Service Tax – Recent Changes

Service Tax – Recent Changes Posted: 31 Jul 2012 10:15 PM PDT Reverse charge mechanism- Usually service provider is liable to pay service tax for the services provided except for the few services covered under reverse charge, under which service receiver is liable to pay service tax. This mechanism has not been altogether a new mechanism. This mechanism was... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] e-filing of Return not compulsory for Agents of non-residents & Private discretionary trusts Posted: 31 Jul 2012 10:14 PM PDT (i) it will not be mandatory for agents of non-residents, within the meaning of section 160(1) (i) of the Income –tax Act, if his or its total income exceeds ten lakh rupees, to electronically furnish the return of income of non-residents for assessment year 2012-13; (ii) it will not be mandatory... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Claim for deduction, omitted in the return can be before appellate authorities Posted: 31 Jul 2012 10:13 PM PDT Very often the tax payer realises that he omitted to claim certain deductions, only long after he had filed the return. The circumstances would be such that the tax payer would not be even eligible to file a valid revised return. [[ This is a content summary only. Visit my website for full links, other content, and more! ]] S. 68 Once Assessee discharge initial burden of proving creditworthiness of parties onus shift on revenue to prove otherwise Posted: 31 Jul 2012 10:10 PM PDT The provisions of section 68 should be read in conjunction with section 106 of the Evidence Act. In the peculiar facts and circumstances of the case, the assessee has discharged the initial burden of proving identity, genuineness of transactions and also creditworthiness of the three creditors by... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Losses not claimed in original Return, cannot be claimed by filing revised return Posted: 31 Jul 2012 06:36 PM PDT Undisputedly, the assessee has filed original return under sub-section (1) of section 139. In the said return of income, the assessee has not claimed the loss. Sub-section (5) provides that where the assessee discovers any omission or a wrong statement, then he can file a revised return. Where the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] AAR is a court & its ruling should be first challenged before HC Posted: 31 Jul 2012 05:38 PM PDT AAR ruling should in the first instance be challenged before the High Court instead of directly in the Supreme Court. To avoid the matter remaining pending in the High Court for years, which would defeat the objective of enabling the applicant to get an expeditious ruling, the matter should be... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] S. 80P – Co-Operative Societies providing loan only to member eligible for deduction Posted: 31 Jul 2012 12:18 PM PDT The question arises is whether the assessee is entitled for the deduction under section 80P(2)(a)(i). Section 80P(2)(a)(i) is explicitly clear that if the co-operative society is engaged in the business of banking or providing credit facilities to its members the co-operative society is entitled... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Arbitration clause cannot bar HC to admit winding up petition Posted: 31 Jul 2012 11:50 AM PDT There is no conflict between the statutory relief of winding up and of the contractual right to have disputes settled by arbitration. Once a bona fide defence is shown to exist, arbitration will be the efficacious and proper remedy. Where, however, the defence is mala fide and a moonshine,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Payment for Comparing the material with the samples provided by assessee is not FTS Posted: 31 Jul 2012 11:47 AM PDT Basic question to be considered by us is whether the nature of services rendered by SEL fall within the ambit of technical, managerial and consultancy services as defined under Explanation 2 to clause (vii) of sub-sec (1) to sec. 9 of the IT Act. As per the said explanation, fees for technical... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Roads inside & within boundary wall of premises are part of factory buildings Posted: 31 Jul 2012 11:44 AM PDT In Hukamchand Mills Ltd. v. CIT [1978] 114 ITR 870 (Bom.), the roads laid out within factory premises were regarded as part of factory buildings and were entitled to depreciation. In the case of CIT v. Lucas TVS Ltd. [1977] 110 ITR 346 (Mad.), the word 'building' was held to include roads laid in... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Expenditure on studies of bona fide employee can't be disallowed merely because he was son of an ex-director Posted: 31 Jul 2012 11:39 AM PDT Shri Siddharth Chhajlani was a regular employee of the assessee Company since financial year 2003-04 and has taken note of the salary certificate along with the deduction and payment to Employee's Provident Fund. It has also been noted that Shri Siddharth Chhajlani was sent for higher studies in... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] India Signs Revised DTAA with Indonesia Posted: 31 Jul 2012 10:12 AM PDT The Government of the Republic of India signed a revised Double Taxation Avoidance Agreement (DTAA) with the Government of the Republic of Indonesia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 27th July, 2012 at Hyderabad House,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Re-Export of Goods Imported Under Concessional Rate – Enjoy Double Benefit & Do Not Pay Duty Posted: 31 Jul 2012 07:13 AM PDT A manufacturer can import capital goods under the provisions of IGCR. However, a situation may come where a manufacturer is required to re-export the imported capital goods may be "as such" or after using for some period. In such a case, a manufacturer needs to obtain permission from the Assistant... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Service tax on staff benefits and employment related transactions – Suggestions invited by TRU Posted: 31 Jul 2012 07:05 AM PDT TRU has issued a Draft Circular F. No 354/127/2012-TRU dated July 27, 2012 clarifying certain issues in relation to leviability of service tax on staff benefits and employee related transactions and trade, industry & field formations are requested to go through the draft Circular and offer... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Interest income taxable on accrual basis, though the same has become irrecoverable Posted: 30 Jul 2012 11:26 PM PDT It is no doubt true that the Tribunal as well as the Assessing Officer had recorded the fact that the assessee was following the mercantile system of accounting. Hence, the accrual theory of interest income was to be assessed in the year in which it had accrued and had become due. As already... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Judges do not make law, they only discover or find correct law Posted: 30 Jul 2012 11:19 PM PDT As is the settled legal position, in the light of Hon'ble Supreme Court's decision in the case of ACIT vs. Saurashtra Kutch Exchange Ltd. (305 ITR 227) , a judicial decision acts retrospectively. As Their Lordships observed in this case, judges do not make the law, they only discover or find the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Sending order at correct address by registered post is deemed to be duly served unless assessee proves otherwise Posted: 30 Jul 2012 11:06 PM PDT Thus according to judgment of Hon'ble High Court of Punjab & Haryana in Mohan Bottling Co (P.) Ltd.'s case (supra), it can safely be said that sending the order at correct address by registered post is a sufficient compliance of section 37-C of Central Excise Act, 1944 and it is for the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Tribunal cannot reject cross-objections without entering into factual matrix Posted: 30 Jul 2012 11:00 PM PDT We are of the opinion that the Tribunal could not have rejected the cross-objections without entering into the factual matrix and being satisfied itself that the appellant had not in fact filed cross-objections at the time when it could have originally when the appeals had been filed before the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ICAI President's Message – August 2012 Posted: 30 Jul 2012 10:57 PM PDT CA Final Results Declared: Results of the Chartered Accountants Final Examination held in May 2012 have been declared with 16.38% candidates as passed in Both Group category, whereas 25.32% and 29.62% candidates have been declared as passed in Group I and Group II categories respectively. I would... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] CBI arrest ITO & Advocate in a Bribery Case Posted: 30 Jul 2012 10:43 PM PDT The Central Bureau of Investigation has arrested an Income Tax Officer posted at Yamunanagar (Haryana) and an Advocate of Ladwa, Distt. Kurukshetra (Haryana) in a bribery case. [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Assessee entitled for input service credit on Traveling Service availed for business of manufacturing of final product Posted: 30 Jul 2012 10:37 PM PDT The appellants are in appeal along with a stay application directed against order-in-appeal No. PKS/224/BEL/2010 dated 23.07.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai III. The appeal is on the ground that input service credit has been denied to the appellants on the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Refund of service tax paid without collecting from client could not be denied on the ground of unjust enrichment Posted: 30 Jul 2012 10:30 PM PDT In this case the appellant have tried to ensure that the law is followed and is implemented properly. Therefore, as soon as the dispute arose in 2005-06, they made the payment under protest. Further, I also found from the Chartered Accountant's certificate that the certificate clearly says that the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Service tax Refund allowable on GTA Service for transportation of goods from place of removal to port of export Posted: 30 Jul 2012 10:26 PM PDT We find that the impugned exemption notification allowing refund of service tax paid in respect of exports has been issued with the sole objective of removing the burden of service tax from the export goods. It has been rightly contended by the ld. advocate that it is the avowed policy of the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] CESTAT waived Penalty for failure to pay service tax on reimbursement Posted: 30 Jul 2012 10:14 PM PDT So far as the penalties are concerned, we do appreciate that the learned Commissioner has considered waiver but the reasoning for the waiver is not acceptable to us. We make it clear that when there is a levy of tax, liveability of penalty depends on the facts and circumstances of each case. The... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Sub-contractor cannot be asked to prove correctness of certificate issued by original contractors Posted: 30 Jul 2012 10:01 PM PDT After hearing the learned SDR, we find that in page Nos. 238 to 245 the appellant had produced various certificates before the adjudicating authority from the original contractor. These certificates indicate that the original contractor has discharged the service tax liability on the part of the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] First Quarter Review of Monetary Policy 2012-13 Posted: 30 Jul 2012 10:01 PM PDT Since the Monetary Policy Statement for 2012-13 in April 2012, macroeconomic conditions have deteriorated. Much of the global economy is in a synchronised slowdown, having lost the upward momentum seen in the early months of the year. Despite the slowing global economy, the outlook for commodity... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] First Quarter Review of Monetary Policy 2012-13- Press Statement RBI Governor Posted: 30 Jul 2012 10:00 PM PDT This morning, we put out the First Quarter Review of Monetary Policy for 2012-13. Based on an assessment of the current macroeconomic situation, we have decided to keep the policy rate and the CRR unchanged. Accordingly, the repo rate stays at 8 per cent and the CRR at 4.75 per cent of net demand... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] EEFC A/c, Diamond Dollar A/c & Resident Foreign Currency Account – Review of Guidelines Posted: 30 Jul 2012 09:10 PM PDT It has now been decided to restore the erstwhile stipulation of allowing credit of 100% foreign exchange earnings to the EEFC account subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Interest Rates on Deposits held in FCNR (B) Accounts by Bank Staff Posted: 30 Jul 2012 09:06 PM PDT On a review, it has now been decided that RRBs should not allow the benefit of additional interest rate on any type of deposits of non-residents. Accordingly, the discretion given to RRBs to allow the benefit of additional interest rate of one per cent per annum as available to bank's own staff on... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Interest Rates on Rupee Deposits held in Domestic,NRO & NRE Accounts Posted: 30 Jul 2012 09:05 PM PDT On a review, it has now been decided that RRBs should not allow the benefit of additional interest rate on any type of deposits of non-residents. Accordingly, the discretion given to RRBs to allow the benefit of additional interest rate of one per cent per annum as available to bank's own staff on...