| Business Line updates Ficci task force report on Goods & Services Tax to be released today |
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Mumbai, 21 April The report of the Federation of Indian Chambers of Commerce and Industry (Ficci)' s task force on Goods and Services Tax ( GST), headed by former president Harsh Mariwala, will be released by Bihar Deputy Chief Minister & Chairman, Empowered Committee ( EC) of State Finance Ministers, Sushil Kumar Modi today. The report has made a strong pitch for a uniform rate of GST for goods and services, and for all states to be taken on board the GST regime at the same time. Besides, the task force has emphasised a need for a single agency either at the centre or at the state, where assessees can submit composite returns instead of multiple jurisdictions and multiple filing of returns under GST. A Ficci official told Business Standard: "There have been reports that the EC is considering giving states the option to join or opt out of the GST regime. However, the task force is opposed to awarding states the option of opting out of the GST regime. Ficci believes that will be detrimental to the growth of industry, since it will greatly affect inter- state sales." The official said while the EC was working with renewed energy towards the implementation of GST industry consultation has been missing in finalising the architecture. Under the current tax regime, there is no clear definition of what goods are and what services are. This has often led to disputes over definition. "The task force has recommended a uniform rate of GST for both goods and services. This will help in resolving any dispute on the definition of what ' goods' are and what 'services' are. Any proposed differential tax treatment for goods and for services will continue to create interpretative disputes," the official said. Further, the task force has argued in favour of a uniform rate of GST and has opposed the proposed band of rates. "The adoption of a band of rates is not desirable since this could very well create differential tax rates between neighbouring states thereby creating tax arbitrage opportunities that often result in unfarvourable clandestine trade," the task force said in its report. Under the current tax regime, excise duty exemption is ₹ 1.5 crore per annum, service tax exemption is at ₹ 10 lakh and varied exemptions exist for value- added tax across different states. " The task force has suggested a single exemption limit under GST at ₹ 50 lakh. This will ensure the small companies are left out and in turn, reduce the number of tax assesses. This will also make tax administration easier and thereby reduce tax evasion," the official noted. |
| LEGAL DIGEST |
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The Supreme Court last week held that the Madhya Pradesh government cannot demand entertainment tax on DTH services provided to customers of Tata Sky under the state Entertainment Duty and Advertisements Tax Act. The revenue department had demanded 20 per cent entertainment duty on subscription payment from the telecasters. They had moved the high court, but it had dismissed all of them, upholding the demand of the revenue authorities. Allowing the appeal of the company in the case, Tata Sky vs State of MP, the judgment stated that the Act cannot be extended to cover DTH operations. The state law imposes duty only if an entertainment takes place in a specified place or location and persons are admitted there on payment of a charge to the proprietor providing the entertainment. In the case of DTH, the operation is not a place- related entertainment. Therefore, the law is not applicable to DTH. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> RTI query on CESTAT dismissed The Supreme Court last week dismissed an appeal seeking inspection of documents relating to the annual confidential report of a judicial member of the CESTAT allegedly containing adverse entries and the " follow up action" taken on the question of integrity of the member, Ms Jyoti Balasunaram. The Delhi High Court, and earlier the information commissioner, had dismissed the plea as the information is personal and no larger public interest is involved. In this case, RK Jain vs Union of India, the petition under the Right to Information Act was rejected by the finance ministry as the information sought was personal information of a third party. This view was upheld in all the appeals. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Company petition maintainable The Supreme Court has set aside the judgment of the Calcutta High Court in the long- standing dispute between Bhagwati Developers and Peerless General Finance Ltd over a complaint of oppression and mismanagement. Since the dispute started in 1991, the matter was remanded to the high court to decide it within six months. The high court had rejected the claim of Bhagwati Developers to maintain the company petition because it had less than the required shares to move the company court. The Supreme Court stated that a winding up petition can be filed with 10 per cent shareholding in all. It is not necessary that the petitioner must hold it individually. A petition can be filed even after obtaining the consent of other shareholders, the Supreme Court ruled. It said that the law does not require that " the consent should be given by a member personally, as the same can also be given by the power of attorney holder of such a shareholder. Furthermore, the issue of consent must be decided on the basis of a broad consensus approach, in relation to the avoidance and subsistence of the case. The same must be decided on the basis of the form of such consent, rather on the substance of the same. There is hence, no need of written consent, or even of the consent being annexed with the company petition." >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> BPCL order held illegal The dealership of Bharat Petroleum Corporation Ltd ( BPCL) cannot be terminated without strictly following the procedure laid down in the Petroleum Act, the Supreme Court has stated while dismissing the appeal of the company in the judgment, BPCL vs M/ s Jagnnath & Co. The dealership of the partnership firm, which was operating for 37 years without complaint, was cancelled because some samples taken of the petroleum products in stock did not meet the required specifications. The dealership was awarded to another firm. The old firm challenged the action as against natural justice and against the guidelines. It stated that product samples should be taken again and retested by an independent agency in the presence of its officers. When there was no response, the firm moved the Allahabad High Court. It alleged mala fides on the part of an officer. Its writ petition was allowed by the Allahabad high court and the court asked the corporation to restore the dealership to the original firm. BPCL appealed to the Supreme Court but the high court order was upheld. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Minister rapped for land deal The Supreme Court has set aside the judgment of the Karnataka high court and remarked that the order of de- notification of land acquired under the Land Acquisition Act at the instance of the then minister was illegal. The land was notified in 1971, but after a visit of the minister to the land in question, it was de- notified, even against the report of a three- member committee. The judgment in the case, State of Karnataka vs Vijaya Leasing Ltd stated: " We wonder why the minister concerned should have taken upon himself the extraordinary effort of making an inspection for which no special reasons were given... The minister committed gross illegality by directing the issuance of de- notification in 1999 despite the fact that possession had already been handed over to the state in 1983." MJ ANTONY THINKSTOCK |
| Lateral thinking will eliminate pending stay petitions in CESTAT |
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While welcoming the new president of CESTAT on April 6, 2013, president of CESTAT Bar Association R K Jain said more than 75,000 general cases were pending and stay petitions were more than 11,000. The effect of pendency is so crippling that the Karnataka High Court has ordered the government to create new benches immediately. My view is that increasing the number of benches can only solve the problem marginally. Unless the rate of disposal of stay petitions becomes more than the rate of receipt, the problem will never be solved. So, we must do some lateral thinking to increase disposals. The government has been rather pusillanimous about granting the power to decide cases to a single bench. It is limited to ₹ 50 lakh, if valuation or classification is not involved. Where classification or valuation issues are involved, even a case of ₹ 5,000 is decided for giving stay by abench of two members. Most cases are of this category. So the misery continues. In this context, one must understand afew things. Stay is not a final decision. It is only an interim decision where there is a prima facie case for the tax payer. Merely for this, if the time of a division bench is devoted, little time is left for deciding cases finally. A prima facie case can surely be decided by a single member. And this, in no way, affects the final decision which will be given by a division bench. It is only for an interim period that the stay is valid. The time is maximum 180 days and usually about three months. So, the risk to revenue is not there particularly, if the chief departmental representative in the CESTAT keeps a tab on cases where stay has been given but final decision is not forthcoming. There is a very practical difficulty about forming a division bench in places where there is only one bench. Usually, one member is present always but the second member is not available for various reasons. He may not have joined because it does not suit him. He may have taken leave because his family is elsewhere and so on. These are not imaginary examples. Not having a full bench stops all cases of stay for quite long. It is common that stay petitions have not come up for more than a year. So, my first and most important suggestion is that all cases of stay petitions, irrespective of issues involved, should be allowed to be decided by single bench in regard to stay matters. There may a limit of ₹ 5 crore. My second suggestion is that bunching of files should be done both by the CDR and by the registry of the CESTAT. One decision will dispose of scores of cases. Third, the hearings should be fixed on first- come- first- serve basis. Fourth, all compliance matters should be dealt with by the registrar. Only noncompliance can be reported to single bench. Fifth, where party has paid duty voluntarily after detection, the issue remains only for imposing penalty. Such cases can be dealt with by single bench. This suggestion will not be necessary, if the first one is accepted. Last but not the least, CBEC should allow departmental representatives to concede that there is a prima facie case. This does not bind the department in the final decision. We must remember that 85 per cent cases are lost by revenue in the CESTAT. So why fight tooth and nail even in stay petitions? Conclusion: We should free the division benches from hearing routine cases and stay petitions. Email: smukher2000@ yahoo. com EXPERT EYE SUKUMAR MUKHOPADHYAY THINKSTOCK |
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Company Secretary, Chennai
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