TIOL-DDT 1884 · 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 1884</font><br>
21.06.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New Service Tax Regime - Positively by 1st July 2012?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government seems to be serious about implementing the new Service Tax regime by 1st July. Yesterday they issued 16 Service Tax and one Central Excise Notification. </font></p>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_025.htm" target="_blank">Notification No. 25/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Sulabh Complexes and many other services exempted:</strong> These services include:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. Services provided to the United Nations </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Health care services by a clinical establishment, an authorised medical practitioner or para-medics </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. Services by a veterinary clinic </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. Advocate to advocate </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e. Technical testing or analysis of newly developed drugs </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f. Training or coaching in recreational activities </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">g. Certain construction activity provided to Government </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">h. Construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of road, bridge, pollution control or effluent treatment plant </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">j. Vehicle parking to general public </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">k. Hut insurance </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">l. Business exhibition held outside India </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">m. Slaughtering of bovine animals </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">n. Public libraries </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">o. Public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_026.htm" target="_blank">Notification No. 26/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>75% Abatement for Construction of Complex; Abatement for 11 other services notified:</strong> Unconditional abatement of 75% for GTA is given a neat burial. Now the abatement will be available only if the GTA does not take CENVAT Credit. How to prove this? Old litigation in new bottle? 75% abatement is allowed for Construction of Complex if the value of the land is included in the amount charged. What happens if the value of the land is not included? No abatement? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_027.htm" target="_blank">Notification No. 27/2012-Service Tax; Dated June 20, 2012:</a></strong> Services provided to Foreign Diplomatic Missions Exempted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_028.htm" target="_blank">Notification No. 28/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong><em>“Place of Provision of Services” Notified – Export of Services Rules and Taxation of Services (Provided from outside and Received in India) Rules</em> superseded.</strong> Apart from various situations described in the new Rules, the Government shall have the power to notify any description of service or circumstances in which the place of provision shall be the place of effective use and enjoyment of a service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_029.htm" target="_blank">Notification No. 29/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Exemption to Property tax paid on renting of immovable property.</strong> This like many other notifications issued yesterday was already in existence – which are being re issued to bring in the new Section 66B in the Finance Act. The example given in the rescinded notification No. 24/2007-Service Tax, dated the 22 nd May, 2007 also remains intact. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_030.htm" target="_blank">Notification No. 30/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Extent of tax payable by provider and receiver for certain services notified:</strong> From 1st July there is a dual system of part payment of Service Tax by the provider and part payment by the receiver. </font></p>
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<ol>
<blockquote>
a. <font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case of services of insurance agent, GTA for transportation of goods by Road, sponsorship, arbitral tribunal, individual advocates or a firm of advocates, Certain services provided by Government or local authorities, certain types of renting of motor vehicle and services received from abroad – 100% of the tax is to be paid by the receiver and the service provider need not pay any tax. </font>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. In case of manpower supply, 25% tax is to be paid by service provider and 75% by the receiver. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. For Works Contract, it is 50 – 50 between the provider and recipient. </font></p>
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</ol>
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<blockquote><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_031.htm" target="_blank">Notification No. 31/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Exempts certain services received by exporter of Goods:</strong> A complicated exemption for Service provided to an exporter for transport of the said goods by goods transport agency in a goods carriage from any container freight station or inland container depot to the port or airport, as the case may be, from where the goods are exported; or </font></blockquote>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service provided to an exporter in relation to transport of the said goods by goods transport agency in a goods carriage directly from their place of removal, to an inland container depot, a container freight station, a port or airport, as the case may be, from where the goods are exported. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_032.htm" target="_blank">Notification No. 32/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Exempts services provided by a Technology Business Incubator (TBI) or a Science and Technology Entrepreneurship Park (STEP) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_033.htm" target="_blank">Notification No. 33/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Exempts Small service providers whose value of taxable service does not exceed Rs 10 lakhs. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This notification exempts small service providers upto taxable value of Rs 10 lakhs. As per condition No 3 of the Notification, in case of GTA service, where the service tax is paid by the receiver of the service under Section 68(2), the value of such service shall not be taken into account while computing the 10 lakhs limit. But, with effect fro 1.7.2012, in case of services like Works contract, Manpower supply and Rent a cab etc, partial reverse charge system has been introduced. How to compute exemption limit for these services? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_034.htm" target="_blank">Notification No. 34/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Rescinds 81 Service Tax notifications from 01.07.2012 </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_035.htm" target="_blank">Notification No. 35/2012-Service Tax; Dated June 20, 2012:</a> Works Contract Composition Rules, 2007 rescinded.</strong> Why a separate Notification when this can be simply added to the list of 81 Notifications rescinded. Different Notifications for different sections in TRU? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_036.htm" target="_blank">Notification No. 36/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Service Tax Rules amended: Export of services included in Service Tax Rules: </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The provision of any service provided or agreed to be provided shall be treated as export of service when,- </font></p>
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<ol>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. the provider of service is located in the taxable territory , </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. the recipient of service is located outside India, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. the service is not a service specified in the section 66D of the Act, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. the place of provision of the service is outside India, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e. the payment for such service has been received by the provider of service in convertible foreign exchange, and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f. the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 2 of clause (44) of section 65B of the Act </font></p>
</blockquote>
</ol>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rebate on Export:</strong> Where any service is exported, the Central Government may, by notification, grant rebate of service tax or duty paid on input services or inputs, as the case may be, used in providing such service and the rebate shall be allowed subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_037.htm" target="_blank">Notification No. 37/2012-Service Tax; Dated June 20, 2012:</a></strong> <strong>Point of Taxation Rules, 2011 amended – agreed to be provided added: </strong>for the words, "provided or to be provided" wherever they occur, the words "provided or agreed to be provided" shall be substituted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_038.htm" target="_blank">Notification No. 38/2012-Service Tax; Dated June 20, 2012:</a> “telecommunication service and service portion in execution of a works contract” to be treated as continuous supply of service:</strong> Notification No. No.28/2011-Service Tax, dated the 1st April, 2011, is amended </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_039.htm" target="_blank">Notification No. 39/2012-Service Tax; Dated June 20, 2012:</a> Rebate of Service Tax - conditions, limitations and procedures specified </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_040.htm" target="_blank">Notification No. 40/2012-Service Tax; Dated June 20, 2012:</a> Exemption to services received in SEZ:</strong> exempts the services on which service tax is leviable under section 66B of the said Act, received by a unit located in a Special Economic Zone or Developer of SEZ and used for the authorised operations, from the whole of the service tax, education cess and secondary and higher education cess leviable thereon. Notification No. 17/2011-Service Tax, dated the 1st March 2011, is superseded. </font></p>
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<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT Credit Rules Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APART</strong> from several change in definitions, a new Rule 5B is inserted: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Refund of CENVAT credit to service providers providing services taxed on reverse charge basis.</strong>- A provider of service providing services notified under sub-section (2) of section 68 of the Finance Act and being unable to utilise the CENVAT credit availed on inputs and input services for payment of service tax on such output services, shall be allowed refund of such unutilised CENVAT credit subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/exnt12_28.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 28/2012-CE NT; Dated June 20, 2012 </font></strong></a></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"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt21june.jpg" alt="Legal Corner Icon" width="575" height="233" hspace="5" border="0" align="center"></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><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"><font color="#663399"><strong>Central Excise</strong></font></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Fabrication of Nitrogen/Oxygen plant at premises of customer using goods manufactured and cleared from factory on payment of duty and bought out items received at site - <em>prima facie</em> applicants have made out a strong case in their favour in view of provisions of Notification no. 67/95-CE, as notification provides exemption to capital goods manufactured in factory of production and are used in manufacture of excisable goods - Pre-deposit waived: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicants manufacture excisable goods viz. Air separation column/unit; Expansion engine; Liquid oxygen pump and Liquid nitrogen pump and clear the same on payment of appropriate duty. Show cause notices were issued to applicant on the ground that the applicants are not paying appropriate duty in respect of the Nitrogen/Oxygen Plants. The adjudicating authority confirmed the demand on the ground that fabrication of Nitrogen/Oxygen plant amounts to manufacture and is liable to duty since the fact was that consideration for setting of the above mentioned plants were received by the applicant. </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, for determining nature of income arising from sale of shares, Purpose Test is critical, and hence where purpose is to earn profits in future, such income is taxable as business income - YES: ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is an Investment Company, earning income from dividend, interest, and capital gain - filed its ROI declaring income under the head capital gain after claiming the benefit of Indexation - During the course of assessment proceedings the AO observed that the assessee had purchased shares of a Company(M/s MABL) which was accumulating losses from last several years - the AO further observed that the share capital of that Company was meager around Rs 800/- only a few years ago - the AO further observed that the MD of the assessee Company was managing the affairs of that Company in the capacity of the Director - the AO thereafter observed that assessee had borrowed huge funds for acquiring shares of MABL - in view of this factual backdrop the AO formed an opinion that the income arising from the sale of the shares was taxable as business income and not capital gain </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Burden lies on appellant to establish that provisions of Chapter II of PC Rules requiring them to affix MRP are not applicable to packaged commodity imported by them - matter remanded to original authority for deciding matter afresh: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant imported a consignment of Hot Melt Adhesive DT 3984 A 20 kg, a pressure sensitive adhesive. A Bill of Entry classifying the product under Chapter Heading 35 of the Customs Tariff was filed by the appellant for the clearance of the said goods packed in 7000 cartons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A view was taken by the department that the appellant is required to pay CVD on the imported goods based on MRP as the goods were imported in 20 kg packing without any MRP declared on the imported package. The department determined the MRP of the imported goods as CIF price x 2.5. The appellant filed an appeal against the assessed Bill of Entry before the Commissioner of Customs (Appeals) but the same was rejected. </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="left"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong></font></p>
<p align="left"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </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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