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Editor’s Column :-

It gives me immense pleasure torelease this month’s Communique.Nowadays on all fronts, the mostdiscussed and debated topic is Goodsand Services Tax (GST). It being thelargest tax reform since independenceis awaited eagerly by all.

The meeting of the GST Council heldon 16th of January 2017 proved to beresult oriented because decisionregarding dual control that waspending so long has been taken andthe consensus on the same has beenarrived at, amongst the State and theCentre

Even in this meeting the date forimplementation of GST was alsodiscussed and decided, as 1st July 2017.

My dear friends, I have initiateduploading of Videos in which theprovisions of The Revised Model GSTLaw is discussed and you all arerequested to go through the same.Further, We have developed adedicated portal for GST i.e.www.gstclub.in mainly for updationsrelated to GST along with the option topost Articles, Create Forums byanyone. The main feature of the said

portal is once you enrol your E-mailID, you start getting DAILY DIGESTfrom the said portal.

I once again request you all for postingarticles, creating forums onwww.gstclub.in also you are requestedto subscribe your E-mail ID by visitingthe site and be updated abouteverything on GST.

Happy Reading and your suggestionsare invited.

Thank You !

CA Avinash Poddar

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Content at Glance :-

A. Concepts of GST - A Series by CA Avinash Poddar

Page 1 - Issues in Present IDT regime along with Taxes Subsumed and TaxableEvent

Page 2 - Composition Levy [Section 9]Page 3 - Migration of existing taxpayers [Sec 166]Page 4 - Amount of CENVAT credit carried forward in a return to be allowed as input tax

credit [Sec. 167]Page 5 - Unavailed CENVAT credit on capital goods, not C/F in a return, to be allowed

in certain situations [Sec. 168]

1.0 Article

1. Budget 2017-18: Gist of Service Tax Amendments2. Finance Bill 2017: Gist of Custom Law Amendments3. Place of Supply of BOFS partially reversed under Revised GST Model Law4. The Insight - Input Tax Credit as per Revised Model GST Law5. Place of Supply of Telecommunication services under GST6. Banking & NBFC sector - Impact of GST7. Readiness for GST migration8. Changes in definition of ‘’Supply’’ under Old vis-à-vis New Model GST Law9. GST- Impact on Logistic Companies10. 40% service-tax abatement for tour operators – An insight into11. Returns under model GST law12. Whether Supply of Foods at Air Conditioned Restaurant Is Liable for Service Tax?

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2.0 News & Updates

1 India should start with a uniform low rate GST2 GST Council plans to take up three contentious laws for discussion; targets 1 July roll-

out3 Smartphone buyers beware: GST may lead to 25% hike in prices4 Budget 2017 at a glance: Readying the stage for GST5 Sumit Dutt Majumdar: Posers on GST left unanswered6 ‘GST on track’, Jaitley leaves excise, service tax unchanged7 Tax officials to sport black bands to protest GST Council decisions8 GST decisions under states' pressure, reverse them: IRS9 Vijay Kelkar says single GST rate easy to administer10 GST won't lead to job losses at tax dept, assures Arun Jaitley11 GST: 70,000 tax officials warns of non-cooperation movement12 Biscuit-makers demand exemption from GST13 Recent GST Council’s decisions not in national interest: IRS officers body14 GST hurdles15 Customs and excise officials upset with GST administration deal with states16 KDK Softwares launches helpline to resolve GST-related queries17 Power ministry seeks relief for renewable energy from GST impact18 Retailers seek early implementation of GST19 GST: striking a balance20 GST: Tax evasion up to Rs 2 cr a bailable offence21 Centre And States To Discuss GST Again On February 18, Says Arun Jaitley:

Highlights22 July 1 more realistic deadline for GST: Arun Jaitley

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3.0 Knowledge series on The Model GST law by CA Avinash Poddar

New Release on Revised Model GST Law :-

3.1 Session 2 - Time of Supply of Goods under Revised Model GST Law3.2 Session 3 - Time of Supply of Service under Revised Model GST Law

Released Earlier under Revised Model GST Law :-

3.3 Session 1 - Overview and Comparison under Old and Revised Model GST Law

Knowledge Series under Model GST Law :-

3.4 Part - I - Overview of Goods and Service Tax3.5 Part - II - GST Registration - Knowledge Series on Goods and Service Tax

(GST)3.6 Part - III - Time of Supply of Goods under GST3.7 Part - IV - Time of Supply of Services under GST3.8 Part - V – Change in effective rate of tax and valuation u/s 15 of The Model

GST Law3.9 Part - VI - GST Valuation (Determination of value of supply of Goods and

Services) Rules, 20163.10 Part -VII - GST Valuation (Determination of value of supply of Goods and

Services) Rules, 2016 - 23.11 Part - VIII - Place of Supply of Goods3.12 Part - IX - Place of Supply of Services - I3.13 Part - X - Place of Supply of Services - II3.14 Part - XI - Seminar on GST by GJEPC, Surat3.15 Part - XII - Job Work under GST3.16 Part - XIII - Transitional Provisions related to Job Work3.17 Part - XIV - Seminar on Basics of GST by Ahmedabad Branch WIRC of

ICAI3.18 Part - XV - Seminar organized by Ahmedabad Branch WIRC of ICAI3.19 Part - XVI - Demand and Recovery u/s. 513.20 Part - XVII - Audit Provisions under The Model GST Law3.21 Part - XVIII - Special Audit Provisions under The Model GST Law

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4.0 Case Laws4.1 Case Laws related to Excise

Sr.No.

Relevant Section Case Name Issue

1 Section 4 [2015] 62 Taxmann.Com 7 (Sc) TamilNadu Petroproducts Ltd.V.Commissioner, Central Excise, Chennai

Valuation

2 Rule 18 [2015] 62 Taxmann.Com 101 (Sc)Spentex Industries Ltd.V.Commissioner Of Central Excise

Rebate

3 Section 11A readwith Section 73 ofthe Finance Act1994

[2015] 62 Taxmann.Com 12 (Sc)Greaves Ltd.V.Commissioner Of Central Excise &Customs, Aurangabad

Recovery

4 2015-Tiol-2211-Cestat-Ahm-Lb 1)M/S Krap Chem Pvt Ltd2) Shri R P Gupta3) M/S Ravi Gum Industries4) Shri Ramnikbhai N Patel5) Shri Babulal K Sakaria6) Shri Jivrajbhai Vamanjibhai PatelVsCommissioner Of Central Excise AndService Tax, Daman, Rajkot

5 2015-Tiol-2165-Cestat-Ahm M/SCema Electric Lighting Products IndiaPvt LtdVsCommissioner Of Central Excise,Ahmedabad-Iii

Disallowance ofCenvat

6 Rule 3 [2016] 76 Taxmann.Com 358 (Madras)Sd PackersV.Assistant Commissioner (Ct)

Cenvat Credit

7 Section 32E [2016] 76 Taxmann.Com 355 (Delhi)Door Deco IndustriesV.Customs, Central Excise & Service Tax

Settlement of Cases

8 Rule 3 [2016] 76 Taxmann.Com 356 (Allahabad- Cestat) BharatRolling MillsV.Commissioner Of Central Excise,Allahabad

Cenvat Credit

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9 Section 35 [2017] 77 Taxmann.Com 81 (Bombay)Arihan TelecommunicationsV.Union Of India

Appeals

10 Rule 3 [2017] 77 Taxmann.Com 91 (Hyderabad- Cestat) SampreNutritions Ltd.V.Commissioner, Hyderabad-Iviaj

Cenvat Credit

11 Rule 14 [2017] 77 Taxmann.Com 154 (New Delhi- Cestat) Commissioner OfCentral Excise, Jaipur-IV.Hindustan Copper Ltd.

Recovery of Creditwrongly taken

12 Rule 5 [2017] 77 Taxmann.Com 211 (Mumbai -Cestat) PrincipalCommissioner Of Central Excise, Pune-IV.Advinus Therapeutics Ltd.

Cenvat Credit

13 Rule 3 [2017] 77 Taxmann.Com 229 (Mumbai -Cestat) Pepsico IndiaHolding (P.) Ltd.V.Commissioner Of Central Excise,Mumbai-Ii

Cenvat Credit

14 Rule 4 [2017] 77 Taxmann.Com 274 (Mumbai -Cestat) Jaya HindIndustries Ltd.V.Commissioner Of Central Excise, Pune-I,Commissionerate

Cenvat Credit

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4.2 Case Laws related to Service Tax

Sr.No.

Relevant Statute Case Name Issue

1 Rule 13 [2015] 62 Taxmann.Com 8 (Sc)Ankur SteelsV.Commissioner Of Central Excise,Allahabad

Deemed Credit

2 2015-Tiol-2208-Cestat-Ahm M/SBiossom Industries LtdVsCommissioner Of Central Excise, CustomsAnd Service Tax-Daman

Valuation

3 2015-Tiol-2363-Hc-Ahm-Cx PremFabricationsVsUnion Of India And 3

Admission ofAppeal

4 2015-Tiol-2169-Cestat-Ahm M/SNawaz ShippingVsCommissioner Of Central Excise AndService Tax, Rajkot

5 Section 65 [2016] 76 Taxmann.Com 357 (Sc)Gujarat State Fertilizers & Chemicals Ltd.V.Commissioner Of Central Excise

6 Section 65(90a),read withsections 73, 76, 77,78 and 80

[2017] 77 Taxmann.Com 59 (Mumbai -Cestat) Bombay WellPrint Inks (P.) Ltd.V.Commissioner Of Central Excise & ServiceTax, Nagpur

Cenvat Credit Rules2004

7 Sectiom 65(97a) [2017] 77 Taxmann.Com 69 (Sc)Nkg Infrastructure Ltd.V.Commissioner Of Customs, Central Excise& Service Tax Ghaziabad

8 Section 76, 77 and78

(2016) 23 Cchst 1545 DeltribM/S. Ashish Enterprises & CoVs.Commissioner Of Central Excise JaipurI

9 Section 65B(44)and Section 66E(i)

(2016) 23 Cchst 1299 KerhcKerala Classified Hotels And ResortsAssociation, Thiruvananthapuam & Ors.Vs.Union Of India, New Delhi

10 Section 73(1) andSection 78

(2016) 23 Cchst 1475 DeltribCce, Raipur Vs.M/S. Antulal & Sons

Service Tax onCommission

11 Section 76, 77 and78

(2016) 23 Cchst 1474 MumtribSecurity Guards Board For Greater

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Bombay & Thane Dist. Vs.CommissionerOf Central Excise, Thane-Ii

12 Section 66 [2017] 77 Taxmann.Com 216 (Mumbai -Cestat) Shreenath MhaskobaSakhar Karkhana Ltd.V.Commissioner Of Central Excise, Pune-Iii

Charge of Servicetax

13 Section 65(12) 2017-Tiol-261-Cestat-Mum KansaiNerolac Paints LtdVsCommissioner Of CustomsMumbai

14 Section 83 2017-Tiol-259-Cestat-Del M/SLupin LtdVsCommissioner Of Central Excise, Indore

Refund

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4.3 Case Laws related to Customs

Sr.No.

Relevant Statute Case Name Issue

1 [2015] 62 Taxmann.Com 184 (SC)Commissioner Of Customs, BangaloreV.G.M. Exports

Anti DumpingDuty

2 Section 27A 2015-TIOL-2202-CESTAT-MUMM/S S S DYES AND CHEMICALSVsCOMMISSIONER OF CUSTOMSMUMBAI

Interest OnDelayed Refund

3 Section 110 [2017] 77 Taxmann.Com 50 (Delhi)Jatinder Kumar SachdevaV.Union Of India

Seizure Of Goods,Documents AndThings

4 Section 141 ReadWith Section 157

[2017] 77 Taxmann.Com 92 (Delhi)Delhi International Airport (P.) Ltd.V.Union Of India

Conveyances AndGoods In ServiceArea

5.0 NOTIFICATIONS

5.1 Notifications related to Excise

1. Notification No. 3 /2017-Central Excise2. Notification No. 4 /2017-Central Excise3. Notification No. 5 / 2017- Central Excise4. Notification No. 6/2017-Central Excise5. Notification No. 7 /2017-Central Excise6. Notification No. 2 /2017-Central Excise (N.T.)7. Notification No. 3 /2017- Central Excise (N.T.)8. Notification No. 4/2017- Central Excise (N.T.)9. Notification No. 5/2017 - Central Excise (N.T.)

5.2 Notifications related to Service Tax

1. Notification No. 5/2017-Service Tax2. Notification No. 6/2017-Service Tax3. Notification No. 7/2017-Service Tax

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A. Concepts of GST - A Series by CA Avinash Poddar

Page 1 - Issues in Present IDT regime along with Taxes Subsumed and Taxable Event

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Page 2 - Composition Levy [Section 9]

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Page 3 - Migration of existing taxpayers [Sec 166]

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Page 4 - Amount of CENVAT credit carried forward in a return to be allowed as inputtax credit [Sec. 167]

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Page 5 - Unavailed CENVAT credit on capital goods, not C/F in a return, to be allowedin certain situations [Sec. 168]

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1.0 Article:

1. Budget 2017-18: Gist of Service TaxAmendments

Since the biggest indirect tax reform 'Goods andServices Tax' is round the corner, any major changein the current indirect tax structure at this phasewould have resulted in undue hardship on thetaxpayers. Keeping an eye on the same, the Hon'bleFinance Minister while presenting his fourth Budgetfor 2017-18 has proposed some handy amendmentsin the service tax law without disrupting the currentindirect tax regime. These changes have beencategorized into two broad categories:

A. Changes effective from february 02, 2017

Process Amounting to Manufacture/Production ofGoods excluding alcoholic liquor for humanconsumption

1. Clause (f) of Section 66D of the Finance Act, 1994in respect of "services by way of carrying out anyprocess amounting to manufacture or production ofgoods excluding alcoholic liquor for humanconsumption" has been proposed to be omitted fromthe Negative List. However, the exemption shallcontinue to prevail as it has been positioned underEntry No. 30 of the mega exemption notificationissued vide Notification No. 25/2012-ST dated 20thJune 2012.

Subsequently, in order to support the aboveamendment, the definition of "process amounting tomanufacture" has been placed in the megaexemption notification instead of the Negative List.

Exemption on Life Insurance services by Army,Naval and Air Force Group Insurance Funds to theirmembers

2. It has been proposed to award an exemptionbyway of insertion of Entry No. 26D under theNotification No. 25/2012 dated 20th June 2012 onlife insurance services provided or agreed to beprovided by Army, Naval and Air Force GroupInsurance Funds to the Army, Naval and Air Forcerespectively. However, Insurance must have beenprovided under the Group Insurance Schemes of theCentral Government in order to claim theexemption.

3. Various Other Amendments

(a) Services provided by IIMs by way of two yearfull time residential Post Graduate Program inManagement for the post graduate diploma inManagement (PGDM) to which admissions arethrough Common Admission Test (CAT) by IIMwere being exempted earlier. It has been proposedto omit the word "residential" from the saidexemption and grant the benefit of exemption to allthe apprentices whether staying off campus or oncampus.(b) Air transport is a quite critical imperative for theGovernment while drifting the overall economicgrowth of the country. To ensure this, a regional airconnectivity was desirable from a public policyperspective which may require financial support inthe initial periods to trigger participation of players.National Civil Aviation Policy (NCAP) has in thisregard announced a Regional Connectivity Scheme(RCS) wherein a financial (viability gap funding orVGF) support shall be provided to the airlineoperators to meet the gap between the cost of airlineoperations and expected revenues on such routes.

The RCS operations are however provided variousconcessions including tax concessions, free of costland for RCS Airports, last mile connectivity, amongothers. However, there still left an anomaly asservice tax is being levied on the VGF amountpayable to these airline operators for the service oftransport of passengers, with or without belongings,by air, embarking from or terminating in an RCS.In this Budget, it has been proposed to grant an

exemption to these services provided by the selectedairline operator under the Regional ConnectivityScheme for a period of one year.(c) Explicitly providing for banks and financialinstitutions (including NBFCs), it has been proposedto amend the Rule 6(3) & 6(3A) CENVAT Creditrules, 2004 such that for reversal purposes ofcommon credit, the value shall now include thevalue of service by way of extending deposits, loansor advances in so far as is the consideration isrepresented by way of interest or discount.(d) Rule 10 of the Cenvat Credit Rules has beenamended to provide for approval from jurisdictionalAC/DC for transfer of CENVAT credit under thescheme of transfer of business, merger,amalgamation, lease or transfer of business to a jointventure.B. Changes effective from the date of presidentialassent

A collective Authority for Advance Ruling ("AAR")under Direct Taxes & Indirect Taxes

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1. Following amendments have been proposed inrelation to AAR:

(a) Definition of "Authority" to be suitably amendedin order to merge the Current AAR for Income Taxwith those of Indirect Tax (Customs, Excise andService Tax)(b) Application fee for seeking advance ruling to beincreased from INR 2,500 to INR 10,000 to bring aparity with the Income Tax Law(c) The time limit provided to Authority forpronouncement of an advance ruling to be extendedfrom 90 days to 6 months at par with the time limitprescribed under the Income Tax Law.(d) Suitable provisions to be made for transfer ofpending applications and proceedings before theAAR of Central Excise, Customs and Service tax (ason the date on which the Finance Bill, 2017 receivesthe assent of the President) to the one dealing withIncome Tax.Exemption on Life Insurance services by Army,Naval and Air Force Group Insurance Funds to theirmembers

2. It has been proposed to award an exemption onlife insurance services provided or agreed to beprovided during the period commencing from 10thSeptember 2004 (the date from which the services oflife insurance became taxable)and ending with 1stFebruary 2017 by Army, Naval and Air Force GroupInsurance Funds to the Army, Naval and Air Forcerespectively. However, Insurance must have beenprovided under the Group Insurance Schemes of theCentral Government in order to claim theexemption.

Further, refund shall be granted of such service taxcollected during this period (which should not havebeen collected) provided the application for refundis filed within a period of 6 months from the date onwhich the Finance Bill receives the assent of thepresident.

Exemption on upfront amount paid on grant oflong-term lease of Industrial Plots

3. Previously, the one-time upfront amount (calledas premium, salami, cost, price, developmentcharges or by any other name) payable for grant oflong-term lease of Industrial Plots (30 years or more)by State Government industrial developmentcorporations/undertakings to industrial units wasexempted with effect from 22nd Sep, 2016.

The Finance Minister in this budget has proposed tooutspread this benefit with retrospective effect from

1st June, 2007. Further, refund shall be granted ofsuch service tax collected during this period (whichshould not have been collected) provided theapplication for refund is filed within a period of 6months from the date on which the Finance Billreceives the assent of the president

Clarification on Determination of Service Portion inthe execution of a Works Contract involving transferof goods ad land or undivided share of land

4. It has been proposed to retrospectively amend thevaluation rules with effect from 1st July, 2010 suchthat the value of service portion in execution ofworks contract, which involves transfer of land orundivided share of land, shall not include the valueof property in such land or undivided share of land.The amendment seems to be more in clarificatory innature to put to rest the ongoing and impendingproceedings

2. Finance Bill 2017: Gist of Custom LawAmendments

In this year budget various changes are made incustoms law in a direction of ease of doing businessand reduction in the litigation. Some provisionshave been amended to catch loopholes in theexisting law. At this stage it may be mentioned thatlot more could have been done which is opportunitymissed. Some of the major changes are as under:

Definition of importer and exporter expanded toinclude beneficial owner of the goods

There were situations where the IEC was borrowedby the assessees/importers and the importdocuments were filed in name of the original IECholderby some other persons. In case of any dispute,when the customs demand duty from the actualowner of the imported goods, then the actual owneruse to take plea that he is not the importer thus dutycannot be demanded from him in terms of section 28of the customs Act. The said practises were adoptedfor export goods also.

To curb the said practices, now definition ofimporter and exporter is expanded to include thebeneficial owner of the goods. Thus afteramendment of the definition of the importer andexporter, it would not be possible for the IEC

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borrower to argue that they are not the importer andduty cannot be demanded from them.

Further Section 17 of the Customs Act is amended tosimplify the production of documents orinformation by the importer or exporter or any otherperson for verification of self-assessment. Thisamendment is in direction of ease of doing business.

Amendment in the provisions pertaining to refund

Earlier refund arising out of any reassessment wasalso subject to unjust enrichment. Now Section 27 ofthe customs Act providing for refund is amended toprovide that refund arising out of following twosituations would not be subject to unjustenrichment:

♦ Where excess payment of the duty is evident formthe self assessed bill of entry

♦ Where duty actually payable is reflected in thereassessed bill of entry in case of reassessment

Thus in situations, where the importer paid dutytwice on the very same imports or in a situationwhere the importer did not claim any availableexemption or there is mistake in calculation of dutyor other errors which lead to excess payment ofcustoms duty, in all these case, the principal ofunjust enrichment would not apply. Thus need forproducing books of accounts and chartedaccountant's certificate showing the amount ofexcess customs duty as receivables from customs isnot required. Thus this is welcome change.

However, the provision does not suggest if the saidrefund of excess duty is automatic and period oflimitation for refund application would beapplicable. Further it is also not clear as to whetherthe reassessment of bill of entry happening becauseof pending litigation/order of higher authoritywould also be part of this beneficial scheme.

Advance Ruing

It is now provided that that the Authority forAdvance Rulings constituted under section 245-O ofthe Income-tax Act shall be the Authority for givingadvance rulings for the purposes of the Customs Actand the Member of the Indian Revenue Service

(Customs and Central Excise), who is qualified to bea Member of the Board, shall be the revenueMember of the Authority. It further provides thattransferring the pending applications before theerstwhile Authority for Advance Rulings (CentralExcise, Customs and Service Tax) to the Authority ofadvance ruling under Income tax. The applicationfee is enhanced to rupees ten thousand and timelimit for pronouncing ruling is extended to sixmonths.

Obligation on Person-In charge of vessel

New section 30A is inserted so as to make itobligatory on the personin-charge of a conveyanceto deliver the passenger and crew arrival manifest tothe customs officer before arrival in the case of anaircraft/vessel and passenger name recordinformation of arriving passengers. The form andmanner would be prescribed by Rules framed underSection 157 of the customs Act. In case of any delayin providing such information, the person in chargeof a conveyance would be liable for penalty notexceeding fifty thousand Rupees. Correspondingprovisions in case of departing vessels isincorporation in Section 41.

Section 46 of the Customs Act is amended andobligation is casted upon the importer to file bill ofentry on next day of the arrival of the conveyanceand in case of delay additional charges would beimposed. Further section 47 is also amended toprovide for payment of interest in case of delay inpayment of customs duty.

Section 49 of the customs Act is amended and it isnow provided that the imported goods in respect ofwarehousing bill of entry is filed may also be storedin the public warehouses licenced under section 49of the customs Act. This is also a good step in ease ofdoing business.

Section 82 of the customs Act providing for thetreatment of label as entry for the goods importedand exported through courier is omitted from theAct and Section 84 is amended to give power tocentral government to frame rules in this regards.

Settlement commissions

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Section 127B of the Customs Act is amended toenable the co-noticees in the SCN to make anapplication to the Settlement Commission. Thiswould provide clarity for the co-noticees in asituation where the main noticees have alreadyapproached the settlement commission and theapplication has been disposed off by settlementcommission.

Section 127C of the Customs Act, is amended to givepower to the Settlement Commission to amend theorder passed by it and to rectify any error apparenton the face of record.

Issues still not resolved

There are various areas under the customs Actwhich require clarity and legislative changes such aschallenge to bill of entry for filing refund claim andgrant of automatic refund in case of finalisation ofprovisional assessments.

Further provisional release of imported goods andconditions for the provisional release of the goodsare also a point of continuous dispute betweendepartment and assessee.

Further provisions governing arrest also needs to beratioinised and it has to provided that the casespertaining to interpretation of law need not besubject matter of arrest.

3. Place of Supply of BOFS partiallyreversed under Revised GST ModelLaw

UNDER Revised Model GST Law as issued inNovember, 2016 the determination of place ofsupply of service is of critical importance as theplace of supply of service together with the locationof supplier of service determines whether thesupply is inter state in which case IGST would belevied or intra state in which case CGST and SGSTboth will be applicable. Further, the location ofsupplier and place of supply of service would alsodetermine the taxability of supply of service, likeexport of services is regarded as zero rated/exemptsupply under Model GST Law subject to fulfillmentof certain conditions.

Under the revised Model GST Law thedetermination of "place of supply of services" is

governed by Section 9 of IGST Act in cases wherethe location of supplier of service and location ofrecipient of service is in India and Section 10 of IGSTAct where the location of supplier or the location ofrecipient is outside India.

a) Where the location of supplier of service andlocation of recipient of service is in India

In cases where the location of supplier as well asrecipient of service is in India the determination ofplace of supply of services will be made as perSection 9 of IGST Act.

Section 9(13) of the IGST Act mandates about thedetermination of place of supply of banking andother financial services and reads as under:-

The place of supply of banking and other financialservices including stock broking services to anyperson shall be the location of the recipient ofservices on the records of the supplier of services:

Provided that if the location of the recipient ofservices is not on the records of the supplier, theplace of supply shall be location of the supplier ofservices.b) Where the location of supplier of service or thelocation of recipient of service is outside India

In situations where the location of supplier OR thelocation of recipient is outside India thedetermination of place of supply of services will bemade as per Sec 10 of IGST Act.

In this regard Section 10(8) of IGST Act inter aliamandates that the place of supply in respect ofservices supplied by a banking company, or afinancial institution, or a non-banking financialcompany, to account holders; shall be the location ofthe supplier of service.

As the above covers only the services provided toaccount holders the services provided to nonaccount holders shall be governed by Section 10(2)of IGST Act which is default section and accordingto which the place of supply of services shall belocation of recipient of service OR the location of

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supplier of service where the location of recipient ofservice is not available in the ordinary course ofbusiness.

The definition of term "account" has till now notbeen given in the GST Model Law. However it is feltthat the term "account" may be defined on the linesof the definition given currently under Rule 2(b) ofPlace of Provision of Service Rules, 2012 which hasbeen reproduced below:-

"account" means an account bearing interest to thedepositor, and includes a non-resident externalaccount and non-resident ordinary account.Now let us compare the above position with theexisting law wherein Rule 9 of the Place of Provisionof Service Rules, 2012 is relevant which inter aliamandates that the place of provision of servicesprovided by Banking Company or a financialinstitution, or a non-banking financial company, toaccount holders shall be the location of the serviceprovider.

In regard to the services provided by above entitiesto persons other than account holders thedetermination of place of provision of serviceswould generally be governed by Rule 3 (DefaultRule) of Place of Provision of Service Rules, 2012which states that the place of provision of service isthe location of the service recipient.However incases where the location of service receiver is notavailable in ordinary course of business, the place ofprovision shall be the location of provider of service.

Now in order to have better understanding and toappreciate the difference between the prevailing lawand Revised GST Model Law in regard to theprinciples governing the determination of the placeof provision/supply of banking and other financialservices the comparative position is illustrated asunder:-

Particulars Place ofProvision ofService as perPlace ofprovision ofservice Rules,2012

Place of Supplyof Service asper Section9/10 of IGSTAct (RevisedModel GSTLaw)

Where supplierand recipient ofservice arelocated in Indiaa) BOFSprovided toAccountholders.

Location ofserviceprovider.

Location ofrecipient ofservice**.

b) BOFSprovided topersons otherthan accountholders.

Location ofrecipient ofservice*.

Location ofrecipient ofservice**.

Where supplierOR recipient ofservice arelocated outsideIndiaa) BOFSprovided toAccountholders.

Location ofserviceprovider

Location ofsupplier ofservice.

b) BOFSprovided topersons otherthan accountholders.

Location ofrecipient ofservice*.

Location ofrecipient ofservice *.

* Location of provider/supplier of service wherelocation of service receiver is not available in theordinary course of business.

** Location of supplier of service where location ofrecipient of service is not on the records of thesupplier.

From the above table it is evident that the ruleregarding determining the place ofprovision/supply of services has been reversed inregard to the banking and other financial servicesprovided to account holders in case the location of

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supplier as well as recipient of service is in India.Therefore in such cases where the banking and otherfinancial services which are at present non-taxableas the place of provision is outside taxable territorymay become taxable under GST regime andsimilarly such services which are currently taxablemay be rendered non taxable/zero rated/exemptunder the GST era. However the determinationprinciples are identical in cases where the location ofsupplier of service or the location of recipient ofservice are located outside India.

Interesting days ahead!

4. The Insight - Input Tax Credit as perRevised Model GST Law

Our Existing Structure of Indirect Taxation,CENVAT- (Central Value Added Tax) and StateValue Added Tax, is based on the premise that Taxshould be levied on Value Addition. The basic objectof "Value Addition Tax" can be achieved only whenall Input Taxes are allowed for credit, in full, againstthe Output Tax, so that the resultant Tax Liability isNet tax on Value Addition. However, Therestrictions/ limitations/ retention/Negativeprovisions of Input Tax Credit (ITC)under bothCENVAT as well as State VAT Acts, ineligibility ofcredit of input Tax on goods against output Tax onServices alongwith the inherent disallowance ofcredit of Central levies against State Levies and vice-versa, restricted free flow of credits and those Inputtax, ineligible for credit, submerged in the cost ofgoods/ service leading to cascading of Taxes.

One of the most important objects of the Goods andServices – GST Law is to remove cascading effect ofTaxes and allow free flow of input tax credit so thatthe Tax is levied on Value Addition across all chainsof supply. Thus, the Input tax Credit Provisionsserves an important limb for the Success of theGST.To major extent, the ITC provisions of GST Lawallow free flow of Input Tax credit and alsoeliminates major barriers of credit in the current taxstructure. However, the dragon of restrictions/conditions/ Negative list/limitations continues tofind place in the GST Law too.

This article attempts to provide an insight to TheInput Tax Credit Provisions, dealt in Sec.16, Sec.17,Manner of Utilisation of Credit -Sec.44 andProvisional Claim and Final Grant of Credit, as perthe Revised Model GST Law.

Eligibility:-

(1) Only Registered taxable person is eligible to takecredit of Input Tax.

(2) Input Tax credit is eligible on Goods and/orServices used or intended to be used in the course orfurtherance of business.

Notes-

i) Input Tax is IGST, CGST and SGST charged onany supply of goods or services to Taxable Person. Itincludes Tax payable under reverse chargeMechanism and IGST on import of goods.

ii) ITC under the GST Law is available on goodsand/ or services used or intended to be used incourse or furtherance of business. The provision setsto rest all issues pertaining to direct Nexus ofinputs/Capital Goods or Services withmanufacture/Sale/provision of service. Theprovision also sets to rests issues pertaining toNexus of inputs/capital goods with the final output.

iii) ITC under the GST Law is available on goodsand/ or services used or intended to be used incourse or furtherance of business. The provisionenables the availability of credit on receipt eventhough its use may be deferred. For ex, in case ofcapital goods, credit can be availed during theinstallation period even though the capital goodswill be used for business only after its installation.

iv) Tax paid on both Input and Capital Goods areeligible for claiming credit against Output Taxpayable on goods and/ or Services. Except forspecial circumstances of Transition i.e switch overfrom composition to Normal Levy or on Exemptedgoods becoming taxable, the general provisions ofITC does not make any distinction between Inputs

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or Capital Goods. Full credit of input tax on capitalgoods is allowed.

v) Input tax paid on supply of Services is eligible forcredit against output supply of Goods. SimilarlyInput Tax paid on supply of Goods is eligible forcredit against output supply of Services.

vi) "Input" means any goods other than capitalgoods used or intended to be used by a supplier inthe course or furtherance of business.

vii) "Capital goods" means goods, the value ofwhich is capitalised in the books of accounts of theperson claiming the credit and which are used orintended to be used in the course or furtherance ofbusiness. The simple definition of "Capital Goods" isa welcome change in the Revised Model GST law.(One may note "Furniture and Fixtures" capitalisedin Books of Account is "Capital Goods" and may beeligible for ITC which is ineligible under CENVATand State VAT)

viii) "Input service" means any service used orintended to be used by a supplier in the course orfurtherance of business.

ix) The claim of Credit of Input Tax paid on Goods /or services is subject to conditions, Restrictions,disallowance/blocked credits- as dealt in thefollowing paragraphs.

Conditions:-

Registered Taxable Person is entitled to credit ofinput tax subject to the following:-

(1) He is in possession of a tax invoice or debit noteissued by a registered supplier or such othertaxpaying document(s) as may be prescribed

(2) He has received the goods and/or services

(3) The tax charged in respect of such supply hasbeen actually paid to the account of the appropriateGovernment, either in cash or through utilization ofinput tax credit admissible in respect of the saidsupply.

(4) He has furnished the return under section 34

(5) Where the goods against an invoice are receivedin lots or instalments, he shall be entitled to takecredit upon receipt of the last lot or instalment

(6) In case of Supply of services, Payment of theamount to the supplier of services, towards thevalue of supply of services along with tax payablethereon must be paid within a period of threemonths from the date of issue of invoice.

(7) He has not claimed depreciation on the TaxComponent of the cost of Capital Goods under theProvisions of the Income Tax Act, 1961.

(8) The threshold date for claiming credit of Inputtax in respect of any invoice or debit note shall bedate, of furnishing of Return for the month ofSeptember following the end of financial year towhich such invoice or invoice relating to such debitnote pertains or furnishing of the relevant annualreturn, whichever is earlier.

Restrictions

1) Where the goods and/or services are used partlyfor business purpose and partly for any otherpurposes, the amount of credit shall be restricted toso much of the input tax as is attributable to thepurposes of business.

2) The claim of Credit of Input Tax is restricted tothe extent that such goods and/or Services are usedfor effecting Taxable supplies. Where the goods and/ or services are used partly for effecting taxablesupplies and partly for effecting exempt supplies,the amount of credit shall be restricted to so much ofthe input tax as is attributable to the said taxablesupplies.

Note-

For the purpose of this restriction, Taxable Suppliesincludes zero-rated supplies. Exempt Suppliesincludes Supplies on which tax is paid by recipientunder reverse charge Mechanism.

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The Central or a State Government may, bynotification issued in this behalf, prescribe themanner in which the credit referred to (1) and (2)above may be attributed.

3) In case of banking company, financial institution,non-banking financial company, engaged insupplying taxable as well as exempt services, shallhave the option to claim credit of so much of theinput tax as is attributable to the said taxablesupplies (as given in 2 above) or avail of, everymonth, an amount equal to fifty per cent of theeligible input tax credit on inputs, capital goods andinput services in that month.The option onceexercised shall not be withdrawn during theremaining part of the financial year.

4) ITC shall not be available on goods and/orservices used for personal consumption.

5) ITC shall not be available on goods lost, stolen,destroyed, written off or disposed of by way of giftor free samples.

6) ITC shall not be available on goods and/orservices for person opting for Composition Scheme.

7) In respect of supply of pipelines andtelecommunication tower fixed to earth byfoundation or structural support includingfoundation and structural support thereto

Max ITC Credit available-

1st Year= 1/3rd total input tax

2nd Year =2/3 of total input tax - credit taken in firstyear

3rd year= balance of input tax Available

Blocked Credits :-

Input Tax paid on Goods and/or Services, asmentioned in Column B below are not eligible forcredit. However, Credit on same is available ifGoods and/or Services, mentioned in column B areused for purpose as mentioned in Column C below.

A B CSr.No

Goods/Services- Creditof Input Tax notallowed

Credit Allowed on Goodsand/ or service,mentioned in Col B,subject to followingconditions

1 Motor vehiclesand OtherConveyances

If used for transportationof GoodsFor Making TaxableSupplies of :-a) Further supply ofVehicles or conveyanceb) Transportation ofpassengersc) Imparting Training ondriving, flying, navigatingsuch vehicles orconveyances

2 Food/beverages If Outward TaxableSupply isFood/beverages

3 OutdoorCatering

If Outward TaxableSupply is outdoorcatering

4 Beautytreatment

If Outward TaxableSupply is beautytreatment

5 Health Services If Outward TaxableSupply is health services

6 Cosmetic/Plastic Surgery

If Outward TaxableSupply is cosmetic/plastic surgery.

7 Membership ofclub

----

8 Health andFitness Centre

----

9 Rent a Cab10 Travel benefits

to employees onvacation such asLeave or homeTravelConcession

Government notifies itwhich are obligatory foremployer to provide to itsemployees under any lawin force.

11 Life and healthinsurance

Government notifies itwhich are obligatory foremployer to provide to itsemployees under any lawin force.

Go to Content at Glance 23

12 Works ContractService forconstruction ofimmovableproperty

- Works contract service iffor construction of Plantand Machinery

- Works contract Service ifinput service for furthersupply of works contractservice

13 Goods/ servicesreceived on ownaccount forconstruction ofimmovableproperty

Goods/ services, receivedon account, forconstruction of Plant andMachinery

Note:-

i) "Construction" includes "construction" includes re-construction, renovation, additions or alterations orrepairs, to the extent of capitalization, to the saidimmovable property.

ii) 'Plant and Machinery' means apparatus,equipment, machinery, pipelines,telecommunication tower fixed to earth byfoundation or structural support that are used formaking outward supply and includes suchfoundation and structural supports but excludesland, building or any other civil structures.

Manner of utilisation of Input Tax Credit

1) The self Assessed claim of input tax credit in thereturn shall be credited to electronic credit ledger-GST PMT 2

2) The Electronic Credit Ledger shall be utilised formaking payment of Output Tax liability as perreturn, by debiting the Electronic Credit Ledger-GST PMT 2 and crediting Electronic Tax LiabilityLedger –GST PMT1.

3)I II IIISR No Input Tax

Available:-Utilised for Creditagainst Output taxLiability :-

1 CGST CGSTIGST

2 SGST SGSTIGST

3 IGST IGSTCGSTSGST

Note:-

i) Sequence of utilisation of Credit as given inColumn III, above, must be observed.

ii) Set off SGST against CGST and Set off CGSTagainst SGST not allowed.

Provisional Claim and Final Acceptance of input taxcredit

(1) Every registered Taxable Person shall submit thedetails of inward supplies, specify Inward Suppliesin respect of which he is not eligible for ITC, whollyor partially and specify quantum of ineligible creditsrelating to non- business and non-taxable supplies,in his monthly Return FORM GST R-2.

2) He shall be entitled to take credit of input tax, asself assessed in his return.

3) Such amount of Claim of ITC shall be credited, ona provisional basis,to his electronic credit ledgerFORM GST PMT2.

4) The claim of input tax credit shall be matchedwith the details of corresponding outward supplyw.r.t. GSTIN of the supplier, GSTIN of the recipient,Invoice/Debit Note date, Invoice/Debit Notenumber, Taxable value, Tax amount.

5) The claim of input tax credit shall be consideredas matched, where the amount of input tax creditclaimed is equal to or less than the output tax paid

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on such tax invoice or Debit Note, as the case maybe, by the corresponding supplier.

Note- ITC claim is subject to Matching of Inwardsupply with Outward Supply, Payment of tax onsuch supply by the Supplier and filing of validReturn.

6) The final acceptance of claim of input tax credit inrespect of any tax period, shall be made availableelectronically to the registered taxable personmaking such claim in F ORM GST ITC-1 through theCommon Portal.

7) Any discrepancy in the claim of input tax credit inrespect of any tax period, shall be made available tothe registered taxable person making such claim andthe supplier electronically in FORM GST ITC-1through the Common Portal on or before the lastdate of the month in which the matching has beencarried out.

8) A supplier to whom any discrepancy is intimatedmay make suitable rectifications in the statement ofoutward supplies to be furnished for the month inwhich the discrepancy is intimated.

9) Where the discrepancy is not rectified by thesupplier, an amount to the extent of discrepancyshall be added to the output tax liability of therecipient in his return in FORM GST R-3 for themonth succeeding the month in which thediscrepancy is intimated.

10) A recipient in whose output tax liability anyamount has been added (as given in 9 above) shallbe liable to pay interest at the rate specified on theamount so added from the date of availing of credittill the corresponding additions are made in Taxliability.

11) If later ITC claim found to be matched afterrectification by the supplier, ITC shall be finallyaccepted and made available electronically to thetaxable person making such claim, in FORM GSTITC-1 through the Common Portal and the sameshall be reduced from output tax liability of therecipient.

12) Where any reduction in output tax liability (asper 11 above) the interest paid by the recipient (asper 10 above) shall be refunded to the recipient bycrediting the amount in the his electronic cashledger PROVIDED that the amount of interest to becredited in any case shall not exceed the amount ofinterest paid by the supplier.

(Source -http://taxongo.com/columnDesc.php?qwer43fcxzt=MTI1OA==)

5. Place of Supply of Telecommunicationservices under GST

Introduction

1. The Indian telecommunication industry is one ofthe largest and fastest growing industry in theworld today, catering to a mammoth volume ofsubscribers and second only to China in terms of thenumber of connections and subscribers1 . Given thepresent era where the Internet of Things (IoT) seemsall too real, telecommunication is a highly importanthack in our day to day lives, justifying its label as aservice of 'necessity'. At present, service tax is leviedon telecommunication services provided by atelecommunication operator in the territory of India,and selling agents or distributors of SIM cards areexempt from service tax. The advent of the proposedGoods and Services Tax (GST) from 2017 hasharboured changes to the taxation oftelecommunication services. This article seeks tocover some aspects of Place of Supply (POS) for thepurposes of taxation of the Telecommunicationsector in India.

Model GST Law

2. In preparation for the roll-out of GST in 2017, theGovernment of India released a revised Model GSTLaw (MGL) in the public domain on November25th,2016. "Telecommunication services" are defined inthe MGL thus:

"telecommunication service" means service of anydescription (including electronic mail, voice mail,data services, audio text services, video text services,radio paging and cellular mobile telephone services)which is made available to users by means of anytransmission or reception of signs, signals, writing,images and sounds or intelligence of any nature, bywire, radio, visual or other electro-magnetic means

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The Model law for levy of Integrated Goods andServices Tax (Model IGST Law) as released on June14th, 2016 provides for means to determine the POSof telecommunication services. The POS fortelecommunication services, considering the manytypes of telecommunication networks, has beenstipulated under section 6(12) of the draft IGST Actas under:

(a) For services rendered through fixedtelecommunication line, leased circuits, internetleased circuit, cable or dish antenna- the place ofsupply is where the above is installed for receipt ofservices;(b) Where services of mobile connection fortelecommunication or internet is provided on post-paid basis, the place of supply is the billing addressof the recipient;(c) Where services of mobile connection fortelecommunication and internet is provided onprepaid basis, the place of supply is the locationwhere the pre-payment is received, or the vouchersold. However, if the recharge is made throughinternet banking/ electronic mode of payment, theplace of supply is the location of the servicerecipient on the record of the supplier.Thus, the provisions as they stood under MGLrequired the suppliers of telecommunicationservices to maintain an updated database of thebilling address(es) and location(s) of the servicerecipients in order to have effective GSTimplementation. Admittedly, this would have beena superhuman exercise.

The Indian telecommunication sector at present isspread over 22 Service Areas/ Circles, with somecircles catering to more than one State. Presently, theservices provided by telecom service providers totheir customer(s) in different circles (duringroaming) will not be a taxable service as noconsideration is paid by and between the circles.Therefore, telecom service providers face no servicetax liability for such roaming services provided inthe existing regime. However, under GST, telecomservice provider in each circle might be required tobe registered separately as a distinct person. MGLtreats service provided by one taxable person toanother taxable person as a supply of service andGST is payable even on the supply withoutconsideration (Schedule I of Draft CGST Lawreleased in June 16). Thus, the question arises as towhether the services provided by telecom serviceproviders to their customers in different circles(during roaming) will be considered a as taxablesupply exigible to levy of GST?

Upon consideration of the innumerablerepresentations made by various industries after therelease of MGL, the Revised Draft Model GST Lawwas placed in the public domain. Simultaneously,the Revised Draft IGST Law, Draft GSTCompensation Law was made available onNovember 25th, 2016. The Revised IGST Law hasundergone changes in Section 9(12), whichenumerates provisions for POS oftelecommunication sector. The changes effected bythe Revised IGST Law, with a comparative analysisof the provisions under draft IGST Act are asfollows:

♦ Section 6(12) under the draft IGST Act is replacedby Section 9(12) under the Revised Draft IGST Law.Sub clauses (a) and sub clause (b) to Section 9(12)have not undergone any changes.♦ Sub clause (c) to Section 9(12) has undergonechange. In respect of pre-paid connections, throughvoucher or any other means, the sub-sectionprovides that:i. Where pre-paid Mobile connections fortelecommunication and internet services, and pre-paid direct to home (DTH) televisionservices(whether by way of a voucher or any othermeans) are supplied by a selling agent, re-seller, SIMdistributor or re-charge voucher; the POS shall bethe address of the selling agent, re-seller or SIMdistributor at the time of supply.

The above clause rakes up queries regardingthe phrase 'address on record' - is it from where aselling agent, re-seller or distributor is registered, oris the 'address on record' understood as being allpremises from where they conduct businessoperations? To illustrate, let us take an instancewhere a selling agent is registered in Gurugran (inHaryana) but has stores all over NCR. When acustomer residing in Noida (in Uttar Pradesh)purchases a pre-paid recharge voucher from theselling agent's store in Noida, determining the POSwill be an issue. Though the selling agent sells pre-paid recharge voucher in Noida (Uttar Pradesh), thePOS as per the Revised Draft IGST law shall beHaryana and not UP2. In this example, the supplierof telecommunication services is required tomaintain updated records of the address(es) of allselling agents, which is neither practicable, norfeasible.ii. Where the above services are supplied byany person (other the ones described above) directlyto the final subscriber, POS is the location wherepre-payment is received or vouchers are sold.

Whom does Section 9(12)(c)(ii) seek to castas the supplier while using the phrase 'by anyperson'? From our understanding, a

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telecommunication service is provided by atelecommunication operator to a subscriber eitherdirectly or through a selling agent /re-seller/ a SIMdistributor. Seeing as Section 9(12)(c)(i) alreadyencompasses all foreseeable kinds of suppliers (i.e.services provided through selling agent, re-seller,SIM distributor), is one to assume that 'any person'in Section 9(12)(c)(ii) refers only to atelecommunication operator?♦ Secondly, Clause (d) has been added toSection 9(12) for other cases not covered in Section9(12)(b) and (c) above. It provides that the addressof the recipient shall be the POS, and whereunavailable on record, the address of the suppliershall be the POS.

What then, is the scope of 'other cases' inclause (d), and indeed, what is its necessity? Is oneto assume that it pertains to supplies where mobileconnection or DTH connections are received forfree? Such an assumption would seem vacuous assupply without any consideration, unless specifiedin Schedule I to the Revised GST Law is not supplyexigible to GST.

Is wearable technology included in the fray,as all wearable technology is internet-enabled andsome kinds of wearable gadgets enablecommunication via subscriptions paid for via anapplication store? The question remains that, evenpaid subscriptions are covered within the ambit ofsupply with 'consideration', whether on a pre-paidor post-paid basis. Have radio-paging, or satelliteprocessing been adequately provided for? How doesthe Revised GST Law measure up to the challengesof enabling provisions for place of supply of servicesin respect of wireless telecommunication facilities?♦ Next, an Explanation has been added toSection 9(12), stipulating that where a leased circuitis installed in more than one state and aconsolidated amount is charged for supply ofservices relating to the circuit, the POS for suchservices apportionable to each state shall becomprehended on a proportionate basis asascertainable from contractual terms, and in theabsence of a contract, by any reasonable means.Conclusion

3. In conclusion, the phrase 'address of record' hasbeen bandied about with no exposition non the needfor such an insertion. Arguably, the nature ofbusiness in India is such that many re-sellers andsmall-time suppliers of recharge vouchers areneither registered, nor capable of being broughtwithin the tax net. The phrase 'any other person'also deserves amplification. Does it refer to atelecom operator as it seems to be the most directinference, or is the clause intentionally vague to

embrace un-registered or small-time suppliers orpart-time vendors?

It goes without saying that Laws are not only to berelevant for the era that they seek to govern, but alsohave to be futuristic. Seemingly, the provisions forPlace of Supply fall short of covering the entiregamut of emerging technology and interconnectivityin that respect.

6. Banking & NBFC sector - Impact ofGST

(Source :-http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=29234#)

1. ON analysis of Model GST law (revised), itappears, the same has been framed withoutsufficiently understanding the business transactionsof the banking and NBFC sectors. Some of the issueswhich require consideration of the Government inframing suitable provisions of law are discussedbelow.

Taxability of interest income earned by Banks andNBFC:

2. As per the existing law, no service tax ischargeable on interest on deposit,loans or advancesbeing an item appearing in the negative list ofservices. Further, by virtue of rule 6(2)(iv) of the(Determination of Value) Rules, 2006 interest ondelayed payment of consideration for renderingservice or sale of property is not to be included inthe value of taxable services.

2.1 The Model GST Act, Schedule III lists out certainservices which are not treated as goods or services.The schedule includes some of the servicesmentioned in the negative list of services. Asexemption is not specifically provided elsewhere asper the Model GST Act, interest on loan, deposit,delayed payment of consideration for rendering theservice etc. becomes taxable under GST. Unlessexemption is provided, it is bound to affect theborrowing cost of the common man who is notentitled to any input credit mechanism. From areading of Section 17(3) of the Model GST Act, itappears interest is likely to be exempt from GST asbank and NBFC are required to reverse 50 % of theinput credit.

Taxation of penal interest, late fee, penalty etc.section 15(2)(d):

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3. As per Rule 6(2)(iv) of the (Determination ofValue) Rules, 2006 interest on delayed payment ofconsideration for rendering service or sale ofproperty is not to be included in the value of taxableservices. However, the same has been proposed tobe taxed by including in the value of taxable servicesby the amendment proposed under Section 15(2)(d).This is going to be a tax cost to the B-2-C customers,mainly ordinary citizens from the weaker sectionsand may warrant a review.

Uploading of returns - GSTR-1 where invoice cannotbe raised due to the nature of transactions

4. The GSTR-1 which is the return of output supplieshas to be uploaded by supplier of service. The fieldsin the return include invoice number, GSTN numberetc. Under the existing rule 4A of the Service TaxRules, 1994 relaxation has been given to Bankingand NBFCs from issuing serially numbered invoices.The draft GST Invoice rule 5(2) also provides forsimilar relief. Therefore, serial number of invoicescannot be provided in serial number 5 of the GSTR-1. There are transactions like ATM card transactionswhere the settlement takes place between banksthrough the NPCI [National Payments Corporationof India] platform. The settlement of inter-bankclaims is on the basis of NPCI statement and noinvoices are raised for the purpose. The service taxliability of the member banks is discharged based onthe basis of NPCI statement.

4.1 In the absence of serially numbered invoicesbeing raised by the banks, GST liability for thesupply of service cannot be uploaded to GSTR-1.Unless a different return format is designed insteadof GSTR-1, bank and NBFC will find it difficult toupload the service tax liability to GSTN. This willalso affect the input credit availment by thecustomers of the bank. One probable solution for theabove would be to issue serially numbered invoicesregistration wise in the case of B-2-B customers andgovernment recognizing the monthly settlementstatement of NPCI with serial number equivalent toan invoice and recognizing the same as an eligibledocument for availing the input credit. This will alsohelp the banks to avail input credit based on NPCIstatement which credit is lost presently due todispute being raised by the Central ExciseDepartment. The input credit available to banks onaccount of recognition of NPCI document is a hugesum.

Definition of "address on record": section 2(3) ofModel GST law

5. "Address on record" is defined as "the address ofthe recipient as available in the records of thesupplier". In many cases, it happens that the KYCaddress can be in a different state, while the accountis opened in the state where the recipient of serviceresides due to his employment /business in thestate. If the local address is to be considered for GST,the transaction will be intra-state transaction. If KYCaddress is to be taken as address on record, then thetransaction will be inter-state. This will lead todisputes and double tax payment as both the SGSTauthorities and IGST authorities would like to havea pound of flesh. The address on record has to beclearly defined as KYC address or address in thestate where account is opened to avoid disputes inthis regard.

Credit availability reduced.

6. As per the Cenvat Credit Rule, 6(3B), 50 % of theCenvat Credit availed on input and input servicesavailed is liable to be reversed. In otherwords,Cenvat credit availed on capital goods wasnot liable for reversal under rule 6(3B). Theproposed Model law (revised) Section 17(3)provides for reversal of 50% of the input creditincluding credit availed on capital goods which isanother fatal blow to Banking and NBFC sector.

Branches all over India, facility of Centralizedregistration to be continued

7. Presently, Banks and NBFCs having branches allover India have centralized registration and halfyearly service tax returns are filed. In the GSTscenario, registration per state and returns perregistration will be required. This leads tocomplications in control and administration inaddition to number of returns per annumdepending upon the number of registrations. Thedecentralization leads to a lot of practical difficultiesin availing the input credit, payment of taxes anduploading of the returns which can be avoided bymandating centralised returns.

7. Readiness for GST migration

(Source :-https://idt.taxmann.com//topstories/105010000000014039/readiness-for-gst-migration.aspx)

Whenever an economy undergoes a major change intaxation, the first step should be to provide a properframework for existing taxpayers to adapt to thenew regime. As India moves towards the

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introduction of Goods and Services Tax (GST), theUnion Government, amidst the outcry due todemonetisation in the last two months, has taken allnecessary steps for a smooth transition. TheGovernment has been proactive in providingsupport to existing registrants of central excise,service tax and VAT, for proper transition into GST.Besides conducting workshops and creatingawareness amongst trade bodies, an exhaustivestep-wise procedure and frequently asked questions(FAQs) have been published to enable existingtaxpayers migrate their existing registrations intoGST.

The Union Government introduced the model GSTlaw in June 2016 for public comments. Pursuant topublic comments and representation from varioustrade bodies, the Union Government introduced arevised model law in November 2016. The revisedmodel law contains Section 166, which discussesmigration of existing taxpayers to the GST. Uponenactment of the GST Act, every person registeredunder the existing law having a valid PAN shall beissued a certificate on provisional basis, which shallbe valid for six months. The provisional registrationwould become final only upon submission of thenecessary documents and verification of detailssubmitted at the time of provisional registration toGSTN. This provisional registration being theimmediate point of action, the Union Governmentintroduced a state wise and statute wise scheduleproviding due dates for taxpayers to enrol under theGST. For this, a new portal www.gst.gov.in has beencreated in which the taxpayers can login andcomplete the necessary steps to migrate theirexisting registrations into the GST.

The process started with State-VAT/ ACES portalgiving pop-ups/ issuing circulars of updatingmobile numbers and e-mail IDs of authorisedpersons on the State-VAT/ ACES website, throughwhich the one-time passwords (OTP) can becommunicated. Having updated the details, theprocedure for migration begins with logging intoState-VAT/ ACES portal and obtaining aprovisional ID and password. With this, thetaxpayer logs onto the GST portal. Taxpayers, whodid not update their mobile numbers and email-IDson the State-VAT/ACES website, have the option ofupdating them on the GST portal. Upon logging intothe GST portal, it will send two separate OTPs to themobile number and email-ID, which will remainvalid for 15 minutes. By entering the OTPssimultaneously, a taxpayer can create a new user IDand password and log onto the portal in future. Theuser ID and password can be obtained after

answering 5 security questions asked at the portal(which may be used for retrieving the password inthe future).

Once the login formalities are complete, somedetails will be auto-populated in the GST portal forthe taxpayer as follows:

♦ PAN of the taxpayer♦ Legal name of the taxpayer♦ State♦ Ward/ Circle/ Sector♦ Email address and mobile number ofprimary authorised signatory entered duringenrolment at the GST system portal.Further, various other details are required formigrating into the GST. While preparing to gathersuch information and/ or documents, taxpayersshould keep in mind the following that are pre-requisite for migration or required when uploadingdata/ information on GST portal.

♦ Information related♦ Documentation related♦ Business relatedA. Information related

♦ Registration details: While providingbusiness details, the taxpayer is also required toprovide the details of various registrations obtainedi.e., VAT, CST, central excise, service tax, luxury tax,entertainment tax, etc.♦ Ward/Sector/Circle details: In the ward/circle/ sector number drop-down list appearing onthe portal, the taxpayer has to select the ward/circle/ sector number of their business.♦ Details of promoters/ partner/ directors/other authorised signatory: Name, address, PAN,etc., of the concerned persons must be mentioned onthe GST portal.♦ Details of primary authorised signatory: Aprimary authorised signatory is primarilyresponsible for performing actions on the GSTsystem portal on behalf of the taxpayer. Allcommunications from the GST portal relating to thetaxpayer will be sent to the primary authorizedsignatory. Therefore, the name, address and otherdetails of the primary authorised signatory needs tobe mentioned on the GST portal. Further, the mobilenumber and e-mail ID of the primary authorisedsignatory to whom future correspondences shall besent should be provided on the GST portal.♦ Principal place of business and additionalplace of business: Details of complete address andcontact information of the place of business, natureof business activity being carried out at that

Go to Content at Glance 29

particular place of business and the nature ofpossession (i.e. whether owned or rented) of theplace of business needs to be filled up.♦ Details of goods and services: Details of thetop five goods and services need to be mentioned inthe enrolment form. While providing the details ofgoods, the HSN codes also need to be mentioned inthe form.♦ Details of bank accounts: Account number,type of account and the IFSC code need to bementioned on the portal.B. Documentation related

♦ Proof of constitution of business: Whileproviding the details of business, the taxpayer isrequired to attach a proof of constitution ofbusiness, which can be a certificate of incorporationor any other valid document appearing in the drop-down menu.♦ Details of directors: Photograph of thedirectors need to be uploaded on the portal. Themaximum file size of the photograph should be 100Kb.♦ Details of authorised signatory: The proof ofappointment of an authorised signatory along withphotograph needs to be uploaded on the GST portal.In case of multiple authorised signatories for asingle business entity, one authorised signatoryshould be designated as the primary authorisedsignatory and the email-ID and mobile number ofthat person should be provided at the time ofenrolment. The size of the photograph should notexceed 100 KB while the size of authorization lettershould not exceed 1 MB.♦ Principal and additional place of business:Depending upon the type of place of business, thefollowing documents need to be submitted.

Type of ownership Documentsa. Owned premises Latest property taxreceipt or municipal khata copy orelectricity billb. Rented or leased premises

a. Copy of rent/ lease agreementb. Any document in support of the ownership of thepremises of the lessor, such as the latest property taxreceipt or the municipal khata copy or a copy of theelectricity bill

c. For premises not covered in (a) and (b) above

a. A copy of the consent letterb. Any document in support of the ownership of thepremises of the consenter such as municipal khatacopy or copy of the electricity billc. The same documents may be uploaded for sharedproperties

♦ Details of bank accounts: Based on thedetails of the bank account mentioned in theinformation, the taxpayer has to attach the first pageof the bank passbook or one page of the bankstatement containing details of the account number,name of account holder, MICR, IFSC and branchdetails.♦ Digital signature certificate (DSC): Digitallysigning the application is the last step in themigration procedure for which a Class 2 or Class 3DSC is required. Note that digital signing using aDSC is mandatory in case of LLP and companies.C. Business related

For any taxpayer, one of the most important aspectsis to analyse their business organisation and planaccordingly before migrating into the GST to avoidany unwanted situations. The following examplesexplain this.

♦ More than one unit (same business vertical) in thesame state: Currently, under the VAT regime, acompany can have more than one registration in aState. There are no restrictions in obtaining andmaintaining more than one VAT registration.However, under the GST, a company can opt forstate wise single registration i.e., single registrationfor all places of business in a state. If a taxpayer optsfor separate registrations i.e., different registrationsfor different units in the same State under GST (ifpermitted by the jurisdictional authority), it will payGST on movements of goods between two units.Although the same would be creditable to therecipient, it would lead to blockage of funds.Therefore, while migrating into GST, the taxpayershould take a considered decision whether theyshould take a state-wise single registration coveringall units or take unit-wise multiple registrations.♦ More than one unit (different businessverticals) in the same state: Under the GST regime,section 23 of the revised model GST law provides anoption to opt for separate registrations for eachbusiness vertical in a State. The taxpayer mustclearly identify the business verticals as per thedefinition of "business verticals". It may be notedthat it is upon the decision of the taxpayer to obtainsingle or multiple registrations for different businessverticals. This would also have an impact on theunutilized credit pertaining to each businessvertical.♦ Subsidies: If a taxpayer has two units in aState of which one unit is new and is currentlyenjoying State incentives/ subsidies, whereas, thereare no such incentives/ subsidies for other unit.Currently, the taxpayer has obtained separate VATregistration for each unit. Under the GST regime, the

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taxpayer has to understand that whether thesubsidies/ incentives would be available for singleregistration or not. For taxpayers who have alreadymigrated as a single registration in a State, in suchsituations the taxpayer may have to re-examine theirregistrations once there is some clarity on thisaspect.♦ Merger/ De-merger/ Slump sale: In case ataxpayer has business plans for merger/ de-merger/ slump sale in the near future, theregistrations of business units should be donekeeping in mind the proposed plan.Many more business aspects need to be consideredbefore migrating into the GST, which depends on acase-to-case basis. The taxpayer should look into itbefore taking any decision on the migration ofexisting registrations into GST. Simultaneously, thetaxpayer has to keep in mind the due dates specifiedfor migration of various categories of registrants inthe released enrolment schedule.

Upon successful verification, the GST portal systemshall generate an acknowledgement containing theacknowledgement receipt number (ARN) within 15minutes of submission. This number should bestored as it is proof that the taxpayer hassuccessfully migrated and all futurecommunications/ tracking of status shall be sent/done using the ARN number.

With the wipe out of the winter session ofParliament, there seems less chances of the UnionGovernment being able to implement the GST witheffect from April 1, 2017. However, the steps takenby the Government for the migration of existingregistrations into the GST depict the proactiveattitude and the inclination to make GST a reality.Howsoever, amidst all this political uncertainty, thetaxpayers benefit, as they obtain ample time tosmoothly migrate into GST regime and plan betterfor future!!

8. Changes in definition of ‘’Supply’’under Old vis-à-vis New Model GSTLaw

(Source :-https://idt.taxmann.com//topstories/105010000000013988/changes-in-definition-of-%E2%80%98%E2%80%99supply%E2%80%99%E2%80%99-under-old-vis-%C3%A0-vis-new-model-gst-law.aspx)

Introduction1. The concept of sale, manufacture, service forapplicability of respective taxes prevalent under thecurrent regime will be dissolved under GST and theapplicability of GST will be triggered by the term'supply'. Thus, understanding of the term 'Supply'holds supreme importance.

The government on releasing the Model Goods andServices Tax Law in June 2016 ('Old MGL') coinedthe term 'Supply' whereby the Government tried toencompass all the transactions under the GST net,leaving no room for any exemption (except for theexemptions specified under the GST law). However,the definition of supply had various anomalies/ambiguities regarding which concerns were raisedby multiple stakeholders (including industry, legalfraternity etc.).

The Government appreciated the suggestions madeby various Stakeholders and amended the definitionof 'Supply' while introducing the Model Goods andServices Tax Law in November 2016 ('New MGL').However, basic tenet of the definition whichprovided for an inclusive scope for all transactionssuch as sale, transfer, barter made for considerationin the course of furtherance of business, remainssame. We have highlighted the important changesas well as the implications of such changes in thedefinition of 'Supply'.

Supply- Definition of

2. To begin with, the definition of 'supply' providedunder New MGL has 5 sub-sections and refers to 4schedules. The nature of transactions covered underfour schedules are as follows:

♦ Schedule I specifies list of transactionscarried out even without consideration whichwould constitute 'supply'♦ Schedule II specifies transactions whichshall be treated as supply of 'goods' or 'services'respectively♦ Schedule III provides for transactions thatare neither 'supply of goods' nor 'supply of services'.♦ Schedule IV provides for activities ortransactions undertaken by Central Government, aState Government or any local authority which shallbe treated neither as a 'supply' of goods nor asupply of servicesComparison of New/and old Definition of Supply

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3. To understand the changes, it is imperative that we compare the definition of 'Supply' in a tabulated form:

Clause Old Definition New Definition Comments/ Anomalies/ Ambiguitiesremoved post introduction of newdefinition

1(a) all forms of supply ofgoods and/or servicessuch as sale, transfer,barter, exchange, license,rental, lease or disposalmade or agreed to bemade for a considerationby a person in the courseor furtherance of business

all forms of supply ofgoods and/or servicessuch as sale, transfer,barter, exchange, license,rental, lease or disposalmade or agreed to bemade for a considerationby a person in the courseor furtherance of business

No change in the definition of New MGL.It is from this clause that all transactionsunder the sun will be exigible to GSTunless specifically exempted

1(b) importation of service,whether or not for aconsideration andwhether or not in thecourse or furtherance ofbusiness, and

importation of services,for a considerationwhether or not in thecourse or furtherance ofbusiness, and

Import of services by non-assessee's(persons not required to obtainregistration) on FOC basiswas exigible toGST.However, under the new definition, anysuch service imported by non-assessee'swithout consideration is not exigible toGST.It is important to note that under the newdefinition there will be legal as well ascompliance implications for certaintransactions. One example is import ofservice by an individual for self-consumption against consideration. Thistransaction will attract GST and theservice provider will be required todischarge GST and take registrationhimself or through an agent.

1(c) a supply specified inSchedule I, made oragreed to be madewithout a consideration.

a supply specified inSchedule I, made oragreed to be madewithout a consideration.

There are considerable changes in the'Schedule I', which have been discussedbelow.

2 Schedule II, in respect ofmatters mentionedtherein, shall apply fordetermining what is, or isto be treated as a supplyof goods or a supply ofservices.

Schedule II, in respect ofmatters mentionedtherein, shall apply fordetermining what is, or isto be treated as a supplyof goods or a supply ofservices.

No change

2A Where a person acting asan agent who, for anagreed commission orbrokerage, either suppliesor receives any goodsand/or services on behalfof any principal, thetransaction between suchprincipal and agent shallbe deemed to be a supply.

----- This clause has been deleted from thedefinition, amended and then inserted inSchedule I. The new clause providesmore clarity to such nature oftransactions.This clause in Schedule I provides thattransactions for supply of goods (theearlier definition provided for services aswell) between Principal to Agent andvice-versa even without considerationwould be exigible to GST

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3 Subject to sub-section (2),the Central or a StateGovernment may, uponrecommendation of theCouncil, specify, bynotification, thetransactions that are to betreated as—(i) a supply of goodsand not as a supply ofservices; or(ii) a supply ofservices and not as asupply of goods; or(iii) neither a supplyof goods nor a supply ofservices.

- The said clause, has been retained andhas been shifted from 3rd to 4th clause

3 - Notwithstandinganything contained insub-section (1), (a)activities or transactionsspecified in schedule III;or (b) activities ortransactions undertakenby the CentralGovernment, a StateGovernment or any localauthority in which theyare engaged as publicauthorities as specified inSchedule IV, shall betreated neither as asupply of goods nor asupply of services.

This clause has been newly inserted. Thisclause refers to Schedule III and ScheduleIV. As mentioned above, Schedule IIIrefers to transactions that are neither'supply of goods' nor 'supply of services'and Schedule IV provides for activities ortransactions undertaken by Centralgovernment, a State government or anylocal authority which shall be treatedneither as a 'supply' of goods nor asupply of services.Further, the old MGL did not provide forSchedule III (as provided under NewMGL), however, few transactions coveredunder Schedule III of New MGL, wereprovided in few sections of the Old MGL.

As regards transactions enlisted underSchedule IV of Old MGL vis-à-vis underNew MGL, there is no such difference.

4 Notwithstandinganything contained insub-section (1), the supplyof any branded service byan aggregator, as definedin section 43B, under abrand name or tradename owned by him shallbe deemed to be a supplyof the said service by thesaid aggregator

---- The said clause has been deleted underthe current law. This comes as a surprisefor the industry and legal fraternityconsidering the fact that the term'aggregator' was introduced in budget2015 to tap service providers such as'OLA', 'UBER' etc.With this deletion various ambiguitiessuch as whether a service provider willqualify as an aggregator or not will alsocome to rest.

However, to keep such transactionsunder the GST ambit, such aggregatorshave now been covered under thedefinition of 'e-commerce operator'.Though the Government has tried tosimplify the law by bringing all suchaggregators under the definition of e-

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commerce operator, the complianceburden on such service providers hasbeen increased manifold.

5 -------------- The tax liability on acomposite or a mixedsupply shall bedetermined in thefollowing manner —

(a) a composite supplycomprising two or moresupplies, one of which is aprincipal supply, shall betreated as a supply ofsuch principal supply;(b) a mixed supplycomprising two or moresupplies shall be treatedas supply of thatparticular supply whichattracts the highest rate oftax.

Though OLD MGL covered suchtransactions under GST ambit by definingthe term 'composite supply', however, nomechanism was provided to ascertain therate of Tax leviable on such transactions.For reference, we have provided belowthe definition of 'composite supply' asprovided under Old MGL:

'(27) "composite supply" means a supplyconsisting of -

(a) two or more goods;(b) two or more services; or(c) a combination of goods and servicesprovided in the course or furtherance ofbusiness, whether or not the same can besegregated;'

The new MGL has bifurcated theabovementioned transactions by defining'composite supply' and 'mixed supply'.The definitions of 'Composite supply' aswell as 'Mixed supply' is as follows:

"composite supply" means a supply madeby a taxable person to a recipientcomprising two or more supplies ofgoods or services, or any combinationthereof, which are naturally bundled andsupplied in conjunction with each otherin the ordinary course of business, one ofwhich is a principal supply;

"mixed supply" means two or moreindividual supplies of goods or services,or any combination thereof, made inconjunction with each other by a taxableperson for a single price where suchsupply does not constitute a compositesupply;'

In view of the above, one can determinethe rate of tax of goods as applicable onthe principal supply (as provided undercomposite supply) or on goods/ servicesso supplied.

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Changes in Respective Schedule

4. Having analysed the changes in the definition of'supply' we now proceed to highlight the changes inthe respective schedules.

Schedule I (of Old MGL) – Entries as provided in theearlier schedule covered following transactions:

♦ Sale/disposal of business assets♦ Application of business assets to private or non-business use♦ Services put to a private or non-business use♦ Assets retained after de-registration♦ Supply of goods/ services by a taxable person toanother taxable or non-taxable person in the courseor furtherance of business♦ Supply of goods by a registered taxable supply toa job worker in terms of Section 43A not to betreated as supply of goodsFew anomalies

The above listed transactions had various anomalieswhich are simply evident from reading such entries.We have highlighted few anomalies which are asfollows:

♦ Transfer/ disposal of business assets againstwhich input credit was not availed would alsoattract GST. Such anomaly has been removed underthe New MGL.♦ Business assets/ services put to private or non-business use were taxable, and the correspondingcredit of using such business assets/ services wasdisallowed. The Government has removed the levyon use of business assets for private or non-businessuse.However, Schedule I of New MGL includes suppliesbetween related persons in course or furtherance ofbusiness. Due to this, non-monetary incentives byemployer to employee may still be under the tax net,even if given for personal use. This is because suchincentives can be construed to be in course orfurtherance of business.

♦ Assets retained post de-registration by an assesseewere exigible to GST. This clause would covertransactions wherein individual proprietor's wouldbe exigible to GST. The Government has removedthis clause in the new MGL.♦ Supply of goods/ services without considerationby a taxable person to another taxable/ non-taxableperson in the course or furtherance of business wasdeemed supply. Through this transaction, all FOCsupplies by taxable person to any person fell underthe GST net. This provision faced enormous

opposition from industry as it directly impactedtheir marketing and sales promotional operations.Hence, the Government has removed this clause andaccordingly, tax is not leviable on FOC suppliesprovided such supplies are made to related personsif in course or furtherance of business.♦ The entry pertaining to supply of goods to jobworker has been removed from the schedule and,therefore, such transaction would now be treated assupply. However, under the New MGL tax will notbe levied on supply to job worker on fulfilment ofcertain conditions.As regards Schedule II of Old MGL, confiscationand sale of assets of a taxable person (by banks,financial institutions etc.) for recovery of debt wasconsidered as supply by such taxable person. Thenew law has removed this entry.

Schedule III which has been inserted only in the newMGL, broadly covers various transactions such as:

♦ Services by any employee to employer in course ofor in relation to his employment♦ Services by any Court or Tribunal♦ Functions performed by the Members ofParliament, State Legislature, Panchayats,Municipalities, and Other local authorities. Alsoduties performed by any person who holds any postunder provisions of constitution♦ Services by a foreign diplomatic mission♦ Services of funeral, burial etc.No change has been made in entries in Schedule IV.

Conclusion

5. With the above analysisone can see that thedefinition of supply has evolved under the newMGL as certain ambiguities have been removed.However, the drafting of the legislation still requiresa lot of work in order to bring clarity and avoid anyfutile litigation on such provisions.

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9. GST- Impact on Logistic Companies

INDUSTRY OVERVIEW

Indian Logistics Industry is expected to grow at aCAGR of 8.6 percent between 2015 and 2020, whichgrew at a CAGR of 9.7 percent during 2010-2015.

Transportation and Communication accounted for7.0 percent of the nation's GDP in 2015, accountingfor around US $130.44 billion.

The Indian logistics industry is fragmented andunder developed. Logistics costs are relatively highdue to poor physical and communicationinfrastructure; high dwell time at ports; low levels ofcontainerization; and a multi-layered tax systemcontributing to significant delays at border crossingpoints.

With GST Government reform initiatives, promotionof manufacturing and trade, improving investmentclimate are expected to transform the industry anddrive growth between 2016 and 2020.

Development of transportation and logistics-relatedinfrastructure such as dedicated freight corridors,logistics parks, free trade warehousing zones, andcontainer freight stations are expected to improveefficiency.

IMPACT OF GST IN GENERAL

INCREASE TAX BASE :

GST is a multi-stage tax, it provides for an input taxcredit mechanism, and since every link in the valuechain, including dealers and distributors, willrequire evidence of compliance by its preceding linkto claim the required set-offs, it is likely to broadenthe tax base byincreasing voluntary compliance.

GST WILL BOOST DIRECT TAX:

GST implementation is likely to result in liftingdirect tax collections as: (1) GST payments by tax-payers will be linked to their respective PermanentAccount Number (PAN); (2) the National SecuritiesDepository Limited (NSDL), which maintains theTax information System (TIN), will also look afterthe GST database. This integration of the indirect taxsystem with the income tax system will enableauthorities to triangulate information, therebyautomatically leading to improved tax buoyancy.

ADVANTAGES TO INDIAN ECONOMY:

The structural nature of this tax reform is likely tocreate a better environment for doing business inIndia over time, which would create a platform forhigher economic growth. It will bring down costswithin the system, give better control to governmenton taxation, reduce unaccounted part of theeconomy, thus adding to government resources.This benefit could be then used to fund India’sdevelopment and increase its competitivenesswithin the global economy.

INFLATION IN THE INITIAL STAGE:

Implementation of the GST in the near-term couldbring some upturn in inflation; however, the impactshould be transitory.

IMPACT OF GST ON LOGISTIC COMPANY

Goods and Services Tax (GST), which promises tointegrate India’s multi-layered indirect tax systeminto a single unified one, unshackling India from itsbureaucratic web and improving the ease of doingbusiness.

Logistics companies in India have evolved over theyears from being mere first-party logistics providers(1PL) to second-party logistics providers (2PL) tointegrated fourth-party logistics providers (4PL) byproviding a complete package of logistics services,including transportation, warehousing, pooldistribution, management consulting, logisticsoptimization, etc. and complementing them withadvanced supply chain facilities.

MODEL OF LOGISTIC INDUSTRY AFTER GST

The proposed goods and services tax (GST) will helpcompanies reduce logistics cost by redesigning theirsupply chains with four key structural changes

1) India becomes one big market, there will be fewerand larger warehouses.

2) GST will result in larger trucks on road while theoverall number of vehicles will go down. The newtax will result in greater adoption of a hub-and-spoke model in segments such as warehousing, coldchain, container freight stations and inlandcontainer depots.

3) GST will also bring in scale to logistics companiesas there will be a lot of savings, stoppage of wastageand lower delays,

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4) These above changes will lead to greatereconomies of scale for transport operators and leadto more companies outsourcing their logisticsoperations.

ADVANTAGES OF GST TO LOGISTICCOMPANIES

COST / TIME SAVING:

Bigger warehouses and end market driven logisticsplanning is likely to result in meaningful costssavings over time. On account of entry taxes andheavy paper work at state check posts, there is anadditional 5-7 hours added to the transit time forinter-state transport of goods. Abolishment of entrytax and easier tax compliance procedures is likelyresult in easier movement of goods across thecountry.

FORWARD INTEGRATION :

As these companies gather scale, that will enablethem to offer services at lower costs. As a result,companies for whom transportation is not a corepart of their business will increasingly outsourcetheir logistics operations to third party logistics(3PL) and fourth party logistics (4PL) serviceproviders.

SINGLE RATE:

Standard tax rates will allow corporations to moveaway from the practice of building a warehouse indifferent states to adhere to each state’s tax code. Abig packaged consumer goods company could thusmake do with one large mother warehouse at criticalpoints in the country and employ logisticscompanies to manage distribution and supplychains

DISADVANTAGES OF THE PRESENT SYSTEM

State-border checkpoints, which are tasked withmaterial scrutiny and location-based tax compliance,negatively impact the overall production andlogistics time and account for roughly 60% of atruck’s transit time.

DEMAND OF THE LOGISTIC INDUSTRY

After much deliberation, petroleum has beenbrought under the purview of GST but it will beexempt until a date announced by the GST Council.For logistics industry, petroleum is one of the majorinputs and it would be a welcome move if

petroleum were to be ‘non- exempt’ right from thestart. This would enable logistics companies to availcredit for the petroleum used in the course ofproviding logistics services.

ADVANTAGE OVER RIVAL( due to predictability )

With GST when all check posts are gone, a truck thatdeparts from Kashmir to Chennai _GoBack,willreach on time. Goods will be delivered on time.Predictability levels post GST will significantlyimprove. For Example if you are moving goods byair ,the price differential between air and road isnearly one-eighth. Once logistics manager sees thathe can manage his inventory in a manner where itgets more predictable by road, people will switchmore volume by road.

MAIN CUSTOMERS OF THE LOGISTICINDUSTRY

1) Healthcare and pharmaceutical industry.

2) Auto and auto components industry

3) Lifestyle and ready made garments,

4) High tech, engineering and

5) Mobile telephone including base towers andmobile telephones.

CONCLUSION

GST has the potential to accelerate growth in thelogistics industry. However, its complete impact canonly be understood after the announcement of thefinal GST Law and Rules.

With GST’s imminent implementation, the logisticsindustry should start exploring different supplychain models with their clients and at the same timedevelop a completely synchronized ERP accountingsystem to support inventory supply management asrequired under the GST regime.

GST is the game changerfor the logistics industryand the industry is eagerly awaiting for the rolloutof GST.

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10. 40% service-tax abatement for touroperators – An insight into

(Source :-https://idt.taxmann.com//topstories/105010000000014042/40-service-tax-abatement-for-tour-operators-%E2%80%93-an-insight-into.aspx)

Introduction

1. Service tax on tour operator service was madetaxable w.e.f. 01st September 1997. Prior to 01st July2012, tour operator service was taxable under clause(n) of section 65(105) of Finance Act, 1994. Meaningof tour operator was also defined under Section 65(115) of Finance Act 1994. After budget 2012, theparadigm of taxation of services has been shiftedfrom selective list to negative list. Under selectiveapproach of taxation, Government uses to defineeach taxable service under section 65(105) of thefinance Act, 1994.To avoid the litigation, undernegative list approach, instead of defining separatedefinition for various services, a comprehensivedefinition of service is defined under Section 66B(44) of Finance Act 1994 as, any activity carried outby a person for another for consideration, andincludes a declared service. Therefore, there is noseparate definition for tour operator service inFinance Act 1994 post enactment of Section 66B anddiscontinuation of Section 65 of Finance Act 1994.However, to provide litigation free benefit ofabetment, meaning of tour operator is explainedunder abatement Notification No 26/2012 dated on20th June 2016 as, "tour operator" means any personengaged in the business of planning, scheduling,organizing, arranging tours (which may includearrangement for accommodation, sightseeing orother similar services) by any mode of transport,and includes any person engaged in the business ofoperating tours. Since the meaning of tour operatoris part of abatement notification, its application isalso restricted to the extent of availment ofabatement.

Abatement is nothing but the portion of serviceexempted from the payment of the service tax.Abatement is optional in nature and assessee may ormay not avail the benefit of abatement whilepayment of Service Tax liability. As far as touroperator is concerned, original abatement schemewas available under Notification No 26/2012 STdated on 20th June 2016. A step towardimplementation of GST, recently Government ofIndia has issued Notification 04/2017 ST datedon12th January 2017 to amend Notification 26/2012ST dated on 20th June 2016. to rationalize the

abatements scheme for tour operator. Following arethe changes made in respect of tour operatorservices and these changes are to be effective from22nd January 2017.

Major Changes in the tour operator services

2. Before analyzing various changes, it is reallyimportant to see the existing provision of abatementunder Service tax. As mentioned earlier abatementis optional and one may pay the service tax on grossvalue charged and can avail full Cenvat credit underCenvat Credit Rules, 2004 in respect of Input,Capital Goods and Input service used in theprovision of tour operator service. Option to pay theService tax on abated value is available to touroperator under Notification No 26/2012 ST.However, it is conditional notification and touroperator can avail benefit of abatement only onfulfillment of such conditions, otherwise, Service taxis payable on gross value charged.Following are theexisting abatement schemes available for touroperator

Sr.No.

Descriptionof taxableservice

% oftotalvalue onwhichtax ispayable

Condition

1 2 3 411 Services by

a touroperator inrelation to,-(i) a tour,only for thepurpose ofarrangingor bookingaccommodation forany person

10 (i) CENVAT credit oninputs, capital goodsand input servicesother than inputservices of a touroperator, used forproviding the taxableservice, has not beentaken under theprovisions of theCENVAT CreditRules, 2004.(ii) The invoice, bill orchallan issuedindicates that it istowards the chargesfor suchaccommodation.(iii) This exemptionshall not apply insuch cases where theinvoice, bill orchallan issued by thetour operator, inrelation to a tour,

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includes only theservice charges forarranging or bookingaccommodation forany person but doesnot include the costof suchaccommodation.

(ii) toursother than(i) above

30 (i) CENVAT credit oninputs, capital goodsand input servicesother than inputservices of a touroperator, used forproviding the taxableservice, has not beentaken under theprovisions of theCENVAT CreditRules, 2004.(ii) The bill issued forthis purpose indicatesthat it is inclusive ofcharges for such atour and the amountcharged in the bill isthe gross amountcharged for such atour.";Government of Indiahas amendedabatement scheme fortour operator videnotification 04/2017dated on 12thJanuary 2017.Followingamendments aremade in relation totour operator

Government of India has amended abatementscheme for tour operator vide notification 04/2017dated on 12th January 2017. Following amendmentsare made in relation to tour operator

Sr.No.

Description oftaxableservice

% oftotalvalue onwhichtax ispayable

Condition

1 2 3 4"11 Services

by a tour60 (i) CENVAT credit on

inputs and capital

operator goods used forproviding the taxableservice, has not beentaken under theprovisions of theCENVAT CreditRules, 2004.(ii) The bill issued forthis purpose indicatesthat it is inclusive ofcharges ofaccommodation andtransportationrequired for such atour and the amountcharged in the bill isthe gross amountcharged for such atour including thecharges ofaccommodation andtransportationrequired for such atour.".

On harmonious reading of above two tables,following two relevant changes are found withrespect to tour operator services

♦ Changes in the abatement percentage and♦ Changes in the availment of Cenvat CreditAnalysis of Amendments

(i) Changes in the abatement percentage :- Underexisting scheme, two separate abatements are given.Tour operator who is only arranging and bookingaccommodation for any person and where the costof accommodation is included in such invoice, Billor Challan, tour operator can claim 90% abatementin respect of such service. Thereby, Service tax ispayable only to the extent of 10% of the value.

Services by a tour operator in relation to atour, other than only arranging and bookingaccommodation and where gross amount chargedincludes charges toward accommodation andtransportation, 70%abatement on value can beclaimed by the tour operator and effectively Servicetax is payable on 30% of value at the rate of 15%.

Under revised scheme, abatement of flat40% is available on the value in respect of allservices provided by the tour operator. Effectively,on 60% portion Service tax is payable. Theabatement is available only when bill issued forsuch tour is inclusive of charges of accommodationand transportation for such tour. After this change

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cost of travel particular in relation to tour willincrease.(ii) Changes in the availment of Cenvat Credit: -Under existing scheme Cenvat Credit on CapitalGoods and Input is not available. Credit in respectof Input service is also restricted to the extent ofthose services on which service tax is paid by othertour operator.

In the amended notification, only credit ofCapital goods and Input used in the provision oftaxable service is disallowed. That means, credit ofService tax paid on all Input services used in theprovision of taxable service shall be available to touroperator. Therefore, Tour operator can avail creditof all input service used for the provision of touroperator services. This will be the great relief totourism industry as it will lead to removal ofcascading to the extent of credit on the input service.Concluding Remark

3. Though the recent amendment in tour operatorservice looks like rationalization of abatementscheme, but this will definitely lead to increase inthe cost of travel industry at least by 10 to 15%.Questions like taxability of only hotel booking arestill unanswered. These amendments will alsodisturb the existing financial models of tours andtravel industry. However, restriction less credit ofinput service is the good move. This will definitelyneutralize the effect of increase in cost of travelindustry to some extent.

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11. Returns under model GST law

(Source :-http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=29147#)

SECTION 32 to 42 of MODEL GST LAW deals with the various Returns to be filed electronically by everyregistered taxable person. Government has also published Draft Goods and Service Tax Return Rules, whichcontain 25 Rules and 27 Formats for Returns. An attempt has been made to explain these draft returnprovisions in a simple tabulated method so that the Taxpayers can understand the step-by-step processlucidly.

Form GSTR-1 – Section 32 read withRule 1 - (to be filed by RegisteredTaxable person, Non-ResidentTaxable person and supplies effectedthrough e commerce)

Details of outward suppliesof taxable goods and/orservices effected.The "Detail of Outwardsupplies" shall includeinvoice, debit notes, creditnotes and revised invoicesissued during tax period.

On or before 10th day of the monthsucceeding the tax period.Every RTP who has beencommunicated the details undersection 33 [3] and Section 33[4] byrecipient of supplies, can eitheraccept or reject the detail socommunicated on or before 17th ofthe next month following the taxperiod. The detail furnished by himunder point 1 shall stand amended.Every RTP who has furnished thedetail of outward supplies andremain unmatched u/s 37 and 38shall rectify the error and omissionand shall pay interest on shortpayment of tax, if any.No rectification shall be allowedafter furnishing the return u/s 34 forthe month of September followingthe end of financial year orfurnishing the annual return whichever is earlier.

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Form GSTR-1AReturns Rule 1(3).

The details of inwardsupplies added, corrected ordeleted by the recipient inhis FORM GSTR-2 shall bemade available to thesupplier electronically inFORM GSTR-1A.

The details of inward suppliesadded, corrected or deleted by therecipient in his FORM GSTR-2 or FORM GSTR-4 shall be madeavailable to the supplierelectronically in FORM GSTR-1A and such supplier may eitheraccept or reject the modifications

made by the recipient and FORMGSTR-1 furnished by the suppliershall stand amended to the

extent of modifications accepted byhim.

Form GSTR-2 . Section 33 read withReturns Rule 2 –(to be filed byRegistered Taxable person, Non-Resident Taxable person andsupplies effected through ecommerce)To be filed Monthly after 10th andbefore 15th of Succeeding month ofrelevant tax period.

Details of inward supplies oftaxable goods and/orservices claiming input taxcredit

Taxable person required to furnishthe details of inward supplies ofgoods and/or services receivedduring a tax period shall, on thebasis of details contained in PartA ofFORM GSTR-2A, prepare suchdetails and furnish the samein FORM GSTR-2, after includingtherein details of such other inwardsupplies, if any, required to befurnished.The recipient of goods and/orservices shall specify the inwardsupplies in respect of which he isnot eligible, either fully or partially,for input tax credit in FORM GSTR-2where such eligibility can bedetermined at the invoice level.The recipient of goods and/orservices shall declare the quantumof ineligibleinput tax credit on inward supplieswhich is relatable to non-taxablesupplies or for purposes other thanbusiness and cannot be determinedat the invoice level.

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Form GSTR-2A –After the due date of filing of FORMGSTR-1.Return Rule 2.

Details of inward suppliesmade available to therecipient on the basis ofFORM GSTR-1 furnished bythe supplier

The details of outward suppliesfurnished by the supplier shall bemade available to each of theregistered taxable persons(recipients) in Part A of FORMGSTR-2A after the due date of filingof FORM GSTR-1.The details of invoices furnished byan Input Service Distributor in hisreturn inFORM GSTR-6 under rule7 shall be made available to therecipient of credit in Part Bof FORMGSTR 2A and the said recipientmay include the same in FORMGSTR-2.The details of tax deducted at sourceby the deductor under section 37furnishedin FORM GSTR-7 shall be madeavailable to the deductee in PartC of FORM GSTR-2A and the saiddeductee may include the sameinFORM GSTR-2 .The details of tax collected at sourceby an e-commerce operatorfurnished in FORM GSTR-8 shallbe made available to the concernedtaxable person in Part D of FORMGSTR 2A and such taxable personmay include the same in FORMGSTR-2.

Form GSTR-3 – Section 34 read withRule 3) – Monthly by 20th ofSucceeding month of relevant taxperiod . ISD to file Monthly by 10thof Succeeding month of relevant taxperiod.(to be filed by Registered TaxablePerson, Composition Supplier underSection 9, Non-Resident taxableperson, Input Service Distributor(ISD), Person required to deduct taxat source under Section 46 of MGL,and Supplies effected through e-Commerce)

Monthly return on the basisof finalization of details ofoutward supplies andinward supplies along withthe payment of amount oftax.

Part A of the return shall beelectronically generated on the basisof information furnished throughreturns in FORM GSTR-1, FORMGSTR-2 , electronic credit ledger,electronic cash ledger and electronictax liability register of the taxableperson.Every registered taxable persondischarge his liability towards tax,interest, penalty, fees or any otheramount payable under the Act orthese rules by debiting the electroniccash ledger and/or electronic creditledger as per the details containedin Part B of the return in FORMGSTR-3.A registered taxable person,claiming refund of any balance inthe electronic cash ledger may claimsuch refund in Part Bof the returnin FORM GSTR-3 and such returnshall be deemed to be an applicationfiled

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under section 48.The interest to be refundedshall be claimed by the taxableperson in his return in FORMGSTR-3 andshall be credited to his electroniccash ledger in FORM GST PMT-3 and the amount credited shall beavailable for payment of any futureliability of interest or the taxableperson may claim refund of theamount.

Tax to be paid by On or before 20th of theSucceeding Month.

Form GSTR-3A Notice to a registered taxableperson who fails to furnishreturn under section 27 andsection 31

A notice in FORM GSTR-3A shallbe issued, electronically, to aregistered taxable person who failsto furnish return.

Matching of the claim of input taxcredit . (SECTION 37) – Draft ReturnRules 10, 11, 12,13, 14 15, 16, 17, 18)After the due date for furnishing thereturn in FORM GSTR-3.

Matching of details relatingto the claim of input taxcredit on inward suppliesincluding imports,provisionally allowed(Section 36).

The following details relating to theclaim of input tax credit on inwardsupplies including imports,provisionally allowed under section37, shall be matched under section38 afterthe due date for furnishing thereturn in FORM GSTR-3.(a) GSTIN of the supplier(b) GSTIN of the recipient.(c) Invoice/Debit Note date.(d) Invoice/Debit Note number.(e) Taxable value.(f) Tax amount:Explanation: (1) The claim of inputtax credit in respect of invoices anddebit notesin FORM GSTR-2 that were acceptedby the recipient in FORM GSTR-2A withoutamendment shall be treated asmatched if the correspondingsupplier has furnished a validreturn.The claim of input tax credit shall beconsidered as matched, where theamountof input tax credit claimed is equalto or less than the output tax paid onsuch tax invoice or Debit Note, asthe case may be, by thecorresponding supplier.The final acceptance of claim ofinput tax credit in respect of any taxperiod, shall be made available tothe registered taxable person

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making such claim in FORM GSTITC-1.The claim of input tax credit inrespect of any tax period which hadbeen communicated as mismatchedbut is found to be matched afterrectification by the supplier and/orrecipient shall be finally acceptedand made available to the taxableperson making such claim in FORMGST ITC-1.

Form GSTR-4 – Section 9 and Section34 - by 18days after the end ofquarter – Compounding scheme.

Quarterly Return forCompounding Taxablepersons

Every registered taxable personpaying tax under section 9 shall,after adding,correcting or deleting the detailscontained in FORM GSTR-4A ,furnish a quarterlyreturn in FORM GSTR-4 electronically.Every registered taxable personfurnishing the return shall dischargehis liability towards tax, interest,penalty, fees or any other amountpayable under the Act or these rulesby debiting the electronic cashledger.

Form GSTR-4A – Compoundingscheme.

Details of inward suppliesmade available to therecipient registeredunder Compositionscheme on the basis ofFORM GSTR-1 furnished bythe supplier

Form GSTR-5 – within 20 days of themonth or 7 days of the validity ofregistration.

Return for Non-Residentforeign taxable person

Every registered non-residenttaxable person shall furnish a returnin FORM GSTR-5electronicallythrough the Common Portal,including therein the details ofoutward suppliesand inward supplies and shall paythe tax, interest, penalty, fees or anyother amount payable under the Actor these rules withintwentydays after the end of a tax period orwithin seven days after the last dayof the validity period ofregistration , whichever is earlier.

Form GSTR-6 - ISDWithin 13 days after end of month.

GSTR-6 ISD return Every input service distributor shall,after adding, correcting or deletingthe detailscontained in FORM GSTR-6A ,furnish electronically a returnin FORM GSTR-6,containing the details of tax invoices

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on which credit has been receivedand those issued under section 21,through the Common Portal.

Form GSTR-6A Details of inward suppliesmade available to the ISDrecipient on the basis ofFORM GSTR-1 furnished bythe supplier

Form GSTR-7 - Section 46 andSection 34,by 10th of end the month.

Return for authoritiesdeducting tax at source

Every registered taxable personrequired to deduct tax at sourceshall furnish a return in FORMGSTR-7 electronically through theCommon Portal.The details furnished by theoperator shall be made availableelectronically to each of thesuppliers in Part C of FORM GSTR-2A on the Common Portal after thedue date of filing of FORM GSTR-7 .

Form GSTR-7A TDS Certificate The certificate referred to shall bemade availableelectronically to the deductee on theCommon Portal in FORM GSTR-7A on the basis of the return filed.

Form GST-ITC-1 Communication ofacceptance, discrepancy orduplication of input taxcredit claim.

The final acceptance of claim ofinput tax credit in respect of any taxperiod, shall be made availableelectronically to the registeredtaxable person making such claimin FORM GST ITC-1 through theCommon Portal.The claim of input tax credit inrespect of any tax period which hadbeen communicated as mismatchedbut is found to be matched afterrectification by the supplier and/orrecipient shall be finally acceptedand made available electronically tothe taxable person making suchclaim inFORM GST ITC-1 throughthe Common Portal

Form GSTR-8 – e commerce. Details of supplies effectedthrough e-commerceoperator and the amount oftax collected

Every e-Commerce operatorrequired to collect tax at source shallfurnish a statement in FORM GSTR-8 electronically through theCommon Portal,containing details of supplieseffected through such operator andthe amount of tax collected asrequired.The details furnished by theoperator shall be made availableelectronically to each of thesuppliers in Part D of FORM GSTR-

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2A on the Common Portal after thedue date of filing of FORM GSTR-8 .

Form GSTR-9 – Section 39 with Rule21 – {to be filed by RegisteredTaxable Person, CompositionSupplier under Section 9, InputService Distributor (ISD), andSupplies effected through e-Commerce }.Annually by 31th of December ofsubsequent F.Y..

Annual return Every registered taxable personwhose aggregate turnover during afinancial yearexceeds onecrore rupees shall get his accountsaudited and he shall furnish a copyof audited annual accounts and areconciliation statement, dulycertified, inFORM GSTR-9B.

Form GSTR-9A –Annual Return – CompoundingScheme.

Simplified Annual return byCompounding taxablepersons registered undersection 8

Form GSTR-9B Reconciliation Statement.Accounts to be Audited –Sub-Section (4) of Section

53and sub-rule (2) of Rule 21of Return Rules .

Reconciliation statement Certifiedby Auditors to be submitted withGSTR 9 by those whose Aggregateturn over is more than Rs. One crorein the financial year.

Form GSTR-10 – Section 40 – 3months from the date of cancellationof Registration.

Final return For cancellation of Registration.

Form GSTR-11 Details of inward supplies tobe furnished by a personhaving UIN

Rectifications related to omission orincorrect particulars. – proviso tosection 34 (9).

Before due date of furnishingof return for September oractual date of annual returnwhich-ever is earlier.

It is assumed by Government thatAnnual Return may be filed byTaxpayers before September.

Section 37 of Model GST Law prescribes Matching, Reversal and Reclaim of Input Tax Credit. The followingare the Steps for Matching, Reversal and Reclaim of INPUT TAX CREDIT.

After Due Date (20th) ofFling Monthly Return inForm GSTR 3.

Details of every inward supply furnished inGSTR 2 (by 15th) shall be matched withcorresponding details of outward supplyfurnished in GSTR 1 (by 10th) of thesupplier.

The claim of Input Tax Credit inrespect of inward supply thatmatch with correspondingoutward supply shall be finallyaccepted.Input Tax Credit for Importsshall be matched with IGST(Additional Duty of Customs)paid.

If - (i) Input Tax Creditclaimed by recipient inrespect of inward supplyis in excess of Taxdeclared by supplier or(ii) the out-ward supply isnot declared by thesupplier

The discrepancy shall be communicated toboth recipient and supplier.

Duplicate claims, if any, shall becommunicated to the recipientonly and not to supplier.

Input Tax Credit claimed Only after rectification of discrepancy in the After rectification of the

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in respect of Inwardsupply shall be finallyaccepted.

valid return of supplier in the month inwhich such discrepancy has been committed.

discrepancy ITC provisionallyaccepted becomes final. The ITCclaim is subject to Section 16 and17 of the Model GST Act.

If discrepancy is notrectified by the supplierin his valid return for themonth in whichdiscrepancy iscommunicated

The provisional credit so taken by recipientshall be added as out-put tax liability in hisreturn GSTR 3 of the month succeeding themonth in which the discrepancy iscommunicated. In this case the out-ward taxliability shall also attract Interest as perSection 45 of Model GST Law.

Provisionally accepted ITC claimshall be reversed by the recipientif the discrepancy is not rectified.

RECLAIM of Input TaxCredit. Reversed earlier

Recipient can reclaim the Input Tax Creditreversed earlier due to non-rectification bysupplier after the supplier declares thedetails of out-ward supply in his valid returnsubsequently.

Reclaim of ITC shall reduce theout-put Tax liability of recipientin his GSTR 3.

Period for carrying outrectifications.

Before the due date of filing of return for themonth of September following the end offinancial year i.e. 20th October of the nextfinancial year or actual date of filing ofAnnual return whichever is earlier.

It is assumed by Governmentthat some of the taxpayers wouldfile Annual Return beforeSeptember of next financial year.

If credit notes are issuedby supplier.

Reduction of output tax liability will beclaimed in GSTR 1.

No reduction in output taxliability of the supplier shall bepermitted if the incidence of taxand interest on such supply hasbeen passed on to any otherperson.

If Debit Notes are issued Where a tax invoice has been issued and thetaxable value and/or tax charged in that taxinvoice is found to be less than the taxablevalue and/or tax payable in respect of suchsupply, the taxable person, who hassupplied such goods and/or services, shallissue to the recipient a debit note orsupplementary invoice.

Registered taxable person whoissues a debit noteshall declare the details of suchdebit note, in the return for themonth during which such debitnote has been issued and the taxliability shall be adjusted in themanner specified in this Act

LEVY OF LATE FEE.

Taxable person who fails to furnish the details of outward or inward supplies required under section 32 orsection 33, as the case may be, or returns required under section 34 or section 40 by the due date shall beliable to pay late fee of Rs.100/- for every day during which such failure continues subject to a maximum ofRs.5,000/-.Any registered taxable person who fails to furnish the return required under section 39 by the due date shallbe liable to a late fee of Rs.100/- for every day during which such failure continues, subject to a maximum ofan amount calculated at a quarter percent of his turnover in the State.

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12. Whether Supply of Foods at AirConditioned Restaurant Is Liable forService Tax?

(Source :-https://idt.taxmann.com//fileopennew.aspx?id=105010000000014041&mode=home&page=ts)

1. Service Tax on supply of food has always been amatter of debate since introduction of service tax onsupply of food at AC Restaurant way back in 1-5-2011. The supply of food at non AC restaurant isexempted vide entry 19 of the Mega ExemptionNotification No.25/2012-ST, dated 20-6-2012. Therehas been a contrary judgments passed by differenthigh courts with regard to constitutional validity oflevying the service tax on supply of food at ACrestaurant. The matter has now reached the ApexCourt in order to decide as to whether supply offood at AC restaurant can be made leviable toService Tax.

2. The activity of supply of food at Air ConditionedRestaurant was made taxable from 1-5-2011. As perSection 66 of the Finance Act, 1994 person renderingservices falling under sub-clause (zzzzv) of clause(105) of Section 65 of the Finance Act, 1994, taxableservice means

"any service provided or to be provided to anyperson by a restaurant, by whatever name called,having the facility of air conditioning in any part ofthe establishment, at any time during the financialyear, which has licence to serve alcoholic beverages,in relation to serving food or beverages, includingalcoholic beverages or both, in it premises"

3. Further from 1-7-2012 onwards vide sub-section(i) of section 66E of the Finance Act, 1994 thefollowing is notified as a declared service:

"(i) service portion in an activitywherein goods, being food or any other article forhuman consumption or any drink (whether or notintoxicating) is supplied in any manner as a part ofthe activity."4. As per Article 366(29A) of the Constitution servicewherein goods being food or any article of humanconsumption or any drink (whether or notintoxicating)is supplied in any manner as a part ofservice is a deemed sale. Further, the clause (29A) ofArticle 366 of Constitution of India was amendedw.e.f 2-2-1983. However, the concept of declaredservice was introduced from 1-7-2012. The extract ofArticle 366(29A) is as follows:

"(29A) tax on the sale or purchase of goods includes

(a) a tax on the transfer, otherwise than in pursuanceof a contact, of property in any goods for cash,deferred payment or other valuable consideration;(b) a tax on the transfer of property in goods(whether as goods or in some other form) invoked inthe execution of a works contract;(c) a tax on the delivery of goods on hire purchase orany system of payment by instalments;(d) a tax on the transfer of the right to use any goodsfor any purpose (whether or not for a specifiedperiod) for cash, deferred payment or other valuableconsideration;(e) a tax on the supply of goods by anyunincorporated association or body of persons to amember thereof for cash, deferred payment or othervaluable consideration;(f) a tax on the supply, by way of or as part of anyservice or in any other manner whatsoever, ofgoods, being food or any other article for humanconsumption or any drink (whether or notintoxicating), where such supply or service, is forcash, deferred payment or other valuableconsideration, and such transfer, delivery or supplyof any goods shall be deemed to be a sale of thosegoods by the person making the transfer, delivery orsupply and a purchase of those goods by the personto whom such transfer, delivery or supply is made."5. It is undisputed fact that the activity supply offood in restaurant falls under the sub-clause (/) ofclause 29A of the constitution of India and it is adeemed sale.

6. Further, the clause 29A has been inserted prior tointroduction of service tax Le., on 2-2-1983 and theactivity of supply of foods by restaurant were alsocarried before service tax being leviable on the saidservice Le., 1-5-2011. Even before service tax beingleviable the activity was subjected to VAT (ValueAdded Tax) on the activity carried on by the person.

7. The Article 265 of the Constitution states that notax shall be levied or collected except by theauthority of law. Schedule VII divides this subjectinto three categories-

(a) Union list (Only Central Government has power)(b) State list (Only state Government has power)(c) Concurrent list (both Central Government andState Government have power)8. Under Article 246(1) of the Constitution,Parliament has exclusive powers to make laws withrespect to any of the matters enumerated in List I inthe Seventh Schedule to the Constitution and as perArticle 246(3), the State Government has exclusive

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powers to make laws with respect to mattersenumerated in List II (the State List).

9. All these three lists are mutually exclusive to oneanother Le. if the tax is levied and collected underone list, then it cannot be again levied and collectedunder other lists. Non-compliance of this aspect ofthe constitution amounts to duplication of taxesapart from breach of the constitutional powers.Further, the Centre and States derives power to levytaxes from these three lists.

10. The Parliament is empowered to levy the servicetax vide Entry No. 97 of List of Seventh Schedule tothe Constitution of India. The Entry No. 97 isextracted here for ready reference.

"97. Any other matter not enumerated in List II orList III including any tax not mentioned in either ofthose Lists."

11. After the 46th Amendment to the Constitution,the sale element of those contracts which arecovered by six sub-clauses of Clause (29A) of Article366 are separable and subjected to sales tax by theStates under Entry 54 of List II and there is norequirement of the dominant nature test beingapplied.

12. Further, the activity of supply of food inrestaurant is a matter specifically enumerated in ListII of the VII schedule to the constitution and issubjected to sales tax. The levy of service tax onsupply of foods in restaurant cannot be made liableto service tax. Further the same view is upheld in K.Damodarasamy Naidu & Bros. v. State of TamilNadu 2000 taxmann.com 1508 (SC), wherein theConstitution Bench of the Supreme Court held thatwhen the tax is on supply of food and drink, it is notof relevance that the supply is by way of service oras part of a service.

13. Further, the same view was also upheld byKerala high court in Kerala Classified Hotels &Resorts Associations v. Union of India [2013] 35taxmann.com 568 (Ker.), the relevant extract ofdecision is as follows:

"Having come to the aforesaid findings, these writpetitions are allowed as follows:

(i) It is declared that sub-Clauses (zzzzv) and(zzzzw) to Clause 105 of Section 65 of the FinanceAct, 1994 as amended by the Finance Act, 2011 isbeyond the legislative competence of the Parliamentas the sub-Clauses are covered by Entry 54 and

Entry 62 respectively of List II of the SeventhSchedule.(ii) That if any payments have been made by thepetitioners on the basis of the impugned clauses,they are entitled to seek refund of the same."14. With regard to the above the levy of service taxon supply of food at restaurant is unconstitutionaland therefore service tax itself is not payable on thesupply of food made at the restaurant. Further, onthe basis of the above judgment if any payment ofservice tax is made by the person, they are entitledto refund of the same.

15. Therefore as the food supplied at restaurantattracts VAT under state laws. When VAT is leviableon a transaction, Service tax cannot again be leviedon the same tax base. This view was also supportedin various Apex court judgments.

16. Further, the constitutional validity for levyingthe service tax on supply of food at AC restauranthas also been discussed in Delhi HC judgment -Federation of Hotels & Restaurants Association ofIndia v. Union of India [2016] 72 taxmann.com 161(Delhi) wherein the court has upheld theconstitutional validity for levying the service tax onsupply of food the AC restaurant and passed thefollowing order:

"77. The Court accordingly:

(i) upholds the constitutional validity of Section65(105)(zzzzv) read with Section 66E(i), Section65(22) of the Finance Act, 1994 as well as Rule 2C ofthe Service Tax (Determination of Value) Rules,2006;17. While upholding the constitutional validity forlevying the service tax on supply of food at ACrestaurant the court has refrained from discussingthe decisions of the other High Courts which havetaken a different view on the issues involved as thesubject matter is pending before Supreme Court.

18. The constitutional validity for levying the servicetax on supply of food at AC restaurant was upheldby the Delhi High court stating that Article 366(29A)only permits the State to impose a tax on the supplyof food and drink. It does not include the supply toservices within the definition of sale and purchase ofgoods. Further, the service portion of a compositecatering contract can be made exigible to service tax.The court relies on Tamil Nadu Kalyana MandapamAssociation v. Union of India [2006] 4 STT 308 (SC)this regard.

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19. Further, it was said that even if this is viewed asParliament deploying a legal fiction, it is legallypermissible. Further, parliament has made the legalposition explicit by inserting Section 66 E(z) of theFinance Act, 1994 read as it were with Section 65(22)and 65(44) of the Finance Act, 1994. It states that the"service portion in an activity wherein goods, beingfood or any other article of human consumption orany drink (whether or not intoxicating) is suppliedin any manner as a part of the activity" is a 'declared'service. Therefore, the service portion of thecomposite contract of supply of food and drinks hassound constitutional basis and further relied ondecisions of the Supreme Court. In State of U.P. v.HariRam [2013] 4 SCC 280.

20. The court held that it is not possible to accept thecontention that Parliament lacks the legislativecompetence to enact Section 65(105)(zzzzv) of theFinance Act, 1994 with a view to bringing the servicecomponent of the composite contract of supply offood and drinks by an air-conditioned restaurantwithin the service tax net. Therefore, there exists theconstitutional validity of levy of service tax onsupply of food at AC restaurant.

Possible position under GST

21. The Constitution of India has been amendedvide the Constitution (one Hundred and FirstAmendment) Act, 2016 which have received theassent of the Hon'ble President on 8-9-2016. Themajor change brought in the amendment is that theUnion and state legislature have been givensimultaneous power. In this regard the newlyinserted Article 246A confers power on both thelegislature to make laws with regard to GST.

22. Therefore, it is believe that this controversy maynot prevail under GST as the same is treated assupply of service under Schedule-II. However,existence of article 366(29A) after GSTimplementation may create confusion as it treatsthis transaction as supply of goods. Hence, itrecommended to amend the Article 366(29A) as itstill treats this transaction as supply of goods.

Conclusion

23. The Hon'ble Delhi High court in the Federationof Hotels & Restaurants Association of India {supra)has upheld the constitution validity of service tax onsupply of food at AC Restaurant. However, KeralaHigh court in Kerala Classified Hotels & ResortsAssociations {supra) have held that tax on supply offood at AC Restaurant is beyond the competence of

parliament. Therefore, there has been a two differentview on the same transaction. Now it will have to beseen how the Apex court view the same transaction.The conflicting views of High Court will continue tocause uncertainty on applicability of service tax onactivity of supply of food at AC Restaurant till thedecision of Apex court whose decision will be thelaw of land and will be treated as final.

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2.0 News & Updates

1. India should start with a uniform low rateGST

Vijay Kelkar, one of India’s most eminent economistand policymaker, delivered the fifth C. D.Deshmukh Lecture organized by National Councilof Applied Economic Research. Speakingon Reflections on the Art and Science ofPolicymaking Kelkar made a case for promoting acompetition driven market economy in India.

Kelkar cautioned that benefits of competition andreforms can be seriously compromised ifgovernments and policymakers fail to ensure thatthere are no market failures.

This, Kelkar said, requires building state capacity todesign effective incentives and balance pros andcons of policy interventions.

State capacity, Kelkar added, should be built step bystep by tackling easy objectives first.

Citing the GST as an example, he argued that it isbetter to build a single, low rate GST first, and moveon to more complex high rates and multiple rateslater. He stated that India needs to buildindependent institutions and encourage anatmosphere of debate and dissent to improvepolicymaking.

http://www.livemint.com/Politics/j7IUvQiRQBOnWLKDcjxSXM/India-should-start-with-a-uniform-low-rate-GST.html

2. GST Council plans to take up threecontentious laws for discussion; targets 1July roll-out

Aiming towards a smooth roll out of Goods andServices Tax (GST) from 1 July, the GST Council willlook into the three GST laws in its next meeting,scheduled for 18 February.

The session by the Secretaries Panel at CNBC-TV 18Mint's 'Budget 2017: The Verdict' programme inNew Delhi on Thursday evening discussed in detailthe GST and its power to arrest, disinvestmentplans, mergers and acquisitions, proposals for a newfinancial year, and other factors.

"Industry is looking forward to the laws and rules.Once they are finalised by the GST council, it will

pave the way towards the implementation of GSTfrom 1 July. The agenda of the next meeting is tolook into all the three laws. In the subsequentmeetings, we'll take up the rules. As far as rates areconcerned, it's going to be a simplistic formula. Thecouncil has said that there would be four slabs: 5percent, 12 percent, 18 percent and 28 percent," saidrevenue secretary Hasmukh Adhia.

After the announcement of the Budget on 1February, West Bengal finance minister Amit Mitra,who also heads the empowerment panel on GST,sent 16 demands to the Finance Ministry to lookinto, including the arrest clause, which wasdescribed as "draconian" by the West Bengalgovernment.

"The power to arrest tax defaulters is already thereunder excise and service tax laws, and also underVAT in some states. After an extensive debate, amajority in the GST Council decided that no arrestsshould be made in cases of tax evasion up to Rs 2crore. However, evaders between Rs 2 and Rs 5crore could face bailable arrest. Above tax evasion ofabove Rs 5 crore, it may invite non-bailable arrest,"he said.

Is there a new financial year on cards?

Economic affairs secretary Shaktikant Das said, "Thereport to change the financial year is underconsideration by the government. We are examiningit, and once the decision is taken, it will becommunicated."

On IDBI Bank's disinvestment plan

The government announced in the Budget that ithopes to raise Rs 72,500 crore in FY18 by divestingstakes in public sector firms. Compared to therevised estimate of Rs 45,500 crore for FY17, this isan increase of around 60 percent.

While discussing the disinvestment plan of the state-run IDBI Bank, Das said, "The divestment of IDBIBank is not off the table. The work is in progress. Itsshare value in the market doesn't reflect the realestate it holds in Mumbai. The real estate valuationneeds to be done carefully and a transparentdecision needs to be taken in this case."

"We've not derailed from the path of financialprudence. Today, our economy needs investment incertain sectors. As per the NK Singh panel, our fiscaldeficit target is 3 percent and we'll improve it in2017-18," Das added.

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Priorities in 2017:

"To ensure people pay tax and society becomesmore tax compliant": Ashok Lavasa, financesecretary.

"Budget 2017 is very strong on reforms, and ourfocus is on implementation": Shaktikant Das,economic affairs secretary.

"Roll out of GST from 1 July. 2017 will be the Year ofGST": Hasmukh Adhia, revenue secretary.

"Look for a stable and buoyant market": NeerajGupta, secretary, department of investment andpublic asset management.

http://www.firstpost.com/business/gst-council-plans-to-take-up-three-contentious-laws-for-discussion-targets-1-july-roll-out-3263974.html

3. Smartphone buyers beware: GST may leadto 25% hike in prices

In a bid to encourage local manufacturing and boostMake in India initiative, the government has hikedtwo percent special additional duty on of printedcircuit boards (PCBs) from April 1. This would leadto hike in prices of smartphone handsets by aroundtwo percent.

However, according to a Business Standard report,CyberMedia Research estimates that with theimposition of goods and services tax (GST), the priceof smartphone handsets would increase by around25 percent.

PCBs constitute half the cost of a mobile that isaround 54 percent.

PCBs are mostly imported from China and Taiwanas of now. Last year around Rs 40,000 crore of PCBshad been imported.

“Over time, we can expect smartphonemanufacturing in the country by major players inIndia,” said Vevek Zhang, Chief Marketing Officer,Vivo India in an interview to Business Standard.

Meanwhile, industry experts say brining down costof manufacturing of smartphones is not going to beeasy because most of the features like camera, PCBsand display panel etc are imported.

http://www.moneycontrol.com/news/business/smartphone-buyers-beware-gst-may-lead-to-25-hikeprices_8416681.html

4. Budget 2017 at a glance: Readying the stagefor GST

Sticking to its commitment to roll out the goods andservices tax (GST) on time, the government willbegin its outreach to trade and industry on April 1to make stakeholders aware of the benefits of theindirect tax reform. The GST Council has finalisedits recommendations on almost all issues based on aconsensus approach. GST’s tech backbone is alsogetting ready as per schedule. The budget preparesthe ground for its rollout:

No Service Tax on Insurance for Armed Forces

The armed forces are not required to pay service taxon life insurance schemes as the government hasexempted them from paying this levy. Members ofthe army, navy and air force were paying 14%service tax under the group insurance schemes ofthe central government from 2004 onwards. Themove will help reduce compliance costs for thearmed forces.

Pay Less for Flagship IIM Programmes

Those admitted to twoyear, full-time post graduateprogrammes at the IIMs will now pay less,irrespective of whether they are living on campus asthe government has fully exempted the course from14% service tax. The exemption was earlier meantonly for those who stayed in the hostels but has nowbeen extended by omitting the word “residential”.

A Costly Affair

Seeking advance rulings for customs, excise dutyand service tax is going to be costlier. Keen to weedout frivolous applications, the fee has been raised toRs 10,000 from Rs 2,500. This will also provide thegovernment with much-needed funds to improveinfrastructure at these benches.

Flying Returns

There will be no service tax on viability gap fundingfor airline operators that provide services under thegovernment’s Regional Connectivity Scheme aimedat boosting connectivity to small cities and towns.VGF is provided by the government and service taxlowers returns for operators.

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Beneficial Owners

The ‘beneficial owner’ concept has been introducedunder customs law as part of ease of doing business.This will cover situations when an importer is notthe actual owner to avoid ambiguity and litigation.This will help in providing clarity to importers whomay be importing goods for further onward supply

Export Duty on Aluminium

The government has ensured domestic resourcesecurity for alumina users by levying a 15% exportduty on aluminium ore and laterite. Besidesconserving local resources, the move will discourageexports and guarantee sufficient supply for usershere.

http://economictimes.indiatimes.com/news/economy/policy/budget-2017-at-a-glance-readying-the-stage-for-gst/articleshow/56923839.cms

5. Sumit Dutt Majumdar: Posers on GST leftunanswered

In the Budget, the finance minister expectedly spokeabout GST being a great indirect tax reform to beimplemented soon.

It was, therefore, hoped that he would give certaindirections showing the convergence of central exciseand service tax with GST. That would haveprepared everyone for the new tax regime.

Certain technical issues relating to GST are yet to befinalised. These include identification of goods andservices that would fall under different tax rates.There was no such proposal. Further he could havegiven relief to service tax payers by enhancing thethreshold to Rs 20 lakhs.

However, there were a few changes in customs andcentral excise. Customs duty was either reduced orremoved for some components and raw materials soas to give a fillip to the government's two laudableconcepts: Make in India and Digital India.

As in every Budget, excise duty on tobacco andcigarettes has been increased. Besides excise reliefhas been extended to certain goods relating toDigital India and less power consuming items likeLEDs. For service tax, the changes have beennominal. These are welcome steps.

http://www.business-standard.com/budget/article/sumit-dutt-majumdar-posers-on-gst-left-unanswered-117020101646_1.html

6. ‘GST on track’, Jaitley leaves excise, servicetax unchanged

Presenting the 2017 budget, finance minister ArunJaitley on Wednesday left the excise and service taxlargely unchanged, keeping hopes alive for the rollout of the ambitious goods and services tax (GST)regime in July.

“Implementation of GST is likely to bring moretaxes both to central and state governments becauseof widening of tax net. I have preferred not to makemany changes in current regime of excise andservice tax because the same are to be replaced byGST soon,” Jaitley said.

Describing the GST and demonetisation as“tectonic” policy initiatives, the minister said theGST council, which has representatives from theCentre and states, was ready with recommendationson “almost all the issues”.

His remarks came after Opposition-ruled states suchas West Bengal, Kerala and Karnataka had objectedto some provisions, threatening to delay the passageof the three GST-related bills.

“A lot of work is left, I have already written to theunion finance minister pointing out 13 things thatneed to be done. So I don’t want to commentwhether the July 1 target can be met,” said AmitMitra, West Bengal finance minister and chairmanof the empowered committee of state financeministers.

Jaitley says July 1 target for GST rollout, but somestates still not confident

“It is my privilege to inform this august House thatthe GST council has finalised its recommendationson almost all the issues based on consensus andafter spirited debate and discussions,” the ministersaid.

He said discussions were held on the GST ratestructure, threshold exemption and parameters forcomposition scheme and details for compensation tostates among other issues.

The government would reach out to trade andindustry from April 1 “to make them aware of thenew taxation system”, Jaitley said.

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“The Centre, through the Central Board of Exciseand Customs, shall continue to strive to achieve thegoal of implementation of GST as per schedulewithout compromising the spirit of co-operativefederalism,” Jaitley said.

India’s biggest tax reform, the GST, which aims toreplace myriad local levies with a single tax, hasmissed several deadlines both during the UPA andthe NDA rule.

Last year, Parliament passed the 122ndconstitutional amendment bill but the three bills thatwill launch the GST are caught in politicalwrangling.http://www.hindustantimes.com/india-news/gst-on-

track-jaitley-leaves-excise-service-tax-unchanged/story-qJjI67oBqA2FIA58Uc2FZO.html

7. Tax officials to sport black bands to protestGST Council decisions

A few days after Finance Minister Arun Jaitleysought to allay the concerns of tax officers over thedecisions of the Goods and Services Tax (GST)Council, the Central Board of Excise and Customsreiterated its commitment to protesting thedecisions by the Council, with 70,000 of its officialswearing black bands on January 30, which isMartyrs Day.

This comes after the Indian Revenue Service, alongwith the service associations of Customs, CentralExcise, and Service Tax, called for a boycott of thecelebrations for International Customs Day to beheld on Friday saying that the GST Council’sdecision to give control of 90% of the tax assesseesbelow an annual turnover of ₹1.5 crore to the Stateswill lead to a depletion of the taxpayer base with theCentre.

“The officers of this department are under oath andare sworn by the constitution to safeguard theinterest and the sovereignty of the country and arefully aware of their obligations towards theconstitution and service to the people of thecountry,” the Indian Revenue Service Associationsaid in a statement.

“However, in the present set of things and decisions,which has been taken in the recent meeting of theGST Council, it is felt that the basic structure of thescheme is being compromised and the same maylead to utmost chaos which may be detrimental not

only to the revenue, but also to the industry, tradeand commerce in general,” the statement added.

During his speech on Friday, Mr. Jaitley had saidthat “there is no reason for disquiet” and that the“opportunities that are available to people in serviceas a matter of policy, as a matter of constitutionalguarantee, are all protected.”

http://www.thehindu.com/business/Economy/Tax-officials-to-sport-black-bands-to-protest-GST-Council-decisions/article17116585.ece

8. GST decisions under states' pressure,reverse them: IRS

Some of the recent decisions taken by GST Council,headed by Finance Minister Arun Jaitley, were takenunder pressure from the states, a body representingthousands of tax officials said today.

The association said its members as well as thosefrom other staff bodies wore black band on theirarm at work to protest the decisions taken by thecouncil.

The employees associations, representing about70,000 officers and employees of Central Board ofExcise and Customs (CBEC), called the protestsuccessful.

"There was very good response from all the staffacross the country. They wore black band while atwork to protest some of the decisions by the GSTCouncil," said Anup Srivastava, President of IndianRevenue Service (Customs and Central Excise)officers association.

He said the Goods and Services Tax (GST) is widelyseen as the programme of thecentral government asofficers of the CBEC have done all the ground workfor its implementation.

"However, the decisions taken by the GST Councilon January 16 have severely curtailed the role of thecentral government in GST implementation.

"Around 80 per cent of the taxpayers will have nointerface with the central government as per thesedecisions and that will severely limit the capacity ofthe Centre to make any impact in smooth roll out ofGST in the country," Srivastava said.

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The Council had in its recent meeting agreed to givestates the powers to levy tax on economic activitywithin 12 nautical miles of territorial waters and toadminister 90 per cent of the tax payers under Rs 1.5crore annual turnover besides certain provisions ofIntegrated GST.

Srivastava said that the association feels that thedecisions taken by the GST Council on January 16were under the pressure from the states that will notonly weaken the sovereignty of the Centre but alsoadversely affect the Indian economy and revenuecollection.

The association requests authorities concerned totake immediate necessary action and to defer theunjustified decisions of GST Council, taken underpressure of State VAT officials.

Joint Action Committee of associations of Group A,B & C staff of CBEC had given today's call innational interest to make their concerns heard by thedecision makers.

"In case our demands are not met, we will pursueother Gandhian means of protest," the officer said.

http://www.business-standard.com/article/specials/gst-decisions-under-states-pressure-reverse-them-irs-117013000631_1.html

9. Vijay Kelkar says single GST rate easy toadminister

Former finance secretary Vijay Kelkar on Fridayadvocated a single rate for the Goods and ServicesTax (GST) as that would it simpler to administer.

The GST Council has already decided on the four-rate structure for the indirect tax regime, besides acess.

Giving an example, he said it was better to firstbuild a single-rate GST with a low rate, achieve fullmastery of this, and then consider more complexpossibilities such as high rates and multiple rates.

Delivering the C D Deshmukh lecture, organised bythe National Council of Applied Economic Research,Kelkar said policymaking was required to addressmarket failure, improve efficiency and equity in thesociety. With regard to taxation, he said it should bestable and simple, giving investors confidence toinvest.

A task force constituted by the 13th FinanceCommission, headed by Kelkar, had recommendedthat all goods and services should be taxed at thesingle GST rate of 12 per cent. It could be split as 5per cent for the central GST and seven per cent forthe state GST.

The GST Council, comprising finance minister,minister of state for revenue and staterepresentatives, particularly their finance ministers,have already agreed on four GST rates — 5 per cent,12 per cent, 18 per cent and 28 per cent — besides acess above the peak rate on luxury and demeritgoods such as tobacco. The item-wise rate will befinalised by committee of officers.

Kelkar said simplicity was the first mantra ofpolicymaking. Right sequencing is anotherimportant pillar of policy making.

Citing example, he said exchange rate reformpreceded trade reforms during the liberalisation andit succeeded. The third dimension of sequencingwas in the construction of state capacity, Kelkarsaid.

“We should walk before we can run. Our firstobjective should be to establish easy objectives forstate capacity, and fully succeed in building thisstate capacity. Only after this is done we should tryfor a more complex problem,” he said.

Highlighting the value of criticism in policymaking,he said, “As policymakers, we develop a point ofview. We should be humble and recognise thatmany times, we will be wrong.” This makes it usefulto engage with our critics. “In every society, there isan under supply of criticism,” he said, addingcriticising the government imposes costs upon thecritic.

“The gains from criticism are diffused; the entiresociety benefits from the criticism. The self-interestof the critic leads him to ignore the gains for societyat large, and thus to under supply criticism,” hesaid.

Ruing the absence of credible data for policymaking,Kelkar said, “Our ability to undertake rationalanalysis, and to undertake post-mortem of policyinitiatives, is bounded by our availability ofinformation.”

A particularly disappointing feature of the Indianstatistical environment is that in addition to having

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limited data, some of our standard public datasources are also flawed, he said.“We are thus forced to first evaluate the soundnessof each public data source before commencing touse it. It is not as simple as blindly accepting all datafrom official government sources. Each of us needsto commit considerable resources to evaluating thesoundness of various kinds of statistics that areavailable in our field,” he said.

http://www.business-standard.com/article/specials/vijay-kelkar-says-single-gst-rate-easy-to-administer-117012701305_1.html

10. GST won't lead to job losses at tax dept,assures Arun Jaitley

Ahead of the rollout of GST, Finance Minister ArunJaitley on Friday sought to address concerns of jobloss from reduced work of tax officials, saying theyshould have no insecurity as enough work andopportunities will be available to them in the newindirect tax regime.

"I see no reason really for disquiet for the simplereason (that) opportunities which are available topeople in service and the matter of policy andconstitutional guarantee are all protected," he said atthe Investiture Ceremony 2017 and InternationalCustoms Day 2017 organised by CBEC here.

Only the nature of activity will change because therewill be one national sales tax replacing an array ofcentral and state levies like excise duty, service taxand VAT.

"Important changes and evolutions which take placeare never put on the back burner" just because thepeople who conduct the activity would now have towork in an altered form and environment, he said.

"The number of people required, the kind ofopportunity will remain unchanged except that thenature of activity itself changes," he said.

GST, he said, has for last several yeas beenconsidered as a larger part of policy consensus inIndia and an important taxation reform that willlead to the economic integration of the country.

"Once it takes place you have a situation wheretaxes (that) are levied by the state (and) by Centre(will) all be integrated into one and thereforeresulting in one assessment.

"Multiple systems on assessment which is there atpresent will evolve into a newer kind of system," hesaid.

He was responding to Central Board of Excise andCustoms (CBEC) Chairman Najib Shah's remarksdrawing his attention to "the rising disquiet in thecadre", saying there were human resource issues inthe service.

Jaitley said the revenue to be collected is going toexpand and there will be expansion of economicactivity as well.

"Therefore even though you have two parallelmachineries which could now be converging intosimilar kind of activities and shared responsibility, Ithink the future will stand witness to the fact thatthere will be adequate amount of opportunities to becreated and therefore the kind of disquiet in service,the kind of personal pressure I see on you shouldreduce as there is no real occasion for a fear of thiskind or a sense of insecurity for anyone in thisservice," he said.

The Finance Minister said change and evolution arean integral part of any economic order, and they arenever held back because the nature of responsibilityis going to change.

"This is an ongoing process it will continue and wewill all have to adjust ourselves with this particularchange. I can only assure you that there is no reasonfor disquiet, you can go and have a comfortablesleep tonight," he told the revenue officials.

Revenue Secretary Hasmukh Adhia told the officersthat they will have enough work to do under GST.

The Indian Revenue Service (Customs and CentralExcise) Officers' Association has asked thegovernment to protect the sanctity of their serviceamid attempts by officers of state government VATdepartments to equate themselves with IRS(Customs and Central Excise) officers.

http://www.business-standard.com/article/specials/gst-won-t-lead-to-job-losses-at-tax-dept-assures-arun-jaitley-117012701061_1.html

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11. GST: 70,000 tax officials warns of non-cooperation movement

New Delhi: Opposing some recent decisions takenby GST Council, various indirect tax officials'associations today decided to start non-cooperationmovement.

To start with, the employees associations will notcelebrate international customs day on Friday.Besides, they will observe 'black day' by wearingblack badges on Martyrs' Day, i.e. January 30, as perminutes of meeting held among theirrepresentatives here.

The associations said that their members are "highlydisappointed" and feel "cheated" over the decisionstaken by Finance Minister Arun Jaitley-led GSTCouncil in its meeting on January 16.

The Council had agreed to give states the powers tolevy tax on economic activity within 12 nauticalmiles of territorial waters and to administer 90 percent of the tax payers under Rs 1.5 crore annualturnover.

"We feel that the biggest tax reform of the centuryshould have been in conformity with the principlesof responsibility and authority going together andalso in

conformity with the Constitutional design. We feelthat the decision shall weaken the Centre's ability toensure its revenues.

"The decision will not only adversely affect thecareer of revenue officers but it is not in nationalinterest. We oppose the decisions taken by GSTCouncil and requests for deferment and review ofabove inappropriate and incorrect decisions," as perthe minutes of meeting of steering committee ofassociations representing Group A, B and Cemployees of Central Board of Excise and Customs(CBEC).

The decision came after a meeting of representativesof Indian Revenue Service (Customs and CentralExcise), All India Association of Central ExciseGazetted Executive Officers, All India Central ExciseInspectors' Association and All India Central Exciseand Service Tax Ministerial Officers Association,comprising 70,000 personnel, here, office bearerssaid.

According to them, the decision taken by GSTCouncil in its January 16, meeting will not onlyweaken the Centre but also adversely affect theIndian economy and revenue collection but alsonational security.

They have decided to request authorities concernedto take immediate necessary action to resolve theissues and to defer the unjustified decision of GSTCouncil taken under pressure of state VAT officers.

"We feel that if the above genuine demands innational and revenue interest are not consideredthen this disciplined service will be forced to initiatenon-cooperation movement following Gandhianmethods of Satyagraha," the associations said.

The Goods and Services Tax (GST) is likely to berolled out from July 1, as against April 1 decidedearlier by the government.

http://www.firstpost.com/business/gst-70000-tax-officials-warns-of-non-cooperation-movement-3220140.html

12. Biscuit-makers demand exemption fromGST

The ₹36,000-crore Indian biscuit industry, onTuesday, demanded complete waiver ofGood andServices Tax (GST) on Low Price-High Nutrition(LPHN) biscuits priced under a maximum retailprice of ₹100 a kg.

“LPHN biscuits are the only hygienically producedand affordable snack sold in small packs retailing at₹2-5. Consumed mainly by the low-income group,any increase in price of LPHN biscuits causes adirect reduction in demand,” said Mayank Shah,Vice-President and spokesperson of the BiscuitManufacturers’ Welfare Association.

He said while there is a 62 per cent weightedaverage hike in input costs (maida, sugar andvegetable oil) over the last decade, the biscuitmanufacturers have been unable to increase theirrealisation pro-rata.

Glucose biscuits offer consumers 72 kilo calories/per rupee (Kcal/re) compared to 55 by bread, 18 bypotato chips and 29 by namkeens.

All three enjoy concessional rate of taxes. A 70 grampack of glucose biscuits which retails at ₹5 offers

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315 Kcal, which is about 16 per cent of the dailydietary recommendation of the government.

Last year, the biscuit industry procured agricultureproduce of over ₹13,300 crore. Sugar prices havemore than doubled in the last decade and thecurrent wheat flour and vegetable oil prices makenet margins on LPHN biscuits reduced to just 3 percent.

Fear of the advent of negative margins phase forcesmanufacturers to curtail production leaving demandunsatiated. Glucose biscuits retailing at ₹70 a kgtoday attract net taxes of ₹7.21 which is higher thanthe value addition earned by the industry (₹7.01).

Premium category

“The government may tax premium biscuits as theydeem fit. We are a highly compliant industry withlast annual contribution to the exchequer at ₹3,075crore. However, on behalf of over 600manufacturers of LPHN biscuits retailed at up toMRP of ₹100 a kg, I urge the GST Council tocompletely exempt the LPHN biscuits,” Shah added.

http://www.thehindubusinessline.com/economy/gst-biscuit-makers/article9500131.ece

13. Recent GST Council’s decisions not innational interest: IRS officers body

Citing deep anguish and feeling of dejection amongthem, an association of about 3,000 Indian RevenueService officers today claimed that certain decisionstaken recently by GST Council were not in nationalinterest and they may have “serious implications”for government revenue and smoothimplementation of Goods and Services Tax (GST).

The Indian Revenue Service (Customs and CentralExcise) officers’ association has also sought fairrepresentation of their members in the GST Councilwhich has representatives from central and stategovernments.

Claiming attempts by officers of state governmentsVAT departments to equate themselves with IRS(Customs and Central Excise) officers, theassociation asked the government not to wish awaysanctity of their service.

Various such matters including the implementationof the GST were discussed during a meeting of theassociation held here yesterday under thechairmanship of its President Anup K Srivastava.

The GST Council had in its meeting on January 16,agreed to give states the power to levy tax oneconomic activity within 12 nautical miles ofterritorial waters.

Also, it was decided that the states will have thepower to assess and administer 90 per cent of the taxpayers under Rs 1.5 crore annual turnover, while theremaining would be controlled by the Centre.

“The decision to transfer much of the work relatedto the assessees below Rs 1.5 crore is not proper as itamounts to transferring the rightful assignment ofIRS(C&CE) officers to Group B officers of statesthrough an administrative arrangement. Revenuecollection is an encadred assignment and officers areselected through Union Public Service Commission(UPSC) process.

“The sanctity of the same can not be wished away.Officers of states through cross-empowerment cannot be effectively made into IRS(C&CE) officerswithout qualifying the UPSC exam. Unless thedistribution of assessee is done fairly, the issuewould not get resolved,” said a senior IRS officer,who attended the meeting.

All members of the service have expressed theirdeep anguish and concern over such decisions, hesaid.

The association has asked the Finance Ministry tolook into the serious concerns of IRS(C&CE) to raisethe morale of officers of such large cadre, the officerssaid.

“The prevailing feeling of dejection and anguishmay have serious implications for governmentrevenue and smooth implementation of GST,” hesaid, citing the resolution of the association.

The GST Council, in the present form, hasrepresentatives from all the state as well as centralgovernments through the Finance Minister.

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“All have voting rights. However, the post ofSecretary to the GST Secretariat, as well asAdditional Secretary are IAS officers. The chairmanof Central Board of Excise and Customs (CBEC), thelone domain specialist is merely an invitee.

“Accordingly, the concerns of CBEC and indirect taxexperts are not adequately represented in the GSTCouncil leading to adverse decisions such as the onedated 16-1-2017. This anomaly needs to be correctedby appointing Secretary and Additional Secretary inthe Council from an IRS officer,” the officer said.

There are about 3,000 IRS (C&CE) officers workingacross the country.

The association has asked the Finance Minister andsenior officers concerned of the Finance Ministrythat they should immediately take up the seriousconcerns of IRS(C&CE) to raise the morale ofofficers of such a large cadre.

“The prevailing feeling of dejection and anguishmay have serious implications for governmentrevenue and smooth implementation of GST,” hesaid.

The GST is likely to be rolled out from July 1, asagainst April 1 decided earlier by the government.

http://www.financialexpress.com/economy/recent-gst-councils-decisions-not-in-national-interest-irs-officers-body/520780/

14. GST hurdles

With the knotty issue of dual control having beensomehow sorted out, July 1 is the next movinggoalpost for GST to make its arangetram in India.The Government has the comfort of knowing thateven if the July target is missed, they still have afinal target date of September to make GST a reality.

The dual control dilemma was resolved by setting athreshold level and agreeing to share control on pre-determined percentages. GST taxpayers with aturnover of up to ₹1.5 crore would be assessed bythe Centre and States in the ratio of 90:10. In case oftaxpayers whose turnover is more than ₹1.5 crore,control would be shared equally. It appears that thepercentages have been arrived at only for thepurpose of arriving at some sort of a formula. At the

ground level, this is going to create multiplechallenges.

Control factorThe first challenge is in the use of the word ‘control’. The word suggests that both the Centre and Stateswould lose something big if they do not have it. Itwould appear that control for GST purposes meansmanaging assessments, collecting tax payments,issue of notices, scrutiny, audit and otheradministrative compliances that the law envisages.

The need for this arises because GST subsumes themajor indirect taxes of central excise, service tax andVAT. It would have been ideal if the VATDepartment handled SGST assessments and theCentral Excise and Service tax departments handledthe CGST piece. However, the need to enter intoeach other’s territory has arisen because the Centreand the States will share a piece of all the taxes.

Hence, both will need to ensure that they are able towatch over their wards. A watch over taxpayerswould be needed to compute the exact loss. Ifstatistics are to be believed, they show that asignificant majority of VAT and Service taxpayersare below the ₹1.5 crore threshold.

There are a bunch of issues that arise from thepercentage formula that has been worked out. Howwill the 10 per cent or 50 per cent be chosen? It isclear that there would be some parameters such asturnover and taxes paid. Would the entirepopulation of taxpayers in the 10 per cent and 50 percent be chosen or only a sub-set of them? Wouldboth the Governments trespass on each other’sareas? Would control between the Centre and Statesbe rotated?

Although the model GST law has provisions forappeals, taxpayers would expect a forum to escalatecases. All indirect taxpayers have got used to theirpresent set of officers and appellate authorities.Bringing in a fresh set of officers is only going toincrease their compliance costs and levels ofdiscomfort.

Use compliance ratingThe necessity to arrive at a formula for dual controlnow needs to be questioned. For everyone, GST is anew levy and no one knows how it will pan outwhen CGST, SGST and IGST invoices are generated.The Government should think of continuing thecurrent system at least for a couple of years. Section138 of the Model GST Law has a provision forcompliance rating of taxpayers.

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The Centre can choose cases for dual control on arandom basis or where there has been a drop in thecompliance rating that would invariably havehappened because of not following the law. Once allofficers know the nuts of bolts of GST, it wouldn’tmatter by whom and in what manner theassessments are done.

http://www.thehindubusinessline.com/opinion/will-gst-miss-its-new-deadline/article9497826.ece

15. Customs and excise officials upset withGST administration deal with states

NEW DELHI: Upset at the centre ceding most oftaxpayers under the goods and services (GST) tostates, the association of Indian Revenue ServiceOfficers from customs and central excise on Mondaypassed a resolution at its general body that in itspresent form the proposed tax would not be goodfor the country.

The Association will represent to the union financeminister Arun Jaitley on Tuesday its case, an officialsaid.

"Centre has given 90% of taxpayers below Rs 1.5crore to states, for tax payers above that the it's a50:50 division....On integrated GST, despite lawministry's opinion it has been agreed to empowerstates on administration,” the official said.

“This kind of arrangement will lead to litigation,hurt GDP and tax collections, " the official told ETafter the general body meeting that was attended byabout 400 officers including representative of theassociation from each state.

The meeting also discussed how Central Board ofExcise and Customs (CBEC) has been kept out of thedecision making process for GST.

"Central officers are giving training to state officialson GST... The central board of excise and customshas adopted changes in technology and taken anumber of initiatives to make the administrationfriendly to taxpayers," the official of the associationsaid adding that the central service officers who aredirect recruits are group A and they had been putlower than the group ‘B’ service of state.

"Members expressed deep anguish over thesedevelopments at the meeting...," the official saidadding that they hoped some action would be takenby FM.

At the last GST Council meeting, the centre decidedto allow states to handle 90% of assesses below Rs1.5 crore and 50% above this threshold. More than90% of assesses in service tax are below thethreshold of Rs 1.5 crore.http://economictimes.indiatimes.com/news/economy/policy/customs-and-excise-officials-upset-with-gst-administration-deal-with-states/articleshow/56741333.cms

16. KDK Softwares launches helpline to resolveGST-related queries

JAIPUR: Ahead of the Union Budget, city-based taxsolutions provider KDK Softwares has launched atoll-free number to resolve GST-related queries.

The company, which launched its 'GST Helpline'service recently, said it has received over 10,000 callswith most of the callers inquiring about the new taxregime whether it will be beneficial for smallbusinesses.

"Over 70 per cent calls received by the helpline hada single concern on GST rates and whether this willbe a beneficial tax structure to small businesses,"KDK Softwares CEO Mohit Bhambhani said here.

Queries of over ten thousands callers were studied,he said.

"About 80 per cent calls received were from theorganisation having a business turnover below Rs 1crore. Most of them were worried on the GST ratesand how it will be levied on supply in case acompany is supplying products directly to the endcustomers," he added.

With the recent demonetisation and upcoming GSTregime, SMEs and startups are facing verychallenging economic environment in addition totheir experience of several highs and lows duringthe past five years, the CEO said.

But at the same time, understanding the importanceof the SME sector, the central government has re-implemented Public Procurement Policy and alsolaunched Make in India, Startup India and SkillIndia campaigns to promote the sector, he noted.

The company said its national toll-free helplinenumber 1800 103 9271 is available in 6 languages -English, Hindi, Gujarati, Marathi, Kannada andMalayalam.

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http://economictimes.indiatimes.com/wealth/personal-finance-news/kdk-softwares-launches-helpline-to-resolve-gst-related-queries/articleshow/56753010.cms

17. Power ministry seeks relief for renewableenergy from GST impact

New Delhi: The Union power ministry has told theinfluential goods and services tax (GST) Councilchaired by finance minister Arun Jaitley thatimplementing GST in its current form could pushup power generation cost, especially of renewableenergy, which will further dent the ability of debt-ridden distribution companies to serve electricityunless specific relief measures are built in.

While solar panels and other equipment used forpower production will come under GST, the finalproduct—electricity—has been kept out. This meanspower producers will not be able to set off part ofthe indirect tax liability on their output using creditfor the taxes already paid on raw materials andservices availed.

In a presentation made to the GST Council on 16January, the power ministry proposed giving eitherdeemed export status or zero GST rate forrenewable power. The measures are intended tospare power producers from the tax cost of keepingelectricity out of GST, and to compensate for the endof existing tax exemptions.

According to a copy of the presentation, reviewedby Mint, the capital expenditure of renewableenergy companies—wind and solar—could go upby 10-12% which will warrant a power tariffincrease by 30-40 paise for wind power and 40-50paise for solar power. That is mainly because centralexcise duty exemptions and concessional state valueadded tax (VAT) on equipment and solar panels (0-5% levied by states) will make way for an 18% GSTon the raw materials and services availed of byrenewable power producers.

According to M.S. Mani, senior director, indirect tax,Deloitte in India, about 350 goods are at presentexempted from excise duty while VAT exemptionsacross states will add up to about 200 items. UnderGST, there will be not more than 100 exemptionswhich means increased tax incidence on industriesusing items that lose benefit of exemption orconcessional tax rate.

The ministry has accordingly urged the council toeither consider renewable power as a deemedexport or merely assign a zero GST rate on cleanenergy, which will allow power producers to getrefund of all the taxes previously paid on the rawmaterials and services. There is no excise duty onsolar panels, but states levy 0-5% concessional VATon them and there is a 2% central sales tax in case ofinter-state supply.

The ministry also proposed similar treatment forlarge hydropower projects, which will bereclassified as renewable energy projects.

The power ministry said that there are few takers forhigh cost power at present. “Any further tariffincrease due to GST may have multiplier effect oneconomic development as there will be difficulty inpassing through its impact to agriculture anddomestic consumers,” said the presentation. It alsoargued that higher power tariff will have an adverseimpact on industrial production, GDP and the Makein India drive, in addition to impact on exportcompetitiveness of products and services.

The solar power industry is witnessing intensecompetition which has driven tariffs down fromRs.12 a kilo watt hour in 2010 to a historic low of Rs3 in 2016, which means any cost escalation is likelyto hurt them.

“There are more than 200 active players in thisindustry and it is heading for consolidation in theface of competition,” said Inderpreet S. Wadhwa,director and chief executive officer of Azure PowerGlobal Ltd, an independent power producer.

http://www.livemint.com/Politics/q2tHXVPshlg0hQrxtpJGPN/Power-ministry-seeks-relief-for-renewable-energy-from-GST-im.html

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18. Retailers seek early implementation ofGST

NEW DELHI: Retailers have sought for earlyimplementation of the Goods and Services Taxregime which they believe will be a game-changerfor country's retail sector.

Industry body Retailers Association of India hasasked for early implementation of the GST, whichwill be a game changer for the Indian retail sectorwhich is pegged to grow to USD 1.3 trillion by 2020,its CEO Kumar Rajagopalan said.

"We are waiting for the details of early GST rollout,which, we hear is now in July. This can be a biggame changer for retailers across the country,"Rajagopalan told PTI.

Echoing Rajagopalan's views, METRO Cash & CarryIndia CEO & Managing Director Arvind Medirattasaid GST would also contribute greatly to smoothlogistics and supply chain efficiency across states."Favourable tax rates under the proposed Goodsand Services Tax would benefit the wholesale aswell as real estate and infrastructure sectors, whichhave a direct bearing on the growth of organisedretail across the country," he added.

The industry body is also looking forward tovarious steps being taken by the government tobuild back consumer confidence and inspire positivesentiment towards consumption.

"This could be by relaxation in individual taxationand removal of cascading effect of taxes. We alsolook forward to clarification in FDI norms in retailtowards making it a level-playing field,"Rajagopalan said.

http://economictimes.indiatimes.com/industry/services/retail/retailers-seek-early-implementation-of-gst/articleshow/56666161.cms

19. GST: striking a balance

The Goods and Service Tax (GST) in India would bea unified, multi-stage, consumption-based value-added tax (VAT). Thus, subsuming the existingmultiple indirect taxes and cesses. For a commonman, the key area of interest revolves around theprice of products and services that she would use.But the questions in people’s minds are: would GSTlead to inflation and what would be the tax rateapplied on goods and services?

Rate of tax

In November 2016, the GST Council recommended arate structure for goods.

• 28% is the highest rate for luxury goods, sin ordemerit goods, with an additional levy of cess.

• 18% standard rate may also include goodsincreasingly used by common households.

• 12% is the standard concessional rate of tax.

• 5% rate includes goods of mass consumption suchas essential commodities.

• Those with nil tax include about 50% goods in theconsumer price index.

• No specific rate has been prescribed for services .

Various products such as food grains, essentialmedicines, fruits, vegetables and others may fallunder the bracket of nil tax. Goods of massconsumption used by common people may becharged at 5%. Also, various goods whose currenttotal tax incidence is 9-15% may be levied a 12%GST. However, there is a possibility that a fewproducts that today attract 15-21% may fall underthe bracket of 18% GST and some such goods maybe used by common households. So, the goods usedby the common man may not have a high GST taxincidence. But for services, the rate may increase to18% from 15%.

Price of goods and services

The next important factor is the price of goods andservices under the GST scheme.

Before analysing this, let us understand a fewobjectives behind the introduction of GST. One is toabolish the cascading effect of taxes, as prevailing inthe current indirect tax structure. The biggest

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deficiency of today’s indirect tax law is ossue of thetax on tax. For example, when goods aremanufactured, excise duty is levied. Thereafter,when manufactured goods are sold, VAT is chargedover and above the excise component. Second is thenon-availability of credit for all the expensesincurred. Under the GST law, almost all expensesincurred for furtherance of business would beavailable as credit. The design of GST may itselfallow embedded tax cost to be removed from thevalue chain. Ideally, this should lead to reduction inprices. To ensure that benefits of GST are indeedpassed on to the end consumers, the governmenthas brought in anti-profiteering provisions. As thedesign of the GST may result in improved profitmargins at every stage of the value chain (i.e., lowtax rates or more credits), the government ismustering all the provisions to prevent price abuse.This would consequentially bring down prices ofvarious goods and services of routine consumption.

The anti-profiteering provisions, albeit in the formof motherhood statements, incorporated in thepresent draft legislation provide for the constitutionof an authority to examine whether any input taxcredits availed by a registered taxable person or thereduction in price on account of reduction in taxrates under GST, have actually resulted incommensurate reduction in prices of the said goodsand services. The government wants the industry tomaintain status-quo on profits against theintroduction of GST, and also expects the industryto be an honest conduit in passing benefits toconsumers. The definition of a ‘common man’ fromthe GST perspective has two dimensions: theconsumer base, and the small-scale trader or retailerbase. While consumers are expected to benefit underGST, small traders would be in the throes ofcompliances regarding anti-profiteering provisions.

Learning from international experiences of suchanti-profiteering implementation, where countrieslike Malaysia and Australia did not receive theexpected participation from the industry in theinitial years, the government needs to come out witha well-thought-through regulation. The proposedauthority to examine commensurate reduction inprices of goods and services, would have functionsand powers to levy penalty if it finds that priceshave not been reduced in accordance. One,however, needs to see how such a penalty wouldbenefit consumers who have already beenovercharged. By and large, GST implementation inIndia is likely to witness a reduction in prices ofcommodities of mass consumption and publicutility. To compensate for revenue loss, a few

identified goods, including those hazardous tohealth and items of luxury, would have a tax rate ashigh at 28% along with an additional levy of cess.

Inflation

For a common man, another area of concern wouldbe inflation. It has been noticed that in countrieswith GST, there was an initial spike in inflation. InAustralia, the impact of one-time increase ininflation post-GST implementation was normalizedwithin a year. In Malaysia, which introduced GST inApril 2015, GST contributed only 0.7 percentagepoints to inflation in 2015. The second half of 2015saw some increase as firms that had initiallyabsorbed GST started to pass it on to customers.

The frequently asked questions (FAQs) released bythe Ministry of Finance on 3 August 2016 indicatedthat the consumers will benefit under GST. India’sGST needs to withstand the test of time, beforecalling itself a consumer and common man friendlyregulation.

http://www.livemint.com/Money/1m0b4jeJLQygVW5yv9JhTK/GST-striking-a-balance.html

20. GST: Tax evasion up to Rs 2 cr a bailableoffence

To make GST regime less onerous, the Centre andstates have decided to water down the penalprovisions to ensure a trader gets immediate bail ifthe alleged tax evasion is up to Rs 2 crore.

The GST Council, at its last meeting, has decidedthat the provision of arrest will be restricted toforgery and non-deposit of collected taxes with theexchequer within the stipulated timeframe.

"In case of offences where the amount does notexceed Rs 2 crore, the person arrested for violationof GST laws will be entitled to bail," an official said,adding that the penal provisions in the GST will beless onerous than the provision in the Indian PenalCode (IPC) for the same type of offences.

Under the IPC 1860, forgery and cheating are non-bailable offence, which means that bail can only begranted by a court.

Most other offences like availing of wrong input taxcredit or refund and failure to furnish documents,which were earlier listed in the revised draft GSTlaw for prosecution, will not lead to arrest but mayattract only financial penalty.

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While in the case of service tax, there is a provisionof arrest for non-deposit of the tax beyond Rs 50lakh with the government, the excise law gives theCommissioner discretion to invoke arrest provisionin the case of default.

PwC Leader (indirect tax) Pratik Jain said the arrestprovisions as per the revised model GST law maylead to undue harassment for traders.

"To start with, there should be lighter penalprovision for offences for at least two years as GSTis a new tax regime and traders would need time tounderstand the law," Jain said.

Though anti-profiteering and prosecutionprovisions may act as a deterrent for tax evasion,these are likely to do more harm than good underGST, KPMG (India) Partner Indirect Tax HarpreetSingh said.

"Whenever sweeping powers are given to officialswith discretion and subjectivity, it is likely to resultin rampant misuse of authority creating hardshipsfor GST dealers," Singh said.

http://www.business-standard.com/article/pti-stories/gst-tax-evasion-up-to-rs-2-cr-a-bailable-offence-117011900682_1.html

21. Centre And States To Discuss GST AgainOn February 18, Says Arun Jaitley:Highlights

NEW DELHI: Finance Minister Arun Jaitleyaddressed the media on GST. Here are the liveupdates:The entire taxation base will be shared between theassessment and machinery of the Centre and thestates.Those above turnover 1.5 crores would be assessedin the ratio of 50:50 between Centre and state.All assesses with GST turnover of Rs. 1.5 crore orless, 90 per cent of them will be assessed by States &10 per cent by administrative machinery of Centre.States will also be cross empowered on the ratiomentioned earlier.States will be empowered to collect tax in anyeconomic activity in this decision.As far as the area of 12 nautical miles into theterritorial waters is concerned, it is a part of theUnion government territory but as per convention,the states will be empowered to collect tax on anyeconomic activity in this territory.

An alternative proposal made by a minister fromTamil Nadu. It was debated upon, improved andfinally agreed upon.All the minister present agreed to the proposalexcept the West Bengal minister, who said that thedivision of assets to 90-10 to 100-10.The SGST and the CGST, the draft of those lawstentatively by the officers and will come up beforethe GST council by the 18th Feb.This exercise will in all probability take us well intothe March.The ministers then assessed a realistic date by whenthe 3 important things pending, final draftlegislations and the rules, approval of these by thelegislative bodies can take place.There was a broad view that the 1st of July appearsto be more realistic since its transactional tax it canbe introduced any time.Also they felt that the industry and trade wouldhave to be given adequate notice. The system of GSTwill have to be modified suitably. So, our nextmeeting will be on the 18th of February.

http://www.ndtv.com/india-news/live-finance-minister-arun-jaitley-addresses-the-media-on-gst-1649392

22. July 1 more realistic deadline for GST:Arun Jaitley

NEW DELHI: Finance Minister Arun Jailtey-ledGoods and Services Tax (GST) council, on Monday,again failed to achieve consensus on contentiousdual control or cross empowerment issue that dealswith assessee jurisdiction, deferring target for itsroll-out to July 1.

"I am trying my best (on deadline of April 1). Therewas a broad view that July 1 appears to be a morerealistic date for the implementation," Jaitley said ata press briefing after today's GST Council meetended.

"We discussed cross empowerment issue whole daybut...," Jaitley said.He, however, said there were agreements on someother issues, including an "agreement thatintegrated GST (law) will be mutuallyempowerment model". Also, "territorial waters,taxation powers will be delegated to the states", hesaid.

The Council has been deadlocked for the fifthmeeting in a row, with states seeking sole powers tocontrol assessees with an annual turnover of up toRs 1.5 crore.

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The Centre, however, is not in favour of a horizontalsplit as it feels states do not have the expertise toadminister levies like service tax.

"GST turnover of above Rs 1.5 crore will be assessedin the ratio of 50:50 by States and Centre," Jaitleysaid.

The Council, in its previous meeting, had agreed onmost of the clauses of the draft IGST law, whichalong with central GST (CGST) and state GST(SGST) have to be passed by Parliament and statelegislatures, respectively, before the new indirect taxregime can be rolled out.

IGST deals in levy on inter-state supply (includingstock transfers) of goods or services.

http://timesofindia.indiatimes.com/india/july-1-more-realistic-deadline-for-gst-arun-jaitley/articleshow/56599938.cms

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4.0 Case Laws

4.1 Case Laws related to Excise

Sr. No. 1RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub Issue Sale to related partiesFavour of Partly in favour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee-manufacturer set up a Joint

Venture Company (JVC) inpartnership with a foreign company -JVC was to manufacture Epoxy Resinsusing assessee's final product ECH -Department argued that assessee andJVC were 'related person', as theywere interconnected and there wasmutuality of interest, as majorityproduction of assessee was sold to JVCand JVC also could not functionwithout assessee's product ECH -Tribunal found that : (a) there was nointerconnection; but, (b) there wasmutuality of interest, as buyer-JVChad an indirect interest in business ofassessee and vice versa - HELD :Tribunal gave cogent reasons for itsconclusions - Hence, same wereupheld Valuation underCentral Excise - Transaction value -Best judgment assessment - PeriodSeptember, 2001 to December, 2004 -Assessee sold its final product torelated person (being, Joint VentureCompany, JVC) at below 'cost' -Department sought to apply rule 11and value goods at 'cost plus 15 percent' - Assessee argued that sales tounrelated parties were also below cost,as international market prices werevery low - HELD : Since no valuationrule is directly applicable, rule 11would apply, which provides for bestjudgment assessment - A bestjudgment assessment must be madereasonably and not arbitrarily - Sincesales to unrelated parties were alsobelow cost and objective of rule 11 isto arrive at arm's length price/value,'cost plus method' cannot be applied,as it would work arbitrarily - Hence,

value was enhanced to price chargedfrom arm's length purchasers

Citation [2015] 62 taxmann.com 7 (SC) TamilNadu Petroproducts Ltd.v.Commissioner, Central Excise,Chennai

Sr. No. 2RelevantSection Rule 18RelevantStatute Central Excise Rules 2002Issue RebateSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Word "or" in rule 18 of the Central

Excise Rules, 2002, to be interpreted as"and" and therefore, the exporters areentitled to both the rebates under rule18 (viz. input‐stage rebate as well asoutput‐stage rebate on finishedgoods) and not one kind of rebate

Citation [2015] 62 taxmann.com 101 (SC)Spentex Industries Ltd.v.Commissioner of Central Excise

Sr. No. 3RelevantSection

Section 11A read with Section 73 ofthe Finance Act 1994

RelevantStatute Central Excise Act 1944Issue RecoverySub Issue Extended period invocationFavour of AssesseeIssuingAuthority Supreme CourtJudgment Invocation of extended period of

limitation - Period 1993-94 to 27-9-1997 - Department issue notice dated3-2-1998 raising demand alleging non-inclusion of certain expenses in cost ofproduction of captively consumedgoods - Assessee challengedinvocation of extended period onground that necessary clarificationwas issued by department only on 30-10-1996 and therefore, there was nosuppression/misstatement/mis-declaration on part of assessee - HELD: Manner of computation of cost ofproduction and inclusions therein,

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were clarified by department videCircular, dated 30-10-1996 - Hence,mis-declaration cannot be alleged forperiod prior to October 1996 andtherefore, extended period oflimitation cannot be invoked uptoSeptember, 1996 - For balance period,tax effect was negligible and hence,demand was set aside

Citation [2015] 62 taxmann.com 12 (SC)Greaves Ltd.v.Commissioner of Central Excise &Customs, Aurangabad

Sr. No. 4RelevantSectionRelevantStatute Central Excise Act 1944IssueSub Issue Extended period invocationFavour of Partly in favour of AssesseeIssuingAuthority CESTAT Ahmedabad Larger BenchJudgment the process carried out by the assessee

amounts to manufacture. Theimpugned goods Guar Dal Powderwould be classifiable under Heading1301: The seed of Guar plant inpowder form known as Guar DalPowder, was received by the assessee.The assessee had undertaken aprocess of the said powder addedwith other product and TKP. It is alsomixed with Methonol and Glycol in aminimum quantity. There is achemical reaction during mixing ofthese items and the viscosity of thefinal product ranges from 0 to 5000CPH as per requirement of end use ofthe product. The chemical reaction inthe Blender is expressing themagnitude of internal friction in afluid and there is a change ofproperties as per end use of the goods.Thus, there is a change of character ofthe impugned product. The assesseereceived Guar Dal Powder and afterdue process, it was sold as Guar DalPowder/Guar Gum. There is nodispute that the said product wasknown in trade as Guar Gum. So,there is a change of character, identityand use of the goods. There is change

of character of the goods of differentproperties as per viscosity used invarious industries. Revenue’sargument that the product wascovered under Heading 13.01 of theExcise Tariff has more merit.No extended period as there werecontrary decisions: It is seen from therecords that the Appellant fileddeclaration under Rule 174 oferstwhile Rules from the year 1997-98.The Appellant had specificallymentioned the description of thegoods as Guar Dal Powder, with theprocess of manufacture by theDeclaration dt.29.09.1997. In anyevent, there were contrary decisions ofthe co-ordinate Benches of theTribunal on this issue. It is noticedthat the appellant’s own case, theTribunal in earlier occasion, observedthat the impugned goods are NIL rateof duty under Chapter 11 of CETA.So, the ingredients in proviso toSection 11 A (1) of Central Excise Act,1944 cannot be involved.

Citation "2015-TIOL-2211-CESTAT-AHM-LB1) M/s KRAP CHEM PVT LTD2) SHRI R P GUPTA3) M/s RAVI GUM INDUSTRIES4) SHRI RAMNIKBHAI N PATEL5) SHRI BABULAL K SAKARIA6) SHRI JIVRAJBHAI

VAMANJIBHAI PATELVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,DAMAN, RAJKOT"

Sr. No. 5RelevantSectionRelevantStatute CENVAT Credit Rules 2004Issue Disallowance of CenvatSub IssueFavour of Partly in favour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Total cenvat credit of Rs. 46,05,092/-

was disallowed to assessee out ofwhich Rs. 30,88,512/- availed in or inrelation to cenvat credit on variousinput services and remaining amount

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of Rs. 15,16,580/- availed in or inrelation to trading related activities -So far as disallowing Cenvat Credit ofRs. 30,88,512/- is concerned, inclusivepart of definition of input service atthe material time in 2007-08 allowedcredit of services used in any activityrelating to business - Regardingcenvat credit pertaining to canteenservices, no evidence exists on recordthat any amount has been recoveredfrom employees of assessee - ST paidon any activity relating to business ofmanufacturing will be available asCenvat Credit to assessee Sofar as disallowing Cenvat Credit of Rs.15,16,580/- is concerned, credit inquestion relates to services used inTrading activities carried out atassessee's 16 branches all over India -From records, it is not forthcoming asto which are these services on whichassessee has taken cenvat credit andalso whether services at tradingbranches availed is covered underabove mentioned 17 servicesmentioned under Rule 6(5) of CCR,2004 - Although, assessee claims thatthey are entitled to 100% credit inrespect of services covered under Rule6(5), but they have also not come outwith clarity on actual services availedby them - Matter remanded to originaladjudicating authority

Citation "2015-TIOL-2165-CESTAT-AHMM/s CEMA ELECTRIC LIGHTINGPRODUCTS INDIA PVT LTDVsCOMMISSIONER OF CENTRALEXCISE, AHMEDABAD-III"

Sr. No. 6RelevantSection Rule 3RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue Input Tax CreditFavour of RemandedIssuingAuthority High Court of MadrasJudgment In pre-revision show cause notice,

Assessing Officer proposed to reverseinput tax credit of certain amount on

account of mismatch of Annexures-Iand II of seller and buyer respectively- Assessee submitted para wisestatement along with a copy ofAnnexure II in Form I, which itreceived from supplier - AssessingOfficer, by impugned order, held thatmonthly returns filed by other enddealer were not sufficient proof toauthenticate purchase and saletransaction and that genuineness andcorrectness could be proved byfurnishing original purchase and salesbill, payment made for transaction bybank statement, transportation details,loading and unloading charges paidto cooly, stock register extract,delivery challans received and issuedreconciling stock register, etc. -Whether if Assessing Officer had anydoubts with regard to documentsproduced by assessee or detailsfurnished by it or if, in his opinion,they were insufficient, he should haveissued a notice to dealer and calledupon them to produce documents -Held, yes

Citation [2016] 76 taxmann.com 358 (Madras)SD Packersv.Assistant Commissioner (CT)

Sr. No. 7RelevantSection Section 32ERelevantStatute Central Excise Act 1944Issue Settlement of CasesSub Issue Application for SettlementFavour of AssesseeIssuingAuthority High Court of DelhiJudgment Whether where in respect of two sets

of show-cause notices, investigationwas a seamless one in relation to sametrigger, i.e., same search and seizure,Settlement Commission was notjustified in directing assessees to filetwo separate settlement applicationsfor two notices - Held, yes

Citation "[2016] 76 taxmann.com 355 (Delhi)Door Deco Industriesv.Customs, Central Excise & ServiceTax"

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Sr. No. 8RelevantSection Rule 3RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue Input Tax CreditFavour of AssesseeIssuingAuthority CESTAT AllahabadJudgment Assessee became entitled to take/avail

Cenvat credit of duty paid on inputslying in stock or in process or inputscontained in final products lying instock as on 18-11-2009, but it hadtaken credit in account from 19-10-2009 - Assessing Officer demandedamount of Cenvat credit availed oninputs during period 1-4-2009 to 18-11-2009 along with interest undersection 11A and also levied penaltyunder rule 27 - Whether in view offact that assessee had only taken andnot utilized Cenvat credit prior to 18-11-2009, when it started paying tax onclearances, it was only a venial breachof provisions and, therefore,substantial benefit should not bedenied to assessee

Citation [2016] 76 taxmann.com 356 (Allahabad- CESTAT) BharatRolling Millsv.Commissioner of Central Excise,Allahabad

Sr. No. 9RelevantSection Section 35RelevantStatute Central Excise Act 1944Issue AppealsSub IssueFavour of AssesseeIssuingAuthority High Court of BombayJudgment Adjudicating Authority passed

original order on 31-10-2012 -Thereafter some mistake was noticedin above order and corrigendum wasissued on 31-12-2012 for correctingmistake in order - Subsequentlyassessee filed appeal beforeCommissioner (Appeals) on 27-2-2013- Commissioner (Appeals) dismissedappeal on ground that same was not

filed within limitation - Whetherappeal period will have to becomputed from date of corrigendum -Held, yes - Whether if corrigendumwas considered, then appeal would bewithin limitation - Held, yes -Whether, therefore, Commissioner(Appeals) was to be directed toconsider appeal filed by assessee onmerits - Held, yes

Citation [2017] 77 taxmann.com 81 (Bombay)Arihan Telecommunicationsv.Union of India

Sr. No. 10RelevantSection

Rule 3

RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of RevenueIssuingAuthority CESTAT HyderabadJudgment Assessee was engaged in manufacture

of sugar confectionery - It wasavailing cenvat credit facility oninputs and capital goods used inmanufacture of finished products -During financial year ending on 31-3-2009, it as a result of decision taken inBoard meeting had accounted inaccount books a certain amount asextra ordinary income by writing offof dues to vendors/suppliers -Adjudicating Authority taking viewthat aforesaid amount being inputswritten off in books of account,assessee was liable to reverse creditavailed on inputs under provisions ofrule 3(5B) of Cenvat Credit Rules -Whether since it was apparent fromrecord that assessee had neither paidvalue of goods to vendors/suppliersnor duty on goods, it was bound toreverse credit availed on inputs -Held, yes

Citation [2017] 77 taxmann.com 91 (Hyderabad- CESTAT) SampreNutritions Ltd.v.Commissioner, Hyderabad-IV

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Sr. No. 11RelevantSection Rule 14RelevantStatute Cenvat Credit Rules 2004Issue Recovery of Credit wrongly takenSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee was engaged in manufacture

of copper and was availing cenvatcredit on inputs and capital goods - Itsent copper concentrate, cathode(secondary), anode scrap, etc. forconversion into copper to a job worker- Adjudicating Authority taking aview that assessee was violatingprovisions of Cenvat Credit Rules as itwas not paying amount equal tocenvat credit attributable to inputswhich were not received back fromjob worker demanded a certainamount of credit from assessee underrule 14 - Whether since AdjudicatingAuthority did not identify which typeof inputs were retained by job worker,it was not at all tenable to invoke rule14 to demand and recover amount ofcredit - Held, yes

Citation [2017] 77 taxmann.com 154 (NewDelhi - CESTAT)Commissioner of Central Excise,Jaipur-Iv.Hindustan Copper Ltd.

Sr. No. 12RelevantSection Rule 5RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue RefundFavour of AssesseeIssuingAuthorityJudgment Assessee, a hundred per cent Export

Oriented Unit, rendering scientific ortechnical consultancy service, waschargeable to service tax - It enteredinto agreements with two companiessituated outside India for generationof candidate compounds forpharmaceutical products on certaindrug targets and for research and

drug development using informationsupplied by clients - It availed cenvatcredit on inputs/input services, but,being an exporting unit, was unable toutilize accumulated cenvat credit - Itclaimed for refund of accumulatedcredit under rule 5 of Cenvat CreditRules - Adjudicating Authorityrejected claim, but First AppellateAuthority allowed claim of assesseefor refund - Revenue contendedbefore Tribunal that services renderedby assessee did not qualify as exports,because one of ingredients of export ofservice in rule 6A of Service TaxRules, 1994 is that service was notprovided in India and in this regardalso referred to rule 4 of Place ofProvision of Services Rules, 2012 -Whether since goods supplied toassessee were subjected to alterationin course of research and it was notasserted anywhere that these goods inits altered or unlatered form were sentback to service recipient, provisions ofrule 4 of 2012 Rules would not beattracted - Held, yes - Whether interms of rule 6A of Service Tax Rules,definition of export of service wouldbe applicable and thus entitlingassessee to eligibility under rule 5 ofCenvat Credit Rules - Held, yes -Whether, therefore, assessee wasentitled to refund of accumulatedcenvat credit - Held, yes

Citation [2017] 77 taxmann.com 211 (Mumbai -CESTAT) PrincipalCommissioner of Central Excise,Pune-Iv.Advinus Therapeutics Ltd.

Sr. No. 13RelevantSection Rule 3RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Adjudicating Authority denied benefit

of cenvat credit to assessee onallegations that (i) it availed cenvat

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credit on invoices, wherein serialnumber was not printed but waswritten by hand, and (ii) in oneinvoice credit was taken on Xeroxcopy of invoice - Whether since therewas no case of revenue that inputcovered under aforesaid invoices wasnot received by assessee and not usedin manufacture of final product,denial of cenvat credit was notjustified - Held, yes

Citation "[2017] 77 taxmann.com 229 (Mumbai- CESTAT) Pepsico IndiaHolding (P.) Ltd.v.Commissioner of Central Excise,Mumbai-II"

Sr. No. 14RelevantSection Rule 4RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue Conditions for AllowingFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Whether where expenditure was

incurred by assessee company, eventhough invoices were not in name ofcompany but in name ofdirectors/employees of company andsame had been booked as expenditurein books of assessee, credit wasadmissible - Held, yes - Whetherwhere services of construction offoundation in factory, construction ofsecurity cabin, construction of scrapyard and shifting of machines directlyrelated to activity of manufacturingunit and were clearly included ininclusion part of definition of inputservices credit was admissible onthese services - Held, yes - Whether asregards air fair and cleaning services,they were related to business activityof assessee company, hence credit wasadmissible - Held, yes - Whetherwhere there was no dispute thatservices were received by assessee andinvoices raised to assessee, Cenvatcredit could not have been denied formere non mention of registrationnumber on invoice - Held, yes -

Whether further, in Cenvat CreditRules, relaxation was specificallyprovided for banking services, hence,Cenvat credit on banking chargescould not have been disallowed -Held, yes - Whether therefore,assessee would be prima facie entitledfor Cenvat credit which wasdisallowed for various reasons,subject to verification of invoices to beproduced by assessee - Held, yes

Citation [2017] 77 taxmann.com 274 (Mumbai -CESTAT) Jaya HindIndustries Ltd.v.Commissioner of Central Excise,Pune-I, Commissionerate

Sr. No. 15RelevantSection Rule 14RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of RemandedIssuingAuthority CESTAT BangaloreJudgment Appellant had for the first time,

produced the certificate of CharteredEngineer before the Tribunalexplaining the use of impugned itemsand also photographs, which were notproduced before lower authorities.Since the certificate is vital fordetermining whether the credit isadmissible on impugned steel andiron items as inputs, matter remandedback to original adjudicating authorityfor considering the certificate.Credit availed on various iron andsteel items as inputs was denied onthe ground that they do not fall underthe definition of inputs u/r. 2(k) ofCCR - Appellant-manufacturer of pigiron, etc., submits that they are used inwork shop meant for repair andmaintenance of machinery used inmanufacturing process and some ofthem are directly used inmanufacturing activity - It is seen thatOIO has observed that appellant hasnot produced any documentaryevidence to show the use of impugneditems and that they had vaguely

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claimed that some of them are used inmanufacture of final product also -Commissioner (A) also observed thesame stating that appellant has notproduced any evidence to substantiatetheir claim - However, appellant hadnow for the first time, produced thecertificate of Chartered Engineerbefore the Tribunal explaining the useof impugned items and number ofphotographs were also produced -The certificate is vital in determiningthat whether the goods qualify asinputs or not - Hence, in view of thecertificate and precedents relied uponby appellant, impugned order is setaside and matter remanded back tooriginal adjudicating authority fordecision afresh after considering thecertificate and the precedents

Citation "2017-TIOL-265-CESTAT-BANGM/s SUNVIK STEELS PVT LTDVsCOMMISSIONER OF CENTRALEXCISE, BANGALORE"

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4.2 Case Laws related to Service Tax

Sr. No. 1RelevantSection Rule 13RelevantStatute Cenvat Credit Rules 2004Issue Deemed CreditSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee, a manufacturer of steel

bars/rods, purchased raw materialviz. old and discarded rails, wheels,fish plates, etc. in auction fromRailways - Though assessee did notpay duty on purchase from Railways,however, it claimed deemed credit atRs. 920 per ton in terms ofNotification/order dated 7-7-1992/1-3-1994 - Commissioner (Appeals)denied deemed credit on ground thatpurchase bills of scrap from Railwaysdo not indicate rate and amount ofduty paid thereon at time ofclearance/sale by Railways - HELD :There was no obligation on part ofassessee to pay duty at time ofpurchase from Railways - In fact,assessee was claiming deemed creditof duty paid by Railways at time ofpurchases by Railways, as perNotification/order, dated 7-7-1992/1-3-1994 - Since assessee satisfied alleligibility conditions as perNotification/order, dated 7-7-1992/1-3-1994, impugned credit could not bedenied

Citation [2015] 62 taxmann.com 8 (SC)Ankur Steelsv.Commissioner of Central Excise,Allahabad

Sr. No. 2RelevantSectionRelevantStatute Finance Act 1994Issue ValuationSub Issue Business Auxilliary ServicesFavour of Partly in favour of assessee and partly

in favour of RevenueIssuingAuthority CESTAT AhmedabadJudgment BAS - Manufacture of Alcoholic

Beverages on job work basis wasincluded in service tax net w.e.f1.9.2009 - Appellants had challengedthe constitutional validity of levy ofthe Service Tax before the BombayHigh Court - High Court by Order dtd14.10.2010 admitted the WP andobserved that the Revenue would beat liberty to proceed with the ShowCause Notice – Adjudicating authorityconfirmed demand of service Tax ofRs 28,60,30,676/- along with interestand penalty – appellant have paid thetax of Rs 17,66,51,082/- alongwithinterest of Rs 3,27,50,955/- - Appealbefore Tribunal Held:Reimbursable expenses paid to theappellant insofar as cost andexpenditure as stipulated under Rule5(i) ST Valuation Rules, 2006 cannotbe included in the taxable value -despite the fact that Writ Petition ispending before the High Court, theappellant paid tax with interest andthere is reasonable cause to invokeSection 80 for waiver of the penaltyunder Section 76 & 78 of the Act -order is modified to the extent that thetaxable value would be computed byexcluding the amount ofsurplus/profit returned to the BrandOwner and the other reimbursableexpenses paid to the appellant,covered under Rule 5(i) of the STValuation Rules - Adjudicatingauthority directed to re-determinedemand of tax alongwith interest -penalty imposed u/s 77 is upheld butother penalties imposed u/s 76 & 78are set aside: CESTAT

Citation 2015-TIOL-2208-CESTAT-AHMM/s BIOSSOM INDUSTRIES LTDVsCOMMISSIONER OF CENTRAL

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EXCISE, CUSTOMS AND SERVICETAX-DAMAN

Sr. No. 3RelevantSectionRelevantStatute Finance Act 1994Issue Admission of AppealSub IssueFavour of AssesseeIssuingAuthority High Court of GujaratJudgment Appeal filed by the assessee with the

Commissioner (Appeals), whodisposed of the same through acommunication that the appeal lieswith the CESTAT, but not withCommissioner (Appeals) -Communication of the Commissioner(Appeals) challenged on the groundthat the same was passed withoutproviding an opportunity of personalhearing. Held:It is an undisputed fact that beforereturning the appeal to the petitioner,the petitioner has not been calledupon to explain on the maintainabilityof the appeal before the Commissioner(Appeals) - Even if the appealpreferred by the petitioner before theCommissioner is not maintainable, theauthority ought to have passed areasoned order that too after giving areasonable opportunity of hearing tothe petitioner - Commissioner(Appeals) directed to decide all issuesafter providing an opportunity ofpersonal hearing

Citation 2015-TIOL-2363-HC-AHM-CXPREM FABRICATIONSVsUNION OF INDIA AND 3

Sr. No. 4RelevantSectionRelevantStatute Finance Act 1994IssueSub Issue Supply of Tangible Goods ServiceFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Supply of Tangible Goods service -

appellants had paid service tax of Rs.21,20,864/- alongwith Cess of Rs.63,630/- and had also paid interest ofRs. 2,15,616/- (period March toAugust 2011) for the delayed paymentof service tax (for period July 2008 toMarch 2011) at the commencement ofinvestigation itself, and much beforeissuance of SCN in November 2011 -further there was no service taxliability on a few invoices/ debitnotes, many of which contentionswere accepted by the adjudicatingauthority - another amount of Rs.2,38,607/- sanctioned as refund wasalso appropriated in July 2013 -appellants had also paid Rs. 1,11,988/-vide challan No. 00438 dated13.08.2015 - penalty of Rs. 5,000/- u/s77 of FA, 1994 and a penalty ofequivalent tax of Rs. 30,93,660/- onthe appellants challenged beforeTribunal. Held: Matter is nomore res-integra, Division Bench ofthe Karnataka High Court in the caseof CCE & ST, LTU, Bangalore vs.Adecco Flexione Workforce SolutionsLimited - 2011-TIOL-635-HC-KAR-SThas held that assessee is not liable topay any penalty under suchcircumstances – penalties set aside –appeal disposed of

Citation 2015-TIOL-2169-CESTAT-AHMM/s NAWAZ SHIPPINGVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,RAJKOT

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Sr. No. 5RelevantSection Section 65RelevantStatute Finance Act 1994IssueSub Issue Storage and Warehousing of Goods

ServiceFavour of AssesseeIssuingAuthority Supreme CourtJudgment Whether in order to levy service tax

pertaining to 'storage andwarehousing' of goods following twoconditions are required to be satisfied: goods in question have to comewithin four corners of definition of'storage and warehousing' containedin sub-section (102) of section 65, andthere has to be an element of serviceprovided by one person to other forwhich charges for providing suchservices are collected - Held, yes - Twoassessees, namely, 'GSFC' and 'GACL'received Hydro Cynic Acid (HCN)through common pipeline fromReliance Industries - Said HCN camefirst to premises of 'GSFC' and fromthere 'GSFC' received 60 per cent ofHCN and 'GACL' received 40 per centof HCN in accordance with theirrespective requirement - To enable'GACL' to receive HCN throughcommon pipeline, handling facilitieswere installed in premises of 'GSFC'and, therefore, incineration also tookplace at said premises - Furtherhandling facilities expenditure wasshared equally by both parties -Adjudicating Authority issued onassessees show cause notices allegingthat 'GSFC' was collecting'incineration charges' from 'GACL'and it amounted to providing 'storageand warehousing services' fallingunder clause (zza) of sub-section (105)of section 65 and further confirmeddemand of service tax upon 'GSFC' -Whether in peculiar facts of case,handling portion and maintenanceincluding incineration facilities was innature of joint venture between 'GSFC'and 'GACL' and parties had simplyagreed to share expenditure - Held,yes - Whether payment which wasmade by 'GACL' to 'GSFC' was share

of 'GACL' and by no stretch ofimagination, it could be treated ascommon 'service' provided by 'GSFC'to 'GACL' - Held, yes - Whether sincesecond condition in order to levyservice had not been satisfied ininstant case, demand of service taxupon 'GSFC' was liable to be set aside

Citation [2016] 76 taxmann.com 357 (SC)Gujarat State Fertilizers & ChemicalsLtd.v.Commissioner of Central Excise

Sr. No. 6RelevantSection

Section 65(90a), read withsections 73, 76, 77, 78 and 80

RelevantStatute Finance Act 1994Issue Cenvat Credit Rules 2004Sub Issue Renting of Immovable PropertyFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Assessee was engaged in service of

renting of immovable property - Itpaid service tax on renting ofimmovable property for period 2007-08 to 2009-10 under section 73 fromcenvat credit account available on 31-1-2011 along with interest -Adjudicating Authority held that asper rule 3(4) of Cenvat Credit Rules,cenvat credit available on last day ofperiod for which service tax was duecould only be utilised and since ininstant case cenvat credit waspertaining to period January, 2011,same could not have been utilised forpayment of tax for period 2007-08 to2009-10 - He, therefore, raised servicetax demand and also imposed penaltyunder sections 76, 77 and 78 onassessee - Whether in view of CircularNo. 962/05/2012 - Cx. 8, dated 28-3-2012, whereby Board had clarified inregard to payment of arrears fromcenvat credit earned at a later date,there was no restriction to utilisecenvat credit even at later date at timeof payment of service tax - Held, yes -Whether since a specific provision forwaiver of penalty was made in respectof renting of immovable propertyunder section 80(2) and condition

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specified for non imposition ofpenalty under sections 76, 77 and 78had been complied with by assessee,i.e., service tax along with interest waspaid within time specified in section80(2), no penalty was imposable onassessee

Citation [2017] 77 taxmann.com 59 (Mumbai -CESTAT) BombayWell Print Inks (P.) Ltd.v.Commissioner of Central Excise &Service Tax, Nagpur

Sr. No. 7RelevantSection Sectiom 65(97a)RelevantStatute Finance Act 1994IssueSub Issue Site Formation and clearance,

excavation and earth moving anddemolition

Favour of RevenueIssuingAuthority Supreme CourtJudgment Assessee was engaged in business of

construction and implementation ofvarious maintenance projectsincluding widening and carpeting ofroads, etc. - One 'S' engaged indevelopment of residential and otherbuildings, colonies and townshipissued a work order to assessee forlevelling of agriculture land includingfilling of gorges/nallah, removingshrubs, grass and rubbish, etc. - 'S'made payments to assessee for workorder and assessee issued bill/receiptsto 'S' for same - Assessee did not payservice tax on said work, nor showedsame in service tax return - However,it in response to notice issued byAdjudicating Authority appearedbefore him and relying on section65(97a) and 65(105)(zzza) claimedexemption from service tax -Adjudicating Authority disallowedassessee's claim for exemption andconfirmed demand of service tax uponit invoking extended period oflimitation - High Court held thatactivities undertaken by assessee werecovered under section 65(97a) and itwas not exempted from service tax - It

further held that since assessee did notdisclose aforesaid work at all andthere was a clandestine suppression offacts on its part, extended period oflimitation was available to revenue -Whether SLP filed against judgmentof High Court was to be dismissed -Held, yes

Citation [2017] 77 taxmann.com 69 (SC)NKG Infrastructure Ltd.v.Commissioner of Customs, CentralExcise & Service Tax Ghaziabad

Sr. No. 8RelevantSection Section 76, 77 and 78RelevantStatute Finance Act 1994IssueSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT NewDelhiJudgment Where assessee were reflecting all

activities in their balance sheet and nosuppression or malafide could beattributable to assessee, demandraised beyond normal period oflimitation was justified to be held astime barred.

Citation (2016) 23 CCHST 1545 DelTribM/S. ASHISH ENTERPRISES & COvs.COMMISSIONER OF CENTRALEXCISE JAIPUR I

Sr. No. 9RelevantSection Section 65B(44) and Section 66E(i)RelevantStatute Finance Act 1994IssueSub Issue Restaurant ServicesFavour of AssesseeIssuingAuthority High Court of KeralaJudgment In Finance Act, 2012, levy and

collection of service tax, provision hadbeen incorporated by which serviceprovided by restaurant, eating jointsor mess, in relation to serving of foodand beverages (whether or notintoxicating) having Air Conditioningfacility was part of service as definedu/s 65B(44) of 1994 Act for purpose of

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charging service tax—Petitioner wasassociation of Hotels and few Hotelsapproached this Courtcontending thatss 66E(i), 65B (22) and 65B (44) of 1994Act, as amended by Finance Act 2012;to extend it sought to levy service taxon service provided by restaurant,eating joints or mess, in relation toserving of food and beverages(whether or not intoxicating) havingAir Conditioning or Central Airheating in any part of establishment atany time during FY was illegal, ultravires, beyond legislative competenceof parliament and unenforceable andliable to be struck down asunconstitutional, null and void—Counter affidavit had been filed onbehalf of respondents 1 to 3supporting stand taken in statement—It was submitted that service tax waslevied under residual power oftaxation in Centre in terms of Entry 97of List I—Petitioner placed reliance onjudgment of this Court in KeralaClassified Hotels and ResortsAssociation v. Union of India—Held,Court placed reliance on judgment ofConstitution Bench inK.Damodarasamy Naidu & Bros. v.State of Tamil Nadu and otherswherecase related to charge of servicetax on air conditioned restaurantswhere they were vending liquors andhad license to serve liquor—Since thiscase also stands in same footing,judgment in Kerala Classified Hotelsapplied to fact situation of presentcase also—Judgment in KeralaClassified Hotels had also beenupheld by Division Bench of thisCourt in Union of India v. KeralaClassified Hotels and ResortsAssociation—That it was submittedby respondent that matter waspending before SC, but, no stay hadbeen granted in matter—Therefore,HC was inclined to follow law laiddown by this Court and accordingly,this writ petition was allowed

Citation (2016) 23 CCHST 1299 KerHCKERALA CLASSIFIED HOTELS ANDRESORTS ASSOCIATION,THIRUVANANTHAPUAM & ORS.vs.UNION OF INDIA, NEW DELHI

Sr. No. 10RelevantSection Section 73(1) and Section 78RelevantStatute Finance Act 1994Issue Service Tax on CommissionSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT NewDelhiJudgment Assessee-Respondent was a franchise

of BSNL for marketing anddistributing of BSNL Telecom servicesand products, such as, pre-paid/post-paid sim-card/re-chargevouchers/top up to BSNL customersand receiving commission/discountfrom BSNL Telecom services—Revenue was of view that servicesprovided by respondent to BSNL wastaxable under category of BAS—Therefore, show cause notice wasissued toassessee for period 2005-2010on account of marketing and sale ofre-charge vouchers, top up and sim-card of BSNL Telephone services forwhich they were liable to pay servicetax oncommission received from thesale of such services—Matter wasadjudicated and demand of service taxwas confirmed against theassessee,alongwith interest andvarious penalties were imposed—Order was challenged byassesseebefore Commissioner (Appeals) whorelied on various judicialpronouncement and held thatassesseewas not liable to pay servicetax on amount ofcommission/discount received fromBSNL Telecom and dropped demandagainst assessee—Hence, presentappeal—Held,in case of MartendFood & Dehydrates Pvt. Ltd. [2013(30) S.T.R. 634 (Tri.-Del.)] it was heldthat activity of purchase and sale ofSIM card belonging to BSNL whereBSNL had dischargedService Taxonfull value of SIM cards, did notamount to providing BusinessAuxiliary Services and confirmation ofdemand on distributor for secondtime was not called for—In the lightofabove decision, issue was no moreres-integra—Therefore, assesseewasnot liable to pay service tax under

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category of BAS and hence there wasno infirmity in impugned order—Appeal filed by the Revenue wasdismissed

Citation (2016) 23 CCHST 1475 DelTribCCE, RAIPUR vs.M/S. ANTULAL &SONS

Sr. No. 11RelevantSection Section 76, 77 and 78RelevantStatute Finance Act 1994IssueSub Issue Manpower Supply, Security ServicesFavour of Partly in favour of assessee and partly

in favour of RevenueIssuingAuthority CESTAT MumbaiJudgment Assessee, Security Guards Board for

Greater Bombay & Thane Dist. wasengaged in providing security guardsto Industries in their jurisdiction—Assessee were collecting wages andallowances of security guard and 5%administration charges from theirclients—Revenue issued show-causenotice to assessee to recover ServiceTax under head of Security Agencyand Manpower Recruitment AgencyServices alleging that assesseeprovided said services to theirclients—Demand was raised on entireamount of wages and allowances andadministration fee received fromclients—Demand was confirmed byCommissioner and equivalent amountof penalty u/s 76 was imposed—Penalty of Rs.20 crores was alsoimposed u/s 78 of the Finance Act,1994—Further Penalty was alsoimposed u/s 77 of the Finance Act,1994—Aggrieved by said order,assessee were in appeal beforeTribunal—Held,Assessee were aBoard constituted under the Act,1981—It was apparent that wages andallowances were collected by Boardas Agency for payment to concernedpersons/authorities—Therefore,wages and allowances were excludiblefrom value of service tax—Thus,taxable value for purpose of levyneeded to exclude these charges—Demand was modified to that

extent—FurtherBoard had beencreated for welfare of working class—In these circumstances, invoking s 80of the Finance Act, 1994, penalties setaside u/s 76 and 78 of the Finance Act,1994—Appeal was thus allowedpartially

Citation (2016) 23 CCHST 1474 MumTribSECURITY GUARDS BOARD FORGREATER BOMBAY & THANE DIST.vs.COMMISSIONER OF CENTRALEXCISE, THANE-II

Sr. No. 12RelevantSection Section 66RelevantStatute Finance Act 1994Issue Charge of Service taxSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Adjudicating Authority held that

assessee, a sugar factory, was liable todischarge service tax liability onamount paid by it as freight chargesfor transportation of sugarcane fromfields to its factory - He rejectedsubmission of assessee thattransportation of sugarcane was doneby farmers as per agreement and saidamount paid by it as freightinward/transportation charges wasrecovered from individual farmers -Whether since it was apparent fromrecord that assessee had deductedamount paid by it towardstransportation charges from sale billsof farmers, assessee was not liable topay service tax on amount oftransportation charges - Held, yes

Citation [2017] 77 taxmann.com 216 (Mumbai -CESTAT) ShreenathMhaskoba Sakhar Karkhana Ltd.v.Commissioner of Central Excise,Pune-III

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Sr. No. 13RelevantSection Section 65(12)RelevantStatute Finance Act 1994IssueSub Issue Banking and Financial ServicesFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Appellant had recovered rent for the

Computer colour display machinessupplied to their dealers – no taxliability arises under ‘Banking & OtherFinancial Services' – impugned orderset aside and appeal allowed

Citation 2017-TIOL-261-CESTAT-MUMKANSAI NEROLAC PAINTS LTDVsCOMMISSIONER OF CUSTOMSMUMBAI

Sr. No. 14RelevantSection Section 83RelevantStatute Finance Act 1994Issue RefundSub IssueFavour of RemandedIssuingAuthority CESTAT New DelhiJudgment Issue relates to denial of refund of

service tax under Notfn 09/2009-ST asamended by No. 15/2009-ST claimedby Special Economic Zone (SEZ) -Commissioner (A) has held thatservices namely Air Travel agentservices, Catering services, mobilephone service, stamping & incentivesservices, House Keeping services, renta cab services and Canteen serviceshave no nexus with manufacturing ofpharmaceutical products - Serviceswere utilized by assessee in relation totheir SEZ operation, which is evidentfrom letter dated 02.09.2009 addressedto Jurisdictional service tax authorities- Disputed service were dulyapproved by DevelopmentCommissioner in terms of notfn dated03.03.2009 - Thus, services consumedwithin SEZ area should qualify forrefund benefit under Notfn dated03.03.2009, upto 19.05.2009, for the

reason that notfn dated 20.05.2009 willnot have any retrospective applicationand same will apply prospectively -Thus, rejection of refund claim priorto 20.05.2009 is not sustainable

Citation 2017-TIOL-259-CESTAT-DELM/s LUPIN LTDVsCOMMISSIONER OF CENTRALEXCISE, INDORE

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4.3 Case Laws related to Customs

Sr. No. 1RelevantSectionRelevantStatute

Customs Act 1962 & Customs TariffAct 1975

Issue Anti Dumping DutySub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Where: (a) provisional anti-dumping

was levied on 2-5-2002 and samebecame ineffective on completion of 6months on 1-11-2002, and (b) finalanti-dumping was levied only on 1-5-2003, then, no anti-dumping dutycould be levied during gap period,viz., 2-11-2002 to 30-4-2003

Citation [2015] 62 taxmann.com 184 (SC)Commissioner of Customs, Bangalorev.G.M. Exports

Sr. No. 2RelevantSection Section 27ARelevantStatute Customs Act 1962Issue Interest on delayed refundSub IssueFavour of AssesseeIssuingAuthority CESTAT MUMBAIJudgment Appellant paid an amount of

Rs.30,53,905/- at the time ofinvestigation and which payment wasconfirmed as duty and amount wasappropriated in o-in-o dated01.05.1996 - therefore, there is nodoubt that what has been paid byappellant has been adjusted towardsduty and it is not a mere pre-depositas canvassed by Revenue - furtherwhile passing refund order,adjudicating authority had consideredthe applicablity of unjust enrichmentand only thereafter, granted refundwhich also shows that what wassanctioned as refund was only dutypaid in excess - therefore, question ofpayment of interest on delayed refundwould automatically arise - appellanthad filed refund application on

12.09.1994, therefore, provisions ofsection 27A of CA, 1962 is clearlyattracted and said section provides forpayment of interest on expiry of threemonths from the date of refundapplication till date of grant of refundirrespective of when the order forrefund was actually passed - sinces.27A itself came into force in May1995 and appellant claimed interestfor period from 01.12.1995 onwards,appellant is rightly entitled for interestat applicable rates from 01.12.1995 tillthe date of actual payment of refund -appeal allowed with consequentialrelief

Citation 2015-TIOL-2202-CESTAT-MUMM/s S S DYES AND CHEMICALSVsCOMMISSIONER OF CUSTOMSMUMBAI

Sr. No. 3RelevantSection Section 110RelevantStatute Customs Act 1962Issue Seizure of Goods, Documents and

thingsSub IssueFavour of AssesseeIssuingAuthority High Court of DelhiJudgment Whether if Customs department

decides to confiscate seized goods, ashow-cause notice under section124(a) has to be issued; CustomDepartment cannot take shelter underdevice of detention of goods in orderto avoid consequences flowing fromseizure of goods - Held, yes - Whetherin case Customs department, for anyreason whatsoever, is not able to givea show cause notice under section124(a) within six months or withinextended period of further six months,then, in terms of section 110(2), goodshave to be released to person fromwhom they have been seized

Citation [2017] 77 taxmann.com 50 (Delhi)Jatinder Kumar Sachdevav.Union of India

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Sr. No. 4RelevantSection Section 141 read with Section 157RelevantStatute Customs Act 1962Issue Conveyances and goods in Service

AreaSub IssueFavour of RevenueIssuingAuthority High Court of DelhiJudgment Whether where Central Board of

Excise and Customs exercising itspowers under sections 141(2) and 157of Customs Act notified Handling ofCargo in Customs Areas Regulations,2009 and regualtion 6(1)(l) thereofobliged customs cargo serviceproviders not to charge demurrage incertain cases, said regulation did notviolate articles 14 and 19(1)(g) ofConstitution - Held, yes

Citation [2017] 77 taxmann.com 92 (Delhi)Delhi International Airport (P.) Ltd.v.Union of India

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