Tax Amicus: October 2018

TDS under GST law – Certain issues
By Tushar Mittal
Recently, the provisions relating to deduction of tax at source (TDS) under GST law have been made effective. The article in this issue of Tax Amicus discusses a few implementation issues arising out these provisions. According to the SOP released, TDS is not required on the payment made post 1.10.2018 where invoice was issued before such date. But TDS is deductible only at the time of making payment. Similarly, there is confusion on deduction of TDS on advances, as the provisions relating to tax liability on advances has been kept in abeyance. When the actual supply of goods will flow from the vendor, recipient would be left with nothing to secure his TDS compliances. Question also arises as to how the responsibility of the deductor for issuance of certificate is to be fixed, in case the common portal fails to generate the certificate. The issue of revenue loss when supplier is a government department also needs immediate attention of the taxman. In conclusion the author raises the question as to how the TDS provisions will help in attracting the attention of the department...

Goods & Services Tax (GST)
Notifications and Circulars

• Refund to exporters – CGST Rule 96(10) amended prospectively and retrospectively
• Refund of Compensation Cess to diplomatic missions and UN organisations – CGST notification to be adhered
• GST on trusts for advancement of religion, spirituality or yoga clarified
• Detention and seizure – CGST Section 129 not to be invoked in all circumstances
• Budgetary support scheme claims for specified States to be filed online

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

• GST (Compensation to States) Act, 2017 is constitutionally valid – Supreme Court
• GST transitional credit – CGST Section 140(3)(iv) is unconstitutional – Gujarat High Court
• CGST Section 67 authorises search and not sealing of premises – Delhi High Court
• Anti-profiteering – GST rate benefit not to be passed through different product – National Anti-profiteering Authority
• Charging enhanced base price to nullify rate reduction is profiteering - National Anti-profiteering Authority
• Anti-profiteering – Benefit to be passed to each customer – Law of averages not applicable - National Anti-profiteering Authority
• Anti-profiteering – Base price increase in lieu of denial of ITC is not profiteering - National Anti-profiteering Authority
• Profiteering when ITC benefit not passed-on - National Anti-profiteering Authority
• No ITC on transport of petrol from refinery to export warehouse – AAR West Bengal
• Restaurant cannot choose to pay GST@ 18% with ITC – AAR Karnataka
• Marketing service is ‘intermediary’ and not naturally bundled with aftersales – AAR Karnataka
• Co-owners of rented property individually eligible for threshold exemption – AAR Kerala
• Demo cars being capital goods are eligible for ITC to car dealer – AAR Kerala
• Providing complimentary tickets is covered as ‘supply’ – AAR Punjab
• Lease for mining taxable at rate as applicable on supply of goods – AAR Haryana
• Shampoo towel classifiable under Heading 3305 while bed and bath towel classifiable under 3307 – AAR Uttarakhand
• UK VAT - Electric mobility scooter when classifiable under Heading 8703 and not 8713 - United Kingdom Upper Tribunal Tax and Chancery Chamber
• EU VAT – Right to deduct VAT on supply when identification number inactive - Court of Justice of the European Union

Customs
Notifications and Circulars

• SEIS benefits to firms providing educational services to NRI students
• Cruise tourism – CBIC clarifies on applicability of Customs provisions
• Customs duty increased on 19 products to narrow CAD
• EOU, Advance authorisation and EPCG imports - IGST and Cess exemption extended
• India postpones again retaliatory measures against USA
• WCO holds 62nd Session of HS Committee, for classification

Ratio decidendi

• DGFT Notification No. 9/2015-20, issued without jurisdiction, quashed – Calcutta High Court
• No redemption fine when goods re-exported – CESTAT Allahabad
• EOU – Destruction of goods outside EOU – Prior permission when not required – CESTAT Delhi
• CKD kits for cars – Customs exemption clarified – CESTAT Chennai
• Anti-dumping duty – DA’s termination order appealable before CESTAT – Delhi High Court
• EU Customs - Volatile camera classifiable under sub-heading 8525 80 30 – Court of Justice of the European Union

Central Excise and Service Tax

Ratio decidendi

• Cenvat credit admissible on mandatory CSR activities – CESTAT Mumbai
• Abatement under Excise Sec. 3A(2) – CESTAT refers issue to Larger Bench
• Valuation – Loss in final goods immaterial for captive consumption valuation – CESTAT Mumbai
• Valuation – Value of drawing received from buyer when not includible – CESTAT Chennai
• Refund not barred by limitation when liability absent – Delhi High Court
• Renting of immovable property service - Refundable security not liable – CESTAT Delhi
• Cenvat credit available on services from non-whole time director – CESTAT Allahabad
• Cenvat credit – Failure to ascertain exclusion under Rule 9(1)(b) is not suppression – CESTAT Delhi
• Cenvat credit on inputs lost in cyclone – Reversal when not required – CESTAT Kolkata
• Cenvat credit on laying or maintenance of railway siding track, available – CESTAT Chennai
• Cenvat credit when part of amount payable to service provider withheld by recipient – CESTAT Delhi
• Cenvat credit available on capital goods predominantly used in exempted goods except for a short period – CESTAT Hyderabad

Value Added Tax

Ratio decidendi

• TNVAT – ITC available when inter-State sale made to State government – Supreme Court
• Premix coffee is not coffee, and frozen dessert when not dessert – Kerala High Court