01 January 0001

Tax Amicus: February 2017


Preparing for transition to GST

GST implementation is likely to be the biggest change in Indian tax history, and hence it becomes vital for every business to gear itself for smooth transition from the existing regime to GST regime. Article in this issue of Tax Amicus discusses certain areas of concern for the industry. It is stated that while updating of IT systems to make them GST compliant, and educating vendors on various clauses including provisions of anti-profiteering, would be of paramount importance, corporates also need to revisit their supply or procurement agreements/contracts, particularly in case of advances. Further, business restructuring decisions have to be taken where companies are operating out of warehouses in different States. Lastly, observing that companies should be careful in filing their last return in the current regime, and should make appropriate representations in case of any ambiguity, the author is of the view that for smooth transition to GST regime and to ensure proper implementation, every business should plan and prepare for GST from today.


Central Excise

Notifications and Circular

  • Time limits fixed for grant of permission for transfer of Cenvat credit and for remission – Cenvat Credit Rules, 2004 and Central Excise Rules, 2002 amended
  • EOU – Benefit of exemption notifications issued under Excise Section 5A available for procurement by EOUs

Ratio decidendi

  • Manufacture - Filling gases in cylinders from tanker and mixing of gases does not amount to manufacture – Supreme Court
  • Cenvat credit reversal of CVD not required on re-export of defective goods – CESTAT Delhi
  • Export of goods procured under CT-1, not in original packing, when not fatal – CESTAT Chandigarh
  • Denial of exemption based on unsubstantiated definition available on internet or any other sources not justified – CESTAT Delhi
  • Remission of duty – “Year” includes part of year – Allahabad High Court
  • Refund – Re-credit of duty earlier paid through Cenvat account – Letter to department for re-credit can be considered as refund claim – CESTAT Mumbai
  • Climbers and thrillers used by children in playgrounds classifiable as sports goods – CESTAT Mumbai
  • Kulfi classifiable as milk product and not as ice cream – CESTAT Mumbai
  • Duty when not payable on capital goods cleared after long use – CESTAT Delhi



Finance Bill and Circular

  • Time limit for filing bill of entry and duty payment proposed to be revised – Section 46 and 47 of Customs Act, 1962 proposed to be amended
  • Seizure - Appropriate orders to be passed for seizure under Customs Section 110

Ratio decidendi

  • Valuation - Enhancement of value based on market enquiry when not justifiable – CESTAT Delhi
  • Confiscation – No mis-declaration when two views equally possible in classification – CESTAT Delhi
  • Bringing a rig into India for repairs is not import for home consumption – Supreme Court
  • Refund of SAD to EOU on DTA clearances, permissible – CESTAT Mumbai
  • External Hard Disk Drives classifiable under TI 8471 70 20 – CESTAT Delhi
  • Inland Air Travel Tax (IATT) – Monies deposited by third parties not to be adjusted against tax dues – Delhi High Court
  • Omnical Calcium Nitrate Solution Grade Fertilizer classifiable under TI 2834 29 90 – CESTAT Chennai


Service Tax

Finance Bill

  • Works Contract service - Service Tax Valuation Rules proposed to be amended retrospectively
  • Research and Development Cess Act, 1986 proposed to be repealed

Ratio decidendi

  • BAS – No liability on expenses incurred for joint operation of centre – CESTAT Delhi
  • BSS – Supply of water to State Industrial Development Corporation, not covered – CESTAT Delhi
  • Construction of commercial portion of ISBT not liable to Service tax – CESTAT Delhi
  • Deploying police personnel on payment basis, statutory – Not liable to tax – CESTAT Delhi
  • Refund – Locus standi to file refund claim and limitation in case of provisional prices – CESTAT Delhi
  • Legal Consultancy services – Scope encompasses advisory services – CESTAT Delhi
  • Cenvat credit on input service – Effect when goods capitalised including service portion and depreciation claimed – CESTAT Mumbai
  • Refund – Payment can be made under protest in number of ways – Punjab & Haryana High Court


Value Added Tax (VAT)


  • Rajasthan VAT - Declaration under Rule 53 not required to be carried along with goods brought directly into State from outside the country
  • Himachal Pradesh Entry Tax and VAT – Amendments made for e-commerce transactions

Ratio decidendi

  • No declaration required under Section 51(2) of Punjab VAT Act for goods brought by railway train – Punjab & Haryana High Court
  • Works Contracts - Revision of assessment invoking extended period – Punjab & Haryana High Court
  • Interest payable on delayed refund of pre-deposit under Gujarat Sales Tax – Gujarat High Court


February, 2017/Issue-68 February, 2017/Issue-68

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