By V. Sivasubramanian In this year’s budget, i.e. Budget 2014-15, the Joint Secretary, Tax Research Unit [JS (TRU)-I], Central Board of Excise & Customs [‘CBEC’ or ‘Board’], has sought to clarify the legal position involving interpretation of certain Customs and Central Excise notifications through an annexure to his covering letter [see end note 1] addressed to the Chief Commissioners and Co...

By Sumeet Khurana and Rajat Juneja Backdrop One of the most apprehensive subjects for India for last couple of years has been the dwindling rupee value which besides triggering inflation and broadening the current account deficit has also augmented certain tax related issues. One such issue stems from the concerns relating to the treatment of foreign exchange loss arising on revaluation of ...

By Chaitanya Bhatt Section 66E(b) of the Finance Act, 1994 enacted pursuant to the introduction of the negative list regime with effect from 1-7-2012 reads as under: “SECTION 66E. Declared services. — The following shall constitute declared services, namely :— …………… (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sal...

By Sumeet Khurana & Ashish Karundia In this era of rapid globalization, the multinational companies (MNCs) are increasingly outsourcing ‘non-integral’ and ‘non-revenue generating’ (business support) functions to their subsidiaries or to third party vendors, located in low cost jurisdiction such as India. At times, MNCs send their employees, having expertise in the respective field to help the...

By Shivam Mehta and K. Prathiba Valuation under Central Excise law has always been one of the areas of dispute and it has again been brought to the fore front of discussions with the recent decision of the Supreme Court in the case of Super Synotex (India) Ltd and Others. In this case, the issue of inclusion of a part of the sales tax amount collected and retained by the manufacturer as allow...

By Shweta Kathuria Rule 7 of the Cenvat Credit Rules [‘Credit Rules’ for short] relating to distribution of credit by an Input Service Distributor (“ISD”) has always been a problem area of the Credit Rules. Ever since the inception of this concept, it has always been surrounded by doubts and confusions. To understand the issues, let us first understand the concept of ISD. This concept was fir...

By Geetika Srivastava                     As rightly quoted by Ralph Waldo Emerson – “For every benefit you receive a tax is levied”. Taxes are now being levied on many transactions. However, education has always remained tax free. Our tax statutes have always spared education provided at primary and secondary levels. Under service tax law such benefit has been extended to even vocational t...

By Iype Mathew                     One of the special features of the negative list based service tax regime, introduced with effect from 1st July, 2012, is the introduction of the concept of declared services (Section 66E of the Finance Act, 1994).  Declared services, which are actually described in 9 serial entries, are required to be treated as ‘service’ for the purposes of the Finance Ac...

By Chetan Agrawal & Tushar Aggarwal  The Supreme Court in the case of Larsen & Toubro Limited & Anr v. State of Karnataka & Anr.[ see end note 1] (hereafter referred to as ‘judgment’) has re-affirmed and upheld the legal position earlier taken by the Division Bench of the Supreme Court in the case of K. Raheja Development [ see end note 2 ]. Further, the Supreme Court upheld the Constitution...

By R. Subhashree The media, in recent months, has been focussing extensively on tax planning, tax avoidance and aggressive tax planning. All ingredients that go into a good story- big monied corporates funnelling money to low-tax jurisdictions, abusing the  legitimate means  and incentives , the shocked  ordinary tax payer with no resources to plan or effect similar savings… have been used to...

By Narendra Singhvi & Chetan Agrawal International transactions involving provision of services now revolve around the concept of place of provision of service. Service tax is imposed under Section 66B of the Finance Act, 1994 where the provision of service is from one person to another and the place of provision is in the taxable territory. The place of provision of a service is determinabl...

By Visali Kumar & Jagannadh Grandhi                   As we approach the second year in the negative list based regime in service tax, there are many issues which have not been comprehended yet. Section 66B of the Finance Act, 1994 ( ‘the Act’) is the new charging section which replaced the earlier charging section, paving way for the new and wide net of service tax. This section provides th...