August 2017 – Page 4 – Tax in India

August 29, 2017September 1, 2017

What is the treatment of clearances effected to Special Economic Zones

The clearances effected to the SEZ are zerorated supplies in terms of Section 16 of the IGST Act,2017.
Accordingly, the supplier can claim refund of IGST paid on such supplies or clear the same under bond/letter of undertaking and claim refund of the unutilised ITC.

(FAQ 5: DRUGS AND PHARMACEUTICALS)

August 29, 2017September 1, 2017

Whether ISD registration is required to be obtained separately

In terms of second proviso to Rule 8 of the CGST Rules, 2017 read with Section 25 of the GST Act,2017, every person being an Input Service Distributors to make a separate application for registration

(FAQ 7: DRUGS AND PHARMACEUTICALS)

August 29, 2017September 1, 2017

Whether SEZ unit located in a State requires a separate registration under GST

The SEZ unit located in a State is treated as a business vertical distinct from other units located in the State outside the SEZ [first proviso to Rule 8 of
the CGST Rules, 2017 read with Section 25 of the CGST Act, 2017].
Hence, separate registration is required to be obtained for the unit located in SEZ.

(FAQ 6: DRUGS AND PHARMACEUTICALS)

August 29, 2017March 6, 2018

How loan and licensee units carry out their operations in GST regime

GST law does not have any special provision for loan and licensee units. Where the contract are in the nature of performance of job-work, these units can opt to follow the procedure laid down in section 143 of the CGST Act, 2017 i.e. the principal can send any inputs etc. to such units without payment of tax and the principal can clear the goods from the premises of such units if the principal declares these units as his additional place of business or where such units are themselves registered under section 25 of CGST Act, 2017.

[FAQ 4: Drugs and Pharmaceuticals]

August 29, 2017March 6, 2018

What is the procedure for movement of time expired medicines from the retail outlets to the manufacturer for destruction

In such cases, the manufacturer may issue a credit note within the time specified in sub-section (2) of section 34 of the CGST Act, 2017 subject to
the condition that the person returning the expired medicines reduces his ITC.
Subsequently, when the time expired goods are destroyed, the manufacturer
has to reverse his ITC on account of goods being destroyed.
Where the goods are returned after the time limit specified in section 34(2) of the CGST Act, 2017, the registered person returning the goods shall issue a tax invoice, as it is a supply within the meaning of Section 7 of the CGST Act, 2017.

FAQ3: Drugs and Pharmaceuticals

Comments: But a retail outlet can not issue a tax invoice to wholesale under Drugs and Medicines Act.

August 29, 2017March 6, 2018

Date of filing of Return for July 2017 for OIDAR Service from outside India to a non-taxable online recipient extended to 15-09-2017

Notification 25/2017-CT dated 28-08-2017.

As per Rule 64, Every registered person providing online information and data base access or retrieval services from a place outside India to a person in India other than a registered person shall file return in FORM GSTR-5A on or before the twentieth day of the month succeeding the calendar month or part thereof.

August 29, 2017March 6, 2018

Extension of Due date of filing of Return GSTR-6 by ISD for July and Aug 2017

Date for GST return GSTR-6 by ISD for July and August 2017 has been extended to

8th September for July 2017
and to 23rd September for August 2017

[Notification 26/2017-CT dated 28-08-2017]

Comments :

The above dates have been set just two days before due dates for GSTR-2.
As per Rule 59(5) , The details of invoices furnished by an Input Service Distributor in his return in FORM GSTR-6 under rule 65 shall be made available to the recipient of credit in Part B of FORM GSTR 2A electronically through the common portal and the said recipient may include the same in FORM GSTR-2.
GSTR-6 by ISD is required to be filed under Rule 65 by taking into consideration the information in GSTR-6A. As per Rule 59(3), information submitted by supplier in GSTR-1 relating to ISD travels to ISD through GSTR-6A

August 28, 2017March 6, 2018

What are the requirements for clearance of physician samples distributed free of cost?

In case of clearance of physician samples distributed free of cost, the ITC availed on the said samples has to be reversed in view of the provisions under Section 17(5)(h) of the CGST Act, 2017.No tax is payable on clearance of physician samples distributed free of cost as the value of supply is zero and no credit has been availed.

[FAQ 2 on Drugs and Pharmaceuticals]

August 28, 2017March 6, 2018

Whether formulations cleared have to be assessed to GST under transfer price mechanism or on the basis of MRP printed on them

The assessment of drugs and formulations under GST would be on the basis of transaction value at each level of supply with end to end ITC chain for neutralizing the GST paid at the procurement level.

FAQ1: Drugs & Pharmaceuticals

August 28, 2017March 6, 2018

CBEC Advisory on Drawback during 01-07-2017 to 30-09-2017

For a transition period of three months i.e. 1.7.2017 to 30.9.2017, composite rates of All Industry Rate (AIR) drawback are available to exporters.

I. These composite rates are subject to certain conditions during transition period that ensure that input credit /refund under GST and drawback of composite rates are not taken together for the export product. Continue reading “CBEC Advisory on Drawback during 01-07-2017 to 30-09-2017”