Leaf No: 64 Month : July Year : 2015


Has the GST boat hit the ground?

- Team SA

At last, politics has overshadowed everything else and the Rajya Sabha was not able to discuss and pass the 122nd Constitutional Amendment Bill. No doubt, corruption is a serious issue to be discussed in the Parliament. But any issue, however important it may be, cannot take hostage of all other equally important issues.
Though there cannot be any second opinion for anyone as to whether we need GST or not, if we critically examine the dissents expressed by the opposition parties, the feebleness of such objections would stare at us.
GST is going to be major tax revenue for the Union Government and State Government and how its dynamics would really work is anybody's guess. In such a scenario, how can we have a Constitutional ceiling of 18 % rate? Is it not too much for asking?
In the GST regime, where seamless credit is ensured, where the need to keep stock transfers outside the definition of "supply"? The Committee has already suggested that the 1 % additional non vattable tax should not apply to stock transfers.
What is the big difference if tobacco and alcohol are kept inside GST as per the Constitution and allowing GST council to decide the date of its implementation or keeping it outside the Constitution and bring it within the GST, as and when required, by a Constitutional amendment? Being non merit goods, there is no rationale of allowing set off for the duties paid on tobacco products and alcohol? When its use is sought to be discouraged, why the duties paid on them should be Vatted? Imagine, Cenvat credit of the duties paid on the Cigarettes smoked by the MD of a company?
How can the Constitution safeguard the Local bodies' revenues? Is it safeguarded now? It is the responsibility of the State Governments to legislate and if everything needs to be covered in the Constitution, our Constitution should have thousands of clauses and schedules.
It is a known fact that the compliance level of state levies and its enforcement are far from satisfactory. A five year compensation has been assured to the States for any revenue loss post GST. What about the revenue loss due to inefficient tax administration in the State? Will not this assured compensation, further de-incentivise proper tax administration by the States? Why nobody is talking about it?
Being such a major economic reform, why can't we allow it to happen, see how it works and continuously fight for its improvement, instead of blocking it at the threshold? 

 WCO Guide published by World Customs Organization (WCO) for Customs Valuation and Transfer pricing.

 Trade with ISIL and related terrorist organisations in oil and oil products (hydrocarbons) and items of cultural, scientific and religious importance is Prohibited.

 Import policy of ‘Controlled Substances’ under the NDPS Act, 1985.

 Export of sawn timber to Nepal made exclusively out of imported wood logs through the port of Kolkata has been permitted from the Land Customs Station (LCS) of Raxaul.

 Provisions relating to import of certain categories of processed metallic scrap, at designated ports having Scanners/Radiological Detection Equipments (RDEs) facilities.

 Amendment in Area / Region of operation of Pre-Shipment Inspection Agencies appearing in Appendix- 2G of Appendices and Aayat Niyat Forms of FTP 2015-20.

 Enlistment under Appendix 2E - Agencies Authorized to issue Certificate of Origin (Non-Preferential). Public Notice No.25/2015-2020 dated the 6th July, 2015.

 Allocation of additional quantity for export of raw sugar to USA under Tariff Rate Quota.

 Additions/amendments in Table 1 (containing List of Country Groups) and Table 2 [containing ITC (HS) code wise list of products with reward rates] of Appendix 3B under the Merchandise Exports from India Scheme (MEIS) notified.

 Corrections in Public Notice 27 dated July 14, 2015 amending Table 2 [containing ITC (HS) code wise list of products with reward rates] of Appendix 3B under the Merchandise Exports from India Scheme (MEIS) notified.

 Operationalisation of online payments through debit / credit cards.

 Instructions regarding maintenance of Records in Electronic Form and authentication of records by Digital Signature – manner of verification.

 Instructions regarding Detailed Scrutiny of Central Excise Returns.

 Clarification relating to Notification Nos.30/2004, 1/2011 & 12/2012- CE.

 Detailed manual scrutiny of Service Tax Returns.


 Amendments to Notification 12/2012.

 Digitally signed invoices in Central Excise and Service Tax - Conditions, safeguards and procedures.

 Regarding Exemption for customs duty on cut and polished diamonds imported by specified agencies in FTP.

 Rate of exchange of conversion of the foreign currency with effect from 03rd July, 2015.

 Tariff value of gold decreased.

 Definitive anti-dumping duty levied on imports of steel and fibre glass measuring tapes and their parts and components, originating in or exported from the People’s Republic of China for a period of five years.

 Definitive anti-dumping duty levied on imports of Phenol, originating in or exported from South Africa for a period of five years.

 Anti-dumping duty levied on “Glass Fibre and articles thereof”, falling under heading 7019 of the First Schedule to the Customs Tariff Act, originating in, or exported from, People’s Republic of China, imposed vide Notification No. 30/2011-Customs dated the 4th March 2011, extended for a further period of one year i.e upto 13th July, 2016.

 Definitive anti-dumping duty levied on imports of Compact Fluorescent Lamps (CFL), originating in or exported from the People's Republic of China for a period of five years.



 Input tax credit refund application in Form W-matter can be re-opened if refund wrongly made. Matter to be examined by authority and Court will not go into facts in W.P - Interfit Techno Products Ltd., Vs Principal Secretary of Commercial taxes, Chennai - 2015 81 VST 389 (Mad).

 Interstate sale or local sale - Goods transferred from Dealer’s office at Faridabad to Delhi against F form and goods then sold to buyer against proper invoice. No material to show that goods moved as a result of contract. Sale is rightly taxed as local sale - MRF Limited Vs Commissioner of Trade and Taxes - 2015 81 VST 461 (Delhi).

 Works Contract - Provision for valuation of goods transferred. Deductions for land cost and profit to be considered by Assessing Authority at proper stage - C.R.E Developer’s Association of India Vs State of Maharashtra & Anr - 2015 82 VST 155 (Bom).

 Purchase of goods by branch office within state and transfer to head office outside the State - Transaction not interstate sale - No inextricable connection between movement of goods and sale-Transaction liable to tax under State law - Commissioner of Commercial Taxes, Hyderabad Vs Desai Beedi Company - 2015 82 VST 242 (SC).

 Commissioner Circular stating that works contracts executed for SEZ not to have benefit of zero rating is valid - Tulsyan NEC Limited Vs Assistant Commissioner (CT), Harbour III, Chennai - 2015 82 VST 63 (Mad).

 Whether if it is provided in the statute that the owner or other person in charge of the goods vehicle, shall deliver within the prescribed period, the transit pass to the officer in charge of the last check post or barrier, before the exit of the goods vehicle from the State, assessee's vehicle need not carry E-Transit pass in the middle of the transit - Bhora Marbles Vs CTO - 2015 TIOL 1710 HC MAD.

 Whether if any authorization issued outside VAT is or without unique number cannot be considered as a valid authorization for audit or assessment, and any officer conducting audit or assessment without valid authorization shall be liable for disciplinary action - Tulasi Surgicals Vs CTO - 2015 TIOL 1698 HC AP.

 Extended period of limitation is not invokable when issue in dispute was entangled in judicial battle and that assesee did not take license because of such confusion - Kiran Ispat Udyog Vs. CCE - 2015 321 ELT 182 S.C.

 Separate Penalties are not imposable on sole proprietorship firm and proprietor - CCE Vs. Gyanchand Jain - 2015 321 ELT 199 Bom.

 Ordinarily writ petition would not lie against issuance of summons - Addl. Director General Vs. J.K.S. Air Travels - 2015 321 ELT 213 (Mad.)

 When provisional assessment is finalised and dropped under Rule 9B (5) of Central Excise Rules, higher differential duty can only be demanded through a corrigendum to Show cause notice and not through appeal under Section 35E(4) - CCE Vs. Tablets India Ltd - 2015 TIOL 1554 HC MAD CX.

 Amounts erroneously refunded cannot be recovered by an  appeal under Section 35E in absence of a show cause notice for recovery of such amount - CCE Vs. Pricol Limited - 2015 39 STR 190 (Mad.)

 Order of rejection of declaration filed by designated authority against VCES application is an appealable order under Section 85 of Finance Act 1994 - Narasimha Mills Pvt Ltd Vs. CCE (Appeals) - 2015 TIOL 1504 HC MAD ST.

 Mere pendency of appeal before Supreme Court does not take away the binding effect of a High Court decision - CCE Vs. Philips Carbon Black Ltd - 2015 39 STR 7 (Guj).

 Tribunal has no power to dismiss the appeal filed on recommendation of Committee of Commissioners under Section 86 (2) on the ground that no meeting of Commissioners took place, or that, there were no independent reasons recorded by the Committee of Commissioners - CST Vs. Japan Airlines International Co Ltd - 2015 TIOL 1645 HC DEL ST LB.

 Erection of temporary tents etc. in the Mela area during the Magh Mela season is for religious congregation and hence not liable to service tax under Mandap Keeper Service - Lallooji and Sons Vs. Officer In Charge Magh Mela - 2015 TIOL 1696 HC ALL ST.

 Delay beyond period of 30 days over and above statutory period of 60 days under Section 35 of Central Excise Act cannot be condoned - Panoli Intermediate India Pvt Ltd Vs UOI - 2015 TIOL 1556 HC AHM CX LB.

 Mandatory pre-deposit of 7.5% under amended Section 35F of the Central Excise Act, 1944. In the light of decisions by the High Court of Kerala and Andhra Pradesh, it is held - as the amended provisions of the Act are not given retrospective effect as of from an anterior date, it has been construed that the amended provisions are prospective - Fifth Avenue Sourcing Pvt. Ltd. Vs Commissioner of Service Tax, Chennai - 2015 TIOL 1592 HC MAD ST.

 Remission of duty on final products does not warrant reversal of credit availed on inputs - CCE Vs. Joy Foam Pvt Ltd - 2015 TIOL 1509 HC MAD CX.

Editor's Note: Provision to reverse credit on inputs has since been brought under Rule 3(5C) of CCR, 2004.

 When there are clear divisible contracts for supply of materials as well as provision of service, such services cannot be in disguise taxed under Central Excise Act by adding to assessable Value - BEL Vs. CCE - 2015 39 STR 252 (Tri-Del).

 Request for storage of manufactured goods outside factory cannot be turned down with insistence on expansion of factory space as same would render provision of Rule 4(4) of CER 2002 redundant - Sulzer India Pvt Ltd vs CCE - 2015 TIOL 1472 CESTAT MUM.

 Rule 6 (6) (vii) of Cenvat Credit Rules is applicable to goods manufactured in India and it is absurd to contend that same is applicable only to goods imported to India - CCE Vs. Bharat Heavy Electricals Ltd - 2015 TIOL 1317 CESTAT DEL.

 Manufacturer is entitled to avail entire credit of fuel used in generation of electricity which was sent to power grid for synchronisation and received back fully in factory - Jindal Stainless Ltd Vs.CCE - 2015 TIOL 1397 CESTAT DEL.

 Refund of service tax paid on input services is not available for export of free samples as there is no receipt as required under Notification No.41/2007-ST - Raymond Woolen Outerwear Ltd Vs. CCE - 2015 TIOL 1306 CESTAT MUM.


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