Tax in India

Scope of an entry is to be found by referring to First Schedule to the Customs Tariff Act in case of goods and Service Classification Scheme in case of services.

(ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTIONS : FAQ NO. 17)

No, they are not exactly same. The words used in exemption notification may be understood as ‘equal to or less than’ (but never ‘more than’) the words in the schedules to notification.

(ICAI FAQ NOTIFICATION 06-09-2017 EXEMPTIONS: FAQ NO. 16)

There is no exemption that is specifically issued for high sea sales. All import of goods are liable to IGST not under section 5(1) but under the proviso which takes imported goods into the Customs Act for determination of the liability. And ‘the point’ at which customs duties are levied is when bill of entry for home consumption is filed. In case of high sea sales, such a bill of entry is filed only by the final recipient (high sea buyer).

(ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTIONS: FAQ NO. 15)

An article in an exemption notification may be interpreted by reference to the Rules of Interpretation of Customs Tariff if the notification permits. If not, the article must be interpreted based on non-statutory principle emanating from judicial decisions.

(ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTIONS: FAQ NO. 14)

When both the taxable person and tax department have made a mistake, the same consequences will flow but equity demands that a suitable remedy be provided.

(ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTION: FAQ NO. 13)

If a bonafide belief about availability of exemption is reversed by a Court, then tax charged and collected from customer must be paid and the ITC availed, now discovered to be in error, will also be recoverable. In the interest of equity, the Courts may need to interfere and avoid this double impact.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 12)

Exemption is where tax is leviable but exempted from the payment of the tax. Exclusion from GST is stating that GST will not apply either by treating it neither as supply of goods not as services or by excluding it from section 9.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 11)

GST would have been charged, collected and deposited along with claim of ITC. If the exemption was absolute, explanation to section 11 makes it clear that the exemption must be availed. In case of omission to avail exemption, the tax charged and collected being ‘in the name of GST’ is liable to be paid to the Government under section 76. More importantly, the ITC availed in error will also be denied.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 10)

GST applicable will be recovered with benefit of ITC available only to the limited extent of the time available within section 16(4) when this mistake is realized. There is no estoppel that ITC must be availed because claim of credit is through the return filed under section 39 (section 16(2) refers) and not from the receipt of tax paid supplies.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 9)

In case of violation, exemption may be withdrawn or consequences for violating the conditions may be imposed. It is important to note that deliberate violation of exemption conditions cannot open alternative classifications or GST rate.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO.8)