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Tax Amicus: December 2018


Liaison office in India – The GST connection
By Nirali Akhani
A liaison office acts as a communication channel between the foreign company/investor and prospective buyers/ customers or prospective vendor in India without undertaking business in India as such. Reserve Bank of India regulates such establishments through FEMA regulations. One school of thought is that the liaison office and head office are not establishments of distinct person. As they are one and the same person, no GST liability arises on liaison office undertaking activities as permitted by FEMA regulations. However, they may become establishments of distinct person if activities beyond FEMA regulations are undertaken. In such a case, depending on the nature of activities undertaken by the liaison office for its head office, applicability of Notification No.15/2018-Integrated Tax (Rate) would require examination on case to case basis...

Denial of ITC for non-possession of e-way bill - An unfounded proposition
By Nirav S. Karia & Nivedita Agarwal
After a few months of implementation, it is seen that the e-way bill is being used as tool for harassment where goods are seized, vehicles impounded, and penalty imposed for minor procedural infractions in the e-way bill. The department has recently started denying ITC for non-possession of the physical copy of an e-way bill. The deeming provision has been created in the CGST Act by way of insertion of Explanation to Section 16(2)(b) whereby the receipt of goods by ship-to party will also be considered as receipt of goods by bill-to party hence making them eligible for credit. Further, provisions do not include an e-way bill as a document on the basis of which ITC can be availed...


Goods & Services Tax (GST)
Notifications and Circulars

  • GST Annual Returns to be filed by 31-3-2019
  • TDS – Form GSTR-7 for October to December 2018 can be filed by 31-1-2019

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

Ratio decidendi

  • No profiteering when MRP unchanged despite increase in post-GST tax rate - National Anti-Profiteering Authority
  • Profiteering when increase in base price from same date as rate reduction is more than ITC denied – National Anti-Profiteering Authority
  • Non-reduction of base price when CVD subsumed in IGST on imported goods, is profiteering - National Anti-Profiteering Authority
  • GST on transfer of right to use buses for passenger transportation - AAR Maharashtra
  • Transfer of ownership without physical imports – IGST not payable - AAR Maharashtra
  • Provision for subscription by a club when included under ‘Business’- AAR West Bengal
  • Separate contracts for supply of goods and transportation when a ‘composite supply’ - AAR West Bengal
  • Services from sweet shop cum restaurant is a ‘composite supply’- AAR Uttarakhand
  • Supplies when classifiable as mixed and not composite supply - AAR Rajasthan
  • Ancillary services linked to lease of industrial plots not exempt - AAR Chandigarh
  • GST payable on penal interest collected for tolerating delayed EMI - GST AAR Maharashtra
  • DFIA is not a duty credit scrip – GST payable - AAR Maharashtra
  • UK VAT - Sub-contractor’s supply – Unjust enrichment and fiscal neutrality - UK’s Upper Tribunal Tax
  • Department not to go against own directives unless public interest involved - UK’s Upper Tribunal Tax

Customs
Notifications and Circulars

  • Expeditious disposal of unclaimed cargo via auction – New procedure
  • SEZ – Time period for bringing back jewellery after processing, revised
  • EOUs - Customs and Central Excise notifications amended to align with FTP
  • EOUs - Customs and Central Excise notifications amended to align with FTP
  • SCOMET - Amendment to allow re-transfer/ re-export of SCOMET items on post reporting basis
  • Gold religious idols exported by DTA units eligible for Advance Authorisation for precious metals and Replenishment schemes
  • Gold religious idols - Wastage and value addition norms prescribed
  • Exemption to gold, silver and platinum imported as replenishment, restricted
  • Non-basmati rice made eligible for MEIS benefits

Ratio decidendi

  • DFIA exports – Specifications of imported inputs to be declared on Shipping Bill - Delhi High Court
  • Anti-dumping - Classification of parts of imported articles – Court of Justice of the European Union

Central Excise & Service Tax
Ratio decidendi

  • Electricity generated from bagasse and sold out – Cenvat Rule 6 not applicable – CESTAT Mumbai
  • Service Tax liability of courier agent in case of international courier - CESTAT Mumbai
  • Cenvat credit available on manpower supply for OHC at hazardous unit - CESTAT Mumbai
  • No Real Estate Agent service even if land sold is not owned - CESTAT Delhi
  • Area-based exemption – Commencement of production - Effect of absence of particular plant - CESTAT Delhi
  • Export of services – Person requesting and paying for service is recipient - CESTAT Delhi
  • Central Excise duty on matches – Liability under Notification No. 12/2012-CE - Madras High Court
  • Retrospective exemption when department failed to acknowledge merger before - CESTAT Mumbai

Value Added Tax (VAT)
Ratio decidendi

  • Contract for supply and erection of equipment when not ‘works contract’ but only sale – Bombay High Court
December, 2018/Issue-90 December, 2018/Issue-90