2020-TIOL-GST-337, Dated: Saturday, February 05, 2020

TOP NEWS

GST CASELAWS

SUPREME COURT CASES

2020-TIOL-64-SC-GST

UoI Vs Adfert Technologies Pvt Ltd

GST - Punjab & Haryana High Court had held that nobody shall be denied to carry forward legitimate claim of CENVAT/ITC on the ground of non-filing of TRAN-1 by 27.12.2017 - Aggrieved, Revenue had filed a Special Leave Petition before the Supreme Court.

Held: In the facts and circumstances of the case, Bench is not inclined to exercise its jurisdiction under Article 136 of the Constitution - SLP is dismissed: Supreme Court

- Appeal dismissed :SUPREME COURT OF INDIA

2020-TIOL-59-SC-GST

National Anti-Profiteering Authority Vs Hardcastle Restaurants Pvt Ltd

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - Constitutional validity of Section 171 of the Act read with Rule 126 of the CGST Rules and other cognate provisions is under challenge and the petitions in this regard are pending before the High Courts of Delhi, Bombay and Punjab & Haryana - Twenty writ petitions are pending before the Delhi High Court and two writ petitions which are the subject matter of the present Transfer petitions are pending before Bombay High Court.

Held: Bench considers it appropriate and proper that in the interests of a uniform and consistent view on the law, all the writ petitions should be transferred to the High Court of Delhi, where earlier writ petitions are already pending - Registries of the respective High Courts are requested to immediately transfer the papers of the proceedings of the writ petitions to the High Court of Delhi: Supreme Court [para 2, 3]

- Petitions transferred: SUPREME COURT OF INDIA

HIGH COURT CASES

2020-TIOL-521-HC-CHHATTISGARH-GST

Dadhichi Iron And Steel Pvt Ltd Vs Chhattisgarh GST

GST - Petitioner is questioning the investigation initiated by the respondents and the summons issued in connection with the said investigation - respondent officers have already issued a show cause notice on 25.10.2019 proposing cancellation of registration of the petitioner for the reasons of dealing in fake invoices and subsequently, on 15.11.2019 the respondents had cancelled the registration of the petitioner - petitioner again applied for restoration of registration vide application dated 31.12.2019, which is still pending consideration before the concerned authorities - Meanwhile, the respondents issued a show cause notice dated 02.01.2020 proposing a tax demand of Rs. 11 crores for allegedly dealing with fake dealers and using of fake invoices - later, respondents conducted a raid on the premises of the petitioner including the house of few employees of the petitioner's establishment on 31.01.2020 and consequently, one of the directors Mr. Dadhichi has been arrested by the respondents in-connection with the aforesaid investigation proceedings on 04.02.2020 by the DGCGST - petitioner challenges this on the ground of the same being illegal - primary contention of the petitioner is that once when a show cause notice proceeding initiated by the respondents dated 14.11.2019 is pending before the authorities concerned under the CG SGST, the respondents could not have issued or initiated another investigation or proceeding in-respect of the same subject matter, which otherwise is not permissible under the provisions of Section 6(2)(b) - respondents referred to the documents enclosed along with the writ petition and submitted that from the perusal of the records in the course of investigation, as of now, the respondents have been able to detect the petitioner of having availed ineligible ITCs of approximately Rs. 60 crores and the said amount is likely to increase manifold in the course of further investigation taking into consideration the large number of bogus transactions that the petitioner-establishment have shown to have been made; that since the nature of offence now being investigated is entirely different than the proceedings drawn in the show cause notice or the proceedings pending before the State Authorities are concerned, it would not be hit by the provisions of Section 6(2)(b); that since the offences reflected from the transactions were made in more than one State, the respondents had all the powers for initiating a proceeding under the provisions of Section 132; that the present investigation is more in respect of the defrauding of the government revenue committed by the petitioner in contravention to the provisions of the CGST Act and the nature of offence committed by the petitioner is one which falls under the provisions of Section 132(1)(i) and in view of the provision of Section 132(5) of the said Act, the offence is also a cognizable offence and is a non-bailable offence as well; that, therefore, the petition deserves rejection.

Held: Bench notes that the records clearly reflect that the initial issuance of the show cause notice and the proceedings drawn were in respect of the intra-state transactions made by the petitioner, wherein he had used fake and bogus invoices for the purpose of availing ineligible ITC, whereas subsequent to a secret information being received and further investigation being made, particularly in the course of a raid, which was conducted at the premises of the petitioner-establishment and other related premises, it was revealed that the magnitude of the offence committed by the petitioner-establishment was far more grave and serious; that in the course of raid it is found that the petitioner had been making false and bogus transactions and has illegally availed ineligible ITC credits; that the magnitude of offence detected by now is approximately Rs.60 crores and with further investigation the amount is likely to increase manifold - Court does not find any substance in the arguments of the petitioner, when they say that the investigation and the proceedings now initiated is one, which is hit by Section 6(2)(b) of the CGST Act of 2017; that there is a clear distinction between a proceeding drawn for the demand of tax evaded by the petitioner-establishment and the investigation being conducted by the Department of the DG, GST Intelligence Wings in respect of an offence committed by an establishment by way of using bogus and fake invoices and illegally availing ITC, which the petitioner-establishment otherwise was ineligible; that the judgments cited by the petitioner are distinguishable on facts itself - writ petition thus fails and is accordingly rejected: High Court [para 13 to 16]

- Petition rejected: CHHATTISGARH HIGH COURT

2020-TIOL-510-HC-KOL-GST

Arvind Kumar Munka Vs UoI

GST - Petitioner, a Chartered Accountant had sought bail on the ground that he was falsely arraigned as an accused on the allegation that he had connived with other accused persons for issuing GST invoices without actual supply of goods to the buyers - High Court had observed that it was huge economic offence and, therefore, rejected the bail petition on the ground that the loss caused to the Government exchequer amounts to about Rs.141.76 crores; however, the petitioner was entitled to seek compounding of offence u/s 138 of the CGST Act - Petitioner has renewed his prayer for bail by the present petition as his earlier petition was rejected; that the petitioner is in custody since 06.06.2019 and his further detention is not warranted as the charge-sheet has already been submitted on completion of the investigation.

Held: Section 41A(3) of the Code of Criminal Procedure does not provide an absolute irrevocable guarantee against arrest, while turning down the prayer for release of the petitioner on bail and thereby it was held in the earlier judgment dated 24.12.2019 that petitioner would not be entitled to be enlarged on bail but the petitioner was given the liberty to approach the authority for compounding of the offence under Section 138 of CGST Act - Bench once again reiterates and records that the petitioner may be released on bail by the Trial Court if it finds that the petitioner has approached the authority for compounding of the offence on deposit of at least 20% of the evaded amount on account of CGST - Application dismissed: High Court

- Application dismissed : CALCUTTA HIGH COURT

2020-TIOL-502-HC-AHM-GST

Bharatkumar Parambhai Chaudhari Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - Writ application disposed of: High Court [para 4 to 7]

- Application disposed of : GUJARAT HIGH COURT

2020-TIOL-501-HC-AHM-GST

Balkrishna Steel Traders Vs State of Gujarat

2020-TIOL-500-HC-AHM-GST

Global Knitfab Vs State Tax Officer

- Application disposed of : GUJARAT HIGH COURT

2020-TIOL-486-HC-KERALA-GST

Sutherland Mortgage Services Inc Vs Principal Commissioner

GST - Applicant had raised a question before the AAR as to whether the supply made would qualify as export of service as defined in Section 2(6) of the IGST Act, 2017 - Authority held that question essentially involves the determination of 'place of supply' which is not included in Section 97(2) of the CGST Act, 2017 as a question on which advance ruling can be sought; that the authority is a creature of statute and has to function within the legal boundary mandated by the Act; that as the 'place of supply' is not covered by Section 97(2) of the Acts, this authority is helpless to answer the question raised in the application, as it is lacking jurisdiction to decide the issues - Accordingly, the Application was rejected by the Authority for Advance Ruling - Applicant has filed a Writ petition before the Kerala High Court - It is submitted that section 100 of the CGST Act provides for a statutory appeal before the appellate authority concerned only if the advance ruling is rendered u/s 98(4) of the CGST Act and not against the order of rejection which has been purportedly issued u/s 98(2) of the Act wherein the plea for an advance ruling is rejected at the threshold stage - It is further submitted that the 'recipient of service' is a customer located outside India and that the petitioner India branch renders services to those customers outside India under the intra-company agreement entered into by the India branch with the principal company incorporated in USA and that, therefore, the services rendered by the petitioner India branch directly to the overseas customers and not to the principal company incorporated in USA; that the services are rendered by the petitioner India branch directly to the customers located outside India nd such services are thus consumed by such customers located outside India; that as the petitioner India branch is thus not directly rendering service to the principal company incorporated in USA (but directly to the customers located outside India) the restriction in clause (v) of Section 2(6) of the IGST Act read with Explanation 1 of Section 8 of the IGST Act cannot be pressed into service against the petitioner and that, therefore, the service in question would eminently and fully fulfil the definition of 'export of services' as defined in s.2(6) of the IGST Act.

Held:

++ It is common ground that if an order is passed u/s 98(2) of the CGST Act, then the same is not appealable in terms of s.100 of the Act as sub-section (1) of s.100 clearly provides that only if the applicant concerned is aggrieved by any advance ruling pronounced u/s 98(4) of the Act that an appeal would lie before the Appellate authority - Since the stand of the Advance Ruling Authority is that it has rendered its decision u/s 98(2) of the CGST Act, the present order cannot be the subject matter of an appeal u/s 100 of the Act - as the petitioner does not have any alternative statutory remedy, he can challenge the same mainly by way of judicial review in writ proceedings under Article 226 of the Constitution of India: High Court [para 18]

++ It is true that the issue relating to determination of place of supply is not expressly enumerated in any of the clauses as per clauses (a) to (g) of section 97(2) of the CGST Act, but there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfils the definition of place of service, would also come within the ambit of the larger issue of 'determination of liability to pay tax on any goods or services or both' as envisaged in clause (e) of s.97(2) of the Act - The Advance Ruling authority has proceeded on a tangent and has missed the said crucial aspect of the matter and has taken a very hyper technical view that it does not have jurisdiction for the simple reason that the said issue is not expressly enumerated in s.97(2) - Court has no hesitation to hold that the said view taken by the AAR is legally wrong and faulty and, therefore, the matter requires interdiction in judicial review in the instant writ proceedings - it is ordered that the said rejection order of the AAR is quashed and the application will stand remitted to the Authority concerned for fresh consideration and decision in accordance with the law - the Advance ruling in terms of s.98(4) may be duly rendered by the AAR without much delay, preferably within a period of 3 to 4 months: High Court [para 23]

++ It has to be borne in mind that India is at the cusp of great global changes and there cannot be any two opinions for anyone, who cherishes the best interest for this country, that with extreme hard work and industry, we have to progress economically, socially and in all spheres of life - A foreign entity like the principal company in this case would like to have precision and certainty about tax liability so that they can accordingly modulate their future outlook and it goes without saying that the executive authorities concerned including the taxation authorities will have to take the correct perspective and in accordance with the legislative policy framed as per the wisdom of the Parliament and the State legislatures to ensure that there is certainty and precision in taxation liability etc. so that the domestic investors as well as foreign investors, will get more incentive to continue and increase their level of activities for the overall better development and growth of our economy: High Court [para 24]

- Petition disposed of/Matter remanded: KERALA HIGH COURT

2020-TIOL-483-HC-AHM-GST

Krishna Oleo Chemical India Ltd Vs UoI

GST - It is the case of the petitioners that after the period for submitting TRAN 1 was extended upto 27th December 2017, the petitioners tried to log in form TRAN-1 on 14th November 2017, 20th December 2017 and 25th December 2017, but the petitioners could not upload TRAN-1 due to technical glitch on the online portal - Furthermore, whenever petitioner No.2 tried to upload form TRAN-1, a message was received from the portal of the respondents that the filing of declaration in form TRAN-1 is not available as the due date was over - petitioner No.2, therefore, sent complaint on 3rd December 2018 to the Nodal Officer of the respondents and a reminder dated 30th January 2019 along with manual submission of form TRAN-1 but petitioners were however not granted the credit of CENVAT under the CGST Act, 2017 - According to the petitioners, the Nodal Officer, Office of the Commissioner of CGST Audit, gave final audit report on 19 th June 2019 for the audit period for financial year 2014-15 to 2017-18 (upto June 2017), under which only an amount of Rs.61,605/- was to be paid by the petitioners and, therefore, they paid such amount; that the petitioners are, therefore, entitled to CENVAT credit as per register ER-1 - Counsel for respondent Revenue submitted that it is true that the petitioners could not upload form TRAN-1, however, necessary directions may be given to the respondents to permit the petitioners to upload the declaration in form TRAN-1 in view of aforesaid order dated 7th February 2020 issued by the CBIC extending time period to upload form TRAN-1 till 31 st March 2020.

Held: Only question which arises is whether the petitioners are entitled to carry forward CENVAT Credit balance as on 30th June 2017 under Section 140 of the CGST Act, 2017 in absence of uploading form TRAN-1 due to technical glitches - This question is no more res integra in view of decision of Coordinate Bench in case of Siddharth Enterprises ( 2019-TIOL-2068-HC-AHM-GST ) as well as order passed in review applications [ 2020-TIOL-454-HC-AHM-GST ] - Thus, dictum of law as declared in above decision would be applicable to the facts of this case also as the petitioners are not be able to upload form TRAN-1 due to technical glitches - respondents are directed to permit the petitioners to upload the declaration in form TRAN-1 and as per order dated 7th February 2020 passed by the CBIC, the petitioners will be entitled to upload Form TRAN-1 before 31st March 2020 to claim credit of CENVAT under Section 140(3) of the CGST Act, 2017 - Such exercise is to be completed within two weeks: High Court [para 15 to 18]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-472-HC-ALL-GST

Ankit Bhutani Vs UoI

GST - Summons issued to petitioner, an individual - summons were also issued to the firm from whom the petitioner's firm used to purchase raw materials and the said firm had filed a Civil Miscellaneous Writ Petition before Punjab and Haryana High Court and operation of the summons dated 26th June, 2019, had been stayed by that High Court - petitioner states that he has been forced to deposit a sum of Rs.2 crores - petitioner is, therefore, before the High Court seeking a direction to the respondent to finalise the enquiry proceeding initiated u/s 70 of the CGST Act, 2017 and not take any coercive action against the petitioner since they have deposited an amount of Rs.2 crores even before the tax liability has been quantified.

Held: Question is whether the discretionary jurisdiction of this Court under Article 226 of the Constitution of India can be availed by the writ petitioner in the facts and circumstances of the instant case - It is the admitted position that, till date, the writ petitioner, has not appeared before the Senior Intelligence Officer concerned in response to any of the summons issued from time to time - A discretionary relief to a petitioner can be granted by the writ Court in exercise of its extraordinary high prerogative jurisdiction under Article 226 of the Constitution of India only if his / her bona fides are not suspect - The reliefs which the writ petitioner is essentially seeking, if granted, would tantamount to granting him immunity from arrest even though the facts of the case clearly reveal that, till date, he has not even appeared once before the Senior Intelligence Officer - judgment cited is not an authority for the proposition that a person against whom several summonses have been issued for the purpose of enquiry conducted under section 70 of the Central Goods and Services Tax Act, 2017, in respect of availment of Input Tax Credit (I.T.C.), without receipt of any goods, can be shielded from such enquiry by the writ Court in the manner as prayed for - Insofar as this matter is concerned, the series of summonses / notices which have been issued, clearly reveal that the writ petitioner is not interested in cooperating with the enquiry - facts of the instant case do not qualify for use of discretion by the writ Court in order to grant the writ petitioner such reliefs as prayed for - Writ petition is, therefore, liable to be dismissed and stands dismissed: High Court

- Petition dismissed: ALLAHABAD HIGH COURT

2020-TIOL-462-HC-PATNA-GST

Vishwanath Iron Store Vs State of Bihar

GST - The petitioner was issued SCN in Form DRC-01 u/s 73 of the Bihar Goods and Services Tax Act, raising demand for interest - A certain amount of ITC was held as being inadmissible to the petitioner and interest thereof was demanded - The petitioner claimed that such demand was raised without there being any short fall in payment of tax or cess and so the demand was wholly without jurisdiction.

Held - The petitioner's counsel claimed that the issue at hand in the present case is covered by the decision in M/s Commercial Steel Engineering Corporation Versus The State of Bihar & Ors - Hence it is upto the authorities concerned to examine the issue and benefits if any be made available to the petitioner - A final decision be taken within four weeks' time: HC

- Writ petition disposed of : PATNA HIGH COURT

2020-TIOL-461-HC-PATNA-GST

Gaya Marketing Vs State of Bihar

GST - The petitioner filed the present writ, seeking that an order passed to it under the provisions of the Bihar Goods and Service Tax Act, be quashed - The petitioner claimed that such order was without jurisdiction and contravened the terms of Sections 39, 46, 47 and 50 of the Act - The petitioner also sought the notice in Form DRC-07 proposing duty demand, be quashed - The petitioner claimed that the principles of natural justice had been violated and that the Revenue authorities were obliged to issue notice in Form GSTR-3A, seeking filing of returns within 15 days and it is only on failure of the petitioner to do so, that any action could have been taken against it - The petitioner further claimed that no interest could be demanded from it when no duty was payable by it in the first place .

Held - The subject order does not assign any reasons whatsoever - Besides, prior to passing the order, no opportunity of personal hearing was afforded to the petitioner - As such, there is gross violation of the principles of natural justice - Hence the order merits being quashed - The petitioner is directed to appear before the appropriate officer, who is directed to decide upon the matter afresh, within three months' time: HC

- Writ petition disposed of : PATNA HIGH COURT

2020-TIOL-456-HC-AHM-GST

Gujarat Cooperative Milk Marketing Federation Ltd Vs UoI

GST - Petitioners have challenged the letter/circular F No. 354/292/2018-TRU dated 9.8.2018 - Petitioners seek a declaration that milk chilling and packing services provided by the contractors to the petitioners' dairies are exempted by virtue of serial No.24 of the table to Notification No.11/2017-Central Tax (Rate) dated 28.6.2017; petitioners also seek a direction to the respondents to return the amount recovered and collected from the petitioners through their contractors as GST on milk chilling and packing services.

Held: Vide Notification No.11/2017-CTR dated 28th June, 2017, services falling under Heading 9986 were exempted from payment of tax - services falling under clause (i) of the Heading 9986 are "support services to agriculture, forestry, fishing, animal husbandry" - What is brought to the centres is raw milk in which no further processing has been done and therefore, such milk is an agricultural produce - On a perusal of paragraph 3 of the impugned circular dated 09.08.2018, it is evident that the same is based on sub-clause (c) of clause (i) of the Explanation to clause (i) under Heading 9986, inasmuch as, according to the respondents the process of chilling and packing of milk is not usually done by the cultivator or producer and are not carried out at an agricultural farm - Milk cannot be stored without chilling as otherwise it would get spoiled - Therefore, storage of milk would include chilling of milk - Chilling of milk does not alter any of its essential characteristics and it still remains raw milk, and it is this raw milk which is thereafter packed - Therefore, chilling and storage of raw milk and packing it would clearly fall under sub-clause (e) of clause (i) of the Explanation - Consequently, if the raw milk is only stored and packed, the support services would fall under Heading 9986 of the Table to Notification No.11/2017-Central Tax (Rate) - In the impugned circular, it is the case of the respondents that chilled and packed milk for retail sale is not covered by the definition of agricultural produce - While saying so, what is lost sight of is that support services are not provided to chilled and packed milk, but support services of storage and packing are provide to raw milk which is an agricultural produce - Therefore, the very basic premise on which the respondents have proceeded is fallacious and based on a factually incorrect premise - Another ground stated is that such processes are not carried out at an agricultural farm - This ground is based on a misconception of the nature of services being provided, inasmuch as, it is sub-clause (c) of clause (i) of the Explanation which requires processes to be carried out at an agricultural farm; whereas, sub-clause (e) does not contain any such prescription - In the impugned circular, it is also stated that chilling and packing is not exempt from GST inasmuch as services by way of job work in relation to all food and food products falling under Chapters 1 to 22 attract levy of GST @ 5% and, therefore, the activity of chilling and packaging of milk provided by way of job work attracts levy of GST @ 5% - In this regard, Bench is of the view that the levy of 5% GST on job work on food and food products falling under Chapters 1 to 22 would be attracted if the services provided are not "support services" as contemplated under clause (i) of Heading 9986 at Serial No.24 of the Table to Notification No.11/2017-Central Tax dated 28.6.2017: High Court [para 17, 19, 23, 24, 25, 27]

GST - According to the respondents, there are separate exemption entries for transportation of agricultural produce and for transportation of milk [Serial No.20 and 21) of Notification No.12/2017-Central Tax (Rate) - A perusal of Serial No.20 of the said notification indicates that the same relates to services by way of transportation by rail or a vessel from one place in India to another of the goods enumerated thereunder - The present case does not relate to transportation of goods by rail or by a vessel and hence, reference to the said entry is also misconceived: High Court [para 26]

Conclusion: [para 28 to 30]

++ Interpretation given by the respondents to the activities of chilling and packing of milk as contained in the impugned letter/circular dated 9.8.2018 is not in consonance with the provisions contained in Serial No.24 of the Table to Notification No.11/2017-Central Tax dated 28.6.2017 and, therefore, the impugned letter/circular cannot be sustained.

++ The impugned letter/circular F. No.354/292/2018-TRU dated 9.8.2018 issued by the Government of India, through the Tax Research Unit, New Delhi, is hereby quashed and set aside. It is hereby held that milk chilling and packing service provided by the contractors to the petitioners are exempted by virtue of Serial No.24 of the table to Notification No.11/2017-Central Tax (Rate) dated 28.6.2017.

++ Insofar as the relief claimed for returning of the amount recovered and collected from the petitioners through their contractors as GST on milk chilling and packaging service, the petitioner may move appropriate application for refund in accordance with law.

++ Petition succeeds and is accordingly allowed.

- Petition allowed: GUJARAT HIGH COURT

2020-TIOL-454-HC-AHM-GST

Nodal Officer Vs GST Council

GST - Respondent department have filed Miscellaneous applications praying for review of the judgement and order dated 06.09.2019 = 2019-TIOL-2068-HC-AHM-GST on the the ground that the same is per incuriam - Revenue submits that due to inadvertence they could not point out the judgement of this Court rendered in the case of Willowood Chemicals Pvt. Ltd. = 2018-TIOL-2873-HC-AHM-GST and in the case of Jay Chemicals Industries Ltd. = 2018-TIOL-2880-HC-AHM-GST .

Held: In the case on hand, this Court has not declared the said Rule 117 of the CGST Rules, 2017 as ultra vires neither this Court has ordered the respondents to carry forward CENVAT credit beyond the time limit, but in the case on hand, the respondents herein had tried to upload form GST TRAN-1, but it could not be filed on account of technical glitches in terms of poor network connectivity and other technical difficulties at common portal - Under the circumstances, this Court has gone into the question that in such circumstances what would be the remedy if a person who tries to follow Rule 117 of the CGST Rules, 2017 but, without there being any fault on his side he could not upload the form due to technical glitches - Therefore, this Court has followed the judgement in the case of Filco Trade Centre Pvt. Ltd. ( 2018-TIOL-2861-HC-AHM-GST ), wherein, after relying on number of judgements of the Apex Court, the coordinate Bench of this Court had followed the consistent findings of the Apex Court and held that the right accrued to the assessee on the date when the paid tax on the raw materials or the inputs and that right would continue by way of CENVAT credit; that the CENVAT credit is indefeasible - Following the said principle, this Court had directed the applicants herein - original respondents to permit the respondents herein - original petitioners to allow filing declaration form in GST TRAN-1 and GST TRAN-2, so as to enable them to claim transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the GST Act - The co-ordinate Bench has also observed in paragraph 32 that clause (iv) of sub-section (3) of Section 140 is unconstitutional and, therefore striked down the same - Thus, when the co-ordinate Bench had already declared clause (iv) of sub-section (3) of Section 140 as unconstitutional, Bench does not have any hesitation to declare Rule 117 of the CGST Rules, 2017 for the purpose of claiming transitional credit as procedural in nature and should not be construed as mandatory provision - In the two judgments of the Coordinate Bench, which are relied on by the applicant (Revenue), the above ratio of the Apex Court is not followed and, therefore, Bench is of the view that the judgment in case of Filco Trade Center Pvt Ltd = 2018-TIOL-2861-HC-AHM-GST would be applicable to the facts of the present case - present Miscellaneous applications are dismissed: High Court [para 5.1, 5.2]

GST - Applicants (Revenue) have not taken care to look into the previous judgement of the co-ordinate Bench of this Court in the case of Filco Trade Centre Pvt. Ltd. (supra) and have hurriedly filed the Misc. Civil Applications alleging the order of this Court per incuriam - such an act is required to be deprecated: High Court [para 5.3]

- Applications dismissed: GUJARAT HIGH COURT

2020-TIOL-449-HC-DEL-GST

Johnson & Johnson Pvt Ltd Vs UoI

GST - Anti-Profiteering - Sanitary Napkins - Petitioner seeks grant of interim relief in the matter of order dated 21 st November 2019 passed by the National Anti-Profiteering authority - Petitioner submits that the respondents have acted unreasonably inasmuch as for the period prior to reduction of GST from 12% to nil w.e.f. 27.07.2018, the DGAP had computed the base price on average basis, however, for the period after the GST rate became nil w.e.f. 27.07.2018, the base price has been worked out item by item - That in respect of several items sold by the petitioner, after the reduction of GST to nil, the price actually fell, however, while computing the profiteered amount such cases have been excluded from consideration.

Held: Bench observed that prima facie it appeared that the impugned order needs consideration and the petitioner has been able to make out a strong case for grant of interim relief - Therefore, till the next date, the impugned order is stayed - Matter listed on 24.09.2020 and directions issued that no penalty proceedings would be initiated against the petitioner in the meantime: High Court

- Stay granted: DELHI HIGH COURT

2020-TIOL-446-HC-AHM-GST

Hanuman Trading Company Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged – Writ application disposed of: High Court [para 6 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-445-HC-AHM-GST

Synergy Fertichem Pvt Ltd Vs State of Gujarat

- Applications disposed of: GUJARAT HIGH COURT

2020-TIOL-444-HC-AHM-GST

Moon Traders Vs State of Gujarat

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-443-HC-AHM-GST

Maruti Traders Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged – Writ application disposed of: High Court [para 6 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-437-HC-KAR-GST

Sutaria Automobiles Vs UoI

GST - Petitioner seeks a direction to the respondents to provide revise facility in uploading GST TRAN-1 and other returns filed by the petitioner either online or manually and allow the credit claimed - Petitioner relies on the order passed by this Court in W.P.No.33290/2019 and other connected matters which were disposed of on 19.11.2019 [ 2020-TIOL-16-HC-KAR-GST ] and seeks for granting the same relief.

Held: Writ petition is disposed of with similar directions as contained in the order dated 19.11.2019 viz. writ petitions are allowed directing the respondents to permit the petitioners to file/revise the TRAN-1 either electronically or manually on or before 31.12.2019: High Court [para 2, 3]

- Petition disposed of : KARNATAKA HIGH COURT

2020-TIOL-436-HC-KAR-GST

Aris Global Software Pvt Ltd Vs UoI

GST - Petitioner has sought for a direction to the respondents to permit the petitioner to file the returns in GSTR TRAN-1 - Matter is no longer res integra in view of order dated 19.11.2019 [ 2020-TIOL-16-HC-KAR-GST ] whereby the High Court has extended the period to file/revise the Form GST TRAN-1 by the registered persons by 31.12.2019 - Petitioner is also entitled to avail the extended period for filing/revising Form GST TRAN-1 - petition disposed of: High Court [para 3]

- Petition disposed of : KARNATAKA HIGH COURT

AAR CASES

2020-TIOL-36-AAR-GST

Electroplating And Metal Finishers

GST - Activity of Electroplating is "Supply of service" classifiable under heading 9988 - applicable rate of tax is 9% CGST [11/2017-CTR] for the period up to 30.09.2019 irrespective of whether the goods are owned by registered or unregistered persons; from 01.10.2019, if goods are belonging to another registered person, tax rate is 6% CGST and if goods are owned by unregistered persons, the tax rate would be 9% CGST: AAR

- Application disposed of: AAR

2020-TIOL-35-AAR-GST

Shapoorji Pallonji And Company Pvt Ltd

GST - Mobilisation advance, to the extent received prior to the implementation of GST, towards supply of Works Contract Service is not to be subjected to GST as per provisions of s.142(11)(b) of the CGST Act, 2017: AAR

GST - Determining eligibility of credit based on the transitional provisions is not answered as the same is not covered under the questions on which Advance Ruling can be sought u/s 97(2) of the CGST Act, 2017: AAR

GST - Section 142(11)(c) is applicable in cases with respect to transactions in which both VAT and Service Tax are paid in the pre-GST regime and on which GST would be leviable to the extent ‘supply' is made after the appointed date for the recipient who has actually paid the tax - in the present case, applicant has paid Service Tax on the advance received for which the applicant has raised invoice on their service receiver along with the component of service tax but no VAT has been paid/received from their customer on that part of the Mobilisation Advance pertaining to materials and, therefore, this provision does not apply to the case at hand - Held that the transitional provisions u/s 142(11)(c) is not applicable to the case of the applicant: AAR

- Application disposed of: AAR

2020-TIOL-34-AAR-GST

Automative Components Technology India Pvt Ltd

GST - In terms of Schedule II, Entry Sr. no. 1, 'transfer of the title in goods' is supply of goods - in the present case as there is transfer of the title in moulds for a consideration and the supply is in the course of business, therefore, same constitutes 'supply of goods' in terms of s.7 of the CGST Act and GST is liable to paid on such supply - insofar as the question as to whether the Indian buyer would be eligible to take credit of the GST paid to the appellant for said purchase, same is not covered under any of the categories specified u/s 97(2) of the Act and, therefore, not within the ambit of the Authority: AAR

- Application disposed of: AAR

2020-TIOL-33-AAR-GST

Macro Media Digital Imaging Pvt Ltd

GST - Applicant seeks a ruling as to whether the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of "goods"; what is the classification of such trade advertisement if the transaction is supply of "oods"; what is the classification and applicable rate of GST on the supply of such trade advertisement material if the transaction is that of supply of "service".

Held: On a combined reading of paragraphs 4 & 5 of the Circular 11/11/2017-GST dated 20.11.2017, it can be inferred that the ownership of usage rights of intangible inputs plays a crucial role in deciding the supply as to whether the same is of 'oods' or 'ervices', though there exists two common points in both the cases viz. content is supplied by the recipient of goods/services; the physical inputs including paper used for printing belong to the printer - it is evident that the nature of physical inputs on which printing activity is carried out does not change after the process of printing i.e the same remain as before and hence the printing activity is ancillary and hence supply of the same is that of supply of goods - it is an admitted fact that the PVC material is classified under Chapter 39 prior to printing and after printing it would become Trade Advertising Materials and fall under Chapter 49 - Therefore, the activity of printing makes the PVC material into banner/billboard etc. and thus the nature of the material changes - applicant also does not own or retain the usage rights of intangible inputs - Therefore, the activity of printing the content supplied by the recipient on the PVC material becomes principal supply and such supply constitutes supply of "ervice" falling under SAC 9989 - applicable rate of GST on the supply of the said service is @18% up to 30.10.2017 and @12% w.e.f 31.10.2017 as per Entry no. 27 of 11/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-32-AAR-GST

MV Infra Services Pvt Ltd

GST - Rate of 18% is applicable on services to be provided by the applicant under sub-contract to main contractor, who in turn provides to M/s Maharashtra State Skill Development Society (MSSDS), in respect of training building and other construction workers (skill development training) and Sl. no. 69 or Sl. no. 72 of 12/2017-CTR are not applicable - This is so because though the services to be provided by the applicant would be under training programme for Recognition of Prior Learning (RPL) to Construction workers, the services would be provided to the Main Contractor (i.e recipient of the services would be the main contractor, but not the State Government): AAR

- Application disposed of: AAR

AAAR CASES

2020-TIOL-15-AAAR-GST

JSW Energy Ltd

GST - Applicant (now Appellant) company M/s JSW Energy Limited (M/s JEL) is engaged in the business of power generation - Its related party is Jindal Steel Limited (M/s JSL) which is engaged in manufacturing & supplying steel - The appellant supplies power to M/s JSL - The two entered into an agreement for supply of coal & other inputs to the appellant for generating power - The appellant had approached the Authority for Advance Ruling seeking to know the application of GST on coal & other inputs supplied on 'job work' basis by M/s JSL to the appellant, supply of power by the appellant to M/s JSL & on the job work charges payable by M/s JSL - The Authority held that the process undertaken by the appellant amounted to "manufacture" & did not fall within the scope of 'treatment or process' as seen in the definition of job work - It further held that since the appellant and M/s JSL were related parties, any supplies made between them, even if without consideration, would attract GST - Aggrieved, M/s JEL went in appeal before the Appellate authority and also submitted that the question of applicability of GST on coal & other inputs supplied by M/s JSL had not been answered and this the appellant claimed was perhaps on the reasoning that the transaction pertained to GST liability of M/s JSL & not the appellant - AAAR held that the processing activity undertaken on goods belonging to another registered person qualifies as job work even if it amounts to manufacture, provided all the requirements under the CGST/MGST Act in this behalf are met with; that the transaction between the appellant & M/s JSL does not amount to job work u/s 2(68) & Section 143(3) of the two Acts - appellant M/s JEL challenged both the orders before the Bombay High Court - High Court noted that the moot question which arose in the matter was whether the Appellate Authority, in relying upon the 'new grounds', has violated the principles of natural justice, by not putting the petitioner to any notice that such 'new grounds' were proposed to be considered or by not affording the petitioner opportunity to place on record the documentary evidences or clarifications in order to meet such 'new grounds'; that, therefore, in absence of any indication by the Appellate Authority that it proposed to take into consideration the 'new grounds' or the failure on the part of the Appellate Authority to afford the petitioner an opportunity to produce documents or documentary evidences having direct bearing on the 'new grounds', in the opinion of the Bench, amounts to failure on the part of the Appellate Authority to adhere to the principles of natural justice and such failure vitiates the decision making process and affords a good ground for interference in the exercise of powers of judicial review - accordingly, the High Court held that it is satisfied that the ground of failure of natural justice and the consequent vitiation of the decision making process, has been made out, therefore, the impugned order dated 2nd July 2018 made by the Appellate Authority was set aside and the petitioner's appeal was remanded to the Appellate Authority for reconsideration on its own merits and in accordance with law.

Held: All the observations made in the AAAR order dated 02.07.2018 are repealed - AAAR holds that the proposed arrangement under consideration of supply of coal or any other inputs by the principal M/s JSL to the appellant M/s JEL for generation of electricity is satisfying the condition laid down u/s 143(1)(a) of the CGST Act in respect of bringing back of the inputs by the principal M/s JSL from the job worker ' s (M/s JEL's) premises after the completion of job work and, therefore, no GST would be leviable on such supply - furthermore, the job work charges payable to M/s JEL by M/s JSL will be subjected to GST in terms of the provisions laid down in 11/2017-CTR as amended: AAAR

- Appeal allowed: AAAR

2020-TIOL-14-AAAR-GST

Karnataka Co-Operative Milk Producers Federation Ltd

GST - AAR had held that Flavoured milk supplied as a ready to consume drink in Tetra-pack containers or bottles is classifiable under Tariff Heading 0402 9990 and not under 2202 9930 - An appeal has been filed against this order by the Assistant Commissioner of Commercial Taxes arguing that the applicant-respondent had suppressed vital facts in the application inasmuch as investigations had already been initiated by the DGGI against the applicant and an incident report was issued on 17.01.2019 and this fact was not disclosed to the Authority for Advance Ruling; that, therefore, the subject order passed appears to be invalid ab initio, section 98(2) refers - respondent submitted that the investigations by DGGI commenced only in April 2019 whereas the application was filed in March 2019; that the letter dated 9th January 2019 issued by DGGI cannot be considered as summons as it was a routine letter calling for documents and that no investigations had commenced as on the date of filing application before the AAR.

Held: Summons dated 9th January 2019 issued by the SIO, DGGI, Bangalore is in terms of s.70 of the CGST Act which empowers an officer to call a person to give evidence in respect of an enquiry being conducted; that the summons informs the person being summoned about legal consequences of not honouring the summons and to specifically produce documents relating to the sale of flavoured milk during the period July 2017 to November 2018; therefore, it is clear that the respondent made an application for advance ruling in March 2019 all the while being aware of the investigation being conducted against them by DGGI, Bangalore and they (respondent) chose to keep this fact away from the AAR - application for advance ruling could not have been made in this case as it is hit by the provisions of s.98(2) of the Act inasmuch as investigation was already initiated by DGGI - Order of AAR is, therefore, void ab initio - AAAR does not intend to give any ruling on the issue of classification since the matter is pending in a proceeding under the CGST Act, 2017: AAAR

- Appeal allowed: AAAR

2020-TIOL-13-AAAR-GST

International Flower Auction Bangalore Ltd

GST - AAR had held that the relationship between the respondent company and the growers is one of an agent and a principal and since the respondent company, as a commission agent, is providing services for sale or purchase of agricultural produce viz. 'cut flowers', the same is covered under clause (g) of Entry 54 of 12/2017-CTR and hence is exempted from GST - Commissioner of Central Tax has filed an appeal against this order of AAR and submits that the respondent does not act on behalf of another person for auctioning the goods but is acting only as a mediator between the buyer and seller of the products and for offering these facilities, a percentage of the sale value is received as Auction fees; that the services are rightly classifiable as 'Auctioneer service' and not under 'Commission agent'; that the benefit of exemption as extended by AAR is not admissible; that the services are classifiable under SAC 9961 [Entry 5 of 11/2017-CTR] and liable to tax.

Held : Nature of activities done by an 'Auctioneer' and a 'Commission agent' are fundamentally different even though both perform their functions on behalf of the principal - going by the nature of activities performed by the respondent, they do not merely cause the sale of goods on behalf of their clients, the flower growers/sellers, but they undertake the complete process of auction of the flowers and upon the completion of auction, the sale consideration is received not by the sellers but by the respondent who would make payment to the growers for the flowers supplied to them after deduction of the commission - such payments are made to the growers/sellers on the day following the end of the calendar week; the respondent themselves issue the delivery orders which enables the buyers to take delivery of the flowers from the auction house and they also do the billing work and collection of sale proceeds on behalf of their clients - it, therefore, appears that this wide gamut of activities by the respondent would go far beyond the scope of a commission agent since the services rendered by them are not restricted only to sale of goods on behalf of the sellers for a consideration, which is the main edifice of the definition of a 'commission agent' - activities of the respondent company are, therefore, more appropriately classifiable as 'Auctioneer service' - respondent is also not entitled for the exemption in terms of clause (g) of Entry 54 of 12/2017-CTR as the same is available only to the services provided by a 'commission agent' - AAR ruling dated 26.09.2019 is set aside and the appeal filed by the Commissioner of Central Tax, Bangalore North Commissionerate is allowed: AAAR

- Appeal allowed: AAAR

NAA CASES

2020-TIOL-12-NAA-GST

Director General of Anti-Profiteering Vs Aparna Constructions And Estates Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - It is established from the perusal of the facts and the report of DGAP that the respondent has benefited from the additional ITC to the extent of 4.04% of the turnover during the period from 01.07.2017 to 31.03.2019 and hence the provisions of s.171 have been contravened by the respondent inasmuch as he has not passed on the above benefit to his customers by commensurate reduction in the prices of the flats - profiteered amount is determined as Rs.22,59,91,979/- inclusive of GST @12% on the base profiteered amount of Rs.20,17,78,553/- in terms of rule 133(1) of the CGST Rules, 2017 - respondent has realised an additional amount of Rs.4,74,865/- which includes both the profiteered amount @4.04% of the taxable amount (base price) and 12% GST on the said profiteered amount from applicant no. 1 - similarly, he has further realised an additional amount of Rs.22,55,17,114/- which includes the profiteered amount and GST 12% from the flat buyers other than the applicant no.1 and who are all identifiable as per the documents available - respondent is directed to pass on this amount of Rs.22,55,17,114/- and Rs.4,74,865/- to the other flat buyers and the applicant no.1 respectively along with interest @18% from the dates from which the above amount was collected till the date the payment is made, within a period of three months - Commissioners CGST/SGST to monitor and ensure that the benefit is passed and report compliance within a period of four months - SCN to be issued seeking imposition of penalty u/s 171(3A) of the CGST Act, 2017 read with rule 133(3)(d) of the CGST Rules: NAA

- Application allowed: NAA

2020-TIOL-08-NAA-GST

Director General of Anti-Profiteering Vs Manas Vihar Sahakari Awas Samiti Ltd

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 a house under the PMAY in the respondent's project Mayur Residency Extension; also that the respondent had charged GST @18% on the construction service/works contract service and had not passed on the benefit of ITC by way of commensurate reduction in the price after implementation of GST - DGAP has submitted its report as well as a supplementary report concluding that the respondent had profiteered.

Held: It is apparent from the DGAP's report that there has been no reduction in the rate of tax in the post GST period hence the only issue to be determined is as to whether there was any additional benefit of ITC with the introduction of GST which has accrued to the respondent and which he was required to pass on to his buyers - DGAP report mentions that the ITC as a percentage of the turnover that was available to the respondent during the pre-GST period from April 2016 to June 2017 was Nil and during the post-GST period from July 2017 to March 2019 it was 11.97% and which confirms that post-GST the respondent has benefited from additional ITC to the tune of 11.97% and the same was required to be passed on by to the applicant as well as the other buyers/recipients - DGAP has calculated the amount of ITC as Rs.35,98,596/- which is required to be passed on to all the recipients - claim of respondent that they had passed on the benefit of ITC by reducing the rate on the cost of construction/by way of cash or bank transfers is not supported by any reliable and cogent evidence - it is, therefore, concluded that the benefit of ITC to be passed on to the buyers during the period 01.07.2017 to 30.03.2019 is determined as Rs.35,98,596/- which includes GST @18% on the base profiteered amount of Rs.30,49,658/- as detailed in the DGAP report dated 30.08.2019 - insofar as the applicant is concerned, the profiteered amount is determined as Rs.19,953/- with also includes GST @18% - accordingly, respondent is required to refund to the recipients/buyers the profiteered amount along with interest @18% from the date when the amount was collected till the date of payment as per provisions of rule 133(3)(b) of the CGST Rules - such amount is to be paid within a period of three months and a compliance report is to be submitted by the jurisdictional Commissioner within a period of four months - respondent is liable for imposition of penalty u/s 171(3A) of CGST Act, 2017 and a SCN needs to be issued accordingly - other projects being executed also need to be examined from the angle of profiteering and the DGAP is directed to investigate in this regard: NAA

- Application allowed: NAA

2020-TIOL-07-NAA-GST

Director General of Anti-Profiteering Vs Samsung India Electronics Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the Respondent did not reduce the selling price of Samsung 80 cm (32 inches) HD ready LED TV 32FH4003 when the GST rate was reduced from 28% to 18% w.e.f 01.01.2019 [24/2018-CTR] and the price of the product remained the same after tax reduction and thus the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price in terms of s.171 of the CGST Act, 2017 - DGAP in its report has concluded that the amount of profiteering by the respondent on account of contravention of provisions of s.171 of the Act was Rs.37,85,342/-.

Held: Respondent has contended that he is not the 'supplier' of the goods for the transaction in question and the suppliers were two separate dealers namely 'Jumbo Distributors P Ltd.' and 'EP Electronic Paradise P. Ltd' - On perusal of the complaint, it is revealed that the name of the supplier was written as M/s Samsung India Electronics P Ltd. and to authenticate this contention the applicant had included screenshots of certain e-commerce portals like Amazon etc. - As a manufacturer, the respondent and not the wholesale distributors, dealers or retailers were responsible for fixing the MRPs as only he could fix the MRPs as per the provisions of rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011 - Provisions of the section 171(1) of the Act require a registered person to pass on the benefit of tax reduction or additional ITC to the recipient by way of commensurate reduction in the prices on every supply of goods and services and they nowhere state that the above person shall fix his prices as directed under the above section - Authority, in terms of s.171(1) is also required to ensure that both the above benefits are passed on, however, it has no mandate to act as a price regulator or price controller - Methodology for determination of benefit of ITC or reduction in rate of tax has been prescribed in s.171(1) itself and no separate methodology is required to be prescribed under rule 126 - The respondent is totally free to fix his prices and earn profit and he is only required to pass on the above benefit which has been given to him by the Central and State governments by sacrificing their own revenue which he cannot appropriate against his profits, therefore, s.171 is not violative of the provisions of Article 19(1)(g) of the Constitution of India - contention of the respondent that pricing for B2C sales is highly dynamic and varies depending upon channel structure and other market factors such as size of business, operating cost, location and logistics etc. is untenable as provisions of s.171(1) of the Act require the respondent to pass on the benefit of tax reduction to the consumers only and have no mandate to look into fixing of the prices of the products which the respondent was free to fix - If there was any increase in his costs, the respondents should have increased his prices before 31.12.2018, however, it cannot be accepted that his costs had increased on the intervening night of 31.12.2018/01.01.2019 when the rate reduction had happened which forced him to increase his prices exactly equal to the reduction in the rate of such tax - such an uncanny coincidence is unheard of and hence there is no doubt that the respondent has increased his prices for appropriating the benefit of tax reduction with the intention of denying the above benefit to the consumers - profiteered amount is determined as Rs.37,85,342/- as computed by DGAP in its report dated 12.09.2019 - respondent is directed to reduce his prices commensurately in terms of rule 133(3)(a) of the CGST Rules - respondent is directed to deposit the profiteered amount in the Consumer Welfare Fund of the Central and the State Government concerned as the recipients are not identifiable as per provisions of rule 133(3)(c) of the Rules; along with interest @18% - amount to be deposited within three months - respondent is liable for imposition of penalty u/s 171(3A) of the Act and, therefore, a SCN is to be issued directing the respondent to explain why the penalty prescribed under the said sub-section should not be imposed - Commissioners to monitor this order under supervision of DGAP and submit a report within four months: NAA

- Application disposed of: NAA

2020-TIOL-06-NAA-GST

Director General of Anti-Profiteering Vs Supertech Ltd

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 the purchase of Flat J-66C in the respondent's project Office Enclave, Gurugram; that the respondent had not passed on the benefit of 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 stated that during the pre-GST period (April 2016 to June 2017), the total rate of tax was 5.5% [ST @4.5% and VAT @1%) and the post-GST period July 2017 to December 2018 the effective GST rate on construction service was @12% vide 11/2017-CTR and which showed that upon introduction of GST the applicable tax rate on construction services supplied by the respondent had gone up from 5.5% to 12%; furthermore, that the ITC as a percentage of turnover that was available to the respondent during the pre-GST period was 0.94% and during the post-GST period it was 0.38% and, therefore, the respondent had neither benefited from additional ITC nor had there been a reduction in the tax rate in the post-GST period - inasmuch as the provisions of s.171 of the CGST Act, 2017 did not appear to be attracted in the present case.

Held: Bench finds no reason to differ from the report of the DGAP and, therefore, agrees with its findings that the provisions of s.171 of the Act have not been contravened in this case - allegation that the respondent had not passed on the benefit of ITC in this case is unsustainable - accordingly, the application filed requesting action against the respondent is dismissed as not maintainable: NAA

- Application dismissed: NAA

NATIONAL ANTI-PROFITEERING AUTHORITY - INTERNAL ORDERS

IO No. 12/2020

Portronics Digital Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Justice cannot be done if the supply chain wise data is not re-examined and the profiteered amount is not re-computed - therefore, without going into the merits of the case and without considering the other submissions of the respondent and the applicant, Authority finds it imperative that there is need for re-computation of the profiteered amount - Authority, under rule 133(4) of the CGST Rules, 2017 directs the DGAP to further investigate the issues mentioned and furnish report under rule 129(6) of the Rules within a period of three months - respondent to fully co-operate: NAA : Interim order issued

IO No. 11/2020

Dough Makers India Pvt Ltd

GST - Anti-Profiteering - section 171 of the CGST Act, 2017 - Applicant has alleged profiteering in respect of restaurant service supplied by the respondent (franchisee of M/s Subway Systems India P Ltd.) despite reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017 - it is alleged that the respondent has increased the base prices of his products and has not passed on the benefit of reduction in the GST rate from 18% to 5% w.e.f 15.11.2017 by way of commensurate reduction in prices in terms of s.171 of the Act - DGAP in its report has concluded that the allegation of profiteering by way of either increasing the base prices of the products while maintaining the same selling price or by way of not reducing the selling prices of the products commensurately despite reduction in the GST rate from 18% to 5% w.e.f 15.11.2017 stood confirmed against the respondent; that on this account the respondent had realised an additional amount of Rs.78,41,754/- from the recipients which included both the profiteered amount and the GST on the said profiteered amount and hence provisions of s.171(1) of the Act have been contravened.

Held: Authority is of the view that based on the report of the DGAP, the submissions made by the respondent and the material placed on record, the computation of profiteering undertaken by the DGAP needs to be revisited inasmuch as the profiteering has been calculated on the basis of comparison of item-wise average base price in the pre-rate reduction period with the day-wise average base price of each item being supplied by the respondent in the post-rate reduction period after reconciling the sales data with the GST returns - however, the profiteering ought to have been computed on the basis of the comparison of pre-rate reduction item-wise average base price with the actual transaction-wise/invoice-wise price charged by the respondent in respect of his supplies in line with the provisions of s.171(1) and s.171(2) of the CGST - This is because profiteering needs to be computed in respect of each supply effected by the registered person/supplier i.e the respondent - reason for this anomalous computation has been given by the DGAP by stating that the respondent had never furnished the actual invoice-wise/transaction-wise data for the relevant post-rate reduction period at any time during the investigation and hence profiteering could not be computed in respect of every supply/transaction for the post-reduction period - respondent has also refused to furnish requisite data on the ground that the same was voluminous and there were technical issues in furnishing the same, however, such assertion is unacceptable inasmuch as other franchisees who have been similarly investigated have provided the data for the post-rate reduction period - DGAP has been conferred with wide ranging powers under rules 129 and 132 of the Rules to summon any relevant record which may be required for conducting investigation - since the respondent has expressed his inability to provide requisite data on account of certain inexplicable technical reasons, Authority finds it as a fit case for exercise of powers granted under the Rules to the DGAP to summon the record and recompute the profiteered amount - Authority directs DGAP to reinvestigate the matter and furnish report within three months: NAA

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IO No. 10/2020

JK Helene and Sai Kripa Pvt Ltd

IO No. 09/2020

Cloudtail India Pvt Ltd

++ GST - Anti-profiteering - Objections raised by the respondents have been found to be incorrect and untenable and hence the same cannot be accepted - final order to be passed after considering all other pleadings relied upon by the respondent and the applicants.

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IO No. 08/2020

Pearlite Real Properties Pvt Ltd

IO No. 07/2020

E-homes Pvt ltd

IO No. 06/2020

Himalaya Real Estate Pvt Ltd

IO No. 05/2020

M/s Loreal India Pvt Ltd

IO No. 04/2020

HCBS Pvt Ltd

IO No. 03/2020

Pivotal Infrastructures Pvt ltd

IO No. 02/2020

ITC Ltd

IO No. 01/2020

Wheelabrator Alloy Castings Pvt Ltd

++ Report filed by the DGAP cannot be accepted by the Authority and hence the following cases are remanded to the DGAP to cause further investigation as per the provisions of rule 133(4) of the CGST Rules on the issues mentioned in the Internal Order.

++ DGAP is directed to cause further investigation and submit detailed reasoned report as per the provisions of Rule 129(6) of the CGST Rules, 2017. The respondents are directed to extend full co-operation to the DGAP during the course of investigation.

++ Copy of the Internal Order is to be sent to, both the applicants and the respondent.

ARTICLES

GST - An agenda for reforms - Part - 75 - Transitional credit - A judgment and retrospective amendment

E-invoicing & GST: A Primer

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GST - An agenda for reforms - Part - 74 -Anti-profiteering - Complaint sans statutory basis

The Cob(Web) by Shailendra Kumar

Taxation & Marketability? - Vivad Se Vishwas Scheme in dire need of marketing!

New Return - RET-1 - Taxpayers would 'bless' if GST Council defers it!

JEST GST by Vijay Kumar

No place for 'place of supply' in Advance Ruling

Penny wise