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CGST (RULE) NOTIFICATIONS

48/2019

Seeks to amend notification No. 41/2019 - Central Tax, dated the 31st August, 2019.

47/2019

Seeks to make filing of annual return under section 44 (1) of CGST Act for F.Y. 2017-18 and 2018-19 optional for small taxpayers whose aggregate turnover is less than Rs 2 crores and who have not filed the said return before the due date.

46/2019

Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020.

45/2019

Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the quarters from October, 2019 to March, 2020.

44/2019

Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020.

HIGH COURT CASE

2019-TIOL-2348-HC-MUM-GST

Sandeep Patil Vs UoI

GST - Petitioners are seeking a declaration that the consideration being paid by it to Mumbai International Airport Ltd (MIAL) under a concession agreement dated 17th February 2014 towards the minimum guaranteed fees/ concession fees for grant of rights and use of licensed premises of duty free shops in the departure or arrival area of international airport, is not liable to GST and hence the MIAL is not entitled to collect GST from the Petitioner - common issue raised in writ petitions and the PIL is whether the DFSs at MIAL can be saddled with burden of taxes or restrictions despite the provisions of Article 286 of the Constitution of India and the ratio laid down by the Apex Court in the matter of DFSs situated at Bangalore International Airport in the case of Indian Tourist Development.

Held: In view of the binding precedents in J. V. Gokal & Co. vs CST, [AIR 1960 SC 595] and India Tourist Development Corpn. Ltd. Through Hotel Ashoka v. CCT, = 2012-TIOL-08-SC-VAT , Bench is of the prima facie view that issues raised by the Petitioner have considerable merit, and therefore, it has no hesitation in entertaining these writ petitions notwithstanding the availability of alternate remedy against the impugned order - approach of the Respondents by contending that the that the judgments are not concerning the GST laws appears to be ex-facie erroneous, moreso when the judgments on which the Respondents seek to rely, are neither of the GST regime, nor passed in the matters of duty free shops situated at the arrival or departure area of international airports - in Sandeep Patil vs. Union of India & Ors. (Criminal Public Interest Litigation No.14 of 2019) Bench has held that sale to the departing passengers amounts to export of goods and DFS is an "exporter" - same view has also been taken by the Allahabad High Court in Atin Krishna vs. Union of India & ors. = 2019-TIOL-1136-HC-ALL-GST and in A-1 Cuisines Private Limited Vs. Union of India = 2018-TIOL-2916-HC-MUM-GST - in view of Section 5(2) read with Section 19(1) of the Sale of Goods Act, 1930, the condition of sale/declaration printed on the invoice of DFS, pursuant to signatures by the outbound passenger and cashier, acts as a contract agreeing that the property in the goods purchased from DFS passes to such outbound passenger only when such outbound passenger lands at the final destination - Section 2(5) of the IGST Act defines "export" to mean "taking goods out of India to a place outside India" - In view of the above, supply by the DFS of the Petitioner to the outbound passenger constitutes exports by the DFS and consequently, in terms of section 16(1) of the IGST Act, it becomes a zero rated supply - Respondent-Authority has erroneously held that the Petitioner does not satisfy the crucial test of sending of the goods to foreign destination where they would be received as 'imports', to deny the benefits of zero rated supply - During the period between 1st July 2017 and 31st January 2019, the supply of goods from arrival DFSs is also treated as "export" by the central government vide order dated 31st August 2018 in a custom matter of Aarish Altaf Tinwala (supra) and this position has been affirmed by the Supreme Court by rejecting the writ petition filed against this central government order vide its order dated 10th May 2019 in Writ Petition (c) No.564 of 2019 - Hence by legal fiction, the supply of goods from arrival DFS would also be an export of goods under the IGST Act, and hence, a zero rated supply - Since the zero-rated supply qualifies for 100% ITC, the Petitioner is eligible for the refund thereof - With effect from 1st February 2019, in view of the CGST (Amendment) Act, 2018 , supply of warehouse goods before clearance for home consumption have been notified/ classified as activities or transactions which shall not be treated as a supply of goods - Accordingly, effective from 1st February 2019, sale of goods from arrival DFS falls under entry 8(a) of Schedule III to CGST/SGST Act; and further, section 17(2) of the CGST Act is amended according to which reversal of ITC pertaining to activity specified in Schedule-III is not required - Accordingly, the Petitioner is to claim ITC pertaining to arrival FS also - Once this ITC is eligible, refund of entire ITC pertaining to departure and arrival DFS is eligible, based on formula of refund prescribed in Rule 89 - customs duty and IGST is leviable only on removal of warehoused goods from the customs area, which happens when the arriving passengers leave the custom area. Since, the goods sold by DFS to arriving passengers do not leave the customs area, DFS is neither liable to pay customs duty, nor IGST - both before and after the introduction of GST, the sales to arriving passengers continue to be sales in and/or from the custom area, as at the point of sale in DFS, the goods have neither crossed the customs frontier nor have they been cleared for home consumption by DFS and accordingly, neither customs duty, nor Integrated Tax, is payable by DFS - There is also merit in the contention of the petitioner that arriving passenger's baggage is exempt from the integrated tax in view of the Customs Notification No. 43/2017-Cus dated 30th June 2017 and IGST Notification No. 2/2017 IGST (rate) dated 28th June 2017 - In view of the above exemption read with the duty free allowance available under the Baggage Rules applicable to arriving passengers, neither customs duty (upto the permitted baggage allowance) nor IGST is levied on such goods - Such import of goods by arriving passengers across custom frontier as passenger baggage is, therefore, an exempt supply under the GST, hence no IGST is payable by either the DFS on its imports, or on supply to arriving passengers - The arriving passengers are also not required to pay any IGST on crossing the custom frontiers, in view of the above exemption read with the duty free allowance under the Baggage Rules: High Court [para 18, 20, 21, 22, 23, 27, 28, 29]

GST - If the duty free shop, which caters to the outgoing or incoming international passengers, is subjected to local taxes by the State, the tax burden will increase and the price of the goods, which are supposed to be free of taxes and duties, will go up, and the same would prevent the duty free shops in India from competing with DFSs at international airports elsewhere in the world - This will also hamper and prejudicially affect our foreign trade, and augmentation and conservation of foreign exchange - this will also negate the intent and purpose of Article 286 of the Constitution of India - impugned order and the impugned show cause notice dated 10th January 2019 are manifestly arbitrary and in the teeth of the purpose and intent of Article 286 of the Constitution of India and the provisions of the GST law read with the Customs Act, 1962 [para 34, 36]

GST - W.P. No.1511 of 2019 succeeds - Impugned order dated 10th January 2019 and the impugned show cause notices are quashed and set aside: High Court [para 37]

GST - Writ Petition No. 1535 of 2019 - Bench refrains from issuing any declaration since the Petitioner is held to be entitled for refund of ITC and as such no prejudice will be caused to them, if they would first pay GST on the services provided to DFSs by MIAL and take ITC of the entire tax amount, and thereafter claim refund of the same by following the procedure contained in Rule-89: High Court [para 37]

GST - Criminal application no. 8 of 2019 taken out in Criminal PIL No. 14 of 2019, is rendered infructuous and the same is, therefore, dismissed: High Court [para 37, 38]

GST - Counsel for Revenue requests Stay to this judgment and order, however, same is refused: High Court [para 38]

- Petition allowed : BOMBAY HIGH COURT

2019-TIOL-2347-HC-AP-GST

Lantech Pharmaceuticals Ltd Vs PR CCGST

GST - Petitioner could not file the TRAN-1 due to technical glitches.

Held : In view of the decisions in UNINAV DEVELOPERS PVT. LTD. - 2019-TIOL-1661-HC-DEL-GST , Bhargava Motors - 2019-TIOL-1060-HC-DEL-GST , Kusum Enterprises Pvt.Ltd. - 2019-TIOL-1509-HC-DEL-GST petitioner's request merits consideration - Writ Petition is disposed of directing the respondents to either open the Portal to enable the petitioner to again file the Form GST TRAN-1 electronically or in the alternative accept the Form GST TRAN-1 presented manually, on or before 31.08.2019 - thereafter the petitioner's claim shall be processed in accordance with law: High Court [para 10 to 12]

- Petition disposed of: ANDHRA PRADESH HIGH COURT

2019-TIOL-2339-HC-AHM-GST

Shree Ji Traders Vs UoI

GST - Petitioner has challenged the order of detention passed by the third respondent under section 129(1) as well as the show-cause notice dated 15.9.2019 issued by the said respondent under section 130 of the CGST Act - there was a change in the conveyance and in that change, the goods were shifted from one conveyance to the other, but the invoice for the same was inadvertently and erroneously left at the travel agency's office at Nathdwara where the conveyances were changed - As the driver of the conveyance was not carrying the invoice for the said goods, the 2nd respondent detained the conveyance and confiscated the goods and recorded the statement of the driver of the conveyance in Form GST MOV-01 on 14.9.2019 - On the same day, physical verification, inspection of the conveyance of goods and documents was made and the second respondent issued Form GST MOV-02 - the next day the respondent passed an order of detention under section 129(1) of the CGST Act and simultaneously issued show-cause notice under section 130 of the CGST Act determining tax, penalty and fine at Rs.3,88,234/- - petitioner informed the second respondent that as the value of the goods was less than Rs.50,000/-, e-way bill was not required to be generated and the invoice for the said goods was inadvertently and erroneously left at the travel agency's office - Since despite the fact that the petitioner has shown willingness to pay tax on the invoice raised and penalty under section 129 of the CGST Act and the respondent had not released the same, the petitioner has filed the present petition.

Held: Having regard to the fact that the proceedings under section 130 of the CGST Act are still pending before the second respondent, court is of the view that interest of justice would be served if the second respondent is directed to forthwith release the goods as well as the conveyance upon the petitioner paying the tax and penalty amounting to Rs.51,084/- under protest which shall be subject to the final outcome of the proceedings under section 130 of the CGST Act without prejudice to the right of the petitioner to challenge the same, in case the same is adverse to the petitioner - petition is partly allowed - upon the petitioner depositing the amount, the second respondent to release the conveyance as well as the goods: High Court [para 10, 12]

- Petition partly allowed: GUJARAT HIGH COURT

2019-TIOL-2338-HC-AHM-GST

SS Enterprises Vs UoI

GST - Petitioner has challenged the order of detention passed by the third respondent under section 129(1) as well as the show-cause notice dated 15.9.2019 issued by the said respondent under section 130 of the CGST Act - While changing the conveyance and shifting the goods to two different conveyances, inadvertently a photocopy of the e-way bill and invoice was not given to the driver of the mini cargo in which 4 parcels were shifted - As the driver of the conveyance was not carrying the invoice and e-way bill for the goods of the petitioner, the second respondent detained the conveyance and seized the goods and recorded the statement of the driver of the conveyance on 14.9.2019 - On the next day i.e. on 15.9.2019, the third respondent passed an order of detention under section 129(1) of the CGST Act and simultaneously issued show-cause notice under section 130 thereof determining tax, penalty and fine amounting to Rs.3,88,234/- - petitioner gave its reply by letter dated 17.9.2019 and also indicated willingness to pay tax and penalty as leviable under sub-section (c) of section 129 of the CGST Act and requested the second respondent to release the conveyance along with the goods - however, since the respondent did not release the goods and conveyance, the present petition.

Held: Having regard to the fact that the proceedings under section 130 of the CGST Act are still pending before the second respondent, court is of the view that interest of justice would be served if the second respondent is directed to forthwith release the goods as well as the conveyance upon the petitioner paying the tax and penalty amounting to Rs.39,672/- under protest which shall be subject to the final outcome of the proceedings under section 130 of the CGST Act without prejudice to the right of the petitioner to challenge the same, in case the same is adverse to the petitioner - petition is partly allowed - upon the petitioner depositing the amount, the second respondent to forthwith release the conveyance as well as the goods: High Court [para 8, 10]

- Petition partly allowed: GUJARAT HIGH COURT

2019-TIOL-2337-HC-AHM-GST

Kataria Automobiles Pvt Ltd Vs State Of Gujarat

GST - Petitioner has submitted that while admittedly, the goods in question were not accompanied by an invoice or eway bill during the course of transport, the goods are valued at less than Rs.50,000/- and hence, there was no necessity of providing an e-way bill; that the goods in question are second hand goods and hence, the value of such supply is required to be determined in terms of Rule 32 of the CGST Rules, particularly, sub-rule (5); that in the present case, the petitioner has already deposited the amount of tax and penalty, as computed under Rule 32(5) of the said Rules; that the petitioner is not a fly-by-night operator and despite the petitioner having put forward a proper explanation, the respondents have still proceeded under section 130 of the Act and initiated proceedings for confiscation of the goods.

Held: By way of ad-interim relief, the respondents are directed to release the vehicle along with the goods subject to the petitioner filing an undertaking that in case if, ultimately, it does not succeed in the proceedings, it shall deposit the balance amount payable, as may be computed by the respondent authorities, which shall be without prejudice to the right of the petitioner to challenge any adverse order that may be passed - Issue Notice, returnable on 23.10.2019: High Court [para 2]

- Ad interim relief granted: GUJARAT HIGH COURT

2019-TIOL-2336-HC-AHM-GST

Ankit Lokesh Gupta Vs State Of Gujarat

GST - Petitioner has challenged the order by which the second respondent provisionally attached the bank account maintained by the petitioner with ICICI Bank - Petitioner invited the attention of the court to the provisions of section 83 of the CGST ACt/GST Act to submit that the same do not contemplate provisional attachment in respect of the proceedings under section 71(1) of the GGST Act; that, therefore, the action of the respondent in attaching the bank account of the respondent is without any authority of law - Respondent Revenue has placed on record a copy of communication dated 27.09.2019 addressed to the Bank Manager of ICICI Bank, Gandhidham Branch and served on 30.09.2019 informing him to unfreeze the account of the petitioner which was attached on 19.09.2019; that, therefore, the grievance voiced no longer survives.

Held: While it is true that by order dated 27.09.2019, which was served upon ICICI Bank, Gandhidham on 30.09.2019, the provisional attachment towards bank account of the petitioner has been released - However, on a perusal of the order of provisional attachment of property made under section 83 of the Act, which is subject matter of challenge in the present petition, it emerges that the respondent has passed the order on the ground that proceedings have been launched against the petitioner under section 71(1) of the SGST/CGST Act - On a plain reading of section 83 of the CGST/GGST Act, it is evident that the same contemplates provisional attachment of any property including bank account belonging to a person where during the pendency of any proceedings under sections 62, 63, 64, 67, 73 and 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary to do so - In the present case, the second respondent appears to have mechanically resorted to the provisions of section 83 of the Act of provisionally attaching the bank account of the petitioner, despite, the fact that such an action could not have been taken in respect of the proceedings initiated under section 71(1) of the said Acts - While it may be true that subsequently, the officer has released the bank account of the petitioner from provisional attachment, the same does not detract from the fact that the impugned order was passed without any authority of law - no further relief is required to be granted to the petitioner, however, since the order was totally without any authority of law, the petition is disposed of with costs of Rs.10,000/- - State Government may recover the same from the officer concerned: High Court [para 6, 6.1, 6.2, 7]

- Petition disposed of: GUJARAT HIGH COURT

2019-TIOL-2335-HC-AHM-GST

Alfa Enterprise Vs State Of Gujarat

GST - Petitioner seeks a direction to the respondent authorities to forthwith withdraw bank attachment made and release of godown/office and to unblock credit.

Held: Section 83 of the CGST Act empowers provisional attachment of property, subject to pendency of the proceedings under sections 62, 63, 64, 67, 73 or 74 of the CGST Act - The same does not contemplate, and rightfully so, provisional attachment pending any proceeding u/s 83 of the Act inasmuch as, there can never be any proceeding pending u/s 83 of the CGST Act as the same only empowers the State authorities to provisionally attach the property of a taxable person, subject to the provisions of section 83 being satisfied - exercise of powers u/s 83 of the CGST Act, whereby the bank account of the petitioner has been attached is totally without any authority of law - Insofar as blocking of credit is concerned, the counsel for the Revenue is unable to point out any provision of law which empowers the respondent authorities to block the credit - as regards attachment of godown/office is concerned, the counsel for Revenue submitted that the seal would be opened - respondents are directed to forthwith withdraw the attachment of the bank account of the petitioner with the IDBI Bank, Prahladnagar Branch and to unblock the credit of Rs.6,63,51,380/- available in the electronic credit ledger forthwith - Stand over to 17th October, 2019: High Court [para 4 to 8]

- Matter posted: GUJARAT HIGH COURT

AAR CASES

2019-TIOL-309-AAR-GST

HP India Sales Pvt Ltd

GST - Supply made by applicant of desktops consisting together of CPU, monitor, keyboard and a mouse is classifiable under CTH 8471 and is taxable at @18%: AAR

- Application disposed of: AAR

2019-TIOL-308-AAR-GST

A M Abdul Rahman Rowther And Company

GST - Since the issue for which Advance Ruling is sought viz. classification of ‘Chewing Tobacco' and applicability of 1/2017-Compensation Cess (Rate) is already pending before the appropriate authority viz. Assistant Commissioner, GST & CX, application is rejected under first proviso to s.98(2) of the Act: AAR

- Application rejected: AAR

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