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GST - Case Laws
Showing 21 to 40 of 1001 Records
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2018 (12) TMI 1602
Profiteering - PA Ceiling Speaker BS- 6083T - benefit of reduction in the rate of tax not passed - contravention of the provisions of Section 171 of the CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that while there was reduction in the rate of tax on the above products from 28% to 18% w.e.f. 15.11.2017, vide Notification no. 41/2017-central Tax (Rate) dated 14.1 1.2017, but the base prices (excluding tax) of both the above products had remained the same and hence the allegation of profiteering is not established.
The Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the above Applicants - application dismissed
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2018 (12) TMI 1601
Profiteering - benefit of GST at the time of implementation of the GST not passed on - contravention of the provisions of Section 171 of CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017. There is also no increase in the per unit base price (excluding tax) of the above product and therefore the allegation of profiteering is not established.
Though the rate of tax has been reduced from 28% to 18% w.e.f. 14.11.2017 the Kerala Screening Committee has failed to produce any invoice and has not examined any documents to establish that the benefit of tax reduction has not been passed on by the Respondent to the recipient hence DGAP has rightly observed that no supporting documents or invoices of the product ‘Mirror Series Tiles’ for the period post 15.11.2017 have been either examined or presented before the Standing Committee. Hence the allegation that the benefit of rate reduction has not been passed on is not sustained.
Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 either on implementation of the GST w.e.f. 01.07.2017 or w.e.f. 14.11.2017 after the introduction of GST rate reduction - application dismissed.
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2018 (12) TMI 1600
Profiteering - supply of “Handloom Design-King Supreme Lungi” - benefit of reduction in the rate of tax at the time of implementation of GST w.e.f 01.07.2017 not passed on - contravention of the provisions of Section 171 of Central Goods and Service Tax Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017, hence the anti-profiteering provisions contained in Section 171(1) of the Central Goods and Services Tax Act, 2017 are not attracted.
The Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant - application dismissed.
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2018 (12) TMI 1599
Profiteering - manufacture and supply of consumer goods comprising of four major categories, viz. Home Care, Personal Care, Foods and Refreshments - Respondent had not reduced the Maximum Retail Prices (MRPs) of the products which were being sold by him although GST rates were reduced - it is also alleged that the Respondent had increased the base prices of his products, so that the MRPs continued to be the same even after reduction in the rates of GST - recovery of excess Input Tax Credit (ITC) on the stocks of his brands lying with them.
Held that:- It is established that the increase in his profits was entirely due to the increase in the base prices made by the Respondent through which he had denied the benefit of tax reduction to his customers and appropriated the tax benefits himself. Hence, it is established beyond any iota of doubt that the Respondent has committed breach of the provisions of Section 171 of the CGST Act, 2017 by resorting to profiteering.
The basic aim is to ensure that both the benefits of reduction in the rate of tax and ITC are passed on to the consumers by commensurate reduction in the prices. As per the provisions of the above Rule the Authority has power to 'determine' and not 'prescribe' the methodology. During the course of the present proceedings the Respondent was repeatedly asked to suggest alternate methodology if he was not satisfied with the computation of the profiteered amount made by the DGAP but the Respondent has failed to do so. The Respondent has also calculated the profiteered amount himself and deposited the same in the CWF which clearly shows that he was aware of the concepts of profiteering, commensurate and reduction in the prices. Therefore, all the objections raised by him in this behalf are frivolous and cannot be accepted.
The Respondent has also referred to the dictionary meaning of profiteering and claimed that he had not resorted to profiteering. However, it is quite clear from the record that he had illegally and wrongly increased the base prices of the products on which the rates of tax had been reduced w.e.f. 15.11.2017, the day from which this reduction had come in to force. Therefore, it is established that he had earned disproportionately large and grossly unfair profit by exploiting an unusual situation in which the rates of tax had been reduced and hence his act squarely falls within the definition of profiteering being unethical, immoral, illegal, malafide and contumacious.
It is apparent from the record that the Respondent had tried to mislead the authorities by making false claims as he had acted quite contrary to the claims which were made by him in his above letters. Instead of passing on the benefits he had increased the base prices, had compelled the customers to pay more price than what they were legally required to pay, had forced them to pay additional GST on the increased prices and also earned extra margins on the enhanced prices. He had even illegally compelled his RSS to deposit the ITC which they could have legally claimed due to reduction in the rates of tax which would have resulted in commensurate reduction in the prices and therefore, all the claims of having passed on the benefit of tax reduction sincerely and faithfully made by the Respondent are false and malafide.
Admissibility of TRAN-2 Credit as deduction - The relevant provision under which the transitional credit was claimed as TRAN-2 credit in this particular case is Section 140 (3) of the Act - Held that:- The fact that the Respondent has availed the TRAN-2 credit of ₹ 76.06 Crores is not in dispute as he has failed to produce any evidence to prove, either before DGAP or before the Authority that this benefit of Tran-2 credit has been passed on by way of reduced prices. Moreover, the Respondent, on page 23, point (d) of his written submissions dated 14.09 2018 has mentioned that the law did not mandate passing of TRAN-2 credit, which is not correct and hence his contention cannot be accepted. In the light of the above facts, it can be concluded that the Respondent has not passed on the benefit of TRAN-2 credit to any of his recipients, which under Section 140 (3) read with Section 171 of the Act, he was required to pass on. Therefore, the plea of the Respondent to claim this amount of ₹ 76.06 Crores of Tran-2 credit as a deduction from the profiteered amount is rejected.
Admissibility of grammage benefit as deduction - Grammage benefit given more than the GST rate reduction - Held that:- The Authority is of the view that Section 171 of the CGST Act, 2017, puts the onus of passage of any benefit of the GST rate reductions or ITC to the recipient on the supplier. The keyword to be emphasised here is "commensurate reduction". The law expects that commensurate reduction to the extent of the rate reductions should be given by the Respondent. Any greater reduction in prices is entirely a business call taken by the Respondent well within his right and hence there is no ground to compensate him on this ground - The amount of profiteering has to be calculated by keeping the recipient at the centre. This implies that one particular recipient may have bought one product from the Respondent at a price which he was entitled to pay when the rates of tax were reduced but simultaneously there is another recipient who has paid more than what he was supposed to pay for some another product of the Respondent. The additional benefit given to one recipient cannot be offset with the denial of benefit to another recipient, as this is not the spirit of the law - the Respondent's claim for deduction of ₹ 39.08 Crores on account of the more benefit given to the customers from the profiteered amount devoid of merit and cannot be accepted.
An amount of ₹ 68.77 Crores can be allowed to be deducted from the profiteered amount on account of the benefit which has been passed on by the Respondent in the shape of additional grammage as per the following table however the balance amount claimed by him cannot be allowed. Therefore, it is made clear that this deduction has been given to the Respondent due to the fact that the anti-profiteering measures have been incorporated in the tax laws for the first time and he had tried to pass on the benefit of tax reductions by increasing the quantity of his products. However, in future in case there is any reduction in the rate of tax or benefit of ITC is made available the same shall be passed on by him in the shape of commensurate reduction in the prices as per the provisions of Section 171 of the above Act and in case it is not possible to do so the amount so realised shall be deposited in the CWF.
Area based fiscal incentives denied - Held that:- The DGAP is right in his assessment that there was no loss in absolute terms to the Respondent, since he was still eligible to get the same proportionate refund of actual CGST/IGST paid in cash as was available to him prior to the reduction in the rates of GST. Moreover, there exists no direct correlation between the MRP of the product (which is same over all-India) and the area based exemption benefit. The claim of the Respondent to the extent of ₹ 45.31 Crores is not justified in as much as there is no evidence to show that the products manufactured with these concessions were sold at a lower rate. Also, there is no evidence to show that these products are different from the products manufactured in other areas and were sold at the old MRPs. The products whether manufactured with concessions or without concessions are being sold at the same price. Admittedly, these prices were not reduced inspite of rate reductions - claim of the Respondent is not legally sustainable and is thereby rejected.
Reimbursement to the Modern Trade - Held that:- It has been repeatedly observed by the Authority that the Respondent has not been able to appreciate the fact that the idea behind including the anti-profiteering mechanism in the GST laws, is solely to protect the interest of the consumers by preventing the supplier from unjustly enriching himself at the cost of the end-consumer. His claim that he had provided various discounts to the MT dealers to further pass on the benefit to the consumers is not established as it is not evidenced by any credible documentary evidence. Further the consumer would have never got the benefit of tax reductions unless the MRP was revised by the Respondent on the packs and the bar codes were changed, which does not seem to have happened. The Authority, thereby finds his claim short of any credence and hence the same cannot be accepted.
Packing material write off - Held that:- The law was very clear when it gave the suppliers the relief to do re-stickering instead of incurring additional cost on new packaging material. It was a business call taken by the Respondent to not do re-stickering and rather go for fresh packing material. It is an admitted fact by the Respondent that vide office letter No. WM-10(31)/2017, dated 16.11.2017 issued by the Ministry of Consumer Affairs, Food and Public Distribution, it was clearly allowed by the Government to refix the stickers - this Authority finds that the deduction claimed by the Respondent, on account of packing material write off, is not supported by any legal provisions and therefore it is inadmissible.
Tax collected on profiteered amount - Held that:- This Authority is of the view that since, the recipients of the Respondent have been compelled to pay extra GST which should be included in the profiteered amount. Hence, the Respondent's claim to deduct this amount is dismissed.
Sales to CPF and CRPF - Held that:- The Authority is in absolute agreement with the DGAP's revised opinion and allows the deduction of the above amount from the profiteered amount as no excess realization had taken place. This benefit of ₹ 3.80 Crores is being extended as there was no increase in the base prices of these supplies.
Sales of semi-finished goods - Held that:- As per Annexure-12 & 13 of his written submissions dated 09.08.2018 the Respondent has provided details of return of one product namely Coffee but for other products no evidence has been provided to prove that these goods were returned to him for further processing. In the case of Coffee also, the Respondent has not been able to provide any clear and conclusive proof to establish that the sent and the received back goods pertained to the same Batch or were exchanged during the same period of time. The Respondent has also not claimed that the prices had been reduced and his only claim is that it was a semi- finished product. Therefore the claim of the Respondent to the extent of ₹ 2.63 Crores made on this ground cannot be accepted.
Wrongly collected the ITC credit from RSs - Held that:- Since this amount has been held to be profiteered amount by this Authority the same shall be deposited in the Central and the CWF of the concerned States as per the calculation to be made by the DGAP and released by him accordingly as an amount of ₹ 36.19 Crores has already been deposited by the Respondent out of the above amount of ₹ 36.25 Crores - the total profiteered amount on account of denial of benefit of ITC is determined as ₹ 76.06 + ₹ 2.91 Crores i.e. ₹ 78.97 Crores. This amount of ₹ 78.97 Crores availed through TRAN-2 statements shall be deposited by him in the Central CWF as this amount pertains to the Central taxes and the duties.
Thus, it can be concluded that Respondent has resorted to profiteering being very well aware of the law and the rules which warranted him to pass on the benefit of GST rate reductions. Further he has also consciously and illegally recovered the excess realisation which was due to his RSS as ITC and thereby denied the benefit of tax reductions to the customers - Since the Respondent has been held guilty of profiteering and has also been found to have violated the provisions of Section 122 (1) (i) of the CGST Act, 2017 a fresh notice be issued to him asking him to explain why penalty should not be imposed on him.
Decided against respondent.
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2018 (12) TMI 1578
Validity of attachment order - petitioner could not discharge its GST liabilities for the past several months - According to the petitioner, since it was unable to pay the tax, the Returns could not be filed. - Held that:- The petitioner can restart its manufacturing activities and start repaying the Government dues. In this context, few things become relevant. Firstly, according to the petitioner, the outstanding dues are in the vicinity of ₹ 64.00 Lacs. This does not account for possible interest or penalty or late payment charges. The petitioner must clear the dues as soon as possible. The petitioner, having collected such taxes, would not get any sympathy from us, if the unpaid taxes are not deposited in the Government revenue - The petitioner shall place before the respondent authorities material regarding its purchases and clearances in order to enable the authority to form the best judgment assessment, if so found necessary. All these procedures can continue.
Attachment to bank accounts suspended with conditions.
While maintaining the attachment on the plant and machinery, we permit the petitioner to carry out its manufacturing activities and clear the manufactured goods. Upon breach of any of the above condition nos.(I), (II) or (III), including failure to deposit any of the installments, such restrictions shall stand restored. - petition disposed off.
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2018 (12) TMI 1442
Levy of GST - Constitutional Validity of N/N. 4 of 2018-Central Tax (Rate) dated 25th January, 2018 and N/N. 4 of 2018-State Tax (Rate) dated 25th January, 2018 - basic grievance of the Petitioner is that the notifications seek to bring the tax an activity which would not amount to service or supply of service - Held that:- The Petitioner is directed to serve the Respondents once again the copy of this order upon the Respondent Nos. 1 and 2 so as to ensure that the Respondents will remain present on the next date - Stand over to 18th January, 2019.
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2018 (12) TMI 1441
Provisional attachment of Bank Accounts - It was submitted that even if the case of the respondents is taken at face value, at best, the tax liability of the petitioner would come to ₹ 13,84,000/- and therefore, the amount of ₹ 17,00,000/- deposited by the petitioner should be sufficient to protect the interests of the revenue - Held that:- From the facts as emerging on record, it appears that the tax liability of the petitioner in terms of the goods seized as well as the transporter’s statement, the same would not exceed ₹ 13,00,000/-. The petitioner has already deposited a sum of ₹ 17,00,000/- with the respondent. Insofar as the amount assessed towards the penalty is concerned, in the absence of any proceedings having been undertaken under the provisions of the GGST Act as well as any penalty having been imposed, the respondent authorities were not justified in resorting to such a drastic coercive measure of attachment of the bank accounts and seizure of goods, which results in bringing the business of the petitioner to a grinding halt.
There is nothing to show that the respondents would not be in a position to recover any amount that the petitioner may ultimately be held liable to pay. In these circumstances, without recording any such satisfaction, the respondent could not have formed the opinion that it was necessary to resort to provisional attachment to protect the interest of the Government revenue. The impugned order of attachment, therefore, cannot be sustained.
The impugned order of attachment dated 22.10.2018, attaching the bank accounts of the petitioner is hereby quashed and set aside - Appeal allowed.
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2018 (12) TMI 1440
Levy of GST - transfer of redevelopment rights - Vires of CGST Act, 2017 - State Government sought time for filing reply - the petitioner stated that petition has been served on the Central Government Authorities also. An affidavit in support of service shall be filed.
Stand over to 24th January, 2019.
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2018 (12) TMI 1408
Permission for manual filing of appeal - contention of the petitioner is that, it is not in a position to upload the appeal electronically - Held that:- the appellate authority will consider such appeal papers as the appeal of the petitioner and will dispose of the same in accordance with law. -This order will not be construed to mean that, the petitioner is not required to comply with the other provisions regarding appeal including pre‐deposit.
In the event, pre‐deposit as required is made by the petitioner for preferring the appeal within seven days from date and in the event, the petitioner complies with other formalities of the appeal, the appellate authority is requested to consider the appeal of the petitioner to be within the period of limitation.
Petition disposed off.
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2018 (12) TMI 1407
Grant of interim bail and not regular bail - grievance of the petitioner is that the learn ed Magistrate has granted interim bail and is not considering the regular bail, though the application is pending before him - violation of certain provisions of GST Act. - Held that:- The learned Magistrate of Special Court (Economic Offences), Bengaluru, is directed to consider the application of the petitioner for regular bail in accordance with law and pass orders expeditiously - petition disposed off.
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2018 (12) TMI 1406
Filing of GST TRAN-1 - input tax credit - the grievance of the petitioners is that so far, no such Nodal Officer is appointed, which is not refuted by the learned Standing Counsel - Held that:- On a perusal of the typed set of papers accompanying the petition, this Court finds the various communications addressed by the petitioners with regard to the technical glitches faced by them in filing TRAN-1. Going by the supporting documents filed in the typed set of papers, this Court is satisfied that the petitioners have made genuine attempts to file their returns, which satisfies the ingredient of the circular in Circular No. 39/13/2018-GST also.
Petitions are disposed of, with a direction to the respondents to open the portal, so as to enable the petitioners to file their TRAN-1 electronically for claiming the transitional credit and allow the input credits.
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2018 (12) TMI 1405
Refund of integrated tax paid - opportunity of personal hearing not provided - principles of natural justice - Held that:- It is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated July 13, 2018, filed in response to the deficiency memo dated July 4, 2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated July 13, 2018.
The respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation given by the petitioner, as to how such deficiencies pointed out by the respondent are either improper or not warranted. Therefore, this court is of the view that the respondent should consider the application already filed by the petitioner once again on merits.
Appeal allowed by way of remand.
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2018 (12) TMI 1404
Profiteering - supply of Readymade Garments - benefit of reduction in the rate of tax not passed on - Section 171 of Central Goods and Service Tax Act, 2017 - Held that:- here was no reduction in the rate of tax on the above products w.e.f. 01.07.2017, hence the anti-profiteering provisions contained in Section 171 (1) of the CGST Act, 2017 are not attracted. Also, there is no increase in the per unit base price (excluding tax) of the above products and therefore the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017.
There is no merit in the application - application dismissed.
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2018 (12) TMI 1403
Profiteering - supply of “Panasonic LED TH43E200DX#45580” - benefit of reduction in the rate of tax not passed - Section 171 of CGST Act, 2017 - Held that:- It is apparent from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017 and that the rate of tax in the Post-GST era has also been increased from 26.79% to 28%, therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017.
There is no merit in the application - application dismissed.
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2018 (12) TMI 1402
Profiteering - supply of Peps Spring Koil Bornell Normal Maroon 75x60x6" Mattress - benefit of reduction in the rate of tax not passed - Section 171 of CGST Act, 2017 - whether there is a case of reduction in the rate of tax and whether the provision of section 171 of CGST Act, 2017 are attracted in the case? - Held that:- It is clear from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017 and that the rate of tax on the said product has increased from 14.5% (2% CST + 12.5% Excise) to 28% and therefore the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017.
Application dismissed.
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2018 (12) TMI 1401
Profiteering - supply of “Granure Hard Nero-10 MM & Granure Hard Crema-10 MM Tiles” - benefit of reduction in rate of tax not passed on - Section 171 of the CGST Act - Held that:- It is evident that the base prices of both the products had remained same. It is also observed from the Annexure-6 attached with the Kerala Screening Committee's report that sale price of these products was reduced from ₹ 1037.52 (pre-GST revision) to ₹ 840.68 (post-GST revision) when the GST rate on the above items was revised from 28% to 18%. Thus it is clear that the base prices have not changed and accordingly the selling prices of the products have been reduced. This fact has also not been disputed by the representative of the Applicant No. 1.
It is apparent from the perusal of the facts of the case that the Respondent has duly passed on the benefit of reduction in the tax rate by keeping the base price constant thus reducing the selling price of the products in question. Therefore the anti-profiteering provisions contained in Section 171 (1) of the CGST Tax Act, 2017 are not attracted - thus, Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017.
Application dismissed.
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2018 (12) TMI 1355
Maintainability of Advance Ruling application - admissibility u/s 97 (2) of CGST Act - Levy of GST - retention of amount on cancellation of flats - What is the legal procedure for cancellation of flat which is booked in pre-GST Regime and cancelled in post-GST Regime?
Held that:- The questions posed before us are not the questions in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, the impugned application is not maintainable - No proceedings of Advance Ruling under the GST Act lie in the instant case.
Ruling:- The application for advance ruling is rejected being non-maintainable.
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2018 (12) TMI 1354
Jurisdiction - parallel proceedings / enquiries under the same subject - contention of the petitioner is that he is already being subjected to enquiry by CGST Authorities at Jaipur who have issued him a summons dated 7.9.2017 - Held that:- It is an undisputed position that the petitioner has taken registration under the CGST Act 2017 & Finance Act, 1994 (service tax) in Mumbai. Thus, having taken registration, he is subject to the jurisdiction of Mumbai authorities in respect of the business which he has carried out within jurisdiction of the authority - Once registration has been taken in Mumbai and some services have been rendered in Mumbai, then the petitioner is subject to the jurisdiction of Mumbai Authorities. Thus, no interference with the investigation by the respondent No. 2 at Mumbai is warranted - petition dismissed.
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2018 (12) TMI 1353
Repayment of borrowed funds - entertainment tax - Held that:- The issue is required to be examined at the highest level before the Government. We request the Government i.e the Chief Secretary to constitute a High Level Committee which would besides others, comprise of Principal Secretary of Finance and the Secretary of Tourism Department - appeal allowed by way of remand.
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2018 (12) TMI 1352
Exemption from payment of tax - duty free shop - territorial limits - petitioner made a prayer for directing the respondents to treat the goods supplied to the petitioner as an export without payment of CGST and IGST, only on the ground that Duty Free Shop at international airport are located beyond the customs frontier of India and any transaction that takes place in a Duty Free Shop is said to have taken place outside India.
Held that:- No provision of law has been brought to the notice of this Court under the Central Goods and Services Tax Act, 2017, which grants exemption from payment of taxes. A taxing statute has to be strictly construed. In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used - The statute governing the field does not provide any such exemption as prayed by the petitioner.
Undisputedly, the petitioner is supplying goods to Duty Free Shops and as per Section 2(5) of IGST Act, 2017 export of goods takes place only when goods are taken out to a place outside India. India is defined under Section 2(27) of Customs Act,1962 as “India includes territorial waters of India”. Similarly under the CGST Act, 2017 under Section 2(56) “India” means the territory of India including its territorial waters and the air-space above its territory and territorial waters and therefore, the goods can be said to be exported only when they cross territorial waters of India and the goods cannot be called to be exported merely on crossing customs frontier of India - The petitioner's contention is that no GST is payable on such supply taking place beyond the customs frontiers of India as the same should be considered as export of goods under Section 2(5) of the IGST Act, 2017 and should be zero rated supply under Section 2(23) read with Section 15(1) of the IGST Act, 2017 is misconceived.
The location of the DFS, whether within customs frontier or beyond, shall be within India as long as it is not beyond EEZ (200 nautical miles). Therefore, DFS cannot be said to be located outside India. Instead, the DFS is located within India. As the supply to a DFS by an Indian supplier is not to 'a place outside India', therefore, such supplies do not qualify as 'export of goods' under GST. Consequently, such supplies cannot be made without payment of duty by furnishing a bond/letter of undertaking (LUT) under rule 96-A of the CGST Rules, 2017.
The petitioner is liable to pay GST on supply of indigenous goods to DFS - Whether, transaction under taken at a DFS (i.e. sale of goods to outgoing passengers) are to be treated as export of goods or services does not form part of the instant writ petition - petition dismissed - decided against petitioner.
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