News Update

No private webinars for public servants

JANUARY 20, 2021

By Vijay Kumar

IN conferences/seminars/webinars organised by Trade/Professional Associations, media etc, the departmental officers from Chairman to Commissioners are treated as star speakers, mostly because of the powers vested on them. And for any organiser, a photo with the government VIP is a big bonus. These officers who attend such seminars are respected more for their positions than their ability for value addition. In fact, many of the officers who attend these meetings do not clarify anything and would rather be happy to restate the government's views. Some of them even start with a disclaimer that the views expressed by them are purely personal and not necessarily that of the government. I really don't understand why any organisation would invite a Commissioner to hear his personal opinion, which cannot be used anywhere. So, technically these officers can and do leave after the opening ceremony.

Anyway, all this is going to be past tense. The Government has decided that its officers will not address the private seminars.

As per the directions of the Department of Revenue, the CBIC has instructed in F .No. C-50/04/2021-Ad.II, dated 12th January, 2020 (this should actually be read as 2021, but these things happen when the year changes and they need some time to get used to the new year) that:

No officer may be allowed to attend conferences/seminars/webinars organized by non-government entities as resource person without the prior permission of the Secretary, Department of Revenue, Ministry of Finance, unless it is organized by Government agencies.

Please read only the highlighted text - what you get is - No officer may be allowed to attend conferences/seminars/webinars organized by non-government entities, unless it is organized by Government agencies. This is the best possible contradiction in one sentence. No officer will be allowed to attend a seminar organised by a non-government entity, unless it is organised by a government agency? How is this possible?

This was not exactly what the Revenue Department stated in its letter No. 0 -21030/21/2020-Coord, dated 30th December 2020 which was:

it is necessary that officers working in organisations under the Department of Revenue, Ministry of Finance shall attend, as resource person, any conference, seminar, webinar etc., only with prior permission of the Secretary, Department of Revenue, Ministry of Finance unless it is organised by Government agencies.

The Revenue Department has further stated as:

requests/intimations are being received from time to time in various offices under Department of Revenue for attending conferences/seminars/webinars organized by non-government entities as resource persons which are being accepted at the local levels.

It has been noticed that, while this participation may be beneficial in sharing Government policies with a larger audience, at times the profile of event, event organisers or the attendees do not befit participation from the Government officers as resource persons. In certain situations, it has also been noticed that officers have attended certain events as resource persons for topics with which they are either directly not connected/involved or are not authorised to speak and share any details.

Therefore, it is necessary that officers working in organisations under the Department of Revenue, Ministry of Finance shall attend, as resource person, any conference, seminar, webinar etc., only with prior permission of the Secretary, Department of Revenue, Ministry of Finance unless it is organised by Government agencies.

So, there is some communication confusion between what the Revenue Department wanted and what the Board communicated. Now, you will understand why there is so much confusion in GST.

But what is the Government's problem if the officers address private seminars? After all, they are evangelists spreading the good word about government. No officer attending a seminar would speak against the government. In fact, we find that even retired government officers attending such seminars are vociferous supporters of the policies and instructions of the GST department, which might have caused immense difficulties for the stakeholders.

CBIC Circulars not applicable in States - at least in Maharashtra

The Maharashtra Government in Trade Circular (GST) No.39 T of 2019, dated 05.07.2019 declared.

the Commissioner of State Tax, Maharashtra State, for the purpose of uniformity in the implementation of the GST Act and also to have the uniformity in the instructions or direction as given by the CBIC, hereby decides to adopt the Circulars issued by the CBIC for the purpose of implementation of Maharashtra Goods and Services Tax Act, 2017, therefore, save as otherwise specifically provided in the Circulars issued by the Commissioner of State Tax, Maharashtra State, the Circulars issued by CBIC shall be deemed to have been issued by the Commissioner of State Tax, Maharashtra State. The directions or instructions contained in CBIC Circular shall be applicable to the MGSTD unless the Circular(s) on the similar issue are also issued by the Commissioner of State Tax, Maharashtra State.

But very recently, by Trade Circular No. 01T of 2021, dated 12.01.2021, the Commissioner withdrew the above circular stating,

A re-examination of the circular 39T of 2019 led to the consensus for the need to have a single source of information. In order to maintain the integrity of communication and so also to avoid confusion caused as to which circular instructions are to be followed in case where there are circulars issued by CBIC as well as circulars issued by the MGSTD, it is decided to withdraw Trade circular 39T of 2019 w.e.f. the date of issuance of this circular. Henceforth, whenever CBIC issues any circular, MGSTD, on its examination, would issue a separate circular regarding its applicability for the implementation of the MGST Act.

Thus, the CBIC circulars will not be applicable for the State GST in Maharashtra, until the State GST authorities issue their own circulars. The doubt is, when the CBIC issues the circulars based on decisions taken by the GST Council, in which all the States are members, why should the States have separate circulars? Will this not create further confusion?

The Confederation of All India Traders (CAIT) was quick to protest. In a letter to the Prime Minister, CAIT submitted,

We are of the considered opinion that this step of Maharashtra Government is a serious issue which is much against the basic fundamentals set out and agreed between Centre & States prior to implementation of GST.

If States behave like this then each State will adopt separate policies for GST implementation in their States and the traders will have to be updated for all the states every moment which is an uphill task and will make already complicated GST tax system further much more complicated resulting into either untimely compliance or no compliance. It is noteworthy to mention that large number of traders across the Country are engaged in inter-state business and such practice if adopted by every state then this will cause grave harm and damage to the businessmen who are already struggling for their survival. Further, it will not be trade friendly and the same would be totally against, the purpose for making GST as One Nation- One Tax.

We would like to mention that if this practices is allowed to be continued, it will entitle other States to differ from issues related between Centre & States and between one State with another. We suggest that system of issuing circular from CBIC should remain same and should be binding on all states. Instead, CBIC may send the draft to states before finalising and issuing any circular and ask for their comments mentioning a time span. If no comments are given by the states within a week's time it will be deemed to be accepted by them. This will be a better way of taking consensus of all states and will maintain the spirit of the federal GST. If any urgent Circular is to be issued the delay of which would affect revenue then such issues may be clearly defined and consensus of the same may be taken from all states.

It seems CAIT is planning to agitate as it feels,

Post-Covid, the retail trade is fighting hard for its survival and in such a situation, the GST system has become a devil for the business community due to several arbitrary amendments. In place of 'Good and Simple Tax', it has become an obnoxious and complicated taxation system.

GSTN Message Missile

A retired IRS Officer, who is a practicing lawyer got a message from GSTN:

The retired IRS officer turned lawyer wrote to me,

I am not at all registered with GST, yet I keep receiving this SMS. It could be a minor mistake or a fraud by using my mobile number. Whatever it is, it is clear that GSTIN does not verify even the authenticity of mobile number by sending an OTP.

I feel sad

I wanted to share my anguish with you.

Apparently, such messages are going without any let or hindrance. What is this dear 35BBFGN6668D2AJ? (I have changed the numbers and letters). Is this how you address your taxpayer?

Obviously, this message had been sent due to some mistake, but GSTN had a PAN and a related phone number to which they sent a wrong message. What happens when such unguided missiles land on your phone? If it is received by a small trader or an illiterate person, he would be scared as hell and do a little running around and may reach a consultant, who can scare him further and exploit him fiscally, causing physical, fiscal and mental torture, before he could figure out that somebody in the GSTN made a mistake. They are entitled to make mistakes, but should an innocent citizen bear the brunt of their careless mistakes? Can't they be a little more careful and ensure that messages don't go to people who have nothing to do with GST?

Even a retired IRS officer was anguished (not angry) with the message. I am amused. Jest GST

Until next week

Sub: Burden of Proof no more on the Revenue

It is common to see even SCNs issued alleging that the noticee is carrying o "certain activity" which amounts to "service" under Sec 65B(44) of the FA 1994, and hence the noticee is liable to pay service tax. For good measure, such SCN allege fraud, collusion, willful misstatement etc with intent to evade payment of tax. The Authority signing the SCN does not consider it necessary to find out what is the nature of activity carried on, whether it is taxable, but exempt etc. It is left to the noticee to explain what kind of business he is carrying on and why he is not liable to pay service tax. The principle of law that the initial burden of proof to show that an activity is taxable is on the Revenue has been neatly circumvented.

Posted by Gururaj B N