TMI Tax Updates - e-Newsletter
August 20, 2014
Case Laws in this Newsletter:
Articles
By: Dr. Sanjiv Agarwal
Summary: The article discusses various service tax exemptions introduced through notifications and amendments. A retrospective exemption was granted for services by authorized persons or sub-brokers related to forward contracts from September 2004 to June 2012. From February 2014, rice-related services, including transportation and milling, were exempted. Cord blood banks received exemptions for stem cell preservation services. The Finance Act, 2014, provided retrospective exemption for services by the Employees State Insurance Corporation until June 2012. Amendments effective July 2014 included exemptions for bio-medical waste treatment, specific educational services, and certain transportation services, while some exemptions were withdrawn or clarified.
By: Rishi Chanan
Summary: Customs Notification 102/2007 exempts a 4% Special Additional Customs Duty on goods imported for resale, aiming to equalize conditions between traders and manufacturers who avoid local taxes on direct imports. To qualify for a refund, importers must pay all duties at import, indicate no credit of the additional duty on sales invoices, and file a refund claim with supporting documents, including proof of duty payment, sales invoices, and tax payments. The refund claim must be submitted within one year. A checklist of required documents and further procedural guidance is available, and refunds may also apply to deemed sales.
News
Summary: The Reserve Bank of India announced the upcoming issuance of Rs. 1000 denomination banknotes featuring the Rs. symbol and an inset letter 'R' as part of the Mahatma Gandhi Series-2005. These notes will bear the signature of the then-Governor and the year 2014 on the reverse. The new design is consistent with previously issued Rs. 1000 notes in the same series. All previously issued Rs. 1000 banknotes will remain legal tender.
Summary: Indirect tax revenue collections in India increased by 3.9%, from Rs. 1,48,588 crore in April-July 2013 to Rs. 1,54,350 crore in the same period of 2014. Service tax collections saw a significant rise of 16.4%, growing from Rs. 43,693 crore to Rs. 50,850 crore. Customs revenue showed a marginal growth of 0.2%, while central excise collections increased by 7.5%. Overall, the growth in indirect tax revenue reflects a positive trend in the country's fiscal performance for the period April-July 2014 compared to the previous year.
Summary: The Reserve Bank of India announced the reference rates for major currencies on August 19, 2014. The US dollar was set at Rs. 60.7260, and the Euro at Rs. 81.0432. These rates showed a decrease from August 14, 2014, when the US dollar was Rs. 61.0583 and the Euro was Rs. 81.5552. Additionally, the exchange rates for the British Pound and Japanese Yen against the Rupee were 101.4792 and 59.19 respectively. The SDR-Rupee rate will be determined based on these reference rates.
Notifications
Companies Law
1.
F. No. 1 /32/2013-CL-V- Part - dated
14-8-2014
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Co. Law
Companies (Meetings of Board and its Powers) Second Amendment Rules, 2014.
Summary: The Companies (Meetings of Board and its Powers) Second Amendment Rules, 2014, issued by the Ministry of Corporate Affairs, amend certain provisions of the 2014 rules under the Companies Act, 2013. Key changes include the removal of the requirement for board meetings to be held in India, updates to financial statement considerations, and revised criteria for transactions requiring prior company approval. These transactions include significant contracts, property dealings, leasing, and service arrangements exceeding specified financial thresholds. Additional provisions address appointments to positions of profit and underwriting remuneration. The amendments clarify the application of transaction limits and stipulate disclosure requirements in general meeting notices.
Customs
2.
39/2014 - dated
14-8-2014
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ADD
Seeks to levy definitive anti-dumping duty on imports of Ceftriaxone Sodium Sterile originating in or exported from the People's Republic of China, for a period of five years.
Summary: The Government of India has imposed a definitive anti-dumping duty on imports of Ceftriaxone Sodium Sterile, originating from or exported by China, for a period of five years. This decision follows a review which concluded that continued dumping of the product is causing harm to the domestic industry and that such dumping could intensify if the duty is withdrawn. The duty is set at a rate of 21.85 USD per kilogram and applies to imports from China, regardless of whether they are directly exported from China or through other countries. The duty will be paid in Indian currency.
Highlights / Catch Notes
Income Tax
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Court Rules Franchise Fees for Domino's Trademark as Revenue Expenditure, Not Capital Investment.
Case-Laws - AT : Nature of franchise fees paid - capital or revenue expenditure - Right to use the trademark, domino’s name and logo – Exclusive license – Held as revenue expenditure - AT
Corporate Law
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Section 35: Protects Personal Name Use in Business Against Trademark Claims When Used in Good Faith.
Case-Laws - SC : Infringement of trademark - Section 35 of the Act permits anyone to do his business in his own name in a bona fide manner - SC
Service Tax
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Steel Plate Processing for Boiler Components Deemed Manufacturing, Exempt from Service Tax.
Case-Laws - AT : The nature of process involved is cutting, drilling, pressing, welding etc., as per the drawings of conversion of steel plates into partially finished and fully finished boiler components is prima facie manufacturing activity not taxable under service tax - AT
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Airtime and uplink income from broadcasting services deemed taxable based on initial assessments and case law.
Case-Laws - AT : Broadcasting service - allotment of airtime and uplink income - prima facie the activity was taxable - AT
Central Excise
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CESTAT Unable to Extend Stay for Central Excise Case; Assessee Not at Fault for Appeal Delay.
Case-Laws - AT : Waiver of pre-deposit - extension of operation of the stay order - The delay in disposal of this appeal is not therefore attributable to the assessee. no extension of stay could be granted by the CESTAT - AT
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Recipients Must Know Immediate Supplier for CENVAT Credit; No Need to Trace Supplier's Source.
Case-Laws - AT : CENVAT Credit - Recipient of the inputs is expected to know his immediate supplier and there is no further requirement to find out as to from where his supplier has procured the inputs - AT
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Appellants Penalized for Awareness of Stock Shortage in Violation of Central Excise Regulations.
Case-Laws - AT : Imposition of personal penalty - Shortage in stock - t present two appellants were aware of the clandestine activities of the company in which case penalties imposed upon them is called for - penalty confirmed - AT
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Interest Due on Delayed Payment of Differential Duty After Provisional Assessment Finalization Under Central Excise Laws.
Case-Laws - AT : Interest on the delayed payment of duty - interest on differential duty due to finalization of provisional assessment - prima facie interest is payable - AT
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Unjust Enrichment Principle Doesn't Apply to Discounts Given via Credit Notes for Vehicle Sales.
Case-Laws - AT : Refund - discount given to their customers on the sale of vehicles on account of clearance of old stocks/prompt payment - if discount is given by way of credit note, the bar of unjust enrichment is not applicable - AT
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Court Rules Against Extended Limitation Period for Misrepresentation in Central Excise Assessment Case.
Case-Laws - AT : Invocation of longer period of limitation against the appellants on the ground that they got the assessments finalised from the Central excise authorities by mis-representing the facts cannot be appreciated - AT
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Appellant Denied CENVAT Credit for Returned Goods Due to Insufficient Accounting and Unverified Reprocessing Claims.
Case-Laws - AT : CENVAT Credit - Since it is the claim of the appellant that these returned goods were reprocessed and cleared, the assumption that in the absence of a proper accountal of returned goods, the claim of reprocessing cannot be accepted - AT
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