GST WEEKLY UPDATE : 42/2022-23 (15.01.2023) By CA Vipul Khandhar
By CA Vipul Khandhar
1. LUT (Letter of undertaking) application for the financial year 2023-24 has started:
The Goods and Services Tax Network (GSTN) has enabled the functionality to furnish a Letter of Undertaking (LUT) for the Financial Year 2023-2024 on the GST Portal. Who can furnish LUT & benefit of furnishing LUT: Letter of Undertaking or LUT is to be furnished by exporter for exporting goods without payment of GST (IGST). The LUT facility has been extended to all registered persons who intend to supply goods or services for export without paying integrated tax. Meaning thereby they cannot export goods without payment of GST (IGST). Navigation to furnish LUT is as follows: “Dashboard > Services > User Services > Furnish Letter of Undertaking> Select FY & apply except”
- CBIC issued clarifications regarding the applicability of GST services & goods:
Circular No. 189 &190/02/2023- GST
| Issue | Clarification |
| Accommodation service provided by air force mess to its personnel |
Accommodation services provided by Air Force Mess and other similar messes, such as, Army mess, Navy mess, Paramilitary and Police forces mess to their personnel or any person other than a business entity are covered by Sl. No. 6 of notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 provided the services supplied by such messes qualify to be considered as services supplied by Central Government, State Government, Union Territory or local authority. |
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GST on incentive paid by Ministry of Electronics and Information Technology (MeitY) to acquiring banks under Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions. |
Incentives paid by MeitY to acquiring banks under the Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable.
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The classification of “Rab”(means ‘massecuite prepared by concentrating sugarcane juice on open pan furnaces, and includes Rab Galawat and Rab Salawat, but does not include khandsari molasses or lauta gur.’) |
Rab is appropriately classifiable under heading 1702 attracting GST rate of 18% (S. No. 11 in Schedule III of notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017). |
| Applicable GST rate on by-products of milling of Dal/ Pulses such as Chilka, Khanda and Churi/Chuni. | W.e.f the 1st January, 2023, the said goods shall be exempt under GST vide S. No. 102C of schedule of notification No. 2/2017- Central Tax (Rate), dated 28.06.2017. |
| clarification regarding the applicable six digit HS code for ‘Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’. | The applicable six-digit HS code for the aforesaid goods with description ‘Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’ is HS 2202 99. The said goods attract GST at the rate of 28% and Compensation Cess at the rate of 12%. It cover all such carbonated beverages that contain carbon dioxide, irrespective of whether the carbon dioxide is added as a preservative, additive, etc |
| The classification and applicable GST rate on snack pellets manufactured through the process of extrusion (such as ‘fryums’) | The snack pellets (such as ‘fryums’), which are manufactured through the process of extrusion, are appropriately classifiable under tariff item 1905 90 30, which covers goods with description ‘Extruded or expanded products, savoury or salted’, and thereby attract GST at the rate of 18% vide S. No. 16 of Schedule-III of notification No. 1/2017- Central Tax (Rate), dated the 28th June, 2017. |
| The clarification about the specifications of motor vehicles, which attract compensation cess at the rate of 22% vide entry at S. No. 52B of notification No. 01/2017 Compensation Cess (Rate), dated 28th June, 2017. | It is clarified that Compensation Cess at the rate of 22% is applicable on Motor vehicles, falling under heading 8703, which satisfy all four specifications, namely: – these are popularly known as SUVs; the engine capacity exceeds 1,500 cc; the length exceeds 4,000 mm; and the ground clearance is 170 mm and above.
This clarification is confined to and is applicable only to Sports Utility Vehicles (SUVs). |
| The applicable IGST rate on goods specified in the list annexed to notification No. 3/2017-Integrated Tax (Rate), dated the 28th June, 2017. | On goods specified in the list annexed to the notification No. 3/2017-Integrated Tax (Rate), dated the 28th June, 2017, which are eligible for IGST rate of 12% under the said notification and are also eligible for the benefit of lower rate under Schedule I of the notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017 or any other IGST rate notification, the importer can claim the benefit of the lower rate. |
- AAR & Judicial Decisions:
(i) Hon’ble Karnataka High Court Decision Regarding Bonafide error in GST return allowed to rectify for FY 2017-2020 & Mismatch in ITC circular benefit allowable in the FY 2019-20:
(Applicant – M/s. Wipro Limited India)
· It is held that, the error committed by the assessee in showing the wrong Goods and Services Tax Identification Number (“GSTIN”) in the invoices, which was carried forward in the relevant forms is a bonafide error, which has occurred due to bonafide reasons, unavoidable circumstances and sufficient cause. Hence, Circular No. 183/15/2022-GST dated December 27, 2022 (“the Circular”), which allows rectification of such bonafide and inadvertent mistakes, would be directly and squarely applicable. Further, allowed the assessee to avail the benefit of the Circular for FY 2019-20 also.
· Observed that, the Circular allows rectification of the bonafide and inadvertent mistakes committed by the assessee at the time of filing of Forms and submitting Returns is applicable in peculiar and special facts and circumstances.
· Opined that, the error committed by the Petitioner in the invoices which was carried forward in the relevant forms is clearly a bonafide error, which has occurred due to bonafide reasons, unavoidable circumstances and sufficient cause thus, the Circular is directly and squarely applicable.
· Held that, the petition be disposed and the Revenue Department is directed to follow the procedure as stated in the Circular to the transactions of Petitioner in the F.Y. 2017-18, 2018-19 and 2019-20.
· Stated that, though the Circular is only referred to F.Y. 2017-18 and 2018-19, the benefit of the Circular would be given for the F.Y. 2019-20 also, since there are identical errors committed by the Petitioner in the F.Y. 2019-20.
(ii) AAR On GST APPLICABLE ON SALTED & FLAVORED POTATO CHIPS/CHIVDA/SEV/SING BHUJIYA:
(Applicant – Prajapati Keval Dineshbhai)
| ISSUE | AAR Held |
| -Salted and flavored Potato Chips,
-Potato Sev (Aloo Sev), – Potato Chivda (Potato Salli Mixture), -Sing Bhujiya, – Sev Mamara (Roasted Puffed Rice with Nylon Sev), – Chana Daal (Fried split Bengal Gram), -Gathiya and -Khatta Mitha Chevda Mixture are salted and savory products. These products are ready to eat and directly consumed by human beings. |
The food products be classified under CTH 21069099.
W.e.f from 18.7.2022, these items would attract GST when “pre- packaged and labelled”. Additionally, certain other items such as Curd. Lassi, puffed rice etc. when “pre-packaged and labelled” would attract GST at the rate of 5% with effect from the 18th July, 2022.
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| Potato Starch classification HSN | Under CTH 11081300 @12% GST |
| Khatta Mitha Chevda Mixture | Under CTH 21069099 @12% GST |
Disclaimer:
This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.
(Author is a well known CA Practicing at Ahmedabad in the fields of Direct and Indirect Taxes)
