TAX Amicus- Issue No. 142

The article by Shiwani Kaushik tries to seek an answer to the question as to whether the taxable value for discharging GST should be confined only to the contractual payment qua the foreign service provider or the amount of TDS, paid by the Indian service recipient as an additional statutory obligation, should also be added. Analyzing various Court and Tribunal decisions, the author points out that, indirectly, the service provider is financially benefitted, since TDS is not on account of the service provider. Furthermore, the service provider may also claim Income Tax benefits of such TDS in the respective foreign country, under the Double Tax Avoidance Agreements. Thus, the contractual payment is not a ‘sole consideration’. However, according to her, this interpretation can be challenged, as the deposit of TDS by the service recipient is merely to fulfill statutory obligation while there is no indirect favor. Further, the incidence of TDS upon the service recipient is a ‘condition of contract’ and not a ‘consideration of contract’.

Goods and Services Tax (GST)

• The time limit for reporting invoices on the IRP Portal to be implemented
• Intermediary services – IGST Sections 13(8)(b) and 8(2) are constitutionally valid – Provisions however not applicable for the levy of tax on services under CGST Act – Bombay High Court
• Non-filing of a certified copy of the impugned order within the stipulated time is a technical defect – Madras High Court
• Refund of unutilized ITC not deniable on a mere allegation of issuance of fake invoices by a supplier to assessee-exporter – Delhi High Court
• Input Tax Credit to be restored if liability is made good by supplier subsequently – Madras High Court
• No ‘intermediary’ even if service is provided on behalf of somebody else – Delhi High Court
• Cash not forming part of the stock in trade of business cannot be seized during investigation aimed at detecting GST evasion – Kerala High Court
• Refund of unutilized ITC on exports – CGST Rule 89(4)(C) as amended by Notification No. 16/2020-Central Tax, to restrict the value of goods exported, quashed – Karnataka High Court
• Attachment of bank accounts of a person, other than a taxable person and those specified under Section 122(1A), assuming that funds owned by a taxable person, is not permissible – Delhi High Court
• Invoice to be carried in physical form by person-in-charge of conveyance – Calcutta High Court
• Non-sale of perishable goods by authorities within specified days of seizure will not convert them into non-perishable goods – Allahabad High Court
• Refund application does not become non-est merely because deficiency memo is issued by Revenue – Delhi High Court
• Packaging at the behest and under specific instruction of a particular buyer is not ‘pre-packaged’ – Andhra Pradesh AAR

Customs

• Non-generation of DIN is fatal to the communication itself – Madras High Court
• Classification of goods – ‘Pull in’ Note to be narrowly construed when goods are excluded by different Notes from a particular Chapter – Supreme Court
• Tariff Rate Quota license – DGFT Public Notice No. 15/2015-20, dated 14 June 2022 is contrary to Foreign Trade Policy – Karnataka High Court
• Valuation – LME prices cannot be a benchmark when the manufacturer certifies that goods produced from scrap – CESTAT Kolkata
• Classification of parts/accessories of Dredgers – Test whether parts are essential for the purpose of dredging – Independent use for other purposes is immaterial – Supreme Court

Central Excise, Service Tax, and VAT

• Service Tax VCES is not beyond the scope of the Sabka Vishwas (LDR) Scheme – Bombay High Court
• Cenvat credit on imported inputs directly sent to job worker available even when credit is also taken off duty paid by job worker while sending intermediate goods to the assessee – Punjab & Haryana High Court
• SEZ – Time limit for filing refund claim under Notification No. 12/2013-S.T. is only a procedural requirement – CESTAT New Delhi
• Renting of vacant land, even if surrounded by a boundary wall, is not liable to service tax – CESTAT Ahmedabad
• TN VAT – Sale to the dealer in SEZ – No condition of export of goods purchased by SEZ, for zero-rated sale under Section 18(1)(ii) – Madras High Court
• Cenvat credit admissible on re-insurance services in respect of motor vehicles, from 1 April 2011 till 20 July 2012 – Delhi High Court

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