India: Indirect Tax Updates - November 2017

Last Updated: 24 November 2017
Article by Dinesh Agrawal, Pranay Sahay, Parin Masalia and Anjali Krishnan

Most Read Contributor in India, December 2017

GOODS & SERVICES TAX ("GST")

Notifications

  • Reduction in rates for restaurant services: Rate of GST payable on restaurant services have been reduced to 5% from 12%.

Type of Restaurants

Rate

Condition

  1. Stand-alone restaurants (whether or not air conditioned)
  2. Food parcels or takeaways
  3. Restaurants in a hotel having room tariff of less than INR 7,500 per unit per day

5%

No ITC

  1. Restaurants in a hotel having room tariff of INR 7,500 and above per unit per day (even for a single room)

18%

Full ITC

  1. Outdoor catering services

18%

Full ITC

(Ref: Notification No. 46/2017-Central Tax (Rate), Notification No. 48/2017-Integrated Tax (Rate) and Notification 46/2017-Union Territory Tax (Rate) dated 14 November 2017)

  • Procurements made by specified research institutions to be taxed at concessional rates: Supply of scientific and technical instruments, computer software, accessories, prototypes valued at up to INR 50,000 in a financial year, etc. to public funded research institutions, departments and laboratories of Central and State Government, etc. are exempted from GST.

(Ref.: Notification No. 45/2017-Central Tax (Rate), Notification No. 47/2017-Integrated Tax (Rate) and Notification 45/2017-Union Territory Tax (Rate) dated 14 November 2017)

  • Export of services to Nepal / Bhutan: Supply of services to Nepal or Bhutan against Indian Rupees has been exempted from payment of IGST. However, such supply is not zero-rated and attracts reversal of input tax credit.

(Ref.: Notification No. 42/2017-Integrated Tax (Rate) dated 27 October 2017)

  • Concessional rate of tax for penultimate supply for export: Concessional rate of 0.1% GST have been provided for supply of goods to merchant exporters subject to certain conditions.

(Ref.: Notification No. 40/2017-Central Tax, Notification No. 41/2017-Integrated Tax and Notification 40/2017-Union Territory Tax dated 23 October 2017)

  • Deemed Exports notified: The following supplies have inter alia been notified as deemed exports in terms of Section 147 of the CGST Act
    • Supply of goods by a registered person against Advance Authorisation;
    • Supply of capital goods by a registered person against EPCG Authorisation;
    • Supply of goods by a registered person to an Export Oriented Unit;

(Ref.: Notification No. 48/2017-Central Tax dated 18 October 2017)

  • Composition Scheme: The threshold limit for the composition scheme has been increased to INR 10 million (in case of special category states except Jammu and Kashmir and Uttarakhand, the limit is INR 7.5 million). A person providing exempt service will also be eligible for composition scheme.

At the meeting held on 10 November 2017, the GST Council recommended that the turnover for eligibility should be increased to INR 20 million and that the supply of services by a composition taxpayer has been exempted up to INR 0.5 million.

(Ref.: Notification No. 46 / 2017 – Central Tax and Notification No.16 /2017- Union Territory Tax, both dated 13 October 2017)

  • Manual filing: The manual filing of documents and forms which were notified for electronic submission has been allowed. Manual format for refund form GST RFD-01 has been notified.

(Ref: Notification No.55 / 2017-Central Tax dated 15 November 2017)

  • Registration waived for suppliers of services with turnover below threshold: Service providers with an aggregate turnover below INR 2 million (for special category states except Jammu & Kashmir with turnover below INR 1 million) and making inter-state supply of services or making supplies through e-commerce operators are exempted from mandatory registration requirements. This is not extended to inter-state suppliers of goods.

(Ref.: Notification No. 10/2017-Integrated Tax dated 13 October 2017 and Notification No. 65/2017 -Central Tax dated 15 November 2017)

  • Procurement from unregistered suppliers: The GST payable under reverse charge for procurement of goods and services from unregistered persons has been suspended till 31 March 2018.

(Ref.: Notification No. 38 / 2017- Central Tax (Rate) and Notification No. 32/2017-Integrated Tax (Rate), Notification No. 38 / 2017- Union Territory Tax (Rate), all dated 13 October 2017)

  • Advance receipt: A supplier of goods who has not opted for a composition scheme is not required to pay GST at the time of receipt of advances but only at the time of issue of invoice

(Ref.: Notification No. 66 / 2017 – Central Tax dated 15 November 2017)

  • Leasing of motor vehicles: The rate of GST on leasing of motor vehicles purchased and leased prior to 1 July 2017 has been revised to 65 percent of the rate applicable on supply of like goods involving transfer of title in goods. This was to apply until 1 July 2020.

(Ref.: Notification No. 37 / 2017- Central Tax (Rate) and Notification No. 38 / 2017–Integrated Tax (rate), Notification No. 37 / 2017- Union Territory Tax (Rate), all dated 13 October 2017)

  • TDS / TCS: Registration and operationalization of Tax Deducted at Source (TDS)/Tax Collected at Source (TCS) provisions is suspended till 31 March 2018.

(Ref.: GST Council Recommendations released on 6 October 2017)

  • LUT / Bond: The Government has allowed all exporters holding an unblemished record to avail facility of LUT in place of a Bond and BG. It must be noted that exporters who have been prosecuted for tax evasion of an amount exceeding INR 25 million are ineligible for this facility. The exporters are required to give a self‑declaration.

(Ref.: Notification No. 37/2017-Central Tax and Circular No. 8/8/2017-GST dated 4  October  2017)

GST Rate Changes:

  • GST rates in respect of goods falling under 177 headings have been reduced from 28% to 18%, few goods have been brought down from a 28% rate to 12% and 5% respectively.
  • GST rates in respect of goods falling under 17 headings have been brought from 18% to 12%, 20 items have been reduced from 18% to 5%, 2 items from 18% to NIL, four items from 12% to 5% and 10 items have been brought down from 5% to NIL rate under GST.

Clarifications/Public notices/order:

  • Clarification on credit of aircraft parts on supply by way of branch transfers: It is hereby clarified that credit of GST paid on aircraft engines, parts & accessories will be available for discharging GST on inter-state branch transfers even if input tax credit is not allowed for supply of service of transport of passengers by air in economy class at GST rate of 5%.

(Ref.: Circular No. 16/16/2017-GST dated 15 November 2017)

  • Clarification on printing activity: It has been clarified that whether a printing activity constitutes a supply of goods or services shall be determined by applying the dominant nature test.

(Ref.: Circular No. 11/11/2017-GST dated 20 October 2017)

  • Goods sent on approval basis: It is clarified that in respect of goods sent on approval basis, the supplier shall issue delivery challan along with e-way bill wherever applicable for sending goods from one state to another. Further, the person carrying such goods is also required to carry an invoice book to enable him to issue an invoice on approval. In such a scenario, if the goods are sent from one state to another state, the said supply would attract levy of IGST.

(Ref.: Circular No. 10/10/2017-GST dated 18 October 2017)

  • Extension of time line for filing of return

Return

Tax period

Revised time

GSTR-1 (for persons whose aggregate turnover exceeds INR 15 million)

July to October 2017

31 December 2017

November 2017

10 January 2018

December 2017

10 February 2018

January 2018

10 March 2018

February 2018

10 April 2018

March 2018

10 May 2018

GSTR-1 (for persons whose aggregate turnover does not exceed INR 15 million)

July – September 2017

31 December 2017

October – December 2017

15 February 2018

January – March 2018

30 April 2018

GSTR-2

July 2017

30 November 2017

GSTR-3

July 2017

11 December 2017

GSTR-3B

January, February, March 2018

20 of the subsequent month

GSTR-4

July - September 2017

24 December 2017

GSTR-5

July-October 2017

11 December 2017

GSTR-5-A

July-October 2017

15 December 2017

GSTR-6

July 2017

31 December 2017

For other months it is yet to be notified

GST TRAN-1

31 December 2017

Revised GST TRAN-1

31 December 2017

ITC-01

July to September 2017

30 November 2017

ITC-04

July to September 2017

31 December 2017

(Ref.: Notification No. 54/2017 – Central Tax dated 30 October 2017, Notification No.  56/2017 – Central Tax, Notification No. 57/2017 – Central Tax, Notification No.  58/2017 – Central Tax Notification No. 59/2017 – Central Tax, Notification No.  60/2017 – Central Tax, Notification No. 61/2017 – Central Tax, Notification No.  62/2017 – Central Tax and Notification No. 63/2017 – Central Tax dated 15  November 2017)

Litigious issue

  • Unavailability of transitional credit: Section 140 of the Central Goods and Services Tax Act 2017 (CGST Act) provides for carry forward of the unutilised CENVAT credit and credit of taxes and duties in respect of inputs and inputs contained in the work-in-progress and finished goods lying in stock. However, such credit is subject to various conditions which substantially restricts availability of transitional credit even though such inventory has suffered excise duty or countervailing duty in the erstwhile regime:
    • A person is allowed to take transitional credit in respect of stock procured not earlier than one year preceding 1 July 2017. In other words, transitional credit can be availed only if stock is procured/imported between 1 July 2016–30 June 2017.
    • Traders, not possessing duty paying documents, are allowed to take transitional credit of 60% of the CGST paid where CGST rate is 18% or more and in other cases 40% of the CGST paid. Such transitional credit is allowed only for 6 tax periods. In other words, goods procured between 1 July 2016-30 June 2017 and sold on or after 1 January 2018 would not be eligible to transitional credit.
    • A manufacturer paying excise duty at fixed rate can take transitional credit in respect of stock only if he is in possession of duty paying documents.
    • A manufacturer or service provider, and also engaged in trading of bought out items can take transitional credit in respect of such traded items only if he is in possession of duty paying documents.

Above conditions and restrictions have resulted in double taxation and cascading tax effect. A number of persons have challenged these arbitrary conditions curtailing transitional credit before various High Courts.

DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION

Budgetary Support Policy – IGST / CGST refunds

To achieve continuity in benefits given under erstwhile area-based exemption notifications, a scheme has been notified under which refund of duty at the rate of 58 % CGST and 29% IGST shall be granted to eligible units after utilisation of input tax credit.

(Ref.: Notification No.F. No. 10(1)/2017-DBA-II/NER dated 5 October 2017)

CUSTOMS

Notifications

  • Imports against Advance Authorisation / EPCG: Exemption from IGST and Compensation Cess granted to all goods being imported under an Advance Authorisation Scheme / EPCG Scheme upto 31 March 2018. The condition prescribed is that the discharge of export obligation should only be through physical exports.

(Ref.: Notification No.79- Customs (Tariff) dated 13 October 2017)

  • Supplies to EOUs: Exemption from IGST and Compensation Cess granted to all goods supplied to EOUs upto 31 March 2018.

(Ref.: Notification No.78- Customs (Tariff) dated 13 October 2017)

Anti-Dumping Duty

  • Anti-Dumping Investigation: The recent developments in the ongoing Anti-Dumping Investigation are tabulated hereunder:

Sr. No.

Investigation Details

Recent Developments

  1.  

Anti-Dumping investigation concerning imports of "Straight Length Bars and Rods" originating in or exported from China PR.

Case No. 6/10/2017-DGAD.O.I. 16/2017

The time limit for filing the questionnaire response in relation to the captioned Anti-Dumping investigation has been extended up to 20 November 2017.

  1.  

Anti-Dumping investigation concerning imports of "Toluene DiIsocyanate" – (TDI) originating in or exported from China PR, Japan and Korea RP.

Case No. 14/36/2016-DGAD

The time limit for the investigation has been extended up to 04 January 2018.

FOREIGN TRADE POLICY

Extension of EO for EPCG

Following one-time relaxations under the EPCG Scheme have been provided:

  • Extension of export obligation period of Advance authorizations issued under Foreign Trade Policy 2002-07, Foreign Trade Policy 2004-2009 and Advance Authorisations issued prior to 5.6.2012 under foreign trade Policy 2009-14;
  • Delay in submission of requests for obtaining Block-wise extension in Export Obligation period has been condoned.
  • Delay in submission of requests for obtaining extension in Export Obligation period has been condoned; and
  • Acceptance of installation certificate by the RAs where the said certificate is submitted beyond 18 months.

(Ref.: Public Notice No. 34/2015-20, 35/2015-20, 36/2015-20 and 37/2015-20 dated 25  October 2017)

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
21 Dec 2017, Webinar, Mumbai, India
Contact Event Organizer: Khaitan & Co
The Insurance Group and the Private Equity Group at Khaitan & Co are pleased to invite you to an interactive webinar to discuss the implications of the Guidelines on private equity investment in the Indian insurance sector.
10 Feb 2018, Video/ Audio, Mumbai, India
Contact Event Organizer: Khaitan & Co Funds Team
This is to remind you that we will be hosting an audio-conference tomorrow, 10 January 2018, titled “SEBI’s Year End Bonanza to Investors and Fund Managers”, which is dedicated to fund managers and investors.
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions