GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
New Delhi, the 24th February 2009
Notification No. 4/2009 - Central Excise
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table, namely :-
1. Notification number and date: -
3/2006-Central Excise, dated the 1st March, 2006
Amendments: -
In the said notification, in the Table, in column (4), for the entry “10%”, wherever it occurs, the entry “8%” shall be substituted.
2. Notification number and date: -
4/2006-Central Excise, dated the 1st March, 2006
Amendments: -
In the said notification, in the Table, in column (4), -
(i) for the entry “10% or Rs.290 per tonne, whichever is higher”, wherever it occurs, the entry “8% or Rs.230 per tonne, whichever is higher” shall be substituted;
(ii) for the entry “10% of the value of such gold potassium cyanide excluding the value of gold used in the manufacture of such goods”, wherever it occurs, the entry “8% of the value of such gold potassium cyanide excluding the value of gold used in the manufacture of such goods” shall be substituted;
(iii) for the entry “10% of the value of material , if any, added and the amount charged for such manufacture”, wherever it occurs, the entry “8% of the value of material , if any, added and the amount charged for such manufacture” shall be substituted.
3. Notification number and date: -
5/2006-Central Excise, dated the 1st March, 2006
Amendments: -
In the said notification, in the Table, in column (4), for the entry “10%”, wherever it occurs, the entry “8%” shall be substituted.
4. Notification number and date: -
6/2006-Central Excise, dated the 1st March, 2006
Amendments: -
In the said notification, in the Table, in column (4), -
(i) for the entry “10%”, wherever it occurs, the entry “8%” shall be substituted;
(ii) for the entry “10% + Rs.10,000 per chassis”, wherever it occurs, the entry “8% + Rs.10,000 per chassis” shall be substituted.
5. Notification number and date: -
2/2008-Central Excise, dated the 1st March, 2008
Amendments: -
In the said notification, in the Table, in column (3), -
(i) for the entry “10%”, wherever it occurs except, for the entry occurring against S. No. 14, 16 and 18, the entry “8%” shall be substituted;
(ii) for the entry “10% + Rs.10,000 per chassis”, wherever it occurs, the entry “8% + Rs.10,000 per chassis” shall be substituted.
[F. No.354/210/2008-TRU (Part)]
[Unmesh Sharad Wagh]
Under Secretary to the Government of India
Note. -
(1) The principal notification No.3/2006-Central Excise, dated the 1st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.93 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7th December, 2008 published vide number G.S.R. 840(E), dated the 7th December 2008.
(2) The principal notification No.4/2006-Central Excise, dated the 1st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.94 (E), dated the 1st March, 2006, and was last amended by notification No. 64/2008-Central Excise, dated the 24th December, 2008 published vide number G.S.R. 887(E), dated the 24th December, 2008.
(3) The principal notification No.5/2006-Central Excise, dated the 1st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.95 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7th December, 2008 published vide number G.S.R. 840(E), dated the 7th December 2008.
(4) The principal notification No.6/2006-Central Excise, dated the 1st March, 2006 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.96 (E), dated the 1st March, 2006, and was last amended by notification No. 58/2008-Central Excise, dated the 7th December, 2008 published vide number G.S.R. 840(E), dated the 7th December 2008.
(5) The principal notification No.2/2008-Central Excise, dated the 1st March, 2008 was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (i) vide number G.S.R.130 (E), dated the 1st March, 2008, and was last amended by notification No. 58/2008-Central Excise, dated the 7th December, 2008 published vide number G.S.R. 840(E), dated the 7th December 2008.
Wednesday, February 25, 2009
Notification for reduction in Service Tax Rate to 10 pc
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, dated the 24th February, 2009
Notification No. 8 /2009 – Service Tax
G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all the taxable services specified in sub-section 105 of section 65 of the Finance Act from so much of service tax leviable there on under section 66 of the Finance Act, as is in excess of the rate of ten per cent of the value of taxable services.
(Unmesh Sharad Wagh)
Under Secretary to the Government of India
[F. No. 354/210/2008-TRU(part)]
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, dated the 24th February, 2009
Notification No. 8 /2009 – Service Tax
G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all the taxable services specified in sub-section 105 of section 65 of the Finance Act from so much of service tax leviable there on under section 66 of the Finance Act, as is in excess of the rate of ten per cent of the value of taxable services.
(Unmesh Sharad Wagh)
Under Secretary to the Government of India
[F. No. 354/210/2008-TRU(part)]
Monday, February 16, 2009
Highlights of the Interim Budget 2009
Highlights of the Interim Budget 2009
-All efforts made to deliver on commitments
-Sustained growth over 9% in last 4 years
-Per capita income grew 7.4% during UPA regime
-Gross domestic savings rate at 37.7%, gross cap formation at 14.2%
-Tax-GDP ratio at 12.5% in 2007-08, close to fiscal correction target
-Domestic investment rate over 39% in FY08
-Growth drivers - agriculture, services, manufacturing, construction-Outlook for food grain production encouraging for coming year
-Exports grew at annual average rate of 26.4% during last 4 years
-Challenges related to capital inflows and global inflation
-We have weathered the crisis, but no room for complacency
-Moderate pass through of prices affected domestic inflation in '08
-Dec industrial growth fell 2% (YoY)
-Forecasts indicate that world economy may fare worse in 2009
-India has been affected along with other slowing EM economies
-GDP growth of 7.1% makes India second fastest growing economy
-Fiscal pkgs announced provide tax relief to boost demand, spending
-Have taken steps to encourage private investments in infra via PPP
-Approved 37 infra projects worth Rs 70,000 cr between Aug 08-Jan 09
-54 central infra proj of Rs 67700cr sent for final nod to PPP panel
-Initiative for providing refinance to banks for long-term credit to proj
-IIFCL can to raise Rs 10000 cr, nod for additional Rs 30000 cr
-IIFCL to refinance 60% of the projects
-Extension of export credit for labour intensive exports
-FDI inflow of USD 23.3 billion during April-November 2008
-Have relaxed fiscal responsibility & budget mgmt targets
-May need to consider additional fiscal measures in next regular budget
-Need to revert to fiscal consolidation at the earliest
-Economic regulatory and oversight systems have to be more efficient
-Attention given to agriculture sector, plan allocation up 300% in 4 yrs
-Agri - govt implementing revival pkg in 25 states worth Rs 13500 cr
-Agri - govt will continue to provide interest subvention for FY10
-Farm debt waiver of Rs 65,300 cr covering 36 million homes
-Govt to provide interest subsidy to farmers in FY10
-Outlay on higher education up 900% in 11th 5-year plan
-Annual ad-hoc grants have been increased by 50% (YoY)
-Tax rates must fall during times of crisis
-FY09 revised estimates of spending at Rs 9 lakh cr vs Rs 7.5 lakh cr
-FY09 plan expenditure revised to Rs 2.8 lakh cr from Rs 2.4 lakh cr
-Govt revises FY09 fertiliser subsidy to Rs 44863 cr
-FY09 food subsidy revised to Rs 10960 cr
-FY09 fiscal deficit seen at 6% of GDP vs estimate of 2.5%
-FY09 revenue deficit at 4.4% of GDP vs est of 1%
-FY10 spending seen at Rs 9.53 lakh cr
-FY10 budgetary support seen at Rs 2.85 lakh cr
-Rural jobs scheme to get Rs 30100 cr in FY10
-JNNURM spending seen at Rs 11842 cr for FY10
-Allocation of Rs 40900 cr for Bharat Nirman Scheme
-Interest subvention for some export loans extended
-Budget plan spending may have to be upped substantially post polls
-Additional plan expenditure has to increase by 0.5-1% post polls
-FY10 non-plan spend est at Rs 6.68 lk cr
-Major subsidy spending for FY10 seen at Rs 95,500 cr
-FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
-FY10 gross tax revenue seen at Rs 6.71 lk cr
-Interim Budget 2009: Allocation of Rs 8,000 cr for mid-day meal scheme
-Interim Budget 2009: Rs 13,100 cr allocated for elementary education
-Interest subvention for some export loans extended
-Budget plan spending may have to be upped substantially post polls
-Additional plan expenditure has to increase by 0.5-1% post polls
-FY10 non-plan spend est at Rs 6.68 lakh cr
-Major subsidy spending for FY10 seen at Rs 95,500 cr
-FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
-FY10 gross tax revenue seen at Rs 6.71 lakh cr
-FY10 gross market borrowing seen at Rs 3.2-3.3 lakh cr
-No tax changes in interim budget
-All efforts made to deliver on commitments
-Sustained growth over 9% in last 4 years
-Per capita income grew 7.4% during UPA regime
-Gross domestic savings rate at 37.7%, gross cap formation at 14.2%
-Tax-GDP ratio at 12.5% in 2007-08, close to fiscal correction target
-Domestic investment rate over 39% in FY08
-Growth drivers - agriculture, services, manufacturing, construction-Outlook for food grain production encouraging for coming year
-Exports grew at annual average rate of 26.4% during last 4 years
-Challenges related to capital inflows and global inflation
-We have weathered the crisis, but no room for complacency
-Moderate pass through of prices affected domestic inflation in '08
-Dec industrial growth fell 2% (YoY)
-Forecasts indicate that world economy may fare worse in 2009
-India has been affected along with other slowing EM economies
-GDP growth of 7.1% makes India second fastest growing economy
-Fiscal pkgs announced provide tax relief to boost demand, spending
-Have taken steps to encourage private investments in infra via PPP
-Approved 37 infra projects worth Rs 70,000 cr between Aug 08-Jan 09
-54 central infra proj of Rs 67700cr sent for final nod to PPP panel
-Initiative for providing refinance to banks for long-term credit to proj
-IIFCL can to raise Rs 10000 cr, nod for additional Rs 30000 cr
-IIFCL to refinance 60% of the projects
-Extension of export credit for labour intensive exports
-FDI inflow of USD 23.3 billion during April-November 2008
-Have relaxed fiscal responsibility & budget mgmt targets
-May need to consider additional fiscal measures in next regular budget
-Need to revert to fiscal consolidation at the earliest
-Economic regulatory and oversight systems have to be more efficient
-Attention given to agriculture sector, plan allocation up 300% in 4 yrs
-Agri - govt implementing revival pkg in 25 states worth Rs 13500 cr
-Agri - govt will continue to provide interest subvention for FY10
-Farm debt waiver of Rs 65,300 cr covering 36 million homes
-Govt to provide interest subsidy to farmers in FY10
-Outlay on higher education up 900% in 11th 5-year plan
-Annual ad-hoc grants have been increased by 50% (YoY)
-Tax rates must fall during times of crisis
-FY09 revised estimates of spending at Rs 9 lakh cr vs Rs 7.5 lakh cr
-FY09 plan expenditure revised to Rs 2.8 lakh cr from Rs 2.4 lakh cr
-Govt revises FY09 fertiliser subsidy to Rs 44863 cr
-FY09 food subsidy revised to Rs 10960 cr
-FY09 fiscal deficit seen at 6% of GDP vs estimate of 2.5%
-FY09 revenue deficit at 4.4% of GDP vs est of 1%
-FY10 spending seen at Rs 9.53 lakh cr
-FY10 budgetary support seen at Rs 2.85 lakh cr
-Rural jobs scheme to get Rs 30100 cr in FY10
-JNNURM spending seen at Rs 11842 cr for FY10
-Allocation of Rs 40900 cr for Bharat Nirman Scheme
-Interest subvention for some export loans extended
-Budget plan spending may have to be upped substantially post polls
-Additional plan expenditure has to increase by 0.5-1% post polls
-FY10 non-plan spend est at Rs 6.68 lk cr
-Major subsidy spending for FY10 seen at Rs 95,500 cr
-FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
-FY10 gross tax revenue seen at Rs 6.71 lk cr
-Interim Budget 2009: Allocation of Rs 8,000 cr for mid-day meal scheme
-Interim Budget 2009: Rs 13,100 cr allocated for elementary education
-Interest subvention for some export loans extended
-Budget plan spending may have to be upped substantially post polls
-Additional plan expenditure has to increase by 0.5-1% post polls
-FY10 non-plan spend est at Rs 6.68 lakh cr
-Major subsidy spending for FY10 seen at Rs 95,500 cr
-FY10 budget revenue deficit seen at 4%, fiscal deficit at 5.5%
-FY10 gross tax revenue seen at Rs 6.71 lakh cr
-FY10 gross market borrowing seen at Rs 3.2-3.3 lakh cr
-No tax changes in interim budget
Friday, February 13, 2009
Railway Interim Budget - Complete Speech
Speech of Shri Lalu Prasad
Introducing the Railway Budget 2009-2010 On 13th February 2009
1. Mr. Speaker, Sir I rise to place before the House, the Revised Estimates for 2008-09 and the estimated receipts and expenditure for 2009-10 for the Indian Railways. The estimates for 2009-10 are for the whole year, but, at present I seek from the august House, a vote on account, sufficient to cover the estimated expenditure for the first four months of the fiscal. The requirements for the remaining part of the year are to be voted separately, later on.
2. Speaker sir,
Shukriya se main shuroo karta hoon apni bat aajSath lekar main chala hoon desh, duniya aur samaj Main chukata he rahoonga desh ki mitti ka karjRashtra sewa reet meri aur yahi mera rivaj
3. I have great pride that, in its journey of service to the nation, the Indian Railways have reached an important milestone. Being an integral part of this journey for the last five years, I can proudly say that Indian Railways scaled a new pinnacle every year and now stand at the zenith of success from where, without imposing any burden on the common man, the railways are set to establish the historic landmark of earning a cash surplus before dividend of more than Rs 90,000 cr, in five years. The same Railways which faced a paucity of funds for replacement of over aged assets in 2001 and which had to defer payment of Rs. 2,800 cr as dividend to General Revenues, have now surprised the whole world with a historic financial turnaround. Sir, the year 2008 witnessed a financial turmoil and worldwide recession making it difficult for even Fortune 500 companies to raise debt from the international markets. This august House would be pleasantly surprised to know, that even in such adverse times, the Indian Railway Finance Corporation, in November 2008, has successfully raised a 10 cr dollar loan, equivalent to Rs 500 cr, at a rate of only 4 percent, from the international market.
4. Sir, the transformation of the Railways is fundamentally different from the financial turnaround witnessed in private sector companies. While private companies resort to anti-people measures like increase in prices, retrenchment of employees and lockouts, Railways have kept the human aspect as the central focus and achieved an extraordinary feat without putting any extra burden on the common man or the 1 employees. In the last five years the Railways have stepped up the annual growth rate of freight loading from an average of 3 percent during the decade of 90’s to an average of 8 percent. The declining trend of railways share in transportation of steel and cement, witnessed during the past several years has also been arrested as the Railways increased their share in transportation of these commodities, over the last five years. This transformation has been possible through the significant improvement in productivity of railway assets and efficient working by railway employees. Sir,
Karigari ka aisa tareeka bata diyaGhate ka job hi daur tha beeta bana diyaBharat ki rail vishwa me is tarah ki bulandHathi ko chust kar diya cheeta bana diya
5. To make true the dream of financial turnaround, the entire Railway family worked as a team, with out of the box thinking, adapting themselves in tune with customer requirements and bravely faced the ever arising new challenges. This has earned the Railways and its personnel the respect of the entire nation which has in turn imbued railway employees with renewed motivation and a rising morale. The benefits of this turnaround have accrued not only to the Railways and railway employees but also to the people of the country. Railways are adopting modern technologies and forming strong alliances, to provide better facilities to their customers. In the last five years there has also been a significant improvement in Railway safety and a steep reduction in the number of railway accidents. The number of consequential accidents came down to 194 in 2007-08, as against 325 in 2003-04. I am happy to report to the House that this declining trend is continuing in 2008-09 also. The number of consequential train accidents during April to November in the current year decreased to 117 as compared to 138 during the corresponding period of the previous year.
6. Railways have now fully internalized the fact that mere reduction in passenger fares and freight tariff alone cannot ensure success in a competitive market. The only one formula for success is to render better services than your competitor in giving your customers full satisfaction and winning over their hearts. This is to be done, not for any single day, but day after day and year after year. The organization is the same but there is a paradigm shift in its strategy and thinking. The Railways are increasingly becoming more outward looking and customer centric. Today passengers are reserving tickets through the internet from their homes. Apart from this, the facility to reserve tickets is available at ATMs, petrol pumps and post offices. Earlier passengers used to face considerable difficulty in getting information about train services. However, today this information can be obtained from any corner of the country. This has been made possible through the ‘139 Train Enquiry Service’, which is available 24 hours a day in 11 different 2 languages. Four call centers have been set up in four corners of the country. These facilitate availability of instantaneous information on train arrival-departure, reservation status etc. Presently more than 5 lakh passengers are daily availing this facility.
7. Introduction of the fully air conditioned Garib Raths and the free passenger upgrade facility from lower classes to vacant air conditioned upper classes has enabled lakhs of people to enjoy the comfort of traveling in air conditioned class for the first time in their lives. A number of improvements like better cleanliness in trains and stations, provision of cushioned seats in place of wooden seats in coaches of ordinary class and increase in the height of the platform at smaller stations have been initiated. In addition platform shelters are being constructed at smaller stations for protection against cold, heat and rain.
8. Heavy investments will have to be made for enhancing capacity of rolling stock, technical upgradation and advancement in technology to achieve the ambitious targets set for passenger and freight business segments, in the 11th Five Year Plan. Therefore Railways have deployed their investible surplus of nearly Rs 70,000 cr earned between 2004-05 to 2008-09 to increase its productivity. Railways will invest Rs.2,30,000 cr under the 11th Five Year Plan, which is almost three times the amount allocated in the 10th Five Year Plan. The objective is to increase the transport capacity of the Railways and to reduce the unit cost of operations. Railways investment outlays have been stepped up from Rs 13,394 cr in 2003-04 to Rs. 36,773 cr in 2008-09. Railways would be completing the work of 4900 kms of gauge conversion, 1800 kms of doubling and laying 1100 kms of new lines, over five years.
9. I am happy to inform the House that in the current year, Agartala, the capital of the North Eastern State of Tripura, has been connected by railway line, which marks the first rail connection to another state capital of a North-eastern state since Independence. The dream of bringing rail services to the Kashmir Valley has also been realized with the start of train services between Anantnag and Rajwansher. The service up to Baramula will be extended in the next few days and up to Qazigund in the next four months. Gauge conversion works of Rewari-Ringus-Phulera and Darbhanga-Sitamarhi have also been completed. The new lines Sakri-Biraul, Moranhat- Dibrugarh, Hathua-Bathua Bazar and Puntamba-Shirdi have also been completed. Significant progress has been made in the field of railway electrification. As against 504 route km completed in 2003-04 the target for 2008-09 is set at 1000 route km. Sir, Railways have conducted successful trials of running electric locomotives with over head equipment at a height of about 7.5 meters. This will enable running of double stack containers on the electrified Western Dedicated Freight corridor.
10. Similarly, the production of wagons during this period is targeted to increase from 6,600 per annum to nearly 15,000 (vehicle units) and diesel and electric locomotives from 202 to about 480. More importantly, through modernization of the network and technological upgradation of rolling stock, the capacity of the newly constructed track and rolling stock has increased significantly. Production of covered and open wagons of new design has since commenced. This will result in a 78 percent increase in capacity of goods rakes comprising of new design covered wagons as compared with the old stock. These trains can now carry a load of 4100 tonnes compared with the earlier load of 2300 tonnes. The capacity of the freight trains comprising of open wagons with new design will also be 22 per cent more than before. Similarly, the capacity of passenger trains has also been increased.
Har shikhar ko paar karte nit nayee manjil ki orPragati ka kafla badhne laga hai charon orRah ka har shakhs ko lekar chale hain sath humEk naye andaj se phir ek nayee manjil ki orPerformance Review of 2007-08
11. Sir, I would now like to present in brief the operating results for the previous fiscal 2007-08. Registering a growth of 9 percent, Railways loaded 794 million tonnes, which was 66 million tonnes more than the loading in 2006-07. Freight and passenger earnings grew at 14 and 15 percent respectively. Total traffic earnings also increased by 15 percent to reach Rs 71,645 cr. The cash surplus before dividend increased from the 2006-07 level of Rs 20,338 cr to Rs 25,006 cr. The plan expenditure increased to Rs 28,980 cr compared with Rs 25,002 cr in 2006-07. Revised Estimates 2008-09
12. Speaker Sir, the Railways registered an excellent performance in freight loading and earnings till the end of September 2008. During this period, freight loading and earnings registered a growth of 9 percent and 19 percent respectively. Similarly, the passenger earnings increased by 14 percent. However, in October and November, the growth in freight loading was adversely impacted by the recession in the international markets. There was a steep reduction in iron ore for export and container traffic. The growth rate of steel traffic also reflected a decrease. This resulted in a decrease in freight loading and freight earnings in the months of October and November. Sir, the situation in December and January indicates some improvement and we are not only hopeful but confident that the budget targets for passenger and goods earnings set for this fiscal will be surpassed. Freight earnings increased to Rs. 38,093 cr, by the end of December’08, 4 registering a growth of 14 percent. Based on the present trend we have increased the target for goods earnings for 2008-09 by Rs. 1,593 cr. Similarly, the earnings from passenger traffic increased by nearly 12 percent up to December which is about three percent more than the budgeted target. Accordingly, the revised estimates for freight earnings have been kept at Rs. 54,293 cr, passenger earnings at Rs. 22,330 cr, sundry earnings at Rs. 3,250 cr, other coaching earnings at Rs. 2,420 cr and Gross Traffic Receipts at Rs. 82,393 cr.
13. Sir, the honourable members would recall that after implementation of the recommendations of the fifth Pay Commission, the financial position of the railways deteriorated rapidly and they defaulted in payment of Rs 2,800 cr as dividend in 2001 and 2002. I am proud that this time, due to its strong financial position, the Railways have implemented the sixth Pay Commission recommendations with relative ease, benefiting about 14 lakh railway employees and 11 lakh pensioners , without defaulting on payment of dividend. In anticipation of the recommendations of the 6th Pay Commission, we had made an ad hoc provision of Rs. 4,000 cr in Ordinary Working Expenses and Rs. 1,000 cr in the Pension Fund. However, based on the revised estimates received so far, it is expected that in the current fiscal, expenditure on this account will be substantially higher at Rs.9,000 cr for salaries of Railway employees and Rs. 4,500 cr more for pension. In keeping with the increased demand, the Revised Estimates of Ordinary Working Expenses have been kept at Rs. 55,000 cr and the appropriation to Pension Fund at Rs. 10,500 cr. The appropriation to DRF is Rs. 7,000 cr. With this, the total Working Expenses are likely to be Rs. 72,500 cr. Cash surplus before dividend is likely to be Rs.19,320 cr. The operating ratio of the Railways is projected at 88 percent. The revised Annual Plan outlay for 2008-09 is proposed at Rs. 36,773 cr. Budget Estimates for 2009-10
14. Sir, now I will touch upon the Budget Estimates for 2009-10.
15. The Budget Estimates for goods earnings, passenger earnings, sundry other earnings and other coaching earnings have been kept at Rs. 59,059 cr, 25,000 cr, Rs. 6,000 cr and Rs. 3,000 cr respectively in 2009-10. The Gross Traffic Receipts have been projected at Rs . 93,159 cr, exceeding the Revised Estimates for the current year by Rs 10,766 cr.
16. Sir, the Ordinary Working Expenses have been kept at Rs. 62,900 cr in 2009-10 which are Rs. 7,900 cr more than the Revised Estimates for 2008-09. This is mainly due to payment of 60 percent of the arrears to the staff in view of the recommendations of the Sixth Pay Commission. The total Working Expenses are estimated at Rs 83,600 cr. The cash surplus before dividend is expected to be Rs 18,847 cr and the operating ratio 89.9 5 percent. Dividend payable to the General Revenues for 2009-10, is estimated at Rs. 5,304 cr based on the current applicable rate. Annual Plan 2009-10.
17. Sir, the Annual Plan for 2009-10 envisages investment of Rs. 37,905 cr. The budgetary support from the General Revenue has been proposed at Rs. 9,600 cr excluding Rs. 1,200 cr to be received from Central Road Fund. The Internal and Extra Budgetary Resource component would, accordingly, comprise 72 percent of the Annual Plan.
18. It gives me immense pleasure to inform the House that the work of construction of the double line Eastern Dedicated Freight Corridor has commenced from near Dehri-on- Son on 10th February 2009. Work on construction of the Western Dedicated Freight Corridor will also start in this month. Sir, I have seen the passenger trains travelling at speeds of 300 to 350 km per18. Sir, when I had announced the setting up of fully computerised railway enquiry call centre without any cost to the Railways two years ago, some honourable Members had likened the proposal to “Mungeri Lal ke hasin sapne.” I am happy that the dreams of “Mungeri Lal” have now become a reality. This enquiry service is now available in the entire country on Telephone No. 139 which can be accessed at local call charge through all mobile and fixed line telephones. Presently this service is being used daily by 2 lakh persons and it is expected that this number will increase to 5 lakhs in a year’s time. Nonavailability of on-line information on arrival and departure of trains with these call centers is a cause for considerable inconvenience to the passengers. Therefore, we have decided to use modern IT and telecom technology to link the call centers with control office and NTES (National Train Enquiry System) on an on-line basis. This work will be completed by March 2009 to disseminate latest updated information about trains.19. hour in Japan, Germany and France. In the 2007-08 Budget, I had announced that based on requirement, pre-feasibility studies would be undertaken for running bullet trains in various regions of the country. Action is on for examining feasibility of running bullet trains between Delhi – Amritsar, Ahmedabad- Mumbai- Pune, Hyderabad- Vijaywada- Chennai, Chennai- Bangalore- Ernakulam and Howrah –Haldia. Sir, I am happy to inform the honourable members that action will soon be started for conducting a pre- feasibility study to run bullet trains between Delhi- Patna.
20. The work of construction of Rail Wheel Factory at Chhapra is going on in right earnest. Efforts are being made to start work on Diesel and Electric Locomotive Factories at Marhoura and Madhepura, in this month.
21. Sir, the wagon factories of Bharat Wagon Limited located at Mokama and Muzaffarpur have been transferred to Ministry of Railways. In view of the special request of local public representatives, the matter of transfer of the wagon units of Burn Standard located at Burnpur and Howrah, to Ministry of Railways, in the same manner as Mokama and Muzaffarpur, would be discussed, for further action with the concerned Ministries.
22. The surveys for construction of new line from Jhargram to Purulia and the new line for extension of Kolkata Metro, from Dum Dum to Dakshineshwar have been completed. The West Bengal government has also given its consent to contribute fifty percent of the cost for extension of the Kolkata Metro. Further action is being taken for obtaining necessary approvals for these projects.23. With a view to facilitate smooth flow of rail traffic, construction of ROB/RUBs on fifty-fifty cost sharing basis, at Palej, Panoli, Kosamba and Kim in the districts of Surat and Bharuch in Gujarat, Roshanara Garden and Sultanpuri in Delhi Area, 6 Shastrinagar and Model Town of Ludhiana in Punjab and Vasarpadi in Tamil Nadu will be considered on priority.24. With a view to facilitate improved train operations I have taken the administrative decision to set up two new railway divisions at Bhagalpur and Thawe. Surveys
25. Based on demands the following surveys are proposed to be taken up:-
New Lines
1. Ringus - Didwana via Khatu Shyamji
2. Islampur – Manpur via Khijar Sarai/Sarbhada
3. Bakulha- Belthara Road
4. Bihariganj – Forbesganj via Muraliganj, Kumarkhand, Chhatapur
5. Piduguralla – Narasaraopet
6. Madhepura -Virpur via Singheshwar, Pipra, Triveniganj
7. Botad – Jasdan via Gondal
8. Bihariganj – Naugachia via Udakishunganj, Puraini, Chausa
9. Samdari – Phalodi
10. Burhwal – Bahraich
11. Areraj – Narkatiaganj via Lauria
12. Lalganj – Faizabad via Akbarganj, Maharajganj and Rae Bareilly
13. Parasnath – Madhuban
14. Dheng – Sonbarsa via Majorganj, Kanhauli
Gauge Conversion
1. Khijadia – Amreli – Junagarh
2. Champaner – Pani Mines
3. Chhuchhapura –Tankhala with extention to Rajpipla
Doubling
4. Hospet – Swamihalli
5. Tornagallu – Ranjitpura
6. Bandikui – Alwar
7. Ajmer – Palanpur
8. Tinpahar – Bhagalpur Anand Vihar – Tilak Bridge 3rd & 4th line
9. Dangoaposi – Pandrasali 3rd line
10. Katwa – Farakka
11. Passenger Services
26. Sir, in light of the demands expressed by passengers, I propose to introduce the following services:-
New Trains
12. Bilaspur - Tirunelveli via Thiruvanathpuram Express (Weekly)
13. Ranchi -Jaynagar Express (Tri-weekly)
14. Secunderabad – Manuguru Superfast (Daily)
15. Mumbai - Karwar Superfast (Tri-weekly)
16. Bhopal - Lucknow Junction Garib Rath Express (Weekly)
17. Durg - Jaipur Express (Weekly)
18. Chhatrapati Sahu terminal(Kolhapur)–Dhanbad Link Service via Parasnath (Weekly)
19. Sengottai - Erode Passenger (Daily)
20. Dibrugarh Town - Chandigarh Express (Weekly)
21. Ajmer - Bhagalpur via Delhi Garib Rath Express (Bi-weekly)
22. Nizamuddin – Bangalore via Kacheguda Rajdhani Express (Tri-weekly)
23. Barauni - Delhi Jan Sadharan Superfast (Bi-weekly)
24. Mumbai – Varanasi Superfast (Daily)
25. Mysore -Yesvantpur Express (Daily)
26. Jamalpur – Gaya Passenger
27. Koraput – Rourkela Express via Rayagada (Daily)
28. Agra - Ajmer Superfast (Daily)
29. Sitamarhi – Patna Link Service (Daily)
30. Tiruchchirapalli - Madurai Express (Daily)
31. Mumbai - Bikaner Superfast (Bi-weekly)
32. Jaynagar – Ajmer Link Service (Bi-weekly)
33. Agra - Lucknow Junction Shatabdi Express (Daily)
34. Gandhidham - Kolkata Superfast (Weekly)
35. New Delhi – Guwahati Rajdhani Express via Bhagalpur (Weekly)
36. Mumbai - Tirunelvelli Superfast via Thiruvanathpuram (Bi-weekly)
37. Jammu Tawi – Darbhanga Garib Rath Express (Weekly)
38. Saharsa – Delhi via Express Patna (Weekly)
39. Gwalior - Bhopal Intercity Express via Guna (5 days a week)
40. Coimbatore -Tuticorin Link Service (Daily)
41. Howrah -Haridwar Superfast (5 days a week)
42. Machhalipatnam – Mumbai Superfast (Bi-weekly)
43. Varanasi - Jammu Tawi Superfast (Daily)
44. Gorakhpur - Mumbai Superfast (Daily)
45. Jhajha – Patna MEMU
46. New Delhi – Palwal MEMU
47. New Delhi – Guwahati Rajdhani Express via Muzaffarpur (Weekly)
48. Veraval – Mumbai Link service (Daily)
49. Jhansi – Chhindwara Superfast (Bi-weekly)
50. Mumbai – Jodhpur Express (Weekly)
51. Hajipur – Bagaha Link Service
52. Howrah – Delhi Link Service via Azimganj- Bhagalpur (Weekly)
53. Sitamarhi –Delhi Garib Rath Express via Patna (Weekly)
Extension of Trains27. I am extremely happy to propose the extension in services of the following trains:-
54. 5761/5762 Ranchi – Alipurduar Express to Guwahati
55. 9269/9270 Porbandar – Bapudham Motihari Express to Muzaffapur
56. 1471/1472 Jabalpur – Bhopal Express to Laxmibai Nagar, Indore
57. 6865/6866 Ernakulam – Tiruchchirapalli Express to Nagore
58. 3155/3156 Kolkata – Darbhanga Mithilanchal Express to Sitamarhi
59. 2175/2176 Howrah – Gwalior Chambal Express to Mathura
60. 2177/2178 Howrah – Agra Cantt Chambal Express to Mathura
61. 6507/6508 Jodhpur – Bangalore Express to Coimbatore
62. 2187/2188 Jabalpur – Mumbai Garib Rath Express to Allahabad
63. 2927/2928 Mumbai – Vadodara Express to Chhotaudepur
64. 541/542 Patna – Darbhanga Kamlaganga Fast Passenger to Biraul
65. 3113/3114 Kolkata – Murshidabad Hazar Duari Express to Lalgola
66. 2909/2910 Mumbai – Jaipur Garib Rath Express to Delhi
67. 2143/2144 Nagpur–Gaya Dikshabhoomi Parasnath Express to Dhanbad via Parasnath
Increase in Frequency28. The honorable members would be pleased to know that it is proposed to increase the frequency of the following train services:-
68. 2423/2424 New Delhi – Guwahati/Dibrugarh Rajdhani Express from 5 days to 6 days
69. 2443/2444 Bhubaneshwar – New Delhi Rajdhani Express from 2 days to 4 days
70. 2395/2396 Ajmer – Rajendra Nagar Ziyarat Express from weekly to Bi- weekly
71. 2211/2212 Nizamuddin – Bapudham Motihari Garib Rath from weekly to Bi- weekly
72. 2183/2184 Bhopal – Lucknow Junction Express from Bi-weekly to Tri- weekly
73. 7091/7092 Secunderabad – Patna Express from Bi-weekly to Daily
74. 2739/2740 Secunderabad – Vishakhapatnam Garib Rath Express from 4 days to Daily
75. 2111/2112 Amravati – Mumbai Amravati Express from Tri-weekly to Daily
76. 2149/2150 Pune – Patna Express from 4 days a week to Daily
77. 2957/2958 Ahmedabad – New Delhi Rajdhani Express from 6 days to Daily
78. 2947/2948 Ahmedabad–Patna Azimabad Express from Bi-weekly to Tri- weekly
79. 2887/2888 Puri – Howrah Express from weekly to Bi-weekly
80. 2487/2488 Jogbani – Delhi Seemanchal Express from 5 days to 6 days a week
81. 2823/2824 Nizammudin-Durg Chattisgarh Sampark Kranti from 2 days to 3 days a week
29. The local MEMU trains traveling between Gaya - Patna, Jhajha - Patna, Buxar - Patna, Mughalsarai - Patna, Ara - Patna and Mokama - Danapur are heavily crowded. Presently most of the MEMU rakes are of 12 coaches. Only 6 services out of 18 have 16 coaches. It has, therefore, been decided to provide 16 coaches for all these 18 MEMU services on these routes by the end of March-April 2009. This will provide comfort to passengers traveling by local trains.
30. Sir, whereas, earlier at the time of the Railway Budget, people used to be apprehensive about the possible increase in passenger fares, now, on the other hand on the eve of my budget, people appear not only hopeful but sanguine about the likely reduction in passenger fares. Respecting the wishes of crores of people, for the fourth consecutive time, I have decided to reduce the passenger fares, for non sub-urban mail/express and ordinary passenger trains by one more rupee for fares costing up to rupees fifty per passenger. With this there has been a historic reduction in the passenger fares for non sub-urban second classes continuously over the last four years, by rupees four per passenger.
Is tarah seva ka ye farj nibhaya humneDesh majboot kiya aur munafa bhi kamaya humneAam janata ki suvidha ka rakha pura khyalHar ek budget mein yatri kiraya ghataya humne
Sir, since the fare for rail travel for 10 km and below has already been reduced from four rupees to one rupee, therefore, this reduction will not be applicable for second class rail journey up to 10 km.31. Sir, last year I had decided to reduce the second class fares of all mail/express and ordinary passenger trains by 5 percent for the ticket costing more than rupees fifty per passenger. Respecting the aspirations of the long distance passengers, I have decided this year to reduce the second class and sleeper class fares of all mail/ express and ordinary passenger trains by 2 percent for the ticket costing more than rupees fifty per passenger.
32. Sir, during the last four years I have reduced the fares of AC First Class by 28 percent and AC two tier by 20 percent. Railways have been greatly benefited by the heavy reduction in passenger fares of these classes. Even as air travel is reportedly reflecting reduction in number of passengers due to economic recession, there has been a significant increase in the number of passengers of these classes on the railways. Therefore, I have decided to reduce the fares of AC first class, AC 2 tier, AC 3 tier and AC Chair Car by 2 percent.
Conclusion
33. Sir, it is matter of great honour for me to work under the dynamic leadership of the Hon’ble Prime Minister Dr. Manmohan Singh and as the head of the Railway family I can proudly say that the railways are now positioned on a rock solid foundation, more firm than ever, in their resolve to keep ascending new heights. In the end, I would like to express my gratitude to the august House for their continuous encouragement and support to the 11 Railways. I am not only hopeful but am fully confident that, as in the past, this august House and the people of this country, will continue to extend their utmost affection and support to the Railways.
Koshish ka meri aapne mujhko diya silaYe martaba buland mujhe aapse milaWada hai mera tum se ai mere humsaferJari rahega kal bhi tarakki ka silsila
Sir, with this I commend the Interim Railway Budget to the House.
Introducing the Railway Budget 2009-2010 On 13th February 2009
1. Mr. Speaker, Sir I rise to place before the House, the Revised Estimates for 2008-09 and the estimated receipts and expenditure for 2009-10 for the Indian Railways. The estimates for 2009-10 are for the whole year, but, at present I seek from the august House, a vote on account, sufficient to cover the estimated expenditure for the first four months of the fiscal. The requirements for the remaining part of the year are to be voted separately, later on.
2. Speaker sir,
Shukriya se main shuroo karta hoon apni bat aajSath lekar main chala hoon desh, duniya aur samaj Main chukata he rahoonga desh ki mitti ka karjRashtra sewa reet meri aur yahi mera rivaj
3. I have great pride that, in its journey of service to the nation, the Indian Railways have reached an important milestone. Being an integral part of this journey for the last five years, I can proudly say that Indian Railways scaled a new pinnacle every year and now stand at the zenith of success from where, without imposing any burden on the common man, the railways are set to establish the historic landmark of earning a cash surplus before dividend of more than Rs 90,000 cr, in five years. The same Railways which faced a paucity of funds for replacement of over aged assets in 2001 and which had to defer payment of Rs. 2,800 cr as dividend to General Revenues, have now surprised the whole world with a historic financial turnaround. Sir, the year 2008 witnessed a financial turmoil and worldwide recession making it difficult for even Fortune 500 companies to raise debt from the international markets. This august House would be pleasantly surprised to know, that even in such adverse times, the Indian Railway Finance Corporation, in November 2008, has successfully raised a 10 cr dollar loan, equivalent to Rs 500 cr, at a rate of only 4 percent, from the international market.
4. Sir, the transformation of the Railways is fundamentally different from the financial turnaround witnessed in private sector companies. While private companies resort to anti-people measures like increase in prices, retrenchment of employees and lockouts, Railways have kept the human aspect as the central focus and achieved an extraordinary feat without putting any extra burden on the common man or the 1 employees. In the last five years the Railways have stepped up the annual growth rate of freight loading from an average of 3 percent during the decade of 90’s to an average of 8 percent. The declining trend of railways share in transportation of steel and cement, witnessed during the past several years has also been arrested as the Railways increased their share in transportation of these commodities, over the last five years. This transformation has been possible through the significant improvement in productivity of railway assets and efficient working by railway employees. Sir,
Karigari ka aisa tareeka bata diyaGhate ka job hi daur tha beeta bana diyaBharat ki rail vishwa me is tarah ki bulandHathi ko chust kar diya cheeta bana diya
5. To make true the dream of financial turnaround, the entire Railway family worked as a team, with out of the box thinking, adapting themselves in tune with customer requirements and bravely faced the ever arising new challenges. This has earned the Railways and its personnel the respect of the entire nation which has in turn imbued railway employees with renewed motivation and a rising morale. The benefits of this turnaround have accrued not only to the Railways and railway employees but also to the people of the country. Railways are adopting modern technologies and forming strong alliances, to provide better facilities to their customers. In the last five years there has also been a significant improvement in Railway safety and a steep reduction in the number of railway accidents. The number of consequential accidents came down to 194 in 2007-08, as against 325 in 2003-04. I am happy to report to the House that this declining trend is continuing in 2008-09 also. The number of consequential train accidents during April to November in the current year decreased to 117 as compared to 138 during the corresponding period of the previous year.
6. Railways have now fully internalized the fact that mere reduction in passenger fares and freight tariff alone cannot ensure success in a competitive market. The only one formula for success is to render better services than your competitor in giving your customers full satisfaction and winning over their hearts. This is to be done, not for any single day, but day after day and year after year. The organization is the same but there is a paradigm shift in its strategy and thinking. The Railways are increasingly becoming more outward looking and customer centric. Today passengers are reserving tickets through the internet from their homes. Apart from this, the facility to reserve tickets is available at ATMs, petrol pumps and post offices. Earlier passengers used to face considerable difficulty in getting information about train services. However, today this information can be obtained from any corner of the country. This has been made possible through the ‘139 Train Enquiry Service’, which is available 24 hours a day in 11 different 2 languages. Four call centers have been set up in four corners of the country. These facilitate availability of instantaneous information on train arrival-departure, reservation status etc. Presently more than 5 lakh passengers are daily availing this facility.
7. Introduction of the fully air conditioned Garib Raths and the free passenger upgrade facility from lower classes to vacant air conditioned upper classes has enabled lakhs of people to enjoy the comfort of traveling in air conditioned class for the first time in their lives. A number of improvements like better cleanliness in trains and stations, provision of cushioned seats in place of wooden seats in coaches of ordinary class and increase in the height of the platform at smaller stations have been initiated. In addition platform shelters are being constructed at smaller stations for protection against cold, heat and rain.
8. Heavy investments will have to be made for enhancing capacity of rolling stock, technical upgradation and advancement in technology to achieve the ambitious targets set for passenger and freight business segments, in the 11th Five Year Plan. Therefore Railways have deployed their investible surplus of nearly Rs 70,000 cr earned between 2004-05 to 2008-09 to increase its productivity. Railways will invest Rs.2,30,000 cr under the 11th Five Year Plan, which is almost three times the amount allocated in the 10th Five Year Plan. The objective is to increase the transport capacity of the Railways and to reduce the unit cost of operations. Railways investment outlays have been stepped up from Rs 13,394 cr in 2003-04 to Rs. 36,773 cr in 2008-09. Railways would be completing the work of 4900 kms of gauge conversion, 1800 kms of doubling and laying 1100 kms of new lines, over five years.
9. I am happy to inform the House that in the current year, Agartala, the capital of the North Eastern State of Tripura, has been connected by railway line, which marks the first rail connection to another state capital of a North-eastern state since Independence. The dream of bringing rail services to the Kashmir Valley has also been realized with the start of train services between Anantnag and Rajwansher. The service up to Baramula will be extended in the next few days and up to Qazigund in the next four months. Gauge conversion works of Rewari-Ringus-Phulera and Darbhanga-Sitamarhi have also been completed. The new lines Sakri-Biraul, Moranhat- Dibrugarh, Hathua-Bathua Bazar and Puntamba-Shirdi have also been completed. Significant progress has been made in the field of railway electrification. As against 504 route km completed in 2003-04 the target for 2008-09 is set at 1000 route km. Sir, Railways have conducted successful trials of running electric locomotives with over head equipment at a height of about 7.5 meters. This will enable running of double stack containers on the electrified Western Dedicated Freight corridor.
10. Similarly, the production of wagons during this period is targeted to increase from 6,600 per annum to nearly 15,000 (vehicle units) and diesel and electric locomotives from 202 to about 480. More importantly, through modernization of the network and technological upgradation of rolling stock, the capacity of the newly constructed track and rolling stock has increased significantly. Production of covered and open wagons of new design has since commenced. This will result in a 78 percent increase in capacity of goods rakes comprising of new design covered wagons as compared with the old stock. These trains can now carry a load of 4100 tonnes compared with the earlier load of 2300 tonnes. The capacity of the freight trains comprising of open wagons with new design will also be 22 per cent more than before. Similarly, the capacity of passenger trains has also been increased.
Har shikhar ko paar karte nit nayee manjil ki orPragati ka kafla badhne laga hai charon orRah ka har shakhs ko lekar chale hain sath humEk naye andaj se phir ek nayee manjil ki orPerformance Review of 2007-08
11. Sir, I would now like to present in brief the operating results for the previous fiscal 2007-08. Registering a growth of 9 percent, Railways loaded 794 million tonnes, which was 66 million tonnes more than the loading in 2006-07. Freight and passenger earnings grew at 14 and 15 percent respectively. Total traffic earnings also increased by 15 percent to reach Rs 71,645 cr. The cash surplus before dividend increased from the 2006-07 level of Rs 20,338 cr to Rs 25,006 cr. The plan expenditure increased to Rs 28,980 cr compared with Rs 25,002 cr in 2006-07. Revised Estimates 2008-09
12. Speaker Sir, the Railways registered an excellent performance in freight loading and earnings till the end of September 2008. During this period, freight loading and earnings registered a growth of 9 percent and 19 percent respectively. Similarly, the passenger earnings increased by 14 percent. However, in October and November, the growth in freight loading was adversely impacted by the recession in the international markets. There was a steep reduction in iron ore for export and container traffic. The growth rate of steel traffic also reflected a decrease. This resulted in a decrease in freight loading and freight earnings in the months of October and November. Sir, the situation in December and January indicates some improvement and we are not only hopeful but confident that the budget targets for passenger and goods earnings set for this fiscal will be surpassed. Freight earnings increased to Rs. 38,093 cr, by the end of December’08, 4 registering a growth of 14 percent. Based on the present trend we have increased the target for goods earnings for 2008-09 by Rs. 1,593 cr. Similarly, the earnings from passenger traffic increased by nearly 12 percent up to December which is about three percent more than the budgeted target. Accordingly, the revised estimates for freight earnings have been kept at Rs. 54,293 cr, passenger earnings at Rs. 22,330 cr, sundry earnings at Rs. 3,250 cr, other coaching earnings at Rs. 2,420 cr and Gross Traffic Receipts at Rs. 82,393 cr.
13. Sir, the honourable members would recall that after implementation of the recommendations of the fifth Pay Commission, the financial position of the railways deteriorated rapidly and they defaulted in payment of Rs 2,800 cr as dividend in 2001 and 2002. I am proud that this time, due to its strong financial position, the Railways have implemented the sixth Pay Commission recommendations with relative ease, benefiting about 14 lakh railway employees and 11 lakh pensioners , without defaulting on payment of dividend. In anticipation of the recommendations of the 6th Pay Commission, we had made an ad hoc provision of Rs. 4,000 cr in Ordinary Working Expenses and Rs. 1,000 cr in the Pension Fund. However, based on the revised estimates received so far, it is expected that in the current fiscal, expenditure on this account will be substantially higher at Rs.9,000 cr for salaries of Railway employees and Rs. 4,500 cr more for pension. In keeping with the increased demand, the Revised Estimates of Ordinary Working Expenses have been kept at Rs. 55,000 cr and the appropriation to Pension Fund at Rs. 10,500 cr. The appropriation to DRF is Rs. 7,000 cr. With this, the total Working Expenses are likely to be Rs. 72,500 cr. Cash surplus before dividend is likely to be Rs.19,320 cr. The operating ratio of the Railways is projected at 88 percent. The revised Annual Plan outlay for 2008-09 is proposed at Rs. 36,773 cr. Budget Estimates for 2009-10
14. Sir, now I will touch upon the Budget Estimates for 2009-10.
15. The Budget Estimates for goods earnings, passenger earnings, sundry other earnings and other coaching earnings have been kept at Rs. 59,059 cr, 25,000 cr, Rs. 6,000 cr and Rs. 3,000 cr respectively in 2009-10. The Gross Traffic Receipts have been projected at Rs . 93,159 cr, exceeding the Revised Estimates for the current year by Rs 10,766 cr.
16. Sir, the Ordinary Working Expenses have been kept at Rs. 62,900 cr in 2009-10 which are Rs. 7,900 cr more than the Revised Estimates for 2008-09. This is mainly due to payment of 60 percent of the arrears to the staff in view of the recommendations of the Sixth Pay Commission. The total Working Expenses are estimated at Rs 83,600 cr. The cash surplus before dividend is expected to be Rs 18,847 cr and the operating ratio 89.9 5 percent. Dividend payable to the General Revenues for 2009-10, is estimated at Rs. 5,304 cr based on the current applicable rate. Annual Plan 2009-10.
17. Sir, the Annual Plan for 2009-10 envisages investment of Rs. 37,905 cr. The budgetary support from the General Revenue has been proposed at Rs. 9,600 cr excluding Rs. 1,200 cr to be received from Central Road Fund. The Internal and Extra Budgetary Resource component would, accordingly, comprise 72 percent of the Annual Plan.
18. It gives me immense pleasure to inform the House that the work of construction of the double line Eastern Dedicated Freight Corridor has commenced from near Dehri-on- Son on 10th February 2009. Work on construction of the Western Dedicated Freight Corridor will also start in this month. Sir, I have seen the passenger trains travelling at speeds of 300 to 350 km per18. Sir, when I had announced the setting up of fully computerised railway enquiry call centre without any cost to the Railways two years ago, some honourable Members had likened the proposal to “Mungeri Lal ke hasin sapne.” I am happy that the dreams of “Mungeri Lal” have now become a reality. This enquiry service is now available in the entire country on Telephone No. 139 which can be accessed at local call charge through all mobile and fixed line telephones. Presently this service is being used daily by 2 lakh persons and it is expected that this number will increase to 5 lakhs in a year’s time. Nonavailability of on-line information on arrival and departure of trains with these call centers is a cause for considerable inconvenience to the passengers. Therefore, we have decided to use modern IT and telecom technology to link the call centers with control office and NTES (National Train Enquiry System) on an on-line basis. This work will be completed by March 2009 to disseminate latest updated information about trains.19. hour in Japan, Germany and France. In the 2007-08 Budget, I had announced that based on requirement, pre-feasibility studies would be undertaken for running bullet trains in various regions of the country. Action is on for examining feasibility of running bullet trains between Delhi – Amritsar, Ahmedabad- Mumbai- Pune, Hyderabad- Vijaywada- Chennai, Chennai- Bangalore- Ernakulam and Howrah –Haldia. Sir, I am happy to inform the honourable members that action will soon be started for conducting a pre- feasibility study to run bullet trains between Delhi- Patna.
20. The work of construction of Rail Wheel Factory at Chhapra is going on in right earnest. Efforts are being made to start work on Diesel and Electric Locomotive Factories at Marhoura and Madhepura, in this month.
21. Sir, the wagon factories of Bharat Wagon Limited located at Mokama and Muzaffarpur have been transferred to Ministry of Railways. In view of the special request of local public representatives, the matter of transfer of the wagon units of Burn Standard located at Burnpur and Howrah, to Ministry of Railways, in the same manner as Mokama and Muzaffarpur, would be discussed, for further action with the concerned Ministries.
22. The surveys for construction of new line from Jhargram to Purulia and the new line for extension of Kolkata Metro, from Dum Dum to Dakshineshwar have been completed. The West Bengal government has also given its consent to contribute fifty percent of the cost for extension of the Kolkata Metro. Further action is being taken for obtaining necessary approvals for these projects.23. With a view to facilitate smooth flow of rail traffic, construction of ROB/RUBs on fifty-fifty cost sharing basis, at Palej, Panoli, Kosamba and Kim in the districts of Surat and Bharuch in Gujarat, Roshanara Garden and Sultanpuri in Delhi Area, 6 Shastrinagar and Model Town of Ludhiana in Punjab and Vasarpadi in Tamil Nadu will be considered on priority.24. With a view to facilitate improved train operations I have taken the administrative decision to set up two new railway divisions at Bhagalpur and Thawe. Surveys
25. Based on demands the following surveys are proposed to be taken up:-
New Lines
1. Ringus - Didwana via Khatu Shyamji
2. Islampur – Manpur via Khijar Sarai/Sarbhada
3. Bakulha- Belthara Road
4. Bihariganj – Forbesganj via Muraliganj, Kumarkhand, Chhatapur
5. Piduguralla – Narasaraopet
6. Madhepura -Virpur via Singheshwar, Pipra, Triveniganj
7. Botad – Jasdan via Gondal
8. Bihariganj – Naugachia via Udakishunganj, Puraini, Chausa
9. Samdari – Phalodi
10. Burhwal – Bahraich
11. Areraj – Narkatiaganj via Lauria
12. Lalganj – Faizabad via Akbarganj, Maharajganj and Rae Bareilly
13. Parasnath – Madhuban
14. Dheng – Sonbarsa via Majorganj, Kanhauli
Gauge Conversion
1. Khijadia – Amreli – Junagarh
2. Champaner – Pani Mines
3. Chhuchhapura –Tankhala with extention to Rajpipla
Doubling
4. Hospet – Swamihalli
5. Tornagallu – Ranjitpura
6. Bandikui – Alwar
7. Ajmer – Palanpur
8. Tinpahar – Bhagalpur Anand Vihar – Tilak Bridge 3rd & 4th line
9. Dangoaposi – Pandrasali 3rd line
10. Katwa – Farakka
11. Passenger Services
26. Sir, in light of the demands expressed by passengers, I propose to introduce the following services:-
New Trains
12. Bilaspur - Tirunelveli via Thiruvanathpuram Express (Weekly)
13. Ranchi -Jaynagar Express (Tri-weekly)
14. Secunderabad – Manuguru Superfast (Daily)
15. Mumbai - Karwar Superfast (Tri-weekly)
16. Bhopal - Lucknow Junction Garib Rath Express (Weekly)
17. Durg - Jaipur Express (Weekly)
18. Chhatrapati Sahu terminal(Kolhapur)–Dhanbad Link Service via Parasnath (Weekly)
19. Sengottai - Erode Passenger (Daily)
20. Dibrugarh Town - Chandigarh Express (Weekly)
21. Ajmer - Bhagalpur via Delhi Garib Rath Express (Bi-weekly)
22. Nizamuddin – Bangalore via Kacheguda Rajdhani Express (Tri-weekly)
23. Barauni - Delhi Jan Sadharan Superfast (Bi-weekly)
24. Mumbai – Varanasi Superfast (Daily)
25. Mysore -Yesvantpur Express (Daily)
26. Jamalpur – Gaya Passenger
27. Koraput – Rourkela Express via Rayagada (Daily)
28. Agra - Ajmer Superfast (Daily)
29. Sitamarhi – Patna Link Service (Daily)
30. Tiruchchirapalli - Madurai Express (Daily)
31. Mumbai - Bikaner Superfast (Bi-weekly)
32. Jaynagar – Ajmer Link Service (Bi-weekly)
33. Agra - Lucknow Junction Shatabdi Express (Daily)
34. Gandhidham - Kolkata Superfast (Weekly)
35. New Delhi – Guwahati Rajdhani Express via Bhagalpur (Weekly)
36. Mumbai - Tirunelvelli Superfast via Thiruvanathpuram (Bi-weekly)
37. Jammu Tawi – Darbhanga Garib Rath Express (Weekly)
38. Saharsa – Delhi via Express Patna (Weekly)
39. Gwalior - Bhopal Intercity Express via Guna (5 days a week)
40. Coimbatore -Tuticorin Link Service (Daily)
41. Howrah -Haridwar Superfast (5 days a week)
42. Machhalipatnam – Mumbai Superfast (Bi-weekly)
43. Varanasi - Jammu Tawi Superfast (Daily)
44. Gorakhpur - Mumbai Superfast (Daily)
45. Jhajha – Patna MEMU
46. New Delhi – Palwal MEMU
47. New Delhi – Guwahati Rajdhani Express via Muzaffarpur (Weekly)
48. Veraval – Mumbai Link service (Daily)
49. Jhansi – Chhindwara Superfast (Bi-weekly)
50. Mumbai – Jodhpur Express (Weekly)
51. Hajipur – Bagaha Link Service
52. Howrah – Delhi Link Service via Azimganj- Bhagalpur (Weekly)
53. Sitamarhi –Delhi Garib Rath Express via Patna (Weekly)
Extension of Trains27. I am extremely happy to propose the extension in services of the following trains:-
54. 5761/5762 Ranchi – Alipurduar Express to Guwahati
55. 9269/9270 Porbandar – Bapudham Motihari Express to Muzaffapur
56. 1471/1472 Jabalpur – Bhopal Express to Laxmibai Nagar, Indore
57. 6865/6866 Ernakulam – Tiruchchirapalli Express to Nagore
58. 3155/3156 Kolkata – Darbhanga Mithilanchal Express to Sitamarhi
59. 2175/2176 Howrah – Gwalior Chambal Express to Mathura
60. 2177/2178 Howrah – Agra Cantt Chambal Express to Mathura
61. 6507/6508 Jodhpur – Bangalore Express to Coimbatore
62. 2187/2188 Jabalpur – Mumbai Garib Rath Express to Allahabad
63. 2927/2928 Mumbai – Vadodara Express to Chhotaudepur
64. 541/542 Patna – Darbhanga Kamlaganga Fast Passenger to Biraul
65. 3113/3114 Kolkata – Murshidabad Hazar Duari Express to Lalgola
66. 2909/2910 Mumbai – Jaipur Garib Rath Express to Delhi
67. 2143/2144 Nagpur–Gaya Dikshabhoomi Parasnath Express to Dhanbad via Parasnath
Increase in Frequency28. The honorable members would be pleased to know that it is proposed to increase the frequency of the following train services:-
68. 2423/2424 New Delhi – Guwahati/Dibrugarh Rajdhani Express from 5 days to 6 days
69. 2443/2444 Bhubaneshwar – New Delhi Rajdhani Express from 2 days to 4 days
70. 2395/2396 Ajmer – Rajendra Nagar Ziyarat Express from weekly to Bi- weekly
71. 2211/2212 Nizamuddin – Bapudham Motihari Garib Rath from weekly to Bi- weekly
72. 2183/2184 Bhopal – Lucknow Junction Express from Bi-weekly to Tri- weekly
73. 7091/7092 Secunderabad – Patna Express from Bi-weekly to Daily
74. 2739/2740 Secunderabad – Vishakhapatnam Garib Rath Express from 4 days to Daily
75. 2111/2112 Amravati – Mumbai Amravati Express from Tri-weekly to Daily
76. 2149/2150 Pune – Patna Express from 4 days a week to Daily
77. 2957/2958 Ahmedabad – New Delhi Rajdhani Express from 6 days to Daily
78. 2947/2948 Ahmedabad–Patna Azimabad Express from Bi-weekly to Tri- weekly
79. 2887/2888 Puri – Howrah Express from weekly to Bi-weekly
80. 2487/2488 Jogbani – Delhi Seemanchal Express from 5 days to 6 days a week
81. 2823/2824 Nizammudin-Durg Chattisgarh Sampark Kranti from 2 days to 3 days a week
29. The local MEMU trains traveling between Gaya - Patna, Jhajha - Patna, Buxar - Patna, Mughalsarai - Patna, Ara - Patna and Mokama - Danapur are heavily crowded. Presently most of the MEMU rakes are of 12 coaches. Only 6 services out of 18 have 16 coaches. It has, therefore, been decided to provide 16 coaches for all these 18 MEMU services on these routes by the end of March-April 2009. This will provide comfort to passengers traveling by local trains.
30. Sir, whereas, earlier at the time of the Railway Budget, people used to be apprehensive about the possible increase in passenger fares, now, on the other hand on the eve of my budget, people appear not only hopeful but sanguine about the likely reduction in passenger fares. Respecting the wishes of crores of people, for the fourth consecutive time, I have decided to reduce the passenger fares, for non sub-urban mail/express and ordinary passenger trains by one more rupee for fares costing up to rupees fifty per passenger. With this there has been a historic reduction in the passenger fares for non sub-urban second classes continuously over the last four years, by rupees four per passenger.
Is tarah seva ka ye farj nibhaya humneDesh majboot kiya aur munafa bhi kamaya humneAam janata ki suvidha ka rakha pura khyalHar ek budget mein yatri kiraya ghataya humne
Sir, since the fare for rail travel for 10 km and below has already been reduced from four rupees to one rupee, therefore, this reduction will not be applicable for second class rail journey up to 10 km.31. Sir, last year I had decided to reduce the second class fares of all mail/express and ordinary passenger trains by 5 percent for the ticket costing more than rupees fifty per passenger. Respecting the aspirations of the long distance passengers, I have decided this year to reduce the second class and sleeper class fares of all mail/ express and ordinary passenger trains by 2 percent for the ticket costing more than rupees fifty per passenger.
32. Sir, during the last four years I have reduced the fares of AC First Class by 28 percent and AC two tier by 20 percent. Railways have been greatly benefited by the heavy reduction in passenger fares of these classes. Even as air travel is reportedly reflecting reduction in number of passengers due to economic recession, there has been a significant increase in the number of passengers of these classes on the railways. Therefore, I have decided to reduce the fares of AC first class, AC 2 tier, AC 3 tier and AC Chair Car by 2 percent.
Conclusion
33. Sir, it is matter of great honour for me to work under the dynamic leadership of the Hon’ble Prime Minister Dr. Manmohan Singh and as the head of the Railway family I can proudly say that the railways are now positioned on a rock solid foundation, more firm than ever, in their resolve to keep ascending new heights. In the end, I would like to express my gratitude to the august House for their continuous encouragement and support to the 11 Railways. I am not only hopeful but am fully confident that, as in the past, this august House and the people of this country, will continue to extend their utmost affection and support to the Railways.
Koshish ka meri aapne mujhko diya silaYe martaba buland mujhe aapse milaWada hai mera tum se ai mere humsaferJari rahega kal bhi tarakki ka silsila
Sir, with this I commend the Interim Railway Budget to the House.
Railway Interim Budget - 2009 (A review)
A Review of 2009 Railway Interim Budget
Railway Budget pulls the Stock Markets Up
Railway Budget has given postive push to the stock markets. Lalus budget has laid stress on infrastructure and technology upgradation and this has seen several stocks gaining points, particularly of those companies which manufacture goods used by the Railways. BSEs Sensex closed 155.62 points higher at 17,806.19. It reached a high of 17,860.10 and low of 17,678.74 . NSEs Nifty closed 50.35 points or 0.95 per cent higher at 5,250.35 after reaching a high of 5281.20 and low of 5200.80.
Nitin Fire (up 6.53 %), MIC Electronics (7.06 %), Bartronics (7.99 %) were amongst the top gainers in the smallcaps which would reap benefit from the budget. Jindal Stainless (7.19 %), Gateway Distriparks (6.28%) and Bharat Bijlee (5.11%) are the major gainers in the midcaps which would profit from the railway budget. Freight rate cut of 5% on petrol and diesel made oil marketing companies end firm.
IT Companies Cheer Up
Lalu’s endeavor to use technology for upgrading services of the Railways has made the software industry happy. However the IT initiatives announced in the Rail Budget would not really impact the top five companies in this sector much, as they are more dependent on overseas contracts. Smaller IT companies would gain more from the policies of Lalu.
Tickets through Mobile Phones
Mobile Phone holders, Cheer Up. Courtesy to Lalu you can get your tickets via your mobile phones. He has also increased number of UTS counters to 15000 and Automatic Ticket Vending Machine counters to 6000. He aims to provide employment to thousands of unemployed youth besides ensuring easy availability of railway tickets. He also announced extension of e-ticketing to wait-listed passengers.
* Lalu presents interim Railway budget
* This is UPA's last rail budget in its term
* Railways has a Rs 90,000 cr profit
* Rs 10,500 cr allocated for pension requirements
* 6th Pay Commission to hike expense by Rs 13,500 cr
* Steep fall in container traffic
* Work on Delhi-Mumbai freight corridor started
* Rlys to invest Rs 35,900 cr in 2009
* Railway connectivity to Kashmir initiated
* Passenger growth up 14 pct
* Passenger trains to have 22 pct more capacity
* Efficiency of passenger and goods wagons to be hiked
* Goods trains to have 78 pct added capacity
* 4 Railways inquiry call centers set up
* Electrification of 1000 km of rail lines completed
* Wagon production to be hiked from 6600 to 15000
* Railways invested Rs 70,000 cr out of surplus
* Railways to invest Rs 2,30,000 cr in 11th plan
* Railways reported Rs 25,000 cr cash surplus last year
* Revenues have risen by 39 paise a tonne/km since 2001
* Costs have fallen by 7 paise a tonne/km since 2001
* Gaps in the network will be bridged: Lalu
* Railways got loans at 4 pct
* Accidents come down from 325 in 03-04 to 194 in 07-08
* Railways has grown freight at the rate of 8 pct over last 5 yrs
* Research on for bullet trains
* FY10 operating ratio seen at 88%
* Mumbai-Bikaner superfast bi-weekly
* Nizamuddin-Bangalore Rajdhani tri-weekly
* Lalu gives 2 pct cut in AC and mail train fares
* Forty-three new trains announced
* Laid 1100 kms of new rail lines
* Bhubaneshwar-New Delhi Rajdhani becomes 4 days a week
* New Delhi-Ahmedabad Rajdhani becomes daily
Railway Budget pulls the Stock Markets Up
Railway Budget has given postive push to the stock markets. Lalus budget has laid stress on infrastructure and technology upgradation and this has seen several stocks gaining points, particularly of those companies which manufacture goods used by the Railways. BSEs Sensex closed 155.62 points higher at 17,806.19. It reached a high of 17,860.10 and low of 17,678.74 . NSEs Nifty closed 50.35 points or 0.95 per cent higher at 5,250.35 after reaching a high of 5281.20 and low of 5200.80.
Nitin Fire (up 6.53 %), MIC Electronics (7.06 %), Bartronics (7.99 %) were amongst the top gainers in the smallcaps which would reap benefit from the budget. Jindal Stainless (7.19 %), Gateway Distriparks (6.28%) and Bharat Bijlee (5.11%) are the major gainers in the midcaps which would profit from the railway budget. Freight rate cut of 5% on petrol and diesel made oil marketing companies end firm.
IT Companies Cheer Up
Lalu’s endeavor to use technology for upgrading services of the Railways has made the software industry happy. However the IT initiatives announced in the Rail Budget would not really impact the top five companies in this sector much, as they are more dependent on overseas contracts. Smaller IT companies would gain more from the policies of Lalu.
Tickets through Mobile Phones
Mobile Phone holders, Cheer Up. Courtesy to Lalu you can get your tickets via your mobile phones. He has also increased number of UTS counters to 15000 and Automatic Ticket Vending Machine counters to 6000. He aims to provide employment to thousands of unemployed youth besides ensuring easy availability of railway tickets. He also announced extension of e-ticketing to wait-listed passengers.
* Lalu presents interim Railway budget
* This is UPA's last rail budget in its term
* Railways has a Rs 90,000 cr profit
* Rs 10,500 cr allocated for pension requirements
* 6th Pay Commission to hike expense by Rs 13,500 cr
* Steep fall in container traffic
* Work on Delhi-Mumbai freight corridor started
* Rlys to invest Rs 35,900 cr in 2009
* Railway connectivity to Kashmir initiated
* Passenger growth up 14 pct
* Passenger trains to have 22 pct more capacity
* Efficiency of passenger and goods wagons to be hiked
* Goods trains to have 78 pct added capacity
* 4 Railways inquiry call centers set up
* Electrification of 1000 km of rail lines completed
* Wagon production to be hiked from 6600 to 15000
* Railways invested Rs 70,000 cr out of surplus
* Railways to invest Rs 2,30,000 cr in 11th plan
* Railways reported Rs 25,000 cr cash surplus last year
* Revenues have risen by 39 paise a tonne/km since 2001
* Costs have fallen by 7 paise a tonne/km since 2001
* Gaps in the network will be bridged: Lalu
* Railways got loans at 4 pct
* Accidents come down from 325 in 03-04 to 194 in 07-08
* Railways has grown freight at the rate of 8 pct over last 5 yrs
* Research on for bullet trains
* FY10 operating ratio seen at 88%
* Mumbai-Bikaner superfast bi-weekly
* Nizamuddin-Bangalore Rajdhani tri-weekly
* Lalu gives 2 pct cut in AC and mail train fares
* Forty-three new trains announced
* Laid 1100 kms of new rail lines
* Bhubaneshwar-New Delhi Rajdhani becomes 4 days a week
* New Delhi-Ahmedabad Rajdhani becomes daily
Monday, February 9, 2009
Sanction and disbursement of Industrial Promotion Subsidy (IPS)
TRADE CIRCULAR
Date: 07.02.2009
No.VAT-2008/ACT/Adm-9/IPS/PSI-129/B-182
Trade Circular No. 8 T of 2009
Sub: 1) Sanction and disbursement of Industrial Promotion Subsidy (IPS) to
Mega Projects and Non-Mega Projects under PSI-2001 & PSI-2007.
2) Reconciliation of IPS by Sales Tax Department.
3) Procedure to be followed by the Department.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Ref: 1) Government Resolution No.PSI-2108 / CR- 36 / Ind-8,
Mantralaya, Mumbai – 32, dated the 3rd December, 2008.
2) Government Resolution No.PSI-2108 / CR- 278 / Ind-8,
Mantralaya, Mumbai – 32, dated the 4th December, 2008.
Gentlemen /Sir /Madam,
BACKGROUND
1. The State Government had declared a new category of Mega Projects under the Package Scheme of Incentives (PSI) 2001 by Government Resolution, I.E. & L. D. dated 02.06.2005. The State Government has also declared the Industrial, Investment and Infrastructure Policy – 2006 so as to ensure sustained industrial growth, further improvement in the investment climate in the State and provide a global competitive edge to the State’s industry and promote employment and balanced regional development. The Policy envisages grant of a customized package of incentives to New Mega Projects. The provisions regarding grant of IPS to Non-Mega Projects are laid down in concerned PSI-2001 and PSI-2007.
2. Similarly, the issue of putting in place a mechanism for sanction and disbursement of Industrial Promotion Subsidy (IPS) for Mega Projects and Non-Mega Units under the Package Scheme of Incentives 2001 and Package Scheme of Incentives 2007 was also under consideration of the Government.
3. The Government has now laid down the procedure for sanction and disbursement of the IPS as per the two Government Resolutions mentioned above.
4. In the said Government Resolutions, there is a provision for re-conciliation of the IPS between the Industries Department and Sales Tax Department. It is further provided in the said Government Notification that the Sales Tax Department will issue an “Identification Certificate” to such eligible unit based on the Eligibility Certificate issued by the Implementing Agency.
5. As per the Government Resolutions, the Industries Department shall disburse 85% of the IPS claim based on the Application of the unit for sanction and disbursement of IPS. The remaining 15% of the IPS shall be disbursed after certification of taxes paid by the applicant; and reconciliation between the Sales Tax Department and the Industries Department. It is, therefore, necessary to carry out the assessment of every such unit in respect of the period covered by the application for sanction and disbursement of IPS. All the concerned officers are directed to carry out the assessment accordingly as per the provisions of law in order to verify that the claim of IPS relates only to products specified in the Eligibility Certificate.
6. It is decided that such eligible units will be granted Identification Certificate as per proforma enclosed. Such an Identification Certificate shall be issued to all Mega, Large and Medium Units by the Joint Commissioner of Sales Tax (HQ)2, Maharashtra State, Mumbai, D-I Wing, 9th Floor, Old Vikrikar Bhavan, Mazgaon, Mumbai -400 010. Whereas the Identification Certificate to Small Scale Units and Micro Units (Non-Mega Projects) shall be issued by the respective Joint Commissioner of Sales Tax (VATAdm.), Division, under whose jurisdiction such Small Scale or Micro Unit is situated.
7. The Industries Department has been requested to forward the copy of the Eligibility Certificate to the Sales Tax Department along with the following information:-
(a) Names and addresses of the Directors, Partners and Proprietors together with the list of addresses of all places of business of the said dealer.
(b) Telephone Nos., E-mail IDs and Web address of the eligible unit.
8. After receipt of Eligibility Certificate and the above mentioned information from the Industry Department, the Sales Tax Department shall issue the Identification Certificate on its own. There is no need for the eligible unit to separately make an application to the Sales Tax Department for grant of Identification Number.
9. The following numbering system may be followed for giving number to the Identification Certificate.
“Certificate No. TIN (12 Digits) _ _ _ _ _ / PSI-2001/ 2007/ Name of District/ Category (Mega/ LIS / MSI/ SSI) / No. _ _ _ __ _, dated: _________ ”
10. All concerned Joint Commissioner of Sales Tax (VAT-Adm.), should maintain record of Certificate issued as was being maintained for the purpose of the earlier Package Schemes of Incentives.
11. This Circular is clarificatory in nature. In case of any doubt the matter may be referred to this office for clarification.
12. You are requested to bring the contents of this Circular to the notice of the members of your Association.
Sd/-
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
C E R T I F I C A T E
READ: (1) G. R. No.__________________, Industries Department
(2) Trade Circular, dated : __________________.
Certificate No. TIN (12 Digits)___________________/PSI-2001/2007/ Name of District /
Category (Mega/ LIS/ MSI/ SSI)/No.______________, dated: _____________.
1. This is to certify that M/s. _____________________________, holder of MVAT TIN ________________, CST TIN ______________________ located at ______________________ _________________________________________________________(Full address of Eligible Unit), is an eligible dealer for the purposes of the Package Scheme of incentives, 2001 / 2007.
2. This identification Certificate is for the purpose of the Package Scheme of Incentives 2001/ 2007.
3. In the event of cancellation or revocation of Eligibility Certificate for whatsoever reason this Certificate shall stand cancelled automatically.
4. The details of the Eligible Unit covered by present certificate are as under
Sr. No. Description Details
1 2 3
1. Name of the Eligible Unit
2. Address
3. Constitution
4. Class of Finished Goods
5. Description of Raw-Materials
6. Eligibility Certificate No. & Date
7. Amount of Industrial Promotion Subsidy
sanctioned as per Eligibility Certificate
8. Validity Period
9. Category of Eligible Unit (Mega /
Large Scale, SSI etc)
10. a. TIN _ __ _ _ _ _ _ _ _ _ _ (12 Digits)
b. Name of the District _ __ _ _ _ _ _ _ _
11. Identification No._ _ __ _ _ _
12. Name & Designation of the Authority issuing
present Certificate.
Joint Commissioner of Sales Tax (VAT),
_ __ _ ___ , Division, _ _ __ _ _ _ _.
DVT/090206Identification Certificate under New COE under 2001, 2007 PSI/P-1/
Date: 07.02.2009
No.VAT-2008/ACT/Adm-9/IPS/PSI-129/B-182
Trade Circular No. 8 T of 2009
Sub: 1) Sanction and disbursement of Industrial Promotion Subsidy (IPS) to
Mega Projects and Non-Mega Projects under PSI-2001 & PSI-2007.
2) Reconciliation of IPS by Sales Tax Department.
3) Procedure to be followed by the Department.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Ref: 1) Government Resolution No.PSI-2108 / CR- 36 / Ind-8,
Mantralaya, Mumbai – 32, dated the 3rd December, 2008.
2) Government Resolution No.PSI-2108 / CR- 278 / Ind-8,
Mantralaya, Mumbai – 32, dated the 4th December, 2008.
Gentlemen /Sir /Madam,
BACKGROUND
1. The State Government had declared a new category of Mega Projects under the Package Scheme of Incentives (PSI) 2001 by Government Resolution, I.E. & L. D. dated 02.06.2005. The State Government has also declared the Industrial, Investment and Infrastructure Policy – 2006 so as to ensure sustained industrial growth, further improvement in the investment climate in the State and provide a global competitive edge to the State’s industry and promote employment and balanced regional development. The Policy envisages grant of a customized package of incentives to New Mega Projects. The provisions regarding grant of IPS to Non-Mega Projects are laid down in concerned PSI-2001 and PSI-2007.
2. Similarly, the issue of putting in place a mechanism for sanction and disbursement of Industrial Promotion Subsidy (IPS) for Mega Projects and Non-Mega Units under the Package Scheme of Incentives 2001 and Package Scheme of Incentives 2007 was also under consideration of the Government.
3. The Government has now laid down the procedure for sanction and disbursement of the IPS as per the two Government Resolutions mentioned above.
4. In the said Government Resolutions, there is a provision for re-conciliation of the IPS between the Industries Department and Sales Tax Department. It is further provided in the said Government Notification that the Sales Tax Department will issue an “Identification Certificate” to such eligible unit based on the Eligibility Certificate issued by the Implementing Agency.
5. As per the Government Resolutions, the Industries Department shall disburse 85% of the IPS claim based on the Application of the unit for sanction and disbursement of IPS. The remaining 15% of the IPS shall be disbursed after certification of taxes paid by the applicant; and reconciliation between the Sales Tax Department and the Industries Department. It is, therefore, necessary to carry out the assessment of every such unit in respect of the period covered by the application for sanction and disbursement of IPS. All the concerned officers are directed to carry out the assessment accordingly as per the provisions of law in order to verify that the claim of IPS relates only to products specified in the Eligibility Certificate.
6. It is decided that such eligible units will be granted Identification Certificate as per proforma enclosed. Such an Identification Certificate shall be issued to all Mega, Large and Medium Units by the Joint Commissioner of Sales Tax (HQ)2, Maharashtra State, Mumbai, D-I Wing, 9th Floor, Old Vikrikar Bhavan, Mazgaon, Mumbai -400 010. Whereas the Identification Certificate to Small Scale Units and Micro Units (Non-Mega Projects) shall be issued by the respective Joint Commissioner of Sales Tax (VATAdm.), Division, under whose jurisdiction such Small Scale or Micro Unit is situated.
7. The Industries Department has been requested to forward the copy of the Eligibility Certificate to the Sales Tax Department along with the following information:-
(a) Names and addresses of the Directors, Partners and Proprietors together with the list of addresses of all places of business of the said dealer.
(b) Telephone Nos., E-mail IDs and Web address of the eligible unit.
8. After receipt of Eligibility Certificate and the above mentioned information from the Industry Department, the Sales Tax Department shall issue the Identification Certificate on its own. There is no need for the eligible unit to separately make an application to the Sales Tax Department for grant of Identification Number.
9. The following numbering system may be followed for giving number to the Identification Certificate.
“Certificate No. TIN (12 Digits) _ _ _ _ _ / PSI-2001/ 2007/ Name of District/ Category (Mega/ LIS / MSI/ SSI) / No. _ _ _ __ _, dated: _________ ”
10. All concerned Joint Commissioner of Sales Tax (VAT-Adm.), should maintain record of Certificate issued as was being maintained for the purpose of the earlier Package Schemes of Incentives.
11. This Circular is clarificatory in nature. In case of any doubt the matter may be referred to this office for clarification.
12. You are requested to bring the contents of this Circular to the notice of the members of your Association.
Sd/-
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
C E R T I F I C A T E
READ: (1) G. R. No.__________________, Industries Department
(2) Trade Circular, dated : __________________.
Certificate No. TIN (12 Digits)___________________/PSI-2001/2007/ Name of District /
Category (Mega/ LIS/ MSI/ SSI)/No.______________, dated: _____________.
1. This is to certify that M/s. _____________________________, holder of MVAT TIN ________________, CST TIN ______________________ located at ______________________ _________________________________________________________(Full address of Eligible Unit), is an eligible dealer for the purposes of the Package Scheme of incentives, 2001 / 2007.
2. This identification Certificate is for the purpose of the Package Scheme of Incentives 2001/ 2007.
3. In the event of cancellation or revocation of Eligibility Certificate for whatsoever reason this Certificate shall stand cancelled automatically.
4. The details of the Eligible Unit covered by present certificate are as under
Sr. No. Description Details
1 2 3
1. Name of the Eligible Unit
2. Address
3. Constitution
4. Class of Finished Goods
5. Description of Raw-Materials
6. Eligibility Certificate No. & Date
7. Amount of Industrial Promotion Subsidy
sanctioned as per Eligibility Certificate
8. Validity Period
9. Category of Eligible Unit (Mega /
Large Scale, SSI etc)
10. a. TIN _ __ _ _ _ _ _ _ _ _ _ (12 Digits)
b. Name of the District _ __ _ _ _ _ _ _ _
11. Identification No._ _ __ _ _ _
12. Name & Designation of the Authority issuing
present Certificate.
Joint Commissioner of Sales Tax (VAT),
_ __ _ ___ , Division, _ _ __ _ _ _ _.
DVT/090206Identification Certificate under New COE under 2001, 2007 PSI/P-1/
Saturday, February 7, 2009
Service Tax Return Preparer Scheme, 2009
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II, SECTION 3, SUB-SECTION (ii) ]MINISTRY OF FINANCE (Department of Revenue)(Central Board of Excise and Customs)
New Delhi, the 3rd February,2009
Notification No. 7/2009-ST
G.S.R. …. (E). In exercise of the powers conferred by sub-section (1) of section 71 of the Finance Act, 1994 (32 of 1994), the Central Board of Excise and Customs hereby frames the following scheme, namely : -
1. Short title, commencement and application.- (1) This scheme may be called the Service Tax Return Preparer Scheme, 2009.
(2) It shall come into force from the date of its publication in the Official Gazette.
(3) Save as otherwise provided in the Scheme, it shall be applicable to all assessees.
2. Definitions.- In this Scheme, unless the context otherwise requires,-
(a) “Act" means the Finance Act, 1994 (32 of 1994);
(b) "Board" means the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963);
(c) "Partner Organisation" means an organisation or agency selected by the Board and with whom an agreement has been entered into by the Board or the Resource Centre authorising it to act as Partner Organisation under this Scheme;
(d) "Resource Centre" means the Directorate General of Service Tax or any other Directorate, as the case may be, designated by the Board to act as the Resource Centre under this Scheme;
(e) “return” means the return required to be furnished by any person under section 70 of the Act;
(f) “rules” means the Service Tax Rules, 1994;
(g) "Service Tax Return Preparer" means any individual who has been issued a Service Tax Return Preparer Certificate and a unique identification number under clause (9) of paragraph 4 of this Scheme by the Partner Organisation to carry on the profession of preparing the returns of income in accordance with the provisions of said Scheme
(h) Words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act.
3. Educational qualification for ServiceTax Return Preparers.-Any individual who has successfully completed education upto senior secondary level, under 10+2 education system, shall be eligible to become a Service Tax Return Preparer.
4. Enrollment, training and certification to persons to act as Service Tax Return Preparers.- (1) For the purpose of enrolment, training and certification to a person to act as Service Tax Return Preparer the Partner Organization shall invite applications from-
(a) any person who has been issued Tax Return Preparer Certificate under the Tax Return Preparer Scheme, 2006, framed under sub-section (1) of section 139B of the Income-tax Act, 1961 (43 of 1961);or
(b) any other Indian citizen having educational qualification referred to in paragraph 3 and desires to act as Service Tax Return Preparer:
Provided that a person who is aged more than thirty-five years on the first day of October immediately preceding the day on which applications are invited shall not be eligible to apply;
(2) Notwithstanding anything contained in this paragraph, the age restriction shall not apply to any person who has superannuated/retired from the Department of Customs and Central Excise;
(3)The person applying to act as Service Tax Return Preparer shall indicate in the application form the preferences for centres where at training may be imparted to him;
(4)The Partner Organisation shall, in accordance with the criteria and conditions laid down by the Resource Centre with the prior approval of the Board, carry out the screening of the applications so received and select the persons to appear in a test for their enrollment;
(5)The Partner Organisation shall carry out a test, if required, for enrollment of persons who have been selected on screening;
(6)The Partner Organisation shall enroll the persons who qualify for enrollment separately for each centre ;
(7)The Partner Organisation shall train the persons so enrolled in accordance with the curriculum provided by the Resource Centre;
(8)The Partner Organisation shall, after completion of training, conduct an examination of the enrolled persons in accordance with the procedure as laid down by the Resource Centre;
(9)The Partner Organisation shall issue a Service Tax Return Preparer Certificate and a unique identification number to the persons who are declared as successful in the examination so conducted;
5. Preparation of and furnishing the service tax return by the Service Tax Return Preparer.- (1) Any assessee, may at his option furnish his return after getting it prepared through a Service Tax Return Preparer:
Provided that an assessee shall not furnish a revised service tax return under rule 7B of the rules through a Service Tax Return Preparer unless he has furnished the original return through such or any other Service Tax Return Preparer:
(2) The Service Tax Return Preparer shall prepare and furnish the return to the Superintendent of Central Excise having jurisdiction over the assessee, or to such other person as may be directed by the Resource Centre with the approval of the Board and hand over the acknowledgement of having furnished the return to the concerned eligible person.
6. Duties and obligations of assessee.-An assesee opting to furnish his return under this Scheme shall-
(a) give his consent to any Service Tax Return Preparer to prepare and furnish his return;
(b) before verifying and signing the return, ensure that the facts mentioned in the return are true and correct;
7. Duties and obligations of the Service Tax Return Preparer.- The Service Tax Return Preparer shall-
(a) prepare the return with due diligence;
(b) affix his signature on the return prepared by him;
(c) furnish the return as specified in sub-paragraph (2) of paragraph 5;
(d) hand over a copy of the return to the person whose return is prepared and furnished by him;
(e) retain a copy of the acknowledgment of having furnished the return;
(f) in respect of returns prepared and furnished by him maintain record of the following, namely:-
(i) the name of assessees whose returns have been prepared and furnished by him during that month;
(ii) the Service Tax Code(STC) number and premises code of such assessees;
(iii) period for which return is filed;
(iv) date of furnishing the return;
(v) authority with whom return is filed;
(vi) amount of tax payable;
(vii) amount of tax paid;
(viii) the fee charged and received by him
(g) furnish a statement of particulars mentioned in item (vi) for every month on or before the seventh day of the immediately following month to the Resource Centre.
8. Selection and responsibilities of the Partner Organisation.- (1) The Board shall select a Partner Organisation to partner with the Resource Centre for implementation of the Scheme
(2)The Partner Organisation shall function under the overall guidance and control of the Resource Centre and follow the instructions issued to it by the Resource Centre from time to time about implementation of the scheme.
(3)The Partner Organisation shall be responsible to carry out the activities which it is required to carry out under paragraph 4 of this Scheme.
(4)The Partner Organisation shall maintain the profile of the Service Tax Return Preparers during their training and monitor their performance as Service Tax Return Preparers.
(5)The Partner Organisation shall perform its functions to the satisfaction of the Resource Centre.
(6)The Board may, on the recommendation of the Resource Centre, terminate the agreement with the Partner Organisation and may -
(a) enter into an agreement with any other Partner Organisation; or(b) assign its functions to the Resource Centre,
if in its opinion, the Partner Organisation has failed to perform its functions properly.
9. Incentive to Service Tax Return Preparers.- An assessee shall pay a fee as may be mutually agreed upon between an assessee and the Service Tax Return Preparer. The Board recommends , as a yardstick, a fee of rupees one thousand rupees per return prepared by the Service Tax Return Preparer.
10. Maintenance of particulars relating to Service Tax Return Preparers.- (1) The Resource Centre shall, in relation to each Service Tax Return Preparer, shall itself maintain the particulars, or direct the Partner Organisation to maintain such particulars, which may be necessary to assess his performance.
(2) The Resource Centre may issue instructions to the Service Tax Return Preparers from time to time.
11. Withdrawal of certificate given to the Service Tax Return Preparer.- (1) The Resource Centre may warn a Service Tax Return Preparer for the deficiencies in his work and his misconduct, and may proceed for cancellation of his certificate in any one or more of the following circumstances, namely,-
(i) if he fails to give a copy of the return to the assessee;(ii) if he prepares a return but fails to affix his signature thereon;(iii) if he fails to furnish his name and unique identification number in the return prepared by him; (iv) if he fails to enter any information made available to him by the assessee, correctly in the return prepared by him;(v) if he makes repeated mistakes relating to computation of income in the returns prepared by him; (vi) if he is engaged in any financial irregularity, forgery or fraud;(vii) if he willfully attempts to furnish incorrect information in return
(viii) if he is involved in any other irregularity which, in the opinion of the Chief Commissioner or the Commissioner of Central Excise, is grave in nature; (ix) if he fails to comply with the directions issued by the Resource Centre from time to time; (x) if he fails to upgrade his skills as required by the Resource Centre from time to time.
(2) A Service Tax Return Preparer may continue to act as such, unless-
(i) the Certificate issued to him under this Scheme is suspended or withdrawn by the Resource Centre; or
(ii) this Scheme is withdrawn by the Board.
12. Responsibilities and functions of the Resource Centre.- (1) The Resource Centre shall be responsible for day to day administration of the Scheme.
(2) The functions of the Resource Centre shall include-
(i) to specify, with prior approval of the Board,
(a) the number of persons to be enrolled during a financial year for training to act as Service Tax Return Preparers; (b) the number of centres for training and their location where at training to be imparted during a financial year; (c) the number of persons to be trained at each centre for training during a financial year;
(ii) to specify the curriculum and all other matters relating to the training of Service Tax Return Preparers;
(iii) maintain the particulars relating to the Service Tax Return Preparers as required in paragraph 10 of this Scheme;
(iv) any other function which is assigned to it by the Board for the purposes of implementation of the Scheme.
[ F.No. 137/318/2007-CX.4 ]
(Gautam Bhattacharya)
Joint Secretary to Government of India
New Delhi, the 3rd February,2009
Notification No. 7/2009-ST
G.S.R. …. (E). In exercise of the powers conferred by sub-section (1) of section 71 of the Finance Act, 1994 (32 of 1994), the Central Board of Excise and Customs hereby frames the following scheme, namely : -
1. Short title, commencement and application.- (1) This scheme may be called the Service Tax Return Preparer Scheme, 2009.
(2) It shall come into force from the date of its publication in the Official Gazette.
(3) Save as otherwise provided in the Scheme, it shall be applicable to all assessees.
2. Definitions.- In this Scheme, unless the context otherwise requires,-
(a) “Act" means the Finance Act, 1994 (32 of 1994);
(b) "Board" means the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963);
(c) "Partner Organisation" means an organisation or agency selected by the Board and with whom an agreement has been entered into by the Board or the Resource Centre authorising it to act as Partner Organisation under this Scheme;
(d) "Resource Centre" means the Directorate General of Service Tax or any other Directorate, as the case may be, designated by the Board to act as the Resource Centre under this Scheme;
(e) “return” means the return required to be furnished by any person under section 70 of the Act;
(f) “rules” means the Service Tax Rules, 1994;
(g) "Service Tax Return Preparer" means any individual who has been issued a Service Tax Return Preparer Certificate and a unique identification number under clause (9) of paragraph 4 of this Scheme by the Partner Organisation to carry on the profession of preparing the returns of income in accordance with the provisions of said Scheme
(h) Words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act.
3. Educational qualification for ServiceTax Return Preparers.-Any individual who has successfully completed education upto senior secondary level, under 10+2 education system, shall be eligible to become a Service Tax Return Preparer.
4. Enrollment, training and certification to persons to act as Service Tax Return Preparers.- (1) For the purpose of enrolment, training and certification to a person to act as Service Tax Return Preparer the Partner Organization shall invite applications from-
(a) any person who has been issued Tax Return Preparer Certificate under the Tax Return Preparer Scheme, 2006, framed under sub-section (1) of section 139B of the Income-tax Act, 1961 (43 of 1961);or
(b) any other Indian citizen having educational qualification referred to in paragraph 3 and desires to act as Service Tax Return Preparer:
Provided that a person who is aged more than thirty-five years on the first day of October immediately preceding the day on which applications are invited shall not be eligible to apply;
(2) Notwithstanding anything contained in this paragraph, the age restriction shall not apply to any person who has superannuated/retired from the Department of Customs and Central Excise;
(3)The person applying to act as Service Tax Return Preparer shall indicate in the application form the preferences for centres where at training may be imparted to him;
(4)The Partner Organisation shall, in accordance with the criteria and conditions laid down by the Resource Centre with the prior approval of the Board, carry out the screening of the applications so received and select the persons to appear in a test for their enrollment;
(5)The Partner Organisation shall carry out a test, if required, for enrollment of persons who have been selected on screening;
(6)The Partner Organisation shall enroll the persons who qualify for enrollment separately for each centre ;
(7)The Partner Organisation shall train the persons so enrolled in accordance with the curriculum provided by the Resource Centre;
(8)The Partner Organisation shall, after completion of training, conduct an examination of the enrolled persons in accordance with the procedure as laid down by the Resource Centre;
(9)The Partner Organisation shall issue a Service Tax Return Preparer Certificate and a unique identification number to the persons who are declared as successful in the examination so conducted;
5. Preparation of and furnishing the service tax return by the Service Tax Return Preparer.- (1) Any assessee, may at his option furnish his return after getting it prepared through a Service Tax Return Preparer:
Provided that an assessee shall not furnish a revised service tax return under rule 7B of the rules through a Service Tax Return Preparer unless he has furnished the original return through such or any other Service Tax Return Preparer:
(2) The Service Tax Return Preparer shall prepare and furnish the return to the Superintendent of Central Excise having jurisdiction over the assessee, or to such other person as may be directed by the Resource Centre with the approval of the Board and hand over the acknowledgement of having furnished the return to the concerned eligible person.
6. Duties and obligations of assessee.-An assesee opting to furnish his return under this Scheme shall-
(a) give his consent to any Service Tax Return Preparer to prepare and furnish his return;
(b) before verifying and signing the return, ensure that the facts mentioned in the return are true and correct;
7. Duties and obligations of the Service Tax Return Preparer.- The Service Tax Return Preparer shall-
(a) prepare the return with due diligence;
(b) affix his signature on the return prepared by him;
(c) furnish the return as specified in sub-paragraph (2) of paragraph 5;
(d) hand over a copy of the return to the person whose return is prepared and furnished by him;
(e) retain a copy of the acknowledgment of having furnished the return;
(f) in respect of returns prepared and furnished by him maintain record of the following, namely:-
(i) the name of assessees whose returns have been prepared and furnished by him during that month;
(ii) the Service Tax Code(STC) number and premises code of such assessees;
(iii) period for which return is filed;
(iv) date of furnishing the return;
(v) authority with whom return is filed;
(vi) amount of tax payable;
(vii) amount of tax paid;
(viii) the fee charged and received by him
(g) furnish a statement of particulars mentioned in item (vi) for every month on or before the seventh day of the immediately following month to the Resource Centre.
8. Selection and responsibilities of the Partner Organisation.- (1) The Board shall select a Partner Organisation to partner with the Resource Centre for implementation of the Scheme
(2)The Partner Organisation shall function under the overall guidance and control of the Resource Centre and follow the instructions issued to it by the Resource Centre from time to time about implementation of the scheme.
(3)The Partner Organisation shall be responsible to carry out the activities which it is required to carry out under paragraph 4 of this Scheme.
(4)The Partner Organisation shall maintain the profile of the Service Tax Return Preparers during their training and monitor their performance as Service Tax Return Preparers.
(5)The Partner Organisation shall perform its functions to the satisfaction of the Resource Centre.
(6)The Board may, on the recommendation of the Resource Centre, terminate the agreement with the Partner Organisation and may -
(a) enter into an agreement with any other Partner Organisation; or(b) assign its functions to the Resource Centre,
if in its opinion, the Partner Organisation has failed to perform its functions properly.
9. Incentive to Service Tax Return Preparers.- An assessee shall pay a fee as may be mutually agreed upon between an assessee and the Service Tax Return Preparer. The Board recommends , as a yardstick, a fee of rupees one thousand rupees per return prepared by the Service Tax Return Preparer.
10. Maintenance of particulars relating to Service Tax Return Preparers.- (1) The Resource Centre shall, in relation to each Service Tax Return Preparer, shall itself maintain the particulars, or direct the Partner Organisation to maintain such particulars, which may be necessary to assess his performance.
(2) The Resource Centre may issue instructions to the Service Tax Return Preparers from time to time.
11. Withdrawal of certificate given to the Service Tax Return Preparer.- (1) The Resource Centre may warn a Service Tax Return Preparer for the deficiencies in his work and his misconduct, and may proceed for cancellation of his certificate in any one or more of the following circumstances, namely,-
(i) if he fails to give a copy of the return to the assessee;(ii) if he prepares a return but fails to affix his signature thereon;(iii) if he fails to furnish his name and unique identification number in the return prepared by him; (iv) if he fails to enter any information made available to him by the assessee, correctly in the return prepared by him;(v) if he makes repeated mistakes relating to computation of income in the returns prepared by him; (vi) if he is engaged in any financial irregularity, forgery or fraud;(vii) if he willfully attempts to furnish incorrect information in return
(viii) if he is involved in any other irregularity which, in the opinion of the Chief Commissioner or the Commissioner of Central Excise, is grave in nature; (ix) if he fails to comply with the directions issued by the Resource Centre from time to time; (x) if he fails to upgrade his skills as required by the Resource Centre from time to time.
(2) A Service Tax Return Preparer may continue to act as such, unless-
(i) the Certificate issued to him under this Scheme is suspended or withdrawn by the Resource Centre; or
(ii) this Scheme is withdrawn by the Board.
12. Responsibilities and functions of the Resource Centre.- (1) The Resource Centre shall be responsible for day to day administration of the Scheme.
(2) The functions of the Resource Centre shall include-
(i) to specify, with prior approval of the Board,
(a) the number of persons to be enrolled during a financial year for training to act as Service Tax Return Preparers; (b) the number of centres for training and their location where at training to be imparted during a financial year; (c) the number of persons to be trained at each centre for training during a financial year;
(ii) to specify the curriculum and all other matters relating to the training of Service Tax Return Preparers;
(iii) maintain the particulars relating to the Service Tax Return Preparers as required in paragraph 10 of this Scheme;
(iv) any other function which is assigned to it by the Board for the purposes of implementation of the Scheme.
[ F.No. 137/318/2007-CX.4 ]
(Gautam Bhattacharya)
Joint Secretary to Government of India
Submission of copies of TIN certificate etc.
TRADE CIRCULAR
Dated - 05.02.2009
No.MVAT/Return Br. Mumbai/ Banks /
Trade Circular No. 7 T of 2009
Sub- Submission of copies of TIN certificate/ TIN Allotment letter/ E-services enrollment acknowledgment to the bank along with returns/ challans.
Ref: Trade Circular No. 42T of 2008.
Gentlemen/Sir/Madam,
Vide above referred Trade Circular, the Sales Tax Department ("the S.T.D.") barred the unregistered dealers/ persons/employers from directly paying their tax/ interest/ penalty/composition money/fees/fine/ amount forfeited/ amount of TDS into the Government Treasury. The S.T.D advised the authorized banks not to accept tax/ interest/ penalty/composition money/fees/fine/amount forfeited/ amount of TDS from the unregistered dealers/ persons/employers. The banks were also advised to check the authenticity of TINs, as they would not be able to upload their e-scrolls, if they accept invalid TINs. For this purpose, the banks have been provided with a MOD-97 logic.
2. Most of the banks have, however, informed the S.T.D. that they are not in a position to immediately verify the authenticity of TINs, as they do not enter the data in their system at the time of accepting returns/challans. The R.B.I, and some banks have in fact started insisting for the TIN Certificates/Registration Certificates from the dealers who wish to pay their taxes.
3. Looking at the convenience of the banks as well as the Trade, it has been decided on the administrative grounds that the dealers should carry a photocopy of Certificate of TIN/ TIN Allotment Letter/ E-services Enrollment Acknowledgment/ Certificate of Registration /Certificate of Enrollment/ Courtesy Letter /Any Order issued by the S.T.D. along with the returns/ challans henceforth, so that the banks would be able to verify their TINs/R.C.Nos./ E.C Nos.
4. Some dealers who were earlier registered under the repealed Act viz. The Bombay Sales Tax Act ,1959, The Maharashtra Sales Tax on the Transfer of property in goods involved in the execution of Works Contracts (Re-enacted) Act, 1989, The Maharashtra Sales Tax on the Transfer of the Right to use any goods for any Purpose Act, 1985 and The Bombay Sales of Motor Spirit Taxation Act,1958, but have not obtained registration under MVAT Act , may require to make payment relating to Pre-VAT period. These dealers should also attach the copy of their Registration Certificates under the repealed Act. However. some dealers may not be in possession of earlier Registration Certificates. These dealers may submit copy of any order/ notice /documents showing their registration number under the earlier act.
5. This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification. You are requested to bring the contents of this circular to the notice of all the members of your association.
Yours faithfully,
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
Dated - 05.02.2009
No.MVAT/Return Br. Mumbai/ Banks /
Trade Circular No. 7 T of 2009
Sub- Submission of copies of TIN certificate/ TIN Allotment letter/ E-services enrollment acknowledgment to the bank along with returns/ challans.
Ref: Trade Circular No. 42T of 2008.
Gentlemen/Sir/Madam,
Vide above referred Trade Circular, the Sales Tax Department ("the S.T.D.") barred the unregistered dealers/ persons/employers from directly paying their tax/ interest/ penalty/composition money/fees/fine/ amount forfeited/ amount of TDS into the Government Treasury. The S.T.D advised the authorized banks not to accept tax/ interest/ penalty/composition money/fees/fine/amount forfeited/ amount of TDS from the unregistered dealers/ persons/employers. The banks were also advised to check the authenticity of TINs, as they would not be able to upload their e-scrolls, if they accept invalid TINs. For this purpose, the banks have been provided with a MOD-97 logic.
2. Most of the banks have, however, informed the S.T.D. that they are not in a position to immediately verify the authenticity of TINs, as they do not enter the data in their system at the time of accepting returns/challans. The R.B.I, and some banks have in fact started insisting for the TIN Certificates/Registration Certificates from the dealers who wish to pay their taxes.
3. Looking at the convenience of the banks as well as the Trade, it has been decided on the administrative grounds that the dealers should carry a photocopy of Certificate of TIN/ TIN Allotment Letter/ E-services Enrollment Acknowledgment/ Certificate of Registration /Certificate of Enrollment/ Courtesy Letter /Any Order issued by the S.T.D. along with the returns/ challans henceforth, so that the banks would be able to verify their TINs/R.C.Nos./ E.C Nos.
4. Some dealers who were earlier registered under the repealed Act viz. The Bombay Sales Tax Act ,1959, The Maharashtra Sales Tax on the Transfer of property in goods involved in the execution of Works Contracts (Re-enacted) Act, 1989, The Maharashtra Sales Tax on the Transfer of the Right to use any goods for any Purpose Act, 1985 and The Bombay Sales of Motor Spirit Taxation Act,1958, but have not obtained registration under MVAT Act , may require to make payment relating to Pre-VAT period. These dealers should also attach the copy of their Registration Certificates under the repealed Act. However. some dealers may not be in possession of earlier Registration Certificates. These dealers may submit copy of any order/ notice /documents showing their registration number under the earlier act.
5. This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification. You are requested to bring the contents of this circular to the notice of all the members of your association.
Yours faithfully,
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
Tuesday, February 3, 2009
Levy of service tax on educational institutions
Circular No. 107/01/2009 – ST
F.No137/23/2007-CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
***
New Delhi, dated 28th January 2009
Subject: Levy of service tax on educational institutions- regarding
****************
Various educational institutions impart training and conduct courses in different fields. Many of these institutions issue certificates/degrees/diplomas to the candidates upon their successfully completing such courses. Apart from government run or aided institutes imparting education, training or coaching, there are several private run institutes or centers, which impart education/ training/ coaching, teach skills, help in preparing for competitive examinations or run classes on various subjects. Service tax is leviable on services provided by ‘commercial training and coaching centers’, since the year 2003. Over a period of time, certain doubts /disputes have arisen in the field in respect of the chargeability of service tax on the fees/ charges collected by such institutes and education centers. Some of such issues have been discussed below.
2. COMMERCIAL NATURE OF INSTITUTE
The first issue arises from the very name i.e. Commercial training or coaching center’. Many service providers argue that the word ‘commercial’ appearing in the aforementioned phrase, suggests that to fall under this definition, the establishment or the institute must be commercial (i.e. having profit motive) in nature. It is argued that institutes which are run by charitable trusts or on no-profit basis would not fall within the phrase commercial training or coaching center and none of their activities would fall under the taxable service. This argument is clearly erroneous. As the phrase ‘commercial training or coaching center ‘has been defined in a statute, there is no scope to add or delete words while interpreting the same. The definition commercial training or coaching center has no mention that such institute must have ‘commercial’ (i.e. profit making) intent or motive. Therefore, there is no reason to give a restricted meaning to the phrase. Secondly, service tax, unlike direct taxes, is chargeable on the gross amount received towards the service charges, irrespective of whether the venture is ‘profit making, loss making or charity oriented’ in its motive or its outcome. The word “Commercial” used in the phrase is with reference to the activity of training or coaching and not to the nature or activity of the institute providing the training or coaching. Thus, services provided by all institutes or establishments, which fulfills the requirements of definition, are leviable to service tax.
3. POST SCHOOL EDUCATION
3.1 Determination of taxability of education, other than school education is more complex and poses more questions. This is because, it covers an entire gamut of educational courses, such as formal higher education (i.e. bachelors, masters, doctoral, post doctoral course), specialized education, vocational education, language (including foreign language) courses etc. These vary in terms of their content; purpose; scope; and the type of institutes or establishments, which impart them.
3.2 The system of statutory recognition of educational establishments or institutions in India is still in the state of evolution. As regards university education, University Grants Commission (UGC) is the apex regulating body. As per the objects of the University Grants Commission Act, 1956 (which established UGC) the said Act is ‘to make provision for the co-ordination and determination of standards in Universities and for that purpose, to establish a University Grants Commission’.
·
As per the definition, in terms of Section 2(f) of the Act, a University means a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, and includes any such institution as may, in consultation with the University concerned, be recognized by the Commission in accordance with the regulations made in this behalf under this Act. . Therefore, all universities which are a creature of a State or Union Act fall within this definition of ‘University’.
· Further, Section 3 of the Act, explains the scope of a ‘deemed university’ and defines that the Central Government may, on the advice of the Commission, declare by notification in the Official Gazette, that any institution for higher education, other than a University, shall be deemed to be a University for the purposes of this Act, and on such a declaration being made, all the provisions of this Act shall apply to such institution as if it were a University within the meaning of clause (f) of section 2.
· Also, UGC, with the approval of Central Government and under the Recognition of College in Terms of Regulations, 1974 framed under the UGC Act, can grant recognition to a college or institution run by a trust, a registered society or a body corporate or body incorporated under Central or state Act as an institution affiliated to or form as constituent member with a university, providing education up to a bachelors degree, masters degree or diploma of a duration of minimum one academic year
· As per National Policy on Education, 1986, a scheme of autonomous colleges was promoted. In the autonomous colleges, whereas the degree continues to be awarded by the university, the name of college is also included. These colleges develop and submit new courses of study for approval by the university. These autonomous colleges are fully responsible for the conduct of examination.
As all these institutions or establishment are either created or recognized in terms of the power conferred by statutes, they would fall in the category of institutes/ establishments which issues diploma or certificate recognized by the law for the time being in force. As regards issuance of degree, section 22(1) of the said Act, provides for right of conferring or granting degrees only by a ‘university’ (as defined above) or a ‘deemed university’ (as defined above).
3.3 In addition, for recognition of professional courses, promotion of professional institutions and providing grants to various programmes, a number of ‘professional councils (Such as All India Council for Technical Education-AICTE, Medical Council of India-MCI, Indian Council for Agricultural Research-ICAR, Bar Council of India-BCI) have been created through independent Union Acts. Since, inter alia these councils are entrusted with ensuring norms and standards of the courses, physical and instructional facilities, undertaking assessment etc., they have also been provided with powers to make subordinate legislations (i.e. through notifications, circulars, rules) that the institutions or the establishments within their ambit must abide. In case of default, the councils have the power to derecognize an institution or establishment or a particular course being conducted by them, even if they are recognized as a university, a deemed university or an affiliated college. If an institution or establishment is derecognized, then such institution or establishment cannot be called to be an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. With the result, the courses conducted would fall under the ambit of ‘commercial training or coaching centers’ and would be charged to tax. It may however, be noted that for exercising such power, there should be a valid rule / notification / circular, prescribing the minimum requirements or standards as also the consequences of default.
3.4 All India Council for Technical Education-AICTE, was started in 1945 with the objectives stated above. Based on the recommendations of a ‘National Working Group’ (constituted by the Government of India) that AICTE be vested with the necessary statutory authority, it was given legislative support through an Act, called the AICTE Act, 1987. AICTE, using the powers conferred on it through 1987 Act, issued the ‘AICTE (Grant of Approval for Starting New Technical Institutions, Introduction of Courses or Programme and Approval), Regulation 1994. Theses were amended in the years 1997 and 2000. Under Regulation 4 (Requirement of Grant of approval) of these Regulations, AICTE prescribed that,-
“After the commencement of these regulations,-
a. No new Technical Institution or University Technical Department shall be started; or
b. No course or programme shall be introduced by any Technical Institution, University including a Deemed University or University Department or Collage; or
c. No Technical Institution, University or Deemed University or University Department or College shall continue to admit students for Degree or Diploma course; or
d. No approved intake capacity of seats shall be increased or varied;
Except with the approval of the council.
The powers to issue regulations for approval are conferred on AICTE under Section 23 read with Section 10 of the AICTE Act.
3.5 In 2003, when service tax was first imposed on commercial training and coaching centers, the AICTE regulations required that for (a) starting or establishing new technical institutions; (b) introduction of additional programmes; or (c) increase in ‘intake’ in the existing programmes of AICTE approved institutions, a ‘no objection certificate’ from the concerned State government /UT would be required (notification F.37-3/Legal (iii)/2002 dated 10.09.2003). This notification does not prescribe any certification for existing institutes or establishments, which did not introduce any additional programme or did not increase in ‘intake’ in an existing programme. Thus, at that stage, not having a AICTE approval for such existing institution or establishment did not make them ineligible for being an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. Thus, if otherwise recognized or accepted, this sole reason of absence of AICTE approval did not cause such institutions or establishments to be within the service tax net. On 6.01.2005, vide notification No. F.37-3/Legal/2004, the previous AICTE Regulations was replaced by new Regulations. These Regulations expanded the scope and stated (Regulation No. 5) that no new technical institution of the Government, Government Aided or Private institution shall be introduced; no new courses or programs in technical education shall be introduced or no variation of intake shall be effected or no existing technical institution of the Government, Government Aided or Private institution shall conduct any technical course without prior approval of the council. The Regulation No. 7 of these Regulations also stated that the council shall, in every year publish the names of approved technical institutions, conducting course in technical education, the course and programs approved by the council and the number of seats permitted for each course etc. These Regulations were again superseded by another set of Regulations issued vide Not. No. F-37-3/Legal/2004 dated 28.11.2005, where the requirement of grant of approval by AICTE was further elaborated to specifically include universities, deemed universities and any admission authority etc. Vide notification No. F-2-1/2006 U.3 (A) dated 5.04.2006 the Central Government issued clarification regarding the role and the powers of AICTE and UGC with respect to ‘Deemed to be University’. From the above it emerges that from the year 2005 onwards, a technical institution or establishment (which is otherwise recognized being a university, or affiliate college) not having AICTE approval cannot be called to be the one issuing any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force and thus be within the ambit of service tax. However ‘Deemed to be University’ have been exempt from this requirement. As per the said notification for the institutes ‘Deemed to be University’, it is not a pre-requisite to obtain the approval of AICTE to start any programme in technical or management education leading to an award, including degrees in disciplines covered under the AICTE Act, 1987. However, such institutes are required to ensure the maintenance of the minimum standards prescribed by the AICTE for various courses under the jurisdiction of the said council.
3.6 Similar would be the situation in case of other Statutory Councils.
3.7 A related issue is, that since the concept of recognition of an educational qualification in India has been dynamic in nature (i.e. the degree/ diploma/ certificate an institute or establishment may be recognized by the law at one time and not recognized at other, due to change in legal provisions) the taxability of the courses conducted would depend on the legal status of such institute or establishment at the point of time when such service is provided (i.e. course is conducted). It cannot be said that once recognized an institute or establishment would remain so even in future or was so in the past.
3.8 Many a time private institutes conduct courses and issue diplomas or certificates in collaboration with certain foreign institutes universities. In many cases private enterprises conduct campus interviews of the students of such institutes and offer them jobs. Such certificates / diplomas may be accepted for higher education abroad. However, such a certificate / diploma cannot be called as the one ‘recognized by the law for the time being in force’ unless such a diploma/ certificate has been specifically recognized by the statutory authorities such as UGC, AICTE. Consequently, such institutes would not fall under the exempted category and would be subjected to tax.
4. VOCATIONAL TRAINING INSTITUTE
The vocational training institutes are exempted from service tax vide notification no. 24/2004-ST, dated 10.09.2004 (as amended). By definition, such institutes should provide training or coaching that imparts skill to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching. Disputes have arisen in respect of institutes that offer general course on improving communication skills, personality development, how to be effective in group discussions or personal interviews, general grooming and finishing etc. It is claimed that such training or coaching improves the job prospects of a candidate and therefore they are eligible for exemption as ‘vocational training institutes. However, a careful reading of the definition shows that the exemption is available only to such institutes that impart training to enable the trainee to seek employment or self-employment. The courses referred to above do not satisfy this condition because on their own such courses do not prepare a candidate to take up employment or self-employment directly after such training or coaching. They only improve the chances of success for a candidate who already has the required skill. Therefore, such institutes are not covered under the exemption.
5. CONCLUSION
All pending cases may be disposed of accordingly. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned.
(Gautam Bhattacharya)
Commissioner (Service Tax)
CBEC, New Delhi
F.No137/23/2007-CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
***
New Delhi, dated 28th January 2009
Subject: Levy of service tax on educational institutions- regarding
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Various educational institutions impart training and conduct courses in different fields. Many of these institutions issue certificates/degrees/diplomas to the candidates upon their successfully completing such courses. Apart from government run or aided institutes imparting education, training or coaching, there are several private run institutes or centers, which impart education/ training/ coaching, teach skills, help in preparing for competitive examinations or run classes on various subjects. Service tax is leviable on services provided by ‘commercial training and coaching centers’, since the year 2003. Over a period of time, certain doubts /disputes have arisen in the field in respect of the chargeability of service tax on the fees/ charges collected by such institutes and education centers. Some of such issues have been discussed below.
2. COMMERCIAL NATURE OF INSTITUTE
The first issue arises from the very name i.e. Commercial training or coaching center’. Many service providers argue that the word ‘commercial’ appearing in the aforementioned phrase, suggests that to fall under this definition, the establishment or the institute must be commercial (i.e. having profit motive) in nature. It is argued that institutes which are run by charitable trusts or on no-profit basis would not fall within the phrase commercial training or coaching center and none of their activities would fall under the taxable service. This argument is clearly erroneous. As the phrase ‘commercial training or coaching center ‘has been defined in a statute, there is no scope to add or delete words while interpreting the same. The definition commercial training or coaching center has no mention that such institute must have ‘commercial’ (i.e. profit making) intent or motive. Therefore, there is no reason to give a restricted meaning to the phrase. Secondly, service tax, unlike direct taxes, is chargeable on the gross amount received towards the service charges, irrespective of whether the venture is ‘profit making, loss making or charity oriented’ in its motive or its outcome. The word “Commercial” used in the phrase is with reference to the activity of training or coaching and not to the nature or activity of the institute providing the training or coaching. Thus, services provided by all institutes or establishments, which fulfills the requirements of definition, are leviable to service tax.
3. POST SCHOOL EDUCATION
3.1 Determination of taxability of education, other than school education is more complex and poses more questions. This is because, it covers an entire gamut of educational courses, such as formal higher education (i.e. bachelors, masters, doctoral, post doctoral course), specialized education, vocational education, language (including foreign language) courses etc. These vary in terms of their content; purpose; scope; and the type of institutes or establishments, which impart them.
3.2 The system of statutory recognition of educational establishments or institutions in India is still in the state of evolution. As regards university education, University Grants Commission (UGC) is the apex regulating body. As per the objects of the University Grants Commission Act, 1956 (which established UGC) the said Act is ‘to make provision for the co-ordination and determination of standards in Universities and for that purpose, to establish a University Grants Commission’.
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As per the definition, in terms of Section 2(f) of the Act, a University means a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, and includes any such institution as may, in consultation with the University concerned, be recognized by the Commission in accordance with the regulations made in this behalf under this Act. . Therefore, all universities which are a creature of a State or Union Act fall within this definition of ‘University’.
· Further, Section 3 of the Act, explains the scope of a ‘deemed university’ and defines that the Central Government may, on the advice of the Commission, declare by notification in the Official Gazette, that any institution for higher education, other than a University, shall be deemed to be a University for the purposes of this Act, and on such a declaration being made, all the provisions of this Act shall apply to such institution as if it were a University within the meaning of clause (f) of section 2.
· Also, UGC, with the approval of Central Government and under the Recognition of College in Terms of Regulations, 1974 framed under the UGC Act, can grant recognition to a college or institution run by a trust, a registered society or a body corporate or body incorporated under Central or state Act as an institution affiliated to or form as constituent member with a university, providing education up to a bachelors degree, masters degree or diploma of a duration of minimum one academic year
· As per National Policy on Education, 1986, a scheme of autonomous colleges was promoted. In the autonomous colleges, whereas the degree continues to be awarded by the university, the name of college is also included. These colleges develop and submit new courses of study for approval by the university. These autonomous colleges are fully responsible for the conduct of examination.
As all these institutions or establishment are either created or recognized in terms of the power conferred by statutes, they would fall in the category of institutes/ establishments which issues diploma or certificate recognized by the law for the time being in force. As regards issuance of degree, section 22(1) of the said Act, provides for right of conferring or granting degrees only by a ‘university’ (as defined above) or a ‘deemed university’ (as defined above).
3.3 In addition, for recognition of professional courses, promotion of professional institutions and providing grants to various programmes, a number of ‘professional councils (Such as All India Council for Technical Education-AICTE, Medical Council of India-MCI, Indian Council for Agricultural Research-ICAR, Bar Council of India-BCI) have been created through independent Union Acts. Since, inter alia these councils are entrusted with ensuring norms and standards of the courses, physical and instructional facilities, undertaking assessment etc., they have also been provided with powers to make subordinate legislations (i.e. through notifications, circulars, rules) that the institutions or the establishments within their ambit must abide. In case of default, the councils have the power to derecognize an institution or establishment or a particular course being conducted by them, even if they are recognized as a university, a deemed university or an affiliated college. If an institution or establishment is derecognized, then such institution or establishment cannot be called to be an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. With the result, the courses conducted would fall under the ambit of ‘commercial training or coaching centers’ and would be charged to tax. It may however, be noted that for exercising such power, there should be a valid rule / notification / circular, prescribing the minimum requirements or standards as also the consequences of default.
3.4 All India Council for Technical Education-AICTE, was started in 1945 with the objectives stated above. Based on the recommendations of a ‘National Working Group’ (constituted by the Government of India) that AICTE be vested with the necessary statutory authority, it was given legislative support through an Act, called the AICTE Act, 1987. AICTE, using the powers conferred on it through 1987 Act, issued the ‘AICTE (Grant of Approval for Starting New Technical Institutions, Introduction of Courses or Programme and Approval), Regulation 1994. Theses were amended in the years 1997 and 2000. Under Regulation 4 (Requirement of Grant of approval) of these Regulations, AICTE prescribed that,-
“After the commencement of these regulations,-
a. No new Technical Institution or University Technical Department shall be started; or
b. No course or programme shall be introduced by any Technical Institution, University including a Deemed University or University Department or Collage; or
c. No Technical Institution, University or Deemed University or University Department or College shall continue to admit students for Degree or Diploma course; or
d. No approved intake capacity of seats shall be increased or varied;
Except with the approval of the council.
The powers to issue regulations for approval are conferred on AICTE under Section 23 read with Section 10 of the AICTE Act.
3.5 In 2003, when service tax was first imposed on commercial training and coaching centers, the AICTE regulations required that for (a) starting or establishing new technical institutions; (b) introduction of additional programmes; or (c) increase in ‘intake’ in the existing programmes of AICTE approved institutions, a ‘no objection certificate’ from the concerned State government /UT would be required (notification F.37-3/Legal (iii)/2002 dated 10.09.2003). This notification does not prescribe any certification for existing institutes or establishments, which did not introduce any additional programme or did not increase in ‘intake’ in an existing programme. Thus, at that stage, not having a AICTE approval for such existing institution or establishment did not make them ineligible for being an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force. Thus, if otherwise recognized or accepted, this sole reason of absence of AICTE approval did not cause such institutions or establishments to be within the service tax net. On 6.01.2005, vide notification No. F.37-3/Legal/2004, the previous AICTE Regulations was replaced by new Regulations. These Regulations expanded the scope and stated (Regulation No. 5) that no new technical institution of the Government, Government Aided or Private institution shall be introduced; no new courses or programs in technical education shall be introduced or no variation of intake shall be effected or no existing technical institution of the Government, Government Aided or Private institution shall conduct any technical course without prior approval of the council. The Regulation No. 7 of these Regulations also stated that the council shall, in every year publish the names of approved technical institutions, conducting course in technical education, the course and programs approved by the council and the number of seats permitted for each course etc. These Regulations were again superseded by another set of Regulations issued vide Not. No. F-37-3/Legal/2004 dated 28.11.2005, where the requirement of grant of approval by AICTE was further elaborated to specifically include universities, deemed universities and any admission authority etc. Vide notification No. F-2-1/2006 U.3 (A) dated 5.04.2006 the Central Government issued clarification regarding the role and the powers of AICTE and UGC with respect to ‘Deemed to be University’. From the above it emerges that from the year 2005 onwards, a technical institution or establishment (which is otherwise recognized being a university, or affiliate college) not having AICTE approval cannot be called to be the one issuing any certificate or diploma or degree or any educational qualification recognized by the law for the time being in force and thus be within the ambit of service tax. However ‘Deemed to be University’ have been exempt from this requirement. As per the said notification for the institutes ‘Deemed to be University’, it is not a pre-requisite to obtain the approval of AICTE to start any programme in technical or management education leading to an award, including degrees in disciplines covered under the AICTE Act, 1987. However, such institutes are required to ensure the maintenance of the minimum standards prescribed by the AICTE for various courses under the jurisdiction of the said council.
3.6 Similar would be the situation in case of other Statutory Councils.
3.7 A related issue is, that since the concept of recognition of an educational qualification in India has been dynamic in nature (i.e. the degree/ diploma/ certificate an institute or establishment may be recognized by the law at one time and not recognized at other, due to change in legal provisions) the taxability of the courses conducted would depend on the legal status of such institute or establishment at the point of time when such service is provided (i.e. course is conducted). It cannot be said that once recognized an institute or establishment would remain so even in future or was so in the past.
3.8 Many a time private institutes conduct courses and issue diplomas or certificates in collaboration with certain foreign institutes universities. In many cases private enterprises conduct campus interviews of the students of such institutes and offer them jobs. Such certificates / diplomas may be accepted for higher education abroad. However, such a certificate / diploma cannot be called as the one ‘recognized by the law for the time being in force’ unless such a diploma/ certificate has been specifically recognized by the statutory authorities such as UGC, AICTE. Consequently, such institutes would not fall under the exempted category and would be subjected to tax.
4. VOCATIONAL TRAINING INSTITUTE
The vocational training institutes are exempted from service tax vide notification no. 24/2004-ST, dated 10.09.2004 (as amended). By definition, such institutes should provide training or coaching that imparts skill to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching. Disputes have arisen in respect of institutes that offer general course on improving communication skills, personality development, how to be effective in group discussions or personal interviews, general grooming and finishing etc. It is claimed that such training or coaching improves the job prospects of a candidate and therefore they are eligible for exemption as ‘vocational training institutes. However, a careful reading of the definition shows that the exemption is available only to such institutes that impart training to enable the trainee to seek employment or self-employment. The courses referred to above do not satisfy this condition because on their own such courses do not prepare a candidate to take up employment or self-employment directly after such training or coaching. They only improve the chances of success for a candidate who already has the required skill. Therefore, such institutes are not covered under the exemption.
5. CONCLUSION
All pending cases may be disposed of accordingly. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned.
(Gautam Bhattacharya)
Commissioner (Service Tax)
CBEC, New Delhi
Imposition of service tax on Builders
Circular No. 108/02/2009 – ST
F. No. 137/12/2006-CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
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New Delhi, dated 29th January 2009
Subject: Imposition of service tax on Builders - regarding
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Construction of residential complex was brought under service tax w.e.f.01.06.2005. Doubts have arisen regarding the applicability of service tax in a case where developer / builder/promoter enters into an agreement, with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction (or even prior to that) and who makes construction linked payment. The ‘Construction of Complex’ service has been defined under Section 65 (105)(zzzh) of the Finance Act as “any service provided or to be provided to any person, by any other person, in relation to construction of a complex”. The ‘Construction of Complex’ includes construction of a ‘new residential complex’. For this purpose, ‘residential complex’ means any complex of a building or buildings, having more than twelve residential units. A complex constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex intended for personal use as residence by such person has been excluded from the ambit of service tax.
2. A view has been expressed that once an agreement of sale is entered into with the buyer for a unit in a residential complex, he becomes the owner of the residential unit and subsequent activity of a builder for construction of residential unit is a service of ‘construction of residential complex’ to the customer and hence service tax would be applicable to it. A contrary view has been expressed arguing that where a buyer makes construction linked payment after entering into agreement to sell, the nature of transaction is not a service but that of a sale. Where a buyer enters into an agreement to get a fully constructed residential unit, the transaction of sale is completed only after complete construction of the residential unit. Till the completion of the construction activity, the property belongs to the builder or promoter and any service provided by him towards construction is in the nature of self service. It has also been argued that even if it is taken that service is provided to the customer, a single residential unit bought by the individual customer would not fall in the definition of ‘residential complex’ as defined for the purposes of levy of service tax and hence construction of it would not attract service tax.
3. The matter has been examined by the Board. Generally, the initial agreement between the promoters / builders / developers and the ultimate owner is in the nature of ‘agreement to sell’. Such a case, as per the provisions of the Transfer of Property Act, does not by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the ultimate owner. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of ‘self-service’ and consequently would not attract service tax. Further, if the ultimate owner enters into a contract for construction of a residential complex with a promoter / builder / developer, who himself provides service of design, planning and construction; and after such construction the ultimate owner receives such property for his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of ‘residential complex’. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax.
4. All pending cases may be disposed of accordingly. Any decision by the Advance Ruling Authority in a specific case, which is contrary to the foregoing views, would have limited application to that case only. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned.
(Gautam Bhattacharya)
Commissioner (Service Tax)
CBEC, New Delhi
F. No. 137/12/2006-CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
***
New Delhi, dated 29th January 2009
Subject: Imposition of service tax on Builders - regarding
************
Construction of residential complex was brought under service tax w.e.f.01.06.2005. Doubts have arisen regarding the applicability of service tax in a case where developer / builder/promoter enters into an agreement, with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction (or even prior to that) and who makes construction linked payment. The ‘Construction of Complex’ service has been defined under Section 65 (105)(zzzh) of the Finance Act as “any service provided or to be provided to any person, by any other person, in relation to construction of a complex”. The ‘Construction of Complex’ includes construction of a ‘new residential complex’. For this purpose, ‘residential complex’ means any complex of a building or buildings, having more than twelve residential units. A complex constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex intended for personal use as residence by such person has been excluded from the ambit of service tax.
2. A view has been expressed that once an agreement of sale is entered into with the buyer for a unit in a residential complex, he becomes the owner of the residential unit and subsequent activity of a builder for construction of residential unit is a service of ‘construction of residential complex’ to the customer and hence service tax would be applicable to it. A contrary view has been expressed arguing that where a buyer makes construction linked payment after entering into agreement to sell, the nature of transaction is not a service but that of a sale. Where a buyer enters into an agreement to get a fully constructed residential unit, the transaction of sale is completed only after complete construction of the residential unit. Till the completion of the construction activity, the property belongs to the builder or promoter and any service provided by him towards construction is in the nature of self service. It has also been argued that even if it is taken that service is provided to the customer, a single residential unit bought by the individual customer would not fall in the definition of ‘residential complex’ as defined for the purposes of levy of service tax and hence construction of it would not attract service tax.
3. The matter has been examined by the Board. Generally, the initial agreement between the promoters / builders / developers and the ultimate owner is in the nature of ‘agreement to sell’. Such a case, as per the provisions of the Transfer of Property Act, does not by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the ultimate owner. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of ‘self-service’ and consequently would not attract service tax. Further, if the ultimate owner enters into a contract for construction of a residential complex with a promoter / builder / developer, who himself provides service of design, planning and construction; and after such construction the ultimate owner receives such property for his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of ‘residential complex’. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax.
4. All pending cases may be disposed of accordingly. Any decision by the Advance Ruling Authority in a specific case, which is contrary to the foregoing views, would have limited application to that case only. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned.
(Gautam Bhattacharya)
Commissioner (Service Tax)
CBEC, New Delhi
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