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Tax Amicus: July 2018

by Nipun Arora

E-way bill system – Time to relax penal provisions

It has been more than a year since India made the historic transition from the traditional indirect taxation regime an all-new integrated indirect taxation regime i.e. Goods and Services Tax. Article in this issue of Tax Amicus analyses certain implications arising out of the Madhya Pradesh High Court’s recent Order wherein the court upheld the huge penalty on the transporter for updating Part B of Form EWB-01. It seems that while the intention of the government may be bona fide as to eliminate revenue leakage, imposing a huge penalty on the transporter may not be appropriate in view of the fact that we are in the early days of implementation of GST in general and E-Way Bill system, in particular. It appears that the government needs to revisit and relax these provisions...


Goods & Services Tax (GST)

Notifications and Circulars

  • CGST and IGST provisions set to be amended after GST Council approves amendments in its 28th meeting
  • GST rates to be reduced on number of commodities
  • Exemptions to be provided to various services
  • GST liability for procurement from unregistered person – Exemption extended
  • GST Return set to be simplified – Simple monthly return and provision for quarterly return for small traders approved
  • GST migration window to be opened again

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

  • E-way Bill – Mention of second vehicle by hand when not an irregularity – Allahabad High Court
  • Conversion of coal to electricity is supply of goods and not job work – Appellate AAR Maharashtra
  • Agricultural produce – Exemption for support services to agriculture when available – AAR Rajasthan
  • No exemption for cleaning of agricultural produce away from farms – AAR Rajasthan
  • Reimbursement of salaries and expenses by HO is not consideration for services to LO – AAR Rajasthan
  • Contract manufacturing for brand owner – GST liability – AAR Karnataka
  • Compensation to tenant for alternate accommodation is liable to GST – AAR Maharashtra
  • Rakhi is not a ‘handicraft’, ‘puja samagri’ or covered as ‘kalava’ – AAR West Bengal
  • Lyophilizers are classifiable under Ch. 84 and attract GST @ 18% - AAR Telangana
  • Bio fertilizer in unit container with brand name attracts 5% GST – AAR Rajasthan
  • Polypropylene Leno Bags when classifiable under Ch. 63 – AAR West Bengal
  • EU VAT - Right to deduct VAT appearing on invoices depends on actual transaction – CJEU
  • UK VAT – Distinction between ‘dredging’ and ‘excavating’ - UK’s Upper Tribunal (Tax and Chancery Chamber)



Notifications and Circulars

  • Asia Pacific Trade Agreement – India cuts tariff from 1-7-2018
  • Advance Authorisation on net to net basis - Accountability of inputs
  • ‘No incentive certificate under MEIS’ – DGFT notifies procedure
  • ‘Processed items’ defined in plant quarantine import regulation order
  • Pea imports – Quantity restrictions extended till 30-9-2018
  • IPR enforcement – Reference to ‘patent’ removed from Customs Rules
  • Export duty reduced on iron ore and concentrates for Japan and South Korea

Ratio decidendi

  • TED refund denial detrimental to exporters and economy – Notification restricting refund is not retrospective – Delhi High Court
  • TED refund not deniable in absence of ab initio exemption – Delhi High Court
  • CVD on imports for sale to hospital to be on transaction value and not MRP – CESTAT Mumbai


Central Excise and Service Tax

Ratio decidendi

  • Cenvat credit on inputs - Explanation in Rule 2(k) is not for service provider - CESTAT Ahmedabad
  • Cenvat credit on basis of photocopy of Bill of Entry when permissible – CESTAT Delhi
  • Removal of MRP sticker, without affixing new one is not ‘manufacture’ – CESTAT Delhi
  • Cenvat credit on input service for pan masala cleared under Pan masala Packing Capacity Rules – CESTAT Allahabad
  • C & F Agent expected to undertake all activities as agent of principal – CESTAT Delhi
  • Refund of Cenvat credit – Place of Provision of Services Rules not applicable – CESTAT Mumbai
  • Business Auxiliary Service does not cover establishment of WAN – CESTAT Delhi
  • Lending/Borrowing by industrial unit not attracts Cenvat Rule 6(3B) – CESTAT Delhi
  • Micronutrients are fertilisers and not plant growth regulators – CESTAT Mumbai
  • Cenvat credit on railway tracks used for bringing in inputs, available – CESTAT Kolkata


July, 2018/Issue-85 July, 2018/Issue-85

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