FLASH NEWS

GST - ITC to be restricted if outward supplies details not filed + New Return Format to be put in place from April 1, 2020 + Circular 105/2019 rescinded + Single Refund Authority to function from Sept 24 + Fake invoices - New provisions to be put in place to curb ITC utilisation by risky and new assessees

GST - Rate changes and clarifications to come into force from Oct 1, 2019 + Committee to be set up to simplify GSTR-9; GSTR-9A waiver granted

Book authors get option to pay GST on royalty on forward charge basis + Liquor licence to be treated as 'no supply' + Passengers development fee & user fee by airport operators to be taxed

GST rate on job work in relation to diamond reduced to 1.5% + 12% rate for machine-based job work and 18% on job work for bus body building

GST Council decides to reduct tax rate on hotel accommodation tariff - NIL rate for Rs 1000/- per day + 12% rate for between Rs 1001 to Rs 2000/- and 18% for above Rs 7500/- per day tariff + 5% rate on outdoor catering service without ITC

Tax on fish meal - Exemption granted from July 2017 to Sept 30, 2019

GST Council's 37th meeting decides to reduce tax rates on items like marine fuel, cut & polished stones; IGST Exemption to certain imports by Defence & International Football tournament

Jewellery exports - Diamond India gets IGST exemption for import of raw materials

GST rates hiked from 5% to 12% on goods falling under Chapter 86 to neutralise accumulated ITC + Caffeinated Beverages from 12% to 28%

GST - Aerated drinks exempted from composition scheme but to attract 18% rate + Solar items to attract 5% tax rate + Almond milk to attract 18% rate

GST Council decides to grant waiver to small assessees up to Rs 2 Crore turnover from filing GSTR-9 + Committee set up to simplify Annual Return for assessees of above Rs 2 Cr turnover and then last date to be notified

GST - Even God himself did not pass sentence upon Adam before he was called upon to make his defense - Natural justice is another name for common-sense justice: HC

GST Council - Goa Meet continues; Tax rate cut for few dozen goods & services being debated

 

TOP NEWS

GST Council extends benefits to services sector in mega way

GST Council clarifies on taxability of certain goods; exemption also granted to many

GST Council extends last date for filing appeals against GST Appellate Tribunal

FinCom Advisory Council discusses GST related issues

GST - Drive against fraudulent refund continues; More arrests made

 

GST CASES

HIGH COURT CASE

2019-TIOL-2188-HC-MAD-GST

Revenue Bar Association Vs UoI

GST - The present writ petitions were filed seeking to quash the provisions in Chapter XVIII of the Tamil Nadu Goods and Services Tax Act, 2017, particularly Sections 109 and 110 of the Act, on account of their being void, defective and unconstitutional and as they contravene the provisions of Articles 14, 21 and 50 of the Constitution - The provisions of Section 109 and 110 pertain to the constitution of the Appellate Tribunal and the qualification, appointment and condition of service of its members - Section 109(2) provides that the National Bench of the Tribunal would be presided over by the President and a Judicial Member and a Technical Member - The Govt can also constitute regional benches comprising of a Judicial Member, one Technical Member (Centre) and one Technical Member (State) - Section 110 prescribes the qualification, appointment & conditions of service of the President and members of the Appellate Tribunal - The President would be a retired judge of the Supreme Court or a serving or retired Chief Justice of any High Court or serving or retired judge of a high court with at least five years of service under the belt - The qualification of Judicial Member have been prescribed as a judge of the High Court or a serving/retired District Judge qualified to be appointed as High Court judge or a member of the Indian Legal Service holding the post not less than Additional Secy for not less than three years - The Technical Member (Centre) is described as a serving or retired member of the Indian Revenue (Customs or Central Excise) Service, Group A, with at least 15 years of service - The first challenge to the validity of these provisions is the exclusion of lawyers from being appointed as Judicial Members, which the petitioners claim to be an existing practice followed by other Tribunals - The petitioners also challenged the consideration of members of the Indian Legal Services for being appointed as members of the Tribunal - The petitioner further challenged the composition of the Appellate Tribunal of there being two Technical Members and one Judicial Member - It was claimed that in such a position, the Technical Members could overrule the Judicial Member.

Held - Regarding the exclusion of advocates from being considered for appointment as Judicial Members, though the constitutional validity of Section 110(1)(b) cannot be struck down for this reason alone, the Union of India yet must evaluate why it departed from the existing practice - Advocates are eligbile for be appointed as Judicial Members in the ITAT, which is the nation's oldest Tribunal - Lawyers are also eligible to be appointed as Judicial Members in the CESTAT - The Apex Court in R K Jain Vs Union of India held that members of the Tribunal must have a judicial approach as well as knowledge & expertise in the particular branch of law - A lawyer having 10 of practice would be well equipped to grapple with legal issues - Besides, no reason is given by the UoI for excluding advocates from the zone of consideration - Keeping in mind the existing practice of appointing lawyers as Judicial Members in various Tribunals, it is recommended that the Parliament reconsider the eligibility of lawyers to be appointed as Judicial Members in the GSTAT: HC

Held - Regarding the challenge to the appointment of a member of the Indian Legal Services who held a post not lower than Additional Secretary for a period of three years, is no longer res integra - The Apex Court in Union of India Vs R Gandhi categorically held that a person holding any position under the Indian Legal Service cannot be considered for appointment as Judicial Members - Even though such findings were given in the context of members of the NCLT and NCLAT, such dictum of the Apex Court also applies to the GSTAT constituted under the CGST and TNGST Acts - Hence members of the Indian Legal Service cannot be considered for appointment as Judicial Members - This is because the issues likely to b raised before the GSTAT would not merely be technical matters which do not involve any interpretation of law or adjudication based on legal principles - There is no difference from the standard applied to eligibility of members appointed to the NCLT/NCLAT and those to be appointed to the GSTAT: HC

Held - Regarding the composition of the GSTAT, all cases arising before the CGSTAT or TNGSTAT deal with adjudication of cases against the State - In such circumstances to have more expert members would raise a reasonable apprehension in the minds of the assessee that they might not receive fair justice and that the decision making process might be so oriented so as to favor the State - Moreover, as the GSTAT is replacing the CESTAT, Sales Tax/VAT Tribunals, the composition of the GSTAT must be on the same lines - Article 50 of the Constitution must be interpreted in such a way that the dominance of the Technical Members does not outweigh the Judicial Members - The GSTAT would take over issues initially dealt with or adjudicated by courts - These issues were settled by Judicial Officers - In light of the same, the Tribunals which decide issues between the State and citizens cannot be run by a majority consisting of non-judicial members - Out of the three members, only one is a Judicial Member & the other two members are Technical Members, who would ordinarily possess little experience in law, though they might be otherwise adept in the understanding of the taxing statute - It is settled law that alternate mechanisms created to exercise judicial functions must not be less effective than the High Court - To be as effective as a High Court, such institution must have powers akin to a High Court and also be able to exercise judicial functions like a High Court in the sense of being impartial and independent: HC

Held - Section 110(1)(b)(iii) of the CGST Act enabling a member of the Indian Legal Service to be considered for becoming a Judicial Member in the GSTAT, is struck down - Section 109(3) and 109(9) of the CGST Act 2017 prescribing the composition of the GSTAT to include one Judicial Member and two Technical Members, are quashed - Challenge to vires of Section 109 & 110 of CGST Act and TNGST Act, for excluding advocates from consideration for appointment as Judicial Members in the GSTAT, is rejected - However, Parliament may reconsider such issue: HC

- Writ petitions disposed of: MADRAS HIGH COURT

2019-TIOL-2178-HC-MAD-GST

Komos Automotive India Pvt Ltd Vs STO

GST - Petitioner challenges the goods detention notice issued u/s 129(3) of the Act - They submit that though the present petition is filed challenging the goods detention notice on the ground of detention the fact is that the subject goods were already released upon they executing a bank guarantee for Rs.18 lakhs and, therefore, the petition be disposed of by granting liberty to work out remedy in adjudication proceedings.

Held: In view of the fact that the challenge made in this writ petition is only against the goods detention notice and that the goods are also released by proceedings dated 05.03.2019, it is for the petitioner to work out his further remedy, if any, by pursuing the same before the appropriate authority in a manner known to law - Petition disposed of: High Court

- Petition disposed of: MADRAS HIGH COURT

2019-TIOL-2175-HC-KAR-GST

Kalebudde Logistics Vs CTO

GST - Respondents initiated proceedings under Section 129 of the Karnataka Goods and Services Tax Act, 2017 and an order was passed directing the petitioner to pay tax and penalty within seven days, failing which action under Section 130 of the Act shall be initiated - petitioner made a representation requesting for release of goods and conveyance but the same was rejected on the ground that confiscation proceedings are pending - petitioner before High Court - Counsel for Revenue points out that the petitioner has filed appeal before the Joint Commissioner of Commercial Taxes (Appeals), Navanagar, Hubballi, Dharwad Division against the order dated 20.05.2019 passed by CTO and that in the appeal itself the petitioner could seek release of goods involved.

Held: When the appeal is pending against the main order, the petitioner could not have filed writ petition for release of goods which are subject matter of appeal - Section 129 and 130 of the Act provides for release of goods on payment of fine - It is open for the petitioner to seek appropriate interim relief in the pending appeal, if law permits - Writ petition is rejected: High Court [para 3, 4]

- Petition rejected: KARNATAKA HIGH COURT

2019-TIOL-2174-HC-KAR-GST

Manjunatha Designer Tiles Vs UoI

GST - Petitioner has sought for a direction to the respondents to re-open the GST common portal for rectifying Form GST TRAN-01 and thereafter file Form GST TRAN-02 in the common portal – Counsel for Respondent submits that the Nodal Officer has taken a decision and recommendation has already been forwarded to the GST Network to permit the petitioner to rectify the GST Form TRAN-01 as prayed.

Held: Process having been initiated for permitting the petitioner to rectify the GST Form TRAN-01 and to file Form GST-TRANS-02 as recommended by the Nodal Officer, no further direction as sought for, is necessary - respondent No.3 shall expedite the process and compliance be made, preferably within a period of eight weeks: High Court [para 5, 6]

- Petition disposed of: KARNATAKA HIGH COURT

2019-TIOL-2173-HC-ALL-GST

Swastik Traders Vs State of UP

GST - Demand of tax and penalty and seizure of goods and vehicle - From the perusal of the record, the position which emerges is that the judgment and order dated 12.03.2019 Additional Commissioner, Grade-II (Appeals) Ist, Commercial Tax, Ayodhya has been passed without hearing the petitioner, as such, the same is in violation of principles of natural justice - Natural justice is another name for common-sense justice - Even God himself did not pass sentence upon Adam before he was called upon to make his defense - golden rule which stands firmly established is that the doctrine of natural justice is not only to secure justice but to prevent miscarriage of justice - adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue - matter is remanded back to the Appellate Authority to decide the same within a period of eight weeks from the date of receiving a certified copy of this order: High Court [para 7 to 19]

- Matter remanded: ALLAHABAD HIGH COURT

2019-TIOL-2166-HC-DEL-GST

HCL Infostystems Ltd Vs UoI

GST - Refund - Petitioner stated that though the amount claimed by the Petitioner was sanctioned, the same was subsequently rejected by a one line communication dated 22.07.2019 without disclosing any reason for the rejection - High Court entertained the petition looking at the manner in which the rejection of refund had taken place and had directed the respondents Principal Chief Commissioner and Special Commissioner, Delhi GST to remain personally present in Court with the complete record relating to Petitioner's case, to explain as to why the refund, which had earlier been sanctioned, had now been rejected - counsel for respondent Revenue during the hearing conceded that no prior hearing was given before the said rejection and submits that if the order of rejection is set aside, they are willing to grant hearing and, thereafter, pass a reasoned order.

Held: Order dated 22.07.2019 rejecting the refund claim of the Petitioner, since the same has been passed without hearing the Petitioner and, admittedly, is unreasoned, is set aside - competent officer to grant personal hearing and a reasoned order is to be passed within two weeks - Insofar as the directions issued during the last hearing asking the Principal Chief Commissioner and Special Commissioner, Delhi GST, to remain personally present, the Bench records that there is non-compliance of this order - there is no explanation as to why respondent no. 4 viz. Principal Chief Commissioner is not present in Court - Counsel assures that on the next date, Respondent No. 4 shall remain present in Court - since the earlier incumbent (respondent no. 5) has been transferred and the new officer has still not taken charge, Commissioner Delhi GST to remain present on the next date - Matter to be listed on 18.10.2019: High Court [para 6, 9]

- Matter listed: DELHI HIGH COURT

2019-TIOL-2165-HC-MAD-GST

Chaizup Beverages LLP Vs DCGST & CE

GST - Petitioner is an exporter of tea - Petitioner purchased sacks and tea from various tea factories remitting IGST, CGST and SGST thereupon - The tax so paid was credited in the Electronic Credit Ledger - Exports were undertaken without payment of IGST on execution of a Letter of Undertaking and under a claim for drawback - The claim was sanctioned and the drawback paid over to the petitioner - Later, Refunds sanctioned, allegedly erroneously of IGST and CGST, were ordered to be recovered - Petitioner filed appeals challenging the orders of rejection before the Commissioner of GST & Central Excise, Coimbatore on 04.08.2018 along with a deposit of 10% of the disputed amount by way of statutory pre-deposit made on 09.08.2018 - While this is so and pending the appeals, the petitioner filed refund claims for the unutilized credit for the months March to July, 2018 - After adjusting the outstanding dues, the balance amounts were sanctioned - Petitioner before High Court - Respondent Counsel submitted that they were unaware of the filing of the appeal by the petitioner challenging order dated 14.06.2018 reversing the refunds sanctioned and moreover, there, was no stay of the order of reversal of the refunds granted.

Held: Such averment is contrary to the provisions of Section 107(7) of the CGST Act, 2017 which provides that where 10% of disputed amount has been remitted by way of pre-deposit, the recovery of the balance amount shall be deemed to be stayed - petitioner has admittedly remitted 10% of the amounts demanded in order dated 14.06.2018 on 09.08.2018 as pre-deposit and no recovery shall be effected in regard to the balance of the demands that shall be deemed to be under an order of stay - adjustment of the refund is, therefore, not proper - counsel for the respondent, fairly, does not defend the impugned order but only requests some time to refund the amount wrongly adjusted - Bench allows three weeks time to do so - Writ petitions allowed: High Court [para 8 to 11]

- Petitions allowed: MADRAS HIGH COURT

2019-TIOL-2164-HC-DEL-GST

Lease Plan India Pvt Ltd Vs Govt NCT Delhi

GST - Case of the petitioner is that though the petitioner had filed its TRAN-I Form before the cut-off date i.e. 22.12.2017, due to inadvertent error, the petitioner had claimed ITC of Rs. 2,23,18,390/- instead of Rs. 3,99,49,705/-; that soon upon realising the said bona fide mistake, the petitioner sent an e-mail on 04.01.2018 to the GST Help Desk and requested for grant of opportunity to amend the GST TRAN-I Form; that the petitioner, thereafter, sent reminder but to no avail; that since the petitioner's grievance remained unaddressed, the petitioner has preferred the present writ petition - application has been moved by the petitioner for issuance of directions in view of the order passed in M/s Blue Bird Pure Pvt. Ltd. = 2019-TIOL-1564-HC-DEL-GST .

Held: Counsel for the respondents fairly does not dispute the position that the present case is covered by the decision in M/s Blue Bird Pure Pvt. Ltd. (supra) - Bench also notes that the credit standing in favour of an assessee is property and the assessee could not be deprived of the said property save by authority of law in terms of Article 300 (A) of the Constitution of India - Moreover, there is no law brought to the notice of the Bench which extinguishes the said right to property of the assessee in the credit standing in their favour - respondent is, therefore, directed to either open the online portal so as to enable the petitioner to file the rectified TRAN-I Form electronically or to accept the same manually with correction, on or before 20.09.2019 - petitioner's revised claim is to be processed in accordance with law once the corrected TRAN-I Form is filed - Petition disposed of: High Court [para 4 to 7]

- Petition disposed of: DELHI HIGH COURT

2019-TIOL-2158-HC-MUM-GST

Bai Mamubai Trust Vs Suchitra

GST - The issue at hand in the present suit pertains to the levy of GST in matters where the Court Receiver is appointed by the Bombay High Court under Order XL of the Code of Civil Procedure (CPC) - The plaintiff had filed suit for recovery of possession of three shops, where it carried on a business of running a restaurant - The suit proceeded on the cause of action of trespass - Thereafter, the plaintiff filed Notice of Motion in this suit for interim relief - Thereupon an order was passed, wherein the preliminary issue of limitation was framed and pending determination, a court receiver was appointed as received of the suit premises - Such court receiver was directed to take formal possession of the suit premises & also to not disturb the physical possession of the defendant - The defendant was permitted to retain possession of the suit premises as an agent of the Court Receiver under an agency agreement to be executed with the Court Receiver, on payment of monthly ad-hoc royalty amount - The plaintiff raised concern regarding applicability of GST on such royalty amount - Thereafter, the original order was modified, directing the defendant to pay the royalty amount with applicable GST - The court receiver then filed a report, from which certain issues arose, including - a) whether GST is payable on services rendered by court receiver appointed by the Bombay High Court under Order XL of CPC; b) whether GST -s payable on the royalty or payments under a different head paid by a defendant to the court receiver; c) whether where the plaintiff alleges that the defendant is in illegal occupation of the suit premises, can it be said that there is any supply as per the CGST Act and if if payment of such royalty for retaining possession over the suit premises fell within the ambit of consideration for supply, attracting GST u/s 9 of the CGST Act; d) if any GST is found to be payable, whether the same is payable by the defendant partly in occupation directly, or by the court receiver.

Held - Status of court receiver - The decision in Shakti International Pvt Ltd holds that the status of the court receiver appointed by the High Court of Bombay, is that of an employee or a department of the High Court and who is subject to the administrative control of the chief justice of the court - Hence the office of the court receiver was held to be an establishment of the High Court and a permanent department of such court - Since the office of the Court Receiver is an establishment of the High Court and a permanent department of the High Court, it is necessarily an adjunct of the Court through which the orders of protection issued by the Court are given effect to - The submission of the Amicus Curiae, that fees of the court receiver fell within Item 2 of Schedule III to the CGST Act, as it is for a service provided by an officer of the court, must be accepted - Hence this service cannot be treated as supply of goods or services within the meaning of the CGST Act - Ergo, the fees or charges paid to the court receiver will not attract GST: HC

Held - GST on estates controlled by court receiver - Pursuant to a reading of Section 82 of the CGST Act, it emerges that the actual issue is the effect of payment of royalty by the defendant to the court receiver as a condition for retaining possession of the suit premises - Although the measure for quantifying a payment of royalty to the Court Receiver may be determined by looking at consideration payable under a contract or arising out of a business relationship, the royalty may still be in the nature of payments towards a potential award of damages or Mesne Profits, and therefore not liable to attract GST - Moreover, although the quantification of royalty towards a claim of damages involves ascertaining the market rent payable with respect to the property alleged to be illegally occupied, the compensation payable does not acquire the character of consideration so as to make the transaction a supply - Also, there can be no resulting contract between the Court Receiver and a litigation arising from an order of the Court - The role of the Court Receiver is only to give effect to an order of the Court - Also, if in giving efect to an order of the Court, the Court Receiver receives payments that would otherwise attract CGST, then, and to that extent, the CGST may be conveniently collected from the Court Receiver under the provisions of Section 92 - However, the effect of appointing the receiver cannot mean that payments which do not attract CGST are now brought within the fold of the Act by notionally importing a contract between the Court Receiver and the Defendant - Therefore, the payment of royalty as compensation for unauthorized occupation of the Suit Premises is to remedy the violation of a legal right, and not as payment of consideration for a supply - It cannot be said that the Defendant’s occupation pursuant to an Order of the Court is a contract involving a ‘supply’ for consideration - In the absence of reciprocal enforceable
obligations, it is incorrect to characterise the Defendant’s occupation of the Suit Premises against payment of royalty as a ‘supply' for 'consideration' on which GST is payable by the court receiver: HC

GST - Supply - Upon perusal of section 7 of the CGST Act and of Schedule I to the CGST Act, it does not appear that the present activity would fall within the ambit of Section 7(c) of the Act read with Schedule I thereto - Hence the issue of whether GST is payable on royalty or payments under a diferent head paid by a defendant (or in a given case by the plaintif or third party) to the Court Receiver in respect of properties over which a Court Receiver has been appointed, is answered in the affirmative, subject to the payment towards royalty or the payment to the Court Receiver is towards or in relation to a ‘supply’ with CGST Act - The issue as to where the Plaintif alleges that the Defendant is in illegal occupation of the Suit Premises: Whether there is any ‘supply’ of services within the meaning of the CGST Act & whether payment of royalty for remaining in possession of the Suit Premises, either during the pendency of the Suit, or at the time of passing of the decree, falls within the defnition of ‘consideration’ for a ‘supply’, is answered in the negative: HC

GST - Liability to pay GST - In the facts of the present case, no GST is payable on the royalty amount paid by the Defendant to the Court Receiver as a condition for remaining in possession of the Suit Premises - Accordingly the changes made in the original order are modified - GST, if any, deposited by the Defendant with the Court Receiver but not paid to the authority concerned shall be adjusted against royalty amounts to be paid by the Defendant to the Court Receiver for the future period: HC

2019-TIOL-2157-HC-DEL-GST

Sales Tax Bar Association Vs UoI

GST - The petitioner filed the present writ on account of difficulties faced in entertainment, processing and allowance of refund claims made u/s 54 of the CGST Act r/w Section 16 of the IGST Act - The petitioner claimed that refunds were not being acknowledged processed and granted as per the Acts and Rules framed thereunder - It is also claimed that the statutory mechanism created for entertaining refund claims is not implemented and that there were some lacunae in the scheme formulated for processing the refund claims.

Held - The present proceedings are not adversarial in nature & their purpose is to achieve streamlining of the GST regime and better implementation of laws - Hence meetings should be held between all stakeholders, where the representatives of the petitioner and the Revenue would be present - Thereupon, the issues raised herein as well as those not raised in this petition would be taken up for being resolved, for achieving better administration and implementation of the indirect tax regime - Hence the petitioners are directed to make bullet point presentation of issues in this case and other outstanding issues - The same be circulated amongst the Revenue - A week after, a meeting be arranged at the office of the GST Council, wherein the CEO and/or the Vice President of the GSTN is to be present, along with the Revenue's counsel, an officer of the rank of Commissioner & an Additional Secy - The minutes of the meeting be placed before the court on the next date of hearing - List on 15.10.2019: HC

- Matter listed: DELHI HIGH COURT

2019-TIOL-2155-HC-ALL-GST

Shiv Enterprises Vs State Of UP

GST - Petitioners have challenged the detention order dated 06.06.2019 and penalty notice dated 06.06.2019 broadly on the ground of jurisdiction of respondent Commissioner of State Tax, U.P., Lucknow under the Goods and Services Tax (GST) in seizing the consignment of goods, which were coming from Panipat (Haryana) to Lucknow – Counsel for Revenue submits that in the proceedings based on the impugned notice, final order has been passed under the provisions of CGST Act, 2017 and against the said order, the petitioners have got a statutory remedy of appeal under Section 107 of CGST Act, 2017 and, therefore, the present writ petition filed by the petitioner is not maintainable and is liable to be dismissed.

Held: Fact pertaining to passing of final order has not been disputed by the petitioners - In view of the fact that the final order has been passed against which petitioners have got a statutory remedy of appeal, Bench is not inclined to entertain the present writ petition – It is open for petitioners to avail the statutory remedy - Writ petition dismissed: High Court [para 11, 12, 13, 14]

- Petition dismissed: ALLAHABAD HIGH COURT

2019-TIOL-2154-HC-AHM-GST

India Coke And Power (P) Ltd Vs UoI

GST - Tax on Ocean freight - 8/2017-ITR, 10/2017-ITR - Petitioner invites the attention of the Court to its order passed in the case of Mohit Minerals (P) Ltd. 2018-TIOL-2749-HC-AHM-GST and also its order dated 12.12.2018 whereby the court has granted interim relief directing that no coercive steps shall be taken against the petitioner pursuant to the impugned notification in the meanwhile.

Held: Notice to be issued returnable on 17th July, 2019 and in the meanwhile, no coercive steps shall be taken against the petitioner pursuant to the impugned notification: High Court [para 3]

- Notice issued: GUJARAT HIGH COURT

2019-TIOL-2153-HC-DEL-GST

Krish Automotors Pvt Ltd Vs UoI

GST - Petitioner inter-alia seeks a direction to the Respondents to permit the Petitioner to file the GST TRAN-I manually and allow the credit of Input Tax Credit ("ITC?) of Rs. 1,41,02,394/- claimed in accordance with Section 140 (3) of the CGST Act, 2017, in its online electronic credit ledger for payment of its output liability under the GST laws - Petitioner submits that in view of the maze of compliance due dates they were not able to file the GST TRAN-1 declaration online within time and claim the ITC of the eligible amounts and, therefore, in order to be permitted to manually file the GST TRAN-1, they made two representations dated 8th March and 19th March, 2018 to the jurisdictional GST Authorities, as well as representations dated 20th March, 2018 and 21st March, 2018 to the Ministry of Finance, Union of India and the GST Council respectively; that having no response received from any of the aforesaid authorities, the present petition is filed claiming the above relief.

Held: Court has in a series of orders recognized the difficulties faced by tax payers in filing the GST TRAN-1 by 27th December, 2017 - Court is satisfied in the present case that the Petitioner was unable to fill the TRAN-1 Form on account of bonafide difficulties and that, therefore, the Petitioner should be afforded one more opportunity to do so - Accordingly, a direction is issued to the Respondents to permit the Petitioner to either submit the TRAN-1 form electronically by opening the electronic portal for that purpose or allow the Petitioner to tender said form manually on or before 15th October, 2019 and thereafter, process the Petitioner's claim for ITC in accordance with law - Petition is disposed of: High Court [para 5, 10, 11]

- Petition disposed of: DELHI HIGH COURT

2019-TIOL-2145-HC-ALL-GST

2019-TIOL-2142-HC-AHM-GST

Sandeep Maganbhai Chaniyara Vs CCE & CGST

GST - Application is filed u/s 439 of the Code of Criminal Procedure, 1973 for regular bail in connection with an offence registered with Commissioner, CGST & Central Excise, Rajkot for the offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017 - Counsel for Respondent Revenue has opposed grant of regular bail looking to the nature and gravity of the offence.

Held: Considering the nature of allegations made against the applicant in the FIR and considering the admitted position that the applicant is arrested on 08.07.2019 and the fact that till date even after passage of 60 days, neither any complaint nor chargesheet is filed and, therefore, the applicant would be entitled for default bail, without going into detail at this stage, prima facie, Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail - present application is allowed and the applicant is ordered to be released on regular bail on executing a personal bond of Rs.25,000/- with one local surety of the like amount to the satisfaction of the Trial Court and subject to conditions: High Court [para 6]

- Application allowed: GUJARAT HIGH COURT

2019-TIOL-2141-HC-RAJ-GST

Sanganeriya Spinning Mills Ltd Vs UoI

GST - Petitioner challenges the vires of s.6(1) of the CGST Act, 2017; submits that the State authority lacks jurisdiction to investigate and bring to assessment any amounts having regard to the peculiar circumstances of the case - basic ground on which Section 6 has been challenged is that Section 6(1) is arbitrary; that the provisions curtail and severely limit the rights to claim the input credit and transitional credit.

Held: Court is of the opinion that challenge to the provisions i.e. Section 6(1), has not been made at all - Formation of a mechanism convenient for the purpose of assessment and collection by Section 6(1) cannot be charactersied as per se arbitrary - So far as the challenge to the circular 1 of 2017 and the show cause notice is concerned, Court is of the opinion that the circular merely works out the authorisation under Section 6(1) and it is also a matter of policy - Court was informed that assessment has been completed pursuant to the show-cause notice on 22.03.2019 - In these circumstances, it is not appropriate for the Court, to consider the validity or otherwise of the show-cause notice having regard to the fact that an alternative remedy by way of an appeal exists in favour of the petitioner - Petition dismissed: High Court [para 5 to 7]

- Petition dismissed: RAJASTHAN HIGH COURT

2019-TIOL-2131-HC-AHM-GST

Bhagwan Sales Vs State Of Gujarat

GST - An amount of Rs.1,67,090/- has been paid by the writ applicant towards tax and penalty as determined by the authority under Section 129 of the GST Act - Writ applicant is entitled to some interim relief in the matter - In such circumstances, the conveyance and the goods are ordered to be released forthwith, subject to the final outcome of this writ application: High Court

- Interim relief granted: GUJARAT HIGH COURT

2019-TIOL-2130-HC-MAD-GST

TVH Lumbini Square Vs UoI

GST - Applicant had sought a ruling from the Advance Ruling Authority as to whether they are liable to pay GST only on the amount in excess of Rs.7500/- collected as monthly maintenance charges from the members of the Association or on the entire amount in the context of Sl. no. 77(c) of 12/2017-CTR - AAR held that in the event the charges or share of contribution goes above Rs.7500/- per month, such service will not fit the description appearing in Sl. no. 77(c) of 12/2017-CTR and hence such service will not be exempt; that there is no option to the taxpayer to pick and choose from the description of services mentioned in column (3) of notification to make any service partly applicable to the notification and partly chargeable; that any service either falls within the scope of description in column (3) or it does not; that in the instant case since the share of contribution by members is above Rs.7500/- per month, the exemption is not available and GST at appropriate rates are to be charged on the full amount of reimbursement of charges or share of contribution - Writ Petition before High Court.

Held: The term "upto" employed in the notification is heavily relied upon by the petitioner to contend that only the exceeded amount is liable for the tax and not the whole amount collected - in support of this submission, the CBIC e-flyer explaining that GST would be applicable only on the amount in excess of Rs.5000/- (as the exemption then stood till 24.01.2018) is relied upon - Issue raised needs detailed consideration of the High Court - Hence, Respondents are directed to file counter - Matter is to be posted after four weeks - Until further orders, the petitioner is permitted to pay GST only towards the exceeded amount over and above the sum of Rs.7500/- : High Court

- Matter posted: MADRAS HIGH COURT

2019-TIOL-2129-HC-AHM-GST

Pranit Hem Desai Vs Additional Director General

GST - Petitioner requests to issue writ of mandamus or any other appropriate writ directing the respondent No.01 to immediately remove attachment of following bank accounts belonging to petitioner No.02 company - In the first round, the writ applicants came before the Court challenging the action on the part of the respondent No.1 in provisionally attaching the bank accounts and the High Court had by its order dated 12 April 2019 disposed of the application 2019-TIOL-831-HC-AHM-GST with certain directions - It appears that no sooner it was pointed out to the respondent No.2 that he could have invoked Section 74 of the Act for the purpose of passing an order of provisional attachment under Section 83 of the Act, having realized its mistake, the respondent No.2 tried to correct the same by issuing a corrigendum dated 26th April 2019 - Court had directed the writ applicants to file their objections to the action taken under Section 83 of the Act by availing the provision under subsection (5) Rule 159 of the Rules - and pursuant thereto the instant order came to be passed wherein it is held that the request of the applicants to withdraw orders issued under Section 83 is devoid of any merit and deserves to be rejected - Special Civil Applications/writ applications filed against this order.

Held: Only question that falls for consideration is whether the respondent No.1 was justified in invoking Section 83 of the Act for the purpose of passing an order of attachment of the bank accounts - Without entering into any other controversy, Bench is inclined to allow all the six writ applications on the short ground that during the period between July 2017 and May 2019, the total input tax credit availed by the writ applicants aggregates to Rs.59,49,18,103/-, whereas the total tax paid during this period aggregates to Rs.63,62,41,525/- and the same is indicative of the fact that against the availment of credit of Rs.59,49,18,103/-, an amount of Rs. 63,62,41,525/- came to be paid by way of tax; that it appears that an amount of Rs.4,13,23,422/- has been paid in excess than the amount of credit availed, therefore, in such circumstances, it cannot be said that the interest of the government revenue is at a stake - even if it is assumed that the allegations as levelled by the department are correct and the credits though not available were wrongly availed since the tax had been paid, though it was not payable having regard to the fact that there was no supply of goods, the availment of credits could be said to be justified on two counts: (1) it is a revenue neutral satisfaction and (2) payment of tax although not payable yet is to be treated if unavailable credits are reversed if they were wrongly paid - decision in H M Industrial Pvt Ltd vs. Commissioner, CGST and Central Excise = 2019-TIOL-460-HC-AHM-GST is relied upon - respondents are also reminded of the observations made by a Coordinate Bench in the case of M/s Patran Steel Rolling Mill vs Assistant Commissioner of State Tax, Unit 2 = 2018-TIOL-2937-HC-AHM-GST - Court had the occasion to consider Section 83 of the State GST Act, 2017 at length in the case of Valerius Industries vs Union of India = 2019-TIOL-2094-HC-AHM-GST - Section 83 of the State GST Act empowers the Assessing Authority to make a provisional attachment of any property of the assessee during the pendency of any proceeding for the assessment or reassessment of any turnover, even though there is no demand outstanding against the assessee, if he is of the opinion that it is necessary to do so to protect the interest of the revenue - This provision has been made, in our opinion, in order to protect the interest of the revenue in cases where the raising of demand is likely to take time because of the investigations and there is apprehension that the assessee may default the ultimate collection of the demand - In other words, Section 83 gives a power to be exercised during the pendency of any proceeding for assessment or reassessment, so that the assessee may not fritter away or secrete his resources out of the reach of the Commercial Tax department when the assessment or reassessment is completed - The expression "for the purpose of protecting the interest of the revenue" occurring in Section 83 of the Act is very wide in its meaning - Further, the orders of provisional attachment must be in writing - There must be some material on record to indicate that the Assessing Authority had formed an opinion on the basis thereof that it was necessary to attach the property in order to protect the interest of the revenue - The provisional attachment provided under section 83 is more like an attachment before judgment under the Code of Civil Procedure - It is a liability on the property - However, the power conferred upon the Assessing Authority under Section 83 is very drastic, far-reaching power and that power has to be used sparingly and only on substantive weighty grounds and for valid reasons - To ensure that this power is not misused, no safeguards have been provided in the Section 83 - One thing is clear that this power should be exercised by the Authority only if there is a reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment - It should, therefore, be exercised with extreme care and circumspection - It should not be exercised unless there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of the whole or any part of his property with a view to thwarting the ultimate collection of the demand - Moreover, attachment should be made of the properties and to the extent it is required to achieve the above object - It should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee - Bombay High Court in Gandhi Trading v. Asst. CIT 3 (1999) 239 ITR 337 Bom. has opined that the attachment should be made, as far as possible, of the immovable properties if that can protect the Revenue - The attachment of bank accounts and trading assets should be resorted to only as a last resort because, the attachment of the bank accounts of the assessee would paralyse the functions and business of the assessee - The Authority, therefore, should exercise the power conferred upon him under Section 83 of the Act with circumspection and fairly and reasonably - No hard and fast rule can be laid down as to how and under what circumstances the power under Section 83 can be invoked by the Authority - The discretion conferred on the Authority shall be brought to bear having regard to the facts and circumstances of each case - It is not permissible for the Authority to equate the provisional attachment envisaged under Section 83 of the Act with attachment in the course of the recovery proceedings - all the six writ applications succeed and are allowed - The orders of provisional attachment of the bank accounts of the writ applicants are hereby quashed and set aside: High Court [para 9, 10, 22 to 30]

- Petitions allowed: GUJARATA HIGH COURT

 

AAR CASES

2019-TIOL-300-AAR-GST

Emerald Heights International School

GST - The applicant is a school run by a registered society engaged in promotion of education, which owns and runs a school and does not derive any income other than from the school - The members of the society organize educative conferences for students and staff members in line with the philosophy of the association - The applicant and the association intended to forge an agreement for hosting and managing the conference - The agreement clearly mentions that the school act as host of the conference in its own right as principal and shall not be deemed to be acting as an agent of the association - The applicant approached the AAR seeking to know whether the consideration received by the school from schools participating in such conference would be exempted under Entry No 66 or Entry No 1 or Entry No 80 or any other entry of Notfn No 12/2017-CT(R) or would the same be taxable under the CGST, MPGST or IGST Act - It also sought to know the appropriate rate of tax, the place of supply for such services & if ITC is available on the input services availed for the conference - It also sought to know if exemption provided to service providers of catering, security, cleaning, house keeping, transportation to an eduicational institution would be available to the service providers of the applicant for services relating to the conference.

Held - The consideration received by the applicant from the schools participating in the conference would not be exempted under Entry No 66 or Entry No 1 or Entry No 80 or any other entry of the Notfn No 12/2017-CT(R) - Moreover, various services provided for organizing the conference would be taxable at the rate applicable for such services - Besides, to decide the place of supply is beyond the jurisdiction of the AAR - Further, the exemption provided to service providers of catering, security, cleaning, house keeping & transportation to an educational institution up to higher secondary will not be available for services provided for the conference - Also, no ITC shall be available on foods & catering as the rate of tax is 5% without ITC - However, ITC in respect of other services would be available as per GST: AAR

- Application disposed of: AAR

2019-TIOL-299-AAR-GST

Nipro India Corporation Pvt Ltd

GST - Dialyzer are used in sterilized form and are also disposable after single use - Therefore, Dialyzer is to be treated as ‘Disposable sterilised dialyzer or micro barrier of artificial kidney' as mentioned under Entry no. 255 of Schedule I, 1/2017-CTR; classifiable under Chapter 90 (TI 9018 9031): AAR

- Application disposed of: AAR

2019-TIOL-298-AAR-GST

Maansmarine Cargo International LLP

GST - Applicant has been offered a business process outsourcing (BPO) work from Hong Kong based shipping Co. - Applicant would, therefore, be employing 10 - 15 experienced ship operators and office assistants on behalf of MSS Marine Ltd. and total salary will be reimbursed to them on actual basis; office would be taken on rent and the same would also be reimbursed one actual basis; so also office expenses such as telephone, electricity, purchasing computers, internet, office furniture, staff welfare etc., travel costs, lodging boarding and also charge management fees from MSS Marine Ltd. for managing the above job.  

Held: GST is applicable on the reimbursement of expenses such as salaries, rent, office expenses, travelling cost etc.; GST will be applicable on the management fees charged by applicant to the company for managing the job outsourced to them: AAR

- Application disposed of: AAR

2019-TIOL-297-AAR-GST

Fluid Power Pvt Ltd

GST - Marine Duty hydraulic equipment, designed and custom built for fitting on a barge falling under Sr. no. 246 of Schedule I of 1/2017-CTR and its parts falling under Sr. no. 252 of Schedule I of 1/2017-CTR which are essentially required for functioning of barge would attract GST @5%: AAR

GST - Input Tax credit in respect of indigenous and imported inputs which are used for manufacture of above equipment is available: AAR

- Application disposed of: AAR

2019-TIOL-296-AAR-GST

Attest Testing Services Ltd

GST - Applicant is engaged in the business of providing exam, certification and other allied services including various types of surveys, assessments and exam services to various clients including individuals, educational institutions, firms, corporate bodies, government undertakings etc - they provide services viz. conducting online examinations along with pre-exam management processes, post exam management processes across different cities and examination centres - applicant's fees is a consolidated fee based on the exam hours conducted and shall be charged based on the exam hours booked irrespective of the students appearing for the exams or not - applicants have been discharging GST on such services upto the period 25.01.2018 in terms of Entry 66(b)(iv) notification 12/2017-CTR and are of the view that the said services are exempted consequent upon amendment by notification 02/2018-CTR dated 25.01.2018 - they, therefore, have applied for advance ruling to determine whether the services provided can be considered as a composite supply or a mixed supply; if the same are considered as composite supply as to whether conduct of examination can be considered as principal supply and whether the exemption provided in terms of entry 66(b)(iv) of 12/2017-CTR would be applicable to them w.e.f 25.01.2018; whether the exemption would be available to all agreements entered or whether it would be limited to those entered with educational institutions only.

Held: Subject services can be considered as composite supply in terms of s.2(30) of the Act; conduct of examination is to be considered as principal supply; exemption under Entry 66 would be available only when the conditions mentioned therein are satisfied; exemption under entry 66 would be available only in respect of Work Order issued by the University of Delhi: AAR

Application disposed of: AAR

2019-TIOL-295-AAR-GST

Yash Nirman Engineers And Contractor

GST - The applicant-company is engaged in providing works contract services (WCS) as well as construction services - The applicant provided WCS to one M/s Lakhani Builders Pvt Ltd for construction of a residential project - It was stated that project fell under the affordable housing category and that M/s Lakhani Builders was eligible for benefit of lower rate of GST as per Sr No 3 item (v) sub-item (da) of Notfn No 01/2018-CT(R) dated 25.01.2018 - The applicant approached the AAR seeking to know whether it was eligible for lower rate of CGST @ 6% and SGST @ 6% as per the Notification No 1/2018-CT(R) dated 25.01.2018.

Held - The job alloted to the applicant pertains to affordable housing - Entry (v)(da) of the Notfn No 01/2018 does not restrict the benefit to a developer only - The notfn is qua the supply of service and not qua the person - Hence once a project qualifies as Affordable Housing Project, the benefit of concessional rate of duty is available on WCS pertaining to low cost houses irrespective of it being supplied by developer or contractor - Hence the benefit of reduced rate is available to the applicant in respect of supplies effected after 25.01.2018, being the date on which the Notfn No 1/2018-CT(R) came into effect: AAR

- Application disposed of: AAR

2019-TIOL-294-AAR-GST

Soma Mohite JV

GST - The applicant-company is engaged in the construction business - It is a Joint Venture (JV) company formed for construction of a tunnel and allied works for Nira-Bhima Link under the Krishna Bhima Stabilisation Project awarded by the Godavari Marathwada Irrigation Development Corporation, Aurangabad - The work order consists of earth work such as excavation for tunnel, removing excavated earth, providing steel support, rock bolting, reinforcement, fixing of chain link and cement concreting - The applicant approached the AAR seeking to know whether the contract is covered under Sr No 3A, Chapter 99 as per Notfn No 02/2018-CT(R) dated 25.01.2018 - It also sought to know if the contract qualifies as Earth Work and so is covered under Chapter 9954 as per Notfn No 31/2017-CT(R) dated 13.10.2017 - Whether if the preceding issue is answered in the affirmative, what would be the meaning of earthwork.

Held - The contract at hand is not covered under Sr No 3A, Chapter 99 as per Notfn No 02/2018-CT(R) dated 25.01.2018 - Further, the contract is not covered under the term of Earth work so as to be covered under Chapter No 9954 as per Notfn No 31/2017-CT(R) dated 13.10.2017 - In light of the same, the issue seeking meaning of earth work, need not be answered: AAR

- Application disposed of: AAR

2019-TIOL-293-AAR-GST

BG Shirke Construction Technology Pvt Ltd

GST - The applicant company is engaged in construction works - It also has an aviation chartering division - It operates aircrafts under Non Scheduled Operators Permit (NSOP) - During the relevant period, the applicant sought to sell one of its aircraft to one M/s K Air, which needed the aircraft for carrying passengers and for medical evacuation - However, M/s K Air does not have a permit to operate as non-scheduled operator - Hence it approached the Ministry of Civil Aviation seeking NOC in this regard and expected to receive clearance - Hence the applicant approached the AAR seeking to know the applicable rate of GST on the sale of aircraft by an NSOP holder to a private company, which has applied for a NSOP license & where the aircraft is to be used for corporate leisure, pilgrimage and cargo flights.

Held - At this point of time, the intended use of the aircraft to be sold is not known and is speculated as use by the applicant, for non-personal purposes by the purchaser - Hence the Sr No 244 of Notfn No 01/2017-CT(R) is applicable if the aircraft is used for other than personal use and Sr No 176 will apply if the aircraft is for personal use - However, the applicable rate cannot be ascertained for want of sufficient & conclusive evidence: AAR

- Application disposed of: AAR

2019-TIOL-292-AAR-GST

Tejas Constructions & Infrastructure Pvt Ltd

GST - During the relevant period, the applicant-company (contractor) provided construction service to Shri Gajanan Sahakari Soot Girni Maryadit (contractee) - Work order was issued by the contractee with 15 months' time being given for completion of the work, beginning from date of agreement - The agreement was extended further by 6 months - The contractee had sought for construction of 25000 spindle spinning mills & construction of main factory building & so caused drawing and specifications describing the work to be done - The contractor agreed to execute the same as per the conditions set forth & the consideration would be paid to the contractor subject to the completion of the contract as per the conditions - The applicant approached the AAR seeking to know if the contractor could charge GST on the value of material supplied by the service recipient - It also sought to ascertain the mechanism for calculating the taxable value u/s 15 of the Act.

Held - In the present case, the material is being supplied by the contractee - Therefore, the question raised by the applicant as to whether it can charge GST on such material is irrelevant - The applicant, on this issue of supply of materials, is not a supplier of goods or services and so cannot raise such question as per the provisions of Section 95 of the Act - Regarding the mechanism to calculate taxable value as per Section 15 of the Act, tax is payable on the entire contract value as per certificate issued by the architect, without deducting the value of Cement, Mild Steel and Structural Steel provided by the contractee: AAR

- Application disposed of: AAR

2019-TIOL-291-AAR-GST

Ajwani Infrastructure Pvt Ltd

GST - The applicant company is engaged in the construction industry - It entered into JV with Kargwal Construction Pvt Ltd for a water transport project at Navi Mumbai - The CIDCO of Maharashtra Ltd awarded the contract for construction of water transport terminal to the JV company - As per the work order & inputs received from CIDCO, the purpose of the terminal was to facilitate transport of water - The same was an infrastructure project involving no commercial sale of property - Hence the applicant approached the AAR seeking to know the GST rate applicable on the work of development of infrastructure facility for passenger water transport terminal awarded to the JV company - It also sought to know if the activity would fall under the chapter heading 9954, which is construction service, with Sr No 3(iv)(a) or 3(vi)(a) of the Notfn No 11/2017-CT(R).

Held - It is found that it is the JV company and not the applicant which was awarded the contract and so the supply of goods or services or both being undertaken or proposed to be undertaken will be by the JV company and not the applicant - Hence the person entitled to make the application is the JV company, considering the present law of the land which states that a JV company is formed by two or more entities and so has a separate existence than that of the constituent entities - As CIDCO awarded the contract to the JV company and not to the applicant - Hence the applicant is not competent entity to apply for ruling u/s 95 of the CGST Act - Hence the present application is rejected as being non maintainable: AAR

- Application disposed of: AAR

2019-TIOL-290-AAR-GST

Deputy Conservator Of Forests

GST - Logging yields timber, firewood etc. but does not yield "agricultural produce" and are more specifically in the nature of "forest produce" and hence is not covered under Entry no. 24 of 11/2017-CTR - Operations of "logging" would attract tax under the GST Act and it is independent of the trees, whether planted by the Forest Department or which grew out of natural regeneration - Transaction is an intra-State supply and attracts CGST & SGST and is independent of where the goods are taken by recipient after supply is completed - Taxable @18%: AAR

- Application disposed of: AAR

2019-TIOL-289-AAR-GST

Bharat Electronics Ltd

GST - Various systems, sub-systems and onboard spares (excluding consumables and raw materials) supplied for use in Warships, Vessels and submarines meant for Indian Navy and Shipbuilders are appropriately covered under Sl. No. 252 of 1/2017-CTR and attract GST @5%: AAR

- Application disposed of: AAR

2019-TIOL-288-AAR-GST

Antrix Corporation Ltd

GST -  Service of leasing of Satellite Transponders (SAC 997319) falls under Entry no. 17(viii) of 8/2017-ITR and is taxable @5% GST as applicable on the supply of like goods (transponder - part of communication satellite) involving transfer of title in goods covered under 8803 9000 in terms of Entry no. 245 of Schedule I of 1/2017-ITR: AAR

- Application disposed of: AAR

 

ARTICLES

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