TIOL-DDT 2853
25 05 2016
Wednesday

IN para 152 of his Budget Speech 2016, Finance Minister Arun Jaitley said, "I propose to impose a Cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services, proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016. Input Tax credit of this cess will be available for payment of this cess."

The Finance Act 2016, Section 161 states, "There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Krishi Kalyan Cess, as service tax on all or any of the taxable services at the rate of 0.5 per cent. on the value of such services..."

Since the Finance Act and not the FM's speech has legal validity, let us accept that the tax is on all or any of the services.

What is the meaning all or any of the services? Don't all services cover any of the services? Isn't all all-inclusive? What does the government propose to cover additionally under any? There are two options; there will be cess on

1. All the services or
2. Any of the services.

Now, who will decide whether the cess will be on all the services or any of the services? Even if it is levied on all services, the Government has the power to exempt any service. Obviously all includes any.

This must be the draftsman's over-anxiety to be safe. In Dickerson's The Fundamentals of Legal Writing, it is advised,

The draftsman should use adjectives such as "each", "every", "any", "all", "no", and "some" (technically known as pronominal indefinite adjectives) only when necessary. If the subject of the sentence is plural, it is almost never necessary to use such an adjective. (e.g., "Qualified State officers shall..."; "Qualified State officers may not..."). If the subject of the sentence is singular, use the pronominal indefinite only when the article "a" or "the" is inadequate, as when the use of "a" would allow the unintended interpretation that the obligation is to be discharged (or the privilege exhausted) by applying it to a single member of the class instead of to all of them. If it is necessary to use a pronominal indefinite, follow these conventions:

(1) If a right, privilege, or power is conferred, use "any" (e.g., "‘Any qualified State officer may......").

(2) If an obligation to act is imposed, use "each" (e.g., "Each qualified State officer shall...").

(3) If a right, privilege, or power is abridged, or an obligation to abstain from acting is imposed, use "no" (e.g., "No qualified State officer may..."). 

But then law writing is itself a very complicated affair. Dickerson also said, "a draftsman must be an intellectual eunuch. He must also be an emotional oyster. However deeply he may feel about the wisdom of the policy he is called upon to express, he must submerge his own feelings and act with scrupulous objectivity."

As Humpty Dumpty said, "'When I use a word, it means just what I choose it to mean - neither more nor less."

Krishi Kalyan Cess - Just a Week away - Why is CBEC so silent?

THE Krishi Kalyan Cess (KKC) on all or any of the services will come into effect exactly a week from today. The CBEC has not yet announced whether it will be on all or any of the services. The Trade is in confusion whether to include KKC in their invoices or not. If I issue an invoice today, I cannot obviously include it as the levy is yet to come into force, but if I get the payment after 1st June, I am supposed to pay KKC, which my client will not pay. There would be unnecessary litigation. The Board should come out with guidelines and instructions as soon as possible to avoid confusion. After all, they are talking a lot about ‘ease of doing business'.

Under the 'Ease of doing business' scheme, can't they do away with all these cumbersome cesses and levy a flat rate of 15% Service Tax? Now the Service Tax invoice should contain separate entries for Swachh Bharat Cess and Krishi Kalyan Cess; these two have to be paid separately and accounted for separately. The Government can collect 15% and allocate whatever they want for their different schemes without troubling the assessees. They do have computers in North Block!

But what they mean by ‘Ease of doing business', may not exactly match with your perception of the concept.

FTP - Committee on Quality Complaint & Trade Dispute (CQCTD)

DGFT has amended the table in Para 8.01 of Hand Book of Procedures, 2015-20 to include the office of Regional Authority, Raipur under the jurisdiction of Joint Director General of Foreign Trade, Bhopal for effective handling of Quality Complaints & Trade Disputes and further introduced the setting up of the Committee in Quality Complaints & Trade Disputes (CQCTD) in the office of Joint Director General of Foreign Trade, Rajkot.

DGFT Public Notice No. 11/2015-2020., Dated: May 24, 2016

FTP - Indore SEZ Included

DGFT has amended the Appendix - 1A & Appendix - 6J of Appendices and Aayat Niryat Forms of FTP 2015-20 to include Indore Special Economic Zone.

DGFT Public Notice No. 12/2015-2020., Dated: May 24, 2016

Customs - Standard Unit Quantity Code (UQC)

THE Customs Tariff Act, 1975 prescribes only a single Unit Quantity Code (UQC) against each Tariff Item, and it is mandatory that the same is properly declared by importers/exporters/Customs Brokers in the Bills of Entry/Shipping Bills.

The Mumbai Air Cargo Complex Principal Commissioner directs that all officers and staff should ensure that only the correct and prescribed Standard UQC as per the Customs Tariff Act, 1975 is mentioned in Bills of Entry/ Shipping Bills.

It should also be ensured that the description contained in Bill of Entry is comprehensive and indicates all relevant parameters like make, model, grade, quality,specifications, brand name etc., so as to significantly improve EOI data quality and combat the menace of misdeclaration of description and under valuation.

However, he sees certain difficulties faced both by the Trade as well as Officers during implementation of the UQC norms in the following areas:

1. MRP Based assessments,

2. Where the statutory UQC is at complete variance with established standard trade practices and is unreasonable/illogical to implement

He has issued instructions in order to ameliorate genuine difficulties.

1) In respect of non-RMS facilitated bills of entry, the Group AC/DCs are empowered to waive the prescribed UQC, wherever there is non-compatibility and waiver needs to be given.

2) In case of RMS facilitated Bills of Entry, wherever the prescribed UQC needs to be waived, the concerned ACs /DCs (Sheds) are empowered to do so.

3) In case of RMS facilitated Bills of Entry, where the UQC has to be changed the Sheds officers shall have no option but to send back such Bills of Entry to the assessment group. In these cases, the Trade/Customs Brokers are required to correctly declare the UQC at the first instance itself along with the complete description of the goods including make, model, grade, brand name etc. so that such instances may not recur and clearances may not be delayed.

In the Customs Tariff, the UQC for tampons under 9619 00 20, is Kg.

Principal Commissioner of Customs (Import), Mumbai-III Air Cargo Complex, Mumbai Public Notice No. 05/2016-17., Dated: May 18, 2016

Customs - Selection of export packages for opening & examination

IT has been observed that in the case of Shipping Bills assessed through assessment section of the office of the Commissioner of Customs (IV), Air Cargo Complex, Sahar, Mumbai, the assessing officers usually give an examination order inter alia containing instructions to open and examine a certain percentage of the export packages covered by any particular Shipping Bill. This percentage normally varies between 10-20% of the packages/ consignment depending upon. various factors. However, the assessing officers are not in a position to specify as to exactly which package are to be opened and examined by the export shed officers, as they are not aware as to how the numbering of packages have been done by the exporter because they are assessing the Shipping Bills based on the details as provided in the EDI system.

It has been decided that henceforth in the case of Shipping Bills assessed by the assessing officers giving percentage of packages/ consignment to be opened and examined, once the Shipping Bill is registered in export shed, the shed Superintendent will specify on "C" form as to which package nos. (depending upon the percentage specified by the assessing officer) are to be examined by the Examining Officer / Preventive officer deputed for examining the said export consignment covered by that particular Shipping Bill.

The concerned Examining Officer/Preventive officer deputed for examination of that particular export consignment will report in the system that as per shed Superintendent orders on "C" form", examined the specified package nos.

Commissioner of Customs, Air Cargo Complex Standing Order no. 04/2016., Dated May 18, 2016.

Pakistan Customs Tribunal - No Head - Same Problem like our CESTAT

THE Pakistan Customs Tribunal has a problem similar to our CESTAT. One common feature, both the Tribunals without a President/Chairman and that has some real legal issues.

Just like our CESTAT, the Pakistan Customs Act stipulates that "The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the Chairman from amongst the members thereof." If there is no Chairman, there cannot be Benches!

The petitioners maintain that post of the chairman is vacant since four months which has led to chaos at the Appellate Tribunals which are dysfunctional.

Until Tomorrow with more DDT

Have a nice day.

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