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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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Publish Date: 02 Jul, 2009
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Expectations from Budget 2009-10

 

Expectations from Budget 2009-2010

 

 

The Budget 2009-2010 is likely to be presented in the first week of July. The said budget is being awaited eagerly by all to see what will be benefit awarded to them. The major concerns for the Finance Minister are stabilizing the Indian economy in this era of global recession and to insulate it from global meltdown. Reduction in fiscal deficit is also to be achieved by the Government.

 

Expectations from Budget:-

 

There are a lot of expectations from the Budget from almost all sectors. Some of the expectations are as under:-

 

Excise Duty & Service Tax: - The excise duty and service tax have been reduced by stimulus packages to boost the economy. The excise duty which was levied @ 14% initially was reduced to 10% and then to 8%. Similarly, service tax was also reduced from 12% to 10%.

 

At this junctures, it seems that the Government has very less option available with it and the Central Excise duty and service tax will be increased again. However, it would not be beneficial to restore the excise duty to 14% and service tax to 12% again. The global recession is still going on and the trade and industry are trying to face this challenge. This will almost reverse the slowly stabilizing economy.

 

Good & Service Tax: - The Government was planning to introduce Goods & Service Tax (GST) from April, 2010. GST will replace the current levy of excise duty & service tax. Now there is talk going on that the applicability of GST may be delayed by one more year. It is also rumored that GST may be applied @ 16%.

 

Looking to the Current economic scenario and the global trends, we will suggest that the Government should wait for one more year and let the deliberations go on the GST. The proposal should be put on the web and a healthy discussion should take place on the same. Thereafter, the same should be implemented. This will prepare everybody for such introduction of new system.

 

Exports: - To boost the decline in export orders, the Government must provide more sops to the exporters. The Government must try to provide exemption from export profits. The refunds of duty given by exporters should also be increased. Further, the refund of service tax paid on services used for exports was proposed last year. But it has proved eye wash for the industry. The numerous conditions for the refund have proved fatal and the exporters did not get the refund in the end. It is suggested that the exporters should be exempted from payment of service tax and monthly return should be filed showing that the services have been used for the exports. The numerous conditions should be waived.

 

DEPB Scheme is required to be extended beyond December, 2009.

 

Cenvat Credit on Capital Goods: - At present Cenvat credit on capital goods is allowed to be taken 50% in the current financial year and the remaining 50% is to be taken in the next financial year.

 

The Cenvat credit on capital goods should be allowed to be taken at 100% in the year of receipt of capital goods in the factory premises. This is in consideration of the present economic scenario. In the recession, the capital goods industry is worst hit. No body expands in the recession. This step will definitely help the capital goods industry and create a demand for them.

 

Small Scale Exemption: - The small scale exemption is granted to industries having aggregate value of clearances in the past year being less than Rs 4 Crores vide Notification No. 8/2003- CE, dated 1.03.2003. The exemption is available from payment of excise duty upto the clearances of Rs 1.5 Crore in the current financial year if the value of clearances during the last financial year did not exceed Rs. 4 crores.

 

The limit of exemption granted should be increased from Rs. 1.5 Crores.

 

Similarly, the SSI exemption granted to service providers should also be increased.

 

Compound Levy Scheme: - The compound levy scheme has been introduced for Patti Patti manufacturing units. The duty has been fixed per cold rolling machine. However, the said rate was fixed taking into consideration the then applicable rate of excise duty @ 16%. Thereafter, the rate of excise duty has been reduced and the current applicable rate is 8%. Accordingly, the duty to be paid under compounded levy scheme is also required to be reduced.

 

Reversal of duty as per Rule 6 of Cenvat Credit Rules, 2004: - As per Rule 6 of the Cenvat Credit Rules, 2004, if an assessee is manufacturing exempted goods as well as dutiable goods and is using common inputs and is unable to keep separate accounts, then he is required to reverse an amount equal to ten percent (10%) of value of the exempted goods. The said rate was fixed when the rate of basic excise duty was 16%. Now, as the rate of excise duty has been reduced to 8%. The rate of reversal under Rule 6 is also required to be reduced as they are now at a disadvantageous position and paying more amount.

 

 

Proportionate reversal method under Rule 6 of Cenvat Credit Rules, 2004: - The method of proportionate reversal given under Rule 6 is very complicated and gives rise to many problems. The said method requires to be simplified so as to reduce the complications arising out of interpretation of the said Rule.

 

Service tax paid on Works Contract Service:- The assessee liable to pay service tax under the works contract service has been given an option to pay service tax @ 4% of the gross amount charged for the works contract vide Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 notified by Notification No. 32/2007-ST Dated 22/5/2007.

However, now the rate of service tax has been reduced from 12% to 10%. Therefore, the rate of service tax payable under the Composition Scheme is also required to be reduced as they are paying service tax at a higher rate.

 

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