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SUPREME COURT CASE
2020-TIOL-94-SC-GST
Sandeep Goyal Vs UoI
GST - Allegation against the petitioner is that he has created about 555 fake firms and has committed fraud to the tune of Rs.74 crores - maximum punishment to be imposed on the petitioner, if convicted, is five years - It is also not in dispute that the petitioner has already undergone one year and eight months imprisonment; that some of the accused are released on bail - Having regard to the totality of facts and circumstances, it is directed that State shall make endeavour to complete the investigation within three months and in case the investigation is not completed within three months, the petitioner shall be released on bail by the Trial Court by imposing appropriate terms and conditions - In case, the investigation is completed and the report is filed within three months, it is open for the petitioner to move the trial court for bail - If such an application is filed, the same shall be considered on its own merits by the trial Court - Special Leave Petition is disposed of: Supreme Court
- Petition disposed of: SUPREME COURT OF INDIA
HIGH COURT CASES
2020-TIOL-946-HC-RAJ-GST
JVS Foods Pvt Ltd Vs UoI
GST - Petitioner has placed reliance on an order dated 03.05.2019 passed by this Court in the case of Chambal Fertilisers and Chemicals Limited Vs. Union of India- D.B.Civil Writ Petition No.7091/2019 wherein similar challenge to the constitutional validity of Section 96(2) of the Rajasthan Goods and Service Tax Act, 2017 and Section 96 of the Central Goods and Service Tax Act, 2017 has been raised and while issuing notice by this Court, it is directed that no coercive steps shall be taken against the petitioner - Bench, therefore, directs that the record of the Chambal Fertilizers and Chemicals Ltd. (supra) be called for and tagged with the present petition - Notice to be issued and matter to be listed on 08.06.2020: High Court [para 7, 8, 10]
- Notice issued: RAJASTHAN HIGH COURT
2020-TIOL-926-HC-AHM-GST
Shiv Agro Vs State Of Gujarat
GST - Writ applicant has prayed for writ of mandamus, order seeking quashing and setting aside the action of respondent to stop the goods and conveyance after declaring that the said actions of the respondent are absolutely illegal, unlawful; to release the goods and conveyance etc.
Held: Bench notes that the order in form GST MOV-11 has already been passed by the authority concerned and which is suggestive of the fact that the final order of confiscation of the goods and conveyance has been passed, therefore, Bench declines to interfere in the matter - Writ applicant is relegated to prefer a statutory appeal under Section 107 of the G.S.T. Act before the appellate authority - Pending the appeal that may be filed by the writ applicant, it shall also be open for the writ applicant to prefer an application under Section 67(6) of the Act for the provisional release of the goods upon execution of a bond and furnishing of a security or on payment of applicable tax, penalty and interest payable and if any such application is filed, the authority concerned shall look into the same and pass an appropriate order in accordance with law within a period of one week from the date of receipt of such application: High Court [para 5, 6]
- Applications disposed of: GUAJRAT HIGH COURT
2020-TIOL-925-HC-AHM-GST
Vasu 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-2950-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-924-HC-RAJ-GST
Shree Motors Vs UoI
GST - S.140 of the CGST Act, 2017, Rule 117 of the CGST Rules - Writ petitions have been filed by the petitioners aggrieved by non filing of Form GST TRAN-1 at common portal allegedly because of various system error/technical glitches at the portal throughout the period during which the Form was available, which resulted in denial of transitional CENVAT credit - It is submitted that the provisions of Section 140 of the CGST Act is a complete Code in itself and the same does not provide for eligibility subject to any further conditions.
Held: Petitioners in the earlier round of litigation initially challenged the validity of provisions of Section 140 of the CGST Act and Rule 117 of the CGST Rules, however, in view of the fact that validity was upheld, the matter was transmitted to the Single Judge who by order dated 21.11.2019 disposed of the writ petitions by permitting the petitioners to submit online Form GST Tran-1 subject to furnishing a proof that they had tried to upload Form GST Tran-1 prior to 27.12.2017 and such attempt failed due to technical glitches on the common portal; that the GST Council was required to issue their requisite certificate within a period of 15 days if the petitioners' assertion was found correct and in case the petitioners were not entitled for the requisite, the Council was required to pass an order giving reasons - GST Council referred to the ITGRC meeting, wherein, cases of the petitioners were considered and indicated that their cases fell in B-1 category and B-1 category has been described as 'as per GST system log, there are no evidences of error or submission/filing of Tran-1' - In view of the fact that this Court while deciding the writ petitions filed by the petitioners had laid down the specific parameters for grant of relief to the petitioners and it has been found by the respondents as a fact that there were no evidences of error or submission/filing of Form GST Tran-1 by the petitioners, the petitioners apparently are bound by the said outcome and, as such, are not entitled to any relief - The theory of vested rights and the implication of limitation on the said aspect of vested right has been considered by Hon'ble Supreme Court in the case of Osram Surya (P) Ltd. (2002-TIOL-64-SC-CX), wherein, while considering the proviso II to Rule 57G of the Act of 1944 it was laid down that by providing limitation, the statute has not taken away any of the vested rights, which accrue to the manufacturers and what is restricted is the time, within which, the manufacturer has to enforce that right and, therefore, once the provisions of Rule 117 of the CGST Rules, which prescribe limitation has been upheld, the plea raised pertaining to the denial of vested right on account of petitioners failing to submit/file Form GST Tran-1 in time cannot be countenanced - no case for interference as sought by the petitioners is made out in the present writ petitions - The petitions are accordingly dismissed: High Court
- Petitions dismissed: RAJASTHAN HIGH COURT
2020-TIOL-913-HC-AHM-GST
Paresh Nathalal Chauhan Vs State Of Gujarat
GST - Application is filed seeking bail under Section 439 of the Code of Criminal Procedure, 1973 in respect of the offence punishable under Section-132(1)(b)(c) of the CGST Act - principal allegation against the petitioner is of his having obtained the tax credit to an extent of about Rs. 60 Crores through fictitious firms allegedly established by him in connivance with other persons who, at the moment, are not arraigned as accused - The maximum punishment for the offence is five years imprisonment - quantum of the sentence, recording of the statements of as many as 35 beneficiaries of the transactions, recovery of Rs. 14 Crores from them, the quantum of the amount involved, non-arrest of the persons allegedly conniving with the petitioner in the commission of offence as also heart ailment of the petitioner i.e. insertion of two stents in his heart are pressed into service as grounds for admitting the petitioner to bail.
Held: In the instant case, it appears that the case would require thorough investigation with the possibility of addition of more accused to the array; inasmuch as, as many as 406 summonses have been issued and 92 beneficiary firms are under scrutiny - Complaint might have been filed against the petitioner in compliance with Section 167 of Cr.P.C, that would however not preclude the investigating agency to investigate into what could be the huge racket and under such circumstances placing the petitioner out of jail would be potential threat to the investigation; inasmuch as, the manipulation of the evidence at the hands of the petitioner cannot be ruled out - The loss of Rs. 60 Crores to the public exchequer so far cannot be considered as a small amount - It appears that it is only owing to timely detection of the crime that the loss so far is Rs. 60 Crores; it would have been much-much more in absence of detection of the crime - It is not as if the petitioner stopped at Rs. 60 Crores; in all probability he would have continued the racket in absence of its detection - Therefore, what is relevant is not the quantum, but well-designed pre-meditated plan floated by the petitioner to loot the public exchequer - It may be true that as on date the person conniving with the petitioner might not have been arraigned as accused or arrested; but then it would be pre-mature to make any further comment on the said aspect as investigation is under way and it is at crucial stage - there is nothing to indicate the serious ill-health of the petitioner; needless however to say that in case of necessity, necessary medical help would be provided to the petitioner - application fails and is dismissed: High Court
- Application dismissed: GUAJARAT HIGH COURT
2020-TIOL-910-HC-RAJ-GST
Sandeep Goyal Vs UoI
GST - Petition is filed u/s 439 Code of Criminal Procedure, 1973 seeking regular bail in F.I.R. No.15/2018, registered at Police Station DGGI, GST, Jaipur, Rajasthan for offence under Sections 132(1)(b)(c)(d)(f)(i) and (i) read with Section Sub-section 5 of the CGST - Petitioner submits that his earlier bail petition was dismissed as bail petition filed by co-accused Himani Munjal had been dismissed by this court; however, co-accused has been granted bail by Apex Court vide order dated 27.01.2020, therefore, the petitioner is also entitled to be granted bail; that the petitioner is already in custody for about one and a half years and maximum period of sentence that can be awarded in the case is five years.
Held: Prosecution case is that the petitioner and co-accused by creating fake firms, have issued invoices involving tax amount of more than Rupees Seventy Four Crores; that the firms were misused for evading GST input taxes by the accused; that fake firms had been created in different States of the country; that although, co-accused Himani Munjal has been granted bail by the Apex Court, it appeared that she had been granted bail on account of the fact that she is a lady and has a young child to lookafter and, therefore, the case of the petitioner can be said to be on different footing - Keeping in view the seriousness of the allegations leveled against the petitioner, no ground for grant of bail to him is made out - Petition dismissed: High Court
- Petition dismissed: RAJASTHAN HIGH COURT
2020-TIOL-909-HC-MP-GST
Lalit Kumar Gandhi Vs State of MP
Miscellaneous/GST - Applicant is facing trial for offence punishable under Section 409, 467, 468, 120-B and 427 of the IPC - Application made by the applicant under Section 439 Cr.P.C. for grant of bail during trial - allegation is that applicant had received a sum of about Rs.6,52,00,000/- for supply of pesticides and insecticides and as against this he had made the supply worth Rs.4,30,00,000/- only and has not made the supply against the payment of Rs.2,22,50,000/- - Further allegation in the FIR is that though the complainant had approached the applicant for supply of pesticides against remaining payment but the same was avoided and the applicant had also misbehaved with the complainant and by making fabricated invoices and uploading the same on the GST portal, the applicant had committed further offence - applicant submits that the transaction was spread over a period of past three years and that the applicant himself had made a complaint at Police Station in Rajasthan on 30.7.2019 alleging that a sum of Rs.1,35,00,000/- is receivable by the applicant from the complainant but no action was taken – applicant further submits that allegation that the invoices have been fabricated is incorrect because the invoices have been shown in the GST Return-1, which tallies with GSTR-3.
Held: On the query made by the Court that if the applicant is ready to deposit Rs. 1 Crore with the trial Court and secure the remaining amount by furnishing the solvent security, the submission of applicant is that the amount of deposit be reduced by 50% - after considering the submissions and taking note of the prevailing Covid-19 infection and considering the fact that the applicant is in custody since 28.11.2019 and in the present scenario, conclusion of trial is likely to take time and also taking note of the submission of the applicant in respect of the condition relating to deposit of the amount, it is directed that the applicant-Lalit Kumar Gandhi will be released on bail subject to complying with the conditions as laid down: High Court
- Applicant disposed of: MADHYA PRADESH HIGH COURT
2020-TIOL-908-HC-ALL-GST
Shahzad Alam Vs State of UP
GST - Petitioner seeks quashing of the first information report dated 06.02.2020 registered as Case Crime No. 0350 of 2020 at P.S. Sihani Gate, District- Ghaziabad, under Sections 420, 424, 467, 468, 120-B I.P.C. and section 122/132 of the CGST Act, 2017 - allegation is that the petitioner along with others had set up bogus firms for the purpose of evading tax and had been preparing false documents/invoices.
Held: Above allegations have been made on the basis of search and seizure operations and the enquiry that followed - As to how the bogus tax invoices were used or were to be used would be determined on the basis of material collected during the course of investigation - submission of petitioners that there could be no registration of first information report without a specific order under the GST Code in respect of evasion of tax is not acceptable for the simple reason that the GST Code does not impliedly or explicitly repeals the provisions of Indian Penal Code or the Code of Criminal Procedure and, therefore, an offence punishable under the Indian Penal Code can very well be reported and investigated as per law - as the impugned first information report discloses commission of cognizable offence, the prayer to quash the first information report cannot be accepted - petition is dismissed without prejudice to the right of the petitioners to apply for bail: High Court [para 11, 12, 14, 15]
- Petition dismissed: ALLAHABAD HIGH COURT
2020-TIOL-907-HC-P&H-GST
Ireo Hospitality Company Pvt Ltd Vs UoI
GST - Principal challenge in the batch of five petitions is to the provisional attachment order dated 7th February, 2020 issued by the Principal Commissioner, CGST Commissionerate, Gurugram attaching the bank accounts of the Petitioner - interim orders passed in this regard on various occasions - Petitioner has on the hearing date handed over an affidavit dated 17th March, 2020 of the Petitioners setting out in a tabulated form the payments that were required to be made by the Petitioners as "essential business payments" upto 10th April, 2020 from the provisionally attached accounts for running their day to day operations and for "no other purpose" - Petitioner has further submitted that they expect further receipts of Rs.7 crores upto 10th April, 2020 on account of customer payments; that money received by IHCPL by way of borrowings, loans, OD facility and CC limit ought not to be attached by the Respondents and that the interim order already passed in this regard by this Court on 18th February, 2020 should be made absolute; that the Petitioners' have fixed deposits (FD) in various bank accounts to the tune of Rs.52,23,71,188/- which are under lien on account of security except FDR of Rs.1,43,31,817/- which is free from encumbrances; that petitioner undertakes that subject to the impugned orders being set aside, the time bound directions be issued to the respondents to pass fresh orders in accordance with law; that the Petitioners would ensure that no payments other than those set out would be made; that the petitioner would furnish to the respondents the receipts for the payments made to the vendors for completing the live residential and commercial projects of the Petitioners, accompanied by an affidavit explaining the details of such payment; that the Petitioners will maintain status quo with regard to FDs, both which are under lien as well as the FDR which is free from encumbrances.
Held: Binding down the Petitioners to the aforementioned statements made, the impugned order of provisional attachment of Petitioners' bank accounts are set aside upon the condition that fresh orders would be passed by the Respondent No.2 in that regard, in accordance with law, taking into account the submissions made by the Petitioners in these petitions, not later than 10th April, 2020; that the said orders will be communicated to each of the Petitioners not later than 12th April, 2020; that it will be open to the Petitioners, if aggrieved by such orders, to seek appropriate remedies in accordance with law - It is clarified that the interim order already passed by this Court on 18th February, 2020, viz., de-freezing the OD account of IHCPL, including any borrowings, terms loans, CC limits will continue - Petitions disposed of: High Court [para 15, 17, 18]
- Petitions disposed of: PUNJAB AND HARYANA HIGH COURT
2020-TIOL-903-HC-P&H-GST
RCI Industries and Technologies Ltd Vs UoI
GST - On 6th March, 2020, a summons was issued to the Managing Director, Mr. Rajeev Gupta asking him to appear on 16th March, 2020 at 11:00 a.m. in the office of Respondent No.1 - However, on the very next day i.e. 7th March, 2020 in the early hours at around 6:00 a.m., a search was conducted at the residential premises of Mr. Rajeev Gupta and a Panchnama was drawn up at his residential premises - One of the grievances in the present petition is that with the Petitioners being prepared to cooperate with the Respondents, there was no need for the Respondent to resort to an extreme step of conducting search and, that too, without following the due process under the CGST Act and, in particular, Section 67 thereof, which requires that the proper officer, not below the rank of Joint Commissioner, pursuant to an inspection carried out under Section 67(2) to have "reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place." - Counsel for Revenue submits that the authorized representative of Petitioner No.1, who had earlier appeared before the Respondents was not cooperative and was not providing the requisite information sought for by the Respondents; that a different officer of Petitioner No.1 appears on each occasion and is unable to provide requisite information - Counsel for Revenue also does not dispute that the procedure outlined under Section 67 of the Act was perhaps not resorted to while going in for a search of the residential premises of Petitioner No.2; that having issued summons to Petitioner No.2 to appear on 16th March, 2020, there was absolutely no need to resort to a search on the very next date.
Held: Court is of the considered view that the search proceedings which took place on 7th March, 2020 without the authority of law and cannot be sustained - The Panchnama drawn up on 7th March, 2020 is, therefore, quashed - At the same time, against the background, present litigation the Court cannot be unmindful of the need for investigation to proceed in accordance with law, for which purpose the cooperation of the Petitioners is essential - Notwithstanding that Petitioner No.2 may have earlier appeared pursuant to the summons issued and may have provided documents, it is directed that the Petitioner No. 2 will now appear before the Senior Intelligence Officer of the DGGSTI at Gurugram on 25th March, 2020 at 11 a.m; that he will be provided with the list of documents/ information that is required by the Respondents and Petitioner No.2 will cooperate in providing that information within a reasonable time to be provided to him by the Respondents - Court lists the present petition for further hearing on 17th April, 2020 - Till such time, no coercive steps of arresting Petitioner No.2 shall be resorted to - However, it is made clear that if the Court is satisfied that the Petitioners are not cooperating with the Respondents in providing the requisite documents/ information, the Court may be constrained to reconsider extending such protection to the Petitioner No.2: High Court [para 13 to 16]
- Matter listed : PUNJAB AND HARYANA COURT
2020-TIOL-902-HC-DEL-GST
Gillette India Ltd Vs UoI
GST - TRAN-1 - Petitioners' grievance in all the petitions is with respect to their inability to claim input tax credit on various eligible goods under Section 140 of the CGST Act, 2017.
Held: In terms of the transitional provisions, there was ambiguity and confusion amongst taxpayers - This was accentuated with technical glitches, which resulted in several taxpayers not being able to file the requisite Form GST TRAN-1 within time - This was the precise reason the last date was extended from time to time. However, despite extension, several taxpayers could not meet the extended deadline - Court has, in a series of cases, allowed the petitions filed by such taxpayers who could not file form GST TRAN-1 and were unable to take benefit of the transitional provisions with regard to the unutilized tax credit that they were not able to carry forward from the earlier regime to the present GST regime - In M/s Blue Bird Pure Pvt. Ltd ( 2019-TIOL-1564-HC-DEL-GST ), the court accepted the error in filling up of the requisite information to be inadvertent and directed the Respondents to either open the online portal or to enable the petitioner to file the rectified Form GST TRAN-1 electronically or accept the same manually - said decision has also been followed in M/s Aadinath Industries & Anr - 2019-TIOL-2289-HC-DEL-GST ; Lease Plan India Private Limited - 2019-TIOL-2164-HC-DEL-GST ; Godrej & Boyce Mfg. Co. Ltd. - 2019-TIOL-2421-HC-DEL-GST - The factual position in the present case is not any different and thus, Bench allows all petitions and directs the respondents to either open the online portal so as to enable the respective petitioners to file the Form TRAN-1 and TRAN-2 electronically, or to accept the same manually on or before 06.01.2020, if not already, filed pursuant to the interim order dated 01.05.2019 - Petitions allowed: HC [para 15 to 19]
- Petitions allowed : DELHI HIGH COURT
2020-TIOL-901-HC-DEL-GST
Bharti Airtel Ltd Vs UoI
GST - Paragraph 4 of CBIC Circular 26/26/2017-GST dated 29.12.2017 is not in consonance with the provisions of the CGST Act, 2017 - No cogent reasoning behind the logic for restricting rectification only in the period in which the error is noticed and corrected and not in the period to which it relates - There is no provision in the Act which would restrict such rectification - restriction, if any, that can be introduced by way of a Circular has to be in conformity with the scheme of the Act and the provisions contained therein - constraint introduced by paragraph 4 of the impugned Circular dated 29.12.2017 is arbitrary and contrary to the provisions of the Act - It is trite proposition of law that Circular issued by the Board cannot be contrary to the Act and the Government cannot impose conditions which go against the scheme of the statutory provisions contained in the Act - subordinate legislation must conform to the statute under which it is made and they cannot whittle down the benefits granted under statutory provisions - Respondents have failed to fully enforce the scheme of the Act and cannot take benefit of its own wrong of suspension of the statutory forms and deprive the rectification/amendment of the returns to reflect the ITC pertaining to a tax period to which the return relates to - Petitioner has a substantive right to rectify/adjust the ITC for the period to which it relates - rectification/adjustment mechanism for the months subsequent to when the errors are noticed is contrary to the scheme of the Act - Respondents cannot defeat the statutory right of the petitioner by putting in a fetter by way of the impugned Circular - Since the respondents could not operationalise the statutory forms envisaged under the Act resulting in depriving the petitioner to accurately reconcile its input tax credit, the respondent cannot today deprive the petitioner of the benefits that would have accrued in favour of the petitioner if, such forms would have been enforced - Petitioners cannot be denied the benefit due to the fault of the respondents - Respondents have also not been able to expressly indicate the rationale for not allowing the rectification in the same month to which the form GSTR-3B relates - respondents have admitted that the facility of form GSTR-2A was not available prior to 2018 and, as such, for the months July 2017 to September 2017 the scheme was envisaged under the Act was not implemented - refund of excess cash balance in terms of s.49(6) r/w s.54 does not effectively redress petitioner's grievance - only remedy that can enable the petitioner to enjoy the benefit of seamless utilisation of the input tax credit is by way of rectification of its return GSTR-3B - correction mechanism is critical to sustaining successful implementation of GST - Petitioner permitted to rectify form GSTR-3B for the period to which the error relates i.e. the relevant period from July 2017 to September 2017 - On filing of the rectified form GSTR-3B, Respondents are directed to verify the claim made therein, within a period of two weeks, and give effect to the same once verified - Petition allowed: High Court [para 20, 23, 24]
- Petition allowed: DELHI HIGH COURT
2020-TIOL-900-HC-DEL-GST
Brand Equity Treaties Ltd Vs UoI
GST - Rule 117 of the CGST Rules, 2017 whereby the mechanism for availing the credits has been prescribed is procedural and directory and cannot affect the substantive right of the registered tax payer to avail of the existing/accrued and vested CENVAT credit - procedure could not run contrary to the substantive right vested under sub-section (1) of section 140 of the Act - There is no consequence provided in Rule 117 of CGST Rules on account of failure to file GST TRAN-1 - Under the garb of framing Rules - which are subordinate legislation, the width of those limitations could not have been expanded as is sought to be done by introduction of Rule (1A) - in the absence of any consequence being provided under section 140 to the delayed filing of TRAN-1 form, Rule 117 has to be read and understood as directory and not mandatory - purport of the transitory provisions is to allow a smooth migration from erstwhile service tax regime to the new GST regime and the interpretation must be in consonance with the said purpose - Bench has, therefore, no hesitation in reading down the provision viz. Rule 117 as being directory in nature insofar as it prescribes the time-limit for transitioning the credit and, therefore, the same would not result in the forfeiture of the rights in case the credit is not availed within the period prescribed - This, however, does not mean that that the availing of CENVAT credit can be in perpetuity - Transitory provision, as the word indicates, have to be given its due meaning - Transition from pre-GST regime to GST regime has not been smooth and, therefore, what was reasonable in ideal circumstances is not in the current situation - in absence of any specific provisions under the Act, Bench would have to hold that in terms of the residuary provisions of the Limitation Act, the period of three years should be the guiding principle and thus a period of three years from the appointed date would be the maximum period for availing of such credit - Accordingly, since all the petitioners have filed or attempted to file form TRAN-1 within the aforesaid period of three years they shall be entitled to avail the Input Tax Credit accruing to them - They are thus, permitted to file relevant TRAN-1 form on or before 30.06.2020 - respondents are directed to either open the online portal so as to enable the petitioners to file the declaration TRAN-1 electronically or accept the same manually - Respondents shall thereafter process the claims in accordance with law - Bench is also of the opinion that other taxpayers who are similarly situated should also be entitled to avail the benefit of this judgment - Respondents are directed to publicise this judgment widely including by way of publishing the same on their website so that others who may not have been able to file TRAN-1 till date are permitted to do so on or before 30.06.2020 - All the petitions are allowed: High Court [para 21 to 24]
GST - The introduction of Sub rule (1A) in Rule 117 is a patchwork solution that does not recognise the entirety of the situation - It sneaks in an exception, without addressing situations taken note by the Bench - This exception, as worded, is an artificial construction of technical difficulties, limiting it to those existing on the common portal - It is unfair to create this distinction and restrict it to technical snags alone - It would be an erroneous approach to attach undue importance to the concept of “technical glitch” only to that which occurs on the GST Common portal, as a pre-condition, for an assessee/tax payer to be granted the benefit of Sub- Rule (1A) of Rule 117 - The purpose for which Sub-Rule (1A) to Rule 117 has been introduced has to be understood in the right perspective by focusing on the purpose which it is intended to serve - The purpose was to save and protect the rights of taxpayers to avail of the CENVAT credit lying in their account - That objective should also serve other taxpayers, such as the petitioners - The approach of the Government should be fair and reasonable - It cannot be arbitrary or discriminatory, if it has to pass the muster of Article 14 of the Constitution - The government cannot turn a blind eye, as if there were no errors on the GSTN portal - It cannot adopt different yardsticks while evaluating the conduct of the taxpayers, and its own conduct, acts and omissions - The extremely narrow interpretation that the respondents seek to advance, of the concept of “technical difficulties”, in order to avail the benefit of Sub Rule (1A), is contrary to the statutory mechanism built in the transitory provisions of the CGST Act - In order to avail the benefit, no restriction has been put under any provisions of the Act in terms of the time period for transition - The time limit prescribed for availing the input tax credit with respect to the purchase of goods and services made in the pre-GST regime, cannot be discriminatory and unreasonable - There has to be a rationale forthcoming and, in absence thereof, it would be violative of Article 14 of the Constitution - CENVAT credit which stood accrued and vested is the property of the assessee and is a constitutional right under Article 300A of the Constitution - same cannot be taken away merely by way of a delegated legislation by framing rules without there being any overarching provision in the GST Act: High Court [para 19]
- Petitions allowed: DELHI HIGH COURT
2020-TIOL-899-HC-AP-GST
Meripo Adiyya Vs State Of Andhra Pradesh
GST - Petitioner is engaged in the business of Iron & Steel - When the consignment was coming from Vidyanagar, Karnataka with all requisite documents through a vehicle, it was detained at Jeedimetla at 05:30 p.m. on 12.12.2019, and a notice under Section 129 (3) of the C.G.S.T. Act, 2017 was issued alleging ‘wrong destination' and directing payment of 9% of the Central Tax and 9% of State Tax and penalty equal to tax estimating the purchase value of Rs.11,14,579/- as against the actual tax invoice value of Rs.4,16,447/- - Petitioner submits that since the driver of the vehicle was pressurizing for release of the vehicle and moreover since there was a marriage in the family, he was forced to pay the amount mentioned in the notice dt.12.12.2019 - petitioner further submits that the said collection of tax and penalty by the respondents is through coercion and threat in spite of the fact that the consignment was covered by all the requisite documents; that when the goods were in transit in an inter-State sale, the respondents cannot detain the same and demand and collect the tax in the manner they have done which is arbitrary and without jurisdiction; that the reason ‘wrong destination' given by the respondents is not a good and sufficient reason for levying and collecting tax and penalty from the petitioner and the detention of the goods and the vehicle as well as collection of tax and penalty, is contrary to the provisions of G.S.T. Act, 2017.
Held: Admittedly, it is mentioned in the order of detention of the vehicle and the consignment carried thereon from Karnataka to Hyderabad issued under Section 129(1) of the CGST Act, 2017 that the reason for such detention is ‘wrong destination' - Under the Act, this is not a ground to detain the vehicle carrying the goods or levy tax or penalty - There is no material placed on record by the 1st respondent to show that any attempt was made by the petitioner to deliver the goods at a different place and sell in the local market evading CGST and SGST, because it was found at Jeedimetla - When the vehicle is being driven from Karnataka by a local driver of Karnataka it is perfectly possible for the driver to lose his way on account of being unfamiliar with the roads in the city of Hyderabad - When the IGST was already paid, the goods cannot be treated as having escaped tax and fresh tax and penalty cannot be imposed on petitioner - It is settled law that no tax shall be levied or collected except by authority of Law as per Article 265 of the Constitution of India - impugned action of the respondents in collecting the amount of Rs.4,16,447/- from the petitioner towards tax and penalty under the CGST and SGST Act, 2017 under threat of detention of the vehicle carrying the said goods for an absurd reason (‘wrong destination') when the vehicle in question carried all the proper documents evidencing that it was an inter-State sale transaction is clearly arbitrary, violative of Articles 14, 265 and 300-A of the Constitution of India - 1st respondent is directed to refund the same with interest at the rate of 6% per annum from 13.12.2019 till the date of payment within a period of three weeks - 3rd respondent shall also consider initiating disciplinary action against 1st respondent for the above conduct - Writ Petition is allowed as above with costs of Rs.25,000/- to be paid by 1st respondent: High Court [para 17, 18, 19, 21, 25, 27, 28, 29, 30]
- Petition allowed: ANDHRA PRADESH HIGH COURT
2020-TIOL-895-HC-AHM-GST
Kinjal Agro Spices 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-2950-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-894-HC-AHM-GST
Bhagwati Kiran Store 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-2950-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-893-HC-KERALA-GST
Josco Bullion Traders Pvt Ltd Vs Commissioner
GST - Seizure of the gold ornaments entrusted by the petitioners in both these writ petitions with the 6th respondent was consequent to a search of the premises of the 6th respondent conducted by the authorities under the SGST Act, who suspected that there was a possible evasion of tax by the 6th respondent - in the context of the present proceedings initiated against the 6th respondent, the goods entrusted to the 6th respondent by the petitioners herein, cannot be confiscated in terms of Section 130 of the SGST Act, since the confiscation under the said provision can only be in respect of supplies or receipt of any goods in contravention of any of the provisions of the Act, with an intent to evade payment of tax - There being no possibility of an evasion of tax in respect of the goods by the 6th respondent since the goods themselves belong to the petitioners, Bench is of the view that the goods entrusted by the petitioners with the 6th respondent and covered by the delivery chellan and issue vouchers aforementioned, cannot be the subject matter of a confiscation order under Section 130 passed in relation to the 6th respondent - Writ petitions disposed of by directing that the respondent authorities under the SGST Act shall complete the proceedings against the 6th respondent, within an outer time frame of one month - It is further made clear that on the expiry of the said period of one month, and irrespective of whether the proceedings against the 6th respondent are completed or not, the gold jewellery covered by the delivery challans and issue vouchers [14538.40 gms + 5348 gms] shall be released to the petitioners herein - To facilitate such release, Exts.P8 and P8(a) seizure orders and Exts.P9 and P9(a) prohibition orders, insofar as it relates to the gold jewellery entrusted by the petitioners herein to the 6th respondent, shall stand quashed - Writ petitions are disposed of: High Court [para 5, 6]
- Petitions disposed of: KERALA HIGH COURT
2020-TIOL-892-HC-AHM-GST
Brandthought Retail Pvt Ltd Vs State Of Gujarat
GST - By an ad-interim order, Court directed that the goods to be released and with this direction, the writ applicant availed the benefit of an interim order and got the goods released, on payment of the requisite amount - Bench is now called upon to adjudicate the legality and validity of the order passed by the authority in GST-MOV-11.
Held: Bench is convinced that the impugned order of confiscation is without any application of mind and not tanable in the law - In what state of circumstances the authority would be justified to invoke Section 130 of the Act, for the purpose of confiscation, is now explained in detail by this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat [Special Civil Application No.4730 of 2019] - 2019-TIOL-2950-HC-AHM-GST, paragraphs 99 to 104 refers - In view of the aforesaid, this Writ Application is allowed, in part - The impugned order of confiscation, in Form GST MOV-11, is hereby quashed and set aside and the matter is remitted to the respondent No.2 for fresh consideration, so far as the issue of confiscation is concerned and who is to bear in mind the principles explained by the High Court in the cited case - Writ Application stands disposed of: High Court [para 7 to 10]
- Application disposed of: GUJARAT HIGH COURT
AAR CASES
2020-TIOL-105-AAR-GST
Thinklab Edusoft Llp
GST - Applicant seeking ruling in the matter of availability of FIRC in respect of export proceeds with respect to services for funds received through service providers like Paypal, Worldremit etc.; documents required for export without payment of tax to prove receipt of proceeds in foreign currency in case FIRC is not receivable in case of such transactions; measure to be followed in case any refund proceeds are due to non-availability of FIRC or any other supporting documents being relied upon by department.
Held: As the question for which a ruling is sought by the applicant is outside the scope of s.97(2) of the CGST Act, 2017, therefore, their application is not admitted: AAR
- Application rejected: AAR
2020-TIOL-104-AAR-GST
Tiruchengode Agricultural Producers Cooperative Marketing Society Ltd
GST - As the issues on which the applicant has sought a ruling are already pending before the appropriate authority, the application is not admitted but rejected in terms of first proviso to s.98(2) of the Act, 2017: AAR
- Application rejected: AAR
2020-TIOL-103-AAR-GST
Arihant Plast
GST - Applicant had filed an application dated 02.03.2020 seeking to know the classification and tax rate in respect of Parts of sprinkler system etc. exclusively meant for use in sprinklers and drip irrigation system but sold in isolation as parts and not as a complete system - later, vide letter dated 06.03.2020, the applicant sought to revoke the application filed citing unavoidable circumstances.
Held: Authority, accordingly, allows withdrawal of application, as requested: AAR
- Application disposed of: AAR
2020-TIOL-102-AAR-GST
GK Enterprises
GST - Entry 3(iv)(a) of 11/2017-CTR allows concessional rate in case Works Contract is for construction of road, bridge, tunnel or terminal for road transportation for use by general public - Proposed activity carried out by the applicant is of shifting/erection of 11KV & LT lines only and the same cannot be categorised as construction of road as covered under Entry no. 3(iv)(a) of 11/2017-CTR - Activity proposed to be undertaken by the applicant does not fall under Entry no. 3(iv)(a) of 11/2017-CTR: AAR
GST - Proposed activity to be carried out by the applicant is of shifting/erection of 11KV & LT lines only - cost of the above said activity will be borne by the authority or by the entity owning such utility as such payment is not part of the main contract awarded to main contractor by NHAI - therefore, above activity to be undertaken by the applicant cannot be treated as a part of the main contract of NHAI and, therefore, the applicant who is supposed to execute an independent work cannot be treated as sub-contractor of main contractor - conditions mentioned in entry no. (ix) of 11/2017-CTR is not fulfilled: AAR
- Application disposed of: AAR
2020-TIOL-101-AAR-GST
Britannia Industries Ltd
GST - UHT Sterilized Flavoured Milk marketed under the brand name ‘Britannia Winkin' Cow Thick Shake' is not classifiable under Tariff Heading 0402/0404 but under CTH 2202 9930: AAR
- Application disposed of: AAR
2020-TIOL-100-AAR-GST
Latest Developers Advisory Ltd
GST - Application filed seeking a ruling by the Advance Ruling Authority in the matter of classification of goods/services and their liability to pay tax - however, by a letter dated 10.02.2020 the applicant informed the Authority that due to unfavourable market conditions and other commercial factors, the applicant is not in a position to proceed with their business activity of identifying land for constructing apartments and, therefore, they have taken a commercial call to not pursue the proposed business project in Tamil Nadu - Application is, therefore, disposed of as withdrawn: AAR
- Application disposed of: AAR
2020-TIOL-99-AAR-GST
Namakkal Agricultural Producers Cooperative Marketing Society Ltd
GST - As the issues on which Advance Ruling is sought by the applicant is already pending before the appropriate jurisdictional authority, application is not admitted and rejected in view of the provisions contained in the first proviso to section 98(2) of the Act, 2017: AAR
- Application rejected: AAR
2020-TIOL-98-AAR-GST
Law Weekly Journal
GST - Applicant seeks ruling on the following viz. (a) whether the assessee/dealer which publishes law journals in print and sells the same content that is in books in an electronic form in DVDs/CDs with a software to search and read it on computers and hand held devices come under the category of E-book so that it can avail the benefit of notification 13/2018-CTR dated 26.07.2018 in respect of E-book; (b) whether the liability on the sale of DVD/pen drive which contains printed version of law citations can be adjusted against the available ITC; (c) whether the liability on sale of e-book of printed version of law citation can be adjusted against the available ITC and, (d) whether the balance of ITC after adjustment accrued on the purchase of paper and other materials can be reversed while filing GSTR-9.
Held: Supply of DVD/CD and Dongle loaded with The Law Weekly Desktop Software is an optical media loaded with software and the license to use the software during the subscription period is a supply of service made along with the principal supply of goods in the said Composite supply - DVD/CD & Dongle being ‘Storage devices' containing the software is the principal supply - Such supply of DVD/CD with the loaded ‘The Law Weekly Desktop' Software along with its end user licence by applicant is a supply of goods classifiable under CTH 8523 8020 - As per the Explanation given in the Entry no. 22, clause (i) of notification 11/2017-CTR as amended, ‘e-books' are electronic version of a printed book falling under the Tariff Item 4901 and supplied online which can be read on a computer or a hand held device, while in the case at hand, the contents supplied in the form of DVD/CD is a software which is used to access content containing judgments of various fora, case laws, Acts etc. which provides for searching using a particular case number/period/Act/Court or a combination of the above - the DVD/CDs do not contain electronic versions of the journals but an executable software application and, therefore, do not fall under the Explanation of ‘e-book' given in the said entry - furthermore, in the case at hand, the initial supply of DVD/CD [8523] is supply of goods and hence the notification 11/2017-CTR does not have any application as it relates to supply of services - Supply of DVDs/CDs with ‘The Law Weekly Desktop' software along with end user licence and the supply of access to the online databse on the applicant's website are not eligible to avail the benefit of Entry at Sl. no. 22 of 13/2018-CTR - the other questions are not answered as the same are not in the ambit of Advance Ruling in view of provisions of s.97(2) of the CGST Act, 2017: AAR
- Application disposed of: AAR
AAR 2020-TIOL-97-AAR-GST
Swamy Kshethra Development Authority
GST - Auctioning of services for collection of vehicle entry frees, for tonsuring the heads of devotees, of the right to collect services and collect charges for vahana Pooja are supply of services classifiable under SAC 9997 - attract GST @18%, Sr. no. 35 of 11/2017-CTR: AAR
GST - Sales of Prasadam is exempt as per Entry no. 98 of 2/2017-CTR but if goods other than Prasadam are sold, they would be liable to tax at appropriate rates as applicable to those goods: AAR
GST - Renting of commercial shops - if rental value is less than Rs.10000 per month per shop such services are exempted in terms of Entry 13 of 12/2017-CTR but if the rent is more than Rs.10000 per month per shop then the same would be liable to tax at 18% under SAC 9972, Entry 16 of 11/2017-CTR: AAR
GST - Services of accommodation to pilgrims are exempt where charges are less than Rs.1000 per day per room - 12/2017-CTR: AAR
GST - Seva charges, Special Darshan charges is exempt from CGST and KGST as they are not covered under supply and also exempt as they are covered under Entry no. 13(a) of 12/2017-CTR: AAR
GST - Renting out Kalyanamandapams is exempt if the rental is less than Rs.10,000/- per day as per Entry 13(b) of 12/2017-CTR: AAR
GST - Entry fees for providing access to temple is liable to tax @18% GST as per Entry no. 11(ii) of 11/2017-CTR: AAR
GST - Future tendering of the right to collect charges and provide services is liable to tax @18% GST as per Entry no. 35 of 11/2017-CTR: AAR
- Application disposed of: AAR
2020-TIOL-96-AAR-GST
Biocon Ltd
GST - It is an admitted fact that the product being supplied by the applicant cannot be directly administered as injection - In the instant case the applicant supplies bulk drug Micafungin Sodium to their customers and hence the said drug becomes raw material to the said customers - the entry would have been 'Micafungin Sodium' had the intention of the government been to extend the benefit of concessional rate to the bulk drugs/raw material - However, the entry at Serial number 114 reads 'Micafungin sodium for injection' - Therefore, Sale of Micafungin sodium by DTA unit of applicant is not covered under Sr. no. 114 of List 1 to Entry no. 180 of 1/2017-CTR and, therefore, is not entitled for concessional rate of GST of @5%: AAR
- Application disposed of: AAR
2020-TIOL-95-AAR-GST
Anil Kumar Agrawal
GST - Incomes received towards (i) salary/remuneration as a Non-Executive Director of a private limited company, (ii) renting of commercial property, (iii) renting of residential property and (iv) the values of amounts extended as deposits/loans/advances out of which interest is being received are to be included in the aggregate turnover, for registration - income received from renting of residential property is to be included in the aggregate turnover though it is an exempted supply: AAR
GST - Dividend on shares, capital gains/losses on sale of shares are relevant to the shares (securities) and the income earned in this relation is nothing but application of money, therefore, this income earned out of shares, which are excluded from the definition of goods or services are not relevant to the aggregate turnover and hence are not required to be added to the aggregate turnover for registration under the GST Act: AAR
GST - Amounts received on maturity of the insurance policies are not relevant to the aggregate turnover and hence are not required to be added to the aggregate turnover for registration under the provisions of the GST Act: AAR
- Application disposed of: AAR
AAAR CASES
2020-TIOL-25-AAAR-GST
Rich Dairy Products India Pvt Ltd
GST - Applicant had sought a ruling on the issue of classification of goods manufactured by them inasmuch as whether Carbonated Fruit Juice falls under Fruit Juices or Aerated drinks - AAR observed that Statutory regulations require a minimum of 10% fruit juice to be called a Fruit Drink; that fruit juices and carbonated beverages with fruit drinks are distinct products in the FSSAI regulations and the products of the applicant are covered under Para 2.3.30 of the regulations and Category 14.1.4.1 in the food category system in Appendix A to these regulations; that the product is prepared by adding fruit juice, procured by the applicant (as per the input invoices submitted), to filter water - That it was evident that this large quantity of water results in diluted products which as per the Explanatory Notes get classified under CTH 2202; that as per the First Schedule to Customs Tariff, CTH 22021010 covers 'Aerated waters' and CTH 22021020 covers 'Lemonade' and CTH 22021090 covers 'Others' - applicant's products are not classifiable as 'Aerated Waters' under CTH 2202 1010, therefore, the products are either classifiable under CTH 22021020 or CTH 22021090 depending on the flavours - Therefore, 'Richyaa Damer Lemon' and 'Licta Lemon' are classifiable under CTH 2202 1020 and all others i.e. Richyaa Damer Cola', 'Licta Cola', Richyaa Damer Jeera Soda', 'Licta Jeera Masala', 'Richyaa Damer Orange' and 'Licta Orange' are classifiable as 'Other' under CTH 2202 1090 - appeal to AAAR - Order of AAR upheld and appeal rejected: AAAR
- Appeal rejected: AAAR
2020-TIOL-24-AAAR-GST
Siemens Ltd
GST - Applicant had sought a ruling as to whether the freight charges recovered by them from the customer without issuance of consignment note will be eligible for exemption from GST as per notification 12/2017-CTR, Sr. no. 18 - AAR held that c ontracts are linked by a ‘cross fall breach clause' deeming that any breach in either of the contracts to be a breach of the other contract as well providing the recipient with an absolute right to terminate both the contracts or claim damages - the 'cross fall breach clause' settles unambiguously that supply of goods, their transportation to the contractee's site delivery and related services are not separate contracts but only form part of an indivisible composite works contract supply - composite nature of the contract is clear from the fact that the first contract cannot be performed satisfactorily unless the goods have been transported and delivered to the contractor's site - inasmuch as the two contracts are not separately enforceable - therefore, the supply is in the nature of ‘Composite supply of Works Contract' which is a service and would be taxable @18% in terms of notfn. 11/2017-CTR - aggrieved by the ruling of AAR, applicant is in appeal before the AAAR.
Held: From a conjoined and harmonious reading of various clauses of Third and Fifth contract awarded to the appellant and their interdependency under the whole contract comprising of six contracts, it cna be safely concluded that the agreement for setting up of 320KV, 2 x 1000MW VS based HVDC Terminals and DC XLPE Cable system betweeen Pugalur and North Trichur associated with HVDC Bipole link between Western region and Southern region is a Composite Works Contract as defined u/s 2(119) of the CGST Act and taxable @18% and hence transportation services provided by appellant being part of the whole works contract will be taxable @18% as WCS and will not be eligible for exemption as provided at Sr. no. 18 of 12/2017-CR - Order passed by AAR is confirmed and appeal is dismissed: AAAR
- Appeal dismissed: AAAR
2020-TIOL-23-AAAR-GST
Segoma Imaging Technologies India Pvt Ltd
CGST - Segoma India, the appellant, takes photos of diamonds and uploads photos on software of Segoma, Israel - Segoma, Israel is also a subsidiary of R2Net based in USA and as per the agreement between R2Net and its customers, R2Net lists on the system only those diamonds that are photographed with R2Net Display technology - As per the terms of the agreement, customers of R2Net send their diamonds and or gem stones to be photographed to Segoma India who issues memo of receipt of diamonds to customers of R2Net - Appellant claimed that this transaction between Segoma, India and Segoma, Israel of providing photography services is a 'zero rated export supply' within the meaning of s.16 of the IGST Act and exempt from levy of tax and had accordingly sought a ruling from the Authority for Advance Ruling - AAR observed that t here is no need that the goods physically required for rendering services must be owned by the recipient of the services - on the other hand, it is sufficient for the recipient to make them physically available to the service provider for rendering services - in this case, the event of photography services pertaining to diamonds made physically available by the recipient of services to the provider of services is over and the service is clearly provided in India where the services are actually performed; that all the conditions stipulated in section 2(6) of the IGST Act are to be simultaneously complied with in order to consider any services as export of services - since conditions (iii) and (iv) have not been complied with, impugned supply is not “export of service' within the scope of section 2(6) of the IGST Act - as location of the supplier of service is in Mumbai and the place of supply as determined as per provisions of section 13(3) of the IGST Act is also in Mumbai, a place where the services are actually performed, the services are to be treated as intra state supply in terms of section 8(2) of the IGST Act and liable to tax under the provisions of MGST Act and CGST Act - supply of ‘photography service' is liable to GST - appellant is aggrieved and in appeal before AAAR.
Held: In order to determine which levy, whether CGST and SGST or IGST will be imposed on the said supply of photography services of the appellant, Authority has to determine the 'place of supply' and only then can one determine the nature of levy, whether CGST and SGST or IGST which will be imposed on the said supply of service - Since Authority does not have jurisdiction in view of s.97(2) of the CGST Act to determine the place of supply of services or goods or both, no ruling on this particular question can be passed by the Advance Ruling Authority - This rationale also holds true in the case of the second question asked by the appellant i.e. whether the said supply could be treated as export within the meaning of s.2(23) r/w s.2(6) of the IGST Act - Inasmuch as AAR should not have passed any ruling on the above mentioned two questions asked by the appellant and since the AAR has passed the ruling by transcending its jurisdiction, Appellate Authority quashes the impugned ruling - No ruling can be passed in the instant matter: AAAR
- Appeal disposed of: AAAR
2020-TIOL-22-AAAR-GST
Micro Instruments
GST - AAR had held that Commission received by applicant in convertible foreign exchange for rendering services as an 'Intermediary' between an exporter abroad receiving such services and an Indian importer of an equipment is NOT an export of service; that said supply will be treated as inter-state supply and IGST will be levied @18% - Appeal filed before AAAR.
Held: In order to determine which levy, whether export, or CGST or IGST, will be imposed on the said supply of 'intermediate services' of the appellant, Authority will have to determine the 'place of supply' - only then can the Authority determine the nature of levy, as to whether the same qualifies as an 'export' - As per the law, s.97(2), the Authority does not have the jurisdiction to determine the 'place of supply of services or goods or both' and accordingly no ruling on this particular question can be passed by the Advance Ruling Authority - such rationale also holds true in case of the second question asked i.e. whether the said supply could be treated as 'intra-state supply' u/s 8(1) of the IGST Act r/w s.2(65) of the CGST Act - AAR should not have passed any ruling on the above mentioned questions and since ruling has been passed by transcending its jurisdiction, Authority quashes the impugned ruling by the AAR: AAAR
- Appeal disposed of: AAAR
NAA CASES
2020-TIOL-30-AAAR-GST
Nurserymen Cooperative Society Ltd
GST - Applicant is an association of persons and is in the business of maintaining gardens and landscape development for State and Central governments, local bodies and government undertakings - they are also providing pure services to these service recipients and the same is exempted by way of sr. no. 3 of 12/2017-CTR - applicant states that he is sub-contracting this work to the sub-contractors and sought to know from the Authority for Advance Ruling as to whether such sub-contact work is liable to tax under the Act - AAR held that e ven assuming that the activity of the applicant, is either covered in entry no. 3 or 3A of 12/2017-CTR, the activity supplied by the sub-contractor to the applicant would not be exempt as it is not covered either in Entry no. 3 or 3A of 12/2017-CTR since the applicant does not belong to the class of recipients enumerated therein - aggrieved, appellant is before the Appellate authority.
Held: Issue being examined is whether the services supplied by the sub-contractors to the appellant, who is the recipient of the services, is exempted from GST - Entries under Sl. no. 3 and 3A will apply only if the recipient of services is a government (Central/State/UT) or local authority or a Governmental authority or a government entity - in this case, the appellant who is the recipient of the supply from the sub-contractor is a co-operative society and not an entity specified in Sl. no. 3 and 3A - When the criterion of the notification is not satisfied, the sub-contractors as suppliers of service, will not be eligible for the aforementioned exemption - While the Authority agrees that the appellant will not be eligible for the Input Tax credit of the tax paid on the inward supply from the sub-contractors as the output supply made by the appellant to the Government department is exempted, the same cannot be a ground for allowing the sub-contractors to avail the benefit of exemption - It is a well settled law that exemption notifications are to be interpreted strictly as to their eligibility - One cannot be influenced by extraneous factors while determining a person's eligibility to an exemption notification - Therefore, on a strict interpretation of the Entry Sl. no. 3 and 3A, Authority holds that the supply of services by the sub-contractors to the appellant is not eligible for the benefit of exemption under either Sl. no. 3/3A of 12/2017-CTR - Order of Authority for Advance Ruling is upheld and appeal is dismissed: AAAR
- Appeal dismissed: AAAR
2020-TIOL-29-AAAR-GST
Acharya Shree Mahashraman Chaturmas Pravas Vyavastha Samiti Trust
GST - In the matter of an application filed by the Appellant, a Trust, the AAR had held that the applicant is liable to pay tax on renting of temporary residential rooms of all categories to devotees if the declared tariff of a unit of accommodation is Rs.1000 or more per day or equivalent; that they are also liable to pay tax on renting of space for stalls; on supply of food and beverages at subsidised rates to devotees; on providing space for registered person without consideration for supply of food and beverages to devotees only if the applicant and such registered person are 'related persons'; is liable to tax for acting as an intermediary for booking of hotel rooms to the pilgrims from outside if he does not satisfy all the conditions for being considered as a 'pure agent' - Aggrieved by the ruling insofar as the renting of 2BHK and dormitory is concerned since under these two categories the charges are per room for a 2BHK and per bed for the dormitory and in both the cases, the charges are less than Rs.1000 per room/bed per day, the appellant is before the AAAR.
Held: Delay in filing appeal is condoned by the Authority in exercise of the powers vested in terms of the proviso to s.100(2) of the CGST Act - Authority finds that in the context of the appeal filed, the appellant is not renting out 'rooms' but rather is renting out units of accommodation comprising of 2 bedrooms, hall, kitchen, restroom, toilet etc. and the entire unit with facilities like water, electricity, cot, bed, pillow, bedspread and air-conditioner is given out on rent - The devotee is also given cooking facililty in this unit, therefore, the unit of accommodation of this kind which is termed by the appellant as a 2BHK category I type of accommodation cannot be considered as renting of rooms and will not be covered against Sr. no. 13 of 12/2017-CTR - similarly, renting of beds in a dormitory is also not akin to renting of rooms and hence it will not qualify for exemption under Serial 13(b) of 12/2017-CTR - Appellate Authority, therefore, agrees with the Authority for Advance Ruling and holds that the renting of the 2BHK unit and the dormitory will be chargeable to GST as a single unit where the value of supply will be the charges for the full 2BHK unit/dormitory and not the charges for each room/bed and is liable to tax in terms of Entry no. 7 of 11/2017-CTR - order of AAR upheld and appeal dismissed: AAAR
- Appeal dismissed: AAAR
2020-TIOL-28-AAAR-GST
Maarq Spaces Pvt Ltd
GST - Applicant entered into a Joint Development Agreement (JDA) with landowners for development of land into residential layout along with specification and amenities - consideration was agreed on revenue sharing basis in the ratio of 75% for landowner and agreement holder and 25% for applicant - cost of development was to be borne by the applicant - pursuant to JDA, the applicant had entered into an agreement with customers for sale of developed plots for consideration - Applicant sought to know as to whether the activity of development and sale of land attract tax under GST and if the answer is in the affirmative, for the purpose of taxable value, whether the provision of rule 31 of Rules can be made applicable in ascertaining the value of land and supply of service - Authority held that Applicant has no right in the title of the land and, therefore, they cannot be considered as the sellers of the plots; that they are only service providers in the whole process, be it development of the raw land into residential plots or their sale after the development, therefore, entire amount received by them is liable to be taxed under GST; that Rule 31 of the Rules applies in the instant case and the value of the supply is equal to the total amount received by the applicant, which is equal to 25% of the open market value of each plot - Appeal to the Appellate authority.
Held: In real estate transactions involving plotted development, one party owns the land and another party has the expertise to develop the land - The two parties come together with the common intention of developing the land and sharing the revenue accruing for the sale of the developed plots in the land - however, the landowners give the rights of using the land to the developer in exchange for which, the developer gives the service of developing the land of the owners - while the joint development agreement is entered into for the two parties to jointly reap the benefits of the sale of the land to customers, there is a clear rendering of a service by the developer to the landowner in developing the land which belongs to the landowner - therefore, the activity of developing the land is a supply of service by the appellant - A combination of two activities, one of which is not a supply under GST cannot be said to be a composite supply - Findings of the lower Authority upheld and appeal dismissed: AAAR
- Appeal dismissed: AAAR
2020-TIOL-27-AAAR-GST
Tata Coffee Ltd
GST - AAR had held that the t ransaction of depositing timber with the Government Timber depot (auctioneer) for disposal as per s.104 of the Karnataka Forest Act amounts to "supply" and GST is chargeable - value would be the open market value or the value as determined u/r 30 or 31 of the Rules; that t here is no provision in the GST Act for shifting the tax liability and considering that as a deemed discharge of liability; that there are two supplies involved in the chain of transactions, one when the timber is handed over to depot by applicant and the other when the said timber is sold by depot; that both are independent supplies and tax needs to be discharged at both stages, time of supply being the time of removal; that activity of providing supervision services is not covered in exceptions in Entry 5 of 13/2017-CTR and is liable to tax under reverse charge; that in case the timber depots are not government departments, then the depot shall collect GST and issue invoice to applicant - Appeal to AAAR.
Held: In the instant case, there is a transaction in goods inasmuch as timber is being deposited by the appellant with the Government Timber Depot (GTD) - This transaction is mandated by a statute i.e. the Karnataka Forest Act, 1963 - further, the activity of felling the timber trees is part of the shade management policy of the appellant in the course of their business of coffee/tea/pepper plantations, however, the activity of depositing the timber into the GTD does not result in realisation of consideration immediately - where the consideration is not extant in a transaction, such a transaction does not fall within the ambit of supply but in certain scenarios as elucidated in Schedule I of the CGST Act, 2017, the key element of consideration is not required to be present for treating the activity as supply - notwithstanding the fact that the depot is set up under the aegis of a statute, it functions in the capacity of an agent - in the instant case, once the lot of timber is sold to a successful bidder, the purchaser is required to pay 1/4th value of the timber purchased along with applicable taxes and later the balance dues - therefore, it is observed that the sale of timber happens through the GTD and not to the GTD as claimed by the appellant - the proceeds of the timber sold through the auction process by GTD is given to appellant on completion of the auction process, hence GTD acts in the capacity of an agent of the appellant and this transaction amounts to a supply in terms of clause 3 of Schedule I of the Act - time of supply will be the date of issue of invoice which will be at the time of removal of the timber by the appellant to the depot - appellant has not disputed the ruling with regard to taxability of supervision charges - accordingly, the ruling given by the lower authority is upheld: AAAR
- Appeal dismissed: AAAR
2020-TIOL-26-AAAR-GST
Wework India Management Pvt Ltd
GST - Appellant is in the business of supplying shared workspace/office space to the freelancers, startups, small businesses and large enterprises - to this end, the applicant procures goods and services from various contractors for fitting-out of the workspace and provides the said workspace on rent to various companies and individuals as sharing work-spaces - applicant had sought to know from the AAR whether they are eligible to avail ITC on the detachable 14mm Engineered wood with Oak Top wooden flooring which is movable in nature and capitalised as 'furniture and fixture' and is not capitalised as 'immovable property' - they also sought to know as to whether they are entitled to avail ITC on detachable sliding and stacking glass partition which is movable in nature and capitalised as ‘furniture and fixture' and is not capitalised as 'immovable property' - AAR had observed that Detachable wooden flooring and sliding and stacking of glass partitions are fixed to the buildings to create the office spaces and hence is a sine qua non for letting out of the office spaces; that there cannot be office space unless these are fixed and hence it can be said to be permanently fastened to the building; that since this activity amounts to addition or alteration to an immovable property, ITC is not available - Insofar as fixing of 14mm Engineering wood with Oak top wooden flooring is concerned, the same can be easily detached and reused as it only adds to the value to the building and is not sine qua non for the office space unlike the partitions and it is not covered under ‘construction of immovable property' and, therefore, ITC of GST is not available on the detachable sliding and stacking glass partition but ITC is available on the detachable 14mm Engineered Wood with Oak top wooden flooring - Appeal filed before the AAAR against the portion of the order that denies the ITC on detachable sliding and stacking glass partitions.
Held: Glass partitions are not permanent and are not embedded to the earth - They can be dismantled and moved according to the requirements of the clients of the appellant - although they are fixed to the earth with nuts and bolts, they can be dismantled without demolishing the civil structure, therefore, the detachable sliding and stackable glass partitions do not qualify as 'immovable property' - further, the detachable sliding and stackable glass partitions are accounted in the books of account as ‘fixed assets' under the head 'furniture and fixtures' - They are not capitalised as immovable property but rather as movable assets - intention of fixing the glass partitions is only to provide clients with a certain sense of privacy and for the purpose of demarcation of work space area; there is no permanency in affixing such partitions as the same can be dismantled and re-fixed to signify a change in the dimensions of the work space - fixing of partitions to the ground using nuts and bolts only serves to give a false sense of permanency while in reality it is not so - therefore, procurement of detachable sliding and stackable glass partitions will be eligible for ITC and will not be hit by the provisions of s.17(5)(d) of the CGST Act, 2017 - this portion of the order of AAR is set aside and appeal is allowed: AAAR
- Appeal allowed: AAAR
NAA CASES
2020-TIOL-26-NAA-GST
Director General Of Anti-Profiteering Vs Emaar Mgf Land Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent had profiteered in respect of purchase of flat by the applicant in Emerald Floors Premier project - applicant alleges that the respondent had not passed on the benefit of ITC by way of commensurate reduction in the price of the flat - DGAP has in its report stated that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 9.08% and during the post-GST period (July 2017 to March 2019) it was 20.98% which clearly confirmed that post-GST, the respondent has benefited from additional ITC to the tune of 11.90% of the turnover; that on account of not passing on the ITC benefit to the home buyers, the profiteered amount has been quantified as Rs.13,35,79,636/- which includes GST @12% on the base profiteered amount of Rs.11,92,67,352/-; that this amount is inclusive of Rs.1,04,734/- (including GST @12%) which the profiteered amount in respect of applicant no. 1; that the supply of construction service is only in the State of Haryana.
Held: Report of DGAP is agreed with - submissions made by the respondents are not tenable - accordingly the respondent is directed to pass on an amount of Rs.13,35,79,636/- and the amount of Rs.1,04,734/- to the other flat buyers who are all identifiable and the applicant no.1 respectively along with interest @18% per annum from the dates from which the above amount was collected by him from them till the date the payment is made, within a period of three months; Commissioners concerned to submit compliance report within four months; for the offence committed by contravening the provisions of s.171(1) of the Act, penalty is imposable u/s 171(3A) of the CGST Act, 2017; although report of DGAP was received on 25.09.2019 and order was to be passed before 24.03.2020, in view of prevalent pandemic and read with notification 35/2020-CT, dated 03.04.2020, order is being passed today on 15.05.2020: NAA
- Application allowed: NAA
2020-TIOL-25-NAA-GST
Director General Of Anti-Profiteering Vs JK Helene Curties Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - DGAP was requested to conduct a detailed investigation as per rule 129(1) of the CGST Rules, 2017 in the matter of the allegation that M/s Raymond Ltd. had not passed on the benefit of tax reduction from 28% to 18% w.e.f 15.11.2017 on 'After-Shave lotion Park Avenue Good Morning 50 ml' which was supplied to M/s Big Bazar, Inderlok run by M/s Future Retail Ltd. on 08.11.2017 under Purchase Order with MRP of Rs.115/- per unit, on 19.12.2017 under PO with the same MRP of Rs.115/- per unit and on 12.06.2018 vide PO again with the same MRP of Rs.115/- per unit - report submitted by DGAP and respondents have also filed replies to the same and were heard by the Authority.
Held: There was no reason for the respondents to increase their base prices exactly equal to the rate of tax reduction w.e.f 15.11.2017 - Such a coincidence is incomprehensible, strange and unheard of which shows that the respondents have deliberately tried to pocket the benefit of tax reduction to enrich themselves at the expense of the vulnerable customers - accordingly, on the basis of the pre and post reduction GST rates and the details of the outward taxable supplies of the impacted products made during the period 15.11.2017 to 31.03.2019 the profiteered amount in respect of respondent no. 1 has been rightly computed at Rs.18,48,43,084/- channel/customer wise including the GST, details of which have been mentioned in the report dated 24.09.2019 of DGAP; this amount includes an amount of Rs.8,97,253/- including GST which the respondent no. 1 has profiteered from respondent no. 2 - state wise profiteered amount has been calculated as Rs.38,64,891/- including GST in respect of respondent no. 2 - DGAP is bound to investigate all such cases in respect of which the above benefits are required to be passed on and furnish report accordingly to the Authority once the violation of the provisions of s.171 come to his notice during the course of investigation - DGAP is legally required to investigate and bring before the Authority all those registered persons who have failed to pass on both the above benefits not withstanding whether any allegation has been received against them or not once he has become aware of such violation - during the course of investigation, the DGAP had further found that the respondents had not passed on the benefit of tax reduction in respect of other products also which were being supplied by them inspite of tax reduction and, therefore, he was legally bound to investigate and bring this infringement of s.171 to the notice of the Authority - respondents cannot be allowed to deny the benefit of tax reduction to their customers on the ground of jurisdiction and misappropriate the amount of benefit of tax reduction which they were not required to pay from their own pockets - respondent has not kept the pre and post rate reduction base prices the same and has thus profiteered to the extent of Rs.6.49 per unit of the impugned product and has denied the benefit of tax reduction - claim of respondent that wherever it was feasible to increase the grammage instead of reducing the MRPs he had increased the same from January 2018 is without any evidence and cannot be relied upon - plea of the respondent that post 15.11.2017 he had reduced the rate of GST from 28% to 18% in the invoices issued by them to their customers and hence they had passed on the benefit of tax reduction to the customers is wrong and misleading as mere charging of GST @18% after the tax reduction does not amount to passing on the benefit of tax reduction in view of the fact that the respondent had increased the base prices of his products w.e.f 15.11.2017 and then charged GST @18% on them whereas he was legally bound not to increase the base price - respondent had continued to charge the same cum-tax prices which he was charging before the tax reduction and hence, he has not passed on the benefit of tax reduction - such hollow plea of respondent cannot be accepted - respondent was required to stamp or re-sticker or re-print the MRPs on all the impacted SKUs as per the letter issued by the Ministry of Consumer Affairs, Food and Public Distribution, GOI dated 16.11.2017, however, respondent had not complied with the above direction and has continued to sell his impacted SKUs at the pre-reduction MRPs - respondent had simply transferred his legal obligation to his distributors who had no power to re-fix the MRPs and stamp/re-sticker/print them on the impacted SKUs - since the MRPs were not reduced and affixed on the above SKUs by the respondent there is no likelihood of their being sold to the consumers at the commensurate reduced MRPs keeping in view the above rate reduction - respondent has, therefore, acted in contravention of s.171(1) of the Act - absence of Judicial Member does not cause any prejudice to the respondent, hence their contention that the constitution of the Authority is illegal is untenable - It is accordingly held that the amount of profiteering in the case of respondent no. 1 is Rs.18,48,34,084/- and in respect of respondent no. 2 is Rs.38,64,891/- - since the recipients in this case are not identifiable, these amounts are required to be deposited in the Consumer Welfare Funds of the Central and State governments concerned as per the provisions of rule 133(3)(c) of the Rules, 2017 in the ratio of 50:50 along with interest @18% - for the aforementioned contraventions, penalty is imposable u/s 171(3A) of the Act, 2017 - amount to be deposited within a period of three months and a report is required to be submitted by the Commissioners concerned within four months - due to COVID-19 pandemic the order could not be passed on or before 24.03.2020 as mandated by rule 133(1) of the Rules, 2017 but is being passed on 11.05.2020 in view of notification 35/2020-CT dated 03.04.2020: NAA
- Applications disposed of: NAA
2020-TIOL-24-NAA-GST
Director General Of Anti-Profiteering Vs Printing Machine Solutions
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that they had purchased an imported ‘Used Heidelberg Offset Press SM 74-5 +LX, Mfg. Year 1997 with complete tools and accessories' from respondent for which the respondent had quoted a price of Rs.1,40,00,000 (plus local Sales Tax, if applicable) as per proforma invoice dated 06.05.2027 - however, they were billed for an amount of Rs.1,65,20,000/- as per tax invoice no. 01 dated 29.07.2017 which included GST @18% on Rs.1,40,00,000/- - it is the case of the applicant that after implementation of GST, various existing taxes like VAT, CST, CVD, SAD etc. had been subsumed in GST but the respondent had charged @18% GST on Rs.1,40,00,000/- which was the quoted price inclusive of erstwhile taxes like CVD and SPL CVD etc. and did not pass on the benefit of ITC to him by way of commensurate reduction in price in terms of s.171 of the Act - finding of DGAP is that the respondent should have reduced the base price to the extent of the CVD that was no longer required to be paid as well as to the extent of the IGST, the credit of which was now available; however, the invoice that was raised on 29.07.2017 for the transaction and on which IGST @18% was charged showed that the base price of the product remained the same i.e. Rs.1,40,00,000/- as per quotation dated 06.05.2017 inasmuch the base price was not reduced to the extent of CVD that was not payable in the post-GST period; that the respondent would have been liable to pay CVD @12.5% amounting to Rs.5,85,696/- for the above product without getting the benefit of ITC but since the import took place after implementation of GST, the respondent did not have to suffer the burden of the same (of CVD) and hence the base price of the product should have been reduced by Rs.5,85,696/- i.e. the base price should have been Rs.1,34,14,304/- [Rs.1.4 crores minus Rs.5,85,696/-]; that the commensurate cum-tax price of the product inclusive of GST @18% would have been Rs.1,58,28,879/- and, therefore, the total price to be charged from applicant should have ben Rs.1,58,28,879/- instead of Rs.1.65 crores and the amount of profiteering by the respondent was Rs.6,71,121/- [Rs.1,65 crores minus Rs.1,58,28,879/-] - DGAP in its supplementary report dated 18.12.2019 also clarified that at the time of import of the product and at the time of raising of the subject quote by respondent, the Cesses, namely Education Cess and Secondary & Higher Education Cess were not leviable, hence the said cesses were not considered while calculating profiteering; that on account of typographical error the billing amount was taken as Rs.1,65,00,000/- in place of Rs.1,65,20,000/- and, therefore, the correct profiteered amount would be revised to Rs.6,91,121/- - during the course of hearings before the Authority, the respondent has conveyed his agreement with the report of the DGAP and has also submitted that he has also passed on the profiteered amount of Rs.6,91,121/- to the applicant but without interest vide RTGS dated 12.12.2019 and the applicant acknowledges the same - request of respondent for waiver of interest on the profiteered amount cannot be acceded to in the absence of any provision of law in this regard - respondent directed to compute the interest @18% on the profiteered amount and pay the same to the applicant within a period of three months and compliance report to be submitted by the Commissioner within a period of four months - SCN to be issued for imposition of penalty u/s 171(3A) for contravention of s.171(1) of the Act - in view of 35/2020-CT dated 03.04.2020 issued u/s 168A of the Act, force majeure , the order is being passed on 05.05.2020 which is beyond the period of six months as mandated u/r 133(1): NAA
- Application disposed of: NAA
2020-TIOL-23-NAA-GST
Director General Of Anti-Profittering Vs Azeagaia Development Pvt Ltd
GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - Applicant alleges profiteering by the respondent in purchase of Flat no. A-802, Azea Botanica, Lucknow inasmuch as it is the contention of the applicant that the respondent had not passed on the benefit of Input Tax Credit by way of commensurate reduction in the prices of the apartment purchased by him on implementation of GST w.e.f 01.07.2017 - DGAP in its report has submitted that the benefit of additional ITC of 3.84% of the turnover had accrued to the respondent for the said project and this benefit was required to be passed on to the recipients but this was not done - investigation revealed that the respondent had realised an additional amount of Rs.56,266/- from applicant no. 1 and Rs.73,05,022/- from the other 166 recipients (who are not applicants but who are identifiable) and, therefore, the balance profiteered amount of Rs.73,61,288/- was required to be returned to the applicant and the other recipients - DGAP has also stated in its report that out of the total profiteered amount of Rs.2,72,21,532/- for the period 01.07.2017 to 31.03.2019, an amount of Rs.2,04,77,678/- was claimed to be passed on by the respondents to the homebuyers by way of reduction in the demand raised on the customers/flat buyers/recipients - Authority finds no reason to differ from the detailed computation of profiteering made by the DGAP and hence the profiteered amount in this case is determined as Rs.2,72,21,532/- - the balance amount of benefit of Rs.73,61,288/- is required to be passed by the respondent to the applicant and the other customers/flat buyers along with interest of @18% in respect of the entire amount of profiteering - balance amount should be paid within three months along with the interest as mentioned - penalty is imposable in terms of s.171(3A) for the contravention of s.171(1) of the Act - SCN to be issued accordingly - provisions of rule 133(1) of the Rules, 2017 requires that the order be passed within 6 months from date of receipt of report furnished by DGAP under rule 129(6) - although the report was received on 25.09.2019 and order was required to be passed on or before 24.03.2020, however, due to prevalent pandemic of COVID-19, order could not be passed before the due date due to force majeure - order is, therefore, being passed on 05.05.2020 in terms of notification 35/2020-CT dated 03.04.2020 issued by GOI u/s 168A of the CGST Act, 2017: NAA
- Application allowed: NAA
2020-TIOL-22-NAA-GST
Director General Of Anti-Profiteering Vs Samsonite India
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering by respondent in respect of ‘American Tourister Sky Tracer HL Bkue 68cm Hard Trolley' which was being supplied by respondent - Applicant alleges that the respondent did not reduce the selling price of the product when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017 but had kept the MRP of the above product unchanged at Rs.9100/- and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in its price - Authority agrees with the DGAP conclusion made in its report that the respondent had profiteered by an amount of Rs.25,73,82,482/- as arrived as per the provisions of rule 133(1) of the CGST Rules, 2017 - respondent is, therefore, directed to deposit the profiteered amount along with interest @18% in the Consumer Welfare Funds of the Central and State Governments concerned in the ratio of 50:50 along with interest - amounts to be deposited within three months and report to be submitted by the concerned Commissioners - SCN to be issued for imposition of penalty u/s 171(3A) for contravention of the provisions of s.171(1) of the Act - Order issued on 28.04.2020 keeping in view the force majeure due to COVID-19 pandemic and notification 35/2020-CT dated 03.04.2020: NAA
- Application allowed: NAA
2020-TIOL-21-NAA-GST
Director General Of Anti-Profittering Vs Litecon Industries Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering by respondent in respect of Fly Ash Blocks supplied inasmuch as the respondent had not passed on the benefit of reduction of GST rate from 12% to 5% but instead increased the unit base price - DGAP has submitted its report on 25.09.2019 concluding that the respondent has profiteered - NAA observes that it is established that the respondent has acted in contravention of the provisions of s.171 of the Act by not passing on the benefit of reduction in the rate of tax to his recipients by commensurate reduction in the prices - accordingly, the profiteered amount as determined u/r 133(1) of the Rules of Rs.55,60,340/- by DGAP is agreed with - respondent is directed to deposit the profiteered amount along with interest @18% - as apart from the applicant, the rest of the recipients are not identifiable the said amount is to the deposited in the Consumer Welfare Fund of the Central and State governments concerned in the ratio of 50:50 along with interest @18% within three months - applicant has already received his portion of the profiteered amount of Rs.299/- - SCN to be issued for imposition of penalty u/s 171(3A) of the Act - force majeure notification 35/2020-CT dated 03.04.2020 refers for passing order on 13.04.2020 in place of its being required to be passed on 24.03.2020, the six months period mandated under rule 133 - Application allowed: NAA
- Application allowed: NAA
NAA INTERIM ORDER
Maheshwari Infratech Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - applicant alleges profiteering in respect of construction service supplied by the respondent - inasmuch as it is contended that the benefit of ITC has not been passed to applicant by way of commensurate reduction in the price of the shop purchased - Contention of the respondent is that the Deputy Commissioner, State GST, Gautam Buddh Nagar has blocked his ITC of Rs.1,77,50,478/- on 28.03.2019 and, therefore, the DGAP could not have taken it in the total ITC availed for calculation of the amount of profiteering; that the DGAP is requested to recalculate the profiteering amount again as they never availed or utilised the amount of Rs.1.77 crores which has been blocked by the State GST department - Authority views that the report dated 24.09.2019 furnished by the DGAP cannot be accepted and, therefore, the DGAP is directed to further investigate the present case under rule 133(4) of the Rules on the issues as listed - that a fresh report after a detailed investigation as per rule 129(6) of the Rules is required to be submitted by DGAP within a period of three months: NAA
- Interim order passed
Sahej Realcon Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant had alleged profiteering by the respondent in purchase of Duplex Row House in the respondent's project Sahej Valley, Rourkela - inasmuch as the applicant contends that the respondent had not passed on the benefit of ITC although he had charged GST @12% w.e.f 01.07.2017 - DGAP has in its report stated that the construction service was completed well before the introduction of GST and any liability of GST on the above applicant was only on account of the dues left on account of his booking of the unit prior to the issue of the Completion Certificate; that there was no additional accrual of ITC to the respondent as a result of introduction of GST as the construction service was completed prior to GST introduction; that s.171(1) of the Act comes into play in the event when there was a reduction in the rate of tax or increase in the ICT, but neither of them appeared to have been attracted in the present case - inasmuch as DGAP concluded that there was no profiteering by the respondent and hence the allegation is not sustainable - Authority notes that the completion certificate has been issued by one Arijit Sarkar, a private Architect and who does not appear to have any authority to issue the same; that the certificate should have been issued by the competent authority duly notified by the State of Odisha and, therefore, placing of reliance by the DGAP on a completion certificate issued by a private architect is not correct and hence the conclusion drawn is not acceptable - DGAP is, therefore, directed to further investigate the matter on the points referred and submit his detailed report under rule 129(6) of the Rules within a period of three months: NAA
- Interim order passed
Cloudtail India Pvt Ltd
GST - Anti-profiteering - Section 171 of the CGST Act, 2017 - Applicant alleges that the respondent had not passed on the benefit of tax reduction from 12% to Nil which was notified vide notification 19/2018-CTR dated 26.07.2018 in respect of supply of Stayfree Sanitary Napkins w.e.f 27.07.2018 - DGAP has in its report stated that the respondent has increased (allegedly due to denial of ITC @12%) the base prices of the Sanitary Napkins when the GST rate was reduced from 12% to Nil w.e.f 27.07.2018; that during the period 27.07.2018 to 31.03.2019 i.e. after reduction of GST rate from 12% to Nil w.e.f 27.07.2018, the amount of profiteering on account of sales made from the closing stock as on 26.07.2018 was Rs.1,43,868/- and amount of profiteering on account of sales made from fresh stock was Rs.18,17,165/-; that the total profiteered amount comes to Rs.19,61,033/- - In the matter of the Written submissions dated 11.11.2019 filed by the respondents, DGAP has submitted that the issue of common ITC could not be addressed in the report dated 24.09.2019; that the authenticity and veracity of the common credit of Rs.13,07,118/- claimed as reversed needs to be verified in terms of s.17(2) of the Act, 2017 r/w rule 42 of the Rules, 2017; that benefit of discounts allowable as per s.15 is to be verified; that the profiteering on closing stock was computed twice since the total sales data excluding the details of closing stock was not provided - Authority notes that the aforementioned three issues are required to be further investigated by the DGAP and only then can the Authority determine the profiteered amount as per s.171 of the Act - Authority, therefore, directs the DGAP to carry out further investigation in terms of rule 133(4) of the Rules and complete the same within three months - although the report was received on 25.09.2019 and order was required to be passed on or before 24.03.2020, however, due to prevalent pandemic of COVID-19, order could not be passed before the due date due to force majeure - order is, therefore, being passed on 20.04.2020 in terms of notification 35/2020-CT dated 03.04.2020 issued by GOI u/s 168A of the CGST Act, 2017: NAA
- Interim order passed
Pivotal Infrastructures Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering in respect of purchase of flat in the project of the respondent situated at Gurgaon - inasmuch as the allegation is that the respondent had not passed on the benefit of ITC availed by him by way of commensurate reduction in the price of the above flat - Perusal of the supplementary report dated 19.02.2020 furnished by DGAP and Table-D of his first report dated 16.09.2019 mentions that the respondent has passed on the benefit of Rs.1,21,08,722/- to the flat and shop buyers - however, it is pertinent to note that the DGAP has not verified even a single acknowledgement submitted by the respondent from the flat or the shop buyers to establish that they have actually received the benefit of GST as has been claimed by the respondent - DGAP has also not produced even a single acknowledgement/statement of the buyers obtained/recorded by him to confirm whether the benefit of ITC has been passed on to the buyers or not - in the absence of such acknowledgement/statement, the claim of the respondent that he has passed on the benefit of ITC to his buyers cannot be accepted - DGAP is, therefore, directed to further investigate the present case under rule 133(4) of the Rules up to 29.02.2020 or till the date of issue of Completion Certificate, whichever is earlier, on the following issues viz. whether respondent was eligible to claim ITC on the VAT which he has paid during the period April 2016 to June 2017 as per the Haryana VAT Act, 2003 or not; whether respondent was availing benefit of Composition Scheme under the VAT Act, 2003 or not; whether the respondent was eligible to charge VAT from the flat and shop buyers under the Haryana Affordable Housing Policy, 2013; whether the respondent has collected VAT from the buyers or not; whether the credit of VAT claimed is in accordance with the provisions of s.42 of the VAT Act, 2003; whether ITC claimed during the pre-GST period has been allowed by the appropriate assessing authority and, whether the respondent has actually passed on the benefit of ITC which shall be investigated by verifying acknowledgements produced by respondent - investigation to be completed within a period of three months and a report submitted under rule 129(6) of the Rules; that written acknowledgements of at least 20% of the flat/shop buyers shall be submitted: NAA
- Interim Order passed
CGST RULES NOTIFICATIONS
43/2020
Seeks to bring into force Section 128 of Finance Act, 2020 in order to bring amendment in Section 140 of CGST Act w.e.f. 01.07.2017.
42/2020
GSTR-3B filing - proviso inserted to enable J&K and Ladakh for electronic filing
41/2020
GST - Annual Return for FY 2018-19 - Date extended till Sept 30
40/2020
GST - Rule 138 - Validity of e-Way Bills generated during lockdown extended up to May 31
39/2020
Changes made to facilitate registration of IBC cases
38/2020
GSTR-3B - NIL return - April 21 to June 30, 2020 - Rules 26 & 67 amended to insert proviso
ARTICLES
S.140 of CGST Act - Retrospective amendment - 6 takeaways
GST - Need for 'Bearer Centric Approach'
GST - An agenda for reforms - Part - 81 - GST Council Meeting - An agenda during troubled times
The TRAN-1 showstopper
Balance of equity?
Would amendment to Transitional provisions impact retrospectively?
GST on Directors Remuneration - An Analysis
Set SAIL - Turnkey Project and Customs Valuation
Transitional Credit: A Taxpayer's Struggle
Revival or Survival - decoding the 20 trillion stimulus package
ITC restrictions for Commercial Realty Sector - some thoughts
Remedy delayed is remedy denied!
Supplies made by DTA to EOU & the 'use in manufacture' condition
Production Linked Incentive Schemes for manufacturers in the Healthcare sector - will the shine last beyond the Covid-19 pandemic?
Rebate of IGST - Rule 96(10) Conundrum
Payment to vendor - A mandatory condition for availing ITC: Multiple absurdities
Unbundling of bundled supplies under GST - A way forward
COVID-19 times - Time to em'power' Solar Industry!
GST - Refund of interest paid on delayed payment of taxes - An analysis
Key learnings from the judgment in RIL vs State of Gujarat
Why mar 'mask' exports?
Director's Service and its cross charge under GST - A game of trick or treat?
Valuation of Unquoted Equity Shares
GST - A Cobweb of Fresh Deadlines
In pursuit of drinking water in GST regime
SVB & Valuation of Goods Imported from Related Party
Input tax credit taken, not utilised - Whether interest / penalty is attracted
An analysis of the VVF Ltd decision
Refund - Requirement of SEZ Officer's endorsement on Invoices raised by DTA supplier
An insight into rule 43 of CGST Rules
Appeal dismissed as time-barred by AAAR - further legal remedy
Can Modinomics Work Wonders Without Financial Emergency
JEST GST By Vijay Kumar
Shiva's Damaru
Learned Counsel, not Counsels
GST TRAN-1: Credit in every sense stood accumulated, acquired and vested
The Cob(Web) by Shailendra Kumar
COVID-19 - Economic Stimulus - Supply vs Demand - A Cause Celebre!
Invasive Lockdown vs Mounting Economic Toll - How to Mask the Risk!
COVID-19 riding 'liquor carrier' gets 'inTAXicated'!
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