TIOL-DDT 1047 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1047</font><br>
06.02.2009<br>
Friday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Edible Oil in branded packs of up to 5 Kg – Allowed - CBEC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has informed the Board that</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. representations have been received from exporters mentioning that Customs are not allowing consignments of edible oil in branded consumer packs of upto 5 Kg. citing reason that there is no information whether quota of 10,000 MTs has been exhausted or not.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. vide their Notification No.60 dated 20.11.2008, export of edible oils in branded consumer packs of upto 5 Kgs. was allowed subject to a limit of 10,000 MTs upto 31 st October, 2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. quantity of export of edible oil in consumer packs of upto 5 Kg. is being monitored by DGFT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Till 21.1.2009, 914.24 MTs have only been exported as per DGCI&S database/records.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has decided that <strong><em>presently </em></strong> Customs may allow export of consignments of edible oil in branded consumer packs of upto 5 Kg. till 31.5.2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the above, Board wants the field to take further necessary action in the matter, accordingly. What does this mean? Why can't the Board tell the Customs field formations that they HAVE to allow the exports? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please permit a little digression. The above usage of the word <strong><em>presently </em></strong> is the correct one. <strong><em>Presently </em></strong> does not really mean at present; it actually means ‘in the immediate future', but the wrong usage had continued for centuries especially by <strong><em>concerned </em></strong> lawmakers.</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=25&filename=notification/custom/2009/instruction09_002.htm" target="_blank">CBEC's F.No.528 /5/2007- Cus .( TU ) Dated: 3rd February, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax - Taxability of the Schools providing Buses – CBEC clarifies.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nearly two years ago vide letter <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2007/st_school.htm" target="_blank">F. No. 137/70/2007- CX4 dated 26.04.2007</a>, </strong> CBEC had clarified that</font></p>
<blockquote>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Schools do not fall in the category of tour operator with regard to operation of buses in view of the facts that</font></p>
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<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) schools are not engaged in the business of planning and scheduling of tours/travel;(ii) the value attributable to planning and scheduling undertaken for transport of students is ‘nil'; and</font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) the service of planning and scheduling is not provided to any particular student. It is done for operation of their own buses.</font></p>
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</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board had also informed the DGST that <font color="#FF6600">Chairman (CBEC) has desired that these instructions may quickly be brought to the notice of all Chief Commissioner of Central Excise and Service Tax to avoid any harassment to the schools. It is therefore requested that these instructions may </font></font><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">please be circulated on priority.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We don't know whether the DGST communicated the Board's views, but Commissioner, Jaipur informed the DGST that in spite of the Board clarification, SCNs were being issued in some Commissionerates. He wanted to know whether there has been a change in the Department's stand.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGST made another reference to the Board and the Board has now clarified once again that</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) There has been no change in the stand taken by the Board.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the activity of schools to transport children from and back to the School on the cabs owned and run by them does not constitute renting a cab and schools do not fall in the category of rent-a cab operator.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) As regards hiring a cab by school from outside, the same has specifically been excluded from the scope of taxable service.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) <strong>Hence, activity of transportation of school children on cabs owned by school or hired by school does not attract service tax.</strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has once again requested the DGST to issue suitable instructions to the filed formations on priority to avoid any harassment to schools.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Obviously the Board is very much concerned about <strong>harassment </strong> to schools. We hope this concern is shared in the field.</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/2008/st_schoolbuses.htm" target="_blank">CBEC's F.No.137 /26/2007- CX.4 Dated: 15th December, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Hedging of Freight Risk by domestic oil-refining – RBI clarification</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A person resident in India is permitted to enter into a contract in a commodity exchange or market outside India, to hedge price risk in a commodity subject to certain terms and conditions. Further, select AD Category - I banks have been delegated the authority to grant permission to listed companies to hedge commodity price risk in the international commodity exchanges/markets.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As announced in the Mid-term review of Annual Policy Statement for the Year 2008-09 (Para 146), it has been decided to delegate powers to AD Category - I banks, which have been granted permission by the Reserve Bank to approve commodity hedging, to allow hedging of freight risk by domestic oil-refining companies and shipping companies on the following terms and conditions:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The hedging can be undertaken as plain vanilla Over the Counter (OTC) or exchange traded products in the international market/exchange.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) The exchanges on which the products are purchased must be a regulated entity.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii) The maximum tenor permissible will be one year forward.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The basis of underlying exposure is as follows:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(a) In the case of oil refining companies –</strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The freight hedging will be on the basis of underlying contracts i.e., import/export orders for crude oil/petroleum products. Additionally, AD Category - I banks may permit domestic oil refining companies to hedge their freight risk on anticipated imports of crude oil on the basis of their past performance up to 50 per cent of the volume of actual imports of crude oil during the previous year or 50 per cent of the average volume of imports during the previous three financial years, whichever is higher.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Contracts booked under the past performance facility will have to be regularized by production of underlying documents during the currency of the hedge. An undertaking may be obtained from the company to this effect.</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(b) In the case of shipping companies :-</strong></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The hedging will be on the basis of owned/controlled ships of the shipping company which have no committed employment. The quantum of hedge will be determined by the number and capacity of these ships. The same may be certified by a Chartered Accountant to the AD Category - I bank.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Contracts booked will have to be regularized by production of underlying documents i.e. employment of the ship during the currency of the hedge. An undertaking may be obtained from the company to this effect.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii) AD Category - I banks may also ensure that the freight derivatives being entered into by the shipping companies are reflective of the underlying business of the shipping companies.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Necessary amendments to Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 are being issued separately.</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=280&filename=notification/rbi/2008/rbi08cir050.htm" target="_blank">RBI Circular No. 50/ RBI ., Dated: February 4, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IRS Officer on fast Unto Death – For Sri Lanka Tamils</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An Assistant Commissioner with Mumbai Customs, B. Bala Murugan is on fast-unto-death in Salem for the Sri Lankan Tamil's cause, as reported by Express News Service. It seems he has written a letter to Sonia Gandhi requesting her to solve the problem.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cash Gift to Madame Mayawati – Can it be taxed as professional Income?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gift was made to her because of her political position and was directly related to the profession as a politician and, therefore, should the same be treated as her income from the profession of politics?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tell us what you think.</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">–Monday'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></strong></font><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>Mayawati wins again in ITAT - can gift to a politician be treated as Professional income? - Gift of Rs 11 Lakhs allowed by AO after proper inquiry and consultation with CIT – Commissioner's Review order quashed: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>KM. MAYAWATI</strong>, the beloved Chief Minister is in the habit of getting huge gifts from her fans, teachers, lawyers and party-men – out of sheer love and affection, notwithstanding interference by Income Tax Department. Here is a case she won – again.</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="#FF3300" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Second-hand copiers without licence - Single Judge ought not to have ordered release of goods in a hasty manner; 'Writ of Mandamus' lies on the principle 'request and denial' - absence of reasons has rendered order of learned single Judge unsustainable: Madras HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> should be a request by an individual and subsequent denial by the statutory authorities. In the present case, only one element, namely, "request" exists and the other, namely, "denial" absents. To put it differently, a request was made by the respondent and the same was under consideration by the appellants, but, there was no denial or rejection of the said request by the appellants. So, when the said request made by the respondent was under consideration by the authorities, it was unfair for the respondent to approach the writ court. At the same time, it was also not the case of the respondent that there was an inordinate delay in considering his request by the appellants.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax</strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Subsequent show cause notice issued by invoking extended period after issue of first show cause notice under extended period is not barred by limitation: CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong> is going to be music to the ears of revenue officials. Can three notices be issued to the same assessee, all invoking extended period for almost same period of dispute? Yes. There is nothing wrong in issuing one more notice (or two more notices for that matter) also by invoking extended period even when the first show cause notice was issued under extended period as per the latest order of the CESTAT.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements</strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more<strong> DDT</strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend.</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>
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