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S.K.KANODIA & ASSOCIATES

Chartered Accountants

NOTIFICATIONS & CIRCULARS (http://www.cbec.gov.in/) & (http://wbcomtax.nic.in/)

NOVEMBER, 2016 (L) &

DECEMBER, 2016

(LI)

Inside this issue: GST Anti Profiteering- What it

is?

INDIRECT TAX RECKONER

SERVICE TAX

Notification No. 46/2016,

Dated: 09th November, 2016

Seeks to amend Place of Provision of Services Rules, 2012 so as to amend the place of provision of ‘online information and database access or retrieval services’ with effect from 01.12.1016.

Notification No. 47/2016,

Dated: 09th November, 2016

Seeks to amend notification No. 25/2012-ST dated 20th June , 2016 so as to withdraw exemption from service tax for services provided by a person in non-taxable territory to Government, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.

Notification No. 48/2016, Dated: 09th November, 2016

Seeks to amend Service Tax Rules, 1994 so as to prescribe that the person located in non-taxable territory providing online information and database access or retrieval services to ‘non-assesse online recipient’, as defined therein, is liable to pay service tax and the procedure for payment of service tax.

Notification No. 49/2016,

Dated: 09th November, 2016

Seeks to amend notification No. 30/2012- ST, dated the 20th June, 2016 so as to put compliance liability of service tax payment and procedure on to the service provider located in the non-taxable territory with respect to online information and database access or retrieval services provided in the taxable territory to ‘non-assesse online recipient’.

Notification No. 50/2016,

Dated: 22nd November, 2016

Seeks to amend notification No. 20/2014-ST dated 16th September, 2014 so as to provide exclusive jurisdiction to LTU-Bangalore with respect to online information and database access or retrieval services provided or agreed to be provided by a person located in non-taxable territory and received by a ‘non-assesse online recipient’.

Notification No. 51/2016,

Dated: 30th November, 2016

Seeks to amend Place of Provision of Services Rules, 2012 so as to exclude 'online information and database access or retrieval services' from the definition of 'telecommunication services'.

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Notification No. 36/2016-CE,

Dated: 1st December, 2016

Seeks to further amend notification No. 12/2012-Central Excise dated 17th March, 2012, in respect to the excise duty exemption on branded gold coins of purity 99.5% and above.

Circular No. 1050/38/2016-

CX, Dated: 08th November, 2016

Combined Annual Return Form for Central Excise and Service TaxCombined Annual Return Form for Central Excise and Service Tax

Circular No. 1051/38/2016-

CX, Dated: 15th November, 2016

Export warehousing-Extension of facility in Ahmedabad District of Gujarat

WEST BENGAL VALUE ADDED TAX

Notification No. 1075-L, Dated:

14th December, 2016

Bill for amendments in the West Bengal Sales Tax Act 1994, the West Bengal State Tax (Settlement of Dispute) Act, 1999, and the West Bengal Value Added Tax Act, 2003.

Circular No. 918CT/PRO,

Dated: 09th November, 2016

Extension of the last date of filing WBST Return for Q.E. 30/09/2016.

Circular No. 919CT/PRO,

Dated: 09th November, 2016

Extension of the last date of filing VAT Return for Q.E. 30/09/2016

Notification No. 52/2016,

Dated: 08th December, 2016

Seeks to amend exemption notification No. 25/2012-ST dated 20.06.2012 so as to exempt services by an acquiring bank, to any person in relation to settlement of an amount upto two thousand rupees in a single transaction transacted through credit card, debit card, charge card or other payment card service Notification No. 53/2016,

Dated: 19th December, 2016

Seeks to amend Service Tax Rules, 1994 so as to allow a person located in non taxable territory providing online information and database access or retrieval services to a non-assesse online recipient to issue online invoices not authenticated by means of a digital signature for a period upto 31st January, 2017.

Circular No. 202/12/2016-

ST, Dated: 09th November,

2016

Withdrawal of exemption from service tax on cross border B2C OIDAR services provided online/electronically from a non-taxable territory to consumers in taxable territory in India

CENTRAL EXCISE

Notification No. 35/2016-CE,

Dated: 28th November, 2016

Seeks to exempt Point of Sale (POS) devices and goods required for its manufacature from central excise duty till 31st March, 2017

Circular No. 950CT/PRO,

Dated: 16th November, 2016

Extension of the last date of filing WBST Return for Q.E. 30/09/2016.

Circular No. 951CT/PRO,

Dated: 16th November, 2016

Extension of the last date of filing VAT Return for Q.E. 30/09/2016 Circular No. 951CT/PRO,

Dated: 16th November, 2016

Extension of the last date of filing VAT Return for Q.E. 30/09/2016

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ANTI PROFITEERING CLAUSE IN GST

- AN OVERVIEW

1) What is anti-Profiteering Measure and

Why?

In every country where Goods and

Services Tax ‘GST’ is proposed to be

introduced for the first time there is

always a feeling of tax uncertainty,

especially among the general public and

small and even medium size business

enterprises, regarding the possible cost

and price structures that would arise or

take place in during and after the

implementation of GST. It has been

observed globally that such

organisations tend to impulsively spike

their product prices in response to a

sudden tax change, either due to their

own lack of awareness or to profit from

the lack of awareness of others and

consumers at large. As a result, such

transitions often lead to temporary

inflation in product/service prices in

the short run which takes around 1-2

years to normalise. Now, the Indian

Government, with an objective to

control both inflation and excess

profiteering and to ensure that trade

and industry pass on the benefits of

reduction in tax rates to the end

consumers, has introduced the concept

of anti-profiteering measure in Revised

Model GST Law published on 25th

November, 2016. Although the time

period for implementing these measures has

not been made public as yet, it is understood

that these measures remain applicable only

for a short period of one to two years and

no further.

2) What does Model GST Law say about

Anti-Profiteering Measure?

The revised Model GST Law for Central GST

Bill and State GST Bill issued on 25th

November, 2016 contains 2 Sections

through which the anti-profiteering

measures are established. The 2 Sections

are -

1. Section – 163 - Anti-profiteering

Measure – As per Section 163, the

Central Government is empowered to

constitute an Authority, or entrust any

existing Authority constituted under any

other law, to examine whether –

a. input tax credits availed by any

registered taxable person or

b. the reduction in the price on

account of any reduction in the

tax rate

have actually resulted in a commensurate

reduction in the price of the said goods

and/or services supplied by him. The

Authority will exercise such functions

and have such powers, including those

for imposition of penalty, as may be

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out of such measures –

It is impossible today, to be a profiteer as

anyone who does so would not survive - It

is argued that currently if any enterprise

tries to earn excess profit on any publicly

consumed goods and/or services, then the

consumers through their word of mouth,

warn other consumers like their friends,

relatives and acquaintances to avoid such

enterprise. And in any severe cases, the

national media will create awareness about

such enterprises and their practices and

hold media trials where they will always

treat them as guilty until one can prove his

or her innocence. It will instantly result in

its name and its alleged actions becoming

publicised, doing significant damage to its

brand, even if it is eventually found

innocent. Thus, any excess profiteering

practice in today’s world is very difficult to

adopt due to the attached risk on its

survival and brand name. Therefore, any

additional anti-profiteering measure may

not have much additional impact.

The onus to comply and proof of such

compliance lies on business – As the onus

to prove compliance with anti-profiteering

clause lies with the business, they will have

to produce adequate evidence to prove

such compliance, which can be difficult

prescribed in cases where it finds that the

price being charged has not been reduced

as aforesaid. The ‘Authority’ will regulate

prices during the temporary inflation

phase for a prescribed period. However, as

a respite, Revenue Secretary Shri. Hasmukh

Adhia, clarified that these measures won’t

be invoked unless in the event of a

significant violation.

2. Section – 169 – Anti – Profiteering

Aspect in Transitional Provisions - As

per Section 169, of The CGST Act and The

SGST Act, certain types of registered

taxable persons will be entitled to take, in

their electronic credit ledger, credit of

eligible duties and taxes in respect of

inputs held in stock and inputs contained

in semi-finished or finished goods held in

stock on the appointed day subject to the

certain conditions. One Such Condition is

– the said taxable person passes on the

benefit of such credit by way of reduced

prices to the recipient.

3) Problems with Anti-Profiteering

Measures?

Though the idea of introducing anti-

profiteering measures has been welcomed,

there are certain objections regarding its

relevance and the difficulties that can arise

ANTI PROFITEERING CLAUSE IN GST

- AN OVERVIEW …contd

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as several small and medium businesses

may not be able to adequate records to

show that any reduction in tax rates or

allowability of additional input tax credit

has been reflected in a price reduction.

Thus, one has to wait and watch how does the

Indian GST regime work on the anti-profiteering

clause and how does business houses take care of

the same especially the transitional provisions for

anti- profiteering law.

GST COUNCIL 8TH MEETING ON 3RD AND 4TH JAN 2017

The meeting of the GST Council for debate and discussion on the IGST law and the issue of dual control is to take place in New Delhi on 3/01/2017 and 04/01/2017. If the hurdle of dual control is eased out, then there is a possibility of GST coming into force from July 2017 if not

earlier.

S.K.KANODIA & ASSOCIATES

Chartered Accountants

Kolkata Office 1:

13/C, Balak Dutta Lane, Kolkata- 700007.

Tel: +91-33-4067-8098

Kolkata Office 2:

39 A, Jorapukar Square Lane, Room #- 202, Kolkata- 700006.

Tel : +91-33-4065-8215 Tel : +91-98315 -43580

Editor: Team SKKA/CA Ankit Kanodia Email: info@skkassociates.com ankit@skkassociates.com Website: http://www.skkassociates.com/

ANTI PROFITEERING CLAUSE IN GST

- AN OVERVIEW …contd