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Content at Glance :-

1.0 News&Updates1. Congress lacks convincing arguments against GST Bill: BibekDebroy, NITI

Aayog member (Exclusive)2. Petroleum products not to be brought under GST: CEA3. GST certainly doable in 2016: ArunJaitley4. Total coverage the essence of GST5. GST: Tax lawyers want dominant role for SRAs6. GST to cost Gujarat government Rs 10,800 crore a year7. Congress counters NDA govt on YouTube over GST Bill8. Shrinking Congress Strength In RajyaSabha Will Make GST Happen:

ArunJaitley9. Delay in GST will deprive consumers of benefits: ICAI Chief Manoj Fadnis10. BJP's stubborn attitude blocked GST bill, says Congress leader P

Chidambaram11. Make the system efficient, effective, flexible and fair12. GST is stuck due to politicking: Mahesh Gupta13. Safety match producers expect introduction of GST14. Lack of GST can stifle Modi’sStartup India dream15. Reduction of Government litigation - providing monetary limits for filing

appeals by the Department before CESTAT/High Courts and SupremeCourt – Regarding

16. It's high time Congress party rethinks its GST stance. Here's why17. India Tax Reform: Government Hopeful Of Passing GST Bill In Next

Parliament Session18. GST, Transgender Rights bills to be tabled in budget session of Parliament,

says Gehlot19. Why GST should be credited in favor of the ultimate consumer20. Notification No.1/2016-Customs21. Notification No. 27/2015-CENT dt. 31-12-2015 - Seeks to amend CENVAT Credit

Rules, 2004


2.0 Case Laws2.1 Case Laws related to Excise

Sr.No. Relevant Section Case Name Issue

1 Section 4 [2015] 64 taxmann.com 244 (SC)Castrol India Ltd.v.Commissioner of Central Excise,Chennai

Valuation

2

Section 5A

"[2015] 64 taxmann.com 241 (Chennai -CESTAT) Ultratech Cements Ltd.v.Commissioner of Central Excise & ServiceTax"

Exemption from ExciseDuty

3 Rule 2(a) read withRule 3

"[2015] 64 taxmann.com 246 (Gujarat)Principal Commissionerv.Tata Chemicals Ltd."

Cenvat Credit

4 Section 2(f) "[2015] 64 taxmann.com 268 (AAR - NewDelhi) AUTHORITY FOR ADVANCERULINGS, NEW DELHI

International Institute of Diamond GradingAnd Research India (P.) Ltd."

Manufacture

5 Section 5A "[2015] 64 taxmann.com 316 (SC)Commissioner of Central Excise, Salemv.Sakthi Sugars Ltd."

Exemption from ExciseDuty

6 Section 37C readwith Section 83 and86 of the Finance Act1994

"[2015] 64 taxmann.com 315 (Allahabad)Jyoti Enterprisesv.Commissioner of Central Excise & ServiceTax"

Service of decisions,orders, summons etc.

7 Section 4 "[2015] 64 taxmann.com 270 (SC)Commissioner of Central Excise, Delhi - IIIv.Hero Honda Motors Ltd."

Valuation

8 Rule 3 "[2015] 64 taxmann.com 272 (Bombay)Commissioner of Central Excise, CustomsAnd Service Taxv.Tarapur Grease India (P.) Ltd"

Removal ofInputs/Capital Goods

9 Section 3 read withSection 14 of theCustoms Act 1962

"[2015] 64 taxmann.com 273 (Mumbai -CESTAT) Commissioner of Central Excise,Mumbaiv.USV Ltd."

Valuation

10 Rule 2(a) "[2015] 64 taxmann.com 282 (AAR - NewDelhi) AUTHORITY FOR ADVANCERULINGS, NEW DELHIGSPL India Transco Ltd."

Cenvat Credit


11 Rule 6(2) "2015-TIOL-2786-CESTAT-MUMBHAIRAV SYNTHETICS PVT LTDVsCOMMISSIONER OF CENTRAL EXCISE,THANE-I"

Simultaneous availment ofNotfn. 29/2004-CE &30/2004-CE

12 Section 2(f) "2015-TIOL-2837-CESTAT-MUMCOMMISSIONER OF CENTRAL EXCISE,PUNE-IIVsM/s ANWAR OILS, KOLHAPUR"

Manufacture

2.2 Case Laws related to Service Tax

Sr.No. Relevant Statute Case Name Issue

1 (2015) 22 CCHST 1485 KolTrib M/S.MOTHER INDIA CONSTRUCTIONvs.COMMISSIONER OF CENTRALEXCISE & SERVICE TAX, HALDIA

Demand

2 Section 106 "2015-TIOL-2905-HC-MAD-ST M/sHOTEL SOUTHSON PVT LTDVs1) CUSTOMS, EXCISE SERVICE TAXAPPELLATE TRIBUNALNO.26, HADDOWS ROAD, FIRST FLOOR,SHASTRI BHAVAN ANNEXECHENNAI"

VCES Scheme

3 "2015-TIOL-2822-CESTAT-AHMM/s ADANI PETRONET PORT PVT LTDVsCOMMISSIONER OF SERVICE TAX,AHMEDABAD"

Credit for inputs etc usedfor construction of Jetty

4 Section 78 "2016-TIOL-12-CESTAT-MUM M/sBHARAT FORGE LTDVsCOMMISSIONER OF CENTRAL EXCISE,PUNE-III"

Penalties

5 Rules 2(I) "2016-TIOL-27-CESTAT-MUMMAHINDRA CASTING LTDVsCOMMISSIONER OF CENTRAL EXCISE,PUNE I"

6 "2016-TIOL-37-CESTAT-MUMCOMMISSIONER OF CENTRAL EXCISE,PUNE-IVsM/s SUNNY ENTERPRISES"


2.3 Case Laws related to Customs

Sr.No.

RelevantStatute Case Name Issue

1 "2015-TIOL-2926-HC-MUM-CUS M/sEXCEL PRODUCTION AUDIO VISUALSPVT LTD AND ANOTHERVsTHE UNION OF INDIA AND OTHERS"

Adjudication Order

2 Rules 5 & 6 "2016-TIOL-23-CESTAT-MUM M/sRICO GEMS CORPORATIONSHRI HITESH ISRANIM/S TELEBRAND INDIA PVT LTDSHRI NARENDRA MEHTAVsCOMMISSIONER OF CUSTOMS (IMPORT),MUMBAI"

Valuation

AP Institute For Training and Learning Pvt Ltd Go to Content at Glance 5

1.0 News& Updates

1. Congress lacks convincing argumentsagainst GST Bill: BibekDebroy, NITI Aayogmember (Exclusive)

New Delhi: BibekDebroy, the renowned economistwho is presently the member of NITI Aayog, is ofthe opinion that Congress is avoiding a debate onGST Bill in parliament because the party lacksconvincing intellectual arguments against the bill.

In an exclusive interview with indiatvnews.com,BibekDebroy candidly articulated his views on ahost of issues ranging from GST, parliamentarylogjam, rift with Gandhi family, political motivebehind intolerance debate, state of Indian economy,how NITI Aayog is different from PlanningCommission to the single most worrisome challengethat the Modigovt is facing.

In what appeared to be candour at its best, Debroyconceded that both Modi government and NITIAayog have failed to disseminate its achievementsto the common man.

Blasting Congress and left-leaning intellectuals ofpracticing ‘intolerance’ in academic circles since thetime of independence, BibekDebroy tried to drivehome the point by giving three specific examplesfrom past of ‘intolerance for ‘alternative ideology’.

The renowned economist exhorted the youths not tolose hope in life as most of the time thedisappointment is actually triggered by somethingthat is extremely temporary.

Here goes full text of the interview:

GST & Parliamentary logjam:

Q: According to some media reports, the Congresswants GST to be implemented in 2017 only becausepast experience suggests that inflation goes up infirst 2 years after its implementation. So theCongress, according to these reports, is assumingthat after two years i.e. in 2019, when the countrygoes to polls, the inflation would be higher and itwill help Congress electorally. How true is that?

BibekDebroy: Firstly, GST is not something thathappens overnight. It’s beginning of a process. Inmost countries that have implemented somethinglike GST, it has taken more than 10-15 years tocomplete the process. The question is the rate

because if it’s revenue neutral rate then there shouldlogically be no increase in prices. The differencebetween GST and the present form of taxation is thattoday the form of taxation is hidden. In fact,because the present form is inefficient, it leads tocost-cascading effects.

In the slightly longer run, the prices should actuallycome down if it’s a revenue neutral rate. To the bestof my understanding, the Congress opposition ismore about 1% surcharge, the cap of 18% and theappellate process.

Q: But the Congress leaders have openly said thatthis is not only about the technicalities related to theGST Bill. Anand Sharma, while addressing FICCIAGM recently, said that the Prime Minister hasrealised after 18 long months that there is anopposition in the country. So there are obviouslyissues beyond these technicalities.

BibekDebroy: If you are asking whether Congress isopposing GST because of issues that have nothing todo with GST then I am prepared to believe thisotherwise if there is a serious issue about GST thenwhy not debate it in Parliament?

Q: What, according to you, is stopping Congressfrom discussing all this in Parliament?

BibekDebroy: You should ask this question to theCongress leaders. But my hunch is that the Congressfeels that since it does not have the numbers, nordoes it have the convincing intellectual argumentsagainst GST because they themselves had talkedabout the GST earlier, they do not want to discuss itin Parliament.

Q: Congress accuses govt of misleading the countryon GST because, they say, the Bill is actually notready. They point out that even if this bill is passedin the parliament, it needs to be ratified by 50% ofstate legislatures and after that the parliament needsto amend three more laws before GST is actuallyrolled out. Their charge is that there is no clarity onall these amendments.

BibekDebroy: That, indeed, is the point. But let’sdiscuss the specific issues that have been pointedout.

Of course, this 1% surcharge is undesirable but whowanted this? That 1% was wanted by two majorproducing states namely Tamil Nadu andMaharashtra. I don’t think Finance Ministry wantedthat 1 %. And why these two states wanted 1% is


because they were afraid of revenue losses becausewith transition to GST (and even VAT), the baseshifts from ‘manufacture’ to ‘consumption’.Imagine a situation where you scrap that 1 %, whenthe GST goes to the state assemblies for ratification,it is perfectly possible that the state assemblies maysay we’ll not ratify it. They may say that we’ll haveGST but we’ll not abolish entry tax. The ideal GST isone where all indirect taxes go.

Similarly, do you want that 18% cap to bementioned in a constitution amendment bill? Thenyou are stuck with that and every time you want tochange that 18%, you’ll have to make anamendment to the constitution. Everyone wants theGST rate to be lower but what is the revenue neutralrate depends also on which items are included andexcluded. The more items are included to the GST,the more will be the revenue neutral rate. And, it’sthe GST council that will decide the revenue neutralrate. The bottom-line is – I don’t think it’s anintellectual argument et al.

Q: How essential is this GST for economic growth ofIndia? The Congress says Modigovt’s desperationfor GST makes them wonder if the govt could assurea GDP growth of 11% with its roll-out.

BibekDebroy: As I said earlier, GST is the beginningof a process. Any country that has implementedGST or an equivalent of GST has seen that with aperiod of time, because the inefficiency gets weededout, there is an increment of 1-1.5% to the GDPgrowth. But if anyone suggests that simply becausethe GST process starts on Aril 1, 2016, the GDPgrowth in 2016-17 will go up by 1% then, of course,that’s nonsense. GST is desirable because it’sdesirable. It’s not desirable because suddenly fromnext year, the GDP growth rate is going to go up.

(Ref -http://www.indiatvnews.com/business/india/bibek-debroy-niti-aayog-gst-bill-india-tv-exclusive-interview-20780.html)

2. Petroleum products not to be brought underGST: CEA

Petrol and other petroleum products would not bebrought under the GST regime for some time afterits roll out, Chief Economic AdvisorArvindSubramaniam said today.

“Constitutionally petrol and other petroleumproducts will be within the GST system. But itwould be out of the GST dispensation after its

implementation for some time,” he told reporters onthe sidelines of an event organised by ISI here.

He said that the GST council would decide for howlong these products would be out of the newtaxation regime.

“Even after GST is rolled out, petrol and otherpetroleum products would continue to be taxed inthe present way both by the Centre and states,” hesaid.

Asked about the roll-out of GST, he said that UnionFinance minister ArunJaitley had said that thegovernment was hoping that the GST Bill would bepassed soon.

“All depends on when the Constitution amendmentbill gets cleared,” Mr. Subramaniam said.

Outlining the benefits of GST, he said that it wouldgive the country a wider tax base and would gavean impetus to `Make in India’ drive.

Keywords: ArvindSubramaniam, GST regime, ChiefEconomic Advisor, Petrol and other petroleumproducts

(Ref -http://www.thehindu.com/business/petroleum-products-not-to-be-brought-under-gst-says-chief-economic-advisor/article8034152.ece)

3. GST certainly doable in 2016: ArunJaitley

The Finance Minister also added that he was in"continuous touch" with the Congress party in a bidto persuade them to cooperate.

Rolling out the ambitious Goods and Services Taxesregime is “certainly” doable in 2016, FinanceMinister ArunJaitley said today, adding that he is in“continuous touch” with the Congress party in a bidto persuade them to cooperate.

“I hope that in the next session (of Parliament), theGST (Goods and Services Tax) will make headway,”he said.

“After all, it was a Bill brought by them (Congress).For political reasons, they have done a volte-face butthey should not be doing it indefinitely,” Jaitley toldPTI in an interview.

“I am in continuous touch with them and I intendcontinuing that. It is part of my job to continue topersuade them,” he added.


GST, which seeks to simplify and harmonise theindirect tax regime across the country with a singleuniform rate, has been stuck for many years in apolitical gridlock.

While the previous UPA regime failed to get itpassed in Parliament due to opposition from the BJPand some other parties, Congress has now refusedto support the bill proposed by the NDAgovernment in its present form.

Asked about the government’s target to roll out GSTfrom April 1, 2016, Jaitley said it was not like incometax and therefore it was not necessary to bring it inforce from the beginning of a new financial year.

“GST is not an income tax (measure) and it does nothave to come on only on first April of every year. Itis a transactional tax and so it can come even in themiddle of the year,” he said.

Jaitley said the passage of GST remains one of hiskey priority areas for the New Year, along withrationalising the direct taxes and further easing ofprocess for doing business. “I had hoped that wecomplete the process for GST this year. But it wasplain and simple obstructionism of the Congressparty which has prevented that.

“In fact, a national party adopting a disruptionistrole and getting sadistic pleasure in stalling a reformwhich could add to India’s GDP is adisappointment,” he said.

To a specific query on whether the GST was doablein 2016, he said, “It certainly is“.

The GST is expected to broaden the tax base andresult in better tax compliance with a robust I-Tinfrastructure.

The government also hopes it will herald a seamlesstransfer of input tax credit from one state to another,while an in-built mechanism has been envisaged toincentivise tax compliance by traders.

(Ref -http://www.thehindu.com/news/national/gst-certainly-doable-in-2016-in-constant-touch-with-congress-arun-jaitley/article8037254.ece)

4. Total coverage the essence of GST

Keeping out major sectors defeats the very purposea uniform tax is meant to serve

The Goods and Services Tax, which has been in themaking for over nine years, is undoubtedly the mostsignificant and transformative piece of tax reformthat India has seen since Independence. If India is tosucceed in reaping the full benefits of GST, it iscritical that we get the design right.

A crucial aspect of design that impacts on theefficacy of GST is the scope and coverage of GST.

Compelling arguments

There has been a long contention between theCentre and the States about inclusion/exclusion ofcertain goods and taxes from the ambit of GST, withthe States insisting on the exclusion of key sectorssuch as petroleum, tobacco, alcohol and real estate.

The States’ resistance to the inclusion of thesesectors is primarily on account of fear of losing theirfiscal autonomy and revenues from these sectors.

Historically, the petroleum, alcohol and tobaccosectors have been “cash cows” for governmentrevenues. State exchequers rely heavily on taxingthese sectors.

However, there are compelling arguments againstthe exclusion of these sectors from GST.

The most important argument against excludingthese sectors from GST is that any exclusion willseriously hamper the advantages to be derivedtherefrom. GST is expected to provide the benefits ofsimplification of tax regime, broadening of tax base,elimination of tax cascades, enhancing exportcompetitiveness, ensuring greater regional equity,and improvement in transparency.

A tax design characterised by comprehensivecoverage is a prerequisite for realising theseadvantages.

At present, the Constitutional Amendment Billcovers all goods and services, except alcoholic liquorfor human consumption. Further, in the case ofpetroleum and petroleum products, it has beenprovided that these goods shall not be subject to thelevy of GST till a date notified on therecommendation of the Goods and Services TaxCouncil.

Therefore, it can be said that the alcohol sector hasbeen explicitly put outside the purview of GST;petroleum and tobacco are likely to be covered in


future; whereas there is absence of clarity oncoverage of the real estate sector.

All the sectors to be excluded, that it, real estate,alcohol, petroleum and tobacco, are large sectors ofthe economy. Their exclusion would lead to anerosion of the tax base for GST, adversely impactingthe Revenue Neutral Rate (RNR) and raising the taxburden on other sectors.

Hindering the objective

The Report on Revenue Neutral Rate and Structureof Rates for the Goods and Services Tax (RNRReport) specifically mentions that there is a verystrong association between ‘rate of tax’ and ‘level ofcompliance’. The report observes that a 1 percentagepoint increase in the standard rate worsenscompliance by 1.22 percentage points.

Therefore, any increase in RNR due to non-inclusionof these sectors may hamper the level of complianceunder GST and mar the very objective thereof.

Further, a key objective of GST is to curb taxcascading. The exclusion of any sector would resultin distortion of the input credit chain of GST,resulting in a cascading of taxes and perpetuatingthe inefficiencies in the economy under the currentindirect tax regime and making these sectorsuncompetitive.

Another detrimental impact of excluding thesesectors from GST would be on the transparency thatcan be instilled by introduction of GST. One of thekey features of GST is that it can complementmeasures taken by government to curb blackmoney.

The input credit mechanism proposed in GST has anelement of self-policing as it will create a third partyreported paper trail of transactions between firmsalong the entire supply chain. This, in combinationwith a moderate tax rate, promises to be the mosteffective deterrent to evasion.

A good opportunity

It is well known that sectors such as real estate andalcohol are plagued by lack of transparency and arehavens for tax evasion. For this reason, manyinternational jurisdictions such as Australia,Canada, New Zealand and South Africa cover thesesectors in their VAT/GST. It is important to notethat Malaysia, which recently introduced GST,covers commercial real estate transactions within

the ambit of GST. In this background, if real estate,alcohol and other sectors are left out of the purviewof GST, then the opportunity of developing atransparent and clean tax system would be lost.

Conversely, including these sectors in GST willresult in the many advantages GST is supposed tobring in. Hence, in the larger interests of thecountry, there is a need to reconsider the exclusionof these sectors from GST.

A GST that excludes major sectors will defeat thevery purpose it is intended to serve. The concernsraised by States regarding loss of revenue andautonomy are misconceived. As observed in theRNR Report, it is possible to levy some basic tax onthese sectors within GST and allow States to levytop-up sin taxes. Therefore, the concern of States canbe addressed without hindering economic reform.

(Ref-http://www.thehindubusinessline.com/opinion/total-coverage-the-essence-of-gst/article8037518.ece)

5. GST: Tax lawyers want dominant role forSRAs

New Delhi, December 29In the run-up to introduction of the GST, the AllIndia Tax Advocates Forum (AITAF) has askedFinance Minister ArunJaitley to ensure that StateRevenue Authorities (SRAs) are allowed to play adominant role for effective and efficientadministration of the new tax regime under theGST.AITAF president MK Gandhi said since SRAs hadgreater expertise in administering a diverse taxadministration such as VAT and CST, the SRAsshould play a major role in the administration of thenew tax regime under GST.

(Ref -http://www.tribuneindia.com/news/business/gst-tax-lawyers-want-dominant-role-for-sras/177053.html)

6. GST to cost Gujarat government Rs 10,800crore a year

GANDHINAGAR: The Gujarat government hasdemanded incremental compensation from theCentre in proportion to the revenue loss the stateexchequer is likely to suffer when the goods &service tax (GST) regime comes into force.

An official report prepared by the state commercialtax department and submitted recently to the Unionfinance ministry says Gujarat will directly lose


Rs10,800 crore per annum from 2016-17, if the GSTregime is implemented. Moreover, lack ofcompensation for the loss of 2% central sales tax(CST) will further add to the state's revenueshortfall.

Earlier, the Gujarat government had raisedobjections to the proposed formula for states' sharein GST. The state government's argument was thatGujarat being a manufacturing state will face majorrevenue losses as GST is based on the principle oftaxation at the place of consumption, and not at theplace of manufacture.

"Being a manufacturing state, Gujarat may lose itscurrent income and may not be able to matchcurrent revenue growth projections. The state'smajor income is from textile, pharma, chemical, autoand ancillary products, food items, engineering etc,for which local consumption is limited," said a stategovernment officer.

The state government had, therefore, demanded anincrease of 2% or minimum 1% in the proposed GSTbut it is now clear that Gujarat's suggestion will notbe accepted. Hence, the state government hasdemanded incremental compensation for loss ofrevenue on account of GST, said officials.

Gujarat finance minister, Saurabh Patel, had pushedhard for additional tax rate in the GST regime tomake up for the state's revenue loss.

"The central government has said that our loss willbe compensated by service tax, but there are noprojections available on it. However, the Centre hasassured us that any loss to the state will becompensated," said the minister.

A senior state government official said that earlier,the Centre had agreed to give 1% additional taxrevenue to Gujarat along with some compensationfor loss of revenue."But now we have beeninformally told that there will be no special statusfor Gujarat, or any other manufacturing state," saidthe official.

"Hence, we have demanded compensation inproportion to the revenue gap with incrementalvalue, which we normally get in taxes every year.But the central government has not given any clearcommitment on this. So it's a matter of great concernfor the state," the official said.

(Ref -http://timesofindia.indiatimes.com/business/india-business/GST-to-cost-Gujarat-government-Rs-10800-crore-a-year/articleshow/50376866.cms)

7. Congress counters NDA govt on YouTubeover GST Bill

The Congress took to YouTube on Monday tocounter the BJP on the goods and services tax (GST)bill after finance minister ArunJaitley told newsagency PTI that the government’s top priority for2016 will be to pass the proposed law.In a video, titled Principles versus Opportunism, theCongress picked old clippings of Prime MinisterNarendraModi, who was then Gujarat chiefminister, and Madhya Pradesh chief minister ShivrajSingh Chouhan to show how the BJP had opposedthe landmark bill for a common national tax regimefor a uniform market by replacing myriad locallevies.The video includes party vice-president RahulGandhi’s speech in Bangalore where he spoke aboutthe Congress’s three key objections to the currentbill. He is heard saying in the video: “We want a capof the rate of tax to save you (the people).”The Congress has been strongly opposing the GSTbill, steamrolling all efforts by the government topush through the legislation in Parliament. EvenPrime Minister Modi’s first-ever meeting withCongress president Sonia Gandhi to hammer out aconsensus on the bill during the just-concludedwinter session of Parliament failed to break thedeadlock.As the principal Opposition party decided to cornerthe government on different other issues, the GSTnegotiations went on the backburner.Finance minister Jaitley, a key negotiator with theOpposition on the GST, told PTI on Sunday that thebill and the ease of doing business are key areas forthe government in the coming year.The NDA government is set to miss its deadline ofApril 1, 2016, to roll out the GST. But there areindications that it is gearing up to start it anytimenext year with support from the Opposition.Other than the Congress, the BJP says most of theparties are on board on the GST.

(Ref -http://www.hindustantimes.com/india/congress-counters-nda-govt-on-youtube-over-gst-bill/story-h4jpyguEvSwpS8myxFUAgP.html)

8. Shrinking Congress Strength InRajyaSabhaWill Make GST Happen: ArunJaitley

NEW DELHI: Hitting back at Congress party'sTrinity remarks, Finance Minister ArunJaitley today


said Gods don't vote in Parliament, and Goods andServices Tax (GST) will happen as the strength ofmain opposition party is "shrinking" in theRajyaSabha.

"Congress has said even Trinity of Gods cannotmake GST happen soon. God's don't vote inParliament but MPs do. Shrinking strength ofCongress in the RajyaSabha can make it happen,"the finance minister told reporters in New Delhi.

He said Congress would lose on numbers in thenext round of bi-annual elections for the RajyaSabhaand even the number of UPA-nominated supportersin the House would come down.

Congress leader Anand Sharma had recently saidthe April 1, 2016 deadline for rolling out Goods andServices Tax (GST) would not be met "even if thetrinity of Gods - Brahma, Vishnu and Mahesh -descend on earth" because the government was yetto complete preparatory work for the new indirecttax regime.

The Constitution Amendment Bill to roll out GST isstuck in the RajyaSabha where the ruling NDA doesnot have a majority of its own. The bill is beingopposed by Congress although many otheropposition parties are on board.

Congress is seeking three changes in the bill,including a constitutional cap on the GST rate, tosupport it.

Mr Jaitley said most of the states are on board forGST and it is possible to implement GST even in themiddle of the year.

"A part of obstructionism (on part of Congress) wasto stop growth. Otherwise there cannot be volte faceof this kind and secondly you cannot concoct thosethree reasons which never existed.

"There is a serious ideological gap between the highcommand and mid-command. There seems to havean ideological gap because the mid-command in theCongress always embarrassingly implemented thedirection of the high command," Mr Jailtey said.

He added: "Ultimately, in the congress party highcommand has its way".

The other two changes sought by Congress in theGST bill are removal of one per cent additional taxon inter-state transfer of goods and a Supreme Courtjudge headed dispute resolution panel.

(Ref -http://www.ndtv.com/india-news/shrinking-congress-strength-in-rajya-sabha-will-make-gst-happen-arun-jaitley-1260735)

9. Delay in GST will deprive consumers ofbenefits: ICAI Chief Manoj Fadnis

NAGPUR: The delay in implementation of the GSTBill will deprive the consumers of its benefits,Institute of Chartered Accountants of India (ICAI)president Charted Account Manoj Fadnis saidtoday.

"The consumers are at a loss as they will not be ableto avail the benefits of one common tax in theprocess till the time it (GST) is introduced," Fadnissaid while replying to a question at a pressconference here.

He said there will be one common tax instead ofnumber of indirect taxes.

Fadnis said the ICAI, an apex body constitutedunder Chartered Accountant Act, has initiateddisciplinary action against CA members forallegedly indulging in wrong practices and everyyear it receives against around 200 to 250 members.

He said ICAI currently has a membership base of 1.5lakh and has 8.75 students enrolled with it, out ofwhich more than 25,000 students join the professionevery year.

Fadnis said the ICAI was extending support to theIndian Railways in reforming accounting systemmoving from cash to accrual system of accounting,after assessing the tremendous positive on nationalfinancial reporting.

The Railways approached the ICAI to undertake thepilot study project on study of existing budgetingand costing system and proposal for outcomebudgeting and integrated cost accountingarchitecture in the line of Indian budget system.

The concept paper on outcome budgeting has beensubmitted to the Railway authorities, WIRC of ICAIchairman Sunil Patodia said.

(Ref -http://economictimes.indiatimes.com/news/economy/policy/delay-in-gst-will-deprive-consumers-of-benefits-icai-chief-manoj-fadnis/articleshow/50381812.cms)


10. BJP's stubborn attitude blocked GST bill,says Congress leader P Chidambaram

NEW DELHI: Former finance minister PChidambaram on Friday said the BharatiyaJanataParty-led central government was too stubborn toaccommodate views of the opposition with regardto the GST bill.

"Many important legislations remain stalled inParliament. The Congress and some other partieshad objected to some provisions of the GST bill onweighty and well-reasoned grounds," he said.

"The government was outright dismissive, until thechief economic adviser virtually endorsed two of thethree principal objections and made norecommendation on the third," Chidambaramadded.

"Yet, the government has not been able to find a wayto accommodate the views of the opposition andpass the GST Bill. I am afraid the government hasonly to blame itself and its stubborn and unbendingattitude," he added.He even said that the government at the Centrefailed to deliver on its promises on all counts.

"The government had confidently predicted that theeconomy will grow at 8.1 to 8.5 per cent in 2015-16.Many promises of the government — more jobs,greater investment and quicker infrastructuredevelopment — were premised on a high growth ofGDP," the senior Congress leader said.

"I am afraid none of the promises has materialized.On the contrary, 2015 has ended on a sombre andsubdued note," he added.

"For the whole of 2015-16, GDP growth is not likelyto be higher than 7 to 7.3 per cent, which means thatit will be the same as, or lower than, in 2014-15. Theeconomy is stuck in a groove," Chidambaram said.

(Ref -http://timesofindia.indiatimes.com/india/BJPs-stubborn-attitude-blocked-GST-bill-says-Congress-leader-P-Chidambaram/articleshow/50407160.cms)

11. Make the system efficient, effective, flexibleand fair

A well-designed GST regime will significantlyreduce Indian businesses' cost base from that in thecurrent system, as GST will not become a cost to theregistered businesses

The introduction of a goods and services tax (GST)in India will be far more than a mere reform of theIndian indirect tax system; it will also be verysignificant economic reform. In a well-designed GSTregime, only the expenditure on final privateconsumption should be taxed.Registered businessesshould charge GST on taxable goods and servicesthey provide, and claim credits for GST they pay ontheir purchases, including capital purchases.

A well-designed GST regime will significantlyreduce Indian businesses' cost base from that in thecurrent system, as GST will not become a cost to theregistered businesses. Indian businesses will becomemore competitive internationally as a result.

The OECD recognises that a key feature of a well-designed GST is a system that is efficient andeffective. That is, compliance costs for business andadministration costs for government should be keptto a necessary minimum.

Here, we focus on one aspect of the complianceburden being considered under the proposed IndianGST and check out whether this is the bestinternational practice.

Under the proposed GST regime, all GST registeredbusinesses are required to uplift all supplyinformation through the goods and services taxnetwork (GSTN) portal by the 10th day followingthe close of a month. In order to claim an input taxcredit, the purchaser must upload all purchaseinformation by the 15th day following the close ofthat month. A credit will only be available where thepurchaser's invoice matches the sales invoiceuploaded by the supplier and the GST has beenpaid. The GSTN will notify the purchaser of amismatch.

Under this approach, it will be almost impossible fora business to claim its credit entitlement on a timelybasis. The delay in claiming credits and the costsassociated with managing this system alone willunnecessarily increase the working capital ofbusinesses, eroding one of the benefits of moving toa GST.

Another feature of the proposed credit system isthat all information regarding credit notes must beuplifted through the GSTN by the September 30,following the year of income. Unless disputes areresolved by that date, no GST credit will be availableto the supplier if the invoice value is reduced. Thepurchaser on the other hand will almost certainly beentitled to a credit for the reduced amount. The


consequence would be an increase in costs/cashoutflow where details are unable to be reconciled,leading to a GST cost or repayment of creditsincorrectly claimed with interest payable to thegovernment.

We note that no other developed country with avalue added tax or a GST system has such a creditmatching system. If the Indian authorities areconcerned about fraudulent or even the incorrectclaiming of refunds or credits, there are better andmore sophisticated ways of managing those risks,including sophisticated approaches to gatheringintelligence and enforcement.

The proposed credit matching system will almostcertainly cost Indian businesses significantly inunclaimed credits and additional compliance costs.Further, the cost for administering this system togovernment will be significant.

In our view, it is likely the revenue at risk fromfraud or credit claims made in error is significantlyless than the combined business and administrationcosts associated with the proposed system. It is alsoinconsistent with a key OECD feature of a well-designed GST system; that the system be efficient,effective, flexible and fair.

(Ref -http://www.business-standard.com/article/opinion/make-the-system-efficient-effective-flexible-and-fair-116010300687_1.html)

12. GST is stuck due to politicking: MaheshGupta

Interview with President, PHD Chamber ofCommerce & Chairman, Kent RO Systems

SubhayanChakrabortyJanuary 4, 2016

Mahesh Gupta, chairman of Kent RO Systems,recently took over as the president of the PHDChamber of Commerce and Industry. He tellsSubhayanChakrabortythe government should takenote of the historic lows in international crude pricesand demand, and engage in greater publicspending. Edited excerpts:

Why do you think the goods and services tax (GST)Bill could not be passed in Parliament?

The general atmosphere in the country is to blame,which provides scope of politicking on every issue.One reason for that is, we have too many elections at

too many points of time. So the country is in acontinuous election mode throughout the year.

Why are talks not progressing on the issue in spiteof industry reaching out to the principal opposition?

Legally speaking, the elected government shouldface the onus of responsibility for not being able topass the Bill. However, the opposition's refusal toco-operate is also not right. Having said that, thecomplete role reversal of those in favour of GST andthose opposing it is troubling.

The government is confident of passing the GST Billin 2016. It has said a draft model law will befinalised for states by January...

Even if Parliament succeeds in passing the GST Billin the Budget session, it will take another fourmonths to properly operationalise the same.Although we believe the states won't object to thedraft law, a lot still needs to be done before itbecomes a reality.

What would be your comments on the arbitrationBill, which transfers all commercial disputespending before civil courts and high courts to therelevant commercial divisions?

International disputes are never resolved in Indiabecause our arbitration laws are very old, losing outto places like Singapore, London. The newarbitration law will reduce litigation figures in thecourts, because arbitration is a better method ofresolving disputes. In most cases, it involvesoperational disputes and breach of contract. Time isof essence and the lengthy legal process hampersthat.

A recent report by CRISIL says India will need Rs 31lakh crore in the next five years to suitably addressits infrastructure needs. Where will this hugeamount come from?

India needs to maintain high foreign domesticinvestment figures for that to happen.

Isn't the slack in investments by domestic playersalso to blame?

Domestic investments can pick up only whendomestic savings grow, in turn boosting domesticdemands. More inflationary pressure is the need ofthe hour. The government needs to boost publicsector spending, which will directly lead toconsumer demand rising. We are sleeping while


international prices and crude oil prices are still athistoric lows.

What would be your major recommendations to thegovernment for the next Budget?

Consumer demand tops the list. One way of doingthat is by raising the exemption limits in income taxwhile buying real estate to 500,000 from the current100,000. Greater ease in doing business is alsoimportant.

On housing, isn't it time real estate companiesstopped holding on to unsold inventories, withmany empty units awaiting customers?

Builders face certain loss in clearing inventories atthis point owing to low demand. Also, thegovernment will recover any loss it incurs from thereduced income tax earning through increasedcentral excise and service taxes when theconstruction industry booms.

India's merchandise exports declined 24 per cent inNovember 2015. While international demand isblamed, what solid steps can bring about aturnaround?

There are good times in business and there are badtimes. Industry should accept this cyclic nature,which offers an opportunity to look within andintrospect on ways to maintain growth but notcompromise on quality.

(Ref -http://www.business-standard.com/article/economy-policy/gst-is-stuck-due-to-politicking-mahesh-gupta-116010400028_1.html)

13. Safety match producers expect introductionof GST

In distress:A woman working at a match factory atKovilpatti in Tuticorin district.— Photo: N. Rajesh

Safety match manufacturers are looking forward tothe introduction of goods and service tax (GST) Bill,which will bring them the much-awaited relief.

In April last year, Prime Minister NarendraModimade the announcement on passing the GST billduring the winter session in parliament in 2015. Butdays had passed by and stakeholders of thisindustry were still keeping their fingers crossed,according to J. Devadoss, secretary, South IndiaMatch Manufacturers Association, Kovilpatti.

Once the bill was introduced, the match producers,who had been facing a downtrend in the market,would heave a big sigh of relief. The introduction ofGST would certainly minimise the expenditureburden and more importantly evasion of duty andtax would also come down significantly, he told TheHindu on Friday. Currently, the manufacturers wereliable for excise duty, sales tax, service tax and alsotax deduction at source. If the GST wasimplemented, the manufacturers need not have topay such duty and taxes to market matches.

In the present scenario, the manufacturers had topay six per cent excise duty on total goodsmanufactured through semi mechanised units, 12per cent duty for matches manufactured by fullymechanised units and incur a five percent sales tax.Besides, service tax was also levied based on utilityof logistics. Not only was the domestic market, theexport trend also not enterprising as stakeholderscould hardly compete in the international market.Moreover, Mr. Devadoss said the matchmanufacturing industry was at its peak during 1996.

But with the advent of lighters and automaticstrikers in gas stoves, its consumption reducedconsiderably after 1996. Much to the dislike ofmanufacturers, this industry was removed from thesmall scale sector and included in the large scalesector this year, he said.

(Ref -http://www.thehindu.com/news/national/tamil-nadu/safety-match-producers-expect-introduction-of-gst/article8063162.ece)

14. Lack of GST can stifle Modi’sStartup Indiadream

Based out of Rajasthan, PritamMaheshwari is afurniture manufacturer who retails his goods on ane-commerce portal in India. When he ships hisproduct to Bengaluru, he has to pay Value AddedTax (VAT) in Rajasthan and entry taxes in Gujarat,Maharashtra and Karnataka. Although the taxstructure drawn by the e-commerce portal does notshow up on the invoice, there is enough evidencewhich suggests that this complicated tax structurehas become a ruse for State governments to harass e-commerce companies (see chart). The classic case ofharassment begins when the local governmentnudges e-commerce businesses to collect tax fromvendors like PritamMaheshwari. In this case, it isthe Karnataka State government which contendsthat the e-commerce company is a commission agent


since it stocks multiple products and draws up billsof purchase in their fulfillment centres.The e-commerce company, on the other hand,contends that Pritam has, in fact, paid his local taxes,and educates the State government by quoting FDIrules. These clearly stipulate that an e-commercebusiness in India is just a marketplace or a facilitatorof a sale and, therefore, cannot tax on behalf ofsellers. To make matters worse, the government ofeach State has its own entry tax, which makes itcomplicated for any vendor shipping acrossmultiple States. Therefore, the retail revolutionwhich every corporate spoke about in the year 2006is yet to come to fruition. Blame it on the taxes. Thetotal taxes can be anything from 25 to 30 per cent ofthe retail price of the product, making it the mostoutdated and high-cost tax system for a business.We are all pining for a Goods and Services Tax(GST), which is a single origin tax that can takeaway all the above qualms and misgivings.Wake up! We need simplicityOne only has to see the long line of trucks piled upoutside a border checkpost. The borders ofMumbai, Tamil Nadu and Karnataka are a case inpoint for a generation waiting to see efficiency creepin to the transportation industry. Thanks to thecurrent tax complications, a generation of new-agebusinesses like Flipkart, Snapdeal, Shopclues andShopmatic will continue to be hassled by localgovernments to pay up unnecessary taxes to boostup State revenues. Therefore, the GST shouldbecome a reality for the NarendraModi-led BJPgovernment or face being ignored by the globalinvestor community which could easily overlookIndia’s promises as a ‘Startup Nation’. Indianinfrastructure needs a massive overhaul simplybecause the cost of doing business is very highbecause of taxes.We will see substantial growth in the supply chainof this country with the implementation of GST.With a simplified tax structure transportation willbecome efficient,saysNihal Kothari, Executive Director at Khaitanand Company, a law firm.“Documentation is the biggest challenge in thecurrent structure, because of a tax at every level ofmanufacturing, distribution and retailing,” saysPreetiKhurana, Chief Editor at ClearTax, atechnology company simplifying tax payments.Currently, the Opposition in both Houses ofParliament wants certain items to be out of thepurview of GST. The Opposition is also yet todecide the rate of GST. The standard rate is set to bebetween 16 and 20 per cent. But policy-makers areyet to agree upon a rate. Nihal adds that there willbe two levies. The first will be a Central government

levy on transport of goods, and the second, a Stategovernment levy on services. Hopefully, if it comesthrough, e-commerce companies need never behassled by any State government. In this structure, abusiness has to pay a single tax to the Centre. Later,the Centre compensates the States up to 60 per centof the total tax collected.The benefits of GSTScaling up by organising the transport industry:According to a report by Ernst & Young and theRetail Association of India, road-basedtransportation is a market opportunity worth $13.5billion in the year 2015. This number is expected togrow up to $19 billion by 2017. With 85 per cent ofIndian transportation being disorganised, the taxstructure can organise a lot of small third-partylogistics providers.KaustabhChakraborty, VP, Operations, UrbanLadder says,Scaling up will become easier under GST and wecan optimise warehouses based on customerlocation or consolidate our warehouse strategy.Lean supply chain: All these e-commerce playerspride themselves on being close to the consumer.Urban Ladder has invested in two large warehousesin India. No wonder Amazon India has invested in20 fulfillment centres, because of the businessopportunity that it can unlock in the logisticsindustry. Even Flipkart has sunk a lot of money byinvesting in over 15 warehouses. If GST comes intoforce, then global brands will set up their ownsupply chain in India, unlike today, where theyneed to tie up with multiple distributors.Take the example of OnePlus, the Chinesesmartphone manufacturer, which brings goods intoIndia by taking into consideration the various Statetax structures. It works with a distributor who paysall the entry taxes from State to State. OnePlus paysthe K-VAT in Karnataka, because all its goods getshipped from Bengaluru. In fact, all e-commercecompanies, including Snapdeal, bill from Bengaluru,because of the lowest VAT rates. If GST was in force,OnePlus could ship the product directly from Chinaand reach any customer by investing in its ownwarehouses.There is a lack of predictability in the supply chainin India and there is a lot of pilferage, which is whyinternational brands do not risk doing their owndistribution,saysVikasAgarwal, General Manager, OnePlusIndia.Compliance: Today, an average automobile OEM(original equipment manufacturer) has to fill sixlakh tax forms every year, on behalf of his dealers,to claim input tax credit. Similarly e-commercecompanies will be filling in several tax forms,


because they will be working with lakhs of vendorsand distribution companies.“GST will make compliance easier for e-commercecompanies. Since the government is banking onlarge IPOs from startups, it can boost investorconfidence by passing this Bill,” saysSanchitVirGogia, CEO, Greyhound Research, aconsulting company. But he adds that we must waitand see if e-commerce becomes a part of GST if at allit becomes an act.Bottlenecks to GSTState governments have trade lobbies in thetransportation and retail industry which claim that amonopolistic situation can be created with GSTsince it favours supply chain efficiencies for thosewith deep pockets.State governments believe GST will reducerevenues.The Central government and the Opposition havelocked horns over what should and should not bepart of GST.GST may only include 100 items in its purview; e-commerce may not be part of it.Companies would want clarity on the disbursementof credit claimed to avoid double taxation, and willbe wary of the fact that money will be locked in for aperiod with the government. This could have animpact on working capital.YourStory’s takeLogistics and warehousing has been a strugglingindustry for years. It is, according to the IndianBrand Equity Foundation, a $130-billion market. Beit in food processing or in movement ofmanufactured goods, there are no standards ofefficiency. Eighty-five per cent of the industry workson a cost arbitrage and, therefore, inefficiency isfactored in. Thanks to the smartphone revolution,there are entrepreneurs who are organising theecosystem and bringing some standards. Startupslike RoadRunnr and Delhivery are disrupting themarket with their use of data to plan routes andmanage warehouses. They are helping large e-commerce companies reach their consumers fasterand better.In turn, e-commerce companies are planning toreward vendors who stick to processes and enablequick turnaround in shipping time. At the heart ofall this change is the tax system. Therefore, a GST isnot a panacea, but the need of the hour. It is astructure that will make the entire federal system ofIndia more accountable to paying taxes rather thansubjecting business to the harassments of local taxauthorities. We can safely say that if the Modigovernment misses the bus on GST, then investorswill not board India’s roller-coaster developmentride.

(Ref -http://yourstory.com/2016/01/lack-of-gst-stifle-modi-startup-india-dream/)

15. Reduction of Government litigation -providing monetary limits for filing appealsby the Department before CESTAT/HighCourts and Supreme Court – Regarding

F.No.390/Misc./163/2010-JCMinistry of FinanceDepartment of RevenueCentral Board of Excise & Customs*****

New Delhi , 1st January ,2016

To,

1. All Principal Chief Commissioners / ChiefCommissioners and Directors General under theCentral Board of Excise and Customs.

2. CC (AR), Customs, Excise & Service TaxAppellate Tribunal.

3. All Principal Commissioners /Commissioners ofCustoms/Central Excise/Service Tax/All JointChief DepartmentalRepresentatives/Commissioner, Directorate ofLegal Affairs.

4. [email protected]

Sub:- Reduction of Government litigation -providing monetary limits for filing appeals by theDepartment before CESTAT/High Courts andSupreme Court – Regarding

Kind attention is drawn towards the Board’sInstruction of even no. dated 17.12.20015 on theabove mentioned subject.

In this regard, I am directed to inform that thesaid instructions will apply to all pending appeals inHigh Courts/ CESTAT. Principal ChiefCommissioners/ Chief Commissioners are requiredto take immediate necessary action in this regard forcases which are below the new threshold limitssubject to the conditions of the instructions of evenno. dated 17.08.2011 and 17.12.2015.

(ArchanaPandeyTiwari )Joint Secretary (Review)


(Ref -http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-instructions/cs-instructions-2016/ltr-compliance-monetary-limit.pdf)

16 It's high time Congress party rethinks itsGST stance. Here's why

The blame game between the Congress party andBhartiyaJanata Party (BJP) over who is blocking theGoods and Services Tax (GST) Bill entered yetanother round over the weekend. This time, theverbal attacks were led by former finance minister PChidambaram from the Congress side and Unionminister for Urban development and Parliamentaryaffairs Venkaiah Naidu from the BJP camp.Both accused each other for failing the passage ofthe crucial tax legislation in the Winter session.Chidambaram attacked the ‘stubborn andunbending attitude’ of the Congress.“The government was outright dismissive, until theChief Economic Adviser (CEA) virtually endorsedtwo of the three principal objections and made norecommendation on the third,” Chidambaram said.Chidambaram was referring to the CEA panelrecommendation to do away with the 1 percentorigin-based tax on interstate sale of goods andsuggestion for a standard GST rate of 17-18 percent.“Yet, the government has not been able to find away to accommodate the views of the Oppositionand pass the GST Bill,” Chidambaram said. TheCongress also wants an independent disputeresolution mechanism and the inclusion of thestandard GST rate in the constitution itself.Responding to Chidambaram’s comments, Naiduretaliated that Congress was ‘dodgy’ on the issueand was playing as per its ‘script’."The Congress party steadfastly refused from itspre-winter session script of not allowing GST Bill tobe passed comes what may. As per the script, theywere dodgy on this important issue. I did not expectthis from a party that ruled the country for most ofthe time since Independence," Naidu said. If needed,the BJP is willing to hold a special session ofParliament, he added. Separately, finance ministerArunJaitley said he is hopeful of pushing the Bill inthe Budget session.BJP’s missed opportunityThe fact is that the BJP had expressed the hope topass GST in the run up to the previous twoParliament sessions (monsoon and winter) as well.But it failed miserably to make any meaningfulprogress, despite the CEA panel opening up achance to resolve the deadlock.The fact is that the country has been denied thebenefit of the biggest reform at least in a decade till

now on account of political roadblocks. If the GSTplan is faced with such a delay and is on the vergeof missing the much-hyped April 1 deadline, boththe BJP and Congress are equally responsible. Fornow, the ball is clearly in the Congress’ court.True, the BJP missed an important opportunity tosmartly use the Arvind Subramanian panel report toits advantage during the Winter session, when thepanel made critical recommendations on GST thatperfectly aligned with at least one of the majordemands of Congress - doing away with the 1percent interstate trade levy - and left enoughheadroom to make headway on the second demand— on the standard GST rate.This was right opportunity for the BJP to force theCongress back to the discussion table and work outa consensus. It’s not too late even now.The third demand, the creation of an independentdispute resolution mechanism, is anyway notperceived as a major hurdle by anyone since eventhe Congress-ruled states do not seem to have anopposition for this.Chidambaram’s allegation that the BJP didn’t returnwith an official response to opposition after PrimeMinisterNarendraModi promised to do so almost amonth back, should be noted. This suggests lack ofenthusiasm on the part of the BJP to push the plan inthe discussions when the session was still on.A compromise by the BJP in the backdrop of theCEA panel recommendations would not have beeninterpreted as its political defeat to the Congress byany sane political analyst or television anchor, butsomething it did in the larger interest of theeconomy.Congress’s demandThe Congress party’s stubbornness in demandingthe GST rate to be included in the constitutionmakes no sense in the current context, when the BJPis in-principle agreeing to two of the three demands.Naidu has already left enough hints about the BJP’sreadiness to accommodate the Congress’ twodemands for the GST roll out.“The Congress has put forth three suggestions. Weare for two suggestions but can’t agree with the firstone, which wants the rate of taxation under GST tobe made part of the Constitution,” Naidu said.“This is difficult as during disaster the country hasto go in for additional cess every now and then toensure that relief measures are undertaken. Thenyou have to amend Constitution every now andthen,” Naidu said. In this, Naidu is bang on.Inclusion of the standard tax rate in the Bill is riskysince only the House can tweak it no matter howurgent is the situation. Amending a criticalconstitutional Bill whenever the rate needs to betweaked is not a feasible plan and shouldn’t be left


to Parliament to decide. What if the same rate wasapplied to Income Tax rates or sale tax rates?Clearly, this demand cannot be a convincing one forthe Congress party to block the Bill. If the Congressharps on this point endlessly, it would also be a badpolitical strategy that could boomerang sooner orlater.GST, an important reform that could change India toa global market and, thus, push up its GDP growthby a few notches has already been delayedconsiderably. This wouldn’t augur well for theeconomy, seen as the only bright spot among theemerging markets, and has the potential to rise tothe leadership role among these economies in Asianregion.Once the Bill is passed in Parliament, it has to stillgo through the state assemblies. States are unlikelyto show reluctance if the government goes with theCEA panel recommendations, which has proposed100 per cent for states for first five years for anylikely revenue loss.The short point is this: In the current context, wherethe BJP is seemingly agreeing to two out of threedemands of the Congress on GST, the Congressparty should rethink its stance on the GST Bill,considering the merits it can bring to the economy,and support its passage.

(Ref -http://www.firstpost.com/business/its-high-time-congress-party-rethinks-its-gst-stance-heres-why-2570014.html)

17. India Tax Reform: Government Hopeful OfPassing GST Bill In Next Parliament Session

After months of “parliamentary obstructionism,”India’s Finance Minister ArunJaitley expressed hopethat the proposed goods and services tax (GST) law,the biggest indirect tax reform since the country'sindependence in 1947, will be passed by the upperhouse in the next session of parliament, according toreports. Originally scheduled to take effect fromApril 1 this year, the lower house passed the billMay 6, 2015.

GST is a proposed tax on the manufacture, sale andconsumption of goods and services across India, andit will replace all indirect taxes currently levied ongoods and services by the central and stategovernments.

Addressing officer trainees of the Indian RevenueService Saturday, Jaitley reportedly said: “The nextsession is going to be extremely important. Andhalfway through the next session, the numbers ofthe upper house are also going to change. So I am

reasonably optimistic, as far as the next session isconcerned, that we may be able to push it [GST Bill]through.”

The BharatiyaJanata Party (BJP) government doesnot have a majority in the upper house of theparliament where the opposition Congress party hasnot allowed the bill to be passed, asking thegovernment to accommodate its three demandsfirst. Late November, Prime Minister NarendraModimet Congress party leader Sonia Gandhi and formerprime minister Manmohan Singh to discuss the GSTbill, among others, but that meeting failed to lead toa compromise.

With only one parliament session remaining in thecurrent financial year, M Venkaiah Naidu, anotherminister in the BJP government, said Saturday thatthe government was ready for a special session ofparliament to pass the GST bill, the Times of Indiareported.

Even after the parliament passes the GST bill — aconstitutional amendment — the law has to beratified by at least half of India’s states, and threemore legislations need to be passed by the centraland state governments for GST to become a reality.Jaitley said during his address that the other threelegislations were ready and that the governmenthad built a broad consensus among the states aboutthe bill, reported CNN-IBN.

According to Ernst & Young, “GST will be a gamechanging reform for Indian economy” because itwill make India one big common market and reduce“the cascading effect of tax on the cost of goods andservices. It will impact the Tax Structure, TaxIncidence, Tax Computation, Tax Payment,Compliance, Credit Utilization and Reportingleading to a complete overhaul of the currentindirect tax system.”

The Economic Times, an Indian businessnewspaper, referred to a World Bank report lastmonth, and said thatdelay in implementation of GSTmight mean that India will miss a growthopportunity. In a similar vein, local news channelNDTV reported last month that Christine Lagarde,managing director of the International MonetaryFund, was also pitching for early implementation ofthe GST regime.

Around the same time, P. Chidambaram, a formerfinance minister under the previous Congress-ledgovernment, defended his party’s stance on the GSTbill.


(Ref http://www.ibtimes.com/india-tax-reform-government-hopeful-passing-gst-bill-next-parliament-session-2247450)

18. GST, Transgender Rights bills to be tabledin budget session of Parliament, says Gehlot

BHOPAL: Three most important bills on goods andservices tax (GST), giving rights to transgenders andempowerment of disabled will be tabled in thecoming Budget session of Parliament, minister ofsocial justice and empowerment, Thawar ChandGehlot said on Monday.

He said the winter session the Parliament gotwasted after Congress stalled proceeding onnational herald issue. ``We were hopeful to get thebills cleared in winter session but it went in vain.Still it's not clear whether Congress would supportdevelopment or stick to its stubborn demands in thecoming Budget session of the Parliament'', Gehlottold TOI.

He said as per Supreme Court directive, thelegislative department has been requested to draft abill for the rights of transgender persons. ``The billproposes equal rights to the transgenders by briningan act for their welfare'', said Gehlot. He said after36 years, a private member bill seeking to protectthe rights of transgenders was passed despitegovernment's initial resistance in the RajyaSabha inApril. Now as he had spoken to severalrepresentatives of transgenders, it seems thatgovernment will be able to give them a respectfullife, he said.

On a query regarding reservations to transgenders,Gehlot said, the apex court doesn't allow more than50 per cent reservation and government is followingthe same. ``But we are looking forward to safeguardtheir interests and provide them equal opportunitythrough scholarships, loans and trainings. Besides,we need to make the public aware to accept thembefore implementing any law'', he added.

Gehlot said government has also proposed bill toempower disabled, however, Congerss was notcooperative on serious issues like equal rights forspecial sections of society. ``During winter sessionCongress stalled proceedings on court summons toit's president and vice-president but had to resort tolegal assistance. This affected several important billswhich were not discussed in the Parliament. BJP isstill unclear whether Congress would cooperate or

find other reasons to disrupt such an importantbusiness, said Gehlot.

(Ref -http://timesofindia.indiatimes.com/city/bhopal/GST-Transgender-Rights-bills-to-be-tabled-in-budget-session-of-Parliament-says-Gehlot/articleshow/50441400.cms)

19. Why GST should be credited in favor of theultimate consumer

Indirect taxes have always been passed down thesupply chain, with the buck stopping with theultimate consumer. So much so the theory of undueenrichment of manufacturers came into vogue andincorporated in our excise law among others,resulting in denial of refund of excise to themanufacturer unless he could prove he bore thebrunt.Invariably, the brunt has been borne by thehousewife or other householders but who haveneither had the wherewithal nor the inclination toclaim refund in case duty was paid in excess.The advent of destination based tax regimes VATand service tax has lent urgency to the need foracknowledging the truism that it is the ultimateconsumer who picks up the tabs. And theimpending advent of GST makes suchacknowledgment all the more imperative andcompelling.Suppose a housewife shops at a departmental storefor Rs 10,000 towards her monthly groceryrequirements and included in this amount is VAT ofRs 1,000. There is no reason why she should not beallowed to quote her or her husband’s permanentaccount number (PAN) issued under the income taxlaw.The stores’ accounting system would now have thedetails of the buyer including the tax paid by her. Ifthe stores files a sales tax return for the next quarter,it would include the tax paid of Rs 1,000 by thehousewife in the example on hand.Indeed, the VAT deposited, say of Rs 0.50 crore, bythe store would have been contributed by hundredsof such housewives or householders after takingcredit for VAT already paid by predecessors in thesupply chain.In a computerised ecosystem, keeping details of allof them including PAN would hardly pose aproblem either for the store or the revenuedepartment of the government which ought to sendout receipts either physical or electronic to each oneof them, may be in the omnibus AS-26 statementallotted to each PAN in acknowledgment of the factthat at the end of the day it was not themanufacturer nor the wholesaler nor the retailerwho actually picked up the tabs.


That many of the buyers may not show any interestin furnishing PAN does not detract anything fromthe force of the basic argument that the endconsumers’ role must be acknowledged.Such acknowledgments to ultimate consumerswould serve two purposes:1) No trader would take the nation for a ride -collecting tax and pocketing it without batting aneyelid or compunctions. That amounts to thumbingnose both at the government and the ultimateconsumers some of whom might watch over theirtaxes meticulously and some at random. The roguetrader’s goose would be cooked if a consumer files acomplaint with the details of his invoice and it turnsout that he had blithely been pocketing the VAT;2) The nation as a whole would become taxcompliant especially if gradually the governmentunfolds a regime of credit or adjustment againstone’s income tax liability albeit on a small scale tostart with. For example, let us say a PAN shows Rs20,000 as VAT or GST paid during the year.This is as much a contribution to nation’s exchequeras direct tax paid by him by way of TDS or advancetax except that no part of it is refundable. When GSTis unveiled, perhaps the government can give asmall rebate from income tax from out of his GSTcontribution to the nation.To start with it can be as low as 2% of the GST paidduring the year. In the example on hand, ittranslates into a rebate of Rs 400 from his income taxliability. The rebate percentage can be increased asnation’s finances perk up gradually.Indeed in such a regime, PAN would become thelynchpin which would be applied for withenthusiasm and not under duress by those nothaving it already. Income tax rebate, small though itmight be, would be the gravitas. And organisedretailing would get a boost, with they alone havingthe wherewithal and inclination to keep meticulousrecords of buyers including their PAN.Of course, stores cannot compel housewives andother buyers to furnish PAN unless it happens to bea high volume transaction for which the CBDT hasmade furnishing of PAN mandatory. But thenpeople react positively if suitably incentivised.It must be reiterated that it is neither necessary norpracticable to tote up all the credits in various PANsand see if it tallies with the GST collected. Thatmight happen in an enlightened society with amanageable population.The author thankfully acknowledges that the idea ofreceipt to the ultimate consumer was provided byMr. Sampath, an air force veteran living in Chennaiwith an abiding interest in indirect taxes.

(Ref -http://www.firstpost.com/business/why-gst-should-be-credited-in-favor-of-the-ultimate-consumer-2569678.html)

20. Notification No.1/2016-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA,EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIAMINISTRY OF FINANCE(DEPARTMENT OF REVENUE)

New Delhi, the 4th January, 2016

NotificationNo.1/2016-Customs

G.S. R. (E).—In exercise of the powers conferredby sub-section (1) of section 25 of the Customs Act,1962 (52 of 1962), the Central Government, beingsatisfied that it is necessary in the public interest soto do, hereby makes the following furtheramendments in the notification of the Governmentof India in the Ministry of Finance (Department ofRevenue) No. 27/2011- Customs, dated the 1stMarch, 2011, published in the Gazette of India,Extraordinary, vide number G.S.R. 153(E), dated the1st March, 2011, namely :-

In the said notification, in the Table, against serialnumber 23, in column (4), for the entry “5%”, theentry “Nil” shall be substituted.

[F.No. 332/4/2015-TRU]

(AnuragSehgal)Under Secretary to the Government of India

Note.- The principal notification number27/2011-Customs, dated the 1st March, 2011 waspublished in the Gazette of India, Extraordinary,Part II, Section 3, Sub-section (i) vide number G.S.R.153(E), dated the 1st March, 2011 and last amendedvide notification number 50/2015- Customs, datedthe 16th October, 2015, published in the Gazette ofIndia, Extraordinary, Part II, Section 3, Sub-section(i) vide number G.S.R. 788(E), dated the 16thOctober, 2015.

(Ref -http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/notfns-2016/cs-tarr2016/cs-tarr2016.pdf)


21. Notification No. 27/2015-CENT dt. 31-12-2015 -Seeks to amend CENVAT Credit Rules, 2004

[TO BE PUBLISHED IN THE GAZETTE OF INDIA,EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIAMINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 27/2015 - Central Excise (N.T)

New Delhi, the 31st December, 2015

G.S.R. (E).- In exercise of the powers conferred bysection 37 of the Central Excise Act, 1944 (1 of 1944)and section 94 of the Finance Act, 1994 (32 of 1994),the Central Government hereby makes the followingrules further to amend the CENVAT Credit Rules,2004, namely:-

1. (1) These rules may be called the CENVAT Credit(Sixth Amendment) Rules, 2015.

(2) They shall come into force on the date of theirpublication in the official Gazette.

2. In the CENVAT Credit Rules, 2004, in rule 9,in sub-rule (1), in clause (d), after the words ForeignPost Office, the words “or, as the case may be, anAuthorized Courier, registered with the PrincipalCommissioner of Customs or the Commissioner ofCustoms in-charge of the customs airport, shall beinserted.

[F. No. 267/34/2015/Pt. – CX-8]

(Shankar Prasad Sarma)Under Secretary to the Government of India

Note - The principal rules were published in theGazette of India, Extraordinary, Part II, Section 3,Sub-section (i), vide number G.S.R 600(E ) dated the10th September, 2004 {Notification No. 23/2004 –Central Excise (N.T) dated the 10th September, 2004}and was last amended vide number G.S.R. 818(E),dated the 29th October, 2015 {Notification No.22/2015 -Central Excise (N.T.), dated the 29thOctober, 2015}.


2.0 Case Laws

2.1 Case Laws related to Excise

Sr. No. 1RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee was selling goods on

credit for Rs. 68 per unit, while, forimmediate cash payments, it wasgranting 1.75 per cent discount(Rs. 1.19) and selling goods at Rs.66.81 - In computing value ofgoods sold on credit basis, assesseeclaimed deduction for interest onreceivables inbuilt into price of Rs.68 - Department denied deductionon ground that there was noevidence of interest being inbuiltinto price - HELD : Price chargedin case of cash sales was lower dueto cash discount - Thus, in invoicesfor sales on credit terms, interestfor credit period was inbuilt incredit price - Hence, deductionwas allowed

Citation [2015] 64 taxmann.com 244 (SC)Castrol India Ltd.

v.

Commissioner of Central Excise,Chennai

Sr. No. 2RelevantSection Section 5ARelevantStatute Central Excise Act 1944Issue Exemption from Excise DutySub Issue Captively Consumed productFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee was engaged in business

of manufacture of cement [finalproduct] - It also manufacturedclinker [intermediate product] andconsumed same in same factorycaptively for manufacture ofcement - During period 2004 to2011, it cleared cement to SEZunits/developers withoutpayment of duty - It claimed thatclinker consumed for manufactureof cement was eligible forexemption under Notification No.67/95-CE, dated 16-3-1995 -Adjudicating Authority deniedbenefit of notification anddemanded excise duty on clinker -Whether Adjudicating Authoritywas not justified in his view -Held, yes - Whether assessee waseligible for exemption from exciseduty under above notification onclinker captively consumed formanufacture of cement - Held, yes

Citation "[2015] 64 taxmann.com 241(Chennai - CESTAT)Ultratech Cements Ltd.

v.

Commissioner of Central Excise &Service Tax"

Sr. No. 3RelevantSection Rule 2(a) read with Rule 3RelevantStatute CENVAT Credit Rules 2004Issue Cenvat CreditSub Issue Capital GoodsFavour of AssesseeIssuingAuthority High Court of GujaratJudgment Assessee received capital goods

prior to 16-3-1995 and took creditthereafter - Vide amendmentdated 16-3-1995, scope ofdefinition of capital goods wasincreased - Department deniedcredit relying upon amendmentmade vide Notification dated 16-3-1995 holding that amended


definition would not be availablefor capital goods already receivedand items added vide amendmentwere ineligible prior to 16-3-1995 -Commissioner (Appeals) held thateven under old definition, items inquestion were capital goods andtherefore, credit cannot be denied -HELD : Even prior to 16-3-1995,goods on which assessee hadavailed credit were capital goodsand subsequent amendment couldnot, in any manner, be interpretedto take away right of assessee totake credit of capital goods alreadyreceived prior to amendment

Citation [2015] 64 taxmann.com 246(Gujarat) PrincipalCommissioner

v.

Tata Chemicals Ltd.

Sr. No. 4RelevantSection Section 2(f)RelevantStatute Central Excise Act 1944Issue ManufactureSub Issue Grading and Certification of

DiamondsFavour of AssesseeIssuingAuthority AAR New DelhiJudgment Assessee was engaged in grading

and inscription of diamonds andinvoicing - Grading was done inrespect of colour, clarity, cut andweight in carats, of diamonds -Inscription involved applying'Forevermark', a unique number,on diamonds that is not evenvisible to naked eye to ensureproduct is securely traceable andcan be verified as genuine -Assessee sought advance rulingwhether said activities amount tomanufacture - Authority notedthat department did not seriousargue that activity was

manufacture - HELD : Assesseedoes not manufacture diamonds asit does not chemically bring outdiamonds and it only deals withnatural diamonds - Owing toassessee's activity, essentialcharacter of diamonds does notchange and it still remainsdiamond - None of three activities: (a) grading, (b) inscription; and(c) invoicing could amount tomanufacture of diamonds - Issuewhether 'certification of diamond'amounts to service, was left open,as not raised

Citation "[2015] 64 taxmann.com 268 (AAR- New Delhi) AUTHORITY FORADVANCE RULINGS, NEWDELHI

International Institute of DiamondGrading And Research India (P.)Ltd."

Sr. No. 5

RelevantSection Section 5ARelevantStatute Central Excise Act 1944Issue Exemption from Excise DutySub Issue IntermediateFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee manufactured molasses

and used same in manufacture ofrectified spirit and denaturedspirit - Rectified spirit was exemptand denatured spirit was dutiable- Assessee claimed exemption inrespect of molasses undernotification 67/95 - Departmentdenied said exemption becausefinal product 'rectified spirit' wasexempt - Assessee argued that ithad complied with obligationunder rule 6 of cenvat credit rules;therefore, exemption cannot bedenied - Tribunal held that since


rectified spirit had been clearedmaking payment under rule 6 ofCENVAT Credit Rules, exemptionunder notification 67/95-CE couldnot be denied in respect ofmolasses - HELD : There is nogood ground to interfere withjudgment of Tribunal; hence, samewas upheld

Citation "[2015] 64 taxmann.com 316 (SC)Commissioner of Central Excise,Salem

v.

Sakthi Sugars Ltd."

Sr. No. 6

RelevantSection

Section 37C read with Section 83and 86 of the Finance Act 1994

RelevantStatute Central Excise Act 1944Issue Service of decisions, orders,

summons etc.Sub IssueFavour of RevenueIssuingAuthority High Court of AllahabadJudgment Service of decisions, orders,

summons, etc. - On 3-12-2010,assessee filed appeal againstadjudication order dated 19-5-2008- Assessee claimed thatadjudication order was not servedand a copy thereof was obtainedonly on 30-10-2010, when recoverywas initiated - Department arguedthat adjudication order was dulyserved at assessee's address on 18-6-2008 by personal tendering andwas received by assessee's nephew- HELD: If order is served on amember of family, it is duly servedand there is sufficient service -Assessee has never claimed thatperson receiving order was 'notnephew' - Assessee did not claimbefore Tribunal that nephew was'not connected with business';

therefore, said claim cannot beallowed now - Hence, adjudicationorder was duly served on 18-6-2008 and therefore, appeal wasdismissed as time-barred

Citation [2015] 64 taxmann.com 315(Allahabad) JyotiEnterprises

v.

Commissioner of Central Excise &Service Tax

Sr. No. 7

RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee, a manufacturer of motor

cycles, was taking a deposit of Rs.500 per motorcycle at time ofbooking from customers -Department argued that saiddeposit was partly used to meetworking capital requirement aswell as partly invested, which ledto decrease in cost and receipt ofincome and, being additionalconsideration, same was addableto value - Tribunal fund that : (a)price was not determined on 'costplus basis'; (b) deposits were usedfor working of company and notnecessarily working capital; (c)interest on deposit was notsignificant enough to influenceprice; and (d) assessee had beensuffering loss despite price-rises;therefore, deposit was not arelevant factor in pricing - HELD :Price of motorcycle was market-driven and assessee did not followa 'cost-plus-profit' pricing policy -


In view of findings of fact ofTribunal, no interference wascalled for

Citation [2015] 64 taxmann.com 270 (SC)Commissioner of Central Excise,Delhi - III

v.

Hero Honda Motors Ltd.

Sr. No. 8

RelevantSection

Rule 3RelevantStatute

CENVAT Credit Rules 2004Issue

Removal of Inputs/Capital GoodsSub Issue

Favour ofAssessee

IssuingAuthority

High Court of BombayJudgment To meet urgent requirement of

common raw material, assesseeused to exchange inputs withassociate companies, which werecommonly managed with commondirectors/partners and were intosame business - Departmentalleged diversion of inputs andargued that removal of inputsrequired reversal of credit -Assessee argued that matter wasrevenue neutral - Tribunal upheldprinciple of revenue neutrality andset aside demand, but, upheld levyof penalty - Department arguedthat accepting revenue neutralityand at same time, levying penaltywas perverse - HELD : Assesseewould derive no benefit by notreversing credit, when associatecompany was eligible to takecredit so reversed - Thoughprocedure adopted was not as perlaw, however, there was no

revenue loss - Since there was nodiversion of inputs, principle ofrevenue neutrality was applicable- Penalty was notionally imposedon all assessees for infraction ofprocedural rule; hence, merelybecause of levy of penalty,conclusion as to 'revenueneutrality' was not vitiated

Citation [2015] 64 taxmann.com 272(Bombay)Commissioner of Central Excise,Customs And Service Tax

v.

Tarapur Grease India (P.) Ltd

Sr. No. 9

RelevantSection

Section 3 read with Section 14 ofthe Customs Act 1962

RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of RevenueIssuingAuthority CESTAT MumbaiJudgment Excise Duty on DTA clearances by

100 per cent EOU - Assessee-EOUcleared spent materials for DTAjob-workers for reprocessing -Since there was no permission,assessee cleared said goods onpayment of duty based on value ofRs. 5 per kg. - Department arguedthat when assessee itself was DTAunit, it was declaring higher valueon domestic job-work challans andhence, rejected transaction valueand determined value based onresidual method taking importvalue of fresh materials as startingpoint - HELD : Local sale price viz.price in course of domestictransactions cannot be taken asbasis for determining customsvalue of DTA clearances - Hence,value declared by assessee in job-


work challans in course ofdomestic transactions could not beregarded as customs value underproviso to section 3(1) read withsection 14 ibid - Therefore,transaction value was rightlyrejected and residual method wasrightly adopted - Issue of detailedcomputations of value wasremanded back

Citation [2015] 64 taxmann.com 273(Mumbai - CESTAT)Commissioner of Central Excise,Mumbai

v.

USV Ltd.

Sr. No. 10

RelevantSection

Rule 2(a)RelevantStatute

CENVAT Credit Rules 2004Issue Cenvat Credit

Sub IssueCapital Goods

Favour ofAssessee

IssuingAuthority

AAR New DelhiJudgment Applicant-assessee will provide

service of transport of gas throughpipelines - It will grant turnkeycontracts to engineeringprocurement and construction(EPC) contractor to procure pipesand valves and laying of pipelinesembedded in earth - EPCcontractor will procure pipes andvalves from manufacturer -Manufacturer will issue invoice toEPC contractor showing applicantas consignee - Pipes will bedelivered directly at applicant'swork-site - Applicant proposed totake Cenvat Credit on basis of

invoice raised by EPC contractorbeing an intermediary dealer -Whether applicant is eligible toavail of Cenvat Credit of exciseduty that would be paid on pipesand valves procured frommanufacturer on basis of invoiceissued by EPC contractor if suchcontractor is a registered dealer -Held, yes

Citation [2015] 64 taxmann.com 282 (AAR -New Delhi) AUTHORITY FORADVANCE RULINGS, NEWDELHI

GSPL India Transco Ltd.

Sr. No. 11RelevantSection Rule 6(2)RelevantStatute CENVAT Credit Rules 2004Issue Simultaneous availment of Notfn.

29/2004-CE & 30/2004-CESub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Revenue cannot be allowed to

argue against its own Circular -Appellant has availed 20% of thecenvat credit and forgone 80% onthe basis of pro rata use of inputsused in dutiable and exemptedgoods - this is sufficientcompliance of rule 6(2) of CCR,2004 - substantive benefit cannotbe denied merely on purelytechnical grounds - Appealsallowed

Citation "2015-TIOL-2786-CESTAT-MUMBHAIRAV SYNTHETICS PVTLTDVsCOMMISSIONER OF CENTRALEXCISE, THANE-I"


Sr. No. 12

RelevantSection

Section 2(f)RelevantStatute

Central Excise Act 1944Issue

ManufactureSub Issue

Favour ofAssessee

IssuingAuthority

CESTAT MumbaiJudgment Tankers cannot be considered as

bulk pack - Therefore repackingactivity of edible oil so receivedinto retail containers with brandname cannot be considered asmanufacture u/s 2(f) of CEA, 1944so as to be charged to CE duty -Revenue appeals dismissed

Citation "2015-TIOL-2837-CESTAT-MUMCOMMISSIONER OF CENTRALEXCISE, PUNE-II

Vs

M/s ANWAR OILS, KOLHAPUR"


2.2 Case Laws related to Service Tax

Sr. No. 1RelevantSectionRelevantStatute Finance Act 1994Issue DemandSub Issue Management, Maintenance and

Repair ServiceFavour of AssesseeIssuingAuthority CESTAT KolkataJudgment assessee were engaged in

maintenance and repair of roadsfor their clients during period01.04.2005 to 31.03.2010—ServiceTax demand was confirmedagainst assessee alleging thatimpugned services were taxableunder category of repair ormaintenance services—Assesseesubmitted that all work ordersreferred to in impugned order,were relating to repair andmaintenance of roads only, henceimpugned order was untenable inlaw in view of retrospectiveamendment by Finance Act, 2012whereby management,maintenance or repair of roadsduring period from 16.06.2005 to26.07.2009 had beenretrospectively held to be nottaxable—Further, assesseesubmitted that by virtue ofNotification No.24/2009,management, maintenance orrepair of roads had been exemptedfrom Service Tax, therefore,impugned order was bad in lawand liable to be set aside—Held,Assessee had undisputedlyrendered repair and maintenanceservice of roads to their variousclients—It was also not in disputethat impugned services had beenconsidered non-taxable andremoved from scope of levy, forperiod 16.06.2005 to 26.07.2009 byvirtue of retrospective amendment

inserted by the Finance Act, 2013;also for subsequent period i.e. after26.07.2009 by NotificationNo.24/2009-ST, said services wereexempted—Hence, impugnedorder-in-appeal was set aside—Assessee’s appeal allowed

Citation (2015) 22 CCHST 1485 KolTribM/S. MOTHER INDIACONSTRUCTIONvs.COMMISSIONER OFCENTRAL EXCISE & SERVICETAX, HALDIA

Sr. No. 2RelevantSection Section 106RelevantStatute

Voluntary ComplianceEncouragement Scheme 2013

Issue VCES SchemeSub Issue Rejection Order ChallengedFavour of RevenueIssuingAuthority High Court of MadrasJudgment Petition challenging the order of

rejection of VCES Declaration bythe Designated Authority as auditwas conducted before the cutoffdate of 01.03.2013. Held: Thepremises of the petitioner came tobe visited by the internal auditsection of the respondents and anaudit was conducted on 25.2.2013and 28.2.2013. During the course ofaudit, the audit party noticed thatthe assessee was also providingrenting of immovable propertyservice, but had not takenregistration for this service nor hadincluded this service in the servicetax registration certificate and alsonot paid the service tax for therenting of immovable propertyservice. Hence the matter wasunder consideration of audit as on1.3.2013, which is not yet beingover. Therefore, as per Section106(2) of the Finance Act, thepetitioner is not entitled to get thebenefit of the Service TaxVoluntary Compliance


Encouragement Scheme, 2013(VCES), hence the DesignatedAuthority has rightly rejected theDeclaration.

Citation 2015-TIOL-2905-HC-MAD-STM/s HOTEL SOUTHSON PVTLTD

Vs

1) CUSTOMS, EXCISE SERVICETAX APPELLATE TRIBUNALNO.26, HADDOWS ROAD, FIRSTFLOOR, SHASTRI BHAVANANNEXECHENNAI

Sr. No. 3RelevantSectionRelevantStatute Cenvat Credit Rules 2004Issue Credit for inputs etc used for

construction of JettySub IssueFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Jetty is used within the port for

loading and unloading of thegoods from the vessel - Port cannotfunction without jetty - CENVATcredit on the inputs and capitalgoods used in the construction ofjetty is eligible for output service,namely Port service

Citation 2015-TIOL-2822-CESTAT-AHMM/s ADANI PETRONET PORTPVT LTD

Vs

COMMISSIONER OF SERVICETAX, AHMEDABAD

Sr. No. 4RelevantSection Section 78RelevantStatute Finance Act 1994Issue Penalties

Sub IssueFavour of Partly in favour of assessee and

partly in favour of RevenueIssuingAuthority CESTAT MumbaiJudgment To raise funds, Appellant availed

merchant banking services fromCitigroup & J.P. Morgan basedabroad and who acted as LeadManager - appellant had nointention to avoid payment ofservice tax which would have beenavailable to them as Cenvat creditand non-payment would not resultin any financial benefit – Penaltieswaived

Citation "2016-TIOL-12-CESTAT-MUMM/s BHARAT FORGE LTD

Vs

COMMISSIONER OF CENTRALEXCISE, PUNE-III"

Sr. No. 5RelevantSection Rules 2(I)RelevantStatute Cenvat Credit Rules 2004IssueSub IssueFavour of Partly in favour of assessee and

partly in favour of RevenueIssuingAuthority CESTAT MumbaiJudgment Service tax paid on the services of

purchase of gift & setting up ofmandap in the factory premises forcelebrating Dussera festival is noteligible to be held as credit as thisseems to be not connected with thebusiness of the appellant - Agencycharges, Tour operator services areInput services, credit admissible -ST paid on the employees'contribution towards cateringservice cannot be availed asCENVAT credit - Since the issuewas agitated in various forums, noreason to visit the appellant withpenalty


Citation 2016-TIOL-27-CESTAT-MUMMAHINDRA CASTING LTD

Vs

COMMISSIONER OF CENTRALEXCISE, PUNE I

Sr. No. 6RelevantSectionRelevantStatute AppealIssueSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Revenue appeal involving duty

less than Rs.5 lakhs is notmaintainable before CESTAT -Apex Court decision inSumanDhamija - 2015-TIOL-195-SC-IT relates to a dispute inIncome Tax; that unlike theinstructions governing IncomeTax, the CBE&C instruction390/Misc/163/2010-JC dated17/08/2011does not indicate thatthey shall not govern cases, whichhave been filed before 2011

Citation "2016-TIOL-37-CESTAT-MUMCOMMISSIONER OF CENTRALEXCISE, PUNE-I

Vs

M/s SUNNY ENTERPRISES"


2.3 Case Laws related to Customs

Sr. No. 1RelevantSectionRelevantStatute Customs Act 1962Issue Adjudication OrderSub Issue Order Passed after 16 monthsFavour of AssesseeIssuingAuthority High Court of MumbaiJudgment Order passed after 16 months from

the date of personal hearing - sinceRevenue's orders have immediateimpact and parties ought to knowtheir position in financial year toyear, it is not proper that such anenormous delay should take place- Order quashed and set aside -fresh order to be passed afterrehearing

Citation 2015-TIOL-2926-HC-MUM-CUSM/s EXCEL PRODUCTIONAUDIO VISUALS PVT LTD ANDANOTHER

Vs

THE UNION OF INDIA ANDOTHERS

Sr. No. 2RelevantSection Rules 5 & 6RelevantStatute Customs Valuation Rules 1988Issue ValuationSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Once value of imported goods has

been enhanced applying thecontemporaneous value, nofurther enhancement ispermissible - Basis on which thevalue of the Appellants imports issought to be 'again' enhanced bythe present SCN was alreadyavailable with the department atthe time of assessment of dutymade by relying oncontemporaneous value - Largerperiod of limitation not applicable- Appeals allowed

Citation 2016-TIOL-23-CESTAT-MUMM/s RICO GEMSCORPORATIONSHRI HITESH ISRANIM/S TELEBRAND INDIA PVTLTDSHRI NARENDRA MEHTA

Vs

COMMISSIONER OF CUSTOMS(IMPORT), MUMBAI


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Ring Road - 110, Metro Tower, Near Kinnery Cinema, Ring Road, Surat

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NCR - C-2270, Sushant Lok-1, Gurgaon, Haryana

Associate Offices:

Ahmedabad, Haridwar, Bhagalpur, Pune, Mumbai, Kolkata

CommuniqueEdited By :- CA Avinash Poddar

Communique Compilation By :- ShailinDoshi

Darshita Shah

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