Indirect Taxes Updates GST, Customs, Excise, Service Tax & VAT Month – December 2018

The GST Council (‘Council’) convened its 31st Meeting on December 22, 2018 after a gap of almost 3 months. The council has proposed reduction of tax rates for serval items, legislative amendments and other changes relating to extension in dates and rationalizing the procedures.

The Council has not clarified the date from when the aforesaid rate changes will come into force (unlike the past instances where the Council also announced the effective date of rate changes). The Union Finance Minister in his speech has said that January 1, 2019 will be the effective date for rate changes.

 On the recommendations of GST Council, CBIC issued notification on 31st December 2018. Detail of notifications issued is given below

 GST Rate on goods

Particulars Notifications
Total Rate of GST- 5%

Marble , Travertine , Crude, Fly ash blocks , Walking sticks , Parts & accessories of carriage of disabled persons, Footwear of sale not exceeding Rs. 1000/- per pair

Schedule -1 ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 12%

♦ Natural cork, shuttle cork bottom etc (Ch 4502/4503)

Flexible intermediate bulk containers

Schedule -II ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 18%

♦ Retreaded or used pneumatic tyres of Rubber (4012)

♦ Video game (9504)

♦ Transmission, Bearing housing, Gear boxes, Fly wheels , Pulley etc  (8483)

Schedule – III ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 28%

Substitution

Parts and accessories of vehicles of heading 8711 [S.No.174,Heading 8714]. Omission of reference to parts and accessories of vehicles of heading 8713.Such items shifted to 2.5% CGST.

Schedule – IV ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Exemptions

♦ Un-cooked vegetables , frozen (0710)

♦ Vegetables provisionally preserved for example in brine etc (0711)

♦ Music , printed or in manuscript (4904)

♦ Supply of gifts items received by President, Prime minister, Chief minister of any state / UT or any public servant (Any chapter)

 ( refer Notification 25/2008 – Central Rate Tax) w.e.f 1st January 2019

GST Rate on Services

Services Rate Condition / Notification
Transportation of passengers ,with or with out accompanied baggage,by air,by non-scheduled air transport service or charter operations ,engaged by specified organisations in respect of religious pilgrimage facilitated by the Government of India, underbilateral arrangement.[S.No.8(iva)] 5% Provided that credit of input tax charged on goods used in supplying the service  has not been taken 27/2018 – Central Rate Tax)
Service of 3rd party insurance of goods carriage 12% 27/2018 – Central Rate Tax)
Leasing of Rental service 18%
Services by way of admission to exhibition of cinematograph films where price of admission ticket is above one hundred rupees 18%
Service by way of construction or engineering or installation or any other technical service provided in set up of Bio gas plant, solar power  based devices , Solar power  generating  system, Wind mills, Waste to energy system etc. 18%
Exemptions

Services provided by a goods transport agency,by way of transport of goods in a goods carriage,to,-

(a) Department or Establishment of the Central Government or State Government or Union territory;or

(b) local authority ;or

(c) Governmental agencies,

Which has taken registration under the Central Goods and ServicesTaxAct,2017(12of 2017) only for the purpose of deducting tax under Section51 and not for making a taxable supply of goods or services

Services provided by a banking company to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY).

♦ Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act,1992

Nil 28/2018 – Central Rate Tax)
Security services (services provided by way of supply of security personnel) from any person other than a body corporate is required to pay GST on reverse charge basis. 18% 29/2018 (Central rate ) dt 31-12-2018

CGST Rules – recent amendments vide circular no. 74/2018

♦ A person liable to collect TCS in a particular State in which he does not have an office or any other establishment, will be required to mention name of the State where his principal place of business is located in Part-B of the relevant application form. The State in which such TCS is required to be made, shall be mentioned in Part-A of the relevant application form.

Job work reporting in Form ITC-04 – The details of challan issued when goods are sent from one job worker to another need not be included while filing Form ITC-04 (refer rule 45(3)

Electronic tax invoice & supply bill related changes – Tax payer can issue tax invoice / supply bill complying Information and Technology Act , 2000 without affixing signature or digital signature of the supplier or his authorised representative(refer Rule 46 & 49)

Tax invoice in special casessignature   or digital signature of supplier or his authorised representative will not be required in the following cases: (refer Rule 54)

♦ Where supplier  is an insurer or a banking company or a financial  institution, including a non-banking financial company.

♦ Where supplier is providing passenger transportation service.

Refund application related changes – As  per  the  above  amendment,  departure  manifest  filed  along  with shipping  bill  will  also  be  considered  sufficient  compliance  for  the purpose of application for refund. (refer rule 96)

Order of Revisional Authority –  Hearing mandatory in certain cases As  per  the  above  amendment,  Revisional  Authority  is  required  to  provide opportunity of hearing if his order is likely to impact the taxpayer adversely (refer Rule 109 A)

Restriction on generation of e-waybill-   no  person (including  a  consignor,  consignee,  transporter,  an  e-commerce  operator  or  a courier agency) shall be allowed to furnish the information in PART A of FORM GST  EWB-01 who

(a) being a person paying tax under section 10, has not furnished the returns for two consecutive tax periods; or

(b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive period of two months:

Substitution & Insertion of Forms in CGST Rules

Changes in GSTR-9 (Annual Return)

♦ Now, additional   liability   not   declared   in   FORM   GSTR-1   and FORM        GSTR-3B  for  FY  2017-18  may  be  declared  in  GSTR-9. However,   taxpayers   cannot   claim   input   tax   credit   unclaimed during FY 2017-18 through this return.

♦ Taxpayers shall be given an option to pay any additional liability declared in  this  form,  through  FORM  DRC-03.  Taxpayers  shall select  ―Annual  Return  in  the  drop  down  provided  in  FORM DRC-03. Such liability can be paid through electronic cash ledger only.

Changes in GSTR-9C (Reconciliation & Certificate)

♦ Sign for Item E of Table 5 (+) is replaced with (-) Similarly, Sign for Item J of Table 5 (-) is replaced with (+)

♦ It is  clarified  through  instructions  that  it  is  mandatory  to  file FORM GSTR -9 for the FY 2017-18 before filing GSTR-9C. Verification   of   registered   person   introduced   in   GSTR-9C   in addition to verification by auditor

Extension of time limit for filing GSTR-3B for newly migrated taxpayers – Notification Nos. 68/2018, 69/2018, & 70/2018-C.TThe returns for the period July, 2017 to February, 2019 shall be furnished on or before 31.03.2019.

Extension of time limit for filing GSTR-1 for newly migrated taxpayers – Notification Nos. 71/2018 and 72/2018The returns for the period July, 2017 to February, 2019 shall be furnished on or before 31.03.2019

Extension for filing ITC-04 – Notification No. 78/2018 C.Tin respect of goods dispatched to a job worker or received from job worker, during the period from July, 2017 to December, 2018 has been extended till the 31.03.2019.

Exemption from collecting TDS – Notification No. 73/2018-C.TExemption has been granted from applicability of TDS in respect of supplies of goods or services which takes place between one person to another person specified under clause (a), (b), (c) & (d) of section 51 of CGST Act.

Waiver of late fee for delay filing in GSTR-1/ GSTR3B / GSTR-4 – Notification No. 75, 76 & 77/2018– C.T- Amount of late fees leviable on account of delayed furnishing of GSTR-1 Return for the months/quarters from July, 2017 to September, 2018 has been waived.

However, late fees is waived only in cases where the taxpayer files GSTR-1/ GSTR3B / GSTR-4 between the period from 22.12.2018 to 31.03.2019

Circular No. 76 clarifying various issues – CBIC  has  issued  Circular  No.  76/2018-  GST  dated  31.12.2018  to provide clarification in respect of following miscellaneous issues:

Sale by government departments to unregistered persons –     Sale   of   used   goods   viz.,   scraps,   used   vehicles,   etc.   by   a government department to unregistered persons shall be taxable but tax thereon shall be paid under Forward Charge Mechanism. In such cases, supplier (govt. department) shall be liable to take registration under GST.

GSTR-3B Return filed after due date – Penalty – Penalty as per Section 73(11) of CGST Act shall not be imposed in cases where GSTR-3B Return has been filed after the due date as there is no default of payment of taxes. However,  in  such  cases,  penalty  under  Section  125  may  be imposed.

 Tax rate for debit /credit notes issued under Section 142(2) –     In  cases  where  debit/credit  note  is  to  be  issued  under  Section 142(2)  of  CGST  Act,  pertaining  to  a  supply  made  in  pre  GST regime, the GST rate as per the GST Acts would be applicable.

Applicability of TDS provisions – Section 51 of the CGST Act  (TDS) is also applicable to authority or a board or any other body set up by an Act of Parliament or a State legislature or established by any Government with 51% or more   participation   by   way   of   equity   or   control   is   with   the Government.

Taxable value under GST to include TCS under Income Tax Act – Taxable  value  for  GST  shall  include  the  TCS  amount  collected under the provisions of Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS. 

Owner   of  Goods”   for  the  purposes  of  Section  129(1)  on detention / seizure of goods in transit –  If    the    invoice or   any    other    specified    document    is accompanying  the  consignment  of  goods,  then  either  the consignor  or  the  consignee  should  be  deemed  to  be  the owner. If   the   invoice   or   any   other   specified   document   is   not accompanying  the  consignment  of  goods,  then  the  proper officer  should  determine  who  should  be  declared  as  the owner of the goods. 

Composition Scheme – Clarification on withdrawal / denial –   CBIC has issued Circular No. 77/2018-GST dated 31.12.2018 to provide clarification  in  respect  of denial  of composition  option  by  tax authorities and effective date thereof.

Clarification on export of services

CBIC has issued Circular No. 78/2018-GST dated 31.12.2018 to provide clarification relating to export of services in a particular situation.

Issue:  In  case  an  exporter  of  services  outsources  a  portion  of  the services  contract  to  another  person  located  outside  India,  what  would be the tax treatment of the said portion of the contract at the hands    of the exporter?

Clarification:

Total  value  of  services  as  agreed  to  in  the  contract  between  the exporter  of  services  located  in  India  and  the  recipient  of  services located outside India will be considered as export of services.

Supplier  of  services  located  in  India  would  be  liable  to  pay  IGST under       RCM  on  the  import  of  services  on  that  portion  of  services which has been provided by the supplier located outside India.     Supplier in India eligible to avail ITC of IGST paid under RCM.

 Clarification on refund related issues –    CBIC has issued Circular No. 79/2018-GST dated 31st December, 2018 to clarify certain issues relating to refund.

Physical submission of refund claims:

All  documents/undertaking/statements  to  be  submitted  along with        the  claim  for  refund  in  Form  GST  RFD-01A  shall  be uploaded on the common portal. Neither the application nor any of the supporting documents, shall be required to be submitted physically.However, the taxpayer will have the option to physically submit the refund application along with supporting documents, if he so chooses.

Calculation of refund of accumulated ITC on account of inverted duty structure:

In case of multiple inputs attracting different rates of tax, the term “Net ITC” [in the formula provided in Rule 89(5) of the CGST Rules] covers ITC availed on all inputs in the relevant period, irrespective of their rate of tax.

Refund of accumulated ITC of Compensation Cess (Cess)- In this context, the circular addresses the following three issues-

Issue 1: How should the amount of cess to be refunded be calculated post  issuance  of  Circular  No.  45/19/2018-GST  dated  30.05.2018 (where  it     was  clarified  that  refund  of  accumulated  ITC  of  cess  is available) but ITC was not availed of the cess paid on the inputs.

Clarification – Refund on account of cess is to be recomputed as if the same was available in the respective months in which the refund of unutilized ITC was claimed on account of exports made under LUT/bond. If the aggregate of these recomputed amounts of refund of cess is less than or equal to the eligible refund of cess calculated in respect of the month in which the same has actually been claimed, then the aggregate of the recomputed   refund   of   cess   of   the   respective months would be admissible.

Issue 2: Can the refund of accumulated ITC of cess paid on coal be rejected  on  the  ground  that  coal  is  used  for  generation  of  electricity which  is  an  intermediate  product  and  not  the  final  product  which  is exported and since electricity is exempt from GST, the ITC of the tax paid on coal for generation of electricity is not available?

Clarification: There is no distinction between    intermediate  goods  / services and final goods/services under GST. Since coal   is   an   input used  in  the  production  of,  for  example  aluminium,  albeit  indirectly through   the   captive   generation   of   electricity,   which   is   directly connected  with the business of the registered person, ITC in relation to the same cannot be denied.

Issue 3: Can the ITC which is reversed be held as ‘Net ITC’ and the same  can  be  used  in  calculating  the  maximum  refund  amount  on account of   zero-rated supplies?

Clarification: ITC which is reversed cannot  be   held   to   have   been ‘availed’ in the relevant period and therefore, the same  cannot  be  part of refund of unutilized ITC.

Non-consideration of  ITC  of  GST  paid  on  invoices  of  earlier  tax period availed in  subsequent tax period:

Net ITC‟ [as defined in Rule 89(4) of the CGST Rules] means ITC availed on inputs and input services during the period for which the refund claim has been filed.  ITC can be said to have been “availed” when it is entered into the electronic credit ledger. Therefore, ITC of invoices issued in earlier tax period but availed in subsequent tax period cannot be excluded from the calculation of the refund amount for the subsequent tax period.

Misinterpretation of the meaning of the term “inputs” :

GST  paid   on   inward   supplies   of   stores   and   spares,   packing materials etc. shall be available as ITC as long as these inputs are used  for  the  purpose  of  the  business  and/or  for  effecting  taxable supplies, including zero-rated supplies, and the ITC for such inputs is not restricted.

Stores and spares, the expenditure on which has been charged as a revenue expense in the books of account, cannot be held to be capital goods

Refund of accumulated ITC on input services and capital goods arising on account of inverted duty structure – Refund  of  tax  paid  on  input  services  and  capital  goods  as  part  of refund  of  input  tax  credit  accumulated  on  account  of  inverted  duty structure is not  allowed.

 Clarification regarding GST rates & classification of Goods    CBIC has issued Circular No. 80/2018-GST dated 31st December, 2018 to clarify the applicable HSN & GST rates on the following items:

Chhatua or Sattu :

HSN            –     1106

GST Rate   –     If unbranded : Nil If branded and packed : 5%

Fish meal and other raw materials used for making cattle / poultry / aquatic feed

HSN            –     2301

GST Rate   –     5%

LPG supplied in bulk for ultimate supply  for domestic use 

LPG   supplied   in   bulk,   whether   by   a   refiner/fractionator   to   an   Oil Marketing Companies (OMC) or by one OMC to another for bottling and further supply for domestic use will attract GST rate of 5%. (S. No. 165A of the N. No. 1/2017- Central Tax (Rate) dated  28.06.2017

Polypropylene  Woven  and  Non-Woven  Bags  and  PP  Woven  and NonWoven Bags laminated with BOPP

HSN            – 3923

GST Rate   – 18%

Non-laminated   woven   bags   would   be   classified   as   per   their constituting materials.

Wood logs for pulping

HSN            – 4403

GST Rate   – 18%

Bagasse based laminated particle board

Chapter       – 44

GST Rate   – 12%

Three pieces of fabrics sold in pack as ladies salwar suit

Chapter       – 50 to 55 and 60 on the basis of their constituent materials

GST Rate   – 5%

Waste  to  Energy  Plant   (WTEP)  –  Scope  of  entry  No.  234   of Schedule  I  of  Notification  No.1/2017-  Central  Tax  (Rate)  dated 28.6.2017

The said notification specifically applies only to  the  goods  falling under chapters 84, 85 and 94.

Concessional  GST  rate  of  5%  would  be  available  only  to  such machinery,  equipment etc., which fall under Chapter 84, 85 and 94 and used in the initial  setting  up  of  renewable  energy  plants  and devices including WTEP.

Turbo Charger for railways

HSN            – 8414

GST Rate   – 18%

Rigs, tools & Spares moving inter-State for provision of service

Any such movement on own account (not     involving distinct person in terms of Section 25), where such movement is    not intended for further supply of such goods does not constitute a   supply  and  would  not  be liable to GST.

CBIC issued Circulars  (82 to 86 dated 01st January 2019) clarifying 

♦ Exemption to IIMs

♦ GST applicability / exemption to services provided by Asian development bank and international finance corporation.

♦ Printing of pictures – clarification on classification and rate -18%

♦ Supply of food & beverages by educational institution- clarification on applicability of exemption

♦ Applicability of GST on services of business facilitator or business correspondent to banking company.

Extension of time limit for availing ITC and rectification of errors/ omissions relating to supplies made during Financial Year 2017-1

♦ CBIC has issued Central Goods and Services Tax (Second Removal of Difficulties) order , 2018 dated 31.12.2018 to extend the time limit for availing ITC on invoice/debit note for supplies relating to the FY2017-18

♦ A proviso is inserted in Section 16(4) of the CGST Act to allow availment of ITC after the due date of furnishing of the return under Section 39 for the month of September, 2018 till the due date of furnishing of the return for the month of March,2019. (Order no. 2 dated 31st December 2018)

Extension of time limit by 30th June 2019  for furnishing Annual Return in Form GSTR-9 / GSTR-9A and reconciliation statement for the Financial Year 2017-18 . (Order no. 3 dated 31st December 2018)

Extension of time limit for furnishing of Form GSTR-8 for the period October-December 2018- now it is extended to 31st January 2019 (Order no. 4 dated 31st December 2018)

Effective date of amendments made in CGST, SGST and IGST Acts –  The Council has notified February 1, 2019 as the date when amendments made in the Central Goods and Services Tax Act, 2017 (‘CGST Act’), the Integrated Goods and Services Tax Act, 2017 (‘IGST Act’) and relevant State Goods and Services Tax Act, 2017 (‘SGST Act’) in 2018 will become applicable. The important amendments that will become effective, are as under:

♦ Merchanting sales, in-bond sales and high sea sales getting placed under Schedule III (transactions not qualifying as supply)

♦ No reversal of credit on activities mentioned under Schedule III

♦ Availability of credit on all motor vehicles except passenger transport vehicles with seating capacity of more than 13 passengers

♦ Non-availability of credit on repair and insurance of motor vehicle

♦ Non-availability of credit on leasing, renting and hiring of motor vehicle

♦ Facility of issuance of consolidated credit and debit note against multiple invoices

♦ Facility to obtain separate registration for separate place of business in a State even though falling under same ‘business vertical’

♦ The place of supply of services supplied in respect of goods temporarily imported into India for any treatment or process will be the location of service recipient

♦ The place of supply of transportation services for export of goods to be the destination of such goods in case both supplier and recipient are in India

Legislative changesThe following changes have been proposed under the CGST Act

A Centralized Appellate Authority for Advance Ruling (‘CAAAR’) to be created where conflicting decisions have been given by two or more State Appellate Authority for Advance Ruling (AAARs); and

♦ Interest to be applicable on amount payable net of admissible input tax credit. Consequently, interest will not be payable where there is sufficient credit balance in Electronic Credit Ledger.

 Other important changes

♦ The CBIC has already issued the draft of new simplified return mechanism. The new return filing system shall be introduced on a trial basis from April 1, 2019 and shall be made mandatory from July 1, 2019.

♦ The movement of rigs, tools & spares and all goods on wheels for the provision of service, shall not be subject to GST where such movement is not intended for further supply of goods.

♦ The facility to generate e-way bill shall be suspended if a taxpayer does not file returns for two consecutive tax periods.

♦ There will be a single cash ledger for each head (CGST, SGST, IGST and Cess). The bifurcations between tax, interest, penalty, fee and others will be done away with

♦ A taxpayer shall be able to submit all documents for filing refund claim electronically, obviating the need to physically visit the department. The following types of refunds shall be made available through RFD-01A.

♦ Refund on account of assessment, re-assessment or any other order

Excess tax paid , Tax paid under wrong head (IGST instead of CGST and SGST and vice-versa) Any other refund

♦ In future, a single authority (Centre or State) shall disburse the refund. The proposal will be initially implemented on pilot basis.

Important cases decided

GST anti-profiteering authority, the National Anti-profiteering Authority says HUL has allegedly profiteered to the extent of ₹383 crore since GST rate cut in November 2017- It was observed that, after allowing for certain deductions, the confirmed amount of tax benefit that the company has not passed on to consumers was assessed at Rs. 383 crores. NAA asked HUL to deposit Rs. 223 crore in central and state consumer welfare funds as the company had proactively deposited Rs. 160 crore with the central consumer welfare fund, set up under the anti-profiteering laws.The authority also directed HUL to reduce the prices of its products by way of commensurate reduction keeping in view the reduced rates of tax  and the benefit of ITC.

No profiteering when MRP unchanged despite increase in post-GST tax rate- The National Anti- profiteering Authority (NAA) held that the effective tax rates for the impugned product has increased post GST and the respondent has still maintained the same MRP and the reduction in base price was more than the increase in ITC and hence, there was no profiteering by the respondent. [Mandalika Sakunthala v. Fabindia Overseas, Case No. 13/2018, Order dated 16-11- 2018) 

Profiteering when increase in base price from same date as rate reduction is more than ITC denied- The NAA rejected the contention of the respondent that Section 171 was applicable only for contracts entered into for supply before GST rate change or availability of ITC and both parties agree to such change. (Ravi Charaya v. Hardcastle Restaurants Case No. 14/2018, decided on 16-11-2018, National Anti-Profiteering Authority)

Non-reduction of base price when CVD subsumed in IGST on imported goods, is profiteering – It was held that price offered prior to implementation of GST was to be reduced by the amount of CVD [Crown Express Dental Lab v. Theco India Pvt Ltd. – 2018-VIL-12-NAA]

GST on transfer of right to use buses for passenger transportation- The service was held to be classifiable under Heading No. 9966. held as supply of service as per clause 5(f) of Schedule II to the CGST Act (SST Sustainable Transport Solutions India Pvt. Ltd. Order No. GST-ARA-68/2018-19/B-129, dated 15-10-2018, AAR Maharashtra] 

Transfer of ownership without physical imports IGST not payable – The Authority in this regard held that for goods supplied on an out and out basis there is no levy till the time of their customs clearance in compliance with Section 12 of the Customs Act and Section 3 of the Customs Tariff [ INA Bearings India Pvt. Ltd. – 2018-VIL-290-AAR] 

Provision for subscription by a club when included under business It noted that funds collected are spent on organising meetings providing facilities to members. Services provided against subscription/membership fee was held classifiable under SAC Heading 99959. [In RE: Inner Wheel Club Order No. 23/WBAAR/2018-19, dated 26-11-2018, AAR West Bengal]

Services from sweet shop cum restaurant is a composite supply- The activity of the applicant was held classifiable under restaurant services under Heading 9963 and held liable to GST @ 5% under Notification No. 11/2017-Central Tax (Rate), without ITC. [Kundan Misthan Bhandar Order No. 08/2018-19/Advance Ruling/DDN/5459, dated 22-10-2018, AAR Uttarakhand]

Supplies when classifiable as mixed and not composite supply-  it was held that where supply of parts and services are known and can be supplied individually or in any combination to customers, supplies would be covered as mixed supplies. [Sandvik Asia Pvt. Ltd. Ruling No. RAJ/AAR/2018-19/21, dated 12-10-2018, AAR Rajasthan]

Ancillary services linked to lease of industrial plots not exempt – AAR Chandigarh has held that additional/ancillary services (Transfer fees, Extension fees, Conversion fees, Processing fees, bifurcation fees and tower installation charges) provided in respect of industrial plots, are liable to GST [In RE: Punjab Small Industries & Export Ltd. Ruling No. CT/01/A.R./CHD/2018/8042, dated 8-11-2018, AAR Chandigarh]

GST payable on penal interest collected for tolerating delayed EMI- GST AAR Maharashtra has held that penal interest collected by the applicant in pursuance of tolerating the act of delayed payment of EMI by the customers, would constitute a supply under Section 7(1)(d) of the CGST Act read with Clause 5(e) of Schedule II thereof. [In RE: Bajaj Finance Ltd. – 2018-VIL-275-AAR]

Customs

Expeditious disposal of unclaimed cargo via auction New procedure – According to Circular No. 49/2018-Cus., dated 3-12-2018, in case entire process of auction is not concluded within 180 days of commencement of auction, custodian shall inform the bidder about extended time.

SEZ Time period for bringing back jewellery after processing, revised – Time-period for bringing back studded gold jewellery, silver jewellery and imitation jewellery, sent outside the SEZ for sub-contracting, has been revised to 45 days. (Notification dated 9-11-2018)Expeditious disposal of unclaimed cargo via auction New procedure – According to Circular No. 49/2018-Cus., dated 3-12-2018, in case entire process of auction is not concluded within 180 days of commencement of auction, custodian shall inform the bidder about extended time.

EOUs – Customs and Central Excise notifications amended to align with FTP- The amendment also provides for re- import of specified goods by EOUs within 7 years of export, for repair and reconditioning. ( Circular No. 50/2018-Cus., dated 6-12-2018)

Non-basmati rice made eligible for MEIS benefits- The benefit would be available at the rate of 5% of exports made with effect from 26-11-2018 up to 25-3-2019. Public Notice No. 49/2015-20, dated 22-11-2018 has been issued for this purpose

Important cases under Excise and Service Tax

Electricity generated from bagasse and sold out Cenvat Rule 6 not applicable- It observed that electricity generated from bagasse, like that generated through solar power, hydro power, wind power etc., is not covered under Chapter 27 of the Central Excise Tariff. [Shivratna Udyog Ltd. v. Commissioner – Order No. A/87964/2018, dated 20-11-2018, CESTAT Mumbai]

Service Tax liability of courier agent in case of international courier- The Tribunal observed that despite payment in foreign exchange said services cannot be treated as export of service. It noted that the appellant was performing entire services within India and no part of the service was provided outside India. [UPS Jetair Express v. Commissioner – Order No. A/87929/2018, dated 16-11-2018, CESTAT Mumbai]Electricity generated from bagasse and sold out Cenvat Rule 6 not applicable- It observed that electricity generated from bagasse, like that generated through solar power, hydro power, wind power etc., is not covered under Chapter 27 of the Central Excise Tariff. [Shivratna Udyog Ltd. v. Commissioner – Order No. A/87964/2018, dated 20-11-2018, CESTAT Mumbai]

Cenvat credit available on manpower supply for OHC at hazardous unit – The Tribunal observed that denial on ground of failing to keep separate records of emergency treatment was not fatal, as OHC was to meet emergency situations. Rallis India Ltd. v. Commissioner – Order No. A/88008/2018, dated 26-11-2018, CESTAT Mumbai] 

No Real Estate Agent service even if land sold not owned- the Tribunal held that assessee was not engaged in real estate agent service. It also held that in the absence of any defined consideration for alleged services there was no contract of service at all and hence no liability. [Premium Real Estate Developers v. Commissioner – Final Order No. 53322-53323/2018, dated 27-11-2018, CESTAT Del 

Area-based exemption Commencement of production – Effect of absence of particular plant- CESTAT Delhi has held that non-existence of DM/RO plant will not prove that cosmetics were not manufactured in a unit claiming area-based exemption. [Proveda Herbals v. Commissioner – Final Order No. 53292/2018, dated 16-11-2018, CESTAT Delhi]

Retrospective exemption when department failed to acknowledge merger before-  It held that certificate of single registration, though issued later, should be deemed to have been issued from the date of entitlement. [Vidyut Mettalics Pvt Ltd v. Commissioner – Order No. A/87857/2018, dated 6-11-2018, CESTAT Mumbai]

GST Compliance calendar – January 2019

January 2019
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5
6 7 8 9 10 11 (GSTR-1) 12
13 GSTR-6 14 15 16 17 18 19
20 GSTR-3B 21 22 23 24 25 26
27 28 29 30 31 GSTR-7 GSTR-8*

 

GSTR-1 Outward supply for the month of December 2018)
GSTR-6  Input service distributor for the month of December 2018
GSTR-3B  Summary return tax payment for the month of December 2018
GSTR-7 TDS  for Oct to Dec 2018
GSTR-8 TDS by e-commerce operator for Oct to Dec 2018

*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).

 With Warm Regards & Jai Hind

CMA Rakesh Bhalla, 9779010685, nancybhalla@yahoo.com

 Information source- M/s LKS, Nitya Tax Associates, Probability GST updates, PwC India Indirect Tax News Flash, cbic.gov.in and other sources-many thanks to all.

Author Bio

More Under Goods and Services Tax

2 Comments

  1. P J Joseph says:

    Reverse Charge Mechanism.
    Body corporate is not covered under RCM.
    Please clarify whether LLP falls under Body Corporate.
    OPC, Pvt Ltd etc falls under definition of Body Corporate.

Leave a Comment

Your email address will not be published. Required fields are marked *