01 January 0001

Tax Amicus: November 2016


Input Tax Credit under GST regime – Make it seamless

It is said that in GST, the cascading effect of taxes would be removed with a continuous chain of set-off from the original producer’s or service provider’s point upto the retailer’s level. The credit of input tax(es) would be available to the registered taxable person in his electronic credit ledger maintained at the common GST portal. However, where the place of supply is within the State of the supplier but the recipient of supply is not located in the supplier’s State, availment of ITC would be an issue. Similarly, in a situation where the place of supply and supplier’s location are in two different States and the recipient is located in a third State, or where in case of imports the place of supply happens to be in a State other than the State in which recipient is located, ITC availment may pose some issues.

Goods & Services Tax (GST)

  • Migration of existing taxpayers to GST Regime – GST-N prescribes procedure and notifies schedule for provisional registration
  • GST rate slabs finalized – Four rates along with zero rate for foodgrains and highest rate of 28% with cess on ultra-luxury goods, proposed

Entry Tax (GST)

  • Constitution Bench of Supreme Court pronounces order on Entry Tax


Central Excise


  • Combined Annual Return Form for Central Excise and Service tax not required this year

Ratio decidendi

  • Cenvat credit on inputs destroyed during testing, admissible – CESTAT Mumbai
  • Cenvat credit available on supplementary invoices – Amendment in August 2000 is clarificatory – CESTAT Mumbai
  • Reversal of Cenvat credit on inputs lying in factory, in case of opting for exemption, when not required – CESTAT Allahabad
  • Adjustment of excess payment against short payment when permissible even in the of absence of provisional assessment – CESTAT Delhi
  • Sale without MRP to hospitals, co-operative societies and temples, is not retail sale – CESTAT Delhi
  • Classification – Primary test should be common parlance understanding – CESTAT Delhi
  • Couplings exempted as ‘pipes’ for delivery of water – CESTAT Delhi
  • EOU – Exemption to cement used in treatment of hazardous waste, available – CESTAT Delhi
  • Penalty for ineligible Cenvat credit when not imposable – CESTAT Ahmedabad



Notifications and Circulars

  • Authorised Economic Operators (AEOs) allowed to pay Customs duties on fortnightly basis
  • New All Industry Rates (AIR) of Drawback have been notified

Ratio decidendi

  • Confiscation of restricted goods under Customs Section 111(d) – CESTAT Hyderabad rejects idea of confiscation while Madras High Court holds that ‘restrictions’ also covered in definition of ‘prohibited goods’
  • Exemption to imports in CKD condition - Interpretative Rules for classification, not applicable – CESTAT Chennai
  • Import of parts at different ports not material for classification as complete machine-CESTAT Mumbai
  • Test report when not reliable – CESTAT Mumbai
  • Redemption fine may not be based on percentage basis in case of import of used goods – CESTAT Chennai
  • Project imports - Exemption available even when goods disposed after some use – CESTAT Mumbai


Service Tax

Notifications and Circulars

    Online information and database access or retrieval services received from abroad – Amendments with effect from 1-12-2016

Ratio decidendi

  • Cenvat credit on insurance of “Key man” is admissible – CESTAT Hyderabad
  • Premium for lease of immovable property taxable under Renting of Immovable Property service – Tripura High Court
  • Maintenance of information technology software not taxable before 2008 – CESTAT Mumbai
  • Commission received from RBI by a scheduled bank for collecting taxes is exempted – CESTAT Larger Bench
  • Refund of Cenvat credit when consideration not received in foreign exchange is admissible – CESTAT Mumbai
  • Seafood testing service covered under Technical Testing and Analysis Services – CESTAT Mumbai
  • Deduction/commission given to buyer is trade discount and not liable under BAS – CESTAT Mumbai
  • Demand – Extended period when not to be invoked – CESTAT Bangalore


Value Added Tax


  • Assam Entry Tax – Rate of tax on certain products increased
  • Jharkhand VAT – Rate of tax on certain products increased

Ratio decidendi

  • Surcharge payable on net Sales Tax after deduction of Entry Tax – Supreme Court
  • ITC available even when registration of seller cancelled retrospectively – Madras High Court


November, 2016/Issue-65 November, 2016/Issue-65

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