01 January 0001

Tax Amicus: March 2018

by Nipun Arora

Intra-State supplies v. Inter-State supplies under GST law

It is important to decide whether supplies are to be treated as intra-State supplies or inter-State supplies for payment of correct type of tax. The relevant provisions for determining inter-State and intra-State supplies are governed by Section 7 and Section 8 of IGST Act. Considering Section 7(5) of the IGST Act it can be concluded that supplies made to a person outside India shall be treated as inter-State supplies. But, the same appears to be conflicting, for the reason that supplies are made to a recipient outside India and not in a taxable territory and therefore different views may be possible leading to litigation in the near future. Use of the words ‘Supply….in the taxable territory’ seems to point to major elements of supply being present in the taxable territory and when the location of recipient is not in India, it is possible to argue that sub-section (5) of Section 7 will not come into play at all. The issues need to be appropriately represented before the authorities for clarification or amendment...


Goods and Services Tax (GST)

Notifications, Circulars and Press Releases

  • GST refund to exporters - CBEC issues elaborate clarification on number of issues
  • GST exemptions for exporters to be extended till 30-9-2018
  • Existing system of Returns filing to be extended for three more months
  • E-way bills set to be implemented from 1-4-2018 for inter-State transportation
  • GST TRAN-2 can be submitted by 31st of March 2018
  • Joint Ventures – GST liability on service provided by members to JV and vice versa and between members
  • Disputed/blocked credit - Undertaking required if credit is more than Rs. 10 lakh
  • Priority Sector Lending Certificates are taxable at 18% GST
  • Refund to entities having UIN clarified
  • Bus body building and tyre re-treading are composite supplies
  • Hostel accommodation provided by Trust is not charitable activity
  • No GST on fee, penalty paid in Consumer Disputes Redressal Commissions
  • Healthcare service – GST liability clarified
  • Legal Metrology – Provision for placing stickers on old stock extended

Ratio decidendi

  • EU VAT – Public task by non-profit company owned by Municipality, liable – CJEU
  • Supply of UPS along with battery for a single price is “mixed supply” – AAR, West Bengal
  • EU VAT - Intra-EU transport in two successive supplies applies to second supply – CJEU
  • UK VAT - Powder to flavour milk is taxable at standard rate of VAT - UK Upper Tribunal observes that product is ‘for’ preparation of beverage



Notifications and Circulars

  • Refund to exporters - Procedure in case of invoice mis-match prescribed
  • IBCD increased on certain metal items for mobile phone, and specific screws
  • Certificate of Origin for specified imports from Japan – Time limit revised
  • MEIS claims – Matching of Shipping Bill description when not required

Ratio decidendi

  • No provision for two proper officers for assessing imported goods - CESTAT Delhi
  • DTA sale by EOU - ‘Suitable for repeated use’ clarified – CESTAT Chennai
  • TED Refund – Amendment in 2013 not retrospective – Delhi High Court
  • Interest payable on delayed refund of SAD – Delhi High Court strikes down Paragraph 4.3 of Circular No. 6/2008-Cus.


Central Excise and Service Tax

Ratio decidendi

  • Reimbursable expenses not includible for Service Tax, prior to 14-5-2015 – Supreme Court
  • Cost of goods supplied free by recipient for use in provision of service, not includible – Supreme Court
  • Affixing particulars of buyer when not amounts to putting ‘brand name’ – Supreme Court
  • Valuation when goods sold at less than manufacturing cost and profit – CESTAT Delhi remands matter for consideration of various disruptions and fluctuations affecting manufacturing cost
  • Cenvat credit on service used for organising Vishwkarma Pooja, available – CESTAT Chandigarh
  • Mandatory pre-deposit can be deposited from Cenvat credit a/c – CESTAT Kolkata
  • Motor vehicles when classifiable as tippers and not dumpers – CESTAT Delhi
  • Donations without condition to do service, not liable to Service Tax – CESTAT Chennai
  • Choosing flowers for processing is activity in relation to ‘agriculture’ – CESTAT Chennai
  • GTA - Transportation of cut wood not covered under ‘agricultural produce’ – CESTAT Delhi
  • Envelope not classifiable as general packing container – CESTAT Delhi
  • Refund of Cenvat credit on export of services – CESTAT Larger Bench clarifies ‘Relevant date’
  • Renting out lake for boat rides and skating ring for skating not liable to Service Tax – CESTAT Delhi
  • Refund under Notification No. 17/2009-ST when invoice not in assessee’s name – CESTAT Delhi
  • Cenvat credit on hiring of machines for levelling of land for mining of ore for use in manufacture – CESTAT Delhi
  • Non-declaration of records to department when not material – CESTAT Mumbai


Value Added Tax (VAT)

Ratio decidendi

  • KVAT - No uniform rate mandated for goods in works contract, before 1-4-2006 – Supreme Court
  • Rajasthan Sales Tax - Refund on reduction of provisional price – Supreme Court


March, 2017/Issue-81 March, 2018/Issue-81

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