Statutory payments, whom to consult and how

S. R. BALACHANDRAN

PAYMENTS: Special attention is drawn regarding settlement of statutory dues which include payments to the Department of Inland Revenue, Employees' Provident Fund and Trust Fund etc. The related duties of the Officer responsible are as follows:

* Computation of dues at appropriate rates and payment on time;

* Submission of Monthly, Quarterly and Annual returns to the respective Departments;

* Clarifications should be submitted to the Departments as and when queries are raised;

* Details should be submitted when queried by Departments such as Department of Inland Revenue, Department of Revenue Provincial Council etc;

* Keep records for the specified period;

The statutory payments due are:

1. Employees Provident Fund,

2. Employees Trust Fund

3. PAYE and SRL

4. Stamp Duty on payments

5. Stamp Duty on receipts

6. Economic Service Charge

7. VAT

8. Turnover Tax - Provincial Council

9. Income Tax and SRL

10. Withholding Tax

11. Dividend Tax

It could be noted that all these payments could be made with the minimum number of documents and without much effort. The method is as follows:

* Examine the wages sheet and check the total employees EPF contributions (ie: 8%);

* Check the company's contribution at the appropriate rate (ie: 12%);

* Transfer the total 20% to the EPF dues account and settle accordingly;

* 3% of the wages liable for EPF has to be taken for Trust Fund payment;

* Add non cash benefit to the wages and compute PAYE and SRL (ie: 1% of PAYE)

* Check the stamp duty at the appropriate rate on the gross wages;

It could be observed that payments from 1-4 could be computed with one set of documents ie: Wages Sheet.

* Obtain a statement of turnover analysed according to VAT rate - 0, 15% and 20%;

* Compute the VAT on the basis of the above statement and settle;

* Remove the sale of capital assets from the VAT statement and add exempt and excluded turnover for the computation of ESC at the appropriate rate;

* Remove the sale of capital assets, manufactured turnover and service turnover from the VAT statement. Compute the VAT thereon and add adjusted VAT turnover together with excluded and exempt turnover for computation of Turnover Tax at the appropriate rate;

It could be observe that VAT, Economic Service Charge and Turnover Tax could be prepared from one analysed turnover statement.

Income Tax could be computed by obtaining advice from your tax consultant. SRL is computed at the rate of 1% on the gross tax. ESC paid for the previous quarter be deducted for settlement of the balance tax.

Withholding Tax should be settled monthly based on taxes withheld from payments for services as per register maintained.

Dividend Tax could be computed from the Dividend Sheet under total tax deductions and be settled within one month from the date of payment.

Therefore, it will be observed that with minimum documents all statutory dues could be settled satisfactorily.

For a business establishment to discharge the statutory responsibilities, one should adopt the following procedure:

* Appoint a person preferably with qualifications and experience and make him be in charge and responsible for the settlements;

* He should be trained by sending for seminars on taxation, labour relations etc;

* Statutory dues should be computed as early as possible without waiting for the last date;

* The information should be kept in the respective files with copies of Returns filed;

* This will ensure that the payments are made on time though the Accountant is not available due to sudden illness/leave etc.

* Following the correct procedure on a timely manner would save penalties.