Number of Taxpayers added after Demonetization-clarification on different figures given at PM Speech, FM Statement etc.

Number of Taxpayers added after Demonetization-clarification on media reports on different figures given at PM Speech, FM Statement, Rajya Sabha Reply etc.
Number of Taxpayers added after Demonetization
Press Information Bureau 
Government of India
Ministry of Finance
18-August-2017 19:37 IST

Clarification regarding number of Taxpayers added after Demonetization 

Various news reports/articles have appeared in the media regarding inconsistency in the estimates of the number of taxpayers added after demonetization. It has been commented that the following different figures have been given at different forums by different authorities: 

(i) The Prime Minister mentioned in his Independence Day speech that additional 56 lakh people filed Personal Income Tax Returns from 1st April to 5th August, 2017. Last year for the same period, the figure was 22 lakh. 

(ii) The Economic Survey Vol.2 released on August 12, 2017 mentions that 5.4 lakh new taxpayers were added post demonetization.

(iii) On May 17, 2017, the Finance Minister stated that 91 lakh taxpayers have been added to the tax net as a result of action taken by the Income Tax Department.

(iv) In reply to Unstarred Question No. 2017 in Rajya Sabha on 01.08.2017, it was stated that 33 lakh new taxpayers have been added to the tax net post demonetization.

It is clarified that there is no inconsistency in the data provided by the Government in the statements referred to above as these are in different contexts and for different time periods. The detailed clarification on each of the above numbers is as under: 

(a) The Prime Minister’s speech referred to the increase in number of e-filed Personal Income Tax Returns (ITRs) filed from 1st April, 2017 to 5th August, 2017 over the ITRs filed in corresponding period of earlier years. The data maintained by the IT Department shows that during 1st April, 2017 to 5th August, 2017, 2.79 crore e-returns of Individual taxpayers were received as against 2.23 crore e-returns received during 1st April, 2016 to 5th August, 2016. Thus, the additional ITRs received in 2017 works out to be 56 lakh. During the same period of 2015, 2.00 crore e-returns were received, meaning thereby, that in 2016, only 22 lakh (rounded off)) additional e-returns were received by the due date of filing. This data has already been put in public domain by CBDT’s Press Release dated 7th August, 2017.

(b) The analysis given in Table-6 on page 22 of the Economic Survey (Vol.2) is based on the data for the period of 9th November to 31st March of 2016-17 and corresponding periods of last two financial years. Moreover, the growth in the number of taxpayers discussed in the Economic Survey is based on the number of new taxpayers assuming the previous year’s growth rate as the reference growth rate. On the other hand, the growth of Individual return-filers referred to in PM’s speech is with respect to new as well as old taxpayers. Thus, the data used in Economic Survey is different from data referred to in PM’s speech in respect of the period of filing as well as the type of taxpayers and the two are not comparable.

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DSM/SBS/AK

Non-renewal of THC cannot deprive supporting manufacturer of deduction u/s 80HHC(1A)

Non-renewal of THC cannot deprive supporting manufacturer of deduction u/s 80HHC(1A). Lgislative intent is to extend benefit either to exporter or to supporting manufacturer and not to both – High Court

Non-renewal of THC

ABCAUS Case Law Citation:
ABCAUS 2033 (2017) (08) HC

Assessment Year :  1996-97

Important Case Laws Cited/relied upon by the parties:
IPCA Laboratory Ltd. v. Deputy Commissioner of Income Tax, Mumbai (2004) 12 SCC 742
Shrikar Hotels Pvt. Ltd. v. Commissioner of Income Tax (2017) 394 ITR 657 (All.)
Lachman Chaturbhuj Java v. R.G. Nitsure (1981) 132 ITR 631 (Bom.);

Brief Facts of the Case:
The respondent assessee had claimed deduction in respect of profits from export business in terms of the provisions of section 80HHA (1A). Along with the return the Assessee had duly filed the balance sheet, manufacturing trading and Profit & Loss (‘P&L’) Account, the Auditor’s Report under Section 80 HHC (4A) of the Income Tax Act, 1961 (the Act) and the certificate in Form No. 10 CCAB.

The sales had been made to a Export Trading House (‘ETH’) which had further exported the goods received from the Assessee to foreign buyers. The ETH had issued to the assessee a disclaimer certificate in Form 10CCAB confirming that no deduction under Section 80HHC (1) had been claimed by it in respect of the said export turnover.

The AO noted that in terms of Section 80 HHC of the Act it was obligatory on the part of the ETH  to obtain a certificate from the concerned Government authorities.  The application for renewal of THC, which had to be made within six months from the date of expiry of the earlier THC. It was, however, filed beyond the period of six months. Accordingly, the AO held that the ETH had not fulfilled the conditions for filing the application for renewal.

The Assessee pointed out that under the Export Import Policy (Exim Policy) of the Government of India, the THC was valid for three years and upon expiry of which, the ETH was allowed a further period of six months to apply and to obtain a fresh certificate. During this period, the ETH would be eligible to claim all the “usual facilities and benefits except the benefit of a Special Import Licence.” The Assessee explained to the AO that the ETH had in the instant case filed an application for renewal of its THC. The DGFT wrote a letter stating that the case of renewal was under active consideration. Thereafter, the ETH in question, did not receive any communication from the DGFT to indicate that its application for renewal of the THC was rejected.

Aggrieved by the above assessment order, the Assessee went in appeal before the Commissioner of Income Tax (Appeals) who allowed the appeal. The ITAT upheld the order of the CIT(A).

Contention of the Appellant Revenue:
The Revenue contended that unless the exporter is eligible to claim a deduction under Section 80HHC, the supporting manufacturer cannot, on the strength of a certificate issued by the trading house as referred in clause (b) of sub-section (4A) of Section 80HHC, claim such a deduction.

Observations made by the High Court:
The Hon’ble High Court noted that the legislative intent appears to be to treat the deductions to the aforementioned two types of Assessees, viz., the exporter and the supporting manufacturer, in mutually exclusive compartments. Therefore, the legislative intent is not to conflate the deduction that is allowable to an exporter with that allowable to a supporting manufacturer.

The Hon’ble High Court observed that there is a discernible distinction in the legislative scheme of Section 80 HHC between, the deduction that can be claimed by an exporter and the deduction that can be claimed by a supporting manufacturer. It appears to this Court that while the supporting manufacturer certainly has to fulfil the condition of a certificate having been issued by the exporter/export trading house to avail the benefit of a deduction from the turnover that has been made available to the supporting manufacturer, expressly in terms of Section 80 HHC (1A) of the Act, the said deduction does not hinge upon the eligibility of the exporter for the deduction under sub-section (1) of Section 80 HHC of the Act.

Distinguishing the judgment of the Hon’ble Supreme Court the Hon’ble High Court explained that all the observations of the Hon’ble Supreme Court relied by the Revenue were only in the context of an assessee which was claiming the deduction as an exporter and not in the context of an assessee which was a supporting manufacturer.

The Hon’ble High Court noted that , the legislative scheme which emanates from sub-section (1A) of Section 80 HHC is to treat the supporting manufacturer and its entitlement to deduction separately from that of the exporter. The word ‘Assessee’ used throughout sub-section (1) refers only to the exporter whereas the same word used throughout sub-section (1A) refers to the supporting manufacturer. This distinction, as already noted, is maintained throughout, and particularly in sub-sections (3A) and (4A), of Section 80 HHC.

Further it observed that a perusal of Form 10 CCAB clearly shows that there is a separate certificate to be issued in favour of the supporting manufacturer where the exporter makes a declaration that it has not claimed a deduction under Section 80 HHC (1). There is a counter verification by the Chartered Accountant of such a certificate. It is, therefore, clear that there is no double deduction claimed in respect of the export and this is consistent with the legislative intent of extending the benefit under Section 80HHC either to the exporter or to the supporting manufacturer and not to both. Even after the period for which the renewal of the THC was sought, ETH continued to be treated as an export house and that is plain from the facts that emerged before the CIT(A) as well as the ITAT.

Further On the question of ETH not having a valid THC and, therefore, not being in a position, at the relevant time, to issue any certificate to the assessee in terms of the proviso to Section 80 HHC(1) of the Act, the Hon’ble High Court concurred with the ITAT that ETH did file an application for renewal of its THC, which was pending before the relevant authorities for four long years and was pending even on the date of the assessment order.  Therefore,  the extant Exim Policy for the relevant period, which expressly states that during the interim period the trading house would be eligible to claim all the facilities and benefits, would come to rescue of the Exporter/ETH and therefore, to the further benefit of the supporting manufacturer/Assessee as well.

The Hon’ble High Court opined that mere non-grant of the renewal of the THC by the DGFT cannot deprive the Assessee as a supporting manufacturer for the deduction it is entitled to in terms of Section 80 HHC (1A) of the Act.

In fact the Hon’ble High Court mentioned number of decisions of various High Courts including Bombay High Court, Allahabad High Court etc.) in support of the contention of the assessee that when no response is received to an application seeking renewal within a reasonable time, after the filing of such application it should be deemed to have been allowed and the powers with the holders of public office have to be exercised within a reasonable time.

Held:
It was held that the Assessee was entitled to deduction under Section 80 HHC (1A) of the Act;

Non-renewal of THC
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FM asks States to reduce burden of VAT on Petroleum Products used as inputs in GST regime

FM asks States to reduce burden of VAT on Petroleum Products used as inputs in GST regime. Arun Jaitely writes to State Chief Ministers

Petroleum Products used as inputs

Press Information Bureau 
Government of India
Ministry of Finance
18-August-2017 12:01 IST

Finance Minister Sh Arun Jaitley writes to State Chief Ministers to reduce burden of Value Added Tax on Petroleum Products used for manufacturing 

The Union Minister of Finance, Defence and Corporate Affairs, Shri Arun Jaitley has written to State Chief Ministers urging the States to reduce burden of Value Added Tax (VAT) on Petroleum Products used as inputs in making of goods after the introduction of Goods and Services Tax (GST)

The letter by Finance Minister highlights a concern being raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products happening on account of transition to Goods and Services Tax regime. In the pre-GST regime, because the petroleum products as well as the final goods produced both attracted VAT, input tax credit of petroleum products being used as inputs by manufacturers was allowed to varying extent by different States. However, in the post-GST scenario, the manufactured goods attract GST while the inputs of petroleum products used in the manufacturing attract VAT and, therefore, it would lead to cascading of taxes. In view of this, in the pre GST regime certain States had lower rate of 5% VAT on Compressed Natural Gas used for manufacturing of goods. Some States also had lower rate of VAT on diesel being used for manufacturing sector.

Thus Sh Arun Jaitley has requested other States also to explore the possibility of having a lower rate of VAT on petroleum products used for manufacturing of those items on which there is GST, so that there is minimum disruption in the costing of goods.

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DSM/SBS/KA

Insolvency Resolution Process-Proof of claim by financial creditors by electronic mean

Insolvency Resolution Process-Proof of claim by financial creditors by electronic means. Claim for other than financial/operational creditors to be in Form-F

Insolvency Resolution Process-Proof of claim by creditors

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA

NOTIFICATION

New Delhi, the 16th August, 2017

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) (AMENDMENT) REGULATIONS, 2017

No. IBBI/2017-18/GN/REG013.—In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016, the Insolvency and Bankruptcy Board of India hereby makes the following regulations to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, namely:—

1. These regulations may be called the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2017.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as the principal regulations), after regulation 9, the following regulation shall be inserted, namely:—

“ 9A. Claims by other creditors.

(1) A person claiming to be a creditor, other than those covered under regulations 7, 8, or 9, shall submit proof of its claim to the interim resolution professional or resolution professional in person, by post or by electronic means in Form F of the Schedule.

(2) The existence of the claim of the creditor referred to in sub-section (1) may be proved on the basis of –

(a) the records available in an information utility, if any, or

(b) other relevant documents sufficient to establish the claim, including any or all of the following:—

(i) documentary evidence demanding satisfaction of the claim;

(ii) bank statements of the creditor showing non-satisfaction of claim;

(iii) an order of court or tribunal that has adjudicated upon non-satisfaction of claim, if any.”

4. In the principal regulations, in the schedule, in Form A, for paragraph starting with the words “The financial creditors” and ending with the words “electronic means”, the following paragraph shall be substituted, namely:—

“The financial creditors shall submit their proof of claims by electronic means only. All other creditors may submit the proof of claims in person, by post or by electronic means.”

5. In the principal regulations, in the Schedule, after Form E, the following new Form F shall be inserted, namely:—

FORM F

PROOF OF CLAIM BY CREDITORS (OTHER THAN FINANCIAL CREDITORS AND OPERATIONAL CREDITORS)

[Under Regulation 9A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016]

Date ………..

To
The Interim Resolution Professional / Resolution Professional
[Name of the Insolvency Resolution Professional / Resolution Professional]
[Address as set out in public announcement]

From
[Name and address of the creditor]

Subject: Submission of proof of claim.

Madam / Sir,

I, [Name of the creditor], hereby submit the following proof of claim in respect of the corporate insolvency resolution process in the case of [name of corporate debtor]. The details of the same are set out below:

PARTICULARS

1.  Name of the creditor
2. Identification number of the creditor
(If an incorporated body corporate, provide identification number and proof of incorporation. If a partnership or individual, provide identification* record of all partners or the individuals)
3. Address and email address of the creditor for correspondence
4. Description of the claim (Including the amount of the claim as at the insolvency commencement date)
5. Details of documents by reference to which claim can be substantiated
6. Details of how and when the claim arose
7. Details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claim
8. Details of:
a. any security held, the value of security and its date, or
b. retention title arrangement in respect of goods or properties to which the claim refers
9. Details of bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution plan
10. List of documents attached to this claim in order to prove the existence and non-satisfaction of claim due to the creditor
Signature of the creditor or any person authorised to act on his behalf (Please enclose the authority if this is being submitted signed on behalf of the creditor)
Name in BLOCK LETTERS
Position with or in relation to the creditor
Address of the person signing

* PAN, Passport, AADHAAR or the identity card issued by the Election Commission of India.

AFFIDAVIT

I, [name of deponent], currently residing at [insert address], do solemnly affirm and state as follows:

1. [Name of corporate debtor], the corporate debtor was, at the insolvency commencement date, being the __________ day of __________ 20__, justly and truly indebted to me for the claim, the value of which amounts to Rupees. [insert amount of claim]

2. In respect of my claim, I have relied on the documents specified below: [Please list the documents relied on as evidence of claim]

3. The said documents are true, valid and genuine to the best of my knowledge, information and belief.

4. In respect of the claim, I have not nor has any person, by my order, to my knowledge or belief, for my use, had or received any manner of satisfaction or security whatsoever, save and except the following (if any):

[Please state details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claim.]

Solemnly, affirmed at [insert place] on _________________ day, the __________day of__________ 20_____ .

Before me,

Notary / Oath Commissioner

Deponent’s signature

VERIFICATION

I, the Deponent hereinabove, do hereby verify and affirm that the contents of paragraph ___ to __of this affidavit are true and correct to my knowledge and belief and no material facts have been concealed therefrom.

Verified at ______ on this _____ day of ____ 201__ .

Deponent’s signature” .

Dr. M. S. SAHOO,
Chairperson [ADVT.-III/4/Exty./189/17]
Insolvency and Bankruptcy Board of India

Note : The Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 were published in the Gazette of India Extraordinary vide notification No. IBBI/2016- 17/GN/REG012 on 14th June, 2017.

CGST Fifth Amendment Rules 2017 Notification No. 22/2017

Central Goods and Services Tax Fifth Amendment Rules 2017. CGST Rules Amendment Notification No. 22/2017. Revision of FORM GST REG-13 dated 17th August 2017

CGST Rules Amendment

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF EXCISE AND CUSTOMS)

Notification No. 22/2017–Central Tax

New Delhi, the 17th August, 2017

G.S.R. 1023(E).—In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:—

(1) These rules may be called the Central Goods and Services Tax (Fifth Amendment) Rules, 2017.
(2) Save as otherwise provided, they shall come into force on the date of their publication in the Official Gazette.

2. In the Central Goods and Services Tax Rules, 2017,—

(i) in rule 3, in sub-rule (4), for the words “sixty days”, the words “ninety days” shall be substituted;
(ii) in rule 17, with effect from the 22nd June, 2017, in sub-rule (2), after the words, “said form”, the words “or after receiving a recommendation from the Ministry of External Affairs, Government of India” shall be inserted;
(iii) in rule 40, with effect from the 1st day of July, 2017, in sub-rule (1), for clause (b), the following shall be substituted, namely:—

“(b) the registered person shall within a period of thirty days from the date of becoming eligible to avail the input tax credit under sub-section (1) of section 18, or within such further period as may be extended by the Commissioner by a notification in this behalf, shall make a declaration, electronically, on the common portal in FORM GST ITC-01 to the effect that he is eligible to avail the input tax credit as aforesaid:

Provided that any extension of the time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.”;

(iv) after rule 44, the following rule shall be inserted, namely:—

“44A. Manner of reversal of credit of Additional duty of Customs in respect of Gold dore bar.—The credit of Central tax in the electronic credit ledger taken in terms of the provisions of section 140 relating to the CENVAT Credit carried forward which had accrued on account of payment of the additional duty of customs levied under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), paid at the time of importation of gold dore bar, on the stock of gold dore bar held on the 1st day of July, 2017 or contained in gold or gold jewellery held in stock on the 1st day of July, 2017 made out of such imported gold dore bar, shall be restricted to one-sixth of such credit and five-sixth of such credit shall be debited from the electronic credit ledger at the time of supply of such gold dore bar or the gold or the gold jewellery made therefrom and where such supply has already been made, such debit shall be within one week from the date of commencement of these Rules.”;

(v) in rule 61, with effect from the 1st day of July, 2017, in sub-rule (5), for the words “specify that”, the words “specify the manner and conditions subject to which the” shall be substituted;

(vi) in rule 87,—

(a) in sub-rule (2), the following shall be inserted, namely:—

“Provided that the challan in FORM GST PMT-06 generated at the common portal shall be valid for a period of fifteen days.

Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also do so through the Board’s payment system namely, Electronic Accounting System in Excise and Service Tax from the date to be notified by the Board.”;

(b) in sub-rule (3), for the second proviso, the following proviso shall be substituted, namely:—

“Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international money transfer through Society for Worldwide Interbank Financial Telecommunication payment network, from the date to be notified by the Board.”;

(vii) for rule 103, with effect from the 1st day of July, 2017, the following rule shall be substituted, namely:—

“103. The Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.”;

(viii) in “FORM GST REG-01” under the heading ‘Instructions for submission of Application for Registration’, after Serial No. 15, the following Serial No. shall be inserted, namely:—

“16. Government departments applying for registration as suppliers may not furnish Bank Account details.”;

(ix) With effect from the 22nd June, 2017, for “FORM GST REG-13”, the following FORM shall be substituted, namely:—

“FORM GST REG-13
[See Rule 17]
Application/Form for grant of Unique Identity Number (UIN) to UN Bodies/ Embassies /others

State /UT – District –

Instructions for submission of application for registration for UN Bodies/ Embassies/others notified by the Government.

• Every person required to obtain a unique identity number shall submit the application electronically.
• Application shall be filed through Common Portal or registration can be granted suo-moto by proper officer.
• The application filed on the Common Portal is required to be signed electronically or through any other mode as specified by the Government.
• The details of the person authorized by the concerned entity to sign the refund application or otherwise, should be filled up against the “Authorised Signatory details” in the application.
• PAN / Aadhaar will not be applicable for entities specified in clause (a) of sub-section (9) of section 25 of the Act.”;

(x) With effect from the 1st day of July, 2017, in FORM GST TRAN-1 in Serial No. 7,—

(i) in item (a), for the word, figures and brackets “and 140 (6)”, the figures, brackets and word “, 140 (6) and 140 (7)” shall be substituted;

(ii) in item (b),—

(a) after the word, figures and brackets, “section 140 (5)”, the words, figures and brackets “and section 140(7)” shall be inserted;
(b) for column heading 1, the column heading “registration number of the supplier or input service distributor” shall be substituted;
(c) in the heading of column 8, after the words “Eligible duties and taxes”, the brackets and words “(central taxes)” shall be inserted.

[F. No. 349/58/2017-GST(Pt.)]
Dr. SREEPARVATHY S.L., Under Secy.

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