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What is Site?

DDT in Limca Book of Records - Third Time in a rowTIOL-DDT 2884
08 07 2016
Friday

AS per Sl. No. 186 of the table to the notification No. 12/2012-CE, dated, 17.03.2012,

Goods manufactured at the site of construction for use in construction work at such site are exempted, subject to the explanation:

Explanation.- For the purposes of this entry, the expression "site" means any premises made available for the manufacture of goods by way of a specific mention in the contract or agreement.

Now, what is site? If you are constructing a bridge, should the site be in the middle of the river? If you are laying a railway track, is it at every inch of the line?

CBEC had addressed this problem way back in 1999.

In Circular  No. 456/22/99-CX, dated 18.05.1999, CBEC clarified:

Representation have been received from the trade regarding difficulties faced in availing of benefit of exemption applicable of goods manufactured at the site of construction for use in Construction Work At Such Site vide Notification No. 5/98-CE dated 2.6.98 (S.No.182). It has been stated that the beams / girders or other fabrication work are not presently manufactured at the site due to traffic problems it could cause (especially in case of flyovers at busy road junctions). Therefore, a separate off road site away from the main site is allotted to the construction company to carry out pre-casting (manufacturing) of beams and girders so that the traffic is not affected. The field formations are denying that exemption on the ground that the off road site, which is used for manufacture is not the site of construction.

2. The matter has been examined by the Board. It has been decided that the expression 'site' may not be given a restrictive meaning and shall include any premises made available to the manufacturer of goods falling under heading No. 68.07 of the Schedule to the Central Excise Tariff Act, 1985 by way of a specific mention in the contract/agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only.

Subsequently, Board defined ‘site' in the notification itself. But 17 years later, the problem seems to be still alive, thanks to overzealous officers who are above Board and Parliament.

Board's latest Circular states,

It appears that in some field formations, the distance at which goods manufactured at site is used in the project, has been considered as criteria for examining the eligibility of goods for exemption. This is an extraneous criteria not flowing from the language used in the notification, particularly when the expression "site" stands explained in the notification. The eligibility criteria must flow from the plain reading of the explanation of the expression "site" in the notification .

So, the Board directs that each case may be decided taking into consideration the facts of the individual case, examined in light of the clarification given above.

Board has rescinded Circular  No. 456/22/99-CX, dated 18.05.1999. But what was the need to rescind this circular, especially when it stipulated that even without the explanation for site, distance is not a criterion?

A similar explanation appears at Sl. No. 144 of the notification. The Board is silent on whether this clarification would apply to that entry also. Though it can be inferred that it would apply, in the interest of ‘ease of doing business', Board should have clarified it.

CBEC Circular No. 1036/24/2016-CX., Dated: July 06, 2016

Customs Duty in Indian Rupees at Duty Free Shops at Airports

WHILE coming from abroad, if you buy goods from the Duty Free Shops at the International Airports in India, you are expected to pay in convertible currency and not Indian Rupees. However, you can pay up to Rs. 5000/- in Indian rupees.

According to RBI Regulations, any person resident in India is permitted to take outside India (other than to Nepal or Bhutan) or bring into India (other than from Nepal or Bhutan) currency notes up to an amount not exceeding Rs 25,000/-.

Now, the CBEC has decided that passengers shall be permitted to purchase goods at duty free shops in Indian rupees up to an amount not exceeding Rs 25,000/-. Board doesn't say what the limit is if you are coming from Nepal.

Recently I returned from Nepal and the Duty Free Shop in Delhi Airport allowed me to pay Rs. 10,000 in Indian Rupees and asked for the balance in Dollars. I told him that I didn't have any dollars. He offered me a solution - Pay through your International Credit or Debit card, which I did!

CBEC wants that:

1. Principal Commissioners / Commissioners of Customs to advise the Duty Free Shop operators of the revised permitted limits for purchase of goods in Indian currency at Duty Free shops.

2. Information relating to the use of Indian currency at duty free shops should be displayed at all DFSs.

3. It may be ensured that DFSs display the rate of exchange as published by the commercial banks for conversion of foreign currency or the rate of exchange notified by the CBEC on a fortnightly basis for import and export of goods.

4. Similarly, websites of DFS / Airports must be kept accurately updated with regard to the facility and limit in use of Indian currency for making purchases.

5. It may also be ensured that duty free shop operators are familiarized with the procedures for procuring excisable goods, duty free, from factories in terms of the procedure prescribed from time to time.

6. The display of prices of goods by DFSs in Indian Rupees should also be complied with at the earliest.

CBEC Circular No.31/2016-CUSTOMS., Dated: July 06, 2016

No Export Duty on Sugar exported against valid Advance Authorization

GOVERNMENT has fixed nil rate of duty for

Sugar exported against a valid Advance Authorization issued by the Regional Authority subject to the conditions that:

(a) Exports are effected in proportion to the import of raw sugar against the said Advance Authorization;

(b) Advance Authorization holder has not got the said Authorization invalidated;

(c) Advance Authorization holder has not procured raw sugar from the domestic market;

(d) At the time of clearance of export consignment at port, the exporter submits a copy of the bill of entry as documentary proof of import of raw sugar under the said Advance Authorization to the jurisdictional proper officer of customs.

Notification No. 41/2016-Customs., Dated: July 06, 2016

Income Declaration Scheme 2016 - No Leave to IT Officers

THE declarations under the Income Declaration Scheme 2016 can be made any time before 30th September, 2016.

CBDT states that the role of officers/officials working in the Income-Tax Department is crucial for adequate publicity of the Scheme as well as for clarifying the provisions of the Scheme to the taxpayers.

Therefore, Board desires that till 30.9.2016, leave to the officers/officials should be sanctioned in pressing circumstances only and duration of leave should be kept minimum.

CBDT F.No.A-27023/13/2016-Ad.VI(A) , Dated: July 06, 2016

FTP - SION for Upgraded Beneficiated Ilmenite

DGFT has amended the standard Input Output Norms (SION) for export product under S No. A 1875 - Upgraded Beneficiated Ilmenite (Synthetic Rutile) containing Titanium Dioxide of 90-96% concentration (Specific % concentration to be mentioned)

DGFT Public Notice No.21/2015-2020., Dated: July 06, 2016

Discard Old Records

CBEC wants the field officers to identify the records which are to be digitized/scanned so as to maximize the available working space.

Do they have the infrastructure and manpower for the same? First let them get rid of the rickety old furniture, the old and wearied racks and corroded & dysfunctional water coolers.

CBEC F.No.C 30013/89/2015-Ad.IVA., Dated: July 05, 2016

A New Financial Year?

THE Government has constituted a Committee to examine the desirability and feasibility of having a new financial year

The Committee consists of:

(i) Dr. Shankar Acharya Chairman (Former CEA)

(ii) Sh. KM Chandrasekhar Member (Former Cabinet Secretary)

(iii) Sh. PV Rajaraman Member (Former Finance Secretary, Government of Tamil Nadu)

(iv) Dr. Rajiv Kumar Member (Senior Fellow, Center for Policy Research)

The terms of reference (ToR) of the Committee are:

Examine the merits and demerits of various dates for the commencement of the financial year including the existing date, taking into account, inter-alia, the following:

(i) The genesis of the current financial year and the studies made in the past on the desirability of change in financial year;

(ii) The suitability of the financial year from the point of view of -

(i) correct estimation of receipts and expenditure of Central and State Governments;

(ii) the effect of the different agricultural crop periods;

(iii) the relationship of financial year to the working season;

(iv) impact on businesses;

(v) taxation systems and procedures;

(vi) statistics and data collection;

(vii) the convenience of the legislatures for transacting budget work; and

(viii) other relevant matters.

The Committee may, after due examination of all relevant factors, recommend the date of commencement of the financial year which in its view is the most suitable for the country.

In case a change in the financial year is recommended, the Committee may also work out the modalities for effecting the change. This would include:

(i) appropriate timing of change;

(ii) the determination of a transitional period;

(iii) the change in tax laws during the transitional period;

(iv) the amendments that may be required in various statutes; and

(v) changes in the coverage of the recommendations of the Finance Commission.

The Committee shall submit its report to the Government by 31st December, 2016.

Ministry of Finance Department of Economic Affairs (BUDGET DIVISION) F.No. 1(l 7)-B(AC)/2010., Dated July 06, 2016.

Customs - New Exchange Rates Notified

CBEC has notified new exchange rates for Imported Goods and for Export Goods with effect from 7th July 2016. The USD is 68.20 for imports and 66.55 Rupees for exports.

Notification No. 96/2016-Cus (NT)., Dated: July 06, 2016

Unruly behavior by Lawyer before Judge - ‘Advocates Act' Needs to be Reviewed - SC

A Civil Judge in Etah, UP wrote to his District Judge that while he was hearing a case, a lawyer appeared in the Court and, while using intemperate language, spoke in a loud voice:

"How did you pass an order against my client in the case titled as “Kanchan Singh vs. Ratan Singh”? How did you dare pass such an order against my client? I tried to console him, but he started shouting in a state of highly agitated mind: “Kanchan Singh is my relative and how was this order passed against my relative? No Judicial Officer has, ever, dared pass an order against me. Then, how did you dare do so? When any Judicial officer passes an order on my file against my client, I set him right. I shall make a complaint against you to Hon'ble High Court”, and he threatened me: "I will not let you remain in Etah in future, I can do anything against you. I have relations with highly notorious persons and I can get you harmed by such notorious persons to the extent I want to do, and I myself am capable of doing any deed (misdeed) as I wish, and I am not afraid of any one. In the Court compound, even my shoes are worshipped and I was prosecuted in two murder cases. And I have made murderous assaults on people and about 15 to 20 cases are going on against me. If you, in future, dare pass an order on the file against my client in which I am a counsel, it will not be good for you".

The High Court sentenced the advocate to two months imprisonment and imposed a fine of Rs. 2000.

The High Court observed,

The subordinate courts in Uttar Pradesh are witnessing disturbing period. In most of the subordinate courts, the Advocates or their groups and Bar Associations have been virtually taken over the administration of justice to ransom. These Advocates even threaten and intimidate the Judges to obtain favourable orders. The Judicial Officers often belonging to different districts are not able to resist the pressure and fall prey to these Advocates. This disturbs the equilibrium between Bar and the Bench giving undue advantage and premium to the Bar. In these extraordinary situations the High Court cannot abdicate its constitutional duties to protect the judicial officers .

The High Court also directed the Bar Council of Uttar Pradesh to draw proceedings against him for professional misconduct.

On appeal, the Supreme Court on Tuesday held that no error has been committed by the High Court while coming to the conclusion that the appellant had committed contempt of Court. However, the Supreme Court set aside the sentence for imprisonment in view of advanced age of the appellant.

An Epilogue: The Supreme Court made some noteworthy comments before parting with the case:

Legal profession being the most important component of justice delivery system, it must continue to perform its significant role and regulatory mechanism and should not be seen to be wanting in taking prompt action against any malpractice. We have noticed the inaction of the Bar Council of Uttar Pradesh as well as the Bar Council of India in spite of direction in the impugned order of the High Court and in spite of notice to the Bar Council of India by this Court. We have also noticed the failure of all concerned to advert to the observations made by the Gujarat High Court 33 years ago. Thus there appears to be urgent need to review the provisions of the Advocates Act dealing with regulatory mechanism for the legal profession and other incidental issues, in consultation with all concerned.

We request the Law Commission of India to go into all relevant aspects relating to regulation of legal profession in consultation with all concerned at an early date. We hope the Government of India will consider taking further appropriate steps in the light of report of the Law Commission within six months thereafter. The Central Government may file an appropriate affidavit in this regard within one month after expiry of one year .

Taxing With Love - What Chetan Bhagat told Taxmen

THE recent conference of Chief and Principal Commissioners of CBEC and CBDT was addressed by Chetan Bhagat on ‘Taxing With Love'. He suggested 10 ways to tax with love.

10 ways to tax with Love:

1. Treating the taxpayer as a customer: The current tax department mentality is to act like the police and approach the taxpayer as a criminal, unless proved otherwise.

2. Simplify forms: The government has tried but sadly failed to do this.

3. A good, robust and modern website: India is the land of IT companies. Hire a good company to revamp the customer interface.

4. Good quality paper:. Current tax department communication seems from the 1980s, with cheap quality super thin sheets and envelopes, and poor quality black and white printing.

5. Simpler nomenclature:. Names like ITR4 and 26AS intimidate people. Sit down one day and rename and reorganise all the forms that have been amended and become complicated in nomenclature over the years.

6. Say thanks and mean it: People who pay taxes are nation builders. Seeing rich people as thieves is a throwback to evil landlord and poor peasant movies of the 1970s.

7. Don't send scary letters. The department officials are under pressure to increase revenue. However, you cannot scare taxpayers.

8. Have tax guidance centres. People should be able to go somewhere and figure out how to do their taxes, which doesn't require a private advisor.

9. Share macro data. Without giving individual details, macro data should be shared with the public to enable us to understand how tax collections are going.

10. Share where the tax money was used. Of course, funds are amalgamated at the top. However, it would be nice to hear that your tax last year helped make this road.

It seems after hearing him out, a smart Commissioner asked, "Tax collection is a negative job. How can it be sugar coated? How to tax with love?"

Until Monday with more DDT

Have a nice Day.

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