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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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UPDATE ON RoDTEP SCHEME EFFECTIVE FROM 01.01.2021

UPDATE ON RoDTEP SCHEME EFFECTIVE FROM 01.01.2021

Recently, Ministry of Finance issued a Press Release dated31.12.2020 wherein it was stated that in order to boost exports, government has decided to extend the benefit of scheme RoDTEP (Remission of Duties and Taxes on Exported Products) to all the export goods w.e.f. 01.01.2021. RoDTEP scheme which is applicable on all export goods is introduced to replace MEIS Scheme which is applicable for export of certain products to specified Countries. The government has resorted to withdrawal of MEIS due to petition filed by US before Dispute Resolution Panel of WTO on the grounds that some of the export benefit schemes designed by India is giving undue advantage to Indian exporters and violate WTO’s Subsidies and Countervailing Measures Agreement. Hence, it is decided by the Indian government to replace the existing schemes with new schemes which are more transparent and compliant to WTO norms.
 
The RoDTEP scheme would refund to exporters the embedded Central, State and local duties/taxes that were so far not being rebated/refunded and were, therefore, placing exports made from India at a disadvantageous position.  The scheme is in conformity with WTO trade norms and best global practises. There are certain taxes/duties/levies that are outside Goods and Services Tax (GST) and are not currently refunded on exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing, Stamp duty, etc. These taxes would be considered for the benefit under RoDTEP. The rebate shall be claimed as certain percentage of FOB value of exports which is yet to be notified by the government. The rebate would be credited in an exporter’s ledger account with Customs and can be used to pay Basic Customs Duty on imported goods or could be transferred to other importers just like MEIS. An exporter desirous of availing the benefit of the RoDTEP scheme shall be required to declare his intention for each export item in the shipping bill or bill of export. 
 
It is also pertinent to mention that government has also released the Advisory and Procedure to claim the benefit of RoDTEP scheme in the shipping bill wherein in Part I regarding claim in the shipping bill, point no. (e) clearly prohibits the benefit of RoDTEP where benefit of Advance Authorisation, EOU, jobbing etc. has been claimed by the exporter. The relevant paragraph from the Advisory is produced for the sake of convenient reference as follows:-
 
e. There are some checks built in the System to disallow RoDTEP benefit where the benefit of certain other schemes like Advance Authorization, EOU, Jobbing etc. has been availed.While some checks have been built in within the System at the time of filing the Shipping Bill, it is assumed that if the exporter (or the authorized Customs Broker) has submitted the statement as mentioned in para 2(b) with the Shipping Bill, the claim to RoDTEP has been made with the undertaking that no undue benefit would be availed.
 
It is worth mentioning that in case of one of our clients, benefit of RoDTEP was not granted even when shipping bill had mentioned of EPCG license on the grounds that both benefits are not admissible. As of now, the detailed scheme with rate structure is not released but placing such restrictions is not at all understandable. It was mentioned in the Press Release that the RoDTEP scheme is to compensate for taxes such as VAT levied on fuel, electricity duty, mandi tax, stamp duty on documents etc. which are out of GST and are not being refunded to the exporters at present. However, inspite of the fact that the benefit of RoDTEP is to be extended for all export goods, placing such prohibitions that benefit of Advance Authorisation should not have been availed is totally absurd. It is to be mentioned here that RoDTEP scheme seeks to replace MEIS wherein there was no such restriction. The exporters in the past have claimed benefit of MEIS along with Advance Authorisation or MEIS along with EPCG. However, placing this restriction in the upcoming new scheme is not at all understandable. It is hoped that the anomaly is rectified by the government soon otherwise it will tantamount to snatching existing benefits from the exporters in the guise of new scheme. 
This is solely for educational purpose.

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