TIOL-DDT 1391 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1391 </font><br>
</strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30.06.2010 <br>
Wednesday</font> </strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Finance Act 2010 - Government Issues New Notifications</font>
</strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEVERAL</strong> Service Tax Notifications are issued in preparation for the new taxes and amendments effective 1st July 2010.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">No Tax on Advances received prior to 1.7.2010</font></strong>: Advance payment for new and expanded services, except commercial coaching and renting, exempted. - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_036.htm" target="_blank">Notification No. 36/2010 - Service Tax Dated: June 28 2010</a></strong></em> and <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/corrigendum_36.htm" target="_blank">Corrigendum dated June 29 2010 </a></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Services used for export of goods – exemption through refund:</font></strong> <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2009/stnot09_017.htm" target="_blank">Notification No 17/2009-Service Tax, dated the 7th July, 2009</a></strong></em>, amended to include Service provided by airports authority or any other person in any airport in respect of the export of said goods. - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_037.htm" target="_blank">Notification No. 37/2010 - Service Tax Dated: June 28 2010</a></strong></em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Construction in ports exempted:</font></strong> Service of commercial or industrial construction when provided wholly within the port or other port, for construction, repair, alteration and renovation of wharves, quays, docks, stages, jetties, piers and railways, exempted - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_038.htm" target="_blank">Notification No. 38/2010 - Service Tax Dated: June 28 2010</a></strong></em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Air Ticket – deemed Invoice:</font></strong> Service Providers are required to issue an invoice, bill or challan. Now that air passengers are liable to service tax, the airlines are also supposed to issue an invoice, bill or challan, containing the Number, registration no. Etc,. Service tax Rules are amended to stipulate that the air ticket will be deemed to be an invoice. - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_039.htm" target="_blank">Notification No. 39/2010 - Service Tax Dated: June 28 2010</a></strong></em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Abatement – several Changes:</font></strong> Abatement at the rates notified in Notification No. 1/2006 allowed for port services for rent a cab, Erection, Commissioning, GTA, Commercial or Industrial construction, construction of complex,transport of goods by rail - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_040.htm" target="_blank">Notification No. 40/2010 - Service Tax Dated: June 28 2010</a> </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Certain Services provided in ports and airports exempted:</font></strong> Cargo handling and storage and warehousing in relation to agricultural produce, transport of export goods in an aircraft, site formation, when performed wholly within a port or airport exempted. - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_041.htm" target="_blank">Notification No. 41/2010 - Service Tax Dated: June 28 2010</a> </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Commercial Construction in airports exempted:</font></strong> Commercial or industrial construction referred to in sub-clause (zzq) of clause 105 of section 65 of the Finance Act, when provided wholly within the airport,exempted from the whole of service tax leviable thereon -<em><strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_042.htm" target="_blank">Notification No. 42/2010 - Service Tax Dated: June 28 2010 </a></strong></em></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
Blunderland – Amends non-existing entries </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_040.htm" target="_blank">NOTIFICATION No. 40/2010 - Service Tax Dated: June 28 2010</a></em></strong> amends <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2006/stnot06_001.htm" target="_blank"><strong>Notification No. 1/2006</strong></a>. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No. (iii) of this notifications states, “(i) in S.No.6 for the entry in column (2), for the letters and brackets “(zzp)”, letters and brackets “(zzp) or (zn) or (zzl) or (zzm)” shall be substituted;” <font color="#FF6633"><strong>The only problem is there is no sl. No 6 in the table to the <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2006/stnot06_001.htm" target="_blank">Notification 1/2006</a></em>; it was omitted in 2008 and now the Board wants to amend the non existent entry! </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the problem with not having the updated copy of the notification. <strong>TIOL</strong> will be happy to provide the Board with the updated version of all its notifications. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Accounting Codes Notified for New Services </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a rare gesture of alertness and concern for the assessees, the Board has announced the accounting codes for the new services effective 1st July 2010. But here Sl.No. 8 refers to Special service provided by a builder etc, to the prospective tax buyers such as.... Now who are the tax buyers? Are they so obsessed with tax that the word just falls in? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2010/sercir124.htm" target="_blank">CBEC Circular No. 124/6 /2010-TRU Dated: 29 June 2010</a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Fraudulent claim of 4% SAD by unscrupulous importers – Board Alerts </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_102.htm" target="_blank">NOTIFICATION No. 102/2007-Cus dated 14.09.2007</a></em></strong> provides exemption in the form of refund of 4% SAD paid on goods imported and subsequently sold on payment of VAT/ST. Instances have come to notice of the Board where some importers of ‘timber logs' have undertaken certain processes and subsequently sold ‘sawn' or ‘cut logs' after payment of VAT. These importers are claiming the refund of 4% SAD paid at the time of importation of goods in terms of <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_102.htm" target="_blank">Notification No.102/2007-Customs dated 14.09.2007</a></em></strong>. As per the said Notification , refund of SAD is available only in case the imported goods are subsequently sold on payment of VAT, without carrying out any process. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In certain other cases, refund claims have been filed with the department wherein forged documents were submitted for availing the refund envisaged in the <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_102.htm" target="_blank">notification No.102/2007-Customs dated 14.09.2007</a></strong></em>. In such cases, it is reported that the importers were preparing duplicate set of invoices of the same serial number. Scrutiny of these two sets of invoices establishes that the invoice submitted to the department shows description of goods as ‘Malaysian round logs' whereas the invoices obtained from the buyer shows the description of goods as ‘imported timber'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC apprehends that this modus-operandi may have all India ramifications and wants the field formations to be alert. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_015.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 15/2010-Cus, Dated : June 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IIM PGDM holders eligible for CHA Licence! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REGULATION</strong> (6) (a) of ‘Customs House Agents Licensing Regulations (CHALR), 2004' specifies certain professional qualification such as MBA from any institute or University recognised by the Government to be possessed by an applicant or his employee to appear in examination under regulation 8 of the Regulations. It was clarified vide Board's <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2004/cuscir04_042.htm" target="_blank">Circular No.42/2004-Customs dated 10.6.2004</a></strong></em> that, no degree holders equivalent to MBA are entitled to appear in the said examination. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, references have been received in the Board from field formation pointing out that some well known institutes like Indian Institute of Management are not awarding MBA degree; rather such institutes are awarding PGDM which is equivalent to MBA. It is represented that these PGDM holders should be allowed to appear in regulation 8 examinations under CHALR, 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided by the Board that MBA degree or the equivalent degree PGDM, granted by an institute or university recognised by Government / AICTE under Ministry of Human Resource Development shall be acceptable qualification for degree holders to appear in the examination under CHALR, 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it a hypothetical question or has an IIM product applied to a Commissioner for a CHA Licence? </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_016.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 16/2010-Cus, Dated : June 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Vinyl Chloride - Reimposed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on Poly Vinyl Chloride Paste Resin also called as Emulsion PVC Resin, originating in, or exported from European Union, was imposed by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2004/ctariff04_104.htm" target="_blank">Notification No. 104/2004–Customs</a></strong></em> and was extended by notification No. 115/2009-Customs till 6.7.2010. Now the Government has imposed the anti dumping Duty on this product for another five years. The Government should be congratulated for bringing in this notification well ahead of the expiry date. And consequently Notification No. 115/2009 is rescinded. But shouldn't they have rescinded Notification No. 104/2004? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_070.htm" target="_blank"><strong>Notification No. 70/2010-Cus., Dated: June 25, 2010</strong></a> <strong>and</strong> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_071.htm" target="_blank">71/2010-Cus., Dated: June 25, 2010 </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Safeguard Duty on Soda Ash - Reimposed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> Safeguard Duty on import of Soda Ash from People's Republic of China, was imposed by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_037.htm" target="_blank">Notification No. 37/2009-CUSTOMS, dated the 20th April, 2009</a></strong></em>, which was valid till 5th November 2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the lapse of the above notification, Government again imposed the duty by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_122.htm" target="_blank">Notification No. 122/2009-Customs, dated the 5th November, 2009</a></strong></em> and this notification was to be valid till 19th April 2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has again imposed the duty w.e.f 28.6.2010 and valid till 19th April 2011. There was no safeguard duty for the period between 20th April and 27th June 2010! Was there no threat of market disruption to the domestic industry during this period or is it a condonation of the Babu's lack of memory? </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/2010/ctariff10_072.htm" target="_blank">Notification No. 72/2010-Cus., Dated: June 28, 2010</a><em> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_071.htm" target="_blank">71/2010-Cus., Dated: June 25, 2010 </a></em></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of Goods and Software - Realisation and Repatriation of export proceeds - Liberalisation </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> period of realisation and repatriation to India of the amount representing the full export value of goods or software exported,was increased from six months to twelve months from the date of export, subject to review after one year. This was done on 30th June 2009. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue has since been reviewed and it has been decided, in consultation with the Government of India, to extend the above relaxation up to March 31, 2011. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2009/rbi09cir057.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Circular No. 57 Dated: June 29, 2010</font></strong></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"> – Thursday's cases</font></strong></font></strong></font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"><strong><font color="#663399">Service Tax</font></strong> </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">BAS - Promoting real estate business in air - Jetlite directed to pre-deposit Rs. 100 Crores - Law is well settled that levy and collection of tax is regulated by law and not by contract - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REAL</strong> Estate business promotion in the air, but tax down on Earth. The former Sahara Airlines were to give extensive publicity to the Housing projects of Sahara Housing and got paid. The Service Tax Department has demanded about 129 Crores with an equal penalty. And CESTAT has ordered pre deposit of Rs. 100 Crores! </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Expenses incurred in relation to manufacturing of goods sold to third parties on clearing and forwarding basis, for eventually exporting same are allowable deduction: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the High Court is - Whether the expenses incurred by the assessee in relation to manufacturing of goods sold to other firms on clearing and forwarding basis are allowable though the goods are actually exported by other firms. And the answer is YES. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether imported Customs Duty paid Goods would come within ambit of expression 'excisable goods' - matter referred to Larger Bench: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bench directed the Registry to place the records before the President to constitute a Larger Bench to consider and decide on the following issue:- “Whether imported, customs duty-paid goods falling in any of the Schedules to the CETA would come within the ambit of the expression “excisable goods” used in the text of sub-section (1) of Section 11D of the Central Excise Act.” </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="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p><font color="#FF6666" 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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