2019-TIOL-GST-262 Dated: Friday, February 22, 2019

GST AAAR CASES

2019-TIOL-06-AAAR-GST

National Aluminium Company Ltd

GST - Against the Advance Ruling, both the appellant assessee and Revenue are in appeal before the Appellate Authority - applicant assessee has requested that the AAR order be modified and they be allowed Input Tax credit on inputs and input services used by them for maintenance of their township, security services and horticulture meant for township - Revenue is in appeal against allowing of the Input Tax credit on the services utilized for maintenance of Guest house, transit house and Trainee hostel and for allowing credit of the services used for plantation and gardening within the plant area including the mining area and the premises of other establishments like administrative building, guest house, transit house and training hostel.

Held:

+ It is settled law that to claim Input tax credit, an input service must be integrally connected with the business of manufacturing the final product - Cost of an input service forming part of the cost of final product alone cannot be a condition to allow the benefit of Input tax credit - accordingly, services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments will qualify for input tax credit - moreover, creation and maintenance of green area/zone inside plant/mining/office premises is a business necessity for controlling pollution as well as atmospheric temperature and also a requirement for preventing soil erosion - as the aforesaid are mandated in various laws in which the appellant assessee conducts its business such as the Forest Conservation Act, Environment Protection Act etc., such activities are integral to business activity and hence can be treated as activities in course or furtherance of business, hence Revenue appeal to this extent is not sustainable and is rejected - Bombay High Court decision in Coca Cola India Pvt. Ltd. [ 2009-TIOL-449-HC-MUM-ST ] relied upon: AAAR

+ Insofar as appeal of assessee is concerned, it is clarified by the CBIC vide its Press Release dated 10.10.2017 that perquisites are not subjected to GST and, therefore, since perquisites are outside the scope of GST, input tax credit shall not be available to the assessee in respect of tax paid on goods and services procured by it for management, repair, renovation, alteration or maintenance services (including watch and ward services, security services, Plantation/gardening/landscaping services etc.) pertaining to residential accommodation for its employees in its township/colony - Even if it is argued that perquisites do fall within the scope of GST, the benefit of Input Tax credit still cannot be allowed as any activity for the comfort, convenience and welfare of its employees cannot be treated as having been done in course or furtherance of business- Bombay High Court decision in Manikgarh Cement [ 2010-TIOL-720-HC-MUM-ST ] relied upon: AAAR

- Assessee appeal dismissed/Revenue appeal partially allowed: AAAR

2019-TIOL-05-AAAR-GST

IL And FS Education And Technology Services Ltd

GST - Information and Communication Technology (ICT) @ School Project - Odisha Madhyamik Shiksha Mission (OMSM) mandated Odisha Knowledge Corporation Limited (OKCL) to implement ICT project in 4000 government and government aided higher secondary schools across the State of Odisha - Appellant was successful bidder and was awarded tender for implementation of the project - contract period is of five years and in terms of which the entire infrastructure (supplied and installed) would be transferred to school and mass education department at zero transfer value - appellant had claimed exemption/Nil rate under Entry no. 72 of the notification 12/2017-CTR but the same was denied by the AAR on the ground that the recipient of the service viz. OKCL is a body corporate and cannot be regarded as Government; that the supply undertaken is in the nature of composite supply; that the service provided is not exclusively in the nature of training programme; that though the source of funding for the service is the state government and central government, yet as per the contract the payment responsibility is vested on M/s OKCL - appeal to AAAR.

Held: Appellant has failed to produce any documentary evidence as to how the provision of service to M/s OKCL qualifies to be a provision of service to the Central Government or State Government or Union Territory administration - even if some percentage of shares are owned by the Government of Odisha in M/s OKCL, the company cannot be construed as Government, therefore, Authority fully agrees with the findings arrived at by the AAR - having failed to meet the primary requirement of the condition of the notification i.e. the supply has to be a supply of service provided to the Central Government, State Government or Union Territory Administration, Appellate authority refrains from discussing other aspects of the notification - AAR order [ 2018-TIOL-90-AAR-GST ] upheld and appeal rejected: AAAR

- Appeal rejected: AAAR

GST AAR CASE

2019-TIOL-51-AAR-GST

Rmkv Fabrics Pvt Ltd

GST - Salwar/Chudidar sets, both top and bottom not stitched consisting of three pieces of fabrics (top/bottom/dupatta) is classifiable as fabrics under Chapter 50 to 55 of Customs Tariff and applicable rate of tax would be 2.5% CGST as per applicable sl.no. in Schedule I to notification 1/2017-CTR depending upon material: AAR

GST - Salwar/Chudidar sets, top semi-stitched, but bottom not stitched and dupatta fabrics cut from bales/thans is classifiable as ‘made up articles' under tariff heading 6211 depending upon material - attracts tax CGST @2.5% if sale value does not exceed Rs.1000 per piece and CGST @6% if sale value exceeds Rs.1000 per piece: AAR

GST - Salwar/Chudidar sets, top fully stitched but bottom not stitched and dupatta fabrics cut from bales/thans is classifiable as ‘made up articles' under tariff heading 6211 depending upon material - attracts tax CGST @2.5% if sale value does not exceed Rs.1000 per piece and CGST @6% if sale value exceeds Rs.1000 per piece: AAR

GST - Salwar/Chudidar sets, top neck-worked, bottom not stitched and dupatta fabrics cut from bales/thans is classifiable as ‘made up articles' under tariff heading 6211 depending upon material - attracts tax CGST @2.5% if sale value does not exceed Rs.1000 per piece and CGST @6% if sale value exceeds Rs.1000 per piece: AAR

- Application Dispose of: AAR

GST HIGH COURT CASES

2019-TIOL-48-HC-KERALA-GST

Kerala Agencies Vs State Tax Officer

GST - Petitioner contends that although they had attempted to upload Form GST TRAN-1 within the stipulated time, they were unable to because of some system error - they, therefore, seek directions to enable them to take credit of the available input tax.

Held: Not only the petitioner but many other assessees faced this technical glitch and approached the High Court and on earlier occasions in view of paragraph 5 of CBIC Circular 39/13/2018-GST dated 03.04.2018, they were permited to apply to the second respondent viz. Nodal Officer for resolution of the issue - Petitioner may, therefore, apply to the nodal officer within two weeks and who will (within a week thereafter) look into the issue and facilitate the petitioner's uploading FORM GST TRAN-1 without reference to the time-frame - if the uploading is not possible for reasons not attributable to the petitioner, the authority will also enable them to take credit of the input tax available at the time of migration - Petition disposed of: High Court [para 4 to 6]

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-47-HC-P&H-GST

Shri Kunj Bihari Industries Llp Vs State Of Haryana

GST - Petitioner seeking a Writ of Mandamus for directing the respondents to issue CENVAT refund amounting to Rs.7,13,975/- due to the petitioner up to 30 th June 2017; further informing that the prescribed application had been successfully submitted electronically within the prescribed period on the GSTN portal - respondent department informing that no record of the TRAN-1 as claimed, is presently available on the online portal (ACES) which means that the TRAN-1 claim has not been filed and, therefore, there is no law by which the TRAN-1 amount can be sanctioned to the petitioner; that the Government of India vide notification 48/2018-CT has extended the time to file TRAN-1 claim up to 31 st March 2019 and the petitioner may do the needful.

Held: It is, therefore, clarified that it shall be open to the petitioner to apply for rectification of TRAN-1 to the nodal officer within 15 days - further clarified that in case the claim is made by the petitioner within the said period, the officer concerned shall take necessary action thereon before 31.03.2019 in accordance with law - present writ petition is, therefore, rendered infructuous and is disposed of as such: High Court [para 5, 6]

- Petition disposed of: PUNJAB AND HARYANA HIGH COURT

2019-TIOL-46-HC-KERALA-GST

JKB Motors Vs UoI

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-45-HC-ALL-GST

Torque Pharmaceuticals Pvt Ltd Vs UoI

GST - Section 109 of the CGST Act, 2017 - Constitution of Appellate Tribunal - Counsel for GST council is unable to tell as to whether the Appellate Tribunal has been constituted or not - Counsel for State is also unable to inform as to whether the State has moved in the matter or not - Therefore, the matter is listed on 28 February 2019 and on that date in addition to standing counsel, some responsible officers of the State from Lucknow as well as GST Council should appear in the matter: High Court

- Matter posted : ALLAHABAD HIGH COURT

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