TIOL-DDT 1641 · 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 1641 </font><br>
30.06.2011 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Lawyers - Even Registration Stayed by Madras High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a Writ Petition before the Madras High Court, the Revenue Bar Association prayed that the Union of India may be restrained from giving effect to or acting upon the impugned provision or requiring the petitioner or its members to register with the Service Tax authorities or collecting any tax on the basis of Section 65{105} (zzzzm) of the Finance Act, 1994. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court gave an interim injunction restraining the respondent Union of India from compelling the members of the petitioner association from registering themselves with the Service Tax authorities and from collecting Service Tax from them, until further orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Courts of Delhi, Guwahati and Andhra Pradesh had already stayed the Service Tax on lawyers, extended to representation in this year's budget. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2011/2011-TIOL-399-HC-MAD-ST.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Madras High Court Order.</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange Rates for July Notified</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified the Exchange Rates for imported goods and export goods for July 2011. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_041.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Notification No. 41/2011-Cus.,(N.T.), Dated: June 28, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Storage of Liquid Bulk Cargo in Bonded Warehouse Outside Port Area – CBEC Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORTED</strong> goods may be unloaded only in a Customs area which is located in a Customs Station or a proper place approved under Section 8 in a notified Customs port, airport etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, as per Section 33, “Except with the permission of the proper officer, no imported goods shall be unloaded, and no export goods shall be loaded, at any place other than a place approved under clause (a) of section 8 for the unloading or loading of such goods”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, with the prior permission of the proper officer, imported goods can be unloaded at a place other than a place approved under clause (a) of section 8 for the unloading or loading of such goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now a question has been referred to the Board whether imported liquid bulk cargo could be directly discharged into bonded storage tanks located outside the ‘Customs area' of the port. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Clarifies: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unloading of liquid bulk cargo from the ship to the bonded storage tanks through pipe lines may be allowed under the provisions of section 33 of Customs Act, 1962 subject to the conditions that </font></p>
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<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The cargo is liquid bulk in nature; </font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The premises where the goods would be received through pipe lines should be a bonded warehouse under Section 58 or 59 of Customs Act, 1962; </font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Permission of the proper officer is obtained for such unloading prior to discharge of such cargo and other requirements under the Customs Act are fulfilled. </font> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In case the bonded tanks are located outside the jurisdiction of the port Commissioner, permission may be granted by port Commissioner subject to concurrence by Commissioner in whose jurisdiction the bonded tanks are located, and other safeguards as necessary. </font></p>
</blockquote>
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<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_018.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F.No.473/19/2009-LC Dated: May 09, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Authority for Advance Rulings - Income Tax Commissioner can be designated as Secretary </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REGULATION</strong> 2(k) of the “<em>Authority for Advance Rulings (Central Excise, Customs and Service Tax) Procedure Regulations, 2005 [“AARUL (CEST) Procedure Regulations</em>” reads as: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Secretary” means a Commissioner of Customs or Commissioner of Central Excise designated as Secretary by the Authority and includes an Additional Commissioner or a Joint Commissioner of Customs or of Central Excise, so designated; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Regulations are amended to add the following proviso: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided that in case no officer of the rank of Commissioner of Customs or the Commissioner of Central Excise has been so designated, on account of lack of sanction of post or otherwise, the Secretary of the Authority for Advance Rulings constituted under section 245-O of the Income-tax Act, 1961 (43 of 1961) may be so designated by the Authority." </font></em></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/aar_notification.htm"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION G.S.R. 475(E) [NO. 1/2011-AAR] Dated: June 22, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Overseas Direct Investment - Liberalisation/ Rationalisation - RBI Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRANSFER</strong> <strong>by way of sale of shares of a JV / WOS:</strong> An Indian Party, without prior approval of the Reserve Bank, may transfer by way of sale to another Indian Party which complies with the provisions of Regulation 6 of FEMA Notification 120/RB-2004 dated July 7, 2004 or to a person resident outside India, any share or security held by it in a JV or WOS outside India subject to the certain conditions: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Transfer by way of sale of shares of a JV / WOS involving write off of the investment:</strong> Indian Parties may disinvest without prior approval of the Reserve Bank, in certain specified cases where the amount repatriated on disinvestment is less than the amount of the original investment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Party is required to submit details of such disinvestment through its designated AD category-I bank within 30 days from the date of disinvestment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An Indian Party, which does not satisfy the specified conditions for undertaking any disinvestment in its JV/WOS abroad, shall have to apply to the Reserve Bank for prior permission. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Necessary amendments to the Foreign Exchange Management (Transfer or Issue of Any Foreign Security), Regulations, 2004 are being issued separately. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2010/rbi10cir073.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular NO. 73/RBI.,Dated: June 29, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India-US Annual Economic Talks - Pranab Timothy summit - No Sums </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>INDIA</strong> and USA are the largest democracies with fairly open economies, but somehow </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">they are not the best of business partners. Trade between the two countries is a fraction of the trade between China and USA. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/pranab_1641.jpg" alt="Legal Corner Icon" width="450" height="312" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The United States and India traded about $50 billion in goods in 2010, ranking India 12th on the list of American trading partners. The volume of trade has increased rapidly in recent years, but remains at about one-tenth the level of trade between the United States and China, although the figures do not include the value of services that India sells to the United States. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addressing the Second Meeting of India-US Financial and Economic Partnership in Washington D.C yesterday, India's Finance Minister Pranab Mukherjee said that the India-US Financial and Economic Partnership which was launched last year in New Delhi, has succeeded in giving an impetus to the rapidly expanding financial and economic engagement between our two countries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian delegation included, Dr Subbarao, Governor, RBI, R.Gopalan, Secretary, Department of Economic Affairs, Shashi Kant Sharma, Secretary, Department of Financial Services, Dr Kaushik Basu, Chief Economic Adviser, Subhir Gokaran, Deputy Governor, RBI, B.C.Khatua, Chairman, Forward Market Commission and Meera Shankar, Indian Ambassdor to USA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US delegation was led by Timothy Geithner, Secretary,US Department of Treasury and included among others Ben S Bernanke, Chairman, Board of Governors, Federal Reserve System, Austan Goolsbee, Chairman, Council of Economic Advisers to the President of US, Mary L Schapiro, Chairman, US Securities and Exchange Commission, Gary Genseles, Chairman, Commodity Futures Trading Commission, Martin J Gruenberg, Vice Chairman, FDIC Board of Directors and Nathan Sheets, Director, Division of International Finance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pranab Mukherjee said that India as one of the world's fastest growing economies and the United States, the world's largest economy, are committed to achieve a high growth global economy that is both stable and sustainable. He said that through our bilateral engagements and by working together in multilateral fora like the G-20, both the countries can expand economic opportunities and prosperity worldwide. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US Secretary Timothy Geithner said “India's growth is good for us, just as our growth is good for India” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Finance Minister saw no hurdle and said, “Through negotiations and conversations we have been able to remove the obstacles that are there.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Timothy Geithner courteously disagreed, saying, “I cannot improve on that answer, there's a bunch of things that stand in the way of increased trade between the countries, and we'll keep trying to work through those things.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally it was more talks than trade. </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"> – Friday'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"><strong><font color="#663399">Central Excise</font></strong> </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether discounts actually passed on to buyer - Respondents have discharged their onus by filing the CA certificate certifying their claim of discount, freight and insurance - Since Revenue has no evidence to controvert same, abatements are to be allowed: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REVENUE</strong> is in appeal against the impugned orders wherein both the lower authorities allowed the post manufacturing expenses as deduction with regard to Trade discount and Additional discount, insurance and transportation charges as per Chartered Accountant Certificate.</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 when assessee, a registered Trust, fulfils requirements of Sec 10(23FB) and also meets conditions of SEBI Regulations, can be treated as venture capital fund - YES, rules Tribunal</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is M/s Gujarat Information Technology Fund (a venture capital fund) and is constituted under a trust deed executed by Gujarat Venture Finance Ltd. on 21.3.2000 with initial corpus of Rs.5 lacs. The main object of the fund was to obtain capital growth by making investments in the concerns engaged in information technology sector or related business. During the year under consideration the assessee has earned substantial income from interest and claimed it to be exempt- AO while completing the assessment observed that assessee was not infact a venture capital fund per se and hence interest income of it, is taxable under the head income from other sources </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs/Port </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">No permission required from Customs for clearance of containers from Port – Port Trust cannot demand charges beyond 75 days: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> stand taken by the Port Trust authorities in deferring the sale process on a plea that since the cargo was not abandoned either by the consignee or by the line operator and further since the necessary permission was not obtained from the Customs authority for sale of the said cargo, the Port Trust authorities were unable to take steps for sale of the said cargo, was contrary to law and as such the Port Trust authority cannot penalise the Line operator by demanding payment of demurrage for stay of the containers in the port area beyond 75 days for no fault on the part of the Line operator. </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>
<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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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