TIOL-DDT 2771 · 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> <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> <p><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2771</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 22 01 2016<br> Friday</font></strong></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Central Excise - Valuation - Notional Interest on Advances </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHETHER</strong> the notional interest on advances received by a manufacturer from his buyer, should be included in the assessable value of excisable goods, is an issue that crops up periodically as it did in the Supreme Court last week. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>Commissioner Vs ISPL Industries </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODg0ODQ=" target="_blank"><strong>2003-TIOL-98-SC-CX</strong> </a>, the Supreme Court observed, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is clear that the mere fact of making an interest free advance by a buyer to the manufacturer, by itself will not be a sufficient ground to reload the assessable value with notional interest. It would be necessary for the revenue to show that such advance has influenced in the lowering of the price and that it is not depicting the normal price of the goods. There may be different reasons for taking advances, as indicated above in the earlier part of this judgment . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case decided last week had a chequered history. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Show Cause Notice was issued in 2002. The Adjudication order confirming the demand was passed in 2003 demanding the duty payable on the additional consideration received by the assessee from the customers in the form of notional interest accrued on advance payments. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the Tribunal, the Member (Technical) came to hold that the revenue had not been able to discharge the onus by adducing cogent material evidence that the advances obtained from a buyer had really been instrumental in depression of the price. He further opined that there was no nexus of interest with the price and hence, the demand was not acceptable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member (Judicial) opined that the the matter needs to be remanded to the Commissioner for fresh examination the entire aspect of the use of the advances, income generated from the said advances, their contribution of the pricing structure and their reflection in the Balance-sheet or the Annual Reports of the appellants, and the deployment of the funds so received by them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As there was difference of opinion, the matter was referred to the third Member and the third Member, who was a Judicial Member concurred with the opinion expressed by the Member (Technical). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue is in appeal before the Supreme Court, which last week sent the case back to the Tribunal for considering the amount of money paid by purchasers, the effect of the sales made in percentile terms and whether this had the effect of depressing the sale price. The onus would be on the revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a measure of Ease of doing business, can't the Government stipulate that such interest on advances will not form part of the assessable value? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this judgement today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25843" target="_blank">Breaking New</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25843">s</a></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - New Exchange Rates from Today </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 22nd January 2016. The USD is at 68.40 Rupees for imports and 67.35 Rupees for exports. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkwNjg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 14/2016-Cus (NT)., Dated: January 21, 2016</font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP -Import of Natural Rubber - Not Allowed </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the provisions of FTP 2015- 20 to stipulate that<em> Import of Natural Rubber will not be allowed during the period 21st January 2016 to 31st March 2016 under Advance Authorisations to be issued or revalidated on or after 21st January, 2016</em>. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkwNzA=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 33/2015-20, Dated: January 21, 2016 </font></strong></a></p> <p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">Bank Cheques in Hindi - Acceptable? <br> </font></strong></font><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>And the date in Saka Samvat</strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> a bank cheque be written in Hindi and the date of the cheque noted in Saka Samvat? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reserve Bank of India had clarified in Master Circular on Customer Service in Banks, dated 02.07.2015 that: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government of India has accepted Saka Samvat as National Calendar with effect from 22 March 1957 and all Government statutory orders, notifications, Acts of Parliament, etc. bear both the dates i.e., Saka Samvat as well as Gregorian Calendar. An instrument written in Hindi having date as per Saka Samvat calendar is a valid instrument. Cheques bearing date in Hindi as per the National Calendar (Saka Samvat) should, therefore, be accepted by banks for payment, if otherwise in order. Banks can ascertain the Gregorian calendar date corresponding to the National Saka calendar in order to avoid payment of stale cheques. </font></em></p> </blockquote> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">There is extreme lack of transparency for data, especially income tax data, in India - Piketty </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTED</strong> economist and famous author of <em>Capital in the Twenty-First Century</em>, Thomas Piketty was in New Delhi yesterday addressing an intellectual gathering at JNU. Piketty apologized for the fact that India does not have a bigger part in his book and that was because of lack of adequate historical data. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2771_image.jpg" alt="Legal Corner Icon" width="500" height="450" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Piketty quotes: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- There is extreme lack of transparency for data, especially income tax data, in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- It is very difficult to get data from authorities and there has been a decline in publication of income tax data. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- I don't understand why there is no pressure from the media and universities on the government to make such data public.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Access to income tax data is critical in measuring inequality and understanding the distribution of wealth. India used to publish the All India Income Tax Statistics until 2000, when it was discontinued. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Every time, I ask about when access to data could become possible, I am told this will change in a week or two, or in a month. But it never happens. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- India has one of the worst inequalities in income and wealth globally. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- the richest 1 per cent in India own around 53 per cent of country's wealth. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- India needs more transparency about income and wealth. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- May be in long run, the possible evolution on reservations should be on moving towards quotas based on "parental income and wealth, rather than caste </font></p> </blockquote> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Tell the FM </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> start our Budget Run Up shortly. Please send in your suggestions. Please be brief and precise if you want the powers that be to read your views. We will try to take your suggestions to the FM and maybe you can help in making the Budget 2016. Please attach your suggestions in a ‘word' document clearly mentioning your name, address, phone number and email id. We will not publish your name if you don't want to. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rush your mails to <a href="mailto:editor@tiol.in" target="_blank"><strong>editor@tiol.in</strong></a></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more<strong> DDT</strong></font></p> <p><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend.</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"><strong><a href="mailto:vijaywrite@tiol.in" target="_blank">vijaywrite@tiol.in</a></strong></font></p> </body> </html>