Place of Provision of Service (POPS) Rules have been discussed at length in this January 2014 issue of Tax Amicus. The article, considering some examples, concludes that determining the place of consumption is a complex task on account of intangible nature of services and the different modes by which a service can be provided and consumed. Under Central Excise, this issue covers the stipulation whereby importers issuing Cenvatable invoice have to get registered and inclusion of provisions for reversal of Cenvat credit on input services if duty has been remitted on final product. CESTAT Larger Bench has held that liquidated damages, on account of delay in delivery, are deductible from the assessable value and the same is highlighted. CBEC’s clarifications that Education Cess and Secondary & Higher Education Cess are not to be calculated on cesses levied under Acts not administered by Department of Revenue, Ministry of Finance and that exemption from SAD under Notification No. 45/2005-Cus., would not be available to stock-transfer from SEZ to DTA, are summarized in this issue. SAD refund was however granted by the Appellate Tribunal in case when declaration of non-availability of Cenvat credit was worded differently.
Under Service Tax portion this Amicus covers CESTAT decision allowing Cenvat credit on services of renting of canteen area, gym instructor and AMC of ACs. It has also been held that registration of premises is not mandatory for taking Cenvat credit on input services. In VAT section, reports on amendment to Punjab and Haryana VAT Acts and Kerala High Court’s order holding construction of floating restaurant as works contract, are included. Income Tax portion brings the order of ITAT, Mumbai holding that derivative income to FII is ‘capital gains’ and not ‘business income’.
