One Year too little to issue Show Cause Notice - CBEC Chief
ADDRESSING the ASSOCHAM yesterday the Chairman said that the Union Budget 2016-17 is aimed to bring the huge chunks of industry including area-based exemptions together with SSI, edible oil, textile sectors and others into the tax net in a most easy manner.
The Chairman added,
Out of the GDP Rs 110 lakh crores and manufacturing sector contributing about 17 per cent to it, we have huge chunks of industry which is out of the net;
Area-based exemptions, it is one lakh plus crore which is out of the net, SSI, edible oil, textile sector, these are huge chunks of industry;
If we are talking of GST, we are now talking of all these sectors having to move towards the tax net, how else are we going to have a GST;
The industry supports GST but very-very surprisingly, keeps expecting and wanting exemptions, the two do not go together, every time there is a break in the CENVAT chain, you have a problem, you have tax sticking on to some products, which the next man has to bear and there is no reason why you should bear it;
Therefore, this was the thinking really behind to slowly bring these sectors into tax net and these are essential steps in our opinion if we wish to move towards GST;
More than 10-12 per cent of the litigations were because of two specific rules in the CENVAT i.e. Rule 6 and Rule 7, that have now been completely revamped. We have tried to simplify them to the extent possible;
We are expecting a hit of more than Rs 1,000 crores only because of the CENVAT credit rule changes, in terms of simplification, we thought it is something essential, because the cost of litigation was much more than the revenue which we are otherwise getting;
All these simplified processes will add to ease of doing business and reduce transaction costs.
The focus right through the budget has been on simplification, on ensuring that the taxpayer gets better value for money, gets better services from us and has lesser interaction with us;
Our analysis showed us that one year was too little for us (to issue Show Cause Notices) simply because balance sheets for the financial year are invariably filed by the September 30 of the following year, so by the time the audit gets done and department gets to know something which we have to collect or not collect, the one year period gets over, to cover that up the departmental officers are invariably going in for the extended period of five years, which was happening across the board.