There is no change in the peak rate of the custom duty in the current budget. Exemption from 4% additional duty of customs has been withdrawn :- The exemption from 4% additional duty of custom leviable under section 3(5) of the Custom Tariff Act has been withdrawn from Power generation projects, (Other than mega power projects) transmission, sub-transmission and distribution projects, and goods for high voltage transmission projects.
The cenvat rate is reduced from 16% to 14% from 1.3.2008. Consequently, the education cess will be computed on 14% and the rate including the education cess will be 14.42%. · In some products like medicaments, the duty rate has been reduced to 8%. The cenvat credit availed by the manufacturer is not dependent on the duty rate of the final product. Therefore, whatever duty is paid by the manufacturer of the inputs, the credit of the same would be available to the manufacturer of the final product even if the rate of duty for such product is 8%. Thus, if a manufacturer of medicament buys bulk drug which attracts duty @ 14%, the credit of entire amount of duty would be available to the manufacturer. There will be no reduction in the quantum of credit available to the manufacturer.
CIT vs. Bilahari Investments (Supreme Court) – In the case of a chit fund following the ‘completed contract method of accounting’ and offering income at the end of the chit, held, approving the method: (i) Recognition/identification of income under the Act is attainable by several methods of accounting including the completed contract method or the percentage of completion method.
Due Date of Tax Audit Preponed to 30th September. No change in ceiling of Rs. 40 Lacs under section 44AB. DIRECT TAXES -No change in corporate income tax rate. Income Tax exemption rates raised from 1.1 lakhs to 1.5 lakhs across the board. Exemption limit for women raised to 1.8 lakhs and for senior citizen raised to 2.25 Lakh. Fresh Facilities, Encouragement To Sports And Guest Houses Exempted From Fringe Benefit Tax.
ACIT vs. M/s Triace (ITAT Mumbai) – Where the CIT (A) decided the ground of reopening against the assessee but decided the ground of merits in favour of the assessee, the assessee is entitled, in an appeal by the Revenue before the Tribunal, to urge, under Rule 27 of the I. T. Rules, that the CIT (A) was wrong in deciding the ground of reopening against the assessee.
Amway India vs. DCIT (ITAT Delhi Special Bench) – The question whether expenditure is on capital or revenue account should be decided from the practical and business view point and in accordance with sound accountancy principles. The three tests applied to decide the nature of expenditure are the tests of enduring benefit, ownership test and the functional test.
Idea Cellular vs. DCIT (Bombay High Court) – Where all the material facts were placed before the AO and he raised questions thereon, Explanation 1 to s. 147 has no application. Further, the argument that because there was no discussion in the assessment order, the AO had not applied his mind or expressed an opinion is not acceptable.
CCE vs. Punjab Fibres (Supreme Court) – In the context of s. 35 of the Excise Act, held (1) Where the statute confers on the authority concerned a limited power of condonation of delay or does not provide any such power, the authority has no power to condone delay beyond the prescribed period; (2) unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the ther hand, a law which is procedural in nature, and does not affect the rights, is retrospectively applicable;
Munjal Sales vs. CIT (Supreme Court) – (i) A firm seeking to claim deduction of interest paid on capital from its partners has to first satisfy the requirements of s. 36(1)(iii) and thereafter the limits imposed by s. 40(b)(iv). The fact that the said capital is not loans or advances is irrelevant.
Imagic Creative (P.) Ltd. v. Commissioner of Commercial Taxes Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct.
