01 January 0001

Tax Amicus: May 2018

Advance Rulings under GST – Certain questions of law

GST made its entry in July, 2017. To facilitate trade on issues relating to liability or credit or classification or valuation, mechanism of advance rulings has been provided in CGST Act and SGST Act. After initial hiccups it appears that the system is stabilising as evidenced by the rulings issued by Authority for Advance Rulings in various States. The article discusses at length, few rulings wherein the AAR has (i) held that Advance Ruling is not available on product not in existence, (ii) declined to issue a ruling on classification as information of constituent materials of the product was not provided by the applicant, and (iii) declined to answer a question raised by the main contractor in respect of supplies by its sub-contractor. Are such conclusions in line with the statutory provisions? The author answers the same in this article. He is of the view that the institution of AAR is a federal experiment at the bureaucratic level with both Central and State GST officials sharing the responsibility, and therefore, one should wait for the law, institutions and processes to evolve and mature...


Goods & Services Tax (GST)

Notifications and Circulars

  • Late fee waived for not furnishing GSTR-3B in specified situation
  • GST leviable on transfer of tenancy rights
  • Inspection, confiscation and release of goods – Procedure specified
  • Recovery of arrears of Excise, Service Tax and Cenvat credit – Procedure specified
  • E-way Bill in case of Bill-to Ship-to condition clarified
  • GST refund to UIN agencies clarified
  • GST Council grants in-principle approval of new return design
  • Rate concession in digital payments, and sugar cess – GST Council refers issues to Group of Ministers

Ratio decidendi

  • Seizure of goods on inter-State movement where Part-B not filled, when unjust – Allahabad High Court
  • GST payable on one-time lease premium when specific exemption absent – Bombay High Court
  • State government whether can issue notification for inter-State e-way bill? – Allahabad High Court refers issue to Larger Bench
  • CGST does not authorise issuance of second SCN for same demand and period – Gujarat High Court
  • Liquidated damages liable to GST @ 18% - Manner of payment immaterial – AAR Maharashtra
  • Supply to international outbound passengers, when not exports – AAR Delhi
  • Road reinstatement charges paid to municipality liable to GST – AAR Maharashtra
  • Package containing name of company to be considered as bearing brand name – AAR Maharashtra
  • Sale of used vehicle as scrap liable to GST – AAR Maharashtra observes that buying new assets and discarding old and unusable ones is an activity in the course of business
  • Coaching service provided by private institution is liable to GST – AAR Maharashtra
  • Cenvat credit of Krishi Kalyan Cess carried from earlier regime is not admissible Input Tax Credit – AAR Maharashtra
  • Construction of complex – Valuation and rate of GST – AAR Delhi
  • Dried tobacco leaves undergoing curing liable to GST @ 28% - AAR Delhi
  • Books primarily used for writing classifiable as ‘Exercise Books’ – AAR Delhi
  • Maintenance of railway track taxable @ 18% - AAR West Bengal
  • Floor mats impregnated and coated with PVC classifiable under Chapter 39 – AAR Maharashtra
  • UK VAT – Input tax credit and link with economic activities - England and Wales Court of Appeal (Civil Division)
  • EU VAT - Refund due to correction in returns after tax inspection – CJEU
  • EU VAT - Limitation to deduct VAT to be liberal when assessee acting in good faith – CJEU



Notifications, Public Notices and Circulars

  • Automotive mining and oil rigging equipments – Import policy condition
  • Import restrictions on pulses expanded while issue raised at WTO
  • No import restriction prior to 20-5-2015 on remnant fuel in ship brought for breaking
  • Advance authorisation provisions in Chapter 4 of FTP HoP Vol.1 revised
  • Drug exports – Implementation of Track and Trace System extended till 16-11-2018

Ratio decidendi

  • Projectors for computer, digital camera and other devices classifiable under TI 8528 61 00 – CESTAT Bangalore
  • SAD refund – No condition that subsequent sale has to be in same form – Supreme Court
  • End-use of imported goods when valid for classification – CESTAT Mumbai
  • Valuation of films imported for distribution – Inclusion of licence fee – CESTAT Mumbai
  • Bona fide purchaser can opt to pay redemption fine and duty – Kerala High Court


Central Excise and Service Tax

Ratio decidendi

  • Valuation – Inclusions that enrich value of article, permissible - No difference in ‘transaction value’ and ‘normal value’ – Constitution Bench of Supreme Court
  • Exemption to SEZ – Notification No. 9/2009-S.T. cannot prescribe conditions – CESTAT Delhi
  • Depot sales – Applicability of valuation Rule 7 when additions made at depot – CESTAT Mumbai
  • Cenvat credit on advertisement of brand of liquor, not available – CESTAT New Delhi
  • Surrender charges for discontinuance of ULIP policy are not taxable – CESTAT Mumbai
  • Coconut oil in small containers – Classification issue referred to Larger Bench of Supreme Court – Supreme Court
  • Sharing of fee cannot be interpreted as rendering of services – CESTAT Mumbai
  • Cenvat credit on construction of hotel rooms – CESTAT Mumbai
  • Abbreviation of name of jeweller whether trademark – Issue referred to Larger Bench of CESTAT – CESTAT Bangalore
  • Inputs removed as such to own unit – Excise Valuation Rule 8 not applicable – CESTAT Mumbai



Value Added Tax (VAT)

Ratio decidendi

  • Works contract or sale and service contract – Nature of contract is relevant – Karnataka High Court
  • Rajasthan VAT – “Ujala Supreme” is an industrial input – Supreme Court
  • Erection & Commissioning - Coverage under Service Tax and not Sales Tax - West Bengal Commercial Tax Appellate & Revisional Board


May, 2017/Issue-83 May, 2018/Issue-83

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