Tuesday, March 31, 2015

GOVERNMENT MAY MAKE LTC CLAIM COVERING HOTEL EXPENSES

                In order to give boost to the tourism sector, the budget for 2015-16 is likely to expand the scope of LTA and LTC by including hotel and other expenses besides travel for the purpose of tax benefit. The ministry, sources said, it is also considering a proposal to allow employees to avail leave travel concession (LTC)/leave travel allowance (LTA) every year as against the current practice of two times in a block of four years. At present, LTA or LTC covers only economy class air travel or first class (AC I Class) rail fare.  Prime Minister Narendra Modi had earlier expressed his keenness to promote tourism. Experts are of the view that encouragement to the tourism sector will promote development of different regions and create employment opportunities. “To boost domestic tourism and also provide some tax relief to the individuals, the Leave Travel Concession benefit should be increased to one visit for every financial year,” KPMG (India) partner Vikas Vasal said. He further suggested that tax concessions should also be made available for stay in hotel may also be covered to help families avail of a holistic benefit. The LTC/LTA is available to the individual and his family including spouse, two children, parents, brothers and sisters, who are wholly dependent on the assessee. “There is a huge scope for developing the tourism industry in India which provides direct and indirect employment to millions of people. Therefore, an enhanced tax relief to individuals on LTC will benefit the overall economy,” Vasal said.

DISCRIMINATION IN GRANTING OF MACP


              As informed earlier, the delegation of CESA, Mumbai, met Hon'ble Member (P & V) on 11.03.2015 and briefed about depriving of 3rd MACP to the eligible officers in one or the other pretext.  On going through our detailed representation and discussion, the Member had asked us to give one more representation, clarifying certain points raised during the discussion.   It was also brought to her notice, that in Customs, the department is not resorting to recover the 3rd MACP from the officers who are serving and are not recovering the same from officers who have retired. The same will be submitted shortly as assured by us.  However, the representation dated 11.03.2015 on MACP is Annexed for viewers.  

                                                                                                            Ref: CESA/15/2015
                                                                                                            Dated the 11.03.2015
Ms. Joy Kumari Chander
Hon’ble Member (P&V),
CBEC, New Delhi.

Respected Madam,

            Sub: - Grant of 3rd MACP in the Grade Pay of Rs. 6600/- to the
                        Superintendents of Central Excise, Customs and Service Tax – reg.

            As per the MACP Scheme DPC has been held and Order in respect of the eligible officers for third MACP has been issued by the Cadre Controlling Commissionerate of Mumbai.  In accordance with the Order, Grade Pay has been refixed and accordingly the salary has been drawn by placing the officers in the Grade pay of Rs. 6600/-. However, as per the Board’s communication dated 04.06.2014 the Cadre Controlling Authority was forced to withdraw the grant of Grade pay of Rs. 6600/- to the officers as third financial upgradation under the MACP Scheme. Ironically, recoveries have been made from the retired officers who were initially granted the Grade Pay of Rs. 6600/-. Withdrawal of the grant of Grade Pay, as aforesaid, has even affected the pension drawn by such retired officers. It is a double setback for the officers as they could not get promotion due to delay in conducting the DPC from Group ‘B’ to Group ‘A’ and now financial loss depriving even the financial benefits.   
            In several decisions given by various High Courts, it has been held that the officers who have been granted NFG on completion of four years of regular service by way of grant of Grade Pay of Rs. 5400/- in PB-2 cannot be taken as financial upgradation since the same is not the Grade Pay granted in the hierarchical posts, as envisaged by ACP/MACP Scheme. The Cadre Controlling Authority vide letter addressed to JS (Admn), New Delhi dated 15.01.2015 has justified the contention of the officers and requested for restoration of the Orders of grant of Grade Pay of Rs. 6600/-.
            The purpose of ACP/MACP Scheme was to compensate financially to the stagnated Cadres as due to lack of promotional opportunities there was pay erosion also which affects these officers cumulative impact till they survive as they get even pension also on the last pay drawn. The very purpose of the Scheme is defeated by not following the scheme in its true spirit. This logic is also discussed in the Court pronouncements in depth and those judgments are even accepted by the department. The eligible officers whose Orders granting Grade Pay of Rs. 6600/- has been withdrawn are not only humiliated but also made to suffer a financial loss for no fault of them. This is nothing but applying salt to the wound of the stagnated Cadre.   
It is, therefore, requested to kindly withdraw the Board’s clarification dated 04.06.2014 and issue instructions to grant Grade Pay of Rs. 6600/- to the officers eligible for third MACP on completion of 30 years, which is also recommended by the Cadre Controlling Authority, Mumbai, who is awaiting the reply from the Board.
Thanking you.
Yours sincerely,

 Encl.: As above. 
A.K. SASMAL
General Secretary

Copy to:
                The Joint Secretary (Admn.), CBEC, North Block, New Delhi – 100001, for kind information and necessary action please.

Thursday, March 26, 2015

REVIEW DPC FOR ADHOC TO REGULAR FROM 2005 TO 2014

            25th March 2015, will be a great day in the history of Mumbai Central Excise Group B officers’ cadre.  To taste the fruits of first promotion from Inspector to Superintendent, due to acute stagnation, it took more than 22 years, that too, on Adhoc basis.  The practice of promotion on Adhoc basis, started since 2005.  Regularisation in the cadre, normally takes place varies from months to years. 
        CESA Mumbai, took up this issue vigorously.  Credit goes to Shri. Suresh Krishnani, Commissioner and Cadre Controlling Authority of Mumbai I, who earlier had served in Jaipur Commissionerate and was aware that the officer of Jaipur got promotions on the vacancy arising due to promotions etc. on Adhoc basis and got regularized on the date of Adhoc order as per the Board’s letter dated 26.10.2011 and our Hon’ble Chief Commissioner, Shri. V S Krishnan, who had raised this issue in the Board’s meeting held in September 2014 and got endorsment to adopt the same method for Mumbai.  It is due to the efforts of Mumbai Administration, Shri. V S Krishnan and Shri Suresh Krishnani, endless efforts by Shri N P Meshram, Joint Commissioner, CCU, Mumbai and staff of our Confidential Section of Central Excise, Mumbai I, the Administration is able to hold the review DPC today to review the promotion orders issued from 2005 to May 2013.  The practice of issuing Adhoc promotion orders have been stopped from June 2014 onwards.  However from June 2013 to May 2014, it was already regularized.
        Due to this exercise, hundreds of officers of this Zone, will be benefitted and their seniority will be restored at par with other officers of other Cadre controlling zones.  The humiliation and the discrimination will be erased, because of this action. 
      CESA, Mumbai expresses its sincere thanks to the Mumbai Administration, for this gesture. 

Friday, March 20, 2015

Litigation on the basis of N R Parmar’s judgement.

          Original Application filed in the Mumbai Bench of CAT, seeking refixing the seniority on the basis of date on which vacancy had arisen and as per the advertisement for employment, from 1982 onwards.  The applicants are S/Shri. V. U. Bhramakhshatri, L. V. Bisht, S. D. Patil (Pune), B. Kannan, K. K. S. Nair, M. K. Mishra and CESA, Mumbai. 

        Another OA for implementation of N R Parmar judgement in Mumbai Zone, like in CBDT, from 1986 onwards, is under process and is likely to be filed in the next week.  

Thursday, March 19, 2015

FROM CESA's DESK

DPC FOR MACP:    DPC for MACP was held on 10.03.2015 covering the period upto 31.03.2015.  Orders have been issued. 

ISSUE OF PROPER RATIO IN SUPREME COURT:        Hon’ble Supreme Court had adjourned the hearing on the petition filed by Kiran Panditji and Others, from 16.03.2015 by 4 weeks and had converted the petition from a Non-Miscellaneous petition to Miscellaneous Petition.

DELHI VISIT:        Delegation of CESA Mumbai, on the 12th and 13th March 2015, met Member P&V and other Board officials and represented the issue of infrastructure and MACP alongwith other issues, specifically to withdraw Board’s clarification dated 04.06.2014 denying MACP in the light of DOPT instructions dated 26.07.2010 and requesting to issue fresh instructions as requested by Cadre Controlling Authority, Mumbai vide its letter dated 15.01.2015 urging the Board to grant Grade Pay of Rs. 6600/- to the officers eligible for third MACP on completion of 30 years as per the decision of Punjab & Haryana High Court and Madras High Court.  CESA’s letter dated 12.03.2015 is annexed.

TRANSFER & POSTINGS:        Meetings with Mumbai Administration and Staff Association was held consequent to the reorganization of the Commissionerates/Zones, new Transfer and Posting policy is formulated.    Salient features are:
a)        IZT will be issued by end of April and ICT will be issued by the end of May.
b)       The tenure in a Zone (C.EX. Zone-I / Zone-II / Service Tax) will be of 5 Years.
c)        The tenure in Audit Commissionerates, (C.EX, S. Tax, and LTU Audit) will be of 3 Years.
d)       The tenure in M&P, LTU Mumbai and Loan Postings will be of 2 Years.
e)        Centralised Roster for Transfer and Postings to M&P will be maintained by PCCO and staff will be apportioned from Central Excise and Service Tax except from LTU, Mumbai and LTU Audit.
f)         Centralised Roster for LTU Mumbai and LTU Audit will be maintained by PCCO.
g)        The tenure in C.EX Commissionerates and S. Tax Commissionerate will be of 3 Years.
h)       For computation of tenure of a Superintendent, tenure as a Superintendent at a stretch will be counted.  Similarly for Inspectors tenure at a stretch as Inspector will be counted.   Deputation or loan posting/loan posting/M & P posting will not be counted, while computing the tenure in a Commissionerate/Zone.
i)          On promotion officer will be posted out of the Commissionerate and a separate roster on the basis of juniority will be maintained for repatriation from Pune Zone to Mumbai.
j)          The station of Entire Mumbai is treated as a one station.
k)        Exemptions for officers, whose wards are appearing in class 10th and 12th, will not be considered for ICT and IZT.   But it will be considered for postings to Pune but their names will not be deleted from their roster.  The posting will be postponed suitably. 

INFRASTRUCTURE:  Several Tenders have been issued for Service Tax Commissionerates and is under process of finalization and new space at 30th Floor of World Trade Centre for LTU audit and LTU Mumbai is under process. 

        Member (P & V) and DGHRD were kind enough to ease the congestion in office space and provide other infrastructure facilities for Mumbai. 


THE MACP ISSUE:  The delegation categorically clarify that the DOPT may be appraised to issue clarifications and alter their decision as per the High Courts orders and the pretext of DOPT referring the matter to the Seventh Pay Commission is strongly reacted by this Association.  This is beyond the term and reference of the Seventh Pay Commission and they cannot intervene the flaws created in the past commission or their report or any interpretations by DOPT or respective ministries.  Further it is urged that the Superintendent Cadre do not have any platform to redress this anamoly as like Inspector and other Cadres.  In the Revenue Department, CBDT do not have any problem and ACP to MACP was extended for others in the pretext of our cadre and others have been benefitted.  This issue was constantly neglected as it has not pinched others financially while in service or at time of retirement or after retirement.   

Wednesday, March 11, 2015

FINANCIAL BRIGADE OF SERVICE TAX

Exceptional officers of Mumbai Service Tax




Shri Sushil Solanki, Commissioner of Service Tax-I known for his cool and calm nature and nothing skip from his scanner and toll too hard to head more revenue from his Commissionerate and sharp enough to plug the leakage of revenue. There are many more financial soldiers in his command and the above four are exceptional and exemplary and proud of his team.  
The above officers dedicated their service not for recognitions it becomes a passion for them CESA appreciates their efforts and expects their service should be recognized by CBEC.

Thursday, March 5, 2015

SPEECH OF Ms. ARUNDHATI BHATTACHARYA, CHAIRMAN, SBI ON EXCISE DAY FUNCTION.

SPEECH DELIVERED BY Ms. ARUNDHATI BHATTACHARYA, CHAIRMAN, SBI, AS GUEST OF HONOUR, ON THE OCCASION OF EXCISE DAY FUNCTION. 

Ms. ARUNDHATI BHATTACHARYA, IS A FAMILIAR FACE AND VOICE OF DAY-TO-DAY ECONOMIC AFFAIRS.  HER UNDERSTANDING AND VISION, POSITIVE APPROACH AND DEDICATION TO MAKE INDIA STRONG AND TO ROLL OUT THE POLICIES OF THE GOVERNMENT WITHOUT ANY FEAR AND FAVOUR IS LAUDABLE.  MUMBAI IS LUCKY ENOUGH TO HAVE SUCH A DIGNITARY AMONGST US, WHO NOT ONLY SHARES HER VIEW BUT POINTED OUT THE IMAGE OF THE DEPARTMENT AMONG THE GENERAL PUBLIC AND THE MINDSET OF THE TAX PAYERS. 

Smt Arusha Vasudev, Shri V.S. Krishnan, Shri Alok Chopra, dignitaries on the dais, Ladies and Gentlemen,

            First of all, congratulations on the Central Excise day 2015.  My heartiest congratulations also to all the winners of the certificates today.  When I first received this invitation, I was a little puzzled as to why the Central Excise department thought it fit to accord this honour to me.  But then, I realized , you know, I couldn’t possibly get such a chance of getting so many tax people to talk to and in such a situation where they couldn’t talk back to me.  So I thought you know this is definitely an occasion I should take up.  Of course, the organization that I head, it is one of the largest tax payers in the country. Whether it be Income tax, we are normally between the first two alongwith ONGC or it be Service tax where also we are among the first two alongwith LIC. So, we are very large tax payers in this country. But the sad thing is in this country is somehow or the other, a sense of pride is not attached with the paying of taxes and that is something, I think I thought I should talk to you as to how is it that we can inculcate in our people this sense of pride because without taxes, without the work that you are doing to collect revenue, we cannot definitely build this country.  You know there are certain games that doctors play in which they will give you certain words and ask you whether it is arousing in you a positive response or a negative response.  Say for instance, I use the word, say something like a butterfly.  Most of you will immediately have a happy thought.  At the same time, if I use the word tax, most of you even though, you are tax people, will have a negative thought.  Now, why should that be the case and I think we need to go to the root of this problem.  We have just heard that GST is about to come in and my sincere request as a tax payer both as a corporate and as an individual is that we must make GST something that will be easily understood and easily operationalized.  One of the main reasons why we have this negative response whenever we hear the word tax is because of the difficulty of its implementation. In India, somehow or the other, whether it is in the area of tax or whether it is in the area of any other regulation, our regulations are meant to prevent abuse and it is not meant for the ease of implementation.  The reason again is that our systems are not able to catch hold of abusers very quickly and punish them properly.  As a result, we instead, make our regulations so convoluted and so difficult because we believe this is the best way to prevent its abuse.  I think first of all we need to get some trust back within ourselves.  We must trust people today to do the right thing.  Today the Prime Minister for instance, is saying that you don’t need to get anybody to attest your papers.  You can do self attestation because we trust you.  So also I think we need to bring in more of a regimen of trust while ensuring that we make the implementation and the people who look for abuse much stronger so that the abuse can be quickly caught and can be justifiably punished.  Because unless we do that no matter how much we try to make the ease of business better, it’s not going to happen
            We need to get back trust in our people, trust in our country and we need to ensure that as the new regime of GST kicks in we keep this in mind, we keep in mind the fact that there are people out there who are honest , who want to comply by everything but unless you make it easy enough to comply , you will have layers and layers of people in between who will ensure that they take advantage of all the loops and loopholes that are available and they really turn the system on its head and therefore, the implementation becomes more and more difficult.  I think the other thing in respect of taxes is that we need the Government to show how these revenues are being used.  Again, why these negative thoughts?  The negative thoughts happen in the minds of the citizens because very often they are not able to realize or not able to understand what their money is being used for.We have very little accountability that we can get from the Government sources as to the actual use that the money is being put into and therefore, if there is an effort from the Government to  show where your hard earned money is going how people in the country, how you or your dependents are benefitted from it, we will find that the tax compliance will become that much better and that much more amenable to the people who actually pay the taxes.  So I think you know overall in respect of taxes this is a very important job that you all do, you all organize the revenue collection for the country without that we wouldn’t have a government, we wouldn’t have any social infrastructure, but we need to ensure that the people whom you tax or from whom you collect that they also see them as a part of the system, that they are willing and co-operative alongwith you to ensure that the system works properly and well and that together, we can take up the nation building that the Chief Minister just talked about a few minutes back.  It is indeed true today India is the flavor in all international forums.  The no. of invitations we keep getting in order to address the international investors is astounding.  A year back, nobody was interested in us.  But that is precisely the point. A year back nobody was interested in us.  It should not be that a year hence, people will again lose interest.  And therefore, because of that reason, we need to ensure that whatever keeps people interested, whatever is good for the country, whatever ensures that this country can come up to its potential, all of us together need to do it.
            Thank you again very much for inviting me and all the very best on your Central Excise day.

Wednesday, March 4, 2015

HISTORY OF TAX REGIME FROM 1870 TO UPCOMING GST

Speech delivered by Shri. V. S. Krishnan, Chief Commissioner, Central Excise Zone I and Service Tax, Mumbai on the occasion of 71st Central Excise day.

Celebration of the Central Excise day function started since 1994 as represented by the then All India Secretary General Shri. R. C. Sharma, first at Mumbai then thereafter all over the country.  But the speech delivered earlier by the dignitaries was more of ritualistic nature than factual.  The following speech is based on the facts and road map towards new tax regime.  Hope viewers will appreciate.

Dear ……….

            Central Excise duty is an important source of revenue for the Union Government accounting for more than 15% of the total estimated revenue collection of 13 lakh crores for 2014-15. The Central Excise duty has a long history dating back to the Mauryan Era.  In 1870, excise duty was levied on salt for the first time. This was followed by levies on cotton textiles in 1884, petroleum (motor spirit) in 1920, kerosene in 1922, silver in 1930 (unimportant after the formation of Burma in 1933), sugar and steel ingots in 1934, tyres in 1941, manufactured tobacco and vegetable products in 1943 and coffee and tea in 1944.  These excise levies collected under separate enactments were consolidated and brought under a single legislation called the Central Excise and Salt Act, 1944.  This Act received the formal assent of the then Viceroy of India on February 24th, 1944, and this day is being celebrated as Central Excise Day.
            The Central Excise Department has over the years re-invented itself with the evolution of the economy.  The first major step was taken in 1969 with the introduction of the Self Removal Procedure, which was followed by the introduction of Modvat Credit system in 1986, wherein the cascading effect of tax on tax was offset by allowing credit for duty paid on inputs.  This was followed by the introduction of Service Tax in 1994, which was the pre-cursor to the idea that Indirect Taxes should be levied on all value-additions and that hair clips must be treated on par with haircuts.  This in turn was followed by the introduction of Self Assessment in 1996.  These measures have helped in shaping a Modern Tax Administration. 
            One of the principles underpinning Indirect Tax Reforms is that the Government must not use Central Excise duty as an instrument to achieve multiple socio- economic objectives as the proliferation of objectives diffuses the focus, complicates the tax procedures and creates administrative irritants.  Therefore, in the 1990s, the Government, based on the recommendations of the Chellaiah Committee reduced the number of duties from 22 to 3 and phased away a large number of end-use exemptions.  While liberalizing the tax regime, Central Board of Excise & Customs introduced a Modern Audit System in Nov-1999 in consonance with best international practices.
            Today, the Department is on the cusp of the most important tax reform, in post Independent India, which is the introduction of the GST.  Under this tax regime, both the Centre and the State will levy taxes on the same tax base covering the whole value chain from raw material to retail.  All major Central and State Indirect Tax levies would be subsumed in the GST and the taxable event would be based on the simple principle of supply of Goods and Services for a consideration.  The GST, which is proposed to be implemented w.e.f.  April 2016 would have the effect of creating an Indian Common Market which would considerably reduce the cost of moving goods and services across the country, thereby stimulating public and private investment.  An historic parallel was the passing of the Inter State Commerce Act of 1887 by the US Congress which streamlined tariffs charged by Railroad companies for movement of goods between States by rail.  This legislation reduced the cost of moving goods across the country and created a trigger movement for the US economy using the scale effect of a huge market.
            While a great growth opportunity beckons, successful implementation of the GST would require building new administrative structures, where Central and State officials can interact on a continuous basis.  The creation of an Empowered Committee of State Finance Ministers was a master stroke for it facilitated the implementation of State VAT in May 2004 and the design of the GST in 2014. We need new administrative structures for implementation of the GST.  One idea is to create  an Empowered Committee of State Chief Secretaries and  Principal Chief Commissioners headed by the Finance Secretary and also comprising of the Secretary(Revenue), Chairman, CBEC and the Member GST. This body, like the Empowered Committee of State Finance Ministers, could be a registered body funded by the Central Government and can use the existing Secretariat of the Empowered Committee of State Finance Ministers, which can be augmented. Similarly, we would also need to create a registered co-ordination body at the State Level comprising of the State Chief Secretary and the Principal Chief Commissioner along-with other officers, who could be co-opted.  These structures need to be created quickly and I would request the Chief Minister of Maharashtra to look at this suggestion and take it up with the Central Government.  Similarly we need to create a Dispute Resolution system which can resolve disputes speedily and ease the cost of doing business in India.  This would certainly give a fillip to the PM’s clarion call of “Make in India”.
            In conclusion I would like to recall the words of Jean Baptist Colbert, Louis XIV’s treasurer and probably the first great tax reformer, who said, “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the smallest amount of hissing.”  The GST by bringing in fairness in taxation can perhaps maximize the plucking while minimizing the hissing.

*************

Monday, March 2, 2015

UNMANNED CBEC


The above cautions public against loss of life.
Now similar is the situation in CBEC for cautioning against loss of revenue.
Unmanned CBEC (vacant)
Member CBEC – in single digit.
Chief Commissioner/Commissioner – in double digit
Assistant Commissioner – in three digit
Inpsector & Superintendent – in four digits.