India: Indirect Tax Updates - November 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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
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 (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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