Most of the recommendations by the Standing
Committee on the DTC will be accepted, said Mukherjee. Last week, the FM said
that the proposed retrospective amendment of the income tax laws would not
override tax break treaties.

The Standing Committee recommended that the
General Anti-Avoidance Rules (GAAR) provisions be implemented, along with DTC,
in April 2013. Mukherjee said that the GAAR provisions would apply to income
generated from FY14 onwards.

He also added that any clarifications to the
amendments would not override India’s tax treaty. “Retrospective amendments to
the Income-tax Act will not override Double Taxation Avoidance Agreement (DTAA)
with 82 countries” said Mukherjee. It would impact those cases where the
transaction has been routed through low tax or no tax countries with who India
does not have a DTAA.

“The retrospective clarificatory amendments now
under the consideration of the Parliament will not be used to reopen any case
where assessment orders have already been finalized,” he added.

The government still has to fix a meeting with
Mauritius authorities to iron out the crumples in the exiting tax pact. The
government claims that Mauritius has so far not cooperated on the bilateral tax
pact change.

To promote further depth of the capital markets
through listing of companies, he proposes to extend the benefit of tax exemption
on long-term capital gains to the sale of unlisted securities in an initial
public offer. The FM has now provided a levy on the Securities Transaction Tax (STT)
at the rate of 0.2% on such sale of unlisted securities.

In order to augment long-term low cost funds from
abroad for the infrastructure sector, the Finance Bill also proposes a lower
rate of withholding tax of 5% for funding specific sectors through foreign
borrowings. To further facilitate access to such borrowings, Mukherjee has
proposed to extend the lower rate of withholding tax to all businesses. “This
lower rate of tax would also be available for funds raised through long-term
infrastructure bonds in addition to borrowing under a loan agreement.”

The Reserve Bank of India is formulating a scheme
for subsidiarisation of Indian branches of foreign banks to ring fence Indian
capital and Indian operations from economic shocks external to the Indian
economic scenario. To support this effort, the FM has proposed to provide tax
neutrality for such subsidiarisation.

The Finance Bill also proposed to withdraw the
provision for levy of TDS on transfer of immovable property. To curb the flow of
unaccounted money in the bullion and jewellery trade, the Finance Bill proposed
the collection of Tax At Source (TCS) by the seller at the rate of 1% for the
sale amount from the buyer for all cash transactions exceeding Rs 2 lakh.

Responding to the representations made by the
jewellery industry that this would cause undue hardship, he has raised the
threshold limit for TCS on cash purchases of jewellery from Rs 2 lakh to Rs 5
lakh. The threshold limit for TCS on cash purchase of bullion will be retained
at Rs 2 lakh. However, it has been clarified that bullion will not include any
coin or other article weighing 10 gm or less.

A related proposal was the imposition of central
excise duty on unbranded precious metal jewellery at the rate of 1%. In view of
the outpouring of sentiments both within and outside the House, the government
has decided to withdraw the levy on all precious metal jewellery, branded or
unbranded, with effect from March 17, 2012.

The House would recall that certain amendments
were proposed in the Customs and Central Excise Law in respect of the
classification of offences as cognizable and non-bailable. In response, he has
proposed the omission of this provision. In addition, only serious offences
under the customs law involving prohibited goods or duty evasion exceeding Rs 50
lakh, shall be cognizable. However, all these offences shall be bailable.

Taxation of services has undergone a paradigm
shift with the introduction of a Negative List. This initiative has been widely
welcomed. Some of the States, through the Empowered Committee of State Finance
Ministers have expressed their concerns. To address their concerns, he has made
changes in the definition of “service” which will exclude the activities
specified in the Constitution as “deemed sale of goods”.

The definition of “works contract” has also been
enlarged to include movable properties. Exemption for specified services
relating to agriculture in the Negative List has also been extended to
agricultural produce enlarging the scope of the entry. There are some other
minor changes in the definitions based on the feedbacks and suggestions that he
has received from various stakeholders and are specified in the revised draft.

Souce : http://www.moneycontrol.com

Custom Notification No
-43/ 2012-Cus., (N.T.), Dated: May 16, 2012

Cargo in Customs Areas (
Amendment) Regulations, 2012

In exercise of the powers
conferred by sub-section (2) of section 141 read with section 157 of the Customs
Act, 1962 (52 of 1962) , the Central Board of Excise and Customs hereby makes
the following regulations to amend the Handling of Cargo in Customs Areas
Regulations, 2009 , namely :-

1. (1) These regulations may be
called the Handling of Cargo in Customs Areas ( Amendment) Regulations, 2012.

(2) They shall come into force
on the date of their publication in the Official Gazette.

2. In the Handling of Cargo in
Customs Areas Regulations, 2009 , (hereinafter referred to as the said
regulations),-

(1) in regulation 6 of the said
regulations, in sub-regulation (1),-

(i) in clause (a), for the
words “proper officer”, the words “Inspector of Customs or Preventive Officer
or Examining Officer” shall be substituted;

(ii) in clause (f), for the
words “proper officer”, the words “Superintendent of Customs or Appraiser”
shall be substituted;

(iii) in clauses (g), (h) and
(k), for the words “proper officer”, the words “Deputy Commissioner or
Assistant Commissioner of Customs” shall be substituted;

(iv) in clause (l), for the
words “proper officer”, the words “Superintendent of Customs or Appraiser or
Inspector of Customs or Preventive officer or examining officer, as the case
may be” shall be substituted;

(2) in regulation 7 of the said
regulations, after sub-regulation (1), the following proviso shall be inserted,
namely:-

“Provided that no exemption shall
be granted in respect of any of the conditions referred to in regulation 5,
where the overall safety and security of the premises are likely to be affected
thereby.”.

[F. No.
450/55/2008-Cus.IV]

(Vikas)
Under Secretary to the Government of India

Note:
The principal Notification No. 26 / 2009 -Customs
(N.T.), dated the 17 th March, 2009, was published in the Gazette of India,
Extraordinary, Part II, Section 3, sub-section (i), dated the 17 th March, 2009
vide G.S.R.174 (E), dated the 17 th March, 2009 and was last amended by
notification No. 96/2010-Customs (N.T.),dated the 12 th November, 2010, vide
number G.S.R. 909 (E), dated the 12 th November, 2010.
 

POLICY CIRCULAR NO-64/(RE-2010)
/2009-14, Dated: May 16, 2012

Sub :- File applications for 58  SEZ ports codes – reg.

Director General (Systems) have accorded SEZ port codes to the following 58 SEZs
which have been uploaded on DGFT’s website:-

2. Applicants may file applications using these codes in DGFT server wherever
required under the provisions of Foreign Trade Policy 2009-14 / SEZ Act and
Rules.

3. This issues with the approval of the DGFT.

File No.01/02/31/AM-06/EDI

(Rajiv Arora)
Joint Director General of Foreign Trade

POLICY CIRCULAR NO-63/(RE-2010)/2009-14,
Dated: May 16, 2012

Subject:-
Amendment in the conditions and modalities for registration of contracts with
DGFT for export of sugar.

Policy
Circular No.
62(RE-2010)/2009-14 dated 14.05.2012 prescribed the conditions and
modalities for registration of contracts with DGFT for export of sugar in the
current sugar season (1 st October, 2011-30 th September, 2012) . 

2.   It has been decided to
modify certain provisions of the Policy Circular No. 62(RE-2010)/2009-14 dated
14.05.2012 as under:

(i) The application for issue
of RC can be for an amount upto a maximum
quantity of 25,000 MT (Twenty five thousand metric tons). Earlier
this limit was 10,000 MT per RC. [Please refer Para 3 of
Policy Circular No.
62(RE-2010)/2009-14 dated 14.05.2012].

(ii) In addition to export
against Letter of Credit (LC) and/or FIRC,
export would also be permitted against Cash Against Documents (CAD).
Exporters have to indicate type of instrument (LC/FIRC/CAD) while applying for
issue of RC.  [Please refer Sub- para (i) of Para 4 of Policy Circular No.
62(RE-2010)/2009-14 dated 14.05.2012].

(iii) Export against RC shall
be completed within a period of 60 days
from the date of issuance of such certificate. Earlier this was given
as 30 days. [ Please refer Para 5 of Policy Circular No. 62(RE-2010)/2009-14
dated 14.05.2012].

(iv) An applicant is at liberty
to seek split RCs for export through more than one port, within the overall
quantity limit of 25,000 MTs.

(v) Application for second and
subsequent RC can be submitted only on completion of at least 50% of export
against RC issued to the exporter (quantity permitted in the RC as a whole is
to be taken for calculation, not quantity split RC-wise).
Exporters have to submit the proof of such
exports. [Please refer Para 7 of Policy Circular No.
62(RE-2010)/2009-14 dated 14.05.2012].

3. Export against Release Order
issued prior to 14.05.2012 (date of issue of Notification No. 117) by the
Directorate of Sugar, Department of Food & PD will continue to be governed by
the terms and conditions of the relevant Release Order.            

4. There shall be no other
change.

5. This issues with the approval
of Director General of Foreign Trade.

F.No
01/91/180/879/AM08/Export Cell/Part

(Hardeep Singh)
Joint Director General of Foreign Trade

PUBLIC NOTICE NO. 112
(RE2010)/2009-2014 DATED: 15th May 2012

Subject: Areca nut (i.e. Betel
nut) under SIONs (including Leather SIONs), disallowing import thereof

(F.No.01/84/162/085/AM-12/DES-V

A P (DIR Series)
CIRCULAR
NO-127/RBI., Dated: May 15, 2012

Foreign
investment in NBFC Sector under the Foreign Direct Investment (FDI) Scheme –
Clarification

Attention of Authorised Dealers Category – I (AD Category – I) banks is invited
to A.P. (Dir Series) Circular No.121 dated May 8, 2012 .

2. The Reserve Bank of India has been receiving requests for clarifications as
to whether ‘operating leases’ would not be permissible in terms of para 3 of the
circular ibid.

3. It is clarified that the activity ‘leasing and finance’, which is one among
the eighteen NBFC activities wherein FDI up to 100 per cent is permitted under
the automatic route, subject to minimum capitalisation norms, covers only
‘financial leases’ and not ‘operating leases’, in so far as the NBFC sector is
concerned.

4. AD Category – I banks may bring the contents of the circular to the notice of
their customers/constituents concerned.

5. Necessary amendments to Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000 ( Notification
No. FEMA 20/2000-RB dated May 3, 2000 ) are being notified separately.

6. The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.

RBI/2011-12/562

(Rudra Narayan Kar)

Chief General Manager

Custom Notification No -42/2012 
(NT), Dated: May 15, 2012

Tariff value of Brass Scrap (all
grades) and Poppy seeds revised to 4362 and 3680 respectively- Gold and Silver
revised to 507 and 920 per 10 grams and per kilogram respectively

In exercise of the powers
conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of
1962), the Central Board of Excise & Customs, being satisfied that it is
necessary and expedient so to do, hereby makes the following amendment in the
notification of the Government of India in the Ministry of Finance (Department
of Revenue), No. 36/2001-Customs (N.T.), dated the 3 rd August, 2001, published
in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii),
vide number S. O. 748 (E), dated the 3 rd August, 2001, namely:-

In the said notification, for
TABLE-1 and TABLE-2, the following Tables shall be substituted namely:-

“TABLE-1

TABLE-2

[F. No. 467/01/2012-Cus.V Pt.I]  

(Abhinav Gupta)
Under Secretary to the Government of India

Note: – The
principal notification was published in the Gazette of India, Extraordinary,
Part-II, Section-3, Sub-section (ii), vide Notification No. 36/2001–Customs (N.T.),
dated the 3 rd August, 2001, vide number S. O. 748 (E), dated the 3 rd August,
2001 and was last amended vide
Notification No.
39/2012-Customs (N.T.), dated the 30 th April, 2012, published in the
Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide
number S. O. 943 (E) dated, the 30 th April, 2012.

May 14 2012  : Central
Excise has slapped an over Rs 65 crore duty evasion charge on country’s leading
automotive battery maker-Exide Industries Ltd. Of this, Rs 32.60 crore is duty
evasion and the rest is penalty. Significantly, during the financial year
2011-12, the company paid a total excise duty of Rs 563.64 crore.

Confirming the developments,
Exide officials said that there is no case of wilful duty evasion on the part of
Exide Industries. The case actually relates to a difference in opinion between
us and the Central Excise department over interpretation of what is a lead acid
storage battery, how it is packaged, sold and how it should be priced at the
retail level when it finally gets sold to the end user.
Exide Industries has already appealed before the Central Excise and Service Tax
Appellate tribunal under Section 35B of the Central Excise Act ’44.

The main contentions against
Exide are that the company, while affixing bar code (on the cartoons containing
battery) that indicates location of the unit, month of production, year of
manufacturing and serial number of the product, is not declaring MRP on the
cartoon. Exide is paying duty only on the depot price in terms of section 4 of
the Central Excise Act, 1944.

Exide Industries officials
explained that automotive batteries cannot be sold in the form it comes out of
the plant. The dealers need to charge them before selling them because charges
drop after a time. And therefore it cannot come under packaged product category.
 

Source : http://www.mydigitalfc.com

Supreme Court
Upholds the Powers of Central Excise Officers to Issue Summons for Recording
Evidence During Investigations

The Supreme
Court, in a recent case, upheld the powers of Central Excise officers to issue
summons for recording evidence during investigations.

The Supreme Court, after hearing arguments of both sides, dismissed the Petition
by its order CRLMP.No. 8111/2012 in SLP (Crl.)283/12. While dismissing the
Petition, the Apex Court debarred the Petitioner from raising the issue of
powers to summon, in any other proceedings.

PIB