01 January 0001

Tax Amicus: June 2015

Department of Consumer Affairs has amended Legal Metrology (Packaged Commodities) Rules, 2011 and the article included in June, 2015 issue of Tax Amicus discusses in detail the amendments made, and elaborates as to how these changes have opened a Pandora’s box of practical difficulties.

Notification & Circular section under Customs portion covers notification on amendments/ corrections made in the Foreign Trade Policy, 2015-20 and Handbook of procedures. CBEC Circular No. 15/2015-Cus., regarding the amendment made by Foreign Exchange Management Regulations, 2015 to dispense with the requirement of submission of Statutory Declaration Form (SDF) by an exporter exporting goods through EDI ports is also included in this section. Under Ratio Decidendi, this issue covers Supreme Court order holding that fees paid under the licence and basic engineering agreements will not be included in the value of imported goods and CESTAT Order holding that testing of imported duty free raw materials cannot be considered as ‘use’ other than that intended.

Central Excise part of this Amicus covers notification incorporating provisions of Foreign Trade Policy (FTP) as regards Export Oriented Units (EOUs), allowing them to return without payment of duty capital goods transferred earlier by other units, inter-unit transfer of goods and services on case to case basis.

Ratio Decidendi under Central Excise includes summary of various orders passed by Supreme Court including the one holding that exemption is available for the interim period between rescinding of earlier notification and issuance of fresh notification after sometime. It has also been held that royalty paid by distributor / copyright owner to the producer of music will not be considered as additional consideration in case of valuation of duplicate CDs manufactured by job-worker of the distributor of duplicated CDs.

Ratio Decidendi under Service Tax portion of this newsletter provides summary of CESTAT order in which the tribunal has decided on coverage of authorisation to act/not act in particular manner with regard to franchise service and in another case has held that deputation of personnel and manpower supply from the foreign associate company to work as employees will not be liable to service tax.

Statute & Notification section under VAT portion covers amendments made in Jharkhand Value Added Tax Act, 2005 and Bihar Entry Tax Act, 2015 relating to e-commerce. Ratio Decidendi in this portion covers two important orders on transfer of right to use goods.

June, 2015/Issue-48 June, 2015/Issue-48

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