01 January 0001

Tax Amicus: September 2014

Incentives by various Indian provincial or State Governments to manufacturers under regional Sales Tax or VAT provisions are discussed in the Article section of Tax Amicus this month. The author throws light on how these incentives are increasingly becoming disincentives to assessees under Central Excise law and how to strategize businesses going forward.

Under Central Excise part of this Amicus, the reports covered include the judgment of Delhi High Court holding that rebate on exports would not be deniable just because value of exports was more than the market value of goods and the ruling of Allahabad High Court that rebate on exports by EOU would be admissible. CESTAT Mumbai has held that there can be no under-valuation of intermediate goods when duty is paid on MRP basis on final product and this order is included in this issue.

CESTAT Delhi’s Order holding that no interest is payable on provisional assessments made prior to 13-7-2006 but finalized later, is covered in Customs portion of the Amicus which also covers summary of Bombay High Court Ruling holding that brand rate of duty drawback can be claimed after availing All Industry Rate. Bombay High court has also held that interpretation by Policy Interpretation Committee under the Foreign Trade Policy (FTP) is prospective.

Service Tax section brings certain important orders which include an order passed by CESTAT Mumbai wherein it has been held that notional interest on security deposit cannot be included in gross value of service and that administrative support services are not to be treated as management consultancy service.

Under Value Added Tax (VAT), this issue covers recent changes in Haryana VAT provisions and Karnataka High Court Order holding that lease agreements entered prior to introduction of Karnataka VAT are not liable thereunder.

September, 2014/Issue-39 September, 2014/Issue-39

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