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Tax Amicus: January 2015

The dispute regarding determination of place of provision of entertainment to find out the jurisdiction of State which has the power to levy Entertainment Tax is discussed at length by the author in the article covered in this month´s issue of Tax Amicus. According to the author, determining the place of entertainment in case of DTH services on the basis of location of customer could be a better alternative.

Under Customs, importers penalized in the previous three financial years under various provisions have been made eligible for exemption from providing bank guarantee in case of imports under various export promotion schemes. Gujarat High Court has allowed benefit of Central Excise exemption notification to domestic clearances made by SEZ, while computing CVD. Further, CBEC has issued two Circulars clarifying on deemed exports benefits available to EOUs. All these developments are summarized in this issue.

Central Excise portion of this newsletter covers CBEC Circular stating that mandatory pre-deposit is to be made in drawback cases as well. Bombay High Court has quashed CESTAT Larger Bench Order and held that dross and skimmings are not excisable even after introduction of Explanation to Section 2(d) in Central Excise Act, 1944 in 2008. Further, in cases where export proceeds have not been realized, CESTAT has in two different decisions held that Cenvat refund and benefit of Excise Rule 19 are not deniable. Readers may go through this issue to read the gist of these orders.

CESTAT, Mumbai has held that in case where the invoice is in the name of head office, credit is admissible to other unit when ISD registration was absent. Service Tax portion of this Amicus also summarizes various other decisions as well holding that ISD registration is not necessary to take credit for units within same compound; Storing of goods by manufacturer post sale not necessarily storage service; Pre-construction anti-termite treatment is not construction service, etc.

Under VAT segment this issue brings news on provisions made for entry tax on goods purchased through e-commerce in Assam. Ratio decidendi under VAT covers Gujarat High Court judgment holding that it is the final computed price alone, which the seller of petroleum products receives from the oil marketing companies that can form part of the taxable turnover. Supreme Court of India has held that cell phone charger is an accessory to the cell phone and not an integral part of the cell phone. The decision was in respect of Punjab Value Added Tax Act, 2005 and this order is reported in this issue.

January, 2015/Issue-43 January, 2015/Issue-43
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