The June, 2014 issue of Tax Amicus brings you two articles. The first one relating to direct tax is on a recent ruling of the Authority for Advance Rulings (AAR) holding that ‘Protocol’ signed along with the treaty cannot be treated at par with the provisions contained in the treaty itself, though it may be an integral part of the treaty. The authors call for consistency and uniformity in interpretation of provisions as uncertainties can harm governance of tax laws. The second article is on service tax liability in respect of partial constructions in which the author specifically discusses the question as to whether service tax would be payable when a person decides to sell partially construction building.
‘Ratio decidendi’ column in Central Excise section includes decision of CESTAT, Mumbai holding that Cenvat credit taken on imported capital goods need not be reversed at the time of their clearance as such for export. Applicability of unjust enrichment in cases involving credit notes as per tribunal decisions are also discussed in this issue. Assessment of television sets sold to another entity for public distribution should be done at MRP less abatement as per Delhi Bench of CESTAT and this order is covered in this issue. Classification of board games and chocolate clubs viz., biscuits covered with chocolate, under Central Excise Tariff, are other interesting orders summarized in this issue of Tax Amicus.
The Customs portion brings several clarifications by various departments including the one on online complaint resolution system relating to EDI issues. Orders covered under ‘Ratio decidendi’ column include those holding that time-limit for refund application should be reckoned from date of communication of order, grant of hearing when provisional assessment is finalised, non-applicability of time-limit to refund of redemption fine and penalty and the like.
Interesting orders under ‘Ratio decidendi’ column of Service Tax portion include CESTAT order holding that electricity supplied to service provider for plant maintenance would not be includible in taxable value. A summary on Delhi High Court’s order to the effect that CESTAT is empowered to entertain appeals relating to rebate of service tax and CESTAT, Ahmedabad Bench’s order on admissibility of Cenvat credit of service tax on repair service provided by third party are part of this section in this issue.
Value Added Tax or VAT section covers amendment to Haryana VAT Act and clarification on exemption to works contract under Tamil Nadu VAT Act. Bombay High Court’s order on whether replacement of defective goods covered under ‘sale’ is discussed in this issue. Income Tax portion brings to readers various cases like ITAT, Delhi’s order on transfer pricing adjustment for interest not charged from AEs, inclusion of notional income in Profit Level Indicator (PLI), inapplicability of Section 50B when monetary consideration is absent and the like.