Page 34 - GSTL_16th July 2020_Vol. 38_Part 3

J76 GST LAW TIMES [ Vol. 38
3 Claimed exemption of BCD and If exporters want to shift to refund un-
IGST on the procurements under der 2nd option, the IGST component
any of the aforesaid notifications has to be paid back along with interest
and avail ITC. However, it is possible
that the department officers may not
accept this process and reject payment
of refund which would lead to litiga-
tion. Otherwise, they can continue with
1st option i.e. exports under LUT and
claim ITC refund.
4 For procurements of inputs in Avail BCD exemption and pay IGST at
future the time of procurement. Can make
exports under either of the option i.e.
LUT or with payment of IGST and
claim refund of it.

However, there is still an ambiguity on the periodicity and extent of re-
striction i.e. till what period the restriction is going to be applied. For example,
exporters would have availed exemption initially but later stopped claiming ex-
emption. In this background, whether this restriction applies only to the extent of
exports made using such GST free stock. Logically and conceptually, the answer
should be affirmative but the rule lacks clarity. Suitable clarification may be is-
sued clarifying the same in order to avoid future disputes.
Further, certain Customs ports are not allowing the practice of only
claiming BCD exemption and paying IGST. Therefore, it is recommended to
make suitable clarification under Customs law to give full effect to the above
provisions.
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[Continued from page J65]

The advance ruling authorities at Karnataka and Rajasthan did not ex-
amine the terms and conditions of employment of the persons who are appoint-
ed as directors of the company but took the easy way out by placing reliance on
the notification issued by the Government of India and holding that the tax was
payable by the company on reverse charge basis on the value of the services pro-
vided by the director of the company to the company or body corporate. This
view of the advance ruling authorities seems prima facie wrong and may require
reconsideration in the light of the principle stated by the Supreme Court and by
the Customs, Excise and Service Tax Appellate Tribunal.

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GST LAW TIMES  16th July 2020  34