01 January 0001

Tax Amicus: March 2017


Invoicing under GST

India’s decade long wait for a national tax on supply of goods and services that will create one of the world’s biggest single market could be almost over by July 1. The first article in this issue of Tax Amicus discusses different kinds of documents which are required to be issued in different circumstances viz., tax invoice, supplementary invoice, vouchers, credit notes, debit notes and bill of supply. Elaborating on when invoice has to be issued in case of supply of goods and services, and some crucial details which are required to be mentioned in the invoice, the article highlights various points that the industry needs to take care of while issuing debit/credit notes, bill of supply, receipt voucher, supplementary invoice, and invoices under reverse charge. It is stated that business needs to prepare themselves and discuss with their vendors and customers for proper compliance of GST law and avoid any loss of credit.


GST - Credit entitlement on free samples?

The second article in this issue seeks to highlight some of the significant issues pertaining to the ‘act of giving free samples’ under GST, as set out in the Revised Model GST Law and the draft Rules. Elaborating on the intention of the provisions of the draft law, and the need of a business to give free samples, the author is of the view that the provisions appear to defeat the very purpose of introducing GST. According to the author, reversing the credit on account of free samples might not be the intention of law, however such language used in law gives rise to doubts, and hence is a potential area where a representation can be made to the appropriate authority.


Goods and Services Tax (GST)

  • GST Enrolment / Migration – States / CBEC issue instructions


Central Excise


  • Captive consumption – CAS-4 certificates to be issued by 31st of December
  • Paper articles and goods of printing industry – Classification of various products clarified
  • Saree even if further processed, classifiable under Chapters 50, 52 or 54

Ratio decidendi

  • Cenvat credit admissible on steel items used for constructing blast furnace and coke oven plant for use in factory – CESTAT Bangalore
  • Valuation – Amortisation of tools developed for production on job work basis, not required – CESTAT Mumbai
  • Valuation - Transaction value not influenced by relationship if procurement price decided by open tender – CESTAT Bangalore
  • Manufacture - Conversion of paddy to rice does not amount to ‘manufacture’ – CESTAT Chandigarh
  • Manufacture - Repacking of goods after marking for easy identification covered under ‘manufacture’ – CESTAT Delhi
  • Manufacture – Affixing pre-cut glasses to frames is not ‘manufacture’ – CESTAT Delhi
  • Interest not payable on Cenvat credit availed on inputs used in finished goods on which remission claimed – CESTAT Ahmedabad
  • Use of machine for a small process would not disqualify product from being a ‘handicraft’ – CESTAT Mumbai
  • Refund of Cenvat credit to EOU when credit initially used in payment of duty on exports and rebate claimed – CESTAT Delhi


Service Tax


  • Exemption to specified services provided to educational institutions restricted to specified institutions
  • Admission to a museum – Exemption from 1-7-2012 to 31-3-2015
  • Effluent treatment – Service by operators of common effluent treatment plant – Exemption from 1-7-2012 to 31-3-2015

Ratio decidendi

  • Cenvat credit for setting-up second unit – Utilization by existing unit only a procedural error – CESTAT Hyderabad
  • Cenvat credit on Outdoor Catering service when token amount taken from employees – CESTAT Mumbai
  • Franchise service - Whether right conferred is a representational right, to be established – Delhi High Court
  • Import of services – No liability on Indian holding company of the foreign service provider – CESTAT Bangalore
  • Rent-a-cab service – Exemption for transportation of school children available even if charges collected directly from parents – CESTAT Allahabad
  • Activity of spot billing of electricity for electricity distribution company, covered under BAS – CESTAT Mumbai
  • BAS – Receipt of 1% of FOB value for transfer of export benefits, not covered – CESTAT Mumbai
  • Providing top of the bus on hire on fixed charges, not covered under Courier Service – CESTAT Delhi
  • Cenvat credit admissible when sale of product promoted and not mere sale involved – CESTAT Delhi




  • e-BRC acceptable as proof of realization of sale proceeds for specified period
  • Selfie Sticks are classifiable under Customs Tariff Item 9620 00 00
  • Prosecution - Guidelines for launching of prosecution clarified

Ratio decidendi

  • Merely re-assessed Bill of Entry, in absence of a speaking order, not appealable under Customs Section 128 – Kerala High Court
  • Prohibited goods - Violation of Section 18 of Legal Metrology Act, 2009 gives imported goods colour of prohibited goods – CESTAT Chennai
  • Subsequent change in legal position is not ‘change in circumstances’ for modification of Order – Karnataka High Court
  • Project Imports - Benefit of Notification No. 6/2002-CE (Sl. No. 237) not available to Turbines – CESTAT Chennai
  • Voice Tab is classifiable as telephone and not as automatic data processing machine – CESTAT Delhi
  • Valuation – Absence of manufacturer’s invoice and comparability of contemporaneous imports – CESTAT Delhi
  • Exports – Market enquiry when cannot be relied to reject export value – CESTAT Mumbai


Value Added Tax (VAT)


  • Jammu & Kashmir – Notifications issued to provide for amnesty scheme under J&K VAT, and for charging tax on specified services

Ratio decidendi

  • Goods used for the purposes of cleaning are goods integral to the execution of the service contract – Delhi High Court
  • Toffee or sugar candy – Classification – Rajasthan High Court


March, 2017/Issue-69 March, 2017/Issue-69

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