Selective consultation in CBEC policy

The Central Board of Excise and Customs (CBEC) is trying to involve the trade in its decision making by inviting suggestions and comments on various issues that are procedural.

However, going by the proposals in the Finance Bill, 2012, this attitude seems missing in matters relating to enforcement, where it seems to be acting arbitrarily and harshly.

A study team has been set up to examine the feasibility of a ‘common tax code’ for service tax and central excise, and to suggest a draft code keeping in view the challenges in the context of the impending Goods and Services Tax (GST), to address issues relating to input tax credits to simplify the existing scheme and to suggest any other measure to reduce the cost of compliance for business and its transition towards a comprehensive GST regime.

A standing committee, of two CBEC members, its nominated officials and a representative of the law ministry has been constituted to identify systemic causes for litigation and preparing a road map for reducing litigation and avoiding it on the indirect tax side.

A committee, with the director-general of service tax as chairperson, has been constituted to review the scheme for electronic refund of tax paid on taxable services used for export of goods, made operational by a notification 52/2011-ST dated December 30, 2011. The committee is to evolve a scientific approach for fixation of the schedule of rates for service tax refund, taking into account the revision of the rate from 10 per cent to 12 per cent and also movement towards a ‘negative list’ approach to such taxation.

A draft circular containing details of the proposed amendments in the Central Excise Rules, 2002, and Service Tax Rules, 1994, to streamline the process of registration and another draft circular containing details of proposed amendments to harmonise the ER-1, ER-3 and ST-3 returns so that a single common one could be prescribed instead, have been put up on the CBEC website.

In all the above matters, the CBEC has invited comments and suggestions and extensive debate from all stakeholders in trade and industry, as also from all the field formations of the department before taking decisions. The initiative is laudable and such wider consultation is bound to result in more robust procedures and fewer errors in the notifications.

The trade is, however, upset that the Finance Bill, 2012, contains proposals to make certain types of offences cognisable, not to grant bail unless the public prosecutor is heard in such cases and to deny bail if he opposes, unless the magistrate is convinced that the accused is innocent. There are proposals for summary trial for certain types of offences. The jurisdiction of police officers is being ousted in certain matters and the central excise officers have been empowered to arrest instead.

Apparently, the Supreme Court judgment in the case of Om Prakash [2011 (272) ELT 321 (SC) } has prompted such proposals but it is always better to first invite comments from those who might be affected by the proposed changes before taking these to the elected representatives.

tncr@sify.com