Budget 2024 Updates

FM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud casesCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
Wrong Road

JULY 03, 2024

By Vijay Kumar

GST is seven years old but this column is not about the route map of GST, which is any way very perplexing. I am on the road for goods covered under GST.

In 1215 AD, the Magna Carta articulated travel rights for personal liberties and unfettered commerce in assuring merchants are safe and secure in travelling in England.

The Laws of England identified freedom of movement as a natural liberty inherent by birth.

In 1770, Thomas Jefferson argued that freedom of movement is a personal liberty by birth. "Under the law of nature, all men are born free, everyone comes into the world with a right to his own person, which includes the liberty of moving and using it at his own will. This is what is called a personal liberty."

In 1871, Charles Darwin offered an explanation in his book 'The Descent of Man': "…Hominids needed to walk on two legs to free up their hands… "

Right to movement whether by foot, cart, boat, aircraft or on a horseback, is constitutionally guaranteed to the citizens as a Fundamental Right under Article 19(1)(d) and ordinarily that avails to the merchants too when they carry goods for trade. Production of goods but not distributing them would not serve interest of the community, is the underlying principle of Article 301 of the Constitution:

301. Freedom of trade, commerce and intercourse: Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.

Even this freedom implies right to movement. Of course, the said guarantee is not absolute; law can regulate it and restrict too. Scope of right to movement is not the same always; it is variable depending upon the circumstances and conditions. For example, right to move becomes restrictive when a person moves with a firearm or when he uses vehicle for movement. It is because, the firearm and the vehicle are regulated by law in certain aspects and that affects the scope of right to movement otherwise vastly availing to citizens. That is how Article 19(5) i.e., restriction by law is conceived. Thus, a trader cannot claim unfettered right of movement whilst carrying goods that are regulated by law. However, in the absence of such law being shown, fetter cannot be imposed.

You wonder where I am driving to? Most of the above words are extracted from a judgement of the Karnataka High Court last week. - 2024-TIOL-1115-HC-KAR-GST

Picture this: a truck driver, a vigilant GST officer, and a wrong turn under the cloak of night. It's a recipe for a comedy of errors, with documents pointing in all directions like a confusing treasure map. As the GST officer pounces on the wayward truck, accusing it of being on a joyride of tax evasion, you can almost hear the truck driver's dramatic gasp in the dark.

A truck driver lost his way in the darkness of the night and drove in a direction that was not leading to his declared destination. The eagle eyes of a sharp GST officer befell on the errant truck that was on its wrong route. The GST officer was convinced that the goods in the truck were on an evasion trip and he promptly seized the truck along with the goods inside.

The GST officer vide order dated 13.12.2021 observed:

1 As per the documents the delivery places of the goods are different places of Bengaluru, other than Bommasandra Industrial Area. Therefore, it proves beyond doubt that the goods are to be delivered to other than the places mentioned in the documents and is in contravention of the provisions of the GST Act, 2017.

2 The conveyance has passed the Electronic City Toll Plaza on 02-12-2021 at 10.37 PM, which also proves that the goods conveyance was not moving toward the destination points as mentioned in the documents.

3 So, movement of goods and the conveyance are to be considered as moving without proper documents or with defective documents as prescribed under the provisions of the GST Act and Rules, 2017.

4 Both non-production of the required documents for the goods in transit or production of defective documents for verification at the time of check, leads to a clear contravention of the provisions of the GST Act and Rules, which attracts the levy of tax and penalty as provided under the provisions of sub-section (1) of Section 129 of the GST Act, 2017.

The GST officer passed an order confirming the tax liability of Rs. 3,25,423/- coupled with a penalty of Rs. 21,41,239/-. The assessee appealed at the departmental level without any success - as usual. Against the appellate order, they filed a writ petition before the Karnataka High Court. A single judge of the High Court observed:

Admittedly, the driver of the vehicle was carrying required E-way bills and tax invoices to deliver goods. The driver instead of taking a right turn at Hebbal junction and move towards Peenya Industrial area, has taken a left turn and has moved towards Bommasandra Industrial area. The incident has happened at late night. There may be chances of diversion that might have taken place due to human error and it cannot be definitely concluded that diversion was deliberate more so when the driver of the vehicle has filed an affidavit explaining the reasons and the intended purchasers have also confirmed that they were supposed to receive the said goods.

He set aside the impugned order and directed to release the vehicle and the goods detained.

The highly aggrieved State took the matter in appeal to a Division Bench of the High Court, which observed:

This case involves also the fundamental right to trade and business guaranteed under Article 19(1)(g) read with Article 301 of the Constitution. It is open to a trader to take goods to the destination point in whichever route he opts, unless the law otherwise requires, destination point being intact. Such a right needs to be recognized as of necessity to trade or business.

The above being not an absolute right, can certainly be regulated by law as provided u/a 19(6).

Despite vehement submission, learned AGA could not locate any rule or ruling that regulates the movement of conveyor of goods while choosing his route. As the law now stands, a merchant or his convoy is free to choose the route for the movement of goods from the point of origin to the point of destination and that he has specified a particular route in the consignment documents, would not come in the way of that route being altered, although destination cannot be. In the absence of law, he cannot be faltered if he chooses a circuitous route in preference to linear one in variance with the impression given to the authorities in the said documents as long as travel time and destination point remain intact. If that be so, the impugned orders of authorities that were structured on a contra premise could not stand the test of law.

The question is whether law mandates conveyance in a particular route and prohibits alteration of travel route.

We have not been shown any such law, rule or ruling.

What is required by law is the furnishing of consignment documents and specified particulars of consignor, consignee, goods, route maps & destinations. Requirement of furnishing particulars of route map, etc., is one thing, compulsive adherence to the impressed route is another.

There is law with regard to the former, is true; but latter is non liquet i.e., an area where there is no binding rule. When law does not require giving of reasons for changing the direction or route, whether the reason offered by the driver for opting another route is true or false, pales into insignificance.

And the Karnataka High Court dismissed the State Appeal.

The High Court referred to a decision of the Gujarat High Court in a nearly comparable case in Karnataka Traders Vs State of Gujarat - 2022-TIOL-43-HC-AHM-GST, in which the discrepancy noticed by the GST officer was:

Vehicle was intercepted while it was travelling to the different direction than the direction of destination or way to the destination. So, it is clear that the goods was not moving to the place destined for. Hence it appears that the goods is being transported with intention to evade tax.

The Gujarat High Court held that, merely because the direction was changed, an inference cannot be drawn regarding the intention of the petitioners to evade tax.

If your sleepy driver misses the road while carrying the G in GST (goods), you have to drive straight to the High Court.

So, there I was, diving deep into the age-old tales of rights and liberties, only to find myself on a journey with a truck driver who took a wrong turn in the dark, much to the dismay of a vigilant GST officer with eyes like an eagle on a mission. With documents pointing in different directions like a confused GPS, the officer laid down the law faster than you can say "tax and penalty," leaving the poor driver singing the blues.

Amidst legal jargon and constitutional rights, the High Court pondered: Can a trader choose his own road trip adventure, or must he seek the GST officer's blessing at each junction? In the end, the High Court declared that a missed turn doesn't always mean foul play, much to the relief of drivers everywhere.

Should I take the GST officer's permission to choose the road I want to drive in? In the days of the infamous check-posts, truck drivers used to take a detour to avoid the check posts, more to escape the harassment and delay at check posts than to evade taxes. Now specifically located check posts have gone, not the harassment, because every inch of the road is now a check-post.

GST at seven should be less severe.

Until next week


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