TIOL-DDT 1686 · 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 1686 </font><br> 06.09.2011 <br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Self-Assessment - CBEC Instructions</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> notes that:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Finance Act 2011; 'Self-Assessment' has been introduced under the Customs Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under 'self-assessment', responsibility of filing correct declaration lies with the importer or exporter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The declaration filed by the importer or exporter may be verified by the proper officer when so <em><strong>interdicted </strong></em>by the Risk Management systems (RMS). In rare cases, such <em><strong>interdiction</strong></em> may also be made with the approval of the Commissioner of Customs or an officer duly authorized by him, who shall not be below the rank of Additional Commissioner of Customs, and that will necessarily be done after making a record of the same in the EDI system. On account of interdictions , Bills of Entry may either be taken up for action of review of assessment or for examination of the imported goods or both. If the self-assessment is found to be incorrect, the duty may be reassessed. In cases where there is no<em><strong> interdiction</strong></em>, there will be no cause for the declaration filed by the importer to be taken up for verification, and such Bills of Entry will be straightaway facilitated for clearance without assessment and examination, on payment of duty, if any. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">According to Black's Law Dictionary, interdiction means, "the act of forbidding or restraining". It is not very clear as to what exactly the Board means by interdiction . </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board continues: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisions have been made in section 17 of the Customs Act, 1962 to empower the officers of Customs to carry out verification of correctness of assessment of duty relating to imported or export goods at premises of the importer or exporter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This will lead to introduction of '<strong>On-Site Post Clearance Audit</strong>' in Customs in near future. The focus of self assessment is reliance on declarations made by the importer and exporter for higher facilitation of consignment at Customs stations and verification of correctness of documents at importer's or exporter's premises to detect any infringement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, self-assessment has provided a legal framework to significantly enhance facilitation level in Customs by reducing pre-clearance checks based on risk parameters in case of self assessed documents. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board feels that: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Faulty and indiscriminate targets have resulted in false hits and unnecessary interventions. These ineffective interdictions have resulted in delay in clearance of goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is assumed that if this rationalization of redundant and ineffective targets of Local Risk Management (LRM) and National Risk Management (NRM) are carried out, the percentage of facilitation is bound to increase substantially. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To streamline the procedures and for effective implementation of self assessment using RMS, Board has decided that the facilitation target of 80% for Air Cargo Complexes, 70% for Seaports and 60% for ICDs should be achieved in the next six months. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board desires: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">That decision taken by Board should be <strong>complied with strictly</strong>. DG (Systems) and RMD should ensure that necessary rationalization and fine-tuning of the Risk Management System is carried out in a time bound manner so that desired level of facilitation as set out by the Board in respect of Air Cargo Complexes, Seaports and ICDs can be achieved. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_039.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 39/2011-Cus., Dated: September 02, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Handloom Included </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended the 'note' to Sl. No. 11 of Table-2 in Appendix 37D to read as: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Note: The expression 'Handmade' would include Hand-Made, Hand-knotted, Hand-Tufted, Hand-Woven and <strong>Handloom</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier 'Handloom' was not included in the expression "Handmade" in the 'Note' in Table-2, Sr. No.11 of Appendix 37D. This is now rectified. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn077.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 77/(RE-2010)/ 2009-14, Dated: September 05, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">On Leadership, Pragmatism and Determination in World Trade - WTO DG Pascal Lamy </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong>IT</strong> is also time to think seriously about how we can continue to advance global trade opening, how we can progress in updating the existing trading rules. And in so doing, I see three key ingredients: <strong>leadership, pragmatism</strong> and <strong>determination</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Leadership</strong> is crucial because trade negotiations are governments' actions and governing requires making choices, taking decisions and being ready to defend them at home. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pragmatism</strong> is needed to find paths that lead us to a final result; the path may not always be straight, we may need to take long winding roads, we may need to move at different speeds but the final goal will be worth it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Determination</strong> is a must; we cannot give up just because the slope is too steep, because it takes too long or because the headlines are negative; we need determination because WTO negotiations are a collective enterprise of 153 members building for the long-term". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was WTO DG, Pascal Lamy speaking at the inaugural function of the 2011 WTO Regional Trade Policy Course for the Asia-Pacific region, at Delhi yesterday. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He added, "<em>An old proverb says "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime". It is this ancient proverb that best illustrates what the WTO technical assistance and capacity-building stands for: helping developing countries build the necessary long-term capacity to be active members of the WTO family. Helping them in mainstreaming trade into their national plans for development and for poverty reduction</em>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commerce Minister Anand Sharma said, "<em>India has an abiding commitment to building capacities for the people in the developing world and we have been doing so for decades in Africa, Asia and Latin America through a whole list of scholarship programmes. The Regional Trade Policy Course is a flagship Capacity Building Programme of the WTO and this is the first time that this course for the Asia Pacific region is being organized in South Asia, which makes it truly special.</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"> – Wednesday'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"><font color="#663399"><strong>CESTAT </strong></font></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Conflicting opinions by different benches of Tribunal are not conducive to business and trade and can cause adverse effect on economy of the country: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVEN</strong> if the CESTAT, New Delhi did not agree with the reasoning given by the CESTAT, Bangalore, in similar proceedings on the same facts, it should have followed the practice of referring the matter to a Larger Bench. Apart from institutional integrity, the same Company, in respect of same period in the same activities, could not be subjected to different opinions expressed by the Tribunal, causing doubts and confusion over the liability. Such conflicting opinions by different benches of the Tribunal are not conducive to business and trade and can cause adverse effect on the economy of the country. </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 imaginary loss arising out of valuation of interest rate swap is eligible for deduction in computation of income: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of dealing in government securities, bonds, debentures and providing services of arranging and underwriting the issue of debentures and bonds etc. During the course of the assessment proceedings, the AO noticed that the assessee has claimed a deduction of Rs 10,10,92,000 being loss on interest rate swap valuations. The assessee submitted that interest rate swap is a financial contract between two parties exchanging a stream of interest payments for a notional principal amount, on multiple occasions, during the contract period. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench are - Whether the imaginary loss arising out of valuation of interest rate swap is eligible for deduction in computation of income and whether, for the purpose of computing taxable income, deduction can only be allowed in respect of ascertained and enforceable liability which can be enforced on or before the end of the relevant previous year. And the verdict goes in favour of the assessee. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">SFIS - Transmission of data through under-sea optical fibre cable constitutes supply of service from India: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> transmission of data, voice or video through an optic fibre cable laid undersea from a point within India to an overseas destination constitutes a supply of service from India to any other country within the meaning of clause (i) of Para 9.53. The task of the PIC was to interpret Foreign Trade Policy. In the process of construing the policy, it would not be open to the Committee or, for that matter, to any administrative authority to modify the policy or amend the policy. The reasons, which weighed with the PIC in holding that the Petitioners do not fall within the description of a service provider in Paragraph 9.53 are fallacious. </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">Credit Cards - Tax payable even prior to Finance Act 2006 - Cum Tax value to be adopted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> proposal by Finance Act, 2006 was to bring comprehensively all types of cards under one definition clause so that all services provided in relation to such credit cards shall be conveniently dealt by the tax administration following cannon of convenience which is one of the considerations of classification rule. Therefore at no point of time, credit card service cannot be presumed to be excluded from levy before enactment of Finance Act, 2006. </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>