TIOL-DDT 2929
14 09 2016
Wednesday

THE GST Council is to make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

The Union Cabinet on 12th September approved the setting up of the GST Council, which is scheduled to have its first meeting on 22nd of this month in New Delhi. The Council consists of the Union Finance Minister as Chairman, the Union Minister of State, Revenue and the Finance Ministers of the States as Members. The Central Revenue Secretary is the Ex-officio Secretary to the GST Council.

The IRS (All India Association of IRS Customs & Central Excise Officers) is not amused. In a resolution submitted to the Finance Minister and Revenue Secretary, the Association states,

Considering that the officers of IRS (C&CE) service have requisite expertise of performing various functions of Indirect Tax Administration such as administrative functions, quasi judicial role, technical knowhow, enforcement work and audit and are successfully implementing indirect tax administration in the country in a wholesome and comprehensive manner, it is the responsibility and determination of the service to successfully and smoothly implement the GST in the country without any hurdles.

The Association wants that:

1) No post of the organization should be reduced considering the huge workload and revenue collection challenges ahead.

2) If any posts are diverted outside CBEC, it should be encadred to the IRS (C&CE) service and to be filled by IRS (C&CE) officers only.

3) Since revenue collection of CGST & IGST is to be handled by IRS (C&CE), the following posts in the GST Council Secretariat should be from IRS (C&CE) by encadrement:

(i) Secretary to the GST Council (to be held by an officer of the rank of Member, CBEC).

(ii) Addl. Secy. to the Council be filled in by an officer of CBEC in the HAG pay scare.

(iii) 50% posts at the level of Joint Secretary, Directors & Under Secretary should be held by IRS(C&CE) Officials.

Some 15 months ago, I asked a Principal Additional Director General in the Directorate of Systems of CBEC about what they were doing about GST. He said, "We are GST ready" and the Government created a Private Limited Company GSTN to manage GST.

The IRS Association says,

Management of GSTN be entrusted to DG systems of CBEC, as GSTN is a newly created SPV, which does not have any experience in implementing any IT project or domain knowledge in Indirect Tax laws. Since GSTN is funded by the Central and state Government, there is no justification in entrusting the management of GSTN to private individuals with heavy salary and allowances. DG systems has experience of implementing Mega Pan-India IT projects for over twenty years and has the necessary domain knowledge and expertise to manage GSTN.

The CBEC Chairman is a permanent invitee to all the proceedings of the GST Council. Has the IAS stolen the GST thunder from the IRS?

The IRS Association General Secretary Shrawan Kumar Bansal says that his Service consists of a rare dedicated talented pool which has to be used by the Nation. He says the GST Council needs the expertise of the IRS more than the co-ordination of the Revenue Secretary. He promises a successful, efficient and hassle-free GST - only handover the entire GST to the IRS.

Will the CBEC become irrelevant in the GST regime?

Customs - Rules of Origin - CBEC Instructions

INDIA has signed Free/Preferential Trade Agreements / Comprehensive Economic

Partnership/ Cooperation Agreement (FTA/CEPA/CECA) with a number of countries and trading blocks.

Rules of Origin are notified under each of the Agreements which require the importer to, inter alia, make a claim for preferential tariff at the time of importation, and submit a Certificate of Origin (COO) in the prescribed form.

The Rules of Origin and the Operational Certification Procedures (OCP) are spelt out in the customs non-tariff notifications, which inter-alia, lay down the format of the certificate of origin,the period of validity, manner of obtaining the certificate and the procedure for verification of origin. One of the usual conditions for accepting the certificate is that it should be signed by the authorized signatories whose name, signature and seal have been communicated by the FTA partner country through agreed channels. At present, the signatures and seals are received by the Board, either directly from the government of the FTA partner country or through the Department of Commerce. These specimen seals and signatures are circulated to all Chief Commissioners by the Customs V Section of the Board by email. The specimen seals and signatures are also forwarded to DRI, which circulates the paper copies to all Chief Commissioners.

Board has tasked the Directorate General of Systems to build an online repository on ICES for storing the signatures/seals to facilitate comparison by the assessing officers. DRI has been tasked with uploading the data in the database.

In the interim, it is proposed to continue with the existing system of circulation of the signatures and seals. The Board desires that in each Custom House/Commissionerate, an officer of the rank of JC/ADC may be designated to act as the custodian of the specimen signatures/seals. Should a doubt regarding genuineness or authenticity of a signature/seal/format of certificate arise in the course of assessment by the proper officer, he shall verify the with specimens held by the designated JC/ADC.

In case the specimen seal/signature is not available with the designated officer of the Custom House, the issue may be referred to Director (ICD), CBEC for verification. Requests for verification in all other types of cases must be sent to the Board with the approval of the jurisdictional Principal Commissioner/ Commissioner. The reference for verification must contain legible copies of the Certificate of Origin, invoice and the Bill of Lading/Airway Bill.

CBEC Instruction No. 31/2016 in F. No. 20000/4/2011- IC (ICD)., Dated: September 12 2016

48.8% increase in Excise Duty Collection

GOVERNMENT has received excise duty of Rs.1.53 lakh crore during April-August, 2016 as compared to Rs. 1.03 lakh crore during the corresponding period in the previous Financial Year, thereby registering a growth of 48.8%.

Service Tax received during April-August, 2016 stood at Rs.92,696 crore as compared to Rs. 75,219 crore during the corresponding period in the previous Financial Year, thereby registering a growth of 23.2%.

Receipts on account of Customs during April-August 2016 stood at Rs. 90,448 crore as compared to Rs. 85,557 crore during the same period in the previous Financial Year, thereby registering a growth of 5.7%.

Total indirect taxes receipts during this period amounted to Rs 3.36lakh crore which is 27.5% more than the net collections for the corresponding period last year.

India files new dispute with WTO challenging domestic content requirements, subsidies in US states

ON 9 September, in the WTO, India requested consultations with the United States under the dispute settlement system regarding alleged domestic content requirements and subsidies provided by eight US states (Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota) in the renewable energy sector.

The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.

Clarifications on Direct Tax Dispute Resolution Scheme, 2016

THE Direct Tax Dispute Resolution Scheme, 2016 incorporated as Chapter X of the Finance Act, 2016 provides an opportunity to taxpayers who are under litigation to come forward and settle the dispute in accordance with the provisions of the Scheme. In regard to the scheme queries have been received from the stakeholders seeking further clarity on certain provisions of the Scheme. Some of the clarifications are as:

Question: In a case an appeal was pending before CIT(Appeals) as on 29.02.2016. However, before making declaration under the Scheme the appeal is disposed of by CIT(Appeals). Is the assessee eligible to avail the Scheme?

Answer: In such a case, the declaration under the Scheme cannot be filed.

Question: In a case where the appellant has filed a declaration under the Scheme or has intimated the CIT(Appeals) his intention to file declaration under the Scheme, whether the CIT(Appeals) will dispose-off the appeal?

Answer: The CIT(Appeals) have been instructed that appeals where the appellants have expressed their intention to avail the Scheme should be kept pending.

Question: Appeal against quantum as well as penalty under section 271(1)(c) is pending before CIT(Appeals). If the assessee files a declaration in respect of the quantum appeal under the Scheme, what would be the fate of penalty appeal?

Answer: where a valid declaration under the Scheme is made in respect of quantum appeal, the appeal against penalty levied under section 271(1)(c) of the Income-tax Act, relating to the quantum appeal pending before the Commissioner (Appeals) shall be deemed to be withdrawn and the penalty or the balance amount of penalty, as the case may be, shall be deemed to be waived.

Question: Section 203(2) reads that consequent to the declaration in respect of tax arrear, the appeal pending before Commissioner (Appeals) shall be deemed to be withdrawn. From what point of time does the provision become operative?

Answer: The appeal pending with Commissioner (Appeals) shall be deemed to be withdrawn from the date on which the certificate under section 204(1) is issued by the designated authority.

Question: The addition made in assessment has the effect of reducing the loss but penalty has been initiated under section 271(1)(c) of the Income-tax Act. Is the assessee eligible to avail the Scheme?

Answer: The Scheme is applicable to cases where there is disputed tax. Since in the case of reduction of loss, there is no disputed tax the assessee shall not be eligible to avail the Scheme.

Question: In a case the time period specified under section 249 of the Income-tax Act for filing of appeal expired on 29.2.2016. The assessee filed an appeal in this case on 5.4.2016 with a request to condone the delay in filing of appeal. The Commissioner (Appeals) condoned the delay in filing of the appeal. Is the Scheme available to the assessee in such a case?

Answer: in the present case the Scheme is available to the assessee.

Question: In a case the Commissioner (Appeals) has given a notice of enhancement. Is such a case eligible for availing the Scheme?

Answer: A case where notice of enhancement has been received by the declarant before the date of commencement of the Scheme i.e. 01.06.2016 shall not be eligible for the Scheme.

Question: A survey was conducted during F.Y. 2013-14. Incriminating documents relating to assessment year 2011-12 were found and assessment under section 147 of the Income-tax Act for the said year was made based on these documents and other enquiries conducted. Is the assessee's case for A.Y. 2011-12 which is pending with Commissioner (Appeals) eligible for the Scheme?

Answer: As per section 208 of the Act, the Scheme shall not be available for assessment or reassessment on which survey conducted under section 133A of the Income-tax Act has a bearing. Hence, in the present case, A.Y. 2011-12 is not eligible for the Scheme.

Question: By filing declaration under the Scheme for one assessment year, does the taxpayer forego his right of appeal on the same issue in another assessment year?

Answer: No. The order under the Scheme does not decide any judicial issue. It only determines the sum payable under the Scheme with reference to tax arrear or specified tax, as the case may be. It only provides for a dispute resolution mechanism in respect of cases for which declaration has been made.

Question: There is no time limit specified for intimating the payments made by the declarant in accordance with the certificate issued in Form-3. Further, there is also no time limit specified for issuance of order under section 204(2) of the Act by the designated authority. Please clarify?

Answer: The declarant shall intimate the fact of payment along with the proof of the same to the designated authority within one month from the date on which time limit for making payment under the Scheme expires. The designated authority shall issue the order under section 204(2) of the Act within one month from the end of the month in which intimation regarding payment is received in Form-4 from the declarant.

Have a nice day.

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