TIOL-DDT 2740
08 12 2015
Tuesday

CBDT and CBEC have extended the due dates for payment of taxes and filing returns in Tamil Nadu due to the unprecedented floods, but in their anxiety, both the Boards have forgotten the Union Territory of Puducherry, which faced an identical calamity.

DDT hopes the Boards will extend the same concessions to the taxpayers in Puducherry, as was done for those in Tamil Nadu.

Adjudication of DRI Cases - CBEC Instructions

CBEC had issued a complicated Circular No. 18/2015-Cus  dated 9.06.2015 on adjudication of DRI cases. It seems DRI has pointed out some difficulty and now Board has issued some revised instructions on adjudication.

The following cases investigated by DRI shall be assigned to Additional Director General (Adjudication), DRI:

(i) Cases involving duty of Rs. 5 Crores and above;

(ii) Group of cases on identical issues involving aggregate duty of Rs. 5 crore and more;

(iii) Cases involving seizure value of Rs 25 Crore or more;

(iv) Cases involving wrong availment of export incentives where the export incentives wrongly availed is Rs 5 Crore or more;

(v) Group of case on identical issues involving wrong availment of export incentives aggregating to Rs 5 Crore or more;

(vi) Cases of overvaluation of import where overvaluation is Rs 25 Crore or more; and

(vii) DRI case pending with erstwhile Commissioner (Adjudication).

Board says its Circular No. 18/2015 is modified to that extent. That means both the Circulars are valid and you have to read both together to understand who can adjudicate what. Hope the adjudicators have no confusion.

CBEC Circular No. 30/2015-Customs., Dated: December 04, 2015

Forfeiture of Security Deposit by Employees - Liability to pay Service Tax - DGCEI MO Circular

DURING the course of investigation against a Company, DGCEI noticed that the Company is forfeiting security deposits given by the employees as they could not comply with the terms of employment like leaving the organization without giving stipulated notice or completing the bond period. To the DGCEI, it appeared that the activity of forfeiture of a security deposit given by the employee is a taxable service under the provisions of Section 66E (e) of the Finance Act, 1994.

As per Section 66E of the Finance Act, 1994, the following shall constitute declared services, namely:-

(a),(b),(c),(d),...

(e) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.

The DGCEI feels that:

1. The activity of entering into an agreement by the employer with the employee to allow him to forfeit the security deposit or paying some charges/expenses/fee etc., in case of his leaving the employment without giving stipulated notice or completing the bond period, appears to be covered under the declared services of, "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act".

2. These services are being provided by the employers to its employees and consideration in terms of forfeiture of security deposit or other payments is being received by the employers in lieu of these services. Hence Service Tax would be leviable on employers for providing these services.

3. The recovery of an amount, in terms of forfeiture of security deposit or other payments, from employee for leaving the organization as stated above is a common phenomenon in business organizations.

DGCEI has communicated this Modus Operandi to all the Chief Commissioners to be brought to the notice of the field formations under their charge for taking necessary action in similar cases. Action taken and results achieved in this regard has to be communicated to the Directorate General.

Incidentally, we had carried an article on this very issue titled 'Notice Pay' charcha - Service Tax Implications by CA Pritam Mahure earlier this year.

Interview for COIN Posting for IRS Officers

THE Other side of the COIN: COIN  is another sleuth organisation, little known outside a small coterie in the Customs Department. This is the Customs Overseas Intelligence Network known as COIN, mostly filled with former DRI officers. These COIN officers work in foreign countries for Indian Customs.

COIN is a prestigious and highly prosperous posting for the ex DRI officers. An officer of the level of Additional Commissioner would get a monthly salary of about three lakhs of rupees, mostly tax-free with a lot of other allowances thrown in plus the attraction of working in a foreign country in the Indian Embassy.

The CBEC has decided to hold an interview at 11.00 AM on 12.12.2015 (Saturday) of the IRS (C&CE) officers for the posts of First Secretary in COIN Units at Hong Kong, Dubai, London, Moscow and Kathmandu and for the post of Second Secretary at Brussels. The Board has called 15 Additional Commissioners for five posts of First Secretary.

GST is No Game Changer

IT is reported that the Bank of America-Merrill Lynch (BofA-ML) 'India Economy Watch' report says " While GST is a most desirable measure from a taxation point of view, we think the market over-estimates benefits in calling it a game changer." The report further says,

"Although much is made out of gains from fiscal incentives or tax administration efficiencies, the fact is that tax buoyancy is pretty much pro-cyclical.

We support the implementation of the much-awaited GST as a most desirable fiscal measure. After all, it is only logical to unify the Indian market, removing the plethora of inter-state taxation that fragments it now. Not only does this make collection as well as payment of taxes difficult, but it also delays transportation across states as trucks have to pay state-specific taxes."

Errors in Bills in Parliament

YESTERDAY in the Lok Sabha, an honourable Member brought to the notice of the Government the errors in the copies of Bills given to Members. He said,

I would like to bring to the knowledge of the hon. Law Minister the fact that the Bill which has been circulated contains a lot of errors in the annexure about the amendment they are making..

The parts which are going to be modified or omitted are not found in this Bill. Some Sections of the Act are also not found in the Annexure circulated along with the Bill.

I would like to inform the hon. Minister also that of late, the Bills which are circulated to the Members contain many errors and omissions. Some of them are corrected by way of corrigenda which is again followed by another corrigenda for correcting errors. The new Members find it very difficult to understand the provisions of the Bill and the purpose of the amendment which is sought to be made.

Hence, I would request the hon. Law Minister to circulate Bills without errors and also print the complete Bill with complete bare Act which will be amended so that reading and understanding the Bill will become easier for the Members.

The babus may find this kind of interference by parliamentarians in law making, very inconvenient.

Until Tomorrow with more DDT

Have a nice day.

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