Are you liable for ESC ?

Applicable to : every person or partnership for each quarter commencing on or after 1/4/2006


Turnover Limit : Rs. 7.5 Mn per quarter


Special Exemption : during the period 1/1/2009 to 31/12/2009 for following receipts

Export of any good

Deem Export

Any operation of Hotel, Tour Operation or Tour Agent

Calculation of ESC : {Turnover – (VAT+ Capital Assets Disposal + Bad Debts)}* Relevant Ratio


Specifically defined turnover for:

Freight Forwarder : Turnover of any freight forwarder shall be reduced by the sum payable by such freight forwarder to any person on account of the carriage by such person, of any cargo loaded in to any ship or aircraft


Export of cut and polished Diamonds from raw Diamonds imported: Turnover for ESC is difference between CIF value of raw diamonds and FOB value on the export


Export of Garment manufactured from Raw Material imported on NFE basis: Turnover for ESC is difference between CIF value of raw materials and FOB value on the export


ESC Rates

Turnover of Exempt Profit	0.25%
Profit of Which are taxable at the specified in 5th Schedule	0.5%
If Taxable Income of a company does not exceed 5,000,000	0.5%
Distributor	0.05%
Trade or Business which deals in whole sale or retail(Other than Motor Vehicle or Liquor)	0.25%
Trade or Business which deals in whole sale or retail Motor Vehicle or Liquor	1%
Export of Article or Goods	0.25%
Turnover from primary conversion of any Tea, rubber or coconut plantation	0.25%
Turnover From Export of apparels Supply of locally manufactured apparels to any exporter of apparels for export Supply of locally manufactured textiles to any exporter of apparels to be used in the manufacture of apparels for export by such exporter Turnover of a trading house approved by BOI	0.1%
Any liable turnover (which is tax at 35%)	1%

Tax Credit

Can setoff against relevant income tax.

ESC paid by the partnership can be obtained as tax credit in the hands of individual partners

Payment and Filing of Returns

Payment due date is on or before 20^th day of the next month at the end of that relevant quarter

Return shall be file on or before 20^th day of the next month at the end of that relevant quarter