TIOL-DDT 2968
10 11 2016
Thursday

THE Revenue Secretary is concerned:

The pendency of cases with Commissioner (Appeals) was reviewed wherein it was observed that the success rate of revenue at the stage of Commissioner (Appeals) is very low. One of the major reasons for this low success rate appears to be the blatantly pro-revenue orders passed by the Commissioner (Appeals). Revenue Secretary has expressed his concern as such a situation leads to unnecessary and frivolous litigation before higher fora.

The CBEC instructs:

1. All Commissioner (Appeals) who are performing the role of quasi-judicial authorities need to be sensitive in discharging their duties and expected to pass judicious and quality orders which can stand scrutiny of law before the higher fora.

2. They should not pass orders in a routine manner especially when legal points involved in a case are well settled and there is a strong possibility of order passed by them getting reversed/rejected by the higher forum.

3. They need to desist from passing frivolous orders and must keep in mind that their role is not only to decide the cases pending before them expeditiously but also to ensure that the orders passed are judicious based on sound principles of law, which can stand scrutiny of the Tribunal/Courts.

The Board adds, "This would also be in tune with Govt.'s intentions reflected in the National Litigation Policy, which envisages curb on unwanted litigation."

But is this applicable only to appellate commissioners and not other adjudicating authorities?

In spite of Board's repeated instructions, the quality of adjudication in the field is ridiculously low. As even the Board notes, blatant bias in favour of Revenue has made the whole adjudication process a farce leaving assessees with absolutely no confidence that he would get justice in the hands of these officers. The Tribunal has become the first stage of hope for any reasonable adjudication and the departmental channels are treated only as unavoidable to get to the tribunal. Recently DDT came across an order passed by a ld Commissioner (Appeals), who mistook the period of dispute as 2010-13 instead of 2012-13 (normal period) and he expressed surprise as to why the lower authority let off the assessee with Rule 25 penalty instead of penalty under Sec 11AC and proceeded to record the usual suppression findings against the assessee. The assessee suppressed facts because the Commissioner (Appeals) imagined the demand to be under extended period!

CBEC Instruction in F.No.275/32/2016-CX.8A., Dated: November 01, 2016

Service Tax - 'online information and database access or retrieval services'

GOVERNMENT has made several changes with regard to the Service Tax on "online information and database access or retrieval services":

1. Place of Provision of Services Rules, 2012: Notification No. 46/2016-ST., Dated: November 09 2016

a. amends the definition of provision of 'online information and database access or retrieval services' with effect from 01.12.1016. "online information and database access or retrieval services" has the same meaning as assigned to it in clause (ccd) of sub-rule 1 of rule 2 of the Service Tax Rules, 1994

b. Amends rule 3 proviso which read as Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service and which will now read as, "Provided that in case of services other than online information and database access or retrieval services, where the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service."

c. As per Rule 9, the place of provision of following services shall be the location of the service provider:-

(a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b) Online Information And Database Access Or Retrieval Services;

(c) Intermediary services;

(d) Service consisting of hiring of means of transport, upto a period of one month.

(b) above is now deleted.

2. Notification No. 25/2012-Service Tax, dated the 20th June, 2012 - the Mega Exemption - Withdraws exemption from service tax for services provided by a person in non-taxable territory to Government, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.: Notification No. 47/2016-ST., Dated: November 09 2016

a. A proviso is added to entry 34 to stipulate that the exemption shall not apply to online information and database access or retrieval services received by persons specified in clause (a); Clause (a) exempts Services received from a provider of service located in a non- taxable territory by Government, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession

b. A new definition (xab) is added - "online information and database access or retrieval services" has the same meaning as assigned to it in clause (ccd) of sub-rule 1 of rule 2 of the Service Tax Rules, 1994

3. Service Tax Rules Amended - so as to prescribe that the person located in non-taxable territory providing online information and database access or retrieval services to 'non-assesse online recipient', as defined therein, is liable to pay service tax and the procedure for payment of service tax.: Notification No. 48/2016-ST., Dated: November 09 2016

a. A new definition 2(1)(ccba) added - "non-assesse online recipient" means Government, a local authority, a governmental authority or an individual receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory

b. A new definition 2(1)(ccd) added - "online information and database access or retrieval services" means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology and includes electronic services such as,---------

c. As per 2(1)(d)(i)(G), in relation to any taxable service provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory, the recipient of such service is the person liable for paying service tax; This is now amended to read as in relation to any taxable service "other than online information and database access or retrieval services," provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory

d. A new item is added as 2(1)(d)(i)(H) regarding the person liable for paying service tax - in relation to services provided or agreed to be provided by way of online information and database access or retrieval services, by any person located in a non-taxable territory and received by any person in the taxable territory other than non- assesse online recipient, recipient of such service

e. New Provisos are added to Rule 2(i)(d)(ii) to prescribe that in case of online information and database access or retrieval services provided or agreed to be provided by any person located in a non-taxable territory and received by non-assesse online recipient, provider of service located in a non-taxable territory shall be the person liable for paying service tax, and other details.

4. Notification No. 30/2012-Service Tax, dated the 20th June, 2012 - liability of the Service recipient - amended - so as to put compliance liability of service tax payment and procedure on to the service provider located in the non-taxable territory with respect to online information and database access or retrieval services provided in the taxable territory to 'non- assesse online recipient'.: Notification No. 49/2016-ST., Dated: November 09 2016

Consequential amendments are made in this notification also.

In all these notifications, the Central Government wants us to believe that the correct spelling of "assessee" is "assesse". Assesse is a Belgian town.

Anti dumping Duty on DASDA

GOVERNMENT has continued anti dumping duty on 4, 4 Diamino Stilbene 2, 2 Disulphonic Acid (DASDA) imported from PR China at modified rates. This notification shall remain in force upto and inclusive of the 22nd January, 2019.

Notification No. 52/2016-Customs (ADD), Dated: November 09, 2016

Exchange of Old Currency Notes - Beware Big Brother is Watching

THE Revenue Secretary tweets:

1. We would be getting reports of all cash deposited during 10th Nov to 30th Dec. 2016 above threshold of Rs.2.5 lac in each A/C.

2. Income Tax department would do matching of this with income returns filled by the depositors. And suitable action may follow.

3. If cash amount of above Rs10 lac is deposited in a bank A/C, not matching with declared income, same will be treated as tax evasion

4. In such case, tax amount plus a penalty of 200% of the tax payable would be levied as per Section 270(A) of the income tax Act

5. A person buying jewellery has to give his PAN number; Instructions being issued to field authorities to check it with all jewellers

6. Action to be taken against those jewellers who fail to take PAN numbers from buyers to ensure this requirement is not compromised

7. Cash deposits of jewellers would be scrutinized against the sales made to check whether they have taken PAN nos of buyers or not

Hope you smile your way to the Bank today.

Until Tomorrow with more DDT

Have a nice day.

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