Central Excise - Digital Records - Board Proposes to issue Notification and Circular - Invites Feedback

By Vijay Kumar

IN Para 120 of his Budget Speech 2015, the Finance Minister said, the assessees under central excise and service tax will be allowed to issue digitally signed invoices and maintain electronic records. These measures will cut down lot of paper work and red tape.

Accordingly, Rules were amended to provide for issue of digitally signed invoices and preservation of records in electronic form.

Now the CBEC proposes to issue a Notification and a Circular to specify the conditions, safeguards and procedures for issue of invoices and preserving records in electronic form and authentication of records and invoices by digital signatures. Board wants feedback from the Trade and Departmental Officers.

The Finance Minister says - These measures will cut down lot of paper work and red tape. And exactly opposite of that is what the Board proposes.

If you want to maintain electronic records:

1. You will have to get a Class 2 or Class 3 digital signature.

2. Before going electronic, you have to submit details of your name, digital signature, etc. to the DC/AC with a copy to the Range Superintendent. It is not mentioned whether this information can be sent by e-mail.

3. Electronic records are to be maintained separately for each factory.

4. The Department can ask you for printouts of the electronic records and invoices. Pray, why? What are you going to do with the tons of printed paper? And your FM says he is going to save paper.

The Board also proposes to prescribe the procedure for verification of electronic records.

The Board draft notification starts with, In exercise of powers conferred by sub rule (5) of rule 10 and sub rule (9) of rule 11 of the Central Excise Rules, 2001, (hereinafter referred to as the said rules).....

1. They want to derive power from the Central Excise Rules, 2001, which do not exist! Thankfully, the Draft Circular mentions the correct rules - CER, 2002.

2. ( hereinafter referred to as the said rules) ..... after this, there is no word “rules” mentioned anywhere in the notification. It is a normal practice in Government to write these words routinely whenever they refer to any rules. This proves again how careless they are in drafting the LAW.

CBEC F. No.224/44/2014-CX.6., Dated: March 27 2015 .(with the draft Notification and Circular)