REGULATORY UPDATES
GST LAW
NOTIFICATIONS
- Notification No. 14/2021-Central Tax (Rate) dated
18.11.2021
The CBIC has augmented the GST Rate from 5% to 12% on fabrics, apparels and footwear with the objective to eradicate the problem of the inverted duty structure faced by the small segment of the textile value chain. The same shall come into force w.e.f. 01.01.2022. - Notification No. 15/2021-Central Tax (Rate) dated
18.11.2021
The CBIC has notified that certain services supplied by way of composite supply of works contract like construction of dams, canal, residential complex for self-use; civil structure other than for commerce and industry; involving earth work more than 75%, which are provided to Governmental Authority or a Government Entity, the same would be liable @18% as against 12%/5% at present. The same shall come into force w.e.f. 01.01.2022. - Notification No. 16/2021-Central Tax (Rate) dated
18.11.2021
The CBIC has notified that services provided as listed under article 243G/W to Governmental Authority or a Government Entity, would be liable to tax as they are excluded from exemption entries. The same shall come into force w.e.f. 01.01.2022. - Notification No. 17/2021-Central Tax (Rate) r/w
Notification 17/2021-IT(Rate) dated 18.11.2021
The CBIC has notified that GST on intra-state and inter-state supplies of motorcycles, omnibus or any other motor vehicle shall be paid by electronic commerce operators. The same shall come into force w.e.f. 01.01.2022.
CIRCULARS
- Circular No. 165/21/2021-GST dated
17.11.2021
The CBIC has clarified that where an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier, in convertible foreign exchange or in Indian Rupees as permitted by the RBI, the invoice may be issued without having a Dynamic QR Code. - Circular No. 166/22/2021-GST dated
17.11.2021
The CBIC has clarified various issues pertaining to the refund claim of GST. Some of the clarifications have been encapsulated below for ready reference: -
- The provisions of section 54(1) of the CGST Act regarding time period, within which an application for refund can be filed, would not be applicable in cases of refund of excess balance in electronic cash ledger.
- Furnishing of certification/declaration under Rule 89(2)(l) or 89(2)(m) of the CGST Rules, 2017 for not passing the incidence of tax to any other person is not required in cases of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases.
- It is not mandatory for the registered person to utilize the TDS/TCS amount credited to his electronic cash ledger only for the purpose for discharging tax liability. Now, the registered person is at full liberty to discharge his tax liability in respect of the supplies made by him during a tax period, either through debit in electronic credit ledger or through debit in electronic cash ledger, as per his choice and availability of balance in the said ledgers.
- Further, as the tax on the supply of goods, regarded as deemed export, would be paid by the supplier in his return, therefore, the relevant date for purpose of filing of refund claim for refund of tax paid on such supplies would be the date of filing of return, related to such supplies, by the supplier.
CUSTOMS
INSTRUCTIONS
- Instruction No. 25/2021-Cus dated
24.11.2021
The CBIC has stated that the imported consignment of Alcoholic Beverage Bottled in origin and in bulk, containing alcohol quantity more than 10%, and doesn't have expiry date, the NOC issued in such cases shall have the validity of period of 300 days. Further, consignment which are lying at ports customs area beyond 300 days, in such cases, visual inspection may be carried out for re-validation of NOC on payment of applicable fee.
FOREIGN TRADE POLICY
TRADE NOTICE
- Trade Notice No. 22/2015-2020, dated
02.11.2021.
The DGFT has requested the trade and industry to submit their application for MEIS/SEIS/ROSL/ROSTCL claim on the online IT portal on or before 31.12.2021. Further, the said portal will not be operational after the said timeline. - Trade Notice No. 23/2015-2020, dated
09.11.2021.
The DGFT has re-constituted the Committee in order to ascertain the RODTEP rates for AA/EOU/SEZ. In this regard, the trade and industry are requested to submit their representations along with all the apposite information/documents with the committee. - Trade Notice No. 24/2015-2020, dated
15.11.2021.
The DGFT has extended the date of mandatory electronic filing of Non-Preferential Certificate of Origin (CoO) through the Common Digital Platform till 01.01.2022. - Trade Notice No. 25/2015-2020, dated
19.11.2021.
The DGFT has stated that IECs which have not been updated after 01.01.2014 shall be de-activated with effect from 06.12.2021. Further, the concerned IEC holders are provided a final opportunity to update their IEC in this interim period till 05.12.2021, failing which the given IECs shall be de-activated from 06.12.2021. Furthermore, any IEC so de-activated, would have the opportunity for automatic re-activation without any manual intervention or any visits to the DGFT RA. For IEC re-activation after 06.12.2021, the said IEC holder may navigate to the DGFT website and update their IEC online.
PUBLIC NOTICE
- Public Notice No. 37/2015-2020, dated
15.11.2021.
The DGFT has notified the Standard Operating Procedures (SOP) for random checking of imported consignments of metal scrap with respect to radioactive contamination. The same shall come into force w.e.f. 15.11.2021.
RATIO DECIDENDI
GST LAW
- In re GEW (India) Pvt. Ltd., Advance Ruling No. KAR
ADRG 63/2021 – Karnataka AAR
The applicant, M/s Gew India Pvt. Ltd., has sought an advance ruling on whether the applicant registered at Noida, U.P. is required to take registration in the state of Karnataka for execution of works contract issued by M/s L&T, Karnataka at Karnataka. Karnataka Authority for Advance Ruling (KAAR) held that no separate registration is required for supply of works contract services in Karnataka by the assessee registered at Noida, U.P. as invoice can be raised by the assessee charging IGST from its registered office in Noida, U.P. The KAAR observed that the Applicant is neither having and nor intending to have any establishment in Karnataka, therefore the location of the supplier in the present case would be the place of the business of the Applicant which is Noida, UP. It was further observed that, as per Section 12(3) of the IGST Act, service provided by the applicant in relation to immovable property by way of grant of right to use immovable property or for carrying out or co-ordination of construction work or any ancillary services, the place of supply of services shall be location of immovable property i.e., Karnataka. - In re TATA Power Company Limited, Advance Ruling No.
GST-ARA-99/2019-20/B-92 – Maharashtra AAR
M/s. The TATA Power Company Limited, the applicant, sought an advance ruling in respect of whether the recovery of an amount towards Top-up and parental insurance premium from the employees, amounts to a supply of any service under Section 7 of the CGST Act, 2017. it was observed that the activity undertaken by the applicant like providing of mediclaim policy for the employees and their parents through the insurance company neither satisfies conditions of section 7 to be held as "supply of service" (in the instant case, insurance service) nor is it covered under the term "business" of section 2(17) of CGST ACT 2017. Hence, it was held, that since the applicant is not rendering any services of health insurance to their employees' parents, there is no supply of insurance services in the instant case of transaction between employer and employee. - M/s S S Traders vs. State of UP and Ors., Writ Tax No.
651 of 2021 – Allahabad HC
In the instant case, registration of the petitioner was cancelled on the ground, inter alia, that no one was found at the place of the business and neither any business activity nor any bill book were found at the time of survey and the landlord of the premises had informed the survey team that no one came there to start a business and no business activity takes place there; that after scrutinising the return, it was found that the petitioner had purchased goods worth Rs.29,50,000/- from non-existing dealers and availed bogus input tax credit with mala fide intention. The petitioner challenged the cancellation of his registration. It was noted that the proviso to section 29(2) mandates opportunity of hearing to be provided to the person whose registration is proposed to be cancelled before cancelling the registration. The court observed that where the statute provides for a procedure, then the procedure is to be followed in the letter and spirit of the statute or not at all. Denial of opportunity of hearing to the petitioner vitiates the proceedings as well as the orders cancelling the registration of the petitioner. Therefore, the order of cancellation of registration was quashed. - In re Airbus Group India Pvt. Ltd., Advance Ruling No.
KAR/AAAR/Appeal-09/2021-22 – Karnataka AAR
The applicant-appellant filed an appeal before the Authority of Appellate Advance Ruling, Karnataka (KAAAR) against and aggrieved by the ruling given by Karnataka Authority for Advance Ruling (KAAR). The issue involved was whether the activities carried out by the applicant-appellant in India would constitute a supply of "Intermediary Service". The applicant-appellant is operating as a subsidiary of Airbus, France. Airbus France has entered into an agreement with the applicant-appellant in terms of which the applicant-appellant is required to render various technical advisory and business support services in relation to supplier development activities, for which, the applicant-appellant would be remunerated with a service fee. The agreement specifically restricted the applicant-appellant to decide or select any supplier and agree upon the terms and conditions of the supply and the said decisions are the prerogative of Airbus France. The applicant-appellant is also not responsible for issuance of purchase order or payment for the supply made by the vendor. The KAAAR, in light of section 13(8)(b) of the IGST Act, 2017, observed that the applicant-appellant is arranging for and facilitating the principal in procuring a supply of goods from India, and is not undertaking any supply of goods. The actual supply of the goods is done by the Indian supplier directly to the Airbus France. Since the applicant-appellant is not supplying such goods on his own account, the applicant-appellant is clearly playing the role of Intermediary for Airbus France, as envisaged under Section 2(13) of the IGST Act, 2017. Further, it was held that by virtue of Section 13(8)(b), the place of supply of the intermediary service provided by the applicant-appellant to Airbus France, is in India. Therefore, the intermediary services do not qualify as export of service.
CUSTOMS
- M/s Jai Balaji Industries Ltd. vs. Commissioner of CGST
and Excise, 2021-TIOL-705-CESTAT-KOL – CESTAT
Kolkata
The appellant is engaged in manufacture of sponge iron and allied products. The credit was denied merely on the ground that goods against which loading services have been availed have not been received by appellant in their factory. The goods in respect of which loading services have been availed have been duly exported outside the country. The issue in the instant case was whether loading services availed by appellant is eligible for credit. It was held that, in that scenario, the appellant is eligible for claiming refund of input service under Rule 5 of Cenvat Credit Rules, 2004 subject to compliance with the conditions prescribed therein. Instead of availing refund of input service, the appellant has availed the credit under Cenvat Credit Rules for payment of output excise duty on excisable goods cleared from the factory. Therefore, it was observed that there arose no reason to deny the credit.
NEWS NUGGETS
- A tough yarn for textiles: High input costs, GST expected to crimp margins1
- 'Completely unjustifiable' GST rate hike on apparel, textiles and footwear show the Govt has no easy choices2
- Iron pellets manufactured products, no ban on export: Centre3
- String of FTAs to boost services exports: Piyush Goyal4
- Philippines pushes early PTA with India to strengthen economic partnership5
- Export of gems, jewellery more than double in first 7 months in FY22: Goyal6
- CBIC tells officials to help boost Nov GST Collections7
- GST notification to correct tax anomaly in textiles: FM Sitharaman8
- Tweaks to taxation: Finance Ministry seeks trade, industry body views9
- Union Budget: Finance Ministry invites suggestions on taxation from industry and trade bodies10
Footnotes
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