TIOL-DDT 319 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
319</font><br>
09 03 2006<br>
Thursday</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No
Service Tax on use of ATMs – clarification through PIB</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When
the excited boys of our editorial team wanted to do a piece on Service Tax on
ATMs immediately after the budget, I for one was not impressed. There is no
tax on the ATM user and for card services, users are already taxed. What’s
there to write about? But our boys were persistent. They went out and surveyed
for a solution and surprisingly they found that there was tremendous ignorance.
Revenue officials and Bankers were more confused than ordinary, worried bank
card users. There was a terrible fear that every ATM transaction is going to
be taxed and as a percentage of the money you withdraw. Our teams told the worried
users that there was no such tax but people really did not believe our boys.<br>
In his report, our Senior Correspondent <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3386"><b>wrote
</b></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Whatever
the case may be it seems that confusion is prevailing among the stakeholders
and there is a need that the government should come out with a clarification.
Especially the common man who doesn’t understand the fine-prints of the
budget documents will not believe if TIOL team says that there is no need of
worry and there will be no additional cost on the services they are availing
from the banks.</b><br>
<br>
His parting shot was,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>So what’s new? But people and bankers are worried. The Government should
clarify the position soon.</b><br>
<br>
We carried this report on 2nd of March. We are happy to report that the Government
has indeed come out with a clarification that Service Tax is not proposed to
be levied on use of cards in ATMs. May be for wider coverage, the government
has released this clarification through PIB. The clarification reads as follows
:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<i>Services provided in relation to Automated Teller Machine (ATM) operations,
maintenance or management is proposed to be brought under the levy of service
tax in the Finance Bill, 2006 vide section 65 (105) (zzzk) of the Finance Act,
1994. The term “Automated Teller Machine” is defined under
clause (9a) of Section 65 and the term “Automated Teller Machine operations,
maintenance or management service” is defined under clause (9b) of Section
65.<br>
<br>
A question has been raised as to whether the proposed levy of service tax will
have any impact on the holders of credit cards, debit cards, charge cards and
other payment cards who use ATM for withdrawal of cash.<br>
<br>
Service tax, under the proposed service, is not leviable for use of ATM by the
card holders. Service tax on the proposed taxable service is leviable
only if the services provided are in relation to operations, maintenance or
management of ATM and are outsourced by banks to third parties. Third
parties who provide services to banks in relation to ATM operation, maintenance
or management are covered under the category of the proposed service.
When ATMs are operated, maintained or managed by banks on their own, service
tax liability does not arise.<br>
<br>
It is, therefore, clarified that the proposed service under Section 65(105)(zzk)
of the Finance Act, 1994 will not result into any additional service tax liability
on the users of ATMs.</i></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>4% additional duty – certain exemption withdrawn</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
4% duty is still in news, now with the Government amending notification No.
20/2006 – cus to specify that the following goods are excluded from
the exemption from the additional duty. </font></p>
<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=514
style='width:385.15pt;mso-cellspacing:0cm;mso-padding-alt:2.25pt 2.25pt 2.25pt 2.25pt'>
<tr style='mso-yfti-irow:0;mso-yfti-firstrow:yes'>
<td valign=top style='padding:2.25pt 2.25pt 2.25pt 2.25pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'>28. </span><span style='font-size:
9.0pt;font-family:Arial;color:black'><o:p></o:p></span></p></td>
<td valign=top style='padding:2.25pt 2.25pt 2.25pt 2.25pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'>8525 20 </span><span
style='font-size:9.0pt;font-family:Arial;color:black'><o:p></o:p></span></p></td>
<td width=368 valign=top style='width:275.65pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'>Cellular Phones and Radio <span
class=SpellE>trunking</span> terminals</span><span style='font-size:9.0pt;
font-family:Arial;color:black'><o:p></o:p></span></p></td>
</tr>
<tr style='mso-yfti-irow:1;mso-yfti-lastrow:yes'>
<td valign=top style='padding:2.25pt 2.25pt 2.25pt 2.25pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'>17. <o:p></o:p></span></p></td>
<td valign=top style='padding:2.25pt 2.25pt 2.25pt 2.25pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8471
70 or <o:p></o:p></font></span></p>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'>8473 30<o:p></o:p></span></font><font size="2"><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'><o:p></o:p></span></font><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'><o:p></o:p></span></p></td>
<td width=368 valign=top style='width:275.65pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:Verdana;
mso-bidi-font-family:Arial;color:black'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
following goods, namely:-<br>
(a) Microprocessor for computer, other than<br>
motherboards;<br>
(b) Floppy disc drive;<br>
(c) Hard disc drive;<br>
(d) CD-ROM drive<br>
(e) DVD Drive;<br>
(f) USB Flash memory<br>
(g) Combo drive</font><o:p></o:p></span></p></td>
</tr>
</table>
<p align="justify"><b style='mso-bidi-font-weight:
normal'><u><span style='font-size:10.0pt;font-family:Verdana;color:blue'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_024.htm">NOTIFICATION
NO<span class=GramE>. <span style='mso-spacerun:yes'> </span></span>24 /2006-<span
class=SpellE>Cus</span>., Dated: March 6, 2006<o:p></o:p></a></font><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_024.htm"><font size="2"><o:p></o:p></font><o:p></o:p></a><o:p></o:p></span></u></b></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Biscuits
classification corrected</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Notification No. 2/2006 CENT specifies the abatement for MRP based value. In
the table sl No. 13 shows heading 19051920 as biscuits. What’s wrong with
it? Absolutely nothing except the fact that the Tariff does not contain any
such heading. Obviously somebody in the Board has noticed this and the notification
is amended to make the heading as 1905 90 20. Good correction indeed.<br>
<br>
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/excorrignt2.htm">CORRIGENDUM
in F.No.334/3/2006-TRU Dated: March 6, 2006</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Motor
Vehicles – exemption - it’s up to 7 persons, not 7 persons</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption
Notification No. 6/2006 Central Excise , in respect of vehicles mentions, “Motor
vehicles falling under heading 8703 for transport <b>of 7</b> persons, including
the driver” Now the Notification is amended to make it ‘of up to
7 persons’ instead of ‘7 persons’.<br>
<br>
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/excorrig6.htm">CORRIGENDUM
in F.No.334/3/2006-TRU Dated: March 6, 2006</a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
</font></p>
<P align=center><B><IMG height=62 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_txt.jpg" width=375></B></P>
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<TD><IMG height=67 hspace=5 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle vspace=5><B><I> Consensus
ad idem</I></B></TD>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>A meeting of the minds</b> – one of the essential requisites for a
valid contract<br>
<br>
When two parties to an agreement (contract) both have the same understanding
of the terms of the agreement. Such mutual comprehension is essential to a valid
contract. It is provable by the express provisions of a written contract, without
reference to any statements or hidden thoughts outside the writing. There would
not be a meeting of the minds if Bill Buyer said, "I'll buy all your stock,"
and he meant shares in a corporation, and Sam Seller said, "I'll sell all
my stock to you," and meant his cattle.<br>
<br>
It is only when all parties involved are aware of the formation of a legal obligation
is there a meeting of the minds.<br>
<br>
But this is one of the most misunderstood phrases by even eminent lawyers and
judges.<br>
Some right and some wrong use of the phrase</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Right:</b><br>
<br>
1. The theory of<b><font color="#663399"> ‘consensus ad idem’
applied by the Courts led to the proposition that an ‘implied agreement’
between the parties was, to have ‘agreed in facts’. ‘Reasonable
implication’ was not presumed, but ‘necessary implication’
was called for.</font></b> – HLL v Commissioner - 2003 (160) E.L.T. 806
(Tri. - Bang.)<br>
<br>
2. In the BSNL case we reported this week, </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2006/2006-TIOL-15-SC-CT-LB.htm">2006-TIOL-15-SC-CT-LB</a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">,
it was observed that”To constitute a transaction for the transfer of the
right to use the goods the transaction must have the following attributes:<br>
<br>
a. There must be goods available for delivery;<br>
<br>
b. There must be a <b>consensus ad idem</b> as to the identity of the goods;<br>
<br>
<b>Wrong</b><br>
<br>
In this regard, I may mention that it was the <b>consensus-ad-idem</b> of all
the High Courts in our country that in the context of stringent punishments
provided under the N.D.P.S. Act for the various offences, the mandatory provisions
were built in for the purpose of providing a total check over the unfettered
powers vested with the officers from implicating false persons ruthlessly. –
Madras High Court in 1994 (73) E.L.T. 281 (Mad.)<br>
<br>
But strangely a corrupt version of this phrase is popularly used. You can find
the phrase ad idem in many judgements. There is no such phrase. <b>“Ad
idem</b>" is a frequent misspelling of the Latin words ad diem meaning
"on a particular day" and, if used as an adjective, could mean "up
to date." The reason that lawyers miss this phrase, or misemploy it, is
not just because their spell check does not work but because idem is a legitimate
adverb in Latin. If the words AD IDEM are actually spelled that way, and are
not in fact a misspelling, then it means "to the same"<br>
<br>
<font color="#663399"><b>The law, as manipulated by clever and highly respected
rascals, still remains the best avenue for honourable and leisurely plunder.</b></font></font></p>
<p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b><i>(Gabriel Chevallier (1895-1969)</i></b> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6666">Until
tomorrow with more DDT and the budget<br>
<br>
Have a nice day.<br>
<br>
Mail your comments to</font></b> <a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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