Article
Arbitral award: Compensation or consideration
By Jagannadh Grandhi and Kumari Nivedita
The article in this issue of Tax Amicus discusses the GST liability on arbitral awards. It notes that though the CBIC Circular No. 178/10/2022-GST, dated 3 August 2022 has paved the way in understanding the GST implications on arbitral awards, determination of the nature of the arbitral award, requires analysis of facts surrounding each case and the terms and conditions of the contract entered between the parties as the awarded amount may not necessarily be in the nature of a compensation. The authors in this regard also elaborate different propositions by providing illustrations. Further, observing that there is no direct mention or inference of the same in the Circular, the authors are of the view that such ambiguity may lead to various taxation disputes and therefore, the parties must methodologically review each award amount and decide on the tax implications…
Goods and Services Tax (GST)
Notifications and Circulars
- GST Council’s 48th Meeting – Highlights
Ratio decidendi
- Deposit of an amount during search operations when not voluntary – CBIC directed to align Instruction dated 25 May 2022 with directions of Gujarat HC in Bhumi Associate – Delhi High Court
- Provisional attachment – Pendency of proceedings is sine qua non even after amendment to Section 83 from 1 January 2022 – Gujarat High Court
- Release of non-relied upon seized documents/books is not mandatory within 6 months – Delhi High Court
- Blocking use of credit ledger when is not permissible – Delhi High Court
- Determination of tax liability under CGST Section 129(1) when not correct – Allahabad High Court
- No GST on notice pay recovery – CBIC Circular No. 178/10/2022-GST applicable retrospectively – Kerala High Court
- No detention and seizure of goods when e-way bill expires in transit – Gujarat High Court
- Cancellation of registration not sustainable when SCN and order for cancellation not clear enough – Andhra Pradesh High Court
- No GST on reimbursement of expenses borne by Director on behalf of company – Karnataka AAR
- Input Tax Credit – ‘Plant and machinery’ not include pipeline which is 90% outside licensed area – Maharashtra AAR
- EU VAT – Award of vouchers free of charge to employees is not supply of services for consideration – Court of Justice of the European Union
Customs
Notifications and Circulars
- India-Australia FTA – Rules for economic cooperation and trade agreement notified
- E-Commerce – Postal Export (Electronic Declaration and Processing) Regulations notified
- RoDTEP – Chemicals, pharmaceuticals and iron & steel items included in list of eligible items
Ratio decidendi
- EPCG imports – Exemption from IGST and Compensation Cess is retrospective – Amendment by Notification 79/2017-Cus is clarificatory – Bombay High Court
- Finished jewellery earlier exported can be imported in SEZ as raw material – Bombay High Court
- Notification effective only from date of e-publication after digital signature certificate – Gujarat High Court
- Valuation – Contemporaneous imports – Effect of exchange rate and time difference in imports – CESTAT Delhi
- Valuation – Related person – Shareholder cannot be a partner in business – CESTAT Ahmedabad
- DFIA – Immediate parent material is relevant to decide which input was used for export product – CESTAT Ahmedabad
Central Excise, Service Tax & VAT
Ratio decidendi
- Rebate claim on exports – Limitation prescribed under Central Excise Section 11B applicable – Supreme Court
- Oxygen merely a ‘refining agent’ and not a ‘raw material’ in manufacture of steel – Supreme Court
- Admissibility of Cenvat credit cannot be adjudicated by invoking Section 73 of CGST Act – Jharkhand High Court
- Sabka Vishwas (LDR) Scheme – Challenge to rejection of benefit under the scheme valid even after expiry of scheme – Madras High Court
- Sabka Vishwas (LDR) Scheme – Issuance of SCN after 30 June 2019 not material when duty quantified earlier – Bombay High Court
- Refund of Cenvat credit on exports – Debit in Cenvat credit account, though during GST regime, is sufficient compliance – CESTAT Delhi
