TIOL-DDT 59 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body bgcolor="#FFFFFF">
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#0000FF" size="3">TIOL-DDT
59</font><br>
22 2 2005<br>
Tuesday</b></font></p>
<p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service
Tax on job work</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>IT</b> appears
that the DG, Service Tax has issued a letter to the field to the effect that
job workers whose activities do not fall under the definition of manufacture
in Central Excise will be covered under Service Tax under <b>business auxiliary
service</b> and he wants them all brought under the tax net. He sees considerable
revenue potential in this expanded area of Service Tax. It is natural for
Revenue officers to be panicky during the last quarter of the year what with
an alarming shortfall in collections and pressure from the Minister. And the
poor field officers are on the run for that little extra revenue - by
all possible means and imposssible. Coming back to Service Tax on job work;
the definition of Business Auxiliary Service speaks about <b>production of
goods on behalf</b> of the client but does not include any activity amounting
to manufacture under Central Excise. Now does this mean that any activity
which is not manufacture will attract Service Tax as the DG wants it to? The
definition does not seem to say so. It requires <b>production</b> of goods
and more importantly <b>on behalf</b> of the client. The job worker actually
<b>works</b> for the client, not on his behalf. Even under Central Excise
law, the job worker is also an independent manufacturer. The scope of this
service (even expanded) seems to cover only production of goods on behalf
of the client, not production of goods for the client. If I take paddy to
a rice mill and get it converted into rice, is the rice mill producing rice
for me, or on my behalf? And is the activity taxable? If so the street corner
grinder-wallah who makes my idli flour with my rice or the one who makes my
wheat flour are liable to pay Service Tax. The scope is indeed wide!<br>
<br>
<font color="#006633"><b>SEZs included in list of ports for advance licence</b></font><br>
<br>
As per para 4.19 of the Handbook of procedure for the FTP 2004-09, Advance
licence should be used only for export and import through certain specified
ports. By PN. No 52/2004-09 dated 11.2.2005, some SEZs have been added to
the list. Now the DGFT has allowed <b>Export shipments under the Advance Licensing
Scheme from any of the SEZs </b><br>
<br>
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2004/dgft04pub055.htm">PUBLIC
NOTICE NO 55 /2004-2009 : DATED 18th February, 2005</a><br>
<br>
<font color="#006633"><b>Import of gold on loan basis for export - RBI
issues instructions</b></font><br>
<br>
As per para 4.77.2 and 4.77.3 of the FTP, gold can be imported on loan basis
and the export has to be completed within 60 days and the loan repaid within
60 days from the date of export. The DGFT had by PN No. 28/1.2.2004 extended
the time to repay the loan to 180 days from the date of export. In view of
this RBI has issued the following instructions to Banks:-</font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (i) Nominated agencies / approved banks can import gold on loan basis for
on lending to exporters of jewellery under this scheme. On the other hand
EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold
on loan basis for manufacturing and export of jewellery on their own account
only.<br>
<br>
(ii) The maximum tenor of gold loan would be 240 days;<br>
<br>
(iii) ADs may open Standby Letters of Credit (SBLC), for import of gold on
loan basis, where ever required;<br>
<br>
(iv) ADs must maintain adequate documentation with them to uniquely link all
imports with the SBLC issued for the import of gold on loan basis.</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="http://taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTUzMTc=" target="_blank">A.P.
(DIR Series) CIRCULAR NO. 34, Dated : February 18 , 2005</a><br>
<br>
<font color="#006633"><b>LAWS IN STEP WITH TIMES<br>
</b></font><br>
There is poetry in the air. Inspired by the poetry in our Guest Column last
week, an eminent netizen has sent me a poem on the Laws.<br>
<br>
<b>Laws changing in innumerable ways<br>
now, seeking welfare of all<br>
thoughtfully enacted, simple and well<br>
reaching out to all<br>
explained well, illustrated well<br>
thus understood by one and all.<br>
<br>
Nothing hidden or implied in the bill<br>
hence, luring subjects to comply at will.<br>
Friendly administrators treat assesses well<br>
not treating as evaders and criminals all<br>
voluntary compliance make coffers swell<br>
ending litigations as well.<br>
<br>
Time to say adieu to laws made otherwise<br>
As a nation, we bid "FARE THEE WELL".</b><br>
<br>
<font color="#FF0000"><b>Until tomorrow with more of DDT<br>
<br>
Have a Nice Day<br>
<br>
Mail your comments to</b></font> <b>vijaywrite@taxindiaonline.com </b><br>
</font> </p>
</div>
</body>
</html>