TIOL-DDT 627 · 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="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 627</font><br> 04.06.2007<br> Monday</b></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Winding up of Indian companies - remittance – RBI Clarifies</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the existing regulations, remittance out of the assets of Indian companies under liquidation require the permission of Reserve Bank of <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>. As a measure of simplification, RBI has now delegated this power to AD Category-1 banks subject to the following conditions:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The remittance is in compliance with the orders of a court/official liquidator.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) No objection certificate is obtained from the Income Tax Authorities.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Auditor’s certificate that liabilities in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region> are fully paid or provided for, is produced.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)Auditor’s certificate that winding up is as per the Companied Act, is produced.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Auditor”s certificate to the effect that no legal proceedings are pending in any court in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>, is produced.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir065.htm" target="_blank">RBI Circular No. 65/2007, Dated May 31, 2007</a></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Commodity hedging – RBI Guidelines</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has issued instructions regarding commodity hedging and risk management.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) AD Category – I banks authorised by RBI may permit domestic producers/users to hedge their price list on aluminium, copper, lead, nickel and zinc in international commodity exchanges.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) The bank may approach RBI for permission on behalf of customers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir066.htm" target="_blank">RBI Circular No. 66/2007, Dated May 31, 2007</a></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Protect your records against hurricane - IRS</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US Internal Revenue Service wants taxpayers to safeguard their records, with the hurricane season setting in. The IRS suggests </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Paperless record keeping.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Documenting valuables in advance</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Checking on fiduciary bonds and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)Updating emergency plans.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Copies of returns filed with IRS including all attachments can be obtained from IRS by applying in writing or through telephone. There is another hurricane, a span email during the rounds the people are sent emails warning them of IRS investigations.</font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Construction Service to works contract – Service tax already paid? </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new Works contract service effective from 1<sup>st</sup> June, 2007 is bound to create several doubts. For a construction service contract entered into before 1<sup>st</sup> June, 2007, an advance of Rs. 1 Crore is received and tax has been paid. Now if the service is categorized under works contract, what happens to the service tax already paid? </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=bnews_detail.php3&newsid=5570" target="_blank">See our Guest Column for some interesting queries on Works Contract</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_31.gif" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left">Outward transport – Jinxed </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the mother of all these cases – NHK, the Commissioner (Appeals) has allowed credit of service tax paid on outward freight. In appeal, CESTAT has disallowed the credit and now comes one more order, this time from the president in the NHK appeal, that credit cannot be allowed. Heated legal battles are ahead in higher courts.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for the judgment</u></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Section 80 IA Vs. 80 HHC </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ITAT special bench has held that relief under Section 80 IA has to be deducted from profits before computing relief under Section 80 HHC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for details</u></b></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>