TIOL-DDT 1595 · 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 1595</font><br>
26.04.2011<br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New services to be effective from May 1, 2011? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has issued a notification in exercise of the powers conferred by clauses (A) and (B) of section 71 of the Finance Act appointing May 1, 2011 as the date on which the provisions of the said Act shall come into force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately, the Government has not realized that after enactment of Finance Bill 2011 into Finance Act, 2011 on April 8, 2011, there is a renumbering of the sections. In the process, section 71 of Finance Bill 2011 was renumbered as section 74 and this Notification should have been issued invoking clauses (A) and (B) of section 74 of the Finance Act, 2011 and not section 71 as mentioned therein. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 71 of the Finance Act deals with amendment of Rule 3 of the CENVAT Credit Rules! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Government has to come out with an amendment or a corrigendum to set right this numbering fiasco that crept into this life giving Notification for new services and other amending provisions of Finance Act, 1994. Otherwise, the new services cannot really come into force on May, 1, 2011. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_029.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/2011 - ST., Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to Services provided by Clinical Establishments </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has provided exemption to taxable service referred to section 65(105)(zzzzo) of Finance Act, 1994 from the whole of levy of service tax. The exemption is effective from May 1, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that by virtue of Finance Act, 2011, the text of clause (zzzzo) was completely replaced and the phrase ‘clinical establishment' is defined in terms of the newly amended sub-section 25a of section 65 of Finance Act, 1994. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_030.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 30/2011 - ST., Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to Accommodation Service provided by Hotel, Inn etc </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has provided exemption from the whole of levy of service tax on taxable service referred to in section 65(105)(zzzzw) of Finance Act, 1994 when the declared tariff for providing such accommodation is less than Rupees 1000 per day. This exemption is effective from May 1, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification explains ‘declared tariff' for this purpose to include charges for all amenities provided in the unit of accommodation like furniture, air-conditioner, refrigerators etc but does not include any discount offered on the published charges for such unit. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 31/2011 - ST., Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Representational services of CAs/CWAs/CSs taxable w.e.f from May 1, 2011 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN DDT 1562</strong>, we commented that “Incidentally as of now there is an exemption for CAs, Cost Accountants and Company Secretaries for representation work as per Notification No. 25/2006 - S.T DATED 13.07.2006. Most probably the government will withdraw this notification once the Finance Bill is enacted and lawyers' representation will become a taxable service. If they forget there will be a funny situation where the lawyers whose main job is to argue in courts will be taxed for their arguments while CAs will be exempted” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government is withdrawing this exemption with effect from May 1, 2011 which will bring CAs/CWAs/CSs on par with lawyers from May 1, 2011. </font></p>
<p align="left"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 32/2011 - ST., Dated: April 25, 2011 Exemption provided for </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Certain Commercial training & coaching services </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has exempted from the whole of levy of service tax, ‘preschool coaching and training' and also ‘any coaching or training leading to grant of a certificate or diploma or degree or any educational qualification which is recognised by any law for the time being in force', provided by any commercial training or coaching centre. This exemption shall come into effect from May 1, 2011. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see our post Budget analysis story “<strong><a href="../../../../Program%20Files/Taxindiaonline's%20XCuSE/Resource/budget_news_19.htm">Commercial Training or Coaching Service – Clarity of taxability only after issue of exemption notifications</a></strong>”. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 33/2011 - ST., Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement Rates Notified for Two New Services </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. 1/2006-ST dated 01.03.2006 is further amended to provide for abatement of 70% and 50% respectively for service provided by air-conditioned restaurants and accommodation service provided by hotels, inns etc. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_034.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 34/2011 - ST., Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 6 of Service Tax Rules Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Rule 6 of the Service Tax Rules, 1994, for the existing sub-rule (7A), the following sub-rule shall be substituted, namely,- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“(7A) An insurer carrying on life insurance business shall have the option to pay tax: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) on the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf of policy holder, if such amount is intimated to the policy holder at the time of providing of service; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) 1.5 per cent of the gross amount of premium charged from a policy holder in all other cases; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">towards the discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the said Act: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that such option shall not be available in cases where the entire premium paid by the policy holder is only towards risk cover in life insurance.” </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This amendment will come into force from May 1, 2011 in the wake of amendment to section 65(105)(zx) of Finance Act, 2004. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_035.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 35/2011 - ST. , Dated: April 25, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of Services Rules and Import of Services Rules Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TAXABLE</strong> services as defined in clauses (zzzzv) and (zzzzw) of section 65(105) of Finance Act, 1994 are included in clause (i) of sub-rule (1) of Rule 3 of Export of Services Rules, 2005. After this amendment, for a Hotel or Restaurant, services are to be treated as export, if they are provided “in relation to immovable property situated outside India”. What does this mean? Hotel and restaurant services are provided to immovable properties? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, taxable services as defined in clauses (zzzzv) and (zzzzw) of section 65(105) of Finance Act, 1994 are included in clause (i) of sub-rule (1) of Rule 3 of Taxation of Services (Provided from Outside India and Received in India ) Rules, 2006. </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=40&filename=notification/servicetax/2011/stnot11_036.htm" target="_blank">Notification Nos. 36/2011 - ST.,</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_037.htm" target="_blank">37/2011 - ST., Both Dated: April 25, 2011</a> </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-Dumping Duty ‘extended' on imports of Silk fabric of weight 20 to 100 gms per metre </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has extended anti-dumping duty on imports of silk fabric of weight 20 to 100 gms per metre, originating in, or exported from People's Republic of China till December 5, 2011 by amending Notification No. 121/2006-Cus dated December 26, 2006. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 37/2011-Cus., Dated: April 21, 2011</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"> – Wednesday's cases</font></strong></font></strong></font></p>
<p><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">Income Tax</font></strong> </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether, for purpose of applying indexation of costs, year in which
previous owner had acquired property is to be considered as relevant year
for computing capital gains - YES, rules ITAT</strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE </font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">issues
before the Tribunal are -</font> <font color="#000000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether,
for the purposes of applying Indexation of costs, the year in which the
previous owner had acquired the property is to be considered as the relevant
year and whether in view of the fact that the fair market value has not
been calculated in a fair manner, a reasonable estimate is justified to
end the matter. Another question before the Bench is - Whether Department
can take contrary stand for estimating FMV by enhancing the FMV when it
is question of determination of sale consideration and by reducing the
same when it is question of determination of LTCG. And the decision partly
goes in favour of the assessee.</font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax</font></strong></p>
<p style="text-align:justify"><font size="2"><b style="mso-bidi-font-weight:normal"><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax – Liability to pay service tax on spare buses having spare bus
permits – Carriages which run under public transport system where
passengers have a right to board or alight according to their choice and
pay fares for journey individually, do not fall under definition of ‘tourist
vehicle’ under section 2(43) of Motor Vehicles Act: Madras
High Court
<o:p></o:p>
</font></b></font></p>
<p style="text-align:justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong>
petitioners filed Writ Petitions in the High Court which raises a common
question as to whether the petitioner, a stage carriage operator having a
spare bus permit is liable to be brought under the tax net for payment of
service tax in respect of such spare bus.
<o:p></o:p>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Central Excise </font></strong></font></p>
<div align="justify">
<p><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-themecolor:accent6'><strong>Sales
Tax deferment Scheme under <span class="SpellE">Tamilnadu</span> General
Sales Tax Act, 1959 – Circular issued under Section 28A of TNGST
Act is binding on the adjudicating authority – Supreme Court </strong></span></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a case involving deferment scheme under <span class="SpellE">Tamilnadu</span> General
Sales Tax Act, 1959. In order to promote the industry in specified areas,
State Industries Promotion Corporation of <span class="SpellE">Tamilnadu</span> launched
a sales tax deferment scheme and the relevant provisons of the GO ...</font></p>
</div>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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