TIOL-DDT 1653 · 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 1653</font><br>
</strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18.07.2011<br>
</font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Monday </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Development fee (DF) charged at airports - CBEC Clarification </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REPRESENTATIONS</strong> have been received seeking clarification regarding leviability of service tax on the Development Fees charged at Airports particularly at Mumbai and Delhi by Mumbai International Airport Pvt, Ltd. and Delhi International Airport Pvt. Ltd.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service tax is being paid on the Passenger Service fee (PSF) and User Development Fee (UDF) and a distinction is sought to be drawn between these and the DF. The stated purpose of permitting the levy of DF is to fund for up gradation, expansion or development of the airport. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Board explains:</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 65 (105)(zzm) of the Finance Act, 19,94, 'airport service' is defined as any service provided or to be provided by airports authority or by any other person in any airport or a civil enclave. Section 65 (3d) defines airport authority as "Airports Authority of India constituted under section 3 of the Airports Authority of India Act, 1994 (55 of 1994) and also includes any person having the charge of management of an airport or civil enclave". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 68 (1) of the Finance Act provides that every person providing taxable service to any person shall pay service tax at the rate specified in section 66. Further section 67 (1) of the Finance Act, 1994 provides that where service tax is chargeable on any taxable service with reference to its value then such value shall be the gross amount charged by the service provider for such service provided or to be provided by him. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case the Mumbai International Airport Pvt, Ltd. and Delhi International Airport Pvt, Ltd. are operating Mumbai and Delhi airports respectively and are providing service which is chargeable to service tax under Section 66 (105)(zzm) of the Finance Act, 1994, Similarly at other airports which are operated by Airport Authority of India, the said service is provided by Airport Authority of India and chargeable to service tax under the said section. The service tax is payable on the gross amount charged from the passengers for providing such service. <strong>It is immaterial how the gross amount charged for the service is treated in the books of the service provider and to what use it is being put to</strong>. Service tax is being levied under the Finance Act, 1994 and its leviability has to be solely determined under the provisions of this Act. The factum that gross amount charged for the service is being split into two parts, of which one portion is being used for a specific purpose by the service provider, is not relevant for the purpose of determining the value of the service. The value shall be determined only under the provisions of section 67 of the Act. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And Board Clarifies: </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Development Fee is chargeable to service tax under the 'airport service' . </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board further clarifies that its clarification reflects the interpretation of the law and does not override any statutory legal provisions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants immediate action to be taken to safeguard revenue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mumbai and Delhi Airports can expect Show Cause Notices soon. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/fno_106_df_airport7.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. 106/Commr(ST)/2009, Dated : July 08, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods From Bangladesh Exempted from Customs Duty</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has exempted the following goods imported from Bangladesh through the land route from Balat or Kalaichar land customs station for sale in Balat or Kalaichar border haats, subject to the prescribed conditions. </font></p>
<div align="justify">
<blockquote><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Locally produced vegetables, food items, fruits, spices </font></blockquote>
</div>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Minor local forest produce, for example bamboo, bamboo grass and broom stick but excluding timber </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Products of local cottage industry like gamcha, lungi </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Small locally produced agriculture household implements, for example dao , plough, axe, spade, chisel </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Locally produced garments, melamine products, processed food items, fruit juice </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_060.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 60/2011-CUSTOMS, Dated : July 14 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value reduced for Brass Scrap and Poppy seeds</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has reduced the tariff values of Brass Scrap (all grades) from USD 4317 to USD 4294. Tariff value of poppy seeds is decreased from 2405 USD to 2350. There is no change in the value of other items also. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_047.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 47/2011-CUS (N.T.), Dated : July 15, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transferred Officers not Relieved - Board is Again Serious </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had on 22.06.2011, transferred Assistant Commissioners/Deputy Commissioners in the Annual General Transfer. The transferred officers were to be relieved by 27.06.2011 and Chief Commissioners were to send a compliance report by 01.07.2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board finds that many Chief Commissioners have not bothered to report and the few who did reported that many officers are yet to be relieved. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has viewed non-compliance of its orders very seriously . </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board had taken disobedience of its orders very seriously hundreds of times, but the field officers know that Board's seriousness is a big joke. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just a month ago, we carried a report in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12644" target="_blank">DDT 1630- 15-06.2011</a></strong>, that Board was serious that the JCs and ADCs were not relieved. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From next time, perhaps the Board should become furious and not just serious. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/agt_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F No. A-22013/07/2011-Ad.II Dated: July 15, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Minimum Export Price of Onions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Minimum Export Price (MEP) of onions other than Bangalore Rose Onions and Krishnapuram onions will be US$ 230 per Metric Ton F.O.B. It was US$ 200 per Metric Ton as notified on 08.06.2011. There shall be no change in the MEP of Bangalore Rose Onion and Krishnapuram onion, which continues to be USD 350 per Metric Ton F.O.B. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not059.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 59/(RE – 2010)/2009-2014, Dated : July 15, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Extension of period for document submission, scrutiny and issue of registration certificate for export of cotton </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THROUGH</strong> Public Notice No. 55(RE-2010)/2009-14 of 17.06.2011, close date for document submission, scrutiny and issue of registration certificate for export of cotton was notified as 15.07.2011. Requests have been received for extension in view of strike/holidays in Bangladesh and disruption of work in Mumbai. Hence, close date is extended by one week up to 22.07.2011. There is no other change in Public Notice No. 55(RE-2010)/2009-14 of 17.06.2011. The last date of export remains 15.09.2011. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn065.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 65/(RE – 2010)/2009-2014, Dated : July 15, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Regularization of Liaison / Branch Offices of foreign entities established during pre-FEMA period - RBI Directions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>person resident outside India requires the prior approval of the Reserve Bank of India for establishing a Liaison Office (LO) /Branch Office (BO) in India. Applications from foreign Non-Government Organisations (NGOs) / Non-Profit Organisations (NPOs) / Government bodies / Departments for establishing BO / LOs in India are considered by the Reserve Bank in consultation with the Government of India, Ministry of Finance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has come to the notice of the Reserve Bank that certain BOs / LOs established by the foreign NGOs, NPOs, news agencies and other foreign entities are continuing to function in India, without the approval of the Reserve Bank, after the Foreign Exchange Management Act (FEMA), 1999 came into force from June 1, 2000. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The foreign entities who have established LO or BO in India and continuing to function without obtaining permission from the Reserve Bank of India should approach the Reserve Bank within a period of 90 days for regularization of establishment of such offices in India, in terms of the FEMA provisions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The foreign entities who may have established LO or BO with the permission from the Government of India may also approach the Reserve Bank along with a copy of the said approval for allotment of a Unique Identification Number (UIN) by the Reserve Bank of India. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AP (DIR Series) Circular No. 02/RBI, Dated : July 15, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>'kosh
moolo dandah'</em> Still Relevant - FM </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the
concluding session of the celebration of 150 years of Income Tax, the Finance
Minister Pranab Mukherjee said that the ancient dictum,<em> ‘Kosh Mul Danda'</em> continues to be as relevant today as it was thousands of years back. This
dictum in Kautilya's 'Arthashstra' means <strong>treasury is the root of
administration</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister said: <em>At one level, tax collection is a painful and a difficult task, as it requires people to part with their hard-earned incomes. This task could become more acceptable and participatory if the taxpayer knows that his contributions are being constructively used in the task of nation building. Through the film and the artworks, we have tried to remind people that their tax contributions go a long way in bringing a smile on the faces of many people, who otherwise would languish in poverty. At the same time, it helps in creating the opportunities for them to grow and improve their well-being</em>. </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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal - Pre-deposit - Mere fact that appellant is a PSU is not sufficient for waiver of pre-deposit - Tribunal not justified in launching upon a detailed investigation at Stay stage: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> law is not that a Government Company within the meaning of Section 617 is entitled to an order dispensing with the requirement of pre-deposit merely for the reason that it is a Government Company. The requirement of undue hardship within the meaning of proviso to Section 35F has to be evaluated by the Tribunal by following the well settled principles. Undoubtedly, where the Appellant is a Government Company, which is in sound financial position that would be a material consideration, which has a bearing on the safeguarding of the interests of the Revenue. </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 growing of plant in lab by applying scientific method of tissue culture can be claimed as agricultural activity, exempt under I-T Act - NO, rules ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a company engaged in the business of growing and exporting of ornamental plants. It filed its return of income for the assessment year 2005-06 claiming the entire income as agricultural income and also exempt from Income-tax. The AO after visiting the premises of the assessee company and discussing the matter with Director of the company came to the conclusion that the assessee was carrying on tissue culture methodology and by this process, some of the activities carried on by the assessee are non-agriculture and, therefore, the entire income from the sale of plants cannot be termed as agricultural income. He, therefore, bifurcated the income into agricultural income and business income in the ratio of 70:30. </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">Adjudicating authority could not have conducted de novo proceedings as Commissioner (Appeals) has lost power of remand from 11.05.2001 – remand order passed by CESTAT nullifies subordinate proceedings that had arisen out of O-in-A - Matter to be decided expeditiously by Commissioner (A): CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MULTIPLICITY</strong> of proceedings leads to strange situations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this interesting case, the issue is whether the appellant-company, successor to Maharashtra State Electricity Board (MSEB), was rendering taxable service in the nature of "Consulting Engineers service" to the consumers of electrical energy during the period of dispute (April 2000 to March 2005). </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><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>