AAR CASES

2019-TIOL-136-AAR-GST

GST - Applicant seeks a ruling as to whether the freight charges recovered by them from the customer without issuance of consignment note will be eligible for exemption from GST as per notification 12/2017-CTR, Sr. no. 18.

Held: Contracts are linked by a ‘cross fall breach clause' deeming that any breach in either of the contracts to be a breach of the other contract as well providing the recipient with an absolute right to terminate both the contracts or claim damages - the ‘cross fall breach clause' settles unambiguously that supply of goods, their transportation to the contractee's site delivery and related services are not separate contracts but only form part of an indivisible composite works contract supply - composite nature of the contract is clear from the fact that the first contract cannot be performed satisfactorily unless the goods have been transported and delivered to the contractor's site - inasmuch as the two contracts are not separately enforceable - therefore, the supply is in the nature of ‘Composite supply of Works Contract' which is a service and would be taxable @18% in terms of notfn. 11/2017-CTR - Questions posed by the applicant are answered in the negative: AAR

- Application disposed of: AAR

2019-TIOL-135-AAR-GST

GST - Pune Municipal Corporation had invited bids from eligible parties for installation of Energy Efficient dimmable LED Street lights along with pet feeder basis SCADA system on a design, build, finance, operate, maintain and transfer basis for a period of twelve years - applicant was awarded the project - applicant contends that they meet the conditions covered under sl. No. 3(vi)(a) of notification 11/2017-CTR and rate of GST applicable is @12% - applicant is before the AAR.

Held: In the present case, there is supply of both, goods and services made in conjunction with each other in the ordinary course of business - supply of goods/services is naturally bundled with the supply of services being incidental to the supply of goods and, therefore, such contracts are to be considered as a composite supply of services where the principal supply is of goods and the supply of services is incidental/ancillary to such supply of goods - activity will not be covered under sl. No. 3(vi)(a) of notification 11/2017-CTR because the said notification covers supply of services and does not cover supply of goods - applicant is, therefore, required to discharge their GST liability at the rate which will be the tariff rate for the goods, in this case, the LEDs and fixtures - LED Lights or Fixtures including LED lamps are covered under SH 9405 4090 of the Tariff and is taxable @12%: AAR

- Application disposed of: AAR

2019-TIOL-134-AAR-GST

GST - Kernels of corn/maize are edible parts of a plant and the same are mixed with oil and salt in order to be used for making of popcorn - AAR agrees with the contention of the applicant that the product in question is covered under Chapter 2008 19 90 of the Tariff and attracts IGST @12%: AAR

- Application disposed of: AAR

 

NAA CASE

2019-TIOL-26-NAA-GST

State Level Screening Committee on Anti-Profiteering, Kerala Vs Mak Plywood Industries Pvt Ltd

GST - Anti-Profiteering - S.171 of the CGST Act, 2017 - Allegation is that the respondent has profiteered on the supply of ‘BWP Trozan Platinum Ply19mm (HSN 4412 3190)” by not passing on the benefit of reduction in the rate of tax at the time of implementation of the GST Act and also when GST was reduced from 28% to 18% w.e.f 15.11.2017 - three invoices issued during the pre-GST and post-GST period and after reduction in tax rate are relied upon - DGAP has in its report stated that in the pre-GST era, the applicable tax rate was 28.81% (CEX duty @12.5% and VAT @14.5%) and on implementation of GST the same was fixed at 28%; that whilst the tax rate applicable on the product was reduced from the existing rate of 28.81% to 28%, the respondent had reduced the per unit base price of the product (excluding tax) from Rs.1028.07(without discount) to Rs.1021.73 (with 17.05% discount); that when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017, the respondent did not increase the per unit base price of the product (excluding GST) which remained unchanged at Rs.1021.73 (with 17.05% discount) - DGAP further reported that the CGST Act, 2017 comes into play in the event there is reduction in the rate of tax or there is an increase in the ITC (which is not subject matter of the present case); that there was a reduction in the per unit base price (excluding tax) in the post-GST era as compared to the pre-GST era and when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017, the per unit base price (excluding GST) had remained the same at Rs.1021.73 and, therefore, there has been no contravention of the above section 171; that the allegation of profiteering is not established.

Held: It is apparent that there was a decrease in the per unit base price (excluding GST) of the product in the post-GST era as compared to the pre-GST era when the applicable tax rate was reduced from 28.81% to 28% w.e.f 01.07.2017 - further, the price of the product remained at Rs.1021.73 when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017 and hence, there was no increase in the per unit base price (excluding GST) of the product, which was Rs.1028.07 in the pre-GST era, therefore, the allegation of profiteering is not sustainable in terms of s.171 of the Act - no merit in the application, hence dismissed: NAA

- NAA

 

HIGH COURT CASES

2019-TIOL-914-HC-P&H-GST

Datawind Innovations Pvt Ltd VS UoI

GST - Petitioner has prayed for issuance of a writ of mandamus directing the respondents to refund the excess Input Tax Credit (ITC) of Rs. 3,51,03,950/- for which the online applications RFD-01A were filed in September 2018 and followed with reminders.

Held: Without expressing any opinion on the merits of the case, Bench disposes of the petition by directing the respondent No.4 to take a decision on the applications, in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of one month from the date of receipt of certified copy of the order – and if the petitioner is found entitled to the refund of the amount, the same to be released within next one month, in accordance with law: High Court [para 4]

- Petition disposed of: PUNJAB & HARYANA HIGH COURT

2019-TIOL-913-HC-ORISSA-GST

Gouri Shankar Mishra Vs State Of Odisha

GST - Petitioner has challenged the action of the opposite parties in not reimbursing the differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - Addl. Government Advocate submits that the Government has now come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 07.12.2017; that the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTI-TAX-0045-2017/38535/F Dated 10.12.2018 inter alia lay down that the works contractor is to be reimbursed for the excess amount, if any.

Held: Petitioner should make a comprehensive representation before the appropriate authority within four weeks and the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines preferably by 15.07.2019 - No coercive action to be taken against the petitioner till disposal of the representation of the petitioner – Petition disposed of: High Court

Petition disposed of: ORISSA HIGH COURT

 

AAAR CASES

2019-TIOL-40-AAAR-GST

Savencia Fromage And Dairy Pvt Ltd

GST - Applicant had sought a ruling from the Authority as to whether 'Breaded cheese' is classifiable as “cheese" under heading 0406 and attract @12% GST - AAR had held that the impugned goods are ‘cheese balls' and are correctly classifiable under heading 2106 and attract GST @18% - appeal to AAAR.

Held: From the pictures of products and packaging, it can be observed that the processed cheese being main ingredient contains 55% of total volume - Classification of goods is based on the entries in the First Schedule to the Customs Tariff Act, 1975 - HSN and Explanatory Notes, which form the essential guidance for interpretation of any heading make it abundantly clear that Cheese which contains various additions that are battered or breaded and pre-cooked are included as ‘Cheese' under heading 0406 - In view of the foregoing, goods under reference are classifiable under Sl. no. 13 of Schedule II of Notification 1/2017-CTR under heading 0406 and are taxable @12% GST - AAR ruling set aside and appeal allowed: AAAR

- Appeal allowed: AAAR

 

ARTICLES

GST - Agenda for the second year - Part 35 - ROD Orders - Law-making by administration

GST - Post-Sale Discount - Let's avoid stirring Hornet's Nest!