Ministerspeak no basis for waiver

CHATROOM

Rule 3 (7) (b) of Cenvat Credit Rules, 2004 says that Cenvat credit of education cess can be utilised only for payment of education cess. So, there is a restriction on how you can use credit of education cess.

There is no similar restriction on utilisation of Cenvat credit of excise duty. Rule 3(4) of the Cenvat Credit Rules, 2004 says that Cenvat credit can be utilised for payment of any duty of excise. The expression any duty of excise covers education cess as well as higher and secondary education cess. So, in my opinion, you can utilise the Cenvat credit for payment of education cess and higher & secondary education cess.

The Commerce Minister has announced that service tax on services related to exports will be exempted. Can we take it that the commission that we pay to foreign agents who procure orders for us will not be axed?

The commerce minister has announced a policy decision but we will have to wait till suitable notifications are issued under the service tax law to give effect to the announcement. You cannot take any exemption as granted only on the basis of the announcement of the commerce minister. As of now, the services rendered by the agents abroad are taxable under the head business auxiliary services and the service recipient in India has to discharge the tax liability.

Our application for duty credits under Focus Market scheme has been rejected on the grounds that the exports have been made from a Inland Container Depot (ICD) that does not have Electronic Data Interchange (EDI) facility. Can you please guide us on how we can get the benefit?

As per Para 3.9.2 of the Foreign Trade Policy, only exports made through EDI-enabled ports to countries notified in Appendix 37C of the Handbook of Procedures, Vol. 1 will be eligible for duty credits under the Focus Market scheme. You can route your further exports through EDI-enabled ports and for your past exports, approach the grievance committee for grant of suitable relief.

Under the new Customs Valuation Rules, will the customs be empowered to reject the transaction value on the grounds that the importer is an exclusive agent of the foreign supplier getting special discounts?

Rule 4(2) of draft Customs Valuation Rules for Imports, 2007 put up on the website by the Central Board of Excise and Customs lists certain exceptions, that is, conditions to be met for acceptance of transaction value.

The draft rules have omitted the conditions regarding special discounts for exclusive agents. However, I apprehend that under Rule 10A of the draft rules, the customs officers will try to reject the transaction value if they find contemporaneous imports at higher prices.

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