Article

GST Council’s unbalancing act on a tightrope!

By Brijesh Kothary

The decisions of the GST Council’s 40th Meeting have failed to cheer the industry as the GST Council merely announced procedural relief rather than substantive measures to boost the demand and revive the economy. The representations made by large tax payers, who contribute approximately 95% of GST revenue, particularly from tourism, travel, hospitality and real estate sectors, were not even taken up. Listing out few steps taken by the Council recently to curb evasion and improve tax collection, the author states that though the intention was to restrict bogus transactions, they have adversely impacted genuine taxpayers by curtailing their rights. According to the author, as we complete three years under the GST regime, it is time for the Council to introspect if we are moving in a right direction. The article concludes by stating that the GST Council is, thus, faced with a humongous responsibility of treading on a tightrope and performing a balancing act...

Rejection of transaction value – Overcoming practices of the department

By Ratan Jain and Noyanika Batta

The second article in this issue of Tax Amicus elaborately discusses various issues pertaining to rejection of transaction value by the department. The authors note that though Rule 12 of the Customs Valuation Rules, 2007 gives an option to the department to reject the transaction value, in majority of the cases, the department fails to consider common business reasons such as marketing and discount practices for importers submitting a lower declared value than what Customs might expect based on the information of customs valuation databases. According to the authors, the misuse of databases leads to delays, uncertainty and higher trade costs for businesses. The article finally suggests changes that can be brought about by the Indian Customs to ensure higher quality of the recorded import data, and steps for importers in case of arbitrary rejection of declared value...

Goods & Services Tax (GST)

Notifications and Circulars

• GSTR-1 – Waiver of late fee for delayed submission of GSTR-1 – Time period extended
• GSTR-3B – Manner of calculation of interest relaxed
• GSTR-1 – Verification through Electronic Verification Code – CGST Rules amended
• Nil GSTR-3B can be filed through short message service (SMS) w.e.f. 08-06-2020
• E-way Bills – Extension of validity till 30-06-2020
• Refund of accumulated ITC where invoice details not reflected in GSTR-2A clarified
• GST liability on director’s renumeration clarified
• Construction of residential apartments – Form for GST payment on shortfall value of inward supplies from registered supplier

For GST Acts, GST Rules and Notifications (Central and States), Circulars, Press Releases and Notes, please use Knowledge tab in www.gst.lakshmisri.com

Ratio decidendi

• TRAN-1 – Delhi High Court decision in Brand Equity stayed – Supreme Court
• Proceedings for recovery of interest cannot be initiated without adjudication – Jharkhand High Court
• National Centre for Biological Sciences not a ‘Government Entity’ – Works Contract service provided thereto liable to 18% GST – AAR Karnataka
• Ex-factory inter-State supply liable to IGST – AAR Telangana
• Online test at test centre under supervision of invigilator covered under OIDAR services – AAR Karnataka
• Merchant trade – GST payable on sale outside India when goods shipped directly from vendor outside India – AAR Gujarat
• Serving of ice cream and allied products at parlour is ‘restaurant service’ – AAR Telangana
• EU VAT – Amount received for early termination of contract which required tie-in period, when liable to VAT – Court of Justice of the European Union
• EU VAT – Inter-State supply – Supply when to be regarded as ‘by or on behalf of supplier’ to purchaser in another State – Court of Justice of the European Union

Customs

Notifications and Circulars

• Faceless assessment – First phase of All India roll-out launched at Bengaluru and Chennai
• LEO and eGatepass copy of shipping bill to be electronically transmitted – Printing of Shipping Bills discontinued
• MEIS/SEIS – Increase in duration of validity of scrips and relaxations in last date of filing applications
• Relaxation to submit bonds extended
• AEO certificates where validity expired between 01-03-2020 and 31-05-2020, extended to 30-06-2020
• Revalidation of export authorization/license by DGFT (Hqrs.)
• Paracetamol API and Hydrochloroquine API – Export Policy relaxed
• Alcohol-based hand sanitizers – Export Policy relaxed
• Tyres – Import policy tightened

Ratio decidendi

• Valuation – Contemporaneous imports – Transaction value when not to be rejected – CESTAT Delhi
• SAD refund – Mere mis-match of description no ground to deny refund – CESTAT Chandigarh
• Valuation – Lower price from principal to compensate for marketing services, not wrong – CESTAT Bengaluru
• Classification of goods – Importance of origin of goods and test reports – CESTAT Bengaluru
• Valuation – Value cannot be enhanced merely based on DGOV Circular – CESTAT Ahmedabad
• Valuation – Related person – Rule 3(3) to be followed before adjusting value as per Rule 4 – CESTAT Delhi
• Advance authorisation – Categorisation or re-categorisation cannot be done by DGFT Policy Circulars/Public Notices – Delhi High Court
• Search by DRI at premises of manufacturer who supplied to exporter, valid – Punjab & Haryana High Court

Central Excise, Service Tax & VAT

Ratio decidendi

• Cenvat credit of mandatory services of DICGC availed by banks, available – CESTAT Larger Bench
• Appeal to Appellate Tribunal – Maintainability of appeal against Order-in-Revision passed after 19-08-2009 – Issue referred to Larger Bench – CESTAT Hyderabad
• Transfer of Know How not covered under Intellectual Property Rights service – CESTAT Delhi
• Refund of Cenvat credit to be allowed if assessee not in position to utilise credit within ‘reasonable period’ – CESTAT Ahmedabad
• TN VAT – ITC of tax paid in excess by supplier, available – Madras High Court
• Cenvat credit of mandatory services of DICGC availed by banks, available – CESTAT Larger Bench