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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON SERVICE TAX CREDIT TO BE CARRIED FORWARD IN GST REGIME

GST UPDATE ON SERVICE TAX CREDIT TO BE CARRIED FORWARD IN GST REGIME
 
GST UPDATE ON SERVICE TAX CREDIT TO BE CARRIED FORWARD IN GST REGIME
 
Every registered person under GST who wants to take transitional credits as per transitional provisions is required to fill TRAN-1 within 90 days from appointed day i.e. 28th September, 2017, which has been extended till 31st October, 2017. The pre-requisite to file TRAN-1 was that such credits can be availed only if registered person has filled all the returns for preceding six months required under existing laws, otherwise he is not eligible to claim transitional credit. Balance amount which was carried forward in last return is an eligible credit under GST regime.
 
Circular no. 207/5/2017-Service Tax dated 28th September, 2017 had been issued to clarify regarding admissibility of credit on services covered under reverse charge for the month of June, 2017. It is worthwhile to mention here that the last date of payment of service tax under reverse charge for the month of June, 2017 was 5th/6th July, 2017 and credit is admissible if following conditions are satisfied:
 
·        The services should have been received up to 30/06/2017.
·        The payment for value of invoice raised in respect of these services should also have been made up to 30/06/2017.
·        The service tax on these services should have been paid after 1st July but before 5th/6th July, 2017.
 
For making such assessee carry forward their credit, due date for filing return has also been extended so that such credit can be availed through revised return. This circular has been beneficial to a lot of assessee who wanted to take this credit but could not due to lack of clarity.
 
As per the circular, credit on services covered under reverse charge can be availed if payment is made on 5th /6th July, 2017 for the month of June, 2017 by considering that such payment of service tax was done in the month of June itself. Now, according to Rule 4(7) of CENVAT Credit Rules, 2004, the CENVAT credit in respect of input service shall be allowed on or after the day on which the invoice, bill or as the case may be, challan referred to in Rule 9 is received. Thus, according to this rule credit on these services can be availed only after making payment of tax which is made after 1st July but before or on 5th/6th July. There could be litigation on the matter that since service tax had not been paid on 30.06.2017, credit cannot be availed as on 30.06.2017.
 
It was held in the case of Collector of Central Excise, Vadodara Vs Dhiren Chemical Industries [2002 (139) ELT 3 (SC)], that board circulars are binding on the departmental officers and they cannot contest or challenge the contents of the circular. However, there is another Supreme Court decision given in the case of CCE, Bolpur Vs M/s Ratan Melting & Wire Industries [2008-TIOL-194-SC-CX-LB] which states that if the circular is contrary to the statutory provisions, the revenue authorities have the right to challenge the said circular and contest them.
 
In view of the above decisions, the circulars which are contrary to existing legal provisions are not sustainable. In instant case, circular cannot override statutory provision i.e. CENVAT Credit Rules, 2004. Thus, in such cases it is more likely that the department may take shed of the decision given in the case of CCE, Bolpur Vs M/s Ratan Melting & Wire Industries [2008-TIOL-194-SC-CX-LB]  to prove that the circular so issued is against the existing legal provisions.
 
 
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Regards,
           
Pradeep Jain, F.C.A.

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