SERVICE TAX

Maruti Suzuki India Ltd Vs CCE

ST – Optional Extended Warranty Service, whether taxable under Motor Repair service - Money is collected irrespective of whether the vehicle is attended or not and this is how it is different than the service for repair, reconditioning, restoration or decoration of the motor vehicle because in the case of repair, reconditioning etc. the monetary consideration is received by the service provider only after attending on the job of repair, reconditioning etc. – Matter debatable, pre-deposit of service tax demand, interest and penalty waived and stay granted: CESTAT by Majority [para 17] - Stay granted: CHANDIGARH CESTAT

2018-TIOL-1450-CESTAT-DEL

ST - The disputed period is 01.05.2006 to 31.03.2007 - Assessee engaged in providing services to ICICI Bank by way of receipt of fresh applications for sanction of loan and credit cards - The data entry of details of application was made into certain data entry software developed by assessee - Department views that the activity carried out by assessee will be covered by definition of business support services under Section 65 (105)(zzzq) of FA, 1994 which was introduced w.e.f. 01.05.2006 vide Notfn 15/2006 - The activities carried out by assessee involve development of software templates into which data is entered by assessee - The details from documents, such as, loan application or credit card applications are entered into software and consolidated data is transferred to ICICI Bank for further processing - From the nature of activities carried out, it is evident that assessee is carrying out activities which are in nature of support services for business to M/s. ICICI Bank - To this extent, activities carried out will be covered under definition of business support service as it stood during the disputed period - Consequently, on merit the demand for service tax is upheld - Demand has been raised for period immediately after category of business support service was introduced into statute books - Consequently, Revenue is not justified in raising the demand by invoking suppression clause under Section 73 - Hence, the demand of Service Tax is to be restricted to that falling within the normal time limit - Levy of Service Tax upheld under business support service - However, the same will be restricted to normal time limit - Adjudicating Authority is directed to re-quantify the demand: CESTAT - Appeal partly allowed: DELHI CESTAT

2018-TIOL-1449-CESTAT-MAD

ST - Assessee, a partnership firm rendering clearing and forwarding services - It was alleged that the assessee not only collected commission towards C&F service but also collected some amount towards reimbursement of certain expenses incurred by them on behalf of clients - That they had paid service tax only on commission collected and had not included the reimbursable expenses for discharging service tax liability - The issue whether reimbursable expenses are includible in taxable value of services stands settled by decision of High Court of Madras in case of Sangamitra Services Agency 2013-TIOL-606-HC-MAD-ST - Further, Tribunal in case of Solaimalai Properties (P) Ltd. has held that actual expenses with mark-up are not to be included in taxable value of services for discharging service tax liability - Following the said decisions, demand is unsustainable, same is set aside: CESTAT - Appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-1448-CESTAT-CHD + Case Story

JSL Stainless Ltd Vs CCE

CX - CENVAT - SCN is silent on the name of the manufacturer who supplied the said goods to the first stage dealer which were in turn received by the appellant - National Udyog being a first stage dealer was therefore, eligible to purchase duty paid goods from any manufacturer - Had there been any investigation establishing that the inputs on which Cenvat credit was availed, as entered in the invoices issued by the first stage dealer, were the same goods which were involved in the investigation about the transaction between M/s AIP Industries and M/s National Udyog, then only this show cause notice could have sustained - it would be impracticable to require the assessee to go behind the records maintained by the first stage dealer - In the present case, the assessee is found to have duly acted with all reasonable diligence in its dealings with the first stage dealer – No cause for denial of CENVAT credit – Appeals allowed: CESTAT by Majority [para 4 to 6] - Appeals allowed : CHANDIGARH CESTAT

2018-TIOL-1447-CESTAT-CHD

CX - Assessee engaged in Zinc sulphate (agriculture grade) for which sulphuric acid an input which they procured from other manufactures without payment of duty - It was alleged that assessee wrongly availed benefit of exemption Notfn 4/2006-CE, serial no. 32 for receipt of sulphuric acid without payment of duty for used in manufacture of zinc sulphate - There are contrary decisions on the issue as referred by both the sides in the case of Himgiri Metals Pvt. Ltd. and assessee's own case, therefore, matter referred to Larger Bench of this Tribunal and Registry is directed to place the matter before President to constitute to Larger Bench to decide the issue: CESTAT - Case deferred: CHANDIGARH CESTAT

2018-TIOL-1446-CESTAT-AHM

CX - The refund claims of assessee were rejected mainly on the ground that these claims were filed beyond the time limit prescribed for refund prescribed under Notfn 9/2009-ST as amended by Notfn 15/2009-ST - While rejecting the refund as barred by limitation the authorities below had observed that service tax amounts have been paid beyond the stipulated period of six months against the services received, on which refund had been claimed under said Notfn - A simple reading of Clause 2(f) of Notfn 09/2009 , it is clear that refund claim is required to be filed within six moths from the date of payment of service tax to the service provider and not from the date of receipt of services - Otherwise also, in the event of delay in filing the claim, power to condone the delay is vested with Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise depending upon the circumstances of each case - Accordingly, matter is remanded to adjudicating authority for purpose of verifying the date of payment of service tax to the service provider so as to compute the period of limitation and also to consider the refunds on merit as proposed in the notice: CESTAT - Matter remanded: AHMEDABAD CESTAT

CUSTOMS

2018-TIOL-13-AAR-GST

Deepak & Co

Supply of food at railway platform stalls, in mail/express trains does not have an element of service – to be considered as supply of goods: AAR

Supply of food on board Rajdhani/Duronto trains – service charges covered under Service Code (Tariff) 996335 as "catering services in train" - not covered under S. No. 7 (i) of Notfn. 11/2017-CT(R) , 8/2017-IT(R) since a train is a mode of transport and hence cannot be called as a restaurant, eating joint, mess or canteen etc. – Taxable at ratesunder S. No. 7(ix): AAR

Supply of newspaper at platforms/in mail/express/Rajdhani/Duronto trains – Tax at 'Nil" GST under S. No. 120 of Notification No. 2/2017-CT(R) and parallel Notifications of IGST and Delhi GST: AAR

Questions before the AAR for which Advance Ruling is sought:

(I) What is the applicable rate of tax on the activity of applicant of supplying food/beverages in each of following mentioned cases – pursuant to the amendments made in notification 11/2017-CT(R) dt. 28.06.2017 by 46/2017-CT(R) and 8/2017-IGST(R) dt. 28.06.2017 by 48/2017-IGST(R) dt. 14.11.2017 and parallel Notifications of IGST and Delhi GST?

A) Supply of food through the food plaza (with A/C) on the railway platform /food stalls (without A/C) on the Railway platform:

++ For the supply of food (Cooked/ MRP/ Packed) in food plaza, the relevant document pertaining to details of items supplied, pricing detains, extent of services provided are not submitted. Hence, no ruling can be given in respect of supply from Food Plaza on the Railway Platform.

++ The supply of food and beverages (cooked/ MRP/ packed) by the applicant to the passengers/ general public at the rates fixed by the Indian Railways/ IRCTC at food stalls at Railway platforms does not have any element of service and hence the same shall be considered as pure supply of goods and GST shall be charged on individual items at their respective applicable rates. The mere heating/ cooling of beverages or similar other services are incidental and minimal required to supply of goods and such supply cannot be called composite supply.

++ The benefit of S. No. 7 of Notification No. 11/2017-CT(R) [as amended by 46/2017-CT(R) dated 14.11.2017]; Notification No. 8/2017-IT(R) [as amended by No. 48/2017-IT(R) dated 14.11.17] and parallel notification of State are not admissible to the applicant.

B) Supply of Food on board the Rajdhani Trains

++ In the case of supply of food and beverages (cooked/ MRP/ packed), and defined in menu and tariff, by the applicant to IRCTC/ passengers on behalf of IRCTC, on board the Rajdhani/ Duronto Express trains, the service charges are covered under Service Code (Tariff) 996335 in Group 99633 of heading 9963 of Annexure/ Scheme of Classification of Services as "catering services in train".

++ The same are covered under S. No. 7(ix) of Notification No. 11/2017- CT(R) dated 28.06.2017 as amended vide Notification No. 46/2017-CT(R) dated 14.11.17 and parallel Notifications of IGST and Delhi GST.

++ A train is a mode of transport and hence cannot be called as a restaurant, eating joint, mess or canteen etc. and hence catering services provided on-board a train are not covered under S. No. 7 (i) of the said Notifications as claimed by the applicant. The supply of goods i.e. food, bottled water etc. shall be charged to GST on value of goods (excluding the service charges) at applicable rates as pure supply of goods, as the same have no element of service.

C) Supply of Food on board the mail/express trains

++ In the case of supply of food and beverages (cooked/ MRP/ packed) on board the Mail/ express trains by the applicant directly to the passengers as per the menu/ rates fixed by IRCTC/ Railways does not have any element of service and hence the same shall be considered as pure supply of goods and GST shall be charged on individual items at their respective applicable rates.

++ The benefit of S. No. 7 of Notification No. 11/2017- CT(R) dat ed 28.06.2017 amended vide Notification No. 46/2017-CT(R) dated 14.11.2017; amendment made in Notification No. 8/2017-IT(R) dated 28.06.2017 amended vide Notification No. 48/2017-IT(R) dated 14.11.17 and parallel notification of State not admissible to the applicant.

(II) What is the applicable rate of tax on supply of newspaper in the above mentioned cases?

++ The supply of newspaper is separately invoiced and hence it shall be at 'Nil" GST under S. No. 120 of Notification No. 2/2017-CT(R) dated 28.06.2017 and parallel Notifications of IGST and Delhi GST.: - Application disposed :AUTHORITY FOR ADVANCE RULING

2018-TIOL-33-HC-AHM-GST

Torrent Power Ltd Vs UoI

GST - Petitioner is an electricity company engaged in generation, transmission and supply of electricity - Under the earlier VAT regime, transmission and distribution of electricity by an electricity transmission or distribution utility was exempted from payment of service tax - Government had also clarified by Circular 131/13/2010 dated 7.12.2010 that "Supply of electricity meters for hire to the consumers being an essential activity having direct and close nexus with transmission and distribution of electricity, the same is covered by the exemption for transmission and distribution of electricity, extended under the relevant notifications", thus the petitioners previously did not have to recover and pay service tax on transmission and distribution of electricity including the other incidental services provided by them - In the GST regime, exemption has been provided under heading 9969 where the exemption is for the following service viz. "Transmission or distribution of electricity by an electricity transmission or distribution utility" – Now, in Circular 34/8/2018-GST dated 1.3.2008, Serial no. 4 it is clarified that application fee for releasing connection of electricity, rental charges against metering equipment, testing fee for meters, transformers, capacitors, etc.,labour charges from customers for shifting of meters or shifting of service lines and charges for duplicate bill, are taxable services and based on such clarification summons dated 28.03.2018 have been issued to the petitioner calling for information and documents which includes the petitioner's balance sheet for the financial years 2012­2013 to 2016­2017, bifurcation of income of various services for the same period and the petitioner's bank statements for financial years 2012­2013 to 2017­2018 besides other information – Petitioner submits the clarification cannot operate retrospectively and at any rate cannot apply to a period prior to introduction of GST and, therefore, the action of the authority to call for information for the period as far back as the financial year 2012­2013 is therefore, wholly unjustified.

Held: Notice returnable on 3.5.2018 -Till further orders, the petitioners shall not have to reply to such summons dated 28.3.2018: High Court - Notice issued : GUJARAT HIGH COURT

2018-TIOL-32-HC-AHM-GST

Cera Sanitaryware Ltd Vs UoI

GST - Transitional Credit - At the cross over to GST regime, the petitioner as a trader had un-utilized input tax credit - Section 140 of the CGST Act, 2017 read with Rule 117 of the CGST Rules, 2017 lays down procedure and conditions, subject to which such credit would be available -Admitted fact is that the petitioner has not made a declaration referred to under sub-rule [1] of Rule 117 within the time permitted - Case of the petitioner is that its case is covered under sub-rule [4] which lays down detailed procedure and conditions for claiming tax credit and making a declaration under sub-rule [1] of Rule 117 is not applicable in case of the petitioner and in any case, such requirement is procedural.

Held: Question is, can the petitioner still claim tax credit, as provided under sub-rule [4] of Rule 117 of the Rules read with Section 140 of the CSGT Act, 2017 - Notice, returnable on 3rd May 2018: High Court - Notice issued : GUJARAT HIGH COURT