TIOL-DDT 1883 · 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 1883</font><br>
20.06.2012<br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Service Tax on CAG - Clarifies CBEC </font></strong></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">PLEASE see </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15145" target="_blank">DDT 1871 – 04.06.2012</a></strong> -<font color="#006600"><strong> CAG Evades Service Tax? Show Cause Notice to be issued? </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15211" target="_blank">DDT 1878 – 13.06.2012</a></strong> - <font color="#006600"><strong>Evasion of Service Tax by CAG - No Notice - Yet…</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15164" target="_blank"><strong>Levy
of Service Tax: Is CAG really a Chartered Accountant? - </strong></a><strong>Cob(Web)
- 295, June 07, 2012</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has examined the issue: The Board clarification says, <em>“<strong>Reportedly </strong>some field formations are <strong>inclined</strong> to take a view that such ‘audit fee' collected by the CAG is leviable to service tax under the authority of the inclusive portion of the definition of “practicing chartered accountant” read with the relevant definition of the taxable service”</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Reportedly inclined?</em></strong> - <em>who reported – where?</em> Is the Board not aware of a Chief Commissioner dashing off a letter to all Chief Commissioners that the CAG is liable to pay Service Tax? And how does the Board get reports that some officers are inclined – how do we make them straight? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway Board clarifies that: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAG is not a Chartered Accountant</strong>: The services of CAG are not services as are rendered by a chartered accountant even though both may be engaged in the sphere of the auditing. The scope of work of the CAG goes far beyond that of a statutory company auditor and is often carried out by persons who may not even be professional chartered accountants. These audits are done in terms of section 18 of the CAG (Duties, Powers and Conditions of Service) Act, 1971, which is entirely different from the powers vested in a chartered accountant under the Chartered Accountant Act, 1949. CAG is a constitutional authority and by no stretch of imagination be covered by the meaning of expression “concern” appearing in the definition of “practicing chartered accountant”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Not Covered under BSS:</strong> The audit activity is not an outsourced function but is carried out in statutory fulfilment of duties. Thus, the services by CAG would also not be covered by the service head “Business Support Service”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Chief Commissioners and Commissioners to communicate the Board Circular to the field and <strong>Service Tax assesses</strong>. Should this be communicated to all Service Tax assesses? How are they bothered whether CAG is taxed or not? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway, the storm in the teacup has ended – the CAG is out of reach for the Service Tax officers. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2012/sercir159.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 159/10/2012-ST; Dated June 19, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Negative Services ….. To be postponed? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> new Service Tax regime where almost everything is likely to be taxed is likely to be postponed to October instead of July. Neither the department nor the assessee is ready for the new regime and with just ten days to go for the 1st July deadline, Board has not yet come out with the final guidelines or instructions; it is most likely that the negative list concept will take a few more months to become a reality. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund of CENVAT Credit - Procedure, Safeguards…….. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has superseded Notification No. 5/2006 – Central Excise (N.T), dated the 14th March, 2006 by a new notification to prescribe the procedure, safeguards, conditions and limitations, for refund of <em>CENVAT Credit</em> under Rule 5 of the CENVAT Credit Rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) the manufacturer or provider of output service shall submit not more than one claim of refund under this rule for every quarter: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>provided </em>that a person exporting goods and service simultaneously, may submit two refund claims one in respect of goods exported and other in respect of the export of services every quarter. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) in this notification quarter means a period of three consecutive months with the first quarter beginning from 1st April of every year, second quarter from 1st July, third quarter from 1st October and fourth quarter from 1st January of every year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) the value of goods cleared for export during the quarter shall be the sum total of all the goods cleared by the exporter for exports during the quarter as per the monthly or quarterly return filed by the claimant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) the total value of goods cleared during the quarter shall be the sum total of value of all goods cleared by the claimant during the quarter as per the monthly or quarterly return filed by the claimant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) in respect of the services, for the purpose of computation of total turnover, the value of export services shall be determined in accordance with clause (D) of sub-rule (1) of rule 5 of the said rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) for the value of all services other than export during the quarter, the time of provision of services shall be determined as per the provisions of the Point of Taxation Rules, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) the amount of refund claimed shall not be more than the amount lying in balance at the end of quarter for which refund claim is being made or at the time of filing of the refund claim, whichever is less. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(h) the amount that is claimed as refund under rule 5 of the said rules shall be debited by the claimant from his CENVAT credit account at the time of making the claim. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) In case the amount of refund sanctioned is less than the amount of refund claimed, then the claimant may take back the credit of the difference between the amount claimed and amount sanctioned. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure for filing the refund claim : </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) The manufacturer or provider of output service, as the case may be, shall submit an application in Form A annexed to the notification, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, in whose jurisdiction,- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the factory from which the final products are exported is situated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the registered premises of the provider of service from which output services are exported is situated. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) The application in the Form A along with the documents specified therein and enclosures relating to the quarter for which refund is being claimed shall be filed by the claimant, before the expiry of the period specified in section 11B of the Central Excise Act, 1944 (1 of 1944). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) The application for the refund should be signed by- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the individual or the proprietor in the case of proprietary firm or karta in case of Hindu Undivided Family as the case may be; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) any partner in case of a partnership firm; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) a person authorized by the Board of Directors in case of a limited company; </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) in other cases, a person authorized to sign the refund application by the entity. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) The applicant shall file the refund claim along with the copies of bank realization certificate in respect of the services exported. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) The refund claim shall be accompanied by a certificate in Annexure A-I, duly signed by the auditor (statutory or any other) certifying the correctness of refund claimed in respect of export of services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) The Assistant Commissioner or Deputy Commissioner to whom the application for refund is made may call for any document in case he has reason to believe that information provided in the refund claim is incorrect or insufficient and further enquiry needs to be caused before the sanction of refund claim. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) At the time of sanctioning the refund claim the Assistant Commissioner or Deputy Commissioner shall satisfy himself or herself in respect of the correctness of the claim and the fact that goods cleared for export or services provided have actually been exported and allow the claim of exporter of goods or services in full or part as the case may be. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/exnt12_27.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 27 /2012-CE (N.T.), Dated: June 18, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI Judge Arrested</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HE</strong> was a judge in a CBI Court trying accused persons for giving and taking bribes. He is now himself being tried for taking a bribe to grant bail to G Janardana Reddy, a former Karnataka Minister. The judge Pattabhi Rama Rao is now in jail. He is said to have taken a bribe of Rs. 5 Crores for granting bail. And it seems he took the help of a rowdy-sheeter in arranging the bribe. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAT Quashes DGP Appointment</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AROUND</strong> the time, the Pakistan Supreme Court unseated the Prime Minister (for not taking action against the President in a corruption case), the Hyderabad Bench of the Central Administrative Tribunal quashed the appointment of Dinesh Reddy as the DG of Police of the State. And the State Government suspended a senior DGP level officer for absconding and this officer is charged with forging the signature of an MP! And the Governor of Tamil Nadu is summoned by a court in Hyderabad in a land scam case! Interesting Times Indeed! </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"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
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<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"> – Thursday'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">Central Excise</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Technical professional products not for retail sale but sold only to Salon for their exclusive internal in-salon use - ‘salon' whether Industry - whether affixing MRP and discharging duty u/s 4A of the CEA, 1944 proper – Matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of manufacture and sale of various cosmetics products such as hair dye, shampoo, colourants, skin care etc. falling under chapter 33 of the Central Excise Tariff Act, 1985. These goods are assessed to duty by the assessee in terms of section 4A of the Central Excise Act, 1944. </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" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether PAN is mandatory for making investments even if income is
below taxable limit - NO, rules Karnataka HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the Bench are - Whether PAN is
mandatory even if income is below taxable limit and Whether Sec 206AA,
which makes PAN mandatory for investment in savings instruments, overrides
Sec 139A, and thus is discriminatory. 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">Whether air freight can be considered as an ‘input service' - An interpretation that merely because as per terms of export contract, goods have to be delivered at customer's premises abroad, place of removal is extended to a place outside India is absurd and will have unintended ramifications: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant, a manufacturer, availed CENVAT Credit of Rs.1,49,184/- towards service tax paid on courier services and outward air freight. The department was of the view that there is no nexus between the services availed and the manufacture of the goods and hence they were not entitled for the CENVAT credit. On pointing out, the appellant reversed a credit of Rs.18,105/- towards courier services and contested the eligibility to credit of service tax paid on air freight. </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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