TIOL-DDT 1934 · 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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 1934</font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>04.09.2012 <br> Tuesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Paying taxes is a mark of civilization - PC </strong></font></p> <p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE </strong>Minister Chidambaram yesterday addressed a conference of Chief Commissioners and DGs of Income Tax. Later he addressed a Press Meet. </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/chidu.jpeg" alt="Chidambaram" width="400" height="280" hspace="5" border="0" align="center"></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pebbles of wisdom from the FM at the Media Meet: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">We will ensure there is a stable tax regime, there are stable tax laws and everybody adopts a non-adversarial approach to tax collection. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">I have asked Chief Commissioners to adopt non-adversarial approach to tax collection. I have told the CCITs to repeat this message to all Commissioners, all Assistant Commissioners and Deputy Commissioners and ITOs </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Paying taxes is a mark of civilization. If I pay more taxes, I should be more happy and more proud. I am making more money and I am paying more taxes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">It is our intention to achieve the Rs. 5,70,257 crore direct tax collection target for the current fiscal. We will be able to achieve the target. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">The collection is growing at 10.5 per cent against the asking rate of 15 per cent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">The average effective corporate tax rate is 24 per cent. Many industries are below this average. We will have to see whether they are tax compliant and whether within the present law are they paying taxes that they should be paying. Even if the average goes up by two per cent, back of the envelope calculations show that Rs 30,000 crore will come. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Tax department will be friendly, will be helpful, will be interactive, will help you pay your taxes...nobody needs to harbour any unnecessary fear of the Tax Department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chidambaram also said that there is need to improve tax to GDP ratio to 12 per cent. Tax to GDP ratio has come down to 10.1 per cent from 11.9 per cent in 2007-08. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Civilised taxpayers! but what about tax collectors and tax spenders? Don't they need to be civilised? </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty-free Cigarettes - Only 50 when you enter Australia</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AUSTRALIA</strong> has reduced the number of duty-free cigarettes that an adult entering Australia can take with him/her. It was earlier 250 Cigarettes or 250 grams of cigars or tobacco products. With effect from 1st September 2012, this has been reduced to 50 cigarettes or 50 grams of cigars or tobacco products. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This reduction in entitlement of duty-free cigarettes by itself is no big news but what is worrying is that utter chaos will prevail in airports with the Customs checking every passenger for that hidden cigarette. Airports have warned inbound passengers can expect long delays in customs halls around the country as officials attempt to enforce the new cigarette limit. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bank Cheques - Standardisation and Enhancement of Security Features - CTS 2010 standards </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> had advised banks to issue only 'CTS-2010' standard cheques in a time bound action plan not later than September 30, 2012. However, RBI has observed that it is still not followed by many banks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has again advised the banks to follow the procedure to ensure the time-bound migration to CTS-2010 standard cheque formats. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Arrange to issue only multi-city/payable at par CTS-2010 standard cheques not later than September 30, 2012. A confirmation stating that necessary arrangements have been put in place for issue of CTS-2010 standard cheques across the country to be submitted by September 14, 2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Arrange to withdraw the non-CTS-2010 Standard cheques in circulation before December 31, 2012 by creating awareness among customers through SMS alerts, letters, display boards in branches/ATMs, log-on message in internet banking, notification on the web-site etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Banks holding post-dated EMI cheques (received either on their own behalf or on behalf of their NBFC clients) may arrange to ensure the replacement of non-CTS-2010 Standard cheques with CTS-2010 standard cheques before December 31, 2012. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI/2012-13/190, Dated: September 03 2012 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is "CTS-2010 Standard" for Cheque Forms? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PAPER-BASED </strong>cheque clearing continues to be one of the popular modes of initiating payment transactions in the country. Several measures have been initiated by Reserve Bank of India to ensure that this retail payment product functions in a safe and efficient manner. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided to prescribe certain benchmarks towards achieving standardisation of cheques issued by banks across the country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The benchmark prescriptions shall be known as "CTS-2010 standard, specifications”, some of which are as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mandatory features</strong>: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Paper </strong> should be image friendly and have protection against alterations by having chemical sensitivity to acids, alkalis, bleaches and solvents giving a visible result after a fraudulent attack. CTS-2010 Standard paper should not glow under Ultra-Violet (UV) light i.e., it should be UV dull. This shall ensure that the feel of cheques is uniform across banks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Watermark</strong>: All cheques shall carry a standardised watermark, with the words “CTS-INDIA” which can be seen when held against any light source. This would make it difficult for any fraudster to photocopy or print an instrument since this paper would be available only to security printers handling cheque printing. The watermark should be oval in shape and diameter could be 2.6 to 3.0 cms. Each cheque must hold at least one full watermark. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VOID pantograph </strong>Pantograph with hidden / embedded “COPY” or “VOID” feature shall be included in the cheques. This feature should not be visible on the scanned image at the resolution specified in CTS but should be clearly visible in photocopies and scanned colour images as resolution used in such cases would be above the prescribed CTS standards. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bank's logo printed with invisible ink </strong> (ultra-violet ink): Bank's logo shall be printed in ultra-violet (UV) ink. The logo will be captured by / visible in UV-enabled scanners / lamps. It will establish genuineness of a cheque. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Prohibiting alterations / corrections on cheques</strong>: No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee's name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Printing of account field:</strong> All cheques should, as far as possible, be issued with the account number field pre-printed. This should be considered must for current account holders and corporate customers.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Member Sreela Ghosh Quits</strong></font></p> <p align="justify"><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/sreela.png" alt="Sreela Ghosh" width="113" height="186" hspace="5" border="0" align="left"></font>THE </strong>CBEC Member Sreela Ghosh quit her job yesterday (with effect from today) on voluntary retirement after serving the department for over 36 years. It is the dream, hope and ultimate goal of every IRS officer to one day adorn the Board as its Member. Chief Commissioners who are virtually princes in the field, would happily throw away all the perks and protocol to be part of the madness in North Block, as a Member and if possible as Chairman of the Board. It is in the December of one's career that one can hope to be a Member of the Board and usually a Member has an average of about 18 months tenure. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is perhaps the first time that a Member of the Board has taken voluntary retirement. Why should a person who has reached the zenith of her career quit five months before her due date of superannuation? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> tried to catch up with Ms. Ghosh to find out, but she was in no mood to talk, except for saying, it was for personal reasons. She said it was a long innings and she had no regrets. She said it was a great department and wished the department greater days ahead. </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"> - Wednesday's cases</font></strong></font></strong></font></p> <p align="justify"><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/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></font><font color="#663399">Customs </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It is open for the importer to claim exemption under any one of categories 1,2 and 3 consequent to setting up of hospital - Rejection of such request by DGHS is set aside: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION </strong>No.64/1988-Cus dated 01.03.1988 exempts equipment, apparatus and appliances etc required for use in any hospital subject to approval by the Government of India in the Ministry of Health and Family Welfare, or by the Directorate General of Health Services to the Government of India. The Notification has four categories of Hospitals specified. The fourth category is “ Any such hospital which is in the process of being established and when it starts functioning, it should be relatable to a hospital specified in categories 1,2 or 3”. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when non-resident partner of JV does not transfer right of technical knowhow, even partly, for manufacture of products, royalty payment as per agreement is to be construed as revenue expenditure - YES: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the HC are - Whether when the non-resident partner of the JV does not transfer the right of technical knowhow, even partly, for manufacture of products, royalty payment as per agreement is to be construed as revenue expenditure and whether any disallowance can be made with respect to brand promotion expenses. And the verdict goes in favour of the assessee. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Adjustment of excess payment of service tax on GTA service - Imposing another tax burden of equal amount along with interest and heavy penalties under three different Sections of law cannot be approved of: CESTAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> assessee is a State Government undertaking, manufacturing newsprint etc. They pay service tax on Goods Transport Agency Service as a recipient of service. According to the Service Tax Rules, 1994, the service tax liability for the month of March should be paid by 31 st March. As a matter of abundant caution, the assessee paid service tax in excess of their estimated liability for the months of March 2005 and 2006 and later, in the month of April next, adjusted the excess payments. Revenue took an objection to such adjustment and issued Show Cause Notice for recovery with interest and proposal to impose penalties. The Adjudicating Authority decided the issue in favour of the assessee. The Commissioner, however, passed a revision order confirming the tax, interest and penalty. On appeal, the assessee got relief from the Tribunal. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENVAT Credit - Input services utilized at depots storing goods of many factories of appellant company - Invoices issued as Input Service distributors and credit availed by Borivali plant - whether credit is admissible for services availed in respect of other plants - Tribunal as a judicial body must follow principles of consistency when it decides the cases - since in appellant's own case for earlier period benefit allowed by Bench, pre-deposit waived and stay granted: CESTAT by Majority </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOUR </strong>show-cause notices were issued to the appellants wherein it was alleged that the appellant had availed CENVAT credit on the basis of invoices issued from their various depots/offices as input service distributors for the services received by the depots in respect of various services namely, loading/unloading, telephone, outward transport, handling charges, clearing & forwarding remuneration, etc. for the goods received at their depots situated at various locations in India; that since the depots were storing and selling the final products not only manufactured at Borivali plant but also at their other plants the services used in relation to the final products manufactured at other than Borivali plants cannot be termed as ‘input service' for the Borivali plant. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columnsTomorrow for the judgements </strong></font></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 align="justify"><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>