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2021 (6) TMI 1105 - HC - GSTLevy of GST - onboard catering services provided by the respondent under a temporary license - requirement of serving welcome drink to the passengers who boarded the subject trains - Entitlement to claim Goods and Services Tax (GST) on production charges/supply of meals after 01.07.2017, when the Goods and Services Tax Act, 2017 [GST Act] came into force - who to face financial burden concerning the food which got wasted due to cancellation or the failure of the passengers to turn up - claim for interest as well. Whether onboard catering services provided by the respondent under a temporary license issued to it also obliged the respondent to serve a welcome drink to the passengers who boarded the subject trains? - HELD THAT:- It is only on 06.04.2017, when IRCTC indicated to the respondent, that unless it gave its unconditional acceptance to the policy framework captured in its communication dated 07.02.2017, its temporary license, which was expiring on 18.06.2017, would not be extended, that the respondent agreed to provide a welcome drink and bear the financial burden qua the same - Faced with this difficult choice, and having regard to the fact that it had already invested funds in the contractual arrangement arrived at with IRCTC, on 12.04.2017, the respondent accepted the terms indicated in the communication dated 07.02.2017, concerning the supply of welcome drink for the period that was to extend beyond 18.06.2017 The claim of the respondent qua welcome drink was restricted to the period spanning between 19.12.2016 and 18.06.2017. To be noted, the temporary license was extended by IRCTC till 04.07.2018 - The learned arbitrator, to our minds, correctly concluded that IRCTC could not have deducted the amounts expended by them towards serving welcome drink to the passengers from the bills of the respondent. Whether IRCTC is obliged to reimburse the amount deposited by the respondent towards GST levied, with effect from 01.07.2017, on production charges? - HELD THAT:- GST is a central tax, whereas VAT is a local tax, which various states would have levied at the relevant time, when the 2017 Act had not been enacted. It appears, that because the VAT rates varied from state to state, production charges were made inclusive of tax at the relevant point in time. Since VAT, amongst other taxes, stands repealed, the respondent, rightly claims, that it should be reimbursed GST upon proof of payment of the same - as correctly concluded by the arbitrator, GST from 01.07.2017 would have to be reimbursed to the respondent by IRCTC, upon the proof of deposit of the same with the concerned statutory authority. Given the fact, that IRCTC has already factored GST in the train fare, lends heft to the stand taken by the respondent, that it should be reimbursed - Whether the respondent was entitled to claim Goods and Services Tax (GST) on production charges/supply of meals after 01.07.2017, when the Goods and Services Tax Act, 2017 (GST Act) came into force? - HELD THAT:- GST deposited by it with the concerned statutory authority. Furthermore, as noticed hereinabove, IRCTC was in a position to, in fact, perhaps, claim ITC, at least for the period spanning between 01.07.2017 and 31.03.2018. As regards other issues, it is not required to deal with the same, as the respondent has neither made any submissions, nor filed any cross appeal qua the same. Appeal dismissed.
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