the essay of 3 February 2021 · the untouched capture
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FEBRUARY 03, 2021</strong></font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ease of Doing Business - for the babus </strong></font></p>
<p align="center"><u><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>By Vijay Kumar</strong></font></u></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA </strong>174 of the Budget speech: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>174. Before I come to my Indirect Tax proposals, I would like to appraise the House on GST. The GST is now four years old, and we have taken several measures to further simplify it.</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, what we now have is a simplified version of GST! Enjoy. In her efforts to <em>further simplify it,</em> the Hon'ble Finance Minister has proposed certain changes in the much misunderstood GST Act. While every comma in the Budget has been microscopically analysed by the larger number of tax experts, I would highlight a couple of amendments brought in for the apparent purpose of promoting the cause of 'ease of doing business'. Don't get confused that 'ease of doing business' is for the businessmen. After all, when the laws are written by the bureaucrats, they should ensure some element of 'ease of doing business' for themselves. With too much simplification, facilitation, transparency, grievance redress, appeals, judiciary, pampering democracy etc., it has become very difficult for the babus to administer the tax system and they badly need some measures for 'ease of doing business', their business - collection of taxes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 151 of the CGST Act reads as:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">151. Power to collect statistics.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) The Commissioner may, if he considers that it is necessary so to do, by notification, direct that statistics may be collected relating to any matter dealt with by or in connection with this Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Upon such notification being issued, the <em>Commissioner, or any person authorised by him in this behalf, may call upon the <strong>concerned </strong> persons to furnish such information or returns, in such form and manner as may be prescribed, relating to any matter in respect of which statistics is to be collected.</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under this section,</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The Commissioner should consider it necessary, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Commissioner has to issue notification, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. He can direct that <em>statistics may be collected relating to any matter dealt with by or in connection with </em>GST. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Once the notification is issued, <em>Commissioner, or any person authorised by him, may call upon the <strong>concerned </strong> persons to furnish such information or returns, in such form and manner as may be prescribed.</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, to simplify this Section, it is proposed in the Finance Bill to substitute this section with a new section which would read as:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"151. The Commissioner or an officer authorised by him may, by an order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein.".</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, the Commissioner or any officer authorised by him can:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Direct any person <em>to furnish information relating to any matter in connection with this Act, </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <em>He can also specify the time, form and manner, </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <em>There is no need of any notification or prescription of any form. Each officer can devise his own forms and manners (pun).</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What will happen if you don't furnish the information as required under section 151? The law amply takes care of that. Section 124 reads as:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>124. Fine for failure to furnish statistics.- If any person required to furnish any information or return under section 151,-</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) without reasonable cause fails to furnish such information or return as may be required under that section, or </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) wilfully furnishes or causes to furnish any information or return which he knows to be </font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>false, </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>he shall be punishable with a fine which may extend to ten thousand rupees and in case of a continuing offence to a further fine which may extend to one hundred rupees for each day after the first day during which the offence continues subject to a maximum limit of twenty- five thousand rupees.</em></font></p>
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<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bank Attachment - liberalised </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 83(1) of the GST Act reads as:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>83. Provisional attachment to protect revenue in certain cases</em></strong><em>.- (1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing <font color="#FF6633">attach provisionally any property, including bank account, <strong>belonging to the taxable person </strong> in such manner as may be prescribed. </font></em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just a look at those provisions</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">62. Assessment of non-filers of returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">63. Assessment of unregistered persons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">64. Summary assessment in certain special cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">67. Power of inspection, search and seizure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">73. Determination of tax not paid or short paid or erroneously refunded….. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud…..</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Section 83(1) is to be amended to read as:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, <font color="#FF6633">attach provisionally, any property, including bank account, belonging to the taxable person or <strong>any person specified </strong> in sub-section (1A) of section 122</font>, in such manner as may be prescribed.".</em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the whole of chapters XII, XIV and XV are included. This means that once the proceedings under any of the following headings are initiated, the taxable person's property including bank accounts are no more safe - they may be attacked, no, attached.</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter XII </strong></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">59. Self-assessment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">60. Provisional assessment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">61. Scrutiny of returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">62. Assessment of non-filers of returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">63. Assessment of unregistered persons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">64. Summary assessment in certain special cases.</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter XIV </strong></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">67. Power of inspection, search and seizure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">68. Inspection of goods in movement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">69. Power to arrest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">70. Power to summon persons to give evidence and produce documents </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71. Access to business premises. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter XV </strong></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">73. Determination of tax not paid or short paid </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud….. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">75. General provisions relating to determination of tax </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">76. Tax collected but not paid to Government </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">77. Tax wrongfully collected and paid to Central Government or State Government </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">78. Initiation of recovery proceedings </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">79. Recovery of tax </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80. Payment of tax and other amount in instalments </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">81. Transfer of property to be void in certain cases </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">82. Tax to be first charge on property </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">83. Provisional attachment to protect revenue in certain cases </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">84. Continuation and validation of certain recovery proceedings </font></p>
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<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Not the taxpayer's bank account alone </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In these proceedings, the Commissioner can attach not only the tax payer's bank account but also those of the following persons:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. supplier of any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. who issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. who takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. who takes or distributes input tax credit in contravention of section 20, or the rules made thereunder;</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember this is provisional attachment and all that is required is initiation of proceedings, a Commissioner's opinion and a property including bank account.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You find somebody guilty and hang him - perfect, but do you throttle him just because you have a feeling that he is a criminal? Are you not killing the goose because you cannot wait till morning when it may lay an egg, that too a golden one?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Gujarat High Court in <em>Valerius Industries Vs Union of India </em> - <strong><a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTUyMDcy" target="_blank">2019-TIOL-2094-HC-AHM-GST</a></strong> observed,</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The power conferred upon the authority under Section 83 of the Act for provisional attachment could be termed as a very drastic and far-reaching power. Such power should be used sparingly and only on substantive weighty grounds and reasons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The power of provisional attachment under Section 83 of the Act should be exercised by the authority only if there is a reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment. It should, therefore, be exercised with extreme care and caution. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The power under Section 83 of the Act for provisional attachment should be exercised only if there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of wholly or any part of his / her property with a view to thwarting the ultimate collection of demand and in order to achieve the said objective, the attachment should be of the properties and to that extent, it is required to achieve this objective. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.<font color="#FF6633"> The power under Section 83 of the Act should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee. </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The attachment of bank account and trading assets should be resorted to only as a last resort or measure. The provisional attachment under Section 83 of the Act should not be equated with the attachment in the course of the recovery proceedings.</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this was when Section 83 was not so draconian and had limited authority. What will happen now?</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Further Simplification needed </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Law needs further simplification for 'ease of doing business' for the taxman. Maybe we should simplify the law that:</font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The Commissioner is empowered to take any decision in relation to GST for reasons not to be recorded. (they could be suspicion, suppositions, premises, or doubts.) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Appeal against Commissioner's orders should be before an Assistant Commissioner directly working under that Commissioner (so that there are no adverse orders against revenue). </font></p>
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<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pakistan Dues</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am never tired of repeating this.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is one item consistent and uniform in all Union Budgets from 1950. If you look at the STATEMENT OF LIABILITIES OF THE CENTRAL GOVERNMENT in the Receipts Budget of India, 2021-22, you will find certain interesting figures.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India's debt by the end of March 2022 would be around rupees 135,87,275 Crores (135.87 lakh crores).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Statement of the Liabilities of the central Government, the Total Liabilities are Rs. 135,87,275 Crores. From this, an amount of Rs. 300 crore is deducted and the net liability is shown as Rs. 135,86,975 Crores.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is this amount of Rs. 300 Crores? This is supposed to be <em>"Amount due from Pakistan on account of share of Pre-partition debt (Approx)".</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This same amount had been shown consistently in all our budgets since 1950, including this year's.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 1950-51, when our total liability was Rs. 2865 Crores, this 300 Crores was deducted to arrive at Rs. 2565 Crores. Thus, the dues from Pakistan constituted slightly more than 10 percent of our liabilities. Ten percent of the present liabilities would amount to about 13.5 Lakh Crores, about 40% of this year's revenue receipts.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should we keep showing it in the budget year after year?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly, Pakistan also claims certain dues from India. The State Bank of Pakistan shows an amount of Rs. 1198,36,58,000 for the year 2020 as <em>Provision for other doubtful assets - Provision against assets held with / receivable from the Government of India and the Reserve Bank of India.</em></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Until next week </strong></font></p>
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