Leaf No:    003
Month:   June
Year:   2010
latest news


#   CBEC has identified the list of documents to be filed with refund/rebate claims under Central Excise and Customs in their website. The list is for refund in respect of excess payment of duty, pre deposits, rebate of duty on goods exported, refund of SAD etc. Details are available in http://www.cbec.gov.in/refund-rebate/refundrebate-docs.pdf 

#   The Board has decided to confer the power of adjudication on the Superintendents, for cases involving duty upto Rs. 1 Lakh in a show cause notice, except in respect of issues involving rate of duty and valuation or where extended period of limitation has been involved... Click here Circular No : 922/12/2010-CX  

#   Commercial tax department, Tamil Nadu to populise the fast track clearance system at check posts. Through new facility assessees can log on to the website and make entries of details of consignment while loading the goods and get a printed acknowledgment which is to be submitted at check post at special e-counter. The check post office on submission of e consignment acknowledgment will verify uploaded data with consignment and ensures instant clearance. For demonstration log on to www.tnvat.gov.in


 #   In a fresh breather to the Public Sector Undertakings, the Supreme Court has held that the reference of disputes between PSUs and Government to Committee of Disputes needs a re-visit as the system has failed in several aspects... Click here for the judgement

#   Now the First and Second stage dealers also to file returns electronically. Moreover the periodical returns like ER-4, ER-5, ER-6 etc are also to be filed electronically. Click here for Circular No : 926/16/ 2010 - CX  & Notfn No : 21/2010-CX.,(N.T.)
circulars & notifications

 Customs - Valuation for warehoused goods  

Living to its reputation, the Board has once again confused all concerned by issuing a Circular clarifying(!) that, in respect of goods which are imported and warehoused, the value at which goods were imported has to be treated as assessable value and not the value at which such goods are cleared from ware house. Click here for Circular F. No. 465/6/2010-Cus.V


Central Excise - Better sense prevailed    

The use of other person's brand name in the packing materials manufatured by a SSI manufacturer has underwent a roller - coaster. In Budget 2010, when the Board extended the benefit to plastic containers and plastic bottles vide Notfn no. 4/2010 - CE, we criticised the mean logic and advocated that the benefit has to be extended to all packing materials manufactured by a SSI manufacturer and bearing other's brand name. In a rare show of wisdom and common sense, the Board has now extended the benefit to all packing materials bearing the brand name of another person and manufactured by a SSI manufacturer, thus putting tons of dispute to rest. Click here for Notification No. 24/2010 - CE 


Central Excise - Cost of return fare not includible in assessable value

Earlier vide Circular No. 827/4/2006 dated 12th April 2006, the Board had clarified that the cost of return fare of vehicles was to be included in the value. Now in an assessee friendly Circular, the Board has accepted the order of tribunal in case of Haldia Petrochemicals and it is been clarified that the cost of return fare of vehicles is not required to be added for determining value. Click here for Circular No . 923/13/2010-CX.


Service Tax - Laying of cables is non - taxable 

CBEC clarifies service tax liability in respect of electrical works done in respect of roads, railways, transport terminals , scope of erection and commissioning service and site formation and clearance done as part of services as laying of cables etc.   Activities as shifting of overhead cables, wires for widening or renovation of roads, laying of cables alongside roads, or between grids/substations etc, laying cables up to distribution point of residential or commercial complex, railway electrification etc has been held to be non taxable service. The circular also classifies activities as installation of transformer/ sub stations , laying of cables beyond distribution point of residential complex, installation of street lights, traffic light or other electrical and electronic appliance as a taxable service. Click here for Circular 123/05/2010-ST.

genie in aladdin’s lamp


In the coming days water could be a precious commodity traded for profit and supply of water entailing that business would constitute industry. However production of drinking water to the community in Gram Panchayats and Nagar Panchayats in the State on recovery of user charges at a highly subsidized rate, does not come within the expression “industry”. Observing so, the Bangalore bench of the Hon’ble Tribunal has set aside the demand of service tax under commercial or industrial construction service, on the activity of laying pipelines for distribution of drinking water, done for Gujarat Water Supply and Sewerage Board, a Statutory Body created by a special enactment.  Click here for the order  



Lack of clarity in Rule 6 (3) of Cenvat Credit Rules, 2004 as to treatment of input services used for trading has led to maintaining a new set of accounts by assessees . It was recently held by CESTAT that trading activity is not to be treated as a service and hence provisions of Rule 6 of Cenvat Credit Rules will not apply. It was further held that the assessee will have to deduct periodically the service tax paid on input services used for trading activity on basis of standard accounting principles....Click here for the CESTAT order.



The Hon’ble Highcourt of Andhra pradesh has disposed off the writ petition filed by M/s. Nagarjuna constructions challenging classification of ongoing contracts on the basis of circular No. 98/1/2008-ST dated 01-01-2008 by upholding the circular on ground that once service tax is paid under normal rate, even in respect of amounts received post 01-06-07, no reclassification is possible for availing composition scheme. It is to be noted here that the writ petition was filed challenging classification of ongoing works contract services post 01-06-07 ...Click here for the High Court Order.



Using the ugly tools of revalidating the provisions retrospectively, in this Budget, the Central Government tried to amend the provisions relating to rental of immovable property and circumvent the decision of the Hon'ble Delhi High Court rendered in the case of the same petitioner as reported in 2009-TIOL-196-HC-DEL-ST.  Upon a writ petition filed, the Hon'ble High Court has observed that , prima facie, it appears that renting of immovable property itself has been regarded as a service by virtue of the recent amendment even though this Court by virtue of the said decision on 18.04.2009 had categorically concluded that renting of immovable property by itself cannot be regarded as a service. Click here for the High Court 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
Dear Readers,

     Greetings from TEAM SA !
It is said that a genius is someone who takes something complicated and makes it simple. An idiot is someone who takes something simple and makes it complicated. So while discussing about tax issues I should try hard not to be an idiot.

Right from the moment I ventured in to the field of taxation, one thought that has vexed my mind was the philosophy of taxation. All the books that I read for my profession had always started with the perfunctory ritual of Article 265 of Indian Constitution and concluded with a penalty or a saving clause . A mind vexed with ‘why’ can never be satisfied with ‘how’. So until I came to know about the existence of an ideal system of taxation envisaged by the great philosopher and statesman Kautilya, through some outstanding judgments, my craving left unanswered.

sa corner

LTU - A boon or a bane !

- a. p ravi 

Born out of the mind of eminent Management thinker Joseph M. Juran and named after the Italian Economist Vilfredo Pareto, the "Pareto principle", is believed to be the principle behind the Large Tax paying Units (LTU). It is based on an 80% - 20% Rule, concieved by Mr. Pareto, who  originally observed that, 80% of the property in Italy was owned by 20% of the Italian population and from this came the conclusion that 80% of the consequences sprout from 20% of the causes.  Similarly, in Indian Tax environment, 80% of the tax is generated from 20% of the Industrial houses, which are handled by 20% of the infrastructure. In other words, the remainder of 80% of the work force collects only 20% of the Revenue ...

guest column                    

- santosh hatwar

When my dearest friend Jai Kumar asked me to make a contribution to the guest column of the monthly newsletter originating from the stables of ‘swamy associates’, I asked him if there is any specific area that I should focus upon keeping in mind the esteemed recipients of this master-piece of a monthly anthology of tax related information. He mentioned ‘anything under the sun’.

With this, the first thought that struck my upper crust was ‘shelter’ from the fiery sun during this hot summer. Come rain or shine, all of us aspire to be in the cool confines of that beautiful place that we call our ‘home sweet home’.

While the first guest in the inaugural newsletter, my buddy Suresh, focussed on the genesis of this wonderful firm completely dedicated to the services of their clients, the second one from dearest Raghu gave us a dose of taxation in our daily lives, spanning from the good old GST to the brand new GST. In this backdrop, I felt that it is time to delve into some serious issues concerning taxation and hence this focus on ‘home sweet home’...

read more ... 

gst corner                 -yoga

#   The Finance Ministry has proposed to the States that the Second Discussion Paper on GST ( First Discussion Paper was released in November 2009) should be jointly drafted by the Centre and the States so that there is convergence on the issues.

#   The Chairman of the Empowered Committee of State Finance Ministers, Mr. Asim Dasgupta today said the panel expected the Constitutional Amendment Bill to facilitate the roll out of the GST regime to be tabled in the coming Monsoon session of the Parliament and the meeting of the Empowered Committee of State Finance Ministers would be held in the third week of June this year to deliberate on the issue.

#     The latest grapevine is that the Government may not propose a Fourth List in the Constitution to deal with the GST. Instead, GST, which will empower both the Centre and the States to simultaneously levy taxes on goods and services, may be defined  an Article in Chapter 11.

#      The Union Finance Ministry is seeking veto power in the proposed Council of Finance Ministers on the GST.

#   The Government has constituted a Technical Advisory Group for Unique Projects (TAGUP) under the chairmanship of Nandan Nilekani to develop Information Technology (IT) infrastructure in five key areas, including the GST.

before parting ... -jk


bar @ law


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