TIOL-DDT 615 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT 615</font></b><b></b></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><b><br> 17.05.2007<br> Thursday</b></font></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No Service Tax on entry and exit load of mutual funds – Really?</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question: Is service tax chargeable on the ‘entry and exit load’ amount charged by a mutual fund to the investor?.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has examined the issue and concluded and clarified that </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> “entry and exit load” charged by mutual fund would not attract service tax levy under the category of fund management service.”</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is the catch! Board says it is not taxable under the category of <b>fund management service</b>. Is it leviable under any other category?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board’s clarification has a rider,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a mutual fund, fund management activity is undertaken by an asset management company (AMC) right from the stage of inception of mutual fund. For its services of fund/asset management, (i.e., a periodic/recurring fee) an AMC charges the mutual fund an ‘investment and advisory fee’, in accordance with provisions contained in the SEBI regulation. This fee is chargeable to service tax under ‘fund management service’. Similarly, service provided by the distributors/ selling agents, brokers, custodians, trustees etc., to the fund, is also taxable under respective taxable service such as business auxiliary service, stock broking service and banking & other financial 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=41&filename=notification/servicetax/2007/sercir94.htm" target="_blank">CIRCULAR NO. 94/05/2007-ST , Dated : May 15, 2007 </a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Overtime Charges for Customs/Excise (officers) supervision for export</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ahmedabad II Commissioner clarifies that all EOUs /EHTP/STP units opting out of the cost recovery charges scheme shall be required to pay MOT for Customs /Central Excise related work even during office working hours. The rate of MOT are specified vide Customs (Fee for Rendering Services by Customs Officers) Regulations, 1998, issued vide Notification No. 69/98/-Cus (NT) dated 04-09-98. These rates may, however, change from time to time.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner also clarifies that in respect of the units working under the SRP scheme (other than EOUs) who are utilizing the services of the C. Ex. Officers to perform the services of supervision, stuffing and sealing of the export containers at their factory premises, MOT charges are required to be collected because no distinction can be made from an EOU/EHTP/STP and others as regards the rendering of the services by the departmental officers are concerned. Such MOT charges will be charged both in respect of normal working hours and other hours.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Commissioner informs that the exporter can avail the facility of self-sealing as prescribed by the circular No. 736/52/2003-CX., dated 11.08.03.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the exporter has to calculate whether it is cheaper to get the goods examined by the Central Excise officers at the factory or have them ripped through by the Customs at the ports. Many exporters find the excise supervision cheaper.</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/trade_notice17.htm" target="_blank">TRADE NOTICE NO 17/2007 Dated : April 25, 2007 of THE COMMISSIONER OF CENTRAL EXCISE II, AHMEDABAD</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>E-filing of Excise Returns – Please wait</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ahmedabad II Commissioner informs that the Sermon 6i software is under modification to incorporate the changes, and therefore, the e-filing for the month of April, 2007 excise return is blocked for the time being.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessees are requested to await the launch of the modified software. However the assesses are requested to file a manual return. The offline version of the Sermon6i will also be released simultaneously.</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/trade_notice26.htm" target="_blank">TRADE NOTICE NO 26/2007 Dated : May 7, 2007 of THE COMMISSIONER OF CENTRAL EXCISE II, AHMEDABAD</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Ministry Of Company Affairs Is Now Ministry Of Corporate Affairs </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ‘Ministry of Company Affairs’ has been renamed as the ‘Ministry of Corporate Affairs’ </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The focus of the Ministry’s working is no longer limited to the administration of companies but has increasingly acquired an all-inclusive role of addressing a wide sweep of functions - Corporate Governance reforms and the emerging legal framework. With the introduction of the ‘Limited Liability Partnership Bill’ proposing a new corporate structure, the amendments in the Acts governing the three professional institutions viz. the Institute of Chartered Accountants of India, the Institute of Costs & Works Accountants of India, and the Institute of Company Secretaries of India, notification of Accounting Standards, the initiatives being taken towards operationalisation of the ‘Competition Commission of India’, etc., the Ministry has, during the period of last two years, re-oriented itself to meet the expectations of a vibrant corporate sector in its march towards the global competitive environment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry is engaged in a complete revamp of the legal framework for the corporate sector. A new form of body corporate is proposed to be enabled through the proposed legislation on Limited Liability Partnerships for which the Bill has already been introduced in the Parliament. It is expected that this new framework will provide a significant boost to the growth of professional and knowledge domain in the country in an organised form. Similarly, amendments to the Competition Act, 2002 are at advanced stages of processing to enable operationalisation of a full-fledged Competition Commission of India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Companies Act, 1956 is itself under a comprehensive revision. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The notification of Accounting Standards is another milestone to bring the Indian corporate financial reporting systems in line with the international practices. The new Accounting Standards are not only expected to strengthen the system of disclosures for the stakeholders but also bring about parity with the international standards in a significant manner. This has become important in view of the Indian corporate stretching their operations beyond the national boundaries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Comprehensive restructuring of the legal framework apart, the Ministry is currently involved in restructuring its work processes both at the Head Office as well as in the field set up. The plan includes provision for a ‘new look’ physical infrastructure facilities with new office complexes planned to be constructed at certain places and the others being spruced up matching the corporate expectations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Establishment of an Indian Institute of Corporate Affairs has been envisioned to provide a think-tank support to the ministry in partnership with the corporate sector in its efforts to translate its vision into a reality. The proposed institute is envisaged to perform multiple roles of knowledge management, think-tank, capacity building for the ministry’s staff and provision of value added services through a single registry in addition to implementation of financial literacy programmes to enhance the investor awareness. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The revised nomenclature is more representative of the new role of the Ministry, captured in the new vision: “To be a leader and partner in initiatives for corporate reforms, good governance and enlightened regulation, with a view to promote and facilitate effective corporate functioning and investor protection”. </font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>No instance of flouting of SEZ guidelines by Promoters </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No instance of flouting of SEZ guidelines by promoters has come to the notice of the Government so far, Minister of State for Commerce, Shri JairamRamesh stated in a written reply to a question in the RajyaSabha yesterday. The empowered Group of Ministers (EGOM) at its meeting held on 5th April, 2007 had inter alia decided to fix the upper limit of the area required for multi product SEZs at 5000 hectares with a provision that the State Governments may prescribe a lower limit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the 234 formal approvals granted so far, none of the SEZs has an area over 5000 hectares and therefore, the question of reviewing permission granted in these 234 formal approvals does not arise. In cases where in principle approvals have been granted, the developers are required to submit proposals for formal approvals. The decision of the EGOM would be applicable to all these cases as well as new proposals received.</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> </body> </html>