Goods and Services Tax

Dated:- 22-5-2012 – Press Information Bureau Government of India Ministry of Finance 22-May-2012 15:45 IST GST to Make Goods and Services more Competitive both in Domestic and International Markets: FM The Union Finance Minister Shri Pranab Mukherjee said that the primary benefit of the Goods and Services Tax (GST), when introduced, would be the removal of cascading effect of taxes which acts like a hidden cost and makes goods and services uncompetitive both in domestic and international markets. The Finance Minister Shri Mukherjee said that GST would check leakage of revenue and the States should be able to realize tax revenues commensurate to consumption of goods and services within their territory. He said that it would provide a stable source of tax revenue and would play a very vital role in sewing India together into one common market. The Finance Minister said that for the consumer, the biggest advantage of the GST would be its transparent character as well as the reduction in

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tary, Shri R.S. Gujral, Secretary, Financial Services, Shri D.K. Mittal, Secretary Disinvestment, Shri Haleem Mohammed Khan, Chief Economic Advisor, Dr. Kaushik Basu and senior officials of the Ministry of Finance also attended the aforesaid meeting. The Finance Minister Shri Mukherjee said that there are several factors that make the current situation conducive to the introduction of GST in India. He said that studies have shown that the introduction of GST would act like a stimulus and instantly spur the rate of growth of the economy. Shri Mukherjee said that all the States have successfully switched over from the erstwhile Sales Tax system to the State Value Added Tax (VAT). He said that with the implementation of the recommendations of the 13th Finance Commission, the two items in respect of which the States were prevented from levying VAT viz., textiles and sugar have also been omitted from the AED schedule. The Finance Minister said that ever since the introduction of VAT, almost

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ill in the Lok Sabha in February 2011-the first step in the legal process that would culminate into the GST. The Finance Minister Shri Mukherjee said that he is hopeful that the Standing Committee on Finance would soon give its report on the Bill so that the process of legislation in this direction can move forward. The Union Finance Minister Shri Pranab Mukherjee said that the Empowered Group on IT Infrastructure for GST (EG) headed by Shri Nandan Nilekani had recommended creation of a Special Purpose Vehicle (SPV) which was further endorsed by the Empowered Committee of State Finance Ministers(EC). He said that the SPV would be a non-government, not for profit company with a self sustaining revenue model. He added that it would be governed by the representatives from the Centre, State and other private stakeholders. The government would however retain the strategic control over the GSTN, the Minister added. The Finance ,Minister Shri Mukherjee said that EG also recommended that creat

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x collections both by the States and the Centre. This will also lead to increase in the Tax GDP ratio. They however cautioned that it must be ensured that introduction of GST does not lead to any hike in prices of commodities as inflation is still above comfort level. Some members suggested that there should be single point of taxation as multi point taxation leads to harassment of businessmen and traders. It was also suggested that the threshold limit should be kept little higher so that small traders are outside the purview of GST as it is very difficult for them to maintain books of accounts etc. Many members suggested for the same rate of taxes in all the States so that businessmen and traders donot indulge in any tax evasion activities. Some members suggested that the Constitution Amendment Bill on the subject recently introduced in the Parliament needs some corrections. In this regard, it was suggested that the provision of taking decision by consensus by GST Council is not pract

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Dated:- 14-5-2012 – Press Information Bureau Government of India Ministry of Commerce & Industry 14-May-2012 17:19 IST The details of export of goods and services are given below: Value in US $ billion Year 2009-10 2010-11 2011-12 (Provisional) Exports of goods 178.8 251.1 303.7 Growth (%) y-o-y -3.5 40.4 20.9 Source : DGCI&S, Kolkata Value in US $ billion Year 2009-10 2010-11 2011-12 (April-Dec) Exports of Services 96.0 132.9 103.0 Growth (%) y-o-y -9.4 38.4 5.9 # Source : BOP, RBI # :

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VAT and Sales Tax – Benefit of the sales tax deferral scheme – it is not the case of the Revenue that circular dated May 1, 2000 is in conflict with either any statutory provision or the deferral sche

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2013 (5) TMI 134 – KERALA HIGH COURT – TMI, [2013] 64 VST 122 (Ker) – – Availing input tax credit – Not a registered dealer at the relevant time – The business was being run earlier, as a 'proprietorship concern' , which expired , than a partnership deed was executed and the business was taken over accordingly. It was much later, the new partnership firm who has approached this Court – Held that:- Section 11 (12) and 11 (13) make it explicitly clear that the benefit contemplated there in can be claimed only by a 'registered dealer' and never by anybody else.



Since the present partnership took its breath for the first time only much later, the petitioner was never an entity before the concerned respondents/authorities anytime before and it cannot be said that the petitioner firm is entitled to have the input tax credit as a matter of right, irrespective of the mandate under the statute, by entertaining the application preferred in January 2006 for retrospective registratio

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3-11-2004. On demise of the owner, the legal heirs took over the business as a running concern, by forming a partnership. Present petitioner is a different entity, as five of the earlier partners were subsequently excluded and the firm is now being run just by two persons, as the partners. 3. The grievance of the petitioner originates from the time when the petitioner submitted necessary application for availing the benefit of input tax credit in the year 2006. It is stated that the petitioner had applied for obtaining the registration under the KVAT Act, and was granted registration, with effect from 1-4-2005, as per Ext.P3 dated 16-3-2006. However, the claim preferred by the petitioner as borne by Ext.P5 was stated as not acceptable to the department, and the said position was conveyed to the petitioner vide Ext.P6 series show-cause notices under Section 22(1) of the KVAT Act stating that the petitioner, being not a registered dealer at the relevant time, it could not be acceded to.

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over automatically, to the newly introduced KVAT system, which was not case of the petitioner. Thereafter, the petitioner was served with Ext.P10 revised notice dated 20-6-2006, specifically referring to the rejection of the claim in Form 25 A filed on 31-3-2006, as the petitioner was not a registered dealer as on 31-3-2005, which was the 'sine qua non' to have 'automatic carry forward' under the KVAT Act, in relation to registration. Further proceedings were issued in respect of the liability sought to be mulcted upon the petitioner, when the petitioner approached this Court by filing the above writ petition. 4. During the pendency of the above writ petition, taking note of the lapse on the part of the petitioner, the assessment was finalised as per Ext.P13 and the liability was accordingly sought to be realised by issuing Ext.P4 demand notice . This made the petitioner to amend the writ petition by filing I.A No 1698 of 2008, which was allowed and matter is now taken

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ount of input tax credit, maintain the accounts and such other records as may be prescribed, in respect of purchases, supplies and sales effected by him in the State. Sec 11(13) of the Act:- 13) Subject to the provisions of sub-sections (4) to (7) and sub-sections (9) to (12) , input tax credit shall be allowed to a registered dealer in respect of the tax paid under the Kerala General Sales Tax Act, 1963 (15 of 1963) where the tax paid by the dealer who sold the goods to such registered dealer or by any previous seller, or the Kerala Tax on Entry of Goods into Local Areas Act, 1994(15 of 1994), in respect of goods purchased by him during a period of one year immediately preceding the date of commencement of this Act, subject to such conditions and restrictions as may be prescribed where such goods are i) held as opening stock on such date and sold or used in the manufacture of taxable goods or used in the execution of works contract or used as containers or packing materials for the pa

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ate application was necessary to have registration, particularly under the KGST Act, which was the only reason for delay. The contention is that the petitioner shall not be non-suited on the above ground, more so when the petitioner was given to understand that the defect could be rectified; which made the petitioner to deposit the 'registration fee' along with the 'compounding fee' for the delay, thus remitting a total sum of ₹ 35,000/-. The learned Counsel for the petitioner also places reliance on two decisions rendered by this Court reported in Sales Tax Officer vs. Kerala Curry House (2010 (36) VST 126) and Chandra Interiors vs. State of Kerala (2011 (44) VST 100) in support of the case. 7. With regard to the statutory prescription, in so far as Section 11 (12) and Section 11 (13) are categoric, there cannot be any ambiguity in this regard and if at all any benefit is to be obtained, the parameters specified under the provisions have to be complied with. Sinc

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e actual date of the commencement of business. A learned Judge held that the party was eligible to have retrospective registration from the date of commencement of the business; against which appeal was preferred, which was being considered by the learned Judges in the said case. 9. It was noted that Section 16 (2) of the Act prior to the amendment provided that the registration shall take effect only after the date of filing the application for registration. But later, it was substituted adding 'proviso' to the following effect: "Provided that registration shall be deemed to have been granted with effect from the date of commencement of business irrespective of the date of application, for the purposes of,- (a) paying tax under sub-section (5) of section 6, subject to eligibility, and (b) opting for payment of tax under section 8 for the relevant years subject to eligibility: Provided further that new dealers applying for registration and existing dealers having registrat

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s made clear that, as per the new proviso, the registration granted will have retrospective effect from the date of commencement of the business, only for the purpose of 'clauses (a) and (b)' of the said proviso which enabled the eligible dealer to pay the tax on presumptive basis under Section 6(5) of the Act, and also dealers eligible for payment of tax under Section 8, irrespective of the fact whether the dealer was carrying on business during that year without registration. Subject to the said limited benefit conferred under clauses (a) and (b) of the proviso, it was categorically held that, a dealer had no right to claim retrospective registration, by making an application for correction of the certificate of registration. From the above, it is clear that the above decision does not come to the rescue of the petitioner, who claims the benefit of input tax credit without being a registered dealer as on 31-3-2005. 10. Coming to (44) VST 100, it was a case where the petitione

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tance, that the case projected by the dealer was entertained and appropriate relief was extended, which does not support the case of the petitioner in any manner; for the plain reason that Section 11 (12) and 11 (13) make it explicitly clear that the benefit contemplated therein can be claimed only by a 'registered dealer' and never by anybody else. 11. Yet another important aspect to be considered is as to the 'identity' of the person concerned. Admittedly, the business was being run earlier, as a 'proprietorship concern' by one Mr. K.K. Abraham, who expired on 23-11- 2004. It is also conceded in the writ petition that, on his demise, a partnership deed was executed with the widow of the deceased, three daughters and the husbands of the daughters as aforesaid, as the partners and the business was taken over accordingly. It was much later, that the present partnership came into existence by re-constituting the firm, excluding 'five' erstwhile partners an

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Goods and Services Tax – Started By: – MEHUL ASHAR – Dated:- 20-3-2012 Last Replied Date:- 20-3-2012 – Respected Sir, will GST be implemented from august -2011 as declared by the FM IN THE BUDGET 201

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Dated:- 16-3-2012 – Press Information Bureau Government of India Ministry of Finance 16-March-2012 13:29 IST Government Keen on Early Enactment of DTC Bill Model Legislation for GST on the Anvil National Information Utility to be Operational by August The Union Finance Minister ShriPranab Mukherjee today expressed firm commitment to enact the Direct Taxes Code (DTC) Bill at the earliest, after expeditious examination of the report of the Parliamentary Standing Committee. The Bill was introduced in Parliament in August 2010, and was to come into force from April 1 this year. However, the timeline could not be adhered to as the report of the Parliamentary Standing Committee on the matter was received only on March 9 this year. Similarly, Shr

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Allied Laws – GST to be operational by August 2012 – TMI Updates – Highlights

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Goods and Service Tax – GST – By: – Swati Dodhi – Dated:- 15-3-2012 Last Replied Date:- 30-12-1899 – Goods and Service Tax (GST) As the introduction of the Goods and Service Tax (GST) gathers momentum, the businesses in India have started bracing themselves. GST, which is likely to subsume most of the current indirect tax levies, is expected to be the most efficient indirect tax system in India. GST would be a single comprehensive indirect tax to be levied on goods and services. It would be levied at every production and distribution leg with the eligibility to claim set-off of most indirect taxes on procurement leg. Under the current regime, there is a fractured credit mechanism; businesses don't get credit for all the taxes they pay.

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n enhanced logistics cost. For instance, to avoid the burden of CST, the businesses open distribution centres in all the States, which lead to additional logistics cost. With the introduction of GST, the businesses may re-define their supply chain and structure the same in a most economic and efficient manner without worrying about the indirect taxes – for example, the businesses may not need to open distribution centres or warehouses in each and every State; they can operate from a place most convenient for their business from a commercial perspective. This would not only allow the businesses to save the inventory and warehousing cost but would also reduce the unwarranted compliance requirements under indirect tax laws in each and every st

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from 10 per cent currently to 16 per cent under GST. Besides the fact that GST is likely to have an impact on the pricing of goods and services, the cash flow of businesses may result in favourable swing. Unlike the current regime, no input tax would become cost under GST and could be set-off against the output tax liability instead of cash payment. REVAMP OF BUSINESSES GST would not just require the businesses to re-define the supply chain but also to re-design their accounting and IT systems. The transformation would require the businesses to revise the formats of invoices, purchase/sales registers, stock registers, reporting declarations to factor the changes under the GST regime. The IT systems would have to be reconfigured accordingly.

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Dated:- 22-2-2012 – Press Information Bureau Government of India Ministry of Finance 22-February-2012 16:39 IST GST will bring about a Paradigm Shift in the Arena of Indirect Taxation in the Country; asks CBEC to make extra efforts to meet the Targets Of Indirect Tax Collections for the Current Fiscal : FM The Union Finance Minister Shri Pranab Mukherjee said that with the introduction of Goods and Services Tax (GST), we are now perhaps at the door-step of the most significant reform in the history of indirect taxes in the country. He said that GST is expected to be a more efficient system of taxation and is likely to give a boost to the tax revenues of the Centre and the States. The Finance Minister Shri Pranab Mukherjee said that GST will also remove barriers amongst States and convert the entire country into a common market. Once implemented, GST will bring about a paradigm shift in the arena of indirect taxation in the country, the Finance Minister added. Shri Mukherjee was speaki

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re than doubled over the last ten years from ₹ 68,282 crore in 2000-01 to ₹ 1,37,427 crore in 2010-11 which is 40 per cent of the total revenue from Indirect Taxes. Shri Mukherjee said that the in the current financial year, the collections from Central Excise up to January, 2012 stand at ₹ 1,17,730 crore, out of total indirect tax collections of ₹ 3,17, 233 crore. He said that there has been exponential growth in the service tax revenues over the years. As compared to a revenue of just ₹ 2612 crore in 2000-01, the service tax collections in 2010-11 stood at ₹ 70,391 crore, which is about 20 per cent of total indirect tax collections, the Finance Minister said. The Finance Minister Shri Mukherjee said that the indirect tax collection figures up to January 2012 indicate that there have been some gains over the last year. However, the Finance Minister said that still further efforts are required to ensure to meet the target of indirect tax collections

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source of inspiration to the other officers of the Service. On the revenue front, he mentioned that while Service tax revenues had been buoyant, there were challenges in so far as Central Excise & Customs revenue were concerned. However, he expressed the hope that the budgetary targets would be achieved by the Department. Quoting the report of the Global Financial Integrity that 70% of the illicit outflow of funds is through trade mispricing, he highlighted the role of the Department in combating various forms of organized economic crimes. He mentioned that there was a good momentum on the GST front, the implementation of which required the concurrence of the States. Speaking about the welfare measures of the staff, Shri Gujral mentioned that the Cadre review of the Department is expected to be through within a period of one month. Chairman CBEC Shri S.K.Goel informed that the indirect tax collections of ₹ 3,17,233 crore till January 2012 in the current financial year, are 15

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nce and dedication to work in their respective fields. I congratulate the officers who are being conferred with the certificates of the Presidential Award 2011. I also greet the family members of the awardees who have assembled here to witness the conferment of this prestigious award. Your presence is undoubtedly a source of motivation to the awardees. The Customs and Excise Department has undergone a major transformation in keeping with the needs of a rapidly changing economic environment in the country. The Department has shown an ability to adapt quickly and successfully to the challenges that it has encountered. In fact, by launching major IT initiatives for facilitating tax compliance, the Department has set an example for others to emulate. The latest such initiative, namely, the introduction of mandatory e-filing of Central Excise and Service tax returns would not only make the process convenient for the assesses and reduce the transaction costs, but would also throw up useful i

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control-based gate pass system to invoice and record-based system. The objective of these reforms was to repose a greater trust on assesses and introduce a number of trade facilitation measures in Central Excise rules and procedures. The system of compliance in central excise was sought to be implemented mainly through audit and anti-evasion machineries. These reforms have to continue to their logical end, making compliance easy and cost effective. Service Tax was introduced for the first time in 1994. It has steadily grown over the years and now covers 119 services. There has been exponential growth in the service tax revenues over the years. As compared to a revenue of 2612 crore in 2000-01, the collections in 2010-11 stood at 70,391 crore, which is about 20 per cent of total indirect tax collections. With the introduction of Goods and Services Tax (GST), we are now perhaps at the door-step of the most significant reform in the history of indirect taxes in the country. Under the GST

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d a large number of trade facilitation measures, the most recent ones being the Authorized Economic Operator Scheme for faster clearances as part of secure global supply chain and Onsite Post Clearance Audit. Self-assessment in tax returns has been introduced last year. It marks a fundamental shift from the departmental assessment and a new era has begun, one of trust based customs control. Customs will continue to play a vital role in combating the menace of fake Indian currency, counterfeit products, narcotic drugs and psychotropic substances, smuggling of which has become a major economic threat. It means that the Customs operational units have to be equipped with the latest technology and resources for dealing with such offences. A powerful intelligence network is equally important in this task. I am happy to see that the department has been proactive in co-operating with other countries for the prevention and detection of customs offences. As we approach the end of the current fin

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FEMA – Export of Goods and Services – Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year . – Cir. No. 81 Dated: February 21, 2012 – TMI Updates – Highlights

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Export of Goods and Services – Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year . – FEMA – 81 – Dated:- 21-2-2012 – RBI/2011-12/403 A.P. (DIR Series) Circular No.81 February 21, 2012 To All Category – I Authorised Dealer Banks Madam / Sir, Export of Goods and Services – Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year Attention of Authorised Dealer Category – I (AD Category I) banks is invited to the sub-regulation (2) of Regulation 16 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, notified vide Notification No.FEMA.23/RB-2000, dated 3rd May 2000, as amended from time to time, in t

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or the overseas buyer. ii. compliance with the Anti Money Laundering standards has been ensured; iii. the AD Category-I bank should ensure that export advance received by the exporter should be utilized to execute export and not for any other purpose i.e., the transaction is a bona-fide transaction; iv. progress payment, if any, should be received directly from the overseas buyer strictly in terms of the contract; v. the rate of interest, if any, payable on the advance payment shall not exceed London Inter-Bank Offered Rate (LIBOR) + 100 basis points; vi. there should be no instance of refund exceeding 10% of the advance payment received in the last three years. vii. the documents covering the shipment should be routed through the same auth

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Service Tax – Head Office distributed credit – The input service distributor can distribute the Service Tax paid on input services amongst its various units only if such services are used among the un

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FEMA – Export of Goods and Services- Simplification and Revision of Softex Procedure. – Cir. No. 80 Dated: February 15, 2012 – TMI Updates – Highlights

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FEMA – 80 – Dated:- 15-2-2012 – RBI/2011/12/400 A.P. (DIR Series) Circular No. 80 February 15, 2012 To All Authorised Dealers in Foreign Exchange Madam / Sir, Export of Goods and Services- Simplification and Revision of Softex Procedure Attention of the Authorised Dealers is invited to Regulation 6 of the Notification No.FEMA 23/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, as amended by the Notification No.FEMA 36/2001-RB dated February 2, 2001, in terms of which designated officials of the Ministry of Information Technology, Government of India at the Software Technology Parks of India (STPIs) or at Free Trade Zones (FTZs) or Export Processing Zones (EPZs) or Special Economic Zones(SEZs), had been authorised to certify exports declared through SOFTEX Forms. 2. Considering the spurt in the volume of software exports from India in recent times, the complexity of work contracts involved, the voluminous nature of contract ag

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the values etc. and will thereafter forward the first copy of the revised SOFTEX format to the concerned Regional Office of RBI, the duplicate copy alongwith bulk statement in excel format to Authorised Dealers for negotiation / collection / settlement, the third copy to the exporter and the last copy will be retained by STPI for its own record. Under the revised procedure, the exporters, however, will have to provide information about all the invoices including the ones lesser than US$25000, in the bulk statement in excel format. [The revised procedure for submission of the Softex form and other relevant documents are detailed in the Annex.] 4. The new procedure will be effective initially in STPI Bangalore, Hyderabad, Chennai, Pune and Mumbai with effect from April 01, 2012. Based on the success in these centers, it would be adopted by all the STPIs and SEZ/ EPZ/ 100% EOU/ EHTP/ DTA units by June 2012. 5. Authorised Dealers may bring the contents of this circular to the notice of th

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s are exhausted, the exporter can apply again to RBI for allotment of number. Exporters can use the allocated Softex number either for each invoice or for a group of invoices with same currency of a particular customer. Softex number would be the control number for identifying any of the export transaction. E. Details of information – As per the template in Annexure A, which will broadly cover information as under Name and Address of the Exporter Letter of permission number and date Name of authorized data com service provider Import Export Code number Software Export Declaration Details of Export of Software during the period Period of submission i.e. Month name SOFTEX Number Name of Client Address of Client Country of Export Invoice Number Invoice Date Project Code or Contract or Agreement or PO & Date Type of Software Exported Invoice Currency Offshore Invoice value Details of billings on account of Royalty on Software Packages/products exported as per Annexure B Period of

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py Submission – Software Exports Declaration in summary excel sheet with above details. G. Hard copy submission – Covering letter along with summary sheet declarations and Annexure copies in quadruplicate. Copies of Softex forms, Invoices, SoW, MSA or any other document are not required to be submitted along with summary. H. Additional Information – At the request of STPI, software exporter need to submit additional details about selected sample invoices within 30 days of the request or any reasonable extended time at the discretion of the Director , STPI at the request from the exporter. I. Time Period for additional Information – STPI would do sample audit periodically but not during the period beyond six months, to make the records concurrent with the filing of the Softex. This however, doesn t stop the regulator from asking old records as per FEMA. J. STPI will send the attested Bulk Softex statement in hardcopy to software exporter and soft copy to RBI, Reg

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ormation as under Name and Address of the Exporter Import Export Code number Details of invoice wise collections (Attachment A) SOFTEX Number Name of Customer Invoice Number Invoice Date Invoice Currency Offshore Invoice value Offshore Invoice value realized Date of Realization of exports proceeds Name of the Bank Country of the Bank Details of Foreign Currency Inward Remittance in India(Attachment B). Authorized Dealers will give a control number for this Attachment B, which shall be used by them to settle all the softex forms in Attachment A. Inward remittance in India from overseas bank accounts Name and address of the Authorized Dealer at which the amount has been received Inward remittance details like FIRC number, date, amount and foreign currency Name and address of the Overseas bank from which remittance has been effected Direct Inward remittance in India from customers against exports of software Name and address of the Authorized Dealer at which the amount has been received I

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FEMA – Foreign Exchange Management Act, 1999 – Export of Goods and Services – Forwarder’s Cargo Receipt . – Cir. No. 65 Dated: January 12, 2012 – TMI Updates – Highlights

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FEMA – 65 – Dated:- 12-1-2012 – RBI/2011-12/345 A. P. (DIR Series) Circular No.65 January 12, 2012 To All Authorised Dealers in Foreign Exchange Madam/Sir, Foreign Exchange Management Act, 1999 – Export of Goods and Services – Forwarder s Cargo Receipt Attention of Authorized Dealers is invited to A.P. (DIR Series) Circular No. 27 dated March 2, 2001, in terms of which they may accept Forwarder s Cargo Receipts (FCR) issued by IATA approved agents, in lieu of bill of lading, for negotiation / collection of shipping documents, in respect of export transactions backed by letters of credit, only if the relative letter of credit specifically provides for negotiation of this document in lieu of bill of lading and also if the relative sale

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of repute/IATA approved agents (in lieu of bill of lading), for purchase/discount/collection of shipping documents even in cases, where export transactions are not backed by letters of credit, provided their relative sale contract with overseas buyer provides for acceptance of FCR as a shipping document in lieu of bill of lading. However, the acceptance of such FCR for purchase/discount would purely be the credit decision of the bank concerned who, among others, should satisfy itself about the bona fides of the transaction and the track record of the overseas buyer and the Indian supplier since FCRs are not negotiable documents. It would be advisable for the exporters to ensure due diligence on the overseas buyer, in such cases. 4. Authoriz

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Customs – Customs duty exemption to least developed countries amongst the SAARC countries. – Ntf. No. 99/2011-Customs Dated: November 9, 2011 – TMI Updates – Highlights

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Customs – 99/2011-Customs – Dated:- 9-11-2011 – [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 99/2011-Customs New Delhi dated the 9th November, 2011 G.S.R.801(E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notifications of the Government of India, in the Ministry of Finance (Department of Revenue), No. 51/2008-Customs, dated the 21st April, 2008 [G.S.R. 297 (E), dated the 21st April, 2008] and No. 85/2011-Customs dated 6th September, 2011[G.S.R.662 (E), dated the 6th September, 2011], except as respects things done or omi

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Allied Laws – CAG REPORT : AN EYE-OPENING FOR GST – Article – TMI Updates – Highlights

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 7-11-2011 Last Replied Date:- 30-12-1899 – While the Government is trying hard with opposition parties to implement the Goods and Services Tax from April next year, a study carried out by the Comptroller and Auditor General of India [CAG] has brought out shocking details of the manner in which several states are operating the Value – Added Tax (VAT) system. Of the 23 states studied, it was found that in 10 states, there was a dip in the average growth of revenue during the past – VAT regime against those relating to pre-VAT period. Those included major states like Gujarat and Tamil Nadu. Though the report attributed the loss of revenue despite increase in tax base to tax evasion th

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etail price of goods despite sharp decline in the rate of tax. As a result, the benefit of ₹ 40 crore was illegally retained by the manufacturers and dealers in the VAT chain instead of passing on the gains to consumers. In another major revelation, in some states, tax exempted manufacturers collected taxes from the purchaser of their goods without remitting it to the state. Consequently, the states incurred a sizeable revenue loss as the purchaser of those goods also claimed input tax credit on those transactions. CAG suggested e- filing of returns be made mandatory in GST and taxpayers must provide basic data for scrutiny to establish the trail of transactions leading to input tax credit. Timeframe for scrutiny of tax returns should

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 4-11-2011 Last Replied Date:- 30-12-1899 – The Centre and States recently arrived at a broad consensus on rolling out independent India's biggest tax reforms that will simplify the manner in which corporates, small enterprises and traders will be levied taxes on goods and services. But the main point on which the Government still has to work a lot is the IT Infrastructure . IT infrastructure is going to play a major role in the smooth implementation of Goods and Service Tax. Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani is working on the IT preparedness for GST .IT infrastructure will play a huge role in interstate GST. Inter-state GST (IGST) will be

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he IT infrastructure needed for the smooth rollout of the proposed goods and services tax (GST) regime. The proposed panel would be authorised to take decisions about the size, features and functionalities of such a system (on GST). The proposed panel will also choose the appropriate technology for GST implementation and select the vendor who will deliver it in a time-bound manner. In a recent development towards the IT Infrastructure, the government announced that it will float a special purpose vehicle (SPV) for setting up information technology (IT) infrastructure for the proposed Goods and Services Tax (GST). The SPV, called GST N (Network), will have the Union government, the states and a technology partner as its stakeholders. Unique

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 3-11-2011 Last Replied Date:- 30-12-1899 – When a ray of hope is coming in the successful implementation of Goods and Services Tax (GST),suddenly a momentum changes in favour of those who are strictly opposing the rolling out of the GST. In the last meeting of the Empowered Group of State Finance Ministers on GST to thrash out all pending issues , three major issues arises in front of the Government , with several states giving a thumbs-down to the draft Constitutional Amendment Bill prepared by the Centre. These major issues are: 1. Veto Power: In this meeting , states ruled by political parties other than the Congress came out openly against the proposal to give veto power to the

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Amendment Bill and may be incorporated in GST Legislation. 3. Petroleum Products: Another major issue is relating to the Petroleum products. Finance Minister Mr. Pranab Mukherjee suggestion to include petroleum products within the GST ambit has underlined the need for a fresh discussion paper on the GST. However, most of the states are looking positively towards the inclusion of petroleum products under the GST, but its implementation at this stage is not advisable. In addition to these issues, some of the statements which are given by the Finance Ministers against the current structure of GST are: GST implementation from April next year is not possible [Mr.Raghavji ,MP Finance Minister] States are left with no powers in the proposed draft

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 2-11-2011 Last Replied Date:- 30-12-1899 – The central and state governments moved closer to ushering in a nationwide goods and services tax on April 1, 2011, that will simplify the manner in which corporates, small enterprises and traders will be levied taxes on goods and services. The reform would eliminate multiple indirect taxes levied by states and the central government, that will not only make life easier for most manufacturing companies but also allow products and services to be priced uniformly across the country. On Wednesday, federal and state finance ministers emerged from a meeting saying they had narrowed differences that have delayed implementation. States are worrie

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entation of the goods and service tax (GST) can give a trillion-dollar boost to the economy, taking the total output to $2 trillion in a short span of time. The gain from GST will propel the country from one-trillion dollar economy to two trillion-dollar economy in a short span of time. Well designed GST will see an increase of 2 to 2.5 per cent in the GDP. The government will also float a special purpose vehicle (SPV) for setting up information technology (IT) infrastructure for the proposed Goods and Services Tax (GST). The SPV, called GST N (Network), will have the Union government, the states and a technology partner as its stakeholders. In a presentation given to the empowered committee of state finance ministers today, Unique Identifi

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ering the tax needs to be created. There is a hope that the legislation will be introduced in parliament in the session that begins on July 26. Pranab Mukherjee has set a deadline of August 20 for states to give their final consent on the new duty structure and all other pending issues, including the proposed constitutional amendment. This is to enable him to move the GST Bill in the monsoon session of Parliament. The empowered group of state FMs has decided to meet on August 4 in the Capital to thrash out all pending issues. LAWCRUX TEAM Import export trade, Custom duty, Central excise duty, GST, Indirect tax services, indirect tax, advance license, foreign trade policy, tax planning, e-book, EOU, SEZ, NEPZ, EPCG, DFRC, CBCC, DGFT, DEPB {

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Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 23-10-2011 Last Replied Date:- 30-12-1899 – The actual challenge before the Finance Minister is not of drafting a model GST but of its proper implementation and smooth transition from the prevailing system. The challenges which the Government has to face in introducing GST are as follows: * Rapid increase in Assesses: The dual GST model will widen the tax net by taxing every economic supply in the distribution network. This will lead to rapid increase in assesses. It will require some of the businesses to restructure their distribution network to reduce additional tax burden on the consumer with a view to be price competitive. Though it will generate revenue in a neutral and transparent way, the Government will have to ensure that the ultimate consumer is not burdened with tax beyond his capacity. * Place of Supply: One of the main challenge in introducing in GST is defining the place of supply in respect of certain services a

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from bringing about any change in this structure. In order to enable the Centre and the State Governments to levy GST, the Constitution of India requires amendment to provide for powers to levy and collect GST both by the Union and the States. However, in a landmark decision, the UPA Government has resolved to amend the Constitution to enable states to have the same powers as the Centre in administering the proposed Goods and Services Tax (GST). For the purpose, a new Fourth List is proposed to be created in the Seventh schedule of the Constitution. The Fourth List visualises a governing council headed by Union Finance Ministry and comprising state finance ministers as its members. The council will have overriding powers on issue of indirect taxes. * Improvement in Banking System: In case of destination based principle of taxation, the recipient State will have to levy the tax as per the law of the dispatching State. This is bound to create problems if there is no uniform law and rate

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st track. IT infrastructure will play a huge role in interstate GST. IGST will be collected and passed on the states. It will have to be transferred electronically . * Effective Credit Mechanism: The success of dual GST model will depend on effective credit mechanism to avoid cascading effect of multi-stage taxation in the supply chain. The credit mechanism is the lifeline of GST. As far as Central GST is concerned, there is no difficulty in giving credit of Central GST anywhere in India as is evidenced by success of the present CENVAT scheme. But, in case of State GST presently there are issues in giving credit in relation to inter-State transactions. The challenges posed by GST are no different from what other countries have faced while implementing major tax reforms. Despite the various impediments to the proposed transition, once implemented GST is likely to usher in a more taxpayer friendly regime that could help make various business decisions 'tax neutral' . Until the ti

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