TIOL-DDT 1591 · 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="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1591 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>19.04.2011 <br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tuesday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Imported Fertiliser to attract 1% CVD, but complicated language continues </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINALLY </strong>the Government has notified a 1% CVD for imported fertilisers. This was a major issue raised in our Mumbai Seminar on 18 March 2011. <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12277" target="_blank">DDT 1572</a> </strong>covered it as: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">1% duty on imported goods</font>: </strong>A number of goods which hitherto attracted Nil rate of duty have been notified under Notification 1/2011 CE dated 1.3.2011 with an effective rate of 1% subject to the condition that no CENVAT Credit shall be availed on the inputs/input services. When these goods are imported, the CVD is levied at 5% as the condition of non-availment of CENVAT Credit is non-verifiable for imported goods. This is leading to disparity and to cite an example, <strong><font color="#FF6633">fertilisers attract 5% CVD when imported and when manufactured within India, it attracts only 1%</font>. </strong> It is suggested that an unconditional exemption notification under Section 3 of the Customs Tariff Act, 1975 may be issued for these goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As to whether 1% duty is applicable to imported goods, the JS TRU clarified that 1% rate will not be applicable for CVD purposes. [Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12307" target="_blank">DDT 1577 </a></strong>] </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12277" target="_blank">DDT 1572</a> </strong>, it was mentioned, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Fertilisers Exempted or Not? </font></strong><em>“ All goods, other than those which are clearly not to be used as fertilisers” </em> are exempted. The language of the Notification appears to be unnecessarily complicated and it is really not clear as to whether the Fertilisers still continue to enjoy exemption by virtue of Notification No. 04/2006. The scope of the exemption needs to be clarified. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, a Commissioner asked me, “ <em>Can you make out as to why instead of just saying "<strong><font color="#FF6633">Fertilizers</font></strong>", they have used this long-winding expression? </em>” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consultants and Commissioners have difficulty in understanding the expression – what about poor assesses? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has exempted <strong><em><font color="#FF6633">all goods, other than those which are clearly not to be used as fertilisers</font> </em></strong>, from so much of the additional duty of customs as is in excess of 1% ad valorem. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is the Government bent upon making even simple notifications so complicated? </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/2011/ctariff11_035.htm" target="_blank">Notification No. 35/2011-CUS, Dated : April 15, 2011 </a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Courier Imports and Exports (Electronic Declaration and Processing) Regulations – Board Clarifications </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>REPRESENTATIONS</strong> were received from the trade and industry and also from Courier Companies that requirement of mandatory IEC Code for low value dutiable consignments in Form ‘D' / CBE-XIII is onerous as consignments under this category constitute a large chunk of imports through Courier Mode. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has decided that in order to redress the problem of Courier Companies and to streamline the procedures under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, IEC Branch Code in case of Form ‘D' / CBE-XIII and Form ‘E' / CBE-XIV are to be treated as non-mandatory. Similarly, AD Code of the Bank in Form ‘E' / CBE-XIV for dutiable goods shall also be treated as non-mandatory. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is decided that transition period in so far it relates to examination referred to regulation 8 of CHALR, 2004 is extended upto 31.12.2011. The Board expects that this time limit would meet the requirement of authorized couriers or their employees to fulfill the obligations as stipulated in regulation 12 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. The Board also decided that necessary examination should be conducted by DGICCE for this purpose. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is decided that all employees of authorized Courier will be eligible to appear in the examination referred to in Regulation 19 of CHALR, 2004 as one time measure upto 31.12.2011, so that all employees of the Authorised Courier having adequate knowledge of Customs Laws and Allied Acts will be able to meet the obligations as stipulated under regulation 8 and 12 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 by that time. However, such employees cannot work for CHAs. The Board desires that examinations under regulation 19 of CHALR, 2004 be got conducted by respective Commissionerates to meet this objective. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is further clarified that in case of import of documents, gifts and samples and low value dutiable consignments (Form CBE-XI, Form CBE-XII and Form CBE-XIII), the authorization of consignee may not be required at the time of clearance of goods. The same is required to be obtained at the time of delivery of consignment to the consignee. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_021.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 21/2011-Customs, Dated: 18 th April, 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>If you steal, you must pay Income Tax on stolen Property – Complicated US Income Tax Laws! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>THE</strong> Tax Guide 2010 for Individuals”, published by the US IRS is full of wry humour and tries to help individual taxpayers to file their tax return through 295 complicated pages of the book. Even a Harvard professor of economics would find it difficult to sift through 295 pages to find his tax liability. Some pearls of wisdoms from the great IRS treatise. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Stolen property. </em></strong><em> If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you returned it to its rightful owner. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thieves beware – the Police may let you off, not the IRS. Similarly Bribes are not exempted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Bribes </em></strong><em>: If you receive a bribe, include it in your income. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Illegal activities </em></strong><em>: Income from illegal activities, such as money from dealing illegal drugs, must be included in your income. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Family Pet </em></strong><em>: Loss of property due to damage by a family pet is not deductible as a casualty loss. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Example </em></strong><em>: Your antique oriental rug was damaged by your new puppy before it was housebroken. Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>FMV of stolen property </em></strong><em>: The FMV of property immediately after a theft is considered to be zero, since you no longer have the property. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Example </em></strong><em>: Several years ago, you purchased silver dollars at face value for USD 150. This is your adjusted basis in the property. Your silver dollars were stolen this year. The FMV of the coins was USD 1,000 just before they were stolen. Your theft loss is USD 150. </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may not be worth the trouble to recover stolen property as you have to include the value in your income and file yet another complicated return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you survive Sonic Booms and Shipwrecks, you get a deduction, but if your house is eaten away by termites, you have no luck as the loss did not happen suddenly as in a shipwreck. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally in the US, a wife and husband can file a joint return, but if there is a divorce, each spouse will be individually and jointly responsible, even if the divorce settlement states that the other erstwhile partner is not responsible. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In addition to the tax payable, the IRS has asked the tax payers to make a contribution to reduce the public debt. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>From “The Tax Guide 2010 for Individuals”, published by the US IRS </em></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>President Obama's Income falls, but is still a millionaire </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY </strong>was the last date for filing Income Tax returns in the US and yesterday itself, the White House released President Obama's tax return. The Obamas had an income if 1.73 million dollars in 2010, compared to 5.5 million dollars in 2009. Their income is mostly from sale of the President's books. The Obamas paid a total of USD 454,00 in federal taxes andUSD 52,000 in Illinois state taxes. The President and his wife donated a total of 245,000 dollars for charity. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe we should make it mandatory for our babus and netas to make their IT returns public. </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"> - Wednesday'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">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RENTAL charges collected in respect of cylinders for supply of gases cannot form part of the assessable value of gases: CESTAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the Indian Oxygen Ltd., <strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-88-SC-CX.htm" target="_blank">2002-TIOL-88-SC-CX</a>)</font> </strong> case, the apex court has clearly held that the supply of cylinders is an ancillary activity to the manufacture of gases and, therefore, the consideration received for the same cannot be included in the assessable value of the gases. Similarly, in the case of CCE, Meerut vs. Bisleri International Pvt. Ltd. reported in <strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2005/2005-TIOL-97-SC-CX.htm" target="_blank">2005-TIOL-97-SC-CX</a>)</font> </strong> the rent on containers i.e rent equivalent to interest collected by the assessee on account of delay in returning of empty crates/bottles cannot form part of the value of aerated waters and, hence, not includable in the assessable value. </em></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>WHETHER when assessee preaches sufism, a part of Islam, it can even then claim Sec 80G benefits available to a charitable organisation - NO, rules High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issue before the HC is - Whether when assessee preaches Sufism, a part of Islam religion, it can even then claim Sec 80G benefits available to a charitable organisation. 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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SCN did not propose to demand service tax under head 'Scientific and Technical Consultancy Services' – confirming demand under said category is not proper – Pre-deposit waived and stay ordered: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Service Tax demand was raised against the appellant for the period 01.04.2004 to 31.03.2005 in respect of “Intellectual Property Rights Services”. The payment of Rs.26,71,843/- for the period from 10.09.04 to 31.03.05 in respect of “Intellectual Property Right Services” which was introduced as a taxable service with effect from 10.09.2004 was appropriated against the demand. The balance amount of Rs.15,57,692/- demanded as service tax has been partly confirmed under the head “Scientific and Technical Consultancy Services” and partly under the head “Intellectual Property Right Services”. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements </strong></font></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 Day. </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> </body> </html>