Divisional Assistant/Deputy Commissioner, Central Excise, while sanctioning the rebate claim should verify this aspect and in case of availment of any drawback, where input stage rebate on diesel under rule 18 of Central Excise Rules, 2002 is also availed will deny the claim of rebate involved on diesel out of the rebate claimed, for any violation of the declaration (d) of the ARE 2.

In cases where diesel is procured without payment of Central Excise duty under sub-rule (2) of rule 19 of Central Excise Rules, 2002, and the goods are exported under claim of drawback the Central Excise duty involved on diesel will be recovered for violation of the declaration (d) of the ARE 2, while examining the proof of export.

The government has doubled the limit of excise duty evasion for arrest and prosecution of accused to R2 crore and also asked officials not to resort to penal provision in cases of technical nature. "It has been decided to revise the monetary limit for arrest and prosecution in Central Excise to maintain uniformity of practice in central excise and service tax," the Central Board of Excise and Customs (CBEC) said in an order. Arrest and prosecution of a person henceforth can be resorted only if the offence relating to evasion of central excise duty or misuse of CENVAT credit is equal to or more than R2 crore, CBEC said. In October 2015, the monetary limit for excise related offences was set at Rs 1 crore.

In the tenure of RBI chief Urijit Patel, a new era has began for the Central Bank. A six member Panel called Monetary Policy Committee or MPC has been formed for the purpose of policy decisions. All six members voted for a rate cut in a unanimous decision. The RBI in its monetary policy reviewed recently has decided to cut its key lending rate or the repo rate by 25 basis points to a six-year low of 6.25 per cent, from 6.5 per cent. As per RBI statement the committee expects that there would be strong improvement in supply management measures and sowing which will help to improve the food inflation outlook.

It is welcome that the Securities and Exchange Board of India (Sebi) has decided, in principle, to let commodity exchanges introduce trading in options. Such contracts, bought for a price called the premium, give their holders the right to buy or sell a security at a predetermined price. We need both futures and options to better manage supply and demand and attendant commodity prices. Yet, the fact is that a host of rigidities and anomalies constrain and stultify the commodities market here, and keep it functioning below potential. The world over, commodities are recognised as an asset class. Sebi has now given its nod to launch futures contracts in six new items, including diamonds, tea and eggs, bringing the number of such notified items to 91. Yet, futures trading stands curtailed, in terms of who can trade and in what commodities. Futures are banned, for example, in tur and urad dal and rice. Banks and mutual funds cannot trade in commodity derivatives. Regulated warehouses, whose receipts are negotiable instruments, must proliferate. Also, to deepen and widen the market, foreign investors must be allowed in. There's also the need to rationalise trading margins and position limits. Further, there's the need to permit over the-counter contracts (OTC) in commodity derivatives, and also make way for cash settlement of index-like products in the asset class. Besides, we need foolproof transparency when it comes to sharing of information with brokers and traders. The way forward is demutualisation and corporatisation of all recognised commodity associations. A vibrant derivatives market would mean better instruments to manage prices and supplies of both agricultural and other commodities and better distribution of risk across society.

The Centre has reportedly proposed four rates - ranging from 6 per cent to 26 per cent - for the goods and services tax (GST), with a cess on the highest tariff for ultra-luxury and demerit goods. This makes sense. The notion that multiple rates are hostile to GST is misplaced. They have functioned in the EU where value added tax (VAT) rates vary among member states, and there is no reason why it will not work in India. Two standard rates of 12 per cent and 18 per cent, presumably worked out after excluding real estate, electricity, alcohol and petroleum products, will cover a majority of taxable goods. A lower slab of 6 per cent for essential goods that do not attract excise duty is welcome, given that exemptions break the GST chain, increase the possibility of evasion and create systemic inefficiencies. A 4 per cent GST on gold is in sync with the recommendations of the Arvind Subramanian panel. It will help wean consumers away from gold and reduce inflationary pressures.

A case for Lower rates

In view of demonitisation, the government can consider further relaxing subjected GST rate by 4% to achieve better compliance and curb black money creation.

The panel had recommended a composite 40 per cent excise duty on non-merit goods. Instead, the Centre has now proposed a 26 per cent rate and a cess component not eligible for input tax credit. This will keep the GST chain unbroken, while discouraging sin consumption and mobilising revenue for the Centre outside the divisible pool. Manufacturers can also claim credit for the taxes paid on demerit goods used to make the final product. However, states are miffed as cesses are excluded from the divisible pool. With a dual GST, states will collect tax on services that account for a lion's share of GDP, on par with the Centre, and also get to tax the value addition in the production of goods. In addition, the Centre has guaranteed full compensation for revenue loss during the transition to GST for five years. So, states must see reason.There is a case for revising the system of the Centre sharing taxes with the states. While income and customs taxes are best collected by the Centre and shared with the states, there is little reason for the Centre to share central GST proceeds with the states, apart from what is required to compensate states for revenue loss.