Assessee can't be screwed if auditor is at fault to cause delay in filing of audited accounts

IT: Where assessee had provided books of account to auditors in time, but failed to get accounts audited in time due to delay on part of auditors, penalty under section 271B was not leviable as there was reasonable cause for delay

Govt warns tax deductors who fail to deposit TDS by due date

In a stern warning, the Revenue department today said tax deductors who default in depositing TDS by due date will be liable for prosecution and can be imprisoned for up to seven years.

"It has come to the notice of Income Tax Department that many times the tax deductors, after deducting TDS from specified payments, are deliberately not depositing the taxes so deducted in government account...

"Such retention of government dues beyond the due date is an offence liable for prosecution under Section 276B of the Income Tax Act, 1961," the Central Board of Direct taxes (CBDT) said in a statement.

"The defaulter, if convicted, can be sentenced to Rigorous Imprisonment (RI) for a term which can extend up to seven years," it added.

The statement further said that the TDS units of income tax department have been taking up prosecution proceedings in cases where the tax deducted at source has been retained beyond the due date.

The CBDT has partly modified existing guidelines for identification of cases for launching prosecution.

As per the revised guidelines, the criterion of minimum retention period of 12 months has been dispensed with, the CBDT said in statement.

The department added, however, that the offence under section 276B of the Income Tax Act can be compounded by Chief Commissioner having jurisdiction on the case, either before or after the launching of prosecution proceedings.

Onus on assessee-co. is limited to prove only identity of shareholders and not their creditworthines

IT: Where assessee-company received from shareholders certain amount on account of share application money, it was required to prove only identity of shareholder and not genuineness of transactions and creditworthiness of shareholders

Application against oppression requires express consent of supporters; they aren't required to file

CL : Section 399 only requires express consent of supporter to be made part of petition in Form Nos. 43 and 44 of Company Court Rules, 1959; it would not be necessary for supporter either to file petition and/or pleadings expressing its support or read and confirm petition that would be filed by petitioner

CBDT diktats: Relief for foreign investors

Providing relief to foreign investors, the finance ministry has said non-resident taxpayers can give tax residency certificates (TRCs) to claim treaty benefits in any format, instead of a prescribed format sought earlier, along with a prescribed self-declaration form. In a notification issued on August 1, the Central Board of Direct Taxes (CBDT) has given foreign investors the flexibility to make self-declaration of the information sought by Indian authorities if it is not part of a certificate issued by their resident country. According to the notification, the status of a foreign investor — whether individual or incorporated — nationality, and duration of tax residence could be declared by the investor himself in Form No 10F. The earlier rules required the government of a particular country to give details of residency in a prescribed format, which was difficult as every country has its own format. Investors raised concerns that it would be troublesome for them to get the TRC seeking too many details from their resident country. As India cannot dictate other countries to give TRC in a particular format, some countries wrote to the government seeking clarification. “Barring a few particulars such as name and residency status, all other information which we wanted in TRC can be substantiated by the taxpayer himself,” said an official. TRC was made mandatory in Budget 2012-13 for those availing tax benefits under the double taxation avoidance agreements (DTAAs). In Budget 2013-14, the government brought the provision under the law, but after concerns were raised by investors it clarified that a prescribed format would not be required for TRC. The government had said earlier that TRC would be a necessary but not sufficient condition for availing treaty benefits. However, in Finance Bill 2013-14, it said that submission of TRC would be a sufficient proof to claim benefits. It clarified TRC produced by a resident of a contracting state would not be questioned by the income tax authorities in India. The form seeks details such as name of the assessee, status (individual or company), nationality/country of registration, tax identification number, residential status, period for which the certificate is applicable, and address of the applicant.

Average market price on date of conversion of GDR into shares taken as cost of acquisition of shares

IT: Average market price, prevailing on date of conversion of GDR into share, is to be adopted as cost of acquisition (COA) of shares for computing capital gains

Soyameal Exports Fall By 36% In July

August 6, 2013

Soyameal exports fell by 36.42% to 1.07 lakh tonnes in July as the domestic price is higher than the global rates, an industry body said today.



The bulk of the exports was made to sanction-hit Iran.



Shipments of soyameal, used as animal feed, stood at 1.68 lakh tonnes in the same month last year, Soyabean Processors Association (SOPA) said in a statement.



In the first ten months of the current oil marketing year (October-September), soyameal exports decreased by 14% to 31.15 lakh tonnes compared with 36.10 lakh tonnes in the corresponding period of previous oil year.



"Exports fell as Indian soyameal prices were in disparity with the international market, SOPA Spokesperson Rajesh Agrawal said.



The majority of the exports were to Iran as it imported in the Indian rupee under the barter trade system, he added.



Source:-www.business-standard.com

Rise In Apparel Exports

August 6, 2013

Apparel exports increased by 12.13 per cent in dollar terms in June compared to the same period last year. According to a release from the Apparel Export Promotion Council, India exported apparels worth $1,240 million as against $1,106 million. In rupee terms, exports were 17 per cent higher this year compared to last year.

Source:-www.thehindu.com

Indian Oil To Cut Iranian Oil Imports By 23%: Veerappa Moily

Aug 06 2013

New Delhi: State-owned Indian Oil Corp. Ltd. (IOC) plans to cut crude oil imports from Iran by over 23% in the current year, petroleum minister M. Veerappa Moily said on Tuesday.

IOC imported 1.566 million tonnes of oil from Iran in 2012-13 financial year. For the year beginning April 2013, it “has entered into a term contract for import of 1.2 million tonnes crude oil from Iran,” he said in a written reply to a question in Rajya Sabha.

IOC, which is India’s third largest importer of Iranian oil behind Essar Oil Ltd. and Mangalore Refinery and Petrochemicals Ltd. (MRPL), imported 0.577 million tonnes of oil from Iran during April-June quarter of current fiscal.

Moily said IOC imported oil worth $1.262 billion in 2012-13 from Iran. Of this, $653.015 million in rupee and $415.140 million in euros through a Turkish bank. $194.31 million remains to be paid from 2012-13. Of the current year purchases, IOC has paid $193.09 million in rupee and $235.99 million balance remains, he said.

India slashed import of crude oil from Iran by over 26.5% in the financial year ended 31 March as the US and European sanctions made it difficult to ship oil from the Persian Gulf nation.

The country imported about 13.3 million tonnes of crude oil from Iran in 2012-13 fiscal, down from 18.1 million tonnes shipped in the previous financial year. The decline in shipments to the world’s fourth-largest oil importer was sharper than Iran’s other two big buyers, China and South Korea, as New Delhi struggled with insurance and payment problems.

While India can’t deposit dollars or euros in any foreign bank for importing crude from Iran because of the sanctions, insurance companies are refusing to cover refineries that use oil from the Persian Gulf nation.

In 2012-13, Iran has slipped three places to become India’s sixth-largest crude oil supplier behind Saudi Arabia, Iraq, Venezuela, Kuwait and the UAE. India, which relies on import for 79% of its oil needs, bought a total of 182.5 million tonnes crude in 2012-13. It had in the previous fiscal imported 171.7 million tonnes of crude oil, up from 163.4 million tonnes in 2010-11 and 159.2 million tonnes of 2009-10

Source:-www.livemint.com

Customs Official Probing Jewellery Importers Shunted

MUMBAI: A customs official has been transferred in less than 45 days into his posting. Assistant commissioner of customs KiranKarlapu (27) had started an inquiry against 253 jewellery importers for evading duty. His transfer order was issued on Monday.



Karlapu, a 2010 Indian Revenue Service officer, had recovered Rs 6.5 crore in duty in the past three weeks and was in the process of issuing notices to some of the jewellery importers. The total duty evaded in the past five years by the importers is estimated to be Rs 108 crore.



Chief commissioner of customs B R Vasudev said there was nothing unusual about the transfer, though it came within two months of a posting. "This happens sometimes."



Karlapu, attached to the precious cargo clearance centre (PCCC), a sensitive posting, had found forged documents showing imports of gold jewellery from Thailand. The duty on gold import from that country is 1% because of a free trade agreement with India compared to 10% for import from other countries. "The duty evasion exposed a nexus between customs officials, importers and customs house agents," an official said.



PCCC was formed for expeditious clearance of gem and jewellery meant for import and export. The total volume in terms of money handled this year was around Rs 1.25 lakh crore.



Karlapu was also planning a first-time audit of private bonded warehouses where imported jewellery and precious stones meant for export are stored. "The processes here are manual and open to manipulation. There is a question mark about the probe now," another official said.



Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council, said some members had complained about harassment by customs officials. "But no one complained against Karlapu. Some members have misused the scheme. But genuine members should not suffer. We discussed the issue with officials in Delhi."



There was a tiff between Vasudev and the then customs commissioner P M Saleem over Karlapu's posting. Karlapu took charge at PCCC in June last week on Saleem's orders; Vasudev had already posted another officer. Both continued working in the same unit, but Karlapu's job description was significant. When asked about the matter, Vasudev said, "All are good officers."

Source:-timesofindia.indiatimes.com

Commission earned by NR agent for services rendered abroad not taxable in India in absence of PE in

IT/ILT : Where non-resident agent did not have PE in India, Commission paid by assessee to non-resident agent for rendering services in foreign countries cannot be disallowed under section 40(a)(i)

CBDT lays down criteria for manual selection of case for scrutiny assessment for FY 2013-14

IT/ILT : Section 143 of the Income-tax Act, 1961 - Assessment - General - Procedure and criteria for selection of scrutiny cases under compulsory manual selection of returns during Financial Year 2013-14

No penalty for non-furnishing of docs under sec. 92D, unless notice specifies the info sought

IT/ILT: Penalty under section 271G, for failure to furnish information under section 92D, cannot be imposed unless notice is issued specifying information to be produced by person entering into an international transaction

Interest earned on arbitral award isn't assessable to tax, unless arbitral proceedings attain, final

IT: Amount of arbitral award which has been invested in a fixed deposit of a bank and interest earned thereon cannot be regarded as income which has accrued unless and until proceedings related to arbitral award attained finality and thus, it would be wholly unreasonable to deduct tax at source on an amount which had not accrued

Central Excise Notification No 11/2013 CE(NT) dated 02-08-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 11 /2013 – Central Excise (N.T.)

New Delhi, the 2^nd August, 2013

G.S.R. (E) In exercise of the powers conferred by sub-rule (2) of rule 9 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby exempts from registration under sub-rule (1) of rule 9 of said rules, unregistered premises used solely for affixing a sticker or re-printing or re-labeling or re-packing of pharmaceutical products falling under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985 with lower ceiling price to comply with the notifications issued by the National Pharmaceutical Pricing Authority under Drugs (Prices Control) Order, 2013 published in the Gazette of India vide S.O. 1221 (E), dated the 15^th May, 2013 subject to the conditions specified in the notification no. 22/2013 - Central Excise dated the 29^th July, 2013 exempting the pharmaceutical products from payment of Central Excise duty.

[F. No. 96/29/2013-CX.I]

(Pankaj Jain)

Under Secretary to the Government of India

No addition for undisclosed income merely on basis of statement recorded during survey

IT: Where apart from statement under section 133A(3)(iii), revenue had not brought anything on record in support of its conclusion that assessee had undisclosed income, addition made by Assessing Officer could not be sustained

Irrevocable power of attorney to transfer possession of property along with controlling rights amoun

IT : An irrevocable general power of attorney which leads to over all control of property in hands of developer would constitute transfer within meaning of section 2(47)

Rejection of impugned material to initiate proceedings against HUF would quash proceedings against k

IT : Where search proceedings were initiated against assessee as he was carrying gold ornaments belonging to HUF, in view of fact that search proceedings in respect of said gold ornaments had been quashed in case of HUF itself, proceedings so initiated against assessee on basis of same material were also liable to be quashed

THE COMMISSIONER OF INCOME TAX Vs. MR. FUMIO GOTO

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 08.07.2013 Decided on: 31.07.2013 + ITA 379/2007 THE COMMISSIONER OF INCOME TAX XVI ....Appellant versus SH. SASHI MUKUNDAN ..... Respondent + ITA 387/2008 THE COMMISSIONER OF INCOME TAX XVI ...Appellant versus MR. SHORT DONALD ..... Respondent + ITA 212/2009 THE COMMISSIONER OF INCOME TAX ......Appellant versus MR. FUMIO GOTO ..... Respondent + ITA 15/2010 THE COMMISSIONER OF INCOME TAX-XIV .....Appellant versus MR. DUNCAN ETHERINGTION ..... Respondent + ITA 351/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 408/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. IKUJU YABUKI ..... Respondent + ITA 450/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 1 versus SHRI TOSHIHORU SUNAHARA ..... Respondent + ITA 534/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SOJITZ CORPORATION AS AGENT ..... Respondent + ITA 635/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 1354/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. JASWINDER SINGH .... Respondent + ITA 1556/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 1561/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 370/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus GORAM WESTERBERG ..... Respondent + ITA 1557/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JOHN TRIPLETT ..... Respondent ITA 379/2007 & connected matters Page 2 + REV. PET. 708/2011 IN ITA 1369/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. FUMIO GOTO ..... Respondent + ITA 761/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. K.P.HOSTELLEY ..... Respondent + ITA 798/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 800/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 680/2007 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 681/2007 THE COMMISSIONER OF INCOME TAX XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 1215/2008 COMMISSIONER OF INCOME TAX DELHI XIV ..... Appellant versus MR. GHORAYEB EMILE, C/O AIR FRANCE ..... Respondent + ITA 494/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 3 versus SH. HIROYASU KITADA ..... Respondent + ITA 508/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. HIROYASU KITADA ..... Respondent + ITA 577/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. SCOTT R BAYMAN ..... Respondent + ITA 631/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. VENKAT RAO SHRIDHAR ..... Respondent + ITA 699/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JEROME SUDAN ..... Respondent + ITA 1912/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. PANKAJ SHAH ..... Respondent + ITA 528/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MARCH FRANCOIS JEAN SOULACROUP ..... Respondent .....Appearance Through: Mr. Rajiv Tyagi with Mr. Ajay Kumar, Mr. Gyanendra Sharma and Ms. Renu Narula, Advocates, for respondent in ITA 379/07. ITA 379/2007 & connected matters Page 4 Mr. Pawan Sharma with Ms. Madhavi Swaroop, Advocates, in ITA 15/2010. Mr. Piyush Kaushik, Advocate, in ITA 450/10 & ITA 534/10. Ms. Amita Kalkal Chaudhary, Proxy for Mr. Naresh Kaushik, Advocate, in ITA 1354/10. Mr. S. Ganesh, Sr. Advocate with Mr. Pawan Sharma, Ms. Madhavi Swaroop, Ms. Roohina Dua and Ms. Preeti Goel, Advocates, in ITA 577/10. Mr. Satyen Sethi with Mr. Arta Trana Panda, Advocates, in ITA 1912/10. Ms. Shreya Verma, Advocate, for Respondent in ITA 681/07 & ITA 1215/08. Mr. Salil Kapoor, Mr. Vikas Jain, Mr. Manomeet Dalal and Ms. Preity Goel, Advocates, for Respondents in ITA 212/09, ITA 1556/10, 1561/10, 1369/10, 370/11, 494/10, 508/10 and ITA 631/10. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S. RAVINDRA BHAT % 1. For detailed judgment please see ITA 441/2003 titled YOSHIO KUBO vs. COMMISSIONER OF INCOME TAX. S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) JULY 31, 2013 ITA 379/2007 & connected matters Page 5

IMCOME TAX APPELLATE TRIBUNAL :HYDERABAD BENCHES:HYDERABAD CONSTITUTION FOR THE WEEK COMMENCING FROM 05.08.2013 TO 14.08.2013

[unable to retrieve full-text content]IMCOME TAX APPELLATE TRIBUNAL :HYDERABAD BENCHES:HYDERABAD CONSTITUTION FOR THE WEEK COMMENCING FROM 05.08.2013 TO 14.08.2013 {ad} For more information...

Form – A4 Application for claiming refund of service tax paid on specified services used for authorised operations in SEZ

FORM A-4 [Refer condition at S. No. 3 (III)(c)] Application for claiming refund of service tax paid on specified services used for authorised operations in SEZ under notification No.12/2013- Service Tax dated 1st July, 2013 To The Assistant/Deputy Commissioner of Central Excise/Service Tax ___________ Division, _______ Commissionerate Sir, I /We having details as below,- (i) Name of the SEZ Unit/Developer: (ii) Address of the SEZ Unit/Developer with telephone and email: (iii) Address of the registered/Head Office with telephone and email: (iv) Permanent Account Number (PAN) of the SEZ Unit/Developer: (v) Import and Export Code Number: (vi) Jurisdictional Central Excise/Service Tax Division: (vii) Service Tax Registration Number/Service Tax Code / Central Excise registration number: (viii) Information regarding Bank Account (Bank, address of branch, account number) in which refund amount should be credited/to be deposited: (ix) Details regarding service tax refund claimed: claim refund of Rs.................. (Rupees in words) as per the details furnished in the Table I and Table II below for the period from____________ to______________. (A) Refund of service tax in respect of service tax paid on specified services exclusively used for the authorised operations in SEZ, as approved by the Approval Committee of the _________ SEZ [ Rupees____________] as per the details below Table-I S. Description of Name and STC No. of Invoice* Date Value of Service No. taxable service address of service provider No. service tax service (Indicate " self" if +cesses reverse charge provider paid applies to the specified service) (1) (2) (3) (4) (5) (6) (7) (8) Total amount claimed as refund *Certified copies of documents are enclosed. (B) Refund on respect of service tax paid on specified services other than the services used exclusively for authorised operation (used partially for the authorised operations of SEZ Unit/Developer), as approved by the Approval Committee of the _________ SEZ [Rupees ____________]. Table-II S. Descriptio Name STC No. Invoice* Date Value Service Amount Document* No. n of and of service No. of tax + distributed under which taxable address provider service cess to the SEZ amount service of service Amt Unit/Devel mentioned at provider -oper out column (9) was of the distributed to amount the SEZ mentioned Unit/Developer at column No. (8) (Claimed as No. Date refund) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Total Amount *Certified copies of documents are enclosed 2. (i) The turnover of the authorised operation of the SEZ Unit/Developer in the previous financial year:________________________; (ii) Turnover of the DTA operations in the previous financial year:____________ 3. I/We Declare that- (i) information given in this application for refund is true, correct and complete in every respect and that I am authorised to sign this application for refund of service tax; (ii) the specified services, as approved by the Approval Committee of SEZ, on which exemption/refund is claimed are actually used for the authorised operations in SEZ; (iii) we have paid the service tax amount along with the cesses, being claimed as refund vide this application, to the service provider; (iv) refund of service tax has not been claimed or received earlier, on the basis of above documents/information; (v) we have not taken any CENVAT credit under the CENVAT Credit Rules, 2004 of the amount being claimed as refund; (vi) proper account of receipt and use of the specified services on which exemption/refund is claimed, for the authorised operations in the SEZ, is maintained and the same shall be produced to the officer sanctioning refund, on demand. Signature and name (of proprietor/managing partner/ person authorised by managing director of the SEZ Unit/Developer) with complete address, telephone and e-mail. Date: Place:

Provision for leave encashment is an ascertained liability, not to be added back for MAT computation

IT: Since provision made towards leave encashment of employees was in respect of ascertained and definite liability, same would not be added while computing book profit for purpose of levy of MAT under section 115JB

Providers of services to clients abroad must pay service tax

Can a manufacturer sell/remove some of his inputs "as such" after adding a margin, bypassing the pro-rata excise duties? Will the answer differ if the material is removed to a related party engaged in the same line of manufacture?

As per Rule 3(5) of the Cenvat Credit Rules, 2004, when inputs on which Cenvat Credit has been taken are removed as such from the factory, you must pay an amount equal to the Credit availed in respect of such inputs and such removal must be made under cover of a Central Excise invoice. But such payment is not necessary where any inputs are removed for providing free warranty for final products. The situation is the same when you remove the inputs "as such" to a related party.

We are a manufacturer-exporter having an export obligation against capital goods imported under the EPCG licence. When we took the EPCG licence, we mentioned HS code of 100 per cent cotton yarns as the export product, as we wanted to manufacture and export that product. However, after setting up the plant, we manufactured cotton-based blended yarn which has a different HS code using the same machines. So, we applied to DGFT and our licence was amended to include cotton-based blended yarns also, but DGFT had delayed the amendment. In the intervening period, the Customs allowed us to export cotton-based blended yarn only if we did not mention the EPCG licence number on the shipping bill. Can we now approach Customs/DGFT to consider such exports towards meeting the EPCG obligation?

You may approach the EPCG Committee at the DGFT headquarters with the facts of the case and suitable evidence. I am hopeful that the committee will consider your case favourably.

We have supplied certain goods to a World Bank-aided project on payment of excise duty. Are we eligible for getting back the excise duty from DGFT?

Supplies to World Bank-funded projects are eligible for deemed export benefits if the supply is against International Competitive Bidding (ICB). For all supplies against ICB, refund of terminal excise duty is not available [Para 8.3 (c) of FTP]. You may avail of excise duty exemption available at S.No.336 of notification 12/2012-CE dated 17.3.2013, or under notification 108/95-CE dated 28.8.1995.

We provide engineering services to a firm in the US. We asked an engineer based in the US to interact with our customer for certain analysis and to submit a report to the customer. Are we required to pay service tax on the payment that we make to the engineer, even though his service is provided in the US?

Reading Rule 2(f) and Rule 9(c) of Place of Provision of Services Rules, 2012, the engineer is an 'intermediary' who facilitates provision of a service (the 'main' service) by you (the service provider) to your customer (the service reliever) and in such cases, your location is the place of provision of services. The engineer provides service to you and so, you have to discharge your service tax liability, under the reverse charge mechanism.

Sleuths make first arrest of service tax defaulter

The first arrest of a service tax defaulter in the country has been made after government got the powers recently to crack the whip on evaders.

A courier company owner was arrested for allegedly evading service tax of about Rs 70 lakh in the first such case after Finance Minister P Chidambaram made applicable provisions of Criminal Procedure Code (CrPC) to arrest such offenders.

Sudip Das, proprietor of a courier company in Kolkata, was arrested by service tax officials last week, official sources said today.

Das, who runs a courier agency M/s Blue Bird, collected service tax from various companies to the tune of about Rs 67 lakh but allegedly did not deposit the collected tax to the exchequer, a statement issued by Commissioner of Service Tax Kolkata said.

As evasion of service tax of Rs 50 lakh and above has now been made a cognizable offence, 48-year-old Das was arrested on Friday last and produced before a court in Kolkata. "The court has ordered 14 days judicial remand," it said.

Phone calls made by PTI to the company did not yield any response.

The Finance Minister has proposed provisions for arrest of service tax defaulters in Section 91 of Finance Bill 2013.

The Section provides power to arrest a person for non-payment of collected service tax, by an officer not below the rank of Superintendent of Central Excise.

The officials got the power to arrest a defaulter after the passage of the Finance Bill on May 10.

This is for the first time that service tax rules have been amended to attract the Criminal Procedure Code (CrPC) in line with customs and central excise. Earlier, the officials did not have any power to arrest a person for service tax evasion.

An offender is punishable with imprisonment of upto seven years in case of amount of service tax evasion is Rs 50 lakh and more.

Excise duty to be included in closing stock only if it is included in opening stock

IT: Value of excise duty can be included in closing stock, only if same is also included in opening stock

Universal Postal Services by Department of Post aren't liable to service tax

ST/ECJ : Basic/Universal mail services provided by Department of Posts are not liable to service tax; however, specialized mail services like express parcel post, provided by government or private operators are liable to service tax