FLASH NEWS
GST Council authorises Kerala to impose 1% Calamity Cess for a period of 2 years on only intra-state transactions + sets up GoM on Lottery & Real Estate issues
GST Council decides: Limit for Composition Scheme hiked to Rs 1.5 Cr from April 1, 2019 + Annual Return with quarterly tax payment + Composition Scheme for Small Service Providers & also mixed supply with Rs 50 lakh threshold & 6% tax rate + GST exemption limit enhanced to Rs 40 lakhs but remains Rs 20 lakhs for hill States + States given choice to opt out of Rs 20 lakh limit & also opt down from Rs 40 lakh
GST NEWS
GST Exemption Threshold is now Rs 40 lakhs; Rs 50 lakh Composition Scheme for service providers approved
GST HIGH COURT
2019-TIOL-06-HC-DEL-GST
Bhargava Motors Vs UoI
GST - Section 140(3) of the CGST Act, 2017 - Petitioner's grievance is that the credit it claimed in TRAN-1 Form, uploaded on 27.12.2017, did not result in reflection of appropriate credits of Rs.74.96 lakhs and Rs. 10.5 lakhs available to it but rather the electronic ledger reflected no figure at all, as credit available to it - Respondent filed an affidavit stating that the petitioner filed Form GST TRAN-1 but all the ITC fields were zero - petitioner points out that the intimation of its having successfully uploaded the TRAN-I Form, was received and its screenshot has been produced.
Held: Given the circumstances and the fact that the petitioner has asserted that substantial credit was available to it on the transactions which it conducted prior to 30.03.2017, for which the law entitled it to credit, it appears to the Court that the authorities have so far not looked into the merits of the claim for input credit but rather rejected his entire entitlement itself on the ground that the credit reflected in the electronic ledger does not show any figure - It also appears that after the electronic form is filled, no provision for its “review” was made available to the assessee before uploading it - lack of this facility has complicated the issue, because if such facility or provision would be made available, the individual assessees could have obtained screenshots just before uploading the form - Court is of the opinion that the respondents should disclose as to what was actually filled in the TRAN-I Form by the petitioner and the basis of its assertion that no credit was available to it, having regard to the fact that the petitioner claims credit on the basis of real transactions in real goods - Respondents shall file affidavits before the Court within two weeks - Matter listed on 13 March 2019: High Court [para 5 to 8]
- Matter listed: DELHI HIGH COURT
GST AAR CASES
2019-TIOL-11-AAR-GST
Nuetech Solar Systems Pvt Ltd
GST - Applicant imports Vacuum Tubes (Evacuated Tube Collector/Vacuum Tube Collector) for manufacture of Solar Water heater - Applicant contends that the Solar Evacuated Tube Collector (ETC) is a part of Solar Water Heater, a Renewable Energy device, and is used specifically for the particular function i.e heating the water - Applicant claims classification of ETC under 8419 19 and being entitled for benefit of Sl. No. 234, Schedule I of Notification 1/2017-ITR - They seek confirmation in this regard by filing the present application before the Authority for Advance Ruling.
Held: ETC merits to be a part of Solar Water heater systems under Chapter heading 8419 - To claim concessional rate of 5%, the product must satisfy the conditions namely (i) it must fall under either chapter 84 or 85 and (ii) it must be a solar power based device (renewable energy device) or part thereof - Solar water heater in question does not appear to be a 'Solar Power based device' inasmuch as the solar energy is absorbed by the coated surface of the inner tubes (of the Evacuated Tube Collector, ETC) thereby heating them which in turn heats the water contained therein - the term 'power' means electricity and, therefore, the term 'Solar Power' means the electricity generated from solar energy - Solar Power based devices should be such devices which are operated by electricity generated out of solar energy - in the instant case, the product ETC does not generate electricity at any stage and hence cannot be construed as either Solar Power based device or part thereof - Product ETC is not entitled for concessional rate of 5% IGST under Sl. No. 234 of Schedule I of Notification 1/2017-ITR: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
2019-TIOL-10-AAR-GST
ITD Cementation India Ltd
GST - Applicant has entered into an agreement with Inland Waterways Authority of India (IWAI) for construction of multi-modal IWT terminal at Haldia on EPC basis - applicant seeks a ruling on applicability of notification 24/2017-CTR and 31/2017-CTR viz. the rate at which GST should be charged on the Works Contract Service to be supplied for construction of above terminal.
Held: IWAI is clearly not the Government of India but a Government entity having no sovereign authority to collect Government Revenue - moreover, the user fees that IWAI collects is not credited to the Consolidated Fund of India and is, therefore, not Revenue but proceeds from business as defined u/s 2(17) of the Act - Applicant is, therefore, supplying Works Contract Service for an original work that is meant for commerce and business and hence does not satisfy the conditions laid down under Sr. no. 3(vi)(a) of the Notification 11/2017-CTR - Services will attract GST @18% under Sr. no. 3(xii) of Notification 11/2017-CTR: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
2019-TIOL-09-AAR-GST
US Polytech
GST - PP Non-woven bags specially made from non-woven polypropylene fabric are plastic goods and classifiable under SH 3923 29 and chargeable @18% GST: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
2019-TIOL-08-AAR-GST
Webfil Ltd
GST - Applicant since established by government notification is liable to deduct tax at source u/s 51(1) of the CGST Act read with notification 1344-FT dated 13/09/2018 being a company controlled by the Central and State Governments within the meaning of s.2(27) of the Companies Act, 2013: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
2019-TIOL-07-AAR-GST
GGL Hotel And Resort Company Ltd
GST - Applicant seeks a ruling as to whether Input Tax Credit is available for lease rent paid during pre-operative period for the leasehold land on which the resort is being constructed to be used for furtherance of business, when the same is capitalised and treated as capital expenditure.
Held: Para 23 of AS10 says that the cost of a self-constructed asset should be determined using the same principles as for an acquired asset, and it is usually the same as the cost of constructing an asset for sale - When an immovable property like a building is sold, the profit is computed after deducting from the sale proceeds the cost of the property, including the land - The cost of constructing the immovable asset, therefore, includes the lease rental paid for right to use the land on which the asset is built - Being an integral part of the cost of the immovable property, the lease rental paid for the service of right to use the land is a supply for construction of the said property - Applicant's argument about absence of any nexus - direct or indirect - between the lease rental and construction of the buildings for hotel etc. is incorrect - nexus between them is, therefore, direct and the two are inseparable - Construction of the hotel etc. is impossible unless the Applicant enjoys uninterrupted right to use the land - It is clear from the Agreement that the Applicant cannot enjoy that right if he fails to pay the lease rental - Construction of the immovable property is, therefore, critically dependent on the supply of the leasing service - The leasing service for right to use the land is, therefore, a supply for construction of the immovable property - Prohibition from availing input tax credit, as provided under section 17(5)(d) of the GST Act, is not limited to the civil structure being constructed - It extends to the immovable property in general (other than plant and machinery), which includes the supplies received for retaining the right to use and develop the land - Such supplies are essential for construction of the civil structure on the piece of land-The property is, therefore, admittedly being constructed on the Applicant's own account and treated as fixed asset, including the lease rental paid - Whether the lease rental paid for the pre-operative period is capitalized under the head ‘Leasehold Land' or ‘Building Block' is of little significance in this context -Held that the lease rental paid during the pre-operative period should be treated as part of the cost of goods and services received for the purpose of constructing an immovable property (other than plant and machinery) on the Applicant's own account - Input tax credit is, therefore, not admissible on such lease rental in terms of section 17(5)(d) of the GST Act: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
JEST GST by Vijay Kumar
No Revenue by Killing the Goose
ARTICLES
Treading GST Path -53 - GST on TCS
GST & Duty free shops
GST - A Common Composition Scheme for Goods & Services more desirable!
GST - Higher Exemption Threshold - Better 'economics' for tax administration!
Happy New Year - GST has made things simpler!- PM
GST - Agenda for the second year- Part - XVIII
GST: Santa Claus comes calling 'Merry Christmas'...! - Part IV
GST - Agenda for the second year - Part XIX
Cancellation of Registration - Refund of Input Tax Credit
Debit sequence of unutilized ITC for GST refund
