TIOL-DDT 2638
10 07 2015
Friday

AS per Section 33 of the Central Excise Act,

SECTION 33.Power of adjudication. - Where under this Act or by the rules made thereunder anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged -

(a) without limit, by a Commissioner of Central Excise;

(b) up to confiscation of goods not exceeding five hundred rupees in value and imposition of penalty not exceeding two hundred and fifty rupees, by an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise:

Provided that the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, in the case of any officer performing the duties of an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, reduce the limits indicated in Clause (b) of this section and may confer on any officer the powers indicated in Clause (a) or (b) of this section.

As per the above provisions, the Assistant Commissioner/Deputy Commissioner can impose a maximum penalty of Rs. 250/-.

How are the Assistant Commissioners imposing huge penalties then?. A friend of mine, a Central Excise Officer asked me this question. DDT would like the Netizens to help my friend with the answer. Please send your views to vijaywrite@tiol.in at the earliest.

United States and India Sign Agreement to Share Tax Information

U.S. Ambassador to India Mr. Richard Verma and Indian Revenue Secretary Mr.Shaktikanta Das signed an Inter Governmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA) to promote transparency between the two nations on tax matters.

Revenue Secretary, Shaktikanta Das said, "Signing the IGA with U.S. to implement FATCA today, is a very important step for the Government of India, to tackle offshore tax evasion. It reaffirms the Government of India's commitment to fight the menace of black money. It is hoped that the exchange of information on automatic basis, regarding offshore accounts under FATCA would deter tax offenders, would enhance tax transparency and eventually bring in higher equity into the direct tax regime which is necessary for a healthy economy."

Ambassador Verma, said, "The signing of this agreement is an important step forward in the collaboration between the United States and India to combat tax evasion. FATCA is an important part of the U.S. Government's effort to address that issue."

The United States enacted FATCA in 2010 to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on U.S. account holders. As per the IGA, FFIs in India will be required to report tax information about U.S. account holders directly to the Indian Government which will, in turn, relay that information to the IRS. The IRS will provide similar information about Indian account holders in the United States. This automatic exchange of information is scheduled to begin on 30th September, 2015.

Whereas:

• The Government of India is supportive of the underlying policy goal of FATCA to improve tax compliance;

• FATCA has raised a number of issues, including that Indian financial institutions may not be able to comply with certain aspects of FATCA due to domestic legal impediments;

• The Government of the United States of America collects information regarding certain accounts maintained by U.S. financial institutions held by residents of India and is committed to exchanging such information with the Government of India and pursuing equivalent levels of exchange;

• The Parties are committed to working together over the longer term towards achieving common reporting and due diligence standards for financial institutions;

• The Government of the United States of America acknowledges the need to coordinate the reporting obligations under FATCA with other U.S. tax reporting obligations of Indian financial institutions to avoid duplicative reporting;

• An intergovernmental approach to FATCA implementation would address legal impediments and reduce burdens for Indian financial institutions;

• The Parties desire to conclude an agreement to improve international tax compliance and provide for the implementation of FATCA based on domestic reporting and reciprocal automatic exchange pursuant to the Convention, and subject to the confidentiality and other protections provided for therein, including the provisions limiting the use of the information exchanged under the Convention;

the Parties have entered into the agreement.

The information to be obtained and exchanged is:

a) In the case of India with respect to each U.S. Reportable Account of each Reporting Indian Financial Institution:

(1) the name, address, and U.S. TIN of each Specified U.S. Person that is an Account Holder of such account and, in the case of a Non-U.S. Entity that, after application of the due diligence procedures set forth in Annex I, is identified as having one or more Controlling Persons that is a Specified U.S. Person, the name, address, and U.S. TIN (if any) of such entity and each such Specified U.S. Person;

(2) the account number (or functional equivalent in the absence of an account number);

(3) the name and identifying number of the Reporting Indian Financial Institution;

(4) the account balance or value (including, in the case of a Cash Value Insurance Contract or Annuity Contract, the Cash Value or surrender value) as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure;

(5) in the case of any Custodial Account:

(A) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period; and

(B) the total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Indian Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder;

(6) in the case of any Depository Account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period; and

(7) in the case of any account not described in subparagraph 2(a)(5) or 2(a)(6) of this Article, the total gross amount paid or credited to the Account Holder with respect to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Indian Financial Institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the Account Holder during the calendar year or other appropriate reporting period.

b) In the case of the United States, with respect to each Indian Reportable Account of each Reporting U.S. Financial Institution:

(1) the name, address, and Indian TIN of any person that is a resident of India and is an Account Holder of the account;

(2) the account number (or the functional equivalent in the absence of an account number);

(3) the name and identifying number of the Reporting U.S. Financial Institution;

(4) the gross amount of interest paid on a Depository Account;

(5) the gross amount of U.S. source dividends paid or credited to the account; and

(6) the gross amount of other U.S. source income paid or credited to the account, to the extent subject to reporting under chapter 3 of subtitle A or chapter 61 of subtitle F of the U.S. Internal Revenue Code.

Either Party may terminate this Agreement by giving notice of termination in writing to the other Party. Such termination shall become effective on the first day of the month following the expiration of a period of 12 months after the date of the notice of termination.

What Happened to Anti Dumping Duty on steel and fibre glass tapes?

DDT 2602 21.05.2015 noted;

The anti dumping duty on steel and fibre glass tapes and their parts and components, originating in or exported from the People's Republic of China, was extended till 14.05.2015, by Notification No. 29/2014 -Cus(ADD), dated 04.07.2014.

This duty was first imposed by Notification No. 147/2003 with effect from 04.04.2003 and expired on 4.4.2008. It was resurrected by Notification No. 50/2008 -Cus dated 21.4.2008 - till 03.10.2008. It was again extended till 03.04.2009, by Notification No. 104/2008-Cus dated 10.09.2208.

On 03.04.2009, they again forgot to extend it and woke up after more than a month and issued a new Notification No. 49/2009-Cus dated 15.05.2009. This notification expired on May 15 2014. They resurrected it by Notification No. 29/2014, dated 04.07.2014, by which it was extended till 14th day of May, 2015.

It is a week since 14th May 2015 and there is no sign of any further extension. Can we assume that the notification is dead or will they resurrect it?

This is what happened.

The designated authority in its final findings dated the 5th May, 2015, has come to the conclusion that-

(a) there is continued dumping of the subject goods from the subject country;

(b) dumped imports of subject goods are causing injury to the domestic industry;

(c) the dumping of subject goods and injury to the domestic industry is likely to continue if the anti-dumping duty is revoked;

(d) continuation of definitive anti-dumping duty on all imports of the subject goods from the subject country is necessary in order to remove likely injury to the domestic industry;

and has recommended imposition of the anti-dumping duty on the subject goods, originating in or exported from the subject country.

The Government has considered the recommendation of the designated authority and imposed the anti dumping duty again for a period of five years from 09.07.2015.

While thanking the Government for not imposing this duty with retrospective effect from 15th May 2015, the valid question is, "was there no dumping and injury during the period 15.05.2015 to 08.07.2015?" Who is responsible for the injury caused to the domestic industry and the loss of revenue to the government?

Notification No. 31/2015-Customs (ADD), Dated: July 09, 2015

FTP - Online Payment of fees

IN keeping with the Digital India vision of the Prime Minister, and taking yet another crucial step towards paperless, online functioning in 24x7 environment, Directorate General of Foreign Trade has launched the facility of online payment of application fees through Credit/Debit cards and electronic fund transfer from 53 Banks.

As a measure of Trade Facilitation and Ease of Doing Business, DGFT has already operationalised the facility of Online filing of various applications by the exporters/importers under the Foreign Trade Policy (2015-20). DGFT has also operationalised the facility of online submission of applications for issue of online Importer Exporter Code in digital format or e-IEC for exporters/importers.

Now with the online payment facility being available from 53 banks, as well as through Credit and Debit cards, it would be possible to not only apply online for e-IEC and benefits under various schemes under Foreign Trade Policy but also make online payment of required application fee.

The charges applicable for using Internet banking, debit/credit cards will be:

DGFT Trade Notice No. 07/2015., Dated: July 09, 2015

Augmentation of infrastructure at JNPT and at Air Cargo Complex

AN interactive session with trade and stakeholders on "Ease of Doing Business- Single Window clearance" was held in Mumbai recently with Mr.Jayant Sinha, Minister of State (Finance) chairing the session. He stated that a tax system should be simple and predictable; client satisfaction is of utmost importance and issues should be resolved in a time-bound manner. Several issues were discussed in the meeting.

Issue: Augmentation of infrastructure at JNPT and at Air Cargo Complex

This issue was sponsored by Mumbai Customs Brokers Association (BCHAA). BCHAA representative stated that at present, there is a single road catering to all three terminals of JNPT and since fourth terminal is coming up, the infrastructure needs immediate upliftment. Further, there is a need for an additional railway line.

Chairman, JNPT informed that a 6/8 lane evacuation corridor is proposed at a project cost of Rs. 3200 Cr. and to be executed by NHAI. Tendering process date is expected to be decided by 15th July 2015. As regards Railway Line, he stated that the same is to be executed as part of Dedicated Freight Corridor and execution may take 2.5 to 3 years before the operation of Phase I of Terminal IV. Chairman, JNPT assured that a timeline would be intimated. The MoS emphasized that the milestones stated above should be adhered to and the same should be monitored. He stated that he would review the same before the next meeting.

BCHAA representative also raised the issue of lack of augmentation of infrastructure at air cargo complex over last decade. MIAL representative stated that new "Heavy Cargo Export Shed" would be ready by October/November of this year as 70% of the work in this regard is completed. Further, New Bonded Cargo Terminal also would be ready by the same time. As regards New Integrated Common User Terminal, he said that it is developed jointly with Air India and the Phase I proposal was submitted to the Ministry for approval. As regards Enhancement of Truck Docks Access Roads, he stated that the Master Plan for the same has been sent to the State Government for Approval as it involves various agencies. As regards Extension of Perishable Cargo Terminal, he stated that the same was completed in February 2015.

The Minister advised the stakeholders to form a small "Working Group" headed by Commissioner of Customs (General), Air Cargo Complex, Mumbai to brainstorm solutions to ensure time-bound implementation of timelines given by MIAL.

Until Monday with more DDT

Have a nice weekend.

Mail your comments to vijaywrite@tiol.in