TaxTMI Updates e-Newsletter
Jan 09,2012

Summary: Section 32 distinguishes a quantified allowable depreciation under subsection (1), computed at prescribed rates on SLM or WDV, from the actual amount permitted in assessment under subsection (2), which may be restricted to the extent of chargeable profits. Unallowed depreciation due to inadequate chargeable income is carried forward and treated as part of subsequent years' depreciation and for computing written down value.

Summary: The speech details SPMCIL's corporatization to improve efficiency, its operational improvements and Mini Ratna status, governance reforms including SAP ERP and a revised Procurement Manual, and an investment-driven indigenisation program to establish domestic banknote paper lines and expand ink production. It notes enactment of The Coinage Act 2011 consolidating coinage law, empowering new mints and prescribing imprisonment and fines for illegal coin manufacture or destruction, and describes steps to upgrade banknote security features via a high-level committee and commissioning of a new printing line at Dewas to reduce counterfeiting.

Summary: The Finance Minister emphasized two priorities: directing banks to expand access to underserved habitations using models such as branchless banking with Business Correspondents and ICT under the Financial Inclusion and Swabhiman initiatives, and committing the Government to maintain enhanced Tier I capital buffers for public sector banks while implementing Basel III capital regulations and accommodating additional Basel III provisions to ensure adequate capitalization and alignment with global norms.

Summary: The speech emphasises strengthening capital adequacy through phased Basel implementation and government commitment to keep public sector banks adequately capitalised while addressing rising NPAs and market risks through tighter supervision; it also prioritises bank-led financial inclusion using technology and Business Correspondents, supported by targeted schemes, digital payment systems for direct transfers, and enhanced talent development in banks.

Summary: The Finance Minister emphasizes strengthening health financing and infrastructure by increasing plan allocations, implementing PMSSY for secondary and tertiary care, expanding postgraduate medical seats through teacher student ratio revisions and college upgradation, and addressing private out of pocket dominance. He links sustained higher growth and resource mobilization to inclusive development, endorses gender budgeting to convert gender commitments into budgetary allocations, promotes financial inclusion via technological and Business Correspondent models, and highlights Self Help Groups and statutory social entitlements as central to delivering benefits to marginalized groups.

Summary: The address calls on the accountancy profession to strengthen transparency, ethics and high-quality financial reporting to support inclusive growth and accountability, assist implementation of the Direct Taxes Code and GST, and contribute to capacity building for tax and financial sector reforms led in part by the Financial Sector Legislative Reforms Commission.

Summary: Import of designated sensitive items increased during April-October 2011 versus the prior year, raising their share of total imports. Milk and milk products and food grains fell while edible oil, automobiles, fruits and vegetables, pulses, rubber, textiles, small-scale industry products, spices, stone products, alcoholic beverages and tea and coffee rose. Edible oil increases were driven by crude palm oil and its fractions, with both crude and refined edible oil imports up. Supplier composition shifted with rises from several countries and declines from others.

Summary: Interest rates on small savings schemes are fixed at the time of individual investment and remain unchanged for that investment's term, despite annual alignment with Government securities; revisions apply only to investments made in the period of revision. Public Provident Fund accounts receive an annual rate that applies uniformly to all PPF accounts for that year.

Summary: Appointment of a Common Adjudicating Authority assigning specified show-cause notices issued by the Directorate of Revenue Intelligence to the Commissioner of Customs (Import & General), New Custom House, for adjudication, with the notices and named importer parties listed and administrative circulation instructed for implementation.

Summary: No export permission is required for supply of SCOMET items from DTA to SEZ, but suppliers must report each supply to the Development Commissioner of the recipient SEZ within one week using Annexure 1. The Development Commissioner must submit an annual consolidated report of such supplies to the SCOMET Cell, DGFT in Annexure 2 by fifteenth May for the preceding financial year. Export permission continues to be required for physical exports of SCOMET items from SEZ to other countries.

Summary: Notification prescribes modifications to the Income-tax Act to implement the Centralised Processing of Returns Scheme by making electronic transmission and processing the operative mechanism, treating electronic transmission date as the date of furnishing where Form ITR-V is timely submitted, allowing rejection of non compliant ITR Vs, requiring electronic filing of revised returns, enabling electronic service and processing of defective returns and rectification applications, determining liabilities after automated credit of TDS/TCS and validated tax payments, issuing electronic intimations that may operate as notices of demand, and conferring procedural rule making powers on the Director General.

Summary: The scheme creates a Centralised Processing Centre to handle electronically filed returns and specified paper returns, mandates electronic acknowledgments (including Form ITR-V when unsigned), sets submission timelines and validity conditions, authorises automatic validation of TDS/TCS and challan credits, generates electronic intimations that operate as notices of demand, restricts personal appearances, requires electronic communication and evidence, provides for electronic rectification and revised returns, and empowers the Director General and Commissioner to specify procedures and condone delays.

Summary: Rule 11 OA prescribes the procedure and form (Form No. 3CN) for notification of an affordable housing project as a specified business for entitlement to the tax deduction: application to the Board, deficiency procedure and cure period, powers to seek documents, requirement of hearing before invalidation/rejection/withdrawal, communication of orders, and Board's power to publish or withdraw notification. It sets cumulative eligibility conditions on sanction, commencement, plot size, unit type area percentages, layout approval and project completion timeframe; requires separate project accounts and timely returns; and defines unit categories, rentable area measurement and specified cities.

Summary: Amendment under section 118 revises a prior notification to designate the Director General of Income tax (International Taxation), Delhi as the controlling authority and to identify Director of Income tax (Transfer Pricing), Bangalore with specified Joint Commissioner and Deputy/Assistant Commissioner posts in Bangalore; it also inserts a new entry assigning the Director of Income tax (Transfer Pricing), Hyderabad with specified Joint Commissioner and Deputy/Assistant Commissioner posts in Hyderabad as designated Transfer Pricing Officers.

Summary: The notice directs conversion of temporary service-tax registrations into PAN based registration under Section 69 and Rule 4: applicants must apply in Form ST-1 and, after verification, receive Form ST-2; those without PAN were earlier issued temporary numbers but must now obtain PAN, submit a xerox copy and apply to convert within one month; holders of both PAN-based and temporary registrations must surrender the temporary registration; temporary registrations will be deactivated in the ACES system after the compliance period.

Summary: The notice clarifies that for Service Tax Rules purposes an invoice must be issued within the statutory period after service completion, and completion includes all related activities that enable the provider to quantify and invoice the service (for example measurement or quality testing). The test of completion is the conclusion of those activities that place the provider in a position to issue the invoice; flimsy or irrelevant reasons cannot justify delay. This clarification also applies to determining completion dates in cases of continuous supply of service.

Summary: Allocation of a 10,000 metric tonne CXL Concessions Sugar quota for October 2011-September 2012 is made to M/s Indian Sugar Exim Corporation Limited for export to the EU under HS Code 1701 00 00. Release into free circulation in the EU requires a certificate of origin per EU Regulation (EC) No. 891/2009 and related provisions; GSP certificates shall be issued by Export Inspection Agency/DGFT and EUR Forms endorsed by Customs at the port of shipment.

Summary: A Tariff Rate Quota of raw cane sugar from the non-levy (free sale) quota is allocated for export to the USA and must be exported through the designated exporter, M/s. Indian Sugar Exim Corporation Ltd., subject to existing preferential export procedures including issuance of GSP certificates and any other prescribed certification requirements.