Article

Evolving EV ecosystem in India

By Brijesh Kothary and Amber Kumrawat

The article in this issue of Tax Amicus highlights the changes in entries relating to electric vehicles (‘EV’) and their probable impact on the EV ecosystem in India. Elaborately discussing the amendments made by a notification issued as part of Budget 2022 proposals, the authors point out that though there is no change in the rate of duty, the changes carried out in the description in context of the form and the manner in which the goods are to be imported is likely to cause muddle among the industry and the field formations. They, in this regard, discuss the meanings of phrases ‘incomplete or unfinished’, ‘knocked down kit’, ‘individually preassembled’ and ‘interconnected with each other’, and point out how certain clarifications are required. Further, according to them, the explanation inserted now also raises a fresh need to define which parts, components or sub-assemblies contained in an EV kit provides ‘essential characteristics’ to it...

Goods & Services Tax (GST)

Ratio decidendi

• No presumption of tax evasion on expiry of e-way bill due to reasons beyond control – Supreme Court
• No penalty under Section 73 when excess credit transitioned but reversed after SCN before utilisation – Madras High Court
• Blocking of electronic credit ledger does not amount to provisional attachment of property – Post decisional hearing to be granted and reasons to be mandatorily recorded in writing – Bombay High Court
• Electronic credit ledger cannot be blocked when credit balance is nil – Insertion of negative balance by proper office also not correct – Gujarat High Court
• Proceedings initiated by Revenue department under GST also attract embargo contained in Section 14 of IBC – Karnataka High Court
• Confiscation – A person cannot be held liable for contravention of provision of law by another person in supply chain – Punjab and Haryana High Court
• Power to issue summons – Section 70 of CGST Act constitutionally valid – Rajasthan High Court
• Renting of residential premises as hostel for students and working professionals – Exemption available – Karnataka High Court
• Membership fees, annual subscription and annual games fee collected by club from members is liable to GST – Maharashtra AAR
• Sale of developed plots along with common facilities is liable to GST – Gujarat Appellate AAR
• Blocked credit – ITC when not available on agreeing to give away leasehold rights – Tamil Nadu Appellate AAR
• Inspection services for foreign clients in respect of equipment in India is not export of service – Telangana AAR
• No GST payable on recoveries from employees for provision of canteen and bus transportation facilities; No GST payable on notice pay recoveries from employees not serving full notice period – Maharashtra AAR

GST/VAT outside India

• Turkey – 1% VAT applicable on foodstuff in general with effect from 14 February 2022
• EU VAT – Opening of individual files setting out clinical history, exempt as medical care

Customs

Notifications and Circulars

• Scrip based FTP Schemes – Last date for submitting applications extended to 28 February 2022
• New ITC(HS) 2022 for Import Policy notified – Import of drones in CBU/CKD/SKD form prohibited with certain exceptions
• Human hair – Exports restricted with effect from 25 January 2022
• Syringes – Export restrictions removed with effect from 31 January 2022
• Calcined Pet Coke for aluminium industry and Raw Pet Coke for CPC manufacturing industry – Procedure for allocation of quota notified

Ratio decidendi

• Refund – Expression of protest itself is payment under protest – CESTAT Ahmedabad
• Loading of goods on board without LEO – Failure not attributable to exporter – CESTAT Mumbai
• SFIS – DGFT Policy Circular No. 27 of 2007 is clarificatory but not retrospective in nature – Bombay High Court
• Videography of interrogation permissible at the cost of summoned person – Bombay High Court
• Valuation – Commercially interchangeable goods must be of the same commercial level and substantially same quantity – CESTAT Mumbai
• Illegal bringing of vessel in India by the crew, without knowledge of owner, is not import – Kerala High Court

Central Excise, Service Tax & VAT

Ratio decidendi

• No service tax on notice pay received/recovered from employees for premature resignation – CESTAT New Delhi
• Expenses incurred by head office for overseas branch offices is not for any service received from branch offices – CESTAT Bengaluru
• Cenvat credit on medical insurance policy for employees opting for VRS – Issue of interpretation of Cenvat Rule 2(l) referred to Larger Bench – CESTAT Mumbai
• Refund of duty at time of debonding, when goods finally exported by DTA unit – Rajasthan High Court
• Interest on loans, collected and accounted in any manner, is not liable to service tax – CESTAT Bengaluru
• ‘Premium‘ or ‘salami‘ whether can be subjected to service tax under ‘renting of immovable property service‘ – Issue referred to Larger Bench – CESTAT New Delhi