INDIRECT TAXATION NEWSLETTER APRIL 2024

I. GST UPDATES

A. NOTIFICATION
1. Nil rate of interest for delay in filing GSTR-3B:
The rate of interest per annum to be ‘Nil’, for the class of registered persons as notified, who were required to furnish the return in FORM STR-3B, but failed to furnish the said return for the months mentioned by the due date, for the period.
Notification No. 7/2024 – CT dated April 8, 2024

2. Special procedure and compliance for manufacturers of tobacco, pan masala etc.:
The registered persons engaged in the manufacturing of tobacco, pan masala and other similar items were required to follow a specific procedure such as furnishing the details of packing machines, maintaining additional records, and submission of special monthly statements with effect from 01-04-2024. However, the Government has now issued notification to defer the implementation of special
procedures till 15-05-2024.
Notification 08/2024 – CT dated April 11, 2024

B. INSTRUCTION
1. Instructions to the officers for enforcement of investigations under GST:
It includes instructions regarding the manner of initiation of investigations, officers whose approval is required before initiation of such activities, issuance of summons in accordance with GST law. It further provides that the officers must take into consideration, the trade practices for conducting such investigation. It aims to ensure uniformity and rational conduct of investigations under GST.
Instruction No. 01/2023-24-GST (Inv.) dated March 30, 2024

II. ADVANCE RULINGS

1. Supply of teachers and lecturers to BBMP schools/Colleges by assessee is covered under pure services being provided to local authority by way of activity in relation to a function “Promoting educational aspects” to municipality under Article 243W of Constitution of India and are liable to exemption under Sl 3 of Notification 12/2017-Cenral Tax (Rate).
Acrystal Infosystems & Services (Karnataka AAR)

2.  Where assessee, a SEZ unit has availed service from an advocate towards execution of lease agreement for premise in gift city, assessee was not required to GST under RCM on said services in accordance to notification 10/2017-Integrated Tax (Rate), subject to furnishing a LUT or a bond as specified in condition (i) of para 1 of Notification 37-Central Tax.
Abans Alternative Fund Manager LLP (Gujarat AAR)

III. COURT RULINGS

1. Where container transporting consignment was intercepted and tax along with penalty was imposed on ground that transporter was not carrying original tax invoice, same could not be sustained as only duplicate copy was meant for transporter as per section 48, thus order imposing tax and penalty was to be quashed.
KARNATAKA HC, Adivya Jyothi Petrochemicals Co. Vs Joint Commissioner Of Commercial Taxes

2. Since assesses reply to notice in Form ASMT-10 was not taken into account, interest of justice warrants that an opportunity was to be provided to assessee to contest tax demand on merits. Therefore, remits 10% of disputed tax demand as agreed. order demanding tax was to be set aside on condition that assessee remits 10% of disputed tax demand as agreed.
MADRAS HC, Sri Venkateswara Cements Vs State Tax Office

3. Where assesses registration was cancelled for non-filing of returns for a continuous period of six months and assessee could not give reply to show cause notice issued due to illness of its proprietor, a fresh order was to be passed; dismissal of appeal on grounds of limitation didn’t extinguish assesses right to seek judicial review.
ALLAHABAD HC – Aryavart Agencies Vs. State of U.P.

4. Show cause notice as also assessment order not signed by authority either digitally or physically were not sustainable and same deserved  to be set aside.
TELANGANA HC – Silver Oak Villas LLP Vs Assistant Commissioner

5. Where assessee had challenged order imposing penalty for transporting vehicle after expiry of e-way bill, since revenue could not make out any case against assessee that there was any deliberate or willful intention of assessee to avoid and evade tax, order imposing penalty was to be set aside.
CALCUTTA HC – Maxxcab Wires & Cables (P.) LTD. Vs State Of West Bengal

6. Mere holding of shares by holding company in subsidiary company could not be classified, treated or construed as ‘supply of service’ for purpose of GST.
KARNATAKA HC – Metro Cash and Carry Pvt. Ltd. Vs State of Karnataka

7. Since assessment orders were issued without assessee being heard, it was just and appropriate that assessee be provided a reasonable opportunity to contest tax demand, therefore, impugned assessment order and consequential attachment notice were to be set aside and matter was remanded for reconsideration subject to condition that assessee remits 10% of disputed tax demand as agreed.
MADRAS HC – Sri Thangamalai Murugan Agencies Vs Assistant Commissioner (ST)

8. Where tax demand against assessee was confirmed and penalty was also imposed, despite paying tax liability, garnishee order was issued and an amount was remitted by bank from and out of assessee’s bank account to revenue, since an appeal was pending before appellate authority against said garnishee order, entitlement of assessee to refund of penalty amount was dependent on assessee succeeding in such appeal, hence, instant writ petition was to be disposed of directing appellate authority to dispose of assessee’s appeal expeditiously.
MADRAS HC – Raja Constructions Vs. Assistant Commissioner (ST)

9. Where Section 107(11) enables appellate authority to make further enquiry as may be necessary, therefore, it would be difficult to say that appellate authority had no jurisdiction to interfere with discretion exercised by adjudicating authority in imposing fine in lieu of confiscation of goods other than market value of goods. Impugned order passed by appellate authority did not suffer from any unreasonableness and writ petition was dismissed.
KERALA HC – Joint Commissioner Of State Tax (I&E) Vs Sasi Pathirakunnath

10. Transitional Credit whether deniable on ground of procedural issue i.e filing of Form Tran-1/Tran-2 offline instead of online on account of technical glitches in system. Apex Court dismisses Revenue’s appeal on ground.
SUPREME COURT OF INDIA – Deputy Commissioner, ST Vs TATA Steel Centre

11. Petitioner, who was a mere employee of MLIPL which was although a group company of Maersk, could not fall within purview of section 122(1A), as petitioner could not be a ‘taxable’ or a ‘registered person’ within meaning and purview of CGST Act so as to retain such benefits as provision ordains, hence, there was no question of revenue invoking section 122(1-A) against petitioner, thus, revenue invoking said provision against petitioner was an act wholly without jurisdiction, so as to issue show cause notice demanding tax and penalty from petitioner was also without jurisdiction.
BOMBAY HC – Shantanu Sanjay Hundekari Vs Union Of India

IV. FOREIGN TRADE POLICY

A. CIRCULAR
Directives regarding submission of Digitized ANFs,  Appendices etc.:
DGFT mandates online submission of digitized ANFs and Appendices, eliminating physical copies. Also, IEC details, RCMCs, and MSME status are accessible online. The DGFT clarified that there is no need to submit hard or soft copies of digitized ANFs, Appendices, IEC, RCMC, or MSME Udyam Registration certificates to DGFT HQ or its Regional Authorities.
Trade Notice No. 1/2024-25, dated April 2, 2024

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