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"… that this Hon'ble High Court may be pleased to declare that the rate of tax applicable on the sale of scrap buses is 18% falling under either heading 7204 of 3rd schedule or Entry No.453 of 3rd schedule of the KGST Act."

The petitioners submitted that in order to auction the old and scrap buses of the 2nd Respondent-KSRTC, the 1st Respondent-The Controller of Stores & Purchase, KSRTC, has issued the Tender Notice for E-auction.

The grievance of the petitioners is that in the said notice inviting tenders (NIT) from the intending purchasers of these scrap buses, the rates of GST (Goods and Services Tax) applicable in the said notice is given in Col.No.4 of Annexure-A Notice as "As applicable /28.0".

The petitioners submits that the rate of GST Tax applicable on the scrap buses which cannot be plied on road as normal buses cannot attract 28% rate of GST under the new GST regime and therefore, this Court by interfering in the present petitions may direct the Respondents-KSRTC to collect the GST Tax only at the rate of 18% under Schedule-III Heading No.7204 "Ferrous waste and scrap; remelting scrap ingots of iron or steel" or under Residuary Entry No.453 of the same Schedule-III, in which, "Goods which are not specified in Schedule I, II, IV, V or VI" of the KGST Act, so that the petitioners may have a competitive edge to give their bids at the correct rate of GST Tax applicable as per the said Schedule.

The petitioners further submitted that the Authority for Advance Ruling for resolving such disputes has not so far been constituted as per Section 96 of the GST of both the Central and State GST Acts, 2017. Moreover, E-Tender Notices have been issued by other States like Gujarat etc.only at the GST rate of 18% applicable to scrap buses.

The Respondent submitted that the rate of GST quoted in the said E-Tender Notice Annexure-A issued by the Respondent-KSRTC is mentioned as "As applicable/28.0" and its not fixed at 28% only; that if the petitioners have any confusion with regard to the correct rate of GST, they are at liberty to either approach the Respondent-KSRTC itself for clarification or the competent authority, namely, Authority for Advance Ruling under the provisions of Section 96 of the CGST/KGST Act, 2017 and there is no justification for this Court to interfere at this stage.

The High Court observed that it is satisfied that at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage; first of all, the GST rates as indicated in the said E-Tender Notice Annexure-A does not give the fixed rate of GST at 28% as submitted by the petitioners; it only stipulates the rate of GST "As applicable /28.0"; that the bar/stroke between "As applicable & 28.0" makes them mutually exclusive parts of the said clause .

It is further observed -

"Whether the correct rate is 18% GST as claimed by the petitioners under the aforesaid entries of Schedule-III or 28% or not can be clarified either by the Respondents-KSRTC or the Respondent-Commercial Tax Department. It is for the petitioners to participate in the said Tender process as per the terms indicated therein or not to so participate. The E-Tender Notice cannot be quashed by this Court, as this Court does not find illegality in the same."

The High Court added that it would be premature for the Court to decide such academic questions at this stage, when the very foundation of such a dispute itself is not even available for this Court to decide.

As for the authority for Advance Ruling not having been constituted at present, the High Court noted -

"If the said Authority is presently not manned and constituted and as submitted by the learned counsel for the petitioners, again it does not render it a fit case to invoke writ jurisdiction at this stage. It is for the petitioners to approach and represent the concerned Government for the constitution and manning of these Advance Ruling Authorities, as prescribed under Section 96 of the GST Act."

The High Court concluded -

"10. …, it is not certain even with the Respondents-KSRTC, as to what rate of GST, they are going to charge when such auctions are finalized upon the bidding process undertaken in pursuance of the E-Tender Notice issued vide Annexure-A. Therefore leaving it free for the parties to get such questions decided either at the hands of the Respondents-KSRTC or the concerned authorities of the Commercial Tax Department , the present petitions are dismissed as premature."

(See 2017-TIOL-17-HC-KAR-GST)

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Sale of Old & Scrap buses - whether leviable to 28% GST or 18% GST as Ferrous scrap - Petitions premature, dismissed: HC

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