Uniform accounting year and redesigned tax authorities reshape advance tax obligations and mutual fund withholding rules.
The Act adopts the financial year as the uniform accounting year, redesignates and consolidates tax authorities and their jurisdiction, redefines the Assessing Officer, and vests the Board with power to assign and delegate functions; it also overhauls advance tax by including all current income for instalment-based payments without filing formal estimates, prescribes computation and instalment rules, and introduces non-deduction and exemption rules for mutual funds established by public sector banks or public financial institutions, with transitional "removal of difficulties" powers for the Central Government.

Classification of iron and steel scrap: only scrap intended for remelting falls under the remelting tariff heading, not re-rollable scrap.
Tariff classification is confined to scrap intended for remelting; material capable of hot rolling into another article without remelting is not covered by the remelting scrap heading and must be classified elsewhere. Denial of exemption based on treating re-rollable scrap as remelting scrap is incorrect, and earlier contrary instructions are modified in light of HSN explanatory guidance and the remelting intent criterion.

Taxation of non-resident turnkey contractors: FOB sales outside India not taxable; technical and construction receipts taxed by source rules.
Foreign consortium members are separate taxable entities; overall coordination agreements do not create partnership. FOB sales where title passes outside India are not taxable in India. Fees for planning, design and engineering are taxable as technical services subject to domestic rates or applicable double taxation agreements. Civil construction and erection/testing work performed in India attract a deemed-profits attribution of gross receipts for taxation where conditions are met. Separately identifiable transportation charges are governed by the rules for operation of ships or aircraft. Contracts by different foreign companies must be treated distinctly; guidance applies after the effective date.

Registration requirement for tobacco exporters restricts exports unless registered and compliant with Tobacco Board price or NOC rules.
Exports of tobacco and tobacco products require registration with the Tobacco Board under Section 12 of the Tobacco Board Act, 1975; exports without such registration are not permitted. For unmanufactured tobacco, exports are subject to a minimum export price rule and are allowed only on production of a price certificate or a no objection certificate from the Tobacco Board; these conditions must be strictly complied with in export clearances.

Classification of special grey Portland cement may fall under grey Portland subheading; local collectors to adjudicate and decide.
The Board notes that Sub heading 2502.20 of the new CET covers all grey Portland cements, including special grade, so classification under 2502.20 is a permissible view; however, because cases are under adjudication the Board will not give a categorical ruling and directs jurisdictional Collectors of Central Excise to adjudicate each case. For recovery of any short levy the Board refers to the Supreme Court's observations in Madhumilan Syntex, and parties may pursue appellate remedies; field formations and trade are to be informed and pending assessments finalised accordingly.

Classification of binding agents as adhesives, not finishing agents, when used to bind non woven webs during manufacture.
Binding agents composed of acrylic binder, antifoam, wetting agent, ammonium salts and water, used to bind non woven webs during manufacture, function as adhesives applied in the bonding stage rather than in finishing; the HSN distinction between web formation, binding and finishing supports classification of such products as prepared adhesives rather than as finishing agents.

Related person determination: require concrete evidence of mutuality of interest before treating manufacturer and brand owner as related.
Determination of related persons under Section 4 requires proof of mutuality of interest beyond mere brand affiliation. Investigative evidence may include free provision of machines, technical know how, design, free or suppressed raw materials, or an abnormally large price differential inconsistent with ordinary dealer margins. The Board directs field formations to carry out thorough investigations and establish such indicia of control or economic dependence before treating a manufacturer and brand name owner as related persons for valuation.

Excisability of ethyl alcohol: adjudication of pre-March 1989 show cause notices deferred pending judicial resolution.
Excisability of ethyl alcohol for periods prior to 1 March 1989 is contested due to classification and control conflicts; the Board observed that manufacture was largely under State control and that writ petitions challenge allocation of levy powers. The Board directed withholding adjudication of show cause notices raising central excise demands for the pre-1 March 1989 period until the outstanding judicial determinations on classification and control are resolved, and instructed that field formations and trade be informed.

Interest on customs duty remains payable where goods were dutiable on warehousing even if later exempted.
Interest on customs duty is payable where goods were dutiable at the time of initial warehousing, and such interest must be calculated with reference to the rate of duty assessed at warehousing. A subsequent exemption of duty does not automatically relieve the importer from interest liability accrued up to the date of exemption unless the interest is specifically waived under the proviso to Section 61(2) of the Customs Act, 1962.

Perquisites ceiling and gratuity treatment clarified for director remuneration, with non taxable retirement contributions excluded from the ceiling.
The amended Schedule XIII prescribes location-based ceilings on perquisites payable in addition to salary and/or commission, excludes non-taxable provident fund, superannuation or annuity contributions from the perquisites ceiling, and treats gratuity as payable over and above perquisites while limiting gratuity to a prescribed amount per completed year of service subject to an overall ceiling.

Nomination deposit requirement for director candidacy: refundable upon election, forfeited if the nomination is unsuccessful.
A nomination deposit is required from any person other than a retiring director proposing himself, or any member proposing such person; the deposit is refundable only if the person is elected as director and is forfeited to the company if the person is not elected.

Treatment of subsidies: untaxed state film subsidies must be reduced from production cost under income tax rules.
A corrigendum deletes a typographical "not" in an earlier circular and amends the instruction: amounts received by producers of regional feature films that have not been charged to tax shall be reduced from the cost of production for the purpose of applying the income tax rules to compute taxable income.

Director candidature deposit refundable only on election; perquisites capped and gratuity payable separately.
A non retiring candidate for directorship or the member proposing him must deposit a fixed sum refundable only if elected and forfeited if unsuccessful. Perquisites are allowed in addition to salary/commission but subject to location based ceilings; employer contributions to provident, superannuation or annuity funds are excluded from that ceiling to the extent not taxable under income tax law. Gratuity is payable in addition to perquisites, limited to half a month's salary per completed year of service and subject to an overall cap.

Adjournment fee rules limit payable fee for non-hearings and restrict counsel entitlement to a limited number per case.
The clause prescribes a fixed adjournment fee payable when hearings are adjourned, states that the adjournment fee is exclusive of hearing fees, limits payment for connected cases by not allowing duplicate adjournment fees where one has been paid, and restricts a counsel's entitlement to non-hearing payments to only three non-hearings in the entire case.

Excisability of captive coating solutions: non marketed, immediately used preparations are not treated as excisable goods.
Coating solution/coating paste prepared by paper mills from raw materials and used immediately for captive consumption, not marketed, do not constitute excisable goods; field formations and trade to be informed and pending assessments finalized accordingly.

Deemed credit on steel scrap preserved for transitional balances; subsequent credit requires production of duty payment documents.
Deemed credit on steel scrap was available without duty payment documents prior to 29-8-1986 but that facility was withdrawn with effect from 29-8-1986, making credit on scrap admissible thereafter only on production of duty payment documents. Deemed credit balances allowed under the earlier order dated 7-4-1986 and standing on 28-8-1986 may be used for payment of duty on final products.

Deduction of tax at source: interest on government securities taxed when credited or paid, with strict withholding and compliance required.
Amendments to Section 193 require tax withholding on interest on government securities at the earlier of credit or payment, with credits to interest or suspense accounts deemed as credit to the payee; the exemption ceiling for certain debenture interest paid to resident individuals is increased and surcharge on total income is raised, necessitating higher withholding. Deductors must issue prescribed TDS certificates, quote TAN, file annual returns of TDS on interest on securities in the prescribed form, and pay deducted sums to government within prescribed time, with penalties and prosecution for non-compliance.

Characterisation of shares as stock-in-trade or capital asset determines whether sale proceeds qualify as business income.
Determination whether shares are stock-in-trade or capital assets turns on the totality of factors: the purchaser's intention (notably intention to resell at a profit), repetition and scale of transactions, and whether sales are so connected with carrying on the taxpayer's business that resulting surpluses constitute business income. Contexts where dealing in securities is integral to the ordinary business, or where regulatory practices require holding liquid securities, weigh in favour of classification as business income. Accounting labels are relevant but not conclusive.

Extension of filing date for partners of audited firms allows later return filing and directs officers not to enforce the earlier deadline.
Partners of partnership firms whose accounts are required to be audited may file their income tax returns by 31st October; Assessing Officers are directed not to insist on the earlier August deadline for the assessment year 1989-90. A proposed retrospective amendment in the Direct Tax Laws (Second Amendment) Bill, 1989 would formalise this extension with effect from April 1, 1989.

Compulsory repayment enforcement: Company Law Board can order deposit repayment and punish non compliance with imprisonment and fine.
Amendment to section 58A empowers the Company Law Board to direct repayment of matured deposits and to impose conditions and time for repayment; non compliance attracts imprisonment and a daily fine. Depositors may apply in the prescribed form (in triplicate) with the application fee to the relevant regional bench or the Board may proceed on its own motion; the amendment covers matured deposits unpaid before commencement.