Full Text Of Representation Made By The AIFTP On Reforms To Direct Tax Laws & GST

It was reported earlier that the AIFTP had a meeting with the Revenue Secretary Dr. Hasmukh Adhia and the CBDT Chairman Shri Sushil Chandra. The Tax Bar had offered valuable suggestions on reforms to the tax laws.

For the benefit of the taxpayers and professionals, the full text of the representations made are reproduced below:

Representation regarding reforms to Direct Taxes

December 14, 2017
To
Hon’ble Finance Secretary,
Government of India

Sub.:- Proposal on Direct Taxes

Hon’ble Sir,

We thank you very much for giving us an opportunity of presenting before your honour, the view of the All India Federation of Tax Practitioners on proposal on Direct Taxes.

Sir, we have divided our representation in three parts i.e. (I) Conceptual; (II) Appeals and (III) Specific. We seek liberty to submit the third part (III) in due course.

Detailed representation is enclosed herewith.

We shall be grateful if we are given an opportunity to explain our views personally before your goodself or any other officer, so as to clarify issues touching upon the subject matter.

For All India Federation of Tax Practitioners

Prem Lata Bansal, Sr. Advocate, National President
Narayan P. Jain, Advocate, Chairman, L&R Com
Dr. K. Shivaram, Sr. Advocate, Past President
Vipul B. Joshi, Advocate, Hon. Treasurer

ALL INDIA FEDERATION OF TAX PRACTITIONERS

(I) CONCEPTUAL

1. Accountability in tax administration

Due to lack of accountability on the part of Assessing Officers, it is common to find additions being made for name sakeknowing well that they may not withstand judicial scrutiny.

In order to keep a check on such frivolous additions, Dr. Raja J. Chelliah, in his report [(1992) 197 ITR 177 (St) (257) Para 5.9] suggested that ways must be found to hold the Assessing Officers accountable for kinds of assessments they make. He suggested as follows:

“The Assessing Officers should be made accountable for their actions by being blamed for raising demands which are not up held by a reasonable figure, say 50 percent, the officer should be given a black mark and reprimanded. On the other hand an Assessing Officer should be protected and defended if he has observed instructions of the Board and followed the Court rulings even though audit might raise objections about his actions.”

Bringing in accountability in the tax administration is the first step in reducing avoidable litigation and would benefit honest tax payers of the country.

2. E-bench of Supreme Court can be an effective alternative for having four regional benches of Apex Court. E-Bench of Apex Court will help render speedy justice to the litigants thereby saving huge cost incurred on travelling back and forth to New Delhi

The All India Federation of Tax Practitioners (the “Federation”) has been making representations to the Government of India from time to time to constitute four Benches of Apex Court in different regions. Even the Parliamentary Committee, relying on Article 130 of the Constitution, which reads as under; “The Supreme Court shall sit in Delhi or in such other place or places, as the Chief Justice of India, may with the approval of the President, from time to time, appoint”, had asked the Union Government to persuade the Supreme Court to set up its benches in three distant regions (Times of India, Friday, 26-May-2000). Sir, Hon’ble Dr. Manmohan Singh, the then Leader of Opposition (Rajya Sabha) in his letter dated 22-10-2002 had also endorsed the view in favour of establishment of Benches of Supreme Court. The Bar Council of Maharashtra & Goa vide letter dated 11/4/2000 also endorsed the view of the Federation. However, a full Bench of the Apex Court was not in favour of having benches of Supreme Court in different regions. We desire that the Government takes up this issue once again with the Apex Court.

A common man of our country cannot even think of approaching the Apex Court for justice as it is beyond his reach. Shri Ashok H. Desai, Sr. Advocate and former Attorney General of India, in his speech stated that every adjournment in Supreme Court costs the litigant a minimum of about 1 lakh rupees. If this is the minimum cost for an adjournment, one can imagine how expensive it would be for the citizens to approach the Supreme Court for justice. It may be desirable to have four benches of the Supreme Court in different parts of our country.

In case this proposal, though beneficial to large masses in the country, is not found viable for any reason, one of the alternatives could be to have an e-bench of the Supreme Court. The hearing of the matter before the Apex Court can be done by linking various High courts and affording facilities for arguing the matter before the Apex Court from the respective High Courts. An e-bench of the Supreme Court can take up state wise matters, e.g. One day could be for matters of Mumbai, another day could be for matters from Chennai or other places, etc. Initially, an option may be given to the parties to hear the matters through e-Bench or regular Bench.

The Income-tax Appellate Tribunal has started the e-Court at Mumbai through which the matters of Nagpur are heard by members sitting at Mumbai. The experience has been very satisfactory and both the tax payers and the Department have found the functioning of this bench satisfactory. The e-Bench of Supreme Court may initially be started with SLP, relating to direct and indirect tax matters. One Court room from respective High Court may be converted in to an E-Court.

3. Monitoring tax appeals – National tax litigation Cell

Though the I.T. Department is the single biggest litigant in the higher judiciary across India, it appears that the Income-tax Department does not have a centralized wing to effectively monitor its appeals from the stage of inception until its final disposal. It is advisable for the Department to have an independent National Tax Litigation Cell to monitor the tax appeals before various High Courts and Apex Court. This will help the Department for quantitative and qualitative disposal.

4. Acceptance of orders of High Courts

In the earlier days, whenever the Department would accept a decision of a particular High Court on interpretation of law, the Central Board of Direct taxes used to issue a circular stating that interpretation has been accepted. This practice seems to have been discontinued now. If this process is adopted and instructions /circular are published, the litigation will be reduced considerably. Hon’ble Bombay High Court in CIT v. TCL Ltd. (2016) 241 Taxman 138 (Bom.)(HC) has passed a detailed order asking the Chief Commissioner of Income tax to host details of the matters admitted before the Bombay High Court, matters accepted by the Revenue, etc. online. Though the assurance was given by filing an affidavit, however, no action seems to have been taken by the tax administrative authorities in this regard.

5. Setting up of special courts to deal with prosecution in relation to Direct and Indirect taxes

Under the present system, it takes more than 20 years to decide prosecution matters relating to Direct Taxes. Hence, the deterrent provisions fail to achieve the desired object due to the delay in disposal of cases by the trial courts. Income-tax being a specialized subject, the prosecution carry may be heard by a special court of two judges, similar to the Tribunal, and, thereafter, an appeal may lie directly to the Jurisdictional High Court. This will help in speedy disposal of matters. In fact, speedy prosecution will have great determent effect.

6. Mechanism to discuss and take action on suggestions made by the Apex Court, High Courts and other Judicial authorities

It has been observed that various High Courts make several recommendations to CBDT to look into certain matters and take appropriate measures. However, it appears, there is no mechanism to find out whether the issue is actually brought to the notice of the Ministry concerned and what action has been taken. It is therefore, advisable to put up such suggestions on their website for public domain and after considering various suggestions, appropriate action can be taken. This will bring transparency in the functioning of the Ministry and will also bring accountability.

7. Return of income of Agricultural income

In case where a person is claiming to be earning only exempt income say, for example, agriculture income, and, the receipt is, say, for example, above Rs. 5 lacs, he may be asked to file returns which will enable the department to find out whether the income shown is of the exempt income or from any other undisclosed sources.

8. Settlement Commission : Transparency in appointment of Members of Settlement Commission – Professionals be appointed

Income-tax Settlement Commission which was established in the year 1976 to expeditiously settle disputes between the assessees and the Revenue. The Income-tax Settlement Commission (the “Commission”) is one of the most high-powered commissions under Direct Tax laws. Section 245B(3) of the Income-tax Act (the “Act”), in express terms, requires the Central Government to appoint the Chairman, Vice-Chairman and its other members “from amongst persons of integrity and outstanding ability, having special knowledge of, and, experience, in problems relating to direct taxes and business accounts”.

In its 40 years of existence, more than 140 members have been appointed to the Commission. Ironically, not a single professional has ever been appointed as its member. Till date, more than 35 Chairmen have been at its helm of which some did not get even one month to serve the Commission.

Unfortunately, at present, there is no transparency in appointment of the Members of Settlement Commission. Antithesis to this is the manner of appointment of Members of the Income-tax Appellate Tribunal (the “ITAT”). The applications for the posts of Members of the ITAT are invited from professionals and Commissioners of Income-tax who are selected by the committee headed by the senior most Judge of the Supreme Court, the Law Secretary and independent professionals (Additional Advocate General or member of the Law Commission) and the President of the ITAT.

Dr. Vijay Kelkar’s Committee recommended instituting transparent procedures for appointment of Members and Chairman of the Central Board of Direct taxes [(2012) 258 ITR (Journal) 1 (45)]. We are of the opinion that the appointment of Members of the Commission, being a quasi-judicial body, must be done in a manner as transparent as possible. This will help gain confidence of the taxpayers in this Institution.

The Federation conducted a survey on various issues – including the appointment of Members of the Commission – relating to tax administration, the findings of which were released at the 12th National Convention at Mumbai on 24-12-2012. (Souvenir, P. No. 149). 97% of the professionals surveyed opined that the Government should appoint at least few members from the profession. In order to achieve the desired end in settlement proceedings, it is imperative that the benches of the Commission consist of persons of diverse backgrounds. The ideal combination of a bench would be a Member each from the Department, law profession and accountancy profession. The Members should ideally have tenure of at least five years and the Chairman of at least two years, so that she or he can take important decisions relating to regulation of its procedures.

There ought to be a mechanism wherein, if a Member is found to be a person not of integrity, he or she should be removed promptly following due process of the law. As per the amended Service Rules applicable to the Members of the Customs, Excise and Service Tax Appellate Tribunal and the ITAT, a Member cannot practice before the same forum after retirement. The introduction of such a provision for the Members of the Commission would undoubtedly further elevate the stature of the Institution and should be deliberated upon. As a dutiful stakeholder in the effective functioning of the Commission, the Federation has earlier sent two representations to the Government on these issues, to which regrettably, the Government has neither responded nor taken any positive steps to address. We hope the Government gives due consideration to these germane concerns.

9. Advance Ruling for taxation – scope may be extended to Residents by giving power to Income Tax Appellate Tribunal

One of the very important provision in the Maharashtra VAT legislation is the provision for Advance Rulings on the interpretation of any provision of the Act, Rules or Notification in respect of a transaction proposed to be entered into by any registered dealer even though any such question relating to the said provision has not arisen in any proceedings. The Advance Ruling is given by the Bench consisting of three members of the Sales Tax Tribunal, senior Practitioner nominated by the President of the Tribunal and an officer of Sales Tax Department not below the rank of Jt. Commissioner nominated by the Commissioner of Sales Tax.

If similar provision is introduced in the Income tax Act, Central Excise, Customs & Service Tax, for all residents, litigation can be substantial reduced and tax payers will know the tax liability. I am of the view that the Income tax Appellate Tribunal is more competent to decide the issues relating to Advance Rulings. It is therefore, suggested that in respect of residents the power of authority for advance rulings may be given to the Income tax Appellate Tribunal.

10. Major Amendments in Tax Laws should be made only once in five Years

The Finance Bill of each year should lay down the rates of tax and urgent clarifications or simplification. But major amendments should be made only once in five years. This will make for stability in tax laws.

11. Independent Committee to suggest amendments in Tax Laws

An independent Committee consisting of representatives from profession, tax administration, taxpayers, judiciary, etc. ongoing basis may scrutinise suggestions received from various bodies. After examining in detail, they may suggest amendments which should be made public and debated. If this process is followed we are sure 90% of litigation will be reduced automatically.

12. Arbitration in tax matters (Lok Adalat)

The Government may consider the proposal of constituting a committee consisting of representatives from legal and accountancy profession and from the tax department of the rank of Principle Chief Commissioner of Income-tax for arbitration in tax matters. The assessee may refer the matter to such committee within 30 days of receipt of the order from the assessing officer and the committee should pass an order within six months from the receipt of application. The order passed by such committee may be made binding on both the parties. To begin with the matters like technical defaults, refunds, etc. may be referred for resolution. The concept of Lok Adalat may be introduced. The Government may consider the services of retired members of Tribunal. The proposal will benefit the tax payers as well as the tax department.

13. Instructions and statements

All Instructions may be made available to the public. In search cases, the appraisal report may also be made available to the assesses. As soon as statement of an assessee is taken in couse of search and survey, a copy thereof may be made available to the deponent. This will bring more transparency and also accountability.

14. Culture of tax service

Approach of tax officials must be changed from tax collector to tax service provider. If tax officials change their attitude towards the assessees and guide them and advise them to pay the taxes without over emphasising about technicalities, we are sure, many assessees will come forward and pay the taxes regularly. Chief Commissioners should call the assessees who are filing the returns are paying taxes, regularly to discuss the difficulties, if any, faced by them and try to solve the difficulties. If culture of tax service is introduced, the tax payer will react very positively and pay the taxes voluntarily without any motive to evade the tax.

Sir, wide publicity may be given to old Circular (XL-35) dt. 11-4-1955 dealing with refund and reliefs to Assessee which is still in force as many Assessing Officers are not aware about it resulting in unnecessary harassment and also it will create awareness among taxpayers about their rights. Said Circular may be may be pasted on Notice Board outside office of Assessing Officer.

15. Stamp Acts

For ease of doing business it may be necessary to bring uniformity in Stamp Act law of various States.

(II) APPEALS

1. Appeals to the Tribunal

There are a number of orders of the Commissioners of Income-tax against which no appeal can be filed. E.g. orders under section 264, 273A, waiver of interest charged under sections 234A, 234B, and 234C, orders under section 179, denial of approval u/s. 10(23C) and other approvals by Chief Commissioner, etc. The only remedy available to the taxpayer is to approach the Jurisdictional High Court in its writ jurisdiction. A simple amendment in the Income-tax Act may be made stating that all orders of the Chief Commissioner, Commissioner and Commissioner (Appeals) are appealable to the Tribunal. This would save substantial time of the higher judiciary and the taxpayers would get speedy justice from the Tribunal.

2. Single Member

i) As per section 253(3), a single member of the ITAT can decide the matter if the assessed income is up to Rs. 50 lakhs. However, in cases of penalties or interest, even if the amount in only Rs. 10,000/-, still it has to be decided by a division Bench. It is desired that an amendment may be made in the Act wherein, if the penalty or interest is up to Rs. 10 lakh, it may be decided by a single member of the ITAT, which will help in speedy disposal of the matters. It may also be considered that instead of assessed income the word the tax / penalty / interest in dispute is less than 20 lakhs, the same may be decided by the Single Member Bench.

ii) For appeals relating to tax deduction at source, if the amount of subject matter in dispute is less than Rs. 2 lakhs, the same may be heard by Single Member Bench.

iii) Sometimes even in cases where the loss assessed is more than Rs. 50 lakhs is heard by single member Bench. The law may be amended so that, when the loss assessed is more than Rs. 50 lakhs, the matter may be referred to division Bench

3. Direct appeal to the Supreme Court to attain finality on important issues

Section 257 of the Income-tax Act provided for direct reference to Supreme Court under old provision of reference, which was applicable to orders passed before 1-10 1998. No such provision is incorporated after the insertion of section 260A. The Income-tax Appellate Tribunal refers the matters to a special bench when there is a conflicting decision of a co-ordinate bench. In the meantime one of the High Courts may have taken a contrary view. In such a case the decision of High Court will be binding. Though the Income–tax Act is an all India statute, the Tribunal sitting in a particular State is bound by the decision of respective High Court of a particular State. This brings uncertainty in tax law. To avoid all these controversies, the Tribunal may be given power to refer the matter to Supreme Court either on its own, or by an application made by the assessee or department. If this process is followed, there will be certainty in tax law which will also help to reduce pendency of cases before various High Courts and finality may be attained on some of the important issues within a reasonable time.

4. Appealable orders S. 246A

Every order passed by Income tax authority, i.e. Assessing Officer / tax recovery Officer, etc. which has the effect of adversely affecting an assessee in any manner may be made appealable before the Commissioner (Appeals)

5. S. 252(3): Appointment of President of ITAT

We are of the considered opinion that the President of the ITAT be appointed from amongst the Vice–Presidents. When an outsider is appointed as President of the ITAT for a tenure of less than 3 years, he may not be able to administer the various Benches which are functioning from 28 locations across the country.

6. S. 252A: Qualifications and conditions of Service of President, Vice–President and Member, read with section 245-OA of the Income –tax Act , 1961

The above provision was introduced by the Finance Act, 2017 which has come in to effect from 1-6-2017, may be deleted and the old provision may be continued and appointment of members of the ITAT on tenure basis may be dispensed with. Copy of detailed representation dated 3-5-2017 which was forwarded to Honourable Finance Minister is enclosed here with.

7. Order of Commissioner (Appeals)

There has to be time limit for sending remand report to the CIT(A). The CIT(A) may be directed to pass order with in prescribed time, from conclusion of the hearing, not later than 90 days from the end of the month of the hearing.

8. Appeal effects are not given in time

It is too difficult to get timely appeal effect, though section 153(2A) provides for the same. It is desired that there has to be internal reporting system to monitor whether appeal effect is given or not.

9. Proper monitoring of rectification application

There should be proper monitoring of all Rectification Applications filed. There should be proper reporting of the number of applications filed, disposed and pending disposal and concerned officer should be answerable for long pending rectifications.

10. Appeal to Supreme Court

For filing of appeals of revenue before Supreme Court the monetary limit tax may be increased from 25 lakhs to at least 50 lakhs

11. Prosecution and compounding fee

In number of matters, notices for prosecution are issued though the matters are pending before fist appellate authority and in some of the cases, even penalty appeals are pending before the Tribunal. This has resulted in unnecessary harassment to honest tax payers which may be avoided. Compounding Fee may be liberalised. The matters pending before the Courts, which are pending for more than 15 years, may be compounded by taking nominal compounding fees.

12. Tax Benches in High Courts

It may be noted that the pendency before ITAT is only 90000 appeals and the matters are heard within two years of filing of appeals and in some of the Benches within six months of filing of appeals. However, in some of the High Courts due to shortage of judges the tax matters are not heard within reasonable time. In cities like Mumbai for admission it takes more than three years and where as if admitted for final hearing it takes another 10 years. It is desired that where the tax litigation is more there has to be continuous tax Benches. If revenue prepares the list of pending cases which are admitted and to be admitted and the question of law involved, it may help quick disposal of pending matters before various Courts and also APEX Court. In tax matters it is the department which is always a party either as petitioner or respondent hence, it may be easy to prepare the list. Once the list is prepared it can be published in the website which can also help the assesses as well as the department. This project can be done with the Co–operation of the tax Bar of the respective State. All India Federation of Tax Practitioners, will be ready to help the tax administration if an opportunity is given to them.

Representations relating to GST

14th December, 2017

To,
The Hon’ble Finance Secretary
Government of India
Mumbai

Re: Interaction of Finance Secretary, GOI
on 14th December 2017

Sub: Suggestions for GST

Hon’ble Sir,

All India Federation of Tax Practitioners, having registered office in Mumbai, is a National Organization of Tax Professionals, namely, Advocates, Chartered Accounts and Tax Practitioners. We have successfully completed 41 years of service to the Tax Fraternity.

Prime object of the Federation is to resolve the problems faced by the Professionals as also public at large by making representations before appropriate authorities.

We are therefore happy to place before you some of the suggestions which we could instantly narrate for today’s meeting. We beg permission to allow us to give detailed further suggestions for the ensuing budget.

This letter gives suggestions for the Indirect Taxation specially GST Act.

1. As the Act is new, teething troubles were expected. We are happy that the Government is responsive to the issues faced by the Traders, Manufacturers and the Public at large. However, all these practical problems which are mainly system related have to be sorted out on war footing as the impact would be great on the dealers who may face the levy of interest and penalty. I give herein below only two examples

a) The Composition dealer who applied in time is facing problem for uploading his return as his GST profile is not showing him as composition dealer. He has not collected the tax as he has opted for composition. He is unable to file any return. GST helpdesk and email to GST Council give token id but no relief still available to the small traders.

b) A service provider was holding registration under the MVAT Act. The MVAT authorities wrongly cancelled the registration as there is no turnover under the MVAT Act. The Transition GST is granted on account of Service Tax Registration is also cancelled. With great difficulty the registration under the local Act is restored but the GST Portal does not allow transition restoration. It only shows system error. The taxable person in this case is in dilemma whether he can collect GST or not. The service recipient does not get benefit of ITC.

There are many such practical problems to which there is no answer with the helpdesk either with the SGST Commissioner or with the CGST Commissioner. The result is that there is more uproar for the issue which can be easily sorted out. It would be futile to approach GST Council for every such small practical problem. These are major irritants and the power must be given to SGST Commissioner or CGST Commissioner of the State to resolve them.

2. Refund to exporters:

Though promised by the Press Release of 29th November 2017, the refunds are still on hold causing great loss of liquid cash to the exporters. In many cases refund applications could not be up loaded. No clarity for export of tax free goods whether to be shown as with payment of IGST with Nil rated tax or without payment of IGST without LUT. These issues to be resolved immediately.

3. In the recent amendments the rate of tax on the hotels with the residential facility is linked to the declared tariff. The declared tariff of the hotels would vary with the seasons at least 3 times a year i.e. the declared tariff would be high in the peak seasons and would be substantially low during rainy season or non-peak seasons. It would be difficult for a hotelier to change the rate from 5% to 18% every time. It would be more difficult for him to claim the Input Tax Credit when he is liable for 18%. These are pure technical difficulties which the Council may not have foreseen.

Further , rate of tax on supply of food served in banquet hall by restaurant along with banquet where price is charged separately needs to be clarified

It is suggested to have uniform rate of tax on all such supply whether indoor or outdoor catering.

4. The goods imported for re-export should be allowed to import at NIL duty and IGST. DGFT has already devised a scheme like earlier Replenishment Scheme for Gems and Jewellery Sector. However, such provision or scheme must be available for all types of goods.

5. The high-sea-sales or the sale of goods while they are in Custom Bond is not subject to tax till it crosses custom frontier. The recent circular has complicated the issue by clarifying that ex bond transaction is taxable in the hands of importer as well as the recipient who has to pay duty with IGST as RCM. The provision ia very clear that all imports are taxable under RCM at the point of collection of duty. The course of import come to an end when goods are released by custom. Till such time all transactioms of suplly including high seas and ex bond are in the coirse of import and only last transaction should be taxable under RCM payable when goods are cleared for home conumption. This legal position must be specified / clarified in clear terms to avoid litigation and hardship.

6. Deemed export is zero rated i.e. supply to SEZ would be subject to tax. It is not clear whether IGST or SGST+CGST– depending upon the place of supply. In fact once a transaction is deemed as export it is to be given effect for all purpose of the act and to be treated at par with actual export So if the supplier opts to pay tax and claim refund it should with payment of IGST. This needs to be clarified.

7. IGST is payable on import of goods and it is being shown automatically when the Bill of Entry is generated. At times we have seen that there are disputes about the exact rate of tax. Especially when the Bill of Entry shows rate different from the rate shown on the CBEC website. There is no provision or the authority who can adjudicate such issues at the point of import. The suitable provision may be made in this respect.

Further, there are different rule to determine value for duty and GST. It is advisable to have uniform valuation for both.

8. The IGST is applicable when the place of supply and the location of supplier are in two different States. When place of suoply and location of supply is in same State or UT it is treated as intra State attracting SGST and CGST. There are provisions to decide the place of supply of goods as well as location of supplier of service ; however, precise rules are required to determine place from where the supply is made like Section 4 of the Central Sales Tax Act and location of supplier of goods. There is still some confusion when it comes to determine the exact place from where the supply is made. For example, if a registered person in Mumbai imports the goods at Kandla and supplies the same from Kandla, whether he is required to take registration in the State of Gujarat. Section 22(1) mandates the supplier to be registered in the State from where he makes taxable supply of goods and services. Which is the State from where he is making supply in the above example?.The specific provision defining the situs of supply is required to answer such questions.

9. Similar is the position regarding a transaction where the two registered persons situated in India (whether same State or different States) sells the goods located at London to a dealer in Dubai. The goods never touched the Indian border. Whether any tax is required to be paid in India. Similar would be position for the assignment of IPR rights. A provision on the line of Section-4 of the CST Act is required to deal with such situation

10. Some goods are on negative list as regards ITC is concerned. The sale of used car, where no ITC is claimed by the seller, should not be subjected to tax on further supplies.

11. As regards ITC rules, Rule-43 requires reversal of common capital goods in 5 years in proportion to the turnover every month with interest. This needs to be amended to provide for non-payment of interest to the extent the credit not utilized.

12. GST law provides for levy of interest for delay in making the payment. This interest should be calculated from the due date of payment to the exact date of payment. The system calculates the interest from the date on which the appropriation is made from the Cash Ledger. This is not proper . The interest should be charged only till the date the person makes actual payment through bank. Our experience shows the payment though cleared from the bank is not seen as received in the Ledger for days together.
Therefore specific provision may be made in this respect.
Further,the credit balance as per credit ledger can be utilised for payment of tax only and it can not be utilised for payment of any other amount.

This should be allowed for payment of any other amount like late fee interest penalty fine.

13. The ITC provision provides for reversal of credit under certain circumstances. There is automatic calculation of interest. However, here also if a person has not used the balance in the credit ledger to that extent no interest shall be levied. The suppier should be given option to utilised ITC credit partialy for tax payment. There is nothing in law to prohibit payment of tax partialy by adjustment to credit ledger and balance in cash. He us entitle to carry forward amount of credit in credit ledger for payment of tax for subsequent period. But system do not allow it. This should be allowed. In fact , the supplier should be given an option to file his claim manually which system do not allow. The system should follow the law and not later.

14. It has come to our knowledge that some payments are made by mistake. At times there is duplication in payment; however, there is no remedy for such extra payment and no refund is available to the person. The suitable procedure may be made to grant such refund.

15. Similar is the situation where the payment is shown more in the return by mistake. Unless the registered person pays the full tax, though wrongly shown, he cannot upload the return. At times, it may not be possible for a registered person to pay the full tax payable as per his Return. The law provides for installment; however, this provision is only for making the payment by installment for the amount which is due as per order. The persons would be willing to pay the interest and therefore reasonable opportunity of payment with interest must be provided. It would be unwise to show the lesser turnover to make less payment if he is not in a position to make full payment. The dealer would like to avoid such dishonesty and therefore filing of return should not be linked with payment of tax.

These are some of the issues and we shall submit more detailed representation within a week’s time.

Yours faithfully
For All India Federation of Tax Practitioners

(Mrs.) Nikita R. Badheka
Member-Law & Representation Committee
Vice President-WZ (Elect)