TIOL-DDT 2907
10 08 2016
Wednesday

AS per Rule 9(1)(a)(i) of the CENVAT Credit Rules, an invoice issued by a manufacturer is a document on the basis of which Cenvat Credit can be taken.

As per Rule 11(3) of the Central Excise Rules, the invoice shall be prepared in triplicate in the following manner, namely:-

(i) the original copy being marked as ORIGINAL FOR BUYER;

(ii) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;

(iii) the triplicate copy being marked as TRIPLICATE FOR ASSESSEE.

Now, is there any restriction on which copy of the invoice can be used for taking Cenvat Credit?

This question was raised in the meeting of the Regional Advisory Committee of the Chief Commissioner of Central Excise Chennai Zone held on 12.07.2016.

The question was:

Whether the duplicate copy (digitally signed) accompanying the transportation alone is the document for credit availment or credit is possible based on invoices through the digital form itself .

The Department replied:

Rule 9 of the Cenvat Credit Rules, 2004 prescribe documents for the purposes of taking Cenvat Credit which includes invoice issued for clearance of goods. Further, Rule 11(3) of Central Excise Rules, 2002 prescribes that invoice for removal of goods shall be prepared in triplicate and duplicate copy shall be marked as "Duplicate for Transporter".

Further, Rule 4(1) of CCR stipulates that credit can be taken on receipt of inputs into the factory or the premises of job worker. It is clear from the harmonious reading of the above provisions that credit can be taken only on the basis of duplicate copy of invoice and issuing digital invoice has not altered the above provisions .

Is the assessee required to go through the exercise of harmonious reading of several provisions of the Law to determine the copy of invoice on which he can take credit?

A harmonious reading would also lead to a conclusion that the ‘duplicate copy' is meant only for the transporter and has nothing to do with taking credit. Now whose harmonious reading would prevail?

Will the Board clarify that there is no such provision in law that credit can be taken only on the ‘duplicate copy' of the invoice?

Board should also instruct the Chief Commissioners that they should not confuse the trade and the field with such wrong clarifications. At least the Board should be taken into confidence before such important (and wrong) clarifications are given.

GST - One Nation - Two Departments and Three Taxes - GST Administration

THE "One Nation - One Tax" will actually be two Departments, the Central GST and IGST administered by CBEC and the State GST administered by the State VAT Departments.

How will these two departments administer the GST? The staff strength and hierarchy in these two departments are vastly different.

A comparison of the two departments in one of the States:

How will they realign the overstaffed Central Excise with the understaffed Commercial Taxes? Will 10 CGST Commissioners interact with 1 SGST Commissioner? And who will the Principal Chief Commissioner interact with?

It is not as if the Commercial Taxes Department with about a third of the strength of the Central Excise Department is collecting any less revenue.

The VAT revenue for 2014-15 was Rs. 23,000 crore while the Central Excise and Service Tax Revenue was less than half at about Rs.10,000 crore.

Dr. Ravindra Babu TDP MP suggested in the Lok Sabha that a new Central Service called the IRS (GST) should be created to administer the GST. Dr.Babu is a former IRS (Customs) officer.

Leakage of Classified Information from Customs

IT seems representation has been received from trade regarding leakage from Customs of classified information containing identification details of the importers/exporters and their trade details. It has been represented that classified Indian import/export shipment data is being leaked from Customs department which puts at risk businesses and overall trade activity of the nation.

In an office note, the Commissioner of Customs (Imports), Mumbai Zone-III observes, "It may be appreciated that access to business information and data should be controlled in order to restrict access to authorized users only. In this regard, though the representation is not specific to this Commissionerate, however, considering the seriousness and sensitivity of the issue, attention of all staff members is invited to the Instructions regarding User Access Management and Information Security, issued vide DG(Systems), New Delhi letter F. No. IV(26)/104/2008-Systems dated 28/10/2013. Diligent compliance of the aforesaid instructions will streamline the functioning at field level and will thus rule out/minimize the chances of security breach."

In view of the above, the Commissioner wants strict observance and compliance of the instructions by all staff members. Any instance of non-compliance will be viewed seriously and will invite strict action.

Revenue is Booming

Direct Taxes Collection up by 24%: Direct Taxes collections up to July 2016 stood at Rs.1.59 lakh crore  which is  24.01%  more than the net collections for the corresponding period last year. The growth rate under CIT (Corporate Income Tax) is 11.65% while that under PIT (Personal Income Tax) is 31.47%. However, after adjusting for refunds, the net growth in CIT collections is 2.84% while that in PIT collections is 46.55%. Refunds amounting to Rs.64,181 crore have been issued during April-July, 2016.

Indirect Taxes Collection up by 30%: Indirect Taxes collections up to July 2016 stood at Rs.2.72 lakh crore  which is  29.9%  more than the net collections for the corresponding period last year.

Total collections on account of Central Excise during the first four months of current FY 2016-17(April 2016-July 2016) stood at Rs.1,23,273 crore as compared to Rs. 81,748 crore during the same period in last Financial Year and thereby registering the growth of 50.8%.

Total collections on account of Service Tax during the first four months of current FY 2016-17(April 2016-July 2016) stood at Rs.76,679 crore as compared to Rs. 60,974 crore during the same period in last Financial Year and thereby registering the growth of 25.8%.

Total collections on account of Customs during the first four months of current FY 2016-17 (April 2016-July 2016) stood at Rs. 71,767 crore as compared to Rs. 66,495 crore during the same period in last Financial Year and thereby registering the growth of 7.9%.

GST in India - Travails, Tribulations and Challenges

Mr Dutt Majumder, former Chairman of the CBEC has written a rather exhaustive book on "GST in India, Its Travails, Tribulations and challenges ahead".

Picture shows Majumder presenting a copy of the book to our Managing Editor Shailendra Kumar.

Maybe Modi can add another acronym: GST - Great Smiles Together

Until Tomorrow with more DDT

Have a nice day.

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