TIOL-DDT 1882 · 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 1882</font><br>
19.06.2012<br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Introduction of electronic Bank Realization Certificate (e-BRC) system</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ELECTRONIC</strong> issuance of BRCs have been initiated through Public Notice No. 2 dated 5.6.2012 (Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15169" target="_blank">DDT 1874 07.06.2012</a></strong>) which obviates submission of physical copy of BRC to claim benefits of the FTP Schemes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, DGFT has issued guidelines for Banks, Exporters and RAs. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For Banks:- </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Uploading of BRC data by banks can be done at any time and it should be electronically transmitted on a daily basis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Electronic issuance of BRC has started with effect from 05.06.2012. Physical submission of BRC would continue concurrently for one month from 05.06.2012. BRCs which have been issued manually after 01.04.2012 shall be converted in the digital (XML) format by the banks and uploaded on DGFT server. This exercise may be completed by 31.07.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Banks shall upload the rupees equivalent of the realised foreign exchange, based on the monthly exchange rate notified by Central Board of Excise and Customs (CBEC). In case the realisation is in a denomination other than the notified currency, the rates given by RBI shall be adopted. In case exchange rate is not available from RBI then banks will do currency conversion as per their present existing practice. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For exporters:-</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e-BRC details available in the DGFT server will not contain the details of amount of commission paid. This amount has to be provided by the exporter at the time of filing online application. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For RAs:-</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The net foreign exchange earnings (in foreign currency) reflected in e-BRC, transmitted by banks would indicate FOB value (as per valuation made by custom authorities on the shipping bill). While granting Chapter 3 benefits, RA shall consider the net foreign exchange earnings. In case of shortfall in foreign exchange realization with respect to the shipping bill FOB value, pro rata distribution of realized foreign exchange against each export item will be made by the system itself. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2012/dgft12cir0011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 01 (RE- 2012) /2009-14; Dated June 18, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Drawback Schedule Amended for Tariff Item 1302 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the tariff item 1302 in the drawback schedule. The amended version is: </font></p>
<table border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"1302 </font></strong></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vegetable saps and extracts; pectic Substances, pectinates and pectates ; Agar-agar and other mucilages and Thickeners, whether or not modified, Derived from vegetable products </font></strong></p></td>
<td valign="top"> </td>
<td valign="top"> </td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">130201 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Guar Gum in any form </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
</tr>
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<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">130299 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1%" <br>
</font></p></td>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier it was 1% for all the entries under tariff item 1302. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_051.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 51/2012-Cus., (N.T.), Dated: June 15, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Babus get two more years to fly to J&K on LTC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per DOPT OM No. 31011/2/2003 dated 18th June 2010, Central Government employees were allowed to travel by air to Jammu and Kashmir on surrender of one block of Home Town LTC. This facility was to come to an end on 17th June 2012. Now, the Government has extended this for a further period of two years with effect from 18.06.2012 </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/dopt_ltc.pdf" target="_blank">DOPT OM No. 31011/2/2003-Estt.A-IV., Dated: June 15, 2012 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Fitch Rates India Negative - Pranab says, 'it's all old data' </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FITCH</strong> Ratings has revised India's Outlook to Negative from Stable. Its Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) have been affirmed at 'BBB-' and Short-Term Foreign Currency at 'F3'. India's Country Ceiling is also affirmed at 'BBB-'.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister and President - in - waiting, Pranab Mukherjee says the ratings are based on older data. Fitch however had some good words about India: "strong economic and credit fundamentals," "diversified economy," "high domestic savings," very low "net external debt," "high foreign exchange reserves," and that "underlying drivers of the last decade of rapid economic growth remain in place - a fast growing pool of educated workers and an innovative private services sector." Pranab Da welcomes these observations, but the negative rating is because of older data. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fitch also adds,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India faces an awkward combination of slowing growth and still-elevated inflation. Real GDP grew just 6.5% yoy in FY 2011-12 (end-March 2012), down from an 8.4% rise in FY 2010-11. India also faces structural challenges surrounding its investment climate in the form of <strong>corruption</strong> and inadequate economic reforms. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's public finances are a key rating weakness compared with other 'BBB'-rated sovereigns, which constrains scope for fiscal policy flexibility. Fitch estimated general government debt stood at 66% of GDP at end-FY 2011-12, against the 'BBB' median of 39%. Moreover, India's government revenue intake is low at 19.4% of GDP. The central government fiscal deficit climbed to 5.8% of GDP in FY 2011-12, against a target of 4.6%, largely reflecting an overshoot in subsidy spending. The government has repeatedly delayed reforms to the tax and subsidy systems. The confluence of weaker economic growth and a large subsidy bill means India will likely miss its 5.1% of GDP deficit target for FY 2012-13; Fitch expects it to be 5.6%-5.9% of GDP. General elections due in early 2014 could see politically driven pressure to loosen fiscal policy, which could further weaken India's public finances relative to peers. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon</font></strong></p>
<p align="center"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt19june.jpg" alt="Legal Corner Icon" width="485" height="197" hspace="5" border="0" align="center"></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"> - Wednesday'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">Service Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Benefit of Notfn. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2003/sernot03_12.htm">12/2003-ST </a> - Commercial training and Coaching Institutes - when language of Notification does not restrict exemption only to ‘standard text books' sold, same cannot be whittled down by Board Circular <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2003/sercircir59.htm">59/08/2003 </a>-ST - Demand of Rs.2.82 Crores set aside and appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Revenue has not disputed the fact that the study materials were purchased by the appellants from M/s. Bulls Eye. Therefore, there is nothing in the Notification No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2003/sernot03_12.htm"><strong>12/2003-ST</strong> </a>which would help Revenue in their arguments. The Circular of CBEC quoted by the DR states that such exemption will be applicable only if material sold is ‘standard textbooks'. The question as to what is a ‘standard textbook' can lead to disputes. Since the expression is not used in the notification and the fact that the books sold are of another entity namely "Bulls Eye', no reason to deny the benefits of the Notification No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2003/sernot03_12.htm"><strong>12/2003-ST</strong></a>. </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"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee earns income in form of refund by encashing bogus TDS Certificates, Income Tax provisions do not distinguish between legally or illegally earned income, and thus such income is also taxable - YES: Madras HC </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a tax practitioner and was en-cashing bogus TDS certificates by using fraudulent means. Initially, the CBI conducted a search on the premises of the assessee. Revenue later joined the search and found that assessee was engaged in preparing bogus TDS certificates and en-cashing the same from the Income Tax Department. The statement of the assessee was also recorded as the time of the search and it was admitted by the assessee that he was en-cashing the bogus TDS certificates. In this backdrop the AO on the basis of seized materials framed assessment of both the years and held that the income earned by the assessee by using illegal means was taxable. The CIT(A) after considering the profession of the assessee reduced the taxable amount and held that such income was taxable under the residuary head. The ITAT accepting plea of the assessee held that the real owner of the money was Income Tax department and not the assessee and it was a case of stolen property. The Tribunal allowed the appeal of the assessee and held that the receipt of TDS even though by fraudulent means was not taxable under the provisions of Income Tax. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Plastic casing of Audio Cassette manufactured with brand name ‘Universal' - since casing is not traded in market under brand name 'Universal' but is further used in manufacture of pre-recorded audio cassettes, benefit of SSI Notfn. 175/86-CE cannot be denied - Revenue appeal dismissed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>M/s. UNIVERSAL</strong> (India) Pvt. Ltd., owner of 'Universal' brand name had placed an order to M/s. Sagarika Accoustronics Pvt. Ltd. for the supply of 1,00,000 numbers of 'Universal' brand pre-recorded audio cassettes. M/s. Sagrika Accoustronics Pvt. Ltd. placed an order for the manufacture plastic casing of the Audio Cassette, with the respondents. The casing is not traded in the market under the brand name 'Universal' and is further used in the manufacture of pre-recorded audio cassettes. In these circumstances, no infirmity in the impugned order. </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>
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