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Congress is by now known to be out of Maha-Gathbandhan. The broad based prediction can be drawn from the Smvatsar which begins from 6th April, 2019. Samvatsar 2076 is known in the ancient Vedic Astrological Texts, as “Pramadi” year . The ruling planet in the Planetary Cabinet of the year will be the Saturn as the King (Raja) and Sun as the Mantri. Now this situation, in this year is exactly opposite to what is normally provided in the Vedic astrology while assigning attributes to the planets. While Sun is considered as the King in the Planetary Cabinet, Saturn represents masses or subserv ient . Therefore, situation in this samvatsar is exactly opposite to its natural attributes (Karaka) in India. It is the will of the masses that will dominate the will of the King or Ruling Class. Simply stating, it is not uncommon in an Election year, where those v y i n g f o r h o n o u r s f o r b e c o m i n g Parliamentarians have to go with begging bowls for votes to the public. But this election process is likely to end by May, 2019. However, samvatsar lasts for almost 12 months. Does not it indicate that even when ruler is given mandate to rule, he will still be subjected to the dominance of many others, even if not by masses directly , then at least by those who are elected by them? This is possible only when the leading party that puts the Prime Minister in Chair needs a Coalition Support. Therefore,

Elect ions 2019: The season of promises: In last General election season, it was Rs.15 lakhs in each bank account from black money returned, by BJP. Though la te r i t was dubbed as `Chunavi jumla’ by its own leaders. This year it has been promise of Rs.12,000/- per men sum pension for

25 crores of poor population by Rahul Gandhi. Not realizing that the outlay will be Rs.18,00,000 crores. For a Nation struggling with its GST revenue numbers. This translates into more than twice the Central share of GST. Therefore, practically a government in order to fulfil this kind of promise, needs equivalent of two GST taxes to be generated, if it does not want to increase deficit financing and raise inflation. Is this much of taxing of public, possible? It is obviously not. But then ‘Jumlebaazi’ in a Democracy and that too during elections is no one’s exclusive preserve. The greater the desperation to win an election, greater is the ‘Jumlebaazi and then it is the other side which engages in it too, So, finally it becomes a ‘Qwaali’ of ‘Jumlebaazi’Prospects for General Election 2019:Without getting into very detailed analysis as three political groups are in the fray and

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PARDE MEIN REHNE DO PARDA NA UTHAO T h e f a m o u s song from the movie, Shikar is the refrain of the promoters, whereas the common investing public would much rather sing “Parda Uthe Salaam Ho Jaaye” The courts have had to strike a fine balance between the two.

Piercing of Corporate Veil under Statutory Provisions enshrined under the Companies Act, 2013 The Veil of a company may be lifted in certain cases or pierced as per express provisions of the Act. In other words, the advantages of ‘distinct entity’ and ‘limited liability’ may not be allowed to be enjoyed in certain circumstances. The Companies Act, 2013 itself provides for certain cases in which the directors or members of the company may be held personally liable. In such cases, while the separate entity of the company is maintained, the directors or members are held personally liable along with the company.HISTORICAL PERSPECTIVE The House of Lords in Salomon v Salomon1 affirmed the legal principle that, upon incorporation, a company is generally considered to be a new legal entity separate from its shareholders. The court did this in relation to what was essentially a one person company. Windeyer J, in the High Court in Peate v Federal Commissioner of Taxation, stated that a company represents: “New legal entity, a person in the eye of the law. Perhaps it were better in some cases to say a legal persona, for the Latin word in one of its senses means a mask: Eriptur persona, manet res.”Salomon v Salomon & Co [1897] AC 22 “Between the investor, who participates as a shareholder, and the undertaking carried on, the law interposes another person, real though artificial, the company itself, and the business carried on is the business of that company, and the capital employed is its capital and not in either case the business or the capital of the shareholders. Assuming, of course, that the company is duly formed and is not a sham...the idea that it is mere machinery for effecting the purposes of the shareholders is a layman’s fallacy. It is a figure of speech, which cannot alter the legal aspect of the

Sumit Dutt Majumder Negotiations on GST rates for lottery tickets have got stuck as Kerala, which earns a huge amount from its sales, does not want to raise taxes from the present 12 percent While GST rates for property have been settled, those for lottery have reached a stumbling block. The 33rd meeting of the GST Council on February 24 could not come to a decision regarding a change in the GST rate structure for lottery tickets. The matter was referred again to the Group of Ministers (GoM) led by Maharashtra Finance Minister Sudhir Mungantivar which has Kerala, Punjab, West Bengal and Goa as members. In fact, bringing lottery within the ambit of GST was a Herculean task. It required a series of negotiations between the centre and the states to get it into GST. In the pre-GST days, the centre had no taxing authority on lottery and hence, the states had exclusive authority over taxing it. Some were state-run lotteries, while some were by agents authorised by state governments. Prominent among them were Kerala, Punjab, West Bengal, Maharashtra and Sikkim. When the negotiations for inclusion of different goods and services within GST started, these states, particularly Kerala, were against bringing lottery under GST. Decisions on real estate At its 33rd meeting, the GST Council took some important decisions on the residential segment of the real estate sector. For “affordable houses”, the GST rate was reduced to one percent from the existing eight percent, but with denial of input tax credit for construction material and capital goods. For “non-affordable houses”, the rate was reduced from 12 percent to five percent with denial of credit. The definition of “affordable houses” has been changed by linking it to the cost as well as carpet area. A difference has been made between non-metro cities and metro cities such as Delhi-NCR, Mumbai- MMR, Kolkata, Chennai, Bengaluru and Hyderabad. A flat with a cost up to Rs 45 lakh and having a carpet area up to 60 sq m in metros and with the same cost and up to a carpet area of 90 sq m in non-metro cities will qualify as an “affordable house”. The effective tax burden on “non-affordable houses” may not be significantly lower because of the tax costs of inputs like cement, paint, steel, fixtures, etc. But for

New Delhi Vol : X No. 7 Pages: 12 March 2019 Price: Rs 20/- (Per copy)US $1 (Per copy) Outside India

Section 10 of the CGST Act lays down the provisions regarding Composition levy. T h e l a r g e n u m b e r o f amendments and changes in the basic provisions and limits to this special scheme of levy has led to a lot of complicated interpretations

and application of the scheme. In an attempt to bring out the issues involved in respect of various changes from time to time, and to highlight the issues, this Article is being presented for benefit of readers. This levy can be opted for by businesses with aggregate turnoveruptoa specified

limit in the preceding year. For arriving at the aggregate turnover, turnover of all businesses with separate registration, being distinct persons under same PAN have to be added up to calculate turnover limit for the purpose of composition scheme.The said specified limit can be summarily presented (in Table 01): It is to be noted here that those persons whose aggregate turnover exceeded the specified limit before the date of increase of limit became ineligible to continue with the said option and are required to enter the regular scheme due to the stipulation under Section 10 (3), even if the turnover of the preceding year was below the lesser limit.

However, such persons, can opt for composition levy in the next year if the aggregate turnover of the preceding year is below the amended limit effective on date on which option is exercised. Thus, for the FY 2019-20, if the aggregate turnover is below the increased limit effective from 01-04-2019, even if the person had become ineligible to avail the composition levy in 2018-19, he is eligible to opt for it for FY 2019-20, provided he / she files CMP -02 it within the prescribed time limit i.e. 31.03.2019 and thereafter files ITC – 03 within 60 days thereafter.As per the original provisions, effective, 01.07.2017, only Manufacturers of goods,

restaurants (not serving alcohol) and traders of goods were e l ig ib le to opt for composition scheme and were liable to pay tax @ prescribed composite rates on the entire turnover in a state. W.e.f. 01.02.2019, suppliers who have marginal supplies of services have also been allowed to opt for composition levy on all supplies of goods and services made by them. The rates of tax and the amount on which such rate shall apply under composition levy during different time based on amendments from time to time may be summarised as under (in Table 02): The rates of tax and method of

A K AgnihotriEx-Comm, Customs& Central Excise

Continued on page 06

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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

Raginee Goyal(Chartered

Accountant)

The person was brought to Mumbai on transit remand and was produced before a Special Judge. The court has remanded the accused to CBI custody till March 13.THE CASE The ca se aga ins t h im was registered on September 29, 1999 on the complaint of the Special Intelligence and Investigation Branch (SIIB) of Customs department, Mumbai and others, including private firms. It was alleged that, while working as an appraiser, he had abused his official position and dishonestly confirmed fake Duty Entitlement Pass Book (DEPB) scrips as genuine which were submitted by other accused companies and persons. The f raudulent ac ts of the

The f raudulent ac ts of the appraiser and other accused caused wrongful loss to the customs department, to the tune of Rs 4 00,72,496 by way of loss of customs duty on goods imported. T h e C e n t r a l B u r e a u o f Investigation (CBI) has arrested a former appraiser of the customs department of Mumbai, who had been absconding for nearly 20 years - in a case related to wrongful loss caused to the department. It was alleged that he had changed his identity on the basis of fake and forged degrees and had started working as a doctor in medical colleges and hospitals. The accused was arrested by the CBI, while he was impersonating as a doctor and reportedly working as an associate professor with a medical college in Uttar Pradesh's Akbarpur city.

Continued on page 06

Somesh AroraCCO, Amicus

Rarus, Ex-Comm,Customs &

Central Excise

Elections 2019: The season of promises CORPORATE VEIL& GOVERNANCE

GST on Lottery: NoJackpot for Anyone

CBI arrests fugitive Customs Officer(Appraiser) after 20 years of fraud

Composition Levy - Salient Features And Amendments

For e-paper, visit : www.thertt.comMarch 20192

In a move to aid the real estate sector, the all-powerful GST Council Tuesday approved a transition plan for the implementation of new tax structure for housing projects. As per the decision taken by the GST Council, the developers of residential projects which are incomplete as on March 31, will have option either to choose the old structure with Input Tax Credit (ITC) or to shift to new 5 per cent and 1 per cent rates without ITC. In the previous meeting on February 24, the Council slashed tax rates for under-construction flats to 5 per cent from 12 per cent and affordable homes to 1 per cent from 8 per cent, effective April 1."GST Council today has approved

transition plan for the new rate structure for real estate residential projects...from April 1, builders have to choose either of the options for which they will get time," Revenue Secretary A B Pandey told reporters after the 34th meeting of the GST Council here. Finance Minister Arun Jaitley chaired the meeting with state finance ministers via video conferencing. On the time-frame for transition, Pandey pointed out that the council has agreed on providing a reasonable time to developers. The matter would be decided in a next few days in consultation with the states, he said, adding that it could be 15 days or one month. Pandey further said that the

decision will help the builders in clearing inventories. "This go-ahead by the GST Council brings quite a relief for this sector in handling transition issues in specific," EY India Partner Abhishek Jain said. For upcoming projects, reduced rates of 5 per cent and 1 per cent will be applicable beginning April 1. On the next GST Council meeting, the Revenue Secretary said that is unlikely till theelection process is over. He, however, said that if any emergent situation arises then a meeting could be called with the permission of the Election Commission. On apprehensions being raised on possible price rise due to new tax structure, thesecretary said if prices escalate, the

National Anti-profiteering Authority will look into it and take an appropriate action. Deloitte India Partner M S Mani said the pragmatic move to segregate under construction projects from new projects would provide relief to builders who were worried about theloss of input tax credit. "This would also enable them to price the loss of input tax credits in the new projects. Reversa l of Input tax credi t on a proportionate basis would entail significant computational issues for builders as each project would be in various stages of construction and have differing pre and post completion sale patterns," Mani said.PTI

GST Council approves transition plan for new tax rate for housing sector

Faizan Mustafa(Vice Chancellor, Nalsar University of Law, hyderabad) Ideally, judges should never be oversensitive to public criticism. Bona fide cri t icism should be welcomed and appreciated because it opens the doors to introspection. A fair comment on the merits of a judgment is not contempt. Contempt proceedings are a relic of a bygone age and no t gene ra l ly i nvoked in mode rn democracies.Paradox: The contempt law is problematic as the judge himself acts both as prosecutor and victim and starts with the presumption of guilt rather than innocence. AFTER the Spycatcher judgment by the House of Lords in 1987, British newspaper Daily Mirror published an upside-down picture of three law lords with the caption, ‘You Old Fools’. Lord Templeman refused to initiate contempt proceedings and said he was indeed old and whether he was a fool was a matter of perception, though he personally thought he was not one. British judges don’t take notice of personal insults, if uttered without malice. After the Brexit judgment, Daily Mirror titled its story ‘Enemies of people’and again no contempt notice was issued. Contempt proceedings are a relic of a bygone age and not generally invoked in modern democracies. Lately, there has been a surge in the use of contempt power in India; it is an exception to the freedom of speech. Former Supreme Court judge Markandey Katju was asked to explain his criticism of the judiciary. Lawyer Prashant Bhushan was in the contempt loop over his

tweets regarding the appointment of the CBI’s acting director. The Attorney General now wants to wi thdraw con tempt proceedings. Several eminent public men want to intervene in this matter because contempt power is not to be used to discipline the lawyers. Shillong Times Editor Patricia Mukhim and publisher Shobha Chaudhry were found guilty of contempt by the Meghalaya High Court despite their apology. They were ordered to sit in the corner till the rising of the court and fined Rs 2 lakh each, failing which they were to serve a sentence of simple imprisonment for six months, besides a ban on the paper. The Supreme Court stayed this order on Friday. The contempt power was used over a news report carried by the Shillong Times titled ‘When judges judge for themselves’. It began with former Chief Justice of Meghalaya High Court Uma Nath Singh and former Justice TNK Singh’s order of January 7, 2016, in which Z security was to be provided to the former judges. It went on to say that similarly, Justice SR Sen, who is set to retire, has ordered providing several facilities not only to retired judges, but also to their spouses and children. In addition to medical facilities, the controversial order stressed the need for providing protocol, g u e s t h o u s e s , d o m e s t i c h e l p , mobile/internet charges at the rate of Rs 10,000 and a mobile phone for Rs 80,000 for judges. It was found that the news report was not based on facts and was intended to scandalise the High Court. The caption was found malicious and contemptuous. Mukhim was also alleged to have made insulting comments against the court on

social media. It seems the actual facts were that the Meghalaya government had withdrawn protocol service from the retired judges and their family members without consulting the High Court. Subsequently, the Chief Justice called a meeting of the Chief Secretary and other senior bureaucrats, seeking their explanation on this withdrawal, but they could not give a satisfactory answer. They were asked to restore these benefits, but when this did not happen even after a lapse of two months and some judges faced difficulties, the High Court initiated suo motu proceedings. Since the government kept mum and did not restore the benefits, contempt proceedings were initiated against the Chief Secretary, Law Secretary, Commissioner and Secretary, General Administration Department (GAD), Shillong. The court came down heavily on the journalists as their report had attributed motives to Justice Sen though the cases are allotted by the Chief Justice, who is the master of the roster. By the way, the Chief Justice was the other judge on this Bench. Justice Sen was recently in the news for desiring that India be declared a Hindu rashtra. In his judgment, he has praised Prime Minister Narendra Modi and advocated passage of the controversial Citizenship Bill. Ideally, judges should never be oversensitive to public criticism. Bona fide criticism should be welcomed and appreciated because it opens the doors to introspection. Lord Atkin, in Ambard vs Attorney General of Trinidad and Tobago (1936), rightly said that “the path of criticism is a public way: the wrong-headed are permitted to err therein; provided the

members of the public abstain from imputing improper motives… Justice is not a cloistered virtue: she must be allowed to suffer the scrutiny and respectful, even though outspoken, comments of ordinary men.” In 2006, the then UPA government brought in the long overdue amendment to the Contempt of Courts Act (1971), which now provides ‘truth’ as defence, provided it is bona fide and in public interest. A fair comment on the merits of a judgment is not contempt. Attributing improper motive to a judge or scurrilous abuse of judge will amount to scandalising the court and thus amount to contempt. The contempt law is problematic as the judge himself acts as prosecutor and victim and starts with the presumption of guilt rather than innocence, and in his discretion decides punishment. British judge Lord Denning, in Metropolitan Police Commissioner (1969), rightly observed that contempt “jurisdiction undoubtedly belongs to us, but which we will most sparingly exercise: more particularly as we ourselves have an interest in the matter. Let me say at once that we will never use this jurisdiction as a means to uphold our dignity. That must rest on surer foundations. Nor will we use it to suppress those who speak against us.” Let Indian judges follow this greatest judge of the 20th century and demonstrate their compassion and large-heartedness in dealing with contempt cases so that the dignity of courts rises in the hearts of the people. Source: The Tribune

Contempt jurisdiction should be used sparingly

The Income Tax Department has attached assets worth Rs 225 crore of retired IAS officer Netram, a former secretary of BSP supremo Mayawati, in connection with a disproportionate assets case. Searches were carried out on March 12 at 11 premises in Delhi, Lucknow, Kolkata and Bareilly of Netram. Income Tax officials seized cash amounting to Rs 2.03 crore and jewellery worth Rs 17.79 lakh. Also, incriminating documents were recovered. As many as 20 immovable properties valued at Rs 225 crore and three luxury cars valued at about Rs 1 crore found at the residence of the IAS officer have been provisionally attached under Section 132 (9B) of the Income Tax Act, the Income Tax Department said. 17 lockers restrained during searches are yet to be searched, the department added. Last week, multiple locations connected to Netram were raided by Income Tax officials. "Raids on the locations related to

Mayawati's former secretary, Netram, resulted in thedisclosure of 30 shell companies, additional properties worth Rs 225 crore and crores of rupees in cash,” sources in Income Tax department had said. As per IT sources, in most of 30 shell companies, either family members of the assessee or Netram's in-laws were shown as shareholder and director. "His in-laws expressed complete ignorance about such companies. Children of the assessee are authorised persons to operate bank accounts of shell companies," they said. During the raids, documents related to gift of shares of shell company to family members of assessee, handwritten diaries recording transactions for acquiring shell companies and investments were found, the sources alleged. Extra-luxurious interiors, mini-theatre and gym were found at his Lucknow and Greater Kailash (Delhi) houses by the IT officials, they said.ANI

Mayawati’s ex-Secy, Retd IAS officer Netram’sRs 225 crore properties attached in DA case

Justice Pinaki Chandra Ghose on Saturday took oath as the first Lokpal of India at the Rashtrapati Bhawan after President Ram Nath Kovind appointed him as thefirst Ombudsman. The Rashtrapati Bhawan issued a press communique on Tuesday night stating that Justice Ghose has been appointed the chairperson of the

Lokpal. The four other judicial members in the Lokpal are Justice Dilip B Bhosale, Justice Pradip Kumar Mohanty, Justice Abhilasha Kumari and Justice Ajay Kumar Tripathi. Members other than judicial members include Dinesh Kumar Jain, Archana Ramasundaram, Mahender Singh and Dr Indrajeet Prasad Gautam.

Justice P C Ghose takes oath as first Lokpal of India "These appointments will take effect from the dates they assume charge of their respective offices," informed the Rashtrapati Bhawan statement further. Earlier, Congress leader Mallikarjun Kharge had shot off a letter to Prime Minister Narendra Modi turning down the offer to be a special invitee for the selection

of theLokpal. The Centre had urged Kharge to be a part of the selection process after the apex court gave 10 days to choose the dates on which the Selection Committee would meet to appoint the Lokpal.ANI

The Directorate of Revenue Intelligence (DRI) has seized smuggled foreign-origin cigarettes worth Rs 17 crore at the Jawaharlal Nehru Port Trust (JNPT), and four persons have been held in this connection, an official said Thursday. Acting on a tip-off, a team of DRI's Mumbai unit intercepted a 40-feet container from Dubai, which was on its way to an Inland Container Depot (ICD) at a godown in Navi Mumbai on Tuesday, the official said. "Around 650 master cartons containing the cigarettes were found kept in the container. The cigarettes were being replaced with the declared cargo of wash basins," he added. The replacement cargo was also found stored at the godown, where the wash basins were marked with 'Made in China', he said. "During the investigation, it came to l igh t tha t these wash bas ins were

domestically procured from a shop in Navi Mumbai and the 'Made in China' markings were intended to mislead the Customs officials into thinking that the goods was imported," he said. The syndicate had adopted a modus operandi as per which they would replace the container with declared cargo on the way to the ICD by breaking open the seal and later fixing it with a duplicate seal, the official said. "The mastermind, an Indian national based out of Cyprus has been apprehended and three others have been arrested in this connection," the official said, adding that further investigation was on. (This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Foreign cigarettes worth Rs 17 croreseized by DRI, four held

For e-paper, visit : www.thertt.com3

Circular No. 96/15/2019-GSTF. No. CBEC-20/16/04/2018 – GST Doubts have been raised whether sub-section (3) of section 18 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as „CGST Act�) provides for transfer of input tax credit which remains unutilized to the transferee in case of death of the sole proprietor. As per sub-rule (1) of rule 41 of the Central Goods and Services Rules, 2017 (hereinafter referred to as „CGST Rules�), the registered person (transferor of business) can file FORM GST ITC-02 electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee. Further, clarification has also been sought regarding procedure of filing of FORM GST ITC-02 in case of death of the sole proprietor. In order to clarify these issues and to ensure un i formi ty in the implementation of the provisions of the law, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issues raised as below. 2. Clause (a) of sub-section (1) of section 29 of the CGST Act provides that reason of transfer of business includes “death of the proprietor”. Similarly, for uniformity and for the purpose of sub-section (3) of section 18, sub-section (3) of section 22, sub-section (1) of section Circular No. 96/15/2019-GST Page 2 of 3 85 of the CGST Act and sub-rule (1) of rule 41 of the CGST Rules, it is clarified

that transfer or change in the ownership of business will include transfer or change in the ownership of business due to death of the sole proprietor. 3. In case of death of sole proprietor if the business is continued by any person being transferee or successor, the input tax credit which remains un-utilized in the electronic credit ledger is allowed to be transferred to the transferee as per provisions and in the manner stated below – a. Registration liability of the transferee / successor: As per provisions of sub-section (3) of section 22 of the CGST Act, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession, where a business is transferred to another person for any reasons including death of the proprietor. While filing application in FORM GST REG-01 electronically in the common portal the applicant is required to mention the reason to obtain registration as “death of the proprietor”. b. Cancellation of registration on account of death of the proprietor: Clause (a) of subsection (1) of section 29 of the CGST Act, allows the legal heirs in case of death of sole proprietor of a business, to file application for cancellation of registration in FORM GST REG-16 electronically on common portal on account of transfer of business for any reason including death of the proprietor. In FORM GST REG-16,

reason for cancellation is required to be mentioned as “death of sole proprietor”. The GSTIN of transferee to whom the business has been transferred is also required to be mentioned to link the GSTIN of the transferor with the GSTIN of transferee.c. Transfer of input tax credit and liability: In case of death of so le proprietor, if the business is continued by any person being transferee or successor of business, it shall be construed as transfer of business. Sub-section (3) of section 18 of the CGST Act, allows the registered person to transfer the unutilized input tax credit lying in his electronic credit ledger to the transferee in the manner prescribed in rule 41 of the CGST Rules, where there is specific provision for transfer of liabilities. As per sub-section (1) of section 85 of the CGST Act, the transferor and the transferee / successor shall jointly and severally be liable to pay any tax, interest or any penalty due from the transferor in cases Circular No. 96/15/2019-GST of transfer of business “in whole or in part, by sale, gift, lease, leave and license, hire or in any other manner whatsoever”. Furthermore, sub-section (1) of section 93 of the CGST Act provides that where a person, liable to pay tax, interest or penalty under the CGST Act, dies, then the person who continues business after his death, shall be liable to pay tax, interest or penalty due from such person under this Act. It is therefore clarified that the transferee / successor shall be liable to pay any tax,

interest or any penalty due from the transferor in cases of transfer of business due to death of sole proprietor.d. Manner of transfer of credit: As per sub-rule (1) of rule 41 of the CGST Rules, a registered person shall file FORM GST ITC-02 electronically on the common portal with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason. In case of transfer of business on account of death of sole proprietor, the transferee / successor shall file FORM GST ITC-02 in respect of the registration which is required to be cancelled on account of death of the sole proprietor. FORM GST ITC-02 is required to be filed by the transferee/successor before filing the application for cancellation of such registration. Upon acceptance by the transferee / successor, the un-utilized input tax credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger.4. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 5 Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board.(Upender Gupta) Principal Commissioner (GST)

March 2019

Clarification in respect of transfer of input tax credit in case of death of sole proprietor

While taking the affidavit on record, a division bench comprising Justice Bharati Sapru and Justice Piyush Agrawal directed to list this matter after two weeks for the next hearing. Earlier on February 28, the court while taking a serious note of the absence of a concrete proposal before the state government and GST Council for setting up of GST Appellate Tribunal in the state, had directed the Centre as well as the state government to file better affidavits, providing a cut-off date by which they propose to set up the said tribunal. In the same order, the court had permitted the state government counsel to send a revised proposal in the meantime. In the same order of February 28, regarding the first affidavit filed by the state government stating that a recommendation had been made by it to set up a bench of the tribunal at Lucknow, the court had said that it was also not in accordance with the order passed by the Supreme Court in the case of Madras Bar Association Vs. Union of India and another reported in (2014) 10 SCC 1, which provides that the tribunal will be set up at the place where the principal bench of the High Court is situated. In the present case, the principal bench of the high court is in Allahabad. Thus, this seems to be another

dilatory tactics, the court had observed in its order dated February 28. The court was hearing a writ p e t i t i o n f i l e d b y M / s T o r q u e Pharmaceuticals Private Limited. During the earlier hearing, the court had on February 13 directed the Centre as well as the UP government to tell as to what steps have been taken to set up Goods and Services Tax Appellate Tribunal in the state. According to Section 109 of GST Act, the C e n t r a l g o v e r n m e n t o n t h e recommendation of the state government will constitute an appellate tribunal, known as GST Appellate Tribunal, for hearing appeals against the orders passed by the appellate authority or revisional authority. Counsel for the petitioner had contended that despite clear-cut provision for setting up of appellate tribunal, no GST Tribunal had been set up in the state so far. As a result, the assessees of GST are facing problems in the state. The GST came into effect on July 1, 2017, through the implementation of 101st amendment of the Constitution. The tax replaced existing multiple flowing taxes l e v i e d b y t h e C e n t r a l a n d s t a t e governments.Source: The Times of India

India has decided to post Customs intelligence officers in China in its effort to check black money, trade-based money laundering and other financial frauds, officials said Sunday. Two posts of the Customs Overseas Intelligence Network (COIN) have been created in the Indian Embassy in Beijing and in the Consulate General of India at Guangzhou, they said. The Finance Ministry has begun the process to select officers for the postings. The move has been initiated by the Directorate of Revenue Intelligence (DRI), the lead agency to check Customs frauds and smuggling, to curtail incidents of trade-based money laundering and other financial frauds originating from China, the officials said. COIN officers are usually mandated to pass on intelligence or information gathered from their respective positing stations overseas to help Indian intelligence agencies mainly DRI check trade-related frauds, they said. "COIN officers play an important role in checking trade-based money laundering, black money and tax evasion by sharing intelligence with Indian agencies. Since a significant import and export is done between India and China, it was considered imperative to expand the snoop network to China," an official said, wishing anonymity. In the past, Customs authorities in India have detected a few cases of smuggling to and from China, he said. COIN officers have

been posted in several countries, including Nepal, Singapore, Brussels, the US and the UK, to help Indian authorities check smuggling, the officials said. The selection process involves concurrence by the Ministry of External Affairs and final approval by the Prime Minister Narendra Modi-headed Appointments Committee of theCabinet, they said. Giving details of the process, the officials said an evaluation committee comprising directors general of DRI, Directorate General of Goods and Services Tax Intelligence, National Academy of Customs, Excise and Narcotics and the Directorate General of Human Resource Development will evaluate the service records of concerned officers for posting. A high-level committee comprising the chairperson, two members of the Central Board of Indirect Taxes and Customs (CBIC) and the director general of DRI will interview theofficers, they said. The CBIC will then recommend a panel of three officers for each post to Finance Minister Arun Jaitley. After obtaining the finance minister's approval, the panel will be forwarded to the Ministry of External Affairs for its concurrence followed by reference to the Appointments Committee of the Cabinet for final approval, the officials said.PTI

GST tribunal proposed at Allahabad,regional benches in 19 districts: Govt

India to post Customs intelligence officersin China to check financial frauds

The CBI has arrested two senior Indian Forest Service (IFS) officers for allegedly bribing an environment ministry official, officials said Sunday. Tarun Johri and D Gogoi, both chief conservators of forests, posted in Arunachal Pradesh and Port Blair respectively, were arrested in a case of Rs 20,000 to the environment ministry official for getting a departmental work done. It is alleged that some departmental service matter of Gogoi was pending in the ministry for which he sought

help of his batchmate Johri, who was on a visit to Delhi, they said. Johri paid Rs 10,000 to the official on behalf of Gogoi to a ministry official who complained to his superior about the bribe, they said. A case was registered and during the verification process by the CBI, Gogoi paid another Rs 10,000 to the official, they said. After successful verification, Johri was arrested Saturday, while Gogoi was nabbed Sunday, they said.PTI

CBI arrests two senior IFS officersfor bribing ministry official Notification No. 15/2019 – Central Tax

G.S.R… (E). - In pursuance of section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and sub-rule (3) of rule 45 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), and in supercession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 78/2018- Central Tax, dated the 31st December 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-

section (i) vide number G.S.R.1255(E), dated the 31st December 2018, except as respects things done or omitted to be done before such supercession, the Commissioner, hereby extends the time limit for furnishing the declaration in FORM GST ITC-04 of the said rules, in respect of goods dispatched to a job worker or received from a job worker, during the period from July, 2017 to March, 2019 till the 30th day of June, 2019.[F. No. 20/06/12/2018-GST](Gaurav Singh)Deputy Secretary to the Government of India

Notification to extend the due date for furnishingof FORM GST ITC-04 for theperiod July 2017 toMarch 2019 till 30th June 2019 issued

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

Circular No. 95/14/2019-GSTF. No. CBEC-20/16/04/2018 – GST Recently, a large number of registrations have been cancelled by the proper officer under the provisions of sub-section (2) of section 29 of the Central Goods and Services Act, 2017 (hereinafter referred to as „CGST Act�) read with rule 21 of the Central Goods and Services Rules, 2017 (hereinafter referred to as „CGST Rules�) on account of noncompliance of the said statutory provisions. In this regard, instances have come to notice that such persons, who continue to carry on business and therefore are required to have registration under GST, are not applying for revocation of cancellation of registration as specified in section 30 of the CGST Act read with rule 23 of the CGST Rules. Instead, such persons are applying for fresh registration. Such new applications might have been made as such person may not have furnished requisite returns and not paid tax for the tax periods covered under the old/cancelled registration. Further, such persons would be required to pay all liabilities due from them for the relevant period in case they apply for revocation of cancellation of registration. Hence, to avoid payment of the tax liabilities, such persons may be using the route of applying for fresh registration. It is pertinent to mention that as per the provisions contained in proviso to sub-section (2) of section 25 of the CGST

Act, a person may take separate registration on same PAN in the same State. Circular No. 95/14/2019-GST Page 2. In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby issues the following instructions. 3. Sub-section (10) of section 25 of the CGST Act read with rule 9 of the CGST Rules provide for rejection of application for registration if the information or documents submitted by the applicant are found to be deficient. It is possible that the applicant may suppress some material in fo rmat ion in re la t ion to ea r l i e r registration. Some of the information that may be concealed in the application for registration in FORM GST REG -01 are S. No. 7 „Date of Commencement of Business�, S. No. 8 „Date on which liability to register arises�, S. No. 14 „Reason to obtain registration� etc. Such persons may also not furnish the details of earlier registrations, if any, obtained under GST on the same PAN. 4. It is hereby instructed that the proper officer may exercise due caution while processing the application for registration submitted by the taxpayers, where the tax payer is seeking another registration within the State although he has an existing registration within the said State

or his earlier registration has been cancelled. It is clarified that not applying for revocation of cancellation of registration along with the continuance of the conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of the CGST Act shall be deemed to be a “deficiency” within the meaning of sub-rule (2) of rule 9 of the CGST Rules. The proper officer may compare the i n f o r m a t i o n p e r t a i n i n g t o e a r l i e r registrations with the information contained in the present application, the grounds on which the earlier registration(s) were cancelled and the current status of the statutory violations for which the earlier registration(s) were cancelled. The data may be verified on common portal by fetching the details of registration taken on the PAN mentioned in the new application vis-a-vis cancellation of registration obtained on same PAN. The information regarding the status of other registrations granted on the same PAN is displayed on the common portal to both the applicant and the proper officer. Further, if required, information submitted by applicant in S. No. 21 of FORM GST REG-01 regarding details of proprietor, all partner/Karta/Managing D i r e c t o r s a n d w h o l e t i m e Director/Members of Managing Committee of Associations/Board of Trustees etc. may be analysed vis-à-vis any cancelled registration having same details. 5 . W h i l e c o n s i d e r i n g t h e

application for registration, the proper officer shall ascertain if the earlier registration was cancelled on account of violation of the provisions of clauses (b) Circular No. 95/14/2019-GST and (c) of sub-section (2) of section 29 of the CGST Act and whether the applicant has applied fo r r evoca t ion o f cance l l a t ion o f registration. If proper officer finds that application for revocation of cancellation of registration has not been filed and the conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of the CGST Act are still continuing, then, the same may be considered as a ground for rejection of application for registration in terms of sub-rule (2) read with sub-rule (4) of rule 9 of CGST Rules. Therefore, it is advised that where the applicant fails to furnish sufficient convincing justification or the proper officer is not satisfied with the clarification, information or documents furnished, then, his application for fresh registration may be considered for rejection. 6. It is requested that suitable trade notices may be issued to publicise the contents of these instructions. 7. Difficulty, if any, in the implementation of these instructions may be brought to the notice of the Board. (Upender Gupta) Principal Commissioner (GST)

March 2019

Verification of applications for grant of new registration

Notification No. 13/2019 – Central Tax G.S.R...(E).- In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), t h e C o m m i s s i o n e r , o n t h e recommendations of the Council, hereby specifies that the return in FORM GSTR-3B of the said rules for each of the months from April, 2019 to June, 2019, shall be furnished electronically through the common portal, on or before the twentieth day of the month succeeding such month. 2. Payment of taxes for discharge

of tax liability as per FORM GSTR-3B.– Every registered person furnishing the return in FORM GSTR-3B of the said rules shall, subject to the provisions of section 49 of the said Act, discharge his liability towards tax, interest, penalty, fees or any other amount payable under the said Act by debiting the electronic cash ledger or electronic credit ledger, as the case may be, not later than the last date, as specified in the first paragraph, on which he is required to furnish the said return. [F. No. 20/06/16/2018-GST](Dr. Sreeparvathy S.L.)Under Secretary to the Government of India

Notification No. 9/2019-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. 52/2003-Customs, dated the 31st March, 2003, published in the Gazette of India, Extraordinary, vide number G.S.R. 274 (E), dated the 31st March, 2003, namely:- In the said notification, in the opening paragraph, in the proviso, for the

figures, letters and words “1st day of April, 2019”, the figures, letters and words “1st day of April, 2020” shall be substituted.[F.No . DGEP/SEZ/09 /2017(P t -2 ) ] (ANAND KUMAR JHA) Under Secretary to the Government of IndiaNote:-The principal notification No. 52/2003-Customs, dated the 31st March, 2003 was published in the Gazette of India, Extraordinary, vide number G.S.R. 274 (E), dated the 31st March, 2003 and was last amended by notification No. 79/2018-Customs, dated the 5th December, 2018, published vide number G.S.R 1176(E), dated the 6th December, 2018.

Seeks to prescribe the due dates forfurnishing of FORM GSTR-3B for themonths of April, May and June, 2019

Amendment to Notification No.52/2003-Customs dated 31.03.2003 for extendingexemption from IGST and compensationcess to EOUs on imports till 31.03.2020

The state government on Friday filed an affidavit before Allahabad High Court, stating that a revised proposal has been sent to the Central government for setting up of GST Appellate Tribunal at Allahabad and its regional benches in 19 other districts of the state. While taking the affidavit on record, a division bench comprising Justice Bharati Sapru and Justice Piyush Agrawal directed to list this matter after two weeks for the next hearing. Earlier on February 28, the court while taking a serious note of the absence of a concrete proposal before the state government and GST Council for setting up of GST Appellate Tribunal in the state, had directed the Centre as well as the state government to file better affidavits, providing a cut-off date by which they propose to set up the said tribunal. In the same order, the court had permitted the state government counsel to send a revised proposal in the meantime. In the same order of February 28, regarding the first affidavit filed by the

s t a t e gove rnmen t s t a t i ng tha t a recommendation had been made by it to set up a bench of the tribunal at Lucknow, the court had said that it was also not in accordance with the order passed by the Supreme Court in the case of Madras Bar Association Vs. Union of India and another reported in (2014) 10 SCC 1, which provides that the tribunal will be set up at the place where the principal bench of the High Court is situated. In the present case, the principal bench of the high court is in Allahabad. Thus, this seems to be another dilatory tactics, the court had observed in its order dated February 28. The court was hearing a writ p e t i t i o n f i l e d b y M / s To r q u e Pharmaceuticals Private Limited. During the earlier hearing, the court had on February 13 directed the Centre as well as the UP government to tell as to what steps have been taken to set up Goods and Services Tax Appellate Tribunal in the state. According to Section 109 of GST Act, the Central government on the

Notification No. 12/2019 – Central Tax G.S.R......(E). - In exercise of the powers conferred by the second proviso to sub-section (1) of section 37 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Commissioner, on the recommendations of the Council, hereby extends the time limit for furnishing the details of outward supplies in FORM GSTR-1 under the Central Goods and Services Tax Rules, 2017, by such class of registered persons having aggregate turnover of more than 1.5 crore rupees in the

preceding financial year or the current financial year, for each of the months from April, 2019 to June, 2019 till the eleventh day of the month succeeding such month. 2. The time limit for furnishing the details or return, as the case may be, under sub-section (2) of section 38 and sub-section (1) of section 39 of the said Act, for the months of July, 2017 to June, 2019 shall be subsequently notified in the Official Gazette.[F. No. 20/06/16/2018-GST](Dr. Sreeparvathy S.L.) Under Secretary to the Government of India

Seeks to prescribe the due dates for furnishing ofFORM GSTR-1 for those taxpayers with aggregateturnover of more than Rs. 1.5 crores for the monthsof April, May and June, 2019

GST tribunal proposed at Allahabad, regional benches in 19 districts: Govt

recommendation of the state government will constitute an appellate tribunal, known as GST Appellate Tribunal, for hearing appeals against the orders passed by the appellate authority or revisional authority. Counsel for the petitioner had contended that despite clear-cut provision for setting up of appellate tribunal, no GST Tribunal had been set up in the state

so far. As a result, the assessees of GST are facing problems in the state. The GST came into effect on July 1, 2017, through the implementation of 101st amendment of the Constitution. The tax replaced existing multiple flowing taxes levied by the Central and state governments.Source: The Times of India

For e-paper, visit : www.thertt.com5 March 2019

Notification No. 06/2019-Central Tax (Rate)G.S.R......(E).- In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), , the Central Government, on the recommendations of the Council, hereby notifies the following classes of registered persons, namely:-(i) a promoter who receives development rights or Floor Space Index (FSI) (including additional FSI) on or after 1 st April, 2019 for construction of a project against consideration payable or paid by him, wholly or partly, in the form of construction service of commercial or residential apartments in the project or in any other form including in cash;(ii) a promoter, who receives long term lease of land on or after 1 st April, 2019 for construction of residential apartments in a project against consideration payable or paid by him, in the form of upfront amount

(called as premium, salami, cost, price, development charges or by any other name), as the registered persons in whose case the liability to pay central tax on, -(a) the consideration paid by him in the form of construction service of commercial or residential apartments in the project, for supply of development rights or FSI (including additional FSI);(b) the monetary consideration paid by him, for supply of development rights or FSI (including additional FSI) relatable to construction of residential apartments in project;(c) the upfront amount (called as premium, salami, cost, price, development charges or by any other name) paid by him for long term lease of land relatable to construction of residential apartments in the project; and (d) the supply of construction service by him against consideration in the form of development rights or FSI(including additional FSI), - shall arise on the date of

issuance of completion certificate for the project, where required, by the competent authority or on its first occupation, whichever is earlier. 2. Explanation:- For the purpose of this notification,-(i) The term “apartment” shall have the same meaning as assigned to it in clause (e) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);(ii) the term “promoter” shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);(iii) the term “project” shall mean a Real Estate Project (REP) or a Residential Real Estate Project (RREP);(iv) the term “Real Estate Project (REP)” shall have the same meaning as assigned to it in in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);.(v) the term “Residential Real Estate Project

(RREP)” shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP.(vi) the term “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to the size of the piece of land upon which it is built.(vii) Tax on services covered by sub-para (i) and (ii) of paragraph 1 above is required to be paid under reverse charge basis in accordance with notification No. 13/2017- Central Tax (Rate), dated 28.06.2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection ( i ) , v ide GSR No. 692 (E) , da ted 28.06.2017, as amended.3. This notification shall come into force with effect from the 1st day of April, 2019.[F. No.354/32/2019-TRU](Pramod Kumar) Deputy Secretary to the Government of India

Notification No. 11/2019-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) and sub-section (12) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), 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, Ministry of Finance (Department of Revenue), No. 50/2017-Customs, dated the 30th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide, number G.S.R. 785(E), dated the 30th June, 2017, namely:-

In the said notification, in the third proviso for the words and figures “1st day of April, 2019”, the words and figures “2nd day of May, 2019” shall be substituted. [F. No. 341/15/2018- TRU](Gaurav Singh) Deputy Secretary to the Government of IndiaN o t e : T h e p r i n c i p a l n o t i f i c a t i o n No.50/2017-Customs, dated the 30th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide, number G.S.R. 785(E), dated the 30th June, 2017 and last amended, vide, notification No. 06/2019 -Customs, dated the 26th February,2019 published, vide, number G.S.R. 155(E)., dated the 26th February, 2019

A Dogra outfit on Monday claimed that the government has not accepted the resignation of Shah Faesal from Indian Administrative Service though he has floated a political party after announcing his decision to quit in January, and demanded a high-level probe into the "delay". "Even after more than three-and-a-half months, Shah Faesal's resignation has not yet been accepted by the government," the outfit Team Jammu's Chairman Zorawar Singh Jamwal told reporters here. Singh said that Faesal tendered his resignation from civil services on January 9 this year and had launched his party -- Jammu Kashmir People's Movement. "But his resignation has not yet been accepted for the reasons best known to

the administration whereas resignation of another IAS officer Farooq Shah was accepted within a week's time and order issued in this regard," he said. Alleging that some government employees were promoting Faesal and actively participating in political activities, Jamwal demanded a probe into why his resignation has not been accepted yet. When contacted, officials refused to comment on the issue. Faesal came into limelight after becoming the first Kashmiri to top the UPSC civil services exam in 2009.

PTI

Amend notification No. 50/2017-customs dated 30th June 2017 topostpone the implementation of increased customs duty on specifiedimports originating in USA from 1st April, 2019 to 2nd May, 2019

Outfit claims Faesal’s resignation not acceptedby govt, demands inquiry

Seeks to notify certain class of persons by exercising powers conferredunder section 148 of CGST Act, 2017

Notification No. 1/2019-Service TaxG.S.R. (E) . - Whereas , the Central Government is satisfied that in the period commencing on and from the 1st day of July, 2012 and ending with the 29th day of February, 2016 (hereinafter referred to as the said period), according to a practice that was generally prevalent, there was non-levy of service tax, on the services provided by training providers (project implementation agencies) under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by the National Council for Vocational Training, and this service was liable to service tax, in the said period, which was not being paid according to the said practice. Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the Finance Act, 1994 (32

of 1994), and clause (e) of sub-section (2) of section 174 of the Central Goods and Services Tax Act, 2017 (12 of 2017), in respect of things done or omitted to be done before the coming into force of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby directs that the service tax payable under section 66B of the Finance Act, 1994 (32 of 1994), on the services provided by training providers (project implementat ion agencies) under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by the National Council for Vocational Training, in the said period, but for the said practice, shall not be required to be paid. ( Dr. Sreeparvathy S.L )Under Secretary to the Government of India [F.No. 137/14/2018-Service Tax]

Exempting services provided by project implementation agenciesunder the DDUGKY for the period commencing from the1st of July,2012 and ending with the 29th of February, 2016

Notification No. 9/2019-Central Tax (Rate)G.S.R......(E).- In exercise of the powers conferred by sub-section (1) of section 9, subsection (1) of section 11, sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (herein after referred to as the “said Act”), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the fol lowing amendments in the notif icat ion of the Government of India, in the Ministry of Finance (Department of Revenue) No.02/2019- Central Tax (Rate), dated the 7 thMarch, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 189(E), dated the 7th March, 2019, namely:- In the said notification, - (i) in the Table, in column 3, after clause 7, the following clause shall be inserted, namely: - “8. Where any registered person who has availed of input tax credit opts to pay tax under this notification, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs

contained in semi-finished or finished goods held in stock and on capital goods as if the supply made under this notification attracts the provisions of section 18(4) of the said Act and the rules made there-under and after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.”;(ii) in paragraph 3, in the Explanation, after clause (ii), the following clause shall be inserted, namely: - “(iii) the Central Goods and Services Tax Rules, 2017, as applicable to a person paying tax under section 10 of the said Act shall, mutatis mutandis, apply to a person paying tax under this notification.”.2. This notification shall come into force on the 1st day of April, 2019. [F.No.354/25/2019-TRU] (Pramod Kumar) Deputy Secretary to the Government of IndiaNote: -The principal notification No. 02/2019 - Central Tax (Rate), dated the 7th March, 2019 was published in the Gazette of India, Extraordinary, vide number G.S.R. 189 (E), dated the 7th March, 2019.

Seeks to amend notification No. 02/2019- Central Tax (Rate) so asto provide for application of Composition rules to persons optingto pay tax under notification no. 2/2019- Central Tax (Rate)

Press ReleaseTheSpecial Judge for CBI Cases, Madurai ( Ta m i l N a d u ) h a s s e n t e n c e d S h . G.Varadharajan the then Sub Post Master and Sh. S.Murugesan, the then Postal Assistant both working in Vedasandur Post Office, Dindigul to undergo 10 years Rigorous Imprisonment with a fine of Rs.3,50,000/- each and Sh. S.Karthika

(Private Person) to undergo 10 years Rigorous Imprisonment with a fine of Rs.3,40,000/-. CBI had registered the case on allegations that the accused persons entered into a criminal conspiracy during the period 2007-2008 at Dindigul, Vedasandur and o t h e r p l a c e s i n Ta m i l N a d u , t o misappropriate saving scheme funds of the

postal Department. In pursuance of this criminal conspiracy, the accused misused the password for the software "Sanjay Post", inflated the amount of monthly deposits and made several withdrawals of such inflated deposits amounting to approx. Rs. 1.27 crore, through the Postal SB Accounts maintained by the accused persons. A f t e r c o m p l e t i o n o f t h e

investigation, a charge sheet was filed on 30.06.2010 U/s. 120-B r/w 420, 467, 468 r/w 471 of IPC and Sec. 13(2) r/w 13(1)(c) of PC Act, 1988 & U/s. 66 of Information Technology Act, 2000.The Trial Court found the accused guilty and convicted them.

Ten years rigorous imprisonment to two postal officials anda private person for causing loss to Govt. Exchequor

For e-paper, visit : www.thertt.com6 March 2019

liability. The second part of the argument (that limited liability provides managers with incentives to act efficiently and in the interests of shareholders) is derived from the fact that if a company is being managed inefficiently, shareholders can be expected to be selling their shares at a discount to the price which would exist if the company were being managed efficiently. This creates the possibility of a takeover of the company and the rep lacement o f the incumbent management. Thirdly, limited liability assists the efficient operation of the securities markets because the prices at which shares trade does not depend upon an evaluation of the wealth of individual shareholders. The paper of which above is the first part draws upon legal expertise of a number of authorities all of whom cannot be individually acknowledged. To repeat Aristotle: “ART IS IMITATION” Fourthly, limited liability permits efficient diversification by shareholders, which in turn allows shareholders to reduce their individual risk. If a principle of unlimited l iabil i ty applied and the shareholder could lose his or her entire wealth by reason of the failure of one company, shareholders would have an incentive to minimise the number of shares held in different companies and insist on a higher return from their investment because of the higher risk they face. Consequently, l i m i t e d l i a b i l i t y n o t o n l y a l l o w s diversification but permits companies to raise capital at lower costs because of the reduced risk faced by shareholders. Fifthly, limited liability facilitates optimal investment decisions by managers. As we have seen, limited liability provides incentives for shareholders to hold d ivers i f ied por t fo l ios . Under such circumstances, managers should invest in projects with positive net present values, and can do so without exposing each shareholder to the loss of his or her personal wealth. However, if a principle of unlimited liability applies, managers may reject some investments with positive present values on the basis that the risk to shareholders is thereby reduced. “By definition this would be a social loss, because projects with a positive net present value are beneficial uses of capital”.31. Ambit 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 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 linked 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 court, so that legal advisers of 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. 1.1 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 past rulings, but also an anticipation of what is likely to enter the field of law by future judicial pronouncements.2. Legal fictions Incidentally, i t may also be mentioned that juristically the subject has another interesting aspect also. The creation of an artificial legal person by a provision of the nature usually found in company legislation is essentially the introduction of a legal fiction. 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 this. The court, performing its role of statutory construction, limits the statutory fiction to certain circumstances and excludes other circumstances from its scope. In other words, the court construes in a limited manner the statutory language creating the fiction of incorporation.3. Statutory construction This is not a process peculiar to the sphere of company law. Students of statutory interpretation are aware of the problem of how much amplitude should be attributed to a particular statutory fiction. Two general principles, apparently in conflict with each other, seem to be operative. These are as under: 3.1 In interpreting a statutory 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, must inevitably flowed from or 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 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. 3.2 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. This comment of Lord Justice James in Ex parte Walton [1881]17Ch.D746 has been cited in Indian cases also e.g., State of Travancore- Cochin v. Shanmugham Vilas Cashewnut Factory AIR 1953 SC 333. It is by virtue of this counter principle, it seems that courts exercise jurisdiction to lift the corporate veil.4. Lifting the corporate veil - Variety of circumstances Theoretically, the circumstances in which the veil may be lifted cannot be defined. Nor can one say that the veil will be lifted only on this or that principle, excepting that there is the paramount consideration of public interest. The manner in which the veil has been lifted also cannot be limited. For example, by lifting the veil, courts have held another company as the real occupier of certain premises which apparently stand in the name of its subsidiary - Smith Stone & Knight v. Bermingham Corpn. [1939] 4 All ER 116 (KB). Again, where an individual controlled a number of companies as if they were his personal property, the court treated those companies as his creatures for which he was responsible - Wallersteiner v. Moir (No. 1) [1974] 3 All ER 217 (CA). Further, if a company is controlled by enemy subjects, then, even though it may be incorporated in Great Britain, it may be held to be an 'enemy' within the meaning of legislation relating to trading with the enemy - Daimler Co. Ltd. v. Continental Tyre & Rubber Co. (Great Britain) Ltd. [1916] 2 AC 307 (HL); Clark v. Uebersee Finance Corpn. AG [1947] 332 US 480. Similarly, directors acting as the agents of the company have been held to be liable on a contract when they intentionally rendered fulfilment of the contract impossible - Torquay Hotel Co. v. Cousins [1969] 2 Ch. 106. Further, an opinion has been expressed that though a company does not become an agent of a shareholder merely by virtue of the shareholders controlling all or most of the capital, yet, if there is functional control by the shareholder, it may become a question of fact whether the shareholder really controls the company which is its de facto agent. According to Sir Otto Kahn-Freund in [1940] 3 Modern Law Review 226, 227, the company can be regarded as the agent of the shareholder, if the shareholder —treats, as his own, the profits of the company;appoints the persons conducting the business;is the 'head and brain' of the trading venture;decides what capital should be embarked on the venture;makes the profits by his skill and direction ; andis in effectual and constant control.Continued…

facts.”Lord Sumner in Gas Lighting Improvement Co Ltd v Inland Revenue Commissioners (1923) AC 723 The separate legal entity principle has continued unexpurgated corporate law for more than one hundred years. When a company acts it does so in its own right and not just as an alias for its controllers. Similarly, shareholders are not liable for the company’s debts beyond their initial capital investment, and have no proprietary interest in the property of the company. At the same time, courts have acknowledged that the corporate veil of a company may be p i e rced to deny shareholders the protection that limited liability normally provides. “Piercing the corporate veil” refers to the judicially imposed exception to the separate legal entity principle, whereby courts disregard the separateness of the corporation and hold a shareholder responsible for the actions of the corporation as if it were the actions of the shareholder. A court may also pierce the corporate veil where requested to do so by the company itself or shareholders in the company, in order to afford a remedy that would otherwise be denied, create an enforceable right, or lessen a penalty. The object of incorporation as a distinct legal entity is to promote the widest possible public participation in joint undertakings, with liability limited to the investment in the undertaking. But, like all good things, the c o r p o r a t e p e r s o n a l i t y h a s a l s o , unfortunately, lent itself to abuse in some cases, e.g., outwitting the Revenue or defrauding creditors. There may also be unintended hardship where a fetish is made of the legal form and an undertaking is denied the relief that is reasonably due to it. Courts have not hesitated to look at the reality beyond the apparent, wherever substantial justice has required it. While the Courts have been increasingly liberal, the treatment of the concept of incorporation by the Legislature has also been getting too casual for comfort, in recent years. When courts pierce the corporate veil, they can remove the protection of limited liability otherwise granted to shareholders. It is therefore relevant to review the reasons why companies are granted limited liability. Three reasons , based upon principles of economic efficiency, can be provided for why companies are granted limited liability. First, limited liability decreases the need for shareholders to monitor the managers of companies in which they inves t because the f i nanc ia l consequences of company failure are limited. Shareholders may have neither the incentive (particularly if they have only a small shareholding) nor the expertise to monitor the actions of managers. The potential costs of operating companies are reduced because limited liability makes shareholder diversification and passivity a more rational strategy. Secondly, limited liability provides incentives for managers to act efficiently and in the interests of shareholders by promoting the free transfer of shares. This argument has two parts to it. First, the free transfer of shares is promoted by limited liability because under this principle the wealth of other shareholders is irrelevant. If a principle of unlimited liability applied, the value of shares would be determined partly by the wealth of shareholders. In other words, the price at which an individual shareholder might purchase a share would be determined in part by the wealth of that shareholder which was now at risk because of unlimited

CORPORATE VEIL & GOVERNANCEContinued from page 01

Maruti Zen car from other accused (private person/companies during 1998-99). He did not join the investigation and was absconding. The accused was then removed from the service by the Competent Authority. The trial of the case is in progress against other accused.

A charge sheet was filed on March 27, 2002 in the Court of Special Judge for CBI cases, Mumbai against the then appraiser and other accused under sections 420, 467, 468 an 471 of Indian Penal Code (IPC) r/w 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988 and substantive

offenses thereof. The appraiser was declared a proclaimed offender by the court.Source: India Today

appraiser and other accused caused wrongful loss to the customs department, to the tune of Rs 4,00,72,496 - by way of loss of customs duty on goods imported. It was also alleged that the accused appraiser had received Rs 5 lakh and a

Continued from page 01

CBI arrests fugitive Customs Officer (Appraiser) after 20 years of fraud

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Continued from page 01indications are that there will be a Coalition Government. Thus , indications are that not only will the ruling Prime Minister need support of various others, but may also have to act in tandem with their advice. Compare this with samvatsar 2071 which was known as ‘Palvang’ and in which the presiding planets of the cabinet for the Gregorian Calender 2014-15, were Moon as the King (Raja) and Moon as the Council (Mantri). Since Moon is considered to be a Royal Planet in the Vedic planetary Cabinet, even though assigned the role of a queen, it brought a thumping

majority in may years to the ruler and the ruling council acted with support and rapport . The year 2014-15 itself was a year of great possibilities and some positive experimentation. If we still go back to the samvatsar 2065, which was ruling in the Gregorian Year 2009-10, the samvatsar was known as ‘Pallava’ which is generally known to be troublesome for both, the ruling class as well as public. Therefore there were scandals and even arrests of Ministers. The year Pallava had Moon as its King (Raja) and Sun as the Minister (Mantri). Now this is a unique role reversal, whereas the queen rules and the King advices. At the relevant time though Congress secured better

From the above analysis one can make out that opening samvatsar in the Election year provides a broad indication as to what is going to transpire in India, as far as the Political scenario is concerned. However, the period between two Elections is five years and each samvatsar presents its own possibilities depending upon the ruling Cabinet of each year. If the analysis as above is indicative , this year the will and selection of the masses is bound to surprise the ruling elite. So causes Bramha to say.

numbers, it had in place the ruler “Dr. Man Mohan Singh” who was dominated by the refactor King Mrs. Sonia Gandhi” as Advisor wielding effective power. If we go still back to samvatsar 2060 which was ruling in the Election Year 2004-05, Sun was the ruling planet as the King with Mars as the Minister (Mantri). The year saw a new ruler been put in place whereby Mars provided a conflicting Council or a conflict of views within the Ministry. This was the year when UPA came into power and the ruling Prime Minister Dr. Manmohan Singh” had to balance advice not only of Sonia Gandhi but also of CPM and other Political Groups.

Continued from Page 01 this market. Against this background, when GST talks reached the final stage, the centre brought Kerala around by offering it a unique taxation policy of differentiation in GST rates. For lotteries operated by agents authorised by the state, the tax rate would be 28 percent, but for state-run lotteries, it would be 12 percent. Due to this tariff wall, agents did not find it profitable to operate in Kerala. Thus, Kerala succeeded in keeping the lottery business exclusively for its own people. Kerala’s GST revenue from lottery is quite substantial despite the GST rate being only 12 percent as against 28 percent for other states which run lotteries through agents. In 2014-15, Kerala’s lottery turnover was Rs 5,441.84 crore. This went up to Rs 9,021.36 crore in 2017-18. In 2019-20, the lottery turnover is expected to rise to Rs 11,863 crore. The GST revenue from lottery was Rs 841 crore in 2017-18. It went up to Rs 725 crore for the nine months from April to December in 2018-19. As for the present controversy of re-fixing the GST rate structure, some states such as Assam, Maharashtra and Goa demanded a single GST rate for state-run lotteries and state authorised private ones. Private lottery groups too started lobbying for a single rate. This would,

naturally, affect Kerala as it would facilitate the entry of lottery agents from outside, and break the monopoly of state-run lotteries. Further, if there was a higher GST rate of 18 percent or 28 percent, the tax burden on lottery tickets would increase, angering the common man and leading to a political fallout. In the meetings of the GoM, no consensus could be achieved from the beginning as three members, led by Kerala Finance Minister TM Thomas Isaac, opposed the change in the current GST rate structure. While discussing the increase in GST revenue from lottery, he had said during the state budget presentation: “We have been able to attain this in lottery sale by strictly defending undesirable trends and preventing the entry of other states’ lotteries. The state government has taken a stand to impose GST at a higher rate on lotteries being conducted by middlemen.” Despite the fact that the finance ministers of Kerala and Punjab could not attend the last GoM meeting before the scheduled Council meeting, the GoM had recommended rate parity. However, before the Council meeting, Isaac posted this on his social media page: “Kerala will fight tooth and nail against any move to change the current lottery system. We are sure that other opposition states will be with us. A

fair share of BJP-ruled states, which do not have lottery, will not have any interest on the recommendation. Hence, we can resist this in the next meeting.” He further stated that he was expecting at least 11 states to support Kerala’s stand, and hoped there would be consensus. The alternative, he said, should be for the Council to hold voting on the issue. Arun Jaitley, Union finance minister and chairman of the GST Council, who has got all Council decisions passed through consensus till now, was wary of voting. Therefore, when no consensus could be achieved in the last Council meeting, he referred the matter back again to the GoM for further deliberations and to come back to the next Council meeting on March 15. He thus ensured that the spirit of cooperative federalism displayed in GST implementation was not sullied by the lottery issue. The change of rate structure on lottery does not seem possible with elections just a couple of months away. That would, indeed, be a sound decision. The author is former Chairman, CBEC and author of the book, “GST Explained for Common Man”Source: India Legal

“affordable houses”, because of the sharp cut, the tax burden will be lower even after considering the input tax cost. Effective implementation will depend on c lea r-cu t gu ide l ines and e ffec t ive enforcement against tax evaders. Because of denial of credit, builders will not be required to keep detailed records; this may reintroduce the prevalence of cash transactions. There is a proposal to make it mandatory for the builder to purchase a minimum of 80 percent of inputs from registered dealers, thus ensuring purchase of tax-paid inputs. This is necessary, but would bring in complications. Then, there is a need for detailed transition rules relating to switching over to the new tax rate regime from April 1, 2019. All these things would need to be finalised before March 15 when the Council meets next. In Kerala, taxing lottery has political overtones. Lottery is very popular among the lower strata who form a major vote bank there. Therefore, no party wants to displease them. Kerala had banned the entry of private operators f rom o the r s t a t e s , bu t when jud i c i a l pronouncements went against such bans, it tackled the issue through a taxation policy that made it unprofitable for private operators to enter

Elections 2019: The season of promises

GST on Lottery: No Jackpot for Anyone

Continued from Page 01 normal rules become applicable from the day of opting out/ becoming ineligible for the scheme. Vice versa, when switching from normal scheme to composition scheme at the beginning of any financial year, the taxpayer shall be liable to pay an amount equal to the credit of input tax in respect of inputs held in stock on the day immediately preceding the date of such switchover at the beginning of the year. The balance of input tax credit after payment of such amount, if any, lying in the credit ledger shall lapse. Opting in cannot be done during the currency of any financial year.We are all aware by now that a composition supplier has to issue Bill of Supply, as he/ she cannot issue a tax invoice. Composition supplier

is not allowed to charge/ recover GST from customers.It is also well known that a Composition Scheme is available only for registered persons making intra-state supplies. If a dealer is involved in making any inter-State supplies, he/ she has to opt out of the scheme.Further, recently a Notification No. 2/2019 C.T. (Rate) dated 7th March 2019 has been issued which is being popularly referred to as new composition scheme for service providers wherein special tax rate of 6% (3% CGST + 3% SGST) has been notified w.e.f. 01-04-2019. However, it deserves to be noted here that though most of the conditions stipulated for availing this

special scheme are similar to composition scheme, this scheme is not a composition scheme as the Notification itself is issued in terms of Section 9(1) and not under Section 10. Thus, the conditions for availing this special rate of tax in respect of specified suppliers having turnover below specified limit (not service providers alone), though need to be complied, the said scheme is not covered under the provisions and rules prescribed for Section 10 and shall operate as laid down in the notification itself or whether entire set of Rules as applicable to Composition d e l a e r s s h a l l a p p l y, a s t h e l a n g u a g e complicates.This also impresses upon the understanding that other notifications/ circulars/ RODO etc. issued in respect of Composition levy

in terms of Section 10 shall not apply to this notification which shall operate under the scope of Section 9(1) in lieu of Section 10, subject to the conditions and e x p l a n a t i o n s l a i d i n t h e Notification itself to be read in harmony with other general provisions of law governing the levy under Section 9.How the scheme effective from 01-04-2019 will be opted for and how option will be filed that too, before 31-03-2019. If not, whether it will automatically become available without any declaration as it is nothing but a concessional rate without ITC and specific conditions. The structure of the Notification indicates that it is a scheme announced in haste, wherein many practical hardships have been inadvertently created. Let us hope resolutions will come in time, before the stakeholders lose their rights or become subject to penalties or hardships due to the lapses which were beyond their

control or interpretation. By: CA. Raginee Goyal, FCA, DISA (ICAI)Email: raginee@gmail.comThe above views are of the author herself and academic views/ opinion of learned members on the subject, even if in the contrary are welcome. The publisher does not own any responsibility towards any views expressed in the article and any member/ reader following the opinions/ views in the article shall do so at his own risk or after proper professional advisory in any matter of business impact/ statutory compliance on issues covered in the article above.

composition scheme. It was further clarified under this order itself that in computing his aggregate turnover in order to determine his eligibility for composition scheme, value of supply of any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account. Whether this relaxation also applies only to the Restaurant/ café suppliers or was it in respect of all types of suppliers willing to opt for composition scheme.Since this RODO has not been rescinded/ superseded after the recent amendments, it so appears that the ambiguity remains open to such extent in present situation also. A clear Removal of Difficulty

Order to remove all hardships in availing the composition levy as intended, is deserving from the Government in interest of the small suppliers who opt for the scheme so that they may not be caught in the nuances of complicated drafting of the law and rules. N e e d l e s s t o m e n t i o n t h a t a Composition Dealer has to pay tax under Reverse C h a rg e M e c h a n i s m wherever applicable.The rate applicable to the supplies when made outward,is the rate at which GST has to be paid on inward supplies under r e v e r s e c h a r g e m e c h a n i s m w h e r e a p p l i c a b l e b y t h e composition supplier, as composition rate does not apply to reverse charge transactions. The composition supplier

however, shall not be able to avail ITC on the tax paid under reverse charge arrangement, as is available to a regular supplier. Rather no ITC on any inputs or input services can be availed by a composition supplier. However, if a business transits from Composition Scheme to Regular scheme, it will be allowed to take credit of inputs lying in stock, or in semi-finished goods or in finished goods held on the day before the day of opting out of composition scheme.When a dealer opts out of composition scheme during any year, all the

calculating were stipulated under Section 10, further prescribed under Rule 7 and were also notified under Notification 8/2017 C.T. dated 27-06-2017. Subsequently, Notification No. 1/2018-C.T. , dated 1-1-2018, amended parent Notification No. 8/2017 C.T. and Notification No. 3/2018 C.T. dated 23-01-2018 amended Rule 7 to the effect that the levy of half per cent for traders would thenceforth be on “the turnover of taxable supplies of goods in the State or Union territory” in lieu of “the turnover in the State or Union territory”. Further, it is worth noting that it was clarified vide RODO No. 01/2017 C.T. dated 13-10-2017 that if a person makes restaurant supplies and

also supplies any exempt services including services by way of extending deposits, loans or advances, in so far as the consideration is represented by way of interest or discount, the said person shall not be ineligible for the composition scheme under section 10 subject to the fulfilment of all other conditions specified therein. Thus, due to the use of the terms “and also”, it leaves ambiguity to the fact that whether other suppliers making exempt supplies of services for which consideration was received as interest or discount, whether such persons were also given the right to be eligible for opting for

Composition Levy - Salient Features And Amendments

TABLE 02TABLE 01

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P.S. ATREE & COMPANY PVT. LTD.PSAC

GOVT. APPROVED CUSTOM CLEARING & FORWARDING AGENTS

Regd. Ofce :- B-46, Kalkaji, New Delhi - 110019Ph.: 26451078, 26443485, 26415192, Fax : 26444351

E-mail : atree@airtelmail.in

ICD Ofce : 207, Cabin No.5, Administrative BuildingICD Tughlakabad, New Delhi - 110 020 Ph. : 26361864

March 2019

Notification No. 13 /2019-Customs (ADD) G.S.R. (E).- Whereas, in the matter of import of ‘Saturated Fatty Alcohols’ (hereinafter referred to as the subject goods), falling under tariff items 2905 17, 2905 19 and 3823 70 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in or exported from Indonesia, Malaysia, Thailand and Saudi Arabia (hereinafter referred to as the subject countries), the designated authority, vide its final findings notification No.14/51/2016- DGAD, dated the 23rd April, 2018, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 23rd April, 2018, had come to the conclusion that the product under consideration exported to India from the subject countries below its associated normal value, thus, resulting in dumping of the product. Some of the imports were also causing material injury to the domestic industry. And Whereas, had recommended imposition of definitive anti-dumping duty on imports of the subject goods originating in, or exported from, the subject countries; And Whereas, on the basis of the aforesaid findings of the designated authority, the Central Government had imposed an anti-dumping duty on the subject goods, vide notification of the Government of India in the Ministry of Finance (Department of Revenue), No.28/2018- Customs (ADD), dated the 25 th May, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i), vide number G.S.R. 498 (E) dated the 25th May, 2018; And Whereas, M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Expor ter / t rader) , S ingapore have requested for review in terms 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, in respect of exports of the subject goods made by them, and the designated authority, vide n e w s h i p p e r r e v i e w n o t i f i c a t i o n No.7/38/2018-DGTR, dated the 15th January 2019, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 15th January 2019, has recommended provisional assessment of all exports of the subject goods made by the above stated party till the completion of the review by it; Now Therefore, 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, after considering the a fo resa id recommenda t ion o f the designated authority, hereby orders that pending the outcome of the said review by the designated authority, the subject goods, when originating in or exported from the subject country by M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Exporter/trader), Singapore and imported into India, shall be subjected to provisional assessment till the review is completed. 2. The provisional assessment may be subject to such security or guarantee as the proper officer of customs deems fit for payment of the deficiency, if any, in case a definitive antidumping duty is imposed re t rospect ive ly, on comple t ion of investigation by the designated authority. 3. In case of recommendation of anti-dumping duty after completion of the said review by the designated authority, the importer shall be liable to pay the amount of such antidumping duty recommended on

"The department was not expected to advise and/or tell the employee about how the seniority will be fixed and/or about the rota-quota rule"The Supreme Court has observed that it is for an employee to know the service rules and an employer is not expected to advise him/her about it. The bench comprising Justice L. Nageswara Rao and Justice MR Shah was considering an appeal by an employee against Madras High court order dismissing his challenge against Central Administrative Tribunal that department to place an in the seniority list above him. Also Read - Vio la t ion Of SC Orde r D i rec t ing Declaration Of Criminal Antecedents Of Candidates: SC Issues Notice To Dy. Election Commissioners, Law Secy. To allow an OA filed by another employee, the Central Administrative Tribunal noted that the employee was not aware of the quota-rota rule maintained by the department and also how the seniority list will be fixed between the LDCE appointee and direct recruitee. It also said that, if he had been told that as per the quota-rota rule, the LDCE candidate would rank senior even though he was appointed as direct recruitee four months earlier, he would have definitely accepted the promotion through LDCE quota. On the ground that the department failed to give proper guidance and advice to one of its

employees, the bench observed that he could not be denied of his legitimate right which will have a bearing on his seniority. Also Read - 'Second FIR Not Barred Merely Because Motive In Both Offences Are The Same'; SC Upholds Life Sentence Of Saravana Bhavan Founder For Murder [Read...In the appeal (P. Subramaniyam vs. Union of India), the Apex Court bench noted that as per the rules, the seniority was required to be fixed as per the quota-rota rule and as per the rule position in that year the direct recruitee was to be placed below the LDCE quota, since the LDCE selection process was treated as the Fast Track promotion. The court also observed that the other employee did not accept his appointment/promotion in LDCE quota though selected and offered and he continued his appointment as a direct recruitee. Holding that the High Court and Tribunal made a gross error in deciding the OA, the bench said: "The learned Tribunal as well as the High Court are not justified in directing to put respondent No. 4 in the seniority list above the appellant who, in fact, was appointed in the LDCE quota and the respondent No. 4 never accepted his promotion in the LDCE quota. It was for the employee to know the rule. The department was not expected to advise and/or tell the employee about how the seniority will be fixed and/or about the rota¬quota rule."

Employee Should Know Service Rules; NotFor Employer To Advise Him About It: SC

review and imposed on all imports of subject goods when originating in or exported from the subject country by M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Exporter/trader), Singapore

and imported into India, from the date of initiation of the said review.F.No.354/169/2018-TRU] (Gunjan Kumar Verma) Under Secretary to the Government of India

Seeks to prescribe provisional assessment for 'Saturated Fatty Alcohols' when originatingin or exported from subject countries by M/s PT. Energi Sejahtera Mas (producer) Indonesia throughM/s Sinarmas Cespa Pte Ltd (exporter/trader) Singapore and imported into India

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For a newly minted partner in one of the Big Four professional services rms, becoming a stay-at-home dad had never crossed his mind. That, until last month.He had joined the company as a partner in 2016, with a 30% pay hike, from a rival rm. With an eight-gure salary, a chauffeur-driven, high-end German car and a penthouse in a tony Bengaluru neighbourhood, it looked like a perfect job. He is now on gardening leave - a six-month cooling-off period that a partner must observe after leaving a job. Another executive from a Big Four rm in Mumbai has found a liking for Marathi plays, as he is also on gardening leave and has lot of free time. "I never knew plays could be so much fun," he said. Suddenly several partners and senior directors at top consultancy rms, including at the Big Four of Deloitte, PricewaterhouseCoopers, EY and KPMG, are discovering different facets of life, and it's not the case of self-actualisation or even burnout.With the dust around goods and services tax settling, and their clients getting the hang of the tax framework and handling the issues internally, these consultancy rms are witnessing slowing down or plateauing of revenue from a practice that has been a major driver of business and employment growth in recent years.At least 20 partners and as many as 50

directors in top rms have either quit or will leave in the coming months, as they areunable to take the pressure on generating revenue, industry insiders said.ET spoke to CEOs, tax heads and senior partners at several rms. While many of them avowed that there was pressure on revenue in the sector, most claimed that it was faced by their rivals and that they were unaffected. A KPMG spokesperson said while the indirect tax revenue in the industry appeared to have plateaued, the practice for the rm was growing strongly. A PwC spokesperson said the company was building data analytics capability around GST to provide integrated solutions and that indirect-tax practice remained an important growth engine for it. EY and Deloitte did not respond to request for comment. Insiders point out that between 2015 and 2018, revenue for large professional services rms from GST-related services grew at 50% annually. This has driven job opportunities, salaries and promotions for professionals in their indirect-tax verticals.But now, the growth is estimated at about 10% on an average. Many partners and senior directors who were lured from competitors, and in some cases other departments, with lucrative salaries and midterm raises are looking at potential job

losses, as the GST framework becomes simpler, reducing the requirement of experts to handle it.At multinationals, partners are given revenue targets and they get to take home around 30% of the revenue they generate. A large number of them have failed to achieve their targets this year, said people in the know. The total revenue from GST-related services is estimated at Rs 1,000 crore for the top 10 rms, including six multinationals - the Big Four, BDO and Grant Thornton. The top six had hired close to 3,500 people, including almost 100 partners, to handle GST services that bring them around Rs 850 crore a year.Utilisation, or the amount of time a professional spends doing billable work, has reduced to 60% or less now from as high as 95% around the time of GST rollout in July 2017, said insiders."It's the case with every market in the world; there are mainly three stages of revenue growth after a new tax framework is introduced. First the phenomenal growth stage, then the plateau and then the gradual decline," said the tax head at one of the Big Four rms."Now what we are left with is the compliance work in GST. The days of 40% and 50% jump in revenue are gone. We had increased the team size due to the sudden

growth, now some of the partners will have to go," the India head at one of the multinational rms told ET.Senior people in the industry said they were also facing pressure due to the increasing adoption of articial intelligence and automation."Automation is also a big disruptor," a senior partner heading a GST team said. "So, while earlier adding people meant adding revenue, now one doesn't need to add as many people to add revenue. So not only are we hiring less people, the revenue pressure is felt by those who are in the system," he said."The upside lifted many boats during the GST launch euphoria, but the ones who stayed wise, not splurging on the short-term urge to increase headcount, aren't facing revenue pressure," said Suresh Nandlal Rohira, partner, Grant Thornton India, before adding that his rm was not facing any pressure.Many partners and directors who have seen a spurt in their salaries in last few years are exploring new things now."I will just take it easy for now. I hope to plan a family," one of them told ET."People who didn't have time to have kids are now thinking about that," said another. "Those who have kids are looking to take them to Disneyland."Source: The Economic Times

March 2019

Simpler GST turns out to be bad business for India's tax consultants

Not ica t ion No. 13 /2019-Customs (ADD)G.S.R. (E).- Whereas, in the matter of import of ‘Saturated Fatty Alcohols’ (hereinafter referred to as the subject goods), falling under tariff items 2905 17, 2905 19 and 3823 70 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in or exported from Indonesia, Malaysia, Thailand and Saudi Arabia (hereinafter referred to as the subject countries), the designated authority, vide its nal ndings notication No.14/51/2016- DGAD, dated the 23rd April, 2018, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 23rd April , 2018, had come to the conclusion that the product under consideration exported to India from the subject countries below its associated normal value, thus, resulting in dumping of the product. Some of the imports were also causing material injury to the domestic industry. And Whereas, had recommended

imposition of denitive anti-dumping duty on imports of the subject goods originating in, or exported from, the subject countries;And Whereas, on the basis of the aforesaid ndings of the designated authority, the Central Government had imposed an anti-dumping duty on the subject goods, vide notication of the Government of India in the Ministry of Finance (Department of Revenue), No.28/2018- Customs (ADD), dated the 25 th May, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i), vide number G.S.R. 498 (E) dated the 25th May, 2018; And Whereas, M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Exporter/trader), Singapore have requested for review in terms of rule 22 of the Customs Tariff (Identication, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, in respect of exports of the subject goods made by them, and the designated authority, vide new shipper

review notication No.7/38/2018-DGTR, dated the 15th January 2019, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 15th January 2019, has recommended provisional assessment of all exports of the subject goods made by the above stated party till the completion of the review by it; Now Therefore, in exercise of the powers conferred by sub-rule (2) of rule 22 of the Customs Tariff (Identication, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, after considering the aforesaid recommendation of the designated authority, hereby orders that pending the outcome of the said review by the designated authority, the subject goods, when originating in or exported from the subject country by M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Exporter/trader), Singapore and imported into India, shall be subjected to provisional assessment till the

review is completed. 2. The provisional assessment may be subject to such security or guarantee as the proper ofcer of customs deems t for payment of the deciency, if any, in case a denitive antidumping duty is imposed re t rospec t ive ly, on comple t ion of investigation by the designated authority. 3. In case of recommendation of anti-dumping duty after completion of the said review by the designated authority, the importer shall be liable to pay the amount of such antidumping duty recommended on review and imposed on all imports of subject goods when originating in or exported from the subject country by M/s. PT. Energi Sejahtera Mas (Producer) Indonesia and through M/s. Sinarmas Cepsa Pte Ltd (Exporter/trader), Singapore and imported into India, from the date of initiation of the said review.[F.No.354/169/2018-TRU] (Gunjan Kumar Verma)Under Secretary to the Government of India

Seeks to prescribe provisional assessment for 'Saturated Fatty Alcohols' when originating inor exported from subject countries by M/s PT. Energi Sejahtera Mas (producer) Indonesiathrough M/s Sinarmas Cespa Pte Ltd (exporter/trader) Singapore and imported into India

Notication No. 07/2019 – 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, on being satised that it is necessary in the public interest so to do, hereby makes the following further amendments in the notication of the Government of India in the Ministry of Finance (Department of Revenue), No.152/2009-Customs, dated the 31st December, 2009, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 943 (E), dated the 31st December, 2009, namely:-In the said notication, in the TABLE, against serial number 384, for the entry in

column (2), the entry, “480920, 480990”, shall be substituted.[F.No.354/107/1996-TRU (Vol. IV)] (Gunjan Kumar Verma)Under Secretary to the Government of IndiaN o t e . - T h e p r i n c i p a l n o t i c a t i o n No.152/2009-Customs, dated the 31st December, 2009 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 943 (E), dated the 31st December, 2009 and was last amended by notication No. 83/2018-Customs, dated the 31st December, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1258 (E), dated the 31st December, 2018.

Seeks to amend notification No. 152/2009-Customs dated 31.12.2009 so as to granttariff concession in respect of goods undertariff sub heading 4809 90 imported fromKorea RP under the India- Korea ComprehensiveEconomic Partnership Agreement (CEPA)

Circular No. 93/12/2019-GSTF. No. 354/124/2018-TRU Representations have been received requesting to clarify whether IGST or CGST/ SGST is payable for trading of PSLC by the banks on e-Kuber portal of RBI. 2. In this regard, it is stated that Circular No. 62/36/2018-GST dated 12.09.2018 was issued clarifying that GST on PSLCs for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank on forward charge basis and GST rate of 12% will be applicable on the supply. Further, Notification No. 11/2018-Central Tax (Rate) dated 28.05.2018 was issued levying GST on PSLC trading on reverse charge basis from 28.05.2018 onwards to be paid by the buyer bank. 3. It is further clarified that nature of supply of PSLC between banks may be

treated as a supply of goods in the course of i n t e r - S t a t e t r a d e o r c o m m e r c e . Accordingly, IGST shall be payable on the supply of PSLC traded over e-Kuber portal of RBI for both periods i.e 01.07.2017 to 27.05.2018 and from 28.05.2018 onwards. However, where the bank liable to pay GST has a l ready pa id CGST/SGST or CGST/UTGST as the case may be, such banks for payment already made, shall not be required to pay IGST towards such supply. 4. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board immediately. Yours Sincerely, (Harish Y N) Te c h n i c a l O f f i c e r , T R U E - m a i l : harish.yn@gov.in

Nature of Supply of Priority SectorLending Certificates (PSLC)

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GST Council in the 34th meeting held on 19th March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33rd meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. The council decided the modalities of the transition as follows.Option in respect of ongoing projects: 2. The promoters shall be given a one -time option to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019. 3. The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply. New tax rates: 4. The new tax rates which shall be applicable to new projects or ongoing projects which have exercised the above option to pay tax in the new regime are as follows. (i) New rate of 1% without input tax credit (ITC) on construction of affordable houses shall be available for, (a) all houses which meet the definition of affordable houses as decided by GSTC (area 60 sqm in non- metros / 90 sqm in metros and value upto RS. 45 lakhs), and (b) affordable houses being constructed in ongoing projects under the existing central and state housing schemes presently

eligible for concessional rate of 8% GST (after 1/3rd land abatement). (ii) New rate of 5% without input t ax c red i t sha l l be app l i cab le on construction of,- (a) all houses other than affordable houses in ongoing projects whether booked prior to or after 01.04.2019. In case of houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.(b) all houses other than affordable houses in new projects. (c) commercial apartments such as shops, offices etc. in a residential real estate project (RREP) in which the carpet area of commercial apartments is not more than 15% of total carpet area of all apartments. Conditions for the new tax rates: 5. The new tax rates of 1% (on construction of affordable) and 5% (on other than affordable houses) shall be available subject to following conditions,-(a) Input tax credit shall not be available, (b) 80% of inputs and input services (other than capital goods, TDR/ JDA, FSI, long term lease (premiums)) shall be purchased from registered persons. On shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.Transition for ongoing projects opting for the new tax rate: 6.1 Ongoing projects (buildings where construction and booking both had started before 01.04.2019) and have not been completed by 31.03.2019 opting for

new tax rates shall transition the ITC as per the prescribed method. 6.2 The transition formula approved by the GST Council, for residential projects (refer to para 4(ii)) extrapolates ITC taken for percentage complet ion of construct ion as on 01.04.2019 to arrive at ITC for the entire project. Then based on percentage booking of flats and percentage invoicing, ITC eligibility is determined. Thus, transition would thus be on pro-rata basis based on a simple formula such that credit in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards. 6.3 For a mixed project transition shall also allow ITC on pro-rata basis in proportion to carpet area of the commercial portion in the ongoing projects (on which tax will be payable @ 12% with ITC even after 1.4.2019) to the total carpet area of the project.Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019 7. The following treatment shall apply to TDR/ FSI and Long term lease for projects commencing after 01.04.2019. 7.1 Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer shall be exempted subject to the condition that the constructed flats are sold before issuance of completion certificate and tax is paid on them. Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold after issue of completion certificate, but such withdrawal shall be limited to 1% of value in case of affordable

houses and 5% of value in case of other than affordable houses. This will achieve a fair degree of taxation parity between under construction and ready to move property. 7.2 The liability to pay tax on TDR, FSI, long term lease (premium) shall be shifted from land owner to builder underthe reverse charge mechanism (RCM). 7.3 The date on which builder shall be liable to pay tax on TDR, FSI, long term lease (premium) of land under RCM in respect of flats sold after completion certificate is being shifted to date of issue of completion certificate. 7.4 The liability of builder to pay tax on construction of houses given to land owner in a JDA is also being shifted to the date of completion. Decisions from para 7.1 to 7.4 are expected to address the problem of cash flow in the sector. Amendment to ITC rules: 8. ITC rules shall be amended to bring greater clarity on monthly and final determination of ITC and reversal thereof in real estate projects. The change would clearly provide procedure for availing input tax credit in relation to commercial units as such units would continue to be eligible for input tax credit in a mixed project. 9. The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.Press Release: CBIC

March 2019

Decisions taken by the GST Council in the 34thmeeting held on19thMarch, 2019 regarding GST rate on real estate sector

In a major decision, the customs department has slapped a penalty of nearly Rs 1600 crore on 18 persons, including its own officers, traders and custom house agents (CHAs), in connection with the Rs 1000-crore inland container depot (ICD) scam involving proxy import of goods, including sex toys. The order in this regard was issued by customs commissioner (MP& CG) Neerav Mallik a few days ago. Some of those from whom the penalty has to be recovered have g o n e u n d e rg r o u n d , s a y s o u r c e s . Correspondences are being done for recovering the fine. The scam was unearthed by the directorate of revenue intelligence (DRI)

in 2013 while checking undervalued imported products. most of them from various countries in 1308 containers, including some prohibited Chinese items allegedly cleared in connivance with a section of customs officials. Despite objections from the DRI, custom officials had ordered provisional release of 12 containers -- five in Indore and seven in Nhava Sheva. The case was then forwarded to CBI which carried out raids in Indore, Mumbai and Chennai which revealed that custom officers were honey-trapped by the importers. "Officers were entrapped using sex-workers as baits by the import company, and were blackmailed with CDs

containing objectionable footages. These officers were forced to release the smuggled consignment,” said an officer. The import company in question had gifted cell phones and sim cards to these officers for a ‘safe’ communication. The goods were imported from China through Nhava Sheva port in Mumbai and transported to Inland Container Depot (ICD), Dhannad in Indore, for customs clearance. The goods were then transported back to Mumbai for sale, defying all commercial logic, sources said. Two months after the scam was exposed, the then Indore commissioner was suspended for his alleged involvement

in clearing imports that were undervalued to evade duty. Investigations revealed that imports were carried out through 18 fictitious companies. Proxy imports through four others were also discovered. The goods imported include women’s innerwear, chatons (beads) and garment accessories but were falsely ‘declared’ as fabric and gift sets to evade duty. Similarly, prohibited goods like sex toys and chlorodifluoromethane, a restricted item because of its ozone-depletion potential, was imported and cleared.Source: The Times of India

Customs dept slaps Rs 1600cr penalty in ICD scam

In one of the biggest haul, the Directorate Revenue of Intelligence (DRI), Mumbai on Thursday busted a gold smuggling racket and seized 110 kgs of gold. Seven persons of a syndicate were also arrested. They used to smuggle gold declaring it as brass metal, sell it to jewellers in Zaveri bazaar and then the money was sent back to Dubai through hawala channels.The DRI arrested seven persons including Nisar Aliyar (43), the kingpin who is a millionaire and proprietor of several companies in USA, Dubai and Kochi in Kerala. The other accused arrested are Shoeb Mehmood Zoradarwala (47), his son Abdul Ahad Zoradarwala (26),Zaveri Bazaar based jewellers Manoj Giridharilal Jain (32), Happy Arvindkumar Dhakad (34), Hawala operator Aquil Fruitwala (39) and Zoradarwala's employee Shaikh Abdul Ahad (32).Interestingly Soheb Zaradarwala is the

owner of Ajmeri tours and Travels who was allegedly under the scanner of the National Investigating Agency (NIA) for allegedly arranging tour visa for Areeb Majeed the youth who joined the Islamic state(IS) in 2016. Beside 110 kgs of gold the officials have also seized cash of Rs 1.81 crores from the residences and offices of Zoradarwala and Happy Dhakad. The seized gold was in form of disc, wires, rods and ropes. Acting on the specific tip off the DRI had been keeping a tab on a few s u s p e c t a n d o n We d n e s d a y t h e y intercepted a Activa bike which was driven by Zordarwala's employee Ahad Shaikh. "The search of his bike resulted in recovery of 30 kgs of gold in form of two circular disc. Following this we intercepted the City Honda car from which we recovered 45 kgs of gold'', said an official. During interrogation Zordarwala and Ahad shaikh admitted that they were

part of the gold smuggling syndicate headed by Nisar Aliyar and in the last one year they had smuggled around 200 kgs of gold. "The modus operandi was the Nisar the kingpin used to smuggle gold declaring them as brass and in India Zordarwala used to receive the contraband which he used to sell it to jewellers Rajubhai alias Manoj and Happy Arvindkumar. They in turn used to melt it to make Indian gold bar and sell it to various jewellers in the market. The money collected was than rerouted to Dubai through hawala operator Aquil Fruitwala,'' the officer added. He said that while Nisar gets a neat profit of anywhere between Rs 2.5 to Rs 3 lakhs per kg, the rest of get 10 to 20 percent plus they evade 3.6 percent custom duties. Interestingly Nisar who is from Kochi in Kerala himself used to come to India to supervise the smuggling operation. He is believed to have smuggled 200 kgs gold worth Rs 60 crores recently.

Nisar Aliyar stated that in addition to the gold sold to Zarodarwalas, he has also sold around 30 kgs of smuggled goods to Happy Dhakad. Manoj Jain admitted that he had bought around 111 kgs of foreign origin smuggled gold from Zarodarwalas in 3 to 4 months and that he was to received 15 kgs of gold from the quantity recovered by DRI. Aaquil Fruitwala also confirmed that he had received Rs. 12 crores from Zarodarwalas which he had sent through Hawala channels to Dubai as a payment towards smuggled gold. Fruitwala was ea r l i e r a r r e s t ed by Enfo rcemen t Directorate in Currency Declaration Form scam.Further, foreign marked gold to the tune of 20.4 kgs in cut form and 11.5 kgs in bars were recovered without any supporting evidence of import whatsoever.Source: The Times of India

DRI busts Dubai to Mumbai racket, seizes 110kg gold

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Circular No. 92/11/2019-GSTF. No. 20/16/04/2018-GST Various representations have been received seeking clarification on issues raised with respect to tax treatment of sales promotion schemes under GST. To ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the said Act”) hereby clarifies the issues in succeeding paragraphs. 2. It has been noticed that there are several promotional schemes which are offered by taxable persons to increase sales volume and to attract new customers for their products. Some of these schemes have been examined and clarification on the aspects of taxability, valuation, availability or otherwise of Input Tax Credit in the hands of the supplier (hereinafter referred to as the “ITC”) in relation to the said schemes are detailed hereunder: A. Free samples and gifts:I It is a common practice among certain sections of trade and industry, such as, pharmaceutical companies which often provide drug samples to their stockists, dealers, medical practitioners, etc. without charging any consideration. As per subclause (a) of sub-section (1) of section 7 of the said Act, the expression “supply” Circular No. 92/11/2019-GST includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Therefore, the goods or services or both which are supplied free of cost (without any consideration) shall not be treated as „supply� under GST (except in case of activities mentioned in Schedule I of the said Act). Accordingly, it is clarified that samples which are supplied free of cost, without any consideration, do not qualify as „supply� under GST, except where the activity falls within the ambit of Schedule I of the said Act. ii. Further, clause (h) of sub-section (5) of

section 17 of the said Act provides that ITC shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Thus, it is clarified that input tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration. However, where the activity of distribution of gifts or free samples falls within the scope of „supply� on account of the provisions contained in Schedule I of the said Act, the supplier would be eligible to avail of the ITC.B. Buy one get one free offer:i. Sometimes, companies announce offers like ‘Buy One, Get One free� For example, „buy one soap and get one soap free� or „Get one tooth brush free along with the purchase of tooth paste�. As per sub-clause (a) of sub-section (1) of section 7 of the said Act, the goods or services which are supplied free of cost (without any consideration) shall not be treated as „supply� under GST (except in case of activities mentioned in Schedule I of the said Act). It may appear at first glance that in case of offers like „Buy One, Get One Free�, one item is being „supplied free of cost� without any consideration. In fact, it is not an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one. ii. Taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the said Act. Circular No. 92iii. It is also clarified that ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply of goods or services or both as part of such offers. C. Discounts including ‘Buy more, save more’ offers:i. Sometimes, the supplier offers staggered discount to his customers (increase in discount rate with increase in purchase volume). For example- Get 10 % discount

for purchases above Rs. 5000/-, 20% discount for purchases above Rs. 10,000/- and 30% discount for purchases above Rs. 20,000/-. Such discounts are shown on the invoice itself.ii. Some suppliers also offer periodic / year ending discounts to their stockists, etc. For example- Get additional discount of 1% if you purchase 10000 pieces in a year, get additional discount of 2% if you purchase 15000 pieces in a year. Such discounts are established in terms of an agreement entered into at or before the time of supply though not shown on the invoice as the actual quantum of such discounts gets determined after the supply has been effected and generally at the year end. In commercial parlance, such discounts are colloquially referred to as “volume discounts”. Such discounts are passed on by the supplier through credit notes. iii. It is clarified that discounts offered by the suppliers to customers (including staggered discount under „Buy more, save more� scheme and post supply / volume discounts established before or at the time of supply) shall be excluded to determine the value of supply provided they satisfy the parameters laid down in sub-section (3) of section 15 of the said Act, including the reversal of ITC by the recipient of the supply as is attributable to the discount on the basis of document (s) issued by the supplier. iv. It is further clarified that the supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts.D. Secondary Discounts i. These are the discounts which are not known at the time of supply or are offered after the supply is already over. For example, M/s A supplies 10000 packets of Circular No. 92/11/2019-GST Page 4 of 5 biscuits to M/s B at Rs. 10/- per packet. Afterwards M/s A re-values it at Rs. 9/- per packet. Subsequently, M/s A issues credit note to M/s B for Rs. 1/- per packet.ii. The provisions of sub-section (1) of section 34 of the said Act provides as under: “Where one or more tax invoices have been issued for supply of any goods or services or both and the taxable value or

tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient one or more credit notes for supplies made in a financial year containing such particulars as may be prescribed.”iii. Representations have been received from the trade and industry that whether credit notes(s) under sub-section (1) of section 34 of the said Act can be issued in such cases even if the conditions laid down in clause (b) of sub-section (3) of section 15 of the said Act are not satisfied. It is he reby c l a r i f i ed tha t f inanc ia l / commercial credit note(s) can be issued by the supplier even if the conditions mentioned in clause (b) of sub-section (3) of section 15 of the said Act are not satisfied. In other words, credit note(s) can be issued as a commercial transaction between the two contracting parties. iv. It is further clarified that such secondary discounts shall not be excluded while determining the value of supply as such discounts are not known at the time of supply and the conditions laid down in clause (b) of sub-section (3) of section 15 of the said Act are not satisfied. v. In other words, value of supply shall not include any discount by way of issuance of credit note(s) as explained above in para 2 (D)(iii) or by any other means, except in cases where the provisions contained in clause (b) of sub-section (3) of section 15 of the said Act are satisfied.vi. There is no impact on availability or otherwise of ITC in the hands of supplier in this case. 3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.4. Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board. (Upender Gupta) Principal Commissioner (GST)

March 2019

Higher exemption threshold limit for supplier of goods: There would be two threshold· limits for exemption from registration and payment of GST for the suppliers of goods i.e. Rs 40 lakhs and Rs 20 lakhs. States would have an option to decide about one of the limits. The threshold for registration for service providers would continue to be Rs 20 lakhs and in case of Special category States Rs 10 lakhs. Composition scheme for services and mixed suppliers: A composition scheme shall be· made available for suppliers of services (or mixed suppliers) with a tax rate of 6% (3% CGST + 3% SGST) having an annual turnover in preceding financial year upto Rs 50 lakhs. Increase in turnover limit for the existing composition scheme: The limit of annual· turnover in the preceding financial year for availing composition scheme for

goods shall be increased to Rs 1.5 crore. Special category States would decide about the composition limit in their respective States. 2. The following notifications have been issued to implement the above decisions:Notification No. 10/2019 – Central Tax, dated the 7th of March, 2019 for higher· exemption threshold limit for supplier of goods;Notification No. 02/2019 – Central Tax (Rate), dated the 7th of March, 2019 for· Composition scheme for services and mixed suppliers, which would be optional to the taxpayers;Notification No. 14/2019 – Central Tax, dated the 7th of March, 2019 for increase in· turnover limit in case of existing composition scheme.3. These notifications shall come into effect from the 1st of April, 2019.Press Release : CBIC

Circular No. 10/ 2019-CustomsF.No.605/7/2019-DBK Ministry of Textiles (MoT) has notified a new scheme called Scheme for Rebate of State and Central Taxes and Levies on export of garments and made-ups (hereinafter referred to as RoSCTL) vide notification No. 14/26/2016-IT (Vol II) dated 7.3.2019. The new scheme has come into effect from 7.3.2019. Rates of rebate under RoSCTL have been notified by MoT vide notification No. 14/26/2016-IT (Vol II) dated 8.3.2019. Existing Rebate of State Levies (RoSL) scheme for garments and made-ups has been discontinued w.e.f. 7.3.2019. The notification may be downloaded from website egazette.nic.in and perused. 2. In view of the above, claims under the erstwhile RoSL scheme are to be processed for shipping bills with Let Export Order (LEO) date upto 6.3.2019 only. Directorate General of Systems and Data Management has already been advised to make necessary changes in the

System. Field formations under your j u r i s d i c t i o n m a y b e i n s t r u c t e d accordingly. 3. It is to point out that under the RoSCTL, the benefit to exporters shall be given by DGFT in form of Merchandise Exports from India Scheme (MEIS) type duty credit scrips. Detailed procedure for claiming benefit under the RoSCTL, issuance of scrips and their usage is being worked out. Till finalisation of such details, in the transition period, it has been decided that claims filed under the existing scheme codes for the erstwhile RoSL scheme will be treated as claims filed under RoSCTL scheme. 4. Suitable Public Notice and Standing Order should be issued for guidance of the trade and officers. Any difficulty faced should be intimated to the Board. (Dipin Singla) OSD (Drawback)

Clarification on various doubts related to treatment ofsales promotion schemes under GST

Implementation of various decisions takenby the GST Council for the MSME sectorThe GST Council in its 32nd meeting heldon 10th January, 2019, inter-alia, had takenfollowing decisions tobe effective from 01.04.19

Scheme for Rebate of State and Central Taxesand Levies on export of garments andmade-ups (RoSCTL)

For e-paper, visit : www.thertt.com12

The SC bench said that public authorities cannot ask for more than Rs5 for each page for photocopying charge, & motive need not to be disclosed while filling out the form.IN THE SUPREME COURT OF INDIAC I V I L A P P E L L A T E / O R I G I N A L JURISDICTIONWRIT PETITION (CIVIL) NO.194 OF 2012COMMON CAUSE PETITIONER(S)VERSUS HIGH COURT OF ALLAHABAD & ANR. RESPONDENT(S)WITHT.C.(C) No. 129 of 2013W.P.(C) No. 238 of 2014T.C.(C) No. 32 of 2014W.P.(C) No. 40 of 2016W.P.(C) No. 205 of 2016SLP(C) No. 30659 of 2017 O R D E RW.P.(C) No.194 of 2012, W.P.(C) No. 238 of 2014, W.P.(C)No. 40 of 2016 & W.P.(C) No. 205 of 2016 : Heard learned counsel for the parties. Challenge in these set of writ petitions is to the Rules framed under Section 28 of the Right to Information Act, 2005 (in short “the Act”). First objection of the petitioners is that the charges for the application fee and per page charges for the information supplied should be reasonable. We are of the view that, as a normal Rule, the charge for the application should not be more than Rs.50/- and for per page information should not be more than Rs.5/-. However, exceptional situations may be dealt with differently. This will not debar revision in future, if situation so demands.

Second objection is against requiring of disclosure of motive for seeking the information. No motive needs to be disclosed in view of the scheme of the Act. Third objection is to the requirement, in the Allahabad High Court Rules, for permission of the Chief Justice or the Judge concerned to the disclosure of information. We make it clear that the said requirement will be only in respect of information which is exempted under the scheme of the Act. As regards the objection that under Section 6(3) of the Act, the public authority has to transfer the application to another public authority if information is not available, the said provision should also normally be complied with except where the public authority dealing with the application is not aware as to which other authority will be the appropriate authority. As regards Rules 25 to 27 of the Allahabad High Court Rules which debar giving of information with regard to the matters pending adjudication, it is clarified that the same may be read consistent with Section 8 of the Act, more particularly sub-section (1) in Clause (J) thereof. Wherever rules do not comply with the above observations, the same be revisited as our observations are based on mandate of the Act which must be complied with.The writ petitions are disposed of in above terms. SLP(C) No. 30659/2017 :In view of order passed in W.P.(C) No.194 of 2012, the special leave petition is disposed of. The award of cost imposed by the High Court 1is set aside.T.C.(C) No. 129/2013 & T.C.(C) No. 32/2014In view of order passed in W.P.(C) No.194 of 2012, the transfer cases are disposed of.

The CBI has arrested two Central GST Superintendents for allegedly accepting a bribe of Rs 1 lakh, officials said Tuesday. Sanjeev Kumar and Vivek Dekate, posted in Central GST Commissionerate, Pune allegedly demanded a bribe of Rs 3 lakh for settling the service tax liability for the year 2016-17 of a businessman, they said. "CBI laid a trap and caught the accused red handed while demanding and accepting a bribe of Rs 1 lakh from the complainant, as first instalment of the total bribe amount of Rs 3 lakh," a CBI spokesperson said. He said searches were conducted at the office and residences of both the accused in Pune. "During the searches, documents regarding acquisition of moveable and immoveable properties, gold jewelleries, cash, computer hard disks and other incriminating documents were found," he said.PTI

March 2019

Printed, Published & Owned by: Printer at: Published at: AK Banerjee Metro Press, B-49, Lawrence Road Industrial Area, Delhi-35 S-6, Second Floor, Pankaj Plaza, 7, MLU Pocket-VII, Sector-12, Dwarka,New Delhi-110075 A K Banerjee thertt2010@gmail.com, akkbanerjee@yahoo.co.in +91-8384097152 Raju Dudani, Ajayveer Singh Jain & L. OjhaEditor: Email: Telephone No. Legal advisors :*All Disputes will be subject to the jurisdiction of the Delhi Court *Metro Press in not responsible for an content of this newspaper (RNI Regd. No.: DELENG/2009/29517)

The officers of Delhi zonal unit developed a specific intelligence regarding a syndicate operating in smuggling of cigarettes of foreign brands in a massive quantity from Myanmar through Moreh border. The smuggled cigarettes used to be sent to Moradabad (UP) initially and thereafter it was further offloaded on passenger buses and send for sale in Delhi and adjoining regions. T h e officers of Delhi zonal unit passed on the intelligence to the officers of M u z z a f f a r p u r regional unit of DRI who acting on t h e s a i d i n t e l l i g e n c e intercepted two trucks and seized around 34,87,200 sticks of foreign origin cigarettes . later on another truck from which 87 cartons of foreign origin cigarettes were offloaded in a bus at Moradabad which was destined to Delhi was also intercepted jointly by the officers of DZU

and Bareilly Customs preventive at Bareilly and seized 3,67,400 sticks of smuggled cigarettes from the said truck. The bus which was loaded with 87 cartons of Foreign origin cigarettes at Moradabad was intercepted at Delhi by the officers of DRI Delhi Zonal unit and seized

16,40,000 sticks of cigarettes . The entire o p e r a t i o n spreading across t h r e e s t a t e s resulted in total s e i z e r o f 5 9 , 94,600 foreign origin cigarettes h a v i n g a a r k e t value around Rs 8.25 crores. The t h r e e t r u c k s

involved in smuggling were also seized under Customs act. Six persons including the master mind were arrested under Customs act. Based on the press release of DRI Delhi Zonal unit

Supreme Court ruled that RTI fee no more than Rs 50

Revenue Department must pass speaking order forrelease of goods / vehicle detained: High Court

On the intelligence of DRI Delhi Zonal unit hugequantity of foreign origin cigarettes seized inDelhi, UP & Bihar worth 8.25 crore

CA Bimal Jain Facts: Ikram Hameed (“Petitioner”) was a transporter whose vehicle was used for transporting the goods supplied by M/s R.R. E n t e r p r i s e s . O n i n s p e c t i o n , v a r i o u s discrepancies were found and hence, vehicle along with the goods were detained by Revenue Department under Section 129 (1) of the Punjab Goods and Services Tax Act, 2017 and under Section 20 of the Integrated Goods and Services Tax Act, 2017 read with Section 68 (3) of the Central Goods and Services Tax Act, 2017. Present appeal was filed seeking a relief that representation filed by the Petitioner must be considered at adjudication stage.

Issue involved: Whether the Revenue Department was correct in detaining goods without giving the owner of goods or vehicle an opportunity to be heard?Held: The Hon’ble High Court of Punjab and Haryana vide its Civil Writ Petition No. 4263 of 2019 dated February 20, 2019 directed the Revenue Depar tmen t to cons ide r the representation dated January 25, 2019 and pass a speaking order after affording an opportunity of hearing to the petitioner.Citation: [2019] 103 taxmann.com 256 (Punjab & Haryana)info@a2ztaxcorp.com

CBI arrests two CentralGST Superintendentsfor taking bribe

(a) End to end Logistics solutions Provider of the year(b) Customs Broker of the year - Sea Cargo (Imports)Awards were given at the function of Northern India Multimodel Logistics Awards 2019 recently held on 22.2.19.I. National Award “SME – Empowering India” on

5th March, 2019 presented by Hon’ble Minister ot Steel, Govt. of India, Sh. Choudhary Birendra Singh.Arrucus Media Pvt.Ltd. recently organized the second edition of SME - Empowering India Award in association with the knowledge partner National Productivity Council, Media Partner ET Now and Print partner Economic Times.The objective of the award is to recognize, appreciate and encourage the contribution by SMEs to various sectors of economy and the nation It will not be out of place to point out that the organization which was started in 2007 with “Quality” as investment is growing continuously at remarkable speed year on year basis. The ISO certified and AEO status holder corporate customs broker & Public Bonded Warehouse Licence holder reflects strong fundamentals supported by professional management, main line clients and dedicated teams is now in the exclusive club of top companies in their line of work.

Rare achievement of M/S AV GlobalCorporation Pvt.Ltd. for winning awards for excellence in CargoLogistics Sector