Covers April 2013 - bizsolindia.com · Rahul Gandhi also has done it again. He addressed the top...

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Bizsol UPDATE April- 2013

As we go to Press news is coming in that theirrepressible Mamata Banerjee has done it again.

She is practicing what she has learnt all these yearsas a political activist. Violence has to be dealt withviolence, collateral damages even in the form ofprecious human lives notwithstanding. She is in a stateof denial and that is the only way in which you candeal with a hostile Press baying for her blood. Shewas a rebel with a cause. Today she has become arebel without a pause. She gives the impression thatshe is not enamored by power; but she is also notconcerned about the responsibility that comes withpower. She is yet to come to grips with the reality ofgoverning a state which is already in a state of ruinsthanks to the long misrule by the Left. Left frontgovernment in West Bengal used violence as a toolto suppress dissent and the Mamata and her party isusing violence as a state policy to usher in her'poribartan' in Bengal. When the process becomesthe ideology one can only hope and pray.

Rahul Gandhi also has done it again. He addressedthe top honchos of the business world and did someplain speaking to the discomfiture of his own partymen. Had he been an Opposition leader his speechwould have done any party proud. Unfortunately it ishis party which has been in power for the last so manyyears. His speech was top class as speeches go. Butit is the context that is the enemy. When your party isin power what have been doing all these years? It isdifficult to shirk the responsibility for what is happeningwhen your party itself was in power. The speech wasmore in the nature of self recrimination thanintrospection. There must be a larger game plan. Hisstrategists would surely be aware of the pitfalls of suchself criticisms. One wonders if it is the beginning ofRahul distancing himself from the state of disarraythe nation is in and start afresh or he may be treatingthe elections of 2014 only as a semi final. But onething must be said for the record. His speech wasremarkable for its content though not for the context.If one were to go by the feedback of the businessmenpresent what he said was the right thing to say so

FROM THE DESK OF THE CHAIRMAN

long as you do not try to pin responsibilities onsomeone for all the mess we are in today. There isyet another angle to the Rahul speech - the inevitablecomparison with the speech of Narendra Modi recentlyto the students in a Delhi school. It may sound a bitparadoxical that Modi went to address the youth whenRahul went to address mature businessmen. Thisbrings me to my point. It is doubtful if there ever wasa bigger contrast of characters pitted against eachother in a general election in the past like this time.One stands for governance on the basis of provenrecord in a state when a young man echoes theaspirations of millions of people. When Modi is tryingto garner support on the basis of tangibledevelopmental gains (read GDP), Rahul is showingthe chinks in the armor of Modi in terms of humandevelopment indices by talking and focusing onpoverty alleviation. Here is an aside as well. You don'tcall the Gujarat Chief Minister by his first name andyou do not feel comfortable calling the Congress VicePresident by his surname! The next general electionsoffer a clear choice - the urbane youth against theseasoned pracharak.

The world (the catholic community included) has anew Pope. It was not the newness of the Pope whichmade news. It was the newness of his actions whichdrew people's attention. After John Paul II here is apontiff who came down from his regal papal pedestalto that of the ordinary man! Some people have a knackof connecting with his constituents effortlessly. PopeFrancis belongs to this clan. Whether you are apresident or a peasant it is the simplicity and humilityof the individual which draws people to you. They havebecome rare commodities in this world of pomposityand posturing. For Pope Francis the job is alreadycut out. For a Pope as a spiritual leader the mainchallenge used to be to get the people to come backto the Church or prevent them from leaving it. Butnow after so many scandals and intrigues concerningthe Church coming to light the primary priority of thepresent incumbent would be to safeguard thisinstitution from decaying any further. It appears that

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in Pope Francis the Vatican is in safe hands. Lessonsin leadership can come from anywhere - even fromthe Pope!

Sanjay Dutt has finally decided to surrender to thelaw of the land. In an emotional press briefing he madehis intention public. For a change, he was not acting.Behind that decision is a well thought out plan. WhenJustice Markandeya Katju took up the cudgels onbehalf of Sanjay Dutt for mercy, even the slim chancethat Sanjay enjoyed also got extinguished. The formerJustice of the Supreme Court advocated for mercyfor Sanjay the actor and not for Sanjay the man!Coming from a former judge of the Supreme Court,one expected better than some bizarre reasoningwhich he himself is finding it difficult to defend. If onewere to extend his convoluted logic Ben Kingsley, theEnglish actor can get away with murder in Indiabecause he played the role of Gandhi in the film ofthe same title! Katju is like the proverbial loose cannon.He is the only former justice with so manycontroversies to his credit since his retirement fromthe Bench. In his eagerness to help Sanjay he appearsto have spoilt the latter's chances totally. Katju madethe case high profile and tried to defend theindefensible proving the maxim that good judges neednot necessarily be good lawyers. He succeeded ingetting the public opinion divided with a majorityfavoring stringent punishment for Sanjay Dutt. Thestrategy of Sanjay now appears to be that of displayinghis respect to the judiciary and public opinion and tryto come out of jail with maximum leniency for goodconduct. If you have friends like justice Katju you don'tneed enemies!

There was a time when India was considered a bullyin the region with all its neighbors wary of its bigbrotherly attitude. India's hegemony in the region wasresented by all the neighbors but accepted by themas a fact of life. Now India instead of being a bully istrying hard to become a pariah in the region. Goneare the days when it could command respect for itsforeign policy initiatives and commitments. Instead,what you are witnessing is a caricature of a nationdrawn by regional parties within the nation with evershifting ideologies. There is not even a single neighborwho genuinely looks up to India for what it stands for.The long list now includes Sri Lanka. The Tamil partiesare playing politics with the future Tamils in Sri Lanka.By demanding a separate nation these parties arenow trying to increase the hostility between the Tamilsand the Singhalese. The stand of the Kazhagams in

Tamil Nadu is also sure to help those who demandplebiscite in Kashmir. In the not too distant past whenatrocities were committed against the Tamils in SriLanka, LTTE was there to defend the Tamils by fairor foul means. With the LTTE gone these very samepeople are sitting ducks for the chauvinisticSinghalese. Remember that the Singhalese can alsobe as chauvinistic as the Tamils.

Even as India was trying to become a pariah in theregion, there was a redeeming victory of sorts whenit dealt with the Italian Marines who tried jump bail.Some tough talking and deft maneuvering saw thecountry getting the better of the Italian shenanigans.It sure helps to have a smart Foreign Minister who isnot only articulate but also presentable in the worldstage. Salman Khurshid appears to have found anideal ministry for himself. He is perhaps the best aftera long time as the Minister of External Affairs afterVajpayee. Even Pranab Mukherjee as the ForeignMinister was more involved in the domestic politicalaffairs of his party and government than on the onthe world stage. This is also one instance where thePrime Minister for a change took a stand. It seemswhenever he says 'do it or else' he means business.The problem is he rarely says this refrain. The returnof the Italian Marines also meant that the CongressPresident was spared a major embarrassment. Thenation is used to smelling a rat sauce in every Italianpizza that is served.

When American authorities are silent which theyseldom are, one has a cause to worry. This hashappened before the Iraq war and the Afghaninvasion. Now is the turn perhaps of North Korea. TheAmericans are preparing for the inevitable or areengaged seriously in track II diplomacy for sure. It islikely to be the former. The US may even considerthe Korean posturing a blessing in disguise. A precisehigh intensive strike at the nuclear installations of NorthKorea now cannot be ruled out. It is increasinglypossible that the US would take advantage of thepresent situation to go to war with North Korea withworld majority of world opinion on its side. Moreover,Kim Jong-un is threatening to attack the US and noless. If there is a war and the Americans succeed anation would be liberated or else a few nations willperish in a nuclear holocaust. One can only hope forthe best.

Thank you.

Venkat R. Venkitachalam

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CUSTOMS

Notifications

Anti Dumping

• Continuation of Anti-dumping duty on imports of

Flat Base Steel Wheels, originating in, or

exported from, People's Republic of China, is

imposed for a further period of five years.

[Notification No. 03/2013-CUS (ADD) Dated

26/03/2013]

• Imposition of anti-dumping duty on imports of

Meta Phenylene Diamine' (MPDA) originating in,

or exported from, the People's Republic of China

for the period of Six months from the date of 22nd

March, 2013. [Notification No. 2/2013-CUS

(ADD) Dated 22/03/2013]

Safeguard Duty

• No New Notifications.

Tariff

• Exemption of import duty of Pulses has been

extended to 1st Day of April 2014. [Notification

No. 18/2013-CUS Dated 17th Mar 2013]

• There is a revision of Customs duty rates when

the goods are originated & imported under

covered under Comprehensive Economic

Partnership Agreement (CEPA) between India

and Japan. [Notification No. 17/2012-CUS

Dated 26/03/2013]

• Exemption to imports relating to Defence and

Internal Security Forces has been extended to

Air-to-Air Missile System (Project ASTRA) of the

Ministry of Defence. [Notification No. 16/2013-

CUS Dated 25/03/2013]

Non-Tariff

• Tariff value (US $ per Metric Tonne) of the goods

Crude Palm Oil, RBD Palm Oil, Others Palm Oil,

Crude Palmolein, RBD Palmolein, Others

Palmolein, Crude Soyabean Oil, Brass Scrap (all

grades), Poppy seeds as well as Gold and Silver

has been revised. [Notification No. 32/2013-

Cus (NT) Dated 28/03/2013, Notification No.

30/2013-CUS (NT) Dated 15/03/2013 &

Notification No. 26/2013-Cus (NT) Dated 01/

03/2013]

Circulars

• CBEC has directed that export consignments of

perishable agricultural goods should not be

examined in a routine manner and should be

examined only in cases of specific intelligence

with prior permission of concerned Assistant

Commissioner / Deputy Commissioner of

Customs. Such perishable cargo which is taken

up for examination should be given Customs

clearance on the same day itself. [Circular

No.12/2013-CUS Dated 02/04/2013]

• Procedure has been defined for operationalised

the scheme as per new para 4A and 16A of FTP

2009-2014 for setting up Private / Public Bonded

Warehouses in SEZ/DTA for import and re-export

of cut and Polished diamonds, cut and polished

coloured gemstones, uncut & unset precious &

semi-precious stones, subject to achievement of

Minimum Value Addition (VA) of 5%. [Circular

No. 11/2013-CUS Dated 06/03/2013]

• Corresponding procedure has been specified in

case of Post Export EPCG Duty Credit Scrip(s)

Scheme and certain other changes related to

Foreign Trade Policy 2009-14 and Customs

Notification No. 03/2013 Dated 13/02/2013.

[Circular No. 10/2013-CUS Dated 04/03/2013]

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• Bank Guarantee exemption as specified in

Circular No. 58/2004 shall be admissible subject

to the following conditions;

a) The license holder has not defaulted on the

export obligation in respect of any Advance

License/EPCG Licence issued to him in the

past. The BG exemption shall stand

withdrawn if DGFT or Customs comes

across default in export obligation against

any Advance License/EPCG License issued.

b) For the purpose of availing BG exemption

in terms of Para 3.1 above, the exporter

shall submit the proof of export

performance or payment of duty, as the

case may be, duly certified by the

jurisdictional Superintendent of Central

Excise in case he is registered with the

Central Excise. In cases where the exporter

is not registered with the Central Excise, but

he is a registered member of an Export

Promotion Council, he shall produce a

certificate from the concerned Export

Promotion Council. In other cases the

exporter shall produce a certificate duly

authenticated by a practicing Chartered

Accountant, who is registered with the

Central Excise Department for payment of

service tax, along with evidences of export

to the satisfaction of the Assistant

Commissioner or Deputy Commissioner.

The Chartered Account issuing the certificate

will mention his STC code and other

registration details in the certificate.

c) The License holder should not have been

penalized during the previous three financial

years in cases booked against him related

to Customs, Central Excise or Service Tax

under the provisions of the Customs Act,

1962, the Central Excise Act, 1944, the

Finance Act, 1994 (for Service Tax), as

detailed below:

1) Cases of duty evasion involving mis-

declaration / mis-statement/collusion / willful

suppression / fraudulent intent whether or

not extended period for issue of show cause

notice has been invoked.

2) Cases of mis-declaration and/or clandestine/

unauthorized removal of excisable / import

/ export goods warranting confiscation of

said goods.

3) Cases of mis-declaration / mis-statement /

collusion / willful suppression / fraudulent

intent aimed at availing CENVAT credit,

rebate, refund, drawback, benefits under

export promotion/reward schemes.

4) Cases wherein Customs/Excise duties and

Service Tax has been collected but not

deposited with the exchequer.

5) Cases of non-registration with the

Department with intent to evade payment

of duty / Tax or in cases booked against

him under the Foreign Exchange

Management Act (FEMA), 1999 or the

Foreign Trade (Development and

Regulation) Act, 1992. In order to ascertain/

verify whether the License/Authorization

holder meets this criterion he may be asked

to furnish an affidavit. The Commissioners

shall ensure that some of the affidavits

furnished are cross checked randomly with

the field formations for their veracity."

[Circular No. 08/2013-CUS Dated 04/03/

2013]

Instructions

• No New Instructions.

CENTRAL EXCISE

Notifications

Tariff

• Equipment and Stores required for systems and

sub-systems of Project ASTRA of the

Government of India in the Ministry of Defence

is exempted from payment of Excise duty w.e.f.

1st September, 2013. [Notification No. 13/

2013-CE Dated 25/03/2013]

Non-Tariff

• No New Notification.

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SERVICE TAX

Notifications• Date of submission of the Form ST-3 for the

period from July 2012 to September 2012, from

25th March, 2013 has been extended to 15th

April, 2013. [Order No. 01/2013-ST Dated

06/03/2013]

FOREIGN TRADE POLICY

Notifications• Prohibition of export of following items has been

removed w.e.f. 25/03/2013.

(a) Castor oil

(b) Coconut oil from all EDI Ports and through

Land Custom Stations (LCS) [LCS to be

notified separately]

(c) Deemed export of edible oils (as input raw

material) from DTA to 100% EOUs for

production of non-edible goods to be

exported

(d) Edible oils from Domestic Tariff Area (DTA)

to Special Economic Zones (SEZs) to be

consumed by SEZ units for manufacture of

processed food products, subject to

applicable value addition norms

(e) Edible oils produced out of minor forest

produce, ITC (HS) Code 15159010,

15159020, 15159030, 15159040,

15179010 and 15219020.

(f) 10,000 MTs of Organic edible oils per

annum. The conditions notified in

Notification No. 50 Dated 03/06/2011 for

export of organic edible oils will continue to

apply.

(g) Peanut Butter, ITC (HS) Code 15179020

Export of edible oils in branded consumer packs

of upto 5 Kgs is permitted with a M i n i m u m

Export Price of USD 1500 per MT. [Notification

No. 39(RE-2012)/2009-2014 Dated 25/03/2013]

• Prohibition on export of pulses has been

extended by one more year; from 31/03/2013 to

31/03/2014 except for Kabulichana Organic

Pulses and Lentilsupto overall ceiling of 10,000

MTs per annum subject to fulfillment of certain

conditions. [Notification No. 38 (RE - 2012)/

2009-2014 Dated 25/03/2013]

• Schedule of Special Chemicals, Organisms,

Materials, Equipment and Technologies

(SCOMET) item has been totally revised in

Appendix 3 to Schedule- 2 of ITC (HS)

Classification of Export and Import Items, 2009-

14. [Notification No. 37 (RE-2012) /2009-2014

Dated 14/03/2013]

• Import of Used Rails, including cut rails of all

lengths, under ITC(HS) Code 7302 is 'free'

subject to condition that Importer shall furnish

the specified documents to the customs at the

time of clearance of goods like Pre-shipment

inspection certificate specifying radiation level,

Copy of the contract between the importer and

the exporter. [Notification No. 36 (RE-2012)/

2009-2014 Dated 28/02/2013]

• Import of second hand capital & other goods are

allowed in accordance with following chart added

in Para 2.17 of Foreign Trade Policy, 2009-2014.

Sl. Categories of Second Import Conditions,

No. Hand Goods Policy if any

I Second Hand Capital Goods

(a) Personal computers/ laptops Restricted Importable

including their refurbished / against

re-conditioned spares Authorization

i)Photocopier machines/ Digital multi-

function Print & Copying Machines

ii) Air conditioners

iii) Diesel generating sets

(b) Refurbished / re-conditioned Free Subject to

spares of Capital Goods production of

Chartered

Engineer

certificate to the

effect that such

spares have at

least 80%

residual life of

original spare.

(c) All other second hand capital goods Free

{other than (a) &( b) above}

II Second Hand Goods other than Restricted Importable

capital goods against

Authorization

[Notification No.35 (RE-2012)/2009-2014

Dated 28/02/2013]

Public Notices

6


• Five new Pre Shipment Inspection Agencies

(PSIA) have been added and area of operation

of four existing PSIA's has been widened

(APPENDIX 5 LIST OF INSPECTION AND

CERTIFICATION AGENCIES). [PUBLIC

NOTICE No. 52(RE-2012)/2009-2014 Dated

28/03/2013]

• Duty free credit scrip under Focus Product

Scheme will also be available to all exports of

Set Top Box /Set Top Unit (STB/STU required

for receiving Digital Signals from DTH & Cable in

CKD / SKD (Sr. No. 756 Appendix 37D) with a

5% Scrip. [Public Notice No. 51 (RE-2012)/

2009-14 Dated 05/03/2013]

• Para 2.33 of Handbook of Procedure Vol. I, 2009-

2014 have been deleted as a result of the

Notification No. 35 Dated 28/02/2013 has been

amended the provision w.r.t import policy of

second hand capital goods. [Public Notice No.

50 (RE-2012)/2009-2014 Dated 28/02/2013]

Policy Circulars• No TED refund shall be provided by RAs of

DGFT/Office of Development Commissioners on

the following supplies

(i) Supply of goods under Invalidation letter

issued against Advance Authorisation [Para

8.3© of FTP];

(ii) Supply of goods under ICB [Para 8.3(c) of

FTP]; and

(iii) Supply of goods to EOUs [Para 6.11(c) (ii) of

FTP]. [Policy Circular No. 16 (RE-2012/

2009-14) Dated 15/03/2013] However, Para

8.2 & 8.3(c) has not been amended hence

there will be conflict against Policy &

Circular.

INCOME TAX

Notifications• International Institute of Information Technology

Bangalore, has been approved in the category

of "University, College or other Institution"

engaged in Research Activities for the purpose

of Section 35(1)(ii) of the Income Tax Act, 1961

i.e Deduction for Expenditure on Scientific

Research at the rate of 175% of the amount paid

to notified institutions. [Notification No. 12/2013

Dated 20/02/2013]

• Foundation for Revitalisation of Local Health

Traditions, Bangalore has been approved in the

category of "University, College or other

Institution" engaged in Research Activities for the

purpose of Section 35(1)(ii) of the Income Tax

Act, 1961 from 27/09/2011 i.e. Deduction for

Expenditure on Scientific Research at the rate

of 175% of the amount paid to notified

institutions. [Notification No. 13/2013 Dated 20/

02/2013]

• Commissioner of Income-tax, Centralised

Processing Cell (TDS) shall be subordinate to

Director General of Income-tax (Systems)

institutions. [Notification No. 15/2013 Dated 26/

02/2013]

• Jurisdiction of specified Director General of

Income Tax (Systems), having Head Quarters

at New Delhi to exercise powers & functions of

Commissioner of Income-tax, Centralised

Processing Cell (TDS) [Notification No. 16/2013

Dated 26/02/2013]

• Jurisdiction of specified Commissioner of Income

Tax Centralised Processing Cell (TDS) to

exercise concurrent powers & functions of

specified authorities. [Notification No. 17/2013

Dated 26/02/2013]

• In the Electoral Trust Scheme, 2013 as per

Notification 9/2013 dated 31.3.2013, the words

Electoral Trust Scheme, 2013 to be substituted

for Electoral Trust Scheme, 2012 in para 3 (c)

and Application Form. [Notification No. 18/2013

Dated 26/02/2013]

Circulars• Circular on application of Profit Split Method:

Clarification has been issued w.r.t applicability

of Profit Split method in determining the Arm's

Length Price w.r.t R & D Activities and the

Transfer Pricing Office should record reasons for

non availability of information and therefore non

applicability of PSM before considering TNMM

or CUP as the most appropriate method

depending on the facts of each case. [Circular

7


No. 02/2013 Dated 26/03/2013]

• Circular on conditions relevant to identify

development centers engaged in contract R & D

Services with insignificant risk as under:

1) Performance of economically significant

functions by the Foreign Principal.

2) Foreign principal provides Funds / Capital.

3) Indian Development Centre works under

direct supervision of Foreign Principal.

4) Indian Development Centre has no

ownership right (legal or economic) on

outcome of research. [Circular No. 03/2013

Dated 26/03/2013]

Maharashtra VATHIGHLIGHTS OF THE BUDGET PRESENTED BY

DEPUTY CHIEF MINISTER AND FINANCE

MINISTER, SHRI AJIT PAWAR ON 20th March, 2013

1. Surveillance of transactions by Sales Tax

Department to go up.

2. Tax exemption on essential commodities,

Solapuri Chadars and Towels, Wet Dates to

continue up to 31st March, 2014.

4. Tax exemption on currants and raisins to

continue up to 31st March, 2014.

5. Concessional rate on Tea to continue up to 31st

March, 2014.

6. VAT exemption on Braille watches and vehicles

for handicapped.

7. Reduction in rate of tax of AICD heart implant

from 12.5 per cent to 5 per cent.

8. Reduction in rate of tax on certain excavators

from 12.5 per cent to 5 per cent.

9. Rice bran, Hand Pumps, Water Meter exempt

from tax.

10. Increase in tax rate of Gold, Silver and their

Jewellery from 1 per cent to 1.10 per cent and

Sugar Cane purchase tax from 3 percent to 5

percent to raise fund for drought relief for one

year.

11. Increase in tax on Biri, Cigarette and Tobacco.

12. Textile for industrial use to be taxed at 5 percent.

13. Tax on paver blocks to be increased from 5

percent to 12.5 percent.

14. Financial Institutions liable to pay stamp duty on

mortgage deeds.

15. Increase in Excise duty on country liquor, I.M.F.L.

and strong beer.

16. Increase in tax on Lottery

Notifications• Authorities are appointed for Tax Collection at

Source under section 31A, in respect of

Excavation of Sand.[Notification No. VAT.1512/

CR-149/Taxation-1 Dated 02/02/2013]

• Extension of time limit upto 30th June, 2013 for

assessments in respect of the period 2005-06

and 2008-09. [Maharashtra Ordinance No. V

of 2013]

COMPANY LAW

Notifications• According to amendments in the Companies

(Acceptance of Deposits) Rules, 1975 now 'any

amount raised by issue of bonds / debentures

secured by the mortgage of any fixed assets

referred to in Schedule VI of the Act, excluding

intangible assets of the company with an option

to convert them into shares in the company' will

not be treated as Deposits as per the definition

given in said rules, provided that the amount of

such bonds / debentures shall not exceed the

market value of such fixed asset.

Further now Registrar of Companies or any other

officer of the Central Government along with

Regional Director shall be authorized to make

the complaints under Sub-section (2) of Section

58AAA of the Act. [Notification No. GSR(E)

Dated 21/03/2013]

• According to amended rules The Central

Government or Regional Director (Northern

Region), Noida or any officer authorised by the

Regional Director, upon being satisfied on

verification of particulars of proof attached with

the application received from any person seeking

cancellation or deactivation of DIN, shall be

cancelled or deactivated in case -

8


(a) The DIN is found to be duplicate;

(b) The DIN was obtained by wrongful manner

or fraudulent means;

(c) of the death of the concerned individual;

(d) the concerned individual has been declared

as lunatic by the competent Court;

(e) if the concerned individual has been

adjudicated an insolvent;

Provided that before cancellation or deactivation

of DIN under clause (b), an opportunity of being

heard shall be given to the concerned individual.

[Notification No. GSR 173(E) Dated 15/03/

2013]

Circulars• Time limit for filing & relaxation of additional fees

as provided vide General Circular No. 03/2013

for filing of various forms with MCA for the forms

which have been ought to be filed post transition

of MCA-21 w.e.f. 17th January 2013 has been

extended up to 31st March, 2013. [General

Circular No. 07/2013 Dated 20/03/2013]

• It is clarified that in cases where the effective

yield (effective rate of return on tax free bonds is

greater than the yield on prevailing bank rate

there will be no violation of section 372(A)(3) of

Companies Act, 1956 which says that "No loon

to any body corporate shall be made at a rate of

interest lower than the prevailing bonk rate, being

standard rate made public under Section 49 of

the Reserve Bank of India Act, 1934. [General

Circular No. 06/2013 Dated 14/03/2013]

Circular NumberDate ofIssue

Department Subject Meant for

RBI Circulars

FEMA / RBI

RBI/2012-2013/449DBOD. No. Ret.BC.84 /

12.01.001/2012-13

19/03/2013 Department ofBanking

Operations andDevelopment

Bank Rate All Scheduled Commer-cial Banks & Local AreaBanks

RBI/2012-2013/448FMD.MOAG No. 77 /

01.01.001/2012-13

19/03/2013 Financial MarketsDepartment

Liquidity Adjustment Facilityand Marginal Standing Facility

All Scheduled Commer-cial Banks (excludingRRBs) and PrimaryDealers

RBI/2012-2013/447FMD.MOAG. No. 76 /

01.01.01/2012-13


Liquidity Adjustment Facility -Repo and Reverse Repo andMarginal Standing FacilityRates

All Scheduled Commer-cial Banks (excludingRRBs) and PrimaryDealers

RBI/2012-2013/439A.P. (DIR Series)

Circular No. 90

14/03/2013 Foreign ExchangeDepartment

Maintenance of Collateral byForeign Institutional Investors(FIIs) for transactions in thecash and F & O segments

All Category - IAuthorised DealerBanks

RBI/2012-2013/438FMD. MSRG. No. 75/

02.05.002/2012-13


Reporting Platform for OTCForeign Exchange and InterestRate Derivatives



Circular No.89


Money Transfer ServiceScheme - Revised Guidelines

All Authorised Persons,who are Indian Agentsunder Money TransferService Scheme

9


Circular NumberDate of

IssueDepartment Subject Meant for


Circular No. 88


"Write-off" of unrealized exportbills - Export of Goods andServices - Simplification ofprocedure

All Category - IAuthorized DealerBanks


Circular No. 87


External CommercialBorrowings (ECB) Policy -Corporates under Investigation


RBI/2012-2013/428DCM (NE) No. 3498/

08.07.18/2012-13

12/03/2013 Department ofCurrency

Management

The Chairman andManaging Director / TheChief Executive OfficerAll Banks (including Co-operative banks andRRBs)

RBI/2012-2013/427DBOD.No.BAPD.BC.82/

22.01.001/2012-13

04/03/2013 Department ofBanking

Operations andDevelopment

Branch Authorisation Policy -Information to be submitted bybanks along with AnnualBranch Expansion Plan(ABEP)

All Domestic ScheduledCommercial Banks(excluding RRBs)


Circular No. 86


Risk Management and Inter-Bank Dealings

All Authorised DealerCategory - I Banks

Facility for Exchange ofNotes and Coins

1 0


CBEC Notified Exchange Rate for Conversion of Foreign Currency w.e.f.

5th April, 2013 (Notification 35/2013-Customs (NT) dt. 04.04.2013)

SCHEDULE-I

S.No. Foreign Currency

Rate of exchange of one unit of foreign currency

equivalent to Indian rupees

(For Imported Goods) (For Export Goods)

1. Australian Dollar 57.65 56.10

2. Bahrain Dinar 148.60 140.20

3. Canadian Dollar 54.35 52.85

4. Danish Kroner 9.50 9.20

5. EURO 70.55 68.75

6. Hong Kong Dollar 7.10 6.95

7. Kenya Shilling 66.15 62.25

8. Kuwait Dinar 196.20 184.85

9. New Zealand Dollar 46.40 45.15

10. Norwegian Kroner 9.50 9.20

11. Pound Sterling 83.15 81.15

12. Singapore Dollar 44.45 43.40

13. South African Rand 6.05 5.70

14. Saudi Arabian Riyal 14.95 14.10

15. Swedish Kroner 8.50 8.25

16. Swiss Franc 58.10 56.45

17. UAE Dirham 15.25 14.40

18. US Dollar 54.90 53.90

S.No. Foreign Currency

Rate of exchange of 100 units of foreign currency

equivalent to Indian rupees

SCHEDULE-II

(For Imported Goods) (For Export Goods)

1. Japanese Yen 58.95 57.35

1 1


Applicability of Cost AuditApplicability of Cost AuditApplicability of Cost AuditApplicability of Cost AuditApplicability of Cost Audit

By CMA Ashok Nawal

Ministry of Corporate Affairs, Government of India has made Cost Audit Mandatory

almost to all companies who are engaged in manufacture, production, processing

or mining having specified turnover. Government have issued consolidated

Notification No. Dated 06/11/2012.

Importance of Cost Audit Mechanism has been correctly realized to the govt.

which focuses on performance parameter for optimal resource utilization and

bringing competitiveness amongst Indian Industries.

I give below a detailed chart specifying applicability of Cost Audit considering

various notifications and consolidated notifications and effective dated of

applicability of Cost Audit.

Productor

ActivityGroupCode

Name of the Product orActivity Group

Central Excise Tariff Act(CETA) Chapter Head-

ings covered in theProduct or Activity

Group

Turnover

Applicabilityprior to 2nd /3rd May 2011

Applicabilityafter 2nd / 3rd

May 2011

Applicabilityw.e.f. 30th June

2011

Applicabilityw.e.f. 24th Jan

2012

Applicabilityw.e.f. 06thNov. 2012

Cost Specific Order From the From the From the w.e.f. 1stAudit to the specific financial year financial year financial year Januaryw.e.f. companies starting after starting after starting after 2013

1st April 2011 1st April 2011 1st April 2012

1020 Sugar and Sugar Products 1701 to 1702 20 cr. Yes Yes

1021 Molasses 1703 20 cr. Yes Yes

1027 Ethyl Alcohol and other 2207 20 cr. Yes YesSpirits

2004 Petroleum Oils - Crude 2709 20 cr. Yes Yes

2005 Petroleum Oils - Refined 2710 20 cr. Yes Yes

2006 Petroleum Gases & otherGaseous Hydrocarbons 2711 20 cr. Yes Yes

2007 Other Petroleum Products 2712 to 2715 20 cr. Yes Yes

2008 Electrical Energy 2716 20 cr. Yes Yes

2012 Bulk Drugs 2901 to 2942 20 cr. Yes Yes

2015 Pharmaceutical Products 3001 to 3006 20 cr. Yes Yes

2016 Animal or Vegetable 3101 20 cr. Yes YesFertilizers

2017 Mineral or Chemical 3102 20 cr. Yes YesFertilizers - Nitrogenous

2018 Mineral or Chemical 3103 20 cr. Yes YesFertilizers - Phosphatic

2019 Mineral or Chemical 3104 20 cr. Yes YesFertilizers - Potassic

2020 Mineral or Chemical 3105 20 cr. Yes YesFertilizers

5101 Basic telephone services - Not Applicable 20 cr. Yeswired and WLL

5102 Cellular mobile telephone Not Applicable 20 cr. Yes Yesservices - wireless & WLL

5103 Internet and broadband Not Applicable 20 cr. Yes Yesservices

5104 National long distance Not Applicable 20 cr. Yes Yesservices

5105 International long Not Applicable 20 cr. Yes Yesdistance services

1 2


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


5106 Public mobile radio Not Applicable 20 cr. Yes Yes trunk services

5107 Global mobile personal Not Applicable 20 cr. Yes Yescommunication services

5108 Passive telecom infrastru- Not Applicable 20 cr. Yes Yescture and tower facilities

5109 Cable landing stations Not Applicable 20 cr. Yes Yes

5121 Broadcasting and related Not Applicable 20 cr. Yes Yesservices

5141 Other communication Not Applicable 20 cr. Yes Yesservices not elsewherespecified

5406 Transmission or Not Applicable 20 cr. Yes Yesdistribution of electricity

1002 Meat and Meat Products 0201 to 0210; 0410; 100 cr. Yes Yes1601 to 1603

1003 Marine Products 0301 to 0307; 100 cr. Yes Yes1604 to 1605

1004 Milk and Milk Products 0401 to 0406 100 cr. Yes Yes

1005 Poultry and Related 0407 to 0408 100 cr. Yes YesProducts

1006 Bee Products 409 100 cr. Yes Yes

1010 Vegetables 0701 to 0714 100 cr. Yes Yes

1011 Fruits and Nuts 0801 to 0814 100 cr. Yes Yes

1012 Coffee and Coffee 901 100 cr. Yes YesProducts (incl. 210111)

1013 Tea and Tea Products 902 100 cr. Yes Yes(incl. 210120)

1014 Spices - processed or 0903 to 0910 100 cr. Yes Yesunprocessed

1015 Cereals, Flour and 1001 to 1008; 100 cr. Yes YesProduct of Cereals 1101 to 1109

1016 Oil Seeds and Products 1201 to 1208 100 cr. Yes Yesof Oil Seeds

1017 Other Seeds and Plants 1209 to 1214 100 cr. Yes Yes

1018 Vegetable Saps or 1301 to 1302; 100 cr. Yes, in package YesProducts 1401; 1404 commodity

1019 Animal or Vegetable 1501 to 1518; 100 cr. Yes, in package YesFats and Oils 1520 to 1522 commodity

1022 Sugar Confectionery or 1704; 1806 100 cr. Yes, in package YesChocolates commodity

1023 Cocoa Products 1801 to 1805 100 cr. Yes, in package Yescommodity

1024 Prepared Food Products 1901 to 1905; 100 cr. Yes, in package Yes2001 to 2009; commodity2101 to 2106; 2501

1025 Mineral Water and 2201 to 2202 100 cr. Yes, in package YesAerated Drinks commodity

1 3


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


1026 Alcoholic Beverages 2203 to 2206; 2208 100 cr. Yes, in package Yescommodity

1028 Vinegar 2209 100 cr. Yes, in package Yescommodity

1029 Food Residues or 2301 to 2309 100 cr. no YesPrepared Animal Feed

1030 Unmanufactured and 2401; 2403 100 cr. no YesManufactured Tobacco

1031 Tobacco Products 2402 100 cr. no Yes

2001 Mineral Products 2502 to 2522; 100 cr. no Yes2524 to 2526;2528 to 2530;2601 to 2621

2002 Cement 2523 100 cr. Yes, only for Yes Yescement

2003 Mineral Fuels 2701 to 2708 100 cr. Yes, for coal Yes(other than Petroleum) & lignite

2009 Chemical Elements 2801 to 2805 100 cr. Yes Yes

2010 Inorganic Chemicals and 2806 to 2837; 100 cr. Yes Yestheir Derivatives 2839 to 2850;

2852 to 2853

2011 Organic Chemicals and 2901 to 2942 100 cr. Yes Yestheir Derivatives(excluding Bulk Drugs)

2013 Albuminoidal Substances, 3501 to 3507 100 cr. YesStarches, Glues & Enzymes

2014 Miscellaneous Chemical 3801 to 3807; 100 cr. Yes, only for Yes YesProducts 3809 to 3825 products

covered underInsecticide Act*

2021 Tanning Substances 3201 to 3202 100 cr. Yes Yes

2022 Colors, DYes and Pigments 3203 to 3207; 3212 100 cr. Yes Yes

2023 Paints and Varnishes 3208 to 3211 100 cr. Yes, only for Yes Yespaints andvarnishes

2024 Inks and Colors 3213; 3215 100 cr. Yes Yes

2025 Plasters and Fillers 3214 100 cr. Yes Yes

2026 Essential Oils 3301 to 3302 100 cr. Yes

2027 Personal Care Products 3303 to 3307; 8212; 100 cr. Yes9615 to 9616

2028 Soaps, Detergents and 3401 to 3402 100 cr. YesCleaning Agents

2029 Lubricating Preparations 3403 100 cr. Yes

2030 Waxes and Wax Products 3404 to 3407 100 cr. Yes

2031 Explosives 3601 to 3603 100 cr. Yes

2032 Fireworks, Matches and 3604 to 3606 100 cr. YesCombustible Materials

2033 Photographic and 3701 to 3707 100 cr. YesCinematographic Goods

1 4


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


2034 Insecticides 3808 20 cr Yes Yes Yes

2035 Chemicals - Plastics and 3901 to 3915 100 cr. Yes YesPolymers

2036 Articles of Plastics and 3916 to 3926 100 cr. Yes YesPolymers

2037 Rubber and Rubber 4001 to 4010; 100 cr. YesProducts 4014 to 4017

2038 Rubber Tyres and Tubes 4011 to 4013 100 cr. Yes Yes Yes

3001 Raw Hides, Skins 4101 to 4107; 100 cr. Yesand Leather 4112 to 4115

3002 Leather Products 4201 to 4203; 100 cr. Yes4205 to 4206

3004 Wood & Wood Products 4401 to 4421 100 cr. Yes

3007 Pulp of Wood and other 4701 to 4707 100 cr. Yes Yessubstances

3008 Newsprint 4801 100 cr. Yes Yes

3009 Paper and Paperboard 4802 to 4813 100 cr. Yes, only Yes, only Yesfor paper for paper

3010 Articles of Paper and 4814; 4816 to 4823 100 cr. Yes YesPaperboard

3012 Silk 5001 to 5003 100 cr. Yes Yes

3013 Silk Yarn 5004 to 5006 100 cr. Yes Yes

3014 Silk Fabrics 5007 100 cr. Yes Yes

3015 Wool 5101 to 5105 100 cr. Yes Yes

3016 Wool Yarn 5106 to 5110 100 cr. Yes Yes

3017 Wool Fabrics 5111 to 5113 100 cr. Yes Yes

3018 Cotton 5201 to 5203 100 cr. Yes Yes

3019 Sewing Thread 5204; 5401 100 cr. Yes Yes

3020 Cotton Yarn 5205 to 5207 100 cr. Yes Yes

3021 Cotton Fabrics 5208 to 5212 100 cr. Yes Yes

3022 Other Textile Yarns or 5301 to 5303; 100 cr. Yes YesFibers 5305 to 5308

3023 Other Textile Fabrics 5309 to 5311 100 cr. Yes Yes

3024 Synthetic Yarns or Fibers 5402 to 5406; 100 cr. Yes Yes5501 to 5511;5601 to 5609

3025 Synthetic Fabrics 5407 to 5408; 100 cr. Yes Yes5512 to 5516

3026 Carpets and textile 5701 to 5705 100 cr. Yes Yesfloor coverings

3027 Other Textile Fabrics or 5801 to 5811; 100 cr. Yes YesProducts 5901 to 5911; 6301;

6305 to 6310

3028 Knitted or Crocheted 6001 to 6006 100 cr. Yes YesFabrics

3029 Apparel and Clothing 6101 to 6117; 100 cr. Yes Yes6201 to 6217

1 5


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


3030 Furnishings 6302 to 6304 100 cr. Yes Yes

3031 Footwear and Parts 6401 to 6406 100 cr. Yesthereof

3032 Headgear and Parts 6501 to 6502; 100 cr. Yes thereof 6504 to 6507

3036 Articles of Stones, Plaster, 6801 to 6815 100 cr. Yes YesCement, Asbestos & Mica

3037 Ceramic Products 6901 to 6914 100 cr. Yes

3038 Glass and Glass Products 7001 to 7011; 100 cr. Yes Yes7013 to 7020

3039 Pearls, Diamonds, Stones 7101 to 7118 100 cr. Yesand Jewellery Articles

4001 Primary Ferrous Materials 7201 to 7205 100 cr. Yes

4002 Iron and Non-Alloy Steel 7206 to 7217 100 cr. Yes Yes Yes

4003 Stainless Steel 7218 to 7223 100 cr. Yes Yes Yes

4004 Other Alloy or Non-Alloy 7224 to 7229 100 cr. Yes Yes YesSteel

4005 Steel Products 7301 to 7326 100 cr. Yes Yes Yes

4006 Copper and Copper 7401 to 7413; 7415; 100 cr. Yes, only forProducts 7418 to 7419 mining,metallurgy,

ferrous & Yesnon-ferrous

4007 Nickel and Nickel 7501 to 7508 100 cr. Yes, only for YesProducts mining,metallurgy,

ferrous &non-ferrous

4008 Aluminum and 7601 to 7616 100 cr. Yes Yes, only for YesAluminum Products mining,metallurgy,


4009 Lead and Lead Products 7801 to 7802; 100 cr. Yes, only for Yes7804; 7806 mining,metallurgy,


4010 Zinc and Zinc Products 7901 to 7905; 7907 100 cr. Yes, only for Yesmining,metallurgy,


4011 Tin and Tin Products 8001 to 8003; 8007 100 cr. Yes, only for Yesmining,metallurgy,


4012 Other Base Metals and 8101 to 8113; 100 cr. Yes, only for Yestheir Products 8301 to 8311 mining,metallurgy,


4013 Hand Tools 8201 to 8211; 100 cr. Yes, only for Yes8213 to 8215 mining,metallurgy,


4014 Nuclear Reactors and 8401 100 cr. Yes YesAccessories

1 6


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


4015 Boilers and Accessories 8402 to 8404 100 cr. Yes Yes

4016 Engines or Motors and 8405 to 8412 100 cr. Yes Yesparts thereof

4017 Machinery and 8413 to 8484; 100 cr. Yes YesMechanical appliances 8486 to 8487

4018 Electric Motors, and 8501 to 8505 100 cr. Yes YesGenerators, TransformersParts thereof

4019 Batteries and 8506 to 8507 100 cr. Yes YesAccumulators

4020 Electrical and Electronic 8508 to 8519; 100 cr. Yes Yes8521 to 8523;

Equipments or Appliances 8525 to 8548 100 cr. Yes Yes

4021 Railway Rolling Stock 8601 to 8606 100 cr. Yes

4022 Parts of Railway 8607 100 cr. YesRolling Stock

4023 Railway Track Fixtures 8608 100 cr. Yesand Fittings

4024 Containers 8609 100 cr. Yes

4025 Commercial Vehicles 8701; 8704 to 8707; 100 cr. Yes(3 or more wheels) 8709; 8716

4026 Passenger Vehicles 8702 to 8703 100 cr. Yes Yes(4 or more wheels)

4027 Parts and Accessories of 8708; 8714 100 cr. Yes YesVehicles

4029 Passenger Vehicles 8711; 8713 100 cr. Yes Yes(2 and 3 Wheelers) -Motorized

4030 Passenger Vehicles 8712; 8713; 8715 100 cr. Yes Yes(2 or 3 Wheelers) -Non Motorized

4031 Non-powered Aircraft 8801; 8803 100 cr. Yesand parts thereof

4032 Aircraft, Spacecraft and 8802 to 8803; 8805 100 cr. Yesparts thereof

4033 Parachutes and 8804 100 cr. YesRotochutes

4034 Ships and Boats 8901 to 8904 100 cr. Yes

4035 Floating Structures 8905 to 8908 100 cr. Yes

4036 Optical Equipments and 9001 to 9005; 100 cr. Yesparts thereof 9012 to 9013; 9033

4037 Photographic or 9006 to 9008; 100 cr. YesCinematographic Equip- 9010 to 9011; 9033ment and parts thereof

4038 Measuring Instruments 9014 to 9017; 100 cr. Yesand parts thereof 9023 to 9033

4039 Surgical or Medical 9018 to 9022; 9033 100 cr. YesInstrument andparts thereof

1 7


Productor

ActivityGroupCode




Group

Turnover



May 2011


2011


2012


4040 Clocks or Watches and 9101 to 9114 100 cr. YesParts thereof

4041 Musical Instruments 9201 to 9202; 100 cr. Yesand Parts thereof 9205 to 9209

4043 Medical or Vehicular or 9401 to 9404 100 cr. Yesother Furniture andMattress & parts thereof

4044 Lights and Fittings 9405 100 cr. Yes

4045 Prefabricated Buildings 9406 100 cr. Yes

4046 Toys, games and sports 9503 to 9508 100 cr. YesEquipments

4047 Stationery Items 9608 to 9612 100 cr. Yes

4048 Miscellaneous 9601 to 9607; 100 cr. Yesmanufactured articles 9613 to 9614;

9617 to 9618

• Cost Audit under Sec 233B of Companies Act, 1956

A. The Product or Activity Groups referred to in Table-I & II above shallinclude all products/activities included in the corresponding CETAChapter Headings mentioned therein irrespective of whether Central ExciseDuty is levied or not.

B. In respect of those Product or Activity Groups mentioned in Table Iabove corresponding to which no CETA Chapter Headings areapplicable, the product/activity groups shall include all such activitiesthat fall under the meaning of the respective product/activity group andare covered by the related Cost Accounting Records Rules mentioned inPara 2 above.

C. In case of all such activities that are covered under the Cost AccountingRecords Rules mentioned in Para 2 above that are also covered underCost Audit but for which no Product or Activity Group has been indicatedin Table-I above, companies would use the appropriate Product or ActivityGroup code as given in the notification issued vide S.O. 1747(E) dated7th August, 2012.

D. Any company engaged in the production, processing or manufacturing ofsuch inorganic or organic chemicals or any other substances that areprimarily meant for pharmaceutical applications/use and are coveredunder the Cost Accounting Records (Pharmaceutical Industry) Rules2011 shall be subject to Cost Audit as per the terms mentioned in Para 2above, irrespective of whether these are covered in the Product or ActivityGroups mentioned in Table-II above.

E. Any company engaged in the storage, transportation or distributionof crude oil or gases or biogas or any or all types of petroleum products,and is covered by the Cost Accounting Records (Petroleum Industry)Rules, 2011 shall be subject to Cost Audit as per the terms mentioned inPara 2 above.

F. Product Group No. 2008 - Electrical Energy mentioned in Table-I abovewould mean and be understood as generation of electrical energy orgeneration of electricity.

G. Product Group No. 1026 - Alcoholic Beverages mentioned in Table-IIabove would mean and include all products/activities covered in theChapter Headings 2203 to 2208 of the Customs Tariff Act, 1975 (51of 1975), excluding products of CETA Chapter Heading 2207 to theextent these are covered in the Cost Accounting Records (Sugar Industry)

Rules, 2011.

H. In case of any Product or Activity Group where multiple unitsof measurement are in use for the products or activities covered therein,then the relevant Product or Activity Group shall be repeated againsteach unit of measurement separately.

I. Wherever same CETA Chapter Headings have been shown against twoor more Product or Activity Groups, the actual details shall be shownagainst the most appropriate Product or Activity Group

• Exemptions for Cost Audit

A. Generation of electricity for captive consumption. For this purpose, theterm "Captive Generating Plant" shall have the same meaning as assignedin Rule 3 of the Electricity Rules, 2005.

B. Own manufactured products that are consumed exclusively by thecompany for the sole purpose of production, processing, manufacturing,or mining of its other products or activities that are subject to Cost Audit.

C. Hundred percent EOU & SEZ.

It is important to note to appoint the Cost Auditor if not appointed so far andprocedure of appointment of Cost Auditor is as follows:

1. Company is to file an application for seeking Central Government's priorapproval appointment of Cost Auditor in Form 23C with MCA within 90days of commencement of each financial year with prescribed fees. Form23C should accompany the eligibility certificate of Cost Auditor as perSec 224(1- B) and certified copy of Board resolution for appointment ofCost Auditor.

2. A formal letter of appointment as approved by Board is to be issued to theCost Auditor within 30 days from the date of filing of Form 23C with MCA.

3. Within 30 day of date of formal letter of appointment issued by thecompany, the Cost Auditor is file Form 23D with MCA along with the copyof appointment.

4. In case of change of Cost Auditor caused by the death of existing CostAuditor, companies are allowed to file fresh e-form 23C, without anyadditional fee, within 90 days of the date of death.

5. In case of change of Cost Auditor for reasons other than death of theexisting Cost Auditor, companies are required to file fresh eform 23C withapplicable fee & additional fee, clearly specifying the reasons of changeand supported with the relevant documents.

1 8


Local Body TLocal Body TLocal Body TLocal Body TLocal Body Tax in lieu of Octroiax in lieu of Octroiax in lieu of Octroiax in lieu of Octroiax in lieu of Octroi

By CMA Ashok Nawal

Local bodies can impose tax in accordance with Constitutional

Authorities. Earlier, Octroi / Entry Tax were levied by Local

bodies, i. e. Municipalities and Municipal Corporations.

Thereafter State Government abolished Octroi imposed by

Municipalities and granted them the funds from State

Government based on the categories of Municipalities and

respective collection. However, Octroi was continued in

Municipal Corporations.

Local Body Tax was substituted in lieu of Octroi and Bombay

Provincial Municipal Corporations (Local Body Tax) Rules,

2010' was notified on 25/03/2010 and it was made applicable

to some of the Municipal Corporations in Maharashtra.

Now, LBT has been made applicable to Navi Mumbai, Pune,

Pimpri -Chinchwad, Municipal Corporations and made effective

from 1st April 2013. Collection of Municipal Corporations will

certainly go up since each dealer will have to register

themselves for LBT and required to maintain accounts as well

as issue invoices against sales amounting to Rs. 500 and

more. Therefore Trade Associations have closed their

operations under protest for so many days. However,

discussion with State Govt. has failed and LBT seems to be

inevitable.

In view of the same, it is very important to understand the

provisions of Local Body Tax and comply with statutory

requirement.

Attempt has been made to explain important Rules.

Rules Description Explanation

R 3 Who is requiredto obtain

registration?

o A Import Dealer having- turnover of sale / purchase of goods specified in Schedule A is equal to or more than Rs. 5000- value of goods imported is equal to or more than Rs. 5000- the turnover of sales / purchases is equal to or more than Rs. 1 lac

o A Dealer other than importer having- the turnover of purchase of goods specified in Schedule A is equal to or more than Rs. 5000- the turnover of sales / purchases is equal to or more than Rs.1.5 lacs

o A dealer who intends to carry a business on temporary basis.

R 4 What isTurnover?

o Value of the sale or value of purchaseso Turnover will include purchases/ sales made by dealer himself or as agent on behalf of his

Principalo Auctioneer - Price of goods auctioned by him for his Principal or a Nomineeo Manager or agent of a non-residential dealer, commission agent, even if Principal is liable for

registration or not

R 5 SpecialProvision

o Regarding liability to pay LBT in certain cases- Legal Representatives / Legal Heirs are liable to pay LBT, including penalties, fines, interests

and amount of sum forfeited on death of the dealer from the estate of deceased- On closure of business, before / after the death Legal Representatives / Legal Heirs are liable

to pay LBT- Dealer (HUF) - Each member of HUF jointly & severally, liability up to the time of partition- A Partnership Firm on dissolution, Each member of Partnership Firm jointly & severally, liability

up to the time of dissolution- Sale / Lease / Leave or License / Hire - Succeedor is liable to pay LBT

o Minor - Guardian who is carrying out the businesso Trust - Trustees / Beneficiarieso Succedor in any caseso Or any person who is representing dealer is liable to pay tax as per Rule 8

R 6 Liability of theFirm

o Each partner jointly & severally, but on retirement, retiring partner should intimate within 60 daysby Notice then, such partner will be liable to pay LBT, penalty, interest, sum of forfeited amount, upto the date of retirement but after the sate of retirement if assessment is pending.

1 9



o If no intimation is given - liability will be up to date of intimation on retiring partner

R 7 CommissionAgent

o Any person, commission agent, agent, auctioneer working for Principal - both jointly & severallyare liable to pay LBT

o If Principal is able to prove commission agent has paid the LBT then only Principal will not be liableto pay LBT

o Manager / Agent of Non-resident dealer - Non-resident dealer and manager / agent jointly &severally are liable to pay LBT

o If Non-resident dealer is able to prove agent/ manager has paid the LBT then only Non-residentdealer will not be liable to pay LBT

R 9 – o No business to be carried without valid service of registration or submission of application forregistration

o To be obtained on or before crossing the turnover or within 30 days of crossing the turnover

o Registration is to be taken based on the turnover of the preceding year

o Prior to 15 days from commencement of temporary business

o Person registered under VAT deemed to be registered from the date of registration

o Application to be made in Form A with registration fees of Rs. 100 - online facility is available athttp://pmc.mahalbt.com/

o Application to be signed by individual / partner / Karta of HUF / Director, Manager, Secretary orPrincipal Officer authorized by Board of Directors of Body Corporate, Co-operative Society /Corporation

o Each partner have to submit a declaration in Form A within 30 days from the date of Application forregistration

o Application to be submitted along with 2 passport size photographs, proof of residential addressof each partner / each member of HUF / each member of Managing Committee of Co-operativeSociety

o Class of goods to be stated in the application

o After scrutiny of the application, Commissioner will issue the Certificate of Registration

R 10,11,12& 13

Certificate ofRegistration

o Certificate of Registration (COR) to be issued in Form B in name of Applicant. This will be validw.e.f. appointed date or when LBT was liable to be paid or from the date of crossing the turnoverlimit

o It will be valid up to the date as Commissioner may specify from the certificate

o Commissioner may ask for deposit from Applicant which will be adjusted against the LBT / LBTdues

o Certificate may include one of more premises (each place of business) except for merely warehouse

o Additional copy of certificate for Additional place of business can be issued against the fees of Rs.25

o In case of loss/ destruction or any other reason duplicate copy of registration certificate can beissued against the fess of Rs. 25

o The Registration Certificate is non-transferrable

o Registration Certificate has to be displayed on the Place of business

R 14& 15

Change inBusiness

o Information has to be furnished within 60 days in writing to the Commissioner along with Certificateof Registration on

- Transfer of business in part or full by Sale / Hire / / Lease / Leave & License / Change ofOwnership

- Discontinuation of business

- New place of business

- Change in name / nature of business

- Change in Class of goods

2 0



- Change in Constitution

- On death of the Dealer

- Dissolution of the firm

- New Certificate / Amended Certificate will be granted by Commissioner and same can bedemanded by Commissioner any time

R 16&17

Continuance ofCertificate ofRegistration

o Change in the name of Business

o Change in Constitution of the Firm without dissolution

o Change in the name of Trustees in case of Trust

o Change of Guardian

o Certificate will be valid till it is cancelled on discontinuance of business or transfer of business orapplication of cancellation from Dealer by himself or by cancellation from Commissioner subject topayment of LBT & LBT Dues

R 18 Responsibilitiesof Dealer

Dealer to declare name of manager(s) of business in Form F within 30 days and to be revised whenname of Manager (s) changes

R 20 – Burden of Proof for non- applicability of LBT on goods - Rule 20

R 24 – To fix the Tariff value of goods in certain cases - Rule 24

R 19 – Dealers to maintain register of Purchase and receipt of goods on transfer basis in Form D

R 21 – Issuance of invoice / bill / cash memo on sales specifying name and style of business & address andplace of business & registration number & particulars of goods sold and selling price - Rule 21

R 22 – Declaration to be mentioned on cash memo / bill invoice

R 23 Duties & Res-ponsibilities ofCommissioner

Submission of list of commodities notifying Schedule intending to levy LBT and justification theretoand rates thereof to Government on or before 20th February and thereafter Government will notify therate and commodities

R 25 – To determine fair market value after granting personal hearing

R 26 – To inspect the goods in transit

R 27 Lump sumpayment

o For the dealer whose turnover of purchases is less than Rs.10 lacs in the preceding year

o Option for lump sum payment to be selected on filing declaration in Form R

o On receipt of permission payment to be made within 15 days

o On non-payment within 15 days permission to be withdrawn

o On crossing of the turnover of Rs.10 lacs, liable to pay differential LBT

o Commissioner is empowered to cancel such permission after giving the opportunity of Hearing

SlabNo.

Turnover of all Purchases during a year LBT payable(Rs.)

1. Up to Rs. 100000 Nil

2. 1lac to 2lacs 4000

3. 2lacs to 3lacs 6000







10 9lacs to 10lacs 20000

2 1



For Buildersand Contractors

R 28 Exemption o Goods imported belong to Government

o Goods imported for public purpose

o Goods are not used or intended to be used for purpose of earning profit

o Goods sent on job work and goods re-imported without effecting any change in the condition orappearance and ownership of the goods. However, LBT will be charged on processing or transfercharges or value addition, provided goods are re-imported within 6 months

o Job work within 6 months without changing the ownership subject to value of such goods areshown and paying of appropriate deposit as fixed by Commissioner

o Grinding, dying, bleaching, painting, printing, finishing, stentering, embroidering, doubling,twisting, metalizing, electroplating, building & mounting bodies of chassis over vehicle or otherprocess as approved by the Commissioner will only be considered as job work. And decision ofCommissioner will be final

o Rejection of goods sent within 6 months

o Exporting the goods outside India

o Promoters and Builders should pay the amount @ 50% in advance,

o For other sellers and contractors 0.25% LBT payable on total turnover or contract amount.

R 29 Submissionof Returns

o Half yearly return in Form E I and Annual Return form E II to be signed by nominated person inForm F within 15 days of the end of period

o The dealer opting for lump sum payment to file only Annual returns within 15 days

o Commissioner is authorized to issue an order in Form G for different period and date for differentclass of registered dealers

o Provision of filing E I return before expiry of 1 month from the last date of submission of return

o Monthly return within 10 days of end of calendar year or on discontinuation of business

R 30 Furnishing ofSecurity

o If any person fails in 3 more instances during the period when LBT is due, security deposit can bedemanded after giving opportunity of hearing which should not exceed a sum equal to amountLBT payable as estimated by Commissioner in a year and such additional security can be forfeitedif any LBT / LBT Dues remain unpaid after granting personal hearing.

o Dealer may make application for refund of additional deposit by giving justification

R 31 Determinationof dispute

Any question arising before the commencement of assessment or re-assessment of dealer w.r.t.applicability of LBT and rate of LBT. On application, Commissioner may order determining suchquestion.

No. Category LBT

1 Up to 4th Floor( without lift) Rs. 100/- sq. meter

2. Up to 7th floor ( with lift) Rs. 150/- sq. meter

3. Above 7th floor Rs. 200/- sq. meter

Sl.No. Periodicity Due Date

1. Normal Dealer HLY E-I 15 Days

2. Normal Dealer YLY E-II 15 Days

3 Lump sum Option YLY E-II 15 Days

From no.Category

R 32 Refund in caseof export

o If the goods imported in the city and are exported out of the city, refund can be claimed upto 90%of the amount by a order in Form M provided, goods imported has been reflected in the return andLBT is paid on the same and exported outside the city within 6 months in the same Form and alsorefund should be claimed in returns.

o In case refund is admitted without permission of Commissioner cases shall be taken for regularassessment and if excess refund is adjusted then differential amount along with 5 times of thedifferential amount, penalty to be made.

2 2



o Refund application to be made in Form I and it should be decided within 1 month from the date ofapplication and such refund to be made within 2 months within the date of filing applicationotherwise mandatory interest @ 6% will be payable.

R 33 Assessment o Assessment will be done for each period based on the return furnished by the dealer

o Best Judgment Assessment will be done by Commissioner when dealer fails to pay the return,incomplete & incorrect return, in case of refund or on cancellation of registration, non registrationon non-compliance of Notice after giving natural justice

o The period of limitation is 5 years

o Notice to be issued in Form H and personal hearing is to be granted only after 15 days on serviceof the Notice.

o Assessment order will be issued in Form J

o Assessment order should be preserved for 10 years

R 34 Re-Assessment Commissioner can re-assess based on the documentary evidences within the period of 3 years fromthe date of communication of Assessment order after issuing Notice in Form K and granting opportunityof personal Hearing

R 35 Rectificationof mistake

Commissioner on his own motion within the period of 2 years from the date of issuing assessmentorder can rectify the mistake which has been brought to his notice by affected person after grantingpersonal hearing

R 39& 40

Payment ofLBT

o Rounding up in Rupee

o Due date 10th of subsequent month

o Commissioner empowered to grant intervals in different manners, dates, occasions for differentclass of dealers

R 44& 45

Refund o Refund to be granted in Form F either in cash or adjusted from next due amount

o Commissioner is empowered to withhold the refund when it is going to adversely affect the revenue

R 46 CompositionFee

Commissioner is empowered to decide composition fee in lump sum fee in lieu of LBT payable

R 36,37 &38

Appeals o Appeals have to filed in Form S along with declaration before Appellate Authority and to besubmitted by registered post

o Hearing will be granted after giving minimum 10 days notice

o If Ex Party order has been given, application to be made within 30 days on receipt of such Ex Partyorder for setting aside Ex Party only when intimation was not served

R 41,42 &43

Recovery o During the pendency of Appeal, Commissioner is empowered to issue notice for enhancement ofthe dues

o Similar provision like excise - From bankers, debtors or from any persons where amount is due todealers

o Powers of provisional attachment to protect the revenue

R 47,48 &49

Penalty o Commissioner is empowered to call for production of documents / information in Form No Penalty for non- issuance of bill / invoice / cash memo - Twice of LBT payable for first offence.

Subsequent offence 5 timeso On failure of obtaining registration - 10 times of LBT payableo Complying with the notices, Rs. 10,000o failure to disclose the importation of goods, to claim inaccurate deductions / refunds - 5 times of

LBT payableo Simple interest @ 2% per month for first 12 months and 3% per month when person continues to

make defaulto Wrong declaration, False certificate or false declaration - 5 times of LBTo Failure to file the returns - Rs. 5000o Failure in issuance of bills - twice value of billo Failure to maintain accounts in prescribed - Rs. 5000 or double of LBT which is lesso Collection of LBT in excess of rates - Rs. 2000 or 2 times of LBT payable whichever is less

2 3



R 50& 51

OtherProvisions

Powers to make statistics

R 54 Appearancebefore anyAuthority

o Relative

o Employee

o Advocate

o Chartered Accountant

o Cost Accountant

o LBT Practitioners

o Authorized by such person in Form Q

R 52 No information of other person to be furnished to another person without consent of the person exceptfor action under IPC

R 53 Publication & disclosure of information w.r.t. dealers

LBT Rates has been notified for Pune and Pimpri Chinchwad Municipal Corporation which are given below:

Schedule A

Description of Goods liable to payment of Local Body Tax

Group I

Sr.No. Name of goods Rates of LBT(PUNE)

Rates of LBT(PCMC)

2.00%6 Sarries 2.00%

0.50%1 Articles made of precious metals of fineness not less than 50%, whether or notcontaining precious stones, semi precious stones, diamonds or pearls whether realor cultured and to which entry 105 in Sch- A Group II does not apply

0.50%

Gold, platinum,Osmium,

Palladium,Rhodium,

Ruthenium -0.10%

Silver - 0.50%

2 Precious metals that is to say Gold, silver, platinum, Osmium, Palladium, Rhodium,Ruthenium and alloys of any of them

Ex: for the purpose of this entry an alloy pf precious metal means precious metal offineness of not less than 50%

Gold, platinum,Osmium,

Palladium,Rhodium,

Ruthenium -0.10%

Silver - 0.50%

0.10%3 Precious stones including diamonds, semi precious stones land pearls whether realor cultured

0.10%

2.00%4 Hairpins, imitation jeweler, beads of glass, plastics or any metal other than preciousmetals and parts and components thereof

2.00%

0.50%5 Aeroplane of all kinds including helicopters, components, parts and accessories ofany of them

0.50%

1.00%7 a) Drugs including ayurvedic, siddha, unani, spirituous, medical drugs andhomoeopathic drugs but excluding drugs used for family planning, treatment ofCancer, HIV & AIDS, being formulations or preparations ready for use internally oron the body of human beings, animals and birds for diagnosis treatment, mitigationor prevention of any diseases or disorders which is manufactured or imported intoIndia stocked distributed or sold under license granted under the Drug andCosmetic Act 1940 but does not include mosquito repellants in any forms.

b) Medical oxygen and nitrous oxide manufactured under license granted under thedrug and Cosmetic Act 1940

1.00%

1.00%1.00%

2 4



Rates of LBT(PCMC)

1.00%11 Handloom woven gamcha 0.00%

2.40%1 Agricultural machinery and implements and components and parts thereof otherthan tractors, semi- trailers, oil engines, electric motors, pumps, electric pumpingsets, capacitors of all types and pipes of all types

2.50%

3.50%2 All equipments for electronic communication by way of wireless or by way of wireincluding Private Brands Exchange (PBX) and Electronic Private Automatic BranchExchange (EPBAX)

3.50%

2.40%3 All kinds of bricks including fly ash bricks and refactory bricks and monolithic, asphalticroofing tiles, earthen roofing tiles

3.50%

2.40%4 a. Cotton yarn but not including in cotton warn waste

b. Save as provided in clause (a) above, any yarn whether covered with any materialor not; sewing thread, waste of any of them excluding cotton and milk yarn in hanksas covered under entry 17 of Sch- B

2.50%

2.40%8 Charcoal and Badami Charcoal used for industrial purpose 2.00%

Sugar-0.50%Tobacco-0.20%Fabrics-2.00%

10 Sugar, fabrics and tobacco as described from time to time in column 3 of first scheduleto the additional duties of excise (Goods of Special Importance) Act, 1957.

Explanation - For removal of doubts it is herby declared that tobacco shall not includepanmasala, that is to say, any preparation containing betal nuts and tobacco andone or more of the following ingredients namely :- i. lime and kattha (catechu) whetheror not containing any other ingredients such as cardamom, copra and menthol

Sugar - 0.00%Tobacco-0.20%Fabrics-2.00%

0.00%9 i. LPG supplied in cylinders containing upto 14.5 kg & LPG, PNG supplied bypipeline for domestic use

ii. LPG supplied in cylinders containing upto 14.5 kg & LPG, PNG & CNG suppliedfor commercial and industrial use

0.00%

2.50%2.50%

2.00%12 Toddy 2.00%

1.00%13 Papad 2.00%

2.40%14 Capacitors of all types 3.50%


Rates of LBT(PCMC)

Group II

5 Aluminum conductor steel reinforced 2.50% 2.40%

6 Aluminum, its alloys and products notified vide Government Notification FinanceDepartment no. VAT - 1505/CR-113/ Taxation -1, dated 1st June 2005 2.50% 2.40%

7 a. Areca nut powder, betel nut and 0.50% 0.50%

b. Raw Cashew nuts 3.00% 2.40%

8 Coir Mattresses 3.50% 2.40%

9 Bagassee 2.00% 2.40%

10 Bamboo 0.50% 0.50%

11 Bearings 3.00% 2.40%

12 Biris covered under Tariff Item no. 24031031, 24031039, 24031090 of CentralExcise tariff Act 1985 (5 of 1986) 1.00% 1.00%

2 5



Rates of LBT(PCMC)

13 Beltings 3.00% 2.40%

14 Sunglasses, goggles, implant lenses 4.00% 4.00%

15 Biomass briquettes 3.50% 2.40%

16 Bone Meal 1.00% 1.00%

17 Bulk drugs, whether imported or manufactured under Lincese undet the Drugsand Comestics Act 1940 1.00% 1.00%

18 Castings of non ferrous metals 2.50% 2.40%

19 Centrifugal, monobloc and submersible pumps and pump sets and parts thereof 3.00% 2.40%

20 Garden & Beach umbrellas & Components, parts & accessories thereof 3.00% 2.40%

21 Clay including fire clay, fine china clay and ball clay 3.50% 2.40%

22 Coal including coke in all its forms but excluding charcoal and badami charcoalused for domestic Purpose 2.00% 2.40%

23 Coffee beans and seeds, cocoa pod, green tea leaf and chicory 2.00% 1.00%

24 Coir and coir products excluding mattresses 3.50% 2.40%

25 Cotton, that is to say, all kinds of cotton, (indigenous or imported) in theunmanufactured state, whether ginned or unginned, baled, pressed or otherwiseincluding cotton waste 2.00% 2.40%

26 Crucibles 3.50% 2.40%

27 Crude oil, that is to say crude petroleum oils and crude oil obtained frombituminous minerals (such as shale, calcareous, rock, sand, ) whatever theircomposition, whether obtained from normal or condensation oil deposits or by thedestructive distillation of bituminous minerals and whether or not subjected to allor any of the following processes :-

1. decantation

2. desalting

3. dehydration

4. stabilization in order to normalize the vapor pressure

5. elimination of very light fractions with a view to returning them to the oildeposit in order to improve the draining and maintain the pressure

6. the addition of only those hydrocarbons previously recicered by physicalmethods, during the course of the above mentioned processors

7. any other minor process (including addition if pour point depressants of flowimprovers) which does not change the essential character of the substance

3.50%3.50%

2.40%28 Dehydrated or processed vegetables and mushrooms 3.00%

2.40%29 Fluorescent tubes of all varieties and their fittings, including shades, chokes, startersand other components, parts and accessories thereof

3.50%

2.40%29 A a. devices notified from time to time by Central Government under sub clause (iv) ifthe clause (b) of the section 3 of Drugs and Cosmetics Act 1940

b. Bandages and dressings manufactured or imported into India, stocked, distributedor sold under license granted under Drugs and Cosmetics Act 1940

c. Syringes

3.00%

1.00%1.00%

1.00%1.00%

30 Edible oil, edible oil in unrefined forms and oil cakes 0.00% 0.50%

31 Electrodes 3.50% 2.40%

32 Exercise book, graph book, laboratory note book and drawing books 2.00% 1.00%

2 6



2.40%33 a. Ferrous and non ferrous domestic utensils, whether coated with any materials orother than those made from precious metals

b. Domestic pressure cookers and pans

c. Buckets made of iron, steel, aluminum, plastic or any other materials

2.50%

1.00%34 Fertilizers including bio fertilizers, insecticides, pesticides, fungicides, weedicides,rodenticides, herbicides, antispouring products, plant growth promoters or regulatoirs,micronutrients but not including disinfectants

2.00%

Rates of LBT(PCMC)

2.00%2.00%

2.00%2.00%

2.40%55 Iron and steel, that is to say:-

i. Pig iron, spong iron and cast iron including ingots, moulds, bottom plates, ironscrap, cast iron, runner scrap and iron skull scrap

ii. Steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes)

iii. Skelp bars, tin bars, sheet bars, hoe bars, and sleeper bars

iv. Steel bars (rounds, rods, square flats, octagons and hexagons, plain and ribbedor twisted in coil form as well as straight lengths)

v. Steel structural (angles, joints, channels, tees, sheet pilling sections, Z Sectionsor any other rolled sections)

2.50%

35 Fibres of all types and fibre waste 3.00% 2.40%

36 Fireclay, coal ash, coal boiler ash, coal cinder ash, coal powder, clinker 2.00% 2.40%

37 a. Pulse flour including besan mixed with flour of other pulses 0.50% 0.50%

b. Pulse flour including besan mixed with flour of other cereals including maize 0.50% 0.50%

c. Pulse flour including besan mixed with flour of other pulses & cereals 0.50% 0.50%

38 Glucose D 2.00% 1.00%

39 Goods of intangible pr incorporated nature notified vide Government NotificationFinance Department No. VAT-1505/CR-114/Taxation -1, dated 1st June 2005 3.50% 3.50%

40 Suitcases, attach cases, brief cases, dispatch cases, vanity cases, executed cases 4.00% 2.40%

41 Gypsum of all forms and descriptions excluding gypsum boards 3.00% 2.40%

42 Hand pumps, parts and fittings 3.00% 2.40%

43 Trunks & school boxes made of steel or aluminum 2.00% 2.00%

44 Herbs, gambiar, bark, dry plant, dry root, commodity known as jari booti and dryflowers 2.00% 1.00%

45 Hides and skins, whether in raw or dresses state 2.00% 2.40%

46 Hose pipes and fittings thereof 3.00% 2.40%

47 Hosiery goods 2.00% 2.00%

48 All kinds of industrial, commercial & domestic receptacles to keep food orbeverages hot or cold including vaccume flask, thermoses, thermic jugs, icebuckets or boxes, urns, casseroles and components, parts and accessories thereof 3.00% 2.40%

49 Rice Rarn 0.50% 1.00%

50 Ice including dry ice 3.50% 2.40%

51 Ink pads of any forms 2.00% 2.40%

52 Culinary essences & flavoring essences 3.00% 2.40%

53 Industrial cables(high voltage cables, plastic coated cables, jelly filled cables,optical fibre cables) 3.50% 2.40%

54 Industrial inputs and packing materials notified vide Government NotificationFinance Department no. VAT - 1505/CR-234/Taxation-1, dated 1st September 2005 3.00% 2.40%

2 7



1 vi. Sheets, hoops, strips and skelp, both black and galvanized, hot and cold rolled,plain and corrugated, in all qualities in straight lengths and in coil form as rolledand in revetted conditions

vii. Plates both plain and chequered in all qualities

viii. Discs, rings, forgings and steel castings

ix. Tool, alloy and special steels of any of the above categories

x. Steel melting scrap in all forms including steel skull, turning and boring

xi. Steel tubes, both welded and seamless, of all diameters and lengths includingtube fittings

xii.Tin plate, both hot dipped and electrolytic and tin free plates

xiii. Fish plate bars, bearing plate bars, crossing sleeper bars, fish plates bearingplates, crossing sleepers and pressed steel sleepers, rails heavy and light cranerails

xiv. Wheels, tyres, axles and wheel sets

xv.Wire rods and wire rolled, drawn, galvanized, aluminized, tinned or coated suchas by copper

xvi. Defectives, rejects, cuttings, or and pieces of any of the above categories2.40%

Rates of LBT(PCMC)

56 IT Products notified vide Government notification no. VAT-1505/CR-237/Taxation-1,dated 17th October 2005 3.50% 3.50%

2.40%57 Jute, that is to say the bibre extracted from plants belonging to the species of CorchorusCapsi;aries and Corchorus oiltorius and the fiber known as mesta or bimli extractedfrom plants of trhe species Hibiscus Cannabinnus and Hibiscus subdariffa-varaltissima and the fibre known as sunn and sannashemp extracted from the plantsof the species Crotalaria Juncea whether baled or otherwise

3.00%

58 Kerosene oil sold through the Public Distribution System 1.00% 1.00%

59 Knitting wool 2.50% 2.40%

60 Dry cells, Dry batteries of all varieties 3.50% 2.40%

61 Lignite 2.00% 2.40%

62 Lime, Lime Stone, products of lime, dolomite 2.00% 2.40%

63 Maize gluten and maize germ oil 0.50% 1.00%

64 Mixed PVC stabilizer 3.50% 2.40%

65 Napa Slabs(Rough flooring stones) and shahabadi stones 3.50% 2.40%

66 Newars 3.00% 2.40%

67 Non-ferrous metals and alloys in primary forms and scrap notified vide Governmentnotification Finance Department no. VAT-1505/CR-117/Taxation 1,dated 1st June 2005 2.50% 2.40%

68 Oil seeds, that is to say : 0.50% 0.50%

i. Groundnut or peanut (arachis hypogaea)

ii. Sesamum or til (sesamum Orientale)

iii. Cotton sees (gossyplum spp)

iv. Soybean (glycine seja)

v. Rapeseed and mustard

a) Torta (Brassica Campestris var toria)

b) Rai (brassica Juncea)

c) Jamba- Taramira (eruca sativa)

2 8



2.40%76 Printed material including professional & commercial books, annual reports,application forms, account books, balance-sheets, calendars, diaries, catalogues,race cards and publications which mainly publicise goods, services and articles forcommercial purposes and publications which contain space exceeding eight pagesfor writing, but excluding those covered under entry 6 of Schedule 'B'

2.00%

2.40%82 Renewable energy devices & spare parts notified vide Government Notification,Finance Department No.VAT-1505/CR-119/Taxation-1 dated 1st April 2005, exceptgoods covered under entry 56 of Schedule-B.

2.00%

Rates of LBT(PCMC)

d) Sarson yello and brown (brassica campestris car sarson)

e) Banarasi Rai or true Mustars (Brassica nigra)

vi. Linseed (linum usitissimum)

vii. Castor (ricinus communis)

viii. Coconut (ie. Copra excluding tender coconuts) (cocosnucifera)

ix. Sunflower (helianthus annus)

x. Nigar seed (guizotia abyssinica)

xi. Neem, vepa,(azadirachta indica)

xii. Mahua, illupai, ippe, (madhuca indica, M. latifolia, bassia, latifolia andmadhuca longifolia Syn. M. Longifolia

xiii. Karanja, pongam, Honga (pongamia pinnata syn P. Glabra)

xiv. Kusum (schlechera Olcosa, Syn. S. Trijuga)

xv. Punna undi (calophyllum, inophyllum)

xvi. Kokum (carcinia indica)

xvii. Sal (Shorea robusta)

xviii. Tung (aleurites fordii and A. Montana)

xix. Red palm (elaeis guinensis)

xx. Safflower (carthanus tinctotius)

69 Ores and minerals 3.50% 2.40%

70 a) Paper, news print, paper board, waste paper 2.00% 2.00%

b) All types of paper stationery for computer, carbon paper and ammonia paper 2.00% 2.40%

71 Paraffin wax of food grade standard and other than food grade standard includingstandard wax and match wax; slack wax 3.00% 2.40%

72 Pipes of all varieties including G.I. pipes, C.I. pipes, ductile pipes and PVC pipesand their fittings. 3.00% 2.40%

73 Pizza bread 4.00% 2.40%

74 a) Plastic footwear (moulded), hawaii chappals and straps thereof. 2.00% 1.00%

b) Plastic mats (Chatai) 2.40%

75 Plastic granules, master batches, plastic powder and scrap. 3.00% 2.40%

77 Printing ink and writing ink excluding toner and cartridges 2.00% 2.40%

78 Torches of all varieties & components, parts & accessories thereof 2.00% 2.40%

79 Pulp of bamboo, wood and paper 3.50% 2.40%

80 Rail coaches, engines and wagons and parts thereof 2.00% 2.40%

2.40%81 a) Readymade garments.

b) Other articles of personal wear, clothing accessories, made up textile articles andsets notified vide Government Notification, Finance Department No.VAT- 1505/CR-118 Taxation-1 dated 1st June 2005.

3.50%

2.40%3.50%

2 9



2.40%94 a) Sweet and sweetmeats including Shrikhand, Basundi, Doodhpak excluding Ice-cream, other edible ice, cocoa, kulfi, non-alcoholic drinks containing ice-cream orkulfi sweet drops, toffees, chocolates, other confectioneries and all kind of bakeryproducts.

b) Varieties of farsan notified vide Government Notification, Finance DepartmentNo. VAT-1505 / CR-165/Taxation-1 dated 1 st June 2005.

3.50%

Rates of LBT(PCMC)

82A Ribbon, Bow & Kajal. 2.00% 2.00%

83 Roasted or fried pulses including gram 2.00% 1.00%

83A Rock Salt. 1.00% 1.00%

84 Rubber that is to say (a) raw rubber, (b) latex (c) dry ribbed sheet of all grades 3.00% 2.40%

85 Safety Matches 1.00% 1.00%

85 A Safety Helmets. 3.50% 2.40%

86 Electrical bulbs & tubes of all varieties. 3.50% 2.40%

87 Sewing machines and parts, components and accessories thereof & all kinds ofsewing needles and knitting needles. 3.00% 2.40%

88 Ship and other water vessels 2.00% 2.40%

89 a) Milk powder including skimmed milk powder, 2.00% 1.00%

b) UHT milk, 2.00% 1.00%

c) Condensed milk whether sweetened or not 2.00% 1.00%

d) Milk containing any ingredient and sold under a brand name. 2.00% 1.00%

e) Buttermilk, Separated milk, Lassi & Curds (whether or not sweetened or(flavoured) when sold under a brand name. 2.00% 1.00%

90 Solvent oils other than organic solvent oil 3.50% 2.40%

91 Spices including cumin seed, hing (asafoetida), aniseed, saffron, pepper andpoppy seed. 2.00% 1.00%

92 Sports goods excluding apparels and footwear 3.50% 2.40%

93 Starches, sago and Tapioca 2.00% 2.40%

2.40%95 Poultry machinery and equipment. 3.00%

2.40%3.00%

2.40%96 a) Tractors, trailers, trolleys (being agricultural tractors, trailers and trolleys),Harvesters, attachments, parts, components, accessories, tyres and tubes thereof.

b) threshers and attachments parts, components, accessories, tyres and tubes thereof.

3.00%

2.40%3.00%

97 Transformers and components and parts thereof 3.50% 2.40%

98 Transmission towers 3.00% 2.40%

99 (a) Raincoats & Umbrella except garden umbrella, 3.00% 2.40%

(b) Components, parts and accessories of umbrella except garden umbrella. 3.00% 2.40%

100 Vanaspati (Hydrogenated vegetable oil) 0.06% 1.00%

101 Varieties of Textile and Textile Articles notified vide Government Notification,Finance Department No. VAT-1505/CR-120/Taxation-1 dated 1st June 2005 &VAT-1510/CR-47A/Taxation-1, dated 17th March 2010. 3.00% 2.40%

102 Vegetable oil including gingili oil and bran oil. 2.00% 1.00%

103 Windmill for water pumping and for generation of electricity and its components,parts and accessories 2.50% 2.40%

3 0



2.40%104 a) Writing instruments, ball point pens, felt tipped and other porustipped pens andmarkers; fountain pens, stylograph pens and other pens, duplicating stylos,propelling or sliding pencils, pen holders, pencil holders and similar holders,parts (including caps and clips) of the foregoing articles;

b) Mathematical instrument boxes including instruments thereof, students colourboxes, crayons and pencil sharpeners.

c) Writing boards or writing pads, drawing boards, black boards, green boards,white boards, examination pads, foot rulers, erasers, glitter pens, sketch pens,staplers, pencil leads, oil pastels, drawing charcoals and envelopes.

2.50%

2.40%105 Embroidery or Zari material that is to say,

(i) imi; (ii) zari; (iii) kasab; (iv) saima; (v) dabka; (vi) chumki; (vii) gota; (viii) sitara;(ix) naquasi; (x) kora (xi) gizal; (xiii) embroidery machines; (xiv) embroidery needles.

3.00%

106 Kopra 2.00% 1.00%

107 1. Animal hair other than raw wool; 2.00% 2.40%

2. Coal tar; 3.50% 2.40%

3. Combs 2.00% 1.00%

4. Cups and glasses of paper or plastic; 2.00% 2.40%

5. Feeding bottles and nipples; 2.00% 2.00%

6. Medical devices and implants notified vide Government Notification, FinanceDepartment No. VAT-1505/CR-233/Taxation-1 dated 23rd November 2005. 2.00% 2.00%

7. Porcelain insulators. 3.50% 2.40%

8. Screws, nuts, bolts, fasteners, coach screws, screw hooks, revets, cotters,cotter pins, washers including spring washers. 2.50% 2.40%

9. a) Raw meat, raw flesh of poultry and raw sea food including fish, prawns,lobsters, crabs and shrimps when in frozen state or in sealed container 3.50% 3.50%

b) Fruits and vegetables when in frozen state or in sealed container. 3.00% 2.40%

c) Processed, semi-processed or semi-cooked food articles made from meatof any animal or flesh of bird including Ham, Bacon, Sausages, Salami orKababs, whether or not in frozen state or in sealed container. 3.50% 3.50%

d) Processed, semi-processed or semi-cooked flesh of poultry, sea-foodIncluding fish, prawns, lobsters, crabs and shrimps, whether or not infrozen state or in sealed container, 3.50% 3.50%

e) Processed, semi-processed or semi-cooked fruits and vegetables includingfruit jams, jelly, pickle sauce, porridge, marmalade, cottage cheese(paneer),honey, preserved fruits, fruit squash, fruit paste, fruit drink, fruit juice,vegetable juice, squashes, syrups, cordials, whether or not in frozen stateor in sealed container. 3.50% 3.50%

f) Raw, semi cooked, semi processed, ready mix and ready to cook (foodpreparation) in sealed containers excluding ready to eat food and thosecovered by clause (a) to clause (e) above in this schedule. 3.50% 3.50%

g) Powders, tablets, cubes, crystals and other solids or liquids from whichnon-alcoholic beverages and soups are prepared. 3.50% 3.50%

10. Silica Sand 3.50% 2.00%

11. Chilly seeds, Tamarind seeds & powder thereof 2.50% 1.00%

12. Toys and games excluding electronic toys and electronic games 3.00% 2.40%

13. Wax candles 2.00% 1.00%

Rates of LBT(PCMC)

2.40%2.50%

2.40%2.50%

3 1



3.50%108 1. A. Dry fruits including raisins, currants and cashew nuts and Wet Dates. B. Tea inleaf or powder form including instant tea

2. Timber

3. Wood free plain and pre-laminated particle board covered under Tariff item4410.90.10 and 4410.90.90 of the Central Excise Tariff Act, 1985 with BISspecification IS-3087 or IS- 12823, having logo 'ECOMARK' obtained from BIS.

3.50%

Rates of LBT(PCMC)

1.00%2.00%

2.40%2.50%

3.50%4.00%

3.50%109 Cinematographic equipments including cameras, projectors, sound recording andreproducing equipments, lenses, films and film strips, cinema carbond required foruse therewith and components, parts and accessories of any of them and cinemaslides and Raw films.

4.00%

110 Clearing nuts (Shikekai) and Soap nuts (Ritha) in while or powder form 0.50% 0.50%

111 Compact Fluorescent Lamps 3.50% 2.40%

112 LPG Stoves for domestic use; parts, components and accessories thereof 2.00% 1.00%

113 Cotton ginning and pressing machinery covered by sub-heading 84451910 ofCentral Excise Tariff Act, 1985. 3.00% 2.40%

114 Composting Machinery 3.00% 2.40%

115 Vehicles Operated on Battery or Solar power 2.00% 2.40%

116 Adult diapers and Sanitary napkins. 2.00% 2.00%

117 All types of Electric goods and Parts. 3.50%

118 All kinds of Imported Soap 5.00%

119 Imported Stones, Plateware, Cutlery, Clocks, watch 8.00%

120 Furniture of all kinds and cabinet ware 3.50%

121 Imported Furniture and Cabinet ware 8.00%

122 Imported Aromatic Chemicals and related material, Perfumed oils and PerfumeryScents, Uttars and Cosmetics 5.00%

123 All kinds of Imported Tiles 5.00%

124 All types of Imported oilman stores and Foods 5.00%

125 Gutkha, Panparag, Panmasala and Scented Tabacco 5.00%

126 Motor-cars, Motor-buses, Motor-cycles, Motor chassis price having less 10 lacks 2.00%

127 Machines, Machinery of all sorts, their parts 3.00%

Sr.No. Name of goods Rates of LBT

PCMC Rates Group II Contd.

117 Aerated water, mineral water, purified wa ter. 4.00%

118 Crackers, fireworks and their components. 4.00%

119 All kinds of cement, sunla. 3.50%

120 All kinds of Earth, Synthetic Sand, River Sand, Stone, Murum and Gravel. 1.00%

121 Plywood, soft board, hardboard, masonite or any other kind of wood of whatsoever compositionprepared by artificial process and articles made thereof, sunn1ica, Formica veneer, plasticlaminated sheets, insulin board and and all kinds of plywood 3.50%

122 Hair oil, perfumed Oils, perfumery of all kinds, scents, attars, scented materials, aromatic chemicals,pomade 3.50%

3 2


Sr.No. Name of goods Rates of LBT

123 Toilet paper, shaving cream, shaving razor, tooth powder, tooth paste, Fani, brushes, braces,garter8, suspenders. 1.00%

124 All sorts of plastic bags 4.00%

125 All sorts of furniture such as wooden, iron, steel, cane, plastic and fiber including kitchen trolleys etc. 3.50%

126 Electronic toys and electronic games 4.00%

127 All sorts of China Crockery and Crockery Articles, Cups and saucers, Jars, etc. and similar items. 4.00%

128 Cigarette Holders, smoking pipes, cigarette paper, pipe, tobacco cases, pouches, cigarette cases,hukka and smoking requisites, cigarette lighters. 7.00%

129 Motorcycles, Scooters, Mopeds and all types of two wheelers. 1.00%

130 All types of Instruments of Music, excluding indigenous instrun1ents of music specifically mentionedin rate schedule A, Audio Video Cassettes, Microphones, Video games, Walkman and theircomponents, spare parts and accessories, Radio, Tape Recorder, All types of Speakers, C.D.player,DVD player, VCD and VCR, DVD, CD and their components, spare parts and accessories. 3.50%

131 T.V. 'set, LCD T.V. s t, set top box, dish antenna, recharge vouchers whether recharged it online orotherwise and th eir components, spare parts and accessories, cable used for inter connection. 3.50%

132 Photographic machinery, photo goods and materials including photographic chemicals, films,mounts, video camera, Digital camera, handy camera and their components, spare parts andaccessories including flash light apparatus. 3.50%

133 All types of mobile phones, Pager, I Pad, I pod, tablet and all sorts of means of communication andtheir components, spare parts and accessories. SIM card, memory card, activation/renewal slips/vouchers whether recharged it online or otherwise. 3.50%

134 Self supported Antenna Mast and its components spare parts and accessories. 3.50%

135 Washing Machine, Refrigerator, Oven, Micro oven, Mixer, water gizer, grinder, water purifiers andwater coolers and all domestic electrical appliances and their components, spare parts andaccessories. 3.50%

136 All types of air conditioners. 4.00%

137 Ice-cream of all types, kulfi sweet drops, toffees, chocolates and other Confectionaries. 3.50%

138 Cosmetics of all types. 3.50%

139 All kinds of flooring tiles, excluding tiles specifically mentioned in schedule A. All kinds of marble,marble tiles and any article made up of marble stone, all kinds of granite, china mosaic chips,mosaic or terrazzo tiles. 3.50%


Rates of LBT(PCMC)

GROUP III

1 Foreign liquor as defined from time to time in rule 3(6) (1) of the Bombay ForeignLiquor Rules, 1953 excluding wine. 8.00% 7.00%

2 Country liquor, as defined in Maharashtra Country Liquor Rules, 1973. 8.00% 7.00%

3 Liquor imported from any place outside the territory of India, as defined from timeto time in rule 3(4) of Maharashtra Foreign Liquor (Import and Export) Rules,1963 excluding wine. 8.00% 7.00%

3A Wines, as defined, from time to time, in rule 3(6)(1) of the Bombay Foreign LiquorRules, 1953 and in rule 3(4) of the Maharashtra Foreign Liquor(Import and Export) Rules, 1963. 8.00% 7.00%

4 Molasses, rectified spirit absolute alcohol and extra neutral alcohol 7.00% 7.00%

3 3



Rates of LBT(PCMC)

5 High Speed Diesel Oil 2.00% 2.00%

6 Aviation Turbine Fuel (Duty paid) 3.50% 3.50%

7 Aviation Turbine Fuel (Bonded) 3.50% 3.50%

8 Aviation Gasoline Fuel (Duty paid) 3.50% 3.50%

9 Aviation Gasoline Fuel (Bonded) 3.50% 3.50%

10 Any other kind of Motor Spirit 2.00% 2.00%

11 Tobacco, manufactured tobacco and products thereof including cigar and cigarettesbut excluding those to which entry 10 of Group-I of this Schedule A applies. 8.00% 8.00%

12 Aerated and Carbonated non-alcoholic beverage whether or not containing sugaror other sweetening matter or flavor or any additives. 4.00% 4.00%


Rates of LBT(PCMC)

GROUP IV

1 All goods not covered in this Schedule and Schedule-B 4.00% 2.40%

Sr.No.

Name of goods

SCHEDULE-BPune Municipal Corporation

Description of Goods exempted from payment of Local Body Tax

1 Agricultural implements manually operated or animal driven, components & parts of such implements notified videGovernment Notification, Finance Department No. VAT.1505/CR-109/Taxation-1, dated 1st April 2005.

2 Aids & implementation, components and parts thereof used by handicapped persons notified vide GovernmentNotification, Finance Department No.VAT-1508/CR.96/Taxation-1, dated 5th November 2008.

3 Animal driven carts including bullock carts and components, parts and accessories thereof (excluding bearing, tubesand tyres)

4 (a) Aquatic feed, cattle feed, poultry feed, their concentrates, additives and supplements,

(b) Grass, hay, straw, sugarcane

(c) Husk & bran of cereals and pluses, sarki pend and de-oiled cakes, but excluding other oil cakes and Rice bran.

5 Betel leaves and Beedi leaves.

6 Books, that is to say, every volume or part or division of a volume including almanacs, school text books prescribed byGovernment. Panchangs, time tables for passenger transport services, periodicals, maps, charts, orreries and globes,but excluding professional & commercial books, annual reports, application forms, account books, balance-sheets,calendars, diaries, catalogues, race cards, publications which mainly publicise goods, services and articles forcommercial purposes and publications which contain exceeding eight pages for writing.

7 Bread (excluding pizza bread) in loaf, rolls or in slices, toasted or otherwise.

8 Broomsticks and brushes of a type used to clean floor including toilet floor.

9 Cereals (other than paddy, rice and wheat) in whole grain, split or broken form and their flour singly or in mixed form.

9A (a) Paddy, rice, wheat and pulses in whole grain, split or broken form.

(b) The flour of wheat & rice including atta, maida, rawa and suji whether singly or in mixed form.

(c) The flour of pluses including besan singly and not mixed with flour of other pulses or cereals.

10 Chalk Stick

3 4


Sr.No.

Name of goods

11 Charcoal and Badami Charcoal (excluding for industrial use)

12 (a) Charkha, Ambar Charkha, and other implements used in the production of handspun yarn and components, partsand accessories of any of them.

(b) Khadi garments

(c) Made-ups and other goods prepared from handspun yarn.

13 Handlooms, their parts, accessories, attachments and auxillary machines notified vide Government Notification, FinanceDepartment No.VAT.1505/CR-111/Taxation-1, dated 1st April 2005.

14 Gandhi Topi.

15 Clay lamps.

16 Contraceptive of all types, drugs, medicines, medical formulation & appliances used for family planning and for treatmentof Cancer, HIV & AIDS.

17 Cotton and silk yarn in hank.

18 Buttermilk, Separated milk, Lassi & Curd (excluding buttermilk, separated milk, lassi & curd whether or not sweetenedor flavored when sold under a brand name.)

19 Earthen pot and red earth.

20 Electricity

21 (a) Firewood excluding Casuarina Poles and eucalyptus logs and cut sized thereof.

(b) Fuel made from solid waste procured from any local bodies or on their behalf.

(c) Biomass pellets.

22 Fishnet, fishnet fabrics, fish seeds, prawn seeds & shrimp seeds.

23 Fresh plants, Saplings and natural flowers excluding Mahua flowers.

24 Fresh vegetables, potatoes, sweet potatoes, yam (elephant foot), onions and fresh fruits, excluding wet dates, exceptin frozen state or in sealed container.

25 Garlic and Ginger

26 Bangles made from any material except precious metals.

27 Goods of incorporeal or intangible character, other thatn those covered under entry 39 in Schedule-A & notified videGovernment Notification, Finance Department No.VAT.1505/CR-114/Taxation-1, adted 1st June 2005.

28 Human blood, its components and products thereof.

29 Idols of deities in clay or Plaster of Paris.

30 a) Indigenous handmade musical instruments and components and parts thereof notified vide Government Notification,Finance Department No.VAT.1505/CR-112/Taxation-1, dated 1st April 2005.

b) Bicycles, tricycles, cycle rickshaws and parts, components, accessories, tyres and tubes thereof.

31 Kumkum in any form including bindi, alta and sindur.

32 Leaf plates and cups.

33 (1) a) Raw meat except in frozen state or in sealed container,

b) Raw flesh of poulty except in frozen state or in sealed container.

c) Raw seafood including fish, prawns, lobsters, crabs and Shrimps except in frozen state or in sealed container.

(2) Eggs in shell.

(3) Sheep, goats, pigs, poultry and cattle excluding horses.

34 Milk, that is to say, animal milk in liquid form except when served for consumption and excluding

a) condensed milk whether sweetened or no, and

b) milk containing any ingredient and sold under a brand name.

35 National flag

3 5


Sr.No.

Name of goods

36 Judicial & Non-Judicial stamp paper when sold by Government Treasuries; postal items like envelops, post cards etswhen sold by Government.

37 Oraganic manure (excluding oil cakes and de-oiled cakes)

38 (a) Plantain leaves.

(b) Rakhee

39 Poha, lahya and chirmura

40 Raw wool

41 Seeds of all types excluding seeds to which any other entry of this Schedule or of Schedule-A applies.

42 Semen including frozen semen.

43 Silk worm laying, cocoon and raw silk.

44 Slate and slate pencils but not including writing boards.

45 Katha (Catechu)

46 Tender green conconut

47 Lottery Tickets.

48 Salt, that is to say, common salt including iodised salt.

49 Water other than, -

(a) aerated, mineral, distilled, medicinal, ionic, battery, demineralised water.

(b) water sold in sealed container.

(c) water for injection.

50 Goods distribution through the Public Distribution System, (except kerosene)

51 (I) Gur

(II) Chillies, turmeric & tamarind whole, powdered or separated.

(III) Coriander seeds, Fenugreek and Parsley(Suva)whole or powdered.

(IV) Coconut in sheel & separated kernel of coconut other than copra.

52 Currency Notes & Coins

53 Hurricane lantern and Kerosene lamp, kerosene lanterns, petromax lanterns, kerosene stoves, kerosene pressurestoves, petromax pressure lamps, pressure lamps, glass chimneys and lanterns, petromax gas mantles and accessories,components and parts of all of them.

54 Lac,Shellac and their products

55 (a) Incese sticks commonly known as agarbatti, dhoop, dhupkandi or dhupbatti.

(b) Camphor.

(c) Loban and Ral

56 Solar energy devices & spare parts thereof notified vide Government Notification, Finance Department No.VAT-1509/CR-81-B(1)/Taxation, dated 29th June 2009.

56A Pre-fabricated domestic biogas units.

57 Newspapers

58 Handmade Laundry Soap manufactured by Units certified by the Maharashtra State Khadi and Village IndustriesBoard constituted under the Bombay Khadi and Village Industries Act, 1960, but excluding detergent.

59 Neera and Arak

Companies will have to prepare master lit linked with item code and tariff code and thereafter put the rates, Similarly,they will have to bifurcate purchases outside state, within the state and further bifurcate within limits of MunicipalCorporations and from outside limits of Municipal Corporation and thereafter comply with LBT payment and Statutorycompliances thereof.

There will be half-yearly and yearly returns followed by assessments and Audits and hence considering the penaltyamount, due care is necessary to avoid penalties and litigations.

3 6


CENTRAL EXCISEv Cenvat on goods lost in fire: loss of goods in

fire during superdnama, relief of remission

already allowed by adjudication order. No logic

to allow cenvat credit in respect of inputs

destroyed by fire and their respective value lost.

Exchequer already sacrificed duty component &

remission allowed, order for reversal cenvat

credit justified. [2013 (289) ELT 58 (Tri-Del)]

v Cenvat on goods used in final product

destructed, Remission allowed: credit taken

on inputs used in manufacture of such final

product prior to introduction of rule 3(5C) of CCR,

2004, there was no provision for reversal of credit

lawfully taken and it could not be done either on

equitable doctrine or double benefit accruing too

assesse. However, after introduction of Rule

3(5C) on 07.09.2007, legislature has made its

intention clear and reversal of credit is required.

It is a new right created in favour of revenue and

in absence of any contrary intention, it operates

prospectively, plea that amendment was

clarificatory & hence retrospective stand rejected.

[2013 (289) ELT 256 (Guj.)]

v Scope of CESTAT operative decision:

CESTAT decided matter in favour of assesee but

Apex Court allowing department's appeal with

remand back to CESTAT. During intervening

period show cause notices issued to assesse,

before decision of CESTAT in remand. Held-

show cause notices were untenable as they were

issued when CESTAT decision in favour of

assesse was operative. [2013 (289) ELT 296

(M.P.)]

v Duty on meal tray provided in Flight: meal

tray being mere assembly of food items

purchased and produced by supplier cannot be

termed as Manufacture. Placing of brand name

to be termed as information indicating identity of

caterer, nor covered under Ch. 2108.99. Stay

granted. [2013 (289) ELT 308 (Tri-Del)]

v Cenvat Credit on purchased from EOU:

Cenvat Credit availed on education cess paid by

EOU on excise duty equal to aggregate of

Customs duty. Impugned order allowing benefit

following decision in Emcure Pharmaceuticals

Ltd., challenged by Department on the ground

that it deliverance prior to date of amendment in

rule 3(7)(a) of CCR, 2004, introducing

substantive right of cenvat credit benefit on full

education cess. w.e.f. 07.09.2009. Said Tribunal

decision does not render rule 3(7)a redundant.

It neither rendered any existing provision in law

redundant, nor those introduced subsequently.

It did not ignore decisions of any higher judicial

form or provision of law or relevant facts.

Applicability to present case cannot be denied.

[2013 (289) ELT 327 (Tri-Ahmd)]

v The expression Additional Duty of Customs being

not qualified by any other term in sub-rule (7) of

rule 3 of the cenvat credit rules which provides

for the formula to calculate the amount of credit,

there is no warrant to restrict the scope of the

term Additional Duty of Customs occurring in the

formula to only Additional duty of Customs (CVD)

lieviable under sub-section (1) of section 3 of

Customs Tariff Act and not to include Additional

Duty of Customs (SAD) leviable under sub-

section (5) of section 3. [2013 (289) ELT 381

(Tri-Mumbai)]

v Rebate of Cenvat Credit transferred to merged

unit: Before merger exported was made &

rebate claimed filed. By the time rebate claim

sanctioned the merger had taken place and

rebate sanction by way of credit in cenvat

account. Held- sanctioning authority could have

allowed cash refund as claim related to export

and merged entity responsible to fulfill all liabilities

of merging unit, as such not be deprived of benefit

of rebate allowed to merging unit. [2013 (289)

ELT 347 (Tri-Ahmd)]

3 7


v Cenvat Credit on capital assesset not

covered under definition of capital goods:

Goods accounted as capital assets cannot be

considered as Inputs as held in Aditya Cement

[2009 (245) ELT 266 (Tri-Del.)] However, tyres

being parts of capital asset are not explicityly

excluded from definition of inputs. Tyers are

inputs used in process of handling raw material

forming an integral part of manufacturing

process. Objection regarding tyers not being part

of final product not valid, Cenvat admissible.

[2013 (289) ELT 377 (Tri-Del)]

v Confessional statement of Director of

assessee company is not congent evidence

for clandestine removal: Confessional

statement of Director of Assessee Company,

giving impression that it was extracted by force,

and subsequently retracted. Allegation that raw

materials were received by assessee from

specified firms, but no statement recorded which

could corroborate statement of Director, except

solitary statement of one proprietor, which was

not referred to in show cause. Hon'ble Gujarat

High Court held that departments case was

based on sole statement of Director, which was

too weak, in absence of its corroboration by

congent evidence. Statement of proprietor was

not cogent / convincing corroboration. In that

view, conclusion of clandestine removal of goods

was in realm of propositions / suppositions and

not sustainable. [2013(288) ELT 500 (Guj HC)]

v All the details shown in ER-2 returns as per

format prescribed by Government, therefore

separate details not reflected in ER-2 returns

cannot be a sufficient ground for

suppression of facts and no extended period

will be invoked: EOU allowed to sell in DTA

specified quantities of goods and ER-2 returns

filed by them on monthly basis, giving details as

quantities of DTA sales, quantities of goods

manufactured and exported etc. Revenue not

contending that EOU failed to declare details /

information require under ER-2 returns that it was

wrong or false. Therefore it is held that details

like quantity of goods manufactured in a month

with reference to each of the goods, quantities

physically exported, and quantity as well as value

of each goods cleared, would enable central

excise officers to check if its availment was in

order. In that view revenu's contention that ER-

2 returns was not sufficient to find out if EOU

exceeded permissible limit of DTA clearance was

not tenable. Further the format of ER-2 Returns

is prescribed by Government and EOU could not

be accused of suppression of facts if details /

information provided by EOU were in accordance

thereof. Extended period was not invokable.

[2013(288) ELT 514 (Guj HC)]

v Goods Initially cleared from the factory for

home consumption and thereafter exported

out of India cannot be equated with the

goods exported directly: Cotton rugs were

cleared into DTA by claiming full duty exemption

and the same were not exported under bond

directly from the factory in terms of the provisions

of Rule 19 of Central Excise Rules, 2002 neither

exemption of duty in terms of Notification No. 67/

95-CE was available nor cash refund of duty paid

on dyed cotton yarn would have been available

to the assessee. [2013(288) ELT 560 (Tri. Del)]

v SSI Exemption: PP Caps manufactured by

assessee and on these caps, name of the

customer is also printed by the assessee as per

requirement of customer. Such goods not

treatable as manufactured with customers brand

name, the said goods are eligible for exemption

under Notification No.8/2013-CE as amended by

Notification No.47/2008-CE. [2013(288) ELT 514

(Guj HC)

v Interest liability does not arise if the wrongly

availed Cenvat Credit reversed without

utilization: It is clarified that the interest liability

arises only when wrongly availed Cenvat Credit

has been utilized. [2013(29) STR 640 (Tri.

Bang.)]

v It is not permissible to impose penalty after

dropping of the demand: On facts demand for

cenvat credit on capital goods found to be

unsustainable as depreciation claimed initially

was later reversed, thereafter penalty cannot be

imposed on the ground that conditions

prescribed under Rule 4(4) of CCR 2004 were

mandatory. Held that once demand is dropped

3 8


no penalty can be imposed thereafter.

[2013(288) ELT 513 (Kar HC)]

CUSTOMSv SVB-loading due to royalty fees: Technical

know-how / licence fee, paid to process licensor

for providing process design, specification, data

and review of respective documents.

Subsequently separate contract entered for

execution of Engineering, Procurement &

construction (EPC) and equipment imported

pursuant thereto. Process licensor not having any

direct or indirect role in procurement, supply and

price of equipment. In that view, loading of value

of equipment on account of technical know-how

fee, found to be wrong & set aside. [2013 (289)

ELT 33 (Tri-Kolkata)]

v Recoveries of due from Directors no allowed:

Recoveries due and payable by companies

cannot be recovered from their directors.

Company is a juristic entity independent of its

directors & shareholder. If revenue case is that

corporate body was mere shell used to defraud

Revenue, the case for lifting corporate veil has

to be made out when notices of demand are

issued to company by making directors /

shareholders liable to pay the dues. There is no

provision in respective laws where due of private

limited company can be recovered from its

directors. In that view notice to director for

recovery and attachment was without authority

of law. [2013 (289) ELT 281 (Bom)]

v SVB-enhancement of value: No reasoning

given or evidence of comparable value of

identical imports produced for enhancing

declared value of mix ball bearings of china origin.

NIDB cannot be made basis of enhancement as

held in number of court decisions. No justification

for enhancement of value without fist assessing

quality of goods, no interference required in

impugned order accepting transaction value.

[2013 (289) ELT 305 (Tri-Del)]

v Appellant had produced evidence from foreign

supplier indicating clearly as to how the product

supplied is different from natural nutmeg oil in

terms of various parameters. There is also a

declaration that product supplied is not nutmeg

essential oil but it is only a natural identical flavor.

Lower authorities have not given any finding on

the documentary evidences submitted but

rejected the transaction value and relied on the

prices quoted in the Public Ledger reporting the

price of nutmeg oil. Such an enhancement of

value is bad in law. Order set aside [2013-TIOL-

355-CESTAT-MUM]

v Power of Settlement Commission to waive

interest withdrawn from 01.06.2007 by

amending Section 127H of Customs Act,

1962: The dispute before the Settlement

Commission relating to period prior to 01.06.2007

but application for settlement filed thereafter.

Settlement Commission has no jurisdiction to

grant an immunity or a waiver from the statutory

liability to pay interest for interest payable under

Section 28AB ibid, where the application under

Section 127B ibid is filed to the Settlement

Commission after 01.06.2007. [2013(288) ELT

527 (Bom HC)]

v Conversion from Drawback to Advance

License Scheme allowed: Request for such

conversion made within two and a half months

of export for conversion of shipping bill from

Drawback to Advance License Scheme when

part of the consignment was under Advance

License Scheme and part under Drawback

scheme denied on the ground that drawback has

already been paid. Request not covered under

Board's Circular No.4/2004-Cus dated

16.04.2004 and goods require regorous

examination at the time of export under Advance

License Scheme not justified when the appellants

were ready to pay drawback amount with interest,

application of Board's Circular was not

sustainable, as there was no dispute in relation

to the conversion and part of the consignment

had already been examined. Conversion needs

to be allowed. [2013(288) ELT 545 (Tri.

Chennai)]

v Remission Vs. Insurance benefit: Goods

stored in private bonded warehouse destroyed

in floods, Remission of Customs duty and

Insurance covers risk. Provisions of Customs Act

cannot be mixed with those of Insurance Act to

deny the benefit specifically provided under s.

3 9


23 of the Customs Act, 1962. Assistant

Commissioner having granted remission cannot

review his own order after a lapse of three years

and direct for recovery of amount remitted. Order

is bad in law, as the amount settled in favour of

the appellant does not include any customs duty

in respect of bonded goods, the question of

recovering the duty remitted does not arise at

all. Department directed to refund amount

received from Insurance company to appellant.

[2013-TIOL-375-CESTAT-MUM]

SERVICE TAXv Cenvat Credit could be utilized for payment

of Service Tax as recipient of GTA services:

Assessee being liable to pay Service Tax on GTA

service, he was doing so as an output service

and therefore he was entitled to utilize cenvat

credit for payment of such tax. Definition of

'person liable for paying service tax' and definition

of ' provider of taxable service' supported this

view. Assessee being liable to pay service tax

on GTA service by virtue of said definitions he

would squarely fir in the definition of provider of

taxable service. There being no legal bar to

utilization of Cenvat Credit for the purpose of

payment of Service Tax on GTA by deemed

provider thereof the same is allowed. [2013(29)

STR 474 (Tri. Bang.)]

v Though Export of Services taken place in

India but the benefits of service accrues

outside India then it will not be taxable: This

is a case of promotion of Foreign Company's

Products and commission received in foreign

currency. It is held that this case falling under

category III of Rule 3(b) of Export of Services

Rules, 2005 and according to Board Circular

No.111/5/2009-ST dated 24.02.2009 clarifying

export of services may take place when all

relevant activities taken place in India so long as

benefits of service accrue outside India. Benefit

in terms of promotion of foreign company's

business accruing outside India. Prima facie case

for total waiver made out.[2013(29) STR 479 (Tri.

Kolkata)]

v Filing of declaration after date of export of service

would not amount to non-compliance as to

disentitle exporter from rebate: Rebate to IT

enables services, Call Centres / business

process outsourcing viz. Technical support,

customer case, back-office etc. Rebate of service

tax paid on input services like night

transportation, recruitment, training, bank

charges. Nature of services is such that they are

rendered seamlessly, on continuous basis without

any commencement or terminal points and it is

difficult to comply with requirement 'prior' to date

of export, except for description of services.

Every phone call is export of taxable service, but

invoices in respect of above input services in

normal course are received only at regular

intervals viz. Month or fifteen days etc. One-to-

one matching of input services with exported

services is impossible. However, if particulars in

declaration are furnished to service tax

authorities within a reasonable time after export

along with necessary documentary evidence,

and are found to be correct and authenticated,

object / purpose of filing of declaration would be

satisfied. [2013(29) STR 545 (Del. HC)]

v Service tax exemption to SEZ: The appellant

was exempt from payment of tax prior to

03.03.2009 and the said exemption continued

after 20.05.2009 and during the interim period

there was no exemption which was clearly an

oversight on the part of Government. Besides

legal submissions, several decisions were also

cited in support of the claim that in such situation,

exemption would be treated as availble. In any

case it was also submitted that the situation was

revenue neutral since even if the appellant was

to pay the service tax, recipient could have

claimed the same as refund. In this case neither

extended period could have been invoked nor

penalty imposed. [2013(29) STR 616 (Tri.

Ahmd.)

v Commercial Coaching & Training Services

from Foreign Parent Company: Foreign Parent

Company training employees of their Indian

Subsidiary. Incurring expenditure in foreign

currency not for training but only towards travel,

accommodation and other expenses. This

contention not controverted by revenue with

evidence. Therefore Indian Subsidiary could not

4 0


be held liable for service tax under reverse

charge mechanism on services availed by them

from their parent company as they had not paid

any remuneration for training charges. Charges

paid for training outside India could not be

charged to service tax. [2013(29) STR 620 (Tri.

Chennai)]

EOUv Duty Demand - Non-fulfillment of export

obligation: on reasonable cause being shown

& no other violation found to be committed by

EOU, Development Commissioner granting

extension of Letter of Permission by further five

years. In such case, nonfulfillment of EO can be

the ground for Customs Authorities to initiate

action against EOU & liability for recovery of duty

arises before de-bonding sought either by EOU

or Development Commissioner. [2013

(289)E.L.T. 15(Bom)]

v Duty at the time of de-bonding: depreciation

permissible only when capital goods cleared after

Development Commissioners approval, no such

permission obtained- depreciation not to be

allowed. LOP not renewed by Development

Commissioner, Customs duty payable on raw

materials lying unutilized on date of deemed

removal. Assessment on original value on

importation but at rate prevailing on date of

deemed removal. No duty payable on raw

materials consumed in manufacture of goods

exported. [2013 (289) ELT 72 (Tri-Mumbai)]

v Though physical removal of inputs and

capital goods from EOU never took place

since EOU and DTA located in same premises,

cenvat credit cannot be denied: Requirement

of transfer of goods and issue of invoice for

availing credit in DTA Unit Physical removal of

inputs and capital goods from EOU never took

place since EOU and DTA was always part of

the same premises and did not have separate

registration certificate. Hence, procedural

requirement of issuing invoices for transferring

the goods to DTA does not arise. Once the duty

on capital goods and inputs were paid, for

de-bonding of EOU, it can be said that the same

stood transferred to the DTA unit. Therefore,

credit has been taken correctly in the first instance

and therefore question of demanding interest

does not arise. [2013-TIOL-396-CESTAT-AHM]

MiscellaneousJudgments against CBEC Circular No. 967/1/2013

dated 01.01.2013

v Automatic stay of recovery of government

dues after filing of Stay Application, No

coercive actions initiated in view of CBEC

Circular No.967/1/2013 dated 01.01.2013:

According to provisions of CBEC circular Sr. Nos/

3,6 & 9 mandating that though stay application

had been filed before Commissioner (Appeals)/

CESTAT which is pending, recovery could be

initiated thirty days after filing of appeal if no stay

is granted. Hon'ble Bombay High Court held that

No coercive action unless assessee restore to

dilatory tactics. If failure of Appellate Authority to

dispose of appeal or stay is not due to default of

assessee or their dilatory tactics, to initiate

recovery by coercive measures in meantime

unjustified, arbitrary, travesty of justice and

violation of Article 14 of Constitution of India.

[2013(288) ELT 481 (Bom HC)]

v No coercive action for recovery be initiated

during pendency of appeal: On the basis of

decision of Bombay High Court against the

recovery Circular No.967/1/2013 dated

01.01.2013 similar decision has been taken in

many cases that no coercive action should be

initiated during pendency of appeal. [2013(288)

ELT 509 (Del HC)],[2013(288) ELT 510 (Kar

HC)], [2013(288) ELT 511 (Raj HC)], [2013(288)

ELT 4509 (Del HC)]and [2013 (289) ELT 248

(A.P.)].

4 1


i Collection of CBDT & CBEC dues - RBI directs banks for special arrangements to close FY

2012-13 by April 15.

i Sovereign rating: Supporting pillars for India have 'weakened', says S & P.

i Disasters cost USD 100 bn to global economy in 2012.

i Cyber security worries Obama; President raises issue with CEOs.

i BRICS now accounts for 20% of world FDI flows: UN Report.

i Pensioners can now post grievances online: Minister.

i Out of 38 cities, 28 achieve 50% digitalisation; 4 cities achieve 100%.

i Central Excise duty evasion: DGCEI Hqs recovers Rs 747 Crore from Coal India.

i Global economy on recovery path but Europe lags behind: OECD.

i 13 States obtain relaxation in norms for appointment of teacher under SSA.

i India's forex kitty jumps by one bn. USD to USD 293 bn.

i Core Sector logs 2.6% growth in February; down by 2.5% as compared to last fiscal.

i TN Cadre IAS officer M F Farooqui takes over as Tourism Secretary.

i Income-tax Offices through out India was opened and the receipts counters was also worked

during normal office hours on 30th and 31st of March 2013 to facilitate filing of return of

income and other related work of tax payers.

i Draconian Circular takes New Twist - Karnataka HC takes serious view of pendency of Stay

applications and directs Ministry of Finance to constitute many benches of CESTAT and file

compliance Report by June 13.

i Train journey - New Tatkal + Cancellation + reservation charges to come into effect from

April 1, 2013.

i Nagpur Airport Customs seizes gold jewellery worth Rs. 82 lakh from pax coming from Sharjah

i Durban Summit: BRICS Members agree to set up New Development Bank with initial corpus

of USD 100 bn; also welcome setting up of BRICS Think Tanks Council and Business Council.

i Gurgaon-Jaipur NH: ICICI Lombard to provide cashless treatment to accident victims as part

of CSR.

i Aviation Sector to have USD 120 bn investment by 2020; to handle 421 mn pax.

i Power supply to Central Excise Office in Gurgaon disconnected since Tuesday by Landlord

4 2


HSIDC due to non-payment of rent of Rs 4.5 Crore-Excise Office is planning to shift to its own

building opposite Medicity Hospital in April(It appears that Landlord came to know that Tenant

is shifting without paying rent).

i Sahar Airport Customs seizes goods worth Rs 89 Cr in current fiscal.

i Transporters proposed strike from April 1 called off; Demands include removal of anti-dumping

duty on tyre.

i China announces to remove import duty on many items from 1st April 2013.

i Chennai Airport Customs seizes 2 kg gold concealed in LED TV stand.

i Mumbai slips to 66th rank among world's leading financial hubs.

i India's external debt marginally goes down in Q4.

i CBEC giving priority to Annual General Transfer order of ACs/DCs.

i Containers movement by Rail: Haulage charges to significantly go down from April 1, 2013.

i HRD Ministry advises States to promote gender sensitisation; CBSE working on training

modules.

i India's manufacturing growth tripsto 16-month low in March: HSBC.

i Commerce Minister to unveil Annual Supplement to FTP in third week of April 2013.

i FM says no more hike in import duty for gold to curb smuggling.

i SC directs Sterlite Industries to deposit Rs 100 Cr for environmental damage.

i FII debt limits: Govt further simplifies guidelines to attract FDI.

i Mumbai DGCEI detects excise & service tax evasion of Rs 2540 Cr and recovers Rs 230 Cr

in last fiscal.

4 3


i CBI raids service tax office in Thane-Senior Service Tax Officer Akhilesh Tiwari

arrested by CBI while accepting bribe-His subordinate RK Singh manages to

give a slip to CBI-Cash of Rs. 19 Lakh recovered by CBI.

i Director of Anti-dumping duty RK Jain sentenced to 3 years imprisonment for

corruption & bribe taking.

i Mumbai CBI arrests Central Excise Superintendent of Thane II Commissionerate,

allegedly accepting bribe of Rs 45000.

i VVIP Copter deal: Somebody has taken money, says Defence Minister.

i Trichy Airport Customs seizes drugs worth Rs 1.8 Cr heading for Malaysia.

i Mumbai CBI Court sentences Addl.CIT R K Gupta to 3-yr imprisonment in bribery

case.

i Sahar Airport Customs seizes electronic goods worth Rs 28.5 lakh from two pax.

i CBI nabs Central Excise Superintendent taking Rs 3.5 lakh bribe; Huge cash

recovered from residence.

i Mumbai LTU recovers more than Rs.100 Crore tax evaded by two Pharma

companies.

i Guwahati Customs seizes 49 kg Methaqualone worth Rs. 7.4 Cr; One person

arrested.

i TN Pollution Control Board orders shut-down of Sterlite Copper Plant.

i SC revokes curbs imposed on Italian Ambassador's movement outside India.

4 4


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