TIOL-DDT 1965 · 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 1965</font><br>
18.10.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">E-payment of Customs Duty; Why not Interest? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_033.htm"><strong>Circular No. 33/2011-Cus dated 29.07.2011</strong></a>, CBEC had informed that <em>in order to reduce the transaction cost of the importers and expedite the time taken for customs clearance, the Board has decided to make e-payment of duty mandatory for the importers paying an amount of Rupees one lakh or more per transaction. Additionally, for Accredited Clients under the Customs Accredited Client Programme irrespective of any amount of duty, the Customs duty will have to be paid through E- payment mode only. The date from which the E- payment will be made mandatory will be notified separately. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Act 2012 amended Section 47 (2) of the Customs Act to stipulate that, <em>"Provided that the Central Government may, by notification in the Official Gazette, specify the class or classes of importers who shall pay such duty electronically”.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Circular No. 24/2012 dated 05 09 2012 [<strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15812" target="_blank">DDT 1936 dated 06 09 2012</a></strong>], Board had informed that it had made e-payment of duty mandatory for importers registered under Accredited Clients Programme and importers paying customs duty of one lakh rupees or more per Bill of Entry with effect from 17.09.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 83/2012-Cus(NT) dated 17.09.2012 stipulates that the following classes of importers shall pay customs duty electronically, namely:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Importers registered under Accredited Clients Programme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Importers paying customs duty of one lakh rupees or more per bill of entry. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now a concerned Netizen writes to us: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The e-payment of customs duty exceeding Rs.1 lac is fine and is commendable. But the interest on customs duty payable on the bonded goods beyond 90 days free period is required to be paid by manual challan. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the system provides for e-payment of interest, it would be beneficial to both importer and Customs. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kindly look into this aspect of e-payment system and upgrade the software to include interest column, which can be filled by the importer/payee, before completing the transaction of e-payment . </font></em></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Board/ICEGATE respond?</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Error while Uploading Dealer return Rectified and Modified ER-8 with 2% duty Enabled - ACES Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO</strong> days ago <strong>DDT</strong> had reported that registered dealers were not able to file their returns as they were getting an error message that uploaded XML structure is not valid; and that ER-8 returns were also not accepted as ACES did not recognise 2% duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We received a clarification from an AD in the office of the ADG, Systems, Chennai: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>1. Regarding the error encountered while uploading dealer returns in offline mode ("Uploaded XML structure is not valid, please verify ..."), the same had been taken up on priority by ACES Service Desk on 13/10 and was resolved on 15/10. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Modified ER-8 enabling entry of 2% duty had already been made available in both online & offline versions. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thank You, Systems,; This is how the Government should work. You have solved the problem and have also informed the public. Great work indeed! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Reforming Tax System to make it Simpler, Broader and more Stable </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>TAX</strong> reforms can play a decisive role in supporting growth, by removing distortions and enhancing transparency and predictability of tax systems while increasing the efficiency of tax administration and boosting revenues. The central government, in co-operation with state governments, seeks to implement important tax reforms, including the introduction of a Goods and Services Tax (GST). The current indirect taxation system is complex, involves cascading taxes that bias production decisions, and hinder inter-state trade. A national GST, coupled with a state GST, would rationalise indirect taxes while preserving states' financial autonomy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To keep the overall rate low, the base should remain as broad as possible. Ideally, a single tax rate should apply in each state and where differential rates apply, they should be kept as low as possible and confined to a limited range of products. A major effort is now required to finalise implementation details. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The central government is also seeking to reform direct taxes and negotiations are continuing on a revised Direct Tax Code. The proposed changes would increase the tax-free threshold, releasing many low-income taxpayers from the tax net, thereby reducing administration costs. They would also reduce the corporate tax rate and broaden the corporate tax base. A further proposal is to reduce the tax on savings, including by making contributions to pension schemes free of taxation. While this measure would help promote savings, it is important that the government adopts a balanced approach and avoids excessively generous tax treatment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reforms are also underway to streamline a number of tax expenditures. The government also needs to ensure a certain level of stability in the area of international taxation. Recent efforts by the government seeking to create an atmosphere of certainty and predictability in this area are very welcome and this will definitely boost investor sentiment and attract foreign direct investment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India needs to address the issues concerning taxation of foreign companies too in a manner that balances its needs for expansion of the revenue base and with the confidence of the investors. The volume of overseas investment into India has grown over the last few years. While this has boosted employment, and helped develop infrastructure, it has also led to a growing number of tax disputes. In this context, the recent remarks of the government on the need to perceive the tax administration in a non-adversarial manner are welcome. India has tried ways and means to develop an effective dispute resolution mechanism and these steps need to be consolidated and developed” - from the OECD's <strong>“b</strong><strong>etter Policies” - India - SUSTAINING HIGH AND INCLUSIVE GROWTH</strong>: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">OECD Recommends: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>Strengthen fiscal frameworks</strong> through legislative and institutional reforms.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>Improve spending efficiency</strong>, especially on subsidies, by improving targeting and delivery mechanisms. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>Proceed with the implementation of the GST</strong>, minimising exemptions to keep the base as broad as possible while also aiming for a single rate within each state. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <strong>Implement a revised Direct Tax Code</strong>, which streamlines collection and reduces the overall burden of direct taxes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <strong>Push reforms in the area of international taxation</strong> in order to boost investor sentiment and provide a stable and certain tax environment for businesses. </font></p>
</blockquote>
<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><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">Maintenance and repair of public roads and Government buildings - in view of retrospective amendment made by Finance Act, 2012 by way of insertion of sections 97 & 98 in FA, 1994, strong <em>prima facie </em>case for waiver of ST demand of Rs.73 lakhs - CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>major portion of the demand is in respect of maintenance and repair of public roads and Government buildings, which are exempted from Service Tax with retrospective effect under the Finance Act, 2012. Therefore, the applicant has made out a strong prima facie case for waiver of Service Tax approximately Rs.73 lakhs. In respect of the demand of commercial construction, the construction is of administrative block of Municipal Corporation of Chandrapur and out of which certain area is used for commercial purpose and in respect of other demands such as Survey and Map Making services, site formation and clearance, excavation and earth moving and demolition services, the applicant had not made out case for complete waiver of pre-deposit. </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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee deals in real estate and undertakes transactions of sale and purchase of agricultural land for profits, such profits are to be assessed as business profits or are exempted as capital gains - taxable as business profits: ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether when the assessee deals in real estate and undertakes transactions of sale and purchase of agricultural land for profits, such profits are to be assessed as business profits or are exempted as capital gains - Whether when agricultural land is not a capital asset within the meaning of Sec 2(14)(iii), the profit from sale of such land cannot be claimed as capital gains.And the verdict goes against the assessee. </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 denied on ground that duty was paid by consignor under cover of Supplementary invoices after detection of evasion by department suppression invoked in SCN - against similarly placed consignees located in and around Delhi, CCE, Delhi-III has dropped proceedings - pre-deposit waived and stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> amount in excess of Rs.29 lakhs has been confirmed by the adjudicating authority and upheld by the first appellate authority on the ground that the appellant is not eligible to avail the <em>CENVAT Credit</em> of duty paid by M/s Hero Honda Motors Ltd, Gurgaon on supplementary Invoices Dt. 11.6.2008 on the ground that the duty is paid by M/s Hero Honda Motors Ltd after the said violation was detected by the department and extended period of limitation has been invoked by alleging suppression, misstatement etc. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements</font></strong></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><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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