TIOL-DDT 2791 · 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 2791</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 22 02 2016<br> Monday </font></strong></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600" size="3">Services by Government or Local Authority to a Business Entity - All Services taxable</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CLAUSE</strong> (a) of Section 66D of the Finance Act, 1994 (Negative list) states: </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere- </font></em></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) transport of goods or passengers; or </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities; </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, the services listed in the sub-clauses (i) to (iv) are in positive list and are therefore taxable even if provided by the Government or Local authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Section 109 of the Finance Act, 2015 an important amendment has been made to Section 66D of the Finance Act, 1994. This Section reads, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In section 66D of the 1994 Act, <em><u>with effect from such date as the Central Government may, by notification in the Official Gazette, appoint</u></em>,- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) in clause (a), in sub-clause (iv), for the words "<em>support services</em>", the words "any service" shall be substituted; </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the effective date has been notified as 1st April, 2016. So, effective from this date, all the Services provided by Government or Local Authority to a business entity become taxable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also, an exemption has been provided for Business entities, whose turnover is up to rupees ten lakhs in the preceding financial year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, how will a Service Provider (Government or Local Authority) ascertain the turnover of the Business Entity who is receiving the Service? This may not be necessary as the Service Tax on these services is under reverse charge and the recipient is liable to pay Service Tax. Since it is the recipient who is liable to pay tax, he can decide based on this turnover whether he is liable to pay tax or not. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amendment is likely to yield significant revenue to the Government, as the royalty paid to the Government for various resources like Spectrum or Coal blocks may now attract Service Tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has to amend Notification No. 30/2012 -ST, dated 20.06.2012. Perhaps, they will do it later. Or something is proposed in the budget. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMjA=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 06/2016-ST., Dated: February 18, 2016 </strong></font></a></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMjE=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 07/2016-ST., Dated: February 18, 2016 </strong></font></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Customs - Simplification - One bond for one year instead of bond for each entry</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE </strong>is no uniformity regarding Customs procedure adopted at some ports/ Customs stations which increases transaction cost and time of clearance. This also results in major constraints in making Indian ports international transshipment hubs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Committee was set up by Ministry of Shipping for simplification of Shipping Customs procedure. Board has examined the recommendations of the Committee in consultation with identified Chief Commissioners of Customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The port clearance requires submission of numerous documents on behalf of other agencies­ Lighthouse Dues Certificate, NOC for Immigration, Port Health Certificate, etc.At present, the port clearance is given on execution of a bond/guarantee by the Steamer Agents each time a vessel enters. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a measure of simplification, Board has decided to give an option to the steamer agent to give a continuity bond /guarantee for a period of one year for the said purpose. This would reduce the number of documents submitted each time the vessel enters. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMzI=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mumbai Customs F.No. S/6-B-14/2014-15 Exp.ll Dated: February 18, 2016</font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">FTP - Online filing and processing of application for export of SCOMET items </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present applications for export of SCOMET items are to be mandatorily filed online using digital signature as per Para 2.73 (b) of the Handbook of Procedures of FTP 2015-20. The requisite documents in respect of these applications continue to be submitted manually at present. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under para 2.74 of Handbook of Procedures of FTP 2015-20, inter-ministerial working group (IMWG) in DGFT considers applications for export of SCOMET items as specified in Appendix-3 to Schedule 2 of the ITC (HS) Classifications of export items. The applications for SCOMET export are being forwarded manually to members of IMWG and are also processed manually. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to reducing transaction time in the IMWG consultation process, it has been decided to adopt an online processing system for SCOMET applications in addition to online filing thereof. Under this system, the SCOMET applications along with prescribed documents will be forwarded to IMWG members electronically and the consultation process will be online also. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Software has been developed for uploading applications along with requisite documents related to the SCOMET applications. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All applicants/stakeholders involved in the export of SCOMET item are required henceforth to upload the documents along with online application. </font></p> <p align="justify"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SCOMET = special chemicals, organisms, materials, equipment and technology</font></em></strong></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkyMjQ=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No. 20/2015-20, Dated: February 19, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">GST - WB Effect - New Chairman of Empowered Committee </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> one of his budget speeches, Dr. Manmohan Singh said, I am doing this under pressure from WB; WB is not World Bank, but West Bengal.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The WB Finance Minister Amit Mitra has become the new Chairman of the Empowered Committee of State Finance Ministers on GST. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Empowered Committee of State Finance Ministers was originally set up on 17th July, 2000 by the Government of India with the State Finance Ministers of West Bengal, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh, Gujarat, Delhi and Meghalaya as members with an objective to monitor the implementation of uniform floor rates of sales tax by the States and Union Territories, to monitor the phasing out of the sales-tax based incentive schemes, to decide milestones and methods of the States to switch over to VAT and to monitor reforms in the Central Sales Tax system existing in the country. Subsequently, State Finance Ministers of Assam, Tamil Nadu, Jammu & Kashmir, Jharkhand and Rajasthan were also notified as the members of the Empowered Committee. On 12th August, 2004, the Government of India decided to reconstitute the Empowered Committee with all the State Finance/Taxation Ministers as its members. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr.Asim Dasgupta, Finance Minister of West Bengal was the Chairman of the new Empowered Committee from its inception till the year 2010-11. Sushil Modi, Finance Minister of Bihar took over in 2011 July. The Finance Minister of Jammu & Kashmir, Abdul Rahim Rather took over in July 2013 as Sushil Modi had to resign consequent to his exit from the Bihar cabinet. After Rather lost his post in Jammu and Kashmir, Kerala Finance Minister KM Mani took over in March 2015. Mani resigned from his post as Kerala Finance Minister in November 2015 and so lost the Chairmanship of the Empowered Committee. </font></p> <p align="justify"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2791_1.jpg" alt="Legal Corner Icon" width="96" height="96" hspace="5" border="0" align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr Amit Mitra did his Masters in Economics from the Delhi School of Economics in 1970 and further attained the Doctorate Degree in Economics from Duke University, USA in 1978. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Mitra was the Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI) from 1994 to 2011. In 2011 he was elected to the West Bengal Assembly defeating the then Finance Minister and a former Chairman of the Empowered Committee, Dr.Asim Dasgupta. Dr. Mitra became the Finance Minister in May 2011. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Mitra's appointment might be a step ahead for the Government in getting the GST Bill passed. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">DGCEI Officers Arrested by CBI </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGCEI</strong> has been in the news recently for arresting some top executives of some famous firms. Now the top Intelligence Agency has become news as the CBI arrested four of its officers (An Assistant Commissioner, a Superintendent and two Inspectors) in Dehradun for demanding a bribe of ten lakh rupees. The DGCEI, was once considered a premier investigating agency and the posting to it was prestigious. Today it is said to be very lucrative. Who is more dangerous - the tax evader or the intelligence officer who lets him off after taking a bribe? In this case, the bribe was not an individual enterprise, but a collective effort with all the officers in the team actively involved - and they spend time together in jail. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is also interesting to note that CBI has booked a case against the son of a former CBI Director for defrauding a consortium of banks to the tune of Rs 304 crore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Civil Dacoit?</strong> An Income Tax Officer framed by CBI for assets disproportionate to his known source of income, claimed in court that his wife's grandfather was a dacoit and he had given her about a kg of gold as wedding gift. </font></p> <p align="center"><font size="3" face="Courier New, Courier, mono"><strong><em><font color="#006600" face="Georgia, Times New Roman, Times, serif">Budget Work at its Peak - Halwa Ceremony </font></em></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2791_2.jpg" alt="Legal Corner Icon" width="527" height="240" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> process of printing the budget documents has started with the traditional ‘Halwa Ceremony' in North Block attended by the Finance Minister, MoS, Secretaries and other officers. </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><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>