TIOL-DDT 942 · the untouched capture
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<p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 942 </font></strong><strong></strong></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><strong><br>
02.09.2008 <br>
Tuesday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Determination of Origin of Products under the Duty Free Tariff Preference Scheme for Least Developed Countries Rules, 2008 </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has notified the Customs Tariff (Determination of Origin of Products under the Duty Free Tariff Preference Scheme for Least Developed Countries) Rules, 2008 and consequently exempted certain goods imported from the Kingdom of Cambodia and The United Republic of Tanzania from duty of customs as is in excess of 80 per cent of the applied rate of duty by Notification No. 96/2008-Customs, dated the 13 th August, 2008. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, The Federal Democratic Republic of Ethiopia; Republic of Mozambique; Samoa; Malawi and Lao People's Democratic Republic are added to the list. </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=23&filename=notification/custom/2008/ctariff08_099.htm" target="_blank">Notification No. 99/2008 – Cus. Dated: August 28, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap reduced and Poppy seeds increased </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has reduced the Tariff Value of Brass Scrap from 4507 US Dollars to 4295 and increased the Tariff Value of Poppy Seeds from 5030 Dollars to 6898 Dollars. </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=24&filename=notification/custom/2008/cnt08_104.htm" target="_blank">Notification No. 104/2008-Cus. (N.T.), Dated: September 1, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Overseas income of an Indian Association/ Resident Indian – To be added to taxable income and then relief to be granted under DTAA </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Government has notified that where an agreement entered into by any specified association in India with any specified association in the specified territory outside India and adopted by the Central Government by way of notification in the Official Gazette, for granting relief of tax, or as the case maybe, avoidance of double taxation, provides that any income of a resident of India "may be taxed" in the other country, such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Income-tax Act, 1961 and relief shall be granted in accordance with the method for elimination or avoidance of double taxation provided in such agreement. </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=35&filename=notification/cbdt/2008/it08not090.htm" target="_blank">IT Notification No. 90</a><strong> and </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2008/it08not091.htm" target="_blank">91/2008, Dated: August 28, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Foreign Exchange (Compounding Proceedings) Rules, 2000 amended to enhance monetary limits </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 4 of the Foreign Exchange (Compounding Proceedings) Rules, 2000, certain contraventions can be compounded by </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) in case where the sum involved in such contravention is <strong>five </strong> lakhs rupees or below, by the Assistant General Manager of the Reserve Bank of India ; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) in case where the sum involved in such contravention is more than rupees <strong>five </strong> lakhs but less than rupees <strong>twenty </strong> lakhs, by the Deputy General Manager of Reserve Bank of India ; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) in case where the sum involved in the contravention is rupees <strong>twenty </strong> lakhs or more but less than rupees <strong>fifty </strong> lakhs by the General Manager of Reserve Bank of India : </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) in case the sum involved in such contravention is rupees <strong>fifty </strong> lakhs or more, by the Chief General Manager of the Reserve Bank of India: </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now all these figures are doubled – that is for five lakhs read ten lakhs, for twenty lakhs read forty lakhs and so on. </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=236&filename=notification/fema/rules/femanotification.htm" target="_blank">NOTIFICATION NO. G. S. R. 613(E) DATED 27-8-2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Direct Receipt of Import Bills / Documents – RBI announces Liberalisation </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With a view to liberalizing the procedure, it has been decided to enhance the limit for direct receipt of import bills / documents to USD 300,000. Accordingly, AD Category – I banks may make remittances for imports, where the import bills / documents have been received directly by the importer from the overseas supplier and the value of import bill does not exceed USD 300,000, subject to the following conditions : </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The import would be subject to the prevailing Foreign Trade Policy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The importer is a customer of AD Category – I bank and the customer's account is fully compliant with extant KYC / AML guidelines issued by the Reserve Bank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) AD Category - I banks should do the due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) It is customary in that trade to receive import documents directly from the overseas exporter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) In case the AD Category – I bank has suspicions about the genuineness of the transaction, it should be reported through the Suspicious Transaction Report (STR) to FIU_IND (Financial Intelligence Unit in India). </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2008/rbi08cir013.htm" target="_blank">RBI/2008-09/149 A. P. (DIR Series) Circular No.13 Dated September 01, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SSI exemption to branded goods – Govt amends notification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was only yesterday that DDT carried the story on the Board Clarification on SSI benefits to branded goods captively consumed. It seems the Government had issued a notification yesterday extending the benefit to certain goods. For love or money, we couldn't get the elusive notification and we hope to bring it to you later in the day. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Dr. D. Subba Rao to be new Governor of RBI </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/dsubbarao.jpg" alt="Legal Corner Icon" width="66" height="88" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Duvvuri Subba Rao, the IAS topper of 1972 is to be the new Governor of Reserve Bank Of India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Everybody expected Venugopal Reddy, the present Governor to get an extension and in that unlikely event, there were many in the field, but finally it is the scholarly bureacrat Subba Rao. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rao is an engineering graduate from IIT and a Doctorate in Economics from Andhra University. Academically, he has the best credentials having been a fellow of the MIT. He had his schooling in Sainik School, Korukonda. From sainik School to IIT to MIT to Ohio to Andhra University, it had been a fruitful scholastic journey with the IAS topper added somewhere in between. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Rao will have to do a lot of fiscal engineering in the RBI as we are going through tough times. <strong>TIOL </strong> wishes Rao all the best. <strong>DDT </strong> tried to contact him but came to know that he is out of the country. We will try to catch up with him as soon as possible. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - Delay in filing appeals to High Court - Certain amount of leverage or relaxation for departmental functions would be permissible, but this cannot be extended to the limits protecting negligence and irresponsibility – CBDT directed to issue Circular to ensure timely filing of appeals – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the beginning of the last century, Lord Curzon, the Viceroy was frustrated with the Bureaucratic delays. Nothing seems to have changed as the Bombay High Court realised recently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court has directed the CBDT to issue a circular to ensure that appeals are filed on time. Maybe the CBEC can issue a similar circular without waiting for strictures from some other Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring this important High Court order today. Please see <strong>our <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7806" target="_blank">Breaking News.</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">– Tomorrow's cases</font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">I-T - Software duplication - royalty payment to non-resident parent company at 30% of IPP - AO invokes old Sec 92 - Onus to find a comparable case for ordinary profit is on Revenue - Oracle India's appeal allowed: ITAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>assessee in this case is a noted software developer Oracle India Pvt Ltd. And the bone of contention is royalty payment. The assessee pays royalty to its non-resident holding company M/s Oracle Corporation, USA for duplicating and sub-licensing of software to its customers. The assessee declares to the AO that it has been paying royalty at the maximum rate of 30% of the Indian Published Price (IPP). The AO raises objection to such a high rate of royalty payment and asks the assessee to justify as to why provisions of section 92 should not be invoked. The AO further notes that the transaction between the assessee and its non-resident parent company has been arranged in such a manner that the assessee company is earning lesser revenue because more royalty is paid to the holding company. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Disciplinary Action - Enquiry Officer himself has acted as the Investigator, Prosecutor and Judge. Such a procedure is opposed to principles of natural justice and has been frowned upon – Supreme Court </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Here is a case of a forest guard who was dismissed from service in 1986, was ordered to be reinstated by the High Court in 2005 and the aggrieved State taking the matter to the Supreme Court, which has now confirmed the High Court order. A 22 year ordeal for a lowly guard – against the might of the State! How much money the guard must have spent to reach the Supreme Court! </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Prima-facie, transaction charges paid to National Stock Exchange cannot be held to be reimbursable amounts from clients - Not excludible from service charges - Pre-deposit ordered: CESTAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPELLANT</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong> is a registered stock broking member of National Stock Exchange. In addition to their brokerage they are also collecting transaction charges from their clients. As per Circular dated 11th December, 2000 issued by the National Stock Exchange of India, the transaction charges are payable by the Trading Members of the stock exchanges. The amount is determined on the basis of turnover of the Trading Members and various slabs are fixed, (i) for turnover less than Rs.200 Crores, (ii) for turnover between Rs.200 Crores to Rs.600 Crores, and (iii) for turnover above Rs.600 Crores. The appellant was issued a show cause notice by the Jurisdictional Service Tax Commissioner proposing to include the said transaction charges in the value of taxable service and levied service tax (inclusive of Cess) amounting to Rs. 52.6 lakhs and imposed penalty. Interest was also demanded. In addition to this an amount of Rs. 8.95 lakhs was alleged as inadmissible CENVAT credit on the ground that there is no evidence of service tax registration of the service providers. Confirmation of the demands and imposition of penalty followed as usual. </font></p>
<p align="justify"><font color="#663366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6666">Until Tomorrow with more DDT </font></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>
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