TIOL-DDT 664
25.07.2007
Wednesday
Government has exempted recorded smartcards and recorded proximity cards and tags from the whole of the excise duty. Notification No 6/2006 is amended.
Notification No. 31/2007-C.E., Dated July 19, 2007
Customs duty on edible oils reduced
The Customs duty on Soya bean oil has been reduced to 40% from the present 45%. Crude palm oil will also attract the reduced rate of 40%. Sunflower seed oil will attract 40% while edible grade sunflower oil will be charged at 50%. Palm oil not chemically modified will now be charged at 52.5% against the existing 57.5%.
Notification No. 87/2007-Cus., Dated July 23, 2007
Is the National Stock Exchange liable to pay service tax?
Where can you classify the services provided by NSE, BSE, MCX etc., Is it
1. Online information and database access retrieval service, or
2. Business Auxiliary service, or
3. Clubs and Associations
Board has clarified that
1. Not online Data: The activities of the Exchanges and their clearing houses cannot be simply, called the 'online information and database access retrieval service' or 'provision and transfer of information and data processing'. While it is true that the Exchanges/clearing houses do process, exchanges/transfer and provide online data during the course of their business, the same is (i) only incidental to ensure transaction of stocks/commodities and their settlement, and is not the principal service provided by the Exchanges and their clearing houses (ii) no separate charges are collected for information and data processing or access/retrieval by the Exchanges/clearing houses during the course of such trading. The transactions charges collected by the Exchanges are based on the quantum (in money value) of transaction in stock or commodity, as the case may be, and not on the volume of data interchanged/accessed retrieved.
2. Not BAS: These services do not fall under the business auxiliary service, as these are not performed on behalf of any other person.
3. Not a Club: These services would also not fall under the category of services provided by 'clubs and associations' as the Exchanges and clearing houses are corporate bodies which provide service to investor through a registered member as against to its own members.
But where?
Board has clarified that though the activities of the Exchanges/clearing houses are in the nature of 'services', they do not fall under the category of any of the existing taxable services.
However, if service of 'online information' is provided by exchange on payment basis to, say market reporting agency or any other person (i.e. television channels), the same is liable to service tax.
Board is shy of making such important decisions public. These are contained in a letter from the Board to the field.
Letter F. NO. 137/ 57/2006-CX-4, Dated 18-5-2007
Advance Ruling Authority to intimate defects in application within ten days (if possible of course)
As per Regulation 9(2) of the AAR Procedure Regulations any deficiency/defect noticed in the application shall be communicated to the applicant at the earliest. Now this has been changed to ¶as far as possible within ten working days from the date of receipt of the application¶.
The Authority for Advance Ruling (Customs, Central Excise and Service Tax) will be now known as Authority for Advance Rulings (Central Excise, Customs and Service Tax). What difference does it make?
AAR Notification No. 1/2007-AAR., Dated July 16, 2007
FM at the Chief Commissioner's conference
++ Government will conduct ¶high-impact auditing¶ to curb excise duty evasion. The audit would cover those assessees and sectors that are prone to tax evasion.
++ There are some concerns about excise. It is one tax where I think there is high degree of evasion.
++ Government's decision to cut import duties on edible oil would offset high global prices. It is aimed at softening the impact of high international prices.
++ The central excise department would share information with state governments on specific products, industries and cities to spot evasion and non-disclosures.
++ Central excise duty collections during the first quarter of the current financial year stood at Rs 25,161 crore against Rs 23,560 crore in the corresponding quarter of the previous year.
++ Service tax collections grew by 31.6 per cent during the first quarter of 2007-08 and stood at Rs 7,257 crore as compared to Rs 5,514 crore in the corresponding period of the previous year.
++ We are slightly behind on excise, a shade behind on service tax, but at the moment we have no grave concerns in respect to budgetary targets
++ Now, I am confident that with the economy growing at close to nine per cent, the department will be able to meet the budget estimates of Rs 2,78,013 crore
Goodbye Mr. President and Welcome Madam President
The most popular President ever, APJ Abdul Kalam is leaving office today. He was actually a sarkari scientist with a weird hair style, but in the last five years, he became the most popular President India ever had reaching out to the maximum number of people whose first servant he was.
Dr Kalam is the first President to visit the LoC in Jammu and inspect the border fencing.
Seventy-four-year-old A.P.J. Abdul Kalam flew in a Sukhoi-30 fighter plane, becoming the first President to make a sortie in a combat aircraft.
A P J Abdul Kalam has several feats to his name, like being the first president to make a submarine sortie, but probably none as daring as a night-time flight from Aizawl airport that took off after the runway was illuminated with lanterns and torches!
This occurred one evening in 2005 when the President had completed all official engagements at Mizoram and was scheduled to leave the next morning. But a restless Kalam decided to take off for Delhi during the night.
The local IAF station's head informed there were no facilities for taking off from the airport at night. However, a dissatisfied Kalamretorted: ¶What if there is an emergency; Do you wait for morning?
The president's aides went to the IAF official and conveyed the message of Kalam, who is also the supreme commander of the armed forces.
Finally, Kalam had his way and IAF personnel lit up the runway with the help of lanterns, flaming torches and bonfires to facilitate the take-off.
The aides accompanying the President too were concerned about his decision to fly at night from an airport that had only basic equipment and privately asked IAF officials whether such a flight would be safe. The answer ¶you can take off but there may be some problems if you have to return¶.
A P J Abdul Kalam made a historic visit to the Siachen glacier, becoming the first President to visit the world's highest battle ground.
Employees of RashtrapatiBhavan have a special affection for President Abdul Kalam. He is the first president to be concerned with the rear portion of the RashtrapatiBhavan estate where the junior staff live rather than just concentrating on the grand ceremonial front entrance. Kalam has initiated tree planting, allotted land for children's parks, constructed new pavements and renovated or re-built flats for the lower division and upper division clerks.
President A P J Abdul Kalam, became the first President to address the Indian Science Congress in its 90-year existence.
I once took a young girl to one of his meetings. The girl asked me, ¶why did you take me to such a boring shallow speech?¶ The speech was indeed boring - a Vajpayee or an Advani would have certainly impressed more. But here was a humble man who had no stakes and who incidentally was holding the highest office in the country. Just look at the man in the picture, sitting on the floor with two journalists sitting on chairs. If our babus had a fraction of his humility, the governance would have been much better!
And Welcome Madam President! Smt. PratibhaPatil is taking over today as the first lady Rashtrapati. Now no more jokes please, she is our first citizen!
From our Legal Corner - tomorrow's cases
Income Tax
Employer does not credit TDS to Govt - Can it be recovered again from employee by Income Tax? No, says Bombay HC
BEWARE, your employer may run away with your TDS or refuse to give you a TDS certificate! What happens then? Here is a case where the employer did not credit the TDS in government accounts an amount of Rs.6.6 Lakhs, and so the powerful Income Tax department attached the bank account of the employee and recovered from him Rs. 12.7 Lakhs! Imagine the plight of an employee, if Rs. 12 Lakhs of his hard earned money is looted illegally by the taxmen!
Central Excise
Mandatory penalty under Sec 11AC is not maximum - No discretion to reduce penalty : CESTAT Larger Bench
Revenue has won a humungous victory. If penalty is imposable under Section 11AC, now nobody has discretion to reduce the penalty. The Larger Bench held that Once it is held that imposition of penalty under Section 11AC of the Act is warranted, the wordings of Section 11AC do not leave any option for imposing a reduced penalty.
Santogen Textile loses Rs 5 Cr case booked by DGCEI - Not 1/95 - Diversion of raw materials - Duty to be paid by consignee and not consignor if consignee has taken delivery of material : Tribunal
THEY came to Settlement Commission to explore whether that can be a safe haven - they were wrong. They knocked the doors of the Bombay High Court - but a similar fate awaited them there too!
Even a trudge to the Supreme Court resulted in utter failure.
So, what's the case all about - nothing novel, but the oldest trick in the EOU Industry - diversion of raw materials procured duty free.
In classification matters, view of Tribunal should not be interfered with unless patently wrong : Supreme Court
See our columns tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice day.
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