Leaf No:    004
Month:   July
Year:   2010
latest news     

 #   In Service Tax, Rules on ‘place of supply’ & ‘time of supply’  are being drafted and the draft rules will be for published for public viewing by the end of this month for taking industry feedback.

Tax astrologer predicts that, as usual, the draft would become law ignoring all / any  feedback!!!


#   Clean Energy Cess Rules, 2010 notified.

Hope at least this levy would be administered CLEAN !!!


#   Revised Discussion paper on Direct Tax code released.

A frustrated tax payer asks how many more revision tests before the final exam?


 #   National Litigation Policy (NLP) has become effective from 01-07-2010. The NLP is formulated with an intent to reduce pendency and delay in cases where Central Government is a party.

Sources say that litigation has already started against the NLP itself!!!


#   RBI issues instructions to banks to adhere strictly to the guidelines on issue of credit cards.

By the way,  who would regulate the "gundas" recovery by MNC banks?

#  Tamil Nadu Sales Tax Settlement of Arrears Act, 2010 notified with rules for settlement of arrears in respect of dealers assessed to tax under TNGST, TNAST , CST etc on or before 31/3/07. The application for settlement can be made only if no appeal, revision is pending before any forum against assessment on date of filing of application.

Would it include all kinds of “settlements?”

circulars & notifications


#  Section 19 of TNVAT Act, 2006 has been amended providing that if a registered dealer has sold goods at a price lesser than purchase price, amount of input tax credit over and above output tax on those goods shall be reversed......Amendment vide Act No. 22 of 2010 reported in 2010-11 (16) TNCTJ 81


#  Drawback Rules amended extending time limit for filing applications for fixing of brand rate draw back, supplementary claims and actual claims under Section 74. Click here for Copy of Notification  

#  Refund procedures relaxed to speed up SAD refunds Click here for Circular 



Clearances to Diplomatic missions as per Notification 6/2006-CE will not attract provisions of Rule 6 of Cenvat Credit Rules, 2004 ...Click here for Notification.  

Eligibility for credit on capital goods, inputs and inputs used in manufacture of Capital goods clarified after decision of Larger Bench in Vandana Global Ltd v. CCE ...Click here for Circular

Process of Pickling and Oiling of metals being preparatory measures will not amount to manufacture...Click here for Circular  

? Advance payments received in respect of new services and modified existing services prior to 01-07-2010 exempted ..Click here for Notification.  

? Notification 01/06 has been amended with an intent to extend abatement to various services provided therein when provided inside a port or airport.... Click here for Notification.

? Commercial and Industrial Construction service provided under section 65 (105) (zzq) when provided wholly inside airport is exempted. But what about constructions falling under Works contract service rendered inside port ????? ... Click here for Notification.  

? Taxable service provided by cargo handling agency and storage and warehouse keeper in relation to agricultural produce or goods to be stored in cold storage are exempted when provided wholly within port or other port or Airport.  When the definition of cargo handling service itself excludes handling of export cargo will it not be applicable to all kind of export cargo irrespective of whether it is agricultural or not???? The notification also exempts transport of export goods in aircraft and also site formation and clearance services provided inside port/other port or airport...Click here for Notification.

? Taxable service provided by goods transport agency inside port and port exempted ...Click here for Notification.

? Services provided by airport authority or any person inside airport in relation to export of goods exempted ... Click here for Notification.

? Effective date of liability on import of services when received in India and outside India clarified(!!!) .. Click here for Circular 

? Construction service provided by contractors to NBCC for construction of residential complexes to Central Government subject to service tax ....Click here for Circular.

? CBEC has issued Circular explaining amendments post Finance Act, 2010 .. Click here for Circular

genie in aladdin’s lamp

Future Focus Infotech India (P) Ltd vs Commissioner of Service Tax, Chennai ( 2010 - TIOL-835 - CESTAT - MAD)  

In a major hit to the Software Industry CESTAT, Chennai has ruled that the supply of skilled personnel to software companies is in nature of manpower supply. The implications of this ruling would be huge for the period prior to 19-05-2008, as in most of the cases, no service tax has been paid on this activity, treating it as consulting engineer and hence exempted from service tax, till the introduction of information technology software service.... Click here for copy of CESTAT Order.


CCE, Chandigarh vs Rajeev Electrical Works (2010-TIOL-438-HC - P&H - ST) 

The Hon’ble P & H Highcourt has held that the activities like laying the pipe in wall/roof/floor for crossing of wires, fixing the junction box, MS box, Wooden Box, fixing the cables trays to lay the cables, digging the earth to lay the cables and digging the earth pits for earthling of equipments would not amount to commissioning, installation of plant, machinery and equipment. ... Click here for copy of High Court judgement.


Bhansali Engg Polymers Ltd vs CCE, Jaipur (2010-TIOL-890-CESTAT-DEL)

CESTAT, Delhi has held that provisions of Rule 8 (3A) of Central Excise Rules, 1944 is subject to Section 11 A (2B)...  Click here for copy of CESTAT Order.


State of Tamil Nadu vs Coimbatore Pioneer Rolling Mills & Anr (2010 30 VST 524 MAD) 

When stock transfer is supported by Form F and other documents as pattials, stock statement, loading and unloading details etc the transfer cannot be held as an inter state sale merely because sales were effected by agents on very same day or next day of arrival of goods 


CCE, Siliguri vs BPCL (2010 - TIOL - 895 - CESTAT - KOL)

It has once again been reiterated that assessment of goods transferred to retail outlets to be done at time and place of removal. The law provides that price of greatest aggregate quantity of goods sold on date of removal to be adopted at time of removal from factory ... Click here for copy of CESTAT Order.

The views expressed and the information provided in this newsletter are of general nature and is not intended to address the circumstances of any particular individual or entity. Further the above content should neither be regarded as comprehensive nor sufficient for making decisions. Although we endeavor to provide accurate and timely information, there is no assurance or guarantee in this regard. No one should act on the information or views provided in this publication without appropriate professional advice. It should be noted that no assurance is given for any loss arising from any actions taken or to be taken or not taken by anyone based on this publication.

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editor’s desk                           sindhu
sa corner

Don't worry, Mustafa  

                    - g. natarajan

 This summer, we decided to beat the Chennai heat with South East Asia’s popular destinations Malaysia and Singapore. Hey, don’t try to run away to another page, I am not going to write a travelogue. I know you had enough of it in all holiday editions of the newspapers and in flight magazines. So this is not about the amazing 6000 Rooms Hotel First World International, the architectural marvel behind the twin towers, or the longest cable car drive to the dreamland Genting or the panoramic view from the Flier, or the night date with nature, or the experience of rubbing shoulders with the winged comrades in Jurang Park or scintillating laser show of Sentosa. It is also not about the spic and span roads or the disciplined traffic flow or the vagaries in the attitude of tourist guides. But about a topic which is more relevant for all of us…..GST refund!


read more ...

guest column           

- an eavesdropper


March 20, 2010. 6.00 a.m. Kamaraj Domestic terminal, Chennai Airport.


Flight No. 9W 822. The entry was given through the aerobridge and almost all the passengers have boarded and taken their respective seats. The craft was almost full and the door was about to be closed. Suddenly a tall and a well built gentleman, rushed inside the flight. Dressed in a black tuxedo, he seemed to be quite sweating and obviously tensed. He searched for his seat, stumbled on another passenger and finally got seated in the row where I was seated at the window. After the formalities of in-flight instructions and safety puppet shows, the flight shrugged its engine and started taxiing onto the runway. The tuxedo man seated in the aisle seemed to be still tensed and started searching for something in his hand bag.Between us, in the middle seat, there was a young and a cool guy, who was curiously looking at our friend’s gestures. The flight took off and pierced the sky in style. After some time, the young guy, who was sitting between us, introduced himself as Mr. Janakaraj and a practicing advocate to the tuxedo man. In turn, our tuxedo friend introduced himself as Mr. Mehta. Then they started chatting between each other. The exact conversation is….

read more ... 
gst corner                                                                                                                                    - yoga


• The Empowered Committee will have its next meeting on GST on July 21. The Centre plans to send the draft Bill for consideration of the States before this meeting so that it is put on fast track. The Government is also trying to get the approval of the States on the draft of Constitutional amendment at the earliest so that the Bill can be introduced in the monsoon session of Parliament, which is likely to begin on July 26.


• The Empowered Committee has suggested that the existing exemption lists of the States and the Centre shall continue in GST, whereas, the Task Force of the 13th Finance Commission had suggested only five exemptions — public services such as civil administration, defence and police; employer-employee transactions; unprocessed food sold under the public distribution system; education services provided by non-governmental bodies; and health services offered by non-governmental agencies.


• The Centre has discussed the issue of threshold limit for GST with the empowered group. The Centre is of the view that, instead of keeping out of Central GST, small businesses below Rs 1.5 crore could be compensated by simplifying and reducing the paperwork for them. These small businesses would not be required to file returns frequently and the registration process would be simplified for them, besides prescribing a minimum audit, based on risk parameters.


• Centre is against on different thresholds for different States. As over 80 per cent of the goods having inter-state movement, different thresholds can lead to an accounting fiasco. Separate threshold for separate States would also lead to change in the assessee base for the Centre, which in turn would affect the requirement for IT infrastructure.


• The Centre has agreed to states’ demand that tobacco be kept within the ambit of Goods and Services Tax (GST) and alcohol outside GST but has opposed keeping crude petroleum and natural gas outside the ambit of GST, as it would imply that the credit on capital goods and input services were going into exploration, and extraction would not be available, which would have cascading effects.


• In the last GST meeting, the centre had agreed to give more than Rs 50,000 crore to compensate the States for losses on account of GST introduction, which is more that the prescription of the 13th Finance Commission which had suggested a compensation of Rs 50,000 crores for five years.


before parting ...                        -jk


“ TB laws ”


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