2020-TIOL-GST-343, Dated: Friday, April 24, 2020

HIGH COURT CASES

2020-TIOL-858-HC-AHM-GST

Raja Rajeswari Sales Corporation 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 and the proceedings, as on date, are at the stage of show cause notice, u/s 129 of the CGST Act and which proceedings shall go ahead in accordance with law - It shall be open for the writ applicant to point out the pronouncement of this Court in the case of Synergy Fertichem Pvt. - 2019-TIOL-546-HC-AHM-GST and in particular rely on the observations made by this Court in paragraph Nos.99 to 104 of the said judgment - It is now for the applicant to make good his case that the show cause notice, issued in GST-MOV- 10, deserves to be discharged - Petition disposed of: High Court [para 5 to 7]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-857-HC-AHM-GST

Shree Radhe Steel Vs State Of Gujarat

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-856-HC-KERALA-GST

Exide Industries Ltd Vs ASTO

GST - Petitioner challenges order of detention made under Section 129(1) [Ext.P1] and notice issued under Section 129 (3) of the Act [Ext.P2] - Petitioner contends that the subject matter of Exts.P1 and P2 is fully compliant with all the requirements of the Act but the petitioner was not in a position to demonstrate at the time of inspection or within the time given by the authorities about the correctness of contents of documents with reference to goods transported, therefore, the proceeding are not warranted and illegal.

Held: Issues raised are at preliminary stage and Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage - Petition is disposed of with directions that petitioner submits to respondents bank guarantee for the tax and penalty amount payable as per Ext.P2 and applies for release of goods by enclosing a copy of this order within two days; respondents shall release the detained goods within twelve hours from date and time of receipt of bank guarantee which shall be kept valid for six weeks; that respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner, pass and communicate the order within four weeks; if respondent fails to pass the order as directed, i.e. within four weeks, the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks: High Court [para 5]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-855-HC-KERALA-GST

Sanskruti Motors Vs ASTO

GST - Petitioner challenges order of detention made under Section 129(1) [Ext.P4] and notice issued under Section 129 (3) of the Act [Ext.P5] - Petitioner contends that the subject matter of Exts.P4 and P5 is fully compliant with all the requirements of the, therefore, the proceedings are not warranted and illegal.

Held: Issues raised are at preliminary stage and Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage - Petition is disposed of with directions that petitioner submits to respondents bank guarantee for the tax and penalty amount payable as per Ext.P5 and applies for release of goods by enclosing a copy of this order within two days; respondents shall release the goods detained within twelve hours from date and time of receipt of bank guarantee which shall be kept valid for six weeks; that respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner, pass and communicate the order within four weeks; if respondent fails to pass the order as directed, i.e. within four weeks, the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks: High Court [para 5]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-850-HC-JHARKHAND-GST

Mahadeo Construction Company Vs UoI

GST - Issues before the High Court are - whether interest liability u/s 50 of the Act can be determined without initiating any adjudication process either u/s 73 or 74 in the event of an assessee raising dispute towards liability of interest and, whether recovery proceedings u/s 79 can be initiated for recovery of interest without initiation and completion of adjudication proceedings.

Held: Fact remains that on GSTN portal, due date for filing monthly return for February and March 2018 was reflected as 31st March 2019 and, admittedly, the petitioner filed its returns for the said months much prior to the said date - after noting this fact, the Court vide order dated 24.07.2019 stayed the operation of the garnishee notices contained in the order dated 22.05.23019 and directed the respondents to file their counter affidavit - Court is not expressing any opinion as to whether the petitioner was liable to pay interest or not, which, in the opinion of the Court is required to be adjudicated first by the Revenue authorities - A bare reading of the provisions of s.39(1) r/w s.39(7) of the Act would reveal that a dealer is liable to pay tax within 20th day of the succeeding month for which the dealer was liable to file his monthly return - A reading of sub-section (2) of the section 50 itself would reveal that interest payable u/ss (1) of s.50 is required to be calculated in such manner, as may be prescribed - a bare reading of s.73(1) of the Act would reveal that if tax has not been paid or has been short paid, a notice is required to be served by the proper officer on the assessee not only requiring him to show cause as to why the tax be not recovered from it but also specifying in the notice the interest payable u/s 50 also to be recovered along with penalty - Thus, if there is a short payment of tax or non-payment of tax, a notice is required to be issued even for recovery of interest u/s 50 of the Act - question would, therefore, arise that if an assessee, who has already paid tax, but has paid the same after some delay, would fall within the expression ‘tax not being paid or short paid' - aforesaid issue has already been answered by this Court in the case of Godavari Commodities Ltd. [2019-TIOL-2818-HC-JHARKHAND-GST] and where it has been held that if a tax has not been paid within the prescribed period, the same would fall within the expression ‘tax not paid' as mentioned u/s 73 of the Act; that natural corollary is that if an assessee has allegedly delayed in filing his return, but discharges the liability of only tax on his own ascertainment and does not discharge the liability of interest, the only recourse available to the proper officer would be to initiate proceedings u/s 73(1) of the Act for recovery of the amount of ‘short paid' or ‘not paid' interest on the tax amount - it is not true that liability of interest u/s 50 of the CGST Act is automatic but the said amount of interest is required to be calculated and intimated to the assessee - if an assessee disputes the liability of interest i.e. either disputes its calculation or even the leviability of interest, then the only option left for the assessing officer is to initiate proceedings either u/s 73 or u/s 74 of the Act for adjudication of the liability of interest - Madras High Court decision dated 19.12.2019 in Daejung Moparts Pvt. Ltd. [2020-TIOL-358-HC-MAD-GST] refers - insofar as the question as to whether garnishee proceedings u/s 70 can be initiated for recovery of interest without adjudicating the liability of interest, when the same is admittedly disputed by the assessee, it is already held in the preceding paragraphs that though the liability of interest is automatic but the same is required to be adjudicated in the event an assessee disputes the computation or very leviability of interest, by initiation of adjudication proceedings u/s 73 or u/s 74 of the Act and till such adjudication is completed by the proper officer, the amount of interest cannot be termed as an amount payable under the Act or the Rules - therefore, without initiation of any adjudication proceedings, no recovery proceeding u/s 79 of the Act can be initiated for recovery of the interest amount - accordingly, impugned order dated 08.03.2019 issued by respondent no. 3 (Superintendent, Daltonganj Range) is hereby quashed/set aside and further, garnishee notice contained in the order dated 22.05.2019 issued u/s 79 of the Act to the Banker of petitioner for recovery of interest amount of Rs.19,59,721/- is also quashed/set aside - it shall be open to the respondent authorities to initiate appropriate adjudication proceedings u/s 73/74 of the Act against the petitioner assessee and determine the liability of interest, if any, in accordance with law after giving due opportunity of hearing to the petitioner - Writ application is allowed: High Court [para 18 to 25]

- Application allowed: JHARKHAND HIGH COURT

AAAR CASES

2020-TIOL-21-AAAR-GST

Hindustan Coca Cola Beverages Pvt Ltd

GST - AAR had held that Fanta Fruity Orange manufactured and supplied by applicant is classifiable under Tariff Item 2202 99 90 (as Other non-alcoholic beverages, other than tender coconut water) and attracts GST @18% as per Sl. No. 24A of Schedule III of 1/2017-CTR; that Fanta Fruity Orange would not fall for classification under 2202 10 as Aerated waters (since Carbon dioxide is added only as a preservative) but under 2202 99; that it is not a 'Fruit pulp or fruit juice based drinks' and would, therefore, not fall under Tariff Item 2202 9920 or under 2202 9910 or 2202 9930; that even by applying 'common parlance test', the product "Fanta Fruity Orange" would not fall under TI 2202 9920 since the industry refers to the same as 'fruit pulp or fruit juice based drinks' differently than the 'fruit juice concentrate based drinks' - appeal to AAAR.

Held: There is nothing in the Customs Tariff or Explanatory Notes of HSN pertaining to Heading 2202 to suggest that the product containing Carbon Dioxide as preservative only would not fall under Tariff Sub Heading 2202 10 - On the contrary, Explanatory Notes of HSN for Sub Heading 2202 10 specifically mentions that the products of this Sub heading are often aerated with carbon dioxide gas - Therefore, the product 'Fanta Fruity Orange' is not excludible from Sub Heading 2202 10 on the ground that the product contains Carbon Dioxide as preservative only - view of the GAAR that the product 'Fanta Fruity Orange' do not fall under Tariff Item 2202 99 20 is confirmed - Therefore, product 'Fanta Fruity Orange' manufactured and supplied by applicant is classifiable under Sub heading 2202 10 and GST rate of 28% (CGST 14% + GGST 14%) as per S. No. 12 of Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended and GST Compensation Cess rate of 12% as per S. No. 2 of Schedule of Notification No. 1/2017-Compensation Cess (Rate) dated 28.06.2017, are applicable to the said product: AAAR

- Appeal rejected: AAAR

2020-TIOL-20-AAAR-GST

KM Trans Logistics Pvt Ltd

GST - Applicant had sought a ruling as to whether transportation by own vehicles on the basis of invoices and e-way bill without issuing LR/GR will be covered under exempted supply/non-GST supply; whether rule 42 of the Rules, 2017 will also apply in case where there is GST and non-GST supplies and there is a common consumption of inputs and input services - AAR held that transport services provided to various manufacturers of motor vehicles for carrying their vehicles from factory to various cities in India where authorised dealers are located is a Goods Transport Agency (GTA) Service under the CGST Act, 2017; that as per the definition of GTA in 11/2017-CTR, “GTA” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called; that where a consignment note is issued, it implies that the lien on the goods has been transferred and the transporter of the goods becomes responsible for the goods till it's safe delivery to the consignee - further, the applicant is carrying supplier's invoice and e-way bill while providing transport service and the e-way bill format as per 12/2018-CT indicates that the Transport document number is nothing but goods receipt number (GRN) and without mentioning the same, E-way bill cannot be generated, therefore, it is mandatory for the GTA to issue the transport document; that, therefore, the applicant is a GTA service provider under the Act and is not exempted from paying GST inasmuch as they are liable to pay GST under 11/2017-CTR r/w 13/2017-CTR - insofar as applicability of rule 42 is concerned, where the goods or services or both are used by the registered person, partly for effecting taxable supplies including zero-rated supplies and partly for effecting exempt supplies, the amount of credit shall be restricted to so much of the input tax as attributable to the said taxable supplies including zero-rated supplies as per provisions and procedure prescribed u/s 17(2) of the Act read with rule 42 of the Rules, 2017 - appeal filed to AAAR contending that finding of the Advance Ruling that without issuing Consignment note/LR/GR goods cannot be transported or E-Way Bill cannot be issued is wrong as practically on GST portal the E-Way Bills are being generated without having consignment note / LR/GR; that since there is no consignment note issued the services are out of the purview of GST and will categorize as non taxable service/non-GST supply.

Held: Appellant is claiming on its official website that they are serving about 90% of car makers viz. Maruti Suzuki, Toyota, Tata, Hyundai, Mahindra etc., are having Fleet Size of 1250, 35 branch offices, 32 loading stations, 80 service support - From this, it is clear that the appellant transporter is not from unorganized sector of transporters and has a vast network all over India for transportation of goods - They are providing services to various manufacturers of motor vehicles involving transportation of motor vehicles which are carried from the factory to the various cities in India where the authorised dealers are located - In this process of transportation, two types of services either by way of activity described as goods transport agency services or by way of rental services of transport vehicles can be provided - In the instant case of the appellant, if the lien of the goods is transferred and the appellant becomes responsible for the goods till its safe delivery to the consignee, the services wall be classifiable as goods transport agency services and issuance of consignment note or its non-issuance does not make any difference so far as the nature of the activity carried out by them is concerned - Mere non-issuance of the consignment note in such cases does not make them entitled for exemption from payment of GST, however, if the vehicles are provided to the client on rental for use as per their requirement, the services will be classifiable as 'rental services of transport vehicles' - format of e-way bill, in whatever manner designed or amended, is not relevant for deciding the classification of the activity carried out by appellant - The nature of activity carried out by them is independent of the format of e-way bill rather e-way bill format has no connection whatsoever, with the nature of activities undertaken - In any case, mere non-requirement of mentioning of any detail in E-way Bill does not affect liability of payment of GST on any service unless the service has been exempted through an exemption Notification issued by the Government, hence, contentions of the appellant concerning format of e-way bill are not relevant to the instant issue - It is concluded that the services to be provided by the appellant will be liable to payment of GST as specified under Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended) read with exemption Notifications, under the services relating to transportation of goods or rental services of transport vehicle including supporting service, depending upon the exact nature of activity to be carried out by them - Appeal rejected: AAAR [para 14 to 17]

- Appeal rejected: AAAR

2020-TIOL-19-AAAR-GST

National Dairy Development Board

GST - AAR held that National Dairy Development Board would qualify as 'governmental authority' under GST Act if it fulfills the condition 'with ninety percent or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W; that Renting of immovable property provided by NDDB to an educational institution would be exempted under sr. no. 4 of 12/2017-CTR if it so qualifies - Appeal to AAAR.

Held: Main issue involved in this case is whether the exemption provided vide Sr. 4 of Notification No. 12/2017-Central Tax (Rate) is admissible to appellant for providing service of 'Renting of Immovable Property' to 'Anandalaya Educational Society' - As the appellant has not submitted anything evidencing whether it has been set up or established to carry out any function entrusted to a Municipality under Article 243W of the Constitution or to a Panchayat under article 243G of the Constitution, it is not possible to decide whether the appellant fulfills the said condition or otherwise - As a result, in absence of sufficient information provided by the appellant, AAAR Member Ajay Jain observed that he is unable to determine whether M/s. NDDB is "Governmental Authority" as per definition of "Governmental Authority" provided vide clause (zf) of Para 2 of Notification No. 12/2017-Central Tax (Rate), or otherwise - 'Renting of Immovable Property' is not a function entrusted to a municipality under article 243W of the Constitution, therefore, services by NDDB by way of 'Renting of Immovable Property" cannot be said to be service in relation to any function entrusted to a municipality under article 243W of the Constitution; therefore, held that the exemption provided vide Sr. 4 of Notification No. 12/2017-Central Tax (Rate) is not admissible to appellant for providing service of 'Renting of Immovable Property' to 'Anandalya Educational Society' - Member, AAAR, Dr P D Vaghela differs with the order of AAAR Member Ajay Jain inasmuch as it is observed that the appellant has not filed appeal challenging the ruling of Authority for Advance Ruling on "renting of immovable property service provided by National Dairy Development Board to an educational institute would be exempted under Sr. No. 4 of Notification No. 12/2017-Central Tax (Rate) and corresponding State Tax Notification, if it qualifies as "Governmental Authority" and, therefore, it cannot be decided in this appeal on issue which is not subject matter of this appeal; that Member, AAAR, Dr P D Vaghela agrees with the findings of the Advance Ruling authority that documents are not submitted by the appellant, substantiating the claim of appellant that it is a governmental authority as required by Notification No. 12 of 2017, Central Tax (Rate); that the ruling of the advance ruling authority or this ruling doesn t debar the appellant to prove his case before the jurisdictional officer - that, as the members of appellate authority are differing, section 101 (3) of CGST Act, 2017 shall apply inasmuch as it shall be deemed that no advance ruling can be issued in respect of the question under the appeal or reference: AAAR [para 13.6, 13.7, 14.3, 14.4, 15, 16, 17]

- Difference of Opinion: AAAR

AAR CASES

2020-TIOL-81-AAR-GST

Omsai Professional Detective And Security Services Pvt Ltd

GST - Best judgment assessment u/s 62 can be made only when the dealer fails to file the return specified in Section 39(1) of the Act, read with Rule 61(1) of the Rules, that is the return in Form GSTR 3 - Nothing else - Return in Form GSTR-3B is not to be considered as the return in lieu of return in Form GSTR-3: Appellate Authority

- Appeal partly allowed: AAR

2020-TIOL-80-AAR-GST

Satyaja Infratech

GST - Activity of purchase of land and selling the said land by converting it into integrated residential sub plots of varying sizes under the name of "Bliss Homes" with basic facility is liable to GST since the activities will fall under clause (b) of paragraph 5 of Schedule-II of Gujarat Goods and Services Tax Act and Central Goods and Services Tax Act - such activities attract 9% CGST and 9% SGST as per serial no 3 of Notification No. 11/2017 Central Tax (Rate) : AAR

- Application disposed of: AAR

2020-TIOL-79-AAR-GST

Satyesh Brinechem Pvt Ltd

GST - Applicant is a private limited company engaged in the manufacture and supply of salt and bromine chemicals - They are setting up a Greenfield project for manufacture of salt and bromine chemicals in the Greater Rann of Kutch in the State of Gujarat - The salt manufactured by the applicant is required to be exported as per condition and undertaking given to the Govt. while taking land on lease basis, therefore the manufactured salt is Zero rated supply u/s. 16 of the IGST Act - Input tax credit of GST paid on goods and services used to construct "bunds" is admissible to the applicant M/s. Satyesh Brinechem Private Limited, provided that the bunds are used for making zero rated supplies and fulfill the conditions u/s 17 of the CGST which are necessary for treating the bunds as "plant and machinery": AAR

Application disposed of: AAR

2020-TIOL-78-AAR-GST

State Examination Board

GST - Activities of the State Examination Board, Gandhinagar of conducting various types of examinations for getting job of teacher for pre primary, primary and secondary school, for getting job as a teacher in Government/Grant-in-Aid School in standard 9 to 12, for getting a job as a Principal in Grant-in-Aid School, for being confirmed in service, for getting higher Scale, for getting promotion, for getting self employment as a painter, for getting self-employment, for getting jobs in various other fields, for scholarships, examination to get admission for study at Rashtriya Military College, Dehradun etc. are not exempt under Notification No. 12/2017-Central Tax (Rate) - benefit of exemption is not available to the State Examination Board under entry no. 66 (b)(iv) to the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 read with Notification No. 02/2018-Central Tax (Rate) dated 25.01.2018 as the exams conducted by the applicant are planned and conducted by the State Examination Board on its own accord and its not the services provided to an educational institution - State Examination Board is, therefore, liable for registration as provided under Section 22 of CGST Act, 2017 as it does not fall under Section 23(a) and is required to pay tax as applicable: AAR

- Application disposed of: AAR

2020-TIOL-77-AAR-GST

All India Disaster Mitigation Institute

GST - Activities of the applicant relating to disaster prevention, disaster mitigation and disaster management are activities relating to "preservation of environment" - Thus, the activities of the applicant are considered as charitable activities and, hence, activities of the applicant, being registered under Section 12AA of the Income Tax Act, 1961, exempt from tax under the GST Acts, by virtue of Entry No. 1 of the Notification No. 12/2017-Central Tax (Rate) - Consequently, the applicant is not liable to registration in respect of charitable activities relating to preservation of environment which attracts nil rate of GST, by virtue of Section 23(1) (a) of the CGST Act, 2017: AAR

- Application disposed of: AAR

2020-TIOL-76-AAR-GST

Flint Group India Pvt Ltd

GST - Technical Varnish and Medium used in printing industry is correctly classifiable under HSN 3208: AAR

- Application disposed of: AAR

2020-TIOL-75-AAR-GST

Gurukrupa Hospitality Services

GST - On perusal of the copy of the agreement submitted by the applicant, it is evident that the service recipient has engaged the applicant for running of the canteen for their workers / employees - The rates for the meal, snacks, tea have been fixed by the recipient - The menu is required to be decided by the canteen committee of the recipient - It is, therefore, evident that the applicant, who is caterer, is providing service from other than his own premises to the recipient, consequently, the nature of service provided by the applicant is that of "outdoor catering service" and it is not in the nature of service provided by a restaurant, eating joint including mess, canteen - Clarification issued, vide Circular No. 28/02/2018-GST dated 08.1.2018, is not applicable - Up to 25.07.2018, the said supply of services is covered under Sr. No. 7(v) of the Table to the Notification No. 11/2017-Central Tax (Rate) attracting GST @ 18% (CGST:9% + SGST: 9%) and thereafter covered under Sr. 7(i) of the Table to Notification No. 11/2017-Central Tax (Rate) attracting Goods and Service Tax @ 5% (CGST: 2.5% + SGST: 2.5%): AAR

- Application disposed of: AAR

2020-TIOL-74-AAR-GST

Prayagraj Dyeing And Printing Mills Pvt Ltd

GST - Bagasse based Particle Board, which is a composition of 75% of bagasse, 25% of wood particles and 5 kgs of resins, will fall under entry at Sr. No. 137A in Schedule III to the Notification No. 01/2017- Central Tax (Rate) and attract GST rate of 18% (CGST: 9% & SGST: 9%): AAR

- Application disposed of: AAR

2020-TIOL-73-AAR-GST

Superstar Amusement Pvt Ltd

GST - SAC for the supply of amusement services in Amusement Park like merry-go rounds and other rides shall be 99969/999691 and rate of tax applicable to the services will be 18% GST: AAR

- Application disposed of: AAR

2020-TIOL-72-AAR-GST

Universal Import Export

GST - ‘Mango Pulp' is specifically classified under Chapter sub-heading no. 0804 50 40 of Customs Tariff Act, 1975 - However, the classification of item, ‘Mango Pulp' is not specified in GST Tariff, therefore, ‘Mango Pulp' will fall under the residuary entry No.453 of Schedule III of the Notification No . 01/2017 - Central Tax (Rate) dated 28.06.2017 and attracts rate of GST @18% (CGST:9% & GGST: 9%): AAR

- Application disposed of: AAR

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