TIOL-DDT 694 · the untouched capture
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<div><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 694</font></b><font size="2"><b><br>
07.09.2007<br>
Friday</b></font></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Import of scrap rubber tyres and gypsum from Muldwarka port allowed</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per notification No. 62/94 (NT) - Customs, dated the 21st November, 1994, Muldwarka port in <st1:place w:st="on">Gujarat is a Customs port only for Unloading of imported coal, petroleum coke and furnace oil and loading of clinker and cement for export.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now import of gypsum and scrap rubber tyres not suitable for retreading – shredded or with cut in bead wire, are allowed.</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_091.htm" target="_blank">Notification No. 91/2007, Cus., (<st2:GivenName u1:st="on"><st2:GivenName
w:st="on">N.T.</st2:GivenName></st2:GivenName>), Dated: <st1:date ls="trans" Month="9" Day="5" Year="2007" u1:st="on"><st1:date
ls="trans" Month="9" Day="5" Year="2007" w:st="on">September 5, 2007</st1:date></a></u><b><u><st1:date
ls="trans" Month="9" Day="5" Year="2007" w:st="on"></st1:date></u></b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Vodafone gets huge Income Tax demand</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Top mobile Company, Vodafone has reportedly been issued a $2 billion demand by the Income Tax Department relating to its purchase of Hutchison-Essar earlier this year.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone confirmed that it had received a letter from the Income Tax Department regarding the company's liability for capital gains tax resulting from its $11 billion takeover of <st1:City u1:st="on"><st1:place
w:st="on"><st1:City w:st="on">Hutchison-Essar</st1:City>, <st1:country-region w:st="on">India's fourth largest mobile phone operator.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While it is unusual for the buyer, rather than the seller, to receive a capital gains tax bill on such a transaction, the liability may have arisen because of the complex manner in which Vodafone structured the deal. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the purchase may have been arranged via an offshore subsidiary in <st1:country-region
w:st="on"><st1:place w:st="on">Mauritius, with Vodafone-Essar acting as an 'agent' in the deal. Vodafone claims that it has received "clear" advice that no tax would be due on the deal, and that it proposes to defend its position "vigorously".</font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>42% growth in Income Tax Collections </b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT can smile all the way to the bank! </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region
w:st="on"><st1:place w:st="on">India's net tax collections stood at Rs.61000 Crores for April-August period, up 42 percent over Rs. 43000 Crores in the last fiscal.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While corporate tax collection recorded a growth of 49.49 percent at Rs.33,766 croreover Rs.22,587 crorelast fiscal, the personal income tax grew 33.76 percent to Rs.27,206 Crores from Rs.20,340 Crores during the period.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During fiscal 2007-08, direct tax collections have consistently maintained a growth of over 40 percent, reflecting continued buoyancy in the economy, better tax compliance and improved tax administration.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The growth in securities transaction tax was 35.16 percent, while banking cash transaction tax was up 79.73 percent.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Passport Seva Project</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Union Cabinet yesterday gave its approval to the following proposals :-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Outsourcing of front-end activities of passport issuance through an open bidding process to a Service Provider(s), setting up of 68 Passport Facilitation Centres and use of the current Passport Offices as Passport Back-Offices.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Outsourcing of dispatch of passports to <st1:country-region
w:st="on"><st1:place w:st="on">India post.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Upgradation of information Technology, with uniform procedures, in use in passport issuance system, setting up of a Central Printing unit and online links with concerned police authorities.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Permit the Service provider(s) to levy a fee, to be decided through an open bidding process, over and above the Government fee for each service so as to enable him recover his costs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
Improvement in the working conditions in Passport Back-Offices at a cost
of Rs. 8 crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Setting up of a Project Management Unit for implementation of the project.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Establishing a Special Purpose Vehicle (SPV) at an appropriate time for the management, supervision and monitoring of the project.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Passport Seva project will result in delivery of passport-related services to the citizens in a timely, transparent, more accessible and reliable manner and in a comfortable environment through streamlined processes and a committed, trained and motivated workforce. The Project will be implemented over a period of 19 months by the Ministry of External Affairs.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<b><font color="#006600">From our Legal Corner – Monday's cases</font></b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></b></font></b></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax</b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>If expatriate employees are paid salaries by the PE of non-resident company, such income is taxable in India : Tribunal</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">THE</font> </strong>Double Tax Avoidance Agreements (DTAA) signed by India with various countries are to be taken on case by case basis and the terms of one agreement with one country can't have application on another agreement with another country blindly. This is what can be inferred from the latest decision of the Tribunal in a case in which Zarubezhneft, a co. incorporated in <st1:country-region
w:st="on">Russia, represented its employees (assessees) as their agent in <st1:country-region
w:st="on"><st1:place w:st="on">India. The assessees sought exemption of their remuneration paid for their services in <st1:country-region
w:st="on"><st1:place w:st="on">India from tax in view of Article 15 of DTAA. But the same was disallowed by the revenue on the ground that all the three conditions laid out in Article 15.2 were required to be satisfied simultaneously in order to avail exemption and since the assessees failed to satisfy the third condition, their remuneration was liable to be taxed in India.</font></p><p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs</b></font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Metropolitan Magistrate ought to have referred to material placed before Tribunal which resulted in discharge rather than short-circuiting the issue and apply SC decision in Standard Chartered Bank to hold that complaint was maintainable : <st1:City w:st="on"><st1:place
w:st="on">Delhi</st1:City> High Court </b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">THIS</font> </b>is a Customs case and the issue concerns alleged illicit import of fabrics. The petitioners are co-accused in a complaint filed by the Inspector, Customs Preventive under section 135(1)(b) of the Customs Act.</font></p><p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise </b></font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Poultry farm is a factory - substantive benefit of an exemption notification shall not be denied for a minor procedural lapse - Procedure, after all, is only an aid to justice : Tribunal</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE Commissioner of Central Excise demanded duty of over Rs 62 lakhs from the appellants in respect of weld mesh (chain links) cleared to poultry farms during the period from 01.04.2001 to 18.12.2002. He also imposed equal amount of penalty on the assessee.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tribunal held, Exemption from payment of duty, granted by the Central Government under the above Notification, is a substantive benefit which shall not be denied on the ground of non-fulfilment of a minor procedural condition. Procedure, after all, is only an aid to justice.</font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns Monday for the judgements</u></b></font></p><p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday 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 <a
href="mailto:vijaywrite@taxindiaonline.com"></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a
href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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