2018-TIOL-GST-207 Dated: Friday, September 21, 2018

TOP NEWS

GST - DGGI nabs two businessmen in Rs 79 Cr tax case

GST - NACIN to conduct computer-based exams for practitioners

CGST RULES (NOTIFICAITON)

52/2018

Seeks to notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-State taxable supplies

CGST RATE (NOTIFICATION)

23/2018

Seeks to notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-State taxable supplies

CGST ORDER

Order 04/ 2018

Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases

CGST CIRCULAR

65/2018

Guidelines for Deductions and Deposits of TDS by the DDO under GST

IGST RATE (NOTIFICATION)

24/2018

Seeks to insert explanation in an entry in notification No. 9/2017 - Integrated Tax (Rate) by exercising powers conferred under section 6(3) of IGST Act, 2017.

UTGST RATE (NOTIFICATION)

23/2018

Seeks to insert explanation in an entry in notification No. 12/2017 - Union Territory Tax (Rate) by exercising powers conferred under section 8(3) of UTGST Act, 2017

GST AAAR (CASES)

2018-TIOL-14-AAAR-GST

Maharashtra State Power Generation Compant Ltd

GST - GST on liquidated damages is covered under Schedule II Entry no. 5(e) vide HSN Code 9997 as Other services attracting @18% [CGST + MGST] - As the agreement expressly provides that liability of payment of liquidated damages by the contractor will be established once the delay in successful completion of trial operation is established on the part of the contractor, the same would define the time of supply - as regards the question whether the contractor/vendor would be able to utilize the amount of liquidated damages imposed over him as ITC, Appellate authority agrees with the AAR that the tax credit would be admissible subject to the conditions and restrictions as specified in the GST Act and the Rules made thereunder - no reason to interfere with the ruling given by AAR: AAAR

- Appeal rejected: AAAR

2018-TIOL-13-AAAR-GST

Giriraj Renewables Pvt Ltd

GST - Condonation of delay in filing appeal against order of AAR dated 17.02.2018 - Appeal is required to be filed within a period of 30 days from the date of communication of the AAR order and this period can be further extended upto a period of 30 more days - appellate authority was constituted through notification no. MGST-1018/C.R.38/Taxation-1 dated 10.05.2018 and the appellant applied through appeal dated 06.06.2018 - as appellant had filed letters within 30 days of communication of the Advance Ruling to the Commissioners of Central Tax/State Tax, Chief Commissioner of Central Tax, Mumbai Zone, and it was only because the appellate authority was not formed that he could not file an appeal and also because the appeal was filed within one month from the formation of the AAAR, the delay is condoned: AAAR

GST - AAR had held that contract for construction of Solar Power Generating system (SPGS), wherein both goods and services are supplied is a Works Contract; that since the transaction is treated as a Works Contract and not a composite supply, there arises no question of determining what would be the principal supply in the impugned transaction; that since documents were not provided in the matter of question posed viz. whether benefit of concessional rate of 5% of SPGS and parts thereof would be available to sub-contractors, question was not dealt with - Appeal to AAAR.

Held: The Solar Power Generating system described in the entry 234 of Notification 1/2017-CTR is used in the sense of a “device” inasmuch as the description of goods is shown as ‘Following renewable energy devices and parts for their manufacture' - the agreement leads to an erection of a ‘Solar Power Generating system' which is an immovable property, therefore, merely because a schedule entry is provided for the same does not mean that the product would be classified in the same - Therefore, Supply of the said turnkey EPC contract falls within the definition of ‘composite supply' u/s 2(30) of the CGST Act, 2017 and the said composite supply falls within the definition of Works Contract u/s 2(119) of the CGST Act, 2017 -Since the transaction has been treated as a ‘Composite Supply' and a Works Contract falling u/s 2(119) of the CGST Act, 2017, and part 6 of Schedule II treats ‘Works Contracts' u/s 2(119) as supply of services, there arises no occasion to go into the issue of ‘principal supply' - as regards whether benefit of concessional rate of 5% would be available to sub-contractors of solar power generation system and parts thereof, since no documents have been presented by appellant, appellate authority is not able to deal with the same: AAAR

- Appeal rejected: AAAR

2018-TIOL-12-AAAR-GST

Fermi Solar Farms Pvt Ltd

GST - Condonation of delay in filing appeal against order of AAR dated 03.03.2018 - Appeal is required to be filed within a period of 30 days from the date of communication of the AAR order and this period can be further extended upto a period of 30 more days -appellate authority was constituted through notification no. MGST-1018/C.R.38/Taxation-1 dated 10.05.2018 and the appellant applied through appeal dated 06.06.2018 - as appellant had filed letters within 30 days of communication of the Advance Ruling to the Commissioners of Central Tax/State Tax, Chief Commissioner of Central Tax, Mumbai Zone, and it was only because the appellate authority was not formed that he could not file an appeal and also because the appeal was filed within one month from the formation of the AAAR, the delay is condoned: AAAR

GST - AAR had held that in view of the agreements tendered in support of the transaction which revealed that the same is for setting up and operation of a solar photovoltaic plant which is in the nature of a Works Contract in terms of s.2(119) of CGST Act, it should be taxable @18% - As regards two other questions on which ruling was sought, the AAR had held that since the applicant had not produced any document/agreement showing the terms and conditions, it would be difficult to determine whether ‘when other parts and components are supplied by contractor', whether they would be entitled to the concessional rate of tax of 5% as parts of solar power generation system and also whether the concessional rate would be available to sub-contractors - Appeal to AAAR.

Held: Agreements tendered in support are in the nature of a ‘Works contract' in terms of clause 119 of section 2 of the CGST Act, 2017 - Schedule II treats ‘Works contract' as supply of services and depending upon the nature of supply, intra-state or inter-state, the rate of tax would be governed by entry no. 3(ii) of Notification 8/2017-ITR, 11/2017-CTR etc. - rate of tax would be 18% under the IGST Act and @9% each under the CGST/MGST Act aggregating to 18% - as regards the other two questions on which ruling is sought, as the appellant has still not produced any document/agreement, the situation remains the same as it was before the AAR; moreover, AAAR can decide on issues already decided by the AAR and there being no decision rendered by AAR, AAAR too cannot give any decision in appeal: AAAR

- Appeal rejected: AAAR

2018-TIOL-11-AAAR-GST

Ahmednagar District Goat Rearing And Processing Co-Op Federation Ltd

'Leno Bags' (mesh bags) made by applicant for packing agricultural products such as potato and onion and declared to be made from woven Polypropylene fabrics using strips or the like of width not exceeding 5mm and without any impregnation, coating, covering or lamination with plastics are to be classified under Tariff Sub Heading 6305 3300: AAR

- Appeal allowed: AAAR

GST NAPA CASE

2018-TIOL-06-NAPA-GST + Case Story

Director General Anti-Profiteering Vs Pyramid Infratech Pvt Ltd

GST - Rs.8.23 crores profiteering - Builder directed to reduce price to be realized from buyers of flats commensurate with the benefit of ITC received by him: NAPA

- Application allowed: NAPA

GST HIGH COURT CASE

2018-TIOL-122-HC-MAD-GST

V Vasanthakumar Vs UoI

GST - The petitioner is challenging the provisions of Section 109 & 110 of the CGST Act & the TNGST Act - Such provisions constitute the Appellate Tribunal and also lay down the qualifications, conditions of appointment & service conditions of the members - The petitioner alleged that such provisions contravened the doctrine of separation of powers and ran contrary to the independence of the judiciary - The petitioner was particularly aggrieved by the fact that the Technical members in the Tribunals outnumbered the Judicial members - The petitioner claimed that members of quasi-judicial bodies must have judicial expertise & legal training - The petitioner also claimed that Technical Members only played supporting roles and could not assume judicial functions - The petitioner also claimed that the eligibility to be a Judicial Member excluded advocates - He claimed that such provision was highly unfair as advocates by training were inculcated with the requisite qualities to discharge functions of Judicial members.

Held - It prima facie appears that the constitution of the Appellate Tribunal runs contrary to the decision in Union of India vs. R.Gandhi - Hence notice be issued to the parties - As the vires of Sections 109 & 110 of the CGST & TNGST Act have been challenged, notice be also issued to the Attorney General of India: HC (Para 1,2,3,7,8,12,13,14)

- Notice issued: MADRAS HIGH COURT

GST AAR CASES

2018-TIOL-160-AAR-GST

Goodwill Industrial Canteen

GST - Services of the applicant of supplying food and beverages on the premises of industrial unit/office in terms of the contract entered are liable to tax at the rate of 9% CGST under sl. No. 7(v) of Notification 11/2017-CTR and 9% SGST for the period up to 26.07.2018 and from 27.07.2018 onwards at the rate of 2.5% CGST under sl. No. 7(i) of Notification 11/2017-CTR as sl. No. 7(v) now only covers supply at functions which are occasional and event based and supply of food to institutions which was earlier covered under entry at sl. no. 7(v) has been included under sl. No. 7(i) - similar SGST notification applicable for charging SGST @2.5% subject to the condition that credit of input tax charged on goods and services used in supplying the services have not been taken read with Explanation (iv) of the said notification: AAR

- Application disposed of: AAR

2018-TIOL-159-AAR-GST

Erode Manjal Vanigarkal Matrum Kidangu Urimaiyalargal Sangam

Facts: Ruling sought as to whether service by the commission agents to agriculturists for their sale or purchase of their produce not involving the agents as either a recipient of goods or as a supplier of goods are liable to tax or not.

Held: Service by commission agents to the agriculturists of turmeric is service under heading 9986 and is taxed to 'Nil' rate of GST as per sl.no. 24(i)(g) of notfn. 11/2017-CTR: AAR

- Application disposed of: AAR

2018-TIOL-158-AAR-GST

CPR MILL

GST - Product 'Cattle feed in cake form' manufactured by applicant is classifiable under CH 2309 9010 and is exempted as per sl. No. 102 of notification 2/2017-CTR as amended and similar SGST and IGST exemption notifications: AAR

- Application disposed of: AAR

2018-TIOL-157-AAR-GST

Brakes India Pvt Ltd

GST - 'Disc Brake Pads' manufactured and supplied by Applicant is a part of the motor vehicle and is classifiable under Heading 8708 3000 as 'Brakes and servo-brakes' and covered under Sl. No. 170 of Schedule lV of Notification No. 01/2017-CTR attracting 14%CGST/14% SGST for intra state supply: AAR

Application disposed of: AAR

2018-TIOL-156-AAR-GST

Amalgamations Valco Clutch Pvt Ltd

Facts: Applicant is engaged in production and supply of automobile parts to OEMs as per design and specifications supplied - Advance ruling sought on the following - Whether amortization of value of free tools/dies received form customer to be included for valuation of goods or not? ; If the GST is applicable on the amortized value, what is the procedure for calculating the GST and reflecting the same in GST invoice format and how to declare the transactions in GSTR-1 & GSTR -3 and GSTR-3B.

Held: Applicant submitted that subsequent to their application, a Circular 47/21/2018-GST dated 08.06.2018 has been issued by CBIC and which has effectively clarified various aspects of the question of amortization and other issues - inasmuch as since the query is clarified by CBIC, they requested that application be treated as withdrawn - Application dismissed as withdrawn: AAR

- Application dismissed: AAR

2018-TIOL-155-AAR-GST

SMVD Polypack Pvt Ltd

- Application disposed of: AAR

2018-TIOL-154-AAR-GST

Indian Oil Corporation Ltd

Facts: Applicant is engaged in the activity of refining crude petroleum oil into HSD, Motor Spirit (Petrol) and ATF and no tax on its supply is leviable under the CGST/WBGST Acts, 2017 - Applicant seeks a ruling as to whether or not GST paid on the railway freight for transportation of above goods from Haldia refinery to its export warehouse at Raxaul can be availed as Input Tax Credit. Held: ATF and other non-taxable supplies from Applicant's Haldia refinery to the export warehouse of IOCL at Raxaul are not zero rated supplies - such supplies are not export of goods in terms of s.2(5) of the IGST Act but exempted supplies from the West Bengal unit to the Bihar unit, which isa distinct person in terms of s.25(4) of the GST Act - sections 16(1)(a) and s.16(2) of the IGST Act are not applicable - applicant cannot, therefore, claim credit of the GST paid on the railway freight for transportation of ATF and other non-taxable supplies from West Bengal to the Bihar unit: AAR - Application disposed of: AAR

2018-TIOL-153-AAR-GST

Ashok Kumar Patel

Facts: Applicant is engaged in packing and selling agricultural product viz. "Unmanufactured Tobacco" classifiable under CTH 2401 - Applicant claims that the Government of Madhya Pradesh has notified list of goods in consignment having value more than Rs.50000/- where issuance of an E-way bill for intra statement movement of such goods have been brought into effect from 25.04.2018; that ‘Unmanufactured tobacco' is not mentioned - applicant seeks ruling in this behalf.

Held: Notification number F-A-3-08-2018-1-V(43), Dated 24.04.2018 issued under MPGST Act/Rules is not applicable on 'Unmanufactured Tobacco' described under HSN 2401 i.e. to say that generation of e-way bill for intra-state movement of ‘Unmanufactured Tobacco' is not required as per the notification: AAR

- Application disposed of: AAR

2018-TIOL-152-AAR-GST

Ankit Tandon And Enterprises And Tollways Pvt Ltd

Facts: An entity M/s Highway Infrastructure (P) Ltd. has been allotted Toll Collection work of certain road by M/s NHAI and they would like to sub-let the toll collection work to the applicant - since the 'service by way of access to a road or by a bridge on payment of toll charges' is exempted service as per notification 12/2017-CTR, applicant seeks a ruling as to whether they too would be entitled for the same exemption.

Held: There is no restriction regarding the supplier or the recipient of the supply - therefore, even though the supply of service to the user of the Toll Road is by the sub-contractor, GST is not payable on the amount of Toll Charges collected - same is exempted by sr. no. 23 of notification 12/2017-CTR and corresponding notification under MPGST Act, 2017 - However, this ruling has no bearing on the consideration received by the applicant from Highway Infrastructure (P) Ltd. for the supplies made by them: AAR

- Application disposed of: AAR

2018-TIOL-151-AAR-GST

Indian Institute of Management

Facts: IIM, Indore is one of the nineteen IIMs set up by the Government of India and is providing various types of courses, some of which are explicitly exempted under GST and tax is payable on fees towards other courses including Executive Post Graduate Programme (EPGP) which is a one-year residential programme - Applicant has sought a ruling as to whether the course - Executive Post Graduate Programme in Management (EPGP) after enactment of Indian Institute of Management Act, 2017 notified effective 31.01.2018 is exempted from Goods and Services Tax and in case it is exempted, as to whether the total amount of fees collected towards EPGP for the academic session 2018-2019 is exempted, whether collected before or after enactment of IIM Act, 2017 or only on the amount collected after enactment of IIM Act, 2017. Held: Executive Post Graduate Programme will not be eligible for exemption from GST as the same has been categorically excluded from exemption under Entry no. 67 to the notification 12/2017-CTR and corresponding notification under MPGST Act, 2017 - it is also clarified that the Executive Post Graduate Programme being conducted by the Applicant shall be chargeable to GST, irrespective of enactment of IIM, 2017: AAR

- Application disposed of: AAR

2018-TIOL-150-AAR-GST

Nursery Men Co-Operative Society

GST - Applicant is a society, which is a wing of Horticulture Department of Government of Karnataka and is registered under the Co-operative Societies Act, 1957 - works of formation of parks and landscaping on the lands belonging to the Government and other Government Undertakings is entrusted to this society and they execute the works of de-weeding of the land, levelling of land, landscaping and formation of parks - applicant has sought advance ruling in respect of the following question - "Whether landscaping and gardening work for government departments like BBMP, KSRTC, etc, through works contract attracts GST from this society?"

Held: Service of maintenance of parks provided by the society to the State Government, Central Government or a Local Authority (including BBMP) or a Governmental Authority, not involving transfer of property in goods either as a component of a works contract or a composite supply is covered under entry no. 3 of the Notification No. 12/ 2017 Central Tax (Rate) and hence exempt -exemption is not available if there is any transfer of property in goods or if the service is made to persons other than State Government, Central Government or a local Authority or a Governmental Authority: AAR

- Application disposed of: AAR

2018-TIOL-149-AAR-GST

Coffee Day Global Ltd

GST - Applicant is in the business of running restaurants under the name and style of Café Coffee Day where non-alcoholic beverages and food items are served - Notification No.46/2017 dated 14.11.2017 provides that restaurants can pay GST @5% (CGST-2.5% and SGST-2.5%), provided they do not avail input tax credit of the tax paid on input goods and services - Notification No.11/2017- CTR dated 28.06.2017, at Sl.No.35, provides for levy of GST @18% (CGST-9% & SGST-9%) on supply of unclassified services and the suppliers are entitled to take input tax credit in the circumstances where they pay output tax - The Applicant contends that Notification No.46/2017-CTR dated 14.11.2017 applies in circumstances where the applicant does not avail input tax credit; that it does not prevent a restaurateur from paying tax at 18% (CGST - 9% and SGST - 9%) and availing input tax credit - application filed seeking a ruling on the aforesaid contention.

Held: Section 16(1) of CGST Act, 2017 - Classification of the services rendered by the applicant isclearly defined under Service Code (Tariff) 996331 - restaurant services provided by the applicant are squarely covered under serial number 7 of the Notification 11/2017-CTR - As the services provided by the applicant are covered under a specific heading and the Notification carves out a specific rate of tax for that heading, the same shall be applicable to the applicant - Serial number 35 would qualify for invocation only in respect of services that do not find classification elsewhere, therefore, the applicant is covered by serial number 7 and not 35 (which covers heading 9997) - right to avail input tax credit is not an absolute right and conditions and restrictions may be prescribed for its availment - applicant ' s contention that the right to input tax credit is unfettered does not hold good - Applicant is not entitled to pay the GST @ 18% with input tax credit as the services being offered by the Applicant are classified under a heading attracting GST @ 5%, without input tax credit: AAR

- Application disposed of: AAR

2018-TIOL-148-AAR-GST

Emerge Vocational Skills Pvt Ltd

GST - Applicant is a private limited company engaged in providing specified educational services in the field of Hotel Management - advance ruling is sought on the question 'Whether the services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums are exempt from Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 - Central Tax dated 28.06.2017'.

Held:

Applicant has submitted that he proposes to obtain an affiliation with a University in the State of Karnataka and shall thereafter be engaged in provision of education in affiliation with the said university in the State of Karnataka -Since the “Services provided by an educational institution to its students, faculty and staff” is exempt from tax under the Central Goods and Services Tax Act and the applicant qualifies as an educational institution insofar as those courses for which affiliation has been obtained from the University in the State of Karnataka and for which University Curriculum is prescribed and the qualifications recognized by the law for the time being in force is given after the conduct of examinations by such University, the applicant is exempted from Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 - Central Tax (Rate) dated 28.06.2017: AAR

- Application disposed of: AAR

2018-TIOL-147-AAR-GST

Maini Precision Products Ltd

GST - "Parts of Fuel Injection Pumps for diesel engines" are classifiable under Tariff Heading 8413 91 90 as per the Customs Tariff Act, 1975 and are covered under the entry no. 453 of Schedule III of Notification No.1/2017 - Integrated tax (Rate) dated 28.06.2017 and hence liable to tax at 18% under the Integrated Goods and Services Tax Act, 2017: AAR

- Application disposed of: AAR

2018-TIOL-146-AAR-GST

V PAC Cartons India Pvt Ltd

GST - Applicant, engaged in the manufacture of plywood pallets, plywood boxes, corrugated boxes, and paper packaging products and is registered under the Goods and Services Act, 2017 is desirous of knowing the GST rate applicable on the finished goods "Pallets and Box Pallets".

Held: Commodity "pallets and box pallets" are covered under HSN 4415 20 00 and covered under entry no. 97 of Schedule II of Notification No.01/2017- Central Tax (Rate) dated 28.06.2017 attracting CGST @6% & SGST @6% respectively: AAR

- Application disposed of: AAR

JEST GST (by Vijay Kumar)

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