2019-TIOL-2960-HC-JHARKHAND-GST

Gulf Ashley Motor Ltd Vs GST

GST - The case of petitioner Company is that it has submitted its Form TRAN-I to claim input tax credit, but the same was not accepted due to the technical glitch in GST portal - The matter was ultimately reported to GST council, and upon the direction of the GST council, the Principal Commissioner forwarded the application of petitioner to the Nodal Officer on 27.3.2019 to look into the matter - The fact remains that the Form TRAN-I of petitioner has not yet been accepted - The Nodal Officer is directed to see that the Form TRAN-I submitted by petitioner is accepted in the portal within the due date, and still due to the technical glitch, if the Form TRAN-I is not accepted in the portal, the form shall be accepted manually and necessary scrutiny shall be made, whether the claim of petitioner is acceptable or not - For acceptance and scrutiny of the Form TRAN-I, the GST authorities and the Nodal officer shall take all steps in accordance with law within the due date: HC

- Application disposed of: JHARKHAND HIGH COURT

2019-TIOL-2959-HC-AHM-GST

Anmol Traders Vs State of Gujarat

GST - The petitioner invited the attention of court to the provisions of sections 5 and 6 of Gujarat GST Act, 2017 - Referring to the same, it was pointed out that the same provides that where a proper officer under CGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by proper officer under that Act on the same subject matter - It was pointed out that the authorities under the SGST Act have issued summons to the petitioner under section 70(1) of GST Act dated 29.8.2019 followed by another summons dated 5.12.2019 - It was pointed that in the statement of petitioner recorded by State authorities, question put to the petitioner was as to what was the status of search carried out at the petitioner's business premises by CGST Department and the second question was as to which books of accounts had been seized by CGST Department, in answer to which, the petitioner had replied that all their account books and other record of their business have been seized by CGST Department - It was submitted that, therefore, the authorities under the SGST Act are well aware that the authorities under the CGST Act are investigating the matter - It was submitted that there cannot be two parallel investigations under the State Act as well as the Central Act - Issue Notice returnable on 23rd January, 2020 - By way of ad-interim relief, the respondents are restrained from taking any coercive action against the petitioner pursuant to the impugned inquiry proceedings: HC

- Direct service permitted: GUJARAT HIGH COURT

AAR CASES

2020-TIOL-02-AAR-GST

Sree Varalakshmi Mahaal LLP

GST - Applicant is in the leasing business viz. leasing of the building (Marriage Hall) with all amenities for short term periods - applicant seeks to know as to whether the Input Tax credit is available on materials/services used for construction of building and whether the same can be utilised to nullify the cascading effect of taxation.

Held: The legislative scheme is amply clear - the Input tax credit paid on goods/services received for construction of an immovable property ‘on one's own account is unavailable' - such restriction is provided in the Act which is passed by legislature - section 16(1) read with section 17(5)(d) of the CGST Act, 2017 refers - insofar as reliance placed on the Orissa High Court decision in Safari Retreats P Ltd. [ 2019-TIOL-1088-HC-ORISSA-GST ] is concerned, it is clear that the High Court has granted credit on a case to case basis and moreover, the High Court has also held that section 17(5)(d) of the CGST Act, 2017 cannot be held to be ultra vires - inasmuch as since the said section is found to be valid by the High Court, Authority does not find any reason to go beyond the statutory provisions - Held that no Input Tax credit is available against any goods or services received by the applicant for construction of the Marriage Hall on his own account even if used in the course or furtherance of his business of renting the place: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-01-AAR-GST

RB Shah Enterprises India Pvt Ltd

GST - Applicant is engaged as a Consultant and is guiding the importers and exporters for various services related to Customs, JDGFT, CLA etc. - They organise/use duty credit scrips while rendering consultancy services - Duty credit scrips are exempted and the applicant seeks to know the appropriate rate of GST for the services rendered.

Held: Various services supplied by the applicant fall under SAC 998216/998312/998415/998434/998466/998595 etc. and all are taxable @18% GST vide notification 11/2017-CTR as amended - therefore, as per section 8 of the CGST Act, the rate of tax of this mixed supply which is billed at a single price is the highest rate applicable to the various services: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2019-TIOL-499-AAR-GST

Kalyan Jewellers India Ltd

GST - Applicant is in the business of manufacturing and trading of Jewellery products - as part of sales promotion, the appellant introduced the facility of different types of pre-paid instruments (PPI's) viz. closed system PPIs, Semi-closed system PPIs, Open System PPIs through its retail outlets, third party PPI issuers and online portals to their customers and these are generally called “Gift Vouchers/Gift Cards” in trade - applicant wishes to know whether issuance of these pre-paid instruments are classifiable as goods and taxable and if so, the time and value of supply of goods and determination of liability to pay tax for their pre-paid instruments.

Held: It is seen that the applicant issues closed PPIs as defined in the Master Circular issued by Reserve Bank of India - such PPIs are sold to customers on receiving the face value as per the requirement of customer and who can redeem the same in any outlet of the applicant across the country at the time of purchase of jewellery - further, such PPIs are named as 'Gift Vouchers' and the amount received on sale of such vouchers is accounted under 'Other Current liabilities' - once they are redeemed, they are credited to the revenue (sales) account  - gift voucher/gift card is an instrument squarely covered under the definition of 'payment instrument' under the Payment and Settlement Act, 2007 - if the holder of the gift card/voucher loses or misplaces it and is unable to produce the same before the applicant's stores before the specified time limit mentioned on the card/voucher, the instrument itself becomes invalid - The customer cannot use it to pay for any other goods, hence it is not an 'actionable claim' as defined in the Transfer of Property Act - PPIs squarely fall under the definition of 'voucher' as defined in s.2(118) of the CGST Act and are, therefore, 'goods' as per section 2(52) of the CGST and TNGST Act - supply of such vouchers qualifies as “supply” u/s 7 of the Act - time of supply being governed by s.12(4) of the Act - gift vouchers issued by the applicant are either in paper form or a plastic card which can be read electronically - paper gift vouchers are classifiable under CTH 4911 9990, chargeable @12%, Sl. No. 132 of Schedule II of 1/2017-CTR; plastic gift cards/vouchers are classifiable under CTH 8523 2100 or CTH 8523 52, chargeable @18%, Sl. No. 382 of Schedule III of 1/2017-CTR - since the third party PPI issuers are based in Bangalore, TN AAR does not have any jurisdiction over the activity undertaken by these entities: AAR

- Application disposed of: AAR

 

AAAR CASES

2019-TIOL-80-AAAR-GST

SK Aagrotechh

GST - The appellant-company is a partnership firm and a wholesale dealer of edible oil - It also manufactures Pooja Oil which is a mixture of rice bran oil, sesmae oil, coconut oil, castor oil and mahua oil and a small quantity of fragrance - The appellant had approached the AAR seeking to know whether pooja oil can be classified under Tariff Item 1518 of Schedule I and taxable @ 5% or under Schedule II and taxable @ 12% of Notfn No 1/2017-CT(R) - The AAR held that such oil is inedible mixture and so is covered under Entry No 27 of Schedule II to the Notfn No 01/2017-CT(R) and hence is taxable @ 6% under CGST Act & 6% under KGST Act - Hence the present appeal.

Held - Considering the HSN Explanatory Notes, it is seen that Pooja Oil is not a boiled or oxidized or blown or dehydrated or sulphurised or polymerised or otherwise chemically modified oil - Hence it is not covered under Sr No 90 of Schedule I - Meanwhile Entry 27 of Schedule II also includes in its scope, inedible mixtures or preparations of animal or vegetable fats or oils or of fractions of different fats and oils of this chapter not elsewhere specified - Therefore, Pooja Oil is more specifically covered under Sr No 27 of Schedule II where the CGST rate is 6% and the 6% KGST and 12% IGST as the case may be - Hence the findings of the AAR are sustained: AAAR

- Appeal dismissed: AAAR

2019-TIOL-79-AAAR-GST

Durga Projects and Infrastructure Pvt Ltd

GST - The appellant company is engaged in construction and sale of residential apartments - It executed projects under JDA with landowners for an agreed ratio of built up area - Construction was commenced in pre-GST period and continued into the GST regime - Upon implementation of GST, the appellant approached the AAR seeking to know the applicability of GST on partially completed flats having identified customers before GST; where customers are identified after implementation of GST and on partially completed flats where no customers are identified - In respect of the identified customers in pre-GST period, the AAR held that the appellant was liable to pay service tax proportionate to the services provided up to 30.06.2017 and from 01.07.2017 onwards & liable to pay GST proportionate to the services provided effective from 01.07.2017 in terms of Section 142(11)(b) of the CGST Act - Regarding those flats where customers were identified after implementation of GST, the appellant was found liable to pay GST on transaction value of supply - In respect of transactions where no customers were identified, the appellant was held not liable to pay GST as no supply is involved - But if the supply is made before issuance of completion certificate, then GST is liable to be paid on the transaction value of supply - The present appeal assails such findings.

Held: It is evident that the Appellate Authority for Advance Ruling is a creature of the statute and is empowered to condone a delay of only a period of 30 days after expiry of the initial period for filing appeal - In the literature of Section 100 of the CGST Act, the crucial words are not exceeding thirty days - To hold that the AAAR can entertain this appeal beyond the extended period under the proviso would render such phrase wholly otiose - The AAAR is not empowered to condone delay of 77 days in filing appeal - Hence the appeal is dismissed on grounds of limitation: AAAR

- Appeal dismissed: AAAR

2019-TIOL-78-AAAR-GST

Siemens Ltd

GST - The appellant entered into a contract with M/s Kolkata Metro Rail Corporation Limited before inception of the West Bengal GST Act - The contract was for design, supply, installation, testing and commissioning of the power supply and distribution system, third rail system and SCADA system for the entire line and depot of the Kolkata East-West Metro Rail Project - It includes the supply of equipment, training of the personnel - The appellant has been awarded onshore scope of work for the contract under an open consortium arangement with the offshore contractor Siemens AG - It had approached the AAR on whether GST is chargeable on the gross amount of the invoice raised under GST regime or the net amount of invoice after adjustment of lump sum amount outstanding as on 30.06.2017 - The AAR held that the appellant is deemed to have supplied WCS to M/s KMRCL to the extent covered by lump sum that stood credited to its account on that date as mobilisation advance and GST is leviable accordingly - Hence the present appeal against such findings.

Held: There are certain distinguishable features of both advance and deposit - For instance, an advance does not earn any return on it whereas a deposit earns interest - An advance has to be utilised for the specific purpose for which the advance is made whereas utilization of a deposit depends entirely on the person with whom it is deposited - In the instant case, the appellant did not pay interest to M/s KMRCL for holding the lump sum amount for so long a period - It did not have the liberty to utilize the lump sum amount in any venture on its own will other than the said contract - Both characteristics clearly indicate that the lump sum amount qualifies as advance only and not as a deposit - Moreover, the unutilized part of the lump sum amount held by the appellant as on 01.07.2017 cannot be considered to be a deposit and hence the appellant is not entitled to pay GST on the gross amount as and when it utilizes the amount towards provision of goods and services - In the present case, the only applicable law is the GST Act 2017 - Hence the time of supply of service is to be guided by Section 13(2) of the GST Act - The remaining unadjusted amount has to be construed as if it was credited into the account of the appellant on 01.07.2017 only, which will attract GST on such amount on that date itself - Hence there is no infirmity in the findings of the AAR: AAAR

- Appeal dismissed: AAAR

 

NAA CASE

2019-TIOL-80-NAA-GST

Director General Of Anti-Profiteering Vs JMK Holdings Pvt Ltd

GST - Anti Profiteering - The applicant filed an application before the Haryana State Screening Committee on Anti Profiteering u/r 128(2) of the CGST Rules, 2017 claiming that the respondent-company did not pass on benefit of input tax credit by way of commensurate reduction in price as per Section 171 of the CGST Act, in respect of flat purchased by the applicant in a project being developed by the respondent - The matter was later referred to the DGAP - On considering the records furnished by the respondent, the DGAP calculated the post-GST ratio of ITC to turnover at 7.27% and at 4.76% in pre-GST period - Hence the respondent was found to have benefitted from additional ITC to the tune of 2.51% of the turnover - Accordingly, the total profiteered amount was determined at about Rs 3.58 crores.

Held - The computations of ITC required to be passed on the applicant are correct, as they are based on information reflected in returns filed by the resondent and based on other details furnished by him - Besides, the computation of pre and post GST ratio of ITC and the calculation of additional ITC benefit too have been made based on VAT, service tax and GST returns filed by the respondent - The benefit of tax rate reduction and ITC is given away by the Central and State Governments from their own tax revenue to accomodate vulnerable sections of society under Affordable Housing Schemes - Therefore the respondent is legally obliged to pass on benefit of ITC to its buyers and cannot be allowed to retain the same - Besides, considering the respondent's challenge to the time frame for enquiry, it is seen that the profiteering has to be determined as soon as the respondent avails ITC and has no connection with the work in progress as it is to be calculated on the additional benefit of ITC availed by the respondent - The respondent also claimed that the CGST Act and the Procedure & Methodology were silent on the timing of passing on of the benefit - It is seen that since the respondent utilised ITC every month through GSTR-3B returns, the same should pass down to buyers through commensurate rate reduction - The respondent cannot use two parameters while itself using ITC every month and claiming that the buyers would be entitled to ITC when the project is completed or nears completion - There is no provision in the Anti Profiteering measures requiring that ITC be passed on when the flats would be delivered to buyers - The execution of project by awarding works contracts does not entitle respondent to pass on ITC benefit when the project would be nearing completion or is completed - Such claims of respondent do not have merit - Hence the respondent is directed to reduce its prices to pass on benefit of ITC rate reduction by paying the profiteered amount along with 18% interest - As the respondent contravened the provisions of Section 171(1) of the CGST Act, SCN be issued to it proposing to impose penalty u/s 171(3A) r/w Rule 133(3)(d) of the CGST Rules: NAA

- Application disposed of: NAA

2019-TIOL-79-NAA-GST

Director General Of Anti-Profiteering Vs Sarvpriya Securities Pvt Ltd

GST - Anti Profiteering - The applicant filed an application before the Haryana State Screening Committee on Anti Profiteering u/r 129(6) of the CGST Rules 2017 - The applicant claimed to have purchased a flat in a project developed by the respondent and alleged that the respondent had not passed on the benefit of input tax credit through commensurate reduction in price in terms of Section 171 of the CGST Act - The matter was referred to the DGAP, which considering the material submitted by the respondent, determined the profiteered amount at about Rs 9.96 crores which included GST on the base profiteered amount - The DGAP also observed that the benefit of additional ITC worked out to about 10.65% of the turnover and had to be passed on to 1039 recipients.

Held - The profiteered amount as computed by the DGAP appears to be correct as the same has been arrived at based on returns filed by the respondent - It is also clear that the Central Govt had reduced the GST rate on affordable housing from 12% to 8% vide Notfn No 01/2018-CT(R) - Besides, the ITC as a percentage of the turnover available to the respondent during the pre-GST and post-GST period, was computed based on records, information and returns furnished by the respondent - Hence such figures are reliable - From a plain reading og Section 171 it is amply clear that the total quantum of profiteeting by a registered person is the sum total of all benefits that stood denied to each recipient individually - Hence the respondent is under a legal obligation to pass on the benefit of ITC to its buyers and cannot be permitted to appropriate the same - The respondent's claim of having passed on ITC of about Rs 4.08 crores cannot be sustained since scrutiny of ledger accounts reveals certain entries, but it cannot be ascertained that such entries are on account of passing on benefit of ITC - The respondent is directed to reduce prices commensurate to reduction in rate of GST - The respondent is also directed to pass on the profiteered amount along with 18% interest - As the respondent's activity is denying benefit of rate reduction is in contravention of the mandate of Section 171(3A), SCN be issued proposing to impose penalty u/s 171(3A) r/w Rule 133(3)(d) of the CGST Rules: NAA

- Application disposed of: NAA

 

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