TIOL-DDT 1987
21.11.2012
Wednesday

BY Circular No. 161/12/2012 dated 6th July, 2012, CBEC had announced a single accounting code 00441089 for all services with effect from 1st July 2012. (Please see DDT 1896 - 09.07.2012).

Board had received suggestions from the field formations that the service specific old accounting codes should be restored, for the purpose of statistical analysis.

So, Board has announced a list of 120 descriptions of services for the purpose of registration and accounting codes corresponding to each description of service for payment of tax.

Board clarifies that:

1. Descriptions of taxable services given in the annexure are solely for the purpose of statistical analysis.

2. On the advice of the office of the C & AG, a specific sub-head has been created for payment of ¶penalty¶ under various descriptions of services.

3. Henceforth, the sub-head ¶other receipts¶ is meant only for payment of interest payable on delayed payment of service tax.

4. Accounting Codes under the sub-head ¶deduct refunds¶ is not to be used by the taxpayers, as it is meant for use by the field formations while allowing refund of tax.

5. Registrations obtained under the positive list approach continue to be valid.

6. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services given in the Annexure.

7. Where registrations have been obtained under the description 'All Taxable Services', the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure.

8. If any applications for amendment of ST-1 are pending with field formations, seeking the description 'all taxable services', such amendment may not be necessary and the officers in the field formations may provide necessary guidance to the taxpayers in this regard.

9. Directorate General of Systems will be making necessary arrangements for display of the list of 120 descriptions of services and their corresponding Accounting Codes in Form ST-1 and Form ST-2 as may be necessary.

Board instructs officers in the field formations to extend necessary guidance to the tax payers regarding the selection of appropriate description of taxable service and facilitate the payment of service tax/cess due under the appropriate accounting code.

In our CobWeb 307 - August 30 2012, we had remarked,

One of the Chief Commissioners rued the loss of service tax code after the introduction of Negative List of Services. The rationale was - the CBEC was, under the old regime (The Positive List), collecting service tax deposited under specific head like telecom, banking, share-broking etc, and such primary data was a good help for the monitoring authorities. Now that, a common code has been provided as none knows what all services are taxable today (for instance, TIOL recently received a query - whether tailoring is liable to service tax?), all taxpayers are required to deposit tax under single code. But the fact remains that a valuable monitoring tool, which could have been saved from falling in disuse, is lost. Earlier, the tax collection under one head used to indicate the trend of growth or slowdown in that specific sector, and any mismatch was a good indicator of flourishing tax evasion in that sector.

With the point being impressively made, the Finance Minister could not resist raising the query - Who did it? Whose idea was this? Silence was obviously the prompt answer. Even before one could let the cat out of the bag, he had made up his mind and called for a fresh look at this issue. And, if the proposal to be put up coming Monday makes sense to him, without causing any chagrin to the taxpayers, one may expect some changes in the service tax return form. Incidentally, a good number of banks are perhaps not aware of the introduction of the Negative List and the notification of the common code, and that is why they have not done away with the service code for depositing tax. If the FM decides to retain the old service codes for earlier notified services, and a common code for new services joining the tax net, which can be allotted fresh code after a year - and after a review based on the quantum of tax mobilisation, the banks can save themselves from making changes at their end. But, a word of caution is necessary for FM here - TIOL has come to know that a few assessees, who deposited their service tax under a different head, were recently issued Show Cause Notice for not paying tax under correct head and have been asked to pay the same again with interest and penalty! The FM will have to put a full stop to this sort of SCN-manufacturing by the insensitive officers in the Department if he intends to see a revival of the business in the economy .

We were told that the old accounting codes would be restored in the first week of September, but it took more than two months -quite normal for Government functioning.

CBEC Circular No.165/16/2012 -ST, Dated: November 20, 2012

Annexure

Exemption to ASTRA - Government Revives Dead Notification

AS per Sl. No. 24 of the Table to the Notification No. 64/95 - CE dated 16-3-1995; Equipment and stores used for the systems and sub-systems of Project ASTRA of the Government of India in the Ministry of Defence are exempted from the whole of excise duty. But this was effective only till31-8-2012. Now the Government has extended this exemption till28-2-2013, but effective from 19-11.2012. There was no exemption for the period 1-9-2012 to 18.11.2012, simply because somebody in the Board was sleeping!

Notification No.39/2012-CX., Dated: November 19, 2012

Similar Mess in Customs

As per Sl. No. 30 of the Table to the Notification No. 39/96-Cus dated 23-7-1996; Machinery, equipment, instruments, components, spares, jigs and fixtures, dies, tools, accessories, computer software, raw materials and consumables required for the purpose of Air-to-Air Missile System (Project ASTRA) of the Ministry of Defence are exempted from the whole of customs duty. But this was also effective only till 31-8-2012. Now the Government has extended this exemption till28-2-2013, but effective from 19-11.2012. There was no exemption for the period 1-9-2012 to 18.11.2012, simply because somebody in the Board was sleeping!

What if there were any imports during this period when there was no exemption? Litigate till Tribunal!

Notification No.58/2012-Cus., Dated: November 19, 2012

Export of Goods and Software - Realisation and Repatriation of Export Proceeds - Liberalisation

RBI had in 2011 enhanced the period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export. This relaxation was available up to September 30, 2012.

Now RBI has decided to extend the above relaxation with effect from October 01, 2012 till March 31, 2013.

RBI A.P. (DIR Series) Circular No. 52; Dated: November 20, 2012

What is ‘Infrastructure Lending'?

LIST of sub-sectors for ‘Infrastructure Lending': A credit facility extended by lenders (i.e. banks and select AIFIs) to a borrower for exposure in the following infrastructure sub-sectors will qualify as ‘infrastructure lending':

RBI/2012-13/297 DBOD.BP.BC.No. 58 / 08.12.014 /2012-13, Dated: November 20, 2012

CBEC Pavilion at India International Trade Fair 2012

REVENUE Secretary Sumit Bose inaugurated the CBEC PAVILION at 32nd India International Trade Fair 2012, at Pragati Maidan, New Delhi in presence of Praveen Mahajan, Chairperson, Central Board of Excise and Customs, Shobha L. Chary, Member (P&V), and Lipika Majumdar Roy Chaudhary, Member (ST) and other senior officers of the department.

This is the first time that CBEC has come up with a pavilion at the IITF. CBEC PAVILION show cases the achievements of the department in administration of all three taxes, viz., Customs Duty, Central Excise Duty and Service Tax with a focus on the NEW APPROACH TO TAXATION OF SERVICES, WHEREIN ALL SERVICES ARE TAXABLE EXCEPT THOSE THAT ARE INCLUDED IN THE NEGATIVE LIST OR ARE IN THE EXEMPTED CATEGORY.

The Pavilion has an interactive format to engage visitors with skits, quiz shows and painting and singing competition for children.

The pavilion has also highlighted the martyrs of the department who have laid down their lives on the call of duty and sports heroes like Leslie Claudius, Anju Bobby George, Gulshan Rai - all Padma Shri awardees. It has also brought out the role of Customs Department in environmental protection by way of GREEN CUSTOMS INITIATIVE.

But how about providing some financial assistance to Leslie Claudius?

Hyderabad Customs Impounds 41 Smuggled Vehicles

HYDERABAD Customs has impounded 41 non-duty paid vehicles and 42,000 litres of smuggled Iranian oil in a campaign launched to curb smuggling, said officials on Monday.

The Hyderabad Customs seized two oil tankers, carrying 42,000 litres of smuggled Iranian high-speed diesel valuing Rs4.2 million. The officials said that three people were arrested in the case. Moreover, a total of 41 non-duty paid or smuggled vehicles valuing Rs3.5 million have also been impounded by the Customs during a special campaign against the smuggled vehicles and cases have been registered against the offenders, as reported by the International News yesterday.

This Hyderabad is in Pakistan.

Jurisprudentiol – Thursday's cases

Customs

Appeal is not maintainable before CESTAT against an order passed under section 110A of Customs Act, 1962 in respect of provisional release of seized goods: CESTAT by Majority

JUDICIAL propriety demands that the decision of the Division Bench is to be followed in preference over the decision of the Single Member, which is passed without taking into consideration the earlier decision, passed by the Division Bench.

Income Tax

Whether non-payment of interest to cooperative bank attracts provisions of Sec 43B - NO: Bombay HC

THE assessee is an individual engaged in the business of trading in cotton bales. For the AY 2004-05, the respondent-assessee filed his return of income declaring a loss. In his return, the respondent assessee had claimed a deduction/expense on account of interest payable by him to Shree Mahalaxmi Mercantile Co-operative Bank Limited on a loan taken. During the course of the assessment proceedings the AO noticed that the amount of interest of Rs.52.85lacs had not been actually paid even upto the date of filing of return of income. Consequently, the AO disallowed the deduction/expenses u/s 43B of the Act and added it back to the income of the assessee.

Central Excise

Soft cotton waste arising during carding and combing of ginned cotton - Process does not amount to manufacture - CESTAT.

THE appellant are a 100% EOU engaged in manufacture of 100% cotton yarn falling under Chapter heading 52.05 for export. In course of manufacture of cotton yarn, soft waste arises at carding and combing stage, which was being cleared by the appellant to DTA without payment of duty. According to Department, soft cotton waste became excisable with effect from 16/3/95 and was chargeable to Central excise duty at 12.5% adv. and the appellant neither paid duty on DTA clearance of soft cotton wash, nor informed the Department about these clearances.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day

Mail your comments to vijaywrite@taxindiaonline.com