Article

Improved system of e-way bill and its implications on the business

By Brijesh Kothary

The article in this issue of Tax Amicus discusses various recent significant developments in the e-way system and their implications for the business. It explains the integration of the e-way bill system with the RFID tag and how this is helping the authorities to validate supplies, detect cases of bill trading or circular trading, etc. Similarly, integration of the e-way bill system with the Vahan database of the Ministry of Road Transport and Highways and its implications have been highlighted. The article deliberates how statistical data obtained from e-way bill system is one of the vital sources of information of economic activities in the country and how it is helping the authorities to identify high risk taxpayers, sectors and loopholes in the GST regime. The article notes that while e-way bill is a good tool to curb tax evasion, it would be better if the officers exercise restraint in going after genuine taxpayers who may have committed minor errors at the time of generation of e-way bills, with no intention to evade. Further, the author suggests relaxation of penal provisions for genuine lapses and non-detention in allegations of misclassification, undervaluation or payment of tax under the wrong head...

Goods & Services Tax (GST)

Notifications and Circulars

• CGST (Fourth Amendment) Rules, 2021 – Changes relating to GST refund, revocation of cancellation of registration and e-way bill restrictions
• Covid-19 – Relaxations and date extensions
• Revocation of cancellation of GST registration – Guidelines for extension of time limit notified

Ratio decidendi

• IGST on oxygen concentrators – Exemption to imports through canalizing agencies while imposing 12% IGST on goods for personal use, arbitrary and unreasonable distinction – Delhi High Court
• Detention of goods – No rule that consignment intended for shorter distance should be offloaded first – Telangana High Court
• Revocation of cancellation of registration – Authorities cannot embark upon assessment – Madras High Court
• GST payable on interest paid for delayed payment to foreign exporter – Rate to be same as that applicable on imported goods – Gujarat AAR
• No ITC available on goods and services used for laying pipeline for inward transmission – Tamil Nadu AAR
• Catering to students of Industrial Training Institute exempted from GST – Kerala AAR
• Membership fees collected by literary society not liable to GST till amendment in Section 7 not notified – Karnataka AAR
• No ITC available on promotional material provided to franchisees, distributors, etc. – AAAR holds such supply as non-taxable supply – Karnataka Appellate AAR
• Grant of shared access to a pathway is an ‘act of tolerating an act’, liable to GST – Tamil Nadu Appellate AAR
• EU VAT – No right to deduct input VAT when acquired goods part of tax fraud upstream in supply chain – Court of Justice of the European Union
• EU VAT – Place of supply in case of roaming services of telecom – Court of Justice of the European Union

Customs

Notifications and Circulars

• Covid-19 – Relaxations under Customs and Foreign Trade Policy
• Customs to accept undertaking in lieu of bond till 30 June 2021
• Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 – Amendments effective 2 February 2021 explained

Ratio decidendi

• Confiscation under Section 111(d) – Import when not contrary to prohibition – Reasonable care by importer – CESTAT Bengaluru
• SAD refund claim – Limitation – Matter referred to Larger Bench of CESTAT – CESTAT Chandigarh
• EOU – DTA clearance entitlement – Twisted yarn and ropes are similar goods – CESTAT Mumbai
• EPCG scheme – Non-mentioning of authorisation in case of third-party exports is not fatal – Madras High Court
• SEIS – Service providers rendering services to telecom service providers, not excluded – Delhi High Court
• Wooden boards – Classification under Heading 4407 and 4409 – Court of Justice of the European Union
• Valuation – Actual cost of transportation till place of import when not includible – Court of Justice of the European Union

Central Excise, Service Tax & VAT

Ratio decidendi

• Reduction of service tax dues under Sabka Vishwas (LDR) Scheme – Department duty bound to modify Garnishee Notice – Telangana High Court
• Sabka Vishwas (LDR) Scheme – Case of erroneous refund excluded even if SCN for same culminating in demand order – Rajasthan High Court
• No service tax on service provided by a partner to the partnership firm before 1 July 2012 – CESTAT Ahmedabad
• Cenvat credit – No demand under Rule 6(3)(i) when Rule 6(3)(ii) complied with – CESTAT Kolkata
• Cenvat credit restrictions due to Excise Rule 8(3A) – Rule not applicable to every case – Ratio of Indsur Global relevant even after stay by SC – Telangana High Court