TIOL-DDT 1280 · 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> <p align="justify"><font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1280 </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong></strong></font></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><br> 18.01.2010 <br> Monday </strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Foreign salary remittance – liberalised facility </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ARE YOU </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. A citizen of a foreign state, resident in India, being an employee of a foreign company? Or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A citizen of India, employed by a foreign company outside India and in either case on deputation to the office /branch /subsidiary /joint venture in India of such foreign company? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then, you can open, hold and maintain a foreign currency account with a bank outside India and receive the whole salary payable to you for the services rendered to the office/branch/subsidiary/joint venture in India of such foreign company, by credit to such account, provided that income-tax chargeable under the Income-tax Act,1961 is paid on the entire salary as accrued in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are you a citizen of a foreign state, resident in India being in employment with a company incorporated in India? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then, you can open, hold and maintain a foreign currency account with a bank outside India and remit the whole salary received in India in Indian Rupees, to such account, for the services rendered to the Indian company, provided that income-tax chargeable under the Income-tax Act, 1961 is paid on the entire salary accrued in India. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2009/rbi09cir026.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A.P. (DIR Series) CIRCULAR NO 26/RBI., Dated: January 14, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP – Focus market scheme – Policy amended </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per para 3.14.2 of the Foreign Trade Policy, the entitlement for the FOCUS MARKET SCHEME (FMS), is </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exporters of all products to notified countries (as in Appendix 37C of HBPv1) shall be entitled for Duty Credit Scrip equivalent to 3 % of FOB value of exports (in free foreign exchange) for exports made from 2 7.8.2009 onwards, unless a specific date of export / period is specified by public notice/notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The text marked in red is inserted now. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not025.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT NOTIFICATION NO. 25 /2009-14, Dated: January 15, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TDS on salaries – CBDT releases Circular </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVERY</strong> year the CBDT issues a detailed Circular on TDS on salaries, which is a sort of handbook for TDS deductors, especially in Government offices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Interest </font></strong><font color="#FF6633">, <strong>Penalty & Prosecution for Failure to Deposit Tax Deducted</strong></font><strong>: </strong>If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person 10 shall be liable to pay <strong><font color="#FF6633">simple interest</font> </strong>at one percent for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which the tax is actually paid. Such interest, if chargeable, has to be paid before furnishing of quarterly statement of TDS for each quarter. Section 271C lays down that if any person fails to deduct tax at source, he shall be liable to pay, by way of <strong><font color="#FF6633">penalty</font> </strong>, a sum equal to the amount of tax not deducted by him. Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time the tax deducted at source by him, he shall be<font color="#FF6633"> <strong>punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along</strong></font><strong> </strong>with <strong><font color="#FF6633">fine.</font> </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Furnishing of Certificate for Tax Deducted: </font></strong>According to the provisions of section 203, every person responsible for deducting tax at source is required to furnish a certificate to the payee to the effect that tax has been deducted and to specify therein the amount deducted and certain other particulars. This certificate, usually called the “TDS certificate”, has to be furnished within a period of one month from the end of the relevant financial year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Quarterly Statement of TDS:</font> </strong>The person deducting the tax (employer in case of salary income), is required to file Quarterly Statements of TDS for the periods ending on 30th June, 30th September, 31st December and 31 st March of each financial year, duly verified, to the Director General of Income Tax (Systems) or M/s National Securities Depository Ltd (NSDL). These statements are required to be filed on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/it10cir01.pdf" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Circular No. CIRCULAR NO.1/2010 - F.No.275/192/2009IT(B)] Dated: January 11, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap and poppy seeds increased </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has increased the Tariff Value of Brass Scrap from US Dollars 3476 to 3490 per MT. The tariff value for poppy seeds is increased from 3144 to 3627 Dollars. All other items remain unchanged. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_006.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO. 6/2010-CUSTOMS (N.T.) Dated: January 15, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Government's Policy of Appointment on Compassionate Grounds – Separate Cells to be Constituted - DOPT Instruction </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Departmental Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, Rajya Sabha in Paragraph 9.4 of the 23rd Report on Government Policy of Appointment on Compassionate Grounds envisaged that if the Government's effort is to help the family of the deceased employee then there must be a separate Cell in each of the Ministries or Departments which will cater to only compassionate appointment cases. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The cell should send periodical information on number of vacancies, number of applications received, time taken to dispose of the cases, reasons for not disposing favourably etc. to the head of the Department. The committee has, therefore, recommended that the Government should come forward with certain new guidelines for the benefit of the employees like creation of a separate Cell, etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter has been considered by DOPT. It is not felt desirable for the small Departments to have a separate cell. It is, however, advised that bigger organizations should create a separate cell for handling large number of cases for compassionate appointments in order to ensure timely and meticulous processing of applications. The cell should be entrusted, inter-alia, with the responsibilities as envisaged in the Report of the Committee. </font></p> <p align="justify"><a href="B:%5CTaxindiaonline.com%5CRC2%5Cfiles%5Cpitara%5Cwelfare%5Cappointment_compassionate_ground.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOPT OM No. 41013/1/2007-Estt.(D), Dated: January 14, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Procedure for payment of pension / other benefits to All India Service Officers retiring from Central / State Governments – Liability under Sixth Pay Commission </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue of bearing the liability of arrears of All India Service officers related to Sixth Pay Commission by the Government of India has been considered in consultation with the Ministry of Finance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided that the arrears will be paid in two instalments of 40% & 60% in 2008-2009 and 2009-2010 respectively for All India Service officers. Arrears paid up to 31.3.2008 are debitable to State Governments and arrears from 1.4.2008 are debitable to the Central Government. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the State Government are requested take necessary action in accordance with the above. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=pitara/6th_pay_commission/office_memorandum_45.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT Memorandum Dated : January 12, 2010 </font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Voluntary Disclosure Scheme in UK </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last week, the HM Revenue & Customs targeted doctors under the Tax Health Plan (THP) wherein Doctors were advised to declare their undisclosed income and avail a 90% waiver of penalty. This week the scheme is likely to be extended to Vets and Barristers. It seems the Revenue Authorities already have information about tax evasion by these professionals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the Finance minister should seriously think of some such scheme in India for all the tax evaders. The Indian Black money economy must be at least ten times the white one and some voluntary disclosure scheme will bring in some of that black money into the white field! </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font></strong> <font color="#FF6633" size="5"><strong>tiol</strong></font></font><font color="#006600">-</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'>Tuesday's cases<o:p></o:p></span></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"><font color="#663399">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Supplementary Invoice – Interest – when differential duty is payable, interest is liable – <em>SKF </em> decision followed -<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2009/2009-TIOL-82-SC-CX.htm" target="_blank"> 2009-TIOL-82-SC-CX.</a></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> does differential price signify? It signifies that value, which is the function of the price, on the date of removal/clearance of the goods, was not correct. That, it was understated. Therefore, the price indicated by the supplementary invoice is directly relatable to the value of the goods on the date of clearance, hence, enhanced duty. This enhanced duty is on the corrected value of the goods on the date of removal. When the differential duty is paid after the date of clearance, it indicates short- payment/short-levy on the date of removal, hence, interest which is for loss of revenue, becomes leviable under Section 11AB of the Act. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Transfer Pricing - Sec 92 - assessee is captive unit of Switzerland-based company - determination of Arm's Length Price - selection of comparables - merely because a comparable is loss-making it cannot be excluded from list of comparables for computation of ALP: ITAT Special Bench </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRANSFER PRICING</strong> is a new piece of legislation in India, which revolves around the concept of computation of Arm's Length Price (ALP). And determination of ALP hinges on fair and right selection of uncontrolled comparables from the industry which helps in working out the unvitiated profits which can in turn be attributed to the transactions between the parent company and its associated enterprises. But, can loss-making companies be also chosen as a comparable? Should companies with extraordinary profits be excluded from the list of comparables? How strictly the parameter of FAR Analysis should be applied? There are many such questions which have been decided in the latest Special Bench decision of the Tribunal. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation -Related person - Extra Duty Deposit of 1% - Assessment to be treated as provisional - Final assessment to be passed: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> grievance of the petitioner arises only on account of the fact that in the background of the order made long after the import, the respondents should have either made a final assessment without the demand for 1% EDD or alternatively with 1% EDD , it could only be a provisional assessment. Hence, with the collection of 1% EDD, the contention of the respondents that it is the final assessment clearly goes against the order dated 6.6.2008. In the circumstances, the collection of 1% EDD is totally unjustified. Hence, the petitioner has to be granted the refund of the said amount in terms of the order dated 6.6.2008 Circular 268/07 dated 10.12.2007 within the time frame as referred to in the provisions of the Act or otherwise pass the assessment and grant the refund to the petitioner. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>State Excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>International Policy without Indian Legislation - Courts cannot interfere; State has a very wide discretion in selecting the persons or objects it will tax; Imported wines can be taxed higher : Bombay High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a long line of judgments, the Supreme Court has held that <strong><font color="#FF6633">the State has a very wide discretion in selecting the persons or objects it will tax</font>, </strong> and that exercise is not open to attack unless within the class chosen by the State, there is discrimination. Undisputedly, the State has wide discretion to impose higher taxes or levies. Several fiscal considerations are involved in the Government's decision to impose higher tax on certain items. The courts are therefore, not expected to interfere with the discretion of the State unless a very strong case of hostile discrimination is made out and unless the taxing statute operates unequally within the range of its selection. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p align="justify"><font color="#FF6633" 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>