 TIOL-DDT 1891
02.07.2012
MONDAY ARE you liable to pay Service Tax? Every time there is a money transaction in your much-taxed life, please ask this question. Justice MC Chagla once remarked that at every moment in our life, we either comply with or contravene a law. This is more so now with all kinds of unspecified services being taxable. CBEC has over a period of time learnt that teaching the assessees to swim by distance learning would not work; the best way is to push them into the water – they will either swim or sink – it's their fate! The much-hyped ACES is in deep trouble, but the fact remains that returns are being filed online and payments are being made electronically. So they plunged the nation into ‘Negative List' regime yesterday with hundreds of serious doubts yet to be clarified. They will be clarified as we go on the dark path and in any case, the final diagnosis (post mortem) will reveal what the disease was and maybe after a Supreme Court order and a retrospective amendment to nullify that order, we will all understand the law better. We had raised two important issues: 1. That the levy of Service Tax itself was not valid with effect from 1st July 2012, and 2. That Education Cess was not leviable on Service Tax with effect from 1st July 2012.
Board solved both the problems by issuing Orders under Removal of Difficulties under Section 95(1) (I), though in the second case, they used the Order, a Circular and the General Clauses Act apart from a D.O Letter from the JS, TRU to wriggle out of the situation. In the British Parliamentary system, there is a concept that, “the King can do no wrong”. There is an axiom in the Indian Democracy that the “Babu can do no wrong”. Even if he (especially a Revenue Babu) does wrong, it can be declared as right by the babu himself and in this, he treats the Supreme Court and the Parliament of India as subordinate offices of the Revenue Board. Anyway, some major calamities were averted and we are now into the second day of the new regime. It's a reality – let's grin and bear it. The JS, TRU suggests a HUG - Helpfulness, Understanding and Guidance. Finally, in spite of our scathing criticism, it must be admitted that the TRU Team had undertaken a gigantic task and they have been successful to a large extent due to the dedication and hard work (for hardly any reward) of the TRU officers. A bear HUG to them – and we hope they would accept constructive criticism and to rectify the mistakes to ultimately make the life of the assessee less miserable. TRU DOF. No. 334/1/2012-TRU, Dated: June 29, 2012 CBEC Circular No. 160/11/2012-ST , Dated: June 29, 2012 Order No. 2/2012 in F. No. 334 / 1 /2012 -TRU , Dated: June 29, 2012 Correction By Corrigendum – Unfair Legislative Practice THEY are making so many mistakes that perhaps even they feel bad to approach the Law Ministry and other high dignitaries to get their mistakes corrected. So they have resorted to the much easier method of a corrigendum. Perhaps there is nothing wrong in a correction by corrigendum, but the problem is nobody knows how many corrigenda are issued, for they are not even properly numbered. In less than one month, they issued eight corrigenda to one notification. Maybe there should be a numbering system for the corrigenda and perhaps, we will have more corrigenda than notifications! On 29th June, the Government issued two corrigenda. 1. In Notification No. 30/2012-S.T dated 20.06.2012 – this Notification deals with the extent of Service Tax payable by the person liable to pay Service Tax – there is one category - an individual advocate or a firm of advocates by way of support services – Now they have realized it is Legal and not Support and so the corrigendum. 2. In Notification No. 31/2012-S.T dated 20.06.2012 – exemption to taxable services used for export of goods - in proviso (d), it is mentioned, ¶the exporter shall submit with the half yearly return, after certification, the documents in original specified in clause (b) and the certified copies of the documents specified in column (4) of the said Table;¶ Unfortunately, there is no column (4) in the Table in the notification and so, the corrigendum.
Corrigendum to Notification No. 30/2012-Service Tax Corrigendum to Notification No. 31/2012-Service Tax Service Tax Rebate - New Notification Issued GOVERNMENT has issued a new notification in place of Notification No. 52/2011 S.T dated 30.12.2011 to regulate the rebate of Service Tax paid on the taxable services which are received by an exporter of goods (hereinafter referred to as the exporter) and used for export of goods, subject to the extent and manner specified. - The rebate shall be granted by way of refund of service tax paid on the specified services. - The rebate shall be claimed either on the basis of rates specified in the Schedule of rates annexed to the notification or on the basis of documents. - No CENVAT credit of service tax paid on the specified services used for export of goods has been taken under the CENVAT Credit Rules, 2004; - The rebate shall not be claimed by a unit or developer of a Special Economic Zone.
Detailed procedure on claiming the rebate is also given in the Notification. Notification No. 41/2012-Service Tax; Dated June 29, 2012 Service Tax - Service by Foreign Commission Agents GOVERNMENT has issued a new notification for the new regime exempting the Service provided by a commission agent located outside India and engaged under a contract or agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him. The exemption is as is in excess of the service tax calculated on a value up to ten per cent of the free on board value of export goods for which the said specified service has been used, subject to the conditions specified. In the previous version, the exemption was restricted to one percent of the free on board value of export goods. That was when the tax rate was 10%. If you have understood so far, there are other complications to dissuade you from claiming the exemption. Notification No. 42/2012-Service Tax; Dated June 29, 2012 Tariff Value - Brass, Poppy Seeds, Gold and Silver GOVERNMENT has decreased the tariff values of Brass Scrap (all grades) from USD 4113 to USD 4096. The tariff value of poppy remains at USD 5611. The Tariff Value of Gold is decreased from 524 to 507 USD per 10 grams and the tariff value of silver is decreased from 938 to 871 per kilogram. There is no change in the tariff value of other items. Notification No. 55/2012 - Cus.,(N.T.), Dated: June 29, 2012 No MEP for Export of Onions GOVERNMENT has amended para 2 of Notification No.116(RE-2010)/2009-14 dated 08.05.2012 with immediate effect that “Export of onions will be allowed without any MEP(Minimum Export Price) till further orders.¶ Notification No. 03/(RE-2012)/2009-2014., Dated: June 29, 2012 Annual Return by LLPs – Time extended GOVERNMENT has extended the time limit for filing Annual return by Limited Liability Partnerships (LLPs) to 31st July 2012. Ministry of Corporate Affairs Circular No. 15/2012 , Dated: June 29, 2012 DDT Cartoon THIS is a cartoon by 14 year old Shreyans Bhansali whose father Arvind Bhansali is a senior Taxation Executive. What Shreyans conveys is perhaps the agony of his father and all assessees after the Negative List of Services was announced. 
Jurisprudentiol – Tuesday's cases  Central Excise
There is no requirement in rules that invoice number should be printed on invoice – only requirement is that invoice should be serially numbered - denial of CENVAT credit on ground that invoice number was handwritten or rubber stamped is not proper: CESTAT THE appellants were denied CENVAT Credit on the ground the invoice number was handwritten or rubber stamped but not printed. One may think that such issues are passé in Central Excise but that is not the ground reality. Even the Commissioner(A) who is supposed to dispense justice found it convenient to go with the department stand. In the result, the appellant is before the CESTAT. Income Tax Whether an allowance, which has been decided in any proceeding by way of appeal or revision can still be rectified u/s 154 - NO: Bombay HC THE CIT commenced proceedings u/s 263 seeking to revise the assessment on the ground that the Respondent was allowed a deduction u/s 35D and the same was erroneous and prejudicial to the interest of revenue. This was on the basis that the aforesaid expenses were incurred in connection with private placement of equity shares, while the deduction u/s35D(2)(c)(iv) was available only in respect of public issue of shares. The CIT dropped the proceeding u/s 263. The Order dropping the Section 263 proceedings did record that the same was without prejudice to any action that may be taken by the department u/s 147. Thereafter, a notice u/s 148 was issued. The AO confirmed the reopening of the assessment and disallowed the claim for deduction on account of amortisation u/s 35D. The CIT (A) held that reopening of assessment u/s 147 was not sustainable in as much as the AO could have no reason to believe that income chargeable to tax had escaped assessment. Service Tax Services provided by Canara Bank in relation to payment of pension, transactions of various departments, public deposit, RBI Bonds, EPF, special deposit scheme, senior citizens saving scheme, compulsory deposit scheme are NOT taxable services: CESTAT PURSUANT to investigation and issuance of a show-cause notice, it was held that services provided by Canara Bank in relation to payment of pension, transactions of various departments, public deposit, RBI Bonds, EPF, special deposit scheme, senior citizens saving scheme, compulsory deposit scheme are to be treated as taxable service. So also, the services of treasury service where the government does not have its own treasury and Canara Bank maintains currency chests on behalf of Reserve Bank of India (RBI) were also treated as taxable services. In sum, the adjudicating authority viz. Commissioner of Service Tax (LTU), Bangalore confirmed the demand of service tax of Rs.5,97,47,205/- with interest and also imposed penalty under Sections 76, 77 and 78 of Finance Act, 1994. See our columns Tomorrow for the judgements Until Tomorrow with more DDT Have a Nice Day Mail your comments to vijaywrite@taxindiaonline.com |
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