COMPLIANCE UNDER PROFESSION TAX (WEST BENGAL)-IMPORTANT FOR START-UP

Profession Tax is a tax levied on a person engaged in any profession, trade, calling and employment in West Bengal. The West Bengal State Legislature enacted the “West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979” in exercise of the power conferred by the Article 276 of the Constitution of India (under Entry No. 60 of the “State List” relating to taxes on professions, trades, callings and employments). The Act came into effect on and from 1-4-1979.

 Those who are liable to pay Profession Tax under the act may be divided into two categories:

i) Persons* engaged in professions, trades, callings and employments

ii) Employer** (Government, Public and Private Sectors who disburse salary/wages to the employees)

PERSON

Person means any person who is engaged in any profession, trade and calling or employment in West Bengal and include (i) a Hindu Undivided Family, Firm, Company, Corporation or other Corporate body, any Society, Club or Association; & (ii) every branch or office of such firm, company, corporation or other corporate body, any society, club or association, so engaged, but does not include any person who earns wages on a casual basis on being employed for a period not exceeding 180 days in a year.

EMPLOYER

Employer means the person or the officer who is responsible for disbursement of salary or wages, and includes the head of the office or any establishment as well as the manager or agent of the employer.

Profession Tax is payable at the rates specified in the Profession Tax Schedule. For Tax Schedule Click Here

http://wbprofessiontax.gov.in/professiontax_adm/writereaddata/upload/schedules/2016-08-22-161823Ptax-Schedule-New_(w.e.f._1-4-2014).pdf

* A Person requires Certificate of Enrolment, annual payment of tax, but NOT filing of any Return

** An Employer requires Certificate of Registration, monthly payment of tax and filing of annual Return

ENROLLMENT UNDER WB PROFESSIONAL TAX

Every person who is covered by entry no. 2 to 4 of the “Schedule” appended to the Act is required to obtain an Enrolment Certificate within 90 days from the date of liability to pay tax. A person liable to pay tax shall apply for enrolment on-line through PT_Enrolment module. Where an applicant has more than one branch or office or place of work in West Bengal, he may, at his option, make a single application for the principal & the branches/offices. In case a person is covered by more than one entry of the Schedule, the higher/highest rate of tax specified under those entries shall be applicable.

PENALTY FOR NON-COMPLIANCE:

 If a person wilfully fails to apply for enrolment within 90 days from the date of liability, penalty of Rs.100 for delay of each English calendar month or part thereof may be imposed. In addition to this, there remains the provision of punishment with simple imprisonment with or without fine for the said default.

REGISTRATION UNDER WB PROFESSIONAL TAX

Every employer is liable to deduct profession tax from the salary or wages payable to his employee(s), as per the slab mentioned in Serial No.1 of the Schedule. Such employer (not being an officer of Government) is required to apply and secure a Certificate of Registration. An employer who is liable to pay tax shall apply for registration on-line through PT_Registration module. The application is to be made within 90 days from the date of liability. An employer having more than one place of work within the jurisdiction of different authorities shall make separate application for registration. However, the Commissioner of Profession Tax may allow an application for single Registration for the whole of West Bengal.

PENALTY FOR NON-COMPLIANCE:

If an employer wilfully fails to apply for registration within 90 days from the date of liability, penalty of Rs. 500 for delay of each English calendar month or part thereof may be imposed. In addition to this, failure to apply for registration is an offence punishable with simple imprisonment with or without fine.

DETERMINATION OF TAX

If an enrolled person fails to pay due tax or pay less than the amount actually payable by him, the concerned Deputy Commissioner / Profession Tax Officer shall determine the tax payable by him after service of notice in Form-X. If any person fails to get himself enrolled even after being liable to pay tax, the concerned Deputy Commissioner / Profession Tax Officer is to determine the tax payable by him after service of notice in Form-XII. However, with effect from 01-04-2005, determination of tax of both un-enrolled and enrolled persons is limited to three years from the end of any year or period for which such determination is to be made.

 PROFESSIONAL TAX ON SALARY AND WAGES:

Employees earning monthly salary or wages above 10,000/- have to pay Professional tax.

Schedule for Salaried Persons:

Upto 10,000/- NIL*
Above Rs. 10,000 but not exceeding Rs. 15,000 Rs.110 per month
Above Rs. 15,000 but not exceeding Rs. 25,000 Rs.130 per month
Above Rs.25,000 but not exceeding Rs.40,000 Rs.150 per month
 Above Rs.40,000 Rs.200 per month

*Tax rate reduced to ‘Nil’, from Rs 90/- p.m., with effect from 1-8-2016 vide Notification No. 682-L dt.28th July, 2016 read with Notification No. 1197-FT dt.16th August, 2016.

Salary and wages shall include Pay, Dearness Allowance and any other amount paid by way of allowance, all remunerations received on regular basis whether payable in cash or kind; honorarium, perquisites and profit in lieu of salary as defined in Section-17 of the Income Tax Act, 1961; encashment of leave amount (excluding payable on retirement or on death of the employee); subsistence allowance, leave concessional pay.

Salary and Wage shall not include: Medical reimbursement, traveling allowance, reimbursement of conveyance charges, stipend paid to trainee, salary paid to apprentice under Apprentices Act, leave travel assistance payment, statutory Bonus, gratuity, lay of compensation and ex-gratia payment. Pension granted to an employee is not salary and hence pensioner are not liable to pay Profession Tax on pension.

PROFESSIONAL TAX FOR COMPANY:

Rate of Professional Tax for Companies registered under the Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013): Rs. 2500/- Per annum

PAYMENTS PROFESSIONAL TAX

Profession Tax can only be paid online through “GRIPS” (web-portal of the Finance Department, Government of West Bengal). Profession Tax is required to be paid by the enrolled persons on or before 31st July of each financial year. For registered employers, profession tax is required to be paid monthly. If an employer or an enrolled / un-enrolled person fails to pay tax, within the due time, he shall be liable to pay a simple interest @ 1% per month or part thereof, on due tax.

PROFESSIONAL TAX RETURN

All Registered employers are required to submit returns electronically through PT_Return module. The hard copy of the return, as electronically transmitted, along with the acknowledgement and tax paid challan(s) are also required to be furnished within 15 days of the following month to the prescribed authority. The return period is annual.

PENALTY FOR NON-COMPLIANCE:

For late filing of Return, late fee is payable @ Rs 200/- for the first month of default and Rs 100/- for each subsequent month or part there-of. Non-submission of return is an offence punishable with simple imprisonment with or without fine. In addition to this, such return defaulters will be subject to compulsory assessment and penalty.

**No return is required to be filed by an enrolled person.

AMENDMENTS, CANCELLATION, DUPLICATE ENROLLMENT AND REGISTRATION PROFESSIONAL TAX CERTIFICATE

There are the provisions in the Act:- (i) to amend the certificate of Enrolment / Registration in respect of any change of constitution, nature of activity, address etc; (ii) to cancel the Certificate of Enrolment in case of cessation of profession or death of a person. Certificate of Registration can be cancelled in the case of cessation of liability. All application for amendment (& surrender) of certificate shall have to be filed online.

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