A Case Study on the birth of the Goods and Services Tax (GST) in India – “The GST Saga: A Story of Extraordinary National Ambition” was released here today by the Union Finance Minister, Shri Arun Jaitley in his office in North Block in the national capital.
In view of the successful roll-out of the GST on 1 July 2017, it was felt that there was a need for the public to know of the story of how GST evolved, its timeline, the different stakeholders involved and how it eventually culminated in its inauguration in the Central Hall of the Parliament of India on the midnight of 30th June,2017 and 1st July, 2017 by the President and Prime Minister of India.
This case study accordingly captures the entire journey of GST right from its ideation in the Kelkar Task Force Report in 2003. Other salient features such as the dates on which the SGST Laws were enacted in the 31 States, peculiarity of the Indian GST model, how the fitment of rates was done and the IT backbone of GST have also been addressed in the case study, thus, making it a concise yet comprehensive repository of the GST story.
Cabinet Secretary will head the Selection Panel.
The GST Council has formed a Selection Committee under the Chairmanship of Cabinet Secretary to identify and recommend eligible persons for appointment as the Chairman and Members of the National Anti-profiteering Authority under GST.
The National Anti-profiteering Authority is tasked with ensuring the full benefits of a reduction in tax on supply of goods or services flow to the consumers.
When constituted by the GST Council, the National Anti-profiteering Authority shall be responsible for applying anti-profiteering measures in the event of a reduction in rate of GST on supply of goods or services or, if the benefit of input tax credit is not passed on to the recipients by way of commensurate reduction in prices. The National Anti-profiteering Authority shall be headed by a senior officer of the level of a Secretary to the Government of India and shall have four technical members from the Centre and/or the States.
The already notified Rules on Anti-profiteering measures provide that applications seeking to invoke anti-profiteering measures shall be examined by a Standing Committee. However, if the application relates to a local matter which the business is located in only one state, it shall be first examined by a State level Screening Committee. The Standing Committee is empowered to refer cases requiring detailed enquiry to Director General of Safeguards, CBEC who shall give his recommendation for consideration of the National Anti-profiteering Authority.
In the event the National Anti-profiteering Authority confirms the necessity of applying anti-profiteering measures, it has the power to order the business concerned to reduce its prices or return the undue benefit availed alongwith interest to the recipient of the goods or services. If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund. In extreme cases the National Anti-profiteering Authority can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.
The constitution of the National Anti-profiteering Authority is expected to bolster consumer confidence and ensure all stakeholders reap the intended benefits of GST.
In Bhart Sharma v. Deputy Commissioner of Sales Tax & Ors, the Calcutta High Court confirmed the action of the Sales Tax Department denying online generation of C forms. While dismissing a writ petition, Justice Debangsu Basak directed the petitioner to file the forms manually.
Before the High Court, the petitioner impugned the order of the Special Commissioner, Sales Tax by which the petitioner was deselected for issuance of C-Forms.
The Court accepted the explanation given by the department that with the introduction of the Goods and Services Tax (GST), further online generation of C-Forms would not be permissible and therefore, in the event if the petitioner applies to the Special Commissioner, Sales Tax for issuance of C-Forms for the period claimed by the petitioner subject to the petitioner complying with the provisions of law.
“Such submission being fair and acceptable, is accepted. The petitioner is permitted to make an application before the Special Commissioner for issuance of C-Forms manually and in accordance with law. If such an application is made, the Special Commissioner will afford an opportunity of hearing to the petitioner before issuance of C-Forms. In the event, he finds that the petitioner is not entitled to get C-Forms, he will pass necessary order to such effect. The Special Commissioner is at liberty to consult such documents that he deems appropriate. The Special Commissioner is also at liberty to hear such other parties that he deems necessary.”
Read the full text of the Judgment below.
The Ministry of Corporate Affairs recently notified that the exemption given to certain private companies on reporting internal finance control by auditor is applicable from 1st April 2016.
Section 143(3)(1) read with the applicable rules of the Companies Act, 2013 contains the provisions applicable to the auditor of the company. The provision requires that the auditor is supposed to report about whether there is sufficient internal financial control system in the company and the same has been operated efficiently or not.
The Government, as per Notification dated 13th June, 2012 had exempted certain private companies from the above requirement.
The present notification stated that “Stakeholders have drawn attention of this Ministry to the serial no. 5 of notification No’ G.s.R. 583(E) dated 13th June, 2012 which states that requirements of reporting under section 143(3)(i) of the Companies Act 2013 shall not apply to certain private companies as mentioned therein and have sought clarification w.r.t. the financial year(s) in respect of which the said exemption shall be applicable. The issue has been examined in the Ministry and it is hereby clarified that the exemption shall be applicable for those audit reports in respect of financial statements pertaining to financial year, commencing on or after 1st April,2016, which are made on or after the date of the said notification.”
Read the full text of the Notification below.
Apex industry body ASSOCHAM has suggested the Centre to conduct country-specific or geographic market-wise studies to ascertain job prospects for qualified Indian professionals in accountancy, finance, information technology (IT) and related services abroad.
“Considering the demand and supply of professionals in these sectors, the number of memorandum of undertakings (MoUs) signed by India with several countries may be increased to conduct exchange programmes and exploring job market in favouring countries,” highlighted ASSOCHAM in a communication addressed to Union Ministry of Corporate Affairs.
The chamber said that based on the demand analysis, awareness programmes may be organised for professionals like CA/CS/CMA/CFA/MBA both within and outside India.
It added that the focus for awareness programmes should be on ensuring maximum participation of foreign diplomats and MNCs in India as well as Indian companies doing business abroad.
In its communication to the Corporate Affairs Ministry, ASSOCHAM has also said that considering the MBA course comes under purview of the Union Ministry of Human Resource Development (HRD), as such it should also be invited to hold collaborative awareness programs for exploring job opportunities outside India.
“This will help in revamping the MBA institutions and help them in gaining substantially increased level of interest in MBA/PGDM like professional courses in future,” said Mr D.S. Rawat, secretary general of ASSOCHAM.
The chamber has also sought financial support from the Union Government for presenting promotional programmes, events and campaigns about the aforesaid issue.
In Pr. Commissioner Of Income Tax, Allahabad vs. Atlantis Multiplex Pvt. Ltd, the division bench of Allahabad High Court held that, Rental Income received from letting out shops in a mall is Income from business not come under the head Income from House property.
The assessee Atlantis Multiplex is a private company and as per Articles of Association and Memorandums of Association its main object is to undertake construction, running, leasing of Multiplexes with or without commercial complex and indulge in running, distribution, making and related business of motion pictures and providing a platform for shopping of various commodities and brands under one roof and to carry on business of rent and sale.
Relying Apex Court decision in Chennai Properties and Investment Limited Vs. Commissioner of Income Tax, the Court noted that, where the assessee derives all its income from letting out of the properties and it is the main source of business of the assessee and the income so derived would be business income of the assessee. It could not be treated as income from house property.
The division bench comprising of Justice Pankaj Mithal and Justice Umesh Chandra Tripathi observed that, “according to Memorandums of Association and Articles of Association the Assessing Officer as well as the tribunal have categorically found that the main object of the business of the assessee is to construct Mall and to derive income from letting out the shops therein. Therefore, the income so derived by the assessee may be the income from house property but would ultimately be the business income and as such the Assessing Officer has not committed any error in determining the taxable income of the assessee under the head income from business”.
While dismissing the appeal, the Court also observed that, “in the present case two views were possible before the Assessing Officer and on the basis of the main objects and the nature of income derived by the Assessee, if he had taken one view of the matter, it could not have been said that it was erroneous in law or was likely to cause prejudice to the revenue so as to permit any interference in exercise of revisional jurisdiction by the Commissioner”.
Read the full text of the Judgment below.
The Central Government recently notified that the Special Deposit Scheme for second quarter of Non- Government Provident, Superannuation and Gratuity Funds to bear Interest @ 7.8%.
The rate is applicable w.e.f. 1st July, 2017.
Special Deposit Scheme (SDS) was launched by the Central government on July 1, 1975 with an aim to provide better returns to non-government provident funds, superannuation and gratuity funds, surplus funds of the Life Insurance Corporation (LIC) and Employees’ State Insurance Corporation, etc.
The organisations which invested in SDS were Employees’ Provident Fund Organisation (EPFO), General Provident Fund (Central Services), Contributory Provident Fund (India), All India Services Provident Fund, State Railway Provident Fund and General Provident Fund (Defence Services).
On maturity, the amount under the scheme is payable in five equated yearly installments from the date of maturity. The scheme is operated through various public sector banks (PSU banks) and the Reserve Bank of India (RBI) offices.
When the scheme was launched, the rate of interest offered was 10% per annum.
Read the full text of the Notification below.
Non-Residents need not give account details if seeking no refund.
The Income Tax Refunds will be credited to Foreign Bank Account also for Non-Residents who is not having bank account in India, said Finance Ministry in a press release.
The Finance Ministry has provided Optional reporting of details of one foreign bank account by the non-residents in refund cases
Refund generated on processing of return of income is currently, credited directly to the bank accounts of the tax-payers. Availability of the detail of bank accounts in which the refund is to be credited is a precondition for direct credit of refund in the bank accounts
Income-tax Return Forms for the Assessment Year 2017-18 were notified on 30th March, 2017. A number of representations were received from the non-residents that they are facing difficulties in getting refund as they do not have bank account in India and there is no column in the notified form of return of income for reporting details of foreign bank account by the non-residents for this purpose.
In view of this, a facility has been provided in return utility for reporting of details of bank account by non-residents, who do not have bank account in India and who are claiming income-tax refund. Therefore, the non-residents who are not claiming refund or non-residents who are claiming refund but having a bank account in India are not required to furnish details of their foreign bank account in the return of income. However, the non-residents, who are claiming income-tax refund and not having bank account in India may, at their option, furnish the details of one foreign bank account in the return of income for issuance of refund.
Jaitley also emphasizes prompt redressal of the grievances of the tax payers.
The Union Finance Minister Arun Jaitley highlights the initiatives undertaken by the present NDA Government for setting-up an internationally competitive tax regime with a stable policy and a non-adversarial tax administration.
The Finance Minister exhorted the officers of the Income Tax Department (ITD) to be prompt in redressing the grievances of the tax payers, expand the tax base in a non-intrusive manner even as they strive to achieve the revenue generation targets. Jaitley said that taxes are the backbone of any economy. He said that gradually, the mindset of the people is changing as they want no one should be exempt from tax. He said that privacy cannot be made an excuse for non-compliance.
The Finance Minister Jaitley was addressing the Officers and Staff of the ITD at a function organised here at Vigyan Bhawan in the national capital to mark the occasion of ‘The Aaykar Diwas – Income Tax Day Celebrations-2017’.
The Union Finance Minister Arun Jaitley congratulated the Officers and Staff of the ITD for working towards changing the mindset of the people and helping them become more tax compliant. He also spoke about the various steps undertaken by the present Government to widen the tax base, eliminate corruption and incentivise the honest taxpayers among others.
Earlier, the Union Finance Minister Arun Jaitley released a Coffee Table Book “The Journey So Far”. The book traces the 157 year history of the ITD and its metamorphosis into a modern department which uses state of the art techniques for efficient delivery of taxpayer services while simultaneously generating a significant portion of the tax revenue of the Government of India. The Finance Minister Shri Jaitley also gave away the Finance Minister’s Awards for Excellence to 22 officers of various ranks in the ITD for their meritorious services. A film titled “In the Service of the Nation” detailing the contribution of the Department towards nation building was also launched by the Finance Minister which was also screened on the occasion.
The Aaykar Diwas – Income Tax Day was celebrated today across India. The main function was held at Vigyan Bhavan in New Delhi which was graced along with the Union Finance Minister of India, Shri Arun Jaitley, by the Minister of State for Finance (Revenue), Santosh Kumar Gangwar, Revenue Secretary, Dr Hasmukh Adhia, Chairman, CBDT Sushil Chandra. Among others who attended the function included Members of the Central Board of Direct Taxes (CBDT), senior officers of the Ministry of Finance and Income Tax Department (ITD.
Before that, the Principal Chief Commissioner of Income Tax, Delhi, welcomed the Chief Guest, Dignitaries and the officers of Ministry of Finance and ITD to the event. While the Chairman, CBDT, Shri Sushil Chandra dwelt upon the technological changes in the ITD in the recent future which have given it an edge in tackling tax evasion, the Revenue Secretary Dr Hasmukh Adhia congratulated the Income Tax Department (ITD) for new initiatives launched to tackle black money menace including the IDS 2016 and for steps taken to augment revenue collections. The Minister of State (Revenue), Shri Santosh Kumar Gangwar congratulated the Income Tax Department (ITD) for increasing its effectiveness while simultaneously ensuring that no grievances arise on the part of taxpayers in doing so.
The function ended with a vote of thanks.
In a recent ruling, a division bench of the Allahabad High Court held that the assessee-Bank cannot be treated as assesse-in-default for non-deduction of TDS on the interest earned on FDs of NOIDA.
A bench comprising Justices Pankaj Mithal and Umesh Chandra Tripati deleted the penalty levied against the assesse under Section 271 C of the Income Tax Act.
The assessee Central Bank of India was having fixed deposits of the NOIDA. The income tax department treated the Bank as assesse-in-default on ground that it failed to deduct tax at source on the interest earned on those fixed deposits. Consequently, penalty was imposed against them.
During the course of proceedings, assessee maintained that NOIDA is an Authority under the State Act that is exempt from deduction of tax at source under Section 194-A (1) of the Income Tax Act and therefore, no penalty can be levied.
On appeal, the ITAT deleted the penalty imposed as the assessee not only had a reasonable cause for not deducting tax at source but also as NOIDA was exempt for payment of tax at source.
Aggrieved by the order, the department appealed to the High Court.
The bench noticed that in the case of Commissioner of Income Tax (TDS) and another Vs. Canara Bank a division bench of the same Court has held that NOIDA is a corporation established by the U.P. Industrial Development Act, 1976 therefore is exempt from payment of tax at source.
It further noted that Section 273 B of the Act provides that no penalty shall be imposable on the assessee for the failure referred to in Section 271 C of the Act if he proves that there was reasonable cause for the failure. “Therefore, if the assessee proves that there was reasonable cause for not deducting the tax at source, he is not liable for penalty under Section 271 C of the Act.”
In view of the above findings, the division bench dismissed the appeal upheld the ITAT verdict.
Read the full text of the Judgment below.
In Ms.Grihalakshmi Films v. JCIT & Ors, the Kerala High Court held that appeals related to penalty proceedings can be settled through the recent Direct Tax Dispute Resolution Scheme, 2016.
The petitioners in the instant case are engaged in the production and distribution of cinematographic films and other allied activities. Penalties were imposed on them under Sections 271D, 271E and 272A (2) (C) of the Income Tax Act alleging that they had accepted loans/deposits otherwise than by way of account payee cheques and/or draft, by repaying loans/deposits, otherwise than by way of account payee cheques and/or draft and by not filing statements as required by Section 285B regarding the film production carried on by them. Petitioners challenged the above order before the first appellate authority.
Last year, the Central Government introduced the Direct Tax Dispute Resolution Scheme, 2016 as per which, the assessee can make a declaration of tax arrears under the Income Tax Act in respect of which an appeal is pending before the appellate authority as on 29.02.2016. The Scheme also envisages that, in the case of a pending appeal related only to penalty, the amount payable by an eligible declarant would be 25% of the minimum penalty leviable, along with the tax and interest payable on the total income finally determined.
The petitioners opted to settle their income tax case pending before the first appellate authority under the said scheme. In the declaration, the petitioners had offered to pay 25% of the mandatory penalties that were imposed on them. However, the department rejected the said application by pointing out that the penalty imposed on the petitioners, were not linked to any assessment proceedings. It pointed out that as per the Amnesty Scheme, the tax arrears in the case of penalty necessarily referred only to such penalty as was linked to the total income finally determined.
Aggrieved by the order, the petitioners approached the High Court.
Before the High Court, the department relied on the CBDT circular which states penalty order under Section 271(C) or 271 (C) (A) of the Income Tax Act, which are not linked to assessment proceedings, would not be covered under the Scheme.
Rejecting the contentions, Justice Jayasankaran Nambiar, who penned the judgment said that “on an overall consideration of the Scheme, however, I do not see any scope for such a restrictive interpretation of the ambit of the Amnesty Scheme, in the manner suggested by the learned counsel for the respondents.”
He noted that the definition of “tax arrears” does not exclude a situation where the dispute of an assessee is only in respect of a penalty that has been determined against him under the Income Tax Act. “While the procedure envisaged includes the filing of a declaration solely in respect of penalty, the Scheme suggests that when a declaration is only with regard to penalty, the obligation of the declarant is to pay 25% of the minimum penalty levied, and also to pay the tax and interest payable on the total income finally determined for the assessment year in question,” he said.
While concluding, he added that “the object of the Scheme appears to be to ensure that, while a person seeking an Amnesty Scheme only in respect of the penalty that is imposed on him, avails the benefit of the Scheme to that extent, it should also be ensured that the said declarant discharges the tax and interest liability under the Income Tax Act for the assessment year in question. In other words, a person, who defaults on the tax and interest liability under the Income Tax Act for the assessment year, cannot claim the benefit of amnesty in respect of the penalty alone. It is also significant to note that the exclusions from the Scheme, that are enumerated in Section 208 of the Finance Act, 2016, also do not expressly provide for the exclusion of a declaration, such as those filed in the instant writ petition, where the amnesty is sought only in respect of a penalty that is imposed under the Income tax Act.”
Read the full text of the Judgment below.
A Bill amending the Banking Regulation Act, 1949 has been tabled in the Parliament today. Once enacted into law, the Banking Regulation (Amendment) Bill 2017 is expected to replace the ordinance issued by the centre in May 2018.
The following are the highlights of the Bill.
The ordinance inserts provisions for recovery of outstanding loans as per which, the central government may authorise the Reserve Bank of India to direct banks to initiate recovery proceedings against loan defaulters.
These recovery proceedings will be under the Insolvency and Bankruptcy Code, 2016. The Code provides for a time-bound process to resolve defaults by either (i) restructuring a loan (such as changing the repayment schedule), or (ii) liquidating the defaulter’s assets.
The RBI may from time to time issue directions to banks for resolving stressed assets. Stressed assets are loans where the borrower has defaulted on repayment, or loans which have been restructured.
The RBI may specify authorities or committees to advise banks on resolving stressed assets. Members on these committees will be appointed or approved by the RBI.
The non-performing assets of banks have boosted to more than Rs 9 lakh crore and now RBI is being given power to refer the cases to Insolvency and Bankruptcy Board.
In June, RBI had identified 12 large loan defaulters who account for 25% of the total bad loans in the banking sector.
Currently, the RBI may issue directions to banks on grounds such as ‘public interest’ and ‘in the interest of banking policy’. The Ordinance gives RBI additional powers to direct banks to initiate recovery proceedings under the Insolvency and Bankruptcy Code, 2016.
Further, a majority of NPAs (88%) are in public sector banks where the central government is a majority shareholder. There are possibilities that the government could initiate recovery proceedings against defaulters without having to authorise the RBI to direct banks.
As the banking regulator, the RBI is responsible for maintaining financial stability, while banks have the flexibility to make business decisions. Currently, banks face certain challenges as part of recovery proceedings such as (i) lack of incentives among public sector bankers to recognise losses, (ii) fear of investigation in case of low recoveries, and (iii) insufficient capital to absorb losses. The Ordinance may not address some of these issues.
All the dealers, immaterial of their turnover are eligible for full Input Tax Credit (ITC) on the purchase/receipt of goods or services used in the course of furtherance of business, said Commercial Taxes deparment, Government of Puducherry in a press release.
GST has been implemented across the country with effect from 01st July, 2017. In GST, those dealers whose All India aggregate turnover is more than Rs. 20 lakhs per annum should get themselves registered. There is no compulsion for the dealers whose turnover is less than Rs 20 lakhs to get registered. However, they can obtain registration under GST at their discretion even if their turnover is less than 20 lakhs, said the department.
Further for small dealers whose turnover is upto Rs. 75 lakhs per annum, there is a beneficial and simple composition scheme, whereby they can pay tax at lower rates i.e. 5% for restaurants, 2 % for manufacturers, 1% for other dealers and file returns quarterly and even make purchases from other states. However, ITC is not eligible for composition dealers since they are paying tax at lower rates.
The department also said that, the prices of most of the consumer goods, electrical and electronic appliances and vehicles have come down. But the public has a perception that the levy of GST has increased the prices of goods and services. The tax paid on most of the goods will be lesser or equal to the tax paid on such goods in the pre-GST regime.
“It is evident that the prices of two-wheelers and four-wheelers have considerably reduced. Likewise the prices of toothpaste, soap, detergent powder, plastic items, electronic and electrical goods have also come down,” the press release added.
The Puducherry Commercial Taxes Department directed all manufacturers and dealers to adjust the prices accordingly and display the new price by affixing a sticker without hiding the old MRP rate. He sought traders and consumers not to fall prey to the rumours on GST in social media and urged them to contact the commercial taxes department to clarify their queries on GST and tax rates.
In Indo Swiss Embroidery Industries Limited v. CCE, Vapi, a division bench of the Bombay High Court held that penalty and interest under sections 11AB and 11AC of the Central Excise Act cannot be levied alongwith Additional Excise Duty (ADE) when there is no provisions under the Additional Duties of Excise (T & TA) Act empowering the department to levy interest and penalty.
A bench comprising of Justices Anoop V Mohta and Anuja Prabhudessai was hearing an appeal filed by the assessee company.
The department levied Additional Excise Duty on the appellant-assessee on ground of misclassification of goods under the Additional Duties of Excise (Textile & Textile Articles) Act, 1978 (AED (T & TA)). While doing so, the officer also imposed interest and penalty under sections 11AB and 11AC of the Central Excise Act.
On appeal, the assessee challenged the levy of penalty and interest.
The bench pointed out that there is no provision empowering the department to levy penalty and interest under the ADE (T&TA) Act and in the absence of any statutory provisions, it is settled that any demand of penalty (11AC) and/or interest (11AB) would be without jurisdiction and authority of law. “It is settled that a clear statutory mandate requires for authority to collect and/or raise demand of any tax and penalty and/or interest. In the absence of such provision, any demand in the present case, of penalty/interest is unauthorised, impermissible and unsustainable,” it said.
In view of a catena of decisions by the Apex Court, the bench held that the authority has to be specific and explicit and expressly provided in view of law and Article 265 of the Constitution of India and the present case falls within the ambit of protection so provided for such law.
“The taxing provisions must be cleared and so also the charging Section and the mechanism to collect it. It needs to be construed strictly.”
While concluding, it further nullified the action of the department appropriating the said amount towards other refund. It said that “if interest is not payable for want of specific authority and provision, there is no question of appropriation of any amount towards any other refund. The order of recovery of interest at appropriate rate for delayed payment by invoking the provision of Section 11AB of Excise Act, therefore, is unjust, unclaimable as it is illegal.”
Read the full text of the Judgment below.
The Government is planning to set up National Financial Reporting Authority (NFRA) as it seeks to rein in the Institute of Chartered Accountants for India (ICAI) for its perceived failure in enforcing discipline.
Section 132 of the Companies Act, 2013 provides for establishment of National Financial Reporting Authority. However, the provision has not been notified yet.
Under the provisions of the Companies Act, 1956, the Centre was to prescribe accounting standards prepared by ICAI in consultation with the National Advisory Committee on Accounting Standards (NACAS).
Such powers are to be transferred to NFRA under the 2013 Act. Consequently, NFRA would have taken away several powers that are currently vested with ICAI. There were rumors that several chartered accountants had successfully lobbied with the government to block the notification.
The issue had been on the backburner for the last few years but is now simmering again after Prime Minister Narendra Modi publicly aired his criticism over ICAI’s disciplinary record -a charge that the institute is now trying to cope with. At the CA Day event on July 1, Modi had said that just around 25 auditors had faced action in over a decade and around 1,400 cases were pending. ICAI is expected to fix the issue shortly, but that has not stopped the government from reopening the case for NFRA.
The law provides for NFRA to look into matters of professional or other misconduct and also suspend CAs and firms from practising for six months to 10 years. Sources said various options were being considered for the agency and a new mechanism for appeal was also being considered.
This also comes at a time when ICAI is pushing to revise joint audit of Indian companies after its plea for a mechanism was rejected by a committee headed by former Competition Commission of India chairman Ashok Chawla in a report to the Prime Minister’s Office.
The Finance Ministry recently tweeted that the date for cancellation of Registration is extended to 30th September 2017. However, no notification or circulars have been issued yet.
Under the new Goods and Services Tax law, all taxable persons having turnover over Rs.20 lakhs is bound to obtain registration. Such taxable persons may cancel their own registration or have their registration cancelled by the authorities due to violations.
Application for cancellation has to be made in form GST REG 16.
“Period for applying for cancellation of registration is also extended upto 30th September, 2017. Relevant Notifications are being issued,” the Ministry tweeted.
If a person, who had applied for cancelling registration, is no longer liable to be registered or his registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of application submitted or the date of reply to the show cause.
Any person registered under any of the existing laws, who is not liable to be registered under the Act can opt to cancel the registration granted to him. He must submit an application electronically in FORM GST REG-29 at the Common Portal within 30 days from the GST implementation date. The proper officer will, after conducting enquiry, cancel the said registration.
In Commissioner, CCEST, Bilaspur v. M/s Ultratech Cement Pvt Ltd, a division bench of the Chhattisgarh High Court held that the place of removal is delivery point and not the ‘factory gate’ of the assessee when freight charges are arranged and paid by assessee and the same is integral part of price.
In the instant case, Assesse, a manufacturer of cement, sold cement to certain customers at the premises of the latter. Revenue denied credit to the assesse on the ground that the place of removal is factory gate and buyer’s place cannot be considered as the place of removal in view of Section 4(3)(c) of Central Excise Act as per the Apex Court ruling in CCE, Nagpur v Ispat Industries. The Revenue took a stand that the decision is equally applicable to CCR, 2004 by virtue of Rule 2(t) and (ii) after amendment in Rule 2(l) of CCR, 2004, credit is available only “up to place of removal”.
During the course of proceedings, assessee maintained that as per the purchase order, supply of cement has to be made at the premises of the customer i.e delivery at the premises is a condition to conclude the sale of goods. It further argued that freight is arranged and paid by assessee and the charge is integral part of price of the goods. Thus, place of removal will be place of delivery and not factory gate.
On second appeal, the Tribunal, allowed the contentions of the assesse.
Upholding the Tribunal order, a bench comprising Chief Justice Thottathil B Radhakrishnan and Justice Sharad Kumar Gupta dismissed the departmental appeal and held that, the place of removal of the goods cannot be treated as the factory gate of the Assessee but the delivery point which is the door or premises of the customer.
Read the full text of the Order below.
A Public Interest Litigation (PIL) has been filed before the Bombay High Court by Shetty Women Welfare Foundation on behalf of SheSays, an NGO campaigning for women’s rights. Advocate Ms. Devyani Kulkarni has filed the PIL and Senior Counsel Mr. Mihir Desai appeared in the matter.
The petition seeks to exempt sanitary napkins from the levy of GST. Under the present GST regime that rolled out on July 1, sanitary napkins are in the 12% tax category.
The Petitioner organization contents that the exemption is necessary to make access to basic menstrual hygiene products easier for women. According to them, only 12% women in India can afford sanitary napkins, thus leaving the basic hygiene product out of the reach of 88% women and girls.
The NGO contended steps were necessary to ensure menstrual and reproductive health of women as these are the rights conferred upon them by Article 21 of the Constitution of India.
Advocate Devyani Kulkarni on Wednesday mentioned the PIL for urgent hearing before the division bench of Chief Justice Manjula Chellur and justice Nitin Jamdar, and it is likely to come up for hearing on July 24.
The petitioners sought for the following reliefs:
The Chief Justice has issued notices to parties that are made Respondents to the PIL and has given a returnable date of 4 weeks from 20th July 2017.
The Central Government today notified income tax exemption to certain receipts received by the Noida Special Economic Zone Authority and Odisha State Pollution Control Board under the Income Tax Act, 1961 through separate notifications.
As per the Notification, lease rent, interest from banks on FDRs, receipts from I-Card and Permit fees, allotment Fee in respect of Standard Design Factories(SDF), auction/Bid amount in respect of Plots/Buildings which fall vacant, transfer charges in respect of Plot/Building, fee for issue of Form-I for exemption of Building Plans, processing fee for approval of Building Plans, site usage charges from Service providers and license fee for allotment of Staff Quarters to the staff etc. earned by the Noida SEZ Authority will not be subject to income tax.
Receipts of the Odisha Pollution Control Board such as statutory Consent fees, share of Water Cess from MOEF &CC, of Government of India, penalties & Levies collected under governing statutes, grant-in-aid received from Central & State Governments, grant in Aid received on behalf of Central & State Governments in the capacity of nodal agency, income by way of interest, share of contributions received for carrying out environmental studies & research are also exempted from the levy.
Read the full text of the Notification below.
Smt Vanaja Sarna, the present Chair Person of the Central Board of Excise and Customs (CBEC) recently said that the Board has identified Delhi, Mumbai and Chennai Customs Stations to examine the queries of importers and exporters on the newly implemented Goods and Services Tax regime and to submit draft responses to the Borad within one day.
In the letter it was said that “I am receiving grievances on delay in facilitation of exporters. The intent of the Government has been clearly spelled out in two circulars issued on this matter, namely, Circular No. 2/2/17-GST dated 4th July 2017 and Circular No. 4/4/2017- GST dated 7th July 2017. It must be ensured that every exporter whether registered in Central Excise or Service Tax in pre-GST regime or not, should be facilitated to the maximum extent possible. The difficulties, if any, must be brought t the notice of the Board immediately. I request that every Asst/ Deputy Commissioner is made aware of the intents and objective of the Government on this issue.”
As per Notification dated 7th July, 2017, the Board had allowed the exporters to furnish bond instead of Letter of Undertaking subject certain conditions. Powers were also given to the Commissioners to waive off the requirement of bank guarantee with bond depending upon the individual cases of exporters.
“This power needs to be exercised with the objective of facilitating exporters,” she said.
Read the full text of the Letter below.
The Delhi ITAT, recently upheld a tax demand raised on a $150 million investment by a US television network in NDTV in 2008.
It held that the assesse, NDTV indulged in a clear cut case of “abuse of organization form/ legal form and without reasonable business purpose” and therefore, confirmed the order passed by the Assessing Officer.
The IT Department had raised a demand of Rs. 218.30 crore, invoking section 69A of the Income Tax Act. It had alleged that Rs218.30 crore was the tax that was sought to be evaded on investment of Rs. 642.54 crore. It had sought a penalty of Rs. 436.8 crore at the rate of 200% of tax evaded.
It noted that there is no doubt that the transaction used principally as a devise for the distribution/ diversion of sum to the Indian entity. The beneficial owner of the money is the assesse.
Confirming the invocation of Section 69A of the Income Tax Act the Tribunal held that “It is a clear out case of “abuse of organization form/ legal form and without reasonable business purpose and therefore, no fault can be found with the order of the Id Assessing Officer/ Id DRP in charging to tax Rs. 642 crores by re-characterizing the conditions according to its economic substance and imposing the tax on the actual controlling Indian entity. In the present case we do not have any doubt that the transaction used principally as a devise for the distribution/ diversion of sum to the Indian entity on review of all the facts circumstances surrounding the present transaction. In the present case, the beneficial Owner of the money is the assessee. This money trail stares so glaringly on the various complex structures created by the assessee that without proving any substance one cannot reach to any other conclusion but to the conclusion that series of the transaction entered into by the assess were to transfer Rs. 642 crores from the investor-company or the owner of the investor company to the assessee”.
