Article

New Rule 88B providing for manner of calculating interest – Susceptible to challenge?

By Sahana Rajkumar and Balaji Sai Krishnan

Recently, the Central Goods and Services Tax Rules, 2017 have been amended to introduce a new Rule 88B, retrospectively with effect from 1 July 2017. The Article in this issue of Tax Amicus intends to analyze the nuances of this new Rule and the implications arising therefrom. The article states that now the benefit of paying interest on the net cash component has been restricted to cases only where there is a delay in filing the return in Form GSTR-3B. It notes that even if the proviso appended to Section 50 of the Central Goods and Services Tax Rules, 2017 is read in a strict manner to only apply to cases where there is delay in filing returns, prior to insertion of Rule 88B, there was no explicit condition in the main Section 50(1) which required tax to be paid on the gross tax liability. According to the authors, since the condition has been introduced retrospectively it shows that the Rule is introducing a restriction that did not explicitly exist prior to introduction of the amendment and therefore, the vires of Rule 88B is susceptible to challenge...

Goods & Services Tax (GST)

Notifications and Circulars

• E-invoice – Threshold limit to be decreased from INR 20 crore to INR 10 crore
• Arrests not to be made in routine and mechanical manner – CBIC lays down guidelines
• Summons under Section 70 of CGST Act – CBIC lays down guidelines

Ratio decidendi

• Tran-1 and 2 – GSTN directed by Supreme Court to open common portal for availing transitional credit – Supreme Court
• Blocking of electronic credit ledger – Availability of balance in credit ledger, not required – Calcutta High Court
• Confiscation – No provision in Section 130 which prohibits interim release – Kerala High Court
• Provisional attachment – SC decision on limitation does not extend time-frame under Section 83 – Delhi High Court
• Interest for delayed refund – SC decision on limitation does not extend limitation for processing refund claims – Delhi High Court
• Search and seizure – Section 129 cannot be invoked to search godown premises – Allahabad High Court
• Seizure of goods and conveyance in transit – Appeal can be filed even if payment opted under Section 129(1)(a) – Kerala High Court
• Appeal under Section 107 of CGST Act – Provisions of Limitation Act are not applicable – Chhattisgarh High Court
• Supply of services to local authority – Relationship must between pure service provided and functions discharged by Municipality – Telangana AAR
• Providing space to advertisers on e-commerce website is classified under Heading 9983 – Karnataka AAR
• Toll charges paid by service provider and subsequently reimbursed by service recipient, are includible in the value of supply – Tamil Nadu AAR
• Healthcare services provided to ‘in-patients’ in hospitals constitutes composite supply while that provided to ‘out-patients’ is not composite supply – Tamil Nadu AAR

Customs

Notifications and Circulars

• Arrest and prosecution in Customs offences – CBIC revises thresholds
• Passenger Name Record Information Regulations, 2022 notified – Aircraft operators to share passenger name record information with Customs
• Rules of Origin to prevail over CAROTA Rules
• Rice exports to Europe – Date of requirement of certificate of inspection for exports to other than specified countries, postponed
• Non-ferrous Metal Import Monitoring System (NFMIMS) – Advance registration not required – DGFT also clarifies various issues

Ratio decidendi

• SEIS benefits available even when no valid IEC number held at time of export of services – Bombay High Court
• Aircraft imports – Non-scheduled (passenger) operator can carry out charter services and still be eligible for exemption under Notification No. 21/2002-Cus. – CESTAT Larger Bench
• Customs have no jurisdiction in case of alleged violation of FTP and FEMA – CESTAT Ahmedabad
• Demand – Limitation – Date of dispatch of notice and not date of its receipt relevant – Madras High Court
• Rectification of error under Section 154 when assessment order not following SC decision – CESTAT Kolkata
• Conversion of shipping bill from Drawback to Advance licence – Surrendering drawback amount is as good as not availing – CESTAT Ahmedabad

Central Excise, Service Tax & VAT

Ratio decidendi

• No service tax on composite works contract prior to 2007 changes – Supreme Court rejects plea to reconsider decision in Larsen and Toubro Ltd. – Supreme Court
• No intention to evade if Cenvat credit available of tax to be paid – CESTAT Chandigarh
• Classifying services under incorrect head is not fraud or wilful misstatement – CESTAT New Delhi
• Demand of service tax under Section 73A(2), and non-inclusion of expenses for training of insurance agents – CESTAT Mumbai
• Sabka Vishwas (LDR) Scheme – Deposit made during enquiry/investigation is to be deducted after extending benefit of Scheme – Jharkhand High Court
• Sabka Vishwas (LDR) Scheme – Date of audit and not date of MoM is the date of quantification of tax dues – Bombay High Court
• Consultant gives ideas and not performs task himself – Activity of mediator is not covered under Management Consultant Service – CESTAT Kolkata
• Relays for railway signalling equipment classifiable under Heading 8608 – Supreme Court dismisses Review Petition against the Westinghouse Saxby Farmer case – Supreme Court
• Service of fitment of wig is incidental to the sale of wig – Madras High Court