Cash withdrawals from ATMs: Free transactions reduced to 3 in six Cities
RBI rationalises Number of Free Transactions on ATMs
The policy framework of the Reserve Bank has aimed at fostering the growth of non-cash payments. The number of Automated Teller Machines (ATMs), which stood at a little over 27,000 as at end-March 2007, has increased to over 1.6 lakh across the country by end-March 2014. The Point-of-Sale (POS) infrastructure has increased from 3.2 lakh to 10.65 lakh terminals between end-March 2007 and end-March 2014. It is, however, observed that the development of other payment mechanisms and related infrastructure is more visible in metropolitan areas in the country.
Given the growth in cash access points and taking into account the associated costs of infrastructure to banks and the economy more generally, the Reserve Bank of India has decided to revise the existing directions relating to the use of automated teller machines (ATMs) and charges on their use.
It has issued a circular today to banks with revised instructions, the objective of which is to move away from micro management of business decision of banks while protecting the interests of the weaker sections of the society.
Accordingly, the number of mandated free transactions for savings bank account holders at other bank ATMs has been reduced from five to three per month. This will apply for transactions done at ATMs located in six metro centres, namely, Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad which are well-served in terms of payment infrastructure.
This reduction will, however, not apply to customers having no-frills/small/Basic Savings Bank Deposit Account (BSBDA) type of accounts as well as for transactions done by savings bank account holders at ATMs situated outside these six metro centres. Banks are also free to offer free transactions above this mandated limit.
Further, taking into account the scope for cross-subsidisation and with a view to ensuring more transparency in the pricing of these transactions, banks have been advised to provide their savings bank account holders with at least five free transactions per month at their own ATMs. Beyond this, banks may decide to levy transaction charges (not exceeding `20/- plus applicable taxes per transaction) which are decided in a transparent manner.
Given that different banks may adopt different pro-customer policies with respect to ATM usage, and with a view to minimising customer grievances, banks have also been advised to put in place a mechanism to make customers aware of the location-status of the ATM (metro/non-metro) and also the fact that the transaction may attract charges. Banks have been asked to put in place mechanisms to advise/alert customers regarding the number of free transactions availed during the month by him/her.
Cenvat Credit on GTA Service- A dilemma solved
Goods Transport Agency (GTA) service is a misconception since its inception. The light of mess ignites more with its coverage under reverse charge mechanism.
As per the provisions applicable for GTA Service,
- This service is covered under Reverse Charge Mechanism; therefore, the service tax liability is to be paid by the service recipient that being a manufacturer or a Service provider.
- There is an abatement of 75%, therefore the service tax liability is payable on 25% portion
- This being an Input Service, the cenvat credit of this service is also available.
Now the general rule is that, the cenvat credit is not available when we are providing services availing the benefit of abatement. But this is applicable only on service provider and not on service recipient.
Therefore, the cenvat credit of GTA service is available to a service recipient even though the service tax under reverse charge has been paid after claiming abatement of 75%.
However, the Central Excise and Service tax department were constantly taking a view that the cenvat credit is not available as the tax is paid after claiming abatement. Or the recipient has to get an undertaking from the provider that they have not claimed the abatement.
This issue is set at rest. A new Notification no 08/2014 applicable w.e.f. 11th July 2014 has been introduced.
The amendment clarifies that the condition for non- availment of credit is required to be satisfied by the service providers only. Service recipient will not be required to establish satisfaction of this condition by the service provider.
(Author -CA Raman Singla, Partner- Indirect Tax Professionals, www.indirecttaxprofessionals.com ,Mail: caramansingla@gmail.com)
Additions on basis of info extracted form loose paper found in search proceedings of third party set aside
August 16, 2014[2014] 47 taxmann.com 293 (Pune - Trib.)
IT: Where Assessing officer made additions in case of assessee on basis of noting in loose papers found during search proceedings in case of third party against name of assessee as there was no evidence to suggest that payments were made to assessee, additions so made were not justified
NEW DELHI, AUGUST 16, 2014 : "WHETHER the Income-tax Appellate Tribunal was justified in holding that the sum of Rs.45 lacs paid by the assessee to the Customs authorities on account of redemption fine, was an allowable expenditure?" is the substantial question of law involved in this Income Tax appeal.
The respondent-assessee was engaged in manufacture of organic chemicals and had purchased 630 metric tonnes Isobutanol on high sea basis. On account of litigation with the Customs authorities, the goods in question were sold in an auction on 14th March, 1989 pursuant to the direction of the Supreme Court. In adjudication proceedings under the Customs Act, 1962 a redemption fine of Rs.90,00,000/- was imposed along with a penalty of Rs.10,00,000/- on the respondent-assessee, which on appeal was reduced to Rs.45,00,000/- and Rs.2,00,000/-, respectively.
The question raised in the present appeal is whether redemption fine of Rs.45,00,000/- could be claimed as an expenditure under Section 37 of the Income Tax Act, 1961 or the same is hit by the Explanation to Section 37 or was not an expenditure, wholly and exclusively for purpose of business.
The counsel for the Revenue submitted that the expenditure in question would be barred under the Explanation to Section 37 as redemption fine was paid by way of penalty and as per Section 111(d) of the Customs Act the goods in question were prohibited goods.
In support, the respondent-assessee relied upon the decision in Usha Micro Process Controls Ltd. Vs. Commissioner of Income Tax wherein reference was made to the judgment of the Madras High Court in Commissioner of Income Tax Vs. N.M. Parthasarathy, [1995] 212 ITR 105 and decision of the Supreme Court in Prakash Cotton Mills Pvt. Ltd. Vs. Commissioner of Income Tax (Central), Bombay, 2002-TIOL-595-SC-IT .
The counsel for the Revenue submitted that the decision in Usha Micro Process Controls Ltd. (supra) requires reconsideration in view of decisions of other high courts as noticed in Commissioner of Income Tax Vs. Jayaram Metal Industries, 2006-TIOL-331-HC-KAR-IT and Maddi Venkataraman& Co. (P) Ltd. Vs. Commissioner of Income Tax, [1998] 229 ITR 534 (SC). It is also submitted that language of Explanation to Section 37 is quite clear and once it is held that the expenditure was incurred for any purpose, which was prohibited by law, the same is deemed not to be incurred for the purpose of business or profession; that the said Explanation incorporates a deeming fiction, which must be given full effect to.
The High Court observed -
++ The requirement of Explanation is that payment in form of expenditure should not be made for the purpose, which is prohibited by law. Finding of the Tribunal, as recorded in the impugned order, is that M/s India Craft had initially entered into a contract and had purchased Isobutanol under REP licence and the same was subsequently purchased by the respondent-assessee on high-sea basis. This was a commercial transaction between two unrelated parties. It is in these circumstances that the respondent-assessee had applied for clearance of goods in India.
++ The fault or defect in the REP licence was not attributable to the respondent-assessee as the licenses were issued to India Craft. The respondent-assessee was not to be blamed and had not indulged in any offence or incurred any expenditure for the purpose, which was prohibited by law.
++ The respondent-assessee had to pay redemption fine in order to save and protect themselves and in terms of the order passed by the Supreme Court they had received the balance consideration from the auction proceeds.
++ The finding recorded by the Tribunal is that the conduct and action of the respondent-assessee was not blameworthy or commanding censure. The respondent-assessee wanted to set-off the redemption fine from the consideration received by them. In fact, the respondent-assessee had only received the net amount after adjustment of the redemption fine. Of course, the penalty amount is not a subject matter of the present appeal and we express no opinion in that regard.
Holding that the substantial question of law has to be answered in favour of the respondent-assessee,the Revenue appeal was dismissed.
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GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
F Appellate Tribunal while considering stay application deciding matter finally, course adopted by Appellate Tribunal not justified : Commissioner of Customs v. M. K. Shipping Services (Bom) p. 468
F Where claim for interest for period between date of deposit and order of adjudication not made either before adjudicating authority or Appellate Tribunal, cannot be entertained in writ petition : Govind Mills Ltd. v. CCE (All) p. 473
F Mere error of findings of one or other lower authorities insufficient to invoke jurisdiction under section 130 of 1962 Act : Pacific India Trade Concern v. Commissioner of Customs (Delhi) p. 476
F Where no satisfactory explanation regarding defect in maintenance of records or actual availability of stock, levy of duty upheld : Alagappa Cements P. Ltd. v. Customs, Excise and Gold (Control) Appellate Tribunal (Mad) p. 480
F Failure to produce authorisation to challenge order of Settlement Commission, Assistant Director (Investigation) has no locus standi to file petition against order : Union of India v. Dharampal Satyapal (Delhi) p. 484
F Where complex and disputed questions of fact requiring detailed enquiry to be referred to adjudicating officer and no full and true disclosure of duty liability by assessee, order by majority decision of Settlement Commission set aside : Union of India v. Dharampal Satyapal (Delhi) p. 484
F Assessee entitled to taking suo motu credit out of input service credit reversed by it by account entry : ICMC Corporation Ltd. v. CESTAT (Mad) p. 546
F With introduction of section 38A in 1944 Act, omission of rule 96ZO(3) not to affect obligation or liability already accrued or incurred : Mittal Alloys v. CCE (P&H) p. 554
F Possession of unaccounted excisable goods proof of intention to evade duty by clandestine clearance : CCE v. Ganpati Rolling P. Ltd. (Trib.-Delhi) p. 529
F Application for refund of special additional customs duty filed beyond one year from date of deposit of duty barred by limitation : Date of payment of duty relevant and not date of stamp of bank on TR-6 challan : Sony India P. Ltd. v. Commissioner of Customs (Trib.-Delhi) p. 558
F Rules :
Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2014 p. 254
Cenvat Credit (Sixth Amendment) Rules, 2014 p. 255
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