PwC GST Newsletter - July 2018

(1)

In the issue GST

Contacts

Staying Updated

Goods and Service Tax newsletter

Notifications and circulars

Notifications issued by the Central Government

• The term ‘business’ for the purpose of levy of tax

@12% under works contract service will not include any activity undertaken by Central Government, State Government or local authority in which they are engaged as public authorities.

• GST rates on specified goods and services have been amended to give effect to the

recommendations in the 28^th GST Council meeting held on 21 July, 2018.

Case Laws

Authority for Advance Ruling (AAR)

• AAR holds that the activity of body building on the chassis supplied by the principal utilising and consuming tangible material from own end for job work would qualify as a composite supply under section 2(30) of the CGST Act, 2017. The AAR further ruled that the rate of tax applicable would be determined on the basis of the predominant component involved in such composite supply.

High Court

• Bombay High Court (HC) permits withdrawal of writ petition challenging the levy of GST on transfer of development rights.

July 2018, Volume 01 Issue 01

(2)

In the issue GST

Contacts

GST

Notifications and circulars

Notifications issued by the Central Government

• Due date for filing Form GSTR-6 return by Input Service Distributor for the period July 2017 to August 2018 has been extended upto 30 September 2018

(Notification No. 30/2018 – Central Tax dated 30 July 2018)

• Rate of GST on specified services have been amended in line with announcements made in 28^thGST Council meeting.

(Notification No. 13/2018-Central Tax (Rate) dated 26 July 2018)

(Notification No. 14/2018-Integrated Tax (Rate) dated 26 July 2018)

• Specified services have been exempted from GST in accordance with the announcements made in 28^thGST Council meeting.

• Services supplied by individual Direct Selling Agents (other than a company, partnership firm or limited liability partnership) to banks or non-banking financial companies to be covered under reverse charge mechanism.

• Services provided by way of any activity in relation to a function entrusted to a municipality under Article 243W is

undertaken by Central Government, State Government or local authority in which they are engaged as public authorities.

• GST rates on specified goods have been amended to give effect to the recommendations in the 28^th GST Council meeting held on 21 July, 2018.

• Exemption has been given on goods to give effect to the recommendations of the 28^th GST Council meeting held on 21 July, 2018.

• Enabling notification allowing refund of input tax credit (ITC) due to inverted duty structure on specified products issued. In such cases, accumulated ITC on inward supplies received upto 31 July, 2018 will lapse after payment of tax and upto the month of July, 2018.

• Rate of tax on specified handicrafts items has been amended.

(Notification No. 21/2018-Central Tax (Rate) dated

(3)

In the issue GST

Contacts

• Compensation cess on coal rejects (supplied by a coal washery, arising from coal, on which compensation cess is paid and no credit has been availed) and fuel cell motor vehicles has been exempted.

(Notification No. 2/2018-Compensation Cess (Rate) dated 26 July, 2018)

Circulars issued by the Central Government

• Circular No. 28/02/2018 dealing with applicable GST rate on catering services in an educational institute has been withdrawn. Further, order no. 02/2018-Central Tax dealing with supply of food and/ or drinks by IRCTC or their licensees, in trains or at platforms also has been withdrawn.

(Circular No. 50/24/2018-GST dated 31 July, 2018)

• It is clarified that services provided by Government and private service providers (PSP’s) by way of transportation of patients in an ambulance is exempted from GST. Further, services provided by PSP’s to the State Government by way of transportation of patients on behalf of State Government against consideration is also exempt subject to fulfillment to applicable condition.

(Circular No. 51/25/2018-GST dated 31 July, 2018)

(4)

In the issue GST

Contacts

GST

AAR Rulings

• In 2018-VIL-114-AAR, West Bengal AAR held that since the applicant supplies to Special Economic Zone (SEZ) units and developers of SEZ units only, the provisions of section 16 of IGST Act will be applicable and such supplies would be taxed at zero rate.

• In 2018-VIL-118-AAR, Madhya Pradesh AAR held that the activity of body building on the chassis supplied by the principal utilising and consuming tangible material from own end for job work would qualify as a composite supply under section 2(30) of the CGST Act, 2017. The AAR further ruled that the rate of tax applicable would be determined on the basis of the predominant component involved in such composite supply.

• In 2018-TIOL-103-AAR-GST, Haryana AAR held that administrative support and facilitation services provided by the applicant to conduct examinations such as IELTS & ESOL would qualify as exam support service covered under heading 9992 as education support service and be taxable at 18%.

• In 2018-TIOL-102-AAR-GST, Haryana AAR held that brake pads for use as brake assembly and its part thereof for tractors attract 18% GST and brake pads manufactured as parts and accessories of motor vehicles of heading 8701 to 8705 (other than specified parts of Tractors) attract 28% GST.

•In 2018-TIOL-106-AAR-GST, Haryana AAR ruled that truck mounted cranes manufactured by mounting or fixing of cranes on readymade trucks/ lorries bought out by the applicant from truck/ lorry manufacturers are classifiable

No. F-A-3-08-2018-1-V (43), dated 24 April, 2018 issued under MPGST Act/ Rules 2017.

• In 2018-TIOL-105-AAR-GST, Haryana AAR held that the question whether the activities of market research, purchase of goods and trademark protection, identification and negotiation with suppliers, inspection, quality control and logistics services provided by applicant qualify as export of services involves examination of place of supply and hence cannot be taken up by the Authority for lack of jurisdiction.

(5)

In the issue GST

Contacts

GST HC decisions

• In W.P No. 1609 of 2018, the petitioner withdrew the writ petition challenging the levy of GST on transfer of

development rights before the Bombay HC.

• In Special Civil Application No. 10828 of 2018, the Gujarat HC issued notice to the Union Government in a petition challenging the constitutional validity of certain timelines prescribed under the GST law for availment of transitional credit.

• In 2018-TIOL-69-HC-MAD-GST, Madras HC directed the petitioner to first approach the concerned railway authorities and file representations with them for implementing the instructions by the Railway Board in respect of works

contracts services provided on work orders entered into prior to introduction of GST as the petitioner cannot jump the process and directly approach the writ court.

• In 2018-TIOL-68-HC-MP-GST, Madhya Pradesh HC upheld the levy of penalty on the petitioner as it was mandatory for the petitioner to file Part-B of the e-way bill specifying all details such as vehicle number before the goods are loaded in the vehicle and by not doing so, the petitioner violated Rule 138 of the MP GST Rules.

• In 2018-TIOL-66-HC-KERALA-GST, Kerala HC directed the petitioner, who could not upload Form GST TRAN-1 within stipulated time frame, to approach the nodal officer to redress IT-related grievances faced by it in view of circular No.

39/13/2018-GST dated 3 April, 2018 and also directed the concerned nodal officer to enable the petitioner to take credit should there be no fault of the petitioner.

(6)

In the issue GST

Contacts

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us atwww.pwc.com.

In India, PwC has offices in these cities: Ahmedabad, Bangalore, Chennai, Delhi NCR, Hyderabad, Jamshedpur, Kolkata, Mumbai and Pune. For more information about PwC India's service offerings, visitwww.pwc.com/in

PwC refers to the PwC International network and/or one or more of its member firms, each of which is a separate, independent and distinct legal entity in separate lines of service. Please seewww.pwc.com/structurefor further details.

Contacts Delhi

Pratik Jain/ Gautam Khattar/ Rahul Shukla Ph: +91 (124) 3306000

Mumbai

Dharmesh Panchal Ph: +91 (22) 6689 1000 Kolkata

Pratik Jain/ Gopal Agarwal

Ph: +91 (33) 4404 3098/4404 6000 Bangalore

Pramod Banthia/ Kunal Wadhwa Ph: +91 (80) 4079 6000

Hyderabad

Ananthanarayanan S Ph: +91 (40) 4424 6363 Chennai

N Madhan

Ph: +91 (44) 4228 5000 Pune

Nitin Vijaivergia

Ph: +91 (20) 4100 4444 Ahmedabad

Jatin Arora

Ph: +91 (22) 6689 1000