01 January 0001

Tax Amicus: April 2018

by Brijesh Kothary Nikhil Agarwal

Relevance of amortization for valuation under GST law

Job workers use moulds and dies provided to them by their principals. Whether amortised value of such moulds should be included by job workers in the job charges for discharging GST? The authors have attempted to answer this question in the light of recent clarification by the department. According to them, the fact that mould is used by job worker for manufacture of finished goods for the principal, cannot lead to an inference that the same represents payment in respect of, in response to or for inducement of supply. Even though the job worker cannot carry out the activity without the mould, neither the value of materials nor the cost of moulds, can be regarded as ‘consideration’ for supply. The authors point out that there is an apparent contradiction in the departmental clarification and the same needs to be addressed on priority…


Goods and Services Tax (GST)

Notifications and Circulars

  • IT Grievance Redressal Mechanism put in place to resolve issues faced by taxpayers due to technical glitches
  • Exports – LUTs deemed to be accepted on generation of acknowledgment bearing ARN
  • Job work under GST clarified – CBIC issues elaborate Circular
  • GSTR-1 – Due dates for filing GSTR-1 for next three months notified
  • GSTR-6 – Due date for filing GSTR-6 extended
  • GST TRAN-2 can be filed till 30-6-2018
  • GST rates on supply of food and drinks in trains and at platforms clarified
  • Refund claim by UN agency, consulate or embassy – Time-limit extended to 18 months
  • Reverse charge exemption, E-way Bill, and GSTR-3B – CBIC issues notifications to implement various decisions of GST Council

Ratio decidendi

  • Transitional credit – Restriction of one year for ITC on stock of goods, valid – Bombay High Court
  • Supply of UPS along with battery for a single price is “mixed supply” – AAR, West Bengal
  • Skin Care Preparations – Classification as medicaments or as cosmetics – AAR, West Bengal holds that preparations used to cure, treat, or prevent a disease are to betreated as medicament, unless specifically included under Heading 3304
  • Recovery of food expenses from employees for canteen services provided by company liable to GST – AAR, Kerala
  • No GST on sale of goods procured and directly supplied outside India, without importing to India at any point – AAR, Kerala
  • Block Joining Mortar’ is to be classified under Tariff Item 3214 90 90 – AAR, West Bengal
  • EU VAT – Limitation not applicable for claiming VAT refund/adjustment when not possible for assessee to claim the same earlier – CJEU
  • EU VAT – No input VAT deduction for period when registration revoked – CJEU



Notifications, Public Notices and Circulars

  • Demand for duty or interest - Pre-notice Consultation Regulations notified
  • Exemptions from IGST and Compensation Cess extended till 1-10-2018
  • BCD increased on certain parts for use in manufacture of cell phones
  • Monetary limit for departmental appeals extended to classification and refund cases
  • Second-hand goods can be freely imported for repairs
  • Japan – Customs duty reduced on specified imports therefrom
  • Pepper import policy revised – MIP prescribed
  • Pneumatic tyres for buses/lorries, from China – CVD investigation initiated
  • Apple imports allowed without port restrictions
  • Jute products from Nepal – Exemption from Additional Customs duty
  • Solar panels/modules equipped with bypass and/or blocking diodes – Classification

Ratio decidendi

  • Exemption to import of inputs when contract for final product cancelled – CESTAT Delhi
  • Importer – Name in bill of lading not conclusive proof of ‘importer’ – CESTAT Delhi
  • Use’ of product when not to be sole consideration for its classification - US Court of Appeals for the Federal Circuit


Central Excise and Service Tax

Ratio decidendi

  • Advisory for investing in real estate firms in India eligible for service export benefit – CESTAT Delhi
  • Cenvat credit available on capital goods used in mines even when waste cleared therefrom to others – CESTAT Chennai
  • Cenvat credit - Notification prescribing time limit applicable prospectively – CESTAT Mumbai
  • SEZ – Exemption from Service tax when service used outside SEZ also – CESTAT Chennai
  • Valuation – Reimbursable expenses not includable prior to 14-5-2015 – Supreme Court
  • SSI exemption on use of brand name on packing material when not available – CESTAT Delhi
  • Commercial Training or Coaching service – Sale of prospectus not covered – CESTATMumbai
  • Technical Testing & Analysis services – Liability on import of service before and after 1-4-2011 – CESTAT Mumbai
  • Fabric based blinds coated with polymer classifiable under Heading 6303 – CESTAT Chennai
  • Excise Section 35 cannot take down powers of High Court under Article 226 – Full Bench of Andhra Pradesh High Court


Value Added Tax (VAT)

Ratio decidendi

  • Kerala VAT - Ice cream when not covered under ‘cooked food’, and revision of deemed approval – Kerala High Court
  • Karnataka VAT – Input Tax credit when invoices not in name of assessee – KarnatakaHigh Court


April, 2017/Issue-82 April, 2018/Issue-82

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