2020-TIOL-GST-350, Dated: Friday, July 31, 2020

IGST - Petitioner is an association comprising of recycling industry engaged in manufacture of metals and casting etc. for various upstream industries in India - the members also act as agents for scrap, recycling companies based outside India engaged in providing business promotion and marketing services for principals located outside India - members also facilitate sale of recycled scrap goods for their foreign principals in India and other countries - members not only deal with goods sold by foreign principal to customers in India but also facilitate sale of goods by foreign principals in non-taxable territory to their customers, who are also located in non-taxable territories - Petitioner has challenged the constitutional validity of section 13(8)(b) of the IGST Act and to hold the same as ultra vires the Articles 14, 19, 265 and 286 of the Constitution of India with a direction to the respondent to refund IGST paid on services provided by the members of the petitioner association and to their clients located outside India - petitioner submits that members of the petitioner association receives only the commission upon receipt of sale proceeds by its foreign client in convertible foreign exchange and thus the transaction entered into by the members is one of export of service from India; that, therefore, IGST cannot be levied on the members who are engaged in the transaction of export of services as the same is covered u/s 16(1) of the IGST Act, 2017 which provides for ‘zero-rated supply'.

Held: Parliament has exclusive power under Article 246A to frame laws for inter State supply of goods or services - the basic underlying change brought in by the GST regime is to shift the base of levy of tax from point of sale to the point of supply of goods or services - sub-section 8 of section 13 refers to place of supply of the services in case of banking company, intermediary services and services consisting of hiring of means of transport - Intermediary services is defined in section 2(13) of the IGST Act, 2017 which means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both, or securities on his own account and accordingly, when intermediary services are provided by brokers, the place of supply could be either the location of the service provider or the service recipient - petitioner has tried to submit that the services provided by a broker outside India by way of intermediary service should be considered as ‘export of services' but the legislature has thought it fit to consider such intermediary services; that the place of supply would be location of the supplier of services - in that view of the matter, it would be necessary to refer to the definition of ‘export of services' as contained in s.2(6) of the Act, 2017 which provides that 'export of service' means the place of service of supply outside India - Upon a conjoint reading of section 2(6) and 2(13) which defines 'export of service' and 'intermediary service' respectively, then the person who is intermediary cannot be considered as exporter of services because he is only a broker who arranges and facilitates the supply of goods and services or both - in such circumstances, the respondent no. 3 have issued Notification no. 20/2019-IT(R) where exemption is granted in IGST rates from payment of IGST in respect of services provided by intermediary in case the goods are supplied in India - It, therefore, appears that the basic logic or inception of section 13(8)(b) of the IGST Act, 2017 considering the place of supply in case of intermediary to be the location of supply of service is in order to levy CGST and SGST and such intermediary service, therefore, would be out of the purview of IGST - There is no distinction between the intermediary services provided by a person in India or outside India - only because the invoices are raised on the person outside India with regard to the commission and foreign exchange is received in India, it would not qualify to be export of services, more particularly when the legislature has thought it fit to consider the place of supply of services as place of person who provides such service in India - There is no deeming provision as tried to be canvassed by the petitioner, but there is a stipulation by the Act legislated by the Parliament to consider the location of the service provider of the intermediary to be place of supply - similar situation was existing in service tax regime w.e.f 1st October 2014 and as such same situation is continued in GST regime also - Therefore, this being a consistent stand of the respondents to tax the service provided by intermediary in India, the same cannot be treated as ‘export of services' under IGST Act, 2017 and, therefore, rightly included in section 13(8)(b) of the IGST Act to consider the location of supplier of service as place of supply so as to attract CGST and SGST - contention of the petitioner that it would amount to double taxation is also not tenable in eyes of law because the services provided by the petitioner as intermediary would not be taxable in the hands of recipient of such service, but on the contrary a commission paid by the recipient of service outside India would be entitled to get deduction of such payment of commission by way of expenses and, therefore, it would not be a case of double taxation - If the services provided by intermediary is not taxed in India, which is a location of supply of service, then, providing such service by the intermediary located in India would be without payment of any tax and such services would not be liable to tax anywhere - contentions raised on behalf of the petitioner are not tenable in view of the notification 20/2019-IT(R) issued by the GOI whereby Entry no. 12AA is inserted to provide Nil rate of tax granting exemption from payment of IGST for service provided by an intermediary when location of both supplier and recipient of goods is outside the taxable territory i.e. India - respondents have thought it fit to consider granting exemption to the intermediary services viz. service provider when the movement of goods is outside India - accordingly, it cannot be said that the provision of section 13(8)(b) read with section 2(13) of the IGST Act are ultra vires or unconstitutional in any manner - it would, however, be open for the respondents to consider the representation made by the petitioner so as to redress its grievance in suitable manner - Petition is disposed of accordingly: High Court

GST - Petitioner is engaged in the business of manufacture and supply of footwear which attracts GST @5% and the majority of the inputs and input services procured by them attract GST @12% or 18% - inspite of utilisation of credit for payment of GST on outward supply, there is accumulation of unutilized credit in electronic credit ledger - Respondents are allowing refund of accumulated credit of tax paid on inputs such as synthetic leather, PU polyol etc. but refund of accumulated credit of tax paid on procurement of ‘input services' such as job work service, goods transport agency service etc. is being denied - petitioners have, therefore, challenged validity of amended rule 89(5) of the CGST Rules, 2017 to the extent it denies refund of input tax credit relatable to Input services.

Held : It appears that rule 89(5) of the Rules and more particularly the explanation (a) thereof, provides that Net Input Tax Credit shall mean “input tax credit” availed on “inputs” during the relevant period other than the “input tax credit” availed for which refund is claimed under sub-rule (4A) or (4B) or both - therefore, the grievance of the petitioner is that only the “inputs” is referred to in Explanation (a) to sub-rule (5) of Rule 89 of the CGST Rules, 2017 and, therefore, “Input Tax Credit” on “Input services” are not eligible for calculation of the amount of refund by applying rule 89(5) - Thus, it results in violation of provisions of sub-section 3 of Section 54 of the CGST Act, 2017 which entitles any registered person to claim refund of “any” unutilized input tax credit - section 7 of the Act provides that “scope of supply” includes all forms of supply of goods or services, therefore, for the purpose of calculation of refund of accumulated “input tax credit” of “input services” and “capital goods” arising on account of inverted duty structure is not included into “inputs” which is explained by the Circular 79/53/2018-GST dated 31.12.2018 wherein it is stated that the intent of law is not to allow refund of tax paid on “input services” as part of unutilised “input tax credit” - Delhi High Court in the case of Intercontinental Consultants & Technocrats P Ltd. - 2012-TIOL-966-HC-DEL-ST has held that the rule which goes beyond the statute is ultra vires and thus liable to be struck down - From the conjoint reading of the provisions of Act and Rules, it appears that by prescribing the formula in sub-rule 5 of Rule 89 of the CGST Rules, 2017, to exclude refund of tax paid on “input services” as part of the refund of unutilised input tax credit is contrary to the provisions of sub-section 3 of section 54 of the Act which provides for claim of refund of “any unutilised input tax credit” - the word “Input Tax credit” is defined in section 2(63) of the Act meaning the credit of Input tax and the word ‘input tax' is defined in section 2(62) as the central tax, state tax, integrated tax or union territory tax charged on any supply of goods or services or both made to a registered person whereas the word “input” is defined in section 2(59) means any goods other than capital goods and “input service” as per section 2(60) means any service used or intended to be used by a supplier - thus “input” and “input service” are both part of the “input tax” and “input tax credit”, therefore, as per the provisions of sub-section 3 of section 54 of the Act, 2017, the legislature has provided that registered person may claim refund of “any unutilised input tax”, therefore, by way of rule 89(5) of the Rules, such claim of the refund cannot be restricted only to “input” excluding the “input services” from the purview of “input tax credit” - moreover, clause (ii) of proviso to sub-section 3 of section 54 also refers to both supply of goods or services and not only supply of goods as per amended rule 89(5) of the CGST Rules, 2017 - keeping in mind the scheme and the object of the Act, 2017, the intent of the government by framing the rule restricting the statutory provision cannot be the intent of law as interpreted in Circular 79/53/2018-GST dated 31.12.2018 to deny the registered person refund of tax paid on “input services” as part of refund of unutilised input tax credit - Explanation (a) to rule 89(5) which denies refund of “unutilised input tax” paid on “input services” as part of the “input tax credit” accumulated on account of inverted duty structure is ultra vires the provisions of section 54(3) of the Act - Explanation (a) to the rule 89(5) is read down to the extent that Explanation (a) which defines “Net Input Tax credit” means “Input Tax credit” only - the said Explanation (a) of Rule 89(5) of the Rules is held to be contrary to the provisions of section 54(3) of the Act - Net ITC should mean “input tax credit” availed on “inputs” and “input services” as defined under the Act - Respondents are directed to allow the claim of the refund made by the petitioners considering the unutilised input tax credit of “input services” as part of the “net input tax credit” (Net ITC) for the purpose of calculation of the refund of the claim as per rule 89(5) of the Rules for claiming refund under sub-section 3 of section 54 of the Act - Petitions are allowed - Request of the Counsel for Revenue to stay the operation, implementation and execution of the judgment is rejected: High Court [para 20, 21, 23 to 28]

GST - Petitioner challenges the constitutional validity and legality of Section 17(5)(c) and Section 17(5)(d) of the CGST Act, 2017 and the Delhi GST Act, 2017 and the Circular No.28 dated 01st January, 2018 - It is averred that by the impugned provisions and circular, petitioner has been denied the Input Tax Credit of tax paid by it on works contract services as well as goods and services used in the construction of an immovable property (other than plant and machinery), despite such goods and services being used for purposes of business and to provide taxable supplies liable to GST; that the impugned provisions and impugned circular are violative of Article 14 of the Constitution and are a complete departure from the rationale and objective of introducing GST which was to avoid the cascading effect of taxes and removal of breaks in the tax chain.

Held: To be listed along with W.P.(C) No.5457/2019 and W.P.(C) No.11633/2019 on 15th September, 2020 - counter-affidavits be filed within a period of four weeks and rejoinder-affidavits, if any, be filed before the next date of hearing: High Court

GST - It is not in dispute that individual and separate personal hearing notice was not issued to the petitioner - On the ground of violation of statutory mandate under Section 75(4) of Tamil Nadu Goods and Service Tax Act, 2017 , the impugned orders have to be necessarily quashed - They are quashed and the matters are remitted to the file of the respondent to pass orders afresh in accordance with law - writ petitions are allowed: High Court [para 4, 5]

GST - Petitioner claims relief inter alia directing the respondents No.2 to grant an opportunity to the petitioner to file Trans 1 before due date i.e. 31.03.2020 - Petitioner referred to Section 140 of the Central Goods and Service Tax Act, 2017 and Rule 117 of the Rules to the effect that the registered person should not be debarred to file his Trans-1 who could not file the same within time due to technical difficulties - Petitioner urged that a representation was submitted on 26.12.2019 before the respondent No.2 claiming that due to technical difficulties, the petitioner was unable to file Trans-1 within permissible time and requested to allow the petitioner to file the same so as to enable him to claim transitional credit of eligible duties in respect of inputs held in stock on the appointed day in terms of Section 140(3) of the Act - It was urged that no heed was paid by the respondents and, accordingly, a prayer was made that respondents be directed to consider and decide the said representation - Counsel for the respondents did not object to the said prayer and stated that if the said representation is pending, the same will be decided by the respondents in accordance with law.

Held: Without expressing any opinion on the merits of the controversy, Bench disposes of the writ petition with a direction to the respondent No.2, 3 and 4, as the case may be, to take a decision on the representation filed by the petitioner within fifteen days by passing a speaking order after affording an opportunity of hearing to the petitioner or his representative through video conferencing, in accordance with law - Writ petition disposed of: High Court [para 6, 7]

GST - Anti Profiteering - The present petition was filed in challenge of a judgment passed by the National Anti Profiteering Authority and for setting aside the directions issued consequently - The petitioner claimed that the proceedings against it are without jurisdiction and are barred by limitation prescribed under Rule 128(i) of the Central Goods and Services Tax Rules - The petitioner also alleged there to be violation of the principles of natural justice inasmuch as the second complaint dated 22nd February, 2019 on the basis of which the investigation is alleged stated to have been initiated was never furnished to the petitioner - The petitioner also claimed to have passed on commensurate reduction in price to its recipients by way of grammage increase, which was accepted by the Revenue as a legitimate method of passing on commensurate reduction in prices consequent upon GST rate reduction.

Held - Notice be issued to the parties - Revenue's counsel granted three weeks' time to file counter affidavit - Petitioner is directed to deposit the principal profiteered sum in two weeks' time, consequent to which the interest and penalty amounts would be stayed - Matter listed for hearing on Aug 24, 2020: HC

GST - The present petition was filed, seeking that directions be issued to the Revenue authorities concerned to permit the petitioner to carry forward in its electronic credit ledger, an amount of transitional tax credit accumulated as on June 30, 2017 - The petitioner also sought that Rule 117 of the CGST Act be declared ultra vires of Section 140 of the CGST Act - The petitioner canvassed for a declaration to the effect that the retrospective amendment made u/s 140(1) of the CGST Act is illegal & arbitrary.

Held - Notice be issued to the parties - Counter-affidavit be filed in 4 weeks' time - Further proceedings would depend on the decision of the Supreme Court in Union of India Vs. Brand Equity Treaties Limited & Ors. which is awaited: HC

Special Wire Products Pvt Ltd Vs Deputy/ Assistant Commissioner GST and Central Excise

GST - Impugned order of rejection dated 06.09.2019 stating that the petitioner did not appear for personal hearing in response to notice is clearly incorrect as the petitioner had appeared before the respondent on 29.08.2019 and put forth his submissions - impugned order dated 06.09.2019, being in violation of principles of natural justice, is quashed - In view of Central Goods and Services Tax (Removal of Difficulties) Order no. 01/2020 dated 25.06.2020, the Writ Petition is allowed and the petitioner is at liberty to approach the Assessing Authority by the cut-off date provided in the Notification seeking restoration of registration: High Court [para 3, 4, 6]

GST - Writ applicant claims to be the owner of the truck bearing No.MP-09-GF-9070 which came to be seized by the respondent No.2 under the provisions of CGST Act 2017 - It appears that final order in Form MOV-11 has been passed - Thus, the truck has been ordered to be confiscated under the provisions of Section 130 of the Act 2017 – Writ applicant prays for release of truck.

Held : As a final order of confiscation has been passed and the same being an appealable order, Bench relegates the writ applicant to file a statutory appeal as provided under Section 107 of the Act - Along with the appeal, it shall be open for the writ applicant to prefer a Miscellaneous Application under section 67(6) of the CGST Act 2017 for provisional release of the vehicle pending the final disposal of the appeal - if any such application under section 67(6) of the Act is filed by the writ applicant, then the authority concerned shall look into the same at the earliest and pass an appropriate order in accordance with law – Writ application disposed of: High Court [para 3, 4]

GST - Grievance of the petitioner is in respect of his being unable to upload GST TRAN-1 and TRAN-2 returns on the GST web portal by the last date prescribed i.e. 27.12.2017 – representation made before the authorities concerned was categorically rejected on the ground of the petitioner failing to produce any material/evidence to show that he had tried to submit the TRAN-1 and TRAN-2 within the stipulated period but they could not due to technical glitch.

Held: In Annexure P/3 there is no reference whatsoever by the Commissioner in respect of Annexure P/7 dated 26.02.2017 submitted by the petitioner in respect of his complaint regarding the technical glitch that was faced by him - There is also no reference of the attempt made by the petitioner to submit TRAN-1 form manually as well as having sent it by post through registered AD - In the light of the document Annexure P/7, so also the documents by which the petitioner claims to have submitted TRAN-1 manually on 18.01.2018, the finding of the Commissioner in Annexure P/3 dated 14.09.2018 prima facie seems to be incorrect - All these aspects have not been considered or decided by the Commissioner in his order dated 14.09.2018 - in the absence of any reasons and discussion by the Commissioner to the contentions and submissions of the petitioner, Court is of the view that the said order dated 14.09.2018 needs to be reconsidered – court, therefore, remits the matter back to the Commissioner, Commercial Tax for a reconsideration and for passing of a fresh order - Considering the element of time which has been consumed in the course of litigation, it is expected that the Commissioner, Commercial Tax shall take a decision at the earliest preferably within an outer limit of 60 days - If required, the Commissioner can refer the matter to the GST Council with its report for taking appropriate sanction/recommendations from the GST Council (rule 117(1A) refers) - In the event, if the Commissioner, Commercial Tax makes a reference to the GST Council, it is expected that the Council also, in turn, takes an early decision on the reference made by the Commissioner preferably within a period of 90 days from the date of receipt of reference by the Commissioner: High Court [para 7, 8, 11 to 13]

GST - The present petition was filed in challenge of orders directing attachment of the petitioner's bank account - The petitioner claimed that such orders were issued without jurisdiction or authority of law and were in violation of the principles of natural justice.

Held - Notice issued - Respondent-Revenue granted four weeks' time to file counter affidavit - Matter listed for hearing on Sept 10, 2020 - The petitioner stated that the bank account attached contained sufficient balance to cover an appropriate amount to safeguard the interests of the Revenue - The petitioner claimed that the freezing of the petitioner's account has brought its business to a stand-still and that it is unable to pay for items imported by it - As the entire disputed amount is being secured, the Revenue authorities concerned and directed to retain a sum of Rs 45 lakhs as security and then provisionally lift the debit freeze instructions in respect of such account - This is conditional upon the petitioner depositing a bank guarantee of about Rs 15.08 lakhs for initial term of one year and to be renewed and kept alive during pendency of the present petition: HC

GST - Petitioner points out that search and seizure operation was carried out on 26.06.2020 at the premises of the petitioner and it was noticed that 20 Lakh liters of sanitizer had been manufactured by them - It was stated that out of the aforesaid, only 11 Lakh liters has been sold and there is stock of remaining 9 Lakh liters with the petitioner - That an artificial liability is being projected against the petitioner on the basis of imaginary figures; that two of the shareholders of the petitioner-Company namely Ajay Arora and Jagdish Arora have been arrested in exercise of the power under Section 69 of the GST Act; that there is no adjudication regarding the quantum of tax allegedly evaded; that inspite of the aforesaid the petitioner has deposited an amount of Rs.8 crores under protest as required by the department; that the other employees and Directors of the company have been threatened with arrest.

Held: Keeping in view the totality of facts, the assurance given by the counsel for the Revenue that no further recovery shall be effected till the demand is raised in accordance with law and that the matter is being kept for 05.08.2020 for further hearing, Bench directs that no coercive action shall be taken against the petitioner - it is clarified that the grant of interim protection regarding coercive steps shall not debar the respondents from carrying on the investigation till the next date of hearing; that unless the interim order is extended on the said date, it shall cease to exist thereafter; that the interim order passed shall not be taken as any expression of opinion on the merits of the controversy for deciding the bail matters of Ajay Arora and Jagdish Arora - Matter to be listed on 05.08.2020: High Court

GST - Anti Profiteering - The present petition assails the constitutionality and legality of the National Anti Profiteering Authority as well as Section 171 of the CGST Act and Rules 122, 126, 127 and 133 of the CGST Rules - The petitioner claims that the order passed by the NAA against it, is without jurisdiction and contradictory to statutory provisions in the sense that the NAA cannot be a complainant as well as an adjudicating authority - The petitioner also claimed that in the absence of a methodology, the entire proceeding before the NAA are in breach of the principles of natural justice and violate the provisions of Articles 14 and 19(1)(g) of the Constitution - The petitioner also stated its willingness to pre-deposit 10% of the profiteered amount in accordance with Section 107(6)(b) of the CGST Act.

Held - Notice issued to the parties - In view of the findings rendered in the cases of Phillips India Limited vs. Union of India & Ors. and M/s. Samsonite South Asia Pvt. Ltd. vs. Union of India and also considered that no grounds of financial hardship are pleaded in the present case, the petitioner is directed to pre-deposit the principal profiteered amount - Such amount be deposited in six instalments - Recovery of interest and penalty is stayed till further orders - Matter listed for hearing on Aug 24, 2020: HC

GST - Assessing Authority cancelled the petitioners GST registration on 19.9.2019 under Section 29(2)(c) of the Act, 2017 - petititioner had, thereafter, filed an application for revocation of the cancellation order but the same was rejected on 10.01.2020 and the first appeal filed was rejected on 13.02.2020 - in the absence of any GST Tribunal, the instant writ petition has been filed - it is submitted by the petitioner that the orders of the Assessing Authority and of the First Appellate Court cannot be sustained now in view of the Central Goods and Services Act (Removal of Difficulties Order), 2020 issued under Section 172 of the Act - Standing Counsel for the Revenue does not dispute the Gazette notification dated 25.06.2020.

Held: Under such circumstances, the order dated 10.1.2020 passed by the Assessing Authority and the Appellate Order dated 13.2.2020 are set aside - The application dated 07.12.2019, which was filed by the petitioner for the revocation of the cancellation order dated 19.9.2019, shall now be decided in accordance with law within a period of 15 days from the date of production of a copy of this order: High Court

GST - It is grievance of the writ applicant that the impugned order dated 22.05.2020 came to be passed without giving any opportunity of hearing to the writ applicant; that the impugned order came to be passed during the period of complete lock-down - Department has agreed to give an opportunity of hearing to the writ applicant and thereafter pass an appropriate fresh order and in view of the above, the impugned order dated 22.05.2020 is hereby quashed and set aside - matter is remitted to the respondent No.2 for giving an opportunity of hearing to the writ applicant and thereafter pass appropriate order in accordance with law - eight weeks time given - writ application is allowed: High Court [para 6 to 8]

GST - Writ applicant has prayed for reliefs viz. for quashing the MOV-11, directing release of goods and vehicle without demanding any security etc. - goods (Arecanut) as well as the vehicle came to be detained under Section 129(1) of the Act inter alia on the ground that E-way bill was not tendered for the goods in movement; documents tendered were found to be defective and later an order of confiscation came to be passed - After the final order of confiscation of the goods and the conveyance was passed, few more developments took place - The authority concerned decided to put the goods and the vehicle to public auction for the purpose of realising the amount towards tax, penalty and fine and in this regard a public advertisement came to be issued inviting bids from interested parties by determining the off-set price at Rs.46 Lac - writ applicants did nothing all this while and all of a sudden they woke up and are before this Court with the present writ application and that too on the date when the final bids received by the authorities are to be opened for the purpose of auction.

Held: Counsel for Writ applicants after taking appropriate instructions from his clients makes a statement that Rs.18 Lac shall be deposited with the respondent No.3 and the balance amount of Rs.18 Lac shall be paid by way of a Bank Guarantee of any Nationalized bank - As the writ applicants are ready and willing to deposit the amount towards their liability, Bench passes the following order that pursuant to deposit of Rs.36 lakhs, then the conveyance as well as the goods shall be immediately released in favour of the writ applicants; that it is open to writ applicants to prefer an appropriate appeal before the appellate authority under Section 107 of the Act, if they intend to question the legality and validity of the order of confiscation passed in Form MOV-11 and if any such appeal is preferred, the appellate authority shall hear the same in accordance with law - Application disposed of: High Court [para 10 to 12]

GST - The petitioner had approached the High Court seeking that directions be issued to the Revenue authorities concerned to disburse an amount of refund payable to the petitioner - The court had directed that keeping in view the strict timelines stipulated in Rules 90 and 91 of the CGST Act, the Revenue was to process the refund application within three days' time - The matter was then deferred for further hearing.

Held - The Revenue's counsel stated that the petitioner had agreed to reduce the quantum of the refund being claimed - It was also stated that the refund of the balance amount had been sanctioned - It was also stated that the GSTN had commenced work on the development and deployment of the functionality to file refund application by clubbing of FYs as per CBIC's Circular No. 135/05/2020 dated 31st March, 2020 and the same is likely to be deployed on the GST Portal by September 2020 - However, the petitioner claimed to be aggrieved by the order sanctioning the refund - As such order is appealable, the present petition and connected applications are disposed off with liberty to the petitioner to file appropriate proceedings: HC

GST - The present petition was filed by the petitioner seeking that directions be issued to the respondent-Revenue to disburse refund claimed by the petitioner u/s 54 of the CGST Act - The petitioner also sought that interest be granted to it as per Section 56 of the DGST/CGST Act.

Held - The Rules 90 and 91 of CGST/DGST Rules provide a complete code with regard to acknowledgement, scrutiny and grant of refund - They also provide a strict time line for carrying out such activities - For instance, Rules 90(2) and (3) of the DGST Rules state that within fifteen days from the date of filing of the refund application, the Revenue has to either point out discrepancy/deficiency in FORM GST RFD-03 or acknowledge the refund application in FORM GST RFD-02 - In the event deficiencies are noted and communicated to the applicant, then the applicant would have to file a fresh refund application after rectifying the deficiencies - In event of default or inaction in carrying out such activities in the stipulated period, interest is liable to be paid u/s 56 of the CGST/DGST Act - Admittedly, the petitioner's refund application dated 4.11.2019 has not been processed till date - No acknowledgement in Form GST RFD-02 is issued nor any deficiency memo was issued in Form RFD-03 within 15 day's time - Hence the refund application would be presumed to be complete in all aspects as per Rule 89 of CGST/DGST Rules - To allow the Revenue to issue a deficiency memo today would amount to enabling the Revenue to process the refund application beyond the statutory timelines as provided under Rule 90 of the CGST Rules - This could then also be construed as rejection of the petitioner's initial application for refund as the petitioner would thereafter have to file a fresh refund application after rectifying the alleged deficiencies - This would not only delay the petitioner's right to seek refund, but also impair petitioner's right to claim interest from the relevant date of filing of the original application for refund as provided under the Rules - Hence the Revenue has lost the right to point out any deficiency, in the petitioner's refund application, at this belated stage - Hence the Revenue is directed to disburse the refund amount along with interest, within two weeks' time: HC

GST - The present petition was filed by the petitioner to challenge the cancellation of its registration.

Held - Considering the order passed by the CBIC in S.O. 2064 (E). dated 25.06.2020 in respect of cancellation of GST registration, the Commercial Taxes and Registration Department of the Government of Tamil Nadu passed G.O.Ms.No.102 dated 26.06.2020 consequent upon such CBIC Notification - In light of the same, the petitioner filed memo seeking permission to withdraw the writ petition and to approach the Assessing Authority within the prescribed time limit - Hence the wrt petition is dismissed as withdrawn: HC

GST - The present petition was filed in contest of an order passed by the NAA, wherein the petitioner-company was held guilty of profiteering during the relevant period - The NAA directed that notice be issued to the petitioner, proposing to impose penalty on it for contravening the provisions of Section 171(3A) of the CGST Act, by indulging in profiteering.

Held - Notice issued to the parties - The petitioner is directed to deposit the profiteered amount before this court, within two weeks' time - Such amount be kept in the maximum interest bearing account awaiting the adjudication of the petition - Conditional upon such deposit being made, the operation of the NAA's order is stayed - The profiteered amount being for the period prior to incorporation in the Central Goods & Services Tax Act, 2017 of the provision regarding penalty for which show cause notice has been ordered to be issued, the issuance of such notice, if not issued till date, is stayed and if the notice has been issued, further proceedings in pursuance thereto are stayed - Matter listed for hearing on August 24, 2020: HC

GST - Petitioner challenges the order attaching its bank account for realising the tax dues amounting to a sum of Rs.83,58,962/- - Grievance of the petitioner is that in view of the present lockdown situation due to COVID-2019, the petitioner is not in a position to run the business and, therefore, they are not in a position to settle the dues immediately; that they only seek some time for making payment; that since the bank account is attached, the petitioner is not in a position to run the day-to-day life and even to pay salary to the employees; that the petitioner will pay the entire dues, if 6 months time is granted.

Held: Considering the present COVID-2019 pandemic situation and the continuous lock down and that the loss of business is not only to the petitioner but to various people, Court is of the view that some indulgence can be shown to the petitioner so that they can have a breathe by dealing with their account, more particularly, when they have given an undertaking to settle the dues within a period of 6 months - At this juncture, it is to be noted that the bank has already deducted a sum of Rs.12,45,662/- out of the petitioner's bank account - Writ Petition is disposed of with directions inter alia directing first respondent to de-freeze the bank account maintained by the petitioner : High Court [para 8, 10]

GST - Petition, besides challenging the vires of Section 171 of the Act, 2017 and Chapter XV of Rules, 2017, particularly Rules 126, 127 and 133 thereof, impugns the order dated 6th December, 2019 passed by the respondent No.2 National Anti-Profiteering Authority holding the petitioner, a builder, to have profiteered by an amount of Rs.3,45,22,974/- during the period of investigation and directing the petitioner to refund the said amount to the buyers of the flats under construction by the petitioner - Challenge is also made to the notice dated 17th January, 2020 issued to the petitioner to show cause, why penalty should not be imposed on the petitioner - petitioner states that out of Rs.3,45,22,974/-, benefit of an amount of Rs.1.53 crores has already been given to the flat buyers and now only the balance amount of Rs. 1.92 crores approx. remains; that in several other matters pending before this Court, stay has been granted, subject to deposit of 10% only of the amount; that since the petitioner has already given benefit to the flat buyers of much more than 10% of the assessed amount and thus the recovery of the balance amount be stayed - Petitioner also submits that the provision for penalty was introduced in the Act vide the Finance Act, 2019, with effect from 1st January, 2020 and since the assessment period is of prior thereto and as at the time of assessment the provision for penalty was not in force, the penalty proceedings should not be allowed to proceed

Held: Bench is of the opinion that granting an absolute stay with respect to the balance amount of Rs. 1.92 crores approx. may result in the flat buyers of the petitioner being left without a flat as well as without the benefit of the amounts which have already been ordered to be refunded to them - Bench is, therefore, not inclined to grant stay of recovery of the balance amount - Eight weeks' time is given to the petitioner to deposit the balance amount in this Court if the proof of having already given benefit of an amount of Rs.1.53 crores is furnished to the authority concerned - Subject to the said proof being furnished and such deposit being made, there shall be stay of recovery of the said amount - However, there shall be a stay of proceedings for recovery of penalty - 33 matters entailing common questions of law and which also arise in this petition, have been clubbed and ordered to be listed for hearing on 24th August, 2020: High Court [para 4, 15]

GST - Petition has been filed challenging the letter dated 11th June, 2020 and summon dated 06th July, 2020 issued by respondent No.3 whereby the petitioner has been asked to deposit Rs.2,69,21,228/- being alleged as inadmissible input tax credit and file DRC-03 challan without initiating any adjudication process either under Section 73 or Section 74 of the Act, 2017 - Counsel for respondent nos. 2 and 3 states that the intent behind issuing the impugned letter dated 11th June, 2020 was to give an opportunity to the petitioner to come forward and either explain the transaction or deposit the tax with minimum interest and penalty under Section 74(5) of the CGST Act without going through the adjudication procedure - It is also clarified that if after the investigation the respondent is not satisfied with the petitioner's response, it shall follow the adjudication process for recovery.

Held: Aforesaid statement made by counsel for respondent nos. 2 and 3 is accepted by the Court and said respondents are held bound by the same - It is clarified, as a matter of abundant caution, that as the demand is disputed by the petitioner, no coercive steps shall be taken for recovery of the said demand without following the adjudication process - However, the petitioner is directed to appear before the respondent nos. 2 and 3 and cooperate in the investigation process - Petition disposed of: High Court

GST - The subject matter of challenge is the notice of intimation under Section 74(5) of the Goods and Service Tax Act, 2017 of the amount of tax as ascertained by the authority - The impugned order is in the FORM GST DRC- 01A dated 03.03.2020 issued by the respondent No.2 - By the impugned communication, the writ applicant has been informed about his liability to pay the tax, interest and penalty to the tune of Rs.80,69,313/- - The impugned communication further states that the failure on the part of the writ applicant in depositing the requisite amount referred to above may entail a show cause notice under Section 74(1) of the Act, 2017 - Petitioner seeks setting aside of the impugned notice/order as being illegal and arbitrary and also grant interim relief restraining respondents from initiating any further proceedings including attachment and recovery - subject matter of challenge is only the legality and validity of the notice of intimation under Section 74(5) of the Act, 2017.

Held: Bench is of the view that a writ application challenging the notice of intimation in the FORM GST DRC-01A issued under Section 74(5) of the Act is not maintainable in law as it is just an intimation and it is up to the writ applicant whether to pay attention to such intimation or not - If the writ applicant deems fit to ignore it, the same may entail the consequence of further show cause notice under Section 74(1) of the Act, 2017 - In any view of the matter, even if a further notice under Section 74(1) of the Act, 2017 is issued, an opportunity of hearing will definitely be given to the writ applicant before his actual liability is determined under the Act, 2017 - writ application fails and is hereby rejected: High Court [para 5 to 7]

GST - The petitioner-company had filed application seeking refund under the CGST Act - Such refund claim was denied by the Revenue and such rejection of refund was sustained by the Appellate Authority - The present petition was filed in contest of such findings, claiming that the Appellate Authority concerned relied upon a Circular which had been withdrawn shortly from its inception, and so had erroneously allowed the Revenue's appeal - The petitioner also claimed that it had wrongly been held to be an Intermediary involved in the transaction of Export of Service - The petitioner also challenged the vires of Section 168 of the CGST Act, claiming that no mandate could be provided for directing the lower quasi-judicial authority to treat the Circular or Instructions issued by the Board, to be having binding effect.

GST - The petitioner, an individual, is the proprietor of two firms, both of which are facing proceedings for alleged evasion of tax - Proceedings were initiated against the petitioner for offences u/s 132(1)(a) (b) (c) (d) read with 132 (1) (i) (ii) - Thereafter, the petitioner was arrested as per provisions of Section 69 of the CGST Act - The petitioner's application for default bail u/s 167(2) of the CrPC was dismissed, thus leading to the present petition.

Held - The counsel for the petitioner seeks permission to withdraw the petition, so as to enable the petitioner to file a fresh writ petition - Hence the present petition is dismissed as withdrawn, with liberty to seek remedy as per law: HC

GST - The petitioner-company was issued a Show Cause Notice, proposing to cancel its registration under the CGST Act, on account of the petitioner not filing tax returns - The present petition was filed to assail the order cancelling the petitioner-company's registration under the CGST Act - The petitioner claimed to have submitted reply to Show Cause Notice issued to it, however, such reply was not considered by the Revenue before passing the order in question.

Held - The Revenue authority concerned proceeded to pass the order by completely overlooking the reply filed by the petitioner to the Show Cause Notice issued to it - Hence it is clear that the submissions made in the reply to SCN have not been considered at all - Thus the order in challenge is set aside, with liberty to the Revenue authority concerned to initiate fresh proceedings in accordance with law: HC

GST - Petition challenges the order dated 19th September, 2019 passed by the respondent u/s 54 of the CGST Act, 2017 whereby the petitioner's refund application has been rejected on the ground that it involves multiple tax periods – counsel for respondent Revenue submits that the preamble to the impugned order makes it abundantly clear that the order is appealable before the Additional Commissioner, GST and instead of exhausting the remedy of appeal available to the petitioner, it has directly rushed to this Court, which is impermissible - M/s Saraf Industries = 2020-TIOL-1214-HC-DEL-GST , order dated 20 th July 2020 relied upon.

Held: Keeping in view the aforesaid order dated 20th July, 2020 Bench is not inclined to entertain the present petition when the petitioner has an equally alternate efficacious remedy of preferring an appeal before the Additional Commissioner, GST - The present petition is accordingly disposed of with liberty granted to the petitioner to seek its remedies against the impugned order before the Appellate Authority, along with an application for condonation of delay - It is made clear that delay alone will not be a ground for the Appellate Authority to reject the appeal that may be preferred by the petitioner on merits - The Appellate Authority shall dispose of the appeal by way of a speaking order within eight weeks: High Court [para 5, 6]

GST - The assessee-company filed application for refund u/s 54 of the CGST Act - However, the same was rejected - Hence the present writ was filed, seeking that order rejecting refund be set aside.

Held - The present petition is not maintainable since the assessee has equally efficacious remedy of appeal to the jurisdictional Additional Commissioner of GST - Hence the petition is disposed of with liberty to the assessee to seek remedy before such authority: HC

GST - Anti profiteering - The present petition was filed to challenge the constitutionality and legality of the National Anti Profiteering Authority as well as Section 171 of the Central Goods and Services Tax Act and Rule 126 of the Central Goods and Services Tax Rules - The petitioner claimed that the absence of any methodology of the entire proceedings before the NAA is in breach of the principles of natural justixe - The NAA had held the petitioner guilty of profiteering and had directed it to deposit the principal profiteered amount - Through the present petition, the petitioner also sought that it be allowed to deposit such amount in instalments, in light of the COVID pandemic.

Held - Considering the ongoing pandemic, the petitioner is permitted to deposit the profiteered amount in six instalments - The interest amount as well as the penalty proceedings initiated by the Revenue are stayed till further orders - Matter listed for hearing on Aug 24, 2020: HC

GST - The petitioner, a Chartered Accountant, was arrested for offences u/s 132 (1)(b)(c)(f)(l) of the CGST Act - It was alleged that the assessee established fake firms which later claimed ITC on the basis of fake bills - It was alleged that ITC to the tune of Rs 100 crores was availed in such a manner - The petitioner filed the present application seeking to be released on bail - The petitioner claimed that two other persons who were arrested along with him, had already been released.

Held - The petitioner is directed to be released on bail, conditional upon the petitioner furnishing a personal bond of Rs 1 lakhs along with two sureties of Rs 50000/- each - This is also conditional upon the petitioner undertaking to appear before the Trial Court whenever called on the date of hearing: HC

GST - The present application was filed by the applicant seeking early hearing of the matter as well as seeking that directions be issued to accept the petitioner's application seeking disbursal of refund for the relevant period.

Held - Considering the strict timelines stipulated in Rules 90 and 91 of the CGST Rules, 2017, the authorities concerned are directed to process the petitioner's manual application within three days' time - Matter be listed for hearing on July 23, 2020: HC

GST - The petitioner-company manufactures Insoles - It was registered under the Puducherry VAT Act and later migrated to the Puducherry GST Act - Upon the enactment of the Puducherry GST Act, the petitioner-company had attempted to migrate existing credit under the VAT scheme to the GST portal - Section 139 of the PGST Act provides for migration of existing tax payers - As per procedure, existing dealers who held a valid PAN were provided with a provisional user ID and password, generated by the Goods and Service Tax Network (GSTN) - The petitioner claimed that no provisional ID was received from the GSTN and so proceeded to utilise an ID using random units that had no basis and were defective - Business was conducted using such ID and credit was earned - The petitioner was unable to utilise the credit on the basis of the incorrect ID and so applied for a new registration, which was granted - The petitioner filed returns and sought to claim credit of the ITC for the earlier period, but was unable to do so - The petitioner addressed several communications seeking ID and password, but received no response - Hence the petitioner filed the present petition seeking that directions be issued to the authorities concerned to issue a user name and password to complete the migration process, upload returns in GSTR-1 and GSTR-3 and claim TRAN 1 credit under the old provisional ID earned from the past period.

Held - The ppropriate authority is directed to issue the necessary positive recommendations for migration/transition of credit available, within a period of four weeks from date of receipt of a copy of this order and R2 will, in turn and within four weeks from receipt thereof, issue necessary intimation to the petitioner permitting it to access the portal and upload the forms - The petitioner's prayer to be permitted to deposit tax, penalty and interest under Section 50 of the PGST Act is immature, as no assessment is made in the present case - The petitioner may canvass the same at time of assessment: HC

GST - Validity of Rule 117 of the CGST Rules, 2017 is under challenge on the grounds that it is ultra vires Section 140 of the CGST Act and infringes Articles 14 and 300A of the Constitution - Petitioner further prays that the Respondents should be directed to permit the Petitioner to file Form GST TRAN-1 either electronically or manually to claim the transitional input tax credit of Rs.4,70,008/-

Held: Section 140 of the CGST Act read with Rule 117 of the CGST Rules enables a registered person to carry forward the accumulated ITC under erstwhile tax legislations and claim the same under the CGST Act - In effect, it is a transitional provision as is evident both from Section 140 and Rule 117 - It is evident that ITC cannot be availed of without complying with the conditions prescribed in relation thereto - Prior to the amendment to Section 140 of the CGST Act, the power to frame rules fixing a time limit was arguably not traceable to the un-amended Section 140 of the CGST Act, which contained the words "in such manner as may be prescribed", because such words have been construed by the Supreme Court in cases such as Sales Tax Officer Ponkuppam v. K.I. Abraham [(1967) 3 SCR 518] as not conferring the power to prescribe a time limit - Nevertheless, Bench views that it was and continues to be traceable to Section 164, which is widely worded and imposes no fetters on rule making powers except that such rules should be for the purpose of giving effect to the provisions of the CGST Act - A fortiori , upon amendment of Section 140 by introducing the words "within such time", the power to frame rules fixing time limits to avail Transitional ITC is settled conclusively - In SKH Sheet Metals [2020-TIOL-1031-HC-DEL-GST], the Delhi High Court concluded, in paragraph 26, that the statute had not fixed a time limit for transitioning credit by also referring to the repeated extensions of time - Given the fact that the power to prescribe a time limit is expressly incorporated in Section 140, which deals with Transitional ITC, and Rule 117 fixes such a time limit, Bench is unable to subscribe to this [ SKH Sheet Metals ] view - The fact that such time limit may be extended under circumstances specified in Rule 117, including Rule 117A, does not lead to the sequitur that there is no time limit for transitioning credit - Section 16(4) of the Act is indicative of the legislative intent to impose time limits for availing ITC - Keeping the above statutory backdrop in mind, in the context of Transitional ITC, the case for a time limit is compelling and disregarding the time limit and permitting a party to avail Transitional ITC, in perpetuity, would render the provision unworkable - Bench concurs with the conclusion of the Bombay High Court in Nelco [2020-TIOL-641-HC-MUM-GST] that both ITC and Transitional ITC cannot be availed of except within the stipulated time limit - There can be no quarrel with conceptual position stated in in SKH Sheet Metals by the Delhi High Court that ITC is the heart and soul of GST legislations inasmuch as such legislations are designed to prevent the cascading of taxes; however, it is not a logical corollary thereof that time limits for availing ITC and, in particular, Transitional ITC, are inimical to the object and purpose of the statute - Division Bench of this Court in C. Bright v. The District Collector, [2019 SCC Online Mad 2460] captured the relevant factors to determine whether a provision is directory or mandatory, illustratively, in paragraph 20 - Those factors are - the use of peremptory or negative language, which raises a rebuttable presumption that the provision is mandatory; the object and purpose of the statute and the provision concerned; the stipulation or otherwise of the consequences of non-compliance; whether substantive rights are affected by non-compliance; whether the time limits are in relation to the exercise of rights or availing of concessions; or whether they relate to the performance of statutory duties - In this case, the peremptory word "shall" is used - The relevant rule deals with the time limit for availing Transitional ITC by carrying it forward from the credit balance under tax legislations which have been repealed and replaced by the CGST Act - Thus, the object and purpose of Section 140 clearly warrants the necessity to be finite - ITC has been held to be a concession and not a vested right - In effect, it is a time limit relating to the availing of a concession or benefit - If construed as mandatory, the substantive rights of the assessees would be impacted; equally, if construed as directory, it would adversely impact the Government's revenue interest, including the predictability thereof - On weighing all the relevant factors, which may be not be conclusive in isolation, in the balance, Bench concludes that the time limit is mandatory and not directory: High Court [para 17, 18]

GST - Rule 117 specifies that the return in Form GST TRAN-1 is required to be filed electronically on the common portal - This requirement is not satisfied by handing over the form in person to the Sales Tax Collection Inspector, Tiruvannamalai - Consequently, the Petitioner has completely failed to make out a case to direct the Respondents to permit the Petitioner to file Form GST TRAN -1 and claim the Transitional ITC of Rs.4,70,008/- - if any dispensations are granted by the tax authorities with regard to availing of Transitional ITC, whether by filing Form GST TRAN-1 or otherwise, and to which the Petitioner may be entitled, this order will not preclude the Petitioner from making a claim for Transitional ITC - Petition dismissed: High Court [para 19]

GST - Applicant seeks recall/revoke/modification or vacating the order dated 26th June, 2020 and seeks refund of the amount deposited by the Applicant as soon as law amending Section 50(1) of CGST Act, 2017 is enacted/notified.

Held: Bench makes it clear that if Section 50(1) of CGST Act, 2017 is amended in future and if according to the Applicant, it is entitled to seek refund of any such amount, the Applicant would be at liberty to make an application for refund which would be decided by the Appropriate Authority in accordance with law - Application disposed of: High Court [para 3]

GST - Petition has been filed seeking a direction to the respondents to process the petitioner's TRAN-1 form and to allow the petitioner to avail benefits of Input Tax Credit of Rs.5,85,82,261/- as available with him on 01st July, 2017 or allow the petitioner to adjust the aforesaid amount towards recovery, if any, in due course as assessments for a number of years are under consideration.

Held: Counter-affidavits and rejoinder-affidavit to be filed - To await the judgment of the Supreme Court in Union of India Vs. Brand Equity Treaties Limited & Ors., SLP (C) 7425-7428/2020 = 2020-TIOL-115-SC-GST-LB , list on 16th September, 2020 : High Court [para 8]

GST - Supply of print on flex is classifiable as Goods only as per s.7 of the CGST Act, 2017 r/w Schedule II, Sl. no. 1(a) of the Act; such “goods” are covered under Tariff Item 4911 and attracts GST @12%, Sr. no. 132 of Schedule II of 1/2017-CTR - Supply of print on flex used for non-commercial purpose does not change the classification per se and attracts the same rate of tax of 12%: AAR

GST - Transaction of printing of content provided by the customer on Poly Vinyl Chloride banners is supply of printed trade advertisement material and is classifiable under “goods” only as per s.7 of the Act, 2017 read with Schedule II, Sl. no. 1(a) of the Act, 2017 - such goods are covered under Tariff Item 4911 and attracts GST @12% - clarification provided in Circular 11/11/2017-GST dated 20.10.2017 and reiterated in F.No. 332/2/2017-TRU dated December 2017 against Sl. no. 59 of consolidated FAQ is relied upon: AAR

GST - Applicant bagged a work order through agreement dated 02.06.2016 from Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) for construction of Millennium Tower at Madhurawada, Visakhapatnam district - Such activity is a composite supply of Works Contracts as defined in s.2(119) of the Act, 2017 - APIIC is a government entity within the meaning of para 4 of clause (x) of 11/2017-CTR as amended - however, as the purpose of construction/building is meant for accommodating Small and Medium Enterprises (SMEs) and StartUps which are 'not other than for commerce, industry or any other business or profession', the concessional rate of 12% GST under 24/2017-CTR r/w 31/2017-CTR is not available to the applicant - activities under the agreement undertaken by the applicant is classifiable under SAC 9954 under Construction Services and fall under Entry no. 3(ii) of 11/2017-CTR and applicable rate of GST is @18%: AAR

GST - Tamarind Seed is classifiable under Schedule I as per Sr. no. 70 of 1/2017-CTR under Tariff Item 1207 and applicable rate of tax is @5% GST - Applicant at the time of personal hearing admitted that the tamarind seed/kernel as traded by them is sold to Millers and meant for commercial/industrial purpose and moreover no certificate or any other document is submitted certifying that the tamarind kernel/seed is meant for sowing purpose because had it been so it would have attracted Nil rate of tax under HSN Code 1209 (Forest trees seed): AAR

GST - Section 17(5)(d) of the CGST Act, 2017 provides that no ITC is available in respect of any goods or services received by a taxable person for construction of an immovable property on his own account even if such inputs and input services are used in the course and furtherance of business - in the instant case, the applicant himself has built the immovable property (parking) for which he has received the Paver blocks - s.17(5)(d) squarely applies to the instant case and, therefore, the applicant cannot avail any Input Tax credit - since the Orissa High Court decision in Safari Retreats is pending before the Supreme Court, the same has not attained finality and, therefore, cannot be relied upon: AAR

GST - Shatamrut Chyavan is an animal feed supplement and is correctly classifiable under heading 2309 9010 and attracts Nil rate of GST in terms of Sl. no. 102 of 02/2017-CTR: AAR

GST - Authority has no jurisdiction to pass ruling on such matters pertaining to supply of goods or services or both which are being undertaken outside Maharashtra State by a different and distinct entity - without going into the merits of the case, the application is rejected as not maintainable: AAR

GST - Water Slides shall fall within the meaning of the term apparatus, equipment and machinery, therefore, shall be eligible for claim of ITC - Steel and civil structure on which Water slides are installed are part of the plant and machinery, hence credit is available - similar is the case with foundation for Wave pool, credit admissible - however, insofar as Machine room, which is a civil structure, erected for protecting machine is neither a foundation nor civil structure for machine, therefore, inputs relatable to construction of the Machine room is inadmissible - As regards Input tax on goods and services used for area development and preparation of land on which Water slides are placed, such area development expenditure are part of cost of the land and thus are interminably bound with land - such expenses are liable to be capitalised under the head land, therefore, on account of the specific exclusion of land from the meaning of 'plant and machinery', ITC related to land development shall not be available - ITC related to construction of swimming pools and wave pools, subject to its capitalisation shall not be available: AAR

GST - Applicant is engaged in business of trading of coal - when coal is imported it is stockpiled at port itself at the designated place for subsequent sale to customers - applicant seeks to know as to whether they are liable to discharge tax liability @18% on Coal handling and distribution charges wherever supply of such services is intended to be made expressly to a customer or will the applicant be entitled to charge GST @5% as applicable on supply of coal; whether they are entitled to avail and utilise ITC for discharging liability towards supply of coal.

Held: Coal handling and distribution charges will be taxable @18% and not @5% wherever supply of such services only is intended to be expressly made to a customer - Input tax credit availed as per the conditions specified in s.16 of the Act shall be allowed for discharging the liability towards supply of coal and supply of coal handling and distribution charges respectively: AAR

GST - Supply towards provision of services in respect of activity of mounting/fabrication of bodies on chassis provided by the customer should be treated as supply of ‘bus' or provision of services in respect of activity of mounting/fabrication is outsourced to the applicant by owner/provider of chassis, in no case the ownership of the chassis belongs to the applicant - in both scenarios, the services are taxable under SAC 998881 ‘Motor Vehicle and trailer manufacturing services' and under Entry no. 26(ii) as ‘Manufacturing services on physical inputs (goods) owned by other' - taxable @18% GST: AAR

GST - Preparation of a kind used in Animal feeding - bio processed meal is classifiable under HSN Code 2309 9090 and is exempted in terms of Sl. no.102 of 02/2017-CTR - Mistake/errors occurred on the face of the earlier order 01/2020 dated 02.01.2020 [ 2020-TIOL-48-AAR-GST ] passed by the Authority, hence rectified: AAR

GST - The applicant company has its principal place of business at Indore, with production facility at Pithampur - The applicant had supplied several furniture items to a Govt Department and issued invoices charging tax @ 18%, by treating the supply of furniture as composite supply of furniture, where item-wise price of the furniture was charged in the invoice - The applicant approached the AAR seeking to know whether work related to supply, installation and fixing of customized furniture in a building is composite supply of goods or a works contract - The applicant also sought to know the applicable rate of GST on such supply, if it is so.

Held - The activities of the applicant, of supply, installation and fixing of furniture, is not classifiable under Heading 9954 - Construction service - The contract conforms to composite supply as per Section 2(30) of the CGST Act - The supply made by the applicant consists of two taxable supplies of goods and services which were naturally bundled and supplied in conjunction with each other, where the supply of goods is the principal supply - Such goods are classifiable under Heading 9403 of GST Tariff and are taxable at rate applicable at time of supply: AAR

GST - The applicant company was established with the objective of constructing a hotel at Jabalpur - The hotel is in construction stage - The applicant approached the AAR seeking to know whether the ITC on purchase of lift would be available to the hotel as it has been used in the course of for furtherance of business.

Held - The ITC of tax paid on lifts procured and installed in the hotel building shall not be available to the applicant as the same is blocked in terms of Section 17(5)(d) of the CGST Act, becoming an integral part of the building: AAR

GST - The applicant company is engaged in providing oilfied services to Exploration and Production companies globally - The applicant contracted for supply of bundled oilfield services to support various oil & gas related operations in the KG Offshore, East Coast of Indian offshore waters - The applicant approached the AAR seeking to know GST liability on reimbursement received towards Lost in Hole/damages beyond repair equipment, under the contract with the customer - The applicant also sought to know if reimbursement received towards LIH equipment can be considered supply as per Section 7 of CGST Act and hence liable to GST.

Held - The reimbursement towards LIH equipment can be considered to be a supply u/s 7 of the CGST Act - Such amount is classifiable as Supply of Goods as per Section 7 of the Act - Depending on nature of actual goods involved in the relevant activity, their classification is as per HSN notified for the goods and the classification rules made in this regard - Hence the provisions for chargeability and levy of GST under the CGST Act and Rules as applicable to supply of goods will apply: AAR

GST - The applicant is a society engaged in serving as a knowledge resource hub for promotion of goods governance - It aims to facilitate multi-disciplinary network of governance and to recognize and promote research, best practices and overall improvement in practices of governance - The applicant approached the AAR seeking to know whether the amount recovered by the applicant from other Government Departments for doing research work and study, which helps in making policies or understand its impact, would attract GST - It also sought to know if services provided by applicant to other Govt Departents are covered under Entry 8 of Exemption Notfn No 12/2017-CT(R).

Held - The amount recovered by the applicant from other Govt Departments for doing research work and study which helps make policies or understand their impact, are exempt, subject to satisfaction of conditions laid down in Entry 3 of Notfn No 12/2017-CT(R) - It has to be seen for each and every activity, whether pure services are provided to the Hovt by way of any activity in relation to any function entrusted to a panchayat under Article 243G of the Constitution or in relation to any function entrusted to a municipality under Article 243W of the Constitution - Hence if all condition in Entry 3 of the Notfn No 12/2017-CT(R) are satisfied, then the amount recovered by the applicant from other Govt Departments shall be exempt - Also, the applicant does not qualify to be Central Govt, State Govt or local authority - Hence servces provided by the applicant to other Govt agencies and Departments, are not exempt under Entry 8 of Notfn No 12/2017-CT(R): AAR

GST - Applicant was granted affiliation by the National Council for Vocational Training (NCVT) in respect of vocational skills pertaining to formal trades viz. diesel mechanic, computer operator and programming assistance (COPA), welder, dress making and motor mechanic - applicant falls under the definition of ‘educational institution' in terms of clause 2(y)(iii) of the notification 12/2017-CTR - Services provided by applicant under vocational training courses recognised by National Council for Vocational Training (NCVT) is exempted under Entry at Serial no. 66(a) of 12/2017-CTR - applicant is not a Central/State government, Union Territory or local authority and, therefore, the entry no. 64 to the notification is inapplicable: AAR

GST - Applicant is engaged in conducting chit auctions - applicant is responsible to pay the prize money by due date to the winner of auction, therefore, collection of amount from members is mandatory for payment of prize money to the winner by due date - however, many a times, the subscribers fail to deposit subscriptions by the specified date and in such a scenario, the applicant is borrowing the money from banks on payment of interest and making payment to the members winning the auction - in order to maintain discipline in payment and also to cover the interest cost, the applicant charges interest/penalty, by whatever name called, from the members paying the subscriptions belatedly and the interest is dependent upon the period of delay from specified date to actual date of payment - Applicant has sought a ruling on the following issues - (a) whether the interest/penalty collected for delay in payment of monthly subscription by the members forms a supply under GST, and, (b) If the said interest/penalty is a supply, what is the classification and rate of tax applicable on the said supply.

Held: The additional amount being charged on delayed payment and termed as interest, late fee or penalty on the delay in paying the subscription amount cannot be bifurcated as such additional payment does not have its own classification and it is taking colour from the original supply i.e. supply of financial and related services - in this case, the financial and related service is the principal supply and all other ancillary supplies shall take colours from the principal supply itself and it shall be classified as principal supply i.e. financial and related services - Having regard to the nature of transaction it cannot be said that the chit company has extended any deposit, loans or advances to its customers hence the additional amount being charged cannot be treated as ‘interest' so as to be held entitled to exemption in terms of Entry no. 27 of 12/2017-CTR - Chit amount will also not come under the purview of actionable claim - additional amount being charged in delay of payment, by whatever name, called should be classified as principal supply and the classification of the same cannot differ from the original supply - hence additional amount charged on delayed payment shall be taxed as per original supply i.e. supply of financial and related services; chargeable @12% GST as per Sl. no. 15 of 8/2017-ITR: AAR

GST - Applicant are the service providers of Municipal Solid Waste Management solutions and they offer solutions involving segregation, treatment, recycling of Municipal Solid Waste (MSW) and thus clearing MSW landfills - Tirupati Smart City Corporation, Tirupati Municipal Corporation has invited tenders for ‘Solid waste management project - remediation of existing MSW dumpsite at Ramapuram through bio-mining process under implementation of the smart city mission in Tirupati' and the applicant was awarded the project - Applicant, therefore, seeks to know the classification of such services provided by them, whether the services are exempted, whether the service recipient is a ‘governmental authority' and whether the governmental authority is liable to deduct TDS.

Held: Services provided by the applicant fall under Sl. no. 32 of Heading 9994 of 11/2017-CTR - Service recipient M/s Tirupati Smart City Corporation is a ‘governmental authority' as per the definition given in notification 12/2017-CTR - Service recipient being a governmental authority, supply made by applicant is exempted in terms of Sl. no. 3 of 12/2017-CTR - since the services are exempted, there is no question of the government authority being held liable to deduct TDS: AAR

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - applicant alleges that the respondent, a franchisee of M/s Subway Systems India P Ltd. has profiteered inasmuch as despite reduction in the GST rate from 18% to 5% w.e.f 15.11.2017, the respondent had not passed on the commensurate benefit of tax reduction as he had increased the base prices of his products - DGAP has in its report concluded that the respondent has profiteered by an amount of Rs.7,53,854/- including GST on the base profiteered amount in respect of the supplies made during the period 15.11.2017 to 30.06.2019 by increasing the base prices of the products despite reduction in the GST rate from 18% to 5% - Authority concurs with this report and holds that the contentions made by the respondent are unsustainable - accordingly, the respondent is directed to reduce his prices commensurately in terms of rule 133(3)(a) of the CGST Rules - since the recipients are not identifiable, the respondent is directed to deposit an amount of Rs.7,53,854/- in two equal parts each in the Central Consumer Welfare Fund and the Rajasthan State Consumer Welfare Fund as per the provisions of rule 133(3)(c) of the Rules along with interest payable @18% - amount to be deposited within three months and the Commissioners CGST/SGST concerned to submit compliance report within four months - for the aforesaid contravention of s.171 of the Act, penalty is imposable u/s 171(3A) of the Act, for which purpose SCN is to be issued - although report of DGAP received on 31.12.2019 and order was required to be passed within six months, due to the pandemic and read with notification 55/2020-CT, order is passed on 16.07.2020: NAA

- Application disposed of : NATIONAL ANTI-PROFITEERING AUTHORITY

GST - Anti-Profiteering - S.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent in respect of purchase of flat in the respondent's “Avadi” project at Chennai - It is alleged that the respondent had not passed on the benefit of Input Tax Credit - DGAP in its report dated 18.12.2019, after reinvestigation, has submitted that the ITC as a percentage of the total turnover which was available to the respondent during the pre-GST period was 0.00% and during the post-GST period this ratio was 7.06% and, therefore, the respondent has benefited from the additional ITC to the tune of 7.06% of the total turnover which he was required to pass on to the flat buyers of this project - DGAP has also found that the respondent has not reduced the basic prices of his flats by 7.06% due to additional benefit of ITC and by charging GST at the increased rate of 12% on the pre-GST basic prices, he has contravened the provisions of s.171 of the Act; that the amount of benefit of ITC which has not been passed on by the respondent or the profiteered amount came to Rs.2,87,64,178/- which included 12% GST; that the DGAP confirms that the respondent has already passed on an amount of Rs.7,71,830/- as ITC benefit to the 206 buyers including applicant no. 1 - that after adjusting this amount, the actual profiteered amount in respect of applicant no.1 is Rs.1,71,830/- including 12% GST and Rs.2,78,25,075/- including 12% GST in respect of 205 other flat buyers - Contentions of the respondent are not found to be acceptable by the Authority - Authority, therefore, agrees with the report of the DGAP and accordingly directs the respondent to pass on the profiteered amount to the applicant and the other 205 flat buyers along with interest @18% within a period of 3 months - present investigation is conducted up to 31.10.2019 only and the respondent has not yet received the Completion Certificate, therefore, he is liable to pass on the benefit of ITC which would become available to him till the date of issue of CC - the Commissioner CGST/SGST concerned is directed to ensure that the respondent passes on the benefit of ITC to the eligible flat buyers - for the contravention of the provisions of s.171(1) of the Act, the respondent is liable for imposition of penalty u/s 171(3A) of the Act read with rule 133(3)(d) of the Rules - Commissioners concerned are directed to monitor the instant order and report compliance within a period of four months - considering the pandemic and read with notification 55/2020-CT dated 27.06.2020, the present order is passed: NAA

GST - Anti Profiteering - A complaint was filed against the respondent-company, before the Rajasthan State Screening Committee, alleging that the respondent had profiteered from sale of flats in a residential project developed by it - It was alleged that the respondent had not passed on benefit of ITC by way of commensurate reduction in the price of the flat - Thereafter when the matter reached the DGAP, the respondent did not reply to any of the summons issued u/s 70 of the CGST Act or the calls by the DGAP to produce the relevant evidence - Having exhausted all options to collect the requisite documents, a team of officers visited the premises of the respondent, who then collected the necessary evidence and a statement of facts was signed by the respondent's staff members who were present there - Considering the evidence so collected, the DGAP proceeded to calculate the ITC required to be passed on by the respondent to each flat buyer or the profiteered amount as Rs 1.70 crores, which included 12% GST on the base profiteered amount - The DGAP claimed that the respondent contravened the provisions of Section 171 of the CGST Act in as much as the additional benefit of ITC @ 5.38% of the base price received by the respondent durng the relevant period, was not passed on to the flat buyers - It was also noted that investigation had accounted for 177 buyers only, whereas the respondent sold flats to 217 buyers - Hence it was observed that the benefit of ITC in respect of these 40 units also had to be calculated when the consideration was received from such units, by taking into account the proportionate ITC.

Held - The methodology adopted by the DGAP to compute the benefit of additional ITC required to be passed on by the respondent, is correct, logical and reasonable and is in consonance with provisions of Section 171(1) of the CGST Act and is reliable - The additional amount realized by the respondent, is directed to be refunded to the flat buyers concerned, along with interest @ 18% per annum, commencing from the date on which the amount was collected till the date on which payment is made u/r 133(3)(b) of the Rules - It is clear that the respondent denied benefit of ITC to the flat buyers - Hence the respondent is liable to face penalty u/s 171(3A) r/w Rule 133(3)(b) of the CGST Act - Notice be issued to the respondent, proposing to impose penalty: NAA

Seeks to amend Notification no. 13/2020-Central Tax in order to amend the class of registered persons for the purpose of e-invoice