Government Speed Track - GST - CBEC Releases More Draft Rules and Formats - Gigantic Task Indeed
TIOL-DDT 2939
28 09 2016
Wednesday
CBEC really deserves a smart salute for the massive work it has turned out in taking GST forward. After releasing
1. Draft Registration Rules
2. Draft Formats for Registration
3. Draft Payment Rules
4. Draft Format for payment
5. Draft Invoice Rules
6. Draft Formats for invoice
on 26th, CBEC yesterday released the
1. Draft Return Rules
2. Draft Return Formats
3. GSTR 9B
4. ITC Mismatch Report
5. Draft Refund Rules
6. Draft Refund Formats
ITC is Input Tax Credit and the seamless availing of credit will determine the success of GST.
There are 27 forms prescribed in relation to returns. The Returns Rules also cover the Tax Return Preparer.
The following persons can be Tax Return Preparers:
1. A retired Group-B gazetted officer of State Commercial Tax Department or CBEC. So even a retired appraiser of Customs or a retired Private Secretary in the Central Excise Department is eligible.
2. One who has passed a graduate or postgraduate degree or its equivalent examination having a degree in Commerce, Law, Banking including Higher Auditing, or Business Administration or Business Management from any Indian University established by any law for the time being in force. (What does this mean? Is he supposed to have a dual degree qualification?)
3. One who has passed the final examination of the Institute of Chartered Accountants of India; final examination of the Institute of Cost Accountants of India; final examination of the Institute of Company Secretaries of India, along with a degree examination.
A Tax Return Preparer can undertake any or all of the following activities on behalf of a taxable person, if so authorised by the taxable person:
(a) furnish details of outward and inward supplies;
(b) furnish monthly, quarterly, annual or final return;
(c) make payments for credit into the electronic cash ledger;
(d) file a claim for refund; and
(e) file an application for amendment or cancellation of registration.
Refunds: There are ten forms pertaining to refund and one of them RFD-07 is a show cause notice. The heading for this form reads as Show cause notice for reject of refund application. Maybe what they mean is SCN for rejection or rejecting the refund. If you don't reply to the notice within 15 days, the refund claim stands rejected.
The sheer magnitude of the work in bringing out all these complicated laws for GST, is mind boggling and there are bound to be a few mistakes and aberrations which can be later corrected. In two days the GST Council will approve all these rules and formats most probably without any serious discussion. Only if the babus change their attitude and be more responsive and responsible, all the problems can be solved. But if the CBEC officers continue with their SCN-confirmation-recovery-arrest-appeal mechanism, GST is bound to land in a worse mess than Service Tax was taken into.
Good News for CBEC in Supreme Court - Mega Cabs and MakeMytrip Stayed
IN the Mega Cabs case - 2016-TIOL-1061-HC-DEL-ST, the Delhi High Court
1. declared Rule 5A(2) as amended in terms of Notification No. 23/2014-Service Tax dated 5th December 2014 of the Central Government, to the extent that it authorises the officers of the Service Tax Department, the audit party deputed by a Commissioner or the CAG to seek production of the documents mentioned therein on demand is ultra vires the FA and, therefore, struck it down to that extent;
2. held that the expression 'verify' in Section 94 (2) (k) of the FA cannot be construed as audit of the accounts of an Assessee and, therefore, Rule 5A(2) cannot be sustained with reference to Section 94(2)(k) of the FA.
3. declared the Circular No. 181/7/2014-ST dated 10th December 2014 to be ultra vires the FA and struck it down as such.
The Supreme Court on 26th September stayed the High Court Order - 2016-TIOL-162-SC-ST. (Please also see DDT 2861 06 06 2016)
A day later, yesterday, the much battered DGCEI tasted success in the Supreme Court. In the MakeMyTrip case - 2016-TIOL-1957-HC-DEL-ST, the Delhi High Court lambasted the DGCEI for arresting top executives and realizing alleged tax without even a show cause notice. Even cost was imposed. DDT 2922 02 09 2016 observed, "The story will not end here - the aggrieved DGCEI is sure to take the case to the Supreme Court.". They did and got a stay yesterday.The Supreme Court ordered,
Issue notice. Counter affidavit to be field within 02 weeks and rejoinder within 02 weeks thereafter. High court order stayed. No coercive steps to be taken. Adjudication process should commence within 03 weeks. List the matter on 09 November 2016. In case respondents win the case the entire amount to be refunded with interest. Respondents to co-operate.
Direct Tax Dispute Resolution Scheme, 2016
CIT(Appeals) will hereafter send the following flyer without signature along with the notice for hearing.
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The Direct Tax Dispute Resolution Scheme, 2016, The (Scheme) was introduced with effect from 01.06.2016. The primary aim is to reduce tax payer grievance and uncertainly caused due to long pending litigation before the Commissioner Income Tax (Appeals). Whereas, litigation before CIT (A) is disputed chronologically and is dependent on tax effect, the Scheme provides an outer limit of 120 days for resolution of the pending matters. Practically, this period would be much shorter.
2. The Scheme provides for further relief in the following ways:
(i) Tax payable would include tax & interest till the date of assessment. Interest accrued thereafter would not form part of tax payable.
(ii) If and disputed tax is below Rs. 10 lakhs. penalty would stand waived on payment of tax & interest.
(iii) Where the disputed tax is more than Rs. 10 lakhs, penalty of 75% would stand waived on payment of tax, interest and 25% of penalty levied/leviable.
(iv) In the case of a penalty appeal, the same can be resolved on payment of 25% provided the tax and all interest due have been paid.
(v) Immunity from prosecution on the disputed tax would be available.
3. The Scheme, thus, provides a time bound process to resolve pending litigation without any uncertainty of the amount payable, which has been kept at that minimum. You may like to approach your Pr. Commissioner of Income Tax/Commissioner of Income Tax and Commissioner of Income Tax (Appeal) to discuss the benefits of the scheme as applicable in your case.
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CBDT Letter F.No. 279/Misc/M-61/2016., Dated: September 26, 2016
Will online registration eliminate corruption? - Service Tax Inspector sentenced to seven years imprisonment
THE Special CBI Court, Dehradun on Saturday sentenced a young Inspector of Service Tax to seven years rigorous imprisonment. The charge against him was that:
He while posted and functioning as Inspector Service Tax, Service Tax Division, Roorkee (Haridwar) Uttarakhand on 30.04.15 demanded an illegal gratification of Rs. 3500/- from Shri xxx New Adarsh Nagar, Roorkee District Haridwar for registration of firm xxxx Labour Contractor and he asked the complainant on 5.5.15 to come to his office at Roorkee on 06.05.15 where he demanded Rs. 3,500/- as bribe by writing on a sheet of white paper for verification of the documents relating to the above firm and he was caught red handed on 06.05.15 by CBI team in presence of two independent witnesses for demanding and accepting the bribe of Rs. 3500/- as illegal gratification other than legal remuneration as motive for doing an official act as mentioned above and he thus committed an offence punishable u/s 7 of Prevention of Corruption Act, 1988.
It was pleaded on his behalf that he was young and so the least possible punishment be given, but the Court was not impressed. The Judge quoted a Supreme Court judgement, "The court will be failing in its duty if appropriate punishment is not awarded for a crime which has been committed not only against the individual victim but also against the society to which the criminal and the victim belong. The punishment to be awarded for a crime must not be irrelevant but it should conform to and be consistent with the atrocity and brutality with which the crime has been perpetrated, the enormity of the crime warranting public abhorrence and it should "respond to the society's cry for justice against the criminal"
In the judgement written in Hindi, the Judge observed,
And he sent the Inspector to a jail term of seven years with a fine of Rs.20,000. It is very difficult to become an Inspector but see how easy it is to blow it up. He would get a salary of about 50,000 rupees, but for a sum of Rs.3,500, he will lose his job and spend the next twenty years pursuing this case.
Online transactions were expected to bring down corruption, but registration online and bribery offline appear to be the norm.
Registration of nearly a crore of assessees under GST is to open soon. Big Business?
When a new source of taxation is found it never means, in practice, that an old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had only one before.
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Until Tomorrow with more DDT
Have a nice day.
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