News Update

The Income Declaration Scheme, 2016 - Clarifications

DDT in Limca Book of Records - Third Time in a rowTIOL-DDT 2949
14 10 2016

CBDT has issued certain clarifications on the just concluded 65000 crore Income Declaration Scheme, 2016.

Electronic Acknowledgement : As per Rule 4(3) of the Income Declaration Scheme Rules, 2016, "The Principal Commissioner or the Commissioner shall issue an acknowledgement in Form-2 to the declarant within fifteen days from the end of the month in which the declaration under section 183 has been furnished."

Representations have been received from field authorities to allow electronic mode of communication as a valid mode of service for issuance of Form-2 under the Income Declaration Scheme, 2016.

Board clarifies that keeping into consideration the confidential nature of the declarations made under the Scheme, it has been decided that electronic communication of Form-2 on the email address mentioned in Form-1 shall be considered as a valid mode of service in respect of the electronically filed declarations under the Scheme.

Eligibility of the assessee to file declaration :Representations have also been received from field formations seeking clarification as to the eligibility of the assessee to file declaration under the Scheme where search and seizure operation has been conducted on or after 01.06.2016.

Board clarifies that in a case where a search and seizure operation has been conducted on or after 01.06.2016 but before making of declaration under the Scheme, the assessee shall not be entitled for filing a declaration under the Scheme in respect of the assessment years for which a notice under section 153A/153C of the Income-tax Act can be issued. The previous year in which search is conducted is already not eligible for declaration under the Scheme as declaration under the Scheme can be filed only upto A.Y.2016-17.

CBDT Instruction No.11/2016, Dated: October 13, 2016

GSTN - Swamy to file PIL

Dr. Subramanian Swamy has tweeted that if Government does not implement the RS Comm recommendation to remove all Pvt parties from GSTN & MoH security clearance then PIL. Oct 31 deadline.

The Rajya Sabha Select Committee on the Constitution (122 nd Amendment) Bill had observed,

"The Committee feels GSTN shall play a crucial role in implementation of GST as it shall provide the IT infrastructure for implementation of GST. It noted that Non Government shareholding of GSTN is dominated by private banks. This is not desirable because of two reasons. Firstly, public sector banks have more than 70% share in total credit lending in the country. Secondly, GSTN's work is of strategic importance to the country and the firm would be a repository of a lot of sensitive data on business entities across the country. In light of above, the Committee strongly recommends that Government may take immediate steps to ensure Non Government financial institution shareholding be limited to public sector banks or public sector financial institutions."

Swamy had earlier said that in the "normal" course security clearance from the Ministry of Home Affairs should have been obtained as GSTN would be handling sensitive tax data.

GST - Agitation by Central Excise Superintendents - Board Advises Refrain

THE All India Association of Central Excise Gazetted Executive Officers has given notice vide their letter dated 04.10.2016 for observing the following:

(i) Peaceful Lunch Hour gathering in front of the residence of the FM on 14.10.2016 to hand-over the Memorandum and Lunch Hour peaceful protests in front of every Headquarters Office throughout the country.

(ii) Peaceful Lunch Hour protests on 09.11.2016 in all CCA Offices throughout the country.

(iii) Wearing of Black Badge in all Offices on 07.12.2016 throughout the country.

(iv) Day long protest programme in front of all CCA offices on 05.01.2017 throughout the country.

(v) Mass Casual Leave on Budget Day by all Officers.

The Board in a Memorandum addressed to the the Secretary General, All India Association of Central Excise Gazetted Executive Officers states,

GST is a major tax reform. All decision will be taken by the GST Council, keeping in mind the interest of all concern (maybe what they mean is 'all concerned'. The Board seems to have a peculiar way concerning the word 'concern') - the taxpayer and officers. In this back ground, you are advised to refrain from proposed course of action.

At the same time, the Board has also issued a veiled threat that the proposed action might invite disciplinary action under the Conduct Rules.

And the Association has taken a decision to defer the agitation programme of today.

CBEC Memorandum in F.No.C-30013/6/2012-AdIVA-Vol.II., Dated: 10th October, 2016

Customs - Foreign Post Offices Notified As Customs Stations

THE CBEC has notified the Sub - Foreign Post offices at Vijayawada, Leh and Hyderabad as Land Customs Stations for the clearance of all goods or any class of goods imported or exported by land. Notification No. 63/94-Customs (NT), dated 21.11.1994 is amended.

Notification No. 125/2016-Customs (N.T)., Dated: October 13, 2016

TDS on lump sum lease premium paid for acquisition of long term lease - CBDT Clarifies

SECTION 194-I of the Income-tax Act, 1961 (the Act) requires that tax be deducted at source at the prescribed rates from payment of any income by way of rent. For the purposes of this section, "rent" has been defined as any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or machinery or plant or equipment or furniture or fittings.

The issue of whether or not TDS under section 194-I of the Act is applicable on 'lump sum lease premium' or "one-time upfront lease charges" paid by an assessee for acquiring long-term leasehold rights for land or any other property has been examined by CBDT in view of representations received in this regard.

CBDT clarifies that lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property are not payments in the nature of rent within the meaning of section 194-I of the Act. Therefore, such payments are not liable for TDS under section 194-I of the Act.

CBDT Circular No. 35/2016, Dated: October 13, 2016

Show Cause Notice does not speak about period of service - Adjudication Order Quashed

RECENTLY the Chennai Bench of the CESTAT set aside an order passed on a Show Cause Notice which did not mention the period of demand. The entire order of the Tribunal is reproduced here:

It is submission on behalf of the appellant that the authority has applied the rate of tax as that was on the date of payment of the tax while the rate of tax is applicable only in respect of the provision of the service on the date such service is provided.

2. Revenue supports the adjudication.

3. When the show cause notice at page 18 of the appeal folder is read, it does not speak about the period of service. When the liability arose is not coming out of the show cause notice, it is a case of denial of course of natural justice to defend. Such an ill founded show cause notice not being expectation of the law, adjudication fails to stand. Accordingly, the orders are set aside and both the appeals are allowed.

Please see 2016-TIOL-2684-CESTAT-MAD

Pendency and Disposal of appeals by Commissioners (Appeals) - Board Wants Report

CBEC has informed ALL the Chief Commissioners that the quarterly administrative report on pendency and disposal of appeals by Commissioner (appeals) for the quarter ending 30.09.2016, has not been received by the Board and requests then to send the report by 14th October 2016 by fax and e-mail. Board also informs them that the report is to be put up to Revenue Secretary on 18.10.2016.

Best of Luck!

CBEC F.No. 275/47 /2010-CX.8A., Dated: October 13 2016

Tax Sugary Drinks - WHO

A new WHO (World Health Organisation) Report says, "Taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay."

Fiscal policies that lead to at least a 20% increase in the retail price of sugary drinks would result in proportional reductions in consumption of such products, according to the report.

Reduced consumption of sugary drinks means lower intake of "free sugars" and calories overall, improved nutrition and fewer people suffering from overweight, obesity, diabetes and tooth decay.

Nutritionally, people don't need any sugar in their diet. WHO recommends that if people do consume free sugars, they keep their intake below 10% of their total energy needs, and reduce it to less than 5% for additional health benefits.

The Report also suggests:

• Subsidies for fresh fruits and vegetables that reduce prices by 10-30% can increase fruit and vegetable consumption.

• Taxation of certain foods and drinks, particularly those high in saturated fats, trans fat, free sugars and/or salt appears promising, with existing evidence clearly showing that increases in the prices of such products reduces their consumption.

• Excise taxes, such as those used on tobacco products, that apply a set (specific) amount of tax on a given quantity or volume of the product, or particular ingredient, are likely to be more effective than sales or other taxes based on a percentage of the retail price.

• Public support for such tax increases could be increased if the revenue they generate is earmarked for efforts to improve health systems, encourage healthier diets and increase physical activity.

In this year's Budget, Kerala had imposed a "Fat Tax" of 14.5% on burgers, pizza, tacos, donuts, sandwiches, burger-pattys, pasta, bread fillings and other cooked food items sold by branded restaurants. An additional revenue of Rs.10 crore is expected.

Will the GST regime take care of this?

A tax loophole is "something that benefits the other guy. If it benefits you, it is tax reform."

Until Monday with more DDT

Have a nice weekend.

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