Global financial crisis: Govt sets up high-powered panel of Finance Secy, Commerce Secy, Secy (DIPP) and Secy, Planning Commission;

telecom story.pdf

New telecom licences: Minister says there is no revenue loss; Decision as per Cabinet approved policy;

rbi_noti.pdf

Rupee Export Credit Interest Rates Subvention;

mbuzz1142.pdf

Banks having foreign branches: RBI allows forex swap facility;

mbuzz1141.pdf

ASEAN Transport Ministers' meet welcomes India's Open Skies Regime;

mbuzz1140.pdf

Survey of Professionals Forecasters projects 7.5% growth rate for current fiscal;

2008-TIOL-19-ARA-IT.pdf + ara story.pdf

Intertek Testing Services (Dated: November 5, 2008)

Income tax - India-UK DTAA - applicant is a subsidiary of UK-based Holding Company - provides technical and consultancy services - Holding Co pools in technical expertise of its different Group Companies and puts in place a global management services agreement whereby any of the subsidiaries using the skills and services of others pays up the cost plus certain mark-up - Indian subsidiary avails certain services of its Group Cos and makes payment - seeks advance ruling on whether such a payment is taxable as fee for technical services in relation to Explanation 2 to Clause (vii) of Sec 9(1) or can claim benefits of Clause (c) of Article 13.4 of the DTAA

Held, the language in the definition contained in Explanation 2 to Section 9 ((1) (vii) of the Act and article 13.4.(c) of DTAA is not the same. Clause (c) of article 13.4 restricts the scope of “fee for technical services” by using the expression “make available” whereas as per Explanation 2, mere rendering of specified service is sufficient to attract the definition of FTS. Article 13.4(c) says that the services rendered should make available technical knowledge, experience, skill, know-how, etc. On an analysis of article 13.4 read with clause (c) it follows that FTS is consideration paid for the rendering of technical or consultancy services, provided that those services make available to the other party, the technical knowledge, experience, know-how, etc.

The phrase “make available”: There are three ingredients or requirements in clause (c). The first requirement is that the payment is made by way of consideration for the rendering of technical or consultancy services (‘including the provision of services of technical or other personnel). The second requirement is that those services should make available technical knowledge, skills, etc. to the recipient of services”. That means, the technical or consultancy service rendered should be of such a nature that “makes available” to the recipient technical knowledge, know-how and the like. The service should be aimed at and result in transmitting the technical knowledge, etc. so that the payer of service could derive an enduring benefit and utilize the knowledge or know-how in future on his own without the aid of service provider. By making available the technical skills or know-how, the recipient of service will get equipped with that knowledge or expertise and be able to make use of it in future, independent of the service provider.

In view of inadequate infromation furnished by the applicant about the services it is difficult to give a precise answer to the question raised. However, the majority of the services catalogued are in the nature of technical or consultancy services. But, most or many of them do not ‘make available' to the applicant the technical knowledge, experience, skill, know-how etc. possessed by the provider of services. At the same time, there are some services which can be brought within the ambit of phrase “make available”: AUTHORITY FOR ADVANCE RULINGS, NEW DELHI;

2008-TIOL-542-ITAT-DEL.pdf

M/s Siemens Power Engineering Pvt Ltd Vs DCIT, Gurgaon (Dated : August 22, 2008)

Income tax - depreciation - Assessee purchases a car for business purposes on 29.3.1999 - claims 40% depreciation - AO restricts it to 20% - In view of third proviso to Sec 32(1), 40% depreciation is allowable - Assessee's appeal allowed: DELHI ITAT;

2008-TIOL-541-ITAT-MUM.pdf

Nodi Exports Vs ACIT, Moradabad (Dated : July 25, 2008)

Income Tax - Assessee being a manufacturer and exporter of metal wares and handicrafts claims deduction under sections 80HHC and 80-IB on business profits derived. AO referring to provisions of sections 80-IB(13), 80-IA(9) and 80HHC(4B) holds that once deduction under section 80-IB had been allowed, the deduction on the same income would not be allowable under other provisions. AO for the purpose of computing deduction under section 80HHC reduced the amount of deductions under section 80-IB and on the balance he allowed deduction under section 80HHC - CIT(A) upholds the order of AO - Held, Madras High Court decision in the case of SCM Creations' did not examine the provisions of section 80-IA(9A) inserted by the Finance Act, 1998 w.e.f. 1-4-1999; in the light of the decision of the Special Bench in the case of Rogini Garments the deduction claimed and allowed u/s 80-IB (13) will be reduced from eligible profits of business for computation of deduction under section 80HHC.

On issue of deduction under section 80-IB in respect of duty drawback/DEPB - Held, in the light of precedents, the assessee will be entitled for deduction under section 80-IB of the Act in respect of duty drawback and DEPB received by it as the same has direct nexus with the business of industrial undertaking.

Appeal partly allowed: MUMBAI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-1825-CESTAT-AHM.pdf + ultra story.pdf

CCE, Bhavnagar Vs M/s Ultra Tech Cement Co Ltd (Dated: September 19, 2008)

Central Excise – Appeal filed by Revenue after Tribunal decided the appeal filed by the assessee - When the appeals are filed by the respective parties on different grounds, doctrine of merger does not apply - Larger Bench decision in LML case [2002-TIOL-404-CESTAT-DEL-LB] distinguished: AHMEDABAD CESTAT;

2008-TIOL-1824-CESTAT-MAD.pdf

M/s Ideal Industries Vs CCE, Coimbatore (Dated: September 2, 2008)

Central Excise – SSI exemption – brand name - exemption cannot be denied to an assessee on the sole ground that a brand name used on the products of the assessee is also used by another assessee on a different category of goods.: CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1823-CESTAT-KOL.pdf

M/s Venky Steels Pvt Ltd Vs CCE & ST, Patna (Dated: September 9, 2008)

ST - C & F Service - Original authority finds no liability - Revisionary authority raised demand - Since the assessee was providing jobwork on purely labour charge basis, it is a fit case for waiver of pre-deposi: CESTAT KOLKATA;

CUSTOMS SECTION

NOTIFICATION

ctariff08_121.pdf

Export duty on iron ore fines: Govt switches back to ad valorem rate from specific duty; 8% duty to replace Rs 200/- per tonne rate;

dgft08pn104.pdf

DGFT amends SION rate for Nylon filament knitted nets;

dgft08pn103.pdf

VKGUY benefits extended to maize;

CASE LAWS

2008-TIOL-1822-CESTAT-MAD.pdf

Rakesh Kumar Agarwal Vs CC, Tuticorin (Dated: July 30, 2008)

Customs – mis-declaration – paraffin with 0.7% oil content declared as semi-finished paraffin wax with 3-5% oil content – mis-declaration and confiscation under Section 111 (m) upheld.

Valuation – enhancement of value based on NIDB data which was not supplied to the imported – principles of natural justice denied – matter remanded. CHENNAI CESTAT;