TIOL-DDT 1959 · 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 1959 </font><br> 10.10.2012<br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Additional declaration in Aayat Niryat forms</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the Handbook of Procedures Vol.1 (Appendices and Aayat Niryat Forms) 2009-2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications in ANF3C and ANF4G will have additional declarations as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I/We hereby declare that Freight, Insurance and Commission values as mentioned in the application are based on actual transaction values. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ For the purpose of calculating entitlement, commission amount has been included as per actual value or 12.5% of net FOB value realised whichever is less. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications in ANF4D, ANF4F, ANF4H andANF5B will have these declarations: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I/We hereby declare that Freight, Insurance and Commission values as mentioned in the application are based on actual transaction values. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ For the purpose of calculating entitlement, commission amount has been excluded. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn021.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No.21 (RE-2012)/2009-14 Dated: October 09, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Policy for allocation of quota for import of Rough Marble Blocks for year 2012-13</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORT</strong> Policy for allocation of quota for import of Rough Marble Blocks by Indian companies investing abroad in marble mining has been notified with an annual quota of 1 lakh MT. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not020.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No.20 (RE-2012)/2009-14 Dated: October 09, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Tyres, Tubes and Flaps - Just In Time Extension </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> Anti Dumping Duty was imposed on import of bias tyres, tubes and flaps originating in, or exported from, People's Republic of China (China PR) and Thailand, by Notification No. 106/2006-Customs, dated the 9th October, 2006. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Definitive Anti Dumping Duty on these goods had been imposed by Notification No. 88/2007-Customs dated the 24th July, 2007. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Designated Authority in its mid-term review findings, <em>had recommended continuation of anti-dumping duty at new rates</em> on imports of new/unused pneumatic non radial bias tyres, tubes and flaps with or without tubes and/or flap of rubber, having nominal rim dia code above 16" used in buses and lorries or trucks originating in or exported from China PR and Thailand. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Government had in supersession of Notification No. 88/2007-Customs, imposed new Anti Dumping Duty on these products from 18.11.2010 by Notification No. 117/2010-Cus: Dated November 18, 2010, which was to be valid till 8th October 2011, that is till the expiry of the original Notification No.106/2006-Customs, dated the 9th October, 2006. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 8th October 2011, they were sleeping and forgot all about this notification. So, this notification was not valid after 8th October 2011. They woke up after five months and amended this notification to stipulate that it is valid till 7th October 2012. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_017.htm" target="_blank">(Notification No. 17/2012-Cus., (AD), Dated: March 30, 2012)</a> </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This expired on 7th October 2012, but this time around, they woke up just in time and re-imposed the anti dumping duty with effect from 8th October 2012. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_047.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.47/2012 - Customs (ADD), Dated: October 08, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange Rate for South African Rand Changed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has announced the new exchange rates for imports with effect from 10th October 2012. For export, there is no change.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_093.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.93/2012 - Customs (NT), Dated: October 09, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Salary - TDS - CBDT Issues Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT </strong>has issued a Circular explaining the details of income tax on salary and the related statutory provisions.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Failure to deposit TDS:</strong> The Circular warns that... <em>If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time as under: </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>He shall be liable to action in accordance with the provisions of section 201. Section 201(1A) lays down that such person shall be liable to pay simple interest </em></font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) at 1% for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted and </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Such interest, if chargeable, is mandatory in nature and has to be paid before furnishing of quarterly statement of TDS for respective quarter. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 271C lays down that if any person fails to deduct whole or any part of tax at source or fails to pay the whole or part of tax deducted, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted or paid by him. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time, the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along with fine. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Furnishing of Certificate for Tax Deducted (Section 203):</strong> Section 203 requires the DDO to furnish to the employee a certificate in Form 16 detailing the amount of TDS and certain other particulars. The Act stipulates that the Form 16 should be furnished to the employee by 31st May after the end of the financial year in which the income was paid and tax deducted. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Compulsory Requirement to furnish PAN by employee</em> (Section 206AA):</strong> Section 206AA makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor, the deductor has been made responsible to make TDS at higher rates: </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2012/it12cir08.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 8/2012 [F.NO. 275/192/2012-IT(B)] Dated: October 05, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shome Committee Report on Retrospective Amendments - Government Calls for Comments </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Parthasarathi Shome Committee has submitted its draft report on <strong>Retrospective Amendments Relating to Indirect Transfer</strong>. The Committee has recommended that the provisions introduced in 2012 Finance Act should be applied prospectively. This would better reflect the principles of equity and probity in the formulation and implementation of commonly recognized taxation principles. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case the Government opts for retrospective taxation of indirect transfer, the Committee recommends: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) No person should be treated as an assessee in default under section 201 of the Act read with section 9(1)(i) of the Act as amended by the Finance Act, 2012, or as a representative assessee of a non-resident, in respect of a transaction of transfer of shares of a foreign company having underlying assets in India as this would amount to the imposition of a burden of impossibility of performance. This would imply that Government could apply the provisions only to the taxpayer who earned capital gains from indirect transfer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) In all cases where demand of tax is raised on account of the retrospective amendment relating to indirect transfer u/s 9(1)(i) of the Act, no interest under section 234A, 234B, 234C and 201(1A) of the Act should be charged in respect of that demand so that there is no undue hardship caused to the taxpayer. Moreover, in such cases, no penalty should be levied in respect of the income brought to tax on application of retrospective amendments under section 271(1)(c) (for concealment of income) and 271C (for failure to deduct tax at source) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Comments and suggestions on the draft report can be sent by 19th October 2012 at the email address (<a href="mailto:jstpl2@nic.in"><strong>jstpl2@nic.in</strong></a>) or by post at the following address with "comments on Expert Committee Report on Retrospective Amendments" written on the envelope. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Joint Secretary, (Tax Policy & Legislation-II), CBDT, Department of Revenue, Room No.147-C, 1st Floor, North Block, New Delhi -110001 </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/Draft_Report_on_Retrospective_Amendments_Relating_to_Indirect_Transfer.pdf"><strong>The Draft Report </strong></a></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government and CAG Not Adversaries - FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the AGs yesterday, the Finance Minister,Mr. Chidambaram said, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In recent months issues relating to probity, ethics and integrity have occupied centre stage. That is necessary and correct. I would strongly endorse and support the increased awareness of such issues and urge everyone to join in an informed and healthy debate on such issues. There is a consensus that corruption impedes economic development, undermines stability and erodes trust in public institutions. The C&AG has played a key role in addressing issues of good governance and the Government is obliged to take necessary action to address gaps in governance. I visualise the role of the C&AG and the responsibility of Government as complementary to each other. I also believe that both the C&AG and the Government have the common objectives of infusing greater transparency, improving financial management and ensuring better outcomes. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately, however, some dissonance has crept into the public discourse and, for reasons, which are inexplicable, the C&AG and the Government have been cast as adversarial to each other. Perhaps, this is because of the nature of the functions of the Government and of the C&AG. Policy making, sometimes, is through trial and error. Decisions are taken often without full information and in an environment of uncertainty. Audit is a post-decisional review. I believe that institutions and individuals are always in a learning process. The recent opinion of the Supreme Court has brought about a great degree of clarity. It is my intention and desire, as the Minister in-charge of Finance, to work with the C&AG and his colleagues to erase the impression of adversaries and restore trust and confidence in all institutions of Government. </font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Governance Issues and Red Tape Weaken India's Growth - IMF </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<em>THE recovery continues, but it has weakened. In advanced economies, growth is now too low to make a substantial dent in unemployment. And in major emerging market economies, growth that had been strong earlier has also decreased</em>," says the preface to the <strong>World Economic Report</strong> of the International Monetary Fund, released yesterday. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Report states about India:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In India, growth weakened more than expected in the first half of 2012, an outcome of stalled investment caused by governance issues and red tape, and a deterioration in business sentiment against the backdrop of a rising current account deficit and the recent rupee depreciation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Growth in India is projected to average 5 to 6 percent in 2012-13, more than 1 percentage point lower than in the April 2012 WEO. The downgrade reflects both an expectation that current drags on business sentiment and investment will persist and a weaker external environment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In India, where inflation is still high, monetary policy should stay on hold until a sustained decrease in inflation materializes. </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"> - Thursday'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">Customs - Import of 6+ years old tyres - Hazardous Waste - Goods ordered to be re-exported: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the United Nations Environmental Programme <em>vis-a-vis</em> Basel Convention regarding Pneumatic tyres, the lifetime of an original tyre casing must not exceed seven years. All the imported used tyres in these cases are 6+ years old and as per the reports available on record, these tyres cannot be made use of until and unless they are re-treaded and even after re-treading, they cannot be made use of for quite a long time. Therefore, naturally, these old tyres will shortly be a hazardous waste in our country. The respondents/importers are directed to send back the imports to the countries of origin at their own cost and expenditure immediately. The appellants are directed to take all steps necessary in this regard. </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">Income tax - Whether application of Sec 69B remains dormant, unless AO is able to discharge initial burden of assessee having 'expended' an amount which is not fully recorded in his books of account - YES: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee, Mr. Dinesh Jain has residential and business premises in which a search operation u/s 132 was conducted. The materials seized during the search revealed investment in various properties by the assessee. There was a commercial property in Gurgaon purchased for Rs.17,55,000 which was fetching a rent of Rs 7.02 lakhs per annum. The AO was of the view that a property, which was fetching such a substantial rental income, could not have been acquired for Rs 17.55 lakhs, which showed disproportionally high in comparison with the amount invested. He therefore took the view that the assessee must have invested more than what was disclosed in the sale document which attracted the provisions of Section 69B. The assessee denied investing anything over and above the amount declared in the document. The AO however calculated the "net annualised maintainable rent" of the property at Rs.6,63,000 and multiplying the same by 12.5, arrived at the value of the property at Rs.82,87,500. </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">CENVAT - Removal of used capital goods - Interpretation by Commissioner (A) that provisions of payment of 2.5% of the CENVAT credit for each quarter is brought into statute w.e.f. 13.11.07 and can be considered only for period from 13.11.07 to 18.03.09 is totally incorrect: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REMOVAL </strong>of used cenvatted capital goods had always been a contentious issue under the CENVAT Credit Rules. Coupled with the fact that there was no rule in the CCR catering to such removals during the period 01.03.2003 to 12.11.2007, things were really bad for a manufacturer notwithstanding the decision in <em>Madura Coats Pvt. Ltd.</em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2005/2005-TIOL-891-CESTAT-BANG.htm"><strong><font size="1">(2005-TIOL-891-CESTAT-Bang)</font></strong></a>. Alongside came the Larger Bench decision in<em> Modernova Plastyles Pvt. Ltd. </em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1771-CESTAT-MUM-LB.htm"><strong><font size="1">(2008-TIOL-1771-CESTAT-Mum-LB)</font></strong> </a>, which distinguished every available judgment and came to a conclusion that the term "as such" also includes "used capital goods" and hence removal of used capital goods is to be made after reversal of CENVAT credit. This made matters worse for a manufacturer and the Revenue officers jumped in glee. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow 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> </body> </html>