Article

Arbitrary relief in GST compliances for taxpayers

By Arushi Jain

Elaborately discussing various recent notifications issued by CBIC, the first article in this issue of Tax Amicus states that even though the Government has brought in various relief measures for the taxpayers, the same are not free from arbitrariness. According to the author, even though the Government has relaxed the compliance in terms of filing of GSTR-3B, the same would entail working capital outflow in the hands of large taxpayers as they will not be able to utilise the input tax credit. Further, in respect of recent notification issued for relaxing provisions of CGST Rule 36(4), the article raises the question of interest liability in case the tax payer utilises ITC in excess of the amount cumulatively arrived. The article also notes that though Circular No. 137/7/2020-GST clarifies that the due date for deposit of TDS amount has been extended, there is no clarification in respect of deposit of TCS liability. Finally, the author also raises the question as to whether the reduced rate of interest of 9% introduced recently would also be applicable to ITC reversals under CGST Rule 42 and Rule 43. The author believes that it is imperative that the Government addresses the aforesaid problems to allow effective implementation of the measures...

Well begun is half done – Examining adequacy of initiatives by Commerce Ministry providing reliefs under FTP
By Nupur Maheshwari and Raghav Khurana

The second article in this issue of the newsletter while capturing the significant recent changes introduced in the Foreign Trade Policy 2015-20 and the Handbook of Procedures 2015-20 and other relief measures introduced by the Government, also highlights the adequacy of such measures. The authors elaborately discuss in this regard the reliefs granted under MEIS and SEIS and suggest that Government should consider extending the benefit in cases where the exporter gets an irrevocable Letter of Credit issued in their favour from the foreign party and introduce a provision similar to the provision for recovery of drawback in cases where the export proceeds are not realized. Further, the article points out that while the authorization holder (advance authorisation or EPCG) with EO period expiring on 31-07-2020 would get an automatic extension, the authorization holder with EO period expiring one day later, i.e. on 01-08-2020, would not be eligible for the automatic extension and will have to pay composition fee also. The authors suggest that it would have been more prudent to allow the EO extension for all AA and EPCG authorizations, since the present situation is akin to a ban on the export product...

Goods & Services Tax (GST)

Notifications and Circulars

• GSTR-3B for May 2020 – Last date extended
• Relief measures due to COVID-19 – Clarifications
• Refund of GST in various circumstances – Clarifications

For GST Acts, GST Rules and Notifications (Central and States), Circulars, Press Releases and Notes, please use Knowledge tab in www.gst.lakshmisri.com

Ratio decidendi

• Demand notices issued to successful resolution applicant in respect of company taken over, when not correct – Rajasthan High Court
• Intra-State supply when goods imported at port located in different State, but supplied to customer in State of location of importer – AAR Karnataka
• Exchange rate of imported goods applicable for goods supplied in India against payment in foreign currency – AAR Uttarakhand
• Transfer of under-construction project is transfer of going concern and exempted from GST – AAR Uttarakhand
• Service rendered by Director to company for which consideration paid in any head, liable to GST – AAR Rajasthan
• ITC on goods/ services procured for installation of certain plants or machinery when not available – AAAR Karnataka
• Maintenance service to housing societies with different contract with residents to supply water – AAR Rajasthan
• UK VAT - Supply of “action day planner” is not zero-rated as supply of books - UK’s Upper Tribunal (Tax and Chancery Chamber)
• EU VAT – Secondment of director to subsidiary – Payment of ‘consideration’ even when costs merely reimbursed – Court of Justice of the European Union
• UK VAT – Sale of second-hand repossessed car by finance company is not covered under Margin Scheme – UK’s Upper Tribunal (Tax and Chancery Chamber)

Customs

Notifications and Circulars

• Ventilators, PPE, masks and COVID-19 testing kits - Exemption from BCD and health cess
• Advance Authorisation, EPCG and EOUs - Extension of exemption from IGST and Compensation Cess
• Regional Authorities can institute or continue proceedings under FT (D&R) Act, 1992 against companies/firms facing proceedings under IBC
• Customs clearance - Acceptance of undertakings in lieu of Bonds
• RFID Sealing for goods transported for deposit or removal from Customs bonded warehouse again deferred
• FTAs - Provisional clearance where original Certificate of Origin is not furnished
• Electronic filling and issuance of Preferential Certificate of Origin (CoO) for exports made under various FTA’s/ PTA’s
• Retrospective issuance of COO under India’s Trade Agreements
• Paperless customs clearance facility launched
• Foreign Trade Policy extended till 31-3-2021 – Last dates for various obligations relaxed
• Registration cum Membership Certificate (RCMC) - Extension of validity
• Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme - Manner of rollout from MEIS
• One-time condonation under EPCG Scheme - Extension till 31-03-2021
• SIMS - Validity of automatic registration number extended by 60 days

Ratio decidendi

• Revocation of Customs Broker licence - Doctrine of waiver applicable where limitation period is voluntarily foregone – Madras High Court
• No time limit prescribed in law for seeking amendment of Bill of Entry – CESTAT Ahmedabad
• Date of filing of Bill of Entry is not date of import – CESTAT Ahmedabad
• Foreign going vessel – Engagement of vessel in entirety to be considered – CESTAT Bengaluru
• Valuation – Price at which goods sold after import when not relevant – Court of Justice of the European Union
• Self-heating patches and belts classifiable under Heading 3005 and not under 3824 – Court of Justice of the European Union

Central Excise, Service Tax & VAT

Ratio decidendi

• Area-based exemption – Notifications issued in 2008, restricting refund, not hit by doctrine of promissory estoppel and are clarificatory in nature – Supreme Court 3-Judge Bench
• Cenvat credit of duty paid in excess as per final assessment, admissible – CESTAT Ahmedabad
• Discount given for non-provision of certain service to foreign buyer is not liable under BAS – CESTAT Delhi
• Cenvat credit on common input services enumerated under Cenvat Rule 6(5), also used in trading – Numerator and denominator in formula under Cenvat Rule 6(3A) – CESTAT Mumbai
• BSS – Services provided by representative office outside India – CESTAT Delhi
• Medical Oxygen IP and Nitrous Oxide IP are covered under Entry 88 of Schedule IV of AP VAT Act as drugs and medicines – Supreme Court