TIOL-DDT 274 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 274</font><br> 02 01 2006<br> Monday</b></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Branded jewellery - Board not happy with disobedient Commissioners</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Expensive and premium jewellery is now manufactured and sold under alluring brand names. On such branded jewellery I propose to levy an excise duty of 2%”, declared the Finance Minister in his budget speech and the gold rush started for the Department. Within hours of the FM’s budget speech, excise sleuths descended on gold shops to do stock taking. The agitated traders pulled down shutters and closed business. Within three days on 4.3.2005, Board came up with a clarification that every sign or mark is not a brand name. The Board circular stated that there had been some misgivings in the trade and to alley the apprehensions, Board had issued the clarification. It is obvious that the misgivings was not with the trade but with the department in spite of abundant clarity in the law and the Board circulars, Commissioners were causing confusion.<br> <br> Following Board instructions in the best of times had never been a favourite pastime of the Commissioners.<br> <br> Board has now issued a fresh letter stating that board has taken a serious view of the action of some Commissioners in not giving effect to the Board circular. What happens if the Board takes a serious view? Board has been consistently taking a serious view or rather communicating they are taking a serious view whenever Commissioners choose to ignore the Board's directions. Apparently Commissioners will continue to ignore Board directions and Board will continue to take a serious view. Of course in the mean time some gold may get seized, some people may go to jail and some lawyers may make money thanks to the rank disobedience.<br> <br> In order to avoid further harassment to the jewellery industry, the Board wants the following:<br> <br> 1) If a Commissioner is in doubt whether a particular jewellery is branded or not the matter should be referred to the <b>Board</b>.<br> <br> 2) The reference to the <b>Board should be made through the Chief Commissioners explaining why it should be treated as branded jewellery.</b><br> <br> 3) The Chief Commissioners should forward the reference with his comments to the Member (Central Excise).<br> <br> 4) Till the Board decides on the matter, <b>no action should be taken against the jeweller.</b><br> <br> May be foreseeing unwanted correspondence from the Commissioners, Board has also directed that where the jeweller agreess that his product is branded or where the Commissioner agrees that it is not branded, no reference need be made to the Board.<br> <br> <b>Happy New Year to the jewellers, thanks to the board, but subject to the approval by the Commissioners.</b><br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2005/trucir01.htm">F.No.354/203/2005-TRU, Dated : December 29, 2005</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Avoid jail, pay fine – Compounding of offences</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The last working day of the year 2005 saw the government issuing the rules for compounding of offences, which was under cold storage for more than a year. Interestingly this is not a new concept. The Central Excise Rules, 1944 had a provision in Rule 210A under which the Commissioner could accept an amount not exceeding Rs. 2,000/- in lieu of confiscation or punishment for any offence under the Act or Rules. Though this provision was there in the statute for a pretty long time, it was very rarely used and even when used only for minor technical offences. Now the compounding is back with a bang. Inflation and promotions have caught up with the system and now the minimum compounding amount is Rs. 50,000/- instead of the maximum Rs. 2,000/- in the earlier rules and the authority is Chief Commissioner instead of Commissioner.<br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2005/cnt05_114.htm">Notification No. 114/2005-Customs (N.T.), Dated: December 30, 2005</a><br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/exnt05_037.htm">Notification No. 37 / 2005 - Central Excise (NT), Dated: December 30, 2005</a><br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2005/cuscir05_054.htm">CIRCULAR NO. 54/2005-Cus., Dated: December 30, 2005</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Please see our detailed analysis of the issue from our experts in our special feature today.</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Quarterly return of interest payments – Last date extended</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> As per Section 206A of the Income Tax Act inserted by the Finance Act, 2005 companies, bank etc., paying interest more than Rs. 5,000/- and not deducting tax at source are required to file a quarterly return with the Income Tax Authorities. The CBDT has now extended the due date for filing these returns pertaining to quarter ending June, 2005 and September, 2005 to 31st January, 2006.<br> <br> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/itnotti.htm">F.No.385/35 /2005-IT(B), Dated December 29, 2005.</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Vishesh Krishi Upaj Yojana and Served From India Schemes – Date extended</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The last date for filing application under the above schemes was 31st December, 2005. Considering the request from the trade, DGFT has now extended the date to 31st March, 2006. <br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir043.htm">Policy Circular No. 43 (RE-2005)/2004-2009 Date: December 30, 2005</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>Export of Beche-de-mer prohibited</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> As per the export policy export of Beche-de-mer of size below three inches was allowed under a license. Now the DGFT has amended the ITC (HS) classification to bar export totally irrespective of the size. This is a marine product.<br> <br> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2005/dgft05not035.htm">Notification No. 35 (RE-2005)/2004-2009, Dated: December 28, 2005</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>South Asia Free Trade Area (SAFTA) operational from January 1st - Pakistan fails to ratify SAFTA by deadline</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> As the world welcomed the year 2006, the South Asia Free Trade Area (SAFTA) was born with the objective of completely integrating the economies of the seven SAARC nations into a regional trading bloc in the next ten years with the phase-out of tariff barriers beginning straightaway. SAFTA has come into effect from yesterday without Pakistan. “It is just that it was not completed today (the deadline). We hope to do it very soon," Pakistan Foreign Office spokesperson Tasneem Aslam said yesterday. She, however, declined to give a definite timeframe for the ratification.<br> <br> The economic integration between India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives has started with the implementation of SAFTA with the further promise of ushering in the much-needed political stability in the region which has two of its members as 'nuclear powers'.<br> <br> SAFTA holds a potential of becoming one of the most important economic blocs in the world, if the tariff barriers are removed as per the roadmap. As Commerce and Industry Minister Kamal Nath has summed it up.'' Every fifth person on the planet would live under the SAFTA trading bloc.'' <br> <br> Member countries - barring the Least Developed Countries (LDCs) will bring down their import duty by 20 per cent by the end of first year. With gradual progressions, customs tariffs would be brought down to five per cent after seven years. This would effectively mean a duty reduction of 15 per cent every year. However, the LDCs like Bangladesh would get the phase-out period of 10 years to bring down their tariffs to five per cent.<br> <br> Since the applied rate as on January one, 2000, is being taken as the base for tariff phase-out, no major duty cuts would be necessary for India since India has already cut its tariff substantially since the base date. The SAFTA would result in a major gain for India which will get an automatic MFN (Most Favoured Nation) status in Pakistan.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399">No two countries that both had a McDonalds' had fought a war against each other, since each got its McDonalds'</font></b></font></p> <p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <i>New York Times Foreign Affairs Columnist Thomas L Friedman</i></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <font color="#FF6666"><b>Until tomorrow with more DDT<br> <br> Have a nice day.</b></font></font></p> <p align="justify"><font color="#FF6666"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></b> </font></p> </body> </html>