Indirect Tax & ​Foreign Trade Insights - Issue 04

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Foreword

Dear Patrons,

In this fourth edition of our weekly newsletter - Indirect Tax & Foreign Trade Insights, we are sending you the matters unfolded in the week passed by. These simple, concise, and relevant updates are aimed to streamline the process for you, the tax stakeholders, to keep you on top of the changes taking place in this IDT ecosystem.

The department has taken a clause from the GST law very seriously to tax activities between related persons even if made without consideration. As many as ten airlines have been issued notices to explain why the support from their head office in managing Indian operations should not be considered as a taxable supply taxable under RCM. Not only airlines, any subsidiary of a foreign company may be a stakeholder to these proceedings as these developments are bound to affect the Industry as a whole.

In another, almost seven years since the launch of GST, Industry is still grappling with the provisions of anti-profiteering law. After recently the Delhi HC upholding the constitutional validity of the anti-profiteering provisions, the SC against a petition filed, has called the Central Government, CBIC and GST Council to be a party to the proceedings for deciding the matter once and for all.

Highlights

• DGGI issues summons to Indian offices of Foreign airlines alleging GST evasion

• SC issues Notice to the Central Government, GST Council and CBIC to involve them in proceedings on anti-profiteering

• DGFT implements mapping of existing export policy for Chapters 1-39 of Schedule 2 with 8-digit ITC (HS) Code w.e.f. 13th Feb 2024

• DGFT amends the Handbook of Procedures with respect to clubbing of advance authorizations

Period Covered: 12 Feb 2024 to 18 Feb 2024

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