TIOL-DDT 1896
09.07.2012
MONDAY
PLEASE read Board's Circular No. 162 - Service Tax dated 06.07.2012. If you are confused, please read our article Negative Blues-IX: Composition scheme for ongoing contracts. The Board now clarifies,
1. Is it a change in effective rate of tax? - works contracts earlier paying service tax @ 4.8% under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 and now required to pay service tax @12% on 40% of the total amount charged, keeping the effective rate again at 4.8%. NO; as only the manner of expression has been altered.
2. The point of taxation for services provided in respect of taxable works contracts in progress on 01.07.2012 would need to be determined under rule 4 of the Point of Taxation Rules unless there is no change in effective rate of tax. (Can there be a more complicated expression? Why are they trying to confuse the assessees?)
3. The provisions of partial reverse charge would also be applicable in respect of such services where point of taxation is on or after 01.07.2012 under the applicable rule in respect of the service provider.
Circular No. 162/13/2012 -ST., Dated: July 06, 2012
00441089
THIS is not an ISD telephone number but your new accounting code for all services with effect from 1st July 2012. The Code for Other Receipts is 00441090 and penalties is 00441093. The Code for refunds is 00441094.
(i) Service specific accounting codes will also continue to operate, side by side, for accounting of service tax pertaining to the past period (for the period prior to 1st July, 2012);
(ii) Primary Education Cess on all taxable services will be booked under 00440298
(iii) Secondary and Higher Education Cess on all taxable services will be booked under 00440426;
(iv) a new sub-head has been created for payment of “penalty”;
(v) the sub-head “other receipts” is meant only for payment of interest etc. leviable on delayed payment of service tax;
(vi) the sub-head “deduct refunds” is not to be used by the assessees, as it is meant for use by the Revenue/Commissionerates while allowing refund of tax.
Several questions still remain unanswered:
1. Should the Registration be changed when new services are added?
2. Should any classification be shown in the invoice? Or should they simply write Taxable Service?
3. How will the eligibility for CENVAT Credit be determined if the name of the service is not shown in the invoice?
4. What will happen if the Service Tax is paid under the old accounting codes?
Why can't the Board start a customer care centre where authentic, binding and reliable clarifications are given for queries raised by the assessees?
Circular No. 161/12/2012 -ST., Dated: July 06, 2012
FTP - Electronic Bank Realization Certificate (e-BRC) system - Extended
BY Public Notice No.2 (RE-2012)/2009-14 dated 5.6.2012, the issuance and transmission of ‘e-BRC' by Banks to DGFT in electronic form has been made mandatory with effect from 5.7.2012.
Requests have been received from various stakeholders for extension of the date of mandatory issuance and transmission of electronic BRC's on account of lack of readiness.
Accordingly, it has been decided that existing system of physical BRC issuance from bank may be continued further for a period up to 16.08.2012 for smooth transition.
DGFT Public Notice No. 08(RE-2012)/2009-14 ., Dated: July 06, 2012
FTP - Export of additional 4,476 MTs of raw sugar to USA under Tariff Rate Quota
DGFT has allocated additional quantity of 4,476 MTs of Raw Sugar, out of non-levy (free sale) quota for export under tariff rate quota (TRQ) to USA for the US fiscal year 2012 (October 1, 2011 to September 30, 2012). This export will be through M/s. Indian Sugar Exim Corporation Ltd, New Delhi. Earlier 8,300 MTs of raw sugar was allocated for export to USA under TRQ.
DGFT Public Notice No. 09(RE-2012)/2009-14., Dated: July 06, 2012
No Arrest or Imprisonment Under FEMA but COFEPOSA Continues!
AS per Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), a person can be detained with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange.
But under the present FEMA which replaced the FERA, there is no arrest or imprisonment. Now can somebody be detained under the assumption that he may contravene the provisions of FEMA for which there is no imprisonment? In the absence of imprisonment under FEMA, is COFEPOSA not redundant as far as Foreign Exchange violations are concerned?
The Supreme Court does not think so. In a landmark judgement upholding the COFEPOSA provisions, the Supreme Court observed, "After all, the essential concept of preventive detention is not to punish a person for what he has done but to prevent him from doing an illegal activity prejudicial to the security of the State. It is too naïve to suggest that in today's economic scenario of abundant foreign exchange and booming foreign trade, contravention of foreign exchange laws does not pose any threat to the national interest for which a person has to be detained."
In this case, another interesting issue cropped up.
The Order of Detention was passed on 23.9.2009, which was stayed by several court orders. The preventive detention was valid for one year. The Supreme Court judgement came after nearly three years of the detention order. Even if he was detained in 2009, he would have been released in 2010. Now, in 2012, can he be detained because he lost in the Supreme Court? His plea was that therefore, no purpose for the execution of the detention order survives. The Supreme Court did not agree and observed, "The detention order could not be executed because of the contumacious conduct of the second petitioner and, therefore, he cannot take advantage of his own wrong."
We bring you the Supreme Court Judgement today. Please see Breaking News.
DDT Cartoon
Jurisprudentiol - Tuesday's cases
NDPS
Seizure, Storage, Destruction of Narcotic Drugs - Report sought from Police, DRI, Customs Commissionerates: SC
THE problem is both wide-spread and formidable. There is hardly any State in the country today, which is not affected by the production, transportation, marketing and abuse of drugs in large quantities. There is in that scenario no gainsaying that the complacency of the Government or the officers dealing with the problem and its magnitude is wholly misplaced. While fight against production, sale and transportation of the NDPS is an ongoing process, it is equally important to ensure that the quantities that are seized by the police and other agencies do not go back in circulation on account of neglect or apathy on the part of those handling the process of seizure, storage and destruction of such contrabands. There cannot be anything worse than the society suffering on account of the greed or negligence of those who are entrusted with the duty of protecting it against the menace that is capable of eating into its vitals.
Income Tax
Whether when an assessee mistakenly fails to claim a deduction in its return, same can be allowed as additional claim by CIT(A) and Tribunal in exercise of discretions: YES: HC
THE Assessee had claimed a deduction u/s 43B in respect of payment of SEBI fees of Rs.10,00,000/- relevant to A.Y 2005-06. Thus, admittedly, for the relevant A.Y viz. 2004-05, the respondent was not entitled to a deduction in respect of the said payments. The respondent, in the course of the proceedings before the AO, stated that the claim was made through inadvertence. The respondent, however, made a claim of Rs.40,00,000/- u/s 43-B also being payment of the SEBI fees but made on 9th May, 2003 i.e. in the A.Y in question. The AO rejected the claim on the ground that he had no authority to allow any relief or deduction which had not been claimed in the return. The CIT(A) allowed the assessee's claim for deduction u/s 43B. Tribunal dismissed the Revenue Appeal.
Central Excise
Dutiability of Sugar Syrup consumed within factory of production for manufacture of Biscuits having per kg retail sale price not exceeding Rs. 100/- - for period prior to 12.09.2011 as Government has floated a survey for issuance of s.11C notification, pre-deposit of dues waived and stay granted from recovery: CESTAT
THE Bench observed -
"4. We find that on the request of the biscuits manufacturer's Association, Revenue had already floated survey regarding issuance of Notification under sec. 11C of the Central Excise Act and in view of the decision of the Tribunal in the case of M/s Ajmer Food Products P. Ltd., pre-deposit of dues is waived and recovery of the same is stayed during the pendency of the appeals."
See our columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a Nice Day
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