TIOL-DDT 547 · the untouched capture
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<p align="justify"><b><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT
547</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
07.02.2007<br>
Wednesday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Is
Budget relevant?</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I requested
a very senior retired officer of the Customs department to write his budget
wish list for us. He wrote in,</font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">I
am now of the firm opinion that the annual budget of the centre is a thamasha
which wastes time and money. The economy is progressing fast and to sustain
it, necessary steps will have to be taken immediately.These cannot await the
annualbudget.The recent reduction of duties of certain imports, though for
the purpose of controlling price rise and consequent inflation, were taken
outside the budget.. The budget is now basically a political instrumentfor
influencing the voters, in the present case, those in U.P and Punjab. And
to glorify the flagship schemes of Her Excellency and get more popularity
for Her. Excise duties and customs duties can and have to go down not because
our present economic conditions warrant it, but because we have to fall in
line with ASEAN. So, what is left? Much ado, tons of paper, articles and hours
of Media. So, I do not think any wish list, which goes beyond I.T. rates reduction
and more exemptions, would have much value. Extreme view?Maybe. But it is
mine.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not at all
Sir, Your view will have many takers and I may be pardoned the indulgence of
reproducing the last line of his mail, which is a personal honour to me.</font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">I
write this only to keep in touch with you.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thank You
sir.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Export
under DFIA – No Cenvat - JDFT clarifies</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jt DGFT,
Mumbai clarifies that as per 4.4.7 of the Foreign Trade Policy, “No CENVAT credit
facility shall be available for inputs either imported or procured indigenously
against the Authorization”.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs
Notification No. 40/2006 dated 1<sup>st</sup> May, 2006 provides that for exports
made under DFIA, the CENVAT facility under CENVAT Credit Rules 2004 for the
facility under Rule 18 or Rule 19(2) under Excise Rules 2002 cannot be availed
in respect of the inputs used in the product exported under DFIA.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jt DGFT
has noticed instances where exporters have availed these benefits
in respect of exports made under DFIA.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So he instructs
that to avoid inconvenience to the Trade while processing applications, the
exporters applying for DFIA should furnish a declaration that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ neither
we nor our Supporting Manufacturer(s) has availed the CENVAT Credit Facility
under CENVAT Credit Rules 2004 or facility under Rule 18 or Rule 19(2) of Central
Excise Rules 2002 in respect of inputs used in the product exported under DFIA.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ I/we
shall be liable to penal action under Foreign Trade (Development & Regulation)
Act, 1992 in case the declaration furnished above is found to be incorrect or
false.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/trade_notice.htm">Trade
Notice No. 2/AM07Dated: 2<sup>nd</sup> February, 2007 of JOINT DIRECTOR GENERAL
OF FOREIGN TRADE, Mumbai</a></u></b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><font color="#006600">Interest
Rate on Non-Resident (External) Rupee (NRE) Deposits </font></u></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The RBI
has directed changes in the interest rates on NRE term deposit accounts:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">'The interest
rates on Non-Resident (External) Rupee (NRE) deposits for one to three years’
maturity contracted with effect from close of business in India on January 31,
2007 shall not exceed the LIBOR/ SWAP rates of the last working day of the previous
month for US dollar of corresponding maturities plus 50 basis points (as against
LIBOR / SWAP rates plus 100 basis points effective from close of business on
April 18, 2006). The interest rates as determined above for three year deposits
will also be applicable in case the maturity period exceeds three years. The
above changes in interest rates will also apply to NRE term deposits renewed
after their present maturity period.' </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the Third
Quarter Review of the Annual Policy Statement for the year 2006-07, it was mentioned,
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A sizeable
increase in Non-Resident (External) Rupee Account [NR(E)RA] and Foreign Currency
Non-Resident (Banks) [FCNR(B)] deposits has been observed in 2006-07 so far.
At the same time, there are reports of large growth in advances being granted
against such deposits. It may be recalled that, based on the prevailing monetary
conditions, the interest rate ceilings on NR(E)RA and FCNR(B) deposits have
been reviewed on an ongoing basis and have been adjusted on several occasions.
In the current context, it has been decided to reduce the interest rate ceilings
on NR(E)RA and FCNR(B) deposits by 50 basis points and 25 basis points, respectively.
Furthermore, keeping in view the objective of making these facilities available
to individual NRIs and considering the prevailing monetary conditions, there
is merit in avoiding upward pressure on asset prices in sensitive sectors through
utilisation of this facility. Pending a review of the extent of large advances
to high net worth individuals, banks are being prohibited from granting fresh
loans in excess of Rs. 20 lakh against the NR(E)RA and FCNR(B) deposits, either
to depositors or to third parties. Banks are also being advised not to undertake
artificial slicing of the loan amount to circumvent the ceiling.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbinot.htm">RPCDRF.
Dir. 45/07.38.01/2006-07 February 6, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">PLAIN
SPEAKING: A Sudra’s Story - a book worth a read</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The memoirs
and lectures of A N Sattanathan (1905 -1991), edited by his grand daughter UttaraNatarajan
was released recently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sattanathan
was born in Shencottah in a poor family belonging to the Padayachi caste. His
father was a musician who wanted an English education and Government job for
his son. Helped by some wealthy benefactors, outside whose gates he had to humiliatingly
wait, Sattanathan obtained a First Class Honours degree in History in 1926 and
qualified for the Superior Civil Service in 1929. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After retirement
from Government Service, he was appointed as the first Chairman of the Tamil
Nadu Backward Classes Commission in 1969 by the then and now Chief Minister
Karunanidhi. He had recommended an income limit to prevent the accumulation
of reservation benefits by an “upper crust”. He remarked that poverty is a great
motive force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is <b>DDT</b>
interested in all this? Sattanathan, the ICS officer was a Collector of Customs
in Calcutta and as Member of the Central Revenue Board, he was the Author of
the Tobacco Excise Manual – a great treatise on excise administration. </font></p>
<p align="center"><font color="#006600"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">O-41 for Service Tax! </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are in
receipt of a copy of a letter from a Superintendent’s Association asking the
Board to prescribe a register like O-41 for Service Tax. O-41 for the uninitiated
was a magical, any day- better than a computer- record of revenue realization.
The TEM as it was called is a masterpiece and if our present day administration
has a fraction of the vision you can find in the manual, 90% of the confusion
prevalent today could be avoided.</font></p>
<p align="center"><b><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Remarks of an old hand </font></b></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An officer
who retired more than thirty years ago remarked,</font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Although
the country was then ruled by an alien power, it is to theireternal credit
that the administration was totally assessee-friendly. The principle adopted
was that the procedures should be such that they should be tailored to
meet the requirements of Trade and Industry instead of other way about.
Consequently, the senior officers went round the country to get a feedback
and to find solutions for the practical difficulties of the assessees.
Officers of all grades were also encouraged to come up with suggestions
towards the same end. The working conditions were extremely harsh. No Government
vehicle was provided at any level. Survey of tobacco fields required intensive
visits to villages. However, thanks to the inspirational leadership and
the motivation provided no one felt reluctant to undertake the onerous
tasks. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Compare
that with the pathetic state where a Member of the Board spends his time withdrawing
the facility of monthly payment of excise duty to a factory in some remote area
and thinks it is beyond appeal! </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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