News Update

GST - Credit card holder offered loan - Service rendered by Citi Bank in extending loan is nothing but a service pertaining to the said credit card - Interest component of EMI of loan advanced by bank is not exempted: HCGST -Since the petitioner has prayed for a relief to compel the respondent bank to grant exemption, the writ petition is maintainable: HCCus - Order cancelling Special Warehouse Licence is an appealable order before the Tribunal - Respondent to work out the remedies in accordance with law: HCGST - Printing of content provided by recipient using paper & materials of applicant and supply of such printed leaflets to recipient is a composite supply - Supply of service of printing is principal supply; GST @18%: AARCX - SVLDRS, 2019 - In the SCN, it is not mentioned that the duty demand is jointly and severally payable - A co-noticee is one who is liable for the very same amount along with others: HCGST - Authority has proceeded to pass order for cancellation of registration on new material or facts which neither formed part of SCN nor the same were disclosed to writ applicant - Order set aside: HCGST - TRAN-1 - Rule 117 being directory in nature, the time limit for transitioning of credit would in no manner result in forfeiture of rights even when credit is not availed within the period prescribed: HCGST - Age is just a numberI-T - Amount received in excess of amount standing to credit of partnership firm which is paid towards notional gain on revaluation of land is liable to tax : HCGovt revises tariff value of edible oils & goldI-T - Prosecution of assessee upheld where wilful concealment of correct income by not filing ITR within time stipulated, is clearly established : HCDigital Assets transfer - CBDT notifies Form 26QF for crypto exchangeI-T - Re-assessment - Best of judgment order - Assessee not diligent in pursuing matter, failed to give adequate reply to notices; cannot later allege contravention of natural justice: HCCBDT notifies NFT resulting in transfer of ownership to be excluded for taxation purposeI-T - One opportunity can be granted to assessee as offence is compoundable: HCNiti Aayog & WFP table report on Take Home Ration schemeI-T - Case can be fixed for either limited scrutiny or complete scrutiny and in case it is for complete scrutiny, then no written approval is required by AO from PCIT: ITATConsumer Price Index for Industrial Workers for May 2022 rises by 1.02%I-T - Penalty imposed u/s 271(1)(c) sustained where assessee does not submit any evidence to show that it made voluntary disclosure during assessment proceedings, before detection of bogus loss claimed: ITAT8 Core Industries - Power, Cement, Coal & Fertilisers record high growth in May 2022I-T - Assessee did not write off provisions for doubtful debts due to fear of losing right to civil proceedings for recovery of debts; deduction allowed for provision of doubtful debts: ITATGovt releases calendar for Treasury Bills auctionI-T - Amount received in excess of amount standing to credit of partnership firm which is paid towards notional gain on revaluation of land is liable to tax : ITATGST Tribunal - Challenge is to remove microbes of bias in fleshing it out!Cus - Once in 100% EOU, raw material imported duty free is used in manufacture of final product and same is cleared on payment of duty in DTA, customs duty on raw material cannot be demanded: CESTATGST FileCX - Empty packaging material of cenvatable input is not liable for payment either as excise duty or as cenvat credit under Rule 6(3) of CCR, 2004: CESTATGovt releases Public Debt Management report for Jan-Mar 2022ST - Relevant date for computing six months periods under Notification No. 41/2007-ST to be taken the date when service tax paid and not first day of month following quarter in which export made, merely on the ground of limitation refund cannot be rejected: CESTATMigration of e-BRC Portal/Website to new IT platformST - Since the typographic error in challan number and corelation of compiled record of appellant is impressed upon by them, request of remanding the matter is hereby accepted: CESTAT
 
GST ke liye kuchch bhi karega!

TIOL - COB( WEB) - 232
MARCH 24, 2011

By Shailendra Kumar, Editor

ANY talk of tax reforms at a time when the entire Government is beleaguered with a volley of corruption charges, indeed require bravehearts. And the Finance Minister, Mr Pranab Mukherjee, is one of such bravehearts. Unperturbed by all the charges of wrong-doing, Mr Mukherjee, last Tuesday, moved several vital amendments to the Finance Bill, 2011. Along with them, he also tabled the much-speculated GST Constitution Amendment Bill. Among the amendments, one noticeable change on the direct tax side was the relaxation in the equity holding in the foreign subsidiaries of Indian companies which would be subjected to concessional rate of 15% dividend tax if funds parked abroad are brought into the country. Having seen the FDI inflows on slide in the past one year and also a flood of representations the FM has reduced the equity share from more than 50% to 26% or more to be eligible for the tax benefits.

Since the tax rate applicable to such funds was 30%, there was indeed no incentive for the Indian corporates to bring back the dollar money into the country. Most corporates have been keeping their such funds parked overseas for future takeovers or JVs. But, with the FM announcing the relaxation in share-holding, one may now expect that a good number of Indian companies which may even be holding only 26% stake in a Joint Venture will also be eligible for this benefit.

Let's now go to other amendments which were proposed, keeping in mind the proposed GST roll-out. On Service tax front, the FM had proposed the 'Point of Taxation' rule to infuse certainty in determining tax liability which has for long been a bone of contention for the lack of an independent Service Tax Act. Although the intention of the Govt was good but the proposal turned out to be too hurried and least debated. A good number of service providers expressed their concern about the difficulties the proposed change was likely to pose in their routine working. Thankfully, their concern was well attended to by the mandarins in the North Block who finally agreed to defer it by three months. Ideally, it should have been six months so that the policy-maker could have held some close interactions with various segments of the economy.

Let's now go to another GST-related proposal announced in the Budget. The FM had withdrawn Central Excise exemption granted to 130 items, and brough them under 1% levy. He had also given the option of 5% levy with Cenvat Credit availment facility. The industry took some time to fathom the actual impact of this levy which resulted in widespread protest and representations. Marooned by letters from even the Parliamentarians and industry associations, particularly, small-scale units, the FM came out with a solution in the form of an abatement. Since withdrawing the levy would have harmed the cause of GST, he has announced 35% abatement for 1% levy. Notifications in this regard would be issued next week.

A similar benefit has been granted to the branded readymade garments industry which was the first to hit the streets with placards and dharnas. The abatement has been hiked to 55% to soften the impact of 10 % central excise levy.

But the most historic step was to table the 115th Constitutional Amendment Bill which would vest powers in the Centre as well as the States to levy GST on the common taxbase. To do so, the Bill proposes to insert Article 246A. To tax inter-state trade in goods and services, the Bill proposes to insert Article 269A. It has defined GST in Article 366. The much-speculated GST Council is proposed by Article 279A. In tune with the First Draft, the Bill proposes to make the Union Finance Minister as the Chairperson of the Council. Besides FM, the MoS(R) will be the second nominee from the Centre on the Council. For the States, all State Finance Ministers would be the Members of this Council, and they would elect one amongst themselves as the Vice-Chairperson. This Council is going to give veto power to each Member and thus, no State could complain of loss of fiscal autonomy. However, once agreed upon, no State will have the freedom to tinker with the GST rates. The Council is largely going to act as a bulwark against frequent tinkering with the tax rates unlike the present day VAT system.

In case of a dispute, the Bill proposes to set up a GST Dispute Resolution Authority vide Article 279B. This body headed by a retired SC Judge or HC judge would act on complaints relating to deviation, if any, reported to it either by the Centre or the State. This three-member body would settle all top-level GST disputes.

Having tabled this Bill the FM, deservingly, must have heaved a long sigh of relief. Now that the ball is in the court of the Parliament and the State Assemblies, they need to rise above their partisan politics and approve the Bill. For smooth sailing of this Amendment, at least 50 % of State Assemblies are required to pass it. Once that is done, the first hurdle to roll out GST will be overcome. The second hurdle will be the GST rates, followed by the GST Acts and then the GST IT-platform for smooth implementation. It is learnt that most of homework is done on other fronts, and once this Amendment Bill is through, industry and trade may hope to see GST by October 2012 or April 2013. Let's hope good sense prevails over States and they approve this Bill without much delay.