TIOL-DDT 457 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body> <p> <b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 457</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 26 09 2006<br> Tuesday</font></b></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Palm oil exemption – Board corrects faulty notification.</font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In<b> </b><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4228">TIOL-DDT445 - 08 09 2006</a><b>, </b>we pointed out, </font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Board forgets its own notifications!</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 221/2002 – cus is amended to add after clause (h), the following clause, namely:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>“(i) the goods specified against serial Nos.34 and 434 of the said Table on or after the 1st day of November, 2006.”.</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But it is really pathetic that the Board has no updated copy of its own notifications. Clause (i) has been added to Notification No. 21/2002 by <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_071.htm">Notification No. 71/2006 - Customs dated 6th July 2006</a>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the present amendment should actually add a new clause (j). But the Board says add clause <b>(i). </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is because Board has no idea of the amendments carried out to its notifications. What will happen to the Clause (i) already added by <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_071.htm">Notification No. 71/2006</a>?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now Board has corrected this mistake. The (i) is changed to (j). A former TRU official told us that it is impossible to make such mistakes, as the latest version of the notification would be available in the file. Then why does it happen? It requires great talent!</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/corrigendum.htm">Corrigendum in</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/corrigendum.htm"><u>F.No.354/106/2006-TRU dated September 22, 2006</u></a></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Exim</font></strong><font color="#006600"><strong> Bank's Line of Credit to the Government of Mauritius</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Export-Import Bank of India (Exim Bank) has concluded an agreement with the Government of Mauritius making available to the latter a Line of Credit (LOC) up to an aggregate sum of USD 10 Million. The credit agreement has become effective on August 11, 2006. The credit is available for financing export from India of equipment, goods and services which are eligible for export under the Foreign Trade Policy of Government of India for construction of Baie du Tombeau Sewerage Project in Mauritius. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Shipments under the credit will have to be declared on GR / SDF Forms as per instructions issued by Reserve Bank from time to time, informs an RBI circular.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir008.htm">CIRCULAR NO. 8/RBI., Dated: September 25, 2006</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Amway – no way?</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3645">TIOL-DDT 351- 28 04 2006 </a>asked, “<b>Is multi level marketing (MLM) like Amway illegal?”. </b>It was suggested that “In India , money circulation schemes are banned under the <b>Prize Chits and Money Circulation Schemes (Banning) Act, 1978.” </b>Yesterday the Criminal Investigation Department of the Andhra Pradesh Police raided Amway offices right across the state and booked cases under the Act. Amway has penetrated deep into all walks of life with unsuspecting dreamers wanting to get rich quick becoming committed ambassadors. While they try to sell soap and hope – mostly hope, most of them do not realize that the activity is illegal, after all they are in a trance, hypnotized into believing that the quality of life is to be enhanced and they are going to become rich in the process. What ultimately happens is that families are ruined and the money does not come. Many government servants and their spouses are deeply involved in this multi level marketing scam and the government offices have become virtual market place for these messengers of money. Once these people are lured into this business, nothing stops them until ultimate destruction. People would get up at 5 in the morning to drive a 100 kms to attend a meeting, because they are told, “the only reasonable excuse for missing this meeting is your own funeral” And they believe it.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US based Amway has found fanatic followers in China and India that it is now almost an Asian company. Amway’s chairman for a quarter of a century is a Republican candidate for the 2006 Governor’s election of <st1:State>Michigan</st1:State> state in USA. He has promised to work without a salary if elected. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether Amway is legal or illegal, it is certainly illegal for government servants to be actively promoting the MLM culture. </font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Treaty shopping – Mauritius reaction.</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Writing for the weekly <b>Mauritius Times </b>last week, India based freelancer Atul Dev commented, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For foreign investors willing to invest in India, it made sense to set up a subsidiary in Mauritius and route their investments through that country. By doing so, they would avoid paying capital gains tax all together -- India won't tax because the company is based in Mauritius and Mauritius had anyway exempted investors from capital gains tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is now hoped that the Treaty, duly modified, will help encourage Indian investments in Mauritius, rather than the other way around. It is expected that Mauritius will agree to the changes as having signed similar DTATs with other ASEAN countries, it will be able to highlight its attraction as a tax haven and also plug gaps to stop both ‘round tripping’ and ‘treaty shopping’. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To this a reader reacted,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Treaty Shopping</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the landmark recent <em>AzadiBachaoAndolan</em> judgment, the Supreme Court of India has clearly pointed out that in the absence of a limitation of benefit clause (“LOB”) in the treaty, there can be no prohibition against treaty shopping. It also said that Indiahas in recent years been the beneficiary of significant foreign funds through the Mauritius route and that although economic reforms in India since 1991 permitted such capital transfers, the amount would have been much lower without the India-Mauritius tax treaty. <b>Could there be better reference than the India Supreme Court? </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mauritius does business the smart way… that is why it is a hot favourite with everyone! </font></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></span></font></p> </body> </html>