TIOL-DDT 1859 · 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 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 1859 </font><br> 17.05.2012 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rajya Sabha Okays Finance Bill 2012 - FM ready to bite bullet if needed; Determined to collect tax from Vodafone </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Rajya Sabha yesterday returned the ‘Finance Bill 2012', as passed by the Lok Sabha. In a very long speech the FM strongly defended the Vodafone amendment. Excerpts from his speech. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bite the Bullet:</strong> The Finance Minister should not hesitate to bite bullet; I am not hesitating. But I would like to bite bullet when I see that my biting bullet will end in results, not merely making a proposition, and thereafter finding it that it is ending in a fiasco. It is not that. It must achieve success; it must achieve the objective; it must achieve the goal, which I want to do. Collectively, we shall have to decide it. Petroleum prices are increasing by leaps and bounds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Three major questions are staring at our face. We cannot keep them under any carpet. If we do not take corrective measures, we will have to face the disastrous consequences. Therefore, we shall have to think on these lines. It is not merely my own thinking or the thinking of the Government of-the-day. Today, we are here; tomorrow, you will come; day-after, somebody else will come; after some time, again, we may come back. Parliamentary Democracy's mortality rate is very high. Who doesn't know about it? But, despite that, the system continues. King is dead; ‘long live the king'. It is equally applicable in Parliamentary Democracy.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am going to issue some austerity measures. And as at one point of time not long ago, my ministerial colleagues, particularly, those who are tall and high, they became very angry with me when I said you will have to travel in the normal class, 'Y' class, not 'J' class, they said there is no adequate leg space, what should they do. What type of austerity measures we are going to have, we are going to take them, but some sort of austerity measures to convey the signal that we are responding to the situation as needed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Vodafone:</strong> It is not disrespect to the Supreme Court. It is not to ignore the Constitutionally assigned responsibility of the Supreme Court. In a federal democracy, where there is division of powers, each constitutional organ has its own responsibility. Just as the Judiciary has the right to interpret laws, the Legislature has the right to enact laws. And if, in that process, there are divergences of opinion, it should not be treated as confrontation; it is an honest difference of opinion, and if we make an attempt at reconciling that honest difference of opinion, it is not wrong. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I have international agreement with 82 countries in respect of the Double Taxation Avoidance Agreement. I would like to ensure and implement that in letter and spirit. But companies have to pay taxes if they gain from Indian asset. I am not going into the details of the Vodafone case. I explained it to them when their representatives came to see me. I told them, 'we have informed you in the month of March, not once but twice, that your transactions are going to attract tax. You have the responsibility to deduct taxes.' India is not a tax haven. I want foreign exchange. But for that, I would not like to convert India into Cayman Island or Isle of Man. India will have to be a country which honours its international commitment. At the same time, we will have the legitimate tax demands. During Yashwant Sinha's time, the whole section was inserted in the Income Tax Act with effect from 1962. Every Finance Minister has done it, but, in this case, somehow it has attracted wide attention because it involves big companies and huge amount. I shall also have to look at my own interest. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What would have been the consequences if I would not have done it? There are many companies; they have accepted the interpretation of the Income Tax Department. They have paid taxes. They have not challenged it once it became the law. Supreme Court's interpretation, unless it is changed by the subsequent amendment of the Act, stands as the law. I shall have to pay Rs.40,000 crore to Rs.50,000 crore, which is not acceptable. They deposited Rs.2,500 crore as per the direction of the Supreme Court. I paid it back to them with interest. I have paid interest for the period for which I retained the money. My point is very simple. Yes, I want FDI and for that I have taken a series of measures in my Budget. I am not going to read it. I have taken a series of measures to attract FIIs and FDI. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ECB:</strong> I am fully aware of External Commercial Borrowings. I am fully aware of it. It has been pointed out that I should not fall into the debt trap and create a situation similar to 1991. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DTC:</strong> We are going to implement the Direct Tax Code in the coming Monsoon Session. I express my deep gratitude to the Chairman and all the Members of the Parliamentary Standing Committee on Finance, who have done a good job. If I would have got it little earlier, then, many of these things, I could have implemented in the Budget, but whatever it is, for the Direct Tax Code, it is not necessary that I shall have to wait for the Finance Bill, I can do it at any point of time after obtaining the approval of the Parliament and both the Houses, when we will get it through. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GST:</strong> We have made substantial progress on GST. It is not that there has not been any progress in it but please remember that it is not a very easy task. The States have their own way of functioning. They have their own compulsions. Simply, I cannot blame them. They will have to keep in mind their own requirements. Now, we are running a coalition Government. The coalition has its own advantages, it has its disadvantages. Its great advantage is that decisions are taken through broad consensus, and, that has its own strength. It is a great advantage. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Handling of Cargo in Customs Areas Regulations, 2009 - Amended </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has amended the Handling of Cargo in Customs Areas Regulations, 2009, mainly to specify the “proper officer” for various provisions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, a new proviso is added to Regulation 7: </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Provided that no exemption shall be granted in respect of any of the conditions referred to in regulation 5, where the overall safety and security of the premises are likely to be affected thereby."</font></em></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_043.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 43/2012 - Cus.,(N.T.), Dated: May 16, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export of Sugar - DGFT Modifies Circular within two days </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>POLICY</strong> Circular No. 62(RE-2010)/2009-14 dated <strong>14.05.2012</strong> prescribed the conditions and modalities for registration of contracts with DGFT for export of sugar in the current sugar season (1st October, 2011-30th September, 2012). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has modified certain provisions of the circular. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The application for issue of RC can be for an amount <strong>upto a maximum quantity of 25,000 MT (Twenty five thousand metric tons)</strong>. Earlier this limit was 10,000 MT per RC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) In addition to <strong>export against Letter of Credit (LC) and/or FIRC, export would also be permitted against Cash Against Documents (CAD)</strong>. Exporters have to indicate type of instrument (LC/FIRC/CAD) while applying for issue of RC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii) Export against RC shall be <strong>completed within a period of 60 days</strong> from the date of issuance of such certificate. Earlier this was given as 30 days. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv) An applicant is at liberty to seek split RCs for export through more than one port, within the overall quantity limit of 25,000 MTs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v) Application for second and subsequent RC can be submitted only on completion of at least 50% of export against RC issued to the exporter (quantity permitted in the RC as a whole is to be taken for calculation, not quantity split RC-wise). <strong>Exporters have to submit the proof of such exports.</strong></font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir063.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 63/(RE-2010)/2009-14, Dated: May 16, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Port Codes allotted to SEZs </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECTOR</strong> General (Systems) has accorded SEZ port codes to 58 SEZs which have been uploaded on DGFT's website. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applicants may file applications using these codes in DGFT server wherever required under the provisions of Foreign Trade Policy 2009-14 / SEZ Act and Rules. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir064.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 64/(RE-2010)/2009-14, Dated: May 16, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian Rupee - The Free Fall </font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_17may.jpg" alt="Legal Corner Icon" width="549" height="337" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VODAFONE</strong> is not the bullet that the FM has to bite; it seems to be the falling rupee, which touched its lowest yesterday and is not expected to rise today. The Government's Oil Bill will go up as imports are going to be costlier. The Rupee lost more than 20% in the last one year. Of course, exporters can smile all the way to the banks.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the shine over? </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"> - Friday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" 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">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">For mere storage of imported goods/excised goods, appellants cannot claim Central Excise registration under Rule 9 of Central Excise Rules, 2002 - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants, are manufacturers of goods falling under chapter 82 of the Central Excise Tariff Act, 1985. The appellants are registered with the Central Excise department at three different galas at three different places. These different galas are numbered as Unit I, Unit II and Unit III. Examination of the records maintained by the assessee revealed that there is no manufacturing activity undertaken at Unit no. III and the said Unit is for storing of imported raw materials which are then stock-transferred to Unit II. Since Cenvat Credit is taken in Unit III, the full amount of credit is reversed while stock-transferring the inputs to Unit II. Investigation conducted revealed that due to shortage of space in their manufacturing unit, they took Central Excise registration for Unit III but no manufacturing activity was undertaken in the said Unit III except for certain minor activities such as checking and inspecting the raw materials received in respect of the quality. </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 is given licence to manufacture denatured spirit but also manufactures arrack under compulsion for supplies to Govt, assessee in such a case loses entitlement to investment allowance u/s 32A - NO, rules HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee claimed investment allowance which was allowed by the ITO. The CIT on scrutiny found that investment allowance cannot be allowed as the petitioner manufactured rectified spirit and denatured spirit and also sold arrack after diluting the rectified spirit. Therefore, in exercise of powers u/s 263 of the Act, the CIT revised the order on 26.02.1990, aggrieved by which, the assessee filed an appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ITAT allowed the appeal holding that item 1 of Eleventh Schedule disqualifies manufacture of only potable liquor from claiming investment allowance and that the rectified spirit and denatured spirit do not come within the purview of item 1. Aggrieved by the order of the ITAT the Revenue sought a reference to the High Court.</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">Merely because appellant has also provided a driver, it does not mean that contract is not for renting of cabs - Pre-Deposit ordered: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the agreement, the appellant should supply medium buses having 46 sitting capacity of 30 numbers and mini buses having 32 sitting capacity of 20 numbers, and these buses should comply with the specifications prescribed. The tenure of agreement is for a period of 5 years from the date of permission to ply the buses on PCMT permit granted by RTO, Pune. The hired buses will be registered with RTO Pune in the name of PCMT as lessee and will operate as stage carriers within the operational area of PCMT. Each medium bus will operate 6000 km per month and each mini bus will operate 5500 km per month subject to reasonable daily operation. The PCMT shall have the right to collect the fare charges and the appellant contractor shall not have any right to claim over the cash collection for any reason, either on the fare charges or on the luggage charges collected from the passengers. The appellant has to provide along with the bus, a driver possessing valid driving licence and medically fit. </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>