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GST - Via automated email and SMS on registered mobile number, SCNs were sent for all periods - Only for 2019-20, petitioner states that he did not receive copy and which is not possible to accept - Nonetheless, petitioner permitted to file appeal: HCGST - Respondent department has failed to assign any valid reason justifying the action of cancellation of registration and that too with retrospective effect: HCCus - Classification of product is a recurring and a legal issue - Court deems it appropriate to remand the matter to CESTAT, for a fresh adjudication on the classification issue itself: HCCus - T-3 IGI - Gold bangles weighing 50 grams seized - Since one year period has elapsed, no SCN can be issued - Detention impermissible: HCCus - Old iPhones seized - Whether SCN was delivered to petitioner within prescribed period is a question of fact - Reply to be filed and provisional release may be sought: HCGST and the tipping pointGovt amends quality control order for vinyl acetate monomerCX - Co-noticees cannot be held liable once the main noticees have resolved the matter under SVLDRS, as no further liability exists for them: CESTATGovt notifies 7.1% interest rate for Special Deposit Scheme for non-govt Provident FundsCus - The right to a fair hearing is fundamental and must be upheld even if procedural lapses occur on the part of appellant or department: CESTATGovt makes Aadhaar mandatory for receiving MSME benefitsST - Extended limitation - Department can request further documents or conduct an inquiry if duty escapes assessment; audit process should not be used as basis to assume suppression of facts: CESTATGovt revises procurement guidelines to give preference to domestically-manufactured iron and steelST - Department cannot invoke extended limitation on charges of evasion of tax, where it is aware of assessee's activities during relevant period: CESTATIndia delivers 625 MT of relief materials to quake-devastated MyanmarST - Allegations of suppression of facts with intent to evade payment of tax, do not hold where based on open-source documents & where issue involves interpretation of law: CESTATWorld waits with baited breath for Trump’s reciprocal tariff todayI-T - If AO had issued notice u/s 148A(b) which is much earlier to time-limit stipulated, i.e. within three years, then same can't be challenged on ground of limitation period: HCBatman, Val Kilmer, breathes last at 65India’s defence exports peaked to Rs 24K Crore in last fiscal: RMI-T- Re-assessment invalid where reasons therefor did not clearly identify any material facts that were not disclosed during original assessment: HCTrump freezes federal grants to Princeton UnivI-T - Mere production of books before AO from which material evidence could with due diligence were discovered by AO, will not necessarily amount to disclosure within meaning of 1st Proviso to Sec 147: HCChina brazenly stages military drills around TaiwanI-T- Stay on recovery proceedings rightly disallowed where assessee failed to make mandatory pre-deposit without sufficient evidence to justify its claim of financial stringency: HCTrump to take final call on TikTok proposal todayCBIC to introduce electronic processing of BoEs through personal carriage by air paxI-T-Protective Additions in Conduit Cases Unsustainable When Substantive Additions made through Identified Beneficiaries: ITATEPFO 3.0 will make EPFO as accessible and efficient as Banks: MandaviyaI-T - If loan has been used for business purpose, then in view of future prospective view of business, interest expenses should be allowed: ITATGovt has taken steps to build ship-building clusters: MinisterI-T - Statutory approval given by quasi judicial authority without due application of mind as contemplated u/s 153D, would be fatal to entire search assessment proceedings: ITATIndia becomes Chile's priority partnerI-T - Rejection of books of account of assessee ought to have been natural corollary to survey findings particularly when they alluded towards variations in stock and consequential profit of assessee: ITATRailways registers incremental loading of 1.68% across All CommoditiesI-T- Taxable Income determinable from Unexplained Deposits using Net Profit Ratios: ITATAPEDA boosts Millet Exports with trade fairs & global promotionsI-T- CIT(A) not required to call for remand report where evidence is already part of assessment record & AO had failed to substantiate his additions: ITAT
 
Political cul-de-sac for GST: Tax reforms - no longer jindabad!

TIOL - COB( WEB) - 217
DECEMBER 09, 2010

By Shailendra Kumar, Editor

UNITY among opposition parties, political thinkers often believe, is a healthy bulwark against the abuse of power by the ruling party or coalition. But, so far as the issue of the proposed Goods and Services Tax (GST) goes, it has mortally bruised the fiscal interests of the exchequers and also the greater cause of commerce in the country. What happened on Monday was beyond the latitude of expectations of most GST watchers. Although the cat had already jumped out of the bag that the members of the Empowered Committee on GST might not take up the issue of Constitutional Amendment Draft Bill but the final attendance reality turned out to be more shocking and disappointing for all stake-holders in the country. All the BJP-ruled States virtually boycotted the meet and probably whispered bon voyage to the GST-ship as if they had nothing to do with it or probably knew that it was destined to sink after sailing a few nautical miles away from the shore!

Sources confided in TIOL that so pathetic looked the attendance at this meet that it did not require astrological domain knowledge to predict that the proposed indirect tax reform has finally hit against the walls of a blind alley. Only eight Finance Ministers attended it - some of them even walked away quite early. Besides BJP States, even major Congress-ruled States like Maharashtra did not send its representative. Out of eight, a couple of them were from very small States which generally prefer to be onlookers rather than an active participant.

This has happened close on the heels of the inconsequential Goa meet. Netizens may recall that before meeting on December 6 in New Delhi, a large number of State FMs had gathered at the golden sandy beaches of Goa, some of them even with their families, to discuss about the proposed reforms. But when no press statement was issued, the field was left open for the media persons to speculate what might have actually transpired at this inviting tourist destination!

Things began going astray or off the track right from the August 4 meet in New Delhi when the EC rejected the Draft Bill proposing the twin bodies of the GST Council and the Dispute Settlement Authority (DSA). This was the time when Mr Amit Shah, a Minister in the Gujarat Government, was arrested, and the BJP preferred trading charges against the Central Government. The EC led by the soft-spoken West Bengal Finance Minister was forced by the majority to reject the Draft Bill on allegations like lopsided distribution of power in favour of the Centre. Veto power proposed to be vested in the Union Finance Minister was flayed in shrill voice. The constitution of DSA was stated to be avoidable at that stage.

Soon, the North Block honchos rephrased the contention-brewing provisions and dispensed with the veto power provision. They proposed that the GST Council may be driven by the 'Doctrine of Consensus'. However, the Centre stuck to the need for a DSA. The EC promised to reconsider the same in view of the close deadline of the monsoon session of Parliament as the Draft was earlier planned to be tabled and then referred to the Standing Committee. But at the next meeting, a good number of States harped on the dilution of their fiscal autonomy and voiced concern against the 'hurried reform agenda'. They also came up with a strange but 'intaxicating' alternative proposal for introducing a FLOOR RATE and a BAND RATE. In simple words, they wanted certain floor rates of GST which meant no State could go below that rate. And for the Band Rate, they articulated that they should have the flexibility to increase the rates by one or two per cent as and when they wished so.

Predictably, their new proposal did not cut much ice with the Centre which kept on insisting on the approval for the Draft Bill before other dimensions of the GST roll-out could be discussed. Even as the Finance Minister, Mr Pranab Mukherjee, continued to exude optimism, Mr Asim Dasgupta sent him a letter proposing a new alternative model - to allow States to collect Service tax on behalf of the Centre and the States in turn may allow credit for the same, and once they collect VAT and Service Tax, it would be very close to the proposed GST minus the Central Excise duty. Mr Mukherjee did not even spare second thought to reject it with disdain.

Probably, having expected such a predictable response from the Centre, the sharply-divided house of EC just wanted to last its pre-determined longevity. And, thus it never took up the ponderable issue of Draft Bill and kept itself busy with the 'toying issues' like the Exemption List, the threshold limit and the GST rates which come much after the basic legal mandate to levy GST by both the Centre and the States is obtained. That is how the Goa summit did not produce even a facile statement on the issue. The same happened in Delhi where Mr Dasgupta had no news to share with the media. He would now be heading for the State polls, and the taxpayers need not expect anything much meaningful from the EC in the coming months.

Interestingly, the Draft Bill indeed appears to be a hurriedly worded document which was not blessed with the necessary thoughts and vision required for a healthy legislation. For instance, the Bill proposes to keep some of the commodities like the HSD, natural gas, motor spirit, ATF and alcohol, out of the GST net. What fails to appeal to the common sense is the fact that why should a list of non-GST goods be made a part of the elaborate and contentious exercise of Constitutional amendment. Why can't its makers simply leave it to the discretion of the GST Council which may notify or denotify certain goods from the basket of GST-levied goods. This way it would be simpler to remove or add certain goods in future rather every time when a consensus emerges to bring certain exempted goods within the ambit of GST, one would have to go back to the Parliament for the same elaborate exercise of amendment, and then the vetting of the two-third State Assemblies.

Aside this issue, there are many other aspects which call for more decent planning by all the stake-holders. Although many of us may not like to believe that the proposed reform is dead but the fact remains that even if it is recoupable, it may not happen in the remaining period of the UPA-II Government. The political landscape has to undergo a major change before the proposed GST could get some fresh cylinders of oxygen. Till then, let's hope against the hope and focus on reforming the present system of indirect taxation. The Union Budget 2011 is not far away, and it can be a cajoling precursor for major changes in the future. Let's hope Mr Mukherjee continues to retain his aura of positivism and do what is needed to be done to make our tax system more commerce-friendly.