2019-TIOL-GST-323 Dated: Thursday, November 14, 2019

GST - High Court had held that the provision of section 17(5)(d) of the CGST Act is to be read down and the narrow restriction as imposed in reading of the provision by the Department is not required to be accepted, keeping in mind the language used in Eicher Motors Ltd. - 2002-TIOL-149-SC-CX-LB, the very purpose of the credit is to give benefit to the assessee; that if the assessee is required to pay GST on the rental income arising out of the investment on which he has paid GST, it is required to have the input credit on the GST, which is required to pay, u/s 17(5)(d) of the CGST Act - Department has filed a Special Leave Petition before the Supreme Court.

Held: Delay is condoned - Notice to be issued and reply is to be filed within three weeks - Matter to be listed on 02.12.2019: Supreme Court

GST - Petitioner seeks grant of input tax credit in terms of section 140 of CGST Act r/w CGST Rules - In terms of the erstwhile Cenvat Credit Rules, 2004, the petitioner was entitled to avail 50% of the cenvat credit of the capital goods purchased in the financial years 2015-16, 2016-17 and 2017-18 in the subsequent financial years - Post the shift to the GST regime, the petitioner was entitled to balance credit to the extent of 50% in terms of sub-section (2) of section 140 of the CGST Act - The amount of credit available to the petitioner with respect to capital goods was Rs.5,70,328/- - petitioner while filing FORM GST TRAN-1 provided details of balance credit amounting to Rs.83,99,136/- under ER-1/ER-2 returns under column 5 of Table 5a and details of unutilized credit of capital goods amounting to Rs.5,70,328/- and central excise duty on inputs and service tax on input services totally amounting to Rs.2,93,727/- in respect of which the supplier has paid duty/tax under the erstwhile laws in column 6 of Table 5a - total amount of Rs.8,64,055/- mentioned in column 6 were granted to the petitioner as transitional credit on 23rd December, 2017 in its electronic credit ledger, however, the amount mentioned in column 5 of Table 5a was not granted as transitional credit to the petitioner and accordingly the petitioner was denied the credit of Rs.83,99,136/- as eligible credit - It is the case of the petitioner that as the time period to fill details in FORM GST-TRAN-1 had elapsed, the petitioner was not able to amend the form for which the eligible benefit of input tax credit was denied to it - petitioner submitted its issue to the authorities of the first respondent and also placed this issue of filing TRAN-1 form on goods and services tax portal on 4th July, 2018 - grievance status as reflected on 7th August, 2018 is "Resolution under progress" - The petitioner, however, did not receive any response from the authorities of the first and second respondents - Being aggrieved by the non-redressal of its grievance due to which the legitimate input tax credit benefit cannot be availed by it, the petitioner has filed the present petition seeking the reliefs noted herein above.

Held: It is an admitted position that the petitioner was entitled to credit of Rs.83,99,136/- in addition to credit of Rs.8,64,055/- (which came to be allowed as it was correctly mentioned) and the only reason for denying credit of such a huge amount of Rs.83,99,136/- is that the time limit for filing a revised TRAN-1 form has elapsed on 27th December, 2017 - It may be pertinent to note that the last date of filing the FORM GST TRAN-1 was 27th December, 2017, which was also the last date for filing a revised FORM GST TRAN-1 - In the present case, the petitioner filed the FORM GST TRAN-1 on 23rd December, 2017 and by the time it noticed the inadvertent error in filing the form, the last date for filing revised FORM GST TRAN-1 had elapsed - The stand of the respondents is that the last date for filing revised FORM GST TRAN-1 having elapsed, the petitioner is not entitled to transitional credit of such amount - it is not as if the petitioner has not filed FORM GST TRAN-1 within the time provided by the respondents under the rules - The petitioner had filed the form, but on account of not properly understanding the nature of the columns provided in the form, due to inadvertent error, did not mention the details of Rs.83,99,136/- in column 6 of Table 5a and instead uploaded the details in column 5 of Table 5a in FORM GST TRAN-1 - substantive right of the petitioner to claim transitional credit of such amount is sought to be denied on the ground that the time limit for filing revised FORM GST TRAN-1 has elapsed - as held by the Delhi High Court in M/s Blue Bird Pure Pvt. Ltd. vs. Union of India ( 2019-TIOL-1564-HC-DEL-GST ), the respondents ought to have provided in the system itself a facility for rectification of such errors which are clearly bona fide - Besides, although the system provided for revision of a return, the deadline for making the revision coincided with the last date for filing the return, that is, 27th December, 2017, Thus, such facility was rendered impractical and meaningless - retention of the amount of Rs.83,99,136/- by the respondents which the petitioner is otherwise entitled to get by way of transitional credit would be directly hit by article 265 of the Constitution of India which provides that no tax shall be levied or collected except by authority of law - The respondents have no legal authority to retain the amount of credit to which the petitioner is duly entitled and retention of the same is violative of article 265 of the Constitution of India, therefore, when the petitioner is entitled to credit of Rs.83,99,136/- and non grant of the same is bad in law - petition, therefore, succeeds and is accordingly, allowed - respondents are directed to either open the online portal so as to enable the petitioner to again file the rectified FORM GST TRAN-1 electronically or accept the manually filed FORM GST TRAN-1 with corrections on or before 30th November, 2019: High Court [para 21 to 27]

GST - It is evident that the person in-charge of the conveyance carrying the goods in question had in his possession, the invoice as well as the e-way bill in respect thereof, and both such documents were produced before the proper officer when the conveyance in question came to be intercepted - It is not the case of the respondents that any discrepancy was found in the aforesaid two documents - Under the circumstances, in the light of the instructions contained in Circular dated 13.4.2018 issued by the Board, it was incumbent upon the second respondent to issue a release form in FORM GST MOV-05 and allow the conveyance to move further - However, the conveyance in question has been detained on the ground of discrepancy in transport certificate which is not a requirement prescribed under the statute - Under the circumstances, the second respondent was not justified in passing the order of detention under section 129(1) of the CGST Act - impugned orders of detention passed by the second respondent under section 129(1) of the CGST Act and other connected statutes as well as the notices issued under section 129(3) of the CGST Act and other connected statutes cannot be sustained - Petition allowed: High Court [para 28 to 30]

GST - FORM GST REG-14 is the form prescribed under rule 19(1) of the CGST Rules and provides the format for application for amendment in registration details - Change in specification of goods is a non-core field and, therefore, does not require the approval of the proper officer while making amendment in the registration form - The respondents in the affidavit-in-reply rely upon the fact that on 8.4.2019, the petitioner, by way of an amendment, added the commodity which was being transported, to submit that the disclosure of the commodity in the registration was mandatory on the ground that had it not been mandatory, the petitioner was not required to carry out the amendment - Such submission on the part of the respondents who are responsible officers of the State Government is quite perturbing, inasmuch as, the officers under the Act are required to make submissions based upon the legal provisions and not on the conduct of the party - Merely because the petitioner subsequently amended the registration cannot be a ground to submit that reflecting such goods in the registration was mandatory, without referring to the statutory provision which mandates such requirement: High Court [para 26, 27]

GST - Fraudulent availment of Input Tax Credit of GST under the cover of fake invoices - Presence of a lawyer cannot be allowed at the time of examination of a person under the CGST Act - So far as apprehension of petitioner that he may be physically assaulted or manhandled is concerned, Court is of the opinion that it is a well settled law that no inquiry/ investigating officer has a right to use any method which is not approved by law to extract information from a witness/ suspect during examination and in case it is so done, no one can be allowed to break the law with impunity and has to face the consequences of his action - order dated 20.09.2019 which is against the judgment passed by Supreme Court in Pool Pandi vs. Superintendent, Central Excise and Ors. = 2002-TIOL-625-SC-CX-LB, therefore, stands modified and it is clarified that presence of a lawyer cannot be allowed to the petitioner at the time of questioning or examination by the officers of the respondent - Application disposed of: High Court [para 21, 22]

GST - Petitioner is seeking a direction to the first respondent to dispose of a representation dated 18.06.2019 sent by the writ petitioner; that in view of some proceedings under the CGST Act, 2017 including criminal prosecution, the Savings Bank account of the writ petitioner has been provisionally attached and which attachment, the petitioner requests be removed/raised; that the said representation has not evoked any response and for which reason, the present Writ Petition.

Held: Writ petition is disposed of with a direction to the first respondent to dispose of writ petitioner's representation dated 18.06.2019 (received by the first respondent on 27.06.2019) on its own merits and in accordance with law as expeditiously as possible and in any event within six weeks - Petition disposed of: High Court [para 7]

GST - Petitioner submits that respondent-authorities are obligated to permit the corrections in the corresponding clauses of GSTR-1 & GSTR-3B - Assistant Commissioner has produced a letter indicating that the incorrect details furnished by the petitioner-assessee in their GSTR-1 and GSTR-3B for the periods during the assessment year 2017-18, are not covered under the category of IT Glitches, so as to permit the rectification.

Held: Before any direction is issued for reprograming GST Portal, Bench would like to have the official response of the respondents for which the AC, CCO, GST Zone is directed to verify the corrected claims as projected in the manual annual returns in juxtaposition with the inadvertent mistake already made in the GSTR-1 and GSTR-3B for the months concerned in the assessment year 2017-18 and submit a report in the shape of an affidavit - Matter adjourned to 10.12.2019: High Court

GST - Petitioner has made a prayer to waive or reduce one of the conditions of bail to deposit Rs.1 Crore within three months from the date of release on bail and it is also prayed in the petition to set aside the order dated 26.07.2019 passed by Sessions Judge, Meerut in Criminal Revision No. 103219 of 2019 dismissing the revision - Petitoner contends that he is innocent and has been falsely implicated in the present case due to ulterior motive; that department had not issued any show cause notice to the petitioner in respect of alleged evasion of tax of Rs. 94 Crores; that the petitioner has been released on bail by the Court concerned on a condition that petitioner will deposit Rs.1 Crore towards Goods and Services Tax within three months from the date of release on bail in the Government Treasury; that the condition is harsh and illegal and, therefore, he requests that the High Court reduce the amount required to be deposited in pursuance of the bail order.

Held: Considering the submissions made by both sides, Court is of the opinion that no interference is required in the impugned orders passed by the Courts below - Petition dismissed: High Court [para 5, 6]

GST - Petitioner seeks grant of regular bail in arrest case - allegation is that the petitioner is part of fraud by virtue of which fake sale invoices worth Rs. 128 Crores were generated without supply of any material; that the petitioner fraudulently availed and utilized input tax credit (ITC) of more than Rs. 19.50 Crores on the basis of fake invoices without supplying the goods worth Rs. 128 Crores; that the petitioner has recorded his statement and confessed that he fraudulently availed and utilized of ITC Rs. 19.50 Crores against fake invoices of Rs. 128 Crores approximiately.

Held: Court is of the considered view that though the petitioner is in custody since 4.7.2018, but taking into account the fact that the petitioner is involved in a case involving fraud of Rs. 19.50 Crores and the alleged offence is an economic offence which requires to be dealt with seriously and mere long custody would not be a ground for releasing him on bail - Apex court has observed that bail should not be granted in cases of economic offences merely on the ground that the accused was in the jail for a period of one year - no merit in the present petition hence the same stands dismissed: High Court [para 5, 7, 9]

GST - The present writ petition challenged the constitutional validity of Sections 17(5)(c) and 17(5)(d) of the CGST Act and the Gujarat GST Act.

Held - Notice be issued to the parties, returnable on 13.11.2019 - Notice be issued to the Attorney General as well as to the State's Advocate General: HC

GST - Petitioner's grievance is that their bank accounts have been frozen by communications issued by Commissioner of Central Tax, Delhi West and DGGI, Bhopal Zonal unit, however, no order in terms of s.83 of the Act read with rule 159 of the Rules has been served upon the petitioner.

Held: Respondents are directed to produce the original record with regard to issuance of the communications referred – Matter listed on 20.11.2019: High Court

GST - Petitioner has filed the present petition seeking relief in the matter of GST TRAN-1 inter alia declaring that time limit specified in rule 117 (1) and (1A) as being ultra vires s.140(3) of the CGST Act as also being arbitrary and unreasonable and violative of article 14, 19 and 265 of the Constitution of India; that the due date contemplated under the Rule 117 of the CGST Rules to claim the transitional credit within a specified period of time as being procedural in nature and thus merely directory and not mandatory.

Held: Nature of reliefs sought in the present petition and the facts disclosed is fully covered by the decision of this Court in M/s Blue Bird Pure Pvt. Ltd decided on 22.07.2019 2019-TIOL-1564-HC-DEL-GST , wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified TRAN-1 electronically or accept the same manually - factual position in the present case is not any different and, therefore, Bench allows the present petition and directs the respondents to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 20.11.2019 - Respondents are directed to process the petitioners claim in accordance with law once the GST Form TRAN-1 is filed: High Court [para 9 to 11]

GST - The petitioner is a Registered Dealer under provisions of ' Central Goods and Services Tax Act, 2017 ' - There was a delay on the part of petitioner in filing Returns for the month of June 2017 and these returns are referred to as 'ER-1 Returns' - It is the case of petitioner that he has remitted penalty of Rs.20,000/-, however, this Court does not express any opinion on merits and it refrains from expressing any opinion on merits of the matter in the light of the order that is now being passed - The impugned communication, which has been called in question, is a letter dated 21.12.2018 - Adverting to the impugned communication, Revenue submits that this is only a communication and as writ petitioner has now raised a dispute and as the writ petitioner now says that he has submissions to be made on merits, the respondent would issue a SCN, more particularly, a notice, within the meaning of Section 73 of CGST Act - The petitioner draws the attention of this Court to paragraph-3 of impugned communication - In the light of the same, it is imperative that the aforesaid paragraph-3 of the impugned communication is kept in abeyance till the aforesaid 'SCN' attains finality as implementation of paragraph-3 will render the entire exercise post SCN infructuous - Therefore, paragraph-3 of impugned communication shall be kept in abeyance till the SCN (to be issued) attains finality: HC

GST - The challenge in writ petition was against the order passed by 2nd respondent, under Section 129(3) of CGST Act, 2017 - On an earlier occasion, the interception of movement of goods transported and the consequential issuance of detention notice, were challenged in a writ petition filed before this Court - The detention was on the basis of an alleged irregularity that the appellant had failed to generate the eway bill, as required under Rule 138 of CGST Rules - The Contention raised is that, generation of e-way bill was not required with respect to transport in question, in view of sub-rule (14)(b) of Rule 138 - It was argued that the goods in question was transported not by means of a motorised conveyance - The consignment was by way of "Branch Transfer" (stock transfer) - Further, it was found that the new vehicle which was transported had carried with it a temporary registration number and that the appellant could have used the said number for filing details while generating the e-way bill - The only question to be considered is whether the relegation made by single Judge to avail the alternative remedy, was justified or not - The liberty reserved by single Judge for availing the statutory remedy, is not in any way illegal, erroneous or improper: HC

2019-TIOL-451-AAR-GST

Soorya Narayan Agency

Supply of goods through PDS is not exempt under Notification No. 2/2017-CTR - Activities or transactions of the Applicant are not included in Schedule lll either - Applicant is, therefore, liable to pay GST at the applicable rate on his supplies of goods through PDS: AAR

- Application disposed of: AAR

2019-TIOL-450-AAR-GST

Shewratan Company Pvt Ltd

GST - Applicant's supply of stores to foreign going vessels, as defined under section 2(21) of the Customs Act, 1962 Act, is not export or zero-rated supply, unless it is marked specifically for a location outside lndia - Applicant is, therefore, liable to pay tax on such supplies under the GST Act or the IGST Act, as the case may be: AAR

However, Applicant's supplies to the foreign going vessels shall be treated neither as a supply of goods nor services in terms of paragraph 8(a) of Schedule lll under section 7(2)(a) of the GST Act if such stores are warehoused goods supplied to the recipient before clearance for home consumption: AAR

The advance ruling in this matter was pronounced on 21/10/2019. The order, however, did not include discussion about the status under the GST Act of supplies of warehoused goods if supplied to the recipient before clearance for home consumption. It is felt that such a discussion is necessary in the context of the ruling. The order, to that extent, needs to be rectified. This Authority, therefore, proceeds to amend the said order on its own accord under section 102 of the GST Act. As the rectification is not going to enhance the tax liability or reducing the amount of admissible input tax credit from the original order, the requirement under proviso to section 102 of the GST Act does not apply. The amended order as it stands after rectification is provided below. The amended portion is included under the third bracket.

- Application disposed of: AAR

2019-TIOL-449-AAR-GST

Sadguru Seva Paridhan Pvt Ltd

GST - Fusible interlining cloth is classifiable under Heading 5903 in Chapter 59 of the First Schedule of the Customs Tariff Act, 1975: AAR

- Application disposed of: AAR

2019-TIOL-448-AAR-GST

GST - Promotion of research in the field of life sciences, physical sciences, environmental sciences etc. and publishing of online research journal on one or more of above mentioned fields are not Charitable activities contemplated in the exemption entry no.1 of 12/2017-CTR since they do not fall under Care or Counselling; or spreading public awareness; or advancement of religion, spirituality or yoga; or advancement of educational programmes or skill development: AAR

GST - Tender document awarded to the applicant by MP Power Generating Company Ltd. for balance general, civil and related electrical and mechanical works package for 2 x 660MW Shree Singaji TPC Stage II is not a consolidated contract and each supply under the said contract shall be chargeable to tax individually depending upon the individual classification of such supplies and rate of tax applicable at the time of supply: AAR

GST - Services provided by applicant for transportation of students and staff of contractee's institute under contract carriage by non-air conditioned buses is exempt as per clause (b) of Sr. no. 15 of 12/2017-CTR; however, exemption will be valid only till the time the contract carriage fulfils the conditions laid down in the said notification: AAR

GST - Services of Coal beneficiation and transportation are two different supplies and attract GST @18% (SAC 9997) and @5% (under reverse charge if supplier does not avail ITC) or @12% (paid by transporter) under SAC 9965 respectively: AAR

GST - Classification sought of flavoured milk - Since the issue is already pending before another authority when the application was made before AAR, application is rejected as not maintainable u/s 98(2) of the CGST Act, 2017 : AAR

GST - Utility vehicles, predominantly designed for transportation of goods and conforming to the norms of Category 'N' vehicles as per Automotive Industry Standards AIS 053 merit classification under Chapter 8704 of GST Tariff and shall be chargeable at the rate prevailing at the time of supply: AAR

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - Applicant has alleged profiteering by respondent in respect of purchase of flat in his project ‘One Park Avenue' inasmuch as it is alleged that the respondent had increased the price of the flat after introduction of GST and had not passed on the benefit of ITC availed by him by way of commensurate reduction in the price of the said flat - respondent has inter alia submitted that they had mutually revised the agreements executed with the home buyers by offering them discount @ 2 - 3 % on account of GST benefit, post-GST implementation and the same was offered to the applicant also and in which support they submitted documents, however, the applicant had not accepted the same - furthermore, the applicant had failed to pay intallments as per the buyer's agreement during the pre-GST period and had also requested the respondent to cancel his booking; that in view of the applicant's cancellation request, a further discount on account of GST @3% was offered but again the same was not accepted; that the RERA had by its order dated 17.04.2018 directed the applicant to execute the agreement for sale, as per section 13 of RERA, within thirty days but without complying with the order, the applicant had complained to the GST/Anti-Profiteering authorities in October 2018; that even after filing the complaint the applicant had requested for cancellation of his booking and which was cancelled and intimated on 24.11.2018; respondent further submitted that they had already passed input/GST credit by way of additional discount of 2-3% of the original consideration aggregating to a total amount of Rs.1,11,61,090/- and which was accepted by the home buyers - DGAP in its report submitted that as the applicant was no more a customer of the respondent hence his allegation was incorrect and the same could not be considered towards compliance of provisions of s.171 of the Act - DGAP has in its report further observed that the ITC as a percentage of the total turnover of the respondent during the pre-GST period (April 2016 to June 2017) was 2.11% and during the post-GST period (July 2017 to September 2018) it was 8.10% and thus it was clear that the respondent had benefited from additional ITC to the tune of 5.99% [8.10% minus 2.11%] of the turnover; that by not reducing the pre-GST base prices by 5.99% on account of additional benefit of ITC and charging GST @12% on such higher base prices, respondent had contravened the provisions of the section 171 of the Act, however, as no demand had been raised on the instant applicant in the post GST period, no benefit of additional ITC was required to be passed on to him.

Held: Contention of the respondent that he had offered GST discount to the applicant is not correct as the same was offered due to increase in the price of the flat which amounted to normal business discount and by no stretch of imagination it can be held to have been passed on account of benefit of ITC - further, claim of respondent that he has given ad hoc 2% discount as it was difficult to compute the benefit initially is also not correct as the same has been given to offset the cost which he has increased due to increase in the area of the flats; that he has offered 3% discount to only those flat buyers who had declined to accept his offer of 2% - passing of discounts as per the convenience of the respondent is without any rationale and thus is arbitrary and amounts to violation of the provisions of s.171 of the Act - discounts given by respondent were nothing but commercial discounts offered to avoid cancellations and have no relation whatsoever with passing on of the benefit of additional ITC - respondent has agreed with the quantum of profiteered amount of Rs.1,27,84,694/- computed by the DGAP at the ratio of 5.99% of the turnover - since the respondent has himself admitted the correctness of the profiteered amount it is held that the respondent has resorted to profiteering in violation of the provisions of s.171 of the Act - as the buyers are identifiable as per the documents on record, respondent is directed to pass on the profiteered amount along with interest @18% to the flat buyers within a period of three months - since the relationship of the recipient and supplier stands terminated between the applicant and the respondent w.e.f 24.11.2018, he is not entitled to the benefit of additional ITC as per the provisions of s.171 of the Act - applicant has further not paid the amount which he was required to pay in the pre and post GST period as per the terms of his allotment to become eligible for passing on of the benefit of ITC and, therefore, he is not entitled to the above benefit - for the offence committed, respondent is liable for imposition of penalty and SCN in this regard is to be issued - Commissioner of CGST/SGST, Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered is passed on to all the eligible buyers - compliance report to be submitted within four months: NAA

GST - Anti-Profiteering - S.171 of the CGST Act, 2017 - Applicant alleges that the respondent had resorted to profiteering in respect of supply of book titled 'Ragas in Hindustani Music: Conceptual Aspects (without cassette)' inasmuch as the respondent had maintained the same selling price for the said book despite reduction in GST rate from 12% to Nil vide notification 25/2018-CTR dated 31.12.2018 and thus not passed on the benefit of reduction in the GST rate to recipients by way of commensurate reduction in price of the book - DGAP in its report stated that vide notification 02/2017-CTR the Central government had exempted the GST on 'Printed books, including Braille books' whereas vide notification 25/2018-CTR, the GST rate on 'Music, printed or in manuscript, whether or not bound or illustrated' falling under HSN code 4905 had been reduced from 12% to Nil; that the product under consideration was a printed book and not a music book and the same was also apparent from the invoices submitted by the respondent wherein the books were classified under HSN code 4901; that the referred book 'Ragas in Hindustani Music: Conceptual Aspects (without cassette)' is falling under the category of 'Printed books, including Braille books' and was already exempted from GST w.e.f 01.07.2017 and there was no reduction in the GST rate on the said product w.e.f 01.01.2019 and hence the allegation of profiteering was completely misplaced.

Held: Authority observes that the book 'Ragas in Hindustani Music: Conceptual Aspects (without cassette)' deals with various conceptual aspects and various affinities in Ragas and analysis thereof; that the invoices dated 24.09.2018 and 09.01.2019 issued by the respondent in respect of supply of the said book to his buyers does not contain the HSN code, which is a requirement under the provisions of s.31 of the Act; that in respect of both the referred invoices, the respondent had not charged any GST from his buyers and since no GST was charged by the respondent before and after the relevant date i.e 01.01.2019, question of profiteering does not arise - nonetheless, notwithstanding the findings of the DGAP on the classification of the said book, the correct classification of the said book needs to be carefully examined by the jurisdictional Commissioner for further action - as the allegation levelled by the applicant is not sustainable, the application is dismissed: NAA

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering by respondent in respect of supply of flats in the Expressway towers project of respondent in Gurugram inasmuch as it is the contention of the applicant that the respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the prices post implementation of GST w.e.f 01.07.2017 and had charged GST on the full amount of instalments - DGAP has inter alia submitted that the contention of the respondent that he would pass on the benefit of ITC to the flat buyers when the last instalment would be demanded post completion of construction and final calculation of the cost of the project might be correct but profiteering, if any, had to be determined at a given point of time in terms of rule 129(6) of the CGST Rules, 2017 - therefore, ITC available to the respondent and the amount received by him from the applicants and other recipients post implementation of GST had to be taken into account for determining the benefit of ITC that was required to be passed on to the recipients - DGAP has also submitted that the ITC pertaining to the unsold units was outside the scope of this investigation and the respondent was required to recalibrate the selling price of such units to be sold to the prospective buyers by considering the net benefit of additional ITC available to him post-GST; further that the respondent had got permission to start construction for the project on 05.02.2018 i.e. post implementation of GST and hence no ITC was available to the respondent in the pre-GST era - DGAP has reported that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 0% and during the post-GST period (July 2017 to August 2018) it was 3.73% and, therefore, during the post-GST period, the respondent had benefited from additional ITC to the tune of 3.73% of the turnover and should have accordingly resulted in commensurate reduction in the base price as well as cum-tax price, therefore, in terms of s.171 of the Act, 2017 the benefit of additional ITC that had accrued to the respondent was required to be passed to the recipients; that the profiteered amount is Rs.8.13.405/- including 12% GST on the base profiteered amount of Rs.7,26,255/- for the period 01.07.2017 to 24.01.2018 and the profiteered amount as Rs.60,26,165/- including 8% GST on the base profiteered amount of Rs.55,79,782/- for the period from 25.01.2018 to 31.08.2018; total profiteered amount is Rs.68,39,570/- which included GST (@12%, @8%) on the base profiteered amount of Rs.63,06,036/-; that since the applicant no. 1 and 4 had not paid any amount in the post GST period they are not entitled for any benefit of increased ITC availability, however, in case of applicant no.2 & 3, the amount profiteered is Rs.25,394/- (including GST); that the computation of profiteering was in respect of only 493 flats only.

Held: Respondent has accepted the findings of the DGAP report and passed on the ITC benefit to his recipients through credit notes - all such refunds/adjustments to be made incorporating the amount of interest @18% from the date of receipt of amount by respondent from buyers till the date the due amount is adjusted/refunded within a period of three months - SCN is to be issued to the respondent for imposition of penalty u/s 171(3A) of the Act read with rule 133(3)(d) of the Rules - Authority directs the Commissioner of CGST/SGST to monitor the implementation of the order under the supervision of the DGAP by ensuring that the profiteered amount is passed on to the buyers - Since the present investigation is only up to 31.08.2018, any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the respondents : NAA

GST - Applicant had been granted mining lease for extracting iron ore in Odisha by the State government and accordingly is engaged in the business of mining and supply of iron ore - as consideration for the mining lease with the licence to extract iron ore from the lease area, applicant pays royalty to the State government before removal of minerals from the lease area - Applicant had sought an advance ruling on rate of GST payable by them under Reverse charge mechanism on royalty paid to Government for mining of Iron ore for the period July 2017 to December 2018 - Jt. Commissioner of Central Tax opined that in view of the statutory provisions, ruling should be issued in relation to any activity being undertaken or proposed to be undertaken in the future but not already undertaken in the past, hence, he was of the view that the present case of the applicant does not come within the ambit of provisions of s.97 of the CGST Act, 2017 - second Member i.e Additional Commissioner of State Tax took a view that the definition of ‘advance ruling' in section 95 does not restrict the scope of issuing ruling in respect of future transactions only; that it would not be proper not to issue any ruling on the applicable rate of GST on the mining lease service availed by applicant; that the supply being of the nature of conferring the right on the lessee to mine and appropriate the minerals, the rate prescribed for leasing of goods cannot be applied in this case and the most appropriate rate shall be the default rate of 9% CGST and 9% OGST - in view of the difference in opinion, the matter came to be referred to the Appellate Authority as mandated by s.98(5) of the CGST Act, 2017.

Held: On a conjoint reading of the amending notification 27/2018-CTR dated 31.12.2018, Minutes/agenda/proposal/discussion of the GST Council, Appellate Authority is of the view that amendments have been carried out vide the aforesaid notification to clarify the legislative intent as well as to resolve unintended interpretations - it is well settled that legislative intent cannot be defeated by adopting an interpretation which is clearly against such interpretation - amendment of Entry Sl. no. 17(viii) was approved merely to clarify the GST rate applicable to the right to use Intellectual Property and similar products other than IPR which are covered under Group 99733 - There was no such proposal either to enhance or reduce the rate of tax - impugned service received by applicant is appropriately covered under description ‘Licensing services for the right to use minerals including its exploration and evaluation' which is classifiable under SAC 997337 under Group 99733 - lease by Government not being a lease of any goods, the conditional rate of tax applicable to sale of like goods cannot be imported for prescribing the rate of GST applicable to leasing of mining area - Licensing services for the right to use minerals including its exploration and evaluation received by applicant is, therefore, taxable @18% GST during July 2017 to December 2018 - Reference made by the Authority for Advance Ruling on account of difference in opinion between the members is answered accordingly: AAAR

GST - For the purpose of Cess @22% under Sr. no. 52B of Cess Rate Notification 1/2017, ground clearance is to be considered in laden condition only - Vehicle whose ground clearance in unladen condition is more than 170 mm but below 170 mm in laden condition will not get covered under Sr. no. 52B of Cess Rate Notification - Order pronounced by the Advance Ruling Authority to the said extent is set aside: AAAR

GST - For any supply of services to be considered as export, one has to examine the place of supply of services as per the conditions prescribed in s.2(6) of the IGST Act - in view of provisions of s.97(2) of the CGST Act, 2017, question relating to 'place of supply' is outside the purview of the Authority - Advance Ruling Authority have passed a ruling exceeding its jurisdiction, hence the order is set aside - questions asked by the appellant are not covered under the scope and jurisdiction of the Authority for Advance Ruling, hence no order could have been passed in view of s.97(2) of the CGST Act, 2017: AAAR

GST - Membership fee collected by respondent from its members will not be construed as consideration for levy of GST; rather it is the registration fee collected for organising the skill oriented workshops which would be considered as consideration and accordingly will be liable to GST - Lions Club of Poona is liable to take registration for discharging their GST liability - Paragraph 19 of AAAR order dated 23.04.2019 amended accordingly: AAAR

GST - Appellant is an investment advisory firm and had sought a confirmation of its interpretation of the law with regard to applicability of GST on its services which are setting up of the fund, fund raising, pooling of investments into AIF (Alternate Investment Fund) and managing the investments pooled in the AIF - for these services the appellant receive Advisory and Management Fees from domestic and overseas contributors - appellant had sought to know as to whether GST is applicable on the said fees received in Indian currency from domestic contributors located in India and the fees received in foreign currency from overseas contributors located outside India - AAR held that since the AIF is liable to make payment, they are recipient of service as per s.2(93) of the CGST Act and the place of supply is to be determined by s.12(12) of the IGST Act for both Domestic and overseas contributors which would be taxable @18% - Appellant is aggrieved with this order and submits that the AAR had conveniently assumed the ‘person liable to make payment' to be the AIF which is contrary to the factual position in the agreements; that liability to make payment is with the contributors and the Fund has no obligation to make the payment at all; that the service provided by the appellant to overseas contributors (recipient of service as per s.2(93) of the CGST Act) should be held as export of service as per s.2(6) of the IGST Act and to be treated as zero-rate supply as per s.16.

Held: To decide the taxability of the above said Investment Advisory and Management fees, it is imperative to determine the place of supply in respect of the impugned overseas transactions - on perusal of s.97(2) of the CGST Act it is adequately clear that question on determination of ‘place of supply' has been excluded - therefore, Authority cannot pass any ruling in respect of the question which involves determination of place of supply of goods or services or both - question posed by appellant being beyond the jurisdiction of Advance ruling, cannot be decided by the Authority - AAR should have refrained from passing any ruling - as AAR has passed the ruling by transcending its jurisdiction, the order is set aside: AAAR

GST - Applicant company is engaged in the re-gasification of LNG and delivering the same to its customers - The applicant is setting up a LNG re-gasification project, whose development consists of two legs, namely - i) setting up of infrastructure facility, i.e., jetty, on-shore receiving facility close to the jetty for enabling Floating Storage Re-gasification Unit (FSRU) to regasify the LNG; and ii) connecting the terminal with the cross-country gas pipeline to enable supply of re-gasified LNG to the customer - The applicant approached the AAR seeking clarification on eligibility for ITC on Tie-in pipeline used to supply LNG to the ulitmate customers - AAR observed that there are some ships which happen to be categorised as factories in the commercial world and, therefore, it was incorrect to infer that the FSRU is not a factory; that the pipeline could not exist in a vacuum without a factory; that the term pipelines outside the factory signifies that the pipeline is to transport some product from the factory to the end user; that the LNG re-gasified in the ship is transported through the pipeline, which is outside the factory ship, therefore, the pipeline in the present case classifies as' pipeline laid outside the factory'; that the restriction on availment of ITC u/s 17(5)(c) & 17(5)(d) is applicable herein - Appeal to AAAR.

Held: It is amply clear that the FSRU where the re-gasification of LNG is carried out for delivery to the National Grid through the tie-in pipeline proposed to be connecting the FSRU to the National Grid can be rightly considered as factory - Once it has been established that the premises of FSRU can be justly considered as factory premises, then there is no doubt that the tie-in pipeline to be laid by the appellant which will join the FSRU to the National Grid will be considered as‘pipeline laid outside the factory premises' and accordingly attract the applicability of the exclusion clause i.e. clause (iii) of the Explanation to S.17(5)(c) and s.17(5)(d) of the CGST Act, 2017 - consequently, the tie-in pipeline under question will not be construed as a plant and machinery and hence the appellant will not be entitled to avail ITC of GST paid on goods and services used for construction of Tie-in pipelines, from the FSRU to the National Grid: AAAR

GST - Respondent company is engaged in re-sale of ice creams in wholesale as well as retail sale packages - It purchases goods from the sole manufacturer - The applicant deals exclusively in goods manufactured by the franchisor - It sells the ice cream without any further processing, alteration, structural or chemical change - The respondent approached the AAR seeking to know if ice cream supplied from retail outlets is supply of goods or supply of service or is composite supply - Whether if not being composite supply, the same is supply of service as per Entry 6(b) to Schedule II to CGST Act & attracting GST @ 2.5% as per Notfn No 11/2017-CTR as amended - Also, if found to be composite supply, whether it is treated as supply of service - Also, if held to be supply of service, then if it is mandatory for applicant to collect & deposit GST @ 2.5% - the Authority had held that supply of ice cream by the applicant from its retail outlet is treatable as supply of goods and, therefore, the remaining issues were not answered - Assistant Commissioner of SGST, Pune Division is aggrieved by this order and has filed appeal before the Appellate Authority - It is submitted that the respondent had suppressed certain vital facts in the application made before the AAR about the investigations that had been initiated by the DGGI against M/s Kamaths Ourtimes Ice Creams Pvt. Ltd. [ KOTI, in short, (franchisor)] and its various franchisees who deal in Naturals brand ice cream under the terms and conditions of an identical franchisee agreement; that, therefore, the ruling obtained from AAR by keeping the authority in the dark is not legal and correct.

Held: Appellate authority is satisfied that there was sufficient cause for late filing of appeal and, therefore, the delay in filing appeal by Revenue is condoned - As per s.104 of the CGST Act, 2017, powers have been given to the Appellate authority to declare an order u/s 98(4) of the Act to be void ab initio in case it is obtained by fraud or suppression of material facts or misrepresentation of facts - jurisdictional officer might have taken a stand and which was confirmed by the Advance Ruling Authority and also agreeable to the applicant-respondent, however, later on it was made known to the jurisdictional officer that the proceedings were pending on the same issue against M/s KOTI and later on against the applicant-respondent himself - This amounts to deliberately keeping away knowledge from the jurisdictional officer and if he was made aware of the fact by the applicant-respondent that investigations were pending on the same issue against the franchisee and the applicant-respondent was also aware of the proceedings, then the jurisdictional officer would have surely brought it to the notice of the ARA - jurisdictional officer, therefore, has a valid reason to be aggrieved by the order of the ARA and there is no incongruity in him filing an appeal before the Appellate authority - there is also no reason to assume that he was compelled by the DGGI to file an appeal - Although technically proceedings were not pending against the applicant-respondent on the date of filing application before the Authority for Advance Ruling, it is clear and apparent from the deposition of Narendra Mutha, Partner of M/s Arihant Enterprises (applicant-respondent) that it was decided by M/s KOTI to file an application before the ARA on the same issue of classification of ice cream sold through the parlours which was taken up by DGGI - It cannot be called an apparent coincidence as made out by the applicant-respondent - This reflects the deliberate intent on the part of the franchisor and the franchisee to subvert the investigation proceedings and also a purposeful objective to hide facts which are critical to the AAR and the related provisions - It is trite law that when comes for justice, one should come with clean hands, but which is not the case here - It is, therefore, held that the order of the AAR is void ab-initio as it was vitiated by the process of suppression of material facts - Appeal filed by Assistant Commissioner of SGST, Pune Division is allowed by setting aside the order of AAR: AAAR

Invoice details not uploaded by suppliers - Restriction of ITC - CBIC clarifies various pertinent issues

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