TIOL-DDT 412 · the untouched capture
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<p > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
412</font><br>
24 07 2006<br>
Monday</b></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
Tax – conditions for infrastructure facility</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If
you thought excise notifications were confusing, look at this. As per Section
36 of the Income Tax Act, there is a deduction for certain infrastructure facilities.
Now how does one qualify for this? It is eligible if </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(a) it is owned by a company registered in India or by a consortium of such
companies or by an authority or a board or a corporation or any other body established
or constituted under any Central or State Act; </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(b) it has entered into an agreement with the Central Government or a State
Government or a local authority or any other statutory body for (i ) developing
or ( ii ) operating and maintaining or ( iii ) developing, operating and maintaining
a new infrastructure facility <b>similar in nature</b> to an infrastructure
facility <b>referred to in the Explanation to clause ( i ) of sub-section (4)
of section 80-IA; </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(c) it has started or starts operating and maintaining such infrastructure facility
on or after the 1 st of April, 1995.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
how does one know what is similar to the facility referred in Section 80 IA?
What is referred there is:-</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
the purposes of this clause, infrastructure facility means</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(a)
</i> a road including toll road, a bridge or a rail system;</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(b)
</i> a highway project including housing or other activities being an integral
part of the highway project;</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(c)
</i> a water supply project, water treatment system, irrigation project, sanitation
and sewerage system or solid waste management system;</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(d)
</i> a port, airport, inland waterway or inland port;</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is
it really necessary to make our laws so complicated? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not0187.htm">NOTIFICATION
NO. 187/2006, Dated: July 20,2006 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Infrastructure
facility; notified.</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
government has notified the following public facilities as infrastructure facility
for purposes of Section 36.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(1) Inland Container Depot and Container Freight Station notified under the
Customs Act, 1962 (52 of 1962) </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(2) Mass Rapid Transit system </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(3) Light Rail Transit system </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(4) Expressways </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(5) Intra-urban or semi-urban roads like ring roads or urban by-passes or flyovers
</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(6) Bus and truck terminals </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(7) Subways </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(8) Road dividers </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(9) Bulk Handling Terminals which are developed or maintained or operated for
development of rail system </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(10) Multilevel Computerised Car Parking. </font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not0188.htm">NOTIFICATION
NO. 188/2006, Dated: July 20,2006</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption
for Poultry incubators and brooders</b></font></p>
<p align="justify" style='background:white'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Government
has exempted </strong>Poultry incubators and brooders in excess of 5%. That
is the effective rate of duty is 5%.</font></p>
<p align="justify" ><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_076.htm">NOTIFICATION
NO. 76/2006-Customs, Dated: July 20, 2006 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>What
is duty? DGFT clarifies</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
DGFT has received representations asking for clarifications on the meaning of
the <b>duty</b> as it appears in the policy and procedures in the following:-
</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">where
import of Agricultural Products listed in Chapter 1 to 24 of ITC (HS) Classification
of Export and Import items except the following were allowed: </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
Garlic, Peas and all other Vegetables with a <b>Duty</b> of more than 30% under
Chapter 7 of ITC (HS) Classification of Export and Import items. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii)
Coconut, Areca Nut, Oranges, Lemon, Fresh Grapes, Apple and Pears and all other
fruits with a <b>Duty</b> of more than 30% under Chapter 8 of ITC (HS) Classification
of Export and Import items. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii)
All spices with a <b>Duty</b> of more than 30% under Chapter 9 of ITC (HS) Classification
of Export and Import items (except Cloves) in addition to other items listed
in the Para . </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT
now clarifies that duty in these cases means only the <b>‘ Basic Customs Duty'</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2006/dgft06cir013.htm">POLICY
CIRCULAR NO. 13 ( Re-2006)/2004- 09,Dated : July 20, 2006 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Soyabean
oil – import restrictions temporarily waived.</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per Condition No. 18 of Chapter 1A (General Notes Regarding Import Policy),
</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import
of Genetically Modified Food, Feed, Genetically Modified Organism (GMOs) and
Living Modified Organisms (LMOs) will be subject to the following conditions:</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(a) The import of GMOs / LMOs for the purpose of (i) R & D; (ii) Food; (iii)
Feed; (iv) Processing in Bulk and (v) For Environment release will be governed
by the provisions of the Environment Protection Act, 1986 and Rules 1989.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(b) The import of any Food, Feed, raw or processed or any ingredient of food,
food additives or any food product that contains GM material and is being used
either for Industrial production, Environmental release, or field application
will be allowed only with the approval of the Genetic Engineering Approval Committee
(GEAC).</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(c) Institutes / Companies who wish to import Genetically Modified material
for R & D purposes will submit their proposal to the Review Committee for
Genetic Modification (RCGM) under the Department of Bio-Technology. In case
the Companies / Institutes use these Genetically Modified material for commercial
purposes, approval of GEAC is also required.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(d) At the time of import all consignments containing products which have been
subjected to Genetic Modification will carry a declaration stating that the
product is Genetically Modified. In case a consignment does not carry such a
declaration and is later found to contain Genetically Modified material, the
importer is liable to penal action under the Foreign Trade (Development and
Regulation) Act, 1992.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the DGFT has notified that the above conditions will not apply to import of
<b>Soyabean Oil </b>till 31.03.2007. </font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2006/dgft06not021.htm">NOTIFICATION
NO. 21 (RE-2006)/ 2004-2009,Dated : July 20, 2006 </a></font></p>
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<TD><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000FF"><em>ex</em></font></b><em><font color="#0000FF"><b>
abundanti cautela </b></font></em><strong>out of an abundance of
caution</strong></font></TD>
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<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
++ Where there exists a doubt as to the chargeability of income to tax, there
also tax is to be deducted at source <b><i>ex abundanti cautela- </i>from the
ITAT judgement we are carrying today.</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
++ The Explanation added to Rules 9 and 49 of the Rules were introduced <b><i>ex
abundanti cautela</i></b> apparently with the object of overcoming the effect
of the rulings of <st1:City w:st="on">Delhi and other High Courts.- Karnataka
High Court </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
++ It is not uncommon to find out that the legislature sometimes, with a view
to making its intention clear beyond doubt, uses language <b><i>ex abundanti
cautela</i></b><i> </i>though it may not be strictly necessary and even without
it the same intention can be spelt out as a matter of judicial construction
and this would be more so in case of subordinate legislation by Executive. The
officer drafting a particular piece of subordinate legislation in the Executive
Department may employ words with a view to leaving no scope for possible doubt
as to its intention or sometimes even for greater completeness, though these
words may not add anything to the meaning and scope of the subordinate legislation.
– Supreme Court of India </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
++ It is common knowledge that many things are put into statute <b><i>ex abundanti
cautela</i></b> and it cannot be assumed that anything not specifically included
is for that reason alone excluded from the protection of the statute. This maxim
has been held to be a “Valuable Servant but dangerous Master”- CESTAT</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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