GST - Value of seized goods diminishing due to passage of time - Ordered to be released on compliance with conditions: HC

CX - Only on the ground that some job workers could not be found or that some of them refused to have done job work, it cannot be concluded that no activity of job work manufacturing of fabrics was undertaken: HC

GST - AAR erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran - supply value cannot be dependent on actual receipts: AAAR

GST - State Urban Development Authority (SUDA) cannot be held as a local authority - supply by applicant to SUDA does not qualify for exemption; chargeable @18%: AAR

2022-TIOL-1391-HC-AHM-GST

Channel Traders Vs State of Gujarat

GST - Petitioner prays for release of the goods on the ground that since long the goods are under confiscation and since the value of the goods are diminishing in nature, it would be prejudicial to the petitioner if the goods are not released.

Held:  By way of interim relief, it is directed that the respondents shall release the goods and conveyance of the petitioner, confiscated and detained pursuant to the order dated 21.03.2022 passed in FORM GST MOV-11, subject to conditions as laid down viz. deposit of tax and penalty and bond towards the amount of fine and other charges: High Court [para 6]

- Interim relief granted: GUJARAT HIGH COURT

2022-TIOL-124-AAR-GST

Simoco Telecommunications South Asia Ltd

GST - A pplicant submits that the State Urban Development Authority (SUDA) has accepted his offer for design, build, finance, operate and transfer of Municipal Wet Waste processing facility - Applicant wishes to know as to whether they are entitled for exemption.

Held:  SUDA, being a registered society, is not a Panchayat or a Municipality or any Board or Cantonment as specified in the definition of local authority - Further, no documents have been produced before the Authority wherefrom it can be established that SUDA is an authority who is legally entitled to and entrusted by the Government with the control or management of a local fund -  SUDA cannot be held as a local authority as defined in clause (69) of section 2 of the GST Act and the supply involved in the instant case thus fails to qualify for exemption vide serial number 3 or 3A of the Exemption Notification;  is taxable @ 18% vide serial number 32 of Notification No. 11/2017-CTR: AAR

- Application disposed of: AAR

2022-TIOL-35-AAAR-GST

Shiv Flour Mill

GST - Applicant had sought a ruling as to ‘Whether the composite supply of services (by way of milling of food grains into flour) to Food & Supplies Department, Government of West Bengal for distribution under PDS is eligible for exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) - AAR had while  observing that the instant supply is a composite supply viewed  that the valuation of non-cash consideration remained inconclusive as the appellant could not produce any documents regarding receipts of consideration from sale of gunny bags, bran and refractor and, therefore,  exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) will be available when the value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply; that, in case the value of goods supplied exceeds 25% of value of entire supply, the supply shall attract tax @ 5%  - Aggrieved with the said ruling, the present appeal has been filed.

Held:   WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran - It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran -  The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food & Supplies Department - This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 4 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future - The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - It is clear from the Memo dated 08.12.2020 read with Memo dated 18.02.2022 that the total supply price is Rs.260.48 for milling services to produce 95 kg fortified atta from 100 kg wheat - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials and so the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value - Held, therefore,  that in the instant case the supply of fortified wholemeal flour to the Food & Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) and exempt from taxation: AAAR

- Appeal allowed: AAAR

2022-TIOL-34-AAAR-GST

Maa Laxmi Enterprise

GST - Applicant had sought a ruling as to ‘Whether the composite supply of services (by way of milling of food grains into flour) to Food & Supplies Department, Government of West Bengal for distribution under PDS is eligible for exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) - AAR had while  observing that the instant supply is a composite supply viewed  that the valuation of non-cash consideration remained inconclusive as the appellant could not produce any documents regarding receipts of consideration from sale of gunny bags, bran and refractor and, therefore,  exemption under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) will be available when the value of supply of goods in the said composite supply shall not exceed 25% of the value of the said composite supply; that, in case the value of goods supplied exceeds 25% of value of entire supply, the supply shall attract tax @ 5%  - Aggrieved with the said ruling, the present appeal has been filed.

Held:   WBAAR did not consider the valuation of Rs.124/- per 100 kg wheat being supply consideration of gunny bags, refractor and bran - It erred in its opinion that the non-cash consideration will be the actual sum received from open market on supply of gunny bags, refractor and bran -  The WBAAR failed to appreciate that the valuation of the composite supply is the agreed upon price between the flour millers and the Food & Supplies Department - This agreed upon price includes the notional value of Rs.124/- of two gunny bags and 5 kg by-products (1 kg refractor and 4 kg bran) which are retained by the miller, irrespective of actual disposal price of those gunny bags and by-products in future - The supply value of milling of wheat in the instant case cannot be dependent on actual receipts by the miller in future from third parties in disposal of the retained goods - It is clear from the Memo dated 08.12.2020 read with Memo dated 18.02.2022 that the total supply price is Rs.260.48 for milling services to produce 95 kg fortified atta from 100 kg wheat - The value of goods in the composite supply is not more than Rs.60/- being cost of elements for fortification and packing materials and so the percentage of value of goods in the composite supply is established to be lesser than 25% of the total supply value - Held, therefore,  that in the instant case the supply of fortified wholemeal flour to the Food & Supplies Department, Government of West Bengal will fall under entry no. 3A of Notification No. 12/2017-Central Tax (Rate) and exempt from taxation: AAAR

- Appeal allowed: AAAR

2022-TIOL-1392-HC-MUM-CX

Pr.CCGST & CE Vs Filatex India Ltd

CX - Clandestine removal - Assessee, a company is engaged in manufacture of polyester yarn of different descriptions falling under Chapter 54 of Central Excise Tariff Act, 1985 - Tribunal found that assessee before sending the goods for job work filed intimation with Department as required under CER, 2002 - Department was in knowledge of job work activities, that while sending goods, challans were prepared and yarn was acknowledged by job workers of having been received - Assessee has paid job work charges to said job workers and also deducted TDS on such payments as found by Tribunal from Form-16A issued to all six job workers - It is recorded that none of the statements from job workers recorded during investigation deny the fact that they had undertaken job work activity on behalf of assessee - Only on the ground that some job workers could not be found or that some of them refused to have done job work, it cannot be concluded that no activity of job work manufacturing of fabrics was undertaken - The statement of few transporters that they did not transport the fabric cannot be a ground to hold that no fabric was manufactured as main job workers have accepted the manufacture of fabric on job work - Even if some of buyers of fabrics could not be found, it cannot lead to conclusion that assessee did not sell the fabrics to such parties - Majority of job workers, i.e. 5 job workers out of 6 investigated, have accepted the job work manufacturing of fabrics from Yarn supplied by assessee and that no evidence has been adduced to the effect that they had clandestinely removed the yarn from their factory for sale by evading central excise duty - These are all findings of fact by final fact finding Authority viz. the CESTAT which cannot be faulted with - There is also no perversity demonstrated - No merit found in this appeal: HC

- Appeal dismissed: BOMBAY HIGH COURT