Alerts & Updates

ELP GST Update

Tax | Jul 21, 2018


Circular 21/2018-Customs dated July 18, 2018

CBIC has set up ‘Help Desks’ for a period of 2 weeks till 1st August 2018 for expeditious resolution of IGST refund claims. Help Desks will be located at specified locations as MSME enterprises are unable to approach Customs port of exports due to factors like distance, lack of information/knowledge, etc. Officers deputed at Help Desks would use data provided by the Directorate of Systems regarding status of pending IGST refund claim and guide exporters to resolve the errors and provide required documents / details, which will then be forwarded by the Help Desk to the Customs nodal officers for processing of refund.

Circular 22/2018-Customs dated July 18, 2018

CBIC extends the time limit for rectification of shipping bills having incorrect GSTIN up to 30th June 2018. The said error has resulted into mismatch between Shipping Bills and GST returns, leading to non-processing of IGST refund claims. The Circular states that the exporters are advised to henceforth ensure due diligence and discipline to avoid such mismatch errors as such extensions are not likely to be considered in future.

Advance Authority Ruling

IL & FS Education and Technology Service Ltd [2018-TIOL-90-AAR-GST]

Taxability – Authority for Advance Rulings, Odisha

The key facts of the case are that the Applicant was awarded a tender to implement Information and Communication Technology (‘ICT’) project in the government and government aided higher secondary schools. The said tender was for supply, installation, maintenance and commissioning of projections system, interactive white board, computers hardware & software, site preparation, and provision of computer training services for 5 years on the BOOT model basis. The contract was entered by the Applicant with Odisha Knowledge Corporation Limited (OKCL) who was mandated to implement the ICT project by the Odisha Madhyamik Shiksha Mission, Government of Odisha.

The Applicant filed advance ruling on the question of whether the services provided by it are exempt under entry No.72 of Notification No.12/2017 – Central Tax dated 28.06.2017, which relates to Heading 9992 and covers “services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration.”

Vide the ruling, the AAR has held that as Applicant has entered into a contract with OKCL which is a body corporate, and the payment responsibility is vested with OKCL, the same is to be considered as recipient of service. Therefore, even though funding for the service is done by the State Government and Central Government, Applicant’s service cannot be considered as exempt under above notification. Also, the supply undertaken by the Applicant which includes both supply of goods and services are not naturally bundled and are distinctly identifiable both in terms of quantity and value. Thus, the said service cannot be considered exclusively in the nature of training programme.

Judicial Update

Shinrai Automobiles Pvt Ltd [2018-TIOL-66-HC-KERALA-GST]

While deciding a Writ Petition filed by a petitioner to contend that he was unable to upload GST TRAN-1 within the stipulated time frame on account of a system error and therefore unable to avail input tax credit, the High Court has issued directions to the petitioner to approach the Nodal officer concerned as per Circular No.39/13/2018-GST to seek redressal and if on inquiry it is found that the petitioner was unable to upload GST TRAN – 1 for reasons not attributable to him, then the petitioner will be enabled to avail input tax credit.

Indus Towers Ltd [2018-TIOL-67-HC-KERALA-GST]

The petitioner is engaged in the establishment of infrastructure for cellular telephone companies and had imported batteries for the purposes of installation. The vehicle in which the goods were being transported was detained on finding that the declaration as required under Rule 138, was not seen uploaded or the print out not accompanied with the goods. The question under consideration was that whether in case of transport, wherein no tax liability on the goods is involved, detention and seizure of goods be attracted. The Kerala High Court has held the transaction would not fall within the scope of taxable supply under the statute, cannot be sustained for reason of there being no declaration made under Rule 138. The resultant finding that mere infraction of the procedural rules cannot result in detention of goods though they may result in imposition of penalty cannot also be sustained. If the conditions under the Act and Rules are not complied with, definitely Section 129 operate and confiscation would be attracted. The respondents are entitled to an adjudication, but they would have to prove that in fact there was a declaration made under Rule 138 before the transport commenced. If they do prove that aspect, they would be absolved of the liability; otherwise, they would definitely be required to satisfy the tax and penalty as available under Section 129 of the CGST Act, 2017.

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