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TMI BlogThe Finance Act, 1987-Explanatory Notes on the provisions relating to direct taxesX X X X Extracts X X X X X X X X Extracts X X X X ..... tituted sections 48, 71, 74, 206, 245A; (iv) omitted sections 52, 80T, Chapters VIB, XI, sections 115, 245M, 280ZA, 285 and 286; (v) amended sections 2, 25, 35, 22B, to 22F, 22H, 22K, 31, 43 of the Wealth-tax Act, 1957; (vi) inserted sections 22BA to 22BD, 22HA of the Wealth-tax Act, 1957; (vii) substituted section 22A if the Wealth-tax Act, 1957; (viii) omitted section 22M of the Wealth-tax Act, 1957: (ix) amended sections 2 and 42 of the Gift-tax Act, 1958. PROVISIONS IN BRIEF 3. The provisions in the Finance Act, 1987, in the sphere of direct taxes relate to the following matters:- (i) Prescribing the rates of income-tax on incomes liable to tax for the assessment year 1987-88; the rates at which income-tax will be deductible at source during the financial year 1987-88 from interest (including interest on securities), dividends, salaries, insurance commission, winnings from lotteries and crossward puzzles; horse races and other categories of income liable to such deduction under the Income-tax Act; rates for computation of advance tax and charging of income-tax on current inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m salary; raising the monetary limit to Rs. 2,500 in respect of obligation to deduction of tax at source from dividends; facilitating computerised processing of data relating to tax collection by introduction of tax deduction account numbers; modifying the provisions relating to settlement of cases; providing that no suit shall lie in any civil court to set aside or modify any order made under the Income-tax Act; modifying the Eleventh Schedule to the Income-tax Act, 1961; (iv) Amendment to the Wealth-tax Act, 1957, with a view to providing that a building or part thereof shall be includible in the net wealth of a person who is deemed to be the owner as per the provisions of the Finance Act, 1987, relating to income-tax; exempting any deposit made under the national savings scheme; modifying the provisions relating to settlement of cases; empowering Commissioners of Wealth-tax to reduce or waive interest paid or payable on account of non-payment or delay in the payment of tax; barring the jurisdiction of civil courts in respect of any order passed under the Act; (v) Amendment of the Gift-tax Act, 1958, with a view to enlarging the meaning of "gift" to include transfer of proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in certain professions (such as chartered accountants, solicitors, lawyers, etc.) and for charging income-tax during the financial year 1987-88 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping, profits arising in India to non-residents, assessment of persons leaving India for good during the financial year 1987-88, assessment of persons who are likely to transfer property to avoid tax, where an order has to be passed in a case of search and seizure for calculating the amount of tax on the estimated undisclosed incomes etc. (iv) Rates of tax applicable to individuals, Hindu undivided families, unregistered firms, etc., co-operative societies, registered firms and local authorities: 7. In the case of individuals, HUFS, unregistered firms, etc., the rates of income-tax have been specified in Paragraph A of Part III of the First Schedule to the Finance Act. In the case of co-operative societies, registered firms and local authorities, the rates of income-tax have respectively been specified in Paragraph B, Paragraph C and Paragraph D of Part III of the First Schedule to the Finance Act. These rates are the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) to a concern in which the shareholder has substantial interest. "Concern" as per the newly inserted Explanation 3(a) to section 2 (22) means a HUF or a firm or an association of persons or a body of individuals or a company. A shareholders having a substantial interest in a concern as per part (b) of Explanation 3 is deemed to be one who is beneficially entitled to not less than 20 per cent. of the income of such concern. 10.3 The new provision would therefore, be applicable in a case where a shareholder has 10 per cent. or more of the equity capital. Further, deemed dividend would be taxed in the hands of a concern where all the following conditions are satisfied: (i) where the company makes the payment by way of loans or advances to a concern; (ii) where a member or a partner of the concern holds 10 per cent. of the voting power in the company; and (iii) where the member or partner of the concern is also beneficially entitled to 20 per cent. of the income of such concern. With a view to avoid the hardship in cases where advances or loans have already been given, the new provisions have been made applicable only in cases where loans or advances are given after 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und or any other fund for welfare of employees in the year in which the liability is actually discharged (section 43B). The effect of the amendment brought about by the Finance Act, 1987, is that no deduction will be allowed in the assessment of the employer(s) unless such contribution is paid to the fund on or before the "due date". Due date means the date by which an employer is required to credit the "contribution" to the employee's account in the relevant fund under the provisions of any law or term of contract of service or otherwise. [Explanation to section 36(1)(va)] 12.2 In addition, contribution of the employees to the various funds which are deducted by the employer from the salaries or wages of the employees will be taxed as income [insertion of new sub-clause (x) in clause (24) of section 2] of the employer, if such contribution is not credited by employer in the account of the employee in the relevant fund by the "due date". Where such income is not chargeable to tax under the head "Profits and gains of business or profession", it will be assessed under the head "Income from other sources". 12.3 Payment by way of tax on duty, liability for which has accured i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to carry forward of capital losses in relation to assessment year 1987-88 and earlier assessment years have been provided for in sub-section (3) of section 74. This provides that short-term capital losses computed in respect of assessment year 1987-88 or any earlier assessment year(s) shall be carried forward and set off under the head "Capital gains" assessable for assessment year 1988-89 or any subsequent assessment year(s). This short-term capital loss, however, would not be carried forward for more than 8 years succeeding the assessment year in which the loss was first computed. 13.5 In respect of long-term capital loss relating to the period to the date of coming into effect of the new section 74, this would be carried forward and set off against income under the head "Capital gains" assessable for that assessment year. Carry forward of loss would not be allowed beyond the 4th assessment year immediately succeeding the assessment year for which the loss was first computed. [Sections 3(c), 3(f), 28, 29, 30, 31 of the Finance Act, 1987] Tax incentive for investment in shares: 14.1 Under the existing provisions of section 2(42A) of the Income-tax Act, short-term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the above two Post Office Savings Accounts Rules have been revised and as a consequence have been substituted by the Post Office (Cumulative Time Deposits) Rules, 1981, and the Post Office Savings Account Rules, 1981, respectively. The substitution has been made w.e.f. 1st April, 1982. 16.3 Section 10(15) as a consequence has been amended with retrospective effect. It now refers to the rules currently applicable for the rules which are now not legally in force. The interest on deposits made in the Post Office Savings Banks under these rules continue to qualify for exemption from income-tax. 16.4 The amendment is with the retrospective effect from 1st April, 1983, and will, accordingly, apply to the assessment year 1983-84 and subsequent years. Interest which may have accured after 1st April, 1982, on the deposits made under the revised rules would, therefore, be eligible for exemption. [Section 4(b)(i) of the Finance Act, 1987] Exemption of interest on bonds issued by certain public sector undertakings: 17.1 In his Budget Speech for the year 1986-87, the Finance Minister had announced that "the Government will introduce another series of Public Sector Bonds wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d industrial undertakings in free trade zones. The tax exemption is available for five consecutive assessment years out of the block of initial eight years. The section refers to units engaged in "manufactures or production of articles or things". There are several cases of units, set up in the free trade zones, which only assemble or process imported components for export, the benefit to the country being the value added. As an incentive for earning foreign exchange, section 10A has been amended w.e.f. 1st April, 1981, when it was first introduced, to clarify that units that merely assemble or process goods for export would also get the benefit of the tax holiday. The amendment also covers units which carry out recording of programmes on any disc, tape, perforated medial or other information sorage device. In this regard, the Board has already issued instruction in November, 1986. 19.2 The amendment will come into force retrospectively from 1st April, 1981, and will, accordingly, apply in relation to the assessment year 1981-82 and subsequent years. [Section 5 of the Finance Act, 1987] Modification of provisions relating to investment deposit account: 20.1 The Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount deposited with the Development Bank in accordance with the Scheme shall not be permitted to be withdrawn before the expiry of a period of 5 years from the date of deposit, except for the purposes specified in the Scheme and in the following circumstances:- (a) closure of business; (b) death of the taxpayer; (c) partition of a HUF; (d) dissolution of a firm; (e) liquidation of company. 20.6 The Investment Deposit Account Scheme permits withdrawals for some purposes which are even otherwise deductible under the Income-tax Act. In order to secure that such assessees are not allowed deduction twice in respect of the same expenditure, the Amending Act clarifies, that where any expenditure is made wholly or partly by utilising the amount credited to the taxpayer in the deposit account, in respect of which deduction is allowed under section 32AB(1), then such expenditure shall not be reduced under the other provisions of the Act. 20.7 Section 32AB(6) lays down that any amount withdrawn by an assessee from his account with the Development Bank but not utilised in accordance with the scheme during the previous year will be treated as income of the year during which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of such services or facilities or supply of plant and machinery. 21.2 The amendment will not apply to any income to which the provisions of sections 42, 44D, 115A or 239A of the Income-tax Act apply. 21.3 This amendment will come into force retrospectively from 1st April, 1983, and will, accordingly, apply in relation to the assessment year 1983-84 and subsequent years. [Section 11 of the Finance Act, 1987] Simplification in the computation of income in respect of foreign airlines: 22.1 Presently the income of a non-resident engaged in the business of operation of aircraft is computed after allowing deduction for certain expenses and statutory deductions. This involves complications in determining the income accuring or arising in India to such a person. 22.2 With a view to simplify the existing provisions, the Amending Act has inserted a new section 44BBA which provides that the income from such business shall be computed at a flat rate of 5 per cent. of the amount received or receivable by or on behalf of the taxpayer for carriage of persons, livestock, mail or goods from any place in India and the amount received or deemed to be received within India on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by power of attorney), shall be considered as having the effect of transfer of title. The Amending Act by insertion of sub-clauses (iii), (iiia) and (iiib) in section 27, covers all the transactions referred to above for the purpose of determining the ownership of the property for assessing income under the head" Income from house property." 23.3 For the sake of uniformity and consistency, consequential amendments in the Wealth-tax Act and Gift-tax Act have also been made as a similar situation exists in the allied statutes. [Section 2(m) of the Wealth-tax Act and section 2(xii) of the Gift-tax Act] 23.4 The Amending Act has shifted the liability to taxation, from the legal owner to the real owner in respect of some transfers by introducing deeming provisions. The question of taxing the legal owner, e.g., a builder of multi-storeyed flats under the head "Income from house property" would, consequently, not arise. 23.5 This amendment will come into force with effect from 1st April, 1988, and will, accordingly, apply in relation to the assessment year 1988-89 and subsequent years. [Sections 3(g), 6, 75 and 90 of the Finance Act, 1987] Capital gains on transfer of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of clause (iii) of section 49(1) has been amended. 24.5 Under the existing provisions where capital gains accure or arise by way of compulsory acquisition of assets, the additional compensation is taken into consideration for determining the capital gain for the year in which the transfer took place. To provide for rectification of assessment of the year in which the capital gain was originally assessed, section 155(7A) was introduced. The additional compensation is awarded in several stages by different appellate authorities and necessitates rectification of the original assessment at each stage. This causes great difficulty in carrying out the required rectification and in effecting the recovery of additional demand. Another difficulty which arises is in cases where the original transferor dies and the additional compensation is received by his legal heirs. In the latter type of cases, proceedings have to be initiated against the legal heirs. Repeated rectification of assessment on account of enhancement of compensation by different courts often results in mistakes of computation of tax. 24.6 With a view to removing these difficulties, the Finance Act, 1987, has inserted a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. Rs. Company 10,000 + 10% of balance 10,000 + 30% of balance Any other assessee 10,000 + 50% of balance 10,000 + 60% of balance In a case where capital gains in relation to both the categories of assets referred to above (i.e., Category I and Category II) are chargeable under the head "Capital gains", the manner of allowing deduction of Rs. 10,000 has been prescribed in the first proviso to the newly introduced section 48. The deduction of Rs. 10,000 will be first allowed against the assets referred to above in Category I, and the balance, if any, against the assets referred to in Category II. 25.4 In cases of compulsory acquisition, the threshold deduction will be restricted to a total amount of Rs. 10,000 in relation to the initial compensation as well as additional compensation received in subsequent years. 25.5 The above deductions referred to in section 48(2) will be given after providing for the exemptions specified in sections 54, 54B, 54D, 54E, 54F and 54G. 25.6 The exemptions provided in sections 53, 54 and 54F in respect of capital gains which are hitherto allowed only to individuals has now been ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (date of sale 2-6-1987) 10 2 . Cost of acquisition (date 1-5-1983) 3 3 . Investment in construction of the new property by due date of filing the return for the assessment year 1988-89 4 Capital gain 7 SITUATION 1 : Where no deposit in accordance with the scheme is made by the taxpayer - Sale consideration 10 - Cost of acquisition [to be allowed under section 48(1)( a )] 3 Balance 7 - Deduction under section 54(1)( i ) 4 Balance 3 - Deduction under section 53 : 7 × 2/10 1.4 Balance 1.60 - Deduction under section 48(2) : Rs. 10,000 + Rs. 75,000 0.85 Net capital gain liable to tax in the assessment year 1988-89 0.75 SITUATION 2: Amount deposited as per scheme by the due date of filing the return for the assessment year 1988-89 3 Hence, amount deemed utilised for the acquisition of new asset 7 Capital gain liable for tax for the year 1988-89 : ( i ) If the amount of Rs. 3 lakhs is utilised in the construction by 2-6-1990, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to above. 27.3 The new scheme for deposit of amounts for reinvestment of capital gains within the specified period will also be applicable to gains arising from the transfer of plant, machinery, etc., effected in the course of, or in consequence of the shifting of industrial undertaking from urban to non-urban areas. 27.4 The benefit of exemption under section 54G will be available for shifting of intergrated independent units of the industrial undertaking, from an urban to a non-urban area. For example, in the textile industry, if a distinct part of the industrial undertaking like a spinning unit is shifted from an urban to non-urban area, without shifting the weaving unit, the exemption provided for in section 54G will still be allowable. 27.5 These amendments will take effect from 1st April, 1988, and will, accordingly, apply in relation to the assessment year 1988-89 and subsequent years. [Section 24 of the Finance Act, 1987] Capital gains arising on transfer of goodwill: 28.1 In principle, the gains arising on transfer of good will amount to capital gains liable to tax. The judicial view, however, has been that it is only where an asset costs somethin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership basis; (b) any instalment or part payment of the amount due to any company or a co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; (c) any repayment of loans borrowed by taxpayer from the Government or any Bank of Life Insurance Corporation of India and certain categories of public companies, co-operative societies and institutions engaged in the business of providing long-term finance for construction or purchase of houses in India; (d) any repayment of loan borrowed from the employer if the employer happens to be a public company or a public sector company as per definition newly inserted by Amending Act [Section 2(36A)]; (e) stamp duty, registration fee and other expenses incurred for the purpose of the purchase of house, etc.; (iv) the following payments, however, do not qualify for deduction:- (a) cost of share or initial deposit for the cost of land (except where the consideration for the purchase of house property is a composite amount and the cost of land cannot be separately ascertained) or the cost of any addition or alteration; (b) any expenditure in respect of which a deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the depositor makes any withdrawals from the amount standing to his credit in the National Savings Scheme together with the interest accured thereon, an amount equal to 50% of the amount so withdrawn shall be deemed to be the income of the taxpayer for the previous year in which such withdrawal is made. Interest on the deposits made under the National Savings Scheme will be taxable only in the year of withdrawal and to the extent of fifty per cent. thereof. The deposits in the account will qualify for exemption under the Wealth-tax Act, along with other specific assets, subject to the overall limit of Rs. 5 lakhs. 31.2 This amendment will come into force with effect from 1st April, 1988, and will, accordingly, apply in relation to the assessment year 1988-89 and subsequent years. [Section 34 and 76 of the Finance Act, 1987] Modification of the provisions relating to deduction in respect of donations to certain funds, etc.: 32.1 Under section 80G of the Income-tax Act, the taxpayer is entitled to a deduction, in computing his taxable income, of a sum equal to 50% of the donation made to certain funds, institutions, etc. The amount of deduction which qualifies for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time specified above, because of reasons beyond his control, he may allow such further time as may be considered necessary. 33.2 It was held by the Bombay High Court that a branch abroad of a company resident in India would be a "foreign enterprise", within the meaning of section 80-O. As this was not the intention of the law, a new clause (ii) has been inserted in Explanation to section 80-O to clarify that a "foreign enterprise" means a person who is a non-resident. 33.3 Where the deduction under section 80-O is not allowed on the ground that the qualifying amount of income has not been brought into India in the relevant year but has been received or brought into India in a subsequent year, the assessment order in respect of the deduction under section 80-O was rectified under section 154 within a period of 4 years from the date on which such income was either received in India or brought into India. The power to make such an amendment is derived from section 155(12). Consequent to the introduction of the proviso referred to in para. 33.2 above, the provisions of section 155(12) were no longer necessary and have, therefore, been deleted. 33.4 The deletion of the words "o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply in relation to the assessment year 1988-89 and subsequent years. [Section 39 of the Finance Act, 1987] New provisions to levy minimum tax on "book profit" of certain companies: 36.1 It is an accepted canon of taxation to levy tax on the basis of ability to pay. However, as a result of various tax concessions and incentives certain companies making huge profits and also declaring substantial dividends, have been managing their affairs in such a way as to avoid payment of income-tax. 36.2 Accordingly, as a measure of equity, section 115J has been introduced by the Finance Act. By virtue of the new provisions, in the case of a company whose total income as computed under the provisions of the Income-tax Act is less than 30 per cent. of the book profit computed under the section, the total income chargeable to tax will be 30 per cent. of the book profit as computed. For the purposes of section 115J, book profits will be the net profit as shown in the profit and loss account prepared in accordance with the provisions of Schedule VI to the Companies Act, 1956, after certain adjustments. The net profit as above will be increased by income-tax paid or payable or the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d manufactured by the seller, only 40 per cent. of such income is liable to tax under rule 8 of the Income-tax Rules, 1962. 60 per cent. of the income, which is disregarded for the purposes of taxation is considered to be agricultural income and is, therefore, exempt under the provisions of Chapter III. The net profit determined in accordance with Schedule VI to the Companies Act, 1956, has to be adjusted, inter alia, in accordance with clause (f) and sub-clause (ii) of the Explanation to section 115J(1). In the case of the tea companies, the book profit should be computed by making all the adjustments referred to in the Explanation. However, no adjustments referred to in the Explanation. However, no adjustment in respect of clause (f) and sub-clause (ii) of the Explanation is to be made for the agricultural income earned by tea companies from tea business. 40 per cent. of the adjusted amount arrived at in this manner will be the book profit of the tea company in accordance with rule 8 of the Income-tax Rules. 36.5 The following examples illustrate how the amended provisions relating to the new section will be applied:- New Companies Book profits for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 Less : Deduction under section 205(2) 2,00,000 6,00,000 Out of the amount whichever is less: - 1984 : Business loss 3,00,000 - 1986 : Business loss 10,00,000 Total loss 13,00,000 1986 : Depreciation 2,00,000 Assessable income 30% of Rs. 6 lakhs, i.e., Rs. 1.8 lakhs Amount to be carried forward as per sub-section (2) of section 115J -1984 : Unabsorbed depreciation 3,80,000 -1986 : Business loss 8,00,000 Unabsorbed depreciation 4,00,000 36.6 These amendments will come into force with effect from 1st April, 1988, and will, accordingly, apply in relation to the assessment year 1988-89 and subsequent years. [Section 43 of the Finance Act, 1987] Modification of the scope of deduction of tax at source from salaries: 37.1 Under the existing provisions of section 192 of the Income-tax Act, tax has to be deducted at source by any person responsible for paying any income chargeable under the head "Salaries". 37.2 There are cases where an employee renders service with more than o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the provisions relating to tax deduction at source: 38.1 With a view to rationalise the provisions of sections 194, 194A and 194D, the limits up to which no tax is to be deducted have been raised as under: Sl. No. Type of payment Present limit up to which no tax is deductible Amended limit Rs. Rs. 1. Dividend [section 194] 1,000 2,500 2. Interest other than interest on securities [section 194A] 1,000 2,500 3. Insurance commission[section 194D] Nil 5,000 38.2 Under the existing provisions, deduction of tax at source from interest is to be made at the time of payment or credit to the account of the payee. With a view to prevent postponement of liability relating to such deduction of tax at source, section 194A has been amended to provide that tax will be deducted at source, on actual of interest at the end of the accounting year or at the time of credit to the account of a payee or at the time of payment, whichever is earlier. Similarly, section 195 has been amended to ensure that deduction of tax at source from payments to non-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n credited to the Government account. Section 203 has been amended so as to provide that the certificate for deduction of tax shall be issued, within such time, as may be prescribed. 39.2 This amendment will come into force from 1st June, 1987. [Section 54 of the Finance Act, 1987] New provisions relating to allotment of tax deduction account number: 40.1 For better monitoring of deduction of tax at source and its deposit in the Government account, the Amending Act has inserted a new section 203A in the Income-tax Act. Every person deducting tax at source in respect of any payment made and who has not been allotted a tax deduction account number will make an application for allotment of such a number to the income-tax authority. This number will be quoted in all the challans for payment of any tax deducted at source, in all certificates for tax deducted, in all the prescribed returns filed by persons paying salary and interest to residents and in all other documents pertaining to such transactions which the Central Board of Direct Taxes may prescribe. 40.2 A person who fails to comply with the provisions of section 203A will be liable to penalty under the newly inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of sub-clause (iii) of clause (1B) of section 245C, where an assessment has been completed, the additional amount of tax payable is calculated by aggregating the tax assessed and tax on disclosed income. The Amending Act provides that, in such a situation, the additional amount of tax payable will be worked out on the returned income plus the income disclosed before the Settlement Commission. This gets over a situation, where for example, the returned income is Rs. 1 lakhs, the assessed income is Rs. 10 lakhs and disclosed income is Rs. 5 lakhs. In a case like this, as per the existing provisions, the assessee would have to pay tax on total income of Rs. 15 lakhs (Rs. 10 lakhs as assessed + Rs. 5 lakhs as disclosed before the Settlement (Commission). The Amending Act provides that the assessee will have to pay tax on Rs. 6 lakhs only. 41.4 Presently, the Settlement Commission has absolute powers of granting immunity to any person from being prosecuted. The Amending Act by inserting proviso to section 245H(1), precludes the Commission from granting immunity in cases where prosecution has been launched, prior to the date of receipt of application for settlement. By inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify any order made under the said Acts. 42.3 These amendments will come into force with effect from 1st March, 1987. [Sections 72, 89 and 91 of the Finance Act, 1987] Amendment of the Eleventh Schedule to the Income-tax Act: 43.1 The Eleventh Schedule to the Income-tax Act lists non-priority products. The manufacturers of these products are denied tax concessions under section 32AB and other sections of the Act. Item No. 5 of the Eleventh Schedule relates to "aerated waters" in the manufacture of which "blended flavouring concentrates in any form are used". It has been found that certain persons manufacturing aerated waters are using synthetic essence and are claiming the benefit on the ground that synthetic essence cannot be included in the expression "blended flavouring concentrates in any form". As this was not the intention of the legislature, the Amending Act has inserted an Explanation to item 5 of the Eleventh Schedule which clarifies that blended flavouring concentrates would include the synthetic essences in any form. 43.2 Item No. 22 of the Eleventh Schedule has been amended to exclude computers from the list of non-priority items. Office machines and appa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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