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Circulars – GST – Highlights – The circular clarifies the treatment of input tax credit in relation to life insurance premiums not included in taxable value. The circular explains that such premiums are not to be considered as pertaining to a non-taxable or exempt supply under the CGST Act. As per the Insurance Act, life insurance policies may include an investment component, but the portion of premium not included in taxable value does not qualify as exempt supply. Therefore, there is no requirement to reverse input tax credit for such premiums as per Rule 42 of the CGST Rules. The circular aims to ensure uniformity in the implementation of tax provisions across field formations. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular discusses the time limit u/s 16(4) of the CGST Act, 2017 for availing input tax credit (ITC) on reverse charge mechanism (RCM) supplies from unregistered persons. It clarifies that the relevant financial year for ITC availment is the year in which the recipient issues the invoice u/s 31(3)(f) of the CGST Act, subject to tax payment. Delayed issuance of invoice may attract interest and penalties under the CGST Act. The circular aims to ensure uniformity in implementing the law and suggests issuing trade notices for awareness. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular addresses the valuation of imported services from a related person when the recipient is eligible for full input tax credit. It clarifies that where no consideration is involved, and the activities are not considered supplies by the related person in India, the value declared in the invoice by the recipient may be deemed the open market value. The circular references Rule 28 of the CGST Rules, emphasizing that where full input tax credit is available to the recipient, the declared value in the invoice is deemed the open market value. It extends the principles applied to domestic related parties to foreign entities providing services to related parties in India. The recipient in India must pay tax under the reverse charge mechanism and issue a self-invoice. The circular instructs field formations to publicize its content and invites feedback for implementation issues. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular clarifies the time of supply for GST payment on spectrum allocation services when telecom operators opt for deferred payments. The bidder is liable to pay GST on spectrum usage services received on reverse charge basis. If payments are made in installments, it constitutes continuous supply of services, with tax liability arising when payments are due or made. Frequency Assignment Letter is not considered an invoice for GST purposes. Invoice must be issued before the due date of payment. Full upfront payment triggers GST liability at payment or due date, while deferred payments trigger GST liability at each installment's due or payment date. Similar treatment applies to other cases of government allocating natural resources for continuous service over time. Trade notices should publicize the circular, and any implementation difficulties should be reported to the Board. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The Circular addresses the taxability of salvage/wreck value in motor vehicle insurance claims under GST law. Insurance companies are not liable to pay GST on salvage deducted from claim settlements if such salvage remains the property of the insured. However, if the insurance contract settles the claim without deducting salvage value, making salvage the property of the insurance company, GST is payable on the disposal/sale of the salvage. The circular emphasizes that in cases where salvage deductions are contractually agreed upon, insurance companies do not incur GST liability on the salvage. Suitable trade notices are advised for dissemination, and any implementation difficulties should be reported to the Board. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – A recent Circular provides clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 regarding the place of supply of goods to unregistered persons. The clause states that the place of supply for goods to unregistered persons is determined by the address recorded in the invoice, overriding other provisions. In cases where the billing address differs from the delivery address for goods supplied through e-commerce platforms, the Circular clarifies that the place of supply is based on the delivery address recorded on the invoice. Suppliers are advised to note the delivery address as the recipient's address for determining the place of supply. Trade notices are recommended for dissemination of this clarification. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular provides clarification on GST liability and input tax credit (ITC) availability for warranty and extended warranty cases. It addresses issues like the replacement of goods or parts under warranty, distributor's role in replacement, and nature of extended warranty supply. It clarifies that GST is not payable on goods replenished under warranty and distinguishes extended warranty as a separate service. The circular emphasizes uniformity in implementing CGST Act provisions. Trade notices are advised for dissemination, and feedback on implementation challenges is welcomed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The Circular provides clarity on time of supply for services in construction of roads and maintenance under the Hybrid Annuity Mode (HAM) model for National Highway Projects. It states that under the HAM model, where payments are staggered over the contract period, the time of supply is determined by the date of invoice issuance or payment receipt, whichever is earlier. If the invoice is not issued as prescribed, the time of supply is the date of service provision or payment receipt. The Circular also clarifies that interest components in payments to the concessionaire should be included in the taxable value. Tax liability arises based on the above principles. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular addresses denial of input tax credit (ITC) on ducts and manholes used in optical fiber cable (OFC) networks u/s 17(5) of the CGST Act. It clarifies that ITC is not restricted for such items as they are considered part of “plant and machinery” essential for telecommunication services. Ducts and manholes are integral for laying OFC networks and fall within the definition of “plant and machinery” as per the Act. The circular aims to prevent unnecessary disputes in the telecommunication sector and encourages uniformity in tax implementation. It directs issuance of trade notices to disseminate the clarification and invites feedback for smooth implementation. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – A circular issued by the Government of India provides clarifications on issues related to a special procedure for manufacturers of specified commodities under Notification No. 04/2024-Central Tax. The procedure was revised following the rescission of a prior notification. The circular addresses concerns raised by trade associations, including the non-availability of machine details, electricity consumption rating declaration, reporting values in forms, and the applicability of the special procedure to different scenarios like SEZ units and manual packing operations. It specifies qualifications for Chartered Engineers certifying details and emphasizes compliance for all involved parties in the manufacturing process. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – A recent circular addressed the taxability of loans between related parties or affiliates. The circular clarifies that providing loans between related parties constitutes a taxable supply under GST. However, services involving interest or discount on loans are fully exempt. Processing fees or administrative charges on loans may be subject to GST, but in cases where no such fees are charged, no GST applies. Fees charged by lenders to related parties beyond interest or discount are considered taxable. The circular emphasizes the distinction between loans provided by related parties and independent lenders, noting differences in processing requirements. It advises issuing trade notices to disseminate the circular's contents and invites feedback on implementation challenges. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular provides clarification on the place of supply for custodial services offered by banks to Foreign Portfolio Investors (FPIs). It addresses the confusion regarding whether these services fall under the category of services provided to 'account holders' as per Section 13(8)(a) of the IGST Act. The circular explains that custodial services do not qualify as services to account holders and should be determined under the default provision of sub-section (2) of section 13 of the IGST Act. This interpretation aligns with similar provisions in the Service Tax regime, indicating that custodial services are distinct from services provided to account holders. The circular emphasizes the need for uniformity in implementing these provisions across field formations. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular addresses the Reduction of Government Litigation by setting monetary limits for filing appeals before GSTAT, High Courts, and Supreme Court. It refers to the National Litigation Policy, emphasizing prudent litigation practices. The circular cites Section 120 of the CGST Act, empowering the Central Board of Indirect Taxes & Customs to fix monetary limits for appeals. The circular sets monetary limits for filing appeals: GSTAT – 20,00,000/-, High Court – 1,00,00,000/-, and Supreme Court – 2,00,00,000/-. It outlines principles for determining if a case falls within these limits and specifies exclusions where monetary limits do not apply. It highlights that filing an appeal should be based on case merits, not just exceeding monetary limits, to reduce unnecessary litigation. Non-filing of appeals based on monetary limits does not set a precedent value. The circular encourages officers to decide on appeals based on reducing litigation and providing certainty to taxpayers. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – The circular addresses the entitlement of Input Tax Credit (ITC) by insurance companies on repair expenses for motor vehicles in reimbursement mode of claim settlement. It clarifies that ITC is available to insurance companies for repair expenses reimbursed to insured, even if the garage issues invoices in the insured's name. ITC is permissible as the insurance company is the recipient of the repair services, covering the repair liability. The extent of ITC depends on the approved claim cost reimbursed. If excess amount invoices are issued, ITC is available on the approved claim cost reimbursed. However, if full invoice amount is paid to the garage but only approved cost is reimbursed to insured, ITC is limited to the approved claim cost. If the repair invoice is not in the insurance company's name, ITC is not available. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – In a case where a writ petition was dismissed due to allegations of false statements regarding authorization, the High Court held that payment made under threat and coercion during search proceedings cannot be considered voluntary. The court directed GST authorities to refund Rs. 30,00,000 to the appellants within six weeks. The appellants can raise a claim for interest during the show-cause notice adjudication. The appeal was allowed, setting aside the previous writ petition decision. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court addressed a case involving a violation of natural justice as the petitioner did not respond to prior notices leading to the disputed order. Discrepancies in credit amounts were noted. The Court, acknowledging the petitioner as a small dealer, granted partial relief by annulling the order and sending the case back to the respondent for fresh consideration within two months. The petitioner was required to deposit 30% of the disputed tax within 30 days and reply to the show cause notices. The petition was disposed of through remand. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court addressed the issue of refunding accumulated input tax credit within a time limit for zero-rated supplies. The petitioner sought the benefit of an extended period under Clause(e) of Explanation 2 to section 54 of the Central Goods and Service Tax Act, 2017, as per Notification No. 13/2022-Central Tax. The court held that the petitioner was entitled to the benefit of the notification, which allowed relaxation of the COVID period from 01.03.2020 to 28.02.2022 for the period from June 2018 to January 2019. The court allowed the petition, directing the respondents to grant the benefit of the notification retrospectively for the relevant period, as it was not available when the impugned orders were issued. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court addressed the transition of unutilized input tax credit from VAT returns u/s 140 of GST enactments. It held that credits availed under TNVAT Act are indefeasible, citing a Supreme Court decision on CENVAT Credit Rules. Refund wasn't provided for untransitioned credits under TNGST Act. The petitioner's credit validity under TNVAT Act needed verification, and the impugned order was partly allowed for this purpose. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court considered a challenge to a search and seizure order under the UPGST Act. The court found non-compliance with the mandatory provision of Section 67 as the Joint Commissioner did not provide the necessary “reasons to believe” for the search. The State authorities' explanation of discrepancies in forms was deemed insufficient. Consequently, the authorization for the search was invalidated. All proceedings stemming from the illegal search were annulled, goods and documents seized were to be released within three weeks, and any deposited amounts were to be refunded within eight weeks. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court examined a case involving the recovery of an erroneous refund due to an inverted duty structure. The Court found that the show cause notice lacked specific details beyond mentioning the excess refund amount. This lack of particulars violated natural justice principles as it hindered the petitioner's ability to respond adequately. Consequently, the Court quashed the order and remanded the matter for reconsideration. The respondents were instructed to issue a new show cause notice with comprehensive details to facilitate a proper response. The petition was disposed of through remand for further proceedings. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court addressed the valuation of goods for calculating Integrated Goods and Services Tax (IGST) refund. The court held that the rules do not specify considering only the net realisation value; the value declar

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Case-Laws – GST – Highlights – The High Court reviewed a case involving the challenge of tax recovery proceedings. The petitioner disputed the lack of a Document Identification St Number (DIN) in the proceedings issued by the 1st respondent. The cou

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Case-Laws – GST – Highlights – The High Court addressed the issue of deletion of temporary registration due to non-generation of an e-way bill for a vehicle and absence of required transport documents. The Court referred to Rule 16 of the GST Rules,

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Case-Laws – GST – Highlights – The High Court interpreted Section 140(5) of the CGST Act regarding transition of credit. The petitioner sought extension under the proviso to Section 140(5) but was rejected for not filing within the time limit. The s

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Case-Laws – GST – Highlights – The High Court addressed the issue of jurisdiction in a case involving the issuance of two show cause notices to an individual for different entities. The petitioner argued that once a notice was issued to them individ

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