REGULATORY COMPLIANCE EASE OF DOING BUSINESS REFORMS K

REGULATORY COMPLIANCE – EASE OF DOING BUSINESS – REFORMS K. VAITHEESWARAN ADVOCATE & TAX CONSULTANT Mobile: 98400 -96876 E-mail : vaithilegal@yahoo. co. in, vaithilegal@gmail. com www. vaithilegal. com Flat No. 3, First Floor, No. 9, Thanikachalam Road, T. Nagar, Chennai - 600 017, India Tel. : 044 + 2433 1029 / 4048 402, Front Wing, House of Lords, 15/16, St. Marks Road, Bangalore – 560 001, India Tel : 080 22244854/ 41120804

LOGISTICS – AIR & SEA

SERVICE TAX – AIR / SEA FREIGHT DIFFERENCE Freight forwarders purchase the freight slot from the airline or liner which is sold to the exporters. Freight forwarders issue airway bills / house bill of lading / invoice along with copy of master BL / multimodal transport documents. Air freight and sea freight is charged on the exporter. To illustrate, if the published air freight rate of an airline is Rs. 100/-, the airline sells it to the freight forwarders at Rs. 70/and the freight forwarders can sell it at any rate within Rs. 100/-. Freight forwarders sells at a profit or at loss depending upon market conditions.

SERVICE TAX – AIR / SEA FREIGHT DIFFERENCE Assuming the freight forwarder sells the air freight slot at Rs. 85/-, the profit of Rs. 15/- is offered for income tax. Service tax authorities in most parts of the country have initiated litigation and seek to tax the entire air freight / sea freight or the freight difference. There is no difference between an airline / liner and a freight forwarder. In fact the freight forwarder is the shipper to the airline / liner and carrier to the shipper.

CUSTOMS - PROCEDURE

CUSTOMS – SECTION 30 In most countries, the law provides for advance filing of complete manifest information on wheels up basis. This information is sought both from security and risk perspectives. Currently, carriers file the manifest only at master level and the consolidator files the information at the customs level, resulting in a mismatch. When there is a mismatch, goods are not allowed to be cleared resulting in backlog, demurrage, etc. Advance filing of complete manifest by carrier prior to wheels up must be implemented as in other countries. Suitable amendment is required to Section 30.

CUSTOMS - DOCUMENTS All electronic document issued from customs currently require a manual stamping and signature. The bill of entry runs into volumes of pages and the print out as well as the signature process creates delays / issues in environment / interaction at the field level, etc. In an IT era, the manual stamping and signature needs to be dispensed with. All the data is available in the system and can be transferred from the customs to the ACES for cenvat verification by excise authorities. If the importer requires a hard copy, he can print out in his system or retain as a document in a file. Corresponding amendment to Cenvat Credit Rules are also required.

CUSTOMS - EXAMINATION Currently, officers go to various location to examine the goods and also the documents. After these exercise they return to the customs stations and key in the data. Officers can be issued handheld devices for uploading data from various points to expedite the time taken for clearance.

LOGISTICS – ROAD TRANSPORT

LOGISTICS – ROAD TRANSPORT Transportation of goods by road not liable to service tax. GST Regime ? Goods Transport Agency Confusion still reigns supreme with reference to the person liable to pay service tax. GTA is required to issue a fairly complex document known as ‘consignment note’. Even though there is no liability on the GTA, documentation is needed from the GTA. K. Vaitheeswaran - All Copyrights Reserved

LOGISTICS – ROAD TRANSPORT – FORMS STATE FORM FOR OUTWARD MOVEMENT Andhra Pradesh Form 600 Arunachal Pradesh Form DG-01 Assam Form-63 (All mode) Bihar Form D-X / D-VIII Chandigarh Form VAT 18 Chattisgarh Form 59 Delhi DVAT-33 Goa VAT XX Gujarat Form 403 Haryana Form 38 / VAT D 3 (Outward) K. Vaitheeswaran

LOGISTICS – ROAD TRANSPORT – FORMS STATE FORM FOR OUTWARD MOVEMENT Himachal Pradesh VAT XXVI Jammu & Kashmir VAT 60/61 Jharkhand VAT 504 P Karnataka VAT 515 Kerala FORM 15 / 16 Madhya Pradesh FORM 49 / 50 Maharashtra NA Manipur FORM 28 Meghalaya FORM 37 (SALE)/FORM 35 (STM) Mizoram Form 32 / 33 Nagaland VAT 24 K. Vaitheeswaran

LOGISTICS – ROAD TRANSPORT – FORMS STATE FORM FOR OUTWARD MOVEMENT Orissa Form 409 / 410 (by Road) Form 402 (by courier) Pondicherry Form JJ Punjab VAT 36 Rajasthan VAT 49 Sikkim Form 27 or Form 25 Tamil Nadu Form JJ Tripura Form XXV Uttara. Khand Form XVI Uttar Pradesh Form XXI (VAT) West Bengal Form 51 K. Vaitheeswaran

LOGISTICS – ROAD TRANSPORT – TRANSIT FORMS STATE FORM FOR OUTWARD MOVEMENT Arunachal Pradesh Form DG-01 Assam Form-64 Chattisgarh Form-69 Delhi DVAT-35 A Goa Form 404 Gujarat VAT D 4 Karnataka E-Sugam Madhya Pradesh Form 59 Manipur Form 29 K. Vaitheeswaran

LOGISTICS – ROAD TRANSPORT – TRANSIT FORMS STATE Nagaland Orissa Rajasthan West Bengal K. Vaitheeswaran FORM FOR OUTWARD MOVEMENT VAT 25 VAT 406 VAT 51 Declaration Form

LOGISTICS – ROAD TRANSPORT – FORMS – ISSUES Multiple forms Manual / E-filing Check-post Seal and signature Seizure of goods at check-post Tax / Compounding Fee and penalty K. Vaitheeswaran - All Copyrights Reserved

LOGISTICS - GST States would tax services for the first time through SGST. Inter-State supply of goods and services would attract IGST Inter-State supply of goods and the proposed 1% tax for the originating State Intra-State supply of goods and services would attract both CGST and SGST. K. Vaitheeswaran - All Copyrights Reserved

LOGISTICS - GST Service industry operates in multi-locations but currently has the advantage of registering and paying tax at one location since it is a levy by the Central Government. When GST is implemented, SGST will have to be paid in each State Each State would have a different law. Space, registration, return, audit etc. Increase in cost of compliance Moving from simple mode of business to complex mode?

GST – ISSUES FOR TRANSPORT SECTOR States taxing services –Transportation by road Which State should tax the transaction ? Who should be liable Tax on Transport without credit on fuel ? Compliance for small players is a serious issue K. Vaitheeswaran - All Copyrights Reserved

THE ESSENCE OF BHAGAVAD GITA – TAX PERSPECTIVE Whatever happened, it happened well Whatever is happening, it is happening well Whatever will happen, it will also happen well What of yours did you lose? Why or for what are you crying? What did you bring with you, for you to lose it? What did you create, for it to be wasted or destroyed? Whatever you took, it was taken from here. Whatever you gave, it was given from here. Whatever is yours today, will belong to someone else tomorrow. On another day, it will belong to yet another. THIS CHANGE IS THE LAW OF THE UNIVERSE.

THANK YOU K. VAITHEESWARAN ADVOCATE & TAX CONSULTANT Mobile: 98400 -96876 E-mail : vaithilegal@yahoo. co. in vaithilegal@gmail. com Flat No. 3, First Floor, No. 9, Thanikachalam Road, T. Nagar, Chennai - 600 017, India Tel. : 044 + 2433 1029 / 4048 402, Front Wing, House of Lords, 15/16, St. Marks Road, Bangalore – 560 001, India Tel : 080 22244854/ 41120804