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GST - Case Laws
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2020 (12) TMI 1342
Profiteering - purchase of flat in Celebrity Garden Block-K - it is alleged that the Respondent had not passed on the benefit of input tax credit (ITC) to him by way of commensurate reduction in the price - contravention of provisions of Section 171 of the CGST Act, 2017 - Penalty - HELD THAT:- It is observed that the Respondent is in the real-estate business and has been developing his project "Celebrity Garden-Block K" in Lucknow. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent has not passed on the benefit of ITC to him by way of a commensurate reduction in the price of the flat purchased by him (Applicant No. 1) from the Respondent - It is found that the DGAP, after a detailed investigation, has found that the Respondent has not passed on ITC benefit amounting to Rs. 1,54,269/- (inclusive of GST) to his recipients/homebuyers as required under the provisions of Section 171 of the CGST Act, 2017.
It is observed that the provision of the RERA Act, 2016 makes it mandatory for a real estate developer/promoter to maintain separate bank accounts for each of his projects registered separately under the RERA Act, 2016. In the case of the Respondent, the above provision implies that he was required to maintain four separate escrow/bank accounts in respect of the four towers/blocks of the project "Celebrity Gardens", however the DGAP's Report has no mention of this aspect. It has a bearing on the instant proceedings since the DGAP's Report dated 23.03.2020 only covers one of the four blocks i.e. Block 'K'. As the Respondent had obtained four separate RERA registrations for his four blocks/towers, he should have maintained separate escrow/bank accounts - the compliance of the Respondent with the provisions of the RERA Act, 2016, becomes paramount and need to be examined. In view of this, there arises the need to revisit the investigation to ascertain if the Respondent has passed on the benefit of ITC to the homebuyers of the other 3 towers/blocks of the impugned project by a commensurate reduction in the prices of the residential units supplied by him in terms of Section 171 of the CGST Act, 2017.
In terms of the provisions of Section 171 (2) of the CGST Act and for the reasons detailed in this Order, the DGAP is directed to further investigate the present case under Rule 133 (4) of the CGST Rules, 2017 to ensure the Respondent has passed on the benefit of ITC by way of a commensurate reduction in the prices in respect of the residential units supplied by him. Hence, without dwelling upon any other aspect of the case and without going into any contentions of the Respondent and the Applicants, this Authority, under the powers conferred on it vide Rule 133(4) of the CGST Rules read with Section 171 of the CGST Act 2017, directs the DGAP to reinvestigate this case and recompute the quantum of profiteering.
The DGAP is directed to submit a fresh Report after a detailed investigation as per Rule 129 (6) of the above Rules, 2017. The Respondent is directed to extend all necessary assistance to the DGAP and furnish him with necessary documents or information as required during the course of the investigation - matter on remand.
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2020 (12) TMI 1338
Levy of penalty, interest and GST, for the remittance of the shortage amount - the shortage was found at the time of counting the stocks, subsequent to the transfer of the same from Shop to godown for the purpose of safe custody - HELD THAT:- When the respondent issued a show cause notice to the petitioner, with regard to the imposition of penalty under Section 7(b) (xiv) of the Code, the petitioner sent a reply stating that only the respondents have construed it as shortage amount but it was only the after sales amount.
When such being the case, without conducting any domestic enquiry to find out the fact that whether the said amount was after sales amount or it was a shortage amount; whether the petitioner was really sent any intimation about the after sales amount to the respective District managers and whether there was any obstacles to the petitioner to deposit, the after sales amount. All these facts can be proved only by conducting a domestic enquiry and enquiring the concerned District Managers, Supervisors, Salesmen and those who did stock verification. Without conducting any such enquiry and giving the opportunity to the petitioner to explain his case, in a personal hearing, it is not proper for the respondents to arrive at a preconceived manner as if that the amount deposited subsequent to the stock taken by the respondents as shortage amount particularly when the petitioner took a stand that the amount already deposited subsequent to the stock verification is only an after sales occurred between 4.00 p.m. to 6.00 p.m. On 24.03.2020. When the petitioner has taken definite stand that it was only an after sale amount and not a shortage amount, the respondents should not have come to the conclusion arbitrarily without conducting the domestic enquiry as shortage amount.
This Court is of the opinion that the impugned order was passed in an arbitrary manner and in violation of the principles of natural justice, without conducting any domestic enquiry as contemplated in the Code and the procedure adopted in the course of decision making process is not as contemplated in the Code, thus, this Court find fault on such decision making process and the same is totally illegal and liable to be quashed.
Whether the penalty imposed in a disciplinary proceedings in a service matter is liable for GST, in terms of Section 7(1) (d) or 7(1-A) of the GST Act, 2017? - HELD THAT:- Admittedly the said Section 7(1) (d) was not in force as on the date of passing the impugned order in the month of September 2020. The said Section was omitted with effect from 01.02.2019. The respondent, in his counter clearly stated that the notice of collection of GST was issued under Section 7(1) (d) alone. Therefore, without any provision/authority, the third respondent has issued the show cause notice to collect the GST, which is totally illegal - Secondly, even assuming that Section 7(1A) of the Act r/w Rule 5(e) of the Rules will be applicable and the show cause notice was issued in accordance with the said provision, as contended by the learned counsel for the respondents, nowhere either in the show cause notice or in the impugned order or in the counter affidavit, the respondents never ever stated about the applicability of Section 7(1A) r/w Rule 5(e).
In any angle, the imposition of the GST by the respondents, to the penalty imposed, under Rule 7(b) (xiv) of the Code, in a disciplinary proceedings initiated against the employees would not attract the GST and the penalty referred therein would only refer the penalty imposed in the course of trade or commerce - As such in the present case the penalty was imposed in a disciplinary proceedings which cannot be construed that the penalty imposed in the course of trade or commerce for the imposition of GST.
The GST imposed by the respondents is illegal on the face of it and the same is liable to be set aside - Petition allowed - decided in favor of petitioner.
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2020 (12) TMI 1335
Condonation of delay in filing appeal - time limitation - delayed filing of appeal under Section 100 (2) of the CGST Act - henna is classifiable under chapter 14 or 33 of GST Tariff or not - HELD THAT:- The Appellant has filed appeal on line on 17.06.2020. The Appellant has deposited SGST fee of Rs. 10000/- on 15.06.2020 and CGST fee of Rs. 10000/- on 22.10.2020. On perusal of appeal filed on 17.06.2020, it was found that the appellant has not filed the appeal in prescribed format. The appellant further filed the appeal in prescribed format on 02.11.2020 - the date of filing of appeal is 02.11.2020 which is 63 days delay from the last date i.e 31.08.2020. Further, the Appellant has deposited CGST (appeal) fee of Rs. 10000/- on 22.10.2020. As per provisions, the authority has discretion to condone the delay for 30 days. As discussed, we hold that delay in filing of this appeal is beyond the discretionary power (30 days) provided to Appellate authority. Therefore, condonation application filed by the appellant is liable to be rejected.
The non-payment of CGST fee and non-filing appeal in prescribed format are procedural lapses - the payment of appeal fee and filing of appeal in prescribed format is mandatory requirements as per provisions of Section 100 (3) of the CGST Act, 2017. Section 100 (3) of the CGST Act, 2017 stipulates that every appeal under this section shall be in such form, accompanied by such fee and verified in such manner as may be prescribed. The said rules do not provide any discretion in non- implementation.
The appellant has relied upon on the decisions in CENTRAL INDIA TOBACCO PRODUCTS PVT. LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1987 (2) TMI 256 - CEGAT, NEW DELHI] and UNION OF INDIA, DELHI VERSUS ROSHAN LAL AND ANR. [1967 (9) TMI 157 - DELHI HIGH COURT] where the issue was related to non-payment of court fees, but in this case, issue is related to determination of date of filing of appeal also. In this case, part fee has been deposited on 15.06.2020 and second part fees have been deposited on 22.10.2020. In this case complete fee has been deposited and appeal in prescribed format has been filed after more than 30 days from the due date of filing of appeal. Therefore, these case laws are not squarely applicable in this case.
When it has been held that delay in filing of appeal is beyond the discretionary power provided to Appellate authority, therefore, it is observed that discussing appeal on merit would not be relevant.
The condonation application filed by the appellant is hereby rejected and appeal is also rejected
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2020 (12) TMI 1332
Classification of supply - supply of goods or supply of services - activity of printing of Answer Booklets / Answer Copies and supplying it to Educational Institutions to be used in examinations by using its own raw material consisting of paper, printing ink etc. - answer booklet is classifiable under Chapter Heading 4820 or 4911? - rate of tax - HELD THAT:- Principal supply has been defined in Section 2(90) of the Central Goods and Services Tax Act as supply of goods or services which constitutes the predominant element of a composite supply and to which if any other supply forming part of that composite supply is ancillary - In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services.
In the instant case applicant is supplying answer booklets/copies with or without OMR having its name logo etc. of his customer and the printing material used in printing of the said items pertains to the applicant. We further observe that the supply of printing to the content as supplied by the recipient of the supply is the ancillary to the principal supply of the answer booklets/copies with or without OMR, therefore the supply will be considered a supply of goods falling under respective heading of chapter 48 or 49 of custom tariff.
The activity of printing of Answer Booklets/ Answer copies and supplying it to Educational Institutions to be used in examinations by using its own raw material consisting of paper, printing ink etc. is 'Supply of goods' falling under chapter Heading/ Tariff item 4820 of entry 123 of the schedule II to the notification 01/2017 central tax (Rate) dated 28/06/2017 as amended and chargeable to GST @ 12%
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2020 (12) TMI 1329
Refund claim of tax paid on export of services - zero-rated supply - intermediary services - time limitation - opportunity of hearing provided to the appellant, or not - place of provision of service - place of supply - applicability of Section 13(8)(b) of the IGST Act - HELD THAT:- The refund for the month of October, 2017 was filed on 31-10-2019 that is within expiry of two years from the relevant date as stipulated under Section 54(1) of the CGST Act, 2017. Further, the contention of the appellant is agreed upon that they were not able to file the refund claims for the subsequent period on the common portal because deficiency memo for earlier period was pending. The refund claims were not time barred.
As to whether the services provided by the appellants were covered under “intermediary services” as defined under Section 2(13) of IGST Act and applicability of Section 13(8)(b) of the IGST Act, thereon? - HELD THAT:- The appellant is providing a service of Promotion and Marketing to the university/college on a principal to principal basis and is not facilitating a provision of service between two persons. It also needs to be mentioned that in few cases appellant in addition to the above service has also undertaken the activity of providing market intelligence about the requirements of the intending students. This also shows that the appellant is providing a service directly to the Universities/Colleges and not to any person on behalf of the Universities/Colleges.” This fact is itself contradictory here as the appellant himself is accepting that only in few cases they were providing their services directly on principle to principle basis. It shows that they are themselves accepting that they are providing intermediary services.
The appellants were engaged by the foreign universities/institutes to represent them in the territory of India who in-turn acted as their education/recruitment agent to perform the services in the territory of India. That such services provided by the appellants were only as a representative of the foreign universities and not as an independent service provider providing services on their own account.
The Section 13(8)(b) of the IGST Act, 2017, provides that the place of supply for the intermediary services would be the location of the supplier of such services (i.e. location of intermediary service provider) and in the instant case it is in India. As discussed above the appellants are covered under ‘intermediary’ and hence, their place of provision of services is not outside India contrary to condition (iii) of Section 2(6) of the IGST Act which defines ‘export of service’. The provisions of place of supply in case of Intermediary, has been carved out in GST Act as per international practices, if services provided by the intermediary located in India would be without payment of tax - For Export of Services all the conditions as laid down under Section 2(6) of IGST Act, 2017 are to be followed in totality without any violation, and that there is no scope of partial compliance of the conditions laid down therein.
The universities engage the entities like applicant for promotional & marketing activities for course taught by them& making the perspective students aware about the course fee and other associated costs, market intelligence about course and the latest educational trend/future perspective/job security/placement etc. and that such recruitment services provided to students of the foreign university are not covered under export of services, such services are provided only as a representative of foreign university and not as an independent service provider. Therefore, place of supply shall be under Section 13(8) of the IGST Act, 2017 not under Section (2)(6) of the above Act. Place of supply shall be the location of service provider in taxable territory and will not qualify as export of service.
The refund claims were not hit by time limitation, but the services provided by the appellants to the Foreign Universities and the students in India were provided only as a representative of foreign universities and not as an independent service provider; that such services were not covered under export of services and thus exigible to GST; that the place of supply shall be governed by Section 13(8)(b) and not by Section 13(2) of IGST Act, 2017. Place of supply of services was the location of service provider in India. Thus, the services of the Appellant are not ‘Export of Services’ under the GST Act, and refund claims of the appellant are inadmissible and liable to be rejected.
Appeal disposed off.
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2020 (12) TMI 1322
Rectification of mistake - error apparent on the face of record - Export of services or not - Commission received by the Applicant in convertible Foreign Exchange for rendering services - intermediary services - zero rated tax - section 16 (1) (a) of the Integrated Goods and Services Tax Act, 2017 - HELD THAT:- On perusal of the aforesaid Order dated 11.12.2019, it is seen that all the submissions and contentions put forth by the Applicant have been duly considered by this Appellate Authority. It was only after due considerations of all the submissions and contentions, set forth by the Applicant. that this Appellate Authority had arrived at the conclusion that there was no error apparent on the face of the record. as being alleged by the Applicant, and hence, rectification application dated 21.08.2019 was rejected by observing that the interpretations, being drawn by the Applicant with regard to Section 97(2)(e) of the CGST Act, 2017 which empowers the Authority for Advance Ruling as well as the Appellate Authority for Advance Ruling to pronounce ruling on the question of “determination of the liability to pay tax on any goods or services or both, was clearly debatable in view of the differing interpretations drawn by this Appellate Authority, and therefore, this Appellate Authority vide Order dated 11.12.2019 had held that there was no error apparent on the face of the record, which would warrant rectification of the original Order dated 22.03.2019 passed by this Appellate Authority under Section 102 of the CGST Act, 2017.
For arriving at the aforesaid conclusion, this Appellate Authority had considered all the case laws, cited by the Applicant in his original application dated 21.08.2019, wherein the Hon'ble Courts and Tribunals have laid down the principles of law with regard to the true interpretation of the term 'mistake' or 'error', when used with the term ‘apparent' in the various Acts, the presence of which in the Order would warrant the invocation of the rectification provision laid down under those particular Acts.
As regards the supplementary submissions filed by the Applicant on 16.12.2020, wherein it was stated that the Department has accepted the ruling pronounced by the Hon'ble Kerala High Court in SUTHERLAND MORTGAGE SERVICES INC VERSUS THE PRINCIPAL COMMISSIONER OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS, CENTRAL GST AND CENTRAL EXCISE, KOCHI, THE COMMISSIONER OF STATE TAX, ASSISTANT COMMISSIONER, KAKKANAD RANGE-4 [2020 (3) TMI 186 - KERALA HIGH COURT], it is stated that it has no bearing upon the outcome of the instant Application filed by the Applicant.
The Miscellaneous Application dated 25.09.2020 filed by the Applicant is not legally maintainable, and hence the same is liable to be rejected
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2020 (12) TMI 1317
Mining services or not - contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR) read with National Mineral Exploration Trust Rules, 2015 ('NMETR') and Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015 ('MMCDMFR') - consideration towards supply of mining service by Andhra Pradesh Government, included for purpose of value of supply chargeable to GST or not - Reverse Charge Mechanism - HELD THAT:- The charges levied under MMDR Act are meant to be the charges levied under any law other than the GST Act. Thus, the payments made to DMF and NMET are very well includible under the 'value of supply' in addition to the royalties paid and can be called a \total consideration' received for granting mining and leasing rights - the argument of the applicant that Royalty is only a measure of NMET and DMF contributions and cannot be equated with NMET and DMF and that NMET and DMF are not in respect of single supply of service i.e. licensing that warrants clubbing of all amounts i.e. Royalty, NMET and DMF under Section 15 of the GST law for the purpose of valuation does not hold good.
The service provided is only the license to extract mineral ore and also the right to use such minerals extracted is a single service where the consideration is payable under three heads and in case any one of the payments is not made, the service provider, that is the Government would not issue the permit to use the mineral ore so extracted. Hence it forms the value of the supply under Section 15 and the charges for DMF and NMET being compulsory payments, would only amount to application of the amounts paid and still would form the value of the taxable services - there are no separate service providers for royalty, DMF and NMET and in all cases the Government which has provided the license to mine mineral ore and permitted the use of such mineral ore mined would be the person who has provided the service.
As per Entry No. 5 of Notification No. 13/2017-Central Tax (rate), GST on services supplied by Central Government State Government or Local Authority, to a business entity needs to be paid by such business entity under RCM.
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2020 (12) TMI 1314
Classification of supply - consideration towards supply of mining service by Andhra Pradesh Government or not - contribution to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) - Inclusion of the amount for purpose of value of supply chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient? - HELD THAT:- The charges levied under MMDR Act are meant to be the charges levied under any law other than the GST Act. Thus, the payments made to DMF and NMET are very well includible under the ‘value of supply’ in addition to the royalties paid and can be called a ‘total consideration’ received for granting mining and leasing rights - the argument of the applicant that Royalty is only a measure of NMET and DMF contributions and cannot be equated with NMET and DMF and that NMET and DMF are not in respect of single supply of service i.e. licensing that warrants clubbing of all amounts i.e. Royalty, NMET and DMF under Section 15 of the GST law for the purpose of valuation does not hold good.
The service provided is only the license to extract mineral ore and also the right to use such minerals extracted is a single service where the consideration is payable under three heads and in case any one of the payments is not made, the service provider, that is the Government would not issue the permit to use the mineral ore so extracted. Hence it forms the value of the supply under Section 15 and the charges for DMF and NMET being compulsory payments, would only amount to application of the amounts paid and still would form the value of the taxable services - It is also inferred that the service is a single service, there are no separate service providers for royalty, DMF and NMET and in all cases the Government which has provided the license to mine mineral ore and permitted the use of such mineral ore mined would be the person who has provided the service.
Thus, the contributions to National Mineral Exploration Trust (NMET) and District Mineral Foundation (DMF) qualify as consideration towards supply of mining service by Andhra Pradesh Government and they being includible under value of supply, are chargeable to GST under the Reverse Charge Mechanism in the hands of the applicant, i.e., service recipient.
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2020 (12) TMI 1309
Seeking grant of bail - Input tax credit - issuance of fake invoices - Section 132 (1)(b)(c) of the Central Goods and Services Act, 2017 - HELD THAT:- It appears that the investigation is in progress and the allegations are about substantial evasion of tax to the extent of ₹ 541 Crores by availing Input Tax Credit without actual trading / movement of goods which is an offence under Section 132 of the CGST Act. A perusal of the order passed by the learned Magistrate would prima facie indicate that what has principally weighed with the learned Magistrate was that the applicant had given an undertaking seeking permission to compound the offence before the Commissioner, on payment of the tax amount as per rules. The learned Magistrate has observed that even though the offence leveled against the applicant is serious in nature, “no purpose would be served by keeping him behind bars, that too when he is willing to pay the evaded amount and compound the offence”. In the opinion of the learned Magistrate “sitting behind bars, he (the applicant) might not be able to pay the evaded amount.” Prima facie, it appears that the investigation being under progress, the exact amount evaded is not yet ascertained.
Matter remanded to the learned Magistrate and therefore it is neither necessary nor appropriate to appreciate the material in details or to record any final conclusion lest it would prejudice either the applicant or the prosecution before the learned Magistrate - application dismissed.
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2020 (12) TMI 1308
Seeking grant of bail - creation of fake firms to claim Input Tax Credit - Section 132(1)(b) and (c) of Central Goods and Service Tax Act, 2017 - HELD THAT:- The Ld. Trial Court based its conclusion on the aspect of compounding the offence as per Sec. 138 of the GST Act. It is also noted accused shall deposit some amount before appropriate authority to show readiness and willingness to compound the offence. It is also taken into considerations accused has given undertaking and approach before the Trial Court seeking permission to compound the offence before commissioner on payment of Tax as per rules. It is further observed when accused is willing to pay the evaded amount and compound the offence no purpose will be served by keeping him behind the bar.
It is worth to be noted the offence as alleged is an economic offence, whereby the applicant since July, 2017 till the date has been evading the Tax as alleged by receiving and issuing the bogus bills and invoices without actual sale or transportation of Goods. Total amount of evasion is ₹ 541 Crores. There is also an allegation as to creating fake firms to claim Input Tax Credit. There are 9 bogus firms as shown created and had issued fake invoices.
In the present case in hand the main allegations of the department against the accused is that they are guilty of circular trading by claiming fake invoices on the materials never purchased and passing on input tax credit to companies to whom they never sold any goods. There are allegations as to fake companies were also formed to execute smooth illegal trading. The department has estimated that the fake GST invoices were issued to the total value of about ₹ 541 Crores - It is settled law supervening circumstances for the cancellation of bail, must be of such a nature as to lead to the conclusion that the accused does not deserve to be at liberty either by reason of a violation of the conditions of bail or due to supervening conduct which bears upon the misuse of the liberty by the accused.
Application allowed in part.
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2020 (12) TMI 1305
Scope of Advance Ruling application - question raised by the Applicant before the Authority is pending with the DGGEST - Classification of services - rate of tax on sub contractor, where, he executes works contract pertaining to dam, wherein the principal contractor is liable for tax @ 12% - period from 22-01-2017 to 25-01-2018 - N/N. 11/2017 as amended - HELD THAT:- The question raised by the Applicant before the Authority is pending with the DGGEST and proceeding against the Applicant have already been started by the DGGST Intelligence Regional Unit Indore.
As per the proviso to Section 98 (2) of CGST Act, the Authority shall not admit the application where the question raised in the application is already decided in any proceedings in the case of an applicant - as per the proviso to Section 98 (2) of CGST Act, the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant.
It is concluded that the application is liable to be rejected as per the proviso of section 98(2) of CGST Act.
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2020 (12) TMI 1304
Determination of liability to pay tax - double-taxation on freight portion of imported goods - Goods imported and IGST levied on CIF Value (which includes freight) Basic Custom Duty + Social Welfare Cess - levy of IGST again on the freight component (Ocean Freight) on reverse charge basis - HELD THAT:- While the question proposed before the Authority is whether the liability to pay tax exists or not. the applicant himself is not denying the existence of such a liability. The only assertion is whether the existence of such a liability creates irregularities in respect of tax laws outside the limited applicability of the IGST Act. In other words, the existence of such a liability is not being challenged by the applicant in the current application. rather the constitutional validity of the liability is being questioned - the applicant himself admits that the liability to pay tax exists. and is saying that the liability ‘should not exist since it is against the fundamental principles established by various Hon’ble Courts based on their interpretations of the various statutes and the Constitution of India. Therefore, the question proposed before the Advance Ruling Authority is not whether the liability exists or not, but whether such a liability is constitutionally valid or not.
This Authority is of the view that based on the detailed reading and understanding of Section 97 of the CGST Act. an application for Advance Ruling can only be made to determine the “liability to pay tax” on any goods or services or both. Therefore, no application can be made to determine whether the liability is constitutionally valid or not. Such power rests only with the courts.
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2020 (12) TMI 1303
Classification of supply - contracts towards construction, O&M and other ancillary contracts which are in relation to work entrusted to MPPGCL by the State Government - composite supply as per Schedule II of CGST Act 2017 - rate of GST - Construction contracts awarded by MPPGCL (list enclosed) which are in relation to work entrusted to MPPGCL by the State Government as per Notification No. 11/2017 CT(R) as amended - O&M and other ancillary contracts awarded by MPPGCL (list enclosed) which are in relation to work entrusted to MPPGCL by the State Government as per Notification No. 11/2017-CT(R) - HELD THAT:- The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term “in, relation to”, which enlarges the scope of a provision.
The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with, it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term “in relation to”, which enlarges the scope of a provision - Rule of Harmonious Construction is used to avoid any inconsistency and repugnancy within a section or between a section and other parts of a statute. The rule follows a very simple premise that every statute has a purpose and intent as per law, and should be read as a whole. The interpretation which is consistent with all the provisions and makes the enactment consistent shall prevail. The doctrine follows a settled rule that an interpretation that results in injustice, hardship, inconvenience and anomaly should be avoided.
MPPGCL has been established by M.P. Government with the objective of carrying out power generation in the state of Madhya Pradesh State Government of Madhya Pradesh holds 100% shares of MPPGCL. The State Government is also exercising full control over the activities of the said company. Therefore, M/s. MPPGCL qualifies to be called and termed as a 'Government Entity' for the purpose of GST law, as it fulfils the necessary and sufficient conditions laid down under notification supra in terms of Explanation to Notification No. 11/2017-C.T. (Rate). and also as per Notification No. 31/2017-C.T. (Rate), dated 13-10-2017 - Entry No. 3(vi) to the Notification No. 11/2017-C.T. (R) refers to different nature and type of Construction Services as composite supply.
The provisions relating to Advance Ruling are to assist the applicants in making compliance under the Act and prevent litigation. This provision is not for the applicant to use as advisory service for GST matters. The applicant has furnished list of 68 contracts and sought the rate of GST applicable on those 68 contracts. From a perusal of the list it appears that the supplies under the contracts are not identical.
Regarding classification of supply in Entry No. 6 of Schedule II to the GST Act we are unable to answer the question on account of insufficient information provided by the applicant. Further in respect of first question, regarding applicability of the Advance Ruling in the matter of Kalyan Toll Infrastructure Ltd - regarding the rate of GST on supplies made under different contracts.
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2020 (12) TMI 1301
Entitlement to take GST Credit - service provider has filed GSTR-1 within the time limit of section 39, but he has amended only invoice number after time limit provided under section 39 of the CGST Act, 2017 - restriction in terms of Section 16 (4) of the CGST Act, 2017 - If the Service receiver can not avail ITC on these invoices, then can we get refund of the tax paid on these from the government or issue credit notes against these amended invoices to the service receiver and claim the credit back?
HELD THAT:- The procedure to prepare invoices and for filing of returns is mentioned in the Section 31 and section 39 of the CGST Act, 2017. Further in respect of refund of ITC, the circumstances under which the refund is to be claimed has been mentioned under the provision of Section 54/55 of CGST Act, 1944. Hence, the question raised before this authority is purely a procedural and not covered under any of the provisions of Section 97(2) of the CGST Act.
It is observed that the question (i) and (ii) raised for admissibility of itc to service receiver by the applicant before the authority is not for the applicant but is related to service receiver who receive the services from the Applicant. As per the Section 103 of the CGST Act, 2017, the applicability of advance ruling should be binding only on applicant whereas in this case applicant wants reply for the problem raised/faced by the service receiver not applicant.
This Authority is of the view that based on the detailed reading and understanding of Section 97 of the CGST Act, an application for Advance Ruling can only be made to determine the "admissibility of input tax credit" on any goods or services or both. Therefore, no application can be made to admissibility of Input tax credit on the procedural issue.
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2020 (12) TMI 1299
Classification of supply - Supply of Goods or Supply of Service - job work service or not - Rate Contract for Fabrication and Transportation of 20 KL &70 KL Horizontal Tanks including transportation of Steel Plates from its Depot to Applicant’s works - rate of tax - applicability of Circular No. 126/45/2019-GST dated 22/11/2019 - HELD THAT:- The applicant is presently classifying the same supply of goods and charging GST @ 18% under HSN code 7309 and there is no change in composition of final product and process of fabrication of steel tanks. As per submission of the applicant, only steel plates are being provided by IOCL on free of cost basis to the applicant and all other structural items/material & fittings required for the tank are to be arranged by the applicant - The applicant had also submitted that the proportion of weight and value of the components and material used by them in the process of fabrication of tank on the steel plates provided on FoC basis by IOCL is quite substantial (Para 1.10 of Statement of relevant facts). As such, it is not a case that entire inputs required for fabrication of tanks are provided by M/s IOCL but substantial items are used by the applicant during the process. The nature of supply in the instant case is supply of goods.
The activity performed by the applicant in the process of supply of tank is not covered in the services by way of job work or in manufacturing service under Notification No. 11/17-CT(Rate) date 28.06.2017. The legislature has defined job-work and manufacture separately. As such, the legislature does not intend to cover a treatment or process resulting into a distinct commodity under the scope of job work. The steel plates and tank are different commodities and after processing on steel plates, a new product Tank has been manufactured which is distinct in name, character and use.
The fabrication of tank from steel plates supplied free of cost froth M/s IOCL is manufacture as per CGST Act, 2017. Accordingly, supply of tanks by the applicant is supply of goods.
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2020 (12) TMI 1298
Benefit of lower rate of GST under CLSS Scheme - entitlement to get interest Subvention certificate and/or Interest subsidy in his / her bank - adjustment of GST Credit if builder does not have future GST liability in this project - entitlement to GST refund if amount is not adjustable from future liability of GST under the project - Section 54 of Central Goods & Services Tax Act, 2017 read with Rule 89 of Central Goods & Services Tax Rules, 2017.
If any Flat buyer otherwise qualified to get lower rate of GST under CLSS Scheme, get interest Subvention certificate and/or Interest subsidy in his / her bank account after: a). Tower / Building get Completion Certificate from Competent Authority, or b). Expiry of six months from end of financial year Can builder pass-on benefit of lower rate of GST to this flat buyer in such situation? And How? - HELD THAT:- The excess tax is to be adjusted as per clarification issued by Tax Research Unit, Ministry of Finance, Govt. of India vide F.No. 354/52/2018/TRU dated 07.05.2018. Even then if the applicant is unable to adjust the same, the applicant may approach to appropriate forum which is GST Policy Wing.
How can builder get GST Credit adjustment if builder does not have future GST liability in this project? - HELD THAT:- The question is out of purview of advance ruling authority. As such, the question raised by the applicant is not answered.
Will builder be entitled to GST refund if amount is not adjustable from future liability of GST under the project? - HELD THAT:- The question is out of purview of advance ruling authority. However, whether the applicant is entitled for refund or not under Section 54 of Central Goods & Services Tax Act, 2017 read with Rule 89 of Central Goods & Services Tax Rules, 2017 would be decided by the jurisdictional authority subject to fulfillment of necessary conditions of refund.
The questions raised by the applicant are in nature of procedural clarification which is to avail benefit of reduced rate of GST under CLSS scheme as explained in clarification issued by the Tax Research Unit, Ministry of Finance, Govt. of India. As due to time limit to issue credit note and also applicant's inability to adjust excess tax paid due to reduced tax liability, the applicant is not getting benefit of reduced tax liability under CLSS. It creates a very peculiar condition but the authority of advance ruling is not an appropriate authority for seeking procedures or clarifications in such exceptional circumstances. If the applicant is unable to issue credit note or unable to adjust their reduced tax liability due to any reason, they may approach to the GST Policy Wing for remedial measures.
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2020 (12) TMI 1297
Classification of goods - rate of GST - Namkeen - use of unregistered brand, name, symbol etc - CSH/HSN Code alongwith applicable Tax rate of the final product namely Extruded raw stick - HELD THAT:- Heading 2106 is an omnibus heading covering all kind of edible preparations, not elsewhere specified or included. Chapter Note 5 provides an inclusive definition of this heading and covers preparations for use either directly or after processing, for human consumption. Chapter Note 6 pertaining to Tariff Item 2106 90 99 also provides inclusive definition and products mentioned therein are illustrative only. Taking all these aspects into consideration, the product 'raw extruded stick' is appropriately classifiable under Tariff Item 2106 90 99.
Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 issued under the CGST Act, 2017, issued under the GGST Act, 2017 covers “Food preparations not elsewhere specified or included [other than roasted gram, sweetmeats, batters including idli/dosa batter, namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, khakhra, chutney powder, diabetic foods]” falling under Heading 2106. The product raw extruded stick is not ready for consumption and the same has to be fried before consumption. Therefore, Goods and Service Tax rate of 18% (CGST 9% + GGST 9% or IGST 18%) is applicable to the product 'raw extruded stick' as per Sl. No. 23 of Schedule III of Notification No. 1/2017-Central Tax (Rate) slated 28.06.2017, as amended, issued under the CGST Act, 2017 issued under the GGST Act, 2017.
If the applicant voluntarily forego their actionable claim or enforceable right on brand name on the final product namely “Namkeen” in the manner as prescribed under the Notification No. 01/2017-CT(Rate) dated 28.06.2017, the applicable rate of Central Tax and State Tax would be 2.5% each (cumulatively 5%) - The CSH/HSN code of the Final Product namely “Extruded raw stick” is 21069099 attracting rate of tax @ 9% each under Central and State Tax.
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2020 (12) TMI 1284
Unable to claim transitional credit under DVAT Act - input tax credit - technical glitches in uploading Form TRAN–1 - it was held by Delhi High Court that The Court therefore, directs that the Respondents to either open the Portal to enable the Petitioner to again file the TRAN-1 Form electronically, failing which they will accept the TRAN–1 Form already filed manually by the Petitioner - HELD THAT:- Delay condoned.
Issue notice.
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2020 (12) TMI 1270
Seeking grant of pre-arrest bail - fake/bogus Tax invoices without supply/movements of goods - offence 132(5) read with 137 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Upon perusal of the reply filed by the prosecution and the documents placed on record, it would reveal that prima facie there is force in the allegations made against the applicants. The statement of co-accused Mahesh Kinger speaks volume. Considering these allegations, it can be said that unless the investigation officer gets an opportunity to unearth the facts, he will not be in a position to reach to the proper conclusion.
Involvement of applicant No.2 in the present crime - HELD THAT:- Upon perusal of the statement of applicant No.2 it would reveal that she has signed the balance sheet of the company, invoices, RTGS documents, and Cheques. This goes to suggest prima facie involvement of applicant No.2 in the business of the Company. Thus, I do not find merit in the submission of the learned advocate for the applicants.
There are no merit in the contention raised in the application that the applicants have been falsely implicated and that there is no need of custodial interrogation. On the contrary, considering the facts and circumstances of the case and the fact that there are allegations of evasion of huge taxes, if an anticipatory bail is granted to the applicants, that would certainly adversely affect the investigation.
Bail application dismissed.
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2020 (12) TMI 1269
Application for pre-arrest bail - wrongful availment and passing on of input tax credit or not - serious allegations against the applicant in respect of evasion of tax - HELD THAT:- Upon perusal of the allegations made against the applicant it is prima facie revealed that the applicant has supplied goods without invoices and that issued invoices but without supplying goods in contravention of the provisions of the GST Act. Upon perusal of the objection taken by the respondent, it is crystal clear that the applicant is not interested to co-operate the investigating agency.
Not only this the prosecution has specifically quoted the incident dated 18.11.2020 stating that on that day, the statement of the applicant was recorded but the applicant without signing the statement and the permission of the Investigation Officer had left the premises. The statement has not been controverted by the applicant by filing counter affidavit. This shows the attitude of the applicant that he is not interested to extend co-operation to the Investigation Agency.
Thus, if the bail as claimed by the applicant is granted in his favour in that case certainly it would adversely affect the further investigation - In view of the observations and the allegations made against the applicant, no case is made out for exercising discretion for grant of pre-arrest bail.
Bail application dismissed.
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