TIOL-DDT 343 · the untouched capture
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<p align="justify" ><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
343</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>18
04 2006<br>
</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Tuesday</b></font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> FICCI,
CII, ASSOCHAM and several trade associations liable to Service Tax as club or
association?</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes!
According to the Hyderabad Chief Commissioner. He clarified this in a recent
RAC meeting. FAPCCI – Federation of Andhra Pradesh Chambers of Commerce
and Industry - the apex body for traders and industries in Andhra Pradesh is
a Service Tax assessee in Hyderabad. FAPCCI guides and advises the industry
and trade but FAPCCI itself was in doubt whether they were liable to pay Service
Tax and they asked this question in the RAC meeting. The Chief Commissioner
clarified that </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">FAPCCI,
vide letter dated 18.10.2005 claimed that their association does not fall under
the category of clubs and association as they are rendering service of a nature
of charity and are not formed with a profit motive. They enclosed opinions obtained
from certain experts.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">FAPCCI
in an association registered under Companies Act with an objective to promote
commerce, art, service etc., and the profits, if any, is applied for promoting
the said objectives.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Association is not the association established or constituted under a statute
and hence not excluded from the clause 25(a) of Section 65 of the Finance Act
under club or association services. This club is also not one of the natures
formed for promotion of agriculture, horticulture or animal husbandry or any
association described in CBEC circular F.No. Bl/6/2005-TRU dated 27.07.2005
for exclusion from levy of service tax. It is evident that the profit earned
is used for promotion of its objectives. They are providing services, facilities
or advantages for a consideration/subscription and hence the amount is taxable
under sub-clause (zzzc) of Section 65(105) of the Act. The objective of Service
Tax is to tax the gross amount charges less deductions permitted under Section
67, if any. It is not bothered about profit or loss in the service.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
reply to a query it was also clarified that the service tax is payable on the
subscription fee paid by the members of the association whether or not they
have availed the services of the association.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
clarification makes not only FAPCCI liable to pay Service Tax but also other
trade organisations like local chambers of commerce, export promotion associations
etc under the category of clubs or associations.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
is learnt that the big three FICCI, CII and ASSOCHAM are not paying Service
Tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per the Act, “club or association” means any person or body of persons
providing services, facilities or advantages, for a subscription or any other
amount, to its members, but does not include— </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
any body established or constituted by or under any law for the time being in
force; or</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii)
any person or body of persons engaged in the activities of trade unions, promotion
of agriculture, horticulture or animal husbandry; or</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii)
any person or body of persons engaged in any activity having objectives which
are in the <b>nature of public service and are of a charitable</b>, religious
or political nature; or</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)
any person or body of persons associated with press or media;</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will
not FAPCCI, FICCI etc, come under Category (iii) above? Under the Income Tax
Act, are they not considered as charitable organisations?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DDT</b>
spoke to a former President of FAPCCI (who is himself a leading tax analyst)
and he was of the firm opinion that FAPCCI was not liable to pay Service Tax
but they were paying it because, being a reputed public organisation, they did
not want to be charged with evading taxes and attracting penal consequences.
He said a holistic approach has to be taken and the tax was meant to be on commercial
clubs and not public bodies like FAPCCI. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Surprisingly
the DGST has not yet given any clarification on this issue. Does the Hyderabad
Chief Commissioner’s decision have All India effect or will it be that
the AP Chamber is liable to pay Service Tax and the Karnataka Chamber is not?
The Board should clarify at least for the sake of uniformity. </font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Tariff
Value of Brass scrap increased</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While
there is an increase in the tariff values of brass scrap, the tariff values
for oil items have been marginally reduced. The existing and the new rates are
as follows</font></p>
<div align="justify">
<table width=450 border=1 align="center" cellpadding=3 cellspacing=0 id=table1>
<tr align="center" valign="top">
<td width=50 align="center" valign="top" >
<p ><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> S.No.</font></strong></p></td>
<td width=108 >
<p ><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter
heading or sub-heading</font></strong></p></td>
<td width=246 >
<p ><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description
of goods</font></strong></p></td>
<td width=73 >
<p ><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff
value<br>
US$<br>
(Per Metric Tonne)</font></strong></p></td>
<td >
<p ><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New
tariff values</font></strong></p></td>
</tr>
<tr align="center" valign="top">
<td width=50 >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1)</font></p></td>
<td width=108 >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2)</font></p></td>
<td width=246 >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3)</font></p></td>
<td width=73 >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4)</font></p></td>
<td >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5)</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
10 00</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Palm Oil</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">430</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">420</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 10</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD
Palm Oil</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">445</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">435</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 90</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others
– Palm Oil</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">438</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">428</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
10 00</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Palmolein</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">452</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">442</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 20</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD
Palmolein</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">455</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">445</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511
90 90</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others
– Palmolein</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">454</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">444</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1507
10 00</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude
Soyabean Oil</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">524</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">518</font></p></td>
</tr>
<tr>
<td width=50 align="center" valign="top" >
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8</font></p></td>
<td width=108 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7404
00 22</font></p></td>
<td width=246 > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Brass
Scrap (all grades)</font></p></td>
<td > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2283</font></p></td>
<td valign=top > <p align=center style='text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2327</font></p></td>
</tr>
</table>
</div>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_045.htm">Notification
No 45/2006-Cus., (N.T.), Dated: April 17, 2006</a></u></strong></font></p>
<p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Daily
wage workers in Government have no right to be permanently absorbed- land mark
Supreme Court judgement</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You
must have seen a group of very active, obedient, humble, dynamic, ready- to
–obey- any- command workers in the government offices. They are the contingent
employees hired on a daily basis. The Government virtually runs because of them.
The government driver has rights and can refuse to drop the Secretary to the
office, the peon can sit in a corner and have his beedi, not bothering to work,
the typist can refuse to type more than three pages a day, but still the government
machinery runs – Its not a miracle but it is the daily wage contingent
who ensures that the wheels of governance are in motion. Peons, drivers, data
entry operators and all kinds of lower levels of employees in several departments
are on a daily wage basis. Some daily wage workers continue for years and decades,
still without any job guarantee, without any perks and whither away without
any retirement benefits. Sometimes they are simply thrown out. And then they
approach the courts. The High Courts by and large were very sympathetic towards
them and in many cases they secured beneficial orders. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
then can government jobs be distributed like this? And can it be allowed through
the back door instead of a regular selection? While every body has sympathy
for the daily wager and wants him to be given a permanent job, nobody thinks
about the other citizens who were eligible to apply for these jobs if there
was a proper selection. Whose interests are to be protected? One who has already
put in a step or one who could have but did not know about it? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Supreme Court in a landmark judgement, ending the long drawn out controversy
on the subject, emphatically held that temporary employees have no right to
be permanently absorbed and government jobs are to be filled by a due process
of selection and no by confirming temporary employees. See <b><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3591">Breaking News</a></b>
for more details. </font></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> Abet</I></B></TD>
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<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><i>to
encourage another to commit a crime. </i></b>This is also an offence</font></p>
<p align="left" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Smuggling
- Abetment of - Person not qualified as CHA helping exporter in completing customs
formalities in transaction found to contain concealed foreign currency - </a>Held
: He had knowledge about the transaction and was liable to penalty.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><i><u3:p><font color="#663399">Blessed
are the meek for they shall inherit the earth - less 30 percent inheritance
tax.</font></i></b></font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Until
tomorrow with more DDT </b></font> <p align="justify" ><b><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day. </font>
</b>
<p align="justify" ><b><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font></b> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a
href="mailto:vijaywrite@taxindiaonline.com"><b>vijaywrite@taxindiaonline.com</b></a></div></font>
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