The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore bench has held that the promotional activities provided by former Indian skipper Anil Kumblein carrying advertising, promotional activity, team endorsement provided byM/s. RCSPL/franchisee/co-sponsors shall not be treated as “Business Auxilliary Services” and therefore, no service tax can be imposed on the same. The department held…
One item on the Italian cuisine that everybody is fond of is of course PIZZA. This is also apparent from the fact that after the Haryana AAAR announced a GST ruling on classification of pizza toppings, ‘Pizza’ trended on Indian twitter. Thus, there remains no doubt on the popularity of pizza and the delight it brings to the Indian public.
The Haryana AAAR has recently pronounced in the case of Khera Trading Company [TS-1354-AAAR(HAR)-2019-GST] that pizza toppings is not processed cheese and shall be liable to 18% GST since its best fits into the residuary category. With this pronouncement, there were multiple news items and media reports wherein it was highlighted that pizza will become costlier, pizza topping is not pizza and hence it shall attract higher rate of tax, etc. The narrative in these reports provide a view that the applicant of the AAR wanted to classify the pizza toppings along with the pizza and charge GST rate accordingly. However, the facts are a little different and are summarized below:
Facts of the case:
Contentions of the appellants:
The AAAR copy which is available in public domain is 23 pages long; most of which is due to the detailed contentions of the appellant. The contentions broadly relied on the following:
Held
Why so much hullabaloo?
There are various interpretations that have come out in media and news. Multiple experts have given their views and opinions on what the ruling could mean. However, what makes this ruling popular is the subject it is about. Even in past when there were rulings on paratha, flavored milk etc., it made news. Similarly, pizza is the weakness of many and hence the uproar. But technically does this ruling make sense? How will it really impact the ultimate consumer? Will your weekend pizza treats be expensive? We have answered these questions below:
Our views on the ruling:
The Uttar Pradesh AAR in the case of M/s Savencia Fromage and Dairy India Private Limited [2019-TIOL-40-AAAR-GST] wherein the question before the AAR was whether the product ‘Cheese Balls’ is classifiable as ‘cheese’ under Heading 0406, and accordingly, subject to GST rate of 12 percent each under S. No. 13 of the Schedule- II?
The AAR in the said case held that from the manufacturing process described as well as from label and packaging of goods that the items under consideration are not cheese per se but have been converted into an article of cheese having the identity and characteristics of snacks. Since the cheese balls themselves are not specified in the tariff and they are admittedly a food preparation, hence they are classifiable as ‘Food preparations not elsewhere specified or included’ under heading No. 2106 and taxable @ 18% GST. Aggrieved by the said order, the applicant appealed before the AAAR wherein the order of the AAR was modified, and it was observed that ‘cheese forms most important constituent (55% of total volume) of the product and the impugned, goods cannot be formed without cheese. The batter and bread, coating is not essential and can be easily substituted. It is only cheese that differentiates the impugned goods from any other breaded product.’ The AAAR relied on the case of Bharat Forge & Press Industries (P.) Ltd. v. CCE 1990 (45) ELT 525 (SC) to hold that ‘Under a residuary entry only such goods are covered which cannot be brought under the various specific entries in the tariff’. Therefore, the AAAR followed the principle of specific over general.
While the appellant in the present case referredthe UPAAAR ruling, the Har AAAR defended its stance on the grounds that in case of cheese balls, 55% of the constituent in the final product was cheese. Therefore, substantial portion of the goods being cheese, it was rightly classified under CTH 0406. However, in the present case mozzarella cheese is only 14.5% of the finished product and hence substantial portion in the product at hand is not cheese; thus, not classifiable under CTH 0406. Here a question that arises is where is ‘substantial portion’ defined and what exactly it means. Presence of a specific material above a given threshold would make it substantial. But what is that threshold? More than 50% or 35% or even 20%? From the given advance ruling, the Haryana AAAR seems to have interpreted it in a manner that the highest composition of a single item in any given product would make such item substantial. This means that even if a given item is 20% of the entire product, it could be substantial, provided the remaining ingredients are less than 20%.
With the above background, it is imperative to refer the rules of classification which are globally accepted. There are six general rules used in interpreting the tariff. However, the most relevant rule is Rule 3 which lays down that the heading which provides the most specific description shall be preferred to headings providing a more general description. Further, Mixtures, composite goods consisting of different materials or made up of different components, which cannot be classified elsewhere, shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.
Therefore, pizza topping should be classified under the heading which provides the most specific description – is it cheese, or an item not anywhere specifically included (to get classified under residuary entry). Well, to answer this question technically one would have to see the product and witness its manufacturing process. However, with the contentions of the appellant, one important question that comes to mind is – If the product would have been named as ‘Cheese topping’ instead of ‘Pizza topping’, would the conclusion remain same? We have our doubts as in India, jo dikhta hai vo bikta h. However, somebody could advance an argument that what’s in a name? Well, nomenclature is an integral part of the classification system. Hence, while classifying your product, it is vital to pay special attention to the nomenclature or should one say, while deciding the nomenclature, special attention should be paid to classification? This is an irony best suited to be answered by the Government itself!
How will it really impact the ultimate consumer?
There are multiple products in the food industry which are being classified under headings where they may not really fit. This impacts the GST rates that is being charged on their sale. In the current case, assuming that the appellant was charging GST@ 12% considering the topping to be cheese, it shall now be charged @ 18%. A spike in the tax to the extent of 6% will be seen. A direct impact on restaurants and kiosks who sell pizza is expected. Nonetheless, in the current scheme of things, restaurants are ineligible to avail ITC with a lower rate of output tax (5%). Therefore, any increase in input cost shall get built in the final product and make the pizza expensive for a consumer.
Even if the topping is sold to ultimate consumers through supermarkets and groceries, the price may undergo an upward revision.
A couple of weeks back, the Revenue Secretary mentioned that the Government is open to consider higher rate of tax on restaurant services with the benefit of ITC. Assuming that GST rate is increased to 12% with availability of ITC for restaurants, the industry could face the challenge of inverted duty structure. This is because the topping (which is a significant input for making pizza) would attract higher rate of tax as compared to the output. However, that bridge can be crossed when we reach there.
Conclusion
The interpretation of the AAAR in the present case is what draws attention of tax experts. The AAAR has underscored the importance of the input-output ratio of any given product. This means that for determining the classification of the any given product, the authorities are focusing on the input ingredient that is being used in significant proportion. However, in some cases (like the present one) it may go contrary to the Rule 3 cited above. Pizza topping has vegetable fat in maximum proportion; however, the base ingredient that has been contended by the appellant is mozzarella cheese. Thus, even though the base ingredient is cheese (more so, vegetable fat cannot be a main ingredient), the fact that it is not present in substantial quantity has turned the case against the appellant. Another important condition to classify goods is the common parlance test which means how a particular item is known in the market, its marketability and popularity. Additionally, a clarity on what is ‘substantial’ should be given by the revenue authorities as it shall aid the industry in the process of classification.
While the AAAR did not discuss any rules of interpretation and simply followed the substantial ingredient theory, there are bright chances of the appellant approaching the High Court. Nonetheless, till then the industry would face a dilemma even though the ruling is applicable only to the applicant; it certainly holds persuasive value for others.
[The authors are Mr. Jigar Doshi – Founding Partner, TMSL and Ms. Nikita Maheshwari – Senior Manager, TMSL. The views expressed are personal in nature. They can be reached at jigar.doshi@tmsl.in]
Mr. Jigar Doshi – Founding Partner, TMSL
Ms. Nikita Maheshwari – Senior Manager, TMSL
The Central Board of Direct Taxes (CBDT) has notified the Income Tax (5th Amendment) Rules, 2022 and revised ITR Form-7. The rules are called the Income-tax (5th Amendment) Rules, 2022, as per the notification published on 1st April 2022 revised the ITR Form-7 which is a return under section 139(4A) is required to be filed…
The Delhi bench of the ITAT has held that the assesee, HP Services (Singapore) cannot be taxed for royalty as per the Indo-Singapore DTAA for purchasing the software from Microsoft company.
The Revenue claimed that the transaction of sale of computer software to its customers implicit involved making of multiple copies of the software clearly indicates „transfer of copyright‟ and therefore the consideration received qua said transactions amounts to “royalty” as per the Act and DTAA.
The Assessee on the contrary, claimed that the Assessee purchasing the software from “Microsoft company” and as per terms of the agreement with “Microsoft” having no right to reproduce or to make any change in “off the shelf software” and therefore, the question of passing a right by the Assessee to its customers does not arise.
The Tribunal bench comprising Shri R. K. Panda, Accountant Member And Shri N. K. Choudhry, Judicial Member observed that the Apex Court in para no 173 of its judgment in the case of Engineering Analysis Centre of Excellence Pvt. Ltd (supra), clearly held that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software.
While holding in favour of the assessee, the Tribunal held that “Since, the issue of law raised in the present appeals has been conclusively decided in the favour of the assessee by the Supreme Court, no substantial question of law arises for consideration in the present appeals. It is also pertinent to mention that the appellant had admitted before the ITAT that the dispute in question had been decided in favour of the assessee by the Tribunal in earlier years. Accordingly, the present appeals are dismissed.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Central Board of Direct Taxes (CBDT) has notified ITR Forms 1 to 5 for Assessment years 2022-23.
ITR-1 is a return filing form applicable to the individual who derives income from salary, rent, and interest. ITR-4S is an income tax return form used by those assesses, who have chosen presumptive business income, and also derive their income from salary, rent, and interest.
The ITR 3 is applicable for individuals and HUF who have income from profits and gains from business or profession.
ITR 4 is to be filed by the individuals/HUF/ Partnership firm whose total income of AY 2020-21 includes as below: Business income under section 44AD or 44AE. Income from profession calculated under section 44ADA. Salary/pension having income up to Rs 50 lakh.
The ITR Form 5 is a form suitable for bodies such as firms, Body of Individuals (BOIs), Limited Liability Partnerships (LLPs), Artificial Juridical Person (AJP), Association of Persons (AOPs), the estate of insolvent, the estate of deceased, investment fund, business trust, local authority, and co-operative society
The penalty is Rs 5,000 under Section 234F of the Income Tax Act for not filing your income tax return by the due date. However, if your total income is below ₹ 5 lakh, you have to pay ₹ 1,000. The I-T department provides (since 2018) pre-filled ITRs on the online platform, but the information needs to be checked thoroughly as there are technical issues in the newly launched tax filing platform.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Ministry of Corporate Affairs (MCA) has extended the due date of Audit Trail Applicability till April 1st 2023 under the provisions of the Companies Act, 2013 by amending by notifying the rules, i.e., Companies (Accounts) Second Amendment Rules, 2022.
A notification issued by the Board in accordance with the powers conferred by sub-sections (1) and (3) of section 128, sub section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137 and section 138 read with section 469 of the Companies Act, 2013 (18 of 2013), amended the Companies (Accounts) Rules, 2014.
The relevant notification stated that “They shall come into force on the date of their publication in the Official Gazette. 2. In the Companies (Accounts) Rules, 2014,- (i) in the proviso to sub-rule (1) of rule 3, for the figures, letters and words “1. day of April, 2022”, the figures, letters and words “1st day of April, 2023” shall be substituted; (ii) in the proviso to sub-rule (1B) of rule 12, for the figures, letters and word “31. March, 2022”, the figures, letters and word “31. May, 2022” shall be substituted.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Director General of Foreign Trade (DGFT) has issued a Notification No. 64/2015-2020 dated March 31, 2022 in order to extend the validity of the existing Foreign Trade Policy (“FTP”) 2015-2020 till September 30, 2022 from March 31, 2022.
The notification issued last day stated that “in exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 read with paragraph 1.02 of the Foreign Trade Policy (FTP) 2015-2020, as amended, the Central Government hereby makes, with immediate effect, the following amendments in the FTP 2015-2020.”
“In para 1.01, the phrase ‘shall remain in force upto March 31, 2022 unless otherwise specified’ is substituted by the phrase ‘shall remain in force upto September 30, 2022 unless otherwise specified,” the Notification said.
The existing Foreign Trade Policy 2015-2020 which is valid upto March 31, 2022 is extended upto September 30, 2022.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Central Board of Direct Taxes ( CBDT ) has relaxed the provisions of TCS under section 206C(1G) of the Income Tax Act, 1961 in respect of non-resident individuals visiting India
Section 206C (1G) of the Income Tax Act, 1961 provides for the collection of tax by a seller of an overseas tour program package from a buyer, being a person purchasing such package, at the rate of 5% of the amount of the package.
Representations were received from domestic tour operators who were facing difficulties in the collection of tax from non-resident individuals visiting India who were booking overseas tour packages from such domestic tour operators. Since such persons may not have a PAN, tax is required to be collected at higher rates. Further, such non-residents may find it difficult to furnish their ITR and claim refunds.
In order to remove such difficulties, the Central Government, in the exercise of powers conferred under section 206C(1G) of the Act, has specified that the provisions of the said section shall not apply to a buyer being an individual who is not a resident in India in terms of clause (1) and clause (1A) of section 6 of the Act and who is visiting India. Hence, a domestic tour operator is not required to collect tax on the sale of overseas tour packages to non-resident individuals visiting India.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Ernst & Young Global Limited has invited applications for the post of ITTS_TP_Advanced Analyst 2.
Tax Analyst -Analyst main responsibility is to help Project Managers in developing the Client’s Transfer Pricing documentation and other Transfer Pricing related work streams including performing industry and company research using various public and private information sources.
Responsibilities:
Qualifications:
Location: Gurgaon
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
Most of us reading right here may take it as a firmly held belief that technology is actually transforming the world. Even so, economist Robert Gordon in his new publication, The Rise and Fall of American Growth, also mentions the same. He accurately refers that productivity surged within the early 20s and 70s, has held back since then and is probably to stay that way. He mentions this because earlier technologies, such as antibiotics and electricity, had wide-reaching effects, while the digital world is fairly narrow in comparison.
We have to say that it is a serious argument! Many other entrepreneurs and pioneers around the world have explained that the endpoint of technology would not be only about introducing better platforms like Netflix, Amazon, Betway Casino, IBM, Johnson & Johnson, PayPal, Sephora, etc. But also the new applied sciences like nanotechnology, genomics, and robotics. Present-day, these are just dawning to have an influence, but over the next few years, they will determine their influence too.
Nanotechnology – Exploring Tech at the Bottom
A couple of days after Christmas, Richard Feynman introduced all of us to a new genre of science in 1959, which we now call “Nanotechnology.” Of course, it goes without saying that this applied science is exactly leading to a broad spectrum of new physical elements like quantum dots. And guess what is more exciting? These elements are actually revolutionizing the electronic and digital world simultaneously. As an illustration, we can count on efficient computer systems, laptops, mobile phones, and TVs.
Apparently, Graphene is another invention of the nanotechnology world that can be used to create so many products, from incredibly light but super strong prosthetic devices to superconducting cablegrams. To understand the incredible footprint of nanotechnology, solar cells are a perfect example to go through. Evidently, we have the potential of designing materials with the properties we want. Just like robotics and genomics, nanotechnologies have also become viable. So there’s no more explanation for what the future is holding.
The Rise of Robotics
The robotics world has done a great job in all these years as we all have seen measurable benefits from it. Currently, Roomba robots that can intelligently vac home floors to the Baxter, an affordable robot enough for small businesses to buy and collaborate with human workers, to the software robots that automize travel planning, have become essential to the modern lifestyle.
In addition, we can see robots increasingly being a part of our civilian lives. A popular illustration would be the drones used to survey crops commercially. And brands like Amazon are also putting efforts to introduce drone delivery soon, and IBM is supporting medical experts to diagnose patients. Eventually, as the technology becomes better, robotics will take over many more layman responsibilities.
THE FINAL WORD
The truth is that innovation is never a single event. It demands the discovery of engineering solutions, new insights, and transformation of any field or industry. So while smartphones, booming apps, and other gaming and online entertainment platforms are cool and add convenience to our lives, the real impact of the digital world lies in front of us. However, nanotechnology and robotics are applied to completely new concerns.
The Amazon has invited applications for the post of Financial Analyst III.
Finance Analyst will be a finance partner to the relevant business team. This includes, among other things, responsibility for financial metrics, reporting, forecasting and analysis. And will be an active member of the leadership team. The successful candidate will be strategic, analytical, and have the demonstrated ability to effectively manage the finances of a high-growth business.
Responsibilities:
Qualifications:
Location: Bangalore, India
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Accenture has invited applications for the post of Senior Analyst.
Responsibilities:
Qualifications:
Location: Chennai
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Ernst & Young Global Limited has invited applications for the post of ITTS – Transaction Tax – Advanced Analyst
Responsibilities:
Qualification:
Location: Bengaluru
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
While upholding an Assessment order for unexplained credit under section 69 of the Income Tax Act, 1961, the Chennai bench of the ITAT held that it is the duty of the assessee to satisfactorily explain the credit appeared in the books of accounts with necessary evidenceand the Assessing officer was right in confirming the addition if such duty is not fulfilled.
The assessee approached the Tribunal challenging the addition in respect of unexplained credits appeared in the name of Mr. Sivaraman& Mr. K.Murugesan amounting to Rs.1,55,12,283/-. The Assessing Officer made additions towards credits on the ground that the assessee could not file any evidence to explain the credits. During the second round of litigation, the Assessing Officer has made additions towards credits on very same basis and observed that except general statement, the assessee could not furnish any specific evidence to justify credits in the name of both the parties.
The two-Member bench comprising Shri V. Durga Rao, Judicial Member and Shri G. Manjunatha, Accountant Memberobserved that the assessee claims to have filed all necessary details to justify credits and also explainedgenuineness of transaction and creditworthiness of the parties.
“However, on perusal of various facts brought out by the Assessing Officer during the assessment proceedings, what we could notice is that both parties have categorically agreed in the statement recorded during the course of search that they had worked as agents for the assessee and also received monthly income of Rs.10,000/-. They further stated that they have opened bank accounts as per direction of Mr. S.Mohan Kumar, present assessee. From the above, what is clear is that credits appeared in the name of the above two persons are not satisfactorily explained to the Assessing Officer with necessary evidence to prove genuineness of transaction and creditworthiness of parties, although, the assessee has filed certain evidences to prove identity of the persons,” he bench said.
Upholding the addition, the ebnch held that“It is well settled principles of law that when a credit appeared in the books of account of the assessee, then it is for the assessee to satisfactorily explain the credit with necessary evidence. Unless the assessee discharges its burden and explain credit, the Assessing Officer may treat the same as unexplained income of the assessee. In this case, the assessee failed to file necessary evidence to establish credits appearing in the names of abovetwo persons in the books of account of the assessee as genuine transactions.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Vodafone Idea Limited has invited applications for the post AGM – Strategic Business Finance.
AGM – Strategic Business Finance Provide support in the conceptualization, implementation and evolution of various strategic initiatives from Financial, Taxation, Company Law and Accounting point of view, overall implementation of projects (including co-ordination with various stakeholders) and handling various other Ad-hoc projects/initiatives basis the requirements of the organisation.
Responsibilities:
Qualifications:
Location: Mumbai
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Chandigarh bench of the ITAT, while quashing a revisional order under section 263 of the Income Tax Act, 1961 has held that the Principal Commissioner failed to conduct an independent inquiry before invoking such power.
The Principal Commissioner held that the assessments, as framed by the Assessing Officer, were erroneous and prejudicial to the interest of revenue as the AssessingOfficer had allegedly framed the assessments without making the requisite enquiries/verifications and without due application of mind by the Assessing Officer.
The Assessing Officer asked the assessees to furnish the relevant details relating to Long Term Capital Gain, Short Term Capital Gain, exemption under section 10(36) of the Act, deduction under section 57 of the Act and unsecured loans and the assessees furnished all the relevant documents which were examined by the AO who has taken a possible view.
The Tribunal bench comprising Shri N.K. Saini, Vice President & Shri Sudhanshu Srivastava, Judicial Member has observed that there was a due application of mind on the part of the AO in all the four cases and adequate and proper enquiries had been conducted by the AO in this regard and, therefore, the impugned orders passed u/s 263 of the Act have no feet to stand on.
Deleting the order, the Tribunal held that “We are also in agreement with the argument of the Ld. Counsel that in the cases of Sanjay Jain & Sons and Shri Tarun Jain bearing ITA No. 141/Chd/2021 and 144/Chd/2021 no show cause notice u/s 263 was issued on account of unsecured loan and hence the Ld.PCIT could not have exercised his jurisdiction to set aside the case on the issues of unsecured loan in these two cases. Accordingly, we hold that the proceedings u/s 263 of the Act were bad in law in all the captioned four appeals and we quash the revisionary proceedings for the reason that the AO had made adequate enquiries is all the four cases and further the Ld. PCIT had not conducted any independent enquiry on his own before coming to an incorrect conclusion that the assessment orders were erroneous as being prejudicial to the interest of the revenue and were liable to be set aside.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
While disposing a bunch of appeals, the Income Tax Appellate Tribunal (ITAT), Chennai bench has quashed the orders of the first appellate authorities since the assessee failed to appear during the proceedings due to Covid-19 pandemic. The two-member bench of the Tribunal comprising of Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant…
In a major setback to the Institute of Chartered Accountants of India (ICAI), The Standing Committee on Finance has tabled a report on the Chartered Accountants, the Cost and Work Accountants, and the Company Secretaries (Amendment) Bills, 2021, has proposed the Government to set up an Institute of Accounting (IIA), which is similar to the IITs and IIMs in India, with a view to providing higher quality education in the Accounting and Finance sector.
The Standing Committee on Finance’s report on the amendment Bill on three professions Chartered accountants, company secretaries, and cost accountants has come as a double setback to the three institutes, especially the CA Instituteoverseeing these professions.
The Studentspassing from such IIAs would be receiving a Certificate of Practice and they will be called Certified Professional Accountants.
The report tabled on last day stated that the qualification and licensing of Accountants in advanced countries like US, UK, and Canada are done by multiple bodies unlike in India where one Institute has a statutory monopoly over a whole profession.
Raising concerns about the scope for improving the quality and competency of the profession, the report stated that multiple bodies shall be introduced in the sector to promote healthy competition, raise standards and quality of auditing and accounting and improve the credibility of financial reporting.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Standing Committee on Finance has tabled a report on the Chartered Accountants, the Cost and Work Accountants and the Company Secretaries (Amendment) Bills, 2021 and made proposed amendments that will end the monopoly of ICAI, ICSI and ICMAI.
The panel specifically recommended the government to increase its supervision of CA Institute.
The Standing Committee on Finance’s report on the amendment Bill on three professions Chartered accountants, company secretaries and cost accountantshas come as a double setback to the three institutes, especially the CA Instituteoverseeing these professions.
The Bill further provides for timely disposal of disciplinary matters against the members of the Institute.
The Bill also sought to cover Firms under the purview of disciplinary mechanism, in the light of various recent incidents including the major corporate accounting scandals that impacted the economy.
Considering ICAI’s opposition in penalizing firms, the report said“the Bill does not intend to penalize firms for a single misconduct of it partner but repeated misconduct within a span of five years.”
The ICAI, disputed the inclusion of a non-Chartered Accountant as Presiding officer of the disciplinary mechanism.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that, Deposit in Profit & Loss Account is not ‘Duty’, Provisions of Section 11A of the Central Excise Act does not apply.
The Refund application claiming a refund of a deposit lying in Personal Ledger Account (PLA), unutilized, was made on 14/12/2018 by the appellant, M/s Marketing Communication and Advertising Ltd. The Revenue rejected the request by holding that the application is time-barred.
The Tribunal bench comprising Shri P Dinesha, Judicial Member observed that with the introduction of GST from 01/07/2017, the appellant’s deposit in their PLA remained unutilized and hence, the refund of the same was rightly claimed.
“When an amount is deposited to PLA, to be appropriated towards duty which may fall due in future and there having no appropriation, the same does not pass on to the Government unless the goods are cleared, and the duty is levied, such money lying deposited in PLA cannot be utilized. With the introduction of GST from 01/07/2017, such utilization was ruled out and hence, what the appellant sought was its own money,” the bench observed.
The bench noted that Section 11B prescribes time limitation for claiming refund of duty & interest, if any, paid.
“When the ‘deposit’ in PLA is not disputed, I am of the view that the authorities cannot treat the same, just to reject a valid and rightful claim, as anything other than the deposit. Though an attempt is made to give different colour to the ‘deposit’, but justification is not forthcoming, with due support of any valid documents, anywhere in the orders of lower authority. My above view is supported by the Final Order of Mumbai Bench of CESTAT in the case of Fluid Controls Pvt. Ltd. Vs. CCE, Pune – 2018 (364) E.L.T. 1041 (Tri.-Mumbai),” the Tribunal said.
Concluding the order, the Tribunal held that “In view of the above discussions, I am of the clear view that the appellant’s claim for refund of their ‘deposit’ lying unutilized in their PLA is perfectly valid, which being, not a duty, the time limit prescribed under Section 11B ibid. could not apply. The denial of the same is held unsustainable being contrary to the settled position of law.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
A two-judge bench of the Supreme Court has upheld the validity of the Lotteries Act enacted by the Karanataka and Kerala States by holding that ‘lotteries’ is a species of gambling activity and hence lotteries is within the ambit of ‘betting and gambling’ as appearing in Entry 34 List II.
A bench comprising of Mrs. Justice B.V. Nagarathna and Mr. Justice M. R. Shah was considering the appeals filed by the State of Karnataka and State of Kerala and others against the judgments of the jurisdictional High Courts.
The Apex Court held that the subject ‘betting and gambling’ in Entry 34 of List II is a State subject. “The expression ‘betting and gambling’ is relatable to an activity which is in the nature of ‘betting and gambling’. Thus, all kinds and types of ‘betting and gambling’ fall within the subject of Entry 34 of List II. The expression ‘betting and gambling’ is thus a genus it includes several types or species of activities such as horse racing, wheeling and other local variations/forms of ‘betting and gambling’ activity. The subject ‘lotteries organised by the Government of India or the Government of a State’ in Entry 40 of List I is a Union subject. It is only lotteries organised by the Government of India or the Government of State in terms of Entry 40 of List I which are excluded from Entry 34 of List II. In other words, if lotteries areconducted by private parties or by instrumentalities or agencies authorized, by Government of India or the Government of State, it would come within the scope and ambit of Entry 34 of List II,” the ebnch said.
While setting aside the orders of the Karnataka and Kerala High Courts, the bench held that “Thus, the scope and ambit of lotteries organised by Government of India or Government of State under Entry 40 of List I is only in the realm of regulation of such lotteries. The said Entry does not take within its contours the power to impose taxation on lotteries conducted by the Government of India or the Government of State.”
“We also hold that lottery schemes by the Government of other States are organised/conducted in the State of Karnataka or Kerala and there are express provisions under the impugned Acts for registration of the agents or promoters of the Governments of respective Statesfor conducting the lottery schemes in the State of Karnataka and the State of Kerala. This itself indicates sufficient territorial nexus between the respondents– States who are organising the lottery and the States of Karnataka and Kerala,” the bench said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
