Author: admin_gst

Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 7-9-2011 Last Replied Date:- 30-12-1899 – The scheme of GST should be supported by a strong tax-administration infrastructure for it s optimum success. Without an efficient tax-administration the implementation of goods and services tax will be just like pouring water in the bottomless bowl. So, the structure, design and the business process of tax administration is an important factor in the determination of the revenue performance. To put in the words of Casanegra de Jantscher, tax administration is tax policy. Although various improvements have been recently made in the tax laws and administration over the past few years such as Large Taxpayer Unit (LTU) Scheme and Automation in Central Excise and Service Tax (ACES), the systems at both Central and state level remain complex. The tax systems suffer from substantial compliance gaps, except in the highly organized sectors of the economy. Tax administration is a typical issue

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cation. However, the states may, if necessary, undertake post-registration verification to eliminate any potential abuse. In future, the string corresponding to PAN will be replaced by the Unique Identification Number (UIN) proposed to be issued to all residents. It should be mandatory for all registrant dealers to obtain an e-mail ID and also open an internet banking account with any bank. The form must capture the e-mail ID and the internet bank account number. GST Invoice According to Task Force, VAT Invoices are crucial control document of VAT since it forms the primary source of information. Recommendations relating to VAT invoices are as under: i) The law should require a supplier making a taxable supply to another taxable person to provide a VAT invoice with that supply or the payment for it. The requirement should be enforceable by some penalty. ii) The VAT invoice should be standardized across all states so as to contain a minimum of information. Payment on monthly basis: The

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d as a single taxable entity eligible for CGST input credit across units / branches in that state. Strong, Broad and common IT infrastructure: The Central Government shall establish a common IT infrastructure which will serve the needs of both CGST and SGST. A Taxpayers Information Network (TIN) will be established by the centre keeping in view the information requirement of CBEC and the state tax administration. The TIN will be shared between the centre and the state. The payment of tax and transaction reporting should be made through a combined payment and transaction reporting statement in form no. GST-1. This statement should detail all business to business transactions relating to sale. This statement should be common for both CGST and SGST compliance and it should be mandatory to file this statement electronically on a monthly basis while making payment of taxes. Uniform Laws for SGST: Electronic filing of all other returns, if any, should also be mandatory. Therefore, the return

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 1-9-2011 Last Replied Date:- 30-12-1899 – Transportation & logistics is a much wider term. It covers various service providers and services provided by all modes of transportation (e.g., air, road, rail and sea). It also comprises related services such as warehousing, handling and value added services such as packaging, labeling, assembling etc. Transport service is used both as intermediate input and in final consumption. Also the transport equipments are subject to multiple taxation at both central and state levels. The present taxation regime leads to cascading effect of embedded taxes on the downstream industry (oil industry) which do not get rebated thereby leading to enha

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portation of persons by road transport. ii) Transportation of persons by rail. iii) Transportation of persons by air for domestic journey. iv) Transportation of persons by air in economy class for international journey. v) Transportation of persons by other than cruise ship from port in India. To rationalize the present indirect tax regime for transport services, the 13th Finance commission s Task Force has given some important suggestions: i) The tax on vehicles and the tax on goods and passengers levied by the state governments should be subsumed in the GST. ii) All transport equipments and all forms of services for transportation of goods and services by railways, air, road and sea must form an integral part of the comprehensive GST base

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only and that too restricted to classes other than economy class. Finance Bill, 2010 proposes to fully expand the scope of this service by bringing domestic air travel also in the net. The exclusion of economy class is also being removed and all classes of air travel will be liable to service tax as per the proposed change. As per departmental clarification, modalities of working out the tax amount including exemptions, abatement etc. would be prescribed at the appropriate time. Transport of goods through Railways, which was till now exempted from service tax will have to bear the burden of 10% service tax. It indicates that the government wants to take more and more services in the tax net before implementation of full fledged GST. Conclus

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 12-8-2011 Last Replied Date:- 30-12-1899 – The GST Model proposed in the First Discussion Paper produced by the Empowered committee of state finance ministers on Nov 10, 2009, will be dual in nature. It will consist of two components: CGST (Central GST) and SGST (State GST) simultaneously levied by centre and state, respectively, on all transactions of goods and services, except those exempted by law. Both states and centre would independently administer and levy tax on the supply of all goods and services. Currently in the indirect tax structure, the centre is liable to levy tax on manufacture, rendition of services and import of goods. States are empowered to levy and collect tax

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current list (list III). The relevant entries from all the three lists are as under: Entry no. 83 (Union list): It states about duties of customs including export duties. Entry no. 84 (Union list): It states about duties of excise on tobacco and other goods manufactured or produced in India. Entry no. 92A (Union list): It states about taxes on the sale or purchase of goods other than newspaper, where such sale or purchase takes place in the course of inter-state trade or commerce. Entry no. 92B (Union list): It states about taxes on consignment of goods where such consignment takes place in the course of inter-state trade or commerce. Entry no. 92C (Union list): It states about the empowerment of central government to tax services under the

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le of the constitution would require a special majority of parliament (i.e. 2/3rd majority of the total number of members present and voting, which should not be less than half of the total membership of the house), the ratification of at least half of the state legislatures by special majority and the president assent. Conclusion: A joint working group (JWG) has already been constituted on September 30, 2009 comprising of the officials of the central and state governments to prepare, in a time bound manner a draft legislation for constitutional amendment, draft legislation for CSGT, a suitable model legislation for SGST and rules and procedures for CGST and SGST. The empowered committee of state finance ministers is likely to meet Mr. Pran

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VAT and Sales Tax – Started By: – Milan Bajaj – Dated:- 10-8-2011 Last Replied Date:- 10-8-2011 – Can somebody help me by sending me an overview of GST & DTC for the purpose of preparation of Interviews. My email ID milanbajaj88@gmail.com Thank You. – Reply By pradeep khatri – The Reply = Dear Milan, You may search this information on Big 4 s Websites. I think that E&Y s website will provide you with the relevant information. Regards, Pradeep Khatri – Reply By Milan Bajaj – The Reply =

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 8-8-2011 Last Replied Date:- 30-12-1899 – The prevalent indirect tax structure in India has a number of exemptions. At central level, 330 exemptions are allowed under CENVAT. These exemptions to service providers and manufacturers depend on the fulfillment of various conditions which are specific to each exemption. Around 99 items are presently exempted under VAT. Individual states can expand this list even for the goods of local importance. It is not possible for the provider of exempt services or manufacturers of exempt goods to avail the benefit of input tax credits. This hampers the free flow of credits down the supply chain and increases the cascading effect. Ultimately whole

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ther commercial departments iv) Public sector enterprises v) Banks and Insurance vi) Health and Education services b) Any service transactions between an employer and employee either as a service provider, recipient or vice-versa. c) Any unprocessed food article which is covered under the public distribution system should be exempt regardless of the outlet through which it is sold. d) Education services provided by non-governmental schools and colleges. e) Health services provided by non-governmental agencies. The exemption list proposed by the Task Force leaves a corner for debate as it consists of services which are rendered by the government in the course of the discharge of the sovereign functions of the state. Sovereign functions are m

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nction, service tax is leviable provided there is a sale of the service on the basis of an invoice or a bill or voucher. Even if it is a statutory function and only a fee is charged, it is still conceptually a commercial sale. And the tax is leviable. The Report of Task Force should have said that these functions are not taxable. Department of Revenue (DOR) in its comment on the first discussion paper on GST favoured for a common list of exemptions for CGST and SGST. Efforts will be made by centre to substantially reduce the number of items presently exempted under CENVAT regime. Around 99 items presently exempted under VAT may continue to remain exempted in GST regime. There should be no scope, with individual states, for expansion of this

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 5-8-2011 Last Replied Date:- 30-12-1899 – GST is a destination based consumption tax. Consumption taxes are regressive in nature. It increases the gap between the rich and the poor. The pertinent point is whether such tax would be fruitful for the economy as a whole or not? Is it not so that shift towards the consumption tax would increase inequality? However, there are different ways to combat this inequality. For example, reduced rate of goods and services tax may be applied to certain necessities in order to reduce tax burden on the poor. But it is not an effective way to deal with the problem as the rich typically consume more of the necessities than the poor. Also it is difficult to ensure that none of the poor people lost out. This is the biggest concern that the oppositions use to oppose a tax on consumption. The poverty reduction will continue to remain the central objective of the economic policy making in India. Any

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olicy initiative since expenditure on food constitutes a large proportion of the total consumption expenditure of the poor. In any case, the poor will continue to have accessibility to these items at subsidized prices through the public distribution system. Basic health and education services are expected to be fully exempt in GST regime. Since these services are necessary to meet the basic human needs, the exemption for these services will enable the poor to have cheaper accessibility. In any case, as at present, these services will continue to be exempt from tax and therefore no additional burden will arise on account of the switchover to GST. Housing is yet another important item of basic needs of the poor. The Task Force recommended for the inclusion of transactions in real estate within the purview of GST. Therefore, for a registered real estate builder, all taxes on inputs (including on land) will be offset against the tax payable on the constructed property. This will effectivel

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erefore, the poor will also enjoy an increase in their income. Similarly, on account of increase in economic activity resulting in higher growth, there will be new opportunities for employment which will directly benefit the urban poor. According to the Task Force the benefit to the poor from the implementation of GST will flow from two sources: i) Through increase in the income levels and ii) Through reduction in prices of goods consumed by them. The proposed switchover to the flawless GST should, therefore, be viewed as pro-poor and not regressive. As per Task Force, prices of agricultural commodities and services are expected to rise. Most of the manufactured goods would be available at relatively low prices especially textiles and readymade garments. The prices of agricultural goods would increase between 0.61 and 1.18 percent whereas the overall prices of all manufacturing sector would decline between 1.22 and 2.53 percent. Hence, the terms of trade will move in favour of agricult

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crux Presents PAYROLL / Manufacturer Excise Softwares} Normal 0 false false false MicrosoftInternetExplorer4 GST is a destination based consumption tax. Consumption taxes are regressive in nature. It increases the gap between the rich and the poor. The pertinent point is whether such tax would be fruitful for the economy as a whole or not? Is it not so th

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Allied Laws – GST: IMPACT ON THE POOR – Article – TMI Updates – Highlights

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 3-8-2011 Last Replied Date:- 30-12-1899 – The comments of the Department of Revenue (DOR) on the First Discussion Paper on GST reflect the inclination of Centre on different contradicting issues related to Goods and Services Tax (GST). On some issues the DOR agrees with the recommendations of the Empowered Committee of State Finance ministers (here-in-after referred as EC) while on some varies with it. Comments of DOR on different significant issues and their consequences are as under: GST Model The DOR is agreed with the dual GST model having two components: CGST (Central GST) and SGST (State GST), recommended by the EC with appropriate binding mechanism to harmonise the various i

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and States. Accounts where CGST, SGST and IGST should be paid Ministry s view: CGST should be paid to the accounts of the Centre. SGST should be paid to the accounts of the states. IGST should be paid to the accounts of the Centre. Account-heads for all good and services would have an indication whether it relates to CGST or SGST (with identification of the state to whom the tax is to be credited). Input Tax Credit The Centre is agreed with the states recommendations on input tax credit. It means that the taxes paid against CGST should be allowed to be taken as input tax credit (ITC) for CGST and could be utilized only against the payment of Central GST. The same principle will be applicable for the SGST. A taxpayer or exporter would have t

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be prescribed in the respective legislation for CGST and SGST, to the extent feasible. It is proposed to prescribe a common registration form, common registration number, common return format, common service centers for acceptance of registration applications and return for Central GST and State GST. said Sushil Solanki, Commissioner, Central Excise. Threshold limit The DOR is of the view that there should be a uniform threshold for goods and services for both SGST and CGST. This annual turnover threshold could be ₹ 10 lakh or even more than that. The threshold should not apply to dealers and service providers who undertake inter-state supplies. A problem of dual control may arise and an opposition would come primarily from the trade

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 2-8-2011 Last Replied Date:- 30-12-1899 – This comparison is based on the recommendations of the First Discussion Paper produced by the Empowered committee of states finance ministers (hereafter referred as EC) and the Report of the Task Force on GST constituted by the Thirteenth Finance commission. Before going on discussion we should define GST and the Objective behind it. What is GST? GST is a tax on goods and services with comprehensive and continuous chain of set-off benefits from the Producer s point and Service provider s point upto the retailer level. It is essentially a tax only on value addition at each stage and a supplier at each stage is permitted to set-off through a tax credit mechanism. Under GST structure, all different stages of production and distribution can be interpreted as a mere tax pass through and the tax essentially sticks on final consumption within the taxing jurisdiction. Objective behind GST a) T

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ll goods and services upto final consumption point. Also both are of the view that the GST should be structured on the destination principle. According to Task Force this will result in the shift from production to consumption whereby imports will be liable to both CGST and SGST and exports should be relieved of the burden of goods and services tax by zero rating. Consequently, revenues will accrue to the state in which the consumption takes place or is deemed to take place. The Task Force on GST said the computation of CGST and SGST liability should be based on the Invoice credit method. i.e., allow credit for tax paid on all intermediate goods and services on the basis of invoices issued by the supplier. As a result, all different stages of production and distribution can be interpreted as a mere tax pass-through and the tax will effectively stick on final consumption within the taxing jurisdiction. This will facilitate elimination of the cascading effect at various stages of product

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on negative list and for few exemptions if necessary but didn t provide any list of exemption. However, the Task Force also said that there shouldn t be any exemption from CGST and SGST but if for some reason, it is considered necessary to provide exemption, the centre and states should draw a common exemption which should be restricted to the following: a. All public services of Government (Central, state and municipal/ panchayati raj) including civil-administration, health services and formal education services provided by Govt. schools and colleges, Defence, Para-military, Police, Intelligence and Government Departments. Public services will not include the following: 1) Railways; 2) Post and Telegraph; 3) Other commercial departments; 4) Public sector Enterprises; 5) Banks and Insurance; 6) Health and Education services. b) Any service transactions between an employer and employee either as a service provider, recipient or vice versa. c) Any unprocessed food article which is cover

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By: – abhi parakh – Goods and Services Tax – GST – Dated:- 28-7-2011 – – Goods and Service Tax An imminent stride towards a comprehensive Indirect tax structure Concept paper – Issues Challenges involved in successful implementation 1.0 Position Hitherto 1.1 The Indian Indirect Tax structure has come a long way since independence – (i) The 46 th Amendment to the Constitution of India (ii) MODVAT scheme in 1986 (iii) Service Tax vide the Finance Act 1994 (iv) inter-sectoral credit scheme in 2004 (v) State VAT 2005-2008. Notwithstanding the aforesaid, the existing structure still lacks the efficiency to reap benefits expected out of a comprehensive tax system 1.2 The Union Budget 2007 brought along a ray of hope amidst the complicated in-efficient Indian Indirect Tax structure in the form of an announcement as to the implementation of Goods and Service Tax. 1.3 The essential benefits of the proposed tax system and the issues

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on account of multiple check points, even intra-state at times 1.4 The proposed goods and service tax seeks to address the aforesaid issues including inter alia – (a) one single tax subsuming the host of existing levies like Central Excise, Service Tax, State VAT, Additional Duty of Customs, Central sales tax, Entry Tax, Octroi, stamp duty and cesses (b) free flowing larger pool of input credit (c) comprehensive destination based taxation hence transforming India into one single market (d) reduced compliances (e) free road movement with proposed mechanical manning hence faster and more reliable (f) single simpler statute hence an pro-assessee tax structure 2.0 Basis Structure of GST Before pondering over the issues challenges attached to the proposed levy, it would be of supreme importance to lay out the basic features of the proposed levy as presently envisaged. The documents released by the Government of India in pubic portal in this regard

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Union FM on 21-07-10 brought up the adoption of a single rate for services to the tune of 8% (both CGST SGST) and dual rate structure for goods in the range of 12 to 20% to be converged to 16% over a three year phase Input Tax Credit Mechanism – Larger pool free flow of credit Destination based GST hence – (a) shift of taxable event from production to consumption (b) revenue from inter-state transaction to accrue to the destination state not to the origin state, (c) exports to be zero rated and (d) imports to be subject to GST Existing exemptions remissions related to industrial incentives to be converted into cash refund schemes. Special Industrial Area Schemes to continue up to legitimate expiry time both for the Centre States. Any new exemption, remission etc. or continuation of earlier exemption, remission not to be allowed. In such cases, the Government to provide reimbursement after collecting GST. 3.0 ISSUES – to be addressed

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be the tax revenue that the government expects to generate out of the new tax system, interests of special sectors being securitised and political demands. The following may be noted in this regard – Threshold limits – uniformity to be maintained across SGST CGST as per `RTP and the speech of Union FM on 21-07-10 to be affixed at ₹ 10 lakhs for both CGST SGST thereby entailing a huge assessee base (about 5 million assessee), however the FDP` purported a lower threshold of ₹ 10 lacs for SGST higher one of ₹ 1.5 Crore for CGST Exemptions – Presently 99 items are exempt from both Central Excise State VAT, in addition 240 items are exempt from only Central Excise (post Union budget 2011) – as per GST propositions these 240 items would also be brought under tax net post GST implementation [speech of Union FM on 21-07-10] thereby aligning the list of exemptions Scope of the term `consideration – GST as presently envisaged would be a l

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at preliminary stages being virtually a pass-through, an exemption and incentive free tax system may also be justifiable. This may however, not be acceptable in the political circles, hence a refund model, as suggested in the `FDP `RTF could very well be a comfortable bargain. However, the transition of the incentives under the grand-father clause need be addressed appropriately by the new statute and adequate provisions need be incorporated to convert exemptions to refund schemes, since the GST chain should not be broken. (v) Treatment of Composite Contracts during the transitional phase – Composite Contracts are contracts that envisage both supply of goods rendering of services, the hitherto position hence necessitates taxation under multiple statutes since (a) the federal structure empowers the States to tax intra-state sale of goods and the Centre to tax supply of services (b) different rates for taxation of goods and services thereby entailing – Dispu

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N India integration of tax system as much as tax rates treatment of various constituents was concerned, thereby creating one single market. However, on account of political needs and conflicts the states diverted from the white paper issued by the EC and distorted the overall objectives of a flawless VAT system. The imminent GST should necessarily address the said flaw by setting up a system of taking key decisions on the structure of the statute. In this regard – The Constitution [one hundred and fifteenth amendment] Bill, 2011 (Bill no. 22 of 2011) vide insertion of Article 279A provides for the constitution of a Goods and Service Tax Council by the President of India, basic propositions in this regard are summed-up as under – Said council to comprise – (a) the Union Finance Minister (chair person) (b) the Union minister of the State in charge of revenue (c) Minister in charge of Finance or taxation or any other Minister nominated by each State Government. Deci

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e following issues related to taxation of inter-state transactions need to be addressed – Determine the appropriate model for taxing inter-state transaction Determination of taxing Jurisdiction – (a) in case of goods, GST since being a destination based VAT tax revenue to accrue to the state wherein the goods are finally consumed (b) in case of services, since intangible appropriate place of supply rules need be defined so as to determine the taxing jurisdiction under different genres of transactions Treatment of inter-state branch transfers – GST since purported to be a tax on transaction for consideration, branch transfers since not involving consideration should not prima facie be taxed [though, RTF has recommended levy of GST on inter-state stock transfer FDP has not explicitly conveyed the same in it discussion paper] Setting up of Central agency to control /or regulate the transfer of GST credit amongst states (viii) Compliance Procedures – m

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tter fruitful planning. In-order to overcome the hurdles it would be very important to identify them well in advance more so over ponder over them so as to derive viable solutions. Some of the imminent hurdles that could come in the way of GST Roll-out are detailed hereunder – (i) The Political scenario – Federal /or divided powers of taxation clubbed with a democratic framework of governance entail a situation wherein changes are driven by political requirements more than economic necessities – Implementation of a unified GST requires vesting of equal powers in the state central which in-turn mandates amendment of the Constitution of India [since presently constitution purports divided taxing powers]. Now, amendment of the Constitution where dealing with provisions relating to the states requires in addition to the approval by both the houses of Parliament, the approval of each every state legislative assembly. Thus, introducing impact of

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tion of a robust IT Infrastructure – a sound Information technology infrastructure is a pre-requisite for successful implementation of GST. The setting working up of the Central agency, E-filing and E-regulation of returns assessees would all require a hi-tech IT system. Moreover, such a system need be place substantially before the Roll-out of GST The CG with the approval of the EC has constituted an empowered Group chaired by Dr. Nandan Nilekani with joint representation from the Centre and the States which would be authorized to take decisions about the size, features and functionalities of such a system (iv) Timely completion of cadre review re-organization – of the excise and service tax commissionerates country-wide as GST commissionerates along with separate commissionerates for audit and anti-evasion would take time, and rushing the process through without much thought can prove disastrous for the tax department as lesson learnt from many mergers of

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maintaining the basic principles of the levy. Take for instance the recently released Constitution Amendment Bill proposes to keep Real Estate, petroleum, natural gas outside the purview of GST, thereby flawing the principle of comprehensive coverage and larger pool of credit. Moreover, it also proposes that Entry Tax is not to be subsumed thereby resulting in the carryover of the existing defect of multiple levies. Though the aforesaid propositions have not yet attained finality, they do expose the governments haste in Rolling-out GST that could well result in a flawed GST (vi) Post-implementation blues – the key performance indicator of successful implementation of GST is the continuance of uniformity. Promises commitments made at the time of VAT implementation were shrugged off by the states by diverting from the rate structure other provisions. Hence it would be very important to ensure that appropriate arrangements are made so as to prevent /or

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 18-7-2011 Last Replied Date:- 30-12-1899 – The introduction of GST through the comman goods and service tax or GST from the next financial year appears uncertain with fresh opposition pouring in from BJP ruled states who claims that it would reduce their status of that of municipalities and corporations. Finance minister Pranab Mukherjee s plan to roll out a national level goods and services tax (GST) by April 1, 2012, may get further delayed as finance ministers of two key states have said that it may not be possible. Citing a lack of consensus amongst political parties as well as loss of states autonomy, Madhya Pradesh finance minister Raghavji and Bihar s deputy chief minister S

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on the tax. The GST bill needs approval of two third of the Parliament and half of the Indias 28 states to become the law.Hence BJP support is crucial at the states as well as at the central level.The opposition leaders think that the Constitution amendment bill introduced by centre is reactionary.It is absolutely useless and against the interest of the states.It has provisions which will curtail the autonomy of states. The centre is interfering in the rights of the states. Meanwhile, breaking away from the stand taken by BJP-ruled states, Modi called the tax a historic reform . If GST is implemented, Bihar will be a part of it. There is no question of having our own choice or dislike. This is a historic reform and we believe that the enti

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FEMA – 07/2011-12 – Dated:- 1-7-2011 – RBI 2011-12/7 Master Circular No. 7/2011-12 July 01, 2011 To, All Category – I Authorised Dealer Banks Madam / Sir, Master Circular on Import of Goods and Services Import of Goods and Services into India is being allowed in terms of Section 5 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Account) Rules, 2000 as amended from time to time. 2. This Master Circular consolidates the existing instructions on the subject of Import of Goods and Services at one place. The list of underlying circulars consolidated in this Master Circular is also furnished. 3. This Master Circular is being issued with a sunset clause of one year. This circular will stand withdrawn on July 1, 2012 and be replaced by an updated Master Circular on the subject. Yours faithfully, (Rashmi Fauzdar) Chief General Manager INDEX Section A – Introduction Section B- Ge

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nex- 4 Appendix List of Circulars consolidated in the Master Circular Section A – Introduction (i) Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, Department of Commerce, Government of India. Authorised Dealer Category – I (AD Category – I) banks should ensure that the imports into India are in conformity with the Foreign Trade Policy in force and Foreign Exchange Management (Current Account Transactions) Rules, 2000 framed by the Government of India vide Notification No. G.S.R.381 (E) dated May 3, 2000 and the Directions issued by Reserve Bank under Foreign Exchange Management Act, 1999 from time to time. (ii) AD Category – I banks should follow normal banking procedures and adhere to the provisions of Uniform Customs and Practices for Documentary Credits (UCPDC), etc. while opening letters of credit for import into India on behalf of their constituents. (iii) Compliance with the provisions o

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nnex-4). B.3. Import Licenses Except for goods included in the negative list which require licence under the Foreign Trade Policy in force, AD Category – I banks may freely open letters of credit and allow remittances for import. While opening letters of credit, the For Exchange Control purposes copy of the licence should be called for and special conditions, if any, attached to such licences should be adhered to. After effecting remittances under the licence, AD Category – I banks may preserve the copies of utilised licence /s till they are verified by the internal auditors or inspectors. B.4. Obligation of Purchaser of Foreign Exchange (i) In terms of Section 10(6) of the Foreign Exchange Management Act, 1999 (FEMA), any person acquiring foreign exchange is permitted to use it either for the purpose mentioned in the declaration made by him to an Authorised Dealer Category – I bank under Section 10(5) of the Act or to use it for any other purpose for which acquisition of foreign

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s, remittances against imports should be completed not later than six months from the date of shipment, except in cases where amounts are withheld towards guarantee of performance, etc. (ii) AD Category – I banks may permit settlement of import dues delayed due to disputes, financial difficulties, etc. Interest in respect of delayed payments, usance bills or overdue interest for a period of less than three years from the date of shipment may be permitted in terms of the directions in para C.2 of Part III below. B.5.2. Time limit for deferred payment arrangements Deferred payment arrangements, including suppliers and buyers credit, providing for payments beyond a period of six months from date of shipment up to a period of less than three years, are treated as trade credits for which the procedural guidelines laid down in the Master Circular for External Commercial Borrowings and Trade Credits may be followed. B.5.3. Time limit for import of books Remittances against import of boo

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) send into India without limit foreign exchange in any form other than currency notes, bank notes and travellers cheques; (ii) bring into India from any place outside India, without limit foreign exchange (other than unissued notes), which shall be subject to the condition that such person makes, on arrival in India, a declaration to the Custom Authorities at the Airport in the Currency Declaration Form (CDF) annexed to these Regulations; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in by such person at any one time does not exceed USD10,000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash portion) alone brought in by such person at any one time does not exceed USD 5,000 (US Dollars five thousand) or its equivalent. B.6.2. Import of Indian currency and currency notes (i) Any person re

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ch a guarantee is issued against the counter-guarantee of an international bank of repute situated outside India, is obtained. (b) In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Government/s) is unable to obtain bank guarantee from overseas suppliers and the AD Category – I bank is satisfied about the track record and bonafides of the importer, the requirement of the bank guarantee / standby Letter of Credit may not be insisted upon for advance remittances up to USD 5,000,000 (US Dollar five million). AD Category – I banks may frame their own internal guidelines to deal with such cases as per a suitable policy framed by the bank s Board of Directors. (c) A Public Sector Company or a Department/Undertaking of the Government of India / State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, is required to obtain a specific

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a recognized processor of rough diamonds as per the list to be approved by Gems and Jewellery Export Promotion Council (GJEPC) in this regard and should have a good track record of export realisation; (b) AD Category – I bank should undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction; (c) Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds; (d) KYC and due diligence exercise should be done by the AD Category – I bank for the Indian importer entity and the overseas company; and (e) AD Category – I bank should follow up submission of the Bill of Entry / documents evidencing import of rough diamonds into the c

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report should be submitted within 15 days from the close of the respective half year. C.1.3. Advance Remittance for Import of Aircrafts/Helicopters and other Aviation Related purchases As a sector specific measure, airline companies which have been permitted by the Directorate General of Civil Aviation to operate as a schedule air transport service, can make advance remittance without bank guarantee, up to USD 50 million. Accordingly, AD Category – I banks may allow advance remittance, without obtaining a bank guarantee or an unconditional, irrevocable Standby Letter of Credit, up to USD 50 million, for direct import of each aircraft, helicopter and other aviation related purchases. The remittances for the above transactions shall be subject to the following conditions: The AD Category – I banks should undertake the transactions based on their commercial judgment and after being satisfied about the bonafide of the transactions. KYC and due diligence exercise should be done by th

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id as milestone payments, the date of last remittance made in terms of the contract will be reckoned for the purpose of submission of documentary evidence of import. Prior to making the remittance, the AD Category – I bank may ensure that the requisite approval of the Ministry of Civil Aviation / DGCA / other agencies in terms of the extant Foreign Trade Policy has been obtained by the company, for import. In the event of non-import of aircraft and aviation sector related products, AD Category – I bank should ensure that the amount of advance remittance is immediately repatriated to India. Prior approval of the Regional Office concerned of the Reserve Bank will be required in case of any deviation from the above stipulations. C.1.4. Advance Remittance for the import of services AD Category – I bank may allow advance remittance for import of services without any ceiling subject to the following conditions: (a) Where the amount of advance exceeds USD 500,000 or its equivalent

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on usance bills or overdue interest for a period of less than three years from the date of shipment at the rate prescribed for trade credit from time to time. (ii) In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which interest has been claimed or LIBOR of the currency in which the goods have been invoiced, whichever is applicable. Where interest is not separately claimed or expressly indicated, remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at the prevailing LIBOR of the currency of invoice. C.3. Remittances against Replacement Imports Where goods are short-supplied, damaged, short-landed or lost in transit and the Exchange Control copy of the import licence has already been utilised to cover the opening of a letter of credit against the original goods which have been lost, the original endorsement to the ext

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s sites in connection with the setting up of their International Call Centres (ICCs) subject to the following conditions: (i) The BPO company should have obtained necessaryapproval from the Ministry of Communications and Information Technology, Government of India and other authorities concerned for setting up of the ICC. (ii) The remittance should be allowed based on the AD Category – I banks commercial judgment, the bonafides of the transactions and strictly in terms of the contract. (iii) The remittance is made directly to the account of the overseas supplier. (iv) The AD Category – I banks should also obtain a certificate as evidence of import from the Chief Executive Officer (CEO) or auditor of the importer company that the goods for which remittance was made have actually been imported and installed at overseas sites. C.6. Receipt of Import Bills/Documents C.6.1. Receipt of import documents by the importer directly from overseas suppliers Import bills and documents should b

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0,000 where the importer of rough diamonds, rough precious and semi-precious stones has received the import bills / documents directly from the overseas supplier and the documentary evidence for import is submitted by the importer at the time of remittance. AD Category – I banks may undertake such transactions subject to the following conditions: (i) The import would be subject to the prevailing Foreign Trade Policy. (ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. (iii) AD Category – I banks should do the KYC and due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. Before extending the facility, they should also obtain a report on each individual overseas supplier from the overseas banker or reputed overseas credit rating agency. C.6.3. Receipt of import documents by the AD Category – I bank directly from overseas suppliers

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ive remittance was made, to ensure that the importer submits :- (a) The Exchange Control copy of the Bill of Entry for home consumption, or (b) The Exchange Control copy of the Bill of Entry for warehousing, in case of 100% Export Oriented Units, or (c) Customs Assessment Certificate or Postal Appraisal Form, as declared by the importer to the Customs Authorities, where import has been made by post, as evidence that the goods for which the payment was made have actually been imported into India. (ii) In respect of imports on D/A basis, AD Category – I bank should insist on production of evidence of import at the time of effecting remittance of import bill. However, if importers fail to produce documentary evidence due to genuine reasons such as non-arrival of consignment, delay in delivery/ customs clearance of consignment, etc., AD bank may, if satisfied with the genuineness of request, allow reasonable time, not exceeding three months from the date of remittance, to the importe

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of India (CAG). AD Category – I bank may insist on a declaration from the auditor/CEO of such institutions that their accounts are audited by CAG. C.7.3. Non Physical Imports (i) Where imports are made in non-physical form, i.e., software or data through internet / datacom channels and drawings and designs through e-mail/fax, a certificate from a Chartered Accountant that the software / data / drawing/ design has been received by the importer, may be obtained. (ii) AD Category – I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause. C.8. Issue of acknowledgement AD Category – I bank should acknowledge receipt of evidence of import e.g. Exchange Control copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars relating to the import transactions. C.9. Verification and Preservation (i) Internal i

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er. (ii) AD Category – I bank should forward a statement on half-yearly basis as at the end of June & December of every year, in form BEF (Annex 1) furnishing details of import transactions, exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within 6 months from the date of remittance, to the Regional Office of Reserve Bank under whose jurisdiction the AD Category – I bank is functioning, within 15 days from the close of the half-year to which the statement relates. (iii) AD Category – I bank need not follow up submission of evidence of import involving amount of USD 100,000 or less provided they are satisfied about the genuineness of the transaction and the bonafides of the remitter. A suitable policy may be framed by the bank s Board of Directors and AD Category – I bank may set their own internal guidelines to deal with such cases. C.11. Issue of Bank Guarantee AD Category – I b

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d shall be fixed later, as and when the importer sells the gold to the users. These instructions would also apply to import of platinum and silver. C.13. Direct Import of Gold AD Category – I bank can open Letters of Credit and allow remittances on behalf of EOUs, units in SEZs in the Gem & Jewellery sector and the nominated agencies / banks, for direct import of gold, subject to the following (i) The import of gold should be strictly in accordance with the Foreign Trade Policy. (ii) Suppliers and Buyers Credit, including the usance period of LCs opened for direct import of gold, should not exceed 90 days. (iii) Banker s prudence should be strictly exercised for all transactions pertaining to import of gold. AD Category – I bank should ensure that due diligence is undertaken and all Know Your Customer (KYC) norms and the Anti-Money-Laundering guidelines, issued by Reserve Bank from time to time are adhered to while undertaking such transactions. AD Category – I ba

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ks undertaking gold import transactions are required to submit as per the format enclosed at Annex-3, a monthly statement thereof, to the Chief General Manager, Trade Division, Foreign Exchange Department, Amar Building, Central Office, Reserve Bank of India, Sir P.M. Road, Fort, Mumbai 400001. C.14. Gold Loans (i) Nominated agencies / authorised banks can import gold on loan basis for on lending to exporters of jewellery under this scheme. (ii) EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold on loan basis for manufacturing and export of jewellery on their own account only. (iii) The maximum tenor of gold loan would be as per the Foreign Trade Policy 2009-2014, or as notified by the Government of India from time to time in this regard. (iv) AD bank may open Standby Letters of Credit (SBLC), for import of gold on loan basis, where ever required, as per FEDAI guidelines dated April 1, 2003. The tenor of the SBLC should be in line with the tenor of the gold l

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ut and polished diamonds should not exceed 90 days from the date of shipment. (b) AD Category – I banks should ensure that due diligence is undertaken and Know Your Customer (KYC) norms and Anti-Money Laundering (AML) guidelines, issued by the Reserve Bank are adhered to while undertaking import of the metals and rough, cut and polished diamonds. Further, any large or abnormal increase in the volume of business should be closely examined to ensure that the transactions are bonafide and are not intended for interest / currency arbitrage. All other instructions relating to import of these metals and rough, cut and polished diamonds shall continue. C.16. Import factoring (i) AD Category – I bank may enter into arrangements with international factoring companies of repute, preferably members of Factors Chain International, without the approval of Reserve Bank. (ii) They will have to ensure compliance with the extant foreign exchange directions relating to imports, Foreign Trade

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f the transaction is extinguished by the payment received for the export leg of the transaction, without any delay. AD Category – I banks may note that short-term credit either by way of suppliers credit or buyers credit is not available for merchanting trade or intermediary trade transactions. Appendix List of Circulars consolidated in the Master Circular Import of Goods and Services AP (DIR Series) Circular No. 106 dated June 19, 2003 AP (DIR Series) Circular No. 4 dated July 19, 2003 AP (DIR Series) Circular No. 9 dated August 18, 2003 AP (DIR Series) Circular No. 15 dated September 17, 2003 AP (DIR Series) Circular No. 49 dated December 15, 2003 AP (DIR Series) Circular No. 66 dated February 6, 2004 AP (DIR Series) Circular No. 72 dated February 20, 2004 AP (DIR Series) Circular No. 2 dated July 9, 2004 AP (DIR Series) Circular No. 34 dated February 18, 2005 AP (DIR Series) Circular No. 1 dated July 12, 2005 AP (DIR Series) Circular No. 33 dated February 28, 2007 AP (DIR Seri

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FEMA – 10/2011-12 – Dated:- 1-7-2011 – RBI/2011-12/10 Master Circular No.10/2011-12 July 01, 2011 To, All Category – I Authorised Dealer Banks Madam / Sir, Master Circular on Export of Goods and Services Export of Goods and Services from India is allowed in terms of clause (a) of sub-section (1) and sub-section (3) of Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Acco

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Customs – 01/2011 – Dated:- 14-6-2011 – OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VADODARA-I TRADE FACILITY NOTICE NO. 01/2011-CUSTOMS 14 June 2011 Sub: Instructions / Procedure for issuance of NOC to exporters requesting for supervision of stuffing and sealing of containerized cargo and allocation of work amongst the field officers for such supervision and sealing. Attention of all manufacturers and exporters is invited to various Circulars/instructions issued by the Board from time to time laying down the procedures of stuffing and sealing of export containers, provision for single factory stuffing permission, export of non-excisable goods under self-sealing and self-certification and other related instructions in the subject matter. The reports called from the field formations have indicated that the number of exporters opting for stuffing and sealing of export containers in presence of the Central Excise officers has substantially increased even though the facilit

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been changed by JNCH, Nhava Sheva vide their Public Notice No. 23/2010 dated 26.02.2010 issued from F.NO. S/6-Misc-02/2007-FSP-JNCH. The Public Notice [in Para 10] now requires the exporters to submit their applications for Factory Stuffing Permission [FSP] along with the following documents: (i) NOC issued by the Central Excise Authorities for deputing officers for supervising the stuffing of export cargo; (ii) Original copy of the verification report on genuineness of the existence and functioning of the factory. This implies that the exporters would seek the NOC and the verification report from the jurisdictional Central Excise authorities prior to submitting their application for Factory Stuffing Permission [FSP]. 3.2 The exporter requiring the documents mentioned in (i) & (ii) above shall make an application to the jurisdictional Assistant/Deputy Commissioner in the prescribed application form [as in Annexure-I] along with the supporting documents. The jurisdictional Assistant

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ners. No request for stuffing and sealing of such export containers shall be entertained. 4. Allocation of the work of supervision of stuffing and scaling of the export containers. 4.1 The exporter to whom the NOC has been given and who has obtained the factory stuffing permission from the concerned Customs Station, as per the existing instructions, shall make an application to the Assistant/Deputy Commissioner in-charge of Technical Section in the format prescribed [as in Annexure-II], at least 48 hours in advance, for allocation of officers for the work of supervision of examination, stuffing and sealing of the export containers. Attention, in this regard, is drawn to the Board's Circular No.934/24/2010-CE dated 25.08.2010. Board has decided to provide online scheduling for factory stuffing examination by Central Excise Officers. The trade should, accordingly, submit their requisition for officers in the official e-mail Id: hqtechgrediffmail.com provided to the Technical Section.

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for rendering Services by Customs Officers) Regulations, 1998. If a manufacturer or exporter requisitions the services of Central Excise Officers for supervision and examination of export cargo and stuffing in containers at his premises, such officers also discharge functions of "Customs Officers". The MOT fees are to be paid in advance by the exporter as per their plan for stuffing. On confirmation of the availability of the officers by the Technical Section the exporter shall pay the MOT in advance and submit a copy of challan to the Technical Section. 4.4 If the Factory stuffing permission – issued by the Custom Station requires supervision of Assistant/Deputy Commissioner the jurisdictional Assistant/Deputy Commissioner of Central Excise shall do the needful. 5. Submission of Report regarding examination, stuffing and sealing of containers. 5.1 The inspector/superintendent nominated, for the purpose of examination, stuffing, sealing of containers, would act as a Sector/R

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E – I [Prescribed under Standing Order No./2011] Application form for obtaining NOC from Central Excise authorities 1. Applicant Firm Details i. Name ii. Address: (Registered Office in case of Companies and Head Office in case of Others) iii. Address of Factory where goods are Manufactured iv. Telephone Nos. v. Email address (for correspondence) 2. Excise Details i. Excise Registration Number ii. issuing Authority iii. Range & Address iv. Division & Address v. Commissonrete & Address 3. Details of Proprietor/ Partners/Directors of the applicant firm i. Name ii. Father s Name iii. Residential Address iv. Telephone 4. Nature of Concern (please tick)

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iv. Valid upto v. Products for which registered 9. Status House Details i. One/Two/Three/Four/Five Star ii. Certificate Number iii. Date of Issue iv. Issuing Authority v. Validity Date 10. PAN and Bank Details i. Pan Number ii. Issuing Authority iii.Name of the Bank iv.Account No. v. Type of Account 11. VAT Details i. VAT Registration Number ii. Issuing Authority 12. Turnover Details for the preceding three licensing years Financial Years annual Domestic Turnover (Rs. Lakhs Annual Export Turnover (Rs. Lakhs) (enclose copies of Balance sheets is for three years) 13. Factory Stuffing Premises Details i. Name

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is application are true and correct t the best of my / our knowledge and belief and nothing has been concealed or withheld therefrom. 2. I / We fully understand that any information furnished in the application if found incorrect or false will render me / us liable for any penal action or other consequences as may be prescribed in law or otherwise warranted. 3. I / We hereby certify that the firm / Company for whom the application has been made has not been penalized under Central Excise Act/Allied Acts. 4. I hereby certify that I am authorized to verify and sign this declaration in terms of Power of Attorney vested in me by the Firm / company Place: Date: Signature of the Applicant Name Designation Official Address Residential Address Email Address Telephone No. Mobile No. ANNEXURE – II (in Duplicate & in advance before 48 hours) Date: / /2011 To, The Deputy/ Assistant Commissioner (Tech.), Central Excise & Customs, Hdqrs., Commissionerate Subject: Requisition for allotment of

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Dated:- 7-6-2011 – Press Information Bureau Government of India Ministry of Finance 07-June-2011 16:59 IST FM to Inaugurate Annual Conference of Chief Commissioners and Directors General of Customs, Central Excise and Service Tax Tomorrow; Revenue Mobilisation, GST and Managing Innovations Efficiently to Dominate the Two Days Conference The All India Annual Conference of the Chief Commissioners and Directors General of Customs , Central Excise and Service Tax will be held at Vigyan Bhawan , New Delhi on 8th and 9th June, 2011. The Union Finance Minister, Shri Pranab Mukherjee will inaugurate the Conference on 8th June, 2011 while Minister of State for Finance Shri S.S. Palanimanickam will preside over the valedictory function on 9th June,

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F.No.V/DGST/21-30/Legal/10/2010/2698 Dated:- 29-4-2011 Order-Instruction – Circulars – Service Tax – DIRECTORATE GENERAL OF SERVICE TAX 9th Floor, Piramal Chambers, Jijibhoy Lane, Parel, Lalbaug, Mumbai 400 012 Dated: April 29, 2011 Sub: Service tax liability on the value of SIM card SLP (C) No.24690/2009 filed by M/s. Idea Mobile Communication Ltd. against the Order of the Hon'ble High Court of Kerala Reg. The above SLP has been filed by M/s. Idea Mobile Communication Ltd. against the order dated 4.9.2008 of the Hon'ble High court of Kerala in Central Excise Appeal No. 20/2006. The issue in brief leading to the filing of SLP is as below:- A notice was issued to the petitioner demanding service tax on the value

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annot be taken in the case of the petitioner despite that they have remitted Sales Tax and consequently Service Tax is chargeable on the value of the SIM card. The information received from various formations all over India, it is seen that while in most of the States/Zones, Service tax is being paid on the value of SIM cards, there are certain Zones/States where service tax is not being paid and the State authorities are collecting Sates Tax/VAT on these SIM cards. In view of the practice followed in majority of the field formations on the issue and the matter being sub-judice, you are requested to issue directions to the field formations under your charge to raise protective demands on this issue to safeguard Government revenue. [F

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Service Tax – Started By: – Samprada Kharat – Dated:- 21-4-2011 Last Replied Date:- 22-4-2011 – A Company is engaged in exports of goods relating to Iron & Steel Industry. Now this Company is using the services of Clearing & Forwarding agents & Banking & Financial Services in this regards… According to the provisions, these both services are exempted and the Company can demand refund of the payment made…Plz guide me whether my interpretation of the ACT is correct and if not

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2011 (4) TMI 845 – CESTAT, NEW DELHI – 2012 (25) S.T.R. 30 (Tri. – Del.) – – Waiver of pre-deposit – exemption under notification 12/2003-ST – whether the value of materials supplied by service receiver can be brought within the meanings of “gross amount charged” or “consideration” used in section 67 of the Finance Act 1994 – Held that:- The type of contract undertaken by assessee would be covered under “Works Contract Service” from 01-06-2007 – In the notification it is specified that an assessee should indicate the value of materials sold in each invoice. All what is required is that they should have documentary proof specifically indicating the value of the said goods and materials sold. When the applicants are making a claim that they have paid VAT on more than 67% of the gross receipts received by them and they have documentary proof by way of VAT returns, this claim cannot be brushed aside – Hence, the Applicants have made out a strong prima facie case in their favor for comple

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wer. 3. The Revenue contests that they were engaged in providing only finishing services and hence they were not eligible for the benefit of the said notifications. It is also alleged that in some of the contracts, the Applicants had received free of cost (FOC) materials from the service receivers and the value of such FOC materials was not included in the gross amount charged before availing the rebate of 67% provided under the notifications. The demand confirmed in the impugned service is based on the above arguments. 4. The Applicants submit that the contracts undertaken by them were in the nature of composite works contract which were made chargeable to service tax only with effect from 01-06-2007 under works contract service and hence the applicants were not liable to pay service tax during the impugned period. 5. They further submit that even if they were liable to pay service tax under construction services, they were entitled to avail exemption under notification 12/2003-ST in

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shing service. He also argues that this exemption was available only if the value of all the materials supplied free of cost by the receiver of the service was included in the gross receipts before applying the 67% abatement from the gross value. 8. The Ld. DR further contests that for claiming exemption under notification 12/2003-ST they should have indicated the value of the material sold in the concerned invoices. Since this was not done they are not eligible for the exemption and the demand has been rightly confirmed. 9. We have considered arguments on both sides. 10. The condition specified in Notification 01/2006-ST against S. No. 7, which is the relevant entry, reads as under: This exemption shall not apply in such cases where the taxable services provided are only completion and finishing services in relation to building or civil structure, referred to in sub-clause (c) of clause (25b) of section 65 of the Finance Act. Explanation.- The gross amount charged shall include the va

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to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. 12. There can be a dispute whether activity undertaken by the Applicants is the one at clause (c) or that at clause (d) above. Further notification 1/2006-ST does not talk about inclusion of value of materials supplied free of cost by the receiver of the service. It only says that the value of materials sold by the provider of service should be included in the gross value before claiming abatement. The question whether the value of materials supplied by service receiver can be brought within the meanings of gross amount charged or consideration used in section 67 of the Finance Act 1994 is presently under dispute in many cases before the Tribunal and different Courts. 13. Notification 12/2003-ST reads as under:

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Hospital Services and Diagnostics Tests Exempted from New Levy in its Entirety; Abatement Enhanced From 40% to 55% of Retail Sale Price for SSI Garment Manufactures; Basic Custom Duty Reduced from 30 Per Cent to 5 Per Cent on Raw Silk AD Valorem; Constitution Amendment Bill to Facilitate GST Introduced – Dated:- 22-3-2011 – The Union Finance Minister Shri Pranab Mukherjee has proposed to enhance the abatement from 40% to 55% of the Retail Sale Price for the Small Scale Industries (SSI) Garment Manufacturers. With this relief, a unit would continue to be eligible for SSI exemption in 2011-12, even if it had a turnover based on Retail Sale Price of Rs 8.9 crore in the current year. The necessary notification in this regard will be issued in d

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impact on the domestic sericulture sector. The Union Finance Minister Shri Mukherjee said that it has been decided to exempt the new levy in its entirety both in respect of services provided by hospitals, as well as by way of diagnostic tests until GST comes into force. This has been done in view of considerable anxiety raised in this regard in the Parliament and outside, the Finance Minister added. He said that the purpose of the new levy was not mobilise revenues but to pave the way for the introduction of the GST. Beside above, outlining a significant legislative agenda for reforms in the financial sector, the Union Finance Minister Shri Mukherjee introduced the Constitution Amendment Bill to facilitate the GST in Lok Sabha today. Besid

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Dated:- 22-3-2011 – Empowered Group on IT Infrastructure on GST headed by Shri Nandan Nilekani Preface The broad IT plan for enabling GST was presented to the Government of India and the Empowered Committee of State Finance Ministers under the Chairmanship of Dr. Asim Dasgupta on July 21, 2010. This document is a follow-up to that presentation and feedback thereon and describes the IT strategy for GST implementation. This document is at the draft stage, and will evolve as various stakeholders a

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Allied Laws – Govt introduces Constitution Bill in LS for GST – TMI Updates – Highlights

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Govt introduces Constitution Bill in LS for GST – Dated:- 22-3-2011 – New Delhi, Mar 22 (PTI) The government today introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Service Tax (GST), an indirect tax regime that would subsume levies like excise, service tax and sales tax. The Bill, introduced by Finance Minister Pranab Mukherjee seeks to amend the constitution with a view to confer simultaneous powers on centre and states to levy taxes on goods and services. The GST would replace a number of indirect taxes presently being levied by the central government and the state governments and is intended to remove cascading of taxes and provide a common national market for goods and services , said the statement of objects and reasons of the Bill. The Bill provides for creation of a GST Council to be headed by Union Finance Minister. GST : The Constitution (One Hundered and Fifteenth Amendment) Bill, 2011* [BILL NO. 22 OF 2011] A Bill furthe

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: Provided that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation.-For the purpose of this article, State includes a Union territory with Legislature. Amendment of article 248 3. In article 248 of the Constitution, in clause (1), for the word Parliament , the words, figures and letter Subject to article 246A, Parliament shall be substituted. Amendment of article 249 4. In article 249 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 250 5. In article 250 of the Constitution, in clause (1), after the words with respect to , the words goods and services tax or shall be inserted. Amendment of article 268 6. In article 268 of the Constitution, in clause (1), the words and such duties of excise on medicinal and toilet preparations shall be omi

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e deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. Explanation II.-For the purpose of this article, State includes a Union territory with Legislature. (2) Parliament may, by law, formulate the principles for determining when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Amendment of article 270 10. In article 270 of the Constitution,- (i) in clause (1), for the words, figures and letter articles 268,268A and 269 , the words, figures and letter articles 268, 269 and 269A shall be substituted; (ii) after clause (1), the following clause shall be inserted, namely :- (1A) Goods and services tax levied and collected by the Government of India shall also be distributed between the Unionand the States in the manner provided in clause (2). . Amendment of article 271 11. In article 271 of the Constitution, after the words in those articles , the words except the goods and services tax s

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Services Tax Council shall make recommendations to theUnionand the States on- (a) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to or exempted from the goods and services tax; (c) the threshold limit of turnover below which goods and services tax may be exempted; (d) the rates of goods and services tax; and (e) any other matter relating to the goods and services tax, as the Council may decide. (5) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. (6) One-third of the total number of members of the Goods and Services Tax Council shall constitute the quorum at its meetings. (7) The Goods and Services Tax Council shall determine the procedure in

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stituted under article 279A that results in a loss of revenue to a State Government or the Government of India or affects the harmonised structure of the goods and services tax. (2) The Goods and Services Tax Dispute Settlement Authority shall consist of a Chairperson and two other members. (3) The Chairperson of the Goods and Services Tax Dispute Settlement Authority shall be a person who has been a Judge of the Supreme Court or Chief Justice of a High Court to be appointed by the President on the recommendation of the Chief Justice of India. (4) The two other members of the Goods and Services Tax Dispute Settlement Authority shall be persons of proven capacity and expertise in the field of law, economics or public affairs to be appointed by the President on the recommendation of the Goods and Services Tax Council. (5) The Goods and Services Tax Dispute Settlement Authority shall pass suitable orders including interim orders. (6) A law made under clause (1) may specify the powers whic

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rvices or both shall be substituted; (iii) for clause (3), the following clauses shall be substituted, namely :- (3) Any law of a State shall, in so far as it imposes, or authorises the, imposition of a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of tax as Parliament may by law specify. (4) Nothing in clause (3) shall apply to a law of a State insofar as it imposes or authorises the imposition of goods and services tax. . Amendment of article 366 14. In article 366 of the Constitution,- (i) after clause (12), the following clause shall be inserted, namely :- (12A) goods and services tax means any tax on supply of goods or services or both except taxes on the supply of the following goods, namely :- (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natur

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produced inIndia, namely:- (a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products. ; (ii) entries 92 and 92C shall be omitted; (b) in List II – State List,- (i) for entry 52, the following entry shall be substituted, namely:- 52. Taxes on the entry of goods into a local area for consumption, use or sale therein to the extent levied and collected by a Panchayat or a Municipality. ; (ii) for entry 54, the following entry shall be substituted, namely:- 54. Taxes on the sale, other than sale in the course of inter-State trade or commerce or sale in the course of international trade and commerce of, petroleum crude, high speed diesel, natural gas, motor spirit (commonly known as petrol), aviation turbine fuel and alcoholic liquor for human consumption. ; (iii) entry 55 shall be omitted; (iv) for entry 62, the following entry shall be substituted, namely:- 62. Taxes on entertai

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nded by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of three years from the date of such assent. (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament. STATEMENT OF OBJECTS AND REASONS The scheme of the Constitution does not provide for any concurrent taxing powers to theUnionas well as the States. It is proposed to introduce the goods and services tax and for this purpose to amend the Constitution conferring simultaneous power on Parliament as well as the State Legislatures including every Union territory with Legislature to make laws for levying goods and services tax on every transaction of supply of goods or services or both. The goods and services tax

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goods outside the purview of the goods and services tax; (b) subsuming of State VAT/Sales Tax, entertainment tax (unless it is levied by the local bodies), Luxury Tax, Taxes on lottery, betting and gambling, tax on advertisements, State Cesses and Surcharges insofar as they relate to supply of goods and services and Entry Tax, not levied by local bodies; (c) levy of Integrated GST (IGST) on inter-State transactions of goods and services; (d) conferring simultaneous power upon Parliament and the State Legislatures to make laws governing goods and services tax; (e) coverage of goods other than crude petroleum, diesel, pertol, aviation turbine fuel, natural gas and alcohol for human consumption under the goods and services tax for the levy of goods and services tax; (f) creation of a Goods and Services Tax Council to examine issues relating to goods and services tax and make recommendations to theUnion and the States on parameters like rates, exemption list and threshold limits; (g) enab

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olic Liquor for human consumption. 3. The Bill seeks to achieve the above objects. New Delhi; Pranab Mukherjee The 16th March, 2011. Presidents recommendation under article 117 of the Constitution of India [Copy of letter No. 31011/04/2009, dated 16-3-2011 from Shri Pranab Mukherjee, Minister of Finance to the Secretary-General, Lok Sabha] The President, having been informed of the subject matter of the proposed Bill, recommends, under clauses (1) and (3) of article 117, read with clause (4) of article 274, of the Constitution of India, the introduction of the Constitution (One Hundred and Fifteenth Amendment) Bill, 2011 in Lok Sabha and also the consideration of the Bill. FINANCIAL MEMORANDUM Clause 12 of the Bill seeks to insert new articles 279A relating to constitution of Goods and Services Tax Council and 279B relating to establishment of Goods and Services Tax Dispute Settlement Authority in the Constitution. The proposed new article 279A seeks to

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ervices Tax Dispute Settlement Authority will involve creation of some posts. Given that the introduction of goods and services tax will make the Indian trade and industry much more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expenditure on these bodies would be miniscule. It is not practicable to make an estimate of the expenditure, both recurring and nonrecurring on account of the above. However, such expenditure would be considerably marginal. MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 12 of the Bill seeks to insert a new article 279A relating to the constitution of a Council to be called the Goods and Services Tax Council and another article 279B establishing the Goods and Services Tax Disputes Settlement Authority. Clause (1) of the proposed new article 279A provides that the President shall, within sixty days from the date of the commencement of the Constitution (One Hundred and Fifteenth A

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Dated:- 8-3-2011 – Association of Private Airport Operators has requested the Government to bring aviation fuel under the Goods and Services Tax (GST) and to double the duty free allowances for passengers coming from abroad. In the model of the GST which has been proposed by the Empowered Committee of State Finance Ministers, it has not been possible to bring aviation turbine fuel under the purview of the GST. Also, it has not been found feasible to accede to the request to double the duty free

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Goods and Service Tax – GST – By: – Pradeep Jain – Dated:- 1-3-2011 Last Replied Date:- 30-12-1899 – Prepared By: CA Pradeep Jain And Sukhvinder Kaur, LLB[FYIC] The introduction of Goods and Service Tax (GST) at both Central as well as State level is the dream of the Government despite their being stiff opposition from various states who do not want to loose the sources which generate revenue for them. The Finance Minister Mr. Pranab Mukherjee has announced in the Budget Speech given on 28th February 2011 that the Constitutional Amendment Bill will be introduced in the Parliament in this Session. The other steps proposed to be taken for introduction of GST by the Finance Minister are establishment of a strong IT infrastructure. It was also

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Act levying GST is in place. These steps are far fetched ideas which cannot materialize till the Amendment is carried out in the Constitution and the path for introducing GST is cleared of all anomalies. The Finance Minister has also announced in its budget speech that to tax services based on a small negative list for tapping untapped sectors are brought under tax net, would be very conducive for a nationwide GST. It was proposed to initiate an informed public debate on the subject to help finalise the approach to GST. But the hurdle is still the same that when the proposed GST bill is not there, how the debate will go on and on what basis. Until and unless the first step of Centre having power to make the law and the said law is made, th

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Dated:- 28-2-2011 – Finance Minister Shri Pranab Mukherjee has stressed on the importance of computerization of Commercial Taxes. While presenting the Union Budget 2011-12 in Lok Sabha he said that Mission Mode Projects for computerization of Commercial Taxes in States will allow States to align with the roll out of GST. Funds have been released for 31 such projects received from the States and Union Territories (UTs). Most of the States and UTs have already enabled the facility of dealers maki

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