Continued on page 07

Continued on page 07

PARDE MEIN REHNE DO PARDA NA UTHAOIn law the subject of the lifting of corporate law has another interesting angle. The need to juxtapose the creation of a legal person vis a vis the corollary of the

legal fiction behind creation of the legal person. This (These) provision/s in

company related legislation is to enable challenge such legal person/legal fiction Juristically. Statutory incorporation of a company as an entity distinct from its members is virtually the conferment of legal personality on an association which has no legal life. This legal fiction, having its genesis in statute, must, of course, be allowed to operate. However, in some circumstances, the fiction may have to be disregarded or, if one may put it that way, it has to be offset and counteracted in the interests of justice. What the court, in effect, does when it lifts the corporate veil is to lay naked the legal persons. The court, performing its role of statutory construction, limits the statutory fiction to certain c i rcumstances and exc ludes o ther circumstances from its scope. In other words, the court construes in a limited manner the statutory language creating the fiction of incorporation. One of the most interesting, but, at the same time, most difficult, questions in company law relates to the doctrine of lifting the corporate veil. This is one of those doctrines which is easily understood in its broad outline, but is not so easily applied when a concrete case presents itself. The reasons for this situation are many. In the first place, by partially disregarding the corporate personality of an entity, the court, in fact, takes a step which is not in literal conformity with the theory of incorporation, given effect to by a statutory provision. Obviously, the court here assumes a jurisdiction which has to be exercised with caution. Secondly, the circumstances in which the veil of a corporation may be lifted and an act, nominally done by the corporation, may, by judicial construction, be attributed to some other person or entity, are indefinite and theoretically infinite. That must be so, because the power is asserted and

The great depression of 1929 got initiated on 4th. September, 1929 in New York Stock Exchange but the big trigger was pulled up which had the effect of causing mayhem in the New York Stock Exchange on Black Tuesday on 29th. October, 2019. The final outcome was that various countries lost 15% to 30%

of their GDP and USA witnessed 25% increase in its unemployment level and also 60% decline in its farmer’s income, in the months that followed. The great depression eventually led to rise of Hitler and eventually World War II and was followed by hyper inflation years later. Since, it was Wall Street from where the blood bath of markets and economics started; therefore, for the purposes of Mundane Astrology one can safely take New York to be the birth place of the great depression. Accordingly, a chart has been prepared to understand what caused the phenomena ninety years back. Also, since, the world is already in the grip of recession since 2008 and it is going on unabated in spells till 2019, therefore, a comparison is required to be made for the purpose of Mundane Astrology to see if the Black Tuesday is going to revisit any time soon on any date and day, with the same or lesser intensity. The reason for the analysis is that like in case of sixty years period, there is a tendency even over ninety years period for the planets to more or less reach in the same configuration . The chart of black Tuesday of 1929 is as follows: The time of birth chosen has been kept close to the time of opening of the NSE. Now, an attempt has been made to arrive at a date and time on which at least the configuration of the major planets is going to be the same. This brings us to the date of 19/10/2019 with a margin of 4/5 days on which a recession can reach at least to the next level of hitting out economies, worldwide. Again, New York stock exchange has been chosen, as the USA being the top most economy of the world has the capacity to stir such a storm. The chart for the chosen date of 19/10/2019 10: 00 AM New York

New Delhi Vol : XI No. 01 Pages: 12 September 2019 Price: Rs 20/- (Per copy)US $1 (Per copy) Outside India

Indian Revenue Service officer(CBIC) of the 1978 batch was known for his unpara l le l in tegr i ty , utmost honesty, daring, talented , and a man with

nerves of steel, and a officer with whom the

juniors wants to work . He took on smugglers head on in the late 1980s and was known for his crackdown on the thriving gold smuggling networks in Daman, Goa and Mumbai died in Australia following a prolonged illness on 12-8-2012. Our civil services are by and large perceived as corrupt and perception is not

entirely unfounded. But there are also a few officers who have the courage and conviction to discharge their official duties without any pressure and pulls and do not follow the wrong and dubious practices irrespective of the fact that this would put them in position of extreme disadvantage, follow the path of probity and Daya Shankar was one of those rare officer. He is perhaps the only officer in the Department who had refused to accept the cash rewards given by the department appox 22 lacs and it is not as if he was rolling in money. A senior officer once told that Daya Shankar came to his house long ago and asked for a small loan for taking his

child to the hospital. "How much", asked the senior officer. "Three", said Daya This other officer was also an honest one and he said, "I wouldn't have three thousand at home, but let me see …". Daya said, "not three thousands, but I need three hundreds!" And this when lakhs were languishing in his reward account and just a smile or a squint eye from him would have brought him Crores. Daya Shankar was man of word as in 1992; he stood by his colleague, Coasta Fernandes, during a CBI probe accusing him of killing then Goa Chief Minister Churchill Alemao's brother Alvernaz. The CBI held Fernandes guilty, but Daya Shankar fought

for him While posted in Bombay he had taken on the might of Dawood Ebrahim by raiding his strongholds, once while chasing Smugglers he had even entered Pakistani territorial water, where Pakistani Coast Guard had arrested him and India had to take help of InternationalAgencies to seek his release. He was perhaps the most effective Preventive Officer of the Indian Customs and ruled his territories without any challenge from smugglers. They changed their routes and courses to escape from him. A.K. Pandey, Former Member of C.B.E.C., in his book “GRIT THAT DEFIED ODDS” has narrated the unparallel

Continued on page 06

REVENUETRANSPARENCY TIMES

English MonthlyTransparency weeds out corruption

Opaqueness breeds it

RNI Regd. No. : DELENG/2009/29517

International Standard Serial Number 2348 – 2958

For e-paper, visit : www.thertt.com

Somesh AroraCCO, Amicus

Rarus, Ex-Comm,Customs &

Central Excise

A K AgnihotriEx-Comm, Customs& Central Excise

CORPORATE VEIL& GOVERNANCE

A K Banerjee, Chief

RTT Bureau

Superman of customs no more but will remain alive forever

AACCP0702HXM006 for the said purpose. The said EOU has obtained the permission for Domestic Tariff Area (DTA) sale from the Office of the Development Commissioner, Kandla SEZ, Gandhidham, Kutch from time to time sources say. Whereas, in terms of the provision contained u/s 3(1) of Central Excise Act, 1944, the goods, cleared by EOUs in the Domestic Tariff Area, are to be treated at par with 'imported' goods and the excise duty leviable on such clearances, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act. Further in terms of Notification No. 23/2003-CE, dated 31.03.2003 (issued under sub-section (1) of Section 5A of the Central Excise Act, 1944) as amended read with Noti.No.52/2003-Cus dt. 31.03.2003, the EOUs are liable to pay Central Excise duty at appropriate rate under Central Excise Tariff heading and shall pay such Duty against the clearances made by t5hem under DTA against the goods manufactured by them wholly from the raw materials imported under Noti. No.52/2003 ibid read with Para 6.2 of Foreign Trade Policy 2009-2014. Sources say on verification of the details filed by the assessee Unit have short paid the duty amounting Rs 88 Lakhs (appox). It is also gathered that that the contravention were observed only during the scrutiny of the returns filed by the assessee Unit and wre directed to pay the duties by the

Time and again RTT has emphasized that despite IRS ( CBIC) being a privileged class enjoying all the fruits of hard work done by the junior officers of CBIC but when any wrongdoing or delay or non issuance of show cause n o t i c e s t o p a r t y f o r recovery of government duty ,only junior officers

are penalized though the rules says that it is foremost duty and authority and power of IRS officers only to issue show cause notice. RTT has gathered a recent story about an EOU which failed to pay duty to the tune of 88 lakhs and it has been learnt that no show cause notice has been issued till going to press. Moreover the department can in no way issue show cause notice because case pertains to 2013 and thus time barred. It so happened that M/s. PMS Exports Pvt. Ltd., (100%EOU) holding LOP No. 244(1995)/EOB/206/95 Dt. 22/05/1995 dated 22.05.1995 , GIDC, Umbergaon were engaged in the manufacture of excisable g o o d s n a m e l y P l a s t i c A g g l o m e r a t e (Reprocessed Granules), Lay Flat Tubing, Refuse Plastic Bags, falling under CETSH 39159090 and 39159029 of the first schedule to the Central Excise Tariff Act, 1985 holding the Central Excise Registrat ion No. AACCP0702HXM007 dated 09.06.2015 and earlier Central Excise Registration No.

With the grace of Lord Siva the RTT enters its eleventh (11th) year. I sincerely thank our esteemed readers and contributors for making the journey eventful and successful. I sincerely pay my respect and gratitude to Shri Somesh Arora, for contributing intuitive and exciting articles since its commencement. I thank Shri A K Aghnihotri for his learned contributions to RTT for the last eight years. I also pay my utmost thanks to Shri Sumit Dutt Majumder & Shri Sukumar Mukhopadhyay for contributing thought provoking articles in my News paper for several issues. Last not least I express my gratitude and sincere thanks to my former colleagues and friends of Customs and Central Excise who have been motivating me to run this newspaper uninterruptedly.

A K BanerjeeChief RTT Bureau

Continued on page 06

Great depression of 1929 – Is the shadow of Black Tuesday going to revisit ?

Is Senior IRS Officers (CBIC) concealing duty Evasioncases causing loss to government exchequer ?????

Daya Shankara

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September 20192

Amendment to the Notification No. 57/2000 -Customs dated 08.05.2000

Synopsis: The AAR, Tamil Nadu in the case of M/s Chennai Port Trust has held that the amounts received on or after July 1, 2017 towards interest, late fees, penalty relating to services of lease/rent, due to delayed payment of consideration for those services rendered by Applicant before July 1, 2017, are liable to GST. Facts: M/s Chennai Port Trust (“the Applicant”) is engaged in supply of port services and incidental supply of goods like disposal of discarded assets. The Applicant is funct ioning under the administrative control and supervision of Ministry of shipping of Government of India. In quite a few cases, the Applicant has raised invoices during Service Tax regime and paid the Service Tax as per the then existed Point of Taxation Rules (“POT Rules”), but they are receiving interest, late fee, penalty in the GST regime for the reason that consideration for such services are received belatedly. Issue involved: Whether the amount received on or after July 1, 2017 towards interest, late fee penalty relating to the services other than continuous supply of services rendered by the Applicant before July 1, 2017 are liable to GST? Held: The Hon’ble Authority of Advance Ruling (AAR), Tamil Nadu, while observing Section 1(3), Section 7(1)(a) and Section 13 of the CGST Act, 2017 (“CGST Act”) and the Tamil Nadu Goods and Services Tax Act, 2017 (“TNGST Act”), vide Order No. 35/AAR/2019 dated July 26, 2019 held as under: From July 1, 2017 onwards, the liability to pay GST on supply of services is determined by the time of supply provisions in Section 13 of CGST Act and TNGST Act. The invoices for the supply of services have been issued before July 1, 2017, but the payment of the consideration was received late. Hence, the date of issue of invoice which is earlier is the time of supply

as per Section 13(2) (a) of CGST and TNGST Act. In this case, the time of supply would be before July 1, 2017, and accordingly the supply of original service of leasing/renting is not covered under GST. However, the amount of interest/ late fee/ penalty for the delayed payment of consideration for the original service, is received after July 1, 2017 and separate invoices viz. Rent Claim Advance (RCA) Receipt are raised by the Applicant, both only after July 1, 2017. There is a payment of a separate consideration for this tolerance of delayed payment of lease/rent. This payment is a part of the contract for supply of services of the Applicant to the port user in the course of their business. It can be said that as the Applicant has tolerated the delayed payment of consideration of lease/rent which the recipients should have paid much before, therefore, this tolerance on the part of the Applicant for the delayed payment of lease/rent by collecting an interest/late fee/penalty is a separate supply of service as covered under Section 7(1)(a) of the of CGST Act and TNGST Act. Accordingly, the time of supply for this supply will be determined by Section 13(2) of CGST Act and TNGST Act depending on the facts in each case. In any case, it would be after July 1, 2017 and hence, this supply is liable to GST. Citation: [2019] 108 taxmann.com 484 (AAR – TAMILNADU) Our Comments: It is worthwhile to note here that under the erstwhile provisions of Service Tax era, Rule 6 of the Service Tax (Determination of Value) Rules, 2006, specifically excluded the interest on delayed payment of any consideration for the provision of services, from the value of taxable services. In other words, no Service Tax was leviable on interest for delayed payment of consideration.

On the contrary, Section 15(2)(d) of the CGST Act, categorically provides that the value of supply in GST shall include interest or late fee or penalty for delayed payment of any consideration for any supply. Further, as per Section 12(6) and Section 13(6) of the CGST Act, the time of supply, to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration, shall be the date on which the supplier receives such addition in value. Considering the above conflicting provisions under pre-GST and GST regime, an important question arises as to whether a levy which was not there at the time of provision of services, can be charged in the guise of provisions of new law, merely because the point of collection of that amount falls after implementation of new law? Though the above advance ruling has considered such interest for delayed payment of consideration as a separate consideration for tolerance of act in GST, but one can vehemently argue to say that such interest is merely an additional consideration for the services which were rendered in pre-GST era, when its taxability did not exist. Reference here can be drawn from the decision of the Hon’ble Supreme Court in the case of Collector of C. Ex., Hyderabad vs Vazir Sultan Tobacco Co. Ltd. [1996 (83) E.L.T. 3 (S.C.)], wherein the Apex Court set aside levy of Excise duty on goods which were manufactured prior to levy of Excise Duty but, cleared thereafter. Even, as per the transitional provisions under Section 142(11)(b) of the CGST Act, “notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994”. Thus, ideally, such interest for delayed payment of consideration forms part of services which were rendered prior to GST

Interest/late fees for services of pre-GST era, received after 1st July 2017, are liable to GST and were leviable to tax under the provisions of the Finance Act, 1994. Hence, liability of GST must not be fastened on the same, merely because its collection has happened in GST regime. At the same time, the pretext of above advance ruling cannot be negated completely, more so in the light of provisions of time of supply under Section 13(6) of the CGST Act, which prescribes receipt of such additional amount of interest as the point for levying GST. In nutshell, such issues are bound to suffer litigation in the absence of any clear provisions. Relevant provisions: Section 13 of CGST and TNGST Act “(1) the liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section. (2) The time of supply of services shall be the earliest of the following dates, namely:- (a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or (b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or (c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply. (6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.”Source: CA Bimal Jain(info@a2ztaxcorp.com)

Notification No. 28/2019 - Customs G.S.R.---- (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 57/2000-Customs, dated the 8th May, 2000 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 413 (E), dated the 8th May, 2000, namely:- 2. In the said notification, - (a) in the opening paragraph, for the portion beginning with the words, figures and brackets “hereby exempts silver, gold and platinum, falling under headings 71.06, 71.08 and 71.10 respectively of the First Schedule to the Customs Tariff Act, 1975

(51 of 1975), when imported into India” and ending with the words, brackets and figures “from the whole of the duty of customs leviable thereon, which is specified in the said First Schedule, and from the whole of the additional duty leviable thereon under sub-sections (1), (3) and (5) of section 3 of the said Customs Tariff Act”, the following shall be substituted, namely:- “hereby exempts silver, gold and platinum of the description specified in column (3) of the Table below falling under headings 71.06,71.08 and 71.10 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India under the scheme specified in column (2) of the said Table, from so much of the duty of customs leviable thereon under the said First Schedule as specified in the corresponding entry in column (4) of the said Table, and from the whole of the additional duty leviable thereon under sub-sections (1), (3)

and (5) of section 3 of the said Customs Tariff Act:- TABLE Sl. No. Scheme under Foreign Trade Policy Description of goods Amount of duty :1. As replenishment under the Scheme for ‘Export through Exhibitions/Export Promotion Tours/Export of Branded Jewellery’ as referred to in Paragraph 4.46 of the Foreign Trade Policy, read with relevant provisions of Chapter 4 of the Handbook of Procedures. 2. (a) Gold 11.85 % (b) Silver 11.00 %3. (c) Platinum Whole of the duty of customs leviable thereon, which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). 2. Under the Scheme for ‘Export Against Supply by Nominated Agencies’ as referred to in Paragraph 4.41 of the Foreign Trade Policy, read with relevant provisions of Chapter 4 of the Hand Book of Procedures.

Gold, Silver, Platinum Whole of the duty of customs leviable thereon, which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)”;(b) the third proviso shall be omitted.F. No. DGEP/G&J/05/2017) (Anand Kumar Jha) Under Secretary to the Government of IndiaNote– The principal notification No. 57/2000-Customs, dated the 8th May, 2000 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 413 (E), dated the 8th May, 2000 and was last amended by notification No. 78/2018-Customs, dated 29th November, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 1154 (E), dated the 30th November, 2018.

Delhi Police and customs officials, in a joint raid on Saturday, arrested five Afghani men from Delhi airport and claimed to have recovered at least 370 capsules containing heroin, from their stomach. The customs later claimed this was the “biggest ever” seizure of ingested drugs from Delhi airport. Officers said the men had come to Delhi from Kandahar last Saturday. They were admitted to Ram Manohar Lohia hospital and the capsules were extracted from their body over a period five days. The total weight of the contraband recovered was about four kilograms and worth more than Rs15 crore, deputy

commissioner of customs Kalrav Mishra said, According to another customs official, the five Afghans were intercepted around 6.30pm last Saturday, when they arrived at Terminal 3 of IGI airport from Kandahar. The officer said that they had specific inputs about some Afghan suspects who might be involved in smuggling. “Their baggage was checked over suspicion of gold smuggling. Their bags were also passed through hand held metal detectors and door frame metal detectors but nothing suspicious was found. A special permission was then sought and they were

taken to Ram Manohar Lohia hospital for a detailed medical checkup,” said an officer, who did not wish to be named. The officer said X-Ray reports of the five men revealed presence of capsules in their stomach. “The hospital staff then started the process of extraction of the capsules from their body. Till Thursday, the five men remained under medical supervision amid strict security. Six customs officers and two officers from Delhi Police’s special cell were deployed to keep a watch on these men at hospital,” the officer said. Once al l 370 capsules were recovered, they were sent to a laboratory where they were cut open and heroin was

found in them. Anubha Sinha, joint commissioner, customs, said that the five men were arrested and the recovered narcotics were seized. During questioning, the Afghanis told their interrogators that they were promised a sum of $500 for delivering the drugs to a contact in Delhi. Mishra said this was the biggest seizure of ingested drugs at Delhi airport. “The value of the recovered drugs is more than Rs 15 crore. Efforts to trace their contact in Delhi is being made,” Mishra said.Source: Hindustan Times

370 capsules with 4 kg heroin found in stomachs of 5 men at Delhi airport

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Eligibility Criteria for availing of DPD Scheme by Importer

September 2019

Circular No. 29 / 2019 –Customs F. No. 450/10/2016-CusIV CBIC has taken various steps which have had the impact of reducing the dwell time as well as bringing down the logistics cost of EXIM clearances. One of the flagship initiatives in this regard has been the Direct Port Delivery (DPD) of containers to the importers thus obviating the need of routing the clearance through the Container Freight Stations (CFSs). The initiative was first launched at JNPT and thereafter extended to other ports. This one single reform alone has played a critical role in improving our ranking in the Doing Business Report 2019. Not surprising, therefore, has been the wide appreciation for this step amongst the importers and its acknowledgement by World Bank. 2. Although this initiative is in operation at all the ports , however, Board has felt the need for providing general guidelines / eligibility criteria so that reach of DPD could be made maximized. Importers who have so far not availed the benefit of DPD for reasons including lack of awareness, may now join this program with certainty. 3. Ideally, any fully facilitated Bill of Entry (BoE) filed at the gateway port ought to get the DPD benefit. However, feedback from the field has suggested that factors like non-receipt of original documents from abroad and consequent delay in issuance of Delivery Order, financial and credit woes, delay in settlement of dues of shipping lines, opening PD Account with the terminals are some of the reasons inhibiting a larger section of importers to opt for DPD. CBIC by promoting DPD has raised the bar of efficiency. It is, therefore, but natural that other players in the EXIM logistics chain get their act together so that this successful reform measure could be made even more widespread. 4. Taking all the factors into consideration, following guidelines are being prescribed for implementation of DPD across all the formations (i) Inclusions: The following categories of importers may555 opt for facility of DPD: (a) importers who have already been accorded either AEO Tier I, II or III status;

(b) importers with a clear track record of compliance and an import volume of 25 Full Container Load (FCL) TEUs through a particular port or otherwise in the preceding financial year;

Importers falling under the said categories shall furnish information prescribed in application format i.e. Annexure-A (copy enclosed). While the criterion at (b) is desirable, Chief Commissioner may, however, in deserving cases of importers, relax the TEU benchmark. Such importers could be the ones whose imports have enjoyed a consistent pattern of customs risk facilitation / who provide an assurance that they would be in a position to pick up containers directly from the terminal. This dispensation may be particularly considered for the MSME sector. (ii) Exclusions: The following categories of importers however would be excluded from facility of DPD: - (a) importers against whom a case of mis-declaration of description of goods or of concealment / diversion of imported goods / evasion of duty has been made in the preceding five years; (b) importers facing prosecution proceedings in a matter under the Customs Act, 1962; (c) those importing goods that are subjected to 100% examination in terms of extant policy; (d) importers importing mostly LCL consignments. (iii) Conditions: The facility of DPD shall only be extended only to such consignments (a) which have either been fully facilitated or not subjected to examination; and (b) importers open a PD account with the terminals and arrange for their own transport to take delivery of containers from the terminal; and (c) any other procedural formality prescr ibed by the zone for be t te r administration of DPD scheme 5. In view of the above guidelines for availing DPD, Customs field formations at sea ports where containerized cargo is received are advised to issue/re-issue Public Notices for the benefit of importers so that they could avail DPD. In order to monitor the DPD percentages, all customs formation

incharge of gateway ports shall publish the monthly percentage data related to DPD on their websites. Each zone shall also send a consolidated month/ port wise report of DPD percentage every quarter to the Board at jscus@nic.in and dircus@nic.in. 6. Difficulties, if any, may be brought to the knowledge of Board.(Zubair Riaz) Director (Customs)ANNEXURE-A(ON THE LETTER HEAD OF THE IMPORTER) APPLICATION FOR DPD (DIRECT PORT DELIVERY)

1. Name and Address of the Importer: ………………

2. Whether the Importer is a Manufacture or a Trader:

3. IEC: …………………………………. (Copy Enclosed)

4. GST No: …………………………….

5. Container Details / Details of imports made at ______ (port name)/port code: - YEAR

No. RMS Containers / TEUs Value of Imports Duty PaidMajor Commodities imported 2016-17 2017-18 2018-19

6. Details of Tests / NOCs required (if any): for clearance of any commodity (details commodity wise)

7. Details of Commodities where:

Assessment is provisional …………………………………………… (details commodity wise) …………………………………………….

8. Whether commodities are facilitated through RMS

9. Authorised Person –Name- ……………………………………

Contact No. -.………………………............……….

Self/CHA No

10. Director/CEO

Name……………………………….....

Contact No………….………………...

Email id: ……………………………...

11. Factory Address

12. Jurisdictional GST Address

13. I hereby undertake to-

(i) Arrange container trailers for clearance of DPD containers from the port.

(ii) Clear all the containers within 24 hrs of landing in the port under DPD. (iii) File advance bill of entry and pay Customs duty for containers to be cleared in DPD prior to arrival of the vessel. ( iv) Provide de ta i l s of the containers to be cleared in DPD, to the Customs and port authorities, prior to the arrival of the vessel.(v) Produce all the containers selected by customs for scanning and for any investigation, as informed at any time. (vi) Inform any change in the status of AEO/ IEC to the concerned Commissioner of Customs in writing and the port authorities immediately. 14. Self-Declaration-(a) I hereby, solemnly declare that the information furnished above is true and correct to the best of my knowledge. I understand that in the event of any information found to be incorrect, my application is liable to be reject and I am liable to penal action.(b) We do not have any case of mis-declaration or duty evasion booked against us by Customs, Goods and Service Tax Authorities in last five years. Date:-Signature of Authorized Signatory: Name: Designation: Stamp: Encl: IEC Co, C Ex. Registration copy, Pan card Copy, GST copy & Year wise (Last three FYs) list of Bs/E vide which RMS containers are cleared.

PAN will be generated automatically if a taxpayer uses Aadhaar for ling returns: CBDT The Income Tax Department will automatically issue PAN to a taxpayer using Aadhaar number for ling returns as part of a new arrangement to link the two databases. According to a notication issued by the CBDT on August 30, a person who furnishes Aadhaar, as they do not have PAN, "shall be deemed" to have applied for allotment of PAN and they will not be required to apply or submit any more documents. Pramod Chandra Mody Chairman of CBDT, the nodal national agency responsible for administering Income Tax department. The rule has come into effect from September 1, it said. The notication said t h e t a x d e p a r t m e n t w i l l " o b t a i n demographic information of an individual from the Unique Identication Authority of India (UIDAI)" for allotment of Permanent Account Number (PAN), a ten-digit alphanumeric identier issued by it.The Central Board of Direct Taxes (CBDT) frames policy for the tax department. CBDT chairman P C Mody had told PTI in interview in July that the department would "suo motu" allot a fresh PAN to a person who les I-T Returns (ITR) with only Aadhaar as part of a new arrangement to link the two databases. "In cases where Aadhaar is being quoted and PAN is not there, we could

possibly think on the terms of allotting a PAN to the person (who is ling income tax return)." "The law provides that the assessing ofcer can suo motu allot PAN. So, if Aadhaar is being quoted without PAN, I give him the PAN. It becomes linked," the CBDT chairman had said. Mody was asked if the Income Tax Department-issued PAN will be dead after Finance Minister Nirmala Sitharaman in her Budget speech on July 5 announced that PAN and Aadhaar are being made interchangeable as the government will allow those who do not have PAN to le I-T returns by simply quoting their Aadhaar number and use it wherever they are required to quote PAN. Linking of the two databases is now compulsory and backed by law, the CBDT chief had said. While Aadhaar is issued by UIDAI to a res iden t , PAN i s a 10-d ig i t alphanumeric number allotted by the tax department to a person, rm or entity. Aadhaar holds all vital information of an individual such as name, date of birth, gender, photo and address, and also biometrics. The same set of information is required to get a new PAN. As per data, over 120 crore Aadhaar numbers have been issued in the country and about 41 crore PAN numbers have been generated. Out of these, more than 22 crore

PANs are linked with Aadhaar. Section 139 AA (2) of the I-T Act stipulates that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate their Aadhaar number to tax authorities. After the Supreme Court upheld the section 139AA, the government in March this year declared that the deadline for linking PAN-Aadhaar was available till September 30. The apex court, in September last year, had declared the Centre's agship Aadhaar scheme was constitutionally valid and held that the biometric ID would remain mandatory for

ling of I-T returns and allotment of PAN. The latest notication said the tax department will be "responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing or intimation or quoting or authentication of Aadhaar number or obtaining of demographic information of an individual from the UIDAI, for allotment of permanent account number and issue thereof".PTI

Seeks to rescind notification No. 11/2018-Customs (ADD), dated 20.3.2018, inpursuance of New Shipper Review final findings issued by DGTR

Notification No. 35/2019-Customs (ADD) G.S.R. (E).- In exercise of the powers conferred by sub-rule (2) of rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, hereby rescinds the notification of the Government of India, in the Ministry of Finance (Department of

Revenue), No.11/2018- Customs (ADD), dated the 20 th March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 248 (E), dated the 20 th March, 2018, except as respects things done or omitted to be done before such rescission.[F.No.354/319/2011-TRU (Pt-III)] (Ruchi Bisht)Under Secretary to the Government of India

For e-paper, visit : www.thertt.com4 September 2019

Seeks to further amend notification no. 53/2011 dated 01.07.2011, to increase the rate of duty of customs by 5 percent, for a period of 180 days, on imports of RBD Palmolein/Palm Oil originating in Malaysia and imported under India-Malaysia Comprehensive Economic Cooperation Agreement, on recommendation of preliminary findings of Directorate General of Trade Remedies under India-Malaysia Comprehensive Economic Cooperation Agreement (Bilateral Safeguard Measures) Rules, 2017.Notification No. 29/2019-CustomsNew Delhi dated the 4th September, 2019 G.S .R. (E) .— Whereas the Directorate General of Trade Remedies in the matter concerning imports of “Refined Bleached Deodorized Palmolein and Refined Bleached Deodorized Palm Oil” (hereinafter referred to as the subject goods), falling under tariff item [1511 90 10] or tariff item [1511 90 20] of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Cus toms Ta r i f f Ac t ) , i n i t i a t ed an investigation in terms of rule 9 of the IndiaMalaysia Comprehensive Economic Coopera t ion Agreement (Bi la te ra l Safeguard Measures ) Rules , 2017 (hereinafter referred to as the said rules) vide notice of initiation Case No. (SG) 04/2019, dated the 14th August 2019 published in the Gazette of India, Extraordinary the dated 14th August 2019. And Whereas, in the preliminary f i n d i n g s o f B i l a t e r a l S a f e g u a r d Investigation issued vide notification (Bilateral Safeguard Investigation) case no (SG) 04/2019, dated the 26th August 2019, published in the Gazette of India, Extraordinary on 26th August, 2019, the

Director General has noted that: - (a) the import of subject goods into India has shown significant increase. Imports of subject goods from Malaysia increased from 626,362 MT in 2016-17 to 2,596,225 MT in JanuaryJune, 2019 (on annualized basis) thus showing an increase of 314 percent; (b) quarterly movement in imports shows that imports were just 27,206 MT in OctoberDecember, 2018, which surged to 804528 MT in April-June, 2019 thus showing a surge of almost 29 times increase; (c) this increase in import at low prices has led to idling of significant capacities of the domestic industry during the period of investigation; (d) though domestic industry has huge installed capacity, it is unable to increase its production of subject goods despite increase in domestic demand of the subject goods; (e) market share of the domestic industry has declined significantly and came to a preliminary conclusion that critical circumstances exist where delay in imposition of safeguard measures would cause irreparable damage to the domestic producers and recommended an increase in

rate of duty of customs by 5 percent, for a period of 180 days, on imports of subject goods, originating in Malaysia and imported under India-Malaysia Comprehensive Economic Cooperation Agreement. Now, therefore, in exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) read with rule 9 of the said Rules, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby increases the rate of duty of customs by 5 percent, on imports of subject goods for 180 days, originating in Malaysia and i m p o r t e d u n d e r I n d i a - M a l a y s i a Comprehensive Economic Cooperation Agreement by making the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.53/2011-Customs, dated the 1st July, 2011, published in the Gazette of India, vide number G.S.R. 499 (E), dated the 1st July, 2011, namely: - In the said notification, (i) after Sl. No. 130 and the entries relating thereto, the following Sl. No. and entries shall be inserted, namely: - (1) “130A(2) 151190

(3) All goods(4) 50.0” (ii) after the Table, the following shall be inserted namely: -“Provided that nothing contained in serial number 130 and entries relating thereto of the said table shall have effect up to and inclusive of the 2nd day of March 2020: Provided further that nothing contained in serial number 130A and entries relating thereto of the said table shall have effect on or after the 3 rd day of March 2020.”. [F. No. 354/132/2019-TRU] (Ruchi Bisht) Under Secretary to the Government of India Note: The principal notification No. 53/2011-Customs, dated the 1st July, 2011 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i), vide number G.S.R. 499 (E), dated the 1st July, 2011 and was last amended vide notification No. 84/2018-Customs, dated the 31st December, 2018, published in the Gazette of India, Ext raord inary, Par t I I , Sec t ion 3 , SubSection (i), vide number G.S.R. 1259 (E), dated the 31st December, 2018.

Seeks to waive the late fees in certain cases for the month of July, 2019 for FORM GSTR-1 and GSTR-6 provided the said returns are furnished by 20.09.2019

Notification No. 41/2019 – Central Tax G.S.R. (E).- In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Central Government, on the recommendations of the Council, hereby waives the amount of late fee payable under section 47 of the said Act, by the following class of taxpayers: – (i) the registered persons whose principal place of business is in the district mentioned in column (3) of the Table below, of the State as mentioned in column (2) of the said Table, having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, who have furnished, electronically through the common portal, details of outward supplies in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017, for the month of July, 2019, on or before the 20th September, 2019; (ii) the registered persons whose principal place of business is in the State of Jammu and Kashmir, having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year, who have furnished, electronically through the common portal, details of outward supplies in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017, for the month of July, 2019, on or before the 20th September, 2019; (iii) The Input Service Distributors whose principal place of business is in the district mentioned in column (3) of the above said Table, of the State as mentioned in column (2) of the said Table, who have furnished, electronically through the common portal, return in FORM GSTR-6 of the Central Goods and Services Tax Rules, 2017, for the month of July, 2019, on or before the 20th September, 2019;

(iv) the Input Service Distributors whose principal place of business is in the State of Jammu and Kashmir, who have furnished, electronically through the common portal, return in FORM GSTR-6 of the Central Goods and Services Tax Rules, 2017, for the month of July, 2019, on or before the 20th September, 2019.TableSl.) 1. Bihar : Araria, Kishanganj, Madhubani, East Champaran, Sitamarhi, Sheohar, Supaul, Darbhanga, Muzaffarpur, Saharsa, Katihar, Purnia, West Champaran.2. Gujarat: Vadodara.3. Karnataka : Bagalkot, Ballari, Belagavi, Chamarajanagar, Chikkamagalur, Dakshina Kannada, Davanagere, Dharwad, Gadag, Hassan, Haveri, Kalaburagi, Kodagu, Koppal, Mandya, Mysuru, Raichur, Shivamogga, Udupi, Uttara Kannada, Vijayapura, Yadgir.4. Kerala : Idukki, Malappuram, Wayanad, Kozhikode.5. Maharashtra : Kolhapur, Sangli, Satara, Ratnagiri, Sindhudurg, Palghar, Nashik, Ahmednagar.6. Odisha : Balangir, Sonepur, Kalahandi, Nuapada, Koraput, Malkangiri, Rayagada, Nawarangpur. 7. Uttarakhand : Uttarkashi and Chamoli[F. No. 20/06/07/2019-GST] (Ruchi Bisht) Under Secretary to the Government of India Revised Norms for Execution of B a n k G u a r a n t e e u n d e r A d v a n c e Authorisation, DFIA and EPCG Schemes Circular No. 31/2019-Customs F.No.605/25/2019-DBK Board is in receipt of references from field formations and inputs from trade and industry seeking clarification as to what should be the basis for waiver of Bank Guarantee to be executed with Customs in the Goods and Services Tax (GST) regime under AA, DFIA and EPCG schemes in

respect of manufacturer exporters/service providers. 2. The matter has been examined. GST has come into force from 01.07.2017 whereby Service Tax as well as major portion of Central Excise have been subsumed in the GST. Board’s Circular No. 58/2004-Cus dated 21.10.2004 (hereinafter referred to as 'the said Circular’) as amended vide Circular Nos. 17/2009-Cus dated 25.05.2009, 32/2009-Cus dated 25.11.2009, 06/2011-Cus dated 18.01.2011, 08/2013-Cus dated 04.03.2013 and 15/2014-Cus dated 18.12.2014 inter alia prescribes the norms for execution of Bond/Bank Guarantee in respect of imports made under the AA, DFIA and EPCG Schemes. The said Circular and amending Circular No. 17/2009-Cus dated 25.05.2009 extend exemption from execution of Bank Guarantee based on export turnover, quantum of duty, tax paid etc. 3. In the wake of GST regime, the norms for execution of Bank Guarantee under AA, DFIA and EPCG schemes have been r ev iewed and the fo l lowing clarification is given:- (i) Manufacturer exporters/Service Providers registered with the GST authorities (Centre/State/Union Territory) who have been exporting during the previous two financial years and have minimum export of Rs. 1 crore or more during the preceding financial year shall also be eligible to claim exemption from furnishing Bank Guarantee under category (d) of importers specified in Table given in para 3.1 of the said Circular. ( i i ) M a n u f a c t u r e r exporters/Service Providers registered with the GST authorities (Centre/State/Union Territory) who have paid GST of Rs.1 crore or more during the preceding financial year shall also be eligible to claim exemption from furnishing Bank Guarantee under

category (e) of importers specified in Table given in para 3.1 of the said Circular. 4. In order to avoid difficulties in the GST regime regarding furnishing of proof of export performance or payment of duty required to be certified by the jurisdictional Superintendent of Central Excise (para 3.2(b) of the said Circular), it has been decided to discontinue the requirement for procurement of such certificate from Central Excise authorities. In other words, in cases where the AA/DFIA/EPCG authorisation holder is a registered member of an Export Promotion Council, he shall produce a certificate of export performance or payment of duty/GST for the purpose of availing Bank Guarantee exemption from the concerned Export Promotion Council on the lines of similar facility available earlier. In cases where the AA/DFIA/EPCG authorisation holder is not a registered member of an Export Promotion Council, he may produce such certificate duly authenticated by a practicing Chartered Accountant who is registered with the GST Department (Centre/State/Union Territory) for payment of GST. This is also on the lines of similar facility available earlier. The Chartered Accountant will mention his GSTIN and other registration details in the certificate on the lines stipulated earlier.

5. The other provisions of the said Circular, as amended from time to time, remain unchanged. A suitable Trade Notice and Standing Order may be issued for the guidance of the trade and staff. Difficulties faced, if any, in implementation of the Circular may be brought to the notice of the Board at an early date.(Ravi Kant) OSD (Drawback)Tel: 011 2336 2843

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Witness Protection Scheme, 2018 provides for protection of witnesses based on the threat assessment and protection m e a s u r e s i n t e r a l i a i n c l u d e protection/change of identity of witnesses, their relocation, installation of security devices at the residence of witnesses, usage of specially designed Court rooms, etc. The Scheme provides for three categories of witness as per threat perception: Category ‘A’: Where the threat extends to life of witness or his family members, during investigation/trial or thereafter.

Category ‘B’: Where the threat extends to safety, reputation or property of the witness or his family members, during the investigation/trial or thereafter. Category ‘C’: Where the threat is moderate and extends to harassment or intimidation of the witness or his family member’s, reputation or property, during the investigation/trial or thereafter. The Scheme provides for a State Witness Protection Fund for meeting the expenses of the scheme. This fund shall be operated by the Department/Ministry of Home under State/UT Government and shall

comprise of the following:i. Budgetary allocation made in the Annual Budget by the State Government;ii. Receipt of amount of costs imposed/ o r d e r e d t o b e d e p o s i t e d b y t h e courts/tribunals in the Witness Protection Fund;i i i . Donations/ contributions from Philanthropist/ Charitable Institutions/ Organizations and individuals permitted by the Government.iv. Funds contributed under Corporate Social Responsibility. The Hon’ble Supreme Court of

India in its Judgment dated 05.12.2018 in Writ Petition (Criminal) No. 156 of 2016 has endorsed the Scheme. As per Article 141/142 of the Constitution, the Witness Protection Scheme, 2018 endorsed in the said Judgment of the Supreme Court is binding on all Courts within the territory of India and enforceable in all States and Union Territories.This was stated by the Minister of State for Home Affairs, Shri Nityanand Rai in a written reply to question in the Rajya Sabha today.Source: Punekar News

Is there a witness protection scheme ?

Notification No. 35/2019-Customs (ADD) G.S.R. (E).- In exercise of the powers conferred by sub-rule (2) of rule 22 of the Customs Tar i ff ( Ident i f ica t ion, Assessment and Collection of Anti-dumping Duty on Dumped Ar t i c l e s and fo r Determination of Injury) Rules, 1995, the Central Government, hereby rescinds the notification of the Government of India, in the Ministry of Finance (Department of

Revenue), No.11/2018- Customs (ADD), dated the 20 th March, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 248 (E), dated the 20 th March, 2018, except as respects things done or omitted to be done before such rescission. [F.No.354/319/2011-TRU (Pt-III)] (Ruchi Bisht)Under Secretary to the Government of India

Seeks to rescind notification No. 11/2018 -Customs(ADD), dated 20.3.2018, in pursuance of NewShipper Review final Findings issued by DGTR

Notification No. 39/2019 – Central Tax G.S.R. ….(E).— In exercise of the powers conferred by sub-section (2) of section 1 of the Finance (No. 2) Act, 2019 (23 of 2019), the Central Government hereby appoints the 1st day of September,

2019, as the date on which the provisions of section 103 the said Act, shall come into force.[F. No. 20/06/12/2018-GST] (Ruchi Bisht) Under Secretary to the Government of India

Seeks to bring Section 103 of theFinance (No. 2) Act, 2019 in to force

A m e n d m e n t t o S e c t i o n 5 0 Prospective or Retrospective- Danger Signals for Taxpayers and Diverse Views in Council and Another matter for the Judiciary- GST Council Minutes-Meeting Dated-21st June 2019 In the 35th GST Council Meeting Held on 21st June 2019, matter regarding prospective and retrospective impact of Amendment of Section 50 of CGST Act, 2017 was discussed and GST Council approved it as a prospective amendment. The matter of prospective/retrospective impact of is sub-judice to Telangana High Court. Serial No.9: Section 50-Interest on delayed payment of tax 13 .14 . Shr i H.K. Dwivedi , Additional Chief Secretary (Finance), West Bengal, stated that his State supported the proposed amendment and suggested that this should be given retrospective effect as it was a beneficial legislation. The Secretary enquired about the views of the Law Committee regarding enacting this provision with retrospective effect. The Principal Commissioner (GST Policy

Wing), CBIC, s tated that the Law Committee had considered this issue and they were of the view that since a large number of taxpayers would have paid interest on the full amount, a retrospective amendment could lead to a situation where the Government would be forced to pay large amounts of refund. It was, therefore, felt that it would be better to enact the legislation with prospective effect. The Secretary observed that given the financial outgo and complications in the IT system, enacting this amendment with retrospective effect could create problems. 13.15. The CST, Tamil Nadu, stated that the question of amendment had arisen due to the judgment of the Hon’ble High Court of Telangana. In his view, it was never the intention to levy interest on gross amount and the Hon’ble High Court judgement had resulted in it being interpreted as the gross amount. He added that there could be a few taxpayers who would have paid but the vast majority of taxpayers would have not paid. Therefore, if this provision was not enacted with retrospective effect, it would create

problems for the taxpayers and would be a subject of lot of representations. Dr. P.O. Vaghela, Chief Commissioner, State Tax, (CCST), Gujarat, stated that when the law was framed, the intention of the law was clearly to pay interest on the delayed payment on the gross amount of the tax payable. If now a relaxation was being proposed and i f i t was done wi th retrospective effect, it would lead to floodgates of refund claims. The Hon’ble Deputy Chief Minister of Bihar stated that the amendment should be on prospective bas i s i n o rde r t o avo id po t en t i a l complications. The Secretary observed that in taxation matters, even the orders ofHon’

ble Courts were mostly with prospective effect and suggested that this provision should be enacted with prospective effect. The Council agreed to this suggestion. So Amendment is Retrospective not because it should legally be so but because there would be many refund claims. Looks like another matter wherein we haven’t heard the last word. The above minutes may just have highlighted the basic reason behind Judgement of Hon’ble Madras High Court for holding Constitution of Tribunal as Unconstitutional in light of Technical Members exceeding Judicial Members.Source: gst-online.com

IRDAI imposes Rs 1.11 crore penalty on Policybazaar

The 37th GST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant, Finance Ministers of States & UTs and seniors officers of the Ministry of Finance. The GST Council, in its meeting, recommended the following Law & Procedure related changes : Relaxation in the filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19 as under: waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; andfiling of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have an aggregate turnover up to Rs. 2 crores made optional for the said tax periods. A Committee of Officers to be

constituted to examine the simplification of Forms for Annual Return and reconciliation statement. Extension of the last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional. In order to nudge taxpayers to timely file their statement of outward supplies, the imposition of restrictions on availing of the N by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act 2017. New return system now to be introduced from April, 2020 (earlier proposed from October, 2019), in order to give ample opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 – March,

2020. Issuance of circulars for uniformity in the application of the law across all jurisdictions: procedure to claim a refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum; eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and clarification regarding the supply of Information Technology enabled Services (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as an intermediary. R e s c i n d i n g o f C i r c u l a r No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-

sales discount. Suitable amendments in the CGST Act, UTGST Act, and the corresponding SGST Acts in view of the creation of UTs of Jammu & Kashmir and Ladakh. Integrated refund system with disbursal by the single authority to be introduced from 24th September 2019. In principle decision to link Aadhar with the registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds. In order to tackle the menace of fake invoices and fraudulent refunds, in-principle decision to prescribe reasonable restrictions on the passing of credit by risky taxpayers including risky new taxpayers.Source: Tax scan

37th GST Council Meeting: Major Recommendations

Text of the Supreme court judgement follows:IN THE SUPREME COURT OF INDIAINHERENT JURISDICTIONR.P. (C) No . 1731 /2019 in S .L .P. (C) No.22008/2018UNION OF INDIA & ORS.Petitioner(s)VERSUSP. AYYAMPERUMALRespondent(s)O R D E R Delay in filing the Review Petition is condoned. This review petition has been filed against Order dated 23rd July, 2018 whereby the Special Leave Petition was dismissed. We have considered the review petition on merits. In our opinion, no case for review of Order dated 23rd July, 2018 is made out. Consequently, the review

petition is dismissed on merits. Pending application filed in the matter also stands disposed of.....................J(N.V. RAMANA).....................J(DEEPAK GUPTA)NEW DELHI; 8TH AUGUST, 2019. Digitally signed by VISHAL ANAND Date: 2019.08.09 16:55:01 ISTITEM NO.1004SECTION XIIS U P R E M E C O U R T O F I N D I ARECORD OF PROCEEDINGSR.P.(C) No. 1731/2019 in SLP(C) No. 22008/2018UNION OF INDIA & ORS.Petitioner(s)

Increment on 1st July, retired on 30th June: Supreme Courtdismissed Review Petition 1731/2019 filed by the Government

By CirculationUPON perusing papers the Court made the followingO R D E RDelay in filing the Review Petition is condoned.The review petition is dismissed on merits in terms of the signed order. Pending application filed in the matter also stands disposed of.(VISHAL ANAND) COURT MASTER (SH)(RAJ RANI NEGI) ASSISTANT REGISTRAR

VERSUSP. AYYAMPERUMALRespondent(s) (FOR ADMISSION and IA No.98411/2019-STAY APPLICATION and IA No.98414/2019-CONDONATION OF DELAY IN FILING REVIEW PETITION ) Date : 08082019 This petition was circulated today. CORAM : HON'BLE MR. JUSTICE N.V. RAMANA HON'BLE MR. JUSTICE DEEPAK GUPTA

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exercised on grounds which are outside the statute law relating to companies and are based on principles which are uncodified. Those circumstances have no other definition, excepting that they are l inked by one common thread of protecting the public interest. Thirdly, because of the elusive and uncodified character of those circumstances, differences of opinion are bound to arise between the trial judge and the appellate cou r t , so t ha t l ega l adv i se r s o f corporations can never predict with certainty what view the court will take about a particular transaction, when it is argued that someone other than the company should be held liable. In a sense, the jurisdiction to lift the corporate veil which the courts have commenced exercising is analogous to the jurisdiction which the courts in equity started exercising, in order to remove or reduce injustice or hardship in specific situations that arose from strict application of

common law rules. The master principle was justice and equity, but the situations amenable to that principle could never be codified. This very elusive quality of the doctrine of lifting the veil has encouraged academic thinking and discussion on the subject It is common experience that where the sources of legal doctrine in a particular sphere are not the bare bones of a statute, but the flexible tissues of case law, academicians feel tempted to offer not only an analysis of what has gone into the law by pas t ru l ings , but a lso an anticipation of what is likely to enter the f i e l d o f l a w b y f u t u r e j u d i c i a l pronouncements. This is not a process peculiar to the sphere of company law. Statutory interpretation of rules themselves throw up problems which can be attributed to a particular statutory fiction. Two general principles, apparently in conflict with each other, seem to be operative. These are: A: In interpreting a statutory

of the state of affairs." - East & Dwelling Co. Ltd. v. Finsbury Borough Council [1951]2 All ER 587 (HL). To quote a proposition laid down in the context of sections 42 and 43 of the Indian Income-tax Act, 1922 (deeming the agents of non-residents to be the assessees), "now, when a person is deemed to be something, the only meaning possible is that whereas he is not in reality that something, the Act of Parliament requires him to be treated, as if he were" (p.56) - CIT v. Bombay Corpn. AIR 1930 PC 54. B: But there is a counter principle, which tells us that a fiction should not be extended beyond the purpose for which it is created. The court is entitled to ascertain for what purposes and between what persons the statutory fiction is to be resorted to. It is by virtue of this counter principle; it seems that courts exercise jurisdiction to lift the corporate veil.

provision creating a legal fiction, once the purpose of the fiction is ascertained, the court must give it its logical scope. After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion - State of Bombay v. Pandurang Vinayak AIR 1953 SC 244. To that end, it will be proper and even necessary to assume all those facts on which alone the fiction can operate - CIT v. Sardar Teja Singh ATR 1959 SC 352. In a passage which is very often quoted, Lord Asquith stated : "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, m u s t i n e v i t a b l y f l o w e d f r o m o r accompanied it. The statute says that you must imagine a certain state of affairs ; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries

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qualities of Daya Shankar in following words:-“Let me ask this simple question to young recruits of the Customs and Excise services -Who is Daya Shankar? I am more than sure that the fresh batches of officers of all ranks will not know such important parts of glorious history of Indian Customs which had locked horns with resourceful and hi-tech gadgets- equipped smuggling syndicates, specialising in gold and electronic goods smuggling through the sea routes. Officers of today have to man and plug only the official route of imports to prevent frauds. But, only about 30 years back, the entire smuggling scenario was bone-chillingly scary in the country, with two unequals fighting serious battles. Customs being ill-equipped in terms of modern gadgets and infrastructure had unrivalled strength of only the law on its side. And other party was t he f ea r some communi ty o f smugglers. So lucrative and well-organised it was then that it gave birth to an icon like Dawood Ibrahim - an international terrorist, and the force behind the serial bomb blasts in Mumbai. But, do the young generations of Customs officers know that one officer whom Dawood used to fear was Mr. Daya Shankar! Once in an interview with The Illustrated Weekly, Dawood was quoted as expressing his wish to work with Mr. Daya Shankar as an Inspector! So devastating was Mr. Daya Shankar’s preventive aura among the smuggling syndicates along the Gujarat coast those days. And what were those exemplary qualities of Mr. Daya Shankar? If you read the book you may find that none of them was outlandish and out of the world! But we all know that what makes a quality rare in today’s world is the simple rule of being honest to one’s duty and application of mind. Among the multiple inborn and acquired assets of Mr. Daya Shankar, the two prominent assets were his honesty and absolute courage! He used to be perceived so incorruptible by the smugglers that none ever made even an attempt to send him a feeler. And courage was indeed in surplus in his case. In spite of lack of infrastructural support and overt departmental back-up in the interiors of the coast, he would lead his team of daredevils in a slow-moving dhow to intercept the goldladen dhows coming from Dubai. Undeterred by the fact that the smugglers’ dhows had the advantage of getting tips from Dubai through satellite

mobile phones, he used to chase and trap them in the deep sea rather than the coastline here the consignments used to disappear in small lots.” Similarly, let's ask the young Customs officers about an officer called Costao Fernandes? Who was he? What did he do? What is that Supreme Court judgement in which he was instrumental, and that landmark judgement came as a shield to the officers in the Government, honestly discharging their duties. A K Pandey on his untimely death bemoan with these words ”IT was very sad to learn about the premature demise of Daya Shankar. The service regrettably had lost him much earlier. He would, however, be fondly remembered by all who knew him, particularly those who had occasion to work closely with him.When honesty combines with courage, it makes for an indomitable soul, for nerves of steel, w h i c h c a n w i t h s t a n d a n y challenge. And honesty of such people is out of conviction and not fear. It may not instantly change the system,but leaves an indelible impact - a small step which may ultimately lead to change. Every service has such people. Daya Shankar was the ONE in our service. Such people want nothing in return, not even a name and they define what public service is. Our system does not need the honest who are unconcerned about their surroundings. It needs honest who have the courage to cleanse the system. It is certainly not self enrichment or business. Ironically, it has become just that and with a brazenness. Fence eats the crop, and having nourished on it, eats it with greater vigour ever after. Instances are not wanting, where many a public servant having robbed the exchequer, walk away with a smirk to occupy even more vintage position, thanks to their protectors and supporters. But a churning is going on currently. This time it seems the change may come. But honesty of conviction cannot come overnight. It takes time to take root. People however are not ready to wait. It has been a long wait already. Therefore till that happens, honesty in public services has to be brought about by the fear of a strong law. People, who are honest out of conviction, have to be at the helm. If such change comes, the efforts of the likes of Daya Shankar will not have gone in vain” Srinivas Rao, the then Addl Director, DRI on Daya Shankar “Daya Shankar joined the Indian

integrity stood above everything else.” S i n c e D a y a S h a n k a r w a s singlehandedly ins t rumenta l in p revent ing smuggling activities in highly lucrative and organized smuggling along Maharashtra and Gujarat coastlines, the Customs top brass thankfully perceived a major counter-threat to his life. Thus came numerous suggestions to keep him away from the radar of possible attacks. And one of the suggestions Daya Shankar probablyunwillingly accepted was to take a 'Study Leave' and go to Australia. Because of certain local policies of the Australian Government he came back to India after a year but since he had not finished his research work, he was very keen to do so if an opportunity came his way. And, that indeed came after a couple of years. He went back to Australia to finish his Ph.D in 2003. Predictably, he lost himself in his research work relating to IPRs. A man, endowed with highly desirable traits like dedication to whatever he does, high IQ and acute hunger for knowledge, forgot to fulfill the procedural niceties of his parent department which initiated disciplinary action for unauthorized absence from the Department once it received his notice for voluntary retirement in 2005. However it took six years for the CBEC to accept his voluntary retirement. Exercising his powers the CBEC Chairman is learnt to have decided to drop the disciplinary charges against Daya Shankar and the Union Finance Minister, after getting to know the 'least known tales' about him has not only shared the Chairman's conviction and accepted the notice for voluntary retirement w.e.f 2005 but also noted on the file that ''he is an exceptional, good and honest officer'' and the super hero of customs finally got justice from the Finance Minister With the untimely demise of the of Daya Shankar the Customs fraternity has lost its Super hero, who will always be remembered for his exemplary and unparallel courage and devotion to his duties. A person like Daya Shankar never dies rather they are always alive and remains in the heart of the people. Source : The Times of India, Tax India online, ELT, A K Pandey’s book “GRIT THAT DEFIED ODDS”.This article is reproduction of article published in RTT in September 2012in a tribute to a legend, immortal and Super Hero of Customs.

Revenue Services in the year of 1978. Naturally talented, brilliant, irreverent and eccentric in the early stages of his career itself, he distinguished wherever he worked with unflinching courage and supreme dedication. In early stages of his career itself, he earned a reputation as a man of integrity to the core, which he maintained throughout his life in all walks. His reputation as a formidable officer came to fore while he was posted atMumbai Airport and subsequently as an Assistant Commissioner, at Daman Coast, DRI Mumbai, M&P Mumbai and in GOA where he stood up for an honest inspector who took on the Chief minister’s brother and exposed that even the CBI is toeing the line of powerful and influential. At Mumbai Airport, it was known to everyone that while he was on duty, Smugglers got themselves off loaded from foreign destinations. While at Daman - one of the most vulnerable places for smuggling gold and silver – Shri Daya Shankar, took upon with Mafia Don – Bakia and later Jogi- Nani@LalluJogi. He arrested both of them and stopped their smuggling activities and instilled a lot of confidence in the people of Daman district.What Police Department at Daman failed to do, Shri Daya Shankar could do single handedly. In another similar case, the erstwhile Chief Minister of Goa was investigated by him for smuggling activity and got him detained under COFEPOSA. Daya Shankar had excellent network of people and was capable of generating continuous intelligence on many issues related to smuggling, terrorism, Narco trafficking etc. Mumbai Police and Intelligence Bureau would seek specif ic information from him on complicated cases and it may not be incorrect to say that without his inputs many of the actions initiated by these Agencies would not have yielded results. For all his credible work, there were approved rewards in the form of cash incentives for Shri Daya Shankar, which were not accepted by him and returned to the Government. He could have got rewards of more than a crore of rupees in the eighties and nineties when there were no ceilings on the amount of rewards. But he did not accept even a penny as reward for his work. He considered his work as a part of his responsibility and these cash incentives did not motivate him – he was already an Inspiration by himself. No amount of money inspired him – his honesty and

Superman of customs no more but will remain alive forever

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Continued from page 01

jurisdictional Range Officer vide letters dtd. (i)17.12.2015, (ii) 22.2.16, (iii) 3.3.16, (iv) 28.4.16, (v) 5.5.16 (vi) 26.5.16, (vii) 22.7.16 which were duly received by authorized person of the assessee Unit. since the assessee Unit had failed to pay up the duty liabilities despite the above letters, further letters were sent to the assessee Unit directing to comply with the duty discharge liability, by the jurisdictional Range Officer vide letters dt. (i) 19.8.16, (ii) 1.9.16, (iii) 4.10.16, (iv) 17.11.16 and (v) 15.12.16. However, all these letters addressed to the assessee Unit were returned undelivered with remarks on the envelope “closed”/ “not found”. As the letters were returned undelivered frequently the officers of the Range-II, Umergaom visited the factory premises of the assessee Unit on 22.12.2016 sources say and were found that the Unit is closed. Accordingly, the Officers drew a Panchnama in the presence of two independent panchas and pasted the same on the closed premise wall of the assessee Unit sources say. Now the real picture starts. Despite in knowledge of all senior officers that the party is question in not complying with the direction issued by Central Excise officers vide their numbers of letter as mentioned above to pay duty , the Joint commissioner at that time did not issue any show cause notice and now it has become time barred and ultimately IRS of CBIC will make scapegoat of Superintendents and Inspectors.

The matter was buried under the carpet but when information was sought from the department, the department started to manipulate to conceal the facts . In fact the department intimated in writing to the information seeker by the C G S T a n d C E H q r s D a m a n Commissionerate that the relevant record pertaining to the case is not available with them. But the matter of fact is that the unit in question was under the jurisdiction of Central excise till introduction of GST and therefore the department cannot say that record is not available and rather a ploy to conceal the fact . Further when the said information was sought from CGST and CE Umergaon division the concerned higher officer blatantly denied information on the pretext of third party information. The Finance ministry should take note of the fact when information was again sought the CGST and CE Umergaon division intimated that M/S PMS Export Pvt Ltd 100% EOU has categorically denied to share any kind of information related to itself to any third party. Further the disclosure of information would harm the competitive position of third party and no larger public interest would be served by disclosure of the information sought. What a pity that the CGST and Central Excise senior officers believes that nonpayment of duty and subsequent non issuance of show cause notice resulting in loss to government exchequer is absolute correct but if some any citizen ask for information about that loss they should tell

books, none can dare because their fraternity is sitting there to help them and to do injustice towards junior which is being done regularly. RTT has reiterated repeatedly in its many issues that large numbers investigation are carried out and in many cases after settlement with the party the file is closed and dumped and in many cases SCN are not issued and no revenue is realized. A detailed inquiry of each Commissionerate /Division should be carried out to find out such cases. All the show cause notice should be issued and be recorded only in computers and in no case it should be issued in files so that this type of cases can be traced easily. Recently CBDT has issued guide lines that all tax letters, notices, should carry identification numbers to be verifiable online, similarly CBIC should issue guidelines that all Summons, , search warrants, Show cause Notices, Adjudication orders, Authorization letters to visit business/ factory premises and all int imation to assessee seeking any information should carry identification to be verifiable online. This will change the work ing and image of depar tment drastically. In the present episode strict again shou ld be t aken aga ins t the Jo in t Commission / Deputy Commissioners for dereliction of duty/ concealing the facts and causing loss to government exchequer.

lies and conceal the truth so that the mistake committed by IRS officers should be put under carpet and loss to government exchequer is chalta hai. Now the point arises that when the Range office of Central excise issued number of letters to the EOU unit to pay the duty short paid the entire letters sent to the EOU were returned back from postal department with the observation closed/ not found. Then how the senior officers of Umergaon division contacted the EOU unit who intimated to them in writing that no information should be supplied to anyone. It clearly shows the connivance between the IRS officers and EOU unit. The matter does not end there. With the introduction of GST the 100% EOU has been transferred under the jurisdiction of Customs. Sources say that in the meanwhile the department started smelling that the short payment of duty will come into limelight one day or the other and therefore, a draft show cause notice was prepared and was sent to Customs for issue of the Show cause. However, the competent IRS officer in Customs Ahmadabad Commissionerate, did not issue the SCN being time barred and called for the name of only junior officers for non issue of SCN. Till how long department will make scapegoat of the junior officers why the name of the Joint Commissioner / Deputy Commissioner was not called for who are empowered and responsible for issue of SCN. But how can IRS be brought to

September 2019

clueless at the time of great depression and this time may also do the same. The only saving grace is that in 1929 the Black Tuesday happened close to eclipse where as this time there is no eclipse close to that time. While in 1929 Sun was surrounded by malefics, this time it is Saturn with malefic, meaning thereby that much more people may be affected.

Many Ld. Astrologers are predicting war and conflict close to December when Shad Grahi (six planetary) yoga will fructify. The aspect of economic happenings worldwide has been largely ignored. The reason for the war and conflict close to December is based upon the position that a conjunction and admixture of good and bad planets in six or more number normally causes conflict. Example is cited of 1962 when such a conjunction happened of seven planets and caused an Indo- China war, which incidentally were the two most populated countries in the world. As far as planetary configuration from the view point of Mundane Economics is concerned, the trends indicate a grave worldwide position of a strong recession in the days to come. So causes Brahma to say with all humility!

Continued from page 01

Great depression of 1929 – Is the shadowof Black Tuesday going to revisit ?

On comparison of the two charts, it is found that Saturn is in the same position in house of wealth, but with Ketu and Pluto in conjunction and with Moon and Rahu aspecting it. Also there is a mutual aspect between Saturn and Mars. The planet of Finances that is Jupiter was aspecting Lagna at that time, whereas it is itself in Lagna in 2019. The planet of great upheavals Neptune was in 10th house in 1929 aspecting 4th House, now it is posited in 4th house aspecting 10th house. The Sun was in debilitation even then and shall be in debilitation now in 12th house. Planets like Mars, Mercury, and Venus were associated with 11th and 12th houses then and even now they are associated with houses 11th and 12th. Pluto was in house of obstacles in 8th house aspecting 2nd house with Saturn in it. Now, it is in 2nd house aspecting 8th house and is in conjunction with Saturn. Therefore, the configuration considerably turns out to be largely same even if not similar. Incidentally, the Lagna of USA in its birth chart is also Sagittarius, where the whole of troublesome conjunction and aspects are happening. The debilitated Sun had left the Government and regulators

Is Senior IRS Officers (CBIC) concealing duty Evas1ion cases causing loss to government exchequer ?????

The woman in the early thirties disclosed that her SIM card and phone was seized by the Pakistan Customs during her visit to Pakistan. During further investigation, it was discovered that the same SIM card of Delhi woman, bearing a Delhi mobile number was being used at PTCL call centre run by ISI from Jhelum City. “The woman also revealed that Indian mobile phone and SIM cards of Indian travelers were seized by Pakistani authorities who declared that no indian mobile phone or SIM card would be allowed to be used on Pakistani soil for security purposes,” said an officer of the Delhi police. Sources said initially the Military Intelligence got a whiff of the honey-trap scandal when few Indian security personnel got involved in such cases on Facebook and other social media platforms. Later when the Indian mobile numbers were tracked and owner of the SIM cards were traced in India, the agencies became aware of the ISI’s notorious design to trap indian officials. Sources said earlier this year, Anti-Terrorist Squad (ATS) of Uttar Pradesh traced 125 fake IDs of women on Facebook, which were a plant of ISI to honey-trap Indian paramilitary and Army officials. The data of fake accounts was shared by Intelligence Bureau and military agency with ATS. The Indian agencies shared its data with other state police since BrahMos Aerospace engineer Nishant Agarwal and BSF jawan Achutyanand Mishra were honey-trapped by ISI in October last year. Sources said several other personnel of Indian security agencies were seduced by the Pakistani girls through Facebook and Whatsapp. Like ATS UP, the Delhi Police is now scanning several hundred such Facebook accounts of ISI trained girls which have Indian security personnel on their friends list. Sarkaritel.Com

In a major breakthrough, Indian intelligence agencies have busted a “call centre” being run by the Inter-Services Intelligence (ISI) of Pakistan in Jhelum city, 116 km from Islamabad. The call centre, a major counter-intelligence hub of ISI, aimed at targeting the Indian Army and government officials in honey-traps, was being operated with the help of Pakistan Telecommunication Company Limited (PTCL). The ISI-backed call centre was using Indian SIM cards, seized by Pakistan customs from Indian travelers, mostly women, visiting their relatives in Pakistan. Over 100 Indian SIM cards have been traced as the Delhi Police along with the police of a few other states launched a nationwide investigation into a sensational honey-trap scandal. The Indian SIM cards of female Indian travelers were used to camouflage identities of Pakistani women operating from call centres located across the border. Through Indian SIM cards and fake Indian IDs were created in Facebook bearing names like Sangeeta Mishra, Ayesha Roy, Nita Singh etc. Pakistani girls engaged by the call centre were especially trained in speaking fluent Hindi with a North Indian accent. With the help of ISI handlers, these girls primarily searched Indian security personnel on social media platforms and later approached them. After initial chats with the target group, the girls made video calls on Facebook and recorded them. The girls then shifted to WhatsApp for more intimate chats. The Indian officials trapped by the ISI call centre, at the outset had an impression that they were chatting with Indian girls. Sources in the Delhi Police revealed to IANS that the scandal was unearthed when one woman from Delhi was questioned by the sleuths.

IB busts ISI ‘honey-trap’ usedin luring Indian personnel

leakage, two officials said requesting anonymity. Under the GST’s e-way bill system, the movement of goods requires registration from pickup to drop points. The GST Council, an apex federal body for matters related to indirect taxes, is expected to consider the proposal at its meeting in Goa on September 20. The Union finance minister chairs the GST Council and it has state finance ministers as its members. The officials said Kerala has mooted the proposal of making e-way bills mandatory for movement of precious stones and metals even as the Law Committee rejected an idea for doing so citing “security and law and order” in June. In July, the m a t t e r w a s a g a i n s e n t f o r t h e

GST Council, an apex federal body for matters related to indirect taxes, is expected to consider the proposal at its meeting in Goa on September 20. The Union finance minister chairs the GST Council and it has state finance ministers as its members. Government is considering a proposal to m a k e e - w a y b i l l s n e c e s s a r y f o r transportation of precious metals like gold to stop malpractices and check revenue leakage(HT FILE)Updated: Sep 19, 2019 03:56 ISTBy Rajeev Jayaswal , New Delhi The government is considering a proposal to make e-way bills necessary for transportation of precious metals like gold to stop malpractices and check revenue

e-way bills mandatory through encrypted mode. Under this option, data related to the movement of such goods will be stored in a server and only authorised officials could have access to it. This will address the security concern. The other option is to continue with the existing exemption from the requirement of e-way bills as these goods are often transported personally or privately through the traditional couriers called ‘angadia’. It has been underlined that insistence on e-way bills for these items will increase the compliance burden for workers, the officials said. Source: hindustantimes.com

reconsideration of the committee, which is an advisory body of the GST Council. The panel has about two dozen members, mainly tax officials. Email queries sent to the Central Board of Indirect Taxes and Customs and the Union finance ministry about the proposal went unanswered. The officials cited above said Kerala has repeatedly flagged the issue and is unconvinced that e-way bills for gold and other precious items will pose security threats and create law and order problems. Kerala has sought e-way bills to check revenue leakages. According to the officials, the Law Committee has put up two options before the GST Council. The first option is to make

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3 IRS officials shifted. Three IRS off ic ia ls in the customs, including a commissioner, have been transferred out of Mumbai six days after the Directorate of Revenue Intelligence unearthed a Rs 3,000-crore import scam where diamond merchants, in connivance with valuers, inflated the value of imports and transferred black money out of the country. The role of a fourth officer is also being examined, sources said. The off ic ia l s who have been transferred are commissioner (special cargo) Vinay B Singh, deputy commissioner C Y Manikanhaiya, who was in charge of valuation, and deputy commissioner Ashiqzzaman from the Special Investigation and Intelligence Branch. Singh has been transferred to Customs, Excise and Service Tax Appellate Tribunal in Kolkata, Manikanhaiya to Hyderabad GST, and Ashiqzzaman to Bhubaneshwar GST. DRI has already recorded the statements of Manikanhaiya and Ashiqzzaman. The commissioner (special cargo) post, created in 2014, covers diamond plaza, courier cell and air parcel sorting office. DRI arrested four people on July 12 in a case where two importers inflated the value of the Rs 1 crore-worth diamonds to Rs 160 crore. This inflated value is taken out officially as payment to be made to the sellers. Three of the arrested people are valuers or those who assign a value to the diamonds—Pradeepkumar Jhaveri, Naresh Mehta and Paresh Shah. In the past too, the valuers have connived with importers and taken out around Rs 3,000 crore out of the country through this route, sources said. The very low import duty on the rough diamonds

makes it an attractive item to launder money. The diamond packets are cleared by the air cargo unit of the customs.Chief commissioner of customs APS Suri declined to comment on the sudden transfers. Sources said they have been transferred for supervisory failure and negligence. “The vigilance department is likely to further probe their roles,” an official said. “The Central Board of Indirect Taxes and Customs has taken a serious note of this incident. There were complaints from the industry too which prompted the board to take a swift action,” he added. According to sources, Jhaveri and Shah were not part of the Gems and Jewellery Promotion Council, whom customs consult before deciding on the valuers. The role of valuers is important considering that they examine the diamonds and ascertain the value for customs duty calculation. “The conduct of the customs officials in enrolling valuers who were not recommended by the council raises several questions. This requires a detailed probe,” a senior official said. The two deputy commissioners were present when the consignment in question was cleared. In this case, DRI had received information that 14 consignments of rough diamonds were being imported from Dubai and Hong Kong at Bharat Diamond Bourse, BKC, with a declared value of Rs 156 crore, which was accepted by the valuers. DRI intercepted the consignments and after revaluation found that it was only worth Rs 1.2 crore. Source: TNN

September 2019

Rs 3,000 crore diamond import scam:

Provisions of CGST act, 2017 applicable to E-commerce operator at a glanceE-commerce Operator : E-commerce operator who is liable to collect only TCS, then registration is mandatory ; otherwise threshold limit is applicable. Eg : Titan selling own watches in his own website. He is qualified as a E-Commerce operator as per amended provisions. If he is not liable to collect TCS then registration u/s 24(x) not mandatory. Supply of goods through E-commerce operator : Person who is supply taxable goods through E-commerce operator has to obtain mandatory registration u/s 24. Eg : Parker supplier selling pens through flipkart. Parker pens supplier has to obtain mandatory

registration irrespective of value of supply. Supply of services through E-commerce operator : If person supplying services other than specified in section 9(5) through E-commerce operator, then no mandatory registration ; provided turnover is less than threshold limit. T C S P r o v i s i o n s u / s 5 2 : I f consideration is collected by E-commerce operator from supplier of goods or services then E-commerce operator has to collect TCS @ 1% (0.5% CGST + 0.5% SGST) on net value of taxable supplies supplied through E-commerce operator. Net value of taxable

States may support GST relief on hotel tariffs India’s apex decision body for goods and services tax (GST) could consider relief for the hotel sector, a proposal that is likely to be backed by states that remain divided over a reduction in the rate on automobiles and biscuits. The GST Council will also discuss two notes circulated by the Fifteenth Finance Commission— one on rate rationalisation and the other on revenue projection for both the Centre and the states for five years. Finance Commission chairman NK Singh will also meet state finance ministers amid demands from the states for extending the GST compensation period, ending in 2022, by another three years to 2025. If the suggestion is accepted by the commission and subsequently by the government, it could mean extension of the compensation cess for three more years. States are amenable for GST cut on hotel tariffs of ?7,500 and more to 18% from 28% or to raise the threshold for the higher tax rate, a government official said. Goa and Rajasthan, which generate substantial revenue from tourism, have been pushing for relief on this front. The council will consider proposals for GST rate rationalisation for auto and other sectors as well, but there doesn’t seem to be a consensus among stakeholders. The auto industry has demanded that GST on passenger vehicles be cut to 18% from the 28% to help turn around a sales drop amid a broader economic slump. Biscuit makers want GST on biscuits priced below ?100 kg to be cut to 5%

from 18% now. The decision now rests with the GST Council but the Centre would want the states to share the burden if rates are lowered. “Taxes alone are not the reason behind slowdown in automobile sales… Personally, I don’t feel rate reduction can be taken up at the current juncture,” said Sushil Modi, Bihar deputy chief minister and finance minister. Kerala has also opposed any reduction in the GST rate for autos.West Bengal and Punjab may back a reduction in GST for the automobile sector due to the economic slowdown.Amit Mitra, West Bengal finance minister, had previously written to finance minister Nirmala Sitharaman backing a move to cut GST on hybrid and vehicles that conform to Bharat State VI emission norms. In an earlier letter to the Centre, Punjab finance minister Manpreet Badal sought a comprehensive review of tax rates for automobiles, textiles, micro, small and medium enterprises (MSMEs) and real estate to provide a boost to the slowing economy. As in the past, states want the Centre to shoulder the entire burden of the revenue loss on account of any tax cuts. But the Centre itself may not be keen on cuts if it has to compensate states for the losses. The Centre is already witnessing pressure on this front, having promised a 14% compounded annual growth rate over FY16 revenue collection.Source: Economic Times Bureau

supplies shall be calculated at GSTIN level. Eg : Let say A and B supplying goods through E-commerce operator then net value of taxable supplies shall be calculated for A and B separately. Return provisions : The amount collected by the E-commerce operator is to be paid to appropriate government within 10 days after the end of the month in which the said amount was so collected. Deductee can claim TCS which is credited in his electronic cash ledger. Penalty provisions : As per section 52(6) of the CGST Act, 2017, interest is

applicable on omission as well as in case of incorrect particulars noticed. In such a case, interest is applicable since it is a case of omission. Further penalty under section 122(vi) of the CGST Act, 2017 would also be leviable. Any person who fails to furnish the information required by the notice served : Under sub-section (12), he shall (without prejudice to any action that may be taken under section 122) be liable to a penalty which may extend to twenty-five thousand rupees. Source: TAX CONCEPT

Centre Notifies– Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2019

G.S.R. 108(E)— In exercise of the powers conferred by sub-section (1), read with clauses (i), (j), (jj), (jjj) and (k) of sub-section (2) of Section 73 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby makes the following rules further to amend the Prevention of Money- laundering (Maintenance of Records) Rules, 2005, namely:— (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2019. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1),- (i) for clause (aaa), the following clause shall be substituted, namely:-‘(aaa)

“Aadhaar number” shall have the meaning assigned to it in clause (a) of Section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);’(ii) clauses (aac) and (aad) shall be omitted;(iii) in clause (d), (a) After the words “driving licence,”, the words “proof of possession of Aadhaar number” shall be inserted;(b) after the third proviso, the following proviso shall be inserted, namely:-“Provided also that where the client submits his proof of possession of Aadhaar number as an officially valid document, he may submit it in such form as are issued by the Unique Identification Authority of India;”Please refer the link for detailed notification: NOTIFICATIONMinistry of Finance [F. No. P.12011/24/2017-ES Cell-DoR]

Harish Salve blames Supreme Court for current economic slowdown, PM Modi’s Economic Advisory Council member agrees Noted lawyer Harish Salve has held the Supreme Court responsible for the current economic slowdown in the country. Speaking to a website, Salve said that the top court cancelling 122 spectrum licences issued to telecom operators in the 2G spectrum case in 2012 triggered the economy to go on a downward trajectory. “I squarely blame the Supreme Court,” Salve told lawyer Indira Jaising in an interview for her website The Leaflet. Salve added, “I can understand holding people responsible for the wrong distribution of licenses in 2G… Blanket cancellation of licences where foreigners are investing… See, when a foreigner invested it was your rule which said he must

have an Indian partner. The foreigner did not know how the Indian partner got a licence.” According to Salve, foreigners invested billions of dollars, but the apex court with one stroke of the pen knocked all of them out. “That’s when the decline of the economy began,” he said. Shamika Ravi, member of Prime Minister Narendra Modi’s economy advisory council agreed with him. When a Twitter user asked her if she agreed with Salve’s analysis, Ravi replied on the microblogging site, “Yes.” Source: Business India

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Sentencing an 80-year-old retired Major General to three years' rigorous imprisonment in a bribery case that stemmed from a 2001 sting operation by Tehelka news portal, a court here observed that corruption in Indian Army shakes the very confidence of the society and the culprit should be appropriately punished. Special CBI Judge Shailendra Malik, in his August 22, order convicted Major General (retd) S P Murgai under Section 8 and 9 of the Prevention of Corruption Act for receiving a bribe of Rs 70,000 in a defence procurement matter and also imposed a fine of Rs 25,000 on him. "Corruption in any department cannot be tolerated but when it comes to corruption in Indian Army, this fact substantially shakes the very confidence of the society and therefore convict requires to be sentenced appropriately," the judge said in the order uploaded recently on court website. During 'Operation Westend' by Tehelka portal, its functionaries had met various persons including government servants, defence personnel, businessmen and politicians etc. purportedly to facilitate obtaining of supply order of defence equipments.

One of the functionaries of Tehelka was Mathew Samuel who was a correspondent (investigation). The court referred to the testimony of a former IAS officer L M Mehta and another major general of the defence ministry P S K Chaudhary. According to the prosecution, Murgai took Samuel (posing as a defence manufacturer) to his residence. The CBI had registered the case on February 3, 2006, and it was alleged that Murgai received illegal gratification of Rs 70,000 for himself from the representative of Tehelka as a motive or reward for inducing, by the exercise of personal influence with officials of the Ministry of Defence, in the matter of getting order for supply of defence equipment to the Indian Army. After thorough investigation, a charge sheet was filed on October 31, 2007, before the special court. Murgai, who served in the Army in various capacities from 1962 till September 30, 2000, was used by a Tehelka sting team to gain access to key officers dealing with armament procurement at Army headquarters.PTI

Corruption in Army shakes confidence of society, says court in order sentencing Retd Major Gen to jail

September 2019

T w o y e a r s a f t e r t h e implementation of a common nationwide goods and services tax law, the Modi government has launched a major enforcement drive against the tax evaders. In an unprecedented operation, a joint team of directorate of revenue intelligence and directorate general of GST intelligence raided more than 300 locations across the country. The operation was so massive that it involved more than thousand tax officers of CBIC. It also involved interception of live export consignments at Vadodara rail container terminal, Mundra port and Nhava Sheva port to detect any misreporting by exporters. “In the biggest ever joint operation by DGGI and DRI against the exporters who were fradulently claiming refund of IGST, pan-India searches were carried out at 336 different locations across the country,” ministry of finance said in a statement. The joint operation of the two premier intelligence agencies of the central board of indirect taxes and customs (CBIC) was a first of its kind involving about 1200 officers. CBIC said analysis of the data revealed that some exporters were exporting goods on payment of IGST entirely on the basis of input tax credit availed on fake supplies and these IGST payments were claimed as refund on export. In order to detect this huge GST evasion by exporters, tax officers used the data provided by the directorate general of analytics and risk management (DGARM). The exercise involved matching of export data available with the Customs deparment with the corresponding GST data of exporters. The exercise revealed that there was hardly any payment of tax through cash by exporters and their suppliers.

“In few cases, even the tax paid through ITC was more than the ITC availed by these firms. On the basis of this intelligence, searches were conducted on the premises of exporters and their suppliers,” said the government. “The day long operation revealed that many of the entities spread across the length and breadth of the country were either non-existent or had given fictitious addresses.” ALSO READ: Why PM Modi may not succeed in reducing government’s involvement in court cases Amount of GST Fraud: An early investigation conducted by the tax officials revealed that input tax credit of more than Rs 470 crore was availed on the basis of fake or bogus invoices. The invoice value of these transactions were around Rs 3,500 crore. It was used by exporters for fradulently claiming cash refund. Another IGST refund of Rs 450 crore is also under examination of tax authorities. During the search operations, tax officers have also apprehended live export consignments of these exporters at Vadodara Rail Container Terminal, Mundra Port and Nhava Sheva Port to detect any misreporting of the information. Area of search operationThe operation covered more than 300 locations spread across two Union territories – national capital Delhi and Chandigarh and 13 states. I n a d d i t i o n t o D e l h i a n d Chandigarh, raids were conducted in state of Haryana , U t t a r P radesh , Gu ja ra t , Maharashtra, Tamil Nadu, West Bengal, Karnataka, Madhya Pradesh, Telangana, Punjab, Rajasthan, Himachal Pradesh, Uttarakhand.PTI

GST Fraud: Modi govt cracks whip on tax evaders; intercepts export consignments at Mundra, other ports

UT writes to police to lodge FIRagainst five bogus firms

The UT exc ise and taxa t ion department has written to the police to register an FIR (first information report) against five bogus companies in connection with the Rs 70 crore tax credit scam. A senior official said after getting approval of senior officials, they have written to the police. The case will be registered at the Sector 17 police station, he said. The depar tment has a l ready identified 305 companies who claimed maximum input tax credit (ITC) under the goods and services tax (GST) in recent years. The department will soon issue notices to these firms as well, asking them to explain their stand. The five bogus dealers, who were primarily involved in the scam, had claimed ITC in huge numbers. Besides, the department has already detected 132 bogus dealers who used fake addresses for registration under GST in the city. The investigation has so far revealed 20 dealers, including five who were penalized,

were not doing any sale and purchase in Chandigarh but dealing only in Haryana and other states. These dealers issued invoices to numerous firms/companies without actual supply of goods mentioned and facilitated illicit ITC entitlement. The department has already cancelled GST registration number of the five bogus dealers slapped a penalty of Rs 17 crore. The list of 15 others was sent to the central excise department for action. The list of bogus dealers was prepared on the basis of reports received from other states. Deputy commissioner Mandip Singh Brar, who is also holding the charge of excise and taxation commissioner, on July 26 ordered the penalty. The accused caused a loss to the exchequer by procuring invoices and undertaking fake purchases from non-existent firms and passing on fake ITC to various end-users who utilized it to offset their GST liabilities.Source: TNN

CGST Delhi West and CGST Delhi North in a joint operation busted a racket of issuance of invoices without actual supply of goods. The taxpayer availed fraudulent Input Tax Credit for seeking IGST Refunds from Customs formations. Investigations revealed a novel modus operandi wherein the taxpayer showed supplies to SEZ for claiming a fraudulent refund from CGST formations. Devender Kumar Yadav & Sanjeev Maheshwari were the masterminds who created dummy firms and also opened bank accounts. Sh. Bhawani Shanker Sharma, was the accountant who prepared the fake documents and also filed returns on the basis of fake invoices. One person, Vinod was shown as proprietor and assisted in the operations of these firms. All four have been arrested and remanded to Judicial Custody for 14 days by the Duty Magistrate at Patiala House Courts, New Delhi. Prima facie, fraudulent ITC of Rs.195 crores has been passed on using invoices involving an amount of Rs.847 crores. Investigations revealed around 60 dummy firms were opened in the name of persons belonging to the lower income group. Some of these firms passed on fraudulent Input Tax Credit to firms within this group to avail IGST refund or refund against supplies made to SEZ. The accused had applied for IGST refunds from various ports across India and Rs.18.09 crores had been credited to their bank accounts. Also, three refund claims involving Rs.29.66 crores for supplies made to SEZ were filed in CGST North and West Divisional Offices which had not been sanctioned. During search operations, unaccounted cash of Rs.91.92 lakhs

was also seized and two bank accounts having the amount of Rs.1.68 crores have been provisionally attached. The accused have committed an offence under the provisions of Section 132(1)(b)&© of the CGST Act, 2017, which are cognizable and non-bailable under Section 132(5) and punishable under Section 132(1)(i) of the said Act. Accordingly, the four accused were arrested on 14.09.2019 and have been remanded to judicial custody for 14 days. Source: Ministry of Financewere penalized, were not doing any sale and purchase in Chandigarh but dealing only in Haryana and other states. These dealers issued invoices to numerous firms/companies without actual supply of goods mentioned and facilitated illicit ITC entitlement. The department has already cancelled GST registration number of the five bogus dealers slapped a penalty of Rs 17 crore. The list of 15 others was sent to the central excise department for action. The list of bogus dealers was prepared on the basis of reports received from other states. Deputy commissioner Mandip Singh Brar, who is also holding the charge of excise and taxation commissioner, on July 26 ordered the penalty. The accused caused a loss to the exchequer by procuring invoices and undertaking fake purchases from non-existent firms and passing on fake ITC to various end-users who utilized it to offset their GST liabilities.Source: TNN

Racket of Issuance of Invoices withoutActual Supply of Goods Busted In Delhi; 4 Held

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Economic offences "affect the economic fabric of the society" and power to grant pre-arrest bail has to be exercised sparingly especially in such cases, the Supreme Court said while denying anticipatory bail to former finance minister P Chidambaram in the INX media money laundering case. The top court said a case of money-laundering involves various stages of 'placement', 'layering' that is funds moved to several shell companies/institutions to conceal origin and it requires systematic and analysed investigation.Economic offences stand as a different class and grant of anticipatory bail, particularly in such offences, would "definitely hamper the effective investigation", it said. A bench of Justices R Banumathi and A S Bopanna referred to a 1987-verdict of apex court which had held that "economic offence is committed with deliberate design with an eye on personal profit regardless to the consequence to the community".In its 57-page verdict, the bench said: "Power under Section 438 CrPC (anticipatory bail) being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of the society."It said that "grant of anticipatory bail at the

stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed".The bench agreed with the submission of Solicitor General Tushar Mehta that money laundering being an economic offence committed with much planning and deliberate design poses a serious threat to the nation's economy, financial integrity and in order to unearth the laundering and trail of money, custodial interrogation of Chidambaram was necessary. I t s a i d , " S u c c e s s i n s u c h interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation." The bench said, "in a case of money-laundering where it involves many stages of placement, layering i.e. funds moved to other institutions to conceal origin and interrogation i.e. funds used to acquire various assets, it requires systematic and analysed investigation which would be of great advantage". M e h t a , w h i l e o p p o s i n g t h e anticipatory bail plea of Chidambaram had contended that Prevention of Money Laundering Act (PMLA) being a special enactment is applicable to the offences of

money laundering and Chidambaram's case is not fit for grant of anticipatory bail. The bench said, "Having regard to the materials said to have been collected by the respondent-Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to grant anticipatory bail". It said that keeping in view the nature of allegations against Chidambaram and the stage of investigation, "in our view, the investigating agency has to be given sufficient freedom in the process of investigation". Referring to Prevention of Money laundering Act, 2002, the bench said money laundering is a process of "concealing illicit sources of money" and the launderer transforming the money proceeds derived from criminal activity into funds and moved to other institution or transformed into legitimate asset. "It is realised world around that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty," it said.

It said PMLA was "enacted in pursuance of the Political Declaration adopted by the special session of the United Nations General Assembly held in June 1998, calling upon the Member States to adopt national m o n e y - l a u n d e r i n g l e g i s l a t i o n a n d programme, primarily with a view to meet out the serious threat posed by money laundering to the financial system of the countries and to their integrity and sovereignty". T h e a p e x c o u r t d i s m i s s e d Chidambaram's appeal challenging the August 20 verdict of the Delhi High Court denying him anticipatory bail in INX Media money laundering case lodged by the Enforcement Directorate (ED) saying there were no grounds warranting interference with the order. The CBI had lodged an FIR on May 15, 2017, alleging irregularities in FIPB clearance granted to INX Media group for receiving overseas funds of Rs 305 crore in 2007 during Chidambaram's tenure as finance minister. Thereafter, the ED lodged a money laundering case in 2017.Source: PTI

September 2019

SC: Power of pre-arrest bail has to be exercised sparingly in economic offences

T h e C e n t r a l B u r e a u o f Investigation on Thursday arrested a section officer of ministry of home affairs (MHA) – Dheeraj Kumar Singh along with a private person – Dinesh Chand Gupta for offering Rs two crore bribe to a DIG rank officer of the agency for influencing probe in a preliminary enquiry (PE) against a private company and a public sector unit. The agency’s Spokesperson said, “The CBI had registered a case on a complaint received from the CBI officer alleging therein that a section officer of the MHA and a private person offered him a bribe of Rs 2 crore in lieu of his help in settling a Preliminary Enquiry being dealt in CBI.” Another official in the agency, who didn’t wish to be named, said the Anti-Corruption Branch (ACB) is conducting a PE against a private company which got a contract from a government department. “A person close to Singh is under investigation in the PE. So, he approached a DIG in the Anti-Corruption Branch and asked him to settle the PE for Rs 2 crore. The DIG informed the senior brass after which it was

decided that Singh would be lured by promising him relief in the enquiry,” said the officer. The DIG engaged S ingh in negotiations and it was decided that latter will pay Rs 16 lakh as first installment of the bribe, which was to be delivered on Thursday morning. CBI laid a trap and caught Singh and Gupta when they were delivering Rs 16 lakh to its DIG. Their residences are being searched. Singh is posted in the Police-1 division in the MHA, which deals with the postings, guidelines, administrative work pertaining to the IPS officers; president police medals etc and is considered a sensitive unit. The MHA will also take action against Singh after CBI submits its report. “CBI also advises the public not to attempt to settle any investigation matters with the CBI by using influence and also not to be allured by services of middlemen who may offer to settle cases with the agency,” said CBI Spokesperson. Source: Hindustan Times

CBI arrests MHA staff for offering Rs 2 crore bribe to investigating officer

Government looks to plug GST leaks, boost collections Having detected frauds of close to Rs 50,000 crore, the Centre is looking to tighten processes, including those related to claiming input tax credit (ITC), and will focus on getting states to okay plans to shut down leaks and evasions at this week’s GST Council meeting. The government’s effort to shore up collections and improve revenues is likely to be a major area of discussion at the GST Council. Calls for rate cuts for stressed sectors like autos is expected to figure but new procedures to prevent evasion and misuse of GST provisions are likely to be adopted. On an average, businesses pay 20% of their tax in cash and pay the remaining using the tax credit accumulated in their accounts. Using the same principle, the finance ministry is planning to ask states to put in place a mechanism under which an enhancement in the limit to claim tax credit will require payment of 20% as the margin money. So, if your turnover is Rs 50 lakh and you want the limit enhanced to Rs 60 lakh, you will have to pay Rs 2 lakh as “margin money”. “This is like linking your loan limit to your credit history. If a business has received orders, it will have to convince our officers about a higher limit or talk to banks and get 20% extra. The entire process will be automated to avoid any discretion,” explained an officer. Over two years after the launch of GST, collections have hovered around the Rs 1 lakh crore mark as leakages are seen to be rampant, especially when it comes to claiming ITC on taxes paid during the entire chain from purchase and transport of raw material to sale of the final product by a retailer. Plugging gaps and finding ways to step up collections are going to be key themes at the meeting in Goa on Friday as the Centre and states

are staring at a massive shortfall in GST revenue, with collections so far in the year growing over 6%, which is half the asking rate. The tight fiscal position is also expected to force the Council to defer a decision on tax cuts, which is being demanded by certain industry groups. For the government, a big worry is tax evasion. Just last week, nation-wide searches were conducted, which led to unearthing of bogus claims of over Rs 450 crore. “We are looking at tough measures to rein in fly-by-night operators, who are misusing the system,” said a tax officer. In several cases, tax authorities have detected that a new business claims ITC by showing sales to individuals and entities as suppliers, and then vanishes. “We have come across instances where Aadhaar and bank details of terminally ill patients have been misused,” said an officer. As a first step, Aadhaar authentication for GST is being made mandatory. Besides, a key focus will be to limit the amount of ITC that an entity can claim, especially if it is new. So, the ITC that a business can claim in the first or the second year may be linked to its turnover and any enhancement may have to be cleared by a committee of officers. Officials said that given the monthly GST payment cycle, the additional payment will be like an advance for a month. Widespread use of technology and data mapping has already led tax authorities to crack down on businesses which were showing inflated sales to claim higher ITC on GST. In a large number of cases, when income tax returns were matched, it was found that these entities had shown a lower income to avoid paying income tax.Source- Times of India

ARTICLE DELETEDon Dated 07-Jan-2021from RTT NewspaperSeptember 2019 issue Page No-10

Requested From:Cyber Crime Police Station,Cyberabad Police Commissionerate,Gachibowli, HyderabadDated: 07-01-2021Ref.: C.No.105/CCPS/CYB/2020-21

As per the request of Inspector of PoliceCyber Crime Police Station, Hyderabad.We have deleted the said article from ourrecords permanently.

Of late, there has been an increasing clamour to reduce GST rates on various products—such as automobiles and cement, among others—to give a boost to the economy and getting back to the higher GDP growth track. As is known by now, the goods and services tax (GST) is a destination-based consumption tax that is levied throughout the value chain, and the incidence of which is borne ultimately by the end-consumer—who cannot claim any input tax credit of the GST paid on the final consumption. Hence, the lower the GST rate, the lower the incidence of the tax, and the lower the price paid by the final consumer for a particular commodity or service. Of late, there has been an increasing clamour to reduce GST rates on various products—such as automobiles and cement, among others—to give a boost to the economy and getting back to the higher GDP growth track. While the GST rate cut certainly reduces the final price in the hands of the end-consumer and does increase the probability of higher sales, it does not guarantee the same—in other words, a lower GST rate does not necessarily result in larger sales. The bigger challenge today is the slump in demand, and not high GST rates. GST is a j u s t a c o m p o n e n t o f t h e e n t i r e consideration that is paid by the end-consumer. Let me give an example to illustrate the point. Let’s assume that the price of a particular product is Rs 100, and the current GST rate that the said product

attracts is 28%. Reducing the GST rate to 18% will bring down the price by approximately Rs 10, but what about the ability of the buyer to pay the balance Rs 82? Unless the government addresses this issue, reducing the GST rate alone won’t serve the desired purpose. In addition, with the GST collection targets difficult to be met this fiscal, any further reduction in GST rates would push the economy towards a larger fiscal deficit, which the government has been successful in containing to a large extent. Post the implementation of the GST in July 2017, the government has proactively reduced GST rates on umpteen numbers of goods and services, which eventually have reduced the prices of these goods and services for the end-consumer. In addition, the government has announced exemptions for certain goods and services, which has also reduced the prices, but marginally, as the tax paid on inputs, input services and capital goods used in the manufacturing of such exempted goods or provision of such exempted services becomes a cost, which ultimately has to be borne by the end-consumer. Rather than totally exempting any goods or services from the GST, it is prudent to either categorise them in the lower bracket or “zero rate” them. Zero rating of a commodity or a service results in the same mathematical conclusion as exempting it, as “zero” tax is payable upon supply of such a commodity or service in both the cases. However, the

GST rate cut for economic growth is a myth

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I am directed to draw your kind attention to the practice of disposal of seized/confiscated liquor lying with Customs formations. Under the extant i n s t r u c t i o n s / g u i d e l i n e s s u c h seized/confiscated liquor was being disposed of by various means including sales to Canteen Stores Department (CSD), other Defence Establishments or sale to hotels/restaurants and clubs having the necessary liquor licenses or to Indian Tourism Development Corporation (ITDC). 2. Now, field formations brought the following difficulties in disposing of seized/confiscated foreign origin liquor to the notice of the Board namely: i. Lack of response from Canteen Store Department (CSD) or from other Defence Establishments; ii. Lack of response from other bidders on account of problems associated with getting clearances from:a. State Excise Department;b. Food Safety and Standards Authority of India (FSSAI); iii. Denial of permission to sell by State Excise Authorities; 3. The matter was examined in consultation with Food Safety and Standards Authority of India (FSSAI) & Canteen Stores Department (CSD). 3.1. At present CSD is buying liquor of foreign brands directly in bulk quantity. As the seized/confiscated liquor is in assorted brands and in different quantities, they are not in a position to buy the stock from Customs. 3.2. FSSAI has stated that:-i. As per Food Safety and Standards ( Impor t ) Regu la t i ons , 2017 , t he Authorised Officer shall follow the procedure of inspection, sampling, testing

and clearance, laid down under these regulations, for disposal of all cases of uncleared or unclaimed articles of food; ii. FSSAI has also categorically emphasized that without obtaining a No Objection Certificate (NOC) from FSSAI, the imported food products including seized/confiscated foreign-origin Liquor should not be released to the market for sale/consumption and if sampling is not feasible in case of seized lot/batch of one or two bottles, then such stock shall be destroyed by the Customs; iii. FSSAI has also informed that there is provision to minimize the cost of sampling of imported high priced alcoholic beverages. As per their Order F. No. 1-619/FSSAI/Imports/2016 dated 06.03.2017, a miniature/representative sample of 100 ml (in two numbers) will be taken for laboratory analysis; iv. FSSAI has also clarified that there is no de-minims clause/exemption from testing of small lots. 4. In view of the above, the following guidelines are issued: 4.1. The Principal Commissioner of Customs or Commissioner of Customs sha l l cons t i tu te L iquor Disposa l Committee headed by a Chairman of the rank of Additional/Joint Commissioner of Customs and with the following members, namely, Deputy/Assistant Commissioner o f C u s t o m s i n c h a r g e o f t h e w a r e h o u s e / d i s p o s a l , a n y o t h e r Deputy/Assistant Commissioner of Customs, Superintendent of Customs in-charge of warehouse/disposal and any other Superintendent of Customs. 4.2. The functions of the Liquor Disposal Committee shall be to:i. meet as frequently as possible and necessary;

i i . conduc t a de ta i l ed rev iew of seized/confiscated l iquor pending disposal; i i i . o r d e r d i s p o s a l o f seized/confiscated liquor; and i v. a d v i s e t h e r e s p e c t i v e investigation section/agency on the steps to be initiated for expeditious disposal of seized/confiscated liquor. 4.3. The officer-in-charge of warehouse shall prepare a list of all the seized /confiscated liquor that have become ripe for disposal and submit it to the Chairman of the concerned Liquor Disposal Committee. The Liquor Disposal Committee shall satisfy itself that the consignments are ripe for disposal, shall endorse necessary documents and thereafter that Committee shall physically examine and verify the lot size, weight and o t h e r d e t a i l s o f e a c h o f t h e seized/confiscated consignments and record its findings' in each case. 4.4. The nearest FSSAI office shall be approached for sampling, testing and obtaining NOC for disposal of stock of Liquor which is ripe for disposal. 4.5. Modes of disposal are as follows:i. The stock of liquor for which NOCs from the nearest FSSAI office are obtained shall be disposed of through e-auction inviting qualified bidders who shall in turn comply with applicable state Excise Laws; ii. If it is not possible to obtain NOC from FSSAI for the reasons such as difficulty in sampling due to small lot size, etc; such stock shall be destroyed. 4.6. If the stock is to be destroyed in terms of Para 4.5 (ii) above, the procedure similar to the one notified for destruction of Narcotics and Psychotropic Substances (NDPS) as per the NDPS

(Seizure, Storage, Sampling and Disposal) Rules, 2016, or such rules notified by Department of Revenue from time to time, may be followed. 4.7. The Liquor Disposal Committee shall intimate the Principal C o m m i s s i o n e r o f C u s t o m s o r Commissioner of Customs regarding the programme of destruction at least fifteen days in advance so that, in case he deems fit, he may either himself conduct surprise checks or depute an officer for conducting such surprise checks and after every destruction operation, the Liquor Disposal Committee shall submit to the Principal C o m m i s s i o n e r o f C u s t o m s o r Commissioner of Customs a report giving details of destruction. 4.8. A Certificate of destruction shall be prepared in triplicate and signed by the Chairman and Members of the Liquor Disposal Committee. The format of the Certificate is given at Annexure (copy enclosed). The original copy of the Certificate of destruction shall be pasted in the Warehouse Register after making necessary entries to this effect, the duplicate to be retained in the seizure case file and the triplicate copy shall be kept by the Chairman of the Liquor Disposal Committee. 5 . T h e C h i e f Commissioners/Director Generals are hereby directed to circulate the guidelines to all the formations under their charge. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board. (Suraj Kumar Gupta)Joint Commissioner (Inv. - Cus)CBIC, New Delhi

September 2019

Disposal of seized/ confiscated foreign origin liquor

biggest plus point of zero rating over exempting is that the constituents in the value chain—such as manufacturers and traders—can claim full input tax credits, resulting into lowering of price for the final consumer. The tax-cascading effect is completely nullified, making the product less costly. The exemption granted to products works counterproductive for the M a k e i n I n d i a i n i t i a t i v e o f t h e government, as businesses tend to import and sell rather than manufacture and sell. This, definitely, can’t be the desired outcome. Time is opportune for the government to look at the zero-rating option for certain products and services for domestic consumption. We already have zero rating for export supplies, which can be extended to a select category of goods and services. For the economy to come back to the higher growth trajectory again, consumption of goods and services in India has to increase. The solution, perhaps, lies somewhere else—away from GST rates. – One, the quantum of export of goods has to grow substantially so as to generate revenue for Indian companies and increasing the employment rate, thereby increasing spending by Indians. – Two, the Make in India initiative has to gather speed, and new investments, both domestic and foreign, need to be increased by further easing the norms for doing business in India. – Three, India needs to take quick

steps to take full advantage of the ongoing trade war between China and the US, by grabbing opportunities to supply goods to both the countries as they are huge markets to be serviced. – Four, the tax and regulatory environment in the country has to be certain for businesses operating in an honest and diligent manner. Easy compliance mechanism and hassle-free working of the government’s IT mechanism can make all the difference. – Five, the liquidity crisis haunting Indian businesses has to be addressed more aggressively than ever before. Reducing interest rates on lending is the right step in this direction, and banks need to quickly percolate that down to end-consumers. The agility and responsiveness shown by the government to tackle the economic slowdown is commendable, and it will take a certain period of time to see the positive results. In the interim, businesses should continue to focus on what they do the best—i.e. providing quality goods and services to consumers. The effects of earth-shattering reforms such as demone t i sa t ion and the implementation of the GST, to name a few, would last for a longer period of time and, hopefully, the end-result would prove to be good for the economy in the longer run. Patience and perseverance are the two main attitudes to stay afloat in these hard times, which shall also pass.Source- Financial Express.

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September 201912

Two batches of Customs formations, each comprising eight to nine officers, deputed at Kial, are under a cloud of suspicion with DRI arresting four officials for abetting gold smuggling. Kannur airport has three units A, B and C, each under an assistant commissioner. “Ideally all the three batches should be replaced. But we have decided to replace B and C batches after involvement of inspectors from these two batches came to light,” said a top official. These developments involving their own officials have hit the department hard as they are quite low on man power. Officials said they are working on 25% to 30% staff strength. The DRI, on Thursday, recorded the arrests of three Customs Inspectors who were under custody in connection with a gold smuggling case reported at Kannur International Airport on August 19. The arrested were identified as Rohit Kumar Sharma, Krishan Kumar, both from New Delhi, and Jharkhand native Sakendra Paswan. All of them were based at Kannur airport and have been alleged of aiding gold smuggling. Following their arrests, the Customs department suspended the three officers from service with immediate effect. They were arrested in connection with the seizure of 11.035kg of gold worth Rs 4.05 crore at Kannur airport on August 19. On Wednesday, DRI arrested Rahul Pandit, an inspector attached to Preventive Division of Customs in Kozhikode, in connection with the same case. DRI sources said that the trio were arrested after corroborating their statements with those of Pandit. The arrested Customs officers were produced before Additional Judicial

Magistrate court in Kochi and were remanded. DRI will seek custody of all four customs officers soon. “Rahul, Rohit, Krishan and Sakendra all joined customs in 2015 and all belonged to the same batch. Pandit was the main person aiding the gold smuggling racket based in Kozhikode. The racket owns jewellery shops in North Kerala and the gold was smuggled for the shops. In order to help the smugglers skip the security check and baggage scan at Kannur airport, Pandit collected their details and images through WhatsApp and sent it to the other three officers who served at the airport. The smuggling happened when these officers were on duty,” said an official. In total, DRI had arrested 16 persons in the case including one of the jewellers in North Kerala, who used to receive the gold from the smuggler. Sumit Kumar, commissioner of customs, Kochi, said that the department has zero tolerance towards any kind of smuggling. According to the officials, the people coming from abroad with gold are just the tip of the iceberg, as they are mere carriers. The kingpins are here and in the Gulf who have nexus with some officials to make the smuggling easy. It is suspected that some influential people are behind the racket.Officials said that the smuggling is likely to increase in future as airport authorities are lobbying for more services, including the service by foreign carriers.Source: The Times of India

The Enforcement Directorate said on Saturday that it has raided multiple locations linked to IRS officer Neeraj Singh, a commissioner in the income tax department, in connection with a money laundering case associated to an alleged disproportionate assets case. Singh was last posted in Chennai and has earlier worked in the investigation wing of the I-T department in Kolkata. ED today said that it has raided multiple locations linked to IRS officer Neeraj Singh, a commissioner in the income tax department, in connection with a money laundering case associated to an alleged disproportionate assets case. The federal probe agency said it raided six locations, two each in Kolkata, Mumbai and Patna, after it booked Singh under the Prevention of Money Laundering

Act (PMLA). The ED filed its criminal case against the Indian Revenue Service (IRS) officer based on a Kolkata Police FIR "for accumulation of huge wealth in the name of his associates by giving undue favours by misusing his official position". Searches conducted at several locations resulted in seizure of various property documents, bank accounts and investment documents, the ED said. Officials said Singh is under the scanner of the Kolkata Police and the ED for alleged links with the prime accused of the Rs 15,000-crore Rose Valley chit fund scam Gautam Kundu. Kundu has been arrested by the ED in the Rose Valley case. The IRS officer has denied these charges in the past.PTI

"Aadhaar authentication of new dealers will be mandatory," Bihar deputy chief minister Sushil Kumar Modi, who heads the group of ministers of GST Network said. Those who don't want Aadhaar authentication, physical verification will be carried out, which will be completed in three days, he added.Bengaluru: In order to check malpractices in GST, the GST Network on Saturday decided to make Aadhaar authentication or physical verification mandatory for new dealers from January 2020. "Aadhaar authentication of new dealers will be mandatory. Earlier it was optional. But we have noticed in two years that there's good number of fly-by-night operators. They make fake invoices," Bihar deputy chief minister Sushil Kumar Modi, who heads the group of ministers of GST Network told reporters after a meeting here. Those who don't want Aadhaar authentication, physical verification will be carried out, which will be completed in three days, he added.As refunding is a big issue, the GSTN decided on complete online refunding from September 24 this year from a single source, either by the Central GST or State GST, Modi said. The GSTN also decided the much simplified new return system may be launched on January 1, 2020, the Bihar Deputy chief minister said. The GST Counc i l mee t ing i s scheduled in Goa on September 20, he added.Source: PTI

The CBI has arrested a superintendent in the Goods and Services Tax (GST) Department from Meerut for allegedly taking Rs 3 lakh to clear a pending case, officials said on Friday. Vikas Kumar Singh, posted at the GST department, Meerut, was caught by the Central Bureau of Investigation (CBI) for allegedly

receiving the bribe, they said. The agency's teams from the Ghaziabad unit carried out searches at the GST office in Meerut on Friday morning, the officials said.PTI

Remembrance

Shri Rajiv DubeyInspector of Customs and

Central Excise

(July 15, 1960 Sept 2, 1989)

An excellent friend and superb human beingwho will always remain in our hearts.

Two batches of Customs officers at Kochi airport under cloud

GST: Aadhaar verificationto be mandatory for newdealers from Jan 2020

ED raids income tax officer, books him for money laundering

CBI Arrests GST Superintendent fromMeerut in Rs 3 Lakh Bribe Case

A suspended CBI inspector who was evading arrest in a bribery case surrendered on Monday, an Anti-Corruption Bureau (ACB) spokesperson said. Prakash Chand was absconding since March this year after a middleman was arrested by the ACB allegedly accepting a bribe of Rs 75 lakh on behalf of him in a case related to a cooperative housing society, he said. The ACB was in continuous search of the inspector, who was posted at the CBI office in Jaipur on deputation from New Delhi. On March 8, middleman Shantilal Anchalia was allegedly arrested accepting Rs 30 lakh in cash and Rs 45 lakh in 11 bank cheques.

The complainant had approached the ACB office with a written complaint on February 14, alleging that the accused inspector was mounting pressure through the middleman for a bribe to settle the case, the probe of which was handed over to the CBI by the Rajasthan High Court. The complainant alleged that the accused had already taken Rs 90 lakh from him and were demanding more money to settle the case in his favour. The accused inspector was summoned through higher officials of the CBI to cooperate in the investigation but he did not appear before the ACB.PTI

Bribery case: CBI inspector surrenders before ACB

1. Nationalism is inspired by the highest ideals of the human race, satyam [the t r u e ] , s h i v a m [ t h e g o d ] , s u n d a r a m [thebeautiful]. Nationalism in India has ... roused the creative faculties which for centuries had been lying dormant in our people. 2. I have no doubt in my mind that our chief national problems relating to the eradication of poverty, illiteracy and disease and the scientific production and distribution can be tackled onlyalong socialistic lines.

Netaji Subhash Chandra Bose