TIOL-DDT 1821 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font><font color="#663399" size="3">TIOL-DDT 1821</font><br>
22.03.2012 <br>
Thursday
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<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget 2012 - Mega Notifications - Corrections </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIRST</strong>, they try to complicate matters and then they try to simplify them. Here are some corrections in the Budget Notifications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_012.htm" target="_blank">Notification No. 12/2012 - Cus</a></strong>: Notification No. 21/2002-Cus was superseded by this Notification. In the 2002 Notification, entry No. 152 in the table read as: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr valign="top">
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></strong></div></td>
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Heading</font></strong></div></td>
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description</font></strong></div></td>
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Std. rate </font></strong></div></td>
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional duty </font></strong></div></td>
<td><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Condition No. </font></strong></div></td>
</tr>
<tr valign="top">
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">152</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4707</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> A) All goods imported for use in, or supply to, a unit for manufacture of paper or paperboard other than newsprint; </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.5%</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20</font></td>
</tr>
<tr valign="top">
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (B) All goods, imported for use in, or supply to, a unit for manufacture of news print. </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.5%</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20</font></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While importing this into the new Notification into the new Budget Notification 12.2012-Cus, this became: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">262</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4707</font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods</font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil</font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-</font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20</font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the goods under 4707 are now fully exempted; but that was not the intention of the Government. So, they amended this notification, which now looks as: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr valign="top">
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"262 </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4707</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) All goods imported for use in, or supply to, a unit for manufacture of paper or paperboard other than newsprint</font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></td>
<td>-</td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25A</font></td>
</tr>
<tr valign="top">
<td> </td>
<td> </td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) All goods, imported for use in, or supply to, a unit for manufacture of news print. </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></td>
<td><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25A" </font></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The condition No. 25A inserted now, is identical to the Condition No. 20 in the old Notification No. 21/2002-Cus. What will happen during the three days this amendment was not in force? Litigation? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_023.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 23/2012-Customs, Dated: March 20, 2012</font></strong></a></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget Notifications: Corrigenda Galore </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEVERAL</strong> mistakes in Notifications have bee corrected by Corrigenda. We could locate 9 such corrigenda – we really do not know how many were issued, how many suppressed and how many released. These corrigenda do not have any Sl. No or any reference number. Will it not be more decent, legal and proper to issue amendment notifications to correct the mistakes than going on with unaccountable corrigenda? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/corrigendum_12_012_I.htm" target="_blank">Corrigendum No. 1 to Notification No. 12/2012-Cus</a></strong> - <strong>Unfertilised</strong>: They had really bungled with the fertiliser exemption, starting in 2011 Budget and the bungling continues. This is too big an issue to be covered in DDT. So, today we are carrying an article on the subject, CVD rate on Imported Fertilizers – existing enigma. Several other items are also changed by this corrigendum. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/corrigendum_12_012_II.htm" target="_blank">Corrigendum No.2 to Notification No. 12/2012-Cus</a></strong>: Several items changed, notably the exemption to imported gold. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Corrigendum to Notification No. 16/2012-Cx .: Notification No. 16/2012 inserted a new Sl. No. 131 in Notification No. 1/2011-Cx. But Sl. No. 131 was already there. So, now they made it 132. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/corrigendum_exnt12_09.htm" target="_blank">Corrigendum to Notification No. 9/2012-Cx</a>.: </strong>"2402 20 20", changed as "2402 20". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/corrigendum_exnt12_10.htm" target="_blank">Corrigendum to Notification No. 10/2012-Cx</a>.:</strong> "2402 20 20", changed as "2402 20" and "2402 20 40", as "2402 20". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/corrigendum_exnt12_11.htm" target="_blank">Corrigendum to Notification No. 11/2012-Cx.</a>:</strong> "2402 20 20", changed as "2402 20".</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/corrigendum_12_003.htm" target="_blank">Corrigendum to Notification No. 3/2012-ST</a>.:</strong> Amount payable by moneychangers - "0.12 per cent." changed as "0.012 per cent". </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is very difficult for any one to keep track of these amendments and corrigenda. If they had been a little more careful before issuing these notifications, this inconvenience could have been avoided. But at the same time, it must be stated that this is amazing that minute mistakes are detected and corrected. The Board deserves all praise for accepting these glaring mistakes as mistakes and correcting them . </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value decreased for Silver </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has decreased the tariff values of silver from 1145 to 1036 US Dollars per kg. The other items remain unchanged. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_023.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 23/2012-CUS (N.T.), Dated: March 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Deemed Export Benefit for Non Mega power Projects </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> new Para 8.7 is added to the Foreign Trade Policy as: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Notwithstanding anything contained either in FTP or in HBP vol. 1; supplies to non mega power projects shall not be entitled to any deemed export benefit." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No.92 (RE-2010)/2009-2014 dated 28.12.2011, supplies to non mega power projects were entitled to benefits for Deemed Exports only under Para 8.3(a) of FTP, viz., Advance Authorisation / Advance Authorisation for annual requirement / DFIA. It has now been decided that supply to non-mega power projects shall not be entitled to <u><strong>any</strong></u> deemed export benefit. When the annual supplement to FTP is brought out, the consequential changes of this decision will be reflected in various provisions of chapter 8 of FTP and also HBP vol. 1 </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not107.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 107 (RE-2010) /2009-2014 , Dated: March 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Malpractices by Members of ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has informed the Rajya Sabha that the Chief Justice of India had asked the Central Government (vide letter dated 18.2.2011) to take appropriate decision in respect of certain Members of the Tribunal who are alleged to have an unholy nexus with private persons on account of issuance of orders favouring the clients, resulting in possible losses caused to the Government. Giving this information in written reply to a question in the Rajya Sabha, Salman Khurshid, Minister of Law & Justice, said that the matter is under consideration. He gave this information in reply to a question whether it is a fact that the Chief Justice of India had asked Government to take appropriate action against at least 20 members of the Income Tax Appellate Tribunal who are alleged to have outsourced writing of judgments to private parties and got financial favours in return. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the Minister, the Chief Justice wrote to the Government on 18.02.2011 and now, even after more than a year, the matter is still <em><strong>under consideration</strong></em> of the Government! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Government parlance, "'<strong>the matter is under consideration</strong>' means we have lost the file. '<strong>The matter is under active consideration'</strong> means we are trying to find the file."</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">NBFC - Lending against Gold </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI </strong>has observed that NBFCs that are predominantly engaged in lending against the collateral of gold jewellery have recorded significant growth in recent years both in terms of size of their balance sheet and physical presence. This in turn, has led to their increased dependence on public funds including bank finance and non-convertible debentures issued to retail investors.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Given the rapid pace of their business growth and the nature of their business model, which has inherent concentration risk and is exposed to adverse movement of gold prices, as a prudential measure, it has been decided that all NBFCs shall </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. hereafter maintain a Loan-to-Value(LTV) ratio not exceeding 60 percent for loans granted against the collateral of gold jewellery and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. disclose in their balance sheet the percentage of such loans to their total assets.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NBFCs should not grant any advance against bullion / primary gold and gold coins. NBFCs primarily engaged in lending against gold jewellery (such loans comprising 50 percent or more of their financial assets) shall maintain a minimum Tier I capital of 12 percent by April 01, 2014.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI/ 2011-12/467 , Dated: March 21, 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><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">Exemption - Expert Opinion should be given due importance - beneficial notification should be given a liberal interpretation: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. </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 assessee fails to deduct tax at source from salary paid to expats, amendment in Sec 201 by Finance Act, 2009 enables Revenue to overcome limitation of initiating proceedings even for FY ending before April 1, 2007 - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>search was conducted on 11/09/2007 in the premises of the assessee, a U.S. based NGO, established in 1943 and engaged in aid and relief work in India for a number of years. The assessee did not deduct tax at source on salary and perquisites of its expatriate employees. The issues before the Bench are - Whether when non-resident assessee fails to deduct tax at source from the salary paid to its expat employees, the amended provisions of Sec 201 by Finance Act, 2009 enable Revenue to overcome the limitation of initiating proceedings even for FY ending before April 1, 2007 and Whether when decisions of some HCs are contrary to the decision in the NHK Broadcasting Corporation, even then the law laid down by the jurisdictional HC is a good law. And the verdict goes against the Revenue. </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">Activity of storage and retrieval of records of banks and corporate houses viz. discharged cheques, vouchers, agreements, books of accounts etc. which were not intended for sale and do not have any commercial value – Not leviable to Service Tax under the category of "Storage and Warehousing of goods" as "goods" should be saleable: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> various old records such as discharged cheques, vouchers, books of accounts in respect of which the service was rendered by the appellant to his clients such as banks and corporate houses for management of the records, cannot be considered as storage and warehousing of "goods" as defined in the Finance Act, 1994 read with section 2(7) of the Sale of Goods Act, 1930. </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>
<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>
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