WEEKLY GST DIGEST FOR AUG 01 ~AUG 07, 2020

TANWAR ATUL & ASSOCIATES

TANWAR ATUL & ASSOCIATES

1) ADV ANCE AUTHORITY RULINGS

a)  Taxability of supply of food & beverages to Hospitals on outsourcing basis

The supplier is not being paid by the consumer of the food & beverages directly. Supplier here is only vested with the management of the canteen. Exemption under the notification is available only when clinical establishment itself supplies food & beverages as a part of health care services to in- patient. Exemption would not be available when food & beverages are supplied by any person other than the clinical establishment in terms of a contract entered with the clinical establishment.

M/s Navneeth Kumar Talla (Telangana AAR)

b)  Eligibility of ITC in respect of lease premium, annual lease rentals and maintenance charges towards supply of land on lease for business purposes

Charges like lease premium charges, annual lease rentals and maintenance charges are paid towards lease of land for construction of building. All these charges for services received are in the nature of services for construction of immoveable property (other than plant and machinery) and hence, shall attract the provisions of Section 17(5) (d) of the CGST Act making such credit ineligible to be availed.

M/s Daicel Chiral Technologies (India) Private Limited (Telangana AAR)

2) CESTAT RULINGS

a) Taxability of foreign bank charges under Reverse Charge Mechanism

Certain charges are deducted from export bill by foreign bank while facilitating settlement of export transactions by Indian exporters and balance amount is remitted to Indian bank, who in turn pay to the Indian exporter after deducting its service charges. In the instant case, the role of Indian bank is only settlement of payment relating to imports/exports for which charges are recovered by it from Indian Exporter. Indian bank cannot be said to be the recipient of services for which charges are deducted by the foreign bank. Service tax would be leviable only when an activity is considered to be a service and such service classifies as a 'taxable service' defined in section 65(105) of the Finance Act. Further, the “consideration” must flow from the service recipient to the service provider and should accrue to the benefit of the service provider and that the amount charged has necessarily to be a consideration for the taxable service provided under the Act. The Indian Bank has not paid any consideration to the Foreign Bank as is clear from the factual position emerging out of the export trade. Also, the Indian Bank cannot be said to be the recipient of any service by the Foreign Bank. As, Indian bank is not the recipient of any service rendered by the Foreign Bank, there is no liability to pay service tax on RCM.

State Bank of Bikaner & Jaipur v. Commissioner of Central Excise & Service Tax, Alwar (Delhi CESTAT)

3) COURT RULINGS

a) Services provided by a company located in India to its holding company located outside India would have to be considered as export of services

Services rendered by the Indian Company outside the territory of India to its Parent company would have to be considered as “export of services” as per Rule 6A of the Rules, 1994. Clause (f) of Rule 6A of the Rules, 1994 would not be applicable in the facts of the case as the Indian Company, who is the provider of service and its parent Company cannot be said to be merely establishment so as to be distinct persons in accordance with Item (b) explanation 3 of Clause (44) of Section 65B of the Act, 1994.

4) GST APPELLATE AUTHORITY RULINGS

a) Detention of goods and conveyance under Section 129(1) on account of transaction value in invoice being less than MRP of the goods

Under GST provisions, taxable value is the transaction value i.e. price actually paid or payable where supplier and recipient are not related and price is the sole consideration. Under GST laws, there is no provision for valuation of goods based on MRP. Further, no investigation has been made by the concerned officer to prove that goods have actually been undervalued. Hence, detention of goods and conveyance on the grounds of value of goods in invoice being less than the MRP is not correct and hence, not sustainable.

M/s G.C. Tiles v. The Assistant Commissioner (AE) GST (GSTAA Jaipur)

5) OTHERS

a) Repayment in case of excess claim under RoSL scheme

Where rebate under RoSL is allowed in form of duty scrips, such rebate shall be allowed on the basis of actual remittances realized by the exporter. In case of excess claim being allowed due to miscalculations or errors, exporter shall refund such excess within 30 days from the date of demand raised by the concerned RA of DGFT. Interest at 15 per cent shall apply from the date of issue of scrips till the date of refund. Failure to refund the amount shall attract recovery proceedings in terms of Section 11 of the Foreign Trade (Development & Regulation) Act, 1992. In case of rebate claimed by misrepresentation, suppression of facts or by submitting fabricated export documents, penal consequences shall also apply. Un-utilized scrips can be surrendered without interest.

Ministry of Textiles Notification F. No. 12015/11/2020-TTP dated August 05, 2020

b)  Appointment of State Tax (Appeals)-cum- Appellate Authority under Haryana GST Act

Additional Excise & Taxation Commissioner has been appointed as Additional Commissioner of State Tax (Appeals)-cum- Appellate Authority for the State of Haryana with effect from August 06, 2020 for the purposes of hearing appeals as referred to in section 107 of the HGST Act read with Rule 109A of the Rules.

Order No. 1189/GST-2 Panchkula, dated August 06, 2020

c)  Functionality to file revocation application under removal of difficulty.

In view of the Removal of Difficulty Order No. 01/2020 dated 25.06.2020, the restriction on filing revocation application, in case it was rejected, has been removed. Aggrieved taxpayers can file application for revocation of cancellation of registration once again. Further, those who have filed Appeal against rejection of the Revocation Application and the decision is still pending, they may also file the Revocation of Cancellation.

Update from GSTN dated August 06, 2020

Disclaimer

Information contained herein are only for reference purposes and are based on the information publicly available as on the date of this publication. The author takes no responsibility for its reliability and accuracy. It is advised to take appropriate legal/professional advice before undertaking any business activity or otherwise based on the above.

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