CA Pradeep Jain &

CA Vaibhav Bothra

As the budget session 2015 is approaching, the nation is garnering its own expectations. The assessees falling under the indirect tax net are no different. Struggling with the high end compliances and to cope up with the difficult rules to adhere, they too are in need for some relaxation and simplification. As a part of improvement and development of this important aspect of indirect taxation, following points have emerged as the need of the hour.

1. ‘E’ Mantra to be followed:- The world has entered into the phase where every work is being done online and with a click. The indirect taxes still lives in the era of paper bundles and physical attestations. Apart from registration and returns, we have not been able to bring anything online. Even the smallest and least important intimations have to be submitted to the department physically and given the no. of ranges and divisions, we can easily imagine the sufferings of the assessee. This becomes more amusing when we see our counterpart i.e. direct taxation departments much more advanced in using the technology. It is hoped that E-appeals and E-hearings are adopted both at the adjudication and appellate levels so that the paper work and associated costs are minimised. With minimal no. of tribunals and ever growing litigations, adopting online approach would help in enhancing the speed with which matters are resolved.

Even the ACES site shows number of features like intimations, refund etc. to be filed online but the department has implemented only the feature of registration and returns online. Still the export intimations, invoice intimations are being filed manually. Even the department has implemented “Sarvotam”. This “Sarvotam” means acknowledging the manual post at the spot. We suggest that instead of manual post the letters should be accepted through e-mail. This will reduce time and money of the assessee as well as of the department. Even the mails received through ACES system will be disposed off in a systematic manner.

2. Strategy of achieving revenue targets should be dispensed with:- Another nightmare for assessees is the target achieving scheme of the revenue department. This strategy gains all its speed in the last quarter of the financial year and it becomes the most dreaded period for the assessees. The department resorts to raising all kind of baseless queries along with pressurising the assessees to deposit duty in cash instead of utilizing the Cenvat so that the revenue collection figure boosts up. Thus the assessee has to face liquidity issues with the Cenvat locked up which also causes interest loss. The practise of making revenue targets should be dispensed with so that non-adversial tax environment is developed.

3. Abolition of the practise to submit revenue figures:- Another seemingly baseless requirement of the revenue department is the submission of revenue figures which they want positively on the 1st of every month in spite of the fact that ER-1 returns are being filed monthly which consist the same figures. The practise of submitting same details again and again in different forms only creates unwarranted burden on the assessee. The practise of submitting such unnecessary details should be avoided. It is useless to give revenue figures on first of every month whereas the same are available on every tenth online in the returns. Knowing 10 days in advance will not going to make any sense. Even the figures given on first are tentative and accurate figures are normally shown in the returns. This type of practice of taking revenue figures are with Central Excise manufacturers only and not with the Service tax providers. This is unnecessary waste of time and money of department as well as manufacturers.

4. Judicial discipline should be implemented strictly:- It is commonly observed that the decisions pronounced by the Tribunals, High Courts and even Supreme Courts are ignored and distinguished on absurd reasons with the sole intention to confirm demands against assessees. The government should develop a mechanism to ensure that the departmental officers unreservedly follow the binding precedents and reduce unwarranted litigation.

5. Strict time limits for adjudicating cases/deciding appeals:- The government should also come up with statutory time limits for adjudicating show cause notice. At present, there is no time limit specified for adjudicating show cause notice and it is common phenomenon of the revenue department to keep cases pending for long durations. Moreover, the time limit for deciding appeals by Commissioner (Appeals) is optional as six months from the date of filing of appeal. Likewise, the Tribunal, if possible is recommended to decide appeal within a period of 3 years from the date on which appeal is filed. It is humble request that mandatory time limits should be specified for deciding the cases so that litigations are reduced speedily. Moreover, with the time boundaries, the government may develop efficient infrastructure for Tribunals.

6. Single rate of tax:- The bifurcation of tax rates into basic rates, Education cess and Secondary & Higher Education cess should be dispensed with. This will help reduce the litigations regarding adjustments among different heads and will do away with the tedious job of maintaining separate balances of different types of duties. The tax rate should be unified comprising all kind of cess or surcharge and should be uniformly applied. Also the slabs of rates should be eliminated. This change is expected in the upcoming GST bill also. The Government can further allocate the funds as required by them.

7. Hike in threshold exemption limits:- Trade and industry have been expecting increase in the basic exemption limits both in excise and the service tax. The present limits have been not changed in contrast to the growth and inflation levels in the manufacturing and service sectors. Even the BJP Manifesto declared that the exemption limit will be increased but it has not been done so far.

8. Benefit of duty deposition in next month should be extended for month of March:- The assessee should be allowed to pay tax for the month of March upto 6th of the next month as applicable for other months because payment of tax for the month of March by 31st March poses lot of problems in determining the exact liability with the result that the assessee ends up with either excess payment or short payment.

The above mentioned suggestions are just a part of what the assessees expect at large. Thus the department and the government are both expected to consider the issues of trade and industry because it is what forms the crux of the economy and its ease and comfort should be a priority concern of the budget.

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  1. P.K.PATHAK says:

    Dear Sir,
    The Govt.has allowed manufacturer to pay duty on monthly basis and send his final product without payment of duty, mentioning duty payable. But for weightment of final product he has to apply for permission from the Asstt/Deputy Commissioner.The challan on which the material are being sent to Dharamkata requires pre-authentication from Superintendent/Inspector.The monthly/Quarterly/Annual return like ER-4, 5,6 7 are of no use no case has been booked on the basis of these returns these should be discontinued.

  2. Ashok Aggarwal says:

    In addition to the points raised in the article, I wish to add one more point on Interest on refunds. The rate of interest for recovery of govt dues is raised to 18% pa but the rate for interest on refunds is still @ 6% pa. Moreover the interest is recovered from the 1st day of the month succeeding the date of payment of duty but interest is paid on refunds from expiry of three months from the date of filing of refund and it is a nightmare to get the interest from the department. Hence it is suggested that the interest should be paid at the same rate of 18% or at least 12% and from the date of payment of duty claimed to be refunded. The interest should necessarily be paid along with interest like in cases of Direct tax. Responsibility should be fixed for non-payment of interest along with refund.

    For ensuring judicious discipline, a mechanism should be in place to make the persons accountable for ignoring the judgments of higher fora on same issue unless there is another judgment of same level or higher level forum on the same issue. The officials taking decisions should also be adequately protected from being harassed or prosecuted by other agencies like audit, DGRI, CBI etc.

  3. Ashok Aggarwal says:

    People of India have elected BJP Government showing faith in Mr Narendra Modi with very high hopes to get rid of the complicated rules, procedures and red tape. It is also true that our beloved PM has been working very hard to bring the country out of the mess but there appears no change at the grass root level. Unreasonable orders against assessees are still being passed on issues already settled at HC or SC levels. Refunds are still being withheld, assessment against duty free licenses being denied and manufacturers are being coerced to pay duty through PLA despite having Cenvat credit to show higher revenue collection. Government needs to look into these avoidable irritants immediately before it is too late & the euphoria is faded. Once people lose faith in present Government, it will be very difficult to revive the same.

  4. VENKAT says:

    ‘E’ Mantra to be followed:

    mutual funds ask for validation of change of address even though PAN is same.
    PAn card should also contain address to avoid tis

  5. Varaprasad Daitha says:

    Safe Drinking Water :

    It is the duty of every government to ensure provision of safe drinking water. It appears that the governments are not working in this regard. Now a days people are spending anything between Rs.15 to R.20 for a liter of so called mineral water. God knows how much purity content is there. But the governments are levying huge taxes on such packed water. Can’t our FM waive all taxes on safe drinking water or he may consider to levy just one rupee on such bottles as a token of tax to have control on such water sources. It is also the duty of the governments to encourage industries to promote supply of real RO purified water. The AP state government is proposing to supply RO purified water at the rate of Rs.2 per 20 liters.

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