TIOL-DDT 392 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 392</title> </head> <body> <p > <b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 392</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 26 06 2006<br> Monday </font></b></p> <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">India to refund 625 million rupees of excise duty to Bhutan</font></b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government of India has agreed to pay the Bhutanese government an excise return of Nu.625 million for imports in 2003 from India by July this year. The Ngultrum (Nu) has the same value as the Indian rupee which circulates at par with it.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The finalised minutes of the excise return was signed between the director, Department of Revenue and Customs, Sangay Zam, and the director general of Inspection ,Customs and Central Excise, India, Mr. B K Gupta inThimphu.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Together with the agreed returns of 2003, the excise team from India also agreed to pay Nu 3.8 million out of the refund claim of Nu. 7 million that was under verification for the calendar year 2002. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 2003 refund amount is the highest so far. Bhutan imported goods worth Nu 10.2 billion in 2003, up from Nu 7.6 a year before. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The refund amounts to seven percent of the total revenue and 16 percent of the indirect tax revenue of Bhutan.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Almost all manufactured goods imported by Bhutanese traders from India are levied excise duty ranging from 0 to 16 percent. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, petroleum products lead the import list fromIndia. Other major imported products were rice, vehicles and machineries.. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The excise refund arrangement is based on the free trade and commerce agreement between Bhutan and India. </font></p> <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Interest on delayed refunds – catch 22?</font></b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise department is very fussy about interest. If you pay the duty a little late, they will pounce on you for interest. To be fair to them, the law provides for interest when they delay your refunds – though the rate is less and the time is short, it is a fact that they are bound to pay you interest. Sometime back the Board had circulated a missive that the interest payable for delayed refund will be recovered from the officers concerned. This was obviously meant to alert the staff to the need of granting the refund promptly. What happens when the courts order refund with interest and the interest to be recovered from the staff? What will happen if the interest runs into Crores, which cannot be recovered from the salaries of the officers for a few decades? </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What happens when huge interest is to be paid? For fear of recovery from the staff, the department will not give the refund at all and fight the case all the way up to the Supreme Court and by the time the number of officers responsible for the delayed refund will run into hundreds and no responsibility can be fixed and no recovery made. We report one such case today where the refund is 10 Crores!</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>But is the officer delaying the refund doing a service to the department? </b>The interest payable on delayed refund is 6%. Certainly the government can earn more than 6% on the money retained (illegally). So the officer delaying the refund is actually doing a fiscal service to the department and he should be rewarded instead of punishing him with recovery of interest. Please see our Guest Column today for an interesting article on the subject.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly our Audit and Preventive groups who force the assessees to make spot payment of the disputed duty are doing a great disservice to the department. If the assessee does not make that spot payment, he can be made to pay interest at 13% with a mandatory penalty equal to the duty. The officers who force spot payments are spoil sports who ruin the cause of government revenue and so deserve to be punished. Strange are the ways of the government – the one who saves money is punished and the one who squanders it away is appreciated. Government business is no business. </font></p> <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Export of red sanders wood allowed for two months</font></b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“As per the export policy, export of “Wood and wood products in the form of logs, timber, stumps, roots, bark, chips, powder, flakes, dust, and charcoal other than salon timber made exclusively out of imported logs/timber” is prohibited and so no export is permitted. Now the policy is amended to relax the prohibition relaxed for a period of two months with effect from 7th March, 2006 to allow export of 885.14 MT of A, B, C and D grades of Red Sanders Wood, in the form of log obtained from the Government of Andhra Pradesh through auction.” This was as per DGFT NOTIFICATION NO. 55 (RE- 2005 )/2004-2009, Dated: March 27, 2006. Now this period is extended by one month with effect from 22.06.2006</font></p> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2006/dgft06not014.htm">DGFT NOTIFICATION NO. 14 (RE-06)/2004-2009, Dated: June ,22 2006</a></u></font></p> <div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Export obligation – Advance Licence – period is 24 months</font></b> </font></div> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has clarified that the initial Export Obligation period for Advance Licences issued during the period 1.4.2004 to 31.8.2004, except in case of supplies under Advance Licence for Deemed Exports/Advance Licence to the projects/turnkey projects in India/abroad where the export obligation must be fulfilled during the contracted duration of execution of the project/turnkey project, shall be 24 months. The licence holders may present their licences to the concerned Regional Authorities who may take necessary action without insisting on any additional documents/fee etc.</font></p> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn023.htm">PUBLIC NOTICE NO. 23 (RE-2006)/2004-09, Dated : June 20, 2006 </a></u></font></p> <div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">One time exemption to be valid till 21.07.2006</font></b> </font></div> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The one time exemption given to red sanders was to be valid till a period of 2 months from 7th March, 2006 as per DGFT PUBLIC NOTICE NO. 94 (RE-2005)/2004-2009, Dated: March 27, 2006. Now it will be applicable for a period of one month from 22.06.2006</font></p> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn025.htm">PUBLIC NOTICE NO. 25 (RE-2006) 2004-2009,Dated: June, 22 2006 </a></u></font></p> <div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">CBI seeks Speaker’s permission to prosecute Jayalalithaa</font></b> </font></div> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Amma’s troubles have started. In the “winner take all” political system, we have, the opposition leaders are kept busy fighting court cases and investigations by a host of agencies until they come back to power and “give ‘em all back” with renewed vigour. While in power most politicians don’t imagine their days ahead when they will be in the opposition. Now it seems the CBI has requested for sanction from the Tamil nadu Speaker to prosecute Amma in a 10-year-old case pertaining to Rs 2-crore gifts allegedly received by her from those she later favoured. The case was registered in 1996 on a complaint from the Income Tax department.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the allegation is that MADAM received 89 demand drafts worth Rs 2 crore drawn on various banks in Tamil Nadu on her birthday which she declared to the IT department. The investigations revealed that some of the persons who gave the drafts were fictitious and those who could be identified were said to have received political favours from her. Bad days are ahead for Amma.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a young lady of Niger<br> Who smiled as she rode on a tiger;<br> They returned from the ride<br> With the lady inside,<br> And the smile on the face of the tiger. </font> <p></p> <p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p> <p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>