Will GST continue with distortions of existing tax structure? Article in this issue of Tax Amicus discusses various complications of the existing indirect tax structure and concludes that the transition into GST may not be as smooth for the industry as is generally made out in certain media presentations.
Central Excise portion of the Tax Amicus covers recent decision of the Supreme Court holding that exporters are entitled to both the rebates simultaneously, i.e. rebate on inputs as well as rebate on final products exported, under Rule 18 of the Central Excise Rules, 2002. In another case, the court is of the view that printing of logo on wrapping paper amounts to manufacture. Further, CESTAT Order in favour of assessee, concerning valuation in a case where face wash gel was supplied free with the shampoo and a single MRP was mentioned on the shampoo pack, has also been upheld by the Apex Court.
Under Customs, this issue covers CBEC Circular stating that Safeguard duty is rebatable as Drawback in terms of Section 75 of the Customs Act, 1962. Ratio decidendi portion of the Customs part includes Supreme Court Judgement holding that Customs duty is not payable on goods lost after unloading but before clearance. CESTAT Mumbai has held that CD containing designs and drawings is classifiable under Tariff Item 8523 80 20 of the Customs Tariff Act, 1975 and that Carnet value is not to be considered assessable value under Section 14 of the Customs Act, 1962.
Service Tax portion of this Amicus includes CBEC Circular clarifying that if ancillary services are provided in course of transportation of goods by road and the charges for such services (which may be provided by other persons) are included in the invoice issued by the GTA, then abatement of 70% will be available. CESTAT has held that if the access to services, facilities or advantages offered by the club or association is solely dependent on the entrance fee, then the liability to service tax may arise. CESTAT, Chennai has upheld the admissibility of Cenvat credit in respect of marine insurance availed in case of exports, from the factory gate till the goods reach abroad. These and other important orders have been discussed briefly in the Ratio decidendi portion under Service Tax column.
Value Added Tax (VAT) portion of this Amicus covers recent amendments in Haryana VAT Rules and Delhi VAT Act while Ratio decidendi includes decision of the Karnataka High Court answering in negative the question as to whether the activity of implementation of software/customized software involves a deemed sale as contemplated under Article 366(29A) of the Constitution of India.