TIOL-DDT 2779 · 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"><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>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="3"><strong>TIOL-DDT 2779</strong></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
04 02 2016<br>
Thursday
</strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Good times are here again</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THREE</strong> days back, the Central Government issued a back-dated relief notification <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMTQ=" target="_blank">1/2016-CE (NT)</a></strong> dt. 01.02.2016 and an all encompassing Board Circular <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMTU=" target="_blank">1014/2/2016-CX</a></strong>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the words of the Board <font color="#990000"><em>"This beneficial amendment of deleting proviso to rule 3(i)(vii) of CENVAT Credit Rules, 2004 has been done retrospectively with effect from 01.03.2015, that is the date from which reversal of Cenvat Credit for non-excisable goods was provided in rule 6 of Cenvat Credit Rules, 2004."</em></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ship-breaking industry were all smiles.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, it's time for many others, almost everyone, to celebrate.</font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Swachh Bharat Cess Component allowed as Rebate/Refund + services used beyond factory for export also refundable</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> 2<sup>nd</sup> February, the Central Government came out with a bunch of notifications(released only yesterday) and which have the following effect -</font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><div align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sr no. </font></div></td>
<td valign="top"><div align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax Notification no. </font></div></td>
<td valign="top"><div align="center"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Effect </font></div></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">01/2016-ST dt. 02-02-2016 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 41/2012-ST, dated the 29th June, 2012 amended so as to allow refund of service tax on services used beyond the factory or any other place or premises of production or manufacture of the said goods for the export of the said goods and to increase the refund amount commensurate to the increased service tax rate. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">02/2016-ST dt. 02-02-2016 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 12/2013-ST, dated the 1st July, 2013 amended so as to allow refund of Swachh Bharat Cess paid on specified services used in an SEZ. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">03/2016-ST dt. 02-02-2016 </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 39/2012-ST, dated the 20th June, 2012 amended so as to provide for rebate of Swachh Bharat Cess paid on all services, used in providing services exported in terms of rule 6A of the Service Tax Rules. </font></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the adage goes, better late than never!</font></p>
<p align="justify"><font color="#990000" size="2" face="Verdana, Arial, Helvetica, sans-serif">But what about the accumulated credit of Education Cess lying in the CENVAT account of the assessees?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notwithstanding the Tariff Conference and <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTg4NjM="><strong>Para B-21 of CBEC Instruction in F.No.96/85/2015-CX.I., Dated: December 07, 2015</strong> </a>it would have been welcome if the Board had come out with an amendment in the CCR, 2004 to allow payment of Central Excise duty / Service Tax by utilising the Education cess lying in balance.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjM=" target="_blank">Notifications 1/2016-ST</a>, <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjQ=" target="_blank">2/2016-ST &</a> <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjU=" target="_blank">3/2016-ST, all dated 2nd February 2016.</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Cenvat credit on sales commission</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> the subject matter, it seems the Board had realized that its Circular <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=NDA3MQ==" target="_blank"><strong>No. 943/04/2011-CX</strong> </a> dated 29.04.2011 which was intended to give relief to assessees all over India was losing its Midas touch in the State of Gujarat owing to the Gujarat High Court decision in <em>Cadila Healthcare Ltd.</em> - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2013/2013-TIOL-12-HC-AHM-ST.htm" target="_blank"><strong>2013-TIOL-12-HC-AHM-ST</strong>.</a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is what the Circular clarified -</font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S.No. </font></strong></div></td>
<td valign="top"><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Issue </font></strong></div></td>
<td valign="top"><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clarification </font></strong></div></td>
</tr>
<tr>
<td valign="top" width="48"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></td>
<td valign="top" width="265"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression "activities related to business"? </font></td>
<td valign="top" width="476"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The definition of input services allows all credit on services used for clearance of final products upto the place of removal. Moreover activity of sale promotion is specifically allowed and on many occasions the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. </font></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court had in paragraph 5.2 of its order held -</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"…The term input service as defined in the rules means any service used by a provider of taxable service for providing an output service or used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal and includes services used in relation to various activities of the description provided therein including advertisement or sales promotion. Thus, the portion of the definition of input service insofar as the same is relevant for the present purpose refers to any service used by the manufacturer directly or indirectly in relation to the manufacture of final products and clearance of final products from the place of removal. <font color="#FF0000">Obviously, commission paid to the various agents would not be covered in this expression since it cannot be stated to be a service used directly or indirectly in or in relation to the manufacture of final products or clearance of final products from the place of removal…</font> Under the circumstances, the adjudicating authority was justified in holding that the commission agent is directly concerned with the sales rather than sales promotion and as such the services provided by such commission agent would not fall within the purview of the main or inclusive part of the definition of input service as laid down in rule 2(l) of the Rules."</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the ground reality is that after pronouncement of the judgement of Gujarat High Court in <em>Cadila Healthcare</em>, the position is that Cenvat credit on sales commission agent's service is being denied in Gujarat; whereas in other parts of country it is being allowed based on the P&H High Court's Judgement in <em>Ambica Overseas</em> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgxMDg=" target="_blank"><strong>2011-TIOL-951-HC-P&H-ST</strong> </a>and Board's Circular dated 29.04.2011.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To alleviate the sufferings of the assessees who were wrongly given the short shrift, the Board has used its magic wand and extended its largesse to assessees all over India by amending the CCR, 2004 itself.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjY=" target="_blank">2/2016-CE(NT)</a></strong> released yesterday does the following -</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the CENVAT Credit Rules, 2004, in rule 2, in clause (l), after sub-clause (C), the following <em>Explanation </em> is inserted:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" " style="background-color:#FFFF00" span="span"><em> Explanation.</em>- For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the amendment introduces an Explanation, assessees, in particular those in Gujarat, may have every right to say that the same is clarificatory and hence retrospective in operation.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25624" target="_blank"><strong>Cenvat credit on sales commission - Assessees in Gujarat given the short shrift</strong>.</a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After all, 'tis the season of good times!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nonetheless, there is another amendment in rule 3 of CCR, 2004 by way of a proviso &which makes it amply clear that the CENVAT credit of any duty shall not be used for payment of the Swachh Bharat Cess. Perhaps this was a safety valve which was missing and now backs the FAQ, Question no. 14 which reads -</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" " style="background-color:#FFFF00" span="span"><strong>Q.14 Whether Cenvat Credit of the SBC is available?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" " style="background-color:#FFFF00" span="span">Ans. SBC is not integrated in the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC cannot be paid by utilizing credit of any other duty or tax</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjY=" target="_blank">Notification 02/2016-CE(NT) dated 3rd February 2016.</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Kholongchhu Hydro Electric Project included</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>exercise of the powers conferred by sub-rule (3) of rule 19 of the CER, the CBEC vide notification 45/2001-CE(NT) has specified the conditions, safeguards and procedures for export under bond of all excisable goods without payment of excise duty from the factory of production or manufacture, warehouse etc. to Kurichu Hydro Electric Project, Tala Hydro Electric Project, Punatsangechhu-I Hydro Electric Project, Punatsangchhu-II Hydro-Electric Project and Mangdechhu Hydro-Electric Project in Bhutan.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, to this list is added <em>Kholongchhu Hydro Electric Project.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjc=" target="_blank">Notification 3/2016-CE(NT) dated February 03, 2016.</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>Refund of CE duty on purchase of cars by physically handicapped persons - Board ameliorates situation</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the context of Sl. No 280 of Notification No. 12/2012-CE dated 17.03.2012 vide which concessional rate of duty has been provided for purchase of Cars by physically handicapped persons, Board has received references from <em>intended beneficiaries</em> that their refund applications filed beyond one year from purchase of vehicle have been rejected as they were hit by limitation under Section 11B of the Central Excise Act, 1944.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em>beneficiaries</em> have indicated that the reason for such delay in filing the claim is due to the delay in procuring certificate from the line Ministry as warranted by the notification.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To ameliorate such situations the Board has come out with a procedure which goes thus -</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"When a handicapped person approaches the Central Excise office for refund of duty paid on the vehicle, he should be advised that refund application should be filed within one year of payment of duty, irrespective of availability of certificate from the Line Ministry so that such claims are not time barred. The Officer processing the refund in turn should issue a deficiency memo, if the said certificate is not available. On submission of the Certificate, refund can be processed and sanctioned. Interest would be payable only for period beyond three months from submission of the complete application with the certificate from the Line Ministry."</font></em></p>
<p align="justify"><font color="#990000" size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the point is file refund claim first - certificate from Line Ministry can follow.</font></p>
<p align="justify"><font color="#990000" size="2" face="Verdana, Arial, Helvetica, sans-serif">A good suggestion by the Board but the field formations are never known to take such instructions kindly but are eager to dispose of the refund applications, one way or the other!</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMzA=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular 1015/3/2016-CX, Dated: February 03, 2016</strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Customs Single Window extended to other locations</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Board of Excise and Customs has taken-up the task of implementing 'Indian Customs Single Window Project' to facilitate trade. This project envisages that the importers and exporters would electronically lodge their Customs clearance documents at a single point only with the Customs. The required permission, if any, from other regulatory agencies (such as Animal Quarantine, Plant Quarantine, Drug Controller, Textile Committee etc.) would be obtained online without the importer/exporter having to separately approach these agencies. This would be possible through a common, seamlessly integrated IT systems utilized by all regulatory agencies and the importers/exporters. The Single Window would thus provide the importers/exporters a single point interface for Customs clearance of import and export goods thereby reducing interface with Governmental agencies, dwell time and cost of doing business.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Detailed instructions in this regard have now been issued.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxMjg=" target="_blank">Circular 03/2016-Customs, Dated: February 03, 2016</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>CBEC is spending Rs.0.83 for collecting Revenue of Rs.100</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>GST roll-out will not only increase the tax collection, but also reduce the high cost of revenue collection being incurred by the department. As of now, CBEC (which comes under Revenue Dept) is spending Rs 0.83 for collection of Rs 100. This will come down once GST is implemented. - Member, CBEC informed while speaking on the sidelines of a CII-organised event last year.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following are the details provided by the CBEC on its portal.</font></p>
<div align="justify">
<p align="center"><font color="#0099CC" size="2" face="Verdana, Arial, Helvetica, sans-serif">Comparative cost of revenue collection from 2010-11 to 2014-15</font></p>
<p align="center"><img alt="Legal Corner Icon" src="http://www.taxindiaonline.com/RC2/image/stories/ddtinside_1.jpg" height="331" width="557"></p>
</div>
<p align="center"><font color="#0099CC" size="2" face="Verdana, Arial, Helvetica, sans-serif">Comparative figures of various countries for the year 2011</font></p>
<p align="center"><img alt="Legal Corner Icon" src="http://www.taxindiaonline.com/RC2/image/stories/ddtinside_2.jpg" height="304" width="557"></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice day.</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to <a href="mailto:vijaywrite@tiol.in">vijaywrite@tiol.in</a></font></p>
</body>
</html>