Wednesday, August 16, 2017

GST INDIA : LETTER OF UNDERTAKING IN EXPORT CASES

Friends!
                In the Letter of Undertaking, referred to in clause (a) of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017, read with rule 96A of the Central goods and Services Tax Rules, 2017, a taxable person, who has prepared an export invoice, has been required to give undertaking to -
(a)    export the goods or services supplied without payment of integrated tax within time specified in sub-rule (1) of rule 96A ;
(b)   observes all the provisions of the Goods and Services Tax Act and rules made thereunder, in respect of export of goods or services;
(c)    pay the integrated tax, thereon in the event of failure to export the goods or services, along with an amount equal to eighteen percent interest per annum on the amount of tax not paid, from the date of invoice till the date of payment.

                Suppose that a supplier in India enters into a contract of supply of goods with a foreign buyer, for supply at a place located outside India. Condition of dispatch of goods requires that goods should be dispatched from India by a particular date. The supplier starts procuring goods and prepares export invoice in advance. However, the supplier fails in arranging part of the consignment within the available time and because of this he fails to dispatch goods by the agreed date. In the circumstances, recipient cancels the order. In these circumstances, the supplier will cancel the invoice. Now following questions may arise?
1. Would there be any liability of GST if goods procured are lying in the stocks held by the exporter?; and
2. How the supplier will discharge his liability of GST in respect of goods in respect of which exporter order has been canceled?
                In my opinion, the supplier will not be required to make any payment of GST till the procured goods are lying in his stocks and his future liability will depend on mode of disposal of goods. He may make -
(a)    intra-State supply of such goods. In that case he will be liable for payment of State Tax and the Central Tax to the State Government and the Central Government respectively; or
(b)   inter-State supply of goods within India, except a supply to SEZ unit or SEZ developer. In that case, he will have to pay Integrated Tax to the Central Government.
(c)    Zero-rated supply to SEZ unit or  SEZ developer and in that case avail benefits of zero-rating supply..
(d)   export those goods against some other export supply order. In that case, zero-rated supply benefits will be available to him.
(e)   Goods may be disposed of or dispossessed in any other manner. In that case, he will have to reverse the amount of input tax credit already claimed by him.

                In aforesaid circumstances, how a supplier can give undertaking "to pay the integrated tax, thereon in the event of failure to export the goods or services, along with an amount equal to eighteen percent interest per annum on the amount of tax not paid, from the date of invoice till the date of payment." Second thing is that liability arises as per provisions of Law and not on failure of any supplier in making a supply. Tax event is supply of goods or services or both and not on the activity of preparation of invoice. Agreement or contract for supplying goods cannot be equated with supply of goods. Taxable event is a completed event.
                What I could gather is that earlier to GST, under Central Excise, a manufacturer-exporter was permitted to remove goods without payment of excise duty if goods were meant for export. Similar was the situation in cases of merchant-exporter where they used to procure excisable goods, without payment of excise duty, from manufacturers. In export cases, there had been two events. One had been of levy of excise duty and other had been export sale of manufactured goods.  For this purpose, Notification No. 42/2001-Central Excise (N.T). dated June 26, 2001 was issued by the Department of Revenue, Ministry of Finance, Government of India.  Any exporter (merchant-exporter or manufacturer-exporter) could have exported goods without paying excise duty after giving the undertaking or bond of making payment of excise duty if goods were not exported. Where, after removing goods, from place of manufacture or registered warehouse, without payment of excise duty, exporters were failed to export such goods within the stipulated time, they were required to give intimation to the Excise Department and to make payment of excise duty (It was a case of withdrawal of facility of rebate of excise duty earlier availed by the exporter) alongwith interest.
                Earlier to GST,  export sale was being dealt with under VAT Law. Exemption on export sale was available on the basis of Shipping Bill or Bill of Export. Benefit of ITC was also available. Sales, of un-exported goods,  were liable to tax as intra-State sale or inter-State sale, as the case might have been.  There had been no time limit for export of goods.
                Similar are the facts with Bond required to be furnished before export of goods. Both requirements are unnecessary and undesired. Condition of pre-deposit of any amount before making export is also not required. Such provisions, in excise regime were made in order to facilitate the export but in GST regime, such requirements have put a burden on export.
                Inclusion, of export supplies in the category of supplies in the course of inter-State trade or commerce, is not required. By including this provision, tax on export supplies, of goods and services, has become leviable under sub-section (1) of section 5 of the IGST Act. Any amount collected as tax becomes part of general revenue of the State. Benefit of such amount cannot be  given to tax payer or any other individual. Tax can also not be levied for allowing refund to tax payer. As per several decisions of Hon'ble Supreme Court where such type of provisions are made, they render the levy invalid. Supplies to SEZ unit and SEZ developer may also be looked on the same lines.

                I hope that the Government of India and the Goods and Services Tax Council of India will look into the matter and will help the exporter in conducting hassle free export business.

Monday, August 14, 2017

महामंत्र : कृष्णाय वासुदेवाय



ईश्वर के अवतरित होने का प्रयोजन

मित्रो !
            सनातन धर्म के सुविख्यात ग्रन्थ श्रीमद भगवद गीता के अध्याय 4 के श्लोक 7 श्लोक 8 में भगवान श्री कृष्ण द्वारा युग -युग में अवतरित होने के कारणों  का वर्णन निम्न प्रकार किया गया है:

यदा यदा ही धर्मस्य ग्लानिर्भवति भारत। अभ्युत्थानमधर्मस्य तदात्मानम सृज्याहम॥
            हे भारत ! जब-जब धर्मकी हानि और अधर्मकी वृद्धि होती है, तब-तब मैं अपने रूपको रचता हूँ (अर्थात् साकाररूपसे प्रकट होता हूँ)

परित्राणाय साधूनां विनाशाय दुष्कृताम। धर्म संस्थापनार्थाय संभवामि युगे युगे
     
            साधु पुरुषों का उद्धार करने, दुष्टों का विनाश करने तथा धर्म की फिर से स्थापना करने के लिए मैं हर युग में प्रकट होता हूँ
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कृष्ण जन्माष्टमी की बहुत - बहुत बधाई


मित्रो !
     आप सभी को कृष्ण जन्माष्टमी की बहुत - बहुत बधाई। मेरी कामना है कि भगवान कृष्ण आप सभी के मन, बचन और कर्मों में वास करें।

Sunday, August 13, 2017

गुनाहों का बोझ हल्का करते चलें

मित्रो !
.      आदमी को चाहिए कि वह गुनाह करने से बचे और यदि कोई गुनाह हो भी जाता है तब उसका बोझ हल्का करने के लिए कोई एक नेक कर्म करे। न जाने अंत में गुनाह याद करने का वक़्त मिले या न मिले और अगर मिले भी तो उन्हें हल्का करने के लिए वक़्त कम पड़ जाय। 
      यों तो कर्म-फल सिद्धांत के अनुसार प्रत्येक कर्म का एक फल होता है, बुरे कर्म का फल बुरा और अच्छे कर्म का फल अच्छा होता है। अतः गुनाहों का फल बुरा होना निश्चित है किन्तु एक नेक कर्म कर लेने से गुनाह करने से होने वाला अपराध बोध कम हो जाता है, आदमी यह सोचता है कि उसने नेक करके गुनाह का प्रायश्चित कर लिया है। ऐसे में उसके मन में अपने प्रति घृणा का भाव कम हो जाता है। दूसरे गुनाह और नेक कर्मों में संतुलन भी बना रहता है। 
      A man should avoid committing a sin. However, if he falls a victim of committing a sin, he should do some noble deed to reduce its gravity. Nobody knows that in the last, he will get or not the time for recollecting those sins and even if he gets time, it will not fall short for reducing gravity of the sins.

Friday, August 11, 2017

GST INDIA : कहीं पर कुछ तो गड़बड़ है : Somewhere something is wrong

IGST Act में -
कहीं पर कुछ तो गड़बड़ है : Somewhere something is wrong
विशेष टिपण्णी: आपकी सुविधा के लिए इस पोस्ट में संदर्भित IGST Act के प्राविधानों के अंश पोस्ट के अंत में दिए गए हैं।
मित्रो !
                IGST Act की धारा 5(1) में all inter-State supplies of goods or services or both पर कर लगाया गया है जिसमें दूसरे राज्य में SEZ में स्थित यूनिट और डेवेलपर्स को की गयी सप्लाई भी शामिल हो जाती है किन्तु धारा 16(1) में ऐसी सप्लाई को Zero rated supply में शामिल किया गया है। ऐसी सप्लाई के सम्बन्ध में प्रयुक्त इनपुट्स पर दिए गए कर के बापस किये जाने का प्रावधान धारा 16(3) में किया गया है किन्तु सम्पूर्ण IGST Act या इसके अंतर्गत जारी किसी विज्ञप्ति में यह नहीं कहा गया है कि ऐसी सप्लाई पर कर नहीं लगाया जायेगा।
      यदि यह मान लिया जाय कि "inter-State supply" की परिभाषा अधिनियम की धारा 7 में दी गयी है (मेरे विचार से ऐसा मान लेना सही नहीं है) तब इसमें -
1. धारा 7 की उपधारा (1) में दूसरे राज्य में स्थित Special Economic Zone की इकाइयों और विकासकर्ताओं को की गयी सप्लाई भी शामिल है।
2. धारा 7 की उपधारा (5) में निम्नलिखित सप्लाइज शामिल हैं -
(a) निर्यात सप्लाई जिसका सप्लायर भारत में स्थित हो और जिसका place of supply भारत के बाहर स्थित हो;
(b) Special Economic Zone की इकाइयों और विकासकर्ताओं को की गयी सप्लाई जबकि सप्लायर और Special Economic Zone एक ही राज्य में स्थित हों;
(c)  Special Economic Zone की इकाइयों और विकासकर्ताओं को की गयी सप्लाई जबकि सप्लायर और Special Economic Zone दो अलग-अलग राज्यों में स्थित हों।
      इस आधार पर उपर्युक्त सभी प्रकार की सप्लाई पर धारा 5 में कर लगा दिया गया है जबकि धारा 16 में  परिभाषित जीरो रेटेड सप्लाइज को देखते हुए उपर्युक्त सप्लाइज को करमुक्त रखा जाना था। ऐसी सप्लाइज के करमुक्त होने सम्बन्धी प्रावधान धारा 16 में भी नहीं किया गया है।  धारा 16 में केवल सप्लाई से सम्बंधित input tax credit की अप्रयुक्त धनराशि की बापसी का प्राविधान किया गया है।
                IGST Act की धारा (5) के अंतर्गत "inter-State supplies of goods or services or both" पर कर लगाए जाने का उल्लेख किया गया है।  किन्तु अधिनियम में   "inter-State supplies of goods or services or both"  या "inter-State supply" को परिभाषित नहीं किया गया है। धारा 7 के प्रारम्भ से पूर्व "inter-State supply" शब्दों का उल्लेख अवश्य किया गया है किन्तु धारा 7 की विभिन्न उपधाराओं में इस बात का उल्लेख किया गया है कि कौन से संव्यवहार "supply of goods or services or both in the course of inter-State trade or commerce"  माने जाएंगे। Expressions ""supply of goods or services or both in the course of inter-State trade or commerce" और "inter-State supply of goods or services or both" एक ही अर्थ नहीं रखते हैं। धारा 7 के प्रारम्भ से पूर्व लिखे शब्द "inter-State supply" अधिनियम का भाग नहीं हैं क्योंकि पार्लियामेंट के समक्ष प्रस्तुत IGST BILL में यह marginal notes के रूप में रहे हैं। दूसरे अधिनियम की कोई भी धारा या उपधारा उसकी संख्या (number) से संदर्भित की जा सकती है। इस आशय का प्रावधान "General Clauses Act" के अंतर्गत किया गया है।
      मेरा विचार है कि सरकार यह मानकर चल रही है कि "IGST Act" की धारा 5 में संदर्भित "inter-State supply" की परिभाषा अधिनियम की धारा 7 में दी गयी है किन्तु यह ऊपर दिए गए कारणों से सत्य नहीं है।
                यदि थोड़ी देर के लिए for the sake of arguments, यह सत्य मान भी लिया जाय कि धारा 7 में वर्णित संव्यवहार ही  धारा 5 में "inter-State supplies of goods or services or both" शब्दों से संदर्भित हैं तब यह प्रकाश में आता है कि IGST Act की धारा 5 में निम्नलिखित संव्यवहारों पर भी कर लगाया गया है।
(5) Supply of goods or services or both,—
(a) when the supplier is located in India and the place of supply is outside India;
(b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.
      यहां पर क्लॉज (a) में संदर्भित सप्लाई (when the supplier is located in India and the place of supply is outside India)  export supply है और क्लॉज (b) में supply to Special Economic Zone unit or Special Ecomonmic Zone developer से सम्बंधित है। यह उल्लेखनीय है कि यह दोनों प्रकार की सप्लाइज धारा 16 की उपधारा (1) में "Zero rated supply" निम्नप्रकार परिभाषित हैं।
16. (1) “Zero rated supply” means any of the following supplies of goods or services or both, namely:—
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
   धारा 16 की उपधारा (3) में zero rated supply से सम्बंधित इनपुट्स पर दिए गए कर की धनराशि को बापस किये जाने का प्रावधान निम्न प्रकार किया गया है ;-
(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:—
(a) he may supply goods or services or both under bond or Letter of undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied,
 in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.
      यहां पर जीरो रेटेड सप्लाइज पर कर लगाए जाने अर्थात करमुक्त रखने का कोई उल्लेख नहीं किया गया है।  इस प्रकार section 16 यह मानकर बनाया गया है कि export supply और  supply to Special Economic Zone  unit or Special Economic Zone developer को सप्लाई किये जाने वाले माल और सेवाओं की सप्लाई पर अधिनियम में कर नहीं लगाया गया है। यह तभी संभव हो सकता है जब यह माना जाय कि धारा 5 की उपधारा (1) में expression "inter-State supplies of goods or services or both" में   export supply और supply to Special Economic Zone  unit or Special Economic Zone developer को सम्मिलित माना जाय। यदि ऐसा नहीं माना जाता तब यह आवश्यक होगा कि ऐसी supplies (export supply और supply to Special Economic Zone  unit or Special Economic Zone developer) को पूर्ण रूपेण करमुक्त घोषित किया जाय।
      मेरा मानना है कि यदि मुझसे अधिनियम और उसके अंतर्गत जारी की गयी विज्ञप्तियों के पढ़ने या समझने में कोई भूल नहीं हुयी है तब IGST Act में  export supply और supply to Special Economic Zone  unit or Special Economic Zone developer के सम्बन्ध में ऐसी कोई व्यवस्थाएं नहीं की गयीं हैं।
      एक बात और भी है वह यह कि Special Economic Zone पॉलिसी के अनुसार SEZ की इकाइयों और SEZ के विकासकर्ताओं को authorized operations में प्रयोग हेतु की जाने वाली माल और सेवाओं की आपूर्ति पर कर से छूट दी जानी है किन्तु यहां पर सभी माल और सेवाओं को Zero-rated supply परिभाषित कर दिया गया है।

Referred Provisions of IGST Act
1. Section 5(1)
5. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person:
                Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (51 of 1975) on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962).
2. Section 7(1) and Section 7(5)
Inter-State supply.
7. (1) Subject to the provisions of section 10, supply of goods, where the location of the supplier and the place of supply are in—
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or commerce.

(5) Supply of goods or services or both,—
(a) when the supplier is located in India and the place of supply is outside India;
(b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section,
shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

3. Section 16
Zero rated supply.
16. (1) “Zero rated supply” means any of the following supplies of goods or services or both, namely:—
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.
(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:—
(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.