TIOL-DDT 1904 · 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 1904 </font><br>
19.07.2012 <br>
Thursday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Corrigendum Budget </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER </strong>this year's Budget, it appears a record number of Corrigenda have been issued and the counting has not yet stopped. The latest Corrigendum has been issued to the Service Tax Notification No <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_042.htm" target="_blank">42/2012</a></strong> ST dated 29.06.2012. The Notification intended to exempt the commission paid to the overseas commission agents by the exporters of goods. The upper ceiling of the exemption was to be at a value of 10% on the FOB value of the export goods. The Notifications exempted: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">from so much of the service tax leviable thereon under section 66B of the said Act,<font color="#FF0000"><strong> as is in excess of the service tax </strong></font>calculated on a value up to ten per cent of the free on board value of export goods for which the said specified service has been used, subject to the conditions specified in column (3) of the said Table, namely:- </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the exemption was only on the value in excess of 10% of the FOB. What they wanted to exempt became chargeable and what they wanted to tax was exempted! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore a Corrigendum dated 11.7.2012 has been issued omitting the words "in excess of the service tax". After giving effect to the Corrigendum, the Notification reads: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">from so much of the service tax leviable thereon under section 66B of the said Act, calculated on a value up to ten per cent of the free on board value of export goods for which the said specified service has been used, subject to the conditions specified in column (3) of the said Table, namely:- </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/corrigendum_12_042.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Corrigendum Dated 11.07.2012 to Notification No. 42/2012-Service Tax </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - EPC Contracts for State Irrigation Projects - Taxable under WCS? AP HC Grants Stay</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a landmark decision, the Bangalore CESTAT had held that the EPC contracts for State Irrigation Projects were taxable under<strong> "works contract" defined under Section 65(105)(zzzza) of the Finance Act, 1994 inasmuch as (i) transfer of property in goods was involved in the transaction and VAT was paid on such goods, (ii) the contracts were for the purpose of carrying out irrigation projects of the Government through turnkey/EPC mode, and (iii) none of the contracts was in the excluded category of works contracts.</strong> <strong><font size="1">(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-613-CESTAT-BANG.htm" target="_blank">2012-TIOL-613-CESTAT-BANG</a>)</font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Andhra Pradesh High Court has granted interim stay in the appeal filed by one of the parties. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2012/2012-TIOL-520-HC-AP-ST.htm" target="_blank">2012-TIOL-520-HC-AP-ST</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chairman Releases Q1 Results </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Chairman of the CBEC has said that during the first quarter of April - June 2012, indirect tax collections have gone up by 13.8%. The collections during this quarter stood at Rs. 1,07,959 crores and the collections for the corresponding period last year was Rs 94,849 crores. The increase is mainly attributable to the increase in tax rate in this year's Budget. The department however, could not meet the targeted growth rate of 27%. If we factor into the mountains of refund claims pending (Source: Pending claims displayed on CBEC website), the absolute growth may be a little lower. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC launches Interactive Customs Tariff </font></strong></p>
<p align="justify"><img src="http://www.taxindiaonline.com/RC2/image/stories/goel_ddt.jpg" alt="" width="300" height="249" hspace="5" border="1" align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC Chairman also launched the <strong>Interactive Customs Tariff </strong>to help the importers in calculation of actual effective duty applicable by taking into account the various exemption notifications. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It is not possible to show the exact effective rate wherein the exemption is conditional such as end-use or quality or other characteristics as defined in the notification. The user is expected to choose the sl.no and notification no. for calculation of effective rate of duty . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In case of goods which attract both specific rate and advalorem rates (together or whichever is higher) while the rates are displayed the duty calculation is restricted to advalorem rates only. Similarly, the RSP abatements are displayed but not calculated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Preferential duties can be calculated only when user provides the relevant notification number. Some of the FTA related notifications are currently covered under the Basic Customs Duty option. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Only alerts are provided for antidumping duties. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you know the tariff heading and the exemption notification applicable to you from the hundreds of notifications floating around, you can get the duty details in this programme. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The programme can be accessed at <a href="http://www.icegate.gov.in/Webappl/" target="_blank"><strong>http://www.icegate.gov. in/Webappl/</strong> </a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Huge Service Tax Evasion by Life Insurance Companies?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGCEI</strong>,
Hqrs has started investigation against major life insurance companies which
indicates huge evasion of service tax by these companies. It is learnt that
several teams of officers of DGCEI, Hqrs are camping at Mumbai and Bangalore
and digging the financial records of these companies. It has been revealed
that these companies have made massive payouts to their corporate agents
but not reflected the same in their records. The record of corporate agents
who received these payments booked these receipts as commission received,
on which service tax is payable by the insurance companies under reverse
charge. It is also learnt that Birla Sun Life Insurance has since paid around
Rs 13 crores on this account. It is also learnt that officers are also investigating
the recovery of service tax made by these companies from their agents which
is contrary to service tax provisions. The likely evasion in the matter is
computed to several hundred crores.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA's Fresh Mandate on Filing of Balance Sheet and Profit and Loss Account in Extensible Business reporting Language (XBRL) Mode </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Ministry of Corporate Affairs has decided to further mandate the following select class of companies to file their Balance Sheet and Profit & Loss Account in XBRL mode for the financial year commencing on or after 1.4.2011 : </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) all companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) all companies having paid up capital of Rupees five crore and above; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) all companies having turnover of Rupees one hundred crore and above; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)all companies who were required to file their financial statements for FY 2010-11, using XBRL mode. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, banking companies, insurance companies, power companies and Non-Banking Financial Companies (NBFCs) are exempted from XBRL filing till further orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional Fee Exemption: All companies referred to in the 1st Para, will be allowed to file their financial statements in XBRL mode without any additional fee/ penalty up to 15th November, 2012 or within 30 days from the date of their AGM, whichever is later. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that, Vide Companies (Filing of documents and forms in Extensible Business Reporting Language) Rules, 2011 notified vide GSR No. 748E dated 5.10.2011, select class of companies were required to file their Balance Sheet and Profit & Loss Account and other documents as required u/s 220 of Companies Act, 1956 with the Registrar of Companies for the financial year ending on or after 31st March, 2011. </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 align="justify"><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">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imported switchgear marketed by appellant after putting their labels - prima facie view is that putting of labels on product would amount to manufacture, as labels not only have name of appellant but also their logo and Section 2(f)(iii) does not say that labels affixed in process of labelling or re-labelling must also have MRP mentioned on them - Pre-deposit ordered of Rs.3 Crores: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are engaged in the manufacture of switchgear products and part and accessories thereof. Besides this, they also import switchgears, which were cleared by them on payment of duties of customs and thereafter were being sold by them after putting their labels indicating their name and logo. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE manufactured goods were being cleared by the appellant directly to industrial users and also to the dealers by classifying the same under heading 8538 90 and on payment of duty on their transaction value u/s 4 of the CEA, 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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee engaged in telecom consultancy, earns some interest on inter-corporate deposits, it can be said that it was carrying money lending activity, and deduction for irrecoverable bad debt is allowable - NO: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee provides consultancy services in electronic and telecommunications. In the return filed for the AY 2001-02, the assessee had claimed a total amount of Rs. 6.09 crore as advances paid by the assessee company, but which had become not recoverable and therefore written off in the books of accounts during the accounting period corresponding to this AY. </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">To err is human and hence mistake on part of captain in not declaring hardened cement, 20 year old dozer caterpillars and out of order motor bike in IGM can be on account mis-understanding of law and is procedural in nature without any intention to evade duty - Law should not take cognizance of trifles - Penalty imposed on Master of Vessel set aside and appeal allowed: CESTAT by majority </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> penalty Rs. 50,000/- was imposed on the master of the vessel on account of non-declaration of 700 MT of cement, two Dozer Caterpillar and one motor bike in the IGM. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Captain is before the CESTAT. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Friday for the judgements</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p>
<p><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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