01 January 0001

Tax Amicus: July 2016


GST – Ensuring credit without artificial fetters

Model law on GST contains certain indicative provisions relating to credit or Input Tax Credit (ITC). Though one has to wait for the final version and finer details including draft ITC Rules, article in this issue of Amicus attempts to take a broad look at the emerging scenario on ITC. Scanning through the definitions of capital goods, inputs and input services in the model GST law and certain anomalies relating to these, the author expects the definitions and statutory provisions will be drafted to enable the tax payer to take and utilise ITC, without much restrictions, on all the supplies on which input tax has been paid when such supplies are received and used for business purpose of providing taxable output supplies. Considering the fact that heart of GST is the credit mechanism, it is hoped that when common ITC Rules are framed for both CGST and SGST, there would be less frugality and more generosity, with most goods getting covered under the fold of ITC....


Central Excise


  • Manual authentication of printed copies of digitally signed invoices, permissible
  • Tamarind kernel powder is classifiable under CET Tariff Item 1302 32 90

Ratio decidendi

  • Cenvat credit on capital goods – Second half of credit not deniable for want of proper documents when first half not denied – CESTAT Delhi
  • Cenvat credit on light fittings as capital goods available even when such fittings become part and parcel of civil structures – CESTAT Delhi
  • Refund – No unjust enrichment merely because excise duty booked as expenditure in Profit & Loss account – CESTAT Mumbai
  • Conversion of part of factory to EOU – Cenvat Rule 3(5) not applicable – CESTAT Delhi and Mumbai
  • Cenvat credit - Lack of vehicle number on invoice is not relevant – CESTAT Mumbai
  • Cenvat credit on invoices issued by non-registered input supplier is permissible – CESTAT Delhi
  • Refund of Cenvat credit – Requirement of quarterly claims, does not bar assessee from filing claim for period more than a quarter – CESTAT Mumbai
  • Remission of duty when department informed belatedly – CESTAT Delhi



Ratio decidendi

  • Refund – No requirement of filing Board Resolution and CA appointment letter – CESTAT Chennai
  • Demurrage not payable when goods withheld for testing at the instance of Customs – Madras High Court
  • Penalty not imposable under Customs Act for violation of provisions of other enactments – CESTAT Kolkata
  • Redemption of goods restricted for import is permissible – Punjab & Haryana HC
  • Refund – Unjust enrichment applicable in case of refund of encashed bank guarantee – Gujarat HC
  • Obligations imposed under exemption notification cannot be enforced after such notification is rescinded – Madras HC
  • Duty free goods transferred after exemption notification is rescinded, will not oblige the transferee to fulfill conditions of such notification – Kerala HC
  • Anchor rings & load spreading plates eligible for CVD exemption as parts of ‘Wind Operated Electricity Generator’ – CESTAT LB
  • LED panels without speakers, mother board, etc., cannot be considered as television – CESTAT Delhi


Service Tax

Ratio decidendi

  • Refund – Limitation for claim to run from adjudication order when tax paid on audit objection – CESTAT Mumbai
  • Interest on refund when cannot be claimed upto date of actual payment - CESTAT
  • Short payment of tax under VCES cannot be corrected when there is no legal error on part of the department – Delhi HC
  • Provision for mandatory pre-deposit applies to pending proceedings also – Madras HC
  • Post compliance with pre-deposit, appellant is entitled to decision on merits – Madhya Pradesh HC
  • Date of presentation of cheque under VCES, not realisation is date of deposit of service tax – Delhi HC
  • Refund application cannot be returned without processing – CESTAT Mumbai
  • VCES - Suo motu correction of erroneous calculation is not false declaration – CESTAT Mumbai
  • Transaction involving exchange can also be liable to service tax – Madras HC
  • BAS – Trade facilitation work after exports is not covered – CESTAT Allahabad
  • Cenvat credit - Membership of sports club not input service for service of chartered accountant – CESTAT Ahmedabad
  • Tax paid on services provided by sister concern – Credit cannot be denied citing lack of service element – CESTAT Hyderabad


Value Added Tax (VAT)


  • Jharkhand VAT Act – Provisions made for Advance Rulings
  • Rajasthan Entry Tax – Amendments made in respect of goods sold through electronic media

Ratio decidendi

  • Uniform price does not prove charging of tax from buyers – Supreme Court
  • Valuation - Sale of concrete mix gets completed at buyer’s place – Kerala HC
  • Tamil Nadu VAT – No Purchase Tax on goods sold to SEZ units – Madras HC
  • Credit of discounted sale price available in subsequent year – Gujarat HC


July, 2016/Issue-61 July, 2016/Issue-61

Browse articles