01 January 0001

Tax Amicus: September 2016


GST – A look at draft rules on registration and invoices

India is on the expressway in implementing the biggest reform ever in its indirect tax system and the tax administration on its part is releasing draft rules and forms almost daily. This article seeks to take a cursory look at the draft rules on registration and invoices and the forms or formats floated by the CBEC for comments just a few days before. Automation of processes is the keyword and the forms in this regard mandate the aspiring registrant to get PAN verified automatically by connecting to Income Tax Portal and mobile number and e-mail ID through OTP. Though registration of casual taxable person and 26 different forms for registration make one think whether GST is all that simple, it is heartening to see that draft rules provide for time limits for each action of the department/assessee. Strict side of GST law can be seen from the provisions on suo motu registration and field visits by officers. Further, in respect of invoices, the draft rules mandate mention of place of supply along with State name in the case of inter-State supplies and place of delivery if the same is different from place of supply. However requirement of transporter’s copy has been dispensed with if the invoice reference number is obtained by the taxable person.


Central Excise


  • Customs portion of drawback available even when benefit of Rule 18 or Rule 19(2) taken on inputs, excsept on diesel
  • EOU – Exemption available to inputs used in final goods cleared in DTA to holder of Advance Authorisation

Ratio decidendi

  • Cenvat credit of amount settled before Settlement Commission is not barred – CESTAT Mumbai
  • Cenvat credit on turbo generator not deniable even if part of electricity sold out – CESTAT Delhi
  • Fitting of motor in sewing machines does not amount to ‘manufacture’ – CESTAT Delhi
  • Labelling and packing of handmade biris do not amount to manufacture – Calcutta High Court
  • Captive consumption – Exemption available to moulds sold but still used within factory – CESTAT Delhi
  • Returned goods – No time limit for clearance of goods after receipt – CESTAT Delhi
  • End use exemption – Use to be decided at the time of clearance from factory – CESTAT Delhi
  • Residual Crude Petroleum Oil/ Residual Fuel Oil/ Residual Bottom Oil not classifiable as fuel oil – CESTAT Delhi
  • Oil Cess not having the character of excise duty, hence refund provisions under Section 11B of the Central Excise Act, 1944 will not apply – Gujarat High Court
  • WTLB and Hydra Cranes whether qualify as automobiles – CESTAT Chandigarh refers issue to Larger Bench
  • Pictures, graphics and images printed for use on bill boards and hoardings classifiable as product of printing industry – CESTAT Bangalore



Circulars and Trade Notices

  • Dual benefit of EPCG and SHIS under FTP – Option provided for return of one benefit
  • EPCG authorisation can be issued to job workers doing knitting, dyeing, printing, labelling for manufacturer-exporter of garments
  • TED refund is available only when no ab-initio exemption is provided

Ratio decidendi

  • Valuation - License fee for right to use brand name and sales & business support fee are not includible – Authority for Advance Rulings
  • Valuation – Sample to be treated as design and drawings for manufacture of imported goods – CESTAT Mumbai
  • Refund – Non-challenge of Bill of Entry not relevant in the absence of ‘lis’ between department and assessee – CESTAT Delhi
  • Interest payable even when less duty paid due to non-updation of EDI system – CESTAT Kolkata
  • Re-exports – Drawback of Customs duty paid subsequently on goods initially imported under Advance Authorisation is correct – CESTAT Allahabad
  • Redemption fine not imposable if no bond/bank guarantee given at the time of clearance – CESTAT Kolkata
  • Settlement application once allowed to be proceeded cannot be rejected on grounds accepted earlier – Bombay High Court
  • Detention of goods is not seizure - Non-recording of reasons for detention is fatal – Delhi High Court


Service Tax


  • One time upfront premium on lease of industrial plot exempted from Service tax

Ratio decidendi

  • Composite contract for supply of goods and services – Delhi High Court emphasises segregation of elements and adherence to legislative competence as per Constitution
  • Taxes cannot be deducted by government agency when no tax is due – P&H High Court
  • Service tax collected when not due and not deposited cannot be recovered from a person who is not a garnishee – Gujarat High Court
  • Recovery amounts under dispute - Coercive methods not to be adopted when adjudication is an option – Bombay High Court
  • Amounts paid directly to other service providers not taxable under reverse charge as amount paid to foreigners – CESTAT Mumbai
  • Cenvat credit available in subsequent period can be used to pay tax demanded for an earlier period – CESTAT Mumbai
  • Share subscription fee received towards provision of services to members of club is taxable – Authority for Advance Rulings


Value Added Tax


  • Himachal Pradesh Tax on Entry of Goods into Local Area – Provisions made for tax on e-commerce
  • Assam VAT – Tax rate increased
  • Bihar VAT – Tax rate increased

Ratio decidendi

  • Turnover tax – Value of work entrusted to sub-contractor is not includible – Supreme Court
  • Transfer of right to use - Transfer of technology through hybrid seeds to seed companies exigible to tax under MVAT Act – Bombay High Court


September, 2016/Issue-63 September, 2016/Issue-63

Browse articles