The Himachal Pradesh GST Appellate Authority has set aside a penalty imposed by the revenue department merely because of a typographical error in the E-way bill
The Petitioner Godrej Consumer Products is engaged in the manufacture and sale of various personal care and home insecticide products. They had placed a purchase order for one of the raw materials called Joss powder and the supplier had issued an invoice accordingly. The supplier also generated an E-way bill from the online portal and provided the same to suppliers for the transportation of goods. Enroute, the consignment was intercepted by the inspection team and detained the vehicle by alleging that it was accompanied by an expired e-way bill which was in contravention of rule 138 of the CGST and HPGST Rules 2017. Subsequently, penal actions were attracted and the goods along with the vehicle were seized.
The appellant explained that the consignment was accompanied with proper invoices along with an e-way bill however due to typographical error while generating the E-way bill had mentioned approx.. distance as 20 KMs instead of 2000 KMs. The Assistant Commissioner did not appreciate the facts and circumstantial evidence produced and initiated proceedings towards proposing the demand along with the penalty.
Additional Commissioner of State Taxes and Excise -cum- Appellate Authority of GST (appeals) while allowing the appeal held that,”. . . as per the decision of the Hon’ble Kerala High Court, y appears that the mistake in entering distance in the E-way bill is a typographic error and may be treated as a minor one. Therefore the appeal is accepted and the order of the Assistant Commissioner State Taxes is set aside.. . . .”
Subscribe Taxscan Premium to view the JudgmentThe Sales Tax Tribunal at Mumbai held that the turnover of charter hire in respect of the Rig Greadrill Chetna be calculated @ 4%.
The appellants applied for and obtained registration under the provisions of the Maharashtra Value Added Tax (MVAT)Act, 2002 with effect from 9/6/2008. This registration was stated to be obtained on account of sales of machinery parts effected by the appellant.
The appellants provide range of specialized services starting from exploration and production activities, which includes carrying of men and material between offshore rigs and installation and the share using their own Platform Supply Vessels (PSV) to wing and Anchor Handling Services using their own Anchor Handling Tug Supply Vessels Services (AHTSV) and mining services using its Rigs etc.
These vessels and Rig are provided on a time charter basis to the customers. The Assistant Commissioner of Sales Tax (D-104), URD Assessment and Follow Up Cell, issued a notice under the provisions of Section 23(5) of the MVAT Act 2002.
The Notice was issued for the period 9/6/2008 to 31/3/2009. By the aforesaid notice, the appellant was asked to show cause as to why his turnover of sales in respect of providing vessels on charter hire basis should not be taxed under the Maharashtra Value Added Tax Act-2002 (MVAT Act).
By virtue of the provision contained under section 2 (24) (b) (iv) of the MVAT Act, which reads as, ‘the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration’.
After hearing the Appellant/ Assessee, the Assistant Commissioner of Sales Tax D-104 passed the assessment order on 29/6/2013. The assessment order resulted in a demand for Rs.83,51,75,349/- including tax, interest, and penalty.
The appellant aggrieved by the order passed by the assessing authority the appellant filed an appeal before the Deputy Commissioner of Sales Tax (The First Appellate Authority).
The First Appellate Authority said that deemed sales of transfer of right to use goods within the State of Maharashtra as the agreements have been signed-in the State of Maharashtra and they are not sales in the course of import under the CST Act-1956 as they are back to back two separate transactions ( of import and local sale) and inextricable link among foreign exporters, the appellant, and its customer is absent.
The First Appellate Authority decided the appeal vide order in which the certain reliefs were granted to the appellant penalty was reduced to Rs.7,78,57,128/- as against Rs.83, 51,75,349/- raised by the Assessing Authority. Not satisfied with the order passed by the First Appellate Authority the appellant filed appeal.
The Authority comprising of President, P. H. Mali and Member, V. U. Borse pronounced the order based on an appeal filed by Greatship (India) Limited.
While allowing the appeal the Tribunal said that the levy of tax on the turnover of sales in respect of the charter hire of Vessels is confirmed and be calculated @ 4% and be subjected to tax accordingly.
Subscribe Taxscan Premium to view the JudgmentThe Ministry of Corporate Affairs (MCA) has issued a circular containing clarifications on the procedures to be followed by Insolvency Professional while filing forms in the MCA-21 Registry. The Circular was issued after the MCA received many requests from the Insolvency professional regarding the same.
MCA21 is an e-Governance initiative of the Ministry of Company Affairs (MCA), Government of India that enables easy and secure access of the MCA services to the corporate entities, professional and citizens of India. The MCA21 application is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act, 1956, New Companies Act, 2013 and Limited Liability Partnership Act, 2008. This will help the business community to meet their statutory obligations.
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The Himachal Pradesh Appellate Authority of GST observed that the Imposition of Tax/Penalty is harsh and unsustainable on mere procedural lapse under section 129 of the GST Act.
The appellant Bhushan Power & Steel Limited is a registered company having its manufacturing plant. The appellant in pursuance to orders for the purchase received from M/s Engineer-in-Chief, Irrigation & Public Health, Shimla, Himachal Pradesh.
While supplying steel tubes Galvanized pipe (Round) to the aforesaid purchaser, generated the Invoice and accordingly consigned the goods to Irrigation & Public Health, delivery at Anni, Himachal Pradesh through vehicle no. of M/s Zinka Logistics Solutions Pvt. Ltd.
The appellant accordingly generated E-way bills with validity up to 20-11-2018. The goods in question started its movement from Thelkoloi, Odisha The goods reached at Chandigarh on 20-11-2018 and transhipment took place at Chandigarh and new vehicles were arranged by the branch of the appellant for further movement of goods from Chandigarh to Anni. Himachal Pradesh as the driver of original vehicles was not in a position to drive the vehicle in hilly terrain.
The branch of the appellant arranged the local vehicle from Chandigarh itself and accordingly an entry to the said effect was 6.
The Assistant Commissioner of State Taxes & Excise, checked the stationery vehicle loaded with steel tubes Galvanized pipe (Round) at Khalini and telephonically required the driver of the vehicle to reach a spot where the truck was parked. The officer examined the documents and found the E-way Bill with expired validity.
The Assistant Commissioner of State Taxes and Excise, Shimla, after taking the contact details from the driver of the vehicle informed the present appellant about the expiry of the E-way Bill. The appellant enquired from the driver about a delay in the movement of goods as there was enough time to reach the destination from 1st November to 20th November 2018.
The driver in-turn informed the appellant that the journey couldn’t be resumed earlier on account of occupancy in festive time. He further informed that he was under the impression to cross the state barrier before the expiry of E-way-Bill.
The appellant appeared before the respondent authority and explained his bonafide and requested to release the vehicle in accordance with the provisions of the GST Acts. The Respondent, however, rejected the claim and demanded an amount of Rs.3,80.272/- as tax.
The Order was delivered by Rohit Chouhan, Additional Commissioner based on an appeal filed by Bhushan Power & Steel Limited.
Rule 138(10) says that the validity of the e-way bill may be extended within 8 hours from the time of its expiry but in the instant cases the vehicle was practically apprehended in almost 08 to 09 hours of the expiry of the e-way bill.
The Additional Commissioner observed that the appellant has been not given a reasonable opportunity to update the Part-A of the e-way bill. It was noted that Part-B of the e-way bill was duly filled which puts to rest on any doubts about the intention of the appellant to evade tax.
Section 68 of the CGST/HPGST Act read with rule 138-A of the Central Goods and Services Tax (CGST)Rules, 2017 required that the person in charge of a conveyance carrying any consignment of goods of value exceeding Rs. 50,000 should carry a copy of documents viz, invoice/ bill of supply/ delivery challan/ bill of entry and a valid e-way bill in physical or electronic form for verification.
Further, noted that the non-furnishing of information in Part-B of FORM GST EWB-01 amounts to the e-way bill becoming not a valid documents for the movements of goods by road as per explanation (2) to rule 138 (3) of CGST/HPGST Rules, except in the case where the goods are transported for a distance of up to 50 kilometers within the state or Union territory to or from the place of business of the transporter to the place of business of the consigner or the consignee and becoming not a valid document.
While the imposition of penalty of Rs one thousand, Asst. Commissioner State Taxes & Excise-cum-Proper Officer also said that in case a “consignment of goods is accompanied with an invoice or any other specified document and also an e way bill, proceedings u/s 129 of the GST Act may not be initiated. Therefore, in my opinion, the imposition of tax/ penalty by the respondent is harsh and unsustainable”.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that genuine omissions must be excluded from the levy of penalty under section 271 (1)(a) of the Income Tax Act, 1961.
During the relevant assessment year, the assessee debited a sum of Rs.3,57,541/- towards loss on the sale of the motor car in its profit and loss account but omitted to disallow the same while computing the total income from a business.
The Assessing Officer(AO) discovered the same during the course of assessment proceedings. This, being a genuine mistake, the assessee immediately agreed for disallowance of the same in the assessment. However, the penalty was imposed on the assessee in respect of disallowance made towards loss of sale of motor car amounting to Rs.3,57,541/-.
On appeal, the assessee contended that it was a genuine omissions on the part of the assessee and the entire details for making the addition/disallowance was very much available in the return of income filed by the assessee together with the audited statement of accounts wherein this sum of Rs.3,57,541/- was clearly and separately mentioned in the P & L Account as loss on sale of fixed assets.
Allowing the contentions of the assessee, the Tribunal observed that the Apex Court judgment in the case of Price Waterhouse Coopers (P) Ltd is applicable to the case wherein the Supreme Court held that “There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee have little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income.”
Subscribe Taxscan Premium to view the JudgmentThe Pune bench of the Income Tax Appellate Tribunal (ITAT), has recently held that the license fees received for the use of the Industrial Parks should be assessed as business income. While dismissing a departmental appeal, the Tribunal held that such income should not be treated as the income from house property according to the judicial pronouncements and the CBDT Circular.
In the instant case, the assessee, a company which had undertaken development of the integrated township, had claimed the license fees received from the persons for the use of the IT Parks provided along with various infrastructural and other facilities and services under the head “Income from business”.
The Assessing Officer(AO) rejected the return and assessed the income under the head “Income from house property”.
The Tribunal further relied on its decision in assessee’s own case for the assessment year 2010-11 wherein it was held that the income generated by letting out of the premises in cybercity was liable to be assessed only under the head “Income from business”.
Further relying on a decision of the Bombay High Court, the Tribunal held that “the Hon’ble High Court further held that the question was not pressed by the Revenue in view of the CBDT Circular No. 16 of 2017 dated 25th April 2017 wherein it has been clarified that income arising from the letting out of the premises in an Industrial Park/SEZ, are to be charged under the head “Profits and gains of business” and not under the head “Income from house property”. Thus, being so, respectfully following the decision of Co-ordinate Bench of this Tribunal in assessee’s own case referred supra has also considered the facts that the Revenue has withdrawn its appeal before the Hon‟ble Jurisdictional High Court of Bombay on the question of law raised, we find no error in the order of CIT(A).”
Subscribe Taxscan Premium to view the JudgmentThe applicable tax regime for investment funds and its administrators is amended with the issue of General Rule No. 02-2020.
The provisions under the rule are as follows:
The Income Tax Appellate Tribunal (ITAT), Bangalore held that belated paid service tax collected to Government exchequer can be allowed on actual payment in the assessment year in which it was actually paid.
The assessee is a resident company registered under the Companies Act, 1956, following the mercantile method of accounting, carrying on the business of IT-enabled services. The assessee has filed its return of income for the assessment year 2014-2015, declaring Income at Rs. Nil.
After setting off brought forward losses of Rs.9,34,983 and paid applicable taxes of Rs.61,116 u/s 115JB of the I.T.Act. The assessee’s case was taken up for scrutiny u/s 143 and notice was issued u/s 143(2) by the assessee by the A.O.
The assessee filed the details as called for by the A.O. in response to notice u/s 143(2). Thereafter, the A.O. concluded the assessment by determining the total income at Rs.58,17,228 by disallowing service tax collected by the assessee at Rs.48,82,245 u/s 43B of the Act.
Aggrieved by the orders of the Income Tax Authorities, the assessee is in appeal before the Tribunal.
The Order was delivered by Accountant Member, Chandra Poojari on an appeal filed by M/s. Wyzmindz Solutions Private Limited.
Section 43B(a) is elaborates as under :
43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of—
(a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or
Rule 4 of the CENVAT Credit Rules, 2004 reads as under :
Rule 4. Conditions for allowing CENVAT credit.
(1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service.
The Authority observed that during the impugned year, the assessee has a credit balance of service tax payable as on 31.03.2013 of Rs.1,16,09,924/- which was to be paid up to 31.03.2013 by the assessee, but he did not pay.
The Income Tax Appellate Tribunal (ITAT) also observed that the assessee had paid a sum of Rs.30,83,457/- before the filing of IT return. As per section 43B(a), the above outstanding payment was to be paid up to the date of filing of return of income. Moreover, the assessee has filed the service tax returns belated, i.e., for April to June on 16.04.2015, from July to September and half-yearly from October to March 2013 on 08.07.2015.
While allowing the bench also said that, the service tax collected by the assessee and not paid to the Government exchequer before the due date of filing of return, is to be disallowed, though it was not charged to the profit and loss account and it attracts the provisions of section 43B of the Act and it should be allowed on actual payment in the assessment year in which it was actually paid.
Subscribe Taxscan Premium to view the JudgmentIn the case of the Commissioner of Central Excise And Service Tax vs. M/s Pipavav Shipyard Limited, the High Court of Gujarat held that the HR Plates, MS Flats, MS Coils, Wire Ropes, Rails, Welding Electrode which was used in the fabrication of cranes which are used for the purpose of manufacturing or building ships, these goods are those goods which are used in relation to the manufacturing of final products whether directly or indirectly. Such goods are called ‘input’ and thus the Cenvat Credits can be claimed.
The respondent is 100% Export Oriented Unit (EOU), which is engaged in the business of manufacturing of ships, providing ship repair, management and maintenance services. In order to facilitate the activities of manufacturing the respondent is required to construct the cranes and dry docks. Further the respondent purchased various items such as steel items, cement, etc. All these items purchased by the respondent are liable for excise duty and service tax. While filing the monthly returns the respondent filed its monthly returns and claimed Cenvat Credits.
The question raised in this case was whether the respondent can claim the Cenvat Credit or not?
The Division Bench of the High Court of Gujarat comprising of Hon’ble Mr. Justice J.B. Pardiwala and Hon’ble Mr. Justice A.C. Rao in the light of the Cenvat Credits Rules, 2004 held that the HR Plates, MS Flats, MS Coils, Wire Ropes, Rails, Welding Electrode which was used in the fabrication of cranes which are used for the purpose of manufacturing or building ships, these goods are those goods which are used in relation to the manufacturing of final products whether directly or indirectly. Such goods are called ‘input’ and thus the Cenvat Credits can be claimed.
Subscribe Taxscan Premium to view the JudgmentIn the case of M/s Indo Rubber and Plastic Works vs. Commissioner of Custom, the Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the expenditure incurred on the activities of advertisement and sale promotion will not be bare by the importer especially when there is no contract.
The appellant is a proprietary concern who is engaged in the manufacturing of sports goods under its own name ‘Vicky’. Further, the appellant is also engaged in importing and distributing sports products of the ‘Li Ning’ brand which is situated in Singapore. The appellant entered into the agreement with the Sunlight Sports for the purpose of importing the sports product of ‘Li Ning’ brand. The show-cause notice was sent to the applicant and was asked to bare the expenditure incurred on the advertisements and sale promotions of the product.
Therefore the issue raised in this case was whether the appellant was liable to pay the expenditure which was incurred for the purpose of advertisement and promotion of the sports product or not?
The Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) bench comprising of Anil Choudhary, a Judicial Member, and C.J. Mathew, a Technical Member in the light of the facts held that in this case the condition to bare the expenses was totally absent and so the appellant is not at all obliged to incur any particular amount or percentage of invoice value for the purpose of sale promotion or any kind of advertisement. The rationale given by the tribunal was that the activity of advertisement and sales promotion is a post-import activity incurred by the applicant discharge on its own account and not for the discharge for any obligation of the seller under the terms of the sale.
Subscribe Taxscan Premium to view the JudgmentThe Supreme Court held that the SMSes for the purpose of the Har Seat Hot Seat (HSHS) contest in Kaun Banega Crorepati (KBC) being a value-added service, is not an adopts any unfair method or unfair or deceptive practice or unfair trade practice
The Appellant (Star India (P) Ltd) used to broadcast the program ‘Kaun Banega Crorepati’ (“KBC”) between 22.1.2007 and 19.4.2007. The program was sponsored by Bharti Airtel Limited, the Appellant amongst others.
During the telecast of this program, a contest called ‘Har Seat Hot Seat’ (“HSHS contest”) was conducted, in which the viewers of Kaun Banega Crorepati(KBC) were invited to participate. An objective¬type question with four possible answers was displayed on the screen during each episode, and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by Airtel, MTNL and BSNL, to a specified number.
The winner for each episode was randomly selected out of the persons who had sent in the correct answers, and awarded prize money of Rs. 2 lakhs. There was no entry fee for the HSHS contest.
However, it is not disputed that participants in the HSHS contest were required to pay Rs. 2.40 per SMS message to Airtel, which was higher than the normal rate for SMSes.
Hence, Respondent No. 1, which is a consumer society, filed a complaint before the National Commission against Star India and Airtel (but not against BSNL and MTNL), contending that they were committing an ‘unfair trade practice’ within the meaning of Section 2(1)(r)(3)(a) of the Consumer Protection Act, 1986.
It was alleged that the Appellants had created a false impression in viewers’ minds that participation in the HSHS contest was free of cost, whereas the cost of organizing the contest as well the prize money was being reimbursed from the increased rate of SMS charges, and the profits from these charges were being shared by Airtel with Star India.
Further, it was alleged that an unfair trade practice had also been committed inasmuch as the contest was essentially a lottery as the questions were simple, and the winners were finally picked by random selection.
The purpose of this contest was to promote the business interests of the Appellants by increasing the viewership and Television Rating Points (TRP’s) of the Kaun Banega Crorepati(KBC) program, and thus to command higher advertising charges, and also by increasing the revenue earned from SMS messages.
Hence the Appellants were culpable for conducting a lotterylike contest to promote their business interests under Section 2(1)(r)(3)(b) of the 1986 Act.
The two benches constituting of Justices, Mohan M Shantanagoudar and R Subash Reddy pronounced the judgment based on an appeal filed by Star India (P) Ltd.
Section 2(1) (r)(3)(b) in the Consumer Protection Act, 1986 elaborates as
(1) In this Act, unless the context otherwise requires,—
(r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely
(3) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods.
The bench observed that the transmission of SMSes for the purpose of the HSHS contest being a value-added service, the Appellants had also taken care to comply with the TRAI direction which mandated the communication/advertisement of any increase in the cost of cellular services on account of the rendering of such a valueadded service.
The bench said that even if the SMS charge is taken as the ‘cost’ of participating in the contest, it cannot be said that the Appellants had wrongfully advertised the charges for the same.
While allowing the appeal the court further said that there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue.
The bench added that the National Commission did not have jurisdiction over the complaint and it should have been referred to the TDSAT hence the question of law, as regards the maintainability of complaints filed by consumer organizations against telecom service providers before consumers foram may be kept open.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Taxes and Customs (CBIC) has notified that the customs duty exemption against Scrips issued under Regional Authority under the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) Scheme.
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 the Central Government, had satisfied that it is necessary to do for the public interest, to exempts goods, when imported into India against a duty credit scrip issued by the Regional Authority under the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL).
The scrip, against which goods, when imported into India, are exempted from duties mentioned in clauses (a) and (b) below, may include duty credit provided under the Additional Ad Hoc Incentive.
(a) The whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and
(b) The whole of additional duty leviable thereon under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act.
The exemption shall be subject to the following conditions, namely:
The duty credit in the said scrip is issued against exports of garments and made-ups and their respective rates and cap as listed in Schedules 1, 2, 3 and 4 to the notification of Government of India, Ministry of Textiles notified vide notification for the RoSCTL scheme and made in terms of the Foreign Trade Policy
And also permitting clearance and loading of goods for exportation against the export of garments and made-ups under the RoSCTL scheme has been made on or after the 7th March 2019 and till 31st March 2020.
The imports and exports are undertaken through the seaports, airports or through the inland container depots or through the land customs stations as mentioned in the notification of the Government of India, Ministry of Finance, Department of Revenue as amended.
Provided that the Principal Commissioner of Customs or the Commissioner of Customs may within his jurisdiction, by special order, or by a Public Notice, and subject to such conditions as may be specified by him, permit import and export through any other seaport, airport, inland container depot or through any land customs station within his jurisdiction.
The CBIC said that the exports of said goods transacted through e-commerce platform subject to the items listed in Appendix 3C of Appendices and Aayat Niryat Forms of the Foreign Trade Policy are undertaken either through international courier terminals or through such foreign post offices, as notified by the Foreign Trade Policy.
The scrip is produced before the proper officer of customs at the time of clearance for debit of the duties leviable on the goods and the proper officer of customs after taking into account the debits already made under this exemption and debits made under the notification of Government of India, dated on 14th February 2020 shall ensure the debit of the duties leviable on the goods, but for this exemption and the said scrip and goods imported against it shall be freely transferable.
If the importer does not claim exemption from the additional duty of customs leviable under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act, he shall be deemed not to have availed the exemption from the said duty for the purpose of calculation of the said additional duty of customs.
The importer shall be entitled to avail of the drawback of the duty of customs leviable under the First Schedule to the said Customs Tariff Act against the amount debited in the said scrip and also the importer shall be entitled to avail drawback or CENVAT credit of additional duty leviable under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act against the amount debited in the said scrip.
Subscribe Taxscan Premium to view the JudgmentThe Cochin bench of the Income Tax Appellate Tribunal (ITAT) has held that the reasons such as financial crisis and labour unrest are enough grounds for condoning the delay in filing an appeal under the provisions of the Income Tax Act, 1961.
There was a delay of 329 days in filing an appeal by the assessee. Petitions for condonation of delay were filed by the ex-Directors along with affidavits of the ex-Managing Directors stating therein that the quantum assessments and penalty orders were passed subsequent to their retirement and was not aware of the assessments and penalty proceedings till the ex-Directors received the recovery notices for penalty imposition u/s 271(1)(c) of the Income Tax Act. The new management filed the appeal after a delay of 329 days.
After hearing the rival contentions from both the sides on the delayed condonation petition, the Tribunal observed that “the delay in filing these appeals are on account of difficulties faced by the assessee-company such as financial crises, labour unrest, etc. These facts are borne out from the material placed on record. Therefore, no latches can be attributed to the assessee-company for the belated filing of these appeals. Hence, the delay in filing these appeals is condoned and we proceed to dispose of the same on merits.”
Subscribe Taxscan Premium to view the JudgmentThe Gujarat High Court has stayed the recovery of interest on the delayed GST payment from taxpayers who have filed their returns in GSTR-3B Form
TaxScan had reported earlier about the CBIC issuing a notice after doubts were raised by field formations, whether the interest has to be paid on gross tax liability or on the net cash liability,delayed GST payment . The Board had then requested all Principal Chief Commissioners and Chief Commissioners of Central Tax to look into the issue personally and to urge the field formations under their jurisdiction for making recovery of applicable interest from the identified taxpayers and to furnish a weekly report of GSTIN wise recovery of interest made in this regard. The estimated amount of recovery from such a process is said to be around Rs 46,000 crore.
A division bench consisting of Justice J B Pardiwala and Justice Bhargav D Karia said while hearing a petition filed by Amar Cars Private Limited, “We direct the respondents not to take any coercive steps for the purpose of recovery of the interest,” The court has also issued a notice to Centre, Gujarat Government, and the GST Council. Respondents including Central and State Government and three others have to reply to notice by March 11.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Taxes and Customs (CBIC) in a circular clarified that it is mandatory for registered taxpayers to declare GSTIN on EXIM declarations in a bid to strengthen all-round coverage of GST supplies.
Certain cases have been reported where the importer or exporter did not declare their GSTIN in the Bill of Entry /Shipping Bill despite being registered with GSTIN. With the effect from 15.02.2020, the declaration of GSTIN shall also be mandatory in Import/Export documents for the importers and exporters registered as GST taxpayers.
Data analytics by the revenue authorities have detected tax evasion through the black market and under-valuing of imports. It has come in to notice that although importers are paying Goods and Services Tax(GST), they are supplying the goods without a bill. They are typically paying integrated goods and services tax (IGST) on goods they bring into the country. This tax is supposed to be set-off against the actual Goods and Services Tax(GST) paid by the final consumer or claimed as a refund.
GSTIN is a 15-digit PAN-based unique identification number allotted to every registered person under Goods and Services Tax(GST). While importers have to fill the Bill of Entry with Customs department while importing goods, exporters have to file Shipping Bill.
The CBIC said certain cases have come to light where the importer or exporter has not declared their GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN.
It was further noticed that the supply of imported goods to domestic channels is done without a bill. Importers typically pay integrated goods and services tax (IGST) on goods they bring into the country. The tax paid is to be set-off against the actual GST paid by the final consumer or claimed as a refund.
Importers are paying Integrated Goods and Services Tax(IGST) on imports but not claiming credit for the same which means the supply of imported goods to domestic channels is done without a bill.
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In the case of Commissioner of Central Excise, Pune vs. M/s Cadbury India Ltd., the Custom, Excise & Service Tax Appellate Tribunal (CESTAT) held that milk crumb is marketable and hence Cadbury is liable to pay excise duty.
The case was that the respondent namely M/s Cadbury India Ltd. engaged in the manufacturing of cocoa preparations, sugar confectionery, etc. These are those goods which are covered under the ambit of excisable goods under the Central Excise Tariff Act(CETA), 1985. During the visit by the Anti Evasion Staff of Pune-I Commissionerate, it was noticed that the respondent company is manufacturing excisable goods such as Milk Crumb and is chargeable @16% of the Central Excisable Duty. Further, the Milk Crumb which has been produced since 2006 without even paying the excise duty which is the contravention of the rules elaborated in the Central Excise Rules, 2002. Moreover, pertaining to this matter 2 show-cause notices were issued.
The issue raised in this case was whether the milk crumb is an excisable good or not and is the Cadbury liable to pay excise duty or not?
The Custom, Excise & Service Tax Appellate Tribunal (CESTAT) bench comprising of Judicial Member Dr. D.M. Mishra and Technical Member Sanjiv Srivastav held that if in case the issue would have been revenue-neutral, the respondent could have paid the duty and grabbed the credit if it was admissible in the eye of law. Further, the revenue neutrality can never be the ground for not demanding the duty on all those goods which are covered under the ambit of excisable goods in any form or in any manner cleared by an assessee. Thus in the light of this reasoning Custom, Excise & Service Tax Appellate Tribunal (CESTAT) held that milk crumb is marketable and hence Cadbury is liable to pay excise duty as it is covered under the excisable goods.
Subscribe Taxscan Premium to view the JudgmentThe Madras High Court took into account the difficulties faced by taxpayers due to inconsistent performance of the GST portal and allowed delayed upload of the Tran-1 declaration.
The court shared this view while addressing a writ petition filed by M/s. Samrajyaa and Company, praying for quashing of an order passed by the Income Tax Grievances Redressal Committee(ITGRC). The order denied permission to the petitioner to file Tran-1 because of the failure to produce evidence of technical/system error. The counsel for the petitioner alleged that there were glitches in the GSTN portal and the petitioner was thus unable to file/upload GST Tran-1 but the petitioner had not taken screenshots of the alleged glitches as evidence of the same.
Justice Dr. Anita Sumanth while allowing the petition held, “In my view, the request of the petitioner before the authorities coupled with the averments in the affidavit to the effect that it faced technical glitches are itself sufficient to establish this position. One cannot lose sight of the difficulties faced by assessees in transitioning into the new medium/procedure set out under the GST regime as this is common and public knowledge. . . . . the era of GST portal taxpayers is in a nascent stage and both the Department as well as assessees are still learning the ropes. . . . a rigid view should thus not be taken in matters involving procedural requirements such as availing of credit;”
Subscribe Taxscan Premium to view the JudgmentIn the case of M/s Nola Ram Dulichand Dal Mills & Anr. vs. Union of India, the Supreme Court of India held that 100% Export Oriented Unit (EOU) and Special Economic Zones (SEZs) are not covered under the ambit of ‘Vishesh Krishi Upaj Yojna’.
The case pertains to the scheme namely Vishesh Krishi Upaj Yojna is implemented by the government for the purpose of providing incentives to promote the export of agricultural products such as vegetables, fruits, minor forest produce, flower, poultry, dairy, and other value-added products. However, there were two kinds of exports that were excluded from the export made through transhipment and deemed export.
The appellant, in this case, claimed that he is engaged in the manufacturing and trading and selling of Guar Gum, Gaur Chri, and Korma refined splits and guar gum powder which are exported as well as sold domestically. Now, the appellant claims that the M/s Neelkanth which is a 100% Export Oriented Unit (EOU) purchased the goods from the appellant. The petitioner was issued a notice by the government and it was challenged by the petitioner that the circular was against the Vishesh Krishi Upaj Yojna and so the appellant has the right to claim incentives.
The Division Bench of the High Court comprising of Justice Deepak Gupta and Justice Hemant Gupta held that the appellant is 100% Export Oriented Unit (EOU) and such kind of Export Oriented Unit (EOU) stands out from the ambit of the government scheme. Furthermore, the Supreme Court upheld the findings of the High Court regarding the fact that the benefit under Vishesh Krishi Upaj Yojna can not be availed by the Special Economic Zones (SEZs) and Export Oriented Unit (EOU).
Subscribe Taxscan Premium to view the JudgmentThe Ecuador tax reform 2020 eliminates tax exemption on dividend, amends Value-Added Tax (VAT) and limits the application of thin-capitalization rules to cross-border and intercompany loans.
Tax exemptions for dividends distributed by Ecuadorian entities are revoked and withholding tax will be levied on dividends distributed to non-residents. The applicable tax rate would be 40% of the distributed dividend and withholding tax to be imposed at 10%.
Income from agricultural activities will be subject to income tax at a rate of 0% to 2%.
Thin-capitalization
Thin-capitalization threshold for cross-border, intercompany loans has been affirmed at 20% of the income, before profit sharing, interests, depreciation, and amortization. The threshold for banks and insurance companies will be 300% of the entity’s equity.
Additions have been made to the list of goods subjects to 0% Value-Added Tax (VAT).
12% Digital Service Tax (DST) will be applicable for digital services provided to Ecuadorian residents.
Outflow Tax Amendments
The tax reform eliminates the 360-day requirement for the loans made by international financial institutions or non-specialized financial institutions for it to be exempt from outflow tax principal and interest. The 360-day requirement has also been revoked for the publicly traded debt in the Ecuadorian stock market.
Rules on outflow dividend tax exemption for principal and interest on loans for the purpose of housing has been simplified. Outflow tax exemption on the payments made to related parties has also been nullified.
Special Contribution Tax
Companies having a taxable income of US$1 million and above will have to pay a special contribution tax from 0.10% to 0.20%. The tax will be levied based on the taxable income computed in the year 2018.
