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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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Publish Date: 15 Jul, 2014
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GOVERNMENT HEADING TOWARDS E-COLLECTION OF TAXES

GOVERNMENT HEADING TOWARDS E-COLLECTION OF TAXES

An article by:
CA Pradeep Jain,
CA Neetu Sukhwani &
Kushal Shah
 

Introduction:- The Hon’ble Finance Minister, Mr. Arun Jaitley in his budget speech delivered on 10th July, 2014 had expressed his desire to create an e-biz platform that is aimed to create a business and investor friendly ecosystem in India by making all business and investment related clearances and compliances available on a 24X7 single portal, with an integrated payment gateway. It was stated by him that all Central Government Departments and Ministries will integrate their services with e-biz platform on priority basis by 31st December, 2014. With a view to implement and effect the said technological change, amendments have been made in the recent budget 2014-15 by making payment of excise duties and service taxes mandatory through internet banking. However, discretion has also been given to the Assistant/Deputy Commissioners to allow payment of taxes via any other mode in exceptional circumstances on reasons to be recorded in writing. This article is an attempt to analyse the above change introduced by the government.

History:-
The government followed the practice of collecting the taxes manually through challans. However, with the technological advancement, the method of collection of taxes also changed and gradually, the government resorted to facilitate tax collections electronically. This may be better observed if we look at the series of amendments being made from time to time as follows:-
The proviso to Rule 6(2) as regards electronic payment of service tax was first introduced by the Service Tax (Fourth Amendment ) Rules, 2006 with effect from 01.10.2006 which read as follows:-

The assessees shall  deposit the service  tax liable to be paid by him with the bank designed by the Central Board of Excise and Customs for this purpose in Form TR-6 or in any other manner prescribed by the Central Board of Excise and Customs:

“Provided that the assessee, who has paid service tax of rupees fifty lakhs or above in the preceding financial year or has already paid service tax of rupees fifty lakhs in the current financial year, shall deposit the service tax liable to be paid by him electronically through internet banking.”

Thereafter, this limit was reduced by the Service Tax (Amendment Rules), 2010, w.e.f. 01.04.2010 vide Notification no. 01/2010-ST dated 19.02.2010 wherein the proviso was substituted as follows:-

 “Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall deposit the service tax liable to be paid by him electronically, through internet banking.”

Subsequently, this limit was further reduced w.e.f. 01.01.2014 vide Notification no. 16/2013-ST dated 22.11.2013 to Rs. One Lakhs.  

Similarly, amendments have been also effected in the Central Excise Rules, 2002 and the same are summarized as follows:-
 
The third proviso to Rule 8 regarding manner of payment of excise duty was inserted w.e.f. 01.04.2007 by Notification no. 08/2007-CE (N.T.) dated 01.03.2007 which provided that an assessee who has paid total duty of Rs. Ten lakhs or more including the amount of duty paid by utilisation of cenvat credit in the preceding financial year, shall thereafter, deposit the duty electronically through internet banking.
 
The limit specified in the proviso was substituted from Rs. 10 Lakhs to Rs. 1 Lakhs w.e.f. 01.01.2014 vide Notification no. 15/2013-C.E. (N.T.) dated 22.11.2013.
 
Amendment vide Notification no. 09/2014-ST w.e.f  1st October,2014 :-

In rule 6 of the said rules, for sub-rule (2), the following sub-rule shall be substituted with effect from the 1st  October, 2014, namely:-

“ (2) Every assessee shall electronically pay the service tax payable by him, through internet banking:
Provided that the Assistant Commissioner or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction, may for reasons to be recorded in writing, allow the assessee to deposit the service tax by any mode other than internet banking.”
 
Simultaneously, similar amendments have been made in the Central Excise Rules, 2002 vide Notification no. 19/2014-C.E. (N.T.) dated 11.07.2014 wherein it has been stated as follows:-
 
After sub rule (1A) of Rule 8, the following sub-rule shall be inserted w.e.f. 01.10.2014, namely:-
 
(1B) Every assessee shall electronically pay duty through internet banking:
 
Provided that the Assistant Commissioner or the Deputy Commissioner of Central Excise, for reasons to be recorded in writing, allow the assessee payment of duty by any mode other than internet banking.”
 
Implication of Amendment:-
 
With effect from 01.10.2014, every assessee will be required to pay excise duty and service tax payable by him electronically through internet banking and there is no other option available except in certain peculiar circumstances. Therefore, with the technological advancement, the government has also adopted advanced means of revenue collection. However, realising the fact that still there are villages in the country that are not equipped with sufficient internet facilities, a proviso has also been added wherein the powers have been given to the Assistant Commissioner or the Deputy Commissioner to allow the assessees for reasons recorded in writing to deposit excise duty or service tax by any mode other than internet banking. But, the facility of making payment of excise duty or service tax by any other mode is not available to every assessee and it is dependent on the desire and discretion of the revenue officers. Moreover, the reasons for allowing payment to be made by other mode are also not mentioned which may lead to controversies and unnecessary litigation. All that we can hope is that in the desire to collect taxes electronically, the government does not harass the small assessees who are unable or incapable to pay taxes electronically due to lack of adequate facilities because even in the present times there are certain remote areas in the country that are not even connected with uninterrupted electricity.  
 
 

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