India: Recent Developments Under Indirect Tax Laws

In view of the implementation of GST and its impact on other indirect tax laws, various authorities have brought in amendments and clarifications to remedy any difficulty being faced by the industry. Certain critical developments in this regard are encapsulated hereunder.

Amendment under the GST law

• Amendment to e-Way Bill Rules
  

  With the e-Way Bill under GST scheduled to be implemented from 1 April 2018, the government vide notification no. 12/2018-Central Tax dated 7 March 2018 has made certain amendments to the e-Way Bill Rules, which are:
  • The validity period of Over Dimensional Cargo (ODC) consignments has been prescribed as one day for every 20 kilometers or part thereof (as against one day per 100 kilometers for all other type of consignments).
  • The procedure to be followed for goods transported through an e-commerce operator or a courier agency has now been provided in the Rules.
  • An explanation has been added to clarify that if an invoice is issued in respect of both exempt and taxable supply of goods, the value of exempt supply should be excluded to determine the applicability of e-Way Bill to the consignment.
  • A specific proviso has been inserted to provide that where the goods are transported by the railways, the goods should not be delivered unless the e-Way Bill is produced at the time of delivery.
  • Where the goods are transported for a distance of up to 50 kilometers within the state or union territory, the details of the conveyance may not be updated in the e-Way Bill (earlier this limit was 10 kilometers).
  • The requirement for e-Way Bill has been done away with, inter alia, for the following:
    • Goods transported as transit cargo from/to Nepal or Bhutan;
    • Where goods are transported under customs supervision or customs seal;
    • Where the goods being transported are exempt from tax under the Notification No. 7/2017;
    • Empty cargo containers;
    • Transport for the purpose of weighing at a weighbridge within a distance of 20 kilometers.
  • Each day should be counted as the period expiring at midnight of the day, immediately following the date of generation of e-Way Bill. Earlier, each day was to be counted as a period of 24 hours.

Amendments to the Maharashtra VAT Law

The Finance Minister of Maharashtra in his state finance budget for the financial year 2018-19 has proposed the following tax amendments to the Maharashtra Value Added Tax Act, 2002:

• Availing TDS credit
  • It has been proposed to allow contractors to avail credit of TDS paid under MVAT by the employer during the period 1 July 2017 to 31 December 2018.
• Applicability of MVAT audit
  • Audit under the Maharashtra Value Added Tax (MVAT) Act will apply to dealers with a turnover of INR 2.5 million or more for the period of April 2017 to June 2017.
• Monetary limit for non-recovery of tax
  • The monetary limit for non-recovery of tax and interest has been increased from INR 100 to INR 500.

Amendments to Foreign Trade Policy

• Amendments to Forms
  • In light of the implementation of GST and non-issuance of Export Promotion (EP) copy of the shipping bills by the Customs authorities, the government vide Public Notice No. 63/2015-2020 dated 22 February 2018 has amended certain forms. Details of the same are shown in the table below:

SKP's Comments

• In view of the future implementation of e-Way Bill, certain amendments have been brought in the e-Way Bill Rules with a view to provide certain clarifications and relaxations in respect of the procedures to be followed under the e-Way Bill provisions.
• The proposed amendment to allow credit of TDS paid under MVAT by employers is a welcome step. However, further clarification is required on the mechanism and procedural aspects of availing such credit by the contractor.

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