News Update

CBIC issues transfer order of 54 Commissioners + mixed transfer order of 54 IRS officersCBIC posts two IRS officers in TRUHigh time that the GST department prescribes a standardized format for the arrest memo: HCGST - Evasion of tax - Reason to believe - Power to arrest u/s 69 can be invoked by the Commissioner without there being any adjudication: HCRenewable energy certificate (REC), taxable under GST, is also an output of generation of electricity - proportionate claim of ITC admissible: AARApplicant seeks a ruling on a supply to be received by it - in view of s.95(a) of the Act, said question cannot be taken up for consideration: AARActivity of body building undertaken on a truck chassis made available by a customer to the applicant amounts to supply of services: AARServices provided by applicant relating to testing of chemicals in fresh table grapes are not classifiable under SAC 9986 and is not exempt: AARSupply of cigarettes mentioned in the menu by the restaurant is a mixed supply and taxable @28% GST plus GST compensation cess: AARChennai Metro Rail acquired property for public purpose and gave the right to use pathway to the earlier owner to access main road - act of agreeing to grant easement rights for a consideration is a supply classifiable under SAC 999794; GST @18%: AARRecipient of supply cannot seek advance ruling: AARPre-mix popcorn maize packed with edible oil and salt is correctly classifiable under CTH 2008 and chargeable to GST @12%: AARCredit Card services imported by applicant is chargeable @18% IGST on reverse charge: AARPrinting of content provided by recipient on PVC materials and supply of printed trade advertising material is a supply of service, SAC 998912; attracting GST @18%/12%: AARArrest before adjudication of offence under GST in the backdrop of allied Acts (See 'The Insight' in Taxongo.com)Loan moratorium - Union of India informs Apex Court - Banks to credit interest on interest by Nov 5IGST Refund - Import under AA - Rule 96(10) - Insertion of Explanation - 54/2018-CT is effective from 23 October 2017 - Exporters who already claimed refund under second option need to payback IGST along with interest and avail ITC: HCIndian NGO Global Himalayan Expedition wins UN Global Climate Action Award for providing solar energy to remote communitiesEncore Vodafone! (See 'TII Edit')Vivad se Vishwas Scheme - Due date for payment extended till Mar 31, 2021Customs - CBIC clarifies Sec 65 units can source capital goods or inputs from SEZ or FTWZNDPS - 1.230 Kg of Charas recovered qualifies as commercial quantity as per Sec 20(ii)(c) of NDPS Act - conviction of accused upheld: SCA Tax on Walking, Reading... for the disabledNDPS - Non-examination of independent witnesses would not ipso facto entitle one to seek acquittal - Compliance with Sec 50 need not be examined where accused possessed commercial quantity - conviction upheld: SCNDPS - If the accused applies for bail u/s 167(2), CrPC r/w s.36A(4), NDPS Act upon expiry of 180 days or the extended period, as case may be, the Court must release him on bail forthwith without any unnecessary delay: SC LBCBDT promotes Nitin Gupta as Pr CCIT on ad hoc basisGovt amends SEZ Rules to allow drawback or any other benefit if payments are in foreign currency in case of supplies from DTA to foreign suppliers in FTWZAnti-Dumping duty on Fluoroelastomers (FKM) imported from China PR extended up to 27th November, 2020Vivad se Vishwas Scheme - CBDT extends due dates for filing declaration and making payments to Mar 31, 2021Export of NBR Gloves - Procedure for submission of applications explainedST - When credit was reversed without utilization, no interest can be recovered: CESTAT
 
Dear FM, GST-boat is not fully rocked; A few quick steps may bring it back on rail!

TIOL - COB(WEB) - 199
AUGUST 05, 2010

By Shailendra Kumar, Editor

IN a significant development, the State Finance Ministers who are members of the Empowered Committee on GST, have yesterday summarily rejected the Draft Constitutional Amendment Bill sponsored by the Union Government. For most TIOL Netizens it may be a shocking and unexpected development but for many of us in TIOL Editorial it would have been more shocking if the Empowered Committee would have approved it in its present format. The proposed amendment bill which intends to vest the Union Finance Minister with the veto power as the head of the proposed GST Council, contains the embryo of lopsided dynamics of powers. In their zeal to please the Union Finance Minister the North Block honchos had failed to see the writing on the wall - unwilling States being cajoled by the FM to come to the negotiation table. It was well known that as soon as the States get even a small reason to protest against the proposed reforms, they would not miss the opportunity. In this backdrop, there was no chance that they would miss the wood for the tree!

Given the fact that the 'doctrine of consensus' has been the key driving force for the proposed indirect tax reforms, the North Block and the Law Ministry should have avoided showing the red rags to the 'bulls'! Any provision which lends dominant powers and responsibility for one of the negotiating partners in the proposed multi-lateral framework, was expected to evoke strong protest. And this is what has happened. Instead of a veto provision by the Centre, the ideal configuration would be the 'decision-by-consensus' even within the proposed GST Council. There is substance in the suggestion of the Kerala FM when he talked about having a Vice-Chairman post reserved for the States. Even the idea of rotating the post of Chairman between the Centre and the States is not bad, and its feasibility needs to be perused carefully.

Everything is certainly not lost as yet. The Union Finance Minister's battery of top officials just need to sit down with the State representatives, may be for 72 hours at a stretch, and redraft all those provisions which may invite locking horns or shrill protests from the States. Once it is ready, the EC can quickly convene another conclave in the next 10 days, and once the Draft is approved, a Bill can be moved before the Monsoon Session of Parliament comes to an end. The next 20 days are exorbitantly critical for the GST if it is destined to come into force from April 1, 2011. If the EC and the Centre fail to make use of the present Session of the Parliament which would necessarily be referring the Amendment Bill to the Standing Committee, it would be too late to table it in the next session. If Mr Dasgupta is indeed serious about what he has been pursuing for the past several years, he should cooperate with the Centre and meet the historic deadline.

But going by his statement (The Draft in the present form would “infringe upon the financial autonomy” of states), it may be inferred that either Mr Dasgupta has developed cold feet or now wants to play his own set of politics by talking about the alleged infringement of financial autonomy of the States. When all the stake-holders have been negotiating the possible fusion of financial powers of each party, where is the question of any other independent financial autonomy for any of the parties. Even the Centre would be losing its autonomy to amend the Central Excise and service tax rates once the GST is put in place. Mr Dasgupta or others in the EC should be talking about the specific objections to certain provisions rather than alleging any clothed move by the Centre to grab their powers. The entire Draft Bill is not unpleasant. Only a few provisions call for fine-tuning or rewording which can be achieved if party politics is kept at arm's length.

Unfortunately, the shadow of politics appears to be overshadowing the proposed reforms. The Amit Shah episode particularly appears to be ill-timed if one goes by its pernicious effect on the GST negotiations. Gujarat and MP have come out openly against the Constitutional Amendment Bill and do not appear to be in a mood to embrace their tryst with the real GST next fiscal. Many other States supported by the BJP or others have also protested against. Worse, even two of the Congress-ruled States - Andhra Pradesh and Haryana - have frowned at the Draft Bill. The UPA Govt's coalition partner DMK has also joined hands with others to rock the GST boat. All these States need to rise above their territorial and party politics if the GST is destined to be a reality by the next fiscal.

Meanwhile, while addressing the Parliament yesterday and answering questions on the inflation, the Union Finance Minister elatedly talked about the proposed GST system. He said the precious metals, bullion and other similar commodities are proposed to be taxed at 1% under CGST so that the 1% list is common both for SGST and CGST. The Centre proposes to shift the remaining commodities which are in the exempted category under Central Excise to the lower rate of the CGST. The FM also talked about the proposed GST rates, exemption threshold of Rs 10 lakh for both the goods and the services and the threshold for compounding for small traders.

All such talks would be inspiring confidence and hope among the taxpayers provided Mr Pranab Mukherjee makes his moves swiftly and bring back all the detractors to the negotiation table and amend the contentious provisions to the liking of the consensus. Any reforms of this magnitude which is historic by character, calls for Himalayan patience and courage to retrieve even a dying situation to the liking of the future course of events. Let's hope the Union Finance Minister and Mr Dasgupta move quickly to bring the GST talks back on rail!