TIOL-DDT 1753 · 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 1753 </font><br> 15.12.2011 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">One-time Amnesty for Foreign Funds - FICCI Recommends </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a meeting with the Finance secretary RS Gujral, a FICCI delegation suggested a one-time amnesty scheme to encourage Indians to bring back their overseas wealth. FICCI also suggested</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>++ Rationalize MAT:</strong> Capital intensive projects with long gestation period are unable to recover MAT by way of set-off from future tax liability during specified period of 10 years. MAT rate should therefore be rationalized from a high 20 per cent (approx including surcharge and education cess) to a more reasonable level. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <strong>Streamline Transfer Pricing Regulations:</strong> Introduce Safe Harbour rules for captive Business Process Outsourcing; issue guidelines to recognize approaches for evaluating arm's length character of transactions involving marketing intangibles; introduce appropriate guidance on pricing of inter-company funding; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>++ Foreign Exchange Transactions:</strong> India has seen huge volatility in the foreign exchange rates. To avoid hardship on the taxpayers, losses on account of foreign exchange should be allowed as revenue expenditure including unrealized year end mark-to-market losses and forex derivative and hedging transactions should be specifically excluded from the definition of speculative transaction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>++ Service Tax:</strong> Expansion of scope of the term 'input services' under Cenvat Credit Rules, 2004 so that credit of all the services used in business is available; clarity on point of taxation in case invoice is raised or services are provided before services became taxable; threshold limit should be applicable even in case of payment of service tax under reverse charge; extension of time limit for revision of service tax return; recipient of service should not be made liable for non-issuance of invoice by the service provider in cases where liability to pay service tax is on recipient and adjustment of excess or short payment of service tax to be permitted within the same financial year, without any monetary limit. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">White Paper on Black Money - Why this Drama? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government has announced that it would bring a white paper on black money. And this is covered by every news media in the country as if they are going to bring us manna from heaven. All that they are going to do is to make even the white paper black. Most of the Hon'ble Members of our Parliament are crorepatis and the Hon'ble Finance minister has assured them that none of their names figures in the list the Government has.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who is interested in unearthing black money? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The politicians are undoubtedly the largest repositories of black money – you need at least a Crore of rupees to become an MLA and at least 10 Crores to become an MP – all in black. Would they like their black names in the White Paper? And these politicians make all the laws and all the White Papers. Why would they ever want anybody to get at the black money? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Next to the politicians, perhaps the babus have the highest stock of black money. They help the politicians in preparing the White paper – why should they blacken the paper? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the next category would be the businessmen – the merchants, the real estate dealers, the hoarders, the black marketers, the contractors who all have to invariably generate and handle black money at least to feed the babus and Netas - to make their profits. Why would they want any White paper on the black money? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then, there are the professionals like doctors, accountants, lawyers who all generate tons of black money – they are not interested in anything white, even if it is only a paper. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of the shaky pillars of our great democratic edifice, at least two – judiciary and Press were perceived to be honest - white, but recently we had an eminent lawyer telling the Supreme Court that some of the former Chief Justices were undoubtedly corrupt and promptly the credentials of the lawyer were questioned. And Journalists – well if everybody is generating black money, why should they lag behind? Ram Nath Goenka used to say that once upon a time journalists were missionaries – they have now become mercenaries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even the very honest people are forced to generate black money and give a bribe at least once in his life. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can we take some solace in our Godmen who preach sitting on top of mountains of black money? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can I turn to God? Lord Balajee, in spite of getting washed with purest water, rare oils and whitest milk is jet black with all the black money pouring into his hundi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who, then is interested in this meaningless White paper on Black Money. I am sure some black money will be generated even in the preparation of this White paper – in buying paper, printing, design and distribution. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once we have the courage to accept the fact that black money is a reality involving too many people, we will realize the futility of wasting time, money and precious paper on criminal White Papers. In this context, the suggestion of FICCI to allow amnesty for foreign funds should be extended to funds within the country. We need another Voluntary Disclosure Scheme – at least we can get some money, instead of reams of white paper filled with black official jargon full of civil service literature that would be discarded into the dustbins of history. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us not make that paper black. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am reminded of a Hindi song - <a href="http://www.youtube.com/watch?v=Hjjm13bm54g"><strong><em>Mera jeevan kora kagaz – kora hi rah gaya</em></strong></a>, which ends with; </font></p> <p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Woh sukhi hai jo khushi se dard sah gaya - </font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He is happy who bore pain unperturbed.</font> </p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Overtime to Customs/Excise officers - a pittance? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong> and Central Excise officers supervising export related activities are paid overtime. The amount paid to the officers is a fraction of what the Government collects from the exporters. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An Excise officer writes to us: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The officers are paid a pittance as overtime charges as low as Rs 15/85 per hour on working days and Rs 22/15 per hour on holidays - the rate is vogue since 1994 after which two Pay Commissions were implemented. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The overtime as per Factory's Act would be a minimum of 1.5 times the regular wage. Here the same is less then alms received by beggars. In this background, you are requested to bring the atrocious fact to the light of the authorities concerned and bring succour to the officers. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most officers are reluctant to bring this fact to light because of the sheer embarrassment of quoting the amount. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I sincerely hope that this would be taken in the right spirit and justice is done. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It would be pertinent to add that the Railways vide RBE No 67/2011 dtd 16-05-2011 revised the night duty allowance taking into consideration the hike in DA. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is really humiliating to pay 63 rupees and forty paise to a Superintendent of Central Excise (of course whether he is a Central Excise officer itself is now doubtful) for attending to export clearances for four hours. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are told that many officers don't claim this paltry OT at all and one reason could be they collect far more than that from the exporters. But that, certainly, is no good reason to give a pittance as OT. If that be so, Government need not pay any salary at all! But now the salaries are reasonable and quite good. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board should either consider giving a steep hike in OT or do abolish it altogether. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No SEZ in Bihar </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A SEZ</strong> may be set up either jointly or severally by the Central Government, State Government or any person for manufacture of goods or rendering services or for both or as a free trade warehousing zone. Such proposals duly recommended by the <em><strong>concerned</strong></em> State Government are considered by the Board of Approval for SEZs. No such proposal recommended by the Govt. of Bihar is pending with the Union Government. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The highest number of approvals and functioning SEZs are in Andhra Pradesh. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This information was given by Anand Sharma, Minister for Commerce, Industry and Textiles in written reply to a question in Rajya Sabha yesterday. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Day 2012 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> is planning to celebrate International Customs Day Celebrations on Friday, the 27 th January 2012. This year, the World Customs Organization (WCO) has decided to dedicate International Customs Day with the theme <strong>"</strong><em><strong>Borders Divide; Customs Connect"</strong></em>. WCO has stated that Borders are synonymous with division and the main challenge for WCO Members is to find the best methods to increase connectivity, which refers to people-to-people, institutional, and information linkages that underpin and facilitate the achievement of Customs' main goals: ensuring the smooth and lawful flow of goods, people and means of transport; and fighting efficiently against all types of fraud and crime that affect the legal economy and society in general. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the occasion of the International Customs Day, Customs officers who have demonstrated commitment in their work towards connectivity would be awarded 'WCO Certificate of Merit'. Representatives from business world and academic world may also be honoured for their contribution in connection with the above theme. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/letter_customs_day.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. 21000/9/2011-Cus/ICD Dated. December 08, 2012 </font></strong></a></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 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">Customs</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CHALR- Those who passed examination under 1984 Regulations have no vested right for a licence under 2004 Regulations: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> mere passing of an examination under the 1984 regulations did not confer a vested right to the grant of a licence. Upon the enforcement of the regulations of 2004 every applicant for the grant of a new licence must comply with the regulations which were made in the exercise of the statutory power conferred by Section 146(2). The requirement of passing an examination in additional subjects is based on an intelligible consideration which is to upgrade the skills and competencies of persons who seek to apply for a licence as CHAs. A person who seeks a licence after the enforcement of the Regulation of 2004 must therefore comply with the requirements of the new regulations. </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 State Electricity Board pays for transmission of electricity from point of generation to end-users, such payment constitutes rent as per provisions of Sec 194I - NO, rules ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong>, a Public Sector undertaking, is engaged in the distribution of electricity. It entered into purchase agreement with NTPC for buying electricity; the important aspect of this agreement was that the assessee owed the obligation to carry electricity from the point of generation to the point of consumption. In order to carry the electricity the assessee in association with other electricity distributors entered into an agreement with Power Grid Corporation India Ltd (PGCIL) - Assessee paid charges to the PGCIL for transmitting electricity from the transmission lines, the ownership of these lines were with PGCIL - AO was of the view that the assessee was under obligation to deduct tax at source on the payments made to PGCIL and hence liable for interest and penalty as per the provisions of section 201 and 201(A), and accordingly he declared the assessee in default </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">If service tax paid on services obtained from foreign commission agents is admissible as credit, then service tax paid on commission agent's services within country would also be admissible as credit: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant cleared finished goods on payment of excise duty on transaction value. Revenue was of the view that the appellant was not eligible to avail credit of service tax paid on commission agent's service, as the said service had no nexus with manufacturing activity and clearance of final products from place of removal. Service tax credit amounting to Rs. 4.14 lakhs was demanded with interest and penalty imposed.</font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements</font></strong></p> <p><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>