01 January 0001

Tax Amicus: October 2016


GST – A look at certain grey areas in transition provisions

Date of implementation of Goods & Services Tax (GST) is now certain, however, there are several grey areas in transition provisions as contained in the Model Law. The article in this issue of Tax Amicus takes a look at certain issues which need immediate attention and should be addressed to make transition to GST regime hassle-free for the businesses. Considering questions relating to carry forward of eligible credit; tax paid before but supplies received later (after introduction of GST); credit taken earlier but goods exempted under GST regime; non-distribution of credit before appointed day; and case where supplies are made before but invoice is issued under GST regime, the author hopes that since the law is in the making, these issues would be addressed soon to ensure that the benefits available under the existing laws are effectively available to the taxpayers in the GST regime.

Goods & Services Tax (GST)

  • Assam and Gujarat issue instructions for allotment of GSTIN / provisional registration


Central Excise

Ratio decidendi

  • Cenvat credit of HSD used as fuel, is available to EOU – CESTAT Bangalore
  • Valuation – Deduction of quantity discount based on turnover, permissible in case of non-performing dealers also – CESTAT Mumbai
  • Manufacture - De-coiling, straightening and cutting TMT coil into TMT bars/rods – Jharkhand High Court
  • Classification does not change when item imported in bulk put in capsules for retail sale – CESTAT Bangalore
  • Penalty - Clandestine removal not proved just on the basis of shortages and payment of duty on such shortages – CESTAT Delhi and Allahabad
  • Penalty under Excise Section 35A cannot be imposed in the guise of enhancement – CESTAT Hyderabad
  • SEZ clearances – Non-execution of LUT while clearing goods to SEZ is procedural lapse – CESTAT Hyderabad
  • Waste of band-aid generated after quality inspection, not liable to duty – CESTAT Mumbai observes that there is no tariff heading for classifying scrap arising during manufacture of goods of Chapter 30
  • Interest for delayed refund – Relevant date is date of original filing and not filing of revised claim – Bombay High Court




  • ATA Carnet – FICCI and importer now jointly and severally liable to pay customs duties
  • Export of gold/platinum/ silver jewellery under Notification No. 57/2000-Cus. - Time period for export reduced
  • Re-import of goods exported under drawback, rebate or bond to Bhutan – Time period for re-imports to be 7 years

Ratio decidendi

  • Post-export DFIA benefit available even when supporting manufacturer availed Cenvat credit – Calcutta High Court
  • Export incentive schemes have nothing to do with offset of duty element – Gujarat High Court
  • Valuation – Enhancement of value merely based on NIDB data, not correct – CESTAT Bangalore
  • Interest on delayed payment of duty when goods cleared after payment of assessed duty and differential duty letter is issued only later – CESTAT Bangalore
  • Imports under FTA – No discretion or power with Customs authorities to reject certificate of origin – CESTAT Kolkata
  • EOU – No requirement of any valid reason for inter-unit transfer of goods – CESTAT Mumbai
  • Recovery of drawback of customs portion when export proceeds not realized – Supreme Court holds that Drawback Rule 16A is a clarificatory provision
  • Containers containing goods entitled to be released when goods alone confiscated absolutely – Madras High Court
  • Customs duty not recoverable when option of payment of fine not opted – Kerala High Court
  • Service of Order by speed post is valid service – Andhra Pradesh High Court


Service Tax

Ratio decidendi

  • Business Auxiliary services – Treatment of industrial waste is not processing of goods – CESTAT Mumbai
  • Financial advisory services covered under Banking and other Financial Services and not Management Consultancy Service – CESTAT Mumbai
  • Outdoor catering service – Provision of other consideration by service receivers free of cost, when not impacts valuation – Madhya Pradesh High Court
  • Refund under Notification No. 41/2007-ST – Service recipient need not show proof of payment of tax by service provider – CESTAT Delhi and Bangalore
  • Works Contract service used for maintenance of office equipment and building is an input service – CESTAT Mumbai
  • Sinking of shaft not covered under Site Formation and Clearance service – CESTAT Mumbai
  • Leasing of machines by manufacturer for certain time, not covered under Banking and other Financial services – CESTAT Delhi


Value Added Tax


  • Maharashtra VAT – Rate of tax on certain commodities increased
  • Uttarakhand VAT – Rates revised for specified goods
  • Haryana Alternate Tax Compliance Scheme for Contractors, 2016, notified

Ratio decidendi

  • Personal use purchases through e-commerce portals not liable to Entry Tax – Patna High Court
  • Additional tax on amount of lump sum tax paid on works contract, not correct – Punjab & Haryana High Court


October, 2016/Issue-64 October, 2016/Issue-64

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