TIOL-DDT 628 · 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 color="#663399" size="3"><b><font face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 628</font></b></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><b><br> 05.06.2007<br> Tuesday</b></font></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on"><st1:place w:st="on"><b><font color="#006600">India</font></b></st1:place></st1:country-region><font color="#006600"><b> Blocks WTO investigation of Tariffs on US Wine </b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Geneva, India could successfully block a World Trade Organization investigation of import duties on American wine and spirits yesterday, delaying a U.S. complaint alleging that the country discriminates against products like wines from Napa Valley and Jack Daniel's whiskey.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> is one of the largest markets for alcohol in the world and has huge potential for growth.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"The layers of customs duties <st1:country-region w:st="on">India</st1:country-region> applies to <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place> products, in particular to wine and distilled spirits, are not in line with its WTO commitments," U.S. Trade Representative Susan Schwab said last month. "We must ensure a level playing field for <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place> products around the world."</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <st1:country-region w:st="on">United States</st1:country-region>, the European Union and <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>, allow nearly all spirits to enter their markets duty-free. <st1:place w:st="on"><st1:country-region w:st="on">China</st1:country-region></st1:place> has a 10 percent charge to foreign liquor.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on">India</st1:country-region> criticized <st1:place w:st="on"><st1:State w:st="on">Washington</st1:State></st1:place>'s decision to bring the case to the WTO as "unfortunate and disappointing." <st1:country-region w:st="on">India</st1:country-region> said it is reviewing its own trade rules to resolve the dispute, a claim it also made in criticizing <st1:place w:st="on"><st1:City w:st="on">Brussels</st1:City></st1:place>' decision to bring the case to the WTO.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <st1:country-region w:st="on">U.S.</st1:country-region> said wine sales in <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region></st1:place> through special duty-free rules, such as at airports and luxury hotels grew by 350 percent between 2000 and 2005. The growth was 200 percent for American liquors.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But high import duties imposed on the vast majority of American wines and spirits means total exports remain low, the <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place> says. The Distilled Spirits Council of the <st1:place w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place> estimates that all foreign liquors together account for less than 1 percent of the Indian market.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Three cheers to the great Indian liquor market! </font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs agreement between India and Brazil</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Agreement on Mutual Assistance in Customs Matters was signed by Mr. S.K. Shingal, Chairman of Central Board of Excise and Customs (CBEC) from the Indian side and Mr. Jorge Antonio DeherRachid, General Secretary of Brazilian Internal Revenue Service, yesterday. </font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> Charitable Trusts - CBDT appoints “ prescribed authorities”</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 10 (23C) (iv) and (v) of the IT Act, the income of a fund or institution established for charitable purposes <i>which may be approved by the prescribed authority or </i>any trust (including any other legal obligation) or institution wholly for public religious purposes or wholly for public religious and charitable purposes, <i>which may be approved by the prescribed authority</i>, is exempted.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now CBDT has prescribed the authorities as Chief Commissioners or DG.</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=35&filename=notification/cbdt/2007/it07not195.htm" target="_blank">NOTIFICATION NO. 195/2007, Dated: May 30, 2007</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>And for Universities and hospitals too</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a similar exemption for any university or other educational institution existing solely for educational purposes and not for purposes of profit <i>and which may be approved by the prescribed authority</i>and for any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, <i>and which may be approved by the prescribed authority.</i></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board has prescribed the ‘authorities’ - mostly CCs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But how unfortunate that universities will have to apply and get ‘authorised’ from Chief Commissioners! Why can’t they simply say that this applies to all universities approved by the UGC? What happens if the learned CC refuses to give approval to a premier University? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>TIOL had submitted before the Parliamentary Committee that it is not wise to allow Revenue officers to tinker with education.</b></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=35&filename=notification/cbdt/2007/it07not196.htm" target="_blank">NOTIFICATION NO. 196/2007, Dated: May 30, 2007</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DG, Intelligence for Income Tax</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new Director General and Director, Intelligence are to be created in the Income Tax department with All India jurisdiction with powers to </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.enforcing the attendance of any person, including any officer of a banking company and examining him on oath; compelling the production of books of account and other documents; discovery and inspection</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.Search and seizure </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.requisition books of account, etc. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.call for information </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.survey </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.collect certain information </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.inspect registers of companies</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </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=35&filename=notification/cbdt/2007/it07not198.htm" target="_blank">NOTIFICATION NO. 198</a></u><b><u> and </u></b><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2007/it07not199.htm" target="_blank">199/2007, Dated: May 31, 2007</a></u></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Overseas Direct Investment – RBI rationalises Forms </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As of now, application for overseas direct investment is required to be made in any one of the three forms viz., ODA for direct investments in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) under automatic route, ODI for investments under approval route and ODB for issue of ADRs / GDRs on back to back basis. Further, reporting of remittances is currently required to be made through AD Category -I banks in either of the two forms viz., ODR for remittances made for overseas direct investments and ODG for overseas acquisitions made under ADR / GDR Stock Swap Scheme. Form APR is the Annual Performance Report on the functioning of overseas JV / WOS. The liberalisation in the policy on overseas investments has enabled many Indian corporates to establish presence in overseas markets, redefining the global outreach of Indian entities. However, the reporting framework has not kept pace with the developments and does not capture data comprehensively on overall costs of acquisition, funding patterns, performance indicators, etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to improving the coverage and to ensure monitoring of the flows in a dynamic environment, RBI has now decided to revise the existing reporting system. As per the new reporting package, all the forms have been subsumed into one form viz. ODI, comprising of four parts:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Part I </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section A – Details of the Indian Party<br> Section B – Details of Investment in New Project<br> Section C - Details of Investment in Existing Project<br> Section D – Funding for JV / WOS <br> Section E – Declaration by the Indian Party<br> Section F - Certificate by the Statutory Auditors of the Indian Party</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Part II</b> - Reporting of Remittances</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Part III</b> - Annual Performance Report (APR)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Part IV</b> – Report on Closure / Disinvestment / Voluntary Liquidation / Winding up of JV / WOS.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new system has also been introduced for reporting Closure / Disinvestment / Winding up / Voluntary Liquidation of the overseas JV / WOS under general permission (Part IV of form ODI). Reporting in the revised form ODI will come into effect from June 1, 2007. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The revised form is only a rationalisation of the reporting procedure and there is no change or dilution in the existing eligibility criteria / documentation / limits. Eventually, these reports will be received on line by Reserve Bank.</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=49&filename=notification/rbi/2006/rbi06cir068.htm" target="_blank">CIRCULAR NO. 68/RBI., Dated: June 1, 2007</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">From our Legal Corner</font></b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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"></b></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Works Contract – No Service Tax before 1.6.2007. </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since service tax liability on Works Contract is brought into tax net from 2007, it can be argued that these services were not to be taxed earlier, observed the Tribunal – See details in our columns tomorrow. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Reliance wins Rs 130 Cr excise case - </b>Cenvat credit cannot be denied on inputs and capital goods cleared to captive power plant to produce electricity even if exemption is claimed from payment of income tax for income from power plant being a new industrial undertaking <b> - See this CESTAT judgement in our columns tomorrow</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>