TIOL-DDT 1628 · 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 1628</font><br>
13.06.2011 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Monitoring of fresh Fruit and Vegetable Import from Europe for E. Coli bacterial contamination </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MANY</strong> cases of <font color="#FF6633"><em><strong>E. Coli </strong></em></font>bacterial outbreak due to contamination of fresh Fruits and Vegetables have been detected in European countries like Germany, Austria, Denmark, the Netherlands, Norway, Spain, Sweden, Switzerland, Russia and the U.K. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC feels that there is a need to increase surveillance of fresh Fruit and Vegetable imports into India from Europe to ensure that they are safe for consumption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided, as precautionary measure, that Food Safety and Standards Authority of India (FSSAI) would test samples of fresh Fruits and Vegetables consignments imported from Europe into India for E.Coli bacteria. FSSAI has directed their Authorised Officers to have the food articles tested for E.Coli bacterial contamination before issuing ‘No Objection Certificate' to Customs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board directs that all officers in charge of Ports, Airports, ICDs / CFSs, Land Customs Stations should ensure that clearance of such fresh Fruits and Vegetables imported from Europe is allowed only after complying with the above requirements and obtaining ‘No Objection Certificate' from FSSAI. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Again Board got its spelling wrong. The Board instruction mentions the bacteria as E.Colli, but there is no such thing – it is E.Coli. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F No. 450/60/2011-Cus. IV; Dated: June 08, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Accounting Codes - Controller of Accounts issues Corrigendum </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Principal Chief Controller of Accounts had earlier issued SCCD Code for “Clean Energy Cess” as 111. Now they want it be read as 112. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Serial Code, for “Deduct Refund for Services of Air-conditioned Restaurants having license to serve alcoholic beverages in relation to service of food or beverages”, was earlier announced as 0044<strong>0169</strong>. Now they want it to be read as 0044<strong>1069</strong> . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This code was communicated by CBEC in Circular No. 136/2011 dated 20.04.2011 and strangely, the Circular carries the correct code as amended by the Pr. Chief Controller on 28.04.2011, a full 8 days before the correction was made! Obviously, the number had to be 1069 and not 0169 and some wise guy in CBEC corrected it even before the Controller could correct it. Great work indeed by CBEC! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=307&filename=notification/excise/2011/circular_coord13_6.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pr.CCA OM No. Coord/13-6/11-12/Vol.VII/19 , Dated: April 28, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Remittance of assets by foreign nationals - Opening of NRO Accounts - RBI Instructions</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOREIGN</strong> nationals employed in India holding valid visas are eligible to maintain resident accounts with an Authorised Dealer Category - I (AD Category-I) bank in India. The AD Category-I banks are required to close the resident accounts of such foreign nationals on their leaving the country and transfer their assets to their accounts maintained abroad. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a person resident in India leaves India for a country (other than Nepal or Bhutan) for taking up employment, or for carrying on business or vocation outside India or for any other purpose indicating her / his stay outside India for an uncertain period, her / his existing account should be designated as a Non-Resident (Ordinary) [NRO] Account to enable them to receive their pending bona fide dues, subject to the following conditions </font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. AD Category-I bank should obtain the full details from the account holder about his legitimate dues expected to be received into his account.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. AD Category-I bank has to satisfy itself as regards the credit of amounts which have to be bona fide dues of the account holder when she / he was a resident in India.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. The funds credited to the NRO account should be repatriated abroad immediately, subject to the AD Category-I bank satisfying itself regarding the payment of the applicable Income tax and other taxes in India.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. The amount repatriated abroad should not exceed USD one million per financial year.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e. The debit to the account should be only for the purpose of repatriation to the account holder's account maintained abroad.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f. There should not be any other inflow / credit to this account other than that mentioned at point (a) above.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">g. AD Category-I bank should put in place proper internal control mechanism to monitor the credits and debits to this account.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">h. The account should be closed immediately after all the dues have been received and repatriated as per the declaration made by the account holder mentioned at paragraph 2 (a) above. </font></p>
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<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2010/rbi10cir070.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Circular No. 70/RBI, Dated: June 9, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Adapting tax System and International tax Rules to New Global Environment - Shared Challenge for India and ECD </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNION</strong> Finance Minister Pranab Mukherjee will inaugurate a two day high level International Seminar on “Adapting Tax System and International Tax Rules to the New Global Environment: A Shared Challenge for India and the OECD” today at Vigyan Bhawan in Delhi. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the Seminar, discussions would be held on the issues pertaining to transfer pricing, global trends in tax reform, ‘implications for international tax arrangements', international dispute resolution and elimination of double taxation, among others. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is for the first time that such a high level international seminar is being held in India in association with the Organisation for Economic Cooperation and Development (OECD). About 150 representatives from about 30 member countries of OECD along with those of International Monetary Fund (IMF), World Bank and tax officials from India are expected to participate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">OECD Secretary-General Angel Gurria will deliver the opening address and participate along with India's Finance and Revenue Secretary Sunil Mitra in the opening Panel discussion on “<em><strong>Adapting</strong> Tax Systems and International Tax Rules to the New Global Environment: A Shared Challenge for India and the OECD</em>.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it “adopting” or “adapting” Tax system? The OECD Press Release says it is “adapting” while the Indian PIB release says, it is “adopting”. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">OECD to publish Economic Survey of India tomorrow </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> OECD will publish its Economic Survey of India on Tuesday 14 June 2011 . It argues that continuing market-orientated reforms are essential if strong economic growth is to be both sustainable and socially inclusive. The survey also looks at policies to improve areas such as health and education. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The survey will be presented by OECD Secretary-General, Angel Gurría, at a symposium at 09.30 a.m. the same day at the India Habitat Centre, New Delhi. A question-and-answer session will take place from 10.00 a.m – 11.00 a.m. Other speakers include Montek Singh Ahluwalia, Deputy Chairman of India's Planning Commmision and C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Will Tax Corruption figure in discussions? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CORRUPTION</strong> is the hot topic in India now. The OECD brochure says, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Corruption is a significant obstacle to economic development as it undermines good governance, sustainable development and fair business practices. Corruption affects India's attractiveness as a destination for investment, and undermines economic growth, trade, and job creation. Moreover, the impact of corruption on the weaker members of Indian society is well documented in, for instance, health projects and the food distribution system. As Indian enterprises become increasingly multinational, there is also a need to ensure that they do not engage in bribery while operating in foreign jurisdictions. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, India will be hosting the 2011 annual meeting of the ADB/OECD Anti-Corruption Initiative entitled 'Strengthening Institutions to Effectively Combat Corruption', in New Delhi in September 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>On Taxation:</strong> The OECD brochure says, “<em>The Indian government plans to reform and simplify the country's <strong>presently complex</strong> tax system. These reforms aim to broaden the tax-paying base and increase tax revenues as the country confronts a widening budget deficit and implements plans to expand social welfare programmes.</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The first high-level event on 13-14 June 2011, focuses on adapting tax systems and international tax rules to the new global environment, which includes transfer pricing. Furthermore, there is increasing recognition that taxation has implications that stretch beyond the narrow sphere of revenue-raising into good governance and ultimately in the accountability of the state to its citizen </font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">” </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IMF in Cyber Attack</font></strong></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"> International Monetary Fund has become the latest victim of a cyber attack believed to be carried out by hackers connected to a foreign government. The breach occurred “over the last several months”, before Dominique Strauss-Kahn quit after being charged with attempted rape. The IMF's Board was apparently told of the attack on Wednesday and now the FBI is helping to investigate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A security expert says the attack was clearly designed to infiltrate the IMF with the intention of gaining sensitive ‘insider privileged information. It seems the code used in the attack was specifically developed for the IMF system. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over the past three months, Google, Sony, Lockheed Martin and Citigroup have all reported being the victims of cyber attacks. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems Google recently announced that several users of its Gmail service had been victims of a so-called phishing scam attempting to con them into disclosing their passwords. More precisely, it was a "spear phishing" attack in which the victims were carefully chosen: Many were either government officials or well-known academics who play a role in crafting U.S. policy toward China. And Indian Revenue officials happily use Gmail for their official correspondence! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears the intrusion may have been the result of a <strong>spear phishing attack</strong>. This kind of attack typically works by tricking an employee into clicking on a link to a malicious website or downloading a file loaded with malware. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Netizens should immediately do the following to try to prevent attacks. </font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Change your passwords – don't have the same password for several accounts. </font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Don't open suspicious attachments or links from mails you get even from your friends.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Build up a strong password. You can store all your passwords in KeePass, which is a free, open source, lightweight and easy-to-use password manager for Windows, Linux, Mac OS X and mobile devices. You can store your passwords in highly encrypted databases, which can only be unlocked with one master password and/or a key file. A database consists of only one file that can be transferred from one computer to another easily. The program supports password groups, in which you can sort your passwords into. You can drag-n-drop passwords into almost any other window.
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You can be attacked even through the postal system – don't furnish information to unsolicited postal letters. </font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Check your bank accounts and other financial accounts regularly.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ </font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.pcworld.com/article/227023/how_to_build_better_passwords_without_losing_your_mind.html"><strong>how to build better passwords without losing your mind</strong> </a>is worth a read. </font>
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<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Poor Service - Bank paid back in same coin </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Chinese bank customer, angry at the poor service, paid back the bank by withdrawing one yuan (about six rupees) at a time for an hour. The bank had no choice because he did not violate any rules of the bank. </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"> – Tuesday's cases</font></strong></font></strong></font></p>
<p align="justify"><strong><font color="#663399" 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">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal - Classification and Valuation matters - Appeal from Tribunal lies with Supreme Court - Appeal dismissed for want of jurisdiction: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a landmark case. It seems hundreds of appeals filed by the Revenue against Classification and Valuation matters before the Karnataka High Court are bound to be dismissed based on this order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court explained the concepts of assessment, determination, goods, ‘rate of duty', and why these matters had to go the Supreme Court. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 48 - Whether, for computing capital gains under Portfolio Management Service, fee paid to AMC as certain percentage of NAV of portfolio for sale and purchase of securities is allowable deduction - YES, says ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee debited a sum of Rs 69,22,396/- paid to ENAM, the AMC, on account of termination fee (TF) of Rs 59,15,574/- and annual maintenance fee (MF) of Rs 10,06,823/-. The AO found that TF has to be disallowed. The issue before the Tribunal is - Whether, for the purpose of computing capital gains under Portfolio Management Service, the fee paid to the Asset Management Company at certain percentage of the NAV of the portfolio for purchase and sale of the securities is an allowable deduction. And the verdict goes in favour the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cargo Handling Service - Audit by department on previous occasions did not point out this issue - No extended period - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONSIDERING</strong> the status of the Appellant as a Public Sector Undertaking and their conduct after the matter has been pointed out to them and the fact that the audit by the department on previous occasions did not point out this issue though they were collecting charges during such period also, this Appellant did not have any intention to evade the impugned tax. Therefore the demand will be sustainable only to the extent of demand covered by the normal period of time of one year. </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 <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p>
<div 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"><strong>vijaywrite@taxindiaonline.com </strong></a></font>
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