GST NEWS
GST - Returned supply of time-expired medicines - ITC to be reversed on returned goods and not ITC linked to manufacture
GST HIGH COURT
2018-TIOL-148-HC-P&H-GST
Modern Insecticides Ltd Vs State Of Punjab
Punjab GST - Penalty has been levied on petitioners under Section 129 of Punjab GST, 2017 and Haryana Goods and Services Tax Act, 2017 - The goods detained are still in custody of Departments concerned - As a pre-condition of filing appeal, 10% of disputed tax amount has also been deposited - In terms of Section 107(7) of the Act, recovery of balance amount is deemed to be stayed - Section 129(1)(c) of the Act provides that goods can be released on furnishing of security as prescribed - Section 129(2) provides for application of Section 67(6) of the Act, which in turn has been referred to in Rule 140 prescribing the bond and the bank guarantee to be furnished - The legal issues sought to be raised by petitioners need examination in detail by GST Council - Thus, the respondents are directed to release the goods on furnishing of security other than bank guarantee or cash - As there is no dispute regarding identity of goods, the release shall not be treated as provisional: HC
- Appeal adjurned: PUNJAB AND HARYANA HIGH COURT
GST AAR CASES
2018-TIOL-233-AAR-GST
Bharat Petraleum Corporation Ltd
GST - Applicant, for carrying out refining activity of petroleum products requires Industrial gases - Applicant allowed M/s Prodair Air Products to set up facility for processing of Industrial gases on Build Own Operate basis - Applicant proposes to execute job work agreement with M/s Prodair Air Products for processing and producing the Industrial gases using the inputs provided by the applicant and sending back the Industrial gases to the appliant - Ruling is sought as to whether Re-gasified Liquefied Natural Gas, Demineralized water, Hydrogen Rich off gas and raw water etc. can be sent by applicant to M/s Prodair Air Products Pvt. Ltd. without payment of GST under job work provisions and whether the Industrial gases so produced by M/s Prodair Air Products Pvt. Ltd. can be brought by the applicant without payment of GST under the job work provisions.
Held: Transport of Inputs from principal through pipe lines to the premises of the job worker for processing as well as return of processed goods after job work to the principal cannot be treated as ‘taxable supply' - such manufacture of Industrial gases by M/s Prodair Air Products Pvt. Ltd. amounts to job work as defined u/s 2(68) r/w section 143 of the CGST/KSGST Act: AAR
- Application disposed of: AAR
2018-TIOL-232-AAR-GST
Prodair Air Products India Pvt Ltd
GST - Applicant is a manufacturer of industrial gases and set up a plant adjacent to Bharat Petroleum Corporation Ltd. who is the sole customer - plant is owned and operated by the applicanton the land owned by BPCL on lease rent basis - raw materials for manufacturing Industrial gases are supplied by customer BPCL -BPCL sold all inputs to applicant and collected Sales Tax/VAT/GST and applicant sold manufactured Industrial gases to BPCL by charging GST - Natural gas provided by BPCL is the major input and which commodity is outside the levy of GST - the applicant and BPCL wish to change this business model to a job work model wherein BPCL would commence movement of inputs to applicants plant through pipeline as a principal supplier on free of cost basis and the applicant, as a job worker, would convert the inputs to Industrial gases and same would be sent back to BPCL through pipelines - in these circumstances, applicant has sought an advance ruling as to whether the activity undertaken by them amounts to ‘job work' as defined u/s 2(68) of the CGST Act and consequently classifiable as a ‘supply of service'; what would be tax rate for supply of job work services and what would be the value on which applicant would pay GST.
Held: Activity carried out by applicant of processing natural gas and other inputs received from M/s BPCL on free of cost (FOC) basis to manufacture Industrial gases would fall under the scope of ‘job work' under GST; services included under the Heading 9988 are manufacturing services performed on physical inputs owned by others; activity of applicant is ‘job work' since the output is not owned by the applicant who provides the service - Activity falls under Serial no. (ii) of the HSN 9988 and is taxable @18% GST - Valuation would be the transaction value for which the job work service is rendered: AAR
- Application disposed of: AAR
GST AAAR CASE
2018-TIOL-21-AAAR-GST
Five Star Shipping
GST - Applicant is providing Marine Consultancy Service (MCS) to both Indian and Foreign Ship Owners (FSO) and had sought an advance ruling as to whether MCS provided to FSO constitutes 'composite supply' with the principal supply of consultancy service; whether MCS provided to FSO will qualify as an export of service in terms of s.2(26) of IGST Act as the place of supply of MCS (as a composite supply) will be determined in terms of s.13(2)(a) of the IGST Act i.e the 'location of recipient of service'; whether Consultancy service will qualify as business consultancy service, whether support service qualifies as 'intermediary service' and whether place of service will be the 'location of the supplier of service' - Authority for Advance Ruling had held that the MCS Service provided by applicant does not constitute 'composite supply' and the Consultancy Service provided by appellant also does not qualify as 'Business Consultancy Service' in terms of notification 11/2017-CTR; that the support service provided by appellant qualifies as 'intermediary service' - Appeal filed against this order.
Held: Appellant is actually facilitating the supply of the main services i.e. chartering of the vessels by the FSO to their clients i.e. charterers thereby clearly acting as an Intermediary as the chartering of the vessels is not the main service of the Appellant but their principal i.e the FSO - so also, in addition to the 'Intermediary Services', the appellant is obliged to perform the other administrative activities like examination of lay time calculation, voyage account reconciliation for eventual settlement with charterers which can be classified as 'Accounting Services' - Entire gamut of services performed by appellant are of the "composite supply" of the 'Intermediary services' which is classified under SAC 9997 99 as Other Miscellaneous Services and the 'Accounting Services'under SAC 9982 22 of which the Intermediary service is principal supply - other questions asked have lost the context as well as the relevance since this Appellate Authority has treated the entire gamut of services as a composite supply of "Intermediary Services" and "Accounting Services" of which the 'Intermediary Services' is the principal supply: AAAR
- Appeal disposed of: AAAR
GST RULES NOTIFICATION
59/2018
Declaration in Form GST ITC-04 (in respect of goods/capital goods sent to job worker and received back) for the period July 2017 to September 2018 to be filed by 31st December 2018
58/2018
Return in form GSTR-10 for such class of persons whose registration has been cancelled on or before 30 September 2018 to be filed by 31st December 2018
GST CIRCULAR
72/2018
Circular to clarify the procedure in respect of return of time expired drugs or medicines
71/2018
Clarification on issues pertaining to registration as a casual taxable person & recovery of excess Input Tax Credit distributed by an Input Service distributor
70/2018
Clarification on certain issues related to refund
69/2018
Circular on Standard Operating Procedure for Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16
