Newsletter

The DGFT vide Notification No. 16 dated 29 June 2019 had restricted the export of PPE medical coveralls for COVID-19 and fixed the quota of 50 lakhs PPE Coverall units per month. In line therewith, the DGFT has further laid down the application procedure and criteria for export of PPE Medical Coveralls as follows:

• Export of only 50 lakh units of PPE medical coveralls for COVID-19 will be allowed every month;
• Exporters may apply online through DGFT’s ECOM system for Export Authorization (Non-SCOMET restricted items);
• Applications filed from 1st to 3rd day of each month would be considered for the quota of that month;
• All applications would be examined in terms of the relevant provisions of the Handbook of Procedures and approvals will be done on 10th day of every month;
• Validity of export license will be for 3 months.

It has been further provided that for the purpose of eligibility for export license, the following criteria would be applicable:

• The Applicant shall be a manufacturer of PPE Coveralls (Certificate of registration from the concerned Department to be submitted);
• Copy of Testing of PPE medical Coveralls issued by the notified labs to be submitted;
• Applicant to submit a copy of importing country’s PPE medical Coveralls Standards Certificate obtained or a copy of BIS Certificate obtained if the importing country does not insist on a standards certificate;
• Applicant to submit Chartered Engineering Certificate certifying that the fabrics used in PPE medical Coveralls were manufactured in India;
• A copy of IEC to be submitted;
• Only one application per IEC to be submitted;
• A copy of Purchase Order / Invoice to be submitted;
• All the documents to be submitted duly attested during the online application.

In a step towards ease of GST Compliance, the Government has decided to provide the facility of SMS filing of NIL GSTR-1 from the 1st week of July. Such a facility would substantially benefit for over 12 lakh taxpayers. Now, the taxpayers would be provided with the facility for filing of NIL GSTR-1 through an SMS by following a simple procedure. The status confirmation of the filed return can be tracked on the GST Portal.

The procedure for filing of the NIL GSTR-1 Return would be similar to that of filing NIL GSTR-3B through an SMS.

In view of the impact of COVID-19 pandemic, the CBIC had notified that the where a notice has been issued for rejection of refund claim, and where the time limit for issuance of order falls during the period from the 20 March 2020 to the 29 June 2020, the time limit for issuance of the said order shall be extended to fifteen days after the receipt of reply to the notice from the registered person or the 30 June 2020, whichever is later.

The CBIC has now further extended the time limit for compliance or completion of action, including issuance of refund orders, falling in the period 20 March 2020 to 30 August 2020 upto 31 August 2020.

In line with the objective of ‘Digital India Programme’ and 'Ease of Doing Business', the DGFT has undertaken an initiative to revamp its services delivery mechanisms to promote and facilitate foreign trade. As the first step in this initiative, the new digital platform of DGFT is scheduled to go live on 13 July 2020 through <https://www.dgft.gov.in>

The first phase will be catering to the services relating to the IEC issuance, modification, amendments etc. process along with a Chatbot (a virtual assistant) catering to queries of users. Subsequent to stabilization of the first phase, other online modules relating to Advance Authorisation, EPCG and Exports Obligation Discharge will be rolled out in the next phase. Following are the Key Highlights with regards to the new platform design:

• Access to the services would be through username and password-based system;
• For User ID creation, registered mobile number/email ids of the IEC holders will be mandatorily required. Authentication of the same will be done through OTP / email;
• Digital Signature / Aadhaar based e-sign will be required for applying and modifying IEC or adding or updating the IEC-linked users;
• The user profile has also been designed to be used by the IEC holders to engage with DGFT and its services. Such a platform would enable the user to electronically file their IEC, AA, EPCG, including amendments and redemption, monitoring the status of the application, raising queries, replying to deficiencies, etc;
• The new platform will provide for smooth migration of legacy data of DGFT and its stakeholders. The existing data would be used for online processing of the previous data. The users would also be enabled to monitor the status of their applications and pending obligations. Such features shall significantly benefit the trade community;    
• DGFT RAs have been directed to spread awareness about the new platform among the trade stakeholders.

In October 2019, the Government had notified certain rules to amend the Medical Devices Rules, 2017. The Trade and Industry had raised certain objections and suggestions in respect thereto. Taking into consideration such objections and suggestions, the Department of Health and Family Welfare has issued Notification dated 11 February 2020 to further amend the Rules.

The said Notification has inserted a chapter in relation to Registration of Certain Medical Devices. Following are the key highlights of the said notification:

• Manufacturers of prescribed medical devices (Rule 19A of the said Rules) shall be registered with the Licensing Authority through an identified online portal established by the Central Drugs Standard Control Organisation;
• Registration under the said Rules shall be voluntary for a period of 18 months from the commencement of the registration chapter and thereafter, such registration shall be mandatory;
• The information relating to medical devices shall be uploaded by the manufacturer on the ‘Online System for Medical Devices’ established by the Central Drugs Standard Control Organisation;
• Subsequent to the furnishing of the required information, a registration number will be generated, which shall be mentioned on the label of the medical devices;
• For the purpose of imports of prescribed medical devices, the importer shall upload certain information on the ‘Online System for Medical Devices’ which are as follows:
  • Name of the entity importing the medical device and specification and standards of medical device;
  • Technical details of the medical device;
  • Certificate of compliance with respect to ISO 13485 standard accredited by National Accreditation Board for Certification Bodies or International Accreditation Forum in respect of such medical device;
  • Free sale certificate from country of origin;
  • Undertaking by the importer.
• Subsequent to the furnishing of the required information, a registration number will be generated, which shall be mentioned on the label of the medical devices by the importer;

The said Rules empower the Central Licensing Authority to verify the documents at any point of time and investigate the quality or safety related failure or complaints. The Central Licensing Authority is also empowered to cancel or suspend the registration in respect of certain or medical devices of a registrant in case of failure of compliance, after giving a reasonable opportunity of being heard.

In order to affect the recommendations of 40th GST Council Meeting held on 12 June 2020, the CBIC has issued a series of notifications dated 24 June 2020. Following are the key highlights of the said notifications:

• Provides relief by lowering of interest rate for a prescribed time for tax periods from February 2020 to July 2020;
• Provides one-time amnesty by lowering / waiving of late fees for non-furnishing of Form GSTR-3B from July 2017 to January 2020 and provide relief by conditional waiver of late fee for delay in furnishing returns in Form GSTR-3B for tax periods of February 2020 to July 2020;
• Provides relief by waiver of late fee for delay in furnishing outward statement in Form GSTR-1 for tax periods for months from March 2020 to June 2020 for monthly filers and for quarters from January 2020 to June 2020 for quarterly filers;
• Extends due date for furnishing FORM GSTR-3B for supply made in the month of August 2020 for taxpayers with annual turnover up to Rs. 5 crore;
• Notifies Seventh Amendment (2020) to CGST Rules, 2017;

In line with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 introduced by the Government on 31 March 2020, the CBDT has issued Notification dated 24 June 2020 to provide further relief to taxpayers by extending the time limit. Following are the highlights of the said Notification:

The CBDT further extends the due date for completion of Transfer Pricing assessment falling due this year to 30 January 2021 as the time-barring date to complete assessments due this year has already been extended till 31 March 2021.

In line with the Faceless, Contactless, Paperless Customs, the CBIC has decided to replace the traditional requirement of taking bulky printouts from the Service Centre or maintenance of voluminous physical dockets in the Custom Houses with issuance of digital copies of Shipping Bills. This would save time and cost of compliance for the trade, thereby enhancing the ease of doing business, while providing enhanced security features for verification of authenticity and validity of the electronic document.

Accordingly, the CBIC, vide Circular No. 30/2020 - Customs dated 22 June 2020, has directed that with effect from 22 June 2020 only the digital copy of the Shipping Bill bearing the Final LEO would be electronically transmitted to the exporter. Following ae the key highlights of systems of electronic communication of the secure electronic communication of the Final LEO copy of the Shipping Bill and the Gatepass copy of Shipping Bill:

LEO Copy of Shipping Bill

• Directorate General of Systems has enabled a functionality of communicating by email, the PDF version of the Final LEO copy of the Shipping Bill to the Customs Broker and exporter, if registered;
• This electronic Final LEO copy can serve multiple purposes such as being shared with DGFT, Banks etc.;
• The PDF version will bear a digitally signed and encrypted QR code which can be scanned to verify the authenticity of the document using Mobile App ICETRAK. The QR code is tamper proof, which is digitally signed by CBIC to ensure the authenticity. Key details like SB No., SB Date, FOB value, Package Details are available in the secured QR Code;
• A version number would also be embedded in the QR code which can be used to ascertain whether the document is indeed the latest version (in case of cancellation of LEO etc.). The same would be verifiable at ICEGATE Enquiry;
• LEO message would also be sent to custodians who are integrated with ICEGATE. The SB LEO message will not be received electronically by those custodians who are NOT connected via MFTP.

e-Gatepass Copy of Shipping Bill

• As the Shipping Bill copies are being extensively used in physical form despite the electronic information existing in the Customs Automated System and Board having made printing and use of Transference copies of Shipping Bill optional, the Directorate General of Systems would henceforth communicate through email, the eGatepass PDF copy of the Shipping Bill to the Customs Broker and the Exporter, if registered;
• The electronic document will provide key summary details like Container / Packages related to logistics movement and facilitates authentic, easy and quick verification by the Custodian, at the point of Entry / Exit;
• Two types of QR codes would be issued viz. (i) for entire eGatepass document, and (ii) for each container/package covered under the eGatepass;
• In case of packaged and other bulk cargos, the eGatepass copy of the Shipping Bill will be generated during LEO;
• In case of containerised cargo, the eGatepass copy of the Shipping Bill will be generated after the receipt of the container stuffing information for the Shipping Bill.

Lastly, the CBIC emphasized the need for uploading of all the supporting documents in e-Sanchit.

Dear Patrons,

In this 6th volume of our Fortnightly Newsletter, we bring you the key developments in the world of direct and indirect tax laws in India, along with incisive analysis from the GLS team. In this volume, we have covered the recent Notifications, Circulars and Judicial Precedents along with its impact in relation to Direct Tax / Transfer Pricing and Indirect Tax. 

We hope that reading of the newsletter would bring an enriching experience to you! Your valuable feedback is always welcome.

Shree Dipesh Anilkumar Naik [Advance Ruling/SGST&CGST/2018/AR/49 dated 19 May 2020]

The Applicant had proposed to sell a plot of vacant land owned by him. As per the Plan Passing Authority, the Applicant was required to develop the primary amenities like Sewerage and drainage line, Water line, Electricity line, Land levelling for road, Telephone line, development of landscaped gardens, drainage system, water harvesting system, demarcation of individual plots, construction of overhead tanks, other infrastructure works. Further common amenities like garden, community hall, etc. are also offered in some schemes. Sale of such sites is done to end customers who may construct houses/villas in the plots. etc. In other words, the Applicant were to sell the individual plots to different buyers without any construction of houses on the same but by providing the primary amenities, mandatorily required for the approved Plan Passing Authority.

In view of the above facts, the Applicant sought a ruling from the Gujarat AAR to ascertain whether GST would be applicable on sale of plot of land for which, primary amenities were to be provided. 

The Gujarat AAR observed that the plotted development scheme involves a the plotted development is a scheme which involves forming land into layout after obtaining necessary plan approval from the Development Authority, get all other permission required to take up, commence and complete what would be the layout, comprised of individual sites.

It was further observed that sellers charge the rates on super built-up basis and not the actual measure of the plot. The super built-up area includes the area used for common amenities. AAR finds that the seller collects the charges towards the land as well as for the common amenities. Such amenities are considered as intrinsic part of the sale value of the plot. 

Accordingly, placing reliance on the judgment of the SC in the case of Narne Constructions Private Limited vs. Union of India [2013 (29) S.T.R. 3 (S.C.)], the AAR observed that such sale indicates that sale of developed plot is not equivalent to sale of land but is a different transaction. Sale of such plotted development tantamount to rendering of service.

In view of the above observations, the Gujarat AAR finally ruled that that the activity of the sale of developed plots would be covered under the clause ‘construction of a complex intended for sale to a buyer’ as per clause 5(b) of the Schedule-II of the CGST Act, 2017 and would be classifiable as provision of service. Thus, it was held that the said activity is covered under ‘construction services’ and GST is payable on the sale of developed plots in terms of CGST Act / Rules and relevant Notification issued time to time.