INDIRECT TAX LAWSAMENDMENT MADE BY FINANCE ACT, 2012
Applicable for June 2013 and December 2013 Examinations Page 1
A. EXCISE
AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944
(1) Incorporation of definition of “inter-connected undertakings” in section 4 (Effective from May 28th, 2012) Section 4 deals with the determination of value of excisable goods chargeable to duty on ad valorem basis. It has been amended to incorporate the definition of “inter-connected undertakings” contained in Monopolies and Restrictive Trade Practices Act, 1969 as the latter has been repealed.
In the Central Excise Act, 1944, in section 4,in sub-section (3), in clause (b), dealing with related party, in the Explanation, for clause (i) providing the meaning of inter connected undertakings, the following clause has been substituted, namely:––
(i) "inter-connected undertakings" means two or more undertakings which are inter- connected with each other in any of the following manners, namely:––
(A) if one owns or controls the other;
(B) where the undertakings are owned by firms, if such firms have one or more common partners;
(C) where the undertakings are owned by bodies corporate,––
(I) if one body corporate manages the other body corporate; or
(II) if one body corporate is a subsidiary of the other body corporate; or
(III) if the bodies corporate are under the same management; or
(IV) if one body corporate exercises control over the other body corporate in any other manner;
(D) where one undertaking is owned by a body corporate and the other is owned by a firm, if one or more partners of the firm,––
(I) hold, directly or indirectly, not less than fifty per cent. of the shares, whether preference or equity, of the body corporate; or
(II) exercise control, directly or indirectly, whether as director or otherwise, over the body corporate;
(E) if one is owned by a body corporate and the other is owned by a firm having bodies corporate as its partners, if such bodies corporate are under the same management;
(F) if the undertakings are owned or controlled by the same person or by the same group;
(G) if one is connected with the other either directly or through any number of undertakings which are inter-connected undertakings within the meaning of one or more of the foregoing sub clauses.
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