TIOL-DDT 1092 · 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 1092</font><br> 20.04.2009<br> Monday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">The Price of Sugar - Customs Duty Exemption for Sugar</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SUGAR</strong> prices have reached Rs. 25 a kg and may even touch Rs. 30 soon. The government after getting permission from the Election Commission has exempted Raw sugar imported by a sugar factory or sugar refinery and refined or white sugar imported by</font></p> <div align="justify"> <blockquote><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) State Trading Corporation of India Ltd (STC) upto an aggregate quantity of 2.50 lac metric tonnes;</font></blockquote> </div> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) MMTC Limited (MMTC) upto an aggregate quantity of 2.50 lac metric tonnes;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Projects & Equipment Corporation of India Ltd (PEC) upto an aggregate quantity of 2.50 lac metric tonnes; or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) upto an aggregate quantity of 2.50 lac metric tonnes.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This exemption is valid till 1st August, 2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Although there is no shortfall of sugar, prices of sugar have been rising recently, mainly on account of a perception of shortage...The role of speculative elements and hoarders in the price rise cannot be ruled out," Chief Director (Sugar) told reporters.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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/price _sugar.jpg" alt="Legal Corner Icon" width="84" height="124" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font>“The Price of Sugar” </strong> is a stunning documentary on the work of Father Hartley, a disciple of Mother Teresa. The commentary by Paul Newman is about the plight of Haitian workers who are recruited as sugar plantation workers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They work 14 hours a day, seven days a week, earning less than USD 1 a day with minimal-to-nonexistent health care. Instead of cash, they are paid in vouchers that can be redeemed for overpriced food at company-owned stores. Since they can afford only one meal a day, most of the calories they consume come from chewing sugar cane.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Slave camps in the 21st Century? And it's all about sweet Sugar.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will sugar have an impact in the coming elections?</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=23&filename=notification/custom/2009/ctariff09_036.htm" target="_blank">Notification NO. 36/2009 – Cus Dated: April 17, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">No Service Tax on Bank Deposit Insurance Premium</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By its circular Ref. No. DICGC/DID/746/05.03.01/2008-09 Dated: January 12, 2009, the Deposit Insurance And Credit Guarantee Corporation informed the bankers</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, all the registered insured banks are liable to pay to the Corporation deposit insurance premium at the rate of 10 paise per annum for every deposit of Rs.100 (i.e 0.10 % p.a) at half yearly intervals. Recently, the Commissionerate of Central Excise and Service Tax, LTU, Mumbai have communicated that the deposit insurance activity is liable to Service Tax with effect from May 1, 2006. The matter is under reference to appropriate authorities and a final view in the matter is expected to be taken soon.</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">2. This is for the advance information of the insured banks that in case Service Tax is made applicable on the deposit insurance premium, all the banks may have to pay service tax, at a short notice, over and above the premium being paid as per the relevant rate.</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">3. However, this circular should not be construed as an advice to pay service tax on premium.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently the matter was taken up with the Board and the Corporation now informs the banks in its Circular Ref. No. DICGC/DID/8926/05.03.01/2008-09 Dated: March 20, 2009.</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Please refer to our circular letter No.DICGC/DID/746/05.03.01/2008-09 dated January 12, 2009 on the captioned subject regarding the communication from the Commissionerate of Central Excise and Service Tax, LTU, Mumbai covering the activities carried out by the Corporation under the head “General Insurance Business (Misc. Insurance)”, rendering it liable to Service Tax with effect from May 1, 2006.</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The matter was referred to the Ministry of Finance, Government of India who have since clarified vide their letter dated February 24, 2009 that the charges collected by DICGC are not taxable under the taxable service of “General Insurance Service. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One thousand Crores of rupees in Service tax just blown up by one clarification. The point is why can't the officers seek clarifications from their Board before rushing into demand tax? Just imagine the amount of paper that must have been wasted in communicating this to all the banks! A small forest must have been eaten up.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Bank Nationalisation in USA</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When Madam Gandhi (the older version of course) nationalised 14 private banks in India exactly forty years ago, there were loud protests, but now one of our eminent columnists had written that one reason for India missing the economic catastrophe was nationalisation.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now there is talk of nationalisation of banks in the great US of A White House Chief of Staff Rahm Emanuel said that bank nationalization was "not the goal" of the administration and he hoped they would be able to avoid it.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Obama Administration hopes it can avoid nationalizing the banks that are under scrutiny to see how well they would fare if the recession is worse than expected. Big banks like Citigroup and Bank of America look small and frightened.</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font></strong></font></strong></font></strong></font><font color="#663399">Central Excise</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Board Circulars are not binding on Courts – matter remanded to decide the matter keeping in view applicability/relevance of <em>Ratan Melting </em> case – Supreme Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CIRCULARS </strong>and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">No TDS on payment for services rendered abroad - when there is no income chargeable to tax the question of deduction at source does not arise. - ITAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> services by the non-resident were outside India and as per the provisions of law in this regard, such amounts are not exigible to tax in India. As per the provisions of Income Tax Law in this regard, such amount is not exigible to tax in India. The receipt in the hands of the recipient can also not be treated as income deemed to accrue or arise in India as per provisions of section 9 of the Income Tax Act in this regard. It is also not the case of the Revenue that the payment is not remitted directly abroad. It is also not the case that the payments were received by or on behalf of the agent in India. Hence, the sum which has been paid to the non resident here being for services rendered outside India can by no stretch of imagination be said to be payment of sum chargeable under the Income-tax Act, 1961.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Customs have to take consequences of witness turning hostile – NDPS conviction confirmed – Better legal aid to be provided - right to defence includes right to effective and meaningful defence at the trial. – Supreme Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> right to defence includes right to effective and meaningful defence at the trial. The poor accused cannot defend effectively and adequately. Assigning an experienced defence counsel to an indigent accused is a facet of fair procedure and an inbuilt right to liberty and life envisaged under Articles 14, 19 and 21 of the Constitution. …..</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></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>