TIOL-DDT 397 · the untouched capture
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<p > <b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
397</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
03 07 2006<br>
Monday</font></b></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Service Tax on Goods
transport – DGST confirms withdrawal of controversial letter. </font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is more than a year since we broke the story
of the DGST’s controversial letter not to allow abatement to manufacturers paying
Service Tax on goods transport. Even after we confirmed several times that the
DGST had withdrawn his circular, the field officers were not prepared to accept
the withdrawal and thousands of Show Cause Notices have been issued all over
the country. While the Chief Commissioners were prompt in circulating the DGST’s
first missive, they ignored his second letter withdrawing the first one.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now finally the DGST has clarified that he
has indeed withdrawn the letter. In his letter F.NO.V/DGST/43-GTO/02/2005/2745,
dated 3<sup>rd</sup> April, 2006, (a copy of which is available with TIOL),
Mr. Sanjay Pant, Additional Director, DGST informed the Chief Commissioners
that the letter has indeed been withdrawn. The text of his letter is reproduced
here.</font></p>
<table width="100%" border="1" cellspacing="0" cellpadding="3">
<tr>
<td><p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sub:-</strong> Applicability
of Notification No.32/2004-SERVICE TAX dated Vis-a-Vis Notification No.35/2004-ST
dated 03.12.2004-Objection raised by CERA on the issue-</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Several references are received on the
above issue. This Directorate had issued a clarification vide letter
of even No. dated 30.3.2005, that the benefit of Notification No.32/2004-ST
dated 03.12.2004 is not available in cases where the provision of Notification
No.35/2004-ST dated 03.12.2004 are applicable. However said letter dated
30.03.2004 of this office had been withdrawn by this Directorate vide
letter of even No. dated 11.04.2005 (copy enclosed.)</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is for kind information again.</font></p>
<p align="right" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Yours faithfully,<br>
(SANJAY PANT)<br>
ADDITIONAL DIRECTOR</strong></font></p></td>
</tr>
</table>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Encl: As above</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just look at the amount of damage that one
man could cause by his irresponsible letter. Even after a whole year the issue
is refusing to die and is taking new dimensions. Now the CAG has picked up the
point and because of their objection, at least 15,000 Show Cause Notices are
floating around. This one letter of the DGST must have cost the nation at least
30 Crores rupees with which we could have bought 60 Crores kgs of rice, enough
to feed all Indians for a day. The letter had eaten up one day’s food of the
whole nation. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board which spends so much money on advertising
the need to pay Service Tax should advertise the fact that the DGST’s letter
does not exist and that abatement is available to all and should immediately
order withdrawal of all Show Cause Notices issued consequent to the mischievous
letter and the subsequent audit objection..</font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Tariff values –steep
hike in brass scrap and marginal increase for others</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While there is a marginal increase in the tariff
values of palm oil, there is a 13% increase in brass scrap. The Tariff value
for Crude Soyabean Oil has been reduced. The old and new tariff values are
given below.</font></p>
<table width=450 border=1 align="center" cellpadding=3 cellspacing=0>
<tr>
<td width=50 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>S.No.</strong></font></p></td>
<td width=108 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter heading
or sub-heading</strong></font></p></td>
<td width=246 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Description of goods</strong></font></p></td>
<td width=73 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff value<br>
US$<br>
(Per Metric Tonne)</strong></font></p></td>
<td > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New tariff values</strong></font></p></td>
</tr>
<tr>
<td width=50 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1)</strong></font></p></td>
<td width=108 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(2)</strong></font></p></td>
<td width=246 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(3)</strong></font></p></td>
<td width=73 > <p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(4)</strong></font></p></td>
<td > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5</strong></font></p></td>
</tr>
<tr>
<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">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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">424 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">428 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">439 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">443 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">432 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">434 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">446 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">450 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">449 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">453 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">448 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">452 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">542 </font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">529 </font></p></td>
</tr>
<tr>
<td width=50 > <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 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3576</font></p></td>
<td valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4055</font></p></td>
</tr>
</table>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_074.htm">NOTIFICATION
NO. 74/2006-NT-Cus., Dated: June 30, 2006</a></u></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">National Highway Authority
and Rural Electrification Corporation Bonds notified as 'long-term specified
asset’</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Long
term capital gains are exempted if they are invested in 'long-term specified
asset’ for a period of three years. Now the Government has notified the bonds
for an amount of Rupees one thousand five hundred crores (redeemable after three
years) to be issued by the National Highways Authority of India and the Rural
Electrification Corporation during the financial year 2006-07 as 'long-term
specified asset’</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not0142.htm">NOTIFICATION
NO. 142 </a></u><b><u>and </u></b><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not0143.htm">143/2006,
Dated: June 29, 2006</a></u></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Securities Transaction
Tax (STT) – big brother wants to watch- scrutiny guidelines issued</font></b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has instructed that to have detailed examination of all
the returns filed in respect of taxable securities transactions for the financial
year 2004-05, all such returns should be picked up for detailed investigation
(scrutiny) under provisions of section 102 of the Finance (No. 2) Act, 2004.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2006/instruct0603.htm">INSTRUCTION
NO. 3/2006, Dated : May 5, 2006 </a></u></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Wealth Tax – also under
scrutiny</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While there is a general impression that virtually
there is no wealth tax in India, CBDT is lamenting that wealth tax collections
have not improved and is stagnant at about Rs 145 crores annually. Board’s further
agony is that the number of wealth tax assessees is showing a continuous decline
over the years and is presently at about 1 lakh. CBDT apparently believes that
a large number of assessees are either not filing their returns or not disclosing
true wealth.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So now wealth is also under scrutiny. Board
wants:-</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ All Income tax cases which are presently
being scrutinized should also be examined from the wealth tax angle</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ out of these Income tax cases under scrutiny,
notice under section 16(2)/16(4)(i) of the Wealth Tax Act should be issued in
suitable cases after examination.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ if CCIT/DGIT on his own motion or on the
matter having been brought to his notice by an authority below, is satisfied
that a Wealth Tax case need to be taken up for scrutiny, the CCIT/DGIT may direct
the Assessing Officer to take up the case for scrutiny.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Should the government really bother about
collecting this 145 Crores?</b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2006/instruct0604.htm">INSTRUCTION
NO. 4/2006, Dated : May 16, 2006</a></u></font></p>
<p align="center" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Service Tax rate low?</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While many of us feel that the 12.24% Service
Tax is a heavy burden, the FM’s adviser, Parthasarathi Shome does not think
so. Addressing a meeting of the FICCI, he said that taxation on goods amounted
to about 30% (16% excise duty plus 12.5% VAT on a value that included excise),
while that on services was a mere 12.24%. He said that internationally, the
tax on goods and services was more or less equal. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Shome wanted the professionals and consultants
to explain to assessee-customers the procedural reforms in central taxes so
that officials would not be able to exploit the latter's ignorance of the changes.</font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT
</font></p>
<p align="justify" ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></p>
<p align="justify" ><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>
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