TIOL-DDT 2815
29 03 2016
Tuesday

INSTANCES of unscrupulous persons being able to put to use non-genuine transferable duty credit scrips or duty free import authorizations have been noticed in the field formations. Accordingly, the Board has decided to sensitize field formations on the issue. Board wants a balance between common prudence and trade facilitation and enforcement.

++ Field formations are to verify the genuineness, of the duty credit scrips/DFIA, from the issuing authority, through fast and reliable means. This verification is not to be done by Custom Houses when scrip/DFIA is simultaneously received online through electronic transmission from DGFT.

++ Where export of goods under specific shipping bills/bills of export (not filed electronically in Customs EDI) shown in annexure/condition sheet of the reward duty credit scrip is involved, the backing shipping bills need to be verified for genuineness.

++ In certain situations pertaining to reward scrips the Custom Houses are not required to verify genuineness of the scrip and/or its backing shipping bills (if any). Such situations require only check of absence of alert before registration. Registration, in such cases, should be ensured within 3 hours of presentation of reward scrip. In other cases of registration of reward scrips, a norm of registration within one day, excluding time taken if any at end of the Issuing Authority, should be adopted by Custom Houses.

++ For transferable DFIA, prior to registration, it is to be verified that the details of exports given along with the DFIA matches the record of exports and is genuine. For both, the discrepancy, if any, found needs to be first referred to Regional Authority of DGFT.

++ In registering duty credit scrip or DFIA which is not simultaneously received online through electronic transmission from DGFT, care should continue to be exercised that correct particulars are entered in the Customs EDI system so that there is no room for mismatch of details.

++ The respective notifications issued under Customs Act 1962, inter alia, prescribe that the scrip/authorization shall be presented before the proper officer of customs at the time of clearance for debit. This is, inter alia, for preventing non-genuine usage, for example, arising from difference between scrip/DFIA particulars   vis a vis particulars shown on bill of entry, or from scrip of one scheme getting used for clearance under another scheme, etc. The absence of dematerialized system for recording issuance and transfer of scrips/DFIA issued by DGFT also necessitates presentation of the scrip for ensuring that use is by a genuine transferee holder-importer.

If your scrip is still not genuine, it is as good as good as holding a fake currency note.

CBEC Circular No. 12/2016., Dated March 28 2016

Declaration of Assets and Liabilities by Babus - No more Extension

IN October 2015, the Government had extended the last date of furnishing of information relating to assets and liabilities by public servants under section 44 of the Lokpal and Lokayukt as Act, 2013 up to 15.04.2016.

Now the Government clarifies that there shall be no further extension of the aforesaid last date i.e. 15.04.2016.

Government further clarifies:

1. The first return (as on 1st August, 2014) under the Lokpal Act should be filed on or before the 30th April, 2015;

2. The next annual return under the the Lokpal and Lokayukt as Act, 2013 for the year ending 31st March, 2015 should be filed on or before 31st July, 2015; and

3. The annual return for subsequent years as on 31st March every year should be filed on or before 31st July of that year.

Government wants to know the details of the movable and immovable properties of the babus which includes:

1. Cash and bank balance

2. Investments

3. Loans

4. Motor vehicles

6. Jewellery

6. Furniture

7 Paintings

8. Antiques

Also see DDT 2702, 2585, 2505 & 2504

DoPT Office Memorandum in 407/12/2014-AVD-IV(B)., Dated March 28, 2016

AO Refuses to give acknowledgment - High Court frowns - The least that is expected of civil servant is to be fair and civil

AN assessee filed a Stay Application with the Income Tax Assessing Officer on 17th February 2016. The AO refused to give an acknowledgement. The assessee filed a writ in the High Court on 23rd February and served a copy on the AO on the same day. Immediately the AO gave an acknowledgement to the assessee.

In his affidavit in reply, the AO stated that the assessee should have filed the application for stay at the ASK center located in Aayakar Bhavan, where the Income Tax Department has made arrangements for acceptance of tapal addressed to all the officers located at Aayakar Bhavan - this after accepting the application and giving an acknowledgement.

The High Court was not impressed and observed,

We find this conduct on the part of the Assessing Officer to accept a stay application and not immediately give acknowledgement of its receipt is unacceptable. The least that is expected of a civil servant is to be fair and civil.In the absence of the above, his conduct is not one becoming of an Officer belonging to the prestigious Indian Revenue Service. The least that is expected of an Officer is that when a person files an application / letter, which is accepted by him, an acknowledgement should be forthwith given to the party filing the application or letter. In case he refuses to accept the letter he should endorse on the letter / application the reason why it is not being accepted with a line or two for the refusal to accept. In case he does accept it and give an acknowledgment he can deal with the applications / letters as is appropriate in accordance with law. We believe that what has happened in this case is an aberration. However, the Chief Commissioner of Income Tax would ensure that his Officers do not behave in such a high handed and unfair manner, not expected of civil servants.

April 14 - Dr Ambedkar's Birthday Declared Holiday

GOVERNMENT has decided to declare Monday, the 14th April 2014 as a closed holiday for all Central Government offices including Industrial Establishments. This holiday is also being notified under Section 25 of the Negotiable Instruments Act, 1881.

The Government has been notifying this day as a holiday every year since 1990. For the last twenty six years, the government had been separately notifying this holiday. Why can't it be included in the general list of closed holidays published before the beginning of every year?

There was a strange case before the Central Information Commission on this issue. The applicant asked the Ministry of Personnel, Public Grievances and Pensions:-

What is the criterion for declaring birthdays of departed leaders as gazetted holidays? Do leaders like Netaji Subhash Chandra Bose or Pandit Jawahar Lal Nehru not fulfil the criterion to have their birthdays also as national holidays on lines of birthdays of Mahatma Gandhi and Dr. BR Ambedkar? Is it fair that birthdays of leaders like Mahatma Gandhi or Dr. BR Ambedkar are made holidays contrary to their noble ideas of hard work?

The Ministry replied:-

1. There is a policy decision that no holiday should be declared on the birthday of any national leader other than that of Mahatma Gandhi.

2. Holiday on Dr. B.R. Ambedkar's birthday: It is not one of the regular annual holidays. However, since 1990 this occasion has been declared as a closed holiday for all Central Government administrative offices.

The persistent applicant pleaded, "I appeal that details and rules may be clearly mentioned under which Dr. B. R. Ambedkar's birthday is being observed as a closed holiday since 1990"

The Ministry gave a some what curious response:-

As per RTI Act Section 8 (I) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-(a) information, disclosure of which would prejudicially affect the sovereignty and integrity of India, therefore, under the provisions of Act, no information can be provided to the first Para of your appeal.

The Government feels that disclosure on the holiday would prejudicially affect the sovereignty and integrity of India!!!

The Government can at least save some paper by including this holiday in the general list of holidays or if that is not possible declaring this holiday also along with the general holidays list.

Just imagine the exercise they do every year. Somebody has to search for this file and put up a note like this.

Since 1990, Government has been declaring a holiday on the birthday of Dr. Ambedkar which falls this year on 14th April 2016. It may be considered whether we should declare a holiday this year also.

This file will go from Assistant to Section Officer to Under Secretary to Deputy Secretary to Joint Secretary to Secretary to minister and perhaps even the Prime Minister.

The file will come back to the Assistant through the same route and somewhere down the line, a Joint Secretary will issue directions to put up the orders. The Assistant will prepare a draft order and send it for the signature of the Deputy Secretary, strictly through the channel and it will come back to him again through the channel. He will get hundreds of copies made and they will be sent to all Ministries, offices, attached and subordinate, courts, banks PSUs etc, where also hundreds of copies will be made and further circulated. And this is being done regularly sincerely and without a miss for the last 26 years. Certainly, Dr. Ambedkar would not have approved.

There should be some ease of doing even government business.

DOPT OM in F No. 12/6/2016-JCA-2, Dated: March 21, 2016

Service Tax and TDS

ANY payment made to any service provider is subject to TDS under Income Tax Act. If such service provider is a person resident outside India, still it is subject to TDS. But the service provider does not agree to deduct TDS. He expects the agreed amount to be paid to him in foreign currency. This being the situation, the amount paid to the service provider is grossed up by working back with TDS rate to arrive at the gross amount. The difference between such gross amount and the net amount paid is the TDS portion which is borne by the recipient of service in India.

The amount paid to the service provider who is residing outside India is subject to service tax under reverse charge since it being import of service. In terms of Section 67 of the Finance Act, 1994, service tax is payable on the Gross Amount charged by the service provider.

Is the TDS grossed up, as above, also part of the Gross Amount for the purpose of discharge of service tax?

Please see TDS grossed up is no longer gross amount for service taxin our Service Tax se GST Tak.

Budget 2016 - Write off Pakistan Dues - 300 Crores

I am never tired of repeating this.

There  is one item consistent and uniform in all Union Budgets from 1950. If you look at the Annexure-5(i) to the Receipts Budget of India, 2013-14, you will find certain interesting figures.

India's debt by the end of March 2016 would be around rupees 69 Lakh Crores which would be more than 74 lakh crore by the end of March 2017.

As per the Statement of the Liabilities of the central Government, the Total Liabilities are Rs. 68,92,213 Crores. From this an amount of Rs. 300 crore is deducted and the net liability is shown as Rs. 68,91,913 Crores.

What is this amount of Rs. 300 Crores?

This is supposed to be  "Amount due from Pakistan on account of share of Pre-partition debt (Approx)".

This same amount had been shown consistently in all our budgets since 1950, including this year's.

In 1950-51, when our total liability was Rs. 2865 Crores, this 300 Crores was deducted to arrive at Rs. 2565 Crores. Thus, the dues from Pakistan constituted slightly more than 10 percent of our debts. Ten percent of the present liabilities would amount to about 6.9 Lakh Crores, about half of today's budget. 

Even at 6% interest per annum, this would amount to about Rs. 15,000 Crores now.

The fact is that we are not able to collect this amount from Pakistan for the last 66 years. Why should we keep showing it in the budget year after year? Is it to show our inability to collect from Pakistan or do we send a copy of our Budget to Pakistan to remind them gently that they owe us Rs. 300 Crores? Why can't we simply write off this 300 Crores and be done away with it instead of having this blot in all our annual budgets year after year? As a goodwill gesture, can't we tell Pakistan that their dues are written off?

This is something that the Finance Minister can consider without sacrificing any pecuniary benefits and perhaps the Prime Minister can earn a few goodwill points.

Until Tomorrow with more DDT

Have a nice day.

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