VOL 1 | ISSUE 2 1 Welcome to the second edition of the E-Bulletin (Volume II) brought to you by the Indirect Tax practice group of Khaitan & Co (KCO). This E-Bulletin covers regulatory developments, case law and news updates that would impact businesses from a sector agnostic standpoint. CASE LAW UPDATES Goods and Services Tax (GST) Levy of IGST on the freight component included in the value of imports made on CIF basis unconstitutional: Gujarat High Court Wrongful unilateral act resulting in payment of damages is not a “supply” under the GST law: Bombay High Court GST payable on the entire mobilisation advance remaining unadjusted on 1 July 2017: Appellate Authority for Advance Ruling Sale of gift vouchers / gift card taxable as ‘supply of goods’: Authority for Advance Ruling Corporate Debtor under IBC shall be allowed to file returns and discharge GST from the date of initiation of insolvency proceedings without insisting on past unpaid dues: National Company Law Tribunal.
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Welcome to the second edition of the E-Bulletin (Volume II) brought to you by the Indirect Tax practice group of Khaitan & Co (KCO). This E-Bulletin covers regulatory developments, case law and news updates that would impact businesses from a sector agnostic standpoint.
CASE LAW UPDATES
Goods and Services Tax (GST)
Levy of IGST on the freight component included in the value of imports made on CIF basis unconstitutional: Gujarat High Court
Wrongful unilateral act resulting in payment of damages is not a “supply” under the GST law: Bombay High Court
GST payable on the entire mobilisation advance remaining unadjusted on 1 July 2017: Appellate Authority for Advance Ruling
Sale of gift vouchers / gift card taxable as ‘supply of goods’: Authority for Advance Ruling
Corporate Debtor under IBC shall be allowed to file returns and discharge GST from the date of initiation of insolvency proceedings without insisting on past unpaid dues: National Company Law Tribunal.
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Sales Tax / Service Tax
Notification granting rebate cannot be rescinded with retrospective effect unless the dominant purpose of introducing the said notification ceased to exist; Doctrine of promissory estoppel applies: Supreme Court
Service tax not applicable on composite contracts involving construction services along with transfer of undivided share in land: Telangana High Court
Incidence of service tax can be contractually shifted by the parties: Customs, Excise and Service Tax Appellate Tribunal.
Excise / Customs
Exemption granted to one kind of duty cannot be extended to cover other duties despite such other duties being linked to the exempted duty: Supreme Court
Expenses made towards marketing efforts should not be included in assessable value if such expenditure is not a condition of sale: Customs, Excise and Service Tax Appellate Tribunal.
Regulatory Updates
Mandatory collection of Social Welfare Surcharge by payment of cash on imports cleared using duty credit scrips
Clarification regarding customs exemption on goods below the value of Rupees Five Thousand
Restriction on availing Input Tax Credit on invoices not uploaded by supplier in Form GSTR-1
Issue of E-invoices and inclusion of Quick Response (QR) code mandatory
Effective date for operation of provisions of the Finance (No.2) Act, 2019
Reverse charge liability notified for renting of motor vehicle services when received from unregistered service providers
Electronic Refund claim process under GST.
News Updates
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GOODS AND SERVICES TAX
Levy of IGST on the freight component included in the value of imports made on CIF basis unconstitutional: Gujarat High Court
In Mohit Minerals Private Limited v. Union of India and Another1, the Gujarat High Court struck down Notification No. 8/2017 – Integrated Tax dated 28 June 2017 and Notification No. 10/2017-Integrated Tax dated 28 June 2017 (Notifications) to the extent they levied Integrated Tax (IGST) on services supplied by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India and mandated the Indian importer to discharge IGST on reverse charge basis on the such services.
The High Court, while observing that the Indian importer was not the “recipient” of the aforesaid services, in terms of Section 2(93) of the Central Goods and Services Tax Act, 2017 (CGST Act) held that the Notifications insofar as they obligated the Indian importer to pay tax on the aforesaid services as the “recipient” were ultra vires the parent enactment i.e. the Integrated Goods and Services Tax Act, 2017 (IGST Act). The High Court further held that Section 7(5)(c) of the IGST Act, which provides that a supply in the taxable territory not being an intra-state supply and not covered elsewhere shall be treated as an inter-state supply, could not be so broadly construed as to bring under its ambit a supply, only a minuscule part of which (such as the destination of goods, in the aforesaid case) had taken place within India. Based on the above and various other reasons, the High Court observed that the levy of tax sought to be brought about by the Notifications was in excess of the powers conferred by the parent enactment upon the delegated legislation, and finally held the Notifications to be unconstitutional on account of absence of statutory sanction.
KCO Comments:
The aforesaid decision is significant, since the High Court has held the Notifications to be not merely ultra vires the provisions of the IGST Act, but also the Constitution of India. Applying the ratio of the decision of the Supreme Court in the case of Kusum Ingots & Alloys Limited2, a law declared by the High Court to be unconstitutional has effect throughout the territory of India and not just within the jurisdiction of the particular High Court. Considering that writ petitions challenging the validity of the Notifications are also pending before other High Courts in the country, it will be interesting to see how they are dealt with by the respective courts.
It is pertinent to note that the Gujarat High Court, in Messrs Sal Steel Limited & Another3 and other connected petitions, has also struck down the relevant rules and notifications which sought to levy service tax on the aforesaid services (in the pre-GST regime), for being ultra vires the provisions of the Finance Act, 1994.
1 Special Civil Application No 726 of 2018 2 (2004) 6 SCC 254 3 Special Civil Application No 20785 of 2018
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Wrongful unilateral act resulting in payment of damages is not a “supply” under GST law: Bombay High Court
In Bai Mamubai Trust & Others v. Suchitra w d/o. Sadhu Koraga Shetty4, the Bombay High Court, while answering certain issues raised by the Court Receiver with respect to the applicability of GST on royalty ordered to be paid by the Defendant as compensation/damages for prima facie unauthorised occupation of the Suit Premises, held that such payment of royalty lacked the necessary quality of reciprocity for it to constitute a “supply” under GST law. The High Court further held that in a case where no reciprocal relationship exists, and a person alleges violation of a legal right and seeks damages or compensation, it cannot be said that a “supply” has taken place.
The High Court, while observing that the term “supply” under GST law necessitated existence of consideration, held that such royalty did not acquire the character of consideration since it was compensatory in nature. The High Court finally held that GST was not applicable on the amount of royalty paid by the Defendant, owing to absence of reciprocal enforceable obligations in the transaction.
KCO Comments:
The Bombay High Court has laid down the test of reciprocity to determine the existence of “supply” under GST. Importantly, the ratio of the aforesaid decision may be safely extended to cover liquidated damages, which are also compensatory in nature. Such damages protect the contracting parties from contingencies and are not intended to be a consideration for any identifiable service provided by the recipient party. The category of “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” is often used by the revenue authorities as a tool to justify taxability of compensation or liquidated damages arising out of a contract. This decision of the Bombay High Court brings out the true character of damages and would be useful in dealing with cases where the revenue authorities have sought to levy service tax / GST on liquidated damages.
Reference may also be had to the decision of the Madras High Court in the case of GE T & D India Limited5 as also the decisions of the CESTAT in the case of M/s K. N. Food Industries Private Limited6 and M/s Amit Metaliks Limited7 delivered recently on the scope of the entry “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”, under the service tax regime.
GST payable on the entire mobilisation advance remaining unadjusted on 1 July 2017: Appellate Authority for Advance Ruling
The Appellate Authority for Advance Ruling (AAAR), West Bengal, in the case of M/s Siemens Ltd.8, while upholding the ruling of the Authority for Advance Ruling (AAR), held that the applicant shall be deemed to have provided works contract services on 1 July 2017 to the extent of the mobilisation advance lying unutilised in its books of account as of 30 June 2017. Observing that the Applicant did not have the liberty to utilise the said advance
4 Court Receiver’s Report No. 213 if 2017 in Commercial Suit (L) No. 236 Of 2017 5 2020-VIL-39-MAD-ST 6 2019-VIL-731-CESTAT-ALH-ST 7 2019-VIL-679-CESTAT-KOL-ST 8 2019-VIL-84-AAAR
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for any other purpose and that no interest was payable thereon, the AAAR held that the said advance did not constitute a ‘deposit’ so as to make it taxable as and when it is appropriated against a supply. The AAAR concluded by holding that the provisions governing ‘time of supply’ under GST shall become applicable to the said advance on 1 July 2017 despite the fact that the said advance was received way back in the year 2011 and consequently, the entire unadjusted amount shall be liable to GST on 1 July 2017.
KCO Comments:
The AAAR has, by refusing to treat the mobilisation advance as a ‘deposit’, has delivered a huge blow to the industry of government contractors who may now be hit with demands compelling them to discharge GST on the entire amount of mobilisation advance outstanding as on 30 June 2017. Although, the industry is not bound by the ruling, this clarifies the revenue’s perspective.
Sale of gift vouchers / gift card taxable as ‘supply of goods’: Authority for Advance Ruling
The AAR, Tamil Nadu, in Kalyan Jewellers India Ltd.9 held that gift vouchers (Pre-Paid Instruments) were “goods” and their sale was liable to GST. The AAR relied upon section 12(4) of the CGST Act for determining the time of supply of such vouchers. While observing that the vouchers were merely accepted as consideration for purchase of goods, the AAR rejected the contention that such vouchers were “actionable claims” under the Transfer of Property Act, 1882. The AAR finally held that sale of vouchers constituted a “supply” under GST and determined the GST rate separately for paper gift vouchers and plastic gift cards.
KCO Comments:
The decision of the AAR has given rise to fresh controversy regarding the taxability of vouchers. By ruling that sale of vouchers was taxable as a “supply of goods”, the AAR has effectively held that the value of the voucher would attract GST twice. This is because GST shall additionally be payable on supply of underlying goods/services against which such voucher/gift card is redeemed. It is pertinent to state that the money received against sale of voucher/gift card is treated as a liability by the issuer and is only recognised as an income when the underlying goods/services are sold by redeeming the voucher. As such therefore, the issuance of a voucher against upfront receipt of money may be termed merely as a transaction in money and its redemption may be taxed by levying GST on supply of the underlying goods/services. However, the decision of the AAR fails to consider the aforesaid argument advanced by the Applicant. It will be interesting to see how this controversy is settled in the future.
Corporate Debtor under IBC shall be allowed to file returns and discharge GST from the date of initiation of insolvency proceedings without insisting on past unpaid dues: National Company Law Tribunal
In T. R. Ravichandran, R. P. (for Kiran Global Chem. Limited) v. Assistant Commissioner (ST) & Others10, the National Company Law Tribunal (NCLT), Chennai bench directed the revenue authorities to permit the Corporate Debtor to file GST returns and discharge GST
from the date of initiation of insolvency proceedings without insisting upon payment of past unpaid dues. The NCLT observed that the Insolvency and Bankruptcy Code, 2016 had an overriding effect on all other laws and would by implication, also override the provisions of GST laws. The NCLT further held that the revenue authorities, being operational creditors, were at liberty to submit their pre-admission claims separately before the Resolution Professional and not insist on payment from the Corporate Debtor.
KCO Comments:
Since returns under GST laws are necessarily required to be filed sequentially, any tax paid is first appropriated to the liabilities reported in past returns. Due to lack of clarity regarding the status of GST compliances post initiation of the insolvency proceedings, the revenue authorities in certain cases had cancelled registrations and blocked access to the GST portal of the companies in default. The aforesaid decision of the NCLT is important since it provides much-needed clarity to companies and Resolution Professionals alike by according separate treatment to pre- and post-admission GST liabilities.
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SALES TAX / SERVICE TAX
Notification granting rebate cannot be rescinded with retrospective effect unless the dominant purpose of introducing the said notification ceased to exist; Doctrine of promissory estoppel applies: Supreme Court
In State of Uttar Pradesh & Anr. v. M/s Birla Corporation Ltd., the Supreme Court11, in the context of a notification issued under the Uttar Pradesh Trade Tax Act, 1948 granting rebate of tax to manufacturers of goods containing fly ash which was rescinded with retrospective effect by another notification, the Supreme Court held that the burden was on the government to show that it had acted in public interest by issuing a notification otherwise that in accordance with its promise and that the said public interest was so overwhelming that it would be inequitable to hold the government bound by its promise. The Supreme Court further held that an enforceable right to rebate had accrued to manufacturing units set up prior to the date of the rescinding notification which could not be truncated unless the dominant purpose for which the original notification was issued had ceased to exist. The Supreme Court, while dismissing the appeal, stated that the rescinding notification would not apply retrospectively.
KCO Comments:
Courts all over the country have delivered favourable judgements by relying strongly on the well-established doctrine of promissory estoppel, whenever a beneficial notification or provision was attempted to be rescinded by the government. Many petitions have been filed in recent times seeking continuation of benefits accrued under various State incentive schemes that have been sought to be rescinded ostensibly due to introduction of the new GST regime of taxation. The Supreme Court in the aforesaid decision reiterated that Courts were bound to insist upon a highly rigorous standard of proof from the State when an argument of supervening public interest is sought to be put forth by it. This decision follows many others delivered lately on the validity of discontinuation of previously promised benefits and is expected to constitute a precedent for many more to come.
Service tax not applicable on composite contracts involving construction services along with transfer of undivided share in land: Telangana High Court
In Vasudha Bomireddy and Another v. Assistant Commissioner of Service Tax, Hyderabad12, the Telangana High Court, while observing that the Central Government had not enacted any rule prescribing the value of service portion in a composite contract involving construction services along with transfer of built-up area and undivided share in land, held that service tax was not applicable on such composite contracts. The High Court rejected the contention that rule 2A of Service Tax (Determination of Value) Rules, 2006, which stated that service tax was leviable on forty percent of the total amount charged for works contracts entered into for execution of original works and seventy percent on other works contracts, was equally applicable to construction services specified under Section 66E(h) of the Finance Act, 1994 (FA).
11 2019-VIL-38-SC 12 Writ Petition No. 5980 of 2017
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The High Court agreed with the views taken by the Delhi High Court in the case of Suresh Kumar Bansal13 that the arrangement between a buyer and a builder was a composite one which involved not only the element of services but also of goods and immovable property, and that there was no machinery provision under the FA for ascertaining the service element involved in such composite contracts. The High Court finally held that rule 2A (supra) applied only to works contracts and not to construction of a complex, building, civil structure, which was a distinct declared service under Section 66E of the FA.
KCO Comments:
The Telangana High Court has followed the decision of the Delhi High Court in the case of Suresh Kumar Bansal (supra) which had held that the levy of service tax itself failed since the enactment did not provide for a mechanism to ascertain the value of the service component which was the subject of the levy. It may be noted that the revenue’s appeal against the said decision of the Delhi High Court is presently pending before the Supreme Court. Considering that the aforesaid decision is expected to follow suit, it would be interesting to see how the Supreme Court disposes of the bunch of petitions given the far-reaching implications of the issue.
Incidence of service tax can be contractually shifted by the parties: Customs, Excise and Service Tax Appellate Tribunal
In M/s Max Life Insurance Company Limited v. Commissioner of Central Excise and Service Tax14, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the assessee, which was an entity liable to pay service tax on reverse charge basis on the services procured from insurance agents, was free to contractually shift the burden of such tax to the insurance agents i.e. the service providers. The CESTAT observed that such tax recovered from the service providers did not attract the provisions of section 73A of the Finance Act, 1994 whereby a person collecting excess tax or an amount representing service tax is required to forthwith pay such amount to the Government. The CESTAT thus held that service tax initially paid by the assessee and later recovered from the service providers was not required to be deposited with the government since the same could not be construed as an amount collected in excess of service tax.
KCO Comments:
The CESTAT has reiterated that there was nothing in law to prevent the parties to a contract from shifting their indirect tax liability or contributing, partially or entirely, to the tax liability arising out of a contract, despite the fact that the liability may by statute, be imposed only upon one party. This decision further emphasises the principle that indirect tax statutes are relevant for determining the rights and liabilities between the government and the assessee and have no relevance in determining the rights and liabilities emerging out of a contract between the assessee and some other person.
Exemption granted to one kind of duty cannot be extended to cover other duties despite such other duties being linked to the exempted duty: Supreme Court
In Unicorn Industries v. Union of India15, a three-judge bench of the Supreme Court, in the context of National Calamity Contingent Duty (NCCD) and the now defunct Education Cess (EC) and Secondary and Higher Education Cess (SHEC), held that a notification exempting Basic Excise Duty (BED) could not automatically be extended to cover the aforesaid duties despite some of them (EC and SHEC) being contingent upon existence of BED. The Supreme Court held that when a particular kind of duty was exempted, other duties imposed by different legislations for different purposes could not be said to have been exempted. The Supreme Court rejected the aforesaid proposition by observing that there was no difficulty in computation of such other duties (presumably on the notional value of the main duty that is exempted).
The Supreme Court finally upheld its previous decisions (three-judge bench) in the case of Modi Rubber Limited16 and Rita Textiles Private Limited17 while holding the two-judge bench decisions in the case of Bajaj Auto Limited18 and SRD Nutrients Private Limited19 as per incuriam.
KCO Comments:
The aforesaid decision assumes significance in view of the controversy surrounding the levy of Social Welfare Surcharge (SWS) in cases where duty credit scrips (such as those issued under the Merchandise Export from India Scheme) are debited pursuant to exemption from payment of Basic Customs Duty (BCD). It is respectfully stated that the aforesaid decision, by including duties which are levied as a percentage of the taxable value (such as NCCD) with duties that are levied as a percentage of the principal duty (such as EC and SHEC) in the same basket, fails to take into cognisance the fundamental difference between the aforesaid two kinds of levy. The former is a standalone levy while the other is necessarily contingent upon levy of BED. Accordingly, exemption to BED should ideally automatically extend to such contingent levies also.
The aforesaid decision gained instant popularity, with the Madras High Court in the case of Gemini Edibles and Fats India Private Limited20, ruling that SWS was payable by the importer in cash in cases where duty credit scrips are debited pursuant to exemption from payment of BCD and the Central Board of Indirect Taxes and Customs (CBIC) issuing a Circular21 mandating the same, following the decision of the Supreme Court. The fate of writ petitions that have been filed before various High Courts challenging the levy of SWS in cases where exemption from payment of BCD is available, now appears to hang in the balance.
Expenses made towards marketing efforts should not be included in assessable value is such expenditure is not a condition to sale: CESTAT
In the case of Indo Rubber v. Commissioner of Customs (ICD-Tughlaqabad)22 the CESTAT determined that the marketing expenses incurred by the Indian distributor in relation to the sporting goods supplied by the foreign manufacturer was to increase its own sales and hence could not be deemed to be incurred ‘as a condition for sale’. The CESTAT further observed that the only reference in the distribution contract between the Indian distributor and the foreign manufacturer was that the former would be required to undertake marketing activities, and there was neither any control exercised on the marketing activities undertaken by the Indian distributor nor were any reimbursements made to it by the foreign manufacturer.
Taking note of these facts, the CESTAT distinguished its own decision in Reebok India Company23 wherein Reebok India was engaged in import and sale of Reebok branded goods from Reebok, England, under a Distribution Agreement (DA). The DA required Reebok India to incur expenditure on advertisement and promotion equal to a fixed percentage of the invoice value and the two parties therein were related to each other. The CESTAT had held that such sale transactions attracted provisions of Rule 10(1)(e) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR) as under the DA, Reebok India was to necessarily spend a fixed percentage of the invoice value on advertisement and promotion and the seller of the goods controlled and supervised every aspect of such promotion.
The CESTAT in the present case determined that, in the absence of any supervision of the marketing efforts undertaken by the Indian importer and owing to the fact that the DA did not mandate undertaking of such promotion in a specified manner, the expenses toward marketing efforts could not be deemed to be a condition of sale under Rule 10(1)(e) of CVR and consequently were not includible in the assessable value of goods imported.
KCO Comments:
This matter was argued by our Indirect Tax team and would be relevant for various Indian importers who may have similar arrangements with their overseas suppliers and who were previously forced to pay additional customs duty on account of the decision of Reebok India Company (supra) despite the marketing expenditure incurred by them not being a condition of sale. By virtue of the decision, each distribution agreement between an Indian importer with its foreign supplier will have to be thoroughly screened for any unintended boilerplate clauses that may be interpreted adversely by the revenue authorities, resulting in additional customs duty liability.
On similar lines, the CESTAT in the case of Giorgio Armani India (P) Ltd.24 had previously held that advertising expenses incurred by an Indian importer based on an agreement with the foreign seller were not includible in the assessable value of goods (in the specific facts of the case). The said decision of the CESTAT has been affirmed by the Supreme Court25.
22 Final Order No. 50240 of 2020 dated 13 February 2020 23 2018 (364) E.L.T. 581 (Tri. - Del.) 24 2018 (362) E.L.T. 333 (Tri. - Del.) 25 2019 (365) E.L.T. A110 (S.C.)
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CIRCULARS / NOTIFICATIONS / ORDERS
Mandatory collection of Social Welfare Surcharge by payment of cash on imports cleared using duty credit scrips
Following the decision of Gemini Edibles (supra), the CBIC has mandated that SWS, that is leviable at the time of import of goods, should be paid in cash and the same cannot be collected by debit of duty credit scrips. As explained in detail previously (refer KCO Comments on Unicorn Industries v. Union of India), this circular may be challenged before the writ courts considering the collection of SWS when the basic levy of BCD is exempt does not have a sound legal basis.
Clarification regarding customs exemption on goods below the value of Rupees Five Thousand
CBIC has clarified that Notification 35/2015-20 dated 12 December 2019 issued by the Directorate General of Foreign Trade shall be interpreted to mean that imports of all goods imported through post/courier which are declared as bona fide gifts having a value of less than Rupees Five thousand shall be prohibited, if the exemption under Notification No. 50/2017-Customs dated 30 June 2017 is claimed. However, if no such exemption is claimed at the time of import and all applicable duties (BCD @35% and IGST @28%) are paid, then the import of such goods shall no longer be prohibited.
KCO Comments:
This move shall impact overseas e-commerce companies which were hitherto clearing consignments by declaring them as gifts to avail the benefit of the exemption under Notification No. 50/2017-Customs dated 30 June 2017.
Restriction on availing Input Tax Credit on invoices not uploaded by supplier in GSTR-1
With effect from 1 January 2020, a registered person who avails credit on the basis of invoices or debit notes, the details of which have not been uploaded by the supplier in the FORM GSTR-1, shall only be entitled to avail input tax credit (ITC) to the extent of ten percent of the ITC the details of which have been uploaded by the supplier. Previously, Notification No. 49/2019-Central Tax dated 9 October 2019 permitted such availment of unreconciled ITC to the extent of twenty percent.
KCO Comments:
This reduction of the amount of unreconciled input tax credit that can be availed by an assessee seems to be a deliberate move to ensure that recipients force the suppliers to comply with the requirements of uploading the Form GSTR-1 accurately. However, it is to be seen if this restriction in itself can be deemed to be valid considering there is no provision under the CGST Act which restricts such availment.
Issue of E-invoices and inclusion of Quick Response (QR) code mandatory
The issue of e-invoices has been made mandatory for persons having a turnover of more than Rupees One Crore with effect from 1 April 2020. Such persons will have to issue e-
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invoices in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal. The access to the Common Goods and Services Tax Electronic Portal has been available with effect from 1 January 2020. Further it is mandated that persons having a turnover in excess of Rupees Five Hundred Crores, shall issue invoices to containing QR code with effect from 1 April 2020 when supplying goods or services to unregistered persons.
KCO Comments:
With the transition to a completely digitised platform imminent, issuance of e-invoices shall help taxpayers achieve harmonisation in documents. Moreover, availability of access to the portal before the cut-off date would help businesses run a test run before the prescribed date.
Effective date for operation of certain provisions of the Finance (No.2) Act, 2019
All provisions regarding GST in the Finance (No.2) Act, 2019 have come into effect from 1 January 2020, except those concerning the constitution of National Appellate Authority for Advance Ruling, applicability of interest on the portion of tax which is paid through cash and the relaxation of provisions pertaining to filing of returns.
KCO Comments:
The much-awaited amendment concerning payment of interest on only such differential portion of tax which has been belatedly paid in cash, still remains to be notified.
Reverse charge liability on renting of motor vehicle services notified
Everybody corporate that receives renting of motor vehicle services where the consideration paid includes charges for fuel, shall be required to pay GST on a reverse charge basis in cases where such services are received from a service provider who does not issue an invoice charging GST at the rate of 12%.
Refund claim process under GST to be completely electronic
The refund claim process under GST has been streamlined with effect from 26 September 2019 to permit complete electronic based submission of claims through Form GST RFD-01A. The comprehensive list of documents that are required to be submitted along with the claim have also been indicated. Upon submission of the complete application an Application Reference Number (ARN) shall be generated. The date on which the ARN is generated shall be deemed to be the date of filing of the refund claim. The detailed process regarding the issue of deficiency memos within 15 days of submissions and the prerequisites of filing returns before filing of refund claims, grant of refund on the basis of provisional input tax credit availed in the absence of a mechanism to file GSTR-2 and GSTR-3, has been specified.
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NEWS UPDATES
CBIC has mandated that all official departmental communication to taxpayers or any third person shall contain a unique Document Identification Number (DIN), failing which the document shall be deemed to be invalid and never having been issued. Only in exceptional circumstances where there is a systemic failure and in case of the authorised officer being away on official duties may the documents be issued without a DIN. Further, the formats for issuance of official communications have been harmonised to ensure uniformity.
The due dates for submitting Forms GST TRAN-1 and GST TRAN-2 in respect of registered persons who could not submit the said form by the original due date on account of technical difficulties on the GSTN common portal and whose cases have been recommended by the GST Council, have been extended to 31 March 2020 and 30 April 2020 respectively.
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