inner september 2010 - bizsolindia services pvt.ltd...inside or put your head down in shame. i did...

• ISSUE - I • VOLUME - VI • September - 2010 www.bizsolindia.com

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CORPORATE LAWS

FEMA

COMMERCIAL LAWS

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We believe in C-2

This Month 4 U C-2

Editorial 1

-- CMA A. B. Nawal

Annual Supplement to the 4

Foreign Trade Policy 2009 - 2013

Direct Tax Code Bill 2010 20

What's New 33

Customs 33

Central Excise 34

Service Tax 34

Foreign Trade Policy 35

FEMA / RBI 35

Income Tax 36

Special Economic Zone 36

EOU / EHTP / STP 37

Maharashtra VAT 37

Beyond the Obvious 38

Breaking News 42

Did you miss this! 43

Lighter Moments 44

GST Corner - 2

CA. Mrs. Preeti Kulkarni &

Mrs. Manisha Pawshe

All government office related links… 40

Bizsol CSR 29

IN THIS ISSUE

• For important due dates please turn over

September - 2010

UPDATE

THISMONTH

4U Payments Due Dates

Central Sales Tax –August 2010 Return-cum-Challan 21.09.2010

VAT – August 2010 Return-cum-Challan 21.09.2010

ESI Contribution 21.09.2010

Profession Tax 30.09.2010

Excise Duties-September 2010 05.10.2010

Excise Duties- September 2010 By E-Payment 06.10.2010

Service Tax – September 2010 05.10.2010

Service Tax - September 2010–By E Payment 06.10.2010

TDS/TCS- September 2010 07.10.2010

Provident Fund- September 2010 15.10.2010

Returns

ER-1 and ER-2 Monthly return for September 2010 10.10.2010

ER-6- September 2010 10.10.2010

Quarterly Statement with respect to TDS 15.10.2010

Service Tax Half Yearly Return 25.10.2010

Income Tax Return for Corporate Assesses and 30.09.2010 assesses under Tax Audit

W E B E L I E V E I N

E D I T O R I A L

It is now certain that we have to wait for some more time for the Goods and Services Tax. We also have to wait for the Direct Tax Code. The latter is slated to roll out officially from April 2012 which it will, barring contingencies. The former, it appears, will need more tortuous negotiations to get the States on board. The Finance Minister's resolve to implement both together is now clear in that the DTC which could have been made effective is also being scheduled to be rolled out only in April 2012. One can only hope that the Centre will not have to pay huge additional ransom in political terms to get this economic system implemented. Even if it has to, one again hopes that it will not be of a recurring nature. Pranab Mukherjee is the quintessential modern day Machiavelli. If he had not been able to hammer out a compromise with the States on GST it is well nigh impossible for anyone else to have done anything different. Let us wait for another day.

One of the most remarkable stock market stories of all times arguably should be that of the recent IPO of SKS Microfinance. Here is the story of micro finance turning out to be big bucks. It is no wonder that the issue got such an overwhelming response from the investors. If the George Soroses and the Narayan Murthys take interest in a public issue you do not expect anything different. But that will be missing the point. Big money seeking profits will move to the rural belt in India for sure. One can reasonably expect mushrooming of micro finance companies in the near future. The success of the issue and the subsequent performance of the stocks of SKS is a sure sign of things to come. Beyond the hype associated with a public issue and the usual sloganeering about social commitments, one can see the contours of a gateway for inclusive growth unlike anything else that we have seen so far. After this, let us hope NGOs for profit change the Indian rural landscape by catching the fancy of the business community.

The unprecedented floods in Pakistan inundating nearly a fifth of the country can only be bad news for us. The humanitarian aspect notwithstanding, the floods will prove to be a watershed event in the history of terrorism across the border. The calamity was too much for the inept Pakistan Government. But for the Taliban volunteers, to whom the population is now grateful, will readily find new recruits for their terror assignments. A rogue and inept regime in your neighbourhood can be a dangerous concoction. Come to think of it, don't you wonder that these days natural calamities like floods, earthquakes and the like are coming in at such an alarming frequency? Or is it a cynical comment attributable to old age syndrome?

Staying with Pakistan, it is impossible to resist the temptation to comment on the recent scam involving the Pakistani cricketers in math-fixing. A rogue state with self-defined truncated history with little to fall back upon in terms of reinforcement of value systems, it may perhaps surprise no one that the Pakistani establishments

bungle from one controversy to another. But the establishment's effort to look for an invisible Indian hand in every mishap or controversy is not helping them at all to improve. Thank God that India was not blamed for the recent floods in Pakistan!

The Nuclear Liability Bill is finally set to become an Act. Even as late as two months back no one would have given the Government even an outside chance of piloting the Bill through the Parliament. The resurrection of the ghost of Bhopal in the form of a judgment from the Court came at a wrong time for the Government; but perhaps unwittingly at the right time for the people of this country. But for the Bhopal tragedy in the background the Nuclear Liability Bill would have cleared all the hurdles without too much of difficulty at the cost of the people of this country. That was not to be. It looks as if the ruling party did its maths right and its floor management brilliantly. It is difficult to believe that there was no deal between the Government and the BJP. The intent of the word 'intent' itself was a sure give-away. Even for a naive layman it was impossible to accept the wording the way it was proposed by the ruling party in the Bill. If 'intent' is to be the test for any liability for any statute, this country would have been a country without any meaningful deterrent statutes especially in an era when Courts are liberally interpreting constructive liabilities in commercial and industrial laws. According to me the word 'intent' was definitely a red herring programmed to be dropped on the way so that the people at large do not get the impression that the principal opposition party supported the ruling Congress on this sensitive Bill and also give the impression that they had their way in some way. Notwithstanding the suspected deals and wheels and the deals within wheels, one could witness some brilliant debates in the Parliament during the passage of the Bill. Our leaders, it appears, have not lost their touch yet when it comes to speaking in Parliament. Their eloquence in speech making easily matched their crassness in shouting in Parliament.

When someone echoes your sentiments ever so precisely and crisply you cannot but be impressed. That is what happened to me when I heard the irrepressible Mani Shankar Aiyar the other day on TV comparing India and China – imperfect Indian governance is preferable to Chinese autocracy. So well said.

With the countdown begun, the Common Wealth Games is about to descend on us. I share the dilemma an average Indian faces today – compelled to feel proud of an event which has brought so much shame to the nation and even more disrepute to the Games. I got a chance to personally see the Olympic stadia at Stratford for London Olympics in 2012 and also chanced upon a conversation when someone was comparing those Olympics in London with CWG in Delhi. You could do either of the two things – you cringe inside or put your head down in shame. I did both.

There is some breaking news at the home front. My bosses have changed. There is a new Editorial Team in place. I wish them all the luck – not because they have to deal with people like me. I pledge my unstinted support to them. Like the politicians saying we shall abide by the Court orders whenever they respond to an adverse judgment. As if they have an option - nor do I have.

Thank you.

Venkat R Venkitachalam

September - 2010

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CORNERWhile Shri Nandan Nilekani, Chairman of Unique Identification Authority of India is ready to complete gigantic volume of creating IT infrastructure ready for implementation of GST and similarly, Department of Revenue through CBEC had prepared implementation roadmap. Now it is certain that implementation of GST will be postponed and it

stwill not be on declared date, 1 April 2011.

Last year, Honourable Finance Minister, Shri Pranab Mukherjee has assured in his “Budget

stSpeech” that GST will be implemented from w.e.f 1 April 2011 and will not be postponed as done in last year. He had assured the country and State Governments that losses incurred by the State will be reimbursed and he has made Budget Allocation for implementation of IT infrastructure and losses to be reimbursed to the State Governments.

BJP-ruled states and some Congress- ruled States like Andhra Pradesh, have opposed the proposed tax structure saying it would infringe on their fiscal autonomy. They have sought a month’s time to study the draft constitutional amendment bill. States are studying the bill and he is hopeful that a consensus will emerge on it.

Finance Ministry has also made the changes in proposed Constitution Amendment Bill and considering no infringement on the autonomy of the State Government. But there were practical hurdles considering federal structure of India.

Honourable Finance Minister has addressed the esoteric gathering of Chief Commissioners and Commissioners of CBEC and CBDT as part of his regular interaction schedule, he admitted that he tried his best to introduce the Constitutional Amendment Bill for GST in the last Monsoon Session of Parliament itself. ‘’But for certain reasons beyond his control it could not be tabled in the last session.

He also stated the reasons that certain gestation period is required for placement of the Bill in the Parliament. The Bill is required to refer to the Standing Committee and then to table the Bill for passing in both the Houses of Parliament. Since the

Bill could not placed, it may not be possible to introduce GST from 1.4.2011; because, GST legislation, both at the Centre and the States can be undertaken only after the Constitutional amendment.

He also stated that there will not be any let up in ongoing work relating to GST. While the officers in the Ministry are working on the various aspects of policy and administration matters on GST, the field officers’ feedback would also be needed in a big way – first on matters relating to policy and then on matters relating to administering the GST. After all, the Central Excise and Service Tax officers in the field will have to administer GST in close coordination with the State Government officers. In this context, he advised to the Chief Commissioners to continue dialogue with the State Government authorities as a way of familiarization, since ultimately when the Central GST and State GST come into effect, they will have to work in tandem.

When Honourable Commerce & Industry Minister announced Annual Supplement to Foreign Trade Policy, he had extended DEPB Scheme by six months and Duty Free Scrip under Export Promotion Scheme by 2012, the delay of implementation of GST was expected.

However, the draft of GST & structure of implementation of GST is almost finalised and

thcovered in 13 Finance Commission Report and recommendation of Department of Revenue thereto. Therefore, the extended period can better be utilised by undertaking following studies so that there will be no hiccups and last minute planning for implementation of GST and taking advantage of the scheme.

1. Impact of each transaction of the company in the GST regime.

2. Impact assessment study on the present style of business and deriving new strategies in the GST regime.

3. Revisit on existing business structure

4. Supply Chain Management- procurement

GST— By CMA A. B. Nawal

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12. Understanding the transitional issues and preparing our self to optimise the benefit.

13. Accounting System for input credit of CGST & SGST, control accounts through branch accounting, invoicing system, centralized, and decentralized. Control on input credit in case of default.

14. Accounting system for advances for goods & services and GST credit issues.

15. Accounting System for invoices as against Debit Note / Credit Note / treatment of Bad Debts / provision of doubtful debt.

16. Create new IT support System with Data Migration Module.

17. Work simultaneously for present structure and GST structure in the financial year 2011-12.

Let us not be part of Parkison’s Law and let us utilise this time for better management & implementation of GST whenever it is made effective.

across India / selection of alternatives / introduction of procurement system, customer registration form / modification

5. Inventory Management – Manufacturing to Sale Chain

6. JIT Management

7. Business Strategies – manufacturing / job work/ sub-contracting/ P2P transaction, loan & licenses and Selection of locations

8. Marketing & Distribution Network- multiple warehouses/ distribution centres/ Service Centres/ franchisee

9. Risk of ownership, planning of contractual terms, Ex-works / FOR / Duty Demand, etc.

10. Logistic Module

11. Internal training to understand GST and preparing for implementation of GST to existing personnel.

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Honourable Commerce & Industry Minister, Shri Anandji Sharma, has announced Annual supplement 2010-

11 of Foreign Trade Policy 2009-14 today on the background of forth coming GST and declining Exports in the

year 2009-10.

Exports, which had grown by 48.1% during April to September, 2008, began declining from October 2008 and

this decline continued through the first half of 2009-10

The decline in exports was arrested. And, the trend was reversed. Clearly, steps were in the right direction.

The measures initiated in the FTP 2009-14 and the subsequent interventions have placed export growth back

on a positive trajectory. Exports which were steadily declining since October 2008 turned the corner in

October 2009. Export posted an average positive growth of 19.6%, between October 2009 and March, 2010.

In the first quarter of 2010-11, exports have grown by 32% compared to last year.

Fortunately, Government realised the contribution made by SEZ. Exports from SEZs have shown a growth of

about 67% in the first quarter of 2010-11 over the corresponding period in the previous year, and stood at

about Rs. 59,000 crore. This is especially noteworthy as this impressive growth is over and above the sturdy

120% growth posted by SEZ exports last year, crossing a figure of Rs. 2,20,000 crores. The total direct

employment in SEZs reached around 5.5 lakh persons and total investment in the SEZs amounted to around

Rs. 1.66 lakh crores by June 2010. The SEZ as an instrument of policy for catalyzing export growth has lived

up to the promise: they have attracted capital, boosted exports and increased employment.

thThough, it has been stated in the report of Task Force and 13 Finance Commission Report on GST stating

that Exports should be zero rated and there will be no exemptions and there will be a refund of CGST & SGST

on input goods & services used for manufacture and exports. Still, Honourable Commerce & Industry Minister

has not only continued all the schemes but validity of some schemes like DEPB, Zero Duty EPCG Scheme,

Star House Incentive Scheme has been extended and Annual EPCG Scheme has been introduced. It is very

clearly implies that exemption era for duty exemption scheme, duty remission scheme, EPCG scheme, EOU /

STPI/ EHTP/BTP scheme will continue even in GST era. This is very welcome step. Alternatively, though rdAnnual Supplement was released on 23 August 2010, policy provisions were designed considering GST

may be postponed. Now Honourable Finance Minister, Shri Pranab Mukherjee has admitted that GST may stnot be implemented w. e. f 1 April 2011. Let us hope the said provisions will still continue even in the GST

regime.

The important Highlights of Annual Supplement are given below:-

1. Introduction of Bonus Incentive @ 2% to certain products and certain markets under Focus Product

Scheme, Focus Market Scheme & Market linked Focus Product Scheme.

2. The coverage of above schemes has been expanded by adding new products and new countries.

th3. DEPB scheme has been extended specifically stating at the last time till 30 June 2011 without

changing DEPB rates.

st4. EPCG Scheme has been extended upto 31 March 2012 and Annual EPCG Scheme has been

introduced.

5. Zero Duty EPCG Scheme has been made applicable to additional sector and denied for Marine

products, Rubber products, Paper & Paper Products, Ceramics, Glassware & certain steel products.

Annual Supplement to theFOREIGN TRADE POLICY 2009-2014

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6. Clubbing provision for Annual Advance Authorisation with other Advance Authorisation has been

made.

7. There will be a single Custom Notification made applicable for Advance Authorisation for physical

exports and Deemed Exports which will enable clubbing of both type of Advance Authorisation.

8. Requirement of Chartered Engineer’s Certificate for obtaining Advance Authorisation when norms are

not fixed, have been dispensed with.

9. The Task Force under the guidance of State Minister of Commerce & Industry has been constituted for

reduction of transaction time and cost. Recommendation made by Task Force are reviewed by

concerned Ministries will be intimated and action will be initiated

10. Export Promotion Councils will upload their data on DGFT website and thereafter, there will be no

requirement of certified copy of RCMC.

11. There will be no requirement of registration of Authorisation issued by DGFT once EDI messaging

system is introduced between DGFT & Customs.

12. Any application can be made in offline mode and then upload online so as to save time and avoid

problems of server connectivity.

13. There is no change in existing provision pertaining to EOU/EHTP/STP/BTP and no major changes in

the provisions pertaining to Deemed Exports.

14. Availability of concessional Export Credit: Interest subvention of 2% for pre-shipment credit for export

sectors namely, Handloom, Handicraft, Carpet and SMEs for all export sectors, have been allowed till

31.3.2011 in the budget 2010-11. This facility has now been extended to a number of additional

products pertaining to sectors like Engineering, leather, textiles, Jute.

However, detailed para-wise changes effected in Foreign Trade Policy 2009-14 through Annual Supplement rdissued on 23 August 2010 are given below:

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1B.1 (i) (c) Market Diversification

26 new countries have been included within the ambit of Focus Market Scheme

There has been a significant increase in the outlay under ‘Market Linked Focus Product Scheme’ by inclusion of more markets and products. This ensures support for exports to all countries in Africa and Latin America

New Policy will be effective from 23rd August, 2010

Asian markets like China and Japan now covered the Market Linked Focus Product Scheme.

The Foreign Trade Policy, 2009-2014, incorporating the Annual Supplement as updated on 23rd August, 2010 shall come into force with effect from 23rd August, 2010, unless otherwise specified.

Now 27 countries have been included within the ambit of Focus Market Scheme

There has been a significant increase in the outlay under ‘Market Linked Focus Product Scheme’ by inclusion of more markets and products. This ensures support for exports to all countries in Africa and Latin America, and major Asian markets like China and Japan.

CommentsSr. No.

Previous ProvisionPara No.New Provisions as per the Annual Supplement 2010

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1B.1 (ii) (a) Technological Upgradation

1B.1 (ii) (c) Technological Upgradation

1B.1 (iii) Status Holder

1B.1 (iv) (f) Agriculture & Village Industry

EPCG Scheme at zero duty has been introduced for certain e n g i n e e r i n g p r o d u c t s , electronic products, basic c h e m i c a l s a n d pharmaceuticals, apparel and textile, plastics, handicrafts, chemicals and allied products and leather and leather products.

The Government recognized ‘Status Holders’ contribute approx. 60% of India’s goods exports. To incentivize and encourage the status holders, as well as to encourage Technological upgradation of export production, additional duty credit scrip @ 1% of the FOB value of past export shall be granted for specified product groups including leather, spec i f i c sub -sec to rs i n engineering, textiles, plastics, handicrafts and jute. This duty credit scrip can be used for import of capital goods by these status holders. The imported capital goods shall be subject to actual user condition.

Certain specified flowers, fruits and vegetables are entitled to special duty credit scrip, in addition to the normal benefit under VKGUY.

The Scheme has also been expanded to cover more product groups viz. marine products, sports goods, toys, rubber & rubber products, additional chemicals / allied products and addit ional engineering products.. Further the Scheme has also been extended upto 31.03.2012

New Para Added. The concept of Annual EPCG Authorisation on the lines of Annual Advance Authorisation introduced to reduce documentation and transaction time.

The Status Holder Incentive Scrip Scheme is extended upto 31.03.2012. The benefit of this scheme has been expanded to cover addi t ional export product groups.

Additional flexibility provided for transferability of Duty Credit Scrips being issued to S t a t u s H o l d e r s u n d e r paragraph 3.13.4 of FTP under VKGUY scheme by allowing transfer of scrip for import of cold chain equipments to unit(s) in the Food Park.

EPCG Scheme at zero duty has been introduced for certain engineering products, electronic products, basic chemicals and pharmaceuticals, apparel and textile, plastics, handicrafts, chemicals and allied products and leather and leather products. This scheme is being expanded to cover more export product groups including marine products, sports goods, toys, rubber & rubber products, additional chemicals / allied products and additional engineering products. The scheme is also being extended upto 31.3.2012.

The facility of EPCG Scheme for Annual Requirement is being introduced to reduce documentation and transaction time.

The Government recognized ‘Status Holders’ contribute approx. 60% of India’s goods exports. To incentivize and encourage the status holders, as well as to encourage Technological upgradation of export production, additional duty credit scrip @ 1% of the FOB value of past export shall be granted for specified product groups including leather, specific sub-sectors in engineering, textiles, plastics, handicrafts and jute. This duty credit scrip can be used for import of capital goods by these status holders. The imported capital goods shall be subject to actual user condition. The status holder incentive scrip scheme is being expanded to cover more export product groups including marine products, sports goods, toys, specified chemicals and allied products and additional engineering products. The scheme is also being extended upto 31.3.2012.

Additional flexibility for agri-infra scrip by way of limited transferability to other status holders and the units in Food Parks allowed.

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CommentsSr. No.


1B.1 (v) (a) Handloom Sector

1B.1 (v) (c) Handloom Sector

1B.1 (vi) (e) Handicraft / Town of Export Excellence

1B.1 (vi) (h) Handicrafts

1B.1 (viii) (a) Leather and Footwear

1B.1 (viii) (b) Leather and Footwear

1B.1 (viii) (g) Leather and Footwear

Leather and Footwear

1B.1 (ix) (e) Marine Sector

1B.1 (ix) (f) Marine Sector

Earlier Para was 1B.1 (v) (c) : Duty free import entitlement of specif ied tr immings and embellishments is 5% of FOB value of exports during previous financial year.

New towns of export excellence with a threshold limit of Rs 150 crore shall be notified.

Re-export of unsold hides, skins and semi finished leather shall be allowed from Public Bonded warehouse at 50% of the applicable export duty.

Marine products are considered for VKGUY scheme.

N e w S u b - p a r a a d d e d . Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme would significantly benefit the Handloom Sector.

Handloom made-ups have also b e e n i n c l u d e d f o r t h e entitlement

Additional Towns of Export Excellence (TEEs) announced viz. Barmer (Rajasthan) for Handicrafts

N e w S u b P a r a a d d e d . Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme will significantly benefit the Handicrafts and Silk Carpets sectors.

N e w S u b P a r a a d d e d . Additional 2% bonus benefits over and above the existing benefits under Focus Product Scheme would significantly benefit the Leather Sector.

New Sub Para added. Finished Leather export shall be entitled for Duty Credit Scrip @ 2% under FPS

Payment of 50% of Export Duty waived off. This will facilitate the logistics for establishment of such warehouses and easy access to raw material for the leather sector

Additional Towns of Export Excellence (TEEs) announced viz. Agra (Uttar Pradesh) for Leather Products

The Benefits of VKGUY now extended to the Marine Sector.

New Sub Para added to cover the marine Sector under the zero duty EPCG scheme

2% bonus benefits under focus product scheme.

Duty free import entitlement of specified trimmings and embellishments is 5% of FOB value of exports during previous financial year. Handloom made-ups have also been included for the entitlement

New towns of export excellence with a threshold limit of Rs 150 crore shall be notified.

In addition to above, 2% bonus benefits under Focus Product Scheme for Handicraft exports.

Additional 2% bonus benefits under Focus Product Scheme.

Finished Leather exports to be incentivized under Focus Product Scheme.

Re-export of unsold hides, skins and semi finished leather shall be allowed from Public Bonded warehouse without payment of export duty.

Marine products are incentivized at special higher rate under VKGUY scheme

Marine sector included for benefits under zero duty EPCG scheme

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CommentsSr. No.


1B.1 (x) (a) Electronic & IT Hardware

1B.1 (x) (d) Electronic & IT Hardware

1B.1 (xi) (e) Sports Goods & Toys

1B.1 (xi) (f) Sports Goods & Toys

New Sub Para added to cover the Export of Electronic Goods under the Focus Product Scheme

New Sub Para added to cover the Export of Electronic Goods under the Status Holder Incentive Scrip Scheme.

New Sub Para added to provide additional 2% bonus benefits over and above the existing benefits under Focus Product S c h e m e w h i c h w i l l significantly benefit the Toys and Sports Goods Sector

New Sub Para added Benefits under Zero duty EPCG and S H I S s c h e m e s w i l l s i g n i f i c a n t l y p r o m o t e technological upgradation of Toys and Sports Goods sectors

Export of electronic goods to be incentivized under Focus Product Scheme.

Electronics Sector included for benefits under SHIS scheme.

In addition to above, 2% bonus benefits under Focus Product Scheme for Sports Goods & Toys.

Sports goods & Toys included for benefits under zero duty EPCG and SHIS schemes.

ANNUAL SUPPLEMENT TO THE HANDBOOK OF PROCEDURES 2009 – 2014

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1.1 In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of D E P B r a t e s . T h e s e compilations, as amended from time to time, shall remain in force until 31st March, 2014, except DEPB scheme, which shall continue to be operative till

st31 December, 2010 or till a r ep l a cemen t s cheme i s announced, whichever is earlier.

DEPB Scheme extended upto th30 June 2011

In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March, 2014, except DEPB scheme, which shall continue to be operative till 30th June, 2011.

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2.13.2A The SAD refund also can be made by manufac turer, exporter if such imported g o o d s a r e s o l d b y manufacturer, importer subject to non-availment of Cenvat Credit.

For the purpose of re-credit of 4% Special Additional Duty (SAD) of customs in the freely transferable Duty credit scrips (including DEPB), revalidation for a maximum period of 6 months from the date of endorsement, shall be allowed in case the balance period of validity is less than 6 months on the date of re-credit.

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2.49 New Procedure/Guidelines for f i l i n g / e v a l u a t i o n o f applications for entering into a n a r r a n g e m e n t o r Understanding for site visits, on-site verification and access to records / documentation

Procedure/Guidelines for fi l ing/ evaluation of applications for entering into an arrangement or Understanding for site visits, on-site verification and access to records / documentation

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3.5Towns of Export Excellence

3.12.6SFIS

nd2 ParaUtilization of Duty Credit scrip earned shall not be permitted for payment of duty in case of import of vehicles, even if such vehicles are freely importable under ITC (HS).

Additional Towns of Export Excellence (TEEs) announced viz. Barmer (Rajasthan) for H a n d i c r a f t s ; B h i w a n d i (Maharashtra) for Textiles; and Agra (Uttar Pradesh) for Leather Products.

Scrips issued under Served From India Scheme (SFIS) can now be used for payment of duty on import of Vehicles, which are in the nature of professional equipment. S e r v i c e P r o v i d e r s o f hospitability industries will be benefited.

New Towns of Export Excellence added vide Public Notice No. 2/(RE2010)/ 2009-14 DT 23.08.2010

nd2 ParaUtilization of Duty Credit scrip earned shall be permitted for payment of duty in case of import of only those vehicles, which are in the nature of professional equipment to the service provider.

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3.13.4VKGUY

3.15.2FPS

However, for import of Cold Chain Equipment, this Incentive Scrip shall be freely transferable amongst Status Holders

Additional flexibility provided for transferability of Duty Credit Scrips being issued to S t a t u s H o l d e r s u n d e r paragraph 3.13.4 of FTP under VKGUY scheme by allowing transfer of scrip for import of cold chain equipments to unit(s) in the Food Park.

Instant Tea and CSNL Cardinol included for benefits under VKGUY @ 5% of FOB value of exports(PN No. 2/(RE2010)/ 2009-14 DT 23.08.2010)

New Para added at the end. Additional benefit of 2% bonus, over and above the existing benefits of 5% / 2% under Focus Product Scheme, allowed for about 135 existing products, which have suffered due to recession in exports. Major sectors include all Handicra f ts i tems, S i lk Carpets, Toys and Sports Goods (all of which were earlier eligible for 5% benefits); Leather Products and Leather Footwear, Handloom Products and Eng inee r ing I t ems including Bicycle parts and Grinding Media Balls (all of which were earlier eligible for 2% benefit)256 new products added under FPS (at 8 digit level), which shall be entitled for benefits @ 2% of FOB value of exports to all markets. Major Sectors / P r o d u c t G r o u p s a r e Engineering, Electronics, Rubber & Rubber Products, Other Oil Meals, Finished Leather, Packaged Coconut Water and Coconut Shell worked items. This additional Bonus Benefits will be admissible on exports made from 01.04.2010(PN No. 2/(RE2010)/2009-14 dt. 23.08.2010) Such exporters wi l l be benefited by minimum of 2% on the exports made in the year 2010-11 which will help in promotion of exports.

However, for import of Cold Chain Equipment, this Incentive Scrip shall be freely transferable amongst Status Holders as well as to Units (the term ‘Units’ shall not include Developers) in the Food Parks.

Further, Focus Product(s) / sector(s) that are notified under Table 7 of Appendix 37D shall be granted additional Duty Credit Scrip equivalent to 2% of FOB value of exports (in free foreign exchange) over and above the existing rate for that product / sector from the admissible date of export / period specified in the public notice issued to notify the product / sector.

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3.15.3MLFPS

3.16.1SHIS

3.16.4SHIS

With an objective to promote investment in upgradation of technology of some specified sectors as listed in Para 3.16.4 below, Status Holders shall be entitled to incentive scrip @1% of FOB value of exports made during 2 009-10 and during 2010-11, of these specified sectors, in the form of duty credit. This shall be over and above any duty credit scrip claimed/availed under this chapter.

The Status Holders of the following Sectors shall be eligible for this Status Holders Incentive Scrip.1. Leather Sector (excluding

finished leather);2. Textiles and Jute Sector;3. Handicrafts;4. E n g i n e e r i n g S e c t o r

(excluding Iron & Steel, Nonferrous Metals in primary or intermediate forms, Automobiles & two wheelers, nuclear reactors & parts and Ships, Boats and Floating Structures);

5. Plastics; and

Table 6 of Appendix 37DNearly 300 products (at 8 digit level) from the readymade garment sector incentivised under Market Linked Focus Product Scrip for further 6 months from October, 2010 to March, 2011 for exports to 27 EU countries.New products such as tubes, pipes & hoses of vulcanized rubber other than hard rubber with/without their fittings and other articles of vulcanized rubber other than hard rubber have been added to Table 6 of Appendix 37D for availing the benefits on exports made from 1.4.2010 till 31.3.2011(PN No. 2/(RE2010)/2009-14 dt. 23.08.2010)

The SHIS Benefit has been extended by one more year for the exports made during the year 2011-12.

Status Holders of Non ferros metal in intermediate forms would also be benefitted from this Scheme.

With an object ive to promote inves tment in upgrada t ion o f technology of some specified sectors as listed in Para 3.16.4 below, Status Holders shall be entitled to incentive scrip @1% of FOB value of exports made during 2009-10, 2010-11 and during 2011-12, of these specified sectors, in the form of duty credit.The Status Holders of the additional sectors listed in the Para 3.10.8 of HBPv1 2009-14 (RE-2010) shall be eligible for this Status Holders Incentive Scrip on exports made during 2010-11 and 2011-12.This shall be over and above any duty credit scrip claimed/availed under this chapter.

The Status Holders of the following Sectors shall be eligible for this Status Holders Incentive Scrip:1. Leather Sector (excluding finished

leather);2. Textiles and Jute Sector;3. Handicrafts;4. Engineering Sector (excluding Iron

& Steel, Nonferrous Metals in primary or intermediate forms, Automobiles & two wheelers, nuclear reactors & parts and Ships, Boats and Floating Structures);

5. Plastics; and6. Basic Chemicals (excluding Pharma

Products).The Status Holders of the additional

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6. Basic Chemicals (excluding Pharma Products).

sectors listed in the Para 3.10.8 of HBPv1 2009-14 (RE-2010) shall be eligible for this Status Holders Incentive Scrip on exports made during 2010-11 and 2011-12.

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4.1.10AdvanceAuthorisationfor Annual Requirement

Advance Authorization can also b e i s s u e d f o r A n n u a l Requirement

More clarity w. r. t. Duty exemption is been given. In other words, anti-dumping duty and safeguard duty also will be exempted for goods imported under Annual Advance Authorisation.

Advance authorization can also be issued for annual requirement. Imports are exempted from payment of basic customs duty, additional customs duty, education cess, antidumping duty and safeguard duty, if any

A. Advance authorisations

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4.4.5

.7Self Declared Authorisations where SION does not exist

4.7.1.Entitlement

4

-

However, in cases where Norms Committee has already ratified norms for same export and import products in respect of an authorization obtained under paragraph 4.7, such norms shall be valid for a period of one

Para is added vide Policy Public Notice No. 78 dated 01.07.2010

Two more products have been added in the list of products for w h i c h n o A d v a n c e Authorization shall be issued under this paragraph.

More clarity on the Validity of Ad-hoc norms fixed by the Norms Committee has been given by introducing the words “both with retrospectively as well as prospectively”. In other words, if ad-hoc norms have

R A , w h i l e i s s u i n g A d v a n c e Authorisation for import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall b e o b t a i n e d f r o m N a r c o t i c s Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of Authorization to Drug Controller, Nirman Bhawan, New Delhi and concerned Zonal Director of Narcotics Control Bureau.

Additional products have been included over and above earlier six products.vii. Rough Marble Blocks/ Slabs; andviii. Rough Granite.

However, in cases where Norms Committee has already ratified norms for same export and import products in respect of an authorization obtained under paragraph 4.7, such norms shall be valid for a period of one year, both with retrospectively as well as

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4.7.5.Undertaking

4.19Port OfRegistration

year reckoned from the date of ratification.

In such cases Authorizations sha l l be i ssued by RA concerned under “Adhoc Norms Fixed” category and application copies need not be forwarded to Norms Committee for fixation / ratification of norms. Authorisation holder in such cases shall be entitled for further authorisation (s) as per norms ratified by Norms Committee without need for subsequent ratification by Norms Committee. In such cases, applicant would file application under Adhoc Norms Fixed category.

Sea Ports :Mumbai, Kolkata, Cochin, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Paradeep, Pipavav, Sikka, Tuticorin, V i shakhapa tnam, Dahe j , Nagapattinam, Okha, Mundhra, Surat (Magdalla), Jamnagar, N h a v a S h e v a , H a l d i a , Krishnapatnam.Air-ports:A h m e d a b a d , B a n g a l o r e , Bhubaneshwar, Mumbai , KolkataCoimbatore Air Cargo Complex, Cochin, Delhi , Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur, Chennai, Indore, Dabolim (Goa).ICDs:Agra, Bangalore, Coimbatore, Delhi, Faridabad, Guwahati ( A m i n g a o n ) , G u n t u r , Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, P impr i (Pune) ,

been rati f ied by Norms Committee, the same will be applicable for authorisation issued for earlier year and next one year.

To avo id t he de l ay i n finalization of cases, RA can refer similar Norms ratified by Norms Committee. This will help the RA to early finish the similar type of cases.

More specifically for the project supplies time limit for representation has been extended up to 1year instead of 4 months

More Ports are identified for the purpose of imports and exports

prospectively, reckoned from the date of ratification.

In such cases Authorizations shall be issued by RA concerned under “Adhoc Norms Fixed” category and application copies need not be forwarded to Norms Committee for fixation / ratification of norms. Where the application has already been forwarded before the ratification of Norms, the RA shall finalise the case as per the norms subsequently ratified by Norms Committee in a similar case.

For project supplies, the time limit for filing representations, if any, against the decision of Norms Committee shall be o n e y e a r f r o m t h e d a t e o f communication of decision of the Norms Committee.

Sea Ports : Mumbai, Kolkata, Cochin, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Dahej, Nagapattinam, Okha, Mundhra, Surat (Magdalla), Jamnagar, Nhava Sheva, Haldia, Krishnapatnam, Bedi (including R o z i - J a m n a g a r ) , D h a r a m t a r, Muldwarka, Porbander, Vadinar.Airports:Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur, Chennai, Indore, Dabolim (Goa), Lucknow (Amausi), Rajasansi (Amritsar).ICDs :Agra, Bangalore, Coimbatore, Delhi, Faridabad, Guwahati (Amingaon), Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur,Varanasi , Nasik, Rudrapur(Nainital), Dighi (Pune),

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4.20F a c i l i t y o f Clubbing

4.21Enhancement/reduction in the value of authorisation

Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur (Na in i t a l ) ,D igh i (Pune), Vadodara, Daulatabad, (Wanjarwadi and Maliwada), W a l u j ( A u r a n g a b a d ) , Anaparthy, Salem Mallanpur, Singanalur, Jodhpur, Kota, U d a i p u r , A h m e d a b a d , Bhiwadi,Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj , R e w a r i , B h u s a w a l , Jamshedpur, Surajpur, Dadri, Tuticorin.LCS:Ranaghat , Singhabad , Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Hilly, Chengrabanda, Dawki, Atari, Ghojadanga

Facility of clubbing shall be available only for redemption / regularisation of cases and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years. However in case of Authorisations issued in 2004-09 period or thereafter, Advance Authorisations with different customs notification can be clubbed.

Clarity for clubbing of Annual advance authorisations with other Advance authorization has been given.

Conditions w. r. t. the value addition for applications made for Enhancement / reduction in the value for the authorization issued prior to 27.08.2009 has introduced.

Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anapar thy, Sa lem, Mal lanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar, Dera Bassi, Chheharata(Amritsar), Karur, Miraj, Rewari , Bhusawal,Jamshedpur, Surajpur, Dadri, Tuticorin, Babarpur, Bhadohi, Durgapur (Export Promotion Industrial Park), Kundli, Loni (District Ghaziabad), Mandideep (District Raisen), Raipur, Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur, District Dhar), Patli (Gurgaon).LCS: Ranaghat , Singhabad , Raxaul, Jogban i , Nautanva (Sonau l i ) , P e t r a p o l e , M a h a d i p u r, H i l l y, Cheng rabanda , Dawk i , A t a r i , Ghojadanga, Agartala, Amritsar Rail Cargo, Nepalganj Road, Sutarkhandi.

Facility of clubbing shall be available only for redemption / regularisation of cases and no further import or export shall beallowed. For this facility, authorizations are required to have been issued under similar Customs notification even pertaining to different financial years. However in case of Authorisations issued in 2004-09 period and thereafter, Advance Authorisations with different customs notification can be clubbed. Advance authorisation for annual requirement can also be clubbed with the advance authorisation.

However, in case of advance authorisations issued prior to 27.8.09 under the FTP, 2004-09, the following conditions shall apply for any enhancement in the value of the authorisation:(i) Wherever, exports are subsequent to 27.8.09, enhancement in CIF/FOB values shall be subject to a minimum value addition (VA) of 15% for that component of exports.(ii) Wherever, the exports are prior to 27.8.09, enhancement of CIF/ FOB value shall be subject to a minimum Value addition of 15% or the V.A. declared in the original Advance Authorization application, whichever is lower.

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4.22.1

4.24Revaluation of Authorisation

Requirement of Chartered E n g i n e e r ’ s Certificate for o b t a i n i n g A d v a n c e Authorisation when norms are not fixed

Whenever a ban / restriction is imposed on export of any product, export obligation period in respect of Advance Authorisation already issued prior to imposition of ban, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee.For the Advance Authorisation (erstwhile licences) where raw sugar has been imported between 21.09.04 and 15.4.08, but the export obligation is yet to be fulfilled, the export obl igation period stands automatically extended upto 31.12.2009 without payment of composition fee. Against these Advance Authorisations / licences, no further EO extension shall beallowed beyond 31.12.2009

Due to ban if EO against Advance Authorization for raw Sugar is not fulfilled for the imports made during 21.09.04 and 15.4.08 then export obligation period stands automatically extended upto 31.03.2011Also, for the immediate regularization of the case, option for payment of Customs duty as applicable, on the date of import for the quantity of import proport ionate to unfulfilled E.O. is been given

Condition of minimum 15% of Value addition is been given for reval idat ion of advance authorization issued prior to the 27.8.2009

It has been mentioned in the H i g h l i g h t s o f A n n u a l Supplement to Foreign Trade Policy that there will be no requirement of Chartered Engineer’s Certificate for o b t a i n i n g A d v a n c e Authorisation when norms are not fixed. But there is no such amendment made Handbook of Procedure.

Whenever a ban / restriction is imposed on export of any product, export obligation period in respect of Advance Authorisation already issued prior to imposition of ban, would stand Automatically extended for a period equivalent to the duration of ban, without any composition fee.For the Advance Authorisation (erstwhile licences) where raw sugar has been imported between 21.09.04 and 15.4.08, but the export obligation is yet to be fulfilled, the export obligation period stands automatically extended upto 31.03.2011 without payment of composition fee. Advance licence / authorisation holder has the option to pay the customs duty as applicable, on the date of import for the quantity of import proportionate to unfulfilled E.O. and get the case regularized accordingly.

In case of revalidation of advance authorization issued prior to 27.8.2009, it should be ensured that value addition is maintained at 15% (and as per details mentioned in Para 4.1.6 of FTP) or as stipulated in the advance authorization, whichever is higher.

B. Duty Entitlement and Passbook Scheme

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4.54Export Obligation period and its extension

Export obligation fulfilment period and its extension shall be Governed as per paragraph 4.22 above. However, any extension in EOP beyond 36 months from the date of issue of the authorization shall not be allowed.

Provision of Export Obligation period and its extension under Para 4.54 has been deleted. It seems that this is the omission / error.

Deleted

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4A.2Wastage Norms

4A.28 Replenishment Authorization for import of Consumables.

A replenishment authorization for duty free import of consumables and tools (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered A c c o u n t a n t C e r t i f i c a t e i n d i c a t i n g t h e e x p o r t performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition.

Was tage percen tage o f Gold/Platinum and Silver has been reduced by 2 and 3% respectively for Studded jewellery and articles thereof

Consumables like Tags and labels, Security censor on card, Staple wire, Poly bag can b e i m p o r t e d u n d e r Replenishment Authorization of Gems and Jewellery

C. Gems And Jewellery

A replenishment authorization for duty free import of Consumables, Tools and other items namely, Tags and labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition.

Item of exports

Percentage of wastage by weight with reference to Gold/Platinum/Silver content in export item

Gold/ Platinum Silver

Studded jewellery and articles thereof

9.0% 10%

Item of exports

Percentage of wastage by weight with reference to Gold/Platinum/Silver content in export item

Gold/ Platinum Silver

Studded jewellery and articles thereof

7.0% 7%

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEChap

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5.1 Policy The scheme will be available for exporters of engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products, leather & leather products, subject to exclusions as provided in HBP Vol. I.

By adding the “paper & paperboard and art icles thereof, ceramic products, r e f r a c t o r i e s , g l a s s & glassware, rubber & articles thereof, plywood and allied products, marine products, sports goods and toys”. Opportunity has been granted to above industries for technological upgradation and renovation which will be

The scheme will be available for exporters of engineering & electronic p roduc ts , bas i c chemica l s & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products, leather & leather products, paper & paperboard and articles t h e r e o f , c e r a m i c p r o d u c t s , refractories, glass & glassware, rubber & articles thereof, plywood and allied products, marine products, sports goods and toys subject to exclusions as provided in HBP Vol. I.

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5.1 Policy

5.2DEPCG Authorizationfor Annual Requirement

It was mentioned that EPCG Scheme will be in operation till 31.03.2011

No provision

helpful in sustainability and growth of exports.

By extending the validity period by 1 year, government may have shown the interest to continue the scheme in GST regime as well.

Good news in form of Annual EPCG Authorisation has given t o t h e n e w l y s e t u p companies/companies who has already planed their annual requirement of CG to be p r o c u r e d u n d e r E P C G Authorisation.

It is mentioned that EPCG Scheme will be in operation till 31.03.2012

EPCG Authorization can also be issued for annual requirement to Status Certificate Holders and all other categories of exporters having past export performance (in preceding two years), both under zero duty and 3% duty Schemes. The annual entitlement in terms of duty saved amount shall be upto 50% of FOB value of Physical Export and / or FOR value of Deemed Export, in preceding licensing year.

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5.1AExclusions under Zero Duty EPCG Scheme

Chapters 1 to 24, 25 to 27, 31, 40, 43, 44, 45 , 47 to 49, 68 to 70, 71, 81 (metals in primary and intermediate forms only), 89, 93, 97, 98

ITC(HS) 7201 to 7212, 7218 to 7220, 7224 to 7226, 7401 to 7406, 7501 to 7504, 7601 to 7603, 7801, 7802, 7901 to 7903, 8001, 8002 and 8401. However, zero duty EPCG Scheme will be available for handicraft exports under Chapters 5, 44, 68, 97.

Imports under zero duty scheme shall also not be available for units who are currently availing any benefits under Technology Upgradation F u n d S c h e m e ( T U F S ) administered by Ministry of Textiles, Government of India. Zero duty EPCG scheme shall also not be available to applicants, who avail in that year, the benefit of Status

Marine products, Rubber products, Paper & Paper P r o d u c t s , C e r a m i c s , Glassware & certain steel products will not be entitled for zero duty EPCG Schemes.

Further from Chapter 44 “plywood and allied products” are not allowed under Zero Duty EPCG Scheme.

The Word ‘Import under’ (which was appearing in the first line of sub para 5.1A) stand deleted vide Public Notice no. 73/2009-14 dated 08.06.2010

Chapters 1, 2, 4 to 24, 25 to 27, 31, 43, 44 (except plywood and allied products), 45, 47, 68, 71, 81 (metals in primary and intermediate forms only), 89, 93, 97, 98.

ITC(HS) 4011 to 4013, ITC(HS) 7401 to 7406, 7501 to 7504, 7601 to 7603, 7801,7802, 7901 to 7903, 8001, 8002 and 8401. However, zero duty EPCG Scheme will be available for handicraft exports under Chapters 5, 68, 97.Zero duty scheme shall also not be available for units who are currently availing any benefits under Technology Up gradation Fund Scheme (TUFS) administered by Ministry of Textiles, Government of India. Zero duty EPCG scheme shall also not be available to applicants, who avail in that year, the benefit of Status Holder Incentive Scheme under Paragraph 3.16 of FTP.

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5.2AEPCG Authorisation for Annual Requirement

5.11.2

Holder Incentive Scheme under Paragraph 3.16 of FTP.

To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year.

EPCG Authorisation for Annual Requirement is being newly introduced without giving the name of capital goods to be imported. It can be against annual Capex and therefore, the requirement to furnish pro-forma invoice / quotation is automatically dispensed with.

Relief w.r.t. calculation of Average export Obligation has been given for the companies who has badly affected due to recession.

The Author i za t ion fo r Annua l Requirement will be issued subject to the following conditions in addition to other terms and conditions governing the EPCG scheme:-(i) Authorizations shall be issued with a

specific duty saved amount and corresponding export obligation. The applicant would be required to indicate export products proposed to be expor ted under the authorization.

(ii) The authorization holder shall also be required to submit a Nexus Certificate from an independent Chartered Engineer (CEC) in Appendix 32A, to the Customs authorities at the time of clearance of imported capital goods. A copy of the CEC shall be submitted to the concerned Regional Authority along with copy of the bill of entry, within 30 days from the date of import of the Capital Goods.

To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year. However, in case export decline is continuous over consecutive years, the base year for calculation of eligibility and calculation of reduction in average export obligation will be taken as the year after which the exports have shown continuous decline.

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Export Oriented Unit / STP / BTP / EHTP

CommentsPrevious ProvisionNew Provisions as per the Annual Supplement 2010

NA There was no written provision for composition of Unit approval committee which has been inserted in the HBoP V1

The composition of UAC committee is as follows:

1. Development Commissioner -Chairperson

2. Jurisdictional Commissioner of Central Excise & Customs or nominee - Member

3. Joint DGFT or nominee - Member4. Joint/Deputy Development

Commissioner of the Zone - Member

5. Any other nominee of any Department/Agency as special invitee

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Para No.

6.31

Deemed Exports (Policy)


NA

NA

Deemed Export benefits has been extended to Mega Power Projects which are not under ICB but those projects are complying with requisite quantum of power tied up through tariff based competitive bidding or if the project has been awarded through tariff based competitive bidding.Supply of Goods required for expansion of Mega Projects will be entitled for Deemed Export benefits.

In regard to mega power projects, the requirement of ICB would not be mandatory, if the requisite quantum of power has been tied up through tariff based competitive bidding or if the project has been awarded through tariff based competitive bidding.

Supply of goods required for the expansion of existing mega power project as specified in Sl. no 400A of DoR Notification 21/2002- Customs dated 1.3.2002, as amended shall also be eligible for deemed export benefits as mentioned in paragraph 8.3 ( a), (b) and (c) of FTP, whichever is applicable.

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Para No.

8.2

8.4.4 (iv)


An application in ANF 8 along with prescribed documents shall be made by Supplier to RA concerned.

The application for Deemed Export Drawback / TED can be made by the Registered Office or Head Office or a branch office or manufacturing unit.In case the application is made by the Branch Office / Manufacturing Unit then it will have to submit self certified copy of Valid RCMC. However, RCMC data will be uploaded by each Export Promotion Council on DGFT website and thereafter, there will be no need to furnish self-certified copy of valid RCMC.

An application in ANF 8 along with prescribed documents shall be made by Registered office or Head office or a branch office or manufacturing unit of supplier to RA concerned. Where appl icant is branch of f ice or manufacturing unit of a supplier, it shall furnish self certified copy of valid RCMC.

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Para No.

8.3.1 (i)Procedure for claiming Deemed Export Drawback & Terminal Excise Duty Refund / Exemption

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Under DTCParticulars Under Income Tax Act

Residential status

Residential status in case of company incorporated outside India

Apportionment of income:

There are 3 categories for residential status for individual - Resident, Resident but not ordinarily resident & non - resident.

The company registered outside India can be resident if the control and management of its affair during that year is wholly from India

Under I T Act, there is no provision for apportionment but to determine the person liable to tax is the inadequate consideration for asset which is generating the income.But this provision is not applicable if any income arising to the spouse where the spouse possesses techn ica l or professional qualifications and t h e i n c o m e i s s o l e l y attributable to the application of his or her technical or professional knowledge and experience d experience

For salary the spouse is taxable under IT if he/ she has substantial interest in the

The concept of Resident but not ordinarily resident has been withdrawn under DTC. No change has been made in amended draft of DTC.

Now there may be litigation on the issue of less of effective m a n a g e m e n t a n d determination keys of point number (ii), since suitable strategies may be devised to come out of the tax ne

since the income of spouse will be apportioned between husband and wife. It is welcoming amendment.

The assessee will be benefited under DTC since the salary of the spouse will not be clubbed

There are only 2 categories for residential status for individual - Resident & non - resident

The company registered outside India can be resident in India if its ‘place of effective management’ is situated in India. place of effective management of the company means- (i) the place where the board of directors of the company or its executive directors, as the case may be, make their decisions; or(ii) in a case where the board of directors routinely approve the commercial and strategic decisions made by the executive directors or officers of the company

The income of the husband and wife from ordinary sources under each head of income (other than the head “Income from employment”) and from special sources shall be apportioned equally between the spouses

Under DTC, The income under the head “Income from employment” shall be included in the total income of the

COMPARATIVE STUDY WITH INCOME TAX ACT, 1961

1

2

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Amended Direct Tax Code has now been converted into Direct Tax Code Bill 2010 after making amendments in particular revision of tax

slabs, provision w.r.t. income from employment, personal savings, provisions w.r.t. SEZ and new insertions like provisions of CFC,

Branch profit tax for foreign companies etc. It is also important to note Direct Tax Code will be implemented from start of financial year

1.4.2012. Perhaps, applicability might have been delayed since sunset clause for area based exemptions & for infrastructural

development was uptp 31.3.2012. And more so new laws like, DTC & GST can be implemented simultaneously i.e. with effect from

1.4.2012 However Direct Tax Code do not provide any corresponding provisions for continuity of exemption for the infrastructural

projects implemented prior to 1.4.2012.

We give below comparative impact of DTC Bill 2010 over Income Tax Act 1961.

.

Direct Tax Code Bill 2010CA. Mrs. Preeti Kulkarni & Mrs. Manisha Pawshe

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Tax ratesFor individual & HUF

For senior citizens

For Woman assessees

For Co-operative society

For the company Surcharge & Cess

New concepts introduced in DTC having impact on foreign companies:

1. Branch Profits Tax

Effective Tax rate

company or firm.

0 - 1.6 Lakhs - 0%1.6 Lakhs to 5 Lakhs - 10%5 Lakhs to 8 Lakhs - 20%Above 8 lakhs - 30%



Similar provisions under I T act

30%

Under Current provision, there is surcharge & additional surcharge in the form of education cess & secondary higher education cess.

No separate provision for tax on branch profits

Current Corporate Tax for Foreign Companies is 40% + 2.5 % Surcharge + 3% Cess resulting in effective rate of 42.23%

in sp i te o f hav ing the substantial interest.

This is discouraging move for individual assessees after proposing the higher slabs upto 25 lakhs under draft DTC.

No tax benefit granted for woman assessees.

No change in the tax rate for companies So the provisions w.r. t surcharge & cess are not applicable under DTC. This provision was not there under draft DTC.

The effective tax rate for foreign companies having PE in India would be 40.50 per cent (reduction from the current rate of 42.23 per cent).

it is not clear whether BPT is creditable against home country taxation under DTAA.

spouse who has actually earned it.

0 - 2 Lakhs - 0%2 Lakhs to 5 Lakhs - 10%5 Lakhs to 10 Lakhs - 20%Above 10 lakhs - 30%


0 - 2 Lakhs - 0%2 Lakhs to 5 Lakhs - 10%5 Lakhs to 10 Lakhs - 20%Above 10 lakhs - 30%

0 - 10000 - 0%10000 to 20000 - 10%Above 20000 - 30%

30%

The first schedule where the rates of income tax are specified do not state anything on cess & surcharge.

Branch Profit Tax (BPT) at the rate of 15 per cent is introduced on branch profits of foreign companies in addition to the corporate income tax. Whereas taxable income will be calculated after considering BPT. In other words, BPT considered as allowable expenses.

Tax will be on income attributable to a Permanent Establishment (PE) or an immovable property in India, as reduced by the income tax payable on such attributable incomeE.g.: Branch Profit Rs. 100/- BPT @ 15% - Rs. 15/-Corporate Tax @ 30% on Rs.85/- = 25.5/- resulting in effective rate of 40.50%.

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2. Controlled foreign company

3. Foreign Tax Credit

Deductions from total income

No such provision under I T Act

The present IT Act allows the taxpayer to pay the tax as per DTAA & as per provisions under IT Act whichever is more beneficial to him.

Under IT act, these are deductions under Chapter VIA

Contribution to approved funds were earlier covered under 80C where other deductions like, LIC, Housing loan principal repayments were also covered & collective limit was Rs. 100000/-

Under I T Act, these deductions except (health insurance) are covered under Section 80C with the total limit of Rs. 100000/- .L i fe insurance premium limit is 20% of sum a s s u r e d . I f i n v e s t e d i n Infrastructure bond then Rs. 120000/-

Under IT act as well the deduction is upto Rs. 1.5 lakhs for self occupied but deduction is given under “Income from house property”


It is not clear whether the credit will be allowed for taxes paid in foreign country.

This is welcome provision. But it is not clear whether the same can be applicable in case of Controlled Foreign Company as well.

- Under draft DTC, the total deduction limit for saving investments in PF & expenses w.r.t. children education was Rs. 300000/- which is now Rs. 150000/-under final DTC.-

Exclusion of housing loan p r inc ipa l r epaymen t i s discouraging since in case of home loans the cash outflow on principal repayment gets higher with time.

Under draft amended DTC, the deduction upto Rs 1.5 lakhs is allowed w.r.t. only one self occupied property but as per final DTC, the words used are “not let out”. So deduction upto Rs. 1.5 lakhs can be allowed for more than one “not let out’ properties.

The Provisions under DTC are brought in line with current income tax ac t . These provisions were there in draft DTC as well.

Where the resident assessee(s) have control over the foreign company which is a resident of a territory with lower rate of taxation & is neither listed nor actively engaged in trading or business, the share of income of such CFC will be added to the income of resident assessee. As per DTC, An resident assessee shall be alloweda credit in respect of income-tax paid by deduction or otherwise, in any countryHowever, the FTC cannot exceed the tax payable under the DTC 2010 Under DTC, these are called “Tax incentives”

As per section 69, Deduction for contribution to approved fund ( a provident fund, superannuation fund or gratuity,a pension fund, fund approved by the Board)Total deduction limit - Rs. 100000/-

- Deduction for payment of life insurance premium - to the extent of 5% of sum assured (Section 70) - Any sum paid during the financial year under health insurance scheme & to the Central Government Health Scheme.(Section 71) - Deduction for education for children(Section 72)The total deduction limit for above 3 is Rs. 50000/- (Section 73)

As per section 74 Deduction of interest on loan taken for house property (not let out ) The deduction limit is Rs. 150000/-

As per section 75, Deduction of interest on loan taken for higher education shall be allowed in the initial financialyear and seven financial years immediately succeeding the initial financial year or until the interest is paid by the person in full, whichever is earlier.

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RemarkSr. No.





As per IT act, there are only 2 categories. For one category 100% (similar to Part III under DTC) & other 50%(similar to Part IV of DTC)

Similar provisions under I T act.

No limit for contribution under current IT provisions.

No provisions under IT act

As per IT act, 25% of such income



DTC is trying to encourage the d o n a t i o n t o r e s e a r c h assoc ia t ion or nat iona l laboratory or university, college or otherinstitution engaged in scientific research and development & statistical research or research in social science. This provision was not there in the draft DTC.

The Provisions under DTC are brought in line with current income tax act.

Under Companies act, 1956 , the limit is 5% & amount exceeding to that attract 3 times penalty. So now under DTC, the same is brought in line with Companies act, 1956 .

New provision inserted in DTC.

It is a welcome provision for assessee in case 25% of total income exceeds Rs. 300000/-



As per section 76, Deduction for Medical treatment, etcThe deduction limit is Rs. 60000/- for senior citizens & Rs. 40000/- for others

As per section 77, Deduction to a person with disability.The deduction limit is Rs. 100000/- for severe disability & Rs. 50000/- for disability

As per section 78, Deduction for medical treatment and maintenance of adependant person with disabilityThe deduction limit is Rs. 100000/- for severe disability & Rs. 50000/- for disability

As per section 79, Deduction of contribution or donations to certain funds or non - profit organisations.1. For Part I of 16th Schedule - 175% (w.r.t . scienti f ic research and development)2. For Part II of 16th schedule - 125% (w.r.t.statistical research or research in social science)3. For Part III of 16th schedule - 100%4. For Part Iv of 16th schedule - 50%

As per section 80, Deduction for rent paidTotal deduction limit is lower of 10% of (GTI-Rent paid) or Rs.24,000/-

As per section 81, Deduction for political contribution Total deduction limit is 5% of gross total income

As per section 82, Deduction of entire contribution from recognized stock / commodity exchange from income of Investor Protection Fund - No limit for deduction

As per section 83, Deduction of royalty income of authors. Total deduction limit is Rs. 300000/-

As per section 84, Deduction of royalty on patents.Total deduction limit is Rs. 300000/-

As per section 85, Deduction of income of cooperative society from banking activities.

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Income from Employment Definition of salary income

Deductions:

HRA

Income from House Property

Concept of self occupied property

Gross Value / Rent

No provisions under IT act

As per income tax act the definition of salary income was inclusive. It includes, wages, annuity, gratuity, taxable perquisite value, allowances in excess of actual expenditure etc. It excludes certain contributions by employer from taxable salary The specified deduction under IT act,i) a deduction w.r.t. entertainment allowance ii) P r o f e s s i o n t a x . T h e contributions by employer to annual pension fund is taxable wholly. The contribution to annual provident fund is excluded from salaries to the extent of specified limit of 15% or 10% or 7.15% as applicable

There is exemption under section 10(13A) of IT Act for HRA to the extent of lower of - Allowance actually received - Rent paid in excess of 10% of salary - 40 per cent of salary (50% in case of metropolitan city)

Under IT Act self occupied property is covered under the head “Income from House Property”& deduction for interest on loan upto Rs. 1.5 Lakhs is allowed & can be claimed as loss under this head. Annual value as determined as per Section 23 (1 ) minus the taxes levied by any local

New provision inserted in DTC.

So now every monitory benefit by employment will be treated as Gross Salary & deductions will be made as specified under D T C . T h e c o n c e p t o f perquisites will go under DTC.

Deduct ions which were covered under the definition of salary, are now separately mentioned under DTC.

This is welcome provision under DTC.

Under draft DTC, the concept of “Self Occupied property” was kept under “Income from House Property” only.

Concept of Deemed to be let out and Fair Market Value has gone resulting in relief to

As per section 86, Deduction of income of primary Co-operative societiesTotal deduction limit is Rs. 100000/-

As per DTC, The income computed under the head “Income from employment” shall be the gross salary as reduced by the aggregate amount of the deductions referred to in Section 23.The deductions specified include the contribution made by employer to the extent of specified limit

The specified deductions Under DTC are1. Profession tax.2. allowance or benefit granted by an employer for journey by an employee between his residence and office or any other place of work 3. Contribution by employer to - approved pension fund (10% limit) - approved superannuation fund - approved provident fund (12%) - interest credited to an approved fund to the extent notified - actual rent paid if allowance is given

Deduction from salary will be allowed under Section 23(h) to the extent as may be prescribed. The limit for deduction is not specified in DTC.

Under DTC, the concept of self occupied property and deemed to be let out has gone. Only Let Out property will be considered.

The gross rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such

8

7

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RemarkSr. No.


Deduction

Income from Capital gainsTax rate on Capital gains

Listed securities

Deduction from Capital Gains

Special Economic Zone - developer

Special Economic Zone - units

authority in respect of the property

1. 30% of Annual value for Repairs and maintenance.2. Interest on housing loan (no limit for let out & Rs. 1.5 .lakhs for self occupied) Currently the rates of tax on income under “Capital gains” is special rate as,On long term capital gain - 20%On Short term capital gain - 15% for shares and normal slab rates for other assets Currently Capital gain arising on transfer of listed equity shares or units of equity oriented funds held for more than one year is exempt provided STT is paid.And Short term capital gain is taxed at 15%. Under current provisions there a r e m a n y o p t i o n s f o r investments provided under section 54,54B,54D,54E54EA, 54EB,54EC etc.

assessee from paying tax on notional income.

Standard deduction reduced by 10%. This might have been done since under IT Act, the deduction of 30% is calculated after deducting local taxes. The assessee whose total income is below threshold limit will get benefited

So for current exemption w.r.t Long term capital gain will remain & current tax rate will get reduced by 50% as a result of deduction of 50%.

As per Draf t DTC, the exemption was granted to SEZ developed & notified till 31.3.2011 & now it is extended by one year.

As per Draft amended DTC, the exemption w.r.t. units in SEZ was proposed for those units already operating in SEZs as on 31.03.2011.But under final DTC bill, the period is extended to 31.3.2014 for units.

property is let out.The taxes levied by local authorities are covered under deductions 1. Local Taxes2. 20% of Gross rent for repairs and maintenance3. Interest on housing loan (without any limit)

Under DTC capital gains are also covered under total taxable income & get taxed as per the specified tax slab. There are no special rates for Capital Gains.

Under DTC, deduction is allowed to the extent of 100% of capital gain on asset held for a period of more than one year & 50% of capital gain on asset held for a period of less than one year

Under DTC, the deduction is allowed if investment in new asset is made (agricultural land & residential house)

As per Section 318 (p) of DTC, the deduction under Section 80-IAB of the repealed Income-tax Act shall continue to be allowed under this Code, if the assessee, being a developer engaged in the business of developing, operating and maintaining a Special Economic Zone notified on or before 31st day of March, 2012 under the Special Economic Zones Act, 2005, subject to the conditions

(r) the deduction under section 10AA of the repealed Income-tax Act shall continue to be allowed under this Code, if the assessee, being an entrepreneur as referred to in Section (j) of section 2 of the Special Economic Zones Act, 2005, begins to manufactureor produce articles or things or provide any service in the unit in the Special Economic Zone on or before the 31st

9

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RemarkSr. No.


Income from Business Deductions

MAT (Minimum Alternate Tax)

For all companies

Other taxes Domestic companies for distribution of profit

Distribution of income by MF to unit holders & by Insurance companies to policy holders

There are industry specific deductions under section 32AB,33,33A,33AB,33ABA,33AC,33B, 34, 34A,35A.

Under IT act, it was 15% till 31.3.2011 & from 1.4.2011 it is 8%

15%

Under IT Act it is 10%

Various industry specific deductions under section 32AB,33,33A,33AB,33ABA,33AC, 33B, 34, 34A,35A are ignored.

Under Draft DTC, the MAT was applicable on gross value of assets but in amended draft it was rectified to Book value as per current provision under I T Act.

day of March, 2014, subject to the conditions

Under DTC deduction as per Section 37 is there foraggregate of the amount in respect of,—(a) depreciation of business capital assets;(b) initial depreciation of business capital assets;(c) terminal allowance;(d) scientific research and development allowance;(e) deferred revenue expenditure allowance.(f) deduction of an amount in accordance with such deposit scheme in respect ofthe person carrying on b u s i n e s s o f g r o w i n g a n d manufacturing tea or coffee or rubberin India, as may be prescribed For scientific research & develoment the deduction will be two hundred per cent of the expenditure (not being expenditure in the nature of cost of any land or building)

Under DTC it is 20% of book profits

15%

5%

13

11

12

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Compulsory audit of accounts

General anti-avoidance rule

Wealth Tax

Charge of Wealth Tax

Basic Exemption

Rate of Tax

Valuation Date

Specified assets

For Professionals - if turnover goes beyond Rs.15 Lakhs ( w. e . f . - 1 . 4 . 2 0 1 1 ) F o r businessmen - if turnover goes beyond Rs.60 Lakhs (w.e.f. - 1.4.2011) There is no such provision under Income Tax act.

Every Individual, HUF and company

Rs. 15 lacs

1 % on net wealth exceeding Rs. 15 lacs

31st March of the previous Financial year

NA

NA

Cash in hand exceeding Rs. 50,000/- for individuals and HUF and in case of other persons any amount not recorded in the books of accounts.

It is welcome move for assessee.

The powers w.r.t. GAAR are kept with CIT but in the amended draft DTC, the some administrative safeguards ere issued & those are kept in final DTC bill as well.

It is welcome move for assessee.

New Insertion

New Insertion

For Professionals - if turnover goes beyond Rs.25 LakhsFor businessmen - if turnover goes beyond Rs.100 Lakhs Presumptive taxation is covered under “Fourteenth schedule”. DTC provides for General anti-avoidance rule under Section 123 w h i c h g i v e s t h e p o w e r s t o Commissioner to declare any arrangement entered into by a person as an impermissible avoidance arrangement as per Section 154 & and determine the consequences, under this CodeIn the amended provision w.r.t. GAAR, further legislative and administrative safeguards have been provided as below: i) The Central Board of Direct Taxes will issue guidelines to provide for the circumstances under which GAAR may be invoked.ii) GAAR provisions will be invoked only in respect of an arrangement where tax avoidance is beyond a specified threshold limit.iii) The forum of Dispute Resolution Panel (DRP) would be available where GAAR provisions are invoked

Every person other than non-profit organization

Rs. 1 Crore

1 % on net wealth exceeding Rs. 1 Crore

31st March of the Financial year

Archaeological collections, drawings, paintings, sculptures or any other work of art has been inserted

Watch having value Rs. 50000/- has been inserted in specified assets

Cash in hand exceeding Rs. 2,00,000/- for individuals and HUF.

16

14

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Exclusions from Specified Assets

Exclusion from the definition of House

Tax Collected at source

NA

NA

NA

NA

NA

NA

NA

a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees; Under current I T provisions there are varied rates for varied transactions like, for liquor & scrap 1%, for tendu leaves - 5%, for timber - 2.5%

New Insertion

New Insertion

New Insertion

New Insertion

New Insertion

New Insertion

New Insertion

Levy of TCS at 3% on scrap as well

deposit in a bank located outside India, in case of individuals and Hindu undivided families, and in the case of other persons any such deposit not recorded in the books of accounts

any interest in a foreign trust or any other body located outside India (whether incorporated or not)

any equity or preference shares held by a resident in a controlled foreign company, as referred to in the Twentieth Schedule. any one building in the occupation of a Ruler, being a building which i m m e d i a t e l y b e f o r e t h e commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was his official residence by virtue of a declaration by the Central Government under paragraph 13 of the Merged States (Taxation Concessions) Order, 1949, or paragraph 15 of the Part B States (Taxation Concessions) Order, 1950;

jewellery in the possession of any Ruler, not being his personal property, which has been recognized as his heirloom

the value of the assets located outside India, if the person is a non resident

any one house or part of a house or one vacant plot of land not exceeding five hundred square metres of area belonging to an individual or a Hindu undivided family. a house meant exclusively for residential purposes allotted by a company to an employee

Under DTC, the TCS rate is 3% for all the transactions

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Transfer PricingDetermination of arm’s length price by Transfer Pricing Officer

Advance Pricing Agreement

Concept of financial year

Submission of return

- Revised return

NA

No such time limit under I T ACT

No prov is ion fo r such agreement is there is I T Act. As per section 92CB, the Board has the power to make the safe harbour rules which also finds place in DTC.

Under current provisions the year to which taxable income pertains is called “Previous year” & the year in which the income gets assessed is called “Assessment year”. Section 139 of Income Tax act.

Similar provisions under I T Act.

Due to Advance Pricing Agreement there will be less litigations in the International transactions.

This was there in draft DTC as well

Under Draft DTC, it was twenty-one months from the end of the relevant financial year or before the completion

There are 3 additions to the list of transaction where TCS is applicable as below:- Grant of lease or license or contract or transfer of any right or interest, either in whole or in part, for a parking lot. - Grant of lease or license or contract or transfer of any right or interest, either in whole or in part, for a toll plaza - Grant of lease or license or contract or transfer of any right or interest, either in whole or in part, for mining or quarrying

As per Section 153 (6) of DTC, determination of Arm’s length price can not be done by Transfer Pricing Officer after a period of forty-two months from the end of the financial year in which the international transaction is entered into.

As per Section 117 & 118 of DTC, 1. The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, specifying the manner in which arm’s length price is to be determined in relation to an international transaction, to be entered into by that person.2. The advance pricing agreement entered into shall be binding on the person who is entering into agreement, on the transaction for which agreement is entered into & on commissioner & his subordinates.3.The determination of arm’s length price shall be subject to safe harbour rules. The concept of Assessment year & previous year has gone under DTC. Each year will be called as “Financial Year” under DTC

Section 144 of DTC.

Under DTC, within 12 months from the end of the relevant financial year or before the complet ion of the assessment, whichever is earlier.

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- Defective return

Due dates of return

Notice for inquiry beforeassessment. Report of Valuation officer Order under Regular assessment

Best Judgment Assessment

Under current provisions it is 15 days.

For Indiv iduals & non-corporate not covered under Section 44AB - 31st July

For corporate & non-corporate covered under Section 44AB - 30th September Under I T act it is 3 years as per proviso Section 142 (1)

Under section 142A of I T Act, no such limit is specified. Under section 143(3) of IT act for regular assessment there is no provision for draft order.

Currently under IT act, Best Judgment Assessment is done only on, (a) fails to make the return section 139 (b) fails to comply with all the terms of a notice issued under 142 (1) & (2A) (c) fails to comply with all the terms of a notice 143(2)

of the assessment, whichever is earlier.So provisions under DTC are brought in line with I T provisions

The period for filing the return is reduced by one month.

So it can be said that assessment will have to be completed within 12 months from the date of draft order.

The Assessing Officer may, if he finds that the return has not been furnished intimate to such person the deficiency and allow him an opportunity to remove the deficiency within a period of thirty days from the service of the intimation.

Non-Business / Non-Corporate - 30th June of the following financial year

For others - 31st August of the following financial year Under DTC section 150 (2), AO can not call for documents/ records/accounts relating to a period more than six years prior to the relevant financial year. As per section 152 (5), the time limit for issuing the report by Valuation officer is 6 months. Under DTC section 155 (4) & (5), the assessing authority has to issue a draft order before issuing the final order.And On receipt of the draft order, the eligible assessee may within 30 days file his acceptance to AO or objections to Dispute Resolution Panel & the AO. The Dispute Resolution Panel would issue directions to AO for final order. Further no direction shall be issued after a period of nine months from the end of the month in which the draft order is forwarded to the eligible assessee. Additional circumstances as compared to provisions under IT Act for making “Best Judgment Assessment” under DTC,1. assessee fails to file the return if ordered by AO after reopening of assessment under section 159.2. Assessee fails to to regularly follow the method of accounting specified or the accounting standards notified under section 89.3. The AO is not satisfied about the correctness or completeness of the accounts of the assessee.

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Re-assessment & block assessment

Payment through cheque

AppealsAppeal to Commissioner (Appeals)

Sect ion 147 - 151 for reassessment & Section 158 for Block Assessment

Under Block assessment the total period covered six assessment years preceding the previous year in which the search was conducted under section 132 or any requisition was made under section 132A and also includes the period up t o t h e d a t e o f t h e commencement of such search Section 269SS & 269T of IT Act, the limit is Rs. 20000/-

Now the assessee would be able to appeal against orders which are appealable in the additional areas as well to Commissioner Appeals.

The current provisions under IT Act for Re-assessment & Block assessment are combined under DTC section 159.

As per DTC, the period that can be covered under reassessment is seven financial years immediately preceding the financial year in which the search and seizure has been carried out or the material has been obtained & seven financial years from the end of the relevant financial year in any other case

As per section 294 of DTC, No person shall accept from, or repay to, any other person any loan or deposit otherwise than by an account payee cheque or bank draft, if the aggregate amount of such loan or deposit in a financial year exceeds fifty thousand rupees.

Additional areas for appeal to Commissioner (Appeal)1. An assessment order made in respect of a non-resident engaged in occasional shipping business.2. An assessment order in respect of persons leaving India.3. An assessment order in respect of an unincorporated body formed for a particular event or purpose. 4. An assessment order in respect of persons likely to transfer property to avoid tax.5. An assessment order in respect of a discontinued business.6. An assessment order in respect of an unincorporated body in case of change in its constitution.7. Assessment order in respect of any two unincorporated bodies in case of succession of one unincorporated body by the other on account of death or retirement of all or any participant.8. An assessment order in respect of a deductor or collector.9. An order of charging interest on failure to pay demand raised.10. An order under the Tenth Schedule in relation to a qualifying shipping company’s application for opting for tonnage tax scheme.11. An order made under the provisions

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Time limitation for filing an appeal

Time limit to dispose off the appeal Appeal to Appellate tribunal

Time limit to dispose off the appeal Revision of orders prejudicial to revenue

Under I T Act. The order under section 154 (rectification of mistake in the return) is appealable only if it has the impact of enhancement of tax or reduction in refund. The application for rectification of filed return is not covered under appealable orders to Commissioner (Appeals).

NA

Commissioner has the power to cancel the assessment and direct a fresh assessment

It may prove to be a good move in case the assessee does not get his application disposed off within a reasonable time

of this Code in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other relevant consideration, direct.12. Any order passed under the Income-tax Act, 1961 or the Wealth Tax Act, 1957 and which was appealable under the said Acts, before the commencement of this Code.

Where an application filed by him under section 161 has not been disposed of by the Assessing Officer within a period of six months

The time limit of 30 days is similar to I T Provisions but there is one added criterion for following:The appeal by an assessee under section 178 shall be preferred within a period of thirty days from the date on which the period of six months for disposing of the application expired, if the appeal relates to not disposing of the application for rectification of return under Section 161. Similar as IT Act

Additional areas under DRC:An assessee may prefer an appeal to the Appellate Tribunal a Commissioner or Commissioner (Appeals) in respect of levy of penalty under Chapter XIV relating to Penalties. Similar as IT Act

As per section 191(4), The revision order passed by the Commissioner may havethe effect of enhancing or modifying the assessment but shall not be an order cancelling the assessment and directing a fresh assessment.

What's New…!!CUSTOMS

Customs (Tariff) –

l Customs duties is exempted on Raw silk of grade 3A and above falling under ITCHS 5002 imported by National Handloom Development Corporation up to an aggregate quantity not exceeding 2500 metric tonnes in a financial year. [CUS NTF NO. 80/2010-CE, DT. 10/08/2010]

l Customs duties and special CVD has been exempted on Specified goods (including machineries, consumables & Spares), imported by or on behalf of Security Printing and Minting Corporation of India Limited (SPMCIL).[CUS NTF NO. 80 & 81/2010-CE, DT. 10/08/2010]

l Anti dumping Duty on Coumarin of all types (29322100) imported from People’s Republic of China is levied and accordingly earlier notification 38/2010 dated 23/03/2010. [CUS NTF NO. 82 & 83/2010 DATE 20/08/2010]

l Benefit of exemption from whole of the Customs Duty now also granted to available to suppliers or contractors or vendors or sub-vendors of the Organising Committee of the Common Wealth Games, 2010. [CUS NTF NO. 84/2010 dated 27/08/2010] & [CUS CIR NO. 26/2010 DATE 09/08/2010]

l Anti dumping on imports of Acrylic Fibre (falling under 5501 30 00 or 5503 30 00) originating in, or exported from, the Japan and Belarus has been continued for a period of 5 years. [CUS NTF NO. 85/2010 dated 30/08/2010]

l Exemption on customs duties has been extended to specified goods imported from Myanmar. [CUS NTF NO. 87/2010 DATE 01/09/2010]

l Export duty has been exempted on raw hides and skins and semi-processed leathers falling under Heading No. 14 when exported from a bonded warehouse where it has been kept after importation. [CUS NTF NO. 88/2010 DATE 01/09/2010]

The benefits of fastener and accessories of apparels of Polyester and Synthetic Textiles like Zipper, fastener and slider; Lace ; Velcro tape ; Elastic tape, curtain tape and edgeband tape; Curtain hook ;

(f) Button and eyelet ;

(g) Tassel ;

(h) Bead and sequin ;

(i) Insert ;

(j) Sample fabric of total length upto 500 metres imported during one financial year

To the exporter who are registered with Synthetic & Rayon Textiles Export Promotion Council to the extent of 1% of FOB Value of Exports. [CUS NTF NO. 89/2010 DATE 01/09/2010]

l Department of Revenue amended Notification w.r.t. EPCG, DEPB, Advance Authorisation in line with changes made in Annual Supplement to FTP. We have separately enclosed the Annual Supplement on FTP. [CUS NTF NO. 90/2010 DATE 01/09/2010]

Customs (Non Tariff) -

l Dhamra in Orissa as port for Unloading of imported goods, namely, Coking coal, Thermal coal and limestone and loading of Iron ore for export. [CUS NTF NO. 69/2010 (NT) DATE 05/08/2010]

l Following amendments have been made in the regulation of the Courier Imports and Exports (Clearance) Regulations, 1998,

a) The agent of Authorized Courier who has passed the examination referred to in regulation 8 or regulation 19 of the Customs House Agents Licensing Regulations, 2004 can file courier bill of entry.

b) Minimum assets of Rs. 25 Lacs will be required for getting registration as Authorised Courier as against earlier 5 Lacs.

c) Security of Rs 10 Lacs will be required for in case of Major international airports of Mumbai, Delhi, Kolkata and Chennai as against earlier Rs. 2 Lacs. For other airports Rs. 5 Lacs as against earlier Rs. 1 Lac.

d) For import consignments having a declared value of ten thousand rupees or less, the authorization may be obtained at the time of delivery of the consignments to consignee.

[CUS NTF NO. 75/2010 (NT) DATE 05/08/2010]

September - 2010

33

CENTRAL EXCISE

Central Excise (Tariff)

l When goods are supplied to Mega Power Projects claiming exemption the duty liability will arise on Developer instead of manufacturer for any failure to follow the procedure. [CE NTF NO. 31/2010-CE, DT. 28/07/2010]

Central Excise (Non Tariff)

No New Notifications!!!

Central Excise Circulars / Instructions

Please refer EOU Section.

SERVICE TAX

Notifications

No New Notification..!!.

Circulars

l Service tax liability does not arise on Underwriting Fee or Underwriting Commission received by the Primary Dealers during the course of the dealing in Government Securities. [Circular No. 126/08/2010-ST dated 10/08/2010]

l It is clarified that service tax will not levied on donation or grant-in-aid received by Charitable Institutions as there is no link or nexus between the donations and the taxable activity under training & coaching. [Circular No. 127/08/2010-ST dated 16/08/2010]

l In case a contract where the provision of service commenced prior to 01.06.2007 and any payment of service tax was made under the respective taxable service before 01.06.2007, then no portion of that contract would be eligible for composition scheme. On the other hand, even if the provision of service commenced before 01.06.2007 but no payment of service tax was made till the taxpayer opted for the composition scheme after its coming into effect from 01.06.2007, such contracts would be eligible for opting of the composition scheme. [Circular No. 128/10/2010-ST dated 24/08/2010]

l If the documents required for registration are not submitted within 7 days of the filing of online application and/or issuance of this Trade notice, these applications will be rejected. [Trade Notice No. 3/ST/2010, dated 11-8-2010] However trade notices which are not in consonance with Board Circulars not required to be considered and there is no corresponding Board Circular on this.

l Tariff Value of Brass Scrap and Poppy seeds revised to USD 3924 per MT and USD 2750 per MT. [CUS NTF NO. 76/2010 (NT) DATE 13/08/2010 & 78/2010 (NT) DATE 31/08/2010 ]

Custom Circulars / Instructions –

l CBEC is really concerned to grant refund of SAD. Earlier it was extended to Manufacturers also when such goods are sold and simplifications in procedures are made. Now it is clarified that refund can also be granted on provisional assessment also and not to wait for final assessment. [CUS CIR NO. 23/2010 DATE 29/07/2010]

l It has been re-clarified that Boric Acid will fall under Chapter Heading 2810 and technical grade pesticides for insecticidal use or Boric Acid put up for retail sale or other specified forms as preparations or articles alone will be classifiable under heading 3808. Accordingly earlier circulars have been withdrawn. [CUS CIR NO. 24/2010 DATE 04/08/2010]

l Due to different practices followed at different airports in India for Baggage allowances, it has be clarified that an Indian resident or a foreigner residing in India of and above 10 years of age and returning after stay abroad of more than 3 days, returning from Hong Kong Special Administrative Region (SAR), P.R. China shall be allowed clearance free of duty upto Rs.25,000/- on articles other than those mentioned in Annexure - I under the Baggage Rules, 1998, as amended. [CUS CIR NO. 25/2010 DATE 04/08/2010]

l The facility of Manual filing of Bill of Entry for utilization re-credited through Duty Free Scrip has been extended up to 30.12.2010 as a one-time measure instead of granting refund. [CUS CIR NO. 27/2010 DATE 13/08/2010]

l Now recognized Export Houses, Star Export Houses, Star Trading Houses etc. will also be entitled to avail the benefit of Accredited C Program (ACP) scheme and cases booked on technical grounds will not be considered for determining unblemished track records. [CUS CIR NO. 29/2010 DATE 20/08/2010]

l It has been clarified that anti-dumping duty is not applicable on Spandex Yarn (Elastomeric yarn). [CUS CIR NO. 30/2010 DATE 30/08/2010]

l Export of sugar will not permitted against raw sugar imported under the Advance Authorization Scheme from 17.2.2009 to 30.9.2009 without the release order of the Directorate of Sugar. [CUS CIR NO. 31/2010 DATE 31/08/2010]

September - 2010

34

[NOTIFICATION NO. 58/2009, DT. 17/08/2010]

l Annual Supplement to Foreign Trade Policy has been issued. Please refer our detailed analysis on the changes in this update. [NOTIFICATION NO. 01/2010, DT. 23/08/2010]

l No Import authorization from DGFT will be required for specified products to be imported for Common Wealth Games, 2010 subject to the conditions specified in Notification issued by Ministry of Finance have been fulfilled. [NOTIFICATION NO. 02/2010, DT. 27/08/2010 & NOTIFICATION NO. 05/2010, DT. 31/08/2010]

l Export of Basmati Rice to Bangladesh has been allowed upto 3,00,000 MT through specified PSU. [NOTIFICATION NO. 03/2010, DT. 30/08/2010]

l Export of Wheat to Bangladesh has been allowed upto 2,00,000 MT through specified PSU. [NOTIFICATION NO. 04/2010, DT. 30/08/2010]

Public Notices –

l Public Notices from Notice number 1 to 7 has been issued in line with the changes as per annual supplement to Foreign Trade Policy. Please refer our detailed analysis on the changes in this update.

Policy Circular –

No policy circular has been issued during the month…!!

FEMA / RBI

l Under deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR, a further revision has taken place on June 21, 2010 and accordingly, the Rupee value of the special currency basket has been fixed at Rs.62.788607 with effect from July 07, 2010. [Circular No 02/2010-11-RB dated 21/07/2010]

l Drawback granted will have to be recovered even if

FOREIGN TRADE POLICY

DGFT Notifications –

l Grain of basmati rice of more than 6.61 mm of length and ratio of length to breadth of the grain more than 3.5 can be exported freely. [NOTIFICATION NO. 57/2009, DT. 17/08/2010]

·l Export policy for export of cotton has been revised stwith effect from 1 October 2010 as under,

Nature of Restriction

161A

Sr. No.

Tariff ItemCode

Item of Description Export Policy

5201

5201 00

5201 00 11

5201 00 12

5201 00 13

5201 00 14

5201 00 15

5201 00 19

5201 00 20

5202

5202 10 00

Cotton, not carded or combed

Cotton, not carded or combed Indian cotton:

Bengal deshi

Indian cotton of staple lengths 20.5 mm (25/32") and below (e. g. oomras, y e l l o w p i c k i n g , Assam Comillas)

Indian cotton of s t a p l e l e n g t h exceeding 20.5mm (26/32") and but not exceeding 24.5mm (30/32")

Indian cotton of staple length over 24.5 mm (31/32") to 28 mm

Indian cotton of staple length 28.5 mm (14/32") and above but below 34.5 mm

Indian cotton of all staple length 34 5 m m a n d a b o v e (112/32")

Cotton, other than Indian, of all staple lengths

C o t t o n w a s t e ( i n c l u d i n g y a r n waste and garnetted stock)

Y a r n w a s t e (including thread waste)

The contracts for export of cotton shall be registered with the Textile Commissioner prior to shipment. Clearance of cotton consignments by Customs should be after verifying that the contracts have been registered.

The contracts for export of cotton shall be registered with the Textile Commissioner prior to shipment. Clearance of cotton consignments by Customs should be after verifying that the

Free

Free

Free

Free

Free

Free

Free

Free

Free

Free

Nature of RestrictionSr. No.

Tariff ItemCode

Item of Description Export Policy

5202 91 00

5202 99 00

52035203 00 00

Other: Garnetted stock

Other

Cotton, carded or combed Cotton, carded or combed

contracts have been registered.

The contracts for export of cotton shall be registered with the Textile Commissioner prior to shipment. Clearance of cotton consignments by Customs should be after verifying that the contracts have been registered

Free

Free

Free

September - 2010

35

l KEM Hospital Research Centre, Pune has been approved by the Central Government for the purpose of clause (ii ) of sub-section (1) of section 35 of the income Tax Act, 1961 for the period 1.4.2003 to 31.3.2006 in the category of “Association” engaged in research activity subject to conditions specified in the notification.[ Notification No. 64 dated 28/07/2010]

SPECIAL ECONOMIC ZONE

l The following procedure is prescribed for removal of goods to bonded warehouse under Rule 46(13) of SEZ Rules 2006

The Unit shall fi e yellow Bill of Entry (YBE to SEZ Customs with copy o invoice pack ng list etcbesides Space Util zation/Availability Certificate from the Customs Officer - in -charge of the bonded warehouse

The goods will move from SEZ to the bonded warehouse on the strength of fifth copy of YBE containing the SEZ Customs report regarding verification marks numbers etc.

iii) The Customs officer in charge of the bonded warehouse will retain the fifth copy of the YBE for his record and issue re-warehousing certificate for the goods received.

v The SEZ unit shall submit the said re-warehousing certificate immediate y to SEZ Customs

v If the SEZ unit fails to submit the re-warehousing certificate within 45 days from the date of clearance of the goods from the Zone the SEZ Customs shall nitiate appropriate action to realize duty and interest on the goods n quest on [SEZ Instruction No. 63 dated 10/08/2010]

l The Development Commissioners of the Central Government owned SEZs were declared as Zonal D e v e l o p m e n t C o m m i s s i o n e r s a n d t h e responsibilities were allocated to them by Instruction No.14, 15, 17, 19 & 43.

Zonal Development Commissioners and all Development Commissioners are required to ensure that the above instructions are followed strictly. Further monthly meetings are to be held by Zonal Development Commissioner with all Development commissioners and specified officers to review performance of SEZ, clarify policy issues and resolve any pending problems.

Further Zonal Development Commissioners are required to collect and maintain a database (in excel) in respect of all data viz exports, imports, employment, investment, import duty collected, duty foregone etc w.r.t all SEZs coming under their jurisdiction, so that whenever, Department of Commerce seeks such information it is provided in a

:

i) f .

i

.

,

.

l ) i

ii)

i ) l

)

, i

i i

,

.

claim is settled by the Export Credit Guarantee Corporation of India Limited (ECGC) or the write –off is allowed by the Reserve Bank and therefore Authorised Dealers are advised not to insist on the surrender of the proportionate export incentives, other than under the Duty Drawback scheme, if availed of, by the exporter under any of the Export Promotion Schemes under the FTP 2009-14, subject to the fulfillment of conditions as stated in Para 2.25.4 of FTP. [Circular No 03/2010-11-RB dated 22/07/2010]

l Automatic Approval is granted to ECB even if re-finance of Rupee loans availed from the domestic banks by eligible borrowers in the sea port and airport, roads including bridges and power sectors for the development of new projects, subject to the conditions and other terms & conditions will also be applicable such as eligible borrower, recognized lender, end-use, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements. [Circular No 04/2010-11-RB dated 22/07/2010]

l The trading of currency options on spot USD-INR rate in the currency derivatives segment of the stock exchanges recognized by SEBI shall now be permitted. The currency options market would function subject to the directions, guidelines, instructions, rules, etc issued by the Reserve Bank and the SEBI from time to time. [Circular No 05/2010-11-RB dated 30/07/2010]

l The Annual Activity Certificates (AAC) from the Auditors, as at end of March 31, along with the audited Balance Sheet shall be submitted on or before September 30 of that year. In case the annual accounts of the Liaison Office/ Branch Office are finalized with reference to a date other than March 31, the AAC along with the audited Balance Sheet may be submitted within six months from the due date of the Balance Sheet. [Circular No 06/2010-11-RB dated 09/08/2010]

l It has been decided to consider applications, under the approval route, for buyback of FCCBs until June 30, 2011, subject to the issuers complying with all the terms and conditions of buyback/ prepayment of FCCBs. [Circular No 07/2010-11-RB dated 09/08/2010]

INCOME TAX

l Technology Information, Forecasting & Assessment Council (TIFAC), New Delhi has been approved by the Central Government for the purpose of clause (ii ) of sub-section (1) of section 35 of the income Tax Act, 1961 for the period 1.4.2003 to 31.3.2006 in the category of “Association” engaged in research activity subject to conditions specified in the notification. [Notification No. 63 dated 28/07/2010]

September - 2010

36

words, if the price at which the depot sales the goods will be the base to determine deductive value after reducing Selling & Distribution Cost, General Expense, Profit, Taxes etc. [CIR NO. 933/23/2010-CX, DT. 16/08/2010]

Maharashtra VAT

Notifications

l With effect from 1st October 2010, every registered dealer liable to file the returns, shall make electronic payment of any amount under MVAT Act, 2002. [Notification No. 1510/CR-90/Taxation-1 dated 28/07/2010]

Maharashtra VAT Circulars

No New Circulars!!!

consolidated form. All Development Commissioner should submit all such reports through the Zonal Development Commissioners.

Instructions (Number 14,15,17,19 and 43) are subsumed in this instruction. [SEZ Instruction No. 64 dated 11/08/2010]

EOU / EHTP / STP

l In view of change of Jurisdiction of EOU/EHTP/STP implementation of ACES and forthcoming GST will be with Central Excise even in the port cities. [CIR NO. 932/22/2010-CX, DT. 04/08/2010]

l When goods are cleared from EOU to DTA on the basis of Stock Transfer or other than Sale, the provisions of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 to be followed in view Tribunal decisions in case of M/s Endress + Housers Flowtec (I) Pvt Ltd and Others. In other

September - 2010

37

CENTRAL EXCISE

l Bifurcating the two Units for claiming the basic

exemption of 3500 MT of Paper is the question of fact

and the same was not put by the revenue and hence

appeal filed by the Department dismissed by Hon’ble

Supreme Court. [2010-TIOL-60-SC-CX]

l A Unit had extended the 4 MT capacity furnaces to 6

MT capacity furnaces, resulting 50% increase in

installed capacity in order to avail the exemption

under Notification No 50/2003 CE Dated 1.6.2003.

This can be treated as “Substantial expansion by

way of not less than 25% increase in installed

capacity”. [2010-TIOL-1039-CESTAT-DEL]

l Cost of Additional packing in nature of secondary

packing for convenience of Up-country customers

not includable. [2010 (256) E.L.T.321 (SC)]

l It is settled law that Commissioner (Appeals) has no

power to remand the case. The Commissioner

(Appeals) should have decided the case. Since the

issue is not relating to loss of goods in transit , but

only occurring in the course of manufacture of

goods, the bar under Section 35B(1) is not attracted.

[2010-TIOL-1040-CESTAT-DEL]

l Chartered Accountant’s Certificate alone cannot be

accepted as an evidence to rule out unjust

enrichment without any corroborative evidences

such as balance sheet, ledger accounts, sales

invoices prior to after import etc. so as to

automatically enable the person to get exemption in

the absence of any other evidence to support that he

is entitled to refund. [AIT-2010-332-HC]

l Hon’ble High Court has slashed penalty on CESTAT

Bar Association, Bangalore for filing the appeal

agaist the Editorial of Mr. R.K. Jain who has written

against the functioning of CESTAT on administrative

side and to some extent judicial side. Out the penalty

of Rs. 2 Lacs, one lac is required to be paid to Mr. R.

K. Jain [AIT-2010-340-HC]

l Penalty under Section 11AC of Central Excise Act is

not attracted to the facts of every case unless

categorical findings of fraud, collusion, willful mis-

statement etc with intention to evade payment of

duty have been recorded. Imposition of penalty is not

automatic and cannot be levied in absence of such

finding. [2010 (256) E.L.T.15 (P&H)]

l Cenvat credit on inputs tested for quality control

before actual manufacture of final products in the lab

located in factory premises is allowed irrespective of

whether or not input is physically present in finished

products. [2010 (256) E.L.T.56 (Mum)]

l Matter is referred to Larger Bench of CESTAT in

absence of specific clarification regarding exclusion

for reversal of Cenvat Credit or payment of amount in

terms of Rule 6(6)(i) of Cenvat Credit Rules, 2004, in

view of the amendment by Notification 50/2008-CE

dated 31.12.2008 wherein supplies to SEZ

Developer was also incorporated. [2010 (256)

E.L.T.85 (Tri-Del)] Unfortunately it was not

brought to the notice of the bench w.r.t.

definition of Export mentioned in SEZ Act, 2005

and Provisions of Sec 51 of SEZ Act, 2005.

l The relevant date for calculation of interest is the

date of determination of duty liability by adjudicating

authority and not the date on which order was

confirmed. [2010 (256) E.L.T.107 (Tri-Chennai)]

l No Cenvat to be reversed on Cenvat availed on

Rejected goods received under Rule 16 of Central

Excise Rules, 2002 when removed from the factory

as scrap generated after processing of such rejected

goods on payment of duties on scrap value. [2010-

TIOL-1074-CESTAT-MAD]

l The charges towards pre-delivery inspection and

after-sale-service by dealers from buyers of the cars

are to be included in the assessable value of cars in

the light of the definition of transaction value given in

Section 4(3) (d) of the Central Excise Act, 1944.

[AIT-2010-366-CESTAT]

l Mere non accounting of goods cannot be concluded

as clandestine removal, in absence of corroborative

evidence of Transport etc. and therefore penalty will

have to nominal for non accounting of goods. [AIT-

2010-365-HC]

l Government dues do not have priority of claims over

that of secured creditors. However if legislature

makes those dues has having priority of claims State

dues will rank higher in priority than dues of secured

creditors. [2010 (19) STR 449]

September - 2010

38

availment of Cenvat Credit for claiming abatement

on GTA. [2010 (19) STR 403]

l Cenvat Credit is admissible on Service tax paid on

GTA on transportation upto Depot. [2010 (19) STR

470]

l Department directed not to initiate coercive steps

for recovery of service tax for retrospective period

under Renting of Immovable Property. [2010 (19)

STR 336 (T)]

l Proceeding ought to not have initiated when service

tax paid on self assessment along with interest.

Penalty dropped. [2010 (19) STR 359]

INCOME TAX

l In absence specific definition of Income Tax Act,

1961, benefit of section 80IA cannot be denied

when an assessee is paying excise duty, and other

taxes are leviable on the manufacturing and

production, then it cannot be denied that the said

activity is a ‘manufacture’. [2010-TIOL-430-ITAT-

MAD]

RIGHT TO INFORMATION ACT

l Part icular Information was sought from

administrative officer who provided the incomplete

information which too was in part. The same was not

provided even after oral directions were given by

CIC and CPIO and later on stated that said

information is not available, when show cause

notice was issued to him. Delay in transmitting the

information was established and penalty of

Rs.25000 was imposed for delay of more than 100

days. [2010 (256) E.L.T.81 (CIC)]

CUSTOMS

l Customs is empowered to adjudicate post

importation conditions w.r.t. Export Obligation under

EPCG Scheme even before completing Export

Obligation Period prescribed under the Scheme.

[2010 (256) ELT 433]

SERVICE TAX

l Service tax on Import of Services is leviable only

with effect from 18.4.2006 with insertion of Section

66A in view of Supreme Court upholding the

decision of High Court in case of Indian National

Ship Owners Association. [2010-TIOL-1057-

CESTAT-MAD]

l Cenvat Credit of service tax paid on Landscaping

service is admissible as it is an Input service. [2010-

TIOL-1058-CESTAT-MAD]

l Cenvat credit of service tax paid on the Consultancy

Services used for environmental evaluation work

including onsite evaluation and report submission is

allowed. [2010-TIOL-1059-CESTAT-MAD]

l The Cenvat credit of input service availed at the time

of receipt of inputs such as GTA, Loading,

Unloading, CHA etc is not required to be reversed at

the time of clearance of inputs as such. [AIT-2010-

346-HC] [3010 (256) ELT 420 T]

l CENVAT Credit is admissible on the service tax paid

on employees’ Medical Insurance and Employees’

personal accident insurance. [2010-TIOL-1075-

CESTAT-MAD]

l Cenvat Credit of Service Tax paid on Mobile Phones

is available even if the bills are in the name of

employees but paid / reimbursed to the employees.

[2010 (19) STR 406 (Tri-Delhi)]

l Notification not requires consignment wise

declaration on consignment notes w.r.t. non

September - 2010

39

Obtain:

l Birth Certificate <http://www.india.gov.in/howdo/howdoi.php?service=1

l Caste Certificate <http://www.india.gov.in/howdo/howdoi.php?service=4>

l Tribe Certificate <http://www.india.gov.in/howdo/otherservice_details.php?service=8>

l Domicile Certificate <http://www.india.gov.in/howdo/howdoi.php?service=5>

l Driving Licence <http://www.india.gov.in/howdo/howdoi.php?service=6>

l Marriage Certificate <http://www.india.gov.in/howdo/howdoi.php?service=3>

l Death Certificate <http://www.india.gov.in/howdo/howdoi.php?service=2>

l Search More - How do I <http://www.india.gov.in/howdo/advancedsearch.php>

Apply for:

l PAN Card <http://www.india.gov.in/howdo/otherservice_details.php?service=15>

l TAN Card <http://www.india.gov.in/howdo/otherservice_details.php?service=3>

l Ration Card <http://www.india.gov.in/howdo/howdoi.php?service=7>

l Passport <http://www.india.gov.in/howdo/otherservice_details.php?service=2>

l Inclusion of name in the Electoral Rolls <http://www.india.gov.in/howdo/howdoi.php?service=10>


Register:

l Land/Property <http://www.india.gov.in/howdo/howdoi.php?service=9>

l Vehicle <http://www.india.gov.in/howdo/howdoi.php?service=13>

l With State Employment Exchange <http://www.india.gov.in/howdo/howdoi.php?service=12>

l As Employer <http://www.india.gov.in/howdo/otherservice_details.php?service=17>

l Company <http://www.india.gov.in/howdo/otherservice_details.php?service=19>

l IN Domain <http://www.india.gov.in/howdo/otherservice_details.php?service=18>

l GOV.IN Domain <http://www.india.gov.in/howdo/otherservice_details.php?service=25>


Check/Track:

l Waiting list status for Central Government Housing

<http://www.india.gov.in/howdo/otherservice_details.php?service=9>

l Status of Stolen Vehicles <http://www.india.gov.in/howdo/otherservice_details.php?service=1>

l Land Records <http://www.india.gov.in/landrecords/index.php>

l Causelist of Indian Courts <http://www.india.gov.in/howdo/otherservice_details.php?service=7>

l Court Judgements (JUDIS ) <http://www.india.gov.in/howdo/otherservice_details.php?service=24>

l Daily Court Orders/Case Status <http://www.india.gov.in/howdo/otherservice_details.php?service=21>

l Acts of Indian Parliament <http://www.india.gov.in/howdo/otherservice_details.php?service=13>

l Exam Results <http://www.india.gov.in/howdo/otherservice_details.php?service=16>

l Speed Post Status <http://www.india.gov.in/howdo/otherservice_details.php?service=10>

l Agricultural Market Prices Online <http://www.india.gov.in/howdo/otherservice_details.php?service=6>


Book/File/Lodge:

l Train Tickets Online <http://www.india.gov.in/howdo/otherservice_details.php?service=5>

l Air Tickets Online <http://www.india.gov.in/howdo/otherservice_details.php?service=4>

All government office related links…

September - 2010

40

l Income Tax Returns <http://www.india.gov.in/howdo/otherservice_details.php?service=12>

l Complaint with Central Vigilance Commission (CVC)

<http://www.india.gov.in/howdo/otherservice_details.php?service=14>


Contribute to:

l Prime Minister’s Relief Fund <http://www.india.gov.in/howdo/otherservice_details.php?service=11>


Others:

l Send Letters Electronically <http://www.india.gov.in/howdo/otherservice_details.php?service=20>


Recently Added Online Services

l Tamil Nadu: Online application of marriage certificate for persons having registered their marriages

<http://www.india.gov.in/howdo/onlineservice_detail.php?service=2691>

l Tamil Nadu: Online District wise soil Details of Tamil Nadu


l Tamil Nadu: View Water shed Atlas of Tamil Nadu


l Tamil Nadu: E-Pension District Treasury Tirunelveli


l Meghalaya: Search Electoral Roll Online by Name (2008)


l Meghalaya: Search Electoral Roll Online by EPIC number (2008)


l Meghalaya: Search Electoral Roll Online by House number (2008)


l Himachal Pradesh: Revised Pay and Arrears Calculator-Fifth Pay


l Meghalaya: Search Electoral Roll Online by Part number (2008)


l Andhra Pradesh: Online Motor Driving School Information


Global Navigation

l Citizens <http://www.india.gov.in/citizen.php>

l Business (External website that opens in a new window) <http://business.gov.in/>

l Overseas <http://www.india.gov.in/overseas.php>

l Government <http://www.india.gov.in/govt.php>

l Know India <http://www.india.gov.in/knowindia.php>

l Sectors <http://www.india.gov.in/sector.php>

l Directories <http://www.india.gov.in/directories.php>

l Documents <http://www.india.gov.in/documents.php>

l Forms <http://www.india.gov.in/forms/forms.php>

l Acts <http://www.india.gov.in/govt/acts.php>

September - 2010

41

September - 2010

42

Ø It is official now - GST to miss April 1, 2011 deadline – Finance Minister

Ø Chief Commissioner of Central Excise Bhopal finally raided by CBI

Ø SC dismisses Contempt Petition filed by Bangalore CESTAT Bar Association

against RK Jain Editor of Excise Law Times for writing Editorials which were

uncomfortable for many-SC also imposes cost of Rs 2 Lacs on CESTAT Bar

Association.

Ø ICAI reports no violation of audit norms by some IPL teams.

Ø Bar Council of India to frame a Code of Conduct for Law Firms-Giving of Legal

Opinion by Accounting & Consulting Firms by hiring lawyers may be barred.

Ø Major fire destroys sensitive records in DRI Hqs 'Source Room' where electronic

interception takes place; Source of fire not yet traced.

Ø Deputy Commissioner of Income Tax Dhananjay Kumar arrested by CBI in

Mumbai-Joint Commissioner of Customs & Excise Hemant Kothikar also

arrested by CBI.

September - 2010

43

Ø Indirect Tax collections grow by 46.2 per cent during April to July 2010

Ø CVC advises major penalty against 92 officers in June

Ø Industrial production growth rate comes down to 7.1% in June

Ø E-Payment of Central Excise & Service Tax-With effect from September 1, 2010 excise & service tax payment challans with cheque tender date greater than September 1, 2010 will be accepted at EASIEST central system (NSDL) only with a valid assessee code present in the assessee code directory - RBI Instructions

Ø Hero Honda shares fall by 7 per cent after reports of stake sale by Honda to Munjals

Ø Justice Arun Misra of MP High Court tipped to be Chief Justice of Rajasthan high Court

Ø Salaluddin Ahmed is Chief Secretary of Rajasthan

Ø BK Patnaik is Chief Secretary of Orissa

Ø S.Raman to be CMD of Canara Bank

Ø Ramnath Pradeep to be CMD of Corporation Bank

Ø Arun Kaul to be CMD of UCO Bank

Ø R Ramachandran to be CMD of Andhra Bank

Ø Arup Roy Chowdhary of NBCC to be CMD of NTPC

Ø Joint CDR of Delhi CESTAT resigns-all set to join as Partner of a Law firm

Ø Mukul Joshi of Punjab Cadre to be Secretary Pharmaceuticlas

Ø Special Secretary Commerce Dr S Behuria of Himachal Cadre to be Secretary Fertiliser

Ø M Raman of Tamil Nadu Cadre to be Secretary Chemicals & Petro Chemicals

Ø Finance Minister directs expediting of Cadre Restructuring in CBDT & CBEC

September - 2010

44

I'm the Boss

The boss was complaining in the staff meeting that he wasn't getting any respect.

Later that morning he went to a local sign shop and bought a small sign that read:

'I'm the Boss!'

He then taped it to his office door. Later that day when he returned from lunch, he found that someone had taped a note to the sign that said: 'Your wife called, she wants her sign back!'

A young businessman had just started his own firm. He rented a beautiful office and had it furnished with antiques. Sitting there, he saw a man come into the outer office. Wishing to appear the hot shot, the businessman picked up the phone and started to pretend he had a big deal working.

He threw huge figures around and made giant commitments. Finally he hung up and asked the visitor, "Can I help you?"

The man said, "Yeah, I've come to activate your phone lines."

A Young Businessman

UPDATE

September - 2010

1. Special Economic Zonel Formationl Management & Operationsl SEZ Marketing

2. Export Oriented Unitsl Formationl Management & Operationsl Exit / De-bonding of Unit

3. EXIM / Export Benefits l DEPB / Drawback l Advance Authorization l EPCG Authorization

4. Direct & Indirect Taxation l Income Taxl Central Excise & Customs l Service Tax l VAT / CST

5. Knowledge Process Outsourcing l Central Excise & Customs l EOU's & SEZ's

6. Company Law Matters l Formation of the Company l FIPB / FEMA l ECB

7. International Freight Forwarding Logistics & Custom Clearance

8. End-to-End IT Solutions (With ERP Migrations)

l Comprehensive EOU Software l Software for SEZ Developers / Unitsl Specialize Excise & EXIM Solutionsl Localization of ERP Systemsl Data Migration Projects l Sub-Contracting Solutions

9. Business Review / Special Assignments / Feasibility Study

10. Internal Audits

Focus - Goods & Service Tax, Direct Tax Code and International Financial Reporting Standards.

O U R S E R V I C E S

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ash Commercial Mall, Near Pan Card Club, Baner Road, Board of Directors Advisory Board Editorial Board

Venkat R. Venkitachalam Monica Joshi Manoj Malpani

Ashok Nawal Arun Sawant

Manoj Behede Pravin Arote

Hemant Sonar

Manisha Pawshe

Ganesh Borge

Kiran Sawale

Bizsolindia Services Pvt. Ltd.

September - 2010UPDATE

Advisory Board

Manoj Malpani Manisha Pawshe Ganesh Borge Kiran Sawale

Monica Joshi Arun Sawant Pravin Arote

Editorial Board