Penalty u/s 273 levied on assessee on its failure to furnish return without making any explanation b

IT : For failure to discharge statutory obligation to file return and to appear or offer explanation before authorities therefor, penalty under section 273 was to be levied

Tribunal couldn’t adjudicate upon merits of case if ST demand was found time barred

Service Tax : If demand is found time barred, there is no jurisdiction with Tribunal to enter upon merits of dispute and pass order on merit

Charitable institutions enjoying I-T exemption not liable to pay FAR charges to DDA on land allotted

Charitable Institutions: No additional FAR charges to be recovered from Educational Societies and Health Care as also Social Welfare societies having Income -tax exemption

TP adjustment in respect of assignment fees deleted by ITAT in view of its earlier decision

IT/ILT : Where in transfer pricing proceedings, TPO made addition to assessee's ALP in respect of assignment fee, in absence of any contrary material brought on record, following order passed by Tribunal in assessee's own case relating to earlier assessment year, impugned addition was to be deleted in assessment year in question as well

India To Raise Import Duty On Sugar, Promote Exports

India will raise its import duty on sugar to 40 percent from 15 percent, as the government tries to revive business at mills that owe farmers around $1.84 billion, the food minister said on Monday.

The climb in import duty will make overseas purchases nearly unviable for refiners in the world's biggest consumer of the sweetener, hitting shipments from suppliers such as Brazil, Thailand and Pakistan.

"We have reached a consensus to raise the import duty to 40 percent," Ram Vilas Paswan said after meeting senior government officials.

Local sugar prices NSMc1, which had been stifled by rising stockpiles, jumped 1.5 percent following the announcement and are likely to rise further if monsoon rains stay subdued as expected in the next few weeks, dealers said.

Paswan also told reporters the subsidy on raw sugar exports would be extended until September. India increased the subsidy for raw sugar earlier this month to boost output and exports.

But large-scale exports are unlikely in the short term, as most of this year's raw sugar output has already been shipped.

India is likely to export more than 2 million tonnes of sugar in 2014/15 as the top consumer is set to produce a surplus of the sweetener for the fifth straight year despite chances of reduced rainfall, a commodities executive said earlier this month.

The government has also decided to raise the mandatory level for blending ethanol in gasoline to 10 percent from 5 percent, Paswan said.

Trying to emulate the success of Brazil's booming biofuel industry, India launched its ambitious ethanol blending programme in 2006, but disagreements between sugar mills and oil companies over pricing stymied progress.

New Delhi is now trying to promote ethanol blending that could help it in reducing its current account deficit and also boost mills' earnings. Indian mills produce ethanol from molasses, a byproduct of sugar production.

The government is also considering extending the duration of repayments of interest free loans made to mills against excise duty to five years from three years, Paswan said.

Shares of sugar makers such as Bajaj Hindusthan Ltd (BJHN.NS) Shree Renuka Sugars (SRES.NS) Balrampur Chini Mills (BACH.NS) and Dhampur Sugar Mills (DAMS.NS) jumped more than 10 percent following the government announcement in a weak Mumbai market.

Source:- in.reuters.com

India’S Tax Administration Reform Commission (Tarc) Releases First Report

India’s Tax Administration Reform Commission (TARC) has submitted its first report to Finance Minister Jaitley suggesting a variety of changes to India’s tax administration framework.

Constituted in August 2013 under the leadership of economist Dr. Parthasarathi Shome, the TARC is charged with identifying key areas for improvement in India’s tax system. In its first report released last month, the commission suggested merging the Central Board of Direct Taxes (CBDT) with the Central Board of Excise and Customs (CBEC), broadening India’s use of the Permanent Account Number (PAN) system, improving services to taxpayers and ending retrospective taxation, among other measures.

“The TARC recommends that the two boards [CBDT and CBEC] must embark on selective convergence immediately to achieve better tax governance and, in the next five years, move towards a unified management structure with a common board for both direct and indirect taxes, called the Central Board of Direct and Indirect Taxes. The tax administration needs to have greater functional and financial autonomy and independence from governmental structures, given their special needs. The post of revenue secretary should be abolished [and] the present functions of the Department of Revenue should be allocated to the two boards [the CBDT and CBEC],” the report reads.

In addition to suggesting structural changes, the report recommends the tax administration adopt a more “customer focused” modus operandi – partly in response to increased complaints in recent years regarding the perceived rude and arbitrary behavior of tax officials.

“The prevailing treatment of the taxpayer by the tax administration requires much to be improved in reflection of global practice. Customer focus reform therefore is the first need. Officers and staff at all levels of tax administration should be trained for customer orientation. Further, for people posted in this vertical, the training in customer focus need to be more specialized and intensive. This training should be appropriate to the areas in which such officers are deployed such as customer relationship, measurement of customer satisfaction [and] taxpayer education. In redressing taxpayer grievances, the decision of the Ombudsman should be binding on tax officers,” the report recommends.

Along the same lines of recommending the administration enhance its treatment of taxpayers, the report explicitly identifies retrospective taxation as an issue requiring immediate attention and amelioration.

“The lack of accountability in the system is represented by infructuous demands raised by the tax administration with impunity as well as massive escalation, non-resolution and non-recovery of such demands by global standards. Getting a handle on dispute management is crucial for retrieving stakeholder confidence and for saving much needed staff and financial resources of the tax administration,” the report recommends.

“For clarity in law and procedures, a process based on best practices should be followed. Retrospective amendment should be avoided as a principle [and the] fundamental approach should be collaborative and solution oriented,” it continues.

The TARC’s explicit rebuke of India’s retrospective tax policies follows strong rhetoric from Ravi Shankar Prasad, Minister for Telecommunications, Law and Information Technology, on the issue earlier this month.

With several multi-million dollar tax disputes over retroactive taxation currently in limbo between the Indian government and Vodafone, Nokia, Royal Dutch Shell, AT&T and General Electric (among others), modifying India’s existing tax law – which currently lacks a provision for resolving tax disputes through negotiation – has been cited as a priority for Modi’s administration.

“Both the boards must immediately launch a special drive for review and liquidation of cases currently clogging the system by setting up dedicated task forces for that purpose. The review and liquidation should be completed within one year and the objective should be to decide all cases pending in departmental channels for longer than a year as on the start date of the action plan,” the TARC recommends.

While Minister Jaitley’s official response to the TARC recommendations has yet to be made public, foreign investors are hopeful a number of the report’s key points – especially those related to discontinuing retrospective taxation and enhancing customer service – will ultimately find their way into official government policy.

Source:- india-briefing.com

Frequent dealing in shares and earning of meagre dividend bring resultant gains in realm of business

IT: Where assessee was selling shares very frequently, volume and magnitude was very high and he earned only a meagre amount of dividend, income arising from sales of shares was assessable as business income

SC: By product isn’t a ‘waste’, it’s not exempt under excise notification even if final product is e

Central Excise : Soap stock/fatty acid, waxes and gums, etc. arising in course of refining of oil are not waste but are by-products as they are 'valuable'; hence, they are not exempt under Notification No. 89/95-CE, even if main product being oil is exempt

Non-filing of return by employees creates doubts; HC disallows commission paid to employees by emplo

IT : Where assessee claimed deduction on account of payment of huge commission to employees for boosting up sales but it was found that payment was made to an individual, whose role was not clear, claim needed disallowance

HC postpones hearing as Third member appointed by President of Tribunal had already heard the matter

Excise & Customs : Where President of Tribunal had appointed Member (J) who heard matter earlier as Third Member to hear difference of opinion as well, High Court directed deferment of hearing

No registration to a trust if its financing activities weren’t carried out for furtherance of its ob

IT : Principal activities of metropolitan development authority are to be ascertained before denying it registration under section 12A on account of financing and rental activity

SAT upheld penalty on appellant as he was manipulating price of Cos. through off market trade

CL : Where appellant manipulated price of a particular scrip by entering into off market transactions and carrying out large number of reverse trades which were fictitious in nature, it violated provisions of regulation 4(1) and 4(2)(e) of PFUTP Regulations, 2003 and, thus, penalty order passed by authorities below was to be confirmed

Assessee is entitled to obtain benefit of concessional rate of tax even on basis of duplicate part o

CST & VAT : Where assessee carried out some inter-State sale against 'C' form and to obtain benefit of concessional rate of tax filed duplicate part of 'C' form, assessee was entitled to benefit of concessional rate of tax, though it did not file original part of 'C' form