TIOL-DDT 722 · 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><font face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="2">TIOL-DDT 722</font></b><font size="2"><b><br> 18.10.2007<br> Thursday </b></font></font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Migration to SEZ – not all options are closed.</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday's DDT carried a comment from one of our experts,</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now with this deletion this transfer of used plant and machinery is allowed. This gives a tremendous opportunity for all the EOUs to migrate to SEZs.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT stated “Not exactly!”, fully understanding that there will be a strong backlash. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Expectedly, it came as soon as DDT hit the web.</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">I stated that the existing EOUs have tremendous opportunity by deletion of clause g of Rule 18(4) of SEZ Rules because the deletion of this clause was necessitated by the new sub clause 4 of Section 10AA of IT Act, 1961 which was introduced in the Finance Act, 2007. This new clause essentially states that Section 10AA shall apply to any undertaking which fulfills the three conditions mentioned therein. They are (i) the unit has begun or begins to manufacture articles or provides services in the assessment year 2006-07; such unit is not formed by splitting up or reconstruction of a business already in existence provided that such business is being revived after damaged by natural causes or reasons like arson, riots etc (section 33B); such unit is not formed by the transfer to a new business, of machinery or plant previously used for any purpose. An explanation is also introduced under this sub-clause 4 which states that explanations 1 and 2 to sub-section 3 of Section 80IA shall apply to clause (iii) herein as they apply to clause (ii) therein.</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">These two explanations provide an interesting angle. The first explanation is meant for used plant and machinery imported from outside <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region>. This is of not much help to an EOU which is in India [of course an existing EOU can still import used capital goods and without installation in its premises divert it to a newly set up unit in SEZ (belonging to the same entity) by virtue of this explanation without violating any of the existing conditions in 10AA especially the new sub-clause 4 or Chapter 6 of the FTP ( in terms of Para 6.13) ]. The second explanation is very important. It states that if a unit transfers any used plant and machinery to a new business, and if the value of such plant and machinery so transferred shall not exceed twenty percent of the value of plant and machinery of the new business, then the conditions mentioned [in clause (iii) of section 10AA] are deemed to have been complied with. Though the two explanations are meant for clause (ii) of sub section 3 of section 80IA, by virtue of explanation to section 4 of new section 10AA, they are also applicable to the clause (iii) of this new 10AA.</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">So there is still hope for the existing EOUs to migrate to an SEZ (belonging to the same entity) with the existing plant and machinery provided they have to plan the migration in stages and systematically so as not to violate the conditions prescribed in SEZ Act, or IT Act or FTP. After complete migration, the EOU unit can be dissolved. This strategy can be tested but is workable. Impossible is nothing - as the Adidas tagline says, the only requirement is that such an impossible task has to be tackled in a systematic way to overcome at least some of the conditions of all the laws. </font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No import of palm Oil through <st1:City w:st="on"><st1:place w:st="on">Kochi port</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has amended Schedule – I (Imports) of the ITC(HS) Classifications of Export and Import Items, 2004-09 to stipulate that import of Palm Oil and its fractions, Refined bleached deodorised palm oil, Refined bleached deodorised palmolein and Palm Kernel Oil and its fractions, will not be permitted through Kochi port.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2007/dgft07not039.htm" target="_blank">DGFT Notification No.39 (RE-2007) / 2004-2009, Dated: <st1:date ls="trans" Month="10" Day="16" Year="2007" w:st="on">October 16, 2007</a></u></font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Money changers can give cash up to 3000 US Dollars – PAN <st1:stockticker w:st="on">CARD suitable for establishing relationship </b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Anti-Money Laundering guidelines for Authorised Money Changers, requests for payment in cash by foreign visitors / non-resident Indians may be acceded to the extent of USD 2000 or its equivalent. This limit is now raised to USD 3000.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further relationship with a business entity like a company / firm should be established only after obtaining and verifying suitable documents in support of the name, address and business activity, such as certificate of incorporation under the Companies Act 1956, Memorandum of Association, Articles of Association, registration certificate of a firm (if registered), partnership deed, etc. It has now been decided that in addition to the above mentioned documents, <st1:PersonName w:st="on"><st2:title w:st="on">PAN</st2:title> <st2:Sn w:st="on">Card</st2:Sn> may also be accepted as a suitable document for establishing the relationship with the company / firm.</font></p> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName w:st="on"><st2:GivenName w:st="on"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2007/rbi07cir014.htm" target="_blank">A.</a></u></st2:GivenName><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2007/rbi07cir014.htm"><u> <st2:Sn w:st="on">P.</st2:Sn> (DIR Series) CIRCULAR NO. 14 /RBI., Dated: <st1:date ls="trans" Month="10" Day="17" Year="2007" w:st="on">October 17, 2007</u></a></font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Why the shares fell and how did they rise?</b> </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government clarified in a Press Note,</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">In consultation with the Reserve Bank of <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region> and the Securities and Exchange Board of India, Government proposed to take certain measures to moderate capital inflows. These measures are in the overall interest of the economy and of the market and investors.</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The proposed measures include some kind of restrictions on issue of offshore derivative instruments by FIIs and their sub-accounts in relation to their exposure in market. Neither do these suggest nor is there any intention to ban issue of such instruments by FIIs.</font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">These proposed measures have been put on SEBI website for public comments based on which a view would be taken by the authorities.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Did the share market fall so badly just because the Government wanted to ask certain questions? And does it rise just because the FM says things are fine. Normally a Government takes pride in a rising Stock Market, but the FM said, “The rather steep rise in the Sensex sometimes surprises me, sometimes worries me, I don't think the fundamentals change so rapidly from day to day."</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SEBI Chairman says, <font color="#663399">"Those that are eligible, please come in through the front door ... instead of coming through the PN route" </font></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region>'s huge black money that is being invested in the stocks?</font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner – tomorrow's cases</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Limitation?</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">When no limitation is prescribed, it cannot be more than five years - HC right in allowing writ at notice stage as Revenue could not have decided issue of limitation : Supreme Court </font></b></font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>should be the reasonable period for reopening an order of assessment under the Punjab General Sales Tax Act is the question involved in this appeal which arises out of a judgment and order passed by a Division Bench of the High Court of Punjab and Haryana.<O:P></O:P></font></p> <p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anti-dumping</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">HC upholds DGAD's decision to terminate probe into imports of hot rolled coils - All reasonable chances given and well reasoned order passed - loss to steel manufacturers was due to inefficiency, not dumping</font></b></font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong><O:P></O:P>this writ petition the petitioners challenge the order dated 27th August, 2003 passed by the Designated Authority under Section 14(b) of the Customs Tariff Act, 1995 and Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Article and for Determination of Injury) Rules, 1995 whereby the Designated Authority in the Directorate of Anti-Dumping in the Ministry of Commerce, informed the petitioners of its decision to terminate anti- dumping investigation into imports of Hot rolled coils, Sheets, Plates and Strips originating in or exported from South Africa, Rumania, Venezuela, Saudi Arabia, European Union, Australia, Canada and Singapore. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">BHEL - a representative assessee on behalf of foreign company - Dispute between Govt and PSU - Clearance from Committee on Disputes, not required : Madras HC</font></b></font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>AS</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>per the directions of the Supreme Court in the ONGC case, disputes when both sides are government - departments or PSUs, no appeal can be filed unless permitted by a Committee On Disputes (COD).</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, BHEL, a PSU had filed Income Tax return on behalf of a foreign company and the question is whether the Income Tax Department should have taken clearance from the COD for filing the appeal against BHEL? </font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for the judgements</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>