TIOL-DDT 2887 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26988"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2016.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="252" height="220" hspace="5" border="0" align="right" ></a></font><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2887 </font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
13 07 2016 <br>
Wednesday </font></strong></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">GST - Single Authority?</font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the CBEC's Outreach Programme at Hyderabad on Monday, CBEC Member, Ram Tirath stated that assessees under the GST will have to deal with only one single authority. The fear of dual control by the State Government and the Central Government on same issues has been haunting the trade ever since GST appeared on the horizon. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will there be a single authority for registration, SCN, adjudication, appeal, audit, investigation, summons, assessment, returns, refund and other formalities ? Or will there be double trouble with both the State and Central GST authorities breathing down the necks of harried assessees? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In such a situation, the announcement by the CBEC Member is a welcome breeze of oxygen, but unfortunately he didn't elaborate. I tried to contact him and Mr. Upender Gupta, Commissioner, GST to find out if there would be really only one authority for all the above purposes, by phone, mail and SMS, but couldn't succeed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the likely dual controls could be:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. As per Section 38 of the Model GST Law, refund application is to be made to the proper officer of IGST/CGST/SGST; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. As per Section 60, a CGST/SGST officer, not below the rank of Joint Commissioner, can order inspection, search and seizure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Under Section 62, the Commissioner of CGST or the Commissioner of SGST can authorise any CGST/SGST officer to arrest an alleged offender. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Section 63 vests any CGST/SGST officer, duly authorised by the competent authority with the power to summon any person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. As per Section 64, any CGST/SGST officer authorized by the Additional/Joint Commissioner of CGST or SGST shall have access to any business premises to inspect books of account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Under Section 122, the Commissioner of CGST/SGST or an officer authorized by him may take samples of goods from the possession of any taxable persons. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The model law stipulates that rejection of an application for registration by a CGST officer will be deemed a rejection under the SGST Act also - and vice-versa. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600"><a name="f1"></a>Central Excise - Ready Made Garments - Registration - No Verification of Premises </font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVERY</strong> <em>person, who produces, manufactures, carries on trade, holds private store-room or warehouse or otherwise uses excisable goods or an importer who issues an invoice on which CENVAT credit can be taken, shall get registered</em>, as per Rule 9(1) of the Central Excise Rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 35/2001-CE, dated 26.06.2001, specifies the conditions, safeguards and procedures for registration of a person under the said rules and exemptions from registration in specified cases. As per clause 8 of this Notification, the authorized officer is required to verify the premises physically within seven days from the date of receipt of the Registration Application through online. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has exempted <em>Every manufacturing factory or premises engaged in the manufacture or production of goods falling under Chapters 61, 62 or 63 (except laminated jute bags falling under headings or tariff item 6305, 6309 00 00 or 6310) of the First Schedule to the Central Excise Tariff Act, bearing a brand name or sold under a brand name and having a retail sale price (RSP) of one thousand rupees and above</em>, from this mandatory verification. </font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter 61 </font></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Articles of apparel and clothing accessories, Knitted or Crocheted </font></em></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter 62 </font></td>
<td valign="top" bgcolor="#FFE6D9"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Articles of Apparel and Clothing Accessories, not knitted or Crocheted </font></em></td>
</tr>
<tr>
<td valign="top"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter 63 </font></td>
<td valign="top"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Other made up textile articles; sets; worn clothing and worn textile articles; rags </font></em></td>
</tr>
</table>
</div>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjAxODA=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 32/2016-CE(NT)., Dated: July 11, 2016 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f2"></a>Customs - Textiles - Exemption -Cotton Textiles Export Promotion Council authorised to issue certificate </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per Sl. No. 284A of the table to the Notification No. 12/2012-Cus, dated 17.03.2012, certain textile items are exempted if they are imported for manufacture of textile garments, with certain export conditions. The importer should produce a certificate from the Apparel Export Promotion Council or the Synthetic and Rayon Textile Export Promotion Council, as the case may be, certifying the value of exports, imports etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the <em>Cotton Textiles Export Promotion Council </em>is also authorized to issue this certificate. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MjAxNzk=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 42/2016-Cus., Dated: July 11, 2016 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f3"></a>Service Tax - Fee Paid for e-tender </font></em></strong></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MANY</strong> companies are conducting the e-tender. While e-tender is conducted by the company some fees is prescribed for participation and the fees so paid would entitle the applicant to participate in the e-tender. Whether such fees paid will form consideration for the purpose of levy of service tax? Whether the answer will be same when the applicant is issued with physical documents to fill up and participate in the tender ? </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was a question raised in the RAC meeting of Hyderabad Central Excise Zone held on 30.06.2016. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Commissioner observed that <em>service element comes into play as tender floater and tender participant are there and according to Section 65B(44) of the Finance Act 1994, Service means "any activity carried out by a person for another for consideration, and includes a declared service"; accordingly Service Tax is liable to be paid on the fee paid for filing the e-tender</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another Commissioner stated that<em> it is not the cost of application but the act of allowance for tender Participation has much more intrinsic value and hence service tax is liable to be paid</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Commissioner held <em>that the matter would be referred to Board for clarification and till such time Service tax may be paid on the fee collected for allowing a participant to file e-tender</em>. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f4"></a>Service Tax - fines, penalties and liquidated damages </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANOTHER</strong> question raised in the meeting was: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In many cases, companies are collecting fines, penalties and liquidated damages from their customers for any deficiency of performance or shortfall of supply/contract. These situations are very common and the amount so collected will form part other revenue of the company and as per the accounting standards, it cannot be clubbed with the normal revenue from operations. Whether such penalties, compensation for not doing, or shortfall in handling any prescribed quantity or deficiency in service, not completing the job within the prescribed period of time as agreed by contract would also attract service tax? </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Commissioner informed that issues similar to the point raised have been confirmed by him in favour of revenue as the fines, penalties and liquidated damages collected in the course of provision of service are liable for service tax as per Section 66E(e) of Finance Act, 1994, according to which "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" is a declared service and a taxable event. Hence, Fines, penalties and liquidated damages which are collected from customers in lieu of either deficiency in performance of service or violation of terms and conditions of agreement are liable to service tax under Section 66E(e)of Finance Act, 1994. It was also stated that, some of the cases are pending disposal at CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Commissioner informed the members present in the meeting to continue to pay the Service Tax on the subject matter, since the issues similar to the point raised are pending in Tribunal as informed by the Commissioner, and the outcome of these cases may be awaited. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600"><a name="f5"></a>CBEC Taxpayer's Experience Survey -Some Suggestions </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SOME</strong> of the suggestions received during the Taxpayer's Experience Survey: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• <font color="#FF0000">Electronic taxpayer services </font></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Assessee should not suffer demurrage charges due to issues with ICEGATE website. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Digitisation of audit records to reduce seeking same information again during next audit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Telephone number and e-mails of all officers should be available on web portal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Reduction in outages/short notice maintenance work for e-filing services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Create an online interactive platform to grant various permissions from jurisdictional Commissioner with facility to seek online comments from divisional/range office. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Custom duty payments made through bank should be updated immediately. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Allow interface of ACES and ICEGATE with IT platform of DGFT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Submission of information or replies should be accepted by registered e-mails with automated acknowledgment facility. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• E-filing system should be compatible with various platforms like Internet Explorer, Firefox, etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Online forms should be made easier and training should be imparted to industry for compliance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Systems issues should be resolved in time bound manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Servers should be upgraded to handle the load during peak hours/due dates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Any extension in the due dates due to system issues should be informed well in advance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Develop online system for issuing Form A1/A2 for SEZs. </font></p>
</blockquote>
<p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Dispute resolution </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Quasi-judicial functions of adjudications to be vested in a separate wing reporting to CBEC to achieve merit based decisions/orders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Facts to be ascertained/confirmed before issuance of demand notice instead of notices being issued in a routine manner on pre-conceived notions/conclusions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Fix responsibility for raising demand notices on frivolous grounds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Introduce mandatory handover rules- transferred officer should be legally empowered to operate at the station for 2 months to complete the adjudication of cases where personal hearing has been concluded. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Fast track dispute resolution - Club show cause notices on similar matters across Commissionerates and pass a single order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• CBEC to take merit-based stand in critical matters to reduce issuance of repetitive demands on same/settled issue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Reduce the frequency of amendments in tax laws. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Seek periodical report from each Commissionerate with industry data of issue-wise demands raised dropped at adjudication / first appeal level to check quality of demand notices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• An approach of ‘go and deal with higher level' should be avoided. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Issue industry wise guide/circulars on applicability of tax provisions to that industry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Set up mechanism to deliberate and resolve industry wise issues arising due to difference of opinion/interpretation of law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Set up helpdesks to resolve the various issues faced by taxpayers to reduce litigation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Audit should not be conducted with the sole motive to raise demand. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Departmental officers should collate/verify data available with them before requesting the same from the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Inquiry/investigation must be completed in a time bound manner and it should not be an unending process. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Cases having common facts and similar legal issues should be grouped together and only one case should be litigated for quick disposal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Mandatory discussion with assessee before issuance of SCN especially for high value cases . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• SCN/Orders should not be issued with a pro-revenue approach especially towards the end of the year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Authority for issuing the SCN and the Adjudicating authority should be different. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Develop conducive environment for tax offices to take independent merit based decisions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• SCN/Order-in-Original/Order-in-Appeal should be decided within the prescribed time limit or it should be deemed to be dropped. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Deploy appropriate additional staff to expedite decisions in pending matters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Concerted efforts needed to dispose of the old pending matters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Consider introducing personal hearings through video conferences. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Approach of authorities must be constructive and they should trust the taxpayer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Penalty should not be imposed mechanically in all cases; due regard should be given to the facts of the case </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Adjudicating authority should pass order before being relieved on transfer where hearing in cases have been completed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Customs officers must issue a speaking order if they have contrary view on self-assessed bill of entry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Provide clarity on tax positions (specially CENVAT credit eligibility) to reduce litigation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Set up separate benches of CESTAT to fast track high value litigation. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring more from the survey tomorrow. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@tiol.in" target="_blank"><strong>vijaywrite@tiol.in</strong></a></font></p>
</body>
</html>