Alerts & Updates

ELP GST Update

Tax | Aug 2, 2018

1.  Notifications

Notification 30/2018 – Central Tax  dated July 30, 2018

The above Notification seeks to extend the due date for furnishing the return by an Input Service Distributer in FORM GSTR-6 under sub-section (4) of section 39 of the CGST Act, 2017 read with rule 65 of the CGST Rules, 2017, for the months of July, 2017 to August, 2018 till September 30, 2018. 

2.  Circulars

Circular No. 50/24/2018-GST dated July 31, 2018

Consequent to the decisions of the 28th GST Council meeting held on July 21, 2018, Finance Ministry vide this Circular withdraws the following:

  • Circular No. 28/02/2018-GST dated January 08, 2018 as amended vide Corrigendum dated January 18, 2018 is withdrawn which was issued to clarify the GST rate applicable on catering services, i.e., supply on food and drink in a mess or canteen of an educational institute. It is relevant to note that the same has been incorporated in Sl. No. 7 (i) of the Notification No.13/2018- Central Tax (Rate) dated July 26, 2018.
  • Order No. 02/2018- Central Tax dated March 31, 2018 is withdrawn which was issued to clarify GST rate on supply of food and/or drinks by the Indian Railways or IRCTC or their licensees, in trains or at platforms (static units). It is relevant to note that the same has been incorporated in Sl. No. 7(ia) of the Notification No.13/2018- Central Tax (Rate) dated July 26, 2018

Circular No. 51/24/2018-GST dated July 31, 2018

Applicability of the clarification contained in the Circular No. 210/2/2018- Service tax dated May 20, 2018 to GST:

  • The said Circular clarified that services provided by Government/State Government and private service providers (PSP) by way of transportation of patients in an ambulance are exempt under Service tax. The same is applicable for the purposes of GST also. Under GST, the said services are specifically exempt under Notification No. 12/2017-Central Tax (Rate) dated June, 26, 2017.
  • The said Circular clarified that services provided by PSPs to the State Governments by way of transportation of patients on behalf of the State Governments against consideration in the form of fee or otherwise charged from the State Government are exempt under Service tax. The same would also be exempt under GST as given in table below:
Sr. No. Notification No. Condition
1. SI. No. 3 of Notification No. 12/2017- Central Tax (Rate) dated June 28, 2017 If it is a pure service and not a composite supply involving supply of any goods
2. SI No. 3A of Notification No. 12/2017-  Central Tax (Rate) dated June 28, 2017 If it is a composite supply of goods and services in which the value of supply of goods constitutes not more than 25 percent of the value of the said composite supply

Trade Circular No. 18T of 2018 dated July 31, 2018

This Trade Circular is issued in respect of the Announcement of Special Campaign for GST Migration Pending cases in the 28th meeting of GST Council.

  • The GST Council in the meeting has approved to open the migration window for taxpayers, who have filed Part A of FORM GST REG-26, but not part of Part B of the said FORM. The eligible taxpayers have to approach their respective jurisdictional Central Tax/State Tax nodal offices with the necessary details.
  • With the view of completing this process swiftly, the Maharashtra State Tax Department shall be conducting a Special Campaign during 6th August 2018 to 10th August 2018 for all pending Migration cases. For the said purpose, Specialized desk (“SD”) has been created in Mumbai & Pune  at offices of the Joint Commissioner of State Tax (Nodal) and Joint Commissioner of State Tax (LTU)
  • The relevant list of eligible taxpayers would be published on the department’s portal and can be accessed at this link https://www.mahagst.gov.in/mr/general-information/57.
Sr. No. Queries Procedure provided in the Trade Circular
1. An eligible taxpayer shall apply to whom for re-opening the Migration Window –  The eligible taxpayers need to submit request letter to the SD created by department for this purpose.

–  Eligible taxpayers should approach SDs mentioned against their GSTIN/PID in the list published on Department’s portal
2. What all information/documents need to be included in the Request Letter –  Mention non-migrated GSTIN/PID, email id and mobile number of Primary Authorized Signatory.

–  Reason for not completing the migration process (for eg. Validation error)

–  Proof of receipt of PID from the Department
3. What is the procedure of Completion of pending Migration –  Submission of Request Letter & Selection of cases

–  Post approval of GSTN eligible taxpayers need to apply for fresh registration
4. Waiver of late fee payable –  Eligible taxpayers have to first file returns with the payment of late fees

–  The waiver will be effected by way of reversal of the amount paid as late fees in the cash ledger under the tax head.

3.  Press Release

 Finance Ministry Press Release dated August 1, 2018.

  • records total gross GST revenue of Rs. 96,483 Cr in the month of July 2018;
  • CGST constitutes Rs. 15,877 Cr, SGST – Rs. 22,293 Cr, while IGST stands at Rs. 49,951 Cr (including Rs. 24,852 Cr on imports) and Cess at Rs. 8,362 Cr (including Rs. 794 Cr on imports);
  • 3899 Cr has been released to States as GST compensation for the months April-May 2018, informs Govt.
  • Registers 66 lakhs GSTR-3B returns for the month (upto July 31) vis-a-vis 64.69 lakh returns last month (upto June 30)

4.  Advance authority ruling

Garuda Power Private Ltd. [TS-342-AAR-2018-NT]

Taxability of supplies to units/ entities in SEZs – Applicant mainly does the trading of diesel engines and its spare parts along with services of diesel engine, either on Annual Maintenance Charges basis or on as and when required basis. In this regard, a ruling was sought asking whether or not the supply of goods and on site services to customers in Special Economic Zone (“SEZ”) area to any SEZ unit or SEZ developer is ‘zero rated’ supply under Section 16 of the IGST Act, 2017. Also, whether GST is chargeable for the supply of goods or services to SEZ unit or SEZ developer.

It is relevant to note that Applicant supplies to units and developers of SEZ. In this respect, the provisions of Section 16 of IGST Act, 2017 will be applicable in this case and the tax liability will be at zero rate under sub section 1(b) of the IGST Act, 2017. The Applicant may supply without paying tax subject to the provisions under Section 16(3)(a), or he may supply on payment of tax and claim refund subsequently under section 16(3) (b) of the IGST Act, 2017.

5.  JUIDICIAL UPDATE

Commissioner of Customs (Import), Mumbai v M/s Dilip Kumar and Company & Ors.  [Civil No]

Interpretation of the Exemption Notifications – the question before the court was, what interpretative rule can be applied while interpreting a tax exemption provision/notification in case of an ambiguity as to whether it is applicable to the entitlement of the assessee or the rate of the tax to be applied?

The present case was brought before a Constitutional Bench for examining the correctness of Judgment rendered in Sun Export Corporation, Bombay v. Collector of Customs, Bombay [(1997) 6 SCC 564] (“Sun Export case”) case rendered by a three-judge bench earlier. In the said judgment, it was ruled that in case of an ambiguity in a tax exemption provision/notification, the said provision/notification must be interpreted so as to favour the assessee claiming the benefit of such exemption.

Ruling given in the case- The Bench in the case held that every taxing statute including the charging, computation and exemption clause in respect of threshold stage must be interpreted strictly. There were following principal findings in the case:

  • If the ambiguity is found with regards to interpretation of charging and computation provisions then the benefit of that ambiguity must be interpreted in the favor of assessee.
  • If the ambiguity is found with regards to interpretation of an exemption provision/notification then the benefit of that ambiguity must be strictly interpreted in favor of the Revenue or State and not in favor of assessee.
  • The exemptions must only be allowed to be availed by such assessees, if their situation is falling within the contours and parameters enumerated in the said exemption provision/notification and that the assessee, claiming exemption under such provision/notification must satisfy all the conditions required for the applicability of the said exemption.

The Bench overruled the ruling given under Sun Export case in 1997 with respect to interpretation of exemption notification.