TIOL-DDT 605 · the untouched capture
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<p align="justify"><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT 605</font></b><b></b></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><b><br>
03.05.2007<br>
Thursday</b></font></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No more TR-6 Challan EASIEST GAR-7</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While paying excise duty, the assessee was required to fill up a TR-6 Challan in Quadruplicate. The Bank used to return two copies to the assessee who had to submit one of those bank receipted copies to the Central Excise Range office and the bank used to send one copy to the Central Excise department which was supposed to verify the bankers copy with the assessee’s copy. These are all archaic procedures which will have to give way to modern electronic verification. And the <b>Electronic Accounting System in Excise and Service Tax (EASIEST) </b>was born. Now the assessee has to fill up only one copy of the new GAR-7 and has to just mention the Challan Identification Number in their return.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ahmedabad Commissioner wants the assessees to fill up the challans completely and accurately. The Commissioner wants the assessees to get familiarised with the new system and in any case, for payments made in the month of May 2007 on wards, it seems the bankers will not accept the TR-6 Challan. The department is ready; the assessee is ready but are the bankers ready? We understand that many branches of the authorised banks are yet to put the system in place and they are not accepting e-payment.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/trade_notice.htm">Ahmedabad-II Trade Notice No. 23/2007, Dated April 19, 2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs Commissioners appointed to adjudicated specific cases</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has appointed several Commissioners as adjudicating authorities for specific cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2007/cnt07_034.htm" target="_blank">Notification Nos. 34-39/2007-Cus. (N.T.), Dated April 26, 2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Tariff Value of Brass Scarp increased</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has increased the Tariff Value of imported Brass Scrap by Rs. 43/- to Rs. 4,386/-. There is no change in the Tariff Value of other products.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2007/cnt07_040.htm" target="_blank">Notification Nos. 40/2007-Cus. (N.T.), Dated May 1, 2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption to Goods supplied to UN – More details wanted</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The AhmedabadCommissioner has noticed that the certificate required from the competent authority for availing the exemption, in many cases is not proper. In one case, the certificate issued by the State Government shows only the name of one contractor who procures the goods from several manufacturers. Therefore to safeguard revenue and to avoid unnecessary <b><u>audit objections</u></b> the Commissioner wants the certificates to contain the name and address of the manufacturers, the quantity, and value of excisable goods to be supplied by each manufacturer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/trade_notice.htm" target="_blank">Ahmedabad-II Trade Notice No. 24/2007</a></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Committee of Dunces</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
got this fuming mail from an eminent Netizen, Ramesh Ramachandra</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">I am sending this response to your story on the single member CESTAT Bench order on the legality of a Committee consisting of a single Commissioner holding additional charge of the alternate Committee member's post. My response is as follows:-</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, this Tribunal order goes diametrically against the very rationale - and in my view a very flawed rationale - for amending Section 35 providing for a two member Committee for reviewing orders passed by Commissioners. The underlying reason for the amendment was that "two heads are better than one" in such matters and, additionally, that with safety in numbers, Commissioners/Chief Commissioners would "have the courage" to accept pro-assessee orders which were in accordance with the law. This of course was tacit admission that until then Chief Commissioners were taking the easy and safe route of routinely recommending review of all pro-assessee orders passed by Commissioners, regardless of their legality.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Alas, it seems that the objective of the amendment dt. 13/5/2006 has not been realised, and the same position of "erring on the side of revenue" prevails. It seems that an unwritten convention has emerged where the view of the initiating Committee member on whether the order under consideration should be reviewed or otherwise is honoured pro forma by the alternate member. Or, in any case, that there should be no dissent displayed, and all decisions should be unanimous (something like the concept of the 'agreed note' which everyone who has worked in a Ministry of the GOI is familiar with).</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">This philosophy was blessed by the Board in its astonishingly illegal Circular of 2006 (I don't remember its number or date) <u>{<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular824.htm" target="_blank">CIRCULAR NO. 824/1/2006-CX, Dated 6th February, 2006</a><b>}</b></u> which provides that in the event of a disagreement between the two members of the Committee, the decision by default will be to order a review, and damn the legality or otherwise of the adjudication order under consideration. The Circular also substantially undoes and subverts the statutory amendment dt. 13/5/2006 itself. If the referee member of the Committee does not agree with the finding of the referrer member, he knows that in terms of the Circular there will in any case be a review of the order by default. So why go into the rigmarole of recording his dissent and rocking the boat? Better to swim with the tide and put his 'guggi' on the dotted line. So ultimately the review is by a single Commissioner/Chief Commissioner after all.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>I am surprised that the Circular of 2006 has not yet been challenged in a higher legal forum.</u></b> But when that day of judgment arrives, the promiscuous Circular will be struck down, as it deserves to be, and strictures will be passed on the Board as is well deserved in this instance (among several other) </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Thank you sir, for your scholarly comments, but the Board Circular had been challenged and struck down (as you predicted) in<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-143-CESTAT-MAD.htm" target="_blank"> <u><font size="1">2007-TIOL-143-CESTAT-MAD</font></u></a>. The Tribunal observed, <b>The Board's circular was issued without legal sanction and militates against Section 35B(2)/129A (2) and cannot be given effect to.</b></font></p>
<p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Corruption in Income Tax - startling facts!</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A survey by the Centre For Media Studies, on the Income Tax Department revealed that</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 46% visited the department a minimum of 4 times.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 20.4% of those who interacted with the department had paid bribe.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 62% of those who visited felt that corruption had increased.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Corruption in high income states is higher than in low income states.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 47% of bribes were paid directly to IT staff; <b>28% through CAs</b> and 15% through agents and touts.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 37% returned because of non-availability of concerned staff. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 41% complained of tedious paperwork. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Information has not percolated down, resulting in confusion, anxiety and lack of awareness amongst tax payers, increasing their dependence on external sources.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 67% respondents interacting with the department felt that officials were corrupt.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Despite setting up a Complaint Redressal Helpline, computerization of records and centralization of refund dispatch, 40% people felt that corruption persists.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 39% respondents felt that the department lacked seriousness/commitment to fight corruption; 22% found them indifferent; 23% felt things were changing gradually and committed levels were going up.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 35% found service quality of officials abysmally low; 36% felt it was good; 29% were indifferent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 23% respondents from low income states experienced corruption every time they visited the department while 10% in high income states did so. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Taxpayers can either go in for a long/tedious process or take the alternate route of paying bribe and getting the job done faster. 30% used the ‘alternate’ route.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ 55% paid bribe for filing returns, getting PAN card, IT refund, seeking benefits (under assessment, reduction in penalty, closure of scrutiny).</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The Department’s case:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. People wake up at the last moment to file returns.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Resultantly workload 15 days prior to last date increases manifold.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <b>CAs, touts and agents collect money from clients in the guise of bribes and tarnish image of the department.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Tax payer’s desire to minimize tax liability/burden or to cover lapses creates a pervasive corruption culture.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Survey came with some <b>Recommendations</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Reduce repeated visits to the department by developing alternative channels (banks/post offices/Internet) for collecting returns; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Use call center network to provide information on procedures, queries, tax refunds and have comprehensive website with regular updates on information, status of refunds and FAQs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Process returns in chronological order on first-come-first-serve basis as per return receipt numbers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Scrutinize taxpayers by transparent norms (computer software to highlight cases).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Educate taxpayers (seminars, training programmes, open house discussions) and employers must train new recruits on IT procedures.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Each tax office to have government appointed advocates who resolve issues.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. <b>IT employees should be suitably trained, motivated, rewarded and empowered.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. <b>Strict action against defaulting employees should serve as a deterrent. </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. <b>Aspire for having a world class taxpayer system.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. <b>Establish a tax culture which is based on trust and where taxes are paid willingly.</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Also see our</font></strong> <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5414" target="_blank">Cobweb</a></u> <strong><font color="#663399">today. </font></strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a> </font></p>
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