Article

Export duty on iron ore and steel intermediaries – An industry perspective!

By Ravi Raghavan and Brijesh Kothary

The Government has with effect from 19 November 2022 rolled back export duty on iron ore pellets and steel products, including pig iron, flat-rolled products of carbon steel and stainless steel, bars, rods and non-alloy steel, etc. The article in this issue of Tax Amicus discusses elaborately the changes made and their background while also pointing out various issues like valuation for the purpose of calculation of export duty, determination of Fe content, and denial of export benefits such as Remission of Duties and Taxes on Export Products (‘RoDTEP’) scheme or refund of unutilised Input Tax Credit. Further, noting that exemption from BCD and AIDC has been withdrawn on certain key inputs for the steel industry, the authors highlight that increase in the cost of critical inputs such as steel due to inefficient tax structure may not only increase the expenditure on Government’s infrastructural projects but also adversely impact private investments, even after the rollback of export duty…

Goods and Services Tax (GST)

Notifications and Circulars

• Refund due to inverted duty structure – Changes by Notifications Nos. 14/2022-Central Tax and 9/2022-Central Tax (Rate) are prospective only
• Transitional Credit – CBIC lays down guidelines for verification of Tran-1/Tran-2

Ratio decidendi

• Provisional release of goods seized in transit and thereafter confiscated is permissible – Gujarat High Court
• Determination of tax liability under CGST Section 129(1) is not correct – Allahabad High Court
• Job work for manufacture of alcoholic beverages for human consumption – Notification No. 6/2021-CT(R) prescribing 18% tax is retrospective – Andhra Pradesh High Court
• Deposit in Electronic Cash Ledger does not amount to payment of the tax liability – Jharkhand High Court
• Detained in-transit goods must be released if assessee furnishes security – Kerala High Court
• Wrong mention of GSTIN in GSTR-1 – High Court allows correction in GSTR-1 – Jharkhand High Court
• Audit – Non-grant of time to file reply to draft audit report is fatal – Orrisa High Court
• BPO services when not ‘intermediary’ – No change in scope of intermediary in GST regime vis-à-vis service tax regime – Punjab & Haryana High Court
• Appeal against cancellation of registration maintainable even if option available to seek revocation of cancellation – Karnataka High Court
• Notice pay recovery and surety bond forfeiture are not considerations for any supply – AAR Haryana
• E-Commerce Operator merely connecting businesses with customers not liable under CGST Section 9(5) – AAR Karnataka
• Input Tax Credit available on Corporate Social Responsibility (CSR) expenditure – AAR Telangana

Customs

Notifications and Circulars

• Export/import in Indian Rupees – Benefit of export promotion schemes available – FTP and HoP amended to reflect RBI Circular No. 10
• Iron and steel – Export duty removed on specified goods
• Food products (specified) – Import only though 61 specified ports and registration of foreign food manufacturing facilities, mandatory w.e.f. 1 February 2023
• Rice exports – Procedure for identification of parboiled rice laid down
• EPCG Scheme – Re-fixation of annual average export obligation for 2021-22

Ratio decidendi

• Valuation – Value of design engineering and site run (technical documents) when not includible – CESTAT Delhi
• IPR (Imported Goods) Enforcement Rules, 2007 – Registration with Customs for specified product is important – CESTAT Delhi
• Project Imports – Provision for timely submission of statement post imports, not mandatory – CESTAT Delhi
• No confiscation when breach of conditions of advance authorisation regularized and certified by competent authority – CESTAT Mumbai
• Refund – Limitation – Protest not vacated by speaking order of original authority – CESTAT Chennai
• Submission of statement of case to High Court – Time limit under Customs Section 130(A)(4) is not imperative – Bombay High Court
• Handheld enterprise mobile computers, with or without SIM is classifiable as ADP machine and not as smartphone – Customs AAR
• ‘Viewsonic Creative Touch Interactive Flat Panel’ is classifiable under Tariff Item 8471 41 90 – Customs AAR

Central Excise, Service Tax & VAT

Notifications and Circulars

• Pre-deposit of central excise and service tax – Form DRC-03 in GST regime is not a valid mode

Ratio decidendi

• Entry Tax leviable on goods used in trial production – ‘Business’ includes trial production – Madhya Pradesh High Court
• Formula under Cenvat Rule 6(3A) for calculating ineligible credit – Tax planning is perfectly within framework of law – CESTAT Delhi
• Imparting of education is also in nature of religious charitable activities – Service tax exemption available to works contract services provided to such charitable trust – CESTAT Delhi
• Cenvat credit on sales commission – Notification No. 2/2016-C.E. (N.T.) amending Cenvat Credit Rules, 2004 is applicable retrospectively – CESTAT Mumbai
• Merely maintaining record of use is not exercising effective control – CESTAT Ahmedabad
• Cenvat credit on outdoor catering service for provision of meals to employees, admissible – CESTAT Mumbai