News Update

Former IPS officer Sanjiv Bhatt jailed for 20 yrs for planing drugs to frame lawyerCentre receives Rs 18.5 lakh crore tax revenue upto Feb monthUN says Households waste across world is now at least one billion meals a dayExpert Committee on developing GIFT IFSC as 'Global Finance and Accounting Hub' submits report to IFSCAIndia, China hold fresh dialogue for complete disengagement on Western borders: MEADefence Production issues notification for re-organisation of DGQAThakur says India is prepared for 2036 OlympicsCBDT substitutes Form in ITR-5EV Revolution: Lessons for India to learn from US and China!London court green-signals auction of luxury apartment of fugitive Nirav ModiGovt consults RBI; finalises borrowing plan for first half of FY 2024-25Gadkari says Farmers’ protest is politically-motivatedVP calls upon women entrepreneurs to be 'Vocal for Local'America offers USD 10 mn bounty for information on ‘Blackcat’ hackers after UnitedHealth gets hitI-T- The order of the ITSC can only be reopened in cases of fraud or misrepresentation: HC8 persons including Hezbollah militants killed in Israeli strike on LebanonMacron pillories EU-South Africa trade deal; calls it ‘really bad’ in BrazilThailand’s Lower House okays Bill to legitimise same-sex marriageYellen warns China against clean energy dumpingMilky Way’s central black hole - Twisted magnetic field observedCus - Assessee has not proved beyond reasonable doubt that goods in question imported under air way bills/bills of entry were in fact filed by him and hence the only natural corollary available to Revenue is confiscation of same: CESTATSmall investors help Trump Media’s valuation skyrocket to USD 13 billionJustice Ritu Raj Awasthi joins as Judicial member of Lokpal
 
GST - Too Much of Laws Chasing Too Little Revenue

OCTOBER 02, 2019

By Vijay Kumar

SEPTEMBER was certainly not a month of celebration for the Government as the inflows into the Government kitty recorded its lowest ever levels. While Revenue is falling with boring regularity, our law manufacturing establishment is ever busy churning out rules, notifications, circulars, orders and clarifications, all with the lofty intention of making life a little less miserable for the taxpayers, but all unintentionally ending up in unimaginable complex maze of confusion. It is really difficult to dish out all those complicated laws, but the bright babus, with exceptional brilliance, are never tired of producing mountains of legal fiction. With so many notifications, clarifications and Press Notes, people have lost track of what is happening where. In this maze, I am, like Alice in Wonderland, looking for some more laws which are yet to come into force.

The huge burden of Interest : By section 100 of the Finance (No. 2) Act, 2019, a new proviso was inserted in sub-section (1) of section 50 of the Central Goods and Services Tax Act, 2017 as:

"Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger."

This was supposed to provide a great relief against a comic mistake that had crept into the GST Act, where a taxpayer had to pay interest on the credit amount also if he delayed payment of cash. Everyone knew that it was ridiculous, but it remained a statutory blunder for two years, which was corrected by the Finance Act, 2019. There is a still small thorn. This is to be effective from a date to be notified by the Government [Section 1(2)(b) of the Finance (No.2) Act, 2019 refers] and even after two months of the Finance Bill having been enacted, there is no notification coming from the Government. Why? Perhaps the Central Government is waiting for State Governments to pass identical legislation in their Assemblies and the State Governments appear to be in no hurry to pass the amendments. So, what is the position of Law now? Status quo ante . Even this is a widely misinterpreted concept.

Post Sale Discount : In the recently held GST Council meeting it was decided to rescind Circular No. 105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount. Now, this was a monstrous Circular which caused havoc. It contained a clarification that if the additional discount given by the supplier of goods to the dealer is the post-sale incentive requiring the dealer to do some act like undertaking special sales drive, advertisement campaign, exhibition etc., then such transaction would be a separate transaction and the additional discount will be the consideration for undertaking such activity and therefore would be in relation to supply of service by dealer to the supplier of goods. The dealer, being supplier of services, would be required to charge applicable GST on the value of such additional discount and the supplier of goods, being recipient of services, will be eligible to claim input tax credit (hereinafter referred to as the "ITC") of the GST so charged by the dealer.

The Government and GST Council mercifully realised that this clarification was wrong and magnanimously agreed to press the undo button, but in their anxiety, they pressed the delete button. Now the whole circular is to be rescinded ab initio. The Circular had some other important clarifications, which are also now to be rescinded. Remember the story of the baby being thrown away along with the bath water?

But this rescinding of the Circular has not happened yet. What is the problem. Can't they just issue a one line circular that the previous circular is rescinded?

Time to appeal to the Non-existing Tribunal : The GST Council had decided to extend the last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are not yet functional. Now that the Tribunal has been held to be unconstitutional, it is not likely to become functional in the near future. Where do harried taxpayers go to, when they are aggrieved (which will be 99 percent of the cases) with the orders of the Appellate Authorities? Well, the High Courts are open as of now, though the GST stream is likely to cause a damaging flood of litigation.

Din In CBDT, why not in CBIC?

In a recent Circular, the CBDT noted,

With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax administration. Presently, almost all notices and orders are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as "communication") were found to have been issued manually, without maintaining a proper audit trail of such communication .

In order to prevent such instances and to maintain proper audit trail of all communication, the Board has decided that no communication shall be issued by any incometax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of' such communication.

And they have started this DIN yesterday. Why can't we have a similar system for GST? Here, we have even junior officers sending all kinds of unofficial letters and emails to the taxpayers.

Gandhian Style Taxation (GST)

Until next week


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: many laws some revenue

bilkul sahi kaha sir ki jitna kanoon pechida banaoge utna kathin tax wasulna ho jayega. phool men se khushboo ki tarah lijiye tax na ki pattiyan hi tod lojiye.

aap murgi ko maar rahe ho golden eggs ek baar men hi nikaalne ke liye.yahi galti.

sept men revenue collection kam hokar 90000 cr par aa gaya. jabki refunds abhi thil se issue ho nahi paa rahe.

sabka vishwas scheme fail rahi ab tak apni hi kamjoriyon aur portal baba ki meharbani se.

ye govt kyon nahi dekh paa rahi ki wo jo bhi ghoshna karti hai uske liye janta to khair thik hai portal hi ready nahi rehta.saara bin taiyaree ka jhamela 01.07.17 se hi chala aa raha hai.


interest net par hi lage ismen kiska interest. aap khud hi dekh lijiye.enactment ke 2 months baad bhi kitni buri halat hai 5 trillion dollar wali economy ki.


post sale discount circular ...ye toh hona hi tha. bath water ke sath child bhi gaya ye dukh hai,lekin section 15 apne aap men clear hai.

appeal to gst tribunal aur wo bhi revenue bar association wale case men madras hc ke decision ke baad.hahahaha.


cbdt men udin generate hone laga day to day administration men ye isliye ho paya kyonki it wale settled law ke hisaab se chaltey hain indirect tax law abhi bhi 50 saal ka bachha hi hai.har kaam indirect karne aur credit direct lene ki aadat hai.inko.

jai ho. bharat!




Posted by Navin Khandelwal
 

AR not Afar by SK Rahman

TIOL Tube Latest

Shri Shailendra Kumar, Trustee, TIOL Trust, giving welcome speech at TIOL Awards 2023




Shri M C Joshi, Former Chairman, CBDT




Address by Shri Buggana Rajendranath, Hon'ble Finance Minister of Andhra Pradesh at TIOL Awards 2023