ELP GST Update

Notification No. 3/2018, F.No. 3(163)/Policy-GST/2018/298-307 dated June 15, 2018

Delhi government amends the e-way bill rules with effect from 16 June 2018, as follows:

• Intra-State movement of goods of any value was exempted from generation of e-way bill. However, such exemption is now available only if consignment value does not exceed INR 1,00,000 and the goods do not pass through any other State.
• Intra-State movement of goods from registered business place of taxable person to an unregistered end customer is exempted from e-way bill requirement, subject to the condition that movement is accompanied by a tax invoice.
  The Government has clarified that above movement of goods, although exempted from e-way bill requirement, should be accompanied by document such as tax invoice, bill of supply, voucher, delivery challan or bill of entry, as the case may be.

Notification No. 38/1/2017-Fin (R&C) (59) dated June 14, 2018

Government of Goa constitutes State Appellate Authority for Advance Ruling under GST to hear appeals against the rulings pronounced by State AAR.

Notification GO(Ms) No. 64 dated June 11, 2018

Government of Tamil Nadu re-constitutes Authority for Advance Ruling under GST.

Circular No. 48/22/2018-GST dated June 14, 2018

CBIC issues the following clarification in respect of GST issues:

• In order to determine the nature of services supplied to SEZ unit or developer, specific provisions of Section 7(5)(b) of the IGST Act (which provides that supplies to SEZ should qualify as inter-State supply), would prevail over generic provisions of Section 12(3)(c) of IGST Act, 2017 (which prescribes place of supply of services in relation to immovable property). Thus, services by way of short term accommodation, conferencing, banqueting etc provided to a SEZ unit or developer, although qualifying as intra-State supplies in terms of Section 12(3)(c) of the IGST Act, would be treated as inter-state supply by virtue of specific provisions of Section 7(5)(b).
• Benefit of ‘zero rated supply’ will be available to all supplies made to SEZ unit or developer or a SEZ unit under bond/ LUT or on payment of IGST, subject to following conditions prescribed in Rule 89(1) of the CGST Rules, 2017:

Such supplies are received by the SEZ unit or developer for authorized operations
An endorsement to this effect has been issued by the specified officer of the SEZ

The above benefit will also be available to services such as event management, hotel accommodation, consumables etc.

• Notification No 5/2017- Central Tax (Rate) dated June 28, 2017 notifies a list of goods on which refund of unutilized input tax credit, resulting on account of inverted duty structure, should not be allowed. This inter alia includes supply of fabric. It is clarified that in respect of independent job worker undertaking fabric processing, the output supply is the supply of job work services and not supply of fabrics. Given this, the restriction provided in Notification No 5/ 2017 should not be applicable to such job worker.

Order No CT/GST-12/2017/51 dated June 12, 2016

Assam government issues guidelines regarding functioning of ‘mobile squads’ with effect from July 1, 2018 for verification of e-way bill accompanying movement of goods. Such mobile squads would also carry out inspection, search and seizure at the place of business of a taxable person and the transporter. Mobile squads shall be placed in and around strategic locations at entry and exit points of the State, major railway stations, airport terminals for vehicle checking on surprise/ random basis.

• CBIC has issued explanatory notes to the scheme of classification of services on June 11, 2018. The same is based on the explanatory notes to the United Nations Central Product Classification.
• Ministry of Consumer Affairs, Foods and Public Distribution extends the deadline for sale of pre-GST packaged goods with stickers of revised MRP upto July 31, 2018.

M/s Parsan Brothers [2018-TIOL-75-AAR-GST]

Taxability – Applicant is a holder of special warehouse license for storage and supply of duty free ship stores, imported without payment of duty, to Indian Naval/ Coast Guard ships and ocean going merchant ships. The issue is with respect to applicability of GST on supply of stores by applicant in customs area as defined in Section 2(11) of the Customs Act, 1962. It was observed that goods are received by applicant within the customs area and supply therefrom should be treated as inter-State supplies in terms of Section 7(2) of the IGST Act, 2017.

In the above ruling, in absence of specific question to that effect, AAR has not delved into determination of whether such supplies qualify as exports.

Bahl Paper Mills [2018-TIOL-54-AAR-GST]

Taxability – The question for consideration is relating to leviability of IGST under the RCM on ocean freight, wherein importer has already discharged IGST on import of goods on CIF value. It was held that in terms of Notification No 8/ 2017 – Integrated Tax (Rate) and Notification No 10/ 2017 – Integrated Tax (Rate), both dated June 28, 2017, importer would be liable to IGST under RCM on ocean freight. AAR remarked that this position is notwithstanding the pendency of writ petition filed before Gujarat High Court on the same issue, since mere filing of application does not render notification ultra vires, unless Hon’ble High Court turns down the same.

ITC Eligibility – Sanitary fittings to buildings would not be eligible for ITC in terms of Section 17(5) of the CGST, since the same forms an integral part of building or civil structure. However, ITC related to furniture & fixture, AC plant would be admissible, provided depreciation is not claimed on the tax component of such capital goods under Income Tax Act, 1961.