TIOL-DDT 2981
30 11 2016
Wednesday

AN appraisal of the testimony of the prosecution witnesses fully substantiate the recovery of the contraband i.e. Poppy Husk from the conscious possession of the accused persons. That the samples were properly sampled, sealed and forwarded to the Forensic Science Laboratory also stands established. The certificate of the Chemical Examiner, FSL to the effect that the seal of the samples was found intact and that the same tallied with the specimen seals also rules out the possibility of any tampering therewith. The fact that the contraband was recovered from the car while the same was being driven by one of the accused persons in the company of the other also authenticate the charge of their conscious possession thereof. The haul of six bags of Poppy Husk is substantial so much so that it negates even the remote possibility of the same being planted by the police. Furthermore, no evidence with regard to bias or malice against the Investigating Agency has been adduced. The prosecution has been able to prove the charge against the accused persons beyond all reasonable doubt.

Please see Dilbagh Singh v State of Punjab - 2016-TIOL-197-SC-NDPS

Service Tax - Sharing a common storage facility does not amount to one party providing a service to another - Supreme Court

GSFC and GACL were receiving Hydrocyanic Acid (HCN) from Reliance Industries Limited through common pipeline, which was partially utilized in their factory for manufacturing of their final product and was shared between them in the ratio of 60:40. Since incineration process was also required to be undertaken, the charges, which were incurred on the said process, were also shared in the ratio of 50:50. The Adjudicating Authority confirmed the demand of 'service tax' along with interest and also imposed penalties. The Commissioner (Appeals) dismissed by the appeal upholding the order of the Adjudicating Authority. Further appeal to the CESTAT has met the same fate.

The Supreme Court observed that in order to levy service tax pertaining to 'Storage and Warehousing' of goods, following two conditions are required to be satisfied:

1. The goods in question have to come within four corners of the definition of 'Storage and Warehousing' contained in Sub-Section 102 of Section 65 of the Finance Act, 1994;

2. In order to attract service tax, there has to be an element of service provided by one person to the other for which charges for providing such services are collected.

The Supreme Court considered the second question first and noted that for installation of these facilities both the parties had contributed towards the investment. Since the said handling facilities are in the premises of GSFC, incineration also takes place at the said premises. Handling facilities expenditure thereof is shared equally by both the parties. That is clearly provided in the agreement/arrangement that was agreed to between the parties and is reflected in the Minutes dated 06.07.1980.

The Supreme Court found that handling portion and maintenance including incineration facilities is in the nature of joint venture between two of them and the parties have simply agreed to share the expenditure. The payment which is made by GACL to GSFC is the share of GACL which is payable to GSFC. By no stretch of imagination, it can be treated as common 'service' provided by GSFC to GACL for which it is charging GACL.

For more details, please see Breaking News.

Enough Cash with Banks?

TWO Rajya Sabha Members asked the following questions:

(a) whether Government would ensure printing of Rs. 100 notes and making them available in adequate quantity for circulation in view of demonetisation of old Rs. 500 Rs. 1000 currency notes, if so, details thereof;

(b) the amount of money, and the number of pieces each, in respect of denominations Rs. 1000 and Rs. 500 that had been made non-legal tender;

(c) whether Government made proper arrangements for the convenience of public, in view of sudden demonetisation and closure of Banks and ATMs for two days, if so, details thereof; and

(d) whether 30th December deadline would be extended?

The Minister of State for Finance Mr. Arjun Ram Meghwal, yesterday answered the questions in the Rajya Sabha yesterday:

(a) to (d): There is sufficient cash available with the Reserve Bank of India (RBI) and the Banks. Circulation of notes in respect of Rs. 100 has already been increased. Further to cater to the requirement of rural areas, Banks have been advised to supply notes of smaller denominations (Rs. 100 and less). As on November 8, 2016 there were 17165 million pieces of Rs. 500 and 6858 million pieces of Rs. 1000 in circulation. The arrangements made for the convenience of the public are available at finmin.nic.in. No such proposal for extension of deadline beyond 30th December, 2016 is presently under consideration of the Government.

Yesterday I called up my bank manager and enquired if I could withdraw some cash. He told me that as I am a special customer, he could give me ten thousand rupees - there was no cash in the bank!

Early Implementation of GST - No Difference Between Centre and States

A Member of Parliament asked,

Will the Minister of FINANCE be pleased to state:

(a) whether it is a fact that differences exist between the Centre and States on the implementation of GST from the next financial year if so, the details thereof;

(b) whether Government is optimistic of implementing the GST from the next financial year in the light of prevailing no consensus between the States and the Centre; and

(c) the steps being taken by Government

The Minister of State Mr. Santosh Kumar Gangwar yesterday answered in the Rajya Sabha:

(a). No, sir.

(b) and (c) The Government intends to introduce GST regime in the country w.e.f 1.04.2017. To achieve this objective, the meetings of GST Council are being held regularly and so far, all the decisions of the GST Council have been taken unanimously.

GSTN - No security clearance was obtained in respect of private institutions

A Member of the Lok Sabha asked the following questions:

a) whether Government is aware that Goods and Services Tax Network (GSTN), a Special Purpose Vehicle (SPV) providing IT infrastructure and services to various stakeholders, is dominated by private and foreign stakeholders;

b) if so, the details thereof and the reasons therefor; and

c) whether these private institutions have security clearance by the Government, if so, the details thereof and if not, the reasons therefor?

Mr. Santosh Kumar Gangwar, the Minister of State for Finance answered:

a) to b): As recommended by Empowered Committee of State Finance Ministers (EC), the creation of GSTN-SPV was approved by the Cabinet in its meeting held on 12.04.2012 as a non-Government, not for profit (Section 25), private limited Company to be registered under the Companies Act, 1956, with 49 percent equity held by the Central Government and State Governments collectively and 51 percent held by non-Government institutions. Accordingly, GSTN was incorporated on March 28, 2013. The shareholding pattern ensures that Centre individually and States collectively are the largest stakeholders at 24.5% each. In combination, the Government shareholding at 49% far exceeds that of any single private institution.

(c): No security clearance was obtained in respect of the private institutions mentioned above.

Dr. Subramanian Swamy had said that GSTN cannot take off unless you first get security clearance.

GST - High Sea Sales - Aberration?

A Member of the Lok Sabha asked the following questions:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government is aware that GST model law is likely to create aberrations for transactions in the region on high seas;

(b) if so, the details thereof;

(c) whether sales on high seas that is between 12 and 200 nautical miles will be taxed twice to the IGST once as supply and latter at the time of import; and

(d) if so, the details thereof and corrective steps taken in this regard?

Mr. Santosh Kumar Gangwar, the Minister of State for Finance answered:

(a) to (d): The issue is being examined and a final view on the same would be taken by the Goods and Services Tax Council.

Missing Gold From Customs Vaults

A Member of the Lok Sabha asked the following questions:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government is aware of disappearance of gold from any of the vaults in the customs department;

(b) if so, the details thereof and number of such cases reported during the last three years and the current year, airport and citywise including Trichy Airport; and

(c) if so, the details thereof and action taken thereon?

Mr. Santosh Kumar Gangwar, the Minister of State for Finance answered:

(a): Yes, Madam.

(b) And (c): The details are given as under:-

FIRs/Complaints have been lodged with the Police/CBI

Service Tax on Life Insurance

A Member of the Lok Sabha asked:

(a) whether the service tax is leviable on the premium of life insurance policies and if so, the details thereof and the reasons therefor;

(b) whether the number of life insurance policies has decreased in the aftermath of introduction of service tax and if so, the number of life insurance policy holders under public and private life insurance companies before and after imposition of service tax during the last three years, company-wise; and

(c) whether the Government proposes to impose service tax on the maturity of insurance policy instead of levying at the beginning of the policy cover and if so, the details thereof and if not, the reasons therefor?

Finance Minister Mr. Arun Jaitley answered:

(a) There is no service tax levy on investment component of the premium of life insurance policy, as investment being a mere transaction in money, is outside the purview of service under the provisions of Finance Act, 1994. Service tax is leviable on that component of premium of life insurance policy which pertains to the risk cover and managing investment for the policy holders. This component of life insurance policy is the consideration for life insurance provided, which is a taxable service under the provisions of the Finance Act.

(b) After imposition of service tax on life insurance services with effect from 10-09-2004, there was a continuous increase in new policies issued till 2009-10. There has been a decline in the new policies issued since 2010-11 to 2014-15. Hence, this decline cannot be attributed to service tax. The decline can be because of several factors, such as, increasing penetration of insurance policies, easier access and awareness towards other investment options giving better returns.

(c) No, Sir. Generally, the point of taxation is the earliest of the three events of issuance of invoice, receipt of consideration or completion of provision of service. Service tax is levied at the specified rate determined in accordance with the point of taxation determined under Point of Taxation Rules, 2011.

Anti Dumping Duty on 'Axle for Trailers'

GOVERNMENT has imposed anti dumping duty on "Axle for Trailers" falling under tariff item 8716 90 10 originating in, or exported from People's Republic of China for a period of five years.

Notification No. 54/2016-Customs (ADD)., Dated: November 29, 2016

Exchange Rate for South African Rand

THE Government has announced new exchange rates for the South African Rand against the Indian Rupee. One rand will now be Rs. 5.15 for imports and Rs. 4.80 for exports from today. Till yesterday the rates were 4.90 and 4.60 respectively for imports and exports.

Notification No. 143/2016-Customs (NT)., Dated: November 29, 2016

Central Excise Chief Commissioner booked by CBI for bribery

WE were flooded with calls yesterday evening as the news spread that a lady Chief Commissioner was booked by the CBI.

She is the second senior-most IRS officer in the country having joined the IRS (Customs and Central Excise) in 1979, when she was barely 23. She would have happily retired on 31st of December 2016 as the Chief Commissioner of Central Excise, Chennai holding charge for the entire State of Tamil Nadu. But today, she is an accused in a CBI case and the corruption charge is - taking money from the staff for transfers. It is no secret that 'transfer' is a major commercial activity in the Revenue Department. But what is surprising is that in these days when cash is scarce, people still find hot cash to pay bribes. (CBI is reported to have recovered nearly 5 lakh rupees in this case.) In the cashless society to which we hope to catapult shortly, will the ingenious Indian find ways to pay and receive bribes digitally?

This is perhaps the first time that a very senior Lady Revenue officer is booked by CBI. Generally, the ladies in the IRS are less prone to corruption than their male counterparts, but there are some who have proved that they are no less than the men - even in amassing illegal wealth.

The rumour that Modi will go for another demonetisation makes sense. And maybe this time there should be no exchange and no deposit.

Until Tomorrow with more DDT

Have a nice day.

Mail your comments to vijaywrite@tiol.in