Modvat credit on disputed inputs can be held pending resolution if unused and undertakings provided to authorities.
Modvat credit on disputed inputs may be retained without issuance of repeated show cause notices if the assessee gives an undertaking that the credit will be recorded only in RG 23A Part I and not utilised until final settlement; the assessee may pay duty to the extent of the disputed credit from the Personal Ledger Account under protest and later adjust the credit once the dispute is resolved, with an expectation that disputes be settled expeditiously.

Change of job worker permission: no fresh permission required if manufacturer intimates original approval and receives acknowledgment.
No fresh departmental permission is required when a manufacturer changes or adds a job worker for removal of inputs under Rule 57F(2); the manufacturer must intimate the jurisdictional officer with reference to the original permission, and the officer's acknowledgment may be treated as departmental acceptance permitting continuance of removals.

Reimbursement of medical expenses: Central Government approval required for specialised treatment abroad with essentiality certificate.
Reimbursement of medical expenses exceeding the statutory ceiling for a managing director/whole time director/manager requires Central Government approval; applications must be lodged during the managerial tenure, accompanied by an essentiality certificate from the Director General of Health Services, relate only to the managerial person (not family or dependants), and are subject to a fixed inclusive ceiling for specialised treatment abroad.

Prosecution initiation guidelines emphasise prioritising serious tax frauds and require a show-cause notice before proceedings.
Departmental guidance requires thorough factual examination and, where prosecution parameters are met, service of a show-cause notice to the assessee before initiating prosecution, except for offences under section 276C(1) and 277; prosecutions are to focus on significant frauds and major defaults, with avoidance normally for persons aged seventy or above and with specified thresholds for various sections determining non-initiation.

Classification of ice cream products: items with biscuits, fruits or cakes treated as ice cream and attract concessional duty.
Frozen desserts incorporating biscuits, cakes, fruits, nuts or similar adjuncts that are marketed and known as ice cream desserts are to be treated as composite articles and classified as Ice Cream under Heading 21.05; such products are eligible for the concessional rate of duty under the applicable notification, following rules of tariff interpretation and market identity.

Classification of stiffened cotton fabrics: filler stiffened textiles deemed buckram type and classified under stiffened textile heading.
Heavily sized and bleached cotton fabrics stiffened by adding fillers that give them a distinct name, character and use are classifiable as buckram and similar stiffened textile fabrics rather than under the processed cotton fabric headings; the more specific tariff entry for stiffened fabrics governs where the resultant product differs in character and use from the base fabric.

Surcharge on withholding tax increased, changing TDS/TCS rates and advance tax instalment payment timing.
The Amending Act increases the surcharge on income-tax applicable to tax deducted or collected at source for domestic companies and non-corporate resident assessees and requires payers to adjust any deficiency in prior withholdings, including salary withholding adjustments. It prescribes which advance tax instalments must include the enhanced surcharge and when additional surcharge liabilities arising after earlier instalment dates must be paid. The Act also restricts company depreciation deductions to seventy-five per cent of the computed amount for the relevant block, making the resulting extra advance tax payable with the final advance instalment.

Exemption of interest on Non-Resident External Accounts: joint account holders qualify if each individual meets statutory conditions.
The Circular clarifies that mere joint operation of a Non-Resident (External) Account does not convert joint holders into an association of persons; therefore the exemption for interest under the Income-tax Act is available to joint account holders provided each individual joint holder fulfils the other statutory conditions for claiming the exemption.

Search authorisation under the Income tax Act: deputy officers empowered to authorise searches per Board instruction.
Deputy Directors (Investigation) and Deputy Commissioners of Income-tax are authorised to grant search authorisations under the Income-tax Act, with the scope of their delegated powers governed by prior notifications and the covering letter to the 1979 notification, which applies mutatis mutandis to the 1990 notification.

Exemption scope for parts clarified: dry cell battery parts excluded from notification, pending assessments to be finalised.
Parts such as base-metal battery caps, though classifiable under Heading 8506, are not covered because the Notification does not include the expression "Parts", and therefore such components are ineligible for the exemption; field formations and trade are to be informed and pending assessments finalised accordingly.

Surcharge increase on income tax alters advance tax, TDS/TCS and transitional payment obligations for companies and residents.
The Amending Act, 1991 increases the surcharge on income tax for domestic companies and non corporate resident assessees, prescribes effective dates for applying the enhanced surcharge to tax charged, deducted or collected at source, and sets transitional provisions for adjustment of advance tax instalments. It restricts depreciation deductions for companies to seventy five per cent of the otherwise calculated amount for a block of assets, clarifies exceptions for low cost assets and written down value computation, and exempts specified shortfalls arising from these changes from interest under section 234C where paid within prescribed subsequent instalments.

Interest exemption on NRE/FCNR accounts allowed for temporarily repatriated non-resident Indians maintaining accounts abroad; continuity permitted.
Interest on amounts deposited in NRE and FCNR accounts is exempt for persons retaining non-resident status; individuals normally resident in Kuwait who returned as a direct consequence of the invasion and who continue to maintain NRE/FCNR and foreign currency accounts under the Reserve Bank's temporary permission are eligible for the interest exemption in respect of such accounts maintained during the permitted period.

Prosecution counsel fee schedule instituted, setting departmental rates and excluding specified metropolitan jurisdictions.
Sanction of a departmental fee schedule for Prosecution Counsels effective 1 January 1991, authorising implementation of prescribed rates, subject to obtaining consent of incumbent counsels; the schedule excludes specified metropolitan jurisdictions where Ministry of Law Branch Secretariat rates apply, and the instruction records concurrence of the Ministry of Law and Justice.

Exchange of information under DTAA: regular transmission of taxpayer transaction data to treaty partners via consolidated half yearly reports.
Information relevant to recipients in treaty partner countries must be collected from returns of income or assessment proceedings using the prescribed proforma and compiled into consolidated half yearly reports to the Board's Foreign Tax Division for transmission under the exchange of information article of the Double Taxation Avoidance Agreements.

Third party exports: EOUs/FTZs/EPZs may accept orders provided export benefits remain with the exporting unit.
Guidelines allow 100% EOUs and FTZ/EPZ units to procure third party export orders provided the third party may or may not be named on export documents but must stipulate that all export benefits accrue only to the EOU/FTZ/EPZ. The third party must disclaim any claim to export benefits or export performance for certificates or special licences. Exports must be executed directly from the customs bonded unit of the EOU/FTZ/EPZ in compliance with bonding procedures; negotiation of documents through a third party is allowed.

Forfeiture auction procedures assigned to Income Tax Chief Commissioners to conduct sales and report promptly to the Board.
The Board directs that auctions and disposal of properties forfeited under Section 7 be handled by Chief Commissioners of Income Tax who manage custody and sale under the Chapter XXC pre-emptive purchase provisions; those Chief Commissioners must conduct sales using their existing infrastructure and report each sale to the Board within one month, and the instruction is to be circulated to all regional officers for implementation.

Assessment of Chapter VI-A deductions: require verification of eligibility and documentary proof before allowing small-scale industry benefits.
Audit review found Assessing Officers routinely failed to verify statutory conditions for Chapter VI-A deductions: they did not obtain authenticated worker records, did not verify actual plant and machinery cost, allowed rural or backward-area claims without confirmation, permitted ineligible large-scale or processing units to claim benefits, failed to insist on prescribed audit certificates, and treated collected taxes as assessable receipts. The Board directs issuance of instructions requiring AOs to verify documentary and audit evidence, confirm location and classification criteria, and apply correct income measures before allowing deductions.

Discretion under section 220(6) permits AOs to consider all relevant factors before treating an assessee not in default.
Assessing Officer discretion is to be exercised by considering all relevant factors bearing on a tax demand and by communicating the decision to the assessee in the form of a speaking order; this applies to deciding whether to treat an assessee as not in default for amounts disputed in first appeal.

Bond for differential customs duty requires immediate payment on vacation of stay or adverse judicial decision.
Circular prescribes a standard bond for importers clearing consignments under court orders staying recovery of differential customs duty, obliging the importer and successors to pay the differential duty immediately on demand if the stay is vacated or an adverse judicial decision is given, and requiring a bank guarantee for the full differential duty to the satisfaction of the Collector of Customs; recovery may be effected by the Collector or other officer under the Customs law and the bond form may be modified to match the court order.

Utilisation of survey reports under section 133B requires monthly feedback and consolidated reporting through prescribed proforma.
The instruction mandates feedback on utilisation of survey reports under section 133B and CIB verification reports via revised Proforma I and II; Part C of Proforma I must use the prescribed register of 'Survey and CIB verification' while Part A continues to record new assessees. Assessing Officers send monthly Proforma I to Commissioners for consolidation to Chief Commissioners and the Board; Directors of Income-tax (Inv.) consolidate Proforma II via Directors General (Inv.) with DIT-wise breakups. Revised proformae apply from January 1991 with consolidated regional reports due to the Board by the 7th of the succeeding month.