Article contains update for the Month of July 2018 related to GST, Excise, Service Tax, Customs & VAT which includes Summary of Notifications, Circulars, Advance Rulings, Important Case Laws and announcements made by Government.
Amendments in the rate of GST on specified services:
Amended GST Rates on certain services
|Particulars||Earlier Rate||Amended Rate|
|Multi Modal transportation of goods-Classified under Heading 9965||18%||12%|
|Supply of e-books for which print version exists classified under the Heading 9984.||18%||5%|
Explanation 1 – This item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional.
Amendments in the list of services exempted from GST:
|New Exemption Entries|
|1.||Artificial insemination of livestock (other than horses)|
|2.||Warehousing of minor forest produce|
|3.||Services provided by FSSAI to food business operators by way of licensing, registration and analysis or testing of food samples.|
|4.||Services provided by Government to ERCC by way of assigning the right to collect royalty on behalf of Government on mineral dispatched by mining lease holders|
|5.||Works of installation &commissioning undertaken by electricity distribution utilities for extending electricity distribution network up to tube well of the farmer/agriculturalist for agricultural use.|
|6.||Service by Central/State Govt./UT admin. by giving guarantees for their undertakings/PSUs.|
|7.||Supply of services by State & Central educational boards to students for conducting examination|
|8.||Services provided by an union corporate body / non-profit entity registered under any law, engaged in activities relating to the welfare of industrial or agricultural labour or farmer; or promotion of, interalia, trade, commerce, industry, agriculture, art, science, etc., to its members against consideration in the form of membership fee up to Rs.1000/- per member per year.|
Amendments in exemptions:
|1.||Service provided by hotel, inn, guesthouse, club for residential or lodging purpose having value of supply of <Rs.1000/-. Such exemption was earlier based on declared tariff of < Rs.1000/-.|
|Benefit of exemption for transportation of goods by vessel/aircraft from customs station in India to a place outside India now extended till 30.09.2019. Earlier such exemption was available till 30.09.2018.|
♦ Insertion of a new entry to cover services supplied by individual Direct Selling Agents (DSAs) to banks/ NBFCs under RCM: Liability to pay tax on services supplied by individual Direct Selling Agents (DSAs) to bank or non-banking financial company (NBFCs), shall be on recipient of services under reverse charge mechanism (RCM).
♦ Explanation to the term “renting of immovable property” services supplied by Central Government, State Government, Union territory or local authority to any business entity located in the taxable territory has been inserted in the RCM: “It means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property”.
♦ Notifying services provided by way of any activity in relation to a function entrusted to a municipality under Article 243W to be treated neither as a supply of goods nor as service: Services provided by Government, State Government, Union Territory, Local Authority in relation to functions entrusted to a Municipality under Article 243W of the Constitution shall not be treated either as supply of goods or of services.
♦ Insertion of explanation for ‘business’ to exclude activities of government undertaken as public authority: An explanation has been inserted in the rate notification for services (Notification no. 11/2017-Central Tax (rate) dated 28th June 2017) that the term ‘business’ shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.
♦ Amending GST Rates on various goods:
|Particulars||Old GST Rate||New GST Rate|
|Paints and varnishes, prepared water pigments of a kind used for finishing leather-classified under the Heading 3208/3209/3210.||28%||18%|
|Glaziers’ putty, grafting putty, resin cements, caulking compounds and other mastics; painters’ fillings; non-refractory surfacing preparations- classified under Heading 3214.||28%||18%|
|Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines- classified under Heading 8418.||28%||18%|
|Household or laundry- type washing machines, including machines which both wash and dry-classified under Heading 8450.||28%||18%|
|Lithium-ion Batteries- classified under Heading 8507 60 00||28%||18%|
|Vacuum cleaners-classified under Heading 8508||28%||18%|
|Electro-Mech.Dom. appliances, with self-contained elec. motor, other than vacuum cleaners of heading8508 (other than wet grinder consisting of stone as a grinder)-classified uh 8509.||28%||18%|
|Shavers, hair clippers & removing appliances, with self-contained electric motor-classified U/H 8510||28%||18%|
|Electric water heaters and immersion heaters; electro thermic hair- dressing apparatus and hand dryers; electric heating apparatus; electric smoothing irons; electric heating resistors, other than those of heading 8545- classified under Heading 8516.||28%||18%|
|TV set (incl LCD or LED TV) of screen size not exceeding 68 cm- classified under Heading 8528.||28%||18%|
|Special purpose motor vehicles, other than those principally designed for the transport of persons or goods- classified under Heading 8705.||28%||18%|
|Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports; tractors of the type used on railway station platforms; parts of the foregoing vehicles- classified under Heading 8709.||28%||18%|
|Trailers and semi- trailers; other vehicles, not mechanically propelled; parts thereof [other than Self-loading or self- unloading trailers for agricultural purposes, and Hand propelled vehicles; animal drawn vehicles]- classified under Heading 8716.||28%||18%|
|Fuel Cell Motor Vehicles- classified under Chapter 87.||28%||12%|
|Sanitary Towels(pads) or sanitary napkins; tampons- classified under Heading 96190010/96190020.||12%||Nil|
|Ethyl alcohol supplied to Oil Marketing Companies for blending with motor spirit (petrol) – classified under Heading 2207.||18%||5%|
|Fertilizer grade phosphoric acid- classified under Heading 2809.||12%||5%|
♦ On the following items, the rate of compensation cess has been prescribed as NIL:
♦ Amendments in the list of goods exempted from GST:
New Exemption Entries
1. Sal leaves, siali leaves, sisal leaves, sabai grass.
2. Vegetables materials, for manufacture of jhadoo or broom sticks.
3. De-oiled rice bran.
4. Deities made of stone, marbel or wood.
5. Khali dhona,goods made of sal/siali/sisal leaves, sbai grass, including sbai grass rope.
6. Coir pith compost other than those put up in unit container and bearing a registered brand name
7. Sanitary towels (pads) or sanitary napkins; tampons.
8. Rakhi (other than those made of goods falling under Chapter 71).
Amendments in exemptions
for S. No. 117 and the entries relating thereto, the following shall be substituted, namely :
“Rupee notes or coins when sold to Reserve Bank of India or the Government of India”;
(Refer Notification No. 19/2018 – (CT-R) dated 26th July 2018)
♦ Allowing refund of unutilized ITC for supplies in relation to certain fabrics: In spite of being under inverted duty structure i.e. rate of tax on inputs being higher than rate of tax on output supplies, refund of unutilised input tax credit is not allowed on certain items under GST. Notification no. 5/2017-Central Tax (rate) contains the list of all the items on which no such refund will be available. With effect from 1st August 2018, the refund of unutilised input tax credit on account of inverted duty structure has been allowed on the following:
|1||5007||Woven fabrics of silk or of silk waste|
|2||5111 to 5113||Woven fabrics of wool or of animal hair|
|3||5208 to 5212||Woven fabrics of cotton|
|4||5309 to 5311||Woven fabrics of other vegetable textile fibres, paper yarn|
|5||5407, 5408||Woven fabrics of manmade textile materials|
|6||5512 to 5516||Woven facbrics of manmade staple fibres|
|7||60||Knitted or crocheted fabrics|
|6A||5608||Knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials|
|6C||5806||Narrow woven fabrics, other than goods of heading 5807; narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs)”|
Surprisingly, it has also been stated that the substantive right of a taxable person in the form of unutilised balance of input tax credit after payment of tax for and upto July 2018 on the inward supplies received up to 31st July 2018 will lapse. This provision seems to be regressive and difficult to implement as finding out the input tax credit accumulated on account of inverted duty structure may be very difficult to calculate. This provision may be subject to litigation as the GST Acts do not give power to the Government to notify lapsing of input tax credit in any situation.
(Refer Notification No. 20/2018-(CT-R) dated 26th July 2018).
♦ Notifies concessional rate of GST on specified handicraft goods: On certain handicraft items, the rate of GST has been reduced significantly. The maximum rate on these handicraft items is now given as 12%. Handicraft goods have been defined as follows:
“Goods predominantly made by hand even though some tools or machinery may also have been used in the process; such goods are graced with visual appeal in the nature of ornamentation or in-lay work or some similar work of a substantial nature; possess distinctive features, which can be aesthetic, artistic, ethnic or culturally attached and are amply different from mechanically produced goods of similar utility”
♦ Other CGST and IGST provisions set to be amended: GST Council in its 28th meeting held on 21.07.2018 approved draft amendments to CGST Act, IGST Act and GST (Compensation to States) In addition to above Notifications following amendments are recommended by GST Council:
(Refer Press Note dated 21st July 2018)
♦ E-way Bill –Mention of second vehicle by hand when not an irregularity: Allahabad High Court has directed the department to release the seized goods and vehicle in a case where the assessee had, in his E-way Bills, mentioned details of the second vehicle by hand. The case involved stock transfer on payment of IGST, however, due to resistance by transport unions, vehicles were not allowed to ply beyond certain point and had to be changed. Since the portal did not accept two vehicle numbers for one transaction, the assessee mentioned the details of subsequent vehicle by hand. [Torque Pharmaceuticals Pvt. Ltd. v. State of UP-2018-TIOL-42-HC-ALL-GST].
♦ Conversion of coal to electricity is supply of goods and not job work: The Appellate Authority rejected appellant’s contention that coal received for converting into electricity, for production of steel by supplier of coal, was in furtherance of job work agreement. It held that such supply is supply of goods (electricity) and not services as coal will be utilized in manufacture of new commodity. It was observed that conditions of definition of job work involving two persons and condition in Section 143(1)(a) of CGST Act, to bring back the inputs to the premises of principal, were not fulfilled. [JSW Energy Limited–Order No. MAH/AAAR/SS-RJ/01/2018-19, dated 2-7-2018, Appellate AAR Maharashtra].
♦ Agricultural produce –Exemption for support services to agriculture when available: AAR Rajasthan has allowed benefit of Notification 11/2017-CT (Rate) for goods (cold storage) such as fennel, coriander, cumin and carom seeds, brown mustard seeds, etc. It observed that activity of storage and warehousing of agricultural produce, where the essential character remains same after processing and done only to the extent of first marketability, is covered under support services to agriculture.[Sardar Mal Cold Storage–ARNo.Raj/AAR/2018-19/03, dated 11-6-2018, AAR Rajasthan]
♦ No exemption for cleaning of agricultural produce away from farms: Activity of cleaning of various agriculture produce like saunf, dhaniya, or like goods, etc., which are brought to the applicant by farmers or traders is not covered under Sl. No. 24(i)(i) of Notification 11/2017-CT (Rate) or Sl. No. 54(c) of Notification No. 12/2017-CT (Rate). Further, the activity of mechanised cleaning was also held as not an intermediate production process as job work in relation to cultivation of plants. [Rara Udhyog –Advance Ruling No. Raj/AAR/2018-19/06, dated 23-6-2018, AAR Rajasthan]
♦ Reimbursement of salaries and expenses by HO is not consideration for services to LO: AAR Rajasthan has held that reimbursement of expenses and salary paid by Head Office in Netherlands to the applicant (liaison office, LO) in India is not liable to GST, and hence there is no requirement to get registered under GST. It was also noted that there was no taxable supply of service inasmuch as one cannot provide service to self. [Habufa Meubelen–Advance Ruling No. Raj/AAR/2018-19/05, dated 16-6-2018, AAR Rajasthan]
♦ Contract manufacturing for brand owner –GST liability: Considering that ownership of raw materials for manufacturing beer rested with Contract Brewing/Bottling Unit (CBUs) who undertook manufacturing on behalf of applicant, AAR Karnataka has ruled that CBUs are engaged in supply of goods (beer) and not services (job work), hence, not liable to GST on the amount retained by them as profit. Further, the AAR was of the view that surplus profit received from CBUs by brand owner (applicant in this case) was for supply of service to CBUs. The said service was held as classifiable under SAC 999799 and covered under Notification 11/2017-CT (Rate) attracting GST at 18%. [United Breweries-Advance Ruling No. KAR ADRG 9/2018, dated 29-6-2018, AAR Karnataka]
♦ Compensation to tenant for alternate accommodation is liable to GST: Compensation paid to the tenant for alternate accommodation during repairs at the old premises and for delayed handover of possession of the new premises, is liable to GST. [Zaver Shankarlal Bhanushali–Order No. GST-ARA-29/2017-18/B-37, dated 22-5-2018, AAR Maharashtra]
♦ Rakhi is not a ‘handicraft’, ‘puja samagri’ or covered as ‘kalava’: GST AAR, West Bengal has held that ‘Rakhi’ which is an independently identifiable product made of numerous materials is to be classified in accordance with Rule3(c) of Rules for Interpretation of Custom Tariff. Contentions of the applicant that ‘rakhi’ is a handicraft or puja samagri were rejected by the AAR. It was held that ‘rakhi’ that the applicant intended to make was not in the form of kalava and hence, cannot attract NIL rate of duty under Sl. No. 92(2) of the TRU Clarification. [MD Mohta–Order No.08/WBAAR/2018-19, dated 5-7-2018, AAR West Bengal]
♦ Lyophilizers are classifiable under Ch. 84 and attract GST @ 18%: AAR Telangana, after examining the process of Lyophilization (freeze drying), has held that the goods Lyophilizers (machinery used in drug& pharmaceutical industry for manufacture of vaccines/ injectables which are life-saving drugs) are classifiable under Heading 8419 of GST Tariff and attract tax @ 9% CGST + 9% SGST. [Lyophilization Systems-TSAAR Order No. 5/2018, dated 2-7-2018, AAR Telangana]
♦ Bio-fertilizer in unit container with brand name attracts 5% GST: Observing that Bio Fertilizer are made of animals (micro-organisms), AAR Rajasthan has held that these are hence covered within standard description of HSN Code 3101. It also ruled that Bio-Fertilizer other than in unit container and bearing a brand name will attracts GST @ 0% (Schedule I) and those in unit container and bearing a brand name will be taxable @ 5% GST (Schedule II). [Rhizo Organic–Advance Ruling No. Raj/AAR/2018-09/04, dated 16-6-2018, AAR Rajasthan]
♦ Polypropylene Leno Bags when classifiable under Ch. 63: Polypropylene Leno Bags, if specifically made from woven polypropylene fabric using strips or the like of width not exceeding 5 mm and without any impregnation, coating, covering, or lamination with plastics, are to be classified under TI 6305 33 00. The applicant was clearing said goods under TI 3923 29 90 for exports and under TI 6305 33 00 in domestic market. AAR West Bengal in this regard relied upon various Notes to Ch. 39 and 63, and the BIS specifications as per IS 16187:2014. [Mega Flex Plastics Ltd.–Order No. 09/WBAAR/2018-19 dated 6-7-018, AAR West Bengal]
♦ Asia Pacific Trade Agreement –India cuts tariff from 1-7-2018: India has further reduced Customs duties on specified imports from Bangladesh, China, Korea RP, Lao PDR, and Sri Lanka, all signatories to the Asia Pacific Trade Agreement. As per MoC Press Release dated 2-7-2018, tariff concessions on 3142 tariff lines are available on imports from all member countries while special concessions on 48 tariff lines are there on goods from Bangladesh and Lao PDR. Notification No. 50/2018–Cus., effective from 1-7-2018, has been issued in supersession of Notification No. 72/2005-Cus. in this regard.
♦ Advance Authorisation on net to net basis -Accountability of inputs: DGFT has laid down procedure for issuance of EODCs where Advance Authorisations are issued on net to net basis subject to accountability clause in terms of General Notes Sl. No-4 under Engineering Products and Sl. No-6 in All Export Products Groups under SION. According to a recent DGFT Policy Circular No. 10/2018-19, certificate in specified format from an independent Chartered Engineer having domain knowledge, certifying that inputs imported are required and used, is essential along with accountability statement. This will be required irrespective of FTP period.
♦ ‘No incentive certificate under MEIS’–DGFT notifies procedure: DGFT has notified a procedure to obtain a ‘No incentive certificate under MEIS’ for shipments which are being re-imported. Public Notice No. 17/2015-20, dated 3-7-2018 in this regard inserts Para 3.24 in Handbook of Procedures Vol. I along with ANF 3E and 3F specifying format for application and the certificate respectively. Accordingly, MEIS benefit if utilised has to be refunded along with interest in order to get the certificate. Scrips not utilised have to be surrendered. If scrips have not been applied for or not yet issued, RA will issue certificate based on undertaking of the exporter.
♦ ‘Processed items’ defined in plant quarantine import regulation order: Ministry of Agriculture has inserted definition of processed items in Plant Quarantine (Regulation of Import into India) Order, to mean processed to the point where commodity does not remain capable of being infested with quarantine pests. The definition includes cooking, fermentation, malting, multi-method processing, pasteurization, preservation in liquid, pureeing, sterilization, sugar infusing and tenderizing. It may be noted that as per clause 3(7)(ii) of the Order, plant quarantine clearance is not required for import of commodities with least phytosanitary risk which have undergone such processing.
♦ Pea imports –Quantity restrictions extended till 30-9-2018: Restriction on import of Peas classified under Exim Code 0713 10 00 (including Yellow peas, Green peas, Dun peas and Kaspa peas) has been extended for a further period of three months, i.e., till 30th of September 2018 (Earlier date 30.06.2018). DGFT has on 2-7-2018 issued Notification No. 15/2015-20 for this purpose. However, it may be noted that DGFT has through its Trade Notice No. 21/2019-19, dated 6-7-2018 clarified that consignment of peas (other than Yellow Peas) imported during the period 25-4-2018 to 15-5-2018 and awaiting clearance at Customs or consignments of peas (other than Yellow Peas) with Bill of Lading prior to 16-5-2018, are permitted to be freely imported.
♦ IPR enforcement –Reference to ‘patent’ removed from Customs Rules: Reference to ‘Patent’ and ‘Patents Act’ have been removed from the definitions of ‘intellectual property’ and ‘intellectual property law’, respectively, under Rules 2(b) and 2(c) of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Further, clauses (c) and (d) have been inserted in Rule 5, now requiring rights holder to inform about any amendment, cancellation, suspension of IPR at the time of giving notice. Similar amendments have also been made in Notification No. 51/2010-Cus. (N.T.) prohibiting import of certain goods.
♦ TED refund denial detrimental to exporters and economy –Notification restricting refund is not retrospective: Observing that FTP 2009-14 conferred rights on DTA supplier to seek refund of Terminal Excise Duty when supplies made to 100% EOU were not against International Competitive Bidding, Delhi High Court has allowed TED refund for the last quarter of 2011. The assessee, in the dispute, had supplied goods to the EOU on payment of duty using Cenvat credit. The Court in this regard observed that Notification No. 4 of 2013, prohibiting such refunds when ab initio exemption was available, was not retrospective and that denial was detrimental to cause of the exporters and the Indian economy. [Motherson Sumi Electric Wires v. UOI –Judgement dated 12-7-2018 in W.P. (C) No. 6151/2016, Delhi High Court]
♦ TED refund not deniable in absence of ab initio exemption: Observing that supply of trains under the contracts funded by Japan International Cooperation Agency, to the Chennai Metro under International Competitive Bidding (ICB) were not ab initio exempt, Delhi High Court has quashed the order denying refund of Terminal Excise Duty (TED). Considering that unconditional exemption from Customs duty (which itself was condition for Excise exemption) was available only for supplies to Delhi Metro and not to Chennai Metro, it was held the denial of refund of TED on account of already being exempt was not sustainable. The assessee had supplied 6 train sets between 26-2-2014 & 30-8-2014. [Alstom Transportv. UOI –Judgement dated 9-7-2018 in W.P.(C) Nos. 10544/2017 and 10558/2017, Delhi High Court]
♦ CVD on imports for sale to hospital to be on transaction value and not MRP: CESTAT Mumbai has held that valuation of Top loader refrigerator, for purpose of CVD, must be done under Section 4 and not under Section 4A of Central Excise Act, 1944, as the said goods were imported for selling to hospitals which qualify as institutional customer. The Tribunal in this regard observed that the importer was at par with the manufacturer for the purpose of levy of CVD, and are exempted from affixing MRP under Rule 2A of Standards of Weight & Measures (Packaged Commodity) Rules, 1977 in specified cases. [Remi Sales & Engg.v. Commissioner -Order No. A/86476/2018, dated 23-5-2018, CESTAT Mumbai].
Central Excise and Service Tax
♦ Cenvat credit on inputs -Explanation in Rule 2(k) is not for service provider: CESTAT Ahmedabad has held that Explanation 2 to Cenvat Rule 2(k), providing for non-availability of credit on cement and certain steel items for construction of factory shed, etc., wis exclusively in respect of manufacturer only. The Tribunal allowed Cenvat credit when the said inputs were used for provision of service namely, Erection, Commissioning and Installation. It was of the view that by use of words ‘factory shed’ it is clear that the explanation was meant for manufacturer only and not for service provider. [Ultra Tech Transmission v. Commissioner -Final Order No. A/11363 /2018, dated 9-7-2018, CESTAT Ahmedabad]
♦ Cenvat credit on basis of photocopy of Bill of Entry when permissible: In a case where the assessee in order to save additional expenditure had despatched the consignment to their various units from the port itself, CESTAT Delhi has allowed Cenvat credit on basis of invoice and photocopy of B/E. Tribunal in this regard held that as long as inputs are received and used for manufacture of excisable goods, there is no bar in taking Cenvat credit. It was observed that substantial benefit is not to be denied on procedural ground. [Century Metal Recycling Pvt. Ltd.v. Commissioner -Final Order No. 52282/2018, dated 22-6-2018, CESTAT Delhi]
♦ Removal of MRP sticker, without affixing new one is not ‘manufacture’: CESTAT Delhi has upheld Commissioner (A)’s Order holding that removal of MRP sticker, without affixing a new MRP did not amount to ‘manufacture’ under provisions of Section 2(f)(iii) of Central Excise Act, 1944. The Tribunal hence rejected department’s appeal observing that there was absence of allegation of fixation or alteration of MRP. It noted that provisions of said section provided for “deemed manufacture” only when goods are labelled or relabelled or MRP was altered, which itself establishes the fact of fixation of MRP. [Commissioner v. Anmol Vachan Impex -Final Order No. 52180-52181/2018, dated 11-6-2018, CESTAT Delhi]
♦ Cenvat credit on input service for pan masala cleared under Panmasala Packing Capacity Rules: Observing that advertisement and sales promotion services were used in relation to the manufacturing business and not directly in the manufacture of pan masala, CESTAT Allahabad has allowed benefit of Cenvat credit on such services. It noted that restrictive Rule 15 of Pan masala Packing Machine (Capacity Determination and Collection of Duty) Rules denies credit on input services used in manufacture only. [Dharampal Satyapal Ltd.v. Commissioner-Final Order No. 71336/2018, dated 4-7-2018, CESTAT Allahabad]
♦ C & F Agent expected to undertake all activities as agent of principal: CESTAT Delhi has set aside the demand of service tax under Clearing and Forwarding Agent service, in a case where assessee was entrusted with the responsibility of receiving goods at railway siding, storing the same in the godown as also loading onto the truck. The Tribunal after perusing the agreements, was of the view that assessee had not acted as agent of the principal, and therefore, not as C & F Agent of the principal. It noted that the godown was rented by the appellant-assessee to the other company. [B.P.T. Polymers Pvt. Ltd.v. Comm. -Final Order No. 52223/2018, dated 12-6-2018, CESTAT Delhi.
♦ Business Auxiliary Service does not cover establishment of WAN: In a case where part of contract was sub-contracted, CESTAT Delhi has rejected department’s plea of coverage under Business Auxiliary Services for the period from 2004 to 2009. The sub-contract was for establishment of WAN and it was held that activity is covered under Information Technology Service under Explanation to Section 65(19) of Finance Act, 1994, and thus excluded from BAS. [Tata Consultancy Services v. CST -Final Order No. 52251/2018, dated 18-6-2018, CESTAT Delhi]
♦ Lending/Borrowing by industrial unit not attracts Cenvat Rule 6(3B): Rule 6(3B) of Cenvat Credit Rules, requiring reversal of 50% of the credit availed, will not be applicable to assessee, a steel manufacturer, as their activity being industrial falls under exclusion category of financial institution. Cenvat Credit availed will not be restricted to 50% as assessee’s principal business is not of banking nature. The assessee had availed loans from various banks as well as other ‘Banking and other Financial Services’ from overseas service provider, and paid service tax under reverse charge mechanism during period 2011-12 till August 2015. [Jindal Steel & Powerv. Commissioner-Final Order No. 52257/2018, dated 20-6-2018, CESTAT Delhi]
♦ Micronutrients are fertilisers and not plant growth regulators: CESTAT Mumbai while holding that micronutrients are fertilisers and not plant growth regulators, has rejected department’s contention of classification under TI 3808 20/3808 30 40 of Central Excise Tariff. Circular No. 1022/10/2016-CX, dated 6-4-2016 was though partly doubted. Tribunal was of the view that micronutrients manufactured in factories are fertilizers, both by use as reflected in Fertilizer (Control) Order, 1985 and the deficiency that is sought to be remedied by their addition to soil or by foliage application. The issue involved classification of ‘Agromin’, ‘Chelafer’ and ‘Chelamin’. [Commissioner v. Aries Agro-Vet Ind-Order No. A/86615/2018, dated 31-5-2018, CESTAT Mumbai]
♦ Cenvat credit on railway tracks used for bringing in inputs, available: Cenvat credit allowed on railway tracks for railway line from a railway siding to the unloading point inside the factory for inward transportation of raw materials and also outward transportation of finished goods. Goods had nexus with the manufacture of final goods and were covered under the definition of inputs as per the Cenvat Credit Rules. [Adhunik Alloys & Power Ltd.v. Commissioner-2018 (7) TMI 517 -CESTAT Kolkata]
*Member ZAC & RAC Chandigarh – Central Excise & Service Tax (now GST) & Customs, Govt. of India, Member of Indirect Tax committee SIAM , Member, ASSOCHAM National Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd., Winner Achiever Award 2015 by ICAI (CMA).
(Author can be reached at [email protected])