TIOL-DDT 2789 · 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> <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 2789</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 18 02 2016<br> Thursday </font></strong></p> <p align="center"><strong><em><font color="#006600" size="2" face="Georgia, Times New Roman, Times, serif">Power Generation, Transmission and Distribution in SEZ - Guidelines </font></em></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> we carried the Customs Notification on the duty payable by SEZ units selling power in the DTA. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commerce Ministry has issued guidelines for generation, transmission and distribution of power in Special Economic Zones:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) A power plant, including non-conventional energy power plant, to be set up by developer/co-developer in an SEZ as part of infrastructure facility will be in the Non-Processing Area of SEZ only, and will be entitled to fiscal benefits only for its initial setting up and no fiscal benefit would be admissible for its operation and maintenance. There will be no obligation to achieve positive Net Foreign Exchange (NFE) for such power plants. Such a power plant can supply power to DTA after meeting the power requirement of the SEZ subject to payment of customs duty as determined by DoR keeping in view the duty foregone on initial setting up of the power plant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Henceforth, no single stand-alone power plant will be permitted to be set up in an SEZ in which there would be no other units. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Henceforth, setting up of captive power plant, including non-conventional energy power plant, can be permitted in Processing Area as a unit, and it will be subject to NFE obligations. Such a power plant will be entitled to all the fiscal benefits covered under section 26 of the SEZ Act including the benefits for initial setting up, maintenance and the duty free import of raw materials and consumables for the generation of the power. They can sell power to DTA on payment of customs duty as determined by DoR keeping in view the duty foregone on installation, as well as O&M, and including service tax exemption. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) With respect to the IT/ITES SEZs, which require continuous quality power, wherever generation of power has been approved by the BoA, as authorized operation, to the Developer/Co-developer within the processing area, and in respect of which there is a statutory requirement on developer/co-developer to supply 24 hours uninterrupted quality power supply at stable frequency in the Zone, in terms of Rule 5A of SEZ Rules, 2006; in such cases generation of power will be carried out as a unit within the processing area, and such a power plant including non-conventional energy power plant, will be entitled to all the fiscal benefits covered under section 26 of the SEZ Act including the benefits for initial setting up, maintenance and the duty free import of raw materials and consumables for the generation of the power. Such duty free imports of capital goods, raw material and consumables etc. would be counted towards the NFE obligations of the unit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) SEZs which are connected to State/National Grid, will be allowed to create a back-up power facility. Such power back-up facility, if it is in the NPA, only duty benefits on capital expenditure for setting up will be available. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) Those Power Plants in SEZs which were approved prior to 27.02.2009, and subject to issue of Power Guidelines and provisions of SEZ Act & Rules, either as an infrastructure facility by Developer/Co-developer or as a unit in the Processing Area, will be permitted to operate. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These guidelines would be effective from 16th February, 2016. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMTA=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry of Commerce (SEZ Division) No.P.6/3/2006-SEZ (vol.III)., Dated: February 16 2016</font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Swachh Bharat Cess - Govt Corrects error in Exemption Notification </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> are two kinds of exemption in Service Tax. One is the general exemption under Section 93(1) and the other is a special exemption under exceptional circumstances (like floods), under Section 93(2). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 22/2015-Service Tax, dated 6.11.2015, the Government: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Exempted Swachh Bharat Cess in excess of 0.5 percent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Clarified that there would be no Swachh Bharat Cess on services which are exempt from service tax by a notification issued under sub-section (1) of section 93, and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Forgot to clarify that there would be no Swachh Bharat Cess on services which are exempt from service tax under sub-section (2) of section 93. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This lapse is now corrected. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMDU=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 05/2016-Service Tax, Dated: February 17, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs Duty Exemption Restored on Life Saving Drugs </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has exempted Octreotide, Somatropin and Anti- Haemophilic Factor Concentrate (VIII and IX). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These drugs were exempted till 28.01.2016 when the exemption was withdrawn by Notification No. 6/2016-Cus dated 28.1.2016. There was a hue and cry on the withdrawal of the exemption. The Government bowed to public opinion and restored the exemption. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMDQ=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 10/2016-Customs, Dated: February 17, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Minimum Import Price (MIP) on Iron and Steel - CBEC wants Field to follow </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No. <a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkxNTM=" target="_blank"><strong>38/2015-2020</strong> </a> dated the 5th February, 2016, DGFT had amended the Import Policy Condition against 173 HS Codes under Chapter 72 of ITC (HS) fixing Minimum Import Prices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants Customs officers to strictly comply with the policy and initiate suitable action under the Customs Act, 1962, against the importers violating the provisions. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMDQ=" target="_blank">CBEC Instruction No. 10/2016, Dated: February 17, 2016 </a></font></strong></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Clarification on availability of benefit under Focus Product Scheme on export of item 'OMEPRAZOLE AND LANSOPRAZOLE </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> product description appearing under ITC HS 30049034 mentioned at Sl No.472 of Appendix 37-D, Table-1 of Foreign Trade Policy 2009-14 which was placed at serial no. 503 in Table 1 of Appendix 37 D as notified vide public notice no. 52 dated 25.02.2014, is:'OMEPRAZOLE AND LANSOPRAZOLE' </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has received representations stating that the bulk drugs Omeprazole and Lansoprazole are two different export products but have the same ITC HS code for availing FPS benefit under FTP 2009-14. These products should be given different serial numbers in Table 1, Appendix. 37D of HBP 2009-14. It is also stated that Omeprazole and Lansoprazole are two different molecules with their different identifications belong to group <em>"Proton Pump Inhabitor</em>". There is no combination of these two bulk drugs under any brand name in the market. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has advised RAs that while considering grant of Focus Product Scheme benefit of Foreign Trade Policy 2009-14 under ITCHS 30049034 mentioned at Sl No.472 of Appendix 37-D, Table-1 which was placed at serial no. 503 in Table 1 of Appendix 37 D notified vide public notice no. 52 dated 25.02.2014, the product whether omeprazole is exported or lansoprazole is exported, it will be incentivised under FPS. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMDg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No. 19/2015., Dated: February 17, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Inter Unit Transfer of goods among three units - CESTAT Larger Bench holds cost of material at Second unit does not include notional profit of 15%/10% </font></em></strong></font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. ITC, Bhadrachalam clears paper to its own unit, ITC, Chennai and pays duty on 110% of the cost of production, as per Rule 8 of the Valuation Rules. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. ITC, Chennai uses the paper as raw material for manufacturing packaging materials which is cleared to own units of ITC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Cigarette units of ITC use the packing material. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question is, “<em>What is the value for payment of duty payable by ITC, Chennai</em>?” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was the question before the Larger Bench of the CESTAT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue referred for resolution is: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Whether, in the case of inter-unit transfer of goods for captive consumption, the entire value (i.e. 115% / 110% of the cost of production) OR the actual cost of production (i.e. 100% of cost) excluding notional loading (i.e. 15°/o / 10%) of the goods manufactured by the one unit,, would be the cost of raw material of the another unit (who used the goods in the manufacture of another article) for the purpose of determining value under Rule 8 of Valuation Rules and CAS-4 issued by ICWAI, for transferring the goods to their other unit for further use. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Whether the decision of Chennai Bench in the case of CCE Vs Eveready Industries Ltd. - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2011/2011-TIOL-1115-CESTAT-MAD.htm" target="_blank"><strong>2011-TIOL-1115-CESTAT-MAD</strong> </a>(OR) the decision of Mumbai Bench in the case of Tata Iron and Steel Co. Ltd. Vs CCE - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgwNjc=" target="_blank"><strong>2013-TIOL-707-CESTAT-MUM</strong> </a>had enunciated the correct position of law on the above issue. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT Larger Bench resolved the issue last week in Chennai. Please See <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26112" target="_blank"><strong>Breaking News</strong></a> for the solution.</font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Customs - Valuation of imported fixed wireless telephones and software CD ROMs - Inclusion of value of software for discharging Customs duty - whether there are two distinct goods - No, holds CESTAT Larger Bench </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>case had gone all the way up to the Supreme Court and reached the Larger Bench of the Tribunal where marathon arguments took place for about ten hours. Revenue won the main case hands down, the Larger Bench holding that the Compelling conclusion is that in the present case, the Fixed Wireless phones as imported require to be classified and assessed as phones with no segregation of value assignable to the software separately, as claimed by the importers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This judgement was pronounced yesterday - we bring it to you today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26114" target="_blank">Breaking News</a>.</strong> </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">DRI Finally Gets a DG </font></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Premier Investigating agency of the Customs, DRI was without a regular chief for nearly a year - since the present CBEC Chief Najib Shah joined the Board. Mr. Shah was holding charge of DRI in addition to his onerous responsibility as India's Customs Chief - and that includes Central Excise and Service Tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Jayant Misra the present DG, Systems is to take over as DG, DRI. Mr. S. Ramesh, the present Chennai Customs Chief Commissioner is to be the new DG, Systems. Board is yet to specify as to who would hold Chennai Customs. </font></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>