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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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GST UPDATE ON TAXABILITY OF OCEAN FREIGHT ON EXPORT OF GOODS:-

GST UPDATE ON TAXABILITY OF OCEAN FREIGHT ON EXPORT OF GOODS:-

GST UPDATE ON TAXABILITY OF OCEAN FREIGHT ON EXPORT OF GOODS:-

The assessees were facing the rigours of proceedings initiated against them for non-payment of service tax on ocean freight in case of import of goods when the foreign supplier paid the freight amount to the foreign shipper directly. This is for the reason that the GST is liable to be paid by the importer under reverse charge mechanism at the GST rate of 5% on the 10% of the CIF value of imported goods by virtue of notification no. 8/2017-Integrated Tax (Rate) dated 28.06.2017 and corrigendum to the said notification. However, the problem regarding applicability of GST with respect to ocean freight pertaining to export of goods has also become a matter of concern for many exporters. In order to understand the problem, reference is made to various provisions as follows:-
As per the statutory provisions in force, it is very clear that the exporter is not liable to pay GST under reverse charge mechanism on the ocean freight incurred with respect to export of goods. In case of determining the place of supply in the case of ocean freight incurred with respect to export of goods, the provisions contained in section 13(9) of the IGST Act, 2017 plays significance which reads as follows:-
(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.

In case of exports, the place of destination of goods is outside India so the place of supply of service is also outside India. It is submitted that since the place of supply of service is in non-taxable territory, no GST is payable by the exporter under reverse charge mechanism. Moreover, in order to pay GST under reverse charge mechanism, the location of supplier of service should be outside India, location of recipient should be in India and place of supply should be in India. However, in the present case, place of supply itself is outside India and so no GST is payable.

It is also pertinent to mention that that the Notification No. 09/2018-Integrated Tax (Rate) dated 25.01.2018 grants exemption to the services by way of transportation of goods by a vessel from a customs station of clearance in India to a place outside India. Similar exemption was granted in CGST also. However, this exemption is being taken as a tool to recover GST on ocean freight incurred for export of goods by the revenue authorities on the contention that the exemption was granted w.e.f. 25.01.2018 and prior to 25.01.2018, said services were leviable to GST. Although, the position of law is very clear but still, an adverse interpretation is being taken by the revenue authorities to levy GST on ocean freight paid on export of goods. It is truly said that sometimes activities done with good intention turn unfavourable.

This is solely for the educational purpose.
You can reach us at www.capradeepjain.com, at our facebook page on
https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on Twitter at https://www.twitter.com/@capradeepjain21
GST UPDATE ON TAXABILITY OF OCEAN FREIGHT ON EXPORT OF GOODS:-

The assessees were facing the rigours of proceedings initiated against them for non-payment of service tax on ocean freight in case of import of goods when the foreign supplier paid the freight amount to the foreign shipper directly. This is for the reason that the GST is liable to be paid by the importer under reverse charge mechanism at the GST rate of 5% on the 10% of the CIF value of imported goods by virtue of notification no. 8/2017-Integrated Tax (Rate) dated 28.06.2017 and corrigendum to the said notification. However, the problem regarding applicability of GST with respect to ocean freight pertaining to export of goods has also become a matter of concern for many exporters. In order to understand the problem, reference is made to various provisions as follows:-
As per the statutory provisions in force, it is very clear that the exporter is not liable to pay GST under reverse charge mechanism on the ocean freight incurred with respect to export of goods. In case of determining the place of supply in the case of ocean freight incurred with respect to export of goods, the provisions contained in section 13(9) of the IGST Act, 2017 plays significance which reads as follows:-
(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.

In case of exports, the place of destination of goods is outside India so the place of supply of service is also outside India. It is submitted that since the place of supply of service is in non-taxable territory, no GST is payable by the exporter under reverse charge mechanism. Moreover, in order to pay GST under reverse charge mechanism, the location of supplier of service should be outside India, location of recipient should be in India and place of supply should be in India. However, in the present case, place of supply itself is outside India and so no GST is payable.

It is also pertinent to mention that that the Notification No. 09/2018-Integrated Tax (Rate) dated 25.01.2018 grants exemption to the services by way of transportation of goods by a vessel from a customs station of clearance in India to a place outside India. Similar exemption was granted in CGST also. However, this exemption is being taken as a tool to recover GST on ocean freight incurred for export of goods by the revenue authorities on the contention that the exemption was granted w.e.f. 25.01.2018 and prior to 25.01.2018, said services were leviable to GST. Although, the position of law is very clear but still, an adverse interpretation is being taken by the revenue authorities to levy GST on ocean freight paid on export of goods. It is truly said that sometimes activities done with good intention turn unfavourable.

This is solely for the educational purpose.
You can reach us at www.capradeepjain.com, at our facebook page on
https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on Twitter at https://www.twitter.com/@capradeepjain21
GST UPDATE ON TAXABILITY OF OCEAN FREIGHT ON EXPORT OF GOODS:-

The assessees were facing the rigours of proceedings initiated against them for non-payment of service tax on ocean freight in case of import of goods when the foreign supplier paid the freight amount to the foreign shipper directly. This is for the reason that the GST is liable to be paid by the importer under reverse charge mechanism at the GST rate of 5% on the 10% of the CIF value of imported goods by virtue of notification no. 8/2017-Integrated Tax (Rate) dated 28.06.2017 and corrigendum to the said notification. However, the problem regarding applicability of GST with respect to ocean freight pertaining to export of goods has also become a matter of concern for many exporters. In order to understand the problem, reference is made to various provisions as follows:-
As per the statutory provisions in force, it is very clear that the exporter is not liable to pay GST under reverse charge mechanism on the ocean freight incurred with respect to export of goods. In case of determining the place of supply in the case of ocean freight incurred with respect to export of goods, the provisions contained in section 13(9) of the IGST Act, 2017 plays significance which reads as follows:-
(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.

In case of exports, the place of destination of goods is outside India so the place of supply of service is also outside India. It is submitted that since the place of supply of service is in non-taxable territory, no GST is payable by the exporter under reverse charge mechanism. Moreover, in order to pay GST under reverse charge mechanism, the location of supplier of service should be outside India, location of recipient should be in India and place of supply should be in India. However, in the present case, place of supply itself is outside India and so no GST is payable.

It is also pertinent to mention that that the Notification No. 09/2018-Integrated Tax (Rate) dated 25.01.2018 grants exemption to the services by way of transportation of goods by a vessel from a customs station of clearance in India to a place outside India. Similar exemption was granted in CGST also. However, this exemption is being taken as a tool to recover GST on ocean freight incurred for export of goods by the revenue authorities on the contention that the exemption was granted w.e.f. 25.01.2018 and prior to 25.01.2018, said services were leviable to GST. Although, the position of law is very clear but still, an adverse interpretation is being taken by the revenue authorities to levy GST on ocean freight paid on export of goods. It is truly said that sometimes activities done with good intention turn unfavourable.

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