TIOL-DDT 2963
03 11 2016
Thursday

THE Government, at the best of times, is not really comfortable with numbers and this is more so with the Revenue Departments. The latest controversy in GST is the number of assessees in Service Tax that can be migrated to GST. It seems in the first meeting of the GST Council, the States were told that there are 11 lakh service tax assessees in the country, but for today's meeting of the GST Council, the States were informed that there are 30.5 lakh assessees. How did the number of assessees go up by nearly three times in two months? Will the decision supposed to have been taken earlier that the Service Tax assessees will be with the Centre under the GST regime go for a toss with the revelation that there 31 lakh assessees and not merely 11 lakh? This is sure to figure in the GST Council meeting today. Will the Central Revenue authorities be able to come up with a more mature and accurate figure by day after tomorrow? And the ACES website states that there are 15.1 lakh service tax assessees. They should know better, for they are the ones who collect the returns. God knows when this figure was last updated.

Incidentally, in his Budget Speech on 28 February, 2013, the then Finance Minister P.Chidambaram said -

183. While there are nearly 17,00,000 registered assessees under service tax, only about 7,00,000 file returns. Many have simply stopped filing returns. We cannot go after each of them. I have to motivate them to file returns and pay the tax dues. Hence, I propose to introduce a one-time scheme called 'Voluntary Compliance Encouragement Scheme'.

If we are not sure about the number of assessees we have in this digitally controlled world, how are we going to compute the tax collected and compensation due for each state?

And why is the GST Council so secretive? They don't seem to have a website and because of their silence a lot of information - often false, is getting circulated and if newspapers are to be believed, the Council leaks like a sieve and is full of anonymous officers ready to leak information to the Press under the cover of anonymity. And the Revenue Secretary has stopped tweeting, while his boss, the Finance Minister took to the blog recently to explain certain facets of GST. Cooperative federalism is a good phrase; so is, transparency in administration.

Customs - Deferred Payment of Customs Duties

AS per the standards stipulated by the The International Convention on the Simplification and Harmonization of Customs procedures (Kyoto Convention),

1. Where national legislation provides for the deferred payment of duties and taxes, it shall specify the conditions under which such facility is allowed.

2. Deferred payment shall be allowed without interest charges to the extent possible.

3. The period for deferred payment of duties and taxes shall be at least fourteen days.

"Standard" means a provision the implementation of which is recognized as necessary for the achievement of harmonization and simplification of Customs procedures and practices.

In his Budget 2016 speech, the Finance Minister said in para 179:

179. Our Government has taken a number of steps to reduce the cargo release time and the transaction costs of EXIM trade. I propose to amend the Customs Act to provide for Deferred Payment of customs duties for importers and exporters with proven track record.

Accordingly, Sections 47, 51 and 156 of the Customs Act were amended to stipulate that the Central Government may, by notification in the Official Gazette, permit certain class of importers to make Deferred Payment of said duty or any charges in such manner as may be provided by rules; it was also provided for making rules for manner of making Deferred Payment of duties, taxes, cesses or any other charges under sections 47 and 51.

Now, the Government has notified the Deferred Payment of Import Duty Rules, 2016.

The due dates for payment of duty by an eligible importer are:

(a) for goods corresponding to Bill of Entry returned for payment from 1st day to 15th day of any month, the duty shall be paid by the 17th day of that month;

(b) for goods corresponding to Bill of Entry returned for payment from 16th day till the last day of any month other than March the duty shall be paid by the 2nd day of the following month;

(c) for goods corresponding to Bill of Entry returned for payment from 16th day till the 29th day of March, the duty shall be paid by the 31st March;

(d) for goods corresponding to Bill of Entry returned for payment from 30th day of March to 31st day of March, the duty shall be paid by the 2nd April.

The duty has to be paid electronically and if there is a default more than once in three consecutive months, this facility of deferred payment will not be allowed unless the duty with interest has been paid in full.

By another notification, the Government has made Importers certified under Authorized Economic Operator programme as AEO (Tier-Two) and AEO (Tier-Three), as eligible importers for the deferred payment of duty scheme.

Notification No. 134/2016-Customs (NT), Dated: November 2, 2016

Notification No. 135/2016-Customs (NT), Dated: November 2, 2016

Income Tax - Chapter VI-A deduction on enhanced profits - CBDT Clarifies

CHAPTER VI-A of the Income-tax Act provides for deductions in respect of certain incomes. In computing the profits and gains of a business activity, the Assessing Officer may make certain disallowances, such as disallowances pertaining to sections 32, 40(a)(ia), 40A(3), 43B etc., of the Act. At times disallowance out of specific expenditure claimed may also be made. The effect of such disallowances is an increase in the profits. Doubts have been raised as to whether such higher profits would also result in claim for a higher profit-linked deduction under Chapter VI-A.

The issue of the claim of higher deduction on the enhanced profits has been a contentious one. However, the courts have generally held that if the expenditure disallowed is related to the business activity against which the Chapter VI-A deduction has been claimed, the deduction needs to be allowed on the enhanced profits. 

CBDT clarifies:

The Board has accepted the settled position that the disallowances made under sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance.

Accordingly, henceforth, appeals may not be filed on this ground by officers of the Department and appeals already filed in Courts/ Tribunals may be withdrawn/ not pressed upon.

CBDT Circular No.37/2016, Dated: November 2, 2016

Provisional Anti Dumping Duty on Wire Rod of Alloy or Non-Alloy Steel

THE designated authority in its preliminary findings has come to the provisional conclusion that -

(a) "Wire Rod of Alloy or Non-Alloy Steel"' falling under headings 7213 and 7227 originating in, or exported from China PR, and imported into India, has been exported to India below the normal value;

(b) the domestic industry has suffered material injury on account of these imports;

(c) the injury has been caused by the dumped imports of the subject goods from the subject country,

and has recommended imposition of provisional anti-dumping duty on imports of these goods, originating in, or exported from China PR and imported into India, in order to remove injury to the domestic industry.

Now, the Government has imposed anti dumping duty on these products for a period not exceeding six months.

Notification No. 51/2016-Customs(ADD)., Dated: November 02, 2016

Record Haul of Drugs - FM Congratulates DRI

THE Finance Minister tweeted, Congratulations to DRI for seizing about 23.5 metric tonnes of Mandrax Tablets worth several thousand crores.

It seems a Bollywood producer is arrested in connection with this case.

For more details, please see Mixed Buzz

Until Tomorrow with more DDT

Have a nice day.

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