TIOL-DDT 2959
28 10 2016
Friday

IN yesterday's DDT, I had written, "But how did this become a Non-Tariff Notification? Board seems to have lost track of basic classification of notifications, whether Tariff or Non-Tariff.". I got several calls from concerned netizens - many from the department - asking me to explain the difference between Tariff and Non-Tariff Notifications. I too made several calls to find out the general perception about this and strangely, there is not much clarity even among departmental officers.

I tried to get some wisdom from that citadel of knowledge for Indirect Taxes, which is on a mission to educate the departmental officers and has embarked upon a massive training programme to preach and teach GST. I am referring to NACEN - the National Academy of Customs, Excise and Narcotics, which is recognised as an international Centre of Excellence.

In an e-book meant for departmental officers, NACEN explains the concept as:

Difference between Tariff and Non-Tariff Notifications

Tariff Notification is a notification which contains matters relating to tariff i.e. rate of duty. In other words, any notification having impact on effective rate of duty or in other words, providing for lower rate of duty (i.e. effective rate of duty) than the prescribed tariff rate of Central Excise duty/Customs duty, would be termed as Tariff Notification. The duty exemption provided through tariff notification may be either full or partial exemption from payment of duty/tax. Further, such exemption from payment of duty may be unconditional or may be subject to fulfillment of condition (s) specified in the notification. On other hand, notification used for amending existing rules or laying out new rules/ regulation or implementing various other provisions of the tax Statute, which does not have any impact on rate of duty, are called Non-Tariff notifications.

Non-Tariff Notification is distinguished from a Tariff notification by putting (N.T.) after the notification number. The words i.e. Central Excise or Customs or Service Tax is written just after number to distinguish as to whether notification issued relates to Central Excise or Customs or Service Tax law.

While Tariff and non-tariff notifications are distinguished in case of Custom duty and Central Excise duty, by putting letters NT in case of non-tariff notification, in case of service tax, no such distinction is made. In service tax, notification dealing with exemption from payment of service tax or dealing with amendment of rules etc. are numbered in the same manner, as the rate of Service Tax is prescribed in Section 66B of the Finance Act, 1994 itself and there is no separate Tariff Act for Service Tax.

The History:

Till 1988, there was no distinction between Tariff and Non-Tariff Notifications. They were plain customs or Central Excise Notifications. On 10.02.1988, CBEC issued a Circular No. 10/1998, wherein it was informed,

With effect from 1-1-1988 it has been decided to allot separate running serial numbers to Non-Tariff Notifications, i.e. Notifications issued under the various provisions of Central Excise and Salt Act, 1944 and Rules made thereunder, other than under rule 8 of the Central Excise Rules, 1944. Such Non-Tariff Notifications will be followed by the words "Non-Tariff" in abbreviated form as indicated below:-

Notification No....................................... /88-CENTRAL EXCISES (N.T.)

And once in a way, the CBEC itself gets confused as to whether a notification is plain or Non-Tariff. I have recounted such an instance recently in DDT 2885 and 2886 - CBEC Rescinds the Wrong Notification.

What's in a name? that which we call a rose
By any other name would smell as sweet

- William Shakespeare

Transferability of goods imported/procured by debiting duty in SFIS scrips - Ministry Clarifies

THE Drawback Division in the Department of Revenue in the Ministry of Finance clarifies:

(a) The goods imported/procured utilizing SFIS Scrip issued in terms of FTP 2009-14 may be sold/transferred on completion of 3 years from the date of clearance of import/ procurement in terms of the Department of Commerce notification no. 30 dated 1.8.2013.

(b) Requests for sale/transfer of goods imported/procured utilizing SFIS scrip issued in terms of FTP 2004-09 shall be considered by DGFT in terms of para 2.5 of FTP 2004-09 on merits keeping in view the spirit of the High Court's order to the effect that transferability of goods that have completed 3 years is not deniable only on the ground that imports were in terms of the FTP 2004-09.

(c) In view of DGFT conveying interpretation under para 2.3 of FTP 2004-09/2009-14 that the provision of transferability after 3 years is not applicable to consumables (including food items and alcoholic beverages) since such consumables are meant to be consumed in the course of day to day business of the applicant, such consumables are non-transferable even after 3 years.

DGFT would also consider, on merits under para 2.5 of FTP 2004-09/2009-14 requests for export sale of goods any time after import/procurement, subject to such export being without claim for any export incentive, rebate, refund, drawback and/or re-credit of incentive and the bringing back into India being treated as a fresh import.

Circular No. 49/2016-Cus., Dated: October 27, 2016

Higher DA for Babus - Serving and Retired

SOME fifty lakh central government employees are to get an additional instalment of Dearness Allowance at 2% of the basic pay from 1st July 2016. This will be on the enhanced pay as per the 7th Pay Commission Report. More than 50 lakh pensioners will also get a similar benefit.

The Dearness Allowance (DA) is paid to Central Government employees to adjust the cost of living and to protect their Basic Pay from erosion in the real value on account of inflation. DA is based on the All India Consumer Price Index (Industrial Workers) which was 269 on 1.1.2016 and stood at 280 on 1.7.2016. The inflation upto 1.1.2016 was subsumed in the new basic pay fixed on 1.1.2016, which was 2.57 times the prevailing basic pay. The DA hike will cost the nation 3748 crores of rupees in this financial year.

Current Rate 8.95; Target 14.1; Asking Rate 19 - No this isn't Cricket - It's Income Tax

THE budget collection figures as on 30th September, 2016, show growth in net collection of direct taxes of just 8.95% as against the targeted growth of 14.1% for the current fiscal year. This gap of about 5% between the current growth rate and the targeted growth rate for the year has resulted in an asking growth rate for the next 6 months to the tune of almost 19% which will have to be reached in order to achieve the revenue targets.

The CBDT Chief wants her staff to do better batting in the second half to reach the target even though the asking rate is a high 19.

The CBDT Chairperson, Ms. Rani Singh Nair in a D.O Letter to the Principal Chief Commissioners says:

+ Performance in area of Personal Income Tax (PIT) is showing growth of 19.59% up to the second quarter as against the asking rate of 22.93% indicating a shortfall of Rs.3871 Crore. The Advance Tax Collection of PIT shows a figure of Rs.1,38,360 Crore as against the collection of Rs. 1,15,699 Crore up to second quarter of last financial year. The PIT collections are partly due to advancing of one instalment of Advance Tax and the TDS collections on account of 7th Pay Commission.

+ The Advance Tax collection figures of Corporation Tax up to the second quarter of the current financial year show collection of Rs.1,85,375 Crore as compared to Rs.1,80,746 Crore collected up to second quarter during the F.Y. 2015-16. This indicates a growth of 2.56% only as against the asking rate of 8.62%, indicating a shortfall of Rs.10,954 Crore in the area of Corporation Tax.

+ From the comparative report of net Corporation Tax collections region-wise, it is seen that some of the PCCIT regions have shown growth rates much higher than the asking rate whereas some others have shown a negative growth or a growth rate much below the asking rate. Economic realities in the country being more or less the same in various regions, such vast oscillations are not justified.

+ We still have about five months to go in the current fiscal year. I would expect each PCCIT to personally monitor budget collection. Effective strategies and administrative measures for achieving a healthy growth rate in net collection of direct taxes may be devised. The Zonal Members may be apprised within a fortnight regarding the strategies being deployed in this sphere.

CBDT Chairperson DO.FTS No.92812/2016/Ch(DT)., Dated: October 26, 2016

Will CGST Officers wear Uniform?

MORE than six years ago in DDT 1414  on 02.08.2010, I wrote:

ONE of the relics which the Central Excise and Service Tax Department should perhaps get rid of in the GST regime is the funny uniform that you see Inspectors, Superintendents and Assistant Commissioners in.

In a recent order, the CENTRAL INFORMATION COMMISSION, observed, "It is seen that the CBEC has not formulated clear guidelines about the use of uniform by officers, Equipment Advances and its relationship with the uniform usage, etc. Apparently, these rules did exist a long time ago before Independence and had been followed more in the form of conventions than any set written directions. Now that this point has been raised, CBEC may consider issuing detailed and clear guidelines in this regard."

This order was given by the Commission in January 2010 and apparently, so far nobody in the Board has considered this issue. This should be an important issue for consideration for GST Implementation-It will be ridiculous if the CGST officers wear uniform and the SGST officers don't. Any way the uniform in Central Excise commands more ridicule than respect.

Sometime back Dr. DD Rishi, Commissioner of Customs and Central Excise (now retired), writing in the irsonline observed,

"About 27 years ago, while being posted as the Senior Superintendent of Central Excise, I was attending a meeting with the Commissioner. I saw another Senior Superintendent there. To my surprise she was wearing an Ashoka Emblem along with a star on her shoulder while I was wearing only an Ashoka Emblem. "Madam, Senior Superintendent's uniform should have only the Ashoka Emblem while that of Assistant Collector (now Assistant Commissioner) has a star in addition". "Is it so? But nobody told although I have been wearing it for last one year!" "Are you sure?" "I am not sure but I think so.". "OK, then, let us be uniform", she stripped the star off her shoulders mercilessly. A sacrifice for the sake of uniformity of uniform.

Recently I was attending a function organized for Presidential Awards in Delhi. Some of the awardees were wearing uniforms while others were wearing what they considered to be "uniform". Anyhow, no two uniforms matched in colour, shade or style. But that is what we call 'Unity in Diversity'. Yesterday, from the latest batch of probationers, some were wearing Ashoka Emblem plus a star, while others were wearing just a star. Those wearing just a star explained that they had been under the impression that they could wear Ashoka Emblem plus a star only on completion of their probation. I don't know who will make the sacrifice for the sake of uniformity of uniform this time.

Impressions determine the rules. And the impressions are as mysterious as the uniform of a uniformed service."

Let us not take this archaic joke into the GST.

Until Monday with more DDT

Have a nice weekend.

Mail your comments to vijaywrite@tiol.in