AS per Notification No.64/1995-Central Excise, dated: March 16, 1995, Government has exempted Fuels falling under Chapter Heading 2710 manufactured and supplied by Indian Oil Corporation Limited as stores for consumption on board a vessel of the Indian Navy or Coast Guard; or procured by Indian Oil Corporation Limited from any other manufacturer of the said fuels and supplied as stores for consumption on board a vessel of the Indian Navy or Coast Guard subject to certain conditions.

Now this facility is extended to 'any Public Sector Oil Company'.

Notification No. 30/2010-CX, Dated : June 22, 2010

Procedure for clearance of State SEZ Bills

MINISTRY of Home Affairs and Department of Commerce have agreed for a faster procedure for clearance of State SEZ Bills. As per the procedure agreed, Department of Commerce takes responsibility of having consultation with all concerned Department of the Government of India to create consensus among them and send its recommendation along with the no objection of different Departments of the Government of India to MHA for final approval. Ministry of Home Affairs would get the President on the Bill. Development Commissioner of SEZ are advised to send a copy of the communication to the nodal Department of the respective State Government.

Ministry of Home Affairs would get the President on the Bill. - What does this mean?

Department of Commerce No.C.4/8/2009-SEZ Dated: July 23, 2010

Complexity on Complex Service continues even after Finance Act, 2010

THE Government brought construction service under Service Tax net in 2004 and 2005 without any proper study of how VAT legislation worked for construction sector. They realized this and brought in the Works Contract service in 2007, reproducing the definitions of Commercial or Industrial Construction/ Construction of Complex Service and Erection Commissioning and Installation Service in Works Contract Service. But they did not know how to clear the mess created by them from 2004. To top it, several clarifications were issued to add to the confusion. With a single stroke amendment of inserting an explanation to the construction services, they tried to put to rest the confusion. The said explanation was termed in the JS(TRU) letter explaining the Budget changes as “expanding the scope of existing services”. As per this explanation,

“Construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer”.

The JS(TRU) post budget letter explains everything except the vital point, whether the amendment is prospective or retrospective. There is a general tendency among the tax collectors that any explanation has retrospective effect. Why not clear the confusion / uncertainty among all by giving a clarification on the effective date of this amendment?

Further, the Works Contract definition given under Section 65(105)(zzzza) contained identical definitions for construction of complex service and commercial or industrial construction service. The explanation expanding the scope of the services has been inserted in Section 65(105)(zzq) and 65(105)(zzzh) and apparently the said expansion of service vide amendment to the Finance Act, 2010 does not apply to the construction services undertaken as works contract under Section 65(105)(zzzza). Given that most of the assessees in the construction sector are assessed under Works Contract, the attempt to extend the scope of construction service would be a futile exercise.

GST Implementation report - What's in it for me?

THE Board had sent copies of the Report of the Group on Implementation of GST to all the Chief Commissioners and DGs to study the recommendations and send their feedback latest by 26 th July 2010 (today).

The Report has generated tremendous interest in the field. Every officer is deeply interested - in his promotion prospects. We have been receiving incessant calls for copies of the reports and our analyses on the promotion prospects. In fact a few officers wanted us to tell them whether they would be in the first list of promotions. Some CCs did hold mega meetings and there were openly expressed fears about erosion of powers and status. The report has created interest in the State Government officers also. In Gujarat, there are 12 Central Excise and Service Tax Commissioners and only ONE VAT Commissioner. Under the new scheme, Gujarat may have at least 24 CGST Commissioners and that may require an equal number of SGST Commissioners. Bonanza all around. Today we bring you a summary of the Report.

The Doctor said, “I treat all”

The Teacher said, “I teach all”

The Lawyer said, “I plead for all”

The Politician said, “I rule for all”

The Babu said, “I serve for all”

The Priest said, “I pray for all”

The Citizen said, “I PAY FOR ALL”

150 Years of Income Tax

THE Indian Income Tax Department is 150 years old. On Saturday, they organised a function in New Delhi to celebrate the event.

All the top Revenue officers from CBDT and CBEC were present along with the Revenue Secretary, the MOS and the FM himself. Picture above also shows CBDT Chairman Moorthy and Revenue Secretary Mitra.

But in maintaining and updating their website, the CBDT is as good as the CBEC – and this is no compliment! You visit the CBDT website, there is not a whisper about the 150 years of Indian Income Tax or the celebration.

Addressing the meeting, Mr. Pranab Mukherjee said, “My long association with the Income Tax Department and experience in public life tells me what is of relevance today may become irrelevant tomorrow. ” But for the CBDT website, nothing is relevant!

The FM also said, “Department is filing appeals in a routine manner without careful thought and examination leading to the Department earning the dubious distinction of being the biggest litigant in the Government of India. I have noticed that some of the appeals filed by the Department have been dismissed by the courts on account of gross delays. These issues require a relook at system of legal and judicial management.”

It is heartening to note that the FM is aware of the clogging of the Judicial Machinery in India by his taxmen - but the sad fact is EVEN HE CAN'T DO ANYTHING.

¶It was only for the good of his subjects that he collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold¶ -   Kalidas

WCO Chief in India - Goes back unnoticed

THE WCO Secretary General Kunio Mikuriya was in India for two days and the Revenue Department failed to arrange a meeting for him with the Finance Minister. He was in Bangladesh before flying into Delhi and in Dhaka he met Prime Minister Sheikh Hasina, while in India he could not get an appointment with our FM. This is a real sad state of affairs in the Revenue Department and CBEC. Even top officers of the CBEC were not aware of the visit of the WCO Chief. The officers who shield the FM from meeting even top dignitaries like the WCO chief are actually doing a great disservice to the nation.

Jurisprudentiol – Tuesday's cases

Central Excise

Valuation - Cost of secondary packing not to be included in assessable value (old valuation rules) – Supreme Court

THE test is whether the packing is done in order to put the goods in a marketable condition. Another way of testing would be to see whether the goods are capable of reaching the market without the type of packing concerned. Each case would have to be decided on its own facts.

Held: the cost of secondary packing in hessian cloth cannot be included in the value of the goods in terms of Section 4(4)(d)(i) of the Act for the purpose of assessment of excise duty.

Income Tax

Is a share-broker entitled to deduction of bad debts which could not be recovered from clients for transactions effected on their behalf - since brokerage receivable forms a part of debt, it does satisfy one of conditions of Sec 36(2)(i) - allowable: ITAT Special Bench

WHETHER the assessee, a share broker, is entitled to deduction for bad debts under section 36(1)(vii) read with section 36(2) in respect of the amount which could not be recovered from its clients in respect of transactions effected by him on behalf of his client besides the commission earned by him. And the answer is YES.

Service Tax/VAT

Providing food in trains is pure sale of goods; constitutional right of State Government to levy VAT cannot be denied just because Centre has collected Service Tax – Refund of Service Tax can be claimed – Delhi High Court

THIS is a VAT case, which held that Service Tax is not leviable on food supplied in the trains under outdoor catering service.

The petitioner is a Government company, providing services, including catering on board the trains run by Indian Railways, under identical contracts between the petitioner-company and Indian Railways. The petitioner has also sub-leased the contract in respect of some trains to various contractors. The consideration for these services is included in the fare charged by Indian Railways from the passengers and the petitioner-company is paid, by Indian Railways, for what it terms as the services, including catering provided by it to the passengers. The petitioner had in the past been paying VAT, in respect of the services on board the trains, including providing of food and beverages and the tax was paid up to 30th April, 2007.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a nice DAY

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