Article

Charges for delayed payment – Can they escape from valuation!

By Jagannadh Grandhi and Satish Gandla

Analysing Section 15(2)(d) of the Central Goods and Services Tax Act, 2017, the article in this issue of Tax Amicus elaborately discusses the question as to whether every charge paid for delayed payment of any amount form part of the value of supply. In the opinion of the authors, Section 15(2)(d) does not cover all scenarios where additional charges are paid. The authors are of the view that in case of additional charges collected on delayed payment of any amount other than the consideration/value of supply under a contract for supply of goods/service, it is possible to say that the same shall not be included in the value of taxable supply of goods/service. Analysing few contrary recent rulings of the Authority for Advance Ruling (‘AAR’), Office Memorandum of the GST Policy Wing and CBIC Circular No. 102/21/2019-GST, the article however also states that the departmental authorities would try to include any additional charges. According to the authors, the tax payers need to relook into the nature of payments under contracts...

Goods & Services Tax (GST)

Notifications and Circulars

• Relaxations effective October 2020 under GST
• Cumulative reconciliation of ITC under Rule 36(4) clarified
• GSTR-1 and GSTR-3B – Due dates prescribed for period October 2020 to March 2021
• Number of digits of HSN Codes required in invoices increased

Ratio decidendi

• Transition of Cenvat credit of Education Cesses and Krishi Kalyan Cess in GST regime not available – Madras High Court
• Payment of tax in installments during COVID-19 situation – Kerala High Court
• Transportation of goods to different place of business in same State other than the address mentioned in invoice and e-way bill does not automatically attract GST and penalty – Telangana High Court
• Supply by duty-free shops to outbound passengers constitutes exports – Kerala High Court
• Notional interest on security deposit in relation to renting service includible in value of supply if it influences same – Karnataka AAR
• Reclaiming reusable sand from waste sand is manufacture and not job-work – Maharashtra AAR
• No ITC on service of installation of lifts provided to cooperative housing society – Maharashtra AAAR
• Sale of Transferable Development Rights liable to GST under Real Estate services – Maharashtra AAAR
• Ireland VAT – Word ‘beverage’ covers dry goods – Supreme Court clarifies on principles of strict construction of statute – Supreme Court of Ireland

Customs

Notifications and Circulars

• Advance authorisations – Date of submission of documents for EO fulfilment extended
• Steel Import Monitoring System – Compulsory registration of all goods falling under Chapters 72, 73 and 86 of ITC (HS)
• Deemed exports – Duty drawback on steel supplied through distributors/dealers
• Rebate of State Levies on export of garments and made-ups Scheme notified under scrip mechanism
• LED products imports – Random sampling to be done
• Import of air conditioners with refrigerants prohibited

Ratio decidendi

• Rate of duty to be taken as on the date and time of presentation of bill of entry – Time of issue of notification also important – Supreme Court
• Prohibited goods can be provisionally released under Customs Section 110A – Bombay High Court
• Jt. DGFT has no power to review his own orders under FTDR Section 16 – Limitation of 2 years for review notice to start from date of order to be reviewed – Madras High Court
• Provisional release order must contain reasons and indicate application of mind – CESTAT New Delhi
• Valuation – Procedure for rejection of transaction value – CESTAT New Delhi
• Durability and not repeated use important for Notification No. 104/94-Cus. – Benefit available to flexi tank container – CESTAT Ahmedabad

Central Excise, Service Tax & VAT

Ratio decidendi

• •Sabka Vishwas Scheme – Amount in arrears – Deposits to be adjusted after determination of amount payable – Madras High Court
• BAS – Trade discount not liable to service tax even if named as ‘commission’ – CESTAT Ahmedabad
• Cenvat credit of services received at port – Words ‘at the port’ are part of the phrase ‘upto the place of removal’ – CESTAT New Delhi
• No service tax on obligation to contribute to capital of joint venture – CESTAT Mumbai
• EOU – DTA clearance at nil duty whether covered under ‘appropriate rate of duty’ – Issue referred to Larger Bench – CESTAT Mumbai
• Cenvat credit available on construction/setting up of landfill – CESTAT Mumbai
• Cenvat credit when available on Outdoor Catering service, post 01-04-2011 – CESTAT Mumbai