Published On : Sun, Jul 20th, 2014

NVCC opposes MVAT amendments, check-posts; Delegation meets Mulak

NVCCNagpur News.

A delegation of Nag Vidarbha Chamber of Commerce led by Shri Dipen Agrawal, President, NVCC and consisting of Mayur Panchamatia, Ajaykumar Madan, Vice Presidents, Hemant Gandhi, Secretary, Manubhai Soni, Joint Secretary & Chunibhai Shah, Hon. Office Bearer, met Rajendra Mulak, MOS Finance, Government of Maharashtra, today.

Dipen Agrawal, President, NVCC informed the minister about the amendment being carried out in MVAT rules 2005 vide notification no. VAT 1514/CR30/Taxation, dt-23-05-2014 & notification no.VAT /1514/CR30/Taxation1, dt-23-06-2014. By virtue of this notification from 25th July, 2014 onwards for every incoming/outgoing movements of goods from outside the State into the State or from inside the state to outside State, the consignor/consignee and the transporter is required to upload the document called “e-way bill” in prescribed form on website of the State Government. Every transporter, who transports the goods from any place outside the State to any place out side the State & passes through the State shall upload a transit pass in form 904.

Further vide the above notifications MVAT department proposes to establish the check-posts and erect the barrier in the State and at the border of the State.

Dipen Agrawal further said that NVCC vehemently protest and reject the establishment of check-post and barrier in the State and at the border of the State and also the proposed draft rules to amend the MVAT Rules-2005.

On the establishment of check post and barriers he said that on one hand State Government, in justification to new tax imposed (LBT) argues that the check-post under erstwhile Octroi leads to disruption of free movement of goods thus a major deterrent to the business and also acknowledges that check-post creates congestion which results in traffic problem at check post. Thus check-post/barriers if established within State & on State border will result in major hindrance in free movement of goods & wastage fuel.

There is no creditable statistics to demonstrate any co-relation between non-establishment of check-post/barriers and tax evasion. From Notification Dt. 23.05.2014 we understand that entire business community is termed as tax-evader, whereas official tax collection figures reflect contrary position to such allegations. Tax collections have increased from Rs. 20,494.91 Crores in 2004-05 to Rs. 65,083.25 Crores in 2013-14, that translates to about 16% PA average growth. Establishment of check-post / barriers will result in long queues of commercial vehicles on both sides of check-post/barriers and putting private commuters at hardship.

On proposed draft rules published in notification dated 23-06-2014 to amend MVAT Rules-2005 he added that Proposed Rule 92 is contrary to the provision of Rule 91(1), Proposed Rule 91(2) is contradicting the proposed first Proviso to Rule 92(1), Proposed second Proviso to Rule 92(1) is ultra-virus to MVAT Act, 2002 because it reveals exercising of extra-territorial jurisdiction and casts obligation on consignor/dealer of a State other than Maharashtra, Proposed second Proviso to Rule 92(1) contradicts first Proviso to rule 92(1), Proposed Rule 92(2) is silent on cases where any consignor or consignee other than registered dealer does not hold any of the prescribed documents, Proposed Rule 92(5) is duplication of work & shall increase workload on both transporter & officers and this duplication of work may end-up in vehicle being detained on check-post for no fault of consignor/consignee, Proposed Rule 92(6) casts unreasonable responsibility on consignor or consignee as the case may be. We fail to understand how, one can be held responsible for misdeed of other, Part of proposed Rule 94(1) is in contradiction to first Proviso to Rule 92(1), Proposed Rule 94(6), (7), (8) & (9) are in inconsistent with Proviso to proposed Rule 94(1). Such inconsistency shall open the Pandora box of harassment & corruption on such check-post / barriers.

Further he submitted to the Minister that proposed rules do not address various issues such as process to be adopted when an e-waybill generated is required to be canceled, Process to be adopted for retail consignment collected by transporter & shipped to place outside the State or vice-versa, in one vehicle,

Process to be adopted for change in vehicle details in an e-waybill due to any unforeseen event encountered by original vehicle, Validity of e-waybill once generated, Treatment of vehicle when it reports at the check post on a prior date or after the expected date of entry/exit as mentioned in the e-waybill, Proposed rules are framed without any practical approach to ground realities. It is impossible for consignors of retail consignment to mention the expected date of exit on e-way bill when the manner & time of movement of goods is not under the control of such consignor.

Similarly it is impossible for consignees’ of retail consignment to mention expected date of entry on e-waybill, How the goods will move, when they are required to exit and again enter State border, while en-route between two cities within State, It is well acknowledged fact that there is more than one route to enter / exit the State when traveling between two cities. In such situation it would be next to impossible any dealer/ consignor/ consignee/ transporter to mention the Entry or Exist check post, as the case may be, in the proposed e-waybill template.

Lastly he stated that notification dated 23-06-2014 is posted on MAHAVAT website only and is not been published in any newspaper or other medium of communication, thus this notice cannot be treated as compliance to mandatory provision of previous publication. A notice in order to be a valid public notice under law should have been published in all leading daily newspaper in the State, so that all stake holders including public at large who will be affected by proposed rules/regulations are informed and they get the opportunity to exercise their right to represent themselves. This is settled proposition of law and has been endorsed by judiciary in their various judgments, Non-publication of notice in any leading daily local news paper having wide circulation in State is a serious lapse on part of administration; same should be cured by making newspaper publication of proposed amendment to principal rules so that public at large can exercise their right, to raise objection and give suggestion.

He further said that it was pertinent to mention here that there is unanimity at national level to formulate policies to ease doing business in India, implementation of GST to shape India as ‘One Nation One Market’ so that there can be free & easy interstate movement of goods throughout India.

In view of the facts placed before the Minister, Shri Dipen Agrawal, submitted that in the interest of revenue, business & to meet the ends of justice State should withdraw both the Notifications namely, Notification No. VAT/1514/CR. 30/Taxation1 dated 23.06.2014 and Notification No. VAT 1514/CR 30/Taxation-1 dated 23.05.2014 with immediate effect.

After giving a patient hearing to the issues placed before him, Shri Rajendra Mulak, assured the delegation that he shall resolve the issue at the earliest and invited the delegation of NVCC to Mumbai on Tuesday on 22nd July and he shall be arranging a meeting with Commissioner of Sales Tax, Finance Secretary, Transport Secretary and himself. The issues raised before him shall be discussed with the Secretaries and a solution would be arrived at he said. Shri Dipen Agrawal, President, NVCC thanked the Minister and appreciated his immediate action and steps taken to resolve the matter in the interest of Trade & Industry of the State, states in a press note issued by Shri Hemant Gandhi, Hon. Secretary of the Chamber.