TIOL-DDT 570 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
570</font><br>
12.03.2007<br>
Monday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Service
Tax circulars - review - Rustagi Panel Report - Board seeks comments </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr.
T R Rustagi, former Chief Commissioner, and JS TRU had been asked by the
Government to review all the Service Tax circulars and instructions. Mr
Rustagi has handed over his report in the last week of February and now
the government seeks comments on the comments of Mr. Rustagi. Though an
apparently hurried report, Mr Rustagi has suggested some very important
changes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">His
report consists of three annexures – circulars to be retained, amended and deleted.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">His
comments on some of the circulars </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Credit
of Service Tax on telephones: </b>Board had clarified that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
regard to credit of service tax on telephone connection, queries have been raised
as to whether service tax credit would be admissible on telephone sets installed
only in the business premises. The answer is in the affirmative, and credit
will be allowed only on telephone sets installed in the business premises. <st1:City><st1:place>Mobile</st1:place></st1:City>
phones are not covered.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rustagi’s
comments:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
tribunal and the Courts may not buy this argument. Cenvat Rules do not make
an exception. Some solution has to be found to resolve this controversy. Either
it be disallowed legally, or be allowed legally—say a specific proportion of
the tax paid on mobile phones in the name of the company.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Construction
of residential complexes:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
service would generally cover construction services in respect of residential
complexes developed by builders, promoters or developers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rustagi’s
comments:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many
have represented against DGST’s Circular No. V/DGST/22/Audit/Misc/1/2004 dated
16.2.2006 in the context of <i>Raheja</i>judgment that the inference drawn by
DGST is incorrect. This matters deserves clarification by the Board. It seems
that facts are important. <i>Prima facie </i>construction of flats by builders
is not a service.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service
Tax on GTA – DGST’s confusion</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
has been requested that in cases where liability for tax payment is on the consignor
or consignee, the procedure as to how it should be confirmed by such consignor
or consignee that the goods transport agency has not availed credit or benefit
of notification No. 12/2003- Service Tax may be prescribed. In such cases it
is clarified that a declaration by the goods transport agency in the consignment
note issued, to the effect that neither credit on inputs or capital goods used
for provision of service has been taken nor the benefit of notification No.
12/2003-Service Tax has been taken by them may suffice for the purpose of availment
of abatement by the person liable to pay service tax.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rustagi’s
comments:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement
is now provided by notification No. 1/2006-ST dated 1.3.2006. It is cumbersome
to obtain the declaration for each transaction. Some trade-friendly approach,
like quarterly declaration, is needed. Also, there is lot of hue and cry on
this subject. The officers have not allowed benefit to those who pay the tax
as service receiver. The DGST Circular created the avoidable confusion. Now,
it is understood that C&AG has also taken objection. This matter needs to
be resolved—by resorting to retrospective amendment, if need be. The intention
can not be to deny the benefit of exemption.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
will bring you more comments on the Rustagi Panel report in the next few days.
In the mean time, if you have any comments to make on the recommendations, please
mail them to us marking the subject as “rustagi recommendations”. We will send
a consolidated report to Board. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See
Rustagi <b><u>repor</u></b>t and <b><u>annexures</u></b>. </font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Application
for Advance Ruling – Forms changed</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
application forms for Advance Ruling in Customs, Central Excise and Service
Tax have been changed. </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=24&filename=notification/custom/2007/cnt07_021.htm">NOTIFICATION
NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2007/cnt07_021.htm"><u>
21/2007-Customs (NT)</u></a><u>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/exnt07_16.htm">16/2007–Central
Excise (NT)</a>, <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2007/stnot07_013.htm">13/2007-Service
Tax, Dated : March 6, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">SHE
included as ‘duty’ </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Secondary
and Higher Education Cess on excisable goods” has been included in the list
of duties for clearances of goods for export without payment of duty or under
claim for rebate of duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notifications
No. 19/2004-CE(NT), No. 20/2004-CE(NT), No. 21/2004-CE(NT), 42/2001-CE(NT),
No. 43/2001-CE(NT) amended. Earlier there was a long dispute as education cess
was not included in the list of duties and several Show Cause Notices were issued.
Now the Board wants to plug the loophole but the Board is late by a week. The
SHE Cess was applicable from 1.3.2007 and now the exemption for export for SHE
Cess is applicable from 8.3.2007. What will happen for the period from 1.3.2007
to 8.3.2007? Again litigation?</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=30&filename=notification/excise/2007/exnt07_17.htm" target="_blank">NOTIFICATION
NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/exnt07_17.htm"><u>
17</u></a><u> <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/exnt07_18.htm">18/2007-
Central Excise (N.T.), Dated: March 8, 2007 </a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Services
Export Promotion Council in place - to give RCMC</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
DGFT has amended the Handbook of Procedure, (Volume-I) to stipulate that:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“
Software exporters shall register themselves with Electronic and Software Export
Promotion Council. Exporters of 13 specific services as listed in Sl No. 34
of Appendix-2 of Handbook of Procedure (Volume -I) are required to register
themselves with the <b>Services Export Promotion Council .</b> Other service
exporters shall register themselves with Federation of Indian Exporters Organisation.
” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
<b>Services Export Promotion Council</b>, 705, Bhikaji Cama Bhawan, Bhikaji
Cama Place, New Delhi-110066 will cover the exports relating to </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
Health Care Services including services by nurses, physiotherapist and paramedical
personnel </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii)
Educational Services </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii)
Entertainment Services including audio-visual services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)
Consultancy Services.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v)
Architectural Services and related services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi)
Distribution Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii)
Accounting/ Auditing and Book Keeping Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(viii)
Environment Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ix)
Maritime Transport Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(x)
Advertising Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xi)
Marketing Research and Public Opinion Polling Services/ Management Services</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xii)
Printing and Publishing</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(xiii)
Legal Services</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=47&filename=notification/dgft/2006/dgft06pn088.htm" target="_blank">PUBLIC
NOTICE NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn088.htm"><u>
88 (RE-2006)/2004-09 , Dated: March 5, 2007 </u></a></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></span></font></p>
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