TIOL-DDT 1892 · 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 1892 </font><br>
03.07.2012 <br>
TUESDAY </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Rail freight - Didi Exemption Continues </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Service Tax on transport of goods has always been a jinxed tax. The tax was imposed on transport of goods by Rail in 2009 budget. The Railways really never took the tax seriously. DDT spoke to several Rail Officials and they considered the tax to be a joke. In 2009,<strong> DDT</strong> asked a senior Railway officer whether they were ready to collect Service Tax on goods transport. He told us that the Finance Ministry has no right to levy Service Tax on Rail freight and he had no instructions to collect the tax. He said his Board does not recognise this tax. We tried to explain to him that this was an Act passed by Parliament, but he was not impressed. He was sure that it requires approval by his Board and as of now his Board was not too keen to approve the Finance Act. He was aghast that somebody is trying to tax the Railways! When told that Railways are already paying Service Tax on catering, he said it was paid by IRCTC and not by Indian Railways. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From 2009 till June 2012, the tax was being exempted on a quarterly basis and the tax would have come into force from 1st July 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has exempted it up to 30 September 2012: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>1. Service of transportation of passengers, with or without accompanied belongings, by railways in --</em></font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) first class; or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) an air conditioned coach </font></em></p>
</blockquote>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Services by way of transportation of goods by railways. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently, Didi's presence stills looms large in the Rail Bhavan and the Government cannot take any serious risk now, just before the Presidential elections. But why these quarterly extensions - why can't they simply say that these services are exempted until further orders? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_043.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 43/2012 - ST, Dated: July 02, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Was there a Service Tax on Rail Transport for a Day? Or is it a derailed Notification? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>above Notification No. 43/2012 states that the exemption is <font color="#FF0000">with effect from the date of publication of this notification in the Official Gazette</font>. Now the notification is dated 02.07.2012 and it can be safely assumed that it is published in the Gazette on the same day. At least it could not have been published before it was issued. So, the exemption is from 02.07.2012. Does it mean that rail transport and First Class Rail travel were taxable on 1st July 2012? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Government issue a corrigendum, amendment or a Section 11C Notification? </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Negative List to Result in Negative Revenue? A Joke in Budget Making? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the RECEIPTS shown in the 2012 Budget, the Service Tax revenue for 2011-12 is Rs 95,000 crores. The tax rate has been increased to 12%. Ignoring any other change, the estimated revenue will be a function of growth in economy and the inflation. Assuming both to be 6% (Underestimated), the revenue for 2012-13 should be 95000*1.06*1.06=1,06,742 crores. To this, now add the 20% increase in tax rate. The amount comes to <strong>106742*1.2=1,28,090 </strong>crores. But the estimate for 2012-13 is only Rs <strong>1,24,000</strong> crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does this mean the Government expects a revenue loss from expansion of services through the negative list? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, they would get much more than the highly understated tax revenue, which will be, trumpeted as great administrative efficiency!! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income
Tax Dept Gets 1.64 crore Electronic Returns - E-filing Mandatory</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CBDT in a Press Release informs that the Department received a record number of 1.64 crore income tax returns electronically in the year 2011-12. E-filing is an easy, fast and secure method of filing of income tax return. The electronically filed returns are processed at the Centralized Processing Centre, Bengaluru. The processing for e-filed return is faster and taxpayers get their refunds, if due, quickly. The Department also provides some value added services like tracking of refunds, viewing tax credit status (Form 26AS), e-mail and SMS alerts regarding status of processing and refunds to taxpayers who e-file their returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">E-Filing has been made compulsory for Assessment Year 2012-13 onwards for </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, <strong>exceeds ten lakh rupees;</strong> and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- an individual or a Hindu Undivided Family (HUF), being a resident, having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, digital signature will not be mandatory for these taxpayers and they can also transmit the data in the return electronically and thereafter submit the verification of the return in Form ITR-V. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibition on import of milk and milk products from China </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> prohibition on import of milk and milk products (including chocolates and chocolate products and candies/ confectionary/ food preparations with milk or milk solids as an ingredient) from China was imposed vide Notification No. 46(RE-2008)/2004-2009 dated 24th September, 2008, Notification No. 67(RE-2008)/2004-2009 dated 1st December, 2008 and Notification No. 16/2004-2009 dated 3.1.2011 and extended from time to time. The latest extension was notified on 26.12.2011 by Notification No. 91 (RE-2010)/2009-2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This prohibition is now extended till 23.6.2013 or until further orders, whichever is earlier. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not004.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 04/(RE - 2012)/2009-2014, Dated: July 02, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Conditions for export of Carpets, Handicraft items and Silk items</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORT</strong> of Handmade Woolen Carpets, Handicraft items and Silk items etc. shall not be permitted on the basis of Documents against Acceptance (D/A) except when covered by (a) Guarantee from Bank or ECGC or (b) made to own Subsidiaries etc. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not005.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 05/(RE - 2012)/2009-2014, Dated: July 02, 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"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt03july12.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></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">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">If the provisions of statute are not ambiguous, notings in files of Government are not relevant, as statute has to interpreted in terms of the language used therein - interpretation of Drawback Schedule has to be made in terms of language used therein and not based on interpretation given in files of Ministry on appellant's representation: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant, a manufacturer of automobile parts, had filed 137 Drawback Shipping Bills during the period March, 2003 to May, 2003 for export of goods described as,- (1) alloy steel forging, machined, manufactured through forging process; and (2) non-alloy steel forging, machined and manufactured through forging process, claiming drawback on these goods under sub-serial Nos. 73.30 and 73.29 of the drawback schedule at the rates specified under claim for all-industry rate of drawback under Section 75 of the Customs Act, 1962. </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 unconditional grant received from non-resident holding company for protecting image and goodwill is taxable as business receipt - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether voluntary and unconditional grant received by the assessee for protecting image and goodwill of the holding company is taxable as business receipt - Whether the claim of depreciation is mandatory in nature; Whether software development product expenses is allowable as revenue expenditure u/s. 37(1); Whether the assessee is entitled to prepare a separate profit and loss account for the purpose of section 115JA of the Act, so far as it is in accordance with provisions of part II & Part II of Schedule VI of the Companies Act 1956 and Whether transfer made to debenture redemption reserve can be said to be a provision for ascertained liability and hence could not be added back while computing the book profit u/s 115JA. And the verdict goes against the Revenue. </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">Premises on which rent has been paid is not registered with Central Excise department - CENVAT Credit of Service Tax paid on rental charges not available - Pre-deposit ordered: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FROM </strong>the record, it is found that the premises on which the rent has been paid is not registered with Central Excise Department. In view of the fact that the premises on which the rent and Service Tax has been paid is not registered with the Revenue's authority as a manufacturing unit, therefore, there is merit in the contention of the Revenue that the applicant had wrongly availed the credit on Service Tax paid on rental charges. </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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