Doctrine of merger cannot extinguish unlitigated claims; issues not contested earlier remain open for proper challenge.
The doctrine of merger cannot be applied mechanically to extinguish arguments or rights that were never contested in the earlier proceeding; where an adjudicating authority disallowed two deductions and allowed six, and an appeal to the Tribunal challenged only the two disallowances, the Tribunal's reliance on merger to preclude reconsideration of the six allowed deductions was incorrect because those deductions were not litigated and could only have been contested by the Revenue.

Service taxation expanded: eight new service categories now taxable, including health services, brand promotion and copyrights.
Eight service categories were made taxable by Notification No.24/2010-Service Tax (dated 22 June 2010) effective 1 July 2010. The notification lists games of chance; health services; maintenance of medical records; promotion of a brand of goods, services, events or business entities; commercial exploitation of organized events; electricity exchange service; copyrights on cinematographic films and sound recordings; and provision of preferential location or development of complexes as taxable services.

Trade growth: exports rose year-on-year while imports increased, widening the trade deficit in the April-May period.
Exports rose year on year in May and cumulatively for April-May, while imports increased more rapidly-driven by a sharp rise in oil imports and strong non oil demand-resulting in a widened trade deficit for the April-May period compared with the prior year.

Service tax changes implement targeted exemptions and caps affecting air travel, construction, sponsorships, ports, power distribution and rail transport.
Finance Act, 2010 implements changes to service tax via notifications effective from 1 July 2010: additions and amendments to taxable services, exemptions for air transit and certain regional air travel, capped air passenger charges, exemptions for specific construction services and where land value is included, sponsorship exemptions for specified bodies, a negative list for port and airport services, exemptions for services to authorised electricity distributors, and an administrative extension of rail goods transport exemption.

Service tax on renting of immovable property: retrospective amendment stayed, prospective levy remains subject to scrutiny.
High Court proceedings challenged a retrospective amendment to the Finance Act, 1994 seeking to tax renting of immovable property; the court found the challenge to the retrospective operation prima facie substantial and stayed only the retrospective effect, while indicating that arguments against the amendment's prospective application were not, at first glance, sufficient to warrant interdiction.

Direct Tax Code commencement affirmed; calls for GST convergence and inclusive growth to boost jobs and investment.
Announcement confirms commencement of the Direct Tax Code as scheduled effective 1st April 2011 and urges industry chambers to press for early convergence on Goods and Services Tax. The Finance Minister emphasised inclusive growth to generate employment and wealth, noted rising foreign direct investment and export trends, and highlighted the need for expanded skilled manpower to meet industry demand.

EET taxation of retirement savings proposed, but core provident funds and approved life and annuity products retain EEE treatment.
The Code proposes an Exempt Exempt Taxation (EET) regime where specified contributions are deductible, accumulations remain exempt while invested, and withdrawals are taxed at the individual marginal rate; rollovers between permitted accounts will not be treated as withdrawals. Taxation on an EET basis is prospective with existing balances in certain provident funds preserved; however, Exempt Exempt Exempt (EEE) treatment will be retained for core provident funds, specified pension schemes, approved life insurance products and annuities, and pre existing EEE investments will continue to enjoy EEE treatment.

Income from employment: employer retirement contributions excluded from salary; retirement receipts exempt within prescribed limits and perquisites clarified.
Income from employment under the DTC is gross salary less permissible deductions; salary includes perquisites, retirement receipts and employer contributions to approved retirement funds. A centralised Retirement Benefits Account scheme was considered but is not proposed due to administrative complexity and hardship. Employer contributions to approved funds within prescribed limits will not be salary, and specified retirement receipts will be exempt subject to monetary limits. Perquisite valuation will be set by rules: medical perquisites follow existing practice with higher limits, and rent free accommodation will not be valued at market rent.

Wealth tax proposed on net wealth of individuals and HUFs, targeting specified unproductive assets and broad taxpayer coverage.
Wealth tax is proposed on net wealth of individuals, HUFs and private discretionary trusts as assessed on the valuation date; net wealth equals assets chargeable to wealth tax (including financial and deemed assets) less debts and after exempted assets such as stock in trade and a single residential property. Specified unproductive assets will be subject to the tax, productive assets are proposed to be exempt, and the levy will apply to all taxpayers except non profit organisations, with threshold and rate to be calibrated within overall tax policy.

Service tax applicability on laying of cables clarified: installation and construction activities attract tax, routine cable laying does not.
Service tax applicability is split: non taxable activities include shifting overhead cables, laying cables under/along roads, laying between grids en route, laying up to distribution points, and railway electrification; taxable activities include independent installation of transformers/sub stations and installation of street/traffic/flood lights as Erection, commissioning or installation services, and laying cables beyond distribution points for commercial/industrial localities as construction services.

Renting of immovable property as service: interim protection against service tax recovery after retrospective amendment.
The Finance Act, 2010 retrospectively classifies renting of immovable property as a taxable service, conflicting with prior judicial findings that renting alone is not a service; the court directed interim restraint on recovery of service tax for renting of immovable property pending resolution of the legal dispute.

Foreign direct investment policy in defence desirable to permit higher FDI, subject to licensing safeguards to protect security.
The discussion paper urges permitting substantially higher Foreign Direct Investment in the defence sector to access advanced technology, referencing the telecom sector's higher allowance, while stressing that any elevation or removal of the FDI cap would remain subject to licensing requirements and security-related regulatory controls.

Direct Taxes Code introduction to consolidate tax law while expanding processing centres and enhancing international information exchange.
Direct Taxes Code will be introduced in the forthcoming parliamentary session to consolidate direct tax law and address nine stakeholder concerns through a publicly released draft. Administrative reforms include establishing two additional Centralized Processing Centres to expedite return processing, expanding the Refund Banker Scheme for electronic refunds, and enhancing international tax information exchange and bilateral agreements with low- or no-tax jurisdictions to improve transparency and compliance.

Enactment of Finance Act 2010 confirms conversion of the Finance Bill into statute following presidential assent.
The Finance Bill, 2010 received presidential assent and was enacted as the Finance Act, 2010 (Act No. 14 of 2010), formalising the Bill's conversion into statute; related materials include the original Bill, recorded amendments, and press releases announcing the enactment.

Trade balance narrowed despite monthly export surge; imports rose sharply driven by oil and non-oil demand.
March 2010 exports rose strongly month-on-month while imports increased even more, widening the monthly deficit but reducing the April-March annual trade deficit versus the prior year; oil and non-oil imports both surged in March yet declined on a cumulative April-March year-on-year basis. The release presents provisional US dollar and rupee figures for 2009-10 against final 2008-09 data.

FDI prohibition in manufacture of cigars and cigarettes bars foreign investment and removes prior government-approval route.
The policy establishes a prohibition on Foreign Direct Investment in the manufacture of cigars, cheroots, cigarillos and cigarettes of tobacco or tobacco substitutes, deleting the prior provision that permitted 100% FDI under the Government route subject to approval and industrial licence, and inserting the activity into the enumerated list of prohibited sectors in the Consolidated FDI Policy with immediate effect.

Exemption from service tax for vocational training institutes offering designated trades under notified apprenticeship rules.
Exemption from service tax applies to vocational training provided by Industrial Training Institutes or Industrial Training Centres affiliated to the National Council for Vocational Training when those institutes offer courses in designated trades notified under the Apprentices Act, 1961; eligibility depends on conformity with Schedule I entries specifying trade, apprenticeship period, apprentice to worker ratio, training duration and educational qualifications.

Service Tax Exemption for approved Modular Employable Skill training under SDIS enables registered VTPs to claim relief.
Notification No. 23/2010 ST grants a service tax exemption for vocational training delivered as Modular Employable Skill courses where the provider is a Vocational Training Provider registered under the Skill Development Initiative Scheme with the Directorate General of Employment and Training; to claim the exemption the provider must deliver NCVT-approved MES courses listed with specified course codes, minimum qualifications, ages, durations and training fees, with curricula and the authoritative course list available via DGET.

Service tax changes: air travel caps limited, construction abatement raised and specific housing and skill-course exemptions introduced.
Service tax measures cap the effective levy on passenger air travel and exempt domestic North-Eastern travel; construction-sector relief increases the abatement rate from 67% to 75% where gross value includes land and simplifies completion-certificate procedures; exemptions are provided for low-cost urban housing construction effective from a notified date after enactment; modular skill-development courses under the government skill initiative are exempted with immediate effect.

Debt relief package for small coffee growers: government and banks share loan waivers and rescheduling measures.
A targeted relief scheme provides a Debt Relief Package for coffee growers: pre-2002 term loans receive 50% waiver by the Government (capped per farmer), 25% waiver by banks, and the balance rescheduled; crop loans receive a 20% waiver split equally between Government and banks (subject to a cap); post-2002 term loans receive a 10% Government waiver (subject to a cap); medium and large farmers are allowed rescheduling. The package allocates financial burden between Government and banks and sets per-beneficiary caps and rescheduling rules.