2019-TIOL-GST-252 Dated: Friday, January 18, 2019

GST NEWS

GST AAR CASES

2019-TIOL-14-AAR-GST

Asahi Kasei India Pvt Ltd

GST - Applicant provides sales promotion and marketing supportto Asahi Kasei group and for this they have entered into a services agreement with Asahi Japan and Marketing services agreement with various group companies of Asahi Kasei group - applicant seeks a ruling as to whether such service constitutes "support services" or "intermediary services" and whether the same is an "export of service".

Held: Services provided by applicant in the nature of research on the matter related to functioning of the holding company would fall under SAC 99859 as 'Other support services'; services in the nature of information on market would fall under SAC 99837 as 'Market Research services'; services provided by the Marketing Services Agreement would qualify as an export of services as defined u/s 2(6) of the IGST Act : AAR

- Application disposed of: AAR

2019-TIOL-13-AAR-GST

Asian Paints Ltd

GST - Applicant seeks a ruling on the classification of Tile Adhesives and Tile Grout supplied by them.

Held: Products in question are classifiable under Entry no. 24 of Schedule IV of Notification1/2017-CT and liable to GST @28%: AAR

- Application disposed of: AAR

2019-TIOL-12-AAR-GST

Il And Fs Education And Technology Services Ltd

GST - Applicant is engaged in providing computer training services to the Government aided secondary and higher secondary schools across the State of Maharashtra to implement theInformation and Computer Technology ICT @ School Project - they seek a ruling on the applicability of exemption under Entry no. 72 of notfn. 12/2017-CT.

Held : It is incorrect to dub the entire project as training programme and it is rather a composite supply of goods and services, not naturally but artificially bundled; as per paragraph 1(c) of Schedule II of the Act, any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed is a supply of goods and not a service, therefore, the second condition of the notification is also not satisfied; nonetheless, the source of funding the expenditure is the State government, so except for fulfillment of this condition, the other two conditions are not satisfied - Therefore, Supply of goods and services as made by the applicant under ICT@School project is not in compliance of all the conditions of the exemption, hence the poser is answered in the negative - benefit of exemption 12/2017-CT is not available: AAR

- Application disposed of: AAR

GST HIGH COURT

2019-TIOL-13-HC-KERALA-GST

Popular Vehicles And Services Ltd Vs UoI

GST - Petitioner seeks a direction to the respondents to accept the petitioner's manual filing of revised FORM GST TRAN-I and the resultant FORM GST TRAN-2 in view of the error in filing the same on account of the technical reasons - respondents submitted that they have no objection in allowing the petitioner's request in view of the fact that it occurred on account of the technical reasons - Petitioner further submits that they would submit FORM GST TRAN-I and FORM GST TRAN-2 before the fourth respondent manually and the fourth respondent may be directed to transmit it into electronic credit ledger of the petitioner.

Held: Fourth respondent is directed to accept FORM GST TRAN-I and FORM GST TRAN-2 from the petitioner manually (to be filed within one week) and the fourth respondent shall accept and transmit it into the electronic credit ledger of the petitioner within a further period of one week - Writ petition is disposed of: High Court

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-12-HC-DEL-GST

Varun Traders Vs UoI

GST - Petitioner's grievance was that its GSTIN registration was cancelled - by previous orders, the High Court had directed Revenue to explore possibility of opening the GST portal and reinstating the GSTIN - Bench is informed that the portal was opened and the petitioner's GSTIN has been reinstated - relevant returns filed by the petitioner and the intimation copy is produced before the Bench - Therefore, the writ petition is rendered infructuous - Petition is dismissed: High Court

- Petition dismissed: DELHI HIGH COURT

2019-TIOL-11-HC-KERALA-GST

Coastal Freez Tech And Sanitaries Vs GST Council

GST - Petitioner attempted to upload FORM GST TRAN-1 within time but could not because of some system error - Petitioner seeks directions to enable him to take credit of the available Input tax.

Held: Paragraph 5 of the Circular 39/13/2018 dated 03.04.2018 outlines the procedure, the Nodal Officer has to follow in case a taxpayer faces due to technical glitches on the GST portal - Petitioner may, therefore, apply to the sixth respondent, the Nodal Officer and, thereafter, the Nodal Officer will look into the issue and facilitate the petitioner's uploading FORM GST TRAN-1 - if the petitioner applies within two weeks after receiving this judgment, the Nodal Officer will consider and take steps within a week thereafter - If the uploading of FORM GST TRAN-1 is not possible for reasons not attributable to the petitioner, the authority will also enable him to take credit of the input tax available at the time of migration - Petition disposed of: High Court [para 3, 6]

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-10-HC-ALL-GST

Shaurya Enterprises Vs State of U P

GST - Vide seizure order dated 25.3.2018, the respondent No. 2 has indicated that the goods and vehicle has been seized on the ground of non availability or non submission of E-way bill - Petitioner informs that they have complied with the requirement of submission of E-way bill and the same has been produced immediately after interception of the vehicle, therefore, there was no ill intention on the part of the petitioner nor the petitioner stands benefited in any manner whatsoever in not accompanying the E-way bill - Petitioner has also challenged the show cause notice issued under Section 129 (3) of the Act by which the respondent No. 2 has proposed to impose the penalty to the extent of Rs. 1,42,560/- i.e. equal to the liability of tax which has been assessed at the rate of 18% on the value of the goods.

Held: High Court fails to understand as to why the authority has not considered all the aforesaid relevant facts and has arrived to a conclusion that the transaction in question was not a bonafide transaction and has seized the goods and vehicle - Admittedly, till 31st March, 2018 it was not mandatory to download the E-way bill from the official portal - High Court finds substance in the submission of the petitioner that only with effect from 1st April, 2018 the requirement of downloading of the E-way bill is compulsory - However, without going into the said controversy at this stage, as the goods were bonafidely dispatched and are travelled from Raipur for the delivery at Basti, same are illegally and arbitrarily detained by the respondent No.2 - No reason in seizing the goods and asking for penalty - order dated 25.03.2018 passed under Section 129 (1) of the Act and the show cause notice issued under Section 129 (3) of the Act are hereby set aside - Writ Petition is allowed: High Court

- Petition allowed :ALLAHABAD HIGH COURT

2019-TIOL-09-HC-ALL-GST

Singh Tyres Vs State of U P

GST - Consignment was booked by the petitioner for transportation from Allahabad to Mirzapur - It is claimed that requisite documents were accompanied during the course of movements of the goods, however, the Assistant Commissioner (Incharge), Commercial Tax, Mobile Squad, Unit-1, Mirzapur, U.P. has intercepted the goods on 27.03.2018 and has issued a notice/detention memo under Section 129(1) of the Act - According to the petitioner, he was not aware about the requirement of E-Way Bill for the purposes of transportation of goods from one place to another place within the State of U.P. - claim of the petitioner is that he has downloaded the EWay Bill on 27.03.2018 from the official department portal and produced the same before the respondent, however, respondent no. 2 has illegally proceeded to pass impugned seizure order ignoring the relevant fact that he himself has directed the petitioner to appear and file his reply before him on 28.03.2018 at 11-00 a.m. whereas the impugned seizure order has been passed on 27.03.2018, hence the same is illegal and is liable to be quashed.

Held: Impugned seizure order cannot sustain in the eyes of law as the same has been passed ignoring the fact that the time and date has been given by the respondent no. 2 to the petitioner for appearance and for production of the relevant documents on 28.03.2018, whereas the order has been passed on a day before the date allowed by the respondent no. 2 - no time has been mentioned by the respondent no. 2 whereas while issuing notice/detention memo he has specifically mentioned the time and which clearly goes to show the ill intention on the part of the respondent no. 2. - In view of above, the seizure order dated 27.03.2018 passed by the respondent no. 2 as well as consequential notice issued under Section 129(3) of the Act are quashed - respondent no. 2 is hereby directed to release the goods and the vehicle forthwith - Petition allowed: High Court

- Petition allowed :ALLAHABAD HIGH COURT

2019-TIOL-08-HC-ALL-GST

Super India Global Logistics Ltd Vs State of U P

GST - Goods were being moved from Gwalior (M.P.) to Zirkpur (Punjab) and while the vehicle was passing through State of U.P. (Agra), it was intercepted by the respondent - Physical verification of the consignment was carried out on the same date i.e. on 23.03.2018 and when no irregularity was detected, only on the basis of the non-availability of Transaction Declaration Form (T.D.F.), the goods were seized and penalty notice under Section 129(3) of the UPGST was issued - Petitioner contends that after amendment of C.G.S.T. Rules, 2017 on 30.08.2017, vide another notification dated 29.12.2017 containing the E-way Bill system which was to come into force w.e.f. 01.02.2018, the notification dated 29.12.2017 requiring T.D.F. to accompany with the consignor was rescinded and, therefore, no T.D.F. was required.

Held: Issue being settled by a Division Bench of this Court in the case of Satyendra Goods Transport Corporation - 2018-TIOL-190-HC-ALL-GST impugned seizure order dated 24.03.2018 passed by respondent under Section 129(1) of the Act, 2017 and consequential notice issued under Section 129 (3) of the said Act are rendered illegal and are not liable to be sustained and are hereby quashed - Seized goods and vehicle shall be released forthwith on production of a certified copy of this order - Petition allowed: High Court [para 6, 7]

- Petition allowed :ALLAHABAD HIGH COURT

2019-TIOL-07-HC-KERALA-GST

Noushad Allakkat Vs State Tax Officer (WC)

GST - Appellant, a dealer in timber, purchased goods inter-state and while the goods were transported, it was detained within the State of Kerala - invoice accompanying showed collection of CGST and SGST, which is leviable on an intra-state sale, therefore, goods were detained and notice was issued - consequently, an order was passed u/s 129(3) of the IGST Act demanding tax applicable of IGST and imposing penalty for non-production of goods u/r 140 of the CGST Rules - appellant had obtained provisional release of goods by furnishing bank guarantee for the applicable tax and penalty as also bond for production of goods and security for vaue of goods - order was challenged in a Writ Petition and the Single Judge found there was no reason to invoke the extra-ordinary jurisdiction under Article 226 of the Constitution when appellate remedy was available - appeal before Division Bench against this order.

Held: Appellant had specifically challenged Rule 140(2) of the CGST Rules - In such circumstances, it would have been appropriate, even if refusing to interfere with the impugned order on grounds of efficacious alternate remedy being available, to independently consider the challenge against the Rule itself - production of goods under Rule 140 is only for invocation of confiscation proceedings, which would not be necessary if the security equivalent to the value of the goods is furnished under Rule 140, in case of detention under Section 129 - Writ Appeal disposed of confirming the order of the Single Judge refusing to exercise discretion under Article 226 in interfering with an order, which could be properly challenged in an alternative remedy - it is made clear that the non-production of goods as noticed in the order is not a ground for imposition of penalty: High Court [para 7, 9]

- Writ Appeal disposed of : KERALA HIGH COURT

GST NAA CASE

2019-TIOL-02-NAA-GST

Surya Prakash Loonker Vs Excel Rasayan Pvt Ltd

GST - Anti-Profiteering - S.171 of the CGST Act - Allegation is that the respondent did not pass on the benefit of reduction in the GST rate applicable to detergents from 28% to 18% w.e.f 15.11.2017 but increased the base prices so that there was no reduction in the prices to the recipients - Respondent submitting that he was availing SSI exemption under Central Excise and charging VAT @12.5% on the base prices; that on introduction of GST, 28% tax was levied and since this disturbed his pricing pattern, he had reduced the base price and absorbed the burden and when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017, though the base prices were increased, they were much less than the base prices in the pre-GST era.

Held: Argument of the respondent does not hold good as decision not to increase MRPs when tax rates were increased on account of implementation of GST was a business call taken by him and, therefore, he cannot claim any concession on this ground - benefits arising due to the GST rate reduction cannot be denied to the consumers just because in the earlier scenario MRPs were not changed to extend some extra benefit to consumers - report of DGAP reveals that the base price of the products has been increased irrespective of the fact that there was GST rate reduction from 28% to 18% - Respondent has admittedly not passed on the benefit of tax reduction since the base prices of the products were increased to maintain the same selling prices which were existing before the reduction of rate of tax - respondent is liable to pass on the benefits to the recipients irrespective of the fact whether the base prices are still lower as compared to the pre-GST price or not - since respondent has admittedly accepted the fact that there was no reduction in the prices post 15.11.2017 on any of the products sold by him, they have violated the provisions of section 171 inasmuch as the prices have remained the same inspite of reduction in tax rate - plea that base prices were drastically lowered when GST came into effect cannot absolve him from not passing on the benefit - Profiteering proved - respondent directed to immediately reduce the sale prices of the product commensurate to the reduction in rate of tax - the profiteered amount of Rs.4,64,849.74 as computed by DGAP is ordered to be deposited in the Consumer Welfare Fund along with interest - respondent is liable to penalty under Rule 133 of the CGST Rules, 2017 for the offence commited u/s 122 of the Act - notice to be issued to respondent asking him to explain why penalty should not be imposed: NAA

- Application disposed of: NAA

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