Article

GST on services provided in the course of employment

By Brijesh Kothary and Amber Kumrawat

Employers often arrange for various facilities such as transportation, canteen, healthcare, insurance, for their employees. These facilities which are supposed to be utilized by the employee during the course or furtherance of employment are provided mainly free of charge, but in some cases, employer recovers a very nominal amount from his employees towards the said facility. The article in this issue of Tax Amicus discusses the questions as to whether the said facilities arranged by the employer amount to supply of services and whether GST is applicable on the nominal amounts recovered from the employees. The author traces the history of the controversy, right from the service tax regime to the recent divergent Rulings by the AARs and the CBIC 2017 Press Release. According to him, the terms of contract or employment plays a crucial role in determining the taxability of perquisites in the hands of the employer.

Goods & Services Tax (GST)

Notifications and Circulars

• Dynamic QR Code for B2C invoices – No penalty for non-compliance between 1 December 2020 to 31 March 2021

Ratio decidendi

• E-way Bill validity not relevant at the time of unloading – Karnataka High Court
• No detention on ground that value mentioned in delivery challan to job worker mis-matched with value mentioned in e-way bill from job worker – Kerala High Court
• ITC on promotional material given to franchisees and retailers – Karnataka AAR
• Job work of fabrication and transportation to site and works contract of applying paint at site, covered as mixed supply – West Bengal AAR
• Online testing involving human evaluators when covered under OIDAR services – Karnataka Appellate AAR
• Sale of undivided share in property received under JDA when not liable to GST – Karnataka AAR
• Import of services when foreign company providing services though invoices raised through branch in India – West Bengal Appellate AAR
• Classic Malabar parotta and whole wheat Malabar parotta are classifiable under Heading 2106 – Kerala Appellate AAR
• EU VAT – Deduction of input VAT on consultancy services for acquiring shares permissible even where acquisition not took place – Court of Justice of the European Union

Customs

Notifications and Circulars

• Faceless assessment – Mandatory uploading of supporting documents in e-Sanchit w.e.f. 15 January 2021
• COO issued with third party invoicing, under DFTP Scheme for LDC, for ‘wholly obtained goods’, acceptable
• AEO T1 and T2 accreditation – Compliance and security requirements for MSMEs relaxed
• Crude palm oil – BCD reduced
• Gems and Jewellery export permissible through courier mode
• •Providing documents sought by investigating agencies like CBI, EDI, DRI etc. – Heads of Regional Authority to now decide

Ratio decidendi

• Drawback – Limitation for SCN under Drawback Rules, 1995 and saving of SCNs, for earlier period, issued after Drawback Rules, 2017 – Supreme Court stays Punjab & Haryana High Court decision
• Detention of imported goods without affecting seizure is illegal – Bombay High Court
• Seizure for overvaluation of exports – Valuation provisions to be considered at stage of confiscation and not seizure – CESTAT New Delhi
• Interest for delayed refund – Relevant date is date of refund application – CESTAT Hyderabad
• Redemption of confiscated goods – No condition of re-export envisaged under Customs Act – Madras High Court
• Seizure – Reason to believe liability for confiscation is sine qua non – Bombay High Court
• Appeal provision provided in subordinate legislation cannot supplant or curtail appellate remedy available under Customs Act – Bombay High Court

Central Excise, Service Tax & VAT

Ratio decidendi

• Commission paid to whole time directors not liable to service tax under reverse charge mechanism – CESTAT Kolkata
• Phrase ‘gas-based products’ also includes goods in form other than gas – CESTAT Kolkata
• Sabka Vishwas (LDR) Scheme – Quantification of tax amount – Statement recorded during investigation – Bombay High Court
• Brand promotion v. promotion of product – Service tax when not liable under BAS – CESTAT Kolkata