TIOL-DDT 2803 · the untouched capture
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<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img width="300" hspace="5" border="0" align="right" height="148" alt="DDT in Limca Book of Records - Third Time in a row" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" /></a><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2803</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br /> 09 03 2016<br /> Wednesday</font></strong></p> <p align="center"><font color="#006600"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong>Vox Populi - Govt Bows to Public Opinion - Withdraws EPF Tax Proposal </strong></font></em></font></p> <p style="text-align: left;"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> his Budget Speech 2016, Finance Minister Arun Jaitley said,</font></p> <blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Measures for moving towards a pensioned society </em></font></strong></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">137. Pension schemes offer financial protection to senior citizens. I believe that the tax treatment should be uniform for defined benefit and defined contribution pension plans. I propose to make withdrawal up to 40% of the corpus at the time of retirement tax exempt in the case of National Pension Scheme. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">138. In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made after 1.4.2016. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">139. Further, the annuity fund which goes to the legal heir after the death of pensioner will not be taxable in all three cases. Also, we are proposing a monetary limit for contribution of employer in recognized Provident and Superannuation Fund of Rs.1.5 lakh per annum for taking tax benefit. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above paras 138 and 139 had created too much of excited debate and resentment. Now, the Government has reacted to public opinion and withdrawn these two paras. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Speaking in the Lok Sabha yesterday, the Finance Minister said, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some changes are proposed in the Finance Bill for the tax treatment of Recognised Provident Fund and NPS. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The purpose of proposed reform in tax regime is to encourage more number of private sector employees to go for pension security after retirement instead of withdrawing the entire money from the Provident Fund Account. Towards this objective, the Government has announced that 40 per cent of the total corpus withdrawn at the time of retirement will be tax exempt both under recognised Provident Fund and the National Pension Scheme. It is expected that the employees of private companies will place the remaining 60 per cent of the Corpus in Annuity, out of which they can get regular pension. When this 60 per cent of the remaining Corpus is invested in Annuity, no tax is chargeable. This means that the entire Corpus will be tax free, if invested in annuity. Only the periodic return on Annuity will be taxable. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Government in this Budget has also made another change which says that when a person investing in Annuity dies and when the original Corpus goes in the hands of his heirs, then again there will be no tax. The idea behind this mechanism is to encourage people to invest in pension products rather than withdraw and consume the entire Corpus after retirement. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The main category of people for whom EPF scheme was created are the members of EPFO who are within the statutory wage limit of Rs.15,000 per month. Out of around 3.7 crore contributing members of EPFO as on today, around 3.26 crore subscribers are in this category. For this category of people, there is going to be no change in any dispensation. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in EPFO there are other contributing members who have accepted EPF voluntarily and they are employees of private or public sector companies. At present, even this category of people can withdraw the whole amount without any tax liability. In the proposed amendment, there will not be any tax liability for such employee at the time of retirement if he contributes 60 per cent in any annuity product so that pension security can be created for him according to his earning capacity. However, if he chooses not to put any amount in annuity product, the exemption will be limited to 40 per cent. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A number of representations have been received from various sections of the society including Members of Parliament suggesting that this change will force people to invest in annuity products even if they are not willing to do so. The main argument is that the employees should have the choice of where to invest. Theoretically, such freedom is desirable but it is important for the Government to achieve policy objectives by the instrumentality of taxation. In the present reform, the policy objective is not to get more revenue but to encourage people to join the Pension Scheme. There are various other suggestions received which can also achieve the same policy objective of encouraging people to join the pension scheme. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the representations received, the Government would like to do a comprehensive review of this proposal and therefore I withdraw the proposal in paragraph 138 and 139 of my Budget Speech. The proposal of 40 per cent exemption given to NPS subscribers at the time of withdrawal remains. </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Amen! </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f2" id="f2"></a></font></strong></strong></em></font></em></strong></font><font color="#006600">Issue of Indian Currency Note- Foreign going vessels- CBEC Instructions </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Circular No. 51/99 dated 12.08.1999, CBEC had allowed Merchant Ship to carry Indian currency notes of Rs. 100/-denomination for disbursement of wages etc. on board of foreign going vessel, subject to the usual conditions prescribed by RBI. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Board has come to know that that revised guidelines issued by RBI has not prescribed any restriction on denomination of Indian currency, carried by an Indian traveller or Captain of a Ship. In the light of the revised RBI guidelines, Board has decided to withdraw the restriction on denomination of Indian currency imposed vide Circular No. 51/1999 dated 12.08.1999. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNjY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No.7/2016-Cus, Dated: March 07, 2016</font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f3" id="f3"></a></font></strong></strong></em></font></em></strong></font><font color="#006600">ST-3 Return Amended to include Swachh Bharat Cess </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Swachh Bharat Cess has entered the S.T-3 Return. Government has amended the Service Tax Rules to add Swachh Bharat Cess in the S.T-3 return. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNzM=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 20/2016- Service Tax., Dated: March 08, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f4" id="f4"></a></font></strong></strong></em></font></em></strong></font><font color="#006600">Anti Dumping Duty on Phenol </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed definitive anti dumping duty on phenol falling under tariff item 2907 11 10, originating in, or exported from the European Union, Singapore and Korea RP. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty imposed shall be effective for a period of five years </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNzA=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 06/2016-Customs (ADD)., Dated: March 08, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f5" id="f5"></a></font></strong></strong></em></font></em></strong></font><font color="#006600">Anti Dumping Duty on Polypropylene Continues...</font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE</strong> notification 119/2010-Cus., dated November 19th 2010, Anti-dumping duty on "<em>Polypropylene</em>" originating in, or exported from, Singapore was imposed for a period of five years beginning 30th July, 2009. Obviously, the five year period ended in July 2014 and everyone was caught napping.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the designated authority had initiated a review a day before the notification was to expire and he had requested for extension of the anti-dumping duty for a further period of one year. And it takes time for the giant wheels of the government machinery to move. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, by Notification No. 38/2014-Customs (ADD), dated the 13th August, 2014, they extended the life of the Notification till 29th July, 2015 - this was done 15 days after the death of the original notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This notification again died on 29.7.2015. But the Designated Authority has come to the conclusion that injury to the domestic industry is likely to continue in the event of cessation of anti dumping duty on imports of these goods from the non-cooperative producers or exporters from Singapore and has recommended imposition of the anti-dumping duty on the goods, originating in or exported from the Singapore. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has again imposed Anti Dumping Duty on this product with effect from 8.3.2016 for another five years. But there was no anti dumping duty on this product from 30.7.2015 to 7.3.2016. Why? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNzE=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 07/2016-Customs (ADD)., Dated: March 08, 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f6" id="f6"></a></font></strong></font><font color="#006600">Measures for Reducing Litigation - Monetary Limits for Filing IT Appeals </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Circular No.21/2015, dated 10.12.2015, the CBDT had instructed that Department should not file appeals in ITAT and High Courts if the tax effect does not exceed Rs. 10 lakhs and Rs. 20 lakhs respectively. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, there is a doubt if these instructions would apply to cross objections filed by the Department before the ITAT under section 253(4) of the Income-tax Act and to references to the High Court under sections 256(1) and 256(2) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT clarifies: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. ITAT </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. The monetary limit of Rs. 10 lakhs for filing appeals before the ITAT would apply equally to cross objections under section 253(4) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Cross objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/ not pressed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. Filing of cross objections below the monetary limit may not be considered henceforth. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. High Court: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. Similarly, references to High Courts below the monetary limit of Rs. 20 lakhs should be pursued for dismissal as withdrawn/ not pressed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. References below this limit may not be considered henceforth. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTkzNzI=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F.No.279/Misc./M-142/2007-ITJ(Part)., Dated: March 08 2016 </font></strong></a></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f7" id="f7"></a></font></strong></font></strong></strong></em></font></em></strong></font><font color="#006600">What happened to Education Cess? </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Question was asked in the Rajya Sabha</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Minister of FINANCE be pleased to state: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) the funds collected through education cesses, State-wise and year-wise since 2000; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) the intended beneficiary projects of this cess; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) the amount and proportion of these funds that were utilised, year-wise since 2000; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) the reason why the funds collected through dedicated cesses remain unutilised; and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) the steps taken to immediately allocate and disburse funds for development of education in India? </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, the MoS, Finance replied that: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. The Primary Education Cess was introduced in Financial Year 2004-05. The Secondary & Higher Secondary Education Cess was introduced in the Budget, 2007-08. The state wise information of Education Cess is not maintained centrally. (He gave the year-wise collection). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) to (e): The information is being collected and will be laid on the Table of the House. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a name="f8" id="f8"></a></font></strong></strong></em></font><font color="#006600">Starred Questions - and Un-starred Ones in Parliament </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(i) STARRED Questions - </strong> A Starred Question is one to which a member desires an oral answer from the Minister in the House and is required to be distinguished by him/her with an asterisk. Answer to such a question may be followed by supplementary questions by members. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(ii) Unstarred Questions -</strong> An Unstarred Question is one to which written answer is desired by the member and is deemed to be laid on the Table of the House by Minister. Thus it is not called for oral answer in the House and no supplementary question can be asked thereon. </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 <a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in </strong></a></font></p>