TIOL-DDT 2660
11 08 2015
Tuesday

THE Revised List of Business for Rajya Sabha for today shows:

SHRIARUN JAITLEY to move that the Bill further to amend the Constitution of India, as passed by Lok Sabha, and as reported by the Select Committee of Rajya Sabha, be taken into consideration.

ALSO to move that the Bill be passed.

The GST Bill which has almost been given up has suddenly sprung back with changes in the political equations. Now the numbers as of now in the Rajya Sabha are against the government, but it still hopes to get through and if it does, it will not only be a huge legislative victory, but a giant leap in taxation.

As this is a Constitution Amendment Bill, it requires to be passed by a majority of the total members of the House and by a majority of not less than two-thirds of the members of that House present and voting.

The present strength of the Rajya Sabha is 244. The strength of parties and groups are like this:

If all the Members are present, 163 votes are required to pass the bill. Can the Government make it?

Duty Credit Scrips - (MEIS) and SEIS - EDI Not working - Manual Procedure Prescribed

THE JN Custom House, in a Public Notice yesterday informs that due to some technical reasons, the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS)licence cannot be registered in the EDI system (ICES 1.5v).

Until the EDI module of the MEIS/SEIS scheme is operationalised, the following procedure is prescribed for the Manual Registration of Duty Credit Scrips issued under Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS):

1) The Licence holder/Authorised representative will present the original licence/scrip including Annexure, along with their photocopy, and copies of Bank Realization Certificate (BRC) to the Licence Section with a request letter for registration of licence/scrip.

2) The ACAO/Licence Section shall check the Alert Register and if there is no alert, shall endorse "No Alert" with his/her signature and stamp on the original licence/scrip.

3) Copy of verification of genuineness of scrip, will be downloaded by TA/EA (License) from DGFT Website and it will be linked with relevant file, and bring out the facts of cross check/verification, and send file to AO/Supdt (License).

4) Supdt./Licence shall confirm the genuineness of licences from the verification copy downloaded from the DGFT website. If not available, verification of genuineness of scrip may be obtained from concerned regional DGFT office vide Fax.

5) On verification of genuineness of licence/scrip from DGFT and after obtaining "No Alert", the licence/scrip may be registered manually.

6) Tax Asstt./Executive Asstt. posted in the Licence Section shall enter the particulars of licence viz. Licence No. & Date, DGFT File No., Notification No., Name of the Licence Holder, IEC No., Duty Credit amount, Licence Validity etc. in the Alphabetical Register maintained in the Licence Section.

7) Subsequent to manual registration of licence, the Licence Holder/ Authorised CHA shall present the Bills of Entry filed/Release Advices issued against the MEIS/SEIS licence to the licence section. TA/EA shall make relevant debit/credit entry in the Licence Register on the basis of debit sheet of the licence. Then he/she shall forward the Bills of Entry with the Original licence and Licence Register to the Audit clerk. The Audit clerk will put the endorsement on the debit sheet attached to the Original licence against the relevant entry and also put his/her endorsement in the licence register.

How much time will the whole process take? And how many contact points have you created?

Commissioner of Customs, NS-II, JN Custom House, Nhava Sheva P.N. No. 58/2015-16., Dated August 10 2015

Service Tax on Lawyers - Supreme Court Stays Bombay High Court Judgement

SERVICE Tax on lawyers is a tricky proposal. When asked why Service Tax was not imposed on lawyers, Chidambaram asked, "which lawyer provides service?" His successor Pranab Babu held PC in high esteem but disagreed with him and had introduced a tax on the Legal Fraternity without naming either Lawyer or Advocate.

Lawyers have gone on strike in several parts of the country and also did what they know best - petitioned the courts. Though Chidambaram's retort was taken as a joke, he was actually stating a solemn truth. Lawyers are officers of the court and their duty is to assist the court; so this service of assisting the court cannot be really taxed.

Several High Courts have stayed the Service Tax on lawyers, but the Bombay High Court took a different view and upheld the levy of Service Tax. While upholding the levy (2014-TIOL-2279-HC-MUM-ST), the High Court observed,

Profession is noble but the professional is not necessarily so.

The private law colleges and which are mushrooming do not necessarily churn out a noble professional. They may conduct and carry a course of study after completion of which they confer a degree but that hardly guarantees that the recipient thereof functions and works efficiently for the society as a whole. Thus, falling standards in the society and the urge to make quick and fast money catches up.

In present day litigation one would find parties ready to go at any length and for a favourable order. All of them do not necessarily seek justice. They are only worried and bothered about a cause which they propound and espouse. So long as that cause, whatever be its merits, succeeds, they are happy. In that process, if justice is a casualty they would hardly complain. In several instances we find that speculative litigation is instituted and pursued with full vigour and all might. Parties do not wish to give up although warned of the consequences of institution and prosecution of such a litigation. If they have brought about a situation where justice is accessible only to those with heavy purses or to wealthy or rich and hardly available and affordable for those below the poverty line and downtrodden, then, persons claiming to be professionals and advising them can hardly be said to be aggrieved.

Yesterday the Supreme Court stayed the Bombay High Court order.

One of the grounds urged before the Supreme Court was that the High Court ought to have considered that Service Tax being a Central levy, should be same all over the country and since other High Court have stayed the levy, this High Court should not have hastily upheld the tax. It was also argued that:

1. The relation between a lawyer and a litigant is not that of service provider and service recipient.

2. Rendering assistance to the court of law as an officer of the court does not amount to service at all.

3. Levy of Service Tax on the provision of assistance to the court will hit the provision of justice guaranteed under the constitution.

Now, should tax be paid on the services(if any) provided by lawyers?

Service Tax - DGCEI case on wrong CENVAT Credit on 'Bogus' invoices?

A Government of India Press Release says that the DGCEI has investigated under summons 16 Insurance Companies engaged in providing motor-vehicle insurance policies, for wrongly availing Cenvat Credit on the bogus invoices of the car dealers.

The interesting findings of the DGCEI in the case:

1. The car manufacturers enter into agreement with the Insurance Companies for appointing them as Preferred Car Insurance Companies (PICs) and instruct their car dealers to sell their insurance policies to PICs only. Such PICs pay commission on the value of the insurance policies to the car companies (in the range of 2-3%) and the car dealers (in the range of 15-45%).

2. The IRDA regulations do not allow any person other than insurance agents and insurance brokers approved by IRDA, to sell vehicle insurance policies. Further the maximum brokerage/commission payable for selling insurance policies is also capped at 10% of the premium. To circumvent these regulations, the Insurance Companies ask the car dealers to raise invoices to show that the car dealers have provided the Insurance Companies services such as advertisement, renting of computers/ printers, training, arranging customer awareness program etc.

3. As these services were never provided by the car dealers, their invoices are not permissible documents under the CENVAT Credit Rules, 2004 and the Service Tax Rules, 1994 for availing Cenvat credit by the Insurance Companies.

4. These facts have been confirmed by the employees of the Insurance Companies and the car dealers in their voluntary statements.

If there is an offence under the IRDA regulations, is the DGCEI the proper authority to deal with that? The whole charge is that the car dealers should not have paid the Service Tax (on Services alleged to have not been provided) and so the insurance companies should not have taken CENVAT Credit. Now will the car dealers get refund of the Service Tax paid by them because no service was rendered by them?Can the Central Excise authorities at the recipient end decide about the taxability of the input services?

It is reported that the Insurance Companies have decided to approach the Finance Minister and some of them have alleged that while conducting the surveys, Service Tax officials "wrote the statements as they liked and forced officials of the companies to sign such statements".

This must be the reason that the Revenue Department went public with the investigation. The issue is not even at the Show Cause Notice stage and they have not recovered a rupee from the insurance companies, out of the alleged evasion of about 2500 crores.

Any way we may have to wait for another twenty years to see the final outcome of this case. Good luck lawyers - you need to pay Service Tax!

Gujarat High Court sends notice to its own judges and a sitting Supreme Court judge

IN a Public Interest Litigation, yesterday, the Gujarat High Court sent notices to 27 judges, one of them a sitting judge of the Supreme Court, two of them present Chief Justices of High Courts and eight of them sitting judges of the same court. The rest are retired judges of the Gujarat High Court.

The issue is allotment of housing plots for the judges.

The Advocate General sought for two weeks' time to challenge this order in the Supreme Court, but the Court did not allow that and directed the Collector Ahmedabad and the Registrar of Cooperative Societies to be present in Court today when the matter would be listed before another Bench.

Government to hire retired babus

THE Union Health Ministry proposes to hire retired government servants at Assistants level. Retired Assistants/Section Officers will be considered on purely temporary basis (with no rights) on a consolidated pay of Rs. 20,000/- per month. The initial appointment will be for a period of six months or less depending on when they are going to fill those vacancies.

Maybe many government servants will be happy to work for half the salary after retirement - they will get the other half as pension.

After some time, the Government may find this a better option than hiring new young employees, who need to be trained, paid a fortune after the impending Pay Commission report and may not be all that willing or able to work.

Dept of Revenue Office memorandum in F.No. O-21030/33/2015-Coo., Dated August 05 2015

Until Tomorrow with more DDT

Have a nice day.

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