TIOL-DDT 2849
19 05 2016
Thursday

SERVICES provided by an arbitral tribunal to

(i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year,

are exempt from services tax [Entry 6(a) of Notification No. 25/2012 - ST].

"arbitral tribunal means a sole arbitrator or a panel of arbitrators"

Services provided or agreed to be provided by an arbitral tribunal to a business entity (turnover exceeding Rs 10 lakh) located in the taxable territory, is taxable under reverse charge mechanism and recipient of service is liable to discharge service tax liability [Notification No. 30/3012 - ST (Sl. No. 4)].

It has come to the notice of the Board that there is some confusion regarding the legal position with respect to continuance of reverse charge mechanism for services provided by arbitral tribunals and individual arbitrators of the arbitral tribunal, with effect from 1.4.2016.

Board explains:

It could be argued that service provided by an arbitrator on the panel of arbitrators, to the arbitral tribunal is taxable under forward charge. However, this does not appear to be a correct interpretation of law. Any reference in Service Tax law to an "arbitral tribunal" necessarily includes the natural persons on the arbitral tribunal, by virtue of clause (d) of Section 2 of the Arbitration and Conciliation Act, 1996. Services are provided or agreed to be provided by the panel of arbitrators, as comprising the several natural persons on the said panel, to the business entity or to the arbitration institution approached by the business entity for purposes of arbitration. The liability to discharge service tax is on the service recipient, if it is a business entity located in the taxable territory with a turnover exceeding rupees ten lakh in the preceding financial year.

And clarifies:

Service Tax liability for services provided by an arbitral tribunal (including the individual arbitrators of the tribunal) shall be on the service recipient if it is a business entity located in the taxable territory with a turnover exceeding rupees ten lakh in the preceding financial year .

Circular No. 193/03/2016-ST, Dated: May 18, 2016

Central Excise -Complicated Exemption to RBD Palm Stearin, biodiesel

THE Central Government has issued an amending notification -

++ to exempt excise duty on RBD Palm Stearin, Methanol and Sodium Methoxide for the manufacture of bio-diesel (alkyl ester of long chain fatty acids obtained from vegetable oils, commonly known as biodiesels) on actual user basis for a period upto and inclusive of 31st March, 2017;

++ to withdraw excise duty exemption on biodiesel with effect from 1st April, 2017; and

++ to levy 6% excise duty on biodiesel and its inputs namely, RBD Palm Stearin, Methanol and Sodium Methoxide with effect from 1st April, 2017.

This is as complicated as it can be.

1. Alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as bio-diesels are exempted by Sl. No. 113 of the table to Notification No. 12/2012-CE, dated 17th March, 2012. Now this exemption will be valid only up to 31st March, 2017.

2. a. RBD Palm Stearin, Methanol and Sodium Methoxide for use in the manufacture of alkyl esters are exempted by Sl. No 113A. But that was only up to 31 st March 2016. So, this has expired on 1 st April 2016.

b. They have reinserted the same exemption as Sl. No. 113B with a condition that the exemption will lapse on 31 st March 2017.

c. These goods will attract a duty of 6% from 1st April 2017 as per the newly inserted Sl. No. 113D of the notification.

Those boys in TRU must be really brilliant to make and amend such notifications.

Notification No. 23/2016-Central Excise, Dated: May 17, 2016

Central Excise Duty on Gold Jewellery - Lahiri Committee Expanded

GOVERNMENT has constituted a Committee under the chairmanship of Dr. Ashok Lahiri to study the issues relating to the recent imposition of excise duty on jewellery including the issues related to compliance procedure for the excise duty, records to be maintained, operating procedures and any other issues that may be relevant.

The Committee consists of

1. Mr. Gautam Ray

2. Mr. Rohan Shah, Legal expert [Managing Partner, Economic Laws Practice].

3. Mr. Shri Manoj Kumar Dwivedi, Joint Secretary [Department of Commerce].

4. Mr. Alok Shukla, Joint Secretary [Tax Research Unit, Central Board of Excise and Customs, Department of Revenue].

Now the following trade representatives are nominated as members of the Committee:

i. Mr. Konal Doshi, past Convener, Jewellery panel, GJEPC;

ii. Mr. Ashok Minawala, past Chairman, AIGJF, and

iii. Mr. Fatehchand Ranka, Chairman, All India Action Committee on Jewellery, AIACJ

CBEC Circular No. 1030/18/2016-CX, Dated: May 18, 2016

Customs -HAL Exemption Withdrawn

GOVERNMENT has amended Notification No. 39/96- Customs, dated the 23rd July, 1996 to withdraw the following exemptions:

Notification No.33/2016-Customs., Dated May 17, 2016

Provisional Anti Dumping Duty on Seamless tubes, pipes from China

GOVERNMENT has imposed provisional anti dumping duty on Seamless tubes, pipes and hollow profiles of iron, alloy or non-alloy steel (other than cast iron and stainless steel), whether hot finished or cold drawn or cold rolled of an external diameter not exceeding 355.6 mm or 14" OD, falling under heading 7304 of the First Schedule to the Customs Tariff Act, originating in, or exported from the People's Republic of China.

The anti-dumping duty is effective for a period not exceeding six months.

Notification No.18/2016-CUSTOMS (ADD)., Dated May 17, 2016

FTP -Import of Textiles - Exemption from Testing

IMPORT of textile and textile articles is permitted subject to the condition that they shall not contain any of the hazardous dyes whose handling, production, carriage or use is prohibited by the Government of India under the provisions of clause (d) of subsection (2) of Section 6 of the Environment (Protection) Act, 1986 (29 of 1986) read with the relevant rule(s) framed thereunder. For this purpose, the import consignments shall be accompanied by a pre-shipment certificate from a textile testing laboratory accredited to the National Accreditation Agency of the Country of Origin.

In cases where such certificates are not available, the consignment will be cleared after getting a sample of the imported consignment tested & certified.

However, the above procedure regarding testing of Textiles and Textile Articles for presence of Azo Dyes, will not be applicable for imports originating from the countries as listed in Appendix-2X, where the use of Azo Dyes in Textiles and Textile Articles is banned.

The countries listed in the Appendix are:

i. European Union (EU) Countries ii. Serbia iii. Poland iv. Denmark v. China

Now the following countries are added to the list:

vi. Australia; vii. Canada; viii. Japan and ix. South Korea.

DGFT Public Notice No. 10/2015-20., Dated May 18, 2016

FTP -Export Policy for Edible Oils - Rice Bran Oil

EXPORT of edible oils is prohibited.

Rice Bran oil in bulk, irrespective of any pack size is now exempted from this prohibition.

DGFT Notification No.8/2015-20., Dated: May 8, 2016

Obey the CIC - CBDT

IT has been brought to the notice of the Board by Registrar, Central Information Commission, New Delhi that in certain cases, orders passed by the CIC are not being complied with by the Income Tax Department.

The CIC have raised a concern that such non-compliance of orders passed by the Commission by one public authority will only embolden others to act in a similar manner, which will damage the effectiveness and image of the Commission.

In view of the fact that the orders of CIC are binding under the RTI Act, 2005 unless stayed or reversed by higher courts, Board wants all the concerned authorities/officers/CPIOs to ensure that the orders passed by CIC in appeals and complaints under the RTI Act, 2005 are invariably complied with within the time fixed by the Commission.

Any deviation will be viewed adversely - means what?

CBDT Letter in FTS -300294447/2016., Dated: May 17, 2016

Standing Officers of Customs - Kissa Kursi Ka

IT'S the story of Chairs for Customs officers - On 13th May 2016 (a day after the dated video of a Customs officer demanding a bribe went viral on social media - see DDT 2846), the chairs for the Customs officers of Mumbai's CSI airport were removed and they were asked to attend to their duties standing. This created a furore and a sort of standoff between the Customs Chief Commissioner and the protesting superintendents. The Superintendents refused to sit during a discussion with the Chief Commissioner. They discussed with him - standing. By 17th May, the standing officers were given back their chairs.

But why were the chairs removed? It is alleged that it was the Chief Commissioner's way of punishing the Superintendents for checking a friend of his, who is a Customs broker. Anyway, the chairs are back and the Superintendents are back to their seats but this ill-will between the top boss and his Superintendents could have been avoided.

Should the Customs Officers sit when there is no chair for the passenger? It may be surprising, but there was a time when the Customs Inspectors and Superintendents checking the baggage of air passengers were not actually allowed to sit - there were no chairs for them in the arrival hall. The idea was that when the passenger, a citizen who is your master is standing before you, it was disrespectful for you as the servant to sit. So, Customs officers happily and courteously stood up while the passenger was being cleared. Over a period of time, this concept of respect for the master-citizen waned and ultimately vanished, with nobody giving a damn for the citizen.

An Inspector will not sit when an Assistant Commissioner is standing before him, but he would have no qualms of making a citizen stand before him. And this citizen is the one for whom even the President of India is a servant! Once you realise that the one standing before you is higher in rank than the President of India, it will be absolutely fine if you don't have a chair.

But then, why can't there be a chair for the passenger too?

Until Tomorrow with more DDT

Have a nice day.

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