01 January 0001

Tax Amicus: April 2017


E-Way Bill – Taking GST on digital highway -

The concept of way bill and the requirement for every consignment to be accompanied by a way bill has been retained under the GST regime, albeit electronically. The draft Rules prescribe for E-way Bill Number, and provisions relating to supplies by unregistered persons, transfers and multiple consignments. These Rules prescribe validity period of e-way Bills, with maximum period being 15 days, and state that the recipient is required to communicate acceptance or rejection of the details of such bills after the same are made available to him. It may also be noted that though draft rules empower the Commissioner to authorize interception and verification of e-way bills and EBNs, physical verification of goods within a State will be limited to one instance. Lastly, while installation of RFID tags would assist in reducing the paper trail, same would require robust IT infrastructure and infallible digital systems…


Applicability of GST on GTA -

CGST Act, 2017 provides for taxing supply of inter-unit services. The intention is to seamlessly pass the credit to the other unit from where the ultimate taxable supply is being undertaken. In a case where the receiver of such credit is effecting supplies on which tax is to be discharged by the recipient under reverse charge, question of passing any credit does not arise as the same will not get utilized. If the same is taxed, it will only result into blockage of credits at the end of receiver which is not even logical and may not be the intention of the government. The author in this article points out an intricate provision as contained in the CGST Act read with draft Valuation Rules. He is of the view that industry should represent to the government so that such issues are taken care of before the final statutory dispensation is in force.


Goods and Services Tax (GST)

Telangana, Bihar and Rajasthan pass SGST Bill – CBEC releases draft GST rules on several provisions


Central Excise

Ratio decidendi

  • Cenvat credit on capital goods installed away from factory, when eligible – CESTAT Chandigarh
  • Cenvat credit on items used in transmission line erected as dedicated line, available – CESTAT Delhi
  • Manufacture – Refining of waste and used oil and sale thereof to industrial customers in bulk packs is not ‘manufacture’ – CESTAT Allahabad
  • Interest on delayed refund payable even when Court stipulated period for authority to decide application – Gujarat High Court
  • Area based exemption - Change in ownership, alteration of machinery and addition of new products not jeopardize eligibility to exemption – CESTAT Chandigarh
  • Area based exemption under Notification No. 32/99-C.E. when old machinery sold and fresh investment made sold - CESTAT Kolkata
  • EOU - Epoxy resins used for polishing of granite slabs are not raw materials – CESTAT Hyderabad
  • Milk powder even with addition of artificial flavouring substance classifiable under Chapter 04



Notifications and Circulars

  • Reward scheme scrips (MEIS and SEIS) allowed to be utilised for EO default duty payment under previous FTPs
  • EOU – No requirement of refund of deemed export benefit when goods procured indigenously returned back
  • Exemption under other notifications available even when contract registered under Project Import Regulations
  • Specified medicines for supply under Patient Assistance Programmes, exempted

Ratio decidendi

  • Valuation of goods imported from sister concern correct when actual amount of procurement price by sister concern declared – CESTAT Mumbai
  • Refund of SAD - Absence of sale invoice for imported goods when not fatal – CESTAT Hyderabad
  • Second hand furniture imported by service provider covered under ‘capital goods’ – CESTAT Mumbai
  • Certified copy of Country of Origin certificate can be produced post import – CESTAT Hyderabad
  • Conversion of Shipping Bill from Duty drawback to DFIA Scheme - CBEC Circular prescribing time limit for conversion of shipping bill goes beyond mandate of law – CESTAT Mumbai
  • Appeal to Supreme Court - Conditions for admission of appeal from Appellate Tribunal laid down by Supreme Court
  • Thermacool Thermage Radio Frequency Therapeutic device and accessories classifiable as device for medical treatment of skin – CESTAT Delhi


Service Tax

Notifications & Circulars

  • Due date for filing ST-3 Return extended to 30 April
  • Transportation of goods by vessel for import into India where provider and receiver both are located in non-taxable territory – Importer made liable from 23-4-2017

Ratio decidendi

  • Cargo Handling service or Packaging service – Word ‘packing’ in definition of ‘Cargo handling service’, is referable to the word ‘cargo’ – Supreme Court
  • Reverse charge mechanism – No liability when foreign entity has establishment in India, and in case of repayment of term loan – CESTAT Delhi
  • BAS – Activity of physical printing of telephone bills not covered under ‘billing’ – CESTAT Delhi
  • Support service of business or commerce – Unless activity optional for continued existence of organization and permits flexibility of self-performance vis-a-vis outsourcing, same not covered – CESTAT Mumbai
  • Technology transfer not covered under Consulting Engineer service – CESTAT Delhi
  • Cenvat credit when Broadcasting service also rendered in J&K – Credit not to be restricted attributing certain quantum to inputs/input services used for providing service in J&K – CESTAT Mumbai
  • BAS – Promotion of trademark, not covered – CESTAT Mumbai


Value Added Tax (VAT)


  • Rajasthan VAT and Entry Tax - Amnesty Schemes introduced
  • Karnataka - Amnesty Scheme introduced for various Taxes

Ratio decidendi

  • Entry Tax on machine brought from outside, used and then sent back, valid – Allahabad High Court
  • ITC on goods received back from job worker – Period of 90 days prescribed in Punjab VAT Rule 20 is directory – Punjab & Haryana High Court


April, 2017/Issue-70 April, 2017/Issue-70

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