| 2020-TIOL-2225-HC-KERALA-GST
Royale Edible Company Vs State Tax Officer
GST - It is the case of the petitioner that a considerable quantity of the sales effected by it is to SUPPLYCO and FACT, who deduct tax at the rate of 2% on payments made to the petitioner in terms of Section 51 of the GST Act - It is stated that as on 30.04.2019, there was an excess of Rs.93,38,884/- available in the Electronic Cash Ledger of the petitioner - Seeing that such excess amount did not have to be maintained in the Electronic Cash Ledger, more so when there was no known liability of the petitioner towards tax, penalty, interest or other amounts under the Act, the petitioner approached the respondents for refund - Respondents rejected the claim for refund preferred by the petitioner citing Section 51 of the CGST Act and pointing out that, inasmuch as there was no excess deduction or erroneous deduction made by the deductor of tax in the instant case, the refund claimed by the petitioner could not be processed in terms of Section 54 of the Act - On the ground that the 2nd respondent completely misread the provisions of the Act while rejecting the application for refund preferred, the petitioner has filed the present Writ petition.
Held: 2nd respondent has completely misunderstood the nature of the claim made by the petitioner as also the scope and ambit of Sections 51 and 54 of the CGST Act - 2nd respondent, however, misdirected himself and treated the claim for refund preferred by the petitioner as one relating to Section 51(8) of the Act - It has to be noted that at no stage did the petitioner have a case that the deduction of tax at source by SUPPLYCO/FACT was excessive or erroneous - That being the case, there was no occasion for the 2nd respondent to have considered the application as one traceable to Section 51(8) of the Act - The only exercise that had to be done by the 2nd respondent was to ascertain whether there was a balance in the Electronic Cash Ledger, after meeting the known liabilities of the petitioner towards tax, interest or any other amount under the Act, and if there was such a balance, the refund had necessarily to be granted to the petitioner - Bench is, therefore, of the view that Ext.P4 order of the 2nd respondent cannot be legally sustained - The said order is, therefore, quashed and the 2nd respondent is directed to ascertain the excess amount lying to the credit of the petitioner in his Electronic Cash Ledger after making provision for any known and determined liability of the petitioner towards tax, interest, penalty or other amounts under the Act - The 2nd respondent shall thereafter refund the said excess amount to the petitioner within three weeks: High Court
- Petition allowed: KERALA HIGH COURT
2020-TIOL-2223-HC-KERALA-GST
Bon Cargos Pvt Ltd Vs ASTO
GST - No e-way bill accompanying the consignment - Appellant challenges the judgment of Single Judge refusing to interfere with two separate orders of detention - Appellant vehemently argues that the proceedings initiated itself are without jurisdiction since the goods detained had a value of less than Rs.50,000/- and there is an exemption as available under Rule 138 of the Central Goods and Service Tax Rules, 2017 .
Held: In Rule 138, Explanation 2 defines the consignment value of goods to be that declared in an invoice, a bill of supply or a delivery challan including the goods and services tax payable with any Cess charged - Sub-Rule (1) read with Explanation 2 leads to only one inference that the consignment value has to be determined from the invoice - But when goods of the same consignment covered by multiple invoices exceed the limit of Rs.50,000/-, necessarily there should be generation of e-way bill otherwise the mandate for generation of an e-way bill would be defeated and rendered redundant enabling the consignors to issue any number of bills having value below Rs.50,000/- and consign them in one vehicle - The consignment value is that shown in the invoice - When goods of the same consignor covered by different invoices are consigned together in one vehicle; the value will be the total of that in the multiple invoices - Bench is hence not satisfied that the detention was without jurisdiction - Both writ appeals are dismissed: High Court [para 5, 6]
- Appeals dismissed: KERALA HIGH COURT
2020-TIOL-2222-HC-MUM-GST
AJE India Pvt Ltd Vs UoI
GST - Petitioner is engaged in the business of manufacture and supply of carbonated fruit drinks, such as, Big Cola, Big Orange Cola, Big Lemon and similar other products - Such fruit juice based drinks were manufactured since December, 2017 having more than 5% juice content in apple drink and 2.5% in respect of lemon drink - Petitioner has been classifying such goods under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and specified at Serial No.48 under Schedule-II as "fruit pulp or fruit juice based drinks" of the Central Government Notification dated 28th June, 2017 taxable at the rate of 12% - Stand of the respondent is that the correct classification would be at HSN Code 2202 10 90 attracting GST at the rate of 28% and cess at the rate of 12% and which view has also been upheld by the GST Council in its 37th meeting; that because of misclassification of the products by the petitioner it has resulted in short payment of tax to the tune of approximately Rs.33 crores during the period from December, 2017 to February, 2020 - Impugned order dated 18th/19th November, 2020 was issued by respondent No.2 and addressed to the Branch Manager, ICICI Bank provisionally attaching bank accounts of the petitioner under section 83 of the Central Goods and Services Tax Act, 2017 – Petitioner seeks quashing of this this order.
Held: It is quite clear that petitioner had disclosed the details of its goods and had applied the classification which it thought was appropriate - On that basis it had filed its CGST returns and had been assessed - It is not the case that petitioner has defaulted in payment of tax as per its returns or assessment - On the other hand, respondent Nos.1 and 2 contends that it is a case of misclassification which has led to short payment of GST - Merely because there is a proceeding under section 67 would not mean that recourse to such a drastic power as under section 83 would be an automatic consequence, more so when petitioner has cooperated with the investigation - That apart, section 83 speaks of provisional attachment of any property including bank account - The record is silent as to whether any attempt has been made for provisional attachment of any property of the petitioner and instead why the bank accounts should be attached - Besides, by use of the word "may" in sub-section (1) of section 83, Parliament has made it quite clear that exercise of such a power is discretionary - When discretion is vested in an authority, such discretion has to be exercised in a just and judicious manner, more so when the power conferred under section 83 admittedly is a very drastic power having serious ramifications - Such power having the potential to adversely affect property rights of persons as well as life and liberty under Article 21 of the Constitution of India has to be exercised in a fair and reasonable manner - Being possessed of power is one thing and exercise of such power is altogether another thing - Because the Commissioner is conferred with the power of provisional attachment under section 83 it would not ipso-facto mean that he can straight away proceed to provisionally attach any property including bank accounts of a taxable person merely on the ground of pendency of proceedings under section 67 - Petitioner had already offered to respondent No.2 its land, building and plant and machinery having estimated gross value of approximately Rs.44 crores to secure the interest of the revenue - In such circumstances, Bench is of the view that recourse to section 83 by respondent No.2 straight away is not justified - Prima facie, such an exercise appears to be harsh and excessive, thus arbitrary – Consequently, Bench stays the impugned order dated 18th/ 19th November, 2020 and directs withdrawal of the provisional attachment of the bank accounts of the petitioner mentioned in the said order forthwith - However, petitioner shall furnish an undertaking before the Court by way of affidavit that it shall not alienate its land, building, plant and machinery during pendency of the present proceeding – Matter listed for final hearing on 9th March, 2021: High Court [para 21, 25 to 28]
- Interim order passed: BOMBAY HIGH COURT
2020-TIOL-2224-HC-KERALA-GST
Metrolite Roofing Pvt Ltd Vs DCCT & CE
GST - It is the case of the petitioners that in connection with the procedure stipulated for hearing appeals through video conferencing during the Covid-19 pandemic period, the respondent Appellate Authority was obliged to maintain a record of personal hearing and issue a copy of the same to the petitioners so as to comply with the requirements of natural justice - In the instant cases, it is the contention of the petitioners that no such records of personal hearing was maintained, and at any rate no copies of the said record of personal hearing were sent to the petitioners.
Held: Inasmuch as the procedure for maintaining a record of personal hearing was a formal one that was devised to take care of the compliance with the rules of natural justice during the period when the personal hearing had to be undertaken through video conferencing, taking note of the Covid pandemic situation, the respondent Appellate Authority ought to have complied with the said procedure strictly - Inasmuch as in these cases, the said procedure was not complied, Bench deems it appropriate to quash the impugned orders and directs the appellate authority to pass fresh orders after complying with the said procedure and after hearing the petitioners - The Appellate Authority shall pass fresh orders as directed within two months: High Court [para 3]
- Petition disposed of: KERALA HIGH COURT
2020-TIOL-86-NAA-GST
Director General Of Anti-Profiteering Vs Caroa Properties Llp
GST - Anti Profiteering - The NAA had passed an order in respect of the respondent, wherein the DGAP was directed as per Rule 133(5) of the CGST Rules, to conduct investigation to find out as to whether the respondent had availed ITC benefit, which was required to be passed on to eligible recipients as per Section 171(1) of the CGST Act - The respondent had been charged with profiteering from sale of residential units in two projects being developed by it.
Held - The DGAP found that the two projects in question had been launched in the post-GST regime and there was no price history of the units sold in the pre-GST reime that could be compared with the post-GST base price to establish whether there was any profiteering by the respondent - As registration under the RERA Act in respect of the two projects was obtained post introduction of GST regime, the provisions of Sec 171 pertaining to anti profiteering cannot be made applicable to the respondent, since there was no additional ITC that had been utilised by it, which was relevant for establishing any allegation of profiteering - The commencement certificate for both projects was issued after implementation of GST - Hence present case does not fall under ambit of Anti Profiteering provisions of Section 171 of the CGST Act: NAA
- Application disposed of: NAA
IO No. 35/2020
Supertech Limited-reg. Pvt. Ltd
GST - Anti Profiteering - The complainant is an individual who purchased a flat in a project being developed by the respondent - A complaint was later filed against the respondent, alleging that it had did not pass down benefit of Input Tax Credit by way of commensurate reduction in price after implementation of GST, in terms of Section 171 of the CGST Act - Subsequently, the DGAP examined the relevant evidence furnished by the respondent and computed the profiteered amount.
Held - The RERA Act 2016 mandates for real estate developers to maintain separate bank accounts for each project undertaken - As the respondent obtained 5 separate RERA registrations for 5 phases of the project, the respondent should have maintained separate escrow bank accounts - Where such requirement is not complied with, all phases of the relevant project should be considered to be a single project, for purpose of computing profiteering, given that the respondent maintained a common ITC register for all the phases of the project - In such background the need arises to revisit the investigation to ascertain if the respondent passed on ITC benefit to homebuyers of other 4 phases, considering its claims to have passed on benefit of ITC to homebuyers of one phase - Hence the DGAP is directed to further investigate the matter as per Rule 133(4) of the CGST Rules & re-compute the quantum of profiteering: NAA
- Application disposed of: NAA
IO No. 33/2020
DRA Aadithya Projects Pvt Ltd
GST - Anti Profiteering - The complainant is an individual who purchased a flat in a project being developed by the respondent - A complaint was later filed against the respondent, alleging that it had did not pass down benefit of Input Tax Credit by way of commensurate reduction in price after implementation of GST, in terms of Section 171 of the CGST Act - Subsequently, the DGAP examined the relevant evidence furnished by the respondent and computed the profiteered amount.
Held - The respondent claimed to have passed on Rs 5787995/- as ITC benefit during the relevant period - The respondent is also liable to pass on interest @ 18% on the profiteered amount, from the dates from which the additional amount was received till the date of passing on ITC benefit - This is because profiteered amount was utilised in respondent's business - The DGAP report does not mention whether or not the respondent reversed interest along with the principal amount - Hence, that too must be computed by the DGAP - The respondent claimed to have factored in the benefit of ITC in price of flats sold after implementation of GST - This too is to be verified - The DGAP is directed to investigate the matter u/r 133(4) of CGST Rules: NAA
- Application disposed of: NAA
IO No. 32/2020
Urban Essence Pvt. Ltd
GST - Anti Profiteering - The complainant had filed a case against the respondent u/r 128 of the CGST Rules, alleging profiteering in respect of restaurant service supplied by the respondent, which is a franchisee of M/s Subway Systems India Ltd - It was alleged that despite reduction in GST rate from 18% to 5% w.e.f. 15.11.2017, the respondent had not passed on the commensurate benefit of tax reduction and had in fact, raised the base price of the products - The DGAP computed the profiteered amount and filed its report.
Held - As per CBIC Press Release No 62/2018 dated 18.10.2018, the last date to avail ITC in respect of invoices or debit notes relating to such invoices pertaining to the period from July 2017 to March 2018 was extended upto Dec 31 2018 - However, the respondent has not submitted details of the same to the DGAP during investigation - The respondent was unable to furnish these details in a timely manner due to the COVID 19 pandemic - Hence the matter needs to be re-investigated by the DGAP u/r 133(4) of the CGST Rules: NAA
- Application disposed of: NAA
IO No. 31/2020
Siddha Infradev Pvt. Ltd
GST - Anti Profiteering - The complainant is an individual who purchased a flat in a project being developed by the respondent - A complaint was later filed against the respondent, alleging that it had did not pass down benefit of Input Tax Credit by way of commensurate reduction in price after implementation of GST, in terms of Section 171 of the CGST Act - It was also alleged that the respondent charged 12% GST on the payments made by the complainant for the flat - Subsequently, the DGAP examined the relevant evidence furnished by the respondent and computed the profiteered amount.
Held - It is clear from the documents placed on record, that the respondent claimed to have sold 70 flats after introduction of GST, whereupon he had freshly negotiatd the prices of these flats after considering benefit of ITC - The DGAP's report mentions that such claim remains to be examined - Hence the DGAP is directed to re-investigate the matter u/r 133(4) of the CGST Rules: NAA
- Application disposed of: NAA
IO No. 30/2020
Shalwak Pvt. Ltd
GST - Anti Profiteering - The complainant is an individual who purchased a flat in a project being developed by the respondent - A complaint was later filed against the respondent, alleging that it had did not pass down benefit of Input Tax Credit by way of commensurate reduction in price after implementation of GST, in terms of Section 171 of the CGST Act - Subsequently, the DGAP examined the relevant evidence furnished by the respondent and computed the profiteered amount.
Held - This Authority directs the DGAP to re-investigate the matter u/r 133(4) of the CGST Rules 2017, in respect of several issues, namely - i) whether the landowners have received their share of flats from the developer; ii) whether the respondent has not collected GST from the landowners as claimed by the respondent; iii) whether the respondent is liable to pass on ITC benefit amounting to Rs 10976/- to the landowner - These issues need to be addressed by way of revisiting the investigation, in interest of justice - The DGAP is to compute the profiteering amount accordingly: NAA
Application disposed of: NAA
IO No. 29/2020
Logix City Developers Pvt. Ltd
GST - Anti Profiteering - The complainant is an individual who purchased a flat in a project being developed by the respondent - A complaint was later filed against the respondent, alleging that it had did not pass down benefit of Input Tax Credit by way of commensurate reduction in price after implementation of GST, in terms of Section 171 of the CGST Act - Subsequently, the DGAP examined the relevant evidence furnished by the respondent and computed the profiteered amount.
Held - It is clear that all computations of profiteered amount were done on the basis of information supplied by the respondent, who did not maintain separate accounts for all four projects undertaken by it - The respondent was required to maintain separate bank accounts from which the DGAP could otain details of payment schedule, turnover and taxes charged in respect of each project - The respondent must also submit returns to the DGAP mentioning the expenditure and progress made in the construction of every separately registered project - Hence the profiteering computed by the DGAP based on information supplied by the respondent, cannot be relied upon - The DGAP is directed to investigate the matter u/r 133(4) of the CGST Rules after collecting the necessary evidence - The DGAP shall also use coercive measures as per Rule 132 of the CGST Rules to compel the respondent to produce authentic details based on which the profiteered amount can be computed afresh: NAA
- Application disposed of: NAA
2020-TIOL-297-AAR-GST
Work Group Sushikshit Berojgar Nagrik Sewa Sahkari Sanstha Maryadit Amravati
GST - The applicant provides services to the Government pertaining to supply of manpower for cleaning public urinals, collecting parking fees from hawkers and general public and for electricity meter reading - The manpower is sourced from economically weaker sections of the society - The applicant approached the AAR seeking to know whether the services provided by the applicant were covered under clause 1 & 2 of the Twelfth Schedule to Article 243W; whether such services fall under the exemption Notfn No 12/2017 as such services qualifies as pure labor services & whether the services provided by the applicant fell within the category of works contract service.
Held - The services provided by the applicant do not fall under clauses 1 & 2 of the Twelfth Schedule of Article 243W - Except for the service of providing manpower to the Amravati Municipal Corporation for collecting vehicle parking fees, the other services provided by the applicant will not fall under Entry No 3 of Exemption Notfn No 12/2017 - Such services do not fall under the scope of Works Contract Service: AAR
- Application disposed of: AAR
Royal Carbon Black Pvt Ltd
GST - The applicant company is engaged in complete recycling of used tyres - In the process of being re-cycled, Pyrolysis oil emerges as by-product and the same is sold as liquid fuel - The applicant approached the AAR seeking to know the HSN classification of Tyre Pyrolysis oil and the applicable rate of tax thereon.
Held - The applicant's submission appear to have been sourced from the internet - The applicant made no submissions in respect of chemical composition of the product - No test report was put forth to show composition of such product - Hence the question raised by the applicant cannot be entertained due to non-submission of complete details: AAR
-Application disposed of: AAR
Prettl Automotive India Pvt Ltd
GST - Applicant is engaged in supply of electric transformers, static converters, electric wires/ cables for transmission of electricity, equipment for spark ignition, installation and commissioning services - Prettl Kabelkonfektion GmbH, (Prettl GmbH), Germany, Applicant's holding company, desires to join the ' develoPPP.de programme' (said program) run by the German Federal Ministry for Economic Cooperation and Development - Pretti GmbH desires to provide financial assistance of 540,000 Euro to the Applicant under the said program for carrying out the following activities viz. a) Construction of a separate 400 sqm training center within a 2,500 sqm production hall, divided into a theory room and a practical training workshop; ( b) Implementation of training measures for trainers, apprentices, unskilled workers and students or college graduates as well as integration of teaching content at four educational institutes; ( c) One-year training of 80 vocational students (20 mechanics and 60 electrical engineers from the Industrial Training Institute Pune and Don Bosco) (d) Two-year training of 350 unskilled workers to become mechanics, electricians, mechatronics technicians; (e) Qualification of 25 college graduates as application and design engineers; f) Qualification of four suppliers to obtain “PRETTL certification” - Following are the questions on which and Advance Ruling is sought - Whether the financial assistance to be received by the Applicant is a consideration for supply and the activity is covered under the meaning of supply of services in terms of Section 7 of the Central Goods and Services Tax Act, 2017 / Maharashtra Goods and Services Tax Act, 2017?; If the above activity is considered as supply of service, then whether the same is classifiable under SAC 9997 as other services nowhere else classified under Sr. no 35 of the Notification-11/2017- C.T. (Rate) dated 28th June 2017 / Sr. no 35 of the Notification- 11/2017-S.T. (Rate) dated 29th June 2017 / sr. no 35 of the Notification 8/2017- I.T. (Rate) dated 28th June 2017?; Where the said activity if considered as supply of service, then whether the same is covered as “Zero Rated Supply and qualifies as “export of service under the provisions of Integrated Goods and Services Tax Act, 2017 and can be exported without payment of IGST?
Held: In the entire agreement it is seen that, the said agreement is for provision of services - Prettl Gmbh is treated as a Service Recipient and the applicant is treated as a service provider - From the agreement it is found that the applicant has agreed to provide certain services for which they will be paid some amounts - The applicant is terming these amounts as financial assistance whereas it is very clear from the agreement that the said amounts must be treated as consideration since they are being given to the applicant in lieu of certain supply of services to be effected by the applicant on the directions of Prettl Gmbh, i.e. the holding company - Furthermore, in the impugned draft agreement, the applicant is considered as a 'service provider' - as per the agreement, applicant has consented/agreed to do some acts and as per clause 5 of Schedule II appended to GST Act, 'an agreement to do an act' will be considered as supply of services - Hence in the subject case, AAR holds that the applicant is rendering supply of services for which it is receiving consideration in the form of “financial assistance” and, therefore, their supply is to be classified under SAC Heading 999792 [Notification 11/2017-CTR] which pertains to “Agreeing to do an act” - AAR does not agree with the jurisdictional office that there is no supply in the subject case - I mpugned Service Contract requires the applicant to construct a training center; implement training measures for trainers, apprentices, unskilled workers, students or college graduates as well as integration of teaching content at four educational institutes; train vocational students from the Industrial Training Institute Pune and Don Bosco; train unskilled workers to become mechanics, electricians, technicians; etc. - As per Section 13 (5) of the IGST Act, the place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held - E ntire gamut of supply as per the agreement between the applicant and Prettl GMBH, will be performed in India and, therefore, AAR has no hesitation in holding that the place of supply, being event based in the subject case, is in India - The subject transaction does not satisfy the condition mentioned in clauses (iii) of Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) and, therefore, the said transaction cannot be considered as Export of Services under the GST Laws: AAR
- Application disposed of: AAR
Janki Sushikshit Berojgar Nagrik Seva Sahakari Sanstha Ma Amravati
GST - The applicant is providing labour to he municipal corporation, which include cleaning staff, data entry operators, helpers, teachers (Psychologist and Speech therapist) for Zilla Parishad schools and colleges - The applicant approached the AAR seeking to know the classification of goods or services and also whether the services provided fall under exemption Notfn No 12/2017.
Held - The services provided by the applicant are not covered under Clause 1 & 2 of the Twelfth Schedule to Article 243W - The meals provided to Government Ashrams for economically weaker class of students, do not fall within Clause 1 & 2 of Article 243 - The services provided by the applicant do not fall under the Exemption Notfn No 12/2017, since the services are in the nature of pure labor services: AAR
- Application disposed of: AAR
GST - Applicant is supplying digital goods viz. online gaming - Applicant's website address is MMOPLAYSTORE.COM - Applicant contacts the suppliers of digital products requesting a list of digital products that are available with them - Digital Goods are then sent to the applicant by Email or Instant message service and payout is issued - These received digital goods are assessed and stored on Cloud Servers for dispatching to customers of the applicant - Customers visit the Website of the applicant online and make payments to the applicant, after which Digital Goods are then delivered by cloud server to customer by Email - Applicant has submitted that their Suppliers are located abroad and include New Gameway from China, PayproGlobal and MmoBay LLC from the USA - Suppliers are contacted by Email or Instant Message service - The Payments are received from customers using PayPal - P urchase of these digital goods are made online by the applicant's customers and once payment is received, the merchant provides the customer with a digital item as an e-mail attachment or may provide a secure link where the item can be downloaded - No invoice is raised for delivering digital said goods, which have limited life of say, a few days or weeks - Payments are done by applicant's customers on line - Applicant contends that t heir services are covered under HSN Chapter Nos. SAC 99841 to 99846 and not liable to GST or IGST, being stored on/ received on CLOUD servers which are usually located abroad and delivery/supply of the e-goods to customers is done from the CLOUD server itself - That, therefore, being fully outside India and not liable to GST, being export of services.
Held: A pplicant is supplying OIDAR services in the subject case and as per the provisions of Section 13 (12) of the IGST Act, in such cases, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services, in this case the customer who is located abroad - In the subject case, the applicant has not provided details mentioned in the seven non-contradictory conditions [ Explanation to Section 13 (12) of the IGST Act ] and therefore AAR is not able to come to any conclusion with respect to place of supply i.e whether the recipient in the subject case is in non-taxable territory or is deemed to be located in taxable territory - A pplicant vide question nos. 8 has asked for a clarification as to whether their services are export of services, in case buyer is from India, the goods/ services are stored in CLOUD which are the servers outside India therefore even though payment is received in rupees, services are received from distantly installed servers - In respect of this question, it is seen that the service is supplied by the applicant from taxable territory to recipients who are also located in taxable territory - The taxable event under GST Laws is ‘supply” of goods or services or both and the supplier of such goods or services or both, is liable to pay GST - In this situation since both, the supplier and recipient of services are located in taxable territory, the subject services will not be considered as exported and the applicant will have to discharge his GST liability on the amounts received for supplying such services - A pplicant is required to obtain registration and pay GST under reverse charge mechanism - IGST is applicable under section 5(3) & 5(4) of the IGST Act at the rate of @18%: AAR
- Application disposed of: AAR
GST - Applicant seeks a ruling as to w hether the services provided by the University to its constituent colleges viz. self-financing and management colleges relating to admission to, or conduct of examination by such institution by way of affiliation fee, registration fee such as Application form fees, Application fees (Application, Registration fee) (each course/section), Inspection fees (each course/section), Affiliation fee for each course, Affiliation fee for each additional section, Initial affiliation fee to start an institution, Permanent Affiliation fee to the College 8. Continuation of affiliation fee for each course, increase in intake for each course for permanent basis, processing fee and Penal fee for receipt of late application are exempted vide sl.no 66 of Notification no.12/2017-CT(Rate) dated 28.06.2017.
Held: A pplicant is a University established vide Tamilnadu Universities Act 1 of 1982 and listed as a State University in the UGC (Affiliation of Colleges by the Universities) regulations 2009 published in the Gazette on 20th February 2010. Regulation 2 defines 'affiliation' as "affiliation" together with its grammatical variations, includes, in relation to a college, recognition of such college by, association of such college with, and admission of such college to the privileges of a university - Thus, affiliation in relation to a college as defined under 2.2 of the regulation, is recognition of such college to be eligible for association with and admission of such college to the privileges extended by a University - Thus, from the above regulations, it is seen that any institution within the jurisdiction of a University who wish to conduct a course/programme of study extended by the University has to apply in the prescribed Application with all the required details/documents for affiliation with the University, pay the required fees and the University after following the stipulated regulations including inspection may or may not extend the affiliation - In the case at hand, the ruling is sought in respect of such application/registration fees, inspection fees, affiliation fees, etc and the applicant claims that 'affiliation' is the principal supply and the sale of application, registration of course, Inspection for approval of such course, grant of affiliation etc. are the activities which are naturally bundled with the principal activity of affiliation of the college -Applying the above to the case at hand, it is seen that the sale of application, registration, inspection are all supplies which are naturally bundled and supplied in conjunction in the course of the activity of extending affiliation - Thus, all the fees in question collected by them and the supplies thereto results in the activity of affiliation of the institution, upgradation, increase in the capacity/course, etc and are governed by the UGC regulation - Therefore, Authority agrees with the claim of the applicant that the entire gamut of activities for which the fees in questions are collected is a 'composite supply' with extending 'affiliation' to an institution of higher education being the 'Principal Supply' - The entry at 66(b)(iv) seeks to exempt only those services provided to such institution in relation to admission of students or conduct of examination for such admission to all the educational Institutions, including the higher educational institutions, which were not exempted up to this amendment by 02/2018-CTR - In the case at hand, it is evident that the affiliation services provided by the applicant enables the said institution to conduct the course/programme and does not relate to admission of students to such course/programme in the said institutions or conduct of examination for such admission in the said institution - Also, the exempted services on the conduct of examination is that related to the admission to such institution and not related to the examination based on which degree/title, etc are conferred to the students, as is being claimed by the applicant, though we do not part any opinion on the claim of the applicant that they extend such services to the institutions by extending the affiliation - Therefore, Authority holds that the composite supply of sale of application, registration, inspection, etc with 'affiliation' of the said institution/course as the 'Principal supply' are not exempted under the entry SI.No.66 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended by 02/2018-C.T. (Rate) dated 25.01.2018: AAR
- Application disposed of: AAR | 
