TIOL-DDT 2536 · the untouched capture
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<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><s><strong><font size="2"><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=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s><font color="#663399" size="3">TIOL-DDT 2536 </font><br>
11 02 2015 <br>
Wednesday</font></strong></p>
<p align="center"><font size="3"><strong><em><font color="#006600" face="Georgia, Times New Roman, Times, serif">TRANSFER PRICING AND CUSTOMS VALUATION - 2015 - ICC releases Policy Statement </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTERNATIONAL</strong> businesses face difficulties regarding the valuation of goods due to diverging customs and tax rules regulating transactions between related parties. ICC (International Chamber of Commerce) calls for more alignment and puts forward concrete proposals to secure harmonized tax and customs valuation of transactions between related parties in an international context. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ICC Recommends:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Recognition by the customs administration that businesses which establish prices between related parties in accordance with the arm's length principle (as per Article 9 OECD Model Tax Convention) have generally demonstrated that the relationship of the parties has not influenced the price paid or payable under the transaction value basis of appraisement and consequently that the prices establish the basis for customs value. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Recognition by the customs administration of post-transaction transfer pricing adjustments (upward or downward). This recognition should be applicable for adjustments made either as a result of a voluntary compensating adjustment - as agreed upon by the two related parties - or as a result of a tax audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- in the event of post transaction transfer pricing adjustments (upward or downward), customs administrations accede to review the customs value according to either of the following methods as selected by the importer: application of a weighted average duty rate, or an allocation according to specific codes of the customs tariff nomenclature. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- in the case of post-transaction transfer pricing adjustments (upward or downward), companies be relieved from: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The obligation to submit an amended declaration for each initial customs declaration </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The payment of penalties, as variations of the transfer price </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Customs administrations recognize that the functions and risks undertaken by the parties as documented in a transfer pricing study following an OECD transfer pricing methodology are crucial to the economic assessment of the circumstances of the sale. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Recognition of the acceptability of relevant transfer pricing documentation by the customs administration as evidence that the price paid for imported goods was not influenced by the relationship of the parties. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A recommended method to accomplish harmonization of customs and income tax requirements is for customs administrations to use information contained in transfer pricing studies. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Anti Dumping Duty on Sodium Nitrate - Resurrected </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> anti dumping duty was imposed on Sodium Nitrate, falling under Chapter 28 or 31 of the First Schedule to the Customs Tariff Act, originating in, or exported from the European Union, the People's Republic of China, Ukraine and Korea RP, by Notification No. 14/2014-Cus (ADD) dated 19.03.2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification emphatically declared: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty imposed under this notification shall be levied for a period not exceeding six months (unless revoked, amended or superseded earlier) from the date of publication of this notification . </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The six months period expired on 19.09.2014 and it was not amended. So the notification virtually died on 19.09.2014 and there is no anti dumping duty on this product after that date. But with CBEC, notifications do not simply die like that - they can be resurrected. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now five months after its expiry, Government has imposed definitive anti dumping duty on the product for a period of five years from the date of imposition of the provisional anti-dumping duty, that is, the 19th March, 2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No problem, if somebody in the Board forgets to extend it in March 2019 - Government thinks it has the power to bring back to life dead notifications and impose anti dumping duty with retrospective effect. Surprisingly even some consultants believe that when Courts frustrate the good intentions of the benign government, there is no option but to illegally resurrect the Anti Dumping notifications in the larger interests of the Nation!</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NjM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.03/2015-Cus.,(ADD), Dated: February 10, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">No interest on amount of self-assessment tax paid by assessee before due date of filing of return of income - CBDT </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interest under Section 234A of the Income-tax Act, 1961 is charged in case of default in furnishing return of income by an assessee. Since self-assessment tax is not mentioned as a component of tax to be reduced from the amount on which interest under section 234A of the Act is chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been held by the Hon'ble Supreme Court in the case of <em>CIT vs Prannoy Roy</em> - <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2008/2008-TIOL-180-SC-IT.htm" target="_blank">2008-TIOL-180-SC-IT</a> </strong></em>that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, the present practice of charging interest under section 234A of the Act on self-assessment tax paid before the due date of filing return was reviewed by CBDT and it has been decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NjQ=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 2/2015, Dated: February 10, 2015 </font></strong></a></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><em><strong><font size="3">Manual on Exchange of Information - CBDT seeks feedback </font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> committee headed by Pr.CCIT(IT & TP), New Delhi has been constituted to revise the 'Manual on Exchange of Information'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT wants comments/suggestions/feedback from field officers on difficulties (if any) faced by them with respect to the usage of 'Manual on Exchange of Information'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also wants from them details of good cases, wherein, information received from Foreign Tax Authorities, based on the request for exchange of information, has resulted in additional taxes/penalties. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2NjY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Letter in F. No.500/20/2013-FT&TR-III Dated: February 06, 2015</font></strong></a></p>
<p align="center"><font size="3"><strong><em><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif">Digitalization of Manual Customs Data - CBEC Instructions </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Member SB Singh in a D.O Letter to the Chief Commissioners states, <em>"Customs data of manual Ports is not available in digitalized form for reporting, policy/decision making or statistical purposes. A need for digitalization of manual customs data for statistical, analytical or policy making requirements has been felt. Therefore, it has been decided to capture important fields of post clearance customs data (Bills of Entry and Shipping Bills) through a software utility and creation of a Central Database at DG, Systems in addition to the trade data requirements of other Govt. departments. Directorate General of Systems, ICE GATE, New Delhi has developed the Utility (Data Integrator v. 1.0).</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member further informs that, the Administrator of Data Integrator v. 1.0 shall be responsible for installation, roll mapping of other officers, proper data entry and modifications wherever required and transmitting data to DGCI&S, DGOV and DG, System. The Administrator shall also ensure credibility and accuracy of data through the officers appointed for data entry and verification. In this utility, three roles are assigned for data entry, data verification and data modification in the form of Maker, Checker and Modifier. These roles are to be allocated by the Administrator ensuring 100% post clearance data (BE/SB) entry, accuracy and timely submission to the agencies. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc2Njc=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Member's Letter in D.O.No.IV(22)26/2014-Systems, Dated: February 09, 2015</font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Revenue Officers Decide Destiny of Nation </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was in 1885 that a former Revenue Officer (Commissioner of Customs) A.O. Hume started the Indian National Congress. About 130 years later another former Revenue officer (Additional Commissioner of Income Tax) Arvind Kejriwal has pulverised the great organisation founded by Hume to a nought in Delhi. Don't take Revenue officers lightly - they can change the destiny of the nation. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Salt and Customs under AO Hume </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>SALT</em></strong><em> has been produced all along the Rann of Kutch in the west coast of India for 5,000 years. The Rann of Kutch is an extensive marshland which is cut off from the rest of the Indian subcontinent during monsoons when the seas inundate the low-lying areas. However, when the sea water evaporates during summer, it leaves behind a crust of salt which accumulate as salt pans. This salt is collected by labourers called malangis. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the eastern coast, salt could be obtained extensively along the coast of Orissa. The salt produced by the salt pans called khalaris in Oriya is of the finest quality in all India. There has always been a demand for Orissa salt in Bengal. When the British took over the administration of Bengal, they too felt its need and traded for salt. Gradually they monopolized Orissa salt all over Bengal. To check smuggling and illegal transportation, they sent armies into Orissa resulting in the conquest of Orissa in 1803. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There used to be a Customs barrier - a hedge 2500 miles long which had been kept up to protect the Government salt monopoly by excluding the cheap salt produced in the Rajputana States. This grotesque fortification, guarded along its whole length like the Great Wall of China, extended west to east across the continent of India, from Attock on the Upper Indus to near Cuttack on the Bay of Bengal. It was the source of wasteful expense, corruption, and great inconvenience to the public. This was guarded by thousands of officials to collect the tax on the salt which was taken through the various gates. The tax on salt became the biggest source of revenue for the Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A. O. Hume as Customs Commissioner was responsible for abolishing the great Customs barrier. </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"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font color="#FF6699" size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p>
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