Submitted By : MMS-A 2018-20

Shubham Agarwal – 01
Aditi Dharampuriya – 11
Bharat Jaju – 21
Ujala Kumari – 31
Supriya Tanwar – 41
Ashmita Sharma - 51
Increase custom duty on imported TV, AC, refrigerators, washing
machines: CEAMA
Date: 25th January 2019
Source: Livemint.com

News in brief:
• The Consumer Electronics and Appliances Manufacturers Association (CEAMA) urged the
government to raise customs duties on imported finished goods such as TV, AC, refrigerators
and washing machines while lowering the same on components in order to promote domestic
manufacturing ahead of the interim-Budget.
• CEAMA also called for a reduction in BCD on critical components such as compressors,
open cell and display panel used by the industry to 5 per cent from the existing 10 per cent, to
boost domestic manufacturing.
• It has also asked for subsidies on locally manufactured products, which "will act as a
stimulus" for the development of the components manufacturing base and boost 'make-in-
India' initiatives.
• According to CEAMA, the industry, which is struggling for growth for the past two years,
largely imports critical components such as open cells, display panels and compressors and
China alone contributed 59 per cent in that.

• "Even though the consumer demand may have grown over the years, local manufacturing
has not been able to keep pace with growing consumer demand. When it comes to
components, China enjoys the advantage of scale which has led to their exports as well
much to the disadvantage of Indian manufacturers," said CEAMA.
Some components are still not manufactured in India, as it is cheaper to import as factors
such as "high cost of investment, infrastructure and logistics" are acting as deterrents for
investors.
Our Understanding
• Customs Duty is a tax imposed on imports and exports of goods.
The rates of customs duties are either specific or on ad valorem basis, that is, it is based on
the value of goods.
Import duties are generally of the following types: 1. Basic duty; 2. Additional Customs
duty; 3. True Countervailing duty or additional duty of customs; 4. Anti-dumping
duty/Safeguard duty.
While revenue is a paramount consideration, Customs duties may also be levied to protect
the domestic industry from foreign competition.
• According to the industry body, contrary to the 'net zero import in electronics' objective of
the government, finished goods are often imported at a lower duty than parts in the country,
on account of various free-trade agreements. Hence increase in custom duties of electronic
products would discourage imports.
• Reduction in custom duties would help local manufacturers produce goods at competitive
prices and promote exports as well with tax benefits on exports of ACE goods.
Impact
• Indian appliance and consumer electronics (ACE) market is expected to increase at
a 9 per cent CAGR to reach Rs 3.15 trillion (US$ 48.37 billion) in 2022.
• Demand growth is likely to accelerate with rising disposable incomes and easy
access to credit. Increasing electrification of rural areas and wide usability of
online sales would also aid growth in demand.
• The Government of India has taken various initiatives like allowing 100 per cent
Foreign Direct Investment (FDI) under the automatic route in Electronics Systems
Design & Manufacturing sector.
• Such initiatives will boost domestic production of electronic products thereby
promoting exports and hike in custom duty of imported consumer electronics
would discourage imports of these products.
 Soon, no e-way bill if GST returns not filed
for 6 months
Date: 21st January 2019
Source of News: Business Standard

• The e-way bill system was rolled out on April 1, 2018, for moving
goods worth over Rs 50,000 from one state to another.
• Central tax officers have detected 3,626 cases of GST
evasion/violations cases, involving Rs 15,278.18 crore in April-
December period.
• To increase revenue and compliance, stringent anti-evasion
measure have to be put in place.
 GST collection for FY 2018-2019
Amount Collected
S.No. Year Month (In Crore's)
1 2018 April 1,03,458
2 2018 May 94,016
3 2018 June 95,610
4 2018 July 96,500
5 2018 August 93,960
6 2018 September 94,442
7 2018 October 1,00,710
8 2018 November 97,637
9 2018 December 94,700
Understanding
• GST collections have so far this fiscal averaged Rs 96,800 crore per
month, As against the budgeted monthly revenue target of over Rs 1
lakh crore.
• The GST Network (GSTN) is developing an information technology
system that would debar businesses, which have not filed returns for
two cycles (six months).
• Transporters are doing multiple trips by generating a single e-way bill.
• The revenue department is working towards integrating that e-way
bill system with NHAI's FASTag mechanism to help track movement of
goods.
 GST gets its first dispute resolution tribunal
Date: 24th January 2019
Source : Business Standard, Page no.4

News in Brief & Highlights:

 The Union Cabinet on Wednesday approved a proposal to set up a
national bench of the goods and service tax(GST) appellate tribunal
(GSTAT) in Delhi.
 The apex appellate tribunal would deal with disputes between GST
taxpayers and tax authorities predominantly arising out of the “Place
of supply” issue.
 GST council had approved setting up one national and three regional
benches of the appellate tribunal (GSTAT).
GSTAT would act as the first common forum of dispute resolution
between centre and states .
Taxpayers issues other than those pertaining to place of supply or
likely to come in the jurisdiction of regional and state benches of the
appellate tribunal.
According to the Central GST(CGST) act, the GSTAT would come
into play when an aggrieved company (GST taxpayer) appeals against
an order passed by an appellate or revisional authority in cases where
one of the issues of contention pertains to the “place of supply”.
Section 109 of the CGST Act mandates the formation of such a
tribunal with a national bench and three regional benches, along with
state benches and area benches for regions within states.
The National bench would have three members, a president assisted by
two technical members, one representing the centre and other
representing states.
 Place of Supply

Place of Supply : It is the registered location of recipient of a

good or service.
Since GST is a destination based tax, this means that the
goods/services will be taxed at the place where they are
consumed and not at the origin. So the state where they are
consumed will have the right to collect GST. There are two
locations, location of supplier and place of supply that are needed
to determine GST:
• If the location of supplier and place of supply is in the same state
• If the location of supplier and place of supply is in two different states
• In case the buyer(export) or supplier(import) is a foreign entity
• Transfer of stock between two branches of a business that are located in two
different states
Place of supply issue becomes critical, especially in case of
services by a company having presence in two or more states, or
in the case of imports and exports.
 Remarks

Currently, disputes between tax authorities and taxpayers are handled

by the commissioner Appeals in respective states. This will give a
platform for second appeal whereas the GSTAT will give a platform for
the first appeal.
The dispute resolution forum would be extremely crucial in the coming
months as several states may end up fighting among themselves and
with central government over indirect tax revenues.
This would be the forum of second appeal in the GST regime. While
typically not many litigations should have been adjudicated still, early
formation of this appellate authority would help prevent any
unwarranted delays in adjudication of appeals to be filed in the future.
Direct taxes to exceed target of Rs 11.5 trillion in 2018-19: CBDT
chairman
Date: 25th January 2019

Source of News: Business Standard

News in brief:-
• In 2017-2018 , the revised estimate was higher than the budget estimate by 2.6% , The
government will exceed the direct tax target of Rs 11.5 trillion in the financial year 2018-
19, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra said on Friday.

• This will either help the government in restricting fiscal deficit to 3.3 per cent of the
gross domestic product (GDP) as planned or assist in reducing fiscal slippage, in case that
happens.
• Revenue from direct taxes has assumed great importance due to a shortfall in goods
and services tax (GST) collection. With three months remaining in this financial year,
about Rs 3.5 trillion of Rs 6.04 trillion, or only 60 per cent of annual GST target,
stands collected.
• This has made enhanced revenue mop up from sources other than GST essential
for restricting the fiscal deficit. Past data shows the government’s performance in
meeting Budget target for direct taxes has been improving. In 2014-15, the first year
of the Narendra Modi-led National Democratic Alliance government, the
actual direct tax collection went 5.5 per cent below the target.
• It worsened in 2015-16, with the actual collection 7 per cent below target. The
actual collection was almost equal to the Budget estimate in 2016-17, the
demonetisation year. Part of it was contributed by the Income Declaration Scheme
2016, the CBDT had said earlier.
• In 2017-18, the revised estimate was higher than the Budget Estimate by 2.6 per cent. However,
the growth in net direct tax collection slowed down in April-December 2018-19, at 13.6 per cent
over the previous year, compared to 18.2 per cent in April-December 2017-18. Corporate income
taxes grew 16 per cent, while personal income tax collection grew 14.8 per cent in April-
December 2018-19.
Remarks:-
• According to the Economic Survey 2017-18, the base of indirect tax payer has
increased substantially by more than 50% after the implementation of GST, thus, it can
be said that GST has transformed the business environment in India in a singular
manner.
• Though GST is an indirect tax, yet it has significantly impacted the contribution of
direct taxes too in the overall tax revenue of government. As per the CBDT statement
dated April 2, 2018, the provisional direct tax collections for financial year 2017-18 is
Rs. 9.95 lakh crore which is 17.1 percent higher than the net collections for FY 2016-17.
• The budgeted revenue from direct taxes for the financial year 2018-19 is
approximately 51% of total revenue of the government. Though this trend has almost
been similar from the last couple of years, but the budgeted growth in collection from
personal taxes is almost double of the growth rate expected from corporate taxes.
• The increase in direct tax collections could be attributed to intensive data analysis by
the government. to check the tax evasion and GST
Simplicity, uniformity take a back seat amid frequent tweaks in GST
Date: 23rd January 2019 | Source of News: Mint, Page No. 16
News in brief:
• About 18 months after rolling out the GST, the biggest tax reform in India since independence is still in a fluid state
of continuous change as businesses, especially the small ones, struggle to cope with the rigors of a technology-
driven and transparent tax system.

• Some of the concessions to small businesses announced earlier this month by federal indirect tax body, the GST
Council, ahead of parliamentary polls due by April-May, raise fears about sacrificing some of the basic design
advantages of GST over the previous regime— simplicity and uniformity.

• The changes imply that policymakers are still struggling to make the reform acceptable to a large number of small
taxpayers without a backlash in a market where the culture of tax evasion is rampant.

• The GST Council at its last meeting on 10 January decided to let states choose between two possible criteria—₹20
lakh or ₹40 lakh annual sales—for businesses to get GST registration as it could not arrive at a consensus on
doubling the current threshold level to ₹40 lakh for all.

• In the first case of introducing a state-specific cess to mobilize funds for reconstruction after a calamity, the Council
allowed Kerala to levy a 1% additional tax on supplies within the state. Considering floods, cyclones, landslides and
draught that occur in different parts of the country from time to time, this could set a precedent for other states to
go for similar levies in addition to GST with the permission of the Council.
 GST Achievements Relief and Compromises
Tax cuts for consumers Suspension of invoice matching
Actual tax on items visible to buyers. Not forcing large firms to be responsible
for tax compliance of unregistered
vendors.
Removal of tax on tax Annual return filing and quarterly
payments for composition dealers.
Dismantling of border check-posts, saves State-specific GST registration criteria.
shipment time.
3.4 million New firms in indirect tax net. Composition scheme eligibility widened
to ₹1.5 crore sales.
Collapse of 17 taxes into one. Flat tax scheme for small service
providers.
Remarks:
GST has improved transparency in the tax system and reduced the tax incidence on a host of products and services.
This, despite the fact that the administration is not on a tax enforcement drive.

• Having two state-specific turnover threshold limits can shake the foundations of GST. One can only hope that local
businesses will put pressure on those states that refuse to raise the threshold, to eventually raise it to ₹40 lakh and
bring it at par with the other states.

• Kerala, which is recovering from the worst floods in a century that submerged large parts of the state last year, will
opt to retain ₹20 lakh annual sales threshold for GST registration, while Delhi, Jammu and Kashmir, and Assam have
opted for ₹40 lakh.

• When there are different legal provisions in different states, uniformity takes a hit which is a step backwards. This
could also encourage some units to move to other states for staying out of tax net, the kind of distortions India tried
to address with the tax reform.

• Though the cess is for a noble cause and for a limited period of up to two years in the case of Kerala, it dilutes the
concept of ‘one nation, one tax’. Businesses have to make changes in their IT systems and in invoicing.

• These changes follow either suspension or dilution of some of GST’s anti-evasion features that businesses claimed
were onerous. These include a provision for matching the invoices of suppliers and buyers and making large
businesses responsible for collecting and paying taxes on behalf of unregistered vendors.
Cabinet approves setting up of a centralised GST Appellate
Authority
 The Union Cabinet on Wednesday approved setting up of a centralised
Appellate Authority for Advance Ruling (AAAR) under the Goods and
Service Tax that would decide on cases where there are divergent orders at
the state level.
 The Goods and Service Tax(GST) Council, headed by Finance Minister Arun
Jaitley, and comprising state counterparts, in December decided to establish
the centralised AAAR.
 The setting up of a centralised AAAR would require amendments to the GST
Acts.
 Our Understanding

• The Centralised authority as an appellate body will only take up cases and
decide on cases wherein the Authority for Advance Ruling (AAR) of two
states have passed divergent orders at the state level.
• Reconciling the contradictory verdicts of different AARs to avoid the
confusion created by contradictory rulings given by different AARs on the
same or similar issues is the main agenda of AAAR.
• Being a common forum, GST Appellate Tribunal will ensure that there is
uniformity in redressal of disputes arising under GST, and therefore, in
implementation of GST across the country.
 PAST CASES EXAMPLES
• There have been situations where the ruling differs from what the law states.
“In case of West Bengal AAR it was held that marketing services provided
to foreign universities does not qualify as export. It is an intermediary
service and therefore GST should be levied. However, as per place of
supply provisions and other criteria, it seemed to meet the requirements for
qualifying as an export.
• In another case, Maharashtra AAR held that solar procurement and
installation contracts will attract 18% GST, while Karnataka AAR ruled a
5% GST rate," said Archit Gupta, founder and chief executive of ClearTax.
Thank You !