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Cus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaGST - Conclusion that taxable person is providing a service to supplier while taking the benefit of a discount by facilitating an increase in the volume of sales of such supplier is ex facie erroneous and contrary to the fundamental tenets of GST law: HCIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesI-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HCRailways earns Rs 14798 Crore from Freight loading in June monthI-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITATMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorI-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITATGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT
 
IRS enFORCE

APRIL 29, 2020

By Vijay Kumar

THE CBDT tweeted -

- There is some report circulating on social media regarding suggestions by a few IRS officers on tackling Covid-19 situation.

- It is unequivocally stated that CBDT never asked IRS Association or these officers to prepare such a report.

- No permission was sought by the officers before going public with their personal views & suggestions, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter.

- It is reiterated that the impugned report does not reflect the official views of CBDT/MInistry of Finance in any manner.

The provocation was the 43 page report called FORCE (Fiscal Options & Response to COVID-19 Epidemic) - submitted by a group of young IRS (Income Tax) officers, through their association to the CBDT. Some 44 officers of the Income Tax Department made an intensive study and made some suggestions to the government on how to deal with Corona by the tax department. The officers belong to batches from 2015 to 2019 and are endowed with high academic and professional qualifications like MA, MBA, CA, CS, B.E etc., and there is even a doctor among them.

The report was submitted to the Board with the politest possible covering letter which stated,

As officers of a Central Civil Services, this is a sincere and humble attempt by us to contribute to the policy initiatives of Government of India in this grave crisis. The short term and medium-term measures discussed in this document represent some ideas which can be further deliberated upon by our policy makers, fiscal policy experts, economists, business leaders, finance and tax professionals, media and all other stakeholders in order to provide relief and fiscal impetus in these testing times .

Some of the wise submissions of this group of overenthusiastic young revenue officers are:

- Government needs to spend considerably more to revive the economy; and it needs to raise additional revenue, but in ways that must not burden the already distressed common man.

- Taxing the wealthy: In times like these, the so called "super rich" have a higher obligation towards ensuring the larger public good. This is for multiple reasons - they enjoy a higher capacity to pay with significantly higher levels of disposable incomes compared with the rest, they have a higher stake in ensuring the economy springs back into action, and their current levels of wealth itself is a product of the social contract between the state and its citizens. Most high-income earners still have the luxury of working from home, and the wealthy can fall back upon their wealth to cope with the temporary shock. Therefore, this segment of the population can be taxed through two alternative means, both of which can be imposed for a limited, fixed period of time:

- raising highest slab rate to 40% for total income levels above a min. threshold of Rs. 1 cr or re-introduction of the wealth tax for those with net wealth of Rs. 5 crores or more

- Increase the surcharge applicable to the Higher income Foreign Companies having a Branch Office/ Permanent Establishment in India.

- COVID Relief Cess: an additional one-time cess of 4% on account of COVID Relief (could be called COVID Relief Cess) could help finance capital investment in COVID Relief work. The extra revenue mobilized on this account could be between Rs. 15000 - 18000 crores. To mitigate the extra hardship on the middle class, the cess may be made applicable only in cases where the taxable income is greater than Rs. 10 lakhs.

- New Tax Saving Scheme like COVID savings Certificates (like NSC) to mobilize more funds.

- New Amnesty scheme for collection of Undisputed demand.

- Incentivizing compliance as against penalizing non-compliance.

- Reintroduction of the ‘Inheritance Tax'.

- Give it up campaign : Just like it was done in the case of LPG subsidy where many well off people voluntarily surrendered their LPG subsidy benefits, the tax department can encourage the super-rich and those willing, to give up at least one tax subsidy/tax deduction/ tax concession for only a year- for e.g. an individual could voluntarily opt for giving up his/her 80C deduction for a year.

- Tax payment facilitation : In this crisis time, we should focus more on facilitating the taxpayers, so as to make compliance easy and hassle free.

The ideas maybe stupid, useless or outright deplorable, but they were the ideas of some bright boys who took the trouble of studying such complicated issues.

What is the government's reaction? If you don't like their suggestions, do tell them to go and fly a kite. But should you be so cruel as to initiate disciplinary action? Are you against any opinion? Is suggesting some measures to the government a crime? Are government servants, as a class, barred from making suggestions to their own government? It seems the government has already initiated action against the IRS Association leader. These officers who have put in their time and efforts to prepare this document could have spent that time in more abhorrible activities, which could have caused damage to the department as well as the country.

Kosha Muloh Dandah: In the logo of the Income Tax Department, you will find these words - which the FORCE document also mentioned. Does it mean that force (punishment) is the foundation of revenue?

Addressing the IRS probationers in 2013, the then President Pranab Mukherjee said, "Kautilya's words Kosh Moolo Dandah i.e. "revenue is the backbone of administration" continues to be as relevant today as it was thousands of years ago."

No place for any intendment in taxing statutes.: In a judgement delivered day before yesterday, the Supreme Court observed, - 2020-TIOL-89-SC-CT

- In the event, the authorities felt any assessee or dealer was taking unintended benefit, then the proper course would be legislative amendment.

- The Tax Administration Authorities cannot give their own interpretation to legislative provisions on the basis of their own perception of trade practise.

- This administrative exercise, in effect, would result in supplying words to legislative provisions, as if to cure omissions of the legislature.

Many tax officers feel (also reluctantly accepted by trade and consultants) that the tax administration can fill in the gaps in the law as they please. I have seen even lawyers arguing that where the law does not provide for a solution, practical solutions (means as determined by the authorities) have to be adopted. In any case, the tax laws are bureaucracy made laws and if they make mistakes, they should know that the solution is a legislative amendment and not an executive clarification (often confusing and wrong).

Corona cannot wither, nor custom stale its infinite variety: The officers of the CBIC were active in doing their exemplary job even during this pandemic. The Chairman's weekly letter dated 27.04.2020 mentions:

The DGGI Delhi Zonal unit has booked an important case involving non-payment of IGST on free-of-cost import of software by a major software company whose sister company is based abroad and recovered the entire duty amount of Rs 22.68 crore for the period July, 2017 to March, 2020. DRI Lucknow Zonal Unit too has interdicted goods of a syndicate indulging in the import of grossly overvalued 'Fragrance Oil/ Perfumery Compound', storing them in duty-free warehouses or SEZs without payment of duty, and exporting them directly or through front/dummy companies. Investigations have revealed a foreign exchange component of almost Rs 5500 Crore so far in this carousel fraud. The extent of overvaluation is more than 100 times the normal value. Goods having a declared value of more than Rs.150 crore relating to the firms involved have been seized/detained. Further investigation is in progress.

Chennai Air Customs during its close vigil at the foreign post office narrowed down on a parcel which had arrived from USA destined to East Godavari district. 1.7 kg Cannabis of foreign origin valued at Rs. 9 lakhs was found concealed in sleeping bags in the carton box and was seized under the NDPS Act, 1985.

The higher the tax, the less business can invest.

The less business can invest, the less wealth created.

The less wealth created, the less wealth to tax.

The less wealth to tax, the less tax revenue.

The less tax revenue, the higher the tax.

- A tweet from Alice Smith - the great-great-great-granddaughter of Adam Smith

Until next week


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