TIOL-DDT 1820
21.03.2012
Wednesday
THE Gold excise duty has sent the gold merchants to their longest ever strike. And the CBEC has issued a clarification to allay the fears of the gold merchants. But while the clarification was being issued the CBEC also got issued a notification amending Notification No.2/2011.Cx dated 01.03.2011. WHY? It is really complicated.
By Notification No. 1/2011, a large number of goods were brought under excise net with a 1% duty, which included ‘articles of jewellery' with a brand name. This jewellery figured at Sl. No. 88 of the table to the notification. In this year's budget, this item was deleted from Notification No. 1/2011 and put in Sl. No. 199 of Notification 12/2012 Cx dated 16.03.2012. Why? The duty rate in Notification No. 1/2011 was raised to 2% from 1%, but they decided to retain jewellery at 1% with a nil duty for silver jewellery. Good intentions and well carried out.
But remember they had another Notification No. 2/2011 Cx with a 5% duty with CENVAT Credit. That notification also had branded Jewellery of heading 7113 and articles of precious metals of heading 7114 in Sl. Numbers 48 and 49. These items went missing during the Budget and our bright babus forgot to amend these entries. They have now amended Sl. Nos 48 and 49 to include jewellery (branded and unbranded) and articles of goldsmiths' or silversmiths' wares.
Without this amendment, unbranded jewellery would have suffered 2% duty without CENVAT Credit and 12% with Credit, instead of 6% now with credit.
With so much confusion in the Board, you can imagine the confusion that would have been created in the field. The striking jewellers were seen in groups visiting the offices of Central Excise and Consultants to know their liability.
Complying with tax laws is indeed a taxing task!
Notification No. 20/2012-CX., Dated: March 19, 2012
Backdoor Budget - Pan Masala
AS per Rule 5 of the Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Rules, 2008, issued under Notification No. 30/2008 CENT dated 01.07.2008, “The quantity of notified goods, having retail sale price as specified in column (2) of the Table below, deemed to be produced by use of one operating packing machine per month shall be as is equal to the corresponding entry specified in column(3) of the said Table”.
This notification was amended by Budget Notification No. 11/2012CENT dated 17.03.2012. But obviously, they forgot something then and this notification is amended just two days after the budget.
The Table with the old and new deemed quantities is as given here.
Table
Sl. No. | Retail sale price (per pouch) | Number of pouches per operating packing machine per month |
(1) | (2) | (3) OLD | NEW |
1. | Up to Rs. 1.00 | 37,44,000 | 56,16,000 |
2. | From Rs. 1.01 to Rs. 1.50 | 37,44,000 | 56,16,000 |
3. | From Rs. 1.51 to Rs. 2.00 | 35,56,800 | 53,35,200 |
4. | From Rs. 2.01 to Rs. 3.00 | 35,56,800 | 53,35,200 |
5. | From Rs. 3.01 to Rs. 4.00 | 34,44,480 | 51,66,720 |
6. | From Rs. 4.01 to Rs. 5.00 | 34,44,480 | 51,66,720 |
7. | From Rs. 5.01 to Rs. 6.00 | 34,44,480 | 51,66,720 |
8. | Above Rs.6.00 | 33,69,600 | 50,54,400 |
A new Proviso is added, “Provided also that annual capacity of production for the period from the 17th day of March, 2012 to the 31st day of March, 2012 shall be calculated on pro-rata basis for the total number of days in the month of March, 2012 and the number of days remaining in the month starting from and including 17 th day of March, 2012.”
What is the sanctity of 17th March 2012 - that was the day when many Budget Notifications were issued, but they forgot to issue this notification on 17th March 2012. When this notification is dated 19th March, how can they make it effective from 17th March? And further why should they write this notification in such a complicated language? Don't they know the number of days in March and the number of days from 17th March to 31st March?
Notification No. 19/2012 - CX (NT.), Dated: March 19, 2012
Chewing Tobacco - Same Story
A similar amendment is made to the Chewing Tobacco and Un-manufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010, issued by Notification No. 11/2010-Central Excise (N.T.), dated the 27th February, 2010 - and an identical proviso!
Notification No. 20/2012 - CX (NT.), Dated: March 19, 2012
Customs - SAD Corrections
BOARD has issued a corrigendum to correct several items in Notification No. 21/2012-Cus dated 17.03.2012, exempting SAD. Corrections are always welcome.
Corrigendum to Notification No. 21/2012-Cus; Dated March 19 2012
Excise - Corrigendum
BY Notification No. 18/2012 - Cx dated 17.03.2012, in Sl. No. 20 item No. 3014 attracts a 12% duty. THERE IS NO ITEM 3014 IN THE CE TARIFF. So, the Board wants you to read it as 3104. Similarly, in Sl. No. item No. “2606 30 10 ” attracts 12% duty. This item also does not exist. So, they want you to read it as “9606 30 10”.
Well, these are typing mistakes - and when you can't get a proof reader these days, you can't get a typist either.
Vodafone - Review Petition Dismissed
AS of now, the Government is poorer by 2500 Crores as they had to make the refund to Vodafone on their review petition being dismissed. Vodafone will frown all the way to the bank as they might be asked to pay much more once the Finance Bill is enacted.
The Supreme Court said,
We have carefully gone through the review petition filed by the Union of India on 17th February, 2012. We find no merit in the review petition. The review petition is, accordingly, dismissed .
8.6% interest for GPF
GOVERNMENT has announced that interest for General Provident Fund would be 8% for the period 01.04.2011 to 30.11.2011 and 8.6% with effect from 01.12.2011.
Department of Economic Affairs Resolution dated March 19 2012
The Bride Who Demanded a Toilet and is richer by 5 Lakhs
ANITA Narre left her husband's home in Madhya Pradesh, just two days after her marriage, because there was no toilet in his house. She returned after a week after her husband built a toilet and now the whole village has toilets. Sulabh International paid her Rs. 5 Lakhs for standing up for her dignity.
In some startling statistics, it is revealed that only about 47% households in India have lavatories. 50% of Indians defecate in the open!
Is there any meaning for our budgets, our economic surveys, our fiscal projections, our tax planning, our analyses, our Planning Commission (which will soon declare any one with a rupee is rich), our G3s, our GDP and our great Government - when half the Indians have no facility for a decent defecation? S..T!
Jurisprudentiol - Thursday's cases
Income Tax
Whether when lessee chooses equipment and pays for insurance and taxes and agrees to buy asset at end of non-cancellable lease period, any depreciation can be allowed to assessee financing same and claiming it to be an operating lease - NO, rules Special Bench
THE assessee bank filed its return claiming depreciation of Rs 25,70,03,293. The Assessing Officer observed that there was substantial variation between the amount of depreciation as per books of account and that claimed in the computation of income. Such variation was found mainly due to 100% depreciation claimed on leased assets to the tune of Rs.9,72,74,434 during the year. This depreciation was in addition to the claim of depreciation in respect of certain other assets leased in earlier years.
Service Tax
CENVAT Credit - Maintenance of staff colony and planation, Input services: HC
THE staff colony, provided by the respondent Company, being directly and intrinsically linked to its manufacturing activity could not therefore be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc., necessarily had to be considered as ‘input services' falling within the ambit of Rule 2(l) of the CENVAT Rules, 2004.
See our columns Tomorrow for the judgements
Until Tomorrow with more DDT
Mail your comments to vijaywrite@taxindiaonline.com
