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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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Publish Date: 03 Mar, 2015
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Big change-small impact on “Sacks and Bags”

Big change-small impact on “Sacks and Bags”
 
An article by: CA Pradeep Jain &
Hushen Ganodwala
 
Recently, Our Finance Minister, Arun Jaitley has increased the rate of excise duty from 12.36% (Including Education Cess and SHE Cess) to 12.5% (without any Education Cess and SHE Cess) for most of the products. In addition to this, amendments have also been made in the exemption notification no. 12/2012-CE dated 17.03.2012. This article is an attempt to analyse the amendment in rate of excise duty made in chapter sub-heading 3923. The Fifth Schedule of the Finance Bill, 2015 in clause (b) for entry in column (4) specifies the rate of excise duty for tariff items 39232100, 39232910 and 39232990 as “18%”.
 
However, if the new serial numbers 148B, 148C and 148D inserted in the notification no. 12/2015-CE dated 01.03.2015 are pursued, it is found that exemption is also available for the product “sacks and bags”. The relevant entries are produced for the sake of convenient reference as follows:-
 

Sl.No. Tariff Heading Description of product Rate of duty
 “148B 3923 21 00 Sacks and bags, other than for industrial use 15%
148C 3923 21 00 All goods, other than goods mentioned at Sl. No. 148B above 12.5% -
148D 3923 29 All goods 12.5%

 
From the above table we find that rate of excise duty has been increased from 12% to 15% on Sacks and bags falling under 39232100 other than for industrial use. Alternatively, we can say that sale of sacks and bags to Industrial use, in such case excise duty attracts at the rate 12.5% and not 15%. Furthermore, the duty for all goods of 392329 is specified as 12.5% in the exemption notification. Consequently, the rate of excise duty for 39232910 and 39232990 is 12.5%.
It is submitted that the overall effect of the amendment is that the rate of excise duty for chapter 3923 pertaining to Sacks and Bags is as follows:-
 

Heading Rate of excise duty
39232100 (For industrial use) 12.5%
39232100 (Other than industrial use) 15%
39232910 12.5%
39232990 12.5%        

 
It is further submitted that the net result is that the sacks and bags for other than industrial use will be leviable to excise duty at the rate of 15% whereas all other sacks and bags will be leviable to excise duty at the rate of 12.5%. In the opinion of authors, the practice of the government to resort to such a complicate procedure to specify the rate of excise duty for “sacks and bags” is not understandable. When the government had to keep rate of excise duty for all sacks and bags at 12.5% and those used for other than industrial use at 15% then what was the need to specify the rate of excise duty as 18%?  Well, the tactics of government are known to them best, but this amendments is surely going to keep the manufacturers of “Sacks and bags” busy in determining the rate of excise duty applicable on their product.
 

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PRADEEP JAIN, F.C.A.

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