TIOL-DDT 193 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 193</font><br> 02 09 2005<br> Friday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Ignited minds – CAG sets fire to oil companies – Reliance, to start with</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday DDT had mentioned about the Rs 9500 Crores Show Cause Notice to Reliance. The issue was non payment of AED by Reliance for export of petroleum products. Though Show Cause Notice has been issued to Reliance, it may be interesting to recall that Board had in Circular No. 807/4/2005-CX., dated 10-2-2005 clarified that <b>AED or SAED levied on Motor Spirit and High Speed Diesel under respective sections of Finance Acts are not required to be paid for goods exported under bond.</b> Some extracts from the Board Circular are worth a look.<br> <br> • Board’s attention has been drawn to objections raised by C & AG over non-payment/non-collection of such duties on the Motor Spirit and High Speed Diesel exported under Bond<br> <br> • Board has also observed that there is non-uniformity of practice in so far as levy and collection of said duties is concerned.<br> <br> • In some cases, show cause notices have been raised demanding these duties for a period ranging from 1998 till date<br> <br> • <b>Board has also observed that it is the policy of the Government to grant relief from element of domestic taxes on goods which are exported.</b> Therefore, the notification governing conditions and procedures for export of excisable goods without payment of duty issued under rule 19 shall include the aforementioned duties, namely AED and SAED levied as duty of excise.<br> <br> • <b>it is clarified that AED or SAED levied on Motor Spirit and High Speed Diesel under respective sections of Finance Acts are not required to be paid for goods exported under bond.</b><br> <br> • The reply to objections raised by C & AG on the issue may be given in the light of the legal position given above<br> <br> • Pending show cause notices except, in cases where they were issued on receipt of objections raised by C & AG, may be finalized accordingly<br> <br> • Protective demands raised consequent to objections raised by C & AG may be transferred to Call Book as per the existing instructions<br> <br> <b>The Board is very clear that no duty is payable on exports. Then why the Show Cause Notice to Reliance? There is another Board circular which stipulates issue of Show Cause Notice whenever Audit chooses to set fire. And so the Show Cause Notice to Reliance is one such smoke bomb. The press, including the respected pink ones, has gone to town with the news of the Show Cause Notice to Reliance. The fact is that other Oil companies must have also got similar Show Cause Notices or will get soon. The Rajkot Commissioner is said to have told reporters that he is aware of the Board Circular. “Then why the Show Cause Notice?”, they asked him. “Ask the Chief Commissioner” , was reportedly the answer of the Commissioner. Why can’t the Board tell the CAG that it is the policy of the Government not to export taxes? </b><br> <br> <b>It is time the CAG should be asked to undertake a study on the costs to the nation caused by silly objections raised by his auditors.<br> <br> For a detailed analysis of the issue, please see our top story, <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2495">“AAG OF THE CAG”</a> today.</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Vishesh Krishi Upaj Yojana – EOUs eligible – DGFT clarifies</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has clarified that Export Oriented Units are eligible for benefits under Vishesh Krishi Upaj Yojana for physical exports made by them. It was further clarified that EOUs shall file their applications for claiming benefits under Vishesh Krishi Upaj Yojana with the jurisdictional Regional Licensing Authority concerned as per territorial jurisdiction. <br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir025.htm"><strong>DGFT CIRCULAR NO. 25 (RE-2005)/2004-2009 Date: 31 August 2005</strong></a></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Segregation activities – manufacture for some time</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> DGFT makes changes in Appendices to the Handbook of Procedure:<br> <br> <b>HIGH GRADE IRON ORE:</b> Proposals for export of High Grade Iron Ore i.e. 64% Fe and above, except Iron ore of Goa Origin and Redi origin are presently canalized through MMTC and its exports would be subject to approval of the BOA. Now the approval of the BOA is changed to annual allocation by BOA.<br> <br> <b>Segregation Activities:</b> From 1.4.2002, segregation activities are not covered under the definition of manufacture. However for units which started prior to this date, this activity will be considered as manufacture, but no DTA sale will be allowed.<br> <br> <b>Caution letter: </b>Units failing to achieve positive NFE during the course of 5 years will be issued a cautionary letter.<br> <br> <b>DTA permission to converted EOUs.</b> No advance DTA sale would be admissible to a DTA unit converted into an EOU except in respect of new production stream as a result of change of technology or on account of its expanded capacity for export<br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2005/dgft05pn045.htm"><strong>PUBLIC NOTICE NO. 45 (RE-2005) /2004-2009, Dated: August 31, 2005</strong></a></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#006633"><b>Jurisdiction of Development Commissioners of SEZ – Kutch added to Kandla</b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> It was just a week ago that DGFT had notified the jurisdiction of Development Commissioners of SEZs. And there is an amendment. This amendment gives the jurisdiction of the District of Kutch in Gujarat to the DC, KASEZ. The amended jurisdiction is like this:-<br> <br> 1. Kutch District of Gujarat<br> <br> 2. Units situated in Kandla and Surat SEZs<br> <br> 3. Approved EOU/SEZs located in Gujarat<br> <br> But is the district of Kutch of Gujarat not in Gujarat and not covered by Sl. 3 above? <br> <br> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2005/dgft05pn046.htm">PUBLIC NOTICE NO. 46 (RE-2005) /2004-2009, Dated: August 31, 2005</a></strong></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Marble, slabs, blocks, tiles – policy changes</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Tiles, cubes, powder Marble blocks/tiles Marble monumental block will be allowed free import subject the condition that cif value is US $ 2700 & above per cubic metre..<br> <br> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2005/dgft05not023.htm">NOTIFICATION NO. 23/2005, Dated: August 31, 2005</a></strong></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>No sale of marble in DTA under concessional rate</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Certain items like motor cars, alcoholic liquors, tea (except instant tea), pepper & pepper products are not allowed to be sold by EOUs in DTA at concessional duty. Now marble is added to the list.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2005/dgft05not024.htm">NOTIFICATION NO. 24/2005, Dated: August 31, 2005</a></strong></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>EOUs – Investment Criteria</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the FTP, only projects having a minimum investment of Rs.1 crore in plant and machinery shall be considered for establishment as EOUs. This shall, however, not apply to existing units in EHTP/STP/BTP, Handicrafts/Agriculture/ Floriculture/Aquaculture/Animal Husbandry/ Information Technology, Services, Brass Hardware and Handmade jewellery sectors. Now the BOA is given the power to fix a lower investment criteria. <br> <br> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2005/dgft05not025.htm">NOTIFICATION NO. 25/2005, Dated: August 31, 2005</a></strong></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>No GST in the near future – FM </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>FMSPEAK</b><br> <br> • No nationwide Goods and Services Tax in near future to substitute Excise, Service Tax and VAT.<br> <br> • “second look" at Fringe Benefit Tax rules<br> <br> • I am aware that cars are classified as luxurious item like liquor and tobacco. We have to revisit the rate of taxation to keep pace with the developments in the auto industry<br> <br> • Government would consider phasing out of old buses and trucks while revisiting the tax structure. Most of them are pathetic. We need to upgrade our commercial vehicles. We must put an age limit. You must tax them heavily so that they cannot be used.<br> <br> • <b>Our trucks are like wine -- they become better as they grow older.</b><br> <br> The FM was speaking to representatives of Auto Industry.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <font color="#FF6666"><b>Until Monday with more DDT <br> Have a nice Weekend. <br> Mail your comments to</b></font> <a href="vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>