prpri GST, Excise, Service Tax, Customs & VAT updates for June 2017 GST, Excise, Service Tax, Customs & VAT updates for June 2017

CMA Rakesh Bhalla

CMA Rakesh Bhalla
Past chairman NIRC of ICAI (CMA)*

Following are the important GST notifications issued by the CBEC given below:

IGST Notification No. 1 Rate Schedule under Integrated Goods and Services Tax Act,  2017
IGST Notification No. 2 Exempts inter-State supplies of certain goods
IGST Notification No. 3 Exempts inter-state supplies of services
IGST Notification No. 4 Concessional IGST rate for supplies to Petroleum Exploration and Production
IGST Notification No. 5 Reverse charge on certain specified supplies of goods under section 5 (3)
IGST Notification No. 6 Supplies of goods in respect of which no refund of unutilised input tax credit shall be allowed
IGST Notification No. 7 Refund of 50% of IGST on supplies to CSD under section 20
IGST Notification No. 8 Exemption from IGST supplies by CSD to Unit Run Canteens and supplies by CSD / Unit Run Canteens to authorised customers under section 6 (1)
IGST Notification No. 9 Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017
IGST Notification No. 10 Integrated Goods and Services Tax Rules, 2017
IGST Notification No. 11 Notify the number of HSN digits required on tax invoice
IGST Notification No. 12 Prescribe rate of interest under IGST Act, 2017
Notification No. 13 Rate Schedule under section 9 (1) of the CGST Act
Notification No. 14  Exempts goods notified under section 11 (1) of the CGST Act
Notification No. 15  Exempts services notified under 11 (1) of the CGST Act
Notification No. 16 Concessional CGST rate of 2.5% for supplies to Exploration and Production notified under section 11 (1) of CGST Act
Notification No. 17 Reverse charge on certain specified supplies of goods under section 9 (3) of the CGST Act
Notification No. 18 Supplies of goods in respect of which no refund of accumulated input tax credit shall be allowed under section 54 (3) of the CGST Act
Notification No. 19 Refund of 50% of CGST on supplies to CSD under section 55) of the CGST Act
Notification No. 20 Exemption from CGST supplies by CSD to Unit Run Canteens and supplies by CSD / Unit Run Canteens to authorised customers notified under section 11 (1) and section 55 of the CGST Act
Notification No. 21 CGST exemption from reverse charge upto Rs 5000 per day under section 11 (1) of the CGST Act
Notification No. 22 Exempting supplies to a TDS deductor by a supplier, who is not registered, under section 11 (1) of the CGST Act
Notification No. 23 CGST exemption for dealers operating under Margin Scheme notified under section 11 (1) of the CGST Act
Notification No.24 Rate Schedule under section 8 (2) of the Goods and Services Tax (Compensation to States) Act, 2017
Notification No.25 Corrigendum issued on 30th June, 2017
Circular No.26 Export Procedures

With the launch of GST at midnight of 30th June and 1st July, 2017, all the speculation about postponement of implementation of GST in India has been finally put to rest.

  • Certain provisions of CGST and IGST Act have already come into force and CGST Rules for Registration and Composition Levy have been notified, w.e.f. 22nd June 2017.
  • Certain notifications have been issued specifying territorial jurisdiction of Principal Chief Commissioners, Principal Commissioners, Chief Commissioners and Commissioners, and granting exemption from registration suppliers where tax is fully payable by the recipient w.e.f. 22nd June 2017.
  • Also, last date for filing GST returns has been relaxed for the first two months. Timelines for filing GST Returns for first two months will be as given below:
Month GSTR 3B GSTR 1 GSTR 2 (auto populated from GSTR 1)
July, 2017 20th August, 2017 1st -5th September, 2017 6th -10th September, 2017
August, 2017 20th September, 2017 16th-20th September, 2017 21st– 25th September, 2017

Also, no late fees and penalty will be imposed for the interim period.

  • It has been decided that provisions of TDS(Section 51 of CGST/SGST Act, 2017) and TCS(Section 52) will be brought into force later on.
  • Threshold limit for composition levy for manufacturers, traders and restaurant service providers in the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh has been enhanced to Rs. 50 lakh. However, threshold limit for composition levy for the State of Uttarakhand will be Rs.75 lakh. Also, limit for the State of Jammu & Kashmir is yet to be decided.
  • Composition scheme is not available for manufacturers of ice cream and other edible ice, pan masala and tobacco and manufactured tobacco substitutes.
  • Notification No. 01/2017- Integrated Tax Rate has been issued on 28th June, 2017 by the Central Government notifying the rate of Integrated Tax to be levied on inter-state supply of goods.
Goods Specified in Schedule of Act Rate of GST applicable
Schedule I 5%
Schedule II 12%
Schedule III 18%
Schedule IV 28%
Schedule V 3%
Schedule VI 0.25%
  • Central Government vide Notification No. 01/2017- Compensation Cess Rate, notified the rate of cess that shall be levied on the intra-State supplies or inter-State supplies of certain goods, the description of which is specified in the said notification. Compensation cess rate for TI 8702 10 is 15% – Motor vehicles for the transport of not more than 13 Persons including the driver.
  • Notification No. 20/2017 and 21/2017- Central Excise (NT) dated 30th June, 2017 has been issued by CG notifying provisions related to issuance of Credit Transfer Document (CTD) by a manufacturer who was registered under Central Excise Act, 1944 to a person who was not registered under the Central Excise Act, 1944 but is registered under the provisions of Central Goods and Services Tax Act, 2017 and is in possession of such manufactured goods held in stock on the such date.
  • CBEC vide Circular No. 26/2017- Customs, explained the Export procedure and procedure of sealing of containerized cargo.

– Export Procedures:

⇒ Export of goods or services or both is a zero rated supply under GST

⇒ Exporter has the option to claim refund as follows:

Option A-Export of goods or services under Bond or Letter of Undertaking without paying integrated tax (IGST) and claim refund of unutilized credit.

Option B-Export goods and services on payment of integrated tax (IGST) and claim refund of the tax paid.

Procedures under Option A Procedures under Option B
Goods and services to be exported under Bond or LUT Goods and services to be exported on payment of tax
Refund of unutilised ITC can be claimed by filing application Refund of output tax can be claimed


Drawback can be claimed

(Procedure prescribed only for transition period of three months )

– Sealing of export goods:

⇒ Two types of sealing prescribed:

1. Self-Sealing

2. Container stuffed and sealed at Container Freight Station / ICD

⇒ Sealing under the supervision of Department officer is dispensed with.

  • CBEC vide Notification No. 15/2017- Central tax provides for additional rules regarding Chapter XVII – Inspection, Search and Research, Chapter XVIII – Demands and Recovery, and Chapter XIX – Offences and Penalties.
  • Proof of Export changed from 6 months to 3 months under GST:
    • 15 days after the expiry of three months from the date of issue of the invoice for export, if the goods are not exported out of India;


    • 15 days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.
  • Government has assigned the officers, the functions as the proper officers in relation to the various sections of the Central Goods and Services Tax Act, 2017 or the rules made there under as per detail mentioned in the circular.

Refer Circular No. 3/3/2017 – GST F. No. 349/75/2017-GST Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs GST Policy Wing New Delhi, Dated the 5th July, 2017.

  • The government has said that manufacturers should intimate masses about any revision in MRP, Consumer Affairs Secretary Avinash Srivastava said.

In case the price of the pre-packaged commodity increases due to GST, manufacturers will have to publish advertisements to intimate masses about the MRP revision. Thereafter, manufacturers will have to promptly send sticker which has the new MRP to retail outlets where the commodity is sold, he added.

When GST reduces the price of a commodity, no advertisement is required. Manufacturers will only have to send stickers with revised prices, he added.

  • Passing of SGST bill by Jammu & Kashmir on 05th July 2017.


Circulars and Trade Notices Issued

PAN of entity to be used for IEC – In order to keep the identity of an entity uniform across various departments of the government, DGFT Trade Notice dated 12-6-2017 stating that in respect of new applicants, with effect from a notified date, applicant’s PAN would be authorized as IEC.

♣ CBEC has extended exemption from requirement of drawal of samples for the purpose of grant of drawback, to Authorised Economic Operators (AEO) holding Tier-I Certificate. [Circular No. 18/2017-Cus., dated 29-5-2017]

Manual filing of Bill of Entry – Procedure streamlined – According to the new procedure, registered manual Bill of Entry would be linked with a system generated challan for enabling electronic payment of Customs duty at the e-payment portal. The new procedure would be implemented from 15-6-2017 for all EDI formations. [CBEC Instruction No. 6/2017-Cus., dated 2-6-2017]

Exemption – Production of Certificate of Origin after filing of B/E, not fatal– CESTAT Chandigarh has allowed refund claim of excess duty paid by the importer in a case where the importer produced Certificate of Origin in the prescribed format only at a later point of time, i.e. after filing Bill of Entry. [Okaya Power Ltd.v. Commissioner–Order dated 12-4-2017 in C/50618/2015, CESTAT Chandigarh]

Refund –Proof of absence of unjust enrichment in case of exports – Bengaluru Branch of the CESTAT has allowed the appeal filed by the assessee in a case involving exports where the department had denied refund alleging unjust enrichment. [Dream Logistics Company India Pvt. Ltd.v.Commissioner-2017-TIOL- 1918-CESTAT-BANG]

Observing that for proving the value to be wrongly declared, independent evidence is required, CESTAT Delhi has held that mere reference to NIDB data is not sufficient. The Tribunal held that enhancement of value was not justified. [Aakash Enterprises v. Commissioner-2017-TIOL 1930 CESTAT-DEL]

Opinion of examiner not enough to establish mis-declaration – Mumbai Bench of the CESTAT has held that only because the examiner had opined that the goods were serviceable, though they were old and used, it cannot be said that there is mis-declaration as the importer had mentioned the goods as ‘unserviceable’. [Bombay Marine Enterprises v. Commissioner-Order dated 7-4-2017 in Appeal No. C/1003/08, CESTAT Mumbai]

No penalty under Customs Section 114 on CHA for lapses in verification of exporter. 

 [Dev Raj Vermani v. Commissioner -2017 (349) E.L.T. 750 (Tri. –Del.)]

Scrap – Exemption under Notification No. 20/99-Cus. – Conditions  CESTAT Bangalore has held that exemption is available to scrap even when same is charged in basic oxygen furnace, in case the liquid metal there from is later charged into the electric furnace.

[Jindal Vijayanagar Steels Ltd. v. Commissioner -Final Order No. 20809-20811/2017, dated 1-6-2017, CESTAT Bangalore] 

Barges not having capacity to navigate not classifiable under Heading 8901 CESTAT Bangalore has held that dumb barges, not having any means of propulsion such as engine and are required to be pulled in the sea by tug, would not be classifiable under Heading 8901 but under Heading 8905 as floating cranes, considering the fact that they had cranes fitted on them. [Adani Enterprises Limited v. Commissioner-2017-VIL-483-CESTAT-BLR-CU] 

Wires of Nickel Alloy covered under phrase “nickel and articles of nickel” – In a case involving import of wires of nickel alloy, CESTAT Mumbai has allowed benefit of Notification No. 21/2002-Cus. (Sl. No. 483), which granted concessional rate of duty to Nickel and articles of Nickel. [A.J. Corporation v. Commissioner -2017 (349) E.L.T. 778 (Tri. –Mumbai)]


♣ Availability of exemption notification – Appeal not maintainable before High Court – In a dispute involving availability of exemption Notification No. 50/2003-C.E., the High Court of Uttarakhand has dismissed the appeal filed by the Revenue department after holding the same to be non-maintainable before the High Court. [Commissioner v. Tirupati LPG Industries Ltd.– Judgement dated 5-4-2017, Uttarakhand High Court]

Valuation – Non-inclusion of part of advertisement cost incurred by dealer.

[Ford India Pvt. Ltd. v. Commissioner-2017-VIL-497-CESTAT-CHE-CE]

Andhra Pradesh and Telangana High Court has held that – Refund of excess duty by payment to bank towards discharge of loan, and not in Cenvat account, if assessee a sick company under Sick Industrial Companies (Special Provisions) Act, 1985.  [Victory Transformers and Switchgears Ltd. v. Commissioner-2017 (349) ELT 422 (A.P.)]

♣ Area based exemption not deniable when only portion of boundary wall of factory extended to unspecified Khasra  The assessee was availing benefit of Notification No. 50/2003-C.E. where units present in specific Khasra nos. were exempted from Central Excise duty. The factory was in exempted area however the boundary wall fell in unexempted area.

[Diamond Entertainment Technologies Pvt. Ltd. v. Commissioner-2017 (349) ELT 481 (Tri.-Del.)]

Gujarat High Court has held that Remission of duty not available if procedure prescribed under CBEC Manual on Supplementary Instructions not followed.

[Sun Pharmaceuticals Industries Ltd.v. Commissioner–2017 (349) ELT 442 (Guj.)]

CESTAT Delhi has held that – Milk treat containing cocoa butter and not cocoa classifiable under TI 1905 32 19  and not under TI 1905 32 11 of the Central Excise Tariff.

[Cadbury India Limited v.Commissioner-2017-VIL-518-CESTAT-DEL-CE]

Exemption to products made up of cotton available to full tent including value of non-cotton parts. [Commissioner v.AR Polymers Pvt. Ltd.-2017 (349) ELT 645 (Tri-All.)]

♣ CESTAT Mumbai has held that –  No interest payable in the absence of duty liability even when duty paid on being convinced by Department. 

[Nicholas Piramal (India) Ltd. v.Commissioner–Order dated 16-3-2017 in Appeal No. E/3103/06-Mum, CESTAT Mumbai]

Payment of duty on net quantity, after deducting value of goods received back during month, correct.

[Commissioner v.Ispat Industries Ltd.–Order dated 3-4-2017 in E/2420/06, CESTAT Mumbai]

♣ Pre-deposit for preferring second appeal to Tribunal required over and above pre-deposit made for first appeal under Section 35F of Central Excise Act, 1944 and Section 129E of Customs Act, 1962. [In Re: Quantum of Mandatory Deposit-2017 (349) ELT 477 (Tri.-LB)]

♣ Recovery of dues on the basis of lease agreement for one of the properties of arrears holder, not sustainable – CESTAT Delhi has held that simply entering into a lease agreement with reference to one of the properties of the arrears holder will not make the assessee liable for any Central Excise duty arrears standing in the name of the owner of the land-lessor.

[Flexituff International Limited v.Commissioner-2017-VIL-488-CESTAT-DEL-CE]

Service Tax

Purchase of foreign exchange on own account for ultimate transfer to customers not covered under foreign exchange broking. The assessee was held not to be liable to service tax for the period upto 15-5-2008. [Commissioner v.Thomas Cook (I) Ltd.-2017-VIL-490-CESTAT-DEL-ST]

♣ CESTAT Delhi has held that putting up and managing gas storage facility do not fit in the scope of infrastructural support service under Support Services of Business or Commerce. The assessee was discharging VAT considering the transaction as sale.

[Air Liquide North India Pvt. Ltd. v. Commissioner –Final Order Nos. 53734-53737/2017, dated 8-6-2017, CESTAT Delhi]

Leasing of equipment and facilities covered under BSS.

[Indo Hong Kong Industries Pvt. Ltd.  v. Commissioner-2017-TIOL-1829-CESTAT-DEL] 

Exemption to health care services by clinical establishments – Scope – Naturopathy services for various types of ailments are eligible for the benefit of Notification No. 25/2012-S.T. (Sl. No. 2) under health care services by clinical establishments.

[Manthena Satyanarana Raju Charitable Trust v.Union of India-2017-VIL-288-AP-ST]

New Delhi Bench of the CESTAT has held that Construction of independent houses as part of larger number of houses sharing common facilities, not covered under Construction of Residential Complex service.

[Hari Narain Khandelwal v. Commissioner-2017-TIOL-1932-CESTAT-DEL] 

Consideration received for sale of air tickets purchased from another travel agent not covered under BAS.

[Trade Wings Ltd. v. Commissioner–2017 (52) ELT 149 (Tri. –Del.)]

Threshold exemption –Computation of aggregate value – Only net value to be Considered – CESTAT Allahabad has held that for computation of aggregate value under Notification No. 6/2005-S.T. (small scale exemption), only the net value received, i.e. after the abatement under Notification No.1/2006-ST, is to be considered. Notification No. 1/2006-ST, exempted 60% of the gross receipts towards the service of Rent-a-Cab.

[Neelam Singh v. Commissioner-Final Order No. 70390-70391/2017, dated 13-2-2017, CESTAT Allahabad] 

♣ In rule 7(2), Return for the period from 1st April to 30th June, 2017, shall be submitted by the 15th day of August 2017, in Form ‘ST-3’ or ‘ST-3C’ as the case may be and in Rule 7B (1), Revised return shall be submitted within a period of forty five days.


Haryana Alternative Tax Compliance Scheme for Contractors, 2016 –Amendments – Vide Notification No. 17 /ST-1/ H.A. 6/2003/S.59A/2017dated 2nd June, 2017, the Haryana Alternative Tax Compliance Scheme for Contractors, 2016 has been amended as follows:

West Bengal Tax on Entry of Goods into Local Areas Act, 2012 – Amendments in West Bengal Sales Tax (Settlement of Dispute Act, 1999) for settlement of disputes – for waiver of interest, late fee and penalty under the Entry Tax Act for disputes pertaining to any period ending on or before the 31st March, 2017, as per West Bengal Taxation Laws (Amendment) Act, 2017 with effect from 2nd June, 2017,

  • It is applicable to any dealer or importer.
  • Settlement shall be made by payment of 100% of the entry tax in dispute or the actual amount paid in respect of the arrear tax in dispute, whichever is higher.
  • The procedure for settlement has been provided in Trade Circular No. 03/2017 dated 5-6-2017. The application is to be submitted in the prescribed form on or before 30th June, 2017, to the specified officers.

Appy Fizz classifiable as fruit juice based drink and not as aerated soft drink– Supreme Court has held the product ‘Appy Fizz’ to be classifiable as ‘fruit juice based drink’ under Entry 71 of the notification issued under Section 6(1)(d) of Kerala VAT Act and not under Section 6(1)(a) as ‘aerated branded soft drink’. [Parle Agro (P) Ltd. v. Commissioner-2017-VIL-20-SC]

*Member ZAC Chandigarh, Service Tax, Govt. of India, Member RAC Chandigarh, Central Excise & Customs, Member Indirect Tax committee SIAM , Member, ASSOCHAM Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd. , Winner Achiever  Award 2015 By ICAI (CMA) 

Information source- M/s LKS, M/s Nitya tax Associates, Economic Times, Financial express, and other sources-many thanks to all.

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