Newsletter

CBIC issued FAQs Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on 09 August 2019.

Highlights:

• If any audit, enquiry or investigation has been started against a person for which the duty amount has not been quantified on or before 30 June 2019, such person shall not be eligible for the scheme;
• In case of multiple issues in a Show Cause Notice (‘SCN’), aggrieved person shall not be allowed to file an application only against a few issues;
• In case where Appeals have been finally heard on or before 30 June 2019, this scheme shall not be available;
• Where a person has been convicted of any offence under the indirect tax enactments, this scheme shall not be available;
• Persons dealing with goods presently under the fourth schedule of the Central Excise Act, 1944, shall not be eligible for this scheme;
• Applicants under this scheme shall be informed electronically about the final decision taken by the designated committee within 60 days of filing a declaration;
• Tax dues in such scheme shall be the amount under dispute in the order or SCN against which application has been filed. Such tax dues exclude the amount of interest / penalty;
• In case of single SCN issued to multiple persons, the amount of tax due shall be the amount indicated in the SCN as jointly and severally payable;
• Any amount paid as ‘pre-deposit’ shall be deducted while computing the tax dues;
• Appeals filed before an Appellate Forums other than the High Court or the Supreme Court, shall be deemed to be withdrawn when a declaration is filed under this scheme. In case of Writ Petitions before the High Court or the Supreme Court, the applicant shall file an application for withdrawal of such writ petition;
• A discharge certificate (proof of discharge of case) issued by the designated committee shall be conclusive and accordingly, the applicant shall not be subject to any further duty / interest or penalty payable with respect to the matter and time period covered under the declaration;
• ITC shall not be available for the tax paid under this scheme.

Patna HC holds that order passed by the Revenue u/s. 73 of the CGST Act is per se illegal and an abuse of statutory jurisdiction. Further holds that even a wrongly reflected transitional credit in the ledger is not sufficient to draw penal proceedings until the same or any portion thereof, is put to use so as to become recoverable

CBIC, on the recommendations of the 36th GST Council Meeting held on 27 July 2019, notified the amended rates of GST on various products vide the following notifications to be effective from 01 August 2019:

• Notification No. 12/2019 - C.T. (Rate) dated 31 July 2019:
  • Reduces GST Rate to 5% on Electronic Vehicles and its chargers.
• Notification No. 13/2019 - C.T. (Rate) dated 31 July 2019:
  • Exempts GST on hiring of electric vehicles, meant to carry twelve persons or more by local authorities.

Press Release dated 27 July 2019

• The 36th Council Meeting held on 27 July 2019 has approved the following recommendations which shall be effective from 01 August 2019:
  • Reduction of GST Rate on all Electric vehicles from 12% to 5%;
  • Reduction of GST Rate on Electric vehicles' chargers and its charging stations from 18% to 5%;
  • GST Exemption on hiring of electric buses (of carrying capacity of more than 12 passengers).
• The Council Meeting has further approved the following changes in GST Law:
  • Due date for filing of intimation in Form GST CMP-02, by exclusive supplier of services to be extended from 31 July 2019 to 30 September 2019;
  • Due date for furnishing statement containing the details of the self-assessed tax in Form GST CMP-08 for the quarter April, 2019 to June, 2019, by composition dealers to be extended from 31 July 2019 to 31 August 2019.

Gujarat HC holds that the assessee is entitled to interest on delayed refund of IGST in terms of Section 56 of the CGST Act, 2017 read with the relevant notifications; Rejects Revenue’s plea that in the absence of a specific provision providing for the entitlement of interest on refund, no interest would be available in terms of the applicable laws; Further states that any statute in taxation matter should also meet with the test of constitutional provision

After careful consideration, CBDT extends the due date of filing of returns for certain category of assessees (normally not covered under tax audit) from 31 July 2019 to 31 August 2019. Earlier, the due dates of filing the TDS return for quarter ended 31 Mar 19 and due date of issuance of TDS certificates in Form 16 were also extended by the government

Maharashtra AAR has held that the refund of ITC under inverted duty structure is allowed only with respect to inputs and not input services in terms of Section 54(3) of the Act read with the relevant notifications; Further held that questions relating to formulas prescribed in the Principal Act and interpretation of law is beyond the scope of the Authority

Gujarat HC allows refund of IGST on export of zero rate supplies even when higher rate drawback is claimed by the Assessee. Further rules that circular cannot override the provisions of law. Further rejects Revenue’s claim that no option was available in the system to consider the claim, also finds that Revenue fairly conceded that the case of the assessee does not fall within sub-clauses (a) and (b) of Rule 96(4) of CGST Rules, 2017 which deals with circumstances where refund claim can be withheld

It is a common business practice to send / take out of India goods for exhibition or on consignment basis for export promotion. Such goods sent / taken out of India crystallise into exports, wholly or partly, only after a gap of certain period from the date they were physically sent / taken out of India. Since there is no consideration for such goods at the time of their physical movement out of India, they do not constitute supply as the said activity does not fall within the scope of section 7 of the CGST Act, 2017. It is further clarified that since such activity is not a supply, the same cannot be considered as Zero rated supply as per the provisions contained in section 16 of the IGST Act, 2017.  

In this regard, CBIC has provided clarification with respect to procedure, maintenance of records and documentation to be followed

In the recent ruling in the case of VservGlobal Pvt. Ltd., Maharashtra AAR had held that back office services provided to customers which are in nature of facilitating / arranging supply of goods or services between its client and their customers would fall under intermediary services. Since India is a hub of export of IT / ITeS export services, the judgment is likely to have adverse effect on such export of such ITeS services and accordingly CBIC has provided clarification with respect to different scenarios as to when such services could be treated as export of services or not