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GST - Case Laws
Showing 61 to 80 of 1693 Records
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2020 (12) TMI 902 - AUTHORITY FOR ADVANCE RULING, KARNATAKA
Inputs or not - Gift items - promotional products / Materials and Marketing Items used by the Applicant in promoting their brand and marketing their products - section 2(59) of the CGST Act, 2017 - input tax credit in terms of section 16 of the CGST Act, 2017 - HELD THAT:- The applicant states that some of the materials, like display boards, Posters, Outdoor hoardings, remain in his own account and are treated as capital goods. There is no transfer of ownership of these materials to his franchisees, distributors and retailers and hence there is no sale involved in them. Further, it is also seen that these materials have no direct correlation on the amount of sales effected and are only for display in the premises of the franchisees, distributors and retailers and they remain the property of the applicant. The applicant does not show any evidence of these returned back after their effective use - the applicant states that uniforms, gifts and carry bags are provided to the retailers, distributors and franchisees to be used by them or give them free of cost to the purchasers of their materials. Hence they are promotional materials to attract and encourage sales of their goods and hence are expenses in his accounts. In this case, the goods do not remain in the account of the applicant and is transferred to the accounts of the retailers, distributors and franchisees, with a condition that they have to be given free of cost to the ultimate consumers, i.e. sales personnel in case of uniforms, personnel and customers in case of gifts and to the customers in case of carry bags.
Non-distributable goods which are given to the distributors, franchisees and retailers - Input tax credit on capital goods - HELD THAT:- The taxes paid by the applicant on the supply of goods or services or both to him qualify as input tax credit - section 16 of the GST Acts provides for the eligibility for taking/ availing input tax credit. Since the applicant has used or intended to use the goods and services procured in the course or furtherance of business, the applicant is entitled to take input tax credit, subject to other provisions of the Act and there is no blockage attributable to section 17 (1) as the applicant has used the goods in the course or furtherance of business - the non-distributable goods are used by the applicant for the purpose of their business and at the time of such writting off or loss or destroyed, the input tax credit claimed on such goods are to be reversed. The applicant has not made any submissions regarding what is ultimately done to these goods after the end of period of usage. Assuming that they are written off or destroyed or lost, the input tax credit claimed under section 16 needs to be reversed as per Rule 43 of the CGST Rules, 2017.
Distributable goods, procured by the applicant and used for sales promotion - HELD THAT:- They are given free of cost and there is no consideration for such transfer. The stock register of the applicant would be credited with these materials when they are procured and debited when they are distributed and hence they would be no longer in the accounts of the applicant - applicant, in the instant case, disposes / issues the distributable goods free of cost i.e, without any consideration to two categories i.e. Franchisees (Exclusive Show Rooms) and other shops / retailers, Ävhere all brands are sold (Retailers / All brands stores).
In the instant case, with regard to the first category i.e. the Franchisees of the applicant are associated in the business of one another and hence are related persons. It is an admitted fact that the applicant disposes the distributable goods by way of gifts and free supplies to promote business and hence are to be treated as supplies in terms of para 2 of Schedule I to the CGST Act 2017. Thus the applicant need to discharge applicable GST on such supplies and thereby is entitled to avail input tax credit on the said supply of goods - The second category is that of all brands stores and they do not fall under the related persons to the applicant. Further the above Circular also addresses applicant's contention that items supplied for promotion of the brand is as per contractual obligation & hence can't be called as gifts. The Circular makes it abundantly clear that these items would be called gifts. Hence in this case, since the persons to whom the distributable goods are given are not related parties and are distinct persons and are not employees of the applicant, the transaction is not coming under the scope of supply and hence the applicant is not eligible to claim input tax credit on the same.
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2020 (12) TMI 901 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA
Permission for withdrawal of Advance Ruling application - levy of GST on the total amount being collected by them from Virat Associate LLP, which includes DMG Royalty, DMF & Owner's Royalty, under forward charge mechanism or on Owner's Royalty only? - HELD THAT:- The applicant vide their letter dated 23.11.2020, requested this authority to permit them to withdraw their application for advance ruling, quoting the reason that certain clauses of the MOU have been mended due to the ill effect of COVID-19 and consequential slow down of the business.
The application filed by the Applicant for advance ruling is disposed off as withdrawn.
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2020 (12) TMI 900 - AUTHORITY FOR ADVANCE RULING, ODISHA
Requirement of GST registration - import of services or not - place of supply - Supply of consulting services through sub-station Engineer/ expert of the applicant to OPTCL - Whether the applicant is required to be registered under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services rendered to M/s Odisha Power Transmission Corporation Limited? - HELD THAT:- The expert belonging maintains suitable structures in terms of human and technical resources at the sites of OPTCL. It ensures provision of supply of consulting services for the contract period, indicating sufficient degree of permanence to the human and technical resources employed at the sites. The applicant through its expert belonging, therefore, supplies the service at the sites from fixed establishments as defined under section 2 (7) of the IGST Act. The location of the supplier should, therefore, be in India in terms of section 2 (15) of the IGST Act - the contention of the applicant canot be agreed that the services supplied to OPTCL would be covered under the ambit of Entry No. 1 of Notification No. 10/2017- Integrated Tax (Rate) dated 28th June, 2017 and shall be liable to tax under RCM.
Supply of consulting services through sub-station Engineer/ expert of the applicant to OPTCL is not, therefore import of service within the meaning of section 2 (11) of the IGST Act. The Engineer/expert belonging to the applicant should be treated as a supplier located in India, and made liable to pay GST, the place of supply being determined in terms of section 12 (2) (a) of the IGST Act - Since, applicant is liable for payment of GST, he is required to be registered under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited.
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2020 (12) TMI 899 - AUTHORITY FOR ADVANCE RULING, ODISHA
Works Contract Service or not - nature of supply made by NBCC Ltd. (Applicant) to IIT, BBSR - Legal status of IIT, Bhubaneswar - Governmental Authority’ or a ‘Government Entity’ ? - construction of IIT Bhubaneswar Campus allotted to the Applicant company - construction services related to sewerage project falls under clause (iii) of serial no 3 (classification code 9954) of the table in the Notification No. 11/2017-Central Tax(Rate) dated the 28th June, 2017 - rate of GST.
Composite supply or not - HELD THAT:- There are number of works entrusted to the applicant under a single contract/agreement made on 02.05.2016. We also find that IIT, Bhubaneswar has engaged the applicant as a “Project Management Consultant”. In order to execute the project, the applicant has engaged contractors through different competitive tender process. The applicant has awarded different types of works to various agencies/contractors with categorical mention of individual works to be carried out by them with specific remuneration for each such work. Hence, it is a supply having distinctly identifiable components with distinct value attributable to each of the components - Mere fact that a number of tasks have been entrusted to the applicant would not make it entitled to be categorized as ‘composite supply’ particularly in terms of Section 2(30) of the CGST Act, 2017.
Legal status of IIT, Bhubaneswar - Governmental Authority’ or a ‘Government Entity’ ? - HELD THAT:- Government of India, Ministry of Human Resource Development is exercising full control over the activities of IITs all over the country. Needless to say that in the given circumstances IIT, Bhubaneswar 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 No. 11/2017-C.T. (R). It therefore leaves no doubt that IIT, Bhubaneswar is a Government Entity for the purpose of provisions of CGST Act, 2017 and OGST Act, 2017.
Sr. No. 3(vi) to the Notification No. 11/2017-C.T. (Rate) - HELD THAT:- The applicant has been engaged as a PMC to execute the contract for carrying out different specified works for IIT, Bhubaneswar which includes erection, commissioning, installation, etc. We also find that for executing the project, the applicant shall be paid agency charges of 5.5% in addition to the actual cost of work. The agency charges are type of commission or remuneration for rendering ‘consulting service’ to IIT, Bhubaneswar. We also find it necessary to place on record that there are certain items of supply made to IIT , Bhubaneswar including, but not limited to, ‘supply of consulting services’ which definitely do not find place in the ambit of Sr. No. 3(vi) to the Notification No. 11/2017-C.T. (Rate).Needless to mention that such supply shall not qualify for exemption as envisaged under Sr. No. 3 (vi) to the Notification No. 11/2017-C.T. (Rate), inasmuch as the said supply is a “ Pure Service” and not in the nature of works contract service - works entrusted to the Applicant namely construction of 800 seater boys hostel, 200 seater girls hostel, Construction of lecture hall complex, Construction of Student Activity Centre, Dispensary, Construction of 1000 capacity Auditorium, Construction of Central Research & Instrumentation facilities, Construction of Central Workshop, Play grounds are within the purview of sub-clause (b) of Clause (vi) of S1 No.3 (heading 9954) of Notification No. 11/2017-C.T. (Rate) under CGST Act and corresponding notification under OGST Act, 2017, and hence merit exemption where the applicable tax rate is 12%.
Construction of Directors Bungalow and construction of staff/faculty quarters - HELD THAT:- The civil construction of residential quarters is not the primary work entrusted to IIT, Bhubaneswar. Accordingly, we fail to understand as to why the benefit of concessional rate @ 12% GST should be available to this particular works contract awarded to the applicant? The intention of the Legislature has been to allow concessional rate to such work which has been entrusted to a Government entity for public interest in general, but extrapolating and extending this concessional rate to any or all activities of IIT, Bhubaneswar will not only be unwarranted but also defeat the very purpose of concessional rate. Hence, we hold that construction of Directors Bungalow and construction of staff/faculty quarters is out of the purview of exemption provided under Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 and would attract GST @ 18%.
Thus, the supply of goods and/or services or both which squarely fall within the ambit of scope of work entrusted to IIT, Bhubaneswar by Government of India shall be entitled for concessional rate under Sr. No. 3(vi) to Notification No. 11/2017-C.T. (R). Accordingly, each and every supply under the subject contract shall be treated separately for determining the rate of tax under the CGST Act, 2017 read with the provisions of GST Tariff and respective exemption notifications.
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2020 (12) TMI 898 - KERALA HIGH COURT
Validity of attachment proceedings - huge amount is due from the A.K.G Memorial Labour Contract Society Limited for serious violations under the Central GST Act, 2017 including non- remittance and misappropriation of huge amounts of Goods and Service Tax - Section 83 of CGST Act, 2017 - HELD THAT:- The learned Standing Counsel for the 1st respondent also submits that the 1st respondent has already made the payment on the basis of the direction issued by the District Labour Officer for the period from July, 2020 to October, 2020.
The petitioner cannot be granted any relief in this writ petition - Petition dismissed.
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2020 (12) TMI 897 - TRIPURA HIGH COURT
Detention of goods alongwith vehicle - E-Way bill had expired - case of the petitioner is that though the authorities were well aware about the fact that the petitioner is the owner of the goods, no notice to the petitioner was issued - principles of natural justice - HELD THAT:- In view of the fact that the petitioner did not have full opportunity to represent the case before the assessing officer, let the petitioner be given such opportunity. For such purpose, without expressing any opinion on the merits and demerits of the case, impugned order dated 09.12.2020 is set aside. The petitioner shall not insist on a separate notice being issued and appear before the said authority and file the objections within a period of two weeks from today. The assessing officer shall pass a fresh order after giving opportunity of hearing to the petitioner and considering the representation that may be made. No useful purpose would be served in detaining the vehicle and the goods till the fresh order is passed.
The respondents shall release the vehicle and the goods upon the petitioner giving Bank guarantee of 25% of the said sum of ₹ 12,48,530/- and furnishing further Bank guarantee/immovable security for the remaining sum to the satisfaction of the assessing officer. As soon as the petitioner fulfills these conditions the vehicle and the goods shall be released - Petition disposed off.
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2020 (12) TMI 896 - GUJARAT HIGH COURT
Validity of Sub-rule (4) of the Rule 36 of the GST Rules - It is argued that the Subrule (4) of the Rule 36 of the Rules speaks to restrict the ITC to a buyer of goods of services on the basis of the details of the outward supply furnished by the supplier of the services of goods or on the basis of the common portal - HELD THAT:- Let Notice be issued to the respondents, returnable on 12.02.2021. The respondents shall be served by email over and above the regular service through the Court.
Application disposed off.
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2020 (12) TMI 895 - PATNA HIGH COURT
Permission for withdrawal of petition - Best Judgement Assessment - petitioner defaulted in filing return for the taxable period in form GSTR-3B for a month in financial year 2019-20 - HELD THAT:- Permission granted.
Petitions stand dismissed as withdrawn.
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2020 (12) TMI 894 - GUJARAT HIGH COURT
Detention of goods alongwith vehicle - some mismatch between the invoice and the e-way bill inasmuch as the invoice had been issued by the writ applicant situated at Bhavnagar where the place of dispatch mentioned in the e-way bill is shown to be Jalna at State of Maharashtra - HELD THAT:- Mr. Antani, the learned AGP has fairly pointed out that he has discussed the matter with the officer concerned and he has been instructed to make a statement before the court that the inquiry conducted so far has revealed that there has been no contravention of any of the provisions of the Act or the Rules. Mr. Antani further submits that, as there was some confusion, the authority concerned thought fit to detain the goods under Section 129 of the Act. However, after thorough inquiry, the authority itself has come to the conclusion that it is no longer necessary to detain the goods and the vehicle.
This writ application stands allowed - The respondent No.2 shall release the goods as well as the vehicle at the earliest.
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2020 (12) TMI 893 - ORISSA HIGH COURT
Interest liability on Net cash liability - section 50(1) read with Section 75 (12) and 79 of CGST Act, 2017 - HELD THAT:- The writ petition stands disposed of granting liberty to the petitioner to file a detailed representation before opposite party no.5- Superintendent, Central Excise & GST, Bhawanipatna Range, Bhawanipatna within a period of three weeks from today. If such representation is filed, the same shall be disposed of by passing a reasoned order, in accordance with law as well as the decision of the GST Council.
Petition disposed off.
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2020 (12) TMI 892 - GUJARAT HIGH COURT
Provisional release of detained goods - legality and validity of the very same action of issuing notice in Form GST MOV-10 under Section 130 of the Act on manifold grounds - Section 67(6) of GST Act - HELD THAT:- We should not interfere at this point of time with the adjudication undertaken pursuant to the notice in Form GST MOV-10. Ultimately, if final order of confiscation is passed under Section 130, it shall be open for the writ applicant to avail appropriate legal remedy available to him. However, we are of the view that the goods and the vehicle should not be allowed to remain under detention for an indefinite period of time. Mr. Sheth, the learned counsel appearing for the writ applicant submitted that his client would deposit an amount of ₹ 89,000/- towards the tax plus penalty plus interest, and upon deposit of such amount, the vehicle and the goods may be ordered to be released.
The writ applicant is directed to deposit an amount of ₹ 89,000/- with the respondent No.2 and upon deposit of such amount, the respondent No.2 shall, at the earliest, release the vehicle and the goods.
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2020 (12) TMI 891 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of flat - Respondent had denied the benefit of ITC to the Applicant and other buyers amounting to ₹ 5,83,593/-, pertaining to the period w.e.f. 01.07.2017 to 31.12.2018 - violation of the provisions of Section 171 (1) of CGST Act - Penalty - HELD THAT:- It has been revealed that the Respondent had not passed on the benefit of additional Input tax Credit (ITC) to the above Applicant No. 1 as well as other homebuyers who had purchased them in his Project “Navkar Darshan for the period from 01.07.2017 to 31.12.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017.
Penalty - HELD THAT:- It is also revealed from the perusal of the CGST Act and the Rules framed under it that the Central Government vide Notification No. 01/2020-Central Tax dated 01.01.2020 has implemented the provisions of the Finance (No. 2) Act, 2019 from 01.01.2020 vide which sub-section 171 (3A) was added in Section 171 of the CGST Act, 2017 and penalty was proposed to be imposed in the case of violation of Section 171 (1) of the CGST Act, 2017 - Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.12.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 15.01.2020 issued to the Respondent for imposition of penalty under Section 177 (3A) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.
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2020 (12) TMI 890 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of Flat - Respondent had denied the benefit of ITC to the Applicant and other buyers amounting to ₹ 4,79,04,342/-, pertaining to the period w.e.f. 01.07.2017 to 30.09.2018 - violation of the provisions of Section 171 (1) of the CGST Act - HELD THAT:- It has been revealed that the Respondent had not passed on the benefit of additional Input tax Credit (ITC) to the above Applicant No. 1 as well as other homebuyers who had purchased them in his Project “Fusion Homes” for the period from 01.07.2017 to 30.09.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017.
Penalty - HELD THAT:- It is revealed from the perusal of the CGST Act and the Rules framed under it that the Central Government vide Notification No. 01/2020-Central Tax dated 01.01.2020 has implemented the provisions of the Finance (No. 2) Act, 2019 from 01.01.2020 vide which sub-section 171 (3A) was added in Section 171 of the CGST Act, 2017 and penalty was proposed to be imposed in the case of violation of Section 171 (1) of the CGST Act, 2017 - Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.09.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated 21.01.2020 issued to the Respondent for imposition of penalty under Section 177 (3A) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped.
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2020 (12) TMI 889 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - restaurant service supplied by the Respondent - allegation that the Respondent had increased the base prices of his products and had not passed on the benefit of reduction in the GST rate from 18% to 5% w.e.f. 15.11.2017 vide Notification No.46/2017-Central Tax (Rate) dated 14.11.2017 by way of commensurate reduction in prices - contravention of Section 171 of the Central Goods and Services Tax Act, 2017 - penalty - HELD THAT:- It is revealed from the record that the Respondent is running a restaurant as a franchisee of M/s Subway India Private Limited in Maharashtra and is supplying various food products to the customers. It is also revealed from the plain reading of Section 171 (1) of he CGST Act, 2017 that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the record that there has been a reduction in the rate of tax from 18% to 5% w.e.f. 15.11.2017, on the restaurant service being supplied by the Respondent, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 without the benefit of ITC. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the present investigation has been carried out w.e.f. 15.11.2017 to 31.03.2019.
It is also evident that the Respondent has been dealing with a total of 280 items during the period from 15.11.2017 to 31.03.2019. Upon comparing the average selling prices as per the details submitted by the Respondent for the period from 01.07.2017 to 14.11.2017 and the actual selling prices post rate reduction, i.e. w.e.f. 15.11.2017 to 31.03.2019 the DGAP has reported that the GST rate of 5% has been charged w.e.f. 15.11.2017 however the base prices of 170 products have been increased more than their commensurate prices w.e.f. 15.11.2017 which established that because of the increase in the base prices the cum-tax prices paid by the consumers were not reduced commensurately, despite the reduction in the GST rate.
As per the provisions of Sec 171 (1) read with Rule 133 (1) the profiteered amount is determined as ₹ 6,66,700/- as has been computed in Annexure-12 of the DGAP's Report dated 29.01.2020. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined, are not identifiable, the Respondent is directed to deposit an amount of ₹ 6,66,700/- in two equal parts of ₹ 3,33,350/- each in the Central Consumer Welfare Fund and the Maharashtra State Consumer Welfare Fund as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of ₹ 6,66,700/- shall be deposited, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioners.
This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the CWFs of the Central and the Maharashtra State Government. A report in compliance of this order shall be submitted to this Authority by the concerned Commissioner within a period of 4 months from the date of receipt of this order.
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2020 (12) TMI 888 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of flat - allegation that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in price - contravention of provisions of Section 171 of the CGST Act, 2017 - Penalty - HELD THAT:- The investigation has correctly established that the Respondent has violated provisions of Section 171 (1) of CGST Act 2017 since the benefit derived by the Respondent on account of additional ITC in the post-GST period from 01.07.2017 to 30.06.2019 was not passed on by him to his homebuyers/ recipients commensurately as required under Section 171 of the CGST Act.
The contention of the Respondent is dismissed that the excess (more than commensurate) benefit amounting to ₹ 3,91,714/- passed on by him to 716 homebuyers/ recipients be adjusted against the 'less than commensurate' benefit passed on to the other 20 homebuyers/recipients because the provisions of Section 171 of the CGST Act, 2017 apply to each supply which implies that each homebuyer/ recipient is entitled to the commensurate benefit due to him in respect of the residential unit supplied to him. The adjustment sought by the Respondent, if agreed, would result in depriving the aforementioned 20 homebuyers of the benefit which would be against the legislative intent of Section 171 (1) of the CGST Act, 2017 and is hence not acceptable.
Whereas the Respondent was required to pass on the ITC benefit of ₹ 2,71,11,917/- (including GST), in respect of the period July 2017 to June 2019, in terms of provisions of Section 171 of the CGST Act, 2017, he has only passed on ₹ 2,67,88,794/- (including GST) to his homebuyers and that the remaining amount of ITC benefit that remains to be passed on to 20 homebuyers (as detailed in Table D of this Order amounts to ₹ 7,14,837/- Hence we take the view that in compliance with the provisions of Section 171 of the CGST Act, 2017, the Respondent is required to pass on ITC benefit amounting to ₹ 7,14,837/- (inclusive of GST) to the twenty homebuyers - Respondent is thus directed to pass on the above amount to the said homebuyers within a period of three months of this Order.
Demand of interest - HELD THAT:- It is also revealed from the submissions of the Respondent that he has not passed on interest @18% on the profiteered amount to his homebuyers, including Applicant No. 1 and the 20 homebuyers who are yet to receive the commensurate benefit. Hence, in line with the provisions of Section 171 (1) of the CGST Act, 2017 read with Rule 133 (3) (b) of the CGST Rules, 2017, we order that the applicable interest shall be paid by the Respondent to his homebuyers from the date of receipt of the additional amount of consideration in the hands of the Respondent till the amount is paid to each buyer, as the Respondent has used this amount in his business. Accordingly, the DGAP is directed to ensure that the interest, at the applicable rate, is paid to the eligible home buyers and submit his report confirming payment of the interest within three months of this Order.
Application disposed off.
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2020 (12) TMI 837 - APPELLATE AUTHORITY FOR ADVANCE RULING, ODISHA
Benefit of exemption - Training programme - Services provided by them under the category of Information and Communication Technology)ICT @ School Project - Challenge to AAR decision - Applicability of Entry No. 72 of Notification No.12/2017-Central Tax(Rate), dated 28.06.2017, read with Entry No. 72 of Notification bearing SRO No. 306/2017-Finance Department, Government of Odisha - HELD THAT:- As per notification, it is noticed that the following three pre-requisite are to be satisfied in order for the supply to qualify for the notified exemption, under Entry No.72 of Notification No.12/2017-Central Tax(Rate):
(a) The supply has to be a supply of Service provided to the Central Government, State Government or Union Territory Administration;
(b) Such service must be under any training programme;
(c) The total expenditure of such service is borne by the Central Government, State Government or Union Territory Administration.
In terms of Section 2(53) of the CGST Act, 2017 and in terms of Section 2(53) of the SGST Act, 2017, “Government” means the Central Government or Government of Odisha respectively.
There is no denying of the fact that the Appellant is providing service to Odisha Knowledge Corporation Limited (here-in-after referred to as “OKCL”) which is a body corporate. The Appellant has failed to produce any documentary evidence as to how the provision of service to OKCL qualifies to be a provision of service to the Central Government, State Government or Union Territory Administration - The argument put forth by the Appellant that they are the implementing agency on behalf of the Government is not correct, as they are not providing any services to Government.
In terms of para-8 of the agreement between OKCL and the Appellant, it is noticed that the Appellant is required to supply and install the specified goods and provide specified services in the ICT Labs of the Govt. and Govt. Schools located in the specified zones. Therefore, it is evident that the Appellant made supplies to OKCL which is a body corporate and registered under the Companies Act, 1956 as a Company.
Appellant have clearly admitted that the funds for implementation of project are being provided by OMSM to OKCL, for further release to the Appellant.. The Appellant has cited the agreement copy of OMSM and OKCL, where it is provided that if OKCL fails to discharge the obligation under the agreement, OMSM would discharge all the responsibilities. The agreement cited between OMSM and OKCL is not relevant to the present issue - The Appellant themselves have admitted that OKCL will release the money for the supplies made by the Appellant. The contention/pleading of the Appellant that they merely act as an implementing agency on behalf of OMSM, is factually not correct.
The consideration received by the Appellant is in respect of provision of supplies, taxability of which has been discussed in the foregoing paragraphs. Moreover, under Schedule-II (1) (c) of the CGST Act, 2017/SGST Act, 2017, it is clearly defined that any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods - On plain reading of the job carried out by the appellant includes supply of goods, installation & commissioning of hardware, repair maintenance equipment and computer education service. Under 4.1 of the agreement, it is clearly mentioned that the payment is for goods and service. But the Appellant claims that they have rendered only computer training service, it is not correct at all.
The consideration received by the Appellant in respect of provision of supply could not be treated as the consideration for only service rendered. Moreover, under Schedule II of Para 1(c) of the CGST Act, 2017/SGST Act, 2017, it is clearly defined that any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods.
Having held that the Appellant have failed to meet the primary requirement of the conditions of the notification i.e., the supply has to be a supply of Service provided to the Central Government, State Government or Union Territory Administration; we refrain from discussing the other aspects of the notification and pass the following order.
The decision of Advance Ruling passed by the Authority for Advance Ruling, Odisha, made under Section 98 of the Goods and Services Act, 2017, is upheld.
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2020 (12) TMI 836 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Supply of services or not - supply of electric transformers, static converters, electric wires/ cables for transmission of electricity, equipment for spark ignition, installation and commissioning services - Applicant's holding company, desires to join the 'develoPPP.de programme' (said program) run by the German Federal Ministry for Economic Cooperation and Development. Pretti GmbH desires to provide financial assistance of 540,000 Euro to the Applicant under the said program - financial assistance to be received by the Applicant is a consideration for supply or not - Section 7 of the Central Goods and Services Tax Act, 2017 / Maharashtra Goods and Services Tax Act, 2017 - exempted supply or on taxable supply - Zero Rated Supply or not - export of services or not - reversal of input tax credit - classifiable under SAC 9997 or otherwise?.
Whether the financial assistance to be received by the Applicant is a “consideration for supply and whether their activity is covered under the meaning of supply of services in terms of Section 7 of the GST Act? - HELD THAT:- We agree with the applicant that, the charging event under GST law is supply of goods or services for consideration. Any payment will be treated as 'consideration' only if it is made against supply of goods and services. We will therefore discuss, whether the activities undertaken by applicant, in terms of the service contract, constitutes a supply' or not - This argument of the applicant that, the financial assistance to be received, is a mere transaction in money and not against supply of goods or services, is not acceptable. The `develoPPP.de project' intends to promote investments of German companies in India. Accordingly, Prettl Gmbh has asked the applicant to undertake some activities for which financial assistance is provided. Applicant contends that, there is no supply flowing from them to Prettl Gmbh. We do not agree with this view. The activities undertaken by the applicant are in pursuance of a service agreement with Prettl Gmbh and the amount received/to be received is also in pursuance of the same agreement. Further, activities undertaken by the applicant are to promote the investments of German companies in India and are undertaken only on the directions of Prettl Gmbh.
In the entire agreement it is seen that, the said agreement is for provision of services. Prettl Gmbh is treated as a Service Recipient and the applicant is treated as a service provider. We also find, from the agreement that, applicant has agreed to provide certain services for which they will be paid some amounts. The applicant is terming these amounts as financial assistance whereas it is very clear from the agreement that the said amounts must be treated as consideration since they are being given to the applicant in lieu of certain supply of services to be effected by the applicant on the directions of Prettl Gmbh, i.e. the holding company - Hence, as per the agreement, applicant has consented/agreed to do some acts and as per clause 5 of Schedule II appended to GST Act, 'an agreement to do an act' will be considered as supply of services. Hence in the subject case, we hold that the applicant is rendering supply of services for which it is receiving consideration in the form of “financial assistance”.
We do not agree with the jurisdictional office that, there is no supply in the subject case.
If the above activity is considered as supply of service, then whether the same is classifiable under SAC 9997 as other services nowhere else classified under Sr. no 35 of the Notification-11/2017- C.T. (Rate) dated 28th June 2017 / Sr. no 35 of the Notification-11/2017-S.T. (Rate) dated 29th June 2017 / sr. no 35 of the Notification 8/2017-I.T. (Rate) dated 28th June 2017? - HELD THAT:- In the subject case it cannot be said that the applicant is involved in education per se since the element of normal schooling is absent. Further, the Applicant has also agreed that it is not imparting any classroom training, knowledge & lessons & thereby not running any educational institution & also not issuing any degree or diploma certificate to students & beneficiaries. In fact, the applicant has submitted that they are not providing any Education services to anyone - the entire activities undertaken by the applicant are only as per the impugned contract, implying that, in the absence of such contract, the applicant would not undertake the said activities. Hence it is clear that, the applicant is obliged to perform the subject activity, i.e. to do an act, under the terms of the impugned agreement. We do not agree with the submissions made by the applicant with respect to classification of services rendered by applicant - the applicant has agreed to do acts under the impugned contract and therefore their supply is to be classified under SAC Heading 999792 which pertains to “Agreeing to do an Act”.
Whether the said activity, if considered as supply of service, is covered as “Zero Rated Supply and qualifies as “export of service under the provisions of IGST Act, 2017 and can be exported without payment of IGST? - HELD THAT:- The clause (e) of Section 97 (2) of the CGST Act, 2017 has got a very wide connotation and would cover all sorts of transactions, where the Advance Ruling on the questions related to the determination of the liability to pay tax can be sought by the Applicant - The subject transaction satisfies the conditions mentioned in clauses (i), (ii), (iv) and (v) of Section 2 (6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act). However to be considered as Export of Services as per the GST Laws clause number (iii) with respect to Place of Supply of Services should be outside India. Whether the subject transaction is taxable or otherwise can be decided only by discussing the place of supply.
Place of supply - HELD THAT:- The impugned Service Contract requires the applicant to; construct a training center; implement training measures for trainers, apprentices, unskilled workers, students or college graduates as well as integration of teaching content at four educational institutes; train vocational students from the Industrial Training Institute Pune and Don Bosco; train unskilled workers to become mechanics, electricians, technicians; etc.
As per Section 13 (5) of the IGST Act, the place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held - the entire gamut of supply as per the agreement between the applicant and Prettl GMBH, will be performed in India and therefore we have no hesitation in holding that the place of supply, being event based in the subject case, is in India. The subject transaction does not satisfy the condition mentioned in clauses (iii) of Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) and therefore the said transaction cannot be considered as Export of Services under the GST Laws.
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2020 (12) TMI 835 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Manpower Supply services - providing of staff to Government, to carry out work entrusted to it as per the 12th Schedule to Article 243W of the Indian Constitution - Services covered under Clause 1 & 2 of Twelfth Schedule of Article 243W? or not - benefit of Exemption Notification No. 12/2017 dated 28th June, 2017 (Entry No. 3 of Exemption Notification) - pure labour services or not - Government Works Contract Services or not - rate of GST.
HELD THAT:- Applicant has received work orders for supply of goods or services or both, from the Municipal Corporation of Amravati, Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) and Maharashtra Jeevan Pradhikaran (Water Supply) for the period 2019-20 - On perusal of the work orders, it is seen that applicant is only supplying manpower to Municipal Corporation and Maharashtra Jeevan Pradhikaran (water supply) whereas in respect of MSEDCL, in some cases they are supplying only manpower whereas in other cases, in addition to supply of manpower, they are supplying materials as well. Thus, in most cases pure services, in the form of manpower supply, are rendered by the applicant and only in a couple of cases, there is an element of composite supply of goods and services being provided.
Whether their subject activities are covered under “Clause 1 & 2” of 12th Schedule of Article 243W of the Indian Constitution? - HELD THAT:- In the subject case, as per the work orders submitted by the applicant we find that, for the services to fall under Article 243W of the Constitution, the said services should be supplied to Municipalities as and when outsourced to the applicant. Out of the three recipients mentioned by the applicant we find that only the Amravati Municipal Corporation, Amravati (AMC), is a municipality, established and set up as per the provisions of Article 243 P of Constitution of India and they are also performing the functions entrusted under Article 243W in public interest. Applicant is specially supplying services like providing manpower for cleaning, providing manpower for collecting of rent from hawkers and providing manpower for collecting of parking fees to Amravati Municipal Corporation, which satisfies the definition of a “local authority” as provided under Section 2 (69) (b) of the CGST Act.
MSEDCL is not a municipality. It is an electricity distributing company and therefore supply of goods and services to MSEDCL cannot be considered as related falling under Clause 1 & 2 of Article 243W of the Constitution. Similarly, since Maharashtra Jeevan Pradhikaran (water supply) is not a municipality, supply of services to it, by the applicant, are also not related to Urban planning including town planning or Planning of land- use and construction of buildings. Therefore the said supply does not fall under Clause 1 & 2 of Article 243W of the Constitution - subject activities undertaken by the applicant will not fall under Clause 1 & 2 of the 12th Schedule to Article 243 W of the Constitution.
Whether the services provided by it falls under Entry No. 3 of Exemption Notification No. 12/2017 dated 28th June, 2017 as amended from time to time as the services are in the nature of pure labour services? - HELD THAT:- Maharashtra State Electricity Board (or MSEB), a state-owned electricity regulation board operating within the State of Maharashtra, was formed on 20 June 1960 under Section 5 of the Electricity (Supply) Act, 1948. In accordance with Electricity Act 2003 of the Government of India, the Maharashtra State Electricity Board was restructured into 4 companies in 2005, one of which was MSEDCL, a public sector undertaking (PSU) controlled by the Government of Maharashtra. MSEDCL distributes electricity to the entire Maharashtra state except some parts of Mumbai city - MSEDCL is constituted and established by the State Government of Maharashtra to carry out the function of distribution of electricity and is therefore clearly covered under the definition of 'Government Entity'.
Whether Maharashtra Jeevan Pradhikaran falls under the definition of Government Entity? - HELD THAT:- The Principal responsibilities of Maharashtra Jeevan Pradhikaran according to MWSSB Act 1976 are : Planning, designing and implementation of water supply and sewerage schemes including facilitation for necessary financial provisions, As directed by the Government of Maharashtra (Government of Maharashtra), taking over any water supply as well as sewerage scheme for operation and maintenance, To establish service level bench marks for water supply and sewerage sector, To extend relevant support, regarding water sector, to Government of Maharashtra as well as Local Self Governments, To support Government of Maharashtra to prepare Annual Plan and to establish / modify tariff / tax / cess structure in water sector. Therefore, the Maharashtra Jeevan Pradhikaran is also under the control of the Government of Maharashtra and can be considered as a ‘Government Entity'.
Whether the supply of Pure services by the applicant can be considered as any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution? - HELD THAT:- Providing manpower for cleaning of public washrooms and restrooms, if provided Municipal Corporations, will be covered under Public health, sanitation conservancy and solid waste management /Public amenities including street lighting, parking lots, bus stops and public conveniences since these functions are entrusted to the Municipalities under Article 243 W of the Constitution. Since it is not forthcoming from the applicant's submissions that, they are providing such services of providing staff for cleaning of public washrooms/restrooms to the Amravati Municipal Corporation, the applicant will not be eligible for exemption under Entry No. 3 of Exemption Notification No. 12/2017 dated 28.06.2017.
Whether the services provided by it fall within the Government Works Contract Services on which GST rate was amended to 12% in the Notification No. 20/2017? - HELD THAT:- In only two situations, the applicant is supplying goods as well as services to MSEDCL. Firstly, it provides labour and material for the supply, test, transport, construction, erection, testing and commissioning of HVDS (high voltage distribution systems) Distribution Transformer Centres of varying capacities, release of Agricultural Pumps, Residential and Street light connections Manpower for Setting up new connections. Secondly the applicant provides labour and material for electrical installation in government staff quarters - the composite supply undertaken by the applicant as mentioned in para 5.7.3 above does not fall in any of the categories of (iii) (iv) and (v) of Notification no. 20/2017 - C.T. (Rate), as mentioned by them because there is no Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017. In the subject case as seen from their submissions in respect of the supply carried out by the applicant, there is no “works contract” since there is no contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Therefore the question of availing the reduced rate of 12% GST does not arise at all.
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2020 (12) TMI 833 - GUJARAT HIGHC COURT
Constitutional validity of sub-section (4) of the Section 16 of the Central Goods and Services Tax Acts, 2017 - Vires of Articles 14, 19 and 300A respectively of the Constitution of India - HELD THAT:- Let Notice be issued to the respondents, returnable on 24.02.2021 - Notice shall also be issued to the Attorney General of India.
Prima facie, it appears that the impugned recovery order / Notice dated 20.10.2020 is without any show-cause or assessment proceedings. Till the next date of hearing, there shall not be any coercive recovery proceedings towards the dues pursuant to the recovery order dated 20.10.2020 - Application disposed off.
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2020 (12) TMI 828 - GUJARAT HIGH COURT
Cancellation of GST registration - Rule 22(1) of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- As the writ-applicant was not in receipt of any attachment along with the show-cause notice, vide letter dated 5th February 2020, he requested the authority to supply the attachment sheet to the show-cause notice dated 4th February 2020 - It appears that despite the specific request for furnishing the attached sheet, the request was not paid heed to, and ultimately, the writ-applicant had to file his reply dated 13th February 2020 to the show-cause notice dated 4th February 2020.
Mr.Pandya, the learned counsel appearing for the writ-applicant has raised manifold contentions questioning the legality and validity of the very action on the part of the respondents in initiating the proceedings and also the final order passed cancelling the registration.
We are inclined to quash the impugned order dated 25th February 2020 passed by the Commercial Tax Officer on the short ground that the same is a non-speaking order passed without any application of mind. It is very sad to note the manner in which the show-cause notices came to be issued - The show-cause notices, are absolutely bereft of any material particulars or information, and it is but obvious that in the absence of the same, how does the authority expect the writ-applicant to respond to the same in an effective and meaningful manner.
The impugned order passed by the respondent no.3 dated 25th February 2020 (Annexure-A to this petition) is hereby quashed and set-aside - Application allowed - decided in favor of appellant.
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