Tax in India

8/2/2019 Tax in India

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KEY ISSUES IN

INDIAN INDIRECT TAXATION

Dr. Pradeep K PBA (Eco.), LL.M & Ph.D (Cochin)

Advocate, Poduval LegalHigh Court of Kerala, Kochi, Kerala, India

[email protected]; [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Tax means

A regular imposition of the Sovereignty/ Governmentupon the person, property, privileges, occupationsand enjoyments of the people for the purpose ofraising public revenue

It is regulatory in nature as well as for generation ofState fund. It is an obligation or liability towards the State by thetaxpayer. Levy of tax does not require any element of quid proquo.

KEY ISSUES IN INDIAN INDIRECT TAXATION


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Elements of Tax

Character of Imposition : Taxable Event Subject of Taxation : Person liable Rate of Tax Presumptive or otherwise Method for levy : Assessment of Tax



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Essentials of Tax

Progressive Taxation Policy/ canon of taxation suggests Flexibility

Productiveness

Simplicity

Diversity

ElasticityCertainty

Equality or Uniformity

Convenience



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PRESENT TAXATION SYSTEMAND

PROPOSED CHANGES IN THE CONSTITUTION



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CENTRAL INDIRECT TAXESList I/ VII

83Duties of Customs including export duties

CUSTOMS ACT, 1962 DUTY ON IMPORT AND EXPORT

84Duty of excise on tobacco and other goods manufactured andproduced in India, except (a) alcoholic liquors for humanconsumption (b) opium, Indian hemp and other narcotic drugs andnarcotics, but including medicinal and toilet preparations containingalcohol or any substance included in sub-paragraph (b) of this entry

CENTRAL EXCISE ACT, 1944

DUTY ON GOODS PRODUCED ORMANUFACTURED IN INDIA

92Taxes on the sale or purchase of newspapers and on advertisementspublished therein.



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CENTRAL INDIRECT TAXESList I/ VII

92ATaxes on the sale or purchase of goods other than newspapers,where such sale or purchase takes place in the course of inter-State

trade and commerce. CENTRAL SALES TAX ACT, 1956

92BTaxes on consignments of goods (whether the consignment is to theperson making it or to any other person), where such consignmenttakes place in the course of inter-state trade of commerce

92C

Taxes on servicesCHAPTER V FINANCE ACT, 1994

97Any other matter not enumerated in List II or List III including any taxnot mentioned in either of those Lists.



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STATE INDIRECT TAXESList II/ VII

51Duties of excise on the following goods manufactured or produced inthe State and countervailing duties at the same or lower rates on

similar goods manufactured or produced elsewhere in India:

(a) Alcoholic liquors for human consumption;

(b) Opium, Indian hemp and other narcotic drugs and narcotics,

But not including medicinal and toilet preparations containing alcoholor any substance included in sub-paragraph (b) of this entry.



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STATE INDIRECT TAXESList II/ VII

52Tax on the entry of goods into a local area for consumption, useor sale therein

54

Taxes on the sale or purchase of goods other than newspapers,subject to the provisions of entry 92A of List I.

55Taxes on advertisements other than advertisements published inthe newspapers and advertisements broadcast by ratio ortelevision.

62Taxes on luxuries, including taxes on entertainments, amuse-ments, betting and gambling



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CENTRAL INDIRECT TAXES

Central Excise Duty and AdditionalExcise Duties

Service Tax Customs Duty Other Additional Customs Duty likeCountervailing Duty) Central Cesses and Surcharges



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STATE INDIRECT TAXES

Sales Tax/ Value Added Tax Tax on Luxury Taxes on Lottery, Betting andGambling Taxes on Entertainment Taxes on Entry of Goods into LocalArea State Cesses and Surcharges



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Significance of GST

Federal GST Unification of OR subsuming

Central Excise Duty Additional Excise Duties Service Tax Additional Customs Duties Central Surcharges and cesses Sales Tax

Luxury Tax Entertainment Tax Taxes on Lotteries Entry Tax etc



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CONSTITUTION(ONE HUNDRED AND FIFTHEENTH)AMENDMENT BILL, 2011

Article 246A

Parliament and Legislatures of every State tomake laws on GST with a condition thatparliament will have the exclusive power tolevy GST on the supply of goods and or

services in the course of inter-state andinternational trade or commerce



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Article 246A

to levy GST on supplies in the course of inter-Statetrade or commerce, by the Government of India with apre-condition that a suitable law to apportion such taxbetween the Union and States shall be enacted by theParliament.

By the explanation, supply of goods and of services orboth in the course of import into the territory of Indiashall be deemed to be supply of goods or of services orboth in the course of inter-State trade or commerce



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Article 279A : GST COUNCIL

to constitute a GST Council with the Union FinanceMinister as the Chairman.

The Union Minister of State (Revenue), StateFinance Ministers or such Ministers nominated byeach State Governments are the members of thecouncil.

power to recommend taxes, cesses and surchargesbe subsumed into GST. Recommendation on therate of tax, turnover limits etc.



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Article 279B : GST DISPUTE SETTLEMENT AUTHORITY

to constitute a GST Dispute Settlement Authority with achairperson and two other members.

The chair person shall be a person who has been a Judgeof the Supreme Court or chief Justice of a High courtappointed by the president on the recommendations of

the Chief Justice of India. Other two members shall be persons expertise in the field

of law, economics or public affairs and appointed by thepresident on the recommendations of the GST Council.



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Article 366 (12A)

Definition clause 12A to define goods and servicetax, which means any tax on supply or goods orservices or both except taxes on the supply ofgoods such as petroleum crude, high speed diesel,motor sprit, natural gas, aviation turbine fuel andalcoholic liquor for human consumption.

Definition of taxes on sale and purchases of goodsin clause 29A deleted



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SCHEDULE VII

List I, Entry 84 is substituted by limiting the levy of

excise duty on certain products only. Entry 92 and 92C are dropped.

In List II, State List Entry 52, which deals with taxes on entry of goods into local

area for consumption is substituted Entry 54, which deals with taxes on sales and purchase of

goods is substituted Entry 62, which deals with taxes on luxury, betting etc is

substituted Entry 55, which deals with the taxes on advertisement is

omitted.



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FEATURES

Levy of GST is permitted on sale or purchase of

newspaper and advertisements published therein. Levy of Entry tax on entry of goods in to local area

for consumption, use or sale is permitted only toLocal Authorities.

State Governments are permitted to levy tax on

intra-state sale of goods, such as petroleum crude,high speed diesel, motor sprit, natural gas, aviationturbine fuel and Alcoholic Liquor for HumanConsumption .



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SOME CRITICISM

FEDERAL GST SYSTEM, (CGST, SGST & IGST)will make the Scheme more complication

Regarding IGST no divisible pool between Centreand States.

Art.246A will defeat the basic features of theconstitution (Scheme of distribution of Legislative

Powers and Federalism) Constitution Amendment is not an inevitable one.

Use and Consumption Tax is the correct substitution



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SOME CRITICISM

Substitution of GST Council for Finance Commission.

CST will be retained for some goods and Customs Duty will be

in force. Taxation on E-commerce is not covered

40% of tax sourcing goods are out of the GST

If service tax exemption limit is retained majority of serviceproviders will be out of GST

Will affect price, in absence of rate harmonization

May widen the imbalance between States. No concern onpopulation or other resources



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THANK YOU


Dr. Pradeep K PBA (Eco.), LL.M & Ph.D (Cochin)

Advocate, Poduval LegalHigh Court of Kerala, Kochi, Kerala, [email protected];

[email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]

Documents

Tax in India