PROPOSED COURSE MANUAL

TAXATION LAW

(B.A, LL.B)

Course Instructor

Mr. Kinshuk Jha

Ms. Ashrita Kotha
Part I

Course Title Taxation Law

Course Code

Corse Duration One semester

Level Fourth year of B.A,LL.B

Medium of Instruction English

Pre-requisites Nil

Pre-cursors Nil

Equivalent courses Nil

Exclusive courses Nil

Part II: Course Aim

India has a comprehensive tax structure. The power to levy taxes and duties is distributed among the three
tiers of Government, in accordance with the provisions of the Indian Constitution. There is a broad
classification of taxes done under the categories of direct and indirect taxation. The Central government, the
state governments and the local bodies levy and collect different types of taxes in accordance with the
provisions of the relevant legislation. It is to be noted that any of these legislations shall not be in violation of
the provisions of the Constitution. The taxes levied shall not be arbitrary or without legislation. The efficient
collection of both, the income based and the consumption based taxes, contribute towards the development
of the nation and also in meeting the costs of governance.

The tax system in India has under gone a radical change in line with the liberalization of policies since 1991.
Some of the changes include:- rationalization of tax structure reduction in corporate tax rate; alignment of
customs duty in accordance with bilateral treaties; introduction of value added tax and widening of the tax
base. It would be apt to say that tax laws form an integral part of the fiscal and trade policies of the nation.

Even though several tax laws have been simplified to ensure better compliance, they still represent a complex
system of legislations for the layman. The Indian courts have played a pivotal and incessant role in curtailing
arbitrary taxation by the authorities and have laid down several guidelines for the effective implementation
and valid interpretation of the tax laws. Contrary to the popular notion of it being a vast and arid subject, the
study of tax laws is quite intriguing. It is highly utile for students of law as it elevates their general awareness
of taxation principles from personal as well as practice perspective.

This course –

 provides students with the knowledge of the basic principles of taxation, for both direct and indirect
taxes, in India

 develops comprehension and application of these principles as they have been interpreted by the
Indian courts

 develops an awareness of the concurrent issues in the domain of taxation laws through periodic case
studies of the relevant domestic and international judicial pronouncements

 introduces students to the co-relation between domestic taxation laws, fiscal policies and
international trade

 introduces students to basic practical skills required to conduct research in the domain of taxation of
corporations and commodities
 Course Intended learning outcomes

Course objective Teaching and Learning Assessment

Activities Tasks/ Activities
By the end of the course students
should be able to:

Analytically and critically 50 % Reading of relevant cases End-of-course closed book,

describe and explain the Weightage and other material and timed examination
substantive principles of direct and research. (50% of marks)
indirect taxation pertaining to the
topics to be covered in the syllabus.
Students will acquire Tutorials (25% of marks
knowledge of the scheme for attendance,
of direct and indirect presentation and
taxation pertaining to the participation)
topics to be covered in
the syllabus. Assignment/s(25% of
marks for case
reviews/case studies, etc.)
Students will be
encouraged to participate
in class discussion to
develop their analytical Students’ ability to
and critical skills. describe and explain the
main substantive rules of
direct and indirect
Lectures taxation on topics
covered in the syllabus
Students will be given will be tested on all three
guidance assessment parameters.
on their reading and
research for their lectures
and tutorials.

Analyse and critically evaluate:
 Weightage
 issues and concerns in the
fields of direct and indirect
taxation
 the operation of the
principles of corporate
taxation and taxation of
commodities
 the practical implications
30% Students will, by
responding to questions
and performing exercises,
develop their analytical
and critical capabilities to
discuss important issues of
taxation on corporations
and commodities.
End-of-course examination
+Tutorials +Assignments
Students’ ability to
analyse and critically
evaluate will be tested by
all three assessment
tasks/activities to
determine their ability to
apply the legal principles
to a given factual
situation.
End-of-course examination
Students’ ability to apply
 of the taxation principles
on international trade and Students will be
commerce introduced to issues and
 the practical implications concerns and aspects of
of the taxation principles the operation of the
and their social contexts. principles of direct and
indirect taxation.
Preparation for tutorials
Students will research on
the issues of direct and
indirect taxes, corporate
taxation and international
taxation.
the principles of law to
given situations and
resolve problems will be
examined.
Tutorials
Students will be required
to make presentations on
problems and questions
allotted to them and all
students will be required
to participate and
contribute to tutorial
discussions whether they
are making a presentation
research, analyse and
resolve problems, and
communicate solutions
orally will be tested.

Apply the principles of 20 % Tutorials

corporate taxation to solve legal Weightage
problems by: Students will give
presentations on selected Assignment/s
 researching issues of topics in which they will Students’ ability to
corporate taxation scrutinise, analyse and research, analyse and
 analysing and innovating evaluate issues and resolve problems, and
to resolve problems concerns in the topics communicate solutions in
concerning issues of related to taxation of writing will be tested.
corporate taxation. corporations and
commodities, domestic
 communicating their
and international.
solutions orally and in
writing clearly, coherently
Lectures
and accurately in their own
Students will be shown
words and in plain
how legal problems are
language
solved applying principles
of corporate and
international taxation.

GRADING OF STUDENT ACHIEVEMENT

To pass this course, students must obtain a minimum of 50% in each of the coursework and the examination
elements of the assessment. Coursework for this purpose means those ways in which students are assessed
otherwise than by the end of session examination. End of semester exam will be in the form of a traditional 3
hours written exam. 5% of the total marks (100) will be awarded for attendance, subject to University policies.
Letter Grade Value Total Course Marks Grade Definitions and Explanation
Grade (50 for exam, 25 for
assignments & 25 for
tutorials)

O 7 70 and above Outstanding: Sound knowledge of the subject

matter, excellent organizational capacity, ability to
synthesize ideas, rules and principles, critically
analyse existing materials and originality in thinking
and presentation.

A+ 6 65 to 69.75 Excellent: Sound knowledge of the subject matter,

thorough understanding of issues; ability to
synthesize ideas, rules and principles and critical and
analytical ability.

A 5 60 to 64.75 Good: Good understanding of the subject matter,

ability to identify issues and provide balanced
solutions to problems and good critical and
analytical skills.

B+ 4 55 to 59.75 Adequate: Adequate knowledge of the subject

matter to go to the next level of study.

B 3 50 to 54.75 Marginal: Limited knowledge of the subject matter

and irrelevant use of materials and, poor critical and
analytical skills.

F 0.0 Below 50 Failure: Poor comprehension of the subject matter;

poor critical and analytical skills and marginal use of
the relevant materials. Will require repeating the
course.

Tutorials

To encourage participation, students would be expected to contribute in deciding the content, format, and
methodology of tutorial classes. Decided thus, tutorial exercises will be distributed from time to time.

Student Participation

Students are required to prepare for lectures and tutorials and to participate in them. Their participation will
be assessed and graded.

Cases and other Reading Material

Corporate Tax Planning and Business Tax Procedures, 2013 Ed, Taxmann by Dr. Vinod Kr. Singhania and
Dr. Monica shall be used as the main text book for this coursework. Communication regarding relevant
chapters/reading material and specific cases to be studied for each week’s lecture will be sent to students in
advance.

Plagiarism

Any idea, sentence or paragraph that the students cull out from the internet must be credited with the original
source. Paraphrasing or directly quoting from a web source in the exam, presentation or essays, would require
disclosure of the source. The university has strict rules with consequences for students involved in plagiarism.
This is an issue of academic integrity on which no compromise shall be made.

Part III KEYWORD SYLLABUS

Direct and Indirect taxation, Taxable entities, Tax planning, Avoidance and Evasion, Types of companies for
tax purposes; Tax incidence, Tax planning in respect to new businesses, Tax planning in respect to
nonresident, Restructuring of business, Amalgamation, Demerger, Double taxation avoidance agreements,
Transfer pricing, Authority for Advanced Ruling

Part IV DETAILED SYLLABUS

Introduction to General Principles of taxation- tax planning- avoidance- evasion

Key features of direct and indirect taxes, canons of taxation

Constitutional provisions with respect to taxation laws

Corporate taxation in India- Concept of company- Indian company- Foreign Company- Industrial
Company- Investment Company- Widely held company- closely held company

Key concepts of the Income Tax and Wealth Tax

Residential Status and tax incidence- incidence of tax

Concepts of Previous Year and Assessment Year, Assessment Procedure

Concept of Residential status

Tax planning with reference to new business- nature and form of new business- tax planning with reference
to financial management decisions- tax planning with reference to managerial decisions

Restructuring Business and Amalgamation- Merger- Conversion of Sole Proprietary Business or Firm into
Company- Slump Sale- Transfer of Assets between Holding and Subsidiary Companies- Conversion of
Company into Limited Liability Company/ Partnership

Tax Planning in Respect of Non Resident

International Taxation- Double Taxation Agreements- Transfer Pricing- Advance Ruling for Non Resident
Taxation on Commodities (Indirect Taxation)

Objects and structure of the Service Tax, Principles and Concepts, Legal Issues and recent developments

Objects and structure of the Customs Act, Principles and concepts of the Customs Act, Legal Issues and
adjudication mechanism

Objects and structure of Central Excise, Principles and concepts, Legal Issues and computation methods

Objects and structure of VAT, Principles and concepts, Legal Issues and computation methods

The advent of GST in India

Part V READINGS

The lecture handouts or any other relevant literature will be circulated a week in advance. They will have a
significant role as they would be a customized source of pertinent information on the upcoming topics.
Students are advised to keep a regular record of them.

Essential Reading-

Dr. Vinod K. Singhania and Dr. Monica Singhania, Corporate Tax Planning and Business Tax
Procedures, Taxmann Publications, 17th Edition, 2013
Supplementary Readings-

Dr. Vinod K. Singhania and Dr. Monica Singhania, Students Guide to Indirect Tax Laws, Taxmann
Publications, 49th Edition, 2013
Roy Rohatgi, Basic International Taxation (Vol. I and II), Taxmann Publications, 2nd Edition
Scholarly Articles-
Infanti, Anthony C., Tax as Urban Legend (January 24, 2011). Harvard Blackletter Law Journal, Vol. 24, 2008;
University of Pittsburgh School of Law Legal Studies Research Paper No. 2007-13. Available at SSRN:
http://ssrn.com/abstract=1069182
Martin, Isaac William and Mehrotra, Ajay K. and Prasad, Monica, The Thunder of History: The Origins and
Development of the New Fiscal Sociology. THE NEW FISCAL SOCIOLOGY: TAXATION IN
COMPARATIVE AND HISTORICAL PERSPECTIVE, Isaac William Martin, Ajay K. Mehrotra, Monica
Prasad, eds., New York: Cambridge University Press, 2009; Indiana Legal Studies Research Paper No. 147.
Available at SSRN: http://ssrn.com/abstract=1461204
Mankiw, N. Gregory and Weinzierl, Matthew and Yagan, Danny, Optimal Taxation in Theory and Practice (June
11, 2009). Harvard Business School BGIE Unit Working Paper No. 09-140. Available at SSRN:
http://ssrn.com/abstract=1418043 or http://dx.doi.org/10.2139/ssrn.1418043
Thomas Sowell, “Trickle Down” Theory and “Tax Cuts for the Rich”,
http://www.tsowell.com/images/Hoover%20Proof.pdf
Malloy, Robin Paul, Adam Smith in the Courts of the United States (May 1, 2010). Loyola Law Review, Vol. 56,
No. 3, p. 33, 2010. Available at SSRN: http://ssrn.com/abstract=1660574
Bandyopadhyay, Sankha Nath, The Problem with Tax: Planning, Avoidance or Evasion? (July 8, 2012). Available at
SSRN: http://ssrn.com/abstract=2102282 or http://dx.doi.org/10.2139/ssrn.2102282
Slemrod, Joel B. and Yitzhaki, Shlomo, Tax Avoidance, Evasion, and Administration (January 2000). NBER
Working Paper No. w7473. Available at SSRN: http://ssrn.com/abstract=213192
Infanti, Anthony C. and Crawford, Bridget J., Critical Tax Theory: An Introduction (January 1, 2009). CRITICAL
TAX THEORY: AN INTRODUCTION, Cambridge University Press, 2009; U. of Pittsburgh Legal Studies
Research Paper No. 2009-04. Available at SSRN: http://ssrn.com/abstract=1333799
Vann, Richard J., 'Liable to Tax' and Company Residence under Tax Treaties (November 23, 2010). RESIDENCE
OF COMPANIES UNDER TAX TREATIES AND EC LAW, EC AND INTERNATIONAL TAX LAW
SERIES, Vol. 5, pp. 197-271, G. Maisto, ed., IBFD: The Netherlands, 2009; Sydney Law School Research
Paper No. 10/131. Available at SSRN: http://ssrn.com/abstract=1714131
Shaviro, Daniel, The Forgotten Henry Simons (November 27, 2012). NYU Law and Economics Research Paper
No. 12-39, read pp. 30-47. Available at SSRN: http://ssrn.com/abstract=2181719
or http://dx.doi.org/10.2139/ssrn.2181719
Cockfield, Arthur J., Introduction: The Last Battleground of Globalization (August 23, 2010).
GLOBALIZATION AND ITS TAX DISCONTENTS: TAX POLICY AND INTERNATIONAL
INVESTMENTS, Arthur J. Cockfield, ed., pp. 3-17, University of Toronto Press, 2010. Available at SSRN:
http://ssrn.com/abstract=1663974
Nguyen, Xuan-Thao and Maine, Jeffrey A., The History of Intellectual Property Taxation: Promoting Innovation and
Other Intellectual Property Goals? (July 12, 2011). Southern Methodist University Law Review, Vol. 64, 2011.
Available at SSRN: http://ssrn.com/abstract=1884361
Gupta, Sayantan, Cross-Border Mergers and Acquisitions: Addressing the Taxation Issues from an Indian Perspective
(December 4, 2008). Corporate Professionals Today, CPT, Vol. 13. No. 6, p. 525, 2008. Available at SSRN:
http://ssrn.com/abstract=1311102
Goutam, Swapneshwar, Concept of Slump Sale & Taxation Issues in India (November 28, 2010). Available at
SSRN: http://ssrn.com/abstract=1716182 or http://dx.doi.org/10.2139/ssrn.1716182
Chaturvedi, Nishant and Sharma, Priyesh and Makkar, Karandeep, Applicability of Minimum Alternate Tax in
India (February 11, 2011). Available at SSRN: http://ssrn.com/abstract=1759907
or http://dx.doi.org/10.2139/ssrn.1759907
Raju, Dr. K. D., Intellectual Property Taxation in India: Need for a Comprehensive Policy and Law (July 21, 2008).
Available at SSRN: http://ssrn.com/abstract=1166546 or http://dx.doi.org/10.2139/ssrn.1166546
Thacker, Sunil, A Study of the Indian Tax System - Part I and II (October 17, 2008). Tax Notes International, Vol.
52, No. 2, 2008. Available at SSRN: http://ssrn.com/abstract=1286009
Jha, Raghbendra, Indirect Tax Reform and Fiscal Federalism in India (July 18, 2013). Available at SSRN:
http://ssrn.com/abstract=2295255 or http://dx.doi.org/10.2139/ssrn.2295255
Anand, Manoj, Doctrine of Unjust Enrichment and Refunds Under Central Excise Law. The Management
Accountant, Vol. 30, No. 2, pp. 147-149, February 1995. Available at SSRN:
http://ssrn.com/abstract=629243
Dahal, Rajib, Basic Concepts and Features of Goods and Service Tax in India (May 25, 2010). Available at SSRN:
http://ssrn.com/abstract=1615472 or http://dx.doi.org/10.2139/ssrn.1615472
Singh, Nirvikar and Srinivasan, T. N., Federalism and Economic Development in India: An Assessment (November 6,
2006). Available at SSRN: http://ssrn.com/abstract=950309 or http://dx.doi.org/10.2139/ssrn.950309
Jain, Tarun, Investments Through DTAA Route in India and Strategic Tax Planning (July 20, 2011). Institute of
Business Laws Newsletter, No. 2, August 2011. Available at SSRN: http://ssrn.com/abstract=1918286
VanderWolk, Jefferson P., The New World of Tax Information Exchange (February 18, 2010). Asia-Pacific Journal
of Taxation, Vol. 13, No. 2, Autumn/Winter 2009. Available at SSRN: http://ssrn.com/abstract=1582452
Göx, Robert F. and Schiller, Ulf, An Economic Perspective on Transfer Pricing (February 1, 2006). Available at
SSRN: http://ssrn.com/abstract=885480 or http://dx.doi.org/10.2139/ssrn.885480
Dean, Molly and Feucht, Frederick J. and Smith, Murphy, International Transfer Pricing Issues and Strategies for the
Global Firm. Available at SSRN: http://ssrn.com/abstract=1123706
Baistrocchi, Eduardo A., The Use and Interpretation of Tax Treaties in the Emerging World: Theory and Implications
(September 24, 2008). British Tax Review, No. 4, 2008. Available at SSRN:
http://ssrn.com/abstract=1273089

Statutory References-
Indian Companies Act, 1956

Limited Liability Partnership Act, 2008

Income Tax Act, 1961

Wealth Tax Act, 1957

Central Excise Act, 1944

Customs Act, 1962

Part VI LECTURE PROGRAMME

The following lecture schedule is tentative and may be revised by the instructor(s).

Week 1 Introduction to General Principles of taxation- Ideologies- Fiscal policy

 Introduction to Fundamental principles of taxation (Concept of Income based taxes and

consumption based taxes, purpose and goals of a tax system)
 Tax Ideology (Ideologies in Direct/Indirect taxes; Ideology of ability, Ideology of Barriers and
Deterrents, Ideology of Equity)
 Levy of Tax(Regulatory, Compensatory), Tax Neutrality (Taxes causing excess burden, Progressive
and Proportional tax, Tax neutrality in the light of equity)
 Introduction to Fiscal Policy Design in India
 Union-State Financial Relation
 Limitations of Taxation Policy

Week 2 Canons and Sources of Tax Laws, Constitutional Provisions related to Indian Taxation
system

 Canons of Taxation: Main basic principles set to build a good tax system. A brief introduction to the
canons proposed by Adam Smith such as Canon of Ability , Canon of Certainty , Canon of
Convenience, etc.
 Sources of Tax Laws
 Constitutional Provisions with respect to Taxation Laws
 Art. 265, No taxation without legislation, (Read Ghulam Hussain v. State of Rajasthan, AIR 1963 SC
379 & Mehra Harish Vansh Lal vs State of Maharashtra 1971 (2) SCC 54)
  Article 265, Right to refund, (Read Mafatlal Industries Ltd. and Ors. Vs. Union of India (UOI) and
Ors. (1997) 5 SCC 536)
 Art 246, Art 248, Scheme of distribution of legislative powers between the Centre and State
 Art. 301, 304, Freedom of Trade Commerce and Intercourse, restrictions, legality of entry tax, (Read
 Jindal Stainless
Art. 280
duties Ltd. & Anr
of (Establishment
the Commission) ofvs
theState Of Haryana
Finance & Ors,of[2006]
Commission India,145 STC 544) of members, Role and
Qualifications
Week 3 Direct Taxes: Introduction to Income Tax

The Central Government has been empowered by Entry 82 of the Union List of Schedule VII of the
Constitution of India to levy tax on all income other than agricultural income (subject to Section
10(1)). The Income Tax Law comprises of the Income Tax Act 1961, Income Tax Rules 1962,
Notifications and Circulars issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts
and Judicial pronouncements by Supreme Court and High Courts.

 Key concepts and principles of the Income Tax, Tax base and Concept of Income, case laws:
(C. I. T. v. Shaw Wallace, 59 I.A. 206), (Emil Webber v. C. I. T., 200 ITR 483 (SC))
(Minister of Finance v. Smith, 1927 A.C. 193)
(Godhra Electric Company v. C. I. T., (1997) 4 SCC 530) (Poona Electric Supply v. C. I. T., 57 ITR
521)
 Fully and partly exempted Income
 Incidence of Income, Tax Incentives
 Choice of Accounting Method, Assessment Function
 Collection Function
 Structure of Income Tax Administration
 Offences under I.T Act
 Taxpayer’s rights and remedies

Week 4 Income Tax and Wealth Tax: Key concepts

 Residential Status and Incidence of tax

 Concepts of previous year and assessment year
 Assessment Procedure
 Taxable Income - Computation
 Tax Liability- Computation
 Key concepts and principles of Wealth Tax Act, 1957

Week 5 Corporate Tax in India

Company whether Indian or foreign is liable to taxation, under the Income Tax Act, 1961.
Corporation tax is a tax which is levied on the incomes of registered companies and corporations.

 Concept of a company [Sec 2(17)]

 Indian Company[Sec. 2(26)]
 Domestic Company Foreign Company, Industrial Company
 Company in which Public are substantially interested[Sec. 2(18)]
 Investment Company
 Widely held Company
 Closely held Company
  Residential status and Tax Incidence [Sec. 6(3)] and [Sec. 5]

Week 6 and 7 Capital Gains Taxation

 Concept of Capital Gains and Loss on Capital

 Capital and Revenue receipts
 Long Term Capital Gains
 Short Term Capital Gains
 Computation exercises
 Exemptions under Section 54

Week 8 Tax Planning/Avoidance/Evasion- Concept in Brief, Tax Planning in Respect of Non

Resident

 Residential status
 Income taxable in the hands of Non-resident in India
 Income deemed to accrue or arise in India [Sec. 9]
 Case study of Vodafone International Holdings B.V. v. Union of India & Anr., (2012) 6 SCC 613, in the
light of sections 5(2), 9(1) and 195 of the Income Tax act, 1961. (Taxation of capital gains under
Section 9 (1) (i) for an overseas sale related to Indian assets)

Week 9 Double Taxation Avoidance Agreements

Double taxation is the levying of tax by two or more jurisdictions on the same declared income (in
the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of
sales taxes). This double liability is often mitigated by tax treaties between countries. In India, the
provisions related to DTAA are laid in Sec. 90, 90A and 91 of the Income Tax Act, 1961
 Legal status of DTAA
 Broad Features of DTAA
 UN and OECD Model Conventions
 Methods for elimination of Double Taxation
 Non –Discrimination Provision
 Misuse of DTAA

Week 10 Transfer Pricing: Key concepts

Increasing participation of multi-national groups in economic activities in India has given rise to
new and complex issues emerging from transactions entered into between two or more enterprises
belonging to the same group. Hence, there was a need to introduce a uniform and internationally
accepted mechanism of determining reasonable, fair and equitable profits and tax in India in the
case of such multinational enterprises. Accordingly, the Finance Act, 2001 introduced law of transfer
pricing in India through sections 92A to 92F of the Indian Income tax Act, 1961 which guides
computation of the transfer price and suggests detailed documentation procedures.

 Concept of International Transaction [Sec. 92 to 92F]

 Computation of the Arm’s Length Price (ALP)
 Method of computing ALP [Sec. 92C]
 Comparability of Transaction
 Most appropriate method of ALP computation
 Determination of Arm’s Length Price by the Assessing Officer in certain cases [Sec. 92 C(3)]
 Maintenance of books of account [Sec. 92 D]
 Report from Accountant [Sec. 92 E]

Week 11 Mechanism of Advanced Ruling in India

The scheme of advance rulings was introduced by the Finance Act, 1993, Chapter XIX-B of the
Income-tax Act, which deals with advance rulings, came into force with effect from 1-6-1993. Under
the scheme, the power of giving advance rulings has been entrusted to an independent adjudicatory
body. Accordingly, a high level body headed by a retired judge of the Supreme Court has been set
up. This is empowered to issue rulings, which are binding both on the Income-tax Department and
the applicant. The procedure prescribed is simple, inexpensive, expeditious and authoritative.

 Authority for Advance Ruling [Sec. 245 –O]

 Meaning of Applicant and Advanced Ruling [Sec 245 N (a) and (b)]
 Procedure for filing Application
 Procedure on receipt of application [Sec. 245 R]
 Applicability of Advance ruling [Sec 245S]
 Advance Ruling to be void in certain circumstances [Sec. 245 T]
 Powers of Authority [Sec. 245 U]

Week 12 Objects and structure of the Service Tax

Service Tax was introduced in India through the Finance Act, 1994 (“the FA, 1994”), and continues
to be levied under that Act. No separate legislation exists, to this day, dealing with service tax
 Taxable event
 Charging Provision
 Taxable Service, Read iMagic Creativev. C. C. T., (2008) 2 SCC 614

Week 13 Objects and structure of the Customs Act

Customs duty is a tariff or tax imposed on the import of goods. As in the case of excise, the tax is not
imposed on the goods, but on the activity of import. Customs duties are levied under the Customs
Act, 1962, read with the Customs Tariff Act, 1975 (“CTA”).

 Types of Customs Duties

 Valuation of Goods [Sec 14, Customs Tariff Act, 1975]
 Duty Drawback [Sec 74, 75 Customs Tariff Act, 1975]

Week 14 Objects and structure of Central Excise

Excise is a duty on goods indigenously manufactured. The taxable event for Central Excise is
‘manufacture’. It is an indirect tax because even though it is levied on the manufacturer, the
manufacturer passes the burden of taxation on to the consumer of the goods by including the tax in
the price of the goods. Central Excise is levied in India through the Central Excise Act, 1944 (“the
CE Act”). Central Excise is levied by the Union under Entry 84 of List I of the Seventh Schedule.
 CENVAT, Goods , Salability of Goods, Read Union of India v. Delhi Cloth and General Mills
 Taxable event, Read Empire Industries v. Union of India, 20 ELT 179
 Concept of Manufacture, Read Union of India v. Delhi Cloth and General Mills, 1 ELT 199
 Concept of manufacturer
 Central Excise Tariff
 Valuation of excisable goods

Week 15 Objects and structure of VAT, the advent of GST in India: Introduction, key concepts

Value-added Tax is a system of taxation that seeks to avoid the cascading effect of taxation. For
instance, excise is imposed on the manufacture of goods, and such goods are used as raw materials
in another industry, and excise is imposed again on the finished goods. In the second stage, excise
duty is not only being imposed on the goods, but also on the excise duty used in manufacture of raw
materials. In a value-added tax system, a manufacturer is given credit for the tax paid on the inputs
for her industry, and avoids a tax on tax.

To conclude the unit of Indirect taxes, Goods and Services Tax (GST) will be discussed. This is a
system of indirect taxes to be implemented in India, the decision on which is pending. It will replace
all indirect taxes levied on goods and services by the Indian Central and State governments. It is
aimed at being comprehensive for most goods and services, thus avoiding multiple layers of taxation
that currently exist in India.

 Modified Value Added Tax

 MODVAT procedures
 Varieties of VAT
 Methods of computation of VAT (Addition, Subtraction, Tax Credit or Invoice)
 Principles of VAT
 Advantages of VAT system
 Problems in introducing VAT in federal countries like India
 The position in other federal countries
 Positive and Negative aspects of the present MODVAT scheme
 Background of GST
 Probable Implications