The Government of India today signed an Agreement and Protocol for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital (DTAA) with Government of Lithuania. The Agreement and the Protocol were signed by Shri Prakash Chandra, Chairman, Central Board of Direct Taxes, on behalf of the Government of India and Mr. Petras Simeliunas, Ambassador, Republic of Lithuania to India, on behalf of the Government of Lithuania. Lithuania is the first Baltic country with which DTAA has been signed by India.
LETTER [DY. NO. 2305/COMMR(ST)/2011], DATED 15-7-2011 The issue raised in your said letter is regarding leviability of service tax under Business Auxiliary Service (BAS) on computer embroidery work carried out on job work. The matter has been examined. The definition of BAS as provided under section 65(105)(zzb) read with section 65(19) of the Finance Act, 1994, does not include any activity that amounts to manufacture of excisable goods. It also mentions that excisable goods has the meaning assigned to it in clause (d) of section 2 of the Central Excise Act, 1944 and manufacture has the meaning assigned to it in clause (f) of section 2 of the Central Excise Act, 1944.
LETTER [F. NO.137/35/2011 – SERVICE TAX], DATED 13-7-2011 Representation has been received seeking clarification on applicability of service tax under Manpower Recruitment and Supply Service in respect of employees sent on deputation by ONGC to Directorate General of Hydrocarbons (DGHC). The matter has been examined and it is clarified that activity of ONGC for providing its staff on deputation to DGHC for a remuneration in the form of reimbursement from DGHC, is chargeable to service tax under ‘Manpower Recruitment or Supply Agency’s Service’ in terms of section 65(105)(k) of the Finance Act. As per section 65(68) of the Finance Act, Manpower Recruitment or Supply Agency means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person.
LETTER [F.NO.106/COMMR(ST)/2009] Representations have been received seeking clarification regarding leviability of service tax on the Development Fees charged at Airports particularly at Mumbai and Delhi by Mumbai, International Airport (P.) Ltd. and Delhi International Airport (P.). Ltd.
LETTER [F. NO. 137/132/2010 – SERVICE TAX], DATED 11-5-2011 – Representations have been received seeking clarification regarding leviability of service tax on the Flying Training Institutes providing training for obtaining Commercial Pilot Licence (CPL) and on Aircraft Engineering Institutes for obtaining Basic Aircraft Maintenance Engineer Licence (BAMEL). CPL and BAMEL are granted by Directorate General of Civil Aviation after conducting required examinations. These institutes have sought to cover-their activity under the exemption clause provided in the definition of “commercial training or coaching centre”, as laid down in section 65(27) of the Finance Act, 1994, as it stood prior to the amendment in Budget of 2011. As per this definition, commercial training or coaching centre ‘does not include pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. Their contention is that the certificates issued by them are recognised by DGCA and also the course conducted by them are as per the provisions of The Indian Aircraft Act, 1934, the Indian Aircraft Rules, 1937 and are in accordance with Civil Aviation Requirements.
Gross direct tax collections during the first quarter of the current fiscal (April – June 2011) were up by 23.91 percent at Rs.104,136 crore as against Rs.84,041 crore. While gross collection of corporate taxes was up 23.49 percent (Rs.68,223 crore against Rs.55,244 crore last year), gross collection of personal income tax was up by 24.63 percent (Rs.35,859 crore against Rs.28,772 crore last year).
LETTER [F.NO.106/COMMR(ST)/2009] DATED 8-7-2011 Representations have been received seeking clarification regarding leviability of service tax on the Development Fees charged at Airports particularly at Mumbai and Delhi by Mumbai, International Airport (P.) Ltd. and Delhi International Airport (P.). Ltd.
The above mentioned guidelines have been reconsidered by the Board and it has been decided that the scrutiny of such cases would be limited only to the aspects of information received through AIR. However, a case may be taken up for wider scrutiny with the approval of the administrative Commissioner, where it is felt that apart from the AIR information there is a potential escapement of income more than Rs. 10 Lacs.
IRDA had earlier required that portability of health insurance policies across non-life insurance companies including stand alone health insurance companies would be introduced with effect from 1st July, 2011. The modalities of such portability to be effective and consumer friendly have been discussed with the non-life insurers in the country.
Monetary Measures -On the basis of the current macroeconomic assessment, it has been decided to increase the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.25 per cent to 7.5 per cent with immediate effect.Consequent to the above increase in the repo rate, the reverse repo rate under the LAF will stand automatically adjusted to 6.5 per cent and the marginal standing facility (MSF) rate to 8.5 per cent with immediate effect.
