taxpayer. This reform reduced the payment time
significantly. Trade Circular 32T of 2016 - goo.gl/mEqAdQ and GRAS system-
https://gras.mahakosh.gov.in/salestax/
2. Between January 1, 2016 and No
December 31, 2016, were any new No
taxes introduced?
2.1 Between January 1, 2016 and Wealth tax has been abolished and it is not applicable from 1 January, 2016. Refer
December 31, 2016, were any taxes Yes Finance Act 2015 - http://egazette.nic.in/ and Press release dated 1 April 2016 -
eliminated or merged with other taxes? goo.gl/p8f1A4
3. Between January 1, 2016 and December 31, 2016, did any of the following tax rates or tax bases change?
If yes, please explain the changes:
a. Corporate income tax 1. Reduction in corporate tax rate from 30% to 29% for domestic companies whose
Yestotal turnover/ gross receipts does not exceed INR 50 Million. The amendment can be
referred at Paragraph E of Part III of the First Schedule to the Finance Act, 2016.
Available at http://egazette.nic.in/
2. Under the newly introduced Section 115BA of the Income Tax Act, 1961, the
corporate tax rate has been reduced from 30% to 25% for newly set-up domestic
companies engaged solely in the business of manufacture or production of article or
thing. URL: goo.gl/KIHwOQ
b. Labor taxes and mandatory 1. The Provident Fund administrative charges reduced from 1.10% to 0.85%. This
contributions Yesresulted in reduction of employer's social security contribution to 13.36%. Refer
Notification No. S -35012/01/2014-SS, II dated 2nd february 2015.
URL:goo.gl/tlqSL5
2. ESIC has reduced Employees contribution to 1% and employers' contribution to 3 %
in the areas where ESI Act is implemented for the first time as per Government of
India Gazette notification Extraordinary No 711 Part II, Section -3. Sub Section (1)
containing GSR-959(E) dated 6/10/2016. The notification and relevant circulars
available at
http://esic.nic.in/backend/writereaddata/file/9f085e16fc292fb8f8a7ebf6bbe8f63b.pdf
c. Sales tax, value added tax (VAT), 1.The tax department has issued a circular pursuant to which the refund claim should
goods and service tax (GST) or Yesbe granted within 45 days from due date of filing of VAT Audit Report. Trade Circular
other consumption tax 5T of 2016 - goo.gl/2IVuyI
2. Reduction of tax in following cases: a) Cotton from 5% to 2%, b) Sterile Water from
12.5% to 5.5%, c) Pyrolysis Oil, LED Tubelight, Sweetcorn, some Stationary Items from
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12.5% to 6%. goo.gl/DGgVLr
d. Any other taxes No
No
4. Between January 1, 2016 and December 31, 2016, did the tax payment or filing schedules change for any of the following taxes?
If yes, please explain the
changes:
a. Corporate income tax No No
b. Labor taxes and mandatory contributions No No
c. Sales tax, value added tax (VAT), goods and service tax (GST) or other No No
consumption tax
d. Any other taxes No No
5. Between January 1, 2016, and December 31, 2016, were there any legal or regulatory changes that increased or reduced the
time for preparing, filing or paying any of the following taxes?
a. Corporate income tax As per Rule 12 of the Income Tax Rules, 2016, the taxpayer being a company is
Yesrequired to mandatorily file the return of income electronically through digital
signature (DSC). Further, on such filing the corporates are not required to send the
acknowledgment (ITR V) to the tax authorities in hard copy for processing or
verification. This reduces the time for completion of return of income.
Select Rule 12 at URL: goo.gl/8ci9e4
b. Labor taxes and mandatory 1. Payment for Profession Tax is made mandatory online . It is provided through
contributions YesGovernment Receipt Accounting System (GRAS) and 25 Nationalised Banks.
Additional facility of e-Payment of Profession Tax through SBI e-Pay made available
to the Taxpayer. SBI e-Pay is connected with the nationalised Banks, Private Banks
and Co-operative Banks. Trade Circular 32T of 2016 - goo.gl/mEqAdQ and GRAS
system- https://gras.mahakosh.gov.in/salestax/
2. Online payment of EPF and ESIC through Banks.
ESIC- goo.gl/hFSEhC and Point No. 2 on this URL: goo.gl/W2AWhu
EPFO- goo.gl/FaPTYf
3. Banks launched dedicated PF Helpline Numbers. Inclusion of Private Banks for
Electronic Payment of ESI and EPF.
4. ESIC- Notification [F. No. G-20025/1/2014-SS-II] - http://www.egazette.nic.in – e
gazette notification by Ministry of Labour and Employment dated 4 January 2017
EPFO -
http://epfindia.gov.in/site_docs/PDFs/Updates/Banks_onlinepayment_gateway.pdf
c. Sales tax, value added tax (VAT), i) Payment of VAT is made mandatorily online. It is provided through 25
goods and service tax (GST) or other YesNationalised Banks. Additional facility of e-Payment through SBI e-Pay and
consumption tax Government Revenue Accounting System (GRAS) made available to the Taxpayers
(pl refer Trade Circular 32T of 2016). SBI e-Pay is connected with the Nationalised
Banks, Private Banks and Co-operative Banks. URL:
http://www.mahavat.gov.in/Mahavat/index.jsp - refer left side tabs for e-payment
and e-returns
ii) The return has been made invoice based. Nearly 80% of the return fields are auto
populated from invoice based Sales and Purchase Annexure which are part of the
return template itself. Returns under Maharashtra VAT and Central Sales Tax (CST)
are prepared at the same time from the same set of Sales and Purchase Annexure.
No requirement to prepare any separate set of books of accounts or statements for
the purpose of preparation of returns. The invoice data can be duplicated to
Sales/Purchase Annexure from these books of accounts. Given above, the time
required for summarization of data is not required. Trade Circular 22T of 2016 -
goo.gl/M2z385
ii) Further, Billing Software is provided by the Department free of cost. It is available
on the website of the Department. If the dealer generates invoices using this
software, then Sales and Purchase Annx are auto generated. This exercise reduces
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the time required for preparation of return. Trade Circular 22T of 2016 -
goo.gl/M2z385
6. Between January 1, 2016, and December 31, 2016, were there any changes to the method (e.g., electronic capabilities) of
preparing, filing or paying any of the following taxes that increased or reduced the time required?
a. Corporate income tax Yes Easy to use software facility for attachment of
DSC.
Rule 12 - goo.gl/8ci9e4 and DSC Manual -
goo.gl/yiULfb
b. Labor taxes and mandatory contributions Yes 1. Mobile application for employees and
employers. Refer URL :
http://59.180.231.60:9091/AppDownload/
c. Sales tax, value added tax (VAT), goods and service tax (GST) or Yes 1. Changes in method as per Trade Circular 22T
other consumption tax of 2016 (goo.gl/WXPqLn )reduced the
preparation, filling and payment time
significantly. Reasons are same as explained in
the answer to the Question No. 4c of the
B.Reform Update.
2. Additional facility the e-Payment of VAT

made available as per Trade Circular 32T of
2016 (URL:
http://www.mahavat.gov.in/Mahavat/index.jsp
- refer left side tabs for e-payment and e-
returns )reduced the payment time
significantly. Reasons are same as explained in
the answer to the Question No. 4b of the
B.Reform Update.

7. Between January 1, 2016, and December 31, 2016, were there Yes 1. Introduced an online appeal filing procedure
any legal or regulatory changes that affected the audit procedure (Form 35) for filing an appeal against the order
for direct and/or indirect taxes in your economy (e.g. introduce issued by the tax audit official. Rule 45 of the
time limits, introduce a risk-based audit selection system, apply Income Tax Rules, 1962 has been amended to
single issue audit, increase number of tax auditors)? bring online filing of appeal in force.
Rule 45 - goo.gl/8ci9e4
2. Introduction of procedures for e-assessments
for direct tax. URL:goo.gl/xqolZi
3. Use of risk based system for selection of the
taxpayers for the audit purpose.
4. The tax department introduced the facility and
procedures for e-audit of the income tax return.
Under the e-audit, the audit of the income tax
return would be undertaken online, all the
documents/details/information can be provided
by the taxpayer through his email id. Rule 127 -
goo.gl/8ci9e4 , Procedures - Notification 2/ 2016
dated 3 February 2016 - goo.gl/ouP8a1
5. CBDT has implemented E-Proceeding for all
taxpayers which is an expanded and extended
form of e-assessment involving direct
communication between the taxpayer and the
Department for all Income Tax proceedings
including assessment. Under this procedure all
notices, letters and queries raised by the officers
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of the Department would not only be sent by e-
mail to the taxpayer but would be made available
to the taxpayer under the e-proceedings tab of
the taxpayer’s account in the e-filing portal of the
Department. The taxpayer can submit his return
online and the same would be visible in
chronological order to the officer in the Income
Tax Business Application. Notification No. 4/2017
- goo.gl/qSKGe0
6. Every year the VAT Department selects the
cases for Computerised Desk Audit (CDA) based
on the parameters fixed by the Department.
Department publishes such list on the Portal.
Facility to comply online to the CDA findings is
made available on the Department's Portal. If the
dealer pays as per the findings of the CDA and
files revised return, this audit proceeding is
closed. If the dealer fails to pay as per the CDA
findings, then such cases are selected for Issue
Based Audit. The list of the cases selected for the
Issue based Audit is also published by the
Department on the website. Department has
issued Trade Circular 37T of 2016 -
goo.gl/KXxPGG . Eleven parameters are set by the
Department for CDA. The List of the dealers who
are selected for the CDA is available in Whats
New Section of the website of the Department
(http://www.mahavat.gov.in/Mahavat/index.jsp)
. List of the dealers who are selected for the
Assessment or Issue Based Audit is also available
at the same place
(http://www.mahavat.gov.in/Mahavat/index.jsp).
8. Between January 1, 2016, and December 31, 2016, were there Yes Department has issued Trade Circular 5T of 2016
any legal or regulatory changes that affected the process of on 6/2/2017. As per the said Circular, refund
claiming and obtaining a VAT refund in your economy (e.g. claim should be granted within 45 days from due
introduce time limits, payment of interest for late VAT refunds, date of filing of VAT Audit Report. If F-501 is filed
introduce VAT refund for cases of capital purchase, fast-track after such due date, it is to be granted within 45
process for specific type of taxpayers)? days date of uploading of F-501. 17. Grant of
refund of VAT- Refer Trade Circular 5T of 2016 -
goo.gl/2IVuyI
9. Have any changes to tax rates, associated rules or tax administration become effective or are expected to become effective
between January 1, 2017 and June 1, 2017? Please note that these reforms will not affect the data in this year’s report.
If yes, please explain the
changes:
a. Corporate income tax Yes Tax rate of 25% for companies
having turnover below 50
crores. Refer Paragraph E of
Part III of the First Schedule to
Finance Act 2017.
http://egazette.nic.in/
b. Labor taxes and mandatory contributions Yes The Provident Fund
administrative charges reduced
from 1.10% to 0.65%. This
resulted in reduction of
employer's social security
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contribution to 13.16% for the
fiscal year 2017. Notification
No. S -35012/01/2014-SS, II
dated 15 March 2017-
goo.gl/Uc1LNQ and
http://www.egazette.nic.in – e
gazette notification by Ministry
of Labour and Employment
dated 15 March 2017
c. Sales tax, value added tax (VAT), goods and service tax (GST) or other Yes i) The concept of Input Tax
consumption tax Credit (ITC) Ledger is sought to
be made available during the FY
2017-18. Dealer can verify his
ITC Summary Report. It will be
available invoicewise as well as
TINwise. Dealer can wiew this
report from both sides (salewise
as well as purchasewise).
Updation will be made available
to the dealer after every 24
hours.
ii) From Mar-2017 challan will
be auto prepared after filing of
the return if the dealer has not
made advance payment.
iii) Roll out of GST to further
ease out Tax payments and
return filing . GST-
http://www.cbec.gov.in/htdocs-
cbec/gst.
d. Any other taxes Yes Individual Tax rate in threshold
Rs. 250000- Rs. 500000 to be
5% (10% currently) - which
would result in tax savings
ranging between INR 2,575 to
INR 14,807 for all taxpayers.
Refer Paragraph A of Part III of
the First Schedule to the
Finance Act 2017 -
http://egazette.nic.in/
C. Data Update
In the following pages, please consider taxes paid to all levels of government by TaxpayerCo. during the calendar year ending
December 31, 2016. For your convenience, parts of the questionnaire are already populated with the aggregate answers obtained
last year for 2015. You only need to update those figures for 2016. Please keep in mind that last year’s answers provided here
represent a unified response based on all the answers we received from various contributors.
When answering the questions, always use the method for computing the taxes that is most favorable for the company in the
second year of operation, i.e. minimize taxes within legal constraints and make reasonable assumptions where necessary. Please
state any such assumptions clearly in the comments corresponding to the relevant data input cell. The information provided should
be based on a typical or normal business in your country of a size similar to TaxpayerCo.
If you feel that a unified answer reported in the subsequent sections does not reflect the reality in your country, kindly provide your
own answer and clearly indicate why you disagree.
11
C.1 List of Taxes
In the table below, please update the information for each tax, taking into account the detailed assumptions of the case study
described in section A. If you make any changes to last year’s data, please explain the change and advise why you think the data for
this year should be different:
 Correction (our unified answer is wrong and does not reflect the current and previous reality in your country), OR
 Reform (the different answer resulted from a modification in practice or by law that occurred as of January 1, 2016).
12
India Mumbai - Mumbai
Number of taxes: 16
Tax Number of payments Can this tax be paid Can this tax be paid Statutory tax rate Tax base Explain any
and filings required and filed online? and filed jointly with changes to the
in one year (monthly = 12, another tax? data and provide
quarterly = 4, annual = 1). the legal basis
Please include any final ‘Jointly filed and when applicable.
payments or filings that need paid’ means taxes Indicate when
to be made. are reported in the the change took
same return and paid effect.
in one slip.
Last year Update Last Year Update Last Year Update Last Year Update Last Year Update
1. Vehicle tax 1 1 no no no no INR 200 INR fixed fee per fixed
(pollution tax) 200 vehicle per
vehicle
2. Tax on insurance 1 0 no Not no no 12% * (1+ insurance NA Not

contracts payab 2% 0 premium payable by
le by Education Taxpayer co
cess + 1%
Taxpa since Service
Secondary
yerCo & High tax is part of
since education the Insurance
Servic cess) Premium
e tax Invoice. The
is part service tax
of the payment and
Insura return filing in
nce relation to the
Premi insurance
um contract is
Invoic undertaken by
e Insurance
Company and
not the
Taxpayer Co.
13
in one slip.
3. Tax on interest 0 0 no not no not 10% not interest not Interest tax
applic applic applica income applica has been
able able ble ble abolished after
31 March
2000.
4. Dividend tax 1 1 no yes no no 16.995% dividend DDT is
17.304 distributions dividen paid online
% d from multiple
distrib public and
utions private sector
banks website
and details
form part of
the Corporate
Tax Return
5. Fuel tax 1 0 no not no not not fuel not There is No
applic applic applica consumption applica Fuel Tax.
able able ble ble Sales tax on
Fuel is
included as a
part of the
Fuel Invoice.
The Sales Tax
is payable by
Petrol Filling
Station and
corresponding
return is also
14
in one slip.
filed by Petrol
Filling Station
and not by
TaxPayer Co.
6. Property tax 1 1 no yes no no 10% 10% assessed
value assesse
d value
of the
propert
y
7. Social security 12 1 no yes no no 13.61% gross salaries Basic EPF
contributions 13.36 salary payments are
% plus required to be
dearne mandatorily
ss paid online
allowa
nce
and
retaini
ng
allowa
nce
8. Employee's state 12 1 yes yes no no 4.75% 4.75% gross salaries gross ESIC
insurance salaries payments are
contribution required to be
mandatorily
paid online
15
in one slip.
9. Corporate 5 1 yes yes no no 30% 30% taxable profit Corporate
income tax Taxabl Tax payment
e profit and filing of
return is made
online
1 Central Sales Tax 12 0 yes yes no no 2% not purchase not CST is
0. (but applica price applica payable by the
not ble ble seller when he
applic makes an
able inter-State sale
in the to a dealer
instan registered in
t another State
case) (B2B
transactions).
In the
questionnaire,
we are
assuming that
the case study
company is
making only
retail sales,
and hence, no
CST can be
leviable on
these sale
transactions.
All retail sales
16
in one slip.
attract only
VAT as these
are assumed to
be intra-State
sales
transactions
under the CST
Act, 1956.
Further,
another point
to be made
here is that
CST is only
paid by the
seller in the
origin State of
the inter-State
sales
transactions.
The buyer
does not pay
CST to the
Government
as he is based
in the
destination
State. The
buyer submits
a declaration
17
in one slip.
to the seller
that he is
liable to pay
CST, and not
VAT, and
accordingly,
the seller
collects 2%
CST from
him, and pays
the same to the
Government
of the origin
state.
Therefore, in
the
questionnaire,
even if the
case study
company
purchases any
raw materials
from a dealer
in another
State, the case
study
company does
not make any
payment of
18
in one slip.
CST to the
(any) State
Government.
1 State VAT 12 1 yes Yes no No 12.5% value added Value Rate
1. 13.5% Added increased to
From 13.5%. Pl
Sep- refer attached
2016. Notification
dtd 16/9/2016
(No. VAT.
1516/CR
123/Taxation-
1)
dealers can
make online
payment of
VAT in
Mumbai after
logging into
the
Department's
website here:
http://www.ma
havat.gov.in/
Mahavat/Hom
eController?lo
gin=login&log
intype=DEAL
ER
19
in one slip.
1 CENVAT (Excise 12 1 yes yes no no 12.5% 12.5% value added value The
2. Duty) added payment of
excise and
filing of return
is done online.
https://www
.aces.gov.in/eP
ayment.jsp
1 Income 12 0 no yes yes yes 10% on applicable on No
3. surcharge (but (but 7 federal taxes applica Surcharge is
not not % if ble payable by
applic applic above federal TaxpayerCo.as
able able INR 1 taxes the income is
in the in the crore less than one
instan instan and crore.
t t upto Otherwise also
case) case) INR 10 it forms part of
crore the corporate
and tax and not to
12% if be considered
above separately.
INR 10
crore
1 Education cess 12 0 no yes yes yes 2% 2% all federal all It forms part
4. taxes federal of the
including the taxes corporate tax
surcharge
includi and not to be
ng the considered
20
in one slip.
surchar separately.
ge
1 Secondary & 12 0 no yes yes yes 1% 1% all federal all It is included
5. Higher education taxes federal in Corporate
cess including the taxes Tax Paymentit
surcharge
includi forms part of
ng the the corporate
surchar tax and not to
ge be considered
separately.
1 Employee paid - 12 0 no yes yes yes 12% + gross salaries Deducted
6. Social security jointly 1.75% 12% Basi from Salary
contributions with + c and paid
emplo 1.75% salary online (For
yer's plus first time
socual dearne impemented
securi ss areas the
ty allowa employees'
contri nce contribution
ution and has been
retaini reduced to 1%
ng vide Govt of
allowa India Gazette
nce Notification
Extraordinary
No 711 dated
6/10/2016.
The
21
in one slip.
instructions
and Gazette
Notification
available at
link
http://esic.nic.i
n/backend/writ
ereaddata/file/
9f085e16fc29
2fb8f8a7ebf6b
be8f63b.pdf )
If there are any taxes or contributions, which the case study company would be required to pay, and which are not listed in the table above, please list them in the table below:
Tax Number of payments Can this tax be Can this tax be Statutory tax rate Tax Base Please provide details
and filings required paid and filed online? paid and filed (respective law, any
in one year (monthly = 12, jointly with special rules, etc.)
quarterly = 4, annual = 1). another tax?
Please include any final
payments or filings
that need to be made.
22
NEW QUESTIONS: Personal Income Tax (PIT)
1.1 In your national tax system, is there an obligation on the case study
company to deduct PIT from employee wages? No (Please go to Section C.2 Deductions and Depreciation)
1.2 Please specify the number of filings and payments of PIT that the NA
case study company must complete in a year (e.g. monthly =12,
quarterly = 4)?
1.2.a Please specify how the majority of companies similar to the case -Click to Select-
study company file PIT (electronically, by mail, in person at tax office)?
1.2.b Please specify how the majority of companies similar to the case -Click to Select-
study company pay PIT (electronically, by mail/cheque, at a bank, in
person at tax office)?
1.3 Is PIT filed and paid jointly with any of the taxes or mandatory -Click to Select-
contributions reported in the table above?
1.3a If yes, please specify which tax. NA
1.4 How much time out of the total hours spent to comply with labor NA
taxes (including mandatory contributions reported in section C.4) is
dedicated to the preparation, filing and payment of PIT?
C.2 Deductions and Depreciation

2.1 Deduction of Taxes
In the table below please complete the information on deductibility of each tax when calculating corporate profit subject to tax,
taking into account the detailed assumptions of the case study described in section A.
Note: use "Not Applicable" for taxes that shall not be deductible by nature (e.g . corporate income tax, VAT, etc.).
Tax Deductible in % deductible

2016?
1. Vehicle tax (pollution tax) Yes 100%
2. Tax on insurance contracts Yes 100%
3. Tax on interest Not Applicable NA
4. Dividend tax No 0
5. Fuel tax Not Applicable NA
6. Property tax Yes 100%
7. Social security contributions Yes 100%
8. Employee's state insurance contribution Yes 100%
9. Corporate income tax No 0
10. Central Sales Tax Yes 100%
11. State VAT Yes 100% if the
credit if not
taken
separately
12. CENVAT (Excise Duty) Yes 100%
13. Income surcharge No
14. Education cess No
15. Secondary & Higher education cess No
16. Employee paid - Social security contributions No
2.2 Tax-Deductible Expenses

23
Please indicate if the following expenses are deductible in computing corporate profit subject to tax and note the total amount of
deductions allowed per year.
Kindly provide information for calendar year 2016 based on the law in your country.
Deductible in
% deductible
2016?
Start-up expenses: Official and attorney fees paid at the time of incorporation. If the Yes 20%
company can deduct these expenses only in the first year of operation, then input zero as
this year’s deductible expense. If the tax law allows companies to assign these expenses to
future years, please allow the maximum possible deduction this year (the second year of
operation). Please note that these expenses are not capitalized and they are different
from the business development expenses indicated in section 2.4.
Advertising expenses: The company engages the services of an advertising company to Yes 100%
promote its ceramic products at an annual cost of 1% of its sales revenue.
Leasing expenses: The company leases a new truck for 3 years. This truck is used for Yes 100%
business purposes, covers on average 80,000 km (50,000 miles) a year and weighs 15,300
kilos (34,000 pounds) when loaded.
Medical insurance premium for employees: The company pays part of the medical Yes 100%
insurance premium for its employees. This medical insurance is an extra benefit for the
workers and goes beyond what may be mandated by law. It amounts to 1% of total
salaries.
Building insurance premium: The company insures the building against fire and theft at a Yes 100%
cost of 1% of the building’s value.
Business travel expenses: The company managers travel for business purposes (e.g., to Yes 100%
meet customers and suppliers).
Accountancy fees: The company hires an accountancy firm to manage its books. Yes 100%
Legal fees: The company hires a law firm for writing contracts with its suppliers and Yes 100%
customers and for other legal services.
Machinery repair expenses: The company has to repair some of its machinery. These Yes 100%
repairs do not add value to the machinery. The cost of the repairs is NOT capitalized in the
company’s books.
Patent royalties: The company pays royalties to another domestic company for a Yes 100%
patented industrial process that the company uses in its operations.
Owner’s expenses: These are expenses made by the owner who is also a manager: 60% Yes 80%
are expenses on business travel, 20% are expenses on entertaining customers (e.g., meal
with customers) and 20% are purely private expenses.
Loss carry forward: The company made tax losses in the first year of operations (2% of Yes 100%
capital). If these tax losses can be brought forward to the year of assessment, please use
the maximum losses that can be utilized in this financial year.
2.3 General Provisions

Please indicate if the following general provisions are deductible in computing corporate profit subject to tax and note the total
amount of deductions allowed per year.
Kindly provide information for calendar year 2016 based on the law in your country.
Deductible in
% deductible
2016?
Bad debt: Assume that TaxPayerCo estimates 10% of its account receivables will not be No 0
collected. These 10% of account receivables are overdue for at least 6 months and are not
guaranteed debt. The company knows the actual debtor accounts which will probably not
be paid and sets aside this provision.
Pension contribution: The company puts aside every year 1% of total paid wages in an No 0
internal pension fund for its employees. This is a provision, not an actual expense. No
24
Deductible in
% deductible
2016?
funds leave the company.
Machinery expenses: The company puts aside every year 1% of the net value of No 0
machinery to pay for future machinery repairs. This is a provision, not an actual expense.
No funds leave the company.
2.4 Annual Depreciation of Fixed Assets

Please carefully read the assumptions indicated in the table below and provide the tax depreciation rate and method for calendar
year 2016 for each type of asset.
Tax Depreciation method in Please specify if accelerated

depreciation 2016 depreciation or any other
rate in 2016 special rules apply
Land: On January 1, 2015, the company began 0% -Click to Select-
operations owning 2 plots of land. Each plot has an
area of 557.4 square meters (6,000 square feet). In
early January 2016, plot number 2 is sold.
Building: The building where production and storage 10%
take place, located on land plot 1, was originally 929 Declining balance method
square meters (10,000 square feet). In 2016 the
building was expanded with half the proceeds from
the sale of land plot 2.
If the building expansion (the new part added to the 10%
building) would be depreciated at a different rate, Declining balance method
please specify the rate.
Machinery: Light machinery for tax purposes. 15%
Declining balance method
Truck: The truck is used to ship products to customers 15%
and is classified as a nonluxury, medium-size unit. This Declining balance method
truck covers on average 80,000 km (50,000 miles) a
year and weighs 15,300 kilos (34,000 pounds) when
loaded.
Computers: The company has 10 computers. 60%
Declining balance method
Office equipment: Includes standard office tables, 10%
chairs, one copier, one fax machine, one scanner and Declining balance method
10 phones.
Business development expenses: These are expenses - -Click to Select- The business related Research
that the company incurred when starting operations and Development expenses are
and which were capitalized (e.g., research and deductible as per Section 35 of
development expenses). Please note that these are the Income Tax Act, 1961. This
different from the start-up expenses indicated in should be counted in section 2.2
section 2.2. Tax-Deductible expenses.
C.3 Labor Taxes and Mandatory Contributions

Please use the following assumptions when answering the questions below:
 The company has 60 employees: 4 managers, 8 assistants and 48 workers.

 All the employees were hired on the same day: January 1, 2015. No employee has left the company and no new employee
has joined the company since January 1, 2015.
25
 All employees at the same level earn the same wage as others at their level.
 All employees are nationals, male and married with 2 pre-teen children and have no other significant source of income.
 Each employee is a single wage earner (spouse has no income).
 Please provide calculations per employee.
 For each category of employee, please include all mandatory contributions and taxes paid on the salaries, or on the number of
employees. These taxes may be referred to by different terms in your country.
 Please differentiate between taxes that are a cost to the employer, those that are withheld by the employer on behalf of the
employee and those paid directly by the employee.
 In the tax base column, please provide actual tax base used in calculations, considering minimum and maximum amount for the
contribution, deductibles, etc. For example, if the gross salary is used as the tax base, insert the amount of gross salary. If the
contribution is capped at the maximum amount as envisaged in legislation, please provide this ceiling as the tax base. If the
fixed contribution is levied per employee, the tax base shall be 1 (as calculations are done per employee) and the tax rate shall
be the amount of fixed fee.
3.3 Manager
Annual salary of each manager: INR 180,800.69
Please note that one of the managers is also an owner. If different taxation applies, please clarify in comments.
Labor tax or contribution Tax base Tax rate Tax amount

Social security contribution – paid 1. Salary as per the 1. PF contribution - 12% 1. PF - INR 6509
by employer Employees Provident Fund of basic salary plus dearness 2. EDLI - INR 900
and Miscellaneous Provisions allowance 3. PF admin charges - INR
Act, 1952 is basic salary plus 2. EDLI - 0.5% applicable on 461
dearness allowance and basic salary of INR 15000 per 4. EDLI admin charges - INR
retaining allowance. In the month 18
case study, the annual salary 3. PF admin charges - 0.85%
is INR 180,800.69 and basic of basic salary plus dearness 5. EMPLOYERS
salary component is allowance CONTRIBUTION- INR 8588.00
generally 30% of the gross 4. EDLI admin charges- 0.01% per employee.
salary component in India applicable on basic salary of
and hence, PF is likely to be INR 15000 per month
applicable on INR 54240. 5. ESI Employers'
Contribution @4.75%
2. Wages as per the ESI Act
are defined in Sec 2(22) of
the ESI Act
Social security contribution – 1. Salary as per the 1. Employee's PF 1. PF contribution - INR
withheld by employer Employees Provident Fund contribution - 12% 6509
and Miscellaneous Provisions 2. ESI Employees 2. ESIC EMPLOYEE'S
Act, 1952 is basic salary plus Contribution @1.75% CONTRIBUTION INR 3164.00
dearness allowance and per employee
retaining allowance. In the
case study, the annual salary
is INR 180,800.69 and basic
salary component is
generally 30% of the gross
salary component in India
and hence, PF is likely to be
applicable on INR 54240.
26
the ESI Act
Social security contribution – paid
by employee directly
Health care contribution – paid by
employer
Health care contribution – withheld
by employer
employee directly
Unemployment insurance
contribution – paid by employer
contribution – withheld by employer
contribution – paid by employee
directly
Payroll tax – paid by employer
Payroll tax – withheld by employer The Payroll Tax is called as 1) For the gross salary less Salary of the Manager is INR
Profession Tax(PT). PT is than or equal to INR 7500/-, 15067/- per month. Hence
levied on employees in the no PT is applicable. 2) For the PT is applicable at INR 2500/-
slab rates based on their salary slab in between INR per annum.
salary. The employer 7501/- to INR 10000/-,
withholds the PT applicable applicable PT is INR 175/- per
from the salary of the mounth i.e. INR 2100/- per
employee and pay the same annum. 3) For the salary
to the Government. above INR 10000/-, PT at
INR 2500/- per annum is
applicable. The same is to be
collected by the employer at
INR 200/- per month for
eleven monthsof the
Financial Year and INR 300/-
is to be collected from the
salary for the month of
February paid in the month
of March. The above Tax
Rates are mentioned in the
Schedule I of the
The Maharashtra State Tax
on Professions, Trades,
Callings and Employments
Act, 1975. For female
employees, no PT is leviable
for the Salary up to INR
10000/-. Other slabs are
same for both male and
female employees.
Payroll tax – paid by employee
directly
Fringe benefit tax – paid by
employer
Fringe benefit tax – withheld by
employer
27
employee directly
Personal income tax – paid by
employer
Personal income tax – withheld by Not applicable as the salary
employer of the employee is below the
taxable limit of INR 250000
Personal income tax – paid by Not applicable as the

employee directly salary of the employee is
below the taxable limit of
INR 250000
If there are any other labor taxes and/or contributions, please provide details below:
Name of tax or contribution Tax base Tax rate Tax amount
Comments (if any):
3.4 Assistant
Annual salary of each assistant: INR 100,444.83

Social security contribution – paid 1. Salary as per the 1. PF contribution - 12% of 1. PF - INR 3616
by employer Employees Provident Fund basic salary plus dearness 2. EDLI - INR 900
dearness allowance and basic salary of INR 15000 per 4. EDLI admin charges - INR
retaining allowance. In the month 18
case study, the annual salary 3. PF admin charges - 0.85% 5. ESI EMPLOYER'S
is INR 100,444.83 and basic of basic salary plus dearness CONTRIBUTION - INR 4772
salary component is allowance
generally 30% of the gross 4. EDLI admin charges- 0.01%
salary component in India applicable on basic salary of
and hence, PF is likely to be INR 15000 per month
2. Wages as per the ESI Act Contribution @4.75%
the ESI Act
Social security contribution – 1. Salary as per the 1. PF Contribution - 12% 1. PF Contribution- INR
withheld by employer Employees Provident Fund 2. ESI Employees 3616
and Miscellaneous Provisions Contribution @1.75% 2. ESI EMPLOYEES
Act, 1952 is basic salary plus CONTRIBUTION - INR 1758
dearness allowance and
28
salary component is
salary component and
hence, PF is likely to be
the ESI Act
employer
by employer
employee directly
directly
Payroll tax – withheld by employer The Payroll Tax is called as 1) For the gross salary less Salary of the Assistant is
Profession Tax(PT). PT is than or equal to INR 7500/-, INR 8370/- per month.
levied on employees in the no PT is applicable. Hence PT is applicable at INR
slab rates based on their 2) For the salary slab in 2100/- per annum.
salary. The employer between INR 7501/- to INR
withholds the PT applicable 10000/-, applicable PT is INR
from the salary of the 175/- per mounth i.e. INR
employee and pay the same 2100/- per annum.
to the Government. 3) For the salary above INR
10000/-, PT at INR 2500/-
per annum is applicable. The
same is to be collected by
the employer at INR 200/-
per month for eleven
monthsof the Financial Year
and INR 300/- is to be
collected from the salary for
the month of February paid
in the month of March. The
above Tax Rates are
mentioned in the Schedule I
of the
29
female employees.
directly
employer
employer
employee directly
employer
Personal income tax – withheld by Not applicable as the 0 0
employer salary of the employee is
INR 250000
Personal income tax – paid by Not applicable as the 0 0
INR 250000
If there are any other labor taxes and/or contributions, please provide the details below:
Comments (if any):
3.5 Worker
Annual salary of each worker: INR 80,355.86

Social security contribution – paid 1. Salary as per the 1. PF contribution - 12% 1. PF - INR 2893
by employer Employees Provident Fund of basic salary plus dearness 2. EDLI - INR 900
dearness allowance and flat basic salary of INR 15000 4. EDLI admin charges - INR
retaining allowance. In the per month 18
case study, the annual salary 3. PF admin charges - 0.85% 5. ESI EMPLOYER'S
is INR 80,355.86 and basic of basic salary plus dearness CONTRIBUTION -4772.00
salary component is allowance PER EMPLOYEE
generally 30% of the gross 4. EDLI admin charges- 0.01%
salary component in India applicable on flat basic salary
and hence, PF is likely to be of INR 15000 per month
30
2. Wages as per the ESI Act Contribution @4.75%
the ESI Act
Social security contribution – 1. Salary as per the 1. PF Contribution -12% 1. PF Contribution - INR
withheld by employer Employees Provident Fund 2. ESI Employees 2983
and Miscellaneous Provisions Contribution @1.75% 2. ESI EMPLOYEES
Act, 1952 is basic salary plus CONTRIBUTION - INR 1758
dearness allowance and
salary component is
salary component in India
and hence, PF is likely to be
2. Wages as per the ESI
Act are defined in Sec 2(22)
of the ESI Act
employer
by employer
employee directly
directly
Payroll tax – withheld by employer The Payroll Tax is called as 1) For the gross salary less Salary of the Worker is
Profession Tax(PT). PT is than or equal to INR 7500/-, INR 6696/- per month and
levied on employees in the no PT is applicable. hence no PT is payable by
slab rates based on their 2) For the salary slab in the worker.
salary. The employer between INR. 7501/- to INR
withholds the PT applicable 10000/-, applicable PT is INR
from the salary of the 175/- per mounth i.e. INR
employee and pay the same 2100/- per annum.
to the 3) For the salary above INR
Government. 10000/-, PT at INR 2500/-
per annum is applicable. The
same is to be collected by
the employer at INR 200/-
per month for eleven
monthsof the Financial Year
and INR 300/- is to be
collected from the salary for
the month of February paid
31
in the month of March. The
above Tax Rates are
mentioned in the Schedule I
of the
female
employees.
directly
employer
employer
employee directly
employer
Personal income tax – withheld by Not applicable as the 0 0
employer salary of the employee is
INR 250000
Personal income tax – paid by Not applicable as the 0 0
INR 250000
If there are any other labor taxes and/or contributions, please provide the details below:
Comments (if any):
3.6 Please indicate which taxes or contributions paid by employer are filed and paid jointly with those withheld on behalf of
employees: Social Security Contributions and State Insurance Contribution.
3.7 Please indicate if any taxes or contributions cannot be paid at the moment of filing (i.e. there is a mandatory waiting period
between the moment of filing the return and paying the tax liability). No there is no such taxes/contributions.
32
C.4 Time to Prepare, File and Pay 3 Major Taxes
4.1 Was the total time required to prepare, file and pay profit tax, labor tax and mandatory contributions, or consumption taxes
different 5 years ago?
Yes
If yes, was the process to comply with these 3 major taxes faster or slower? Please explain:
Profit taxes
Further, all the companies, similar in size with the case study assumptions, use advanced accounting software such as Tally or SAP
for making accounts which helps them to prepare data in much faster manner and provides tax compatible reports. Additionally, in
India there is no requirement to prepare separate accounts for tax purpose.
Labor Taxes and Mandatory contributions
Now, all the payments are required to be made mandatorily online. This has resulted in reduction of time required for undertaking
the labour tax compliances. Further, the inclusion of private banks in the list of eligible banks for making online EPF and ESI payment
has widened the base of users availing online services.
Consumption taxes
Earlier the process was slower as compared to nowadays process. SAP based new automation System is adopted by the
Maharashtra Sales Tax Department from May, 2016. Now the process related to Mumbai VAT has become faster and is totally
online. Infrastructure of the automation system and Bandwidth has increased. Because of the new return filing process for VAT
(which is invoice based), return preparation time and return filing time reduced significantly. Further, the alternative avenues of
GRAS and SBI e-Pay, additional avenues of e-Payment has added to the fast process of payment and filing of taxes.
Please update the following sections for calendar year 2016 (January 1, 2016–December 31, 2016), taking into account the detailed
case study assumptions about the company TaxpayerCo. (see section A). The information on compliance time should include all time
spent calculating the tax liability for inclusion in the tax returns, except where accounting records are acceptable for tax purposes.
However, if special or additional accounting records or books are maintained for tax purposes, the time required for this should be
included.
The information you provide on compliance time will directly affect the time indicator. We would greatly appreciate if you would
take the time to break down the compliance time among the different tax compliance activities in the cells below to assist our
analysis.
4.2 Compliance Time for Profit Taxes
4.2.1 Is last year’s information provided in the tables below for preparation, filing and payment of profit taxes accurate and up to
date for 2016?
Yes.
No. If no, please update the tables below.
NA. Profit tax does not exist in my country.
PREPARATION — Profit taxes
Time last year: Updated time if Please briefly outline the main
Hours per year applicable: Hours per steps and tasks for each time
(2015) year (2016) entry.
1. Data gathering from internal sources (for 12 3 The data gathering from
example, accounting records) accounting records is a simple
process as it involves extraction of
data available in the accounting
software. Also, generally the
company uses basic accounting
software such as Tally for
preparing its accounting records
and therefore, extraction of
reports would not take longer
33
time.
Learning Curve: No change in
business and no major change in
turnover. Employees will fasten
the pace of doing work.
2. Additional analysis of accounting information 8 4 As per the case study the number
to highlight tax-sensitive items of adjustments are very minor and
shall not involve considerable
amount of time. (Calcualtion of
tax depreciation and few personal
expenditure related adjustments.)
3. Actual calculation of tax liability, including 8 3 The company does not have major
inputting of data into software/spreadsheets or adjustments and therefore,
hard-copy records computation of tax liability would
not take more hours.
4. Time spent maintaining/updating accounting 0 In the case study, the change
systems for changes in tax rates and rules in tax rate is only in relation to
dividend distribution tax and
provident fund contribution which
are not fed in the accounting
system. Therefore, the
TaxPayerCo. is not required to
update the accounting system and
the time extimate shall remain
0.
5. Preparation and maintenance of mandatory 0 Under the Indian Income Tax Act,
tax records if required (see section A for maintenance of tax records is not
definition of mandatory tax records) mandatory. Hence, the
TaxPayerCo. is not required to
maintain the separate tax records
in India.
6. Other activities undertaken for preparation of
profit taxes in your country (please specify)
Total preparation time for profit taxes 28 10 Reasons for reduction in time
explained at the appropriate
places
FILING — Profit taxes
(2015) year (2016) entry.
7. Completion of tax return forms 6 3 ITR-6 (excel utility of the income
tax return) is required to be filed
by the Taxpayer Co. As the case
study does not require major
adjustments to be made, the time
required to complete the tax
34
return form would invlove filling
up the details readily available
from the balance sheet and profit
and loss account and would
therefore would take less time.
8. Time spent submitting forms to tax authority, 1 0.5 The tax return form filled by the
which may include time for electronic filing, TaxPAyer Co. is validated by the
waiting time at tax authority, etc. excel utility and a .xml version file
is generated which needs to be
mandatorily uploaded online on
the Income tax portal by the
corporate taxpayer. Therefore,
the time estimated for uploading
the tax return form on the online
portal is estimated to be minimal.
9. Other activities undertaken for filing of profit
taxes in your country (please specify)
Total filing time for profit taxes 7 3.5 Reasons for reduction in time
places
PAYMENT — Profit taxes
(2015) year (2016) entry.
10. Calculations of tax payments required, 3 0 With the caluculation of tax
including if necessary the extraction of data liability, the details related to tax
from accounting records payment would automatically be
available to the company. This
exercise need not be done again.
11. Analysis of forecast data and associated 5 2 For computation of advance tax
calculations if advance payments are required liability, the Taxpayer Co.would be
(for example, quarterly installment payments required to make minor
based on estimates of expected tax liability) adjustments (i.e. related to
depreciation) and therefore,
minimal time is estimated for this
exercise. Also, for advance tax
payment is required to be made
online and there is no
requirement to file any return
with the tax authorities. It is
generally computed on the basis
of estimates and at times, the
company makes ad-hoc payment
based on average tax payment
trend in earlier years.
12. Time to make the necessary tax payments, 2 0.5 Alll the payments are required to
either online or at the tax authority (including be mandatorily paid and filed
time for waiting in line and travel if necessary) online. There is no requirement of
manual interaction and no time
involved for waiting in line.
35
13. Other activities undertaken for payment of
profit taxes in your country (please specify)
Total payment time for profit taxes 10 2.5 Reasons for reduction in time
places
Total compliance time (preparation, filing and 45 15 Reasons for reduction in time
payment) for profit taxes explained at the appropriate
places
4.3 Compliance Time for Labor Taxes and Mandatory Contributions
Please note that according to the case study assumptions, TaxpayerCo. has 60 employees.
4.3.1 Is last year’s information provided in the tables below for preparation, filing and payment of labor taxes and mandatory
contributions accurate and up to date for 2016?
Yes.
NA. Labor taxes or contributions do not exist in my country.
PREPARATION — Labor taxes and mandatory contributions
(2015) year (2016) entry.
1. Data gathering from internal sources (for 24 6 1. Salary sheets are already
example, accounting records) prepared in the software and data
can be easily extracted from
software for computing labor
contribution. Also, generally the
company uses basis accounting
software such as Tally for
preparing its accounting records
and therefore, extraction of such
reports would not take longer
time.
2. For profession tax, the Taxpayer
Co. generaly have automated
excel sheets with macros inbuilt in
it to compute the profession tax
liability. For the casestudy
company, it would not take much
time for gathering data from the
salary sheets as all the employees
are based in Mumbai and the
salary slab is defined under the
Profession tax.
the pace of doing work. .
2. Additional analysis of accounting information 4 4 1. The Company would be
to highlight tax-sensitive items required to compute the salary on
which the contribution is required
to be made as per the PF Act.
36
2. No additional analysis is
required for the Profession
Tax.
3. Actual calculation of tax liability, including 16 10 1. The calculation of contribution
inputting of data into software/spreadsheets or would be similar to last year and
hard-copy records would not involve much time as
employee's salary and details
remain the same.
2. Only Profession Tax
calculation is taken in to
consideration. Once the
return is prepared, it gives
the tax liability. Since this is
already covered by Point No.
1 as discussed above, no
additional time is required.
4. Time spent maintaining/updating accounting NA NA
systems for changes in tax rates and rules
5. Preparation and maintenance of mandatory 4 3 Learning Curve: No change in
tax records if required (see section A for business and no major change in
definition of mandatory tax records) turnover. Employees will fasten
6. Other activities undertaken for preparation of
labor taxes and mandatory contributions in your
country (please specify)
Total preparation time for labor taxes and 48 23 Reasons for reduction in time
mandatory contributions explained at the appropriate
places
FILING — Labor taxes and mandatory contributions
(2015) year (2016) entry.
7. Completion of tax return forms 8 6 The salary sheets for feeding in
return is alaready available with
the company and would not
required major time to copy the
same in the return.
8. Time spent submitting forms to tax authority, 4 3
which may include time for electronic filing, 1. Return filing process under
waiting time at tax authority, etc. Profession Tax is end to end
online and hence waiting time at
tax authorities is redundant.
2. Learning Curve: No change in
37
9. Other activities undertaken for filing of labor
taxes and mandatory contributions in your
Total filing time for labor taxes and mandatory 12 9 Reasons for reduction in time
contributions explained at the appropriate
places
PAYMENT — Labor taxes and mandatory contributions
(2015) year (2016) entry.
10. Calculations of tax payments required, 25 2 Tax is already available in the
including if necessary the extraction of data salary sheet of employees or
from accounting records could be easily calculated (specific
percentage of salary).
the pace of doing work. Further,
Once return is prepared, tax
liability is determined. Hence
separate time is not required for
calculation of tax payment as it is
the part of the return preparation.
11. Analysis of forecast data and associated
calculations if advance payments are required
(for example, quarterly installment payments
based on estimates of expected tax liability)
12. Time to make the necessary tax payments, 6 0.5 All the payments are required to
either online or at the tax authority (including be made mandatorily online and
time for waiting in line and travel if necessary) hence, would reduce the time to
one hour spread over the entire
year. Also, no time for waiting in
line at tax authority and travel
time is required for tax payment.
13. Other activities undertaken for payment of
labor taxes and mandatory contributions in your
Total payment time for labor taxes and 31 2.5 Reasons for reduction in time
mandatory contributions explained at the appropriate
places
Total compliance time (preparation, filing and 91 34.5 Reasons for reduction in time
payment) for labor taxes and mandatory explained at the appropriate
contributions places
4.4 Compliance Time for Consumption Taxes
38
4.4.1 Is last year’s information provided in the tables below for preparation, filing and payment of VAT, sales tax and/or GST
accurate and up to date for 2016, considering that TaxpayerCo. has annual turnover of INR 84,373,656?
Yes.
NA. VAT/sales tax/GST do not exist in my country.
PREPARATION — VAT, sales tax and/or GST
(2015) year (2016) entry.
1. Data gathering from internal sources (for 12 6 Return is made invoiced based.
example, accounting records) Most of the fields of the return
are getting auto populated from
the Sales and Purchase Anx.
Dealer is not required to make
summary of the figures for filing
of the returns. Hence time is
significantly reduced.
2. Additional analysis of accounting information 5 0 Not applicable. Data for filing and
to highlight tax-sensitive items payment is gathered from the
books of accounts kept by the
dealer in regular course of
business.
3. Actual calculation of tax liability, including 0 0 No change suggested
inputting of data into software/spreadsheets or
hard-copy records
4. Time spent maintaining/updating accounting 4 4 Updating the tax rate in the
systems for changes in tax rates and rules accounting software does not
takes time as it involves just
creating a ledger account in Tally
with the new VAT rate.
5. Preparation and maintenance of mandatory 24 0 Dealer extracts data from the
tax records if required (see section A for regular books of accounts he is
definition of mandatory tax records) required to keep for the business
purpose. No additional books of
accounts are required for the
preparation of return. Pl also refer
the answer to the Question 5c of
the B.Reform update.
6. Other activities undertaken for preparation of 10 0 There are no other activities
VAT/sales tax/GST in your country (please remained to be performed after
specify) considering the above mentioned
fields.
Total preparation time for VAT/sales tax/GST 55 10 Reasons for reduction in time
places.
FILING — VAT, sales tax and/or GST
39
(2015) year (2016) entry.
7. Completion of tax return forms 12 1 i) Return is made invoice based.
Nearly 80% of the return fields are
auto populated from invoice
based Sales and Purchase Annx
which are part of the return
template itself. Returns under
MVAT and CST are prepared at
the same time from the same set
of Sales and Purchase Annx. The
dealer is not required to prepare
any separate set of books of
accounts or statements for the
purpose of preparation of returns.
The invoice data can be copy
pasted in to Sales/Purchase Annx
from these books of accounts.
Given above, the time required
for summarisation of data is
reduced to almost nil.
ii) Furhter, Billing Software is
provided by the Department free
of cost. It is available on the
website of the Department. If the
dealer generates invoices using
this software, then Sales and
Purchase Annx are auto
generated. This exercise reduces
the time required for preparation
of return. Refer Trade Circular 22T
of 2016 - goo.gl/WXPqLn .
8. Time spent submitting forms to tax authority, 4 0.5 Return filing process is end to end
which may include time for electronic filing, online and hence waiting time at
waiting time at tax authority, etc. tax authority is redundent.
9. Other activities undertaken for filing of 18 0 There are no other activities
VAT/sales tax/GST in your country (please undertaken for filing of returns
specify)
Total filing time for VAT/sales tax/GST 34 1.50 Reasons for reduction in time
places.
PAYMENT — VAT, sales tax and/or GST
(2015) year (2016) entry.
10. Calculations of tax payments required, 12 0 This requires to be clubbed with
including if necessary the extraction of data the return preparation. When
from accounting records return is prepared, tax liability is
calculated automatically. No need
to extract data separately for
calculation of tax.
11. Analysis of forecast data and associated NA NA
calculations if advance payments are required
40
(for example, quarterly installment payments
based on estimates of expected tax liability)
12. Time to make the necessary tax payments, 4 0.5 i) Payment of VAT is made
either online or at the tax authority office mandatorily online. It is provided
(including time for waiting in line and travel if through 25 Nationalised Banks.
necessary) Additional facility of e-Payment
through SBI e-Pay and
Government Revenue Accounting
System (GRAS) made available to
the Taxpayers (pl refer Trade
Circular 32T of 2016). SBI e-Pay is
connected with the Nationalised
Banks, Private Banks and Co-
operative Banks.
ii. All the payments are required
to be mandatorily paid and filed
online. There is no requirement of
manual interaction and no time
involved for waiting in line.
13. Other activities undertaken for payment of 0 0
VAT/sales tax/GST in your country (please
specify)
Total payment time for VAT/sales tax/GST 16 0.5 Reasons for reduction in time
places.
Total compliance time (preparation, filing and 105 12 Reasons for reduction in time
payment) for VAT/sales tax/GST explained at the appropriate
places.
4.4.2 Is TaxpayerCo. required to submit invoices or schedule of invoices to support the figures reported in the VAT/sales tax/GST
returns? No
4.4.3 If yes, how much time (in hours) does it take TaxpayerCo. to collate and submit these invoices or schedule of invoices? Please
also indicate UNDER WHICH STEPS in (1) preparation, (2) filing or (3) payment you have included any required time for collating
and submitting these invoices/schedule of invoices. Answer to the Question 4.4.2 is "No", because the Department takes invoice
based Sales and Purchase Annx in the process of return filing. It is not additional requirement mandated by the department. Infact,
the Department has gone more proactive in the service providing to the taxpayer in the sense that the system auto populates 80%
of the fileds of the return. The dealer is only required to fill only 20% of the return fields. As mentioned in the answer to Question
No. 4c of B.Reform Updates this has significantly reduced preparation, filing and payment time. This is already explained in answer
to the Question 4c of B.Reform Updates.
C.5 Postfiling procedures

In this section, please consider the same case study company TaxpayerCo. as described in section A. “Case Study
Assumptions”. We present below additional specific assumptions that are important for answering the postfiling
questions.
5.1. VAT Cash Refund
 Please consider the following scenario for a VAT refund: In June 2016, TaxpayerCo. makes a large capital purchase.
TaxpayerCo. buys one additional machine for manufacturing pots. The value of the machine is: INR 5,223,131.11.
 The machine is manufactured domestically. It is not imported.
41
 The additional capital purchase is only considered for the postfiling process.
 Assume management of TaxpayerCo. prefers to claim cash VAT refund instead of carrying forward excess input VAT if both
options are available.
 The seller of the machinery is registered for VAT.
 If carried forward, excess input VAT incurred in June will be fully recovered after four (4) consecutive months.
5.1.1 Please indicate whether any of the following applies Last year’s response: Updated response: Please explain:
to your country: calendar year 2015 calendar year 2016
(January 1, 2015 – (January 1, 2016 –
December 31, 2015) December 31,
2016)
There is no VAT or General Sales Tax. No No No change
Consumption taxes (e.g. Retail Sales Tax) are levied only at No No No change
the point of final sale (i.e. tax is not levied on the purchase
of the machine by TaxpayerCo, but is due on final sales by
TaxpayerCo to its customers).
The purchase of a machine for use in manufacturing is not No No The purchase
subject to VAT. invoice of the
machinery would
have VAT levied
on it and the
TaxpayerCo would
be required to pay
the same to the
seller of the
machinery.
VAT paid on the purchase of the machine is not No No The VAT paid on
recoverable. the machinery is
recoverable either
by way of refund
or credit. Also,
VAT paid on
purchase of
machinery can be
included in the
Capital Cost of the
machinery and
would then be
included (100%)
while computing
depreciation on
the machinery
There is no cash refund mechanism in place. No No There is option for
the dealer to
claim entire VAT
paid on the capital
goods as refund.
refer Section 50 of
the Maharashtra
Value Added Tax
Act, 2002
goo.gl/DrM8kc
VAT cash refunds are never applied in practice. No No No change
42
The law mandates the excess input VAT to be carried No No No change
forward for a specified period of time before a cash refund
can be requested.
Please indicate the mandatory carry forward period (e.g. 3 until end of the As stated here
months). FY to which
return relates
5.1.2 Please indicate whether the following applies to Last year’s response: Updated response: Please explain:
your country: calendar year 2015 calendar year 2016
(January 1, 2015 – (January 1, 2016 –
December 31, 2015) December 31, 2016)
Taking into consideration the parameters of the case study CENVAT: restricted to VAT: VAT cash VAT cash refund
company, are VAT cash refunds restricted to specific type international traders refunds are not is not restricted
of taxpayers or to specific conditions e.g., only exporters, and others restricted to specific to specific type of
company must be less than two years old? Please state the VAT: carry forward type of taxpayers or taxpayers. Any
reasons that apply. until the end of the specific conditions. registered dealer
fiscal year (March) who is entitled to
refund as per the
provisions of the
law can apply for
the refund.
Dealer which has
more input VAT
than that of
output VAT may
claim refund
irrespective of
whether he is a
exporter or of any
other type. refer
Section 50 and
Section 51 of the
Maharashtra
Value Added Act,
2002
goo.gl/mYOfXa
5.1.3 For calendar year 2015, the following VAT rate was used for the table below: 12.5% for VAT and 12.5% for CENVAT%
If the VAT rate(s) is different for calendar year 2016, please provide details of the VAT rate(s) you used for the table below (specify
the rate and explain why you used that rate): VAT rate is increased to 13.5% from Sep-2017.
Input VAT will exceed Output VAT in June 2016 as shown in the table below:
Output VAT Input VAT
Sales =
VAT rate * 7,031,138.04
INR 7,031,138.04
Capital purchase =
VAT rate * 5,223,131.11
INR 5,223,131.11
Raw material expenses =
VAT rate * 5,859,281.7
INR 5,859,281.7
VAT refund VAT rate * ((5,223,131.11 + 5,859,281.7) - 7,031,138.04)

43
 If TaxpayerCo. must first carry forward the excess credit for a period of 4 months or more, please answer the next
questions on VAT refunds assuming hypothetically that after the end of the mandatory period to carry forward the excess
input VAT, an amount of excess credit remains to be recovered by TaxpayerCo.
 If TaxpayerCo. must first carry forward the excess credit for a specified period of time that is less than 4 months, please
answer the next questions on VAT refunds considering that TaxpayerCo. will request a refund for the amount of excess
credit that remains to be recovered.
 If there is no VAT or General Sales Tax in your country, please proceed to section 5.2.
 If VAT refunds are not applicable to the VAT case study scenario described above, please proceed to section 5.2.
General Questions on VAT refunds

Please provide answers in respect to calendar year 2016 (January 1, 2016 – December 31, 2016). If the answers are the same as last
year’s response (calendar year 2015), please insert ‘no change’ in respect to calendar year 2016 or chose the same answer as last
year's response.
Last year’s response: Updated response: calendar

calendar year 2015 year 2016 (January 1, 2016 –
(January 1, 2015 – December 31, 2016)
December 31, 2015)
5.1.4 Does the law in your country prescribe a time limit (from Not Applicable Yes
the moment of submission of refund claim) for the tax authority
to pay a VAT refund claim?
5.1.4a If yes, please provide the time limit. Not Applicable 1. Refund is governed by Sec
51 of the MVAT Act, 2002 -
goo.gl/mYOfXa
and Rule 60 of MVAT Rules-
goo.gl/ThZKeJ .
2. There is a Special Refund
Scheme for Exporters. They are
required to enroll as exporter
and also require to fulfill some
criterion. 95% of the refund is
granted without audit within
10 days from the date of
application of refund. Refund is
also granted against Bank
Guarantee (B. G.) (Sec 51(3)(b)
of the MVAT Act, 2002) within
20 days of the date of
application for the refund
without audit. goo.gl/ThZKeJ
3. There is Fast Track Refund
Scheme mostly for the reputed
manufacturers. There are
certain conditions to be
fulfilled to get enrolled for this
scheme. Refund is granted
within 10 days from the date of
application for refund without
any Audit or B.G. For all these
schemes, pl refer Internal
Circular 13A of 2010 -
goo.gl/PEKuci and Trade
44
December 31, 2015)
Circular 22T of 2010 -
goo.gl/S2CkUO.
4. As per Trade Circular 5T of
2016 - goo.gl/2IVuyI, eligible
refunds of the dealer shall be
granted:
i) within 45 days from the due
date of filing of Audit Report (if
the dealer is eligible to file
Audit Report) and refund
application is filed before due
date of filing Audit Report.
ii) within 45 days from the due
date for filing of Audit Report
in cases where dealer is not
eligible to file Audit Report.
iii) within 45 days from the due
date for filing of refund
application in F 501, in cases
where dealer is eligible to file
Audit Report and refund
application is filed after due
date for filing of Audit Report.
5.1.4b Please provide legal basis (name of legislation and Not Applicable 1. Refund is governed by Sec
article): 51 of the MVAT Act, 2002 -
goo.gl/mYOfXa
and Rule 60 of MVAT Rules-
goo.gl/ThZKeJ
2. Special Refund Scheme for
Exporters. Refund against
Guarantee (B. G.) (Sec 51(3)(b)
of the MVAT Act, 2002),
3. Fast Track Refund Scheme
mostly for the reputed
manufacturers. There are
certain conditions to be
fulfilled to get enrolled for this
scheme. For all these schemes,
pl refer Internal Circular 13A of
2010 - goo.gl/PEKuci and Trade
goo.gl/S2CkUO.
4. Trade Circular 5T of 2016 -
goo.gl/WXPqL provides
timelimit for granting eligible
refunds of the dealer.
5.1.4c If yes to 5.1.4, please indicate the extent to which the Not Applicable Always
time limit is applied in practice.
5.1.5 Does the tax authority in your country impose a minimum -Click to Select- No
amount for a VAT refund claim in order for taxpayers to be
eligible for a VAT refund?
5.1.5a If yes to 5.1.5, please specify the minimum amount Not Applicable
45
December 31, 2015)
needed for a claim to be made.
Time to comply with requesting a VAT cash refund
For questions 5.1.7 – 5.1.15 you should only include time that is in addition to the time captured in the main questionnaire for
preparing and filing the standard VAT return. Please answer questions 5.1.7 – 5.1.15 based on the VAT case scenario described
above.
year’s response (calendar year 2015), please insert ‘no change’ in respect to calendar year 2016 or chose the same answer as last
year's response.
Last year’s response: Updated response:

calendar year 2015 calendar year 2016
(January 1, 2015 – (January 1, 2016 –
5.1.7 Please explain in detail how TaxpayerCo. would request a Not Applicable As per Rule 60 of the MVAT
VAT refund (e.g. submit a specific VAT refund form, complete a Rules, 2005 , the dealer has
section of the standard VAT return, tick a box in the standard to apply for refund in
VAT return, etc.). prescribed form i.e. F 501
from the last date of the
Financial Year to which the
refund relates. The process
of submission of refund
application is online.
goo.gl/ThZKeJ
5.1.8 Please estimate the time in business hours spent by Not Applicable As the data is the same
TaxpayerCo. on gathering VAT information from internal used for filing the VAT
sources, including time spent on any additional analysis of return, there is no time
accounting information and calculating the VAT refund amount. involved for gathering VAT
information from internal
resources.
5.1.9 Please estimate the time in business hours spent by Not Applicable As the process is
TaxpayerCo. on preparing the VAT refund claim. mandatorily online and as
the data is the same as used
for filing the VAT return,
there is no additional time
involved. Refer link for
submitting online
application - goo.gl/sxAFWK
and link for instructions to
apply for online refund -
goo.gl/ET87ud
5.1.10 List all documents that TaxpayerCo. would need to Not Applicable Along with the F 501, dealer
prepare and submit to the tax authority to substantiate the has to upload Anx A-which
claim for a VAT refund. is invoice wise purchase
details of the applicant
dealer, Anx C-which is
invoice wise details of the
CST Declarations not
received by the applicant
46
(January 1, 2015 – (January 1, 2016 –
dealer and Anx D-which is
the invoice wise details of
the CST Declarations
received by the applicant
dealer. These Anx are
required to be uploaded
online along with F 501
itself.
5.1.11 Please estimate the time in business hours spent on Not Applicable The time required for
preparing all additional documents that are needed to preparing Annexures-A, B &
substantiate the claim for the VAT refund. C is 0.5 hours. Refer link for
submitting online
Please include all documents that are routinely requested by the application - goo.gl/sxAFWK
tax office after submission of the claim, but before audit, if any. and link for instructions to
apply for online refund -
goo.gl/ET87ud
5.1.12 Are both (i) the standard VAT return and (ii) the claim for -Click to Select- Separately
the VAT refund (along with the additional documents) submitted
at the same time?
5.1.12a If separately, please explain how does the majority of -Click to Select- Electronically
companies – such as the one considered in the case study –
submit these documents?
5.1.12b If separately, please estimate the time in business hours F 501 as it is mandatorily
TaxpayerCo. would spend in submitting the VAT refund claim online. Time required 0.5
and all additional documents. hours. (5 minutes is
required to submit the VAT
If in person at the tax office, please include waiting time to refund form)
submit all necessary information.
Refer link for submitting
online application -
goo.gl/sxAFWK and link for
instructions to apply for
online refund -
goo.gl/ET87ud
5.1.13 Would TaxpayerCo. be required to make representation Not Applicable No
in person at the tax office after submitting the claim?
5.1.13a If yes and this time estimate is not included in 5.1.12b, Not Applicable Not Applicable
please estimate the time in business hours spent at the tax
office including waiting in line and travel if necessary.
5.1.14 Please describe any other mandatory activities/tasks Not Applicable No such activity is
associated with the VAT refund. required.
5.1.15 Please estimate time in business hours spent on each of Not Applicable Not Applicable
them (e.g. obtaining internal or external advice).
Time to obtain a VAT cash refund

Please answer questions 5.1.15 – 5.1.28 based on the VAT case scenario described above.
year’s responses (calendar year 2015), please insert ‘no change’ in respect to calendar year 2016 or chose the same answer as last
year's response.
47
Please consider the following definition of tax audit: an examination of taxpayer’s financial records and dealings by the tax authority
to verify whether such taxpayer has correctly assessed and reported their tax liability and fulfilled other obligations. We are only
considering tax audits that require interactions between TaxpayerCo. and the Tax Authority and which are often more detailed and
extensive than other types of examination, such as general desk checks, compliance visits/reviews or document matching programs.

(January 1, 2015 – (January 1, 2016 –
5.1.15 In the absence of the VAT cash refund case scenario, how -Click to Select- Once in 3 - 5 years
often would you expect the case study company to be subject to
a VAT audit?
5.1.16 What percentage of companies with a similar case of -Click to Select- 75% - 100%
excess input VAT resulting from a large capital purchase would
be audited by the tax authority as a result of requesting a cash
VAT refund?
Please only consider tax audits that require interactions between

TaxpayerCo. and the Tax Authority.
5.1.17 Based on your experience, what is the most common type Not Applicable Full audit
of audit that the scenario described above would trigger?
5.1.17a Please explain: 1. As per Trade Circular 5T
of 2016 (goo.gl/WXPqL),
eligible refunds of the
dealer shall be granted
i) within 45 days from the
due date of filing of Audit
Report (if the dealer is
eligible to file Audit Report)
and refund application is
filed before due date of
filing Audit Report.
ii) within 45 days from the
due date for filing of Audit
Report in cases where
dealer is not eligible to file
Audit Report.
iii) within 45 days from the
due date for filing of refund
application in F 501, in
cases where dealer is
eligible to file Audit Report
and refund application is
filed after due date for filing
of Audit Report. In this
manner 90% of the system
verified refund is given to
the dealer. Dealer is not
called for the verification of
this 90% claim as system
verification is done. Balance
refund is granted after
Refund Audit is conducted
(Refer Trade Circular 22T of
2010 - goo.gl/S2CkUO and
Trade Circular 5T of 2016 -
48
(January 1, 2015 – (January 1, 2016 –
goo.gl/2IVuyI).
2. Refund is granted as per
Section 51 of the MVAT Act,
2002 (goo.gl/mYOfXa). If
the Audit results are not
acceptable to the dealer,
Assessment Order is
passed. Time limit for
assessment is 4 years after
the end of the period to
which the year to which the
return is related as per
Section 23 of MVAT Act,
2002. As per provision of
2002, simple interest is
payable to the dealer from
the end of the period to
which the refund is related
to the date of passing of the
Refund Order or for a
period of 24 months
whichever is less. The
refund approved should be
actually paid to the dealer
within 90 days from the
date of grant of the refund.
Otherwise Department has
to pay interest on delayed
refund as per Section 53 of
the MVAT Act, 2002. Rate
of interest in both the cases
is 0.5% per month or part
thereof.
5.1.18 How would the most common type of audit indicated in Not Applicable Office audit (attending to an auditor’s office)
5.1.17 and applied to the given scenario be conducted in your
country?
If 50% or more cases would be audited by the tax authority, please respond to questions 5.1.19 - 5.1.27, if less than 50%
please respond to questions 5.1.28 - 5.1.30.
If in question 5.1.15, you responded that the company would be audited every year as a matter of course and even if the
VAT cash refund case scenario described above would not trigger an audit by the tax authority, please still provide answers
to questions 5.1.19– 5.1.27.
5.1.19 Please indicate the time (in calendar days) it takes the tax 1. As per Trade
authority to start an audit from the moment of submitting the Circular 5T of 2016 , 90% of
claim for a VAT refund and all necessary documents to the tax the system verified refund
authority. is given to the dealer.
Dealer is not called for the
verification of this 90%
claim as system verification
49
(January 1, 2015 – (January 1, 2016 –
is done. Balance refund is
granted after Refund Audit
is conducted (Refer Trade
goo.gl/S2CkUO and Trade
goo.gl/2IVuyI).
2. Time limit for audit
is 4 years after the end of
the period to which the
year to which the return is
related as per Section 23 of
MVAT Act, 2002. Refund is
granted as per Section 51 of
the MVAT Act, 2002
(goo.gl/mYOfXa). If the
Audit results are not
acceptable to the dealer,
Assessment Order is
passed.
3. As per provision of
2002 (goo.gl/mYOfXa),
simple interest is payable to
the dealer from the end of
the period to which the
refund is related to the
date of passing of the
Refund Order or for a
period of 24 months
whichever is less. The
refund approved should be
actually paid to the dealer
within 90 days from the
date of grant of the refund.
Otherwise Department has
to pay interest on delayed
refund as per Section 53 of
the MVAT Act, 2002. Rate
of interest in both the cases
is 0.5% per month or part
thereof.
5.1.20 Please specify the time (in business hours) TaxpayerCo. Not Applicable All the details called for by
would spend in gathering information and preparing any the department are
additional documentation (information such as receipts, generally available and
financial statements, pay stubs) as required by the tax auditor. If maintained by the
various rounds of interactions occur between TaxpayerCo. and company. No additional
the auditor, please estimate the total time for all these time is required to gather
interactions. and prepare information
5.1.21 Please list the documents TaxpayerCo. would most Not Applicable a. Profit & loss Account and
typically have to prepare for an auditor. Balance-sheet
b.Sales Summary
50
(January 1, 2015 – (January 1, 2016 –
c.Purchase Summary
d.Details of claims on Sales
side.
e.Details of setoff
claimed.
5.1.22 Please explain how does the majority of companies – such Not Applicable In person, at the tax office
as the one considered in the case study – submit these
documents (electronically, by email, by mail, at the tax office, at
the taxpayer’s premises).
5.1.23 Please estimate the time (in business hours) TaxpayerCo. Not Applicable 3 hours
would spend in submitting the documents requested by the
auditor.
If in person, at the tax office, please estimate time in business

hours spent at the tax office including waiting time.
If in person and at the taxpayer’s premises, please put zero.

5.1.24 Please estimate the total time (in calendar days) from the Not Applicable 4 days
moment an audit starts until there are no further interactions
between TaxpayerCo. and the auditor (this estimate would
include the various rounds of interactions between TaxpayerCo.
and the auditor).
5.1.25 Please estimate the total time (in calendar weeks), it Not Applicable 1 week
takes for TaxpayerCo. to receive the final report from the auditor
from the moment TaxpayerCo. has submitted all relevant
information and documents, and there are no further
interactions between TaxpayerCo. and auditor.
5.1.26 Please indicate the time (in calendar weeks) it takes to The refund approved
receive the VAT refund from the moment the final audit report should be actually paid to
or decision is issued (assuming the decision is an approval of the the dealer within 90 days
VAT refund claim). from the date of grant of
the refund. Otherwise
Department has to pay
interest on delayed refund
as per Section 53 of the
MVAT Act, 2002. Rate of
interest is 0.5% per month
or part thereof.
5.1.27 How are the majority of VAT refunds released (online, at a Not Applicable Electronically
bank, by mail, at the tax office, other)?
If less than 50% cases would be audited by the tax authority, please respond to questions 5.1.26 – 5.1.28.
5.1.28 If the answer to 5.1.15 is less than 50% of cases, please Not Applicable Not Applicable
assume that an audit will not take place. In this case, please
indicate the time (in calendar days) it takes to receive the VAT
refund from the moment of submitting the claim for a VAT
refund and all necessary documents to the tax authority.
5.1.29 If the answer to 5.1.15 is less than 50% of cases, please Not Applicable Not Applicable
assume that an audit will not take place. In this case, please
indicate the time (in calendar days) it takes to receive the VAT
51
(January 1, 2015 – (January 1, 2016 –
refund from the moment of approving the claim for the VAT
refund by the tax authority.
5.1.30 How are the majority of VAT refunds released (online, at a Not Applicable Not applicable
bank, by mail, at the tax office, other)?
5.2 Corporate income tax (CIT) underpayment

Please answer the questions in this section based on the CIT error and underpayment scenario described below.
 Please consider the following scenario for corporate income tax: an error in the calculation of the income tax liability (e.g.
use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax
return and consequently an underpayment of corporate income tax.
 Please consider that TaxpayerCo. itself discovered the error and voluntarily notified the tax authority of the error in the
corporate income tax return (if it is possible in your country to notify the authorities).
 Please consider that the value of the underpaid income tax liability is 5% of the corporate income tax liability due.
 Please consider that TaxpayerCo. submits the corrected information after the deadline for submitting the annual tax return,
but within the tax assessment period, if applicable.
year's response.

December 31, 2015)
5.2.1. Can TaxpayerCo. voluntary notify the tax authority of an Yes Yes
unintentional CIT error of the type described in the assumptions
above?
If you answer Yes to 5.2.1, please provide answers to questions 5.2.1a – 5.2.4. If you answer No, please proceed to section 5.3
5.2.1a Please explain how TaxpayerCo. would notify the tax Electronically Electronically
authority?
5.2.1b Please list all documents TaxpayerCo. has to provide to Revised tax return Amended/revised tax
the tax authority to correct and substantiate the error in the return
income tax return.
5.2.1c Please estimate the time (in business hours) TaxpayerCo. 4 2
would spend gathering information and preparing the
documents required to notify the tax authority.
5.2.1d Please explain how does the majority of companies – such Electronically Electronically
as the one considered in the case study - submit these
documents.
5.2.1e Please estimate the time (in business hours) TaxpayerCo. 1 0.5 (mandatorily online for
would spend in submitting the documents. companies to file revised
return electronically)
5.2.1f Is the payment of the additional CIT liability and the -Click to Select- At the same time
submission of the amended return (along with the additional
52
December 31, 2015)
documents) done at the same time?
5.2.1g If separately, please estimate the time (in business hours) Not Applicable
TaxpayerCo. would spend in making the additional tax payment.
5.2.1h Please explain how that payment is processed Electronically Electronically

(electronically, through a bank, at the tax office)?
5.2.2 Please indicate whether or not TaxpayerCo. is allowed at -Click to Select- Yes
that stage to make additional payments.
5.2.3 If TaxpayerCo. is NOT allowed to make additional Not Applicable
payments at that stage, please explain how long does
TaxpayerCo. have to wait (in calendar days) until a tax
notice/reassessment is issued?
5.2.4. Please explain if this tax notice/reassessment is dependent The revision of return would
of an audit taking place. not trigger the audit.
5.3 Corporate income tax audit

Please provide answers based on the CIT case scenario described above.
year's response.
Please consider the following definition of tax audit: an examination of taxpayer’s financial records and dealings by the tax authority
to verify whether such taxpayer has correctly assessed and reported their tax liability and fulfilled other obligations. We are only
considering tax audits that require interactions between TaxpayerCo. and the Tax Authority and which are often more detailed and
extensive than other types of examination, such as general desk checks, compliance visits/reviews or document matching programs.

December 31, 2015)
5.3.1 In the absence of the CIT error, how often would you -Click to Select- Once in 5 years or more
expect the case study company to be subject to a corporate
income tax audit?
5.3.2. Based on your experience, what percentage of similar -Click to Select- 0% - 24%
cases of self-reporting a CIT error and underpayment of CIT
liability as described in the case study scenario above would
trigger an audit by the tax authority?
Please only consider audits which require interactions between

the TaxpayerCo. and the Tax Authority.
5.3.3 Based on your experience, what is the most common type Full Audit Limited scope audit
of audit that the scenario described above would trigger?
5.3.3a Please explain: Majority of cases similar to
Case Study - TaxpayerCo (small
company) are subject to
Limited Scope Audit. Few cases
are subject to Full Audit
5.3.4 How would the most common type of audit indicated in Office Audit Office audit (attending to an auditor’s office)
5.3.2 and applied to the case scenario described above would be
53
December 31, 2015)
conducted in your country?
If 50% or more of cases would be audited by the tax authority, please respond to questions 5.3.5 – 5.3.10. If less than 50%,
please proceed to section 5.4.
If in question 5.3.1, you responded that the company would be audited every year as a matter of course and even if the CIT
case scenario described above would not trigger an audit by the tax authority, please still provide answers to questions 5.3.5 –
5.3.10.
5.3.5 Please indicate the time (in calendar days) it takes the tax Not applicable as explained
authority to start an audit from the moment of submitting an above. Filing revised return
amended CIT return and making the payment of the additional does not lead to Audit.
CIT liability due.
5.3.6 Please specify the time (in business hours) TaxpayerCo. 47
would spend in gathering information and preparing any
additional documentation (information such as receipts,
financial statements, pay stubs) as required by the tax auditor. If
various rounds of interactions occur between TaxpayerCo. and
the auditor, please estimate the total time for all these
interactions.
5.3.7 Please list the documents TaxpayerCo. would most To be prepare during the
typically have to prepare for an auditor. audit: Financial
statements, tax audit
reports, computation of
income with detailed
notes, Challans for
payments of taxes,
Witholding tax certificates,
Evidences of expenses
incurred
5.3.7a Please explain how does the majority of companies – such In person, at the tax office Not applicable
as the one considered in the case study -submit all these
documents?
5.3.8 Please estimate the time (in business hours) TaxpayerCo. 1.5 Not applicable
would spend in submitting the documents requested by the
auditor.
5.3.9 Please estimate the total time (in calendar days) from the 180 Not applicable
moment the audit starts until there are no further interactions
between TaxpayerCo. and the auditor (this estimate would
include the various rounds of interactions between TaxpayerCo.
and the auditor).
5.3.10 Please estimate the total time (in calendar weeks), it 2 Not applicable
takes for TaxpayerCo. to receive the final report from the auditor
from the moment TaxpayerCo. has submitted all relevant
information and documents, and there are no further
interactions between TaxpayerCo. and auditor.
Please assume the final decision of the audit is an agreement

with the self-assessed tax liability of TaxpayerCo.
5.4 Overall Time variance
54
VAT cash refund case scenario
Please verify the overall time required to obtain a VAT cash refund.
Question Time Please explain:
(in weeks)
Last year, the overall time in calendar weeks to obtain a VAT cash refund per the Not applicable On an average VAT
case study scenario in Mumbai from the moment of submitting the claim for a cash refund is
VAT cash refund– was estimated at: released in 6 weeks
for the Calender
Year 2015.
This year, based on your experience and referring to the parameters of the case 22 On an average vat
study of a large capital purchase, what is the overall time in calendar weeks to cash refund is
obtain a VAT cash refund from the moment of submitting the claim for a VAT released in 6 weeks
refund? subject to the
conditions laid
down in Trade
Circular 5T of
2016.
Based on your experience and the same case study assumptions, what can be the Within a Week 1. 90% of VAT Cash
fastest time (calendar weeks) in practice to obtain the VAT cash refund? Refund is obtained
by the dealer within
a week.
2. Also there are

schemes such as
Special Refund
Scheme for
Exporters 95% of
the refund is
granted without
audit within 10 days
from the date of
application of
refund, Refund
against Bank
Guarantee is
granted (Sec
51(3)(b) of the
MVAT Act, 2002)
within 20 days of
the date of
application for the
refund without
audit and FastTrack
Refund Scheme
mostly for the
reputed
manufacturers
where refund is
granted within 10
days from the date
of application for
refund without any
Audit . For all these
schemes, pl refer
Internal Circular
13A of 2010 and
55
Trade Circular 22T
of 2010.
Based on your experience and the same case study assumptions, what can be the 60 Weeks 6 weeks
slowest time (calendar weeks) in practice to obtain the VAT cash refund?
If there is a difference in time, what is the main reason behind it? There is a difference 90% of the refund is
released to the
dealer without
Refund Audit or
Assessment. Please
refer Trade Circular
22T of 2010,
Internal Circular
13A of 2010 and
Trade Circular 5T of
2016. Purchase of
the claiment dealer
are matched with
the sales of the
respective dealers.
This is called
generation of J2*J1
Report. For the
dealers having
periodicity of filing
return as Six
Monthly, this report
will be generated
only after filing of
the return by such
dealer. Hence some
times there is delay
in obtaining the
cash VAT refund by
the dealer.
Corporate Income Tax (CIT) audit case scenario

Please verify the overall time required to complete a corporate income tax audit
Question Time Please explain:
(in weeks)
Last year, the overall time in calendar weeks to complete a CIT audit per the 27.7 Not applicable.
case study scenario in Mumbai from the moment the audit starts – was As explained above,
estimated at: the filing of revised
return does not
trigger audit.
This year, based on your experience and referring to the parameters of the case NA
study scenario of self-reporting an error in the CIT return and underpayment of
liability due, what is the overall time in calendar weeks to complete the CIT
audit from the moment the audit starts?
Based on your experience and the same case study assumptions, what can be NA
the fastest time (calendar weeks) in practice to complete the CIT audit?
Based on your experience and the same case study assumptions, what can be NA
the slowest time (calendar weeks) in practice to complete the CIT audit?
If there is a difference in time, what is the main reason behind it? NA
56
5.5 General Questions on tax audit by tax authorities
5.5.1 Is there a comprehensive audit manual (documented material on audit policies and procedures) that is readily accessible to all
audit staff and/or general public? Refund Audit Manual of Procedure is available on the website of the Department
www.mahavat.gov.in. It is available in the Dealers Services. It is available to general public and is downloadable. goo.gl/fcKxA5
Yes, Instructions on Limited Scrutiny are issued to Income Tax Department employees. Refer Instruction No. 5/2016 dated 14th July
2016 and Instruction No. 20/2015 dated 29 September 2015 - goo.gl/g2kTrP
5.5.2 Does the audit manual or any relevant guidelines explain the types (and numbers) of audits to be conducted, and the
circumstances in which specific types of audits are to be carried out? All Selection is done Centrally based on Approved Risk
Parameters approved by the Central Board of Direct Taxes
5.5.3 Do tax auditors in your country often carry out computer-assisted tax audits (e-audits) where they utilize the company’s
electronic transaction data as much as possible? Maharashtra Sales Tax Department fixes some parameters for the Computerised
Desk Audit (CDA). Please refer Trade Circular 37T of 2016 goo.gl/KXxPGG. Eleven parameters are set by the Department. CDA is
often carried out by the Department.
Income tax department also uses Computer Aided Scrutiny Selection (CASS) for the audit purpose. Instructions on Limited Scrutiny
are issued to Income Tax Department employees. Refer Instruction No. 5/2016 dated 14th July 2016 and Instruction No. 20/2015
dated 29 September 2015 - goo.gl/g2kTrP
5.5.4 Do most companies similar to the case study company in your country maintain and share their accounting records with the
tax authority in electronic format? If yes, does the tax authority use a remote online connection to the companies’ financial systems
to access their archives of invoices, general ledger and other data? No
57
6. NEW QUESTIONS: Childcare services and tax benefits to employers, private stand-alone
childcare centers and parents
This year we are collecting data on tax benefits associated with childcare services applying to private-sector employers, private
stand-alone childcare centers and parents. This data will be used by the Women, Business, and the Law unit of the World Bank
Group.
This section measures services provided by private businesses to children under the age of 6 years old, which may be regulated
differently depending on the age of the child. Please indicate responses based on the legislation applicable to each age group.
In this section, all information listed under ‘Last Cycle’ refers to the laws and regulations effective up to April 30, 2015. In columns
‘This Cycle’, please provide your answers and legal citations referring to the laws and regulations that are currently effective. If you
disagree with the information provided for the last cycle, you may note a correction (the data presented is incorrect) or a reform (a
modification in the law or the enactment of new legislation after 30 April 2015).
Assumptions:
Assume that the employee (a man or a woman):
 Resides in Mumbai (the economy's main business city).
 Has reached the legal age of majority and is capable of making decisions as an adult. If there is no legal age of majority, the
employee is assumed to be 30 years old.
 Is sane, competent, in good health, has no criminal record, and is a lawful citizen of India Mumbai.
 Is employed full-time under a permanent contract in a privately-owned, limited liability company.
 Is not a member of a union, unless membership is mandatory.
 Has been working long enough to accrue all benefits measured in this section.
 Has one child and is currently legally married.
6.1. GOVERNMENT INCENTIVES TO EMPLOYERS

This section measures government tax and non-tax incentives for private limited liability companies that provide and/or support
childcare services. Benefits are granted directly to employers for (a) directly establishing childcare centers or financing childcare
services by granting employees allowances for the use of childcare; or (b) by financing pre-existing childcare centers to be used by
employees. In your response, please explain if different provisions apply to (a) and (b) above.
6.1.1 Do employers receive tax benefits for providing or supporting childcare services for children under 6 years?
Tax benefits are tax credits or deductions on the company’s income. This does not include VAT benefits or tax benefits on social
security payments or other contributions paid by the employer.
Age of Child This cycle Legal Basis (please cite law and article)
1 year old Not Applicable
2 years old Not Applicable
6.1.2 Do employers receive non-tax benefits for providing or supporting childcare for children under 6 years?
6.1.3 Please include any additional comments and links to laws relevant to this section:
58
6.2 GOVERNMENT INCENTIVES TO STAND-ALONE CHILDCARE CENTERS
This section measures government tax and non-tax benefits for private stand-alone for-profit childcare centers (i.e., benefits that are
granted directly to the childcare provider). Benefits included under this section are of a general nature and are not linked to a specific
child.
6.2.1 Do private childcare centers receive tax benefits for providing childcare services for children under 6 years?
Tax benefits are tax credits or deductions on the center's income. This does not include VAT benefits for services provided by the
childcare center.
6.2.2 Do private childcare centers receive subsidies or other non-tax benefits for providing childcare services for children under
6 years?
Non-tax benefits include monetary and non-monetary support, such as technical support, property or financial incentives.
6.2.3 Does the government directly provide childcare services for children under 6 years?
Public childcare services are provided directly by the government for all children universally. These services may be provided at no
cost or for a small fee. If these services are available only for low-income families, please indicate so in the legal basis field.
6.3 GOVERNMENT INCENTIVES TO PARENTS (EMPLOYEES)

This section measures government tax and non-tax benefits for parents employed in the private sector. Non-tax benefits are
monetary benefits granted to the parent or directly to the childcare provider for the benefit of a certain parent (employee). This
section does not cover unemployment benefits.
6.3.1 Are there any gender-specific tax deductions or tax credits that are only applicable to:
Answer and Legal Basis (please cite law and article)
Last cycle This cycle Last cycle This cycle
Men No Not Applicable No applicable provisions No such
could be located provisions
Women No Not Applicable No applicable provisions No such provisions
could be located
6.3.2 Are childcare payments tax deductible for parents of children under 6 years?
Childcare payments are payments made by the parent to a childcare provider. This question captures tax deductibility of payments
paid by a parent specifically for childcare services.
59
6.3.3 Does the government provide employed parents with children under the age of 6 years with non-tax benefits specifically
for the use of childcare?
Non-tax benefits include allowances or financial support granted by the government to parents employed in the private sector
specifically for childcare services. The payment can be granted to one or both parents or directly to the childcare provider to benefit a
certain child. Please specify if the payment is granted to one parent only and if so which parent.
6.3.4 If 6.3.3 is yes, is it based on income?

6.3.5 Do parents receive tax benefits (not specific to childcare services) for children under 6 years?
Tax benefits include tax deductions and/or credits that are granted to one or both parents. If the payment is granted to a specific
parent, please indicate so in the legal basis field and if so which parent.
6.3.6 If 6.3.5 is yes, is it based on income?

6.3.7 Do parents receive non-tax benefits (not specific to childcare services) for children under 6 years? Non-tax benefits
include allowances or financial support granted by the government to parents employed in the private sector specifically for
childcare services. This payment is not specific for the use of childcare services). Please indicate if the benefit is granted
based on income.
60
6.3.8 Does the tax law require married couples to file personal income taxes jointly?
If the answer depends on the matrimonial regime, please provide details for each regime in the legal basis field.
Answer Legal Basis (please cite law and article)
No
6.4. REFORMS AND PENDING LEGISLATION
6.4.1. Have there been any reforms in the laws and regulations relating to the childcare services and associated taxes and
incentives since 30 April, 2015? No
6.4.2 If Yes, please describe in detail and, if possible, provide a citation to the new legislation or regulation (you can also email
us a copy of the new legislation or regulation as an attachment to WBLIncentives@worldbank.org).
6.4.3 Are there currently any draft laws or regulations going through the legislative process or pending approval related to
childcare services and associated taxes and incentives? The answer is yes if a new law or regulation or amendment to the existing
laws and regulations is currently going through the legislative process to be adopted by the legislative body. No
6.4.4 If Yes, please describe in detail and, if possible, provide a link to the draft legislation or regulation (you can also email us a
copy of the draft legislation or regulation to WBLIncentives@worldbank.org).
61

Paying Taxes-Mumbai

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Paying Taxes Questionnaire - India Mumbai

Ms. Joanna Nasr Ms. Parvina Rakhimova

Paperless Option for Complimentary Report and Certificate

First name Last name Position Firm Address Phone E-mail

A. Case Study Assumptions

General Description of the Company

If yes, please explain:

2. Additional facility the e-Payment of VAT

If yes, please explain the changes:

2. Tax on insurance 1 0 no Not no no 12% * (1+ insurance NA Not

C.2 Deductions and Depreciation

Tax Deductible in % deductible

2.2 Tax-Deductible Expenses

2.3 General Provisions

2.4 Annual Depreciation of Fixed Assets

Tax Depreciation method in Please specify if accelerated

C.3 Labor Taxes and Mandatory Contributions

 The company has 60 employees: 4 managers, 8 assistants and 48 workers.

 Please provide calculations per employee.

Labor tax or contribution Tax base Tax rate Tax amount

Personal income tax – paid by Not applicable as the

Name of tax or contribution Tax base Tax rate Tax amount

Comments (if any):

Annual salary of each assistant: INR 100,444.83

Labor tax or contribution Tax base Tax rate Tax amount

Name of tax or contribution Tax base Tax rate Tax amount

Comments (if any):

Annual salary of each worker: INR 80,355.86

Labor tax or contribution Tax base Tax rate Tax amount

Name of tax or contribution Tax base Tax rate Tax amount

Comments (if any):

4.2 Compliance Time for Profit Taxes

PREPARATION — Profit taxes

FILING — Profit taxes

PAYMENT — Profit taxes

4.3 Compliance Time for Labor Taxes and Mandatory Contributions

PREPARATION — Labor taxes and mandatory contributions

FILING — Labor taxes and mandatory contributions

PAYMENT — Labor taxes and mandatory contributions

4.4 Compliance Time for Consumption Taxes

PREPARATION — VAT, sales tax and/or GST

FILING — VAT, sales tax and/or GST

PAYMENT — VAT, sales tax and/or GST

C.5 Postfiling procedures

5.1. VAT Cash Refund

 The machine is manufactured domestically. It is not imported.

 The seller of the machinery is registered for VAT.

VAT refund VAT rate * ((5,223,131.11 + 5,859,281.7) - 7,031,138.04)

General Questions on VAT refunds

Last year’s response: Updated response: calendar

Time to comply with requesting a VAT cash refund

Last year’s response: Updated response:

Time to obtain a VAT cash refund

Last year’s response: Updated response:

Please only consider tax audits that require interactions between

If in person, at the tax office, please estimate time in business

If in person and at the taxpayer’s premises, please put zero.

5.2 Corporate income tax (CIT) underpayment

Last year’s response: Updated response: calendar

5.2.1h Please explain how that payment is processed Electronically Electronically

5.3 Corporate income tax audit

Last year’s response: Updated response: calendar