Permanent establishment rules require arm's length attribution of profits to Indian IT enabled BPO units for tax liability in India.
A non resident is taxable in India only if an Indian IT enabled BPO unit constitutes its Permanent Establishment; where a Permanent Establishment exists, profits attributable to it must be determined under Article 7 by attributing the profits the establishment would have earned as a separate enterprise, applying the arms length principle and allowing deductible expenses in accordance with accepted accounting principles and the Income tax Act; arms length price is as defined in section 92F(iii) and sections 92-92F apply. The earlier CBDT Circular No.1/2004 is withdrawn.

CIF imports by government and public undertakings via ocean transport require Chartering Wing approval; banks to notify customers.
Prior approval for c.i.f. payments by Government Departments and Public Sector Undertakings is required from the Chartering Wing of the Ministry of Shipping only for imports effected through ocean transport; no such approval is needed where the mode of transport is other than ocean. This amendment stems from a change to Schedule II of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999. Authorised Dealer Banks are to notify their customers accordingly.

Securities Transaction Tax rules set VWAP and settlement mode valuation, mandate collection by exchanges and mutual fund trustees, and require prescribed returns.
The draft STT Rules prescribe valuation methods for taxable securities transactions (VWAP for netted trades, trade price for trade for trade, and specified auction treatment), designate stock exchanges and mutual fund trustees as responsible for collection and remittance, require returns in prescribed Forms with schedule data on specified computer media by 30 June following the financial year, and set rounding, payment, notice, refund and appeals procedures including Forms No.1-5 and signatory and verification rules.

CENVAT credit entitlement allows input credit and refunds for supplies to export oriented units after warehousing withdrawal.
Withdrawal of the warehousing facility does not alter relief available to Export Oriented Units: EOUs receiving duty-paid goods may claim CENVAT Credit, utilize it for domestic duty liability, or claim refund under rule 5 of the CENVAT Credit Rules; supplies to EOUs are treated as Deemed Export, allowing manufacturers to claim refund of Terminal Excise Duty and deemed export drawback. Consequently, no additional procedures are considered necessary.

DEPB rate revisions amend the Schedule of DEPB rates and impose value caps across chemicals, plastics and textiles exports.
The Directorate amends the Schedule of DEPB rates by revising DEPB percentages for specified chemicals and pigments and imposing or revising value caps; it also imposes value caps for identified plastics items without changing rates, and amends textile entries to set DEPB percentages and per-piece or per-kilogram value caps across detailed garment, yarn and fabric subcategories, with notes covering embroidered, metallised and lined variants.

Inspector postings expanded in the Investigation Wing, increasing inspector complement for DIT and DDIT/ADIT per Board order.
The Board approved an administrative modification increasing the sanctioned number of Inspectors allotted to DIT(Inv.) and to DDIT/ADIT(Inv.) in the Investigation Wing; the revised posting parameters are effective immediately and communicated to cadre-controlling officers.

Service tax accounting codes designate heads for tax collection, other receipts and refund adjustments for newly specified taxable services.
The notice prescribes designated Heads of Account for each newly specified taxable service, assigning three sub-heads per service for tax collection, other receipts (for interest and penalty on delayed payments), and deduct refunds (to be used by the department when allowing refunds), and separately specifies the accounting code for Education Cess on all taxable services.

Selection of corporate cases for scrutiny mandates mandatory categories, timelines and computer-assisted selection systems for returns.
Procedure mandates timebound selection of corporate returns for scrutiny, designating specified categories for compulsory scrutiny including search and seizure and survey cases; returns with large deductions or refund claims; significant prior additions sustained on appeal; banks, PSUs, major listed companies, companies taxed on book profits, large international transactions, non-resident underreported returns, NBFCs and investment companies above capital thresholds, stockbrokers with high brokerage or large bad debt claims, amalgamated companies claiming set offs, export deduction cases with high turnover, and large contractors. Assessing Officers may select other cases with written reasons and prior approval; reassessment response returns are to be selected; automated selections will be run through the Computer Assisted Scrutiny System within prescribed timelines.

Selection of tax returns for scrutiny: mandatory categories, AO may select others with written reasons and supervisory approval.
Instruction mandates compulsory scrutiny of specified non-corporate assessee returns, including those arising from search and seizure, statutory surveys, large deductions or refunds, prior sustained additions, local authority returns, banks and NBFCs above deposit thresholds, charity exemption claims with high receipts, significant international transactions, non-resident returns with income below withholding determinations, stock-brokers and professionals with high gross receipts but low declared income, large contractors and exporters, and all returns filed after reopening notices; additional selections require written reasons and CCIT approval and processing includes a centrally run computer assisted selection system.

Constitution of National Advisory Committee on Accounting Standard notified; administrative circulation and acknowledgement requested to recipients.
Constitution of the National Advisory Committee on Accounting Standard under section 210A of the Companies Act, 1956 was notified by Gazette S.O. 1010(E) and circulated by the Ministry of Company Affairs to Regional Directors and Registrars of Companies for information and necessary action, with a request that receipt be acknowledged.

Service tax accounting codes assigned for new and expanded services to standardize classification and reporting obligations.
Designation of numeric accounting codes for specified service tax categories: codes are assigned for newly defined services - business exhibition, airport, transport of goods by air, survey and exploration of minerals, opinion polls, intellectual property (other than copyrights), forward contracts, pandal/shamiana, outdoor catering, TV and radio programme production, construction (commercial/industrial) and travel agents (other than air/rail). Separate account codes are assigned where existing service definitions are expanded to include related activities such as installation/erection, sub-brokers, multi-system operators, procurement/provision on behalf of a client, additional financial services by non-banking entities, and package tour operators.

Appraisal report deadline: forward reports within the prescribed period after search initiation, allowing grouped reports if needed.
Appraisal reports from search and seizure operations must be forwarded within two months of the initiation of the search; delays had harmed the Investigation Wing's image and led to repeated summoning of assessees. The two-month limit is to be observed even if warrants are executed at different times, in which case two or more reports may be forwarded in a group, with detailed investigations continuing thereafter.

Service tax scope expanded to include new and broadened service categories, with uniform rate and education cess implications.
The Finance (No.2) Act, 2004 widens the service tax net by specifying numerous new taxable services and expanding existing categories, imposes a uniform service tax rate with an additional education cess, prescribes sectoral abatements and exemptions, and conditions such abatements on non-availment of input goods and capital goods CENVAT credit while allowing input service credit; transitional notifications and CENVAT Credit Rules, 2004 accompany the changes to govern valuation, credit mechanisms and to prevent double taxation.

Service tax expansion brings new service categories and broader coverage, with additional cess and revised valuation rules.
Service tax scope is expanded to new and broadened service categories, including business exhibitions, airport services, transport of goods by air, survey and exploration, opinion polls, intellectual property services (excluding copyrights), forward contract services, pandal/shamiana and outdoor catering, TV/radio programme production, construction of commercial/industrial buildings, and expanded travel, brokerage, cable/MSO, business auxiliary and financial services; ancillary rules introduce an education cess, conditional abatements tied to non availment of CENVAT on goods, specified exemptions, valuation clarifications, and transitional notifications.

Export obligation period limited to six months for penicillin and 6 APA imports under Advance Licences, with mandatory endorsement.
Advance Licences allowing import of penicillin and its salts (ITC HS 29411010) or 6 APA (ITC HS 29411050) under the Duty Exemption Scheme carry an export obligation period limited to six months from clearance of the first import consignment; the licensing authority must endorse this limitation on the Advance Licence and no further extension of the export obligation period is allowed.

Export obligation period limited to a fixed short term from clearance of penicillins or 6-APA, with no extensions permitted.
Importation of penicillins, their salts and 6-APA under Advance Licences is subject to a fixed Export Obligation period reckoned only from the date of clearance of those subject goods; no extension beyond that fixed period will be granted. The obligation period excludes clearance dates of other inputs, additional conditions apply for unregistered sources, and licences issued before earlier circular dates will not be recalled to reduce their obligation period.

Utilisation of DEPB credit allows partial duty debit for edible oil imports, balance duty payable in cash.
For imports of edible oils, whether refined or unrefined, the DEPB credit may be used to debit fifty per cent of the applicable duty, with the balance payable in cash, as an addition to Para 4.42 on utilization of DEPB credit under the Handbook of Procedures (Vol. I).

Amendment of Standard Input Output Norms: deletion of a footnote in the food products SION entry under trade policy.
Under authority of Paragraph 2.4 of the Foreign Trade Policy 2004-2009, Public Notice No. 04/2004-09 directs deletion of Foot Note No-2 appended to Standard Input Output Norms Sl.No - E-52 in the Handbook of Procedures, Vol. II, for the product group Food Products, as an administrative amendment issued by the Director General of Foreign Trade.

Service tax commissionerates creation reallocates commissioner posts and budgets to operationalise six new service tax units.
Creation of Service Tax Commissionerates by diverting specified Commissioner (Appeals) posts and attached private secretary posts to six Service Tax Commissionerates, with other posts redeployed from existing sanctioned strengths and corresponding reductions in Central Excise Zones so total sanctioned strength per cadre does not exceed existing levels. Additional charge is assigned to senior officers until regular appointments. Infrastructure and budgetary resources are to be adjusted and shared with no extra funds; collections from major service providers must be recorded separately for IFU. Chief Commissioners must operationalise the Commissionerates and transmit re-allocation orders within prescribed timelines.

DEPB rate amendments revise and restore value caps, adjust product rates, and add and delete entries under export incentives.
DGFT amends the Schedule of DEPB rates by revoking a previously increased value cap and restoring the prior cap, revising specific DEPB percentage rates, deleting and replacing certain entries (including splitting one entry into two paper categories), inserting multiple new product entries (one ad hoc entry limited to six months and to a named exporter), correcting product descriptions, and imposing value caps on specified entries across Engineering, Chemicals, Plastics, Electronics and Textiles product groups.