Note from Editor

The Goods and Services Tax (GST), publicized as a 'Good & Simple Tax', brought with it expectations of a simple, stable and transparent tax regime, which would result in an overall reduction in the prices of goods and services and facilitate barrier-free movement of goods across India. While there is general consensus that GST has reduced the overall tax incidence and brought in efficiencies in supply chains, compliance related requirements and unprecedented litigation on several issues has consumed inordinate time & effort, which has kept everyone on tenterhooks! The Government has also walked a tight-rope in terms of its meeting the expectations of end consumers and industry as well as ensuring buoyancy in revenue collections and tax administration. Just like the last 2 years, the 3rd year of GST also promises to be nothing short of a roller coaster ride!

In this backdrop, we at Taxsutra kicked off a second series of our popular newsletter 'Navigating GST' with respected law firm Economic Laws Practice (ELP) last month, encapsulating everything that you need to know from the world of GST, along with incisive analysis from the ELP team. We now bring to you the second edition of the newsletter for the month of November 2019.

In the Thought Leadership section, ELP Partner Nishant Shah explains how the adoption of HSN system under GST as formulated under the Customs Tariff Act, 1975 has created anomaly in case of variety of products which could have more than one use in varied industries and could be classified either on the basis of its generic use or as also used in a specific industry. He recommends that till a single rate GST is implemented, authorities should review the product classification so as to overcome such anomalies that may cause unwanted stress for businesses.

In the Cover Story for this edition, the ELP team delves deep into the concept of "ITC under GST" which continues to bother the industry with the introduction of 20% capping rule. While explaining the evolution of the said concept, the author laments that "Capping the ITC to 20% by drafting the provisions in a very hazy manner without either expounding on its implementation mechanism nor on the matters connected therewith and incidental thereto, will make it difficult for businesses".

A new segment 'Expert Speak' features an interview with Mr. Jayesh M. Trivedi, President – (Secl. & Legal) & Company Secretary of The Great Eastern Shipping Company Limited, who, discusses how the country's largest private sector shipping company sailed past every challenge w.r.t. GST compliance and why GST is an important decision making factor in their business. Highlighting that ITC is major concern as far as the shipping industry is concerned, he expresses that "This is hampering the Indian shipping lines by making them less competitive when compared with foreign shipping lines who do not face any major bottleneck while servicing Indian cargo."

The Newsletter also gets you key judicial pronouncements from various High Courts & AARs in the section - 'From the Bench'. The 'Legislature at Work' section captures all the GST rate concessions and exemptions for goods/ services including the changes in GST compliance system. The newly introduced feature of "Allied Laws" captures all the latest affairs relating to Foreign Trade Policy, imposition of anti-dumping duty and more... In 'Legal Classics' we decode a landmark judgment of Jharkhand HC under the service tax regime, recently upheld by the Larger Bench of the Hon'ble Supreme Court holding that "no service tax liability shall arise on a club/ respect of the activities carried out for members applying the doctrine of mutuality". We wind up the newsletter with some Quotable quotes from Policymakers & Parliamentarians.

We hope you enjoy reading our second series of 'Navigating GST'! And we shall be back with another issue, sooner than you think...

Download: Navigating GST 2.0 : Issue 2 (pdf)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.