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published on 31 July 2023 | Reading time approx. 8 minutes

IDT Developments and Associated Procedures

1. Agenda for the 50th GST Council Meeting:

It is expected that the upcoming 50th GST council meeting is likely to be held on 11 July 2023. The major agenda of the said meeting are as follows.
  • Setting up of GST Appellate Tribunals (GSTAT);
  • Increase in the GST rate on online gaming, casinos, horse racing and purchase of MUV and XUV.
  • Decrease in the GST Rates on Food and Beverages sold inside cinema halls, medicines, etc.
  • Introduction of tighter norms to put a check on fake registrations.


2. Apex Court upholds the constitutional validity of the imposition of 'pre-import' condition in order to avail the exemption of IGST and compensation cess under the Advance Authorisation scheme:

The Hon'ble Supreme Court in the case of Cosmo Films Ltd. [2023] 149 taxmann.com 473 has upheld the constitutional validity of the imposition of 'pre-import' condition in order to avail the exemption of IGST and compensation cess under the Advance Authorisation scheme. The Apex Court also directed the department to issue a circular providing appropriate procedure to be followed in order for the respondent to claim refund or input tax credit.

Pursuant to such directions, the CBIC has issued Circular No. 16/2023-Customs dated 7 June 2023 which has been made applicable not only to the Cosmo Films Limited but also to all assessees who intend to regularise the failure to fulfil 'pre-import condition' by paying applicable IGST and Cess.

3. Hon’ble Madhya Pradesh High Court holds that the recipient should not suffer due to the error made by supplier in while filing GST returns:

In the case of Agarwal Brothers [Writ Petition No.14297 of 2020], the petitioner has procured iron scrap from the Railway Department. The Railway department has reported the said supply with incorrect GSTIN, due to which the credit is not reflected in GSTR-2A/2B of the recipient. The petitioner was served with SCN for wrong availment of ITC. Petitioner has paid the taxes along with interest under protest. 

The Hon’ble High Court noted that in the present case, it was admitted by supplier that inadvertently amount of GST was deposited and reflected in wrong GSTIN instead of assessee's GSTIN. The Court further noted that it is a settled law that no one can’t be made to suffer for fault of another. Therefore, it was held that assessee would be entitled to get refund from department and the Court directed department to return amount to assessee.


Important GST Notifications and Circulars issued during the Quarter

1. Applicability of e-invoicing:

Vide Notification No. 10/2023 – Central Tax dated 10 May 2023, with effect from 1 August 2023, every registered taxable person whose aggregate annual turnover exceeds INR 50 million in any of the preceding financial year from FY 2017-18 shall be liable to issue e-invoice as per prescribed rules. 

2. Clarifications issued by way of Circulars/Instructions:

  • Vide Instruction No. 01/2023-GST dated 4 May 2023, the CBIC has issued guidelines by launching a special drive during the period 16 May 2023 to 15 July 2023 to detect suspicious/ fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST eco-system and to safeguard Government revenue.
  • Vide Instruction No. 02/2023 – GST dated 26 May 2023, the CBIC has prescribed Standard Operating Procedure for Scrutiny of Returns for FY 2019-20 onwards.
  • Vide Instruction No. 03/2023 – GST dated 14 June 2023, the CBIC has issued guidelines for strengthening the process of verification of applications for registration at the end of tax officers in a uniform manner.

Customs and Foreign Trade Policy related developments

1. Amnesty Scheme for one-time settlement of default in export obligation by Advance & EPCG authorization holder:

Vide Public Notice No. 02/2023 dated 1 April 2023, one time facility was provided for grant of Export Obligation Discharge Certificate/ regularization of cases of Export Obligation default of Advance Authorization and EPCG authorizations under “Amnesty scheme for one time settlement of default in export obligation by Advance and EPCG authorization holders.” The said notice is amended vide Public Notice No. 07/2023 dated 18 April 2023, to clarify the duties on which interest is payable. Policy Circular No. 01/2023-24 & Policy Circular No. 02/2023-24 dated 17 April 2023 and 23 June 2023 respectively, provides the procedure for this scheme along with all the clarifications w.r.t. coverage of the scheme, time limit to apply, authorization holder ineligible to apply for such scheme, benefits under the scheme have been explained in detail in such policy circular.  

Certain Customs Notifications were amended vide Notification No. 32/2023 – Customs (Tariff) dated 26 April 2023 in order to implement Amnesty Scheme for one time settlement of default in export obligation by Advance and EPCG authorization holders and clarification is also issued vide Circular No. 11/2023 – Customs dated 17 May 2023 in this regard.

2. Duty exemptions under Advance Authorization Scheme under FTP 2023:

Paragraph 4.03 of the Foreign Trade Policy 2023 allows duty free imports of input, which is physically incorporated in export product, if the exporter holds an advance authorization license. In this regard CBIC has issued Notification No. 21/2023 – Customs (Tariff) dated 1 April 2023 exempting BCD, SWS & IGST on materials imported into India against a valid Advance Authorization issued under Para 4.03 of FTP 2023, subject to the conditions prescribed under the said Notification.

Similarly, Notification No. 22/2023 – Customs (Tariff), Notification No. 23/2023 – Customs (Tariff) and Notification No. 24/2023 – Customs (Tariff) each dated 1 April 2023 provides exemption and related conditions for Advance Authorization Scheme for deemed export, Advance Authorization Scheme for annual requirement and Advance Authorization Scheme for export of prohibited goods respectively. 

Further, vide Notification No. 27/2023 – Customs (Tariff) dated 1 April 2023, CBIC has exempted fabrics (including interlining) imported into India against a valid Special Advance Authorization issued under Para 4.04A of FTP 2023 from whole of BCD, SWS & IGST subject to the conditions prescribed under the said Notification.

3. Duty exemptions under Export Promotion Capital Goods Scheme under FTP 2023:

Vide Notification No. 26/2023 – Customs (Tariff) dated 01 April 2023, the CBIC has exempted BCD, SWS & IGST on materials imported into India against a valid Authorization issued by the Regional Authority in terms of Chapter 5 of the Foreign Trade Policy, subject to the conditions prescribed under the said Notification

4. Amendments in schemes for Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL):

Vide Notification No. 24/2023 – Customs (NT) dated 1 April 2023, CBIC has notified the manner of issue of duty credit for goods exported under RoDTEP scheme. This amendment has prescribed the conditions to claim the scrips, cancellation of the scrip, recovery of the amount of duty credit scrip and recovery of the amount of duty credit where export proceeds are not realized. Similar notification has been issued for duty credit for goods exported under RoSCTL scheme vide Notification No. 25/2023 – Customs (NT) dated 1 April 2023. 

5. Extension of the benefit of exemption granted on deposits in Electronic Cash Ledger under Section 51A:

CBIC has earlier exempted the deposits w.r.t goods imported or exported in customs stations where customs automated system is not in place or w.r.t accompanied baggage, from all the provisions of Section 51A of the Customs Act till 30 June 2023. The said exemption got extended till 1 October 2023 vide Notification No. 48/2023-Customs (NT) dated 30 June 2023. 

Further, Notification No. 49/2023 - Customs (NT) dated 30 June 2023 exempts deposits with respect to goods imported or exported in customs stations where customs automated system is not in place, goods imported or exported in International Courier Terminals, accompanied baggage, from all the provisions of Section 51A till 30 September 2023. 

6. Other clarifications and guidelines issued by way of Circulars:

  • Authorized Economic Operator (AEO) program is launched by CBIC vide Circular 33/2016 – Customs dated 22 June 2016 and is focused on facilitation of Importers, exporters, logistic operators and enhance security in the International supply. Recently, CBIC has launched a web application for online filing of AEO-LO applications, real-time monitoring, and digital certification. The same is clarified vide Circular No. 10/2023- Customs.
  • Government of India has initiated Electronic Repairs Services Outsourcing (ERSO) which involves import of goods (defective, damaged electronic goods) by designated repair service entities in India, to reliably repair them and re-export the goods. This enables the extension of life of the electronic goods. Circular No. 14/ 2023-Customs dated 3 June 2023 has prescribed the Customs procedure for import and re-export via the Customs Station at Air Cargo Complex.
  • CBIC vide Circular No. 15/2023 – Customs dated 7 June 2023 has prescribed certain additional qualifiers for purposes of import or export declarations in respect of certain products. These additional qualifiers shall be mandatory for exports under the specific CTHs of the said chapters for all Shipping bills filed on or after 1 July 2023.
 

7. Updates in Anti-Dumping Duty:

  • Notification No. 04/2023 – Customs (ADD) dated 10 April 2023 imposes definitive anti-dumping duty on imports of "Ursodeoxycholic Acid (UDCA)" originating in or exported from China PR and Korea RP for a period of 5 Years.
  • Notification No. 05/2023 – Customs (ADD) dated 19 April 2023 imposes anti-dumping duty on imports of "Vinyl Tiles other than in roll or sheet form" originating in or exported from China PR, Taiwan and Vietnam.
  • Notification No. 31/2022 – Customs (ADD) dated 20 December 2022 imposed anti-dumping duty on imports of Stainless-Steel Seamless Tubes and Pipes originating in or exported from China PR produced by specified persons. In the same notification, the Sl. No. 9 got amended vide Notification No. 06/2023-Customs (ADD) dated 9 June 2023 by changing the producer from “Zhejiang Tsingshan Steel Pipe Co., Ltd” to “Tsingshan Steel Pipe Co., Ltd”.

8. Other Miscellaneous Updates under Customs:

  • Vide Notification No. 41/2023 – Customs (Tariff) & Notification No. 42/2023 – Customs (Tariff) dated 30 June 2023, the CBIC has reduced the BCD & Agriculture Infrastructure and Development Cess on LPG falling under HSN 271119 to 5 per cent & 15 per cent respectively.
  • Vide Notification No. 35/2023 – Customs (Tariff) dated 29 April 2023, the CBIC has amended Notification No. 50/2017 – Customs (Tariff) in order to align the HS Codes of the said notifications with the Finance Act, 2023.

9. Notification of the Handbook of Procedures, Forms & Appendices under FTP 2023:

The Handbook of Procedures is notified vide Public Notice No. 01/2023 with effect from 1 April 2023. Vide Public Notice No. 05/2023 dated 11 April 2023, the validity of ANFs and Appendices issued under FTP (2015-20) is extended till 31 May 2023 or up to the date on which new ANFs and Appendices are notified under FTP 2023, whichever is earlier. The updated Appendices & ANFs of FTP 2023 are notified vide Public Notice No. 10/2023 with effect from 26 April 2023. 

10. Other Important Updates under FTP:

  • The DGFT vide Notification No. 08/2023, dated 29 May 2023 has made certain amendments in ITS (HS) 2022 – Schedule 1 (Import Policy) to align it with the Finance Act 2023 & FTP 2023.
  • The Category 5B of the Appendix 3 (SCOMET List) of Schedule 2 of the ITCHS classification of Import and Export Items that controlled the export of all kinds/types of drones/UAVs is amended to simplify and liberalize the SCOMET policy for export of Drones/UAVs, vide Notification No. 14/2023 dated 23 June 2023.
  • The import policy of Cigarette lighters under ITC (HS) Codes 96131000 and 96132000 is revised from "Free" to "Prohibited" vide Notification No. 15/2023 dated 29 June 2023. However, import shall be free if CIF value is Rs. 20/- or above per lighter.
  • Implementation of the Track and Trace system for export of Pharmaceuticals and drug consignments along with maintaining the Parent-Child relationship in the levels of packaging and their movement in supply chain is extended up to 1 August 2023 vide Public Notice No. 03/2023 dated 3 April 2023
  • Vide Trade Notice 01/2023-24 dated 6 April 2023, instructions related to the online functionality of issuance of Export Obligation Discharge Certificate (EODC) for AA & EPCG license holders are provided.
  • Vide Trade Notice 06/2023-24 dated 31 May 2023, DGFT has clarified that an online facility of requesting appointment for virtual meeting/personal hearing to the exporters is being introduced w.e.f. 1 June 2023. With this online facility, the exporter can request the officers for online personal hearing. 

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