GST NOVEMBER UPDATE

Notification Nos. 59–63/2017 –Central Tax, all dated 15-11-2017 have been issued for this purpose.

Return	Month/ Quarter	Revised due date	Additional comments
GSTR-4	For the quarter July to September 2017	24-Dec-2017	To be filed by Composition supplier.
GSTR-5	For the month July, August, September & October 2017	11-Dec-2017	To be filed by a non-resident taxable person.
GSTR-5A	For the month July, August, September & October 2017	15-Dec-2017	To be filed by person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient.
GSTR-6	For the month July	31-Dec-2017	To be filed by Input Service Distributor (ISD).
ITC-04	For the quarter July to September 2017	31-Dec-2017	In respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another.

♠ Late fees for delayed filing of GSTR-3B waived– Late fee payable by any registered person for failure to furnish the return in FORM GSTR-3B for the month of October, 2017 which is in excess of an amount of twenty five rupees for every day. Provided that where the total amount of central tax payable in the said return is nil, waived to the extent which is in excess of an amount of ten rupees for every day,

♠ GSTR-3B made mandatory till March 2018– Notification Nos. 56/2017-Central Tax, dated 15-11-2017.

SI. No.	Month	Last date for filing of  return in FORM GSTR-3B
1	January 2018	20th February 2018
2	February 2018	20th March 2018
3	March 2018	20th April 2018

♠ Due date for filing GSTR-1– Notification Nos. 57–58/2017-Central Tax, dated 15-11-2017 Time limit for furnishing details of outward supplies in FORM GSTR-1 by such class of registered persons,

• having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year

SI No.	Months for which the details in FORM GSTR-1 are furnished	Time period for furnishing the details in FORM GSTR-1
1	July – October, 2017	31st December, 2017
2	November, 2017	10th January, 2018
3	December, 2017	10th February, 2018
4	January, 2018	10th March, 2018
5	February, 2018	10th April, 2018
6	March, 2018	10th May, 2018

·         having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year

SI No.	Months for which the details in FORM GSTR-1 are furnished	Time period for furnishing the details in FORM GSTR-1
1	July – September 2017	31st December, 2017
2	October – December 2017	15th February, 2018
3	January – March 2018	30th April, 2018

♠ Rate of GST reduced on large number of goods and services– As decided by the GST Council in its 23rd meeting held on 10^th November, rates of GST on number of products and services have been reduced. [Notification Nos. 41, 42 and 46/2017-Central Tax (Rate), all dated 14-11-2017 and effective from 15-11-2017]

• List of 28% GST rated goods has been pruned substantially, from 224 to 50 tariff headings,

Some of the tariff headings where rates have been reduced from 28% to 18% are as under:

Chapter/ Heading/ Sub-heading/ Tariff item	Description
3922	Baths, shower baths, sinks, wash basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics.
4013	Inner tubes of rubber [other than of a kind used on/in bicycles, cycle- rickshaws and three wheeled powered cycle rickshaws; and Rear Tractor tyre tubes]
4017	Hard rubber (for example ebonite) in all forms, other than waste and scrap; articles of hard rubber
4203	Articles of apparel and clothing accessories, of leather or of composition leather
8427	Fork-lift trucks; other works trucks fitted with lifting or handling equipment
8428	Other lifting, handling, loading or unloading machinery (for example lifts, escalators, conveyors, teleferics)
8483	Crank shafts for sewing machine; bearing housings, incorporating ball or roller bearings, bearing housings, not incorporating ball or roller bearing; gears and gearing, other than toothed wheels, chain sprockets and other transmission elements presented separately; ball or roller screws;
8484	Gaskets and similar joints of metal sheeting combined with other material or of two or more layers of metal; sets or assortments of gaskets and similar joints, dissimilar in composition, put up in pouches, envelopes or similar packings; mechanical seals

• Rates reduced on several goods from 28% to 12%
• Some of the tariff headings where rates have been reduced from 28% to 12% are as under:

Chapter/ Heading/ Sub-heading/ Tariff item	Description
8509	Wet grinder consisting of stone as a grinder
8710	Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons, and parts of such vehicles

• Rates reduced on several goods from 18% to 12%,

Some of the tariff headings where rates have been retained as 28% are as under:

Chapter/ Heading/ Sub-heading/ Tariff item	Description
8415	Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated
8525	Digital cameras and video cameras recorders [other than CCTV]
8702	Motor vehicles for the transport of ten or more persons, including the Driver
8704	Motor vehicles for the transport of goods [other than Refrigerated motor vehicles]
8706	Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705
8711	Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars

• Rates reduced on several goods from 18% to 12%,

Some of the tariff headings where rates have been reduced from 18% to 12% are as under:

heading/ Tariff item	Description
2106 90 91	Diabetic foods
0402 91 10, 0402 99 20	Condensed milk
2804 40 10	Medicinal grade oxygen
3215	Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid [(other than Fountain pen ink and Ball pen ink)]
4202 22 20	Hand bags and shopping bags, of cotton
4202 22 30	Hand bags and shopping bags, of jute

• Rates reduced on several goods from 18% to 5%,

Some of the tariff headings where rates have been reduced from 18% to 5% are as under:

Heading/ Sub-heading/ Tariff item	Description
1704	Puffed Rice Chikki, Peanut Chikki, Sesame Chikki til chikki, til patti, til revdi, sugar makhana, gajak, groundnut sweats Khaja, Khajuli, Anarsa, sakar, khadi sakar, harda, sakariya, gatta, kuliya, elaichidana, lukumdana
2503 00 10	Sulphur recovered as by-product in refining of crude oil
2621	Fly ash

• Rates reduced on several goods from 12% to 5%,

Some of the tariff headings where rates have been reduced from 12% to 5% are as under:

Chapter/ Heading/ Sub-heading/ Tariff item	Description
0801	Desiccated Coconut
4114	Chamois (including combination chamois) leather; patent leather and patent laminated leather; metallised leather
5607	(a)Coir, cordage and ropes and (b) Jute Twine
9507	Fishing hooks

• Similarly, rate of GST on some goods came down to nil.

Some of the tariff headings where rates have been reduced from 5%/3% to Nil are as under:

Chapter/ Heading/ Sub-heading/ Tariff item	Description
1701	Khandsari sugar
7113	Bangles of lac / shellac
0714	Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, dried, whether or not sliced or in the form of pellets
1210 10 00	Hop cones, neither ground nor powdered nor in the form of pellets

• In respect of services, stand-alone restaurants irrespective of being air conditioned or otherwise, would be liable to GST at the rate of 5%, without the facility of input tax credit (ITC).
• Restaurants in hotel premises having room tariff of less than Rs. 7500 per unit per day are also covered under this rate of tax, without ITC.

♠ Exemption to tax payment at time of receipt of advance–  No. 66/2017-Central Tax, dated 15-11-2017 to exempt all registered persons [except taxpayers who opted for composition levy under Section 10 of CGST Act] from payment of tax on advances received in case of supply of goods.

♠ Registration exemption to specified service provider providing service through electronic commerce operator– This exemption is available to service providers having an aggregate turnover of less than Rs. 20 lakh (Rs. 10 lakh in case of special category States) in a financial year.

♠ Reduced rate of GST for specified supplies to research institutions, etc. (Effective form 15-11-2017)– Notification No. 45/2017-Central Tax (Rate), dated 14-11-2017 has been issued to provide for 2.5% CGST on specified goods supplied to public funded research institutions, universities, IITs, NITs, IISC (Bangalore), research institutions, departments and laboratories of Central / State Governments and Regional Cancer Center (Cancer Institute). This list excludes hospitals

♠ IGST exemption to inter-State movement of rigs, tools and spares– Inter-State movement of such goods between distinct persons shall be treated neither supply of goods nor supply of services and no IGST will be levied. Circular No. 21/21/2017-GST, dated 22-11-2017 issued, however notes that such exemption will not be available if movement is for further supply of such goods, and that GST will be payable on repairs and maintenance of such goods.

♠ EOUs –Procedure for procurement from DTA– CBEC has prescribed procedure and safeguards in respect of supply of goods to EOU, in order to ensure smooth processing of refund claims in respect of such deemed exports. EOU in this regard is required to intimate, in a prescribed form, to the registered supplier and to jurisdictional officers of the supplier and that of EOU. As per Circular No. 14/14 /2017-GST, dated 6-11-20017, tax invoice as endorsed by EOU will be considered as proof of deemed export supplies made by the registered supplier to the EOU.

♠ Refund of unutilised ITC in case of export of fabrics, available– Manufacturer of fabrics is eligible for refund of unutilized ITC of GST paid on inputs (other than ITC of GST paid on capital goods) in respect of fabrics manufactured and exported by him. Circular No. 18/18/2017-GST, dated 16-11-2017 clarifying this, observes that restriction on refund of unutilised ITC under Notification No.5/2017-Central Tax (Rate) would not apply to zero rated supplies.

♠ Terracotta idols eligible for nil GST rate– Tax Research Unit of the Ministry of Finance has clarified that as terracotta is clay based, terracotta idols will be eligible for Nil rate under Sl. No.135A of Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, which prescribes nil rate for clay idols. Circular No. 20/20/2017-IGST, dated 22-11-2017.

Milling of paddy into rice liable to GST– Circular No. 19/19/2017-GST, dated 20-11-2017 issued by Ministry of Finance clarifying that milling of paddy into rice on job work basis is liable to GST at the rate of 5%, on the processing charges (and not on the entire value of rice) under Sl. No. 26 of Notification No. 11/2017-Central Tax (Rate). According to this circular milling of paddy is not an intermediate production process in relation to cultivation of plants.

Customs

♠ IGST payable on goods transferred or sold while being in bonded warehouse– Transfer of goods deposited in a customs bonded warehouse, by importer to another person, would attract IGST at the value determined as per Section 20 of IGST Act read with Section 15 of CGST Act and the rules made there under. According to CBEC Circular No. 46/2017-Cus., such transfer will amount to inter-State supply of imported goods, as it takes place before the goods cross customs frontiers of India

♠ Drawback –CBEC rescinds Circulars prescribing monetary limits for drawing of samples– CBEC has rescinded Circular Nos. 34/95-Cus., 57/97-Cus., and 25/2005-Cus. prescribing monetary limits with respect to drawing of samples for grant of drawback and for giving exemptions from sampling requirements in certain situations. Circular No. 47/2017-Cus., dated 27-11-2017.

♠ Electronic sealing of export containers postponed– Considering insufficient stock of e-seals with the notified vendors, CBEC has postponed implementation of mandatory e-sealing of export containers. E-sealing will be mandatory from 15^th of December, 2017 for exporters who have been permitted self-sealing facility, AEO exporters, and exporters availing supervised stuffing at their premises for 15 specified ports and ICDs. CBEC Circular No. 44/2017-Cus., dated 18-11-2017 also states that e-sealing procedure for full container load stuffed at approved premises would be mandatory from 1-1-2018 for all ports/ICDs.

♠ Refund of IGST on exports –CBEC identifies certain issues made by exporters and prescribes solutions while filing GSTR-1 and Shipping Bills, affecting disbursal of IGST refunds. Circular No. 42/2017-Cus., dated 7-11-2017 notes that in case incorrect Shipping Bill number has been mentioned in GSTR-1 of July, 2017, the same can be amended by mentioning the correct Shipping Bill number in Table 9A of GSTR-1 of August. Exporters have also been asked to fill details of zero rated supplies in Table 6A in GSTR-1 through utility provided at https://gst.gov.inin respect of exports in August 2017. Press release dated 29^th November 2017 has also been issued regarding the Refund of IGST paid on goods exported out of India & unutilized Input Tax Credit on inputs or input services used in making the exports.

♠ IGST exemption to imports under lease– All goods, vessels, ships (other than motor vehicles) imported under lease, by the importer for use after import have been exempted from IGST payable at the time of import, subject to specified conditions. Notification No. 85/2017-Cus., dated 14-11-2017 amends Notification No. 50/2017-Cus., while also granting exemption from BCD and IGST to lifesaving drugs/medicines for personal use, supplied free of cost by overseas supplier subject to conditions including that the goods are imported by individual for personal use.

♠ Ready made garments and made-ups –MEIS rates enhanced– Rates of incentive provided by the government under Merchandise Exports from India Scheme (MEIS) for export of ready made garments and made-ups have been revised upwards. According to DGFT Public Notice No. 42/2015-20, dated 24-11-2017, this increase from 2% to 4% is valid from 1-11-2017 till 30-6-2018.

♠ Dumpers for coal mines eligible for Project Import benefit– CBEC has clarified that dumpers designed for mining activities and to be used in coal mines are eligible for Project Import benefits if same is certified by concerned sponsoring authority. Instruction No. 17/2017-Cus., dated 20-11-2017.

♠ Pulses exports –Prohibition removed– All varieties of pulses, including organic pulses, have been made ‘free’ for export without any quantitative ceilings if exports are made through EDI ports. DGFT Notification No. 38/2015-20, dated 22-11-2017 issued in this regard however notes that for export through non-EDI Land Custom Stations (LCS) on Indo- Bangladesh and Indo- Nepal border, the exporter will have to do prior-registration of quantity with DGFT.

♠ Drawback in case of inter-unit transfer of raw material between SEZ units– Calcutta High Court has held that Rule 22(2) or Rule 34 of the Special Economic Zone Rules, 2006 was not violated even if the raw materials brought into one unit are utilized in the manufacture of goods in another unit of the assessee in the SEZ and exported there from.

[Kariwala Industries Limited v. Development Commissioner-2017-VIL-579-CAL-CU].

♠ Valuation –Different prices when description of goods same– CESTAT Chennai has allowed the appeal of assessee in a valuation dispute where the importer had declared different prices for the goods having the same description. [Amoog Chemicals v. Comm.-2017-TIOL-4165-CESTAT-MAD].

Central Excise and Service Tax

♠ Budgetary support (Refund) for units earlier availing area-based exemption– CBEC has issued Circular No. 1060/9/2017-CX, dated 27-11-2017 prescribing procedure for manual filing and processing of refund claims (budgetary support claims) relating to first quarter ending Sept., 2017, by units which were earlier availing area based exemption. Refund of GST is limited to 58% of CGST or 29% of IGST paid in cash

Refund of Education Cess under area based exemption– Supreme Court of India has allowed refund of Education Cess and Secondary and Higher Secondary Education Cess which were paid along with Central Excise duty, once said excise duty itself was exempted in case of units located in North-East States and in J&K.

[SRD Nutrients Private Limited v. Commissioner–Judgement dated 10-11-2017 in CA Nos. 2781-2790/2010 and others, Supreme Court]

♠ Cenvat Rule 6 –Sale of items recovered during ship breaking is not trading– CESTAT Mumbai has dismissed the appeal filed by the Revenue department against dropping of demand under Rule 6 for reversal of credit on items like motors, generator, engine, remnant oil etc., cleared by assessee after breaking of the ship.

[Commissioner v. Arya Corporation–Order dated 27-10-2017 in E/85915/17, CESTAT Mumbai]

♠ Cenvat credit on security service for transit of goods when not admissible– In a case where assessee was not including the value of freight and insurance incurred on transportation of goods to the buyer’s premises in the value of the goods, Mumbai Bench of the CESTAT has held that Cenvat credit of service of security guard availed for transit of goods from the factory to the buyer’s premises was not admissible. It was held that the contention that buyer’s premises should be treated as place of removal, was, therefore, not sustainable.

[Bharat Bijlee Ltd. v. Commissioner–Order dated 27-10-2017 in E/86540/17, CESTAT Mumbai]

♠ Cenvat Rule 6 and Central Excise Rule 57CC are significantly different– Dismissing the appeal filed by the assessee against the demand under Cenvat Credit Rule 6 where clearances were made while availing benefit of Notification No. 12/2012-C.E., CESTAT Mumbai has held that provisions of Rule 57CC of Central Excise Rules, 1944 are not the same as Rule 6(6) of Cenvat Credit Rules, 2004.

[Kelvion India Pvt. Ltd. v. Commissioner–Order dated 27-10-2017 in E/86678/17, CESTAT Mumbai]

♠ Cenvat Credit of tax paid on rent of dealer’s premises when available– Bangalore Bench of CESTAT has allowed appeal of the assessee in respect of Cenvat credit of Service tax paid on rent of dealer’s premises and on security services availed for such premises.

[Meyer Organics Pvt. Ltd. v. Commissioner-2017-VIL-938-CESTAT-BLR-ST]

♠ Area based exemption –Computation of value addition– CESTAT Chandigarh has held that when an amount of duty was refunded to the assessee, under Notification No. 1/2002-C.E., the same had to be deducted from the Central Excise duty paid by the assessee while arriving at actual value addition. [Kangaro Industries Limited v. Commissioner-2017-VIL-935-CESTAT-CHD-CE]

♠ Export of service –SMS aggregator service to foreign company within India– CESTAT Mumbai has allowed refund of unutilised Cenvat credit when SMS aggregator service was provided by the assessee to foreign company (Facebook) for its subscribers in India.

[Commissioner v. Gupshup Technology India Pvt. Ltd.-2017-VIL-932-CESTAT-MUM-ST]

♠ “Cheeselings” and “Musst Bites” edible preparations eligible for exemption as “Namkeen”– Observing that there was no definition of ‘namkeen’, and that it cannot be concluded that the product is a ‘namkeen’, on the basis of whether the goods are fried or otherwise, CESTAT Mumbai has held ‘Cheeselings’ and ‘Musst Bites’ as ‘namkeen’.

[Parle Products Pvt. Ltd. v. Commissioner-2017-VIL-914-CESTAT-MUM-CE].

VAT

♠ Rectification in Returns –Regularization of technical omissions to ensure tax compliance– In a case involving denial of rectification of some errors in the returns filed by the assessee, which came to light after an audit, Kerala High Court has held that the mere apprehension, that if the assessee was permitted to pay differential tax, he might claim input tax credit, cannot be a ground to deny the opportunity to rectify an anomaly in the returns. It was held that since the assessee voluntarily came forward to rectify omissions, his action cannot be said to be pursuant to detection of any suppression by the Department.