TIOL-DDT 2650 · 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 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 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=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></s>TIOL-DDT 2650</font><font color="#663399"> <br> </font>28 07 2015<br> Tuesday</strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#FFFFFF"style="background-color:#006A00" span="span">Good Bye Mr. Kalam </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOBODY</strong> brings out of the White House the reputation that puts him there. But our APJ Abdul Kalam brought out of the Rashtrapati Bhavan far more respect, regard and reputation, than what put him there. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=NTgxNQ==" target="_blank">DDT 664 25.07.2007</a></strong> wrote:</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="Good%20Bye%20Mr.%20Kalam%20"><img src="http://www.taxindiaonline.com/RC2/image/stories/abdul_kalam.jpg" alt="" width="470" height="381" hspace="5" border="0" align="center"></a></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The most popular President ever, APJ Abdul Kalam is leaving office today. He was actually a sarkari scientist with a weird hair style, but in the last five years, he became the most popular President India ever had reaching out to the maximum number of people whose first servant he was . </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just look at the man in the picture, sitting on the floor with two journalists sitting on chairs. If our babus had a fraction of his humility, the governance would have been much better! </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=NDAwNA==" target="_blank">DDT 409 19.07.2006</a></strong> <strong><font color="#006600">Lift the spirits - the Kalam way:</font></strong> Dheeraj Rathod, is a Central Excise employee in Mumbai who suffered total hearing loss in the right ear while his right arm had to be amputated, in the Mumbai blast. He had an unusual visitor. His ultimate employer - the President of India APJ Abdul Kalam. Rathod says Kalam's visit helped him lift his spirits. We don't know whether anybody from the Board visited him or not and will the Board consider giving handsome aid from the Customs Welfare Fund? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjY0Ng==" target="_blank">DDT 206 21.09.2005</a></strong>: <em>The money can be transferred at blinding speeds and often without an acknowledgement or a trace. </em>(<font color="#FF0000">He should know - a smart clerk in the State Bank of India simply withdrew a lakh of rupees from Mr. Kalam's dormant account and it was with the interference of Prime Minister Vajpayee that he got his money back</font>)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=Mzkx" target="_blank">DDT 9 13.12.2004</a></strong>: Embarrassment is when a big van comes to pick up your luggage and all that you have is a small suitcase. This happened to President APJ Abdul Kalam, when he moved into the sprawling Rashtrapati Bhavan. </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salaam Kalam</font></em></p> <p align="center"><font size="3" face="Courier New, Courier, mono"><em><strong><font color="#FFFFFF" face="Georgia, Times New Roman, Times, serif"style="background-color:#006A00" span="span">Service Tax - Shamianas for Magh Mela in Allahabad - No Tax </font></strong></em></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a strange case.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner/assessee supplied pandals and shamianas to the Officer in charge of the Allahabad Magh Mela; let us call him the OIC. The OIC refused to reimburse Service Tax to the assessee on the ground that no Service Tax is payable on Pandal or Shamiyana services provided by the assesseeas it was for pure religious ceremonies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee filed a writ in the Allahabad High Court, way back in 2005 against the OIC seeking a direction for payment of Service Tax along with interest and penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise Department has filed a counter affidavit contending that the petitioner is a "Mandap keeper" and, accordingly, Service Tax is liable to be paid by him. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Definitions: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Pandal or Shamiyana contractor means - a person engaged in providing any service, either directly or indirectly in connection with the preparation, arrangement, erection or decoration of a Pandal or Shamiyana and includes the supply of furniture, fixtures, lights and light fitting, floor covering and other articles for the use therein. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"mandap keeper" means a person who allows temporary occupation of a mandap for a consideration for organising any official, social or business function. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board's clarification dated 17.9.2004: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>It is clarified that pandal/shamiana services provided for pure religious ceremonies or congregation for example, for worship of Gods/Goddesses, are not liable to service tax. It is also clarified that in case a cafe, hotels, restaurants etc. delivers food to home and no charge, other than that for the cost of the foods, is charged (i.e. free home delivery) no service tax is leviable.</em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court in its judgement last week observed, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clear, that a Mandap Keeper is a person who allows temporary occupation of a Mandap for organizing any official, financial, social or business function. The Mandap is in relationship to any immovable property as defined under Section 3 of the Transfer of Property Act, 1882 and includes any furniture and fixtures etc. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The definition of Mandap Keeper and Mandap makes it apparently clear that the petitioner does not come under this definition clause. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner is a Pandal or Shamiyana contractor providing services in connection with the preparation, arrangement, erection or decoration of a Pandal or Shamiyana. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, Mandap keeper is for organization of any social, official or business function. However, the Department has issued a clarification dated 17.9.2004 which provides that Pandal or Shamiyana keepers will not be liable for Service Tax, if they provide services for purely religious ceremony and congregation. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clear that services provided by a Shamiyana and Pandal contractor for a religious fair or congregation in the Mela area at Allahabad would be covered under the Circular dated 17.9.2004. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the instant case the tender invited by the Mela Officer was for the purpose of erection of temporary tents etc. in the Mela area during the MaghMela season for the year 2004-05. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the supply of the tents by the petitioner was for a religious congregation, which was held in the Mela area at Allahabad, the respondent No.1 was not liable to pay the Service Tax to the petitioner. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly the relief claimed by the petitioner cannot be granted. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The writ petition is dismissed with the observation that </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">it is not open to the Central Excise Department to demand Service Tax on the services provided by the petitioner in the Mela area for the year 2004-05. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Technically, the assessee lost the writ petition, but it was a huge success for him that neither he nor the OIC needs to pay the Service Tax! His appeal was dismissed, but he would be smiling all the way to the bank. The loser is the Service Tax Department which wanted to collect some tax out of the magh (kumbh)mela. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA1MDI0" target="_blank">2015-TIOL-1696-HC-ALL-ST</a> </strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#FFFFFF"style="background-color:#006A00" span="span">Public Institutions pay avoidable Service Tax - CAG </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> his Report No. 18/2015, presented to Lok Sabha yesterday, the CAG found fault with certain public organisations burdened with unnecessary Service Tax. </font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#006A00" span="span">Insurance Regulatory and Development Authority: Avoidable expenditure on service tax: Failure to recover service tax from clients and subsequent payment thereof from own funds resulted in avoidable expenditure of Rs. 22.58 crore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Insurance Regulatory and Development Authority (IRDA), Hyderabad has been rendering services to the Public/ Private Insurance companies, agents, brokers etc. by collecting charges/ fees. As per the provisions of the Finance Bill 2012, service tax is to be levied on all services except those specified under Section 66D (Negative List and exempted services). The services provided by IRDA were not included in the negative list. Hence, IRDA was required, with effect from 1 July 2012, to collect service tax on the charges/ fees collected for the services provided by it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IRDA, instead of collecting the tax, requested (April 2012) the Ministry to get the services rendered by it included in the Negative List. IRDA did not, however, collect the service tax as per the provisions of the Act pending decision from the Ministry. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry stated (July 2013) that it was a conscious decision of Government to keep exemptions at the minimum and as such the services of IRDA are liable to service tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Subsequently, IRDA sought opinion from a tax consultant, who confirmed (December 2013) the service tax liability and assessed the same for the period from 1 July 2012 to 2 December 2013 at Rs. 17.09 crore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IRDA decided (December 2013) to collect service tax payable from 1 January 2014 from service receivers. It however, paid the service tax of Rs.22.58 crore for the period 01.07.2012 to 31.12.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit observed (February 2014) that </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - IRDA did not consider it prudent to recover service tax from its service receivers pending Ministry's reply which was received after 15 months. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Even after receipt of Ministry's reply in July 2013, IRDA did not initiate action to recover service tax from its clients and instead it decided to pay the tax from its own funds. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IRDA stated (September 2014) that </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> - As there was no clarity on the subject, it sought the opinion of Ministry and the clarification was received in July 2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Opinion sought from tax consultant was for calculation of service tax and not regarding its applicability. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- It felt that it was cumbersome to collect the service tax from agents (20 lakh), brokers (300), etc. and hence a conscious decision was taken to bear the service tax liability. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG observed: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Services provided by IRDA were covered neither in the negative list nor by any specific exemption notification and were therefore liable to service tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Tax consultant in his opinion also confirmed that services provided by IRDA were neither covered under negative list nor Mega Exemption List, therefore attracted service tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- IRDA could have attempted to collect service tax from its service recipients at the time of renewal of licenses as the services provided by IRDA were clearly taxable and its decision to bear the burden without initiating steps to recover the same was flawed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Therefore IRDA's decision firstly to not collect service tax and subsequently to bear the tax liability resulted in an avoidable expenditure of Rs.22.58 crore. </font></p> </blockquote> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#006A00" span="span"><strong>Export Inspection Council of India:</strong> Avoidable expenditure due to non-collection of service tax: Indecision of the Export Inspection Council of India in timely directing the Export Inspection Agencies for collection of service tax on inspection and certification services from the exporters of notified commodities resulted in a loss of Rs 9.98 crore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export Inspection Council of India (EIC) was set up on 1st January 1964 by Government of India (GoI) under section 3 of The Export (Quality Control and Inspection) Act, 1963 to ensure sound development of export trade of India through quality control and inspection and for matters connected therewith. EIC is assisted in its functions by the Export Inspection Agencies (EIAs), set up under section 7 of the act and located at Chennai, Delhi, Kochi, Kolkata and Mumbai. The mandate of EIC is to advise the Central Government regarding measures for the enforcement of quality control and inspection in relation to commodities intended for export. Work of inspection, testing and certification is carried out by EIAs, for which they charge such fees as may be prescribed by the Government. EIC exercises supervision and administrative control over the employees, accounts and records of the EIAs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The services of inspection and certification being provided by the EIAs came within the ambit of service tax with effect from 01 July 2003. Resultantly, the service tax authorities had been raising demand of service tax and penal interest thereon from EIAs and their sub-offices. However, the Ministry of Commerce & Industry (administrative Ministry of EIC) vide its letter (November 2004) addressed to Chairman, Central Board of Excise and Customs (CBEC), sought exemption from applicability of service tax for EIC/EIAs on the plea that inspection and certification service being offered by the EIAs to exporters of notified commodities were statutory in nature. It was further argued that these services were being provided by Agencies at the notified rates/fees, which could not be modified by them and thus the Agencies were not liable to collect and pay service tax as their statutory obligations could not be construed as taxable services. In response, Chairman, CBEC clarified (March 2006) that the service tax was being levied, depending on the nature of the service provided and not on the basis of the status of the service provider and hence the Council and its field formations could not be exempted from levy of service tax. In view of the clarification of the CBEC, the Ministry of Commerce & Industry directed (April 2007) the EIC to find ways for collection of service tax. EIC, accordingly, decided in its 101st meeting (December 2007) to start collection of service tax from users of services of EIC/EIAs with effect from 01 October 2007. The EIC, however, started collection of service tax from exporters with effect from 01 December 2013. EIC also paid (September 2014) an amount of Rs.9.98 crore, on behalf of EIAs, towards service tax for the period from 01 December 2012 to 30 November 2013, though the amount of service tax for the period was not collected from the exporters.</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Audit observed that in-spite of the clarification given by Chairman, CBEC, directions given by the administrative ministry and the decision taken by EIC in its 101st meeting, the EIC kept on postponing its liability towards service tax for almost 10 years. Thus, in absence of any directions from EIC, the EIAs did not collect service tax from the exporters. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#FFFFFF" style="background-color:#006A00" span="span">Model Smuggling drugs - Flirting doesn't sway Customs Officer </font></strong></em></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="Model%20Smuggling%20drugs%20-%20Flirting%20doesn%27t%20sway%20Customs%20Officer%20"><img src="http://www.taxindiaonline.com/RC2/image/stories/Smuggling_drugs.jpg" alt="" width="500" height="499" hspace="5" border="0" align="center"></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FLIRTING</strong> with a Customs Officer didn't help jetsetting model Anet Pikula escape from Customs with cocaine hidden in her Mercedes Benz car - rather that gave her in. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Flirtation was what was going on," said a Customs spokesman of the US CBP after she was arrested last week at an Arizona crossing. The Customs Officers grew suspicious and summoned the services of a drug-sniffing dog which quickly found 13 pounds of cocaine valued at 1,34,000 USD, packed into bricks and shrink-wrapped and concealed in her car. </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></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@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>