I refer to the minutes of Case No 3 of the Policy Interpretation Committee (PIC) meeting dated 29th April 2011, which says that mere registration with the Registrar of Companies (RoC) does not give service providers the status of an Indian company for Served From India (SFIS) benefit. The Committee felt that the firms need to prove how they are Indian companies by way of their shareholding pattern, which would enable the committee to determine whether they are a truly Indian company or not. It was decided that details from RoC need to be collected in regard to shareholding/ownership status of all these companies before a view can be taken by the PIC. Is this view tenable?
According to PIC, the term 'All Indian Service Providers' mentioned in Para 3.12.2 of Foreign Trade Policy (FTP) means only entities that are owned or controlled by Indians. My opinion is that the term covers all service providers who are permitted to do business and established in India, irrespective of their ownership pattern. 'Indian Service Provider' does not mean 'Indian Owned Service Provider'. PIC, without basis, reads the word 'Owned' or 'Controlled' in Para 3.12.2 of the FTP. I also find the interpretation of PIC discriminatory. The Courts may not uphold such discrimination.
I also think that the PIC decision violates the 'National Treatment' principle in the General Agreement on Trade in Services that India has entered into with the World Trade Organisation. Under that principle, once a foreign entity is allowed to do business in India, then the domestic law must treat the services it renders in the same manner as that provided by a domestic entity, unless a differential treatment has been notified upfront.
Our excise department says that for a claim of excise rebate against exports, we need to submit shipping bills showing the mate receipt number. Is this so?
The mate receipt is a document signed by an officer of a vessel evidencing receipt of a shipment on board the vessel. The goods go on board the vessel after the customs pass the shipping bill -- i.e., give the 'let export' order. So, the shipping bill will not carry the mate receipt number. However, you may be required to submit a copy of the mate receipt for rebate claims made against exports from inland container depots to establish the fact that the goods have left the country.
One module in an equipment that we have supplied is malfunctioning and our buyer wants to send it for repairs to us. We are not clear as to how we can handle it, as Rule 16 of Central Excise Rules, 2002 refers only to return of duty paid equipment but not the modules that make up the equipment. Can you please clarify?
Repair of the module is not a manufacturing activity and so, there is no excise duty implication. So, your buyer may send the module under a challan and send back the repaired module under the challan.
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