TIOL-DDT 756 · the untouched capture
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<p><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 756</font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
07.12.2007<br>
Friday</font></b></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>FM's Progress report</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Minister, <st1:PersonName w:st="on"><st2:GivenName
w:st="on">P.</st2:GivenName> <st2:Sn w:st="on">Chidamb</st2:Sn></st1:PersonName></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName w:st="on"><st2:Sn w:st="on">aram</st2:Sn></st1:PersonName> addressing the Meeting of the Parliamentary Consultative Committee attached to his Ministry, yesterday claimed, </span></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. FRBM Act was passed as soon as the UPA Government came into power and then the Department of Revenue was energised to improve tax buoyancy.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The tax buoyancy is basically the result of good performance of Indian economy and the new initiatives taken by the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC).</font> </p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 3. The <st1:stockticker w:st="on">TDS</st1:stockticker> administration, refund bankers, tax return prepares scheme, large tax payers unit, E-filing of taxes and business process reengineering are some of the important initiatives which have brought an unprecedented growth of tax collections.</span>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 4. Attitude of people to pay taxes has now been changing. </font></p>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The personal income tax grew by 42.5% and corporation tax by 46.6% during April-November 2007 over the corresponding period of last fiscal.
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6. The overall direct tax collection growth rate is 44.9% during this period.
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7. The number of taxpayers in the country has been increasing.
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8. While the number of assesses increased from 301.78 lakhs in 2003-04 to 319.26 lakhs in 2006-07, the number of assesses filing return of income increased from 234.25 lakhs to 275.44 lakhs during this period.
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9. The number of PANs as on 31st October, 2007 is 5,74,74,806 and around 8 to 9 lakhs PANs are being allotted every year.
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10.PANs de-duplication has been completed in respect of more than 95% cases.
11.Pilot project of State Bank of
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<st1:country-region w:st="on">India</st1:country-region> acting as a Refund Banker has been extended to select charges of four more cities viz., Mumbai, Kolkata, Chennai and <st1:City w:st="on">Bangalore</st1:City> apart from existing cities at <st1:City w:st="on">Delhi</st1:City> and <st1:place
w:st="on"><st1:City w:st="on">Patna</st1:City></st1:place>
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12.Customs duty rates are being decreased continuously, while the excise duty rates have decreased.
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13.The concept of GST-Central and States should come into effect from 1st April, 2010 which would avoid the multiplicity of different kinds of taxes.
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14.The various initiatives taken by CBEC like risk management system for customs, automatic clearance of courier consignment, automation of central excise and service tax, e-payment, large tax payer units, streamlining of customs procedures are some of the major initiatives which contributed buoyancy in collection of indirect taxes.
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15.During April-October, 2007, customs duty increased by 17.4%, central excise by 7.6% and service tax by 36.3% over the corresponding period of 2006-2007. Overall collections of indirect taxes grew by 15% during this period.
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<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName
w:st="on"><st2:GivenName w:st="on"><b><font color="#006600">Chennai</font></b></st2:GivenName><font color="#006600"><b> <st2:Sn
w:st="on">LTU</st2:Sn></span></b></font></st1:PersonName><font color="#006600"><b> - Income Tax Notifications </b></font></font></p><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Commissioner LTU Chennai given the powers of Chief Commissioner, Income Tax; is given jurisdiction over the jurisdiction of the <st1:stockticker w:st="on">CIT</st1:stockticker>, LTU, Chennai and Jurisdiction of <st1:stockticker w:st="on">CIT</st1:stockticker>, LTU Chennai notified. </span></font></p>
<p><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/it07not283.htm" target="_blank">NOTIFICATION NO. 283</a>, <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2007/it07not284.htm" target="_blank">284</a> <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2007/it07not285.htm" target="_blank">285/2007, Dated: <st1:date ls="trans" Month="11" Day="30" Year="2007" w:st="on">November 30, 2007</st1:date></span></a></u></font></p><p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Babus' day out - Foreign jaunt by civil servants - Govt relaxes</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has relaxed the procedure for its babus visiting foreign countries.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) <b><font color="#663399">Private visits abroad for purely personal reasons </font></b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Current Status: </font></b><font color="#663399">- </font>State Governments and Ministries/ Departments of the Government of India have been delegated the power to sanction private visits abroad, which are purely personal, without any sponsorship and not linked to official visit, whether casual leave, earned leave or leave on medical certificate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Further Delegation: -</font> </b>It has now been decided that approval of the respective Cadre Controlling Authorities of the All India Services will no longer be required in the case of private visits abroad, which are purely personal without any sponsorship and not linked to any official visit, on leave due and admissible, whether casual leave, earned leave, half-pay leave, leave on medical grounds and extra ordinary leave. State Governments and Ministries/ Departments of the Government of India may sanction such leave, due and admissible, to a member of the Service as per rules. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) <b><font color="#663399">Visits abroad in conjunction of an official visit / tour abroad </font></b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Current Status: </font></b><font color="#663399">-</font> The State Governments and Ministries/Departments of the Government of India have been delegated the power to accord permission to travel abroad on leave due and admissible in conjunction with an official visit/tour abroad (including training) subject to the exigencies of public service, not exceeding 50% of the actual period of duty abroad (excluding transit time and enforced halt) or a fortnight, whichever is less, for personal reasons provided that the total period abroad (including travel time) does not exceed three weeks. <st2:GivenName
w:st="on">Grant</st2:GivenName> of leave in excess of this limit can be approved only in consultation with the Department of Personnel and Training (Services Division).</span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Further Delegation: -</font> </b>It has been decided to raise the maximum period of ex-India leave in conjunction with official duty to 3 weeks while adhering to the limit of 50% of the period of official duty abroad. However, in the case of official visits of duration less than 8 days, the limit of 50% may be relaxed and ex-India leave upto a maximum of 4 days may be granted. The power to grant such leave is delegated to the State Governments and Ministries/Departments of the Government of India subject to the condition that further leave shall not be permitted above such limits under any circumstances and no reference shall be made to the Department of Personnel and Training in this regard. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) <b><font color="#663399">Visits abroad on direct invitation from foreign organizations for participation in events on the basis of the experience in a particular subject gained by a member of the Service in his/her personal capacity. </font></b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Current Status: </font></b><font color="#663399">-</font> Cadre clearance of the Central Government is required in all cases where the invitation is direct to the officer and the State Government is not bearing the expenditure irrespective of the duration of visit and all cases of more than three weeks duration. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Further Delegation: -</font> </b>It has been decided that State Governments and Ministries/Departments of the Government of India be delegated the power to allow permission for such private visits in which the government is not bearing any expenditure subject to the condition that the total period of ex-India leave does not exceed three weeks. As per the conditions prescribed in the Department of Expenditure's O.M.F.No.19036/1/2000-E-IV dated 21<sup>st </sup>March, 2000, the officer shall be treated as on personal visit and he/she will be required to take leave due and admissible. This is further subject to the condition that generally no Government of India officer will accept free passage or hospitability from a foreign government/agency and, if it is necessary, approval of the Screening Committee of Secretaries or of the Prime Minister should be ensured to be taken before accepting such invitations. Similar provisions should be adopted by the State Governments. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">General conditions:</font> </b>The State Governments and Ministries/ Departments of the Government of India shall keep in mind some general aspects while exercising these delegated powers while granting ex-India leave to the members of the All India Service working under them, as under: </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) The member of the Service will take FCRA clearance from the Ministry of Home Affairs and other required clearances from the Department of Economic Affairs/Ministry of External Affairs, wherever required. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) The delegation shall not apply to any travel abroad in conjunction with leave granted under the provisions of the All India (Study Leave) Regulations, 1960, where the specific clearance of the Central Government is invariably required. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) In cases where a member of the Service proceeds for a visit abroad without obtaining necessary cadre clearance, the period of his absence shall be treated as 'dies non' apart from other consequences under the service rules. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) The provisions of Rule 7(1) and (2) of the All India Service (Leave) Rules, 1955 should be complied with. Rule 7(1) provides that no member of the Service shall be granted leave of any kind for a continuous period exceeding 5 years. Rule 7(2) provides that a member of the Service shall be deemed to have resigned from the service if he is absent without authorization for a period exceeding one year or remains absent from duty for a continuous period exceeding 5 years, with or without leave. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e) If the visit abroad requires the sanction of the Central Government, proposal should be forwarded to the Central Government well in time, i.e., at least before a fortnight from the date of commencement of the visit in a self-contained format furnishing all the relevant details in the prescribed format (copy enclosed). </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f) Approval of the Central Government with respect to travel abroad of members of All India Services, wherever required shall mean the approval of the concerned Cadre Controlling Authority, i.e., the Department of Personnel and Training for the Indian Administrative Service, the Ministry of Home Affairs for the Indian Police Service and the Ministry of Environment and Forests for the Indian Forest Service. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/pdfdocs/foreign.pdf" target="_blank">Ministry of Personnel, Public Grievances and Pensions No.11019/06/2001-AIS-III dated 5th December, 2007</a></u></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Are sections 6 & 12 of the <st1:stockticker w:st="on">CEA</st1:stockticker>'44 no longer relevant?</span></b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday we received a mail from a Netizen with the following poser - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise Rules, 1944 were made in exercise of the powers conferred by Sections 6, 12 & 37 of the Central Excises and Salt Act, 1944.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both, the Central Excise Rules, 2001 & the Cenvat Credit Rules, 2001 had been made in exercise of the powers conferred by Section 37 of the <st1:stockticker
w:st="on">CEA</st1:stockticker>'44. </span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise Rules, 2002 have been made in exercise of the powers conferred by Section 37 of the Central Excise Act, 1944.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, the Cenvat Credit Rules, 2004 have been made in exercise of the powers conferred by Section 37 of the <st1:stockticker w:st="on">CEA</st1:stockticker>, 1944 and section 94 of the Finance Act, 1994 & in supersession of the Cenvat Credit Rules, 2002 and the Service Tax Credit Rules, 2002.</span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The point of doubt is as to<font color="#FF6633"> <b><i><font color="#663399">whether there is no longer a requirement to refer to the Sections 6 & 12 of the <st1:stockticker w:st="on">CEA</st1:stockticker>'44 while making the Rules. Is it an un-intended omission or a purposeful one?</font></i></b><font color="#663399"></span></font></font></font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Can we have an answer to this seemingly innocent question?</b></font></p><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Jurispruden</font><font color="#663399" size="5">tiol</font>-<font color="#006600"> Monday's cases</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><strong><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></strong></b></font></b></font></b></font></b></font></b></font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise </b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6633">Education cess is payable even if excise duty is exempted: Shimla HC</font></b></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b></b><strong>THIS</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> shocking judgement came from the Shimla High Court and for some time we had considered not carrying this judgement as it may create a flutter or may be followed by other Authorities or even accepted by the government! But hiding a judgement is not the solution and so we bring you this judgement.</font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service Tax </b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6633">Service Tax - Section 76 is also subject to provisions of Section 80 - Commissioner (A) has discretion in reducing penalty - Revenue appeal dismissed : CESTAT</font></b></font></p><p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>THE</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> assessee had neither filed any returns nor deposited the Service Tax collected from their clients. Later, they admitted their tax liability and discharged the same. The lower authority imposed penalties & against the said order the assessee went in appeal before the Commissioner(Appeals) who found the penalties to be excessive. In effect, he reduced the same to Rs.15,000/- under all the sections viz. 76, 77 & 78 of the Finance Act, 1994. </font></p><p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax </b></font></p><p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Assessee hires non-resident company for geophysical airborne survey for prospecting diamonds - No <st1:stockticker
w:st="on">TDS</st1:stockticker> deductible as no technical knowledge made available to assessee - not covered under 'fees for technical service' under DTAT with Netherlands : ITAT</span></b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THE</font> </strong>''fees for technical services'' under Double Taxation Avoidance Agreement (DTAA) has of late emerged as a major bone of contention in Income Tax. Even in this case, the issue is <b><font color="#FF6633">whether certain high quality technology aided service provided by a non-resident company to the assessee would qualify as a technical service or not?</font></b></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 <b>DDT</b></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice Weekend.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a
href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p>
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