New year begins on positive note

The government’s new year gift is extension of the time limit to avail of the service tax and central excise dispute resolution scheme by 15 days. And, a spate of notifications giving effect to some provisions of the Finance (Number 2) Act, 2017 and decisions of the Goods and Services Tax (GST) Council at its 38th meeting. 

The Sabka Vishwas (Legacy Dispute Resolution) scheme was announced in July, with the aim of settling pending disputes on service tax and central excise duty. The government issued many notifications, clarifications, user manual and a list of FAQs to get a good response for this very attractive scheme. However, doubts persisted and there were some glitches in the online filing of applications. These were mostly resolved by mid-December, enabling the trade to take advantage of the scheme, mostly in the last two weeks before the deadline of end-December. 

Till the morning of December 31, about 133,631 tax payers, of a total of 184,000, had taken advantage of the scheme. The applications involved tax dues of Rs 69,550 crore and the amount payable by applicants was Rs 30,627 crore. This appears to fall short of the government’s expectations. The finance minister, in her Budget speech, had said that more than Rs 3.75 trillion was blocked in pending litigation. It appears that where large amounts are involved, taxpayers prefer to fight out the cases rather than take the scheme. The government says to ensure tax payers do not miss the opportunity, the last date for availing of the scheme was being extended till January 15. It is likely that more small tax payers will come forward before the revised last date. 

In the Finance (No 2) Act, 2019, the fifth schedule contained amendments to the Customs Tariff Act, 1975. These were mainly intended to rectify certain errors, create a few new entries and align some entries with the global Harmonised System of Nomenclature (HSN). The government has now issued notifications giving effect to the amendments, from January 1.

Consequently, many Customs exemption notifications have also been amended. The notification of the commerce ministry harmonising Exim Codes in the Indian Trade Control (Harmonised System) of Classification of Import and Export items with the Customs Tariff takes effect from the same date. However, till last Thursday, the Director General of Foreign Trade had not issued a public notice amending the corresponding HSN Codes under the Merchandise Exports from India Scheme.  The commerce ministry had also not made the changes needed to remove some unwarranted restrictions that had crept into its notifications. 

The Finance (No 2) Act contained certain amendments to the Central GST Act, 2017, that have now come into effect. These include a higher threshold exemption limit and alternate composition scheme for service providers, mandatory Aadhaar submission, facility for the taxpayer to transfer amounts from one head to another in the electronic register, etc.  However, the provisions relating to the Appellate Advance Ruling Authority have still not taken effect. 

In the 38th meeting of the GST Council, several decisions were taken, one of these through a process of voting. A notification now gives effect to its recommendations. 

The government has started the new year on a positive note. Hopefully, the momentum will be sustained through the year. 

E-mail: tncrajagopalan@gmail.com