TIOL-DDT 1895 · 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 1895</font><br> 06.07.2012<br> FRIDAY</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Arbitrariness in Tax Matters - PM/FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Prime Minister/Finance Minister in an interview to Hindustan Times, said, "<em>We want the world to know that India treats everyone fairly and reasonably and there will be no arbitrariness in tax matters.</em>" Does it ring like Vodafone? He said the India Growth Story is intact. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the short run, he wants to bring complete clarity on all tax matters. Mr. Prime Minister, you are a professor of economics - please read the new Service Tax provisions and check for yourself how much clarity you could find in them. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Verification of Duty Credit Scrips - CBEC Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> was a provision under the FTP that <em>"before registration, authorities shall verify genuineness of duty credit scrips, from RA concerned, until EDI system of message exchange is put in place". This is no retained in the new annual supplement to the FTP. In Circular No. 5/2010- Cus dated 16.03.2010, Board had instructed that, "As regards the duty credit scrips issued under Chapter 3 of FTP, the verification of genuineness of scrips in terms of Para 3.11.3 of the HBP v.1 shall be done before allowing registration of such scrips . Further, the Commissioner may cause random verification of the shipping bills based on which the said duty credit scrip has been issued to ascertain the genuineness of such shipping bills. ………………….. This procedure will be reviewed once online transmission of the duty credit scrips issued under Chapter 3 of FTP is operationalized". </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since, EDI system of message exchange has not been put in place and online transmission of duly validated duty credit scrips is not operational, Board has decided that even while the words and figures <em>"in terms of Para 3.11.3 of the HBP v.1"</em> shall stand deleted from first sentence of para 2(e) of Circular No.5/2010-Customs, the verification of genuineness of scrips shall continue to be done as before prior to registration of such scrips. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 17/2012-Cus., Dated: July 5, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Served From India Scheme - Import of Vehicles </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA</strong> (4) of Circular No.38/2010-Customs, dated 27th September, 2010, reads as: "<em>Served From India Scheme (SFIS) As per existing Notification No. 91/2009-Cus. Import of vehicles is not allowed under the Served From India Scheme (SFIS), even if such vehicles are freely importable under the Foreign Trade Policy. However, after the announcement of Annual supplement to the Foreign Trade Policy, vehicles which are in the nature of professional equipment such as Airfield Fire Fighting and Rescue Vehicles (AFFRVs), Heavy Duty Modular Trailer Combination, Reach Stackers etc. for use by the service provider in his regular service business have been allowed to be imported against SFIS scrips. However, personal vehicles such as motor cars/ Sports Utility Vehicles( SUVs) / Multi Utility Vehicles (MUVs) etc. are not permitted to be imported against SFIS scrips. Notification no. 90/2010-Cus dated 01.09.2010 refers in this regard."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has decided that the vehicles which are in the nature of professional equipment, illustratively mentioned in para (4) of the said Circular, may also include Ambulance, Sewage Disposal Truck, Refuse Disposal Vehicle, that are pre-designed structurally and pre-fitted with relevant devices and mechanisms that make for their use for the intended purposes and enable a reasonable conclusion that they cannot be put to generalized or personal use; and Dumpers designed for off-highway use (as described in the Explanatory Notes to Chapter 87 of the Harmonized System of Nomenclature-HSN), for use by the service provider in his regular service business. It is reiterated that personal vehicles such as motor cars/ Sports Utility Vehicles (SUVs)/ Multi Utility Vehicles (MUVs), etc. are not permitted to be imported against SFIS scrips. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_018.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 18/2012-Cus., Dated: July 5, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange Rates Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified exchange rates for imported goods and export goods. Earlier there used to be some certainty in these notifications - they were issued effective from the 1st of the month. Now, the Government is issuing these notifications without a specific date. Importers and exporters are to keep a close watch to see whether there was any notification issued on a particular date. Can't there be a little more clarity on this? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_056.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 56/2012-Cus NT., Dated: July 5, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Has Indeed Issued Master Circular on Imports and Exports </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> got this query from a Netizen: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Every year RBI issues Master Circulars on 1st July, being Sunday they have issued it on 2nd July 2012. A very important circular "Master Circular on Import of Goods and Services" has not been issued till today. "Master Circular on Import of Goods and Services" issued on 1st July 2011 expires on 1st July 2012 (Mentioned in the circular).</font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Was it left out by mistake or are we expecting some drastic changes? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sir, the RBI had indeed issued the Master Circulars and in fact, TIOL had already carried it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some excerpts from <strong>Master Circular No. 13/2012-13 on Import of Goods and Services: </strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">B.6.1. Import of foreign exchange into India</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>A person may - </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) send into India without limit foreign exchange in any form other than currency notes, bank notes and travellers cheques; </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) bring into India from any place outside India, without limit foreign exchange (other than unissued notes), which shall be subject to the condition that such person makes, on arrival in India, a declaration to the Custom Authorities at the Airport in the Currency Declaration Form (CDF) annexed to these Regulations; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in by such person at any one time does not exceed USD10,000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash portion) alone brought in by such person at any one time does not exceed USD 5,000 (US Dollars five thousand) or its equivalent. </font></em></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">B.6.2. Import of Indian currency and currency notes </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) Any person resident in India who had gone out of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank notes up to an amount not exceeding Rs.7,500/- per person. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) A person may bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank notes other than notes of denominations of above Rs.100 in either case. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/mastercircular/2012/13IGSM020712.pdf"><strong>Master Circular on Import of Goods and Services - No. 13/2012-13 dated July 02, 2012 </strong></a></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/mastercircular/2012/14ME010212FS.pdf">Master Circular on Export of Goods and Services - No. 14/2012-13 dated July 02, 2012 </a></font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Cartoon</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt06_2012.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></font></strong><br> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Monday's cases</font></strong></strong></font></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">Very fact that matter had been referred to Larger Bench would show that two views were possible - suppression stands attributed to appellant on ground that they have drafted agreement in a complicated manner with a view to evade service tax - against adjudged dues of more than three crores, pre-deposit ordered of Rs.25 lakhs: CESTAT by Majority </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GUJARAT</strong> Maritime Board is a provider of port service. The appellant entered into an agreement with M/s Gujarat Ambuja Cement for construction of two captive jetties. The cost of construction was to be initially borne by M/s Gujarat Ambuja Cement and expenditure incurred for construction of said 2 jetties was to be adjusted against the wharfage charges by way of rebate/ concession till the capital cost is recovered. Such rebate/concession in the wharfage charges for the period 1.4.2004 to 31.3.2007 amounted to Rs.24,71,61,887/-. In addition, the appellant also collected lease rent for water front charges and leave way facility compensation amounting to Rs.1.25 crore during the same period. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the ground that the "waterfront royalty and way leave facility compensation" are includible in the value of taxable “port” service, a demand of service tax of Rs.2.62 crores was confirmed along with imposition of an equal penalty. </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 assessee can escape from rigour of penalty by merely disowning his representative alleged of tampering with TDS certificates for reducing assessee's taxable receipt - NO: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> AO found that there was considerable discrepancy in the return of Income as filed by the assessee and income as disclosed as business income from the activity of Civil Contract, whereas the payments received by the assessee as indicated by the client for whose benefit the assessee had executed Civil works and who had deducted tax at source indicated a much larger quantum of receipts. The AO realized that for the purpose of filing of the return of income the assessee had tampered with the TDS certificate which had been issued by the person deducting tax at source and given to the assessee. While producing the certificate with the return the figures relating to the actual payment had been tampered and reduced as indicated above. The AO was of the opinion that the provisions of Section 271(1)(c) were attracted and therefore, proceeded to levy penalty. The CIT(A) and Tribunal affirmed the penalty. </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">Whether credit of duty paid on inputs 'end shields' and 'stator housings' is available to assessee as these inputs were exclusively used in manufacture of exempted final products particularly when assessee has paid 8%/10% of price of exempted final products - Matter remanded: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is manufacturer of motors and generators falling under Heading No.8501 and availing CENVAT Credit in respect of inputs. Windmill Generators manufactured by them are exempted in terms of Notification No.6/2000-CE dated 1.3.2000 being a non-conventional energy device. The assessee, <strong>at the time of clearance of the goods, paid an amount equivalent to 8%/10% of the total price of the exempted final product</strong> as envisaged under Rule 57AD(1) of the Central Excise Rules,1944 read with Rule 6(3)(b) of the CENVAT Credit Rules. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend </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>