GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS ISSUE DATED 15.2.2010
F Extended period of limitation for recovery of duty : Where assessee voluntarily disclosing facts on particular date, period of limitation cannot be extended thereafter : Kushal Fertilisers (P) Ltd. v. Commissioner of Customs and Central Excise, Meerut. . . 301
F Whether failure to disclose facts and period of limitation extended is a question of fact : Kushal Fertilisers (P) Ltd. v. Commissioner of Customs and Central Excise, Meerut . . . 301
F Secured debts or debts which by provision of statutes get first charge over property and would prevail over Crown debts which are unsecured : Union of India v. SICOM Ltd. . . . 346
F In order to adjudicate claim of third party on goods confiscated due to failure on part of original importer to clear goods, original importer is necessary party : Commissioner of Customs (Exports), Chennai v. Ishwar Impex (Mad) . . . 293
F Presumption against retrospective operation is not applicable to declaratory statutes : Premium Suitings Pvt. Limited v. Commissioner of Central Excise, Division Kanpur (All) . . 310
F Prolongation of hearing from one day to another due to paucity of time or for non-conclusion of arguments not adjournment : Prakash Industries Ltd. v. Commissioner of Central Excise, Raipur. . . 328
F Where no reliable evidence showing clearance of excisable goods without payment of duty, order imposing penalty and interest set aside : Sarita Software and Industries Ltd. v. Commissioner of Central Excise, Visakhapatnam . . . 341
Rules :
Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2009 . . . 97
Notifications :
Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 :
Notification under section 1(3) : Commencement of sections . . . 98
Notification under section 25(1) : Authorised officers to act under sections 12 and 13 . . . 99
Notification under section 25(1) : Amendments . . . 100
Notification under section 25(1) : Amendments in rates . . . 111
Notification under section 9A(1) and (5) : Imposition of definitive anti-dumping duty on imports . . . 105, 112
Goods and services tax : Optimal rate is vital (Dr. Geeta Das) . . 68
Goods and services tax : Threshold limit (Dr. Geeta Das) . . 65
Power of Commissioner (Appeals) for remand of case in Customs and Central Excise Appeals (K. Sankararaman) . . 72
F Proposal to hike export duty on ore
The Steel Ministry has proposed an across the board increase in export duty on iron ore to discourage export and lower the import duty on ore to zero to ensure that there is adequate raw material available for the domestic industry.
The proposal will benefit domestic steel manufacturers as it will increase the availability of cheaper ore for value addition within the country, helping them to boost their bottomlines.
In its pre-budget memorandum to the Finance Ministry, the steel ministry has suggested that the export duty be hiked to 20 per cent. on all grades of iron ore from the current levels of 10 per cent. on iron ore lumps and pellets and 5 per cent. on iron fines.
The duty on pellets, lumps and fines was raised only recently on December 2009 following consistent rise in ore exports. Prior to December, the duty on iron ore fine was nil and on pellets and lumps was 5 per cent.
Iron ore imports, on the other hand, attracts a duty of 2 per cent. The Steel Ministry has recommended that this should be brought to zero to facilitate coastal steel plants who use high grade iron ore for blending.
The Steel Ministry justifying the increase in export duty has said, "Iron ore exports have been increasing on account of current global demand, particularly from China. During April-October, 2009, the exports of iron ore is higher by 20.8 per cent. in comparison to last year. Indications are that this may further increase".
The ministry had at times even argued for a ban on iron ore exports to conserve raw material for the industry, a demand that has found favour with the big steel players. The steel ministry also wants the customs duty on stainless steel and alloy steel melting scrap to be brought down from 5 per cent. to zero, to further boost the availability of raw material for the industry.
It is, however, keen to insulate the domestic industry from imports and suggested that the 5 per cent. import duty on flat and long steel products and sponge iron, pig iron, could be retained at the current levels. [Source : The Economic Times, February 6, 2010]
F Agriculture and Food Minister urges States to waive VAT, local taxes on food items
In his effort to bring down the soaring food prices, Agriculture and Food Minister urged States to waive the value-added tax and other local levies on foodgrain and sugar.
"I would urge the states to relook the issue of taxes levied by them on foodgrain and sugar," he said while addressing the chief ministers' conference on price rise convened by the Prime Minister.
The rate of VAT and other local taxes on foodgrain is over 10 per cent in states like Punjab and Haryana, while it ranges between 3 and 8 per cent in Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar and Gujarat, he said.
On sugar prices, the Minister said, Delhi, Karnataka, Gujarat, Bengal and Bihar have already abolished VAT on imported sugar and similar steps required in other states. The VAT on sugar was 12.5 per cent. in Delhi and Karnataka, while it was 4 per cent. in Bengal and Bihar.
Commending Chhattisgarh for abolishing entry tax on sugar, he asked Punjab, Madhya Pradesh and a few other states to remove such cess.
He also asked Uttar Pradesh to lift the restrictions on processing imported raw sugar in the state. [Source : The Economic Times, February 6, 2010]
F SC to examine Punjab's plea on VAT provisions
The Supreme Court has decided to examine the plea of Punjab Government pertaining to the provision of its VAT law which according to the Government provides no exemption to the assessees from the mandatory deposit of 25 per cent. of the tax, penalty and interest for entertaining their appeal by the appellate authority.
"It appears that the High Court did not considered the provision of section 62(5) of Punjab Value Added Tax Act, 2005", said a Bench comprising of Justice SH Kapadia and Justice Swatanter Kumar while issuing notice to Femina Jewellery Pvt Ltd. The High Court allowing the writ petition filed by Femina had directed that the appeal of the petitioner shall be entertained by the Appellate Authority without pre-deposit of 25 per cent. of the amount assessed by the authority. [Source : The Economic Times, February 8, 2010]
F Excise hike in Budget to set off stimulus exit
Excise duties are likely to be raised in the forthcoming Budget by between 2 and 4 percentage points.
Top sources in the Government have indicated that it is necessary to start increasing the rates now to get closer to the Goods and Services Tax rate when it is introduced, perhaps in a year.
The likely Central GST rate is around 14 per cent. But the current excise rates are down to between 4 per cent. and 10 per cent. The average rate is 8 per cent. "It would be too high a gap to bridge at one-go when GST comes," says a noted Government economist.
Top industry sources said : "We have more-or-less given up. But we are still trying to persuade the Government not to raise excise duties now. The producers will pass on the increase and that will only add to inflation."
However, inflation in manufactured products has been low, around 2 per cent on an average in the last six months (excluding sugar and other agri-products) compared to inflation in food products which has been ranging between 17 and 20 per cent. This gives the Government some elbow room to raise excise duty rates.
The Government slashed excise duty rates steeply during December 2008-March 2009 as part of its stimulus package to keep growth up after the global financial system collapsed in September 2008.
Excise rates since December 2008 had been progressively cut from 16, 12 and 8 per cent. to 10, 8 and 4 per cent. depending on the product in question. Service tax was also reduced from 12 to 10 per cent.
The Government is considering a phased increase in indirect tax rates, and not a one-shot withdrawal.
"The withdrawal is likely to be gradual," said Dr. C. Rangarajan, Chairman, Prime Minister's Economic Advisory Council. "I expect the Government to take some steps on fiscal consolidation in the Budget."
India had provided three rounds of stimulus packages in the aftermath of the global financial meltdown in September 2008.
The package included both monetary loosening and indirect tax cuts besides fiscal incentives for exporting community.
Recently, the Planning Commission Deputy Chairman said that with the growth impulses now back, the time has come to start exiting.
There are expectations that the Centre will in the Budget undertake some unwinding of the fiscal stimulus.
The RBI had in the second quarter policy review initiated the process of monetary exit and further moved in that direction by announcing a 75 basis point hike in cash reserve ratio in end January 2010 as part of the third quarter review of monetary policy. [Source : The Hindu Business Line, February 11, 2010]
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