india budget 2010

8/9/2019 India Budget 2010

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Finance Bill 2010Finance Bill 2010

Proposals and analysisProposals and analysis


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Highlights

Income

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Excise

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Tax

y The Honble finance Minister announced two major steps towards tax reforms:

- A mention tat the process for building a simple tax system with minimum exemptions

and low rates is now nearing completion. Also, he stated that the Direct Tax Code will

be implemented from April 1, 2011.

- Regarding Goods and Services Tax, it was mentioned that ministry is finalizing the

structure and implementation modalities of GST with different stakeholders and withall hopes, it should be effective in April, 2011.

y The other tax reforms mentioned by the Honble Finance minister are as follows:

- Two more Centralised Processing Centre to be set up during the year

- "Sevottam to extend to four more cities

- Automation of Central Excise & Service Tax (ACES), has already been rolled outthroughout the country. Commercial taxes to follow suit.

- Income tax department to notify SARAL-II form for individual salaried taxpayers


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Income Tax ProposalsIncome Tax Proposals


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Income Exemptions Computation

y Scope of the term income expanded:

Section 9 read with Section 56 has been expanded for a firm and company not being a

company in which public are substantially interested. For the two assessee income would

include fair market value of shares received without consideration. In case there is any

consideration paid for such shares by these assessees, the same shall be deducted for the

purpose of determining the above income.

However, only shares of a company not being a company in which public is substantially

interested are only considered for the above inclusions

Exclusions:

The above addition shall exclude from its ambit receipt of shares by way of any of the

following transactions:

o In a scheme of amalgamation of a foreign company provided under section 47(via)

o In a scheme of demerger of a foreign company provided under section 47(vic)

o In a scheme of business reorganization of a cooperative bank as provided under

section 47(vicb)

o In a scheme of demerger as provided under section 47(vid)

o In a scheme of amalgamation as provided under section 47(vii)

Rate of Tax/

TDS

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Excise

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Highlights

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Tax


y The requirement of establishing the territorial nexus for taxing the income of a non resident

has been proposed to be removed retrospectively from 1976.

y Section 56 has been amended to include stamp duty value of only those properties which

have been received by the assessee without consideration. The section has been

amended to remove properties sold for a consideration (but sold at value less than stamp

duty value) from the ambit of Section 56. This amendment is proposed to be retrospective

with effect from October 1, 2009.

y Section 56(2) has been amended to cover only transfer of capital assets and not stock-in-

trade.

y Income on transfer of property propsed to be amended as under:.

Rate of Tax/

TDS

Interest /

Penalties

PeriodPeriod Provisions under Section 56Provisions under Section 56

Earlier provision (since October 1, 2009)Earlier provision (since October 1, 2009) Gift of Cash, immovable property (withoutGift of Cash, immovable property (without

consideration or at a consideration lessconsideration or at a consideration less

than the stamp duty value) and specifiedthan the stamp duty value) and specified

properties*.properties*.Proposed provisionProposed provision Gift of Cash, immovable property (withoutGift of Cash, immovable property (without

consideration) and specified propertiesconsideration) and specified properties

including bullion. Also definition restrictedincluding bullion. Also definition restricted

to capital assets.to capital assets.

*property means immovable property being land or building or both; shares and

securities; jewellery; archaeological collections; drawings; paintings; sculptures; or any

work of art


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y Investment in Research and Development (R&D) to enhance the competitive ability of the

economy

- The exemption as applicable to a scientific research association has now been made

available to research association engaged in social science or statistical research as

well.

- In order to promote the corporate sector to invest in in-house research, it is proposed

to increase this weighted deduction from 150 per cent to 200 per cent incurred on

scientific research on an approved in-house research and development facility.

- In order to encourage more contributions to such approved entities for the purposes

of science, social science or statistical research, it is proposed to increase this

weighted deduction from 125 per cent to 175 per cent.

y Provision of proportionate exemption to units in Special Economic Zone has been made

retrospective from AY 2006-07. This shall restrict the credit available to such units.

y Change in the exemption provisions for Trusts

- Power of Commissioner to cancel the exemption of a trust are proposed to beenhanced to include all registrations granted under Section 12A with effect from June

1, 2010. This amendment propose to rectify the technicals and remove the limitation

on the power of Commissioner since the registration under 12A and 12AA are not for

specific period and are enjoyed by the trusts until the registration is cancelled.

- It is proposed that the test of commercial activity should not be allowed on small

Trusts having receipts of 10 Lakhs or less from the performance of any activity in the

nature of advancement of any other object of general public utility.

Rate of Tax/

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y Provision of proportionate exemption to units in Special Economic Zone has been made

retrospective from AY 2006-07

y Hotel Industry

It is proposed to provide investment linked incentive to the hotel sector, irrespective of

location, under section 35AD of the Income-tax Act. The investment-linked tax incentive

allows 100 per cent deduction in respect of the whole of any expenditure of capital nature

(other than on land, goodwill and financial instrument) incurred wholly and exclusively, for

the purposes of the specified business during the previous year in which such expenditure

is incurred. Currently, such specified business means the business of setting up and

operating cold chain facilities, warehousing facilities for storage of agricultural produce and

laying and operating a cross-country natural gas or crude or petroleum oil pipeline network.

It is now proposed to include the business of building and operating a new hotel of two-star

or above category, anywhere in India, which starts functioning after 1.4.2010 within the

purview of specified business.

y Housing Sector

- Time limit for completion for an approved housing project is proposed to be increased

from 4 years to 5 years

- With effect from April 1, 2009, The norms of built up area of shops and other

commercial establishments in housing projects has been amended from 5% of the

total built up area or 2,000 sq ft whichever is lower to 3% of the total built up area or

5,000 sq ft whichever is higher

Rate of Tax/

TDS

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y Relief to LLP

Section 47 has been expanded to provide relief on conversion of private company or an

unlisted public company into a LLP, provided the following conditions are satisfied:

(a) all the assets and liabilities of the company immediately before the conversion

become the assets and liabilities of the LLP;

(b) all the shareholders of the company immediately before the conversion become the

partners of the LLP and their capital contribution and profit sharing ratio in the LLP are

in the same proportion as their shareholding in the company on the date of

conversion;

(c) the shareholders of the company do not receive any consideration or benefit, directly

or indirectly, in any form or manner, other than by way of share in profit and capital

contribution in the LLP;

(d) the aggregate of the profit sharing ratio of the shareholders of the company in the

LLP shall not be less than fifty per cent. at any time during the period of five years

from the date of conversion;

(e) the total sales, turnover or gross receipts in business of the company in any of

the three previous years preceding the previous year in which the conversion

takes place does not exceed sixty lakh rupees; and

(f) no amount is paid, either directly or indirectly, to any partner out of balance of

accumulated profit standing in the accounts of the company on the date of conversion

for a period of three years from the date of conversion.

Where any of the conditions are not satisfied, the capital gains arising on the transaction

shall be deemed to be the profits and gains chargeable to tax of the successor LLP

Rate of Tax/

TDS

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y However, the provisions of section 115 JAA granting credit for MAT paid shall not

apply upon conversion into LLP

Rate of Tax/

TDS

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Income ExemptionsRate of Tax/

TDSComputation

y Proposed rate of tax in case of an indiviual assesse is as under:

Upto Rs. 1,60,000 Nil.

Rs. 1,60,001 to Rs. 5,00,000 10 per cent.

Rs. 5,00,001 to Rs. 8,00,000 20 per cent.

Above Rs. 8,00,000 30 per cent.

No Surcharge. Education cess @ 3%

y The basic exemption limit for a woman assessee remains at 190,000 and that for an

assessee above the age of sixty five remains at 240,000

y Surcharge reduced from 10% to 7.5% on a total income of Rs 1 Crore or more (effective

rate 33.22%). The reduced surcharge to apply on Dividend Distribution tax as well

(effective DDT 16.61%).

y It has been proposed that the rate of Minimum Alternate Tax (MAT) be increased from

15% to 18% (effective 19.9305%). This is the second consecutive time when the rate of

MAT has been increased

Highlights

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Tax

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Tax

Interest /

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TDSComputation

y With effect from July 1, 2010, it is proposed to increase the threshold limit for withholding

taxes as under:

Highlights

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Sl.No.

Section Nature ofPayment

Existing threshold limit ofpayment (Rupees)

Proposed threshold limit ofpayment (Rupees)

1. 194B Winnings fromlottery orcrossword puzzle

5,000 10,000

2. 194BB Winnings fromhorse race

2,500 5,000

3. 194C Payment tocontractors

20,000(for a single transaction)

30,000(for a singletransaction)

50,000(for aggregate of

transactions duringfinancial year)

75,000(for aggregate of transactions

during financial year)

4. 194D Insurancecommission

5,000 20,000

5. 194H Commission orBrokerage

2,500 5,000

6. 194-I Rent 1,20,000 1,80,000

7. 194J Fees forprofessional ortechnical services

20,000 30,000

Interest /

Penalties


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TDSComputation

Highlights

Income

Tax

Excise

Customs

Service

Tax

y Threshold limit of turnover for tax audit in case of business increased from Rs 40 Lakhs to

Rs 60 Lakhs and for professionals from 10 Lakhs to 15 Lakhs

y It is proposed that the deductor/collector will continue to furnish TDS/TCS certificates to the

deductee/ collectee even after 1st April, 2010

y It is proposed that the High Court may admit an appeal after the expiry of the allowed period

of one hundred and twenty days, if it is satisfied that there was sufficient cause for not filingthe appeal within such period

y It is proposed that no disallowance will be made if after deduction of tax during the previous

year, the same has been paid on or before the due date of filing of return of income

specified in sub-section (1) of section 139

y Deduction not exceeding 20,000 has been provided on purchase of long term infrastructure

bonds to an individual / HUF

y Provisions for settlement commission changed to include search cases. The limit of

additional income tax payable is proposed to be enhanced to INR 10 Lakhs in the cases to

be admitted before the Settlement commission. This limit is proposed at INR 50 Lakhs in

search cases. Time limit for disposal of cases is also proposed to be enhanced from 12

months to 18 months.

Interest /

Penalties


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TDSComputation

Interest /

Penalties

Highlights

Income

Tax

Excise

Customs

Service

Tax

y Increase in rate of interest in case of non deduction / non deposit of TDS

TDS non compliance Rate of interest

Non deduction of TDS from the date on which

such tax was deductible to the date on which

such tax is actually deducted

1% for every month or part of the month

Non payment of TDS from the date on which

such tax was deducted to the date on which

such tax is actually paid

1.5% for every month or part of the

month

yPenalty for non filing of audit report has been enhanced to Rs 150,000

yIt is proposed to increase the rate of interest for non-payment of tax after deduction from the

present one per cent to one and one-half per cent for every month or part of month

yIt is proposed that no disallowance will be made if after deduction of tax during the previous

year, the same has been paid on or before the due date of filing of return of income specified

in sub-section (1) of section 139


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Excise ProposalsExcise Proposals


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Change in PolicyChange in

Rates

Highlights

Income

Tax

Excise

Customs

Service

Tax

y Peak excise duty rate for most non petroleum products from 8% to 10%.

y Small units having home consumption clearances not exceeding INR 4 lakhs will be eligible

to avail full cenvat credit on receipt of capital goods and will have the facility to pay excise

duty on quarterly basis.

y Cenvat credit allowed in respect of jigs, fixtures, moulds and dies sent by one manufacturer

to another manufacturer for production of goods

y Ambit of exemption in relation to transfer of right to use canned or packaged software is

extended to all transfer of right to use including transaction where transfer of right to use is

not for commercial exploitation.

y

In case of pending disputes of Cenvat credit attributable to exempt goods cleared betweenSeptember 1, 1996 and March 31, 2008, manufactuer is allowed to reverse the same basis

a certificate from a Chartered Accountant

y Penalty not be imposed in case demand is paid with interest before the issuance of demand

notice


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Rates

Highlights

Income

Tax

Excise

Customs

Service

Tax

y Relaxation in requisites and conditions for relief from Settlement commission:

- applications in misdecalaration, suppression etc allowed

- Option to increase time limit of settlement for further 3 months

- relaxation of only one time settlement condition

y Accelerated depreciation rates prescribed for computers and its peripherals, cleared after

use, while computing the amount to be paid on removal of such goods.

- for each quarter in the first year @ 10%

- for each quarter in the second year @ 8%

- for each quarter in the second year @ 8%

- for each quarter in the fourth and fifth year @1%

y Provision of confiscation of input and capital goods in case of wrong availment or utilisationof Cenvat credit on such goods


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Customs ProposalsCustoms Proposals


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Rates

Highlights

Income

Tax

Excise

Customs

Service

Tax

y Retrospective removal of relief of customs duty provided from SEZ to DTA

y Relaxations granted in relation to Settlement Commission procedures as follows:

o Applications in case of misdeclaration, suppression, etc allowed.

o Restriction for assessees to seek only one time settlement relaxed.

o Settlement Commission empowered to extend the time limit of 9 months for disposal

of applications by another 3 months


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Rates

Highlights

Income

Tax

Excise

Customs

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Tax

y Change in BCD

ItemPresent Rate of Basic Duty

(%)New rate (%)

Crude Petroleum Nil 5

Petrol and Diesel 2.5 7.5

Serially numbered Gold bars / coins Rs 200 / 10gms Rs 300 / 10gms

Gold in any other form Rs 500 / 10 gms Rs 750 / 10 gms

Silver in any form Rs 1000 / Kg Rs 1500 / Kg

Specified Agricultural machinery 7.5 5

Bio polymers / Bio plastics 10 Nil


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Service Tax ProposalsService Tax Proposals


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Highlights

Income

Tax

Excise

Customs

Service

Tax

New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Points to Ponder

In the Sunrise Associates Case (2006) 5 SCC 603, lottery tickets have to be held to be

actionable claims and accordingly does not fall in the ambit of the term goods

State governments who are also organizing such games would be liable to pay service tax

Lotteries come within the purview of Group 924 class 924(9) and subclass 924(9)(0) of

NIC 2004 which is in the following terms :

Other recreational activities includes fairs and shows of a recreational nature;

management and operation of lotteries (bulk and retail sale of lottery tickets are includedunder wholesale and retail sale respectively); gambling and betting activities; activities of

casinos; booking agency activities in connection with theatrical productions or other

entertainment attractions, recreational fishing and other recreational activities;

Courts still to decide as to whether organizing games of chance are service for the purpose

of List I of the constitution.

Valuation of the taxable service

Taxable Service : Games of chance including lottery

Service of Promoting, marketing or organising of games of chance,

including lottery is taxable under this category. Consequently, the

corresponding addition to Business Auxiliary services has been

deleted.


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Health Services

Health Service is taxable when provided or to be provided by hosiptal,nursing homes or multi speciality clinics namely:

(i) Healths check up undertaken by hospitals or medical establishments

for the employees of business entity.

(ii) Health services provided under health insurance schemes offered by

the insurance company

Highlights

Income

Tax

Excise

Customs

Service

Tax

Points to Ponder

Individual doctors not having establishments are not covered

The tax on the above mentioned health services would be payable only if and to the extent

the payment for such medical check up or treatment etc. is made directly by the business

entity or the insurance company to the hospital or medical establishment

Pre-flight check ups covered under the present category

ESI whether taxable?


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Maintaining of Medical Records

Service provided for storing, keeping or maintaining of medical records ofemployees of a business entity is taxable under this category

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

Why are these not covered under Business Auxiliary or Business Support services

Other record keeping not pertaining to main business of a person still out of service tax

ambit?


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Promotion of a brand of goods, services, events,

business entity etc.Service is taxable when provided under a contract for promotion or

marketing of a brand of goods, service, event or endorsement of name,

including a trade name, logo or house mark of a business entity by

appearing in advertisement and promotional event or carrying out any

promotional activity for such goods, service or event

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

Promotion of a brand name/ house mark etc by a celebrity without reference to any specific

product or service of that company, is taxable under this category. Eg Tiger woods for

Accenture

However, Promotion or marketing of a particular product or service provided by or belonging

to a client is still taxable under Business Auxiliary services (BAS).


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Commercial use or exploitation of any event

Taxable service is granting of the right or by permitting commercial use orexploitation of any event including an event relating to art, entertainment,

business, sports or marriage organised

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

Commercial exploitation of an event by a person other than the person organizing the event

is subjected to service tax.

When a person organizes / sponsors a cricket match and he allows the broadcasting or

recording of such match for their commercial exploitation in future, the sum received from

the broadcasters or recording companies, is taxable under this category.

Would include broadcast on internet as well


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Services provided by electricity Exchanges

Service provided by an electricity exchange in relation to trading,

processing, clearing or settlement of spot contracts, term ahead contracts,

seasonal contracts, derivatives or any other electricity related contract is

taxable under this category

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

Electricity exchanges authorized by Central Electricity Regulatory Commission are set up

for transmission in electricity


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Copyrights on (a) cinematographic films and (b)

sound recording

Taxable service is the transferring temporarily or permitting the use or

enjoyment of any copyright defined in the Copyright Act, 1957, except the

rights covered under subclause (a) of clause (1) of section 13 of the

Copyright Act

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

As per Section 13 of Copyright Act, copyright subsists in original literary, dramatic, musical

and artistic works, Recording of cinematographic films and sound recording. Under new

category of service, only the recording of cinematographic film and sound recording has

been brought under the tax net.

Is the temporary transfer or permitting the use a one time act or a continuous one? In other

words, what would be the fate of copyright agreements entered prior to enactment andcontinuing thereafter


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New ServicesScope

Extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

Taxable Service : Special services provided by a builder such as

providing preferential location or external or internal development ofcomplexes on extra charges

Taxable service is service provided to a buyer, by a builder of a residential

complex, or a commercial complex, or any other person authorised by

such builder, for providing preferential location or development of such

complex but does not include services covered under sub-clauses (zzg),

(zzq), (zzzh) and in relation to parking place

Highlights

Income

Tax

Excise

Customs

ServiceTax

Points to Ponder

Service provided by the builder over and above the construction of building such as PLC or

internal/ external development and charging separately for them are taxable under this new

category of service.

Charges for providing parking space specifically excluded from the scope of this service.

Services provided by the resident welfare associations or cooperative group housingsocieties consisting of residents as its member is also not taxable


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New ServiceScope

extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

A. Taxable Service : Air Passenger Transport Services

Scope Extended:

To include domestic and international journeys in any class

B. Taxable Service: Information Technology software service

Scope Extended:

Earlier IT software service was taxable only when them same were provided for

commercial or business purposes, but now the scope has been extended to IT software

services provided for any purpose ie., whether or not used in the course or furtherance of

business or commerce.

C. Taxable Service: Sponsorship Service

Scope Extended:

Scope expanded and sponsorship pertaining to sports is now subjected to service tax

Highlights

Income

Tax

Excise

Customs

ServiceTax


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New ServiceScope

extended

New

Exemption

Change in

Existing

Exemption

Export of

Service

CENVAT

Credit

Rules, 2004

D. Taxable Service : Commercial training or Coaching service

Scope Extended:

Explanation added to the section clarifying that the word commercial means any training

or coaching provided for a consideration irrespective of the presence or absence of any

profit motive.

Amendment given retrospective effect from 01.07.2003.

Points to ponder

In the decision of the Constitution Bench in Keshavlal Jethalal Shah v. Mohanlal

Bhagwandas and Anr. [(1968) 3 SCR 623], it was opined that an Explanatory Act is

generally made to supply an obvious omission or to clear up doubts as to the meaning of

previous Act. Whether the term commercial to include non commercial entities is

clarificatory?

.

Highlights

Income

Tax

Excise

Customs

ServiceTax


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New ServiceScope

extended

New

Exemption

Export of

Service

E. Taxable Service : Construction of complex service and Commercial or industrial

construction services

Scope Extended:

Explanation added to the section to provide that unless the entire payment for the

property is paid by the prospective buyer after the completion of construction (including

the certification by the local authorities), the activity of construction would be deemed to

be a taxable service provided by the builder.

Points to ponder

This is the first deeming provision under the service tax as the explanation lay down that

it would be deemed to be a service.

Artificial bifurcation of the value of Immovable property so as to tax the service portion in

case the buyer decides to pay the cost of building in installments.

Highlights

Income

Tax

Excise

Customs

ServiceTax

Change in

Existing

Exemptions

CENVAT

Credit

Rules, 2004


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New ServiceScope

extended

New

Exemption

Export of

Services

F. Taxable Service : Renting of Immovable Property

Scope Extended:

The activity of renting of immovable property or any other service in relation to such

renting, for use in the course of or, for furtherance of, business or commerce is per se

taxable service.

This amendment has been given retrospective effect from 01.06.2007.

Further explanation has been added to provided that tax would be charged on rent of avacant land if there is an agreement between the lessor and lessee that a construction on

such land is to be undertaken for furtherance of business or commerce during the tenure

of the lease.

Points to ponder

The amendment has been brought to nullify the effect of the judgment passed by the

Honble High Court of Delhi in the case ofHome Solutions Retail India Ltd Vs UOI

wherein the Honble Court had struck down this levy.

Highlights

Income

Tax

Excise

Customs

ServiceTax

Change in

Existing

Exemptions

CENVAT

Credit

Rules, 2004


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New ServiceScope

extended

New

Exemption

Export of

Service

G. Taxable Service : Airport Service, port service, other port service

Scope Extended:

Amended to provide that all services provided entirely within the airport/ port premises

would be subjected to service tax.

An authorisation by airport/ port authority would not be a precondition for taxing such

services .

Whether all activities which are otherwise not even taxable would be taxable under thiscategory?

H. Taxable Service: Auctioneers service

Scope Extended:

Explanation added to clarify that the phrase auction by government means an auction

involving sale of government property and not when the government acts as an

auctioneer for sale of the private property

Highlights

Income

Tax

Excise

Customs

ServiceTax

Change in

Existing

Exemptions

CENVAT

Credit

Rules, 2004


34/44

New ServiceScope

extended

New

Exemption

Export of

Service

I. Taxable Service : Management of Investment under ULIP Service

Scope Extended:

Amended to provide that the value of the taxable service for any year of the operation of

policy shall be the actual amount charged by the insurer for management of funds under

ULIP or the maximum amount of fund management charges fixed by the Insurance

Regulatory and Development Authority (IRDA), whichever is higher

Highlights

Income

Tax

Excise

Customs

ServiceTax

Change in

Existing

Exemptions

CENVAT

Credit

Rules, 2004


35/44

New ServiceScope

Extended

New

Exemptions

Change in

Existing

Exemptions

Export of

Service

CENVAT

Credit

Rules, 2004

A. Notification No 4/2010-ST, dated 27.02.2010:

Transport of food grains and pulses by road by a good transport agency is exempted from

service tax levy.

B. Notification No 10/2010-ST, dated 27.02.2010

Exemption provided from service tax to Technical Testing and analysis service and

Technical Inspection and certification service provided by Central and state seed testing

laboratories and central and state seed certification agencies.

C. Notification No 11/2010-ST, dated 27.02.2010

Any person providing to any other person service for transmission of electricity is

exempted from the levy of service tax.

Highlights

Income

Tax

Excise

Customs

ServiceTax


36/44

New ServiceScope

Extended

New

Exemptions

Export of

Service

D. Notification No 12/2010-ST, dated 27.02.2010

Exemption from service tax is being provided to services relating to Erection,

Commissioning or Installation of: (a) Mechanized Food Grain Handling Systems etc (b)

Equipment for setting up or substantial expansion of cold storage (c)

Machinery/equipment for initial setting up or substantial expansion of units for processing

of agricultural, apiary, horticultural, dairy, poultry, aquatic, marine or meat products.

E. Notification No 13/2010-ST, dated 27.02.2010

Exemption provided to Indian News Agencies under online information and database

access or retrieval services and business auxiliary service subject to certain conditions:

i) If such news agency is notified as a news agency set up inIndia solely for collection and

distribution of new:

Provided that this exemption shall be available to only new agencies which are specified

under clause (22B) of section 10 of Income Tax Act 1961, and

ii) such news agency applies its income or accumulates it for collection and distribution of

news and does not distributes its income in any manner to its members.

Highlights

Income

Tax

Excise

Customs

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Change in

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F. Notification No 15/2010-ST, dated 27.02.2010:

Statutory taxes charged by any government (including foreign government) are being

excluded from taxable value for levy of service tax under the Air passenger transport

service .

G. Notification No 17/2010-ST, dated 27.02.2010

Pre-packaged I.T. software in retail packages for single use is exempted from service tax,

provided

(i)Document providing the right to use such software is packed alongwith the software.

(ii) The importer has paid the appropriate duty of customs on the entire amount received

from the buyer.

(iii) Benefits under Notification No 31/ 2010- Customs Dated 27.02.2010 is not availed ofby the importer.

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A.. Notification No 03/2010-ST, dated 27.02.2010:

The Government vide its notification no 24/2004-ST, dated 10.09.2004 has provided

exemption on commercial training or coaching service provided by vocational training

institutes. Now the Governemnt has vide this notification amended the definition of

Vocation Training Institutes:

Vocation training institutions means an industrial training institute or an industrial training

centre affiliated to National council for vocational training, offering courses in designated

trades as notified under the Apprentices Act, 1961.

B. Notification No 5/2010-ST, dated 27.02.2010

Notification No 01/2000ST, dated 09.02.2000 is rescinded, ie., exemption from service

tax, presently available to Group Personal Accident Insurance Scheme provided by Govt.

of Rajasthan to its employees, under General Insurance Service is withdrawn .

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C. Notification No 07/2010-ST, dated 27.02.2010

Notification No 33/2009, dated 01.09.2009 is rescinded ie., exemption to transport of

goods by rail is withdrawn.

D. Notification no 08/2010-ST, dated 27.02.2010

Notification No 28/2009, dated 31.08.2009 providing exemption to certain specified goods

transported by rail, which was subsequently withdrawn vide notification No 36/2009-ST,

dated 09.09.2009 has been restored vide this notification.

E. Notification No 09/2010-ST, dated 27.02.2010

An abatement of 70% of the gross value of freight charged on goods (other than

exempted goods) is being provided vide Notification No 09/2010-ST, dated 27.02.2010 by

adding the service of Transport of goods by rail in Notification No 01/2006-ST, dated

01.03.2006.

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F. Notification No 14/2010-ST, dated 27.02.2010

Notification No 1/2002-ST dated 01.03.2002 is being superseded by Notification No

14/2010-ST, dated 27.02.2010 to provide that the construction and operation of

installations, structures and vessels for the purposes of prospecting or extraction or

production of mineral oils and natural gas in the Exclusive Economic Zone and the

Continental Shelf of India and for supply of any goods connected with these activities

would be within the purview of the provisions of Chapter V of Finance Act, 1994. Suitable

changes are being made in the Export of Services Rules, 2005 and Taxation of Services(Provided from Outside India and Received in India) Rules, 2006.

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Notification No 6/2010-ST-, dated 27.02.2010-

a) Mandap Keeper Service shifted from Rule 3(ii) to Rule 3(i) of Export of Service Rules,

2005.

b) Chartered Accountant services, cost accountant services and company secretary

services shifted from Rule 3(ii) to Rule 3 (iii) of Export of Service Rules, 2005.

c) Condition provided under Rule 2 (a) ie., such service is provided from India and used

outside India is deleted.

Definition of India amended to include installations, structures and vessels in the entire

Continental Shelf of India and the Exclusive Economic Zone of India.

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Thank youThank you


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AnnexureAnnexure


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An Explanation to a statutory provision may fulfil the purpose of clearing up an ambiguity

in the main provision or an Explanation can add to and widen the scope of the mainsection (See: Sonia Bhatia v. State of U.P. [(1981) 2 SCC 585 at 598]. If it is in its nature

clarificatory then the Explanation must be read into the main provision with effect from the

time that the main provision came into force (See: Shyam Sunder v. Ram Kumar [(2001)

8 SCC 24 (para 44)]; Brij Mohan Laxman Das v. CIT[(1997) 1 SCC 352 at 354], CIT v.

Podar Cement [(1997) 5 SCC 482 at 506]. But if it changes the law it is not presumed to

be retrospective irrespective of the fact that the phrase used are it is declared or for the

removal of doubts.

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india budget 2010

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