GST Daily – Editorial Team
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Today’s newsletter analytically summarizes the top GST stories reported at taxmann.com.
The assessee had challenged the IGST levy on a reverse charge basis on the Ocean Freight in respect of the import of goods under CIF contracts for which it was already paying the IGST at the time of import with the value of imported coal under the Customs laws. The Hon’ble Gujarat High Court held that the IGST levy on ocean freight is ultra-vires the levy provisions of the IGST Act. Against the said order, the Government filed an appeal before the Apex Court.
The Apex Court has observed that the ocean freight from a foreign location to a customs station in India in CIF import contracts has sufficient territorial nexus for levying IGST under reverse charge. On an interpretation of Sections 5(3) and 5(4) of the IGST Act, read with Section 2(93) of the CGST Act, it is clear that the importer can be classified as the ‘recipient’ of the services. In this interpretation, the validity of the notifications levying GST under RCM on ocean freight has to be upheld. ? ? ?
The Apex Court held that there is no legal fiction or power to bifurcate the composite supply into the supply of goods and supply of services and to levy reverse charge GST on the supply of services component under section 5(4) of the IGST Act. Given this, the GST on a reverse charge basis can’t be levied on ocean freight in CIF contracts as it is part of ‘composite supply’ attracting section 2(30) and section 8 of the CGST Act. ? ? ?
In view of the above, it was held that the impugned notifications are validly issued under Sections 5(3) and 5(4) of the IGST Act, but it would be in violation of Section 8 of the CGST Act and the overall scheme of the GST legislation as no such power can be noticed with respect to interpreting a composite supply of goods and services as two segregable supply of goods and supply of services. ? ? ?
The last date of submission of online application for allocation of Tariff rate Quota (TRQ) under India-UAE CEPA for the first two-quarters of FY 2022-23 (May 1st, 2022 to September 30th, 2022) has been extended till May 31st, 2022. In this regard, the DGFT has issued a public notice. ? ? ? ?
The Central Board of Indirect Taxes and Customs (CBIC) has notified the rate of exchange of conversion of the foreign currencies into Indian currency or vice versa, with effect from 20th May 2022, for import and export of goods. In this regard, notification has been issued by CBIC in supersession of Notification No. 40/2022-Customs (N.T.), dated 5th May, 2022.
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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