TIOL- DDT 48
07 02 2005
Monday

As per Sl. No.34 of Notification No.21/2002- Cus dt.1.3.2002, crude palm oil and its fractions attract a concessional rate of duty subject to certain specifications like having a carotenoid content in the range of 500 - 2500 mg/Kg. and an acid value of 2 or more.

These specifications were prescribed to prevent the import of refined palm oil in the guise of crude. But importers were faced with a problem that crude of palm oil with these specifications are not available in the International market and even if it available, the carotenoid content gets reduced during handling and transportation. The importers had to face problems with the customs, as on testing, the crude palm oil proved to contain less than the prescribed carotenoid content.

A responsive government has reacted to the problems of the importers and amended the notification to provide for the same concessional rate of duty of 65% for

(1) Crude palm oil with carotenoid range from 250 - 2500 mg/Kg and having an acid value of 4 or more;

(2) Crude palmoleine with carotenoid range from 500 - 2500 mg/Kg and having an acid value of 4 or more;

(3) Fractions of crude palm oil with carotenoid range from 500 - 2500 mg/Kg and having an acid value of 2 or more (this is already available).

For (1) and (2), the exemption is subject to actual user condition, i.e. it should be used for manufacture of refined oil, refined palmoleine, vanaspathi, bakery shortening or inter - esterfied fats and the importer should follow the procedure set out in the Customs (Import Of Goods At Concessional Rate Of Duty For Manufacture Of Excisable Goods) Rules, 1996.

It may be recalled that the exemption from Central Excise duty available to vegetable oils has been withdrawn by notification no. 66/2004 - CE dt.31.12.2004.

Notification No.7/2005 - Cus. Dt.4.2.2005


Avoidance of double taxation-Philippines- Government amends Notification

The Central Government has amended Notification No.GSR 173 (E) dt. 2.4.1996 to substitute Article 15 (1) (b) of the convention with

"If the recipient is present in the other State for period or periods exceeds in the aggregate 183 days in the relevant "previous year" in the case of Republic India or "calendar year" in the case of Republic of the Philippines".

The original Article 15 (1) (b) as per Notification No. 173 (E) dt. 2.4.1996 stood like this

"(b) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant "previous year" in the case of Republic of India or "calendar year" in the case of Republic of the Philippines."

The difference between these two is that as per the old notification, period of stay in the other state should not exceed 183 days but as per the present amendment the period should exceed 183 days.

Strangely there is another angle to this story. As per CBDT's website www.incometaxindia.gov.in the notification governing the double taxation agreement between Philippines and India is Notification No.10041 dt.25.3.96. As per this notification article 15 (1)(b) reads as follows:

"(b) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant " previous year " in the case of Republic of India or " calendar year " in the case of Republic of the Philippines."

Will the CBDT please clarify whether the notification is 173(E) or 10041 and whether the stay in the other state should be more than 183 days or less?

Notification No.23/2005 -IT dt.02.02.2005

Education cess by EOUs - Raghavendra Rao formula?

Do you know how to calculate the education cess payable by the EOUs while making DTA clearances? The Development Commissioner of an SEZ, (who is also the Development Commissioner for all the EOUs in his state) the other day in a meeting expressed his anguish that no body is clear on what exactly is the amount payable. He said "now there is the Raghavendra Rao formula". He was referring to Taxindiaonline last week's guest column article by Raghavendra Rao.

What is the customs duty on imported car - 4 different rates?

A senior Customs Officer, now on deputation to a Corporation wanted to know the customs duty on imported car. He called up his colleagues in four major Custom Houses and he was given four different rates!

Central Government employees! Your salary for February is safe

A section of the Electronic Media (not taxindiaonline) had reported that the Government may not be able to disperse the salaries of February 2005 to its employees. The Government has categorically clarified that adequate funds are available to meet all liabilities of the Government including payment of salaries to the employees.

The good news for taxpayers is that the smartest tax experts don't work for the IRS. They were smart enough to realize that taxpayers will pay more to keep their money than the government will pay to collect it.

With more of DDT for tomorrow

Have a Nice Day

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