TIOL-DDT 1046 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1046</font><br> 05.02.2009<br> Thursday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Notifies Service Tax Return Preparer Scheme</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salient Features of the Scheme are:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some definitions:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>"Partner Organisation" </strong> means an organisation or agency selected by the Board and with whom an agreement has been entered into by the Board or the Resource Centre authorising it to act as Partner Organisation under this Scheme;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>"Resource Centre" </strong> means the Directorate General of Service Tax or any other Directorate, as the case may be, designated by the Board to act as the Resource Centre under this Scheme;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>"Service Tax Return Preparer" </strong> means any individual who has been issued a Service Tax Return Preparer Certificate and a unique identification number by the Partner Organisation to carry on the profession of preparing the returns of income in accordance with the provisions of said Scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Who is eligible to be a Return Preparer?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A person who has successfully completed education upto senior secondary level, under the age of 35. No age limit for retired CBEC officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What will he do? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Service Tax Return Preparer shall prepare and furnish the return to the Superintendent of Central Excise having jurisdiction over the assessee, or to such other person as may be directed by the Resource Centre with the approval of the Board and hand over the acknowledgement of having furnished the return to the concerned eligible person.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Fee:</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An assessee shall pay a fee as may be mutually agreed upon between an assessee and the Service Tax Return Preparer. The Board recommends, as a yardstick, a fee of <strong>one thousand rupees </strong>per return prepared by the Service Tax Return Preparer.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bad Copy and Paste from Income Tax:</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The whole scheme is a casual copy and paste from the Income Tax Return Preparer Scheme, 2006. Nothing wrong – only they should have been a little more careful and substituted <em>Income Tax </em> with S <em>ervice Tax</em>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The definition of Service Tax Return Preparer is <em>“any individual who has been issued a Service Tax Return Preparer Certificate and a unique identification number by the Partner Organisation to carry on the profession of preparing the </em><strong><em><font color="#FF6600" size="4">returns of income</font> </em></strong><em> in accordance with the provisions of said Scheme”</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per para 11(v) of the Scheme, the Certificated may be cancelled <em>“ (v) if he makes repeated mistakes relating to </em><strong><em><font color="#FF6600" size="4">computation of income</font> </em></strong><em> in the returns prepared by him”</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unless the above mistakes are corrected, there cannot be a Service Tax Preparer Scheme. Amen.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2009/stnot09_007.htm" target="_blank">Notification No. 7/2009-ST Dated: 3rd February, 2009 </a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LET US SHARE – CBDT's PR Exercise</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, the Minister Of State for Finance, Palanimanikkam released a book “let us share”, a publication of the Income Tax Department. The ITD's attempt in sharing its experience with the public for the first time is in tune with the philosophy underlying the Right to Information Act, i.e. transparency and openness. Through this compilation, which portrays many facets of its work, the ITD also seeks to foster partnership with the public for better appreciation and compliance of tax laws and its fight against tax evasion.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The emphasis on taxpayer services reflects the changing role of the ITD from an exclusive enforcement agency to a quality service provider. Through “Let us Share”, the department hopes to raise the bar in its journey towards excellence and seek the co-operation of the discerning public in its endeavours.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new web site with URL <a href="http://incometaxindiapr.gov.in">http://incometaxindiapr.gov.in </a>was also launched on the occasion. The web site, apart from providing linkages of use to taxpayers in an organized manner, contains latest publications in the taxpayer-education series on filing of tax returns, taxation of salaries, valuation of perquisites, computation of house property income and capital gains, and booklets on TDS and FBT , which can be downloaded free.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> tried to access the site repeatedly, but it was not available. Try, try, try – you may succeed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See also our <strong>CobWeb </strong> today.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax on commission received by banks against Government Business</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While auditing a Bank it was noticed that the Bank was not paying service tax on the amount of commission received from RBI for doing government related business transaction e.g. disbursement of pensions, maintenance of PPF account etc. Notification No. 13/2004-ST dated 10.09.2004 as amended by notification No. 19/2006-ST dated 24.04.2006 exempts from service tax, banking company or financial institution providing service in relation to <strong>collection of duties or taxes </strong> levied by government.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The said commission is not earned towards ‘collection of duties and taxes' levied by the government.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So Board clarifies that service tax is payable on such commission received by the bank from RBI.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The service tax amounting to Rs.52 lakhs has been recovered from the said branch of the bank.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar issue has been noticed in other banks also and may be prevalent in case of other banks and Board wants the issue to be noticed by the field for initiating action to recover Service Tax.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2009/godowns_letter.htm" target="_blank">CBEC's F. No. 137/26/2007- CX.4 Dated: 5th December, 2008</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax - Non-payment of service tax by State warehousing Corpn on let out Godowns</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jalandhar Commissionerate has detected a case of non-payment of service tax in respect of godowns let out by State Warehousing Corporation on rental basis. The assessee has taken the plea that the clients use the godowns for storage of agricultural purpose and hence rental income is not chargeable to service tax, being exempted under the category of ‘Storage and Warehousing Service'.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>State Warehousing Corporation has merely rented out its godowns and did not provide any service as storage or warehousing keeper, they have provided the service of renting as defined under ‘renting of immovable property'. The storage or warehousing service provider is required to make arrangements for space to keep the goods, loading and un-loading and stacking of goods in storage areas, keeping inventory of goods, making security arrangements, providing insurance cover etc. The renting of immovable property has been brought under service tax w.e.f.1.6.2007 and prior to that merely renting out storage premises did not attract service tax. Now letting out storage premises on rent without providing any other service as defined under the storage and warehousing service attracts service tax under this category.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>From the above it is clear that income/payment received from any person on account of rent is chargeable to service tax under the category ‘renting of immovable property', irrespective of the fact whether the space so rented is used for agricultural produce or otherwise as there is no such exemption.</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field to note this issue and initiate action to recover Service Tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2009/godowns_letter.htm" target="_blank">CBEC's F. No. 137/26/2007- CX.4 Dated: 5th December, 2008</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Direct Tax Collections Cross 2.47 Lakh Crores</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Net direct tax collections during first ten months of the present fiscal (up to January 2009) stood at Rs.247,396 crore, up from Rs.218,538 crore, registering a growth of 13.21 percent. Growth in Corporate Taxes was 17.32 percent (Rs.157 ,039 crore as against Rs.133,851 crore), while Personal Income Tax (including FBT, STT and BCTT) grew at 6.71 percent (Rs.90,010 crore as against Rs.84,349 crore). Growth in Fringe Benefit Tax (FBT) was 19.13 percent (Rs.6,148 crore as against Rs.5,161 crore) and in Banking Cash Transaction Tax (BCTT) was 16.12 percent (Rs.534 crore as against Rs.460 crore).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Share transactions have apparently come down showing a decline in Securities Transaction Tax by 29.13 percent (Rs.4,815 crore as against 6,793 crore).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During this period, growth of tax deducted at source (TDS) for Corporate Taxes was 41.1 percent (Rs.50 ,252 crore against Rs.35,615 crore last year) and for PIT it was 20.6 percent (Rs.54,099 crore against Rs.44,870 crore last year).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the month of January 2009, growth in direct tax collection stood at 34.29 percent compared to January 2008 as against a negative growth of 12.51 percent in the month of December 2008 compared to December 2007, and a negative growth of 36.09 percent in the month of November 2008 compared to November 2007.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct tax collections have so far reached 67.78 percent of the Budget Estimates target of Rs.3,65,000 crore.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can they hit that target?</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">–Tomorrow's cases</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399">Central Excise</font></strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Blame it on Rio</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MRP assessment – Authorities under Central Excise Act have no jurisdiction to question correctness of decision of State Government in matters pertaining to SWAMs Act, 1976 – <em>Prima facie </em> case – Pre-deposit dispensed and Stay granted by Tribunal</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AUTHORITIES</strong> under the Standards of Weights and Measures Act, 1976 <em>having held that no MRP is required to be affixed on the product in question, the revenue's insistence that the same should have been affixed and the goods should have been assessed under Sec. 4A cannot, prima facie, upheld </em> at this stage.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Finding of AO was not based on any material - It is not permissible to misread facts and then order a remand for sake of remand - A.O cannot be permitted to take advantage of his own wrong by not recording clear finding with reference to material on record - Members do not agree even on question to be referred to Third Member: ITAT Third Member</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong> is a strange case. The two Honourable Members of the ITAT had a difference of opinion on an issue. So the matter had to be referred to a Third member. Now there was a difference of opinion on the question to be referred.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The President observed, “There is very acrimonious and unfortunate correspondence between the two Members as to which question should be referred u/s 255(4) of the Income-tax Act. The Members did not agree to refer a common question to resolve the stalemate in spite of advice of the seniors to refer a common question on the facts of the case without highlighting any finding of fact arrived at by any particular Member. No effective result could be reached and there was no agreement on common question .“</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Foreign Trade policy - Grant of licence is based on correctness of contents of application and it should satisfy all requirements of scheme and other applicable provisions of law - Supporting manufacturer's name not correct - cancellation of licence correct: Madras HC</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> a scheme is available, that should be extended to a person who satisfies the requirement of the scheme. Therefore, the concept of grant of licence under a scheme as well as the Foreign Trade Policy and the circular has to be interpreted in order to achieve the object of providing the benefit under the scheme to the deserving persons.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>