REGISTERED NO. DL-33004/2002
The Gazette of India
EXTRAORDINARY
PART II —Section 2
PUBLISHED BY AUTHORITY
No. 1]
NEW DELHI, THURSDAY, FEBRUARY 28, 2002 / PHALGUNA 9,1923
Separate paging is given to this Part in order that it may be filed as a separate compilation.
LOK SABHA
The following Bill was introduced in Lok Sabha on 28th February, 2002.
BILL N O . 6 OF 2002
A Bill to give effect to the financial proposals of the Central Government
for the financial year 2002-2003.
BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (/) This Act may be called the Finance Act, 2002.
(2) Save as otherwise provided in this Act, sections 2 to 112 shall be deemed to have
come into force on the 1st day of April, 2002.
Short title and
commence-
ment.
43 of 1961.
CHAPTER II
RATES OF INCOME-TAX
2. (/) Subject to the provisions of sub-sections (2) and (3), for the assessment year
commencing on the 1st day of April, 2002, income-tax shall be charged at the rates specified
in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated
under Chapter VIII-A of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax
Act) shall be increased by a surcharge for purposes of the Union calculated in each case in
the manner provided therein.
(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the
asses see has, in the previous year, any net agricultural income exceeding five thousand
rupees, in addition to total income, and the total income exceeds fifty thousand rupees,
then,-
Income-tax.
2
THE GAZETTE OF INDIA EXTRAORDINARY
(PART II—
(a) the net agricultural income shall be taken into account, in the manner provided
in clause (b) [that is to say, as if the net agricultural income were comprised in the total
income after the first fifty thousand rupees of the total income but without being liable
to tax], only for the purpose of charging income-tax in respect of the total income; and
(b) the income-tax chargeable shall be calculated as follows :-
(0 the total income and the net agricultural income shall be aggregated
and the amount of income-tax shall be determined in respect of the aggregate
income at the rates specified in the said Paragraph A, as if such aggregate income
were the total income;
(//) the net agricultural income shall be increased by a sum of fifty
thousand rupees, and the amount of income-tax shall be determined in respect of
the net agricultural income as so increased at the rates specified in the said
Paragraph A, as if the net agricultural income as so increased were the total
income;
(Hi) the amount of income-tax determined in accordance with sub-clause
(/) shall be reduced by the amount of income-tax determined in accordance with
sub-clause (//) and the sum so arrived at shall be the income-tax in respect of the
total income:
Provided that the amount of income-tax so arrived at, as reduced by the amount of
rebate of income-tax calculated under Chapter V1II-A, shall be increased by a surcharge for
purposes of the Union calculated in each case in the manner provided in that Paragraph and
the sum so arrived at shall be the income-tax in respect of the total income.
(3) In cases to which the provisions of Chapter XII or Chapter XII-A or sub-section
(1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act
apply, the tax chargeable shall be determined as provided in that Chapter or that section, and
with reference to the rates imposed by sub-section (/) or the rates as specified in that
Chapter or section, as the case may be;
Provided that the amount of income-tax computed in accordance with the provisions
of sections 112 and 113 shall be increased by a surcharge for purposes of the Union or
surcharge as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First
Schedule:
Provided further that in respect of any income chargeable to tax under sections 115 A,
115 AB, 115 AC, 115 AC A, 115 AD, 115B, 115BB, 115BBA, 115E and 115 JB of the Income-tax
Act, the amount of income-tax computed under this sub-section shall be increased by a
surcharge for purposes of the Union, calculated at the rate of two per cent, of such income-
tax:
Provided also that no surcharge shall be payable by a foreign company.
(4) In cases in which tax has to be charged and paid under section 115U of the Income-
tax Act, the tax shall be charged and paid at the rate as specified in the said section and shall
be increased by a surcharge for purposes of the Union, calculated at the rate of five per cent,
of such tax.
(5) In cases in which tax has to be deducted under sections 193,194,194A, 194B,
194BB, 194D and 195 of the Income-tax Act, at the rates in force, the deductions shall be made
at the rates specified in Part II of the First Schedule and shall be increased, by a surcharge for
purposes of the Union, calculated in each case, in the manner provided therein.
(<S) In cases in which tax has to be deducted under sections 194C, 194E, 194EE, 194F,
194G, 194H.194-1,194J, 194K, 194L, 196A, 196B, 196Cand 196Dofthe Income-tax Act, the
deductions shall be made at the rates specified in those sections and shall be increased by a
surcharge for purposes of the Union, calculated at the rate of five per cent, of such tax.
SEC. 2]
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3
(7) In cases in which tax has to be collected under the proviso to section 194B or
under section 206C of the Income-tax Act, the collection shall be made at the rates specified
in that section or at the rates specified in Part II of the First Schedule, as the case may be, and
shall be increased, by a surcharge for purposes of the Union, calculated in each case, in the
manner provided therein.
(5) Subject to the provisions of sub-section (9), in cases in which income-tax has to be
charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section
174A or section 175 or sub-section (2) of section 176 of the Income-tax Act or deducted from,
or paid on, income chargeable under the head "Salaries" under section 192 of the said Act or
in which the "advance tax" payable under Chapter XVII-C of the said Act has to be computed,
at the rate or rates in force, such income-tax or, as the case may be, "advance tax" shall be so
charged, deducted or computed at the rate or rates specified in Part III of the First Schedule
and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the
said Act shall be increased for purposes of the Union, calculated in each case in the manner
provided therein;
Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or
section 115JB or sub-section (I A) of section 161 or section 164 or section 164A or section
167B of the Income-tax Act apply, "advance tax" shall be computed with reference to the
rates imposed by this sub-section or the rates as specified in that Chapter or section, as the
case may be:
Provided further that the amount of income-tax computed in accordance with the
provisions of section 112 of the Income-tax Act shall be increased by a surcharge for purposes
of the Union as provided in Paragraph A, B, C, D or E, as the case may be, of Part III of the
First Schedule:
Provided also that in respect of any income chargeable to tax under sections 115 A,
II5AB, 115AC, 115ACA, 115AD, 115B, 115BB, 115BBA, 115BBB, 115Eand 115JBofthe
Income-tax Act, "advance tax" computed under the first proviso shall be increased by a
surcharge, for purposes of the Union, calculated at the rate of five per cent, of such tax.
(?) In cases to which Paragraph A of Part III of the First Schedule applies, where the
assessee has, in the previous year or, if by virtue of any provision of the Income-tax Act,
income-tax is to be charged in respect of the income of a period other than the previous year,
in such other period, any net agricultural income exceeding five thousand rupees, in addition
to total income and the total income exceeds fifty thousand rupees, then, in charging income-
tax under sub-section (2) of section 174 or section 174 A or section 175 or sub-section (2) of
section 176 of the said Act or in computing the "advance tax" payable under Chapter
XVII-C of the said Act, at the rate or rates in force,-
(a) the net agricultural income shall be taken into account, in the manner provided
in clause (b) [that is to say, as if the net agricultural income were comprised in the total
income after the first fifty thousand rupees of the total income but without being liable
to tax], only for the purpose of charging or computing such income-tax or, as the case
may be, "advance tax" in respect of the total income; and
{h) such income-tax or, as the case may be, "advance tax" shall be so charged or
computed as follows;-
(0 the total income and the net agricultural income shall be aggregated
and the amount of income-tax or "advance tax" shall be determined in respect of
the aggregate income at the rates specified in the said Paragraph A, as if such
aggregate income were the total income;
(if) the net agricultural income shall be increased by a sum of fifty thousand
rupees, and the amount of income-tax or "advance tax" shall be determined in
respect of the net agricultural income as so increased at the rates specified in the
said Paragraph A, as if the net agricultural income were the total income;
4
IIII- GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(;//) the amount of income-tax or "advance tax" determined in accordance
with sub-clause (/) shall be reduced by the amount of income-tax or, as the case
may be, "advance tax" determined in accordance with sub-clause (//) and the
sum so arrived at shall be the income-tax or, as the case may 6e, "advance tax" in
respect of the total income:
Provided that the amount of income-tax or "advance tax" so arrived at, as reduced by
the rebate of income-tax calculated under Chapter VIII-A of the said Act, shall be increased
by a surcharge for purposes of the Union calculated in each case, in the manner provided
therein.
(70) For the purposes of this section and the First Schedule,-
(a) "domestic company" means an Indian company or any other company which,
in respect of its income liable to income-tax under the Income-tax Act for the assessment
year commencing on the 1 st day of April, 2002, has made the prescribed arrangements
for the declaration and payment within India of the dividends (including dividends on
preference shares) payable out of such income;
(b) "insurance commission" means any remuneration or reward, whether by
way of commission or otherwise, for soliciting or procuring insurance business
(including business relating to the continuance, renewal or revival of policies of
insurance);
(c) "net agricultural income", in relation to a person, means the total amount of
agricultural income, from whatever source derived, of that person computed in
accordance with the rules contained in Part IV of the First Schedule;
(d) all other words and expressions used in this section and the First Schedule
but not defined in this sub-section and defined in the Income-tax Act shall have the
meanings respectively assigned to them in that Act.
Amendment
of section 2
Amendment
of section 10.
CHAPTER HI
DIRECT TAXES
Income-tax
3. In section 2 of the Income-tax Act,—
(a) in clause (24), after sub-clause (*/), the following sub-clause shall be inserted
with effect from the 1 st day of April, 2003, namely:-
"(*/"/) any sum referred to in clause (vW) of section 28;";
(b) in clause (31), after sub-clause (v/7), the following Explanation shall be
inserted, namely:-
"Explanation.-For the purposes of this clause, an association of persons
or a body of individuals or a local authority or an artificial juridical person shall
be deemed to be a person, whether or not such person or body or authority or
juridical person was formed or established or incorporated with the object of
deriving income, profits or gains;";
(c) in clause (37A), in sub-clause (/), for the words, figures and letters "or section
115BB or section 115E", wherever they occur, the words, figures and letters "or section
115BB or section 115BBB or section 115E" shall be substituted with effect from the
1st day of April, 2003.
4. In section 10 of the Income-tax Act,-
(a) clause (3) shall be omitted with effect from the 1st day of April, 2003;
(b) in clause (4), in sub-clause (/), the following proviso shall be inserted with
effect from the 1 st day of April, 2003, namely:-
"Provided that the Central Government shall not specify, for the purposes
of this sub-clause, such securities or bonds on or after the 1st day of June,
002;";
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
5
1 of 1956.
(c) in clause (4B), for the words "savings certificates issued", the words, figures
and letters "savings certificates issued before the 1st day of June, 2002" shall be
substituted with effect from the 1st day of April, 2003;
(d) clause (5B) shall be omitted with effect from the 1 st day of April, 2003;
(e) in clause (6), sub-clause (0 shall be omitted with effect from the 1st day of
April.2003;
(f) in clause (6A), after the words, figures and letters "Government or the Indian
concern after the 31st day of March, 1976", the words, figures and letters "but before
the 1st day of June, 2002" shall be inserted with effect from the 1st day of April, 2003;
(g) in clause (6B), with effect from the 1st day of April, 2003,-
(f) for the words "agreement entered into by the Central Government", the
words, figures and letters "agreement entered into before the 1st day of June,
2002 by the Central Government" shall be substituted;
(if) for the words "related agreement approved", the words "related
agreement approved before that date" shall be substituted;
(h) in clause (10C), after sub-clause (viib), the following sub-clause shall be
inserted, namely:-
"(viic) an institution, having importance throughout India or in any State or
States, as the Central Government may, by notification in the Official Gazette, specify
in this behalf;";
(0 after clause (10Q, the following clause shall be inserted with effect
from the 1st day of April, 2003, namely:-
"(10CC) in the case of an employee, being an individual deriving
income in the nature of a perquisite, not provided for by way of monetary
payment within the meaning of clause (2) of section 17, the tax on such
income actually paid by his employer, at the option of the employer, on
behalf of such employee, notwithstanding anything contained in section
200 of the Companies Act, 1956;";
(J) clause (14A) shall be omitted with effect from the 1st day of April, 2003;
(Jfc) in clause (IS), with effect from the 1st day of April, 2003-
(f) in sub-clause (iib), the following proviso shall be inserted, namely:-
"Provided that the Central Government shall not specify, for the
purposes of this sub-clause, such Capital Investment Bonds on or after
the 1st day of June, 2002;";
(if) in sub-clause (ild), after the third proviso and before the Explanation,
the following proviso shall be inserted, namely:-
"Provided also that the Central Government shall not specify, for
the purposes of this sub-clause, such bonds on or after the 1st day of
June, 2002.";
(I) in clause (20), the following Explanation shall be inserted with effect from the
1 st day of April, 7003, namely :-
'Explanation.-For the purposes of this clause, the expression "local
authority" means-
(/) Panchayat as referred to in clause (d) of article 243 of the
Constitution; or
(if) Municipality as referred to in clause (e) of article 243P of the
Constitution; or
6
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(///) Municipal Committee and District Board,
legally entitled to, or entrusted by the Government with, the control or
management of a Municipal or local fund; or
(/v) Cantonment Board as defined in section 3 of the Cantonments
Act, 1924.';
(m) clause (20A) shall be omitted with effect from the 1st day of
April, 2003;
(n) in clause (21), after the third proviso, the following proviso shall be inserted
with effect from the 1st day of April, 2003, namely :-
"Provided also that where the scientific research association is approved
by the Central Government and subsequently that Government is satisfied that-
(0 the scientific research association has not applied its income in
accordance with the provisions contained in clause (a) of the first proviso;
or
(//) the scientific research association has not invested or deposited
its funds in accordance with the provisions contained in clause (b) of the
first proviso; or
(Hi) the activities of the scientific research association are not
genuine; or
(rv) the activities of the scientific research association are not being
carried out in accordance with all or any of the conditions subject to which
such association was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the
proposed withdrawal to the concerned association, by order, withdraw the approval
and forward a copy of the order withdrawing the approval to such association and to
the Assessing Officer;";
(o) in clause (22B), after the second proviso, the following proviso shall be
inserted with effect from the 1 st day of April, 2003, namely:-
"Provided also that where the news agency has been specified, by
notification, by the Central Government and subsequently that Government is
satisfied that such news agency has not applied or accumulated or distributed
its income in accordance with the provisions contained in the first proviso, it
may, at any time after giving a reasonable opportunity of showing cause, rescind
the notification and forward a copy of the order rescinding the notification to
such agency and to the Assessing Officer;";
(p) clause (25) shall be omitted with effect from the 1 st day of April, 2003;
(q) in clause (23A), after the proviso, the following proviso shall be inserted with
effect from the 1 st day of April, 2003, namely:-
"Provided further that where the association or institution has been
approved by the Central Government and subsequently that Government is
satisfied that-
(0 such association or institution has not applied or accumulated its
income in accordance with the provisions contained in the first proviso; or
(//) the activities of the association or institution are not being carried
out in accordance with all or any of the conditions subject to which such
association or institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the
proposed withdrawal to the concerned association or institution, by order, withdraw
2 of 1924.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
7
47 of 1961.
the approval and forward a copy of the order withdrawing the approval to such
association or institution and to the Assessing Officer;";
(/•) in clause (23B), after the second proviso and before the Explanation, the
following proviso shall be inserted with effect from the 1 st day of April, 2003, namely:-
"Provided also that where the institution has been approved by the Khadi
and Village Industries Commission and subsequently that Commission is satisfied
that-
(/) the institution has not applied or accumulated its income in
accordance with the provisions contained in the first proviso; or
(//) the activities of the institution are not being carried out in
accordance with all or any of the conditions subject to which such
association or institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the
proposed withdrawal to the concerned institution, by order, withdraw the approval
and forward a copy of the order withdrawing the approval to such institution and to
the Assessing Officer.";
(s) in clause (23C), -
(/) in the third proviso, for clause (a), the following clause shall be
substituted with effect from the 1 st day of April, 2003, namely:-
"(a) applies its income, or accumulates it for application, wholly and
exclusively to the objects for which it is established and in a case where
any income is accumulated on or after the 1 st day of April, 2002, the period
of such accumulation shall in no case exceed five years; and";
(if) in the ninth proviso, with effect from the 3rd day of February, 2001 ,-
(a) after the words, brackets, letters and figures "in terms of clause
(d) of sub-section (2) of section 80G", the words, brackets, figures and
letter "in respect of which accounts of income and expenditure have not
been rendered to the authority prescribed under clause (v) of sub-section
(5C) of that section, in the manner specified in that clause, or" shall be
inserted and shall be deemed to have been inserted;
(b) for the words, figures and letters "or before the 31st day of
March, 2002", the words, figures and letters "or before the 31st day of
March, 2003" shall be substituted and shall be deemed to have been
substituted;
(Hi) the tenth proviso shall be omitted;
(tv) after the tenth proviso, the following provisos shall be inserted with
effect from the 1 st day of April, 2003, namely :-
"Provided also that where the fund or trust or institution or any
university or other educational institution or any hospital or other medical
institution referred to in sub-clause (h>) or sub-clause (v) or sub-clause
(vi) or sub-clause (via) does not apply its income during the year of receipt
and accumulates it, any payment or credit out of such accumulation to any
trust or institution registered under section 12AA or to any fund or trust
or institution or any university or other educational institution or any
hospital or other medical institution referred to in sub-clause (tv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as
application of income to the objects for which such fund or trust or
institution or university or educational institution or hospital or other
medical institution, as the case may be, is established;
8
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Provided also that where the fund or institution referred to in sub-
clause (/v) or trust or institution referred to in sub-clause (v) is notified by
the Central Government or any university or other educational institution
referred to in sub-clause (v/) or any hospital or other medical institution
referred to in sub-clause (via), is approved by the prescribed authority
and subsequently that Government or the prescribed authority is satisfied
that-
(0 such fund or institution or trust or any university or other
educational institution or any hospital or other medical institution
has not,-
(A) applied its income in accordance with the provisions
contained in clause (a) of the third proviso; or
(B) invested or deposited its funds in accordance with
the provisions contained in clause (b) of the third proviso; or
(if) the activities of such fund or trust or institution or any
university or other educational institution or any hospital or other
medical institution,-
(A) are not genuine; or
(B) are not being carried out in accordance with all or
any of the conditions subject to which such association was
notified or approved,
it may, at any time after giving a reasonable opportunity of showing cause
against the proposed action to the concerned fund or institution or trust
or any university or other educational institution or any hospital or other
medical institution, rescind the notification or, by order, withdraw the
approval, as the case may be, and forward a copy of the order rescinding
the notification or withdrawing the approval to such fund or institution or
trust or any university or other educational institution or any hospital or
other medical institution and to the Assessing Officer;";
(0 in clause (23D), in the opening portion, the words, figures and letter "subject
to the provisions of Chapter XI1-E," shall be omitted with effect from the 1st day of
April, 2003;
(w) clause (23E) shall be omitted with effect from the 1 st day of April, 2003;
(v) after clause (23EA), the following clause shall be inserted, namely:-
"(23EB) any income of the Credit Guarantee Fund Trust for Small Scale
Industries, being a trust created by the Government of India and the Small
Industries Development Bank of India established under sub-section (/) of section
3 of the Small Industries Development Bank of India Act, 1989, for five previous
years relevant to the assessment years beginning on the 1st day of April, 2002
and ending on the 31st day of March, 2007;";
(w) in clause (23FA), the words, figures and letter "other than dividends referred
to in section 115-O," shall be omitted with effect from the 1 st day of April, 2003;
(x) in clause (23G), the words, figures and letter "other than dividends referred
to in section 115-0," shall be omitted with effect from the 1st day of April, 2003;
(y) clauses (29) and (33) shall be omitted with effect from the 1st day of April,
2003.
39 of 1989.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
9
5. In section 1OA of the Income-tax Act, in sub-section (/), after the third proviso, the
following proviso shall be inserted with effect from the 1st day of April, 2003, namely:-
"Provided also that for the assessment year beginning on the I st day of April,
2003, the deduction under this sub-section shall be ninety per cent, of the profits and
gains derived by an undertaking from the export of such articles or things or computer
software:".
6. In section 10B of the Income-tax Act, in sub-section (I), after the second proviso,
the following proviso shall be inserted with effect from the 1 st day of April, 2003, namely:-
"Provided also that for the assessment year beginning on the 1st day of April,
2003, the deduction under this sub-section shall be ninety per cent, of the profits and
gains derived from the export of such articles or things or computer software:".
7. bisection 11 of the Income-tax Act, with effect from the 1st day of April, 2003,-
(a) in sub-section (/),-
(/) in clause (a), the words "and, where any such income is accumulated or
set apart for application to such purposes in India, to the extent to which the
income so accumulated or set apart is not in excess of twenty-five per cent, of
the income from such property;" shall be omitted;
(/"/) in clause (b), the words "and, where any such income is finally set
apart for application to such purposes in India, to the extent to which the income
so set apart is not in excess of twenty-five per cent, of the income from such
property;" shall be omitted;
(ill) for the Explanation, the following Explanation shall be substituted,
najnely:-
"Explanation.-For the purposes of clauses (a) and (b), if, in the
previous year, the income applied to charitable or religious purposes in
India falls short of the income derived during that year from property held
under trust, or, as the case may be, held under trust in part, by any amount
for the reason that the whole or any part of the income has not been
received during that year, then, so much of the income applied to such
purposes in India during the previous year in which the income is received
or during the previous year immediately following as does not exceed the
said amount, may, at the option of the person in receipt of the income
(such option to be exercised in writing before the expiry of the time allowed
under sub-section (/) of section 139 for furnishing the return of income)
be deemed to be income applied to such purposes during the previous
year in which the income was derived; and the income so deemed to have
been applied shall not be taken into account in calculating the amount of
income applied to such purposes, during the previous year in which the
income is received or during the previous year immediately following, ta
the case may be.";
(b) for sub-section (IB), the following sub-section shall be substituted, namely:-
"(IB) Where any income in respect of which an option is exercised under
the Explanation to sub-section (/) is not applied to charitable or religious
purposes in India during the period referred to in the said Explanation, then,
such income shall be deemed to be the income of the person in receipt thereof, of
the previous year immediately following the previous yeV in which the income
was received.";
(c) in sub-section (2),-
(0 the words "seventy-five per cent of" shall be omitted;
(If) after the second proviso, the following Explanation shall be huertod,
namely:-
Amendment
of section
I0A.
Amendment
of lection
I0B.
Amendment
ofuctlon I I .
JO
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment
of section 12.
Amendment
of section
12A.
Amendment
of section
14A.
Amendment
of section 17.
"Explanation.-Any amount credited or paid, out of income referred
to in clause (a) or clause (b) of sub-section (/), read with the Explanation
to that sub-section, which is not applied, but is accumulated or set apart,
to any trust or institution registered under section 12A A or to any fund or
institution or trust or any university or other educational institution or any
hospital or other medical institution referred to in sub-clause (iv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section
10, shall not be treated as application of income for charitable or religious
purposes, either during the period of accumulation or thereafter.";
(d) in sub-section (J),-
(0 after clause (c), the following clause shall be inserted, namely:-
"(d) is credited or paid to any trust or institution registered under
section 12AA or to any fund or institution or trust or any university or
other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vj) or sub-
clause (via) of clause (23Q of section 10,";
(it) for the words "set apart or ceases to remain so invested or deposited'
or", the words "set apart or ceases to remain so invested or deposited or credited
or paid or" shall be substituted;
(e) in sub-section (3A), the following proviso shall be inserted, namely:-
"Proiided that the Assessing Officer shall not allow application of such
income by �y of payment or credit made for the purposes referred to in clause
(d) of sub-section (3) of section 11.','.
8. In section 12 of t|ic\ Income-tax Act, in sub-section (3), with effect from the 3rd day
of February, 2001-
(a) after the wdrds, brackets, letters and figures "In terms of clause (d) of sub-
section (2) of section 80G", the words, brackets, figures and letter "in respect of which
accounts of income and expenditure have not been rendered to the authority prescribed
under clause (v) of sub-section (JO of that section, in the manner specified in that
clause, or" shall be inserted and shall be deemed to have been inserted;
(b) for the words, figures and letters "or before the 31 st day of March, 2002", the
words, figures and letters "or before the 31 st day of March, 2003" shall be substituted
and shall be deemed to have been substituted.
9. In section 12A of the Income-tax Act, clause (c) shall be omitted.
10. In section 14A of the Income-tax Act, the following proviso shall be inserted and
shall be deemed to have been inserted with effect from the 1 lth day of May, 2001, namely;-
"Provided that nothing contained in this section shall empower the Assessing
Officer either to reassess under section 147 or pass an order enhancing the assessment
or reducing a refund already made or otherwise increasing the liability of the assessee
under section 154, for any assessment year beginning on or before the 1 st day of April,
, 2001".
11. In section 17 of the Income-tax Act, in clause (2), after the proviso and before the
Explanation, die following proviso shall be inserted, namely:-
'Provided further that for the assessment year beginning on the 1 st day of April,
2002, nothing contained in this clause shall apply to any employee whose income
under the head "Salaries" (whether due from, or paid or allowed by, one or more
employers) exclusive of the value of all perquisites not provided for by way of monetary
payment, does not exceed one lakh rupees.'.
SEC. 2]
THE QAZETTE OF INDIA EXTRAORDINARY
11
12. In section 24 of the Income-tax Act, in clause (6), with effect from the 1st day of
April, 2003,-
(o) in the second proviso, for the words, figures and letters "before the 1st day
of April, 2003", the words "within three years from the end of the financial year in
which capital was borrowed" shall be substituted;
(b) after the second proviso and the Explanation, the following shall be inserted,
namely :-
'Provided also that no deduction shall be made under the second proviso
unless the assessee furnishes a certificate, from the person to whom any interest
is payable on the capital borrowed, specifying the amount of interest payable by
the assessee for the purpose of such acquisition or construction of the property,
or, conversion of the whole or any part of the capital borrowed which remains to
be repaid as a new loan.
Explanation.-For the purposes of this proviso, the expression "new loan"
means the whole or any part of a loan taken by the assessee subsequent to
capital borrowed, for the purpose of repayment of such capital.'.
13. In section 28 of the Income-tax Act, after clause (v/), the following shall be inserted
with effect from the 1 st day of April, 2003, namely:-
'(vi/) any sum, whether received or receivable in cash or kind, under an
agreement for-
(a) not carrying out any activity in relation to any business; or
(b) not sharing any know-how, patent, copyright, trade-mark, licence,
franchise or any other business or commercial right of similar nature or information
or technique likely to assist in the manufacture or processing of goods or
provision for services.
Explanation.-?ox the purposes of this clause,-
(0 "agreement" includes any arrangement or understanding or action in
concert,-
\
(A) whether or not such arrangement, understanding or action is
formal or in writing; or
(5) whether or not such arrangement, understanding or action is
intended to be enforceable by legal proceedings;
(//) "service" means service of any description which is made available to
potential users and includes the provision of services in connection with business
of any industrial or commercial nature such as accounting, banking,
communication, conveying of news or information, advertising, entertainment,
amusement, education, financing, insurance, chit funds, real estate, construction,
transport, storage, processing, supply of electrical or other energy, boarding
and lodging.'.
14. In section 32 of the Income-tax Act, in sub-section (/), with effect from the 1 st day
of April, 2003,-
(a) in clause (//),-
(0 in the second proviso, for the words, brackets and figures "or clause
(if)", at both the places where they occur, the words, brackets, figures and letter
"or clause (if) or clause (Ha)" shall be substituted;
(//) in Explanation 2 below the fifth proviso, for the words "For the
purposes of this clause", the words "For the purposes of this sub-section" shall
be substituted;
Amendment
of tection 24.
Amendment
of lection 28.
Amendment
of section 32.
12
THE GAZETTE OF INDIA EXTRAORblNARY
[PARTII—
Amendment of
section 33AC
(b) after clause (if), the following shall be inserted, namely:-
\iia) in the case of any new machinery or plant (other than ships and
aircraft), which has been acquired and installed after the 31 st day of March, 2002,
by an assessee engaged in the business of manufacture or production of any
article or thing, a further sum equal to fifteen per cent, of the actual cost of such
machinery or plant shall be allowed as deduction under clause (if):
Provided that such further deduction of fifteen per cent, shall be allowed
to-
(A) a new industrial undertaking during any previous year in which
such undertaking begins to manufacture or produce any article or thing on
or after the 1 st day of April, 2002; or
(B) any industrial undertaking existing before the 1st day of April,
2002, during any previous year in which it achieves the substantial
expansion by way of increase in installed capacity by not less than twenty-
five per cent:
Provided further that no deduction shall be allowed in respect of-
(a) any machinery or plant which, before its installation by the
assessee, was used either within or outside India by any other person; or
(b) any machinery or plant installed in any office premises or any
residential accommodation, including accommodation in the nature of a
guest house; or
(c) any office appliances or road transport vehicles; or
(d) any machinery or plant, the whole or part of the actual cost of
which is allowed as a deduction (whether by way of depreciation or
otherwise) in computing the income chargeable under the head "Profits
and gains of business or profession" of any one previous year:
Provided also that no deduction shall be allowed under clause (A) or, as
the case may be, clause (B), of the first proviso unless the assessee furnishes the
details of machinery or plant and increase in the installed capacity of production
in such form, as may be prescribed, along with the return of income, and the
report of an accountant, as defined in the Explanation below sub-section (2) of
section 288 certifying that the deduction has been correctly claimed in accordance
with the provisions of this clause.
Explanation.-For the purposes of this clause,-
(/) "new industrial undertaking" means an undertaking which is not
formed,-
(a) by the splitting up, or the reconstruction, of a business
already in existence;or
.
(b) by the transfer to a new business of machinery or plant
previously used for any purpose;
(2) "installed capacity" means the capacity of production as existing
on the last day of any previous year commencing on or after the 31st day
of March, 2002.'.
15. In section 33 AC of the Income-tax Act, in sub-section (V), for the first proviso, the
following proviso shall be substituted with effect from the 1 st day of April, 2003, namely:-
"Provided that where the aggregate of the amounts carried to such reserve
account from tone to time exceeds twice the aggregate of the amounts of the paid-up
share capital, the general reserves and amount credited to the share premium account
nf the assessee, no allowance under this sub-section shall be made in respect of such
Kcess.".
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
13
16. In section 35AC of the Income-tax Act, after sub-section (5) and before the
Explanation, the following sub-section shall be inserted with effect from the 1st day of April,
2003, namely:-
"(60 Notwithstanding anything contained in any other provision of this Act,
where-
(0 the approval of the National Committee, granted to an association or
institution, is withdrawn under sub-section (4) or the notification in respect of
eligible project or scheme is withdrawn in the case of a public sector company or
local authority or an association or institution under sub-section (5); or
(//) a company has claimed deduction under the proviso to sub-section (/)
in respect of any expenditure incurred directly on the eligible project or scheme
and the approval for such project or scheme is withdrawn by the National
Committee under sub-section (5),
the total amount of the payment received by the public sector company or the local
authority or the association or the institution, as the case may be, in respect of which
such company or authority or association or institution has furnished a certificate
referred to in clause (a) of sub-section (2) or the deduction claimed by a company
under the proviso to sub-section (7) shall be deemed to be the income of such company
or authority or association or institution, as the case may be, for the previous year in
which such approval or notification is withdrawn and tax shall be charged on such
income at the maximum marginal rate in force for that year.".
17. In section 35CCB of the Income-tax Act, in sub-section (7), in the opening portion,
for the words "Where an assessee incurs any expenditure", the words, figures and letters
"Where an assessee incurs any expenditure on or before the 31st day of March, 2002" shall
be substituted with effect from the 1st day of April, 2003.
18. In section 35DDA of the Income-tax Act, for sub-section (2), the following sub-
sections shall be substituted and shall be deemed to have been substituted with effect from
the 1st day of April, 2001, namely:—
"(2) Where the assessee, being an Indian company, is entitled to the deduction
under sub-section (/) and the undertaking of such Indian company entitled to the
deduction under sub-section (7) is transferred, before the expiry of the period specified
in that sub-section, to another Indian company in a scheme of amalgamation, the
provisions of this section shall, as far as may be, apply to the amalgamated company
as they would have applied to the amalgamating company if the amalgamation had not
taken place.
(3) Where the undertaking of an Indian company entitled to the deduction under
sub-section (7) is transferred, before the expiry of the period specified in that sub-
section, to another company in a scheme of demerger, the provisions of this section
shall, as far as may be, apply to the resulting company, as they would have applied to
the demerged company, if the demerger had not taken place.
(4) Where there has been reorganisation of business, whereby a firm is succeeded
by a company fulfilling the conditions laid down in clause (xiil) of section 47 or a
proprietary concern is succeeded by a company fulfilling the conditions laid down in
clause (xtv) of section 47, the provisions of this section shall, as far as may be, apply
to the successor company, as they would have applied to the firm or the proprietary
concern, if reorganisation of business had not taken place.
(5) No deduction shall be allowed in respect of the expenditure mentioned in
sub-section (7) in the case of the amalgamating company referred to in sub-section (2),
in the case of demerged company referred to in sub-section (5) and in the case of a firm
or proprietary concern referred to in sub-section (O of this section, for the previous
year in which amalgamation, demerger or succession, as the case may be, takes place.
Amendment
of section
35AC.
Amendment
of section
35CCB.
Amendment
of section
35DDA.
14
THE GAZETTE OF INDIA EXTRAORDINARY
[PART H—
Amendment
of seotlon 36.
>ent
of section 40.
Substitution of
new section for
section 43A.
Special
provisions
consequential
to changes In
rate of
exchange of
currency.
(6) No deduction shall be allowed in respect of the expenditure mentioned in
sub-section (/) under any other provision of this Act.".
19. In section 36 of the Income-tax Act, in sub-section (/), in clause (viia), with effect
from the 1 st day of April, 2003,—
(i) in sub-clause (a),—
04) for the words "not exceeding five per cent.", the words "not exceeding
seven and one-half per cent" shall be substituted;
(B) after the proviso and before the Explanation, the following proviso
shall be inserted, namely:—
'Provided further that for the relevant assessment years commencing
on or after the 1 st day of April, 2003 and ending before the 1 st day of April,
2005, the provisions of the first proviso shall have effect as if for the words
"five per cent.", the words "ten per cent." had been substituted.1;
(it) in sub-clause (c), the following proviso shall be inserted, namely:—
"Provided that a public financial institution or a State financial corporation
or a State industrial investment corporation referred to in this sub-clause shall, at
its option, be allowed in any of the two consecutive assessment years
commencing on or after the 1 st day of April, 2003 and ending before the 1 st day
of April, 200S, deduction in respect of any provision made by it for any assets
classified by the Reserve Bank of India as doubtful assets or loss assets in
accordance with the guidelines issued by it in this behalf, of an ampunt not
exceeding ten per cent, of the amount of such assets shown in the books of
account of such institution or corporation, as the case may be, on the last day of
the previous year.".
20. In section 40 of the Income-tax Act,—
(0 in clause (a), after sub-clause (/v), the following sub-clause shall be inserted
with effect from the 1 st day of April, 2003, namely:—
"(v) any tax actually paid by an employer referred to in clause (]0CQ of
section 10;";
(ii) in clause (6), in sub-clause (/v), for the words "eighteen per cent", the words
"twelve per cent" shall be substituted with effect from the 1st day of June, 2002.
21. For section 43A of the Income-tax Act, the following section shall be substituted
with effect from the lstdayof April, 2003, namely:—
'43 A. Notwithstanding anything contained in any other provision of this Act,
where an assessee has acquired any asset in any previous year from a country outside
India for the purposes of his business or profession and, in consequence of a change
in the rate of exchange during any previous year after the acquisition of such asset,
there is an increase or reduction in the liability of the assessee as expressed in Indian
currency (as compared to the liability existing at the time of acquisition of the asset) at
die time of making payment—
(a) towards the whole or a part of the cost of the asset; or
(b) towards repayment of the whole or a part of the moneys borrowed by
him from any person, directly or indirectly, in any foreign currency specifically
for the purpose of acquiring the asset along with interest, if any,
the amount by which the liability as aforesaid is so increased or reduced during such
previous year and which is taken into account at the time of making the payment,
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
1 5
42 of 1999
42 of 1999
15 of 1992
2 of 1934
irrespective of the method of accounting adopted by the assessee, shall be added to,
or, as the case may be, deducted from-
(0 the actual cost of the asset as defined in clause (7) of section 43; or
(//) the amount of expenditure of a capital nature referred to in clause (tv)
of sub-section (7) of section 35; or
(Hi) the amount of expenditure of a capital nature referred to in section
35A;or
(tv) the amount of expenditure of a capital nature referred to in clause (be)
of sub-section (7) of section 36; or
(v) the cost of acquisition of a capital asset (not being a capital asset
referred to in section SO) for the purposes of section 48,
and the amount arrived at after such addition or deduction shall be taken to be the
actual cost of the asset or the amount of expenditure of a capital nature or, as the case
may be, the cost of acquisition of the capital asset as aforesaid.
Explanation 7.-In this sub-section, unless the context otherwise requires,-
(a) "rate of exchange" means the rate of exchange determined or recognised
by the Central Government for the conversion of Indian currency into foreign
currency or foreign currency into Indian currency;
(b) "foreign currency" and "Indian currency" have the meanings
respectively assigned to them in section 2 of the Foreign Exchange Management
Act, 1999.
Explanation .2 .-Where the whole or any part of the liability aforesaid is met, not
by the assessee, but, directly or indirectly, by any other person or authority, the
liability so met shall not be taken into account for the purposes of this sub-section.
Explanation 5.-Where the assessee has entered into a contract with an
authorised dealer as defined in section 2 of the Foreign Exchange Management Act,
1999, for providing him with a specified sum in a foreign currency on or after a stipulated
future date at the rate of exchange specified in the contract to enable him to meet the
whole or any part of the liability aforesaid, the amount, if any, to be added to, or
deducted from, the actual cost of the asset or the amount of expenditure of a capital
nature or, as the case may be, the cost of acquisition of the capital asset under this sub-
section shall, in respect of so much of the sum specified in the contract as is available
for discharging the liability aforesaid, be computed with reference to the rate of
exchange specified therein.'.
22. In section 44AE of the Income-tax Act, in sub-section (2), with effect from the 1st
day of April, 2003,-
(a) in clause (0, for the words "two thousand rupees", the words "three thousand
five hundred rupees" shall be substituted;
(b) in clause (if), for the words "one thousand eight hundred rupees", the words
"three thousand one hundred and fifty rupees" shall be substituted.
23. In section 47 of the Income-tax Act, in clause (xv), after the words and figures me
Securities and Exchange Board of India, established under section 3 of the Securities and
Exchange Board of India Act, 1992", the words and figures "or the Reserve Bank of India
constituted under sub-section (7) of section 3 of the Reserve Bank of India Act, 1934" shall
be inserted with effect from the 1st day of April, 2003.
24. After section SOB of the Income-tax Act, the following section shall be inserted
with effect from the 1st day of April, 2003, namely:-
Amendment
of section
44AE.
Amendment
of section 47.
Insertion of
new section
50C.
16
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Special
provision for
flill value of
consideration
in certain
ewes.
Amendment
of section
54EC.
Substitution of
new lection
for section
70.
Set off of lou
fTom one
fource against
income from
another
•ouroe under
the MTW head
of income.
'50C. (7) Where the consideration received or accruing as a result of the transfer
by an assessee of a capital asset, being land or building or both, is less than the value
adopted or assessed by any authority of a State Government (hereafter in this section
referred to as the "stamp valuation authority") for the purpose of payment of stamp
duty in respect of such transfer, the value so adopted or assessed shall, for the
purposes of section 48, be deemed to be the full value of the consideration received or
accruing as a result of such transfer.
(2) Without prejudice to the provisions of sub-section (/), where-
(a) the assessee claims before any Assessing Officer that the value adopted
or assessed by the stamp valuation authority under sub-section (/) exceeds the
fair market value of the property as on the date of transfer;
(b) the value so adopted or assessed by the stamp valuation authority
under sub-section (7) has not been disputed in any appeal or revision or no
reference has been made before any other authority, court or the High Court,
the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer
and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5)
and (6) of section 16A, clause (i) of sub-section (7) and sub-sections (<S) and (7) of
section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of
the Wealth-tax Act, 1957, shall, with necessary modifications, apply in relation to
such reference as they apply in relation to a reference made by the Assessing Officer
under sub-section (/) of section 16A of that Act.
Explanation.-Forihe purposes of this section, "Valuation Officer" shall have
the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957.
(3) Subject to the provisions contained in sub-section (2), where the value
ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp
valuation authority referred to in sub-section (7), the value so adopted or assessed by
such authority shall be taken as the full value of the consideration received or accruing
as a result of the transfer.'.
25. In section 54EC of the Income-tax Act, in the Explanation occurring at the end, in
clause (b), after sub-clause {if), the following sub-clause shall be inserted with effect from the
1st day of April, 2003, namely:-
"(»7) on or after the 1st day of April, 2002, by the National Housing Bank
established under sub-section (7) of section 3 of the National Housing Bank Act, 1987
or by the Small Industries Development Bank of India established under sub-section
(7) of section 3 of the Small Industries Development Bank of India Act, 1989.".
26. For section 70 of the Income-tax Act, the following section shall be substituted
with effect from the 1 st day of April, 2003, namely:-
'70. (7) Save as otherwise provided in this Act, where the net result for any
assessment year in respect of any source falling under any head of income, other than
"Capital gains", is a loss, the assessee shall be entitled to have the amount of such loss
set off against his income from any other source under the same head.
(2) Where the result of the computation made for any assessment year under
sections 48 to 55 in respect of any short-term capital asset is a loss, the assessee shall
be entitled to have the amount of such loss set off against the income, if any, as arrived
at under a similar computation made for the assessment year in respect of any other
capital asset.
(5) Where the result of the computation made for any assessment year under
sections 48 to 55 in respect of any capital asset (other than a short-term capital asset)
is a loss, the assessee shall be entitled to have the amount of such loss set off against
27 of 1957
53 of 1987
39 of 1989
Shf 2]
THE GAZETTE OF INDIA EXTRAORDINARY
1 7
the income, if any, as arrived at under a similar computation made for the assessment
year in respect of any other capital asset not being a short-term capital asset.'.
27. In section 72 A of the Income-tax Act, in sub-section (7), in clause {ad), after sub-
clause (Hi), the following sub-clause shall be inserted with effect from the 1st day of April,
2003, namely:-
"(iiia) the business of providing telecommunication services, whether basic or
cellular, including radio paging, domestic satellite service, network of trunking,
broadband network and internet services; or".
28. In section 74 of the Income-tax Act, with effect from the 1st day of April, 2003,-
(a) for sub-section (/), the following sub-section shall be substituted, namely:-
'(/) Where in respect of any assessment year, the net result of the
computation under the head "Capital gains" is a loss to the assessee, the whole
loss shall, subject to the other provisions of this Chapter, be carried forward to
the following assessment year, and-
(a) in so far as such loss relates to a short-term capital asset, it shall
be set off against income, if any, under the head "Capital gains" assessable
for that assessment year in respect of any other capital asset;
(b) in so far as such loss relates to a long-term capital asset, it shall
be set off against income, if any, under the head "Capital gains" assessable
for that assessment year in respect of any other capital asset not being a
short-term capital asset;
(c) if the loss cannot be wholly so set off, the amount of loss not so
set off shall be carried forward to the following assessment year and so
on.';
(b) sub-section (3) shall be omitted.
29. In section 80G of the Income-tax Act, in sub-section (5Q, with effect from the 3rd
day of February, 2001,-
(a) in the opening portion, for the words "This sub-section", the words "This
section" shall be substituted and shall be deemed to have been substituted;
(b) in clause (Hi), for the words, figures and letters "on or before the 31 st day of
March, 2002", the words, figures and letters "on or before the 31 st day of March, 2003"
shall be substituted and shall be deemed to have been substituted;
(c) for clause (iv), the following clause shall be substituted and shall be deemed
to have been substituted, namely:-
"(rv) the amount of donation remaining unutilised on the 31st day of
March, 2003 is transferred to the Prime Minister's National Relief Fund on or
before the 31 st day of March, 2003;";
(</) in clause (v), for the words, figures and letters "on or before the 30th day of
June, 2002", the words, figures and letters "on or before the 30th day of June, 2003"
shall be substituted and shall be deemed to have been substituted.
30. In section 80GGA of the Income-tax Act, in sub-section (2), with effect from the 1 st
day of April, 2003,--
(;) in clause (c), in the opening portion, for the words "any sum paid by the
assessee in the previous year", the words, figures and letters "any sum paid by the
assessee in any previous year ending on or before the 31 st day of March, 2002" shall
be substituted;
(ii) in clause (c<;), in the opening portion, for the words "any sum paid by the
assessee in the previous year", the words, figures and letters "any sum paid by the
Amendment
of section
72A.
Amendment of
section 74.
Amendment of
section 80G.
18
THE GAZETTE OF INDIA EXTRAORDINARY
rpARTH—
Amendment
of section
80HHD.
Amendment
of section 80-
IA.
Amendment
of section 80-
IB.
assessee in any previous year ending on or before the 31 st day of March, 2002" shall
be substituted.
31. In section 80HHD of the Income-tax Act, in sub-section (7), with effect from the
1 st day of April, 2003-
(0 in clause (c), for the words "twenty per cent.", at both the places where they
occur, the words "twenty-five per cent." shall be substituted; ;
(if) in clause (d), for the words "ten per cent.", at both the places where they
occur, the words "fifteen per cent." shall be substituted.
32. In section 80-IA of the Income-tax Act, with effect from the 1st day of April, 2003,—
(a) in sub-section (2), after the words "industrial park", the words, brackets and
figures "or develops or develops and operates or maintains and operates a special
economic zone referred to in clause (Hi) of sub-section (4)" shall be inserted;
(b) in sub-section (7), for the words "Where the assessee is a person other than
a company or a co-operative society, the deduction", the words "The deduction" shall
be substituted.
33. In section 80-IB of the Income-tax Act, with effect from the I st day of April, 2003,-
(a) after sub-section (7), the following sub-sections shall be inserted, namely:-
"(7/4) The amount of deduction in the case of any multiplex theatre shall
bc-
(a) fifty per cent, of the profits and gains derived, from the business
of building, owning and operating a multiplex theatre, for a period of five
consecutive years beginning from the initial assessment year in any place:
Provided that nothing contained in this clause shall apply to a
multiplex theatre located at a place within the municipal jurisdiction (whether
known as a municipality, municipal corporation, notified area committee or
a cantonment board or by any other name) of Kolkata, Chennai, Delhi or
Mumbai;
(b) the deduction under clause (a) shall be allowable only if-
(/) such multiplex theatre is constructed at any time during the period
beginning on the 1st day of April, 2002 and ending on the 31st day of March,
2005;
(if) the business of the multiplex theatre is not formed by the splitting up,
or the reconstruction, of a business already in existence or by the transfer to a
new business of any building or of any machinery or of plant previously used for
any purpose;
(Hi) the assessee furnishes alongwith the return of income, the report of
an audit in such form and containing such particulars as may be prescribed and
duly signed and verified by an accountant, as defined in the Explanation below
sub-section (2) of section 288, certifying that the deduction has been correctly
claimed.
(7E) The amount of deduction in the case of any convention centre shall be-
ta) fifty per cent, of the profits and gains derived, by the assessee from the
business of building, owning and operating a convention centre, for a period of
five consecutive years beginning from the initial assessment year;
(b) the deduction under clause (a) shall be allowable only if-
(/) such convention centre is constructed at any time during the
period beginning on the 1 st day of April, 2002 and ending on the 31 st day
of March, 2005;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
19
(//) the business of the convention centre is not formed by the
splitting up, or the reconstruction, of a business already in existence or by
the transfer to a new business of any building or of any machinery or plant
previously used for any purpose;
(HI) the assessee furnishes alongwith the return of income, the report
of an audit in such form and containing such particulars as may be
prescribed, and duly signed and verified by an accountant, as defined in
the Explanation below sub-section (2) of section 288, certifying that the
deduction has been correctly claimed.";
(b) in sub-section (14),-
(/) after clause (a), the following clause shall be inserted, namely:-
'(aa) "convention centre" means a building of a prescribed area
comprising.of convention halls to be used for the purpose of holding
conferences and seminars, being of such size and number and having
such other facilities and amenities, as may be prescribed;';
(if) in clause (c), after sub-clause (h>), the following sub-clauses shall be
inserted, namely:-
"(v) in the case of a multiplex theatre, means the assessment year
relevant to the previous year in which a cinema hall, being a part of the
said multiplex theatre, starts operating on a commercial basis;
(vi) in the case of a convention centre, means the assessment year relevant
to the previous year in which the convention centre starts operating on a
commercial basis;";
(HI) after clause (d), the following clause shall be inserted, namely:-
'(da) "multiplex theatre" means a building of a prescribed area, comprising
of two or more cinema theatres and commercial shops of such size and number
and having such other facilities and amenities as may be prescribed;'.
34. After section SOL of the Income-tax Act, the following section shall be inserted
with effect from the 1 st day of April, 2003, namely:-
' 80M. (/) Where the gross total income of a domestic company, in any previous
year, includes any income by way of dividends from another domestic company, there
shall, in accordance with and subject to the provisions of this section, be allowed, in
computing the total income of such domestic company, a deduction of an amount
equal to so much of the amount of income by way of dividends from another domestic
company as does not exceed the amount of dividend distributed by the first-mentioned
domestic company on or before the due date.
(2) Where any deduction, in respect of the amount of dividend distributed by the
domestic company, has been allowed under sub-section (/) in any previous year, no deduction
shall be allowed in respect of such amount in any other previous year.
ExpIanation.-FoT the purposes of this section, the expression "due date" means
the date for furnishing the return of income under sub-section (7) of section 139.'.
35. In section 88 of the Income-tax Act, with effect from the 1 st day of April, 2003,-
(a) for sub-sfection (7), the following sub-section shall be substituted, namely:-
'(7) Subject to the provisions of this section, an assessee, being an
individual, or a Hindu undivided family, shall be entitled to a deduction, from the
amount of income-tax (as computed before allowing the deductions under this
Chapter) on his total income with which he is chargeable for any assessment
year, of an amount equal to-
Insertlon of
new section
ADM
Deduction in
respect of
certain inter-
corporate
dividends.
Amendment of
section 88.
20
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(/) in the case of an individual or a Hindu undivided family, whose
gross total income before giving effect to deductions under Chapter VI-A,
is one lakh fifty thousand rupees or less, twenty per cent, of the aggregate
of the sums referred to in sub-section (2):
Provided that an individual shall be entitled to a deduction of an
amount equal to thirty per cent, of the aggregate of the sums referred to in
sub-section (2) if his income under the head "Salaries"-
(a) does not exceed one lakh rupees during the previous year
before allowing the deduction under section 16; and'
(A) is not less than ninety per cent, of his gross total income,
as defined in sub-section (5) of section SOB;
(/•/) in the case of an individual or a Hindu undivided family, whose
gross total income before giving effect to deductions under Chapter VI-A,
is more than one lakh fifty thousand rupees but does not exceed five lakh
rupees, ten per cent, of the aggregate of the sums referred to in sub-
section (2);
(Hi) in the case of an individual or a Hindu undivided family, whose
gross total income before giving effect to deductions under Chapter VI-A,
exceeds five lakh rupees, nil.';
(b) in sub-section (2), the words "out of his income chargeable to tax"
shall be omitted;
(c) after sub-section (2), the following sub-section shall be inserted,
namely:-
"(i) The sums referred to in sub-section (2) shall be paid or deposited
at any time during the previous year, and the assessee, being an individual
or a Hindu undivided family, shall be entitled to a deduction under sub-
section (/) on so much of the aggregate of such sums paid or deposited as
does not exceed the total income of the assessee, chargeable to tax during
the relevant previous year.";
(d) for sub-section (5), the following sub-section shall be substituted,
namely:-
"(5) Where the aggregate of any sums specified in clause (/) to
clause (xvii) of sub-section (2) exceeds an amount of eighty thousand
rupees, a deduction under sub-section (/) shall be allowed with reference
to so much of the aggregate as does not exceed an amount of eighty
thousand rupees:
Provided that where the aggregate of any sums specified in clause
(/) to clause (xv) of sub-section (2) exceeds an amount of sixty thousand
rupees, a deduction under sub-section (7) in respect of such sums shall be
allowed with reference to so much of the aggregate as does not exceed an
amount of sixty thousand rupees:
Provided further that where the aggregate of any sums specified in
clause (xv) of sub-section (2) exceeds an amount of twenty thousand
rupees, a deduction under sub-section (/) in respect of such sums shall be
allowed with reference to so much of the aggregate as does not exceed an
amount of twenty thousand rupees.";
(e) sub-section (5A) shall be omitted;
(/) sub-section (tf) shall be omitted.
Si-r. 2)
THE GAZETTE OF INDIA EXTRAORDINARY
2 1
36. For section 89 of the Income-tax Act, the following section shall be substituted
and shall be deemed to have been substituted with effect from the 1st day of April, 1996,
namely:—
"89. Where an assessee is in receipt of a sum in the nature of salary, being paid
in arrears or in advance or is in receipt, in any one financial year, of salary for more than
twelve months or a payment which under the provisions of clause (3) of section 17 is
a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as
defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to
which his total income is assessed at a rate higher than that at which it would otherwise
have been assessed, the Assessing Officer shall, on an application made to him in this
behalf, grant such relief as may be prescribed.".
37. For section 92 of the Income-tax Act, the following section shall be substituted,
namely:-
"92. (/) Any income arising from an international transaction shall be computed
having regard to the arm's length price.
Explanation.-For the removal of doubts, it is hereby clarified that the allowance
for any expense or interest arising from an international transaction shall also be
determined having regard to the arm's length price.
(2) Where in an international transaction, two or more associated enterprises
enter into a mutual agreement or arrangement for the allocation or apportionment of, or
any contribution to, any cost or expense incurred or to be incurred in connection with
a benefit, service or facility provided or to be provided to any one or more of such
enterprises, the cost or expense allocated or apportioned to, or, as the case may be,
contributed by, any such enterprise shall be determined having regard to the arm's
length price of such benefit, service or facility, as the case may be.
(3) The provisions of this section shall not apply in a case where the computation
of income under sub-section (/) or the determination of the allowance for any expense
or interest under that sub-section, or the determination of any cost or expense allocated
or apportioned, or, as the case may be, contributed under sub-section (2), has the
effect of reducing the income chargeable to tax or increasing the loss, as the case may
be, computed on the basis of entries made in the books of account in respect of the
previous year in which the international transaction was entered into.".
38. In section 92 A of the Income-tax Act, in sub-section (2), for the brackets, figure
and words "(•?) Two enterprises shall be deemed to be associated enterprises if, at any time
during the previous year,-", the brackets, figures and words "(2) For the purposes of sub-
section (/), two enterprises shall be deemed to be associated enterprises if, at any time
during the previous year,-" shall be substituted.
39. In section 92C of the Income-tax Act,-
(a) in sub-section (2), for the proviso, the following proviso shall be substituted,
namely:-
"Provided that where more than one price is determined by the most
appropriate method, the arm's length price shall be taken to be the arithmetical
mean of such prices, or, at the option of the assessee, a price which may vary
from the arithmetical mean by an amount not exceeding five per cent, of such
arithmetical mean.";
(b) in sub-section (4), in the second proviso, after the words "from which tax has
been deducted", the words "or was deductible" shall be inserted.
Amendment oi
section 89.
Relief when
salary, etc. is
paid in arrears
or in advance
Substitution of
new section
for section
92.
Computation
of income
from
international
transaction
having regard
to arm's
length price.
Amendment
of section
92A.
Amendment
of section
92C.
22
THE GAZETTE OF INDIA EXTRAORDINARY
[PART If—
Amendment
or section
92F.
Amendment
of section
113.
Amendment
of section
115A.
Amendment of
section
11 SAC.
Amendment
of section
115ACA
Amendment of
section
115 AD.
Insertion of
new section
115BBB
Tax on Income
from units of
an open-ended
equity oriented
fund of the
Unit Trust of
India or of
Mutual Funds.
40. In section 92F of the Income-tax Act,-
(a) in clause {Hi), after the words "or the provision of services of any kind", the
words "or in carrying out any work in pursuance of a contract," shall be inserted;
(b) after clause (Hi), the following clause shall be inserted, namely:-
'(//7a) "permanent establishment", referred to in clause (Hi), includes a
fixed place of business through which the business of the enterprise is wholly or
partly carried on;';
(c) for clause (;VJ, the following clause shall be substituted; nahiely:-
'(/v) "specified date" shall have the same meaning as assigned to "due
date" in Explanation 2 below sub-section (7) of section 139;'.
41. In section 113 of the Income-tax Act, the following proviso shall be inserted with
effect from the I st day of June, 2002, namely:-
"Provided that the tax chargeable under this section shall be increased by a
surcharge, if any, levied by any Central Act and applicable in the assessment year
relevant to the previous year in which the search is initiated under section 132 or the
requisition is made under section 132A.".
42. In section 115A of the Income-tax Act, in sub-section (/), in clause (a), the words,
figures and letter "other than dividends referred to in section 115-0", at both the1 places
where they occur, shall be omitted with effect from the 1st day of April, 2003.
43. In section 115 AC of the Income-tax Act,-
(q) the words, figures and letter "other than dividends referred to in section
115-O", wherever they occur, shall be omitted with effect from the 1st day of April,
2003;
(b) in sub-section (7), in clause (b),~
(/) in sub-clause (Hi), for the word "re-issued", the words "issued or re-
issued" shall be substituted;
(//) sub-clause (/v) shall be omitted.
44. In section 115 ACA of the Income-tax Act, the words, figures and letter "other than
dividends referred to in section 115-0", wherever they occur, shall be omitted with effect
from the 1st day of April, 2003.
45. In section 115AD of the Income-tax Act, in sub-section (7), in clause (o),^he
words, figures and letter "other than income by way of dividends referred to in section 115-
O", shall be omitted with effect from the 1st day of April, 2003.
46. After section 115BBA of the Income-tax Act, the following section shall be inserted
with effect from the 1 st day of April, 2003, namely:-
' J15BBB. (7) Where the total income of an assessee includes any income from
units of an open-ended equity oriented fund of the Unit Trust of India or of a Mutual
Fund, the income-tax payable shall be the aggregate of-
(a) the amount of income-tax calculated on income from units of an open-
ended equity oriented fund of the Unit Trust of India or of a Mutual Fund, at the
rate often per cent.; and
(A) the amount of income-tax with which the assessee would have been
chargeable had his total income been reduced by the amount of income referred
to in clause (a).
(2) Nothing contained in sub-section (7) shall apply in relation to any income
from units of an open-ended equity oriented fund of the Unit Trust of India or of the
Mutual Fund arising after the 31 st day of March, 2003.
SEC.2]
TIHi GAZF.TTE Ol- INDIA EXTRAORDINARY
23
Explanation.-For the purposes of this section, the expressions "Mutual Fund",
"open-ended equity oriented fund" and "Unit Trust of India" shall have the meanings
respectively assigned to them in the Explanation to section 115T,\
47. In section 115C of the Income-tax Act, in clause (c), the words, figures and letter
"other than dividends referred to in section 115-0", shall be omitted with effect from the 1st
day of April, 2003.
48. In section 115JA of the Income-tax Act, in sub-section (2), in the Explanation, for
clause (Hi) and the Explanation thereto, the following shall be substituted and shall be
deemed to have been substituted with effect from the 1st day of April, 1997, namely:-
"(/;7) the amount of loss brought forward or unabsorbed depreciation, whichever
is less as per books of account.
Explanation.-For the purposes of this clause,-
(a) the loss shall not include depreciation:
(b) the provisions of this clause shall not apply if the amount of loss
brought forward or unabsorbed depreciation, is nil; or".
49. In section 115JB of the Income-tax Act,-
(a)lin sub-section (/), for the words, "the tax payable for the relevant previous
year shall be deemed to be seven and one-half per cent, of such book profit.", the
words "such book profit shall be deemed to be the total income of the assessee and the
tax payable by the assessee on such total income shall be the amount of income-tax at
the rate of seven and one-half per cent." shall be substituted and shall be deemed to
have been substituted with effect from the 1st day of April, 2001;
(h) in sub-section (2), in the Explanation below the second proviso,-
(/) in clause (h), after the words "by whatever name called", the words,
figures and letters ", other than a reserve specified under section 33 AC" shall
be inserted with effect from the 1st day of April, 2003;
(//) for clause (/) and the proviso, the following shall be substituted and
shall be ddemed to have been substituted with effect from the 1st day of April,
2001, namely:-
"(/) the amount withdrawn from any reserve or provision (excluding
a reserve created before the 1st day of April, 1997 otherwise than by way
of a debit to the profit and loss account), if any such amount is credited to
the profit and loss account:
Provided that where this section is applicable to an assessee in any
previous year, the amount withdrawn from reserves created or provisions
made in a previous year relevant to the assessment year commencing on
or after the 1st day of April, 1997 shall not be reduced from the book profit
unless the book profit of such year has been increased by those reserves
or provisions (out of which the said amount was withdrawn) under this
Explanation or Explanation below second proviso to section 115JA, as
the case may be; or";
(Hi) for clause (Hi) and the Explanation, the following shall be substituted
and shall be deemed to have been substituted with effect from the 1st1 day of
April, 2001, namely:-
"(///) the amount of loss brought forward or unabsorbed depreciation,
whichever is less as per books of account.
Explanation.-For the purposes of this clause,-
(a) the loss shall not include depreciation;
(h) the provisions of this clause shall not apply if the amount
of loss brought forward or unabsorbed depreciation, is nil; or".
'Vmcndmenl
nl" section
115C
Amendment
of section
1 15JA
Amendment
of section
I 15JH
24
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment
of section
I 15-0.
Amendment
of section
115-R.
Amendment
of section
119.
Amendment
of section
132
50. In section 115-O of the Income-tax Act, in sub-section (/), after the words, figures
and letters "on or after the 1st day of June, 1997", the words, figures and letters "but on or
before the 31st day of March, 2002" shall be inserted with effect from the 1st day of April,
2003.
51. In section 115R of the Income-tax Act, with effect from the 1st day of April, 2003,-
(a) in sub-section (/), for the words "any amount of income distributed by the
Unit Trust of India to its unit holders", the words, figures and letters "any amount of
income distributed on or before the 31 st day of March, 2002 by the Unit Trust of India
to its unit holders" shall be substituted;
(b) in sub-section (2), for the words "any amount of income distributed by a
Mutual Fund to its unit holders", the words, figures and letters "any amount of income
distributed on or before the 31st day of March, 2002 by a Mutual Fund to its unit
holders" shall be substituted.
52. In section 119 of the Income-tax Act, in sub-section (2), in clause (a), after the
figures " 155", the figures and letters ", 158BFA" shall be inserted with effect from the 1 st day
of June, 2002.
S3. In section 132 of the Income-tax Act, with effect from the 1st day of June, 2002,-
(a) in sub-section (/), after clause {iia), the following clause shall be inserted,
namely:-
"(iib) require any person who is found to be in possession or control of
any books of account or other documents maintained in the form of electronic
record as defined in clause (0 of sub-section (/) of section 2 of the Information
Technology Act 2000, to afford the authorised officer the necessary facility to
inspect such books of account or other documents;";
(b) sub-sections (5) to (7) shall be omitted;
(c) in sub-section (8), for the words "one hundred and eighty days from the date
of the seizure", the words, brackets, letters and figures "thirty days from the date of the
order of assessment under clause (c) of section 158BC" shall be substituted;
(d) for sub-section (8A), the following sub-section shall be substituted, namely:-
"(8A) An order under sub-section (3) shall not be in force for a period
exceeding sixty days from the date of the order.";
(e) for sub-section (9A), the following sub-section shall be substituted, namely;-
"(9A) Where the authorised officer has no jurisdiction over the person
referred to in clause (a) or clause (h) or clause (c) of sub-section (/), the books of
account or other documents, or any money, bullion, jewellery or other valuable
article or thing (hereafter in this section and in sections 132Aand 132B referred
to as assets) seized under that sub-section shall be handed over by the authorised
officer to the Assessing Officer having jurisdiction over such person within a
period of sixty days from the date on which the last of the authorisations for
search was executed and thereupon the powers exercisable by the authorised
officer under sub-section (<9) or sub-section (9) shall be exercisable by such
Assessing Officer.";
(/) sub-sections {11), {11 A) and {12) shall be omitted;
(g) for Explanation 1 below sub-section {14), the following Explanation shall
be substituted, namely:-
iExplanaliori"J.-For the purposes of sub-section (9A), "execution of an
authorisation for search" shall have the same meaning as assigned to it in
Explanation 2 to section 158BE.1.
21 of 2000
27 of 1987
35 of 1987
18 of 1958
45 of 1974
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
25
54. For section 132B of the Income-tax Act, the following section shall be substituted
with effect from the 1 st day of June, 2002,—
' 132B. (7) The assets seized under section 132 or requisitioned under section
132A may be dealt with in the following manner, namely:—
(0 the amount of any existing liability under this Act, the Wealth-tax Act,
1957, the Expenditure-tax Act, 1987, the Gift-tax Act, 1958 and the Interest-tax
Act, 1974, and the amount of the liability determined on completion of the
assessment under Chapter XIV-B for the block period (including any penalty
levied or interest payable in connection with such assessment) and in respect of
which such person is in default or is deemed to be in default, may be recovered
out of such assets:
Provided that where the nature and source of acquisition of any such
asset is explained to the satisfaction of the Assessing Officer, the amount of any
existing liability referred to in this clause may be recovered out of such asset and
the remaining portion, if any, of the asset may be released, with the prior approval
of the Chief Commissioner or Commissioner, to the person from whose custody
the assets were seized:
Provided further that such asset or any portion thereof as is referred to in
the first proviso shall be released within a period of one hundred and twenty
days from the date on which the last of the authorisations for search under
section 132 or for requisition under section 132A, as the case may be, was
executed;
00 if the assets consist solely of money, or partly of money and partly of
other assets, the Assessing Officer may apply such money in the discharge of
the liabilities referred to in clause (0 and the assessee shall be discharged of
such liability to the extent of the money so applied;
O'O'the assets other than money may also be applied for the discharge of
any such liability referred to in clause (0 as remains undischarged and for this
purpose such assets shall be deemed to be under distraint as if such distraint
was effected by the Assessing Officer or, as the case may be, the Tax Recovery
Officer under authorisation from the Chief Commissioner or Commissioner under
sub-section (5) of section 226 and the Assessing Officer or, as the case may be,
the Tax Recovery Officer may recover the amount of such liabilities by the sale of
such assets and such sale shall be effected in the manner laid down in the Third
Schedule.
(2) Nothing contained in sub-section (7) shall preclude the recovery of the
amount of liabilities aforesaid by any other mode laid down in this Act.
(3) Any assets or proceeds thereof which remain after the liabilities referred to in
clause (0 of sub-section (7) are discharged shall be forthwith made over or paid to the
persons from whose custody the assets were seized.
{4) (a) The Central Government shall pay simple interest at the rate of eight per
cent, per annum on the amount by which the aggregate amount of mousy seized under
section 132 or requisitioned under section 132A, as reduced by the amount of money,
if any, released under the first proviso to clause (0 of sub-section (7), and of the
proceeds, if any, of the assets sold towards the discharge of the existing liability
referred to in clause (;") of sub-section (7), exceeds the aggregate of the amount required
to meet the liabilities referred to in clause (0 of sub-section (7) of this section.
(b) Such interest shall run from the date immediately following the expiry of the
period of one hundred and twenty days from the date on which the last of the
authorisations for search under section 132 or requisition under section 132A was
executed to the date of completion of the assessment under Chapter XIV-B.
Substitution of
new section for
section 132B.
Application of
seized or
requisitioned
assets.
26
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment of
section 133A.
Amendment of
section 139.
Explanation.-In this section,—
(/) "block period" shall have the meaning assigned to it in clause (a) of
section 158B;
(//•) "execution of an authorisation for search or requisition" shall have the
same meaning as assigned to it in Explanation 2 to section 158BE.1,
55. In section 133A of the Income-tax Act, with effect from the 1 st day of June, 2002,-
(a) in sub-section (J), after clause (/), the following clause shall be inserted,
namely:—
"(ia) impound and retain in his custody for such period as he thinks fit any
books of account or other documents inspected by him:
Provided that such income-tax authority shall not—
(a) impound any books of account or other documents except after
recording his reasons for so doing; or
(b) retain in his custody any such books of account or other
documents for a period exceeding fifteen days (exclusive of holidays)
without obtaining the approval of the Chief Commissioner or Director
General or Commissioner or Director therefor, as the case may be.";
(b) in sub-section (4), the words "any books of account or other documents
or" shall be omitted.
56. In section 139 of the Income-tax Act,—
(a) after sub-section (/), the following sub-section shall be inserted, namely:—
\IA) Without prejudice to the provisions of sub-section (/), any person,
being an individual who is in receipt of income chargeable under the head
"Salaries" may, at his option, furnish a return of his income for any previous year
to his employer, in accordance with such scheme as may be specified by the
Board in this behalf, by notification in the Official Gazette, and subject to such
conditions as may be specified therein, and such employer shall furnish all returns
of income received by him on or before the due date, in such form (including on
a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer
readable media) and manner as may be specified in that scheme, and in such
case, any employee who has filed a return of his income to his employer shall be
deemed to have furnished a return of income under sub-section (/), and the
provisions of this Act shall apply accordingly.';
(b) after sub-section (4B), the following sub-section shall be inserted with
effect from the 1 st day of April, 2003, namely:—
"(4Q Every—
{a) scientific research association referred to in clause (2/) of
section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of
section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or trust or
institution referred to in sub-clause (v) or any university or other educational
institution referred to in sub-clause (v;) or arvy hospital or other medical
institution referred to in sub-clause (via) of clause (23C) of section 10;
(J) trade union referred to in sub-clause (a) or association referred to
in sub-clause (b) of clause (24) of section 10,
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
27
shall, if the total income in respect ot which such scientific research association,
news agency, association or institution, fund or trust or university or other
educational institution or any hospital or other medical institution or trade union
is assessable, without giving effect to the provisions of section 10, exceeds the
maximum amount which is not chargeable to income-tax, furnish areturn of such
income of the previous year in the prescribed form and verified in the prescribed
manner and setting forth such other particulars as may be prescribed and all the
provisions of this Act shall, so far as may be, apply as if it were a return required
to be furnished under sub-section (/).";
(c) in sub-section (9), in the Explanation, in clause (c), in sub-clause (j), the
following proviso shall be inserted with effect from the I st day of June, 2002, namely.—
"Provided that where the return is not accompanied by proof of the tax, if
any, claimed to have been deducted at source, the return of income shall not be
regarded as defective if—
(a) a certificate for tax deducted was not furnished under section
203 to the person furnishing his return of income;
(b) such certificate is produced within a period of two years specified
under sub-section (14) of section 155;".
57. In section 143 of the Income-tax Act,—
(a) for sub-section (2), the following sub-section shall be substituted with effect
from the 1st day of June, 2002, namely:—
"(2) Where a return has been furnished under section 139, or in response
to a notice under sub-section (/) of section 142, the Assessing Officer shall,—
(0 where he has reaspn to believe that any claim of loss, exemption,
deduction, allowance or relief made in the return is inadmissible, serve on
the assessee a notice specifying particulars of such claim of loss, exemption,
deduction, allowance or relief and require him, on a date to be specified
therein to produce, or cause to be produced, any evidence or particulars
specified therein or on which the assessee may rely, in support of such
claim;
(//') notwithstanding anything contained in clause (i), if he considers
it necessary or expedient to ensure that the assessee has not under-stated
the income or has not computed excessive loss or has not under-paid th«
tax in any manner, serve on the assessee a notice requiring him, on a date
to be specified therein, either to attend his office or to produce, or cause tc
be produced there, any evidence on which the assessee may rely in suppon
of the return:
Provided that no notice under this sub-section shall be served or
the assessee after the expiry of twelve months from the end of the montr
in which the return is furnished.";
(b) for sub-section (3), the following sub-section shall be substituted, wit!
effect from the 1st day of June, 2002, namely:—
"(.?) On the day specified in the notice,—
(i) issued under clause (I) of sub-section (2), or as soon afterward
as may be, after hearing such evidence and after taking into account sucl
particulars as the assessee may produce, the Assessing Officer shall, b]
an order in writing, allow or reject the claim or claims specified in sucl
notice and make an assessment determining the total income or los
accordingly, and determine the sum payable by the assessee on the basi
of such assessment;
Amendment
of section
143.
28
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment ol
section 153.
(//) issued under clause (if) of sub-section (2), or as soon afterwards
as may be, after hearing such evidence as the assessee may produce and
such other evidence as the Assessing Officer may require on specified
points, and after taking into account all relevant material which he has
gathered, the Assessing Officer shall, by an order in writing, make an
assessment of the total income or loss of the assessee, and determine the
sum payable by him or refund of any amount due to him on the basis of
such assessment.";
(c) after sub-section (J), the following proviso shall be inserted with effect from
the 1st day of April, 2003, namely:—
"Provided that in the case of a—
(a) scientific research association referred to in clause (21) of
section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of
section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (/v) or trust or
institution referred to in sub-clause (v) or any university or other educational
institution referred to in sub-clause (vi) or any hospital or other medical
institution referred to in sub-clause (via) of clause (23C) of section
10,
which is required to furnish the return of income under sub-section (4C) of
section 139, no order making an assessment of the total income or loss of such
scientific research association, news agency, association or institution or fund
or trust or university or other educational institution or any hospital or other
medical institution, shall be made by the Assessing Officer, without giving effect
to the provisions of section 10, unless—
(0 the Assessing Officer has intimated the Central Government or
the prescribed authority the contravention of the provisions of clause
(21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (/v) or
sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23Q of
section 10, as the case may be, by such scientific research association,
news agency, association or institution or fund or trust or university or
other educational institution or any hospital or other medical institution,
where in his view such contravention has taken place; and
(if) the approval granted to such scientific research association or
other association or institution or university or other educational institution
or hospital or other medical institution has been withdrawn or notification
issued in-respect of such news agency or fund or trust or institution has
been rescinded.".
58. In section 153 of the Income-tax Act, in sub-section (3), in Explanation 1, after
clause (H), the following clause shall be inserted with effect from the 1st day of April, 2003,
namely:—
"(Ha) the period commencing from the date on which the Assessing Officer
intimates the Central Government or the prescribed authority, the contravention of the
provisions of clause (27) or clause (22B) or clause (23A) or clause (2 3B) or sub-clause
(iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section
10, under clause (0 of the proviso to sub-section (3) of section 143 and ending with the
date on which the copy of the order withdrawing the approval or rescinding the notification,
as the case may be, under those clauses is received bythe Assessing Officer;".
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
29
59. In section 155 of the Income-tax Act, after sub-section (13) and before the
Explanation, the following sub-sections shall be inserted with effect from the 1st day of
June, 2002, namely:—
"{14) Where in the assessment for any previous year or in any intimation of
deemed intimation under sub-section (/) of section 143 for any previous year, credit
for tax deducted in accordance with the provisions of section 199 has not been given
on the ground that the certificate furnished under section 203 was not filed with the
return and subsequently such certificate is produced before the Assessing Officer
within two years from the end of the assessment year in which such income is
assessable, the Assessing Officer shall amend the order of assessment or any intimation
or deemed intimation under sub-section (/) of section 143, as the case may be, and the
provisions of section 154 shall, so far as may be, apply thereto:
Provided that nothing contained in this sub-section shall apply unless the income
from which the tax has been deducted has been disclosed in the return of income filed
by the assessee for the relevant assessment year.
(15) Where in the assessment for any year, a capital gain arising from the
transfer of a capital asset, being land or building or both, is computed by taking the full
value of the consideration received or accruing as a result of the transfer to be the
value adopted or assessed by any authority of a State Government for the purpose of
payment of stamp duty in accordance with sub-section (7) of section 50C, and
subsequently such value is revised in any appeal or revision or reference referred to in
clause (6) of sub-section (2) of that section, the Assessing Officer shall amend the
order of assessment so as to compute the capital gain by taking the full value of the
consideration to be the value as so revised in such appeal or revision or refe'rence; and
the provisions of section 154 shall, so far as may be, apply thereto, and the period of
four years shall be reckoned from the end of the previous year in which the order
revising the value was passed in that appeal or revision or reference.".
60. In section 158A of the Income-tax Act, with effect from the 1 st day of June, 2002,—
(a) in sub-section (/),-
(0 for the words and figures "before the Supreme Court on a reference
under section 257 or in appeal under section 261", the words, figures and letter
"before the Supreme Court on a reference under section 257 or in appeal under
section 260A before the High Court or in appeal under section 261 before the
Supreme Court" shall be substituted;
(//) for the words and figures "for a reference before the High Court under
section 256 or the Supreme Court under section 257 or in appeal before the
Supreme Court under section 261", the words, figures and letter "in appeal
before the High Court under section 260A or in appeal before the Supreme Court
under section 261" shall be substituted;
(b) in sub-section (4), in clause (b), for the words and figures "for a reference
before the High Court under section 256 or the Supreme Court under section 257 or in
appeal before the Supreme Court under section 261", the words, figures and letter "in
appeal before the High Court under section 260A or the Supreme Court under section
261" shall be substituted.
61. In section 158B of the Income-tax Act, in clause (b), after the words "for the
purposes of this Act", the words ", or any expense, deduction or allowance claimed under
this Act which is found to be false" shall be inserted with effect from the 1st day of June,
2002.
62. In section 158BB of the Income-tax Act, in sub-section (7), with effect from the 1st
day of June, 2002,-
(/) for the portion beginning with the words and figure "in accordance with the
provisions of Chapter IV," and ending with the words "as are available with the Assessing
Amendment
of section
155.
Amendment
of section
I58A.
Amendment
of section
158B.
Amendment
of section
1J8BB.
30
THE GAZETTE OF INDIA EXTRAORDINARY
|PART II—
Amendment of
section 158BC.
Amendment of
section 158BD,
Amendment of
section 158BE.
Officer", the words "in accordance with the provisions of this Act, on the basis of
evidence found as a result of search or requisition of books of account or other
documents and such other materials or information as are available with the Assessing
Officer and relatable to such evidence" shall be substituted;
(//•) in clause (a), for the words "have been concluded", the words "have been
concluded prior to the date of commencement of the search or the date of requisition"
shall be substituted;
(Hi) in clause (b), for the words and figures "or section 147", the words, brackets
and figures "or in response to a notice issued under sub-section (I) of section 142 or
section 148" shall be substituted;
(iv) for clause (c), the following clauses shall be substituted, namely:-
"(c) where the due date for filing a return of income has expired, but no
return of income has been filed,—
(A) on the basis of entries as recorded in the books of account and
other documents maintained in the normal course on or before the date of
the search or requisition where such entries result in computation of loss
for any previous year falling in the block period; or
(B) on the basis of entries as recorded in the books of account and
other documents maintained in the normal course on or before the date of
the search or requisition where such income does not exceed the maximum
amount not chargeable to tax for any previous year falling in the block
period;
(ca) where the due date for filing a return of income has expired, but
no return of income has been filed, as nil, in cases not falling under clause
(c);";
(v) in the Explanation, in clause (a),-
(/) for the word and figures "Chapter IV", the words "this Act" shall be
substituted;
(ii) the following proviso shall be inserted, namely:-
"Provided that in computing deductions under Chapter VI-A for the
purposes of the said aggregation, effect shall be given to set off" of bfought
forward losses under Chapter VI or unabsorbed depreciation under sub-
section (2) of section 32;".
63. In section 158BC of the Income-tax Act, with effect from the 1st day of June,
2002-
(a) in clause (b), for the words and figures "and section 144", the words and
figures ", section 144 and section 145" shall be substituted;
(b) for clause (d), the following clause shall be substituted, namely:-
"(c/) the assets seized under section 132 or requisitioned under section
132A shall be dealt with in accordance with the provisions of section 132B.".
64. In section 158BD of the Income-tax Act, after the words "that Assessing Officer
shall proceed", the words, figures and letters "under section 158BC" shall be inserted with
effect from the 1 st day of June, 2002.
65. In section 158BE of the Income-tax Act, for Explanation 7, the following shall be
substituted with effect from the 1 st day of June, 2002, namely:-
"Explanation /.-In computing the period of limitation for the purposes of this
section,-
(0 the' period during which the assessment proceeding is stayed by an
order or injunction of any court; or
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
3 1
(//) the period commencing from the day on which the Assessing Officer
directs the assessee to get his accounts audited under sub-section. (2A) of
section 142 and ending on the day on which the assessee is required to furnish
a report of such audit under that sub-section;or
(Hi) the time taken in reopening the whole or any part of the proceeding or
giving an opportunity to the assessee to be re-heard under the proviso to section
129; or
(rv) in a case where an application made before the Settlement Commission
under section 245C is rejected by it or is not allowed to be proceeded with by it,
the period commencing on the date on which such application is made and
ending with the date on which the order under sub-section (/) of section 245D is
received by the Commissioner under sub-section (2) of that section,
shall be excluded:
Provided that where immediately after the exclusion of the aforesaid period,
the period of limitation referred to in sub-section (/) or sub-section (2) available
to the Assessing Officer for making an order under clause (c) of section 158BC is
less than sixty days, such remaining period shall be extended to sixty days and
the aforesaid period of limitation shall be deemed to be extended accordingly.".
66. In Chapter XV of the Income-tax Act, after section 174 and before the sub-heading
"K,-Persons trying to alienate their assets", the following sub-heading and section shall be
inserted, namely—
"JA.-Association of persons or body of individuals or artificial juridical person
formed for a particular event or purpose
174A. Notwithstanding anything contained in section 4, where it appears to the
Assessing Officer that any association of persons or a body of individuals or an
artificial juridical person, formed or established or incorporated for a particular event or
purpose is likely to be dissolved in the assessment year in which such association of
persons or a body of individuals or an artificial juridical person was formed or established
or incorporated or immediately after such assessment year, the total income of such
person or body or juridical person for the period from the expiry of the previous year
for that assessment year up to the date of its dissolution shall be chargeable to tax in
that assessment year, and the provisions of sub-sections (2) to (<5) of section 174 shall,
so far as may be, apply to any proceedings in the case of any such person as they
apply in the case of persons leaving India.".
67. In section 190 of the Income-tax Act, after the words "by advance payment", the
words, brackets, figures and letter "or by payment under sub-section (1A) of section 192"
shall be inserted with effect from the 1 st day of June, 2002.
68. In section 192 of the Income-tax Act, with effect from the 1 st day of June, 2002,-
(a) after sub-section (/), the following sub-sections shall be inserted, namely:-
"(1A) Without prejudice to the provisions contained in sub-section (/),
the person responsible for paying any income in the nature of a perquisite which
is not provided for by way of monetary payment, referred to in clause (2) of
section 17, may pay, at his option, tax on the whole or part of such income
without making any deduction therefrom at the time when such tax was otherwise
deductible under the provisions of sub-section (/).
Insertion of
new section
174A.
Assessment of
association of
persons or
body of
Individuals or
artificial
Juridical person
formed for a
particular event
or purpose.
Amendment of
section 190.
Amendment of
section 192.
32
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment
of section
193.
Amendment
of section
194.
Amendment
of section
194A.
Amendment
of section
194C.
(IB) For the purpose of paying tax under sub-section (1A), tax shall be
determined at the average of income-tax computed on the basis of the rates in
force for the financial year, on the income chargeable under the head "Salaries"
including the income referred to in sub-section {IA), and the tax so payable shall
be construed as if it were, a tax deductible at source, from the income under the
head "Salaries" as per the provisions of sub-section (/), and shall be subject to
the provisions of this Chapter."; ,
(b) in sub-section (J), after the words, brackets and figure "sub-section (/)", the
words, brackets, figure and letter "or sub-section (IA)" shall be inserted.
69. In section 193 of the Income-tax Act, in the proviso, after clause (v) and before the
Explanation, the following clauses shall be inserted with effect from the 1st day of June,
2002, namely:-
"(v/) any interest payable to the Life Insurance Corporation of India established
under the Life Insurance Corporation Act, 1956, in respect of any securities owned by
it or in which it has full beneficial interest; or
(v/7) any interest payable to the General Insurance Corporation of India (hereafter in
this clause referred to as the Corporation) or to any of the four new companies (hereafter in
this clause referred to as such company), formed by virtue of the schemes framed under
sub-section (/) of section 16 of the General Insurance Business (Nationalisation) Act, 1972,
in respect of any securities owned by the Corporation or such company or in which the
Corporation or such company has full beneficial interest; or
(v/i'O any interest payable to any other insurer in respect of any securities owned
by it or in which it has full beneficial interest.".
70. In section 194 of the Income-tax Act, for the first and second provisos, the following
proviso shall be substituted with effect from the 1st day of June, 2002, namely:-
"Provided that the provisions of this section shall not apply to such income
credited or paid to-
(a) the Life Insurance Corporation of India established under the Life
Insurance Corporation Act, 1956, in respect of any shares owned by it or in
which it has full beneficial interest;
(b) the General Insurance Corporation of India (hereafter in this proviso
referred to as the Corporation) or to any of the four companies (hereafter in this
proviso referred to as such company), formed by virtue of the schemes framed
under sub-section (/) of section 16 of the General Insurance Business
(Nationalisation) Act, 1972, in respect of any shares owned by the Corporation
or such company or in which the Corporation or such company has full beneficial
interest;
(c) any other insurer in respect of any shares owned by it or in which it has
full beneficial interest.".
71. In section 194A of the Income-tax Act, after sub-section (/) and before the
Explanation, the following proviso shall be inserted with effect from the 1st day of June,
2002, namely:-
"Provided that an individual or a Hindu undivided family, whose total sales,
gross receipts or turnover from the business or profession carried on by him exceed
the monetary limits specified under clause (a) or clause (b) of section 44AB during the
financial year immediately preceding the financial year in which such interest is credited
or paid, shall be liable to deduct income-tax under this section.".
72. In section 194C of the Income-tax Act, after sub-section (2) and before Explanation 1,
the following proviso shall be inserted with effect from the 1st day of June, 2002, namely:-
"Provided that an individual or a Hindu undivided family, whose total sales,
gross receipts or turnover froirfthe business or profession carried on by him exceed
31 of 1956.
57 of 1956.
31 of 1956.
57 of 1972.
Sec. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
3 3
52 of 1963.
the monetary limits specified under clause (a) or clause (h) of section 44AB during the
financial year immediately preceding the financial year in which such sum is credited or
paid to the account of the sub-contractor, shall be liable to deduct income-tax under
this sub-section." .
73. In section 194H of the Income-tax Act, with effect from the 1 st day of June, 2002,-
(a) for the words "ten per cent.", the words "five per cent." shall be substituted;
(b) after the proviso and before the Explanation, the following proviso shall be
inserted, namely:-
"Provided further that an individual or a Hindu undivided family, whose
total sales, gross receipts or turnover from the business or profession carried on
by him exceed the monetary limits specified under clause (a) or clause (b) of
section 44AB during the financial year immediately preceding the financial year
in which such commission or brokerage is credited or paid, shall be liable to
deduct income-tax under this section.".
74. In section 194-1 of the Income-tax Act, after the proviso and before the Explanation,
the following proviso shall be inserted with effect from the 1 st day of June, 2002, namely:-
"Provided further that an individual or a Hindu undivided family, whose total
sales, gross receipts or turnover from the business or profession carried on by him
exceed the monetary limits specified under clause {a) or clause (b) of section 44AB
during the financial year immediately preceding the financial year in which such income
by way of rent is credited or paid, shall be liable to deduct income-tax under this
section.".
75. In section 194J of the Income-tax Act, in sub-section (/), after the proviso, the
following proviso shall be inserted with effect from the 1 st day of June, 2002, namely:-
"Provided further that an individual or a Hindu undivided family, whose total
sales, gross receipts or turnover from the business or profession carried on by him
exceed the monetary limits specified under clause (a) or clause (b) of section 44AB
during the financial year immediately preceding the financial year in which such sum
by way of fees for professional services or technical services is credited or paid, shall
be liable to deduct income-tax under this section.".
76. For section 194K of the Income-tax Act, the following section shall be substituted
with effect from the 1st day of June, 2002, namely:-
' 194K.. Where any income is payable to a resident in respect of units of a Mutual
Fund specified under clause (23D) of section 10 or of the Unit Trust of India, the
person responsible for making the payment shall, at the time of credit of such income
to the account of payee or at the time of payment thereof in cash or by issue of a
cheque or draft pr by any other mode, whichever is earlier, deduct income-tax thereon
at the rate often per cent.
Explanatlon.-FoT the purposes of this section,-
(a) "Unit Trust of India" means the Unit Trust of India established under
the Unit Trust of India Act, 1963;
(6) where any income as aforesaid is credited to any account, whether
called "Suspense account" or by any other name, in the books of account of the
person liable to pay such income, such crediting shall be deemed to be credit of
such income to the account of the payee and the provisions of this section shall
apply accordingly.'.
77. In section 195 of the Income-tax Act, in sub-section (7), the second proviso shall be
omitted with effect from the 1st day of June, 2002.
Amendment of
section 194H.
Amendment
of section
194-1.
Amendment of
section 194J.
Substitution of
new section for
section 194K.
Income in
respect of
units.
Amendment of
section 195.
34
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment of
section 195A.
Amendment of
section 196A.
Amendment of
section 196C.
Amendment of
section 196D.
Amendment of
section 197A.
Amendment of
section 198.
Amendment of
section 199.
Amendment
of section
200.
Amendment
of section 201
Amendment
of section
203.
78. In section 195 A of the Income-tax Act, for the words "Where, under an agreement",
the words, brackets, figures and letter "In a case other than that referred to in sub-section
(JA) of section 192, where under an agreement" shall be substituted with effect from the 1 st
day of June, 2002.
79. In section 196 A of the Income-tax Act, in sub-section (7), the proviso shall be
omitted with effect from the 1 st day of June, 2002.
80. In section 196C of the Income-tax Act, the proviso shall be omitted with effect from
the 1st day of June, 2002.
81. In section 196D of the Income-tax Act, in sub-section (7), the proviso shall be
omitted with effect from the 1 st day of June, 2002.
82. In section 197A of the Income-tax Act, after sub-section (1A), the following sub-
section shall be inserted with effect from the 1st day of June, 2002, namely :-
"(IB) The provisions of this section shall not apply where the amount of any
income of the nature referred to in sub-section (/) or sub-section (1A), as the case may
be, or the aggregate of the amounts of such incomes credited or paid or likely to be
credited or paid during the previous year in which such income is to be included
exceeds the maximum amount which is not chargeable to income-tax.".
83. In section 198 of the Income-tax Act, the following proviso shall be inserted with
effect from the 1st day of June, 2002, namely:-
"Provided that the sum being the tax paid, under sub-section (1A) of section 192
for the purpose of computing^he income of an assessee, shall not be deemed to be
income received.".
84. Section 199 of the Income-tax Act shall be re-numbered as sub-section (7) thereof,
and after sub-section (7) as so re-numbered, the following sub-section shall be inserted with
effect from the 1 st day of June, 2002, namely :-
"(2) Any sum referred to in sub-section (1A) of section 192 and paid to the
Central Government shall be treated as the tax paid on behalf of the person in respect
of whose income, such payment of tax has been made and credit shall be given to him
for the amount so paid on production of the certificate furnished under section 203 in
the assessment under this Act for the assessment year for which such income is
assessable.".
85. Section 200 of the Income-tax Act shall be re-numbered as sub-section (7) thereof,
and after sub-section (7) as so re-numbered, the following sub-section shall be inserted with
effect from the 1 st day of June, 2002, namely:-
"(2) Any person being an employer, referred to in sub-section (1A) of section
192 shall pay, within the prescribed time,thetaxtothe credit of the Central Government
or as the Board directs.".
86. In section 201 of the Income-tax Act, in sub-section (7), after the words "If any
such person", the words and figures "referred to in section 200" shall be inserted with
effect from the 1 st day of June, 2002.
87. Section 203 of the Income-tax Act shall be re-numbered as sub-section (7) thereof,
and after sub-section (7) as so re-numbered, the following sub-section shall be inserted with
effect from the 1 st day of June, 2002, namely:-
"(2) Every person, being an employer, referred to in sub-section (7^4) of section
192 shall, within such period, as may be prescribed, furnish to the person in respect of
whose income such payment of tax has been made, a certificate to the effect that tax
has been paid to the Central Government, and specify the amount so paid, the rate at
which the tax has been paid and such other particulars as may be prescribed.".
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
3 5
88. After section 206C of the Income-tax Act, the following section shall be inserted
with effect from the 1st day of June, 2002, namely:-
"206CA. (7) Every person collecting tax in accordance with the provisions of
section 206C, shall, within such time as may be prescribed, apply to the Assessing
Officer for the allotment of a tax-collection account number.
(2) Where a tax collection account number has been allotted to a person, such
person shall quote such number-
(a) in all challans for the payment of any sum in accordance with the
provisions of sub-section (3) of section 206C;
(b) in all certificates furnished under sub-section (5) of section 206C;
(c) in all the returns delivered in accordance with the provisions of sub-
section (5A) or sub-section (5B) of section 206C to any income-tax authority;
and
(d) in all other documents pertaining to such transactions as may be
prescribed in the interest of revenue.".
89. In section 210 of the Income-tax Act, in sub-section (3), the words, brackets and
figure "and who has not paid any advance tax under sub-section (/)" shall be omitted with
effect from the 1 st day of June, 2002.
90. In section 244A of the Income-tax Act, in sub-section (/), in clauses (a) and (6), for
the words "three-fourth per cent.", the words "two-third per cent." shall be substituted with
effect from the 1st day of June, 2002.
91. In section 245C of the Income-tax Act, sub-section (/£) shall be omitted with effect
from the 1 st day of June, 2002.
92. In section 245D of the Income-tax Act, with effect from the 1 st day of June, 2002,-
(a) in sub-section (/), for the words "the Settlement Commission may, by order,
allow the application to be proceeded with or reject the application", the words, figures
and letter "the Settlement Commission, shall, where it is possible, by order, reject the
application or allow the application to be proceeded with within a period of one year
from the end of the month in which such application was made under section 245C"
shall be substituted;
(b) after sub-section (4), the following sub-section shall be inserted, naraely:-
"(4A) In every application allowed to be proceeded with under sub-
section (/), the Settlement Commission shall, where it is possible, pass an
order under sub-section (4) within a period of four years from the end of the
financial year in which such application was allowed to be proceeded with.".
93. Section 245HA of the Income-tax Act shall be omitted with effect from the 1 st day
of June, 2002.
94. In section 252 of the Income-tax Act, for sub-section (5), the following sub-section
shall be substituted, namely:-
"(3) The Central Government shall appoint the Senior Vice-President or one ol
the Vice-Presidents of the Appellate Tribunal to be the President thereof".
95. For section 269T of the Income-tax Act, the following section shall be substituted
with effect from the 1st day of June, 2002, namely:^
'269T. No branch of a banking company or a co-operative bank and no othei
company or co-operative society and no firm or other person shall repay any loan oi
deposit mode with it otherwise than by an account payee cheque or account paye<
bank draft drawn in the name of the person who has made the loan or deposit if~
Insertlon of
new section
206CA.
Tax-
collection
account
number.
Amendment
of section
210.
Amendment
of section
244A.
Amendment
of section
245C.
Amendment
of section
245D.
Omission of
section 245HA.
Amendment of
section 252.
Substitution of
new section for
section 269T.
Mode of
repayment of
certain loans or
deposits.
36
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
10 of 1949.
Insertion of
new section
269UP.
Chapter not to
apply where
transfer of
immovable
property
effected after
certain date.
Amendment of
section 271.
(a) the amount of the loan or deposit together with the interest, if any,
payable thereon, or
(b) the aggregate amount of the loans or deposits held by such person
with the branch of the banking company or co-operative bank or, as the case
may be, the other company or co-operative society or the firm, or other person
either in his own name or jointly with any other person on the date of such
repayment together with the interest, if any, payable on such loans or deposits,
is twenty thousand rupees or more:
Provided that where the repayment is by a branch of a banking company or co-
operative bank, such repayment may also be made by crediting the amount of such
loan or deposit to the savings bank account or the current account (if any) with such
branch of the person to whom such loan or deposit has to be repaid.
Explanation.-For the purposes of this section,-
(/) "banking company" shall have the meaning assigned to it in clause (z)
of the Explanation to section 269SS;
(if) "co-operative bank" shall have the meaning assigned to it in Part V of
the Banking Regulation Act, 1949;
(Hi) "loan or deposit" means any loan or deposit of money which is
repayable after notice or repayable after a period and, in the case of a person
other than a company, includes loan or deposit of any nature.'.
96. After section 269UO of the Income-tax Act, the following section shall be inserted
with effect from the 1 st day of July, 2002, namely:-
"269UP. The provisions of this Chapter shall not apply to, or in relation to, the
transfer of any immovable property effected on or after the 1st day of July, 2002.".
97. In section 271 of the Income-tax Act, in sub-section (/),-
(a) in the opening portion, after the words and brackets "Commissioner
(Appeals)", the words "or the Commissioner" shall be inserted with effect from the 1 st
day of June, 2002;
(b) in clause (if), for the words "in addition to any tax payable", the words "in
addition to tax, if any, payable" shall be substituted with effect from the 1st day of
April, 2003;
(c) in clause (Hi), for the words "in addition to any tax payable", the words "in
addition to tax, if any, payable" shall be substituted with effect from the 1st day of
April, 2003;
(d) in Explanation 1, in clause (,4), after the words and brackets "Commissioner
(Appeals)", the words "or the Commissioner" shall be inserted with effect from the 1st
day of June, 2002;
(e) in Explanation 3, the words "who has not previously been assessed under
this Act," shall be omitted with effect from the 1st day of April, 2003;
(/) in Explanation 4, for clause (a), the following clause shall be substituted with
effect from the 1 st day of April, 2003, namely:-
"(a) in any case where the amount of income in respect of which particulars
have been concealed or inaccurate particulars have been furnished has the
effect of reducing the loss declared in the return or converting that loss into
income, means the tax that would have been chargeable on the income in respect
Sic 2|
Till- GAZETTE OF INDIA 1-XI RAORDINARY
37
10 of 1994.
of which particulars have been concealed or inaccurate particulars have been
furnished had such income been the total income;";
(#) in Explanation 7, after the words and brackets "Commissioner (Appeals)",
the words "or the Commissioner" shall be inserted with effect from the 1st day of
June, 2002.
98. For section 271F of the Income-tax Act, the following section shall be substituted
with effect from the I st day of June, 2002, namely:-
"27 IF. If a person who is required to furnish a return of his income, as required
under sub-section (/) of section 139 or by the provisos to that sub-section, fails to
furnish such return before the end of the relevant assessment year, the Assessing
Officer may direct that such person shall pay, by way of penalty, a sum of five thousand
rupees.".
99. In section 272A of the Income-tax Act,-
(a) in sub-section (/), clause (d) shall be omitted with effect from the 1 st day of
June, 2002;
(/>) in sub-section (2), for clause (e), the following clause shall be substituted
with effect from the 1st day of April, 2003, namely:-
"(cj) to furnish the return of income which he is required to furnish under
sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the
time allowed and in the manner required under those sub-sections; or".
100. After section 272AA of the Income-tax Act, the following section shall be inserted
with effect from the 1 st day of June, 2002, namely:-
"272B. (7) If a person fails to comply with the provisions of section 139A, the
. .ssessing Officer may direct that such person shall pay, by way of penalty, a sum of
ten thousand rupees.
(2) If a person who is required to quote his permanent account number in any
document referred to in clause (c) of sub-section (5) of section 139A, or to intimate
such number as required by sub-section (5A) of that section, quotes or intimates a
number which is false, and which he either knows or believes to be false or does not
believe to be true, the Assessing Officer may direct that such person shall pay, by way
of penalty, a sum often thousand rupees.
(3) No order under sub-section (/) or sub-section (2) shall be passed unless the
person on whom the penalty is proposed to be imposed is given an opportunity of
being heard in the matter.".
101. After section 272BB of the Income-tax Act, the following section shall be inserted
with effect from the 1st day of June, 2002, namely:-
"272BBB. (7) If a person fails to comply with the provisions of section 206CA, he
shall, on an order passed by the Assessing Officer, pay, by way of penalty, a sum often
thousand rupees.
(2) No order under sub-section (7) shall be passed unless the person on whom
the penalty is proposed to be imposed is given an opportunity of being heard in the
matter.".
102. In section 273B of the Income-tax Act, with effect from the 1 st day of June, 2002-
(a) after the words, brackets, figures and letters "sub-section (7) of section
272AA or", the words, figures and letter "section 272B or" shall be inserted;
(A) for the words, figures and letters "section 272BB or", the words, figures,
letters and brackets "section 272BB or sub-section (7) of section 272BBB or" shall be
substituted with effect from the 1st day of June, 2002.
Substitution of
new section
far section 27IF
Penalty for
failure to
furnish ryurn
of income
Amendment
of section
272A.
Insertion of
new section
272B
Penalty for
failure to
comply with
the provisions
of section
139A
Insertion ot
new section
272BBB
Penalty for
failure to
comply with
the provisions
of section
206CA
Amendment
of section
273B.
38
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Insertion of
new section
275B.
Failure to
comply with the
provisions of
clause (lib) of
sub-section (I)
of section 132.
Amendment
of section
279.
Amendment
of Second
Schedule.
Amendment
of section 18.
Amendment of
section 18C.
Amendment of
section 22D.
103. After section 275 A of the Income-tax Act, the following section shall be inserted
with effect from the 1 st day of June, 2002, namely:-
"275B. If a person who is required to afford the authorised officer the necessary
facility to inspect the books of account or other documents, as required under clause
{iib) of sub-section (/) of section 132, fails to afford such facility to the authorised
officer, he shall be punishable with rigorous imprisonment for a term which may extend
to two years and shall also be liable to fine.".
104. In section 279 of the Income-tax Act, in sub-section (/), after the word, figures
md letter "section 275 A", the word, figures and letter, "section 275B" shall be inserted with
jffect from the 1 st day of June, 2002.
105. In the Second Schedule to the Income-tax Act, in rule 68A, in sub-rule (3), for the
words "nine per cent.", the words "eight per cent." shall be substituted with effect from the
1st day of June, 2002.
Wealth-tax
106. In section 18 of the Wealth-tax Act, 1957 (hereinafter referred to as the Wealth-tax
Act), in sub-section (/),-
(a) in Explanation 2, in clause (A), after the words and brackets "Commissioner
(Appeals)", the words "or the Commissioner" shall be inserted, with effect from the 1 st
day of June, 2002;
(b) in Explanation 3, the words "who has not previously been assessed under
this Act," shall be omitted, with effect from the 1 st day of April, 2003.
107. In section 18C of the Wealth-tax Act, with effect from the 1 st day of June, 2002,-
(a) in sub-section (/),-
(/) after the words and figures "before the High Court or the Supreme
Court on a reference under section 27", the words, figures and letter "or in
appeal under section 27A before the High Court" shall be inserted;
(if) for the words and figures "for a reference before the High Court or the
Supreme Court under section 27 or in appeal before the Supreme Court under
section 29", the words, figures and letter "in appeal before the High Court under
section 27A or the Supreme Court under section 29" shall be substituted;
(b) in sub-section (4), in clause (b), for the words and figures "for a reference
before the High Court or the Supreme Court under section 27 or in appeal before the
Supreme Court under section 29", the words, figures and letter "in appeal before the
High Court under section 27A or the Supreme Court under section 29" shall be
substituted.
108. In section 22D of the Wealth-tax Act, with effect from the 1st day of June, 2002,-
(a) in sub-section (/), for the words "the Settlement Commission may, by order,
allow the application to be proceeded with or reject the application", the words, figures
and letter "the Settlement Commission shall, where it is possible, by order, reject the
application or allow the application to be proceeded with within a period of one year
from the end of the month in which such application was made under section 22C"
shall be substituted;
(b) after sub-section (4), the following sub-section shall be inserted, namely:-
"(4A) In every application, allowed to be proceeded with under sub-
section (V), the Settlement Commission shall, where it is possible, pass an
order under sub-wction (4) within a period of four years from the end of the
financial y*ar in which such application was allowed to be proceeded with.".
27 of 1957.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
39
35 of 1987.
32 of 1962.
42 of 1999.
109. Section 22HA of the Wealth-tax Act shall be omitted with effect from the 1st day
of June, 2002.
110. In section 34A of the Wealth-tax Act, with effect from the 1 st day of June. 2002,-
(a) in sub-section (3), for the words "nine per cent.", the words "eight per cent."
shall be substituted;
(b) in sub-section (4B), in clause (a), for the words "three-fourth per cent.", the
words "two-third per cent." shall be substituted.
Expenditure-tax
111. In the Expenditure-tax Act, 1987 (hereinafter referred to as the Expenditure-tax
Act), in section 3, in clause (7), for the words "two thousand rupees or more per day per
individual", the words "three thousand rupees or more per day", shall be substituted with
effect from the 1 st day of June, 2002.
112. In the Expenditure-tax Act, in section 5, in clause (7), sub-clauses (b) and (d) shall
be omitted with effect from the 1 st day of June, 2002.
CHAPTER IV
INDIRECT TAXES
Customs
113. In section 4 of the Customs Act, 1962 (hereinafter referred to as the Customs
Act),-
(0 in sub-section (7), for the words "Central Government", the word "Board"
shall be substituted;
(/;) in sub-section (2), for the words "Central Government may authorise the
Board,", the words "Board may authorise a Chief Commissioner of Customs or" shall
be substituted.
114. In section 14 of the Customs Act,-
(0 in sub-section (7), for the portion beginning with the words "international
trade" and ending with the words "offer of sale", the following shall be substituted,
namely:-
"intemational trade, where-
(a) the seller and the buyer have no interest in the business of each
other; or
(6) one of them has no interest in the business of the other,
and the price is the sole consideration for the sale or offer for sale";
(/i) in sub-section (2), for the words "Central Government", the word "Board"
shall be substituted;
{Hi) in sub-section (3),-
(a) in clause (a), for the words "Central Government", wherever they occur,
the word "Board" shall be substituted;
(6) for clause (b), the following clause shall be substituted, namely:-
'(£>) "foreign currency" and "Indian currency" have the meanings
respectively assigned to them in clause (m) and clause (<?) of section 2
of the Foreign Exchange Management Act, 1999;".
115. In section 25 of the Customs Act,-
(a) after sub-section (2), the following sub-section shall be inserted, namely:-
"(2A) The Central Government may, if it considers it necessary or expedient
so to do for the purpose of clarifying the scope or applicability of any notification
Omission of
section 22HA.
Amendment of
section 34A.
Amendment of
section 3.
Amendment Of
section 5.
Amendment
of section 4.
Amendment
of section 14.
Amendment
of section 25.
40
11IE GAZF.TTE OF INDIA EXTRAORDINARY
[PART II—
Amendment of
section 28AA.
Amendment of
section 28AB.
Amendment of
section 28-1.
Amendment
of section 47
Amendment
of section 61
AmendTient of
section 129B.
Amendment of
section 1290.
issued under sub-section (/) or order issued under sub-section (2), insert an
explanation in such notification or order, as the case may be, by notification in
the Official Gazette at any time within one year of issue of the notification under
sub-section (/) or order under sub-section (2), and every such explanation shall
have effect as if it had always been the part of the first such notification or order,
as the case may be.";
(b) in sub-section (-/), after the word, brackets and figure "sub-section (/)", the
words, brackets, figure and letter "or sub-section (2A)" shall be inserted.
116. In section 28AA of the Customs Act, in sub-section (/), for the words "eighteen
per cent.", the words "ten per cent." shall be substituted.
117. In section 28AB of the Customs Act, in sub-section (/), for the words "eighteen
per cent.", the words "ten per cent." shall be substituted.
118. In section 28-1 of the Customs Act, in sub-section (2), in the first proviso, the
words "except in the case of a resident applicant" shall be omitted.
119. In section 47 of the Customs Act, in sub-section (2),-
(;') for the words "two days", the words "five days" shall be substituted;
(//) for the words "eighteen per cent.", the words "ten per cent." shall be
substituted.
120. In section 61 of the Customs Act, in sub-section (/), in the first proviso, for
clause (/), the following clause shall be substituted, namely:-
"(/) in the case of any goods which are not likely to deteriorate, the period
specified in clause (a) or clause (b) may, on sufficient cause being shown, be extended-
(/!) in the case of such goods intended for use in any hundred per cent,
export oriented undertaking, by the Commissioner of Customs, for such period
as he may deem fit; and
(B) in any other case, by the Commissioner of Customs, for a period not
exceeding six months and by the Chief Commissioner of Customs for such further
period as he may deem fit;".
121. In section 129B of the Customs Act,-
(/) in sub-section (2), for the words "four years", the words "six months" shall be
substituted;
(//) after sub-section (2), the following sub-section shall be inserted, namely:-
"(2A) The Appellate Tribunal shall, where it is possible to do so, hear and
decide every appeal within a period of three years from the date on which such
appeal is filed:
Provided that where an order of stay is made in any proceedings relating
to an appeal filed under sub-section (/) of section 129A, the Appellate Tribunal
shall dispose of the appeal within a period of one hundred and eighty days from
the date of such order:
Provided further that if such appeal is not disposed of within the period
specified in the first proviso, the stay order shall, on the expiry of that period,
stand vacated.".
122. In section 129D of the Customs Act, for sub-section (3), the following sub-
section shall be substituted, namely:-
"(3) The Board or the Commissioner of Customs, as the case may be, shall,
where it is possible to do so, make order under sub-section (/) or sub-section (2),
within a period of six months, but not beyond a period of one year, from the date of the
decision or order of the adjudicating authority.".
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
4 1
51 of 1975.
1 of 1944.
Customs Tariff
123. In the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff
Act), after section 8B, the following section shall be inserted, namely:-
'8C. (/) Notwithstanding anything contained in section 8B, if the Central
Government, after conducting such enquiry as it deems fit, is satisfied that any article
is imported into India, from the People's Republic of China, in such increased quantities
and under such conditions so as to cause or threatening to cause market disruption to
domestic industry, then, it may, by notification in the Official Gazette, impose a safeguard
duty on that article:
Provided that the Central Government may, by notification in the Official Gazette,
exempt such quantity of any article as it may specify in the notification, when imported
from People's Republic of China into India, from payment of the whole or part of the
safeguard duty leviable thereon.
(2) The Central Government may, pending the determination under sub-section
(/), impose a provisional safeguard duty under this sub-section on the basis of a
preliminary determination that increased imports have caused or threatened to cause
market disruption to a domestic industry:
Provided that where, on final determination, the Central Government is of the
opinion that increased imports have not caused or threatened to cause market disruption
to a domestic industry, it shall refund the duty so collected:
Provided further that the provisional safeguard duty shall not remain in force for
more than two hundred days from the date on which it was imposed.
(3) Notwithstanding anything contained in sub-sections (/) and (2), a
notification issued under sub-section (/) or any safeguard duty imposed under sub-
section (2), unless specifically made applicable in such notification or such imposition,
as the case may be, shall not apply to articles imported by a hundred per cent, export-
oriented undertaking or a unit in a free trade zone or in a special economic zone.
Explanation,-For the purposes of this section, the expressions "hundred
per cent, export-oriented undertaking", "free trade zone" and "special economic
zone" shall have the meanings respectively assigned to them in Explanation 2 to
sub-section (/) of section 3 of the Central Excise Act, 1944.
(4) The duty chargeable under this section shall be in addition to any other duty
imposed under this Act or under any other law for the time being in force.
(5) The duty imposed under this section shall, unless revoked earlier, cease to
have effect on the expiry of four years from the date of such imposition:
Provided that if the Central Government is of the opinion that such article
continues to be imported into India, from People's Republic of China, in such increased
quantities so as to cause or threatening to cause market disruption to domestic industry
and the safeguard duty should continue to be imposed, it may extend the period of
such imposition for a period not beyond the period often years from the date on which
the safeguard duty was first imposed.
(6) The Central Government may, by notification in the Official Gazette, make
rules for the purposes of this section, and without prejudice to the generality of the
foregoing, such rules may provide for the manner in which articles liable for safeguard
duty may be identified and for the manner in which the causes of market disruption or
causes of threat of market disruption in relation to such articles may be determined and
for the assessment and collection of such safeguard duty.
(7) For the purposes of this section,-
(a) "domestic industry" means the producers-
insertion of new
section 8C.
Power of
Central
Government to
Impose
transitional
product specific
safeguard duty
on imports from
the People's
Republic of China
42
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Refund of
additional
duty of
customs In
certain
cases.
Amendment
of First
Schedule.
Amendment
of section 2.
Amendment
of section 3.
(/) as a whole of a like article or a directly competitive article in India;
or
(if) whose collective output of a like article or a directly competitive
article in India constitutes a major share of the total production of the said
article in India;
(b) "market disruption" shall be caused whenever imports of a like article
or a directly competitive article produced by the domestic industry, increase
rapidly, either absolutely or relatively, so as to be a significant cause of material
injury, or threat of material injury, to the domestic industry;
(c) "threat of market disruption" means a clear and imminent danger of
market disruption.
(8) Every notification issued under this section shall, as soon as may be after it
is issued, be laid before each House of Parliament.1.
124. (7) Notwithstanding anything contained in section 25 of the Customs Act,
barge mounted power plants, falling under heading 98.01 of the First Schedule to the
Customs Tariff Act, shall be deemed to have been exempted from the whole of the additional
duty of customs leviable thereon under sub-section (/) of section 3 of the Customs Tariff
Act, within the period commencing from the 8th December, 2000 and ending with the 28th
February, 2002 (both the dates inclusive) and accordingly, notwithstanding anything
contained in any judgment, decree or order of any court, tribunal or other authority, barge
mounted power plants shall be deemed to be, and always to have been, exempted from the
said additional duty of customs as if the exemption given by this sub-section had been in
force at all material times.
(2) For the purposes of sub-section (7), the Central Government shall have and shall
be deemed to have the power to exempt the goods referred to in the said sub-section with
retrospective effect as if the Central Government had the power to exempt the said goods
under sub-section (7) of section 25 of the Customs Act, retrospectively at all material times.
(3) Refund shall be made of all such additional duty of customs which have been
collected but which would have not been so collected if the exemption referred to in sub-
section (/) had been in force at all material times.
(4) Notwithstanding anything contained in section 27 of the Customs Act, an application
for the claim of refund of the additional duty of customs under sub-section (3) shall be made
within six months from the date on which the Finance Bill, 2002 receives the assent of the
President.
125. In the Customs Tariff Act, the First Schedule shall be amended in the manner as
specified in the Second Schedule.
Excise
126. In the Central Excise Act, 1944 (hereinafter referred to as the Central Excise Act),
in section 2, in clause (/),-
(0 in sub-clause (if), for the word "manufacture,", the words "manufacture; or"
shall be substituted;
(//) after sub-clause (if), the following sub-clause shall be inserted, namely:-
"(iif) which is specified in relation to any goods by the Central Government,
by notification in the Official Gazette, as amounting to manufacture,".
127. In section 3 of the Central Excise Act, in sub-section (7), in the proviso, in
Explanation 2, for clause (i), the following clause shall be substituted, namely:-
'(0 "free trade zone" means a zone which the Central Government may, by
notification in the Official Gazette, specify in this behalf;'.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
43
128. In section 5A of the Central Excise Act,-
(/) after sub-section (2), the following sub-section shall be inserted, namely:-
"(2A) The Central Government may, if it considers it necessary or expedient
so to do for the purpose of clarifying the scope or applicability of any notification
issued under sub-section (/) or order issued under sub-section (2), insert an
explanation in such notification or order, as the case may be, by notification in
the Official Gazette at any time within one year of issue of the notification under
sub-section (/) or order under sub-section (2), and every such explanation shall
have effect as if it had always been the part of the first such notification or order,
as the case may be.";
{if) in sub-section (5), after the word, brackets and figure "sub-section (/)", the
words, brackets, figure and letter "or sub-section (2A)" shall be inserted.
129. In section 11AA of the Central Excise Act, in sub-section (/), for the words
"eighteen per cent.", the words "ten per cent." shall be substituted.
130. In section 11AB of the Central Excise Act, in sub-section (/), for the words
"eighteen per cent.", the words "ten per cent." shall be substituted.
131. Sections 16 and 17 of the Central Excise Act shall be omitted.
132. In section 23 D of the Central Exc ise Act, in sub-section (2), in the first proviso, the
words "except in the case of a resident applicant" shall be omitted.
133. Chapter IV of the Central Excise Act shall be omitted.
134. In section 35C of the Central Excise Act,-
(/) in sub-section (2), for the words "four years", the words "six months" shall
be substituted;
(//) after sub-section (2), the following sub-section shall be inserted, namely:-
"(2/1) The Appellate Tribunal shall, where it is possible to do so, hear and
decide every appeal within a period of three years from the date on which such
appeal is filed:
Provided that where an order of stay is made in any proceedings relating
to an appeal filed under sub-section (/) of section 3SB, the Appellate Tribunal
shall dispose of the appeal within a period of one hundred and eighty days
from the date of such order:
Provided further that if such appeal is not disposed of within the period
specified in the first proviso, the stay order shall, on the expiry of that period,
stand vacated.".
135. In section 3SE of the Central Excise Act, for sub-section (3), the following sub-
section shall be substituted, namely:-
"(5) The Board or Commissioner of Central Excise, as the case may be, shall,
where it is possible to do so, make order under sub-section (/) or sub-section (2),
within a period of six months, but not beyond a period of one year, from the date of the
decision or order of the adjudicating authority.".
136. (/) The notification of the Government of India in the Ministry of Finance
(Department of Revenue) No. G.S.R. 509(E), dated the 8th July, 1999, issued under sub-
section (/) of section SA of the Central Excise Act by the Central Government shall stand
amended and shall be deemed to have been amended in the manner as specified in the
Third Schedule, on and from the 8th July, 1999 to the 28th February, 2002 (both the dates
inclusive) retrospectively, and, accordingly, notwithstanding anything contained in any
judgment, decree or order of any court, tribunal or other authority, any action taken or
Amendment
of section SA.
Amendment of
section 11AA.
Amendment of
section 11AB
Omission of
sections 16 and
17
Amendment oi
section 23D.
Omission of
Chanter IV.
Amendment ot
lection 35C.
\mendment of
icotlon 3JE.
Amendment ol
notification
issued under
section 3A of
the Central
Excise Act.
44
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment of
notification
issued under
rule 57AK of
the Central
Excise Rules,
1944.
anything done or purported to have been taken or done under the said notification, shall
be deemed to be and always to have been, for all purposes, as validly or effectively taken
or done as if the notification as amended by this sub-section had been in force at all
material times.
(2) For the purposes of sub-section (/), the Central Government shall have and
shall be deemed to have the power to amend the notification referred to in the said sub-
section with retrospective effect as if the Central Government had the power to amend the
said notification under sub-section (I) of section 5A of the Central Excise Act, retrospectively
at all material times.
(3) Notwithstanding the cessation of the amendment under sub-section (/) on the 1st
March, 2002, no suit or other proceedings shall be maintained or continued in any court,
tribunal or other authority for any action taken or anything done Or omitted to be done, in
respect of any goods under the said notification, and no enforcement shall be made by any
court, tribunal or other authority of any decree or order relating to such action taken or
anything done or omitted to be done as if the amendment made by sub-section (/) had
been in force at all material times.
(4) Notwithstanding the cessation of the amendment under sub-section (7) on the 1st
March, 2002, recovery shall be made of all amounts of duty or interest or other charges
which have not been collected or, as the case may be, which have been refunded but which
would have been collected or, as the case may be, which would have not been refunded if the
provisions of this section had been in force at all material times, within a period of thirty
days from the date on which the Finance Bill, 2002 receives the assent of the President, and
in the event of non-payment of duty or interest or other charges so recoverable, interest at
the rate of fifteen per cent, per annum shall be payable, from the date immediately after the
expiry of the said period of thirty days, till the date of payment.
Explanation.-For the removal of doubts, it is hereby declared that no act or omission
on the part of any person shall be punishable as an offence which would not have been so
punishable if the notification referred to in sub-section (/) had not been amended
retrospectively by that sub-section.
137. (/) The notification of the Government of India in the Ministry of Finance
(Department of Revenue) No. G.S.R.299(E), dated the 31 st March, 2000, issued under rule
57AK of the Central Excise Rules, 1944, by the Central Government shall stand amended
and shall be deemed to have been amended in the manner as specified in the Fourth
Schedule, on and from the date mentioned in column (3) of that Schedule against that
notification retrospectively and, accordingly, notwithstanding anything contained in any
judgment, decree or order of any court, tribunal or other authority, any action taken or
anything done or purported to have been taken or done under the said notification, shall
be deemed to be, and always to have been, for all purposes, as validly or effectively taken
or done as if the notification as amended by this sub-section had been in force at all
material times.
(2) Credit shall be allowed of all such declared duty, which have been disallowed but
which would not have been so disallowed if the amendment made in the notification
referred to in sub-section (/) had been in force at all material times.
(i) Refund shall be made of all such credit of the declared duty, which have been
collected but which would have not been so collected if the amendment made in the
notification referred to in sub-section (/) had been in force at all material times.
(4) Notwithstanding anything contained in section 11B of the Central Excise Act, 1944,
an application for the claim of refund of the credit of the declared duty under sub-section
(3) shall be made within six months from the date on which the Finance Bill, 2002 receives
the assent of the President.
l of 1944,
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
45
1 of 1944.
1 of 1944.
Central Excise Tariff
138. In the Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise
Tariff Act),—
(/) the First Schedule shall be amended in the manner as specified in the Fifth
Schedule;
(//) the Second Schedule shall be amended in the manner as specified in the Sixth
Schedule.
139. In the Additional Duties of Excise (Goods of Special Importance) Act, 1957
(hereinafter referred to as the Additional Duties of Excise Act), the First Schedule shall be
amended in the manner as specified in the Seventh Schedule.
140. (/) In the case of goods specified in the Eighth Schedule, being goods
manufactured, there shall be levied and collected, for purposes of the Union, by surcharge,
a duty of excise, to be called the Special Additional Excise Duty, at the rates specified in the
said Schedule.
(2) The Special Additional Excise Duty chargeable on goods specified in the Eighth
Schedule shall be in addition to any other duties of excise chargeable on such goods under
the Central Excise Act, 1944 or any other law for the time being in force.
(3) The provisions of the Central Excise Act, 1944 and the rules made thereunder,
including those relating to refunds and exemptions from duties and imposition of penalty,
shall, as far as may be, apply jn relation to the levy and collection of the Special Additional
Excise Duty leviable under this section in respect of the goods specified in the Eighth
Schedule, as they apply in relation to the levy and collection of the duties of excise on such
goods under that Act, or those rules, as the case may be.
Amendment
of Act
5 of 1986.
Amendment
of Act
58 of 1957.
Special
additional
excise duty.
25 of 1990.
CHAPTER V
SERVICE TAX
141. (/) During the period commencing on and from the 16th day of July, 2001 and
ending with such date as the Central Government may appoint under section 142, for the
purposes of that section, the provisions of Chapter V of the Finance Act, 1994 shall be
deemed to have had effect subject to the following modifications, namely:-
in section 65,-
(;) for clause (13), the following had been substituted, namely:-
'(13) "broadcasting" has the meaning assigned to it in clause (c) of
section 2 of the Prasar Bharati (Broadcasting Corporation of India)
Act, 1990 and also includes programme selection, scheduling or
presentation of sound or visual matter on a radio or a television channel
that is intended for public listening or viewing, as the case may be; and
in the case of a broadcasting agency or organisation, having its head
office situated in any place outside India, includes the activity of selling
of time slots or obtaining sponsorships for broadcasting of any
programme or collecting the broadcasting charges on behalf of the said
agency or organisation, by its branch office or subsidiary or
representative in India or any agent appointed in India or by any person
who acts on its behalf in any manner.
(13A) "broadcasting agency or organisation" means any agency
or organisation engaged in providing service in relation to broadcasting
in any manner and, in the case of a broadcasting agency or organisation,
having its head office situated in any place outside India, includes its
branch office or subsidiary or representative in India or any agent
appointed in India or any person who acts on its behalf in any manner,
engaged in the activity of selling of lime slots for broadcasting of any
Modification
of Act
32 of 1994.
46
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Amendment
of Act
32 of 1994.
Definitions.
programme or obtaining sponsorships for programme or collecting
broadcasting charges on behalf of the said agency or organisation;';
(w) in clause (72), for sub-clause (zk), the following sub-clause had been
substituted, namely:-
"(zk) to a client, by a broadcasting agency or organisation in relation
to broadcasting in any manner and, in the case of a broadcasting agency
or organisation, having its head office situated in any place outside
India, includes service provided by its branch office or subsidiary or
representative in India or any agent appointed in India or by any person
who acts on its behalf in any manner, engaged in the activity of selling of
time slots for broadcasting of any programme or obtaining sponsorships
for programme or collecting broadcasting charges on behalf of the said
agency or organisation.
Explanation,-?or the removal of doubts, it is hereby declared that so long
as the radio or television programme broadcast is received in India and intended for
listening or viewing, as the case may be, by the public, such service shall be a
taxable service in relation to broadcasting, even if the encryption of the signals or
beaming thereof through the satellite might have taken place outside India;".
(2) Any action taken or anything done or omitted to be done or purported to have
been taken or done or omitted to be done under this Chapter at any time during the period
commencing on and from the 16th day of July, 2001 and ending with the day, on which the
Finance Bill, 2002 receives the assent of the President, shall be deemed to be and to always
have been, for all purposes, as validly and effectively taken or done or omitted to be done
as if sub-section (7) had been in force at all material times and, accordingly, notwithstanding
anything contained in any judgment, decree or order of any court, tribunal or other authority,
recovery shall be made of all such service tax which has not been collected but which
would have been collected, if sub-section (7) had been in force at all material times, within
a period of thirty days from the date on which the Finance Bill, 2002 receives the assent
of the President, and in the event of non-payment of such service tax so recoverable,
interest at the rate of fifteen per cent, per annum shall be payable, from the date
immediately after the expiry of the said period of thirty days, till the date of payment.
ExpIanation.-FoT the removal of doubts, it is hereby declared that no act or omission
on the part of any person shall be punishable as an offence which would have not been so
punishable if this section had not come into force.
142. In the Finance Act, 1994, with effect from such date as the Central Government
may, by notification in the Official Gazette, appoint,-
(a) for section 65, the following section shall be substituted, namely:-
'65. (/) In this Chapter, unless the context otherwise requires,—
(7) "actuary" has the meaning assigned to it in clause (7) of section
2 of the Insurance Act, 1938;
(2) "advertisement" includes any notice, circular, label, wrapper,
document, hoarding or any other audio or visual representation made by
means of light, sound, smoke or gas;
(3) "advertising agency" means any commercial concern engaged
in providing any service connected with the making, preparation, display
or exhibition of advertisement and includes an advertising consultant;
(4) "air travel agent" means any person engaged in providing any
service connected with the booking of passage for travel by air;
(5) "Appellate Tribunal" means the Customs, Excise and Gold
(Control) Appellate Tribunal constituted under section 129 of the
Customs Act, 1962;
4 of 1938.
52 of 1962.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
47
20 of 1972.
10 of 1949.
20 of 1934
S4 of 1963.
1 of 1956.
(<5) "architect" means any person whose name is, for the time being,
entered in the register of architects maintained under section 23-of the
Architects Act, 1972 and also includes any commercial concern engaged
in any manner, whether directly or indirectly, in rendering services in the
field of architecture;
(7) "assessee" means a person liable to pay the service tax and
includes his agent;
(8) "authorised service station" means any service station, or
centre, authorised by any motor vehicle manufacturer, to carry out any
service or repair of any motor car or two wheeled motor vehicle
manufactured by such manufacturer;
(9) "banking" shall have the meaning assigned to it in clause (b) of
section 5 of the Banking Regulation Act, 1949;
(10 ) " banking company" shall have the meaning assigned to it in
clause (a) of section 45A of the Reserve Bank of India Act, 1934;
(//) "banking and other financial services" means the following
services provided by a banking company or a financial institution
including a non-banking financial company or any other body corporate,
namely:—
(/) financial leasing services including equipment leasing and
hire-purchase by a body corporate;
(it) credit card services;
(lit) merchant banking services;
(jv) securities and foreign exchange (forex) broking;
(v) asset management including portfolio management,
all forms of fund management, pension fund management,
custodial, depository and trust services, but does not include
cash management;
(vv) advisory and other auxiliary financial services including
investment and portfolio research and advice, advice on mergers
and acquisitions and advice on corporate restructuring and
strategy; and
(vil) provision and transfer of information and data processing;
(12) "Board" means the Central Board of Excise and Customs
constituted under the Central Boards of Revenue Act, 1963;
(13) "body corporate" shall have the meaning assigned to it in clause
(7) of section 2 of the Companies Act, 1956;
(14) "broadcasting" has the meaning assigned to it in clause (c) of
section 2 of the Prasar Bharati (Broadcasting Corporation of India)
Act, 1990 and also includes programme selection, scheduling or
presentation of sound or visual matter on a radio or a television channel
that is intended fpr public listening or viewing, as the case may be; and
in the case of a broadcasting agency or organisation, having its head
office situated in any place outside India, includes the activity of selling of
time slots or obtaining sponsorships for broadcasting of any programme
or collecting the broadcasting charges on behalf of the said agency or
organisation, by its branch office or subsidiary or representative in India
or any agent appointed in India or by any person who acts on its behalf in
any manner;
25 of 1990.
48
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
7 of 1995.
21 of 2000.
(15) "broadcasting agency or organisation" means any agency or
organisation engaged in providing service in relation to broadcasting in
any manner and, in the case of a broadcasting agency or organisation,
having its head office situated in any place outside India, includes its
branch office or subsidiary or representative in India or any agent
appointed in India or any person who acts on its behalf in any manner,
engaged in the activity of selling of time slots for broadcasting of any
programme or obtaining sponsorships for programme or collecting
broadcasting charges on behalf of the said agency or organisation;
(16) "beauty treatment" means face and beauty treatment, cosmetic
treatment, manicure, pedicure or counseling services on beauty, face
care or make-up;
(17) "beauty parlour" means any establishment providing beauty
treatment services;
(18) "cab" means a motor cab or maxi cab;
(19) "cable operator" shall have the meaning assigned to it in
clause (a) of section 2 of the Cable Television Networks (Regulation)
Act, 1995;
(20) "cable service" shall have the meaning assigned to it in clause
(b) of section 2 of the Cable Television Networks (Regulation) Act, 1995;
(21) "cargo handling service" means loading, unloading, packing
or unpacking of cargo and includes cargo handling services provided
for freight in special containers or for non-containerised freight, services
provided by a container freight terminal or any other freight terminal,
for all modes of transport and cargo handling services incidental to
freight, but does not include handling of export cargo or passenger
baggage or mere transportation of goods;
(22) "caterer" means any person who supplies, either directly or
indirectly, any food, edible preparations, alcoholic or non-alcoholic
beverages or crockery and similar articles or accoutrements for any
purpose or occasion;
(23) "clearing and forwarding agent" means any person who is
engaged in providing any service, either directly or indirectly, connected
with the clearing and forwarding operations in any manner to any other
person and includes a consignment agent;
(24) "computer network" has the meaning assigned to it in clause
(/) of sub-section (/) of section 2 of the Information Technology
Act, 2000;
(25) "consulting engineer" means any professionally qualified
engineer or an engineering firm who, either directly or indirectly, renders
any advice, consultancy or technical assistance in any manner to a
client in one or more disciplines of engineering;
(26) "convention" means a formal meeting or assembly which is
not open to the general public, and does not include a meeting or
assembly, the principal purpose of which is to provide any type of
amusement, entertainment or recreation;
(27) "courier agency" means a commercial concern engaged in the
door-to-door transportation of time-sensitive documents, goods or
articles utilising the services of a person, either directly or indirectly, to
carry or accompany such documents, goods or articles;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
49
(28) "credit rating agency" means any commercial concern
engaged in the business of credit rating of any debt obligation or of
any project or programme requiring finance, whether in the form of
debt or otherwise, and includes credit rating of any financial obligation,
instrument or security, which has the purpose of providing a potential
investor or any other person any information pertaining to the relative
safety of timely payment of interest or principal;
(29) "custom house agent" means a person licensed, temporarily
or otherwise, under the regulations made under sub-section (2) of section
146 of the Customs Act, 1962;
(30) "data" has the meaning assigned to it in clause (o) of sub-
section (/) of section 2 of the Information Technology Act, 2000;
(31) "dry cleaning" includes dry cleaning of apparels, garments or
other textile, fur or leather articles;
(32) "dry cleaner" means any commercial concern providing service
in relation to dry cleaning;
(33) "electronic form" has the meaning assigned to it in clause (r)
of sub-section (1) of section 2 of the Information Technology Act, 2000;
(34) "event management" means any service provided in relation
to planning, promotion, organising or presentation of any arts,
entertainment, business, sports or any other event and includes any
consultation provided in this regard;
(35) "event manager" means any person who is engaged in providing
any service in relation to event management in any manner;
(36) "facsimile (FAX)" means a form of telecommunication by which
fixed graphic images, such as printed texts and pictures are scanned and
the information converted into electrical signals for transmission over the
telecommunication system;
(37) "fashion designing" includes any activity relating to
conceptualising, outlining, creating the designs and preparing patterns
for costumes, apparels, garments, clothing accessories, jewellery or any
other articles intended to be worn by human beings and any other service
incidental thereto;
(38) "fashion designer" means any person engaged in providing
service in relation to fashion designing;
(39) "financial institution" has the meaning assigned to it in clause
(c) of section 45-1 of the Reserve Bank of India Act, 1934;
(40) "general insurance business" has the meaning assigned to it in
clause (g) of section 3 of the General Insurance Business (Nationalisation)
Act, 1972;
(41) "goods" has the meaning assigned to it in clause (7) of section
2 of the Sale of Goods Act, 1930;
(42) "health and fitness service" means service for physical well-
being such as, sauna and steam bath, turkish bath, solarium, spas, reducing
or slimming salons, gymnasium, yoga, meditation, massage (excluding
therapeutic massage) or any other like service;
(43) "health club and fitness centre" means any establishment,
including a hotel or resort, providing health and fitness service;
(44) "information" has the meaning assigned to it in clause (v) ol
sub-section (7) of section 2 of the Information Technology Act, 2000;
52 of 1962.
21 of 2000.
21 of 2000.
2 of 1934.
57 of 1972.
3 of 1930
21 of 2000.
50
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
4 of 1938.
41 of 1999.
4 of 1938.
4 of 1882.
59 of 1988.
59 of 1988.
2 of 1934.
(45) "insurance agent" has the meaning assigned to it in clause (70)
of section 2 of the Insurance Act, 1938;
(46) "insurance auxiliary service" means any service provided by
an actuary, an intermediary or insurance intermediary or an insurance
agent in relation to general insurance business or life insurance business
and includes risk assessment, claim settlement, survey and loss
assessment;
(47) "intermediary or insurance intermediary" has the meaning
assigned to it in sub-clause (/) of clause (7) of section 2 of the Insurance
Regulatory and Development Authority Act, 1999;
(48) "insurer" means any person carrying on the general insurance
business or life insurance business in India;
(49) "interior decorator" means any person engaged, whether
directly or indirectly, in the business of providing by way of advice,
consultancy, technical assistance or in any other manner, services related
to planning, design or beautification of spaces, whether man-made or
otherwise and includes a landscape designer;
(50) "leased circuit" means a dedicated link provided between two
fixed locations for exclusive use of the subscriber and includes a speech
circuit, a data circuit or a telegraph circuit! \
(51) "life insurance business" has the meaning assigned to it in
clause (77) of section 2 of the Insurance Act, 1938;
(52) "magnetic storage device" includes wax blanks, discs or blanks,
strips or films for the purpose of original sound recording;
(53) "management consultant" means any person who is engaged
in providing any service, either directly or indirectly, in connection with
the management of any organisation in any manner and includes any
person who renders any advice, consultancy or technical assistance,
relating to conceptualising, devising, development, modification,
rectification or upgradation of any working system of any organisation;
(54) "mandap" means any immovable property as defined in section
3 of the Transfer of Property Act, 1882 and includes any furniture, fixtures,
light fittings and floor coverings therein let out for a consideration for
organising any official, social or business function;
(55) "mandap keeper" means a person who allows temporary
occupation of a mandap for a consideration for organising any official,
social or business function;
(56) "manpower recruitment agency" means any commercial concern
engaged in providing any service, directly or indirectly, in any manner for
recruitment of manpower, to a client;
(57) "market research agency" means any commercial concern
engaged in conducting market research in any manner, in relation to any
product, service or utility, including all types of customised and syndicated
research services;
(58) "maxi cab" has the meaning assigned to it in clause (22) of
section 2 of the Motor Vehicles Act, 1988;
(59) "motor cab" has the meaning assigned to it in clause (25) of
section 2 of the Motor Vehicles Act, 1988;
(60) "non-banking financial company" has the meaning assigned to
it in clause (f) of section 45-1 of the Reserve Bank of India Act, 1934;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
51
(67) "on-line information and database access or retrieval" means
providing data or information, retrievable or otherwise, to a customer, in
electronic form through a computer network;
(62) "pager" means an instrument, apparatus or appliance which is
a non-speech, one way personal calling system with alert and has the
capability of receiving, storing and displaying numeric or alpha-numeric
messages;
(63) "photography" includes still photography, motion picture
photography, laser photography, aerial photography or fluorescent
photography;
(64) "photography studio or agency" means any professional
photographer or a commercial concern engaged in the business of rendering
service relating to photography;
(65) "policy holder" has the meaning assigned to it in clause (2) of
section 2 of the Insurance Act, 1938;
(66) "port" has the meaning assigned to it in clause (q) of section 2
of the Major Port Trusts Act, 1963;
(67) "port services" means any service rendered by a port or any
person authorised by the port, in any manner, in relation to a vessel or
goods;
(68) "practising chartered accountant" means a person who is a
member of the Institute of Chartered Accountants of India and is holding
a certificate of practice granted under the provision of the Chartered
Accountants Act, 1949 and includes any concern engaged in rendering
services in the field of chartered accountancy;
(69) "practising cost accountant" means a person who is a member
of the Institute of Cost and Works Accountants of India and is holding a
certificate of practice granted under the provisions of the Cost and Works
Accountants Act, 1959 and includes any concern engaged in rendering
services in the field of cost accountancy;
(70) "practising company secretary" means a person who is a member
of the Institute of Company Secretaries of India and is holding a certificate
of practice granted under the provisions of the Company Secretaries
Act, 1980 and includes any concern engaged in rendering services in the
field of company secretaryship;
(77) "prescribed" means prescribed by rules made under this
Chapter;
(72) "rail travel agent" means any person engaged in providing any
service connected with booking of passage for travel by rail;
(73) "real estate agent" means a person who is engaged in rendering
any service in relation to sale, purchase, leasing or renting, of real estate
and includes a real estate consultant;
(74) "real estate consultant" means a person who renders in any
manner, either directly or indirectly, advice, consultancy or technical
assistance, in relation to evaluation, conception, design, development,
construction, implementation, supervision, maintenance, marketing,
acquisition or management, of real estate;
(75) "recognised stock exchange" has the meaning assigned to it in
clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956;
4 of 1938.
38 of 1963.
38 of 1949.
23 of 1959.
56 of 1980.
42 of 19J6.
52
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
42 of 1956.
15 of 1992.
15 of 1992.
(76) "rent-a-cab scheme operator" means any person engaged in
the business of renting of cabs;
(77) "scientific or technical consultancy" means any advice,
consultancy, or scientific or technical assistance, rendered in any manner,
either directly or indirectly, by a scientist or a technocrat, or any science or
technology institution or organisation, to a client, in one or more disciplines
of science or technology;
(78) "securities" has the meaning assigned to it in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956;
(79) "security agency" means any commercial concern engaged in the
business of rendering services relating to the security of any property, whether
movable or immovable, or of any person, in any manner and includes the
services of investigation, detection or verification, of any fact or activity,
whether of a personal nature or otherwise, including the services of providing
security personnel;
(80) "service tax" means tax leviable under the provisions of this
Chapter;
(81) "ship" means a sea-going vessel and includes a sailing vessel;
($2) "shipping line" means any person who owns or charters a ship
and Includes an enterprise which operates or manages the business of
shippings
(83) "sound recording" means recording of sound on a magnetic
storage device and includes editing thereof, in any manner;
(84) "sound recording studio or agency" means any commercial
concern engaged in the business of rendering any service relating to
sound recording;
(85) "steamer agent" means any person who undertakes, either
directly or indirectly,—
(a) to perform any service in connection with the ship's
husbandry or dispatch including the rendering of administrative
work related thereto; or
(b) to book, advertise or canvass for cargo for or on behalf of
a shipping line; or
(c) to provide container feeder services for or on behalf of a
shipping line;
(86) "stock-broker" means a stock-broker who has either made an
application for registration or is registered as a stock-broker in accordance
with the rules and regulations made under the Securities and Exchange
Board of India Act, 1992;
(87) "storage and warehousing " includes storage and warehousing
services for goods including liquids and gaSfes^but does not include any
service provided for storage of agricultural producejor any service
provided by a cold storage;
(88) "sub-broker" means a sub-broker who has either made an
application for registration or is registered as a sub-broker in accordance
with the rules and regulations made under the Securities and Exchange
Board of India Act, 1992;
(89) "subscriber" means a person to whom any service of a telephone
connection or a facsimile or a leased circuit or a pager or a telegraph or a
telex has been provided by the telegraph authority;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
53
(90) "taxable service" means any service provided,—
(a) to an investor, by a stock-broker in connection with the
sale or purchase of securities listed on a recognised stock exchange;
(b) to a subscriber, by the telegraph authority in relation to a
telephone connection;
(c) to a subscriber, by the telegraph authority in relation to a
pager;
(d) to a policy holder, by an insurer carrying on general
insurance business in relation to general insurance business;
(e) to a client, by an advertising agency in relation to
advertisement, in any manner;
(/) to a customer, by a courier agency in relation to door-to-
door transportation of time-sensitive documents, goods or articles;
(g) to a client, by a consulting engineer in relation to advice,
consultancy or technical assistance in any manner in one or more
disciplines of engineering;
(h) to a client, by a custom house agent in relation to the entry
or departure of conveyances or the import or export of goods;
(/) to a shipping line, by a steamer agent in relation to a ship's
husbandry or dispatch or any administrative work related thereto as
well as the booking, advertising or canvassing of cargo, including
container feeder services;
(J) to a client, by a clearing and forwarding agent in relation to
clearing and forwarding operations, in any manner;
(A) to a client, by a manpower recruitment agency in relation to
the recruitment of manpower, in any manner;
(/) to a customer, by an air travel agent in relation to the booking
of passage for travel by air;
(m) to a client, by a mandap keeper in relation to the use of
mandap in any manner including the facilities provided to the client
in relation to such use and also the services, if any, rendered as a
caterer;
(n) to any person, by a tour operator in relation to a tour;
(o) to any person, by a rent-a-cab scheme operator in relation
to the renting of a cab;
(p) to a client, by an architect in his professional capacity, in
any manner;
(q) to a client, by an interior decorator in relation to planning,
design or beautiflcation of spaces, whether man-made or otherwise,
in any manner;
(r) to a client, by a management consultant in connection with
the management of any organisation, in any manner;
0) to a client, by a practising chartered accountant in his
professional capacity, in any manner;
(/) to a client, by a practising cost accountant in his professional
capacity, in any manner;
(«) to a client, by a practising company secretary in his
professional capacity, in any manner;
54
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(v) to a client, by a real estate agent in relation to real estate;
(w) to a client, by a security agency in relation to the security
of any property or person, by providing security personnel or
otherwise and includes the provision of services of investigation,
detection or verification of any fact or activity;
(x) to a client, by a credit rating agency in relation to credit
rating of any financial obligation, instrument or security;
(y) to a client, by a market research agency in relation to market
research of any product, service or utility, in any manner;
(z) to a client, by an underwriter in relation to underwriting, in
any manner;
(za) to a client, by a scientist or a technocrat, or any science or
technology institution or organisation, in relation to scientific or
technical consultancy;
(zb) to a customer, by a photography studio or agency in relation
to photography, in any manner;
(zc) to a client, by any commercial concern in relation to holding
of a convention, in any manner,
(zd) to a subscriber, by the telegraph authority in relation to a
leased circuit;
(ze) to a subscriber, by the telegraph authority in relation to a
communication through telegraph;
(z/) to a subscriber, by the telegraph authority in relation to a
communication through telex;
(zg) to a subscriber, by the telegraph authority in relation to a
facsimile communication;
(z/i) to a customer, by a commercial concern, in relation to on-
line information and database access or retrieval or both in electronic
form through computer network, in any manner;
(ZJ) to a client, by a video production agency in relation to
video-tape production, in any manner;
(zj) to a client, by a sound recording studio or agency in relation
to any kind of sound recording;
(zk) to a client, by a broadcasting agency or organisation in
relation to broadcasting in any manner and, in the case of a
broadcasting agency or organisation, having its head office situated
in any place outside India, includes service provided by its branch
office or subsidiary or representative in India or any agent appointed
in India or by any person who acts on its behalf in any manner,
engaged in the activity of selling of time slots for broadcasting of
any programme or obtaining sponsorships for programme or
collecting broadcasting charges on behalf of the said agency or
organisation.
Explanation.- For the removal of doubts, it is hereby declared
that so long as the radio or television programme broadcast is
received in India and intended for listening or viewing, as the case
may be, by the public, such service shall be a taxable service in
relation to broadcasting, even if the encryption of the signals or
beaming thereof through the satellite might have taken place outside
India:
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
5 5
13 of 1885.
13 of 1883.
(z/) to a policy holder or insurer, by an actuary, or intermediary
or insurance intermediary or insurance agent, in relation to insurance
auxiliary services concerning general insurance business;
(zm) to a customer, by a banking company or a financial
institution including a non-banking financial company, in relation to
banking and other financial services;
(zri) to any person, by a port or any person authorised by the
port, in relation to port services, in any manner;
(zo) to a customer, by an authorised service station, in relation
to any service or repair of motor cars or two wheeled motor vehicles,
in any manner;
(zp) to a customer, by a body corporate other than the body
corporate referred to in sub-clause (zm), in relation to banking and
other financial services;
(zq) to a customer, by a beauty parlour in relation to beauty
treatment;
(zr) to any person, by a cargo handling agency in relation to
cargo handling services;
(zs) to a subscriber, by a cable operator in relation to cable
services;
(zi) to a customer, by a dry cleaner in relation to dry cleaning;
(zu)
to a client, by an event manager in relation to event
management;
(zv) to any person, by a fashion designer in relation to fashion
designing;
(zw)
to any person, by a health club and fitness centre in
relation to health and fitness services;
(zx) to a policy holder, by an insurer carrying on life insurance
business in relation to life insurance business;
(zy) to a policy holder or insurer by an actuary, or intermediary
or insurance intermediary or insurance agent, in relation to insurance
auxiliary services concerning life insurance business;
(zz) to a customer, by a rail travel agent in relation to booking
of passage for travel by rail;
(zza) to any person, by a storage or warehouse keeper in
relation to storage and warehousing of goods;
and the term "service provider" shall be construed accordingly;
(91) "telegraph" has the meaning assigned to it in clause (/) of
section 3 of the Indian Telegraph Act, 1885;
(92) "telegraph authority" has the meaning assigned to it in clause
(<5) of section 3 of the Indian Telegraph Act, 1885 and includes a person
who has been granted a licence under the first proviso to sub-section (/)
of section 4 of that Act;
(93) "telex" means a typed communication by using teleprinters
through telex exchanges;
(P-0 "tour" means a journey from one place to another irrespective
of the distance between such places;
56
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Charge of
service tax.
(95) "tourist vehicle" has the meaning assigned to it in clause (43)
of section 2 of the Motor Vehicles Act, 1988;
(96) "tour operator" means any person engaged in the business of
operating tours in a tourist vehicle covered by a permit granted under the
Motor Vehicles Act, 1988 or the rules made thereunder;
(97) "underwriter" has the meaning assigned to it in clause (/) of rule
2 of the Securities and Exchange Board of India (Underwriters) Rules,
1993;
(98) "underwriting" has the meaning assigned to it in clause (g) of
rule 2 of the Securities and Exchange Board of India (Underwriters) Rules,
1993;
(99) "vessel" has the meaning assigned to it in clause (z) of section
2 of the Major Port Trusts Act, 1963;
(100) "video production agency" means any professional
videographer or any commercial concern engaged in the business of
rendering services relating to video-tape production;
(707) "video-tape production" means the process of any recording
of any programme, event or function on a magnetic tape and includes
editing thereof, in any manner;
(102) words and expressions used but not defined in this Chapter
and defined in the Central Excise Act, 1944 or the rules made thereunder,
shall apply, so far as may be, in relation to service tax as they apply in
relation to a duty of excise.';
(b) for section 66, the following section shall be substituted, namely:-
"66. (1) On and from the date of commencement of this Chapter, there shall
be levied a tax (hereinafter referred to as the service tax), at the rate of five per
cent, of the value of tfre taxable services referred to in sub-clauses (a), (b) and (d)
of clause (90) of section 65 and collected in such manner as may be prescribed.
(2) With effect from the date notified under section 85 of the Finance (No.
2) Act, 1996, there shall be levied a service tax at the rate of five per cent, of the
value of the taxable services referred to in sub-clauses (c), (e) and (/) of clause
(90) of section 65 and collected in such manner as may be prescribed.
(3) With effect from the date notified under section 88 of the Finance Act,
1997, there shall be levied a service tax at the rate of five per cent, of the value of
the taxable services referred to in sub-clauses (g), (h), (i), (/)> (*)> (0. ("0. (") and
(o) of clause (90) of section 65 and collected in such manner as may be prescribed.
( 0 With effect from the date notified under section 116 of the Finance (No.
2) Act, 1998, there shall be levied a service tax at the rate of five per cent, of the
value of the taxable services referred to in sub-clauses (p), (q), (r), (s), (/), («), (v),
(w), (x), (y) and (z) of clause (90) of section 65 and collected in such manner as
may be prescribed.
(5) With effect from the date notified under section 130 of the Finance
Act, 2001, there shall be levied a service tax at the rate of five per cent, of the
value of the taxable services referred to in sub-clauses (za), (zft), (zc), (zd), (ze),
(*/), (zg), W\ (zi), (zj), (zk), (zl), (zm), (zri) and (zo) of clause (90) of section 65 and
collected in such manner as may be prescribed.
(6) With effect from the date notified under section 142 of the Finance Act,
2002, there shall be levied a service tax at the rate of five per cent, of the value of
the taxable services referred to in sub-clauses (ip), (zq), (zr), (zs), (zt), (zu), (zv).
59 of 1988.
59 of 1988.
38 of 1963.
1 of 1944.
33 of 1996.
26 of 1997.
21 of 1998.
14 of 2001.
ShC, 2]
THE GAZETTE OF INDIA EXTRAORDINARY
65
(B) on income by way of winnings from lotteries, crossword
puzzles, card games and other games of any sort
(C') on income by way of winnings from horse races
(£>) on income by way of long-term capital gains
(£) on the whole of the other income
2. In the case of a company—
(a) where the company is a domestic company—
(i) on income by way of interest other than "Interest on
securities"
(if) on income by way of dividend
(Hi) on income by way of winnings from lotteries, crossword
puzzles, card games and other games of any sort
(iv) on income by way of winnings from horse races
(v) on any other income
(b) where the company is not a domestic company—
(0 on income by way of winnings from lotteries, crossword
puzzles, card games and other games of any sort
(if) on income by way of winnings from horse races
(//•/) on income by way of interest payable by Government or
an Indian concern
on moneys borrowed or debt incurred by
Government or the Indian concern in foreign currency
(;v) on income by way of royalty payable by Government or
an Indian concern in pursuance of an agreement made by it with
the Government or the Indian concern after the 31st day of
March, 1976, where such royalty is in consideration for the
transfer of all or any rights (including the granting of a licence)
in respect of copyright in any book on a subject referred to in
the first proviso to sub-section (I A) of section 115A of the
Income-tax Act, to the Indian concern, or in respect of any
computer software referred to in the second proviso to sub-
section (1A) of section 115 A of the Income-tax Act, to a person
resident in India—
(A) where the agreement is made before the 1 st day of June,
1997
(B) where the agreement is made on or after the 1 st day of
June, 1997
(v) on income by way of royalty [not being royalty of the
nature referred to in sub-item (b)(tv)] payable by Government or
an Indian concern in pursuance of an agreement made by it with
the Government or the Indian concern and where such
agreement is with an Indian concern, the agreement is approved
by the Central Government or where it relates to a matter included
in the industrial policy, for the time being in force, of the
Government of India, the agreement is in accordance with that
policy—
(A) where the agreement is made after the 31 st day of
March, 1961 but before the 1st day of April, 1976
(B) where the agreement is made after the 31 st day of March,
1976 but before the 1st day of June, 1997
30 per cent.;
30 per cent.;
20 per cent;
30 per cent.
20 per cent.;
10 per cent.;
30 per cent.;
30 percent.;
20 per cent;
30 per cent;
30 per cent;
20 per cent;
30 per cent;
20 per cent.',
50 per cent;
30 per cent.;
66
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
( O where the agreement is made on or after the 1st day of
June, 1997
(yf) on income by way of fees for technical services payable
by Government or an Indian concern in pursuance of an
agreement made by it with the Government or the Indian concern
and where such agreement is with an Indian concern, the
agreement is approved by the Central Government or where it
relates to a matter included in the industrial policy, for the time
being in force, of the Government of India, the agreement is in
accordance with that policy—
(A) where the agreement is made after the 29th day of
February, 1964 but before the 1st day of April, 1976
(B) where the agreement is made after the 31 st day of March,
1976 but before the 1 st day of June, 1997
(Q where the agreement is made on or after the 1 st day of
June, 1997
(yii) on income by way of long-term capital gains
(vWi) on any other income
50 per cent.;
30 per cent;
20 percent.:
20 percent.;
40 per cent.
Explanation.—For the purpose of item l(bX0 of this Part, "investment income" and
"non-resident Indian" shall have the meanings assigned to them in Chapter XII-A of the
Income-tax Act.
Surcharge on income-tax
The amount of income tax deducted in accordance with the provisions of this Part shall
be increased by a surchage, for purposes of the Union, calculated at the rate of five per cent,
of such income-tax.
PART III
RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES, DEDUCTING INCOME-TAX FROM INCOME
CHARGEABLE UNDER THE HEAD "SALARIES" AND COMPUTING "ADVANCE TAX"
In cases in which income-tax has to be charged under sub-section (4) of section 172
of the Income-tax Act or sub-section (2) of section 174 or section 174 A or section 175 or sub-
section (2) of section 176 of the said Act or deducted from, or paid on, income chargeable
under the head "Salaries" under section 192 of the said Act or in which the "advance tax"
payable under Chapter XVII-C of the said Act has to be computed at the rate or rates in force,
such income-tax or, as the case may be, "advance tax" [not being "advance tax" in respect of
any income chargeable to tax under Chapter XII or Chapter XII-A or section 115JB or sub-
section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax
Act at the rates as specified in that Chapter or section or surcharge on such "advance tax" in
respect of any income chargeable to tax under section 115A or section 115AB or section
115AC or section 115ACA or section 115 AD or section 115B or section 115BB or section
115BBA or section 115BBB or section 115E or section 115JB] shall be charged, deducted or
computed at the following rate or rates:—
Paragraph A
In the case of every individual or Hindu undivided family or association of persons or
body of individuals, whether incorporated or not, or every artificial juridical person referred
to in sub-clause (W/) of clause (31) of section 2 of the Income-tax Act, not being a case to
which any other Paragraph of this Part applies,—
Rates of income-tax
(1) where the total income does not
exceed Rs. 50,000
(2) where the total income exceeds
Rs. 50,000 but does not exceed
Rs. 60,000
Nil;
10 per cent, of the amount by which the
total income exceeds Rs. 50,000;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
67
(3) where the total income exceeds
Rs. 60,000 but does not exceed
Rs. 1,50,000
(4) where the total income exceeds
Rs. 1,50,000
Rs. 1,000 plus 20 per cent, of the amount
by which the total income exceeds
Rs. 60,000;
Rs. 19,000 plus 30 per cent, of the amount
by which the total income exceeds
Rs. 1,50,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of
this Paragraph or in section 112 shall,—
(0 in the case of every individual or Hindu undivided family, or association of
persons or body of individuals having a total income exceeding sixty thousand rupees,
be reduced by the amount of rebate of income-tax calculated under Chapter VIII-A,
and the income-tax as so reduced, be increased by a surcharge for purposes of the
Union calculated at the rate of five per cent, of such income-tax;
(if) in the case of every person other than those mentioned in item (0. be increased
by a surcharge for purposes of the Union calculated at the rate of five per cent of such
income-tax:
Provided that in case of persons mentioned in item (0 above having a total income
exceeding sixty thousand rupees, the total amount payable as income-tax and surcharge on
such income shall not exceed the total amount payable as income-tax on a total income of
sixty thousand rupees by more than the amount of income that exceeds sixty thousand
rupees.
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income does not exceed
Rs. 10,000
(2) where the total income exceeds
Rs. 10,000 but does not exceed
Rs. 20,000
(3) where the total income exceeds
Rs. 20,000
10 per cent, of the total income;
Rs. 1,000 plus 20 per cent, of the amount
by which the total income exceeds
Rs. 10,000;
Rs. 3,000 plus 30 per cent, of the amount
by which the total income exceeds
Rs. 20,000.
Surcharge on income-tax
The amount of income-tax computed at the rate hereinbefore specified, or in section
112, shall, in the case of every firm, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent, of such income-tax.
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income
3 5 per cent.
Surcharge on income-tax
The amount of income-tax computed at the rate hereinbefore specified, or in section
112, shall, in the case of every firm, be increased by a surcharge for purposes of the Union
calculated at the rate of five per cent, of such income-tax.
Paragraph D
In the case of every local authority,—
68
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Rate of income-tax
On the whole of the total income
Surcharge on income-tax
30peYcent.
The amount of income-tax computed at the rate hereinbefore specified, or in section
112, shall, in the case of every local authority, be increased by a surcharge for purposes of the
Union calculated at the rate of five per cent, of such income-tax.
Paragraph E
In the case of a company,—
Rates of income-tax
1. In the case of a domestic company
35 percent, of the
total income;
II. In the case of a company other than a domestic company—
(/) on so much of the total income as consists of—
(a) royalties received from Government or an
Indian concern in pursuance of an agreement made by it
with the Government or the Indian concern after the
31st day of March, 1961 but before the 1st day of April,
1976, or
(b) fees for rendering technical services received
from Government or an Indian concern in pursuance of
an agreement made by it with the Government or the
Indian concern after the 29th day of February, 1964 but
before the 1st day of April, 1976,
and where such agreement has, in either case, been approved
by the Central Government
(if) on the balance, if any, of the total income
Surcharge on income-tax^
50 per cent;
40 per cent.;
The amount of income-tax computed in accordance with the preceding provisions of
item I of this Paragraph, or in section 112, shall, in the case of every company, be increased by
a surcharge for purposes of the Union calculated at the rate of five per cent, of such income-
tax.
PART IV
[See section 2(/0)(c)]
RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME
Rule 1.—Agricultural income of the nature referred to in sub-clause (a) of clause (1A)
of section 2 of the Income-tax Act shall be computed as if it were income chargeable to
income-tax under that Act under the head "Income from other sources" and the provisions of
sections 57 to 59 of that Act shall, so far as may be, apply accordingly:
Provided that sub-section (2) of section 58 shall apply subject to the modification that
the reference to section 40A therein shall be construed as not including a reference to sub-
sections (3) and (4) of section 40A.
Rule 2.—Agricultural income of the nature referred to in sub-clause (b) or sub-clause
(c) of clause (1A) of section 2 of the income-tax Act [other than income derived from any
building required as a dwelling-house by the receiver of the rent or revenue of the cultivator
or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it
were income chargeable to income-tax under that Act under the head "Profits and gains of
business or profession" and the provisions of sections 30,31,32,36,37,38,40,40A [other
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
69
than sub-sections (3) and (•/) thereof), 41,43,43 A, 43B and 43C of the Income-tax Act shall,
so far as may be, apply accordingly.
Rule 3.—Agricultural income of the nature referred to in sub-clause (c) of clause (I A)
of section 2 of the Income-tax Act, being income derived from any building required as a
dwelling-house by the receiver of the rent or revenue or the cultivator or the receiver of rent-
in-kind referred to in the said sub-clause (c) shall be computed as if it were income chargeable
to income-tax under that Act under the head "Income from house property" and the provisions
of sections 23 to 27 of that Act shall, so far as may be, apply accordingly.
Rule '/.—Notwithstanding anything contained in any other provisions of these rules,
in a case—
(a) where the assessee derives income from sale of tea grown and manufactured
by him in India, such income shall be computed in accordance with rule 8 of the
Income-tax Rules, 1962, and sixty per cent, of such income shall be regarded as the
agricultural income of the assessee;
(/>) where the assessee derives income from sale of centrifuged latex or cenex or
latex based crepes (such as pale latex crepe) or brown crepes (such as estate brown
crepe, re-milled crepe, smoked blanket crepe or flat bark crepe) of technically specified
block rubbers manufacturered or processed by him from rubber plants grown by him in
India, such income shall be computed in accordance with rule 7A of the Income-tax
Rules, 1962, and sixty-five percent, of such income shall be regarded as the agricul-
tural income of the assessee;
(c) where the assessee derives income from sale of coffee grown and manufactured
by him in India, such income shall be computed in accordance with rule 7B of the
Income-tax Rules, 1962, and sixty per cent, of such income shall be regarded as the
agricultural income of the assessee.
s Rule 5.—Where the assessee is a member of an association of persons or a body of
individuals (other than a Hindu undivided family, a company or a firm) which in the previous
year has either no income chargeable to tax under the Income-tax Act or has total income not
exceeding the maximum amount not chargeable to tax in the case of an association of persons
or a body of individuals (other than a Hindu undivided family or a company or a firm) but has
any agricultural income then, the agricultural income or loss of the association or body shall
be computed in accordance with these rules and the share of the assessee in the agricultural
income or loss so computed shall be regarded as the agricultural income or loss of the
assessee.
RUle 6.—Where the result of the computation for the previous year in respect of any
source of agricultural income is a loss, such loss shall be set off against the income of the
assessee, if any, for that previous year from any other source of agricultural income:
Provided that where the assessee is a member of an association of persons or a body
of individuals and the share of the assessee in the agricultural income of the association or
body, as the case may be, is a loss, such loss shall not be set off against any'income of the
assessee from any other source of agricultural income.
Rule 7.—Any sum payable by the assessee on account of any tax levied by the State
Government on the agricultural income shall be deducted in computing the agricultural
income.
Rule 8.—{/) Where the assessee has, in the previous year relevant to the assessment
year commencing on the 1 st day of April, 2002, any agricultural income and the net result of
the computation of the agricultural income of the assessee for any one or more of the
previous years relevant to the assessment years commencing on the 1 st day of April, 1994 or
the 1st day of April, 1995orthe 1st day of April, 1996orthe 1st day of April, 1997orthe 1st
day of April, 1998 or the 1st day of April, 1999 or the 1st day of April, 2000 or the 1st day qf
April, 2001, is a loss, then, for the purposes of sub-section (2) of section 2 of this AcV~
70
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(/) the loss so computed for the previous year relevant to the assessment year
commencing on the 1st day of April, 1994, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1995 or the 1st day of April, 1996 or the 1st
day of April, 1997 or the 1st day of April, 1998 or the 1st day of April, 1999 or the 1st day
of April, 2000 or the 1 st day of April, 2001,
(/'/) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1995, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st
day of April, 1998 or the 1st day of April, 1999 or the lstdayofApril,2000orthe 1st day
of April, 2001,
(///) the loss so computed for the previous year relevant to the assessment year
commejicing on the 1 st day of April, 1996, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1997 or the 1 st day of April, 1998 or the 1st
day of April, 1999 or the 1 st day of April, 2000 or the 1st day of April, 2001,
(iv) the loss so computed for the previous year relevant to the assessment year
commencing on the 1st day of April, 1997, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1998 or the 1st day of April, 1999 or the 1st
day of April, 2000 or the 1 st day of April, 2001,
(v) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1998, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1999 or the 1st day of April, 2000 or the 1st
day of April, 2001,
(vi) the loss so computed for the previous year relevant to the assessment year
commencing on the 1st day of April, 1999, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2000 or the 1st day of April, 2001,
(v/7) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 2000, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1 st day of April, 2001,
(V/H) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 2001,
shall be set off against the agricultural income of the assessee for the previous year relevant
to the assessment year commencing on the 1 st day of April, 2002.
(2) Where the assessee has, in the previous year relevant to the assessment year
commencing on the 1st day of April, 2003 or, if by virtue of any provision of the Income-tax
Act, income-tax is to be charged in respect of the income of a period other than that previous
year, in such other period, any agricultural income and the net result of the computation of
the agricultural income of the assessee for any one or more of the previous years relevant to
the assessment years commencing on the 1 st day of April, 1995 or the 1 st day of April, 1996
orthe 1st day of April, 1997orthe 1 st day of April, 1998orthe 1st day of April, 1999orthe 1st
day of April, 2000 orthe 1st day of April, 2001 orthe 1st day of April, 2002, is a loss, then, for
the purposes of sub-section (0) of section 2 of this Act,—
(0 the loss so computed for the previous year relevant to the assessment year
commencing on the 1st day of April, 1995, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1996 or the 1st day of April, 1997 or the 1st
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
7 I
day of April, 1998 or the 1st day of April, 1999 or the 1st day of April, 2000 or the 1st day
of April, 2001 or the 1st day of April, 2002,
(/;) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1996, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1997 or the 1st day of April, 1998 or the 1st
day of April, 1999orthe 1st day of April, 2000 or the 1st day of April, 2001 orthe 1st day
of April, 2002,
(///) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1997, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1998 or the 1st day of April, 1999 or the 1st
day of April, 2000 or the 1st day of April, 2001 orthe 1st day of April, 2002,
(;v) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1998, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 1999 or the I st day of April, 2000 or the 1st
day of April ,2001 orthe 1st day of April, 2002,
(v) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 1999, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2000 or the 1st day of April, 2001 orthe 1st
day of April, 2002,
(vi) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 2000, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2001 orthe 1st day of April, 2002,
(v/i) the loss so computed for the previous year relevant to the assessment year
commencing on the 1 st day of April, 2001, to the extent, if any, such loss has not been
set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1 st day of April, 2002,
(v//7) the loss so computed for the previous year relevant to the assessment year
commencing on the 1st day of April, 2002,
shall be set off against the agricultural income of the assessee for the previous year relevant
to the assessment year commencing on the 1 st day of April, 2003.
(i) Where any person deriving any agricultural income from any source has been
succeeded in such capacity by another person, otherwise than by inheritance, nothing in
sub-rule (/) or sub-rule (2) shall entitle any person, other than the person incurring the loss,
to have it set off under sub-rule (/) or, as the case may be, sub-rule (2).
(4) Notwithstanding anything contained in this rule, no loss which has not been
determined by the Assessing Officer under the provisions of these rules orthe rules contained
in Part IV of the First Schedule to the Finance Act, 1994 (32 of 1994), or of the First Schedule
to the Finance Act, 1995 (22 of 1995), or of the First Schedule to the Finance (No. 2) Act, 1996
(33 of 1996), or of the First Schedule to the Finance Act, 1997 (26 of 1997), or of the First
Schedule to the Finance (No. 2) Act, 1998 (21 of 1998), or of the First Schedule to the Finance
Act, 1999 (27 of 1999), or of the First Schedule to the Finance Act, 2000 (10 of 2000), or of the
First Schedule to the Finance Act, 2001 (14 of 2001), shall be set off under sub-rule (/) or, as
the case may be, sub-rule (2).
Rule 9.—where the net result of the computation made in accordance with these rules
is a loss, the loss so computed shall be ignored and the net agricultural income shall be
deemed to be nil.
72
THE GAZETTE OF INDIA EXTRAORDINARY
[PART 11—
Rule 10.—The provisions of the Income-tax Act relating to procedure for assessment
(including the provisions of section 288A relating to rounding off of income) shall, with the
necessary modifications, apply in relation to the computation of the net agricultural income
of the assessee as they apply in relation to the assessment of the total income.
Rule II.—For the purposes of computing the net agricultural income of the assessee,
the Assessing Officer shall have the same powers as he has under the Income-tax Act for the
purposes of assessment of the total income.
SEC. if
THE GAZETTE OF INDIA EXTRAORDINARY
73
THE SECOND SCHEDULE
(See section 125)
In the First Schedule to the Customs Tariff Act,—
(1) in Chapter 1, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(2) in Chapter 2, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 0207.13 and 0207.14), the entry "30%" shall be substi-
tuted;
(3) in Chapter 3, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(4) in Chapter 4, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 0402.10,0402.21,0405.10 and 0406.90), the entry "30%"
shall be substituted;
(5) in Chapter 5,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-heading 0507.10), the entry "30%" shall be substituted;
(ii) in sub-heading 0507.10, for the entries in column (4) and column (5),
the entries "30%" and "20%" shatl respectively be substituted;
(6) in Chapter6, in sub-headings0603.10,0603.90,0604.10,0604.91 and0604.99,
for the entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(7) in Chapter 7,—
(i) for the entries in column (4) and column (5) occurring against each of
the sub-headings (except sub-headings 0713.10,071320,0713.31,0713.32,0713.33,
0713.39,0713.40,0713.50 and 0713.90), the entries "30%" and "20%" shall re-
spectively be substituted;
(//) in sub-heading 0713.10, for the entry in column (5), the entry "40%"
shall be substituted;
(Hi) in sub-headings 0713.20,0713.31,0713.32,0713.33,0713.39,0713.40,
0713.50 and 0713.90, for the entries in column (4) and column (5) occurring
against each of them, the entries "30%" and "20%" shall respectively be
substituted;
(8) in Chapter 8 —
(0 for the entries in column (4) and column (5) occurring against each of
the sub-headings (except sub-headings 0801.11,0801.19,0801.31,0802.11,0802.12,
0802.90,0805.10,0805.40,0805.50,0806.10,0806.20,0808.10,080820,0809.40 and
0813.20), the entries "30%" and "20%" shall respectively be substituted;
(ii) in sub-heading 0801.31, for the entry in column (4), the entry "30%"
shall be substituted;
(Hi) in sub-heading 0802.11, for the entry in column (5), the entry "Rs. 30
per kg." shall be substituted;
(iv) in sub-heading 0802.90, for the entry in column (5), the entry "90%"
shall be substituted;
(v) in sub-heading 0805.40, for the entry in column (5), the entry "15%"
shall be substituted;
(vi) in sub-heading 0806.10, for the entry in column (5), the entry "30%"
shall be substituted;
74
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(vii) in sub-heading 0806.20, for the entries in column (4) and column (5)
occurring against each of them, the entries "105%" and "95%" shall respectively
be substituted;
(viii) in sub-heading 0808.10, for the entry in column (5), the entry "40%"
shall be substituted;
(ix) in sub-heading 0808.20, for the entry in column (5), the entry "25%"
shall be substituted;
(x) in sub-heading 0813.20, for the entry in column (5), the entry "15%"
shall be substituted;
(9) in Chapter 9,—
(i) in sub-headings 0901.11,0901.12,0901.21,090122 and 0901.90, for the
entries in column (4) and column (5) occurring against each of them, the entries
111100%" and "100% less 13 paise per kg." shall respectively be substituted;
(ii) in sub-headings 0902.10,0902.20,0902.30 and 0902.40, for the entries
in column (4) and column (5) occurring against each of them, the entries " 100%"
and "100% less 26 paise per kg.", shall respectively be substituted;
(Hi) in sub-heading 0903.00, for the entries in column (4) and column (5)
occurring against each of them, the entries "30%" and "30% less 26 paise per
kg." shall respectively be substituted;
(iv) in sub-headings 0904.11 and 0904.12, for the entries in column (4) and
column (5) occurring against each of them, the entries "70%" and "62.5%" shall
respectively be substituted;
(v) in sub-heading 0904.20, for the entry in column (4), the entry "70%"
shall be substituted;
'(vi) in sub-heading 0905.00, for the entry in column (4), the entry "30%"
shall be substituted;
(vii) in sub-headings 0906.10 and 0906.20, for the entries in column (4) and
column (5) occurring against each of them, the entries "30%" and "22.5%" shall
respectively be substituted;
(viii) in sub-heading 0907.00, for the entries in column (4) and column (5)
occurring against each of them, the entries "70%" and "62.5%" shall respectively
be substituted;
(ix) in sub-heading 0908.10, for the entries in column (4) and column (5)
occurring against each of them, the entries "30%" and "22.5%" shall respectively
be substituted;
(x) in sub-heading 0908.20, for the entry in column (4), the entry "30%"
shall be substituted;
(xi) in sub-heading 0908.30, for the entries in column (4) and column (5)
occurring against each of them, the entries "70%" and "62.5%" shall respectively
be substituted;
(xii) in sub-headings 0909.10,0909.20,0909.30,0909.40,0909.50,0910.10,
0910.20,0910.30,0910.40,0910.50,0910.91 and 0910.99,for the entry in column(4)
occurring against each of them, the entry "30%" shall be substituted;
(10) in Chapter 11, for the entry in column (4) occurring against each of the sub-
headings (except sub-heading 1107.10), the entry "30%" shall be substituted;
(11) in Chapter 12,—
(t) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 1201.00,1202.10,120220,1203.00,1204.00,1205.10,1205.90,
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
75
1206.00,1207.10,1207.20,1207.30,1207.40,1207.50,1207.60,1207.91,1207.99,
1209.91 and 1209.99), the entry "30%" shall be substituted;
(ii) in sub-headings 1201.00,1202.10,120220,1204.00,1205.10,1205.90,
1206.00,1207.10,1207.20,1207.30,1207.40,1207.50 and 1207.60, forthe entries in
column (4) and column (5) occurring against each of them, the entries "30%" and
"20%" shall respectively be substituted;
(Hi) in sub-heading 1207.91, for the entries in column (4) and column (5)
occurring against each of them, the entries "70%" and "60%" shall respectively
be substituted;
(iv) in sub-heading 1207.99, for the entries in column (4) and column (5)
occurring against each of them, the entries "30%" and "20%" shall respectively
be substituted;
(12) in Chapter 13,—
(i) for the entry in column (4) occurring against each of the sub-
headings (except sub-heading 1301.20), the entry "30%" shall be substituted;
(ii) in sub-heading 1301.20, for the entries in column (4) and column
(5) occurring against each of them, the entries "30%" and "20%" shall
respectively be substituted;
(13) in Chapter 14, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(14) in Chapter 15,—
(i) in sub-headings 1501.00,1503.00,1504.10,1504.20,1504.30,1505.00 and
1506.00, for the entry in column (4) occurring against each of them, the entry
"30%" shall be substituted;
(ii) in sub-headings 1507.10 and 1507.90, for the entry in column (5)
occurring against each of them, the entry "35%" shall be substituted;
(Hi) in sub-headings 1508.10 and 1508.90, for die entry in column (5)
occurring against each of them, the entry "90%" shall be substituted;
(iv) in sub-heading 1509.10, for the entry in column(5), the entry "35%"
shall be substituted;
(v) in sub-heading 1509.90, for the entry in column (5), the entry "30%"
shall be substituted;
(vi) in sub-heading 1510.00, for the entry in column(5), the entry "35%"
shall be substituted.
(W/) in sub-headings 1511.10,1511.90,1512.11,1512.19,1512.21,1512.29,
1513.11,1513.19,151321 and 1513.29, for the entry in column(5) occurring against
each of them, the entry "90%" shall be substituted;
(viii) in sub-headings 1514.11,1514.19,1514.91 and 1514.99, forthe entry
in column (5) occurring against each of diem, the entry "65%" shall be
substituted;
(he) in sub-headings 1515.11,1515.19,1515.21,1515.29,1515.30,1515.40,
1515.50 and 1515.90, for the entry in column (5) occurring against each of them;
the entry "90%" shall be substituted;
(x) in sub-headings 1516.10,1516.20,1517.10,1517.90,1518.00,1520.00,
1521.10,1521.90 and 1522.00, for the entry in column (4) occurring against each
of them, the entry "30%" shall be substituted;
(15) in Chapter 16, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 1601.00 and 1602.32), the entry "30%" shall be substi-
tuted;
76
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(16) in Chapter 17, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 1701.11,1701.12,1701.91,1701.99 and 1704.10), the
entry "30%" shall be substituted;
(17) in Chapter 18, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(18) in Chapter 19, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 1901.10,1905.31 and 1905.32), die entry "30%" shall be
substituted;
(19) in Chapter 20, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 2004.10,2009.11,2009.12 and 2009.19). the entry "30%"
shall be substituted;
(20) in Chapter 21,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-heading 2106.90), the entry "30%" shall be substituted;
(ii) in sub-heading 2106.90, for the entry in column (4), the entry " 160%"
shall be substituted;
(21) in Chapter 22,—
(i) in sub-headings 2201.10,2201.90,2202.10 and 2202.90, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(ii) in sub-heading 2207.10, for the entry in column (4), the entry " 182%"
shall be substituted;
(Hi) in sub-heading 2207.20, for the entry in column (4), the entry "30%"
shall be substituted;
(iv) in sub-headings 2208.20,2208.30,2208.40,2208.50,2208.60,2208.70
and 2208.90, for the entry in column (4) occurring against each of them, the entry
"182%" shall be substituted;
(v) in sub-heading 2209.00, for the entry in column (4), the entry "30%"
shall be substituted;
(22) in Chapter 23, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(23) in Chapter 24, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(24) in Chapter 25 —
(i) in sub-headings 2504.10 and 2504.90, for the entries in column (4) and
column (5) occurring against each of them, the entries "30%" and "20%" shall
respectively be substituted;
(ii) in sub-headings2515.11,2515.12,2515.20,2516.11,2516.12,2516.21,
2516.22,2516.90,2519.10,2519.90,2523.10,2523.21,2523.29,2523.30and 2523.90,
for the entry in column (4) occurring against each of them, the entry "30%" shall
be substituted;
(25) in Chapter 26, in sub-headings 2620.11,2620.19 and 2620.30, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(26) in Chapter 27 —
(i) in sub-headings 2705.00,2706.00,2707.10,2707.20,2707.30,2707.50,
2707.91,2707.99,2708.10 and 2708.20, for the entry in column (4) occurring
against each of them, the entry "30%" shall be substituted;
(ii) in sub-heading 2709.00, for the entry in column (4), the entry " 10%"
shall be substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
7 7
(Hi) in sub-headings 2710.11,2710.19,2710.91, 2710.99,2712.10,2712.20,
2712.90,2713.11,2713.12,2713.20,2713.90 and2715.00, for the entry in column(4)
occurring against each of them, the entry "20%" shall be substituted;
(27) in Chapter 28, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 2801.20,2814.10,2814.20 and 2845.10), the entry
"30%" shall be substituted;
(28) in Chapter 29,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 2901.10,290121,2901.22,290121,2901.24,290129,2902.11,
2902.19,2902.20,2902.30,2902.41,2902.42,2902.43,2902.44,2902.50,2902.60,
2902.70,2902.90,2903.15,2903.21,2905.11,2905.31,2907.11.2910.30,291521,
2917.12,2917.36,2917.37,2918.12,2926.10,293321,2933.71,2936.10,293621,
2936.22,2936.23,293624,2936.25,293626,293627,293628,2936.29,2936.90,
2937.11,2937.12,2937.19,2937.21,293722,2937.23,2937.29,2937.31,2937.39,
2937.40,2937.50,2937.90,2939.41,2939.42,2939.43,2939.49.2939.51,2939.59,
2941.10,2941.20,2941.30,2941.40,2941.50 and 2941.90), the entry "30%" shall be
substituted;
(ii) in sub-heading 2902.43, for the entry in column (4), the entry "10%"
shall be substituted;
•
(Hi) in sub-headings 2936.10,2936.21,2936.22,2936.23,293624,293625,
2936.26,2936.27,293628,2936.29 and 2936.90, for the entries in column (4) and
column (5) occurring against each of them, the entries "30%" and "24%" shall
respectively be substituted;
(iv) in sub-headings 2937.11,2937.12,2937.19,2937.21,2937.22,2937.23,
2937.29,2937.31,2937.39,2937.40,2937.50,2937.90,2939.41,2939.42,2939.43,
2939.49,2939.51 and 2939.59, for the entries in column (4) and column (5) occurring
against each of them, the entries "30%" and "20%" shall respectively be
substituted;
(v) in sub-headings 2941.10,294120,2941.30,2941.40,2941.50 and 2941.90,
for the entries in column (4) and column (5) occurring against each of them, the
entries "30%" and "24%" shall respectively be substituted;
(29) in Chapter 30,—
(i) for the entries in column (4) and column (5) occurring against each of
the sub-headings (except sub-headings 3005.10, 3005.90, 3006.10, 3006.20,
3006.30,3006.40,3006.50,3006.60,3006.70 and 3006.80), the entries "30%" and
"20%" shall respectively be substituted;
(ii) in the sub-headings 3005.10,3005.90,3006.10,3006.20,3006.30,3006.40,
3006.50, 3006.70 and 3006.80, for the entry in column (4), the entry "30%" shall
be substituted;
(30) in Chapter 31, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 310221,3102.50,3104.30,3105.20,3105.30,3105.40,
3105.51,3105.59,3105.60 and 3105.90), the entry "30%" shall be substituted;
(31) in Chapter 32, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 3201.10,3201.20 and 3201.90), the entry "30%" shall
be substituted;
(32) in Chapter 33,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-heading 3302.10), the entry "30%" shall be substituted;
(ii) in sub-heading 3302.10, for the entry in column (4), the entry "160%"
shall be substituted;
78
THE GAZETTE OF [NDIA EXTRAORDINARY
[PART II—
(33) in Chapter 34,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 3402.11,3402.12,3402.13 and 3402.19), the entry "30%"
shall be substituted;
(ii) in the sub-headings 3402.11,3402.12,3402.13and 3402.19, forthe entries
in column (4) and column (5) occurring against each of them, the entries "30%"
and "20%" shall respectively be substituted;
(34) in Chapter 35, forthe entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(35) in Chapter 36, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be^sibstituted;
(36) in Chapter 37, in sub-headings 3702.32,3702.39,3702.42,3702.43,3702.44,
3707.10 and 3707.90, for the entry in column (4) occurring against each of them, the
entry "30%" shall be substituted;
(37) in Chapter 38,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 3801.10,3802.10,3812.10,3815.11,3815.12,3815.19,3815.90,
3818.00 and 3823.70), the entry "30%" shall be substituted;
(7;)insub-headings3801.10,3802.10and3812.10, for the entries in column
(4) and column (5) occurring against each of them, the entries "30%" and "20%"
shall respectively be substituted;
(38) in Chapter 39, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(39) in Chapter 40,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 4001.10,4001.21,4001.22,4001.29 and 4011.30), the entry
"30%" shall be substituted;
(ii) in sub-heading 4001.10, for the entry in column (4), the entry "70%"
shall be substituted;
(40) in Chapter 42, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(41) in Chapter 43, in sub-headings 4303.10,4303.90 and 4304.00, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(42) in Chapter 44, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 4401.10,4401.21,4401.22,4401,30,4402.00,4403.10,
440320,4403.41,4403.49,4403.91,4403.92,4403.99,4404.10,440420,4405.00,4406.10,
4406.90,4407.10,4407.24,4407.25,440726,440729,4407.91,4407.92 and 4407.99), the
entry "30%" shall be substituted;
(43) in Chapter 45, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(44) in Chapter 46, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(45) in Chapter 48, for the entry in column (4) occurring against each of the sub-
headings (except sub-heading 4801.00), the entry "30%" shall be substituted;
(46) in Chapter 50, for the entry in column (4) occurring against each of the
sub-headings (except sub-headings 5003.10 and 5003.90), the entry "30%" shall be
substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
79
(47) in Chapter 51, —
(i) in sub-headings 5101.21,5101.30,5109.10,5109.90 and5110.00, for the
entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(ii) in sub-heading 5113.00, for the entry in column (4), the entry "30% or
Rs. 60 per sq.mtr., whichever is higher" shall be substituted;
(48) in Chapter 52 —
(i) in sub-headings 5203.00,5207.90,5208.11,5208.12,5208.13,5208.19,
5208.21,5208.22,5208.23,5208.29,5208.31,5208.32 and 5208.33, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(ii) in sub-heading 5208.39, for the entry in column (4), the entry "30% or
Rs. 150 per kg., whichever is higher" shall be substituted;
(Hi) in sub-heading 5208.43, for the entry in column (4), the entry "30%"
shall be substituted;
(iv) in sub-heading 5208.49, for the entry in column (4), the entry "30% or
Rs. 200 per kg., whichever is higher" shall be substituted;
(v) in sub-headings 5209.11,5209.12,5209.19,520921,520972 and 520979,
for the entry in column (4) occurring against each of them, the entry "30%" shall
be substituted;
(vi) in sub-headings 5209.31,5209.32 and 5209.39, for the entry in column
(4) occurring against each of them, the entry "30% or Rs. 150 per kg., whichever
is higher" shall be substituted;
(vii) in sub-heading 5209.41, for the entry in column (4), the entry "30% or
Rs. 32 per sq. mtr., whichever is higher" shall be substituted;
(vili) in sub-heading 5209.43, for the entry in column (4), the entry "30% or
Rs. 30 per sq. mtr., whichever is higher" shall be substituted;
(ix) in sub-heading 520949, for the entry in column (4), the entry "30% or
Rs. 150 per kg., whichever is higher" shall be substituted;
(x) in sub-headings 5210.11,5210.12,5210.19,5210.21,5210.22,5210.29,
5210.31 and 5210.32, for the entry in column (4) occurring against each of them,
the entry "30%" shall be substituted;
(xi) in sub-heading 5210.39, for the entry in column (4), the entry "30% or
Rs. 150 per kg., whichever is higher" shall be substituted;
(xii) in sub-heading 5210.42, for the entry in column (4), the entry "30% or
Rs. 25 per sq. mtr., whichever is higher" shall be substituted;
(xiii) in sub-heading 5210.49, for the entry in column (4), the entry "30% or
Rs. 185 per kg., whichever is higher" shall be substituted;
(xiv) in sub-headings 5211.11,5211.12,5211.19,521121,521122 and 5211.29,
for the entry in column (4) occurring against each of them, the entry "30%" shall
be substituted;
(xv) in sub-headings 5211.31,5211.32 and 5211.39, for the entry in column
(4) occurring against each of them, the entry "30% or Rs. 150 per kg., whichever
is higher" shall be substituted;
(xvi) in sub-heading 5211.41, for the entry in column (4), the entry "30% or
Rs. 44 per sq. mtr., whichever is higher" shall be substituted;
(xvii) in sub-heading 5211.43, for the entry in column (4), the entry "30%
or Rs. 40 per sq. mtr., whichever is higher" shall be substituted;
80
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(xviii) in sub-heading 5211.49, for the entry in column (4), the entry "30%
or Rs. 150 per kg., whichever is higher*' shall be substituted;
(xix) in sub-headings 5212.11,5212.12,5212.13 and 5212.14, for the entry
in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(xx) in sub-heading 5212.15, for the entry in column (4), the entry "30% or
Rs. 165 per kg., whichever is higher" shall be substituted;
(xxi) in sub-headings 5212.21,5212.22 and 5212,23, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
(xxii) in sub-heading 5212.25, for the entry in column (4), the entry "30%
or Rs. 165 per kg., whichever is higher" shall be substituted;
(49) in Chapter 53, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(50) in Chapter 54, in sub-headings 5408.10 and 5408.21, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
15I) in Chapter 55 —
(i) in sub-headings 5505.10,5505.20,5512.11,5512.21,5512.91,5513.11,
5 513.12,5 513.13 and 5 513.19, for the entry in column (4) occurring agafniit'each
of them, the entry "30%" shall be substituted;
(ii) in sub-headings 5513.21 and 5513.22, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 150 per kg., whichever is
higher" shall be substituted;
(Hi) in sub-heading 5513.23, for the entry in column (4), the entry "30% or
Rs. 125 per kg. or Rs. 25 per sq. mtr, whichever is highest" shall be substituted;
(iv) in sub-heading 5513.29, for the entry in column (4), the entry "30% or
Rs. 185 per kg., whichever is higher" shall be substituted;
(v) in sub-heading 5513.32, for the entry in column (4), the entry "30% or
Rs. 170 per kg., whichever is higher" shall be substituted;
(vi) in sub-heading 5513.33, for the entry in column (4), the entry "30% or
Rs. 22 per sq. mtr., whichever is higher" shall be substituted;
(vil) in sub-heading 5513.39, for the entry in column (4), the entry "30% or
Rs. 125 per kg. or Rs. 30 per sq. mtr., whichever is highest" shall be substituted;
(viii) in sub-heading 5513.42, for the entry in column (4), the entry "30% or
Rs. 12 per sq. mtr., whichever is higher" shall be substituted;
(be) in sub-heading 5513.43, for the entry in column (4), the entry "30% or
Rs, 20 per sq. mtr., whichever is higher" shall be substituted;
(x) in sub-heading 5513.49, for the entry in column (4), the entry "30% or
Rs. 185 per kg,, whichever is higher" shall be substituted;
(xi) in sub-headings 5514.11,5514.12,5514.13 and5514.19,forthe entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(xil) in sub-heading 5514.21, for the entry in column (4), the entry "30% or
Rs. 100 per kg., or Rs. 30 per sq. mtr., whichever is highest" shall be substituted;
(xiii) in sub-heading 5514.22, for the entry in column (4), the entry "30% or
Rs. 140 per kg., whichever is higher" shall be substituted;
(xiv) in sub-heading 5514.23, for the entry in column (4), the entry "30% or
Rs. 160 per kg., whichever is higher" shall be substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
81
(xv) in sub-heading 5514.29, for the entry in column (4), the entry "30% or
Rs. 170 per kg., whichever is higher" shall be substituted;
(xvi) in sub-heading 5514.31, for the entry in column (4), the entry "30% or
Rs. 64 per sq. mtr., whichever is higher" shall be substituted;
(xvii) in sub-heading 5514.33, for the entry in column (4), the entry "30%
or Rs. 180 per kg., whichever is higher" shall be substituted;
(xviii) in sub-heading 5514.42, for the entry in column (4), the entry "30%
or Rs. 140 per kg., whichever is higher" shall be substituted;
(xix) in sub-heading 5514,43, for the entry in column (4), the entry "30% or
Rs. 31 per sq. mtr., whichever is higher" shall be substituted;
(xx) in sub-heading 5514.49, for the entry in column (4), the entry "30% or
Rs. 160 per kg., whichever is higher" shall be substituted;
(xxl) in sub-heading 5515.12, for the entry in column (4), the entry "30% or
Rs. 95 per kg., whichever is higher" shall be substituted;
fxxii) in sub-heading 5515.13, for the entry in column (4), the entry "30%
or Rs. 75 per sq. mtr., whichever is higher" shall be substituted;
(xxiii) in sub-heading 5515.21, for the entry in column (4), the entry "30%
or Rs. 79 per sq. mtr., whichever is higher" shall be substituted;
(xxtv) in sub-heading 5515.22, for the entry in column (4), the entry "30%
or Rs. 140 per kg., whichever is higher" shall be substituted;
(xxv) in sub-heading 5 515.91, for the entry in column (4), the entry "30% or
Rs. 57 per sq. mtr., whichever is higher" shall be substituted;
(xxvi) in sub-heading 5515.92, for Ihe entry in column (4), the entry "30%
or Rs. 55 per sq. mtr., whichever is higher" shall be substituted;
(xxvii) in sub-heading 5516.11, for the entry in column (4), the entry "30%"
shall be substituted;
(xxviii) in sub-heading 5516,12, for the entry in column (4), the entry "30%
or Rs. 35 per sq. mtr., whichever is higher" shall be substituted;
(xxlx) in sub-heading 5516.13, for the entry in column (4), the entry "30%
or Rs. 40 per sq. mtr., whichever is higher" shall be substituted;
(xxx) in sub-heading 5516.21, for the entry in column (4), the entry "30%"
shall be substituted;
(xxxi) in sub-headings 5516.22 and 5516.23, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 150 per kg., whichever is
higher" shall be substituted;
(xxxii)insub-headings5516.31,5516.32,5516.33,5516.34,5516.41, 5516.42,
5516.91 and 5516.92, for the entry in column (4) occurring against each of them,
the entry "30%" shall be substituted;
(xxxiii) in sub-heading 5516.94, for the entry in column (4), the entry "30%
or Rs. 40 per sq. mtr., whichever is higher" shall be substituted;
(52) in Chapter 56, in sub-headings 5601.10,5608.11,5608.19,5608.90 and 5609.00,
for the entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(53) in Chapter 57 —
(i) in sub-headings 5701.10,5701.90,5702.10,5702.20 and 5702.31, for the
entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
82
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(ii) in sub-heading 5702.32, for the entry in column (4), the entry "30% or
Rs. 105 per sq. mtr., whichever is higher" shall be substituted;
(Hi) in sub-headings 5702.39 and 5702.41, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(iv) in sub-heading 5702.42, for the entry in column (4), the entry "30% or
Rs. 80 per sq. mtr., whichever is higher" shall be substituted;
(v) in sub-headings 5702.49 and 5702.51, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(vi) in sub-heading 5702.52, forme entry in column (4), the entry "30% or
Rs. 105 per sq. mtr., whichever is higher" shall be substituted;
(vii) in sub-headings 5702.59 and 5702.91, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(viii) in sub-heading 5702.92, for the entry in column (4), the entry "30% or
Rs. 110 per sq. mtr., whichever is higher" shall be substituted;
(be) in sub-headings 5702.99 and 5703.10, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(x) in sub-heading 5703.20, for the entry in column (4), the entry "30% or
Rs. 70 per sq. mtr., whichever is higher" shall be substituted;
(xi) in sub-heading 5703.30, for the entry in column (4), the entry "30% or
Rs. 55 per sq. mtr., whichever is higher" shall be substituted;
(xii) in sub-headings 5703.90 and 5704.10, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(xiii) in sub-heading 5704.90, for the entry in column (4), the entry "30% or
Rs. 35 per sq. mtr., whichever is higher" shall be substituted,
(xiv) in sub-heading 5705.00, for the entry in column (4), the entry "30%"
shall be substituted;
(54) in Chapter 58 —
(i) in sub-heading 5801.10, for the entry in column (4), the entry "30% or
Rs. 210 per sq. mtr., whichever is higher" shall be substituted;
(it) in sub-heading 5801.21, for the entry in column (4), the entry "30% or
Rs. 80 per sq. mtr., whichever is higher" shall be substituted;
(Hi) in sub-heading 5801.22, for the entry in column (4), the entry "30% or
Rs. 75 per sq. mtr., whichever is higher" shall be substituted;
(iv) in sub-heading 5801.23, for the entry in column (4), the entry "30% or
Rs. 80 per sq. mtr., whichever is higher" shall be substituted;
(v) in sub-heading 5801.24, for the entry in column (4), the entry "30% or
Rs. 135 per sq. mtr., whichever is higher" shall be substituted;
(vi) in sub-heading 5801.25, for the entry in column (4), the entry "30% or
Rs. 120 per sq. mtr., whichever is higher" shall be substituted;
(vii) in sub-heading 5801.26, for the entry in column (4), the entry "30% or
Rs. 180 per sq. mtr., whichever is higher" shall be substituted;
(viii) in sub-heading 5801.31, for the entry in column (4), the entry "30% or
Rs. 75 per sq. mtr., whichever is higher" shall be substituted;
(be) in sub-heading 5801.32, for the entry in column (4), the entry "30% or
Rs. 180 per sq. mtr., whichever is higher" shall be substituted;
SEC. 21
THE GAZETTE OF INDIA EXTRAORDINARY
83
(x) insub-heading5801.33,fortheentry in column (4), the entry "30% or
Rs. 1 SO per sq. mtr., whichever is higher" shall be substituted;
(xi) in sub-heading 5 801.34, for the entry in column (4), the entry "30% or
Rs. 140 per sq. mtr., whichever is higher" shall be substituted;
(xii) in sub-heading 5801.36, for the entry in column (4), the entry "30% or
Rs. 130 per sq. mtr., whichever is higher" shall be substituted;
(xiii) in sub-heading 5801.90, for the entry in column (4), the entry "30% or
Rs. 35 per sq. mtr., whichever is higher" shall be substituted;
(xtv) m sub-heading 5802.20, for the entry in column (4), the entry "30%"
shall be substituted;
(xv) in sub-heading 5802.30, for the entry in column (4), the entry "30% or
Rs. 150 per kg., whichever is higher" shall be substituted;
(xvi) in sub-headings 5803.10 and 5803.90, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(xvii) in sub-headings 5804.10,5804.21,5804.29 and 5804.30, forme entry
in column (4) occurring against each of them, the entry "30% or Rs. 200 per kg.,
whichever is higher" shall be substituted;
(xviii) in sub-headings 5805.00,5806.10,5806.20,5806.31,5806.39,5806.40
and 5808.10, for the entry in column (4) occurring against each of them, the entry
"30%" shall be substituted;
(xix) in sub-heading 5810.10, for the entry in column (4), the entry "30% or
Rs. 200 per kg., whichever is higher" shall be substituted;
(xx) in sub-headings 5810.91,5810.92,5810.99 and 5811.00, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(55) in Chapter 59, in sub-headings 5904.10,5904.90,5905.00,5906.10,5906.91,
5906.99,5907.00,5908.00,5909.00,5911.20,5911.31,5911.32,5911.40 and 5911.90, for
the entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(56) in Chapter 60, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 6001.92,6005.21,6005.22,6005.23,6005.24,6005.31,
6005.32,6005.33,6005.34,6005.41,6005.42,6005.43 and 6005.44), the entry "30%" shall
be substituted;
(57) in Chapter 61,—
'
(I) in sub-heading 6101.10, for the entry in column (4), the entry "30% or
Rs. 700 per piece, whichever is higher" shall be substituted;
(ii) in sub-heading 6101.20, for the entry in column (4), the entry "30% or
Rs. 540 per piece, whichever is higher" shall be substituted;
(Hi) in sub-heading 6101.30, for the entry in column (4), the entry "30% or
Rs. 530 per piece, whichever is higher" shall be substituted;
(iv) in sub-heading 6101.90, for the entry in column (4), the entry "30%"
shall be substituted;
(v) in sub-heading 6102.10, for the entry in column (4), the entry "30% or
Rs. 595 per piece, whichever is higher" shall be substituted;
(vi) in sub-heading 6102.20, for the entry in column (4), the entry "30% or
Rs. 425 per piece, whichever is higher" shall be substituted;
(vii) in sub-heading 6102.30, for the entry in column (4), the entry "3U% or
Rs. 475 per piece, whichever is higher" shall be substituted;
84
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
fv///;insub-headings6102.9O,6103.11,6103.12,6103.19,6103.21,6103.22
610323,6103.29,6103.31,6103.32,6103.33,6103.39,6103.41,6103.42,6103.43,
6103.49,6104.11,6104.12 and6104.13, for the entry in column (4) occurring against
each of them, the entry "30%" shall be substituted;
(be) in sub-heading 6104.19, for the entry in column (4), the entry "3 0% or
Rs. 460 per piece, whichever is higher" shall be substituted;
(x) in sub-headings 6104.21,6104.22,6104.23,6104.29,6104.31,6104.32,
6104,33 and 6104.39, for the entry in column (4) occurring against each of them,
the entry "30%" shall be substituted;
(xi) in sub-heading 6104.41, for the entry in column (4), the entry "30% or
Rs. 255 per piece, whichever is higher" shall be substituted;
(xii) in sub-heading 6104.42, for the entry in column (4), the entry "30%"
shall be substituted;
(xiii) in sub-headings 6104.43 and 6104.44, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 255 per piece, whichever is
higher" shall be substituted;
(xtv) in sub-heading 6104.49, for the entry in column (4), the entry "30% or
Rs. 220 per piece, Whichever is higher" shall be substituted;
(xv) in sub-headings6104.51,6104.52,6104.53 and 6104.59, for the entry in
column (4) occurring against each of them, the entry "30% or Rs. 110 per piece,
whichever is higher" shall be substituted;
(xvi) in sub-heading 6104.61, for the entry in column (4), the entry "30%"
shall be substituted;
(xvii) in sub-headings 6104.62 and 6104.63, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 98 per piece, whichever is
higher" shall be substituted;
(xviii) in sub-heading 6104.69, for the entry in column (4), the entry "30%"
shall be substituted;
(xix) in sub-headings 6105.10 and 6105.20, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 83 per piece, whichever is
higher" shall be substituted;
(xx) in sub-heading 6105.90, for the entry in column (4), the entry "30% or
Rs. 90 per piece, whichever is higher" shall be substituted;
(xxi) in sub-heading 6106.10, for the entry in column (4), the entry "30% or
Rs. 90 per piece, whichever is higher" shall be substituted;
(xxii) in sub-heading 6106.20, for the entry in column (4), the entry "3 0%
or Rs. 25 per piece, whichever is higher" shall be substituted;
(xxiii) in sub-heading 6106.90, for the entry in column (4), the entry "30%
or Rs. 135 per piece, whichever is higher" shall be substituted;
(xxiv) in sub-heading 6107.11, for the entry in column (4), the entry "30%
or Rs. 24 per piece, whichever is higher" shall be substituted;
(xxv) in sub-heading 6107.12, for the entry in column (4), the entry "30% or
Rs. 30 per piece, whichever is higher" shall be substituted;
(xxvi) in sub-headings6107.19,6107.21,6107.22,610729,6107.91,6107.92,
6107.99,6108.11 and 6108.19, for the entry in column (4) occurring against each
of them, the entry "30%" shall be substituted;
(xxvii) in sub-headings 6108.21 and 6108.22, for the entry in column (4)
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
85
occurring against each of them, the entry "30% or Rs. 25 per piece, whichever is
higher" shall be substituted;
(xxviii) in sub-headings 6108.29,6108.31,6108.32 and 6108.39, for the
entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(xxix) m sub-heading 6108.91, for the entry in column (4), the entry "30%
or Rs. 65 per piece, whichever is higher" shall be substituted;
(xxx) in sub-heading 6108.92, for the entry in column (4), the entry "30% or
Rs. 60 per piece, whichever is higher" shall be substituted;
(xxxi) in sub-heading 6108.99, for the entry in column (4), the entry "30%"
shall be substituted;
(xxxii) in sub-heading 6109.10, for the entry in column (4), the entry "30%
or Rs. 45 per piece, whichever is higher" shall be substituted;
(xxxiii) in sub-heading 6109.90, for the entry in column (4), the entry "30%
or Rs, 50 per piece, whichever is higher" shall be substituted;
(xxxiv) in sub-headings 6110.11, 6110.12 and 6110.19, for the entry in
column (4) occurring against each of them, the entry "30% or Rs. 275 per piece,
whichever is higher" shall be substituted;
(xxxv) in sub-heading 6110.20, for the entry in column (4), the entry "30%
or Rs. 85 per piece, whichever is higher" shall be substituted;
(xxxvi) in sub-heading 6110.30, for the entry in column (4), the entry "30%
or Rs. 110 per piece, whichever is higher" shall be substituted;
(xxxvii) in sub-heading 6110.90, for the entry in column (4), the entry
"30% or Rs. 105 per piece, whichever is higher" shall be substituted;
(xxxviii) in sub-headings 6111.10, 6111.20, 6111.30, 6111.90,6112.11,
6112.12,6112.19,6112.20,6112.31,6112.39,6112.41,6112.49,6113.00,6114.10,
6114.20,6114.30,6114.90,6115.11,6115.12,6115.19,6115.20,6115.91,6115.92,
6115.93,6115.99,6116.10,6116.91,6116.92,6116.93,6116.99,6117.10,611720,
6117.80 and 6117.90, for the entry in column (4) occurring against each of them,
the entry "30%" shall be substituted;
(58) in Chapter 62,—
(i) in sub-headings 6201.11 and 6201.12, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 385 per piece, whichever
is higher" shall be substituted;
(it) in sub-heading 6201.13, for the entry in column (4), the entry "30% or
Rs. 320 per piece, whichever is higher" shall be substituted;
(Hi) in sub-heading 6201.19, for the entry in column (4), the entry "30%"
shall be substituted;
(iv) in sub-heading 6201.91, for the entry in column (4), the entry "30% or
Rs. 220 per piece, whichever is higher" shall be substituted;
(v) in sub-heading 6201.92, for the entry in column (4), the entry "30% or
Rs. 210 per piece, whichever is higher" shall be substituted;
(vi) in sub-heading 6201.93, for the entry in column (4), the entry "30% or
Rs. 180 per piece, whichever is higher" shall be substituted;
(vii) in sub-heading 6201.99, for the entry in column (4), the entry "30%"
shall be substituted;
(viii) in sub-heading 6202.11, for the entry in column (4), the entry "30% or
. 86
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Rs. 385 per piece, whichever is higher" shall be substituted;
(ix) in sub-heading 6202.12, for the entry in column (4), the entry "30% or
Rs. 210 per piece, whichever is higher" shall be substituted;
(x) in sub-heading 6202.13, for the entry in column (4), the entry "30% or
Rs. 385 per piece, whichever is higher" shall be substituted;
(xl) in sub-heading 6202.19, for the entry in column (4), the entry "30%"
shall be substituted;
(xii) in sub-heading 6202.91, for the entry in column (4), the entry "30% or
Rs. 220 per piece, whichever is higher" shall be substituted;
(xiii) in sub-heading 6202.92, for the entry in column (4), the entry "30% or
Rs. 160 per piece, whichever is higher" shall be substituted;
(xtv) in sub-heading 6202.93, for the entry in column (4), the entry "30% or
Rs. 220 per piece, whichever is higher" shall be substituted;
(xv) in sub-heading 6202.99, for the entry in column (4), the entry "30%"
shall be substituted;
(xvi) in sub-heading 6203.11, for the entry in column (4), the entry "30% or
Rs. 1100 per piece, whichever is higher" shall be substituted;
(xvit) in sub-heading 6203.12, for the entry in column (4), the entry "30%
or Rs. 720 per piece, whichever is higher" shall be substituted;
(xviii) jn sub-heading 6203.19, for the entry in column (4), the entry "30%
or Rs. 1110 per piece, whichever is higher" shall be substituted;
(xix) in sub-headings 6203.21,6203.22,6203.23 and 6203.29, for the entry
in column (4) occurring against each of them, the entry "30% or Rs.' 145 per piece,
whichever is higher" shall be substituted;
(xx) in sub-heading 6203.31, for the entry in column (4), the entry "30% or
Rs. 815 per piece, whichever is higher" shall be substituted;
(xxi) in sub-heading 6203.32, for the entry in column (4) occurring against
each of them, the entry "30% or Rs. 440 per piece, whichever is higher" shall be
substituted;
(xxii) in sub-heading 6203.33, for the entry in column (4), the entry "30%
or Rs. 320 per piece, whichever is higher" shall be substituted;
(xxiii) in sub-heading 6203.39, for the entry in column (4), the entry "30%
Or Rs. 755 per piece, whichever is higher" shall be substituted;
(xxtv) in sub-heading 6203.41, for the entry in column (4), the entry "30%
or Rs. 285 per piece, whichever is higher" shall be substituted;
(xxv) in sub-heading 6203.42, for the entry in column (4), the entry "30% or
Rs. 135 per piece, whichever is higher" shall be substituted;
(xxvi) in sub-headings 6203.43 and 6203.49, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 110 per piece, whichever is
higher" shall be substituted;
(xxvii) in sub-heading 6204.11, for the entry in column (4), th« entry "30%
or Rs. 550 per piece, whichever isiiigher" shall be substituted:
(xxviii) in sub-heading 6204.12, for the entry in column (4), the entry "30%"
shall be substituted;
(xxix) in sub-heading 6204.13, for the entry in column (4), the ent^y "30%
or Rs. 550 per piece, whichever is higher" shall be substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
87
(xxx) in sub-heading,6204.19, for the entry in column (4), the entry "30% or
Rs. 500 per piece, whichever is higher" shall be substituted;
(xxxt) in sub-headings 6204.21,6204.22,6204.23 and 6204.29, for the entry
in column (4) occurring against each of them, the entry "30%" shall be
substituted;
fxxxii) in sub-heading 6204.31, for the entry in column (4), the entry "30%
or Rs. 370 per piece, whichever is higher" shall be substituted;
(xxxiii) in sub-heading 6204.32, for the entry in column (4), the entry "30%
or Rs. 650 per piece, whichever is higher" shall be substituted;
(xxxtv) in sub-heading 6204.33, for the entry in column(4), the entry "30%
or Rs. 390 per piece, whichever is higher" shall be substituted;
(xxxv) in sub-heading 6204.39, for the entry in column (4), the entry "30%
or Rs. 350 per piece, whichever is higher" shall be substituted;
(xxxvi) in sub-heading 6204.41, for the entry in column (4), the entry "30%
or Rs. 145 per piece, whichever is higher" shall be substituted;
(xxxvli) in sub-heading 6204.42, for the entry in column (4), the entry
"30% or Rs. 116 per piece", whichever is higher" shall be substituted;
(xxxviii) in sub-headings 6204.43,6204.44 and 6204.49, for the entry in
column (4) occurring against each of them, the entry "30% or Rs. 145 per piece,
whichever is higher" shall be substituted;
(xxxtx) in sub-heading 6204.51, for the entry in column (4), the entry "30%
or Rs. 485 per piece, whichever is higher" shall be substituted;
(xl) in sub-headings 6204.52,6204.53 and 6204.59, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
(xli) in sub-heading 6204.61, for the entry in column (4), the entry "30% or
Rs. 285 per piece, whichever is higher" shall be substituted;
(xlii) in sub-heading 6204.62, for the entry in column (4), the entry "30% or
Rs. 135 per piece, whichever is higher" shall be substituted;
(xliii) in sub-heading 6204.63, for the entry in column (4), the entry "30%"
shall be substituted;
(xliv) in sub-heading 6204.69, for the entry in column (4), the entry "30%
or Rs. 135 per piece, whichever is higher" shall be substituted;
(xh) in sub-heading 6205.10, for the entry in column (4), the entry "30% or
Rs. 200 per piece, whichever is higher" shall be substituted;
(xlvi) in sub-heading 6205.20, for the entry in column (4), the entry "30%
or Rs. 85 per piece, whichever is higher" shall be substituted;
(xlvii) in sub-heading 6205.30, for the entry in column (4), the entry "30%
or Rs. 120 per piece, whichever is higher" shall be substituted;
(xtvlii) in sub-heading 6205.90, for the entry in column (4), the entry "30%
or Rs. 95 per piece, whichever is higher" shall be substituted;
(xlix) in subrheadfog 6206.10, for the entry in column (4), the enrry "30%''
shall be substituted;
(t) in sub-heaciing 6206.20, for the entry in cplurnn (4),'the entry "30% or
Rs. 135 per piece, whichever is higher" shall be substituted;
(II) in sub-heading 6206.30, for the entry in column (4), the entry "30% or
Rs. 95 per piece, whichever is higher" shall be substituted;
88
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(Hi) in sub-heading 6206.40, for the entry in column (4), the entry "30% or
Rs. 120 per piece, whichever is higher" shall be substituted;
(liii) in sub-heading 6206.90, for the entry in column (4), the entry "30%"
shall be substituted;
(liv) in sub-heading 6207.11, for the entry in column (4), the entry "30% or
Rs. 28 per piece, whichever is higher" shall be substituted;
(l\) in sub-heading 6207.19, for the entry in column (4), the entry "30% or
Rs. 30 per piece, whichever is higher" shall be substituted;
(hi) in sub-headings 6207.21,6207.22,6207.29,6207.91 and 6207.92, for
the entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(Ivii) in sub-heading 6207.99, for the entry in column (4), the entry "30% or
Rs. 70 per piece, whichever is higher" shall be substituted;
(Iviii) in sub-heading 6208.11, for the entry in column (4), the entry "30%
or Rs. 80 per piece, whichever is higher" shall be substituted;
(lix) in sub-heading 6208.19, for the entry in column (4), the entry "30% or
Rs. 60 per piece, whichever is higher" shall be substituted;
(he) in sub-headings 6208.21,6208.22 and 6208.29, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
(hi) in sub-heading 6208.91, for the entry in column (4), the entry "30% or
Rs. 95 per piece, whichever is higher" shall be substituted;
(Ixii) in sub-heading 6208.92, for the entry in column (4), the entry "30% or
Rs. 65 per piece, whichever is higher" shall be substituted;
(lxiii) in sub-headings 6208.99,6209.10,6209.20,6209.30,6209.90 and
6210.10, for the entry in column (4) occurring against each of them, the entry
"30%" shall be substituted;
(Ixiv) in sub-heading 6210.20, for the entry in column (4), the entry "30%
or Rs. 365 per piece, whichever is higher" shall be substituted;
(Ixv) in sub-heading 6210.30, for the entry in column (4), the entry "30% or
Rs. 305 per piece, whichever is higher" shall be substituted;
(Ixvi) jn sub-headings 6210.40 and 6210.50, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 65 per piece, whichever is
higher" shall be substituted;
(Ixvii) in sub-headings 6211.11,6211.12,6211.20 and 62II .31, for the entry
in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(Ixvlii) in sub-headings 6211.32 and 6211.33, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 135 per piece, whichever is
higher" shall be substituted;
(Ixix) in sub-headings 6211.39 and 6211.41, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(txx) in sub-headings 6211.42 and 6211.43, for the entry in column (4)
occurring against each of them, the entry "30% or Rs. 135 per piece, whichever is
higher" shall be substituted;
(hcci) in sub-heading 6211.49, for the entry in column (4), the entry "30%"
shall be substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
89
(Ixxii) in sub-headings 6212.10,6212.20,6212.30 and 6212.90, for the entry
in column (4) occurring against each of them, the entry "30% or Rs. 30 per piece,
whichever is higher" shall be substituted;
(Ixxiif) in sub-headings 6213.10, 6213.20 and 6213.90, for the entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(ixxiv) in sub-heading 6214,10, for the entry in column (4), the entry "30%
or Rs. 390 per piece, whichever is higher" shall be substituted;
(Ixxv) in sub-heading 6214.20, for the entry in column (4), the entry "30%
or Rs. 180 per piece, whichever is higher" shall be substituted;
(Ixxvi) in sub-headings 6214.30 and 6214.40, for the entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(hexvii) in sub-heading 6214.90, for the entry in column (4), the entry "30%
or Rs. 75 per piece, whichever is higher" shall be substituted;
(Ixxviii) in sub-headings 6215.10,6215.20 and 6215.90, for the entry in
' column (4) occurring against each of them, the entry "30% or Rs. 55 per piece,
whichever is higher" shall be substituted;
(babe) in sub-headings 6216.00,6217.10 and 6217.90, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
(59) in Chapter 63 —
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 6301.20,6302.21,6302.31,6310.10 and 6310.90), the entry
"30%" shall be substituted;
(ii) in sub-heading 6301.20, for the entry in column (4), the entry "30% or
Rs. 275 per piece, whichever is higher" shall be substituted;
(Hi) in sub-heading 6302.21, for the entry in column (4), the entry "30% or
Rs. 108 per kg., whichever is higher" shall be substituted;
(iv) in sub-heading 6302.31, for the entry in column (4), the entry "30% or
Rs. 96 per kg., whichever is higher" shall be substituted;
(60) in Chapter 64, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(61) in Chapter 65, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(62) in Chapter 66, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(63) in Chapter 67, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(64) in Chapter 68, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(65) in Chapter 69, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 6902.10,690220,6902.90,6903.10,690320 and 6903.90),
the entry "30%" shall be substituted;
(66) in Chapter 70, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 7019.19 and 7019.51), the entry "30%" shall be substi-
tuted;
(67) in Chapter 71, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(68) in Chapter 72, for the entry in column (4) occurring against each of the sub-
90
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
headings (except sub-headings 7201.10.7201.20,7201.50,7202.11,7202.19,7202.21,
720229,720230,7202.41,7202.49,7202.50,7202.60,7202.70,7202.80,7202.91,7202.92,
7202.93 and 7202.99), the entry "40%" shall be substituted;
(69) in Chapter 73, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(70) in Chapter 74, for the entry in column (4) occurring against each of the sub-
headings, the entry "25%" shall be substituted;
(71) in Chapter 75, in sub-headings 7508.10 and 7508.90, for the entry in column
(4) occurring against each of them, the entry "15%" shall be substituted;
(72) in Chapter 76 —
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 7615.11,7615.19 and J615.20), the entry " 15%" shall be
substituted;
(ii) in sub-headings 7615.11,7615.19 and 7615.20, for the entry in column
(4) occurring against each of them, the entry "30%" shall be substituted;
(73) in Chapter 78, for the entry in column (4) occurring against each of the sub-
headings, the entry "25%" shall be substituted;
(74) in Chapter 79, for the entry in column (4) occurring against each of the sub-
headings, the entry "25%" shall be substituted;
(75) in Chapter 80, for the entry in column (4) occurring against each of the sub-
headings, the entry "15%" shall be substituted;
(76) in Chapter 81, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 8104.11 and 8104.19), the entry "30%" shall be substi-
tuted;
(77) in Chapter 82, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(78) in Chapter 83, for the entry in column (4) occurring against each of the
sub-headings , the entry "30%" shall be substituted;
(79) in Chapter 84 —
(i) in sub-headings 8407.31,8407.32,8407.33,8407.34,8408.20,8409.91,
8409.99,8414.30,8414.51,8414.59,8414.80,8414.90,8415.10,8415.20,8415.81,
8415.82,8415.83,8415.90,8418.21,8418.22,8418.29,8418.91,8418.99,8422.11,
8422.19,8422.90,8423.10,8448.19,8450.11,8450.12,8450.19,8450.20,8450.90,
8451.10,8451.90,8452.10,8452.90,8469.12,8469.20,8469.30,8472.10,8472.20,
8472.30, 8472.90, 8473.10 and 8473.40, for the entry in column (4) occurring
against each of them, the entry "30%" shall be substituted;
00 in sub-heading 8473.50, for the entry in column (4), the entry "10%"
shall be substituted;
(Hi) in sub-headings 8479.50,8479.60,8479.89, 8482.10,8482.20,8482.30,
8482.40,8482.50,8482.80,8482.91,8482.99,848320,8485.10 and 8485.90, for the
entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(80) in Chapter 85,—
(i) in sub-headings 8504.10,8506.10,8506.30,8506.40,8506.50,8506.60,
8506.80,8506.90,8507.10,8507.20,8507.30,8507.40,8507.80,8507.90,8509.10,
8509.20,8509.30,8509.40,8509.80,8509.90,8510.10,8510.20,8510.30,8510.90,
8511.10,8511.20,8511.30,8511.40,8511.50,8511.80,8511.90,8512.10,8512.20,
8512.30,8512.40,8512.90,8513.10,8513.90,8516.10,8516.21.8516.29,8516.31,
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
91
8516.32,8516.33,8516.40,8516.50,8516.60,8516.71,8516.72,8516.79.8516.80.
8518.10,8518.21,8518.22,851829,8518.30,8518.40,8518.50,8519.10,851921,
8519.29,8519.31,8519.39,8519.40,8519.92,8519.93,8519.99,8520.10,8520.32,
8520.33,8520.39,8520.90,8521.10,8521.90,8522.10 and 8522.90, forthe entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
00 in sub-headings 8523.11,8523.12,8523.13 and 8523.20, for the entry in
column (4) occurring against each of them, the entry " 10%" shall be substituted;
OH) in sub-heading 8523.30, for the entry in column (4), the entry "30%"
shall be substituted;
(rv) in sub-heading 8523.90, for the entry in column (4), the entry "10%"
shall be substituted;
(v) in sub-heading 8524.10, for the entry in column (4), the entry "30%"
shall be substituted;
(vi) in sub-heading 8524.31, for the entry in column (4), the entry " 10%"
shall be substituted;
(\ii) in sub-headings 8524.32 and 8524.39, forthe entry in column (4)
occurring against each of them, the entry "30%" shall be substituted;
(viii) in sub-heading 8524.40, for the entry in column (4), the entry "10%"
shall be substituted;
(be) in sub-headings 8524.51,8524.52,8524.53 and 8524.60, forthe entry in
column (4) occurring against each of them, the entry "30%" shall be substituted;
(x) in sub-heading 8524.91, forthe entry in column (4), the entry "10%"
shall be substituted;
(xi) in sub-headings 8524.99,8525.30,8525.40,8526.10,8526.91,8526.92,
8527.12,8527.13,8527.19,852721,8527.29,8527.31,852732,8527.39,8527.90,
8528.12,8528.13,8528.21,852822,8528.30,8531.10,8531.80,8531.90,8536.10,
853620,8536.30,8536.41,8536.49,8536.50,8536.61,8536.69,8536.90,8537.10,
8538.10,8538.90, 8539.10,853921,853922,8539.29,8539.31,8539.32,8539.39,
8539.41,8539.49, 8539.90,8540.11,8540.91,8543.40,8543.89,8544,11,8544.19,
854420,8544.30,8544.41,8544.49,8544.51,8544.59,8544.60,8548.10 and 8548.90,
for the entry in column (4) occurring against each of them, the entry "30%" shall
be substituted;
(81) in Chapter 86, for the entry in column (4) occurring against each of the
sub-headings (except sub-headings 8607.11,8607.12,8607.19,8607.21,8607.29,
8607.30,8607.91,8607.99 and 8608.00), the entry "30%" shall be substituted;
(82) in Chapter 87, for the entry in column (4) occurring against each of the
sub-headings (exceptsub-headings 8703.10,8703.21,8703.22,8703.23,8703.24,
8703.31,8703.32,8703.33,8703.90,8710.00,8711.10,871120,871130,8711.40,8711.50
and 8711.90), the entry "30%" shall be substituted;
(S3) in Chapter 88 in sub-headings 8801.90,8802.60,8803.90,8804.00,8805.10,
8805.21 and 8805.29, for the entry in column (4) occurring against each of them, the
entry "30%" shall be substituted;
{84) in Chapter 89,—
(i) for the entry in column (4) occurring against each of the sub-headings
(except sub-headings 8902.00,8904.00,8905.10,8905.90,8906.10,8906.90 and
8908.00), the entry "30%" shall be substituted;
(ii) in sub-heading 8908.00, for the entry in column (4), the entry " 15%"
shall be substituted;
92
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(85) in Chapter 90,—
(I) in sub-headings 9001.10,9001.20,9001.30,9001.40,9001.50,9001.90,
9002.11,9002.19,9002.20,9002.90,9003.11,9003.19,9003.90,9004.10,9004.90,
9005.10,9005.80,9005.90,9006.10,9006.20,9006.30,9006.40,9006.51,9006.52,
9006.53,9006.59,9006.61,9006.62 9006.69,9008.10,9008.20,9008.30,9008.40,
9009.12,9009.22,9009.30 9010.60 9022.19,9022.29,9022.30 and 9022.90, for the
entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
(ii) in sub-heading 9026.90, for the entry in column (4), the entry "5%" shall
be substituted;
(86) inChapter91, in sub-headings 9101.11,9101.12,9101.19,9101.21,9101.29,
9101.91,9101.99,9102.11,9102.12,9102.19,9102.21,9102.29,9102.91,9102.99,9103.10,
9103.90,9104.00,9105.11,9105.19,910571,9105.29,9105.91,9105.99,9106.10,910620,
9106.90,9107.00,9111.10,911170,9111.80,9111.90,9112.20,9112.90,9113.10,911320
and 9113.90, for the entry in column (4) occurring against each of them, the entry
"30%" shall be substituted;
(87) in Chapter 92, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(88) in Chapter 93, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(89) in Chapter 94, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(90) in Chapter 95, for the entry in column (4) occurring against each of the sub-
headings (except sub-headings 9506.11,9506.12,9506.19,9506.21,9506.29,9506.31,
9506.32,9506.39,9506.40,9506.51,9506.59,9506.61,9506.62,9506.69,9506.70,9506.91,
9506.99,9507.10,9507.20,9507.30 and 9507.90), the entry "30%" shall be substituted;
(91) in Chapter 96, for the entry in column (4) occurring against each of the sub-
headings, the entry "30%" shall be substituted;
(92) in Chapter 97, for the entry in column (4) occurring against each of the sub-
headings (except sub-heading 9704.00), the entry "30%" shall be substituted;
(93) in Chapter 98, in sub-headings 9802.00,9804.10,9804.90,9805.10 and 9805.90,
for the entry in column (4) occurring against each of them, the entry "30%" shall be
substituted;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
93
THE THIRD SCHEDULE
[See section 136(7)]
In the Schedule to the notification, referred to in sub-section (1) of section 136, for the
entry "16. Mineral based", the following entry shall be substituted, namely:—
'16. Mineral based.
Explanation.—For the removal of doubts, it is hereby declared that for the purposes
of this notification, "mineral" does not include crude petroleum oils and the expression
"Mineral based" shall be construed accordingly'.
94
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
THE FOURTHSCHEDULE
[See section 4 37(7)1
Notification No.
and date
(1)
G.S.R. 299 (E), dated the
31st March, 2000 [28/
2000-Central Excise
(NT.), dated the 31st
March, 2000]
Amendment
(2)
In the said notification, for Explana-
tion II, the following Explanation
shall be substituted, namely,—
'Explanation II.—For the purposes
of this notification, "composite mill"
means a manufacturer who is engaged
in the processing of fabrics with the
aid of power along with the spinning
of yarn from fibres and weaving or
knitting or crocheting of fabrics within
the same factory and includes a multi-
locational composite mill, that is to
say, a public limited company which
is engaged in the processing of fab-
rics with the aid of power along with
the spinning of yarn from fibres and
weaving or knitting or crocheting of
fabrics in one or more factories owned
by the same public limited company.'.
Date of effect of
amendment
(3)
1st day of April, 2000.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
95
THE FIFTH SCHEDULE
[See section 138(0]
PART I
In the First Schedule to the Central Excise Tariff Act,—
(1) in Chapter 9, in sub-heading No. 0902.00, for the entry in column (4), the
entry "Re. 1 per kilogram" shall be substituted;
(2) in Chapter 17, after NOTE 3, the following NOTE shall be inserted, namely,—
'4. In relation to the products of heading No. 17.02, labelling or relabelling
of containers and repacking from bulk packs to retail packs or the adoption of
any other treatment to render the product marketable to the consumer, shall
amount to "manufacture".';
(3) in Chapter 24, in sub-heading Nos. 2402.00, 2403.3 land 2403.32, for the
entry in column (4) occurring against each of them, the entry "16%" shall be
substituted;
(4) in Chapter 30, in sub-heading No. 3004.10, for the entry in column (4), the
entry "16%" shall be substituted;
(5) in Chapter 40,—
(0 in sub-heading No. 4005.10, for the entry in column (3), the following
entry shall be substituted, namely:—
" - Plates, sheets or strip, whether or not combined with any textile
material, in relation to the manufacture of which no CENV AT credit of duty
paid on the inputs used has been availed " ;
(ii) in sub-heading Nos. 4011.10 and 4013.10, for the entry in column (4)
occurring against each of them, the entry "16%" shall be substituted;
(6) in Chapter 44, in sub-heading Nos. 4410.19 and 4410.90, for the entry in
column (4) occurring against each of them, the entry "16%" shall be substituted;
(7) in Chapter 48,—
(i) in SUB-HEADING NOTE 3, for clause (a), the following clause shall be
substituted, namely,—
"(a) follow the procedure under the Central Excise (Removal of
Goods at Concessional Rate of Duty for Manufacture of Excisable Goods)
Rules, 2001; and";
(ii) in sub-heading Nos. 4820.00, 4821.00 and 4823.20, for the entry
in column (4) occurring against each of them, the entry "16%" shall be
substituted;
(8) in Chapter 59, in sub-heading No. 5906.10, for the entry in column (4), the
entry "16%" shall be substituted;
(9) in Chapter 61,—
(i) after NOTE 2, the following NOTES shall be inserted, namely:—
'3. In relation to a product of this Chapter, "brand name" means a
brand name, whether registered or not, that is to say, a name or a mark,
such as a symbol, monogram, label, signature or invented word or any
writing which is used in relation to a product, for the purposes of indicat-
ing, or so as to indicate, a connection in the course of trade between the
96
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
product and some person using such name or mark with or without any
indication of the identity of that person.
4. In relation to a product of this Chapter, affixing a brand name on
the product, labelling or relabelling of its containers and repacking from
bulk packs to retail packs or the adoption of any other treatment to render
the product marketable to the consumer, shall amount to " manufacture".';
(ii) in sub-heading Nos. 6101.00 and 6102.00, for the entry in column (4)
occurring against each of them, the entry "16%" shall be substituted;
(10) in Chapter 66, in sub-heading Nos. 6601.00 and 6602.00, for the entry in
column (4) occurring against each of them, the entry "16%" shall be substituted;
(11) in Chapter 68, in sub-heading No. 6807.20, for the entry in column (4), the
entry "16%" shall be substituted;
(12) in Chapter 70, in sub-heading Nos. 7011.10 and 7012.10, for the entry in
column (4) occurring against each of them, the entry "16%" shall be substituted;
(13) in Chapter 73,—
(i) after NOTE 3, the following NOTE shall be inserted, namely:—
'4. In relation to the products of this Chapter, the process of galva-
nization shall amount to "manufacture".';
(ii) In sub-heading No. 7326.21, for the entry in column (4), the entry
"16%" shall be substituted;
(14) in Chapter 74, in sub-heading No. 7418.10, for the entry in column (4), the
entry "16%" shall be substituted;
(15) in Chapter 82, in sub-heading No. 8215.00, for the entry in column (4), the
entry "16%" shall be substituted;
(16) in Chapter 84, in sub-heading Nos. 8413.11,8413.12,8413.13,8413.14,8413.20,
8413.91,8414.10,841420,8414.91,848120,8481.92 and 8483.10. for the entiy in column
(4) occurring against each of them, the entry "16%" shall be substituted;
(17) in Chapter 85, in sub-heading No. 8524.32, for the entry in column (4), the
entry "16%" shall be substituted;
(18) in Chapter 87, in sub-heading No. 8712.00, for the entry in column (4), the
entry "16%" shall be substituted;
(19) in Chapter 90, in sub-heading Nos. 9018.00, 9019.00 and 9022.10, for
the entry in column (4) occurring against each of them, the entry "16%" shall be
substituted;
(20) in Chapter 94, in sub-heading Nos. 9405.10 and 9406.00, for the entry in
column (4) occurring against each of them, the entry "16%" shall be substituted;
(21) in Chapter 95, in sub-heading Nos. 9501.00, 9502.00 and 9503.00, for
the entry in column (4) occurring against each of them, the entry "16%" shall be
substituted.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
97
PART II
Heading N(
0)
).
Sub-heading No.
(2)
Description of goods
(3)
Rate of duty
(4)
In the First Schedule to the Central Excise Tariff Act, in Chapter 36, for heading No.
36.05 and the entries relating thereto, the following shall be substituted, namely:—
"36.05
MATCHES, OTHER
THAN PYROTECHNIC
ARTICLES OF HEADING
NO. 36.04
3605.10
- Bengal Lights
16%
3605.90
- Others
Rs. 1.30 for
every 1000
matches or
fraction thereof".
98
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
THE SIXTH SCHEDULE
[See section 138(//)]
Heading No
(1)
Sub-heading
No.
(2)
Description of Goods
(3)
Rate of special
duty of excise
(4)
In the Second Schedule to the Central Excise Tariff Act,—
(1) heading No. 25.02, sub-heading Nos. 2502.21,2502.30,2502.40,2502.50 and 2502.90
and the entries relating thereto shall be omitted;
(2) heading No. 33.04, sub-heading No. 3304.00 and the entries relating thereto shall be
omitted;
(3) heading No. 33.05, sub-heading No. 3305.99 and the entries relating thereto shall be
omitted;
(4) heading No. 33.07, sub-heading Nos. 3307.10,3307.20,3307.39 and3307.90 and the
entries relating thereto shall be omitted;
(5) heading No. 43.01, sub-heading No. 4301.00 and the entries relating thereto shall be
omitted;
(6) headingNo. 89.03, sub-heading No. 8903.00 and the entries relating thereto shall be
omitted;
(7) heading No. 89.07, sub-heading No. 8907.00 and the entries relating thereto shall be
omitted;
(8) heading No. 93.02, sub-heading No. 9302.00 and the entries relating thereto shall be
omitted;
(9) heading No. 93.03, sub-heading No. 9303.00 and the entries relating thereto shall be
omitted;
(10) heading No. 93.04, sub-heading No. 9304.00 and the entries relating thereto shall
be omitted;
(11) heading No. 93.05, sub-heading No. 9305.00 and the entries relating thereto shall
be omitted;
(12) headingNo. 93.06, sub-heading No. 9306.00 and the entries relating thereto shall
be omitted;
(13) heading No. 93.07, sub-heading No. 9307.00 and the entries relating thereto shall
be omitted;
(14) headingNo. 96.05, sub-heading No. 9605.10 and the entries relating thereto shall
be omitted.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
99
THE SEVENTH SCHEDULE
(See section 139)
In the First Schedule to the Additional Duties of Excise Act, in sub-heading Nos.
520720,520870,5209.10,5406.10,5407.10,5511.10,551210,5513.10,5514.10,580121,580131,
5802.21,5802.31,6002.10 and 6002.20, for the entry in column (4) occurring against each of
them, the entry "8%" shall be substituted.
100
THE GAZETTE OF INDIA EXTRAORDINARY
TPART II—
THE EIGHTH SCHEDULE
(See section 140)
Item No.
(1)
1.
1
Description of goods
(2)
Motor spirit,
commonly known as petrol
High speed diesel oil
Rate of duty
(3)
Rs. seven per litre
Re. one per litre
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
101
STATEMENT OF OBJECTS AND REASONS
The object of the Bill is to give effect to the financial proposals of the Central Government
for the financial year 2002-2003. The notes on clauses explain the various provisions contained
in the Bill.
YASHWANTSINHA.
NEW DELHI;
The 2&th February, 2002.
PRESIDENTS RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE
CONSTITUTION OF INDIA
[Copy of letter No. F. 2(ll)-B(D)/2002, dated the 28th February, 2002 from
Shri Yashwant Sinha, Minister of Finance, to the Secretary-General, Lok Sabha.]
The President, having been informed of the subject matter of the proposed Bill,
recommends under clause (1) of article 117, read with clause (1) of article 274, of the
Constitution of India, the introduction of the Finance Bill, 2002 to the Lok Sabha and also
recommends to the Lok Sabha the consideration of the Bill.
2.
The Bill will be introduced in the Lok Sabha immediately after the
presentation of the Budget on the 28th February, 2002.
102
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II-
Notes on clauses
Income-tax
Clause 2, read with the First Schedule to the Bill, seeks to specify the rates at which
income-tax is to be levied on income chargeable to tax for the assessment year 2002-2003.
Further, it lays down the rates at which tax is to be deducted at source during the financial
year 2002-2003 from income subject to such deduction under the Income-tax Act; and the
rates at which "advance tax" is to be paid, tax is to be deducted at source from or paid on
income chargeable under the head "Salaries" and tax is to be calculated and charged in
special cases for the financial year 2002-2003.
Rates of income-tax for the assessment year 2002-2003
Part I of the First Schedule to the Bill specifies the rates at which income is liable to tax
for the assessment year 2002-2003. These rates are the same as those specified in Part III of
the First Schedule to the Finance Act, 2001, for the purposes of deduction of tax at source
from "Salaries", computation of "advance tax" and charging of income-tax in special cases
during the financial year 2001-2002.
Rates for deduction of tax at source during the financial year 2002-2003 from income
other than "Salaries"
Part II of the First Schedule to the Bill specifies the rates at which income-tax is to be
deducted at source during the financial year 2002-2003 from incomes other than "Salaries".
These rates are broadly the same as those specified in Part II of the First Schedule to the
Finance Act, 2001, for the purposes of deduction of income-tax at source during the financial
year 2001 -2002. However, for foreign companies, the rate of deduction of income-tax shall be
forty per cent, as against the existing rate of forty-eight per cent Further, the rate oi*deduction
of tax at source from dividends in the case of domestic companies and other resident persons
shall be ten per cent Ttie amount of tax so deducted shall be increased by a surcharge for
purposes of the Union calculated at the rate of five per cent of such income-tax.
Rates for deduction of tax at source from "Salaries" computation of "advance tax" and
charging of income-tax in special cases during the financial year 2002-2003
Part III of the First Schedule to the Bill specifies the rates at which income-tax is to be
deducted at source from, or paid on, income under the head "Salaries" and also the rates at
which "advance tax" is to be paid and income-tax is to be calculated or charged in special
cases for the financial year 2002-2003.
Paragraph A of this Part specifies the rates of income-tax in the case of every individual
or Hindu undivided family or every association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause
(31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of Part
III applies. No change is proposed in the rate structure.
Paragraph B of this Part specifies the rate of income-tax in the case of every co-
operative society. In such cases, the rates of tax will continue to be the same as those
specified for assessment year 2002-2003.
Paragraph C of this Part specifies the rate of income-tax in the case of every firm. In
such cases, the rate of tax will continue to be the same as that specified for assessment year
2002-2003.
Paragraph D of this Part specifies the rate of income-tax in the case of every local
authority. In such cases, the rate of tax will continue to be the same as that specified for
assessment year 2002-2003.
SBC.2]
THE GAZETTE OF INDIA EXTRAORDINARY
103
Paragraph E of this Part specifies the rates of income-tax in the case of companies. The
rate of tax in the case of domestic companies will continue to be thirty-five per cent, as
specified for the assessment year 2002-2003. However, in the case of foreign companies, it
will be forty per cent, instead of forty-eight per cent.
In the case of every person being an individual, Hindu undivided family, association of
persons or body of individuals whose income exceeds sixty thousand rupees and where
income-tax is to be deducted at source or "advance tax" is payable in accordance with the
provisions of this Part such amount of income-tax after allowing rebate under Chapter VIII-
A, is proposed to be increased by a surcharge for purposes of the Union calculated at the
rate of five per cent, of such tax.
In the case of every artificial juridical person, co-operative society, firm, local authority
or company where income-tax is to be computed in accordance with the provisions of this
Part, such amount of income-tax is proposed to be increased by a surcharge for purposes of
the Union calculated at the rate of five per cent, of such tax.
Clause 3 seeks to amend section 2 of the Income-tax Act relating to definitions.
It is proposed to insert a new clause (vii) in section 28 of the Income-tax Act vide
clause 13 of the Bill so as to provide that any sum whether received or receivable in cash or
kind, under an agreement for not carrying out any activity in relation to any business; or not
to share any know-how, patent, copyright, trade-mark, licence, franchise or any other busi-
ness or commercial right of similar nature, or information or technique likely to assist in the
manufacture or processing of goods or provision for services, shall be chargeable to income-
tax under the head "Profits and gains of business or profession".
It is proposed to insert a new sub-clause (x/7) in clause (24) of section 2 so as to
provide that the said sum received or receivable shall be included within the definition of
income as defined in that clause.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Under the existing provisions contained in clause (31) of the said section, the expres-
sion "person" includes an individual, a Hindu undivided family, a company, a firm, an asso-
ciation of persons or a body of individuals, whether incorporated or not, a local authority
and every artificial juridical person not falling within anything aforesaid.
It is proposed to insert an Explanation in the said clause (57) of the said section so as
to provide that an association of persons or a body of individuals or a local authority or an
artificial juridical person shall be deemed to be a person, whether or not, such person or body
or authority or juridical person, was formed or established or incorporated with the object of
deriving income, profits or gains.
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the, assessment year 2002-2003 and subsequent years.
It is also proposed to amend clause (37A) of the said section to include therein the
reference of the new section 11SBBB proposed to be inserted vide clause 46 of the Bill. This
amendment is consequential in nature.
This amendment will take effect from 1st April, 2003, and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 4 seeks to amend section 10 of the Income-tax Act relating to incomes not
included in total income.
Sub-clause (a) seeks to omit clause (3) of the said section which provides for exemp-
tion with respect to receipts, which are of casual and non-recurring nature.
Sub-clause (b) seeks to amend sub-clause (0 of clause (4) so as to provide that the
Central Government shall not specify securities or bonds referred to in that sub-clause on or
after 1st June, 2002.
104
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Sub-clause (c) seeks to amend clause (4B) so as to provide that exemption on interest
income on savings certificates notified by the Central Government under that clause on or
after 1 st June, 2002 shall not be available.
Sub-clause (d) seeks to omit clause (SB) which provides for exemption in respect of tax
paid by the employer on behalf of an individual referred to in that clause.
Sub-clause (e) seeks to omit sub-clause (0 of clause (6) which provides for exemption
in respect of passage moneys, etc., received by an individual who is not a citizen of India.
Sub-clause (/) seeks to amend clause (6A) so as to provide that tax paid by the Govern-
ment or an Indian concern on behalf of a foreign company deriving income by way of royalty
or fees for technical services in pursuance of an agreement with the Government or Indian
concern shall be included in the total income of the foreign company in respect of agree-
ments entered into on or after 1 st June, 2002.
Sub-clause (g) seeks to amend clause (6B) so as to provide that tax paid by the Govern-
ment or an Indian concern on behalf of a non-resident or a foreign company in pursuance of
an agreement shall be included in the total income of the non-resident or the foreign com-
pany in respect of agreements entered into on or after 1 st June, 2002.
Sub-clauses (a) to (g) will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Under the existing provisions contained in clause (IOC), any amount received by an
employee of a public sector company or any other company or an authority established
under a Central, State or Provincial Act or a local authority or a co-operative society or a
University or an Indian Institute of Technology or any State Government or the Central
Government or a notified institute of management, at the time of voluntary retirement, or
termination of his service in accordance with any scheme or schemes of voluntary retirement,
or in the case of a public sector company, a scheme of voluntary separation, to the extent
such amount does not exceed five lakh rupees, is not included in computing the total income
of such employee.
Sub-clause (h) seeks to enlarge the scope of the exemption by extending it to an
employee of an institution, having its importance throughout India or any State or States, as
may be specified by the Central Government, by notification in the Official Gazette, for the
purposes of clause (10C).
This amendment will take effect retrospectively from 1st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Under the existing provisions contained in sub-clause (tv) of clause (2) of section 17 of
the Income-tax Act, any sum paid by the employer in respect of any obligation which, but for
such payment, would have been payable by the assessee is included in perquisite.
Sub-clause (/) seeks to insert a new clause (I0CC) to provide that in the case of an
employee, being an individual deriving income in the nature of a perquisite, not provided for
by way of monetary payment within the meaning of clause (2) of section 17, the tax on such
income actually paid by his employer, at the option of the employer, on behalf of siich
employee, notwithstanding anything contained in section 200 of the Companies Act, 1956,
shall be exempt from tax.
Sub-clause (/) seeks to omit clause (14A) which provides for exemption with respect to
exchange risk premium received by a public financial institution.
Sub-clause (k) seeks to amend sub-clauses (lib) and (iid) of clause (IS) so as to
provide that the Central Government shall not specify Capital Investment Bonds and bonds
referred to in those sub-clauses on or after 1st June, 2002.
Under the existing provisions contained in clause (20), any income of a local authority
chargeable under the head "Income from house property", "Capital gains" or "Income from
other sources" or from a trade or business carried on by it which accrues or arises from the
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
105
supply of a commodity or service (not being water or electricity) within its own jurisdictional
area or from the supply of water or electricity within or outside its own jurisdictional area, is
not included in computing its total income.
Sub-clause (/) seeks to amend the said clause so as to restrict the exemption to the
Panchayat and Municipality referred to in clause (d) of article 243 and clause (e) of article
243P of the Constitution, Municipal Committee and District Boards legally entitled to, or
entrusted by the Government with, the control or management of a Municipal or local fund
and to the Cantonment Boards as defined under section 3 of the Cantonments Act, 1924.
Sub-clause (m) seeks to omit clause (20A) which provides for exemption in respect of
any income of an authority constituted in India by or under any law enacted either for the
purpose of dealing with and satisfying the need for housing accommodation or for the
purpose of planning, development or improvement of cities, towns and villages, or for both.
Sub-clause (/?) seeks to amend clause (27) so as to provide that where the scientific
research association is approved by the Central Government and subsequently that Govern-
ment is satisfied that the scientific research association has not applied its income in accord-
ance with the provisions contained in clause (a) of the first proviso to the said clause or the
scientific research association has not invested or deposited its funds in accordance with
the provisions contained in clause (b) of the said proviso or the activities of the scientific
research association are not genuine or the activities of the scientific research association
are not being carried out in accordance with all or any of the conditions subject to which
such association was approved, it may, at any time after giving a reasonable opportunity of
showing cause against the proposed withdrawal to the concerned association, by order,
withdraw the approval and forward a copy of the order withdrawing the approval to such
association and to the Assessing Officer.
Sub-clause (o) seeks to amend clause (22B) so as to provide that where the news
agency has been specified, by notification, by the Central Government and subsequently
that Government is satisfied that such news agency has not applied or accumulated or
distributed its income in accordance with the provisions contained in the first proviso to that
clause, it may, at any time after giving a reasonable opportunity of showing cause, rescind
the notification and forward a copy of the order rescinding the notification to such agency
and to the Assessing Officer.
Sub-clause (p) seeks to omit clause (25) which provides for exemption in respect of
any income of an association or institution established in India which may be notified under
that clause, having as its object the control, supervision, regulation or encouragement in
India of the games of cricket, hockey, football, tennis or such other games or sports notified
in the Official Gazette.
Sub-clause (g) seeks to amend clause (23A) so as to provide that where the associa-
tion or institution established in India having its objects the control, supervision, regulation
or encouragement of the profession of law, medicine, accountancy, engineering or architec-
ture which has been approved by the Central Government and subsequently that Govern-
ment is satisfied that such association or institution has not applied or accumulated its
income in accordance with the provisions contained in clause (i) of the proviso to the said
clause or the activities of the association or institution are not being carried out in accord-
ance with all or any of the conditions subject to which such association or institution was
approved, it may, at any time after giving a reasonable opportunity of showing cause against
the proposed withdrawal to the concerned association or institution; by order, withdraw the
approval and forward a copy of the order withdrawing the approval to such association or
institution and to the Assessing Officer.
Sub-clause (r) seeks to amend clause (23B) so as to provide that where the institution
has been approved by the Khadi and Village Industries Commission and subsequently that
Commission is satisfied that the institution has not applied or accumulated its income in
accordance with the provisions contained in the first proviso to the said clause or the
activities of the institution ar, not be g carried out in accordance with all or any of the
106
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
conditions subject to which such institution was approved, it may, at any time after giving a
reasonable opportunity of showing cause against the proposed withdrawal to the concerned
institution, by order, withdraw the approval and forward a copy of the order withdrawing the
approval to such institution and to the Assessing Officer.
Sub-clauses (i) to (r) will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Under the existing provisions contained in clause (23C) of the said section, the income
of any fund or institution referred to in sub-clause (/v) or any trust or institution referred to
in sub-clause (v) or any university or other educational institution referred to in sub-clause
(v/) or any hospital or other medical institution referred to in sub-clause (via), is not exempt
under the said sub-clauses unless the income is applied or accumulated for application,
wholly and exclusively to the objects for which the fund or trust or institution or university
or educational institution or hospital or medical institution is established and in a case where
more than twenty-five per cent, of the income is accumulated on or after 1 st April, 2001, the
period of the accumulation of the amount exceeding twenty-five per cent, of its income shall
not exceed five years.
Sub-clause (sXO ^eks to omit the provision permitting accumulation up to twenty-five
per cent, of the income for an unlimited period and to provide that where any income is
accumulated on or after the 1st April, 2002, the period of such accumulation shall in no case
exceed five years.
This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Under the existing provisions contained in clause (23C) of section 10, any amount of
donation received by the fund or institution in terms of clause (d) of sub-section (2) of
section 80G which has been utilised for purposes other than providing relief to the victims of
earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of that section
and not transferred to the Prime Ministers' National Relief Fund on or before the 31 st day of
March, 2002 shall be deemed to be the income of the previous year and shall accordingly be
charged to tax.
Sub-clause (sX») seeks to amend clause (23C) so as to provide that the exemptions
under this clause shall not be available if such a fund or institution does not render accounts
of income and expenditure to the authority prescribed under clause (v) of sub-section (5C) of
section 80G in the manner and within the time prescribed in that clause.
It is also proposed to extend the time limit for utilising the funds in terms of sub-section
(5C) of section 80G and transferring the unutilised funds to the Prime Ministers' National
Relief Fund from 31 st March, 2002 to 31st March, 2003.
This amendment will take effect retrospectively from 3rd February, 2001.
Sub-clause (s)(iii) seeks to omit the tenth proviso to clause (23C) of the said section
which provides that an institution or trust having total receipts of more than one crore
rupees, or a university or other educational institution or hospital or other medical institution
having total receipts exceeding one crore rupees, shall publish its accounts in a local news-
paper and furnish a copy of such newspaper along with the application prescribed under the
first proviso to clause (23C).
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Sub-clause (sXiv) seeks to insert a proviso to clause (23C) of the said section so as to
provide that where the fund or trust or institution or any university or other educational
institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) does not apply its income during the year of
receipt and accumulates it, any credit or payment out of such accumulation to any trust or
institution registered under section 12AA or to any fund or trust or institution or any univer-
SEC, 2]
THE GAZETTE OF INDIA EXTRAORDINARY
107
sity or other educational institution or any hospital or other medical institution referred to in
sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as
application of income to the objects for which such fund or trust or institution or university
or educational institution or hospital or medical institution, as the case may be, is estab-
lished.
Sub-clause (sXv) seeks to amend clause (23C) so as to provide that where the fund or
institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) of
that clause is notified by the Central Government or any university or other educational
institution referred to in sub-clause (vi) or any hospital or other institution referred to in sub-
clause (via) is approved by the prescribed authority and subsequently that Government or
the prescribed authority is satisfied that such fund or institution or trust or university or
other educational institution or hospital or other medical institution has not, applied its
income in accordance with the provisions contained in clause (a) of the third proviso to that
clause; or invested or deposited its funds in accordance with the provisions contained in
clause (b) of the third proviso; or the activities of such fund or trust or institution or univer-
sity or other educational institution or hospital or other medical institution are not genuine or
are not being carried out in accordance with all or any of the conditions subject to which
such association was notified or approved, it may, at any time after giving a reasonable
opportunity of showing cause against the proposed rescinding or withdrawal to the con-
cerned fund or institution or trust or university or other educational institution or hospital or
other medical institution, rescind the notification or withdraw the approval and forward a
copy of the order rescinding the notification or withdrawing the approval to such fund or
institution or trust or university or other educational institution or hospital or other medical
institution and to the Assessing Officer.
Sub-clause (s) (iv) will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Sub-clause (t) seeks to omit reference to "Chapter XII-E" in clause (23D) of the said
section. The proposed amendment is of consequential nature.
Sub-clause (u) seeks to omit clause (23E) which provides for exemption with respect to
income of the Exchange Risk Administration Fund set up by a public financial institution.
Sub-clauses (t) and (u) will take effect from 1 st Apri 1,2003 and will, accordingly, apply
in relation to the assessment year 2003-2004 and subsequent years.
Sub-clause (v) seeks to insert a new clause (23 EB) so as to exempt any income of the
Credit Guarantee Fund Trust for Small Scale Industries being a trust created by the Govern-
ment of India and the Small Industries Development Bank of India for a period of five
previous years relevant to the assessment years beginning on 1st April, 2002 and ending on
31st March, 2007.
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and four subsequent years.
Sub-clause (w) seeks to omit the words "other than dividends referred to in section
115-O" in clause (23FA). The proposed amendment is of consequential nature.
Sub-clause (x) seeks to omit the words "other than dividends referred to in section 115-
O" in clause (23G). The proposed amendment is of consequential nature.
Sub-clause (y) seeks to omit clause (29) which provides for exemption in respect of any
income of an authority constituted under any law for the time being in force for the marketing
of commodities, derived from the letting of godowns or warehouses for storage, processing
or facilitating the marketing of commodities. It also seeks to omit clause (33) which provides
for exemption in respect of income by way of dividends and income received in respect of
units from the Unit Trust of India and income received in respect of units of a mutual fund.
Sub-clauses (w), (x) and (y) will take effect from 1 st April, 2003 and will, accordingly,
apply in relation to the assessment year 2003-2004 and subsequent years.
108
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Clause 5 seeks to amend section 10A of the Income-tax Act relating to special provi-
sion in respect of newly established undertakings in free trade zone, etc.
Under the existing provisions contained in sub-section (1) of the said section, a deduc-
tion of such profits and gains as are derived by an undertaking from the export of articles or
things or computer software for a period of ten consecutive assessment years beginning
with the assessment year relevant to the previous year in which the undertaking begins to
manufacture or produce such articles or things or computer software, as the case may be, is
allowed from the total income of the assessee. The profits derived from the export of articles
or things or computer software is the amount which bears to the profits of the business, the
same proportion as the export turnover in respect of such articles or things or computer
software bears to the total turnover of the business carried on by the assessee.
The proposed amendment seeks to insert a new proviso after the third proviso to sub-
section (1) of the said section so as to provide that for the assessment year 2003-2004, the
deduction shall be restricted to ninety per cent, of such profits and gains.
This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 only.
Clause 6 seeks to amend section 10B of the Income-tax Act relating to special provi-
sions in respect of newly established hundred per cent, export-oriented undertakings.
Under the existing provisions contained in sub-section (1) of the said section, a deduc-
tion of such profits and gains as are derived by an undertaking from the export of articles or
things or computer software for a period of ten consecutive assessment years beginning
with the assessment year relevant to the previous year in which the undertaking begins to
manufacture or produce such articles or things or computer software, as the case may be, is
allowed from the total income of the assessee. The profits derived from the export of articles
or things or computer software is the amount which bears to the profits of the business, the
same proportion as the export turnover in respect of such articles or things or computer
software bears to the total turnover of the business carried on by the assessee.
The proposed amendment seeks to insert a new proviso after the second proviso to
sub-section (1) of the said section so as to provide that for the assessment year 2003-2004,
the deduction shall be restricted to ninety per cent, of such profits and gains.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 only.
Clause 7 seeks to amend section 11 of the Income-tax Act relating to income from
property held for charitable or religious purposes.
The existing provisions contained in clauses (a) and (b) of sub-section (1) of the said
section, inter alia, provide that an amount up to twenty-five per cent of the income of a trust
can be accumulated for an indefinite period, and without any condition.
Sub-clause (a) (i) seeks to provide that twenty-five per cent, of the income from prop-
erty held under trust which is not applied to charitable or religious purposes, but is accumu-
lated or set apart for application for such purposes, can be accumulated, subject to the
conditions laid down in sub-section (2) of section 11.
Sub-clause (a) (ii) seeks to provide that twenty-five per cent of the income from prop-
erty held under trust which is not applied to charitable or religious purposes, but is finally set
apart for application for such purposes, can be accumulated, subject to tbe conditions laid
down in sub-section (2) of section 11.
Sub-clause (a) (iii) seeks to substitute the existing Explanation of sub-section (1) of
the said section. The proposed amendment is of consequential nature.
Sub-clause (b) seeks to substitute a new sub-section for sub-section (IB) of the said
section so as to provide that where any income in respect of which an option is exercised
under the Explanation to sub-section (1), is not applied to charitable or religious purposes
SEC 2]
THE GAZETTE OF INDIA EXTRAORDINARY
109
in India daring the previous year in which the income was received, or during the previous
year immediately following, then, such income shall be deemed to be the income of the
person in receipt thereof of the previous year immediately following the previous year in
which the income was received
Under the existing provisions contained in sub-section (2) of the said section, where
seventy-five per cent, of the income referred to in clause (a) or clause (b) of sub-section (1),
read with the Explanation to that sub-section is not applied, or is not deemed to have been
applied, to charitable or religious purposes in India during the previous year but is accumu-
lated or set apart, either in whole or in part, for application to such purposes in India, such
income so accumulated or set apart shall not be included in the total income of the previous
year of the person in receipt of the income, subject to certain conditions specified therein.
Sub-clause (c) (i) seeks to omit the words "seventy-five per cent, o f in sub-section (2)
so as to provide that if the whole of the income derived from property held under trust is not
applied, or is not deemed to have been applied, to charitable or religious purposes in India
during the previous year but is accumulated or set apart, income so accumulated or set apart
shall not be included in the total income of the previous year of the person in receipt of the
income provided the conditions specified in this sub-section are complied with.
Sub-clause (c) (ii) seeks to insert an Explanation below sub-section (2) of the said
section so as to provide that any amount credited or paid, out of income referred to in clause
(a) or clause (b) of sub-section (1), read with the Explanation to that sub-section, which is
not applied, but is accumulated or set apart, to any trust or institution registered under
section 12AA or to any fund or institution or trust or any university or other educational
institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 shall not be
treated as application of income for charitable or religious purposes, either during the period
of accumulation or thereafter.
Thus, payment to other trusts or institutions out of income from property held under
trust in the year of receipt will continue to be treated as application of income. However, any
such payment out of the accumulated income shall not be treated as application of income
and will be taxed accordingly.
Sub-clause (d) (i) seeks to insert a new clause in sub-section (3) of section 11 so as to
provide that if any income referred to in sub-section (2) of the said section is paid or credited
to any trust or institution registered under section 12AA or to any fund or institution or trust
or any university or other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause
(23C) of section 10, such payment or credit shall be deemed to be the income of the person in
receipt of the income from property held under trust of the previous year in which such
payment or credit is made.
Sub-clause (d) (ii) seeks to insert the words "paid or credited or," in sub-section (3) of
section 11 after the words "set apart or ceases to remain so invested or deposited or". Tlie
proposed amendment is of consequential nature.
Sub-clause (e) seeks to insert a proviso in sub-section (3A) so as to provide that the
Assessing Officer shall not allow application of income by way of payment or credit made for
the purposes referred to in clause (d) of sub-section (3) of the said section. The proposed
amendment takes away the discretion of the Assessing Officer in sub-section (3A) to allow
the trust to apply the accumulated income for payment or credit to other charitable or reli-
gious trusts and institutions.
These amendments will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 8 seeks to amend section 12 of the Income-tax Act relating to income of trusts
or institutions from contributions.
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THE GAZETTE OF INDIA EXTRAORDINARY
[PART I I -
Under the existing provisions contained in sub-section (3) of the said section, any
amount of donation received by the trust or institution in terms of clause (d) of sub-section
(2) of section 80G which has been utilised for purposes other than providing relief to victims
of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of that
section and is not transferred to the Prime Minister's National Relief Fund on or before the
31 st March, 2002, shall be deemed to be the income of the previous year and shall, accord-
ingly, be charged to tax.
Sub-clause (a) seeks to amend sub-section (3) to provide that the exemption under this
sub-section shall not be available if such a trust or institution does not render accounts of
income and expenditure to the prescribed authority under clause (v) of sub-section (5C) of
section 80G in the manner and within the time prescribed in that clause.
Sub-clause (b) also seeks to amend sub-section (3) to extend the time-limit for utilising
the funds in terms of sub-section (5C) of section 80G and transferring the unutilised funds to
the Prime Minister's National Relief Fund up to 31 st March, 2003 instead of 31 st March, 2002.
These amendments will take effect retrospectively from 3 rd February, 2001.
Clause 9 seeks to amend section 12A of the Income-tax Act relating to conditions as to
registration of trusts, etc.
Under the existing provisions contained in clause (c) of the said section, the exemption
under sections 11 and 12 in relation to income of any trust or institution does not apply to a
trust or institution, having total income exceeding one crore rupees (without giving effect to
the provisions of sections 11 and 12,), unless such trust or institution publishes its accounts
in a local newspaper before me due date for furnishing the return of income and also fur-
nishes a copy ofvsuch newspaper along with the return of income.
The proposed amendment seeks to omit the said clause (c) of section 12A dispensing
with the requirement of publishing accounts in a local newspaper and furnishing a copy of
such newspaper along with the return of income.
This amendment will take effect retrospectively from 1st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 10 seeks to amend section 14A of the Income-tax Act relating to expenditure
incurred in relation to income not includible in total income.
It is proposed to insert a proviso in the said section so as to clarify that the provisions
contained in that section shall not empower the Assessing Officer to reassess the cases
under section 147 or pass an order enhancing the assessment or reducing a refund already
made or otherwise increasing the liability of the assessee under section 154, for any assess-
ment year beginning on or before 1st April, 2001.
This amendment will take effect retrospectively from 1 lth May, 2001.
Clause 11 seeks to amend section 17 of the Income-tax Act relating to the definitions of
"salary", "perquisite" and "profits in lieu of salary".
The existing provisions contained in clause (2) of the said section define "perquisite"
to include the value of rent-free accommodation provided to the employee by his employer,
value of concession in the matter of rent of such accommodation, the value of any benefit or
amenity granted or provided free of cost by the employer in certain circumstances, any sum
paid by the employer in respect of any obligation payable by the employee, any sum payable
by the employer to effect an assurance oh life of the employee or to effect a contract for an
annuity and the value of any other fringe benefit or amenity, as may be prescribed.
It is proposed to insert a proviso in the said clause to provide that for the assessment
year beginning on 1st April, 2002, no perquisite shall be computed under the said clause in
the case of an employee whose income under the head "Salaries" for that year, exclusive of
the value of all perquisite not provided for by way of monetary payments does not exceed
one lakh rupees.
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111
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 only.
Clause 12 seeks to amend section 24 of the Income-tax Act relating to deductions from
income from house property.
The existing provisions contained in section 24 provide, inter alia, for a deduction up
to an amount of one lakh fifty thousand rupees payable as interest on capital borrowed on or
after 1 st April, 1999 for the acquisition or construction of the property, where such acquisi-
tion or construction is completed before 1st April, 2003, while computing the income charge-
" able under the head "Income from house property".
Sub-clause (a) proposes to amend the second proviso to the said section so as to
provide that where such property is acquired or constructed with capital borrowed on or
after 1 st April, 1999, the deduction for interest up to one lakh fifty thousand rupees will be
allowed if the acquisition or construction is completed within three years from the end of the
financial year in which capital was borrowed.
Sub-clause (b) proposes to insert a third proviso so as to provide that no deduction
shall be made under the second proviso unless die assessee furnishes a certificate from the
person to whom any interest is payable on the capital borrowed, specifying the amount of
interest payable on such capital borrowed by the assessee for the purpose of acquisition or
construction of the property, or conversion of the whole or any part of such capital borrowed
for such purpose which remains to be repaid, as a new loan.
It is further proposed to insert an Explanation to the third proviso which defines "new
loan".
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 13 seeks to amend section 28 of the Income-tax Act relating to profits and gains
of business or profession.
The existing provisions contained in the said section specify the categories of income
which are chargeable to income-tax under the head "Profits and gains of business or profes-
sion".
It is proposed to insert a new clause (vii) in the aforesaid section so as to provide that
any sum whether received or receivable, in cash or kind, under an agreement for not carrying
out any activity in relation to any business or not to share any know-how, patent, copyright,
trade-mark, licence, franchise or any other business or commercial right of similar nature or
information or technique likely to assist in the manufacture or processing of goods or provi-
sion for service, shall be chargeable to income-tax under the head "Profits and gains of
business or profession".
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 14 seeks to amend section 32 of the Income-tax Act relating to depreciation.
Under the existing provisions contained in the said section, deduction is allowed in
respect of depreciation on assets owned wholly or partly by the assessee and used for the
purposes of the business or profession. In the case of any block of assets, the deduction is
allowed at such percentage on the written down value thereof as is prescribed.
Item (A) of sub-clause (a) seeks to make a reference to new clause (iia) in the second
proviso to sub-section (1) and item (B) of sub-clause (a) seeks to amend Explanation 2
below the fifth proviso, to substitute the words "For the purposes of this sub-section" for
the words "For the purposes of this clause". These amendments are of consequential
nature.
Sub-clause (b) seeks to insert a new sub-clause (iia) in sub-section (1) of the said
section to provide that in the cose of any new machinery or plant (other than ships and
112
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
aircraft), which has been acquired and installed after the 31st day of March, 2002, by an
assessee engaged in the business of manufacture or production of any article or thing, a
further sum equal to fifteen per cent, of the actual cost of such machinery or plant shall be
allowed as deduction under clause (ii). Such further deduction of fifteen per cent, shall be
allowed to a new industrial undertaking during any previous year in which such undertaking
begins to manufacture or to produce any article or thing on or after the 1 st day of April, 2002
or to any industrial undertaking existing before the 1st day of April, 2002, during any previ-
ous year in which it achieves the substantial expansion by way of increase in installed
capacity by not less than twenty-five per cent.
However, no deduction shall be allowed in respect of any machinery or plant which,
before its installation by the assessee, was used either within or outside India by any other
person; or any machinery or plant installed in any office premises or any residential accom-
modation, including accommodation in the nature of a guest house; or any office appliances
or road transport vehicles; or any machinery or plant, the whole or part of the actual cost of
which is allowed as a deduction (whether by way of depreciation or otherwise) in computing
the income chargeable under the head "Profits and gains of business or profession" of any
one previous year. It is further proposed to provide that no deduction shall be allowed under
clause (A) or, as the case may be, clause (B), of the first proviso unless the assessee fur-
nishes the details of machinery or plant and increase in the installed capacity of production
in such form, as may be prescribed, along with the return of income, and the report of an
accountant, as defined in the Explanation below sub-section (2) of section 288 certifying
that the deduction has been correctly claimed in accordance with the provisions of this
clause.
It is also proposed to define the expressions "new industrial undertaking" and "in-
stalled capacity" for the purposes of the proposed clause (iia).
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 15 seeks to amend section 33 AC of the Income-tax Act relating to reserves for
shipping business.
Under the existing provisions contained in sub-section (1) of the said section, a Gov-
ernment company or a public company formed and registered in India with the main object of
carrying on the business of operation of ships is allowed a deduction of an amount not
exceeding hundred per cent, of the profits derived from the business of operation of ships,
subject to certain conditions including crediting of the amount to a reserve account. The first
proviso to the said sub-section provides that where the aggregate of the amounts carried to
such reserve account from time to time exceeds twice the amount of the paid-up share capital
(excluding the amounts capitalised from the reserves) of the assessee, no allowance shall be
made in respect of such excess..
It is proposed to substitute the aforesaid proviso to the said sub-section so as to
provide that where the aggregate of the amounts carried to such reserve account from time to
time exceeds twice the aggregate of the amounts of the paid-up share capital, the general
reserves and amount credited to the share premium account of the assessee, no allowance
under that sub-section shall be made in respect of such excess.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 16 seeks to amend section 35AC of the Income-tax Act relating to expenditure
on eligible projects or schemes.
Under the existing provisions contained in the said section, any sum paid, to a public
sector company or a local authority or to an association or institution approved by the
National Committee for carrying out any eligible project or scheme, is allowed as a deduction
during the previous year.
SFC 2]
II Ui GAZL; 1TE OF INDIA EXTRAORDINARY
113
It is proposed to insert a new sub-section (6) in the said section so as to provide that
where the approval granted to an association or institution referred to in sub-section (1) of
the aforesaid section is withdrawn under the provisions of sub-section (4) or the notification
in respect of eligible project or scheme is withdrawn in the case of a public sector company
or local authority or an association or institution under sub-section (5) or where a company
has claimed deduction under the proviso to sub-section (1) in respect of any expenditure
incurred directly on the eligible project or scheme and the approval for such project or
scheme is withdrawn by the National Committee under sub-section (5), the total amount of
the payment received by the public sector company or the local authority or the association
or the institution, as the case may be, in respect of which such company or authority or
association or institution has furnished a certificate referred to in clause (a) of sub-section
(2) or the deduction claimed by a company under the proviso to sub-section (1) shall be
deemed to be the income of such company or authority or association or institution, as the
case may be, for the previous year in which such approval or notification is withdrawn and
tax shall be charged on such income at the maximum marginal rate in force for that year.
This amendment will take effect from I st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 17 seeks to amend section 35CCB of the Income-tax Act relating to expenditure
by way of payment to associations and institutions for carrying out programmes of conser-
vation of natural resources.
Under the existing provisions contained in sub-section (1) of the said section, any sum
paid by an assessee to an association or institution, which is approved by the prescribed
authority and has as its object the undertaking of any programme of conservation of natural
resources or of afforestation, to be used for carrying out any programme of conservation of
natural resources or afforestation approved by the prescribed authority or to such fund for
afforestation as may be notified by the Central Government, is allowed as a deduction.
It is proposed to amend the said sub-section so as to provide that a deduction under
that sub-section shall be allowed if such sum is paid on or before the 31st March, 2002.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 18 seeks to amend section 35DDA of the Income-tax Act relating to amortisa-
tion of expenditure incurred under voluntary retirement scheme.
Under the existing provisions contained in sub-section (1) of the said section, where
an assessee incurs any expenditure in any previous year by way of payment of any sum to
an employee at the time of his voluntary retirement under any scheme of voluntary retire-
ment, one-fifth of the amount so paid shall be deducted in computing the profits and gains of
the business for that previous year and the balance shall be deducted in equal instalments
for each of the four immediately succeeding previous years.
It is proposed to substitute new sub-sections (2) to (6) for the existing sub-section (2)
so as to provide that where the undertaking of an Indian company entitled to deduction for
amortisation of voluntary retirement expenses is transferred before the expiry of the period
specified in sub-section (1) of the said section to another Indian company in a scheme of
amalgamation or demerger, the deduction shall continue to be available to the amalgamated
company or the resulting company as if the amalgamation or demerger had not taken place.
Similarly, in case of reorganisation of certain forms of business whereby a firm or a propri-
etary concern is succeeded by a company, the deduction shall continue to be available to the
successor company. No deduction shall be allowed to the amalgamating or demerged com-
pany, or to the firm or proprietary concern, in the year in which the undertaking is transferred.
These amendments will take effect retrospectively from 1st April, 2001 and will, accord-
ingly, apply in relation to the assessment year 2001-2002 and subsequent years.
Clause 19 seeks to amend section 36 of the Income-tax Act relating to other deduc-
tions.
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Tl IE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Under the existing provisions contained in sub-clause (a) of clause (viia) of sub-
section (1) of section 36, a scheduled bank (not being a bank incorporated outside India) or
a non-scheduled bank is entitled to a deduction of up to five per cent, of its gross total
income before allowing deduction under the said clause, in respect of provision for bad and
doubtful debts. Under the proviso to the said sub-clause such banks have an option to claim
deduction in respect of any provision for assets classified by the Reserve Bank of India as
doubtful assets or loss assets in accordance with the guidelines issued by it. The amount of
deduction is limited to five per cent, of the amount of the doubtful assets or loss assets
shown in the books of account of such" bank on the last day of the previous year. The
deduction is available for five consecutive assessment years commencing on or after 1 st
April, 2000 and ending before 1st April, 2005.
It is proposed to enhance the limit of deduction from five per cent, to seven and one-
half per cent, of the gross total income (before making deduction under the said clause). It is
further proposed to enhance the limit on the optional deduction from five per cent, to ten per
cent, of the doubtful or loss assets for the remaining two assessment years i.e. 2003-2004 and
2004-2005.
Under the existing provisions contained in sub-clause (c) of clause (viia) of sub-
section (1) of the said section, a public financial institution, a State financial corporation and
a State industrial investment corporation is entitled to a deduction, in computing the total
income, in respect of the provision for bad and doubtful debt made out of the profits. The
maximum amount to be allowed as a deduction is limited to five per cent, of its total income
computed before making any deduction in respect of the provision for bad and doubtful debt
under the provisions of this clause and Chapter VI-A.
It is proposed to insert a proviso to sub-clause (c) of clause (viia) so as to provide an
option to a public financial institution, a State financial corporation or a State industrial
investment corporation to claim a deduction in respect of any provision for assets classified
by the Reserve Bank of India as doubtful assets or loss assets in accordance with the
guidelines issued by it. The amount of deduction shall not exceed ten per cent, of the amount
of doubtful assets or the loss assets shown in the books of account of such institution or
corporation on the last day of the previous year and such deduction shall be available for
two consecutive assessment years commencing on or after the 1st day of April, 2003 and
ending before the 1 st day of April, 2005.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment years 2003-2004 and subsequent years.
Clause 20 seeks to amend section 40 of the Income-tax Act relating to amounts not
deductible.
Section 40 of the Income-tax Act specifies the amounts which shall not be deducted in
computing the income chargeable under the head "Profits and gains of business or profes-
sion".
Sub-clause (i) of clause 4 of the Bill proposes to insert a new clause (10CC) in section
10 of the Income-tax Act to provide that in the case of an employee, being an individual
deriving income in the nature of a perquisite, not provided for by way of monetary payment
within the meaning of clause (2) of section 17, the tax on such income actually paid by his
employer, at the option of the employer, on behalf of such employee, notwithstanding any-
thing contained in section 200 of the Companies Act, 1956, shall be exempt from income-tax.
It is proposed to insert a new sub-clause (v) in clause (a) of the said section, so as to
provide that the tax actually paid by an employer referred to in clause (10CC) of section 10
shall not be deducted in computing the income chargeable under the head "Profits and gains
of business or profession".
This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
115
The existing provisions contained in clause (b) of section 40 relate to certain expenses
which are not allowable deductions or which are allowed only subject to certain monetary
ceiling. Sub-clause (iv) of clause (b) of section 40 provides that in case of any firm, interest
paid by the firm to any of its partners will be allowable as a deduction to the extent the rate of
interest does not exceed eighteen per cent, per annum.
The proposed amendment seeks to reduce the maximum rate of the interest payable by
the firm to any of its partners from eighteen per cent, per annum to twelve per cent, per
annnum for the purposes of the said clause.
These amendments will take effect from 1st June, 2002.
Clause 21 seeks to substitute a new section for section 43 A of the Income-tax Act
relating to special provisions consequential to changes in rate of exchange of currency.
Under the existing provisions contained in section 43A, where an assessee has ac-
quired any capital asset from a country outside India for the purposes of his business or
profession on deferred payment terms or against a foreign loan, before the date of devalua-
tion of the rupee, the additional rupee liability incurred by him in meeting the instalments of
the cost of the asset or of the foreign loan, as the case may be, falling due for payment after
the date of devaluation, will be allowed to be added to the original actual cost of the asset for
the purpose of calculating the allowance of depreciation in computing the profits.
Similar increase in the original actual cost is allowed to be made in respect of capital
assets acquired by the assessee used in scientific research related to the business carried on
by him or patent rights or copyrights acquired from abroad or any capital asset acquired by
a company for the purpose of promoting family planning amongst its employees. Further, in
computing the capital gains arising to the assessee on the sale or transfer of a capital asset
acquired by him from abroad on deferred payment terms or against a foreign loan, the
additional rupee liability incurred by him in repaying the instalments of the cost or the
foreign loan, as the case may be, after the date of devaluation of the rupee, is added to the
original actual cost of the asset. The section also provides that where there is a decrease in
the rupee liability of the assessee in respect of assets acquired by him from abroad, due to a
change in the exchange value of the rupee, the original actual cost of the asset will be
correspondingly reduced.
It is proposed to substitute the said section so as to provide that where a capital asset
has been acquired from a country outside India, the addition or deduction from the actual
cost of the asset on account of change in the rate of exchange in any previous year shall be
allowed to be made only on actual payment by the assessee towards the cost of the asset or
repayment of the loan or interest, irrespective of the method of accounting adopted by the
assessee.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 22 seeks to amend section 44AE of the Income-tax Act relating to special
provision for computing profits and gains of business of plying, hiring or leasing goods
carriages.
Under the existing provisions contained in sub-section (1) of the said section, in the
case of an assessee, who owns not more than ten goods carriages and who is engaged in the
business of plying, hiring or leasing such goods carriages, the income of such business
chargeable to tax under the head "Profits and gains of business or profession" is deemed to
be the aggregate of the profits and gains from all the goods carriages owned by him in the
previous year. Sub-section (2) of the aforesaid section provides that in the case of heavy
goods vehicles, the profits and gains from each such goods carriage shall be deemed to be
an amount equal to two thousand rupees, and one thousand eight hundred rupees in the
case of vehicles other than heavy goods vehicles, for every month or part of a month during
which the vehicles are owned by the assessee.
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THE GAZETTE OF INDIA EXTRAORDINARY
[PARI 11^
Sub-clause (a) seeks to enhance the rate for computing the profits and gains in respect
of business of plying, hiring or leasing goods carriages being heavy goods vehicles from
two thousand rupees to three thousand five hundred rupees per vehicle for every month or
part of a month during which the vehicles are owned by the assessee.
Sub-clause (b) seeks to enhance the rate for computing the profits and gains in respect
of business of plying, hiring or leasing goods carriages other than heavy goods vehicles
from one thousand eight hundred rupees to three thousand one hundred and fifty rupees per
vehicle for every month or part of a month during which the vehicle is owned by the asses-
see.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 23 seeks to amend section 47 of the Income-tax Act relating to transactions not
regarded as transfer.
Under the existing provisions contained in clause (xv) of the said section, any transfer
in a scheme for lending of any securities under an agreement or arrangement, which the
assessee has entered into with the borrower of such securities and which is subject to the
guidelines issued by the Securities and Exchange Board of India shall not be regarded as
transfer for the purpose of charging capital gains tax.
It is proposed to amend the said clause so as to extend the benefit of exemption from
capital gains tax to any transfer in a scheme for lending of any securities under an agreement
or arrangement, which the assessee has entered into with the borrower of such securities and
which is subject to the guidelines issued by the Reserve Bank of India.
This amendment will take effect from 1st April, 2003, and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 24 seeks to insert a new section 50C in the Income-tax Act to provide for a
special provision for full value of consideration in certain cases.
The proposed sub-section (1) of the said section seeks to provide that where the
consideration received or accruing as a result of the transfer by an assessee of a capital
asset, being land or building or both, is less than the value adopted or assessed by any
authority of a State Government for the purpose of payment of stamp duty in respect of such
transfer, the value so adopted or assessed shall be deemed to be the full value of the consid-
eration received or accruing as a result of such transfer.
The proposed sub-section (2) of the said section seeks to provide that where the
• assessee claims before any Assessing Officer that the value adopted or assessed by the
authority under sub-section (1) exceeds the fair market value of the property as on the date
of transfer and the value so adopted or assessed by the authority under sub-section (1) has
not been disputed in any appeal or revision or no reference has been made before any other
authority, court or a High Court, the Assessing Officer may refer the valuation of the capital
asset to a Valuation Officer, and where any such reference is made, the provisions of sub-
sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections
(6) and (7) of section 23 A, sub-section (5) of section 24, section 34AA, section 35 and
section 37 of the Wealth-tax Act, 1957, shall, with the necessary modifications, apply in
relation to such reference as they apply in relation to a reference made by the Assessing
Officer under sub-section (1) of section 16A of that Act. The Valuation Officer shall be the
Valuation Officer as defined in clause (r) of section 2 of the Wealth-tax Act, 1957.
The proposed sub-section (3) provides that where the value ascertained under sub-
section (2) exceeds the value adopted or assessed by the authority referred to in sub-section
(1), the value so adopted or assessed by the authority shall be taken as the full value of the
consideration received or accruing as a result of the transfer.
This amendment will take effect from 1 st April, 2003, and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
117
Clause 25 seeks to amend section 54EC of the Income-tax Act which provides that
capital gain is not to be charged on investment in certain bonds.
Under the existing provisions contained in section 54EC, any capital gain arising from
the transfer of a long-term capital asset is exempt from tax if such capital gain is invested in
the long-term specified asset, being any bond redeemable after three years, issued by the
National Bank for Agriculture and Rural Development or the National Highways Authority of
India or by the Rural Electrification Corporation Limited.
It is proposed to amend the Explanation below sub-section (3) of the said section so
as to extend the benefit of exemption under the said section to the bonds, redeemable after
three years, issued on or after 1 st April, 2002, by the National Housing Bank or by the Small
Industries Development Bank of India.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 26 seeks to substitute a new section for section 70 of the Income-tax Act
relating to set off of loss from one source against income from another source under the same
head of income.
The existing provisions contained in the said section provide that where the net result
for any assessment year in respect of any source falling under any head of income is a loss,
the assessee shall be entitled to have the amount of such loss set off against his income from
any other source under the same head.
It is proposed to substitute the said section by a new section so as to provide that
where the net result for any assessment year in respect of any source falling under any head
of income other than "Capital gains" is a loss, the assessee shall be entitled to have the
amount of such loss set off against his income from any other source under the same head,
and where the net result in respect of any short-term capital asset is a loss, such loss shall be
allowed to be set off against income, if any, for that assessment year under the head "Capital
gains" in respect of any other capital asset, and where the net result in respect of any capital
asset other than a short-term capital asset is a loss, such loss shall be allowed to be set off
against the income, if any, for that assessment year in respect of any other capital asset not
being a short-term capital asset.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 27 seeks to amend section 72A of the Income-tax Act relating to carry forward
and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or
demerger, etc.
Under the existing provisions of the said section the carry forward of accumulated
losses and unabsorbed depreciation is allowed in cases of amalgamation of a company
owning an industrial undertaking or a ship, with another company. Clause (aa) of sub-
section (7) of the said section defines "industrial undertaking" to mean any undertaking
which is engaged in the manufacture or processing of goods or computer software or the
business of generation or distribution of electricity or any other form of power or mining or
the construction of ships, aircrafts and rail systems.
It is proposed to amend the said clause so as to include in the definition of "industrial
undertaking", any undertaking engaged in the business of providing telecommunication
services, whether basic or cellular, including radio paging, domestic satellite service, net-
work of trunking, broadband network and internet services.
This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 28 seeks to amend section 74 of the Income-tax Act relating to tosses under the
head "Capital gains".
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The existing provisions contained in sub-section (1) of the said section provide for
carry forward and set off of a loss under the head "Capital gains" for any assessment year
against income, if any, under the head "Capital gains" assessable for the following assess-
ment year. The loss remaining to be so set off can be carried forward to the following
assessment year, and so on.
It is proposed to amend sub-section (1) of section 74 so as to provide that where in
respect of any assessment year, the net result of the computation under the head "Capital
gains" is a loss to the assessee, in so far as such loss relates to a short-term asset, it shall be
carried forward and set off against the income, if any, under the head "Capital gains" assess-
able for the following assessment year in respect of any other capital asset and in so far as
such loss relates to a long-term capital asset, it shall be carried forward and set off against the
income, if any, under the head "Capital gains" assessable for the following assessment year
in respect of any other capital asset not being a short-term capital asset. The loss remaining
to be so set off shall be carried forward to the following assessment year, and so on.
It is further proposed to omit sub-section (3) of the said section, which is applicable in
respect of assessment year commencing on 1 st April, 1987 or earlier assessment years.
These amendments will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 29 seeks to amend section 80G of the Income-tax Act relating to deduction in
respect of donations to certain funds, charitable institutions, etc.
Under the existing provisions contained in section 80G, an assessee is allowed a de-
duction from his total income in respect of donations made by him. The amount of deduction
is hundred per cent, in respect of donations to certain funds.
Sub-clause (a) seeks to make the relevant provisions of section 80G applicable to any
fund, trust or institution referred to in clause (d) of sub-section (2) in relation to amounts
received for providing relief to the victims of earthquake in Gujarat.
Sub-clause (b) seeks to extend the time-limit for utilisation of donations received by
the trust or institution or fund for the victims of earthquake in Gujarat, from 31st March, 2002
to 31st March, 2003.
Sub-clause (c) seeks to extend the time-limit for transfer of the amount received by the
trust or institution or fund which is not utilised, to the Prime Minister's National Relief Fund,
to 31 st March, 2003 instead of 31 st March, 2002.
Sub-clause (d) seeks to extend the date of submission of accounts of such trust or
institution or fund to the prescribed authority, from 30th June, 2002 to 30th June, 2003.
These amendments will take effect retrospectively from 3rd February, 2001.
Clause 30 seeks to amend section 80GGA of the Income-tax Act relating to deduction
in respect of certain donations for scientific research or rural development.
Under the existing provisions contained in clauses (c) and (cc) of sub-section (2) of the
said section, any sum paid by the assessee in the previous year to an association or institu-
tion, which has as its object the undertaking of any programme of conservation of natural
resources or of afforestation, to be used for carrying out any programme of conservation of
natural resources or of afforestation approved by the prescribed authority or to such fund
for afforestation as may be notified by the Central Government, as the case may be, is allowed
as a deduction.
Sub-clause (i) seeks to amend the said clause (c) so as to make the provisions of
section 35CCB applicable in respect of any payments made on or before 31st March, 2002.
Sub-clause (ii) seeks to amend the said clause (cc) so as to make the provisions of
section 35CCB applicable in respect of payments made on or before 31st March, 2002.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
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Clause 31 seeks to amend section 80HHD of the Income-tax Act relating to deduction
in respect of earnings in convertible foreign exchange.
Under the existing provisions contained in clauses (c) and (d) of sub-section (1) of the
said section, an assessee, being an Indian company or a person (other than a company)
resident in India, engaged in the business of a hotel or of a tour operator, approved by the
prescribed authority, or of a travel agent, is allowed a deduction, in computing the total
income of the assessee for the assessment year 2003-2004, of a sum equal to the aggregate of
twenty per cent, of the profits derived by him from services provided to foreign tourists and
so much of the amount not exceeding twenty per cent, of the profits as is debited to the profit
and loss account of the previous year in respect of which the deduction is to be allowed and
credited to a reserve account to be utilised for the purposes of the business of the assessee
in the manner laid down in sub-section (4) of the aforesaid section. Similar deduction is
allowed in computing the total income of the assessee for the assessment year 2004-2005, at
the rate often per cent, of the profits and so much of the amount not exceeding ten per cent,
of the profits as is debited to the profit and loss account of the previous year in respect of
which the deduction is to be allowed and credited to a reserve account to be utilised for the
purposes of the business of the assessee in the manner laid down in that sub-section.
It is proposed to amend clauses (c) and (d) of sub-section (1) so as to increase the said
deductions from twenty per cent, to twenty-five per cent, and from ten per cent, to fifteen per
cent., respectively.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment years 2003-2004 and 2004-2005.
Clause 32 seeks to amend section 80-IA of the Income-tax Act relating to deductions
in respect of profits and gains from industrial undertakings or enterprises engaged in infra-
structure development, etc.
Under the existing provisions contained in sub-section (2) of the said section, an
assessee at his option can claim deduction for any ten consecutive assessment years out of
fifteen years beginning from the year in which the undertaking or the enterprise develops
and begins to operate any infrastructure facility or starts providing telecommunication
service or develops an industrial park or generates power or commences transmission or
distribution of power.
Sub-clause (a) seeks to amend sub-section (2) so as to provide an option to the
assessee who develops or develops and operates or maintains and operates a special eco-
nomic zone referred to in clause (iii) of sub-section (4) of the said section, to opt the year from
which the tax holiday for ten consecutive assessment years out of fifteen years, may be
claimed.
Under the existing provisions contained in sub-section (7) of the said section, assessees
being companies or co-operative societies, are not required to furnish along with their return
of income, separate audit report in the prescribed form and manner required under that sub-
section.
Sub-clause (b) seeks to amend sub-section (7) so as to make the requirement of fur-
nishing such separate audit report in the prescribed form and in the prescribed manner
mandatory for companies and co-operative societies also for the purpose of claiming deduc-
tion under sub-section (1) of section 80-IA.
These amendments will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 33 seeks to amend section 80-IB of the Income-tax Act relating to deduction in
respect of profits and gains from certain industrial undertakings other than infrastructure
development undertakings.
Sub-clause (a) seeks to insert new sub-sections (7A) and (7B) in the said section.
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The proposed sub-section (7A) seeks to provide that the profits from the business of
building, owning and operating a multiplex theatre shall be eligible for a deduction of fifty per
cent of such profits and gains for five assessment years beginning from the initial assess-
ment year in which the multiplex theatre, constructed any time during the period 1 st April,
2002 to 31 st March, 2005 starts operating. The deduction shall, however, not be applicable to
such businesses in the cities of Kolkata, Chcnnai, Delhi or Mumbai. It shall also not be
allowed where the business is formed by the splitting up, or the reconstruction, of a business
already in existence or by the transfer to a new business of any building or of any machinery
or plant previously used for any purpose. For the claim of deduction, the assessee has to file
an audit report in the prescribed form and in the manner specified therein.
The proposed sub-section (7B) seeks to provide that the profits from the business of
building, owning and operating a convention centre shall be eligible for a deduction of fifty
per cent of such profits and gains for five assessment years beginning from the initial assess-
ment year in which the convention centre constructed between 1st April, 2002 and 31st
March, 2005, starts commercial operation. The deduction shall not be allowed where .the
business is formed by the splitting up, or the reconstruction, of a business already in exist-
ence or by the transfer to a new business of any building or of any machinery or plant
previously used for any purpose. For the claim of deduction, the assessee has to file an audit
report in the prescribed form and the manner specified therein.
Sub-clause (b) (i) seeks to insert a new clause (aa) in sub-section (14) so as to define
the expression "convention centre" as a building of prescribed area comprising of conven-
tion halls to be used for the purpose of holding conferences and seminars, being of such size
and number and having such other facilities and amenities as may be prescribed.
Sub-clause (b) (ii) seeks to amend clause (c) of sub-section (14) of the said section so
as to provide that the initial assessment year in the case of a multiplex theatre, means the
assessment year relevant to the previous year in which a cinema hall being a part of the said
multiplex theatre, starts operating on a commercial basis and in the case of a convention
centre means the assessment year relevant to the previous year in which the convention
centre starts operating on a commercial basis.
Sub-clause (b) (iii) seeks to insert a new clause (da) after clause (d) so as to define the
expression "multiplex theatre" as a building of prescribed area, comprising of two or more
cinema theatres and commercial shops, of such size and number and having such other
facilities and amenities as may be prescribed.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 34 seeks to insert a new section 80M regarding deduction in respect of certain
inter-corporate dividends.
It is proposed to insert the said new section so as to provide a deduction for domestic
companies which receive dividends from other domestic companies and again distribute
them as dividend. The amount of deduction on dividends received by a domestic company
from another domestic company shall be to the extent of dividends distributed by the recipi-
ent company.
This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 35 seeks to amend section 88 of the Income-tax Act relating to rebate on life
insurance premia, contribution to provident fund, etc.
The existing provisions contained in sub-section (1) of the said section provide for
deduction, from the tax payable on the total income of a previous year of an assessee, being
an individual or a Hindu undivided family, of an amount equal to a fixed percentage of sums
paid or deposited in specified schemes out of his income chargeable to tax.
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121
Sub-clause (a) seeks to substitute sub-section (1) so as to provide that an assessee,
being an individual, or a Hindu undivided family, shall be entitled to a deduction, from the
amount of income-tax (as computed before allowing the deductions under this Chapter) on
his total income with wh ich he is chargeable for any assessment year, of an amount equal to,
in the case of an individual or a Hindu undivided family, whose income before giving effect
to deductions under Chapter VI-A, is one lakh fifty thousand rupees or less, twenty per cent,
of the aggregate of the sums referred to in sub-section (2). However, an individual shall be
entitled to a deduction of an amount equal to thirty per cent, of the aggregate of the sums
referred to in sub-section (2) if his income under the head "Salaries" does not exceed one
lakh rupees during the previous year before allowing the deduction under section 16 and is
not less than ninety per cent, of his gross total income, as defined in sub-section (5) of
section SOB. In the case of an individual or a Hindu undivided family, whose gross total
income before giving effect to deductions under Chapter VI-A, is more than one lakh fifty
thousand rupees but does not exceed five lakh rupees, the deduction from the amount of
income-tax shall be ten per cent, of the aggregate of the sums referred to in sub-section (2).
In the case of an individual or a Hindu undivided family, whose gross total income before
giving effect tQ deductions under Chapter VI-A, exceeds five lakh rupees, no tax rebate shall
be allowed.
A higher tax rebate of twenty-five per cent is allowed under the existing provisions for
an individual whose income derived from the exercise of his profession as an author, play-
wright, artist, musician, actor or sportsman (including an athlete). Under the proposed new
sub-section (1), the authors, playwrights, artists, musicians, actors and sportsmen (includ-
ing athletes) shall not be entitled to a higher rebate of twenty-five per cent. Such persons
shall be entitled to the rebate in accordance with the provisions of the proposed sub-section
(IX
Sub-clause (b) seeks to amend sub-section (2) so as to remove the condition that the
sums paid or deposited in the previous year by the assessee be out of his income chargeable
to tax for that previous year.
Sub-clause (c) seeks to insert a new sub-section (3) so as to provide that the sums
shall be paid or deposited at any time during the previous year in the specified schemes and
an assessee being an individual or a Hindu undivided family, shall be entitled to deduction
under sub-section (1) on so much of the aggregate of such sums paid or deposited as does
not exceed the total income of the assessee, chargeable to tax during the relevant previous
year.
Sub-clause (d) seeks to substitute sub-section (5) so as to provide that where the
aggregate of any sums specified in clause (i) to clause (xvii) of sub-section (2) exceeds an
amount of eighty thousand rupees, a deduction under sub-section (1) shall be allowed with
reference to so much of the aggregate as does not exceed an amount of eighty thousand
rupees. However, (a) where the aggregate of any sums specified in clauses (i) to (xv) of sub-
section (2) exceeds an amount of sixty thousand rupees, a deduction under sub-section (1)
in respect of such sums shall be allowed with reference to so much of the aggregate as does
not exceed an amount of sixty thousand rupees; and (b) where the aggregate of any sums
specified in clause (xv) of sub-section (2) exceeds an amount of twenty thousand rupees, a
deduction under sub-section (1) in respect of such sums shall be allowed with reference to
so much of the aggregate as does not exceed an amount of twenty thousand rupees.
Sub-clauses (e) and (f) seek to omit sub-sections (5 A) and (6) which is of consequen-
tial nature.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 36 seeks to substitute a new section for section 89 of the Income-tax Act
relating to relief when salary, etc., is paid in arrears or in advance.
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Under the existing provisions contained in section 89, an assessee is entitled to tax
relief, if on account of receipt of salary or a payment being a profit in lieu of salary, under
clause (3) of section 17, in arrears or in advance, his tax liability is increased in the year of
receipt.
It is proposed to substitute the said section so as to provide similar tax relief to the
assessees who receive arrears of family pension.
This amendment will take effect retrospectively from 1 st April, 1996 and will, accord-
ingly, apply in relation to the assessment year 1996-97 and subsequent years.
Clause 37 seeks to substitute section 92 of the Income-tax Act relating to computation
of income from an international transaction having regard to arm's length price.
The proposed sub-section (1) of the said section provides that any income arising
from an international transaction shall be computed having regard to the arm's length price.
It is proposed to insert an Explanation to sub-section (1) so as to clarify that the allowance
for any expense or interest arising from an international transaction shall also be determined
having regard to the arm's length price.
The proposed sub-section (2) is on the lines of sub-section (3) of the existing section
92.
The proposed sub-section (3) provides that the provisions of this section shall not
apply in a case where the computation of income or the determination of the allowance for
any expense or interest or the determination of any cost or expense allocated or apportioned
or contributed, has the effect of reducing the income chargeable to tax or increasing the loss,
as the case may be, computed on the basis of entries made in the books of account in respect
of the previous year in which the international transaction was entered into.
These amendments will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 38 seeks to amend section 92 A of the Income-tax Act relating to meaning of
associated enterprise.
The existing provisions contained in sub-section (2) of the said section provide as to
when two enterprises shall be deemed to be associated enterprises.
It is proposed to amend the said sub-section (2) so as to insert the words "For the
purposes of sub-section (1)". The proposed amendment is of clarificatory nature.
This amendment will take effect retrospectively from 1st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 39 seeks to amend section 92C of the Income-tax Act relating to computation of
arm's length price.
Under the existing provisions contained in sub-section (2) of the said section, the most
appropriate method shall be applied for determination of arm's length price in the manner
prescribed. The proviso to sub-section (2) provides that if the application of the most
appropriate method leads to determination of more than one price, the arithmetical mean of
such prices shall be taken to be the arm's length price in relation to the international transac-
tion.
It is proposed to substitute the aforesaid proviso to sub-section (2) so as to provide
that where the most appropriate method results in more than one price, the arithmetical mean
of such prices or, at the option of the assesse, a price which differs from the arithmetical mean
by an amount not exceeding five per cent of such mean may be taken to be the arm's length
price in relation to the international transaction.
Under the existing provisions contained in sub-section (4) of the said section, where
an arm's length price is determined by the Assessing Officer under sub-section (3), the
Assessing Officer may compute the total income of the assessee having regard to the arm's
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123
length price so determined. The second proviso to sub-section (4) provides that where the
total income of an enterprise is computed by the Assessing Officer on determination of the
arm's length price paid to another associated enterprise from which tax has been deducted
under the provisions of Chapter XV1I-B, the income of the associated enterprise shall not be
recomputed by reason of such determination of arm's length price in the case of the first-
mentioned enterprise.
It is proposed to amend the second proviso so as to clarify that the provisions con-
tained therein apply not only in a case where tax has been deducted under Chapter XVU-B,
but also in cases where such tax was deductible, even if not actually deducted.
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 40 seeks to amend section 92F of the Income-tax Act relating to definitions of
certain terms relevant to computation of arm's length price, etc.
Clause (iii) of the said section defines the expression "enterprise", inter alia, to mean
a person (including a permanent establishment of such person) who is, or has been or is
proposed to be, engaged in any of the activities specified in the said clause.
Sub-clause (a) seeks to amend the said clause (iii) so as to clarify that the activities
mentioned in the said clause include the carrying out of any work in pursuance of a contract.
Sub-clause (b) seeks to insert a new clause after clause (iii) so as to define the expres-
sion "permanent establishment" to include a fixed place of business through which the
business of an enterprise is wholly or partly carried on.
The existing provisions contained in clause (iv) of the said section defines "specified
date" to mean the 31 st October of the relevant assessment year in the case of a company and
the 31st July of the relevant assessment year in any other case.
Sub-clause (c) seeks to substitute clause (iv) so as to define "specified date" to
provide that it shall have the same meaning as assigned to "due date" in Explanation 2
below sub-section (1) of section 139.
These amendments will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 41 seeks to amend section 113 of the Income-tax Act relating to tax in the case
of block assessment of search cases.
Under the existing provision of the said section, the total undisclosed income of the
block period, determined under section 158BC, shall be chargeable to tax at the rate of sixty
per cent.
It is proposed to insert a proviso in the said section to provide that the tax chargeable
under that section shall be increased by a surcharge, if any, levied by any Central Act and
applicable in the assessment year relevant to the previous year in which the search was
initiated under section 132 or requisition was made under section 132 A.
This amendment will take effect from 1 st June, 2002.
Clause 42 seeks to amend section 115 A of the Income-tax Act relating to tax on divi-
dends, royalty and fees for technical services in the case of foreign companies.
It is proposed to omit the references to "other than dividends referred to in section
115-0" in the said section. The proposed amendment is of consequential nature.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 43 seeks to amend section 115AC of the Income-tax Act relating to tax on
income from bonds or Global Depository Receipts purchased in foreign currency or capital
gains arising from their transfer.
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Sub-clause (a) seeks to omit the references to "other than dividends referred to in
section 115-0" in section 115AC. The proposed amendment is of consequential nature.
Under the existing provisions contained in sub-clause (iii) of clause (b) of sub-section
(1) of the said section, in the case of an assessee who is a non-resident, income by way of
dividend and long-term capital gains arising from Global Depository Receipts re-issued in
accordance with such scheme as the Central Government may specify, by notification in the
Official Gazette, against the existing shares of an Indian company purchased by him in
foreign currency through an approved intermediary is taxed at the rate often per cent.
Sub-olause (bXO seeks to amend the said sub-clause (iii) so as to extend the concessional
tax rate on income by way of dividend and long-term capital gains arising from Global
Depository Receipts issued or re-issued in accordance with a scheme as the Central
Government may specify, by notification in the Official Gazette, against the existing shares of
an Indian company purchased by the assessee in foreign currency through an approved
intermediary.
Under the existing provisions contained in sub-clause (iv) of clause (b) of sub-section
(1) of the aforesaid section, in the case of an assessee who is a non-resident, income by way
of dividend and long-term capital gains arising from Global Depository Receipts issued in
accordance with such scheme as the Central Government may specify, by notification in the
Official Gazette, and purchased by him in foreign currency through an approved intermediary,
against the shares of an Indian company arising out of disinvestment by such company in its
subsidiary company, and the shares of both such Indian companies are listed in a recognised
stock exchange in India, is taxed at the rate often per cent.
Sub-clause OX") s e e' c s t o o m ' t m e ^'^ sub-clause (iv).
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 44 seeks to amend section 115ACA of the Income-tax Act relating to tax on
income from Global Depository Receipts purchased in foreign currency or capital gains
arising from their transfer.
It is proposed to omit the references to "other than dividends referred to in section
115-0" in section 115 AC A. The proposed amendment is of consequential nature.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 45 seeks to amend section 115 AD of the Income-tax Act relating to tax on
income of Foreign Institutional Investors from securities or capital gains arising from their
transfer.
It Is proposed to omit the reference to "other than income by way of dividends referred
to in section 115-O" in clause (a) of sub-section (1) of section 115AD. The proposed
amendment is of consequential nature.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 46 seeks to insert a new section 115BBB in the Income-tax Act relating to tax on
income from units of an open-ended equity oriented fund of the Unit Trust of India and
Mutual Funds.
The proposed amendment seeks to provide that income from units of an open-ended
equity oriented fund of the Unit Trust of India or of a Mutual Fund, shall be charged to
income-tax at a flat rate often per cent.
The proposed amendment also seeks to provide that the provisions of the section
shall not be applicable in relation to any such income arising after the 31st day of March,
2003.
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It is also proposed to define the expressions "Mutual Fund", "open-ended equity
oriented fund" and "Unit Trust of India" for the purposes of the proposed section.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 47 seeks to amend section 115C of the Income-tax Act relating to definitions in
Chapter XII-A.
It is proposed to omit the reference to "other than dividends referred to in section
115-O" occurring in the definition of the expression "investment income" in clause (c).
The proposed amendment is of consequential nature.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 48 seeks to amend section 115 JA of the Income-tax Act relating to charging of
minimum tax on deemed income in case of certain companies.
This proposed amendment seeks to substitute clause (iii) of Explanation to sub-
section (2) of the said section with a view to clarifying that where the value of either the
amount of loss brought forward or unabsorbed depreciation is 'nil', no amount on account
of such loss brought forward or unabsorbed depreciation would be reduced from the book
profit.
This amendment will take effect retrospectively from 1st April, 1997 and will, accord-
ingly, apply in relation to the assessment year 1997-1998 and subsequent years.
Clause 49 seeks to amend section 115JB of the Income-tax Act relating to special
provision for payment of tax by certain companies.
The existing provisions of the said section provide for levy of a minimum tax on
domestic companies of an amount equal to seven and one-half percent, of the book profit, if
the tax payable on the total income chargeable to tax as per the provisions of the Income-tax
Act, 1961, is less than seven and one-half per cent of the book profit.
Sub-clause (a) seeks to provide that where the tax payable on the total income charge-
able to tax is less than seven and one-half per cent, of book profit, such book profit shall be
deemed to be the total income of the assessee and the tax payable by the assessee on such
total income shall be the amount of income-tax at the rate of seven and one-half per cent.
This amendment will take effect retrospectively from 1st April, 2001 and will, accord-
ingly, apply in relation to the assessment years 2001-2002 and subsequent years.
Sub-clause (b) (i) seeks to amend clause (b) of Explanation to sub-section (2) so as
not to increase the book profit when the amounts are transferred to a reserve specified under
section 33AC.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Sub-clause b(ii) seeks to substitute the existing clause (i) in the Explanation below the
second proviso to sub-section (2), so as to provide that the amount withdrawn from any
reserve created before the 1st day of April, 1997, otherwise than by way of a debit to the
profit and loss account, shall not be reduced from the book profit. Further, the amendments
seek to provide that the amounts withdrawn from any reserves or provisions created on or
after 1st April, 1997, which are credited to the profit and loss account shall not be reduced
from the book profit unless the book profits were increased by the amount transferred to
such reserves or provisions in the year of creation of such reserves (out of which the said
amount was withdrawn).
Sub-clause (b) (iii) seeks to amend item (iii) of Explanation, so as to clarify that where
the value of the amount either loss brought forward or unabsorbed depreciation is '/!//', no
amount on account of such loss brought forward or unabsorbed depreciation would be
reduced from the book profit.
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These amendments will take effect retrospectively from 1 st April, 2001 and will, accord-
ingly, apply in relation to the assessment years 2001-2002 and subsequent years.
Clause 50 seeks to amend section 115-0 relating to tax on distributed profits of domes-
tic companies.
Under the existing provisions contained in the said section, a domestic company is
liable to pay tax on distributed profits. The tax so paid by the company is treated as the final
payment of tax in respect of the amount declared, distributed or paid by way of dividend.
It is proposed to amend section 115-0 so as to make the provisions of this section
applicable only in respect of the profits distributed by domestic companies on or after the 1 st
day of June, 1997 but on or before the 31st day of March, 2002.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 51 seeks to amend section 115R relating to tax on the distributed income to
unit-holders.
Under the existing provisions contained in the said section, the Unit Trust of India or
a Mutual Fund is liable to pay additional income-tax at the rate of ten per cent, on income
distributed to its unit holders.
Sub-clause (a) seeks to amend sub-section (1) of the said section so as to make it
applicable in respect of the income distributed by the Unit Trust of India to its unit holders on
or before the 31 st day of March, 2002.
Sub-clause (b) seeks to amend sub-section (2) of the above said section, so as to make
it applicable only in respect of the income distributed by a Mutual Fund to its unit holders on
or before the 31st day of March, 2002.
These amendments will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 52 seeks to amend section 119 of the Income-tax Act relating to instructions to
subordinate authorities.
Under the existing provisions contained in clause (a) of sub-section (2) of the said
section, the Board may, if it considers it necessary or expedient so to do, for the purpose of
proper and efficient management of the work of assessment and collection of revenue, issue,
from time to time, whether by way of relaxation of any of the provisions of the sections
specified therein or otherwise, general or special orders in respect of any class of incomes or
class of cases, setting forth directions or instructions not being prejudicial to the assesses
and for this purpose issue guidelines, principles or procedures to be followed by other
income-tax authorities in the work relating to assessment or collection of revenue or the
initiation of proceedings for the imposition of penalties.
It is proposed to amend the said clause so as to provide that such general or special
orders may be issued by the Board by way of relaxation of the provisions of section 158BFA
also.
This amendment will take effect from 1 st June, 2002.
Clause 53 seeks to amend section 132 of the Income-tax Act relating to search and
seizure.
Under the existing provisions contained in sub-section (1) of the said section, the
authorised officer is empowered, inter alia, to enter and search any building, place, vessel,
vehicle or aircraft and seize any books of account or other documents found as a result of
search.
It is proposed to insert a new clause (iib) in the said sub-section to provide that where
any books of account or other documents available at the place of search are maintained in
the form of electronic records, the person who is found to be in possession or control of such
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127
books of account or other documents shall be required to afford the necessary facility to the
authorised officer to inspect all such books of account or other documents.
Under the existing provisions contained in sub-section (5), where any money, bullion,
jewellery or other valuable article or thing is seized as a result of search initiated or requisi-
tion made before 1 st July, 1995, the Assessing Officer is required to pass an order within one
hundred and twenty days of such seizure, estimating the undisclosed income in a summary
manner, calculating the amount of tax and determining the amount of interest payable and the
amount of penalty which would be payable thereon by the assessee.
It is proposed to omit the said sub-section (5) which was applicable in respect of
searches initiated or requisitions made on or before 1st July, 1995. It is also proposed to omit
sub-sections (6), (7), (11), (11 A) and (12) which relate to the estimate of undisclosed income
under sub-section (5) proposed to be omitted by this clause.
Under the existing provisions contained in sub-section (8), the books of account or
other documents seized shall not be retained by the authorised officer for a period exceeding
one hundred and eighty days from the date of the seizure unless the reasons for retaining the
same are recorded by him in writing and the approval of the Chief Commissioner, Commis-
sioner, Director General or Director for such retention is obtained.
It is proposed to amend the said sub-section to provide that the books of account or
other documents seized shall not be retained for a period exceeding thirty days from the date
of the order of assessment under clause (c) of section 158BC, unless the reasons for retain-
ing the same are recorded in writing and the approval of the specified authorities is obtained.
Under the existing provisions contained in sub-section (8A), an order passed under
sub-section (3) restraining the owner or the person who is in immediate possession or
control of any books of account, documents or assets from dealing with them in any manner
except with the previous permission of the authorized officer, may remain in force for a period
of sixty days from the date of such order. Such period of sixty days can be extended, for
reasons to be recorded in writing and with the approval of the authorities specified in the
section, for any period upto the expiry of thirty days after the completion of all relevant
proceedings under the Income-tax Act.
It is proposed to amend the said sub-section so as to provide that an order passed
under sub-section (3) shall not be in force for a period exceeding sixty days from the date of
such order and the said period cannot be extended for any reasons whatsoever.
Under the existing provisions contained in sub-section (9A), where the authorised
officer has no jurisdiction over the person in whose case the search was conducted, the
books of account or other documents or assets seized shall be handed over by him to the
Income-tax Officer having jurisdiction over such person within a period of fifteen days of the
seizure.
It is proposed to substitute the said sub-section so as to extend the said time limit to
sixty days from the date on which the last of the authorisations for search was executed.
The existing provisions ofExplanation 1 occurring below sub-section (14) of the said
section relate to the provisions of sub-section (5), which is proposed to be omitted.
It is, therefore, proposed to substitute the said Explanation 1 so as to clarify that for
the purposes of the proposed sub-section (9 A), "execution of an authorisation for search"
shall have the same meaning as assigned to it in Explanation 2 to section 158BE.
These amendments will take effect from 1st June, 2002, and will, accordingly, apply in
respect of a search initiated on or after that date.
Clause 54 seeks to substitute a new section 132B of the Income-tax Act relating to
application of seized or requisitioned assets.
The existing provisions contained in the said section provide for the manner in which
assets seized during search and retained under sub-section (5) of section 132 shall be dealt
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with in the discharge of any existing liability as well as the amount of the liability arising on
assessments or re-assessments made as a result of such search.
It is proposed to substitute clause (i) of sub-section (1) of the said section to harmo-
nise the provisions contained therein with the provisions for assessment in search cases laid
down under Chapter XIV-B.
It is further proposed to substitute clause (i) to include therein a provision for release
of assets seized during search if the nature and source of acquisition of such assets is
explained to the satisfaction of the Assessing Officer, after recovery therefrom of any exist-
ing liability. However, such assets or any portion thereof shall be released within a period of
one hundred and twenty days from the date on which the last of the authorizations for search
or for requisition was executed.
The
proposed
clauses
(ii)
and
(iii)
of
sub-section
(1)
and
sub-sections (2) and (3) are on the lines of clauses (ii) and (iii) of sub-section (1) and sub-
sections (2) and (3) of the existing section 132B.
Under the existing provisions contained in sub-section (4), the Central Government is
required to pay simple interest at the rate of fifteen per cent, per annum on the amount by
which the aggregate of the amount of money retained under section 132 and of the proceeds,
if any, of the assets sold towards the discharge of the existing liability, which exceeds the
aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section
(1) of that section. The interest is payable for the period commencing from six months after
the date of the order under sub-section (5) of section 132 and ending with the date of the last
assessment or reassessment.
It is proposed to substitute sub-section (4) so as to provide for the new procedure for
assessment in search cases laid down in Chapter XIV-B, and to reduce the rate at which
interest is payable by the Central Government from fifteen per cent to eight per cent per
annum.
It is further proposed to insert an Explanation to clarify the meaning of "block period"
and "execution of an authorisation for search or requisition".
These amendments will take effect from 1 st June, 2002 and will, accordingly, apply in
respect of a search initiated on or after that date.
Clause 55 seeks to amend section 133 A of the Income-tax Act relating to power of
survey.
Under the existing provisions contained in sub-section (3) of the said section, an
income-tax authority, acting under the section may, if he so deems necessary, place marks of
identification on the books of account or other documents inspected by him, make copies or
extracts therefrom, make an inventory of any cash, stock or other valuable article or thing
checked or verified by him and record the statement of any person which may be useful for,
or relevant to, any proceedings under the Income-tax Act.
It is proposed to amend sub-section (3) so as to provide that an income-tax authority
(other than an Income-tax Inspector) acting under the said section may impound and retain
in his custody books of account or other documents inspected by him after recording his
reasons for so doing. It is further proposed to provide that such books of account or other
documents shall not be retained for more than fifteen days without obtaining the approval of
the Chief Commissioner of Income-tax or Director-General or Commissioner or Director
therefor.
Under the existing provision contained in sub-section (4) of the said section, an in-
come-tax authority acting under this section shall, on no account, remove or cause to be
removed from the place wherein he has entered, any books of account or other documents or
any cash, stock or other valuable article or thing.
It is proposed to omit the words "any books of account or other documents or" in sub-
section (4) to enable the income-tax authority acting under this section to remove or cause to
be removed any books of account or other documents.
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These amendments will take effect from 1 st June, 2002.
riaute 56 seeks to amend section 139 of the Income-tax Act relating to return of
income.
Under the existing provisions contained in sub-section (1) of the said section, every
company whether it has income or loss and every person other than a company, if the total
income in respect of which he is assessable under this Act during the previous year ex-
ceeded the maximum amount not chargeable to income-tax, is required to furnish a return of
such income on or before the due date in the prescribed form and manner.
Sub-clause (a) seeks to insert a new sub-section (1 A) after sub-section (1) of the said
section so as to provide that any person being an individual, who is in receipt of income
chargeable under the head "Salaries", may, at his option, furnish the return of his income for
any previous year to his employer and such employer shall furnish returns received by him
on or before the due date in accordance with such scheme as may be specified by the Board
in this behalf by notification in the Official Gazette, and subject to such conditions as may be
specified therein, and in such case, such return shall be deemed to be a return furnished
under sub-section (1) of section 139. It is also proposed to provide that such return of
income may be furnished by the employer in such form (including on a floppy, diskette,
magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may
be specified in such scheme.
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Sub-clause (b) seeks to insert a new sub-section (4C) in the said section so as to
provide that every scientific research association referred to in clause (21), news agency
referred to in clause (22B), association or institution referred to in clause (23A), institution
referred to in clause (23B), fund or institution referred to in sub-clause (iv) or trust or institu-
tion referred to in sub-clause (v) or any university or other educational institution referred to
in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of
clause (23C), trade union referred to in sub-clause (a) or association referred to in sub-clause
(b) of clause (24) of section 10, shall, if the total income in respect of which such scientific
research association, news agency, association or institution, fund and trade union, is as-
sessable without giving effect to the provisions of section 10, exceeds the maximum amount
which is not chargeable to income-tax, furnish a return of such income of the previous year
in the prescribed form and verified in the prescribed manner and setting forth such other
particulars as may be prescribed and all the provisions of this Act shall, so far as may be,
apply as if it were a return required to be furnished under sub-section (1) of section 139.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Sub-clause (c) seeks to insert a proviso in sub-clause (i) of clause (c) of the Explana-
tion to sub-section (9) of the said section so as to provide that where the return is not
accompanied by proof of the tax, if any, claimed to have been deducted at source, the return
of income shall not be regarded as defective if a certificate for tax deducted was not furnished
under section 203 to the person furnishing his return of income and such person produces
such certificate within a period of two years specified under sub-section (14) of section 155.
This amendment will take effect from 1 st June, 2002.
Clause 57 seeks to amend section 143 of the Income-tax Act relating to assessment.
Under the existing provisions contained in sub-section (2) of the said section, where a
return has been made under section 139 or in response to a notice under sub-section (1) of
section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure
that the assessee has not understated the income or has not computed excessive loss or has
not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date
specified in the notice either to attend his office or to produce, or cause to be produced there,
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any evidence on which the assessee may rely in support of the return. Such notice shall not
be served on the assessee after the expiry of twelve months from the end of the month in
which the return is furnished.
Sub-clause (a) seeks to substitute the said sub-section so as to provide that where a
return has been made under section 139, or in response to a notice under sub-section (1) of
section 142, the Assessing Officer shall, where he has reason to believe that any claim of
loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on
the assessee a notice specifying particulars of such claim of loss, exemption, deduction,
allowance or relief and requiring him, on a date to be specified therein to produce, or cause to
be produced, any evidence or particulars specified therein or on which the assessee may rely,
in support of such claim and also seeks to provide that if he considers it necessary or
expedient to ensure that the assessee has not understated the income or has not computed
excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice
requiring him, on a date to be specified therein, either to attend his office or to produce, or
cause to be produced there, any evidence on which the assessee may rely in support of the
return. It is further proposed to provide that no notice under this sub-section shall be served
on the assessee after the expiry of twelve months from the end of the month in which the
return is furnished.
Under the existing provisions contained in sub-section (3) of the said section, the
Assessing Officer shall, on the day specified in the notice issued under sub-section (2) of
that section, or as soon afterwards as may be, after hearing such evidence as the assessee
may produce and such other evidence as the Assessing Officer may require on specified
points and after taking into account all relevant material which he has gathered, by an order,
in writing, make an assessment of the total income or loss of the assessee, and determine the
sum payable by him or refund of any amount due to him on the basis of such assessment.
Sub-clause (b) seeks to substitute the said sub-section so as to provide that on the
day specified in the notice, issued under clause (i) of sub-section (2), or as soon afterwards
as may be, after hearing such evidence and after taking into account such particulars as the
assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the
claim or claims specified in such notice and make an assessment determining the total income
or loss accordingly, and determine the sum payable by the assessee on the basis of such
assessment and also seeks to provide that on the day specified in the notice issued under
clause (ii) of sub-section (2), or as soon afterwards as may be, after hearing such evidence as
the assessee may produce and such other evidence as the Assessing Officer may require on
specified points, and after taking into account all relevant material which he has gathered, the
Assessing Officer shall, by an order in writing, make an assessment of the total income or
loss of the assessee, and determine the sum payable by him or refund of any amount due to
him on the basis of such assessment.
These amendments will take effect from 1 st June, 2002.
Sub-clause (c) seeks to insert a proviso in sub-section (3) of section 143 to provide that
in the case of a scientific research association referred to in clause (21), news agency referred
to in clause (22B), association or institution referred to in clause (23 A), institution referred to
in clause (23B), fund or institution referred to in sub-clause (iv) or trust or institution referred
to in sub-clause (v) or any university or other educational institution referred to in sub-
clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause
(23C) of section 10, which is required to furnish a return of income under sub-section (4C) of
section 139, the Assessing Officer shall not make an assessment order of the total income or
lossof such scientific research association, news agency, association or institution or fund
or trust or university or other educational institution or any hospital or other medical institu-
tion (without giving effect to the provisions of section 10), unless he has intimated the
Central Government or the prescribed authority, the contravention of the provisions con-
tained in such clauses where in his view such contravention has taken place, and the notifi-
cation issued or approval granted to such a body has been rescinded or withdrawn.
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131
I nis amendment will take enect from 1st Apnl, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 58 seeks to amend section 153 of the Income-tax Act relating to time limit for
completion of assessments and re-assessments.
It is proposed to amend the said section so as to provide that the period commencing
from the date on which the Assessing Officer intimates the Central Government or the
prescribed authority the contravention of the provisions of clause (21) or clause (22B) or
clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via) of clause (23C) of section 10, under clause (a) of the second proviso to sub-
section (3) of section 143 and ending with the date on which the copy of the order withdraw-
ing the approval or rescinding the notification, as the case may be, under those clauses is
received by the Assessing Officer, shall be excluded in computing the period of limitation
under this section.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 59 seeks to amend section 155 of the Income-tax Act relating to other amend-
ments.
The proposed amendment seeks to insert a new sub-section (14) in the said section so
as to provide that where in the assessment for any previous year or in any intimation or
deemed intimation under sub-section (1) of section 143 for any previous year, credit for tax
deducted in accordance with the provisions of section 199 has not been given on the ground
that the certificate furnished under section 203 was not filed with the return and subse-
quently such certificate is produced before the Assessing Officer within two years from the
end of the assessment year in which such income is assessable, credit of tax deducted at
source shall be given to the assessee on production of such certificate. It is also proposed to
provide that nothing contained in the proposed sub-section shall apply unless the income
from which tax has been deducted has been disclosed in the return of income filed by the
assessee for that assessment year.
The proposed amendment will enable the Assessing Officer to rectify the order of
assessment or any intimation or deemed intimation under sub-section (1) of section 143.
It is further proposed to insert a new sub-section (15) in the said section so as to
provide that where in the assessment for any year, a capital gain arising from the transfer of
a capital asset, being land or building or both, is computed by taking the full value of the
consideration to be the value adopted or assessed by any authority of a State Government
for the purposes of payment of stamp duty in accordance with sub-section (1) of section
50C, and subsequenty such value is revised in any appeal or revision or reference referred to
in clause (b) of sub-section (2) of that section, then, the Assessing Officer shall revise the
computation of said capital gain by taking the full value of the consideration to be the value
so revised in such appeal or revision or reference.
The proposed amendment is of consequental nature.
These amendments will take effect from 1 st June, 2002.
Clause 6Q seeks to amend section 158A of the Income-tax Act relating to procedure
when assessee claims identical question of law is pending before High Court or Supreme
Court
The existing provisions contained in section 158A provide for a special procedure in
cases where an assessee claims that any question of law arising in his case for an assess-
ment year which is pending before the Assessing Officer or any appellate authority is iden-
tical with a question of law arising in his case for another assessment year which is pending
before the High Court on a reference under section 256 or before the Supreme Court on a
reference under section 257 or in appeal before the Supreme Court under section 261. In such
cases, the assessee may furnish a declaration that if the Assessing Officer or the appellate
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authority, as the case may be, agrees to apply the final decision of the High Court or the
Supreme Court on the question of law to the relevant case, the assessee shall not raise such
question of law in the relevant case in appeal before any appellate authority or for a reference
before the High Court or the Supreme Court or in appeal before the High Court or the
Supreme Court.
Section 260A relating to appeal to High Court was inserted in the Income-tax Act by the
Finance (No. 2) Act, 1998. It is proposed to amend sub-sections (1) and (4) of section 158A
so as to include at the appropriate places therein, the references relating to "appeals to High
Court under section 260A", and omit references to "section 256 and section 257" in the
portion at the end of sub-section (1) and in clause (b) of sub-section (4) of section 158A.
These amendments are of consequential nature.
These amendments will take effect from 1 st June, 2002.
Clause 61 seeks to amend section 158B of the Income-tax Act relating to definitions.
Under the existing provisions contained in clause (b) of the said section, "undisclosed
income" includes any money, bullion, jewellery or other valuable article or thing or any
income based on any entry in the books of account or other documents or transactions,
where such money, bullion, jewellery or valuable article, thing, entry in the books of account
or other document or transaction represents wholly or partly income or property which has
not been or would not have been disclosed for the purposes of the Income-tax Act.
It is proposed to amend the said clause so as to specifically provide that any expense,
deduction or allowance claimed under the said Act which is found to be false shall be
included in the undisclosed income as defined in the said clause.
This amendment will take effect from 1 st June, 2002.
Clause 62 seeks to amend section 158BB of the Income-tax Act relating to computation
of undisclosed income of the block period.
Under the existing provisions contained in sub-section (1) of the said section, the
aggregate of the total income of the previous years falling within the block period shall be
computed in accordance with the provisions of Chapter IV, on the basis of evidence found as
a result of search or requisition of books of account or documents and such other materials
or information as are available with the Assessing Officer.
It is proposed to amend the opening portion of the said sub-section so as to provide
that such aggregate of total income is to be computed in accordance with the provisions of
the Income-tax Act on the basis of evidence found as a result of search or requisition and on
the basis of such other materials or information gathered in relation to such evidence, as are
available with the Assessing Officer.
Under the existing provisions contained in clause (a) of the said sub-section, the
aggregate of the total income of the block period shall be reduced by the total income, or, as
the case may be, increased by the loss of a previous year determined on the basis of assess-
ments concluded under section 143 or section 144 or section 147.
It is proposed to amend the said clause (a) so as to clarify that the assessments
mentioned therein are those which have been concluded prior to the date of commencement
of the search or the date of requisition.
Under the existing provisions contained in clause (b), where returns of income have
been filed under section 139 or section 147 but assessments have not been made till the date
of search or requisition, the aggregate total income of the block period shall be adjusted by
the income or loss disclosed in such returns.
It is proposed to amend the said clause (b) so as to make the provision applicable also
in respect of income or loss disclosed in the returns filed, in response to a notice issued
under sub-section (1) of section 142 or section 148.
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133
Under the existing provisions contained in clause (c), where the due date for filing a
return of income has expired but no return has been filed, no adjustment shall be made to the
aggregate total income of the block period.
It is proposed to substitute the said clause (c) by clauses (c) and (ca) so as to provide
that where the due date for filing a return of income has expired, but no return of income has
been filed, the aggregate total income of the block period shall be adjusted by an amount
determined on the basis of entries as recorded in the books of account and other documents
maintained in the normal course on or before the date of search or requisition where such
entries result in computation of loss for any previous year falling in the block period, or on
the basis of entries as recorded in the books of account and other documents maintained in
the normal course on or before the date of search or requisition where such income does not
exceed the maximum amount not chargeable to tax for any previous year falling in the block
period, and in other cases no adjustment shall be made.
Under the existing provisions contained in clause (a) of the Explanation, the total
income or loss of each previous year shall, for the purpose of aggregation, be taken as the
total income or loss computed in accordance with the provisions of Chapter IV without
giving effect to set off of brought forward losses under Chapter VI or unabsorbed deprecia-
tion under sub-section (2) of section 32.
It is proposed to substitute the said clause so as to provide that for the purpose of
aggregation, the total income or loss of each previous year shall be computed in accordance
with the provisions of the Income-tax Act without giving effect to set off of the said brought
forward losses or unabsorbed depreciation, and further to provide that in computing deduc-
tions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to
the set off of such brought forward losses or unabsorbed depreciation.
These amendments will take effect from 1 st June, 2002.
Clause 63 seeks to amend section 158BC of the Income-tax Act relating to procedure
for block assessment.
Under the existing provisions contained in clause (b) of the said section, the Assess-
ing Officer shall proceed to determine the undisclosed income of the block period in the
manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and
(3) of section 143 and section 144 shall, so far as may be, apply.
It is proposed to amend the said clause so as to provide that the provisions of section
145 relating to method of accounting shall also apply, so far as may be, in determining the
undisclosed income of the block period in the manner laid down in section 158BB.
The existing provisions in clause (d) of the said section provide that the assets seized
under section 132 or requisitioned under section 132A shall be retained to the extent neces-
sary and the provisions of section 132B shall apply subject to such modifications as may be
necessary and as are specified in the said clause.
It is proposed to amend section 132B vide clause 54 of the Bill so as to make the
provisions contained in that section directly relatable to the procedure for assessment in
cases of search under section 132 or requisition under section 132A laid down under Chapter
XIWB.
It is proposed to substitute clause (d) of section 158BC so as to provide that the assets
seized under section 132 or requisitioned under section 132A shall be dealt with in accord-
ance with the provisions of section 132B.
These amendments will take effect from 1st June, 2002.
Clause 64 seeks to amend section 158BD of the Income-tax Act relating to undisclosed
income of any other person.
Under the existing provisions contained in the said section, where the Assessing
Officer is satisfied that any undisclosed income belongs to any person other than the person
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[PART II—
with respect to whom the search was made under section 132 or whose books of account or
other documents or any assets were requisitioned under section 132 A, the books of account
or other documents or assets seized or requisitioned shall be handed over to the Assessing
Officer having jurisdiction over such other person and that Assessing Officer shall proceed
against such other person and the provisions of Chapter XIV-B shall apply accordingly.
It is proposed to insert the words "under section 158BC" after the words "that Assess-
ing Officer shall proceed" so as to clarify that the Assessing Officer shall proceed against
such other person under section 158BC.
This amendment will take effect from 1st June, 2002.
Clause 65 seeks to amend section 158BE of the Income-tax Act relating to time limit for
completion of block assessment.
Under the existing provisions contained in Explanation 1 below sub-section (2) of the
said section, in computing the period of limitation for completion of block assessment re-
ferred to in sub-sections (1) and (2), the period during which the assessment proceeding is
stayed by an order or injunction of any Court, and the time taken in furnishing a report of
audit as directed by the Assessing Officer under sub-section (2A) of section 142, shall be
excluded.
It is proposed to substitute the said Explanation so as to provide that in computing
the said period of limitation, the time taken in reopening the whole or any part of the proceed-
ing or giving an opportunity to the asscssee to be reheard under the proviso to section 129
shall be excluded. It is further proposed that in a case where an application made before the
Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded
with by it, the period commencing on the date on which such application is made and ending
with the date on which the order under sub-section (1) of section 245D i» received by the
Commissioner under sub-section (2) of that section shall also be excluded.
The proposed proviso in the Explanation provides that where immediately after the
exclusion of the aforesaid period, the period of limitation referred to in sub-section (1) or sub-
section (2) available to the Assessing Officer for making an order of assessment under clause
(c) of section 158BC is less than sixty days, such remaining period shall be extended to sixty
days and the aforesaid period of limitation shall be deemed to be extended accordingly.
These amendments will take effect from 1 st June, 2002.
Clause 66 seeks to insert a new section 174A in Chapter XV of the Income-tax Act to
provide for assessment of association of persons or body of individuals or artificial juridical
person formed for a particular event or purpose.
The proposed new section 174A seeks to provide that where it appears to the Assess-
ing Officer that any association of persons or a body of individuals or an artificial juridical
person formed or established or incorporated for a particular event or purpose is likely to be
dissolved in the assessment year in which such association of persons or body of individu-
als or artificial juridical person was formed or established or incorporated or immediately after
such assessment year, the total income of such person or body or juridical person, for the
period from the expiry of the previous year for that assessment year up to the date of its
dissolution, shall be chargeable to tax in that assessment year. The proposed section further
provides that the provisions of sub-sections (2) to (6) of section 174 shall, so far as may be,
apply to any proceedings in the case of any such person as they apply in the case of persons
leaving India.
This amendment will take effect retrospectively from 1 st April, 2002 and will, accord-
ingly, apply in relation to the assessment year 2002-2003 and subsequent years.
Clause 67 seeks to amend section 190 of the Income-tax Act relating to deduction at
source and advance payment.
It is proposed to insert a new clause (10CC) in section 10 of the Income-tax Act vide
sub-clause (i) of clause 4 of the Bill so as to provide that in the case of an employee, being an
SEC. 2]
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13 5
individual deriving income in the nature of a perquisite, not provided for by way of monetary
payment within the meaning of clause (2) of section 17, the tax on such income actually paid
by his employer, at the option of employer, on behalf of such employee notwithstanding
anything contained in section 200 of the Companies Act, 1956, shall be exempt from income-
tax. It is accordingly proposed to make consequential amendment in section 190 to provide
for payment of tax by the employer on behalf of his employee.
This amendment will take effect from 1 st June, 2002.
Clause 68 seeks to amend section 192 of the Income-tax Act relating to deduction of
tax at source from salary.
Sub-clause (a) seeks to insert two new sub-sections (1 A) and (IB) in the said section.
The proposed sub-section (1 A) provides that the person responsible for paying any income
in the nature of a perquisite (not provided for by way of monetary payment) referred to in
clause (2) of section 17 may pay at his option, tax on the whole or part of such income without
making any deduction therefrom at the time when such tax was otherwise deductible under
the provisions of sub-section (1).
The proposed sub-section (IB) provides that for the purposes of sub-section (1 A), tax
shall be determined at the average of income-tax computed on the basis of the rates in force
for the financial year, on the income chargeable under the head "Salaries" including the
income referred to in sub-section (1 A), and the tax so payable shall be construed as if it were,
a tax deductible at source from the income under the head "Salaries" as per the provisions of
sub-section (1), and shall be subject to the provisions of Chapter XVII-B.
Sub-clause (b) seeks to amend sub-section (3) which is of consequential nature.
These amendments will take effect from 1 st June, 2002.
Clause 69 seeks to amend section 193 of the Income-tax Act relating to deduction of
tax at source from interest on securities.
The proposed amendment seeks to provide that no deduction of tax at source shall be
made under the said section in respect of any interest payable to the Life Insurance Corpo-
ration of India or the General Insurance Corporation of India or to any of the four companies
formed by virtue of the schemes framed under sub-section (1) of section 16 of the General
Insurance Business (Nationalisation) Act, 1972 or any other insurer in respect of any secu-
rity owned by them or in which they have full beneficial interest.
These amendments will take effect from 1 st June, 2002.
Clause 70 seeks to amend section 194 of the Income-tax Act relating to deduction of
tax at source from dividends.
Under the existing provisions contained in the said section, no tax is required to be
deducted at source in the case of a shareholder, being an individual, of a company in which
the public are substantially interested, if the dividend is paid by an account payee cheque
and the amount of the dividend or, as the case may be, the aggregate of the amounts of the
dividend does not exceed two thousand five hundred rupees. Further, the second proviso to
the said section provides that the provisions of the section shall not apply in the cases
where declaration or distribution or payment of dividend is made after 1st June, 1997 as
contained in sub-section (1) of section 115-0.
The proposed amendment seeks to substitute the first and second provisos with a
new proviso in the said section so as to provide that no deduction of tax at source shall be
made under this section in respect of any dividend payable to the Life Insurance Corporation
of India or the General Insurance Corporation of India or to any of the four companies formed
by virtue of the schemes framed under sub-section (1) of section 16 of the General Insurance
Business (Nationalisation) Act, 1972 or any other insurer in respect of any shares owned by
them or in which they have full beneficial interest.
This amendment will take effect from 1st June, 2002.
136
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[PART II—
Clause 71 seeks to amend section 194A of the Income-tax Act relating to deduction of
tax at source from interest other than "Interest on securities".
Under the existing provisions contained in sub-section (1) of the said section, deduc-
tion of tax at source from interest other than "Interest on securities" is to be made by any
person other than an individual or a Hindu undivided family.
It is proposed to insert a proviso in the said sub-section so as to provide that an
individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44AB during the-financial year immediately preceding the financial
year in which such interest is credited or paid, shall be liable to deduct income-tax under this
section.
This amendment will take effect from 1st June, 2002,
Clause 72 seeks to amend section 194C of the Income-tax Act relating to deduction of
tax at source from payments to contractors and sub-contractors.
Under the existing provisions contained in sub-section (2) of the said section, deduc-
tion of tax at source is to be made by any person other than an individual or a Hindu
undivided family being a contractor, responsible for paying any sum to a resident, being a
sub-contractor at the time of credit or payment of any sum to the account of the sub-
contractor.
It is proposed to insert a proviso in the said sub-section so as to provide that an
individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44AB during the financial year immediately preceding the financial
year in which such sum is credited or paid to the account of the sub-contractor, shall be liable
to deduct income-tax under this sub-section.
This amendment will take effect from 1 st June, 2002.
Clause 73 seeks to amend section 194H of the Income-tax Act relating to deduction of
tax at source from commission or brokerage.
The existing provisions contained in section 194H provide that deduction of income-
tax at source is to be made by any person other than an individual or a Hindu undivided
family at the rate often per cent, on any income by way of commission (not being insurance
commission referred to in section 194D) or brokerage at the time of credit or payment of such
income to the account of the payee.
Sub-clause (a) seeks to provide that tax deduction at source for the purpose of the
aforesaid section shall be made at the rate of five per cent, instead often per cent.
Sub-clause (b) seeks to insert a proviso in the said section so as to provide that an
individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44 AB during the financial year immediately preceding the financial
year in which such commission or brokerage is credited or paid, shall be liable to deduct
income-tax under this section.
These amendments will take effect from 1 st June, 2002.
Clause 74 seeks to amend section 194-1 of the Income-tax Act relating to deduction of
tax at source from rent.
Under the existing provisions contained in the said section, deduction of tax at source
is to be made by any person other than an individual or a Hindu undivided family at the time
of credit or payment of rent to the account of the payee.
It is proposed to insert a new proviso in the said section so as to provide that an
individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
137
business or profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44AB during the financial year immediately preceding the financial
year in which such income by way of rent is credited or paid, shall be liable to deduct income-
tax under this section.
This amendment will take effect from the 1 st June, 2002.
Clause 75 seeks to amend section 194J of the Income-tax Act relating to deduction of
tax at source from fees for professional or technical services.
Under the existing provisions contained in sub-section (1) of the said section, deduc-
tion of tax at source is to be made by any person other than an individual or a Hindu
undivided family at the time of credit or payment of fees for professional or technical services
to the account of the payee.
It is proposed to insert a new proviso in the said sub-section so as to provide that an
individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the
business or profession carried on by him exceed the monetary limits specified under clause
(a) or clause (b) of section 44AB during the financial year immediately preceding the financial
year in which fees for professional or technical services is credited or paid, shall be liable to
deduct income-tax under this sub-section.
This amendment will take effect from the 1 st June, 2002.
Clause 76 seeks to substitute section 194K of the Income-tax Act relating to deduction
of tax at source from income in respect of units.
Under the existing provisions contained in the said section, tax is required to be
deducted at source by the person responsible for making the payment of any income to a
resident in respect of units of a Mutual Fund specified under clause (23D) of section 10 or of
the Unit Trust of India at the rate of twenty per cent, if the payee is a company and fifteen per
cent, in case of other payees. Further, no deduction is to be made under sub-section (1) of
the said section from any income credited or paid on or after 1 st June, 1999. No deduction is
required to be made in cases where the amount of such income does not exceed ten thousand
rupees.
The proposed amendment seeks to substitute the said section with a new section so
as to provide that where any income is payable to a resident in respect of units of a Mutual
Fund specified under clause (23D) of section 10 or of the Unit Trust of India, the person
responsible for making the payment shall, at the time of credit of such income to the account
of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by
any other mode, whichever is earlier, deduct income-tax thereon at the rate often per cent.
The Explanation below the proposed section defines the expression "Unit Trust of
India" and clarifies that tax would be required to be deducted at source from such income
credited to suspense account.
This amendment will take effect from the 1st June, 2002.
Clause 77 seeks to amend section 195 of the Income-tax Act relating to deduction of
tax at source from other sums.
Under the existing provisions contained in the second proviso to sub-section (1) of
the said section, no tax is required to be deducted at source from any dividends declared,
distributed or paid by a domestic company on or after 1 st June, 1997.
The proposed amendment seeks to omit the said proviso and is of consequential
nature.
This amendment will take effect from 1 st June, 2002.
Clause 78 seeks to amend section 195 A of the Income-tax Act relating to income being
payable "net of tax".
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THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
Under the existing provisions, where under an agreement or other arrangement, the tax
chargeable on any income is to be borne by the person by whom the income is payable, then,
for the purposes of deduction of tax, such income is to be increased to such amount as
would, after deduction of tax, be equal to the net amount payable.
It is proposed to insert two new sub-sections (1 A) and (1B) in section 192 vide clause
68 of the Bill so as to provide an option to the employer to pay tax on behalf of the employee,
without deducting tax from his income, on income in the nature of perquisite (not provided •
for by way of monetary payment) referred to in clause (2) of section 17, notwithstanding the
provisions of section 200 of the Companies Act, 1956.
It is, therefore, proposed to exclude payment of tax on income in the nature of perqui-
site, not provided for by way of monetary payments, made by an employer, at the option of
the employer, on behalf of any employee for calculating the income for the purpose of
deducting tax at source.
The proposed amendment is of consequential nature.
This amendment will take effect from 1 st June, 2002.
Clause 79 seeks to amend section 196A of the Income-tax Act relating to income in
respect of units of non-residents.
Under the existing provisions contained in the proviso to sub-section (1) of the said
section, no tax is required to be deducted at source from any income paid to a non-resident,
not being a company, or to a foreign company, in respect of units of a Mutual Fund specified
under clause (23D) of section 10 or of the Unit Trust of India, if such income is credited or
paid on or after 1 st June, 1999.
The proposed amendment seeks to omit the said proviso and is of consequential
nature.
This amendment will take effect from 1 st June, 2002.
Clause 80 seeks to amend section 196C of the Income-tax Act relating to deduction of
tax at source from income from foreign currency bonds or shares of an Indian company.
Under the existing provisions contained in the proviso to the said section, no tax is
required to be deducted at source from any dividends declared, distributed or paid by a
domestic company on or after lstJune, 1997.
The proposed amendment seeks to omit the said proviso.
This amendment will take effect from 1 st June, 2002.
Clause 81 seeks to amend section 196D of the Income-tax Act relating to deduction of
tax at source from income of Foreign Institutional Investors from securities.
Under the existing provisions contained in the proviso to sub-section (1) of the said
section, no tax is required to be deducted at source from any dividends declared, distributed
or paid by a domestic company on or after 1 st June, 1997.
The proposed amendment seeks to omit the said proviso and is of consequential
nature.
This amendment will take effect from 1 st June, 2002.
Clause 82 seeks to amend section 197 A of the Income-tax Act which provides that no
deduction of tax at source is to be made in certain cases.
Under the existing provisions contained in section 197A, no tax is deducted at source
if an individual who is a resident in India makes a declaration that the tax on his estimated
total income of the previous year in which such income is to be included will be nil.
The proposed amendment seeks to provide that the provisions of the section shall not
apply where the incomes referred to in sub-section (1) or sub-section (1 A) of the said section
SEC. 2]
Tl IE GAZETTE OF INDIA EXTRAORDINARY
139
or the aggregate of such incomes credited or paid or likely to be credited or paid during the
previous year in which such income is to be included exceeds the maximum amount which is
not chargeable to income-tax.
This amendment will take effect from 1 st June, 2002.
Clause 83 seeks to amend section 198 of the Income-tax Act which provides that tax
deducted is income received.
It is proposed to amend the said section so as to provide that the sum being the tax
paid under the proposed sub-section (1A) of section 192, shall not be deemed to be the
income received for the purpose of computing the income of an assessee.
The proposed amendment is of consequential nature.
This amendment will take effect from 1 st June, 2002.
Clause 84 seeks to amend section 199 of the Income-tax Act the relating to credit for tax
deducted.
It is proposed to insert a new sub-section (2) in the said section so as to provide that
any sum referred to under sub-section (1 A) of section 192 and paid to the Central Govern-
ment shall be treated as tax paid on behatf of the person in respect of whose income, such
payment of tax has been made and credit shall be given to him for the amount so paid on
production of the certificate furnished under section 203 in the assessment under the said
Act for the assessment year for which such income is assessable.
The proposed amendment is of consequential nature.
This amendment will take effect from I st June, 2002.
Clause 85 seeks to amend section 200 of the Income-tax Act which provides for duty
of person deducting tax.
It is proposed to insert a new sub-section (2) in the said section so as to provide that
any person being an employer, referred to in sub-section (1 A) of section 192 shall pay within
the prescribed time, the tax to the credit of the Central Government or as the Board directs.
The proposed amendment is of consequential nature.
This amendment will take effect from 1st June, 2002.
Clause 86 seeks to amend section 201 of the Income-tax Act which provides for conse-
quences of failure to deduct or pay tax.
It is proposed to amend the said section so as to insert reference to section 200 of the
Income-tax Act.
The proposed amendment is of clarificatory nature.
This amendment will take effect from 1 st June, 2002.
Clause 87 seeks to amend section 203 of the Income-tax Act which provides for fur-
nishing of certificate for tax deducted.
It is proposed to insert a new sub-section (2) in the said section so as to provide that
every person referred to in sub-section (1 A) of section 192 shall, within such period, as may
be prescribed, furnish to the person in respect of whose income such payment of tax has
been made, a certificate to the effect that tax has been paid to the Central Government, and
specify the amount so paid, the rate at which the tax has been paid and such other particulars
as may be prescribed.
The amendment is of consequential nature..
This amendment will take effect from 1 st June, 2002.
Clause 88 seeks to insert a new section 206CA in the Income-tax Act relating to tax-
collection account number.
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[PART II—
Under the existing provisions contained in section 206C, every person, being a seller,
shall at the time of debiting of the amount payable by the buyer to the account of the buyer
or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque
or draft or by any other mode, collect from him a sum equal to the percentage, specified in the
Table under sub-section (1) of that section.
The proposed new section seeks to provide that every person collecting tax at source
in accordance with the provisions of section 206C shall apply to the Assessing Officer for the
allotment of a tax-collection account number. It is further proposed that such tax-collection
account number shall be quoted in all challans for payment of any sum under sub-section (3),
in all certificates furnished under sub-section (5), in all the returns delivered under sub-
section (5A) or sub-section (5B) of section 206C and in all other documents pertaining to
such transactions as may be prescribed.
This amendment will take effect from 1 st June, 2002.
Clause 89 seeks to amend section 210 of the Income-tax Act relating to payment of
advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer.
It is proposed to omit "and who has not paid any advance tax under sub-section (1)"
occurring in sub-section (3) of the said section so as to clarify that the Assessing Officer,
may by order in writing, require any person liable to pay advance tax, if he is of the opinion
that such person has not paid any of the specified instalments of advance tax by the dates
specified under section 211.
This amendment will take effect from 1st June, 2002.
Clause 90 seeks to amend section 244 A of the Income-tax Act relating to interest on
refunds.
Under the existing provisions contained in sub-section (1), where refund of any amount
becomes due to the assessee under the Income-tax Act, the assessee is entitled to receive, in
addition to the said amount, simple interest thereon at the rate of three-fourth per cent, for
every month or part of a month comprised in the period of delay specified in the said section.
It is proposed to amend clauses (a) and (b) of the said sub-section so as to reduce the
rate of interest from three-fourth per cent, to two-third per cent, for every month or part of a
month, as the case may be.
These amendments will take effect from 1 st June, 2002.
Clause 91 seeks to amend section 245C of the Income-tax Act relating to application for
settlement of cases.
Under the existing provisions contained in sub-section (IE) of section 245C, where
any books of account or other documents or assets referred to therein are seized under
section 132, the assessee shall not be entitled to make an application under sub-section (1) of
section 245C before the expiry of one hundred and twenty days from the date of the seizure.
The provisions contained in sub-section (5) of the said section 132 are applicable only to a
search initiated or requisition made before 1 st July, 1995.
It is, therefore, proposed to omit the said sub-section (IE). The proposed amendment
is of consequential nature.
This amendment will take effect from 1st June, 2002.
Clause 92 seeks to amend section 245D of the Income-tax Act relating to procedure on
receipt of an application under section 245C.
Under the existing provisions contained in section 245D, the Settlement Commission,
on receipt of an application for settlement under section 245C, shall call for a report from the
Commissioner having jurisdiction over the case. On the basis of the report of the Commis-
sioner and having regard to the nature, circumstances of the case or complexity of the
investigation involved therein, the Settlement Commission may pass an order either allowing
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
141
the application to be proceeded with or rejecting the same. Where an application is allowed
to be proceeded with, the Settlement Commission may direct the Commissioner to make such
further enquiry or investigation as it considers necessary, and call for the relevant records
from the Commissioner for its examination. After examining the relevant records and the
Commissioner's report and after giving an opportunity to the applicant of being heard, the
Settlement Commission may pass an order as it thinks fit on the matters covered by the
application and any other matter referred to in that section.
It is proposed to amend sub-section (1) of the said section so as to provide that the
Settlement Commission shall, where it is possible, pass an order either rejecting the applica-
tion or allowing the application to be proceeded with within a period of one year from the end
of the month in which such application is made under section 245C.
It is further proposed to insert a new sub-section (4A) in the aforesaid section so as to
provide that in every application, the Settlement Commission shall, where it is possible, pass
an order under sub-section (4) within a period of four years from the end of the financial year
in which such application was allowed to be proceeded with.
These amendments will take effect from I st June, 2002.
Clause 93 seeks to omit section 245HA of the Income-tax Act relating to power of
Settlement Commission to send a case back to the Assessing Officer if the assessee does not
co-operate.
Under the existing provisions contained in section 245HA, the Settlement Commission
has been vested with the power to send a case back to the Assessing Officer if in its opinion
the assessee has not co-operated in the proceedings before the Commission, and in such
cases, the Assessing Officer shall dispose of the case in accordance with the provisions of
the Act as if no application under section 245C had been made.
It is proposed to omit the said section so as to withdraw the power of Settlement
Commission to send the case back to the Assessing Officer.
This amendment will take effect from 1st Junev 2002.
Clause 94 seeks to amend section 252 of the Income-tax Act relating to Appellate
Tribunal.
Under the existing provisions contained in sub-section (3) of the said section, the
Central Government ordinarily appoints a judicial member of the Appellate Tribunal to be the
President thereof.
It is proposed to substitute the said sub-section so as to provide that the Central
Government shall appoint the Senior Vice-President or one of the Vice-Presidents of the
Appellate Tribunal to be the President of the Appellate Tribunal.
This amendment will take effect retrospectively from 1 st April, 2002.
Clause 95 seeks to substitute a new section for section 269T of the Income-tax Act
relating to mode of repayment of certain loans or deposits.
The existing provisions contained in section 269T provide that no branch of a banking
company or a co-operative bank and no other company or co-operative society or firm or
other person shall repay to any person any deposit made with it otherwise than by an
account payee cheque or account payee bank draft drawn in the name of the person who has
made the deposit, in cases where the amount of deposit exceeds rupees twenty thousand.
The Explanation below sub-section (2) of the said section defines 'deposit' to mean any
deposit of money which is repayable after notice or repayable after a period and, in the case
of a person other than a company, includes deposit of any nature.
The said section is applicable only to deposits. It is proposed to substitute the
existing section 269T by a new section so as to extend the scope of the aforesaid section to
loans also.
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[PART II—
This amendment will takeeffect from 1 st June, 2002.
Clause 96 seeks to insert a new section 269UP in the Income-tax Act to provide that the
provisions of the Chapter shall not apply where transfer of immovable property is effected
after a certain date.
Under the existing provisions contained in Chapter XX-C, any person intending to
transfer immovable property in specified areas at values exceeding specified amounts is
required to file a statement in the prescribed form before the appropriate authority within the
prescribed time before the intended date of transfer. Within a period of three months from the
end of the month in which the statement is filed, the appropriate authority may pass an order
in writing for purchase by the Central Government of such immovable property at an amount
equal to the amount of apparent consideration.
It is proposed to insert a new section 269UP so as to make the provisions of Chapter
XX-C inapplicable in respect of any transfer of immovable property effected on or after I st
July, 2002.
This amendment will take effect from 1 st July, 2002.
Clause 97 seeks to amend section 271 of the Income-tax Act relating to failure to
furnish returns, comply with notices, concealment of income, etc.
Under the existing provisions contained in sub-section (1) of the said section, if the
Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under
the Income-tax Act, is satisfied that any person has failed to comply with certain notices or
directions issued under the sections referred to in that sub-section or has concealed the
particulars of his income or furnished inaccurate particulars thereof, he may levy a penalty
equal to the amount referred to in clause (ii) or, as the case may be, clause (iii) of the said sub-
section.
Sub-clauses (a), (d) and (g) of this clause propose to amend sub-section (1) so as to
include a reference to the Commissioner as being an authority who can initiate and levy
penalty under the said sub-section. Similar references to the Commissioner are also pro-
posed to be inserted in Explanation I and Explanation 7 of the said sub-section, being
consequential in nature.
These amendments will take effect from 1 st June, 2002.
The existing provisions contained in clause (ii) of the aforesaid sub-section (1) provide
for a penalty often thousand rupees, in addition to any tax payable, for failure to comply with
a notice issued under sub-section (1) of section 142 or sub-section (2) of section 143 or
direction issued under sub-section (2 A) of section 142.
Sub-clause (b) of this clause proposes to amend the said clause (ii) so as to clarify that
the penalty for failure to comply with the above mentioned notice or direction can be levied
even if no tax is payable on the total income,assessed.
The proposed amendment is of clarificatory nature.
The existing provision contained in clause (iii) of the aforesaid sub-section (1) pro-
vides for a penalty, in addition to any tax payable, of a sum which shall not be less than, but
which shall not exceed three times the amount of tax sought to be evaded, for concealing
particulars of income, or furnishing inaccurate particulars in respect thereof.
Sub-clause (c) of this clause proposes to amend the said clause (iii) so as to clarify that
the penalty referred to therein can be levied even if no tax is payable on the total income
assessed.
The proposed amendment is of clarificatory nature.
Under the existing provisions contained in Explanation 3 to the aforesaid sub-section
(1), if any person who has not been assessed previously is found to have taxable income for
a year, and fails to furnish a return for that year until the expiry of the period during which he
SEC. 2]
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was assessable therefor, and no notice under sub-section (1) of section 142 or section 148
requiring him to furnish a return was issued to him, it will be deemed that the person has
concealed the particulars of his income for that year.
Sub-clause (e) of this clause proposes to amend the said Explanation 3 so as to make
its provisions applicable even to persons who have been assessed earlier.
The existing provisions contained in clause (a) of Explanation 4 to the aforesaid sub-
section (1) provide that the expression "the amount of tax sought to be evaded" in a case
where the amount of income in respect of which particulars have been concealed or inaccu-
rate particulars have been furnished exceeds the total income assessed, means the tax that
would have been chargeable on the income in respect of which particulars have been con-
cealed or inaccurate particulars have been furnished had such income been the total income.
Sub-clause (f) of this clause proposes to amend Explanation 4 so as to clarify that in
cases where the amount of income in respect of which particulars have been Concealed or
inaccurate particulars have been furnished has the effect of reducing the loss declared in the
return or converting that loss into income, the amount of tax sought to the evaded shall be
the tax that would have been chargeable on the amount of such income as if it were the total
income.
The proposed amendment is of clarificatory nature.
Sub-clauses (b), (c), (e) and (f) will take effect from 1 st April, 2003.
Clause 98 seeks to substitute section 271F of the Income-tax Act relating to penalty for
failure to furnish return of income.
Under the existing provisions contained in section 271F, if a person who is required to
furnish a return of income as required under sub-section (1) of section 139, fails to furnish
such return before the end of the relevant assessment year, such person shall be liable to pay
a penalty of five thousand rupees. The proviso to section 271F provides for a penalty of five
thousand rupees for failure to furnish a return of income as required by the proviso to sub-
section (1) of section 139 on or before the due date.
It is proposed to substitute the existing section 27 IF so as to provide that if a person
who is required to furnish a return of income, as required under sub-section (1) of section 139
or by the provisos to that sub-section, fails to furnish such return before the end of the
relevant assessment year, the Assessing Officer may direct that such person shall pay, by
way of penalty, a sum of five thousand rupees.
This amendment will take effect from 1 st June, 2002.
Clause 99 seeks to amend section 272 A of the Income-tax Act relating to penalty for
failure to answer questions, sign statements, furnish information, returns or statements,
allow inspections, etc.
Under the existing provisions contained in clause (d) of sub-section (1) of section
272A, a penalty often thousand rupees is leviable, inter alia, for failure to comply with the
provisions of section 139A relating to permanent account number.
Sub-clause (a) seeks to omit clause (d) of sub-section (1) of section 272A. Similar
provision is, however, proposed to be inserted vide clause 100 of the Bill.
This amendment will take effect from 1 st June, 2002.
Sub-clause (b) seeks to substitute clause (e) of sub-section (2) of the said section so
as to provide that if any person fails to furnish the return of income which he is required to
furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the
time allowed and in the manner required under those sub-sections, he shall pay, by way of
penalty, a sum of one hundred rupees for every day of such default.
The proposed amendment is of consequential nature.
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This amendment will take effect from 1 st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 100 seeks to insert a new section 272B of the Income-tax Act providing for
penalty for failure to comply with the provisions of section 139A and for certain other related
purposes.
Sub-section (1) of the proposed new section seeks to provide that if a person fails to
comply with the provisions of section 139 A, the Assessing Officer may direct that he shall
pay, by way of penalty, a sum often thousand rupees.
Sub-section (2) of the proposed new section seeks to provide that if a person who is
required to quote his permanent account number in any document referred to in clause (c) of
sub-section (5) of section 139 A or to intimate such number as required by sub-section (5 A)
of that section, quotes or intimates a number which is false and which he either knows or
believes to be false or does not believe to be true, the Assessing Officer may direct that such
person shall pay, by way of penalty, a sum often thousand rupees.
Sub-section (3) of the proposed new section seeks to provide the person an opportu-
nity of being heard in the matter before imposition of penalty under sub-section (1) or sub-
section (2) of the said section.
These amendments will take effect from 1 st June, 2002.
Clause 101 seeks to insert a new section 272BBB in the Income-tax Act, which pro-
vides for penalty for failure to comply with the provisions of section 206CA relating to the
allotment of tax-collection account number to the person responsible for collection of tax at
source. The proposed new section provides for a levy of a fixed amount of penalty of a sum
of ten thousand rupees.
This amendment will take effect from 1 st June, 2002.
Clause 102 seeks to amend section 273B of the Income-tax Act which provides that
penalty shall not be imposed in certain cases.
The existing provisions contained in section 273B provide that no penalty shall be
imposable on the person or the assessee, as the case may be, for any failure referred to in
certain provisions specified in the said section if he proves that there was reasonable cause
for such failure.
Sub-clause (a) seeks to amend the said section so as to make a reference to "section
272B" also for the above purpose.
Sub-clause (b) proposes to amend the said section of the Income-tax Act so as to
include a reference to "sub-section (1) of section 272BBB" also for the above purpose.
The proposed amendments are of consequential nature.
These amendments will take effect from 1 st June, 2002.
Clause 103 seeks to insert a new section 275B in the Income-tax Act to provide for
punishment for failure to comply with the provisions of clause (iib) of sub-section (1) of
section 132.
The proposed new section 275B seeks to provide that if any person who is required to
afford the necessary facility to the authorised officer to inspect any books of account or
other documents, as required under clause (iib) of sub-section (1) of section 132, fails to
afford such facility, he shall be punishable with rigorous imprisonment for a term which may
extend to two years and shall also be liable to fine.
This amendment will take effect from 1 st June, 2002.
Clause 104 seeks to amend section 279 of the Income-tax Act which provides for
prosecution to be at the instance of certain specified authorities.
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145
Under the existing provisions contained in sub-section (1) of the said section, pros-
ecution can be launched with the previous sanction of the Commissioner or Commissioner
(Appeals) or the Appropriate Authority. However, the Chief Commissioner or Director-
General may issue such instructions or directions to such authority as he may deem fit for
institution of the proceedings under that sub-section.
It is proposed to insert a new section 275B in the Income-tax Act vide clause 103 of the
Bill so as to provide that if any person, who is required to afford necessary facility to the
authorised officer to inspect any books of account and other documents referred to in sub-
section (1) of section 132, fails to offer such facility, he shall be punishable with rigorous
imprisonment for a term which may extend to two years and shall also be liable to fine.
It is proposed to insert a reference to "section 275B" in sub-section (1) of section 279
so as to provide that a person shall not be proceeded against for an offence under section
275B except with the previous sanction of the any of the authorities specified in the said
section.
This amendment will take effect from 1 st June, 2002.
Clause 105 seeks to amend rule 68A of the Second Schedule to the Income-tax Act
relating to acceptance of property in satisfaction of amount due from the defaulter.
Under the existing provisions contained in sub-rule (3) of the said rule, where the price
of the property agreed upon between the Assessing Officer and the defaulter under sub-rule
(1) exceeds the amount due from the defaulter, such excess shall be paid by the Assessing
Officer to the defaulter within a period of three months from the date of delivery of posses-
sion of the property to the Assessing Officer and where the Assessing Officer fails to pay
such excess within the period aforesaid, the Central Government is required to pay simple
interest at the rate of nine per cent, per annum to the defaulter on such amount for the period
of delay.
It is proposed to amend sub-rule (3) so as to reduce the rate of interest which is
payable by the Central Government under that sub-rule from nine per cent, to eight per cent,
per annum.
This amendment will take effect from 1 st June, 2002.
Wealth-tax
Clause 106 seeks to amend section 18 of the Wealth-tax Act relating to penalty for
failure to furnish returns, to comply with notices and concealment of assets, etc.
The provisions contained in sub-section (1) of the said section provide for levy of
penalty in cases of failure to comply with notices issued under sub-section (2) or sub-
section (4) of section 16 in the course of any proceedings under the Wealth-tax Act and in
cases wherein particulars of any assets have been concealed or inaccurate particulars of any
assets or debts have been furnished. Clause (A) of Explanation 2 to sub-section (1) pro-
vides that where a person fails to offer an explanation in respect of any facts material to the
computation of net wealth in his case, or offers an explanation which is found by the authori-
ties specified in the provision to be false, the amount added or disallowed in computing the
net wealth as a result thereof shall be deemed to represent the value of the assets in respect
of which particulars have been concealed.
It is proposed to amend the said clause so as to include a reference therein to the
Commissioner as being one of the authorities for the purposes of the clause.
This amendment will take effect from 1 st June, 2002.
Under the existing provisions contained in Explanation 3 to sub-section (1), if any
person who has not been assessed previously is found to have taxable net wealth for a year,
and fails to furnish a return for that year until the expiry of the period during which he was
assessable therefor, and no notice under sub-section (1) of section 17A requiring him to
furnish a return was issued to him, such person will be deemed to have concealed the
146
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[PART II—
particulars of his assets or furnished inaccurate particulars of his assets or debts for that
year.
It is proposed to omit the reference to the person who has not previously been as-
sessed under the said Explanation 3 so as to make its provisions applicable even to persons
who have been assessed earlier.
This amendment will take effect from 1st April, 2003.
Clause 107 seeks to amend section 18C of the Wealth-tax Act relating to procedure
when assessee claims identical question of law is pending before the High Court or the
Supreme Court.
The existing provisions contained in section 18C provide for a special procedure in
cases where an assessee claims that any question of law arising in his case for an assessment
year which is pending before the Assessing Officer or any appellate authority is identical
with a question of law arising in his case for another assessment year which is pending
before the High Court or before the Supreme Court on a reference under section 27 or in
appeal before the Supreme Court under section 29, In such cases, the assessee may furnish
a declaration that if the Assessing Officer or the appellate authority, as the case may be,
agrees to apply the final decision of the High Court or the Supreme Court on the question of
law to the relevant case, the assessee shall not raise such question of law in the relevant case
in appeal before any appellate authority or for a reference before the High Court or the
Supreme Court or in appeal before the Supreme Court.
Section 27 A relating to appeal to High Court was inserted in the Wealth-tax Act by the
Finance (No.2) Act, 1998. It is proposed to amend sub-section (1) of section 18C so as to
include therein references relating to "appeals to the High Court under section 27A", and
omit reference relating to "section 27" in sub-section (4) of section 18C.
This amendment is of consequential nature.
These amendments will take effect from 1 st June, 2002.
Clause 108 seeks to amend section 22D of the Wealth-tax Act relating to procedure on
receipt of an application under section 22C.
Under the existing provisions contained in section 22D, the Settlement Commission,
on receipt of an application for settlement under section 22C, shall call for a report from the
Commissioner having jurisdiction over the case. On the basis of the report of the Commis-
sioner and having regard to the nature, circumstances of the case or complexity of the
investigation involved therein, the Settlement Commission may pass an order either allowing
the application to be proceeded with or rejecting the same. Where an application is allowed
to be proceeded with, the Settlement Commission may direct the Commissioner to make such
ftuther enquiry or investigation as it considers necessary, and may call for the relevant
records from the Commissioner for its examination. After examining the relevant records and
the Commissioner's report and after giving an opportunity to the applicant of being heard the
Settlement Commission may pass such orders as it thinks fit on the matters covered by the
application and any other matter referred to in that section.
It is proposed to amend sub-section (1) of the said sub-section so as to provide that
the Settlement Commission shall, where it is possible, pass an order either rejecting the
application or allowing the application to be proceeded with within a period of one year from
the end of the month in which such application is made under section 22C.
It is further proposed to insert a new sub-section (4A) in the aforesaid section so as to
provide that in every application, the Settlement Commission shall, where it is possible, pass
an order under sub-section (4) within a period of four years from the end of the financial year
in which such application was allowed to be proceeded with.
These amendments will take effect from 1 st June, 2002.
Clause 109 seeks to omit section 22HA of the Wealth-tax Act relating to power of
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
147
Settlement Commission to send a case back to the Assessing Officer if the assessee does not
co-operate.
Under the existing provisions contained in section 22HA, the Settlement Commission
has been vested with the powers to send a case back to the Assessing Officer if in its opinion
the assessee has not co-operated in the proceedings before the Commission, and in such
cases, the Assessing Officer shall dispose of the case in accordance with the provisions of
the Act as if no application under section 22C had been made.
It is proposed to omit section 22HA so as to withdraw the power of Settlement Com-
mission to send the case back to the Assessing Officer.
This amendment will take effect from 1 st June, 2002.
Clause 110 seeks to amend section 34A of the Wealth-tax Act relating to refunds.
Under the existing provision contained in sub-s«ction (3) of the said section, where a
refund is due to the assessee in pursuance of an order referred to in sub-section (1) and the
Assessing Officer does not grant the refund within a period of six months from the date of
such order, the Central Government shall pay to the assessee simple interest at nine per cent,
per annum on the amount of refund due for the period specified in the said sub-section.
Sub-clause (a) seeks to amend the said sub-section (3) so as to reduce the rate of
interest from nine per cent, per annum to eight per cent, per annum.
Under the existing provision contained in clause (a) of sub-section (4B) of the said
section, where refund of any amount becomes due to the assessee under the said Act, he
shall be entitled to receive, in addition to the said amount, simple interest thereon calculated
at the rate of three-fourth per cent, for every month or part of a month for the period specified
in the said clause.
Sub-clause (b) seeks to amend the said clause (a) of sub-section (4B) so as to reduce
the rate of interest from three-fourth per cent, to two-third per cent, for every month or part
thereof, as the case may be.
These amendments will take effect from 1st June, 2002.
Expenditure-tax
Clause 111 seeks to amend section 3 of the Expenditure-tax Act so as to make the
provisions of the Act applicable to hotels wherein room charges for any unit of residential
accommodation are three thousand rupees or more per day, instead of two thousand rupees
or more per day per individual.
This amendment will take effect from 1st June, 2002 and will, accordingly, apply in
relation to expenditure incurred on or after that date.
Clause 112 seeks to amend section 5 of the Expenditure-tax Act relating to meaning of
chargeable expenditure.
Under the existing provisions contained in clause (1) of the said section, the expendi-
ture-tax is levied on chargeable expenditure incurred in, or payments made to, a hotel in
connection with the provision of any accommodation, residential or otherwise; or food or
drink; or any accommodation in such hotel on hire or lease; or any other services at the hotel
by way of beauty parlour, health club, swimming pool or other services.
It is proposed to omit clauses (b) and (d) so as to provide that chargeable expenditure
shall not include expenditure incurred in, or the payments made to, the hotel on or after the
1st June, 2002, in connection with the provision of food or drink by the hotel whether at the
hotel or outside, or by any other person at the hotel; or any other services at the hotel, either
by the hotel or by any other person, by way of beauty parlour, health club, swimming pool or
other services.
This amendment will take effect from 1st June, 2002 and will, accordingly, apply in
relation to expenditure incurred on or after that date.
148
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Customs
Clause 113 seeks to amend section 4 of the Customs Act so as to empower the "Board"
to appoint officers of customs and to delegate such powers to officers of customs not below
the rank of Assistant Commissioner of Customs.
Clause 114 seeks to amend section 14 of the Customs Act so as to—
(a) amend the condition under which the price is deemed to be the value under this
section;
(b) empower the Board,—
(i) to fix tariff values for any class of imported goods or export goods;
(ii) determine the rate of exchange,
and incorporate the definitions of the "foreign currency" and "Indian currency" as per
the provisions of the Foreign Exchange Management Act, 1999.
Clause 115 seeks to amend section 25 of the Customs Act, so as to empower the
Central Government to issue the notification or order to clarify the scope or applicability of
any exemption notification or order issued under that section within one year from the date
of issue of the notification or the order.
Clause 116 seeks to amend section 28AA of the Customs Act so as to reduce the
minimum rate of interest from eighteen per cent, to ten per cent on delayed payment of duty.
Clause 117 seeks to amend section 28AB of the Customs Act so as to reduce the
minimum rate of interest from eighteen per cent, to ten per cent, on delayed payment of duty.
Clause 118 seeks to omit the words "except in the case of a resident applicant" from
section 28-1 of the Customs Act so as to exclude all applications involving questions which
are already pending in the case of a resident applicant before any officer of Customs, the
Appellate Tribunal or any court or the same as in a matter already decided by the Appellate
Tribunal or any court from the purview of the Authority for Advance Rulings in Customs and
Central Excise.
Clause 119 seeks to unend section 47 of the Customs Act so as to increase the
duration of interest free duty payment from two days to five days and also to reduce the
minimum rate of interest from eighteen per cent, to ten per cent, on delayed payment of duty.
Clause 120 seeks to amend section 61 of the Customs Act so as to—
(i) empower the Commissioner of Customs to extend the period of warehousing in the
case of hundred per cent, export oriented undertaking for such further period as he may deem
fit; and
(ii) empower the Commissioner of Customs to extend the period of warehousing in any
other case for a period not exceeding six months and the Chief Commissioner of Customs to
extend it for such further period as he may deem fit.
Clause 121 seeks to amend section 129B of the Customs Act so as to—
(i) reduce the time period, from four years to six months, during which an application
for rectification of mistakes can be made;
(ii) provide for a time-limit of three years within which, where it is possible, appeal
should be decided by the Appellate Tribunal, and also to provide that in cases where stay
order has been passed by the Tribunal, time-limit of disposing of the appeal shall be one
hundred and eighty days and in the case of non-disposal of the case, automatic vacation of
the stay order has been provided.
Clause 122 seeks to amend section 129D of the Customs Act so as to reduce the
period of review of the order of the adjudicating authority from one year to six months where
it is possible.
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149
Clause 123 seeks to insert a new section 8C after section 8B in the Customs Tariff Act
so as to empower the Central Government to impose transitional product specific safeguard
duty on imports from the People's Republic of China.
Clause 124 seeks to exempt additional duty of customs on barge mounted power
plants retrospectively within the period from 8th December, 2000 to 28th February, 2002
(both the dates inclusive) and to refund accordingly the additional duty of customs col-
lected on such plants.
Clause 125 seeks to amend the First Schedule to the Customs Tariff Act so as to-
(a) reduce the basic customs duty in respect of articles falling under the following
Chapters, headings and sub-headings, namely:—
Chapters 1,2 (except sub-headings 0207.13 and 0207.14), 3,4" (except sub-headings
0402.10,0402.21,0405.10 and 0406.90), 5,6 (sub-headings 0603.10,0603.90,0604.10,0604.91
and 0604.99), 7 (except sub-heading 0713.10), 8 (except sub-headings 0801.11,0801.19,0802.11,
0802.12,0802.90,0805.10,0805.40,0805.50,0806.10,0808.10,0808.20,0809.40 and 081320),
9 (sub-headings 0903.00,0905.00,0906.10,0906.20,0908.10,0908,20,0909.10,0909.20,0909.30,
0909.40,0909.50,0910.10,0910.20,0910.30,0910.40,0910.50,0910.91 and 0910.99), 11 (except
sub-heading 1107.10), 12 (except sub-headings 12O3.Od; 1207.91,1209.91 and 1209.99), 13,14,
15 (sub-headings 1501.00,1503.00,1504.10,150420,1504.30,1505.00,1506.00,1516.10,1516.20,
1517.10,1517.90,1518.00,1520.00,1521.10,1521.90 and 1522.00), 16 (except sub-headings
1601.00 and 1602.32), 17 (except sub-headings 1701.11,1701.12,1701.91,1701.99 and 1704.10),
18,19 (except sub-headings 1901.10,1905.31 and 1905.32), 20 (except sub-headings2004.10,
2009.11,2009.12 and 2009.19), 21,22 (sub-headings 2201.10,2201.90,2202.10,2202.90,2207.10,
2207.20,2208.20,2208.30,2208.40,2208.50,2208.60,2208.70,2208.90 and 2209.00), 23,24,25
(sub-headings 2504.10,2504.90,2515.11,2515.12,2515.20,2516.11,2516.12,251621,2516.22,
2516.90,2519.10,2519.90,2523.10,2523.21,252329,2523.30 and 2523.90), 26 (sub-headings
2620.11,2620.19 and 2620.30), 27 (sub-headings 2705.00,2706.00,2707.10,2707.20,2707.30,
2707.50,2707.91,2707.99,2708.10,270820,2709.00,2710.11,2710.19,2710.91,2710.99,2712.10,
2712.20,2712.90,2713.11,2713.12,2713 20,2713.90 and 2715.00), 28 (except sub-headings
2801.20,2814.10,281420 and 2845.10), 29 (except sub-headings 2901.10,290121,290122,
290123,290124,290129,2902.11,2902.19,290220,2902.30,2902.41,2902.42,2902.43,2902.44,
2902.50,2902.60,2902.70,2902,90,2903.15,2903.21,2905.11,2905.31,2907.11,2910.30,291521,
2917.12,2917.36,2917.37,2918.12,2926.10,293321 and 2933.71), 30(except sub-heading
3006.60), 31 (except sub-headings 310221,3102.50,3104.30,310520,3105.30,3105.40,3105.51,
3105.59,3105.60and3105.90),32(exceptsub-headings 3201.10,3201.20and3201.90),33,34,
35,36,37 (sub-headings 3702.32.3702.39,3702.42,3702.43,3702.44,3707.10 and 3707.90), 38
(except sub-headings 3815.11,3815.12,3815.19,3815.90,3818.00 and 3823.70), 39,40 (except
sub-headings 4001.10,400121,400122,400129 and 4011.30), 42,43 (sub-headings 4303.10,
4303.90 and 4304.00), 44 (except sub-headings 4401.10,4401.21,4401.22,4401.30,4402.00,
4403.10,440320,4403.41,4403.49,4403.91,4403.92,4403.99,4404,10,440420,4405.00,4406.10,
4406.90,4407.10,4407.24,4407.25,440726,4407.29,4407.91,4407.92 and 4407.99), 45,46,48
(except sub-heading 4801.00), 50 (except sub-headings 5003.10 and 5003.90), 51 (sub-head-
ings 510 121,5101.30,5109.10,5109.90,5110.00 and 5113.00), 52 (sub-headings 5203.00,5207.90,
5208.11,5208.12,5208.13,5208.19,520821,520822,520823,520829,5208.31,5208.32,520833,
520839,5208.43,5208.49,5209.11,5209.12,5209.19,520921,520922,520929,520931,520932,
5209.39,5209.41,5209.43,5209.49,5210.11,5210.12,5210.19,5210.21,5210.22,5210.29,
521031,521032,5210.39,5210.42,5210.49,5211.11,5211.12,5211.19,521121.521122,521129,
521131,521132,521139,5211.41,5211.43,5211.49,5212.11,5212.12,5212.13,5212.14,5212.15,
521221,5212.22,5212.23 and 521225), 53,54 (sub-headings 5408.10 and 540821), 55 (sub-
headings5505.10,550520,5512.11,551221,5512.91,5513.11,5513.12,5513.13,5513.19,551321,
551322,551323,551329,5513.32,551333,551339,5513.42,5513.43,5513.49,5514.11,5514.12,
5514.13,5514.19,551421,551422,551423,551429,551431,551433,5514.42,5514.43,5514.49,
5515.12,5515.13,551521,5515.22,5515.91,5515.92,5516.11,5516.12,5516.13,551621,551622,
551623,551631,5516.32,551633,551634,5516.41,5516.42,5516.91,5516.92 and5516.94X 56
(sub-headings 5601.10,5608.11,5608.19,5608.90 and 5609.00), 57 (sub-headings 5701.10,
150
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[PART II—
5701.90,5702.10,570220,5702.31,5702.32,5702.39,5702.41,5702.42,5702.49,5702.51,570232,
5702.59,5702.91,5702.92,5702.99,5703.10,5703.20,5703.30,5703.90,5704.10,5704.90 and
5705.00), 58 (sub-headings 5801.10,580121,580122,580123,5801.24,5801.25,5801.26,5801.31,
5801.32,580133,5801.34,5801.36,5801.90,5802.20,5802.30,5803.10^803.90,5804.10,5804.21,
580429,5804.30,5805.00,5806.10,580620,5806.31,580639,5806.40,5808.10,5810.10,5810.91,
5810.92,5810.99 and 5811.00), 59 (sub-headings 5904.10,5904.90,5905.00,5906.10,5906.91,
5906.99,5907.00,5908.00,5909.00,591120,5911.31,5911.32,5911.40 and 5911.90), 60 (except
sub-headings 6001.92,6005.21,6005.22,6005.23,600524,6005.31,6005.32,6005.33,6005.34,
6005.41,6005.42,6005.43 and 6005.44), 61 (sub-headings 6101.10,6101.20,6101.30,6101.90,
6102.10,610220,^102.30,6102.90,6103.11,6103.12,6103.19,610321,610322,610323,6103.29,
6103.31,6103.32,6103.33,6103.39,6103.41,6103.42,6103.43,6103.49,6104.11,6104.12,6104.13,
6104.19,610421,610422,610423,610429,6104.31,6104.32,6104.33,6104.39,6104.41,6104.42,
6104.43,6104.44,6104.49,6104.51,6104.52,6104.53,6104.59,6104.61,6104.62,6104.63,6104.69,
6105.10,610520,6105.90,6106.10,610620,6106.90,6107.11,6107.12,6107.19,610721,610722,
610729,6107.91,6107.92,6107.99,6108.11,6108.19,610821,610822,610829,6108.31,6108.32
,6108.39,6108.91,6108.92,6108.99,6109.10,6109.90,6110.11,6110.12,6110.19,611020,611030,
6110.90,6111.10,611120,6111.30,6111.90,6112.11,6112.12,6112.19,611220,6112.31,6112.39,
6112.41,6112.49,6113.00,6114.10,611420,6114.30,6114.90,6115.11,6115.12,6115.19,6115.20,
6115.91,6115.92,6115.93,6115.99,6116.10,6116.91,6116.92,6116.93,6116.99,6117.10,611720,
6117.80 and6117.90), 62 (sub-headings 6201.11,6201.12,6201.13,6201.19,6201.91,6201.92,
6201.93,6201.99,6202.11,6202.12,6202.13,6202.19,6202.91,6202.92,6202.93,6202.99,6203.11,
6203.12,6203.19,620321,620322,620323,620329,6203.31,6203.32,6203.33,6203.39,6203.41,
6203.42,6203.43,6203.49,6204.11,6204.12,6204.13.6204.19,620421,620422,620423,620429,
6204.31,6204.32,6204.33,6204 39,6204.41,6204.42,6204.43,6204.44,6204.49,6204.51,6204.52,
6204.53,6204.59,6204.61,6204.62,6204.63,6204.69,6205.10,620520,6205.30,6205.90,6206.10,
620620,620630,6206.40,6206.90,6207.11,6207.19,620721,620722,620729,6207.91,6207.92,
6207.99,6208.11,6208.19,620821,620822,620829,6208.91,6208.92,6208.99,6209.10,620920,
620930,6209.90,6210.10,621020,6210.30,6210.40,6210.50,6211.11,6211.12,621120,6211.31,
621132,6211.33,6211.39,6211.41,6211.42,6211.43,6211.49,6212.10,621220,621230,6212.90,
6213.10,621320,6213.90,6214.10,621420,621430,6214.40,6214.90,6215.10,621520,6215.90,
6216.00,6217.10,6217.90,63 (except sub-headings 6310.10 and 6310.90), 64,65,66,67,68,69
(except sub-headings 6902.10,690220,6902.90,6903.10,690320 and 6903.90), 70 (except sub-
headings 7019.19and 7019.51), 71,73,74,75(sub-headings 7508.10 and 7508.90X76,78,79,80,
81 (except sub-headings 8104.11 and 8104.19), 82,83,84 (sub-headings 840731,8407.32,
840733,8407.34,840820,8409.91,8409.99,841430,8414.51,8414.59,8414.80,8414.90,8415.10,
841520,8415.81,8415.82,8415.83,8415.90,841821,841822,841829,8418.91,8418.99,8422.11,
8422.19,8422.90,8423.10,8448.19,8450.11,8450.12,8450.19,845020,8450.90,8451.10,8451.90,
8452.10,8452.90,8469.12,846920,846930,8472.10,847220,847230,8472.90,8473.10,8473.40,
8473.50,8479.50,8479.60,8479.89, 848110,848220,848230,8482.40,8482.50,8482.80,8482.91,
8482.99,8483.20,8485.10and 8485.90), 85(sub-headings 8504.10,8506.10,850630,8506.40,
8506.50,8506.60,8506.80,8506.90,8507.10,850720,8507.30,8507.40,8507.80,8507.90,8509.10,
850920,850930,8509.40,8509.80,8509.90.8510.10,851020,851030,8510.90,8511.10,8511.20,
851130,8511.40,8511.50,8511.80,8511.90,8512.10,8512.20,851230,8512.40,8512.90,8513.10,
8513.90,8516.10,851621,851629,851631,851632,8516.33,8516.40,8516.50,8516.60,8516.71,
8516.72,8516.79,8516.80,8518.10,851821,851822,851829,851830,8518.40,8518.50,8519.10,
851921,851929,851931,851939,8519.40,8519.92,8519.93,8519.99,8520.10,852032,8520.33,
852039,8520.90,8521.10,8521.90,8522.10,8522.90,8523.11,8523.12,8523.13, 852320,8523.30,
8523.90,8524.10,852431,8524.32,8524.39,8524.40,8524.51,8524.52,8524.53,8524.60,8524.91,
8524.99,8525.30,8525.40,8526.10,8526.91,8526.92.8527.12,8527.13,8527.19,8527.21,8527.29,
8527.31,852732,852739,8527.90, 8528.12,8528.13,852821,852822,852830,8531.10,8531.80,
8531.90,8536.10,853620,8536.30,8536.41,8536.49,8536.50,8536.61,8536.69,8536.90,8537.10,
8538.10,8538.90, 8539.10,853921,853922,8539.29,853931,853932,8539.39,8539.41,8539.49,
8539.90,8540.11,8540.91,8543.40,8543.89,8544.11,8544.19,854420,854430,8544.41,8544.49,
8544.51,8544.59,8544.60,8548.10 and 8548.90), 86 (except sub-headings 8607.11,8607.12,
8607.19,860721,8607.29,8607.30,8607.91,8607.99 and 8608.00), 87 (except sub-headings
SEC 2]
THE GAZETTE OF INDIA EXTRAORDINARY
151
8703.10,8703.21,8703.22,870323,8703.24,8703.31,8703.32.8703.33,8703.90 8710.00,8711.10,
8711.20,8711.30,8711.40,8711.50 and 8711.90), 88(sub-headings 8801.90,8802.60,8803.90,
8804.00,8805.10,8805.21 and 8805.29), 89 (except sub-headings 8902,00,8904.00,8905.10.
8905.90,8906.10, 8906.90 and 8908.00), 90 (sub-headings 9001.10,9001.20,9001.30,9001.40,
9001.50,9001.90,9002.11,9002.19,900220,9002.90,9003.11,9003.19,9003.90,9004.10,9004.90,
9005.10,9005.80,9005.90,9006.10,9006.20,9006.30,9006.40,9006.51,9006.52,9006.53,9006.59,
9006.61,9006.62 9006.69,9008.10,9008.20,9008.30,9008.40,9009.12,900922,9009.30 9010.60
9022.19,902229,9022.30,9022.90and9026.90),91 (sub-headings 9101.11,9101.12,9101.19,
910121,910129,9101.91,9101.99,9102.11,9102.12,9102.19,910221,910229,9102.91,9102.99,
9103.10,9103.90,9104.00,9105.11,9105.19,910521,9105.29,9105.91,9105.99,9106.10,9106.20,
9106.90,9107.00,9111.10,9111.20,9111.80,9111.90,9112.20,9112.90,9113.10,9113.20 and
9113.90), 92,93,94,95 (except sub-headings 9506.11,9506.12,9506.19,9506.21,9506.29,
9506.31,9506.32,9506.39,9506.40,9506.51.9506.59,9506.61,9506.62,9506.69,9506.70,9506.91,
9506.99,9507.10,9507.20,9507.30 and 9507.90), 96 and 97 (except sub-heading 9704.00) and
98(sub-headings 9802.00,9804.10,9804.90,9805.10, and 9805.90);
(b) increase the basic customs duty in respect of articles falling under the following
Chapters, headings and sub-headings, namely:—
Chapters 9 { sub-headings 0901.11,0901.12,090121,0901.22,0901.90,0902.10,0902.20,
0902.30,0902.40,0904.11,0904.12,090420,0907.00 and 0908.30), 12 (sub-heading 1207.91), 29
(sub-heading 2902.43), 40 (sub-heading 4001.10), 72 (except sub-headings 7201.10,720120,
7201.50,7202.11,7202.19,7202.21,7202.29,7202.30,7202.41,7202.49,7202.50,7202.60,7202.70,
7202.80,7202.91,7202.92,7202.93 and 7202.99) and 89 (sub-heading 8908.00);
(c) reduce the basic customs duty, for preferential areas in respect of articles falling
under the following Chapters, headings and sub-headings, namely:—
Chapters 8 (except sub-headings 0801.11,0801.19,0801.31,0802.12,0802.90,0805.10,
0805.50, 0806.10,0808.10,0809.40,0810.60 and 0810.90), 9 (sub-headings 0903.00,0906.10,
0906.20, and 0908.10), 12 (sub-headings 1201.00,1202.10,1202.20,1204.00,1205.10,1205.90,
1206.00,1207.10,1207.20,1207.30,1207.40,1207.50,1207.60 and 1207.99), 13 (sub-heading
130120). 25 (sub-headings 2504.10 and 2504.90), 29 (sub-headings 2936.10,2936.21,293622,
293623,293624,293625,293626,2936.27,293628,293629,2936.90,2937.11,2937.12,2937.19,
2937.21,293722,293723,293729,2937.31,2937.39,2937.40,2937.50,2937.90,2939.41,2939.42,
2939.43,2939.49,2939.51,2939.59,2941.10,294120,2941.30,2941.40,2941.50 and2941.90), 30
(except sub-headings 3005.10,3005.90,3006.10,300620,3006.30,3006.40,3006.50,3006.60,
3006.70 and 3006.80), 34 (sub-headings 3402.11,3402.12,3402.13 and 3402.19) and 38 (sub-
headings 3801.10,3802.10 and 3812.10);
(d) increase the basic customs duty, for preferential areas, in respect of articles falling
under the following Chapters, headings and sub-headings, namely:—
Chapters 5 (sub-heading 0507.10), 7,8 (sub-headings 0802.90,0806.10,0808.10,0810.60
and 0810.90), 9 (sub-headings 0901.11,0901.12,090121,090122,0901.90,0902.10,090220,
0902.30,0902.40,0904.11,0904.12,0907.00, and 0908.30), 12 (sub-heading 1207.91) and 15
(sub-headings 1507.10,1507.90,1508.10,1508.90,1509.10,1509.90,1510.00,1511.10,1511.90,
1512.11,1512.19,151221,151229,1513.11,1513.19,151321,151329,1514.11,1514.19,1514.91,
1514.99,1515.11,1515.19,151521,151529,1515.30,1515.40,1515.50 and 1515.90).
Excise
Clause 126 seeks to amend section 2 of the Central Excise Act so as to empower the
Central Government to specify, by notification in the Official Gazette, any activity in relation
to any goods as amounting to manufacture.
Clause 127 seeks to amend section 3 of the Central Excise Act so as to change the
definition of "free trade zone" to exclude reference to Kandla FTZ and SEEPZ which have
now become Special Economic zone.
Clause 128 seeks to amend section 5 A of the Central Excise Act, so as to empower the
Central Government to issue the notification or order to clarify the scope or applicability of
152
THE GAZETTE OF INDIA EXTRAORDINARY
[PARTH—
any exemption notification or order issued under this section within one year from the date of
issue of the notification or the order.
Clause 129 seeks to amend section 11A A of the Central Excise Act so as to reduce the
minimum rate of interest from eighteen per cent, to ten per cent, on delayed payment of duty.
Clause 130 seeks to amend section HABofthe Central Excise Act so as to reduce the
minimum rate of interest from eighteen per cent, to ten per cent, on delayed payment of duty.
Clause 131 seeks to omit sections 16 and 17 of the Central Excise Act as these provi-
sions are no longer required.
Clause 132 seeks to omit the words ''except in the case of a resident applicant" from
section 23D of the Central Excise Act so as to exclude the application involving question
which is already pending in the applicant's case before any officer of customs, the Appellate
Tribunal or any court or the same as in a matter already decided by the Appellate Tribunal or
any court from the purview of the Authority for Advance Rulings in Customs and Central
Excise.
Clause 133 seeks to omit Chapter IV of the Central Excise Act as these provisions are
no longer required.
Clause 134 seeks to amend section 35C of the Central Excise Act so as to—
(i) reduce the time period, from four years to six months, during which an application
for rectification of mistakes can be made;
(ii) provide for a time-limit of three years within which, where it is possible, appeal
should be decided by the Appellate Tribunal, and also to provide that in cases where stay
order has been passed by the Tribunal, time-limit of disposing of the appeal shall be one
hundred and eighty days and in the case of non-disposal of the case, automatic vacation of
the stay order has been provided.
Clause 135 seeks to amend section 35E of the Central Excise Act so as reduce the
period of review of the order of the adjudicating authority from one year to six months where
it is possible.
Clause 136 seeks to exclude crude petroleum oil based goods from the exemption
applicable to industrial units in the North-East, in the manner specified in the Third Schedule
with retrospective effect.
Clause 137 seeks to amend notification issued under rule 57AK of the Central Excise
Rules, 1944 in the manner as specified in the Third Schedule with retrospective effect.
Clause 138 seeks to amend the First and Second Schedules of the Central Excise Tariff
Act:
Sub-clause (i) seeks to amend the said First Schedule so as to—
(a) decrease the excise duty in respect of goods falling under the following Chapter
and sub-heading No., namely:—
Chapter 9 (sub-heading No. 0902.00);
(b) increase the excise duty in respect of goods falling under the following Chapters,
heading No. and sub-heading Nos., namely:—
Chapters 24 (sub-heading Nos. 2402.00,2403.31 and 2403.32), 30 (sub-heading No.
3004.10), 40 (sub-heading Nos. 4011.10 and 4013.10), 44 (sub-heading Nos. 4410.19 and
4410.90), 48 (sub-heading Nos. 4820.00,4821.00 and 4823.20), 59 (sub-heading No. 5906.10),
61 (sub-heading Nos. 6101.00 and 6102.00), 66 (sub-heading Nos. 6601.00 and 6602.00), 68
(sub-heading No. 6807.20), 70 (sub-heading Nos. 7011.10 and 7012.10), 73 (sub-heading No.
7326.21), 74 (sub-heading No. 7418.10), 82 (sub-heading No. 8215.00), 84 (sub-heading Nos.
8413.11,8413.12,8413.13,8413.14,841320,8413.91,8414.10,841420,8414.91,848120,8481.92
and 8483.10), 85 (sub-heading No. 8524.32), 87 (sub-heading No. 8712.00), 90 (sub-heading
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
153
Nos. 9018.00,9019.00and9022.10), 94(sub-headingNos.9405.10,and9406.00), and95(sub-
headingNos. 9501.00,9502.00 and 9503.00);
(c) amend the Chapter Notes and the tariff descriptions so as to—
(i) insert Chapter Note 4 to Chapter 17 so as to define "manufacture" in relation to
products of heading No. 17.02;
(ii) insert in Chapter 36, a new sub-heading 3605.10 so as to specify the rate of excise
duty on Bengal Lights at 16%;
(iii) delete reference to Central Excise Rules, 1944 which have been rescinded with
effect from the 1 st July, 2001 in Chapter 40;
(iv) incorporate the Central Excise (Removal of Goods at Concessional Rate of Duty for
Manufacture of Excisable Goods) Rules, 2001 which have superseded the relevant provi-
sions of the Central Excise Rules, 1944 with effect from the 1 st July, 2001 in the sub-heading
Notes in Chapter 48;
(v) insert Chapter Notes 3 and 4 to Chapter 61 so as to define "brand name" and to
specify that certain processes amount to manufacture respectively;
(vi) insert Chapter Note 4 to Chapter 73 so as to provide that the process of galvaniza-
tion amounts to "manufacture".
Sub-clause (ii) seeks to amend the said Second Schedule so as to omit heading Nos.
25.02,33.04,33.05,33.07,43.01, 89.03,89.07,93.02,93.03,93.04,93.05,93.06,93.07and96.05.
Clause 139 seeks to amend the First Schedule to the Additional Duties of Excise
(Goods of Special Importance) Act so as to increase the duty on goods falling under sub-
heading Nos. 520720,5208J20,5209.10,5406.10,5407.10,5511.10,5512.10,5513.10,5514.10,
5801.21,5801.31,5802.21,5802.31,6002.10 and 6002.20.
Clause 140 seeks to levy Special Additional Duties of Excise as a duty of excise on
goods specified in the Eighth Schedule, for the purposes of Union, at the rate specified
therein.
Clause 141 seeks to amend section 65 of the Finance Act, 1994 so as to give retrospec-
tive effect from the 16th July, 2001 to such date as appointed by the Central Government
under clause 141, for the purpose of that section, to the specified provisions of section 65 of
the said Act relating to levy and collection of service tax on the service rendered by a
broadcasting agency or organisation.
Clause 142 seeks to amend Chapter V of the Finance Act, 1994 relating to levy of
service tax.
Sub-clauses (a), (b) and (c) seek to substitute sections 65 and 66 and amend section 67
of the said Act, so as to levy (he tax on services rendered by—
(/) a beauty parlour relating to beauty treatment service;
(II) a cable operator in relation to cable services;
(Hi) a cargo handling agency in relation to cargo handling;
(rv) a dry cleaner in relation to dry cleaning;
(v) an event manager in relation to event management;
(vi) a fashion designer in relation to fashion designing;
(vii) a health club and a fitness centre in relation to health and fitness services;
(viii) an insurer in relation to life insurance business;
(«) a storage or warehouse-keeper in relation storage and warehousing of goods;
(x) a rail travel agent in relation to booking of a passage for travel by rail;
154
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II—
(xi) an actuary or intermediary or insurance intermediary or insurance agent, in relation
to insurance auxiliary services concerning life insurance business;
(xii) a body corporate (other than banking company or a financial institution including
non-banking financial company), in relation to banking and financial service.
Service tax is sought to be levied on the above services at the rate of five per cent, on
the gross amount charged to the client or customer or subscriber or policy-holder or any
other person, as the case may be, provided by the service provider.
Sub-clause (d) seeks to amend section 73 of the said Act so as to define the words
"relevant date" for the purposes of that section for computation of time-limit for issue of
show-cause notice, in cases where periodic return is filed, or not filed, assessment is provi-
sional, and where any sum has erroneously been refunded. It also seeks to increase limitation
period for issuing show-cause notice from six months to one year.
Sub-clause (e) seeks to amend section 75 of the said Act so as to prescribe the interest
at the rate of fifteen per cent, per annum on delayed payment of service tax.
Sub-clause (/) seeks to amend section 78 of the said Act to empower the Assistant
Commissioner of Central Excise or Deputy Commissioner of Central Excise to adjudicate
penalty in cases where the value of taxable service suppressed or concealed or inaccurate
value does not exceed two lakh rupees, without the prior approval of the Commissioner of
Central Excise.
Sub-clause (g) seeks to amend section 82 of the said Act so as to authorise Assistant
Commissioner of Central Excise or Deputy Commissioner of Central Excise to seize the docu-
ments or books or things.
Sub-clause (A) seeks to amend section 83 of the said Act so as to make applicable
section 1 ID of the Central Excise Act, 1944 in relation to service tax.
Sub-clause (/) seeks to amend section 94 of the said Act so as to empower the Central
Government to make rules to provide the credit of service tax paid on the services consumed
for providing a taxable service in cases where the services consumed and service provided
fall in the same category of taxable service.
Sub-clause (/) seeks to substitute section 95 in the said Act so as to empower the
Central Government to issue orders to remove difficulty arises in respect of implementing or
assessing the value any taxable service incorporated in Chapter V of this Bill, within a period
of two years from the date on which the levy of service tax on the taxable service came into
force.
Clause 143 seeks to substitute clause (g) of section 2 of the Central Sales Tax Act,
1956 the definition of "sale" to widen the scope of the term "sale" in view of clause (29 A) of
article 366 of the Constitution.
Clause 144 seeks to amend section 6 A of the Central Sales Tax Act, 1956 so as to make
compulsory the furnishing of Form F by the dealer and to authorise levy of tax in case where
the dealer fails to furnish Form F.
Clause 145 seeks to amend section 8 of the Central Sales Tax Act, 1956 so as to—
(0 provide that central sales tax does not become greater than local sales tax in case of
sale of goods to the Government and registered dealers;
00 provide for exemption from central sales tax in cases where goods are exempt from
local sales tax;
(WO make furnishing of Form C compulsory by the dealer except in respect of exempted
goods;
(/v) include "telecommunicatio network" in the category of goods which can be
specified in certificate of registration for the purposes of levy of tax, etc.;
SEC. 2]
THE GAZETTE OF INDIA EXTRAORDINARY
155
(v) withdraw powers of the State Governments to waive the requirement of C Form.
Clause 146 seeks to amend clause (a) of section 15 of the Central Sales Tax Act, 1956
with a view to allowing the State Governments to impose tax on declared goods at more than
one stage in respect of sales of declared goods.
Clause 147 seeks to substitute the First Schedule to the Indian Post Office Act, 1898
so as to provide for the introduction of new Meghdoot Post Card and its rate of postage and
for the revision of rates of postage for certain inland postal services, namely, letters, letter-
cards, printed post cards, competition post cards, book, pattern and sample packets and
parcels.
These revised rates will be effective from a date notified by the Central Government
after this Bill is passed.
Clause 148 seeks to omit section 43 A of the Life Insurance Corporation Act, 1956.
Section 43A of the said Act provides that no deduction of income-tax shall be made on
any interest or dividend payable to the Life Insurance Corporation of India in respect of any
securities or shares owned by it or in which it has full beneficial interest.
It is proposed to omit the said section.
This amendment will take effect from 1 st June, 2002.
Clause 149 seeks to omit section 35 A of the General Insurance Business (Nationalisa-
tion) Act, 1972.
Section 35 A of the said Act provides that no deduction of income-tax shall be made on
any interest or dividend payable to the General Insurance Corporation of India or to any of
the four new companies formed by virtue of the schemes framed under sub-section (1) of
section 16 of the said Act in respect of any securities or shares owned by such Corporation
or such company or in which such Corporation or such company has full beneficial interest.
It is proposed to omit the said section.
This amendment will take effect from 1 st June, 2002.
Clause 150 seeks to omit section 22A of the Oil Industry (Development) Act, 1974.
Section 22A of the said Act provides that notwithstanding anything contained in the
Income-tax Act, 1961, the Oil Industry Development Board shall not be liable to pay income-
tax on its income, profits or gains.
It is proposed to omit the said section so as to make the Oil Industry Development
Board liable to pay income-tax on its income, profits or gains.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
Clause 151 seeks to amend the Schedule to the Oil Industries (Development) Act, 1974
so as to increase the cess levied on crude oil.
Clause 152 seeks to omit section 44 of the National Dairy Development Board Act,
1987.
Section 44 of the said Act provides that notwithstanding anything contained in the
Income-tax Act, 1961 or any other enactment for the time being in force relating to tax on
income, profits or gains, the National Dairy Development Board shall not be liable to pay
income-tax or any other tax in respect of its income, profits or gains derived.
It is proposed to omit the said section so as to make the National Dairy Development
Board liable to pay income-tax or any other tax in respect of its income, profits or gains
derived.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
156
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[PART II—
Clause 153 seeks to omit section 22 of the Prasar Bharati (Broadcasting Corporation of
India) Act, 1990.
Section 22 of the said Act provides that notwithstanding anything contained in the
Income-tax Act, 1961, or any other enactment for the time being in force relating to income-tax
or any other tax on income, profits or gains, the Prasar Bharati (Broadcasting Corporation of
India) shall not be liable to pay any income-tax or any other tax in respect of any income,
profits or gains, accruing or arising out of the Fund of the Corporation or any amount
received in that Fund; and any income, profits or gains, derived or any amount received, by
the Corporation.
It is proposed to omit the said section so as to make the Prasar Bharati (Boradcasting
Corporation of India) liable to pay income-tax or any other tax in respect of any income,
profits or gains accruing or arising out of its Fund or any amount received in that Fund and
any income, profits or gains derived or any amount received by it.
This amendment will take effect from 1st April, 2003 and will, accordingly, apply in
relation to the assessment year 2003-2004 and subsequent years.
SEC. 2]
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157
MEMORANDUM REGARDING DELEGATED LEGISLATION
Sub-clause (h) of clause 4 of the Bill seeks to insert a new sub-clause (viic) in clause
(IOC) of section 10 of the Income-tax Act relating to incomes not included in total income.
The amendment proposed by this clause empowers the Central Government to specify, by
notification in the official Gazette, an institution, having importance throughout India or in
any State or States for the purposes of the said sub-clause.
Clause 14 of the Bill seeks to amend section 32 of the Income-tax Act relating to
depreciation.
Sub-clause (a) seeks to amend sub-section (1) of the said section to provide for amend-
ments of consequential nature.
Sub-clause (b) seeks to insert a new clause (iia) in sub-section (1) of the said section to
provide that in the case of any new machinery or plant (other than ships and aircraft), which
has been acquired and installed after 31st March, 2002, by an assessee engaged in the
business of manufacture or production of any article or thing, a further sum equal to fifteen
per cent, of the actual cost of such machinery or plant shall be allowed as deduction under
clause (ii). Such fifteen per cent, shall be allowed to a new industrial undertaking during any
previous year in which such undertaking begins to manufacture or produce any article or
thing on or after 1st April, 2002; or any industrial undertaking existing before
1st April, 2002, during any previous year in which it achieves the substantial expansion by
way of increase in installed capacity by not less than twenty-five per cent. However, no
deduction shall be allowed in respect of any machinery or plant which, before its installation
by the assessee, was used either within or outside India by any other person; or any machin-
ery or plant installed in any office premises or any residential accommodation, including
accommodation in the nature of a guest house; or any office appliances or road transport
vehicles; or any machinery or plant, the whole or part of the actual cost of which is allowed
as a deduction (whether by way of depreciation or otherwise) in computing the income
chargeable under the head "Profits and gains of business or profession" of any one previ-
ous year.
It is further proposed to provide that no deduction shall be allowed under clause (A)
or, as the case may be, clause (B), of the first proviso unless the assessee furnishes the
details of machinery or plant and increase in the installed capacity of production in such
form, as may be prescribed, along with the return of income, and the report of an accountant,
as defined in the Explanation below sub-section (2) of section 288 certifying that the deduc-
tion has been correctly claimed in accordance with the provisions of this clause.
It is also proposed to confer power upon the Central Board of Direct Taxes to specify,
by rules, the form in which the details of machinery or plant and increase in the installed
capacity of production shall be furnished for the purposes of availing further sum equal to
fifteen per cent, for depreciation.
Clause 32 of the Bill seeks to amend section 80-IA of the Income-tax Act relating to
deductions in respect of profits and gains from industrial undertakings or enterprises en-
gaged ia infrastructure development, etc. so as to require a company or a co-operative
society to furnish a separate audit report for claiming deductions under sections 80-IA and
80-IB.
The amendment proposed by this clause confers power upon the Central Board of
Direct Taxes to prescribe, by rules, the form and manner in which the assessee shall furnish
a report of audit in order to claim the deductions.
Clause 33 of the Bill seeks to amend section 80-IB of the Income tax Act relating to
deduction in respect of profits and gains from certain industrial undertakings, other than
158
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[PART II—
infrastructure development undertakings, by inserting two new sub-sections (7A) and (7B)
and amending sub-section (14) of that section.
Sub-section (7 A) seeks to provide a deduction from profits and gains of the business
of building, owning and operating a multiplex theatre. Sub-section (7B) seeks to provide a
deduction from profits and gains of the business of building, owning and operating a con-
vention centre. The definitions of such multiplex theatre and convention centre are provided
in the proposed amendment to sub-section (14).
The amendments proposed by this clause confer power upon the Central Board of
Direct Taxes to prescribe, by rules, the form and manner in which the assessee shall have to
furnish a report of audit to claim deduction under sub-sections (7 A) and (7B).
The amendments also confer power upon the Central Board of Direct Taxes to pre-
scribe, by rules, in case of a convention centre, the area of the building, the size and number
of convention halls and other facilities and amenities; and, in case of a multiplex theatre, the
area of the building, the size and the number of cinema halls and commercial shops and other
facilities and amenities.
Clause 36 of the Bill seeks to substitute section 89 of the Income-tax Act relating to
relief when salary, etc. is paid in arrears or in advance so as to include arrears of family
pension, for the purpose of this relief.
The amendment proposed by this clause confers power upon the Central Board of
Direct Taxes to prescribe, by rules, the form and manner of application to be made to the
Assessing Officer, for grant of such relief.
Clause 56 of the Bill seeks to amend section 139 of the Income-tax Act relating to return
ofincome.
Sub-clause (a) seeks to insert a new sub-section (1 A) in section 139 so as to provide
that any person, being an individual, who is in receipt ofincome chargeable under the head
"Salaries", may, at his option, furnish a return of his income for any previous year to his
employer, in accordance with such scheme and subject to^such conditions as may be speci-
fied by the Board, and such employer shall furnish all returns ofincome received by him on
or before the due date, in such form and manner as may be specified in that scheme, and in
such case, the return furnished by any employee to his employer shall be deemed to be a
return furnished under sub-section (1) of that section.
It is proposed to confer power upon the Central Board of Direct Taxes to specify the
scheme in this behalf
Sub-clause (b) seeks to insert a new sub-section (4C) in section 139 so as to provide
that every scientific research association referred to in clause (21), news agency referred to
in clause (22B), association or institution referred to in clause (23 A), institution referred to in
clause (23B), fund or institution referred to in sub-clause (iv) or trust or institution referred to
in sub-clause (v) or any university or other educational institution referred to in sub-clause
(vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C),
trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause
(24), of section 10, shall, if the total income in respect of which such scientific research
association, news agency, association or institution, fund, trust, institution, university or
other educational institution, hospital or other medical institution or trade union is assess-
able, without giving effect to the provisions of. section 10, exceeds the maximum amount
which is not chargeable to income-tax, furnish a return of such income of the previous year
in the prescribed form and verified in the prescribed manner and setting forth such other
particulars as may be prescribed and all the provisions of this Act shall, so far as may be,
apply as if it were a return required to be furnished under sub-section (1) of section 139.
The proposed new sub-section (4C) empowers the Central Board of Direct Taxes to
prescribe, by rules, the form and manner of verification of, and the particulars to be set forth
in, the return to be furnished by persons specified in that sub-section.
SEC. 2]
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159
Clause 85 seeks to amend section 200 of the Income-tax Act relating to duty of person
deducting tax.
It is proposed to insert a new sub-section (2) in the said section so as to provide that
any person being an employer, referred to in sub-section (1 A) of section 192, shall pay the
tax, within the prescribed time to the credit of the Central Government or as the Central Board
of Direct Taxes directs.
The proposed amendment confers power upon the Central Board of Direct Taxes to
prescribe, by rules, the time within which such tax is to be paid.
Clause 87 seeks to amend section 203 of the Income-tax Act relating to furnishing of
certificate for tax deducted.
It is proposed to insert a new sub-section (2) in the said section so as to provide that
every person referred to in sub-section (1A) of section 192 shall, within the prescribed
period, furnish to the person in respect of whose income such payment of tax has been made,
a certificate to the effect that tax has been paid to the Central Government, and specify the
amount so paid, the rate at which the tax has been paid and such other particulars as may be
prescribed.
The proposed amendment confers power upon the Central Board of Direct Taxes to
prescribe, by rules, the period within which such tax is to be paid and the form of the
certificate specifying the amount of tax deducted, the rate at which the tax is to be deducted
and other particulars,
Clause 88 seeks to insert a new section 206CA in the Income-tax Act relating to tax-
collection account number.
Under the existing provisions contained in section 206C, every person, being a seller
shall, at the time of debiting of the amount payable by the buyer to the account of the buyer
or at the time of receipt of such amount from the said buyer in cash or by the issue of a
cheque or draft or by any other mode, collect from the buyer a sum equal to the percentage
specified in the Table under sub-section (1) of that section.
The proposed new section seeks to provide that every person collecting tax at source
in accordance with the provisions of section 206C shall apply to the Assessing Officer for
the allotment of a tax-collection account number. It is further proposed that such tax-collec-
tion account number shall be quoted in all challans for payment of any sum under sub-
section (3), in all certificates furnished under sub-section (5), in all the returns delivered
under sub-section (5A) or sub-section (5B) of section 206C and in all other documents
pertaining to such transactions which may be specified by the Central Board of Direct Taxes
by rules to be made in this behalf.
It is proposed to confer power upon the Central Board of Direct Taxes to prescribe, by
rules, the form and the time within which such application shall be made to the Assessing
Officer for the allotment of a tax collection account number.
Clause 115 of the Bill seeks to amend section 25 of the Custom Act, 1962. The amend-
ment proposed by this clause confers powers upon the Central Government to insert an
explanation for the purpose of clarifying the scope or applicability of any notification issued
under sub-section (1) or order issued under sub-section (2), as the case may be, by notifica-
tion in the Official Gazette at any time within one year of issue such notification or order, as
the case may be.
Clause 123 of the Bill seeks to insert a new section 8C in the Custom Tariff Act, 1975.
This clause empowers the Central Government, by notification in the Official Gazette, to
impose transitional product specific safeguard duty on imports from the People's Republic
of China and make rules for the purpose of this new section 8C.
Clause 128 of the Bill seeks to amend section 5A of the Central Excise Act, 1962. The
amendment proposed by this clause confers powers upon the Central Government to insert
160
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[PART II—SEC. 2]
an explanation for the purpose of clarifying the scope or applicability of any notification
issued under sub-section (1) or order issued under sub-section (2), as the case may be, by
notification in the Official Gazette at any time within one year of issue such notification or
order, as the case may be.
Clause 142 of the Bill seeks to amend sub-section (2) of section 94 of the Finance Act,
1994. This clause empowers the Central Government to make rules for the purpose of the
credit of service tax paid on the services consumed for providing a taxable service in case
where the services consumed and the service provided fall in the same category of taxable
service and sub-clause (j) of the Bill seeks to substitute section 95 of the said Act which
empowers the Central Government to issue order for removal of any difficulty which may
arise in giving effect to any taxable service incorporated in Chapter V by the Finance Act,
2002 and also further provides that every order so published shall be laid before each House
ofParliament.
The matters in respect of which notification may be issued or rules may be made in
accordance with the aforesaid provisions of the Bill are matters of procedure and detail and
it is not practicable to provide for them in the Bill itself.
The delegation of legislative power is, therefore, of a normal character.
G.C.MALHOTRA,
Secretary-General.
PRINTED BY THE MANAGER, GOVERNMENT OF INDIA PRESS (PLU), MINTO ROAD, NEW DELHI
AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI, 2 0 0 2 .
MOIP(PLU)MRND—5217QI—28.03.2002.