01 January 0001

Tax Amicus: November 2017

by Nirali Akhani


Refund of accumulated input tax credit – Certain unresolved issues

Section 54(3) of the Central Goods and Services Tax Act, 2017 (‘the CGST Act’), provides for refund of any unutilised input tax credit (ITC) in two scenarios. Considering the provisions as prescribed in the CGST Act and the Rules thereunder, it seems that refund of inverted rated structure of only input goods and not of input services is allowed as per law. According to the author of the article in this issue of Tax Amicus, question also arises as to how the term “inputs” used in Section 54(3) should be construed as several goods may be used in supplying final product/output…


Goods and Services Tax (GST)

Notifications and Circulars

  • Rate of GST reduced on large number of goods and services - List of 28% GST rated goods pruned substantially, and stand-alone restaurants now liable to 5% GST, without facility of ITC
  • Exemption to tax payment at time of receipt of advance by all registered suppliers, except those working under Composition Levy
  • GST Returns – Last dates for number of returns postponed while GSTR-3B made mandatory till March 2018
  • Registration exemption to specified service provider providing service through electronic commerce operator
  • Reduced rate of GST for specified supplies to research institutions, etc.
  • Inter-State movement of rigs, tools and spares between distinct persons is neither supply of goods nor supply of services
  • EOUs – Procedure for procurement from DTA prescribed
  • Refund of unutilised ITC in case of export of fabrics, available
  • Terracotta idols eligible for nil GST rate
  • Milling of paddy into rice liable to GST



Notifications & Circulars

  • IGST payable on goods transferred or sold while being in bonded warehouse
  • Drawback – CBEC rescinds Circulars prescribing monetary limits for drawing of samples
  • Electronic sealing of export containers postponed
  • Refund of IGST on exports – CBEC identifies certain issues and prescribes solutions
  • Lease imports – Goods, vessels, ships (other than motor vehicles) imported under lease, for use after import exempted from IGST
  • Readymade garments and made-ups – MEIS rates enhanced while post-GST rates notified for Rebate of State Levies
  • Dumpers for coal mines eligible for Project Import benefit
  • Pulses, including organic pulses – Export prohibition removed

Ratio decidendi

  • Drawback in case of inter-unit transfer of raw material between SEZ units – No violation of Rule 22(2) or Rule 34 of the Special Economic Zone Rules, 2006 – Calcutta High Court
  • Valuation – Different prices when description of goods same, when permissible – CESTAT Chennai



Central Excise & Service Tax


  • Budgetary support (Refund) for units earlier availing area-based exemption – CBEC prescribes procedure for manual filing and processing of refund claims

Ratio decidendi

  • Refund of Education Cess available to units working under area based exemption – Supreme Court
  • Area based exemption – Computation of value addition – CESTAT Chandigarh rejects department’s contention that refund cannot be considered as part of value addition
  • Cenvat Rule 6 – Sale of items recovered during ship breaking is not trading – CESTAT Mumbai
  • Cenvat credit on security service for transit of goods when not admissible – CESTAT Mumbai
  • Cenvat Rule 6 and Central Excise Rule 57CC are significantly different – CESTAT Mumbai
  • Cenvat Credit of tax paid on rent of dealer’s premises when available – CESTAT Bangalore
  • Export of service – SMS aggregator service to foreign company within India is exports – CESTAT Mumbai
  • “Cheeselings” and “Musst Bites” are edible preparations eligible for exemption as “Namkeen” – CESTAT Mumbai


Value Added Tax (VAT)

Ratio decidendi

  • Rectification in Returns – Kerala High Court allows rectification observing that tax authorities should be more accommodative to reasonable requests for regularising technical omissions with a view to ensuring tax compliance


November, 2017/Issue-77 November, 2017/Issue-77

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