TIOL-DDT 1739 · 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 1739 </font><br> 24.11.2011<br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption from Excise duty for all goods of Chapter 7305 fabricated at Construction site</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL </strong>Government amended Notification No. 3/2005-CE dated February 24, 2005, by substituting contents of Column (2) at S. No. 64 thereof with entry “7305 or 7308” as against the existing entry “7308”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With this amendment, all goods falling under Chapter 7305 fabricated at site of work for use in construction work at such site are also exempted from excise duty. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2011/etariff11_41.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.41 /2011-CE, Dated: November 18, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Results Framework Document – CBDT Chairman's Clarion Call</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> had carried details of the Results Framework Document in yesterday's <strong>DDT</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman, CBDT MC Joshi says, “The RFD process is aimed at making quantum improvement in the Departmental performance, leading to a win-win situation for all the stakeholders, namely, the Nation, ‘the Taxpayers' and the ‘Employees of the Department'. RFD is to be viewed as a tool for making our Vision 2020 a reality much before 2020. Performance that delivers real outcomes is imperative”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman wants his senior officers to spread the RFD message to every staff member has a working knowledge of Vision 2020 and participates in the preparation of RFD document for 2012-13. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He quotes, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“It is now widely recognized that good intentions and good beginnings are not the measure of success. What matters in the end is completion: performance and results. Not just making promises, but making good on promises. This is our guiding principle”</font></em></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">External Commercial Borrowings Policy - Parking of ECB proceeds - RBI Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present, borrowers are permitted to either keep ECB proceeds abroad or remit these funds to India, pending utilization for permissible end-uses. ECB proceeds parked overseas can be invested in liquid assets, such as, deposits or Certificates of Deposit or other products offered by banks (rated not less than AA (-) by Standard and Poor/Fitch IBCA or Aa3 by Moody's), Treasury bills and other monetary instruments of one year maturity having minimum rating as indicated above and deposits with overseas branches / subsidiaries of Indian banks abroad. The underlying principle is that funds should be invested in such a way that the investments can be liquidated as and when funds are required by the borrower. ECB funds may also be repatriated to India for credit to the borrowers Rupee accounts with AD Category I banks in India pending utilization for the permissible end-uses. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on a review of the current macro economic conditions, it has been decided that henceforth the proceeds of the ECB raised abroad meant for Rupee expenditure in India, such as, local sourcing of capital goods, on-lending to Self-Help Groups or for micro credit, payment for spectrum allocation, etc. should be brought immediately for credit to their Rupee accounts with AD Category I banks in India. In other words, ECB proceeds meant only for foreign currency expenditure can be retained abroad pending utilization. The rupee funds, however, will not be permitted to be used for investment in capital markets, real estate or for inter-corporate lending, as hitherto. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amended ECB policy will come into force with immediate effect and is subject to review. All other aspects of ECB policy would remain unchanged. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir052.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A P (DIR Series) Circular No. 52/RBI., Dated: November 23, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India's Growth and Fundamentals are Strong and Look More Attractive in a World Confronting Problems: FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Pranab Mukherjee said that RBI is closely monitoring the current rupee situation and he is sure that RBI will do the needful, as required. The Finance Minister further said that he would like to add that despite global uncertainty, FII Investments have been in the positive territory in October (USD 634 million) and November as of yesterday (USD 213 million). The Finance Minister said that India's growth and fundamentals are strong and they look more attractive in a world confronting problems. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> He was referring to the benchmark indices which lost 2.5 per cent (as of 2 P.M. yesterday) as overseas markets declined on concerns over US third quarter growth and high yields on Spanish bonds. He said that in India, a day ahead of the expiry of the November futures contract, trading remains choppy. Regarding the rupee, the Finance Minister said that the volatility in the Rupee is also keeping investors nervous, though today the rupee recovered from a low of 52.73 to trade at 52.12 per dollar. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> He said that against an expectation of a more modest revision, the third quarter US GDP growth was revised downward to 2.0 per cent from the advance estimate of 2.5 per cent. As a result, the US markets closed lower by around 0.5 per cent yesterday. Asian stocks also fell in the range of 2 - 2.5 per cent, after a mining tax was approved in Australia's lower house of Parliament, along with lingering concerns on Europe. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">European Union's Annual Growth Survey 2012 and Tax Reform Initiatives </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> European Commission is accelerating its efforts for economic renewal, with moves to address three interwoven challenges facing the EU and the Euro area in particular: a divergent but generally lacklustre growth and employment performance; insufficiently coordinated and disciplined budgetary policies; and unstable sovereign debt markets suffering from a lack of liquidity. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The package contains four elements: the 2012 Annual Growth Survey (AGS) setting out the economic priorities for the coming year; two Regulations to tighten economic and budgetary surveillance in the Euro area; and a Green Paper on Stability Bonds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this context, EU Tax Commissioner Algirdas Semeta said that in the coordination of fiscal policies, a new element is recognised this year in the AGS. According to Šemeta, "Tax policy is fundamental for economic recovery. Moreover, the quality of taxation will determine whether we sink or swim. Tax reform must go hand in hand with structural reform if we are to see sustainable public finances and financial stability." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AGS 2012 advises Member States to take a close look at how the quality of their revenues can be improved, focussing on a number of important areas in particular: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Raising revenues in a smarter way:</strong> Instead of arbitrarily raising rates, Member States should look at how to improve their current tax systems to raise revenues - for example, reconsidering tax breaks, broadening tax bases and phasing out hidden tax subsidies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tackling tax evasion and fraud:</strong> Many billions of Euros are lost from national budgets every year due to tax evasion and fraud. Member States need to strengthen their administrations to combat this problem, and ensure that the controls and sanctions are strong enough deterrents. Coordination at EU level is also crucial. It can ensure that aggressive tax planners can't exploit loopholes between Member States' systems and that there is a consistent EU approach to third countries when it comes to tackling uncooperative jurisdictions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Creating a better environment for business:</strong> Member States are advised to examine whether they could shift taxes away from areas that impede growth (labour, corporate taxes) towards more growth-friendly taxes (consumption, environment). Member States should also agree on proposals that would remove obstacles for businesses such as the Common Consolidated Corporate Tax Base and the Energy Tax Directive. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Coordinating at EU level to maximise reforms:</strong> EU coordination on taxation prevents distortions and obstacles to the Internal Market, limits non-taxation and abuse, and prevents a "race to the bottom" approach which can curtail national reform efforts. It also allows the exchange of best practices and strength in numbers when tackling common problems such as harmful tax competition from third countries. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">While EU has some plans including tax reforms and is initiating steps for economic revival, what do we have in India? A stalled Parliament, with no clue as to what will happen to all the crucial reform oriented Bills especially Tax Reform Bills pertaining to DTC and GST. If all is well as stated by our FM, why is rupee degenerating against the dollar so rapidly and why is there so much of uncertainty in stock markets. Can they be brushed aside by linking them to turmoil in the EU and US economies? </font></strong></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"><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"><font color="#663399">Customs </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti dumping – DA who held public hearings transferred and final findings given by successor DA without conducting fresh hearing - In terms of Apex Court decision in Automotive Tyre Manufacturers Association - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2011/2011-TIOL-03-SC-CUS.htm"><font size="1">2011-TIOL-03-SC-CUS</font> </a> Successor DA should give fresh hearings – </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MATTER</strong> remanded to DA to give post decisional hearings and modify final findings. The respondent-domestic industry and other interested parties, if any, shall also be allowed to participate in such post-decisional hearing. Any modifications made in the final findings would be considered by giving effect to the same by the Government by carrying out the necessary amendments to the impugned notifications imposing anti-dumping duty. </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 if assessee gets a part of manufacturing activities jobworked, it can be said that assessee itself is not engaged in manufacturing - ruled in favour of assessee: Bombay HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is engaged in the manufacture of plastic parts, which are excisable. Deduction u/s 80IB was claimed and allowed. In reassessment proceedings, the deduction was disallowed stating that the assessee was not a manufacturer as the goods were not manufactured at the factory premises of the assessee but the same were manufactured at the factory premises of the job workers and the total number of permanent employees employed in the factory being less than ten and the assessee had not fulfilled the condition stipulated in Section 80IB(2)(iv). </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">In addition to its primary business activity of banking service, respondent co-operative bank collecting electricity bill payments from various customers of Maharashtra State Electricity Board and receiving commission from MSEB - not liable to Service Tax under BAS: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent “The Akola District Central Co-operative Bank” is engaged in the business of collecting electricity bills from various customers of Maharashtra State Electricity Board (MSEB) in addition to its primary business activity of banking service, being a cooperative bank. The MSEB has facilitated the customers by allowing them to deposit the electricity bills into the account of MSEB being maintained by the respondent bank. For rendering such service, the co-operative bank received an amount of Rs. 11,93,799/- as commission </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><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>