TIOL-DDT 1652 · 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 1652 </font><br>
15.07.2011 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Duty Exemption on Natural Rubber - For Rest of Year? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No. 128/2010-Cus dated 22.12.2010, the Customs Duty on Natural Rubber was reduced to 7.5 per cent for the remaining part of the financial year 2010-11; that is from 1st April 2011, the duty would get back to Rs. 20 or 20 percent which is lower. And apparently it did. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has again reduced the rate of duty to 7.5 percent for the remaining part of the financial year 2011-12 for a quantity of 40,000 MTs; that is from 1st April 2012, the duty would get back to Rs. 20 or 20 percent, which is lower. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last year the duty was reduced in December, but this year they have done it in July. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a shortage of rubber in India and during the rainy season, not much of rubber could be tapped in Kerala. The tyre industry had been representing to the Government to totally exempt rubber from customs duty and in the last week of June, share prices of tyre companies had shot up on a rumour that Government had totally exempted rubber. But nothing happened yesterday when the Government had given a partial exemption. JK Tyre, Apollo Tyres, Goodyear – all went down marginally in the BSE, while there was a small increase in MRF. And almost the same situation prevails today too. Maybe the market had already discounted the reduction in Customs Duty or it was not aware of the Customs Exemption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exemption will bring some relief to tyre companies but will not be welcomed by rubber growers, as the price will come down. Customs duties are not simply about collecting taxes. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_059.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.59/2011-CUSTOMS, Dated : July 13, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">150 Years of Income Tax - President to Attend Concluding Ceremony </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRESIDENT</strong> Pratibha Patil and Finance Minister Pranab Mukherjee will participate in the concluding ceremony of the 150 years of Income Tax Department celebrations, at Vigyan Bhavan today morning at 11.00hrs. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revamping EOUs - Committee submits Report </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORT</strong> Oriented Scheme (EOU) was introduced in 1981 and is complementary to the SEZ scheme (erstwhile EPZ scheme). It adopts the same production regime but offers a wider option in location with reference to factors like source of raw materials, port of export, hinterland facilities, availability of technological skills, existence of an industrial base, and the need for a large area of land for the project. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salient features of the Scheme:</font></p>
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<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Exemption from Central Excise Duty in procurement of capital goods, raw materials, consumables spares etc. from the domestic market.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Exemption from customs duty on import of capital goods, raw materials, consumables spares etc.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Reimbursement of Central Sales Tax (CST) paid on domestic purchases.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Supplies from DTA to EOUs treated as deemed exports.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Reimbursement of duty paid on furnace oil, procured from domestic oil
companies to EOUs as per the rate of drawback notified by the Directorate General of Foreign Trade.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 100% Foreign Direct Investment permissible.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Facility to retain 100% foreign exchange proceeds in EEFC Account.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Facility to realize and repatriate export proceeds within twelve months.</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Access to Domestic Market upto 50% of FOB value of export on concessional rate of duty.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Job work on behalf of domestic exporters for direct export allowed.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Conversion of existing Domestic Tariff Area ( DTA) unit into an EOU permitted. </font></p>
</blockquote>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Over the last thirty years the EOUs have contributed enormously to our exports, but there have also been large-scale evasion and fraud. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In January 2011, the Government had set up a Committee under the Chairmanship of the NOIDA SEZ, SC Panda review/revamp of EOU Scheme in view of the current challenges and changing global business environment. (Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11894" target="_blank">TIOL-DDT 1522</a></strong>) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Committee has submitted its report recommending fiscal measures, policy initiatives, procedural simplifications and steps to reduce transaction cost to arrest the declining trend in setting up of EOUs and their exports. The Committee has also recommended exemption from Service Tax. Rationalisation of Administrative mechanism, warehousing facilities outside the units, export status on par with SEZs, job work for DTA units are some of the other recommendations. </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"> – Monday'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">Customs</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imports under Target Plus - Broad nexus with export product - CBEC Circular dated 8th May 2007 is ultra vires Foreign Trade Policy - Bombay HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Circular dated 8th May 2007, clarifying that imported goods are required to be used as an input in the product exported for which TPS benefit is sought is ultra vires the Foreign Trade Policy - Paragraph 3.7.6 of the FTP, does not incorporate a requirement that the goods which are imported as inputs must find physical incorporation in the export products in relation to which the benefit of the Target Plus Scheme is claimed. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether income assessed by applying Sec 69C is available for deduction under Sec 10(23C) - NO, says ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong>, a Trust, is engaged in dissemination of education. It filed its return of income without showing rent paid in cash to landlord. During search on landlord and consequent survey on assessee, assessee filed revised return of income disclosing these expenses. AO took the view that they were the expenses met out from undisclosed sources, and accordingly he made addition. The CIT(A) allowed the appeal of the assessee. On appeal to the ITAT the DR pointed out that assessee had deliberately concealed these expenses in order to hide its cash income. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Remission of Duty - Goods lost in fire - Issue is whether fire was avoidable or not avoidable - Denial of remission set aside: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> main reason for denial of remission of duty by the adjudicating authority was that the fire was avoidable. But going through the case records and independent reports by all the five authorities, who found that the fire occurred due to unavoidable circumstances, therefore, no reason for denial of claim of remission of duty. Accordingly, the order of denial of remission of duty is set aside and the claim of remission of duty is allowed.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend.</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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