Tax Amicus: November 2018

Reversal of credit on write-off under GST – Open issues
By Nirav S. Karia & Nivedita Agarwal
CGST Act provides for specific situations where input tax credit of the GST paid cannot be availed. One of the provisions where this restriction has been imposed is “write-off” of goods. On a plain reading of the provisions, it seems that input tax credit is required to be reversed in cases when goods are written off. However, as we delve deeper into the issue, we realise that the said provision is cloaked in obscurity and ambiguity. For one, the expression “write-off” has not been defined anywhere in the CGST Act or Rules made thereunder. This raises many questions regarding the scope of the provision and includability of situations for reversal of credit. Considering the history of the dispute under the Central Excise law, the author observes that law in the erstwhile regime had finally settled after various amendments in the Cenvat Credit Rules from time to time and protracted litigation in this regard. According to the author, we are back to square one with the introduction of GST...

Goods & Services Tax (GST)
Notifications and Circulars

• CGST Rules – New Rule notified for recovery of dues under ‘existing’ laws
• TDS provisions under GST – Exemption to supplies from one PSU to another PSU
• Job work - Form GST ITC-04 can be filed till 31-12-2018
• Valuation – Interest on loan/credit by Del-credere agent when includible
• Return of goods – Procedure to be followed
• Tea Board required to collect TCS from tea producers and auctioneers
• Cancellation of GST registration – Procedure clarified
• Registration of Casual Taxable Person and recovery of excess credit distributed by ISD – Clarifications
• Refund of ITC and IGST clarified

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

• Service of notice – ‘Affixation’ only when other methods not practicable - Allahabad High Court
• GST E-way Bill – Missing Zero in the mentioned distance, a typographical mistake – Kerala High Court
• Manual filing of TRAN-1 and GSTR-3B to avoid lapse of ITC – Bombay High Court
• Lotteries are ‘goods’ – GST leviable – Calcutta High Court
• Transport planning– Admissibility of exemption – AAR Andhra Pradesh
• Job work for foreign entity liable to GST @ 18% – AAR Andhra Pradesh
• Toll charge not excludible from value of security service – AAR West Bengal
• IIMs eligible for both Sl.66(a) and 67 of Notification No. 12/2017-CT (Rate) – AAR West Bengal
• Amount received from contract brewing units for use of IP, liable to GST – AAAR Karnataka
• No GST on quit rent paid to government on land used for agriculture – AAR Kerala
• No concessional GST on works contract carried for business purposes – AAR Madhya Pradesh
• Bus body building on chassis provided by principal is supply of service – AAR Goa
• ITC available only on services used for business purposes – AAR Odisha
• Service of providing Pollution Control Certificate liable to GST – Not a pure service provided by government – AAR Goa
• Processing natural gas is job work – AAR Kerala
• Supply of medicines to in-patients is composite supply – Exemption available under healthcare services – AAR Kerala

Customs
Notifications and Circulars

• IGST refund in invoice mismatch issue – Officer interface facility extended
• Reimport of goods earlier exported by post – Exemption clarified
• Pharma exports – Track and Trace system for drug formulations postponed
• In-bond manufacturing – Forms consolidated, and procedures clarified
• Export of restricted items - DGFT consolidates list of documents required
• EPCG authorisations are now valid for 24 instead of 18 months

Ratio decidendi

• Provisional release order appealable before CESTAT – Punjab & Haryana High Court
• Advance authorisation – Condition of pre-import for IGST exemption, valid – Madras High Court
• Valuation - Exports need not be by same exporter and within same month – CESTAT Hyderabad
• TED refund available for supplies to EOU before 15-3-2013 – Delhi High Court

Central Excise and Service Tax

Ratio decidendi

• Cenvat credit available on towers and shelters used for telecom service – Delhi High Court
• COD clearance – Tribunal not to dismiss appeal in absence of COD – Chhattisgarh High Court
• DGCEI has all India jurisdiction, pendency u/s.73 unrelated for s.14 notice – Delhi High Court
• Cenvat credit available on cement used for filling pits for mining – CESTAT Delhi
• Cenvat credit available on product liability/recall liability insurance – CESTAT Hyderabad
• Cenvat credit on insurance of life of Joint Managing Director, admissible – CESTAT Chandigarh
• Refund of service tax to SEZ – Cenvat credit not availed unless utilised – CESTAT Mumbai
• Cenvat credit on supplementary invoices issued after opting for VCES – CESTAT Chennai
• Tractor Cess not imposable on parts and accessories of tractors – CESTAT Delhi
• Export of services when outflow of foreign exchange reduced – CESTAT Mumbai
• Full Cenvat credit available even when service used by others also – CESTAT Hyderabad
• Cash refund of amount paid through Cenvat credit, once GST regime in force – CESTAT Chennai
• Certification of information not covered under CA service – CESTAT Hyderabad

Value Added Tax

Ratio decidendi

• Reassessment order under Karnataka VAT, after GST regime, is valid – Karnataka High Court
• Limitation for ITC - Tamil Nadu VAT Section 19(11) constitutionally valid – Supreme Court