Monday, March 8, 2010

GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS ISSUE DATED 8.3.2010 Volume 1 Part 10

GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS

ISSUE DATED 8.3.2010

Volume 1 Part 10


SUPREME COURT


F Import of gold and silver with forged licences, period of limitation extended : Commissioner of Customs (Preventive) v. Aafloat Textiles (I) P. Ltd. and others . . . 453
F Even when motive behind false representation is not bad, if party making representation knows it to be false and injury ensues therefrom, it is fraud : Commissioner of Customs (Preventive) v. Aafloat Textiles (I) P. Ltd. and others . . . 453
F Denial of exemption claimed on components imported for repair of occean-vessela without disclosing sale of such imported parts, proper : Sanghvi Reconditioners P. Ltd. v. Union of India and others. . 467

HIGH COURT JUDGMENT

F Where plea of undue hardship not substantiated by material, order for pre-deposit for hearing of appeal justified : Mudhar Plywood P. Ltd. v. Union of India and others (P&H) . . . 423

F Clearance from wild life authorities in India not required for import of items not found in Wildlife Protection Act, 1972 : Union of India v. Entrack International Trading P. Ltd. (Delhi) . . . 428
F Where failure to include items in bills of entry by importer due to bona fide reasons, direction for return confiscated items on payment of duty : Union of India v. Entrack International Trading P. Ltd. (Delhi) . . . 428
F Where no material to show that various deposits adjusted towards duty and duty remained unpaid on date of filing of declaration under Kar Vivad Samadhan Scheme, rejection of application not justified : Arviva Industries (India) Ltd. v. Union of India and another (Bom) . . . 436
F Where service rendered to overseas customer not liable to tax and proof produced to show that no service tax collected from customer, assessee entitled to refund : Natraj and Venkat Associates v. Assistant Commissioner, Service Tax, Chennai II Division (Mad) . . 462
F Relevancy of statements made before Central Excise Officer under certain circumstances : Section 9D of Central Excise Act, 1944 not arbitrary or unconstitutional : J & K Cigarettes Ltd. and others v. Collector of Central Excise and others (Delhi) . . 482

CESTAT ORDERS

F Section 111(f) of Customs Act, 1962 applicable in case of omission to manifest tug : Vamsee Overseas Marine P. Ltd. v. Commissioner of Customs, Chennai . . . 420
F Photocopier main-frame not a photocopier, import permissible under Open General Licence : Phototech Enterprises v. Commissioner of Customs, Trichy . . . 442
F Where expert opinion misconceived and cannot be relied on, reduction of declared value proposed in show-cause notice by Commissioner not distrubed : Phototech Enterprises v. Commissioner of Customs, Trichy . . . 442
F Determination of annual production capacity of furnace : Invoice of modified capacity of furnace not a substitute for invoice of furnace issued by manufacturer at time of installation of furnace : VVS Concast Ltd. v. Commissioner of Central Excise, Kanpur . . 445


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Sunday, March 7, 2010

Fwd: ITAT has no power u/s 254 (2) to re-evaluate correctness on merits of earlier decision

---------- Forwarded message ----------
From: RAJAGOPALAN R. <rajag52@gmail.com>
Date: Sun, Mar 7, 2010 at 18:07
Subject: [itgoa] ITAT has no power u/s 254 (2) to re-evaluate correctness on merits of earlier decision

CIT vs. Earnest Exports (Bombay High Court)

The assessee claimed deduction u/s 80HHC which was allowed to the extent of Rs. 32.17 crs by the AO. The claim included DEPB license sale proceeds. The CIT revised the assessment u/s 263 on the ground that s. 28 (iiia) did not apply to a DEPB license and its proceeds were not eligible for deduction u/s 80HHC. The assessee filed an appeal before the Tribunal where it relied on the judgements in Pratibha Syntex Ltd vs. JCIT 81 ITD 118 and Pink Star vs. DCIT 27 ITD 137 to argue that the DEPB license would form part of the incentive and had to be considered for s. 80HHC deduction. However, the Tribunal held that these judgements were distinguishable and dismissed the appeal. The assessee thereafter filed a MA u/s 254(2) for rectification. The Tribunal allowed the application and recalled its order. The Tribunal further allowed the assessee's appeal and set aside the CIT's s. 263 revisional order. The Tribunal relied on Pratibha Syntex and Pink Star to hold that when the assessment order was passed, there was no dispute as to whether export incentives by way of a DEPB license wereeligible for deduction u/s 80HHC. The department filed an appeal where it argued that the Tribunal's MA order was a review of the earlier order and that it had no jurisdiction to do so u/s 254 (2). HELD allowing the appeal:

(i) S. 254(2) empowers the Tribunal to rectify a mistake apparent from the record. In Honda Siel Power Products 295 ITR 466 (SC) it was held that s. 254(2) is based on the fundamental principle that a party appearing before the Tribunal should not suffer on account of a mistake committed by the Tribunal. It was held that the Tribunal would be regarded as having committed a mistake in not considering the material which is already on record;

(ii) However, in the present case the Tribunal in the original order specifically dealt with the decisions in Pratibha Syntex and Pink Star and held them to be distinguishable. However, in the s. 254(2) order, the Tribunal virtually reconsidered the entire matter and came to the conclusion that in view of Pratibha Syntex and Pink Star a DEPB license was eligible for deduction u/s 80HHC. This amounted to a re-appreciation of the correctness of the earlier decision on merits. This was impermissible. Re-evaluating the correctness on merits of an earlier decision lies beyond the scope of the power conferred u/s 254(2).

(iii) The power u/s 254(2) is confined to a rectification of a mistake apparent on record. S. 254(2) is not a carte blanche for the Tribunal to change its own view by substituting a view which it believes should have been taken in the first instance. S. 254(2) is not a mandate to unsettle decisions taken after due reflection. It is not an avenue to revive a proceeding by recourse to a disingenuous argument nor does it contemplate a fresh look at a decision recorded on merits, however appealing an alternate view may seem. Unless a sense of restraint is observed, judicial discipline would be the casualty. That is not what Parliament envisaged.

Note: In Chem Amit 272 ITR 397 (Bom) and Visvas Promoters 30 DTR (Mad) 65 it was held that an appeal u/s 260A cannot be filed against an order u/s 254 (2). However, this principle may not apply where the s. 254 (2) order also deals with the appeal. For the merits whether DEPB license profits are eligible u/s 80HHC see Topman Exports 318 ITR 87 (Mum) (SB).


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Thursday, March 4, 2010

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS ISSUE DATED 8-3-2010 Volume 2 : Part 1

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS



ISSUE DATED 8-3-2010

Volume 2 : Part 1



REPORTS
STATUTES
JOURNAL
NEWS BRIEFS



REPORTS


F Business expenditure : Deduction under section 36(1)(viia) to be computed at the rate of 5 % of total income before making any deduction under section 36(1)(viia) and Chap. VI-A : Tourism Finance Corp. of India Ltd. v. Jt. CIT (Delhi) p.1
F Receipts on account of dividends and profits on sale of investment are not income from long-term finance : Not allowable : Tourism Finance Corp. of India Ltd. v. Jt. CIT (Delhi) p.1
F Bad debts : Deduction to be allowed after reducing credit balance : Tourism Finance Corp. of India Ltd. v. Jt. CIT (Delhi) p.1
F Collection of corpus donations essential for pursuing charitable activities, delay to be condoned and registration to be granted from date of inception : Kadayanallur Cholia Brahmana Mahajana Trust v. ITO (Chennai) p.14
F Payments made by assessee under SEBI Regularisation Scheme, 2002, cannot for purpose of disallowance under Expln. be treated as penalty under section 37 : Kaira Can Co. Ltd. v. DCIT (Mumbai) p. 20
F Expenses incurred for utilising services of sister concern for all its operational activities not shown as excessive : Allowable : Asst. CIT v. KIN Ship Services (I) P. Ltd. (Coch) p. 29
F Payments made to non-resident companies towards charter hire charges for transporting merchandise from foreign port to another foreign port, allowable : Asst. CIT v. KIN Ship Services (I) P. Ltd. (Coch) p. 29
F Expenses on speed money paid to dock labour, inherent to nature of business carried on by assessee, allowable under section 37 : Asst. CIT v. KIN Ship Services (I) P. Ltd. (Coch) p. 29
F Where element of proft not involved, TDS not required : Cairn Energy India Pty. Ltd. v. Asst. CIT (Chennai) p. 38
F Section 40(a)(i) could not be invoked where the income to be computed under section 42, assessee entitled to deduction in respect of payment made to its parent company : Cairn Energy India Pty. Ltd. v. Asst. CIT (Chennai) p. 38
F Where entire amount declared by assessee as income, addition as capitation fees not justified : SSRD Somany Sikshan Sansthan v. Asst. CIT (Delhi) p. 55
F Commissioner (Appeals) deleting addition based on statement of eleven employees stating receipt of full salary as debited by assessee in its books, proper : SSRD Somany Sikshan Sansthan v. Asst. CIT (Delhi) p. 55
F Losses of unit of assessee not eligible under section 10A not to be set off against profits of eligible undertaking : Scientific Atlanta India Technology P. Ltd. v. Asst. CIT (Chennai) [SB] p.66


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INCOME TAX REPORTS (ITR) HIGHLIGHTS ISSUE DATED 8-3-2010 Volume 321 : Part 3

INCOME TAX REPORTS (ITR) HIGHLIGHTS



ISSUE DATED 8-3-2010

Volume 321 : Part 3



SUPREME COURT
HIGH COURTS
ENGLISH CASES
AAR
TRIBUNAL
STATUTES
JOURNAL
NEWS BRIEF



SUPREME COURT JUDGMENTS


F Whether depreciation should be allowed as under IT Rules for purpose of computing MAT u/s115J : Matter remanded to Larger Bench : Dynamic Orthopedics P. Ltd. v. CIT p. 300

F Service of notice on the assessee u/s 143(2) within prescribed period of time is a pre-requisite for framing block assessment under Chapter XIV-B : Asst. CIT v. Hotel Blue Moon p. 362

F Bonds and debentures bought by assessee are by way of investment : Interest on such investments not liable to interest-tax : CIT v. Sahara India Savings and Investment Corporation Ltd. p. 371



HIGH COURT JUDGMENTS


F Tribunal finding loss on account of transactions in shares was business loss, is a finding of fact : CIT v. SMC Credit Ltd. (Delhi) p. 194

F Interest u/s 234B can be levied against assessee as the computation of income in terms of s 115JA : CIT v. Brindavan Beverages Ltd. (Karn) p. 197

F Collector has no jurisdiction to deduct tax at source on compensation for agricultural land : Risal Singh v. Union of India (P&H) p. 251

F Amount shown in document discovered during search assessable as unexplained investment where presumption of truth of document not rebutted by assessee : Surendra M. Khandhar v. Asst. CIT (Bom) p. 254

F Provision for estimated costs of rendering warranty services allowable expenditure : CIT v. Hinditron Services P. Ltd. (Bom) p. 263

F Petitioner not entitled to complain that transfer pricing order passed without personal hearing where it filing written objections but not availing of opportunity of personal hearing : Intimate Fashions (India) P. Ltd. v. Joint CIT, TPO (Mad) p. 265

F Refusal to condone delay valid where Tribunal finding there was no satisfactory explanation for delay : Bindra Contractors v. Union of India (P&H) p. 269

F Irregularity in procedure not relevant in block assessment : Smt. Sharmishtha Sinha v. CIT (Patna) p. 271

F Authority to consider application for certificate of no deduction of tax at source for year in question in accordance with law : Infrastructure Development Authority v. CIT (TDS) (Patna) p. 278

F Sentence reduced in view of trial for a long period : Parveen Kumar v. ITO (P&H) p. 282

F Intimation by bank for attachment of property does not give cause of action for writ petition : Subashree v. Canara Bank (Mad) p. 285

F Amount received on account of refund of excise duty to be treated as taxable income : CIT v. Aggarwal Steel Rolling Mills (P&H) p. 290

F CBDT to give reasons on consideration of materials available before it : Precot Mills Ltd. v. CBDT (Mad) p. 293

F S 164 not applicable where beneficiaries known and their shares determinate : CIT v. P. Sekar Trust (Mad) p. 305

F Ruling of AAR not binding on Tribunal : CIT v. P. Sekar Trust (Mad) p. 305

F Trust not assessable u/s 164 where shares to be allotted to beneficiaries determinate under trust deed and beneficiaries known : CIT v. Manilal Bapalal Family Benefit Trust (Appex) (Mad) p. 322

F Loan given by employer at rate of interest lower than SBI lending rate : Valuation of concession u/r 3 at difference between SBI lending rate and rate paid by employee valid : All India Punjab National Bank Officer's Association v. Chairman-cum-Managing Director, Punjab National Bank (MP) p. 324

F Tax liability consequent on settlement with Commissioner in previous year deductible : CWT v. Manna Lal Surana (Raj) p. 335

F Tribunal remanding matter to AAC to decide appeal afresh after hearing all Lrs of deceased : Question whether an order can be passed without providing opportunity of hearing to Lrs academic : Smt. Kesar Devi v. CIT (No. 1) (Raj) p. 341

F Notice issued to Lrs after Tribunal deciding appeal for AY 1972-73 by order dated December 17, 1986 beyond time : Smt. Kesar Devi v. CIT (No. 2) (Raj) p. 344

F Information that assessee had shifted her residence and consequent service by speed post : Presumption that notice had been served : Mayawati v. CIT (Delhi) p. 349

F Notice for reassessment can be questioned only on ground of want of jurisdiction : Revathi C P Equipment Ltd. v. Deputy CIT (Mad) p. 384



AUTHORITY FOR ADVANCE RULINGS


F No capital gains for reorganisation plan : Dana Corporation, In re p. 178



NEWS-BRIEF


F Reforms process in tax administration taken forward

The General Budget 2010-11 has carried forward the process of reforms in tax administration in the country. The citizen-centric initiative "Sevottam" which was launched as a pilot project at Pune, Kochi and Chandigarh, will be extended to four more cities this year. The centralized processing centre at Bengaluru is now fully functional and processing around 20, 000 tax returns daily. This initiative aimed at reducing the physical interface between the taxpayers and the tax administration and to speed up procedures and processes, will be taken forward by setting up two more centers during the year.

The Income-tax Department is now ready to notify SARAL-II form for individual salaried taxpayers for the coming assessment year.

The proposals related to indirect taxes are focused to achieve a further degree of fiscal consolidation without impairing the recovery process and moving forward on the road to GST. Project ACES-Automation of Central Excise and Service Tax, has been rolled out in the country. This will impart greater transparency in tax administration and improve the delivery of taxpayer services. Budget proposes to expand the scope of Settlement Commission in respect of Central Excise and Customs so that certain category of cases that hitherto fell outside its jurisdiction may be admitted. [Source : www.pib.nic.in dated February 26, 2010]

F High Courts get powers to condone late income-tax appeals

According to the amendment, brought in the Finance Bill which has empowered the Income-tax (I-T) Department to file appeals, nullifying an earlier ruling by the Supreme Court, the High Courts now have powers to condone delays in filing appeals as per section 260A of the Income-tax Act. The amendment will be effected retrospectively from October 1998.

The amendment follows I-T Department's application to the Supreme Court challenging the Bombay High Court's ruling last year which rejected over 700 appeals.

The I-T Rules stipulate that the appeals could be filed with High Courts 120 days after receiving the order of Income-tax Appellate Tribunal (ITAT). For such appeals, I-T Department approaches the Commissioner of Income-Tax (Appeals), followed by ITAT. Interestingly, although the Bombay High Court had declined condoning the delays, the Delhi High Court had condoned 30 such applications. [Source : www.economictimes.com dated March 1, 2010]

F Income-tax Department alerts taxpayers not to throw caution away on sharing financial details on internet

The Income-tax Department has alerted taxpayers against sharing personal financial information like PAN card number and credit card details on the internet in the wake of a spurt in fake e-mails being sent to people. Concerned over fictitious and unauthorised e-mails landing in personal internet addresses of many people, the Department has issued an "alert message".

"Information has been received from several quarters that people are receiving electronic mails informing them of their income-tax refunds and seeking their credit card details. It is clarified that the Department does not send e-mails regarding refunds and does not seek any information regarding credit cards of taxpayers. Taxpayers are therefore cautioned that they should not respond to such mails and if they do so it would be at their risk and responsibility," the department's "alert" message said. These are some of the e-mail IDs which have been found to be fake. Unauthorised e-mail addresses could be more than the reported ones and hence taxpayers should avoid them. The IT Department mail is only to be read to keep oneself updated but not to be replied to, the official said.

"Income-tax Department does not send e-mails regarding refunds and does not seek any taxpayer information like user name, password, details of ATM, bank accounts, credit cards, etc. Taxpayers are advised not to part with such information on the basis of e-mails," the department has said at the end of its e-mails.

In case of genuine IT e-mails, they have been appended with a note saying "this is a computer generated mail and calls for no signature," the official said. The Department has also advised taxpayers to keep their user ID and password secure, not share them with any other entity and suggested that the password be changed periodically when checking tax credit statements online. [Source : www.economictimes.com dated March 1, 2010]

F Finance Minister promises revised DTC draft to India Inc.

The Government has assured India Inc. that it would come out with a revised direct taxes code (DTC) draft and seek their comments before finalising it.

The Government, the Finance Minister said, will consider suggestion of the industry to raise savings limit for personal income tax payers next year. Currently, individuals can seek tax exemption on savings up to Rs. 1 lakh in a year, in addition to Rs. 20,000 in infrastructure bonds.

The Government had come out with the draft DTC which will replace the Income-tax Act of 1961 last August and had sought comments from various stakeholders. The industry had expressed concerns over the provisions of the DTC, including the new method for computing minimum alternate tax (MAT).

The Government may introduce the bill during the Monsoon session, the Finance Minister said, adding thereafter it would go to the standing committee for further scrutiny. Once the report is received from the standing committee, hopefully by the end of the Winter session, he said, the law would be placed before Parliament for final approval.

Besides MAT, concerns have also been raised about the DTC provisions relating to taxation of savings and exemption for housing loans.

The DTC proposed that MAT should be levied on gross assets of a company rather than on book profit as is the current practice. Describing the proposal as retrograde, the chambers said the proposal amounting to imposing wealth tax on productive assets.

As regards savings, the DTC proposed to introduce the EET (exempt exempt tax) model which means all savings be taxed at the time of withdrawal by subscriber. Currently, savings schemes like public provident fund are not taxed at any stage.

The DTC is silent on tax exemption on repayment of home loans. Currently, the repayments up to prescribed limit enjoy tax exemption. [Source : www.economictimes.com dated February 28, 2010]

F Apex court to reconsider own judgement in "zero tax" cases

A Division Bench of the Supreme Court (SC) felt its earlier ruling in an income-tax case was wrong and referred the question, involving "zero tax" companies which make profits, to a larger bench of three or more judges.

The Assessing Officer recomputed the book profit after allowing depreciation according to Schedule XIV of the Companies Act, which was lower under the Income-tax Rules. This raised a dispute in which the Commissioner of Income-tax (Appeals), the Appellate Tribunal and the Kerala High Court took different views.

The High Court allowed the appeal filed by the Department holding that the Assessing Officer was right in re-computing the book profit for the purpose of section 115J of the Income-tax Act after allowing depreciation as per Schedule XIV to the Companies Act and not as per the rates specified in Rule 5 of the Income-tax Rules, as claimed by the assessee. The Supreme Court stated its earlier ruling on this question required reconsideration. [Source : www.businessstandard.com dated February 22, 2010]


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Wednesday, March 3, 2010

Fwd: DEDUCTIONS & EXEMPTIONS- CERTAIN DECISIONS IN FAVOUR OF DEPT



---------- Forwarded message ----------
From: RAJAGOPALAN R. <rajag52@gmail.com>
Date: Wed, Mar 3, 2010 at 8:03 AM
Subject: DEDUCTIONS & EXEMPTIONS- CERTAIN DECISIONS IN FAVOUR OF DEPT
To: Case laws <itgoa@yahoogroups.com>


Dear Comrade,
Attaching certain decisions on deductions & exemptions, which u may find useful.
Needless to say, the full text of the judgment may be gone thro' before finally applying the decision.
With Greetings,
R.Rajagopalan
3-3-2010

Tuesday, March 2, 2010

CONSOLIDATED COMMERCIAL DIGEST (CCD) HIGHLIGHTS ISSUE DATED 1.3.2010 Volume 25 Part 5

CONSOLIDATED COMMERCIAL DIGEST (CCD) HIGHLIGHTS

ISSUE DATED 1.3.2010 Volume 25 Part 5 

Highlights of Finance Bill, 2010

STATUTES



Direct taxes

Rates of income-tax for assessment year 2011-12
F individuals, HUFs, AOPs and BOIs: up to Rs. 1,60,000 (Rs. 1,90,000 for women residents and Rs. 2,40,000 for senior citizens), nil; Rs. 1,60,001 to Rs. 5,00,000, 10 per cent.; Rs. 5,00,001 to Rs. 8,00,000, 20 per cent.; and above Rs. 8,00,000, 30 per cent.
F no change in rate of tax for firms, co-operative societies, local authorities and companies; surcharge on domestic companies reduced to 7.5%
Charitable purpose
F "the advancement of any other object of general public utility" remains "charitable purpose" if total receipts from activity in nature of trade, commerce or business, etc. do not exceed Rs. 10 lakhs in previous year: section 2(15): with retrospective effect from April 1, 2009
Registration of trusts
F Commissioner can cancel registration granted under section 12A: section 12AA: June 1, 2010
Weighted deduction for scientific research and development
F for expenditure on approved in-house research and development facility, increased from 150% to 200%: section 35(2AB)
F for payment to approved scientific research association or approved university, college or other institution and payment to a National Laboratory or a university or an Indian Institute of Technology, increased from 125% to 175%: section 35(1)(ii), (2AA): April 1, 2011
Weighted deduction on payments to associations engaged in research in social science or statistical research
F approved association undertaking research in social science or statistical research included: sections 10(21), (23C), 35(1)(ii), (iii), 80GGA: April 1, 2011
Investment-linked deduction for specified business
F business of building and operating a new hotel of two-star or above category, anywhere in India included: section 35AD: April 1, 2011
Deduction for subscription to long-term infrastructure bonds
F subscription to long-term infrastructure bonds notified by Central Government up to Rs. 20,000 deductible for individuals and HUFs in addition to existing limit of Rs. 1 lakh for tax saving investments: new section 80CCF: April 1, 2011
Deduction of contribution to Central Government Health Scheme
F contribution made to CGHS deductible: section 80D: April 1, 2011
Developing and building housing projects
F period for completion of project increased from 4 years to 5 years; built-up area of shops and commercial establishments in housing project to be three per cent. of aggregate built-up area of the housing project or 5,000 sq. ft., whichever is higher: 80-IB(10): April 1, 2010
Deduction of profits of hotel or convention centre in National Capital Territory
F date by which hotel has to start functioning or convention centre to be constructed extended from March 31, 2010 to July 31, 2010: 80-ID: April 1, 2011
Limit of turnover or gross receipts for compulsory audit of accounts and presumptive taxation
F threshold limit for compulsory audit of accounts from Rs. forty lakh to Rs. sixty lakh for business and from Rs. ten lakh to Rs. fifteen lakh for persons carrying on profession; maximum penalty for failure to get accounts audited or to furnish audit report increased from Rs. one lakh rupees to Rs. one lakh fifty thousand: sections 44AB, 271B: April 1, 2011
F threshold limit of total turnover or gross receipts for presumptive taxation increased from Rs. forty lakh to Rs. sixty lakh: section 44AD: April 1, 2011
Non-resident providing services or facilities in connection with prospecting for, or extraction or production of, mineral oil
F section 44BB not to apply to income covered under section 44DA: sections 44BB(1), 44DA, 115A: April 1, 2011
Non-resident
F income deemed to accrue or arise in India under section 9(1)(v) or (vi) or (vii) whether or not non-resident has a residence or place of business or business connection in India or non-resident has rendered services in India: section 9, Expln.: June 1, 1976
Conversion of company into limited liability partnership
F transfer of assets on conversion of company into LLP not transfer for purposes of capital gains tax subject to conditions; cost of acquisition for LLP to be cost for which company acquired asset: sections 47, 47A, 49: April 1, 2011
F depreciation allowable to company and LLP not to exceed depreciation calculated as if conversion had not taken place; actual cost of block of assets of LLP to be written-down value of block of assets of predecessor company on date of conversion: sections 32, 43(6): April 1, 2011
F carry forward and set-off of business loss and unabsorbed depreciation to the successor LLP which fulfills conditions: section 72A: April 1, 2011
F no tax credit under section 115JAA allowable to successor LLP: sections 115JAA: April 1, 2011
Transactions without consideration or for inadequate consideration
F transactions in shares of private company for inadequate consideration or without consideration where recipient is firm or private company included: transactions for business re-organization, amalgamation and demerger excluded: section 56(2)(vii): June 1, 2010
F value of such shares included in definition of income: section 2(24): June 1, 2010
F stock-in-trade, raw material and consumable stores of business of recipient excluded: section 56(2)(vii): October 1, 2009
F receipt of immovable property for inadequate consideration excluded: section 56(2)(vii): October 1, 2009
F transactions in bullion included: section 56(2)(vii): June 1, 2010
F reference to Valuation Officer for estimate of value of property received without consideration or for inadequate consideration: section 142A(1): July 1, 2010
Minimum Alternate Tax
F rate increased to eighteen per cent from fifteen per cent: section 115JB : April 1, 2011
Disallowance of expenditure for failure to deduction tax at source
F no disallowance if after deduction in previous year, it is paid on or before due date of filing return under section 139(1): section 40(a)(ia): April 1, 2010
F rate of interest for non-payment of tax after deduction increased from 1% to 1½% per month: section 201(1A): July 1, 2010
Deduction of tax at source
F threshold limit of payments for deduction of tax at source raised: sections 194B (winnings from lottery or crossword puzzle from Rs. 5,000 to Rs. 10,000), 194BB (winnings from horse race from Rs. 2,500 to Rs. 5,000), 194C (payment to contractors from Rs. 20,000 30,000 for single transactions and 50,000 to Rs. 75,000 for aggregate of transactions in a year), 194D (insurance commission from Rs. 5,000 to Rs. 20,000), 194H (commission or brokerage from Rs. 2,500 to 5,000), 194-I (rent from Rs. 1,20,000 to Rs. 1,80,000) and 194J (fees for professional or technical services from Rs. 20,000 to Rs. 30,000): July 1, 2010
Certificate of tax deduction and tax collection at source
F deductor/collector to continue to furnish TDS/TCS certificates to the deductee/collectee after April 1, 2010: sections 203(3), 206C(5): April 1, 2010
Settlement of cases
F proceedings as result of requisition of books of account or documents or assets included: additional amount of income-tax payable on income disclosed in application should exceed Rs. fifty lakh: time for completion of proceedings: sections 245A(b), 245C, 245D(4A) (sections 22A, 22D, Wealth-tax Act, 1957): June 1, 2010
Power of High Court to condone delay in filing appeals and reference applications
F High Court may admit appeal or application for reference after expiry of period specified, for sufficient cause shown: section 260A(2) (section 27A, Wealth-tax Act, 1957): October 1, 1998; section 256(2A) (section 27, Wealth-tax Act, 1957): June 1, 1981
Document Identification Number
F required to be issued on or after July 1, 2011: section 282B: October 1, 2010

Indirect taxes

Customs and Central Excise
F Articles of bedding made of quilt: Exemption from excise duty on articles of bedding made of quilt
F Automation of State commercial taxes: Mission Mode Project approved for computerisation of Commercial Taxes in States with an outlay of Rs. 1,133 crores of which the Centre's share is Rs. 800 crores; this will lay foundation for launch of goods and service tax
F Expanded scope of Settlement Commission: Settlement Commission will now cater to certain categories of cases that hitherto fell outside its jurisdiction
F Central excise duty on all non-petroleum products raised to 10% ad valorem; Portland cement and cement clinker raised proportionately
F Ad valorem component of excise duty on large cars, multi-utility vehicles and sports-utility vehicles increased to 22%
F Excise duty on automobile fuels raised: Basic duty of 5% on crude petroleum, 7.5% on diesel and petrol and 10% on other refined products restored. Central excise duty on petrol and diesel enhanced by Re. 1 per litre each
F Higher excise duty on tobacco products: Excise duty on all non-smoking tobacco such as scented tobacco, snuff, chewing tobacco, etc. to be enhanced. Compounded levy scheme to be made available for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch-packing machines
Agriculture
Concessional import duty
F Setting up of mechanised handling systems and pallet racking systems in mandis or warehouses meant for foodgrains and sugar accorded lower import duty of 5%
F Project import status at concessional customs duty of 5 per cent with full service tax exemption provided to the following for initial setting up and expansion:
F cold storage, cold room including farm pre-coolers for preservation or storage of agriculture and related sectors produce; and
F processing units for such produce
F provide full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks
F Central excise exemption extended to equipment meant for preservation, storage and processing of agriculture
F Full exemption from excise duty for trailers and semi-trailers used in agriculture
F Small-scale manufacturers permitted to take full credit of Central excise duty paid on capital goods in single instalment in year of their receipt and can pay Central cxcise duty on quarterly, rather than monthly, basis
Environment
F Clean energy cess to be levied on coal produced in India as well as on imported coal to create the corpus of the National Clean Energy Fund
F Concessional customs duty of 5% and Central Excise duty exemption extended to machinery, instruments, equipment and appliances etc. required for initial setting up of photovoltaic and solar/thermal power-generating units.
F LED lights accorded lower duty: Central excise duty on LED lights reduced from 8% to 4% at par with Compact Fluorescent Lamps (CFLs).
F Sop for automobiles: Nominal duty of 4% to be imposed on electric cars and vehicles to neutralise duty paid on the inputs and components used in such vehicles. Moreover, some critical parts of such vehicles; exempted from basic customs duty and special additional duty subject to actual-user condition.
F Import of compostable polymer exempted from basic customs duty.
Infrastructure
F Project import status granted to 'Monorail projects for urban transport' at a concessional basic duty of 5%
F Mobile phone: Exemptions from basic, CVD and special additional duties extended to parts of battery chargers and hands-free headphones; exemption from special additional duty extended till March 31, 2011
F Watches and readymade garments also made exempt
Medical sector
F Uniform, concessional basic duty of 5%, CVD of 4% with full exemption from special additional duty prescribed on all medical equipments
F Certain inputs used in the manufacture of orthopaedic implants exempted from import duty
Infotainment
F Customs duty to be charged only on value of carrier medium of cinematographic film, whether electronic or film and music and gaming software imported for duplication
Rates on precious metals:


Metals
Customs Duty
Gold and platinum
Rs. 200 per 10 grams to Rs. 300 per 10 grams
Silver
Rs. 1,000 per kg to Rs. 1,500 per kg.
Rhodium
10% to 8%
Gold ore and concentrates
Rs. 140 per 10 grams of gold content with full SAD exemption.
Refined gold made from such ore or concentrate
Rs. 280 per 10 grams.
Other proposals
F No import duty on specified inputs or raw materials required for the manufacture of sports goods.
F Basic customs duty on magnetrons used in production of micro-wave ovens, reduced from 10 per cent to 5%
F Value limit on duty-free import of commercial samples as personal baggage enhanced to Rs. 3 lakh per annum.
F No penalty if excise duty and interest paid before issue of show-cause notice in cases which do not involve fraud, etc.
F Electrical energy supplied from SEZ to DTA and non-processing areas of DTA would attract duty of 16% with retrospective effect from 26.6.2009.
Other items


Items
Central Excise duty lowered
Goods imported in a pre-packaged form for retail sale (includes mobile phones, watches and ready-made garments not imported in pre-packaged form)
Outright exemption from SAD
Replaceable kits for household-type water filters other than those based on RO technology
4%
Corrugated boxes and cartons
4%
Latex rubber thread
4%
Goods covered under the Medicinal and Toilet Preparations Act
10%
Solar cycle-rickshaws (soleckshaw)
4%
Balloons
Exempted

Service Tax

New services to be included
F permitting commercial use or exploitation of any event organized by a person or organization
F copyright on cinematographic films and sound recording
F health services, namely, health check up for the employees of business entities; health services health insurance schemes offered by insurance companies where payment made directly by business entity or insurance company to hospital or medical establishment
F maintenance of medical records of employees
F service provided by Electricity Exchanges
F additional services provided by builder to prospective buyers on extra charges excluding provision of vehicle-parking space
F promotion of "brand" of goods, services, events, business entity, etc., whether provided to a business entity or any other under a contract
F promotion, marketing or organizing of games of chance, including lottery
F service tax proposals are expected to mop-up Rs. 3,000 crores
Existing services expanded or altered
F air passenger transport service to include domestic and international journeys in any class
F information technology software service to cover all cases irrespective of its use
F "commercial training or coaching service" to mean any training or coaching provided for consideration, whether or not for profit (with retrospective effect from July 1, 2003)
F " sponsorship service" to include sponsorship pertaining to sports
F construction of complex taxable unless entire consideration for property is paid after receipt of completion certificate from competent authority
renting of immovable property
F rent of vacant land where there is an agreement for undertaking construction on land for furtherance of business
F services provided entirely within the airport/port premises
F auctioneer's service: "auction by Government" to mean auction involving sale of Government property and not when Government acts as an auctioneer for sale of private property
F management of investment under ULIP service: value of taxable service to be actual amount charged by insurer for management of funds under ULIP or maximum amount of fund management charges fixed by the Insurance Regulatory and Development Authority (IRDA), whichever is higher
Exemptions
F statutory taxes charged by foreign Governments excluded from taxable value under air passenger transport service
F services relating to "erection, commissioning or installation" of (a) mechanized foodgrain handling systems etc.; (b) equipment for setting up or substantial expansion of cold storage; and (c) machinery/equipment for initial setting up or substantial expansion of units for processing of agricultural, apiary, horticultural, dairy, poultry, aquatic, marine or meat products
F pre-packaged I. T. software, with licence for right to its use
F transport by road by goods transport agency to include foodgrains and pulses in list of exempted goods
F Indian news agencies under "online information and database retrieval service" subject to specified conditions
F "technical testing and analysis service" and "technical inspection and certification service" provided by Central and State seed testing laboratories, and Central and State seed certification agencies
F transmission of electricity
Withdrawal or amendments of exemptions
F exemption to service provided in relation to transport of goods by rail withdrawn
F exemption to group personal accident insurance scheme provided by Government of Rajasthan to its employees, under General Insurance Service withdrawn
F exemption to commercial training or coaching service restricted to vocational training courses in the designated trades notified under the Apprentices Act, 1961
F condition in Export of Service Rules that service is provided from India and used outside India deleted
F construction and operation of installations, structures and vessels for prospecting or extraction or production of mineral oils and natural gas in the Exclusive Economic Zone and the Continental Shelf of India to be within the purview of the provisions of Chapter V of the Finance Act, 1994
Other amendments (Finance Act, 1994)
F no penalty where service tax with interest paid before issuance of notice by the Department: section 73(3), Expln.
F "business entity" to include an association of persons, body of individuals, company or firm but not an individual


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