PriceLine Essay Example for Free

PriceLine Essay The number of Internet users has multiplied manifolds in the past few years that have influenced business strategies across the globe. The travel industry too has undergone significant changes with companies utilizing online platform to reach out to millions of customers at a given point of time. E-commerce has emerged as the new marketplace where travel package sellers provide prompt service to customers looking for holiday packages, flight ticket bookings, hotel reservations and sight seeing trips. The online travel industry has equipped the customers with access to vast information related to travel plans, cost of tickets, options and alternatives available to minimize costs and make more effective travel plans. This proves not only convenient to the customers allowing them to make better decisions but also saves a lot of time in commuting to the local travel agent or making reservations on phone. The flexibility offered by this mode of transaction has induced most people to venture online to book flights and make travel plans. The industry has witnessed widespread growth due to increasing consumer demand for online services. Many firms have entered the industry owing to the low cost of setting up virtual operations and increased market accessibility. PriceLine. com was one of the pioneers in this field owing to its unique business model â€Å"Name Your Own Price† that set the cash registers ringing for the company. Eventually many companies followed to adopt the demand collection business model to achieve increased sales and growth. Company overview Priceline. com was founded in the year 1997 and is an online travel service provider with its headquarters in Connecticut, United States. Priceline. om currently provides online travel services to over 60 countries in Europe, America, Asia, Middle East and Africa. It operates under the banners booking. com – an online hotel reservation service serving European markets, priceline. com – an online travel booking service operating in United States, and agoda. com – an online hotel reservation service in Asia. Additionally the company operates other travel websites that include travelweb. com, lowestfare. com, rentalcars. com and breezenet. com. The company also provides personal finance services that offer home mortgages, refinancing and home equity loans. Priceline. com offers its customers various alternatives to plan their vacations in a cost effective manner. The various services provided by the company allow the customers to save on their airline tickets, hotel reservation charges, renting cars, vacation packages and cruises. In addition to discounted prices and cost effective travel packages the company provides its customers with Name Your Own Price service that enables the customers to bid for tickets and reservations, car rentals and cruises at their own specified price that is accepted or refused by the company based on booking availability. The company generates revenue on the margin between the customer paid price and the price paid by the company to the airlines, car rental agencies or hotels for bookings. Priceline. com soon expanded to other areas of servicing including car rentals, hotel reservations, car sales, vacations packages, and cruises. The sales of the company increased from only US$ 35 million in 1998 to US$ 480 million in 1999. In the year 2007 the company reported a gross sale of US$ 4. 8 billion that was almost 45. 5 percent increase over the previous year sales (Priceline. om). Priceline The Business Model Advancing technology and rapidly changing business application scenario has made a deep impact on the way organizations are adopting innovative ways to reach the customers and increase profit margins. E-commerce is the latest business strategy that has provided greater competitive edge to industries across the globe. The online travel business is one of the most rewarding aspects of rising e-commerce applications. Consumers now do not need to visit the ticketing or booking office to make their travel plans. All they need to do is log on to the Internet and access websites that offer online flight ticket bookings, hotel reservations, car rentals and host of other travel related services such as arranging local sightseeing trips and avail special tour packages. Priceline. com is one of the pioneers in providing its customers with cost effective travel services introducing a novel approach to online travel sales. The business model â€Å"Name Your Own Price† became a huge hit with the customers and Priceline made headlines in the forthcoming years. Priceline. om was the brainchild of Jay Walker, an entrepreneur, who developed a new business model where the customers could bid their price for a specific product. The seller would then decide if he is ready to sell at that price or not. This model enabled the sellers to offload their old and excess stock at a discounted price. In 1996 this model was applied by Jay Walker to an airline industry where unsold extra seats were sold off to customers at a discounted price. This formed the origin of an Internet-based software â€Å"name your own price† ticketing service for airlines. Customers placed bid on tickets for specific destinations of their choice. Priceline would match the available airlines bookings for the specified destinations and decide on accepting price bids placed by customers. The company discarded requests for unreasonably low prices quoted by customers. Moreover, the customers had the limitation of choosing airlines, exact time of travel and if needed, take a connecting flight. This business model was not readily accepted by major airlines since they had plans of launching their own website services. Walker had entered into agreement with only two partners – TWA and America West. Priceline. com was launched in April 1998. Initially the company faced losses and but in August 1998 the company signed agreement with one of the major airlines – Delta, and this turned the fortunes of the company. Other airlines followed suit and the company’s business model gained rapid acceptance among the consumers. There are three steps to PriceLine sales strategy online using the â€Å"Name Your Own Price† model. The website collects consumer demand for a specific product or service at a desired price level. The company then communicates this demand to the available sellers’ database and decides on a specific dealer who is willing to sell at that particular consumer-mentioned price. Once the seller agrees to sell at that price, the company communicates this offer to the consumer who finalizes the sales process. In case the consumer does not respond to the offer within a specified time period the offer is declared null and void. Company Growth Strategy The company’s management has ambitious growth plans for the future and is focused on growing and expanding to new emerging markets in Asia and other corners of the globe. The company is experiencing extraordinary growth rate and this is evident in its positioning in the Top 50 hot growth company list on the Business Week magazine. Jeffrey H. Boyd, president and Chief Executive Officer of Priceline claims â€Å"Internationally, we believe that our wide geographic reach, new market initiatives and extensive inventory are providing sustained impetus for growth. We believe that in the United States, our value positioning and brand promotion through offline and online channels is driving above-category growth rates in an uncertain economic environment. † The â€Å"Name Your Own Price† business model launched by PriceLine became the stepping stone to success. The company adopted this model effectively in the travel bookings industry and then re-applied this theory to other segment of customer service that included financial mortgages and car sales. PriceLine has evolved as a reputable brand in the past few years in the area of online travel bookings. The company utilized this brand name to promote franchisees across various geographic regions. The market expansion strategy through appointing licensed operators to offer similar kinds of services to customers using their business model was very effective. Richard S. Braddock, the CEO and chairman of PriceLine had stated â€Å"We believe that priceline. com has the two most important ingredients in place to make our travel growth strategy a success. One is our industry leading travel brand and the other is our customer franchise, which provides a steady average stream of 4 million visitors who come to priceline. com each month looking to make travel purchases. † Prompt query processing and customer service is another area of marketing and sales strategy that is emphasized by the company management. The effectiveness of travel booking companies is measured by their capacity to provide host of cost effective travel packages and prompt customer servicing. Ron Rose, the Chief Information Officer at PriceLine observes in priceline. om â€Å"Our goal is to lead the industry as a world class customer-centric company, with an infrastructure that delivers the best, personalized customer service experience is absolutely fundamental to our company’s long term success on the Internet. † PriceLine started its initial operations with airlines ticket booking services and the wide popularity and acceptance that their business model experienced during the first few years prompted them to move to new areas of operations related to travel market. The online booking of airlines services was extended to hotel reservations, car rentals, vacation packages and cruises. The number of sellers associating with PriceLine. com also increased owing to their rapid market expansion and growth strategy. Major airlines, hotels, car renting agencies and cruise companies entered into agreement with PriceLine to meet the growing consumer demands. PriceLine has adopted aggressive outdoor advertising and online advertising campaigns to generate interest among potential consumers on a global scale. It has set up physical locations at strategic market locations to increase accessibility and provide a more effective customer service. This step was taken to attract customers who are not Internet savvy and prefer to transact offline. Technology The launch of the Internet applications and e-commerce in the 1990s made a deep impact on the business world. E-commerce business models revolutionized the way businesses are conducted today leading to increased opportunities that challenged traditional business outfits to accept new challenges. Low cost operations business models made an entry equipped with technology that had extensive global reach and the potential to generate higher profits. The appropriate use of this technology in the online travel sales business provided Priceline with an edge over its competitors. It became a leading service provider in the industry owing to the ways it enabled its customers to save on their airline tickets, hotel reservations, rental car bookings, vacation packages and cruises. The company applied an advanced search technology, TripFilter that allowed the travelers to narrow their searches and create their own travel packages that were most cost effective using the lowest price booking services offer. Application of e-commerce technologies and applications have made significant impact on the sales of the company. The company website has been ranked as one of the most available e-commerce site in the past four years according to Keynote systems (www. keynotesystems. com). Technology has been a great enabler of changes in modes of business practice and models adopted by the entrepreneurs to maximize gains. The company realizes that it needs to maintain a strong database and advanced technology features in terms of data storage capacity to accommodate its growing customer base online. The management implemented a system that took care of its growing backend processing needs without compromising on the speed of customer request processing. PriceLine utilized the technology platform to provide a base for new means of marketing, revenue earning model, and communicating with existing and potential clients. The online market penetration strategy adopted by PriceLine offered huge economic benefits in terms of extensive market penetration, easy access to consumers and wide scale accessibility of products and services. Market Expansion Strategies The globalization of the market owing to the extensive reach of the Internet, information, and product details accessible to consumers across physical borders translates to increased sales and revenue figures for the sellers online. They can now reach any corner of the globe to display and sell their products ensuring wider scale of operations and greater market share. This owes to the millions of people globally who now have access to the Internet and with telecommunication service providers facilitating the broadband services; the quality of access has improved considerably. The online travel market demand is increasing in emerging Asian economies and most reputed travel brands are establishing their presence in these countries to tap the enormous market potential. The United States market has the maximum number of users online to meet their travel demands. Online ticket bookings and travel related purchases are one of the primary contributors to e-commerce revenue. The markets of United States and Europe are more matured compared to the emerging Asian markets that hold a lot of promise for the industry in the future years.

Operations Of Rolls Royce Motor Cars

Operations Of Rolls Royce Motor Cars The main purpose of this report was to apply information systems and operations to the Rolls-Royce Motor Cars Limited. This report defines the companys operation, offers an input-transformation-output diagram of the operations system. Then it discusses the supply network and the flows in terms of physical and informational. And it identifies the major categories of ICT, E-business and information systems used and the influences on the operations. Rolls-Royce Motor Cars Limited is a system to gain resources from the environment to produce high-quality of motor cars to customers. For the sake of describing the primary, secondary, and tertiary divisions of the operation system, the systems method is applied to show every sub-system of the entire system. 1.0 Introduction In business world, the focus is on how people do business rather than on what people make, so companies pay more attention on operations where most organizations incur the majority of the costs. Nowadays, consumers require higher quality, quicker deliveries and lower costs, operations is adding cross-functional decision making and better deal with information system (Anupindi et al., 2005). In essence, operations management means the generation of consumer value via the efficiently and effectively managing the operation processes (Voss, Tsikriktsis Frohlich, 2002). With added internationalization and competition and in markets, operations management are reducing product and service life cycles, shifting emphasis on consumer concerns, competing for time (Hayes, 2002). As a British manufacturer of luxury automobiles on the base of the Good wood Plant, Rolls-Royce Motor Cars Limited is the present producer of Rolls-Royce branded automobiles. Having been a motoring icon for more than 10 0 years, Rolls-Royce Motor Cars Limited aims at continuing to set the pace into the next century. The main purpose of this report is to apply information systems and operations to the Rolls-Royce Motor Cars Limited. This report will adopt a narrow view of operations, define the companys operation. And offer an annotated input-transformation-output diagram of the operations system presenting the primary, secondary and tertiary inputs and outputs. Following this, it will discuss the supply network of which it is part, and describe the components that comprise this supply network and the flows in terms of physical and informational between the components. Finally, it will identify the major categories of ICT, E-business and information systems used and look at the influences on the operations and supply network in Rolls-Royce Ltd. 2.0 Operations system 2.1 Operations in Rolls-Royce Motor Cars Limited Operations management means the business function conscientious about planning, organizing, and controlling the resources required to generate an organizations services and products (Slack, Chambers Johnson, 2004). Rolls-Royce Motor Cars Limited is a system to gain resources from its environment including materials and staff, to produce high-quality of motor cars to customers all around the world. The operation system is highly standardized, low contact skills, high staff utilization, centralization and low unit costs. The operations function includes all actions associated with generating and delivering motor cars. Rolls-Royce Motor Cars Limited is typical goods producing operations. The percent of the product that is good, namely, motor cars. All micro and macro and operations in Rolls-Royce Ltd are based on its customers and suppliers. The needed components of the whole system are to fulfill the companys mission. The company aims to produces goods with excellent durability and quality, with well function, style, and design. Rolls-Royce Ltd is emphasized on the relations of its suppliers and its consumers for the sake of operating effectively and offering high-quality to the motor cars. 2.2 A holistic view of Rolls-Royce Ltd system The diagram below describes the components through which the entire system of Rolls-Royce Motor Cars Limited contains. The interior process through which the company participates separately could be seen in figure 1. The primary division is conscientious about generating and delivering raw materials for the company, where the secondary division applies the raw materials for the sake of manufacturing or improving the goods of the Rolls-Royce Ltd. With regard to the tertiary division, the services are offered through the organization for the sake of satisfying the requirements of its consumers such as distributing and retailing of the motor cars. For the sake of describing the primary, secondary, and tertiary divisions of the operation system, the systems method is applied to show every sub-system of the entire system. 2.3 Input-transformation-output diagram The input-transformation-output connects the environment to the management control system (Bertrand Fransoo, 2002). For the sake of designing good management control systems, it is necessary to comprehend where in the environment to look the appropriate inputs, the form of transformation perform, and what output to generate (Johnston, 2005). Comprehending the input-transformation-output process assists Rolls-Royce Ltd to determine the certain design parameters of management control system. In accordance with what is shown about every division, the input-transformation-output diagram is produced for the sake of describing the primary, secondary, and tertiary inputs and outputs (figure 2). The input-transformation-output diagram shows what kind of operations management Rolls-Royce Ltd proceeds for the sake of gaining its goals. The company gains inputs from its environment, transforms them into outputs, and delivers the outputs back into the environment. Rolls-Royce Ltd makes a limited product line of motor cars using input-transformation-output process. The company applies lots of manufacturing process having various categories of control systems than applying lean manufacturing ways. The process is visualized for the motor cars to be accomplished and is available to consumers. The input-transformation-output diagram describes what inputs are needed in the whole operation system for the sake of obtaining the prescriptive outputs. The outputs are motor cars, services, and even outcomes of product operations management. 2.3.1 The primary division The primary division of Rolls-Royce Motor Cars Limited is the suppliers, as the organization does not generate the raw materials on its own. The company needs the raw materials from the manufacturers and suppliers to stick to several certain ways and standards for the sake of cooperate with them. The organization generates some measures to estimate the environmental influence of the cars, and assists its suppliers through comprehending the environmental influence of the goods they offer. Rolls-Royce Ltd applies reusing and reusable sources for the sake of generating more motor cars while older cars get the terminal of the lifecycle. The company proposes to the suppliers to recycle the wasteful materials to produce other goods, so as to prevent from the waste which is generated in the manufacturing process. The agents of Rolls-Royce Ltd are conscientious about buying materials, negotiating the prices to the suppliers, test the quality of goods offered and locating orders. The inputs i nclude sheet steel, engine parts, information on raw materials, manufacturing guidelines, procedures, and personnel polices. 2.3.2 Secondary division The secondary part is related to the manufacturing. At the transformation process phase, the materials from the suppliers are applied so as to produce the motor cars. The manufacturers are needed to apply strict standards for the sake of generating high quality cars. Rolls-Royce Ltd forms some relationships so as to obtain support to the actions. One of the companys objectives is to be friendly with the environment, and the company offers high quality cars as it is conscientious about the environment about and people. The transformation process needs equipment, tools, fabrication and assembly of cars, and employees follow instructions. 2.3.3 Tertiary division The tertiary division is responsible for satisfying the consumers requirements. Rolls-Royce Ltd has made available motor cars online to some countries. Rolls-Royce Ltd tries its best to reduce cost in the actions in the operations so as to reach the company goal. The company finds that it is difficult for the consumers to make decisions on empty stomach, so it has offered store restaurants. Although the company does the majority of the operations to the cars to get to the consumers, the consumers can choose, collect, and assembly the cars to reduce the total cost. As consumers choose and buy the motor cars on their own, the company has tried its best to strengthen the performance and aesthetic of the cars. The output in most of the company operations is a mixture of products and services, mainly in high-quality motor cars. 3.0 Supply network 3.1 Supply network of Rolls-Royce Motor Cars Limited Form a wider viewpoint of the operations system, it means the design, operation and development of the interior and exterior systems and resources across the entire company and the supply network generating and delivering the companys services and goods and the value required through consumers (Waller, 2003). The supply network in the company consists of the common statement of businesses where a variety of materials are transformed and moved between different value-added points to maximize the value added for consumers. Because the components forming the supply network have been identified above, the supply network of Rolls-Royce Motor Cars Limited emphasizes on the upstream and downstream of the supply network (figure 2). 3.1.1 Upstream of the supply network The upstream of the supply network in Rolls-Royce Ltd starts while a consumer subscribes online, by phone or in person. The consumers subscription goes to the closest distribution centre and the car of the subscription is collected and distributed immediately to the consumer. Through the comparison between the downstream and upstream, it is differentiated that the retailer that is portion of the supply network does not play any role from the categories of transactions. 3.1.2 Downstream of the supply network One of the agents obligations is to order forms, so while an agent orders a form to the suppliers they setout the materials needed in the company, and they are transported to the secondary division. From the distribution centers, the motor cars are transferred to the retailers in accordance with the place of the store in country, therefore the consumers are able to visit the nearest store to purchase goods. 3.2 Physical and informational flows Relationships and information flows include personal relations across the company and lots of firms in the supply network, relationships between companies such as structures and systems required, and the information flows in terms of informal and formal essential to the different relationships to appropriately function (Roth Menor, 2003). 3.2.1 Physical flows Physical flows move when the informational flows deal with controlling and management of the operation process in Rolls-Royce Ltd. The informational flows in the physical processing could be developed online. Via a determined delivery deadline, the time for physical flows is predetermined in the company. The application of information systems helps to develop planning of the physical flows and the informational flow is important for the company to keep competitive. 3.2.2 Informational flows Information flow (formal and informal) is transmission of information from one place to another in Rolls-Royce Ltd. The company tries its best to manage information flows to improve value chain performance. Figure 4 shows the information flows in supply network of Rolls-Royce Ltd. 4.0 ICT, E-business and information systems 4.1 ICT ICT plays an important role in processing of data into information, in the interaction between sub-systems of a system and between systems in Rolls-Royce Motor Cars Limited. Information communications technologies (ICT) includes E-mail, Web-based ordering, EDI of invoices and payment, and Web-based order tracking. In managing business processes of Rolls-Royce Ltd, ICT acts as sensor, feedback, comparator and actuator. ICT is in favor of determining forecasts to expect environmental disturbances and the trade-offs in buffers to accommodate environmental disturbances in the company. ICT is in favor of all facets of management such as decisions, functions, and levels. At every level, ICT processes data into information for business staff at the level, and ICT transmits the information as data for the following level up in the firm. The perception of boundary has results for the functions included in a specific information system. Having shown role of ICT in fundamental control loop functions, it is also in support of the goal setting process in Rolls-Royce Ltd. 4.2 E-business As a trend in operations and supply chain management, E-business develops pace, quality and cost of commerce communication. E-business covers all mediated information interchanges between a company and its exterior stakeholders (Chase, Jacobs Aquilano, 2006). Rolls-Royce Ltd uses operations information systems in day-to-day actions like transaction processing, process control, and communications. Rolls-Royce Ltd benefits a lot from the E-business. The customers of the Rolls-Royce Ltd can gain information about cars they needed by touching a button. The company can provide better availability of service to permit consumers to shop online, better timeliness of service to provide 24-hour service for purchasing products, and reduced cost in information processing. Through E-business, the operating costs of operations are less expensive, cheaper than brick-and-mortar, and initial cost of operations is cheaper. The company offers better access to consumer markets going everywhere in the world, and improves scheduling as the online capability permits the company more precise and seasonable in scheduling production activities. The firm is more easily study the quality of materials and components in the operation process. In addition, Rolls-Royce Ltd is better buying prices from suppliers, as the company obtains more pricing information and outcomes in lowering costs. Rolls-Royce Ltd enhances car development, as the capability online a ssists to decrease the time-to-market and the cost for new cars. 4.3 Information systems Information systems is applied to support the functional fields of business, is a group of relevant components working jointly to implement input, processing, output, and control activities for the sake of shifting data into information products applied to support operations (Rust Chase, 1999). The application of these systems is much cheaper compared with other systems. This system consists of process control systems, office automation systems, and transaction processing systems, which are major information system in the company. Management information systems are applied to offer feedback on the company actions and sustaining decision making. The system contains information reporting systems, executive information systems, and decision support systems in Rolls-Royce Ltd. Rolls-Royce Ltd can immensely enhance the performance through applying these information systems, and the information interchange between the firm and the suppliers is much faster. These information system influences the value chain in Rolls-Royce Ltd, such as identifying the methods IS may generate competitive advantage, creating a plan for taking advantage of IS, determining the role, and assessing the information intensity of the value chain. In addition, the company makes full use of interprise resource planning (ERP) systems with comprehensive functions for all main business operations across Rolls-Royce Ltd like production, finance, sales, and human resource management. Whats more, Rolls-Royce Ltd takes advantage of computer-based information system for the sake of generating management information, which is high-speed, reliable, accurate and programmable. 5.0 Conclusion In conclusion, Rolls-Royce Ltd can generate competitive advantage through information systems and operations. The input-transformation-output diagram is produced for the sake of describing the primary, secondary, and tertiary inputs and outputs. The supply network of Rolls-Royce Motor Cars Limited emphasizes on the upstream and downstream of the supply network, and information flows in terms of informal and formal essential to the different relationships to appropriately function. ICT plays an important role in processing of data into information, in the interaction between sub-systems of a system and between systems in the company, and Rolls-Royce Ltd benefits a lot from the E-business and information systems. 6.0 Appendices Figure 1 Operations system in Rolls-Royce Motor Cars Limited Figure 2 Input-transformation-output diagram of Rolls-Royce Motor Cars Limited Figure 3 Supply network Figure 4 Information flows in supply network

Kirkpatricks Evaluation Of Training Management Essay

Kirkpatricks Evaluation Of Training Management Essay Kirkpatricks model of evaluation is being applied. This model consists of four levels of evaluation. The first level is the reaction level in which the reactions of the trainees are understood to mean the way in which they perceive and subjectively evaluate the relevance and quality of the training. It attempts to answer questions regarding the participants perceptions Did they like it? Was the material relevant to their work? This type of evaluation is often called a smileysheet. According to Kirkpatrick, every program should at least be evaluated at this level to provide for the improvement of a training program. At this level, evaluation measures the satisfaction of the people who followed the training. In conjunction with that, positive reactions are of critical importance in creating sufficient learning motivation. In this sense, the participants reactions have important consequences for learning (level two). Although a positive reaction does not guarantee learning, a negative reaction almost certainly reduces its possibility. Learning can be described as the extent to which the attitudes of the participants change, their knowledge increases or their skills are broadened as a consequence of the training. This is a second level of evaluation of learning behavior whereby evaluation is intended to measure the progress made in terms of knowledge, skills or attitudes. In other words, evaluation tests the participants to see whether new skills have been acquired. At this point, evaluation can relate to the method used to transfer the knowledge, skills and attitudes. To assess the amount of learning that has occurred due to a training program, level two evaluations often use tests conducted before training (pretest) and after training (post test). Assessing at this level moves the evaluation beyond learner satisfaction and attempts to assess the extent students have advanced in skills, knowledge, or attitude. Measurement at this level is more difficult and laborious than level one. Methods range from formal to in formal testing to team assessment and self-assessment. If possible, participants take the test or assessment before the training (pretest) and after training (post test) to determine the amount of learning that has occurred. A third evaluation level is that of changes in job behavior or performance. This involves studying the change in job behavior which takes place as a result of the training. Evaluating at this level attempts to answer the question Are the newly acquired skills, knowledge, or attitude being used in the everyday environment of the learner? At this point, evaluation sees whether tasks are performed differently before and after the training. In order for positive reactions and learning effects actually to lead to changed job behavior, the transfer of acquired skills to the work situation must especially be ensured. The quality of this transfer is strongly dependent on the support the participant receives after the training, especially from his immediate supervisor or coach. From a study by Bergenhenegouwen, which explain the low effectiveness of training courses, are found in this area in which immediate bosses who have more of a discouraging effect, who themselves do not set a satisfact ory example or provide insufficient supervision. For many trainers this level represents the truest assessment of a programs effectiveness. However, measuring at this level is difficult as it is often impossible to predict when the change in behavior will occur, and thus requires important decisions in terms of when to evaluate, how often to evaluate, and how to evaluate. Level four evaluation attempts to assess training in terms of organizational results. At this point, evaluation checks how the results are evaluated at the end of the training initiatives. An evaluation of the results therefore measures the progress made at organizational level. Frequently thought of as the bottom line, this level measures the success of the program in terms that managers and executives can understand increased production, improved quality, decreased costs, reduced frequency of accidents, increased sales, and even higher profits or return on investment (ROI). From a business and organizational perspective, this is the overall reason for a training program, yet level four results are not typically addressed. Determining results in financial terms is difficult to measure, and is hard to link directly with training. According to Kirkpatrick, the subject of evaluation or the level at which evaluation takes place is dependent on the phase during which the evaluation takes place. In Kirkpatricks four- level model, each successive evaluation level is built on information provided by the lower level. Assessing Training Needs often entails using the four-level model developed by Donald Kirkpatrick. According to this model, evaluation should always begin with level one, and then, as time and budget allows, should move sequentially through levels two, three, and four. Information from each prior level serves as a base for the next levels evaluation. Thus, each successive level represents a more precise measure of the effectiveness of the training program, but at the same time requires a more rigorous and time-consuming analysis. 3.2. Transfer of Training Training transfer generally refers to the use of trained knowledge and skills back on the job. Baldwin Magjuka mentioned that for transfer to occur, learned behavior must be generalized to the job context and maintained over a period of time on the job. Meanwhile, Saks Haccoun views training transfer is the generalization of knowledge and skills learned in training on the job and the maintenance of acquired knowledge and skills over time. According to the transfer of training framework by Saks Haccoun, the transfer of training activities could be segregated into three phases which is before, during, and after training to facilitate and improve the transfer of training. However, for the purpose of this study, only transfer of training after training is being applied. In this case, the management must ensure that trainees have immediate and frequent opportunities to practice and apply what they learn in training on the job. The management should also encourage and reinforce trainees application of new skills on the job. There are many other things that managers do to facilitate transfer such as develop an action plan with trainees for transfer and show support by reducing job pressures and workload, arrange practice sessions, publicize transfer successes, give promotional preference to employees who have received training and transfer, and evaluate employees use of trained skills on the job. The trainer should conduct follow-up or booster sessions following a training program. Trainers should maintain their involvement in the training and transfer process by conducting field visits to observe trainees use of trained skills, provide and solicit feedback and provide continued support and assistance to trainees. Trainees should be able to use new knowledge and skills on the job as soon and as often as possible. At the same time, trainees should meet with their supervisor to discuss opportunities for transfer. Trainees might also establish a network of peers who also attended a training program that can provide assistance and support each other for using their trained skills on the job. Trainees should also set goals for practicing their newly acquired skills on the job. 3.3. Factors Influencing the Effectiveness of Training and Development In the real world, there are some other factors that influence the effectiveness of training and development in an organization. One of them that have been identified by Haywood is the human resource policy of training and development. He mentioned that too many training program place emphasis on ease and the very purpose behind the design of programs namely, learning, skill development and behavioral change, has defeat the original purpose and goals of training are lost and the means all too readily becomes the end. Furthermore, the human resource policy would determine a clear link between training and an organizations career development and reward system in which training might leads to recognition and advancement. Indeed, the trainers capabilities as a subject matter expert would determine the effectiveness of training and development. Training programs can be trivialize if the organization hiring unqualified trainers that could defect the transfer of learning to the employees. In addition, employees attitude and motivation are one of the factors that might influence the effectiveness of training and development. Therefore, the positive attitude should be foster through the constant emphasis on team building program to enhance the employees motivational effort. In relation to this, the employees motivation in transfer and transfer climate are crucial to ensure the effectiveness of training and development. Finally, the commitment of top management to the training and development is critical to its success. Organizations whose top management view training as a way to meet organizational goals by making sure that employees take an active part in the delivery of training and in the planning of training objectives; and by maintaining a financial commitment to training.

The Lotos-Eaters By Tennyson Essay -- essays research papers fc

I. Introduction For many years, Tennyson has attracted readers by what Edmond Gosse called "the beauty of the atmosphere which Tennyson contrives to cast around his work, molding it in the blue mystery of twilight, in the opaline haze of sunset." He is one of the greatest representative figures of the Victorian Age. His writing incorporates many poetic styles and includes some of the finest idyllic poetry in the language. He is one of the few poets to have produced acknowledged masterpieces in so many different poetic genres; he implemented perhaps the most distinguished and versatile of all the written works in the English language. The first time I read â€Å"The Lotus-Eaters†1, I have to admit that I had a hearty dislike for it. Having read The Odyssey in Literature class last year, this seemed like its replica. It occurred to me that Tennyson was plagiarizing Homer. But when I reread the poem with greater depth, I noticed its poetic techniques, imagery, symbols, etc. It was really exceptional actually, although the meter didn’t remain uniform. But when you thoroughly understand it, you see how it pertains and is true to life. This being the first time I had ever come about a work by Tennyson. I didn’t know anything about his life. The idea that manifested me was that when writing this poem, Tennyson was depressed and cynical. Sort of like Hamlet2 in the â€Å"To be or not to be† soliloquy. In one point in the poem, he says, â€Å"Death is the end of the world...life all labor be?† I think he meant that life is hard to live; there are so many obstacles, so many wrong turns, and you can never go back and change anything. II. Analysis of Poem A. Summary The poem is about the journey of Odysseus to the Land of the Lotus Eaters. Here they encounter a race of creatures known as the Lotophagi (lotus eaters). They[Lotophagi] spend their days in a â€Å"daze†, literally. This was the effect of the lotus flower. It was a primitive version of narcotics. The Lotophagi offered the plant to Odysseus and his crew members. Some of the clique ate it. And then, they too, experienced a state of euphoria. Under these circumstances, they start speaking of staying over here[land of Lotos Eaters], and only dream about home. They forget their wives and children; only dream about them. Subsequently, the entire crew ate the lotos plant. Tennyson describes euphor... ...days at Cambridge he often did not bother to write down his compositions. We owe the first version of "The Lotos-Eaters" to Arthur Hallam, who reproduced it from Tennyson’s tidbits of information. IV. The Poem’s Place in its Time Tennyson turned to questions of death, religious faith, and immortality in a series of short poems, of which â€Å"The Lotus-Eaters† was a part. Tennyson had a way of achieving a covenant with his â€Å"public†. He gave them what they wanted. For example, the poem Princess was won by the hearts of the millions because it supported the women’s rights, which was one of the issues just igniting at that time. His consummately crafted verse expressed the terms of the Victorian feeling for order and harmony. Unlike Dickens, who was present in Tenneson’s time and a social critic, Tennyson didn’t seem to find an ill to society. Maybe that is why he was given the title of Lord and not Dickens. V. Bibliography 1.â€Å"Lord Alfred Tennyson,† Microsoft Encarta Encyclopedia ‘99, October 1999 2. The Norton Anthology of Poetry, The Lotos-Eaters, W.W. Norton & Company, New York, 1997, p. 540. 3. World Wide Web-http://charon.sfsu.edu/TENNYSON/tennyson.html.

Salvador de Madariagas La jirafa sagrada (The Sacred Giraffe) Essay

Salvador de Madariaga's La jirafa sagrada (The Sacred Giraffe) Amidst the fight for women’s suffrage in Spain, Salvador de Madariaga wrote The sacred giraffe, being the second volume of the posthumous works of Julio. In 1925, the time the book was published, women in the United States and much of Europe had secured the right to vote while those in Spain still remained in the fight. Madariaga an active politician as well as a writer sets up his novel as a world turned upside down. The humorous account of a make believe world where women have switched places with men depict the seemingly backwards society as a relative utopia based on peoples attitudes, rather than its social structure. The sacred giraffe starts out with a science conference contrasting the people in a mythical land known as Europe to their particular society, the Ebonites. In this land, males were thought to have dominated the public life of the fabled White Race; a humorous concept to the black women, the leaders of Ebonite society. Not only are the gender roles and skin tones different but the strange Race of 5000 years ago, were thought to be cannibalistic because "the Whites stored the remains of their dead instead of burning them"(3). The land of Ebony is a portrayed such that black is white, male is female, up is down, in this twilight-zone style country. The story plays out as a peek through a small window of time and space into the Ebonite society, centered around the doctoress Zama and her family as Zama tries to convince people that Europe did exist while her husband M’Zama, tries to fix up his brother with an eligible young women named Scruta. All the while the reader is given a tour of Ebony, exploring the major sites of the religious hive, ... ... is a long time and you don’t remember, but in those days no rain ever fell on the sea, nor on lakes, nor on rivers and brooks†¦Fish had no bones, so that children could eat them without making their parents choke, and oysters could be opened as if by persuasion"(189). The overall message of Madariaga is that it is the characteristics of each individual that form a functional society. It is neither the gender nor the color nor the exact workings of the government that allow the formation of a Utopia. Even from a seemingly ridiculous culture it is the moral thread that binds the people. The work may have been designed to influence the political swing of Spain, but its instruction holds true in all of humankind. Works Cited Madariaga, Salvador de. The sacred giraffe, being the second volume of the posthumous works of Julio. London: Martin Hopkinson & Co., 1925

Semantics: The Power of Language

Language is a phenomenon which allows human beings to interact in a meaningful way with one another.   Language began as a rudimentary system of hieroglyphics and has evolved into a highly complex system of the spoken and written word.   As language in both spoken and written form has developed, so has man’s understanding of it.   This understanding of both words and sentences has evolved along with the language itself and with the people who use it to create meaning.Word formation has occurred throughout time through several processes.   Words were developed initially through other languages, through etymology and then progressed into the formation of new words altogether, which can occur through a variety of means.   Next, words are arranged into sentences which carry both literal and implied meanings which can be based upon sounds and even the previous knowledge of those conversing.   In many ways, word economy has resulted by adopting new words from existing wo rds or from portions of existing words in an effort to simplify language.The process of economized words, which are words formed from existing words which then become commonly understood words in the language, is a major way in which the words of the language are formed.   Coinage is a process of inventing completely new words from a source which seems to embody its meaning. One way in which this occurs is to create the word kleenex from the brand name of Kleenex (instead of tissue) and xerox as a verb after the Xerox brand of copy machines.   Furthermore, eponyms can be created from individuals’ names such as to hoover from Hoover who invented the vacuum cleaner and the concept of the sandwich from the Earl of Sandwich (Yule, 2006).Another process of economizing words is called blending.   Blending occurs when the beginning of one word is combined with the ending of another word.   This new word then enters the language as an original word.   For example, a blended word for the product of gasoline made with alcohol is gasohol.   The meal which is a combination of breakfast and lunch has become represented with the word brunch.   Of course, this process can occur with the beginnings of two words as well.   The word modem is a blend of modulator and demodulator, and the new concept of Spanglish is the blending of English and Spanish (Yule, 2006), made even more popular by a recent motion picture of the same name.By blending words together, the meaning from the original words is already intact.   Thus, the meaning of the resulting word does not have to be suddenly relearned.   The meaning already exists because the words already exist.   In this way, the economy of the English language is maintained without the need for learning new definitions and uses.A third process of word economy is referred to as clipping.   With this process, a longer word is reduced to a shortened form of itself. This shortened from, like blending, carries the same meaning as its original.   The only difference is the shortened form of the word.   For example, the word facsimile, with its proliferation of used, has become shortened in modern language to the word fax.   Likewise, the word condo represents its initial longer form of condominium.Words that are reduced to a single syllable and then joined with an –ie or –y are a type of this process known as hypocorism.   Words like movie for moving picture, bookie for bookmaker and hankie for handkerchief are examples of this type of word economy (Yule, 2006).   This type of word economy is popular in England, where the word television has even been shortened to the popular, telly.As the process of word economy develops, some words are backformed.   Backforming is a type of word economy because it uses the same root of a word to convert it into a different part of speech.   One basic word root becomes the basis for two or even three words.   This process tak es a form of a word and reduces it to another form.For example a noun can be reduced to a verb.   From the word television, a noun, comes the verb televise.   The verb babysit was derived from babysitter.   Basically, in English, words that end in –er comprise the noun forms while the same word minus the –er make up the verbs.   An example is worker to work or player to play (Yule, 2006).   This particular backformation becomes a pattern in language, thus repeating itself over and over with new words without any additional units of meaning.This change itself is known as the process of conversion.   This process changing verb phrases into nouns and vice versa.   For example, if a secretary is ordered to print out a form, the resultant form is known as a printout.   If a company wants to take over another, they initiate a takeover.This can happen in the other direction as well a dirty room can be converted into the verb to dirty, as in â€Å"the boy dirt ied the room.†Ã‚   It can even occur from adjectives as well.   A person who is in a ballpark often, such as a player, may become a ballpark figure.   Thus a noun becomes an adjective (Yule, 2006). Again, it is easier to learn, understand and use a language if the meanings can be used in multiple situations.Anther popular method of creating words is through the use of acronyms.   These are word forms that result from the initial letters of a set of words.   A CD is the acronym for a compact disk.   A PIN is a personal identification number.   These words are constantly added as the result of different jargon such as that of business, international relations and education (Yule, 2006).   For example, NASA, INTEL, and RAM are specific to particular industries and would not exist if it were not for those industries.Finally, some words are created by combining two or more of the above techniques.   For example, English borrowed the word delicatessen from the German language and then clipped it to the Americanized deli.   The words snow and ball were compounded into the noun snowball and then converted to the verb – to snowball.   Adding the suffix –ish to the acronym formed from White Anglo Saxon Protestant results as WASPish (Yule, 2006).   All of these words now become an integral part of the language which people widely understand and use as part of their daily language.Beyond the mere creation, usage and understanding of words is the combination of words into sentences.   Many argue that words themselves would not be meaningful without the construct of a sentence to give it basic background.   Individuals generally communicate through sentences which are basically formed with a subject, verb, and a complete thought, as students are taught throughout school.   Thus, forming words into syntactical patterns and creating a context in which they are used is vital to understanding both written and spoken communication today.However, many linguists also argue that conversation can be understood in its reduced form based upon certain inherent techniques.   This enables individuals to understand conversation that is not composed of perfectly constructed sentences.   In this way, a person can understand a word as a sentence because they already understand the context of the meaning in which the word was spoken (Palmer, 1981).   Thus, sentences, too can be economized just as words can.Fragments of sentences that are closely linked in meaning can be combined in such a way that some parts of the sentence is omitted.   This is known as an elliptical formation.   One way that this happens is through analyzing both the surface structure and the deep structure of meaning.   The surface structure is a literal meaning of the sentence, while the deep structure is the figurative, implied, abstract meaning of the communication itself which may depend on former knowledge by the partners (Palmer, 1981) . Both structures are necessary to understand communication, but the deep structure may help the individual differentiate between various meanings in context.The two types of language features that are inherent in this process are prosodic and paralinguistic features.   Prosodic features deal with actual sounds of the language such as tone, stress, volume, rhythm etc.   Paralinguistic features include the visuals of language, such as the speaker’s facial expressions, gestures, etc (Palmer, 1981).   Thus, both the way the communication sounds and the visual cues of the speaker can contribute to a fuller understanding.Tone and stress is used by speakers to indicate which part of the sentence is to be given the most emphasis. This emphasis indicates the most important information of the system.   Speech acts can serve a variety of functions even while the same sentence is being uttered.   These purposes can be warnings, threats, promises, pleas, etc. and can change the meaning of any sentence.   Sentences can be insinuations which carry some inherent truthfulness in them.   The sentence/question â€Å"Do you still beat your wife?† insinuates that the subject has at one time been a wife-beater, which suggests an accusation which the speaker intends for the listeners to realize (Palmer, 1981).Other meanings are based on the relationships between the individuals.   Some conversation is meaningless and carries no specific information.   Other sentence meanings can be derived simply from its grammatical structure.   Finally, sentence meaning can be based on how the sentence is said.   Ultimately, the sentence that is truth-conditional is not concerned with grammar but with the meaning of the proposition of the sentence.   Is it based in truth or not?   For example, if someone is cited directly, that is considered more truthful than if he is cited indirectly, even though both may not be formally proven within the context of the p articular sentence (Palmer, 1981).   Ultimately, the ambiguities of language and the situations in which it exists, create the problems of interpretation which depend upon so much more than the mere words.The spoken language is far more complex than the written language.   Palmer (1981) gives four ways in which this is true.   First, human beings spoke long before they wrote.   Second, a child learns spoken language far earlier than he learns how to write.   Third, human beings speak for more during their daily lives than they write.   Finally, writing can be converted to speech without much loss; however, this process cannot happen the other way around (Palmer, 1981).The tone and stress of words was mentioned earlier as a way to decipher emphasis in spoken communication.   Combined with pitch, or the rise and fall of words, people can gain even more meaning from the exchange.   If a particular word of syllable is accented, the listened gains a particular set of mean ings which may be different if another word or syllable is accented.   This information unit (this tone group of pitch, accent, etc) counts more to the listener in terms of understanding the meaning than does the simple grammatical components of the sentence (Palmer, 1981).Rises in pitch are concerned with certain types of meanings, like indecision or questions, while falls in pitch are more concerned with statements.   Likewise, certain emotions can be expressed through intonation as well.   These meanings may vary from language to language (Palmer, 1981).The topic and comment of an utterance represents these differences.   The topic is basically the main informational unit of the sentence while the comment is the opinion or emotion attached to it.   These two units may, generally, be distinguishable from one another (Palmer, 1981).Word order is one way in which these distinctions are made.   The word at the beginning of the sentence generally indicates the topic of the sentence.   Manipulation of word order can indicate the topic and its emphasis (comment).   The example give in Palmer (1981) is â€Å"The man over there I do not like very much.†Ã‚   Similarly, new information in a sentence is usually given more toward the end of the sentence and is accompanied by a rise in pitch (Palmer, 1981).Thus the ordering of the words and the rise and fall of their pitch can give indication to the meaning.Other utterances are less a function of giving new information and more a function of naming an action.   These actions can be explicit, which literally name the act, and implicit, which do not.   Certain presuppositions are contained within implicit actions.   These actions may not be obviously named, but they are known because the listener is familiar with the context of the utterance.  Ã‚   This presupposition can be contained in other remarks as well, such as â€Å"John drank another beer,† which implies he has had at least on e drink.   The author asserts that it is difficult to make a distinction between what is explicitly stated and what is presupposed (Palmer, 1981).Finally, implications may be even more far removed from the explicit meaning of the words.   For example, if a person makes a statement â€Å"It’s hot in here,† he may be actually implying that he would like someone to turn on the air conditioner.   The conversation is reduced in that the individual does not have to fill in the intermediate information for the listener (Palmer, 1981).   A question of â€Å"Did you take out the garbage?† may be followed by â€Å"It isn’t Thursday† would have no meaning to anyone who didn’t know that the garbage man comes on Thursday.   However, a married couple would have the perfect understanding of this exchange because of their shared context.Spoken English and written English are composed of words, which have been produced from a variety of sources and through a variety of processes.   In addition, these words are arranged in such a way as to give them the power of meaning in context.   While written conversation is more in tune with grammatical constructions, spoken language also carries the nuances of tone, stress, pitch, volume and even implicit meanings.   Thus, meaning can be derived from words, sentences, sound and visual cues and even an implicit understanding of context.Word economy has created more words from current words while preserving the meanings.   This reduces the need for new words to be invented and aids in the process of understanding.   In addition, the same concept can be applied to sentences.   The original grammatical meaning of the sentence can be expressed by sound and visual cues from the speaker in many different ways.   As a result, the meanings may be multiple while the actual words that make up the sentence remain the same.   Clearly, the evolution of both written and spoken language is a dynamic force that will continue for all time.ReferencesPalmer, Frank R. Semantics. 2nd ed. Cambridge: Cambridge UP, 1981.Yule, George. The Study of Language. 3rd ed. Cambridge : Cambridge UP, 2006.

Easy Way to Learn Tax

C. S. Executive Tax Law Dec. 09 Solved Ans. 1 Qn. 1. (A) Choose the most appropriate answer from the given options in respect of the following having regard to the provisions of the relevant direct, tax laws (i) Income-tax in India is charged at the rate(s) prescribed by — (a) The Finance Act (b) The Income-tax Act (c) The Central Board of Direct Taxes (d) The Ministry of Finance Solution: (a)The Finance Act (ii) Under the Income-tax Act, 1961, depreciation on machinery is charged on — (a) Purchase price of the machinery (b) Market price of the machinery (c) Written down value of the machinery d) All of the above. Solution: (c) Written down Value of the machinery (iii) Income accruing in India in previous year is taxable for — (a) Resident (b) Not ordinarily resident (c) Non-resident (d) All of the above. Solution (d) All of the above (iv) Sandeep purchased a house for his residential purpose after taking a loan in January, 2007. During the previous year 2008-09, he paid interest on loan Rs, 1,67,000. While computing income from house property, the deduction is allowable to the extent of — (a) Rs. 30,000 (b) Rs, 1,00,000 (c) Rs. 1,67,000 (d) Rs. 1,50,000. Solution: (d) Rs. ,50,000 (v) Which of the following is an ‘asset' under section 2(ea) of the Wealth-tax Act, 1957 — (a) Equity shares in a company (b) Balance in provident fund (c) Motor car held as stock-in-trade – (d) Jewellery for personal use. Solution: (d) Jewellary for personal use (B) Re-write the following sentences after Filling-in the blank spaces with appropriate word(s)/figure(s) : (i) Deduction for bad debt is allowed to an assessee carrying on business in the year in which the debt is ________ as bad. (ii) Deduction available under section 80GG towards rent paid shall not exceed Rs. ______ per month. (iii) It is obligatory for an assessee to pay advance tax where the amount of tax payable is Rs. ________ or more. (iv) A belated return of income can be filed at any time before the expiry of ________ from the end of relevant assessment year. (v) Wealth-tax is levied on the net wealth of a person as on 31†³ March, this date is known as _______ date. Solution: (i) declared (ii) 2000 (iii) 5000 (iv) 1 year (v) Valuation date. (C) Rajan is an employee of a private limited company and gets the following emoluments during the previous year ended on 31sl March, 2009: Salary: Rs. 6,000; Salary in lieu of leave: Rs. 6,000; Entertainment allowance: Rs. 10,000; and Commission: Rs. 8,000. Rajan's son studies in a school which is owned and maintained by the company. The cost of education in a similar school in the locality is Rs. 22,000 per year, but the company charges Rs. 4,000 from Rajan. Salary of a domestic C. S. Executive Tax Law Dec. 09 Solved Ans. 2 servant provided to Rajan by the company is Rs. 6,000 and the same is paid by the company. The company purchases a computer on 1st April, 2008 for Rs. 50,000 which is given to Rajan for office and private use.The company purchases a refrigerator for Rs. 20,000 on 30th June, 2008 for personal use of Rajan. Rajan and the company both contribute Rs. 1. 2,000 towards recognised provident fund. Rajan deposits Rs. 40,000 towards public provident fund. Rajan earns Rs. 1,00,000 by way of rent from a vacant plot, of land. Compute the taxable income and tax liability of Rajan for the assessment year 2009-10. Solution (I) Income from salary Salary Salary in lieu of leave Entertainment allowance Commission Perquisites Domestic servant Computer RefrigeratorBenefit to cost of education (22,000- 4,000) Contribution to PF (in excess of 12%) Gross Salary (-) deduction U/S 16 Professional Tax Entertainment allowance Total Amount (II) Income from house Property Gross total Income (I + II) (-) Deduction U/S 80 C – 80 U U/S 80 C ( Contribution to PPF ) Total Income 96,000 6,000 10,000 8,000 6,000 NIL NIL 6,000 18,000 480 1,44,480 NIL NIL NIL 1,44,480 1,00,000 40000 2,04,480 Computation of tax liability Upto Rs. 1,50,000 Next 54,480 10% + 3% education cess Total tax liability NIL 5,448 Total Tax liability 5,448 163 5611 = Rs. 5610 QN. 2. A) From the following profit and loss account of Vinay for the year ended 31st March, 2009, compute his total income and tax liability for the assessment year : 1009-10 : Rs. Interest on capital Insurance Bad debts Depreciation Advance tax General expenses Advertisement Salary (including salary to Vinay Rs. 20,000) Interest on loan Net profit 12,000 2,000 30,000 34,000 25,000 12,000 5,000 Gross profit Brokerage Bad debts recovered (earlier allowed as deduction) Sundry receipts Interest on debentures (gross) [TDS Rs,4,120] 85,000 8,000 4,00,000 6,13,000 Additional information : i)The amount of depreciation allowable as per income-tax rules is Rs. 42,000. Rs. 5,10,000 30,000 15,000 18,000 40,000 6,13,000 C. S. Executive Tax Law Dec. 09 Solved Ans. (ii) General expenses include Rs. 5,000 given as contribution to a politic al party. (iii) Vinay pays Rs. 5,200 as premium on his own life insurance policy of Rs. 50, 000. (iv) Loan was obtained for payment of income-tax, 3 Solution (I) Income from business Net profit for the year Add: Expenses not allowed under Income tax act but debited to P & L A/C Intt. On capital Depreciation as per books of a/c Advance taxGeneral Expenses Salary to Vinay Intt on loan Less: Income not allowed but Credited to P& L a/c Intt. On debentures Depreciation as per Income tax Act Total Income (II) Income from Salary (III) Income from other sources Interest on debenture Gross total income [I + II + III ] Less: Deduction U/S 80C – 80U (i) Premium on life insurance policy (80C) (ii) Contribution to political party Sec (80 GGC ) Total Income Tax liability Upto Rs. 150,000 Next 1,50,000 Next 1,71,800 Rate NIL 10% 20% Rs. 12,000 34,000 25,000 5,000 20,000 8,000 40,000 42,000 Rs. 4,00,000 1,04,000 82,000 4,22,000 20,000 40,000 ,82,000 5,200 5,000 4,71,800 Computation of tax li ability Less: Advance tax Paid Less: TDS Add: 3 % education cess Total tax liability = 20850 NIL 15,000 34,360 49,360 25,000 4,120 20,240 607 20847 (B) Write short notes on any two of the following : (i) Taxation of zero coupon bonds (ii) Share of profit from partnership firm (iii) Exemption of income of newly established units in special economic zone. Solution (i) Transfer of zero coupon bond will be subject to capital gain tax: The profits arising on the transfer of such zero coupon bond shall be chargeable under the head â€Å"capital gains†.Further, section 2(42A) has been amended to provide that if such zero coupon bonds are held for not more than 12 months, such capital asset shall be treated as short-term capital asset and hence shall be subject to short-term capital gain. On the other hand, where these bonds are held for more than 12 months, such capital gain shall be treated as long-term capital gain. Taxability of long-term capital gain from zero coupon bond [Provi so to section 112 (1)] The long-term capital gain on zero coupon bonds shall be chargeable to tax at minimum of the following two: (a) 20% of long-term capital gain after indexation of cost of such bonds, or i) 10% of long-term capital gain before indexation of cost of such bonds, C. S. Executive Tax Law Dec. 09 Solved Ans. 4 Solution (ii) Share of profit – Section 10(2A) provides that in the case of a partner (including a minor admitted for the benefit of the firm) of a firm, his share in the total income of the firm shall be exempt from tax. Remuneration or interest- If condition of section 184 and section 40(6) are satisfied then interest, salary, bonus, commission or remuneration paid/ payable by the firm to partners is taxable in the hands of partners (to the extent these are allowed as deduction in the hands of the firm).The following points one should note — 1. Remuneration is not taxable under the head â€Å"Salaries†- Remuneration is not taxable in the hands of partners under section 15 under the head â€Å"Salaries† (Explanation 2 to section 15). It is taxable as business income. 2. Expenses are deductible under sections 30 to 37- Any expenditure incurred in order to earn salary/interest income can be claimed as a deduction under sections 30 to 37 from such income. For instance, if a artner borrows money to make his capital contribution to the firm and he has received interest on his capital contribution, the amount of such interest will be taxed under the head â€Å"Profits and gains of business or profession†, but the interest paid by him on the borrowed money will have to be allowed as a deduction. 3. Consequences when remuneration/interest is disallowed in firm's hands-if salary/ interest is disallowed in the hands of firm under section 40(b) and/ or section 184, then the same is not taxable in the hands of the partners.Likewise, if a part of salary/interest is not allowed as deduction in the hands of the firm, that part of salary/interest is not taxable in the hands of the partners. The cumulative impact of the aforesaid provision is that in the hands of partners the entire remuneration/ interest (excluding the amount disallowed in the assessment of partners ) is chargeable to tax. Solution (iii) The deduction under this section shall be allowed as under for a total period of 15 relevant assessment years. 1.For the first 5 consecutive assessment years 100% of the profits and gains derived from the export beginning with the assessment year relevant to of such articles or things or from services the previous year in which the unit begins to manufacture such articles or things or provide services 2. Next 5 consecutive assessment years 50% of such profits or gains 3. Next 5 consecutive assessment years So much of the amount not exceeding 50% of the profits as is debited to profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to Special E conomic ZoneReinvestment Reserve Account to be created and utilised for the purpose of the business of the assessee in the manner laid down in sub-section (2) below. (c) State, with reasons in brief, whether the following statements are correct or incorrect: (i) Unabsorbed depreciation of any year can be carried forward for set-off for an unlimited period of time. (ii) An individual is not liable to pay fringe benefit tax. ? (iii) The entire amount of winning from lotteries is taxable at a special rate of income-tax. (iv) Income of minor child is included in the income of his parents under the Income-tax Act, 1961 in all cases. v) When the prize is given partly in cash and partly in kind, income-tax will be deducted from cash only. Solution (i) True : Unabsorbed depreciation of any year can be carried forward for set off for an unlimited period of time. (ii) True: Individual is not liable to fringe benefit tax. (iii) True: The entire amount of winning from lotteries is taxable at th e rate of 30%. (iv) False: Income of minor child is not included in the income of his parents in all cases. Any income of minor child U/S 80U, manual work done and in case of activity involved special skills are not clubbed in the hands of parents. v) False: When the prize is given partly in cash and partly in kind, Income tax is deducted from both cash and kind. Qn. 3. (A) Distinguish between any three of the following: (i) Gross total income' and ‘total income'. (ii) Recognised provident fund' and ‘statutory provident fund'. (iii) ‘Compulsory best judgment assessment' and ‘discretionary best judgment assessment', (iv) ‘Exemptions' and ‘deductions'. C. S. Executive Tax Law Dec. 09 Solved Ans. 5 Solution (i) Gross Total Income: As per section 14, all income shall, for purposes of Income-tax and computation of total income, be classified under the following heads of income: i) Salaries, (ii) Income from House Property, (iii) Profits and Gains of Bu siness or Profession, (iv) Capital Gains, (v) Income from Other Sources. Aggregate of incomes computed under the above 5 heads, after applying clubbing provisions and making adjustments of set off and carry forward of losses, is known as Gross Total Income (GTI). [Section 80B(5)] Total Income: The total income of an assessee is computed by deducting from the gross total income, all deductions permissible under Chapter VIA of the Income-tax Act i. e. , deductions under sections 80C to 8OU. Solution (ii)Particulars SPf RPF 1. Employee's/ assessees' Deduction u/s 80C is available from Deduction u/s 80C is available from contribution gross total income subject to the gross total income subject to the limit limit specified therein specified therein 2. Employer's contribution Fully exempt from tax Exempt upto12% of salary. Amount in excess of 12% is included in gross salary. 3. Interest on Provident Fully exempt from tax Fund Exempt u/s 10 upto 9. 5% p. a. Interest credited in excess of 9 . 5% p. a. is included in gross salary 4. Repayment of lump sum Fully exempt u/s 10(11) mount on retirement/ resignation/ termination Exempt subject to certain conditions. See Note 2. Solution (iii) Best Judgment Assessment: In a best judgment assessment the assessing officer should really base the assessment on his best judgement i. e. he must not act dishonestly or vindictively or capriciously. There are two types of judgement assessment: 1. Compulsory best judgement assessment made by the assessing officer in cases of non-co-operation on the part of the Assessee or when the Assessee is in default as regards supplying informations. . Discretionary best judgement assessment is done even in cases where the assessing officer is not satisfied about the correctness or the completeness of the accounts of the Assessee or where no method of accounting has been regularly and consistently employed by the Assessee. Solution(iv) Exemption – All receipts which give rise to income, are t axable under the Income tax -Act unless it is specifically provided that it does not form part of total income such incomes which do not form party exempt from tax. As per sec. 0 to 13A, certain incomes are either totally exempt from tax or exempt upto a certain limit therefore, there incomes to the extent there are exempt, are not included in the total income of an assessee for computation of his total income. Deduction:- The aggregate of income computed under each head, after giving effect to the provisions for clubbing of income and set off of loss is â€Å"Gross total Income† . In computing the total income of an assessee certain deductions are permissible under sec. 80C to 80U from â€Å"Gross total Income†.But Deductions cannot exceed Gross total Income and to get deduction, It is Assessee’s duty to place relevant material before the said authority along with Return. QN. 3(B) What is the time-limit for deposit of ‘tax deducted at source' (TDS) to the credit of Central Government? Solution C. S. Executive Tax Law Dec. 09 Solved Ans. TIME LIMIT FOR DEPOSITE OF TDS TO THE CREDIT OF CG 6 Section under which deduction is made Person (1) Sum deducted under sections 193, 194A, 194C, 194D, 194E, 194G, 194H. 194-1, 194J. 195. 196A to 196D (A) Tax deducted by or on behalf of the Government (B) Tax deducted by or behalf of any ther person: Same day of deduction: (i) if the amount is credited to the account of the payee as on the date upto which the account of such persons are made (ii) in any other case within 2 months, of the expiration of the month in which that date falls. (2) Sum deducted under sections 192. 194, 194B, 194BB, 194EE, 194F and 194K Time limit of de Central Government (A) Tax deducted by or on behalf of Government (B) Tax deducted by or on behalf of other person within one week for the last day of the month in which the deduction is made Same day of deduction Within one week from the last day of the month in which educti on made, Qn. 4. (A) What are the special provisions for computing profits and gains of retail business ? Solution: Section 44AF – Special provisions for computing profits and gains of retail business : (1) Notwithstanding anything to the contrary contained in Sections 28 to 43C, in the case of an assessee engaged in retail trade in any goods or merchandise, a sum equal to 5% of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such usiness chargeable to tax under the head â€Å"Profits and gains of business or profession†: Provided that nothing contained in this sub-section shall apply in exceeds an amount of 40 lakhs rupees in the previous year. respect of an assessee whose total turnover (2) Any deduction allowable under the provisions of sections 30 to 38 shall be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.Provided that where the assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section(1) subject to the conditions and limits specified in Section 40(b). (3) The written down value of any asset used for the purposes of the business referred to in sub-section(1) shall be deemed to have been calculated as if the assessee had claimed and had been acutually allowed the deduction in respect of the depreciation for each of the relevant assessment years. 4) The provisions of sections 44AA and 44AB shall not apply in so far as they relate to the business referred to in sub-section (1) and in computing the monetary limits under those sections, the total turnover or the income from the said business shall be excluded. (5) Notwithstanding anything contained in the foregoing provisions of this section, an assessee may claim lower profits and gains t han the profits and gains specified in sub-section (1), if the keeps and maintains such books of accounts and other documents as required u/s 44AA and gets his accounts audited and furnishes a report of such audit as required u/s 44AB. B) What are the provisions relating to clubbing of income arising to spouse from the assets transferred ? Solution: Income from assets transferred to the spouse [Section 64(l)(iv)]: In computing the total income of an individual, all such income as arises directly or indirectly, subject to the provisions of section 27(i) (i. e. deemed owner), to the spouse of such individual from assets (other than house property) transferred directly or indirectly to the spouse of such individual otherwise than for adequate consideration or in connection with an agreement to live apart shall be included. C. S. Executive Tax Law Dec. 9 Solved Ans. 7 As per this provision, if an individual transfers any asset other than house property to his/her spouse, the income from such an asset shall be included in the total income of the transferor. This provision is not applicable to house property because in that case transferor is deemed to be the owner of the house property and the annual value of the property is taxed in the hands of the transferor as per section. 27. The income from the transferred assets shall not be clubbed in the following cases: (i) If the transfer is for adequate consideration; (II) the transfer is under an agreement to live apart; iii) if the relationship of husband and wife does not exist, either at the time of transfer of such asset or at the time of accrual of the income. (C) Alka is carrying on textile business. Compute her net wealth from the following — details of her assets and also determine her wealth-tax liability for the assessment year 2009-10 : (i) Land in rural area (it lies within 8 kms. from a municipality having a population of more than 10,000; land was purchased in 1990; construction is permissible. (ii ) Land in urban area (held as stock-in-trade since 2001 ) (iii) Motor cars (iv) Aircraft for use of employees and auditors (v) Bank balance vi) Guest house situated in rural area (vii) Residential flats of identical size provided to employees near the factory (salary of employees does not exceed Us. 5. 00,000 in a year) (viii) Residential house given to general manager (whose annual salary is Rs. 15,00,000) (ix) Cash in hand as per cash book (x)Two residential houses; let-out on rent (value of each being Rs. 22 lakh; one is letout for 250 days during the financial year 2008-09). Market Value 48,00,000 35,50,000 8. 60,000 1,25,00,000 12. 00,000 10,50,000 30. 00,000 25,00,000 2,00,000 Alka has taken a loan of Rs. 24,00,000 for acquiring the aircraft; Rs. 5,50. 000 for and; and Rs. ,00,000 for residential house given to general manager Solution: Computation of not wealth of Alka for the Assessment year 2009-10 i. Land in Rural Area (Lies within 8 Kms from a Municipality) 48,00,000 ii. Land in Urban Area (held as SIT) –iii. Motor car 8,60,000 iv. Aircraft for use of employees and auditors 1,25,00,000 v. Bank Balance –vi. Guest house situated in Rural Area 10,50,000 vii. Residential flats to employees (salary does not exceed Rs. 500000) -viii. Residential house given to general manager 25,00,000 ix. Cash in hand as per books –x. Two residential house let out on rent but one house is let out for less than 300 days. 2,00,000 Gross wealth 2,39,10,000 Less: Loan taken for Acquisition of air craft 24,00,000 Urban land —Residential house to General Manager 4,00,000 28,00,000 Total Tax [ i. p. 1% on the amount in excess of Rs. 15,00,000 ] 19610000 x 1% 2,11,10,000 1,96,100 Qn. 5. (A) Anurag sells a plot of land on 8th July, 2008 for Rs. 40 lakh and paid brokerage on its sale @1%. He purchased this plot on 19th December, 1986 for Rs. 4. 20,000. On 1st February, 2009, he purchased a residential house for Rs. 15 lakh. He owns one residential house an 8th July, 2008. The cost inflation index for 1986-87 was 140 and for 2008-09 is 582.Find out the amount of capital gains chargeable to tax for the assessment, year 2009-10. Suppose Anurag sells the new residential house before 1st February. 2012, what will be the taxable amount of capital gains and C. S. Executive Tax Law Dec. 09 Solved Ans. 8 in which year it will be charged to tax? If Anurag purchases any other residential house before 1st February, 2011, what will be the taxable amount of capital gains and in which year it will be charged to tax ? Solution: (A) Computation of capital gains chargeable to tax for A/Y 2009-10 Sales Consideration Less: Expenses an transfer [brokerage @ 1%]Less: Indexed cost of acquision 420000 x 582 —140 40,00,000 4,00,000 17,46,000 18,54,000 15,00,000 LTCG 3,54,000 If Anurag sells the new residential house before 1st Feb 2012 the taxable amount is whole sales consideration and it is taxable in A/Y 2013 -14 If Anurag purchase any other res idential house before 1st Feb 2011, than taxability is not arise in A/Y 2012 -13. (-) Exemption U/S 54 (B) Danny has the following investments in the previous year ended 31st March, 2009: (i) Rs. 7,160 received as interest on securities of Karnataka government. (ii) Rs. 9,000 received as interest on securities of a listed paper manufacturing company. iii) Rs. 7,200 received as interest on the unlisted securities of a sugar company. (iv) Rs. 30,000. 11% securities (unlisted) of a textile company. (v) Rs. 20,000, 10% Tamil Nadu government loan, (vi) Rs. 50,000, 13. 5% listed debentures of Dolly Ltd. Interest on ail securities is payable on 30lh June, and, 31†³ December. The bank charges 1/5% commission on net realisation of interest as collection charges. Danny also received Its. 15, 000 as director's fee from a company. His other incomes are — winnings from horse race: Rs. 25,000 (gross); and interest on post office savings bank account : Rs. 6,000.Find out taxable income of Danny from other sources for the assessment year 2009-10. Solution: Computation of Income from other sources for the A/Y 2009 -10 Director Fees Winning from horse race Interest from post office saving bank account 11% securities (unlisted ) of a textile company 10% Tamil nadu Govt. loan 13. 5% listed debentures of Dolly ltd. Intt. On securities of Karnataka Govt. Intt. On a listed paper mfg. Co. Intt. On the unlisted securities of a sugar company Less: Deduction Bank Charges 1. 5% Total Income Amount 15,000 25,000 6,000 3,300 2,000 6,750 7,160 9,000 7,200 81410 1,221 80,189 C) â€Å"Loss under any head of income for any assessment, year can be set-off against the income from other heads of income but when it has to be carried forward for being set-off, it can only be set-off from income under the same head. † Explain. Solution: Where in respect of any Assessment year, if after setting off losses against income under the same head the net result of the computation under an y head of income, other than ‘capital gains’ is a loss, the assess shall be entitled to have the amount of such a loss set off against his income, if any, available, for that assessment year under any other head.But If the losses could not be set off under the same head or under different heads in the same assessment year, such losses are allowed to be carried forward to be claimed as set off from the income of the subsequent Assessment Year for eg;- A loss under the head house property, if could not be set off or was not wholly set off in the same assessment year, will be allowed for be carry forward and set off only under the head Income from house property similarly Business losses other speculation business can be carry forward and set off under the head PGBP. C. S. Executive Tax Law Dec. 9 Solved Ans. 9 Where in respect of any assessment year, the net result of the computation under the head â€Å"Capital Gains† is a loss to asseessee, whether short term or long term. Such loss shall be separately carried forward, further such carried forward short term capital loss can be set off in subsequent assessment year from income under the head capital gains, whether short term or long term, but brought forward long term capital loss shall be allowed to be set off only from long term capital gain. QN. 6 (A) Rohit is the owner of a house property, its municipal valuation. s Rs. 80,000. It has been let-out for Rs. 1,20,000 per annum. The local taxes payable by the owner amount to Rs. 16,000, but as per agreement between the tenant and the landlord, the tenant has paid the amount direct to the municipality. The landlord, however, bears the following expenses on tenant's amenities: Rs. Extension of water connection Water charges Lift maintenance Salary of gardener Lighting of Stairs Maintenance of swimming pool The landlord claims the following deductions : Repairs and collection charges Land revenue paid 3,000 1,500 1,500 1,800 1,200 750 7,500 1, 500Compute the taxable income of Rohit from the house property for the assessment year 2009-10. Solution: Computation of Income from House Property of Rohit. Actual Rent Value Less: Expenses net by Rohit an amenities provided to the tenant’s Water charges Lift Maintenance Salary of gardener Lighting of stairs Maintenance of Swimming pool Extension of water connection Annual Rent Net Annual value ( Municipal rent value Rs. 80,000 or Rs. 1,10,250 which ever is higher ) Less: Statutory deduction @ 30% Taxable income from House Property 1,20,000 1,500 1,500 1,800 1,200 750 3,000 9,750 1,10,250 1,10,250 33,075 77,175 B) What are ‘capital assets' ? What items are not included in capital assets ? Solution: Capital asset means property of any kind held by the assessee, whether or not connected with his business or profession, but does not include: (i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession as these will be taxe d under the head â€Å"profits and gains of business or profession†; (ii) personal effects, that is to say, movable property (including wearing apparel and furniture), held for personal use by the assessee or any member of his family dependent on him.However, the following assets shall not be treated as personal effects though these assets are moveable and may be held for personal use: (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. (iii) agricultural land in India, which is not an urban agricultural land. In other words, it must be a rural agricultural land; (iv) 6. 5% Gold Bonds, 1977, 7% Gold Bonds, 1980 or National Defence Gold Bonds, 1980 issued by the Central Government; (v) Special Bearer Bonds, 1991, issued by the Central Government;C. S. Executive Tax Law Dec. 09 Solved Ans. (vi) Gold Deposit Bonds issued under the Gold Deposit Scheme 1999. 10 QN. 7. Attempt any four of the following : (a) â€Å"Ser vice tax is generally payable by the service provider, but there are certain situations in which service receiver is liable to pay service tax. † Explain. (b) What are the due dates for payment of service tax by different assessees? (c) Indicate the amount of interest payable for late payment of service tax and the amount of penalty payable for late filing of return of service tax. d) Explain the provisions regarding submission of return under service tax. (e) What is the basis of calculation of service tax payable? Explain the provisions governing valuation of taxable services. (f) Choose the most appropriate answer from the given options in respect of the following; (i) What would be the value of taxable service, if gross amount charged by a service provider on 5th March, 2009 is Rs. 9,000 — (a) Rs. 8,010 (b) Rs. 8,160 (c) Rs. 9,000 (d) Rs. 8,100. (ii) If Raj has collected any amount of service tax from Brij which is not required to be collected.Raj shall pay the amou nt so collected to — (a) Brij (b) The Central Government (c) Keep it with himself (d) None of the above. (iii) E-payment of service tax is compulsory in the case of an assessee who had paid service tax in the preceding financial year equal to at least — (a) Rs. 10 lakh (b) Rs. 40 lakh (c) â€Å"Rs. 50 lakh (d) Rs. 1 crore. (iv) Upto what amount, the value of all taxable services provided by a service provider during a financial year is exempt from payment of service tax — (a) Rs. 4 lakh (b) Rs. 8 lakh (c) Rs. 10 lakh (d) Rs. l2 lakh. v) If a corporate assessee lias paid Rs. 5,000 as excess service lax during; the previous half-year ending period, this excess amount can be adjusted against its subsequent tax liability — (a) Equally every month (b) Equally per quarter (c) In one lump-sum (d) Equally on half-yearly basis, Solution (a) The general principle is that the person providing a taxable service is liable to pay service tax, but in certain specific s ituations, as Government may notify, persons other than the person providing the taxable service are liable for payment of service tax. S. No. Services Persons liable for payment 1 Telecommunication Provider of service General Insurance Insurer or reinsurer 3 4 5 Insurance Auxiliary Insurance Agent Any service provided from outside India and Receiver of service in India received in India Goods transport agency (GTA) Person making payment of freight i. e. receiver of the service (if consignor or consignee of goods are in organized sector), or GTA i. e. provider of service (in other cases) C. S. Executive Tax Law Dec. 09 Solved Ans. Sponsorship services Receiver of services Business auxiliary services of distribution of mutual Receiver of service in India fund Any other taxable service Service provider 6 7 8 11 B) There have been frequent changes in the due dates for payment of service tax. The current law pertaining to due dates for depositing the service tax are summarized in the ta ble given below: Category of Assessee Periodicity of Payment Period Due Date Individuals, proprietary Quarterly firms or partnership firms April to June 5th (6th in case of eJuly to September paymentofthe month October to December immediately following the said quarter January to March 3 1st March Others All months except March 5th (6th in case of e-payment) of the month immediately , following the calendar month MonthlyMarch 3 1st March (C) The amount of interest payable for late payment of service tax is 13%. Return of service tax has to be filed within the prescribed period. A late fee has to be paid along with the filing of return of service tax if the same is filed late. Where the return is furnished late the person liable to furnish return is liable to pay to the Central Government a penalty, on the basis of period of delay subject to maximum of Rs. 2,000. Period of delay from due date Penalty to be paid Upto 1 5 days 16 to 30 days Rs. 500 Rs. 1,000 After 30 days Rs. 1,000 + 1 00 per day in excess of 30 days pto maximum of Rs. 2,000 (D) Every person liable to pay service tax shall himself assess the tax due on the services provided by him and furnish a return in Form ST-3 (in triplicate) on a half-yearly basis. ‘Half year' means 1st April to 30th September and 1st October to 31st March of financial year. Without prejudice to the provisions of section 70, the Board may, by notification in he Official Gazette, frame a Scheme for the purposes of enabling any person or class of persons to prepare and furnish a return under section 70, and authorise a Service Tax Return Preparer to act as such under the Scheme.The return has to be submitted by the 25th of the month following the particular half-year. Even a NIL return has to be filed if the assessee has not rendered any taxable service during a particular half year. There are no provisions under the Act which enable the filing of revised returns. (E) As per section 66, service tax is to be charged @ 12% of the value of taxable service proved or to be provided. Hence, we have to determine the value of such taxable services so as to pay service tax. As per section 67, the valuation of taxable service shall be determined as under:— SituationValuation (i) where the provision of service is for a gross amount charged by the service provider for such consideration in money service provided or to be provided by him (ii) where the provision of service is for a such amount in money, with the addition of service tax consideration not wholly or partly consisting charged, as is equivalent to the consideration. In other of money words, it should be value of similar services provided to third party. If similar service is not provided to third party, it should be market value as determined by the assessee ut it cannot be lower than the cost of provision of same. (iii) C. S. Executive Tax Law Dec. 09 Solved Ans. 12 where the provision of service is for a the amount as may be determined in th e prescribed consideration which is not ascertainable manner (F) (i) (b) 8160 (ii) (b) The central Government (iii) (c) Rs. 50 lakhs (iv) (c) Rs. 10 lakhs (v) (c) In one Lump-sum PART—C QN. 8 Attempt, any four of the following : (i) How would you take input tax credit when goods purchased are transferred by the dealer to his branch in any other State ? ii) A registered dealer can set-off the amount of input tax against the amount of his output tax. † Explain. (iii) Explain the procedure of registration under â€Å"value added tax' (VAT). (iv) In what purchases input, tax credit is not allowed under VAT ? (v) What are the deficiencies in the design of VAT that has been adopted by the States in India? Give your opinion (vi) â€Å"Tax credit or invoice method has been adopted universally because; of the inherent advantages in the credit method of calculating tax liability? Explain, Solution (i) Stock/Branch transfers i. . transfer of stock from head office to the branch or vice-versa (viz. Inter-State transfers) do not involve sale and, therefore, they cannot be subjected to sales-tax/VAT. However, if (1) inputs are used in the manufacture of finished goods, which are stock/branch transferred; or (2) goods purchased for re-sale are stock/branch transferred, then, tax paid on such inputs/goods will be available as input tax credit subject to retention of 4% out of such tax by the State Governments. (ii) For claiming input tax credit dealer must be a registered dealer.A registered dealer can only set off the amount of input tax against the amount of his output tax. Further a registered dealer must purchase goods from another registered dealer who has not opted for composition scheme to claim credit of input tax. Apart from registration requirement the registered dealer must keep supporting evidences like VAT invoice of the purchases. (iii) Any dealer whose gross annual turnover is above Rs. 5 lakh will be liable to get compulsory registration. An exi sting dealer will be automatically registered under the VAT Act.A dealer registered under the VAT Acts is called a registered dealer. Any other dealer may get himself voluntarily registered. On such a dealer Commissioner may impose any conditions as he thinks fit. If dealer fails to get registration he may be registered compulsorily by the commissioner. Time limit Application for registration must be made within 30 days from the date of liability to get registered. Whom to apply Application for registration must be made to the VAT Commissioner. Exemption from registration A small dealer with gross annual turnover not exceeding Rs. lakhs does not require registration. Further States may increase the above limit for the small dealers to Rs. 10 lakhs. Penalty If a dealer who is liable to get himself registered, fails to do so then he shall be liable to penalty and he shall not be eligible for input tax credit related to the period prior to the compulsory ‘registration. Cancellati on of registration In the following cases registration can be cancelled: (i) In case of discontinuance of business; or (ii) In case of sale or disposal of business; or (iii) In case of shifting or transfer of business to a new state; or (iv)Annual turnover of the dealer falls below the specified amount. (iv) Purchase in which input tax credit is not allowed under VAT :i) purchases from unregistered dealer. ii) iii) iv) v) vi) vii) viii) C. S. Executive Tax Law Dec. 09 Solved Ans. Purchase from registered dealer who opted for composition scheme. Purchase of goods as may be notified by the state Government. Purchase of goods where invoice does not show the amount of tax separately. Purchase of goods, which are being utilized in the manufacture of exempted goods. Goods imported from outside the territory of India.Inter state purchases. Purchase of goods used for personal use/ consumption or provided free of cheque us gifts. 13 (v) Deficiencies in the design of VAT that has been adopted by the States in India are as under : (1) Detailed records even by small traders : In order to ensure genuine availment of credit, VAT system requires maintenance of detailed accounting records even by all dealers. The small traders/firms find it difficult to do so since the accounting cost is higher than the benefit gained by them by marinating such records. Hence, they object to the VAT system. 2) Problems due to different VAT rates, exemptions, concessions and composition schemes : The advantages of VAT can be achieved only if there is single rate of VAT without any exemptions, concessions and/or composition schemes. The presence of different VAT rates, exemptions, concessions and/or composition schemes distorts the flow of audit trail introduced by VAT system and may result in cascading effect of taxation. (Note : Composition schemes provide for lumpsum payment of VAT at a lower rate on the total turnover, in full discharge of VAT liability, without any input tax credit. (3) Ma tching Requirements v. Different rates of VAT : Due to varying fiscal and social needs, there are varying VAT rates in India. The presence of different VAT rates requires matching of purchases and sales, which is not only difficult but impractical as well. However, if matching requirement is waived off, then, there will be scope for tax evasion by showing higher sales of goods bearing lower rate and lower sales of goods bearing higher rate. (4) Increase in investment and inflation : As compared to single-point taxation- at the time of last sale, VAT equires payment of tax at each stage of production/distribution. Since there may be time-gap in availment of credit on inputs and utilization of such credit against payment of VAT on sales, the dealers will have to carry tax paid stock, which would mean higher investment in stocks/working capital. This would increase interest cost and would increase the prices, thereby, causing inflation. However, this criticism is not fully correct. Ava ilability of credit/set-off of tax paid on inputs reduces cost of production and ultimately the sale price, thereby, putting a check over inflation.The price reduction is more than price increase due to interest cost. Thus, VAT is not inflationary in nature. (5) Non-integration of State VAT with Central VAT : Until the State VAT gets integrated with Central VAT and Central Sales Tax, the purchases from other states cannot be put at par with purchases from within the Stage because tax on inter-state purchases (i. e. CST) is not available as credit/set-off while tax on intra-state purchases (i. e. VAT) is available as credit/set-off. Thus, VAT system doesn't rule out cascading effect and the neutrality as to source of purchases remains confined to within the State. vi) Tax credit or invoice method has been adopted universally because; of the inherent advantages in the credit method of calculating tax liability which are (i) Government gets the tax on ultimate sale price to consumer i. e. the tax paid by the consumer gets into Government Exchequer. The Revenue is collected at various stages on the amount of value addition made at the respective stages. Thus, there is no revenue leakage. (ii) This method checks evasion of tax. In order to avail credit of tax paid on purchases, the dealer will have to maintain purchase invoices.If the purchase invoices are not maintained, no credit will be available and the dealer will have to pay tax on the total sales value, thereby, leading to higher sale price or lower profits. A dealer not maintaining purchase invoices will loose either way. Thus, the possibility of tax evasion is minimum. (iii) If the profit margin is kept at constant level, then the credit/set-off provided under this method would eliminate cascading effect of taxation and would result in reduction of ultimate sale price. Thus, the industry and the trade would benefit.