TIOL-DDT 2852
24 05 2016
Tuesday

BY Notification No. 8/2014-CENT and 9/2014-CENT both dated 28.2.2014, the CE Rules and CENVAT Credit Rules were amended to stipulate that an importer who issues an invoice on which CENVAT Credit can be taken, is required to get registered and file a quarterly return.

Representations have been received from the trade stating that in the case of assessees who are both "importers" and "dealers" the need for taking separate registration and filing separate returns has increased procedural compliance and transaction cost. For improving ease of doing business they have requested for a single registration and return for such assessees .

In DDT 2385 30 06 2014, we covered this issue as:

Now if an importer deals with indigenous goods also, should he get registered as a dealer and separately as an importer? Should he get a new registration as an importer even if he is already registered as a dealer? The Mumbai Chief Commissioner of Central Excise says, YES .

Many assessees feel that these are more of directions than clarifications and complicate the issue further. They feel that this could not have been the intention of the Board and the Government. Why should you tie up the assessee with more and more procedural wrangles? They expect the Board to clarify.

Board is trying to solve the problem after nearly two years.

Board has examined the issue and is considering optional facility to an assessee who conducts business both as an importer and a first stage dealer, to take only one registration. Secondly, such assessees who conduct business both as a first stage dealer and an importer shall also have the option of filing a single quarterly return giving details of transactions as a first stage dealer and an importer one after the other in the same table of the return.

Board has released a draft Notification and Circular proposed to be issued. Board wants feedback from the departmental officers and the Members of the Trade by 6th June, 2016 on the email id: shankar.sarma@nic.in

Please also see Are two registrations required under CE Law for a dealer?

CBEC F.No 201/042016-CX.6., Dated: May 23, 2016

Issue/Modification in Importer Exporter Code - DGFT Clarifies

AS Para 2.14(b) of HBP (2015-20), "An application for modification may be made for change in details like name, address, constitution, ownership in Proprietorship firms, change in nature of the firm e.g. from proprietorship to partnership etc. Change in constitution however, does not include change in Directors of Public Limited Company."

It seems there is some problem in modification of IEC in cases where there is a change in the PAN. It is highlighted that with the change in the constitution of the firm/change in the nature of the firm such as from Partnership to Limited Liability Partnership etc., there is a change in the PAN number and the new PAN number needs to be incorporated in the existing IEC, replacing the PAN already registered against the current IEC.

Since each IEC is tagged to a particular PAN in the system, modification in PAN was not being entertained by the Regional Authorities - the prime consideration being how to transfer and seamlessly carry forward the liabilities of one firm, which merges into another or changes its nature and name.

To resolve the issue, matter was taken up with the Ministry of Corporate Affairs and they are of the view that:

1. conversion of a firm or an LLP into a company or

2. merger of a company into another company or

3. merger of two or more companies to form a new company or

4. demerger of a company to form a new company

does not extinguish the liability if any, of the Transferor Entity/Company and the liability of such Transferor Entity/Company would automatically vest in the Transferee Entity/Company, by operation of Law.

So, DGFT directs:

1. the RAs shall henceforth consider applications seeking modification in IEC, involving change in PAN, by ensuring that liabilities of the previous applicant/applicant firm are transferred to the new applicant/applicant firm whose PAN will be reflecting in the modified IEC.

2. RAs must also share the modified IEC, with the changed PAN incorporated in it, with all concerned authorities. (who is concerned?)

Power of Attorney Holder can sign: It is noticed that RAs have been rejecting applications digitally signed by Power of Attorney (instead of a Director) on the ground that power of attorney is not explicitly mentioned in the application format issued vide PN No. 58 dated 01.02.2016. DGFT clarifies that applications digitally signed by power of attorney holders/authorised signatories are to be entertained.

DGFT Trade Notice No. 6/2016., Dated: May 23, 2016

Income Tax -TDS - Relaxation for Furnishing of UID

THE provisions of section 197A of the Income-tax Act, 1961 inter alia provide that tax shall not be deducted, if the recipient of certain payment on which tax is deductible furnishes to the payer a self-declaration in Form No.15G/15H in accordance with provisions of the said section. The manner of filing such declarations and the particulars have been laid down in Rule 29C of the Income-tax Rules, 1962.

The amended Rule 29C which came into effect from 1st October, 2015 in addition to paper filing, also provides for online filing of self-declaration for non-deduction of tax under section 197A of the Act.

Sub-rule (3) of Rule 29C provides for allotment of Unique identification number to each declaration received in Form 15G/15H by the deductor. Further, sub-rule (5) of Rule 29C provides that the payer shall also furnish unique identification number along with the details of the transactions covered under Form 15G/15H in quarterly TDS statements in accordance with the provisions of clause (vii) of sub-rule (4) of Rule 31A irrespective of the fact that no tax has been deducted in the said quarter.

Representations have been received that due to operational constraints, the Form 15G/15H and the details thereof could not be included in the quarterly statement for the quarter ending 31.12.2015 and 31.3.2016 respectively.

Taking into account the concerns of the stakeholders, the Central Board of Direct Taxes, has relaxed the condition of furnishing of Unique identification number allotted by the deductor for the quarter ending 31.12.2015 and 31.3.2016 in the quarterly statement of deduction of tax in accordance with sub-rule (5) of Rule 29C.

CBDT Circular No. 18/2016., Dated: May 23, 2016

Income Tax - email based communication for Paperless Assessment Proceedings-Hyderabad and Kolkata Added

PAPERLESS assessment/e-assessment has been conceived to usher in a paperless environment while carrying out regular assessments of cases selected by the Department. In this regard, to start with, the CBDT had, during the last Financial Year, decided to implement the e-mail based assessments on a pilot basis in non-corporate charges of 5 cities i.e. Ahmedabad, Bangalore, Chennai, Delhi and Mumbai where the e-mail based assessment proceedings were initiated and disposal of several cases has been reported.

It has now been decided to cover two more cities, Hyderabad and Kolkata, for implementing e-mail based communication scheme for paperless assessment proceedings.

It is now open for all the taxpayers assessed in those seven cities, whose cases have been selected under scrutiny, to opt for being scrutinized under the e-mail based paperless assessment proceedings by giving their consent.

However, the cases, which require submission of voluminous documents and it is not practicable to submit the scanned copies through e-mail, the documents could be received by the assessing officer in physical form provided reasons are recorded for the same. It is also necessary that proper Note-sheet is maintained for recording the entire proceedings.

The Directorate of Systems is in the process of developing a dedicated module for comprehensive e-scrutiny. Till the same gets functional, the Assessing Officers may be advised to follow Notification No.2/2016 dated 3rd Feb 2016 issued by Pr. DGIT(Systems) prescribing the procedure, formats and standards for ensuring secured transmission of electronic communication. Further, the instructions issued by the Member (IT) vide his D.O dated 9th May 2016 may also be strictly complied with.

In order to make the Scheme a success, Board requests the Principal Chief Commissioners to give due publicity in media and create awareness and a sense of confidence so that the taxpayers of these seven cities, whose cases have been selected under scrutiny, give their consent for being covered under the e-mail based paperless assessment proceedings.

CBDT Letter in F.No.225/267/2015/ITA.II., Dated: May 23, 2016

Customs - Timely cancellation of bond executed with Customs in Advance Authorization Cases - reg

THE Commissioner of Customs (NS-IV), JN Custom House, Mumbai issued a Public Notice yesterday highlighting that in the matter of time taken in cancellation of bonds executed by exporters in respect of advance authorizations, the following guidelines have been issued.

a) Regarding verifications of address shown on authorisation/availability of inputs imported duty free, the percentage of random checks have been reduced from “at least 5%” cases to “5% cases”. These checks are to be initiated periodically every month and the checks/ verification will be completed during the validity of authorization.

b) Non-receipt of confirmation from Central Excise will not cause delay in processing a subsequent application for cancellation of bond.

c) The exporters are requested to identify those cases, where export obligation period is getting over and keep their documents ready for processing.

d) The exporters are requested to provide their email to Customs so that they may be informed in the event of their authorization being selected for checks/ verification.

e) to bring transparency into the process of bond cancellation for Advance Authorisation, a verifiable record will be kept in respect of the applications received for bond cancellation with documents, and every 3rd day or earlier if required by quantum of EODC inflow, selection for checks will be made from the relevant applications and intimated to the exporters. Exporters are requested to share their e-mail addresses on the application.

The CBEC had actually issued these instructions on 02.12.2015 and the Board wanted the Chief Commissioners to give publicity to these guidelines through issuing public notice. Board had requested the Chief Commissioners to monitor the functioning on a monthly basis and ensure strict implementation.

It took just six months for the Public Notice to be issued.

Commissioner of Customs (NS-IV), JN Customs Public Notice No. 74/2016., Dated: May 23, 2016

Income Tax -Manner of determination of fair market value-CBDT Invites suggestions

UNDER section 9 of the Income-tax Act, 1961, income arising from indirect transfer of assets situated in India is deemed to accrue or arise in India. The provisions of section 9(1)(i) of the Act provides that if any share of or interest in, a foreign company or entity derives its value substantially from the assets located in India, then such share or interest is deemed to be situated in India. Thereby, any income arising from transfer of such share or interest is deemed to accrue or arise in India.

In this regard, draft rules and forms to be incorporated in the Income-tax Rules, 1962 have been formulated for comments from stakeholders and general public. The comments and suggestion on the draft rules may be sent by 29th May, 2016 electronically at the email address, ustpl1@nic.in.

F No 142/26/2015-TPL , Dated : May 23, 2016

CBSE Topper - IRS parents

THIS girl is relatively poor in Mathematics, English and Computer Science as she got only 99% marks in each of these subjects compared to the 100% she got in Physics and Chemistry. That is Sukriti Gupta, this year's topper in CBSE XII class examination. She got a mind boggling score of 497 out of 500 marks! Sukriti's parents Rakesh Gupta and Renuka Jain Gupta are both IRS (Income Tax) officers. CBDT should honour Sukriti.

Until Tomorrow with more DDT

Have a nice day.

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