TIOL-DDT 2800 · the untouched capture
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<p><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2800</font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
04 03 2016<br>
Friday</font></strong></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">In the era of self assessment, our main role is to facilitate trade and industry - CBEC Chairman tells Field </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>the context of changes in excise duty rates for precious metal jewellery and ready made garments/made up articles of textiles, in the recent budget, the Chairman CBEC, Mr. Najib Shah, in a D.O. Letter to the Chief Commissioners, said, "<em>in the era of self assessment, our main role is to facilitate trade and industry</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He told the Chief Commissioners: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. Registration/Centralized Registration once applied for shall be granted within two working days, as per the simplified registration procedure prescribed under Notification No. 35/2001-CE [NT]. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. There should be no post registration verification of the registered premises. Relevant Notification No. 35/2001-CE [NT] has been suitably amended in this regard </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. No stock declaration will be required to be made to the jurisdictional central excise authorities by jewellery manufacturers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv. To allay any possible apprehensions of the industry, the officers of the department should not visit the premises of these assesses for any routine purposes, like stock verification, verification of records, etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v. Officers should continue to facilitate export consignments of these goods, and ensure that under no circumstances the same are held up or delayed on account of the new levy.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">vi. As per the Rule 12M of the Central Excise Rules, 2002, jeweller who gets his jewellery manufactured from any other person [like artisans etc.], will have to follow the procedures [such as taking registrations, paying duty and filing returns] and pay duty. In such cases, the levy will not be on the job worker [like artisans etc.) </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He has emphasised that there should be no deviation from these instructions.In a welcome change, the Chairman addresses the Chief Commissioners as "<em>Dear Colleague</em>" </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNDg=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC D.O. Chairman/CBEC/27/2016., Dated March 03, 2016 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">One Year too little to issue Show Cause Notice - CBEC Chief </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the ASSOCHAM yesterday the Chairman said that the Union Budget 2016-17 is aimed to bring the huge chunks of industry including area-based exemptions together with SSI, edible oil, textile sectors and others into the tax net in a most easy manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman added, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Out of the GDP Rs 110 lakh crores and manufacturing sector contributing about 17 per cent to it, we have huge chunks of industry which is out of the net; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Area-based exemptions, it is one lakh plus crore which is out of the net, SSI, edible oil, textile sector, these are huge chunks of industry; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">If we are talking of GST, we are now talking of all these sectors having to move towards the tax net, how else are we going to have a GST; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">The industry supports GST but very-very surprisingly, keeps expecting and wanting exemptions, the two do not go together, every time there is a break in the CENVAT chain, you have a problem, you have tax sticking on to some products, which the next man has to bear and there is no reason why you should bear it; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Therefore, this was the thinking really behind to slowly bring these sectors into tax net and these are essential steps in our opinion if we wish to move towards GST; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">More than 10-12 per cent of the litigations were because of two specific rules in the CENVAT i.e. Rule 6 and Rule 7, that have now been completely revamped. We have tried to simplify them to the extent possible; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">We are expecting a hit of more than Rs 1,000 crores only because of the CENVAT credit rule changes, in terms of simplification, we thought it is something essential, because the cost of litigation was much more than the revenue which we are otherwise getting; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">All these simplified processes will add to ease of doing business and reduce transaction costs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">The focus right through the budget has been on simplification, on ensuring that the taxpayer gets better value for money, gets better services from us and has lesser interaction with us; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Our analysis showed us that one year was too little for us (to issue Show Cause Notices) simply because balance sheets for the financial year are invariably filed by the September 30 of the following year, so by the time the audit gets done and department gets to know something which we have to collect or not collect, the one year period gets over, to cover that up the departmental officers are invariably going in for the extended period of five years, which was happening across the board. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">The TARC recommendations - Implementation by CBDT & CBEC - Status </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> his 2013 Budget Speech, the Finance Minister announced - "<em>An emerging economy must have a tax system that reflects best global practices. I propose to set up a Tax Administration Reform Commission to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system."</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly the Tax Administration Reform Commission (TARC) was constituted in August 2013 under the Chairmanship of Dr.Parthasarathi Shome. The Commission submitted its fourth and final report to the Finance Minister on 20th February 2015. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT covered the TARC reports and associated news in the following editions:<strong> DDT <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg1MDI=" target="_blank">2177</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTk0MzM=" target="_blank">2265</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjA2NzM=" target="_blank">2376</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIxMzc=" target="_blank">2488</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIyMTA=" target="_blank">2493</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIyMzQ=" target="_blank">2495</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIyNzg=" target="_blank">2498</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIzMDY=" target="_blank">2500</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjI4NTI=" target="_blank">2544</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjI4NzY=" target="_blank">2546</a>, <a href="http://www.taxindiaonline.com/RC2/ColumnSearch.php" target="_blank">2564</a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjM4NTE=" target="_blank">2618</a> & <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjYwNDU=" target="_blank">2785</a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is learnt that both the Revenue Boards viz. CBDT & CBEC have accepted and implemented the recommendations of the TARC to a fairly large extent. Some of these gems are displayed below. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td colspan="2" valign="top"><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">CBDT Reply </font></strong></div></td>
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<td valign="top"><div align="center"><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recommendation </font></strong></div></td>
<td valign="top"><div align="center"><strong><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Status </font></strong></div></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Tax Council should be set up to develop a common tax policy, analysis and legislation for both direct and indirect taxes. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Tax Policy Council is constituted vide order dated 2.2.16. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Common Tax Policy and Analysis (TPA) unit. The existing TPL in CBDT and TRU in CBEC should be subsumed in the common TPA. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax Policy and Research Unit is constituted vide order dated 2.2.16. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There should be a dedicated organisation for delivery of taxpayer services with customer focus for each of the Boards. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A dedicated vertical for delivery and monitoring of Taxpayer Services has been set up in CBDT, its attached Directorates and at field offices. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pre-filled tax returns should be provided to all individuals. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The TARC recommendation regarding pre-filling tax returns has already being implemented in the most comprehensive manner as is feasible. This is an on-going process. </font></td>
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<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There should be a system for online tracking of dak/grievances/applications for refund etc. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The mechanism for online tracking as suggested is already present in the Sevottam Software in use in Aayakar Seva Kendra (ASK Centre). </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Continuous benchmarking of tax administration <em>vis-à-vis</em> TPS? </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The benchmarking of Tax Payer Services is an ongoing process. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There should be one Knowledge, Analysis and Intelligence (KAI) centre for both the Boards </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has taken several steps to enhance its analytical capability under Project INSIGHT by setting up an integrated Data Warehousing and Business Intelligence (DW&BI) platform </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the Departments should shift all the key operations to the digital platform </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In recognition of its e-Governance initiatives, the CBDT was conferred “Prime Minister's award for excellence in Public Administration ? for “Easy Tax Compliance through Quality Service? on 21st April, 2015. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A comprehensive performance management system needs to be set up for tax administrations by revisiting and reconstructing the RFD. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT develops a detailed annual action plan for its field formations and RFD for its attached directorates. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The performance appraisal process needs to be made more wholesome and reliable </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The current performance appraisal system is as per the guidelines of the Government.? </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A formal mentorship programme may be set up, with carefully selected mentors. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">National Academy of Direct Taxes has set up a mentorship framework in the Income Tax Department, for the newly recruited Indian Revenue Service Officers. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Code of ethics needs to be developed </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Conduct Rules for officers of Government of India prescribe a code of ethics to be followed by all organized services of the Government including the Income tax department. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The provisions of Rule 56(j) of the Fundamental Rules should be effectively utilised for weeding out officers who are inefficient or of doubtful integrity. The criterion for review should be changed to completion of 20 years of service. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instructions have been issued for review as prescribed under Rule 56 of Fundamental Rules. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No cognizance should be taken of anonymous complaint </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has issued specific guidance notes. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Retrospective amendment should be avoided as a principle. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This has been stated by the Finance Minister. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dispute management should be a functionally independent structure with adequate infrastructural support. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The dispute management apparatus within the department is functionally independent. Necessary infrastructure has also been provided. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeals to high courts and the Supreme Court should only be on a substantial question of law. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is already a part of the statutory provisions. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Promote e-payment. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxpayers can pay through net banking or through ATM. The main reason for non-acceptance of payment using credit card is the merchant charge levied by credit card companies which may not be acceptable to taxpayers. </font></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Single return for IT and WT. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wealth tax has since been abolished. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The number of taxpayers should be considerably more than it is at present. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Various Reports have indicated that the taxpayer base is commensurate with the current stage of development of the economy particularly considering that there is no income tax on agricultural income. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxpayers keep waiting for amnesty schemes </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no proposal for any tax amnesty. </font></td>
</tr>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Timely clarificatory circulars can substantially reduce disputes and litigation. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is an on-going process. </font></td>
</tr>
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<td colspan="2" valign="top"><div align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">CBEC Reply </font></strong></div></td>
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<td valign="top"><div align="center"><font color="#0000FF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TARC Recommendation </font></strong></font></div></td>
<td valign="top"><div align="center"><font color="#0000FF"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Status </font></strong></font></div></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Disputes must get resolved in the times lines as mentioned in the respective enactments. The law should also prescribe the consequences of not adhering to the time lines, which would be that the case in question would lapse in favor of the taxpayer. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The suggestion that cases should lapse for delay in adjudication cannot be accepted because in that case the parties will get the matters delayed in the course ?of adjudication to get benefit of this provision. [<font color="#FF0000">The Bombay High Court in the case of Lanvin Synthetics Pvt. Ltd. <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA0OTQx" target="_blank">2015-TIOL-1668-HC-MUM-Cus</a></strong> quashed a Show Cause Notice that was lying un-adjudicated for 17 years</font>.] </font></td>
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<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An easier and simplified scheme should be introduced for service exporters. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 187/6/2015-ST dated 10.11.2015 lays down a scheme for speedy dispersal of pending refund claims of exporters of services under Rule 5 of the CENVAT Credit Rule, 2004. </font></td>
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<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Departmental manuals should be annually updated and put up on the website for easy downloading by both taxpayers and tax officers. </font></td>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Already such manuals have been developed and placed on the CBEC website. [<font color="#FF0000">Except, of course, that the Central Excise Manual of CBEC's Instructions- Supplementary Manual is eleven years old</font>] </font></td>
</tr>
</table>
<p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT comments are indicated in Red. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Selection of Special Public Prosecutors (SPPs) for handling CBEC cases </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> order to streamline the process for selection of SPPs for handling CBEC cases before the Subordinate Courts/Courts of Session and High Court, the Board has come out with the following procedure effective from 01.03.2016 - </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <strong>concerned</strong> Chief Commissioner will assess the number of SPPs required for prosecution/criminal cases of CBEC in his Zone. While deciding the number of SPPs in the Zone, the requirement of cases of the DGRI/DGCEI will also be taken into consideration. In case there is more than one Chief Commissioner in a Zone, the Chief Commissioner of Customs, will be the nodal authority. In case there is more than one Chief Commissioner of Customs in a Zone, the Chief Commissioner of Customs-Zone-1 will be the nodal authority. This vacancy position will then be circulated to all the Commissioners. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The first paragraph itself is a telling story of how a simple administrative function of appointment of SPP can manifest itself into a <em>hydra headed</em> jurisdictional superiority issue. The second paragraph entailing the ‘procedure for engagement' aggravates this modality of appointment by constituting a Committee to assess the applicants' expertise in handling criminal/prosecution matters and their suitability to represent the cases of the Department before the various judicial <em>fora</em>. A performance review is also envisaged at the end of the financial year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The<font color="#FF0000"><em><strong> concerned </strong></em></font>Chief Commissioner/Commissioner is more <em><strong>concerned</strong></em> about success of the Revenue cases before the Courts for he does not want to hear the oft repeated remark -<font color="#CC3300"><em> the case has no legs to stand!</em></font></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNDc=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction Dated: February 29, 2016</font></strong></a></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 today. The USD is 68.00 Rupees for imports and 66.95 Rupees for exports. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNDY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 36/2016-Cus (NT)., Dated: March 03, 2016 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Structured Infrastructure Cess </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> following is the content of Paragraph 153 of the Finance Minister's speech while presenting the Budget on 29.02.2016 - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">153. The pollution and traffic situation in Indian cities is a matter of concern. I propose to levy an infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clause 159 of the Finance Bill, 2016 read with the Eleventh Schedule provides for imposition of Infrastructure Cess on all goods falling under heading 8703 of the CETA, 1985 at the rate of 4% and this comes into immediate effect on account of the declaration made under the Provisional Collection of Taxes Act, 1931. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The JS (TRU-I) letter <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=tru_letter/tru-1-2016.htm" target="_blank">F.No. 334/8/2016-TRU</a></strong> dated 29.02.2016 mentions - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4) <strong>Infrastructure</strong> Cess is being levied on motor vehicles, of heading 8703, as under: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc - 1% </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc - 2.5% </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) Other higher engine capacity motor vehicles and SUVs and bigger sedans - 4%. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Three wheeled vehicles, Electrically operated vehicles, Hybrid vehicles, Hydrogen vehicles based on fuel cell technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance<strong> will be exempt from this Cess</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No credit of this Cess will be available, and credit of no other duty can be utilized for payment of this Infrastructure Cess. </font></p>
<p align="justify"><font color="#993300" size="2" face="Verdana, Arial, Helvetica, sans-serif">[Please note serial no. (a) has gone missing - MS word to blame!]</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Be that as it may, in terms of section 5A(1) of CEA, 1944 read with sub-clause (3) of clause 159 of the Finance Bill, 2016, Notification <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzMzA=" target="_blank">1/2016-Infrastructure Cess</a></strong> was issued on 1st March 2016 and the same has prescribed Nil rate as well as rates of 1%, 2.5% to goods falling under heading 87.03 subject to satisfying some conditions against certain entries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods of heading 87.03 not covered within the ambit of any of the ten entries to the notification would attract 4% Infrastructure Cess and these would be diesel driven vehicles of engine capacity exceeding 1500 cc. </font></p>
<p><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"> <a href="mailto:vijaywrite@tiol.in" target="_blank"><strong>vijaywrite@tiol.in </strong></a></font></p>
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