TIOL-DDT 1080 · 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 1080</font><br>
27.03.2009<br>
Friday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export Warehousing – Thiruvallur included and Kanpur exclusion cancelled</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Circular No. 581/18/2001- CX dated 29th June, 2001, CBEC has specified places where warehouses may be established.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received from the trade as well as field formations to include the district of Thiruvallur in the state of Tamilnadu in the list of places mentioned in the said Circular.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board is of the view that extension of the facility of export warehousing to Thiruvallur district in the state of Tamilnadu would facilitate the trade and industry and so it is included the list.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Circular had been amended a dozen times and in one of the amendments, Kanpur had been inadvertently omitted, which lapse is now rectified retrospectively.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The places where warehouses may be established and registered are</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Ahmedabad,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Bangalore,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Kolkata,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Chennai,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Delhi,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Hyderabad,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Jaipur,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Kanpur,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Ludhiana,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Mumbai,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. the districts of Pune and Raigad in the state of Maharashtra,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. the district of East Midnapore in the state of West Bengal,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. the district of Kancheepuram in the state of Tamilnadu,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. the district of Indore in the state of Madhya Pradesh,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15. the taluka Ankleshwar in the district of Bharuch in the state of Gujarat,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16. Navi Mumbai in the district of Thane in the state of Maharashtra,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17. Sholinghur in the district of Vellore in the state of Tamilnadu,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18. Bidadi in the Bangalore Rural District, Karnataka and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19. the district of Thiruvallur in the state of Tamilnadu.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the list is interesting – it basically covers the places which have no ports, understandably so. But the list has cities like Chennai, Kolkata and Mumbai which have ports. And the list does not cover port cities like Kochi, Mangalore, Vizag etc.,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why? Netizens are welcome to offer their comments.</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=31&filename=notification/excise/2009/excircular884.htm" target="_blank">CBEC
Circular No. 884/04/2009- CX, Dated: March 26, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TDS applicable even when salary paid abroad for services rendered in India – Supreme Court‘s landmark decision</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EXTRA-TERRITORIAL jurisdiction of the Income Tax authorities has always remained a major bone of contention. What has sharpened this issue in public domain is the show cause notice of the Revenue, demanding the capital gains tax to the tune of Rs 8000 Crore from Vodafone B V for a deal struck outside India and payments made in a tax haven. But what may lend a solid bout of support to the Revenue's stand is the Apex Court's latest ruling in as many as 104 Civil Appeals filed by non-resident companies. The Supreme Court has held that the TDS provisions, which in association with the charging provisions, form an integrated code, will extend to the Home salary or special allowances paid to expatriate employees by a non-resident company for services rendered in India as seconded employees of a joint venture in which the non-resident company is a partner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So now Indian Income Tax TDS provisions travel beyond the geographical shores (and lands) of India.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will this make the Service Tax department stronger? If TDS can be applied for payments made to an employee abroad, what is wrong in collecting Service Tax on services received/rendered/provided abroad as is convenient and confusing?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court case was all about with-holding tax and we couldn't withhold this landmark case till Monday.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So we bring it to you today –See <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8808" target="_blank">Breaking News</a>.</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clandestine Removal of Marble from EOUs – Coloured Evasion</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DTA sale of marble by EOUs at concessional rate of duties as well as full duties under FTP paras 6.8(a) and para 6.8(h) respectively, are not allowed. EOUs cannot do DTA sale of marble under para 6.9(b) of FTP.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, EOUs have no route available for DTA sale of marble. It has been pointed out by Association of marble exporters/importers that in spite of these provisions, clandestine DTA sale of imported marble from EOUs still takes place.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has a solution:</font></p>
<blockquote>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">EOUs must mention quality of marble i.e. colour, type and name etc. in the relevant documents to be submitted at the time of both import as well as export of marble.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And Lo and Behold! Evasion is stopped – the problem all these days was with the <strong><font color="#FF6600">CO</font><font color="#006600">L</font><font color="#0099CC">O</font><font color="#663399">UR</font> </strong></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=46&filename=notification/dgft/2008/dgft08cir074.htm" target="_blank">DGFT Policy Circular No. 74 (RE-08)/2004-2009, Dated: March 26, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India – Managing the Impact of the Global Financial Crisis – Subba is optimistic</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addressing the CII yesterday, Duvvuri Subba Rao, RBI Governor said, “Less than a year ago, much of what has happened in the Indian economy since last October would have been hard to anticipate. I recall, around this time last year, the most frequently asked questions (FAQs) were, what are the factors that put India on a high growth trajectory and what can we do to remain there? Today, the FAQ is, when and how do we get back on to the high growth trajectory? The sharp turnaround in the FAQs summarizes in a nutshell the impact of the global financial crisis on India.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is the Outlook for India?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The outlook for India going forward is mixed. There is clear evidence of economic activity slowing down. Real GDP growth has moderated modestly in the first and second quarters of 2008/09, and sharply in the third quarter. The services sector, which has been our prime growth engine for the last five years, is slowing, mainly in construction, transport and communication, trade, hotels and restaurants sub-sectors. For the first time in seven years, exports have declined in absolute terms for four months in a row during October 2008 - January 2009. Recent data indicate that the demand for bank credit is slackening despite comfortable liquidity in the system. Dampened demand has dented corporate margins while the uncertainty surrounding the crisis has affected business confidence. The index of industrial production has shown negative growth for two recent months and investment demand is decelerating. All these factors suggest that growth will moderate more than we had earlier thought.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In addressing the fall out of the crisis, India has several advantages. Some of these are recent developments. Most notably, headline inflation, as measured by the wholesale price index, has fallen sharply though consumer price inflation is yet to moderate. Clearly, falling commodity prices have been the key drivers behind the disinflation; however, some contribution has also come from slowing domestic demand. The decline in inflation should revive and support consumption demand and reduce input costs for corporates . Furthermore, the decline in global crude prices and naphtha prices, if sustained, will reduce the size of subsidies to oil and fertilizer companies, opening up fiscal space for infrastructure spending. From the external sector perspective, it is projected that imports will shrink more than exports keeping the current account deficit modest.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are also several structural factors that have come to India's aid. First, notwithstanding the severity and multiplicity of the adverse shocks, India's financial markets have shown admirable resilience. This is in large part because India's banking system remains sound, healthy, well capitalized and prudently regulated. Second, our comfortable reserve position provides confidence to overseas investors. Third, since a large majority of Indians do not participate in equity and asset markets, the negative impact of the wealth loss effect that is plaguing the advanced economies should be quite muted. Consequently, consumption demand should hold up well. Fourth, because of India's mandated priority sector lending, institutional credit for agriculture has remained unaffected. The farm loan waiver package implemented by the Government should further insulate the agriculture sector from the crisis. Finally, over the years, India has built an extensive network of social safety net programmes, including the flagship rural employment guarantee programme. These uniquely Indian versions of automatic stabilizers should protect the poor from the extreme impact of the global crisis.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>When the Turn Around Comes</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over the last five years, India clocked an unprecedented nine per cent growth, driven largely by domestic consumption and investment even as the share of net exports has been rising. This was no accident or happenstance. True, the benign global environment, easy liquidity and low interest rates helped, but at the heart of India's growth were a growing entrepreneurial spirit, rise in productivity and increasing savings. These fundamental strengths continue to be in place. Nevertheless, the global crisis will dent India's growth trajectory as investments and exports slow. Clearly, there is a period of painful adjustment ahead of us. However, once the global economy begins to recover, India's turn around will be sharper and swifter, backed by our strong fundamentals and the untapped growth potential. <strong>Meanwhile, the challenge for the government and the RBI is to manage the adjustment with as little pain as possible</strong>.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>On-line downloading of GR Forms – RBI Instructions</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Regulation 3 of Notification No. FEMA/23 dated 3rd May 2000 [Foreign Exchange Management (Export of Goods and Services) Regulations, 2000] every exporter of goods or software in physical form or through any other form, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, is required to furnish to the specified authority, a declaration in one of the forms set out in the Schedule thereto. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, GR Forms [to be completed in duplicate can be obtained by the exporters from the Regional Offices of the Reserve Bank at the cost of Re. 1. As part of simplifying the procedures, it has been decided to make the GR Forms available on-line on the Reserve Bank's website <a href="http://www.rbi.org.in">www.rbi.org.in</a>. Accordingly, the exporters have the option to use the GR Forms available on-line as well. While downloading the GR -Forms, the exporter may ensure to use 'Legal' size paper i.e. 8.5 * 14 inches. Further, both the printer (printing preference) and the paper size in the page setup option have to be set to legal size before printing. The GR number will be automatically allotted when the document goes to the print queue.<font color="#FF6600"> [A colleague's comment on this - What will happen to the GR number if during the printing there is a power cut? I think it is better to save it to the computer and then print? I hope they have given such option as well. Otherwise it will land the exporter in trouble if he is identified with a particular GR number and that form is not submitted due to mishaps.]</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exporters will continue to have the facility of purchasing the GR Forms from the Regional Offices of the Reserve Bank, as hitherto. However, this facility would be phased out within a period of one year.</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/rbi08cir060.htm" target="_blank">RBI /2008-09/421 Circular No. 60, Dated: March 26, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New Ten Rupee Coins Soon</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank of India will shortly put into circulation new coins of Rs.10 /- (Bi-metallic) issued by Government of India on the themes, <strong>"Unity in Diversity" </strong>and <strong> "Connectivity and Information Technology "</strong></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>Central Excise</strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Limitation - appellants did not derive any extra benefit by following a wrong procedure – no reason for invoking extended period: CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SINCE</strong> the deemed credit on aluminium was higher than zinc, the appellants could have got higher amount of CENVAT credit if they were to follow proper procedure and sent zinc and aluminium to the job worker after availing the credit and if they were to pay duty on the zinc waste or disposed of the zinc waste properly as per procedure they would not have lost any money.</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>Deduction u/s 80IA -A port does not include an inland port. ICD not port - The deduction under section 80- IA is applicable to 'Undertaking' or 'Enterprise' and not to the Assessee'. printers , scanners and other peripherals were part and parcel of computer and depreciation against such asset are allowable @ 60%. - ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What</strong> is a <em>port </em> under the Customs Act may not be so under the Income Tax Act. The term "Inland Port" does not include the ICD . Had it been included in the term Inland Port, the CBDT would have not notified them as separate infrastructure facility and would have clarified that ICDs and CFSs are part & parcel of Inland Port.</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>Liability of service tax on road repair – writ at summons stage – petitioner asked to produce documents before Assistant Commissioner: High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PETITIONER</strong> is specialized in road works. The issue relates to the exigibility of the works undertaken by the petitioner to service tax. Prayers in the writ petition include.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) To declare that the civil works maintenance of roads executed by the petitioner are not taxable services under the Finance Act.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) To declare that the maintenance and repair of roads are not taxable services under the Head maintenance or repair of immovable property.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) To issue a writ of prohibition restraining the respondents from proceedings against the petitioner.</font></p>
</blockquote>
<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Today
is Chaitra Sukladi, Ugadi, Gudi Padava, Chetti Chand, Navreh and Sajibu
Cheiraoba – greetings from</font> <font color="#FF6600">DDT</font></strong></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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