IT : For claiming deduction under section 80-IB housing project developer need not be owner of land; limitation of commercial area applies only to projects initiated after 1-4-2005
Monday, 7 October 2013
ITAT slams revenue for invoking sec. 194C on an assessee who was receiving money rather than on paye
IT : Where assessee-corporation only licenced society to ply city buses for payment per kilometer, no tax was to be deducted as assessee was receiving and not paying anything towards terms of agreement
No reassessment on excess recovery of reimbursement if details were already given in original assess
IT: Where excess recovery of reimbursement of expenses was already shown as income by assessee and details of such recovery were also produced in original assessment, reassessment proceeding to tax said amount was invalid
GOVERNMENT PLANS TO SHIFT TAXATION FROM DIRECT TO INDIRECT
On 1 October, the Finance Ministry formally submitted to the European Commission an Economic Partnership Programme (EPP), together with a Report on Effective Action, which outline the Government’s plan to close 2013 with a general government deficit below 3%.
In its report, the government speaks of plans to continue shifting taxation from direct to indirect over the medium term.
The report says that further to the revisions in the income tax regime in recent years, the 2013 Budget provided for the widening of the income tax bands for single and joint tax computations, and for parents supporting minors who are not gainfully employed. However, this will be implemented gradually in a manner that will limit the expansionary impact on public finances which will amount to 0.17 per cent of GDP in 2014.
For the period 2013 to 2016, the gradual losses from the revision in the income tax regime affecting direct taxation will be offset by similar gradual revisions in indirect taxation planned in the context of the budgetary exercise for the upcoming year. Moreover, revisions to the VAT legislation are currently ongoing, the report says. These will empower the minister responsible for finance to revise as necessary the penalties and interest payable on taxation due in order to increase tax compliance and ease the recovery of amounts due.
The Economic Partnership Programme (EPP) is divided in two main chapters. The first chapter presents the Government’s key policy planks which represent the crux of the Government’s fiscal and economic strategy and which also correspond to the Country Specific Recommendations (CSRs).
Furthermore, the fiscal framework underpinning the overall strategy is laid forward. This fiscal framework will ensure that Malta moves towards fiscal consolidation and achieves fiscal sustainability. The second chapter lays forward the necessary measures and reforms taken by the Malta Government in all sectors of the economy to ensure that Malta will exit the excessive deficit procedure permanently.
The main economic and fiscal measures proposed include: the diversification of energy sources and the restructuring of the energy corporation (Enemalta); the restructuring of Air Malta; the Pension reform process including the proposed introduction of the third pillar pensions; reforms underway in the health sector; further investment in education; as well as measures to reduce the poverty trap and therefore encourage people to get into employment rather than stay dependent on social benefits.
Other important measures included under the EPP are measures to increase competitiveness through diversification, through incentives and programmes aimed at SMEs and other businesses and through various other reforms, including the holistic Justice reform.
The Report on Effective Action focuses on providing a quantitative analysis on how the Government will reduce the deficit-to-GDP ratio below the 3% threshold.
Filing tax returns: Will projecting it as a status symbol nudge people to pay more?
In what is just the latest bout of a decades-old carrot and stick approach, the tax department has launched a new campaign to get people to pay up taxes. This time, it's all about making people see the tax return as a status symbol.
To this end, minister of state for finance JD Seelam is planning to visit all the 35 cities that house zonal tax offices in a bid to bridge the gap between taxmen and big taxpayers.
Seelam has already visited cities such as Hyderabad, Ahmedabad, Bhopal and Jaipur. "We would like to create a non-adversarial tax environment. The trust deficit between taxmen and industry needs to be removed. Our target is to make people feel that paying tax is a status symbol. That should increase our collection," he says. But will this approach work?
Tax Returns are the New Black
As economic turbulence continues, finance ministry officials are not quite sure whether the tax authorities will meet the tax revenue target of Rs 12.35 lakh crore this year, as was estimated in the Budget. As far as direct taxes go, till September 17, for which data is available, net direct tax collection was up 12.7% to Rs 2.38 lakh crore, triggered mainly by a 21% increase in the personal tax component. But the concern is with corporate taxes, which is up a mere 8% from a year earlier.
A fifth of total tax revenues is from income taxes while corporate taxes make up 34%. The remainder is from indirect taxes such as excise and customs duties. However, the government raises the bulk of its tax revenues from a very small proportion of tax payers. This has always been the case. As of 2011-12, for instance (see Taxing Times), just 1.3% of tax payers, who earned Rs 20 lakh or more, accounted for around 63% of the income taxes collected.
Similarly, while a few lakh companies are registered in India, 1,746 companies with a gross profit of above Rs 50 crore accounted for over three of every four rupees of corporate tax collected in 2011-12.
In a now oft-quoted statement, finance minister P Chidambaram pointed out in his Budget speech earlier this year that there are only 42,800 individuals in the records of the tax department who have a declared income for tax purposes of over Rs 1 crore.
"The economic situation is not in my hands. But I am sure if we make tax administrators act more as facilitators than regulators, tax compliance will increase. Our effort will be to make tax payers feel proud when they pay tax," says Seelam.
In the past, the government has offered various incentives to get people to pay up. Businessmen and film actors have been felicitated for being highest taxpayers. Only two years ago, Cognizant Technology Solutions vice-chairman Lakshmi Narayanan was honoured as the top individual taxpayer in Tamil Nadu as a part of the I-T department's 150-year anniversary celebrations. In July this year, the Punjab government approved a new scheme to award top taxpayers both at state and district levels. The scheme initiated by the state excise and taxation department is aimed at increasing the collection of state tax, including value-added tax (VAT). But there is a minimum threshold of tax payment to qualify for such awards. For example, a rice sheller will qualify for the honour only if he pays at least Rs 2 crore as tax. Similarly, for mobile dealers, the minimum qualification is a tax payment of Rs 25 crore.
In the past, the government has also announced numerous tax amnesty schemes, with mixed success. For instance, the Voluntary Disclosure of Income Scheme was launched in the late '90s with much fanfare under P Chidambaram as finance minister.
"If the Centre is gearing up for a campaign to honour top tax payers, it's a welcome move. But the problem with any government department is that its left hand does not know what its right hand is doing. You shouldn't be surprised if one wing awards a taxpayer and the other raids him. There is a precedence to that," says Sudhir Chandra, former chairman of Central Board of Direct Taxes (CBDT).
Carrot, But also Stick
Another former CBDT chairman PK Misra says recognizing honest tax payers can only be a small component in the campaign to raise more tax. Coercion needs to continue as the core strategy alongside persuasion. "In Western countries 'I pay tax, I buy civilisation' has worked. It won't work in India. Here nobody wants to part with the money that reaches one's pocket," he says.
An income-tax officer posted in Gujarat, one of India's richer states, agrees. "We have to balance both tactics," he says. "Smaller taxpayers, for instance, are usually in a frame of mind where they will pay tax but don't want to face the procedural hassles. In their case, we should make all efforts to ensure that the process is simplified."
"But there is also a class of hardened tax payers who absolutely do not want to pay tax," he adds. "They use chartered accountants (CAs) and tax lawyers to hide money, and it is important to tackle such people through enforcement, searches etc."
Be aware of your rights as an investor: Study all offer documents carefully
To have a smooth financial journey as an investor , you have to fulfill certain duties and, under the laws that regulate the mutual fund industry, you also enjoy some rights.
An ideal investor is one who is aware of the rights, and disciplined and serious about his/her duties too.
Some of the important rights that you enjoy as an MF investor include the freedom to go through the offer document of the scheme that you intend to invest in, email/SMS alerts relating to your investments, receiving annual reports, periodic updates and other important communications from the fund house including any proposed change in a scheme's attributes.
You also enjoy the right to know how much commission the person who is advising you to invest is getting from the fund house. Also, you can get your complaints, if any, redressed through proper channels and to your complete satisfaction.
What you're entitled to:
Offer document:
An offer to invest in an MF scheme contains the scheme information document (SID) and a statement of additional information (SAI). In addition, you can also go through the key information memorandum (KIM), which gives important information about the scheme you intend to invest in as well as the fund house.
Colour coding:
This is a new tool aimed at helping investors choose between MF schemes which are least risky (Blue dot), moderately risky (yellow dot) and highly risky (brown dot). Here, each fund house labels every scheme with the appropriate code to make it easier for you to select the one best suited to your risk profile.
Email/SMS alerts:
Within five working days of your investing in a scheme — either for the first time or as a continuing investor — you should receive an email alert or an SMS about your investments.
Fund statements, periodic updates and annual reports:
As an investor in a scheme, you should receive periodic updates from the fund house about the scheme as well as the fund house, its annual report and updates as and when issued.
Consolidated statements:
Relatively a new initiative, all MF investors now get a consolidated monthly statement of all their fund-related transactions in each scheme where he/she has investments, across all types of schemes (equity, debt, liquid, gold ETF) and across all fund houses. However, if there is no transaction during a particular month(s), you will receive a half-yearly statement.
Assessee entitled to interest as delay in grant of Cenvat credit attributable to Department, says HC
ST: If department unjustly withholds rightfully earned Cenvat credit, assessee is entitled to interest and department cannot cite absence of any specific provision
Software license for one year doesn't confer any enduring benefit; licensing fee held as revenue exp
IT : Software license for one year does not confer any enduring benefit; licensing fee held as revenue expenditure
India’S Sham Fuel Pricing Regime Boosts Subsidies
The biggest component of India's import is crude oil; around 80% of our crude is imported. The high international crude price, around $110 per barrel, coupled with a weaker rupee, is amplifying India's current account deficit.
India spent a staggering $169.25 billion to import crude oil in 2012-13 and has already spent $47.13 billion on oil imports in first four months of this fiscal year.
Unfortunately, India's pricing mechanism of fuels is also faulty. India is a net importer of crude oil but a net exporter of petroleum products, thanks to excess refining capacity. The price of fuels in India is governed by trade parity pricing (TPP), comprising of 80% import-parity price (IPP) and 20% export-parity price (XPP) at the refinery gate.
So, though the products are produced in India, they are priced as if we are importing these products by benchmarking them with the price of the products prevailing in the Arabian Gulf. On top of that, some imaginary costs like trade premium and ocean freight charges are also levied in dollar terms.
IPP price is then achieved converting it to Indian currency. The non-existent price build-up does not stop here. Charges like customs duty and import charges are further added to the IPP price. In India, the retail price of petroleum products, other than petrol and aviation turbine fuel (ATF), is administered and is much lower than TPP.
The gap between the TPP of a petroproduct like diesel at the refinery gate and its administered price is termed as under-recoveries or losses. Government compensates three state-run oil marketing companies (OMCs) for their losses. Is under-recovery really a loss?
A closer look at the price build-up of diesel in Delhi — as reported on Indian Oil Corporation's website — reveals that the so-called underrecoveries of OMCs are notional and exaggerated due to the inclusion of non-existent costs like trade premium, ocean freight charges, customs duty and import charges in calculating TPP.
Adepreciating rupee further aggravates the loss figures because of unnecessary benchmarking of petroproduct price with foreign currencies. Current under-recovery on diesel reaches Rs 12.12 per litre from Rs 10.22 per litre on August 16, 2013.
The scheme of under-recovery also acts as a barrier to private players from entering the market because, unlike the state-owned OMCs, the government won't bear the compensation burden for them. Private players should be eligible for the same subsidies as public companies. This will encourage competition and break down the apparent cartelisation among OMCs.
The finance minister has said that the government would leave no stone unturned to contain the current account deficit at about $70 billion, or 3.8% of GDP, from a record high of 4.8% last year.
The government has imposed several restrictions on foreign exchange outflows and gold imports to arrest rupee depreciation but ignored a low hanging fruit: the rectification of faulty pricing mechanism of petroleum products. Because India is a net exporter of petroleum products, the appropriate cost price for the oil retailer at the refinery gate should be XPP, the price that oil companies would realise on export of a petroleum product.
By construct, XPP is lower than the TPP and, as on August 16, 2013, the divergence was Rs 1.86 per litre for diesel, which must have broadened by further depreciation. Redefining under-recovery with respect to XPP will isolate the price of regulated petroleum products from the exchange rate.
It will significantly reduce the country's subsidy burden and, according to a rough estimate by the finance ministry, a shift to XPP would have cut the subsidy on diesel by Rs 14,372 crore in 2012-13. Additionally, Rs 2,245 crore and Rs 1,001 crore would have been saved on LPG and kerosene respectively.
Private participation should further reduce XPP and, hence, under-recovery figures, as private players are better than their state-run counterparts in refining in terms of superior technologies, hedging strategies, high-sea deals in crude procurement and strategic coastal locations.
Source:- economictimes.indiatimes.com
Wsa Slashes India's Steel Demand Projection In 2013 To 3.4%
07-Oct-2013
World Steel Association (WSA) has slashed its projection for India's steel demand growth to 3.4 per cent for the current year from the earlier forecast of 5.9 per cent.
"In India, steel demand is expected to grow by 3.4 per cent to 74 million tonnes (MT) in 2013 following 2.6 per cent growth in 2012 as high inflation and structural problems are constraining steel using sectors' activities," the industry association said in its short-range outlook relased today.
WSA had in April projected India's steel demand growth at 5.9 per cent for 2013, pinning hopes on monetary easing and investment activities.
The demand growth projection for the next year has also been reduced to 5.6 per cent from seven per cent projected earlier.
"In 2014, steel demand is expected to grow by 5.6 per cent helped by accelerated attempts to implement structural reforms," it added.
However, it has increased the projected global steel use to 3.1 per cent to 1,475 MT for 2013. In 2014, it forecast that world steel demand growth rate to be even higher at 3.3 per cent to reach at 1,523 MT. Global steel use grew by two per cent in 2012.
The global demand growth would be fuelled by China, where demand for the country was forecast to grow by six per cent.
"Thus, despite steel demand growing by only 0.7 per cent in the rest of the world, total global steel demand will grow by 3.1 per cent," WSA said.
In a separate statement, WSA said it has appointed POSCO Chairman and CEO Joon-Yang Chung as its new Chairman for a year.
Source:- economictimes.indiatimes.com
Assocham Suggests 50% Hike In Msme Investment Limit
07-Oct-2013
The Associated Chambers of Commerce and Industry of India (Assocham) has recommended that the definition of micro, small and medium enterprises (MSMEs) under the MSMED Act 2006 should be revised. This is one of eight major recommendations by the chamber to help the MSME sector.
In a report titled Indian MSMEs: Current Scenario and the Way Forward, which Assocham recently submitted to Finance Minister P Chidambaram, the chamber said that keeping in view the definitions of MSMEs in other countries and inflation in India in the last few years, the capital investment limits on the basis of which MSMEs are defined are too low. They should therefore be increased by at least 50 per cent.
Moreover, the number of employees should also be incorporated in the definition, as in other countries, it said. For sustained growth, it is important for MSMEs across the country not only to deal with big corporates and government companies, but also to interact among themselves to identify new business opportunities, said Assocham.
The other major recommendations pertain to availability and cost of credit, marketing support, modification in labour laws, infrastructure, incentives and expanded tax benefits, constitution of a standing committee of secretaries to resolve policy and implementation-related issues, and greater and coordination at the ground level between Customs and DGFT offices.
Assocham feels that the current global economic scenario has thrown up both opportunities and challenges to the Indian MSME sector. On the one hand, opportunities have opened up enhance productivity and look at new national and international markets.
On the other, these opportunities compel MSMEs to upgrade the competencies that will be needed to withstand competition, since obsolescence is rapid, with new products being launched at an incredible pace and being available worldwide in a short time.
The chamber said that if its recommendations are implemented, the result will be a big boost for the MSME sector.
Source:- business-standard.com
End Port, Rail Coal Mismatch To Gain India Prize – Webber Wentzel
07-Oct-2013
The participants of South Africa’s coal value chain needed to put an end to the misalignment of port over capacity and rail under capacity, Webber Wentzel mining partner Manus Booysen said on Monday.
Booysen, just back from a major McCloskey coal conference in New Delhi, called for coal value chain participants to meet urgently at the highest level to take full advantage of the colossal opportunity that was rapidly building up for the export of additional coal to an energy-hungry India.
Booysen told Mining Weekly Online in a video interview that the reward for South Africa of such collaboration between the government, Transnet and the coal mining industry would be significant job creation, a boost for black economic empowerment (BEE) and an injection of additional foreign exchange into the country.
“We need collaboration, cooperation and realistic understanding of the coal industry and the marketing opportunities and we all need to work towards that common goal and to achieve that in the best possible way,” Booysen told Mining Weekly Online (see video attached).
He said India would soon be needing 950-million tons of coal a year to bring electricity to its vast population and it could only source 750-million tons of it locally.
The 200-million-ton shortfall gave South Africa an opportunity as it had become the preferred supplier of energy coal to the sub continent for geographical and coal quality reasons.
In addition, many Indian companies were considering investment or had already invested in coal mining in South Africa, with an eye on rising Indian demand.
The only kink in South Africa’s armour was rail capacity, which, as prospective Indian investors had earlier pointed out from public forums, should not be an impediment in a modern economy.
Transnet, which recently attained the equivalent of what would amount to 72-million tons of coal exportation on a yearly basis, had the great advantage of supplying a port – the Richards Bay Coal Terminal (RBCT) – that already had considerable spare capacity in being able to export at a rate of 91-million tons a year.
Just closing that gap of nearly 20-million extra tons of coal a year would be a vital source of additional economic activity for South Africa, without the need for capital outlay, and there was a long term opportunity to do much more, not only in South Africa, but also Southern Africa, taking in landlocked but coal-rich Botswana.
South Africa, Booysen believed, was in a better position to supply India than Indonesia, which had coal quality problems, and Australia, which was under production cost pressure.
But while South Africa had coal production capacity and port capacity, rail remained the limiting factor.
“We need to expand that,” Booysen urged, adding that it would give expression to the economic objective of the Mineral and Petroleum Resources Development Act to open up opportunities for historically disadvantaged South Africans to gain access to the exploitation of South Africa’s natural resources.
On the impediments in the way, Booysen told Mining Weekly Online that there was an unfortuante element of misalignment between the State-owned Transnet and the privately owned RBCT that needed to be eliminated.
“We understand that Transnet is now proposing to have a portion of the increased RBCT capacity as unallocated with the intention that the unallocated capacity will be made available to BEE players in the mining industry and emerging miners.
“We believe there could be greater cooperation between Transnet and RBCT and the various coal producers to achieve the economic opportunities and also promote BEE in the mining industry,” Booysen added to Mining Weekly Online.
Source:- miningweekly.com
India's Sept Soymeal Exports Down 5.5 Pct On Month
07-Oct-2013
India's soymeal exports in September fell 5.5 percent from a month earlier to 173,381 tonnes, a leading trade body said, but shipments could rise as new crop starts rolling in from October.
Fresh harvests from this month will raise supplies of soybeans, helping Asia's leading soymeal exporter boost supplies to buyers such as Iran, Japan and Taiwan.
Soybeans are crushed to produce edible oils and animal feed.
Traders expect improved new season crop would cut local soybean prices and push up overseas sales of soymeal.
The average export price for soymeal was $510 per tonne in September against $520 in August, free on board, data from the Solvent Extractors' Association (SEA) showed on Monday.
Soymeal exports for the first half of this fiscal year from April rose 6.2 percent from a year ago to 873,481 tonnes, the data showed. India's total oilmeal exports rose 1.2 percent to 1.65 million tonnes during the period.
"The half-yearly imports rose mainly due to the weak value of Indian currency," said B.V. Mehta, SEA's executive director.
Weakness in the rupee, which is down about 12 percent against the dollar so far this year, is expected to support exports of the animal feed.
India exported $1.8 billion of oilmeal in the fiscal year that ended in March 2013, when its annual exports of oilmeal fell 14.3 percent to 4.8 million tonnes.
Mehta said Indian soymeal exports lost ground this year in Vietnam where local supplies increased, but overseas sales of the animal feed surged in Iran and Europe.
Iran, the biggest buyer of Indian soymeal since February, imported 518,178 tonnes in the first half of the current fiscal year, a 25 percent jump from a year ago period.
Iran is set to emerge as the biggest buyer of soymeal from India for a second straight year.
Iran's purchases of food items are excluded from Western sanctions aimed at halting its disputed nuclear programme.
Tehran finds it hard to pay for imports due to the sanctions but India, its second biggest oil client after China, pays in rupees and these can be used by Iran to buy commodities such as rice and soymeal.
Europe's soymeal imports from India rose to 138,904 tonnes in April-September from 300 tonnes a year ago.
India's total oilmeal exports in September dropped around 6 percent to 294,830 tonnes from the previous month. (Editing by Nidhi Verma and Keiron Henderson)
Source:- in.reuters.com
Cotton Yarn Exports Likely To Drop By 20% In The Current Fiscal
07-Oct-2013
Cotton yarn exports from India, which has touched 120 million kg per month, is likely to drop by 20% in the current fiscal following the UPA government's sudden decision to remove the exports benefits under focus market scheme (FMS) on cotton yarn. FMS is aimed at developing new markets across the globe for Indian products.
Till date, Latin America and Africa were the focused markets for Indian cotton yarn exports. The move will also affect the spinning mills in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Punjab and Haryana as this will create an excess capacity of yarn in the country and affect the trade in the second half of current fiscal. Talking to ET, T Rajkumar, chairman, Southern India Mills' Association (SIMA) said "We produce 330 million kg of yarn per month. Of this 200 million kg is used in the domestic market and rest is exported. China and Bangladesh accounts for 65% of the country's total yarn exports. But exports to new markets that we were developing for cotton yarn will take a beating due to the removal of FMS. Nearly 20% of the exported volume goes to these focused markets." Moreover, competitors of Indian yarns will take advantage of the current situation and will increase their exposure in these emerging markets.
SP Oswal, chairman, Vardhman Mills said "We will have to face stiff competition from Indonesia, Thailand and Turkey in the world market." "Last year, there was good demand of coarse cotton yarn from China which earned good revenues for the textile sector. This year we are not sure whether to get such demand from China," said Rajkumar. He also added that cotton yarn prices have not kept pace with cotton prices.
In the first week of October last year, price of a candy of cotton (Sankar 6 variety) was 32,900 and the price of a kg of cotton yarn was 228. But this year cotton prices have climbed to 48,500 a candy and the cotton yarn prices is hovering around 256 a kg.
Prem Malik, chairman, Confederation of Indian Textile Industry (CITI) said "The production of cotton yarn has gone up, but the domestic demand has not kept pace with the increasing production. There has been a decline in cotton yarn prices in the domestic market in recent weeks." India is the most competitive yarn producer in the world at present and therefore there is increasing export opportunities opening up for our cotton yarn, Malik said.
Referring to the urgent need to bridge the Capital Account Deficit (CAD), the CITI chairman said that textile products, including cotton yarn, have increasing demand in overseas markets and it will be logical to encourage export of cotton yarn from the point of view of bridging the CAD, in addition to creating additional employment.
Source:- articles.economictimes.indiatimes.com
Provisions of SICA prevail over IT Act; Scheme by BIFR to waive off tax liability of co. to be wound
SICA: Specific reference to Foreign Exchange Regulation Act and Urban Land Ceiling Act in section 32(1) and to section 72A of Income-tax Act, mean that those provisions will stand excluded from rigors of section 32 of SICA
To ease Foreign Portfolio investor norms SEBI suggests new investor class for FIIs, their sub-accoun
SEBI : SEBI Board Meeting - SEBI (Foreign Portfolio Investors) Regulations, 2013
Services provided by assessee for brand building of its foreign AE deemed as 'International Transact
IT/ILT: Where assessee performed greater servicer than a normal distributor, by performing functions of advertisement, it contributed to brand building of foreign AE, resulting in an international transaction
Telephones installed at the officers' residence get input service credit to the employer
ST : Where telephones installed at residences of officials were integrally connected with business of manufacture of final product of assessee, service tax paid thereon was eligible for input service credit
Receipts on transfer of building in SEZ to AEs eligible for sec. 80-IAB relief as it was an authoriz
IT: Where assessee had transferred a building constructed by it in Special Economic Zone on long-term lease to an associate concern, which was authorized activity, assessee was eligible for deduction under section 80-IAB in respect of profit derived from transfer of said building
Time-limit for project completion for sec. 80-IB(10) benefits reckoned from fresh approval taken by
IT: Time-limit for project completion for section 80-IB(10) benefits reckoned from fresh approval taken by successor of land
Service Tax Circular No.173/8/2013-ST dated 07-10-2013
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tax Research Unit
Circular No.173/8/2013 – ST
North Block
New Delhi, 7th October, 2013
To
Chief Commissioners of Central Excise and Customs (All),
Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit),
Commissioners of Service Tax (All)
Commissioners of Central Excise (All),
Commissioners of Central Excise and Customs (All).
Madam/Sir,
Subject: Restaurant Service- clarification -regarding
As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST . This has become operational on the 1st of April, 2013.
- In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows:
Doubts Clarifications 1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as ‘specified restaurant’) attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules. 2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax. 3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion.
- Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows.
Yours sincerely,
(S. Jayaprahasam)
Technical Officer, TRU
Tel: 011-2309 2037
F.No.334/3/2013-TRU
India's retirement savings, income index improves: Report
NEW DELHI: India's retirement savings and income system index has improved over the last year and the performance is likely to improve significantly as pension coverage of the unorganised sector increases, says a report.
According to the Melbourne Mercer Global Pension Index, India's overall value increased from 42.4 in 2012 to 43.3 in 2013, out of 100. Of the 20 nations on the list, India is ranked at the 19th position.
However, India's score in the adequacy sub-index, which essentially measures how much income individuals are likely to have at retirement, improved from 37.4 in 2012 to 41.2 in 2013.
"It is heartening to see India's overall index improve in 2013," Mercer Retirement Business Leader Arvind Usretay said, adding that "the overall index value for India could significantly improve with increased pension coverage of the unorganised sector".
The passage of the Pension Bill is a landmark step for India towards ensuring this kind of coverage through the National Pension System (NPS). NPS remains the 'true' pension option available to individuals apart from employer provided retirement schemes, he added.
In the overall list of 20 nations, India was ranked last but one. It was topped by Denmark, followed by the Netherlands and Australia in the second and third place respectively.
According to David Knox, Senior Partner at Mercer and author of the research "as countries grapple with rising life expectancies, increased government debt, uncertain economic conditions and a global shift to defined contribution plans, there are still many lessons to be learnt and new solutions to be found, particularly for the post-retirement years."
An index value between 35-50 indicates a system that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, the efficacy and sustainability are in doubt, the report said.
This year's Melbourne Mercer Global Pension Index covered 20 countries. The index measures the adequacy, sustainability and integrity of a country's pension system and is produced by Mercer and the Australian Centre for Financial Studies and is funded by the Victorian State Government.
As per the methodology adopted, each country is given a score between 0 and 100. The overall index value represents the weighted average of the three sub-indices - adequacy, sustainability and integrity.
FMV of a land not determinable on basis of guidelines meant for sub-registrar unless these are scien
IT : For computing capital gains under section 48, fair market value of property cannot be determined on basis of guideline value emanating from Sub-registrar's office unless it is scientifically arrived at
Creditors can apply for restoring name of co. within 20 years from date of publication in Official G
CL: Any creditor can make an appropriate application to company court before expiry of 20 years from publication in Official Gazette seeking restoration of name of company in register so that it can pursue its remedies which are available to it under law for recovery of amount from company whose name was struck off
Sum paid to prepone expiry of an agreement is related to business; allowable as revenue exp.
IT : Compensation paid by assessee for pre-closure of agreement to receive nitrogen gas would be allowable as revenue expenditure
Transactions with sole aim of getting tax benefits without any economic objective can't be held as '
ST/ECJ: Tax authorities cannot carry out inquiries to determine intention of taxable person in entering various transactions except in case of abusive practices; therefore, merely because a transaction was carried out with sole aim of obtaining a tax advantage, without any other economic objective, it cannot be regarded as sham
Extended period couldn't be invoked if issue was under litigation and department was aware of facts
ST: Where issue of levy of service tax was under litigation and even retrospective amendments had to be resorted to and matter was within knowledge of department, there was no fraud or suppression etc. on part of assessee with intent to evade taxes so as to warrant invocation of extended period of limitation
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