GST WEEKLY UPDATE : 23/2021-22 (05.09.2021) By CA Vipul Khandhar
By CA Vipul Khandhar
1. GST Portal now accepting Application for Revocation of Cancelled GST Registration:
The GST Portal is now accepting applications for revocation of cancelled GST Registration. As per notification no. 34/2021-CGST dated 29th Aug 2021, the Central Board of Indirect Taxes and Customs (CBIC) notified the extension of the due date to September 30, 2021 for filing an application for revocation of cancellation of registration where the due date falls between March 1, 2020 to August 31, 2021.
The extension would be applicable only in those cases where registrations have been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act.
2. IGST on goods re-imported after being exported for repairs:
(Circular No. 16/2021-Customs; Dated 19th July 2021)
Integrated tax and Compensation cess shall be leviable on goods re-imported after being exported for repairs at a value-
The fair cost of repairs carried out including cost of materials used in repairs (whether such costs are actually incurred or not), insurance and freight charges, both ways.
3. Govt. has further extended the exemption from Custom duty/ Health cess on import of COVID relief items:
Earlier, Notification No. 28/2021-Customs dated April 24, 2021 as amended by Notification No. 31/2021-Customs dated May 31, 2021 exempted from customs duty and health cess, the import of COVID relief items. These items include:
Oxygen concentrator, Medical Oxygen, Oxygen storage tanks
Cryogenic road transport tanks for Oxygen, Oxygen cylinders including cryogenic cylinders and tanks,
Non-invasive ventilation nasal masks for ICU ventilators, etc.
Vide Notification No. 41/2021-Customs dated August 30, 2021 the last date of above exemption is further extended till September 30, 2021.
4. Recent AAR & Judicial Decisions:-
(i) AAR On 18% GST applicable on ‘Other Services’ not naturally bundled with Construction Services:
(Applicant – M/s Puranik Builders Pvt. Ltd)
The Maharashtra Authority of Advance Ruling ruled that 18% GST applicable on ‘Other services’ not naturally bundled with Construction services. The applicant has been engaged in the business of construction and sale of residential apartments and discharge Goods and Services Tax (GST) in respect of the supply of construction services in respect of residential units for which consideration is received before the receipt of Occupancy/Completion Certificate.
The applicant has raised the issue of whether the Other Charges received by the company will be treated as consideration for construction services of the Company and classified under HSN 9954 along with the main residential construction services of the Company or whether the same will be treated as consideration for independent service(s) of the respective head and consequently, what will be the applicable effective rate of GST on services underlying the Other Charges.
(ii) AAR On Components of swivel seats/chairs in dis-assembled form classifiable under CTH 94019000:
(Applicant – Steelcase Asia Pacific Holdings India Private Limited)
AAR ruled that the components of swivel seats/chairs, proposed to be imported by the applicant in dis-assembled form, merit classification under sub-heading 94019000 of the first schedule to the Customs Tariff Act, 1975.
(iii) AAR On Underground Mining Truck classifiable under CTH 8704 1010:
(Applicant – M/s. Sandvik Mining & Rock Technology India Private Limited)
The goods under consideration in this application are meant for movement/transport goods, carrying relatively high payloads, albeit over short distances within the premises of small and medium sized mines. They are not meant for working the earth. The terms of heading 870410 and the accompanying chapter notes/HSN explanatory notes squarely cover the said goods. Therefore, I do not find any merit in the applicant’s contention of the goods not being motor vehicles as the functional and design feature of the goods answer the requirements of CTH 870410, as discussed above. In light of the foregoing legal provisions, product features and usage and discussions, I rule that underground mining trucks, one example of which is the SANDVIK TH 320, is classifiable as motor vehicles for transport of goods designed for usage in restricted conditions like a mine, under 8704 1010.
(iv) AAR On Biopesticides classifiable under chapter 38:
(Applicant – Dow Agro Sciences India Pvt. Ltd.)
Import of insecticides/pesticides is subject to the provisions of the Insecticides Act, 1968. As per provisions of section 9 of the said Act, no insecticides are allowed to be imported without a valid certificate of registration or an import permit issued by the Secretary, Central Insecticide Board & Registration Committee under his signature and office seal. Any person desiring to import or manufacture any insecticide may apply to the Registration Committee for the registration of such insecticide and there shall be a separate application for each such insecticide to obtain the certificate of registration. The applicant has submitted a copy of the registration dated 18.03.2016 granted to biological insecticide ‘Spinetoram 11.7% SC’ for import under section 9(3) of the Act, ibid. In view of the same, the fact that manufacturing process of `Spinetoram’ involves chemical/synthetic modification of fermented Saccharopolyspora Spinosa is not sufficient to reject the applicant’s assertion that it is a bio-pesticide.
Thus, the product in question is classifiable under chapter 38; is a bio-pesticide and is based on Saccharopolyspora spinosa.
(v) AAR On Head mounted tablets classifiable under CTH 85176290:
(Applicant – Ingram Micro India Pvt Ltd)
The Board Circular No. 20/2013-Cus. refers to ‘Tablet Computers’ that can be programmed in a variety of ways. HMT device doesn’t appear to be amenable to be programmed in various ways. It also held that the tablet computers are those devices which have essentially the same functionality as laptop. The HMT device does not have the same functionality as a laptop, it is essentially a remote collaboration tool as indicated in the website of M/s. RealWear. The product catalogues also describe product as remote collaboration tool, clearly indicating thereby that communication over distance between two personnel as a key distinguishing feature of the device. Therefore, to be called a tablet computer, the function as an automatic data processing machine must be the main function. In case of HMT devices, the main function is providing hands-free connected worker solutions for remote collaboration. Hence, it appears that the HMT devices are not akin to tablet computing devices.
The applicant, on their part, have mentioned all possible classification entries apart from 84.71. They include 851762 (Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus), 851830 (Headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers), 852550 (Transmission apparatus), as well as the residuary heading 8543 (Electrical machines and apparatus having individual functions, not specified or included elsewhere in this chapter). Amongst all of the above, the sub-heading 85176290, covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network. The HMT device is a hands-free remote collaboration tool. It acts as a virtual assist and can capture videos and photos and share the same with workers at another location for any assistance. One can view documents/workflows. The product catalogues also lay emphasis on the device aiding mentor/expert connection with workers on field from remote location. Hence, it appears that HMT devices are a type of apparatus for the transmission or reception of speech, images and other data between two points. Based on the above discussion, it is my considered opinion that HMT devices are rightly classifiable under sub-heading 85176290.
In view of the aforesaid, I rule that head mounted tablets of M/s. RealWear, namely HMT-1 and HMT-1Z1 merit classification under heading 85.17, and more specifically under sub-heading 85176290 of the first schedule to the Customs Tariff Act, 1975. The rate of customs duty for these devices, as per the tariff in force, is 10% advalorem. IGST is payable on imports @ 18%. The imports would also attract Social Welfare Surcharge @ 1%. I have considered the benefit of exemption available to goods of sub-heading 85176290 by virtue of Sr. No. 20 of the table annexed to the Notification No. 57/2017-Cus., dated 30.06.2017, as amended.
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 Chartered Accountant practising at Ahmedabad)