2021-TIOL-92-HC-KAR-GST
Meghdoot Logistics Vs CTO
GST - Petitioner has challenged the notice dated 02.09.2020 issued by the 1st respondent for confiscation of goods and conveyance under Section 130 of the Act, 2017 and further direction was sought to the 1st respondent to keep the goods contained in conveyance under cold storage - Respondents submit that the present petition may also be disposed of in terms of the observations made in W.P.No.10832/2020 considering the similarity of the contentions raised as were raised in W.P.No.10832/2020 – Petitioner, however, submits that as regards some of the materials relied by the respondent - authority for issuance of show cause notice, the petitioner is required to be afforded an opportunity to subject such material for strict scrutiny which would be part of right of defending the proceedings initiated by the respondent – authority.
Held: Present writ petitions could be disposed of in terms of the observations and directions made in W.P.No.10832/2020 - The respondents to proceed further and consider the reply made by the petitioner insofar as notice under Section 129 and also with respect to the reply to be submitted to the show cause notice under Section 130 - The respondents to also consider the further proceedings under Section 130 after reply is furnished by the petitioner in that regard - Petitioner is permitted to seek for incriminatory material by addressing the representation within three days and said request to be considered as per law by the respondent – authority - Thereafter, within three days from such date of the respondent sharing information as requested and permissible to be shared, reply to the show cause to be furnished by the petitioner and the respondent - authority to take decision thereafter in terms of the observations made above within a period of one week thereafter – Petition disposed of: High Court [para 7 to 9]
- Petition disposed of : KARNATAKA HIGH COURT
2021-TIOL-17-AAR-GST
Tea Post Pvt Ltd
GST - Tea House Chain - TEA POST - As per the statement of facts, the applicant has made a 'Franchise Agreement' and not the 'License Agreement', therefore, the services in question cannot be said to be "Licensing services" - 'Franchisee Fees' and 'Royalty' received by the applicant for the right to use its trademark, brand name are to be classified under SAC 9983 96 and attracts GST @ 18%: AAR
GST - In the applicant's case, only one outlet of his business chain is being transferred/ sold to the recipient - Thus, it is not a case of transfer of an ongoing concern in whole - Further, the transaction is also not covered under the clause 'transfer of a going concern as an independent part thereof' - Independent part of a firm would be a distinct business vertical and not the same vertical of which a certain portion has been transferred to other entity - The applicant is engaged in the business of running outlets in the name of 'TEA POST' and the business activity is one and only one but is merely having more than one branches for the same business - A branch of the same business vertical can be by no stretch of imagination considered as an independent part of the concern - Thus, Authority finds that the transfer of business assets is covered under the category of 'supply of goods' and in no way is covered by the clause 'transfer of a going concern, as a whole or an independent part thereof' - Thus, the transaction becomes a taxable event in terms of the provisions of Sec. 7 read with Sec. 9 of the Act, 2017 - Transfer of an operational outlet would not amount to "Services by way of transfer of a going concern, as a whole or an independent part thereof", not exempted under Sl. No.2 of 12/2017 -CTR; ITC available subject to fulfilment of conditions laid down: AAR
- Application disposed of: AAR
2021-TIOL-16-AAR-GST
Skg J Nmc Associates (JV) (Dated: July 03, 2020)
GST - Main issue is whether this is a contract pertaining to Railways - Authority finds that in the instant case, the work relating to construction has been awarded by an entity, viz. M/s RITES Ltd. - However, the applicant has submitted no evidence in support of the claim that work awarded to them pertains to Railways - Applicant has produced no evidence that the work was allotted to M/s RITES Ltd was pertaining to railways as defined at Section 2(31) of the Railway Act, 1989 - There is also no evidence on record whether the work has been awarded in respect of "Government railway" or "Non-Governmental railway" - Although, the applicant has sought to infer that the said work was in respect of railways owned by Ministry of Railways, but he has not provided any supporting evidence in the form of agreement between M/s RITES Ltd and Ministry of Railways to establish the same - Therefore, in absence of any such conclusive proof that the work pertains to railways, Authority holds that third condition is not satisfied - Works Contract by way of construction, erection, commissioning or installation of original works is not covered under clause 3(v)(a) of the Notification No. 11/2017-Central Tax (Rates) as amended by 20/2017-Central Tax (Rate) so as to entitle the applicant for charging rate of GST@ 12% instead of 18%: AAR
- Application disposed of: AAR
2021-TIOL-15-AAR-GST
Swan Lng Pvt Ltd (Dated: July 30, 2020)
GST - LNG jetties proposed to be built by the applicant are not covered within the expression 'plant and machinery' as foundation to equipment, apparatus, machinery to be installed on it in terms of Section 17 - applicant cannot avail 'input tax credit' of GST paid on inputs, input services as well as capital goods procured for the purpose of building the LNG jetties in terms of Section 16 read with Section 17 of the Act, 2017: AAR
- Application disposed of: AAR
2021-TIOL-14-AAR-GST
Shree Sagar Stevedores Pvt Ltd
GST - Service of transportation of goods carried out by applicant from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port (from where the Mother Vessel are anchored) or vice versa, does not fall within the State of Gujarat; does not fall within the area as defined in 'Inland waterways'; therefore, does not qualify for exemption as contained at Sr.No.18 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017: AAR
- Application disposed of: AAR
2021-TIOL-13-AAR-GST
Jayshreeben Rameshchandra Kothari
GST - Applicant is engaged in supply of goods such as Temporary live videography with LED & LCD Screen, Live Telecast equipment, Cameras, etc. on hire basis to Central Govt., State Govt., Union Territory, Local Authority, Village Panchayat, who undertake activities in relation to any function entrusted under Article-243G of the Constitution - Applicant seeks a ruling on the following questions viz. Whether or not, the aforesaid services fall under the scope of clause 5 (f) of the Schedule II to the Act, 2017 ?;
Whether or not, the Service related to collection of Hire Charges for temporary transfer of right to use goods from "Central Govt., State Govt. or Union Territory or Local Authority or a Government Authority by way of any activity in relation to any Function entrusted to a Panchayat under Article 243-G of the Constitution or in relation to any function entrusted to a Municipality under Article 243-W of the Constitution" are covered and exempted under the scope of Sr. No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017?
Held: Applicant during the course of supply might also transfer some goods/ undertake the construction activity, for which he recovers consideration for the same as hiring charges from them - Thus, said services are to be construed as supply of services/ goods/ works contract depending upon the nature of contract entered by them or Work Order received by them - In view of the above, the services provided by the applicant would not fall under the scope of clause 5(f) of the Schedule II to the Central Goods and Service Tax Act, 2017 - No sufficient evidence is produced to establish conclusively that all such conditions of the notification 12/2017-CTR have been satisfied in respect of services provided by the applicant, hence both the questions are answered in the negative: AAR
- Application disposed of: AAR
2021-TIOL-12-AAR-GST
Nirma University
GST - Applicant seeks to know whether they would be eligible for claiming benefit of the exemption as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) in respect of procurement of legal services?; Whether services provided by the applicant ( Nirma University) are exempted under S. No. 4 of Notification No.12/2017-Central Tax (Rate)?; Whether applicant is re quired to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act?
Held: As clarified in Circular No. 76/50/2018-GST dated 31st December, 2018, the applicant does not fall under the "governmental authority", as defined under Section 2(16) of the IGST - Applicant would, therefore, not be eligible for claiming benefit of the exemption as provided in Sr. No.45 of the Notification No. 12/2017-Central Tax (Rate) in respect of procurement of legal services (as a recipient) - Insofar as the second question is concerned, Higher education is nowhere specified as an activity in relation to any function entrusted to a municipality under Article 243W of the Constitution, therefore, it is held that the higher education services provided by the applicant would not qualify for exemption provided under S. No. 4 of the exemption Notification No. 12/2017-Central Tax (Rate) - Only the services of higher education delivered as a part of curriculum by conducting degree courses by the applicant university, which leads grant of qualifications recognised by law, are entitled to avail exemption provided under Sl. No. 66 of the exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended - CBEC vide aforesaid Circular dated 31st December, 2018 has clarified that the provisions of Section 51 of the CGST Act are applicable to only such authority or board or any other body whether set up by an Act of Parliament or a State Legislature or established by any Government in which fifty one percent or more participation by way of equity or control, is with the Government - It is fact on record that the Nirma University is set up by the Nirma University Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control - Hence, the applicant does not fall under this category of specified person for the purpose of Section 51 of the CGST Act, 2017 - Held that the applicant is not liable to register themselves as a Deductor under GST: AAR
- Application disposed of: AAR
2021-TIOL-11-AAR-GST
Shiroki Technico India Pvt Ltd
GST - 'Seat adjuster' merely helps in the adjustment of the seat i.e. moving it back and forth as per requirement/convenience and merely improves the efficiency and convenience of the seat but does not form a part of the seat - it can be derived that it can be termed only as an 'accessory' and not a part of the 'seat' - Even in common parlance, the 'seat adjustor' is not considered as a part but only as an 'accessory' of the seat of a motor vehicle - Since Sub-heading No.9401 9000 only covers parts of a seat, the 'seat adjuster', which is not a 'part' but only an 'accessory' of the seat, would not be covered under the said sub-heading - However, Chapter heading 8708 covers both the 'parts' as well as 'accessories' - Therefore, 'Seat adjuster' manufactured and supplied by applicant merits classification under Tariff item No.8708 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and is covered under Serial No.170 of Schedule-IV of Notification No. 1/2017-Central Tax (Rate) - GST @28%: AAR
- Application disposed of: AAR
2021-TIOL-10-AAR-GST
The Roll Company
GST - Product, 'Finished Zipper' shall be classified as "Slide Fasteners" under Chapter heading 9607.11 and Other products, viz. 'Zip Roll' and "Slider" merit classification as 'Parts of slide fasteners' under chapter heading No. 9607.20 - Accordingly, the product, 'Finished Zipper' is liable to GST @ 18% till 26.07.2018, @ 12% from 27.07.2018 to 30.09.2018 and @ 12% from 01.10.2019 onwards - Whereas, the other products, viz. 'Zip Roll' and "Slider" are liable to GST @ 18% till 30.09.2018 and @ 12% from 01.10.2019 onwards: AAR
- Application disposed of: AAR
2020-TIOL-98-NAA-GST
Director General of Anti-Profiteering Vs Caroa Properties LLP
GST - Anti-Profiteering - Allegation is that the respondent has not passed on the benefit of additional Input Tax Credit (ITC) to the applicant as well other home buyers as per the provisions of s.171(1) of the Act - DGAP submitted a report stating that the respondent had denied the benefit of ITC to the buyers amounting to Rs.9,03,44,071/- pertaining to the period 01.07.2017 to 31.12.2018 and had thus profiteered in contravention of the provisions of s.171 of the Act, 2017 - NAA agreed with the report and passed an Order no. 78/2019 dt. 24.12.2019 [ 2019-TIOL-78-NAA-GST ] accordingly - A ccordingly, respondent was issued a SCN dt. 10.02.2020 seeking imposition of penalty for contravention of the provisions of s.171 of the Act, in terms of s. 171(3A) r/w rule 133 of the Rules - Respondent offered their submissions dated 26.06.2020 inter alia submitting that the penalty provisions u/s 171(3A) are effective prospectively only from 01.01.2020 whereas the period involved is 01.07.2017 to 31.12.2018.
Held: Since no penalty provisions were in existence when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 10.02.2020 issued to the respondent for imposition of penalty u/s 171(3A) is hereby withdrawn and the present penalty proceedings are dropped: NAA
- Proceedings dropped: NAPA
2020-TIOL-97-NAA-GST
Director General of Anti-Profiteering Vs Theco India Pvt Ltd
GST - Anti-Profiteering - Allegation is that the respondent has not passed on the benefit of reduction in the rate of tax of IGST to his recipients on the purchase of two items “Lava CNC 240 Milling Machine along with accessories” and “Sintering Furnace D664” from the respondent based on the quotation dt. 28.11.2016 having taxable value of Rs.60,24,120/- - DGAP submitted that the respondent had denied the benefit of tax rate reduction to his recipients amounting to Rs.4,78,085/- and had thus indulged in profiteering and violation of the provisions of s.171(1) of the Act, 2017 - NAA agreed with the report and passed an Order no. 15/2018 dt. 28.11.2018 [ 2018-TIOL-14-NAA-GST ] accordingly - A ccordingly, respondent was issued a SCN dt. 06.12.2018 seeking imposition of penalty for contravention of the provisions of s.171 of the Act, in terms of s.122 r/w rule 133 of the Act/Rules - Respondent vide their submissions dated 03.01.2019 inter alia submitted that no penalty should not be imposed as they had accepted and paid the amount profiteered along with interest; that there is no mens rea on their part.
Held: From a perusal of section 122(1)(i), it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty u/s 122 of the Act cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act - Since no penalty provisions were in existence when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 06.12.2018 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA
- Proceedings dropped: NAPA
2020-TIOL-96-NAA-GST
Director General of Anti-Profiteering Vs Lodha Developers Ltd
GST - Anti-Profiteering - Allegation is that the respondent has not passed on the benefit of Input Tax Credit (ITC) in respect of flat no. 704 in Lodha Eternis project of the respondent on introduction of GST w.e.f 01.07.2017 as per the provisions of s.171 of the Act, 2017 - DGAP report stating that the allegations are true and the respondent had profiteered by an amount of Rs.1,90,04,456/- during the period 01.07.2017 to 31.08.2018 was accepted by the NAA and an order Order no. 48/2019 dt. 04.10.2019 [ 2019-TIOL-48-NAA-GST ] was passed accordingly - A ccordingly, respondent was issued a SCN dt. 18.12.2019 seeking imposition of penalty for contravention of the provisions of s.171 of the Act - Respondent vide their submissions dated 10.02.2020 inter alia averred that the penal provisions u/s 171(3A) of the Act r/w rule 133(3)(d) of the Rules should not be invoked and penalty should not be imposed on him as the Central government vide notification 01/2020-CT has appointed the 1st day of January 2020 as the date on which the provisions of s.171(3A) of the Act inserted vide s.112 of the Finance (No.2) Act, 2019 shall come into force; that the provisions for imposing penalty are effective prospectively and cannot have any retrospective operation; that there is no mens rea and deliberate attempt to violate the provisions of the law.
Held: Since no penalty provisions were in existence between the period 01.07.2017 to 31.08.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 18.12.2019 issued to the respondent for imposition of penalty u/s 171(3A) is hereby withdrawn and the present penalty proceedings are dropped: NAA - Proceedings dropped: NAPA
2020-TIOL-95-NAA-GST
Director General of Anti-Profiteering Vs Inox Leisure Pvt Ltd
GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Restaurant service - allegation is that the respondent has profiteered in respect of restaurant service despite a reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017 - Inasmuch as it is alleged that the respondent had increased the base prices of his items and did not pass on the benefit of reduction in the GST rate from 18% to 5% by way of commensurate reduction in prices.
Held: Right to Trade - DGAP has not acted in any way as a price controlling authority as it does not have the mandate to do so - DGAP has only been mandated to investigate whether both the benefits of tax reduction made from the kitty of the Central and State governments have been passed on to the end consumers who bear the burden of the tax or not - Intent of the anti-profiteering provisions is the welfare of the consumers who are voiceless, unorganised and vulnerable - DGAP has nowhere interfered with the pricing decisions of the respondent and, therefore, there is no violation of the Article 19(1)(g) of the Constitution - DGAP has nowhere questioned the lawful profits made by the respondent - Respondent has also failed to cite any ground due to which the profiteered amount should be computed till March 2018 only, therefore, the period of investigation from 15.11.2017 to 30.04.2019 has been rightly taken by DGAP - DGAP report is accepted by the Authority - Profiteered amount is determined as Rs.3,10,56,939/- as has been revised vide the DGAP's supplementary report dated 08.10.2020 - Respondent is directed to reduce his prices commensurately in terms of rule 133(3)(a) of the Rules, 2017 - since the recipients of the benefit are not identifiable, the respondent is directed to deposit the profiteered amount in two equal parts in the Central Consumer Welfare Fund and the State Consumer Welfare Fund along with interest payable @18% - above amount is to be paid within three months and a compliance report is to be submitted by the Commissioners concerned - although an offence has been committed u/s 171(1) of the Act, since the penal provision u/s 171(3A) has been inserted only w.e.f 01.01.2020 and was not in operation during the period from 15.11.2017 to 30.04.2019 when the respondent had committed the violation, penalty cannot be imposed u/s 171(3A) of the Act: NAA
- Application disposed of: NAPA
