Article

Is the time limit for filing TRAN-1 sacrosanct – Madras High Court adds a twist to the never-ending tale

By Sai Prashanth and V. Baratwaj

Question whether the time limit imposed on transitioning the credit into GST from the erstwhile regime is sacrosanct has now been decided by various High Courts and interestingly, not all of them have taken the same view. Recently the Madras High Court has held that the provision imposing time limit is intra vires the Central Goods and Services Tax Act, 2017 and is mandatory in nature. Analysing various unconsidered aspects in the decision, the authors believe that since there is difference between credit availment and credit transition, the Supreme Court decision in the case of Jayam and Co. cannot be relied upon. The authors also state that the reliance on the decision of Bombay High Court in Nelco was disputable and that following a strict approach would be hard on the assessees especially when the Transitional credit could be regarded as a right. The authors however note that the Madras High Court has specifically stated that the decision shall not affect dispensations granted by the department to transition the credit, whether by allowing filing of TRAN-1 form or otherwise...

Ongoing concerns on ‘Going concern’
By Surbhi Premi and Ayushi Singal

The second article in this issue of Tax Amicus attempts to explain when the transfer of a business should be treated as a ‘transfer of a going concern, as a whole or an independent part thereof’ which is an exempt supply under GST laws. The authors note that the transfer of business as going concern means transfer of essential business assets along with associated liabilities which enables the transferee to carry out the same business independently in the same manner as the seller used to carry before the transfer. They are also of the view that in order to constitute transfer as a going concern, the transferee must continue the same kind of business as carried on by the transferor for a foreseeable period of time and what constitutes to be “same kind of business” has to be considered on a case to case basis. According to the authors, in the backdrop of harlequin history of taxation of transfer of business, it would be interesting to see as to how GST on the same will unfold in the times to come...

Goods & Services Tax (GST)

Notifications and Circulars

• Nil GSTR-1 can be filed through short message service (SMS) from 01-07-2020

Ratio decidendi

• TRAN-1 – Rule 117 of CGST Rules is not ultra vires Section 140 of CGST Act – Time limit provided therein is mandatory – Madras High Court
• Demand – Rule 142(1)(a) of CGST Rules is valid – Gujarat High Court
• ITC available on steel structures used to install water slides – AAR Madhya Pradesh
• ITC not available on lift installed in hotel intended for providing taxable service – AAR Madhya Pradesh
• ITC of goods and services used in construction of commercial property on own account not available even when property subsequently used for renting – AAR Maharashtra
• Value of HSD supplied free of cost by service recipient, includible in value of supply – AAR Andhra Pradesh
• Marketing and consulting service in India for product of overseas clients is intermediary service and not export of service – AAR Andhra Pradesh
• Membership/subscription fees and admission fees collected by a club from members when not ‘supply’ – AAR Maharashtra
• Coal handling and distribution service liable @ 18% and not 5% as supply of coal – AAR Madhya Pradesh
• Accounting of salary cost for compliance under Companies Act, 2013, by the project office in India when not liable to GST – AAR Maharashtra
• UK VAT – Car hire and car seat hire are independent supplies and not covered as composite supply – UK First Tier Tribunal Tax Chamber

Customs

Notifications and Circulars

• Contactless Customs – Turant Suvidha Kendra and other initiatives by Customs
• All Industry Rates of Duty Drawback – Changes effective from 15-07-2020
• AEO Certification – Extension of validity
• Preferential Certificate of Origin for India’s exports to Vietnam under ASEAN-India FTA – Issuance of printed certificates as well
• Personal protection equipment (PPE) and masks – Export Policy revised
• Cut and polished diamonds - Extension of time limit for reimport facility with zero duty
• Power tillers and components – Import Policy revised to ‘restricted’
• Cut flowers – Import policy revised

Ratio decidendi

• Valuation – Import prices as per international journals on date of contract between related parties, acceptable – CESTAT Ahmedabad
• Amendment is retrospective if it introduces anything omitted by mistake in original provision – Calcutta High Court
• Warehouse keeper is custodian of warehoused goods – Rent to be paid to him from sale proceeds of auctioned goods as per priority under Section 150 – Kerala High Court
• BIS number wrongly embossed – Confiscation and penalty when not sustainable – CESTAT Chennai

Central Excise, Service Tax & VAT

Ratio decidendi

• Foreclosure charges on premature termination of loan are not liable to service tax – CESTAT Larger Bench
• Works Contract service – Scope of exclusion to construction of roads – CESTAT Bengaluru
• Multi-level car parking at airport is part of airport – Construction not liable under Works Contract service – CESTAT Bengaluru
• Refund of duty paid by EOU on exports when rebate claim denied – Madras High Court
• Provision of dedicated bandwidth by satellite company for up-linking and down-linking is not covered under Broadcasting service – CESTAT Delhi
• Commission/agency fees remitted to foreign entities for handling of vessels outside India not liable to service tax – CESTAT Delhi