TIOL-DDT 1407 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1407 </font><br> 22.07.2010 <br> Thursday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">GST - FM seems to be serious about April 1, 2011 - landmark reform of indirect taxes is well within our reach. It is now for us to convert it into a reality</font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt22july.jpg" alt="Legal Corner Icon" width="420" height="215" hspace="5" border="0" align="absmiddle"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the meeting of the Empowered Committee of State Finance Ministers, yesterday, the FM said,</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I am particularly touched by the gesture made by the Finance Minister of Punjab by agreeing to subsume the Purchase Tax in the overall interest of the GST regime which will benefit the nation as a whole. It is this spirit which will build our economy to a strength unmatched in this region. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I am glad to inform you that the Government of India has decided to fully compensate the States for their revenue losses on account of CST reduction during the year 2009-10 and to release the balance outstanding amount to the States immediately. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In the year of introduction i.e. 1st April, 2011, the Central Government proposes to keep CGST lower rate for goods at 6% and standard rate at 10%. The services will be charged at 8%. Our request to the States will be to consider keeping the same rates i.e. the lower rate for SGST at 6%, standard rate at 10% and services at 8%. This mutually supportive approach will ensure that we have a single rate for CGST and SGST in the range of 12 to 20% in the first year of GST introduction.</font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">GST – a landmark reform of indirect taxes is well within our reach. It is now for us to convert it into a reality.</font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Nandan Nilekani to head Empowered Group </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the meeting the FM said, “ Earlier today, you have had the benefit of listening to a presentation by Shri Nandan Nilekani, Chairman, Unique Identification Authority of India wherein he has proposed a detailed roadmap and strategy for putting in place the requisite IT Infrastructure to handle work related to GST. Since this infrastructure needs to be in place well before the actual introduction of GST in April next year, decisions have to be made with great alacrity and speed. In order that no time is lost, we have proposed the constitution of an empowered Group chaired by Dr. Nilekani with joint representation from the Centre and the States which would be authorized to take decisions about the size, features and functionalities of such a system; to choose the appropriate technology for its implementation as well as to choose the vendor who would be tasked to deliver it in a time-bound manner. I will request an early approval of the Empowered Committee of State Finance Ministers to our proposal for constitution of this empowered group which, to my mind, should start functioning immediately. I would like to reiterate that the Centre is committed to provide all the support and assistance required to achieve homogeneity in the level of computerization across States.” </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">GST - CBEC Getting Ready - More Posts - Cadre Review </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> was informed recently by a Chief Commissioner that CBEC had constituted a Study Group headed by Ms. Jasdeep Singh, DG, Vigilance on “implementation of GST”. We understand that the Group had submitted its report to the Board last week. Though the Chief Commissioner had shown us the cover page of the report, he was not prepared to give us a copy as it was 'confidential'!!!!. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government is all about suppressing information from the 'citizen' who is their master and in whose interest, they are supposed to function. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you details of the report in the next few days, but as of now, we understand that the Report has proposed 215 Commissionerates for GST, which means more posts – more promotions in the Department. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC's Circular on Levy of Clean Energy Cess - issued on 24th June but released on 21st July</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> TRU is the largest manufacturer of notifications, clarifications, circulars, instructions – litigation! But they are very shy of making their creations public – for fear of criticism perhaps. They issued a letter on 'clean energy Cess' on 24th June, but never made it public till 21st July. The CBEC [TRU] clarifies that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Cess would be payable on quantity removed during a month on self assessment basis. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The due date for payment has been fixed as the 6 th (for e- payment) / 5th (for payment in any other manner) of the month following the next month to which the removals relate i.e. payment for removals during the month of July,2010 should be paid by the 5 th /6 th of September,2010. However, on imports the cess would be payable w.e.f. 1st July, 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Adjustment of excess payment, if any, is permissible by the next payment date. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Monthly return indicating the total quantity removed along with cess payment has been prescribed. Since this return is not compatible with ACES software electronic filing would not be feasible at this stage. Returns may hence be accepted manually by the jurisdictional Range/Division of Central Excise. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ General <em>penalty of Rs 10,000</em> has been prescribed for any contravention. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Specified goods are to be removed under cover of proper documents. However, this need not be an invoice . It has been prescribed in rule that any document specifying the quantity removed and name of the consignee would suffice.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although the levy of Clean Energy Cess comes into force on the 1st of July, 2010, the first payment from registered producers would be due <em><strong>only by the 5th of September, 2010.</strong></em> In the meanwhile, the office of Chief Controller of Accounts has already been requested to assign a minor head for the payment of this cess both on domestic and imported coal. Relevant communication conveying this to the field formations would be issued in due course. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TRU wants that the provisions of the relevant notifications and this letter may be brought to the notice of field formations. But why did they wait for more than a month to communicate this letter? </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/ces10_tru_letter.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Letter in F.No.354/72/2010-TRU; dated June 24 2010. </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Clean Energy Cess – Revenue Secretary writes to Coal Secretary </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> letter DOF No. 354/72/2010-TRU; dated July 06 2010, the Revenue Secretary, Sunil Mitra has written to the Coal Secretary, DK Sikri, requesting him to circulate information about the levy of cess and relevant provisions among the domestic producers/importers of coal and other stake holders. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Coal secretary has forwarded the Revenue Secretary's letter to 'Coal India', 'Singareni Colliers' and 'Neyveli Lignite Corporation' </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/coal.htm" target="_blank">Letter </a></strong></font></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"> – Friday's cases</font></strong></font></strong></font></p> <p align="justify"><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">Customs</font></strong> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">"PXI Controllers - Computers - Data Processing Machines" – Not Really – SC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PACs</strong>/Programmable Process Controllers and I.O. Modules by themselves are not measuring, regulating or controlling instrument (system). Physical variables such as temperature and voltage are measured by device, like sensors which constitute measuring and control systems. In other words, controllers and I.O. Modules each have a specific function to perform being parts of a measuring and control system i.e. Sensors. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs/Central Excise</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imported goods warehoused in premises of a 100% EOU and used for purpose of manufacturing in bond as authorized under Section 65 of Customs Act, 1962, cannot be treated to have been 'removed for home consumption'. CESTAT Larger Bench. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the matter reached the Tribunal, a question arose as to whether the removal of goods from the warehouse for consumption within the EOU should be treated as removed from warehouse and duty is attracted on such removal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no requirement under law to file ex-bond Bill of Entry for consumption in an EOU - Section 65 of the Act which deals with manufacturing in bond does not require any filing of ex-bond bills of entry or payment duty before taking warehoused goods for manufacture inside the bonded premises - Section 66 of the Act empowers the Central Government to exempt imported material used in a warehouse - It is thus clear that neither the scheme of the Act nor the provisions contained in the Manual require filing of ex-bond bills of entry or payment of duty before taking the imported goods for manufacturing in bond nor there is any provision to treat such goods as deemed to have been removed for the purpose of Customs Act, 1962 – reference answered in favour of the EOU. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessee receives enhanced compensation for standing trees on land acquired by State - it is to be taxed as capital gains and Sec 45(5) has overriding effect over Sec 45(1): HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COMPULSORY</strong> acquisition of land is a regular event in a developing economy. States are often compelled to acquire land and other assets of common citizens for development of infrastructure and other industries. An interesting aspect of such acquisition is that along with land, other assets situated at the same land are also acquired. What would be the tax treatment of such other assets if there is no cost involved in creating them. In the instance case, the issue is - Whether the provisions of section 45(5) have overriding effect over the provisions of section 45(1), and hence the AO was justified in taxing the amount of enhanced compensation received by the assessee on account of acquisition of standing trees pursuant to the implementation of Jagirdari Abolition Act:. And the answer is YES. </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 align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>