TIOL-DDT 1606 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 1606</font><br>
11.05.2011 <br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Lodging, Boarding, Drinking Tax - CBEC Issues Clarifications </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> year's Budget saw two new services entering the field:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">(zzzzv) to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises; </font></strong></font></p>
<p align="justify"><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(zzzzw) to any person by a hotel, inn, guest house, club or campsite, by whatever name called, for providing of accommodation for a continuous period of less than three months. </font></strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tax on accommodation is applicable only if the 'declared tariff' is more than Rs. 1000/ per day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board clarifies certain queries on these services by potential tax payers. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Temporary
Accommodation service: </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No.1:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the relevance of declared tariff? Is the tax required to be paid on declared tariff or actual amount charged? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Declared tariff” includes 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. The relevance of ‘declared tariff' is in determining the liability to pay service tax as far as short term accommodation is concerned. However, the actual tax will be liable to be paid on the amount charged i.e. declared tariff minus any discount offered. Thus if the declared tariff is Rs 1100/-, but actual room rent charged is Rs 800/-, tax will be required to be paid @ 5% on Rs 800/-. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">What
if the declared tariff is Rs. 900/- and the actual amount collected is
Rs 1200? There is no service tax!!!!! </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 2:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it possible to levy separate tariff for the same accommodation in respect of corporate/privileged customers and other normal customers? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is possible to levy separate tariff for the same accommodation in respect of a class of customers which can be recognized as a distinct class on an intelligible criterion. However, it is not applicable for a single or few corporate entities. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Will Service Tax officers conduct surveys to ascertain how different rates are charged? And what could be the intelligible criterion ? </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 3: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the declared tariff supposed to include cost of meals or beverages? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where the declared tariff includes the cost of food or beverages, Service Tax will be charged on the total value of declared tariff. But where the bill is separately raised for food or beverages, and the amount is charged in the bill, such amount is not considered as part of declared tariff. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 4</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the position relating to off-season prices? Will they be considered as declared tariff? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the declared tariff is revised as per the tourist season, the liability to pay Service Tax shall be only on the declared tariff for the accommodation where the published/printed tariff is above Rupees 1000/-. However, the revision in tariff should be made uniformly applicable to all customers and declared when such change takes place. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the Government telling the hotels how they should do business? </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A/c Restaurant's service: </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 1 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If there are more than one restaurants belonging to the same entity in a complex, out of which only one or more satisfy both the criteria relating to air-conditioning and licence to serve liquor, will the other restaurant(s) be also liable to pay Service Tax? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax is leviable on the service provide by a restaurant which satisfies two conditions: (i) it should have the facility of air conditioning in any part of the establishment and (ii) it should have license to serve alcoholic beverages. Within the same entity, if there are more than one restaurant, which are clearly demarcated and separately named, the ones which satisfy both the criteria is only liable to service tax. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 2</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the services provided by taxable restaurant in other parts of the hotel e.g. swimming pool, or an open area attached to a restaurant be also liable to Service Tax? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The taxable services provided by a restaurant in other parts of the hotel e.g. swimming pool, or an open area attached to the restaurant are also liable to Service Tax as these areas become extensions of the restaurant. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Query No. 3</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the serving of food and/or beverages by way of room service liable to service tax? </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Response: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a licence to serve liquor. Also, the same cannot be charged under the Short Term Accommodation head if the bill for the food will be raised separately and it does not form part of the declared tariff. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Food when served in Swimming pool is taxable, but not taxable when served in a room. But do they serve food in a swimming pool? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And for both the services, luxury tax and VAT are not to be included in value. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir139.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 139/8/2011-TRU, Dated : May 10, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Viscose Filament Yarn Extended - Well in time! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> presents a bouquet of the sweetest roses to the CBEC - for once, they have extended an anti dumping duty before its expiry. Anti Dumping Duty on Viscose Filament Yarn originating in, or exported from, the Peoples' Republic of China, was imposed vide Notification No. 45/2006-Customs, dated the 24th May, 2006 and would have expired on 23rd May 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has extended this till 24th February, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> had been repeatedly requesting the Board to ensure that notifications are not resurrected and any extension should be done before the expiry, to avoid misery for the importers and inconvenience for the departmental officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the Board will continue with this eminently desirable tradition. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_038.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 38/2001-Cus, Dated : May 9, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">'Mercy, My Lords', pleads Judge before Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DELHI'S</strong> Additional District Judge Archana Sinha yesterday pleaded, “mercy, my lords”, before the Supreme Court. “No mercy, you had no business to touch an SC order”, the Court told her. She had been summoned to the Supreme Court to explain how she dared to disobey a Supreme Court order. She had virtually quashed a Supreme Court order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“You are not fit to be a judge, you should resign immediately. This is the limit... an ADJ disobeying and overruling a Supreme Court order. You have no business staying a Supreme Court order”, the Court said. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“We are constrained to say that a certain section of the subordinate judiciary is bringing the whole judiciary of India into disrepute by passing orders on extraneous considerations. We do not wish to comment on the various allegations which are often made to us about what certain members of the subordinate judiciary are doing, but we do want to say that these kinds of malpractices have to be totally weeded out. Such subordinate judiciary judges are bringing a bad name to the whole institution and must be thrown out of the judiciary,” the Court added. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However the Supreme Court finally showed mercy on her and discharged her of contempt proceedings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A senior advocate submitted, “Had it been someone from the executive, you would have sent him to jail. Please send a strong message in this case.” </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Judicial Indiscipline in Tax Matters - Needs to be curbed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GENERALLY</strong> Revenue officers have only contempt for the judiciary and will never spare an opportunity to flout orders of higher judiciary with impunity. It is very rarely that an officer gets punished for disobeying, misinterpreting and sitting in judgement over the decisions of higher courts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We should respect the Supreme Court – not because they are always right – but because it is the highest Court. Even retrospective legislation, to frustrate Supreme Court orders, is a judicially sanctioned contempt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We should have a system wherein the bureaucracy or lower level judiciary should never dare to question or disobey orders of higher judiciary. Babus who go out of the way to disobey higher judiciary orders should be given a one way ticket to the gaol. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Lahore CJ wants Corruption-free Judiciary</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAKISTAN'S</strong> Tribune reported yesterday that Chief Justice of the Lahore High Court has directed all district and sessions judges to observe certain directions for the eradication of corruption amongst the staff of district courts. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Directions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A complaint box to be placed outside the courts of D&SJs and senior civil judges. Applications/complaints filed shall be entertained and quick action to be taken. </font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ D&SJs and senior civil judges remain available in their courts to attend to the grievances/complaints of the litigants. </font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Every judicial officer is to be responsible for the illegal acts of his staff.
</font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Corrupt officials may be taken to task under the anti-corruption laws.
</font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All officials of each district are to submit their declarations of assets within a period of 15 days after the receipt of directions. Declarations shall be examined and verified, if needed.
</font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Police officers /officials engaged with security of court premises be changed with the consultation of the authorities concerned as there had been complaints against them.
</font>
</p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Adjournments shall be granted by the judicial officer in their presence to the parties and <em><strong>at</strong></em> <em><strong>no cost</strong></em> will this be left to the readers. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Babus to declare Financial transactions exceeding two months pay</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government
employees entering into movable property transactions of value exceeding
two months basic pay should report the transaction to the prescribed authority.
Earlier the limit was Rs. 20,000 for Group A and B officers and Rs. 15,000
for Gr. C and D officers. The Central Civil Services (Conduct) Rules, 1964,
has been amended. A similar amendment has been made in the All India Service
(Conduct) Rules also. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/DoPT_notification.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DoPT Notification
Dated May 10, 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"> – Thursday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><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"><font color="#663399"><strong>Central Excise </strong></font></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT Credit rules do not mandate that credit on capital goods should only be availed in very same year in which capital goods were received – No error in CESTAT order allowing 100% credit in subsequent year: HC</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOODS</strong> received in the year 2006-07 and the assessee availed 100% credit in 2007-08 – Such availment is not inconsistent with the rules - Rule 4(2)(a) of the CENVAT Credit Rules provides that only to the extent of 50% of the CENVAT Credit could be utilized by the assessee during the year it is availed of - However, the said Rules do not mandate that the credit should be utilized in the very same year. Once the credit is not utilized in the same year, then Rule 4(2)(b) provides that it can be utilized in any year and to the full extent – No error in the order of the Tribunal allowing the credit. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wealth Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether value of land situated in a village which was declared surplus under Urban Land Ceiling Act, can be treated as taxable wealth of assessee - Revenue's appeal partly allowed by Delhi HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the High Court is - Whether value of land situated in a village which was declared surplus under the Urban Land Ceiling Act, 1976, can be treated as wealth of the assessee. And the Revenue's appeal was partly allowed. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Drawback - Not entitled when DTA unit exports goods manufactured by EOU - Strictures against Customs Department - Revenue Counsel miserably failed: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong>, reflects the sorry state of affairs that prevails not only in the department of revenue of the finance ministry, Government of India, but also lack of understanding on the part of their standing counsel, which is all to the detriment of the larger public interest and the people of this country. It is high time people in administrative position and wielding power, realize their responsibilities and duties and acts with some degree of commitment and sincerity to their work. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We keep expressing our dismay, disappointment and disillusionment, but to no avail, as there is no commensurate response from the commissioner nor the counsel. </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><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>
</body>
</html>