TIOL-DDT 2907 · the untouched capture
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<p align="justify"><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><strong><font color="#663399" size="3">TIOL-DDT 2907</font> <br>
10 08 2016 <br>
Wednesday </strong></font></p>
<p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600" size="3"><em>CENVAT Credit - Only on Duplicate Copy of Invoice? </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Rule 9(1)(a)(i) of the CENVAT Credit Rules, an invoice issued by a manufacturer is a document on the basis of which Cenvat Credit can be taken. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 11(3) of the Central Excise Rules, the invoice shall be prepared in triplicate in the following manner, namely:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the original copy being marked as ORIGINAL FOR BUYER; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) the triplicate copy being marked as TRIPLICATE FOR ASSESSEE. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, is there any restriction on which copy of the invoice can be used for taking Cenvat Credit? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This question was raised in the meeting of the Regional Advisory Committee of the Chief Commissioner of Central Excise Chennai Zone held on 12.07.2016. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question was: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Whether the duplicate copy (digitally signed) accompanying the transportation alone is the document for credit availment or credit is possible based on invoices through the digital form itself </em>. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department replied: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Rule 9 of the Cenvat Credit Rules, 2004 prescribe documents for the purposes of taking Cenvat Credit which includes invoice issued for clearance of goods. Further, Rule 11(3) of Central Excise Rules, 2002 prescribes that invoice for removal of goods shall be prepared in triplicate and duplicate copy shall be marked as "Duplicate for Transporter". </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em> </em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Further, Rule 4(1) of CCR stipulates that credit can be taken on receipt of inputs into the factory or the premises of job worker. It is clear from the harmonious reading of the above provisions that <strong>credit can be taken only on the basis of duplicate copy of invoice and issuing digital invoice has not altered the above provisions </strong>. </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the assessee required to go through the exercise of <em>harmonious reading </em> of several provisions of the Law to determine the copy of invoice on which he can take credit? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A harmonious reading would also lead to a conclusion that the ‘duplicate copy' is meant only for the transporter and has nothing to do with taking credit. Now whose harmonious reading would prevail? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Board clarify that there is no such provision in law that credit can be taken only on the ‘duplicate copy' of the invoice? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board should also instruct the Chief Commissioners that they should not confuse the trade and the field with such wrong clarifications. At least the Board should be taken into confidence before such important (and wrong) clarifications are given. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em><a name="f1"></a>GST - One Nation - Two Departments and Three Taxes - GST Administration </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> "<em>One Nation - One Tax</em>" will actually be two Departments, the Central GST and IGST administered by CBEC and the State GST administered by the State VAT Departments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How will these two departments administer the GST? The staff strength and hierarchy in these two departments are vastly different. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A comparison of the two departments in one of the States: </font></p>
<table width="90%" border=1 align="center" cellpadding=3 cellspacing=0 class=MsoNormalTable>
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<td colspan=2 valign=top> <div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise and Service Tax</b></font></div></td>
<td colspan=2 valign=top> <div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Commercial Taxes/VAT</b></font></div></td>
</tr>
<tr>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Designation</b></font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No. of officers</b></font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Designation</b></font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No. of officers</b></font></td>
</tr>
<tr>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Principal Chief Commissioner</font></td>
<td valign=top> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1</font></div></td>
<td valign=top> </td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">0</font></td>
</tr>
<tr>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioner</font></td>
<td valign=top bgcolor="#EDC9C9">
<div align="right"></div></td>
<td valign=top bgcolor="#EDC9C9"> </td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">0</font></td>
</tr>
<tr>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Principal Commissioner</font></td>
<td valign=top> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2</font></div></td>
<td valign=top> </td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">0</font></td>
</tr>
<tr>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner</font></td>
<td valign=top> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10</font></div></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner</font></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">1</font></td>
</tr>
<tr>
<td rowspan=2 valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional Commissioner/Joint Commissioner</font></td>
<td rowspan=2 valign=top> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20</font></div></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional Commissioner</font></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">2</font></td>
</tr>
<tr>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Joint Commissioner</font></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">4</font></td>
</tr>
<tr>
<td rowspan=2 valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assistant Commissioner/Deputy Commissioner</font></td>
<td rowspan=2 valign=top bgcolor="#EDC9C9"> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80</font></div></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deputy Commissioner</font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">17</font></td>
</tr>
<tr>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assistant Commissioner</font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">33</font></td>
</tr>
<tr>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Superintendent</font></td>
<td valign=top> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">400</font></div></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commercial Tax Officer</font></td>
<td valign=top> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">134</font></td>
</tr>
<tr>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Inspector</font></td>
<td valign=top bgcolor="#EDC9C9"> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">600</font></div></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deputy Commercial Tax Officer</font></td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 200</font></td>
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<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Total</b></font></td>
<td valign=top bgcolor="#EDC9C9"> <div align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>1113</b></font></div></td>
<td valign=top bgcolor="#EDC9C9"> </td>
<td valign=top bgcolor="#EDC9C9"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>391</b></font></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How will they realign the overstaffed Central Excise with the understaffed Commercial Taxes? Will 10 CGST Commissioners interact with 1 SGST Commissioner? And who will the Principal Chief Commissioner interact with? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not as if the Commercial Taxes Department with about a third of the strength of the Central Excise Department is collecting any less revenue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The VAT revenue for 2014-15 was Rs. 23,000 crore while the Central Excise and Service Tax Revenue was less than half at about Rs.10,000 crore. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Ravindra Babu TDP MP suggested in the Lok Sabha that a new Central Service called the IRS (GST) should be created to administer the GST. Dr.Babu is a former IRS (Customs) officer. </font></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><font size="3"><em><a name="f2"></a>Leakage of Classified Information from Customs </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> seems representation has been received from trade regarding leakage from Customs of classified information containing identification details of the importers/exporters and their trade details. It has been represented that classified Indian import/export shipment data is being leaked from Customs department which puts at risk businesses and overall trade activity of the nation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In an office note, the Commissioner of Customs (Imports), Mumbai Zone-III observes, <em>"It may be appreciated that access to business information and data should be controlled in order to restrict access to authorized users only. In this regard, though the representation is not specific to this Commissionerate, however, considering the seriousness and sensitivity of the issue, attention of all staff members is invited to the Instructions regarding User Access Management and Information Security, issued vide DG(Systems), New Delhi letter F. No. IV(26)/104/2008-Systems dated 28/10/2013. Diligent compliance of the aforesaid instructions will streamline the functioning at field level and will thus rule out/minimize the chances of security breach."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the above, the Commissioner wants strict observance and compliance of the instructions by all staff members. Any instance of non-compliance will be viewed seriously and will invite strict action. </font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f3"></a>Revenue is Booming </em></strong></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct Taxes Collection up by 24%:</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Direct Taxes collections up to July 2016 stood at Rs.1.59 lakh crore which is 24.01% more than the net collections for the corresponding period last year. The growth rate under CIT (Corporate Income Tax) is 11.65% while that under PIT (Personal Income Tax) is 31.47%. However, after adjusting for refunds, the net growth in CIT collections is 2.84% while that in PIT collections is 46.55%. Refunds amounting to Rs.64,181 crore have been issued during April-July, 2016. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indirect Taxes Collection up by 30%:</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Indirect Taxes collections up to July 2016 stood at Rs.2.72 lakh crore which is 29.9% more than the net collections for the corresponding period last year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total collections on account of Central Excise during the first four months of current FY 2016-17(April 2016-July 2016) stood at Rs.1,23,273 crore as compared to Rs. 81,748 crore during the same period in last Financial Year and thereby registering the growth of 50.8%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total collections on account of Service Tax during the first four months of current FY 2016-17(April 2016-July 2016) stood at Rs.76,679 crore as compared to Rs. 60,974 crore during the same period in last Financial Year and thereby registering the growth of 25.8%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total collections on account of Customs during the first four months of current FY 2016-17 (April 2016-July 2016) stood at Rs. 71,767 crore as compared to Rs. 66,495 crore during the same period in last Financial Year and thereby registering the growth of 7.9%. </font></p>
<p align="center"><strong><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><a name="f4"></a>GST in India - Travails, Tribulations and Challenges </em></font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mr</strong> Dutt Majumder, former Chairman of the CBEC has written a rather exhaustive book on <em>"GST in India, Its Travails, Tribulations and challenges ahead"</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Picture shows Majumder presenting a copy of the book to our Managing Editor Shailendra Kumar. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe Modi can add another acronym: GST - Great Smiles Together </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/GST_India2907.jpg" alt="" width="465" height="312" hspace="5" border="0" align="middle" ></font></p>
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<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The vagaries of the monsoon are less unpredictable than the whimsical changes in our tax laws.</font></p>
<p align="right"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Nani Palkhiwala</em></font></p>
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<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"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Have a nice day.</font></strong></font></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>
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