TIOL-DDT 2551
04 03 2015
Wednesday

AS per the existing Section 66D in the Finance Act, 1994, admission to entertainment events or access to amusement facilities, is under Negative List as per Section 66D(j).

Entertainment event is defined under Section 65B(24) as an event or a performance which is intended to provide recreation, pastime, fun or enjoyment, by way of exhibition of cinematographic film, circus, concerts, sporting event, pageants, award functions, dance, musical or theatrical performances including drama, ballets or any such event or programme.

Budget 2015 proposes to delete the clause 66D(j), that is admission to entertainment events, will no longer be under the negative list. The above mentioned clause 65B(24) is also to be omitted.

These changes will come into effect from a date to be notified after enactment of the Finance Bill.

Does it mean that there will be a Service Tax on the tickets for films, circus etc.?

Notification No. 25/2012-ST dated 20.06.2012, is amended by Notification No. 6/2015-ST dated 01.03.2015 to insert a new entry 47 which is as:

"47. Services by way of right to admission to,-

(i) exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet;

(ii) recognised sporting event;

(iii) award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event, where the consideration for admission is not more than Rs 500 per person.".

Now the doubt is whether the words where the consideration for admission is not more than Rs 500 per person apply to all the three items above or only to the third item?

Do they propose to tax film, circus, dance sports etc or do they want to tax only award functions, concert etc.?

Revenue officers, I talked to were of the opinion that all the three classes are to be taxed if the price of the ticket is more than Rs.500/-.

Will the Board clarify?

Clearances by EOUs in DTA - Customs Cess is back, but what about Central Excise cess?

VIDE Notification No 16/2015 CE dated 01.03.2015, Notification No 23/2003 CE dated 31.03.2003 (effective rate of duty on goods cleared by EOUs in DTA) has been amended. The entries at Sl No 1A and 1B in the Table are omitted. These entries were inserted in the last year's budget to exempt customs education cesses (u/s 94 of the Finance Act, 2004) on clearances made in DTA. These entries read as under:

So, with effect from 01.03.2015, clearances by EOUs in DTA will attract customs education cesses.

But, what about education cess leviable on excise duty payable? Maybe the Government would have thought these cesses are exempted under Notification Nos 14 and 15 CE dated 01.03.2015 and they should restore the customs cesses.

But, as per Section 5A of the Central Excise Act, unless specifically provided for in the notification, exemptions under Sec 5A are not applicable to EOUs.

Are the EOUs required to pay education cess on gross amount of excise duty payable? Are they eligible for exemption of education cesses? Will the auditors allow the benefit of exemption to them under Notification Nos 14 CE and 15 CE of 2015?

Why can't the Board explain the above amendments with illustrations explaining the effect of amendments made to Notification No 23/2003 CE in the Budget and the duty payable by EOUs ?

Anti Dumping Duty on Tyre Curing Presses - Resurrection

ANTI Dumping Duty was imposed on "Tyre Curing Presses, except Six Day Light Curing Press for curing bi-cycle tyres" falling under the tariff item 8477 51 00, originating in, or exported from, the People's Republic of China, by Notification No. 01/2010-Customs, dated the 8th January 2010.

This expired on 8th January 2015.

After almost two months of its expiry, the Government has extended its validity till 7th January, 2016.

Mr. Jaitley has repeatedly stated that it is the policy of the Government not to levy retrospective tax. But is he aware of this blatant illegal retrospective anti dumping duty, right under his nose?

Notification No. 06/2015-Customs (ADD), Dated: March 03, 2015

Adjudication in DGCEI cases - Board revises instructions - CBEC Circular No.1000

CBEC had issued instructions in Circular No. 994/01/2015 dated 10.02.2015 on adjudication of cases booked by DGCEI. It seems DGCEI had brought to the notice of the Board certain difficulties in implementing the instructions.

Now, the Board has issued revised instructions.

Show Cause Notices issued prior to 1st March, 2015 shall continue to be adjudicated by the Commissioner before whom the adjudication proceedings are continuing unless the Director General, CEI issues orders appointing a new adjudicating authority in terms of the guidelines above or where Board appoints a new adjudicating authority on the basis of proposal of DGCEI .

Couldn't the Board discuss this with the DGCEI before issuing two circulars - or are they not on talking terms?

This is the Board's Central Excise Circular No. 1000. They started this series in 1994. In Customs they start afresh every year, but in excise, the list goes on - both in the same Board!

CBEC Circular No.1000/7/2015, Dated: March 03, 2015

A Two Member Board

MR. Shashi Bhushan Singh, Member of CBEC retired on 28th February 2015. Now there are only two Members in the Board including the Chairman. The Member Ms. Joy Kumari Chander is to retire in May 2015 and the Chairman Mr. Kaushal Srivastava will retire in June. If they are not able to appoint a Member by May 2015, in June the Board will consist of only the Chairman and no Member and if they are not able to make the appointment till June, then Board will have no Member or Chairman. The next Member to join the Board will become the Chairman in three months if they manage to appoint him by 1 st April. If they wait for four months, they can directly appoint a Chief Commissioner as Chairman.

In the meantime the just retired Member SB Singh has been appointed as Advisor, CBEC for a period of three months or till further orders, whichever is earlier. Perhaps they hope to appoint a few Members within three months.

Ahead of Holi, AP and Telangana go dry as Income Tax seizes Liquor Depots

WATER is not the only ground of dispute between the two new States of Andhra Pradesh and Telangana. Liquor was supplied for the entire undivided State of Andhra Pradesh by the AP Beverages Corporation Ltd, a State Government undertaking. It seems this Corporation owes nearly 9000 crores to the Income Tax Department. With the division of the State, this Corporation also got divided and it seems both the State Corporations do not want to pay the income tax dues, each wanting the other to pay.

The Income Tax Department sealed some depots of the Corporations in both the States and that put a stop to the flow of liquor in two of the highest per capita liquor consuming states. Liquor shops are closed during HOLI and regular consumers stock their requirements much in advance, but this year the Income Tax department seems to have put a spanner in the works.

Stock Markets greet RBI's interest rate cut

IN a surprise move this morning, RBI Governor Dr. Raghuram G Rajan announced his decision to:

• reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect;

• keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL);

• continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and

• continue with daily variable rate repos and reverse repos to smooth liquidity.

Consequently, the reverse repo rate under the LAF stands adjusted to 6.5 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 8.5 per cent with immediate effect.

The stock markets overwhelmingly welcomed this move and saluted the RBI with the SENSEX touching the 30,000 mark for the first time this morning.

Until Tomorrow with more DDT

Have a nice day.