THE software industry worldwide has been going through a rough patch. So is the Indian sector. Insiders feel that the duo of 'Rahu' & 'Ketu' have besieged this sector like guerrillas! On top of all this, the taxmen also seem to be catching up with some of the 'real' as well as 'surreal' demands. A good example of a 'real' case is the income tax order confirming a huge demand against Grace Mac Corporation, USA. And the 'surreal' one is the Delhi Service Tax case against Microsoft only where a demand of Rs 126 Cr has been slapped. ....

FOR the taxmen, yet another season of terror and trepidation is here. Both the Revenue Boards are gearing up for Annual General Transfer. A few amendments to the New Transfer Policy have been notified but what appears to me, down the three years period when this policy was framed, is that this policy has become a goal in itself rather than achieving the avowed goals of fairplay, equality & equity for the lesser mortals and positive discrimination on humanitarian grounds ... Read Column

THE States' lackadaisical approach towards reforms initiatives unleashed by the Centre has proven to be a big stumbling block in increasing agricultural productivity. This is because agriculture is a State subject under the Constitution. All States do not have efficient agricultural administration. Moreover, many of them also don't share the Centre's perspective on policy reforms. It is, thus not surprising to find that the Union Agriculture Ministry is trying to break free from the inertia in the realm of agricultural marketing reforms. The reforms hold the pivot to improve the income of farmers, to provide better deal to consumers, apart from reducing colossal wastage of commodities. The agri-market reforms have acquired added urgency and legitimacy against the backdrop of runaway rise in prices of essential commodities ... Read Column

WE carried an article on March 1, 2008, immediately after the Budget with the caption : Ratifying rebate given to goods manufactured under area-based exemption in Budget 2008 – job half done? The other half to be rectified soon? There is an important lacuna in the budget proposal with regard to rebate of duty paid on goods manufactured under various area based exemption notifications. Now Board seems to be contemplating to extend the period and has asked ... Read Column

CENVAT credit is admissible on input, input service and capital goods subject to satisfaction of criteria precluded under the Cenvat credit Rules 2004. This is really good mechanism if it works within the frame of rules as it reduces the double taxation to some extent. At the same time, it punishes to the wrong doer in case of violation of rules contemplated under Cenvat Credit Rules. In this article, the impact of credit wrongly taken and subsequently reversed before utilization is dealt. During the on going process, through oversight, the person takes cenvat credit in excess or avails inadmissible cenvat credit. In that situation, recoveries of credit wrongly taken or utilized and payment of interest are governed by Rule 14 of the Cenvat Credit of Rules, 2004 ... Read Column

WHEN two public sector undertakings with long history of acromonious supplier-customer relationship form a joint venture (JV), it is time to reinvent public sector reforms. The UPA Government deserves credit for facilitating JV between BHEL and NTPC Limited. The JV would not only implement power projects at home and abroad to avoid slippages but also manufacture ... Read Column

By S Sivakumar, CA

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THE CBDT needs to be heartily congratulated for clarifying thro' its Circular No. 4/2008 that tax need not be deducted at source in respect of the service tax portion, under Section 194I of the Income tax Act. In other words, the CBDT has clarified that TDS need to be effected only on the net rental amount payable, obviously excluding the service tax charged. The Board has clarified that service tax paid by the tenant doesn't partake the nature of "income" of the landlord and that the landlord only acts as a collecting agency for Government for collection of Service Tax. The CBDT has stated that “therefore it has been decided that tax deduction at source under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax.....
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By Alok Kumar, Advocate

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THE recent face-off between the Legislature and the Judiciary is the latest episode of an on-going battle between the two important pillars of our democracy. It occasionally flares up whenever the Legislature or the Judiciary somersaults with a new move to rein in the other. In the latest case, a Parliamentary Panel has commented that the current system of appointment of judges of Supreme Court and High Court is not very much in tune with the democratic principles....
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