TIOL-DDT 2109
21.05.2013
Tuesday
ON 11.4.2013, the CESTATordered a pre-deposit of Rs. 80 Crores on Bharti Airtel [ 2013- TIOL-654- CESTAT-DEL ], out of a demand of about Rs. 118 Crores pertaining to free telephone service provided to employees and associates for the period from 2004 to 2009. Bharti Airtel quickly moved the Delhi High Court and got a relief of Rs. 55 Crores. The High Court directed payment of pre-deposit of Rs. 25 Crores by 31.05.2013.
See 2013-TIOL-426-HC-DEL-ST
CBEC allows filing of revised return for the period July to September 2012
AFTER all that hullabaloo and the extensions granted for filing the return for the period July to September, 2012, which ended on 30 th April, 2013 the following announcement was made by the Board on its ACES website -
CBEC has accepted the Service Tax returns for the period July-September, 2012, which were rejected by system on the sole ground that these returns were filed for the period prior to the dates of registration of the assessees, as valid returns. These returns have been reprocessed in ACES and the status of these returns is being shown in the systems as 'filed'. These assessees, need not file the returns again for the same period and they can view the status of their returns in ACES under 'View XML Status' option. However, if the returns were rejected for any other reason, the assessees are required to take corrective action as per the reasons of rejection.
After we carried this news in DDT 2101, we received many calls from assessees who wanted us to tell about the facility of filing revised return for the period under consideration. We were as much in the dark as they were .
Fortunately, the CBEC has now flashed a What's New ticker on its website www.aces.gov.in informing as under -
Service Tax Returns (ST 3) for the period July -Sept, 2012,e-filed in ACES, can now be viewed by the Assesses under 'View Original ST3' and 'View ST3' options under the RET module of ACES with a facility to revise it, if required. The Revised return can be filed by the assessee within 90 days from the date of filing of the Original Return.
DDT joins the assessees in heaving a big sigh of relief.
FEMA - Export of Goods and Software - Realisation and Repatriation of export proceeds - Period Reduced
In November 2012, the Reserve bank of India had extended the enhanced period for realization and repatriation to India, of the amount representing the full value of goods or software exported, from six months to twelve months from the date of export. This relaxation was available up to March 31, 2013.
The issue has since been reviewed and it has been decided, in consultation with the Government of India, to bring down the above realization period f rom twelve months to nine months from the date of export, with immediate effect, valid till September 30, 2013.
RBI/2012-13/503; A.P. (DIR Series) Circular No. 105 -Dated: May 20, 2013
Transaction Cost - Constitution of 2nd Task Force
PRESENTING the Annual Supplement 2013-14 to the Foreign Trade Policy on 18.04.2013 , the Commerce Minister Anand Sharma said,
It may be recalled that we had constituted a Committee for addressing the issue of high transaction costs and the measures which were taken had resulted in reduction of transaction cost of Rs. 2100 crore. Subsequently, some more measures were taken which have further reduced transaction cost by Rs. 395 crore. I am happy to announce constitution of 2nd Task Force on Transaction Costs which will submit its report in a 6-months period .
In pursuance of the announcement made by the Commerce Minister on 18.4.2013, the Second Task Force on Transaction Cost has been constituted under the Chairmanship of Director General of Foreign Trade under following terms and reference:
1.To identify reasons for high transaction cost in exports.
2.To identify areas, where Indian exporters face administrative impediments that lead to increase in transaction cost.
3.Compare procedural complexities in exports between India and its major competitors.
4. Suggest guidelines/ steps for removal of procedural complexities drawing from the global best practices.
5. Suggest guidelines/ steps to move towards transparent and increasingly paperless processing through digital platform.
All stakeholders, administrative Ministries/Departments of Government of India/ State Governments and Trade & Industry Bodies are invited to send suggestions for consideration of the task force at transactioncost@nic.in. Suggestions can be sent preferably by 17.6.2013.
DGFT Trade Notice No. 02/2013, Dated: May 20, 2013
Putting electrolytes and charging batteries of two-wheelers before delivery to customers prima facie does not amount to manufacture of TWO-WHEELERS
FOR a moment, we were STUNNED & shocked when we read the case.
But then, this is not SURREAL but reality for three "dealers" of two-wheelers in Nagpur who have demands confirmed them against them by the Commissioner of Central Excise, Nagpur on the ground that what the dealers were doing surreptitiously was MANUFACTURE of a two-wheeler.
The facts - The applicants are dealers of two-wheelers. The applicants are purchasing duty paid two-wheelers from the manufacturer and before supplying to their customers the appellants are putting electrolytes in the batteries and charging the same. The case of the Revenue is that this activity amounts to manufacture of two-wheelers.
The Bench took up the stay applications filed by all the three ‘dealers' against whom demand of Central Excise duty was confirmed one after the other last December.
The Bench observed -
"3. We find that the applicants are only dealers of the two-wheelers and only putting electrolytes and charging the batteries. Prima facie this activity cannot be considered as manufacture of the two-wheelers. In view of this, the pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeals. Keeping in view the nature of the issue, the Registry is directed to list these appeals for regular hearing…"
DDT is curious to know (like everyone who will read this) as to whether the two-wheelers of the customers have been impounded by the Nagpur Commissionerate for being clandestinely removed without payment of duty and whether the customers themselves have been made co-noticees in these proceedings for imposition of penalty!
Is the Board aware of this ELECTRIFYING case?
See 2013-TIOL-762-CESTAT-MUM
Jurisprudentiol - Wednesday's cases
Central Excise
Since there is no difference of opinion that the demand which is confirmed by invoking extended period is liable to be set-aside on the ground of Revenue neutrality, appeal allowed with consequential relief: CESTAT by Majority
ALL the three show cause notices, which raise the demand on the appellant, are for the period beyond one year. Since there is no difference of opinion between the Members, that the demand which is confirmed by invoking extended period is liable to be set-aside on the Revenue neutrality.
Income Tax
Whether exemption u/s 54 is restricted to a 'residential unit' and is not available to a 'residential house' having multiple floors with independent entrance - NO, it is available: ITAT
ASSESSEE, an individual, had filed his return declaring total income of Rs.38,851. In the annexure to ROI filed, it had also indicated that LTCG of Rs.1,01,73,965 was earned and claimed as exempt u/s 54 and 54EC, on account of investment in new flat at Rs.59,17,500 and Rs.50,00,000 respectively. The capital gain arose on account of transfer of assessee's 50% share in property by virtue of Redevelopment agreement. During assessment, AO worked out income under the head "Capital gain" at Rs.76,64,008. On appeal, CIT noticed that the assessee had received a sum of Rs.2.18 crore on account redevelopment agreement and offered the same to capital gain after claiming exemption u/s 54EC. On the perusal of clause 3(1) of the redevelopment agreement, CIT observed that the assessee was further entitled to and in fact received 50% of the constructed area free of cost. Thus, it was opined that the value of such entitlement was also liable to tax. The issues before the Bench are - Whether exemption u/s 54 is restricted to a 'residential unit' or a 'residential house' having multiple floors with independent entrance; Whether when there are two views possible on a particular issue, the view of higher authority should be given preference, even if the view taken by the lower authority is sustainable in law and Whether revision can be made on a debatable issue. And the answers go in favour of the assessee.
Service Tax
Applicant entering into agreement with Singapore company for providing Virtual Private Network (VPN) facility - as data being retrieved or accessed by applicant is from their own data centre which were maintained by them in India, USA & UK, prima facie it cannot be said that applicant have received service of 'Online information and database access or retrieval' - applicant has made case in their favour - Pre-deposit waived and stay granted: CESTAT
COMMISSIONER of Service Tax, Mumbai issued a Service Tax demand of Rs.2.61 Crores to the State Bank of India and like always, confirmed the demand along with interest and impressive amounts of penalty. The short issue on which the service tax demand is raised is - that the applicants are availing Online information and data base access or retrieval service through computer network service and as the ‘service provider' is located abroad, the bank is required to discharge the Service Tax. The bank is before the CESTAT with a Stay application. And the Revenue got itself represented through a Special Consultant for defending its case.
See our Columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice day.
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