GST Rate to be reviewed by GST Council

The GST Council is scheduled to meet on 18th December to review GST rates.

This is necessitated by the consistent fall in both the GST and Compensation Cess collections.

Also the States, particularly opposition ruled States have been applying pressure on the Centre to release GST payments immediately as Rs 50,000 cr cess lies unutilised.

This GST review more specifically covers exempted items, items with inverted rates, compensation cess rate. This may lead to GST rates on certain items being raised. 


Central Excise & Service tax Amnesty Scheme

  1. 1. Chapter V of the FA 2019 (full text of SVLDR Scheme)
  2. 2. SVLDR Rules
  3. 3. SVLDR Notification No 4/2019
  4. 4. CBIC Circulars dated 28.08.2019 and 25.09.2019
  5. 5. FAQs on SVLDR
  6. 6. SVLDR Departmental presentation
GST Optimisation Part 2

This is the 2nd Part of the set of videos on “GST Optimisation”. It explains how indirect tax cascading still continues in India even after implementing GST. The video covers specific situations in which tax cascading happens. This video is meant for the general public and not exactly the tax experts. So the language is simpler devoid of sections, rules, technical expressions and tax jargon.

GST Optimisation Part 1

This is the first part of a three part video set on Tax Optimisation, more specifically GST Optimisation. Its created for those who are not too familiar with taxation and yet keen to understand and benefit by optimising on taxes. This can be useful for people handling indirect taxation too as the aim of these videos is to conceptually clarify the subject.

"The Indian GST Story" by Anthony Fernandes - Founder of Tax Quotient

1st June 2019




Recent Court / Tribunal Judgements

 CESTAT Decisions


18th October, 2018 : CESTAT Mum : UPS Jetair Express Private Limited   Vs Commissioner of CGST, Mumbai East 

Revenue denied CENVAT credit only on the ground invoices didn't mention the registration number of the service provider. No other allegations were made regarding receipt of input services, eligibility etc.

Held : This is merely a procedural lapse. It is settled that CENVAT credit can't be denied on mere technicalities or procedural lapses.

CENVAT credit allowed, extended period of limitation not applicable.

Ed's comment : Isnt it surprising that a Senior Officer like Prin. ADG, DGPM, WRU, still needs to catch up with decades old case law regarding Modvat and Cenvat? It's repeatedly held procedural lapses aren't reason enough to deny credit. How will the dept reduce litigation? Should Tribunal for fairness?

18th October, 2018 : CESTAT Ahd : M/s Auto Care Lubricant Vs C.C.E. & S.T.-Vapi
The Tribunal relying on an earlier decision in Castrol India Ltd, held :
“The authorities under the Standards of Weights and Measures Act are the best judge to decide as to whether a product is required to be affixed with a MRP under the said Act or not. If said authority has clarified that 210 ltr. barrel are not required to be affixed with MRP, it was obligatory on the part of the Excise authority to accept such decision of Controller of Legal Metrology authority….., it was not open to the Excise authority to doubt the decision of the authority under Standards of Weights and Measures Act and to proceed independently ….”

18th October 2018 : CESTAT Ahd : M/s Javiya Finance Services, Javiya Marketing Vs C.C.E.& S.T.- Surat-I
The appellant were providing service of identifying customers for car loans and receiving commission from ICICI Bank. This was to be taxed under Business Auxiliary Services (BAS).  

The appellants admitted taxability but argued they were under bonafide belief the services are not taxable and so extended period of limitation should not be invoked.
Held : "The definition of Business  Auxiliary  Services  is  very  clear  and  there  is  no  scope  of interpretation. The definition specifically includes the service of promotion or marketing of any service of the client within its ambit." Appeals dismissed.


 12th Oct : CESTAT Mum : Tahnee Heights CHS Ltd. Vs Commissioner of CGST, Mumbai South : Held : "The appellant also do not provide any service to its members, who pay the amount towards their share of contribution, for occupation of the units ....the explanation furnished under clause 3(a) in Section 65B of the Act will not designate the appellant as an entity, separate from its members....the case of the appellant is not confirming to the requirement of 'service', as per the definition contained in Section 65B(44) of the Act."

10th Oct : CESTAT Ahd :  L & T Ltd. etc Vs C.C.E. Ahd Appellants argued the law and IS specifications had changed for their product "concrete mix" made at site. It was eligible for the exemption making the earlier Supreme Court judgement in their own case irrelevant.

Tribunal ruled that there is no change in the  C.Ex Tariff Heading description as far as ready mix concrete is concerned. There is no mention of any IS Specification anywhere in the SC judgement. So changes in IS Specifications cannot be used to distinguish the decision of Hon’ble Apex Court. Demand beyond the period of limitation set aside. Personal penalty quashed as this is a case of interretation.

11th Oct : CESTAT Chennai : M/s. Pepsico India HPL Vs Commr of GST & CE, Chennai Outer : The appellants had paid excess central excise duty for which they utilised the CENVAT credit. On realizing this they suo moto took re-credit of the excess amount debited from the Cenvat account.

Held:  Following the said decisions of the High Courts, The impugned order and demand was set aside.

High Court Judgements


2nd July, 2018  : Allahabad High Court : Hamdard (Wakf) Labs Vs Commr Of Commercial Taxes : The High Court upholds the Tribunal order and holds that "Sharbat "Rooh Afza" is not unclassifiable under Schedule-V of the Act and liable to tax @ 12.5%. It is neither fruit juice nor fruit drink nor processed fruit.

 2nd July, 2018 :  Delhi High Court : JOYCE KAROUNG Vs NARCOTICS CONTROL BUREAU : Relying on the SC judgment in Babua v. State of Orissa, (2001) 2 SCC 566 the High Court concluded the petitioner is not prima facie not guilty. Also, liberty of a citizen must be balanced with the interest of the society especially where narcotic drugs and psychotropic substances are involved. It is alleged that this is not the first offence.

Click for earlier Judgements in 2018

Amway Distributors get away lightly in service tax case before the CESTAT Delhi Bench

Brief Facts

The appellants/assessees were "distributors" enaged in direct selling of  Amway consumer products. A Distributor could also sponsor/enroll  other persons for direct marketing as distributors of the products and they get earn a commission based on the sales secured by these second level Distributors.

Thus Amway, a distributor earns monthly income in three ways 

(a) Margin between on the purchase from Amway and sale to their customers i.e. trading ;
(b) Commission earnen on their purchases for personal consumption during the month ; and
(c) monthly commission earned on sale secured by second level Distributors enrolled by the by the Distributor.


Position adopted by the Tax authorities

Service tax authorities demanded service tax authorities on the gross amount i.e. all three types of earnings by the Distributor. The assessees disputed this this.


Tribunal's Decision

No service tax on trading of goods: The assessees are distributors, who buy from Amway and sell in retail. This is trading in goods.  This activity   cannot be treated as sales promotion, marketing or sale of the goods of Amway. Once Amway's products are bought by the Distributor, they cease to belong to Amway, and the distributor cannot be said to provide any service to Amway qua the goods. So any incentive or commission received by an Amway Distributor on the purchase of goods cannot be treated as consideration received for promotion or marketing or sale of the goods. No service tax is chargeable on such profit earned by the distributors  from purchase/sale of the goods.

Service tax applicable on promotion by sponsoring other distributors and commissioner earned on their sales:However, the third activity of identifying and roping in other persons for sale of Amway  products and sponsoring  such persons would qualify as marketing or sale of Amway goods. Any commission received by the Distributor from Amway linked with the performance of his sales group or second level distributor would be consideration for Business Auxiliary Service in connection with sales promotion for Amway. Therefore, service tax would be chargeable  on the commission received  by a Distributor  from Amway on the products purchased by his sales group.

The demand confirmed by the tax authorities is for the gross amount, the case has to be remanded to the original authority for re-determination.

Exemption under not 5/2006 ST applicable : Another point of contention is the applicability of notification no.5/2006-ST. This exemption would be admissible to Distributors as they are engaged in promoting sales/marketing of the products of Amway and are not marketing or promoting any taxable service which is branded and the brand name belongs to another person.

Not a wilful act of evasion - No Penalty : As regards penalty, mere non compliance with registration, tax payment and filing returns cannot be inferred as a wilful act to evade service tax. Also the Commissioner (Appeals) after analyzing the activities of the assesses took a view the activity is not covered by Business Auxiliary Service  under the Finance Act, 1994. When two differing views exist in the Department itself, it cannot be said there was no scope for doubt.

Extended period will not apply : As held by the Apex Court in Continental Foundation Joint Venture Vs. CCE, Chandigarh reported in 2007 (216) ELT 177 (SC)  when there is scope for doubt in the mind of an assessee on a particular issue, the longer limitation period, under proviso to Section 11 A(1) cannot be invoked.

Read the full judgement

Tax Risk Management Part 1

An Introduction


Risk comes from not knowing what you’re doing. 
- Warren Buffet

Read the Article


Tax Risk Management Part 2

Tax Risks as Black Swan Events!

If you were asked "What 'tax risks' you perceive in your business?" What would be your answer?

Read the Article



Indirect Tax Risk Management

Indirect Risk Tax Management




Economic Survey of India 2017-18