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07 September, 2015

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Will this Tax Uncertainty End ? - An Indirect Tax Perspective

Will this Tax Uncertainty End ? - An Indirect Tax Perspective

By CA Ankit Gulgulia (Jain)

When it comes to Indirect taxation we have lot of administration and interpretation issues related to taxation which itself makes the indirect taxation and unsurpassable tangle. Whether it is cases of multiple authorities intervention on same matter or unacceptable delayed clarification by CBEC on grey matters which can become cause of tax-terrorism for the Assesses. Note that we all know that tax terrorism is never visible to other except the one who are facing it !

In such a scenario it is key to understand so as to why is such a uncertain regime of Indirect taxation is taken as our compulsion. Yes the conceptual framework is complex as in case of Works contract, developers, software issues, VAT vs. Service tax Issues, CBEC interpretations but in my view the CBEC and AAR can make the life of Assessee a lot easier if they are more proactive and willing to appreciate the key unresolved / grey issues (even where the matters are sub-judice, can the CBEC not have a clear stand ?)

How to end tax uncertainty
Role of AAR - A Sleeping Doctor

Why Doctor, because it can solve your uncertainty disease.. Why Sleeping because it has been framed on the concept of "Cure is better than Prevention"

For Example:- On the definitions of applicant u/s 23A(c) under Central Excise Act, 1944 most India Assesses would not even qualify to seek an Advance Ruling.

Imagine No Advance ruling on classification in 2012 & 2013 and less than 5 in other years on one side and so many rulings and judgements in Central Excise Classification itself on the other side clearly indicates AAR is not in clear position to help Assesses's. For Sure this creates a stress and Anti-business atmosphere in India Inc Story..

CBEC's Ruling are too few and too Away from Grey Issues

Where the country has shifted from positive based service tax regime to complete negative list based service tax regime with effect from 1st July, 2012 you can count the number of clarifications issued by CBEC on your fingers, Is the service tax legislation so simplified Now ! If one needs the correct answers you may ask trade or experts to get a feel of ground reality.

Every Industry needs to critically analysed by CBEC to hunt down the key issues applicable and categorical Clarification are required. You see even the RBI issues a master circular (which is updated) every year to clear the current position and remove all the airs. Even if the view can be litigated by trade, CBEC is bound to issue more clarity on trade issues.

Be It Real Estate, E-commerce, Softwares, Value Added Services, Mobile VAS Services, Applicability of Bundled services (practicality of nature of industry), cenvat issues needs a serious look by CBEC. Is this not a Part of Government's Ease of Business Agenda .. In my view it is !


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