Finance Bill 2007

Import of HR Coils restricted under Import Policy and allowed only against licence-Import of goods falling under Headings 7326 90 99, 8483 10 99 & 8708 10 90 also restricted-DGFT Notification No. 63 PM says India will use fiscal, monetary, public investment and exchange rate measures to tackle global financial meltdown crisis-no effort would be spared to "neutralise" to the "maximum" its adverse impact on India Sensex Up by 500 Points in intra day trading as bargain hunters enter the market Anti dumping duty imposed on import of Acrylic Fibre from Korea RP & Thailand-Customs Tariff Notification No.123 Singer Michael Jackson converts to Islam and changes his name to Mikaeel Debit of advance authorization/DFIA based on balance CIF value of inputs in freely convertible currency-DGFT Circular No.41 Export of edible oils permitted in branded consumer packs of up to 5 Kgs, subject to a limit of 10,000 tons during the next one year up to 31st October, 2009- Export of fish oil allowed freely-DGFT Notification No.60 DTAA between India and Tajikistan signed Authority for Advance Rulings rules the tax payable on the long term capital gains arising on sale of equity shares of Foseco India Ltd., being listed securities, will be 10 per cent of the amount of capital gains as per the proviso to section 112(1) of the Income-tax Act-While calculating the amount of long term capital gain chargeable to tax interest paid by the applicant to the shareholders of Foseco India Limited as per the directives of the SEBI will also be treated as a part of the cost of acquisition of the shares-AIT-2008-416-AAR Authority for Advance Rulings rules the income derived by the applicant on the purchase in India and export of gold jewellery accrues or arises in India and is taxable in India-AIT-2008-417-AAR Exchange Rate for imported goods is Rs 74.03 Per Pound Sterling and Rs 51.22 Per 100 Yen-Exchange Rate for export is Rs 72.45 Per Pound Sterling and Rs 49.94 Per 100 Yen-Customs Non-Tariff Notification No.128 100 per cent EOUs allowed to export non-basmati rice-DGFT Notification No.59 Customs duty of 5 per cent imposed on import of Pig Iron, spiegeleisen, semi-finished products, flat products & long products Import of Crude Soyabean Oil subjected to 20 per cent customs duty- no change in import duty on refined soyabean oil-Customs Tariff Notification No.122 Time-limit for filing refund of service tax extended to 6 months-Service Tax Notification No.32 Tariff Value for import of Brass Scrap is 3525 and for poppy seeds 5206-Customs Non-Tariff Notification No. 127 CBEC clarifies the entire amount of duty paid by the manufacturer, as shown in the invoice would be available as credit irrespective of the fact that subsequent to clearance of the goods, the price is reduced by way of discount or otherwise-Central Excise Circular No.877 SC Ruling-the entitlement of benefit in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act- conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounted to manufacture/production-AIT-2008-413-SC SC Ruling-Whether any "gift" arose in terms of Section 2(xii) of the Gift-tax Act, 1958 on the allotment of rights issue by the appellant company to its shareholders vide Board's Resolution- Whether there was any element of "gift" as defined under Section 2(xii) in the appellant issuing Bonus shares in the ratio of 1:23-AIT-2008-412-SC HC Ruling-Income Tax-"reserves" arising out of the acquisition of the business of Tata Cellular Limited could never have the character of "income" in the hands of the petitioners-pre-requisite condition contained in proviso to section 147 to enable the re-assessment to be opened after period of 4 years have elapsed have not been met-AIT-2008-410-HC HC Ruling-Central Excise- valuation of the goods for the purpose of excise duty and whether excise duty was chargeable under Section 4 or Section 4A of the Central Excise Act 1944-while construing rule 3, who are excluded are only the institutional or industrial consumers as explained in Rule 2A and the industrial or institutional consumers in terms of the proviso to rule 2(p) for the purpose of chapter-II are the same-If the person who purchase the prepacked commodity not directly from the manufacturer or packers, they are consumers and the declaration will be of no effect-AIT-2008-408-HC Government considering imposition of import duty on steel Bad News for Consulting Engineers- whether turnkey contract can be vivisected?- The conclusion in Daelim case on the point, prima facie, being not in accordance with law, matter goes to Larger Bench-AIT-2008-405-CESTAT Larger Bench of CESTAT rules Credit is admissible on an input service relating to the business-AIT-2008-407-CESTAT credit of the service tax paid on the outdoor catering (canteen) service is admissible as input service under Rule 2(l) of the Cenvat Credit Rules, 2004-AIT-2008-406-CESTAT The payment for use of "services for MTNL/other companies via the interconnect/port/access/toll by the assessee would not fall within the purview of payments as provided for under section 194J of the Act, so as to be eligible for tax deduction at source-The interconnect charges/port access charges cannot be regarded as fees for technical services-AIT-2008-404-HC Computation of Value under Section 14 for Levy of Export Duty - Customs Circular No. 18 Export duty of 8 per cent notified in place of earlier rate of Rs. 200 per tonne on export of iron ore fines-Customs Tariff Notification No.121 service tax paid under Section 66A is available as 'input credit' under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service-Service Tax Trade Notice No.43/2008

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Lok Sabha passes Finance Bill 2007

AIT News Network

NEW DELHI. The Lok Sabha has passed the Finance Bill, 2007, including the amendments introduced by the FM on 3^rd may 2007 which are as follows.

Central Excise

texturised vegetable proteins (soya bari) and ready to eat packaged food exempted from excise duty.

Full exemption from excise duty extended to biscuits of RSP equivalent upto Rs.100 per kg.

Excise duty (excluding Biri Workers’ Welfare Cess) has been reduced on hand made biris from Rs. 11 to Rs. 9 per thousand and on other biris (machine made) from Rs.24 to Rs.21 per thousand.

Excise duty on particleboards and other similar boards of heading 4410 and fiberboards of heading 4411 has been reduced from 16% to 8%.

Water Purification Equipment based on ultra-filtration technology using polysulphone membranes have been fully exempted from excise duty.

Excise duty on slide fasteners, including zip fasteners, and their parts falling under heading 9607 has been reduced from 16% to 8%.

An ad-valorem rate of excise duty at ‘12% of retail sale price’ has been prescribed for cement of retail sale price exceeding Rs.190 per 50 kg bag or per tonne equivalent retail sale price exceeding Rs.3800. The tariff rate being Rs.600 PMT, the rate of excise duty on cement priced above Rs.250 per 50 kg bag or per tonne equivalent retail sale price exceeding Rs. 5000 will be Rs.600 PMT.

Customs

Export duty on iron ores fines of Fe content of 62 percent and below has been reduced from Rs.300 per metric tonne (PMT) to Rs.50 PMT.

Customs duty on N- paraffin has been reduced from 10% to 7.5%.

Cut and polished diamonds have been fully exempted from customs duty.

Customs duty on nickel and articles of nickel has been reduced from 5% to 2%.

‘refrigerated motor vehicles’ exempted Customs duty. CV duty has also been reduced on such vehicles from 16% to 8% by way of excise duty reduction from 16% to 8%.

Full exemption from customs and excise/CV duty has been extended to aircrafts and their parts, imported/procured for providing ‘Non-scheduled Air transport (passenger) services and Non-scheduled Air transport (charter) services.

Full exemption from customs and excise/CV duty granted to aircrafts and their parts, imported/procured by Aero Club of India or by Flying Training Institutes .

aircrafts and their parts mentioned above will also be exempt from 4% additional duty of customs.

Direct Taxes

The business of developing or operating and maintaining or developing, operating and maintaining any infrastructure facility included in the positive list of businesses and industries under the amendment in clause (23FB) of section 10. Venture Capital Funds investing in infrastructure facilities, as defined in Explanation to section 80IA(4)(i), will now get the benefit of pass through status.

The valuation of perquisite in the nature of rent free or concessional rent accommodation owned and provided by the non-Governmental employer to his employee is proposed to be reduced. At present the valuation is 15% of salary (for cities having population of not more than 4 lakh) and 20% of salary for (cities having population of more than 4 Lakh). It is proposed to be reduced it to 7.5% of salary (for cities having population of 10 lakhs and below), 10% of salary (for cities having population of more than 10 lakhs, but not more than 25 lakhs) and 15% of salary (for cities having population of more than 25 lakhs). The amount paid or recovered from employee for the rent of the accommodation will get reduced from this valuation.

In the case of ESOPs, there has been no change in the original proposal to charge FBT on the date of allotment or transfer of specified security. However, the fringe benefit arising from ESOPs will now be valued on fair market value, on the date of vesting of option, as reduced by the amount paid by the employee for acquiring the specified security. The period of holding for the purpose of capital gain tax will be reckoned from the date of allotment or transfer of specified security.

The Income-tax Act to be amended to provide for tax-neutral amalgamation or demerger of cooperative banks. Hence, the amalgamated or resulting co-operative bank will be able to set-off and carry forward the unabsorbed loss or accumulated depreciation of the amalgamating or demerged cooperative bank.

New section 80-IE inserted for providing fiscal incentives to units located in North-Eastern States and State of Sikkim. Under this new section, undertakings located in these states, and which begins to commence manufacturing or under going substantial expansion or commence eligible business on or after 1^st April 2007, but before 1^st of April 2017, will be eligible for 100% deduction of profits from such business for ten consecutive years. The benefit has been intended for those who are engaged in manufacturing of article or things, other than the negative list and those engaged in eligible business. Eligible business includes business of hotel (not below two star category), adventure and leisure sports including ropeways, providing medical and health services in the nature of nursing home with a minimum capacity of twenty-five beds, running an old-age home, operating vocational training institute for hotel management, catering and food craft, entrepreneurship development, nursing and para-medical, civil aviation related training, fashion designing and industrial training, running information technology related training center, manufacturing of information technology hardware and bio-technology.

Investment in rural bonds of NABARD included in the list of permissible investment under section 80C.

Click here for text of Amendments in FINANCE BILL, 2007