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    Introduction 

    In India, Excise Duty/Service Tax on export of goods/services is exempted; A simple question arises in mind that 

    “If export of services are exempted then what is the use of Cenvat credit lying in the books of Accounts?” 

    Rule 5 of Cenvat credit rules, 2004 (CCR Rules, 2004)provides an opportunity to the service provider/manufacturer to utilize the accumulated CENVAT credit relating to export of goods or services for the payment of service tax on domestic output services and excise duty on final products cleared within India and in case any credit is left after making the stated adjustments the service provider/manufacturer can opt for refund of CENVAT credit. 

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    Nov 2016 Interns Digest

    Key Topics Covered:

    • Income Tax
    • FEMA

    Updates

    • Income Tax
    • Companies Act, 2013
    • Indirect Tax

    This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

    Nov – 2016 (Volume-28)

    Key Topics Covered:

    • International Taxation
    • FEMA
    • Audit
    • Income Tax
    • Indirect Tax

    Updates

    • Income Tax
    • Companies Act, 2013
    • Indirect Tax

    This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

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    From the title of the article, it is clear that entire discussion is relating to understanding of ‘Governmental Authority’ prior and post to the judgment of Honourable High Court of Patna in the case of Shapoorji Paloonji and Company Pvt Limited. Before going into the discussion, let us try to understand the significance of the phrase ‘governmental authority’.

     

    We all know that negative list has been introduced from 01.07.2012 and post its introduction, majority of the exemptions are clubbed under single notification 25/2012-ST dated which is colloquially referred as ‘Mega Exemption Notification’. The subject notification grants exemption from service tax on various activities and has quite a long list. One such entry is Entry 12 which deals with exemption provided in respect of construction activities if the service receiver is ‘government, governmental authority or local authority’.

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    Legal Background:-

     

    Section 50C of the Income Tax Act, 1961 was inserted by Finance Act (“FA”) 2002 w.e.f 01-04-2003. It provides that where the consideration received or accrued as a result of transfer of capital asset by the assesee being land or building or both is less that value adopted or assessed or assessable1 by stamp valuation authority for the purpose of payment of stamp duty then the value adopted or assessed or assessable shall deemed to be full value consideration for the purpose of computing the capital gain.

     

    The very purpose of introducing the section is to counter suppression of sale consideration on sale of immovable properties, being land or building or both. The section provides for rebuttable presumption that the value adopted for the purpose of computing stamp duty by the competent authorities fairly indicates the market value of the property sold.

     

    The Provisions of section 50C are applicable in case of transfer of Capital Asset. Similar provisions are contained in section 43CA which was introduced by FA 2013 w.e.f 01-04-2014. The said section deals with the immovable property, being land or building or both, held as a stock in trade.

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