FORM NO. 56H: Report under Section 10BA of the Income-Tax Act, 1961. FORM NO. 56H is relevant for undertakings deriving profit and gains from the export out of India of eligible articles and things (viz. all hand –made articles or things which are of artistic value and which require the use of wood as the main raw material), and who claim deduction under section 10BA with effect from the assessment year 2004-05.
(1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee :
Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section :
Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
(2) This section applies to any undertaking which fulfils the following conditions, namely :—
(a) it manufactures or produces the eligible articles or things without the use of imported raw materials;
(b) it is not formed by the splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(c) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of this clause as they apply for the purposes of clause (ii) of sub-section (2) of that section;
(d) ninety per cent or more of its sales during the previous year relevant to the assessment year are by way of exports of the eligible articles or things;
(e) it employs twenty or more workers during the previous year in the process of manufacture or production.
(3) This section applies to the undertaking, if the sale proceeds of the eligible articles or things exported out of India are received in or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
(4) For the purposes of sub-section (1), the profits derived from export out of India of the eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things bears to the total turnover of the business carried on by the undertaking.
(5) The deduction under sub-section (1) shall not be admissible, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, where a deduction is allowed under this section in computing the total income of the assessee, no deduction shall be allowed under any other section in respect of its export profits.
(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force;
(b) “eligible articles or things” means all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material;
(c) “export turnover” means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India;
(d) “export out of India” shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station as defined in the Customs Act, 1962 (52 of 1962).]
FORM NO. 56H
[See Rule 16F]
Report under section 10BA of the Income-tax Act, 1961
1. I/We have examined the accounts and records of
(name and address of the assessee with permanent account number) relating to the business of their undertaking named
engaged in export of hand-made articles or things made of wood as the main raw material during the year ended on the 31st March,
2. I/We certify that the deduction to be claimed by the assessee under sub-section (1) of section 10BA of the Income-tax Act, 1961, in respect of the assessment year __________is Rs.
which has been determined on the basis of the sale proceeds received by the assessee in convertible foreign exchange. The said amount has been worked out on the basis of the details in Annexure A to this form.
3. I/We certify that I/we have collected all the relevant information necessary for computing the deduction allowable under this section and have verified the same with reference to the accounts and records of the assessee.
4. In my/our opinion and to the best of my/our knowledge and according to the explanations given to me/us, the particulars given in the Annexure A are true and correct.
[See paragraph 2 of Form No 56H]
Details relating to the claim by the exporter for deduction
under section 10BA of the Income-tax Act, 1961
Name of the assessee
Name of the undertaking
Location and address of the undertaking
Nature of business of the undertaking
Date of commencement of manufacture or production
Number of workers employed by the undertaking
Total turnover of the undertaking
Total profits of the undertaking
Total export turnover of the undertaking
Export proceeds received in convertible foreign exchange in accordance with sub-section (3) of section 10BA, of the undertaking in respect of eligible articles or things
Sale proceeds of the undertaking in respect of eligible articles or things
whether the full consideration in convertible foreign exchange for exports made by the undertaking was brought into India within a period of six months from the end of the previous year
Yes / No
If not, whether it was brought into India within such further period in the previous year as allowed by the Competent Authority
Yes / No
Specify the amount and the relevant previous year in case such amount is brought into India in convertible foreign exchange beyond the period of six months from the end of the relevant previous year and with the approval of the Competent Authority, where such amount relates to any other previous year. Also state the name of the authority and the period up to which the approval was accorded
Amount of sale proceeds, if any, that are credited to a separate account maintained by the assessee with any bank outside India and the reference number of Reserve Bank of India according permission for the same
Whether the main raw material has been imported
Yes / No
Please specify whether the assessee has claimed deduction under section 10A or section 10B of the Income-tax Act in any assessment year prior to the assessment year for which the audit report is furnished
Yes / No
If yes, please specify the assessment year for which the deduction under section 10A or section 10B of the Income-tax Act has been claimed
Amount of deduction under section 10BA to which assessee is entitled with the working sheet
Remarks, if any