01 January 0001

Tax Amicus: August 2019

Conundrum of employer-employee relation – HR policies and GST implications
by Astha Sinha and Nirav S. Karia

The first article in this issue of Tax Amicus deals with GST implications on provision of various facilities by the employer to the employee. The authors believe that policies such as bus services, canteen services, mobile expenses, housing allowance/provisions, insurances, car lease policy, issue of coupons, education assistance policy, policies on deputation, loan policies and notice pay recovery are just some of the policies that require analysis from the GST perspective. It is becoming imperative for the HR department to seek advice from their indirect tax department about their existing and proposed policies. The authors in this regard also discuss the language used in Annual Return / Reconciliation Statement which states that the information given is “True and correct” and, point out that this is different from the general accounting difference of information being “True and fair”. According to the authors, there are many open-ended questions on this front, and the only way to safeguard the company from such litigation is to turn back and have one last look at the HR transactions before filing of the annual return…

Amendment to Section 12(8) of the IGST Act – Simplifying or complicating?
by Jayesh Talreja and Chaitanya Bhatt

Section 12 of IGST Act, 2017 provides for determination of place of supply in case both the service provider and service receiver are located in India. As per sub-section (8) of Section 12, place of supply of services by way of transportation of goods shall be the location of recipient, if registered. However, a proviso was inserted with effect from 1-2-2019 providing that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods. Due to insertion of the proviso, the place of supply for exports shall always be outside India and thus supply shall always be inter-state supply, irrespective of the location of recipient. However, while inserting the proviso, the government did not envisage that the location of recipient and location of supplier continue to remain in India. Therefore, such supply of service does not fulfil the criteria of export of service and accordingly, the intention of government does not get fulfilled. Further, as the place of supply of transportation services and the location of recipient are different, the department may dispute the availability of ITC…

Goods & Services Tax (GST)

Notifications and Circulars

  • Due date for filing GST annual return for 2017-18 postponed to 30-11-2019
  • State and Area Benches of Goods and Services Tax Appellate Tribunal in specified States and Union Territories notified
  • GST rate reduced on electrically operated vehicles from 1-8-2019
  • Composition scheme - Due date for Form CMP-08 extended till 31-8-2019
  • Blocking of e-way bill generation for non-filers of returns, postponed
  • GST on monthly subscription charged by RWAs, clarified

Ratio decidendi

  • Lapsing of ITC accumulated due to inverted rate structure on fabrics – Proviso in notification and circular quashed – Gujarat High Court
  • Show cause notice is sine qua non to proceed with recovery under GST – Karnataka High Court
  • Summons – High Court rejects plea that summons can only be issued after decision under CGST Section 73 – Madhya Pradesh High Court
  • Power of arrest to be exercised with lot of care and circumspection – Gujarat High Court
  • ITC on vehicle for carrying cash – AAAR Order declining ITC set aside – Bombay High Court
  • ITC - Mere reflection of transitional credit in ledger is not an act of availment – Patna High Court
  • Interest on delayed payment of GST & filing of returns – Larger Bench to consider scope of CGST Section 50 – Madras High Court
  • Seizure - Unaccounted goods at disclosed place of business are ‘secreted’ – Allahabad High Court
  • Anti-profiteering - Stay on suo motu notice seeking information on all products – Delhi High Court
  • ITC need not be reversed in case of post purchase discount – Appellate AAR Tamil Nadu
  • Valuation – Supply to distinct person – Applying 2nd proviso to Rule 28 directly not sustainable – AAR Tamil Nadu
  • Hotel accommodation booking service – GST payable @ 5% without ITC – AAR Delhi
  • No composite supply if all ingredients are equally important – Appellate AAR Maharashtra
  • Supply of food at occasional events taxable @ 18% GST – Appellate AAR West Bengal
  • No ban on separate GST registration to multiple firms in a co-working space – AAR Kerala
  • GST liability on residential flats constructed partially before and partially after introduction of GST – Time of supply – AAR Karnataka
  • Valuation - Amortization cost not includable in transaction cost if tools on FOC supplied under contract – AAR Karnataka


Notifications and Circulars

  • Re-import of goods earlier sent out for exhibition – IGST when not payable
  • Re-imports – Recovery of export benefits taken under reward schemes
  • IGST refund to exporters – Mis-match between GSTR-1 and 3B during FY 2018-19 – Verification procedure extended
  • IGST refund in invoice mismatch issue – Officer interface facility extended
  • Fees for excess utilization of duty saved amount can be paid within 2 years
  • CBIC directs gradual relaxation in percentage of physical examination of exports
  • AIR drawback when not applicable for calculation of Brand Rate
  • Refund of IGST paid on imports by specialized agencies clarified
  • Global Authorization for Intra-Company Transfer (GAICT) of SCOMET Items/Software/Technology – Procedure specified

Ratio decidendi

  • Customs not to recover from legal heirs of deceased noticees/assessees – Delhi High Court
  • Seizure, absence of SCN – Right to unconditional release when not available – Delhi High Court
  • Classification of goods – Similarity of contents when not a criterion – CESTAT New Delhi
  • Classification of goods - No estoppel to raise dispute in subsequent import – CESTAT Mumbai
  • Valuation - Declared value cannot be revised just because it is lower than in NIDB database – CESTAT Chennai
  • Effective date of STP approval cannot be amended to an earlier point of time, once imports made – Madras High Court
  • Demand of duty and interest when delay on part of authorities processing necessary redemption certificate – Andhra Pradesh High Court
  • Denial of cross examination of Directors not violative of principles of natural justice in all cases – Delhi High Court
  • EPCG scheme – No interest payable on composition fee as same not duty under Customs Section 28 – CESTAT Bangalore
  • Cabling of various parts of agriculture machine is not ‘manufacture’ – Benefit available as full machine and not as parts – CESTAT Delhi

Central Excise and Service Tax

Notification and Circular

  • Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 effective from 1-9-2019 – CBIC clarifies on coverage of the scheme
  • Central Excise and Service Tax – Monetary limit for departmental appeals before CESTAT, High Court and Supreme Court raised

Ratio decidendi

  • Excise valuation – No basis for adopting cost inflation index of Income Tax – CESTAT Delhi
  • Commercial training or coaching service - Only institute issuing certificate for course recognized by law not liable to Service Tax – CESTAT Larger Bench
  • Cenvat credit available on product liability insurance – CESTAT Chennai
  • Rebate on exports – No condition for export goods to be manufactured inside country – Allahabad High Court
  • Refund of Cenvat credit – EOU unit is in DTA in respect of SEZ unit – CESTAT Hyderabad
  • Leasing of work-wear – Maintenance does not mean effective control retained – CESTAT Chandigarh
  • GTA exemption for transport of fruit - Any produce of a tree as a result of ripened ovary is ‘fruit’ – CESTAT Hyderabad
  • Subsequent curtailment of an incentive scheme – Promissory estoppel – Bombay High Court

August, 2019/Issue-98 August, 2019/Issue-98

Browse articles