Monday, 19 February 2018

HC : Disallows cross-utilisation of Education Cesses towards excise duty / service tax payment


HC quashes writ petition of Cellular Operators Association seeking to quash Notification No. 22/2015-CE (NT) as being violative of Articles 14, 19(1)(g), 265 and 300A of Constitution of India, holds that accumulated credit of Education Cess and Secondary & Higher Education Cess post abolition, cannot be cross-utilised for payment of excise duty / service tax; Rejects Association’s reliance on TRU’s explanation dated February 28, 2015 as well as claim of vested right to avail benefit of unutilized credit since EC and SHE were ‘subsumed’ in increased rates of excise duty (from 12% to 12.5%) and service tax (from 12.36% to 14%) w.e.f. March 1, 2015 and June 1, 2015 respectively; Referring to Finance Minister’s speech and explanatory Memorandum to Finance Bill 2015, HC states that no statement or assertion was made that benefit of unutilized EC and SHE credit would be available against excise duty / service tax and use of word ‘subsumed’ could indicate that there would not be an increased tax burden on taxpayers on account of EC and SHE withdrawal; Observes, “Any exercise of increasing taxes and withdrawing a cess or a tax is undertaken keeping in mind several aspects. This can include revenue collection in the form of increased taxes on one hand, and withdrawal or reduction of cess or another tax so as to curtail the adverse impact due to increase. Budgets do, and are, a balancing exercise”; Opines, while it is true that the two Cesses were in nature of taxes and not fee, it would be incorrect and improper to treat them as excise duty or service tax, they were specific Cesses for the objective and purpose so specified; Remarks, “Omission of a provision signifies deletion of that provision and is normally not treated as different from repeal” while stating that repeal / omission in present case was not made retrospectively, but applied prospectively; Elucidates that amendment to CENVAT Credit Rules 2004 incorporating provisos (3) to (8) to Rule 3(7)(b) are in nature of concessions confined to a limited and narrow set of cases where capital goods / inputs / input services were received by the manufacturer /  service provider after March / June 2015; Said provisos are not of general application, as they expand the scope and give benefit of utilization of accumulated EC and SHE against payment of excise duty and service tax, which was not the position prior to such dates, hence, “said classification would not fall foul of vice of discrimination. Article 14 is not offended”; Relies on SC rulings in Hingir-Rampur Coal Co. Ltd. and B.K. Industries, while distinguishing SC ratio in Eicher Motors Ltd : Delhi HC

HC: Refuses Google's 'indirect' appeal for absolute stay of ITAT order

Karnataka HC dismisses Google India’s plea for absolute stay of ITAT order holding Adwords Program payment as royalty; Accepts Revenue’s stand that “the appellant is seeking to obtain stay of liability in proceedings under Section 143(3) of the Act in this indirect manner

Maharashtra Govt. prescribes new process for filing single revised returns for FY 2016-17


Maharashtra Govt. prescribes procedure for filing of single revised return u/s 20(4)(b) of MVAT Act from year 2016-17 onwards, pursuant to audit observations; Inter alia states that single return template must be used for filing all type of returns, viz. 231, 232, 233, 234 and 235 under MVAT & CST Acts; Creation of profile is mandatory for dealers registered before May 25, 2016 to avail SAP based e-services, such as return filing; Dealers will be required to file invoice-wise details in monthly sales and purchases annexures irrespective of their periodicity (monthly or quarterly), but those who have opted for composition scheme and required to file return in Form 232, shall file purchase annexure only; However, dealers who have already submitted monthly / quarterly revised returns u/s 20(4)(b) before issuance of present Trade Circular, shall not be required to file single revised return for said period : Maharashtra Trade Circular

Singapore to introduce GST on imported services from January 2020

Singapore proposes to introduce GST on imported services on or after January 1, 2020 to ensure a fair and resilient tax system in digital economy; B2B imported services to be taxed via reverse charge mechanism, whereby local business customer, making taxable supplies, shall account for GST to IRAS on services it imports and in turn, claim input tax subject to GST input tax recovery rules; However, businesses that (i) make exempt supplies, or (ii) do not make any taxable supplies need to apply reverse charge; Taxation of B2C imported services will take effect through an Overseas Vendor Registration (OVR) mode, which requires overseas suppliers and electronic marketplace operators making significant supplies of digital services to local consumers, to register with IRAS for GST; IRAS to release further details by end-February 2018; Explaining the rationale, Minister for Finance Mr. Heng Swee Kea states, “Today, services such as consultancy and marketing purchased from overseas suppliers are not subject to GST. Local consumers also do not pay GST when they download apps and music from overseas. This change will ensure that imported and local services are accorded the same treatment.”; As regards import of goods, Mr. Heng Swee Kea states that Govt. will review the international discussions on applicability of GST before deciding on measures to take : Singapore Budget 2018