GST Rate to be reviewed by GST Council

The GST Council is scheduled to meet on 18th December to review GST rates.

This is necessitated by the consistent fall in both the GST and Compensation Cess collections.

Also the States, particularly opposition ruled States have been applying pressure on the Centre to release GST payments immediately as Rs 50,000 cr cess lies unutilised.

This GST review more specifically covers exempted items, items with inverted rates, compensation cess rate. This may lead to GST rates on certain items being raised. 

 

Central Excise & Service tax Amnesty Scheme

  1. 1. Chapter V of the FA 2019 (full text of SVLDR Scheme)
  2. 2. SVLDR Rules
  3. 3. SVLDR Notification No 4/2019
  4. 4. CBIC Circulars dated 28.08.2019 and 25.09.2019
  5. 5. FAQs on SVLDR
  6. 6. SVLDR Departmental presentation
GST Optimisation Part 2

This is the 2nd Part of the set of videos on “GST Optimisation”. It explains how indirect tax cascading still continues in India even after implementing GST. The video covers specific situations in which tax cascading happens. This video is meant for the general public and not exactly the tax experts. So the language is simpler devoid of sections, rules, technical expressions and tax jargon.

https://www.youtube.com/watch?v=pohxDYOjLNU&t=226s

GST Optimisation Part 1

This is the first part of a three part video set on Tax Optimisation, more specifically GST Optimisation. Its created for those who are not too familiar with taxation and yet keen to understand and benefit by optimising on taxes. This can be useful for people handling indirect taxation too as the aim of these videos is to conceptually clarify the subject.

https://youtu.be/tWWb9ClOOZg

"The Indian GST Story" by Anthony Fernandes - Founder of Tax Quotient


1st June 2019

 

 
   

 

Recent Court / Tribunal Judgements

 CESTAT Decisions

 

18th October, 2018 : CESTAT Mum : UPS Jetair Express Private Limited   Vs Commissioner of CGST, Mumbai East 

Revenue denied CENVAT credit only on the ground invoices didn't mention the registration number of the service provider. No other allegations were made regarding receipt of input services, eligibility etc.

Held : This is merely a procedural lapse. It is settled that CENVAT credit can't be denied on mere technicalities or procedural lapses.

CENVAT credit allowed, extended period of limitation not applicable.

Ed's comment : Isnt it surprising that a Senior Officer like Prin. ADG, DGPM, WRU, still needs to catch up with decades old case law regarding Modvat and Cenvat? It's repeatedly held procedural lapses aren't reason enough to deny credit. How will the dept reduce litigation? Should Tribunal for fairness?

18th October, 2018 : CESTAT Ahd : M/s Auto Care Lubricant Vs C.C.E. & S.T.-Vapi
The Tribunal relying on an earlier decision in Castrol India Ltd, held :
“The authorities under the Standards of Weights and Measures Act are the best judge to decide as to whether a product is required to be affixed with a MRP under the said Act or not. If said authority has clarified that 210 ltr. barrel are not required to be affixed with MRP, it was obligatory on the part of the Excise authority to accept such decision of Controller of Legal Metrology authority….., it was not open to the Excise authority to doubt the decision of the authority under Standards of Weights and Measures Act and to proceed independently ….”

18th October 2018 : CESTAT Ahd : M/s Javiya Finance Services, Javiya Marketing Vs C.C.E.& S.T.- Surat-I
The appellant were providing service of identifying customers for car loans and receiving commission from ICICI Bank. This was to be taxed under Business Auxiliary Services (BAS).  

The appellants admitted taxability but argued they were under bonafide belief the services are not taxable and so extended period of limitation should not be invoked.
Held : "The definition of Business  Auxiliary  Services  is  very  clear  and  there  is  no  scope  of interpretation. The definition specifically includes the service of promotion or marketing of any service of the client within its ambit." Appeals dismissed.

 

 12th Oct : CESTAT Mum : Tahnee Heights CHS Ltd. Vs Commissioner of CGST, Mumbai South : Held : "The appellant also do not provide any service to its members, who pay the amount towards their share of contribution, for occupation of the units ....the explanation furnished under clause 3(a) in Section 65B of the Act will not designate the appellant as an entity, separate from its members....the case of the appellant is not confirming to the requirement of 'service', as per the definition contained in Section 65B(44) of the Act."

10th Oct : CESTAT Ahd :  L & T Ltd. etc Vs C.C.E. Ahd Appellants argued the law and IS specifications had changed for their product "concrete mix" made at site. It was eligible for the exemption making the earlier Supreme Court judgement in their own case irrelevant.

Tribunal ruled that there is no change in the  C.Ex Tariff Heading description as far as ready mix concrete is concerned. There is no mention of any IS Specification anywhere in the SC judgement. So changes in IS Specifications cannot be used to distinguish the decision of Hon’ble Apex Court. Demand beyond the period of limitation set aside. Personal penalty quashed as this is a case of interretation.

11th Oct : CESTAT Chennai : M/s. Pepsico India HPL Vs Commr of GST & CE, Chennai Outer : The appellants had paid excess central excise duty for which they utilised the CENVAT credit. On realizing this they suo moto took re-credit of the excess amount debited from the Cenvat account.

Held:  Following the said decisions of the High Courts, The impugned order and demand was set aside.

High Court Judgements

 

2nd July, 2018  : Allahabad High Court : Hamdard (Wakf) Labs Vs Commr Of Commercial Taxes : The High Court upholds the Tribunal order and holds that "Sharbat "Rooh Afza" is not unclassifiable under Schedule-V of the Act and liable to tax @ 12.5%. It is neither fruit juice nor fruit drink nor processed fruit.

 2nd July, 2018 :  Delhi High Court : JOYCE KAROUNG Vs NARCOTICS CONTROL BUREAU : Relying on the SC judgment in Babua v. State of Orissa, (2001) 2 SCC 566 the High Court concluded the petitioner is not prima facie not guilty. Also, liberty of a citizen must be balanced with the interest of the society especially where narcotic drugs and psychotropic substances are involved. It is alleged that this is not the first offence.
   
   

Click for earlier Judgements in 2018

CBI arrests customs officers & CHA for alleged bribery

 

2nd May, 2018

We have heard this expression "tax terrorism" from a number of quarters. It conjures up an image of aggressive tax officials conducting assessments and demands in excess of what is a fair share of tax revenue. There are some classic cases in recent memory which shot into limelight where even Supreme Court judgements were overturned by enacting retro-active tax laws going back several decades. Tax risks caused by uncertainties in taxation is well known. What has been recently unearthed by CBI recently in the Nhava Sheva, Mumbai Customs reportedly is a form of tax terrorism by elite branches of the Customs and some private individuals such as Customs House Agents.

The CBI has arrested four customs officer 3 Dy Commrs (DCs),  Mukesh Meena, Sudarshan Meena, Sandeep Yadav and one Supdt Manish Singh. One Dy Commr, Rajeev Kumar Singh is reportedly absconding. They also arrested a Customs House Agent  (CHA) Nilesh Singh in an alleged bribery case where a demand of Rs 50 lacs was made. Another CHA Datta Sonawane is also absconding. They were produced before the CBI Court yesterday on 1st May, 2018.

These Senior customs officials were from the elite investigative branches of customs. They are Special Intelligence & Investigative Branch (SIIB), Marine & Preventive (M&P) and Rummaging & Intelligence (R&I). If the reports and charges are correct, it seems like a well designed modus operandi with a team (including the CHA) in place to harass importers & create opportunities for bribery at Nhava Sheva Port, Mumbai.

CBI has registered a case of bribe demanded from the complainant, a businessman, Amjad Mohd Bakali to "manage" the clearance of a imported consignment. The consignments included cosmetics. Reportedly, much of the imported goods were diverted by these accused for their personal use. Hence only some of the goods were recovered, whereas a major portion is yet to be recovered.

It was alleged that this group demanded initially Rs 25 lakhs to clear the consignments illegally kept on hold. Later  the amount was reduced to Rs 21 lakhs and thereafter raised to Rs 50 lakhs. The arrested officers were produced before the CBI Court on 1st May, 2018.

CBI laid a trap and caught the CHA Nilesh Singh red handed on 30th April accepting a part of the bribe of Rs 5 lakhs. Reportedly is was the first installment of bribe. The role of the deputy commissioners and superintendent were said to be discovered during investigation. It is reported that Nilesh Singh is not new to this, he had been arrested thrice on earlier occasions.

What is interesting is around 40 other officers mainly comprising of batch-mates and colleagues of these arrested officer were in court to show solidarity with them. What does this solidarity actually mean? Is it in support of bribery? Don't they believe in the impartiality of the CBI and that the truth whatever it is will emerge?  Who are the people orchestrating such support? How is it that officers who have already been arrested for similar offences in the past are again posted in such elite sensitive departments? Isn't this reviewed by the Personnel and Vigilance? Does this mean the rot has spread in the entire department and it is well institutionalized?

The investigators and also the Central Board of Indirect Taxes & Customs (CBITC) should carry out a forensic audit into all past cases where consignments were kept on hold. This will provide a clear picture of how much damage has been already done to the system. Its likely this is one of the standard modus operandi to corner importers into submission. The nation cant make progress without rooting out institutionalized corruption.

The CHA and the staff involved should be immediately blacklisted and should be handed a lifetime ban from customs.


Tax Risk Management Part 1

An Introduction

 

Risk comes from not knowing what you’re doing. 
- Warren Buffet

Read the Article

 

Tax Risk Management Part 2

Tax Risks as Black Swan Events!

If you were asked "What 'tax risks' you perceive in your business?" What would be your answer?

Read the Article

 

 

Indirect Tax Risk Management

Indirect Risk Tax Management
 

 

 

 

Economic Survey of India 2017-18