TIOL-DDT 1565 · the untouched capture
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<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1565 </font><br>
10.03.2011 <br>
Thursday </strong></font></div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We Told You Notification No. 2/2011 Service Tax </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>our Budget Analysis, <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12171" target="_blank">Money Changers to pay more Service Tax: Govt. Goofed up calculation in example 1 of notification </a></strong>, we had pointed out that the example given in the notification is wrong. Now they have corrected it with a corrigendum. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/corrigendum_02_2011.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOR Corrigendum to Notification No. 2/2011-Service Tax; Dated: March 08, 2011. </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appendix 25A of HBP amended periodicity of Bank Guarantee </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Appendix 25A of Handbook of Procedures Vol.I (Appendices and Aayat Niryat Forms) 2009-2014: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Validity of Bank Guarantee is harmonized with provisions of Customs Circular No. 58/2004 dated 21.10.2004 as amended from time to time. In addition, specific contact details like E-mail ID, Phone Number/FAX Number of the exporter and the Bank are to be provided. </font></p>
<p align="justify"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn038.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 38(RE-2010)/2009-2014; Dated: March 09, 2011. </font></a></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SION for new product Woollen blended Worsted yarn </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has notified a new SION No. J-374 in respect of the export product Woollen blended Worsted Yarn. The quantity allowed is 1.10 Kg / Kg content in export. There was no SION for this export item earlier. </font></p>
<p align="justify"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn039.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 39(RE-2010)/2009-2014; Dated: March 09, 2011. </font></a></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Point
of Taxation Rules The Dhobi Ghat dilemma & ...</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I</strong> have a dry cleaning business. I pay service tax. So far I have been paying service tax on the amounts collected in a particular month by 5 th of next month. It was easy and going on smoothly. I was told that this method of payment of service tax has been amended and from 1.4.2011, I have to pay service tax on service rendered, bill issued or payment received, whichever is earlier. I tried to visualise the quantification of tax liability in a month from 1.4.2011, and I find it very difficult and I have to employ atleast two or three people exclusively for monitoring the service tax liability. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let me explain with an example. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the month of April 2011, let us assume I received clothes from Mr. X, Mr. Y and Mr. Z. I get some advance from X, and no advance was received from Y and Z.? The washing of all the clothes given by Y was completed in April. I raised the Bill on Z in April, but no washing was done in April. Now I have to compute the liability as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">X - Advance received is liable to tax in April 2011 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Y- Service rendered is taxable in April 2011 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Z- Bill issued so tax has to be paid in April 2011. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In May, I completed the washing of clothes given by X in April. I also issued the Bill to X and Y and got the payments.? I washed the clothes of Z in May 2011. I got fresh clothes from Y and some advance in May 2011 in addition to the amount for April 2011. Z paid the amount for the old bill and I washed some new clothes for him in May 2011, and no bill was issued or advance collected. Now my liability for May is </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">X - Service rendered advance received in April 2011 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Y - No service tax on amount collected for April bill. The Advance is taxable in May 2011 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Z - No service tax is due since already paid in April. But service is rendered for fresh clothes washed which is taxable in May 2011. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the confusion if I have three customers. Imagine if I have 200 of them. Do the lawmakers need to trouble the taxpayers so much? Why can't they prescribe one single mode for determining the liability based on Bill issued or payment received? I wish only one thing. Those who make the laws should spend atleast six months with a business house to understand how business takes place. You can't just sit in an ivory tower and make laws which are difficult to follow. Give the service tax Return to any officer of the department and ask him to fill it without any mistake in a single attempt. Then they will understand the difficulty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What applies to the Dhobi applies <em>mutatis mutandis </em>to the advocate. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Out sourcing of data entry work at CPCs CBDT Chairman Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CPC business model has emerged only after prolonged deliberations, BPR study, various decisions of Government & ground realities. CPC is a major administrative reform which aims to add capacity, enhance efficiency & provide taxpayer services of international standards. However, apprehensions have been raised by staff unions about outsourcing of data entry work in CPCs . </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Data entry of all carried forward & current returns in stipulated time frame is impossible without the out-sourcing of data entry of paper returns at CPC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Out sourcing of data entry work at CPC is as per the approval of Union Cabinet & Union Finance Minister </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It is a non- core and non- critical function whose outsourcing is as per the policy of the Government. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the members of the income tax pariwar are requested to work whole heartedly & make CPCs a resounding success. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/chairman_desk.pdf">From the Desk of Chairman, CBDT No. 15; Dated: March 08, 2011. </a></font></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Five Day Remand for arrested Customs Officers </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> seven Customs officers arrested by CBI in Gujarat as reported in yesterday's DDT were remanded to CBI custody for five days. The CBI sought remand on the ground that the arrested people indulged in malpractice and were allegedly involved in large-scale corruption that took place between July and October last year. The CBI alleged that it required their remand to investigate the whole nexus. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Budget in Parliament IPL v BPL </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Budget Debate in Parliament really brought out the best of our MPs unfortunately there were not many listeners! We bring you some extracts: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IPL
v BPL Mr. Shivkumar Udasi</strong>: Over the years, the Budgets have created
two Indias one for IPL and another for BPL. The IPL is for the urban India
and the BPL is for the rural poor. The gap between the poor and the rich
is becoming more and more, though budgets are being presented in this august
House. The language of the Budget also reveals how the society thinks in
India. Concessions to the rich are called incentives; those for the poor
are called relief, but when it comes to the middle class, it says they
are sops. I want to bring to the notice of the House that in the last year's
Budget Papers, there was a document it is also there in this year's Budget
Papers called statement of revenue foregone. In the last two years, the
revenue foregone for the rich people is about Rs.9,16,399 ? crore. ?? In
this country, we all know that there are 12 crore farmers. It will be very
interesting to know that the number of ? marginal farmers, those who have
the holding of below one hectare of land, is around 58 per cent. They own
only 15 per cent of the area, whereas the number of small farmers, who
have the land area of 1-2 hectares, is 19 per cent. Both put together,
77-80 per cent of the farmers are small and marginal. The area, put together,
among them is 33 per cent only. I would request the Finance Minister to
forego the interest rate applicable to the farmers.? In this way, it can
forego about Rs.40,000 crore which is peanut compared to the large scale
foregone revenues relating to the top 2 per cent of the population of this
country. ?? Perhaps the worst idea in this Budget is to slap five per cent
service tax on health care which will put affordable medical treatment
further beyond the reach of the common man.? I want that to be reduced. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tax Exemption Limit to 2.1 Lakhs for women Ms. Priya Dutt</strong>: This year Government has decided to increase the income tax exemption limit for individual male tax payers from 1.6 lakh to 1.8 lakh, however, for working females, the limit has been kept same at 1.9 lakh. My submission is that the benefit of 20,000 Rs may be extended to working female also. The exemption limit for female tax payers should be increased to 2.10 lakh. Working women have to perform multiple tasks. She has to take care of her household and her children apart from her work at her place of employment. For last many years the Govt, has been giving special tax exemption of Rs. 40,000 to working women. I hope the Govt, would reconsider this. The government has decided to put service tax on diagnostic centres and hospitals having more than 25 beds with AC. I would request the government to reconsider this issue. The service tax will be ultimately passed on to the patients and result in health care becoming more expensive for the general public. Sanitary napkins are not a luxury but an essential item. Due to lack of proper hygienic sanitary napkins adolescence girls and women suffer from various diseases etc. specially cervical cancer. I would request to reduce the Excise Duty on sanitary napkins to zero per cent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What do farmers want? Mr L. Rajagopal</strong>: I would like to recollect the words of Mahatma Gandhi wherein he had said: Political freedom has no meaning for the millions if they do no know how to employ their enforced idleness.? What do the farmers want today? Apart from remunerative prices, they want water for every acre of land.? It is our duty now, to ensure that every inch of land is properly irrigated and water is flown and supplied through flood irrigation. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Imported apples from USA - detained by Customs - As the goods are perishable, conditional release ordered - High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>the goods in question are perishable in nature, the Court found it appropriate to pass orders, directing the respondents to release the goods in question. The petitioner shall pay 30% of the differential duty, and for the balance amount, the petitioner shall furnish a personal bond. On compliance of both the conditions, the respondents shall release the goods in question, forthwith. </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">Income tax - Whether CBDT Circular revising monetary limits for filing Departmental appeals will have retrospective effect, and will apply to appeals pending prior to issuance of Circular - NO, rules HC Full Bench </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Full Bench is - Whether CBDT circular prescribing revision of the monetary limit for filing of appeals by the Department is applicable to appeals already filed prior to the date of the issuance of the circular, irrespective of prescribed monetary limit applicable at the time of filing of that appeal. And the answer is NO. </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Stay No Stay merely because a prima facie case has been shown; Tribunal's Stay of over 100 Crores quashed High Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>is a Revenue appeal in the High Court against a stay order of the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand; Three aspects to be focused while dealing with the applications for dispensing of pre-deposit are: (a) prima facie case, (b) balance of convenience, and (c) irreparable loss; Interim orders ought not to be granted merely because a prima facie case has been shown; The balance of convenience must be clearly in favour of making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the interest of public revenue; consideration of undue hardship, and imposition of conditions to safeguard the interests of revenue have to be kept in view; When the Tribunal decides to grant full or partial stay, it has to impose such conditions as may be necessary to safeguard the interests of the revenue. This is an imperative requirement; </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 DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Time. </font></p>
<p align="justify"><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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