TIOL-DDT 2723
12 11 2015
Thursday

THE revenue Boards are on an 'Ease of Doing Business' drive. The CBEC issued a Circular on Speedy disbursal of pending refund claims of exporters of services under rule 5 of the CENVAT Credit Rules.

This year having been declared as the Year of Taxpayer Services, the Board has accorded primacy to speedy sanction of refunds in case of export of services. So, the Board has drawn up a scheme to fast track sanction of refund of accumulated CENVAT credit to exporters of services. This scheme is not a substitute for the various notifications but is meant to complement them and is aimed at enabling ease of doing business. The Scheme is applicable to refund claims filed on or before 31.03.2015. These should have been cleared before 01.07.2015 - obviously many refund claims are pending.

All you have to do to avail the scheme is

1. to file a certificate from the statutory auditor in the case of companies, and from a chartered accountant in the case of assessees who are not companies and an undertaking, in addition to other documents required to be filed along with the claim.; and

2. file an undertaking.

Now here is the catch:

What is the Chartered Accountant required to certify? He has to certify that:

1. The refund claim is complete in all aspects with all the relevant documents and has been filed within the prescribed time limit.

2.The amount claimed as refund is correct as per their books of accounts and relevant records and the same is in accordance with the provisions of rule 5 of the CENVAT Credit Rules, 2004, read with the notification no. ____________ issued thereunder.

4. The claimant is eligible to take CENVAT credit in terms of the CENVAT Credit Rules, 2004, for the amount which is being claimed as refund.

5. The services which are claimed to be exported, qualify to be treated as exports in terms of the rules in force at the time of the said export.

Which Chartered Accountant is going to give this kind of certificate? Whether an assessee is eligible for credit, whether they satisfy all the rules and notifications, whether a particular transaction amounts to export are all legal issues on which the Department has to adjudicate. How can the CA take the role of the Departmental adjudicator?

If a CA gives you that certificate, you can get a provisional refund of 80% of the amount claimed within five days. But don't rush to claim this provisional refund. If the department feels that your refund was wrong, they will issue a notice and if the demand is confirmed, you will have to return the money to the Government with interest ranging from 18 to 30%. Borrowing money at such high interest rate may not be a wise business proposition.

Let us congratulate the Board for this scheme which is claimed to be aimed at 'ease of doing business' and let us hope that happens. The field is notorious for frustrating all good aims of the Board and Government with consistent disobedience of Board instructions. Let us hope this scheme is successfully implemented and some refunds are actually given. Many officers feel that there is an unwritten ultimate law that "thou shalt not refund".

Today we bring you two articles on this subject from two distinguished advocates who are also qualified chartered accountants. Please see our Guest Column 01 & Guest Column 02.

What about Central Excise?

A concerned Netizen wrote to us, "The circular is unfair as it is applicable only to Service Exporters and not to manufacturer exporters who are also crippled with the delay in refund under rule 5 of CCR, 2004.

It is therefore, requested that the Board issues a clarification that the Circular is applicable/ extended to manufacturer exporters too.

Within the same Board, why this discrimination?

CBEC Circular No. 187/6/2015-Service Tax., Dated:November 10, 2015

GST - Empowered Committee needs a new Chairman

THE much delayed GST has suffered yet another setback with the resignation of the Kerala Finance Minister KM Mani.

The Empowered Committee of State Finance Ministers was originally set up on 17th July, 2000 by the Government of India with the State Finance Ministers of West Bengal, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh, Gujarat, Delhi and Meghalaya as members with an objective to monitor the implementation of uniform floor rates of sales tax by the States and Union Territories, to monitor the phasing out of the sales-tax based incentive schemes, to decide milestones and methods of the States to switch over to VAT and to monitor reforms in the Central Sales Tax system existing in the country. Subsequently, State Finance Ministers of Assam, Tamil Nadu, Jammu & Kashmir, Jharkhand and Rajasthan were also notified as the members of the Empowered Committee. On 12th August, 2004, the Government of India decided to reconstitute the Empowered Committee with all the State Finance/Taxation Ministers as its members.

Dr.Asim Dasgupta, Finance Minister of West Bengal was the Chairman of the new Empowered Committee from its inception till the year 2010-11. Sushil Modi, Finance Minister of Bihar took over in 2011 July. The Finance Minister of Jammu & Kashmir, Abdul Rahim Rather took over in July 2013 as Sushil Modi had to resign consequent to his exit from the Bihar cabinet. After Rather lost his post in Jammu and Kashmir, Kerala Finance Minister KM Mani took over in March 2015. Mani was the senior-most Finance Minister and legislator in India. He has been an MLA for the last 50 years without a break and he has presented more than 10 budgets. In fact, he is so identified with budgets that the Cochin University has a centre named after him - KM Mani Centre for Budget Studies. Please see DDT 2503 & 2566.

And now Mani has resigned his post as Finance Minister of Kerala and that means he loses the Chairmanship of the GST empowered committee. And we have to find a new Chairman to take GST forward.

State Finance Ministers may not come forward to head the Committee for fear of losing their original job.

KM Mani resigned after the Kerala High Court made some remarks in a case where it was alleged that he took a bribe of one crore rupees from the Kerala Bar Hotel Owners' Association.

The High Court observed,

I am reminded of the Shakespearian saying that 'Caesar's wife must be above suspicion'. The fundamental principle that justice is not only done but it should appear that it is done, is applicable not to the judiciary alone; whereas, it is equally applicable to the other two pillars of the State also. In a case like this, it is quite natural that the common man may entertain a feeling that there cannot be a proper investigation by a State Machinery when the accused, against whom fingers are pointed out, is continuing as a Minister. I have noted an instance wherein even the learned Advocate General had to be bypassed by the Director of Vigilance to obtain a legal opinion from outside. Of course, I am not finding fault with the Director of Vigilance on that score. I have gone through Ground K in the Original Petition, which says:-

"The opinion of the Advocate General of the State or any Law Officer under him was not attempted, since the accused is also the Law Minister of the State and the Director made an honest attempt to get the best opinion from other experts on the issue."

Whether the common man should pay for that also? I am not making any further comments on it, as this Court is not invited to answer such questions. I am leaving that question to the conscience of the accused.

The State had flown in Senior Advocate Kapil Sibal as its counsel.

Subir Gokaran to be IMF Director

THE Appointments Committee of the Cabinet has approved the appointment of Dr Subir Gokaran as Executive Director representing India, Bangladesh, Bhutan and Sri Lanka at the International Monetary Fund.

Dr. Gokaran is a former Deputy Governor of the Reserve Bank of India and a Chief Economist in CRISIL.

DoPT F.No.36/01/2015-EO(SM-I)., Dated:November 11, 2015

Procedure for Registration and Monitoring of DEEC/ADVANCE AUTHORISATION SCHEME

THE JNPT Customs has prescribed the procedure for Registration and Monitoring of DEEC/ADVANCE AUTHORISATION SCHEME.

Procedure for Registration of Advance Authorization: The Advance Authorization Holder (AA Holder) would submit the hard copy of Advance Authorization (AA) along with requisite documents (in terms of Public Notice 78/2009 dated 21.10.2009, as amended to the TA/STA, DEEC Monitoring Cell (DMC) for registration of the AA. The concerned Examining Officer/Preventive Officer of DEEC Monitoring Cell will check the alert and/or pendency pertaining to earlier DEECs/AAs, if any, with respect to the AA holder, if any, and forward the file to the Superintendent, DMC with suitable remarks/noting.

Registration of Advance Authorisation issued after fulfillment of Export Obligation .

(a) After scrutiny of the documents, the Superintendent, DMC will accept the registration of the AA in EDI System and return/handover the original documents alongwith the AA to the AA holder or his representative.

(b) With respect to execution of bond specifying a condition that the imported material will be used in the factory of the advance authorization holder or the supporting manufacturer for the manufacture of dutiable goods, the importer will have an option to furnish one time Bond in respect of a particular AA for all future import consignments at JNCH under the said AA subject to following conditions:

1. The bond shall mention about liability clause for all imports made under a particular AA from JNCH under the said AA as prescribed under Notification;

2. In case the authorization contains name/names of co-licensee/supporting manufacturer, the bond to be executed by all such parties making them jointly and separately liable for violation of any post import conditions of the import;

3. The Bond will be executed in two copies i.e.  "Custom copy"  and  "Importer's Copy"  and will contain a debit sheet attached with both the copies.

4. At the time of registration of the AA, Bond details will be entered in the system and the Bond will be debited at the time of each clearance. Simultaneously, the “Custom's Copy" and the 'Importer's Copy' will also be debited and corresponding entry in bond register will also be made by the TA (Appraising Group)which will be countersigned by the AO and AC of the Appraising Group.

5. The Examination order in such consignments will require production of the debited copy of bond at the time of OOC.

Registration of Advance Authorisation issued before fulfillment of Export Obligation:

(a) The Superintendent, DMC will scrutinize the AA details and other documents received and examine the Bond/BG submitted by the AA holder.

(b) In case the documents are in order and the AA holder has submitted the requisite Bond and BG for registration of AA, the Superintendent DMC shall forward the file to the TA/STADMC for generation of job acknowledging that bond and BG have been accepted by him. The file then be forwarded to AC/DC DMC for acceptance of job for Bond and BG on the hard copy of Bond and BG and in the EDI system. The registration of the AA will then be accepted by the Superintendent, DMC in EDI system.

(c) In case exemption from furnishing Bank Guarantee is claimed by the AA holder in terms of Board Circular 58/2004-Cus, as amended, the Superintendent, DMC will put up the file to AC/DC DMC for approval of BG Exemption claimed by the AA Holder. The concerned officers are being instructed to decide the quantum of Bank Guarantee, if any, on the same day.

JN Customs Public Notice No.87/2015-2020., Dated: November 05, 2015

Tax Payer service Centre in Bangalore Customs

THE Bangalore Customs has brought to the notice of all Importers, Exporters, Customs Brokers and other members of the Trade that a "Tax Payer Service Centre" for Bangalore City Customs Commissionerate is set up on 4th Floor, Annexe to Central Revenue Building, Queen's Road, Bangalore. The "Taxpayer Service Centre" is a single window system for accepting / handling all taxpayer's queries, complaints, grievances etc., and a unique acknowledgement number will be generated on the spot for future reference of the taxpayer and the disposal of the query/complaint/grievance etc., filed at the Taxpayer Service Centre shall be monitored at the level of Commissioner so as to ensure prompt and effective disposal. The "Taxpayer Service Centre" will start functioning with immediate effect.

The setting up of "Taxpayer Service Centre" is as a measure of Government's initiative to improve "Ease of Doing Business" and also the Department has declared the current year as the year of Taxpayer Services.

All Importers, Exporters, Customs House Agents, Customs Brokers and other members of the Trade are advised to make use of the "Taxpayer Service Centre".

The Centre is headed by a Superintendent as 'Senior Tax Facilitator', assisted by an Inspector as 'Tax facilitator'.

Hopefully, this centre is not a fly-by-night affair like the much fancied 'Help Centres' that mushroomed a few years ago.

Bangalore Customs Public Notice No. 19/2015., Dated November 06 2015

Until Friday with more DDT

Have a nice day.

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