Month: September 2017

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What is relevant date for calculating the two years’ time limit

The relevant date is different for each situation and the same is provided below:

Situation Relevant date
Refund is in respect of goods exported outside India (or on inputs/ input services used in such goods)
(i) By sea Date on which the ship or the aircraft in which such goods are loaded, leaves India
(ii) By Air
(iii) By land Date on which such goods pass the frontier
(iv) By post Date of dispatch of goods by the concerned Post Office to a place outside India
Refund in respect of deemed exports Date on which the return relating to such deemed exports is filed
Refund is in respect of services exported (or on inputs/ input services used in such services) Where supply of service completed prior to receipt of payment Date of receipt of payment in convertible foreign exchange
Where payment for service received in advance Date of issue of invoice
Tax becomes refundable as a consequence of: (i) Judgment (ii) Decree (iii) Order (iv) Direction of Appellate Authority, Appellate Tribunal or any Court Date of communication of such judgment, decree, order or direction
Refund of unutilized input tax credit End of the financial year in which such claim for refund arises
Tax is paid provisionally under this Act or the rules made thereunder Date of adjustment of tax after the final assessment thereof.
In case of a person other than the supplier Date of receipt of goods or services by such person
In any other case Date of payment of tax

(ICAI FAQ PUBLICATIONS 06-09-2017 REFUNDS: FAQ NO. 3)

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Is the word refund defined in the CGST Act

Yes, the word refund is defined in explanation to Section 54 of the CGST Act, 2017. As per the said definition, refund includes refund of tax and interest paid on:
1. Zero-rated supplies of goods or services or both; or
2. Inputs or input services used in the effecting such zero-rated supplies of goods or services or both; or
3. Supply of goods regarded as deemed exports; or
4. Refund of unutilized input tax credit at the end of any tax period in case the rate of output tax is less than the rate of input tax.

(ICAI FAQ PUBLICATIONS 06-09-2017 REFUNDS: FAQ NO. 1)

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Construction service to Government and Governmental Authorities for non business, educational, clinical,residential purpose: tax rate reduced to 12% by Notification 24/2017 dtd 21-09-2017

GST Council in its 21st meeting at Hyderabad had recommended reduction of tax rate from 18% to 12% for

Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –

(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;

(b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or

(c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the CGST Act, 2017 (namely, MPs/Members of State Legislatures, Panchayats, Municipalities, other local authorities, persons holding constitutional posts, chairperson/member/director in a body established by Central Government, State Government or local authorities etc.)

The above reduction in rate has now been notified by Notification dated 21-09-2017.

 

Construction service provided

Ø to above contractees for historical monuments, canal, dam, bridges, other irrigation work, pipeline, conduit or plant for water supply or treatment or serwerage treatment or disposal

Ø for road, bridge, tunnel, or terminal for road transportation for use by general public

Ø Under projects of JNNURM, Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana

Ø Pollution Control or Effluent treatment plant, not located in factory

Ø a structure meant for funeral, burial or cremation of deceased

Ø railways

Ø single residential unit

Ø low-cost houses up to a carpet area of 60 square metres per house

Ø post-harvest storage infrastructure for agricultural produce including a cold storage

Ø mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.

 

Had already been reduced to 12% by Notification dated 22-08-2017

 

 

What is Governmental Authority ?

 

Governmental Authority has meaning under explanation to section 2(16) of IGST as per Notification 12/2017.

 

As per section 2(16), Explanation .––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,––

(i)                set up by an Act of Parliament or a State Legislature; or

(ii)              established by any Government,

 

with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution

 

Following Function of Municipality are provided under Article 243W of Constitution read with Schedule XII to the Constitution:

  1. Urban planning including town planning.
  2. Regulation of land-use and construction of buildings.
  3. Planning for economic and social development.
  4. Roads and bridges.
  5. Water supply for domestic, industrial and commercial purposes.
  6. Public health, sanitation conservancy and solid waste management.
  7. Fire services.
  8. Urban forestry, protection of the environment and promotion of ecological aspects.
  9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
  10. Slum improvement and upgradation.
  11. Urban poverty alleviation.
  12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.
  13. Promotion of cultural, educational and aesthetic aspects.
  14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums.
  15. Cattle pounds; prevention of cruelty to animals.
  16. Vital statistics including registration of births and deaths.
  17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
  18. Regulation of slaughter houses and tanneries

 

Construction service to Institution not performing above functions shall continue to be taxed @ 18%.

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Registered Brand Name: Forego actionable claim by filing affidavit and printing “give up” declaration on unit container to avail NIL Rate GST

Following items under registered brand name and put in unit container are taxable @ 5%

  1. Tender Coconut Water
  2. Organic Manure
  3. Chenna or Paneer
  4. Natural Honey
  5. Wheat and Meslin
  6. Wheat and Meslin flour
  7. Rye
  8. Barley
  9. Oats
  10. Maize
  11. Rice
  12. Grain Sorghum
  13. Buck Wheat
  14. Cereal Flours
  15. Cereal groats, meal and pellets
  16. Flour, of potatoes
  17. Flour, of the dried leguminous vegetables

 

If the above items are put in unit container but not supplied in registered brand name, then tax rate is NIL. Also even if the above items are in registered brand name but not put in unit container still the tax rate is NIL. Hence for above items being exigible to tax, they should be both in registered brand name and put in unit container.

 

 

The phrase “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre- determined quantity or number, which is indicated on such package[Explanation (i) of 1/2017-CTR]

 

Comments: Hence if quantity held in package is not indicated on the package, still tax rate shall be NIL.

 

The phrase “registered brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999 [Explanation (ii) of 1/2017-CTR]

 

Comments:

  1. Indication of identity also gets covered
  2. Name of mark registered in foreign country is not covered above
  3. Name or mark registered under Copy rights Act is not covered.

 

GST Council Decision dated 09-09-2017

The issue of avoidance of 5% GST on pulses, cereals and flours, put up in unit container and bearing a registered brand name, was also discussed by the GST Council. After detailed deliberations, the Council recommended that the following amendments may be made to the existing Notifications, so as to provide that:

 

1) A brand registered as on 15.05.2017 shall be deemed to be a registered brand for the purposes of levy of 5% GST, irrespective of whether or not such brand is subsequently deregistered.

 

2) A brand registered as on 15.05.2017 under the Copyright Act, 1957 shall also be treated as a registered brand for the purposes of levy of 5% GST.

 

3) A brand registered as on 15.05.2017 under any law for the time being in force in any other country shall also be deemed to be a registered brand for the purposes of levy of 5% GST. [Hence brands registered in foreign country shall also be covered under registered brand name]

 

4) A mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name for the purposes of levy of 5% GST.

 

Press Release dated 20-09-2017

–         Notifications for giving effect to above are expected to be issued on 22nd September 2017

–         5% rate against name or mark shall not apply if the person concerned voluntarily foregoes any actionable claim or enforceable right on such brand name, subject to the conditions that he:

a) files an affidavit to the effect that he is voluntarily foregoing his actionable claim or enforceable right on such brand name with the jurisdictional Commissioner of Central Tax or State Tax, or the jurisdictional officer of Union Territory Tax, as the case may be, and

b) prints in indelible ink, both in English and local language on each such unit container, that in respect of brand name printed on the unit containers he has voluntarily foregone his actionable claim or enforceable right.

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Assessment order being protective assessment order, penalty could not be initiated: Gujrat High Court 23-06-2014

Unless and until substantive assessment is made and final assessment order is passed in case of assessee making addition in hands of assessee, initiation of penalty proceedings is not permissible; there cannot be initiation of penalty proceedings with respect to protective assessment order

Bhailal Manilal Patel  [2014] 49 taxmann.com 539 (Gujarat) JUNE  23, 2014