Perception of Trade of CBEC:
22 09 2015
Tuesday
ON behalf of CBEC, FICCI and KPMG conducted a survey. The objective of the survey was to set priorities for reforming business processes and improving the taxpayers' experience while dealing with Indirect taxes administration. The questionnaire covered the following key business processes: Interaction experience (from interactions with officials of field offices to the Ministry); Dispute resolution; Refund claims; Onsite audit by the department; Electronic taxpayer services; Burden of documentation; Seeking clarifications from CBEC and its field offices.
The recently held conference of Chief Commissioners and Directors General of CBEC was informed that the Taxpayers' Experience Survey has highlighted following key concerns:
(i) That tax payer be treated as Tax-abider instead of a Tax-evader;
(ii) Remove the focus from revenue target approach;
(iii) Clarity should be provided in tax matters;
(iv) Streamlining of instructions / circulars by issue of annual master circulars;
(v) Significant delay in grant of refund claims, rejection of refund claim on trivial grounds; Unwarranted litigation without considering merit of the case;
(vi) Provision for setting aside of Show cause notices by an empowered authority;
(vii) Persistent delay in responding to queries / concerns of taxpayers;
(viii) Need for continuous follow-up for any completion of process;
(ix) Onsite audits being conducted using outdated methodologies;
(x) Lack of customer service approach;
(xi) Huge burden of manual / physical documentation;
(xii) High frequency of transfer without proper handover leaves taxpayers clueless.
It is one month since the conference is over - maybe they will discuss these issues in the next conference too.
Infosys gets GSTN
ADDRESSING the Chief Commissioners' Conference, Mr. Navin Kumar, Chairman GSTN told the Chief Commissioners that GSTN is envisaged to be a pass through portal which will perform three key front-end functions namely Registration, Returns and Payment while statutory functions in relation to these processes and other functions will be performed at the backend module of the respective Central & State Governments. It was pointed out that GSTN will also be developing backend modules for 13 state governments and more states are expected to avail this facility in the future. As for the revenue aspect, it was informed that Cabinet had approved a self-sustaining revenue model wherein GSTN will levy user charges on tax-payers and tax authorities availing GST services. But after discussions in the Empowered Committee (EC) it was suggested that GSTN should derive its revenue from the payment of user charges by Central and State Governments respectively. As for the readiness of GSTN to handle its defined functions it was enunciated that RFP (Request for Proposal) had been issued by GSTN on 21st April 2015 and 5 bids were received from IT companies namely Infosys, TCS, Wipro, Tech Mahindra & Microsoft. It was informed that the technical evaluation of the bids is in progress and selection is proposed to be finalised by end of August.
It is understood that they have finalized the bid yesterday and Infosys is the successful bidder for the Rs. 1320 Crore contract.
What is CBEC's Role in GST?
THE conference of Chief Commissioners was informed by Member (ST) that CBEC will have a key role in the levy and collection of CGST, IGST and 1% Additional tax. Moreover, the policy making function in relation to GST such as drafting of laws in relation to these taxes will be the purview of CBEC. It was pointed out that CBEC would have to be proactive for taking steps in relation to capacity building and infrastructure development in order to meet the growing needs of GST regime. It was enunciated that there is a strong requirement for redefining administrative structure for addressing the challenges of GST.
It was informed that GST CBEC system will act as platform for the performance of various statutory functions including backend processes of three front end functions being performed by GSTN namely Registration, Returns and Payment. Incomplete business processes which are yet to be finalized by the Government for GST as well as time constraint are the crucial challenges that Systems is facing while developing the GST- CBEC system.
Let us pray that they don't carry the compulsive litigation legacy into GST.
Infrastructure - CBEC given Rs 20 Crores, spends 42 lakhs
THE DGHRD informed the conference that as against a sanctioned grant of Rs.20 crore, for repair and maintenance, a sum of only Rs.0.42 crore had been utilized so far. The Chairman observed that the irony would not have been lost on the Chief Commissioners that we have not spent a penny till date and keep asking for more.
Free Home Delivery of Food - No Service Tax - Deputy Commissioner Withdraws Clarification
AS we reported in DDT 2672 - 27 08 2015, the Deputy Commissioner of Central Excise and Service Tax Division, Chandigarh has clarified to a restaurant:
Please refer to your office letter dated 22-7-2015 (received in this office on 23-7-2015) on the above cited subject where under Clarification as to whether Service Tax is payable on food sold by way of Pick-up or Home deliveries has been sought.
It is clarified that in case of the transaction involving Pick-up or the Home Deliveries of the food sold by the Restaurant, the dominant nature of the transaction is that of sale and not service as the food is not served at the Restaurant and further no other element of service which is offered at the Restaurants, be it ambience, live entertainment, if any, air conditioning, or personalized hospitality is offered. The Service Tax can be levied if there's an element of 'Service' involved which would typically the case where food is served in restaurant.
The above transaction is not liable to Service Tax, being sale in nature, only if, no amount is charged for such free delivery of food.
This is issued with prior approval of the Additional Commissioner.
DDT asked, "Does the CBEC agree with this?"
The National Restaurant Association of India (NRAI) asked the same question to the Revenue Secretary [Please see DDT 2683]. Neither the Revenue Secretary, nor the CBEC clarified but on 9.9.2015, the Learned Deputy Commissioner concerned issued a letter to the Restaurant stating that his previous letter may be treated as withdrawn ab initio. And this withdrawal letter is also issued with the prior approval of the Additional Commissioner.
Why should a Deputy Commissioner sitting in Chandigarh give such a controversial clarification and then hastily withdraw it? Just to create confusion?
Clarity in tax matters?
FTP - Temporary Import/Export of Exhibits - Only one bond
AS per Para 2.63(a) of the Handbook of Procedures, 2015-20,
Import / export of exhibits, which are freely importable/exportable, including construction and decorative materials required for the temporary stands of foreign / Indian exhibitors at exhibitions, fair or similar show or display for a period of six months on re-export / re-import basis, shall be allowed without an Authorisation on submission of a bond/ security to Customs and ATA Carnet.
This is now amended to read as:
Import / export of exhibits, which are freely importable/exportable, including construction and decorative materials required for the temporary stands of foreign / Indian exhibitors at exhibitions, fair or similar show or display for a period of six months on re-export / re-import basis, shall be allowed without an Authorisation on submission of a bond/ security to Customs or ATA Carnet.
The condition of submitting of both bond / security to Customs and ATA Carnet have been replaced by either bond / security to Customs or ATA Carnet.
Declare Black Money by September 30th or face consequences - CBDT
THE CBDT in Press Release states,
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) has been enacted to deal with the menace of black money stashed abroad. The Act provides for a one-time compliance opportunity which will end on 30th September, 2015.
Failure to declare an undisclosed foreign asset will entail severe consequences under the Act, including higher penalty, prosecution, and may also result in forfeiture of assets under the Prevention of Money Laundering Act.
Persons holding undisclosed foreign assets are advised to file their declarations well in time. The information contained in the declaration will be kept confidential as section 138 of the Income-tax Act is applicable to the declarations. The process of filing declaration is simple and the declaration can be filed online also. The fears of harassment of the declarants expressed in certain fora are unfounded.
CBEC Worried about Attrition?
RECENTLY several IRS officers have sought voluntary retirement, even as the Government is seriously considering compulsory retirement of unwanted officers.
CBEC in a letter to the Chief Commissioners yesterday states:
Rules 48 of the CCS (Pension) Rules, 1972 provides that at any time after completion of 30 years of service, a Government servant may retire from service after giving three months notice. It is open to the Appointing Authority to withhold permission in such cases if the Government servant is under suspension.
Rule 48A of the CCS (Pension) Rules, 1972 provides that at any time after completion of 20 years of service, a Government servant may retire from service after giving three months' notice. This notice of voluntary retirement requires acceptance by the Appointing Authority subject to the condition that where the Appointing Authority does not refuse to grant permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period. Hence, in terms of this rule, the Appointing Authority has the discretion to refuse permission for voluntary retirement.
Of late it has been observed that the concerned Chief Commissioners/CCAs merely forward such requests to the Board without examining the merit of the case. Voluntary retirement sought under Rule 48 and 48A of the CSS (Pension) Rules, 1972 by Service personnel should be properly examined on the basis of Officer's HoP, APARs, vigilance records etc. This should not be referred/proposed to the Board for acceptance as a matter of routine - reasons should be given in detail, justifying the request.
Board has observed that officers are seeking VRS without giving adequate/sufficient/convincing reasons/grounds and these are being forwarded in a routine manner by CCAs. In the course of their service, these officers acquire experience/knowledge of the day to day functioning of the Department, particularly the technicalities involved in collection/enhancement of revenue. This experience and knowledge of the officers are valuable assets, which go a long way in improving the efficiency and delivery mechanism of the Department. Their sudden departure deprives the Department of their institutional memory/experience. Any request for VRS under Rule 48A will first be examined on merit by Cadre Authority and only if there is sufficient and reasonable ground, such cases of VRS may be recommended to the Board.
The officer concerned should be informed by the Chief Commissioner/Director General/Commissioner concerned that he continues to be on duty till the decision of the competent authority is communicated by the Board.
CBEC F.No. 26014/13/2015-Ad.IIA., Dated September 21 2015
CENVAT Credit on Cellular Phone Towers- Supreme Court Issues Notice
IN Bharti Airtel Ltd Vs Commissioner - 2014-TIOL-1452-HC-MUM-ST, the Bombay High Court held that the towers and parts thereof and the prefabricated building, printers and office chairs are not capital goods under the Credit Rules, 2004 and also that the said goods are not inputs falling under Rule 2(k) of the Credit Rules.
Recently the same High Court in the Vodafone India case 2015-TIOL-2098-HC-MUM-ST, confirmed this view. (DDT 2683).
Vodafone is in Supreme Court. The Supreme Court yesterday ordered Notice on the Appeal and Stay and tagged the matter with related cases.
Until Tomorrow with more DDT
Have a nice day.
Mail your comments to vijaywrite@tiol.in
