TIOL-DDT 1593 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1593 </font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>21.04.2011 <br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Thursday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Board approves Service Tax Audit Manual 2011 - To govern Service Tax Audits henceforth </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>CHECK </strong>whether the Service Tax on the value of taxable services received during any Calendar months is credited to the Central Government account by the <strong>25 th of the month </strong> immediately following said Calendar month </em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Is there system of receiving service charges in advance and providing the services but raising the bill at a later date to have financial accommodation and defer the payment of service tax? </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Check whether the TR-6 challan, which have been used for depositing service Tax, is yellow in color and that they are serially numbered for the financial year. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are some of the (out-dated) issues the auditors need to verify during the audit as per the existing audit manual. The existing Service Tax Audit Manual has been in use since 2003. Many changes have been made to the provisions of the Service tax law since 2003 and with the experience gained while conducting audits and rapid change in service tax law over the years, growth in service tax categories, assessee base as well as revenue, a need was felt to update the manual. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this connection, Board had set up a Working Group in 2009 to update the existing Service Tax Audit Manual. The manual prepared by the Working Group was discussed in Board meetings for considering the various amendments and proposals to be included in the manual. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has since approved the Service Tax Audit Manual 2011 and the same will be circulated by the Directorate General of Audit ( CBEC's website says that the new manual is available on DG Audit's website but it is accessible only to departmental officials ). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All Service Tax audits would henceforth be carried out in accordance with the principles laid down in the new Manual and the extant prevalent instructions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board states that any suggestions for improvement, shortcomings, corrections and feedback pertaining to the said Manual should be brought to the notice of Directorate General of Audit. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Since this Manual is for the use of departmental officers only, the feedback is also expected only from departmental officers. It would have been better had the DG Audit or the Board sought feedback from the real stake holders viz., service tax assessees. </font></strong></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir135.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No.135/4/2011-ST , Dated: April 19, 2011</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Accounting Codes notified for two new taxable services </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> office of Principal Chief Controller of Accounts, CBEC has notified accounting codes for the new taxable services under the Major Head “0044-Service Tax” which are as follows: </font></p>
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
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<td width="87" rowspan="2" valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sl.No .</strong></font></div>
<div align="center"></div></td>
<td width="1066" rowspan="2" valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Taxable Services</strong></font></div></td>
<td colspan="3" valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Accounting Code </strong></font></p></td>
</tr>
<tr>
<td width="94" valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tax Collection </strong></font></td>
<td width="69" valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Other Receipts </strong></font></td>
<td width="69" valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Deduct Refunds </strong></font></td>
</tr>
<tr>
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1) </strong></font></div></td>
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(2) </strong></font></div></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) </font></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service provided by a restaurant having air-conditioning and license to serve alcoholic beverages in relation to serving of food or beverage, including alcoholic beverages or both, in its premises [Finance Act 1994, Section 65(105) ( zzzzv )] </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441067 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441068 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441069 </font></p></td>
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<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service provided by a hotel, inn, guest house, club or campsite in relation to providing of accommodation for a continuous period of less than three months[Finance Act 1994, Section 65(105) ( zzzzw )] </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441070 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441071 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">00441072 </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that the description of taxable services provided at column (2) of the table for ease of reference, does not restrict the scope of the taxable service. Further, the sub-head “other receipts” is meant for interest, penalty, leviable on delayed payment of service tax and the sub-head “deduct refunds” is not to be used by the assessees, as it is meant for the Revenue/Commissionerates while allowing refund of tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ‘Primary' Education Cess on all taxable services will be ‘booked' under accounting code 00440298 and Secondary Higher Education Cess will be booked under accounting code 00440426. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If NSDL has issued any dummy codes for revenue collection and interest/penalty for the above services, all these dummy codes should be treated as void and may be replaced by the correct account codes as stated above. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir136.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No.136/5/2011-TRU, Dated: April 20, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Levy of Service Tax on assistance provided for processing visa applications - Board's Clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> clarification was sought from the Board as to whether service tax liability would arise on the assistance provided by visa facilitators, to individuals directly, for processing of visa applications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board examined the issue and clarified as follows: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Visa facilitators, merely facilitate the procurement of visa and directly assist individuals who intend to travel abroad, to complete the immigration formalities. Visa facilitators collect certain statutory charges like visa fee, certification fee, attestation fee, emigration fee, etc. from the visa applicant, which are remitted to the respective authorities, and in addition collect service charges for themselves as remuneration for the assistance provided by them to obtain the visa. Such a service provided by a visa facilitator, in the form of assistance to individuals directly, to obtain a visa, does not fall under any of the taxable services under section 65(105) of the Finance Act, 1994. Hence service tax is not attracted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Assistance provided by a visa facilitator, for obtaining visa, to a visa applicant or for foreign employer does not fall within the scope of supply of manpower service. Visa facilitators, while providing visa assistance directly to individuals does not act on behalf of the embassies, as agents of the principal and hence service tax is not leviable within the meaning of business auxiliary service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Also where the assistance is rendered to an individual directly, by a visa facilitator, and the visa applicant pays the service charge on his own (meaning such service charge is not borne by any business entity), the same cannot be considered as support service for business or commerce. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ However, service tax is leviable on any service provided other than assistance directly to individuals for obtaining visa, falling under the description of any taxable service, as classifiable under the appropriate heading. To cite a few instances, where in addition to rendering assistance directly to individuals for obtaining visa, visa facilitators may also act as agents of recruitment or of foreign employer, in which case, service tax is leviable to the extent under the service of ‘supply of manpower'. In certain other cases, for example, a visa facilitator, may be rendering visa assistance to individuals who are employed in a business entity, but the service charge may be paid by the business entity on behalf of those individuals, to the visa facilitator, in which case, service tax is leviable under ‘business support service'. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir137.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No. 137/6/ 2011- ST , Dated: April 20, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Gummy Pizza containing beef from China and Indonesia - Board's Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of Paras (3) and (4) of DGFT Notification No. 29(RE-2000)/1997-2002 dated 7.08.2000: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Import of Beef in any form and import of products containing beef in any form is prohibited; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) All consignments of edible oils and processed food products, imported in bulk, shall carry a declaration from the concerned exporter on the shipping documents that the consignment does not contain beef in any form; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) All consignments of edible products, imported in consumer packs, shall carry a declaration on the label of the package that the product does not contain beef in any form. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, it has come to the notice of the Board that despite prohibition on import of beef in any form and import of products containing beef in any form, “Gummy Pizza”, which is reportedly containing beef, is imported in large quantities from China and Indonesia . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of this Board <em>desires </em> that import policy in this regard should be scrupulously implemented by the field formations and suitable legal action would be warranted in case any violation is noticed including in the reported cases of import of Gummy Pizza said to contain beef. Any deviation in this regard shall be viewed seriously. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board directs that suitable instructions may be issued to the field formations for strict compliance and cases if any, of such imports in the past may be thoroughly investigated and reported with all details to the Board. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Gummy Pizza is not actually pizza, it is a novelty sweet. A chewy pizza shaped sweet cut into slices and packed in a pizza box. </strong></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_009.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Instruction F.No. 528/36/2011-STO (TU), Dated: April 19, 2011 </strong></font></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Prohibition on export of wheat Products - Exemption for export of wheat flour to Maldives for year 2011-12</font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Notification No. 33(RE-2007)/2004-2009, dated 08.10.2007 by inserting a new sub- para 2.12 as follows: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“2.12 The prohibition imposed by Notification No. 33(RE-2007)/2004-2009, dated 08.10.2007 on export of wheat products shall not be applicable to export of 32,094.70 MT of wheat flour to Maldives through M/s. MMTC Ltd.” </em> </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The effect of this notification is that export of 32,094.70 MTs of wheat flour to Maldives , is permitted under the Bi-lateral Trade Agreement between Government of India and the Republic of Maldives through M/s. MMTC Ltd. upto 31.03.2012. </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=45&filename=notification/dgft/2010/dgft10not043.htm" target="_blank">DGFT Notification No.43 (RE-2010)/2009-2014, Dated: April 20, 2011 </a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">PM's Awards for Excellence in Public Administration for 2009-10 </font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRIME MINISTER </strong>Dr. Manmohan Singh is set to inaugurate the Civil Services Day in New Delhi today. This day is observed by all Civil Services to rededicate and recommit themselves to the cause of the people. It provides a unique opportunity for introspection as also working out future strategies to deal with the challenges being posed by the changing times. This is being celebrated since 2006. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On this occasion, the PM will give away the ‘PM's Awards for Excellence in Public Administration' for the year 2009-10. Under this scheme of awards, all officers of Central and State Governments individually or as group or as organization are eligible. The award includes a medal, scroll and a cash amount of Rs.1 lakh. In case of a group, the total award money is Rs.5 lakh subject to a maximum of Rs. 1 lakh per person. For an organization this is limited to Rs. 5 lakh. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Five outstanding initiatives in three categories - individual, group and organization - have been selected for the award. Of these the one in the individual category is: (i) Bridging the Gap - the Turnaround of Bihar Rajya Pul Nirman Nigam, ( Bihar ). In the group category the award will be given to (i) Success Story of Malkapur 24x7 Water Supply Scheme (Maharashtra) and (ii) Education and Training Centre - Dreams to Reality, Navi Mumbai Municipal Corporation, ( Maharashtra ). Sickle Cell Anaemia Control Programme, of Government of Gujarat and Sustainable Plastic Waste Management of Himachal Pradesh will receive the award in the organization category. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
Transparency and Ethics in Governance, improvement of Public Service Delivery Systems and Challenges of Economic Management are among the issues that will be deliberated in the day long proceedings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope that they also deliberate on the hottest topic of the season - Lokpal Bill. </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"> - Monday's cases</font></strong></font></strong></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"></strong></font><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>Income tax - Whether when assessee avails sales tax deferment scheme but repays entire loan being offered some waiver for early repayment, Sec 41(1) has any application in such case - NO, rules ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Bench is - Whether when assessee avails sales tax deferment scheme but repays the entire loan after being offered some waiver for early repayment, Sec 41(1) has any application to the case. NO is the Tribunal's answer. </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>Order passed by Chief Commissioner u/s 61 in the matter of extension of warehousing period is not maintainable before the CESTAT in view of section 129A of Customs Act, 1962: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT </strong>the outset, the Revenue representative submitted that no order of a Chief Commissioner is appealable to the Tribunal under Sec. 129A of the Customs Act; that the order is an administrative order rather than quasi-judicial and hence not appealable. Faced with this objection, the appellant submitted that the Bench had two options - to remand the matter to the proper officer of customs having jurisdiction or to dismiss the appeal as not maintainable. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise - CENVAT Credit - Once the input credit is legally taken and utilized on the dutiable final product, it need not be reversed on the final product being exempted subsequently: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>respondent, M/s TAFE Limited are manufacturers of Tractors and parts thereof. They are availing CENVAT credit under CENVAT Credit Rules, 2002. In terms of Notification No.23/2004-CE, tractors have been exempted from payment of duty with effect from 09.07.2004. As on 08.07.2004 the assessee had a closing stock of finished goods i.e. 319 tractors, which were manufactured using the inputs in which credit was availed and also a closing stock of inputs as such on which credit was availed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000" size="3">Tomorrow is Good Friday </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Monday for the judgements </font></strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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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