ELP GST Update

Notification No. 15E/2018 – State Tax dated June 29, 2018

Maharashtra government amends the e-way bill rules with effect from 1 July 2018, as follows:

• Intra-State movement of goods for value up to INR 100000 would be exempted from requirement of generating of e-way bill. Present limit of INR 50,000/- has been enhanced to INR 1,00,000/-
• No e-way bill requirement for Intra-State movement of Hank, Yarn, Fabric and Garments.

Notification No. 12/2018 – Central Tax (Rate) and 13/2018 – Integrated Tax (Rate) dated June 29, 2018   

CBIC Issues Central Tax and Integrated Tax Notifications extending the exemption on payment of tax on reverse charge basis u/s 9(4) of CGST Act, 2017 and 5(4) of IGST Act, 2017 up to September 30, 2018. Accordingly, reverse charge payments on procurements from unregistered persons would not be applicable till September 30, 2018.

M/s BASF India Limited [TS-275-AAR-2018-NT]

ITC Reversal – Applicant is engaged in supply of products on ‘High Sea sale’ basis. The Applicant, in the given case, would purchase various products from overseas supplier and sell it to the domestic customer before the said goods cross Indian Custom Frontiers. The Question under consideration was whether the said ‘high sea’ sale would be subject to tax. If No, whether the same would qualify as ‘Exempt Supply’ under GST and subject to input tax credit reversal.

In the above Ruling, it was held by Maharashtra Authority for Advance Ruling that as per Section 7(2) of IGST Act, 2017 read with Section 5(1) of IGST Act, 2017 the said supply would qualify as ‘Inter State supply’ however, the IGST would be levied only at the time of customs clearance of the said goods into India in terms of Section 12 of Customs Act, 1962. Since, in the given case, the goods are sold on high sea basis, there would be no levy of IGST on the same.

The Ruling further held that, since no tax is payable on the said ‘High Sea sale’ it would be considered as ‘non-taxable’ supply and would qualify as ‘Exempt Supply’. Accordingly, the Applicant would be required to be reverse Input Tax Credit to the extent of common inputs and input services in terms of the Section 17 of the CGST Act.

Zaver Shankarlal Bhanushali  [TS-276-AAR-2018-NT]

 Taxability – The question under consideration was whether, under a redevelopment arrangement, GST is applicable on amount received by the tenant as compensation for alternate accommodation and towards damages for delayed handover of new premises.

The Maharashtra Authority for Advance Ruling held that activity of vacating of premises and allowing the developer to construct the new building would qualify as a ‘Supply’ as per Section 7 of CGST Act read with entry 5(e) of Schedule II of the Act i.e. agreeing to the obligation to refrain from an act, or to tolerate an act or situation, or to do an act”. Accordingly, the said compensation (including damages for delayed handover of possession) received from the Developer would be liable to tax.