01 January 0001

Tax Amicus: December 2017

by Devanu Roy Choudhury

Treatment of vouchers under GST law

Vouchers are instruments which are redeemable on its face value against supply of goods or services. Though legislature has sought to tax vouchers under the GST regime, there are unresolved problems which may lead to controversy in the near future. The GST legislation in India has borrowed the definition of ‘voucher’ and the provisions relating to ‘time of supply’, from the Voucher Directive of the European Union. However, the Indian provisions are not clear about the identification of supply at the time of issuance of vouchers. Deliberating on the distinction between Single-purpose vouchers and Multi-purpose vouchers, the author believes that businesses issuing such SPVs and MPVs may need to re-visit their practices. Further, as new forms of vouchers emerge, issues are bound to be more pronounced, and hence every business house employing voucher system has also to pay attention to attendant issues like valuation and input tax credit.


Goods and Services Tax (GST)

Notifications, Circulars and Press Releases

  • Last date for filing various Returns and Declarations extended – GSTR-5 and 5A, Form GST ITC-01 and Form GST CMP-03 can be filed by 31st January 2018
  • CGST Rules amended to revise GSTR-1 and Forms GST RFD-01 and 1A
  • E-way bill system - Rules for implementation of nationwide e-way bill system for inter-State movement of goods on a compulsory basis to be notified with effect from 1st of February, 2018
  • Refund on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger – Manual procedure prescribed
  • Advance Rulings – Procedure prescribed for manual filing of application and appeal
  • Supply of artwork on approval basis through galleries – Invoice can be issued later
  • Accounts and records – Auctioneer and principal dealing with tea, coffee and rubber may maintain books of accounts at principal place of business instead of additional place

Ratio decidendi

  • Absence of Transit Declaration Form only a technical breach – Allahabad High Court
  • ITC availability in respect of hotel bookings – Delhi High Court directs Central Government to examine certain anomalies
  • ITC under European Union VAT – No requirement that economic activities of supplier are to be carried out at the address indicated on invoice issued by supplier – CJEU
  • Valuation – Discount deduction under EU VAT – CJEU

For GST Acts, GST Rules and Notifications (Central and States), Circulars, Press Releases and Notes, please use Knowledge tab in www.gst.lakshmisri.com.



Notifications, Public Notices and Circulars

  • FTP 2015-20 mid-term review unveiled – Incentives under MEIS and SEIS increased while new trust based self-ratification scheme for duty free import of raw material for export production introduced – Certain amendments also made in EPCG and EOU schemes
  • Exemptions - Norms for bank guarantee, cash security and surety relaxed
  • Basic Customs duties enhanced on many electrical/electronic goods
  • Mandatory e-sealing postponed till 1st of March 2018
  • Chickpeas or Masoor (Lentils) – BCD increased
  • Customs (Furnishing of Information) Rules, 2017 notified
  • Countervailing duty levied under Section 9 of Customs Tariff Act eligible for refund as drawback
  • Payment allowed in Indian Rupees at duty free shops
  • Customs valuation – Utilisation of Transfer Pricing information – WCO finalises case study 14.2

Ratio decidendi

  • Valuation based only on Chartered Engineer’s certificate, not correct – CESTAT Delhi
  • Valuation – Not practical to compare one brand with another – CESTAT Delhi
  • Refund available not only in a case where the Customs Duty is paid in pursuance of an assessment order, but also where the duty borne by assessee-importer – CESTAT Delhi


Central Excise & Service Tax

Ratio decidendi

  • Retention fee of hospitals not liable to Service tax under BSS – CESTAT Delhi
  • GTA service – Provision of vehicles to Army for transport of goods and personnel is in public interest – CESTAT Kolkata
  • Refund - Unjust enrichment when duty promised to be refunded – CESTAT Delhi
  • Convention service – When a person takes part in activity with reference to his expertise, skill, etc., he is no more a part of ‘general public’ – CESTAT Delhi
  • Valuation – Depot sale invoice subsequent to factory clearance, not relevant – CESTAT Delhi
  • Branded jewellery – Mere use of minute-sized two letters not to be called assessse’s ‘brand name’ – CESTAT Delhi
  • No liability under BAS for services rendered to Health authorities or State Government – CESTAT Delhi
  • Dummy packs distributed as advertising material not dutiable – CESTAT Allahabad
  • Cenvat credit not available on capital goods received directly at job worker’s premises – CESTAT Chennai
  • Air jet filters and super jet filters designed to be used solely or principally with machines of Heading 8437, classifiable under Heading 8437 – CESTAT Bangalore


Value Added Tax (VAT)

Ratio decidendi

  • Contract for supply and erection of equipment when not ‘works contract’ but only sale – Bombay High Court


December, 2017/Issue-78 December, 2017/Issue-78

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