Disclaimer:

This publication contains information for general guidance only. It is not intended to address the

circumstances of any particular individual or entity. Although the best of endeavour has been made to

provide the provisions in a simpler and accurate form, there is no substitute to detailed research with

regard to the specific situation of a particular individual or entity. We do not accept any responsibility for

loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

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Case Laws

Two Persons arrested for involving in fake invoices racket &fraudulently availing Input Tax Credit

E-Invoice System concept note, Standard, Schema and Template.

The GST Council has approved introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting

of business to business (B2B) invoices to GST System, starting from 1st January 2020 on voluntary basis. Since there

was no standard for e-invoice existing in the country, standard for the same has been finalized after consultation with

trade/industry bodies as well as ICAI after keeping the draft in public place. Having a standard is a must to ensure

complete inter-operability of e-invoices across the entire GST eco-system so that e-invoices generated by one software

can be read by any other software, thereby eliminating the need of fresh data entry – which is a norm and standard

expectation today. The machine readability and uniform interpretation is the key objective. This is also important for

reporting the details to GST System as part of Return. Apart from the GST System, adoption of a standard will also

ensure that an e-invoice shared by a seller with his buyer or bank or agent or any other player in the whole business eco-

system can be read by machines and obviate and hence eliminate data entry errors.

The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along

with schema has been published on GST portal. Standards are generally abstruse and thus an explanation document is

required to present the same in common man’s language. Also, there are lot of myth or misconception about e-Invoice.

The present document is an attempt to explain the concept of e-invoice, how it operates and basics of standards. It also

contains FAQs which answer the questions raised by people who responded to the draft e-invoice standard used for

public consultation. It is expected that the document will also be useful for the taxpayers, tax consultants and the

software companies to adopt the designed standard.

CBIC has issued following Notifications on 9th

October 2019 under CGST Act, 2017 Read with

CGST Rules, 2017. All the notifications have great

implications on the organization as a whole

Analysis of Notification No. 49/2019 – Central Tax

Government orders biggest review of GST since its launch

States losing revenue

� After 2 years after its launch, the government has begun the

biggest review of GST - including a possible resetting of rates

along with a scrutiny of the slabs-to tone up collections and

plug leakages.

� The task has been assigned to a 12-member committee of

state and central government officials to "augment GST

collection and administration", set up a day before the PMO

leads consultations with state chief secretaries on Friday,

where it is expected to urge them to push for improved

collections.

� The terms of reference indicate the panel should suggest

systemic changes to prevent misuse, improve voluntary

compliance, boost overall compliance monitoring and suggest

anti-evasion measures. With inverted duty structure proving

to be a source of leakage in sectors like restaurants, sources

told TOI that the rates may be reviewed.

Finance Minister Sitharaman seeks tax experts' inputs to correct

GST flaws

� Conceding that GST may have some flaws in its present

form, finance minister Nirmala Sitharaman on 11th

October 2019 asked tax professionals not to curse it and

sought their help to make it better.

� The minister was replying to the concerns raised by

taxation industry professionals here, who said the industry

was "cursing" the government over how the GST was

implemented.

� Billed as the biggest reform in indirect taxation, the goods

& services tax, which does away with a host of levies from

the federal to the local government levels, was

implemented in July 2017.

� On several stakeholders "cursing" GST, Sitharaman even objected to a person who raised the question, and asked him not to

damn the law which was passed by Parliament and all the state assemblies.

� "After a long time, many parties in Parliament and in state assemblies worked together and came up with the Act. I know

you are saying this based on your experiences but suddenly we cannot call 'what a goddamn structure it is'," the minister

said.

� She interacted with people from industries, chartered accountants, company secretaries and many other stakeholders in the

financial sector.

� Stating that it has been only two years since GST was implemented, she said she would have wished the new structure was

satisfactory from day one. She also said she wants all stakeholders to give some solutions for better compliance. "We cannot

damn it might have flaws, it might probably give you difficulties but I am sorry, it is the law of the land," she added.

� "Yes, GST collection in some areas has not been strong enough. Various districts in Maharashtra, Karnataka, Himachal, and

Uttarakhand were flooded and we had to postpone filing returns from these areas," she said.

� She also said the revenue secretary has already formed a committee to indentify where collection has not been adequate as

per our expectation.

� "We have some reports on how in some cases evasion has happened. The committee will look into how this can be plugged

and if there has been any under-invoicing," she said.

Govt explores ways to revive GST collections

� During the day, finance minister Nirmala Sitharaman met

businessmen and chartered accountants in Pune.

� “We just can’t damn GST now. It has been passed in

Parliament and in all state assemblies. It might have flaws,

it might probably give you difficulties but I’m sorry, it’s the

‘kanoon’ of the country now,

� The GST Council has already resisted pressure from

industries like automobiles for rate cuts and also raised

the rate on caffeinated drinks when it met last month. It

has taken a series of steps to step up revenue collection

using the full potential of technology.

Duty-free shops at Mumbai airport eligible for GST input tax credit

refund: Bombay HC

� Observing that the GST regime is based on 'one nation, one

tax theory', the Bombay High Court quashed a Maharashtra

Sales Tax order that had refused refund of input tax credit

to the duty-free shops at the Mumbai international airport.

� Noting that these shops are eligible to get refund of the

input tax credit on the entire amount of Goods and Services

Tax (GST) paid, the high court said the imposition of local

taxes on these outlets would hamper foreign trade.

� A division bench of justices Ranjit More and Bharati Dangre quashed and set aside the January 10 order passed by the

Deputy Commissioner of Sales Tax (Mumbai) refusing to refund the input tax credit to the petitioner (owner of duty free

shops in Mumbai International Airport Limited-MIAL) pursuant to the sale of duty-free goods from the shops at the

departure area of the airport.

� The bench noted that the previous order was arbitrary and against the provisions of Article 286 of the Constitution.

� Under this article, no state shall impose tax on supply of goods that takes place outside of the state territory and in cases

where the supply is made in the course of import into India or in the course of export out of India.

� Under this article, no state shall impose tax on supply of goods that

takes place outside of the state territory and in cases where the

supply is made in the course of import into India or in the course of

export out of India.

� In its order dated October 7, the high court bench noted that if a

duty free shop, which caters to international passengers, is

subjected to local taxes by the state then the price of the goods,

which are supposed to be free of taxes and duties, will go up.

� "This would prevent the duty free shops in India from competing

with the duty-free shops at international airports elsewhere in the

world. This will hamper and prejudicially affect our foreign trade,

and augmentation and conservation of foreign exchange," the court

stated.

� Challenging the sales tax order, the petitioner argued in the high court that duty-free shops at the Mumbai

international airport cannot be saddled with burden of taxes or restrictions.

� The petitioner had told the court that they get refund of input tax credit pursuant to sales from their other duty free

shops in the departure area of other international airports within India.

� "The GST regime is based on 'one nation, one tax theory'. The authorities in the state of Maharashtra cannot give a

discriminatory treatment, particularly when the refund has been and is being granted in several other states," the

bench said in its order.

� What is the appropriate classification of Nicotine Polacriliex Lozenge (hereinafter referred to as “NCT”) manufactured by the

Company and rate of tax applicable thereupon under Notification 01/2017-Central Tax (Rate), dated 28-06-2017???

� The Applicant claims the classification of their product under heading 30.04 and the

resultant benefit of entry No. 63 of Schedule II of Notification No. 01/2017 dated

28.06.2017, effective from 01.07.2017.

� The chapter Notes and Explanatory Notes provide that preparation intended to

assist smokers to stop smoking shall be covered by heading 21.06 or 38.24.

� AAR find that Chapter 21 deals with miscellaneous edible preparations and heading

21.06 deals with food preparations not elsewhere specified or included. The instant

product basically consists of nicotine which is not an edible/food preparation.

� Therefore, the only alternative left for the classification of the instant product is

chapter 38.24

GST ADVANCE RULING ON “NICOTINE POLACRILIEX LOZENGE”

Strides Emerging Markets Limited

� The Applicant is pharmaceutical company engaged in the

development and manufacture of generic and IPled

niche pharmaceutical products. Also, the applicant is

registered as 100% EOU in Karnataka. The applicant has

developed a new product “Narcotic Chewing Tablet”

which is used to wean off the withdrawal symptoms

associated from the narcotic consumption cessation.

� In this case the assessee was making inter-State purchases of High Speed

Diesel Oil on concessional rate of tax by way of Form‘C’ and after

introduction of GST regime, Department’s site had been blocked to deny

access to assessee and other similarly placed persons from downloading

Form ‘C’, GST Authorities were directed to permit assessee to download

Form‘C’ and take necessary action in this regard

HC directed department to take necessary action where downloading of C-Form has been blocked post GST

introduction

� Rate of GST applicable on a supply made by applicant of

desktops consisting CPU, monitor, keyboard and mouse

classifiable under Heading No. 8471 is taxable at rate of 9per

cent CGST as per Notification No. 01/2017-C.T. (Rate),dated 28-

6-2017 and 9 per cent SGST under Notification No.

II(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72, dated 29-6-

2017as amended if all units are supplied together with CPU in a

single supply

Desktop Supply with CPU, Monitor, Keyboard & Mouse together is a single supply taxable @ 18% GST

� The Circular further explains in relation to the specific issue of

ambulance service to the Government by a private service

provider (PSP) that such service is a function of 'public health'

entrusted to Municipalities under Art 243W of the Constitution,

and, therefore, eligible for exemption under SL No. 3/3A of the

Exemption Notification

� 'Security services' provided to Government Hospitals and Medical

Colleges are not covered under the either lists. 'Cleaning and

sweeping services' can be considered as related to the function

listed under Sl No. 26 of the Eleventh Schedule, namely "Health

and sanitation, including hospitals, primary health centres and

dispensaries", provided 'sanitation service', as classified under

SAC 99945, includes sweeping and cleaning of places like hospitals

etc

� 'Sanitation and similar services', classified under SAC 99945,

includes sweeping and cleaning, but only with reference cleaning

of a road or street. Cleaning of hospital premises is not, therefore,

classified under ‘Sanitation or similar service'.

� Benefit of exemption from the payment of GST is not available to

the Applicant under Notification No 12/2017 dated 28.06.2017

and SG Notification-1136-FT dated 28.06.2017, as amended, for

the supply of security services and cleaning and sweeping

services.

� The Applicant is stated to be supplying facility management

services like mechanized and manual cleaning, housekeeping,

security services etc. to various CG/SG hospitals.

� Whether exemption from payment of GST is available for such

supplies in terms of Notification No 12/2017 dated 28.06.2017

and WB Govt. Gazette Notification-1136-FT dated 28.06.2017.

� AAR observed that in the Circular No. 51/25/2018-GST dated

31/07/2018 the Central Government clarifies that the service

tax exemption under SL No. 25(a) of Notification No. 25/2012

dated 20/06/2012 has been substantially, although not in the

same form, continued under GST vide SL No. 3 and 34 of the

Exemption Notification. SL No. 25(a) of the ST notification under

the service tax exempts "services provided to the Government,

a local authority or a governmental authority by way of water

supply, public health, sanitation, conservancy, solid waste

management or slum improvement and up gradation."

ADVANCE RULING ON “CLEANING SERVICES TO HOSPITALS”- Altabur Rahaman Mollah

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