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The Goods and Services Tax (GST) Bill has been passed by both Houses of the Parliament (Rajya Sabha and Lok Sabha) and will be effective from 1st July, 2017. The new GST regime is expected to lead to disruption in small businesses and payment cycles.

Under GST, all firms micro, small and big would have to move to a new and more advanced digital technology to facilitate audit reports, tax credits and payments among other things. Many companies will have to make several entries and chalk out the entire chain of business transactions and processes.

All central taxes, including excise duty and service tax besides state levies such as sales tax, value-added tax, entertainment and purchase taxes, would be subsumed into one, once the GST is implemented, thus creating one national market. It is also expected to further boost economic growth by about 1.5 percentage points.

Increased compliance under GST will benefit firms in the long run by providing them access to cheaper capital and lower input costs. However, in the short term, the switch from the unorganized to organized sector will make them less competitive. Thus, this may result in some job losses in the initial phase and some may become less competitive due to higher compliance costs.

Under GST, all firms micro, small and big would have to move to a new and more advanced digital technology to facilitate audit reports, tax credits and payments among other things. Many companies will have to make several entries and chalk out the entire chain of business transactions and processes.

All central taxes, including excise duty and service tax besides state levies such as sales tax, value-added tax, entertainment and purchase taxes, would be subsumed into one, once the GST is implemented, thus creating one national market. It is also expected to further boost economic growth by about 1.5 percentage points.

Increased compliance under GST will benefit firms in the long run by providing them access to cheaper capital and lower input costs. However, in the short term, the switch from the unorganized to organized sector will make them less competitive. Thus, this may result in some job losses in the initial phase and some may become less competitive due to higher compliance costs.

In current proposed form of GST, it exempts small businesses having the turnover below Rs 20 lakh from registering for the GST network (GSTN) unless they want to avail of the benefit of input credit. Small business will be in the Rs 20- 50 lakh bracket, according to GST, due to which family owned business worth around Rs 80- 90 lakh annual turnover may  be tempted to re-structure separate business entities in a manner that they fall within a lower tax bracket under the GST.

According to the latest annual report (2015-2016) of the Ministry of Micro, Small and Medium Enterprises (MSME), there are estimated to be about 51 million MSME business, employing more than a 117 million people and having combined fixed asset value of nearly Rs 15 lakh crore. Under the new GST regime entering the formal sector can provide smaller business access to cheaper capital as well as legal recourse in case of disputes.

However, businesses which are making a switch to the organized sector and moving towards formalization will eventually gain in their business. Ultimately, registered entities will only want to do business with other registered entities because of the reverse charge, the whole purpose of the reverse charge is to increase tax compliance, generate higher revenue and bring transparency into the tax system.

 

Taruna Verma

Senior Legal Associate

The Indian Lawyer

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India is creating a liberal mechanism that would allow all taxpayers to determine their liabilities beforehand. It is planning a significant shift towards a litigation free environment under the GST regime.

The advance ruling mechanism will allow all categories of taxpayers to approach the authority, unlike the existing system that restricts the facility to proposed transactions before the start of a business.

The advance ruling infrastructure will also ensure that every commissionerate has an authority, with a joint commissioner level officer as a member. This is modeled after global best practices in which advance ruling is treated as a revenue function, and carried out directly by revenue authorities without being passed on to any quasi – judicial entity.

At present, advance ruling can be sought for customs, excise duty and service tax for any proposed transaction. It cannot be sought for any existing transaction for central taxes, although the state value added tax regime permits even existing transactions.

This move is the first step toward bringing down litigation.

Advance ruling norms provide that an application for advance ruling or appeal has to be filed online, with fees of Rs. 5,000 or Rs. 10,000 respectively.

The Government has released another set of rules dealing with advance ruling, and those deals with accounts, record, appeals and revision. The proposed GST Council meeting on May 18-19 will take up the final set of rules.

Rules for accounts and records propose to make mandatory the maintenance of separate accounts and records for each activity, including manufacturing, trading and provision of services.

The Government proposes to roll out the new tax regime, which seeks to replace multiple state and central taxes with a single levy, on July 2017.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

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The Supreme Court inquired about the reasons for which the Government chose to close the window allowing all categories of people to deposit old notes of Rs 500 and Rs 1,000 after December 31, 2016, under some special circumstances in the month of March’17 to which the Centre informed the Supreme Court that there is no need to open the window allowing all categories of people to deposit old notes of Rs 500 and Rs 1000 after December 31, 2016 under some special circumstances.

Chief Justice of India (CJI) JS Khehar’s bench asked Attorney-General Mukul Rohatgi to file an affidavit within two weeks explaining if the Government intends to open the window to deposit demonetised currency for all, if not then to explain the reasons.

The affidavit has mentioned about malpractices and irregularities committed by people during the demonetisation period from November 9, 2016 to December  31, 2016 and said  the income tax department has initiated verification drive named “Open Clean Money” to leverage technology and data analysis for verification of cash deposits.

More than 3.78 lakh out of 18 lakh, high risk cases have been detected and have been taken up for assessment and investigation.

It further revealed seizure of undisclosed assets worth Rs 2890 crore. More than 15000 surveys which resulted detection of undisclosed income of more than Rs. 33,000 Crore.

The option for opening the window was closed after finding misuse of the money by some segment of people.

The court heard a group of Public Interest Litigation or PILs against the RBI and other banks for not accepting any deposits of old notes after December on either medical ground or any other unavoidable circumstances. The petitioners pointed out that Prime Minister in his speech had assured and subsequent RBI notification had also mentioned about deposit of old notes after December 2016 under special circumstances but that clause was taken away by the Government in the Specific Bank Notes (Cessation of Liabilities Act).

The Court will take up the Government affidavit on April 11, 2017.
 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

 

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In a major boost for anti-death penalty jurisprudence, the Supreme Court of India on Friday, 7th April, 2017 observed that death penalty breaches the reformative theory of punishment under Criminal Law.

A Bench of Justices Pinaki Chandra Ghose and Rohinton F. Nariman made this observation in an appeal filed by the State of Maharashtra against a verdict of the Bombay High Court in a double-murder case. The Trial Court had found the Accused Nisar Ramzan Sayyed guilty of murdering his three year old son Sayej and pregnant wife Summayya, thus was sentenced to death by Additional Sessions Judge, Shrirampur. The Bombay High Court had, however, acquitted the Accused. The incident was the culmination of a series of ill-treatment episodes made by the convict to the deceased wife from whom he was demanding Rs. 50,000 for purchasing an Auto Rickshaw as Dowry. Summayya’s father being a poor man was unable to fulfil the demand.

On29thOctober, 2010, the Accused set the his wife on fire by pouring kerosene oil and also threw his three year old son on the  burning body of his wife because of which Summayya and their son sustained burn injuries resulting in the death of the son on the spot. Later Summayya was taken to the hospital, but she succumbed to her injuries on 3rd November, 2010, after giving birth to a dead baby fetus.

The Apex Court, setting aside the Bombay High Court Judgment of acquittal, restored the conviction under Section 302 and 498A of Indian Penal Code. The Supreme Court of India goes on to consider whether death penalty should be awarded in this case. It then relies on the 262nd Report of the Law Commission and states:

“…the Law Commission of India has submitted its Report No.262 titled “The Death Penalty” after the reference was made from this Court to study the issue of Death Penalty in India to “allow for an up-to-date and informeddiscussion and debate on this subject”. We have noticed that the Law Commission of India has recommended the abolition of death penalty for all the crimes other than terrorism related offences and waging war (offences affecting National Security).”

The Supreme Court of Indiaproceeded bydeciding against upholding the Bombay High Court order imposing death sentence on the Accused, the Bench made the most interesting observation regarding Death Penalty andheld:

 

“We have noticed that the Law Commission of India has recommended the abolition of death penalty for all the crimes other than terrorism related offences and waging war (offences affecting National Security). Today when capital punishment has become a distinctive feature of death penalty apparatus in India which somehow breaches the reformative theory of punishment under criminal law, we are not inclined to award the same in the peculiar facts and circumstances of the present case.”

 

The Apex Court, after taking note of the dying declaration of his wife and other circumstantial evidence, held that Sayyed’s guilt was proved beyond reasonable doubt but this was not a “rarest of the rare case” that warranted Sayyed to be sentenced to death. The Apex Court therefore, imposed the death sentence of the convict to imprisonment till his natural life.

Taruna Verma

Senior Legal Associate

The Indian Lawyer

 

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The Bombay High Court has disposed off a public interest litigation petition seeking for directions to be issued to the Bar Councils of Maharashtra and Goa for withdrawing their resolutions of a one-day strike on 31st March 2017, to protest against the amendments proposed to the Advocates Act 1961 by the Law Commission of India. It was argued that the Supreme Court (SC) has held that lawyers do not have a right to go on a strike and boycott their work. On the other hand, the counsel on behalf of the Bar Council of India (BCI) has argued that the Law Commission has not considered the suggestions of the BCI and the retired SC judges while making such recommendations. Therefore, they are impelled to go on strike. The Court, however, held that lawyers have a significant role in the system of delivery of justice and that they must understand their responsibility and call off the strike.

The Law Commission’s 267th Report makes various recommendations for amending the Advocates Act 1961 in the following manner:

  • Lawyers can call for a strike only in compelling circumstances, for which an approval has to be obtained from BCI.
  • BCI to make rules for verification of certificates, periodical verification of antecedents, conduct and place of practice of Advocates.
  • BCI to make rules for pre-enrollment training and apprenticeship of a person before he/she is inducted as an advocate.
  • Compulsory common entrance test for admission into any law college in India.
  • The term ‘advocate’ to include a lawyer working in a law firm and also those working with foreign law firms.
  • The term ‘misconduct’ to include an act of an advocate whose conduct is found to be in breach of or non-observance of the standard of professional conduct or etiquette required to be observed by the advocate; or forbidden act; or an unlawful behavior; or disgraceful and dishonorable conduct; or neglect; or not working diligently and criminal breach of trust; or any of his conduct incurring disqualification under section 24A.
  • The Disciplinary Committee to consist of five members: two elected by the State Bar Council from among its members; two eminent persons from fields other than law; and one person nominated by the High Court.
  • As a punishment for misconduct, fine extending to rupees three lakhs may be imposed on an advocate.

 

In response to this Report and the proposed changes, Advocate Rajiv Chavan, President of the Advocates Association of Western India (AAWI), has opined that the Report redefines misconduct by making the definition so wide and stringent that no lawyer will be able to practice law any longer. Also, that the amendments are anti-advocate, unconstitutional, undemocratic and against the interests of the general public. He added that if the Bar Councils would comprise of non-advocates who will be in majority, and the BCI would comprise of chartered accountants, architects, politicians and doctors, it will take away the autonomy, independence and transparency of the Council. Various Bar Councils have also expressed their opinion over the Report saying that the proposed changes are undemocratic and anti-lawyer.  On the contrary, Justice BN Shrikrishna, a retired Supreme Court Judge has stated that considering the slow system of delivery of justice and the loads of cases pending in the courts, lawyers and BCI should not go on strike.

However, the advocates across the country had observed the strike on 31st March 2017 as a token protest.

 

Harini Daliparthy

Legal Associate

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As a recent development in the Goods and Services Tax (GST) regime, the Lok Sabha, on 29th March 2017, has passed four key GST Bills, i.e. Central GST (CGST) Bill, Integrated GST (IGST) Bill, Compensation GST Bill and Union Territory GST (UTGST) Bill, by negating the amendments recommended by the Opposition Party. Now, for rolling out the new tax system the State GST laws have to be enacted by each state within 3 months.

The GST is an indirect taxation which will subsume most of the existing taxes such as Centre-level taxes like sales tax, service tax, excise duty, additional customs duty, surcharges, etc, and state-level taxes like value-added tax (VAT), entertainment tax, luxury tax, etc.

The CGST Bill will enable the Central Government to levy and collect tax, a maximum of 20 per cent, on the intra-state supply of goods and services. A similar tax will be levied by states through the State-GST law.

The IGST Bill provides for levy and collection of tax, a maximum of 40 per cent, on the inter-state supply of goods and services.

The Compensation GST Bill will provide for compensation to the states for the loss of revenue they may incur due to the implementation of the GST law.

The UTGST Bill will enable levy and collection of tax, a maximum of 20 per cent, on intra-state supply of goods and services or both by union territories.

Therefore, the new tax regime is expected to benefit the entire nation including the common people as they will have to pay only one tax, instead of multiple taxes, for the purchase and sale of any type of goods and services.

 

Harini Daliparthy

Legal Associate

 

 

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Adoption Regulations, 2017 is framed by ‘Central Adoption Resource Authority’ (CARA) became effective from 16 January 2017. The Adoption Regulations find their basis in the Juvenile Justice (Care and Protection of Children) Act, 2015 which was notified on 4th January 2017. The new Adoption Regulations replace the Adoption Guidelines, 2015.

The Adoption Regulations have been framed keeping in mind the issues and challenges faced by CARA and other stakeholders including the Adoption Agencies and Prospective Adoptive Parents (PAPs). This change will streamline the adoption process. Transparency, early deinstitutionalisation of children, informed choice for the parents, ethical practices and strictly defined timelines in the adoption process are the salient aspects of the Adoption Regulations.

Some of the salient features of the Adoption Regulations, 2017 are:-

  1. Procedures related to adoption by relatives both within the country and abroad have been defined in the Regulations.
  2. Validity of Home Study Report has been increased from two to three years.
  3. The time period available to the domestic PAPs for matching and acceptance, after reserving the child referred, has been increased to twenty days from the existing fifteen days.
  4. District Child protection Unit (DCPU) shall maintain a panel of professionally qualified or trained social workers.
  5. There are 32 Schedules annexed to the Regulations including model adoption applications to be filed in the Court and this would considerably address delays prevalent in obtaining the Court order.
  6. CARA shall be facilitating all adoptions under the Juvenile Justice Act, 2015 through Child Adoption Resource Information & Guidance System (CARINGS) and all kinds of adoptions, including adoptions by relatives shall be reported to CARA which would enable safeguards for all adopted children by maintaining their record and ensuring post adoption follow up.

 

The Adoption Regulations proposes to streamline and bring transparency to the process of adoption which hither to was misused by some anti social elements for monetary consideration.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

 

 

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On December 16, 2015, a Constitution Bench of the Supreme Court, which had struck down the National Judicial Appointments Commission as unconstitutional, had left the task of preparing the Memorandum of Procedure (MoP) to the Central Government.

A year and three months later, the exercise has borne fruit after a long tug-of-war. The Supreme Court collegium has finalized the MoP for appointment of judges to Supreme Court and various High Courts.

After arriving at a consensus on Centre’s stand that “national security” ought to be part of the criteria to determine eligibility for appointment as judges, the collegium headed by Chief Justice J S Khehar and comprising Justices Dipak Misra, J Chelameswar, Ranjan Gogoi and Madan B Lokur has significantly dropped its reservation about setting up secretariats in the Supreme Court and each High Court to maintain databases on judges and assist the collegiums in the Supreme Court and the High Courts in selection of judges.

The collegium is of the view that the executive should have a veto on any candidate recommended by the collegium on the ground of “national security”, and that there should be an independent secretariat to deal with appointments and transfers.

Finalization of the MoP, which will be sent to the Centre for approval has raised hopes of speedy filling up of vacancies in High Courts, which are operating at below 60% of their sanctioned strength.

In many High Courts, court rooms have been shut because of lack of adequate number of judges. This is hampering disposal of cases, which adds to the backlog.

The members of the Supreme Court collegium held seven meetings and unanimously finalized the MoP after debating each clause and sentence of the new MoP. There were no other sore points except the national security clause and secretariat in the MoP that required resolution.

For the last one year, the draft of MoP was getting tossed back and forth between the Centre and the collegium with both sides refusing to budge over their stated positions on the national security clause which ostensibly gave veto power to the government to reject a name recommended by the collegium for appointment as judge. The collegium agreed with the Centre on the national security clause on the condition that specific reasons for application of the clause were recorded.

However, things started moving after Justice Khehar took over as CJI and the composition of the collegium changed, allowing it to meet the challenges on top of it.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

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A fake message that has gone viral in the social media misinforms the public about the rights of a girl, suspected to be raped or getting raped. The message propagates that the law allows the victim to kill or harm the offendor, for which she will not be held guilty by virtue of Section 233 of the Indian Penal Code (IPC) 1860. The message that is being circulated is as follows and is being reproduced so that the public is not misinformed about its rights. The message reads as follows:

Finally a new law passed by *MODI JI Govt* today. As per _Indian Penal Code_ 233. If a girl is suspected to be raped or getting raped, then she has the supreme right to *kill* the man, or *harm* that person as dangerously and girl won’t be blamed for *murder*”

This article is written in the interest of general public and clarifies that no such new anti-rape law has been enacted by the Government of India. The IPC 1860 has already provided that a person may, in the exercise of his/her right of private defense, voluntarily cause death or any other harm to an offendor, who commits any of the offences listed under Section 100 IPC:

  1. assault as may reasonably cause the apprehension that death will otherwise be the consequence of such assault;
  2. assault as may reasonably cause the apprehension that grievous hurt will otherwise be the consequence of such assault;
  3. assault with the intention of committing rape;
  4. assault with the intention of gratifying unnatural lust;
  5. assault with the intention of kidnapping or abduction;
  6. assault with the intention of wrongful confinement, which may reasonably cause the victim to apprehend that he/she will be unable to have recourse to the public authorities for his/her release.

The Supreme Court has held that in the case of private defense, the onus of proof shifts between the accused, to establish his plea of private defense and the prosecution, to establish every ingredient of the offence with which the accused has been charged, beyond reasonable doubt. It has also held that while judging the nature of apprehension which the accused can reasonably entertain in such circumstances requiring him to act on the spur of moment, the court has to take into consideration the subjective point of view of the accused and the normal course of human conduct as to how would a person react under such circumstances in a sudden manner with an instinct of self-preservation.

Daliparthy Harini

Legal Associate

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The Indian Government has been making efforts to abolish the system of orderlies also known as buddies, sahayaks and helpers in the Indian Armed Forces and the State Police Departments. They are trained uniformed people who are expected to help officers in maintenance and upkeep of uniform, answering telephone calls, attending to personal security and also run small errands. Over a period of time, low-ranking and combat soldiers and armed police constables have been made to work like orderlies and run errands for the officers and their families such as polishing of boots, ironing of clothes, cooking, washing of clothes, taking their children to school, shopping for their family members etc.

For a long period of time, the low-ranking soldiers and police constables have been demanding for abolish of this orderly system in the Indian Armed Forces and the State Police Departments. The Indian Air Force and the Indian Navy have already abolished this system and the Army Chief General Bipin Rawat has also lent his support to ending the sahayak or buddy system in peace zones because according to him, orderly system is important for the functioning of the Army during war and for deployment of forces in the field areas.

The Karnataka State Police Department, where over 3,000 constables and head constables work as orderlies for senior police officers, has also taken the bold move of abolishing this system through a formal Notification on 9th March 2017. It will introduce followers in place of orderlies. According to the said Notification, 50% of followers will be appointed for eligible officials and such officials will be extended home orderly allowance to engage followers of their choice on a part-time basis to assist them in disposal of official work at their residence. But in order to claim home orderly allowance, the officer will have to certify that he has utilized the allowance for the specified purpose and has not utilized the service of any police constable, government orderly, and peon at their residence as home orderly. This move will, probably, boost the morale of soldiers and constables to do their regular jobs.

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