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HIGH COURT CASES
2019-TIOL-2121-HC-KERALA-GST
Kitex Garments Ltd Vs Assistant State Tax Officer
GST - Goods in transit have been seized vide order passed u/s 129(1) of the Act on the ground that the goods were being transported from New Delhi and not from Ghaziabad as alleged; that the value of goods has been suppressed - Petitioner challenging only the order of seizure.
Held: A simple reading of s.121 of the Act reveals that the legislature has not provided for any appeal against the order, if any, passed pertaining to the seizure; that the order impugned is nothing but an order pertaining to seizure and as such is not appealable - On a conjoint reading of Sections 107 and 121 of the Act it is apparent that though all orders passed under the Act by the adjudicating authority are appealable but not the one's which have been specifically excluded from the purview of appeal under Section 121 of the Act such as orders pertaining to seizure - Bench holds that the order of seizure of the goods in transit or storage passed under Section 129(1) of the Act is not appealable and, therefore, a writ petition is maintainable against it subject to the limitations of judicial review - Prima facie, the recording of the finding for the purposes of seizure is in the nature of adjudication which cannot be done without opportunity of hearing to the party concerned - matter requires consideration - In the meantime, the goods along with vehicle shall be released on furnishing indemnity bond and security other than cash and bank guarantee in respect of proposed tax and penalty as has been determined under Section 129(3) of the Act subject to the penalty of the said order - Counsel for Revenue is directed to seek instructions and file counter affidavitz within two weeks and matter to be listed for final disposal thereafter: High Court
- Matter listed: KERALA HIGH COURT
2019-TIOL-2120-HC-JHARKHAND-GST
Mahadeo Construction Company Vs UoI
GST- Petitioner saddled with interest amount for the delayed filing of GSTR-3B returns for the months February and March 2018; bank accounts attached for non-payment of the amount - screen shots of the GSTN Portal have been brought on record by way of Annexures to the writ application, which show that the due date for payment of the return for the months of February 2017-2018 and March 2017-2018, was 31.03.2019 - Those screen shots have not been denied by the counsel for the CGST - It is also an admitted fact that the return for both the months had already been filed by the petitioner on 21.09.2018 and 23.09.2018 respectively - petitioner contends that interest has been levied without entering into the adjudicatory process as required u/s 73 of the Act; that in view of notification 76/2018-CT dated 31.12.2018, late fee payable stands waived for the registered persons who failed to furnish the return in Form GSTR-3B for the months of July, 2017 to September, 2018 by the due date, but furnishes the same between the period from 22nd December, 2018 to 31st March, 2019 - Counsel for Revenue submitted that the said notification is only for the waiver of the late fee and not for the interest.
Held: Counsel for the CGST allowed four week's time to file the detailed counter-affidavit in the matter - Till then, the operation of the order dated 22.05.2019 shall remain stayed - respondent authorities shall also be at liberty to undertake the adjudicatory process under Section 73 of the CGST Act, if they are so advised - matter posted on 28.08.2019: High Court
- Matter posted: JHARKHAND HIGH COURT
2019-TIOL-2109-HC-JHARKHAND-GST
Tata Steel Ltd Vs State of Jharkhand
GST/CST - All the petitioners are aggrieved by the impugned circular dated 11.10.2017, issued by the State of Jharkhand, in its Commercial Taxes Department, denying the issuance of Form-'C' for all the items included in definition of 'goods' given under Section 2(d) of the CST Act, including 'high speed diesel' - Circular has been issued on the pretext that after coming into force of the Goods and Services Tax regime in the State, w.e.f. 01.07.2017, all the six items which have been excluded in Jharkhand Goods and Services Tax, 2017, i.e., alcoholic liquor for human consumption, which is exempted under Section 9(1) of the State GST Act, and petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, on which, the liability to pay tax under the State GST Act was deferred till the notification issued under Section 9(2) of the said Act, are still governed by the Jharkhand Value Added Tax Act (JVAT Act) - circular has been issued on the pretext that after coming into force of the Goods and Services Tax ('GST') regime in the State, w.e.f. 01.07.2017, all the six items which have been excluded in Jharkhand Goods and Services Tax, 2017, ('State GST Act'), i.e., alcoholic liquor for human consumption, which is exempted under Section 9(1) of the State GST Act, and petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, on which, the liability to pay tax under the State GST Act was deferred till the notification issued under Section 9(2) of the said Act, are still governed by the Jharkhand Value Added Tax Act - dealers dealing in the goods, except the aforementioned six items, are no more liable to pay tax under the JVAT Act, and as such, their registration under the JVAT Act have come to an automatic end w.e.f. 01.07.2017 - Since such dealers are not selling the aforesaid six goods, they are no more liable to pay tax under the JVAT Act,, and as such, their registrations under Section 7(2) of the CST Act as well, have become invalid w.e.f. 01.07.2017 - As such, those dealers shall not be entitled to inter-State purchase of the aforesaid six goods, on the concessional rates of tax under the provisions of the CST Act, on the basis of Form-C and accordingly, the State Government decided not to issue Form-C to such dealers for Inter-State purchase of the aforesaid six goods.
Held: Bench is not concerned with the inpidual cases at this stage, as the impugned action of the State is the blanket ban on issuance of Form-C by the State Government to all those dealers who are not selling the goods as defined under Section 2(d) of the CST Act - The said notification is not directed to a particular dealer, rather it is a general notification applicable to all – registration of a dealer under Section 7(2) of the CST Act is not subject to any liability of the dealer to pay the tax or not, rather as laid down by the Apex Court in Commissioner of Sales Tax, M.P. Vs. Madhya Bharat Papers Ltd., the dealers are entitled to continue to be registered under Section 7(2) of the Act, irrespective of the fact whether they are liable to pay any tax to State or not -Bench is not in agreement with the arguments of the counsel for the State that since the dealers are no more liable to pay tax under the JVAT Act, their registration under Section 7(2) of the Act shall come to an automatic end - very reasoning for issuance of the circular dated 11.10.2017 has no legs to stand in the eyes of law and the said circular cannot be sustained - The same view has been taken by the Punjab and Haryana High Court in Capro Power Limited's case, as affirmed by the Supreme Court and the similar views have been taken by the seven other High Courts in the similar facts and circumstances – Bench sees no reason to deviate from the consistent stands taken by the different High Courts of the Country - Accordingly, the impugned circular dated 11.10.2017 issued by the State Government in its Commercial Taxes Department, which have been challenged in all these writ applications, is hereby, quashed - Pursuant to the interim orders passed in these writ applications, Form-C have been issued to the petitioners and it is an admitted that provisional credit notes have also been given to them by the respective oil companies - Bench makes it clear that the provisional credit notes given to the petitioners shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the petitioners - If the respective oil companies have made the deposit to the State exchequer, they shall also be entitled to claim the refund thereof - apprehension of the State that Form-C may be mis-utilised by some of the dealers, Bench can only clarify that appropriate action can always be taken after giving due notice to the inpidual dealers, and after affording them the reasonable opportunity to show-cause, and in accordance with law, but there cannot be a blanket denial of the benefit of Form-C, as has been done by virtue of circular dated 11.10.2017 – Writ applications allowed: High Court [para 24, 26, 27, 28, 29]
- Applications allowed : JHARKHAND HIGH COURT
AAR CASES
2019-TIOL-287-AAR-GST
Prakash Chand Jain
GST - Applicant intends to trade and/or manufacture/assemble solar LED Torch, used generally in agriculture/ rural area - Such torch has internal assembly to charge battery through solar panel and also with AC adaptor, solar panel is also provided, sometimes it is supplied without solar panel, but with solar charging socket – Applicant seeks a ruling on GST rate on such product and as to what would happen, if torch is having solar panel input socket, but provided without solar charging panel.
Held: Product Nano Rechargeable LED Torch Light is classifiable under Chapter Head 8513 presently attracting GST @18% -Product in question will not be entitled to concessional rate of GST @5% under Sr.No.234 of Schedule-I to Notification No.01/2017-CT(Rate) dtd.28.06.2017 as the same is not a 'Solar Based Device': AAR
- Application disposed of: AAR
2019-TIOL-286-AAR-GST
Ravi Masand
GST - Agriculture Mechanical Sprayer merits classification under Chapter Head 8424 of the GST Tariff and with effect from 25.01.2018, the said product would attract GST @12% in terms of Sr.No.195B of Schedule-II to Notification No. 01/2017-CT(R) as amended vide Notification No. 06/2018-CT(R) dtd.25.01.2018 and concurrent notifications issued by the State Tax authorities - mere provision of a battery for operating the said Mechanical Sprayers would in no way alter the nomenclature or classification of the impugned product: AAR
- Application disposed of: AAR
2019-TIOL-285-AAR-GST
Madhya Pradesh Power Generating Company Ltd
GST - Applicant, M P Power Generating Co. Ltd is 100% Madhya Pradesh State Government Hold Company - For generation of Power, Power Plant are to be established at various locations but as the locations are remote, no plant can be set up or start functioning without having residential quarter available at Plant site - therefore, construction of residential quarter is part and parcel of the project of establishment of Power Plant - applicant seeks a ruling on the Rate of GST on contract for construction of building and structure for colony at village Siveria at Shree Singaji Thermal Power Project Stage -II Khandwa; on the Rate of GST on construction contract of residential quarters at various power houses of MPPGCL.
Held: GST will be applicable @18% under SAC 9954, inasmuch as it refers to construction of residential quarters, which was awarded to M/s. Shreeji Infrastructure P. Ltd., as already ruled vide order no.15/2018 dtd. 18.10.2018 = 2019-TIOL-06-AAR-GST - insofar as the ruling sought on rate of GST applicable on construction contracts of residential quarters at various power stations of the Applicant as the same is a very generic question, same cannot be decided without looking into specific contracts being awarded - Authority, therefore, refrains itself from giving any categorical ruling on the second question: AAR
- Application disposed of: AAR
2019-TIOL-284-AAR-GST
NMDC Ltd
GST - Applicant, NMDC Ltd. is engaged in mining and sale of "rough diamonds" - they seek a ruling about clarification on classification of royalty payments to Government in respect of Mining lease under "Licensing services for Right to use minerals falling under the heading 9973" and determination of the liability to pay tax on contributions made to District Mineral Foundation (DMF) and National Mineral Exploration trust (NMET) as per MMDR Act, 1957.
Held: Service shall be classified under Tariff Heading 99733 - contributions are nothing but additions to the royalty payable for the original supply itself, and is therefore liable to be added to the value of the original supply and treated accordingly for the purposes of GST - applicant being the recipient of such service shall have to pay tax on the said supply under reverse charge mechanism as per Notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017: AAR
- Application disposed of: AAR
2019-TIOL-283-AAR-GST
Directorate Of Skill Development Global Skill Development Park
GST - Project for the Establishment of Centre for Occupational Skills Acquisition within the Global Skills Park (GSP) in Bhopal, Madhya Pradesh was awarded to the applicant, Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, Government of Madhya Pradesh - ITE Education Services Pte. Ltd, a Singapore based Consultancy Company is to provide certain Consulting Services to the Directorate of Skill Development for the said Project - Applicant seeks a ruling as to whether the services received by it from a provider of service located in a non taxable territory would attract the provision of sec 5(3) read along with Notification No 10/2017 IT(R) ; whether applicant is liable to pay tax under reverse charge mechanism.
Held: Applicant is engaged in activities which is to be treated as Business or profession as defined in the Section 2(17) of CGST Act - As per Notification No. 9/2017 -Integrated Tax (Rate), exemption is not available if the service is imported for the purpose of business or commerce even by the Govt and Govt needs to pay GST under Reverse Charge - Q No 14 of GST Sectoral Series on Government Service substantiates the said view - Therefore the applicant needs to pay the IGST under Reverse Charge in terms of Notification No. 10/2017-IT(R) : AAR
- Application disposed of: AAR
2019-TIOL-282-AAR-GST
Indo Thai Securities Ltd
GST - Applicant is a registered stock broker dealing in purchase/sale of securities for and on behalf of its clients and charges brokerage for its activities - They charge interest from customers for delayed payment - The amount on which interest is charged consists of two components - cost of securities and brokerage - Interest charged on cost of securities is exempt under notification no. 12/2017 Central Tax (Rate) - Applicant seeks a ruling as to the tax liability on such interest charged from customers.
Held: Stock broking service is the principal supply and all other ancillary supplies shall take colors from the principal supply itself and it shall be classified as principal supplies i.e. Stock Broking Services - Matter has been discussed in detail in the Circular No. 102/21/2019-GST issued on 28th June 2019 - having regard to the nature of transaction, it cannot be said that the share broker has extended any deposit, loans or advances to its clients hence the additional amount being charged cannot be treated as ‘interest' hence the exemption granted under entry no 27 of notification no 12/2017 is not applicable on the transaction on which advance ruling is sought - additional amount charged on delayed payment shall be taxed as per original supply i. e. supply of Stock broking services: AAR
- Application disposed of: AAR
2019-TIOL-280-AAR-GST
Reliable Hospitality Service
GST - Applicant is engaged in the business of construction, erection, commissioning and completion of bridges - applicant is a sub-contractor to the main contractors who have been awarded the construction contracts pertaining to construction/widening of roads by the Government/Government entities such as National Highway Authority of India - applicant seeks classification of services so supplied by it.
Held: Applicant is engaged in the activity of erection, construction, installation, commissioning of ‘bridges' and which is an immovable property - supplies made by the applicant as a sub-contractor qualifies as a Works Contract under the CGST Act, 2017 and which is deemed as a service in terms of para 6(a) of Schedule II of the Act - services provided by the applicant as sub-contractor to principal contractor continues to be covered under serial no. 3(iv) of 11/2017-CTR and attracts GST @12%: AAR
- Application disposed of : AUTHORITY FOR ADVANCE RULING
ARTICLE
The Nexus between High Corporate tax rate & Phantom FDI!
