REGULATORY UPDATES
GUIDELINES CIRCULAR 1552, DATED 02-11-2021
CBIC issued guidelines for disallowing debit of electronic credit ledger
Editorial Note: The Rule 86A empowers the Commissioner or its authorized officers to disallow debit of electronic credit ledger in certain circumstances and block the credit. Now, CBIC has issued detailed guidelines for the officers to exercise the powers of Rule 86A.
NOTIFICATION NO. 90/2021 – CUSTOMS (N.T), DATED 03-11-2021
CBIC notified exchange rates effective from November 4th, 2021
Editorial Note: The Central Board of Indirect Taxes and Customs has notified the rate of exchange of conversion of the foreign currencies into Indian currency or vice versa, with effect from 4th November 2021, for import and export of goods.
NOTIFICATION NO. 9/2021-CENTRAL EXCISE, DATED 03-11-2021
Govt. reduces excise duty on petrol and diesel
Editorial Note: The Government has reduced the rate of excise duty on petrol and diesel by Rs. 5 and Rs. 10 respectively with effect from November 4th, 2021.
CIRCULAR NO. 1079/3/2021, DATED 11-11-2021
CBIC issues clarification on Pre-Show Cause Notice Consultation in Excise & Service Tax
Editorial Note: The CBIC has received request for clarification from DGGI to clarify whether DGGI formations would fall under exception for pre-show cause notice consultation. It is clarified that the exception is case specific and not formation specific.
PUBLIC NOTICE 35/2015-2020, DATED 11-11-2021
Two new agencies notified for issuing Certificate of Origin (Non-preferential)
Editorial Note: The DGFT has issued public notice to notify two new agencies for issuing Certificate of Origin (Non-preferential) in state of Rajasthan and Tamilnadu.
TRADE NOTICE NO. 24/2021-22, DATED 15-11-2021
Mandatory electronic filing of Non-Preferential Certificate of Origin (CoO) extended till January 31st, 2022
Editorial Note: The transition period for mandatory filing of applications for Non-Preferential Certificate of Origin (CoO) through the e-CoO Platform has been extended till 31st January 2022. In the meanwhile, the existing systems for submitting and processing non-preferential CoO applications in manual/paper mode is allowed.
PUBLIC NOTICE NO. 37/2015-2020, DATED 15-11-2021
SOPs issued for random checking of imported consignments of metal scrap: Notice
Editorial Note: The Standard Operating Procedure (SOP) for random checking of imported consignments of metal scrap with respect to radioactive contamination is notified. The Director General of Foreign Trade has issued public notice in this regard.
PUBLIC NOTICE NO 1/2021, DATED 15-11-2021
Procedure for Physical Hearing of Appeals by CESTAT notified
Editorial Note: The Honorable President of CESTAT has issued procedure for physical hearing of appeals which will be effective from November 29th, 2021 and in this regard public notice has been issued.
CIRCULAR NO. 166/22/2021-GST, DATED 17-11-2021
Clarification issued on certain issues related to refund under GST
Editorial Note: The CBIC has issued clarification with respect to several issued related to refund of excess balance in cash ledger such as time limit for filing application, refund of TDS/TCS balance in cash ledger, requirement of certificate etc.
CIRCULAR NO. 165/21/2021-GST, DATED 17-11-2021
CBIC issued clarification in respect of applicability of Dynamic Quick Response (QR) Code
Editorial Note: CBIC has issued clarification to provide that wherever 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 wherever permitted by the RBI, such invoice may be issued without having a Dynamic QR Code.
CBIC NOTIFIES RATE CHANGES FOR APPAREL, FOOTWEAR AND TEXTILES FROM JAN 1, 2022(Notification No. 14/2021- Central Tax (Rate) to Notification No. 17/2021- Central Tax (Rate) Dated November 18th, 2021)
CBIC has notified an increase in GST rate of various kinds of textiles, apparel and footwear to 12% from 5% earlier, which will be effective from January 1, 2022. However, GST rates for certain synthetic fibres and yarn have been lowered from 18% to 12%, according to the notification, bringing in uniformity of rates for the entire textiles sector as well as removing distortions due to the inverted duty structure. The GST Council in its meeting in September had decided to correct inverted duty structure on footwear and textiles, which it said will come into effect from January 1, 2022. CBIC has also notified the inclusion of restaurant services under scope of supply made through E-commerce Operators vide these Notifications.
CBIC NOTIFIED EXCHANGE RATES EFFECTIVE FROM NOVEMBER 19TH, 2021 (Notification No.92 / 2021- Customs (N.T.) Dated November 18th, 2021)
Central Board of Indirect Taxes and Customs has notified the rate of exchange of conversion of the foreign currencies into Indian currency or vice versa, with effect from 19th November 2021, for import and export of goods. This notification
has been issued in supersession of the Notification No. 90/2021- Customs (N.T.), dated November 3rd, 2021.
NOTIFICATION NO. 43/2015-2020, DATED 22-11-2021
Registration with Gems & Jewellery EPC mandatory for Import & Export of Rough Diamonds
Editorial Note: The DGFT has issued notification to provide that the import and export of Rough Diamonds shall not be permitted unless the concerned exporter or importer is registered with Gems & Jewellery EPC.
ELECTRONIC COMMERCE OPERATORS (ECO) LIABLE TO PAY GST ONADDITIONAL SERVICES
The Notification no. 17/2021-Central Tax (Rate) dated 18th November 2021 issued by Central Board of Indirect Taxes and Customs (CBIC) takes effect from 1st January 2022 and amends the notification no. 17/2017– Central Tax (Rate) dated 28 June 2017 categorizing services on which GST is to be paid by ECO.
Earlier, ECO where liable to pay GST on following services
Transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle
Providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes
House-keeping, such as plumbing, carpentering etc.
In addition to the above services, ECO would now be liable to pay GST on the following services:
Transportation of passengers by a motorcycle, omni bus or any other motor vehicle
Supply of restaurant service other than the services supplied by restaurant, eating joints etc. located atspecified premises (meaning of ‘specified premises given below).
Further, it has also amended the explanation provided in the earlier notification as below:
Motorcycle, motor vehicle and omni bus shall have the same meanings as assigned to them under the Motor Vehicle Act, 1988 (59 of 1988)
‘Specified premises’ means premises providing hotel accommodation service having declared tariff of any unit of accommodation above Rs.7500 per unit per day or equivalent.
RECENT JUDICIAL RULINGS ON GST CLASSIFICATION OF GOODS
Aluminium Composite Panel/Sheet (ACP Sheet) : Product ‘Aluminium Composite Panel/Sheet (ACP Sheet)’ is covered under HSN Code 7606 and rate of tax on impugned product is 18 per cent – Aludecor Lamination (P.) Ltd., In re – [2021] 132 taxmann.com 179 (AAR – MAHARASHTRA)
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – SUPPLY – SCOPE OF
Where applicant, Liaison-Office in India of an organization based in Switzerland was acting as a communication channel between HO and parties in India, as per RBI approval, and not undertaking any ‘business’ as defined under section 2(17), activities/services received by applicant from its HO cannot be said to be in course or furtherance of its business and hence cannot be considered as a supply under section 7 and applicant will not beliable to pay GST on such transaction – World Economic Forum, India Liaison Office, In re – [2021] 132 taxmann.com 192 (AAR – MAHARASHTRA)
SECTION 24 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – REGISTRATION – COMPULSORY, REGISTRATION IN CERTAIN CASES
Where applicant, Liaison-Office in India of an organization based in Switzerland was acting as a communicationchannelbetweenHO and parties in India and not undertaking any business and import of service not being considered as a supply liable to GST, applicant would not be required to obtain registration in India under section 24 with respect to activities carried out by applicant’s HO located outside India and rendered to applicant – World Economic Forum, India Liaison Office, In re – [2021] 132 taxmann.com 192 (AAR – MAHARASHTRA)
SECTION 35FF OF CENTRAL EXCISE ACT, 1944 – INTEREST ON DELAYED REFUND OF AMOUNT DEPOSITED UNDER SECTION 35F
Amount deposited during investigation and/or pending litigation is ipso facto pre-deposit on which interest is payable @ 12% pa – Principal Commissioner of Central Goods and Service Tax v. Emmar MGF Construction (P.) Ltd. – [2021] 132 taxmann.com 290 (New Delhi – CESTAT)
SECTION 73 OF FINANCE ACT, 1994 – RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED
Unless there is suppression of facts, extended period of limitation could not be invoked – SOTC Travels Services (P.) Ltd. v. Principal Commissioner of Central Excise, Delhi-I – [2021] 132 taxmann.com 291 (New Delhi – CESTAT)
CLASSIFICATION OF GOODS
Fly ash bricks : Fly ash bricks with ash content of 60% are liable to GST of 18%, however, GST rate of 5% for such goods is applicable only if ash content is 90% or more – Dipakkumar Ramjibhai Patel, In re – [2021] 132 taxmann.com 180 (AAAR-GUJARAT)
CLASSIFICATION OF SERVICES
Works contract services involving laying of electric power lines : Where applicant, a Government Entity, supplied works contract services involving laying of electric power lines to Greater Hyderabad Municipal Corporation (GHMC) and it engaged a private contractor on back to back arrangement for executing works for GHMC, supply of service by applicant to GHMC is covered by Service Code 9954 23 and is taxable at rate of 18 per cent – Transmission Corporation of Telangana Ltd., In re – [2021] 132 taxmann.com 191 (AAR- TELANGANA)
Construction of electricity transmission infrastructure to pumping stations : Where applicant, a Government Entity, made construction of electricity transmission infrastructure to pumping stations under various lift irrigation schemes and State Government sanctions grants to applicant for this purpose and applicant engaged a private turnkey contractor on back to back arrangement for purpose of executing contracts to I & CAD department, applicant is eligible for exemption from tax vide Entry 9(c) of Notification No. 31/2017 – Central Tax (Rate), dated 13-10-2017 – Transmission Corporation of Telangana Ltd., In re – [2021] 132 taxmann.com 191 (AAR- TELANGANA)
Works contract services to South Central Railways : Where applicant, a Government Entity, is supplying works contract services to South Central Railways under General Construction service for long-distance underground / overland / submarine pipe lines, communication and electric power lines (cables) and it engaged a private turnkey contractor on a back to back arrangement to execute contract for South Central Railways, supply of services by applicant to South Central Railways is taxable at rate of 18 per cent as per Entry at Sl. No. 3(xii) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 – Transmission
Corporation of Telangana Ltd., In re – [2021] 132 taxmann.com 191 (AAR- TELANGANA)
SECTION 65(25) OF THE FINANCE ACT, 1994 – CLEARING AND FORWARDING AGENT
Sub-contractors are liable to discharge Service Tax irrespective of main contractor having discharged Service tax liability on amount received from clients – Vinoth Shipping Services v. Commissioner of Central Excise & Service Tax – [2021] 132 taxmann.com 275 (Chennai – CESTAT)
SECTION 65(101) OF THE FINANCE ACT, 1994 – STOCK-BROKER
NSE/BSE transaction charges and SEBI turnover fees paid by stock brokers and subsequently recovered from their clients, not liable to Service Tax – Monarch Research & Brokerage (P.) Ltd. v. Commissioner of Service Tax & Service Tax, Ahmedabad – [2021] 132 taxmann.com 274 (Ahmedabad – CESTAT)
SECTION 73 OF THE FINANCE ACT, 1994 – RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT-LEVIED OR SHORT-PAID OR ERRONEOUSLY REFUNDED
No allegation of wilful suppression of facts being made, extended period of limitation for claiming demand cannot be invoked – Vinoth Shipping
Services v. Commissioner of Central Excise & Service Tax – [2021] 132 taxmann.com 275 (Chennai – CESTAT)
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