01 January 0001

Tax Amicus: December 2016


Anti-profiteering measure and price control mechanism under GST

The revised Model GST Law proposes to bring price control mechanism to ensure that input tax credits availed by a registered taxable person or the reduction in the price on account of any reduction in the tax rate under GST, have actually resulted in commensurate reduction in the price of the goods or services. It may not be practically possible for a business to have one-to-one correlation between procurement and supply of goods and services, particularly the input tax credits on common input services. Businesses should consider mapping all transactions by comparing price variances on account of change in tax structure.

Goods & Services Tax (GST)

  • Jharkhand Government has extended the due date for enrolment of existing VAT dealers at the GSTN portal


Central Excise

Ratio decidendi

  • Interest on wrongfully availed Cenvat credit – Consideration of PLA amount as evidence of sufficiency of balance – CESTAT, Delhi
  • No recovery of proportionate input credit on loss of final goods unless cogent evidence of clandestine removal available – CESTAT, Chennai
  • Embargo created in Cenvat Rule 6 has no application for payment of amount of 6% on electricity wheeled out from the factory – CESTAT, Delhi
  • Pre-deposit on appeal to Tribunal – No adjustment of amount deposited before Commissioner (Appeals), available – CESTAT, Ahmedabad
  • Packing of pre-determined quantity of various ‘O’ ring and ‘U’ cap seals in plastic bags as ‘seal kits’ does not amount to manufacture – CESTAT, Mumbai
  • Operation theatre lights covered under Heading 9018 and not under Heading 9405 – CESTAT, Delhi
  • Cutting, bending and grinding of copper tubes to turn the same into gas compressors amount to manufacture – CESTAT, Delhi



Notifications and Circulars

  • Minimum Import Price for certain iron and steel products to continue till 4-2-2017
  • Export/Import documents – Printing of specified documents abolished
  • Express Cargo Clearance System introduced

Ratio decidendi

  • Valuation – Different prices for goods imported in same vessel by same importer no ground to reject transaction value – CESTAT, Mumbai
  • SAD refund permissible when imported goods sold in parts after breaking up – CESTAT, Mumbai
  • Chemical testing required even after physical examination of goods – CESTAT, Delhi
  • Importers can be allowed to comply with provisions of Legal Metrology Act after import but before clearance – CESTAT, Allahabad


Service Tax

Notifications and Circulars

  • Exemption to services by bank for settlement of amount upto Rs. 2000 transacted through payment card

Ratio decidendi

  • Payment towards shared expenditure cannot be treated as towards service – Supreme Court
  • Cenvat credit on rent paid for the second unit which is job worker to principal unit, admissible - CESTAT, Chennai
  • Renting of motor vehicles for transport of employees to factory – Credit admissible – CESTAT, Delhi
  • Refund under Notification No. 41/2007-S.T - Claim to be filed within sixty days of payment of tax when right to refund accrues – CESTAT, Delhi
  • Rebate of service tax paid under reverse charge on GTA service used for exports, admissible – CESTAT, Delhi
  • Refund under Notification No. 41/2007-S.T. - Consolidated certificate is valid – CESTAT, Delhi


Value Added Tax


  • Rajasthan VAT – New Amnesty Scheme for dealer or person against whom total outstanding demand till 31st July, 2016 is less than Rs. 25 crores under specified Acts
  • Gujarat VAT - Reversal of Input Tax Credit - Gujarat VAT Act amended

Ratio decidendi

  • Battery charger is an accessory and not part of mobile phone – Karnataka High Court
  • Battery charger sold along with mobile phone – Allahabad High Court quashes notices for reassessment
  • No liability on bank to pay purchase tax for accepting EXIM Scrips –Supreme Court
  • Inter-unit transfer of yarn between two units of same entity with different TINS is not sale – Madras High Court


December, 2016/Issue-66 December, 2016/Issue-66

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