I-T- Tax credit to the assessee cannot be denied merely on the grounds that the deductor has not filed its revised TDS return which is beyond the control of the assessee: ITAT

GST - No parity - Consumer using Uber App to book an auto rickshaw ride and consumer who uses a street hailed auto rickshaw fall under a different category - Notifications 16 & 17/2021-CTR not ultra vires: HC

GST - Works Contract Service - Benefit of reduced rate of GST is available only to sub-contractor of the main contractor and not to the second level sub-contractor i.e. sub-contractor to sub-contractor: AAAR

ST - So long as it is not established that services are not utilized, CENVAT Credit cannot be denied: CESTAT

Cus - Revenue's appeal is rightly dismissed where review order u/s 129D(2) of Customs Act 1962 is passed beyond the 3-month period envisaged in Section 129D(3) of the Act: CESTAT

2023-TIOL-426-HC-DEL-GST

Uber India Systems Pvt Ltd Vs UoI

GST - Writ petitions have been filed by Uber India Systems Private Limited, Pragatisheel Auto Rickshaw Driver Union and IBIBO Group Private Limited along with Make My Trip (India) Private Limited challenging the Clauses (iii) and (iv) of Notification No. 16/2021- Central Tax (Rate) and Clauses 1(i) and 2(i) of Notification  No. 17/2021 - Central Tax (Rate) , both dated 18.11.2021 as ultra vires - The core issue is that by way of the impugned Notifications, passenger transportation services by way of auto-rickshaws mediated by Electronic Commerce Operators (ECOs) like Petitioner 1 have now been made taxable which was earlier exempted whereas autorickshaw services not mediated by platforms like Petitioner continue to be exempted.

Held:

+ The crux of the dispute is whether the impugned Notifications arbitrarily create a classification between the ECOs and the individual service providers solely based on the 'mode of booking' availed by the consumer for availing the said service; and consequently, discriminates against the ECOs by denying the ECOs the benefit of exemption available to the individual service providers under the parent Notification.

+ Petitioner 1, 2 and 3 contend that the fare charged by the Petitioner 1 and 3 from the consumer booking the ride through the ECO should continue to remain exempt from GST as is the case when the booking is made by the consumer directly with the individual auto-driver through street hailing and the individual bus operator through his booking office - In effect, the ECOs in the present matter are seeking parity of rates of fare with the individual auto-rickshaw driver and the individual bus operator - In the opinion of this Court, the ECO by seeking parity with the individual service provider, is seeking equality amongst unequals.

+ Supreme Court in Aashirward Films has laid down that a taxing statute, for the reasons of functional expediency and even otherwise, can pick and choose to tax some; so long as the classification is reasonable.

+ The provisions of the Act of 2017 itself recognises the ECOs as a class separate from the individual service providers selling their services through the e-commerce platform.

+ It is an admitted fact that ECO charges commission to the auto-rickshaw drivers for providing the digital platform to get connected with the potential consumer, which is in addition to the conveyance charges the ECO collects from the consumers. The auto rickshaw driver who is street hailed does not have to pay this commission to the ECO. The exemption from GST available to a street hailed auto rickshaw driver, therefore, provides the individual auto rickshaw driver the capacity to economically compete with the services provided by the ECO and have an option to operate independently.

+ The non-registered auto-rickshaw driver who opts out from the registration with ECOs does not have the same benefits and is for this additional reason is a distinct class vis a vis the registered driver partner (i.e., member of Petitioner 2).

+ It is an admitted fact that, when a consumer books an auto rickshaw using the Uber App, (i) the auto rickshaw comes to pick up the consumer at his/her doorstep; (ii) it tracks the ride through its 'share your trip status' to assure the safety of the consumer; (iii) there are multiple payment options available to the consumer which includes digital payments in addition to cash, (iv) the supervisory role which the ECO plays to monitor the transaction etc. Therefore, whereas the quality of the physical ride in the auto rickshaw may remain the same even if it is street hailed, the experience of the doorstep convenience and the assurance Petitioner 1 is assuming the safety for the ride makes the experience different for the consumer.

+ Therefore, the consumer who uses Uber App to book an auto rickshaw ride and the consumer who uses a street hailed auto rickshaw fall under a different category. This Court is thus unable to accept the said contention of Petitioner 1, 2 and 3 seeking parity.

+ If the submissions of the ECOs are accepted, it would amount to lack of reasonable classification, resulting in gross inequality. The contention of the Petitioner 1, 2 and 3 is thus, clearly hit by the prohibition to deny equality as held by the Supreme Court in  Kunnathat Thatehunni Moopil Nair.

+ Court is of the opinion that the classification of the ECOs like Petitioner 1 and 3, as a class of service providers, which are separate and distinct from the individual supplier is, therefore, statutorily classified and recognised in the provisions of the Act of 2017 and more specifically in Sections 9(5) and 52 of the Act of 2017.

+ In view of the statutory recognition in the Act of 2017 that the ECOs are a distinct category, the submission of the Petitioner 1 and 3 that an ECO is necessary entitled to all the exemptions, which are available to an individual service provider, is incorrect. Hence, this Court is of the view that the impugned Notifications are not ultra vires to Sections 9(5) of the Act of 2017.

+ Petitioner 1, 2 and 3 have not disputed the aforesaid stated objective of the GST law that every transaction must be taxed. Therefore, the impugned Notifications, which seek to withdraw the exemption and tax the consumers who elect to avail a ride in the auto rickshaw or a non-air-conditioned stage carriage through ECOs, is in conformity with the stated objective of the Act of 2017.

+ Section 9(5) of the Act of 2017 creates a statutory fiction which permits the Respondents to consider the ECOs as the deemed suppliers of the services availed by the consumer through the online platform facilitated by the ECOs. And thereby, this results in liability of tax compliance for the services availed through the ECO. The intent of Section 9(5) is to plug leaks in collection of GST and, therefore, the Respondent is empowered under the said section to consolidate the liability to collect and pay tax for the services supplied through ECO. There is no vested right in the ECOs to claim the continuation of exemption.

+ Contention of Petitioner 1 and 3 that ECOs are merely a platform which facilitates a mode of booking, is incorrect as the ECOs assume responsibility for the discharge of services assured by the ECOs to the consumer, which are rendered by the ECO. The ECOs are providing bundle of services and partake a charge/commission from both the consumers and the individual supplier. Therefore, for all purposes, the ECOs are an independent supplier of service to the consumer. And, the service provided by the individual supplier is only one facet of the bundle of services assured by the ECOs to the consumer booking through it. Hence, the impugned Notifications do not result in discrimination on the basis of the mode of booking.

+ It is trite law that there can be no vested right in claiming exemption from payment of tax. If the Respondents are of the opinion that the exemption which was earlier extended by the unamended parent Notification to the ECOs in 2017 should be withdrawn, with the passage of time in 2022, such a decision would be within the scope of their jurisdiction under Section 11 of the Act of 2017.

Conclusion: [para 11, 12, 13, 16.11, 16.13, 16.15, 16.16, 16, 17, 17.5 , 17.6, 17.7, 18.5, 19, 21.2 , 24]

a) the Clauses (iii) and (iv) of Notification No. 16/2021-CTR and Clauses 1(i) and 2(i) of Notification No. 17/2021-CTR, both dated 18.11.2021 are not violative of Articles 14, 19(1)(g) and 21 of the Constitution.

b) the impugned Notifications do not create an unreasonable classification on the basis of the 'mode of booking' availed by the consumers.

c) the Respondents are empowered to issue the impugned Notifications under Section 9(5) and 11 of the Act of 2017 and Bench is, therefore, unable to accept the challenge to the constitutional validity of the said notifications.

- Petitions dismissed: DELHI HIGH COURT

2023-TIOL-55-AAR-GST

Bhori Lal Mohan Lal

GST - Applicant, engaged in construction services, undertook the work contract tendered by Rajasthan Housing Board on 25.01.2021 and the applicant undertook the work under the scheme of Chief Minister Jan Awas Yojana 2015 programme having nexus with the 'Housing for all' initiative under Pradhan Mantri Awas Yojna of the Government of India - Applicant seeks to know as to whether applicant's tender of work contract under Chief Minister Jan Awas Yojana is subjected to 9% CGST and SGST each post 01.01.2022?.

Held : Applicant will be liable to pay GST @18% in light of Notification No. 03/2022 - Central Tax (Rate): AAR

- Application disposed of: AAR

2023-TIOL-11-AAAR-GST

Shreeji Earth Movers

GST - Appellant is engaged in providing works contract service directly to sub-contractors who execute the contract with the main contractor for original contract work with the irrigation department (State of Gujarat) - AAR had held that GST rate on subject supply is 18% for services supplied by the sub-sub-contractor to sub-contractor M/s Radhe and supply merits entry at Heading 9954, Entry No. 3(ii) of Notification No. 11/2017 -CT(R) - Aggrieved, the present appeal is filed.

Held: It is not the case of the appellant that the appellants have received any work order from any of the Governmental authorities - They don't have any work order issued in their favour by any of the aforesaid Governmental authorities - In the present case, Appellate authority finds that the appellant is neither the main contractor nor the sub-contractor - There is no agreement between the appellant and the main contractor to be treated as a sub-contractor - Though the appellant is emphasizing on the fact that the composite works contract services provided by him pertains to the Governmental authority specified under Serial No. 3(iii) of the Notification No. 11/2017 -CT(R) as amended, it is seen that there is no direct nexus between the appellant and the Governmental authority (Irrigation Department) since the documents reveal that the appellant is supplying the service on the basis of the work order of a sub-contractor i.e. M/s Radhe Construction and not directly from the main contractor, M/s JSIW Infrastructure P Ltd. who had originally received the contract from the Irrigation department of the State Government of Gujarat - In the work order dated 05.09.2019 of M/s Radhe Construction, it is seen that at point No. 5, M/s Radhe Construction has mentioned that they would be paying applicable GST @18% in addition to the other prices mentioned in work Order - This would seem to suggest that the sub-contractor i.e. M/s Radhe Construction was aware that further sub-contracting this work would be appropriately leviable to GST @18% and not eligible for the concessional rate of GST@12% - In view of the above discussions, the contention of the appellant that they are covered under the provisions 3(iii) and 3(ix) of the amended Notification No. 11/2017 -CT(Rate) is highly misplaced - The wordings in the Press Release [Sr. No. 12 in press release of 25th meeting of GST council held at New Delhi on 18.01.2018] allows the benefit of the reduced rate of GST only to the sub-contractor of the main contractor only and not to the second level sub-contractor i.e. sub-contractor to sub-contractor, therefore, reliance placed by the appellant on this press release is also completely unfounded - Appellant is liable to discharge tax rate CGST @9% and GGST@9% under Entry No 3(ii) of Notification No. 11/20I7-CT(R) dated 28.06.2017 further amended vide Entry No.3(xii) of Notification ibid as amended - Appeal is rejected by upholding the order of the AAR: AAAR

- Appeal rejected: AAAR

2023-TIOL-282-CESTAT-MAD

CC Vs Nagappa Exports

Cus - The Revenue filed the present appeal to contest validity of the order of the CIT(A) in dismissing the Revenue's appeal on grounds of limitation - It was held that the review order as required under Sub Section (2) of Section 129D of Customs Act, 1962 has been passed beyond the period of three months as envisaged in Sub Section (3) of Section 129D of Customs Act, 1962 - It is argued by the Department that the Commissioner (Appeals) has computed the period of three months from the date of Order-in-Original whereas the period of three months ought to have been computed from the date of receiving the Order-in-Original by the Reviewing Authority - If the period of three months is computed from the date of receiving the Order-in-Original by the Reviewing Authority, the review order passed is well within three months.

Held - Surprisingly, in all the three review orders, the date of receiving the Order-in-Original by the Reviewing Cell is not mentioned - When Sub Section (3) of Section 129 D prescribes a time frame of three months from the date of receiving the orders passed by adjudicating authority, it is necessary and would be convenient to mention it in the review order - One cannot understand what prevented the Department from submitting before the Commissioner (Appeals) that the Order-in-Original was received by the Review Cell on the respective dates on which they have stated in the grounds of appeal - As there is no evidence to substantiate the contention of the Department that the Order-in-Original was received on such dates by the Review Cell and as there is no reason to dis-believe the findings of the Commissioner (Appeals) that there was no evidence as to the date on which Order-in-Original was received by the Reviewing Authority, the strong inference that can be drawn is that there is a delay in passing the review orders in these appeals - No grounds to interfere with the observation and findings of the Commissioner (Appeals): CESTAT

- Revenue's appeals dismissed: CHENNAI CESTAT

2023-TIOL-281-CESTAT-MUM

Capita India Pvt Ltd Vs CCT

ST - The appellant provides Business Support Services which is exported outside India and also they have obtained a Centralize Service Tax registration - Due to export of service, CENVAT Credit on input services was accumulated - Such accumulated CENVAT Credit was sought to be refunded by appellant under provisions of notfn 27/2012-CE (NT) issued under Rule 5 of CCR, 2004 - Appellant submitted three separate refund claims which were dealt with separately in three O-I-O - - Certain amounts of refund were rejected - In respect of objections raised where invoice address does not match with registered premises there are large number of decision of Tribunal where it has been held that so long as it is not established that services are not utilized, CENVAT Credit cannot be denied - In respect of real estate agencies services, consultancy engineering services, short term accommodation services availed by officials for providing output services, club and association services and IT services, the finding of appellate authority that there is no nexus with output services is not sustainable - There has been a double credit of Rs. 1,353/-, refund of same is disallowed and refund of unutilized CENVAT Credit of balance amount involved in this appeal is ordered, except for Rs. 1,353/-: CESTAT

- Appeals disposed of: MUMBAI CESTAT

2023-TIOL-280-CESTAT-KOL

CCE Vs Beekay Steel Industries Ltd

CX - Revenue is in appeal against O-I-O vide which Commissioner has dropped the proceedings initiated against assessee vide SCN by observing that assessee complied with order of Commissioner and acted on that basis and no duty was intentionally paid in excess and passed on to the buyers by assessee inasmuch as MODVAT Credit was available to buyers when duty was paid by assessee correctly under provisions of Section 3 of CEA, 1944 - This is the second round of litigation before Tribunal - Case of department as per their grounds of appeal is that with introduction of Induction Furnace (Annual Capacity) Determination Rules, 1997 w.e.f. 01.08.1997 in terms of Notfn 24/1997 which is applicable to induction furnace unit which ordinarily produce non-alloy ingots and billets falling under sub-heading No.7206.90 and 7207.90 of Central Excise Tariff Act, 1985 - Induction Furnace has no other option but to pay Central Excise duty under Section 3A of said Act - The Commissioner's permission was neither withdrawn nor challenged before higher appellate forum - Inasmuch as Commissioner vide his order allowed the assessee to work under provisions of Section 3 w.e.f. Financial Year 1997-98 and assessee had discharged duty burden under said provisions availing MODVAT Credit - No infirmity found in the order passed by Commissioner: CESTAT

- Appeal rejected: KOLKATA CESTAT