TIOL-DDT 1630 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1630 </font><br> 15.06.2011<br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS v IRS - Transport of Goods by Rail - Exemption Extended - Even without <em>Didi</em></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MAMTA</strong> Didi may not be the Railway Minister, but the Indian Revenue Service has to concede to the Indian Railways. The IRS in North Block tried to levy Service Tax on goods transport by Rail, but the IRS in Rail Bhavan successfully blocked it. After several postponements, the tax was to be effective from 1 st July 2011. Now it is further extended. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following Notifications are amended:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_007.htm" target="_blank">Notification No 07/2010-Service Tax, dated the 27th February 2010</a></strong>: Rescinds Notification No. 33/2009-S.T dated 01.09.2009 [which actually exempts transport of goods by rail and if this exemption is withdrawn, the service becomes taxable]. <em>This notification was to be effective from 01.04.2010 and then extended to 01.07.2010, further extended to 01.01.2011, then to 01.04.2011 and then to 01.07.2011 and now further extended to 01.01.2012.</em> </font></p> <p align="right"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_038.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - Notification No. 38/2011-Service Tax, Dated : June 14, 2011 </font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_008.htm" target="_blank">Notification No 08/2010-Service Tax, dated the 27th February 2010</a></strong>: exempts certain goods like Postal Mail Bags, from Service Tax.<em> This notification was originally effective from 01.04.2010, then extended to 01.07.2010, 01.01.2011, 01.04.2011 and then to 01.07.2011 and now further extended to 01.01.2012</em>. </font></p> <p align="right"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_039.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Notification No. 39/2011-Service Tax, Dated : June 14, 2011 </font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_009.htm" target="_blank">Notification No 09/2010-Service Tax, dated the 27th February 2010</a></strong>: provides abatement to transport of goods by rail. <em>This notification was effective from 01.04.2010 and similar amendments were made and in the previous round, it was made effective from 1 st July 2011. Now it is effective from 01.01.2012</em> </font></p> <p align="right"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2011/stnot11_040.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Notification No. 40/2011-Service Tax, Dated : June 14, 2011 </font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Why can't they simply say that the notifications will come into force from a date to be notified by the Government?</strong> Thousands of copies of these notifications will be printed and circulated on precious paper. Generations to come will scarcely believe that a Revenue Department in India was primarily responsible for destroying the forests of India and those generations will never forgive you for such vandalising waste in exercise of the powers wasted in you. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">OECD Economic Survey of India 2011 - Only seven governments in world spend less on health than India </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRESENTING</strong> the Economic Survey of India in New Delhi yesterday, OECD Secretary-General Angel Gurría said: “Policymakers are to be commended on the remarkable catch-up achieved in recent years, making India one of main driving forces of the global economy.” He added: “The priority given to more socially inclusive economic growth is appropriate and further reforms are needed to achieve it. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Highlights of the Survey Report: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sustaining higher growth.</strong> Administrative burdens have held back the expansion of private firms and these impediments need to be eased. Public-sector governance should be made more transparent and accountable by separating operational and regulatory functions in the provision of public services and by strengthening the anti-corruption agency. Further reductions in trade and FDI barriers are also needed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Improving fiscal policy and outcomes.</strong> The government resumed fiscal consolidation in 2010 and more is planned for 2011. The government needs to ensure subsidies stemming from higher world oil prices do not throw these plans off course. A binding medium-term framework is also needed, presenting the budget on a rolling three-year basis and with rules to limit deficit spending. An independent fiscal monitoring agency might strengthen fiscal discipline. The proposed goods and services tax is an important reform, and its coverage should be as broad as possible to minimise distortions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Making growth more inclusive.</strong> Poverty rates continue to fall but remain high despite strong growth: making growth more inclusive is therefore a top government priority. The introduction of the national rural employment guarantee has helped. However, <strong>only seven governments in the world spend less on health than India</strong> (in per cent of GDP). Government spending is higher in other areas aimed at lowering poverty, such as subsidisation of kerosene, liquefied petroleum gas and fertilisers. <strong>However, a large part of such outlays do not reach the poor</strong>. More widespread use of cash transfers conditional on participation in health and education programmes could boost outcomes in these areas. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Continuing with financial sector reform.</strong> India's financial sector proved resilient in the face of the global crisis. The government is committed to further financial reforms to deepen the financial system and improve access. The entry of new privately-owned banks has heightened competition in the sector and yielded efficiency gains. Granting more banking licences would help in this regard. Reforms are called for to ease wide-ranging and highly prescriptive operating constraints faced by the financial sector for lending, portfolio management and branch location. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Improving education access and quality.</strong> Enrolment and literacy are improving and the 2009 Right to Education Act should help to speed up progress towards universal elementary education. However, high dropout rates, low student attendance and teacher absence remain severe problems, holding back educational achievements. Teacher effectiveness in the public sector ought to be enhanced through better accountability, incentives and development pathways. In higher education regulation is often ineffective, restricting choice and hampering entry and innovation. Institutions ought to be granted greater autonomy, quality assessment should be strengthened and a higher proportion of funding tied to outcomes. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transferred Officers not Relieved - Board Serious!!!!! </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> instructions are disobeyed with boringly routine regularity by the field officers and with equal routine regularity Board has been expressing its displeasure and promising to initiate action, taking a serious view of this blatant disobedience. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently, the CBEC had issued transfer orders of Additional Commissioners/Joint Commissioners and asked the cadre controlling officers to relieve the transferred officers by 08.06.2011 and the Chief Commissioners were requested to send compliance report by 10.06.2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many Chief Commissioners did not send any compliance report. Many of them who did, reported that in many cases, the transferred officers were not relieved. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As usual, <strong>Board has viewed non-compliance of its orders very seriously</strong>. Matter ends there! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But why are transferred officers not relieved? Many of them have grievances that their transfer orders are against norms, due to clerical mistakes and they have genuine reasons to be retained or given a better posting. Shouldn't the Board give them a hearing and consider their representations, before forcing them to leave their posts in less than a week from the date of the order? This will only force the officers to approach the CAT for some relief, even temporarily, causing a lot of mental agony and expenditure. WE are told that even SDRs in CESTAT who slogged it out vociferously fighting the best legal brains, to defend the Department, have been posted to unwanted places, sending a strong message that the Department does not believe in encouraging talent, hard work and commitment.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't transfers be done to the satisfaction of the maximum possible number of officers? Today it is exactly the opposite. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cbec_order_relieving_joining_adcjc.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Letter in F. No.A-22012/03/2011-Ad.II; Dated: June 14, 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><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">Subsequent change in prices effected by appellant at depot does not affect assessable value already determined and on which duty liability has been discharged: CESTAT </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WHEN</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> the goods are cleared to depot on stock-transfer basis from where the goods are ordinarily sold, for the purpose of discharging duty liability at the time of removal of goods from the factory, the price prevalent at the same time or at the nearest point of time at the depot should be ascertained and on that price duty liability has to be discharged. In the instant case, the appellant-assessee has discharged duty liability accordingly. Subsequent change in prices effected by the appellant at the depot does not affect the assessable value already determined and on which duty liability has been discharged. If that is allowed, the very object and purpose of Rule 7 of the Central Excise Valuation Rules will be totally defeated. </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">Whether assessee is entitled to claim Sec 10A benefits even if foreign exchange fluctuation gain is derived from ECBs and not from export activity - NO: ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> Company had raised external commercial borrowings from its parent company for meeting its working capital requirements, which were reinstated on year-end, which resulted in a notional foreign exchange gain of Rs. 382,15,000/- to the company. After adjusting the loss on export remittance, net income of Rs. 3,52,90,374/- was shown as 'other income' in the profit and loss account and deduction was claimed u/s 10A – AO accepted the claim of the assessee in the order made u/s 143(3). </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">Words ‘imported and marketed' mentioned on packages misunderstood by Commr(A) as ‘imported and marked' - This mistake bred other mistakes leading to him virtually adopting the assessee's averments to take a view in their favour - Matter remanded: CESTAT. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> learned Commissioner (Appeals) misunderstood certain marks found on the packaged commodity. The imported packages had come with the mark "imported and marketed by M/s. NITCO Tiles Ltd.". It appears, the words "imported and marketed" were misunderstood by the appellate authority as "imported and marked". This misunderstanding lead the appellate authority to the erroneous notion that the importer had to be treated as 'manufacturer' in India on account of having "marked" the packages. This mistake bred other mistakes also, like pressing into service Rule 2(h) (definition of 'manufacturer') and claiming support from the apex court's judgment in Hyderabad Industries case. </font></p> <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> </body> </html>