30 September 2016

SC on Service Tax Audit

Apex Court stays Delhi HC's judgment of 'Mega Cabs' on service tax audit
September 30, 2016[2016] 73 taxmann.com 402 (SC)

Service Tax : Judgment of Delhi High Court quashing rule 5A(2) of Service Tax Rules, 1994 and holding service tax audits as invalid, has been stayed by Supreme Court; hence, for time being, service tax audits may continue


[2016] 73 taxmann.com 402 (SC)


Union of India


Mega Cabs (P.) Ltd.


Petition(s) for Special Leave to
Appeal (C) no(S). 26675 of 2016

SEPTEMBER  26, 2016 

Rule 5A , read with rule 5 of the Service Tax Rules, 1994 and sections 72, 72A, 73, 82 and 94(2)(k) of the Finance Act, 1994 - Audit - Service Tax - Submission of Records - Rule 5A(2) was amended w.e.f. 5-12-2014 authorising officers of Service Tax Department or audit party to seek production of documents on demand and Circulars 181/7/2014-ST and Circular 995/2/2015-CX were issued power of audit and audit norms - Assessee challenged said rule and Circulars on ground that there is no power of audit with service tax authorities and only audit under Section 72A can be conducted by Chartered/Cost Accountants - High Court held that : (A) there is no general power with service tax authorities to conduct audit; (B) word 'verify' in section 94(2)(k) empowers verification of records and does not empower 'audit' of records, as audit is an specialized function and cannot be entrusted to any and every officer of department; (C) moreover, 'records' would mean 'records' required to be kept under rule 5(2), therefore, rule 5A(2) requiring even furnishing of 'audit reports' exceeds mandate of 'records'; and (D) hence, Rule 5A(2) and two Circulars were ultra vires and quashed - On Revenue's Special Leave Petition before Supreme Court - HELD : Notice be issued in petition - In meanwhile, there shall be a stay of operation of judgment of High Court. [Para 3] [Partly in favour of Revenue]

Circulars and Notifications : Notification No. 23/2014-ST, dated 5-12-2014, Circular No. 181/7/2014-ST dated 10-12-2014, Circular No. 995/2/2015-CX dated 27th February 2015



Mega Cabs (P.) Ltd. v. Union of India [2016] 70 taxmann.com 51 (Delhi) - stayed.

Mukul Rohatgi, AG, Rupesh Kumar, Subash C. Acharya, Ms. Diksha Rai, Nikhil Rohatgi, Mohit Khubchandani, Advs. and B. Krishna Prasad, AOR for the Petitioner. J.K. Mittal, Rajveer Singh, Advs. and Praveen Swarup, AOR for the Respondent.



Issue notice.

Mr. J.K. Mittal, learned counsel accepts notice on behalf of the sole respondent.

In the meanwhile, there shall be a stay of the operation of the impugned judgment and order dated 3.6.2016 passed by the High Court in Writ Petition(C) No.5192 of 2015.

Tag with Special Leave Petition (Civil) No.34872 of 2014

13 September 2016

GST Council

Press Information Bureau
Government of India
Ministry of Finance
12-September-2016 19:01 IST
Cabinet approves creation of GST Council and its Secretariat ; First Meeting of the GST Council to be held on 22nd and 23rd September, 2016 in national Capital.

The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services Tax (GST) in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016.

As per Article 279A of the amended Constitution, the GST Council will be a joint forum of the Centre and the States. This Council shall consist of the following members namely: -

a) Union Finance Minister… Chairperson

b) The Union Minister of State, in-charge of Revenue of finance… Member

c) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government… Members

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

The Union Cabinet in its meeting held on 12th September, 2016 approved setting-up of GST Council and setting-up of its Secretariat. The Cabinet inter alia took decisions for the following:

(a) Creation of the GST Council as per Article 279A of the amended Constitution;

(b) Creation of the GST Council Secretariat, with its office at New Delhi;

(c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;

(d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;

(e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).

The Cabinet also decided to provide for adequate funds for meeting the recurring and non recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments.

The Finance Minister Shri Arun Jaitley has also decided to call the First Meeting of the GST Council on 22nd and 23rd September 2016 in New Delhi. It is a matter of satisfaction for the Government that the steps required in the direction of implementation of GST are being taken ahead of the schedule so far.

09 September 2016

CBDT extends 30st September-2016 Returns Filing Due Date to 17th October-2016

Dear Sir / Madam,

CBDT extends 30st September-2016 Returns Filing Due Date to 17th October-2016

Order Under section 119 of the Income tax Act 1961

The last date for making declaration under the income Declaration scheme 2106 is 30th September which coincides with the last date of filling income tax by the tax payers whose accounts are audited and who are required to furnish the returns of income tax for assessment year 2016-2017 by 30th September, 2016 as per provisions of the section 139(1) of income tax Act,1961.

In order to remover inconvenience and to facilitate ease pf compliance, the Central board of Direct Taxes, in exercise of the powers conferred under section 119 of the income tax Act, 1961, hereby extends the due date for furnishing such returns of the income from 30th September, 2016 to 17th October 2016 in case of the tax payers through out India, who are liable to furnish their income tax return by the said due date 

Deepshikha Sharma
Director to the Government of India

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08 September 2016

GST Bill- President's Assent

Dear Professional Colleague,

GST Bill gets President's assent – Now becomes a law

The Government's plan to roll out Goods and Services Tax ("GST") from April 1, 2017, has moved an inched closer to the reality with the Hon'ble President Shri. Pranab Mukherjee signing the Government's flagship Constitution (122nd Amendment) Bill, 2014 on GST ("GST Bill"), just a while ago. The much-awaited GST now becomes a law with President signing the GST Bill after more than 16 States (BJP-ruled Assam being the first one) ratified it.

After being assented by the President, the GST Bill will be enacted as the Constitution (101st  Amendment) Act, 2016, to pave the way for much-awaited roll out of the landmark tax reform that will create a common national market of 1.25 billion people. GST, the biggest indirect tax reform since independence, is aimed at dismantling Inter-State barriers to trade in goods and services by subsuming a slew of around 17 indirect taxes viz. Excise Duty, Service Tax, VAT, CST, Luxury tax, Entertainment Tax, Entry Tax, etc.

Earlier, the Rajya Sabha has unanimously passed the ambitious GST Bill, as amended with over 2/3 majority on August 3, 2016, followed by its approval by the Lok Sabha on August 8, 2016. The key to forging consensus was the amendments the National Democratic Alliance (NDA) effected in the GST Bill, which importantly included dropping of 1% additional tax on Inter-State sale of goods and a definite provision in the statute for 100% compensating the States for any revenue loss for 5 years, amongst others.

With the President giving his assent to the GST Bill, a GST Council will be set up within 60 days of the enactment of the GST Bill, comprising the Union Finance Minister as Chairman, MOS–Revenue/ Finance and State Finance Ministers as Members of the GST Council, which will make important recommendations on GST rates, Common list of Exempted goods and services, dual control & adjudication, subsumation of surcharge and cesses, etc.Thereafter, following legislations—Central GST (CGST) and Integrated GST (IGST) will have to be passed by Parliament and a State GST (SGST) legislation by each of the State Legislatures.

The States and the Centre are working overtime and talking to stakeholders to draft the CGST, SGST and IGST laws, which are to be passed in the Winter Session of Parliament in November this year. Today is indeed a landmark day for the economy.

05 September 2016

CBDT Circular on Foreign Shipping Companies

Streamlining the process of No Objection Certificate (NOC), Port Clearance Certificate (PCC), voyage return and voyage assessment in the case of Foreign Shipping Companies (FSCs)

The CBDT vide Circular No. 30/2016 dt. 26 Aug. 2016 has streamlined the process for 'Port Clearance/ No Objection Certificates and Voyage Return/ Assessment' in the case of Foreign Shipping Companies.
CBDT has received representations regarding procedural difficulties faced by foreign shipping companies in issuance of Port Clearance Certificate (PCC) required as per S. 172 of Income-tax Act, 1961, i.e. a self contained code for assessment of shipping business of non residents.
it has been represented by the FSCs before the CBDT that no uniform practice is being followed by the port Assessing Officers in giving NOC for each voyage and also in making the voyage assessment in this regard. Further it is represented that at some of the ports, annual NOC issued by the jurisdictional AO is being honoured and port clearance and voyage return assessment are being done in a routine manner; whereas at some other ports, the port Assessing officers are not honouring the annual NOC and are still insisting for documentation such as submission of tax residency certificate, proof of effective management etc before the NOC leading to the port clearance is issued. It has been represented that in these cases, the insistence on filing details is leading to duplication of work as these documents have already been filed before and verified by the jurisdictional AO at the time of issue of annual NOC. It has also been stated that the procedure of obtaining NOC from the officer having jurisdiction over the port creates logistical difficulties for FSCs as the Port assessing officer is normally situated at a considerable distance from the jurisdictional AO.
The matter has been examined by the CBDT and requisite guidelines have been issued for streamlining the processes. For details, please refer the CBDT Circular below:
CBDT Circular No. 30/2016 dt. 26 Aug. 2016

Form 15G-H -Date Extended

CBDT extends due date for quarterly furnishing/ uploading of 15G/ 15H declarations

The due date for quarterly furnishing of 15G/ 15H declarations received by the payer from 1 April, 2016 onwards and the manner for dealing with Form 15G/15H received by the payer during the period from 1 Oct. 2015 to 31 Mar. has already been specified by CBDT in Notification No.9/2016 dated 9 June 2016.
The CBDT has extended the due dates for uploading of Form 15G/ 15H received during the period 1 Oct. 2015 to 31 Mar. 2016 and also for the period from 1 April 2016 onwards, based on representations of stakeholders. as under:
Sl. No
Original Due Date
Extended Due Date
Form 15G /H received during the period from 1.10.2015 to 31.3.2016
Form 15G/15H declarations received during the period from 1.4.2016 to 30.6.2016
Form 15G/15H declarations received during the period from 1.7.2016 to 30.9.2016
However, the due dates for furnishing of 15G/ 15H declarations for the quarter ending Dec. 2016 and Mar. 2017 (FY 2016-17) will remain the same as specified in the Notification No.9/2016 dated 9 June 2016.

Government issues Clarifications IDS2016

Government issues Clarifications in the form of Sixth Set of Frequently Asked Questions (FAQs) relating to Income Declaration Scheme 2016

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