GST: GSTSEVA -Goods and Services Tax Gov India https://www.gstseva.com GST-LOGIN Thu, 27 Jun 2019 05:25:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.2 https://www.gstseva.com/wp-content/uploads/2017/07/gst-150x150.png GST: GSTSEVA -Goods and Services Tax Gov India https://www.gstseva.com 32 32 Now GST on Petrol, council has to decide https://www.gstseva.com/now-gst-on-petrol-council-has-to-decide Thu, 27 Jun 2019 05:25:03 +0000 https://www.gstseva.com/?p=9986 GST Council has to decide on levy of GST on Petroleum Products

Article 279A (5) of the Constitution provides that Goods and Services Tax Council shall recommend the date on which goods and services tax shall be levied on petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel. Thus while, petroleum products are constitutionally included under GST, the date on which GST shall be levied on such goods, shall be as per the decision of the GST Council. As per the section 9(2) of the CGST Act, inclusion of all excluded petroleum products, including petrol and diesel in GST will require recommendation of the GST Council.

All the States and Union Territories (UT) with Legislature are represented in the GST Council by their Minister-in-charge of Finance or Taxation or any other Minister nominated by the State/UT. Any decision regarding levy of GST on petroleum products has to be decided as per recommendation of the GST Council.

This Information was given by the Union Minister for Petroleum and Natural Gas Shri      Dharmendra Pradhan in a written reply in the Rajya Sabha today

]]>
Indirect Tax Updates https://www.gstseva.com/indirect-tax-updates Thu, 27 Jun 2019 05:21:52 +0000 https://www.gstseva.com/?p=9984 GST Compliance Calendar – July 2019

Return

Last Date

GSTR-1

Outward supply for the month of June 2019

11th July 2019

GSTR-5

Non-resident foreign taxpayers return for the month of June 2019

20th July 2019

GSTR-6

 Input service distributor for the month of June 2019

13th July 2019

GSTR-7

Tax Deducted at Source for June 2019

10th July 2019

GSTR-8

Tax Collected at Source by e-commerce operator for June 2019

10th July 2019

GSTR-3B 

Summary return tax payment for the month of June 2019

20th July 2019

35th GST Council Meeting was held on 21 June 2019 at New Delhi, after a long gap of more than three months. This was the first council meeting chaired by the re-elected government and India’s second woman Union Finance Minister, Mrs Nirmala Sitharaman. This GST Council meeting has been called at a time when the countdown to upcoming Union Budget 2019 is less than a month away. A lot of expectations piled up over months concerning various indirect tax issues will be addressed in this meeting.

Highlights of 35th GST council Meeting

Law and Procedure related changes

  • On account of difficulties being faced by taxpayers in furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C, the due date for furnishing these returns/reconciliation statements to be extended till 31.08.2019
  • To provide sufficient time to the trade and industry to furnish the declaration in FORM GST ITC-04, relating to job work, the due date for furnishing the said form for the period July, 2017 to June, 2019 to be extended till 31.08.2019

In order to give ample opportunity to taxpayers as well as the system to adapt, the new return system to be introduced in a phased manner, as described below:

  • Between July, 2019 to September, 2019, the new return system (FORM GST ANX-1& FORM GST ANX-2 only) to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1& FORM GSTR-3B as at present;
  • From October, 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having aggregate turnover of more than Rs. 5 crores in previous year) to file FORM GST ANX-1 on monthly basis whereas small taxpayers to file first FORM GST ANX-1 for the quarter October, 2019 to December, 2019 in January, 2020
  • For October and November, 2019, large taxpayers to continue to file FORM GSTR-3B on monthly basis and will file first FORM GST RET-01 for December, 2019 in January, 2020. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2;
  • From October, 2019, small taxpayers to stop filing FORM GSTR-3B and to start filing FORM GST PMT-08. They will file their first FORM GSTRET-01 for the quarter October, 2019 to December, 2019 in January, 2020; v. From January, 2020 onwards, FORM GSTR-3B to be completely phased out.
  • Rule 138E of the CGST rules, pertaining to blocking of e-way bills on non-filing of returns for two consecutive tax periods, to be brought into effect from 21.08.2019, instead of the earlier notified date of 21.06.2019.
  • Last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, to be extended from 30.04.2019 to 31.07.2019

Rate related Changes

  • Rate cut decision on electric vehicles, chargers & leasing thereof deferred; Committee to submit its report – The decision to cut GST rates for electric vehicles and electric chargers have been postponed to the next Council meeting. The matter has been referred to the Fitment Committee for checking the feasibility of the rate cut. At present, the GST rates for electric vehicles and electric chargers are 12% and 28% respectively.
  • Solar Power Generating Systems and Wind Turbines– In terms of order of the Hon’ble High Court of Delhi, GST Council directed that the issue related to valuation of goods and services in a solar power generating system and wind turbine be placed before next Fitment Committee.
  • Rate cut for lottery put on hold; Matter to be referred before an Attorney General – The previous council meet had not tabled the rate cut matter for lotteries. The 35th GST Council meeting discussed the matter at length and also brought to light two pending cases on this matter before the high court and supreme court respectively. Although the courts had referred the matter back to GST Council, the Council has decided to consult the Attorney General of India.

Issues other than Rate and Law changes

  • National Anti-profiteering Authority tenure extended by two years – Tenure of National Anti-profiteering Authority (NAA) was due to end by 30 November 2019. GST Council has further extended this tenure by two years, to enable it to take up all the pending cases. Hence, the authority can take up new cases in future due to rate cut issues, indicating that the GST Council has plans for further rationalisation of GST rates.
  • E-invoicing to start from January 2020 –The new system for raising all the tax invoices on the GST portal has received in-principle approval for implementation from 1 January 2020. This applies to only B2B invoicing. By this system, no separate e-way bill will be required in case of e-invoice. Returns to be framed from these e-invoices. A phased implementation is being worked out. Earlier, the government had fixed Rs 50 crore as the limit for the applicability of e-invoicing.
  • GSTAT to be GST Appellate Tribunal- The Council took a decision regarding location of the State and the Area Benches for the Goods and Services Tax Appellate Tribunal (GSTAT) for various States and Union Territories with legislature. It has been decided to have a common State Bench for the States of Sikkim, Nagaland, Manipur and Arunachal Pradesh.

 

Important Cases decided

 

Carrying Lorry receipt is not a requirement under rule 138A- Authority detained the vehicle as well as the goods of the assessee on the ground that the lorry receipt issued by the transporter was photocopy without computerized serial number and contact number details. Reference was made to Rule 138A(1) of CGST Act, 2017 which stipulates that the person in-charge of conveyance is required to carry:

  • the invoice or bill of supply or delivery challan, as the case may be;
  • a copy of the e-way bill in physical form or the e-way bill number in electronic form
  • In so far as the Lorry Receipt issued by the transporter is concerned, carrying the same is not a requirement prescribed under rule 138A(1) of the rules.

By way of further interim relief, the Competent Authority was to be directed to forthwith release the truck along with the goods contained therein (M/s FS Enterprise Vs. State of Gujarat [2019] 105 taxmann.com 303 (GUJARAT)

AAR cannot give ruling on “Place of supply” – The Applicant is engaged in manufacture of Hand-made Cutting Knives for Shoe industries and they serve overseas as well as local customers. They have stated that they get orders from overseas customers, but delivery is made locally (within Tamil Nadu) and payment is received in foreign currency.  It was held that the issue for which Advance Ruling is sought depends on the ‘Place of Supply’ of the goods, which is not in the ambit of this authority.  (Dagger Die Cutting (India) (P.) Ltd. [2019] 105 taxmann.com 319 (AAR-TAMILNADU)

Sweetshop is not rendering composite supply of services – The applicant is running sweetshop and a restaurant in two distinctly marked separate parts of the same premises and is also maintaining separate accounts as well as separate billings for the two types of business. The goods sold from the sweetshop are being billed exclusively as sweetshop sales; whereas the goods supplied from the restaurant are billed under restaurant head.  It was held that Sweetshop shall be treated as extension of restaurant and supplies thereof shall be treated as supply of service. (Kundan Mishthan Bhandar [2019] 105 taxmann.com 364 (AAR-UTTARAKHAND) 

Nodal Officer to consider error committed in TRAN-1 due to taxpayers – Assessee’s after receiving report from the Chartered Accountant, appointed for undertaking audit of the Cenvat Credit for the period between Apr’16 to June’17, realised that they had not reported credit of certain eligible credits in ER-1 and consequently in Form GST TRAN- 1 due to change in ERP Software in 2016-17, which had been already recorded in the books of account.  In this case it was held that even on the technical glitches arising out of the assessee’s inadvertence required to be addressed by Nodal Officers appointed in terms of Circular instructions dated 3-4-2018 . It would be appropriate for this court to direct the petitioner to approach the Nodal Officer appointed for State of Karnataka in terms of Circular dated 3-4-2018. Hence, the writ petition is disposed of with a direction to the petitioner to approach the jurisdictional Nodal Officer.  (M/s Kongovi Pvt. Ltd. Vs. Union of India  [2019] 105 taxmann.com 267 (KARNATAKA)

 Customs

 

Seeks to further amend notification No. 50/2017-Customs dated 30.06.2017 to implement the imposition of retaliatory duties on 28 specified goods originating in or exported from USA and preserving the existing MFN rate for all these goods for all countries other than USA- This notification shall come into force from the 16th day of June, 2019. Notification No.17/2019-Customs

 

Seeks to increase the tariff rate of customs duty on lentils, boric acid and laboratory reagents by amending First schedule to the Customs Tariff Act, 1975 under emergency powers under section 8A of the Customs Tariff Act.

In the First Schedule to the said Customs Tariff Act,-

 

(1) in Chapter 7, for the entry in column (4) occurring against tariff item 0713 40 00, the entry “50%” shall be substituted;

(2) in Chapter 28, for the entry in column (4) occurring against tariff item 2810 00 20, the entry “27.5%” shall be substituted;

(3) in Chapter 38, for the entry in column (4) occurring against tariff item 3822 00 90, the entry “30%” shall be substituted. Notification No.16/2019-Customs

 

Manufacture and other operations in Warehouse Regulations, 2019– In exercise of the powers conferred under section 157 read with section 65 of the Customs Act, 1962 (52 of 1962), and in supersession of the Manufacture and Other Operations in Warehouse Regulations, 1966, except as respects things done or omitted to be done before such supersession, the Central Board of Indirect Taxes and Customs (hereinafter referred as “Board”). These regulations may be called the Manufacture and Other Operations in Warehouse Regulations, 2019. They shall come into force on the date of their publication in the Official Gazette Notification No.44/2019-Customs (NT)

 

Seeks to amend notification No. 23/2013-Customs(ADD), dated the 10th October, 2013 to extend the anti-dumping duty on ductile iron pipes originating in, or exported from China PR till 9th October, 2019Notification 25 /2019-Customs (ADD)

 

Seeks to extend levy of anti-dumping duty till 09.07.2019, on imports of ” Paracetamol” originating in or exported from china PR, extended vide notification No. 39/2018 Customs (ADD), dated the 20th August, 2018, in pursuance of order of Hon’ble High Court of Gujarat in the matter of SCA 5278/2019. Notification 26 /2019-Customs (ADD)

Seeks to impose definitive countervailling duty on “New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16″ used in buses and lorries/trucks” originating in or exported from, People’s Republic of China. Notification  1/2019-Customs(CVD)

 

 

Central Excise  & Service Tax

 

 

Revised Procedure for electronic filing of Central Excise returns and for electronic payment of Excise duty and Service tax arrears under the new portal www.cbic-gst.gov.in. –  Consequent to the roll out of GST w.e.f 01st July 2017 , GST tax payers are required to transact through common portal www.cbic-gst.gov.in. the tax payers who deals in goods still attracting Excise even after  01st July 2017 continue to access  www.cbic-gst.gov.in to register, file retuns, file refund applications as well as make payments. Service tax payers also access  www.cbic-gst.gov.in to pay arrears as well to file ST-3 along with applicable interest / penalty etc. During migration of data from ACES application to ACES GST application from 02ndMay-2019 to 25th May 2019 both tax payers and departmental officers not able to do any transactions. The taxpayers continue to make payment through e-payment menu or directly on EASIEST portal. On the completion of  integration and migration of data, the application will be available for taxpayers and departmental officer at www.cbic-gst.gov.in and https:/ appstore.cbec.gov.in(Circular no. 1069/2/2019 CX dated 08th May 2019)

 

  Jai Hind

(Naincy Bhalla)

naincybhalla1@gmail.com

]]>
GST EVASION- Government propose to integrate Fastag https://www.gstseva.com/gst-evasion-government-propose-to-integrate-fastag Tue, 25 Jun 2019 05:42:02 +0000 https://www.gstseva.com/?p=9981 New Delhi: PIB report

The Government proposes to integrate a FASTag Bank Mechanism with e-way bill and Logistic Data Services to track movement of goods and check GST evasion. The Government is contemplating integration of E-Way Bill mechanism of GST with FASTag System of National Highway Authority of India (NHAI). The aspect of Logistic Databank integration with FASTag System is being examined. 

A Committee of Officers comprising of officers from Central Government, State Governments, GSTN (Goods and Services Tax Network), NIC (National Informatics Centre), GST Council, to examine the issue of use of RFID data for strengthening of E-Way Bill mechanism under GST, was formed by GST Council. The representatives of NHAI and NPCI (National Payments Corporation of India) were also co-opted in the committee. The Committee of Officers has submitted its report to the GST Council, recommending integration of FASTag system with E-Way Bill mechanism. The recommendations of the Committee are under consideration by GST Council. Further, with regard to integration of FASTag with LDB, a committee comprising of Central Board and Indirect Taxes and Customs (CBIC), NHAI & its associates, NPCI, GSTN, NIC, Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) & its associates was formed to examine the feasibility of the same. The committee has submitted its report, which is being examined.

This was stated by the Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman in a written reply to a question in Lok Sabha today.

]]>
Know how many GST returns filled till now https://www.gstseva.com/know-how-many-gst-returns-filled-till-now Tue, 25 Jun 2019 05:33:51 +0000 https://www.gstseva.com/?p=9979 New Delhi: PIB, Report, 24 june 2019 Implementation of GST

The implementation of GST has led to the removal of cascading effect of taxes in the economy as well as promoting free movement of goods across States, thereby creating “one nation, one market”. A simplified tax regime has resulted in reduced compliance burden for taxpayers and promoting ease of doing business in the country.

Return filing is a continuous process and technical glitches and system related issues are addressed by the Goods and Services Tax Network (GSTN) to ensure smooth filing. Also, taxpayers committed errors while filing returns due to lack of familiarity with the new system. The data regarding the number of returns filed until 17.06.2019 is as follows:


Return Form Number of returns filed till 17.06.2019

FORM GSTR-1 9,66,74,296

FORM GSTR-3B 17,58,18,725

FORM GSTR-4 99,93,521

 

In order to address these issues, the Government took the following steps:

 

  1. The last date for filing of details of outward supplies in FORM GSTR-1 and that of FORM GSTR-3B has been extended from time to time for the benefit of taxpayers.
  2. Late fees paid for not filing return on due date for the months of July, 2017 to September, 2017 was exempted. For subsequent months, the amount of late fees payable by taxpayers has been reduced.
  3. The Government has waived late fees for non-filers of FORM GSTR-1 and FORM GSTR-3B for the period from July, 2017 till September, 2018, if such forms are filed from 22.12.2018 to 31.03.2019.
  4. Based on the feedback received from taxpayers, Goods and Service Tax Network (GSTN) regularly updates the User Interface for filing of returns so as to improve user experience. For example, a Questionnaire for filing FORM GSTR-3B has been introduced to avoid errors by taxpayers. Also, NIL returns can be filed with just one click.
  5. An IT-Grievance Redressal Committee has been put in place to address the difficulties faced by taxpayers owing to technical glitches on the GST portal. It has the mandate to approve and recommend to the GSTN the steps to be taken to redress the grievance and provide relief to taxpayers.
  6. Awareness campaigns such as seminars, workshops, open houses, use of social media, advertisements in print and electronic media etc. were carried out across the country to educate the taxpayers about return filing and other legal provisions under GST. Help Centres have also been established to provide assistance to taxpayers in return filing and related issues.

 

This was stated by the Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman in a written reply to a question in Lok Sabha today.

]]>
Due date of GSTR 9 Annual Return Extended https://www.gstseva.com/due-date-of-gstr-9-annual-return-extended Sat, 22 Jun 2019 06:18:56 +0000 https://www.gstseva.com/?p=9975

GST Council decision relating to changes in law and procedure

Posted On: 21 JUN 2019 7:53PM by PIB Delhi

The 35th GST Council Meeting was held here today under the chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. This was the first meeting of the Council after the swearing in of the new Government. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Revenue Secretary Shri Ajay Bhushan Pandey and other senior officials of the Ministry of Finance. The GST Council recommended the following changes related to law and procedure:

In order to give ample opportunity to taxpayers as well as the system to adapt, the new return system to be introduced in a phased manner, as described below:

    1. Between July, 2019 to September, 2019, the new return system (FORM GST ANX-1&FORM GST ANX-2 only) to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1&FORM GSTR-3B as at present;
    2. From October, 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having aggregate turnover of more than Rs. 5 crores in previous year) to file FORM GST ANX-1 on monthly basis whereas small taxpayers to file first FORM GST ANX-1 for the quarter October, 2019 to December, 2019 in January, 2020;
    3. For October and November, 2019, large taxpayers to continue to file FORM GSTR-3B on monthly basis and will file first FORM GST RET-01 for December, 2019 in January, 2020. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2;
    4. From October, 2019, small taxpayers to stop filing FORM GSTR-3B and to start filing FORM GST PMT-08. They will file their first FORM GST-RET-01 for the quarter October, 2019 to December, 2019 in January, 2020;
    5. From January, 2020 onwards, FORM GSTR-3B to be completely phased out

On account of difficulties being faced by taxpayers in furnishing the annual returns in FORM GSTR-9FORM GSTR-9A and reconciliation statement in FORM GSTR-9C, the due date for furnishing these returns/reconciliation statements to be extended till 31.08.2019

To provide sufficient time to the trade and industry to furnish the declaration in FORM GST ITC-04, relating to job work, the due date for furnishing the said form for the period July, 2017 to June, 2019 to be extended till 31.08.2019

Certain amendments to be carried out in the GST laws to implement the decisions of the GST Council taken in earlier meeting

Rule 138E of the CGST rules, pertaining to blocking of e-way bills on non-filing of returns for two consecutive tax periods, to be brought into effect from 21.08.2019, instead of the earlier notified date of 21.06.2019

Last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, to be extended from 30.04.2019 to 31.07.2019

]]>
GST rate changes https://www.gstseva.com/gst-rate-changes Sat, 22 Jun 2019 06:10:35 +0000 https://www.gstseva.com/?p=9972

GST Council decisions on rate changes on supply of good and services

Posted On: 21 JUN 2019 7:52PM by PIB Delhi
 

The 35th GST Council Meeting was held here today under the chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. This was the first meeting of the Council after the swearing in of the new Government. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Revenue Secretary Shri Ajay Bhushan Pandey and other senior officials of the Ministry of Finance. The Council has recommended following GST rate related changes on supply of goods and services.

Electric Vehicles

On issues relating to GST concessions on electric vehicle, charger and hiring of electric vehicle, the Council recommended that the issue be examined in detail by the Fitment Committee and brought before the Council in the next meeting.

Solar Power Generating Systems and Wind Turbines

In terms of order of the Hon’ble High Court of Delhi, GST Council directed that the issue related to valuation of goods and services in a solar power generating system and wind turbine be placed before next Fitment Committee. The recommendations of the Fitment Committee would be placed before the next GST Council meeting.

Lottery

Group of Ministers (GoM) on Lottery submitted report to the Council. After deliberations on the various issues on rate of lottery, the Council recommended that certain issues relating to taxation (rates and destination principle) would require legal opinion of Learned Attorney General.

]]>
GST FRAUD – TWO FIRMS INVOLVE – One Person Arrested https://www.gstseva.com/gst-fraud-two-firms-involve-one-person-arrested Sat, 22 Jun 2019 06:02:44 +0000 https://www.gstseva.com/?p=9970 The Directorate General of GST Intelligence Hqrs. arrests one person in connection with the taking by two firms ITC fraudulently to the tune of more than Rs.16 Crore

 

Posted On: 21 JUN 2019 7:10 PM by PIB Delhi
 
tax fraud gst

imaginary pic

The Directorate General of GST Intelligence Hqrs. (DGGI Hqrs.) has arrested one person, namely, Sh. Munish Kumar, Partner of M/s Sushil Kumar Munish Kumar, Hisar, Haryana and controller of M/s Sushil Kumar Munish Kumar & Co., Ahmedabad. Both of the said firms had taken ITC fraudulently to the tune of more than Rs.16 Crore involving invoice value of Rs.322 Crore on the strength of invoices issued by non-existent fake firms. The said two firms thereafter, passed on such fraudulently taken ITC to some of the well established Cotton Yarn Spinners who availed of the same to discharge their GST liability against the outward supply, with an ulterior motive to defraud the Government Exchequer. Shri Munish Kumar has during the investigations conducted by the DGGI Hqrs. admitted that both of the said firms had taken ITC fraudulently on the invoices issued by non-existent fake firms and then passed on such ITC to the various Spinners. Thus, Sh. Munish Kumar has committed offences under the provisions of Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017; which are cognizable and non-bailable offences under Section 132(5) of the CGST Act, 2017, being punishable under Section 132(1)(i) of the CGST Act, 2017. Consequently, Sh. Munish Kumar was arrested on 21.06.2019 under Section 69(1) of the CGST Act, 2017, following which he was produced before the CMM, New Delhi at Patiala House Courts. The CMM has consigned Sh. Munish Kumar to judicial custody of 14 days. During the investigations conducted so far into the fake billing racket in the cotton industry, the DGGI Hqrs. has recovered an amount of Rs.28 Crore towards the GST evaded. Further investigations in the matter are in progress.

]]>
GST Transition plan for new GST returns. https://www.gstseva.com/gst-transition-plan-for-new-gst-returns Fri, 14 Jun 2019 05:55:59 +0000 https://www.gstseva.com/?p=9966 Transition plan to the new GST Return

The GST Council in its 31st meeting decided that a new GST return system will be introduced to facilitate taxpayers. In order to ease transition to the new return system, a transition plan has been worked out. The details of the indicative transition plan are as follows: –

  1. In May, 2019 a prototype of the offline tool has already been shared on the common portal to give the look and feel of the tool to the users. The look and feel of the offline tool would be same as that of the online portal. Taxpayers may be aware that there are three main components to the new return – one main return (FORM GST RET-1) and two annexures (FORM GST ANX-1 and FORM GST ANX-2).
  2. From July, 2019, users would be able to upload invoices using the FORM GST ANX-1 offline tool on trial basis for familiarisation. Further, users would also be able to view and download, the inward supply of invoices using the FORM GST ANX-2 offline tool under the trial program. The summary of inward supply invoices would also be available for view on the common portal online. They would also be able to import their purchase register in the Offline Tool and match it with the downloaded inward supply invoices to find mismatches from August 2019.
  3. Between July to September, 2019 (for three months), the new return system (ANX-1 & ANX-2 only) would be available for trial for taxpayers to make themselves familiar. This trial would have no impact at the back end on the tax liability or input tax credit of the taxpayer. In this period, taxpayers shall continue to fulfil their compliances by filing FORM GSTR-1 and FORM GSTR-3B i.e. taxpayers would continue to file their outward supply details in FORM GSTR-1 on monthly / quarterly basis and return in FORM GSTR-3B on monthly basis. Non-filing of these returns shall attract penal provisions under the GST Act.
  4. From October, 2019 onwards, FORM GST ANX-1 shall be made compulsory and FORM GSTR-1 would be replaced by FORM GST ANX-1. The large taxpayers (i.e. those taxpayers whose aggregate annual turnover in the previous financial year was more than Rs. 5 Crore) would upload their monthly FORM GST ANX-1 from October, 2019 onwards. However, the first compulsory quarterly FORM GST ANX-1 to be uploaded by small taxpayers (with aggregate annual turnover in the previous financial year upto Rs. 5 Crore) would be due only in January, 2020 for the quarter October to December, 2019. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards.  FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2.
  5. For October and November, 2019, large taxpayers would continue to file FORM GSTR-3B on monthly basis. They would file their first FORM GST RET-01 for the month of December, 2019 by 20th January, 2020.
  6.  The small taxpayers would stop filing FORM GSTR-3B and would start filing FORM GST PMT-08 from October, 2019 onwards. They would file their first FORM GST-RET-01 for the quarter October, 2019 to December, 2019 from 20th January, 2020.
  7. From January, 2020 onwards, all taxpayers shall be filing FORM GST RET-01 and FORM GSTR-3B shall be completely phased out.

  Separate instructions shall be issued for filing and processing of refund applications between October to December, 2019.

]]>
GST on education https://www.gstseva.com/gst-on-education Thu, 06 Jun 2019 07:22:23 +0000 https://www.gstseva.com/?p=9955 GST- Taxation on Education Services

What is Education?

“Education” is not defined in the CGST Act but as per Apex Court decision in “Loka Shikshana Trust v/s CIT”, education is process of training and developing knowledge, skill and character of students by normal schooling.

Applicability of GST on educational services?

Should GST levy on education- In simple one word answer is a big NO. When government talks about education for all than any tax on it seems unreasonable. Also when there is an obligation to provide free and compulsory elementary education to all education under right to education, charging tax is always sensitive.

Thus, to promote education, it would be beneficial if educational services are exempted from tax.

However, commercialisation of education is also a reality. The distinction between core and ancillary education is blurring and education is now an organised industry with huge revenues. The GST Act tries to maintain a fine balance whereby core educational services provided and received by educational institutions are exempt and other services are sought to be taxed at the standard rate of 18%.

Educational services in GST

Education Services are classified in heading 9992 (as per Notification No. 11/2017-Central Tax (Rate)) and are further sub-divided into six groups (as per the Annexure to the same notification) comprising of Pre-primary, primary, secondary, higher, specialised and other educational & support services as below in the table:

Heading and Group

Service Code

Service Description

Heading no. 9992

 

Education services

Group 99921

 

Pre-primary education services

 

999210

Pre-primary education services

Group 99922

 

Primary education services

 

999220

Primary education services

Group 99923

 

Secondary Education Services

 

999231

Secondary education services, general

 

999232

Secondary education services, technical and vocational

Group 99924

 

Higher education services

 

999241

Higher education services, general

 

999242

Higher education services, technical

 

999243

Higher education services, vocational

 

999249

Other higher education services

Group 99925

 

Specialised education services

 

999259

Specialised education services

Group 99929

 

Other education & training services and educational support services

 

999291

Cultural education services

 

999292

Sports and recreation education services

 

999293

Commercial training and coaching services

 

999294

Other education and training services n.e.c

 

999295

services involving conduct of examination for admission to educational institutions

 

999299

Other Educational support services

Rate of GST on Educational Services

Rate of GST The rates of GST on education services (as per Notification No. 11/2017-Central Tax (Rate), Notification No. 11/2017-Central Tax (Rate) and Notification No. 12/2017-Central Tax (Rate) all dated 28.06.2017 as amended) are as below:

Chapter/ Section/ Heading

9992

Description of Service

 

 

Education Services

Rate / Notification

 

 

18% ( 9% Central Tax

+ 9% State Tax)/ Serial No. 30 of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017

 

9992

Services provided –

(a) by an educational

institution to its students,

faculty and staff;

(b) to an educational

institution, by way of, –

(i) transportation of

students, faculty and staff;

(ii) catering, including any

mid-day meals scheme

sponsored by the Central

Government, State

Government or Union

territory;

(iii) security or cleaning

or housekeeping services

performed in such

educational institution;

(iv) services relating to

admission to, or conduct

of examination by, such

institution; up to higher

secondary: Provided that

nothing contained in

entry (b) shall apply to

an educational institution

other than an institution

providing services by way

of pre-school education

and education up to

higher secondary school or

equivalent

NIL / Serial No. 66

of Notification No.

12/2017- Central Tax

(Rate) dated 28th

June, 2017

 

 

 

 

 

 

 

Chapter/ Section/ Heading

Description of Service

Rate / Notification

 

9992

Services provided  by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme: – (a) two year full time Post Graduate Programmes in Management for the

Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management;

(b) fellow programme in Management; (c) five year integrated programme in Management.

NIL / Serial No. 67 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017

5%/ Serial No. 257

of Schedule I of

the Notification

No.1/2017-Central

Tax (Rate) dated

28th June, 2017

 

90 or any

chapter

Technical aids for

education, rehabilitation,

vocational training and

employment of the blind

such as Braille typewriters,

braille watches, teaching

and learning aids, games

and other instruments and

vocational aids specifically

adapted for use of the

blindBraille instruments,

paper etc.

 

 

 

9023

Instruments, apparatus

and models, designed for

demonstrational

purposes (for example, in

education or exhibitions),

unsuitable for other

uses

28 %/ Serial No. 191

of Schedule IV of

the Notification

No.1/2017-Central

Tax (Rate) dated

28th June, 2017

 

Meaning of Educational Institute in GST

Educational Institution means an institution providing services by way of:

  • Pre-school education and education up to higher secondary school or equivalent;
  • Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
  • Education as a part of an approved vocational education

Within   the   term   “educational   institution”,   sub-clause   (ii)   covers institutions   providing   services   by   way   of  education   as   a   part   of curriculum for obtaining a qualification recognised by any law for the time being in force.  

This is an area where doubts have persisted as to what  would  be  the  meaning  of  “education  as  part  of  curriculum for obtaining  qualification  recognised  by  law”.   GST  on  services  being  a legacy  carried  forward  from  the  Service Tax  regime,  the  explanation given  in  the  Education  guide  of  2012  can  be  gainfully  referred  to understand the meaning of the term which reads as under;

What is the meaning of ‘education as a part of curriculum for obtaining a qualification recognized by law’?

It means that only such educational services are in the negative list as are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification.

 

Are services provided by way of education as a part of a prescribed curriculum for obtaining a qualification recognized by a law of a foreign country covered in the negative list entry?

 No. To be covered in the negative list a course should be recognized by an Indian law.

 Vocational education course under GST

Within  the  term  “educational  institution”,  sub-clause  (iii)  covers institutions   providing   services   by   way   of  education   as   a   part of   approved   vocational   course,   and   institutions   providing   the above courses will come within the ambit of the term educational institution.  Notification  No.  12/2017-  Central  Tax  (Rate)  dated  28th June, 2017, defines approved vocational education course as under: An  “approved vocational education course” means, –

  • A course run by an industrial training institute or an industrial training center affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or
  • A Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered  with the Directorate General of Training, Ministry of Skill Development and

It is to be noted that only those institutions whose operations conform to the specifics given in the definition of the term “Educational Institution”, would be  treated  as  one  and  entitled to avail exemptions provided by the law. This would mean that private coaching centers or other unrecognized institutions, though self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions available to an educational institution.

Thus, educational institutions up to Higher Secondary School level do not suffer GST on output services and also on most of the important input services. Some of the input services  like  canteen,  repairs  and maintenance etc. provided by private players to educational institutions were subject to service tax in pre-GST era and the same tax treatment has been continued in GST regime.

Thus output services of lodging/boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualification recognised by law, are fully exempt from GST. Annual subscription/fees charged as lodging/ boarding charges by such educational institutions from its students for hostel accommodation shall therefore, not attract GST.

Similarly, output services related to the specified courses provided by IIM’s would be exempt. Executive Development Programs run  by the IIM’s are specifically excluded, hence such courses would be subject to GST.

Input service for Educational Services

Regarding, input services, it may be noted that where output services are  exempted,  the  Educational  institutions  may  not  be  able  to  avail credit  of  tax  paid  on  the  input  side.  The  four  categories  of  services known as Auxiliary Education services, which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, have been exempted (as per Notification No. 12/2017-  Central  Tax  (Rate)).  Auxiliary  education  services  other  than what is specified above would not be entitled to any exemption.  The exemption also comes with a rider.  Such services are exempt only for educational  institutions  providing  services  by  way  of  education  upto higher secondary or equivalent. (from pre-school to HSC).  Thus if such auxiliary  education  services  are  provided  to educational  institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are providing qualification recognized by law for the time being in force shall not be liable to GST.

 

What will be the Place of Supply of Educational Services where the location of supplier of services and the location of the recipient of services is in India?

 As per section 12(6) of the IGST Act, 2017, the place of supply of services provided by way of admission to an educationalor any other place and services ancillary thereto, shall be the place where the event is actually heldor such other place is located.

As per section 12(7) of the IGST Act, 2017, the place of supply of services provided by way of, — (a) organisation of a cultural, artistic, sporting, scientific,   educational   or   entertainment   event   including   supply   of services  in  relation to  a  conference,  fair,  exhibition,  celebration  or similar  events;  or  (b)  services  ancillary  to  organisation  of  any  of the events or services referred to in clause (a), or assigning of sponsorship to such events: –

  • To a registered person, shall be the location of such person;
  • To a person other than a registered person, shall be the place where the event is actually held

and if the event is held outside India, the place of supply shall be the location of the recipient.

What will be the Place of supply of Educational Services where the location of the supplier of services or the location of the recipient of services is outside India?

 As  per  section  13(5)  of  the  IGST  Act,  2017,  the  place  of  supply  of services  supplied  by  way  of  admission  to,  or organisation  of  a cultural,  artistic,  sporting,  scientific,  educational  or  entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.

 

]]>
GST- clarifications on annual return GSTR 9 https://www.gstseva.com/gst-clarifications-on-annual-return-gstr-9 Wed, 05 Jun 2019 05:07:55 +0000 https://www.gstseva.com/?p=9953 Clarifications on filing of Annual Return (FORM GSTR-9)

The last date for filing of Annual return in FORM GSTR-9 is 30th June 2019. The trade and industry have raised certain queries with respect to filing of this Annual return which are being clarified as follows:

    1. Information contained in FORM GSTR-2A as on 01.05.2019 shall be auto-populated in Table 8A of FORM GSTR-9.
    2. Input Tax Credit on inward supplies shall be declared from April 2018 to March 2019 in Table 8C of FORM GSTR-9.
    3. Particulars of the transactions for FY 2017-18 declared in returns between April 2018 to March 2019 shall be declared in Pt. V of FORM GSTR-9. Such particulars may contain details of amendments furnished in Table 10 and Table 11 of FORM GSTR-1.
    4. It may be noted that irrespective of when the supply was declared in FORM GSTR-1, the principle of declaring a supply in Pt. II or Pt. V is essentially driven by when was tax paid through FORM GSTR-3B in respect of such supplies. If the tax on such supply was paid through FORM GSTR-3B between July 2017 to March 2018 then such supply shall be declared in Pt. II and if the tax was paid through FORM GSTR-3B between April 2018 to March 2019 then such supply shall be declared in Pt. V of FORM GSTR-9.
    5. Any additional outward supply which was not declared by the registered person in FORM GSTR-1 and FORM GSTR-3B shall be declared in Pt.II of the FORM GSTR-9. Such additional liability shall be computed in Pt.IV and the gap between the “tax payable” and “Paid through cash” column of FORM GSTR-9 shall be paid through FORM DRC-03.
    6. Many taxpayers have reported a mismatch between auto-populated data and the actual entry in their books of accounts or returns. One common challenge reported by taxpayer is in Table 4 of FORM GSTR-9 where details may have been missed in FORM GSTR-1 but tax was already paid in FORM GSTR-3B and therefore taxpayers see a mismatch between auto-populated data and data in FORM GSTR-3B. It may be noted that auto-population is a functionality provided to taxpayers for facilitation purposes, taxpayers shall report the data as per their books of account or returns filed during the financial year.
    7. Many taxpayers have represented that Table 8 has no row to fill in credit of IGST paid at the time of import of goods but availed in the return of April 2018 to March 2019. Due to this, there are apprehensions that credit which was availed between April 2018 to March 2019 but not reported in the annual return may lapse. For this particular entry, taxpayers are advised to fill in their entire credit availed on import of goods from July 2017 to March 2019 in Table 6(E) of FORM GSTR-9 itself.
    8. Payments made through FORM DRC-03 for any supplies relating to period between July 2017 to March 2018 will not be accounted for in FORM GSTR-9 but shall be reported during reconciliation in FORM GSTR-9C.

All the taxpayers are requested to file their Annual Return (FORM GSTR-9) at the earliest to avoid last minute rush.

]]>
Latest Indirect Tax Updates https://www.gstseva.com/latest-indirect-tax-updates Wed, 05 Jun 2019 05:00:36 +0000 https://www.gstseva.com/?p=9951 GST Compliance Calendar – June 2019
Return Last Date
GSTR-1 Outward supply for the month of May 2019 11th June 2019
GSTR-5 Non-resident foreign taxpayers return for the month of May 2019 20th June 2019
GSTR-6  Input service distributor for the month of May 2019 13th June 2019
GSTR-7 Tax Deducted at Source for May 2019 10th June 2019
GSTR-8 Tax Collected at Source by e-commerce operator for May 2019 10th June 2019
GSTR-3B  Summary return tax payment for the month of May 2019 20th June 2019

 

  • Time provided to apply for revocation of cancellation of registration – A one-time opportunity to apply for revocation of cancellation of registration has been provided to persons whose registrations were cancelled till 31-3-2019 due to non-furnishing of returns in Form GSTR-3B or GSTR-4. Such persons can apply for revocation of cancellation on or before 22-7-20 As per new proviso in CGST Rule 23(1), if registration is cancelled with retrospective effect, returns, for the period from effective date of cancellation till date of order of revocation of cancellation, shall be filed within 30 days from date of order of revocation (Removal of Difficulty Order (RoD) No. 05/2019-Central Tax).

 

  • Ongoing project and liability on cancellation of bookings clarified: In cases where more than one completion certificate is issued for one real estate project, it will be considered as an ongoing project unless all completion certificates, for every part (block) of the project, are received for the entire proj Clarifying so, FAQ released by CBIC with reference F. No. 354/32/2019-TRU, dated 7-5-2019 also states that where commencement certificate is issued prior to 1-4-2019.

  • GST applicability on Seed Certification Tags- clarified – Seed testing and certification is a multi-stage process, the charges for which are collected from the seed producers at different stages. Supply of seed tags to the seed producer is nothing but an element of the one integrated supply of seed testing and certification. All the above charges, including those for issue of seed certificates/tags by the Seed Certification Agency of Tamil Nadu and Uttarakhand to the seed producing organization/ companies are collected for the composite supply of seed testing and certification, which is exempt under Notification No. 12/2017-Central Tax (Rate) Sl. No. 47 (services by Central/State Governments by way of testing/certification relating to safety of consumers and public at large, required under any law). This clarification would apply to supply of seed tags by seed testing and certification agencies of other states also following similar seed testing and certification procedure (F. No. 354/27/2019-TRU ) guidance

  • Seeks to extend the due date for furnishing FORM GSTR-3B for the month of for the month of April, 2019 for registered persons in specified districts of Odisha till 20.06.2019– Following amendment in notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2019 – Central Tax, dated the 07th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.195(E), dated the 07th March, 2019, namely:– In the said notification, in the first paragraph, the following proviso shall be inserted, namely:

“Provided that the return in FORM GSTR-3B of the said rules for the month of April, 2019 for registered persons whose principal place of business is in the districts of Angul, Balasore, Bhadrak , Cuttack , Dhenkanal , Ganjam, Jagatsinghpur, Jajpur, Kendrapara, Keonjhar, Khordha, Mayurbhanj, Nayagarh and Puri in the State of Odisha shall be furnished electronically through the common portal, on or before the 20th June, 2019.” (Notification No. 24/2019 – Central Tax)

  • Seeks to extend the due date for furnishing FORM GSTR-1 for taxpayers having aggregate turnover more than Rs. 1.5 crores for the month of April, 2019 for registered persons in specified districts of Odisha till 10.06.2019 – Following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2019- Central Tax, dated the 07th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) vide number G.S.R. 194(E), dated the 07th March, 2019, namely:– In the said notification, in the first paragraph, the following proviso shall be inserted, namely

“Provided that the details of outward supply of goods or services or both in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017 for the month of April, 2019 for registered persons whose principal place of business is in the districts of Angul, Balasore, Bhadrak , Cuttack , Dhenkanal , Ganjam, Jagatsinghpur, Jajpur, Kendrapara, Keonjhar, Khordha, Mayurbhanj, Nayagarh and Puri in the State of Odisha shall be furnished electronically through the common portal, on or before the 10th June, 2019.” (Notification No. 23/2019 – Central Tax)

Important Cases decided

  • Re-credit of amount of rejected refund claim to the electronic credit ledger in the absence of mechanism on GST portal – The GST law provide for re-credit of ITC on rejection of refund claim. However, GST portal did not have functionality regarding the same. The Court held that the revenue cannot deny re-credit of the amount on account of lack of mechanism on GST portal. Accordingly, the taxpayer was given option to take credit of the said amount manually in its return in case such amount is not credited electronically. Garden Silk Mills Limited v. UOI, 2019-VIL-165-GUJ

 

  • Nature of business: Manufacturer – Complaint: There was a reduction in rate of tax in November 2017. The taxpayer neither reduced the price of the goods nor passed on the benefit of rate reduction to the consumer. Held Profiteering: No Reasoning: The taxpayer did not resort to profiteering as the taxpayer maintained base price of the goods post rate reduction. (Rosata Vitrified Private Limited, 2019-VIL-18-NAA ) The NAA has consistently held that there is no profiteering where base price of goods has remained same after introduction of GST or rate changes in GST regime.

  • Interest payable on total tax liability including portion of ITC available for set off- Telangana High Court has held that liability to pay interest under Section 50 of the CGST Act, 2017 is confined not only to the net tax liability. The High Court held that interest is payable on total tax liability including the portion liable to be set-off against Input Tax Cred The High Court in this regard observed that until a return is filed as self-assessed, there is no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. (Megha  Engineering  & Infrastructures Ltd. v. Commissioner – 2019-VIL-175-TEL)

  • Detention of conveyance Carrying LR issued by transporter is not mandatory –

Gujarat High Court has directed to release the truck carrying goods which was detained by authorities under Section 129(1) of the CGST Act. The truck was detained on the ground that the lorry receipt issued by the transporter was a photocopy without the computerized serial number and contact number details. The Court observed that carrying lorry receipt issued by the transporter is not mandatory under Rule 138A (1) of CGST Rules, 2017 and that the detention was without the authority of law. (F S Enterprise v. State of Gujarat – 2019-VIL-154-GUJ)

 

  • Seizure of goods from premises of job-worker, when not valid: Observing that allegations regarding evasion of tax, against person engaged in the business of hallmarking, can only be with reference to its business activity, Kerala High Court has held that seizure of the gold jewellery, belonging to petitioners but seized from the premises of the hallmarker, was not justified. The Court also observed that goods entrusted by principal, with hallmarker, and covered by delivery challan, cannot be subject matter of confiscation order under Section 130 of the CGST Act, passed in relation to the hallmarker. (Josco Bullion Traders P Ltd. v. Commissioner – 2019-VIL-151-KER)

 

  • Imprisonment Power invokable only post determination of demand: Madras High Court has held that power to punish under Section 132 of the CGST Act, relating to imprisonment, is invocable only when it is established post determination of demand that assessee has committed offence. The High Court held that when recovery is made subject to assessment, The High Court in this regard was of the view that exceptions to this rule are only where     assessee     is     a     habitual     offender Judgement in Make My Trip was relied o It was, however, observed that revenue interest can be protected by provisional attachment. (Jayachandran Alloys v. Superintendent – Writ Petition No.5501 of 2019, decided on 4-4-2019, Madras High Court)

 

  • Anti-profiteering Comparison with pre-GST rate Delhi HC stays NAA order: Delhi High Court has stayed the order passed by the National Anti-profiteering Authority wherein NAA had rejected the plea that CGST Section 171 was not applicable to reduction in rate of tax as compared with pre-GST indirect tax regime, and that only reduction of tax rate in GST regime can be considere NAA had ruled that assessee had indulged in profiteering as tax incidence was reduced from 30.06% during pre-GST to 28% and later 18% under GST regime. The petitioner, however, undertook to pay certain sum along with interest in the Consumer Welfare Fund. (Abbott Healthcare Pvt. Ltd. v. Union of India 2019-TIOL-1016-HC-DEL-GST)

  • Anti-profiteering ITC benefit to be passed on periodically: In a case alleging non-passing of ITC benefit, where the real estate developer had pleaded that benefit be calculated at time of completion of project after considering the unsold flats, NAA has held that assessee had profiteered by not reducing basic p It was held that benefit needs to be passed on periodically. The NAA also held that there was no provision to withdraw the complaint and the DGAP had rightly pursued the investigation. Further, objections against method  for calculating profiteered amount, was also rejected noting that there is no straight jacket formula and no set prescription The contention that the respondent made purchases from traders who did not pass the benefit of ITC to him, was also rejected (Pallavi Gulati v. Puri Constructions Pvt. Ltd. Case No. 30/2019 decided on 8-5-2019, National Anti-profiteering Authority)

  • Valuation Cost of diesel provided by service recipient includible for charging GST: AAR Chhattisgarh has ruled that cost of diesel provided by the service recipient has to be included by the transporter in the freight amount for charging GS The Authority in an advance ruling observed that diesel provided by service recipient for vehicles of applicant formed an integral component of business process, without which supply of cement could not materialize. It noted that any amount supplier is liable to pay and which has been incurred by the recipient and not included in the price actually paid is includible in the taxable value. [In RE: Navodit Agrawal -2019-VIL-117-AAR]

 

  • Sale of ice cream in retail pack and in scoop is supply of goods In a case involving sale of ice creams both in retail packs and as scoops, AAR Maharashtra has held that since retail packs were sold at MRP the same constitutes sale of goods with no service being involved. With respect to the ice cream scoops, the Authority was of the view that the transaction of receiving ice cream in bulk and selling them in scoops is akin to sales made by grocery shops in the case of sale of edible oil wherein the grocer sells such oil in various lesser quantities after receiving the same in bulk quantity. Accordingly, it was held that since the predominant element of the transaction is that of sale of goods, the said transaction was held to be a “supply of goods”. (In Arihant Enterprises – 2019-VIL 116 AAR)

  • Work Books which test child’s knowledge classifiable as ‘Printed books’: Delhi High Court has held that work books (Sulekh Sarita) which test child’s knowledge and facilitate evaluation of his understanding are classifiable under HSN 49.01, ‘printed books including braille books’ that are exempt from GST ( Sonka Publication (India) Pvt. Lt v. Union of India – W.P.(C) 10022/2018, decided on 7-5- 2019, Delhi High Court)

 

Customs

 

  • Exports New Shipping Bill Regulations – introduced: CBIC has introduced Shipping Bill (Electronic Integrated Declaration and Paperless Processing) Regulations,               The         new Regulations issued in supersession of Shipping Bill          (Electronic             Integration       Declaration) Regulations, 2011 requires authorised person to retain assessed copy of shipping bill and all supporting documents in original, for a period of 5 years. Provision has also been made for generation of authenticated copy of shipping bill As per the Regulations issued on 25-4-2019 penalty upto Rs. 50,000 is imposable in case of any contravention

  • SEZ Management and Business Consultant services is authorized service: SEZ Approval in its 85th meeting has decided that “Management and Business Consultant Services may be included in the list of default authorized services in S As per SEZ Instruction No. 94, dated 8-5-2019, such services would be limited to the extent of such value of services availed of/consumed by the SEZ entity only. Further, the unit will have to produce evidence that the said service was consumed in relation to their authorized operations only. It may be noted that 66 services are already permitted as default authorized services..

  • Exports 250 shipping bills can now be filed online in single ANF 3D: The number of entries of shipping bills/ airway bills which can be filed in a single online ANF 3D application has been increased from 50 to 250 for claiming Merchandise Exports from India Scheme (MEIS) benef ANF 3D which itself was notified recently has been amended for this purpose by DGFT Public Notice No. 7/2015-2020 issued on 7-5-2019. MEIS is a duty credit scrip issued under Chapter 3 of the Foreign Trade Policy with an objective to provide rewards to exporters to offset infrastructural inefficiencies and associated costs

 

  • FTP No requirement to submit physical copy of RCMC for incentives: The requirement to submit physical copies of RCMC for the purpose of availing incentives under the Foreign Trade Policy 2015-20 will be discontinued from 1-7-201 According to DGFT Trade Notice dated 13-5-2019, validity of RCMCs will be checked directly from the DGFT’s database which has the uploaded data of RCMCs from EPCs. The Trade Notice while noting that as on 31stApril, 32,060 valid RCMCs are available on DGFT’s data base, also advises all exporters to ensure that their valid RCMCs are duly uploaded by their respective EPC in the DGFT server

  • Belated payment of redemption fine not to return excess amount from auction: Larger Bench of Delhi High Court has held that Government can retain excess auction proceeds after adjusting customs duty, redemption fine, etc., where order under Section 125 of the Customs Act, 1962 has attained finality and the payment is made belatedly but prior to the auction date. The High Court noted that Sections 125 and 126 are not to be read disjunctively. It observed that once there is failure to pay redemption fine in time, whether goods are prohibited goods or other goods, transient nature of confiscation ends and vesting of goods with the govt. becomes absolute. (Gillette India Ltd. v. Commissioner – Judgement dated 23-4-2019 in W.P. (C) No. 1735/2016, Delhi High Court Larger Bench)

  • FTP Clubbing of Advance authorisations when not possible: In a case involving clubbing of Advance Authorisations issued in 2004 and 2010, Delhi High Court has held that clubbing can be provided only if export obligation period of authorization issued at a prior point of time allowed under Paragraph 4.22 of the HoPv1 has not expired. The High Court rejected clubbing as petitioner had made no application for extension of export obligation period under license dated 22-8-2004 and maximum period for extension had also expir It also held that amendment in HoP on 13-10-2011 was not applicable. (Jindal Poly Films Ltd. v. DGFT – Judgement dated 22-4-2019 in W.P.(C) 7806/2014, Delhi High Court )

  • IGST refund not deniable even if shipping bill is shut in computer system: Madras High Court, in the light of alternate mechanism under CBIC Circular 8/2018-GST, has held that IGST amount on exported goods must be refunded to petitioner who mistakenly availed higher drawback by selecting Drawback code 680203A instead of 680203B in the shipping bill. The High Court held that the petitioner cannot be made helpless just because computer system did not enable refunding the IGST amount as Export General Manifest for the shipping bills was closed. [VSG Exports (P) Ltd. v. Commissioner -2019-TIOL-977-HC-MAD-GST]

  • No confiscation under Customs Section 113(d) when attempt to export absent: In a case where goods were not presented to proper officer for export and thus formalities as per Regulation 6 of the Courier Imports & Exports (Clearance) Regulations were not completed, CESTAT Mumbai has set aside confiscation of goods seized from the courier agency. The Tribunal observed that language of Sections 113(d) and 2(19) of Customs Act, 1962 convey that only goods which are attempted to be exported are liable to confiscati It also observed that the appellant had filed FIR for missing goods and that goods were booked for export by somebody else. (Dalumi Hongkong Ltd. v. Commissioner – Order No. A/85757/2019, dated 18-4-2019, CESTAT Mumbai)

 

Central Excise  & Service Tax

 

 

  • Interest payable on differential duty payable due to retrospective price escalation: Larger Bench of Supreme Court has held that interest for delayed payment of Central Excise duty is liable to be paid on the differential excise duty payable due to retrospective price escala Earlier, doubting the correctness of the Supreme Court decision in the cases of CCE v. SKF India Ltd. [2009 (13) SCC 461] and International Auto [2010 (2) SCC 672], the matter was referred to the Larger Bench in Steel Authority of India case [2015 (16) SCC 107]. The Referring Bench was of the view that excise duty paid on the date of clearance of goods was not treatable as ‘short-paid’ as it was not possible to pay duty based on price escalation which took place later. Rule 7 of the Central Excise Rules relating to provisional assessment, according to which interest is to be paid, was relied on. The Apex Court observed that assessee had not opted for provisional assessment, and that the law will have to be interpreted in a manner that it is fair and equal to similarly situated group of assessees. (Steel Authority of India Ltd. v. Commissioner – Civil Appeal No. 2150/2012 and Ors, decided on 8-5-2019, Supreme Court Larger Bench)

  • Bagasse not a manufactured product Allahabad High Court quashes CBIC Circular: Allahabad High Court has held that Cenvat credit need not be reversed in respect of bagasse which is an agricultural waste and not a manufactured final produ The High Court quashed CBIC Circular No.1027/15/2016-CX, dated 25-4-2016 which treated bagasse as exempted product. It also            observed               that amendment in 2015 in the Cenvat Credit Rules may have the effect of treating bagasse as exempted good but cannot result in it being manufactured goods. Judgement in UoI v. DSCL Sugar Ltd. was relied on. (Balrampur Chini Mills Ltd v. Union of India – 2019-VIL-157-ALH-CE)

  • Valuation of goods self-used but not in production Excise Valuation Rule 8 not applicable: CESTAT Chennai has held that goods cleared to sister units and also used internally in construction activity, in various expansion projects, are not covered under Excise Valuation Rule 8. It was held that such goods cannot come under          the fold             of        “self-consumption”. Department’s view that for Rule 8, goods     are required     to be     consumed                in manufacture of other articles and not merely utilised in expansion, was uph The Tribunal upheld adjudication orders requiring adoption of Rule 4 read with Rule 11 for valuation in such case. (JSW Steels Ltd. v. Commissioner – 2019-VIL-262-CESTAT-CHE-CE)

 

  • Cenvat credit on input/capital goods not confined to registered site: CESTAT New Delhi has allowed Cenvat credit on capital goods, input services and inputs received in one SSA (Secondary Switching Area) and distributed to anothe The assessee had, for convenience, taken registration in different areas but undertook maintenance through its wing which catered to different SSAs. The Tribunal noted that Cenvat credit of inputs or capital goods, was not confined to registered premises, but can be availed even if capital goods were received beyond registered premises for providing output services. (Bharat Sanchar Nigam Limited v. Commissioner – Final Order No.50553/2019, dated16-4-2019, CESTAT Delhi)

 

  • Cenvat credit available on photography, repair of MD car and debris removal: CESTAT Bangalore has held that Cenvat credit of service tax can be availed in respect of repair of MD’s car and on service of car used to ferry employees inside manufacturing unit and also to transport work-in-progress. It held that both are indirectly related to manufactur The Tribunal also held that photography for ground breaking function, hiring charges as well as cleaning and debris removal also fell within the definition of input service, being directly or indirectly related to manufacture. (Plansee India High Performance Materials Pvt. Ltd. v. Commissioner – 2019-VIL-240-CESTAT-BLR-ST)

  • Excise No appeal before High Court if matter involves valuation also: In a case involving clandestine removal along with under-valuation, Bombay High Court has held that even if the order of the Tribunal has dealt with other issues besides valuation, the appeal against such order must be brought before the Supreme Cou Denying own jurisdiction, the High                     Court observed that order of the Tribunal cannot be bifurcated and must be challenged as a whole before one forum. It relied on Central Excise Section 35L   and directed the  return of Memorandum     of     Appeal     to     enable     the department to file appropriate proceedings before Supreme     Court.     (Commissioner     v.     Durian Industries – 2019-TIOL-847-HC-MUM-CX)

 

Value added Tax (VAT)

 

  • No power with State gov./Municipal to legislate on advertisement tax: Allahabad High Court has set aside demand of advertisement tax from the petitioners for the period after 1-7-2017. The High Court in this regard observed that provision of Section 172(2)(h) of the Municipal Corporation Act was omitted by Section 173 of the U.P. GST Act with effect from 1-7-2017 and even the power of the State legislature to legislate with regard to advertisement tax stood deleted with effect from 12-9-2016 by the Constitution (101) Amendment Act. It held that there is no power left with the State Government or the Municipal Corporation to legislate tax on advertisement. (Selvel Media Services Private Limited v. State of U.P. – 2019-VIL-215-ALH)

  • Delivery of possession, not custody of goods, sine qua non for VAT: Allahabad High Court has reiterated that unless possession and control of the vehicle are transferred there cannot be transfer of right to use the goods under Section 3F of the P. VAT Act. The High Court set aside the order of Assessing Officer and the Tribunal on demand of tax under Section 3F on contractor operating tank trucks for haulage and delivery of petroleum products belonging to Hindustan Petroleum. Relying on Rashtriya Ispat Nigam Ltd., High Court reiterated that delivery of possession of thing must be distinguished from its custody. (Gopal oil Company v. Commissioner – 2019-TIOL-1009-HC-ALL-VAT)

 

– Prepared By

Naincy Bhalla 

naincybhalla1@gmail.com

]]>
Latest Indirect Tax Updates- April 2019 https://www.gstseva.com/latest-indirect-tax-updates-april-2019 Sat, 04 May 2019 06:11:43 +0000 https://www.gstseva.com/?p=9933 Latest Indirect Taxes updates

GST, Customs, Excise, Service Tax & VAT Updates

GST Compliance Calendar – May 2019

GSTR-1 Outward supply for the month of April 2019 11th May 2019
GSTR-5 Non-resident foreign taxpayers return for the month of April 2019 20th May 2019
GSTR-6  Input service distributor for the month of April2019 13th May 2019
GSTR-7 Tax Deducted at Source for April 2019 10th May 2019
GSTR-8 Tax Collected at Source by e-commerce operator for April 2019 10th May 2019
GSTR-3B  Summary return tax payment for the month of April 2019 20th May 2019

-Reversal of ITC availed  under Composition scheme for suppliers of goods or services or both –Suppliers of goods or services or both upto an aggregate turnover of Rs. 50 lakh, can opt to pay GST @ 6% (3% CGST + 3% SGST) and not collect any tax from the recipient on such supplies. Benefit of ITC is also not available to suppliers taking benefit of this notification (Notification No. 2/2019-Central Tax (Rate)

Also, as per Circular No. 97/16/2019-GST, dated 5-4-2019, a registered person who wishes to opt for benefit of said notification shall file intimation in Form GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy”. Such person would also be required to furnish a statement in Form GST ITC-03.

-Refund of accumulated ITC to merchant exporter clarified: Refund of accumulated input tax credit to merchant exporter where supplies are received by him after availing benefit under Notification No. 40/2017-Central Tax (Rate) or 41/2017-Integrated Tax (Rate) has been clarified by CBIC. As per  Circular No. 94/13/2019-GST, dated 28-3-2019, this refund of accumulated ITC under CGST Rule 89(4B) must be applied under the category ‘any other’ instead of ‘refund of unutilized ITC on account of exports without payment of tax’. Refund claim shall be filed in the Form GST RFD-01A.

-Clarification regarding order of utilisation of ITC of IGST to set-off output tax liability – Rule 88A of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) was inserted and relaxed the order of setting off IGST credit against CGST and SGST liability (in any order). The CBIC has now clarified that the taxpayers can utilise excess credit of IGST towards payment of CGST or SGST in any sequence and proportion provided that IGST liability is fully discharged first. [Circular No. 98/2019 dated April 23, 2019]

-Non-filing of GST Returns to debar generation of e-way bill – Rule 138E of the CGST Rules was introduced on December 31, 2018 to provide that taxpayers who have not furnished their GST returns for consecutive two tax periods, will not be able to generate e-way bill. This provision was not notified till date and has been made effective from June 21, 2019. Rule 138E allows Commissioner to relax this provision on sufficient causes.

In this context,   it is advisable that the taxpayers file their GST returns on time to avoid any obstruction in business due to non-generation of e-way bill. The taxpayers who could not file returns for genuine reasons (including IT issues), should approach their jurisdictional Commissioner for relaxing applicability of this provision. [Refer Notification No. 22/2019 dated April 23, 2019]

-Changes in e-way bill portal – To improve operational efficiencies in e-way bill system, following changes have been integrated in the e-way bill portal:

  • Auto calculation of route distance: The portal has been designed to auto-compute the distance basis the PIN code of source and destination locations. The user also has an option to enter actual distance, with maximum 10 percent variation of auto calculated distance.
  • Single e-way bill for single invoice: Until now, where consignee or transporter originally generated an e-way bill, the consignor had an option to generate e-way bill for the same invoice. This option will no longer be available with consignor.
  • Extension of e-way bill can now be sought for goods in transit or in movement. For availing the extension, the taxpayer is required to choose one of the following reasons and add remarks thereon:
  • Natural calamity,
  • Law and order,
  • Transhipment
  • Accident,
  • Others  

-On selection of the reason, the taxpayer needs to fill details of mode of transportation, location of goods and vehicle details for which the extension is required. Extended date is auto-calculated basis the reason and the distance between location of goods and final destination of goods.

Report on expiry date of e-way bills: Taxpayers can now view list of e-way bills that are about to expire in next four days from the date of view

-Transfer of ITC in case of death of sole proprietor – Clarification- Transferee / successor shall be liable to pay any tax, interest or any penalty due from the transferor  –  CBIC has clarified that transfer or change in the ownership of business will include transfer or change in the ownership of business due to the death of the sole proprietor. It is also stated that the transferee / successor shall be liable to pay any tax, interest or any penalty due from the transferor in cases of transfer of business due to death of sole proprietor. Circular No. 96/15/2019-GST, dated 28-3-2019 further clarifies that in case of transfer of business on account of death of sole proprietor, the transferee / successor shall file Form GST ITC-02 in respect of the registration which is required to be cancelled on account of death of the sole proprietor, before filing the application for cancellation of such registration by the legal heirs

Important Cases decided

-Fraudulent availing of ITC – Summon justified on MD- Plea of residing in USA and not involved in day-to-day activities was rejected : Rajasthan High Court has upheld the summons issued to MD of a company in a case of ITC availment on the basis of fake invoices. Plea of residing in USA and not involved in day-to-day activities was rejected, observing that petitioner was receiving managerial remuneration from the company since 2012 and became its MD in 2018. Dismissing the petition with costs, the High Court also observed that allegation of fraudulent ITC was not controverted, and that determination of tax was not required in an offence under Section 132. Delhi High Court decision in Make My Trip, was distinguished. [Bharat Raj Punj v. Commissioner 2019 VIL 113 RAJ]

-Issue – Whether the exemption from payment of GST on reverse charge basis under section 9(4) of the CGST Act/SGST Act for receipt of supply of goods and/or services by us from an unregistered person is applicable since 1 July 2017 – Held  in case of M/s Famous Studios Ltd [2019] 103 taxmann.com 279 (AAR-TAMILNADU) that  RCM is applicable to the transactions effected from 1.7.2017 to 12.10.2017

The court ruled that Principal Secretary/Commissioner of Commercial Taxes, to consider and pass orders upon the application of the petitioner, wherein the petitioner would seek to pay pending GST dues in six monthly installments – Recently High Court of Madras gave an important Judgment in a case, where he directed authority to pass order allowing assessee to pay GST dues in six monthly installment in case of Asean Aromatics (p) Ltd. V. Assistant Commissioner (Circle) [2019] 103 taxmann.com 353 (Madras). Held that  Goods and Service Tax is nascent in its application and is an evolving regime. The interests of small traders have thus weighed consideration with the authorities in granting the relaxation in time limits.

-No GST on interest free deposit if not withheld at completion of lease – In case   amount or part of it is withheld as charge against damages, then that amount would be liable to GST: In a case involving interest free security deposit, taken from lessee as security against damages during lease of premises, Maharashtra AAR has held that deposit received is not a consideration for supply. The AAR, however, observed that if at time of completion of lease tenure, the amount or part of it is withheld as charge against damages, then that amount would be liable to GST. [ E-Square Leisure Pvt. Ltd. – 2019 TIOL 121 AAR GST]

-Exemption available only to clinical establishments providing healthcare – Must satisfy the dual condition of providing healthcare services as well as being a clinical establishment.: Madhya Pradesh AAR has held that exemption provided under S.No.74 of Notification No.12/2017-Central Tax (Rate) is service specific and service provider specific, therefore to qualify an establishment must satisfy the dual condition of providing healthcare services as well as being a clinical establishment. The applicant had pleaded that it is ancillary to other clinical establishment accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL). However, the AAR held that mere involvement in sophisticated testing and consultancy will not be sufficient to qualify as a clinical establishment. It was also observed that applicant was functioning as sub-contractors to the said accredited companies and not as an independent clinical establishment. [J C Genetic India Pvt. Ltd. – 2019 VIL 108 AAR]

-Works contract pertaining to railways – Lower tax rate for sub-contractor: In a case involving works contract services provided by a sub-contractor to the main contractor in respect of work relating to railways, AAAR has held that benefit under Sl. No. 3(v) of Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 1/2018-Central Tax (Rate) is available to the sub-contractor. AAAR Maharashtra held that composite supply of works contract is ultimately going to the use of railways without being subjected to any change or modification, and thus said works contracts is ‘pertaining to the railways’. The work was hence held as eligible for concessional rate of GST. Department’s contention that there is no specific mention of sub-contractor providing services in Sr. 3(v), was rejected. (Shree Construction – 2019 VIL 33 AAAR)

-ITC available only on discounted invoice value: In a case involving post-invoice discount where discount cannot be pre-determined or recorded in invoices and supply of goods is made, AAR Tamil Nadu has held that buyer can avail ITC only on proportionate GST as applicable on invoice value less the discounts. Proviso to CGST Section 16 on payment towards value of supply along with tax amount to supplier within 180 days was relied on. The Authority in this regard held that Section 15(3) will not apply where discount is given after invoices are raised and supply of goods is made. The AAR observed that if ITC is availed on full tax amount, difference should be reversed to avoid liability. The applicant had argued that since the discount was not eligible for exclusion from taxable value and tax would be paid on full invoice value, no credit was reversible and the entire tax amount would be available as credit. [MRF Ltd. – 2019 VIL 71 AAR]

-No ITC if goods supplied under CSR activity on FOC basis: Referring to Section 17(5)(h) of the CGST Act, 2017 which restricts ITC with respect to goods that are disposed of by way of gift or free samples, Kerala AAR has held that ITC will not be available to the manufacturer on supply of electrical items to the flood affected people under CSR activity on FOC basis. The Authority, however, held that the distributors of the applicant-manufacturer who had supplied goods to Kerala State Electricity Board on the instructions of the applicant will be entitled to avail ITC on such goods as the goods were supplied to KSEB and GST was paid to the Government by the distributors with respect to the goods. [ Polycab Wires Pvt. Ltd. – 2019 VIL 100 AAR]

 

-No ITC on goods supplied free under sales promotion scheme: Maharashtra AAR has held that ITC is not available to the assessee on procured gold coins to be distributed to its customers for free of cost under a sales promotion scheme at the end of scheme period for achieving the stipulated lifting or payment criteria. It was held that only use of goods in the course of furtherance of business as mentioned in Section 16(1) of CGST Act does not entitle one to avail ITC since Section 17(5) starts with “Notwithstanding anything contained in sub-Section (1) of Section 16”. The Authority was of the view that considering the bar to avail credit by virtue of Section 17(5)(h), even in a case where the goods are used in the course or furtherance of business, ITC shall not be available on distribution of gold coins for free as gifts under a sales promotion scheme. It also elaborated on the meaning of “gifts” as assigned under the Gift Tax Act, 1958 and observed that gift was a transfer of property without consideration which was given voluntarily. [Biostadt India Limited – 2019 VIL 60 AAR]

-Job work – Dispatch of consumables to job worker is not ‘supply’: The question before the Authority was whether dispatch of consumable materials (zinc, furnace oil, nickel, etc.) for galvanization, would be treated as supply from the principal to the job worker, if they were not returned within the time allowed under Section 143(1)(a) of the CGST Act, 2017. Answering this question, the AAR West Bengal held that as the goods were consumed in the process, the return of the galvanized goods to the applicant would satisfy the condition of receiving back the inputs in accordance with Section 143(1)(a). It was also held that as the goods were consumed in the process of galvanizing and became inseparable from the galvanized goods, they shall not be treated as supply in terms of Section 143(3) provided they have been entirely used up in the process of galvanizing.  [Ratan Projects & Engineering Co. Pvt. Ltd. – 2019 VIL 91 AAR]

-ITC of Compensation Cess paid on motor vehicles not available for supply of rental service: The applicant was engaged in supply of renting of motor vehicles and then their disposal after some time. The Kerala AAR has held that such applicant was eligible to claim ITC of Compensation Cess paid at the time of purchase of motor vehicles but would be required to reverse proportionate amount of ITC of such cess every month based on the turnover of rental service as the same was an exempt supply, not being liable to cess under GST (Compensation to States) Act, 2017. It held that such ITC can be utilized for discharging liability of Compensation Cess arising at the time of sale of such vehicles. The Authority in this regard relied on Section 2(p) of the GST (Compensation to States) Act which defines the term “taxable supply” under the said Act and referred to definition of ‘exempt supply’ as provided in CGST Act. [ Orix Auto Infrastructure Services Limited – 2019 VIL 98 AAR]

-Fabrication of body on chassis supplied by principal is supply of service: Kerala AAR has held that the activity of fabrication of a body is in the nature of adding a structure (any treatment done) on the chassis owned by the customer, and hence even when the job worker used his own material to do the fabrication on the chassis, it will be considered as supply of service and will be classified under SAC Code 9988, thereby attracting 18% GST. The Authority observed that chassis was a semi-finished good owned by the principal and any treatment done by any other party on the chassis of the principal was in the nature of job work activity. [Kondody Autocraft (India) Pvt. Ltd. – 2019 VIL 97 AAR]

Customs

 

-Physical copies of MEIS/SEIS scrips phased out for EDI ports: Physical copies of MEIS or SEIS duty credit scrips will not be issued by the DGFT from 10-4-2019 onwards, in cases where the port of registration is an EDI port., the scrips will continue to be transmitted electronically by the DGFT to the Customs system and would be visible to concerned officers involved in imports. While no TRA shall be issued in respect of these paperless scrips issued electronically, DGFT will continue to issue scrips in physical form as per current practice for non-EDI ports. (CBIC Circular No. 11/2019-Cus. dated 9-4-2019)

-Advance authorisation, EPCG and EOU – IGST and Cess exemption extended: Exemption from Integrated tax and Compensation Cess for imports under Advance authorisation, EPCG scheme and by EOUs has been extended again. This time the exemption has been extended for full one year, and would now be available till 31st of March 2020, instead of 31st March 2019. Amendments have been made in Paras 4.14, 5.01(a) and 6.01(d)(ii) of the Foreign Trade Policy by DGFT Notification No. 57/2015-20, issued on 20-3-2019. Ministry of Finance has also issued notifications to amend the Customs notifications

-Peas and pulses – Import of certain quantities relaxed from 1-4-2019: Ministry of Commerce has relaxed import of Moong, Urad and Peas. Such products will be subject to annual (fiscal year) quota of 1.5 Lakh Metric Tonne. Import of Toor Dal shall be subject to an annual quota of 2 Lakh MT as per procedure notified by DGFT. Import of these products was earlier fully restricted. As per DGFT Trade Notice dated 1-4-2019, Ministry of Commerce Notifications S.O. 1478(E), 1479(E), 1480(E) and 1481(E) amend the import policy conditions of certain items in Chapter 07, and are effective from 1-4-2019.

Important Cases decided

-Rectification in Bill of Entry under Customs Section 154 on error by importer: In a case where the importer accidently paid duty twice on same invoice, Madras High Court has remanded the matter to assessing officer to pass order after exercising power under Section 154 of the Customs Act. The High Court observed that the error was apparent on the face of the order and the bill of entry should have been verified to avoid litigation. It observed that powers of Section 154 can be exercised by the authority when error is pointed out by an importer/exporter for reasons attributable to latter, but only in respect of clerical/arithmetical error. [Commissioner v. Symrise (P) Ltd. – 2019-VIL-141-MAD-CU]

 

-Advance authorisation – Use of surplus inputs for goods cleared in DTA: In a case where actual use of inputs in export goods was less than SION norms and surplus was used in the manufacture of domestic goods, CESTAT Ahmedabad has allowed benefit of advance authorisation. Observing that export obligation was fulfilled and off-grade goods, considered as waste, were cleared in DTA, the demand on ground of use of inputs being less than that prescribed in SION was set aside. The Tribunal placed reliance on Para 4.1.5 of FTP and the Tribunal decision in the case of Areva T & D India Ltd. (K L J Organics Ltd. v. Commissioner – 2019-VIL-208-CESTAT-AHM-CU)

 

-Demurrage charges are justified unless waiver mandated by Rules: Delhi High Court has held that the warehousing service provider was justified in not waiving and returning demurrage charges deposited in a case where detention was held justified, even when penalty and confiscation by Customs were set aside. The High Court held that fee payable for duration for which warehousing was done cannot be removed by the court unless rules or relevant policy provided for the same. It observed that even otherwise warehousing is a commercial activity for which service provider invests in resources, deploys manpower and creates infrastructure. [International Lease Finance Corp. v. UoI – Order dated 27-3-2019 in W.P.(C) No. 6490/2018, Delhi High Court]

 

Central Excise  & Service Tax

 

-NCCD exemption available to units exempted from Excise duty: Supreme Court has held that manufacturing units in special category States which were exempt from Central Excise duty would also be exempt from National Calamity Contingent Duty (NCCD), since NCCD was of the nature of an excise duty. The Court held that same view on this exemption would apply as taken for Education Cess and Secondary & Higher Education Cess by the Court in the case of SRD Nutrients (P) Ltd., even if NCCD was levied on the product and not on the excise duty payable. The Apex Court in this regard was of the view that exemption notifications, like the one in question must be read in a manner that give them a liberal interpretation, provided that no violence is done to the language employed. [Bajaj Auto Ltd. v. UoI Judgement dated 27-3-2019 in Civil Appeal No. 3239 of 2019, Supreme Court]

-Service tax audit after introduction of GST – Saving clause under CGST Section 174(2)(e): Jharkhand High Court has prima facie rejected the contention that saving clause in CGST Section 174 did not protect Service Tax Rules and hence action taken pursuant to such rules was without authority of law, after introduction of GST. Dispute pertained to inquiry/audit under Rule 5A. The Court however prima facie held that the expression ‘instituted’ in CGST Section 174(2)(e) implied that proceeding stood already instituted at time of repeal of Finance Act, 1994. Decisions of Gujarat and Delhi High Courts were referred while directing status quo till next date of hearing. [Sulabh International v. UoI Order dated 4-4-2019 in W. P. (T) No. 1599 of 2019, Jharkhand High Court]

-Mere consumption of goods during service cannot turn it into work contract: CESTAT Ahmedabad has held that consumption of goods by a service provider during the provision of service does not automatically convert the service into a works contract. The Tribunal observed that if the scope of work contract was extended to include consumables then there would be no service which can fall outside the purview of works contract. It also observed that even consultancy service provided by an engineer or an advocate involves consumables like paper, ink, pen, etc. [Krishna Engineering Works v. Commissioner – 2019 (22) GSTL 409 (Tri. – Ahmd.)]

 

-Supply of electricity in the absence of licence, exigible to service tax: Observing that petitioner was not a person authorised to transmit, supply, distribute or undertake trading in electricity, Calcutta High Court has ruled that receiving high-tension electricity and converting into low-tension for supply to occupants of a mall, was classifiable as services. It held that any interpretation that violates Electricity Act, should be avoided. The Court held that although electricity is goods, in the absence of licence under Section 12 of the Electricity Act, would be termed as a service liable under Section 65B(23) of the Finance Act, 1994. [Srijan Realty Pvt. Ltd. v. Commissioner 2019 TIOL 594 HC KOL ST]

 

-Excise valuation – Dharmada charges not includible: Larger Bench of the Supreme Court has held that ‘Dharmada’ collected as optional payment from buyer, cannot be part of transaction value for goods. It held that the amount to be credited to charity and not forming part of income was not includible. The Court held that no amount not paid as consideration for goods can go to make transaction value and if an amount paid at the time of sale transaction was for a purpose other than the price of the goods, it cannot form part of transaction value as such payment is not for transaction of sale i.e. for transfer of possession of goods. Observing that payment of dharmada was meant for charity and was received and held in trust by the seller, the Court was of the view that if such amounts were meant to be credited to charity and did not form part of the income of the assessee they cannot be included in the transaction value or assessable value of the goods. [D.J. Malpani v. Commissioner – Judgement dated 9-4-2019 in Civil Appeal No. 5282 of 2005, Supreme Court]

 

Value added Tax (VAT)

 

-Karnataka Sales Tax – Turnover not limited to ‘taxable turnover’: Supreme Court has held that levy under Section 6B of the Karnataka Sales Tax Act, must be on the total turnover and not only on the taxable turnover. It rejected the contention that ‘total turnover’ in Section 6B(1) for purpose of turnover tax, cannot include turnover on which State has no power to levy tax. Applying strict rule of interpretation of taxing statutes, the Court held that except the deductions provided under the first proviso to Section 6B(1), nothing else can be deducted from total turnover as defined under Section 2(u-2). [Achal Industries v. State of Karnataka Judgement dated 28-3-2019 in Civil Appeal No(s). 4837 of 2011 and Ors., Supreme Court]

 

-Rusk and toast are bread as per composition, hence not liable to VAT: Chhattisgarh High Court has held that Rusk and Toast are to be treated as Bread under Entry-7 of Schedule-I to the Chhattisgarh VAT Act making them tax free goods. The goods were held not classifiable under the residuary entry of Part IV of Schedule II of the Act. Upholding the single Judge Order, the Court observed that as per judicial precedents, it was required to find out if contents of the product fits the description of the basic entry and only if the same was not possible, residuary entry can be taken as a resort. [State of Chhattisgarh v. Saj Food Product (P) Ltd. – 2019-VIL-138-CHG]

 

-Mobile crane wire rope classifiable as part of mobile crane: Supreme Court has held that wire ropes used in mobile cranes are a part of such cranes and liable to 4% tax as per Entry 155 of Schedule IV to Rajasthan VAT Act. The Apex Court observed that in order to make mobile cranes operational, use of wire ropes was essential and hence mobile crane wire rope was an essential part of the mobile crane. Relying on judgement in Annapurna Carbon Industries, the Court reiterated the test that a thing is a part of the other if the other cannot function without it. [Commissioner v. Prasoon Enterprises Judgement dated 26-3-2019 in Civil Appeal No. 3198 of 2019 and Ors., Supreme Court]

 

These updates prepared and compiled by :-

(Naincy Bhalla)

naincybhalla1@gmail.com

]]>
Highest collection since GST implementation here is the figure https://www.gstseva.com/highest-collection-since-gst-implementation-here-is-the-figure Thu, 02 May 2019 09:13:21 +0000 https://www.gstseva.com/?p=9931 GST Revenue collection for April, 2019 recorded highest collection since GST implementation

The total gross GST revenue collected in the month of April, 2019 is Rs 1,13,865 crore of which CGST is Rs 21,163 crore, SGST is Rs 28,801 crore, IGST is Rs 54,733 crore(including  Rs 23,289 crore collected on imports) and Cess is Rs 9,168 crore (including Rs 1,053 crore collected on imports). The total number of GSTR 3B Returns filed for the month of March up to 30th April, 2019 is 72.13lakh.

2.   The government has settled Rs 20,370 crore to CGST and Rs 15,975 crore to SGST from IGST as regular settlement. Further, Rs 12,000 crore has been settled from the balance IGST available with the Centre on provisional basis in the ratio of 50:50 between Centre and States. The total revenue earned by Central Government and the State Governments after regular and provisional settlement in the month of April, 2019 is Rs 47,533 crore for CGST and Rs 50,776 crore for the SGST.

3.   The revenue in April, 2018 was Rs 1,03,459 crore and the revenue during April, 2019 is a growth of 10.05% over the revenue in the same month last year. The revenue in April, 2019 is 16.05% higher than the monthly average of GST revenue in FY 2018-19 (Rs 98,114 crore).

]]>
Indirect Tax and GST Updates Till March 2019 https://www.gstseva.com/indirect-tax-and-gst-updates-till-march-2019 Fri, 05 Apr 2019 05:13:07 +0000 https://www.gstseva.com/?p=9901 GST Compliance calendar – April 2019

Return Due Date of filing
GSTR-1 Outward supply for the month of March 2019 11th April 2019
GSTR-5 Non-resident foreign taxpayers return for the month of March 2019 20th April 2019
GSTR-6 Input service distributor for the month of March 2019 13th April 2019
GSTR-7 Tax Deducted at Source for March 2019 10th April 2019
GSTR-8 Tax Collected at Source by e-commerce operator for March 2019 10th April 2019
GSTR-3B   Summary return tax payment for the month of March 2019 20th April 2019
Important alert :- In order to remove the difficulties faced by Taxpayers, the Central Government, on recommendations of the Council, has informed that input tax credit in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18 can be availed till March 2019. So all assesse ensure to avail benefit of ITC while filing returns of March 2019 returns.

 

The GST Council (Council), in its 34rd meeting on 19th March 2019 discussed operational details for implementation of recommendations made in 33rd meeting in respect of new rate of tax for under construction and new residential projects. Key Highlights of 34th GST Council Meet

  • GST Council has approved the transition plan for the implementation of the new tax structure for housing units.
  • GST rates for new projects will be mandatory from April 1.
  • Builders of existing housing projects that are completing construction by 31st March 2019 get to choose either of the two alternatives:
  • Alternative 1: Choose the old rate of 12% (8% for affordable housing) and charge this GST Rate in the invoices raised. Further, input tax credit benefit is available and can be passed on to the buyer.
  • Alternative 2: Choose to bear GST tax at the rate of 5% (1% for affordable housing as defined by GST law). The benefit of the input tax credit (ITC) is not available to the builder for procurements used in construction.
  • Those who choose the 2nd alternative must reverse the accumulated ITC on their closing stock of under-construction properties in a proportion laid down in rules (to be notified) within six months.
  • The new rate of 5% (1% for affordable housing) will apply to those residential properties whose construction is going on even after 31st March 2019 or any new projects launched after 1st April 2019. Here, the benefit of ITC on procurements will not be available to the builders.

    cma rakesh bhalla

    By CMA Rakesh Bhalla
    Past chairman NIRC of ICAI (CMA)

New GST Rates for Affordable Housing Project- Rate of tax is 1% without input tax credit (ITC) on construction of affordable houses-

  • (a) All houses which meet the definition of affordable houses as decided by GST Council (area 60 sqm in non- metros / 90 sqm in metros and value upto Rs.45lakhs),and
  • (b) Affordable houses being constructed in on going projects under the existing central and state housing schemes presently eligible for concessional rate of 8% GST (after1/3rdlandabatement) which have opted for new scheme.

New GST Rates for Non-Affordable Housing Project – Rate of tax is 5% without input tax credit on construction of-

(a) all houses other than affordable houses in new projects.

(b) commercial apartments such as shops,offices etc. in a residential real estate project (RREP) in which the carpet area of commercial apartments is not more than15% of total carpet area of all apartments.

(c) all houses other than affordable houses in on going projects whether booked prior to or after 01.04.2019 where developer has opted for new scheme .In case of houses booked prior to 01.04.2019 ,new rate shall be available on instalments payable on or after 01.04.2019.

Conditions for new tax rates

  • ITC shall not be available.
  • 80% input & input services [other than capital goods, TDR/JDA,FSI, long term lease(premiums) shall be purchased from registered persons. If purchases from such persons is below 80%, tax shall be paid by the builder @18% on reverse charge basis (other than capital goods and cement).
  • Tax on cement purchased from unregistered person shall be paid @28% under RCM. Tax on capital goods purchased from unregistered person shall be paid at applicable rates under RCM.

Open Issues

  • Whether financing costs will be covered within the meaning of input services for 80% slab?
  • Whether RCM applicable on purchase of cement from unregistered person in case where more than 80% input and input services are purchased from registered dealer?
  • Whether capital goods are under the RCM condition or not?

Exemption on TDR/ FSI and long term lease for residential projects commencing after 01.04.2019 – Open Issues

  • Whether exemption available in respect of ongoing projects where developer has opted for new rate scheme?
  • Whether exemption available in respect of projects with mixed use i.e. both residential and commercial units?

Applicability of GST on TCS – Corrigendum issued

Corrigendum dated March 7, 2019 issued to Circular No. 76/50/2018-GST dated December 31, 2018 (‘Circular’). The Corrigendum clarifies that collection of tax at source (TCS) is an interim levy under Income Tax laws and not a tax per se. Therefore, TCS shall not be added to the taxable value for the purpose of charging GST. This clarification comes as quite a relief for businesses specifically for  automotive sector to avoid apprehensive of litigation on this aspect. Relevant abstract of clarification is given below

“In the light of the representations received from the stakeholders, the matter has been re-examined in consultation with the Central Board of Direct Taxes (CBDT). The CBDT has clarified that Tax collection at source (TCS) is not a tax on goods but an interim levy on the possible “income” arising from the sale of goods by the buyer and to be adjusted against the final income- tax liability of the buyer.

 

 Accordingly, in S. No. 5 of the Circular No. 76/50/2018-GST dated 31st December, 2018:

‘——

Read

For the purpose of determination of value of supply under GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of

tax.

  • The corrigendum clarifies the correct position of law as discussed in our previous update. Notably, the Corrigendum is considered as part and parcel of the original Circular. Consequently, it will be considered that after the issuance of Corrigendum, the clarification given in the original Circular never existed. Thus, GST shall not be payable on TCS amount even for the interim period.
  • If the taxpayers have charged GST on TCS in the months of January and February 2019 which became an added cost, they can consider issuing a GST credit note in the month of March 2019 (any time before September 30, 2019). If the taxpayers are issuing GST credit note, they must refund the additional GST amount if collected from their customers.

Sales promotion schemes – GST liability and ITC availability clarified: Where free samples and gifts are offered as part of sales promotion scheme, CBIC has clarified that supply of such goods, services or both which are supplied free of cost without a consideration, will not be treated as ‘supply’ under GST law.

  • ITC is not available on inputs, input services and capital goods to the extent they are used in relation to such supplies.
  • Schemes like ‘buy one get one free’ should be treated as two goods supplied for the price of one and such supply will be taxable as per Section 8 of the CGST Act, after determining whether it is a mixed or composite supply. ITC will be available to the supplier in such cases. (Circular No. 92/11/2019-GST, dated 7-3-2019)

Valuation – Discounts when not includible in value of supply:

    • Discounts are excludible from the value of supply, subject to condition including reversal of ITC by the recipient in cases of ‘Buy more, Save more offer’ or staggered/volume discounts, where rate of discount is increased after volume of purchase is increased However, the supplier will be entitled to ITC on inputs, input services and capital goods used in relation to such supplies.(Circular No. 92/11/2019-GST, dated 7-3-2019)
    • Last dates for filing GSTR-1 and GSTR-3B for April-June 2019, notified:
  • GSTR-1 for the months of April, May and June 2019 are to be filed till 11th day of the succeeding month by registered persons having aggregate turnover of more than INR 1.5 crore.
  • For persons whose turnover is up to INR 1.5 crore, this return for the quarter April-June 2019 can be filed till 31-7- 2019.
  • Form GSTR-3B for each of the months from April to June 2019, must be furnished by twentieth day of the succeeding month. (Notifications Nos. 11 to 13/2019-CT dated 7-3-2019)
  • New return formats placed on GST portal: Goods and Services Tax Network (GSTN) has placed the proposed three return documents, as approved by the competent authority, on the GST Portal.
    • The new formats, titled, normal, sahaj and sugam, is likely to simplify the compliance process for taxpayers having turnover of up to INR 5 crore.
  • The taxpayers would have an option to file any of the three forms. It may however be noted that HSN code at least at 6-digit level shall have to be reported. As decided by the GST Council, these forms will operate on a pilot basis from 1-4-2019 and will be made mandatory only from July 2019.Important cases decidedAnti-profiteering – Passing of benefit by retailer not dependent on manufacturer passing the benefit: National Anti-profiteering Authority has held that passing of benefit by distributor or retailer does not depend on passing such benefit by manufacturer or his supplier to him first. The Authority in this case agreed with the DGAP report taking cum-tax price and rejected the plea that average base price is to be used to compute profiteering. It also held that the respondent had not only increased the base price but also collected GST on such price and hence was liable to penalty. (Rahul Sharma v. Cloudtail India Pvt. Ltd. – Order dated 7-3-2019 in Case No. 16/2019, NAA)Valuation – Cost of tools billed to customer, not includible: Appellate AAR Karnataka has held that amortized cost of the tools manufactured by the assessee and billed to the customer but retained by the assessee for manufacture of components for the customer, is not to be added to arrive at the value of the goods supplied. It was held that the value of the tools, which had already suffered tax and supplied FOC to the assessee, is not required to be added. (Nash Industries (I) Pvt. Ltd. – 2019-VIL-08-AAAR)
  • ITC on ambulance purchased prior to 1-2- 2019 not available: AAR West Bengal has denied input tax credit on ambulance purchased, prior to 1-2-2019, by a manufacturer of agricultural machinery for the benefit of the employees under legal requirement of the Factories Act, 1948. It observed that the exception carved out under Section 17(5)(b)(iii)(A) of CGST Act is not applicable. The Authority in its ruling observed that the eligibility for claiming ITC under Section 16(1) is subject to the provisions of the law at the time of occurrence of the taxable event, irrespective of when the claim is made. ( Nipha Exports Pvt. Ltd. – 2019-VIL-52-AAR)
  • Profiteering to be calculated as per period owing to change in GST rates: NAA has upheld the findings of the Director General of Anti- Profiteering (DGAP) that the respondent involved in construction of flats did not pass benefit of ITC accrued post-GST to flat buyers / recipients. Observing that in construction of affordable housing, post-GST rates were also reduced, the Authority held that in cases of amendment in GST rates, profiteered amount must be broken into two parts, i.e. from 1-7-2017   to   24-1-2018   and   from 25-1-2018 onwards. (Ashok Khatri v. S3 Infrareality (P) Ltd. – 2019-VIL-06-NAA)
  • Provisional attachment – Section 83 not invokable against Directors: Gujarat High Court has set aside provisional attachment of bank accounts of directors of a company on the ground that provisions of Section 83 of the CGST Act can be invoked against the company, which is a taxable person, and not against the directors. The High Court also observed that when dues cannot be recovered from a company, the same can be recovered from directors under CGST Section 89 unless they prove that such non- recovery was not attributable to any gross neglect, misfeasance or breach of duty on their part. (H.M. Industrial (P) Ltd. v. Commissioner – 2019 (22) GSTL 13 (Guj.)
  • National Bench of GST Appellate Tribunal notified: Ministry of Finance has notified creation of National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi. Notification S.O. 1359(E), dated 13-3-2019 has been issued under Section 109 of the Central Goods and Services Tax Act, 2017 for this purpose. It may be noted that the Allahabad High Court in its Order dated 28-2-2019 in Torque Pharmaceuticals v. UOI had directed the government to give a cut-off date to set-up the Tribunal. Union Cabinet had on 21-1-2019 approved setting-up of GSTAT.

ITC on inward supplies for construction of pre-fabricated warehouse, not available: Observing that a warehouse built with prefabricated material is constructed with the intention of use as permanent structure and associated with beneficial enjoyment of the land on which it is built, AAR West Bengal has held that the same being immovable property, input tax credit on inward supplies is not available. Definition of “immovable property” in Section 3(26) of the General Clauses Act, 1897 was referred. ( Tewari Warehousing Co. Pvt. Ltd. – 2019-VIL-47-AAR )

Customs

MEIS benefit on exports directly from EOU/SEZ on behalf of DTA unit: Export of goods produced by the EOU/SEZ unit and exported directly from the EOU/SEZ to the foreign consumer with the name of DTA unit on whose behalf the exports are made, are eligible for the benefits under Merchandise Exports from India Scheme (MEIS). MEIS benefits may be taken by SEZ/EOU or DTA unit and not both, based on disclaimer from the other firm. Certain criterion as specified in the circular, however, need to be fulfilled for availing such benefit. (Circular No. 20/2015-20, dated 22-2-2019)

Printing of Advance/EPCG Authorisation on security paper to be discontinued: DGFT will discontinue printing of advance authorisations and EPCG Authorisations where port of registration is an EDI port. This system is applicable for authorisations issued from 1-3- 2019 onwards. Details of authorisation will be available on ICES and process of registration of authorisations and taking bond/bank guarantee remain unchanged. (Circular No. 7/2019-Cus., dated 21-2-2019)

SEZ – Value of indigenous inputs not includible in net forex earning: Ministry of Commerce has amended Special Economic Zone Rules, 2006 to provide that sum of value of inputs in the formula for calculating positive net foreign exchange [B in formula A-B>0], will not include value of indigenous inputs, used for authorised operations. It may be noted that prior to 21-9-2018 the position was same and the reference to indigenous inputs was inserted in Rule 53 of SEZ Rules by Notification dated 19-9- 2018. SEZ Notification No. G.S.R. 200(E), dated 7-03-2019 has been issued for this purpose

Important Cases decided

Valuation – Demurrage not includible – Explanation to Valuation Rule 10(2) is bad: Observing that the provisions in the Customs Act were silent about demurrage, the High Court held that it is beyond the legislative powers to include demurrage charges in the rules for Customs valuation. Supreme Court judgements in Wipro ltd, Essar Steel Ltd. and Mangalore Refinery and Petrochemicals Ltd. were relied on. (Tata Steels v. UOI – W.P.(C) No. 7917 of 2009, decided on 14-2-2019, Orissa High Court)

Advance authorisations – ‘Prior import condition’ quashed: Gujarat High Court has quashed the ‘pre-import condition’ under Advance Authorisation regarding prior imports for manufacture of export goods. It observed that such condition, after introduction of GST, lead to cash blockage and made imports under Advance Authorisation next to impossible. The condition was also held as not meeting test of reasonableness. It may be noted that this condition was in force from 13-10-2017 to 9-1-2019. (Maxim Tubes Company Pvt. Ltd. v. Union of India – R/Special Civil Application No. 14558 of 2018 and Ors., decided on 4-2-2019, Gujarat High Court)

Anti-dumping duty not to be imposed on second hand machinery: CESTAT Chennai has held that import of second hand machinery cannot be subjected to imposition of anti- dumping duty (ADD) meant for new machinery. It observed that purpose of anti-dumping is served, in case of second-hand machinery, by way of re-appraisement of declared value, and imposition of ADD would be nothing but double jeopardy. (Commissioner v. Trinity Exporters – Final Order No. 40357/2019, dated 20-2-2019, CESTAT Chennai)

Central Excise & Service Tax

Job work of textile goods – Liability under Excise Rule 12B explained: Noting that Central Excise Rule 12B and the notification talked about ‘aggregate value’ of clearances of job worker, the Supreme Court has held that assessee manufacturing textiles through job workers would be liable once aggregate value crossed the threshold. The Apex Court rejected assessee’s reliance on third illustration in CBEC Circular dated 30-10-2003. It held that third illustration did not fit in the scheme of Rule 12B. The assessee had pleaded that liability will be only in respect of a particular job worker whose clearance had exceeded threshold. [Dinesh Textiles v. Commissioner – Civil Appeal Nos. 9740-9741 of 2018, decided on 28-2-2019, Supreme Court

Refund claim by buyer and manufacturer to be treated differently: Supreme Court has rejected time-barred refund claim of central excise duty by the buyer, in a case where duty was paid under protest by the manufacturer- seller. It observed that scheme of Excise Section 11B makes a distinction between rights of a manufacturer and that of the buyer. Supreme Court’s earlier decision in the case of CCE v. Allied Photographics India Ltd.

In-house corporate guarantee not liable to service tax: CESTAT Chennai has held that commission received/paid for issuance of corporate guarantee to associate/subsidiary companies is not exigible to service tax under Section 65(12)(a)(ix) of Finance Act, 1994. The Tribunal observed that corporate guarantee is not same as bank guarantee since corporate guarantee is an in-house guarantee issued to safeguard financial health of associate enterprises and is not issued to customers generally. It was also held that only the services listed in Section 65(12)(a)(ix) ibid would be exigible to service tax under Banking and Other Financial Services. The Tribunal in this regard also observed that it was also not the case that the corporate guarantee was issued / procured to enable the bank to issue bank guarantee. (Sterlite Industries v. Commissioner – Final Order No. 40318/2019, dated 19-2-2019, CESTAT)

Service tax exemption to transport from factory to gateway port – Conditions: CESTAT Delhi has held that exemption under Notification No. 31/2012-ST, to transportation of goods from factory to the gateway port, cannot be denied for belated filing of declaration EXP-1, EXP-2. (Makson Healthcare Pvt. Ltd. v. Commissioner – Final Order No. 50299/2019, dated 21-2-2019, CESTAT Delhi)

Cenvat credit on GTA services when goods cleared on FOR basis: CESTAT Ahmedabad has held that Cenvat credit was available on GTA services for delivering goods to buyer’s doorstep, in a case involving both MRP and non-MRP sales. Period involved was after 1-4-2008. The Tribunal observed that goods were cleared on FOR basis and freight/damages in transit was responsibility of assessee. Supreme Court judgement in Ultratech was distinguished noting that it did not consider Point of Sale or FOR price issue. CBIC Circulars dated 22-12-2014 and 23- 8-2007, as in force during relevant time, were relied upon. (Sanghi Industries v. Commissioner – Final Order No. A/10374-10375/2019, dated 25- 2-2019, CESTAT Ahmedabad)

Commission paid by exporter to foreign subsidiary – Exemption: CESTAT Allahabad has held that benefit of service tax exemption was available on commission paid by exporter to its foreign based subsidiary for procurement of orders from foreign companies. It noted that denial of exemption would apply only in cases where export was made to own joint venture or wholly owned foreign subsidiary (Super House Limited Shoe Div. v. Commissioner – 2019-VIL-111-CESTAT-ALH-ST)

Value added Tax (VAT)

 

State enactment for saving VAT recovery post GST, valid: Kerala High Court has held that Kerala VAT Act does not stand fully repealed with the 101st Amendment to the Constitution and that the State has legislative powers to enact saving clause under Section 174 of the Kerala GST Act allowing department to levy and recover VAT for transactions prior to GST. It rejected the plea that States have been denuded of the legislative power to enact Section 174 because of the amendment to Entry 54 of List II of Seventh Schedule to the Constitution of India. It observed that there is always a presumption in favour of the constitutionality and where the validity of a statute is in question, the interpretation which makes the law valid is preferred. (Sheen Golden Jewels v. STO – WP(C). No. 11335 of 2018, decided on 11-1- 2019, Kerala High Court)

Levy of advertisement tax by State govt is ultra vires post 101st amendment: Allahabad High Court has held that levy and collection of Advertisement Tax by Nagar Palika Parishad, Hathras is without legislative/statutory competence and is ultra-vires Article 265 of the Constitution.

The High Court observed that by 101st Amendment to the Constitution, Entry-55 of List-II of Seventh Schedule to Constitution of India, under which State government had competence to levy/collect advertisement tax, was omitted. It noted that taxation power with municipalities under Section 128(2)(vii) of the UP Municipalities Act stood omitted by Section 173 of the UPGST Act. (Pankaj Advertising v. State of U.P. – 2019-VIL-70-ALH)

 

Rakesh Bhalla
*Member ZAC & RAC Chandigarh - Central Excise & Service Tax (now GST) & Customs, Govt. of India, Member of Indirect Tax committee SIAM , Member, ASSOCHAM National Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd., Winner Achiever Award 2015 by ICAI (CMA).

Information source- M/s LKS, Nitya Tax Associates, Probability GST updates, PwC India Indirect Tax News Flash, cbic.gov.in and other sources-many thanks to all.
]]>
Eway bill login: GST E-way bill system, upgraded with new features https://www.gstseva.com/eway-bill-login-gst-e-way-bill-system-upgraded-with-new-features Tue, 26 Mar 2019 10:01:22 +0000 https://www.gstseva.com/?p=9894 Eway Bill login

Forthcoming changes in e-Waybill system

  1. Auto calculation of route distance based on PIN code for generation of EWB

 

Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source and destination locations. That is, the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having INVALID PIN codes are flagged for review by the department.

 

Route distance calculation between source and destination uses the data from various electronic sources. This data employs various attributes, for example: road class, direction of travel, average speed, traffic data etc. These attributes are picked up from traffic that is on National highways, state highways, expressways, district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the distance between two postal pin codes. The distance thus derived is then provided as the motorable distance at that point of time.

 

  1. Blocking of generation of multiple E-Way Bills on one Invoice/document

 

Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.

 

  1. Extension of E-Way Bill in case Consignment is in Transit

 

The transporters had represented to incorporate the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.

 

During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-way Bill for calculation of distance for movement and validity date. Route distance will be calculated as explained above.

4. Blocking of Interstate Transactions for Composition dealers

As per the GST Act, the composition tax payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way bill for inter-state movement, if the supplier is composition tax payer. Also, the supplies of composition tax payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of Composition tax payer, document type of Tax Invoice will not be enabled.

]]> New GST rates for real estate sector- GST coucil decision https://www.gstseva.com/new-gst-rates-for-real-estate-sector-gst-coucil-decision https://www.gstseva.com/new-gst-rates-for-real-estate-sector-gst-coucil-decision#respond Wed, 20 Mar 2019 17:15:27 +0000 https://www.gstseva.com/?p=9870 Decisions taken by the GST Council in the 34thmeeting held on 19thMarch, 2019 regarding GST rate on real estate sector

GST Council in the 34th meeting held on 19th March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33rd meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. The council decided the modalities of the transition as follows.
Option in respect of ongoing projects:
2. The promoters shall be given a one -time option to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019.
3. The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply.

New tax rates:
4. The new tax rates which shall be applicable to new projects or ongoing projects which have exercised the above option to pay tax in the new regime are as follows.
(i) New rate of 1% without input tax credit (ITC) on construction of affordable houses shall be available for,
(a) all houses which meet the definition of affordable houses as decided by GSTC (area 60 sqm in metros / 90 sqm in non- metros and value upto RS. 45 lakhs), and
(b) affordable houses being constructed in ongoing projects under the existing central and state housing schemes presently eligible for concessional rate of 8% GST (after 1/3rd land abatement).
(ii) New rate of 5% without input tax creditshall be applicable on construction of,-
(a) all houses other than affordable houses in ongoing projects whether booked prior to or after 01.04.2019. In case of houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
(b) all houses other than affordable houses in new projects.
(c) commercial apartments such as shops, offices etc. in a residential real estate project
(RREP) in which the carpet area of commercial apartments is not more than 15% of total carpet area of all apartments.
Conditions for the new tax rates:
5. The new tax rates of 1% (on construction of affordable) and 5% (on other than affordable houses) shall be available subject to following conditions,-

(a) Input tax credit shall not be available,
(b) 80% of inputs and input services (other than capital goods, TDR/ JDA, FSI, long term lease (premiums)) shall be purchased from registered persons. On shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.
Transition for ongoing projects opting for the new tax rate:
6.1 Ongoing projects (buildings where construction and booking both had started before 01.04.2019) and have not been completed by 31.03.2019 opting for new tax rates shall transition the ITC as per the prescribed method.
6.2 The transition formula approved by the GST Council, for residential projects (refer to para 4(ii)) extrapolates ITC taken for percentage completion of construction as on 01.04.2019 to arrive at ITC for the entire project. Then based on percentage booking of flats and percentage invoicing, ITC eligibility is determined. Thus, transition would thus be on pro-rata basis based on a simple formula such that credit in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards.
6.3 For a mixed project transition shall also allow ITC on pro-rata basis in proportion to carpet area of the commercial portion in the ongoing projects (on which tax will be payable @ 12% with ITC even after 1.4.2019) to the total carpet area of the project.
Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019
7. The following treatment shall apply to TDR/ FSI and Long term lease for projects commencing after 01.04.2019.
7.1 Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer shall be exempted subject to the condition that the constructed flats are sold before issuance of completion certificate and tax is paid on them. Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold after issue of completion certificate, but such withdrawal shall be limited to 1% of value in case of affordable houses and 5% of value in case of other than affordable houses. This will achieve a fair degree of taxation parity between under construction and ready to move property.
7.2 The liability to pay tax on TDR, FSI, long term lease (premium) shall be shifted from land owner to builder underthe reverse charge mechanism (RCM).
7.3 The date on which builder shall be liable to pay tax on TDR, FSI, long term lease (premium) of land under RCM in respect of flats sold after completion certificate is being shifted to date of issue of completion certificate.

7.4 The liability of builder to pay tax on construction of houses given to land owner in a JDA is also being shifted to the date of completion. Decisions from para 7.1 to 7.4 are expected to address the problem of cash flow in the sector.
Amendment to ITC rules:
8. ITC rules shall be amended to bring greater clarity on monthly and final determination of ITC and reversal thereof in real estate projects. The change would clearly provide procedure for availing input tax credit in relation to commercial units as such units would continue to be eligible for input tax credit in a mixed project.
9. The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.
. *****

]]>
https://www.gstseva.com/new-gst-rates-for-real-estate-sector-gst-coucil-decision/feed 0
GST RETURNS: GST Return will simplified Soon https://www.gstseva.com/gst-returns-are-going-to-simplified-soon-gstn-uploaded-the-proposed-returns https://www.gstseva.com/gst-returns-are-going-to-simplified-soon-gstn-uploaded-the-proposed-returns#respond Fri, 08 Mar 2019 08:37:24 +0000 https://www.gstseva.com/?p=9832

GST RETURNS ARE GOING TO SIMPLIFIED SOON GSTN UPLOADED THE PROPOSED RETURNS

Proposed GST Return documents, as approved by competent authority

New Delhi: 08/03/2019

Proposed Return documents, as approved by competent authority, can now be downloaded from the Download section of the GST Portal.

This is to enable various stakeholders in adapting their systems to make them compatible with the proposed return format and business processes.

These are the simplified proposed Return, Simplified Returns under GST regime is now available on GSTN portal in PDF format. 

Type of New Simplified GST Returns :

RET-1 Monthly/Quarterly Return
RET-2 Sahaj Return
RET-3 Sugam Return

Download Returns in PDF from Here:

RET-1 https://bit.ly/2tXf1bb
RET-2 https://bit.ly/2NQoE4S
RET-3 https://bit.ly/2EH3MZE

Features of New GST Returns

1. Periodicity of filing return will be deemed to be monthly for all taxpayers unless quarterly filing of the return is opted for.

2. For newly registered taxpayers, turnover will be considered as zero and hence they will have the option to file monthly, Sahaj, Sugam or Quarterly (Normal)return.

3. Change in periodicity of the return filing (from quarterly to monthly and vice versa) would be allowed only once at the time of filing the first return by a taxpayer.

4. The periodicity of the return filing will remain unchanged during the next financial year unless changed before filing the first return of that year.

5. The taxpayers opting to file quarterly return can choose to file any of the quarterly return namely – Sahaj, Sugam or Quarterly Normal).

6. Taxpayers filing return as Quarterly (Normal) can switch over to Sugam or Sahaj return and taxpayers filing return as Sugam can switch over to Sahaj return only once in a financial year at the beginning of any quarter.

7. Taxpayers filing return as Sahaj can switch over to Sugam or Quarterly (Normal)return and taxpayers filing return as Sugam can switch over to Quarterly (Normal) return more than once in a financial year at the beginning of any quarter.

8. Taxpayers opting to file quarterly return as ‘Sahaj’ shall be allowed to declare outward supply under B2C category and inward supplies attracting reverse charge only. Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52. Such tax payers shall not take credit on missing invoices and shall not be allowed to make any other type of
inward or outward supplies. However, such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in the said return.

9. Taxpayers opting to file quarterly return as ‘Sugam’ shall be allowed to declare outward supply under B2C and B2B category and inward supplies attracting reverse charge only. Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52. Such tax payers shall not take credit on missing invoices and shall not be allowed to make
any other type of inward or outward supplies. However, such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in said return.

10. Taxpayers opting to file monthly return or Quarterly (Normal) return shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices.

]]>
https://www.gstseva.com/gst-returns-are-going-to-simplified-soon-gstn-uploaded-the-proposed-returns/feed 0
Indirect Tax Updates- Feb 2019 https://www.gstseva.com/indirect-tax-updates-feb-2019 https://www.gstseva.com/indirect-tax-updates-feb-2019#respond Wed, 06 Mar 2019 06:37:13 +0000 https://www.gstseva.com/?p=9829 The GST Council (Council), in its 33rd meeting, has recommended a reduction in the rate of tax on supply of under-construction residential properties to 5% (1% for the affordable housing segment) without any input tax credit (ITC). This is proposed to be made effective from 1 April, 2019. Recommendations with regard to the aforesaid by the Council are summarised below

cma rakesh bhalla

By CMA Rakesh Bhalla
Past chairman NIRC of ICAI (CMA)

  • The effective rate of tax on affordable housing properties is proposed to be reduced to 1% without any ITC. For other residential properties, the rate is proposed to be reduced to 5% without ITC.
  • Affordable housing has been defined as a residential house/ flat of carpet area of up to 90 square meters (sqm) in non-metropolitan cities/ towns or 60 sqm in metropolitan cities, with a value cap up to INR 4.5 million in both cases. Bengaluru, Chennai, NCR, Hyderabad, Kolkata and Mumbai would be considered as metropolitan cities.
  • The intermediate supplies relating to land, such as TDR, JDA, lease premium, FSI etc. are proposed to be exempted when in relation to residential property on which GST is payable.
  • Respective committees of the GST Council would prepare the transitional rules covering the issues which may need to be addressed to implement such change in rates and would put it in public domain by 10 March, 2019.

GST invoices to mandatorily mention place of supply: CBIC has reiterated that all registered persons making supply of goods/services in course of inter-State trade or commerce shall specify the place of supply along with the name of the State in the tax invoice.  Contravention of any of the provisions of CGST Act or the Rules made there under attracts penal action under the provisions of Sections 122 or 125. It further notes that number of registered persons (especially in banking, insurance and telecom sectors) are not mentioning place of supply. (Circular No. 90/9/2019-GST, dated 18-2-2019)

-In-bond sale of goods during July, 2017 to March, 2018 Deemed compliance of transaction not reported correctly: Considering that facility to correctly report the nature of transaction in Form GSTR-1 furnished on the common portal was not available during the period July, 2017 to March, 2018, in respect of supply of warehoused goods while being deposited in a customs bonded warehouse, CBIC has clarified that, as a one-time exception, suppliers who have paid CGST and SGST on such supplies, during the said period, would be deemed to have complied with the provisions of law as far as payment of tax on is concerned. (Circular No. 91/10/2019-GST, dated 18-2-2019)

-Government of India vide Circular No. 89/08/2019-GST dated 18th February 2019 titled “Mentioning details of inter-state supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1”
Important points are as follows:

  • Required details to be filed in Table 3.2 of FORM GSTR-3B. Non-filing of appropriate details in this table would result in noon-appropriation of tax to receiving state.
  • Accordingly, it is instructed that the registered persons making inter-State supplies to unregistered persons shall report the details of such supplies along with the place of supply in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR–1 as mandated by the law. Contravention of any of the provisions of the Act or the rules made there under attracts penal action under the provisions of section 125 of the CGST Act.

-Government of India issued notification  “seeks to insert tariff item 9806 00 00 in chapter 98 of the First schedule to Customs tariff act, 1975 to impose basic customs duty of 200% on all goods originating in or exported from Pakistan” The Central Government levied Import duty on all goods originating from Pakistan @ 200%  from 16th February 2019.  Day after announcing that it is withdrawing most favored nation (MFN) status to Pakistan on the backdrop of the Pulwama terror attack, India on Saturday also increased duties on imports from Pakistan to 200%. Increasing duties would significantly hit Pakistan’s exports to India. (Notification No. 05/2019-Customs dated 16th February 2019)

Important cases decided

-The Authority for Advance Rulings in Tamilnadu has issued advance ruling  – Whether sale of Goods stored in Free Trade Warehousing Zone (FTWZ) by a foreign supplier which is cleared to Domestic Tariff Area (DTA) customer in India would result in supply subject to levy under GST Act 2OI7?  Whether foreign supplier need a registration in such FTWZ-  It was held that the Applicant is not liable to pay IGST at the time of removal of goods from the FTWZ to DTA. Recipient unit in DTA is liable to pay taxes on filing Bill of entry for consumption.As no tax is payable by foreign supplier in FTWZ, thereby registration is also not required for the same. (Advance Ruling No.  24/AAR/2018 dated 31st December 2018Sadesa Commercial Offshore De macau Ltd )

-Electricity transmission No. 34 struck down: Gujarat High Court has struck down Para 4(1) of the CBIC Circular No. 34/8/2018-GST as ultra vires the provisions of CGST Section 8 as well as Notification No. 12/2017-Central Tax (Rate), serial No. 25. It is observed that meaning of transmission and distribution of electricity does not change either in Negative list regime  nor in GST regime.  It was also held that services which stood included within the ambit of transmission and distribution of electricity during the pre-negative list regime, as per 2010 circular, cannot now be sought to be excluded by merely issuing a clarificatory circular. (Torrent Power Ltd. v. Union of India – 2019-TIOL-15-HC-AHM-GST)

-GST TRAN-2 – Calcutta High Court allows revision: Observing that there is no ground as to why a person filing Form GST TRAN-2 should not be allowed to correct and file such revised form, Calcutta High Court has allowed filing of revised Form GST TRAN-2 (Optical Health Solutions Pvt. Ltd. v. UoI SCC online Cal 171)

-Goods detained due to multiple invoices in single e-way bill Kerala High Court grants interim relief: The Court provided interim relief after observing that the department may find it practically difficult in tracking multiple invoices with respect to a single e-way bill. It noted that it was not a case where the e-way bill did not mention all the invoices. (Stove Kraft (P) Ltd. v. Asst. STO – 2019-VIL-61-KER)

-GST on TCS collected under Income Tax CBIC Circular No. 76 stayed: Kerala High Court has directed the State authorities not to act on clarification at Sl. No. 5 of the CBIC Circular 76/50/2018-GST pending disposal of the writ petition. The circular states that TCS collected under Income Tax Act is includible since value to be paid by buyer is inclusive of said TCS.  The High Court observed that the petition raises prima facie issue which needs attention. (PSN Automobiles v. UOI – 2019-TIOL-14-HC-KERALA-GST)

-Non-production of goods is not a ground for imposition of penalty: Kerala High Court has held that penalty cannot be imposed for not producing the goods (before the officer) after release on bond, when there is a security equivalent to value of goods which could be invoked. It noted that there was no question of tax and penalty being not paid as bank guarantee could be invoked at any time. (Noushad Allakkat v. Stata Tax Officer – WA. No. 2070 of 2018, decided on 8-11-2018, Kerala High Court )

-Profiteering even when increased base price still lower than pre-GST price: In a case of increase in the base price of product after GST rate reduction, where base price was still lesser as compared to pre-GST price, National Anti-profiteering Authority has held that benefit of price reduction was not passed on. The Authority in this regard observed that not increasing MRP when tax rates were increased after implementation of GST was a business call taken by the respondent and therefore no concession on this ground would be available. It held that the benefits from rate reduction cannot be denied just because the MRP was not changed earlier by the assessee to extend extra benefit to consumers. (Surya Prakash Loonker v. Excel Rasayan Pvt. Ltd. – 2019-VIL-02-NAA)

-Recovery of part of premium from employees Maharashtra AAR has held that payments received by the applicant-company from its employees for payment to insurance companies cannot be treated as a supply of service. Further, AAR also held that ITC cannot be claimed by assessee in respect of hotel accommodation for its expatriate GM/MD since it was for their personal comfort and if they had stayed in other residential flat, GST would not have been paid as renting service in such case was exempted.  (POSCO Order No. GST-ARA-36/2018-19/B-110)

-Services of sales promotion to principal Coverage under intermediary service: Karnataka Appellate AAR has held that appellant providing services of business marketing, sales promotion and post sale support services in India for a principal company in Germany will be termed intermediary under section 2(13) of IGST Act. ( Toshniwal Brothers (P) Ltd. Order No. KAR/AAAR/06/2018-19, dated 9-1-2019, Karnataka AAAR )

Customs

-All Industry Rates of duty drawback amendments effective from 20-2-2019: Ministry of Finance has clarified amendments made to All Industry Rates (AIRs) of duty drawback by Notification No. 12/2019-Cus. (N.T.), effective from 20-2-2019. Changes include enhanced AIRs/caps of drawback on leather sofa cover including automobile upholstery, synthetic filament tow, carpets, silk articles, boots, gold jewellery and mobile phones. Drawback has been rationalised for silver jewellery/articles. Certain new tariff items have been created to allow better differentiation of exports.  (CBIC Circular No. 5/2019-Cus., dated 20-2-2019 )

-Advance authorisation – Removal of pre-import condition for IGST exemption: Pre-import condition to avail exemption from IGST and Compensation Cess for imports under Advance Authorisation has been removed.  (CBIC Notification No. 01/2019-Cus., dated 10-01-2019 ) As per the new additional conditions, in case of imports after discharge of export obligation in full, if IGST exemption is claimed and if the facility of Input Tax Credit (ITC) has been availed in respect of inputs used for manufacture and supply of goods exported, then the importer needs to furnish a bond, binding himself to use the imported material in his factory or in the factory of his supporting manufacturer. Additionally, the importer is now required to submit a certificate from a chartered accountant certifying that the inputs have been so used.

-Clubbing of Authorisations issued only within 18 months – HoP amended: DGFT has amended Para 4.38 of FTP Handbook of Procedures relating to Facility of Clubbing of Authorisations. Only authorisations issued within 18 months from the date of earliest authorisation can be clubbed subject to condition that imports are made within 30 months of the earliest authorisation. Any import made beyond 30 months of the earliest authorisation shall be regularised as per Para 4.49 of HoP. All cases clubbed as per earlier provisions are not to be reopened. (Public Notice No. 70/2015-2020)

-Essential parts can be treated as complete goods for customs but not Motor Vehicle Act: In a case involving import of essential parts for assembling e-rickshaw, Delhi High Court has held that Rule 2(a) of Interpretative Rules, treating unfinished articles as complete. The High Court observed that legal fiction created by a statute cannot be extended beyond the purpose for which it is created. It directed Customs to clear goods withheld because of absence of type certificate required under Motor Vehicles Act. (Ramakrishna Sales v. UOI – W.P.(C) 1232/2018, decided on 31-1-2019, Delhi High Court]

-Drawback on re-exports – GR declaration when not required: Delhi High Court has held that non-commercial re-export of duty-paid goods would be entitled to drawback under Section 74 of the Customs Act and that requirement of Guaranteed Remittance was not necessary in a case where the exporter and owner of the goods were one and the same. The High Court in this case, Kingfisher Airlines was cannibalized and subsequently an aircraft engine was imported so that the aircraft chassis could be flown back, held that the petitioner was entitled to drawback on re-export of aircraft engine. (International Lease Finance Corporation v. UOI – W.P.(C) 6344/2018, decided on 10-1-2019, Delhi High Court)

-Demand of anti-dumping duty for imports under Advance Authorisation: Rejecting the plea that bond/LUT executed by assessee-importer did not cover the anti-dumping duty leviable on material imported under Advance Authorisation, The Tribunal observed that the bond executed did not make any distinction between the duties leviable. Larger Bench order in Caprihans and Bombay High Court decision in Dharampal Lalchand Chug were distinguished. The case was also found fit for category (d) of Explanation 1 of Customs Section 28 (relevant date). (Kopran Ltd. v. Commissioner – Order No. A/85037/2019, dated 10-1-2019, CESTAT Mumbai)

-Clarification issued by Ministry to assessee is not a circular: CESTAT Delhi has held that a clarification issued by the Ministry to the assessee cannot be treated as a circular and that the same is not binding on the adjudicating authority who can differ on well-reasoned arguments. The Tribunal upheld the order of Commissioner (Appeals) extending exemption under Notification No. 12/2012-Cus., to a manufacturer of power bank where the appellate authority ignored the clarification issued by Ministry and asserted that power bank was a battery charger of mobile handsets. Judgment of the Supreme Court in State of Punjab v. Nokia India was relied. (Commissioner v. S B Industries – 2019-VIL-37-CESTAT-DEL)

Central Excise & Service Tax

-Service Tax exemption to services provided that exemption is available to ADB and IFC from by ADB & IFC: CBIC through Circular No. GST in terms of provisions of ADB Act and IFC 211/1/2019-ST dated 15-01-2019 has clarified  that the services provided by Asian Development Bank (ADB) and Indian Financial Corporation (IFC) are exempted from service tax too ( Circular No. 83/2/2019-GST )

-Warehouse in foreign land can be a place of removal to avail Cenvat Credit: CESTAT Mumbai has held that Cenvat credit can be availed on foreign warehouse services received by a company in India for which service tax was paid under reverse charge mechanism. It was held that denial of credit would amount to double taxation. (Eaton Industrial System (P) Ltd. v. Commissioner – 2019-TIOL-470-CESTAT-MUM)

-CAG cannot carry compulsory service tax audit of private agencies, after GST: Relying on Central GST Section 174(2), Gujarat High Court has held that there was no saving of Rule 5A of Service Tax Rules, 1994 such that fresh audit proceedings under the said rule cannot be initiated by CAG. It was observed that with the enactment of GST, Finance Act 1994 and Service Tax provisions stood repealed. The High Court in this regard stayed CAG audit of a private limited company providing warehouse and logistical support services in SEZ. CAG was directed not to carry out any further Service Tax audit of petitioner. (Oil Field Warehouse and Service Ltd v. UOI – R/Special Civil Application No. 16232 of 2018, decided on 17-10-2018, Gujarat High Court)

-Cenvat credit on guest house – formula set aside: Bombay High Court has held that rough and ready formula as formulated by CESTAT regarding availability of Cenvat credit on guest houses, that credit was available only on guest houses situated near the manufacturing unit, was not entirely satisfactorily. The High Court in this regard held that even in relation to guest house not situated close to the manufacturing unit, if the use was not for personal use or consumption of the employees exclusion clause in definition of input service, may not apply. (ACG Associated Capsules P. Ltd. v. Commissioner – Central Excise Appeal No. 55 of 2018, decided on 5-12-2018, Bombay High Court)

-Cenvat credit on maintenance charges for common area of business premises: CESTAT Delhi has allowed Cenvat credit on maintenance charges for common area of a business premises taken on rent by assessee. The charges were related to roads, street lights, drainage, etc., provided beyond the manufacturing premises but were charged based on per square meter of business premises occupied. The Tribunal observed that these charges were indirectly related to business and were covered in the main part of definition of input services. Judgment of the Supreme Court in the case of Karnani Properties was relied on. (Mahle Engine Components v. Commissioner – Final Order No. 50046/2019, dated 15-1-2019, CESTAT Delhi)

-Cenvat reversal on inputs cleared as such FIFO system to be followed: In a case involving removal of inputs as such, CESTAT Ahmedabad has held that first-in first-out (FIFO) system must be applied and removal of inputs from the old stock of a manufacturer must be considered. t noted that that the quantity removed from time to time was carried forward from the old stock and the stock balance of the input was much more than the quantity cleared. (Wimplast Ltd. v. Commissioner – Final Order No. A/12948/2018, dated 13-12-2018, CESTAT Ahmedabad)

Value Added Tax (VAT)

-Sale of goods when in bonded warehouse, not exempt from CST: Bombay High Court has held that sale made by transfer of documents while goods are in bonded warehouse would not qualify as exempt under Section 5(2) of the Central Sales Tax Act, relating to high sea sales. Observing that concept of crossing the customs frontiers of India is distinct from customs barriers of India, the High Court termed such sale as local sale. (Commissioner v. Radhasons International – 2019-VIL-62-BOM)

-Sales tax on replacements during warranty period Matter referred to Larger Bench: Supreme Court has referred to its Larger Bench the issue as to whether sales tax was payable based on credit note issued for replacement of spare parts of automobile under warranty. It expressed reservations on propositions laid down in Mohd. Ekram Khan & Sons. The Court in this regard observed that price included cost of spare parts and that sales tax was paid on car as well as spare parts inventory with the dealer. (Tata Motors v. Dy. Commissioner Judgement dated 5-2-2019 in Civil Appeal No. 1822 of 2007 and Ors., Supreme Court)

-Edible oil, vanaspati and sugar are  agricultural produce for market fee-  Supreme Court has upheld High Court Order holding that edible oil, vanaspati and sugar are covered under he definition of agricultural produce under Section 2(1)(a) of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, for the purpose of levy of market fee. (Britannia v. Bombay Agricultural Produce Marketing Committee – Civil Appeal No. 1746 of 2010, decided on 24-1-2019, Supreme Court)

 

About Author: Member ZAC & RAC Chandigarh - Central Excise & Service Tax (now GST) & Customs, Govt. of India, Member of Indirect Tax committee SIAM , Member, ASSOCHAM National Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd., Winner Achiever Award 2015 by ICAI (CMA).
]]>
https://www.gstseva.com/indirect-tax-updates-feb-2019/feed 0
The Central Board of Indirect Taxes and Customs (CBIC) has constituted three Working Groups to study and recommend measures to facilitate trade, promote exports and improve compliance https://www.gstseva.com/the-central-board-of-indirect-taxes-and-customs-cbic-constituted-to-measures-to-facilitate-following https://www.gstseva.com/the-central-board-of-indirect-taxes-and-customs-cbic-constituted-to-measures-to-facilitate-following#respond Sun, 24 Feb 2019 06:41:25 +0000 https://www.gstseva.com/?p=9822 The Central Board of Indirect Taxes and Customs (CBIC) has constituted three Working Groups to study and recommend measures to facilitate trade, promote exports and improve compliance.

The Working Groups will focus on:-

  • improving the legislative structure of customs tariff and update it to suit the emerging and future needs of the economy and industry. Special focus would be given to create a comprehensive export tariff structure to enhance India’s export competitiveness
  • export promotion and facilitation with emphasis on boosting exports through e-commerce, addressing the trade facilitation barriers faced in India’s export markets and improving the quality of logistics services for exporters.
  • enhancing compliance, plugging loopholes to improve revenue collection on customs and curb IGST refund frauds

The groups will consult the stakeholders extensively, including the Export Promotion Councils and relevant wings of the Ministry of Commerce and industry.

The Groups will submit their report within a period of two months.

“The recommendations of the Groups, which will be taken-up for the implementation on priority, would further enhance the ease of doing business and export competitiveness. CBIC will be using advanced data analytics tools for augmenting revenue and curbing frauds”, said Pranab Kumar Das, Chairman, Central Board of Indirect Taxes and Customs.

]]>
https://www.gstseva.com/the-central-board-of-indirect-taxes-and-customs-cbic-constituted-to-measures-to-facilitate-following/feed 0
GST return GSTR 3B due date for month of jan 2019 extended to https://www.gstseva.com/gst-return-gstr-3b-due-date-for-month-of-jan-2019-extended-to https://www.gstseva.com/gst-return-gstr-3b-due-date-for-month-of-jan-2019-extended-to#respond Wed, 20 Feb 2019 17:42:43 +0000 https://www.gstseva.com/?p=9818 GST return GSTR 3B due date for month of jan 2019 extended to

For All states except Jammu and Kashmir 22nd Feb 2019

for Jammu and Kashmir 28th Feb 2019

Here is the notification

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India
Ministry of Finance

(Department of Revenue)
Central Board of Indirect Taxes and Customs

Notification No. 09/2019 – Central Tax
New Delhi, the 20th February, 2019
G.S.R…..(E).–In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), the Commissioner, on the recommendations of the Council, hereby makes the following further amendments in notification number 34/2018 – Central Tax, dated the 10th August, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.761(E), dated the 10th August, 2018, namely:–

In the said notification, in the first paragraph, after the sixth proviso, the following provisos shall be inserted, namely: –

“Provided also that the return in FORM GSTR-3B of the said rules for the month of January, 2019 shall be furnished electronically through the common portal, on or before the 22nd February, 2019:

Provided also that the return in FORM GSTR-3B of the said rules for the month of January, 2019 for registered persons whose principal place of business is in the State of Jammu and Kashmir shall be furnished electronically through the common portal, on or before the 28th February, 2019.”.

[F.No.20/06/16/2018-GST (Pt. II)]
(Dr. Sreeparvathy S.L.) Under Secretary to the Government of India

Note: – The principal notification number 34/2018 –Central Tax, dated the 10th August, 2018 was published in the Gazette of India, vide number G.S.R. 761(E), dated the 10th August, 2018 and was last amended by notification no. 70/2018, dated the 31st December, 2018, published in the Gazette of India, Extraordinary, vide number 1247 G.S.R. (E), dated the 31st December, 2018.

]]>
https://www.gstseva.com/gst-return-gstr-3b-due-date-for-month-of-jan-2019-extended-to/feed 0