'Vicco Vajradanti' tooth paste and powder are toiletries; taxable at rate of 12%: Madhya Pradesh High Court

State of M.P. v. Vicco Products (Bombay) - [2018] 91 taxmann.com 116 (Madhya Pradesh)

The assessee claimed that the products 'Vicco Vajradanti tooth paste and powder' and 'Vicco Turmeric cream' were drugs and medicines. Such products were covered under Entry No. 16 of Part IV of Schedule II of the Madhya Pradesh General Sales Tax Act, 1958 and were liable to tax at the rate of 4%. 

The department held that the products 'Vicco Vajradanti tooth paste and powder' were toiletries. Such products were covered under Entry No. 2 of Part III of Schedule II of the Act and were liable to tax at the rate of 12%. The product 'Vicco Turmeric cream' was ‘Cosmetics’. Such product was covered under Entry No. 21 of Part II of Schedule II of the Act and was liable to tax at the rate of 16%. The Single Judge of the High Court allowed the appeal in favour of assessee. The revenue filed an appeal in the High Court. 

The High Court held that product 'Vicco Vajradanti tooth paste and powder' were toiletries. Such product was covered under Entry No. 2 of Part III of Schedule II of Act and was taxable at the rate of 12%. The product 'Vicco Turmeric cream' was ‘Cosmetics’. Such product was covered under Entry No. 21 of Part II of Schedule II of the Act and was taxable at the rate of 16%. Therefore, the order passed by Single Bench was to be set aside

9,073 cases are under consideration in NCLT, including 1,630 cases of Merger and Amalgamation; 2,511 cases of insolvency and 4,932 cases under other sections of Companies Act

The Company Law Board (CLB) set up under Companies Act 1956 stands dissolved with the setting up of National Company Law Tribunal (NCLT). As on 12.03.2018, only one case under section 55(3) of the Companies Act, 2013 is pending before the NCLT.

A total of 9,073 cases are under consideration in NCLT as on 31.01.2018, including 1,630 cases of Merger and Amalgamation, 2,511 cases of insolvency and 4,932 cases under other sections of Companies Act.

All efforts are being taken to dispose off the cases as per the time limits laid down in the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. Systems and procedures including electronic/Information Technology systems are being used on extensive basis to ensure quick disposal of cases.

No reduction in approval of resolution plans after enactment of IBC (Amendment) Ordinance 2017

There is no reduction in submission of resolution plans after enactment of The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. 8 (Eight) resolution plans have been approved by National Company Law Tribunal (NCLT) after coming into effect of Ordinance as compared to 5 (Five) resolution plans approved earlier.

The said Ordinance was promulgated on 23.11.2017 to amend Insolvency and Bankruptcy Code, 2016 (Code) in order to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code and further to make provisions to specify certain additional requirements for submission and consideration of the resolution plan before its approval by committee of creditors. The Ordinance was replaced by The Insolvency and Bankruptcy Code (Amendment) Act, 2018 on 18.01.2018.

Resolution professional doesn’t require nod of shareholders/members for insolvency resolution

Ministry vide its circular no. IBC/01/2017 dated 25.10.2017 clarified that Section 30 and 31 of the Code provide a detailed procedure from the time of receipt of resolution plan by the resolution professional to its approval by the Adjudicating Authority and there is no requirement for obtaining approval of shareholders/members of the corporate debtor during this process. 

This was stated by Shri P.P. Chaudhary, Minister of State for Corporate and Law & Justice in Rajya Sabha today.

Further, Insolvency and Bankruptcy Board of India (IBBI) also amended IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 so as to ensure that a resolution process ends up with a credible resolution plan which maximises the value of assets of the corporate debtor.

The Government promulgated The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 on 23.11.2017 to amend Insolvency and Bankruptcy Code, 2016 (the ‘Code’) in order to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code. The Ordinance was replaced by The Insolvency and Bankruptcy Code (Amendment) Act, 2018 on 18.01.2018.

Input Tax Refund to Exporters

Government has decided to speed up input tax refund to exporters. As per rule 91 of CGST Rules, 2017, ninety per cent of the refund amount claimed shall be granted on a provisional basis within a period not exceeding seven days from the date of acknowledgement of the refund claim. Further, as per section 54(7) of the CGST Act, 2017, the final order for granting refund shall be issued within sixty days from the date of receipt of the complete application. Out of total taxpayers under GST, 64% were also registered under previous tax regime. No specific study has been undertaken on the impact of GST transition.

64% of the total taxpayers registered under GST have transitioned from the previous tax regime to GST as on 2ndMarch, 2018.

The processing of refund claim is being done after the claimant has filed the GST return and the grant of the refund shall be within sixty days from the date of receipt of the complete application.

Division of assesses under GSTN

The division of assesses between Centre and State is decided by the Centre and State Governments. GSTN got an application developed using which Central and State tax authorities have uploaded the data on allocation of migrated taxpayers in the GST System database. As on 8th March, 2018 data on division of 60,89,534 migrated taxpayers has been entered into GST System.

In order to ensure single interface for assesses under GST, the State Level Committees comprising of Chief Commissioner/ Commissioner of Central Tax and Commissioner of State tax have assigned the taxpayers to be under either the Central Tax or State Tax administration based on the turnover of the assesses on a proportionate basis. The assesses having turnover above Rs. 1.5 crores are to be assigned in the ratio of 50:50 between the Centre and the respective State while those having turnover less than Rs. 1.5 Crores have to be assigned in the ratio of 10:90 between the Centre and the respective State.

No choice has been given to assesses to opt for a particular tax administration i.e. Centre and State

Vanishing companies

The Coordination and Monitoring Committee (CMC) has been constituted for those listed companies which had vanished after public issue during the years 1992 to 2005. Out of the 238 listed companies identified as “Vanishing Companies”, due to the efforts of the Ministry and law enforcement agencies, 161 such companies have been traced and 77 more companies are still in the list of Vanishing Companies. Action under the Company law as well as Criminal Law are under progress against such companies, their Directors/Promoters.

The companies that were struck-off the Register under Section 248 of the Companies Act, 2013 are not listed companies. Therefore, they do not come under the purview of the definition of “Vanishing Companies”. The Regional Stock Exchanges have been closed under the Orders of the Securities and Exchange Board of India (SEBI), which does not affect the status of the companies listed therein, except as per procedures/orders of SEBI.

The Coordination and Monitoring Committee (CMC) is still active and its 30th meeting was held on 11.07.2017.