India: Indirect Tax Newsletter January 31, 2013

Last Updated: 12 February 2013
Article by Amit Kapur



Notification No. 1/2013-Cus, dated January 21, 2013

Amends Notification No. 12/2012-Cus.,dated March 17, 2012 to enhance rate of custom duty on gold bars.

Notification No. 2/2013-Cus, dated January 21, 2013

Amends Notification No. 12/2012-Cus, dated March 17, 2012 to enhance rate of custom duty on all types of crude edible oils to 2.5%.

Uniworth Textiles Ltd. Vs. CCE [2013-TIOL- 13-SC-CUS]

The Supreme Court of India held that mere non-payment of duties is not equivalent to collusion or willful misstatement or suppression of facts. Construing mere nonpayment as any of the three categories contemplated by the proviso to Section 28 of the Customs Act, 1962 would leave no situation for which limitation period may apply.


Central Excise

Notification No. 01/2013-CE dated January 21, 2013

Amends Notification No. 12/2012-CE dated March 17, 2012 to enhance rate of excise duty on Gold bars to 5%.

Ultratech Cement Ltd. Vs. UOI [2013-TIOL- 23-HC-AP-CX]

In a Writ Petition seeking stay of Circular No.967/01/2013-CX dated January 01, 2013 issued by the Central Board of Excise & Customs, the High Court of Andhra Pradesh has granted interim stay for recovery of tax till application of stay is disposed off by the appellate authority. Similar relief has also been given by other High Courts in number of writ petitions.

Skan Research (P) Ltd. Vs. CCE [2013-TIOL- 186-CESTAT-MAD]

The Tribunal held that assessee is liable to pay excise duty on MRP less abatement on physician samples cleared free of cost.

Cenvat credit

Golden Tobacco Ltd. Vs. CCE [2013-TIOL- 163-CESTAT-MUM]

The Tribunal held that service provided for valuation of property, other than factory premises, service in relation to empty plot by security agencies, repair and maintenance of air conditioner at residences of employees cannot be considered as input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 ("the Credit Rules").

Group M Media India Pvt. Ltd. Vs. Commissioner of Service Tax [2013-TIOL- 175-CESTAT-MUM]

The Tribunal held that services of a real estate agent for preparing office premises from where they are providing outward service is an input service in terms of Rule 2(l) of the Credit Rules.

Service Tax

SKP Securities Ltd. Infinity Infotech Parks Ltd. Vs. Deputy Director (RA-IDT) & Ors [2013-TIOL-38-HC-KOL-ST]

The High Court of Calcutta held that Comptroller and Auditor General ("CAG") has no power to audit records of a private assessee as there is no provision under Chapter V of the Finance Act, 1994 or under the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, which empowers CAG to audit accounts of an assessee which is a nongovernment company and not in receipt of aid or assistance from any government or government entity.

Commissioner of Service Tax Vs. Consulting Engineering Services (I) Pvt. Ltd. [2013- TIOL-60-HC-DEL-ST]

Dispute before the High Court of Delhi was whether in respect of services provided prior to May 14, 2003 for which payment was received after May 14, 2003; service tax was chargeable @ 5% or 8%. The High Court held that that taxable event as per the Finance Act is providing of taxable services. Since taxable event in the present case i.e. provision of taxable service took place prior to May 14, 2003, rate of tax prior to that date would be applicable i.e. 5% not 8%.

CCE Vs. National Ship Design & Research Centre [2013-TIOL-59-HC-AP-ST]

The High Court of Andhra Pradesh held that activities of 'Scientific Research' and 'Consulting Engineer Services' are different. Therefore 'Scientific Research' is not taxable prior to July 16, 2001 under Consulting Engineer Service


Hindustan Coco Cola Beverages Pvt. Ltd. Vs. State of Andhra Pradesh [2013-VIL-08-AP]

The issue before the High Court of Andhra Pradesh was whether rental charges collected by manufacturer from distributors/ wholesalers for bottles and crates is to be treated as part of sale price of soft drinks or is to be treated as a compensation for transfer of possession. The High Court held that bottle is used only for storing contents (soft drinks), and when the bottle is returned to retailer by customer and so on to the manufacturer, cost of bottle cannot be said to get included in the cost of soft drink.

Centre, States agree on CST compensation [Business Standard, January 28, 2013]

The Centre and the State Governments agreed to a compensation formula for CST. A sub-committee of Centre and State Government officials recommended 100 percent compensation to States for a cut in CST from four percent to two percent for 2010-11, 75 per cent for 2011-12 and 50 per cent for 2012-13, respectively. Central Government will now have to fork out INR 34,000 as CST arrears to compensate States.

States can stay out of GST loop [Orissa Post, January 30, 2013]

The Central Government agreed to allow States to keep out of GST loop if they so desire.

This article was published on January 31, 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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