Comments on Indirect part of Finance Bill, 2021

Comment on the amendment in GST:

This “scope of supply” has been enhanced to cover any operation or purchases, for currency,
overdue payments or some other beneficial consideration by undertaking appropriate
amendments, between an individual other than a person and its representatives or
constituents.
For the money, deferral of payment, or other beneficial consideration, the supply of goods by
an unincorporated organization or group of individuals to its member was considered to be
supplied. Services were not included in the entry. All practices, including the provision of
services under GST, were amended. Supreme Court in State of West Bengal vs. Calcutta
Club Limited, 2019 (29) GSTL 545 [SC], held that The identification of contributors
donating that sum for any quantity to be known as surplus should vary and that of participants
obtaining the amount, and this does not apply for a group. Thus the mutuality principles hit
them because no two separate individuals are involved in the transaction accordingly. The
legislature plans to tax that with effect from 01.07.2017 with this provision.
There are four conditions for ITC usage. An amendment stipulated that ITC of the relevant
invoice / debit notice is available only when the same is sent by the supplier in his outboard
delivery declaration i.e., FORM GSTR-1 and transmitted to the recipient, i.e., in
FORMGSTR-2A, in the specified manner.
Only invoices which the supplier uploaded under their respective FORM GSTR-1 under
some circumstances were permitted to ITC by a new regulation 1 from 09.10.2019. The above
rule, which requires the ITC of such invoices, has been challenged by some writ petitions.
The rule thus adopted is ultra vires. Therefore, the instant clause added, however, negates the
contention and reinforces the root of the law. Further, the law's applicability for the time
before the enforcement of the instant clause will still be open to litigation.
Every individual with sales exceeding Rs. 5 Crore is obliged, in addition to the reconciliation
declaration (i.e., form GSTR-9), certification form GSTR-9C of an audited accountant, to
submit the annual report. The audit provision has been removed and, consequently, only an
annual return with an automatic declaration of reconciliation will be expected from the
registered individual.
The alteration in the defacing of GST audit is an audacious move. The company would have
to file its annual return and reconciliation statement from the notified date. Accordingly, only

1
CGST Rules, 2017, Rule 36(4).
the taxpayer himself will be responsible for certifying the activity carried out by a company
from the GST viewpoint. A chartered accountant is also exempted from certification liability.
The taxpayer is also responsible for all transactions and is liable for the chance of an accurate
and appropriate view.
Interest provision has been changed to mean that interest is measured on the net liabilities of
non-payments (Net Liability = Gross Liability (-) Input Tax Credit Utilized).
In the Finance Act, 2019, the provision concerning the deferred payment of liabilities was
adopted, but its implementation was prospective. Moreover, it was promised per the press
release of 26.08.2020 that no interest in the department of GST's deferred amount through the
input tax credit will be collected for the last time. However, it categorically also notes that if
any returns are generated once Show Cause Notice u/s 73 or 74 of the CGST Act, 2017 has
been given, interest must be measured based on gross liability. Because of this new
amendment, however, all situations would have to be analyzed.
Appropriate changes have been suggested to make a special tax collection procedure for
interception and confiscation of goods and transports throughout transit. Suitable changes
were proposed in order to explain that “self-evaluated revenue” requires transactions that, in
their respective declarations, are declared taxable for outward supplies.
The amendment of assessments under procedural changes is a significant relief as it clarifies
that the liability between the FORM GSTR-1 and the FORM GSTR-3B is not subjected to
any penalty.
The power to attach properties was changed by deciding that, for the entire time commencing
with the start of any litigation, the provisional attachment shall remain effective for one year
after the date of order has been issued. In addition, the scope of the appendages is extended to
imply that not only the taxable entity, but also the person who retains advantages of a
transaction and at whose instance the transaction may be carried out may be given
provisionally property by the commisioner, including bank account.
The amendment to the power to attach property plans to assign property except those who
have ITCs for bogus invoices and use them. The same is draconian and can have enormous
consequences if not carried out wisely.
The term zero-rated supply has been amended to state that zero rated supply of goods or
services or both means such supplies provided for authorised operations to a Special
Economic Zone developer or a Special Economic Zone unit. The mechanism for claiming
refund of zero-rated supplies of goods has been amended to state that refund claimed u/r 89
of the CGST Rules, 2017 is linked to the time limit prescribed under FEMA Act, 1999. In
case of non-realization of export proceeds the said refund should be deposited along with
applicable interest. The government can alert the taxpayers who are entitled to make a zero-
rated supply for integral tax payment and tax refund claims. Goods or services which are
exportably liable to payment of integrated tax may be informed by the state and the supplier
may demand the repayment of the tax charged.
Subject to the same provisions for approved operations of SEZ, the supply of products to
SEZ will qualify as zero-rated supplies, which was previously not a pre-condition. As a
consequence, it will not be deemed zero-rated supplies which are supplied to SEZ units.
Therefore, in the light of the principle of provision of supplies for permitted operations, all
circulars, notices, and directions given in the past should be checked. Besides, any stores
made available to SEZ units not eligible for legal service will be subject to GST. It will be
limited to a notified taxpayers community to have ITC's reimbursement facility by making
the option to export commodities with consolidated tax payments for a zero-rated supply of
products or services, which would not apply to everyone.
The supplier shall have a mandate to recover international consumers' export revenue if the
sale of goods and services or both under the LUT or bond without paying tax is zero-rated. If
a sales revenue is not recovered in convertible foreign currency within the deadline specified
under the FEMA Act, 1999, the taxpayer is expected to make deposits within 30 days of the
said deadline's expiry, with the relevant interest. The above provisions reinforce Rule 96B of
the 2017 CGST Rules, which lays down the same conditions.
Comment on the amendment in customs:
The basic customs duty rate is not changed. The rate has therefore adjusted for some items,
which includes the exemptions given in paragraphs as Annex-1.
Agriculture and development infrastructure Cess (AIDC) on the importation of listed
commodities was proposed by Clause 115 of Finance Bill, 2021. Thus, the money is used to
fund improving agriculture and other construction expenses like the cessation process. The
primary customs duty was reduced to ensure that the duty's cessation did not lead to extra
pressure on the customer of most of these goods. The list of such items is classified as
Annex-2.
Any conditional public interest exception will be effective until 31 March falling
automatically 2 years from the date of such a subsidy or adjustment. All present exemptions
in effect at the date that the President's approval of Finance Bill 2021 is issued, except as a
specified date of expiry, will expire for consideration on 31 March 2023 (if not
expanded/rescinded previously).
The provision relating to the time limit of conditional exemption will further inspect all the
unilateral exemptions issued before the day on BCD, IGST, which will also be subject to
periodic examination. Also, a company should schedule its imports in this way. The same
applies to a remarkable amendment first seen under the Customs Act, which requires scrutiny
of all exemptions given up to this date.
To improve the economy and to prohibit IGST reimbursement of theft, confiscations have
been modified to allow for the confiscation of products entered on export in order to make an
incorrect argument in contravention of the Customs Act, 1962 or any other act for which it is
already in effect, according to the claim for remissions or for reimbursement of any duty or
taxes or levies.
The Government has implemented rapid reimbursement programs against exports of products
to facilitate industry. In situations where products were exported, the ITC was reimbursed
with a disadvantage by the customs authorities. The immediate arrangement was incorrectly
examined. Many exporters believed ITC reimbursement for those invoices for which the duty
had not yet been paid to the central Government, causing severe losses to the Government.
Many steps have therefore been taken to recover and curb this revenue. Moreover, there were
also some cases in which the disadvantage was misrepresented. It seems that, after due
consultation, the Government felt that the instant provision needed to prevent an exporter
from exporting products and claiming an indebted IGST refund would lead to the possibility
of confiscation of the disadvantage of goods sold by the Government.
Any person collecting invoice for bribery, conspiracy, wrongdoing or deletion by using input
tax loans on the basis of that invoice will be liable to pay a penalty not exceeding five times
the rebate demand on the goods entered for sale as part of the duty or tax.
The Government is cautious about repayment due to false invoices, which can be understood
by the sequence of changes amending the provisions to refuse the reimbursement, reclaim the
rebates given and finally impose penalties for demanding the refund, which will amount to
five times the repayments amount. The Government is still very grave about repayment based
on fake invoices.
The customs automatic framework can be used as a basis for the revision of documentation
by risk assessment by means of relevant selection criteria. In addition, the importer or
exporter on the common portal may make such changes, as may be defined by the Board.
In cases such as the ICEGAL Portal and products were approved for home use or shipped for
sale, it has been evident from the provisions relating to the rectification of documents that
apply for amending the entry bills or the shipping bill or the export bill already generated on
a customs-based automatic system For its proper application, the structured guidance on the
application will be very much awaited.

Comment on amendments under Tariff

Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995 provide for the method and process of
inquiry into dumping of products which are causing harm to the domestic sector.  Changes
are made to ensure that effective from 01.07.2021 that the ultimate conclusions must be
published at least three months prior to the end of the ADD under consideration by the
appointed authority in review situations. In the event of an anti-circumvention inquiry the
ADD regulations will also be revised to allow for temporary evaluations. Any changes to
explain the nature of certain regulations are being made.
The Customs Tariff (Identification, Evaluation and Collection of Cross-duty on Articles
Subsidized and Determination of Injury) Regulations, 1995 provide for procedurally and in
accordance with rules to investigate cases of imports of subsidised products causing damage
to the domestic sector. The Rules modify to ensure that the final reports of the appointed
authority shall be published at least three months in investigation cases before the CVD under
examination, with effect from 01.07.2021. The preliminary determination of cases of an anti-
circumvention inquiry has since been revised to include the CVD Rules. There are other
changes that make the scope of these regulations simpler.
The 1997 Rules provide for a mechanism to investigate cases of products that are causing
damage to domestic industries in increased amounts. The amendments to rules are proposed
to outline ways of implementing safeguard measures as well as technical adjustments
resulting from previous changes in section 8B of the Finance Act 2020 vide Customs Tariff
Act.
Social welfare surcharge for commodities are also discontinued. Social welfare surcharge is
excluded from the valuation of Gold and Silver levied by AIDC. These products will then
only draw SWS on value and standard customs duties at regular rates.
Anti-Dumping duty is being temporarily revoked on imports of the following:
 “Straight Length Bars and Rods of alloy-steel, originating in or exported from
People's Republic of China, imposed vide notification No. 54/2018-Cus (ADD) dated
18.10.2018;”
  “High Speed Steel of Non-Cobalt Grade, originating in or exported from Brazil,
People's Republic of China and Germany, imposed vide notification No. 38/2019-Cus
(ADD) dated 25.09.2019;”
 “Flat rolled product of steel, plated or coated with alloy of Aluminium or Zinc,
originating in or exported from People's Republic of China, Vietnam and Korea RP,
imposed vide notification No. 16/2020-Cus (ADD) dated 23.06.2020.”
Countervailing duty is temporarily revoked for the term 2.2.2021 to 30.09.2021, levied by
vide notification No. 1/2017-Cus (CVD) of 07.09.2017 on imports of Some Stainless Steel
Roll and Cold Rolled Flat Products originating in or exported by the People's Republic of
China.
Providional Countervailing Duty on Flat Products of Stainless Steel levied vacuum
notification No 2/2020- Customs (CVD) of 9.10.20 is revocated for imports of Stainless Steel
originating in or exported from Indonesia.
In a Sunset Review, anti-dumping duties have been discontinued for Cold Rolled Flat
Stainless steel products with a width from the Republic of Korea RP, the EU, South Africa,
Thaiwan and the United States after the expiry of the previously viable vide notifications No.
61/61/CAD, which are not dumped on or from the People's Republic of China, Taiwan,
Thailand or the United States.