News Update

GST - Govt notifies fresh tax rates for GTA + renting of motor cab + jobwork of printing of newspapers & journals + composite supply of works contract to Govt agencies + exempts services provided by and to FIFA + services by Fair Price Shop + Crop Insurance Schemes + LLP to be construed as Partnership firm + services of plumbing & house-keeping through e-commerce platforms liable to registrationNITI Aayog To Launch 'Mentor India' CampaignFM reviews macro economic stability of economyMoS, PMO calls for 'Make in India' health moduleI-T - Whether Explanation to Sec 37(1) gets attracted even if there is no specific material to suggest participation of assessee in alleged kickbacks - NO: HCTreading the GST Path XXX What is "cab"?Apex Court rules Triple Talaq is unconstitutionalTrump warns Pakistan against providing shelter to terror groupsITC claim on Railway Receipt in lieu of Tax InvoiceComposite and mixed supply under GST - Golmaal ReturnsHM launches Digital Police Portal; FIRs can now be filed online in 34 States & UTsI-T - Contributions to provident fund not recognized as valid deduction u/s 80C(2)(vi), is deemed as short-deductions u/s 192 and hence taxable as 'Income from other sources' : ITATIndia's exclusive rights to explore polymetallic nodules from seabed extendedCX - Being busy with procedural requirement under GST is no ground to grant adjournment: CESTATChennai Airport Customs seizes gold worth Rs 4.6 Crore; One person arrestedGovt appoints CISF ADG Dharmendra Kumar as DG of Railway Protection ForceGlobal Forum releases compliance ratings for 10 tax jurisdictions (See 'Brief' in 'TII')PM for soil testing by hand-held devices; calls for involving startupsST - Warehouses are specifically covered under term Railways and they need not necessarily belong to railways - no tax liability on construction of warehouse for CWC in railway premises: CESTATTourism earns about Rs 15000 Cr in July monthPM congratulates OPS being sworn as TN Dy CM; to be Finance Minister alsoI-T - Whether even if assessee returns no exempt income in a particular AY, disallowance of certain expenditure incurred to earn such exempt income is warranted u/s 14 rw Rule 8D - NO: HCImport policy of Urad / Moong dal is revised from 'free' to ‘restricted’CX - When Tribunal decides that goods are exempted under notf. 50/2003, it would have direct impact on rate of duty, therefore, appeal would lie before SC: HCI-T - Remuneration paid to Artist for loss of business occasioned by virtue of non-compete agreement, is revenue receipt, if she is allowed to work elsewhere subject to payment of 5% of her earnings: HCPower Minister calls for 3Ds approach - De-carbonisation, decentralisation & digitalisationMAT Report - CBDT notifies New Form 29B with exhaustive AnnexureWhether the Government has allowed Tax payable under reverse charge to be paid through ITC? (See 'TOG Insight' in Airlines carried 657 lakhs pax between Jan to July, 2017 - A growth of 17% in trafficInter-state supply-who is liable to pay IGST?Rosneft, Russian energy giant, wraps up deal to buy 49% stake in Essar OilStreet Lighting Scheme illuminates 50,000 km of roadsI-T - Whether if a conditional grant comes from abroad, a foreign country is to be construed as a person or authority as per Explanation 10 to Section 43(1) - NO: ITAT
GST is here - Enjoy the inevitable

JULY 01, 2017

By Vijay K Kumar

Legal Corner IconNow there is no point in complaining that the Laws are confusing, that the Government is not ready, that the taxpayer is not ready, that there is going to be chaos all around. Now GST is here for real – we have no choice but to enjoy the inevitable.

We started our column "ST se GST Tak" in August 2007 with a hope that GST would come in a couple of years. But it took almost ten years to reach the "tak". The great officer who started the column for us and who we thought would be the sole author to take us through ST to GST stopped writing after a few weeks. Unfortunately, he is not with us at this historic moment.

Launching the GST at midnight, the Prime Minister who has a penchant for finding new meanings, in more senses than one, said it is a Good and Simple Tax, while many would condemn it as a Goddamned Satanic Tax. In the Good and Simple Tax, there is certainly more of tax and very little of good and simple . But the Indian taxpayer has always been a silent victim of tax terrorism unleashed by the State. The number of Tax cases pending in our Tribunals and Courts, is a monumental proof to this.

In this strange "One Tax, One Nation", we have some half a dozen taxes and the legislative weight on our heads is mind boggling. In the last count, I found that we have

1 Constitution Amendment Act

4 Acts

16 Rules

117 formats

73 Notifications (some of them already amended, even before the GST has come into force)

1 Circular.

From 0000 hours of today, every Taxpayer, rather every Indian is assumed to be fully aware of all the above pristine legislative provisions, for as they say, 'ignorance of Law is no excuse', especially on the part of taxpayers. Tax officers, lawyers and judges are exempted.

Distinguished readers of TIOL are aware of the Infinite Monkey Theorem which goes something like this.

A monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type or create a particular chosen text, such as the complete works of William Shakespeare .

Suppose the typewriter has 50 keys, and the phrase to be typed is 'one tax'. If the keys are pressed randomly and independently, it means that each key has an equal chance of being pressed. Then, the chance that the first letter typed is 'o' is 1/50, and the chance that the second letter typed is ‘n’ is also 1/50, and so on. Therefore, the chance of the first six letters spelling 'one tax' is

(1/50) × (1/50) × (1/50) × (1/50) × (1/50) × (1/50) = 1/1562,50,00,000, less than one in 15 billion, but not zero, hence a possible outcome.

From the above, the chance of not typing 'onetax' in a given block of 6 letters is 1 - 1/1562,50,00,000. Because each block is typed independently, the chance Xn of not typing ‘onetax’ in any of the first n blocks of 6 letters is

Am I trying to confuse you with a mathematical formula? Then read this 39(d) Rule of the GST Input Tax Credit Rules

(d) the input tax credit that is required to be distributed in accordance with the provisions of clause (d) and (e) of sub-section (2) of section 20 to one of the recipients 'R1', whether registered or not, from amongst the total of all the recipients to whom input tax credit is attributable, including the recipient(s) who are engaged in making exempt supply, or are otherwise not registered for any reason, shall be the amount, "C1", to be calculated by applying the following formula: -

C1=(t T) X C


"C" is the amount of credit to be distributed,

"t1" is the turnover, as referred to in section 20, of person R1 during the relevant

period, and

"T" is the aggregate of the turnover, during the relevant period, of all recipients to whom the input service is attributable in accordance with the provisions ofsection 20,;

A Good and Simple Tax indeed!

I am not complaining. If the Prime Minister says it is a Good and Simple Tax, who am I to say otherwise?

The Finance Minister said in Parliament, "if you said that a Hawaii chappal and a BMW car have one rate, then it will be a regressive tax. That is not possible." Fine, but now Gold is taxed at 3 percent while spectacles are charged at 12% and last night, the Prime Minister mentioned that the inconvenience with GST would be something akin to the slight difficulty with a pair of new spectacles.

Alright, now is not the time for ruminating on how nice it would have been if the tax was postponed by just a month, if the GSTN was really ready, if the laws were a little simple .. and so on. This is not the time to stand and stare; this is the time to do or die. We have to live with GST and as it is inevitable, why not enjoy it? Yours is not to question why; yours is but to comply.

As a nation, we get the tax we deserve and anyway as God runs this country, if there’s a problem, He will fix it, somehow. And if you don’t believe in God, soon you will.

The Prime Minister said GST is a collective effort – you can’t blame anyone individually. All the decisions of the GST Council have been unanimous

Before a medicine is launched, they usually test it on rats and rabbits, but perhaps no such facility exists or is legally required before a tax is imposed. Unfortunately, unlike the bitter pill, you have no choice with taxation of refusing to swallow.

Now that GST is in force, I hope the tax officers will read (and perhaps understand) all the above simple laws, before they embark upon enforcing them. I fervently hope that all the experts and consultants will read and understand those laws before they advise and preach on GST. As of now, we may also seek the help of astrologers, vaasthu experts and godmen.

We had to struggle to keep our column ‘ST se GST Tak’ afloat for ten years, but I have absolutely no doubt about continuing the column with the title, "In GST’s Times". Does that sound like Injustice Times?

Into that GST world, let us march confidently. All the best.


GST Rollout - Are We Ready? - Episode 2 (Concluded)

GST Roll-Out - Are we ready? - Episode 1

GST Rollout | Episode 2 | simply inTAXicating

GST Rollout | simply inTAXicating

Also See : TIOL TUBE Videos on GST


(DISCLAIMER : The views expressed are strictly of the author and doesn't necessarily subscribe to the same. Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)


Sub: enjoy the inevitable

The writeup though small stands out as one of the best. I honestly fell in love with the sentences 'ignorance of Law is no excuse', especially on the part of taxpayers. Tax officers, lawyers and judges are exempted.

Posted by sujisham sham