CHANGE IN JAPANESE YEN RATE OF EXCHANGE

Notification No.: 17/2013-Customs (N. T.)

Date: 31/01/2013

Board makes the following amendments in the Notification No. 5/2013-CUSTOMS (N. T.), dated the 17^th January, 2013.

            SCHEDULE-II 

S.No.	Foreign Currency	Rate of exchange of 100  units  of foreign currency equivalent to Indian rupees
		(For Imported Goods)	(For Export Goods)
1.	Japanese Yen	59.60	58.00

The implication of the above notification is Rate of Exchange of Japanese Yen for Imported Goods becomes 59.60 instead of 60.00 and that for Export Goods becomes 58.00 instead of 61.30.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in

HIGH COURT OF DELHI: CAS / ADVOCATES & OTHERS ARE NOT REQUIRED TO PAY 2% EXTRA SERVICE TAX ON THE PAYMENT RECEIVED AFTER 1.4.2012

In its judgment dated 1^st February, 2013 HIGH COURT OF DELHI in the case of DELHI CHARTERED ACCOUNTANTS SOCIETY (REGD.) vs. UNION OF INDIA AND ORS. held that where the services of the chartered accountants were actually rendered before 01.04.2012 and the invoices were also issued before that date, but the payment was received after the said date, the rate of tax will be 10% and not 12% and quashed the circulars No. 158/9/2012-ST dated 08.05.2012 and Circular No. 154/5/2012-ST dated 28.03.2012 as being contrary to the Finance Act, 1994 and the Point of Taxation Rules, 2011.

Issue for Consideration

The question before the Court is the what would be the rate of tax where

• the service is provided by the chartered accountants prior to 01.04.2012;
• the invoice is issued by the chartered accountants prior to 01.04.2012  but 
• the payment is received after 01.04.2012.

Facts of the Case

• The petitioner is an association of Chartered Accountants, registered as a society in Delhi.

• There is no dispute that all the services were rendered before 01.04.2012 and even the invoices were raised before that date and it was only that the payment was received after the said date.

•  In such a case, according to the petitioner, Rule 4(a) (ii) of the Point of Taxation Rules, 2011, applies and the point of taxation shall be the date of issuance of the invoice.

• As per Rule 4(a) (ii) of the Point of Taxation Rules, 2011, which has continued even after 1.4.2012, whenever there is a change in the effective rate of tax in respect of a service, the point of taxation shall be determined in the manner set out in the Rule. Clause (a) provides for a case of taxable service which was provided before the change in effective rate of tax has taken place sub clause (ii) where the invoice has also been issued prior to change in effective rate of  tax but the payment is received after the change in effective rate of  tax, the point of taxation shall be the date of issuing of invoice.

• The service tax authorities however rely on two circulars issued by the CBEC –Circular No.154 dated 28.03.2012 and Circular No.158 dated 08.05.2012 and which say that in case of 8 specified services (which included CA/Advocate service) provided by individuals or proprietary firms or partnership firms and in case of services wherein tax is required to be paid on reverse charge by the service receiver, if the payment is received or made, as the case maybe, on or after 1st April 2012, the service tax needs to be paid @12%.

• The prayer in this petition is for:

(a) quashing of the circular No.158/9/2012- ST dated   08.05.2012 and circular No.154/5/2012-ST dated 28.03.2012 as null and void and ultra vires the Constitution of India and/ or the provisions of the Finance Act, 1994;

(b) issuance of a writ or order or direction in the nature of a writ declaring that under the provisions of the Finance Act, 1994, the taxable event is the rendition of the service and accordingly the rate of tax payable is the rate in force on the date of providing the service.

• Judgment of High Court
  
  

  ·     It is well-settled that a Circular which is contrary to the Act and the Rules cannot be enforced.
  
  
  ·  Court also consider the judgment in the case of Commissioner of Central Excise, Bolpur vs Ratan Melting & Wire Industries 2008(13)SCC(1) a Constitution Bench of Supreme Court where is was held that circular which is contrary to the statutory provisions has really no existence in law.”
  
  
  ·     The circulars in question have not taken note of this aspect, and have proceeded on the erroneous assumption that the old Rule 7 continued to govern the case notwithstanding the introduction of the new Rule 7 which does not provide for the contingency that has arisen in the present case and accordingly HC quashes the circulars.
  
  
  ·  The new Rule 7 inserted w.e.f. 01.04.2012 was not applicable to services rendered by chartered accountants under Section 65(105)(s) of the Act. Both the circulars which are impugned in the present writ petition proceed on the erroneous basis that Rule 7 inserted w.e.f. 01.04.2012 covers the services rendered by chartered accountants.  
  
  
  ·  Circular No.154  when it states that invoices issued on or before 31.3.2012 shall continue to be governed by Rule 7 as it stood before 01.04.2012 is erroneous because on and from 01.04.2012, the old Rule 7 was no longer in existence, having been replaced by new Rule 7. 
  
  
  ·   Circular No.158 insofar as it states that in the case of the 8 specified services (which includes the services of chartered accountants), if the  payment is received or made, as the case may be, on or after 01.04.2012, the service tax needs to be paid at 12% is again without any statutory basis.  The new Rule 7 does not cover the services which were earlier referred to in Clause (c) of Rule 7 (including services of chartered accountants) as it existed up to 31.3.2012.  The circular seems to have overlooked this crucial aspect. 
  
  
  ·    The case of the petitioner is governed by Rule4 (a) (ii) of Point Of Taxation Rules, 2011. Under this clause where the taxable service has been provided before 01.04.2012 and the invoice was also issued before 01.04.2012, but the payment is received after 01.04.2012, then the date of issuance of invoice shall be deemed to be the date on which the service was rendered and, consequently, the point of taxation.
  
  
  ·  The result of the discussion will be that where the services of the chartered accountants were actually rendered before 01.04.2012 and the invoices were also issued before that date, but the payment was received after the said date, the rate of tax will be 10% and not 12%.
  
  
  Regards
  CA. Mona Singhal
  Partner
  
  
  Arpit Gupta & Associates
  Chartered Accountants
  
  
  701, Nirmal Tower,
  26, Barakhamba Road,
  Connaught Place, Delhi-110001
  
  
  Mobile:- +91-9873082769
  Website:- www.caaga.co.in
  
  
  
  
  
  

LIQUIDITY ADJUSTMENT FACILITY – REPO AND REVERSE REPO

AND MARGINAL STANDING FACILITY RATES

Notification No.: RBI/2012-2013/398

Date: 29/01/2013

As announced by the Governor in the Third Quarter Review of the Monetary Policy 2012-13, it has been decided to reduce the Repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 8.00 per cent to 7.75 per cent with immediate effect.

Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF and the Marginal Standing Facility (MSF) rate will stand automatically adjusted to 6.75 per cent and 8.75 per cent respectively with immediate effect.

MAINTENANCE OF CASH RESERVE RATIO (CRR)

 Notification No.: RBI/2012-13/401

 Date: 29th January, 2013

As set out in the Reserve Bank's Press Release 2012-2013/1267 dated January 29, 2013, it has been decided to reduce the Cash Reserve Ratio (CRR) of Scheduled Commercial Banks by 25 basis points from 4.25 per cent to 4.00 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning February 09, 2013. 

The Local Area Banks shall also maintain CRR at 3.00 per cent of its net demand and time liabilities up to February 08, 2013 and 4.00 per cent of its net demand and time liabilities from the fortnight beginning from February 09, 2013.

CHANGE IN BANK RATE

Notification No.: RBI/2012-2013/402

Date: 29/01/2013

As announced in the Third Quarter Review of Monetary Policy 2012-13, the Bank Rate stands adjusted by 25 basis points from 9.00 per cent to 8.75 per cent with effect from January 29, 2013.

All penal interest rates on shortfall in reserve requirements, which are specifically linked to the Bank Rate, also stand revised as indicated in Annex.

Annex

Penal Interest Rates which are linked to the Bank Rate 

  

Item	Existing Rate	Revised Rate (Effective from January 29, 2013)
Penal interest rates on shortfalls in reserve requirements (depending on duration of shortfalls)	Bank Rate plus 3.0 percentage points (12.00 per cent) or Bank Rate plus 5.0 percentage points (14.00 per cent)	Bank Rate plus 3.0 percentage points (11.75 per cent) or Bank Rate plus 5.0 percentage points (13.75 per cent)

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in

DISCLOSURE REQUIREMENTS ON ADVANCES RESTRUCTURED BY BANKS AND FINANCIAL INSTITUTIONS

Notification No. RBI/2012-13/409

Date: 31-01-2013

In reference to paragraph 16 of Master Circular on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 2, 2012 in terms of which banks should disclose in their published Annual Balance Sheets, under “Notes on Accounts” information relating to number and amount of advances restructured, and the amount of diminution in the fair value of the restructured advances under the following categories:

i.              Standard Advances Restructured;

ii.            Sub-Standard Advances Restructured; and

iii.            Doubtful Advances Restructured.

Under each of the category above, advances restructured under CDR Mechanism, SME Debt Restructuring Mechanism and other categories of restructuring are required to be shown separately.

The Working Group (WG) constituted by RBI to Review the existing Prudential Guidelines on Restructuring of Advances had recommended that once the higher provisions and risk weights (if applicable) on restructured advances (classified as standard either abinitio or on up gradation from NPA category) revert back to the normal level on account of satisfactory performance during the prescribed period, such advances should no longer be required to be disclosed by banks as restructured accounts in the “Notes on Accounts” in their Annual Balance Sheets.

However, the provision for diminution in the fair value of restructured accounts on such restructured accounts should continue to be maintained by banks as per the existing instructions. The WG also recommended that banks may be required to disclose:

i.   Details of accounts restructured on a cumulative basis excluding the standard restructured accounts which cease to attract higher provision and risk weight (if applicable);

ii.   Provisions made on restructured accounts under various  categories; and

iii.      Details of movement of restructured accounts.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in

FILING OF COST AUDIT REPORT AND COMPLIANCE REPORT IN XBRL MODE

General Circular No. 2/2013

Dated: 31-01-2013

All cost auditors and the companies concerned are allowed to file their Cost Audit Reports and Compliance Reports for the year 2011-12 [including the overdue reports relating to any previous year(s)] with the Central Government in the XBRL mode, without any penalty, within 180 days from the close of the company's financial year to which the report relates or by February 28, 2013, whichever is later. 

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in

DATE FOR SUBMISSION OF FORM T2 EXTENDED

Notification No.:F.7 (433)/Policy-II/VAT/2012/1170-81

Date: 31-01-2013

Form T-2 shall come into force as per the following schedule:-

Class of Dealers	Effective date from which submission of information in Form T-2
Dealers having GTO  ≥ Rs.10 Crores and total liability of tax (VAT plus TDS deduction plus CST) ≥  Rs.50 Lakhs in the year 2011-12.	01.03.2013
Dealers whose GTO and tax liability (VAT plus  TDS  deduction  plus  CST)  equals  to Rs.10 Crores and Rs.50 Lakhs respectively, during the current year.	01.03.2013  or  any  future  date  on which  the  dealer  attains  the  lower limit of GTO  Rs.10 Crores and tax (VAT plus TDS deduction plus CST) Rs.50 Lakhs, whichever is earlier
All other dealers	01.04.2013

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in

FILING OF ONLINE RETURN FOR December, 2012 AND 3rd QUARTER OF 2012-13

CIRCULAR No.28 OF 2012-13

Dated: 24-01-2013

The last date of online filing of DVAT/CST return for monthly dealers for the month of December, 2012 is extended upto 01.02.2013.

The last date of filing of hard copy of the return for the above return period is also extended upto 05-02-2013.

The last date of filing of DVAT/CST return for the 3^rd qtr of quarterly dealers 

for 2012-13 is extended as per prescribed schedule given below:-

Class/category of quarterly dealers (as per net tax paid during year 2011-12 )	Last date of filing of online return	Last date of filing hard copy of return
Paid net tax more than Rs. 1,00,000/-	5.2.2013	8.2.2013
Paid net tax between Rs. 50,000/-  Rs. 1,00,000/-	10.2.2013	13.2.2013
Paid net tax less than Rs. 50,000/-	15.2.2013	19.2.2013

However, the tax due for the above mentioned period shall be deposited as per the provisions of Section 3(4) of the DVAT Act, 2004. Penalty and interest on late deposit of tax due shall be imposed as applicable.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, Delhi-110001

Mobile:- +91-9873082769

Website:- www.caaga.co.in