GSTR-9 & GSTR-9C Filing due date extended to 31.03.2021 for FY 2019-20

GSTR-9 & GSTR-9C Filing due date extended to 31.03.2021 for FY 2019-20

It may be noted that the due date for furnishing of the GST Annual returns & GST Audit (GSTR-9 and GSTR-9C) specified under section 44 of the CGST Act read with rule 80 of the CGST rules for the financial year 2019-20 was earlier extended from 31.12.2020 to 28.02.2021 vide Notification No. 95/2020- Central Tax dated 30.12.2020. In view of the difficulties expressed by the taxpayers in meeting this time limit, Government has decided to further extend the due date for furnishing of GSTR-9 and GSTR-9C for the financial year 2019-20 to 31.03.2021 with the approval of Election Commission of India. This press note is being issued to keep taxpayers informed so that they may plan their return filing accordingly. Suitable notification to give effect to this decision is being issued.

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CBDT again extends due date for filing declaration under ‘Vivad Se Vishwas’ Scheme

CBDT again extends due date for filing declaration under ‘Vivad Se Vishwas’ Scheme

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 26th February, 2021

S.O. 964(E).—In exercise of the powers conferred by section 3 of the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020), the Central Government hereby makes the following amendments in the notification of the Government of India, Ministry of Finance, (Department of Revenue), number 85/2020, dated the 27th October, 2020, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 3847(E), dated 27th October, 2020, namely:––

In the said notification,––

(i) in clause (a), for the figures, letters and words “28th day of February, 2021” the figures, letters and words “31st day of March, 2021” shall be substituted;

(ii) in clause (b), for the figures, letters and words “31st day of March, 2021” the figures, letters and words “30th day of April, 2021” shall be substituted; and

(iii) in clause (c), for the figures, letters and words “1st day of April, 2021” the figures, letters and words “1st day of May, 2021” shall be substituted.

[Notification No. 09/2021/ F.No. IT(A)/01/2020-TPL]

SHEFALI SINGH, Under Secy., Tax Policy & Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Part-II Section 3, Sub-section (ii) dated the 27th October, 2020 vide number S.O. 3847(E), dated 27th October, 2020 and was subsequently amended by notification number S.O. 4804(E), dated 31st December, 2020 published in the Gazette of India, Extraordinary, Part-II Section 3, Sub-section (ii) dated the 31st December, 2020 and notification number S.O. 471(E), dated 31st January, 2021 published in the Gazette of India, Extraordinary, Part-II Section 3, Subsection (ii) dated the 31st January, 2021.

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No Extension in due date of GST Annual Return & Audit: Bombay HC

No Extension in due date of GST Annual Return & Audit: Bombay HC

Heard Mr. P. C. Joshi, learned counsel for the petitioners; Mr. Anil Singh, learned Additional Solicitor General along with Mr. P. S. Jetly, learned senior counsel, Mr. J. B. Mishra and Mr. Devesh Tripathi, learned counsel for respondent Nos.1 and 3; and Ms. Jyoti Chavan, learned AGP for respondent No.2-State.

2. Goods and Service Tax Practitioners’ Association, Mumbai and its President Shri. Raj Pravin Shah as the petitioners have preferred the present writ petition under Articles 226 / 227 of the Constitution of India for a direction to the respondents to extend the periodicity of filing of annual returns in the State of Maharashtra until complete lock-down is lifted or until the covid-19 pandemic situation improves completely. In continuation of the aforesaid prayer, petitioners seek further direction to the respondents to extend periodicity of limitation of filing of annual returns for the year 2019-20 in the State of Maharashtra under section 44

of the Central Goods and Services Tax Act, 2017 read with Rule 80 of the Central Goods and Services Tax Rules, 2017 upto 30.06.2021.

3. It is submitted that in terms of section 44 of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter) and rule 80 of the Central Goods and Services Tax Rules, 2017 (briefly ‘the CGST Rules’ hereinafter), every registered person is required to file annual return for every financial year in the electronic form before 31st day of December following the end of such financial year. In the case of the financial year 2019-20, the date for filing such annual return was 31.12.2020. By notification No.95/2020 dated 30.12.2020, the time-limit for furnishing such annual return for the financial year 2019-20 was extended till 28.02.2021.

4. It has been averred in the writ petition that covid-19 pandemic particularly in the State of Maharashtra is not yet over. Rather in recent days, there has been an increase in the number of cases of people being infected with covid-19. Lock-down imposed in the State of Maharashtra has not yet been completely withdrawn. As a matter of fact, several areas in the State of Maharashtra have seen fresh lock-downs in different forms in the recent past.

5. It is further submitted that filing or furnishing of annual return is dependent upon finalization of audit report under the Income Tax Act, 1961. Though the date for finalization of audit report under the Income Tax Act, 1961 is 30th day of September of the preceding year, for the financial year 2019-20 the due date under the Income Tax Act, 1961 was extended upto 15.01.2021. In other words, Chartered Accountants responsible for furnishing annual returns under the CGST Act would have less than 45 days after finalization of audit report under the Income Tax Act, 1961 to file annual return under section 44 of the CGST Act.

6. Because of the aforesaid reasons, petitioners had represented before the Grievance Redressal Committee, Pune on 08.01.2021. Finding no response, they made a further representation to the Goods and Services Tax (GST) Council on 11.02.2021. As no decision was forthcoming, present writ petition has been filed seeking the reliefs as indicated above.

7. Mr. Joshi, learned counsel for the petitioners submits that following amendment to section 44 of the Maharashtra Goods and Services Tax Act, 2017, a proviso has been inserted therein as per which the Commissioner may on the recommendation of the GST Council and for reasons to be recorded in writing by a notification extend the time- limit for furnishing the annual return for such class of registered persons as may be specified therein. Further, any extension of time-limit notified by the Commissioner of Central Tax shall be deemed to be notified by the Commissioner under the Maharashtra Goods and Services Tax Act, 2017. He further submits that there is no involvement of revenue in the matter as extension of time limit would not result in loss of any revenue. Looking into the genuine hardship faced by the members of petitioner No.1 and taxable persons, he submits that such discretionary power is required to be exercised by the Commissioner in the interest of justice. He has also referred to section 168A of the Maharashtra Goods and Services Tax Act, 2017 to contend that such extension of time-limit should be allowed if furnishing of annual returns within the extended time-limit upto 28.02.2021 cannot be completed or complied with due to force majeure, which has been explained to mean epidemic etc., in this case covid-19.

7.1. He has also referred to the judgment of the Rajasthan High Court dated 05.02.2020 in the case of Tax Bar Association Vs. Union of India wherein a Division Bench of Rajasthan High Court had directed that Tax Bar Association and the assessees represented by the Association may keep uploading their returns for which no late fee would be charged till 12.02.2020. It may be mentioned that the litigation before the Rajasthan High Court pertained to extension of time for the financial year 2017-18 on account of non-functioning of GSTN portal.

8. Mr. Singh, learned Additional Solicitor General has referred to and relied upon written instructions dated 25.02.2021 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing and addressed to the Commissioner, Central Goods and Services Tax, Mumbai South Commissionerate. He submits therefrom that the government has been considerate of the difficulties faced by the tax payers due to covid-19 pandemic and accordingly, the due date for filing annual returns and reconciliation statements has been extended. Timeline for filing such return and statement for the financial year 2019-20 has already been extended from 31.12.2020 to 28.02.2021 considering the difficulties faced by the tax payers. It is stated that annual return prescribed under section 44 of the CGST Act is not a new compliance; rather is is a reconciliation of GST returns filed by the tax payer. Audit being an important compliance-verification tool in self-assessment regime, effectiveness of tax administration would be compromised if the due date for filing these returns is extended repeatedly. Referring to the Rajasthan High Court judgment, Mr. Singh submits that the portion of the order of the Rajasthan High Court which had extended the deadline for submitting returns has been stayed by the Supreme Court in S.L.P. No.3839 of 2020 vide order dated 10.02.2020.

9. Ms. Chavan, learned AGP submits that State of Maharashtra has no independent say in the matter. Referring to section 44 of the Maharashtra Goods and Services Tax Act, 2017, she submits that the Commissioner can extend the time-limit only upon recommendations made by the GST Council. On his own, he cannot extend the time-limit. GST Council’s views have been expressed by Mr. Singh. Therefore, there is no possibility of extension of time-limit by the Maharashtra Commissioner.

10. Submissions made by learned counsel for the parties have received the due consideration of the Court.

11. On due consideration, we are not inclined to accede to the prayer made by the petitioners that too at this eleventh hour. It is not that the time-limit has not been extended. The initial due date of 31.12.2020 has been extended to 28.02.2021. That apart, on going through the relevant provisions of the CGST Act, more particularly the provision of section 47(2) thereof, we do not find that non-extension of the time-limit beyond 28.02.2021 would lead to any extinguishment of right. We find from the written instructions dated 25.02.2021 that vide notification No.77 of 2020 – Central Tax dated 15.10.2020 filing of annual return in the prescribed form for businesses with annual turnover upto Rs.2 crores has been made optional for the financial years 2017-18, 2018-19 and 2019- 20; and for businesses with annual turnover upto Rs.5 crores filing of the prescribed form for the financial years 2018-19 and 2019-20 has been waived off vide notification No.79/2000 – Central Tax dated 15.10.2020. We also take note of the fact that it is the professional body of GST practitioners who are before us and not any individual taxable person expressing any difficulty in adhering to the extended timeline of 28.02.2021.

12. In the circumstances, Court is not inclined to entertain the writ petition. Writ petition is accordingly dismissed.

(MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.)

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GST levied on Capital Subsidy for Green Field Public Street Lighting System

GST levied on Capital Subsidy for Green Field Public Street Lighting System

ODISHA AUTHORITY FOR ADVANCE RULING

It was submitted that the applican is engaged in the business of executing Greenfield street lighting project. The Government of Odisha, through the Housing and Urban Development Department, the Urban Infrastructure Development Fund and the Directorate of Municipal Administration has decided to develop an energy efficient street lighting system covering new and upcoming road stretches in Greenfield areas across 21 Urban Local Bodies (ULBs), including in the cities of Balasore, Bhadrak, Jajpur, Baripada on a Public Private Partnership basis.

For this purpose, the Odisha Urban Infrastructure Development Fund issued a Request for proposal based on an open bidding process. The Applicant has madea successful bid for the said tender and has consequently entered into an agreement on 29.12.2018 for design, supply, installation, operation, maintenance and transfer of the energy efficient Greenfield Public Street Lighting System and the Centralized Control & Monitoring System with the Government of Odisha represented by the Directorate of Municipal Administration (“the Authority”) and the ULBs. The Agreement provides that the initial term of the Agreement shall be 7 years. Under the Agreement, the Applicant undertakes to supply and install equipment such as LED Luminaire, feeder panels, poles, outreach arms, cables/wires with holding arrangement for overhead supply cables, in respect of both, the Greenfield Public Street Lighting System as well as the Centralized Control & Monitoring System.

It was submitted that for such installation, the Applicant is entitled to receive a consideration, in the form of Capital Subsidy, being 90% of the total capital expenditure incurred by the Applicant in supplying, installing and commissioning of the equipment. The balance 10% of the total capital expenditure along-with O&M fees is receivable as ‘Annuity fees’, and is recovered by the Applicant by raising quarterly invoices on the ULBs. After the Greenfield Public Street Lighting System has been commissioned, the Applicant is required to undertake the Operation and Maintenance of the system till the end of the term of the Agreement.

The Applicant submited that 90 per cent of Project Capital Expenditure received as capital subsidy is not “consideration” as defined in Section 2(31) of the CGST Act. Under Paragraph 13.1(a) ) of the Agreement, both the Authority and the ULBs have jointly agreed to provide the Applicant with the consideration, being 90% of the total capital expenditure incurred for the project. As per Para 1.3 of Escrow Agreement, the ultimate responsibility for depositing the Capital Subsidy in Escrow Account shall be with the Authority (Odisha Government). Hence Odisha Government is responsible for depositing Capital Subsidy equal to 90 per cent of amount received by the Applicant.

The Applicant submitted that they are not liable to pay GST on capital subsidy (90 % of the total capital expenditure ) amount received in terms of SIOM Agreement and Escrow Agreement as per the discussion held with the authority which awarded the work.

It was also submitted that the applicant has fulfilled all the conditions of works contract service (WCSs). Therefore, the supply made by the applicant qualifies as a supply of works contract services. Further, it was submitted that the Greenfield Street Lighting System along with the Centralized Control & Monitoring System is an immovable property. In the present case, the streetlight poles, with the overreach arms, LED Luminaires, feeder panels, etc. attached thereto, are erected along the roadways by burying the same up to 1.8 meters underground depth. The street light poles have to be attached to the earth in sucha manner that they should be capable of withstanding wind speeds of 150 km/h. Further, each pole is connected (underground) to an earthing electrode attached to every fifth pole. It is submitted that the said poles cannot be dismantled and reassembled without substantial damage to the entire paraphernalia. Thus, the Greenfield Street Lighting System qualifies as an immovable property.

The applicant has submitted that the entire contract shall be treated as a contract for the composite supply of works contract involving a supply of goods and services. In support of its claim, the applicant cited the decision of (i) Super Wealth Financial Enterprises (P) Ltd. reported in 2019 (20) GSTL 505 (AAR-GST).

Some of the Discussion & Findings

• We find that the questions before us essentially pertain to classification of supply of goods/services and the rate of GST applicable on supply of such goods/service, particularly the applicability of concessional rate of tax in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017. We, therefore observe that the issue before us is squarely covered under Section 97(2) of the CGST Act, 2017 and therefore we admit the application for consideration.
• It has been argued by the applicant, through the written submission and also at the time of personal hearing, that the impugned supply is a supply of ‘works contract service’ which is being supplied to Government of Odisha represented by the Directorate of Municipal Administration’ and the “Urban Local Bodies’. It has also been argued that Capital Subsidy (90% of Project Capital Expenditure) received as per SIOM Agreement and Escrow Agreement from Odisha Government/ULBs for executing the Green Field Public Street Lighting System is not liable to GST. Further, the applicant submitted that 10% of the Project Capital Expenditure would merit entitlement for concessional rate of GST@ 12% [CGST 6% + SGST @ 6%] in terms of Serial Number 3(vi) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (as amended).
• We find that the questions before us to answer are (a) Whether Capital Subsidy (90% of Project Capital Expenditure) received by the Applicant for execution of the Green Field Public Street Lighting System is liable to GST or not, if liable to GST, then at what rate of GST? (6) What shall be the applicable rate of GST for the balance 10% of the Project Capital Expenditure and 0&M Fees received as Annuity Fee (c) What shall be the time for raising GST Invoices for Capital Subsidy and Annuity Fee and (d) what would be the the rate of GST on the supplies by the sub-contractor to the Applicant in the instant case.
• Before proceeding to answer the aforesaid questions, it is essential for us to examine whether in the present case, the supply being undertaken or proposed to be undertaken by the applicant would qualify to be a supply of ‘composite supply ‘or works contract’. Therefore, we need to discuss all the provisions relating to composite supply’ and ‘works contract’ under GST Act.
• On perusal of the SIOM agreement (supply, installation, operation and maintenance) & Equipment Price Schedule for Cluster C, we see that the contract value for cluster C( urban Local Bodies in Balasore, Bhadrak, Jajpur, Baripada) is Rs. 42.35cr and the contract pricing is different for Equipment of Materials and O&M Fee (operation and maintenance fee). Out of Rs.42.35 cr, the price of Equipments is Rs.38.23 Cr and the price for 0&M Fee is Rs.4.12Cr only. Thus the contract price has clearly bifurcated the contract into a supply of goods and supply of services. Further clause No. 13 of the agreement deals with TERMS OF PAYMENTS. The said clause of the agreement envisages that separate payment for capital subsidy & 0&M Fee. There appears to be a clear bifurcation in the agreement with respect to price of Equipments and O&M Fees.

The Question and Ruling as follows :

Question 1 : Whether Capital Subsidy (90 per cent of Project Capital Expenditure) received by the Applicant as per SIOM Agreement and Escrow Agreement from Odisha Government / ULBs for the Green Field Public Street Lighting System in the State of Odisha is not liable to GST and if liable to GST, then at what rate of GST?

Answer : Capital Subsidy (90 per cent of Project Capital Expenditure) received by the Applicant is liable to GST. The GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading.

Question 2 : What shall be the GST rate for the balance 10% of Expenditure the Project Capital and O&M Fees received as Annuity Fee over the period of 7 years by the Applicant as per SIOM Agreement considering the SI. No. 3(vi) of the notification No. 11/2017 Central Tax (Rate), dt. 28-06-2017 as amended by Notification No. 31/2017 Central Tax (Rate), dt. 13-10-2017 and corresponding notifications of Odisha State Tax Rate as amended.

Answer : The supply being undertaken or proposed to be undertaken by the applicant would qualify to be a supply of ‘composite supply’ in terms of definition under Section 2(119) of the Central Goods and Services Tax Act, 2017, where the principal supply is ‘ supply of goods’ not supply of service’. Therefore, question of the applicability of concessional rate of tax in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 and as amended does not arise. The GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading.

Question 3 : What shall be the time for raising GST Invoices for Capital Subsidy and Annuity Fee (consisting of 10% of Project Capital Expenditure and O&M Fee) payable in 7 years?

Answer : Since in the subject case there is a ‘composite supply’ where the predominant supply/principal supply is ‘supply of goods’, we are of the opinion that the applicant should raise invoice as per the provisions of Section 31 of the CGST Act, 2017.

Question 4 : Whether the rate of tax on the supplies by the sub-contractor to the Applicant shall be 12 % GST ( 6% CGST and 6 % SGST) in terms of serial no. 3 (ix) of Notification No.11/2017-Central Tax(Rate) dated 28.6.2017 as amended by Notification No.1/2018-Central Tax (Rate) dated 25.01.2018/ Odisha State Tax (Rate) dated 28.06.2017 as amended.

Answer : Notification No.11/2017-Central Tax(Rate) dated 28.6.2017 as amended is applicable for ‘supply of service’. In the instant case, the supply being undertaken or proposed to be undertaken by the applicant would qualify to be a supply of “composite supply’ in terms of definition under Section 2(119) of the Central Goods and Services Tax Act, 2017, where the principal supply is supply of goods’ not supply of service’. Therefore, the said notification is not applicable to the applicant.

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Are you following the right budgeting model?

Are you following the right budgeting model?

A One-size-fits-all is an occasional solution in business and certainly for budgeting. Drafting a budget requires goal, vision & strategy aligned with organization mission. Organizations build a budget to set an expectation regarding future revenue & margin, which in turn becomes performance indicators for the operations head and also to take sensible strategic decisions, to strive in a competitive environment. However, amongst varied budgeting models, an organization has to choose the most effective and visionary model, keeping in consideration the environment in which a certain organization operates.

Below are four budgetary models which are widely used by organizations as per their requirement.

Incremental Budgeting:

The Incremental budgeting model is one of the easiest and traditional methods of budgeting. It adjusts the existing run-rate by increments to show the growth or decline of the business. For Example, you may increase/ decrease from last year actual revenue basis past trends and will reach out to budget. However, such a budget is likely to result in budgetary slack, wherein, managers may not provide correct insights into operations. It also excludes external drivers, such as high inflation or pandemic scenario etc.

Zero-Based Budgeting:

Zero-Based Budgeting calls for line-by-line justification of revenue and purchases. Also, zero-based budgeting is used to economize & trim the cost budget for excess spending. If compared, incremental budgeting increases or decreases across the board, however, zero-based budgeting assumes that each department starts at zero. Each department needs to justify each spending and building a budget from the scratch.

Zero-based budgeting is the best method to eliminate extra spending, but an exhaustive process at the same time. Complete visibility in budgets provides conscious spending and saving. Zero-based budgeting is most effective for savings goals.

Value Proposition Budgeting:

Value proposition budgeting focusses that everything in the budget delivers value for all the stakeholders of the business, i.e. Customer, staff, investors. Value proposition budgeting focusses on avoiding unnecessary expenditures, however, expenditure is not precisely aimed like zero-based budgeting goals. Budgets are itemized and thereafter justified to prove value for the business, eliminating cost that does not bring value and maximizing the budget to deliver strong results. Value proposition budgeting can also be used in alignment with other budgetary models, such as activity-based budgeting, on a small or large scale. However, value proposition budgeting sometimes becomes difficult to quantify as the value offered by multiple departments or initiatives can change rapidly.

Activity-based budgeting:

The activity-based budgeting method is a top-down budgeting approach and the mentioned model is focused on the result an organization wishes to achieve. For example, if an organization is seeking valuation or is targeted to achieve a turnover of XXX million, the budget would be computed backwards to analyze the activities which will create that desired effect and will proceed accordingly.

Activity-based budgeting is enormously effective when an organization has goal-oriented strategy.

There are other budgeting models as well like rolling budget, flexible budget etc. which aren’t commonly used but few organization use as per its industry & market conditions to achieve its mission.

Feel free to reach the author at priyankamaheshwari38@gmail.com.

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Representation on various issues relating to VAT/ GST

Representation on various issues relating to VAT/ GST

SALES TAX BAR ASSOCIATION (REGO.)

Ref. No. STBA/2021/13                                                             Dated : February 16, 2021

The Commissioner,
Value Added Tax,
Department of Trade & Taxes,
I.P. Estate, New Delhi.

Subject : Representation/ Reminder on various issues relating to VAT/ GST discussed with your goodself.

Sir,

This is with reference to various issues discussed with your goodself in the meeting of Newly elected Office Bearers and Executive Committee Members of Sales Tax Bar Association (Regd.) in your Chamber on Monday, 8th Feb., 2021:

In continuation, we respectfully reiterate following issues for your immediate consideration:

1. Fixation of exclusive working hours by OHAs for hearing of the objection petitions in morning sessions only:

(i) THAT it pains us to point out that several objections (huge No.) are pending before Objection Hearing Authorities for want of hearings. The Objection Hearing Authorities are always stated to be busy with other worll­ and they do not have any time to hear the Objection petitions.

(ii) THAT all the objection authorities have fixed different hours for hearind the objection petitions but it is sad to say that even in those hours, th objections are not taken up. The past practice of the Department has been to hear the objections petitions during morning hours and units (for disposal of petitions) were fixed by the Department to get appropriate disposal of practice has been dispensed with and the matter has been worse during pandemic era. Hardly any objection petitions have been disposed off except SOHA Branch.

(iii) THAT in view of the above, we humbly request you to direct the I Objection Hearing Authorities to fix hearings of the objection petitions in the morning hours. Earlier, it used to be from 11 O’clock to 1.30 p.m. At the same time, units (no. of disposals) should be fixed for disposal of objections petitions. Earlier it was mandatory to dispose off minimum fixed No. of petitibns in a month. This will result in disposal of the objection petitions which are pending since 2007-2008. Needless to say that disposal of objections is also in the interest of Department as the Department gets due tax imposed if the objection is rejected.

(iv) In addition, time limit (say maximum 15 days) be fixed to pass orders in the matters heard and kept for orders. In case an OHA is transferred in between, he should be directed to pass orders’ in already heard matters. There are many instances in which OHAs has heard the matters 2 months earlier but have not passed orders for the reasons best known to them.

2. Appointment of SOHAs:

At present only two SOHAs are working for disposal of objections relating to statutory forms under the Central Sales Tax Act. In view of large number of such objections pending for disposal and now more objections likely to come very soon due to many orders being passed by many officers of Department for F.Y. 2016-17, the Two SOHAs will not suffice.

We accordingly humbly request for immediate appointment of at least six more officers (SOHA) so that objections can be cleared. We are submitting it on the basis of our experience in earlier years.

3. Functioning of Authority for Advance Ruling under GST:

Since Nov., 2020, AAR is not functioning and orders for many cases which have been heard and kept for orders are also pending. We were informed that Central Authority has already been appointed and new Authority will start functioning in 7 – 8 days. We hope you will look into ,it at your personal level and have the Authority start working.

4. Review/ Rectification of orders:

Under Section 74B, there is a provision for Review of orders passed by Ld. AA within 30 days of the order and for rectification within 4 years from the date of order whenever mistake is apparent on record. However, whenever our members approach the Ld. Officers of the Department for rectification, they refuse to accept the application saying that 30 days times is over and now you should file objection before SOHA / OHA ignoring the legal position.

We request you to please inform them the legal positions to accept the rectification as per law and dispose the same within fixed time so to avoid harassment of members / dealers.

5. Re-opening of VAT Portal for filing revised returns under DVAT Act & CST Act for F.Y. 2018-19

(i) THAT under the provisions of Delhi Value Added Tax Act and Central Sales Tax Act, the dealer is allowed to revise his prescribed returns withi next financial year. That means the returns for the financial year 2018-19 could have been revised by 31.03.2020.

(ii) THAT with the onslaught of pandemic COVID-19 on 22.03.2020, lockdown was announced and everything became standstill. The returns which are required to be revised by 31.03.2020 could not be revised by the dealers.

(iii) THAT after the un-lockdown, it was found that the software in the portal accepting revised returns has been closed.

(iv) THAT we have been representing since then that the portal should be opened and the dealers should be allowed to revise their returns for the financial year 2018-19. Somehow, the portal has not been opened till date. The representations were made to your predecessors and a copy of the same is annexed for your ready perusal. It is self explanatory.

6. Assessment under CST Act, 1956 for A.Y. 2016-17 after removal of glitches in software system:

(i) THAT Central assessments for the assessment year 2016-17 are being finalized through computer software keeping in view time barring mandate.

(ii) THAT the central assessments are finalized on the basis of Central Form 9 filed in support of concessional rate of tax declared inter-State sales. The dealers are required to furnish Form ‘C’ in support of such claims and there are other Forms also being ‘H, I’ etc. which are required to be filed for claiming exemptions etc. THAT the portal stopped accepting Form 9 for quite some time. On representation of the Bar, the portal was opened and the dealers were allowed to file Form 9. In some cases, part of the statutory Forms were filed before the Form 9 was blocked and in other cases, Forms were filed after the re-opening of the portal allowing dealers to file Form 9.

(iv) THAT it has been noticed that the portal allows concession / exemption on the Forms filed before the closure of the portal. All Forms filed after re­opening of the portal are not considered while finalising the assessment. This is resulting in unwarranted anxiety and tension to the dealers / professionals at large.

You are requested to direct the concerned authorities to look into this glitch and have it removed so that on the one hand, undue tension is not caused to the dealers and on the other hand, Department is also saved fro undue litigation.

7. Disposal of review application / requests for sou-moto review filed b dealers for the year 2015-16

(i) THAT the limitation for finalising assessments for the year 2015-16 was to expire on 31.03.2020. The pandemic COVID-19 broke on 22.03.2020 in Delhi. The Assessing Authorities fearing loss of revenue because of non­finalizing of assessments, mechanically framed the assessments for the year 2015-16.

(ii) THAT these assessments were finalised even in cases where FORM 9 under the Central Tax Act stood filed. We take this opportunity to place on record that Central Sales Tax (Delhi) Rules were amended to provide that the assessments would’ be finalized on the basis of FORM-9. It was a conscious decision at that time that for finalisation of Central assessments, dealers would not be called and the details of statutory forms available with them would be uploaded by them in FORM 9 on the VAT portal and the assessing authorities would finalize assessments on that basis.

(iii) THAT after the finalization of Central assessments for the year 2015-16 ignoring FORM 9 which stood filed and in large number of cases, the assessments were finalized where the assessments had already been framed. One Assessing Authority finalized the assessments on quarterly basis and during this pandemic scare, the subsequent assessments were finalized on annual basis. The crux of the matter is that for the same period, two assessments were framed.

(iv) THAT it was then decided by the Department that wherever two assessments have been framed or the assessment has been framed ignoring FORM 9, all those matters would be reviewed. The dealers in some cases filed applications for review and in other cases requested the assessing authorities to suo-motu review the orders.

(v) THAT it is a matter of record that the limitation for filing the review applications as well as request for suo motu review is still continuing in view of the orders passed by the Hon’ble Supreme Court in Court on its own Motion Writ Petition (C) No. 3/2020.

(vi) THAT probably because of non-conversant with the orders of Hon’ble Supreme Court, the Assessing Authorities have not taken up the review/suo motu review petitions thinking that these are time barred. A circular was also issued by the Department to say that limitations would be governed keeping in view the Supreme Court orders. This Circular, it appears has not reached assessing authorities (Circular No.3 of 2020-21).

(vii) THAT a representation was made to the then Commissioner but the necessary directions have not been passed on to the Assessing Authorities.

8. Unauthorised Data Operators working in different Wards:

It is informed that in almost all Wards unauthorised data operators are being used by Officers of the Wards. Theses operators many times misbehave with members of the Bar and the dealer as well. The presence of such data operators is highly objectionable and secrecy of the data is made available to outsiders.

9. Data not available in system of Department for framing re-assessment in remand matters for F.Y. 2008-09 and earlier period:

It is informed that data for the year 2008-09 and earlier is not available in computer system of the Department to frame remanded assessment in the cases remand by OHA. In absence of same, AA cannot pass the remand orders and due refund cannot be issued to the dealer. This being a system glitch, necessary instructions be issued to system branch to do the needful at the earliest possible.

10. Generation of refunds where bank particulars have changed:

It is informed that in many cases bank particulars of dealers have changed with the passage of time. Refund orders due in such cases cannot be generated as particulars cannot be changed in DP-1. The same has been closed and now amendment is not possible otherwise.

We, therefore, request that necessary instructions be issued to open DP-1 or any alternative arrangement be made to accept change in bank particulars for issue of old refunds.

11. Notices u/s 59(2) for assessments under Central Act:

(i) It has been seen that Ward Officers are issuing notices u/s 59(2) for Central Assessment for 2016-17 even if all “C” Forms have been uploaded in Form -9. We therefore, request you to please direct the officers not to issue notices in such cases as it increases their work as well as work of the dealer and the Counsel which is a wastage of time and energy.

(ii) Ward Officer should also be directed to issue notices u/s 59(2) in those cases where full statutory forms are not submitted in Form-9 by the dealer before completing the assessment based on Form-9.

12. Notices for intimating discrepancies in returns after scrutiny (GST)

It is informed that State GST Authorities are issuing GST ASMT-10 intimating discrepancies in the returns based on difference between GSTR-1 and GSTR-3B for 2018-19 even if differences of tax is of few paise.

This type of notices unnecessarily increases work of department, and of th dealer and the consultant without any revenue earning to the Govt. (copy of one such notice enclosed).

It is, therefore, requested to direct the officers to be careful while issuing such notices as it gives bad name to the department and the officer concerned.

13. Name Plates for Officers:

It is reiterated that inspite of previous instructions name plates have not been fixed at the office prernises of Ward Officers and consequently members are not aware before whom they are appearing. It is therefore, suggested that the same be placed as early as possible.

Hope to receive your magnanimous consideration

With regards

Yours truly,

For Sales Tax Bar Association (Regd.)

Suresh Agrawal
Secretary

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CBIC Clarification on Agriculture Infrastructure and Development Cess (AIDC) payment by EOU

CBIC Clarification on Agriculture Infrastructure and Development Cess (AIDC) payment by EOU

Circular No. 07/2021-Customs

F.No. DGEP/SEZ/09/2017 (Part III)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs
(Directorate General of Export Promotion)
******

New Delhi, dated 22 February, 2021

To,

All Pr. Chief Commissioners/ Chief Commissioners of Customs/ Customs (Prev.),
All Pr. Chief Commissioners/ Chief Commissioners of Central Tax/ Central Excise,
All Pr. Commissioners/ Commissioners of Customs/ Customs (Prev.),
All Pr. Commissioners/ Commissioners of Central Tax and Central Excise,
All Pr. Director Generals/Director Generals under CBIC.

Madam/Sir,

Subject: Clarification regarding payment of Agriculture Infrastructure and Development Cess (AIDC) by EOU under various situations and amendment to Circular no. 35/2016-Customs dated 29.07.2020 – regarding.

Finance Bill, 2021 (15 of 2021) dated 01.02.2021, vide clause 115 has imposed a duty of customs, to be called Agriculture Infrastructure and Development Cess (AIDC), on the import of goods specified in the First Schedule to the Customs Tariff Act, 1975 at the rate not exceeding the rate of customs duty as specified in the said Schedule, for the purposes of financing the agriculture infrastructure and other development expenditure. The said provision of clause 115 of the Bill has been given immediate effect under the Provisional Collection of Taxes Act, 1931.

1.1 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) read with clause 115 of the said bill, Government of India vide Notification No. 11/2021- Customs dated 1st February, 2021 vide Sr. no. 19 read with serial no. 7 of the Annexure to the said notification has fully exempted goods imported by EOUs/EHTP units/STP units (collectively called EOUs) from the AIDC as the goods imported by these units enjoy benefit of exemption from basic customs duty under notification no. 52/2003-Cus dated 31.03.2003.

1.2 In case of EOU selling finished goods in DTA, BCD exempted on import of inputs used in such finished goods is to be paid vide Notification No. 59/2017-Customs dated 30.06.2017 [amending by Notification No. 52/2003-Customs dated 31.03.2003]. On payment of such BCD by EOU at the time of clearance of finished goods it is treated as if no exemption of BCD was allowed to the EOU under Notification No. 52/2003-Customs dated 31.03.2003. Once it is deemed that no exemption of BCD on inputs is allowed which were imported under exemption Notification No. 52/2003-Customs dated 31.03.2003, AIDC exemption under Notification no. 11/2021-Customs dated 01.2.2021 also gets denied on such inputs and same is also required to be paid by EOU.

1.3 In addition to clearance of goods in DTA there are many situations like clearance of inputs; capital goods; packing material suitable for repeated use such empty cones, bobbins, containers; left over textile fabric or textile material etc. or exit from EOU scheme. In such cases duty/tax of which exemption under Notification No. 52/2003-Customs dated 31.03.2003 was availed at the time of import is required to be paid at the time of clearance. In case of clearance of capital goods, applicable depreciation is allowed for denial of exemption. Unutilized left over textile fabric or textile material is allowed to be cleared into DTA on payment of duty leviable at the time of import but for the exemption on transaction value as if the goods have been manufactured in that unit. Exemption of duty/tax on goods imported under Notification No. 52/2003-Customs dated 31.03.2003 is also denied on account of breach of various conditions of EOU scheme. Once EOU is required to pay back BCD for which exemption was claimed and allowed under Notification No. 52/2003-Customs dated 31.03.2003 at the time of import then exemption of AIDC, if availed, in all such situations shall also be denied. Thus, EOU shall be required to pay AIDC in the manner of payment of BCD against the goods imported under exemption Notification No. 52/2003-Customs dated 31.03.2003 under various situations.

2. EOU/STP/EHTP are required to maintain and also submit digital copy of Form – A to Circular no. 35/2016-Customs dated 29.07.2016, by 10th of month to proper officer, which captures the summary of receipt, removal, returns and balance of imported goods under Notification No. 52/2003-Customs dated 31.03.2003. Copy of Quarterly Performance Report and Annual Performance Reports [QPR/APR] are also required to be submitted to jurisdictional AC/DC of Customs as mandated by DGFT Public Notice no. 36/2015-2020 dated 04.09.218. Though QPR/APR contain details of various activities including revenue contribution by EOUs but these are reflected in consolidated manner and these reports may be a monitoring tool for departmental officers with limitations. However, for effective and monthly monitoring of exemption of duty/taxes availed under Notification No. 52/2003-Customs dated 31.03.2003, the said Form ‘A’ is amended and revised Form ‘A’ is annexed herewith. Circular no. 35/2016-Customs dated 29.07.2016 may be treated as amended to above extent.

3. Difficulties, if any, may be brought to the notice of Board.

4. Hindi version will follow.

Encl: – Revised Form ‘A’

Yours faithfully,

-S/d-

(Saroj Kumar Behera)
Additional Director

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