Article

Classification of indigenous ‘Rab’ prepared from sugar cane: The final decision

By Brijesh Kothary, Rohan Karia and Shradha Pandey

The issue of classification of the product ‘Rab’ (semi-solid sugarcane juice) and applicable rate of tax on its supply has been a subject matter of dispute for a long time. The article in this issue of Tax Amicus intends to highlight the divergent practices followed by the industry and analyse if the CBIC Circular No. 189/01/2023-GST, dated 13 February 2023 has resolved the issue in entirety. Elaborately analysing the issues and concerns with the existing (prior to the Circular) classification, the article also discusses the recommendations of the recent 49th GST Council Meeting on rate of tax of the said commodity. It also notes that the GST Council has decided to regularize the payment of GST on ‘Rab’ during the past period on ‘as is basis’. According to the authors, it would be interesting to look out for the additional clarifications regarding the applicability of exemptions to ‘Rab’ and the benefits for the industry.

Goods and Services Tax (GST)

Notifications and Circulars

• GST Council’s 49th Meeting – Highlights

Ratio decidendi

• No provision to ‘resume’ assets – High Court directs return of cash taken, and not seized, from assessee – Delhi High Court
• Vouchers are neither goods nor services, and are not liable to GST – Karnataka High Court
• Show cause notice issued in a format without striking out irrelevant particulars violates natural justice – Jharkhand High Court
• Extension in deadline for filing of ITC-01 permissible even in case of individual taxpayer – Jharkhand High Court
• Budgetary scheme – Area-based exemption notification ‘availed’ when duty paid under protest before 1 July 2017 – Delhi High Court
• Detention of goods during transit – ‘Intention to evade’ not required for imposing penalty under Section 129 – Punjab & Haryana High Court
• Personal hearing mandatory even if ‘No’ selected by assessee against the option for personal hearing – Allahabad High Court
• No RCM liability of SEZ unit on service received from SEZ Developer or from a DTA unit – Maharashtra Appellate AAR
• Tissue culture activity not same as agriculture – GST liable on supply of manpower to horticulture department – Karnataka AAR
• Catering service to pre-university college is not liable to GST – Karnataka AAR
• Works contract service supplied to Railways – GST liability – Karnataka AAR

Customs

Notifications and Circulars

• Transhipment of Bangladesh export cargo to third countries allowed through Delhi Air Cargo
• High-risk food products can be imported only through specified 79 ports w.e.f. 1 March 2023
• Toys import – Requirement of compliance of BIS standards clarified
• Paper Import Monitoring System clarified

Ratio decidendi

• Refund – Limitation – Filing appeal against enhancement of value, while paying duty, is protest payment – Delhi High Court
• MEIS – Non transmission of amended shipping bills to DGFT server – High Court directs customs and DGFT to find solution – Bombay High Court
• SFIS – Benefit of enhanced rate of 10% also available during period 1 April 2009 till 26 August 2009 when revised FTP was announced – Madras High Court
• Advance authorisation – Use of inputs in another unit of the assessee is permissible – Bombay High Court
• Reimport of rejected goods which are prohibited for import, when freely importable – CESTAT New Delhi
• Re-assessment under Section 17(5) after clearance for home consumption, is wrong – CESTAT New Delhi
• Power pack capable to generating electricity, storing it, and supplying to various electrical devices is classifiable as accumulator – CESTAT New Delhi

Central Excise, Service Tax & VAT

Ratio decidendi

• Sabka Vishwas (LDR) Scheme – Interest deposited can be treated as ‘any amount paid’ – Bombay High Court
• Sabka Vishwas (LDR) Scheme benefit available when no final hearing done after remand to adjudicating authority – Calcutta High Court
• Refund of service tax on exports available even when shipping bills and bills of lading not in name of assessee – Orissa High Court
• Cenvat credit – Use of higher value product for manufacture of lower value goods, not material – CESTAT Kolkata
• Adjustment of service tax to be made in the ‘succeeding’ month/quarter – ‘Succeeding’ means ‘next’ – CESTAT Mumbai
• No interest when NCCD not deposited in time due to glitch on portal – CESTAT New Delhi