In this edition, we highlight key case laws, the tax notifications in the last month followed by a detailed analysis of certain cases from a taxation law perspective.
It covers cases pertaining to wrong usage of GSTIN, entities availing services of Indian and foreign banks at the same time, unlawful confiscation of goods and excise and service tax.
NOTIFICATIONS
- COVID-19 vaccine exemption from Basic Custom Duty ("BCD") till
31/03/23 vide Notification No. 01/2023-Customs under this notification the Central Government will exempt the COVID-19 Vaccine from basic Custom Duty from the 14th of January, 2023 till the 31st of March, 2023. - Central
Board of Indirect Taxes and Customs ("CBIC") amends Notification No. 57/2000 - Customs, dated 8/05/2000, substituting the duty from 6.1% to 9.35% for Gold, vide Notification No. 09/2023- Customs, shall come into effect from the 2nd of February, 2023. - Amendment in Circular No.29/2020- Customs dated
22/06/2020 has been issued by CBIC to allow for the transhipment ofBangladesh export cargo to third countries via Delhi Air Cargo. - CBIC exempts BCD on Ship/Vessel breaking activity, vide Notification No. 13/2023-Customs, this notification shall come into effect from the 24th of February, 2023.
- Amendment in Special Additional Excise Duty on production of Petroleum Crude and export of Aviation Turbine Fuel ("
ATF "), vide Notification No. 08/2023-Cemtral Excise dated15th February, 2023 , the Notification reduces the Additional Excise Duty on Petroleum Crude fromRs. 17,000 per tonne toRs. 4,350 per tonne while increasing the duty onATF fromRs. 4 per litre toRs. 1.5 per litre. - Exemption of CNG compressed with
Biogas or Compressed Biogas ("CBG") from so much of the duty leviable on amount of Goods and Service Tax ("GST") paid on CBG, vide Notification No. 05/2023-Central Excise, the Notification subjects the exemption to the following three conditions; -
Maintain detailed records regarding the quantum of
Biogas or CBG blended with CNG, along with the value thereof, at the registered premises; - Submit a reconciliation statement, certified by the statutory auditor to the jurisdictional Commissioner of Central Excise by the 10th of the month following the quarter; and
- Pay the short-paid duty of excise along with applicable interest after such reconciliation.
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Maintain detailed records regarding the quantum of
- Amendment of Special Additional Excise Duty on Diesel, vide Notification No. 07/2023, the Notification changes the duty to
Rs. 1 per litre. - One time relaxation for furnishing additional fee to cover excess imports affected under the Export Promotion Capital Goods Scheme ("EPCG"), vide Notification No. 58/2015-2020, this notification allows a one-time relaxation in procedure for acceptance of fees for excess duty utilisation under the EPCG Scheme.
CASELAWS
M/S Wipro Limited India v. Assistant Commissioner of Central Taxes (
The Petitioner supplied goods to
The Petitioner's appeal was granted by the
The Appellant is a manufacturer and exporter of bulk drugs. They avail the services of both foreign and Indian banks to realize export proceeds from buyers outside
The Appellant relied on Circular No. 20/2013-14-ST-I (issued by the Commissioner of ST-I, Mumbai T.N. on 10.02.2014), which analyzed URC 522 (Uniform Rules for Collection) and UCP 600 (Uniform Customs & Practice for Documentary Credits) and summarized their implications. The Circular observed that there is an implicit agreement between the
Arvind Goyal CA vs.
The Petitioner had challenged the search operation as unlawful and contended that the concerned officers could have no reason to believe that any goods liable for confiscation were lying on the Petitioners' premises. The Petitioner contended that the GST officers had no power to seize any cash in the exercise of their powers under Section 67(2) of the CGST Act. Further, the power under Section 67(2) of the CGST Act to seize goods could be exercised only if the goods were liable for confiscation. The documents, books, or things could be seized only if they are useful or relevant to any proceedings under the CGST Act. The Petitioner urged that currency is excluded from the definition of goods and thus, cannot be seized. The currency is also not useful or relevant for conducting any proceedings, and therefore, there is no question of seizing currency in the exercise of Section 67(2) of the CGST Act. The Department contended that the officers had merely "resumed" cash. Therefore, it cannot be considered a seizure.
The Hon'ble
In this case, 'All ¬in ¬One Integrated Desktop Computer' imported by
The Hon'ble Court noted that the adjudicating authorities, especially the Commissioner of Customs (Appeal), in their orders, have extensively referred to online sources such as Wikipedia to support their conclusion. The Hon'ble Court noted that, in Commissioner of Customs, Bangalore v
Black Box Limited Versus Commissioner of Central Excise & ST, Ahmedabad-iii (CESTAT, Ahmedabad Service Tax Appeal No. 572 of 2012-DB judgment dated 04.01.2023)
The Appellant was dealing in Electronic and Telecom equipment. In its business, the Software was embedded in the telecom equipment systems of EPABX. On scrutiny of the Balance Sheet of the Appellant, it was revealed that the Appellant has shown a certain amount as "Software Activation" income and it had collected the charges from their customers in connection with after sales of goods i.e. equipment / software. The Appellant was issued three show cause notices as to why the activity of selling software should not be treated as taxable services under the category of "Business Auxiliary Services" under Section 65 of the Finance Act, 1994 and consequently, the service tax should not be demanded under Section 73(1) along with interest.
The Appellant contended that service tax is levied when taxable service is provided by the service provider to his client(s). The purchase of goods from the appellant is not a service and such customer / buyer of goods cannot be treated as a recipient of service. The Appellant is not a provider of service, but only a seller of goods liable to Sales Tax / VAT which is paid. The Appellant urged that a transaction of sale of software is clearly a sale of "goods" within the meaning of the term as defined in the CST Act and Gujarat Value Added Tax Act 2003.
Thus, the issue raised was whether the Appellant is liable to pay service tax on "Software Activation Charges" under the taxable services of "Business Auxiliary Services".
The Hon'ble Tribunal held that the "activation charges" of equipment/ software features are covered under the activity of sales of goods and not covered under the provisions of "Service". It was observed that if the software, whether customized or non-customised, satisfies the Rules as "goods", it will also be "goods" for the purpose of Sales tax. Goods may be tangible properties or intangible ones. It would become goods provided it has the attributes having regard to its utility; capable of being bought and sold; and capable of being transmitted, transferred, delivered, stored, and possessed. Thus, the Hon'ble Tribunal held that service tax is not payable on the software activation charges.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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