Goods and Services Tax

FEMA – 10/2011-12 – Dated:- 1-7-2011 – RBI/2011-12/10 Master Circular No.10/2011-12 July 01, 2011 To, All Category – I Authorised Dealer Banks Madam / Sir, Master Circular on Export of Goods and Services Export of Goods and Services from India is allowed in terms of clause (a) of sub-section (1) and sub-section (3) of Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Acco

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

FEMA – 07/2011-12 – Dated:- 1-7-2011 – RBI 2011-12/7 Master Circular No. 7/2011-12 July 01, 2011 To, All Category – I Authorised Dealer Banks Madam / Sir, Master Circular on Import of Goods and Services Import of Goods and Services into India is being allowed in terms of Section 5 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Account) Rules, 2000 as amended from time to time. 2. This Master Circular consolidates the existing instructions on the subject of Import of Goods and Services at one place. The list of underlying circulars consolidated in this Master Circular is also furnished. 3. This Master Circular is being issued with a sunset clause of one year. This circular will stand withdrawn on July 1, 2012 and be replaced by an updated Master Circular on the subject. Yours faithfully, (Rashmi Fauzdar) Chief General Manager INDEX Section A – Introduction Section B- Ge

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nex- 4 Appendix List of Circulars consolidated in the Master Circular Section A – Introduction (i) Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, Department of Commerce, Government of India. Authorised Dealer Category – I (AD Category – I) banks should ensure that the imports into India are in conformity with the Foreign Trade Policy in force and Foreign Exchange Management (Current Account Transactions) Rules, 2000 framed by the Government of India vide Notification No. G.S.R.381 (E) dated May 3, 2000 and the Directions issued by Reserve Bank under Foreign Exchange Management Act, 1999 from time to time. (ii) AD Category – I banks should follow normal banking procedures and adhere to the provisions of Uniform Customs and Practices for Documentary Credits (UCPDC), etc. while opening letters of credit for import into India on behalf of their constituents. (iii) Compliance with the provisions o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nnex-4). B.3. Import Licenses Except for goods included in the negative list which require licence under the Foreign Trade Policy in force, AD Category – I banks may freely open letters of credit and allow remittances for import. While opening letters of credit, the For Exchange Control purposes copy of the licence should be called for and special conditions, if any, attached to such licences should be adhered to. After effecting remittances under the licence, AD Category – I banks may preserve the copies of utilised licence /s till they are verified by the internal auditors or inspectors. B.4. Obligation of Purchaser of Foreign Exchange (i) In terms of Section 10(6) of the Foreign Exchange Management Act, 1999 (FEMA), any person acquiring foreign exchange is permitted to use it either for the purpose mentioned in the declaration made by him to an Authorised Dealer Category – I bank under Section 10(5) of the Act or to use it for any other purpose for which acquisition of foreign

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s, remittances against imports should be completed not later than six months from the date of shipment, except in cases where amounts are withheld towards guarantee of performance, etc. (ii) AD Category – I banks may permit settlement of import dues delayed due to disputes, financial difficulties, etc. Interest in respect of delayed payments, usance bills or overdue interest for a period of less than three years from the date of shipment may be permitted in terms of the directions in para C.2 of Part III below. B.5.2. Time limit for deferred payment arrangements Deferred payment arrangements, including suppliers and buyers credit, providing for payments beyond a period of six months from date of shipment up to a period of less than three years, are treated as trade credits for which the procedural guidelines laid down in the Master Circular for External Commercial Borrowings and Trade Credits may be followed. B.5.3. Time limit for import of books Remittances against import of boo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

) send into India without limit foreign exchange in any form other than currency notes, bank notes and travellers cheques; (ii) bring into India from any place outside India, without limit foreign exchange (other than unissued notes), which shall be subject to the condition that such person makes, on arrival in India, a declaration to the Custom Authorities at the Airport in the Currency Declaration Form (CDF) annexed to these Regulations; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in by such person at any one time does not exceed USD10,000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash portion) alone brought in by such person at any one time does not exceed USD 5,000 (US Dollars five thousand) or its equivalent. B.6.2. Import of Indian currency and currency notes (i) Any person re

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ch a guarantee is issued against the counter-guarantee of an international bank of repute situated outside India, is obtained. (b) In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Government/s) is unable to obtain bank guarantee from overseas suppliers and the AD Category – I bank is satisfied about the track record and bonafides of the importer, the requirement of the bank guarantee / standby Letter of Credit may not be insisted upon for advance remittances up to USD 5,000,000 (US Dollar five million). AD Category – I banks may frame their own internal guidelines to deal with such cases as per a suitable policy framed by the bank s Board of Directors. (c) A Public Sector Company or a Department/Undertaking of the Government of India / State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, is required to obtain a specific

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

a recognized processor of rough diamonds as per the list to be approved by Gems and Jewellery Export Promotion Council (GJEPC) in this regard and should have a good track record of export realisation; (b) AD Category – I bank should undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction; (c) Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds; (d) KYC and due diligence exercise should be done by the AD Category – I bank for the Indian importer entity and the overseas company; and (e) AD Category – I bank should follow up submission of the Bill of Entry / documents evidencing import of rough diamonds into the c

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

report should be submitted within 15 days from the close of the respective half year. C.1.3. Advance Remittance for Import of Aircrafts/Helicopters and other Aviation Related purchases As a sector specific measure, airline companies which have been permitted by the Directorate General of Civil Aviation to operate as a schedule air transport service, can make advance remittance without bank guarantee, up to USD 50 million. Accordingly, AD Category – I banks may allow advance remittance, without obtaining a bank guarantee or an unconditional, irrevocable Standby Letter of Credit, up to USD 50 million, for direct import of each aircraft, helicopter and other aviation related purchases. The remittances for the above transactions shall be subject to the following conditions: The AD Category – I banks should undertake the transactions based on their commercial judgment and after being satisfied about the bonafide of the transactions. KYC and due diligence exercise should be done by th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

id as milestone payments, the date of last remittance made in terms of the contract will be reckoned for the purpose of submission of documentary evidence of import. Prior to making the remittance, the AD Category – I bank may ensure that the requisite approval of the Ministry of Civil Aviation / DGCA / other agencies in terms of the extant Foreign Trade Policy has been obtained by the company, for import. In the event of non-import of aircraft and aviation sector related products, AD Category – I bank should ensure that the amount of advance remittance is immediately repatriated to India. Prior approval of the Regional Office concerned of the Reserve Bank will be required in case of any deviation from the above stipulations. C.1.4. Advance Remittance for the import of services AD Category – I bank may allow advance remittance for import of services without any ceiling subject to the following conditions: (a) Where the amount of advance exceeds USD 500,000 or its equivalent

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

on usance bills or overdue interest for a period of less than three years from the date of shipment at the rate prescribed for trade credit from time to time. (ii) In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which interest has been claimed or LIBOR of the currency in which the goods have been invoiced, whichever is applicable. Where interest is not separately claimed or expressly indicated, remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at the prevailing LIBOR of the currency of invoice. C.3. Remittances against Replacement Imports Where goods are short-supplied, damaged, short-landed or lost in transit and the Exchange Control copy of the import licence has already been utilised to cover the opening of a letter of credit against the original goods which have been lost, the original endorsement to the ext

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s sites in connection with the setting up of their International Call Centres (ICCs) subject to the following conditions: (i) The BPO company should have obtained necessaryapproval from the Ministry of Communications and Information Technology, Government of India and other authorities concerned for setting up of the ICC. (ii) The remittance should be allowed based on the AD Category – I banks commercial judgment, the bonafides of the transactions and strictly in terms of the contract. (iii) The remittance is made directly to the account of the overseas supplier. (iv) The AD Category – I banks should also obtain a certificate as evidence of import from the Chief Executive Officer (CEO) or auditor of the importer company that the goods for which remittance was made have actually been imported and installed at overseas sites. C.6. Receipt of Import Bills/Documents C.6.1. Receipt of import documents by the importer directly from overseas suppliers Import bills and documents should b

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

0,000 where the importer of rough diamonds, rough precious and semi-precious stones has received the import bills / documents directly from the overseas supplier and the documentary evidence for import is submitted by the importer at the time of remittance. AD Category – I banks may undertake such transactions subject to the following conditions: (i) The import would be subject to the prevailing Foreign Trade Policy. (ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. (iii) AD Category – I banks should do the KYC and due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. Before extending the facility, they should also obtain a report on each individual overseas supplier from the overseas banker or reputed overseas credit rating agency. C.6.3. Receipt of import documents by the AD Category – I bank directly from overseas suppliers

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ive remittance was made, to ensure that the importer submits :- (a) The Exchange Control copy of the Bill of Entry for home consumption, or (b) The Exchange Control copy of the Bill of Entry for warehousing, in case of 100% Export Oriented Units, or (c) Customs Assessment Certificate or Postal Appraisal Form, as declared by the importer to the Customs Authorities, where import has been made by post, as evidence that the goods for which the payment was made have actually been imported into India. (ii) In respect of imports on D/A basis, AD Category – I bank should insist on production of evidence of import at the time of effecting remittance of import bill. However, if importers fail to produce documentary evidence due to genuine reasons such as non-arrival of consignment, delay in delivery/ customs clearance of consignment, etc., AD bank may, if satisfied with the genuineness of request, allow reasonable time, not exceeding three months from the date of remittance, to the importe

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of India (CAG). AD Category – I bank may insist on a declaration from the auditor/CEO of such institutions that their accounts are audited by CAG. C.7.3. Non Physical Imports (i) Where imports are made in non-physical form, i.e., software or data through internet / datacom channels and drawings and designs through e-mail/fax, a certificate from a Chartered Accountant that the software / data / drawing/ design has been received by the importer, may be obtained. (ii) AD Category – I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause. C.8. Issue of acknowledgement AD Category – I bank should acknowledge receipt of evidence of import e.g. Exchange Control copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars relating to the import transactions. C.9. Verification and Preservation (i) Internal i

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

er. (ii) AD Category – I bank should forward a statement on half-yearly basis as at the end of June & December of every year, in form BEF (Annex 1) furnishing details of import transactions, exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within 6 months from the date of remittance, to the Regional Office of Reserve Bank under whose jurisdiction the AD Category – I bank is functioning, within 15 days from the close of the half-year to which the statement relates. (iii) AD Category – I bank need not follow up submission of evidence of import involving amount of USD 100,000 or less provided they are satisfied about the genuineness of the transaction and the bonafides of the remitter. A suitable policy may be framed by the bank s Board of Directors and AD Category – I bank may set their own internal guidelines to deal with such cases. C.11. Issue of Bank Guarantee AD Category – I b

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

d shall be fixed later, as and when the importer sells the gold to the users. These instructions would also apply to import of platinum and silver. C.13. Direct Import of Gold AD Category – I bank can open Letters of Credit and allow remittances on behalf of EOUs, units in SEZs in the Gem & Jewellery sector and the nominated agencies / banks, for direct import of gold, subject to the following (i) The import of gold should be strictly in accordance with the Foreign Trade Policy. (ii) Suppliers and Buyers Credit, including the usance period of LCs opened for direct import of gold, should not exceed 90 days. (iii) Banker s prudence should be strictly exercised for all transactions pertaining to import of gold. AD Category – I bank should ensure that due diligence is undertaken and all Know Your Customer (KYC) norms and the Anti-Money-Laundering guidelines, issued by Reserve Bank from time to time are adhered to while undertaking such transactions. AD Category – I ba

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ks undertaking gold import transactions are required to submit as per the format enclosed at Annex-3, a monthly statement thereof, to the Chief General Manager, Trade Division, Foreign Exchange Department, Amar Building, Central Office, Reserve Bank of India, Sir P.M. Road, Fort, Mumbai 400001. C.14. Gold Loans (i) Nominated agencies / authorised banks can import gold on loan basis for on lending to exporters of jewellery under this scheme. (ii) EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold on loan basis for manufacturing and export of jewellery on their own account only. (iii) The maximum tenor of gold loan would be as per the Foreign Trade Policy 2009-2014, or as notified by the Government of India from time to time in this regard. (iv) AD bank may open Standby Letters of Credit (SBLC), for import of gold on loan basis, where ever required, as per FEDAI guidelines dated April 1, 2003. The tenor of the SBLC should be in line with the tenor of the gold l

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ut and polished diamonds should not exceed 90 days from the date of shipment. (b) AD Category – I banks should ensure that due diligence is undertaken and Know Your Customer (KYC) norms and Anti-Money Laundering (AML) guidelines, issued by the Reserve Bank are adhered to while undertaking import of the metals and rough, cut and polished diamonds. Further, any large or abnormal increase in the volume of business should be closely examined to ensure that the transactions are bonafide and are not intended for interest / currency arbitrage. All other instructions relating to import of these metals and rough, cut and polished diamonds shall continue. C.16. Import factoring (i) AD Category – I bank may enter into arrangements with international factoring companies of repute, preferably members of Factors Chain International, without the approval of Reserve Bank. (ii) They will have to ensure compliance with the extant foreign exchange directions relating to imports, Foreign Trade

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

f the transaction is extinguished by the payment received for the export leg of the transaction, without any delay. AD Category – I banks may note that short-term credit either by way of suppliers credit or buyers credit is not available for merchanting trade or intermediary trade transactions. Appendix List of Circulars consolidated in the Master Circular Import of Goods and Services AP (DIR Series) Circular No. 106 dated June 19, 2003 AP (DIR Series) Circular No. 4 dated July 19, 2003 AP (DIR Series) Circular No. 9 dated August 18, 2003 AP (DIR Series) Circular No. 15 dated September 17, 2003 AP (DIR Series) Circular No. 49 dated December 15, 2003 AP (DIR Series) Circular No. 66 dated February 6, 2004 AP (DIR Series) Circular No. 72 dated February 20, 2004 AP (DIR Series) Circular No. 2 dated July 9, 2004 AP (DIR Series) Circular No. 34 dated February 18, 2005 AP (DIR Series) Circular No. 1 dated July 12, 2005 AP (DIR Series) Circular No. 33 dated February 28, 2007 AP (DIR Seri

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Customs – 01/2011 – Dated:- 14-6-2011 – OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VADODARA-I TRADE FACILITY NOTICE NO. 01/2011-CUSTOMS 14 June 2011 Sub: Instructions / Procedure for issuance of NOC to exporters requesting for supervision of stuffing and sealing of containerized cargo and allocation of work amongst the field officers for such supervision and sealing. Attention of all manufacturers and exporters is invited to various Circulars/instructions issued by the Board from time to time laying down the procedures of stuffing and sealing of export containers, provision for single factory stuffing permission, export of non-excisable goods under self-sealing and self-certification and other related instructions in the subject matter. The reports called from the field formations have indicated that the number of exporters opting for stuffing and sealing of export containers in presence of the Central Excise officers has substantially increased even though the facilit

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

been changed by JNCH, Nhava Sheva vide their Public Notice No. 23/2010 dated 26.02.2010 issued from F.NO. S/6-Misc-02/2007-FSP-JNCH. The Public Notice [in Para 10] now requires the exporters to submit their applications for Factory Stuffing Permission [FSP] along with the following documents: (i) NOC issued by the Central Excise Authorities for deputing officers for supervising the stuffing of export cargo; (ii) Original copy of the verification report on genuineness of the existence and functioning of the factory. This implies that the exporters would seek the NOC and the verification report from the jurisdictional Central Excise authorities prior to submitting their application for Factory Stuffing Permission [FSP]. 3.2 The exporter requiring the documents mentioned in (i) & (ii) above shall make an application to the jurisdictional Assistant/Deputy Commissioner in the prescribed application form [as in Annexure-I] along with the supporting documents. The jurisdictional Assistant

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ners. No request for stuffing and sealing of such export containers shall be entertained. 4. Allocation of the work of supervision of stuffing and scaling of the export containers. 4.1 The exporter to whom the NOC has been given and who has obtained the factory stuffing permission from the concerned Customs Station, as per the existing instructions, shall make an application to the Assistant/Deputy Commissioner in-charge of Technical Section in the format prescribed [as in Annexure-II], at least 48 hours in advance, for allocation of officers for the work of supervision of examination, stuffing and sealing of the export containers. Attention, in this regard, is drawn to the Board's Circular No.934/24/2010-CE dated 25.08.2010. Board has decided to provide online scheduling for factory stuffing examination by Central Excise Officers. The trade should, accordingly, submit their requisition for officers in the official e-mail Id: hqtechgrediffmail.com provided to the Technical Section.

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

for rendering Services by Customs Officers) Regulations, 1998. If a manufacturer or exporter requisitions the services of Central Excise Officers for supervision and examination of export cargo and stuffing in containers at his premises, such officers also discharge functions of "Customs Officers". The MOT fees are to be paid in advance by the exporter as per their plan for stuffing. On confirmation of the availability of the officers by the Technical Section the exporter shall pay the MOT in advance and submit a copy of challan to the Technical Section. 4.4 If the Factory stuffing permission – issued by the Custom Station requires supervision of Assistant/Deputy Commissioner the jurisdictional Assistant/Deputy Commissioner of Central Excise shall do the needful. 5. Submission of Report regarding examination, stuffing and sealing of containers. 5.1 The inspector/superintendent nominated, for the purpose of examination, stuffing, sealing of containers, would act as a Sector/R

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

E – I [Prescribed under Standing Order No./2011] Application form for obtaining NOC from Central Excise authorities 1. Applicant Firm Details i. Name ii. Address: (Registered Office in case of Companies and Head Office in case of Others) iii. Address of Factory where goods are Manufactured iv. Telephone Nos. v. Email address (for correspondence) 2. Excise Details i. Excise Registration Number ii. issuing Authority iii. Range & Address iv. Division & Address v. Commissonrete & Address 3. Details of Proprietor/ Partners/Directors of the applicant firm i. Name ii. Father s Name iii. Residential Address iv. Telephone 4. Nature of Concern (please tick)

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

iv. Valid upto v. Products for which registered 9. Status House Details i. One/Two/Three/Four/Five Star ii. Certificate Number iii. Date of Issue iv. Issuing Authority v. Validity Date 10. PAN and Bank Details i. Pan Number ii. Issuing Authority iii.Name of the Bank iv.Account No. v. Type of Account 11. VAT Details i. VAT Registration Number ii. Issuing Authority 12. Turnover Details for the preceding three licensing years Financial Years annual Domestic Turnover (Rs. Lakhs Annual Export Turnover (Rs. Lakhs) (enclose copies of Balance sheets is for three years) 13. Factory Stuffing Premises Details i. Name

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

is application are true and correct t the best of my / our knowledge and belief and nothing has been concealed or withheld therefrom. 2. I / We fully understand that any information furnished in the application if found incorrect or false will render me / us liable for any penal action or other consequences as may be prescribed in law or otherwise warranted. 3. I / We hereby certify that the firm / Company for whom the application has been made has not been penalized under Central Excise Act/Allied Acts. 4. I hereby certify that I am authorized to verify and sign this declaration in terms of Power of Attorney vested in me by the Firm / company Place: Date: Signature of the Applicant Name Designation Official Address Residential Address Email Address Telephone No. Mobile No. ANNEXURE – II (in Duplicate & in advance before 48 hours) Date: / /2011 To, The Deputy/ Assistant Commissioner (Tech.), Central Excise & Customs, Hdqrs., Commissionerate Subject: Requisition for allotment of

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 7-6-2011 – Press Information Bureau Government of India Ministry of Finance 07-June-2011 16:59 IST FM to Inaugurate Annual Conference of Chief Commissioners and Directors General of Customs, Central Excise and Service Tax Tomorrow; Revenue Mobilisation, GST and Managing Innovations Efficiently to Dominate the Two Days Conference The All India Annual Conference of the Chief Commissioners and Directors General of Customs , Central Excise and Service Tax will be held at Vigyan Bhawan , New Delhi on 8th and 9th June, 2011. The Union Finance Minister, Shri Pranab Mukherjee will inaugurate the Conference on 8th June, 2011 while Minister of State for Finance Shri S.S. Palanimanickam will preside over the valedictory function on 9th June,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

F.No.V/DGST/21-30/Legal/10/2010/2698 Dated:- 29-4-2011 Order-Instruction – Circulars – Service Tax – DIRECTORATE GENERAL OF SERVICE TAX 9th Floor, Piramal Chambers, Jijibhoy Lane, Parel, Lalbaug, Mumbai 400 012 Dated: April 29, 2011 Sub: Service tax liability on the value of SIM card SLP (C) No.24690/2009 filed by M/s. Idea Mobile Communication Ltd. against the Order of the Hon'ble High Court of Kerala Reg. The above SLP has been filed by M/s. Idea Mobile Communication Ltd. against the order dated 4.9.2008 of the Hon'ble High court of Kerala in Central Excise Appeal No. 20/2006. The issue in brief leading to the filing of SLP is as below:- A notice was issued to the petitioner demanding service tax on the value

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

annot be taken in the case of the petitioner despite that they have remitted Sales Tax and consequently Service Tax is chargeable on the value of the SIM card. The information received from various formations all over India, it is seen that while in most of the States/Zones, Service tax is being paid on the value of SIM cards, there are certain Zones/States where service tax is not being paid and the State authorities are collecting Sates Tax/VAT on these SIM cards. In view of the practice followed in majority of the field formations on the issue and the matter being sub-judice, you are requested to issue directions to the field formations under your charge to raise protective demands on this issue to safeguard Government revenue. [F

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Service Tax – Started By: – Samprada Kharat – Dated:- 21-4-2011 Last Replied Date:- 22-4-2011 – A Company is engaged in exports of goods relating to Iron & Steel Industry. Now this Company is using the services of Clearing & Forwarding agents & Banking & Financial Services in this regards… According to the provisions, these both services are exempted and the Company can demand refund of the payment made…Plz guide me whether my interpretation of the ACT is correct and if not

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2011 (4) TMI 845 – CESTAT, NEW DELHI – 2012 (25) S.T.R. 30 (Tri. – Del.) – – Waiver of pre-deposit – exemption under notification 12/2003-ST – whether the value of materials supplied by service receiver can be brought within the meanings of “gross amount charged” or “consideration” used in section 67 of the Finance Act 1994 – Held that:- The type of contract undertaken by assessee would be covered under “Works Contract Service” from 01-06-2007 – In the notification it is specified that an assessee should indicate the value of materials sold in each invoice. All what is required is that they should have documentary proof specifically indicating the value of the said goods and materials sold. When the applicants are making a claim that they have paid VAT on more than 67% of the gross receipts received by them and they have documentary proof by way of VAT returns, this claim cannot be brushed aside – Hence, the Applicants have made out a strong prima facie case in their favor for comple

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

wer. 3. The Revenue contests that they were engaged in providing only finishing services and hence they were not eligible for the benefit of the said notifications. It is also alleged that in some of the contracts, the Applicants had received free of cost (FOC) materials from the service receivers and the value of such FOC materials was not included in the gross amount charged before availing the rebate of 67% provided under the notifications. The demand confirmed in the impugned service is based on the above arguments. 4. The Applicants submit that the contracts undertaken by them were in the nature of composite works contract which were made chargeable to service tax only with effect from 01-06-2007 under works contract service and hence the applicants were not liable to pay service tax during the impugned period. 5. They further submit that even if they were liable to pay service tax under construction services, they were entitled to avail exemption under notification 12/2003-ST in

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

shing service. He also argues that this exemption was available only if the value of all the materials supplied free of cost by the receiver of the service was included in the gross receipts before applying the 67% abatement from the gross value. 8. The Ld. DR further contests that for claiming exemption under notification 12/2003-ST they should have indicated the value of the material sold in the concerned invoices. Since this was not done they are not eligible for the exemption and the demand has been rightly confirmed. 9. We have considered arguments on both sides. 10. The condition specified in Notification 01/2006-ST against S. No. 7, which is the relevant entry, reads as under: This exemption shall not apply in such cases where the taxable services provided are only completion and finishing services in relation to building or civil structure, referred to in sub-clause (c) of clause (25b) of section 65 of the Finance Act. Explanation.- The gross amount charged shall include the va

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 12. There can be a dispute whether activity undertaken by the Applicants is the one at clause (c) or that at clause (d) above. Further notification 1/2006-ST does not talk about inclusion of value of materials supplied free of cost by the receiver of the service. It only says that the value of materials sold by the provider of service should be included in the gross value before claiming abatement. The question whether the value of materials supplied by service receiver can be brought within the meanings of gross amount charged or consideration used in section 67 of the Finance Act 1994 is presently under dispute in many cases before the Tribunal and different Courts. 13. Notification 12/2003-ST reads as under:

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Hospital Services and Diagnostics Tests Exempted from New Levy in its Entirety; Abatement Enhanced From 40% to 55% of Retail Sale Price for SSI Garment Manufactures; Basic Custom Duty Reduced from 30 Per Cent to 5 Per Cent on Raw Silk AD Valorem; Constitution Amendment Bill to Facilitate GST Introduced – Dated:- 22-3-2011 – The Union Finance Minister Shri Pranab Mukherjee has proposed to enhance the abatement from 40% to 55% of the Retail Sale Price for the Small Scale Industries (SSI) Garment Manufacturers. With this relief, a unit would continue to be eligible for SSI exemption in 2011-12, even if it had a turnover based on Retail Sale Price of Rs 8.9 crore in the current year. The necessary notification in this regard will be issued in d

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

impact on the domestic sericulture sector. The Union Finance Minister Shri Mukherjee said that it has been decided to exempt the new levy in its entirety both in respect of services provided by hospitals, as well as by way of diagnostic tests until GST comes into force. This has been done in view of considerable anxiety raised in this regard in the Parliament and outside, the Finance Minister added. He said that the purpose of the new levy was not mobilise revenues but to pave the way for the introduction of the GST. Beside above, outlining a significant legislative agenda for reforms in the financial sector, the Union Finance Minister Shri Mukherjee introduced the Constitution Amendment Bill to facilitate the GST in Lok Sabha today. Besid

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 22-3-2011 – Empowered Group on IT Infrastructure on GST headed by Shri Nandan Nilekani Preface The broad IT plan for enabling GST was presented to the Government of India and the Empowered Committee of State Finance Ministers under the Chairmanship of Dr. Asim Dasgupta on July 21, 2010. This document is a follow-up to that presentation and feedback thereon and describes the IT strategy for GST implementation. This document is at the draft stage, and will evolve as various stakeholders a

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Allied Laws – Govt introduces Constitution Bill in LS for GST – TMI Updates – Highlights

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Govt introduces Constitution Bill in LS for GST – Dated:- 22-3-2011 – New Delhi, Mar 22 (PTI) The government today introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Service Tax (GST), an indirect tax regime that would subsume levies like excise, service tax and sales tax. The Bill, introduced by Finance Minister Pranab Mukherjee seeks to amend the constitution with a view to confer simultaneous powers on centre and states to levy taxes on goods and services. The GST would replace a number of indirect taxes presently being levied by the central government and the state governments and is intended to remove cascading of taxes and provide a common national market for goods and services , said the statement of objects and reasons of the Bill. The Bill provides for creation of a GST Council to be headed by Union Finance Minister. GST : The Constitution (One Hundered and Fifteenth Amendment) Bill, 2011* [BILL NO. 22 OF 2011] A Bill furthe

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

: Provided that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation.-For the purpose of this article, State includes a Union territory with Legislature. Amendment of article 248 3. In article 248 of the Constitution, in clause (1), for the word Parliament , the words, figures and letter Subject to article 246A, Parliament shall be substituted. Amendment of article 249 4. In article 249 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 250 5. In article 250 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 268 6. In article 268 of the Constitution, in clause (1), the words and such duties of excise on medicinal and toilet preparations shall be omi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. Explanation II.-For the purpose of this article, State includes a Union territory with Legislature. (2) Parliament may, by law, formulate the principles for determining when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Amendment of article 270 10. In article 270 of the Constitution,- (i) in clause (1), for the words, figures and letter articles 268,268A and 269 , the words, figures and letter articles 268, 269 and 269A shall be substituted; (ii) after clause (1), the following clause shall be inserted, namely :- (1A) Goods and services tax levied and collected by the Government of India shall also be distributed between the Unionand the States in the manner provided in clause (2). . Amendment of article 271 11. In article 271 of the Constitution, after the words in those articles , the words except the goods and services tax s

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Services Tax Council shall make recommendations to theUnionand the States on- (a) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to or exempted from the goods and services tax; (c) the threshold limit of turnover below which goods and services tax may be exempted; (d) the rates of goods and services tax; and (e) any other matter relating to the goods and services tax, as the Council may decide. (5) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. (6) One-third of the total number of members of the Goods and Services Tax Council shall constitute the quorum at its meetings. (7) The Goods and Services Tax Council shall determine the procedure in

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

stituted under article 279A that results in a loss of revenue to a State Government or the Government of India or affects the harmonised structure of the goods and services tax. (2) The Goods and Services Tax Dispute Settlement Authority shall consist of a Chairperson and two other members. (3) The Chairperson of the Goods and Services Tax Dispute Settlement Authority shall be a person who has been a Judge of the Supreme Court or Chief Justice of a High Court to be appointed by the President on the recommendation of the Chief Justice of India. (4) The two other members of the Goods and Services Tax Dispute Settlement Authority shall be persons of proven capacity and expertise in the field of law, economics or public affairs to be appointed by the President on the recommendation of the Goods and Services Tax Council. (5) The Goods and Services Tax Dispute Settlement Authority shall pass suitable orders including interim orders. (6) A law made under clause (1) may specify the powers whic

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

rvices or both shall be substituted; (iii) for clause (3), the following clauses shall be substituted, namely :- (3) Any law of a State shall, in so far as it imposes, or authorises the, imposition of a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of tax as Parliament may by law specify. (4) Nothing in clause (3) shall apply to a law of a State insofar as it imposes or authorises the imposition of goods and services tax. . Amendment of article 366 14. In article 366 of the Constitution,- (i) after clause (12), the following clause shall be inserted, namely :- (12A) goods and services tax means any tax on supply of goods or services or both except taxes on the supply of the following goods, namely :- (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natur

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

produced inIndia, namely:- (a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products. ; (ii) entries 92 and 92C shall be omitted; (b) in List II – State List,- (i) for entry 52, the following entry shall be substituted, namely:- 52. Taxes on the entry of goods into a local area for consumption, use or sale therein to the extent levied and collected by a Panchayat or a Municipality. ; (ii) for entry 54, the following entry shall be substituted, namely:- 54. Taxes on the sale, other than sale in the course of inter-State trade or commerce or sale in the course of international trade and commerce of, petroleum crude, high speed diesel, natural gas, motor spirit (commonly known as petrol), aviation turbine fuel and alcoholic liquor for human consumption. ; (iii) entry 55 shall be omitted; (iv) for entry 62, the following entry shall be substituted, namely:- 62. Taxes on entertai

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nded by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of three years from the date of such assent. (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament. STATEMENT OF OBJECTS AND REASONS The scheme of the Constitution does not provide for any concurrent taxing powers to theUnionas well as the States. It is proposed to introduce the goods and services tax and for this purpose to amend the Constitution conferring simultaneous power on Parliament as well as the State Legislatures including every Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

goods outside the purview of the goods and services tax; (b) subsuming of State VAT/Sales Tax, entertainment tax (unless it is levied by the local bodies), Luxury Tax, Taxes on lottery, betting and gambling, tax on advertisements, State Cesses and Surcharges insofar as they relate to supply of goods and services and Entry Tax, not levied by local bodies; (c) levy of Integrated GST (IGST) on inter-State transactions of goods and services; (d) conferring simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax; (e) coverage of goods other than crude petroleum, diesel, pertol, aviation turbine fuel, natural gas and alcohol for human consumption under the goods and services tax for the levy of goods and services tax; (f) creation of a Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to theUnion and the States on parameters like rates, exemption list and threshold limits; (g) enab

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

olic Liquor for human consumption. 3. The Bill seeks to achieve the above objects. New Delhi; Pranab Mukherjee The 16th March, 2011. Presidents recommendation under article 117 of the Constitution of India [Copy of letter No. 31011/04/2009, dated 16-3-2011 from Shri Pranab Mukherjee, Minister of Finance to the Secretary-General, Lok Sabha] The President, having been informed of the subject matter of the proposed Bill, recommends, under clauses (1) and (3) of article 117, read with clause (4) of article 274, of the Constitution of India, the introduction of the Constitution (One Hundred and Fifteenth Amendment) Bill, 2011 in Lok Sabha and also the consideration of the Bill. FINANCIAL MEMORANDUM Clause 12 of the Bill seeks to insert new articles 279A relating to constitution of Goods and Services Tax Council and 279B relating to establishment of Goods and Services Tax Dispute Settlement Authority in the Constitution. The proposed new article 279A seeks to

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ervices Tax Dispute Settlement Authority will involve creation of some posts. Given that the introduction of goods and services tax will make the Indian trade and industry much more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expenditure on these bodies would be miniscule. It is not practicable to make an estimate of the expenditure, both recurring and nonrecurring on account of the above. However, such expenditure would be considerably marginal. MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 12 of the Bill seeks to insert a new article 279A relating to the constitution of a Council to be called the Goods and Services Tax Council and another article 279B establishing the Goods and Services Tax Disputes Settlement Authority. Clause (1) of the proposed new article 279A provides that the President shall, within sixty days from the date of the commencement of the Constitution (One Hundred and Fifteenth A

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 8-3-2011 – Association of Private Airport Operators has requested the Government to bring aviation fuel under the Goods and Services Tax (GST) and to double the duty free allowances for passengers coming from abroad. In the model of the GST which has been proposed by the Empowered Committee of State Finance Ministers, it has not been possible to bring aviation turbine fuel under the purview of the GST. Also, it has not been found feasible to accede to the request to double the duty free

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Service Tax – GST – By: – Pradeep Jain – Dated:- 1-3-2011 Last Replied Date:- 30-12-1899 – Prepared By: CA Pradeep Jain And Sukhvinder Kaur, LLB[FYIC] The introduction of Goods and Service Tax (GST) at both Central as well as State level is the dream of the Government despite their being stiff opposition from various states who do not want to loose the sources which generate revenue for them. The Finance Minister Mr. Pranab Mukherjee has announced in the Budget Speech given on 28th February 2011 that the Constitutional Amendment Bill will be introduced in the Parliament in this Session. The other steps proposed to be taken for introduction of GST by the Finance Minister are establishment of a strong IT infrastructure. It was also

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Act levying GST is in place. These steps are far fetched ideas which cannot materialize till the Amendment is carried out in the Constitution and the path for introducing GST is cleared of all anomalies. The Finance Minister has also announced in its budget speech that to tax services based on a small negative list for tapping untapped sectors are brought under tax net, would be very conducive for a nationwide GST. It was proposed to initiate an informed public debate on the subject to help finalise the approach to GST. But the hurdle is still the same that when the proposed GST bill is not there, how the debate will go on and on what basis. Until and unless the first step of Centre having power to make the law and the said law is made, th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 28-2-2011 – Finance Minister Shri Pranab Mukherjee has stressed on the importance of computerization of Commercial Taxes. While presenting the Union Budget 2011-12 in Lok Sabha he said that Mission Mode Projects for computerization of Commercial Taxes in States will allow States to align with the roll out of GST. Funds have been released for 31 such projects received from the States and Union Territories (UTs). Most of the States and UTs have already enabled the facility of dealers maki

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

New Service Tax Structure a Step Closure Towards Proposed GST – Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured – Dated:- 28-2-2011 – Hotel accommodation, in excess of declared tariff of ₹ 1000 per day and service provided by air conditioned restaurants that have license to serve liquor are the new services which have been brought under the service tax net. While proposing to levy service tax on these services, the Union Finance Minister, Shri Pranab Mukherjee has said that the hotel accommodation with declared tariff of over ₹ 1000 per day will have to pay the service tax with an abatement of 50 per cent. This will mean an effective burden of only 5 per cent of the amount charged. Air conditioned res

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

2011 (2) TMI 1270 – SUPREME COURT OF INDIA – [2011] 107 SCL 377 (SC), [2011] 163 COMP. CAS. 37 (SC), 2011 (11) SCC 524, 2011 (3) JT 66, 2011 (3) SCALE 33 – Maintainability of the suit – authorized signatory – authority letter – suit was filed by the respondent through Shri Ashok K. Shukla, who described himself as one of the directors of the company and claimed that he was authorised by Shri Raj K. Shukla, the chief executive officer of the company vide authority letter dated 2-1-2003, to sign, verify and file suit for recovery on behalf of the company. A copy of the authority letter allegedly signed by Shri Raj K. Shukla was also annexed with the plaint. In the written statement filed on behalf of the appellant, a preliminary objection was taken to the maintainability of the suit on the ground that Shri Ashok K. Shukla was not authorised by the company to file the suit and the authority letter given by Shri Raj K. Shukla was not sufficient to entitle him to do so. – CIVIL APPEAL NO.

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

also annexed with the plaint. In the written statement filed on behalf of the appellant, a preliminary objection was taken to the maintainability of the suit on the ground that Shri Ashok K. Shukla was not authorised by the company to file the suit and the authority letter given by Shri Raj K. Shukla was not sufficient to entitle him to do so. The respondent filed replication but did not plead that Shri Ashok K. Shukla was authorised by the company to file the suit. 5. On the pleadings of the parties, the trial court framed the following issues: (1) Whether the suit has been signed, verified and filed by a duly authorised person ? (2) What is the effect of not joining Shri Debashish Saraswati in the present suit ? (3) Whether any loss has been caused by the defendant to the plaintiff ? (4) Whether payments have been made by the defendant in due course and in good faith as alleged in paragraph 3 of the preliminary objections of the written statement if so its effect ? (5) Whether the pl

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nd he had been authorised by the company to file the suit. Learned senior counsel extensively referred to the pleadings of the parties including the rejoinder filed on behalf of the company before the trial court, evidence of Shri Ashok K. Shukla and argued that the suit could not have been decreed because no evidence was produced on behalf of the company to prove that Shri Ashok K. Shukla was authorised to file the suit. Shri Gupta pointed out that resolutions dated 14-2-2001 and 19-4-2001, passed by the board of directors of the company had bearing only on the issue of operating the bank account and not on the issue of filing the suit and the Division Bench of the High Court gravely erred in relying upon those resolutions and the authority letter issued by Shri Raj K. Shukla in favour of Shri Ashok K. Shukla. 9. We have considered the submissions of learned counsel and scrutinised the record. 10. In paragraph 1 of the suit filed on behalf of the company, it was pleaded that Shri Asho

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

inability of the suit on the ground that the plaint has not been signed, verified and filed by a competent and authorised representative on behalf of the company and that there is neither any valid board resolution nor any valid authorisation on behalf of the company nor a copy of the resolution has been filed along with the suit. It was also pleaded that the person who has instituted the suit on behalf of the company is not shown to be a power of attorney holder nor a copy of such power of attorney has been filed with the plaint and the authorisation letter purported to have been given by the so-called Chief Executive Officer is not a valid authorisation. 12. In the rejoinder filed on behalf of the company, it was reiterated that Shri Ashok K. Shukla, who has signed, verified and filed the plaint was authorised by Shri Raj K. Shukla vide authority letter dated 2-1-2003. 13. In his evidence, which was filed in the form of an affidavit, Shri Ashok K. Shukla claimed that he is one of the

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

present suit. Apart from this authority letter, the plaintiff-company has not filed on record any board resolution authorising Shri A.K. Shukla to sign, verify and institute the present suit. The plaintiff has also not filed on record its memorandum/articles to show that Shri Raj Kumar Shukla had been vested with the powers or had been given a general power of attorney on behalf of the company to sign, verify and institute the suit on behalf of the company. The present suit, therefore, has been filed merely on the strength of the authority letter exhibit PW1/A … 15. The trial court then referred to the judgment of the Delhi High Court in Nibro Ltd. v. National Insurance Co. Ltd. [1991] 70 Comp. Cas. 388 and Shubh Shanti Services Ltd. v. Manjula S. Agarwalla [2005] 125 Comp. Cas. 477 (SC), the Delhi High Court (Original Side) Rules, 1967 and proceeded to observe: … As already stated, it has not been averred in the plaint nor sought to be proved that any resolution had been passed by

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ntment of Shri Ashok K. Shukla as a director, but reversed the finding of the trial court on issue No. 1 on the basis of the authority letter issued by Shri Raj K. Shukla and resolutions dated 14-2-2001 and 19-4-2001, by which the board of directors of the company had authorised some persons to operate the bank account. 17. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a director of the company and a resolution was passed by the board of directors of the company to file suit against the appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the board of directors delegating its powers to Shri Raj K. Shukla to authorise another person to file suit on behalf of the company.

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

BUDGET 2011 SHOULD HAVE FINAL SAY ON GST – Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 9-2-2011 Last Replied Date:- 30-12-1899 – Once again we enter the budget month ,ie, February and we expect the Union Budget 2011 to be unveiled on 28 the February 2011 when country s Finance Minister shall be laying before the Parliament the Government s budgetary proposals and tax proposals- both direct and indirect. This year s budget assumes greater importance in the wake of ongoing high level of corruption and financial irregularities in almost every sphere of governance, thus putting tremendous pressure on the exchequer and fuelling bad money in the system. Also, the present governance and banking system has been unable to tame the evil of inflation causing hardship to one and all. Petrol prices and high rate home loans are only adding salt to the injury. However, economy has shown positive signs on various parameters. Thus, the top agenda for the Finance Minister would be t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

middot;Draw a final road map with timelines for both- DTC and GST atleast w.e.f. 1.4.2012. ·To revisit GST structure to be followed with fresh and open mind to restore confidence, remove various impediments faced and find solution to issues posed before the empowered committee. So far as GST is concerned, the seriousness of our Government , the democratic approach to introduce GDP and the deliberations at Empowered Committee – all have become a mockery. What is painful is that the people who do not understand much about GST and its implications are to decide on GST structure in the said empowered committee. The members therein, are primarily concerned about state s shares of revenue and nothing else, of course, least about the tax payer. It is high time that the Union Government should stop hoping for the consensus to emerge between the centre and different states on the GST roll out. Now what is legally permissible must be acted upon. It is once again advocated thatIndiamust f

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

percent (being Union tax). We also have a strong case for tax rate reduction owing to higher inflation and slow sectoral growth. The government should also work on a formula where in all the products and services are covered under the GST regime. The benefit of GST should be available to all players including those in liquour or tobacco industry and fuel / petroleum sector. The budget should also seek to integrate or blend the excise and service tax before we get GST. Though we already have common cenvat credit rules in place, there are disputes in relation to direct or indirect inputs and input services. To point out few grey areas where integration is needed, issues persist such as payment of excise duty at the time of clearance of goods from the factory but service tax being paid on receipt of value of service, separate registration and procedural compliance requirements, different treatment of export of services and export of goods and consequential relief or rebate. Not only this,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

F.No.V/DGST/30-MISC-45/2009/756 Dated:- 8-2-2011 Circular – Circulars – Service Tax – F.No.V/DGST/30-MISC-45/2009/756 DIRECTORATE GENERAL OF SERVICE TAX 9 th Floor, Piramal Chambers, Jijibhoy Lane, Parel, Lalbaug, Mumbai 400 012 Ph. No.24178515, 24102587 Dated: February 8, 2011 Sub: Practice being adopted by leading Hotel Chains to utilize Cenvat Credit beyond permissible limits reg. Please refer to this office letter of even number dated 27.04.09 whereunder copy of letter Dy. No.62/Comm. (ST)/2009 dated 27.03.2009 from the Commissioner (Service Tax), CBEC, New Delhi along with its enclosures, was forwarded to you for taking appropriate action and calling for the action taken report. In the said letter dated 27.03.2009, the Commissioner Service Tax, had informed this office about irregular availment of Cenvat Credit by leading hotel chains, as reported to him by the Chief Commissioner, Customs Central Excise, Chandigarh vide letter C.No. 06-Zone 14

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ave found similar issue prevailing in their jurisdiction and that they are taking the necessary action to protect the revenue. On perusal of these reports, it has been observed that the service provider, in most of the cases, is M/s Indian Hotel Corporation Ltd. (M/s IHCL), an assessee registered with Service Tax-I Commissionerate, Mumbai. However, there are others as well viz. M/s Apeejay Sunder Corp. Services, Kolkata, M/s Sarovar Hotels Pvt. Ltd., Mumbai, M/s Nirulas Comer House P. Ltd. etc. who also provide similar services to hotel chains and enable the service recipient to take full Cenvat credit by treating the services as 'Business Consultancy Services'. The field formations are of a uniform view that the services provided by M/s IHCL and other such service providers to the owners of hotels can not be considered to be 'Management Consultant Services' but such services are actually in the nature of Business Support Service or Business Auxiliary Service or Franchise Service, as t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

milar service providers would follow suit. Till then, action is required to be taken by the field formations to prevent / recover the inadmissible excess Cenvat Credit availed by the recipient of such services. It may not be out of place to mention here that the Commissioner, Chandigarh-I, who had originally taken up the issue, had, in the meantime, dropped the demand notice issued in this respect to M/s Taj GVK Hotels and Resorts (service recipient) by passing an Order-in-Original dt.20.09.2010 by holding, inter-alia, that 'the cause which has initiated the present proceedings was beyond the control of the noticee; the noticee can not be held responsible for the misclassification of taxable service at the bands of provider of such service; so the demand is not sustainable and it is even hit by time bar also apart from being not sustainable on merits' etc. However, it has now been reported by the Chief Commissioner's office, Chandigarh, vide their letter dated 16.12.2010 that the sub

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

r of output service taking such credit; thus it was the noticee who was required to ensure the description of service and as to what is the classification of input service to discharge this burden even if there was some misclassification at the service provider's end; the entire onus of correct availment was on the noticee'. Considering the issue in the backdrop of what is stated herein above, all the field formations are hereby requested to take appropriate action in the matter to protect the revenue. Commissioner, Service Tax-I, Mumbai would be expected to complete the ongoing investigation/ verification immediately and communicate the result thereof to this office at the earliest. Reports about the final outcome of the action taken may please be forwarded to this, office by all concerned. Yours faithfully, (Additional Director General) – Circular – Trade Notice – Public Notice – Instructions – Office orders Tax Management India – taxmanagementindia – taxmanagement

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

F No.V/DGST/88-GTA/01/2010/464 Dated:- 20-1-2011 Order-Instruction – Circulars – Service Tax – F No.V/DGST/88-GTA/01/2010/464 Directorate General of Service Tax 9th Floor, Piramal Chambers Jijibhai Lane, Lalbaug, Parel Mumbai-400012 Dated: January 20, 2011 Sub:- Inclusion of handling charges to Goods transport Agent in case of M/s. Food Corporation of India Reg. An instance of avoidance of payment of appropriate Service Tax amount has been reported by the Central Excise Commissionerate, Rohtak. Brief details in this regard are as follows. In respect of the transportation services provided by the contractors with regard to the transportation of the foodgrains stocks, M/s. Food Corporation of India (M/s. FCI)

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ing charges in the transport charges, wherever provided by the same contractor/agency, for determining the taxable value and accordingly discharged Service tax liability. As such, if loading/unloading charges are added into the transport charges, many bills may cross the exemption limit of Rs.750/-, on which no Service Tax has been paid by M/s. FCI. To summarise the above, M/s. FCI should have Included the handling charges to the transport charges, wherever provided by the same contractor/agency. They have evaded Service Tax by not including the value of handling charges to the transport charges and wrongly availed the slab exemption of Rs.750/- per consignment under Notification No. 34/2004-ST dated 03.12.2004. In this connection, at

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 14-1-2011 Last Replied Date:- 30-12-1899 – Now it has almost become clear that the Goods and Services may not meet its deadline of April 1,2011 due to lack of consensus among the States and the Centre. So, we have to wait more for the new tax regime which is expected to replace excise duty , service tax on the Centre's end and VAT on the States front, besides local levies ,cesses and surcharges. The Government failed to tabled the Constitution Amendment Bill in the monsoon session of the Parliament as the BJP-ruled states raised their voice against the revised draft of the Centre on the Constitution Amendment Bill. However, a recent statement by the Finance Ministry indicated t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of the State Finance Ministers because it proposed to give Veto Power to the Union Finance Minister on the State taxation issues. However, the revised draft from the Finance Ministry drops the main issue of giving Veto Power to the Union finance Minister and said that the Council could take a decision only when there is a Consensus. But the BJP-ruled States along with some of the allies of the UPA, have been opposing the revised draft of the Constitutional Amendment Bill on GST and asked for more time to study that and give their views on the various provisions in the GST Bill . Also, they wanted to know the clear meaning of the consensus and suggested changing the word with consent . In order to remove their concerns , the Finance Ministr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 14-12-2010 – Finance Minister Shri Pranab Mukherjee today inaugurated a two-day National Seminar on 'Goods and Services Tax : Transition Issues', organised by the Comptroller & Auditor General of India (CAG) to discuss the findings of the CAG on the preparedness for transition from sales tax to value added tax, the rationale for the tax reforms, IT related issues to GST as well as legal and operational issues relating to tax reforms. Text of speech of the CAG, Shri Vinod Rai at the Inaugural function of the National Seminar on 'Goods and Services Tax: Transition issues', is as follows: This seminar is being hosted as part of the celebrations associated with completion of 150 years of the institution of the Comptroller and Auditor General of India. The Hon'ble Finance Minister would recall that recently in his speech delivered on the occasion of the inaugural ceremony of the 150th anniversary celebrations he had mentioned that the C&AG's study re

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ion to Goods and Services Tax. That Report synthesized the findings of the performance audits conducted by 23 of our field offices where we reviewed the transitional process from the sales tax regime to the VAT system by evaluating whether the States had planned well for the transition, the administrative machinery had been appropriately geared to suit the requirements of the new tax regime, the legislative provisions were adequate and properly enforced, adequate and effective internal controls were in place and the new systems had stabilized and were functioning effectively after four-five years of introduction of VAT. The Report underlined the fact that certain fundamental issues which were required to be tackled prior to implementation of VAT were not addressed and their consequent fallout in the post-VAT scenario was discussed. We are of the opinion that the findings of that Report could serve as indicators towards some of the important areas which need to be examined and tackled b

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

on the macro picture, contributing to the process of governance through timely interventions. The aim of audit is not to criticize but to place the Executive in a comfort zone by acting as an aid to the decision making process. As revenue auditors, we look at systems and processes and point out lacunae in laws and rules which lead to leakage of revenue and suggest ways to plug this. The findings in our Reports have led to several amendments in various legislative enactments, both at the Centre and in the States. To cite an example, on the Direct Taxes side, the Government introduced six legislative amendments in the last five years to correct the anomalies pointed out by us, the latest being the amendment made in the Finance Act 2009 based on our Report on 'Assessments relating to infrastructure development (Deductions under section 80‐IA of the Income Tax Act)'. Deductions under section 80‐IA of the Act are based on profits, and the lack of clear directions for de

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s as professional auditors to be a part of the evolving process in order to be effective. Through this seminar, we intend to provide a platform where individuals who are actively associated with the process of determining the final shape of GST, engage in dialogue on critical parameters, share their views, experiences as well as concerns, reflect on the problems and throw light on what could be the possible way forward. We have amongst us distinguished representatives of the Union and State governments, scholars, academicians, chartered accountants and persons from trade and industry associations. We look forward to hearing their views on a gamut of issues ranging from the need for a constitutional amendment for introduction of GST, development of IT infrastructure, the possible architecture of rates, exemptions and thresholds and the administrative preparedness that would be required to effectively implement the new tax regime. Their rich experience would help those of us in the audit

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 14-12-2010 – FM Expects Inflation to come down to 6 per cent by March, 2011 Govt willing To Consider a Phased Approach for Introduction of GST: FM GST would Improve Tax Collections and Boost India's Economic Development: FM GST to Encourage Consumer Friendly Product Pricing to Benefit Aam-Admi: FM FM Inaugurates National Seminar on GST The Central Government, with a view to evolve a consensus, is willing to consider a phased approach for the introduction of GST, a step towards further consolidation of taxes on goods and services to achieve a genuine value added tax system at all levels in the country, stated the Union Finance Minister Shri Pranab Mukherjee, here today. In a departure from our earlier stand, as a transitory measure, we are also willing to accept a dual rate structure that could eventually lead to a model GST regime , he added. The Finance Minister was addressing the inaugural session of a two-day National Seminar on 'Goods and Services Tax : Transition

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

state of the art IT platform to make tax administration in the country more efficient. Speaking to the mediapersons on the sidelines of the Seminar Shri Mukherjee said that the inflation is expected to come down to 6 per cent by March, 2011. The text of Finance Minister's inaugural address at the Seminar is as follows: I am happy to be here at the inauguration of the Seminar on the Goods and Service Tax (GST). Let me start by congratulating the Comptroller and Auditor General of India for taking this timely initiative for bringing together the various stakeholders to deliberate on this issue when India's tax structure and its legal framework is being reviewed and is in the process of being finalized. I understand that the seminar seeks to focus on transition issues that would have to be addressed by tax administrators, both at the Centre and at the State levels, as they set out to implement the GST in due course. I am glad that this discussion is going to benefit from the part

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

extent- the compulsions for tax rate war among States and also moderated the cascading effect of taxes on commodities. More importantly, VAT was an effort at improving tax payer friendliness with greater faith being reposed in the tax payer. The implementation of VAT brought a steady increase in the revenues of the States. We are now hoping to take the next step by moving towards an economy-wide generalized system of goods and service taxes. From the current mixed system of taxation, both at the Centre and States, we are moving towards value added tax principle with input tax credit mechanism for taxation of goods and services. The proposed GST is a natural step towards further consolidation of taxes on goods and services to achieve a genuine value added tax system at all levels in the country. GST is likely to improve tax collections and boost India's economic development by integrating the Indian market through a uniform tax rate. As I have said earlier, it is a win-win situatio

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

dness on the administrative and legislative front before embarking on the implementation of tax proposals presently under consideration. One important issue brought out in the said study report is lack of required automation in commercial tax administration of State Governments. This is an issue that has been flagged for discussion in this seminar. The Central Government has recently launched a mission mode project for computerization of commercial tax administration of States and UTs. I am told that project proposals for 31 States have already been sanctioned with an overall cost of ₹ 975 crore. Around 70 per cent of the project cost is being borne by the Government of India. Some States like Maharashtra, Kerala, West Bengal and Rajasthan have been able to use these funds and successfully put in place modern IT systems as a part of their tax administration. These systems will support e-services like e-registration, e-payment, e-return filing, e-issue of 'C' forms and con

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

T has been prepared and sent to the Empowered Committee of State Finance Ministers for seeking the views of the States. The Empowered Committee is discussing the draft to arrive at a consensus on the issue. It is my earnest hope that there will be a convergence of views on this draft so that the required bill for making these amendments could be introduced in the Parliament at the earliest. Efforts are being made in parallel to prepare Central GST legislation and model State GST legislation. A model State GST Legislation, in sync with Central GST Legislation and common processes to be followed by the Central as well as the State Governments will help in strengthening an integrated national market. That in turn should provide a further impetus to the growth momentum of our economy. On our part, with a view to evolve a consensus we have revised our position to accommodate the concerns of the State Governments. The Central Government is willing to consider a phased approach for the introd

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Started By: – Santosh Kumar – Dated:- 9-12-2010 Last Replied Date:- 10-12-2010 – Whether Goods and Service Tax is on supply or on consumption? – Reply By Brijesh Verma – The Reply = According to the road-map and other drafts on the matter, it seems that GST would be a destination based consumption tax. – Reply By rishi mohan – The Reply = The goods and service tax (GST) is proposed to be a comprehensive study on indirect taxes which is levied on manufacture, sale and co

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Goods and Services Tax – Started By: – Nitin Jain – Dated:- 8-12-2010 Last Replied Date:- 9-12-2010 – PLS SOMEONE PROVIDE BRIEF ABOUT GST……. THANKS – Reply By Yash Matta – The Reply = Kindly Follow the link : http://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=1039 – Reply By rishi mohan – The Reply = The Goods and Services Tax (GST) is a value added tax (VAT) on the supply of goods or services. The introduction of goods and services tax shall replace taxes such as Centra

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Dated:- 7-12-2010 – Lucknow, Dec 7 (PTI) Fixing pre-conditions for enforcing Goods and Service Tax (GST) regime from 2011 in the state, the U.P government today sought an early settlement of its claim for ₹ 2,527.93 crore from the Centre for its roll out. Centre should abide by its promise and take decision about early settlement of the state's claim for ₹ 2,527.93 crore, if it was sincere and honest about its intention , state institutional finance minister Nakul Dubey said. Th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =