01 January 0001

Tax Amicus: September 2019


The Social Welfare Surcharge conundrum
by Nivedha Mohan

While the dispute on levy of piggy-back cesses such as education cesses, where duty payments were made by debit to the duty credit scrips such as DEPB scrips, is yet to settle down, the controversy has come back with a renewed vigor under the present MEIS duty credit regime and the Social Welfare Surcharge (SWS) levy. The question remains as to whether SWS can be considered/said to be exempt in consequence to exemption from BCD provided under the MEIS Notification and as to whether the mode of exemption, viz. debit of duty in the scrips amounts to ‘payment of duty’ and not an exemption from duty? The author also points out that the question as to whether the principles laid down by the courts under the DEPB scheme can be applied in the context of SWS, is yet to be decided. Deliberating upon various arguments for and against collection of SWS, the author states that the final word on this issue has not been said yet, and the question is still open for debate.

Goods & Services Tax (GST)

Notifications and Circulars

  • 37th Meeting of the GST Council - GST rates set to be revised on various goods and services from 1-10-2019
  • 37th Meeting of the GST Council – Changes proposed in law and procedures
  • Job work – Finance Ministry waives GST Form ITC-04 for July 2017-March 2019
  • Disbursement of refund of State tax by Central Government
  • UK delays domestic reverse charge VAT for construction services

Ratio decidendi

  • Transitional credit – Due date under Rule 117 of CGST Rules is procedural and not mandatory – Gujarat High Court
  • Power to attach assets is a drastic step and is to be used sparingly – Gujarat High Court
  • Seizure of documents – No justification required to get back copies – Bombay High Court
  • Interest/late fee/penalty when to be taxed as per principal supply – Madhya Pradesh AAR
  • Interest/late fee/penalty is amount for tolerating an act – Liable to GST – Tamil Nadu AAR
  • GST leviable on transportation in own vehicle with e-way bill – Rajasthan AAR
  • Monetary value of providing refundable interest free deposit liable to GST – Gujarat AAR
  • Lease agreement for 99 years is not sale of immovable property – GST leviable – Rajasthan AAR
  • GST implication on lump-sum amount received before 1-7-2017 – West Bengal AAR
  • Input Tax Credit not available on medicines provided to employees and pensioners – Tamil Nadu AAR


Notifications and Circulars

  • Bank guarantee under AA/DFIA/EPCG Schemes - Norms revised
  • Drawback when permissible on FOB value without deducting foreign bank charges
  • Steel Import Monitoring System to be effective from 1-11-2019
  • Packing of Bottled in Origin beverages permissible under Customs Section 64(b)
  • Mechanism for claiming additional MEIS
  • Advance Authorisation – Exclusion of certain imports from compliance of FTP Para 4.12(iv)
  • Motor vehicles - New policy condition inserted under Chapter 87 of ITC (HS)
  • Agarbatti import restricted

Ratio decidendi

  • Refund claim not maintainable unless self-assessment order is modified though appeal – Supreme Court Larger Bench
  • Appeal against CESTAT Order on violation of exemption condition lies before High Court – Supreme Court Larger Bench
  • Valuation – Substantial mark-up in supply of imported goods to customers when not indicates undervaluation of imports – CESTAT Mumbai
  • Customs duty increase – Effect of notification issued late after BE filed on same day – Punjab & Haryana High Court
  • EOU – CST refund when goods cleared in DTA – FTP to prevail over HoP Appendix – Gujarat High Court
  • No redemption fine when confiscation remains unchallenged – CESTAT Chennai
  • SAD refund – Generic description of imported goods in sale invoices when correct – Madras High Court
  • Proof of exports for fulfilment of EO – Absence of Bill of Export not fatal – Bombay High Court
  • Catalyst consumed in final product cannot be extended exemption available to goods for setting up, running, repair or maintenance of plant – CESTAT Ahmedabad
  • No fundamental right to import and quantitative restrictions can be imposed – Bombay High Court

Central Excise and Service Tax

Ratio decidendi

  • Form-C to mining & power generation dealers for HSD procurement – Circular denying said form set aside – Jharkhand High Court
  • Business Auxiliary Services to foreign firm for development of business in India, whether exports – Issue referred to Larger Bench – CESTAT Mumbai
  • No VAT liability on transporter even when consignor and consignee details not given – Allahabad High Court
  • EOU – Cenvat credit of duties paid on inputs at time of debonding – Madras High Court
  • Refund of excess amount paid by mistake as pre-deposit – CESTAT Chennai
  • Cenvat credit on renting of crates for carrying goods to buyer’s premises – CESTAT Chennai
  • Entry Tax on excavators treating them as motor vehicles, is illegal – Gujarat High Court
  • No service tax on surrender charges deducted from ULIP fund – CESTAT Delhi
  • Exemption to GTA services available for transportation of biscuits – CESTAT Allahabad
  • Export of Scientific and Technical Consultancy Service – POPS Rule 3 when applicable – CESTAT Mumbai
  • Setting aside of penalty while remanding the matter when correct – Madras High Court

September, 2019/Issue-99 September, 2019/Issue-99

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