TIOL-DDT 2871
20 06 2016
Monday

GOVERNMENT seems to be determined to bring in GST, if possible with Congress support, if necessary without it - provided the numbers add up in the Rajya Sabha.

"I will, till the last day, continue to persuade the Congress to see reason so that they don't go back on the bill they themselves introduced. ...However, if the Congress persists with its opposition, ultimately a vote in the Rajya Sabha can only decide… what other options we have?", said the Finance Minister in an interview to a TV Channel.

The Communist Finance Minister of Kerala who now supports GST writes:

The GST would have been a reality had it not been for the disruption of compensation payment by UPA Union Finance Minister P.Chidambaram and thoroughly opportunistic disruption of the consultations by the BJP states in 2010-11. It was the Madhya Pradesh Finance Minister Raghavji, who led BJP's disruptive charge but it was also clear the BJP State Governments including Narendra Modi's Gujrat did not want the GST to be passed during the UPA regime. Interestingly, their main objection was abridgment of States' rights. It was a complete turn around from their election manifesto which had promised passage of GST, if voted to power.

CPI(M) has always expressed its serious reservations against the efforts to integrate the indirect taxes in India into VAT or GST. The indirect tax reforms are a part of the globalization process with the aim of designing a tax regime which would integrate not only the regional markets but also remove all burden of the indirect taxes on internationally traded goods. Specifically, in the context of India, the introduction of VAT and GST will seriously undermine the limited taxation rights that the States are enjoying. The fiscal autonomy of the States already constrained by the FRBM Acts would be further constrained when sales taxes, luxury tax, entertainment tax, various entry taxes etc are subsumed into single national VAT/GST. ...

Therefore, no one need to have any illusion that after the VAT regime was ushered in the States still have the taxation rights enshrined in the Constitution. Therefore, there is very little further to lose with the introduction of GST. Even the formal constitutional amendment can only make de facto reality into de jure reality. On the other hand, there can be a gain with the introduction of GST. The States gain right to tax Services, a right that was wantonly surrendered to the centre in the seventies. And remember, Service Tax is currently the most buoyant of the taxes. Having accepted VAT, sooner we move to GST better for the States...

But there are many issues that have to thrashed out before we can move to a consensus...

If BJP is serious about passing the constitutional amendment in the Monsoon session, without which there is no hope whatsoever of introducing the GST in next fiscal, the Union Government should call an all party meeting for frank discussion of the issues remaining. It is not sufficient to have meeting of the state finance ministers or bilateral talks between BJP and Congress. An all party meeting before the monsoon session is the need of the hour. I hope Union Finance Minister Arun Jaitley will take this much needed initiative .

Dr. Subramanian Swamy says, "I don't think GST is going to be a game-changer. If it comes, it is ok. If it doesn't come also it is ok."

25% Customs Duty on Wheat to Continue

AS per Sl. No. 34 of the Table to Notification No. 12/2012-Cus, dated 17.3.2012, the effective rate of Customs duty for import of wheat is 25%. But as per the proviso (ac), this exemption is not applicable on or after the 1st day of July, 2016. Now the Government has omitted this clause thereby continuing the existing effective rate of 25%.

This duty is to check cheap imports. Flour millers near the port cities in South India have been importing it because it is cheaper to buy from countries such as Australia than transporting the grain from Northern and Central States.

Notification No. 38/2016-Customs., Dated June 17 2016

Can Customs officers make endorsements on passports of passengers?

IN a meeting of the Trade Facilitation Committee of the JN Customs last month, a point was raised,

At present all the passengers' passports that are required for clearance under Transfer of Residence are being endorsed by Customs. These endorsements of TR and mini-TR, being done on the passport, create problems at foreign immigrations. They have requested that the practice of endorsements on passports may be discontinued & also requested to issue an appropriate Office Order to facilitate the passengers.

The Commissioner of Customs replied,

Endorsement on the passport is done as per Standing Order No. 01/2010 to check and monitor the eligibility condition of Transfer of Residence while claiming the TR benefit by the passenger. If endorsement on the passport is not done, then passenger can avail TR benefit in any other ports like Mumbai Docks &ACC, Chennai, Kolkata etc. However, the members of Committee were requested to give a detailed representation/write up on the matter .

In Standing Order No. 01/2010, it was stipulated that in case benefit under Rule 5(c) or Rule 8 of the Baggage Rules 1998 is granted to a passenger, endorsement on his/her passport must be made before giving out of charge.

But can the Customs Officers tinker with the passports of passengers?

In Circular No. 12/2000-Cus dated 18.02.2016, the CBEC instructed,

Reports have, however, been received that the passports are being endorsed by the Customs authorities, apparently on the request of passengers. It is stated that this practice is totally incorrect and there is no provision in the Baggage Rules to endorse Passports, which is a valuable legal document.

It may kindly be ensured that all genuine tourists are allowed to bring in their personal effects without endorsement on the passports and without payment of duty, subject to the terms and conditions prescribed in the Baggage rules, 1998.

In spite of the Board clarification, how did JN Customs issue a Standing Order that passports have to be endorsed? And they are still insisting on it!

Passport is not a document for the Customs to tinker with. Maybe the Customs can ask the Passport Authorities to allocate a few pages in the passport book for the Customs to make their endorsements and certificates.

Customs - No Uniform Procedure in Processing EDD Refunds in Mumbai

IN a meeting of the Trade Facilitation Committee of the JN Customs held on 26.05.2016, the Customs Commissioner made a candid admission.

There is no uniform procedure being followed at all the three Zones of Mumbai Customs in respect of processing of EDD refunds and the matter has already been taken up with the Chief Commissioners for uniform practice in this regard in all the three Mumbai Zones.

Why in Mumbai zones alone? Shouldn't there be a uniform procedure for the whole of India? After all Customs Act applies to the whole of India. Why should there be different procedures in different zones? Isn't it confusing to follow different procedures with different offices? What happened to ‘ease of doing business'?

Will Always Be Available to Serve My Country When Needed - Governor Rajan

NOW it's confirmed - RBI Governor Raghuram Rajan is on his way out from the RBI. He is not accepting a second tenure - not that he is getting one. In the days when there were no live telecasts and TV channels, the RBI Governor was a relatively unknown officer signing on those currency notes. Today Subramanian Swamy, News Media and the Government have made Raghuram Rajan a super hero, the kind that Bollywood stars would be jealous of.

In his message to his Staff, Raghuram Rajan says,

I took office in September 2013 as the 23rd Governor of the Reserve Bank of India. At that time, the currency was plunging daily, inflation was high, and growth was weak. India was then deemed one of the "Fragile Five". In my opening statement as Governor, I laid out an agenda for action that I had discussed with you, including a new monetary framework that focused on bringing inflation down, raising of Foreign Currency Non-Resident (B) deposits to bolster our foreign exchange reserves, transparent licensing of new universal and niche banks by committees of unimpeachable integrity, creating new institutions such as the Bharat Bill Payment System and the Trade Receivables Exchange, expanding payments to all via mobile phones, and developing a large loan data base to better map and resolve the extent of system-wide distress. By implementing these measures, I said we would "build a bridge to the future, over the stormy waves produced by global financial markets".

Today, I feel proud that we at the Reserve Bank have delivered on all these proposals .

Of course Subramanian Swamy is not impressed.

Rajan assures, "I will, of course, always be available to serve my country when needed." - if needed indeed.

The RBI Governor

THE RBI Governor has less job security than the lowest government employee. He is appointed by the Government; no specific qualifications are prescribed. The Governor shall hold office for such term not exceeding five years as the Central Government may fix when appointing him, and shall be eligible for re-appointment. The Central Government may remove the Governor from office.

As Governor, Raghuram Rajan received a gross salary of Rs. 1,98,000/- in July 2015. Though technically the Government can appoint anybody as RBI Governor, so far they have appointed people of real eminence as these names would show:

CD Deshmukh, Benegal Rama Rau, HVR Iyengar, LK Jha, S. Jagannathan, KR Puri, IG Patel, Manmohan Singh, S. Venkitaramanan, C. Rangarajan, BimalJalan, YV Reddy, D. Subba Rao and Raghuram Rajan.

There is a school of thought that Dr. Rajan should be made the Finance Minister of India, notwithstanding his green card!

Gold Goes Missing From Delhi Customs - Again

DURING a recent inventorisation proceedings in the office of the Commissioner of Customs, IGI Airport, New Delhi a sealed packet was opened. As per the records, the sealed packet contained:

(i) Gold stick coated with white metal- 975 gms.

(ii) two Gold chain of primary gold total weighing- 220 gms

(iii) four Bangles of primary gold total weighing - 78gms. Gross Total net weight- 1273 gms. (Packed in Amul Spray metal container wrapped with white cloth).

On opening the packet, it was found to contain:

(i) One white coated metal strip weighing 975 gms, of gold and

(ii) one rectangular slab (cuboid) of yellow metal having dimensions- 8.6x4.9x1.2 cm, weighing 474 gms, made of non-precious metal (not gold).

No gold bangles or gold chains as mentioned in the DR 27676 dated 24.07.89, were found in the packet.

Delhi Customs has lodged an FIR with the IGIA Police that:

It appears that the contents i.e. two Gold chain of primary gold total weighing- 220 gms and four Bangles of primary gold total weighing- 78 gms were replaced with one rectangular slab (cuboid) of yellow metal (non-precious metal), which was not made of gold .

The Police is requested to register a case against unknown persons, who have done the said mischief and enquiry/investigation may be conducted accordingly to ascertain the facts and bringing the culprit awarding appropriate action.

Exactly a year ago in June 2015, the Customs had filed two FIRs complaining about replacement in ten more packets.

The present complaint relates to a seizure made in 1989 and the gold was supposed to be lying in the Customs vaults for more than a quarter of a century. This has to be a neat inside job as outsiders do not have access to Customs vaults. But in these 27 years, how many officers must have been in charge of the vault and who can be held responsible now?

Thousands of kgs of gold must be lying in several Customs warehouses all over the country. Obviously gold is not safe in these warehouses. Government should think seriously on the measures to protect this huge inventory of gold, though when the fence starts eating the crop, pretty little can be done.

Until Tomorrow with more DDT

Have a nice day.

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