NOTIFICATIONS / PUBLIC NOTICES
Customs
- The Central Government (CG) has
extended levy of anti-dumping duty on Polytetrafluoroethylene
(PTFE) falling under tariff item 3904 61 00 of the First Schedule
to the Customs Tariff Act, 1975 originating in, or exported from,
Russia until 2 May 2016.
(Ref: Notification No 17/2015-Cus (ADD) dated 1 May 2015) - The CG has extended levy of
anti-dumping duty on Morpholine falling under tariff item 2933 39
17 of the First Schedule to the Customs Tariff Act, 1975
originating in, or exported from, the People's Republic of
China and the European Union for a further period until 19
September 2016.
(Ref: Notification No 18/2015-Cus (ADD) dated 18 May 2015) - The CG has levied anti-dumping duty
on Sodium Citrate falling under Chapter 29 of the First Schedule to
the Customs Tariff Act, 1975 originating in, or exported from, the
People's Republic of China for a period of five years from 20
May 2015 onwards.
(Ref: Notification No 19/2015-Cus (ADD) dated 20 May 2015) - The CG has levied anti-dumping duty
on Pentaerythritol falling under Chapter 29 of the First Schedule
to the Customs Tariff Act, 1975 originating in, or exported from,
Russia for a period of five years from 22 May 2015 onwards.
(Ref: Notification No 20/2015-Cus (ADD) dated 22 May 2015) - The CG has levied anti-dumping duty
on Cast Aluminium Alloy Wheels or Alloy Road Wheels of a size in
diameters ranging from 12 inches to 24 inches used in motor
vehicles falling under Chapter heading 8708 of the First Schedule
to the Customs Tariff Act, 1975 originating in, or exported from,
the People's Republic of China, Korea RP and Thailand for a
period of five years from the date imposition of provisional
anti-dumping duty from 11 April 2014 onwards.
(Ref: Notification No 21/2015-Cus (ADD) dated 22 May 2015) - The CG has levied anti-dumping duty
on USB Flash Drives falling under Chapter 84 and 85 of the First
Schedule to the Customs Tariff Act, 1975 originating in, or
exported from, the People's Republic of China and Chinese
Taipei for a period of five years from 22 May 2015 onwards.
(Ref: Notification No 22/2015-Cus (ADD) dated 22 May 2015) - The CG has levied anti-dumping duty
on Purified Terephthalic Acid including its variants- Medium
Quality Terephthalic Acid (MTA) and Quality Terephthalic Acid (QTA)
falling under tariff item 29173600 of the First Schedule to the
Customs Tariff Act, 1975 originating in, or exported from, the
People's Republic of China, the European Union, Korea RP and
Thailand for a period of five years from the date imposition of
provisional anti-dumping duty from 25 July 2014 onwards.
(Ref: Notification No 23/2015-Cus (ADD) dated 27 May 2015)
Central Excise
- The CG, in exercise of its powers,
had issued notification amending the CENVAT Credit Rules, 2004
(CCR). A proviso to sub-rule (7) clause (b) of Rule 3 of CCR has
been inserted to permit utilisation of credit of Education Cess and
Secondary and Higher Education Cess paid on inputs or capital goods
received in the factory of manufacture of final product or input
services on or after 1 March, 2015 for payment of duty of excise
leviable under First Schedule to the Central Excise Tariff Act,
1985.
(Ref: Notification No 12/2015-CE (N.T.) dated 30 April 2015) - The CG, in exercise of its powers,
has amended the notification of the Government of India in the
Ministry of Finance (Department of Revenue) No. 6/2005 Waters.
Consequently, exemption from additional duty of excise has been
withdrawn on water including mineral waters and aerated waters,
containing added sugar or other sweetening matter or
flavoured.
(Ref: Notification No 29/2015-Central Excise dated 22 May 2015) - The CG has issued a clarification
that dealer registration under excise is not mandatory for direct
transport of goods from manufacturer or importer to consignee and
CENVAT credit can be availed on the basis of the original invoice
issued by the manufacturer or registered importer.
(Ref: Circular No. 1003/10/2015-CX dated 5 May 2015)
Service tax
- Service tax rate has been increased
from 12.36% (including Education cesses) to 14% with effect from 1
June 2015.
(Ref: Notification No 14/2015 – ST dated 19 May 2015)
Value Added Tax (VAT)
- The Government of Gujarat has amended
the Gujarat Value Added Tax Rules, 2006, providing for, inter alia,
benefits to any sick industrial unit registered by the Board for
Industrial & Financial Reconstruction, subject to conditions
mentioned in G.R. of the Industries and Mines Department No.
MIS-102012- 593970-I dated 8 July 2013.
(Ref: Notification No. (GHN-17) VAR-2015(36) / TH dated 18 May 2015) - The Government of Himachal Pradesh
has specified a FORM VAT – XV for filing returns
electronically, as opposed to the earlier FORM-I.
(Ref: Notification No. EXN-F(10)-8/2013-Loose dated 15 May 2015) - The Government of Rajasthan has
notified the procedure for early processing of refund of excess of
input tax over output tax to dealers whose turnover of interstate
sales in the previous year was more than 50% of total turnover. The
said notification allows for disbursement of such refund claims
within a period of 30 days from the filing of the application
specified therein.
(Ref: Notification No. F.16(1110)VAT/CCT/13-14/Pt./1698 dated 12 May 2015) - The Government of Telangana has
amended Schedule – IV (list of goods taxable @ 5%) to include
auto–components sold to automobile manufacturing units
located within the state.
(Ref: Notification No. G.O. MS. No. 50 dated 06 May 2015) - The Government of Uttarakhand has
extended the operation of Notification No. 786/2011/74(120)/XXVII
(8)/05 dated 18 July 2011 up to 31 March 2016 or the date of
introduction of Good and Services Tax (GST), whichever is earlier.
The notification dated 18 July 2011 provided for exemption to
information technology goods. Further, "mobile handsets"
has also been included in the list of information technology goods
by this extension.
(Ref: Notification No. 383/2015/74 (120)/ XXVII(8)/05 dated 02 May 2015) - The Government of Maharashtra had
notified the provisions of the Maharashtra Tax Laws (Levy,
Amendment and Validation) Act, 2015 in March 2015 (amendments). For
ease of reference, recently a circular has been issued capturing
various amendments along with the effective date for each of such
amendments.
(Ref: MVAT Trade Circular 6T of 2015 dated 14 May 2015) - The Government of Maharashtra has
further simplified the procedure required for registration under
the Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax
Act, 1956. The erstwhile procedure required the assessee to appear
before the registering authority for verification. Under the
revised procedure, the assessee is no longer required to appear
before the registering authority. All the documents required for
registration are now allowed to be uploaded electronically. The
requirement for physical submission and verification has been done
away with. Further, the assessee now has an option of paying the
fees through e-payment also.
(Ref: Circular No. 5T of 2015 dated 06 May 2015 read with Circular No. 7T of 2015 dated 19 May 2015) - The Government of Andhra Pradesh has
mandated a system for declaration of goods being transported. With
effect from 1 May 2015, the transporter shall ensure that all
incoming or outgoing goods are covered by eWaybills. Manual CST
Waybills are not permitted henceforth.
(Ref: Circular No. CCT's Ref.No.Enft/E3/455/2015 dated 05 May 2015) - The Government of Andhra Pradesh has
issued instructions on apportionment of excess net credit carried
forward (NCCF) by registered dealers in view of the reorganization
of the states of Andhra Pradesh and Telangana. The salient points
are as follows:
- In respect of the NCCF relating to dealers registered in both states, who were originally registered in Telangana, but have taken registration in Andhra Pradesh also after bifurcation, should be allowed to avail the credit carry forward in Telangana only.
- The dealers who were originally registered in the Andhra Pradesh, but have taken registration in the Telangana also after bifurcation, should be allowed to avail the credit carry forward in the State of Andhra Pradesh only.
- In respect of dealers migrating from one state to the other, NCCF may be claimed in the state to which they have migrated, after the appointed day.
- The Government of Kerala has extended
the last date for filing option for the payment of compounded tax
under Section 7 of Kerala General Sales Tax Act, 1963 and Section 8
of Kerala Value Added Tax Act, 2003 for the year 2015-16 to 05 June
2015. Similarly, the last date for filing application for renewal
of registration under these statutes for the year 2015-16 has been
extended till 20 May 2015.
(Ref: Circular No. C1-14518/15/CT dated 15 May 2015) - The Government of Rajasthan has
notified the procedure for amendment of details of the dealer. The
procedure requires for submission of an online application to amend
dealer details. Further, only in cases of change of (i) principal
place of business (ii) bank details; (iii) business manager; (iv)
particulars of the partners/directors; (v) surety/security details;
(vi) constitution of the firm without dissolution; (vii) opening of
a new place of business; and (vii) acquisition of any business,
sale or disposal of the business in part, the dealer making
application for amendment is required to submit supporting
documents/proof to the competent authority within a period of 10
days. In all other cases, no physical submission of supporting
documents is required.
(Ref: Circular No. 01/2015-16 dated 28 May 2015)
RECENT CASE LAWS
Customs
- The Supreme Court (SC) has held that
the principle of 'unjust enrichment' will not apply to the
refund of a deposit made at the time of redeeming seized goods. The
SC held that the said deposit is made as condition of release of
confiscated goods and is not a form of duty levied onto the goods
at the time of importation. The SC further held that in the present
case, the deposit was made pursuant to an interim order of the High
Court of Bombay was not 'customs duty'; the appellant is a
bona fide purchaser and only got involved subsequent to seizure of
purchased goods for alleged undervaluation. Considering the
CESTAT's order that no additional customs duty or penalty is
payable absent evidence of under-invoicing, the SC held that the
appellant is entitled to refund of entire amount with interest @
13% p.a. The SC placed reliance on CBEC Circular dated 2 January
2002 which clarifies that 'unjust enrichment' principle
inapplicable to refund of pre-deposit.
(Ref: Commissioner of Customs (Import) Raigad & Another vs. Finacord Chemicals (P) Ltd & Others, TS-176-SC-2015-CUST) - The Mumbai CESTAT (Mumbai CESTAT)
held that royalty paid to its associate companies under Trade Mark
License Agreement is not included in the assessable value of
imported goods for custom duty. The value of the imported goods is
determined in terms of Rule 10(1)(c) of the Customs Valuation
Rules, 2007 (the Valuation Rules). The Mumbai CESTAT observed that
for inclusion of royalty amount in the assessable value, two
conditions under Rule 10(1)(c) must be satisfied which are: (i)
royalty is relatable to imported goods; and (ii) royalty is paid as
condition of sale of imported goods. Further, the Mumbai CESTAT
held that the royalty was not related to the imported raw material,
although royalty was related to the finished goods. It observed
that only because imported raw materials were contained in the
finished goods, it cannot be argued that royalty is related to the
imported raw materials (goods). On the above grounds, Mumbai CESTAT
allowed the appeal in favour of the assessee.
(Ref: Sandvik Asia Pvt. Ltd. vs. Commissioner of Customs (Import), Mumbai TS- 167-CESTAT-2015 (Mum)-CUST) - The CESTAT Delhi (Delhi CESTAT)
affirmed the appellant's view that no duty was payable on spare
parts imported to replace damaged parts of machinery even though
they were capitalised as part of 'capital goods'.
An issue was raised by excise authorities when in principle
approval for EOU debonding was granted to the appellant. The
Revenue Department alleged that when an assessee capitalizes spare
parts, there is double enrichment in the form of depreciation as
well as customs duty exemption. The Delhi CESTAT observed that once
spare parts are used for replacement of old and worn out machinery
parts, they become part of machinery and lose their separate
identity; hence, use of spare parts would not increase the value of
machinery. The Delhi CESTAT held that at the time of debonding,
duty is payable on value of duty free raw material and on
depreciated value of imported/indigenous capital goods and that
capital goods value cannot be enhanced by value of spare parts used
from time to time used replacing old parts.
(Ref: Century Yarn vs. CCE and ST Indore, TS-189-CESTAT-2015(DEL)-CUST) - The CESTAT Kolkata (Kolkata CESTAT)
held that benefit of project import would be available where a
contract is registered post importation of goods but before
clearance from warehouse for home consumption. The Revenue
Department contended that the mandatory conditions of Regulations 4
& 5 of Project Import Regulation, 1986 (PIR) were not met since
goods were imported prior to registration of contract, and that
classification declared at the time of warehousing (by filing
into-bond Bills of Entry) could not be altered during clearance for
home consumption. The Kolkata CESTAT held that on a reading of the
erstwhile provisions of PIR vis-a-vis current provisions, it is
clear that a contract should be registered before clearance of
imported goods for home consumption. The Kolkata CESTAT observed
that clearance of goods for home consumption as mentioned in
Regulation (4) of PIR cannot be construed as crossing of the Indian
territorial waters and depositing it in the warehouse. Clearance
for home consumption here would mean removing the goods from bonded
warehouse so as to mix with the mass of goods in India.
Accordingly, the appeal was allowed in favour of assessee.
(Ref: Essar Projects India Ltd. v Commissioner of Customs (Port), Kolkata, TS- 201-CESTAT-2015(Kol)-CUST)
Service tax
- The Mumbai CESTAT has allowed refund
of input service tax credit against export of services even though
receipt of consideration was in Indian Rupees (INR). Placing
reliance on the relevant regulations issued under Foreign Exchange
Management Act, 1999, the Mumbai CESTAT held that receipt of
payment in INR from the account of bank situated in any country
outside India is a manner of receipt of foreign exchange. Hence, in
the present case, wherein the concerned bank issued Foreign Inward
Remittance Certificate (FIRC) with specific certification that
payment received are in convertible rupees, it would tantamount to
receipt of consideration in convertible foreign exchange.
(Ref: Sun-Area Real Estate Private Limited v. Commissioner of Service Tax, Mumbai-I)
VAT
- The Bombay High Court (Bom HC) has
upheld the validity of Notification No. 1513 CR-147 Taxation-1
dated 29 January 2014 and the ensuing Trade Circulars 7T of 2014
dated 21 February 2014 and 12 of 2014 dated 17 April 2014
(amendment). Vide this amendment, provisions of Rule 58 of the
Maharashtra Value Added Tax Rules, 2005 (MVAT Rules) were amended
to provide for determination of sale price of goods in works
contract or construction contracts after permissible percentage
deductions, depending on the stage when the developer enters into
the contract with the purchaser. The Bom HC perused the entire
history of the litigation and held that there is a fine distinction
between the "levy of tax" and the "measure of
tax." The Bom HC held that the value provided for through the
amendment is only a "measure of tax" and the legislature
has the latitude to adopt any basis for determining the value of an
article for the purpose of assessment of VAT. The Bom HC held that
once there is a statutory provision for charging tax, it is open to
the delegate to prescribe the formula on which such levy will take
place, as it is based on the principle of uniformity, as it has
been done for Rule 58 of the MVAT Rules.
(Ref: Confederation of Real Estate Developers Association of India vs State of Maharashtra, TS-194-HC-2015(BOM)-VAT) - The Karnataka High Court (Kar HC) has
held that the assessee is not liable to penalty under Section 72 of
the Karnataka Value Added Tax Act, 2003 (KVAT), when the assessee
voluntarily filed a revised return and paid tax along with
interest. In this case, the assessee was not able to ascertain the
turnover on account of software issues at the head office. In order
to comply with the prescribed statutory period for filing a return,
the assessee filed a NIL return. Subsequently, upon determination
of the correct turnover, the assessee filed a revised return and
paid the dues along with interest. The Revenue Department pressed
into action Section 72(2) of the KVAT, which provides for a penalty
where the tax liability in the return is understated by an extent
of 5% or more. The Kar HC observed that once a revised return filed
by the assessee has been accepted by the Department, it completely
obliterates the earlier return. The Kar HC held that provisions of
Section 72(2) of the KVAT, would only apply to the revised return,
and not the NIL return originally filed. Since in the revised
return there was no understatement of taxes due, the assessee was
not liable to penalty.
(Ref: Indus Towers Ltd. vs State of Karnataka, TS-173-HC-2015(Kar)-VAT) - The Supreme Court (SC) has held that
the Revenue Department can go back from a settlement entered into
with an assessee on the basis of which the assessee has already
discharged tax dues. The assessee (partner in a firm) in this case
entered into litigation with the department on account of certain
assessments. While the matter was sub judice before the
Appellate Tribunal, the assessee wrote a letter to the state
finance minister for settlement of the tax dues of the partnership
firm. This letter was duly accepted, and on this basis, the
concerned authority issued another letter to the assessee
quantifying the total dues payable. The Revenue Department
challenged this settlement stating it to be illegal. The SC took
note of Section 18 and 45 of the Bombay Sales Tax Act, and
concluded that there is no provision in the law allowing for such a
settlement with an individual partner in respect of dues payable by
the firm. The SC further held that there is provision for equity in
a taxing statute, and the same must be given a literal
interpretation. In the absence of a provision allowing for
settlement, the SC held that the Revenue Department is entitled to
proceed against the assessee for dues payable.
(Ref: Pradip Nanjee Gala vs Sales Tax Officer,TS-168-SC-2015-VAT)
The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com
