There is some confusion regarding applicability of
GST on services provided by crypto exchanges. What do
you have to say?
Our interpretation is that there is clarity in the law
and the commission paid to the operator or an exchange,
which is providing a platform for transaction in digital
currency, is in a view of service he provides to the
users of that platform and, therefore, it is the supply
of service which is chargeable to GST
What happens when an Indian resident transacts on
crypto exchanges located abroad?
In case of exchanges that are located abroad, the
provision is that the place of supply of service would
be India because the recipient of service is in India
and, therefore, he will be liable to pay GST on reverse
What kind of benefit do you see after doing away with
many exemptions under Custom duty?
In a follow-up to the Finance Minister’s announcement in
the last Budget for review of Custom duty exemption, we
have been consulting with other Ministries, stakeholders
and with general public. We had identified list of about
400-plus exemptions, which we put out in public domain,
and we invited comments from the industry. Side by side,
we also collected data on what is the extent of
utilisation of these exemptions and who the
beneficiaries are. The good news is that on the basis of
all these analysis and consultations, we discovered that
there were 400 exemptions and entries, which we are in
position to remove; either they have become redundant or
because the utilisation level is very low or because the
benefit is not going to the right beneficiaries. These
exemptions have been withdrawn.
What has been done with some unconditional
There were some unconditional exemptions, which we were
operating through notification, and the result of that
very often was that it was difficult for you, as users,
to easily find out what is rate of duty applicable to
particular items because there was rate prescribed in
tariff which we call tariff rates; then there were
exempted rates for which they have to look for a
notification and unless it was covered by a
notification, it was difficult to ascertain the rate.
Now, what we have done is, as part of this review, a
very large number of unconditional exemptions, which we
have built direct into tariff schedule and exemptions,
will be removed once the Finance Bill is enacted.
What are the changes in end-use based exemption
We have redrafted imported goods at concessional duty
rules, and we have simplified the procedures; so, now it
is completely automated. Earlier, if an importer or the
manufacturer needed to import something, it was based on
end-use condition. He had to file an intimation with his
local custom or GST authorities, who, in turn, would
pass this intimation to the custom authorities at the
port. Thereafter, every time the import was made, that
intimation has to physically debited and that account
had to maintain by the importer and the Custom House.
So, this whole process was quite cumbersome. It required
physical interface between taxpayers and the department.
What we have replaced it with now is a completely
automated system. So, the user of an end-based exemption
can just straightaway file and intimation online, which
will automatically be transmitted to the Custom
authorities. Every time an import is made, the debit is
done automatically on the system and gives clear
visibility to the importer as well as the administration
about the volume of import so far under the exemption.
Finally, the return, the taxpayer is required to file
with regard to these items, a large part of that can be
auto populated now.
What are the changes in project import system?
I want to clarify that we have not removed project
import as an entry because there was misconception that
benefit of project import facility is being withdrawn,
that has not been withdrawn. Even with the change in
duty rate, the benefitting of importing goods that is
required for a project under one umbrella at a uniform
rate of duty will continue.
When we undertook the exercise of reducing tariff as
part of reforms in early 90s and went on for 20 years
and terminated finally with duty structure of 2007, it
was agreed that based on recommendations of many experts
that 7.5 per cent tariff rate with a graded structure
where the basic raw material is at 5 per cent,
intermediate at 5 per cent, capital goods at 7.5 per
cent and finished consumer good at 10 per cent was
moderate level of tariff which will provide adequate
protection to domestic industry. Therefore, for capital
goods and project imports, the standard rate that was
applicable was 7.5 per cent. But over a period of time,
depending on requirements of domestic economy and need
to give a fillip to certain sectors, where investment
was necessity, we had dropped the duty from 7.5 per
cent. For example, coal mining projects, power
generation projects, food processing projects etc, where
the duties have been dropped below 7.5 per cent.
The stated policy of the government is to take the share
of manufacturing to 25 per cent from 17 per cent and
many policy initiatives have already been taken to see
manufacturing get encouragement, whether under
Aatmanirbhar Bharat or Make in India program. So,
capital good is one area of concerns where there is
realisation that there is enormous potential for
manufacturing them in the country. The capital goods
policy, which came out in 2016, was also designed to
meet the same objective. Now what we have done this year
that we have taken that initiative forward and we feel
that by applying moderate level of tariffs to projects
and capital goods, it will provide level playing field
to domestic manufacturers of capital goods and it will
reenergise the sector.
Source::: THE HINDU BUSINESS LINE,