HIGH COURT CASES

2019-TIOL-2701-HC-KERALA-GST

Alfa Group Vs Assistant State Tax Officer

GST - During the relevant period, certain goods belonging to the petitioner were detained in a parcel godown, on grounds that the value quoted in the invoice accompanying the goods was low, compared to the Maximum Retail Price of the goods - It was also alleged that the HSN code of the goods was incorrect - The petitioner claimed that the reasons given in the detention order did not justify detention of goods u/s 129 or u/s 130 - Hence the present writ was filed, seeking directions to release the goods.

Held - It is found that none of the reasons stated in the order justify the detention of the goods - No provision under the GST Act mandates that the goods should not be sold at prices below the MRP declared - Nothing exists in the detention order to show that on account of the alleged wrong classification of the goods, there was any difference in the tax rate adopted by the assessee - When the scheme of the GST Act is to facilitate free movement of goods after self-assessment by the assessee, the Revenue cannot resort to arbitrary and legally unwarranted detention of goods in the course of transit - Such actions erode public confidence in the tax administration system and the economy - Hence the detention order merits being quashed and the Revenue authorities concerned are directed to release the goods belonging to the petitioner - Suitable instructions may also be issued to filed formations to refrain from resorting to such unwarranted detention of goods: HC

- Writ petition disposed of: KERALA HIGH COURT

2019-TIOL-2700-HC-KERALA-GST

Amm Aquapure Systems Vs Assistant State Tax Officer

GST - During the relevant period, certain goods belonging to the petitioner-company were detained along with the vehicle transporting them - The detention was based on grounds that the e-way bill did not indicate the correct number of the vehicle - The petitioner claimed that the subsequent e-way bill showing the correct vehicle number was subsequently produced before the authorities, at the earliest.

Held - Considering that the petitioner later produced the e-way bill with the correct vehicle number, but also considering that the detention of goods was justified, due to non-compliance with provisions of Section 129 of the CGST Act, the Revenue authorities concerned are directed to release the goods and the vehicle - This is subject to the petitioner furnishing a bank guarantee to cover the duty and penalty amount: HC

- Writ petition disposed of: KERALA HIGH COURT

AAR CASES

2019-TIOL-489-AAR-GST

Venkata Rao Tirupathi

GST - Applicant has sought a ruling on an issue of applicability of interest for the intervening period in the context of payment done under one head (under Cess) instead of the other head (of CGST) with a time gap of eight months between the two payments - Such question is outside the purview of the Authority in view of s.97(2) of the Act: AAR

- Application rejected: AAR

2019-TIOL-488-AAR-GST

Vijai Electricals Ltd

GST - Works are undertaken for contractee M/s APEPDCL, a government company - As per Memorandum Of Association of APEPDCL, main objects pursued is business of procurement, supply and distribution of electricity - Contract entered by applicant is a Works Contract and falls under Sr. no. 3(ii) of 1/2017-CTR; chargeable to GST @18% and not the concessional rate of 12%: AAR

- Application disposed of: AAR

2019-TIOL-487-AAR-GST

Vikram Solar

GST - Applicant has withdrawn his application, therefore, Authority finds no reason to go into the merits of the case - Application dismissed as withdrawn and no ruling is given - fees paid stand forfeited: AAR

- Application dismissed: AAR

2019-TIOL-486-AAR-GST

Tech Mech Global Interface Pvt Ltd

GST - Applicant has sought advance ruling in respect of ‘Place of supply' issue which is outside the purview of the Authority as per section 97(2) of the Act - Application rejected: AAR

- Application rejected: AAR

2019-TIOL-485-AAR-GST

Tirumala Milk Products Pvt Ltd

GST - HS Code for flavoured milk is 2202 9930 and GST rate is 12% in terms of Entry no. 50 of Schedule II of notification 1/2017-CTR: AAR

- Application disposed of: AAR

2019-TIOL-484-AAR-GST

Southern Power Distribution Company Of Ap Ltd

GST - Services rendered apart from ‘Transmission or Distribution of Electricity' is taxable - Works executed under Deendayal Upadhyay Gram Jyoti Yojna for Rural Electrification, Integrated Power Development Scheme (IPDS) and Restructured Accelerated Power Development and Reforms Program - supplies made through contractors are not covered under 24/2017-CTR for availing concessional rate of tax of 12% but are chargeable to tax @18% - supply of services and goods made by applicant through contractors by way of construction, erection, commissioning or installation of infrastructure for extending electricity distribution network up to the tubewell of the farmer or agriculturist for agricultural use is not exempted under notification no. 12/2017-CTR, Sr. no. 10A as there is no specific mention of extending exemption to contractors of applicant: AAR

- Application disposed of: AAR

2019-TIOL-483-AAR-GST

Sealwel Corporation Pvt Ltd

GST - Contract entered is a Works Contract - Neither the contractee nor the stated works executed are 'non-commercial' in the facts and circumstances, therefore, the stated works are taxable under GST - applicant is not entitled for concessional rate of tax of 12% but is chargeable to tax @18% in terms of 3(ii) of 11/2017-CTR - whether a person is a governmental authority or governmental entity is to be decided in terms of the definition given in 31/2017-CTR: AAR

- Application disposed of: AAR

2019-TIOL-482-AAR-GST

Shirdi Sai Electricals Ltd

GST - Contractee M/s APSPDCL is engaged in electricity distribution system - Entry 10A to 12/2017-CTR does not prescribe any NIL rate for the services supplied to Electricity distribution utilities, therefore, said exemption is not applicable to the services rendered by the applicant to the contractee - since the works undertaken are classifiable under WCS, segregation or vivisection will not arise; taxable @18%: AAR

- Application disposed of: AAR

2019-TIOL-481-AAR-GST

Robo Silicon Pvt Ltd

GST - Since the applicant intends to withdraw their application, Authority finds no reason to go into merits of the case - Application disposed of: AAR

- Application disposed of: AAR

2019-TIOL-480-AAR-GST

PKR Projects And Engineers

GST - Applicant was granted road metal quarry for extraction of road metal by Dy. Director of Mines and Geology, Kakinada - applicant has to discharge his liability on the amounts paid to the mines department towards royalty paid/dead rent etc. for such mining rights - they seek classification of goods and/or services, determination of liability etc. 

Held: Applicant is receiving leasing/licensing services from the govt. of Andhra Pradesh - they are, therefore, liable to discharge tax liability under reverse charge - classification would be under heading 9973, sub heading 9973 37; activity falls under item (viii) of Sr. no. 17 of 11/2017-CTR; attracts GST @18%: AAR

- Application disposed of: AAR

2019-TIOL-479-AAR-GST

Rashtriya Ispat Nigam Ltd

GST - Liquidated damages and other penalties like milestone penalties are chargeable to GST under Entry 35 of 11/2017-CTR as Other Services (SAC 9997)  @18%; time of supply would be defined not when the delay is occurring but the liability of payment of these liquidated damages by the contractor will be established once the delay in successful execution of work is established on the part of the contractor: AAR

- Application disposed of: AAR

2019-TIOL-478-AAR-GST

Metro Aluminium

GST - Irrespective of the end use of the ladders, whether for domestic purpose or for commercial use, Aluminium ladders are correctly classifiable under HSN Code 7616 and attract GST @18%: AAR

- Application disposed of: AAR

2019-TIOL-477-AAR-GST

Mallelli Venkateswara Rao

GST - Extraction of Timber/Bamboo in natural forests; Transportation of Timber/Bamboo from natural forests to the government depots; maintenance of govt. depots like classification/grading of timber/bamboo and wages to mestris for supervision - Above transactions made by applicant fall under Entry 35 of Heading 9997 (SCA Code) of 11/2017-CTR and is taxable @18% GST: AAR

- Application disposed of: AAR

2019-TIOL-476-AAR-GST

Mcnally Bharat Engineering Company Ltd

GST - Activities carried out by applicant under three contracts for establishment of Solar PV Power project is to be treated as a Composite supply; is rightly classifiable under heading 9954, Entry 3(ii) of 11/2017-CTR and rate of tax is 18%: AAR

- Application disposed of: AAR

2019-TIOL-475-AAR-GST

ML Agro Products Pvt Ltd

GST - Rate of tax in respect of tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves is 5% as per 4/2017-CTR under reverse charge: AAR

GST - If applicant purchases tobacco leaves from other dealers who have purchased them from farmers for the purpose of trading, the rate would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If applicant segregates the tobacco leaf into grades depending upon their size (width), colour/shade, length, texture and sells such graded tobacco leaf, the rate of tax would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If tobacco leaves are butted and sold to other dealers or if the applicant gets the tobacco leaves re-dried without getting them threshed, the rate of tax would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If the applicant gets the tobacco leaves threshed and re-dried, the rate of tax would be 28% as per Sl. no. 13 of Schedule IV of 1/2017-CTR: AAR

GST - If the applicant gets the tobacco threshed and re-dried on job work basis at others' premises and then sells such threshed and re-dried tobacco leaves to others, the rate of tax would be 28% as per Sl. no. 13 of Schedule IV of 1/2017-CTR: AAR

- Application disposed of: AAR

2019-TIOL-474-AAR-GST

ML Tobacco Developers Pvt Ltd

GST - Rate of tax in respect of tobacco leaves procured at tobacco auction platforms or directly from farmers, which are cured and dried by farmers themselves is 5% as per 4/2017-CTR under reverse charge: AAR

GST - If applicant purchases tobacco leaves from other dealers who have purchased them from farmers for the purpose of trading, the rate would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If applicant segregates the tobacco leaf into grades depending upon their size (width), colour/shade, length, texture and sells such graded tobacco leaf, the rate of tax would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If tobacco leaves are butted and sold to other dealers or if the applicant gets the tobacco leaves re-dried without getting them threshed, the rate of tax  would be 5% as per Sl. no. 109 of Schedule I of 1/2017-CTR: AAR

GST - If the applicant gets the tobacco leaves threshed and re-dried, the rate of tax would be 28% as per Sl. no. 13 of Schedule IV of 1/2017-CTR: AAR

GST - If the applicant gets the tobacco threshed and re-dried on job work basis at others' premises and then sells such threshed and re-dried tobacco leaves to others, the rate of tax would be  28% as per Sl. no. 13 of Schedule IV of 1/2017-CTR: AAR

- Application disposed of: AAR

2019-TIOL-473-AAR-GST

KSR And Company

GST - Applicant is eligible for ITC in respect of the GST paid on goods and services used as inputs in execution of Works Contract - restriction u/s 17(5)(c) and 17(5)(d) will not apply as the applicant's output is Works Contract service: AAR

- Application disposed of: AAR

2019-TIOL-472-AAR-GST

Indian Potash Ltd

GST - Transportation of goods in a vessel from a non-taxable territory to taxable territory amounts to Import of service and such ocean freight is leviable to GST as an inter-state supply - applicant being an importer is liable to pay IGST under reverse charge mechanism irrespective of whether valuation adopted for import is FOB or CIF: AAR

GST - Issues raised on double taxation, subsidies and cascading effect leading to accumulation of credit are issues beyond the purview of s.97 of the CGST Act, 2017: AAR

- Application disposed of: AAR

NAA CASES

2019-TIOL-62-NAA-GST

Director General of Anti-profiteering Vs Friends Land Developers

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant had alleged profiteering by the respondent in the matter of purchase of flat by the applicant in the respondent's project ‘Palm Wood Royal Gulmohar Green', Ghaziabad - Inasmuch as the respondent had not passed on the benefit of Input Tax Credit (ITC) although he had charged GST @12% w.e.f 01.07.2017 - DGAP in its report has stated that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period from April 2016 to June 2017 was 3.23% and during the post-GST period from July 2017 to August 2018 was 6.52% which confirmed that post-GST the respondent had benefited from the additional ITC to the tune of 3.29%; that the profiteered amount as per calculations came to Rs.91,53,904/- which included GST on the base profiteered amount of Rs.81,73,129/- - and in respect of the applicant, the profiteered amount came to Rs.2,14,512/- (including GST on the base amount of Rs.1,91,529/-); that the respondent had supplied construction services in the State of Uttar Pradesh only.

Held: DGAP has submitted a revised investigation report after taking into account the revised details of the area sold by the respondent and the respondent's taxable turnover during the period April 2016 to June 2017 (pre-GST) and during the period from July 2017 to September 2018 (post-GST), the ratio of CENVAT/ITC to the taxable turnover, pre-GST was 2.81% and during the post-GST period it was 5.90% which showed that post-GST, the respondent has benefited from the additional ITC to the tune of 3.09% of the taxable turnover which was required to be passed on to the buyers; that the revised profiteered amount came to Rs.85,97,436/- including GST on the base profiteered amount of Rs.76,76,282/- and which also included the amount of Rs.2,01,472/- (incl. GST) in respect of the applicant - respondent has claimed to have passed on GST discount of Rs.16,94,607/- to his buyers but it is seen that the same has been given selectively and not all buyers were extended the same - moreover, this amount has been claimed to have been passed on account of GST and not on account of ITC and hence the above amount cannot be construed to have been passed on as benefit of ITC - Granting of rebates/discounts is the most prevalent practice followed in the construction industry to increase sales and hence the said rebate cannot be equated with the passing on of the benefit of ITC - no cogent evidence produced by the respondent in support of his contention that he has passed on the benefit of ITC by submitting the details of entries made in his books of account or cheques issued to the buyers or the copies of the tax invoices/demand letters or the acknowledgements made by his customers of having received the benefit of ITC due to implementation of GST - since such rebates/discounts cannot amount to passing on the benefit of ITC as per the provisions of s.171(1) of the CGST Act, it is apparent that the respondent has profiteered by the amount as computed by the DGAP - Respondent is directed to pass on an amount of Rs.2,01,472/- to the applicant and an amount of Rs.83,95,964/- to the other flat buyers who are not applicants in the current proceedings - amounts are to be paid within a period of three months from the date of this order along with interest @18% from the date from which these amounts were realised by the respondents from the applicant till they are paid as per the provisions of rule 133(3)(b) of the CGST Rules failing which the amounts shall be recovered by the CGST/SGST Commissioners concerned as per the provisions of the Act and paid to eligible house buyers - SCN to be issued for imposition of penalty prescribed u/s 171(3A) read with rule 133(3)(d) of the CGST Rules, 2017 - the Commissioner concerned to monitor this order under supervision of DGAO and a report to be submitted within a period of four months - since the present investigation is only upto 30.09.2018, any additional benefit of ITC that shall accrue subsequently is also required to be passed on to the buyers by the respondent - DGAP is also directed to cause investigation in to the other commercial project “Anandam Square” being executed by the respondent as per the provisions of 133(5)(a) of the Rules, 2017: NAA

- Application allowed : NAA

2019-TIOL-61-NAA-GST

Director General of Anti-profiteering Vs Navkar Associates

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent had resorted to profiteering in respect of supply of construction services related to purchase of an apartment in the project ‘Navkar Darshan', Pune; that the respondent had not passed on the benefit of Input tax credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him on implementation of GST w.e.f 01.07.2017 - DGAP has in its report submitted that the ITC as a percentage of turnover that was available to the respondent during the pre-GST period was 0.14% whereas during the post-GST period, it was 4.08%; that the respondent had been benefited from additional ITC to the tune of 3.94% of his turnover in post-GST period; that the profiteered amount came to Rs.5,83,593/- which included GST @12% on the base profiteered amount of Rs.5,21,065/-; that insofar as the applicant is concerned, the profiteered amount works out to Rs.39,715/- which included the profiteered amount @3.94% of the base price and 12% of GST on the said profiteered amount; that supplies were made by the respondent in the State of Maharashtra only; that above computation of profiteering is in respect of only four home buyers from whom payments had been received by the respondent during the post-GST period 01.07.2017 to 31.10.2018 whereas the respondent had sold a total number of 15 flats till 31.12.2018 but in respect of the remaining 11 flats, though the customers had booked the flats on or before 31.12.2018, they had not paid any consideration during the post-GST period; that if the ITC in respect of these 11 units was taken into consideration to calculate profiteering in respect of the four flats where payments had been received in the post-GST period, the ITC as a percentage of turnover would be distorted and erroneous; that, therefore, the benefit of ITC in respect of these 11 units would have to be calcuated when consideration ws received.

Held: DGAP report computing profiteering of Rs.5,83,593/- by the respondent is correct - the said amount which includes the 12% GST on the base profiteered amount of Rs.5,21,065/- is required to be refunded to the applicant and the other three flat buyers along with interest @18% within a period of three months - SCN to be issued for imposition of penalty for the offence committed under the Act and the Rules - Order to be monitored by the Commissioners concerned and a compliance report to be submitted within four months: NAA

- Application allowed : NAA