TIOL-DDT 2550 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 color="#663399" size="3"><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>TIOL-DDT 2550</font><br>
03 03 2015<br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><em><strong><font size="3">Budget Blues</font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Budget 2015 has caused several apprehensions in the minds of the stakeholders and we have been getting several calls and mails seeking clarifications on several doubts. Some of them may appear outright silly, but because of the humungous confusion created by avalanches of statutes flowing in the form of Acts, Rules, Notifications, Circulars, Judgements etc and the constant fear of being hit by the unfailing demon of demands followed by draconian recovery action, the assessees are simply terror stricken. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660066" size="3">Where is 12.5% Excise Duty Notification?</font></strong> It was announced that excise duty has been enhanced to 12.5% and it has immediate effect. People started looking for the notification for the 12.5% rate and the effective date. Some assessees told us that in 2012 there was a Notification No. 18/2012 dated 17.03.2012, making the effective rate of duty at 12%. We had a difficult time explaining to several people that the 12.5% rate has been proposed in the Finance Bill 2015. But they believed that the Finance Bill will become effective only after enactment - we had to tell them about the Provisional Collection of Taxes Act, by which an increase in Excise and Customs duties will have immediate effect. But then is it effective from 11 a.m of 28th February when the Budget was presented? In fact a Chartered Accountant even wrote an article for us that 12.5% is effective from 28th February, but the exemption to education cess by Notification No. 14/2015-CE dated 1.3.2015, was effective from 1.3.2015. So, he stated that for clearances on 28th February 2015, there was no exemption from Education Cess, but the 12.5% rate would be applicable. No, sir - immediate effect does not mean immediately after presentation of the Budget. As per the Provisional Collection of Taxes Act, it means immediately on the expiry of the day on which the Bill is introduced in the Parliament. So, the 12.5% rate as well as the Education Cess exemption is applicable only from 1.3.2015.<font color="#FF6633"> It is reiterated that excise duty has been enhanced to 12.5% by the Finance Bill and there is no education Cess on this and this is applicable from 1.3.2015</font>. </font></p>
<p align="justify"><strong><font color="#660066" size="3" face="Verdana, Arial, Helvetica, sans-serif">What is the Service Tax rate?</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> It was announced that Service Tax rate has been enhanced to 14% and there would be no Education Cess. We are told that some people have already started collecting 14% Service Tax as they believe it would have immediate effect under the Provisional Collection of Taxes Act. They were surprised when we told them, that the enhanced rate of Service Tax will be applicable only from a date to be notified after enactment of the Finance Bill. If excise duty is applicable immediately, why not service tax? We explained that Provisional Collection of Taxes Act does not apply to Service Tax. Strange and difficult to comprehend? <font color="#FF6633">It must be noted that 14% Service Tax will be applicable from a date to be notified later</font>.</font></p>
<p align="justify"><strong><font color="#660066" size="3" face="Verdana, Arial, Helvetica, sans-serif">SAD - Not for all:</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> There was a general misunderstanding that the Finance Minister has exempted all goods from SAD; they all looked for the notification exempting all goods from SAD; sadly they couldn't find it. Many of them called us to tell us that there is a terrible mistake. This is what the Finance minister said in Para 112 of his Budget Speech. </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some other changes address the problem of CENVAT credit accumulation due to the levy of SAD. I propose to fully exempt <font color="#FF6633">all goods</font>, except populated printed circuit boards <font color="#FF6633">for use in manufacture of ITA bound items</font> from SAD and reduce the SAD on imports of certain other inputs and raw materials subject to actual user condition . </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was understood as exemption from SAD for all goods. Even a leading advocate told me that he too understood it that way only. The Annexure to Finance Minister's speech stated, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reduction in SAD to address the problem of CENVAT credit accumulation: </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">All goods except populated PCBs, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">falling under any Chapter of the Customs Tariff, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">for use in manufacture of ITA bound goods from 4% to Nil . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, it is clear that all goods are not exempt from SAD. "it's a comma mistake", says another leading lawyer. </font></p>
<p align="justify"><strong><font color="#660066" size="3" face="Verdana, Arial, Helvetica, sans-serif">Two Rates of Duty - which one is applicable?:</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> There was a frantic call from an importer. What is the rate of duty for iron and steel falling under Chapter 72? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 12/2012-Cus as amended on 1.3.2015 has the following different rates and there is one rate of 10% for all goods under Chapter 72. Will they insist on payment of 10% for all goods? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The JSTRU in his D.O Letter answered this question. The JS stated, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"it is quite likely that a commodity may be covered under more than one notification attracting different rates of duties. In such cases, as per various judicial pronouncements on the subject, the benefit of lower rate of duty cannot be denied to the assessee provided he fulfils the conditions prescribed, if any, for such lower rate." </font></em></p>
</blockquote>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr bgcolor="#CAFFD5">
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No </font></div></td>
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Heading </font></div></td>
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description </font></div></td>
<td valign="top"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate </font></div></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">329A. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">72 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">330. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">72 (except 72026000) </font></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods other than the following:- </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) goods mentioned against S. Nos. 331, 332,333 and 334 and </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) seconds and defectives of goods falling under Chapter 72 </font></p></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5% </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">331. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7202 60 00 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ferro-nickel </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.5% </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">332. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7204 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Melting scrap of iron or steel (other than stainless steel) </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.5% </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">333. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7204 21 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Scrap of stainless steel, for the purpose of melting </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.5% </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">334. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7208, 7209, 7210, 7211, 7212, 7219, 7220, 7225 3090, 7225 4019 7225 50 or 7225 9900 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></td>
</tr>
</table>
</div>
<p align="center"><font size="3"><strong><em><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif">The Raga of Tax - Taxing Classical Music - Depraved? </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>USTAD</strong> Amjad Ali Khan, M. Balamuralikrishna, and Pandit Birju Maharaj are just three names among the gems of Indian art, culture and music - they will soon end up as Service Tax assessees. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl. No. 16 of Notification No. 25/2012-ST dated 20.06.2012, <em>Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador</em> were exempted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this Budget, by Notification No. 6/2015-ST dated 1.3.2015, this has been changed to "<em>Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such performance is not more than one lakh rupees"</em>: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Soon these greatest maestros may become offenders and maybe even summoned by a Superintendent of Service Tax. (I had seen a world famous engineering professor sitting on a bench outside a Superintendent's room, having been summoned there and told that the proceedings before the great authority was judicial and any disobedience will result in heavy penal action.) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If these artists, who are the pride of the Nation, charge more than a lakh of rupees for a performance, they are liable to pay Service Tax, take out a registration, file an online return and comply with all the complicated procedures. They can even be audited. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">BN Gururaj, the famous advocate from Bangalore says, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the drive of India for economic growth, India should not end up taxing its torchbearers of art and culture. India should not become so materialistic that it taxes musical and artistic performances. We would have to be a depraved society to do so. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most artists get paid less than this sum (of one lakh rupees) and would be exempt. Only performers of high repute can hope to charge couple of lakh rupees or three lakh rupees per performance. How much Revenue does the government expect to earn by taxing a couple of dozen or few hundred performing folk and classical artists? Very often, the main artist would have to pay fellow artists out of his honorarium. Rs.1 lakh per performance is not a big fortune, which the government must tax. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This proposal is shameful to the society. The central government should drop this proposal and continue the unconditional exemption to folk and classical performing artists. </font></em></p>
</blockquote>
<p align="center"><font color="#006600"><strong><em><font size="3" face="Verdana, Arial, Helvetica, sans-serif">Chit Remains</font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No 8/2015 ST dated 01.03.2015, the following entry in the Notification No 26/2012 ST dated 20.06.2012 is omitted: </font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Services provided in relation to chit </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">70 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004. </font></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, they forgot to omit this part of the Notification: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>2. For the purposes of this notification, unless the context otherwise requires,- </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. "chit" means a transaction whether called chit, chit fund, chitty, kuri, or by whatever name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to a prize amount..</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
</blockquote>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Double Condition?? </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. 12/2015-CE, dated 1.3.2015 amends Notification No. 12/2012, dated 17.3.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Two conditions 52 and 53 are inserted in the parent notification. The problem is Notification No. 12/2012 already has a condition No. 52. Now where do you insert the second Condition No.52? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Board clarify? </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">New Laboratory for Certification of Diamonds </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTERNATIONAL</strong> Institute of Diamond Grading and Research India Private Limited, Surat, is added as a new laboratory for purpose of certification/ grading of diamonds of 0.25 carats and above under paragraph 4A.2.1 of Foreign Trade Policy, 2009-2014. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTc3NjI=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No.113/2009-2014, Dated: March 02, 2015 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Clever FM! </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I</strong> reproduce a mail I got yesterday from an industrialist. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Finance Minister by making the change in Rule 6 - i.e. 6% duty reversal on the non-excisable goods will lead the industry specially the chemical/pharma industries into additional financial burden. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Previously there is no duty on the sale of such hazardous waste and disposal. The industry used to pay the charges for such disposal. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the new notification there is an additional burden of 6% on the invoice value, means a further loss to the industry. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Already as per the Pollution laws laid by the MoE the industries are under social responsibility moving their entire hazardous waste to the disposal sites. The charges for the same are comparatively high and industries have no other option to pay the same to the waste management groups. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister has very cleverly touched an area where he can get the good piece of cake. </font></em></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"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></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@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p>
</body>
</html>