GST NEWS

GST Compensation - Rajasthan opts for Option-1; to get Rs 4600 Cr as special borrowing

GST - 4.95 Cr e-invoice generated in Oct month by 27.4K taxpayers

GST Compensation - Centre releases Rs 6,000 Cr more to 16 States & 3 UTs

90 lakh GSTR-3B filed; Rs 1.05 lakh Cr, including Rs 8K Cr Cess, collected in Oct month

GST - DGGI nabs man accused of Rs 392 Cr ITC fraud

GST - Another kingpin nabbed in Rs 1278 Cr ITC fraud

GSTR-9 & 9C for FY 2018-19 - Deadline further Extended to Dec 31

GST Compensation - Centre borrows Rs 6K Crore for 16 States

GST CASES

2020-TIOL-167-SC-GST-LB

Nipun Malhotra Vs UoI

HIGH COURT CASES

2020-TIOL-1921-HC-AHM-GST

Nakoda And Company Vs UoI

CGST - Applicant is engaged in business of trading of pan masala and is registered under provisions of CGST Act, 2017 - They had placed an order with one M/s. Atharva Enterprises for supply of pan masala - The said goods were to be transported from Ujjain, Madhya Pradesh in a vehicle and were to be delivered at Ahmedabad, Gujarat - The ground on which authority proposes to confiscate the goods and vehicle is not tenable in law - The goods and the vehicle can be detained under Section 129 of the Act only if such goods are transported in contravention of provisions of the Act or the Rules made thereunder - The court specifically inquired with Mr. Dave, Assistant Government Pleader as to whether any provision of the Act or the Rules could be said to have been contravened with regard to the transaction in question - Mr. Dave, with his usual fairness pointed out that when the goods were in transit and detained, it cannot be said that there was any contravention of provisions of the Act or the Rules - However, according to Mr. Dave, the authorities have grave suspicion that the driver of vehicle might have entered Ahmedabad on the same E-way bill and might have succeeded in getting out thereafter without payment of any tax - Thus, the case of Assistant Government Pleader is one of evasion of tax for some transaction which is unknown - The SCN under Section 130 of the Act cannot be issued on a mere suspicion - There has to be some prima facie material on the basis of which the authority may arrive at the satisfaction that the goods are liable to be confiscated under Section 130 of the Act - The notice in Form GST MOV-10 is set aside - It is clarified that if there is any other inquiry to be made as regards any other transaction, it is open for authority to initiate and carry out such inquiry: HC

- Writ application allowed: GUJARAT HIGH COURT

2020-TIOL-1920-HC-AHM-GST

SB Traders Vs State Of Gujarat

GST - Petition was filed inter alia seeking quashing of MOV-10 (confiscation notice) - Petitioner informs that the final order in Form MOV-11 has been passed and such order would be an appealable order under Section 107 of the Act - It is also pointed out that three months back, an application was filed under Section 67(6) of the Act for provisional release of the goods and the conveyance, however, no orders have been passed on such application.

Held: Bench disposes of the writ application with a direction to the authority concerned to immediately take up the application filed by the writ applicants under Section 67(6) of the Act for the provisional release of the goods and the conveyance and pass an appropriate order in accordance with law within a period of one week from the date of the presentation of this order - Application disposed of: High Court [para 4]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-1918-HC-AHM-GST

Imran Impex Vs State Of Gujarat

GST - Case of the department is bogus billing without transit or delivery of goods only for the purpose of claiming input tax credit; that although the driver of the vehicle was able to produce the E-way bill and the invoice, yet, the department is inquiring as to in what manner the writ applicant procured the goods to be supplied to the purchaser; that if the procurement of the goods itself is bogus, then, such goods can always be confiscated under Section 130 of the GST Act - Being dissatisfied with the seizure of the goods and vehicle and also the issue of notice in Form GST MOV 10, the writ applicant has come up with the present writ application.

Held: Bench is of the view that it should not interfere at this stage of show cause notice as the inquiry is in progress - However, considering the fact that when the vehicle was intercepted, the driver was able to produce a valid E-way bill and also the invoice, at least, the goods and the conveyance should be ordered to be released subject to the final outcome of the confiscation - Writ application is disposed of with a direction to the respondent No.2 to release the vehicle and the goods after obtaining a bond of Rs.11,73,480/- from the writ applicant - The inquiry with respect to Form GST MOV-10 shall proceed further in accordance with law - Writ application stands partly allowed: High Court [para 14 to 16]

- Application partly allowed: GUJARAT HIGH COURT

2020-TIOL-1917-HC-ORISSA-GST

GST - Petitioner, Director and authorised signatory, has filed the present petition for release on bail - Offences alleged are punishable u/s 132(1)(b) and 132(1)(l) of the Act, 2017 - Allegation is that the petitioner has stage-managed invoices meaning that the companies have issued invoices indicating sale of goods/raw materials used by different manufacturing units of steel and aluminium but without actual movement of goods, and, thereby enabling the consignee firms to claim Input Tax credit - To hoodwink the Revenue that there was no movement of goods pursuant to the invoices, the petitioners have also shown the movement of goods in different vehicles with the help of one of the co-accused and some of which are not at all transport vehicles and received payments through bank from such companies and which was ultimately siphoned back to the source - The petitioner was accordingly taken into custody and inquiry was conducted - In this way, the petitioner has caused a huge loss to the revenue of around Rs.19 crores by claim of ITC without foundation inasmuch as the alleged invoices of goods are stage-managed - Bench had earlier rejected the prayer for bail as well as interim bail on 08.02.2019 and 07.03.2019 respectively and accordingly the petitioner is in custody since then - Petitioner has again come before the Court seeking his release on bail in the present bail application.

Held: Petitioner has been indicted in a heinous and serious offence i.e. economic offence causing loss of Rs.19 crores revenue to the government exchequer and also his alleged overt act contributed to frustrate the avowed object of bringing reform tax law brought by the UOI in the shape of GST and Rourkela is stated to be an epicentre of such fraudulent activities in India which has spread to other parts of the country, Court is not inclined to review its earlier order rejecting the prayer for bail of the petitioner only on the ground that the petitioner remained in custody for some time more - But, considering the fact that the petitioner is languishing in custody for more than two years and also the fact that due to spread of Pandemic Covid-19 hardly any chance of the trial being concluded in near future, this Court directs the Court in seisin over the matter to release the petitioner on interim bail in the aforesaid case for a period of sixty days with the condition that he shall surrender to the custody of the Court on 61st day of his release from custody - Court in seisin over the matter before release of the petitioner shall put such other terms and conditions as deemed just and proper to ensure his return to custody - Court also shall do well to take all effective steps to conclude the trial within six months - Application stands disposed of: High Court [para 7, 8]

- Application disposed of: ORISSA HIGH COURT

2020-TIOL-1916-HC-KAR-GST

Urbanize Developers India Pvt Ltd Vs ACCT

GST - Petition filed seeking a direction to the Assistant Commissioner of Commercial Taxes to consider the petitioner's representations dated 3.09.2020 and 10.09.2020 and to unblock the petitioner's Electronic Ledger - Petitioner submits that the respondent could have blocked the petitioner's Electronic Ledger only in exercise of power under Rule 86A of the GST Rules, and this Rule has inbuilt safeguards inasmuch as it provides that the Electronic Ledger could be blocked for the reasons to be recorded in writing - However, the email dated 7.2.2020 of the respondent does not record any reasons, and given the provisions of the GST Act and for the reasons elaborated in the representation dated 03.09.2020, it is permissible to avail Input Credit belatedly subject to payment of late fee - Respondent submits that the representation is given by the petitioner only on 03.09.2020, and the petitioner's representations will be considered and suitable decision taken, if reasonable time is granted.

Held: Court is of the considered view that the writ petition could be disposed of, without expressing any opinion on merits, permitting the petitioner to file a representation with the Assistant Commissioner of Commercial Taxes - LGSTO - 20, Bengaluru enclosing a copy of this order, and this Officer shall expeditedly consider the petitioner's representations but within an outer period of 6 [six] weeks from the date of such representations - Petition disposed of: High Court [para 4]

- Petition disposed of: KARNATAKA HIGH COURT

2020-TIOL-1899-HC-TELANGANA-GST

Sree Rama Steels Vs Deputy State Tax Officer

GST - Petitioner alleges that in order to save transport expenditure and time in getting the goods transported to (i) the petitioner's premises at Proddatur, Andhra Pradesh and (ii) later on to the buyer's premises also at Proddatur, Andhra Pradesh, and (iii) again transporting them to the Job work site in Telangana State, at the request of M/s.Laxmi Narasimha Constructions, Proddatur, the petitioner telephonically instructed the driver of vehicle to take the goods to M/s JVS Switchgear LLP at Katedan/ Mailardevpally, Rajendranagar, Telangana State, stating that tax invoice and  e-Way Bill generated by petitioner on the customer were also being sent - According to petitioner, even though the driver of the vehicle produced all documents such as Tax Invoice and  e -Way Bill, on the ground that the said documents are for transporting the goods to Proddatur, Andhra Pradesh but the vehicle was proceeding to deliver the goods at Katedan, the 1st respondent detained the same by issuing an order of detention in Form GST-MOV06 dt.27.1.2020 by mentioning the ground 'wrong destination is noticed' - Thereafter, the 1st respondent issued notice dt.27.1.2020 to petitioner asking the petitioner to show-cause within seven (7) days why tax under the Act along with penalty equal to tax to the tune of Rs.4,30,778/- should not be recovered from petitioner - Since the transporter was pressurizing the petitioner to get his vehicle released, the petitioner paid on 30.1.2020  under protest  total tax and penalty amounting to Rs.4,30,778/- demanded by the 1 st respondent, and the petitioner also gave a letter on 30.01.2020 stating so - detained goods and the vehicle were then released after payment of tax and penalty on 30.01.2020 – Since no order was passed against the petitioner by the 1 st respondent which could have been challenged by the petitioner by filing any statutory appeal, petitioner cannot avail the appellate remedy and since the impugned action of the 1 st respondent was without jurisdiction, the present Writ Petition is maintainable – Petitioner also seeks refund of the amount of tax and penalty paid by them.

Held:

+ Without there being any order/decision passed by the 1st respondent and communicated to the petitioner, the petitioner cannot be expected to file appeal invoking Section 107 of the TGST Act, 2017, therefore, writ petition is maintainable. [para 44]

+ Bench is in complete agreement with the ratio laid down by the Gujarat High Court in Synergy Fertichem Pvt. Ltd. vs. State of Gujarat [2019-TIOL-2950-HC-AHM-GST] [para 54]

+ In the Show cause notice dt. 27.1.2020 issued to the petitioner, the only reason assigned by the 1 st respondent was that 'wrong destination is noticed'. [para 56]

+ 'Noticing the conveyance at a wrong destination' without anything more cannot be said to be a contravention of the CGST Act/Telangana GST Act, 2017 and it is not an taxable event, for there could be several reasons for the same including the driver losing his way or stopping for repair or to answer a call of nature. [para 58]

+ Once the conveyance/vehicle driver had the tax invoice and the e-way bill, there is prima facie compliance with the provisions of the CGST Act and Telangana GST Act and the rules made thereunder and as per para 5 of the circular dt. 14.9.2018 referred to above, it did not warrant initiating of proceedings under Sec. 129 of the Telangana GST Act, 2017. [para 60]

+ It is not as if when goods are in transit there is a prohibition of their sale by the purchaser to a third party. In fact the court can take judicial notice that it is quite a common thing and a well recognized trade practice.

+ It is also important to note that 26.1.2020 i.e., the day when the goods were loaded on the vehicle was a Public Holiday, i.e., Republic Day.

+ If there is any transaction between the petitioner and M/s. Laxmi Narasimha Constructions, Proddatur, Andhra Pradesh on 27.01.2020, the next working day after 26.1.2020, there is no need to suspect the bona fides of transaction merely because the Ex.P9 - e - Way Bill was generated at 9.48 am, along with a tax invoice in favour of purchaser, viz., M/s. Laxmi Narasimha Constructions, Proddatur, about two hours after the vehicle's detention at 7.50 am and cannot be construed that petitioner had an intention to unload the goods at Katedan, Hyderabad, which is somehow contrary to law. [para 70]

+ Any defect, if any, in the documentation accompanying the goods has to be looked at in terms of the Circular dt. 14.09.2018 issued by the Central Board of Indirect Taxes and Customs, New Delhi. [para 72]

+ Bench rejects the contention of the 1st respondent that producing the e -Way Bill and tax invoice by the petitioner in favour of M/s. Laxmi Narasimha Constructions, Proddatur bearing the date 27.01.2020 is only an after-thought to cover up its laches. [para 74]

+ One must keep in mind that CGST Act, 2017/ Telangana GST Act, 2017 are very recent laws and the common businessman is admittedly having difficulty to understand these enactments and the procedures they have introduced. It is important to note that interpretation of taxing statutes should be done in a way to facilitate business and inter-State trading, and not in a perverse manner which would result in impediment of the same by harassing business persons. [para 75]

+ It is absurd for the 1st respondent to say that while filing objections / reply to the show-cause notice, the petitioner did not mention about collection of tax and penalty forcibly, and that that allegation is made for the first time only before this Court only as an after-thought. [para 77]

+ At the time when the petitioner filed objections on 27.01.2020 through the driver of the vehicle to the show-cause notice issued by the 1st respondent on 27.01.2020, tax and penalty had not been paid by the petitioner at all. Therefore, there was no occasion for the petitioner to refer to the same in the reply to the show-cause notice. [para 78]

+ Writ Petition is allowed and the action of 1st respondent in collecting the sum of Rs. 4,30,778/- from petitioner on 30.01.2020 is declared as arbitrary and violative of Articles 14 and 265 of the Constitution of India, and also the provisions of CGST Act, 2017 and TGST Act, 2017, and also the Circular dt. 14.09.2018, issued by the Government of India; and consequently, the respondents are directed to refund the said amount with interest at the rate of 6% per annum from 30.01.2020 till date of payment within 6 weeks. [para 80]

- Petition allowed:TELANGANA HIGH COURT

2020-TIOL-1898-HC-TELANGANA-GST

Agarwal Foundries Pvt Ltd Vs UoI

GST - The question which arises for consideration is whether officials belonging to the G.S.T. Intelligence Department of the Union of India such as respondent nos. 5 to 9 in the Writ Petition can resort to physical violence while conducting interrogation of the petitioners and their employees in connection with proceedings initiated against the petitioners by the respondents under the C.G.S.T. Act, 2017 and I.G.S.T. Act, 2017.

Held:

+ While the petitioners allege that there was use of violence and coercion against the petitioners and their employees by respondents 5 to 9 during the said search operations, the respondents deny the same and allege that it was the petitioners and their employees who had obstructed the search operations and allegedly assaulted the 5th respondent. Normally these disputed questions of fact are not to be gone into in a Writ proceeding under Art. 226 of the Constitution of India.

+ However, Bench cannot ignore the material such as Annexure P-4 which is the Out patient Discharge advice of Sunshine Hospital given at 7.45 pm after treatment of the 3rd petitioner by the emergency physician there on 11.12.2019 which stated that ‘ assault today; injury to the left thigh; unable to walk and bear weight;… blunt injury at left thigh ” and which suggests that the 3rd petitioner was injured to such a degree that he was unable to walk and required medical treatment.

+ Though the respondents seek to suggest that such evidence procured by the petitioners ought to be disbelieved by the Bench because Sunshine Hospital is a ‘private hospital' and not a Government Hospital, Bench does not agree with such contention because there is no presumption in law that Doctors in private hospitals do not speak the truth and only Government doctors speak the truth. An injured person is likely to go the nearest available hospital for treatment instead of searching for a Government hospital at that juncture.

+ Bench cannot also ignore the Annexure P5 which is an acknowledgement given by the Police at 6.39 pm on 11.12.2019 that there was a call made by an employee of the 1st petitioner to Phone No. 100 and that a case No. 20190021545598 was assigned to it and that it was assigned to the Mahankali Police station in Secunderabad.

+ In contrast, the FIR 232 of 2019 was registered by the Police at the instance of the respondents much later at 8.30 pm on 11.12.2019 against the petitioners 2 to 4 i.e., 2 hours after the police were contacted by the petitioners employee at 6.39 pm, and 1 hour after the 3rd petitioner was treated in Sunshine Hospital for alleged assault and injury to his left thigh.

+ The omission of the police to register any FIR at the instance of petitioners does not mean that what the respondents allege is true. This is because admittedly no charge sheet has been filed by the police till date against the petitioners 2 to 4 and the petitioners have admittedly secured anticipatory bail from the competent criminal court later.

+ No provision of any law is cited before the Bench by the respondents to say that they are entitled to use physical violence against persons they suspect of being guilty of tax evasion while discharging their duties under the CGST Act, 2017.

+ Merely because the authorities under the CGST Act, 2017 are not to be treated as police officials, they cannot claim any immunity if they indulge in acts of physical violence against persons they suspect of being guilty of tax evasion.

+ In view of this statutory regime [Article 21 of the Constitution and Protection of Human Rights Act, 1993] already in place, it would be futile for the respondents to claim any liberty to torture or use physical violence during the course of search, investigation or interrogation under the CGST Act, 2017 against persons suspected of tax evasion like the petitioners or their employees.

+ The summons issued u/s 70 bears a date 12.12.2019 and asks the 2nd petitioner to appear before 4th respondent at 00:30 hrs on 12.12.2019. This prima-facie indicates that it was issued after midnight on the intervening night of 11.12.2019 and 12.12.2019 asking the 2nd petitioner to appear at the ungodly hour of 00:30 hrs on that day. What was so important to be recorded at such a time, which cannot wait till the morning of 12.12.2019, is not disclosed by the respondents.

+ Prima-facie it amounts to deprivation of the liberty of the 2nd petitioner since he was forced to be present with the respondents 5 to 9 at that late hour on that night.

+ Respondents cannot contend that they will interrogate the persons suspected of committing any tax evasion as per their sweet will forcibly keeping them in their custody for indefinite period. If it is done, it has to be construed as informal custody and the law relating to an accused in custody has to be expressly or impliedly applied. If accused can get all the benefits under Art.22 of the Constitution, a person in such informal custody can say that he is also entitled to get relief under Art.21 of the Constitution of India.

+ Following the principle laid down in P.V. Ramana Reddy [2019-TIOL-873-HC-TELANGANA-GST] that the High Court can entertain an application for pre-arrest protection under Article 226 of the Constitution of India, but such power should be exercised by the High Court sparingly, Bench holds that having regard to the facts and circumstances set out, this case falls under the exceptional category and this Writ Petition is undoubtedly maintainable.

+ Coming to the plea of the petitioners for transfer of investigation is concerned, though normally such transfer is not to be done, in view of the facts and circumstances of this case and the absence of counter affidavit by the 5th respondent denying the allegations of physical violence by him in the course of the search operations against the 3rd petitioner, Bench feels that it would not be appropriate for the 5th respondent to be a participant in the proceedings initiated by the respondents against the petitioners.

+ There is no such absolute bar to permit interrogation of the petitioners in the presence of a lawyer within visible range, but at a distance beyond hearing range. In the special facts and circumstances of the case, the petitioner nos. 2 to 4 or their employees shall be examined in the visible range of their counsel, though not in hearing range.

+ Respondents in their counter-affidavit have raised a plea that they would like to carry on investigation at New Delhi where the Headquarters of DGGI is located.

+ In the midst of the COVID-19 Pandemic there are serious risks involved in people traveling to and from New Delhi and their family members because there is no dispute that New Delhi has several cases of Corona virus infections for the last several months. In the coming winter months, the prediction of the health experts is that there could be more infections and even fatalities caused by the said virus. Also it would entail considerable expense for that many (50 or more) people to travel to Delhi and back apart from high boarding and lodging costs.

+ While the need to proceed with the investigation and take it to the logical conclusion cannot be disputed, whether the respondents can be permitted to put at risk the health and lives of the persons they wish to interrogate in connection with the alleged GST evasion by the 1st petitioner and make them incur a huge amount of expenditure, is to be considered.

+ When the respondents have a Zonal Unit at Hyderabad where they can certainly carry on any enquiries or interrogation, Bench does not think that it is desirable, on account of COVID-19 Pandemic situation and the high cost involved, to allow the respondents to summon 50 or more persons in connection with the investigation of alleged GST evasion by the 1st petitioner to New Delhi by endangering their health and lives.

++ Writ Petition is allowed with the following directions -

(a) The respondents shall not use any acts of violence or torture against petitioner nos. 2 to 4 or their employees in furtherance of enquiry proceedings F.No. 574 / CE / 198 / 2019 / INV initiated against the 1st petitioner;

(b) The enquiry in the above proceedings against the 1st petitioner shall not be handled by the 5th respondent, and he shall not participate in such enquiry, and it shall be transferred to another official to be designated by the 2nd respondent;

(c) Any interrogation of petitioner nos. 2 to 4 or their employees shall be between 10:30 a.m. and 05:00 p.m. on weekdays in the visible range of an Advocate appointed by them, who shall not be in hearing range;

(d) The petitioner nos. 2 to 4 alone can be summoned to New Delhi for the purpose of the above enquiry by the respondents on one occasion for two to three days, and rest of their interrogation and those of their employees shall be conducted at Hyderabad by the respondents; and

(e) The respondents shall adhere to the provisions of the CGST Act, 2017 in conducting search, investigation or enquiry in relation to the alleged tax evasion by the petitioners.

(f) & (g) I.A. Nos. 1, 2 & 3 of 2019 and I.A. No. 1 of 2020 are accordingly disposed of and I.A. No. 2 of 2020 is dismissed. [para 63, 64, 68 to 70, 73 to 75, 78, 83 to 85, 89, 90, 96, 100, 104 to 106, 108]

- Petition allowed: TELANGANA HIGH COURT

2020-TIOL-1876-HC-MUM-GST

Heritage Lifestyles Llp Vs UoI

GST - TRAN-1 - A detailed order has been passed by the Bench by its order dated 5th November 2020 in the matter of WP 3705 of 2020 [2020-TIOL-1875-HC-MUM-GST] - Since all other facts are similar to the order passed by the Bench in the WP 3705 of 2020, it would not be necessary to dwell on the facts again - In view of the reasons detailed in order dated 5 th November, 2020 in Writ Petition (St.) No.3705 of 2020 [2020-TIOL-1875-HC-MUM-GST], Bench is inclined to invoke its writ jurisdiction as admittedly the Respondents have found the Petitioner to be eligible for credit amounting to Rs.10,11,913/- - Respondents are directed to accept the TRAN-1 filed by the Petitioner and to give due credit of the input tax credit of Rs.10,11,913/- in electronic credit ledger/ input tax credit of the Petitioner within two weeks - Bench does not consider it necessary to examine Petitioner's challenge to the vires of Rules 117 and 118 of the Central Goods & Services Tax Rules, 2017 - Petition allowed: High Court [para 5 to 8]

- Petition allowed: BOMBAY HIGH COURT

2020-TIOL-1875-HC-MUM-GST

Heritage Lifestyles And Developers and Pvt Ltd Vs UoI

GST -  Being aggrieved and dissatisfied by the inaction on the part of the Respondent authorities in not giving  Input tax credit to the claim of the Petitioner pursuant to the Board Circular No. 39/13/2018-GST dated 3 rd April, 2018, the Petitioner has sought to not only challenge the said inaction but also to challenge the vires of Rule 117 and Rule 118 of the Central Goods and Service Tax Rules, 2017 as null and void and ultra vires Section 140 (1), Section 140 (3) and Section 9 of the Central Goods and Services Tax Act, 2017 and Article 14, 19, 246, 248, 265, 268A, 286 and 302 read with entry 41 and 83 of list 1 of Schedule VII of the Constitution of India and as also being beyond the legislative competence of the Parliament under Article 269-A of the Constitution of India -  It is submitted that under the pre-GST regime, the Petitioner was paying Service tax on the services and filing returns; that they were availing credit/set off of service tax paid on input service; that under the pre-GST regime, the Petitioner was also paying MVAT on the sale of goods, filing returns and also availing credit/set off of MVAT - It is further submitted that the Petitioner could not file the TRAN–1 by 27.12.2017 due to lack of awareness of the procedures, technical glitches, GST being new and a complex system to operate - The Petitioner has annexed screenshot being Exhibit-H to the Petition to demonstrate technical glitches - Vide letters dated 11.12.2018, 12.12.2018 and 31.03.2019, Petitioner sent reminders to the Respondents with respect to its application made pursuant to the CBIC circular dated 3.04.2018 that since it was unable to file TRAN-1 due to technical glitches, it had submitted TRAN-1 manually for verification and requested Respondent No. 9 to activate TRAN-1 portal to enable Petitioner to file TRAN-1 electronically and to claim credit in electronic credit ledger - that since the Petitioner has not received any clarity from the Respondents with regard to the carry forward of the CENVAT credit in respect of its application, it has been left with no option but to file the present Petition - Respondent revenue  submitted that Petitioner's application for manual GST TRAN-1 dated 7.5.2018 pursuant to the Board Circular No 39/13/2018-GST dated 3 rd April, 2018 was sent for verification to the Additional Commissioner, Nodal Officer IT Grievance Redressal (ITGRC) Mechanism, CCO, CGST and Central Excise, Mumbai Zone for further action, however, the Petitioner's application was not approved by the ITGRC under the category description "The Tax Payer has neither tried for saving/submitting or filing TRAN-1".

Held:  When there is no dispute to the fact that the Petitioner is otherwise eligible for credit of Rs. 78,62,466/- then to deny the benefit of such Input credit merely on technical grounds cannot be justified - Merely on technical ground an admitted input credit is sought to be denied to the Petitioner - That, according to the Bench would be wholly unfair and a travesty of justice - It is in these facts and circumstances that Bench is compelled to invoke its writ jurisdiction in this case - As admittedly in this case the Respondents have found the Petitioner to be eligible for input credit amounting to Rs. 78,62,466/-, the finding of the ITGRC would, in the face of the admission by the Respondents to the amount of credit, would be a mere technicality which cannot come in the way of substantial justice - Bench directs the Respondents to accept the TRAN-1 filed by the Petitioner and to give the due of input tax credit of Rs. 78,62,466/- in the electronic credit ledger/input tax credit of the Petitioner within two weeks from the date of this order - Bench also does not consider it necessary to examine the Petitioner's challenge to the vires of Rules 117 and 118 of the Central Goods and Services Tax Rules, 2017 - Petition is accordingly allowed in the above terms: High Court [para 27 to 30]

- Petition allowed: BOMBAY HIGH COURT

2020-TIOL-1869-HC-DEL-GST

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Petitioner challenges the final order passed by the National Anti-profiteering Authority concluding that the petitioner profiteered Rs.38,64,891/- during the period 15th November, 2017 to 31st March, 2019 - Petitioner contends that the calculation done by the Director General of Anti-profiteering (DGAP) is factually incorrect as he has calculated the profiteered amount twice; that each invoice has been taken twice for computation; that the profiteered amount has been computed, both in the hands of the principal company as well as in the hands of the petitioner - Counsel for Revenue admits that there are some factual mistakes in the impugned order and he has no objection if the impugned order dated 11th May, 2020 is set aside and the matter is remanded back to NAPA for fresh adjudication - petitioner has no objection to the same.

Held: With consent of the parties, the impugned order dated 11th May, 2020 is set aside and the matter is remanded back to NAPA for fresh adjudication in accordance with law - Matter to be listed before NAPA on 18th November, 2020 - Petition disposed of: High Court [para 8, 9]

- Petition disposed of : DELHI HIGH COURT

2020-TIOL-1868-HC-KERALA-GST

GST - Case of the petitioner is that proceedings were earlier initiated against him for penalty under Section 122 of the GST Act and the said proceedings culminated in Ext.P5 order dated 25.4.2019 imposing a penalty - It is, therefore, their case that since the petitioner has already been proceeded against under Section 122 of the GST Act , a fresh proceedings under Section 74 cannot be pursued against him and on that reasoning, Ext.P14 order passed by the respondents is clearly without jurisdiction.

Held: There is no merit in the contention raised by the petitioner that in view of Ext.P5 order passed under Section 122 of the GST Act, the respondents are precluded from initiating any proceedings under Section 74 of the GST Act - While proceedings under Section 122 are for the purposes of imposition of penalty on an assessee who has contravened the provisions of the Act, the proceedings under Section 74 of the Act are with a view to recover unpaid tax together with interest thereon, in cases where the non-payment of tax is on account of a suppression or willful misstatement occasioned by the assessee -There is also no statutory basis for the submission by petitioner that it is only the Central government authorities that can initiate proceedings under Section 74 of the Act - The petitioner being aggrieved by Ext.P14 order has to approach the Appellate Authority under the Act -Petition is dismissed -However, it is directed that recovery steps for recovery of amounts confirmed against the petitioner by Ext.P14 order shall be kept in abeyance for a period of three weeks so as to enable the petitioner to approach the Appellate Authority in the meanwhile: High Court [para 3]

2020-TIOL-1866-HC-DEL-GST

Genext International Vs UoI

GST - Petition has been filed seeking a direction to the respondents to allow the petitioner to carry forward in its electronic credit ledger the transitional tax credit of Rs.14,50,716/- of CENVAT Credit as on appointed day i.e. 30th June 2017 and to declare Rule 117 of the Central Goods and Services Tax Rules, 2017 as ultra vires of Sections 140 and 174 of Central Goods and Services Tax Act, 2017 - The petitioner also seeks a declaration that the retrospective amendment made in Section 140(1) w.e.f. 01st July, 2017 is illegal and arbitrary.

Held: To await the judgment of the Supreme Court in Union of India Vs. Brand Equity Treaties Limited & Ors. = 2020-TIOL-115-SC-GST-LB - Matter to be listed on 14th December, 2020 : High Court

2020-TIOL-1861-HC-MUM-GST

Siddharth Mandavia Vs UoI

GST - Petitioner inter alia seeks the following reliefs viz. for a direction to the respondents restraining them from adopting any coercive measures without issuing show cause notice to compel the petitioner to pay further customs duty and / or goods and services tax (GST) dues which are disputed by the petitioner; for a direction to the respondents to unfreeze the 12 bank accounts of the petitioner and family members as per details furnished in the writ petition including in the prayer portion; for a direction to the respondents to unfreeze the Importer Exporter Code of the proprietorship firm of the petitioner by the name of 'M/s. XS Components' - as per the stand of the answering respondents, based on information received that some exporters had availed input tax credit (ITC) on the basis of ineligible documents or by committing fraud showing payment of IGST on goods exported out of India, a joint pan India operation was conducted on 11.09.2019 by the Directorate General of GST Intelligence and Directorate General of Revenue Intelligence - Various exporters covered in the said operation included the proprietorship firm of the petitioner - The said exporter is being investigated by the Directorate General of GST Intelligence in regard to possible violations of the GST law - From the investigation carried out, it prima facie appeared that M/s. XS Components has indulged in availment and utilization of fake input tax credit (ITC) without actual receipt of goods or services and has fraudulently claimed refund of bogus ITC despite being ineligible - Against exports worth Rs.114.75 crores for the period from August, 2017 to April, 2019, it appears that petitioner's firm had received foreign remittances amounting to Rs.21.56 crores only - On the other hand, for the said period GST refund amounting to Rs.9,32,96,551.00 has been credited to the bank account of the petitioner - Investigation revealed that 21 suppliers had passed on ITC greater than Rs.10 lakhs to M/s. XS Components - Out of these, 17 were stated to be New Delhi based and 1 Mumbai based - All the New Delhi based suppliers have been found to be non-existent - The Mumbai based firm M/s. Kumar Tradings which is also currently under investigation appears to have passed on ineligible ITC to M/s. XS Components on the strength of fake invoices without actual supply of goods or services - No payments have been made to the suppliers by the petitioner - It was thereafter that summons under section 70 of the Central Goods and Services Tax Act, 2017 was issued to the petitioner - In his statement recorded on 28.02.2020, petitioner admitted that in certain cases he had received only invoices without actual receipt of goods or services, giving a list of 8 firms from whom he received such invoices - After his appearance on 28.02.2020, petitioner did not appear before the investigating authorities despite summons, instead he left India for Dubai on 09.03.2020 without informing the authorities.

Held: To enable invocation of section 83 [of the CGST Act which deals with provisional attachment to protect revenue in certain cases], first and foremost there must be pendency of any proceeding either under section 62 or under section 63 or under section 64 or under section 67 or under section 73 or under section 74 of the CGST Act - Thereafter, the Commissioner must form an opinion that for the purpose of protecting the interest of the government revenue, it is necessary to attach any property provisionally, including bank account belonging to the taxable person - On satisfaction of the above two conditions, the Commissioner must pass an order in writing provisionally attaching any property of the taxable person including bank accounts - Because of the very nature of temporary attachment, sub-section (2) makes it abundantly clear that such provisional attachment shall not be in excess of one year from the date of the order made under sub-section (1) and shall cease to have effect after the expiry of one year from the date of the order - What is to be noted is that the property including the bank account liable to or which has been provisionally attached must belong to the taxable person - 'Taxable person' has been defined in section 2(107) of the CGST Act to mean a person who is registered or is liable to be registered under sections 22 or 24 of the CGST Act - To be more specific, there is no allegation or any averment made by the respondents that any money belonging to the petitioner or to his firm have been credited into the joint accounts of the petitioner with his wife or with his minor son or into the account of his wife - As a matter of fact, in paragraph 38 of their first affidavit, respondent Nos. 5 to 7 have stated that the reason for attachment of other bank accounts appears to be their link with the petitioner or his PAN - They being not the taxpayers in this case, provisional attachment of their bank accounts therefore would not be justified - Insofar as the other bank accounts are concerned, considering the seriousness of the measure and having regard to the provisions contained in sub-rule (5) of rule 159, Bench is of the view that liberty may be granted to the petitioner even at this stage to file objection to the provisional attachment and if such an objection is filed, the competent authority may take an appropriate decision thereon after providing an opportunity of hearing to the petitioner: High Court [para 16, 19, 21, 21.1]

Cus - In so far blockage of importer exporter code of the petitioner is concerned, Bench finds that the relevant statute in this connection is the Foreign Trade (Development and Regulation) Act, 1992 - Section 7 thereof makes it abundantly clear that importer exporter code number is granted by the Director General of Foreign Trade who is appointed by the central government or by an officer authorized by the Director General of Foreign Trade - Suspension and cancellation of importer exporter code number is provided in section 8 of the Foreign Trade (Development and Regulation) Act, 1992 - When there is contravention of the provisions of the Foreign Trade (Development and Regulation) Act, 1992 or the rules or orders made thereunder, or breach of the foreign trade policy or if the Director General of Foreign Trade or his authorized officer has reason to believe that any person has made an export or import in a manner which is prejudicial to the trade relations of India with any foreign country etc., the Director General or the authorized officer after calling for the record and after giving a notice in writing to the person concerned informing him of the grounds on which his importer exporter code number is sought to be suspended or cancelled and after giving him reasonable opportunity of making a representation in writing and a personal hearing, if sought for, either suspend or cancel the importer exporter code number granted to that person. If it is a case of suspension then the period has to be specified in the order of suspension - Once the importer exporter code number is suspended or cancelled, that person would not be entitled to carry out any import or export except under a special licence that may be granted by the Director General - It is trite that when a law requires a thing to be done in a particular manner, it has to be done in that particular manner and recourse to any other manner is necessarily forbidden - Suspension and cancellation of importer exporter code number can be done only under Foreign Trade (Development and Regulation) Act, 1992 by the Director General of Foreign Trade or by his authorized officer for the reasons specified and in the manner provided in section 8 of the said Act - Respondents arrayed in this petition are neither the Director General of Foreign Trade nor his authorized officer. Prima facie, they are not empowered either to suspend or cancel the importer exporter code of the petitioner, the only two measures provided under law - There is no provision for blocking of importer exporter code, that too by an authority which is not competent either to suspend or cancel such code - If that be the position, blocking of importer exporter code of the petitioner by any authority other than the Director General of Foreign Trade or by his authorized officer under section 8 of the Foreign Trade (Development and Regulation) Act, 1992 would be unauthorized, unwarranted and without jurisdiction: High Court [para 23.1, 23.2, 24]

Conclusion:

As an interim measure, following directions issued -

1. The account number at Sr.No.10 of paragraph 8.8 which is solely in the name of Ms. Mansi Siddharth Mandavia shall be unfrozen forthwith;

2. The account numbers which are jointly in the names of the petitioner and either Mansi Mandavia alias Mansi Siddharth Mandavia and Hriaan Siddharth Mandavia at Sr. Nos.3, 5, 6, 11 and 12 of paragraph 8.8 shall be unfrozen forthwith subject to the condition that until otherwise directed, those accounts shall be in debit freeze to the extent of 50% of the amounts presently credited;

3. In so far the other accounts are concerned, petitioner may file objection before the Principal Additional Director General of GST Intelligence within a period of 7 days from today;

4. If such objection is filed as above, the Principal Additional Director General shall afford an opportunity of hearing to the petitioner and thereafter pass an appropriate order in accordance with law within a period of 3 weeks from the date of filing of the objection;

5. Blockage of importer exporter code of the petitioner by respondent No.3 or by any other authority shall be withdrawn forthwith.

6. List for further consideration on 15.12.2020.

- Interim order passed: BOMBAY HIGH COURT

2020-TIOL-1858-HC-MAD-GST

GST - Petitioner in this case has committed an error in filing of the details relating to credit - What should have figured in the CGST/SGST column has inadvertently been reflected in the ISGT column - It is nobody's case that the error was deliberate and intended to gain any benefit, and in fact, by reason of the error, the customers of the petitioner will be denied credit which they claim to be legitimately entitled to, owing to the fact that the credits stands reflected in the wrong column - It is for this purpose, to ensure that the suppliers do not lose the benefit of the credit, that the present writ petition has been filed.

Held:

+ Admittedly, the 31st of March 2019 was the last date by which rectification of Form - GSTR 1 may be sought - However, and also admittedly, the Forms, by filing of which the petitioner might have noticed the error and sought amendment, viz. GSTR-2A and GSTR-1A are yet to be notified - Had the requisite Forms been notified, the mismatch between the details of credit in the petitioner's and the supplier's returns might well have been noticed and appropriate and timely action taken - The error was noticed only later when the petitioners' customers brought the same to the attention of the petitioner - In the absence of an enabling mechanism, Bench is of the view that assessees should not be prejudiced from availing credit that they are otherwise legitimately entitled to - The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under statute - This writ petition is allowed and the impugned order set aside - The petitioner is permitted to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST and CGST within a period of four weeks and the respondents shall take the same on file and enable the auto-population of the correct details in the GST portal: High Court [para 18 to 21]

+ A registered person who files a return under Section 39(1) involving intra-State outward supply is to indicate the collection of taxes customer-wise in monthly return in Form GSTR-1 and the details of tax payment therein are auto populated in Form GSTR-2A of the buyers - Any mismatch between Form GSTR-1 and Form GSTR-2A is to be notified by the recipient by way of a tabulation in Form GSTR-1A - Admittedly, Forms in GSTR-2A and GSTR-1A are yet to be notified as on date - The statutory procedure contemplated for seamless availment is, as on date, unavailable: High Court [para 17]

- Petition Allowed : MADRAS HIGH COURT

2020-TIOL-1853-HC-AHM-GST

PN Tobaco Vs State of Gujarat

GST - While the goods (Tobacco) were in transit, the mobile squad of the respondent No.2 intercepted the vehicle and recorded the statement of the driver of the vehicle - The above led to passing an order in Form GST MOV-10 dated 25th July, 2020 - Consequently, a show-cause notice was issued to the writ applicant in Form GST MOV-10 calling upon the writ applicant to show-cause as to why the goods and the conveyance should not be confiscated under Section 130 of the GST Act, 2017 - It appears that before the writ applicant could respond to the notice issued in Form GST MOV-10, the final order of confiscation in Form GST MOV-11 came to be passed on the very same date, i.,e, 25th July, 2020 – Aggrieved, petition filed for quashing and setting aside the said order and also release of the truck and seized goods.

Held: It appears from the materials on record and the facts recorded that no opportunity of hearing was given by the authority concerned to the writ applicant to meet with the notice issued in Form GST MOV-10 - On this short ground alone, as referred to above, Bench is inclined to quash the final order of confiscation passed by the State Tax Officer, Mobile Squad, Amirgadh dated 25th July, 2020 - appeal succeeds and is hereby allowed - matter is remitted to the authority concerned for giving an opportunity of hearing to the writ applicant: High Court [para 5 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-1851-HC-KERALA-GST

GST - Petitioner is aggrieved by the show cause notice issued to him under Section 74 of the GST Act.

Held: Since Ext.P10 is only a show cause notice, against which the petitioner has an effective right to prefer an objection and get the matter adjudicated before the adjudicating authority, an interference with the show cause notice at this stage, even assuming that the contention is one regarding absence of jurisdiction, is not warranted in these proceedings under Article 226 of the Constitution of India - while dismissing the writ petition, it is directed that the respondent shall pass orders in the matter within an outer time limit of two months: High Court [para 1, 3]

- Petition dismissed: KERALA HIGH COURT

2020-TIOL-1849-HC-AHM-GST

GST - Challenge is to Order of seizure in Form GST INS-02; Order of prohibition in Form GST INS-03 and Intimation of payment made voluntarily or made against the Show Cause Notice of Statement in Form GST DRC-03 - An application dated 29th September, 2020 has been preferred by the writ applicants addressed to the Superintendent, Subhanpura, Vadodara under Section 67(6) of the Act, 2017 for provisional release of 7312 bags weighing 252,120 kg.

Held: Bench is not inclined to go into the issue with regard to the legality and validity of the action initiated by the authority under the provisions of the Act - Having regard to the fact that the goods seized are perishable in nature, Bench directs the authority concerned to look into the application dated 29th September, 2020 referred to above and pass appropriate order within a period of one week in accordance with law - Application disposed of: High Court [para 3, 4]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-1848-HC-KERALA-GST

GST - Petitioner confines his prayer for release of the goods against furnishing of the bank guarantee and simple bond in terms of the provisions of Section 129 of the SGST Act - Prayer is accepted and the Writ petition is disposed of by directing the 1st respondent to release the goods on furnishing the requirements of law as noticed above i.e., furnishing the bank guarantee and simple bond, and adjudication be also done in accordance with law, as expeditiously as possible: High Court [para 3]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-1846-HC-MAD-GST

Maansarovar Motors Pvt Ltd Vs Assistant Commissioner

GST - Writ petitions revolves around the interpretation of Section 50 of the Central Goods and Services Tax Act, 2017, particularly the effective date of application of the proviso inserted vide Section 100 of Finance (No.2) Act of 2019 - petitioner's argue that (i) the credit was available even prior to the arising of the output tax liability and hence the question of delay does not arise (ii) no opportunity was granted prior to raising of the impugned demand and consequential proceedings (iii) interest is a measure of compensation and since ITC is already available in the electronic ledger, there is no question of the same being due to the revenue (iv) the proviso to Section 50 of the Act which states that interest shall be levied only on that part of that paid in cash has been inserted to set right an anomaly and is, therefore, retrospective in operation.

Held: The 39th GST Council meeting held on 21.06.2019 made recommendations to amend Section 50 vide Section 100 of Finance (No.2) Act, 2019 to provide for charging interest on net cash liability and the Council in its meeting on 14.03.2020 recommended charging of interest on net cash tax liability with effect from 01.07.2017 with a retrospective amendment of the Act from the aforesaid date - On 14.03.2020, the Council issued a press release wherein, under the head 'Measures for trade facilitation', it was stipulated categorically that interest for delay in payment of GST would be charged only on net cash tax liability with effect from 01.07.2017 and that the proviso to Section 50 would be retrospective, with effect from 01.07.2017 - There is a meeting of minds of the Centre, the State of Tamil Nadu and the Board to the effect that the proviso to Section 50 is operative effective 01.07.2017, and no interest is liable to be levied on tax remitted by reversal of available ITC - While this is so, the GST authorities have adopted a contradictory stand by issuing orders, styled as notices, levying interest for allegedly belated remittance of tax by reversal of ITC - No opportunity appears to have been granted in most of the matters calling for explanation from the assessees prior to raising of the impugned demands of interest and coercive recovery action by attachment of bank accounts have been resorted to by the respective Assessing Officers - Interest, as held by the Supreme Court in the case of Commissioner of Income Tax Vs. Anjum H Ghaswada, = 2002-TIOL-73-SC-IT-CB, is intended to compensate the revenue for loss of capital - In the present case, there is no loss insofar as the revenue is in possession of the credit 'which is good as cash' as held by the Supreme Court in the case of Eicher Motors (2002-TIOL-149-SC-CX-LB) and cannot thus be said to be prejudiced in any way - In any event, this entire controversy has been now settled by the Board vide its Circular in F.No.CBEC.20/01/08/2019 GST dated 18.09.2020 - Thus, the Board has yet again reiterated that the amendment by insertion of proviso of Section 50 of the CGST Act is intended to be retrospective - Perhaps the relegation of the show cause notices to the call book is to await the passing of the amendments in the central and state statutes - It is apparent that the Centre, the State and the CBIC are in agreement that the operation of the proviso of Section 50 should only be retrospective and the interpretation to the contrary by the authorities constituted under the Board is clearly misplaced as is the consequential coercive recovery - a direction is issued to the appropriate authority to compute the interest liability for belated remittances of cash and refund the balance of the amount collected from the petitioner within a period of four weeks - With the insertion of the proviso to be taken to be retrospective, writ petitions are allowed - Consequently, the attachments will also stand lifted forthwith - The Assessing Officers are at liberty to raise fresh demands relating to interest on delayed remittances of tax by cash, in accordance with law: High Court [para 11, 14, 15, 23, 26, 27, 30, 31]

- Petitions allowed: MADRAS HIGH COURT

2020-TIOL-1844-HC-DEL-GST

Parnika Commercial And Estates Pvt Ltd Vs UoI

GST - Petitioner had inter alia sought a declaration that the liability to pay interest under Section 50 of the Central Goods and Services Tax Act, 2017 is confined only to the net tax liability and no interest is payable on the available ITC.

Held: From the Administrative Instruction dated 18th September, 2020, it is apparent that for the period of 1st July, 2017 to 31st August, 2020 field formations have been instructed to recover interest only on the net cash liability i.e. that portion of the tax that has been paid by debiting the electronic cash ledger or is payable through cash ledger - In those cases where show case notices have been issued calling upon the noticees to make payment on gross tax liability, those have been directed to be kept in the Call Book till retrospective amendment is made in Section 50 of the CGST Act - In view of the aforesaid decision taken by the Central Board of Indirect Taxes and Customs, grievance of the petitioner no longer survives - Writ petition is disposed of in accordance with the Administrative Instruction dated 18th September, 2020: High Court [para 6 to 8]

- Petition disposed of: HIGH COURT OF DELHI

2020-TIOL-1843-HC-KERALA-GST

Madhav Motors Vs State Tax Officer

GST - The petitioner is a dealer in automobiles and was registered under the erstwhile Kerala Value Added Tax Act - With the introduction of the GST Act with effect from 01.07.2017, he had applied for a registration and was granted a provisional registration - It is the case of the petitioner that, thereafter, with a view to getting a permanent registration, he had attempted to upload the Form TRAN-1 but despite a number of attempts he was unable - In November 2019, the petitioner attempted to generate e-way bills through the web portal but, once again, could not do so since he had not received the permanent registration - While the permanent registration was not granted, the provisional registration initially granted had also not been cancelled by the respondents through the procedure contemplated under the Act - Petitioner preferred Ext.P2 representation before the respondents, which again did not yield any response - In the meanwhile, by Ext.P3 certificate dated 04.01.2020, the petitioner was granted a fresh registration under the GST Act - While describing the validity period of Ext.P3 registration certificate, the respondents indicated that it would be valid only from 04.01.2020 - Petitioner preferred a request for change in the effective date of the registration certificate from 04.01.2020 to 01.07.2017 but the request was rejected by Ext.P4 communication dated 11.01.2020 - Petitioner challenges this communication.

Held: Procedure that had to be followed by the petitioner for obtaining a registration under the GST, in circumstances where he was already a registered dealer under the erstwhile KVAT Act, is the one prescribed in Rule 24 of the GST Rules - Petitioner applied for a registration in accordance with Rule 24 and was in fact granted a provisional registration as evident from Ext.P1 certificate dated 28.06.2017 - The permanent registration was granted to him by Ext.P3 dated 04.01.2020 and in the said permanent registration issued to him, the date of liability is shown from 01.07.2017 - This would clearly indicate that the respondents were aware that the petitioner fell under the category of dealers who were taking refuge under the transition Clause - Rule 24 of the GST Rules that enabled existing dealers under the KVAT regime to register themselves as dealers under the GST regime - When the provisional registration granted to the petitioner was not cancelled through the procedure contemplated under the Act and Rules, and the respondents had granted a regular registration on 04.01.2020, the permanent registration must relate back to the date of the provisional registration and the petitioner ought to be entitled to upload the returns for the past period between the date of Exts. P1 and P3 and to avail eligible input tax credit based on the returns uploaded by him - Accordingly, Ext.P4 communication is quashed and the respondents are directed to amend the Registration Certificate issued to the petitioner so as to make it valid from 01.07.2017, and permit the petitioner to upload the returns for the period covered by Exts. P5, P6 and P7 statements, and to pay tax as well as claim input tax credit based on the returns so uploaded - The respondents shall do the needful within a month - Writ Petition is allowed: High Court [para 4 to 6]

- Petition allowed: KERALA HIGH COURT

2020-TIOL-1842-HC-AHM-GST

Jay Ambey Filament Pvt Ltd Vs UoI

GST - Writ applicant has prayed for a writ of mandamus or any other appropriate writ directing the respondent no. 4 to immediately remove the attachment of bank accounts belonging to the petitioner company, ordered in exercise of powers under section 83 of the Act, 2017 viz. Form GST DRC-22 dated 24.08.2020.

Held: A bare perusal of the order of provisional attachment would indicate that the same is nothing but a result of a mechanical exercise of power u/s 83 of the Act, 2017 - Section 83 talks about the opinion which is necessary to be formed for the purpose of protecting the interest of the government revenue - Any opinion of the authority to be formed is not subject to objective test - The language leaves no room for the relevance of an official examination as to the sufficiency of the ground on which the authority may act in forming its opinion, but, at the same time, there must be material based on which alone the authority could form its opinion that it has become necessary to order provisional attachment of the goods or the bank account to protect the interest of the government revenue - The existence of relevant material is a precondition to the formation of opinion - The use of the word "may" indicates not only the discretion, but an obligation to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue - Therefore, the opinion to be formed by the Commissioner cannot be on imaginary ground, wishful thinking, howsoever laudable that may be - The formation of the opinion, though subjective, must be based on some credible material disclosing that it is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue - The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings - "Belief" is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed - It is equally true that it is not necessary for the authority under the Act to state reasons for its belief - But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed - In the case at hand, A.G.P. appearing for the respondents very fairly submitted that not only the impugned order of provisional attachment is bereft of any reason, but there is nothing on the original file on the basis of which this Court may be in a position to ascertain the genuineness of the belief formed by the authority - The word "necessary" means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable - The word "necessary" must be construed in the connection in which it is used - The formation of the opinion by the authority should reflect intense application of mind with reference to the material available on record that it had become necessary to order provisional attachment of the goods or the bank account or other articles which may be useful or relevant to any proceedings under the Act - In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law - Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probable cause - Any use of discretionary power exercised for an unauthorised purpose amounts to malice in law - It is immaterial whether the authority acted in good faith or bad faith - None of the conditions  referred in Valerius Industries - 2019-TIOL-2094-HC-AHM-GST  are fulfilled in the present case - In the result, this writ application stands allowed - The order of provisional attachment of the five bank accounts of the writ applicant under Section 83 of the Act is quashed and set aside; same is ordered to be removed: High Court [para 5, 11, 14, 15]

- Petition allowed: GUJARAT HIGH COURT

2020-TIOL-1829-HC-MUM-GST

BMW India Financial Services Pvt Ltd Vs UoI

GST - Petitioner is aggrieved by denial of transitioning the credit of Rs.17,07,673/- after the submission of declaration in Form GST TRAN-1 on 27th December, 2017 for the unit in Maharashtra; that post filing of the Form, it also received a confirmation e-mail from 'do not reply @gst.gov.in in confirming the successful filing of the transition Form by the Petitioner - Petitioner submits that the said failure is due to the technical glitches in the Respondents GSTN portal as GSTN has been beset with technical glitches which has defeated the Petitioner's substantive right to transition tax credit for no fault of the Petitioner - Petitioner has also averred that once it has sought for transition of credit by filing Form GST TRAN - 1 within the prescribed time a vested right accrues in its favour and the same cannot be taken away by reason of mere technical lapses not attributable to the Petitioner; that, therefore, they are seeking a Writ of Mandamus, directing the Respondents to take such actions as may be necessary for transitioning the credit of Rs.17,07,673/- as filed by the Petitioner in Form GST TRAN-1 on 27.12.2017 to avail the credit of Rs.17,07,673/- either electronically or manually - Respondent submits that Petitioner has not produced any evidence to validate its claim of technical glitch, still the application was timely forwarded to MAHAVIKAS Branch of the Maharashtra GST Department through proper channel and also to the GSTN; that the Petitioner's application was put up before the 1st meeting of IT-Grievance Redressal Committee (ITGRC) but the same was not approved.

Held: In this case, Bench is not examining the issue whether the Petitioner is entitled to VAT tax credit as claimed by the Petitioner which will be examined by the authorities - What Bench is concerned with is that despite the admitted successful filing of Form TRAN-1 by the Petitioner on 27th December, 2017, the request of the Petitioner for transitioning of credit has not been approved by the ITGRC merely on the basis that there were no technical glitches on the GSTN side - There is no further explanation or clarification or evidence on the issue by the Respondents - The whole objective of digitization is to convenience the taxpayers and not to harass them - Bench is conscious that the GST system is still evolving in its implementation; that merely because there were no technical glitches in the GSTN with respect to the Petitioner's TRAN-1 which was admittedly filed in time, the claim of the Petitioner, if it was otherwise eligible in law, cannot be rejected for no apparent fault on the part of the Petitioner - This cannot be the objective of the GST system or digitisation - Such a situation cannot be countenanced as it would be wholly unfair and unjust - Accordingly, Bench directs the Respondents to consider the case of the Petitioner and after looking into the merits of the claim and physically or otherwise verifying the amount of VAT as claimed by the Petitioner take such actions as may be necessary for transitioning the credit of such amount into the Petitioner's credit ledger/ electronic credit ledger within four weeks - Bench makes it clear that it has not examined the merits of the case nor the Petitioner's claim to VAT credit - Petition is allowed in above terms: High Court [para 21, 22, 24, 25, 26]

- Petition allowed: BOMBAY HIGH COURT

2020-TIOL-1825-HC-KERALA-GST

Bon Cargos Pvt Ltd Vs Assistant State Tax Officer (INT)

GST - During the relevant period, two vehicles belonging to the petitioner-company were intercepted by the Revenue - These vehicles were ferrying goods meant for intra-State transport, but with different consignors and consignee - As per the accounting practice, the consignors had generated e-way bill for two invoices separately though the GST regime did not require eway bill where the value of the consignment is less than Rs.50,000/- - The Revenue nonetheless detained the consignment u/s 129(3) of the CGST Act - Hence the present petitions were filed.

Held - Emphatic reliance upon the interpretation of Rule 7 that it is the duty of the transporter or the consignor, consignee to generate e-way bill when the aggregate value of the consignment is more than Rs 50,000/- and if otherwise ie., less than Rs 50,000/- there is no such requirement is not acceptable and of no avail in view of the provisions of sub Rules 3 and 7 of Rule 138 of CGST Act - Rules have to be read in conjunction and not in isolation - On plain and simple reading of proviso to Sub Rule 3 it is evident that registered person or transporter at his option is obliged to generate and carry e-way bill even if the value of the consignment is less than Rs.50,000/- - The orders under challenge in my view are amaenable to appeal as per the provisions of Section 107 of Central Goods and Service Tax Act, 2017 - In view of the interpretation of the Rules as High Court under Article 226 cannot assume the role of an appellate court - In all cases of seizure in order to obliterate inconsistency in the application of law and do away with the multiple appeals, discretion has been left to the competent authority to decide the adjudication as early as possible in accordance with law - Hence the present petitions merit being dismissed, as they are devoid of merit: HC

- Writ petitions dismissed: KERALA HIGH COURT

2020-TIOL-1810-HC-MUM-GST

KLT Automotive And Tubular Products Ltd Vs UoI

GST - Central issue raised in the writ petition i.e., whether interest under section 50 of the Central Goods and Services Tax Act, 2017 is to be levied on the gross tax liability or on the next tax liability has been answered by the Board in the administrative instructions dated 18.09.2020 by categorically stating that the interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020 - Consequently, Bench is of the view that no live issue survives for adjudication in this case - Recovery (garnishee) notices issued by the respondents on 16.07.2020 are hereby quashed - Respondents to intimate the petitioner about the quantum of interest payable on account of delayed payment of GST for the period under consideration in terms of the administrative instructions dated 18.09.2020 and the same shall be paid by the petitioner, if not already paid - Writ petition is accordingly allowed: High Court [para 14 to 16]

- Petition allowed: BOMBAY HIGH COURT

2020-TIOL-1809-HC-MUM-GST

Confederation Of Gst Professionals And Industries Vs UoI

GST - Principal relief claimed in the Petition is for a direction to the Respondents to allow/extend the time limit for submitting Forms GSTR-9 and 9C for the Financial Year 2018-19 upto 31st December, 2020 without any adverse consequences to the assessees.

Held: Counsel for the petitioner circulated a press release issued by the Central Board of Indirect Taxes and Customs on 24th October, 2020 extending the due dates for filing of annual return and reconciliation statement for the financial year 2018-19 - The due dates for filing annual return (Form GSTR - 9 /GSTR - 9A) and reconciliation statement (Form GSTR - 9C) for the financial year 2018-19 has been extended from 31st October, 2020 to 31st December, 2020 - In view of the aforesaid development, petitioner has got the relief - Writ petition is accordingly closed: High Court [para 3, 5]

- Petition disposed of: BOMBAY HIGH COURT

2020-TIOL-1803-HC-AHM-GST

Vimal Yashwantgiri Goswami Vs State Of Gujarat

GST - The pivotal question which falls for consideration is whether the power to arrest as provided under section 69 read with section 132 of the CGST Act can be invoked by the Commissioner only upon completion of the adjudication process of finalising the assessment and determination of liability as per the provisions of the CGST Act?

Held:

+ Power to arrest as provided under section 69 of the CGST Act can be invoked if the Commissioner has reason to believe that the person has committed offences as provided under the clauses (a), (b), (c) or (d) of sub-section (1) of section 132 of the CGST Act, which are punishable under the clause (i) or clause (ii) of sub-section (1) or sub-section (2) of the section 132 of the CGST Act without there being any adjudication for the assessment as provided under the provisions of the Chapter XII of the CGST Act. The reference to section 132 in section 69 of the CGST Act is only for the purpose of indicating the nature of the offences on the basis of the same the reasonable belief is formed and recorded by the Commissioner for the purpose of passing an order of arrest.

+ The Commissioner is required to record reasons of belief to arrest a person as per sub-section (1) of Section 69 of the CGST Act. However sub-section (2) and sub-section (3) of section 69 with reference to the provisions of sub-section (4) and sub-section (5) of section 132 of the CGST Act, differentiates between the cognizable and non-cognizable offences. The sub-section (2) of section 69 provides for informing such a person about grounds of arrest if he is alleged to have committed a cognizable and non bailable offence and sub-section (3) authorises the Deputy Commissioner or Assistant Commissioner subject to the provisions of the Code for releasing the arrested person on bail if he is alleged to have committed non cognizable and bailable offences by exercising the power as an officer in charge of the police station.

+ Therefore, it is not necessary for the Commissioner to provide a copy of the reasons recorded by him for his belief if he has reason to believe that any person has committed offences which are cognizable and non bailable.

+ Sub-section (2) of section 69 of the CGST Act provides statutory duty upon the officer authorised to arrest to inform such person about grounds of his arrest and in case if the person is ordered to be arrested for offences which are non-cognizable and bailable, he would be released on bail as per provision of sub-section (3) of section 69 of the CGST Act.

+ The Commissioner while recording his reasons to believe that a person has committed any offence has only to form a prima facie opinion based on cogent materials and credible information.

+ The words “reason to believe” contemplate an objective determination based on intelligence, care and deliberation involving judicial review as distinguished from a purely subjective consideration and hence he is not required to conclude that the person sought to be arrested is guilty of any offence.

+ The expression 'any person' in Section 69 of the CGST Act includes a person who is suspected or believed to be concerned in the evasion of tax or availing illegal input tax credit.

+ However, a person arrested by an authorised Officer because he is found to be evading tax or availing input tax credit as specified in the clauses (a) to (d) of the sub-section (1) of the section 132 of the CGST Act is not, when called upon by the authorised Officer to make a statement or to produce a document or thing, accused of an offence within the meaning of Article 20(3) of the Constitution of India.

+ Where an authorised Officer arrests a person and informs that person of the grounds of his arrest, for the purposes of holding an inquiry into the infringement of the provisions of the CGST Act which he has reason to believe has taken place, there is no formal accusation of an offence. The accusation could be said to have been made when a complaint is lodged by an officer competent in that behalf before the Magistrate.

+ The arrest and detention are only for the purpose of holding effective inquiry under the provisions of the CGST Act with a view to adjudging the evasion of GST and availing illegal input tax credit and imposing penalty.

+ The order authorising any officer to arrest may be justified if the Commissioner or any other authority empowered in law has reasons to believe that the person concerned has committed the offence under section 132 of the Act. However, the subjective satisfaction should be based on some credible materials or information and also should be supported by supervening factor. It is not any and every material, howsoever vague and indefinite or distant remote or farfetching, which would warrant the formation of the belief.

+ The power conferred upon the authority under Section 69 of the Act for arrest could be termed as a very drastic and far-reaching power. Such power should be used sparingly and only on substantive weighty grounds and reasons.

+ The power under Section 69 of the Act should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee.

+ The above are merely the incidents of personal liberty guaranteed under the Constitution of India. No arrest can be made because it is lawful for the police officer to do so. The existence of the power to arrest is one thing. The justification for the exercise of it is quite another.

+ The Commissioner must be able to justify the arrest apart from his power to do so. A person is not liable to be arrested merely on the suspicion of complicity in an offence. There must be some reasonable justification in the opinion of the authority effecting the arrest that such arrest is necessary and justified.

+ Any person can be arrested for any offence under the section 69 of the CGST Act, 1962, by the authorised officer to whom authority to arrest is given by the Commissioner if the Commissioner has reasons to believe that such person has committed an offence punishable under the clauses (a) to (d) of the subsection (1) which is punishable under the clause (i) or Clause (ii) of the sub- section (1) or sub-section (2) of the Section 132 of CGST Act.

+ When any person is arrested by the authorised officer, in exercise of his powers under Section 69 of the CGST Act, the authorised officer effecting the arrest is not obliged in law to comply with the provisions of Sections 154 to 157 of the Code of Criminal Procedure, 1973. The authorised officer, after arresting such person, has to inform that person of the grounds for such arrest, and the person arrested will have to be taken to a Magistrate without unnecessary delay, if the offences are cognizable and non bailable.

+ By its language, the sub-section (3) does not equate the officers of the GST with an officer-in-charge of a police station, nor does it make him one by implication. It only, therefore, means that he has got the powers as defined in the Code of Criminal Procedure for the purpose of releasing such person on bail or otherwise. This does not necessarily mean that a person alleged to have committed a non-cognizable and bailable offence cannot be arrested without a warrant issued by the Magistrate.

+ The authorised officer exercising power to arrest under section 69 of the CGST Act, is not a Police Officer and, therefore, is not obliged in law to register FIR against the person arrested in respect of an offence under Sections 132 of the CGST Act.

+ An authorised Officer is a 'proper officer' for the purposes of the CGST Act. As the authorised Officers are not Police Officers, the statements made before them in the course of inquiry are not inadmissible under Section 25 of the Evidence Act.

+ The power to arrest a person by an authorised Officer is statutory in character and should not be interfered with. Section 69 of the CGST Act does not contemplate any Magisterial intervention.

+ The constitutional safeguards emphasised (by the Supreme Court in case of D.K. Basu) in the context of the powers of police officers under the Code of Criminal Procedure and of officers of central excise, customs and enforcement directorates, are applicable to the exercise of powers under the GST Act in equal measure. An officer whether of the Central Excise department or another agency like the DGCEI, authorised to exercise powers under the Central Excise Act and/or the FA will have to be conscious of the constitutional limitations on the exercise of such power.

+ Section 69 of the CGST Act requires certain preconditions to be fulfilled prior to the arrest. In particular, the reasons to believe have to be recorded in writing in the file. The second aspect of Section 69 of the GST Act is the communication of the grounds of arrest. Although, Section 69 uses the word “inform” in the context in which it appears, yet a mere communication of the grounds would not be sufficient. Merely reading out the grounds of arrest to the detenu would defeat the very object of requiring the reasons to believe to be recorded in writing and communicated to the detenu.

+ While producing the person arrested under Section 69 of the CGST Act, the importance of valid, proper and exhaustive arrest memo should not be undermined. Every authorized officer under the Act, 2017 carrying out arrest must be clear that the preparation of an arrest memo is mandatory.

+ Unlike the powers of the police to lodge and register F.I.R. at the police station, the authorized officer under the GST can only lodge a complaint in writing before the Court concerned. Again the cognizance of such complaint has to be taken by the Court concerned only in accordance with Section 134 of the Act 2017.

+ In most of the cases when arrest is affected under Section 69 of the Act, a person arrested would be produced before the Magistrate and the Magistrate may thereafter remand the arrested person to judicial custody after looking into the arrest memo. At the time of production of the accused and also at the time when the person arrested is remanded to the judicial custody, the Magistrate may not have any idea as to on what basis and what type of allegations, the person has been arrested by the authorized officers of the GST and has been produced before him.

+ The production of a person accused should not be accepted by the Magistrate without being convinced that the arrest is on lawful grounds and on prima-facie materials indicating the complicity of the accused in the alleged offence. It is at that stage that the arrest memo assumes importance. It is not just sufficient to state in the arrest memo that the person arrested and produced has committed offences under Section 132 of the Act, 2017. The arrest memo should contain some details or information on the basis of which the Magistrate can arrive at a subjective satisfaction that the person has been arrested on lawful grounds. It is necessary, therefore, to incorporate some prima-facie material against the accused showing his complicity in the alleged offence.

+ It is high time that the GST department prescribes a standardized format for the arrest memo. The format must contain all the mandatory requirements and necessary additions. The gist of the offence alleged to have been committed must be incorporated in the arrest memo. It would be the duty of the concerned Magistrate to check that an arrest memo has been prepared and duly filled. In a given case, if the Magistrate finds that the arrest memo is absent or improperly filled or bereft of necessary particulars, then the Magistrate should decline the production of the arrested person.

+ Petitions are accordingly ordered to be rejected.

+ Ad interim relief granted earlier stands vacated.

[para 77, 79, 81, 82, 83, 85]

- Petitions rejected: GUJARAT HIGH COURT

2020-TIOL-1801-HC-AHM-GST

Cosmo Films Ltd Vs UoI

GST - Petitioner was entitled to import raw materials without payment of IGST under Advance Authorization Licenses [AA Licenses] and pay IGST on exports and claim Rebate (Refund) of the IGST so paid on exports - The petitioner has received benefits of rebate of IGST at the relevant point of time - Thereafter, sub-rule (10) of Rule-96 of the CGST Rules was amended by Notification dated 4th September, 2018 with retrospective effect from 23rd October, 2017, providing that rebate on “exports” cannot be availed by the petitioner, if the “inputs” procured by the petitioner have enjoyed AA benefits or Deemed Export Benefits under the said notification - Therefore, the petitioner was unable to utilize the benefit of duty-free imports under AA Licenses and take the benefit of rebate on exports, because of the amendments made in Rule-96(10) of CGST Rules - It appears that, thereafter, by Notification No. 53/2018-Central Tax dated 9th October 2018, sub-clause (a) and (b) of sub-rule 10 of Rule 96 of the CGST Rules were merged - Thereafter, vide Notification No. 54/2018-Central Tax dated 9th October 2018, the sub-rule 10 of Rule 96 of the CGST Rules was again demerged and "with effect from 23rd October, 2017" thereby indicating that Notification No. 54/2018-Central Tax did not intend to apply the amendment to Rule-96(10) of the CGST Rules retrospectively - The petitioner has, therefore, preferred this petition challenging the aforesaid notifications and amendments made in sub-rule 10 of Rule-96 of the CGST Rules, by Notification No. 54/2018 denying the option to claim rebate to the petitioner because they imported inputs/goods under AA Licenses, as being ultra vires the provisions of the CGST Act and the CGST Rules made there under and Article 14 of the Constitution of India. Held: + On conjoint reading of the provision of Section 16 of the IGST Act, Section 54 of CGST Act and Rule-96(10) of CGST Rules, which is substituted by Notification No. 54/2018 dated 9th October 2018, it is apparent that the person who has availed the benefits of Notification No. 48/2017 dated 18th October 2017 and other Notifications as stated in sub-rule 10 shall not have the benefit of claiming refund of integrated tax paid on exports of goods or services. The petitioner has availed benefits under Advance Authorization License scheme as per the Notification No. 18/2015-Cus which was amended by Notification No. 79/2017-Cus dated 13th October 2017 and paid integrated tax on the goods procured by the petitioners for the export purpose. + Notification No. 48/2017-C.T . dated 18th October 2017 has declared the following goods and the explanation thereto states that, "Advance Authorization" means an authorization issued by the Director General of Foreign Trade under Chapter4 of the Foreign Trade Policy 2015-20 for import or domestic procurement of inputs on pre-import basis for physical exports. Therefore, as the petitioner has availed the benefits of AA License as per Notification No. 40/2017-CT (Rate) dated 23rd October 2017 and has enjoyed the exemption of GST on the supply of the goods from the registered supplier for the purpose of export on fulfilling the conditions prescribed therein. It appears that, thereafter, by Notification No. 39/2018-CT dated 4th September 2018 has substituted the sub-rule (10) of Rule-96 w.e.f. 23rd October 2017, however, by Notification No. 54/2018 , the application of the substituted sub-rule (10) of Rule-96 is not made effective from 23rd October, 2017, but it was made applicable from the inception. Therefore, the petitioner who has availed the benefit of the Notification No. 39/2018 from 23rd October, 2017 to 4th September, 2018 would not be able to get the refund of the IGST paid or the input tax credit balance in the accounts of the petitioner, in view of the Notification No. 54/2018 . + Considering the effect of the Notification No. 54/2018 , the contentions raised on behalf of the respondents that there is no discrimination qua the petitioner is tenable in law, as by the amendment made by Notification No. 54/2018 it clearly denied the benefit which is granted to the petitioner by the Notification No. 39/2018 was withdrawn as the same was not made applicable from 23rd October, 2017. + Vide Notification No. 16/2020-CT dated 23.03.2020 an amendment has been made by inserting following explanation to Rule 96(10) of CGST Rules, 2017 as amended (with retrospective effect from 23.10.2017) - "Explanation. For the purpose of this sub-rule, the benefit of the notifications mentioned therein shall not be considered to have been availed only where the registered person has paid Integrated Goods and Services Tax and Compensation Cess on inputs and has availed exemption of only Basic Customs Duty (BCD) under the said notifications." + By virtue of the above amendment, the option of claiming refund under option as per clause (b) is not restricted to the Exporters who only avails BCD exemption and pays IGST on the raw materials thereby exporters who wants to claim refund under second option can switch over now. The amendment is made retrospectively thereby avoiding the anomaly during the intervention period and exporters who already claimed refund under second option need to payback IGST along with interest and avail ITC. + In view of above amendment, the grievance of the petitioner raised in this petition is, therefore, taken care of. However, it is also made clear that Notification No. 54/2018 is required to be made applicable w.e.f. 23rd October, 2017 and not prior thereto from the inception of the Rule 96(10) of the CGST Rules. Therefore, in effect Notification No. 39/2018 dated 4th September, 2018 shall remain in force as amended by the Notification No. 54/2018 by substituting sub-rule (10) of Rule 96 of CGST Rules, in consonance with sub-section (3) of Section 54 of the CGST Act and Section 16 of the IGST Act. The Notification No. 54/2018 is therefore held to be effective w.e.f. 23rd October 2017. [para 8.12 to 8.15, 9]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-1793-HC-KERALA-GST

Varahamurti Flexirub Industries Pvt Ltd Vs State Of Kerala

GST - Petitioner is aggrieved by the notice issued u/s 129(3) of the CGST Act, 2017, detaining his goods and vehicle - Objection of the respondent is that the value of the goods shown in the e-way bill on the portal is different than that shown in the hard copy of the e-way bill that was tendered by the driver of the vehicle - Petitioner submits that at the time of transportation of goods, additional goods of lower value were also entrusted with the transporter and a revised invoice as well as e-way bill was generated to cover the said transaction; that the revised e-way bill could not be uploaded on to the system and hence the discrepancy.

Held: While the explanation offered by the petitioner is one that ought to be considered by the respondents before passing the final order u/s 129(3) of the Act in form GST MOV-9, the petitioner can be permitted to obtain a release of his goods and vehicle on furnishing a bank guarantee for the amount covered by the notice - Writ petition is disposed of accordingly: High Court [para 2]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-1792-HC-KAR-GST

Bagmane Developers Pvt Ltd Vs UoI

GST - Petitioner is engaged in taxable services such as commercial/industrial construction service, works contract services, repair services and renting of immovable properties - Petitioner has been issued a SCN dated 06.03.2020 inter alia seeking denial of ITC of Rs.62.83 crores and recovery of the same along with interest; seeking denial of ITC of Rs.16.29 crores as being barred by limitation u/s 16(4) r/w section 39(1) of the Act and Rule 61(5) of the Rules, 2017 - Petitioner has impugned the notice challenging the validity of the provisions of s.17(5)(c) & (d), s.16(4), rule 61(5), section 50 and 164(3) of the act with the alternative prayer for reading down the provisions of s.17(5)(c) & (d) and 16(4) of the Act permitting the use of ITC on goods and services used in the construction of 'business-to-business' cases with denial of ITC only in ‘business-to-consumer' cases.

Held: At this stage, Department's interest will have to be taken care of while considering the interim prayer for stay of the impugned notice - If the impugned SCN had resulted into a demand and if the petitioner had to avail a statutory remedy and be entitled for an interim protection pending adjudication of remedy, statutorily such protection to the petitioner could only be conditional - in view of the provisions of s.107(6) of the Act, an assessee, when he files an appeal against crystallized demand will have to deposit in full the undisputed amount and a sum equal to ten percent of the amount in dispute - Accordingly, Court orders that there shall be stay of the impugned SCN dated 06.03.2020 on the condition that the petitioner shall maintain a minimum of the 10% of the disputed availment in its electronic credit ledger subject to the outcome of the writ petition - Matter to be listed on 20.11.2020: High Court

- Interim stay granted: KARNATAKA HIGH COURT

2020-TIOL-1791-HC-MUM-GST

Apex Packing Products Pvt Ltd Vs UoI

GST - Challenge is to the order made by the Addl. Commr. Of Taxes - Petitioner points out that though several contentions were raised by the petitioner, the same have not at all been considered by the authority; that such non-consideration of several contentions amounts to violation of the principles of natural justice.

Held:  The order cannot be regarded as an unreasoned order - It is not necessary to entertain the petition merely because it is pointed out that all the contentions raised on behalf of the petitioner may or may not have been specifically considered in the impugned order - These are matters which can always be agitated in the course of the appeal which is provided against the impugned order - The inadequacy of reasons or the correctness of reasons can always be effectively agitated in an appeal - It is possible in a given case that a matter can be disposed of on some limited grounds - In any case, these are matters which can always be looked into by the appellate forum - If necessary, appellate forum can itself decide such contentions without going in for remand - Petitioner should be relegated to alternate remedy available by way of appeal - appellate authority to dispose of appeal, if filed, as expeditiously as possible and in any case, within four months - Petition disposed of: High Court [para 5, 7, 9, 11]

- Petition disposed of: BOMBAY HIGH COURT

2020-TIOL-1767-HC-DEL-GST

Litecon Industries Pvt Ltd Vs UoI

GST - Petition has been filed challenging the final order dated 13th April, 2020 passed by National Anti-profiteering Authority 2020-TIOL-21-NAA-GST whereby it has been held that the petitioner profiteered Rs.55,60,340/- during the period 01st January, 2019 to 31st March, 2019 - Petitioner also challenges the recovery letter dated 15th July, 2020 issued pursuant to the directions in the aforesaid impugned order - Petitioner further prays for a declaration that Section 171(3) of CGST Act and Chapter XV of the CGST Rules specifically Rules 126, 127 and 133 are ultra vires and unconstitutional as well as a declaration that composition of NAPA is unconstitutional - Petitioner submits that they have already deposited fifty percent of the alleged profiteered amount viz. Rs.27,80,170/- vide demand draft with the Central Consumer Welfare Fund; however, due to Covid-19 pandemic, the petitioner be allowed to deposit the balance amount in installments.

Held: Keeping in view earlier orders passed in similar matter, Court directs the petitioner to deposit the balance principal profiteered amount i.e. Rs.25,15,392/- (Rs.55,60,340/- minus Rs. 2,64,778/- minus Rs.27,80,170/-) with the State Consumer Welfare Fund in six equated monthly installments commencing 02nd November, 2020 - The interest amount directed to be paid by the respondents as well as the penalty proceedings are stayed till further orders - Matter to be listed on 21st December, 2020: High Court [para 9 to 11]

- Matter listed : DELHI HIGH COURT

2020-TIOL-1766-HC-DEL-GST

Samsonite South Asia Pvt Ltd Vs UoI

GST - Petitioner is seeking a direction to respondent nos. 2 and 3 to make available all such details of the relevant State Consumer Welfare Funds (CWFs) in whose favour the Petitioner is required to make pre-deposit of the alleged profiteered amount, in compliance with the order dated 20th July, 2020 = 2020-TIOL-1213-HC-DEL-GST passed by this Court – Petitioner states that the details of the State CWFs are neither available in the public domain nor have been mentioned in the various Notifications and Office Memorandums issued by the respondent no. 2.

Held: It seems strange to the Court that while the petitioner wants to pay, the State Consumer Welfare Funds are neither operational nor functional - The Secretary, GST Council is directed to co-ordinate with the State Government and place the matter before the GST Council, if required, to ensure that the State Consumer Welfare Funds become operational and functional as expeditiously as possible - Till the State Consumer Welfare Funds become operational and necessary details of the State CWFs are made available to the petitioner, the petitioner is directed to deposit the entire amount with the Centre Consumer Welfare Funds - Present application stands disposed of: High Court [para 7 to 9]

- Application disposed of : DELHI HIGH COURT

2020-TIOL-1765-HC-DEL-GST

Gaursons Realtech Pvt Ltd Vs UoI

GST – Anti-Profiteering – s.171 of the CGST Act, 2017 – Petitioner seeks a stay on the operation of direction under Rule 133(4) of the CGST Rules given in the impugned order dated 07th July, 2020 = 2020-TIOL-38-NAA-GST to the respondent no.3 to undertake further investigation and the notice dated 09th October, 2020 as well as summons dated 25th September, 2020 both issued by the respondent no. 3 – Petitioner informs that this Court stayed the penalty proceedings as well as investigation with regard to other projects of the petitioner vide order dated 5th October, 2020 – However, respondent no.3 vide notice dated 09th October, 2020 directed the applicant to answer the summons dated 25th September, 2020 and provide the information/ documents in respect of its project '16th Park View' as there was no stay of direction passed under Rule 133(4) of the CGST Rules, 2017 vide Order dated 05th October, 2020 – Petitioner further submits that the entire benefit of input tax credit as well as reduction in rate of tax has been passed on to the flat buyers.

Held: Direction under Rule 133(4) of the CGST Rules given by the National Anti-Profiteering Authority in the impugned order dated 07th July, 2020 = 2020-TIOL-38-NAA-GST to the respondent no.3 to undertake further investigation and the notice dated 09th October, 2020 as well as summons dated 25th September, 2020 are stayed till further orders – Application disposed of: High Court [para 9]

- Application disposed of: DELHI HIGH COURT

2020-TIOL-1757-HC-AHM-GST

Rajesh Kiran D Vs JCST

GST - Writ applicant is in the business of Areca Nuts - He received a letter from a party, situated at Delhi for supply of Areca Nuts - Three invoices were generated for the purpose of supply of the goods to the party stationed at Delhi - The goods were loaded in a vehicle bearing No. TN 50AA3666 from Kasaragod - E-way bills were generated on 01.08.2020 for all the invoices referred to above - The respondents intercepted the vehicle at 8:30 p.m. at Songadh-Surat Road and issued Form MOV-01 - The goods and the truck came to be seized under Section 129 of the GST Act, 2017 - In the Form GST MOV-06 discrepancies have been shown upon physical verification of the goods and the conveyance - Applicant inter alia seeks quashing of the said order of seizure.

Held: The matter, as on date, is at the stage of Form GST MOV-10 - Thus, the writ applicant has been called upon to show-cause as to why the goods and the vehicle should not be confiscated under Section 130 of the Act - The writ applicant is before this Court with a prayer that the goods and the vehicle may ordered to be released pending the confiscation proceedings - As the confiscation proceedings are pending, Bench is not inclined to grant any relief as prayed for at this point of time - If the writ applicant wants provisional release of the goods and the vehicle, it is always open for him to prefer an application before the authority concerned under Section 67(6) of the Act, 2017 - And if such application is filed, then the authority concerned shall look into the same at the earliest and pass an appropriate order in accordance with law - With the above observations, writ application stands disposed of: High Court [para 5 to 7]

- Petition disposed of: GUJARAT HIGH COURT

AAR CASES

2020-TIOL-284-AAR-GST

Zigma Global Environ Solutions Pvt Ltd

GST - The applicant is engaged in providing service of Solid Waste management to the Municipal Corporation of Erode city - The applicant approached the AAR seeking to know the classification of the service of Solid Waste Management - revamping of existing dumped garbafe in compost yards by Bio-mining process provided by the applicant to M/s Erode City Municipal Corporation - The applicant also sought to know if these services are exempt as per Sr No 3 of Notfn No 12/2017 as amended - The applicant also sought to know if the Erode City Municipal Corporation is liable to deduct TDS as per Section 51 of the CGST Act for services rendered.

Held - The service of Solid Waste Management - Revamping of Existing Dumped Garbage in Compost Yards by Bio-Mining process, provided by the applicant to M/s Erode City Municipal Corporation is classifiable under SAC 9994 as per Annexure to Notfn No 11/2017-CT(R) - Such service provided by the applicant is exempted from tax under Sr No 3 of Notfn No 12/2017-CT(R) as amended - The question raised by the applicant, pertaining to the liability of the Erode City Municipal Corporation to deduct TDS in respect of services rendered by the applicant, are not admissible as per Section 97 of the CGST Act: AAR

- Application disposed of: AAR

2020-TIOL-283-AAR-GST

Abdul Razak Safiullah

GST - The applicant is engaged in trading of Betel nuts - The applicant approached the AAR seeking to know whether Nizam Pakku bought and sold by the applicant, would be classifiable under CTH 0802 8030 of the Customs Tariff Act and so attract 2.5% CGST as per Notfn No Sl No 28 of Schedule I of Notfn No 01/2017-CT(R) and equivalent rate of SGST.

Held - The item Nizam Pakku traded by the applicant is classifiable under Chapter 0802 8090 of the Customs Tariff and attracts 6% CGST as per Sr No 15 of Schedule II under Notfn No 01/2017-CT(R) and 6% SGST under Notfn No II(2)/CTR/532(d-4)/2017 as amended: AAR

- Application disposed of: AAR

2020-TIOL-282-AAR-GST

GST - One-time long term lease premium payable/paid by the Jinmangal Corporation to Ahmedabad Urban Development Authority (AUDA) is supply and thus liable to pay tax as per Section 7 - Jinmangal Corporation is required to discharge/pay tax under Reverse Charge Mechanism in accordance to Section 9(3) on one-time lease premium payable to AUDA in light of notification No. 13/2017 as amended by 05/2019 - Annual lease premium payable/paid by the applicant is supply and tax is payable on the same under reverse charge mechanism: AAR  

- Application disposed of: AAR

2020-TIOL-281-AAR-GST

IIT Madras Alumni Association

GST - Activities undertaken by the applicant IIT Madras Alumni Association for its members as defined in their Memorandum of Association and bylaws for which membership fees and other charges are collected are covered under the definition of supply of services u/s 7 of the CGST Act, 2017 since it is in the course of furtherance of business as per s.2(17) of the Act - Applicant having their annual turnover over the prescribed threshold as per section 22 of the Act is liable to be registered under the Act: AAR

- Application disposed of: AAR

2020-TIOL-280-AAR-GST

ST Engineering Electronics Ltd

GST - Rate of tax of 6% CGST as per entry No.3 (v) of Notification No. 11/2017 amended vide Notification No.1/2018- Central Tax(rate) dated 25th January 2018, effective from 25.01.2018 may be applicable to the applicant provided the works contracted and undertaken by them satisfies the definition of ‘Works Contract' as defined in clause(119) of section 2 of the CGST Act, 2017: AAR

- Application disposed of: AAR

2020-TIOL-279-AAR-GST

Tamil Nadu Textbook And Educational Services Corporation

GST - Applicant is a society established by State government with the Chief Minister as the Chairman of the Board, Educational Minister as Vice Chairman and Secretaries to the government as members with control by the state government, therefore, the applicant is a ‘government entity' as defined under (B)(v) of the 2/2017-CTR - Supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater, Rain Coats, Ankle Boots and Socks to government and government aided schools based on the State Government educational policy for which the consideration is paid to applicant Tami Nadu Text Book and Educational Services Corporation by the State Government by means of a budgetary allocation constitutes a supply under the Act - however, above activities of the applicant is exempt with effect from 13.10.2017, vide entry Sl.No.150 in the Notification No.2/2017-Central Tax (Rate) dated 28.6.2017 as amended by Notification No. 35/2017-C.T. (Rate) dated 13th October 2017 and, therefore, the applicant is not entitled to claim credit of tax paid on the related purchases of goods and services: AAR

GST - As per section 95(a) of the Act, a ruling can be sought in relation to the supply of goods or services or both undertaken or proposed to be undertaken by the applicant - The Q.No. 5, 6, 7 relates to receipt of service and not supply of service by the applicant, therefore, the said question is not taken up for consideration for the reason that it is not covered under the purview of this Authority: AAR

- Application disposed of: AAR

2020-TIOL-278-AAR-GST

Kumaran Oil Mill

GST - Applicant supplies edible oil, electrical energy and Renewable Energy Certificate (REC) - REC are traded in power exchanges with stipulated regulations and such REC are taxable under GST - Applicant is engaged in the business of generating electric energy through the solar PV cell generator under the REC scheme which entitles the applicant, REC equivalent to the electrical energy generated and uploaded in the grid for supply to the third parties - To become eligible to REC, it is necessary to generate electricity using RE sources and thus it cannot be held that the output of Photo Voltaic generator is only ‘electrical energy' but REC is also an output of generation of electricity using RE source - Solar PV Cell generator being a Plant, the related credits are not blocked under section 17(5) of the Act, 2017 - Proportionate claim of Input Tax Credit is available for the applicant and the provisions of s.17(2) applies to the case on hand - Subject to the goods being capitalised in their books of account, the applicant is eligible to claim ITC on such goods as ‘capital goods' and the provisions of rule 43 of the CGST Rules is applicable to determine the eligible credit in respect of the taxable supplies made by them - in respect of inputs and input services, the attributable credit is to be arrived at by applying rule 42 of the Rules - it is further clarified that ‘Total turnover of the registered person' should include the ‘turnover of edible oil business' and ‘total turnover of power generation business': AAR

- Application disposed of: AAR

2020-TIOL-277-AAR-GST

Tube Investments Of India Ltd

GST - Activity of body building undertaken on a truck chassis made available by a customer to the applicant amounts to supply of services as per Schedule II, clause 3 of CGST Act, 2017 [under SAC 998881 @18%] - Circular 52/26/2018-GST dated 09.08.2018 relied upon: AAR

- Application disposed of: AAR

2020-TIOL-276-AAR-GST

SGS India Pvt Ltd

GST - Applicant is engaged in providing various inspection, verification, testing and certification services in the agriculture and food production process in its laboratories set up in India - They sought a ruling as to whether the supply of ‘inspection and testing services' on fresh table grapes is classifiable under SAC 9986 of 11/2017-CTR [Support services to agriculture, forestry, fishing, animal husbandry] or in terms of Entry 54(a) of 12/2017-CTR and chargeable to Nil rate of tax.

Held: Activities of testing for chemical residue, grading based on physical attributes of table grapes as per the procedure of APEDA are not classifiable under SAC 9986 as they are not meant for preparation of crops for primary market and not necessary for production of the grapes - such activity is rightly classifiable under SAC 998346 - Hence, they are not directly related to the production of the table grapes - Accordingly, the activities of the applicant are not eligible for the exemption under 11/2017-CTR or for exemption under Entry No. 54 (a) of Notification No. 12/2017-C.T.(Rate): AAR

- Application disposed of; AAR

2020-TIOL-275-AAR-GST

MFAR Hotels And Resorts Pvt Ltd

GST - Supply of soft beverages/aerated water, whether in person or as room service, by the restaurant located in the premises of the hotel is a composite supply; taxable @18% as per S. no. 7 of 11/2017-CTR: AAR

GST - Supply of cigarettes/tobacco products by the restaurant in person or as room service is a mixed supply; taxable @28% as per Sl. no. 14 of Schedule IV of 1/2017-CTR along with GST Compensation Cess: AAR

GST - Supply of alcoholic liquor for human consumption by a restaurant will not be taxable under CGST Act, 2017: AAR

GST - Supply of free meals to the employees at a canteen located in the premises of the hotel of the applicant is a supply under the Act, 2017 and liable to GST @18% as per Sl. no. 7 of 11/2017-CTR as amended on the value determined by rule 28 of the CGST Rules, 2017: AAR

- AAR

2020-TIOL-274-AAR-GST

Macro Media Digital Imaging Pvt Ltd

GST - Printing of content provided by the recipient on the PVC materials of the applicant and supply of printed trade advertising material to the recipient is a Composite supply and 'supply of service of printing' is the principal supply - classification of service is under SAC 998912 and tax rate is @18% during the period from 1st July 2017 to 13.10.2017 and thereafter @12%: AAR

- Application disposed of: AAR

2020-TIOL-273-AAR-GST

ICU Medical India Llp

GST - Applicant has sought a ruling on the following questions viz. whether GST is leviable on the reimbursement of expenses from the subsidiary company to its ultimate holding company located in a foreign territory outside India and, in case GST is leviable, what is the rate of GST applicable to the said reimbursement of expenses.

Held: Applicant is engaged in the business of software development for the infusion system manufactured by its ultimate holding company, ICU Medical Inc. - the ultimate holding company has entered into a contract with Wells Fargo Bank through which certain employees of the applicant are extended with the credit card issued by the said bank - The card is to be used by the employees for the travel requirements on business needs - ultimate holding company settles the amount payable with the bank and in turn raises invoices on the applicant and collects the charges used by the employees of the applicant - Applicant does not come into the picture for any transactions with Wells Fargo - It is also seen from the agreement between Wells Fargo and ICU Medical Inc. that ICU Medical Inc. is the entity with all the financial and legal obligations - It is evident from the above that ICU Medical Inc. is making the supply of the credit cards to the applicant for use of its employees, on its own account and not as an 'intermediary' - Service imported by the applicant is, therefore, one of extension of credit for furtherance of business - Said service is appropriately classifiable under SAC 997113 - Applicant is liable to pay IGST under Reverse charge, the applicable rate is 18% as per Sl. no. 15 of 8/2017-ITR: AAR

- Application disposed of: AAR

2020-TIOL-272-AAR-GST

Gourmet Popcornica Llp

GST - Pre-mix popcorn maize (corn kernels) packed with edible oil and salt supplied by applicant is classifiable under CTH 2008 1990 and not under CTH 2106 - From the packaging, it is evident that they are 'specifically packed for popcorn vending machines and not for retail sale' - Rate of tax is @12% GST w.e.f 01.07.2017: AAR

- Application disposed of: AAR

2020-TIOL-271-AAR-GST

Erode Infrastructures Pvt Ltd

GST - Applicant seeks to know as to whether the upfront lease amount paid to M/s Rail Land Development Authority (RLDA) for the development of multi-functional complex (operational building) at Erode railway junction for long term lease for 45 years is exempt under GST.

Held: Advance ruling are decisions on questions specified in sub-section 97(2) of the CGST Act in relation to the supply of goods or services undertaken or proposed to be undertaken by the applicant seeking the same - Therefore, supplies undertaken or proposed to be undertaken by the applicant alone are covered under the Advance Ruling as per s.95(a) of the Act - In the instant case, applicant is not making the supply but it is by Rail Land Development Authority (RLDA) - question that does not pertain to the recipient-applicant cannot be answered by the Authority - as per the Act, the recipient of the supply in question cannot seek advance ruling under the Act - Application is rejected: AAR

- Application rejected: AAR

2020-TIOL-270-AAR-GST

Chennai Metro Rail Ltd

GST - Applicant, Chennai Metro Rail Ltd., had acquired a portion of the property (including the land which is now leased out to the owner) for public purpose from Dr K Prema on payment of adequate compensation - As per clause 4 of the agreement entered into, Dr K Prema is entitled to use the passage with 3 Meter width and 14 Meter length out of the acquired land for shared access purpose for 35 years and has to pay Rs.30 lakhs towards lease amount - It appears that the arrangement is made since Dr K Prema from whom the property is acquired has no pathway to her residential property - Applicant has sought a ruling on the taxability of the said transaction inasmuch as it is the view of the applicant that the lease amount received from the lessee would not attract GST by virtue of the exemption granted under 12/2017-CTR.

Held: As per the MOU, the applicant has given the right to use the pathway to the individual so that she can access the main road from her residential property - The pathway is owned by the applicant and is also to be used by both the applicant and the individual - It is clear that this right of use of the 'pathway' granted to the lessee for a fixed period for an amount qualifies the definition of 'Easement' of the land owned by the applicant as per section 4 of the Indian Easement Act, 1882 - It is seen that in the course of business of the applicant i.e constructing the metro station, the applicant has given easement rights to the land measuring 452 sq.ft. to the individual for an agreed amount - Hence, it is seen that this transaction of granting easement rights satisfies the conditions of s.7(1)(a) as 'supply' under the CGST Act - further as per section 7(1A) and para 2(a) of the Schedule II to the Act, activity of easement of land constitutes supply of service - In the instant case, it is not a lease of the pathway but only Easement rights are granted to the individual by the applicant, therefore, the classification of the service supplied is not covered under SAC 9972 which covers renting or leasing of property - The applicant has agreed through a MOU to tolerate her use of this pathway for a period of time for consideration, hence this service of agreeing to grant easement rights is a service of agreeing to tolerate an act and is classifiable under SAC 999794 under 'Other Miscellaneous Services'/'Agreeing to tolerate an act' - Held that act of agreeing to grant easement rights of the pathway by the applicant to Dr K Prema (lessee) by way of shared access as per the MOU is classifiable under SAC 999794 and taxable @18% GST in terms of Sr. no. 35 of 11/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-269-AAR-GST

Vimos Technocrats Pvt Ltd

GST - Pure Consultancy services (without supply of goods) provided by applicant to Municipalities and Corporations (local bodies) and State Government departments are exempt from GST as per Sr. no. 3 of 12/2017-CTR - Pure Consultancy services provided to private individuals is taxable @18% as per Entry no. 21 of 11/2017-CTR - ITC paid on purchase of capital goods like furniture, computer, lab equipments, drone camera, total station, auto level instruments etc. and on certain input services will be restricted to so much of the input tax as is attributable to taxable supplies made by applicant as per s.17(2) of the CGST Act, 2017: AAR

- Application disposed of: AAR

2020-TIOL-268-AAR-GST

Karnataka State Cooperative Marketing Federation Ltd

GST - Supply of Kharif Arhar (Tur) commonly known as Pigeon Pea and Kharif Green Gram without any brand name to NAFED is an exempted supply as per Entry no. 45 of 2/2017-CTR - GST paid on purchase of gunny bags shall not be claimed as ITC as per s.17(2) of the Act - provisions of TDS does not apply to the applicant as they are not covered under the list provided either in notification 51/2018-CT or under the list prescribed u/s 51 of the Act: AAR

- Application disposed of: AAR

2020-TIOL-267-AAR-GST

Fraunhofer Gessellschaft Zur Forderung Der Angewwandten Forschung EV

GST - Liaison activities being undertaken by the applicant (Liaison Office - LO) in line with the conditions specified by RBI amounts to supply in terms of s.7(1)(c) of the CGST Act, 2017 - Applicant is required to be registered under the Act and is liable to pay GST if the place of supply of services is India: AAR

- Application disposed of: AAR

2020-TIOL-266-AAR-GST

Ambara

GST - Applicant is engaged in the business of providing health care services and also runs a hospital in the name of CURA hospital - The applicant provides the services relating to healthcare services which are in the nature of diagnostic and treatment services - The applicant seeks an advance ruling in respect of the following questions viz. whether ITC is required to be restricted on medicines supplied to patients admitted in hospital; whether ITC is required to be restricted on medicines supplied to patients treated as outpatients; whether ITC is required to be restricted on medicines supplied to other than inpatients and outpatients; whether ITC is required to be restricted on supply of food and beverages to the patients admitted in hospital.

Held:

+ The treatment services for diseases are 'healthcare services' as defined under 12/2017-CTR and supply of healthcare services provided by a clinical establishment is exempt from the levy of tax as per Entry no. 74 of the said notification - Since the output supplies are exempt, the applicant is not eligible to claim the ITC paid on the inward supplies of medicines that are used for providing 'healthcare services' to the inpatients: AAR

+ Applicant, while providing treatment to the outpatients uses certain consumables such as medicines, bandages, cotton etc. hence the same are consumed in the provision of healthcare services and the output is only healthcare services - as there is no separate/distinct supply of medicines, bandages, cotton etc. and since they are used in the supply of exempt healthcare services, the impugned supply cannot be a composite supply - applicant is not eligible to claim ITC on taxes paid: AAR

+ With regard to the supply of medicines and other goods to the customers, the applicant is selling the medicines as a trader and hence they are liable to collect and pay the applicable tax on the goods sold and also is eligible to claim ITC like any supplier of taxable goods, subject to the restrictions in s.17 of the CGST Act: AAR

+ Insofar as supply of food and beverages to the inpatients is concerned, if the supply of food and beverages is under the prescribed diet as a part of the treatment process and if it is an integral part of the treatment, then the food and beverages loses its identity as a separate supply and merges with the supply of treatment service similar to supply of medicines - such a supply is an ancillary to the supply of treatment service i.e. healthcare service which is an exempted supply under Entry no. 74 of 12/2017-CTR - in such a situation, no ITC is available: AAR

+ However, if the supply of food and beverages is at the request of the patient, in which regard the Authorised representative clarifies that inpatients are not allowed to consume outside food, since the supply becomes naturally bundled with the treatment service i.e. healthcare service and the supply becomes composite supply which is exempted under Entry 74 of 12/2017-CTR, in which case applicant cannot claim ITC: AAR

- Application disposed of: AAR

AAAR CASES

2020-TIOL-64-AAAR-GST

Bajaj Finance Ltd

GST – Applicant/appellant had sought a ruling as to whether penal interest is to be treated as "interest" for the purpose of exemption under Sr. no. 27 of 12/2017-CTR - AAR held that exemption for financial transactions under GST laws is only in respect of interest/discount earned or paid for loans, deposits or advances; that if the transaction, as in the subject case deviates from the above, the same fails the test of being a "loan" , "deposit" or "advance" or the consideration is not an interest or discount, the exemption is not admissible – AAR further observed that amount of penalty charges is recovered/imposed only because the loanee has delayed the payment of EMI (which consists of principal amount and interest amount) and since recovery of penal charges is made in view of toleration of the act of the loanee by the applicant, the same constitutes a "supply" as per sr. no. 5(e) of Schedule II of the CGST Act and is, therefore, taxable - Aggrieved by the order of AAR, appellant had filed an appeal before the Appellate Authority and which was rejected by the AAAR vide order dated 14.03.2019 - Appellant has filed an application u/s 102 of the Act on 13.09.2019 for rectification of the said order.

Held: Appellant submits that the said ruling is contrary to the CBIC Circular no. 102/21/2019-GST dated 28.06.2019 [read with corrigendum dated 15 July 2019] wherein it is clarified that the transaction of levy of additional/penal interest does not fall within the ambit of Entry 5(e) of Schedule II of CGST Act, 2017 and hence would not be subject to GST; that since the Circular is merely clarificatory in nature it will have retrospective effect; that beneficial Circulars have to be applied retrospectively as held by the Supreme Court in the case of Suchitra Components [2007-TIOL-09-SC-CX] - AAAR concedes that the ruling made in the impugned AAAR order dated 14.03.2019 is contrary to the interpretation of the legal provision as envisaged by the Board and since the same is a beneficial Circular it has to be applied retrospectively in keeping with the judgment of the apex court - AAAR, therefore, rectifies its order dated 14.03.2019 to read and hold that the additional/penal interest recovered by the appellant from customers against delayed payment of monthly instalments of the loan extended to the customers would be exempt from GST in terms of Sr. no. 27 of 12/2017-CTR: AAAR

- Application allowed: AAAR

2020-TIOL-63-AAAR-GST

Kasturba Health Society

GST - AAR has held that the Applicant/appellant had entered into a joint project with the State and Central Governments to form a Medical college named Mahatma Gandhi Institute of Medical Sciences (MGIMS) and which is an entity different from that of the applicant, hence applicant/appellant cannot be said to be satisfying all the criteria of an “Educational Institution”; that it is MGIMS which appears to be engaged in imparting medical education and not the applicant, therefore, the applicant falls within the scope of sections 22 or 24 of the CGST Act and they are liable to obtain registration if they provide taxable services and their turnover exceeds the threshold limit prescribed for registration - Aggrieved, appellant is before the AAAR.

Held: Delay of 26 days in filing appeal is condoned since there was a considerable loss of time in filing appeal electronically which facility was not functional and the GSTN Help desk advised applicant to present appeal manually - The documentary evidences relied upon by the appellant do not detract from the fact that it is MGIMS which is affiliated with the State Universities and monitored, controlled and regulated by the Medical Council of India and the role of the appellant society is merely as the caretaker of the said medical institute, which is responsible for its management and administration as per the agreements entered by the appellant society with the Central Government and the State Government of Maharashtra - Thus the core functioning of providing the medical education is carried out by MGIMS and not by the appellant society - Since it has been established that the medical institute, MGIMS, which is engaged in providing medical education is a separate and distinct entity from the appellant society insofar as applicability of GST law is concerned, the questions asked by the appellant cannot be answered/not maintainable in terms of clause (a) of section 95 of the CGST Act as they do not pertain to the appellant: AAAR

- Appeal disposed of: AAAR

2020-TIOL-62-AAAR-GST

Kavi Cut Tobacco

GST -  Applicant company intended to manufacture and supply tobacco product - Raw dried tobacco leaves are purchased from wholesale dealers - The stems & dust are removed and then cured to prevent decay - Such tobacco is then cut into small pieces in a cutting machine which is packed in pouches/pottalams for purpose of retail sale in shops and is sold under the brand name of the applicant - The applicant approached the AAR seeking to know the appropriate classification and applicable rate of compensation cess for such product - AAR held that t he product intended to be manufactured by the applicant and supplied as Chewing Tobacco under the brand name Kavi Cut tobacco, is classifiable under CTH 2403 9910 as Chewing Tobacco; that the applicable rate of compensation cess is provided under Sr No 26 of Notfn No 1/2017-Compensation Cess @ 160% - Aggrieved by this order of AAR, appeal has been filed. 

Held: Customs Tariff/HSN does not define "Unmanufactured/manufactured tobacco" in the section/chapter notes - Manufacture is defined in GST law in section 2(72) of the Act - Any process on the raw material resulting in emergence of a new product with a distinct name, character and use is defined as 'manufacture' - the appellant has purchased 'Raw dried tobacco leaves' from wholesale dealers/farmers and then undertakes the process of grading, drying, dipping in jaggery water, stalking, semi-drying, mincing, subjecting to natural/agricultural preservatives, weighing and packing for supply - Thus the raw material which is 'Raw dried tobacco leaves' undergoes the above process and the end product 'Chewing Tobacco' with distinct character and use emerges which makes it marketable/consumable for the chewing needs - Therefore, the product supplied by the appellant is 'Manufactured tobacco product for chewing' - once it is held that the product is 'Manufactured Chewing tobacco', the classification of the product is under CTH 2403 9910 as held by the lower authority and there appears to be no need for intervening with the order of AAR - AAR order upheld and appeal is rejected: AAAR 

- Appeal rejected: AAAR

2020-TIOL-61-AAAR-GST

Rajesh Rama Varma

GST - Applicant/appellant is engaged in the business of providing IT software related consulting services in the area of Oracle ERP w.r.t Oracle financials - Applicant approached the AAR seeking to know whether the services provided by him to foreign client through the principal M/s Doyen Systems are treatable as export of service as the final service claimed by the principal qualifies as export of service - The applicant also sought to know as to whether where the services are treated as export of service would the applicant be eligible to claim taxes paid towards such export of services as refund - Whether the payment of fees received in Indian INR currency from the principal is to be treated as export remittance and also whether the applicant can raise invoices with IGST taxes instead of CGST + SGST for claiming refund - AAR held that the services provided by the applicant to M/s Doyen Systems Pvt. Ltd qualifies as supply of service under CGST / TNGST Act and the applicant is liable to pay tax on such supply; that the remaining questions raised by the applicant are not within the ambit of the authority u/s 97(2) and so do not merit being answered - Aggrieved by this order of the AAR, appeal filed before AAAR.

Held: On a conjoint reading of the definitions of "recipient" and "consideration" as mentioned in s.2(93) and s.2(31) of the Act, it can be concluded that the statute is unambiguous inasmuch as it says, the person liable to pay the consideration for supply of services is the 'recipient' of such supply and 'consideration' is any payment made whether by the recipient or any other person for such supply - It is not disputed that the appellant is under contractual obligation to M/s Doyen Systems to provide services through 'M/s Doyen Systems' for which payment is agreed to be made by M/s Doyen Systems to the appellant after verifying the invoice and the client time-sheet as in the contract agreement - Payment of consideration to the appellant is entirely with the M/s Doyen Systems and the appellant cannot claim consideration directly with the client of M/s Doyen Systems or the client of M/s Doyen Systems is not the person liable to pay the appellant for the services supplied by the appellant - Thus, it is clearly evident that the recipient of the services of the appellant is M/s Doyen Systems - no reason, therefore, to interfere with the order of the AAR - Appeal rejected: AAAR

- Appeal rejected: AAAR

2020-TIOL-60-AAAR-GST

Karnataka State Electronics Development Corporation Ltd

GST - AAR had held that s treet lighting activity under the Energy Performance Contract [ESCO] amounts to composite supply where the principal supply is that of supply of goods; that the rate of tax applicable is @ 12% in terms of Sl. no. 226 of Schedule II to 1/2017-CTR; that since the impugned supply is not a pure service, applicant is not entitled to the benefit of exemption under Entry 3 or 3A of Notification 12/2017-CTR; that the time of supply is the date of invoice and the consideration is equal to the value of invoice, the GST rate being 12% - aggrieved, the applicant has filed an appeal before the AAAR.

Held: Supply under the ESCO contract is a composite supply involving both, a supply of service as well as supply of goods - The principal supply is, however, a supply of service as it is the operation, management and maintenance of the street lighting system which is the essence of the ESCO contract - the LED lights and other equipment like smart feeder panels are goods used for the rendering of the service, therefore, AAAR disagrees with the lower authority's ruling that the principal supply is a supply of goods - There is no doubt on the fact that the supply is made to a local authority (Thane Municipal Corporation) and the service supplied is in relation to a function entrusted to the municipality under Article 243W of the Constitution - However, the ESCO contract involves the supply of goods albeit at the time of the termination of the contract, therefore, the first condition of it being a pure service is not fulfilled - A pure service must necessarily not involve a supply of goods - AAR order in case of Kochi Metro Rail Ltd. is binding only on the applicant and the officer concerned and jurisdictional officer nonetheless in that case there is no mention of supply of goods by applicant - Appellant is, therefore, not eligible for exemption benefit as a pure service under entry no. 3 of 12/2017-CTR - Even the benefit of exemption under entry 3A of 12/2017-CTR is not available since the condition that the value of goods supplied should not exceed 25% of the total value of supply is not satisfied - Service of street lighting is classifiable under heading 9991 12 and this heading is chargeable to tax at the rate of 18% - time of supply in this case will, in terms of s.13 of the CGST Act be the earliest of the following dates viz. date of issue of invoice to TMC or date on which the payment is entered in the books of account of supplier or date on which the payment is credited to his bank account - AAR order is set aside and appeal is disposed of: AAAR

Appeal disposed of: AAAR

2020-TIOL-59-AAAR-GST

Macro Media Digital Imaging Pvt Ltd

GST - Applicant had sought a ruling as to whether the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of "goods"; what is the classification of such trade advertisement if the transaction is supply of "goods"; what is the classification and applicable rate of GST on the supply of such trade advertisement material if the transaction is that of supply of "service" - AAR had adverted to Circular 11/11/2017-GST dated 20.11.2017 and concluded that the activity of printing the content supplied by the recipient on the PVC material becomes principal supply and such supply constitutes supply of "service" falling under SAC 9989; that the applicable rate of GST on the supply of the said service is @18% up to 30.10.2017 and @12% w.e.f 31.10.2017 as per Entry no. 27 of 11/2017-CTR - Aggrieved, the applicant is before the AAAR.

Held: What has been lost sight of is the fact that the activity of digital printing on the PVC material brings into existence a new product with a specific use for advertising and known in trade and common parlance as "Flex banner" or "Flex billboard" or "free standing display unit" - Appellant is not merely printing the images or reproducing the content given by customers on to the PVC material - The appellant is making a product which serves as an advertising material for the customer - Without the activity of printing the content given by the customer, the PVC material is of no use to the customer as it does not serve the purpose of any advertisement - The activity of printing brings into being an advertisement product and it is this product which has been ordered by the customer - Printing is a service rendered by the appellant to himself in order to execute the supply of trade advertising material - In other words, the supply in the case of the appellant is not the printing service but a supply of the trade advertisements either as a banner or billboard or free-standing display unit etc. which are products emerging out of the printing activity - What the appellant does is supply a product which it produces to the customer's requirements and satisfaction - The supply of the product is the predominant activity - Furthermore, cost of the product supplied by the appellant is charged on the basis of Sq. Ft. - Appellate Authority is of the opinion that digital printing on PVC material gives rise to a distinct trade advertisement product and supply of such products by the appellant is a supply of goods - Ruling given by AAR is set aside - Such Trade advertisements are classifiable under SH 4911 10 and attract GST @12% in terms of Sl. no. 132 of Schedule II of 1/2017-CTR: AAAR

- Appeal disposed of: AAAR

2020-TIOL-58-AAAR-GST

NMDC Ltd

GST - AAR had held by its order dated 21.09.2019 [2019-TIOL-397-AAR-GST] that r oyalty paid in respect of Mining lease is a part of consideration payable for licensing services for right to use minerals including exploration and evaluation falling under Heading 9973 and the same is taxable at the rate applicable on supply of like goods involving transfer of title in goods up to 31.12.2018 and taxable at 9% CGST and 9% SGST from 01.01.2019 under residual entries of Sr. no. 17 of 11/2017-CTR as amended - AAR further held that s tatutory contribution made to District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) as per MMDR Act, 1957 is also a part of the consideration payable for the licensing services for right to use minerals including exploration and evaluation - Furthermore, s ince supply of services by the government to a business entity located in the taxable territory are covered under Sr. no. 5 of 13/2017-CT, the liability to pay tax is on the recipient of such services on reverse charge basis - applicant had filed an application dated 23.01.2020 for rectification of an alleged mistake in the said order dated 21.09.2019 but the said application was rejected by the AAR by its order dated 23.03.2020 - applicant has, therefore, filed appeal against the said order of rejection of rectification application.

Held: It is clear that even in cases where a rectification of mistake application is admitted and a mistake apparent on record is corrected, the original order is not set aside; the original order remains on record and only the mistakes are corrected therein; that the principle of doctrine of merger will not apply in such cases - Any appeal can be made only against the original order which will be read together with the correction made in the rectification order - In the present case, the rectification application was not admitted as there was no error apparent on record and hence the original order stands without any changes - Therefore, the appeal should have been filed by the appellant against the Advance ruling order dated 21.09.2019 within the period of 30 days from the date of communication of the said order - Assuming for the sake of argument that the present appeal is an appeal against the advance ruling dated 21.09.2019, even then it is observed that the statutory time limit for filing an appeal against the advance ruling has long expired - The appellate authority being a creature of statute is empowered to condone a delay of only a period of 30 days after the expiry of the initial time period for filing appeal and not beyond - In view of the aforesaid, AAAR holds that the appeal filed against ROM order dated 23.03.2020 is not maintainable inasmuch as the impugned order is not an appealable order u/s 100 of the CGST Act, 2017 - ROM rejection order dated 23.03.2020 does not merge with the original advance ruling dated 21.09.2019 - since the appeal is not maintainable, the question of addressing the issues raised in the appeal does not arise: AAAR

- Appeal dismissed: AAAR

NAA CASES

2020-TIOL-68-NAA-GST

Director-General Of Anti-Profiteering Vs Infinity Retail Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - CROMA - Applicant alleges profiteering by respondent in respect of DSLR Cameras and Power Banks supplied by him - it is further alleged that the respondent did not reduce the selling prices of the DSLR cameras and Power banks when the GST rate was reduced from 28% to 18% w.e.f 01.01.2019 and thus the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the prices - DGAP in its report has concluded that during the period 01.01.2019 to 30.06.2019 the amount of net higher sales realisation due to increase in the base prices of the impacted goods, despite reduction in the GST rate from 28% to 18% viz. the profiteered amount comes to Rs.1,91,21,441/- spread over supplies made across fourteen States - Supplementary report was sought from DGAP on the issues raised by the respondent in their submission dated 03.02.2020 and a report was submitted by DGAP on 27.02.2020 - in response, respondent filed their submission on 22.06.2020.

Held: After considering the submissions made by the respondent and the report of DGAP, Authority finds that the amount of profiteering [of Rs.1,91,21,441/-] arrived at by the DGAP is correct - It is pertinent to note that the pre-rate reduction base prices included all the costs which the Respondent had borne while selling these products and hence, the respondent cannot invent additional costs to be taken into account while computing the profiteered amount - There is also no evidence on record to show that the sales made by the respondent were on discount as all the sales mentioned were normal sales as admitted by the respondent - Respondent is directed to reduce his prices commensurately and since the recipients are not identifiable, deposit the profiteered amount in the Consumer Welfare Fund of the Centre/States/UTs as per the provisions of rule 133(3)(c) - amount to be deposited along with interest @18% payable from the date when the amount was realised from customers/recipients till the date of deposit in the CWF - amount to be deposited within three months failing which the Commissioners CGST/SGST concerned to recover the same and submit a compliance report within four months - since during the period of profiteering, the provisions of s.171(3A) were not in operation, no penalty can be imposed for contravening the provisions of s.171 of the Act - present order is passed u/r 133(1) of the Rules by taking note of notification 65/2020-CT: NAA

- Application disposed of: NAA

2020-TIOL-67-NAA-GST

Director General Of Anti-Profiteering Vs Nirala Projects Pvt Ltd

GST - Anti-Profiteering - DGAP had in its report dated 24.04.2019 submitted that upon investigation based on the complaint, it was found that the respondent had not passed on the benefit of additional Input Tax Credit (ITC) to the applicant as well as other home buyers who had purchased flat in their project Nirala Greenshire; that the respondent had denied the benefit of ITC to the applicant and other buyers amounting to Rs.2,88,43,422/- during the period 01.07.2017 to 31.12.2018 and had thus indulged in profiteering and violation of the provisions of s.171(1) of the CGST Act, 2017 - Authority had passed an order dated 18.12.2019 [2019-TIOL-75-NAA-GST] determining the profiteered amount as computed by the DGAP and also held the respondent to have contravened the provisions of s.171(1) of the Act; accordingly, a notice dated 04.02.2020 was issued seeking imposition of penalty in terms of s.171(3A) r/w rule 133(3)(d) of the Rules, 2017 - respondent has challenged the proposal for imposition of penalty on the primary ground that s.171(3A) was made effective by virtue of notification 01/2020-CT dated 01.01.2020 and, therefore, this penalty provision cannot have retrospective operation.

Held: Since no penalty provisions were in existence between the period 01.07.2017 to 31.12.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed u/s 171(3A) cannot be imposed on the respondent retrospectively - accordingly, the notice dated 04.02.2020 issued is withdrawn and the proceedings initiated in this regard of penalty are dropped: NAA

- Proceedings dropped: NAA

2020-TIOL-66-NAA-GST

Director General Of Anti-Profiteering Vs Starbucks Coffee

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent [who is engaged in the business of operating and maintaining restaurants under the name of 'Starbucks - A Tata Alliance or Starbucks Coffee - A Tata Alliance' where he sells coffee, tea, iced beverages and food items] inasmuch as it is alleged that the respondent has not passed on the benefit of reduction in the GST rate on restaurant service when it was reduced from 18% to 5% w.e.f 15.11.2017 without benefit of ITC but had increased the base prices of the food items sold by him and applied 5% GST thereon by either maintaining the pre-rate reduction selling prices or even increasing them in the post-rate reduction period and thus had resorted to profiteering - DGAP had in its latter report dated 26.12.2018 revised the profiteered amount as being Rs.2,42,82,996/- from the initial amount arrived at of Rs.4,51,29,600/- - Authority had vide its interim order no. 18/2019 dated 05.12.2019 directed DGAP u/r 133(4) of the Rules to re-investigate on specific issues as detailed in its order - such report was submitted by the DGAP on 05.02.2020 and wherein the profiteered amount is computed as Rs.1,04,70,664/- and which figure has been arrived at by comparing the average of the base prices of the items sold in each category - DGAP also argued that the allegation of profiteering by way of increasing the base prices of the products to more than offset the impact of denial of Input Tax credit despite a reduction in the GST rate from 18% to 5% w.e.f 15.11.2017 (with denial of input tax credit) stood confirmed against the respondent and hence s.171(1) of the Act stood attracted.

Held: Respondent is trying to mislead by wrongly claiming that he was required to carry out complex mathematical computations for passing on the benefit of tax reduction which he could not do in the absence of the procedure and methodology - such claim is incorrect as the respondent was only required to maintain the pre-rate reduction base price of each product being sold by him and then to add 11.79% [to offset the denial of ITC] of the base price in the base price of the product and then charge reduced rate of GST of 5% in the post rate reduction period, however, the respondent is misappropriating the benefit by utilising it in his business and is enriching himself at the expense of the vulnerable customers - respondent cannot deny the benefit of tax reduction to his customers on the above ground as section 171 of the Act provides clear cut methodology and procedure to compute it; that the contention of the respondent is frivolous and cannot be accepted - DGAP computation of profiteered amount as Rs.1,04,70,664/- agreed with - respondent is directed to reduce the prices of his products as per rule 133(3)(a) of the Rules, 2017 so that the benefit of tax reduction is passed on to the respondents - respondent is directed to deposit the profiteered amount along with the interest to be calculated @18% in terms of rule 133(3)(b) of Rules - since the recipients are not identifiable, the respondent is directed to deposit the above amount of profiteering along with interest in the Consumer Welfare Funds of the Central and the State governments as per provisions of rule 133(3)(c) of the Rules in the ratio of 50:50 along with interest @18% - amount to be deposited within three months failing which the same shall be recovered by the Commissioners CGST/SGST concerned - compliance report to be submitted within four months - since s.171(3A) was not in operation during the period 15.11.2017 to 30.06.2018, penalty under the said section cannot be imposed - present order is being issued in terms of rule 133(1) of the Rules read with notification 65/2020-CT: NAA

- Application disposed of: NAA

2020-TIOL-65-NAA-GST

Director General Of Anti-Profiteering Vs Alton Buildtech India Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant(s) submits that they had purchased flats in the respondent's project ‘Aangan' and alleges that the respondent had not passed on the benefit of Input Tax credit to them by way of commensurate reduction in prices of flats in terms of s.171(1) of the Act - DGAP in its report dated 14.06.2019 concluded that post-GST, the respondent had benefited from additional ITC to the tune of 10.25% of the taxable turnover and this should have resulted in commensurate reduction in the base price, therefore, the benefit of additional ITC that had accrued to the respondent was required to be passed on to the recipients - contention of the respondent that in view of the price cap of Rs.4000 per sq.ft. under the AHP, they were prohibited from increasing the price on account of increase in the input cost or input tax in the pre-GST regime and, hence, any decrease in price was not warranted is not legally sustainable since the respondent could not make good the loss suffered, if any, in the pre-GST era, by not passing on the benefit of ITC under the GST regime; that the total profiteered amount during the period from 01.07.2017 to 31.12.2018 was Rs.6,24,48,008/- (inclusive of GST @12% or @8%) and this also includes the amount of Rs.4,32,315/- being the profiteered amount in respect of the five applicants; that the rest of the 805 eligible recipients were identifiable and the profiteered amount of Rs.6,20,15,693/- was required to be returned to them - respondent submits that out of the total ITC of Rs.5,91,28,513/- [para 35] availed by the respondent under the GST regime, the majority amount of Rs.4,89,22,956/- pertained to credit of tax paid on Input construction services rendered by the sub-contractors; that majority of the credit now available under the GST regime which was in respect of the Input services received from sub-contractors was never a cost earlier as the said service providers were exempted from payment of service tax and consequently the contractors neither discharged service tax nor recovered the same from the respondent; that, thus, there was no benefit under the GST regime on account of availability of ITC so as to warrant commensurate reduction the price and accordingly there could be no contraction of s.171 of the Act - Authority had after considering the reports filed by the DGAP and the submissions of the respondent had ordered reinvestigation [Interim Order 20/2019 dt. 13.12.2019] in the matter in terms of rule 133(4) of the Rules on specific issues - accordingly, DGAP submitted its report one 12.02.2020 stating that the figures of profiteering arrived at by them in its earlier report is correct and the contention of the respondent is untenable.

Held: Authority holds that the computations made by the respondent are wrong and arbitrary and hence are not worth consideration; that the ratios of ITC has been computed by the respondent on the wrong and arbitrary figures of ITCs and turnovers and hence cannot be taken into account; that the profiteered amount is determined as Rs.6,24,48,008/- which includes GST on the base profiteered amount of Rs.5,71,81,399/-; that the said amount shall be paid by the respondent to the eligible buyers within a period of three months along with interest @18% failing which the amount would be recovered by the Commissioner CGST/SGST concerned and paid to the eligible buyers - Respondent is required to reduce the rate of allotment (of Rs.4000/- per sq. ft.) commensurate with the benefit of ITC - since the respondent has contravened the provisions of s.171 of the Act, he is liable for imposition of penalty but since section 171(3A) has come into force w.e.f 01.01.2020 and the period during which the violation has occurred is 01.07.2017 to 31.12.2018, penalty cannot be imposed on respondent retrospectively - Authority directs the Commissioners of CGST/SGST Haryana to monitor the compliance of the order under the supervision of DGAP - compliance report to be submitted to the Authority within four months - DGAP is also directed to investigate the Phase II and Phase III of the Aangan project as per rule 133(5) of the Rules r/w s.171(2) of the Act and submit a report accordingly - Present Order is passed keeping in view notification 65/2020-CT issued u/s 168A of the Act, 2017: NAA

- Application disposed of: NAA

2020-TIOL-64-NAA-GST

Director General Of Anti-Profiteering Vs Signature Builders Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Authority had vide its order dated 13.12.2019 - 2019-TIOL-72-NAA-GST concluded that the respondent had benefited from the benefit of additional ITC to the extent of 2.72% of the turnover; that as per the DGAP calculations, the profiteered amount for the period 01.07.2017 to 31.12.2018 stands at Rs.2,58,80,297/- and which was required to be refunded to the flat buyers along with interest @18% - Respondent was also issued notice dated 21.01.2020 asking him to explain why the penalty mentioned in s.171(3A) of the Act, 2017 read with rule 133(3)(d) of the Rules should not be imposed on him for violation of the provisions of s.171(1) of the Act - respondent vide their submissions dated 18.02.2020 stated that they were in the process of transferring the benefit of ITC to their buyers but no evidence was furnished to the Authority.

Held: Vide section 112 of the Finance Act, 2019, specific penalty provisions have been added for violation of the provisions of s.171(1) of the Act which have come into force w.e.f 01.01.2020 vide notification 1/2020-CT by inserting s.171(3A) in the Act - Since no penalty provisions were in existence between the period w.e.f 01.07.2017 to 31.12.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed u/s 171(3A) cannot be imposed on the respondent retrospectively - Accordingly, notice dated 21.01.2020 issued to the respondent for imposition of penalty u/s 171(3A) is hereby withdrawn and the present penalty proceedings launched against them are dropped: NAA

- Proceedings dropped: NAA

2020-TIOL-63-NAA-GST

Director General Of Anti-Profiteering Vs Signature Global Developers Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Project Synera - Authority had vide its order dated 21.11.2019 [ 2019-TIOL-60-NAA-GST ] concluded that the respondent had benefited from the benefit of additional ITC to the extent of 2.61% of the turnover; that as per the DGAP calculations, the profiteered amount for the period 01.07.2017 to 31.12.2018 stands at Rs.1,42,06,267/- and which was required to be refunded to the flat buyers along with interest @18% - Respondent was also issued notice dated 27.12.2019 asking him to explain why the penalty mentioned in s.171(3A) of the Act, 2017 read with rule 133(3)(d) of the Rules should not be imposed on him for violation of the provisions of s.171(1) of the Act - respondent made their submissions vide letter dated 27.02.2020 stating that in compliance with the order of the authority they had transferred the benefit of ITC to the buyers of the project and that penalty cannot be imposed on them as the provisions of s.171(3A) have come into force w.e.f 01.01.2020 whereas the investigation carried out by DGAP is limited up to 31.12.2018 - DGAP has submitted a report dated 17.03.2020 certifying that the respondent had passed on the profiteered amount to the 820 buyers of residential project and 64 buyers of the commercial unit along with interest.

Held:  Vide section 112 of the Finance Act, 2019, specific penalty provisions have been added for violation of the provisions of s.171(1) of the Act which have come into force w.e.f 01.01.2020 vide notification 1/2020-CT by inserting s.171(3A) in the Act - Since no penalty provisions were in existence between the period w.e.f 01.07.2017 to 31.12.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed u/s 171(3A) cannot be imposed on the respondent retrospectively - Accordingly, notice dated 27.12.2019 issued to the respondent for imposition of penalty u/s 171(3A) is hereby withdrawn and the present penalty proceedings launched against them are dropped: NAA

- Proceedings dropped: NAA

INTRIM ORDER

Smookey Kitchen Foods OPC Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - complainant has alleged that the respondent has increased the base prices of his products and not passed on the benefit of reduction in the GST rate from 18% to 5% w.e.f 15.11.2017 - DGAP in its report dated 28.01.2020 has concluded that the allegation of profiteering stood confirmed against the respondent inasmuch as the respondent had maintained the same selling prices or not reduced the selling prices of the products commensurately despite a reduction in GST rate and the amount profiteered comes to Rs.6,49,397/-.

Held: Authority observes that the case pertains to a franchisee of M/s Subway India Private Limited in Ghaziabaad who is supplying various food products to his recipients/customers; that there has been a reduction in rate of tax from 18% to 5% w.e.f 15.11.2017 on the restaurant service being supplied by the respondent with the conditionality of denial of ITC - DGAP has in its clarificatory report dated 14.06.2020 submitted that while computing the quantum of profiteering the sales data of World Sandwich Day (WSD) on 03.11.2017 has been excluded while working out the product-wise base prices for the pre-tax rate reduction period i.e. from 01.11.2017 to 14.11.2017; that under this offer the respondent was offering one similar product free for every product purchased by a customer on 03.11.2017 (Buy One Get One BOGO offer); that the DGAP has reported that the sales data of the WSD was excluded because the sales data of 03.11.2017 was an outlier and hence an exception - Authority finds this exclusion improper because in several similar cases pertaining to other franchisees of M/s Subway India, the sales data of WSD was not excluded while computing profiteering and hence the method used for computation of profiteering becomes an aberration and unacceptable - Authority, under the powers conferred on it under rule 133(4) read with section 171 of the Act directs DGAP to reinvestigate this case and recompute the quantum of profiteering by duly incorporating the sales data of the World Sandwich Day as on 03.11.2017 in the calculation of the pre-tax rate reduction prices - due to Covid pandemic and read with notification 65/2020-CT, present order is being passed although it is beyond the period prescribed under rule 133(1) of the CGST Rules, 2017: NAA

- Interim order passed: NAA

Devi 70 MM

GST - Anti-Profiteering - DGAP in its report dated 27.12.2019 stated that the respondent had not passed on the benefit of reduction in the GST rate on ‘Services by way of admission to exhibition of cinematograph films where price of admission ticket was one hundred rupees or less' from 18% to 12% which came into effect from 01.01.2019; that the respondent had instead increased the base price of the tickets; that the profiteered amount is arrived as Rs.1,29,243/- for the period January 2019 to June 2019 (excluding the period from 11.03.2019 to 08.05.2019) - a supplementary report was also received from DGAP on 26.02.2020 on the submissions made by the respondent and a further reply was received from the respondent by email dated 18.06.2020.

Held:  Authority is not a price regulator - It is a fact that the price of the First and Second Class movie tickets has been reduced commensurately by respondent w.e.f 11.03.2019, therefore, the period from 11.03.2019 has no relevance from the perspective of s.171 of the Act and hence no profiteering can be established for the period after 11.03.2019 - However,  since the respondent has increased the price of the movie tickets of the first and second class categories only in the month of May 2019, this price increase cannot be correlated to the provisions of s.171 of the Act - DGAP has also reported that in the post-tax rate reduction period, the respondent has maintained the same base prices in respect of the Upper and Lower balcony categories of move tickets and, hence, Authority observes that there is no profiteering in the above category of these movie tickets - Therefore, though profiteering has been established against the respondent in the categories of First class and Second class movie tickets, the computation of profiteering merits to be limited only up to 10.03.2019 as respondent has reduced the base prices commensurately for the  First class and Second class movie tickets after 11.03.2019 - No profiteering can thus arise for the period after 11.03.2019 - This is, therefore, a fit case for recomputation of the profiteered amount - Under the provisions of rule 133(4) of the Rules, 2017, Authority directs DGAP to recompute the amount and furnish his report under rule 129(6) of the Rules - present order is passed on 08.10.2020, after considering the pandemic prevalent and the notification 65/2020-CT, although the same is beyond the date prescribed under rule 129(6) of the Rules: NAA

- Interim order passed: NAA

IO No. 20/2020

Mataji Paints & Hardware 

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent had not passed on the benefit of reduction in the rate of GST on paints from 28% to 18% w.e.f 27.07.2018 and instead had increased the base prices of the paints sold by him thus denying the benefit of commensurate reduction in the cum-tax price to the recipients - Copies of sales invoices were submitted in support and which revealed that the respondent had increased the per-unit base price from Rs.4062.73 to Rs.4322.25 when the rate of GST was reduced from 28% to 18% w.e.f 27.07.2018 - DGAP in its report dated 29.03.2019 submitted that the respondent who supplied the above products viz. Paints, varnishes and putty was impacted with the above notification in the case of 331 products; that out of the 331 products, only in the case of 151 products the base prices were increased denying the benefit of reduction of the rate of tax to the recipients - DGAP, has in his report not expressly mentioned as to how it had been concluded that the base prices had been increased by the respondent and it appears that the DGAP had arrived at the profiteered amount by comparing the average prices of the various products taking into account the prices of the products before rate reduction (01.07.2018 to 26.07.2018) with the actual selling prices of the products after rate reduction (27.07.2018 to 30.09.2018) - the report also does not elaborate on how the per-unit base prices for the two periods were arrived at and, therefore, this calculation made by DGAP requires further clarification - in the interest of justice and to determine the profiteered amount based on complete submissions made by the respondent, this Authority directed the DGAP to reinvestigate the following issues viz. to re-examine the pre-rate reduction per unit price for the period before 27.07.2018 and specifically state the calculation as to how it has been arrived at; to re-examine whether the per-unit price before 27.07.2018 is a discounted price and if so whether the comparable price is also a discounted price etc. - subsequently DGAP submitted a comprehensive report dated 10.10.2019 after reinvestigation and concluded therein that the total amount of profiteering covering the period 27.07.2018 to 30.09.2018 is worked out as Rs.3,76,360/-.

Held: Profiteered amount has been computed by comparing the average pre-rate reduction base prices of the impacted products with the monthly average post rate reduction base prices in respect of both the tax reductions - the above mathematical methodology adopted by the DGAP to compute the profiteered amount is not in line with the methodology adopted by the DGAP himself in similar cases of profiteering wherein the average pre-rate reduction base prices have been compared with the actual post rate reduction prices to compute the profiteered amount; that in case the mathematical methodology of comparing the average to average base prices employed by the DGAP is adopted, it would not be possible to compute the benefit of tax reduction which is due to each customer on each supply - The profiteered amount computed by the DGAP would also not be correct, hence the methodology adopted is not correct, logical, appropriate and in consonance with the provisions of s.171 of the Act, 2017 - The reports dated 29.03.2019 and 10.10.2019 furnished by the DGAP cannot be accepted, therefore, the DGAP is directed to reinvestigate the above case under rule 133(4) of the CGST Rules, 2017 and submit a report - DGAP is directed to compare the average pre-rate reduction base prices of the products which were impacted by the tax rate reduction w.e.f 27.07.2018 with the actual post rate reduction base prices of the impacted products - Present order is passed in terms of notification 35/2020-CT considering the pandemic situation: NAA

- Interim order passed: NAA  

CGST RATE NOTIFICATION

05/2020

Exemption granted to Satellite launch services supplied by ISRO, Antrix Corporation Limited or New Space India Limited

04/2020

Extension of CGST exemption on services by way of transportation of goods by air or by sea from customs station of clearance in India to a place outside India, by one year i.e. upto 30.09.2021.

CGST RULES NOTIFICATION

88/2020

E-invoice for registered persons having aggregate turnover exceeding 100 crores w.e.f 1 st January 2021

87/2020

Time limit for furnishing declaration in FORM GST ITC-04 for period July to September 2020 extended till 30 November 2020

86/2020

GSTR-3B for October 2020 to March 2021 - Notification No. 76/2020-CT rescinded

85/2020

Special procedure for payment of tax of 35% of tax liability - effective 01.01.2021

84/2020

Furnishing of quarterly returns in FORM GSTR-1 - registered persons notified - deemed option

83/2020

Due date for filing GSTR-1 - Extension thereof - Notifications 74/2020-CT & 75/2020-CT to be superceded w.e.f 01.01.2021

82/2020

Central Goods and Services Tax (Thirteenth Amendment) Rules, 2020 notified - rules 59, 60, 61 to be substituted w.e.f 1 st January 2021

81/2020

Furnishing of returns - substituted sub-sections (1), (2) and (7) of s.39 of the CGST Act, 2017 come into force

80/2020

Seeks to amend notification no. 41/2020-Central Tax dt. 05.05.2020 to extend due date of return under Section 44 till 31.12.2020.

CGST CIRULAR

143/2020

Quarterly Return Monthly Payment Scheme

ARTICLES

ITC admissible on sales promotion schemes

E-Invoice for credit note and debit note

Is coupon sale a tale with a missing tail in GST?

GST - An agenda for reforms - Part - 89 - Advance rulings - Eliminating adversity and bringing clarity

Liaison Offices under GST - a tale of conflicting advance rulings

GST implications on Festival Gifts

IDS - Input Services & capital goods - Awaiting their fate

GST compliances - A constructive move towards automation

Amendment to Rule 142(1A) is anti-taxpayer

Rules transgress s.30 of the SEZ Act and also misread Customs Act

Henna powder - classification under GST regime

Ignoring limitation proves costly

Is penalty compulsorily attracted on late payment of GST?

GST Compensation Row Should Aid Enactment of Govt Debt Law

Brittle GST escapes the Hammer! - Centre, States need to ring-fence it for higher tax collections!

'Filthy Air' Saga - Is it not a case of Pot calling Kettle black!

Tax Returns & Politicians - They necessarily make quaint & strange bedfellows!

Where is the monkey now?The e-way, no way A Tax on Walking, Reading... for the disabled

Proliferate Litigation as much as you can