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GST - Case Laws
Showing 41 to 60 of 1001 Records
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2018 (12) TMI 1351
Permission to interrogate and record statement of accused in judicial custody - GST evasion - issue of fake invoices - Held that:- Both the applications are allowed and Jail Superintendent concerned is directed to allow Insp. / IO Sahil Yadav alongwith Insp. Amar Singh and Superintendent Shaminder Chhabra to interrogate and record statement of accused persons in judicial custody alongwith writing material during office hours on any working day as per rules and make necessary arrangement - application disposed off.
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2018 (12) TMI 1350
Cancellation of Bail - Wrong availment of Input Tax Credit - opening bogus companies in the name of dummy proprietors and through these companies had issued fake invoices with no actual supply of goods - cancellation of Bail - Held that:- The allegations are clear enough to make out a case falling under clause (b) of sub-section (1) of Sec. 132 of the CGST Act, 2017. The contention of Id. counsel for the accused/applicant that the application for judicial remand of the accused did not disclose the details of the offence except of making of a mention that Sec. 132(1)(b) is alleged, has no merits as admittedly when the application for judicial remand was preferred by the applicant before the Ld. Link MM, the entire record file including the arrest, search and seizures was put up for perusal and consideration.
The allegations of tax evasion against the accused/ respondent was of less than ? 5 crores and as such taking out the Offence from the purview of sub-section (5) of Sec. 132 of the Act, thus, making it non-cognizable and bailable. Admittedly, the file which has been produced by the applicant/ petitioner clearly notes in the note-sheet of the inquiry that the accused / respondent as well as the co-accused Adesh Jain in their respective statements recorded u/s 70 of CGST Act on 31.07.2018 have stated that they both were indulging in the act of providing false invoices to other companies I firms/ agents and thus were passing on wrongful’ availment of input tax credit.
Cancellation of Bail - Held that:- The law is well settled that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail, already granted. Generally speaking, the grounds for cancellation of bail, broadly (illustrative and not exhaustive) are:- interference or attempt to interfere with the due course of administration of justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. The satisfaction of the Court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial.
Not only there are serious allegations against the accused/ respondent of his having made fictitious sales of value of more than ? 200 crores and having consequently caused loss to the government of the GST evasion/wrongful availment of input tax credit of the value of more than ? 27 Crores, it is also alleged that the accused/respondent had indulged in the act of threatening the witnesses who were otherwise coming forward to give their statement to the department/petitioner as to how the bogus firms were created and how their documents were misused - there are merits in the application of the applicant/ petitioner seeking cancellation of bail of the accused / respondent.
The order granting bail to the accused/ respondent is hereby set aside - application allowed.
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2018 (12) TMI 1278
Levy of GST / import duty goods purchase from Duty free shops - shops situated before immigration clearance by a passenger - Exemption on sale of cosmetic products, perfumes etc. to the International passenger - refund of any input tax paid on input supplies and input services - Held that:- The Central Government holds that the transactions effected at the duty free shops at the arrival or departure of the International Airports in India might have taken place within the geographic territory of India, but for the purposes of levy of Customs Duties or any other taxes, the area of duty free shops shall be deemed to be the area beyond the customs frontiers of India. Although, the applicant bought goods from duty free shop at CSI Airport Mumbai, the same are deemed to be imported from across the Customs Frontiers of India and customs duty is payable on such goods. Since the applicant crossed the green channel without declarations and without payment of customs duty, the department has rightly proceeded against the Applicant.
A passenger travelling on a domestic flight from Nagpur may or may not travel abroad, and the Customs Authorities would not be able to have effective check and control to verify whether the goods purchased from Domestic Airport at Nagpur are actually taken abroad by the passenger.
Petition dismissed.
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2018 (12) TMI 1277
Classification of supply - rate of tax - Composite Contract or Works Contract? - tender received from the Indian Railways for retro-fitment of Twin Pipe Air Brake Systems on wagons - principal supply - Twin Pipe Air Brake Systems or the supply of services of fitting these goods to the wagons?
Held that:- The contract referred to by the Applicant is that of a composite supply within the meaning of Section 2(30), where the Twin Pipe Air Brake Systems are the Principal Supply as defined under Section 2(90) ibid. The entire contract value is, therefore, taxable at the rate applicable for supply of Twin Pipe Air Brake Systems - Twin Pipe Air Brake System is classifiable under Tariff Head 8607 21 00 [Parts of Railway.. ..Air Brakes and part thereof] which is taxable @ 5% under Serial No. 241 of Schedule I of Notification No. 01/2017 – CT (Rate) dated 28/06/2017 with no benefit of refund of the unutilized input tax credit (as per TRU Clarification issued under F.No.354/1/2018-TRU dated 25/01/2018).
Ruling:- The Applicant’s contract for retro-fitment of Twin Pipe Air Brake System on Railway Wagons is to be treated as Composite Supply, where the Twin Pipe Air Brake System is the Principal Supply
Twin Pipe Air Brake System is classifiable under Tariff Head 8607 21 00 and is taxable @ 5% [in terms of Serial No. 241 of Schedule I of Notification No. 01/2017 – CT (Rate) dated 28/06/2017] with no refund of the unutilized input tax credit [as clarified in TRU Clarification issued under F.No.354/1/2018-TRU dated 25/01/2018].
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2018 (12) TMI 1276
Classification of goods - rate of tax - Agricultural Soil testing Minilab and its Reagent Refills - whether classifiable under Tariff heading 9027 of the GST Tariff or otherwise? - N/N. 2/2017 of Section 6, sub-Section (1) of the Act.
Classification of the Minilab - Held that:- By the nature, functions and usage etc., the Mridaparikshak instrument / Minilab falls within the specific phrase “instruments for physical or chemical analysis” used in Heading 9027 - this classification would be applicable under the primary criterion ‘according to the terms of Headings’ vide Rule I of the Interpretative Rules.
Heading 9027 in the Tariff mentions the names of only some such instruments for physical / chemical analysis illustratively, as referred earlier. As such, the Adv. Ruling Authority was right in referring to the HSN Notes and in arriving at the conclusion basing on the specific mention therein of pH meter, Wet Chemical Analyser; which are used for the similar functions of measuring / determining the pH factor, inorganic / organic components etc., as done by the impugned Mridaparikshak / Minilab - Inasmuch as the Mridaparikshak / Minilab is found to be classifiable under Heading 9027, the plea of appellants for classifying them under Heading 8201 remains further negated by Note I (h) to Section XV which precludes instruments/apparatus of Section XVIII (under which Chapter 90 falls) from being classified under Section XV, which includes Chapter 82.
Thus, Mridaparikshak-MiniIab is rightly classifiable under Heading 9027 of the Tariff as held by the Adv. Ruling Authority and not under Heading 8201 as claimed by the appellant.
Classification of Refill Reagents - Held that:- Refill Reagents are not classifiable under the said Heading since these do not qualify to be considered as ‘Hand tools’ by any means. Appellants have also not put forth any separate grounds/contentions in support of their claim for classifying the Refill reagents under Heading 8201 - The appellants have, either in the grounds of appeal or further submissions, not disputed either the finding of the lower Authority that the Refill Reagents are solely or principally for use with the Mridaparikshak Minilab falling under Heading 9027 nor as to the application of Note 2 (b) of Chapter 90, for determining the classification - thus, the Adv. Ruling Authority’s decision of classifying Refill Reagents under Heading 9027 is correct and merits to be upheld.
Whether the exemption entry Sl.No. 137 of Notification No. 2/2017-Central Tax (Rate) dated 28-6-201 7 is applicable to the impugned goods? - Held that:- The exemption is applicable to a sub-set from out of the broad category of “Hand tools” covered in Heading 8201. Since the impugned goods do not fall in the Heading itself, the exemption given in respect of a part of the Heading would not be applicable to them - the impugned goods are not covered by the entry SI.No. 137 in the exemption Notification as claimed by the appellant.
The impugned goods are correctly classifiable under Heading 9027 of the Tariff; they are not classifiable under Heading 8201 ibid. Further the impugned goods are not eligible for the exemption vide entry Sl.No. 137 of the Notification No. 2/2017- Central Tax (Rate) dated 28-6-2017.
Ruling:- The Advance Ruling pronounced vide TSAAR Order No. 02/2018 dated 30-052018 [2018 (6) TMI 465 - AUTHORITY FOR ADVANCE RULING HYDERABAD TELANGANA] passed by the Telangana State Authority for Advance Ruling in re: appellant M/s. Nagarjuna Agro Chemicals Pvt. Ltd., Hyderabad is confirmed.
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2018 (12) TMI 1275
Classification of supply - Composite supply or mixed supply - Transfer of right to use - activities / transactions of renting of workwear - Transfer of right in goods or not - entry 5 (f) of Schedule II of Central Goods and Services Act, 2017.
Held that:- It is clear that for the contractual period, the ownership of the workwear rests with the applicant and only the right to use the workwear is intended to be passed on to the customer for the period of contract - the activity of renting workwear qualifies as ‘transfer of the right to use’ any goods for any purpose (whether or not for a specialized period) for cash, deferred payment or other valuable consideration and thus would be categorized as supply of services within the meaning of entry 5(f) of Schedule II of the GST Act.
Renting of work wear along with other services such as transportation, weekly washing etc - The provision of renting of workwear is combined with provision of ancillary services such as transportation, weekly clearing, maintenance, repairs and finishing of the said workwear. Thus applicant satisfies one of the conditions that is essential character of ‘Bundled Service’ of the composite supply - also, services other than renting of workwear are being supplied not in the ordinary course of business but under the compulsion imposed by the applicant on the customer.
If the particular supply is a mixed supply, the first requisite is to rule out that the supply is a composite supply. A supply can be a mixed supply only if it is not a composite supply. As a corollary it can be said that if the transaction consists of supplies not naturally bundled in the ordinary course of business then it would be mixed supply - the possibility of the present transaction being a composite supply is already ruled out, and the fall out is that the transaction qualifies as a mixed supply as defined in section 2(74) of the GST Act.
Ruling:- The activities/transactions of renting of workwear qualify as “transfer of right to use” of goods in terms of entry 5 (f) of Schedule II of Central Goods and Services Act, 2017.
The supply of renting of workwear along with other services such as transportation, weekly washing etc. for a single consideration is a mixed supply under section 2 (74) of CGST Act.
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2018 (12) TMI 1274
Classification of goods - Polished / Processed limestone slabs - whether classifiable under heading 6802 of the GST Tariff or otherwise? - Held that:- The processes of ‘polishing’, ‘tumbling’ and ‘calibration’; or the state of goods as polished / tumbled / calibrated are not covered by Note 1 to Chapter 25 of the Customs Tariff Act, 1975 - it is evident that the HSN Explanatory Notes also reflect the restriction as to only certain specified processes being allowed on the products for a classification under Chapter 25 - as per HSN notes also, slabs which have been ‘polished’, tumbled and/or calibrated WOUld be covered by exclusions detailed in both General Note to Chapter 25, as well as the Heading Note to Heading 2515.
In sum, the goods in question, limestone slabs, have admittedly been subjected to processes of ‘polishing’ (including tumbling) and calibration, in addition to being cut to rectangular/square shapes. The said processes, except that of cutting, are not among those specified either in the Heading description or the Chapter Note 1, for an eligible classification under Chapter 25. Hence, classification of the subject goods under Chapter 25 i.e, specific Headings 2515 /2516 remains precluded by virtue of description in said Headings as also Chapter Note 1 Note 1 to Chapter 25 makes fulfilment of the specified criteria in the Heading description or the Note itself.
Neither of the two categories of limestone slabs viz., Polished limestone slabs or Processed Limestone slabs (as referred at para 15.2 supra), can be classified under Chapter 25 in general and under Headings 2515/2516, in particular.
Correctness of classification of the goods under Heading 6802, as held by the lower authority - Held that:- The meaning/scope of the word ‘worked’ is not separately and specifically delineated in the HSN Notes also. However, the said word is used at various places denoting certain illustrative and not exhaustive list of processes.
The Heading 6802, apart from articles, also specifically covers stone in the description itself i.e. “worked monumental or building stone and articles thereof”. The same, coupled with the HSN Explanatory Notes, as detailed and analysed above, show that such stone (limestone slabs, in the instant context) which have been ‘worked’ beyond the processes mentioned in Chapter 25 on the one hand and ‘polished’ as specified under Chapter 68 in particular reference to slabs (blocks etc.,) has to be classified under Heading 6802. There is no restrictive connotation that such working has to be done only by stone-mason or sculptor.
The appellant has not made out a case against the decision in impugned Advance Ruling in so far as it has been ruled that “Polished / Processed Limestone slabs are. correctly classifiable under heading 6802 of the GST Tariff (sic)”. The classification under Chapter Heading 6802 of the First Schedule to the Customs Tariff Act, 1975 is the appropriate classification of the said goods (both ‘polished’ only as well as ‘processed’, as referred at para 15.2 supra), in view of the relevant Heading-description read with the Chapter Notes and HSN Explanatory Notes.
Ruling:- The commodity “Polished/Processed limestone slabs” falls under Chapter 68 of the First Schedule to the Customs Tariff Act, 1975.
The commodity comes under Chapter Heading 6802 (Tariff Item No. “6802 92 00 - Other calcareous stone”) of the Schedule.
The goods Polished/ Processed Limestone slabs do not fall under HSN Code - Chapter Heading 2530 of the Schedule.
The goods Polished / processed Limestone slabs do not fall under HSN Codes i.e, Chapter headings 2515 / 2516 / 2521 of the Schedule.
The goods would not fall under Chapter 25 of the Schedule.
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2018 (12) TMI 1273
Seizure of goods with vehicle - Section 129(1) of the GST Act - Held that:- The petitioner has already deposited the tax and the penality but even then the goods are not being released and they are insisting that the petitioner-owner should appear instead of the authorised representation or the signatory - respondent are directed to forthwith release the goods and vehicle provisionaly unconditional.
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2018 (12) TMI 1272
Filing of Form GST Tran-I - carry forward of CENVAT Credit - Held that:- Petition is disposed off by directing respondent No.4 to take a decision on the representation dated 22.11.2018 (Annexure P-6), in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner.
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2018 (12) TMI 1228
Classification of services - Works Contract or Composite Supply - combination of services of excavation of sand including loading with machinery at reach, Formation of Ramps and Maintenance of Roads, Transportation charges for the tractors/tippers of sand from reach to stockyard and Loading cost at sand from stockyard to lorries - rate of tax.
Principal supply in a composite supply - Whether, in the services provided by the applicant under the Agreement with TSMDC, the ‘principal supply’ is that of ‘excavation of sand’ as held by the Central Member or ‘transportation of goods i.e., sand’ as held by the State Member? - Held that:- The basic intent and purpose of the Tender / Contract-Agreement and the concomitant description of the scope of the work therein is to move / shift the mineral sand from one place to another, by means of transport by roads/ramps; for enabling the further despatch by TSMDC. The said activity i.e., transport of sand from one place to another therefore constitutes the predominant element in the instant case; the other activities of excavation (or extraction as also mentioned in Agreement), loading, unloading and reloading as also formation / maintenance of ramps/roads, are the incidental or ancillary activities, preceding, coinciding or following the said main activity of ‘transportation from one place to another’ - the principal supply involved in this case is ‘transportation of goods’ as held by the State Member and not ‘excavation of sand’ as held by the Central Member.
What is the classification of the “principal supply” which would thereby be the classification of the “composite supply” as held by the lower Authority? - Held that:- The ‘principal supply’ in the instant case is that of transportation of goods i.e., sand. It is an urn-disputed fact and also explicitly recorded in the Agreement and tender documents that the said transport is by road only. The Scheme of Classification of services is laid down in the Annexure to the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-201 7 which contains the entries pertaining to Land transport services - The classification of the services rendered by the applicant which have been held to be “composite supply” and in which the principal supply is found to be ‘transport of goods by road’ are correctly classifiable under the Service Code (Tariff) 996511 under the Scheme of Classification of services laid down in Annexure to Notification No. 1 1/201 7- Central Tax (Rate) dated 28-6-2017.
Whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term ‘vessel’ appearing in the Notification-entry as held by the State Member or as not covered by the term as held by the Central Member? - Held that:- The vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are not covered by the term ‘vessel’ appearing in the Notification-entry as held by the Central Member; the contrary opinion expressed by the State Member is found to be not legally correct.
What is the applicable rate of tax on the consideration received by the applicant for the impugned services? - Held that:- The applicable entry in respect of the impugned services would be the entry item Sl.No. (v) viz., “Goods transport services other than (i), (ii), (iii) and (iv) above” for which the applicable rate of tax is prescribed as 9% CGST (and correspondingly 9 % SGST). Hence, the applicable rate of tax on the impugned services is 9 % CGST + 9 % SGST (aggregating to 18%).
Ruling:- The opinion expressed by the State Member in so far as holding that the ‘Transport of goods’ is the principal supply in the impugned services, is confirmed.
The classification of the impugned services is under Service Code (Tariff) 996511 Road Transport of goods.., as per Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017.
The opinion expressed by the Central Member in so far as holding that the term ‘vessel’ (appearing in item (ii) under Column (3) against entry at Sl.No.9 of the above Notification), is not applicable to the applicant’s case, is confirmed.
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2018 (12) TMI 1227
Classification of supply - supply of goods or supply of services? - export of services or not - activities undertaken by procuring orders from a foreign party to print religious texts and thereafter deliver them to various places in India - Held that:- The Applicant is supplying the service of printing the Bible (the purchase orders and the tax invoice refer to supplying of printing service classifiable under heading 9989) to the recipient located in India - also, the Applicant’s supply is not the export of service, as the recipient of the service is located in India. It violates clause (b) of section 2(6) of the IGST Act.
Furthermore, both the purchase orders and the tax invoice are in INR. Although the Applicant argues that the consideration is being received in US dollars, he has not clarified nor produced any evidence of how payment for purchase orders in INR and tax invoice raised in INR are made in foreign currency. It raises doubt about violation of condition under clause (d) of Section 2(6) of the IGST Act as well - The Applicant is making domestic supplies, on which he is liable to pay GST.
Ruling:- The Applicant’s activity of printing the Bible under the specific orders received from The Gideons International is a supply of service classifiable under SAC 9989.
The service is supplied to the recipient located in India and the consideration is apparently received in INR. The Applicant is, therefore, liable to pay GST under the appropriate Act on such supplies.
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2018 (12) TMI 1226
Rate of GST - construction of railway siding -r Sl. No 3(v)(a) or Sl No 3(xiii) of Notification no 11/2017-CT(Rate) dated 28.06.2017 - Held that:- The scope of work, as outlined in the Applicant’s agreement with DVC, is that of works contract, as defined under section 2(119) of the GST Act, fit to be called an ‘original work’ within the meaning ascribed to the term in para 2(zs) of Notification No. 12/2017-CT (Rate) dated 28/06/2017, and pertains to ‘railways’, provided it is meant for public carriage of passengers or goods.
Whether the phrase “public carriage of passenger or goods” prevents a private siding from being included in the definition of ‘railways’ has repeatedly come up for judicial scrutiny. The courts generally held that the phrase ‘public carriage of passengers or goods’ cannot be construed in such manner as to exclude from the ambit of ‘railways’ the sidings built and owned by organizations other than the government.
DVC, a public sector undertaking, is the owner of the railway siding being built. It is meant for carriage of coal and oil fuel to RTPS. The purpose of the carriage of goods is, therefore, not recreation, but producing public goods like electricity. It is, therefore, not excluded under section 2(31)(ii) of the Railways Act, 1989 - The construction of the private siding that the Applicant refers to, therefore, pertains to ‘railways’.
Ruling:- Construction of a private railway siding for carriage of coal and oil fuel to Raghunathpur TPS, as described in the agreement between the Applicant and DVC, is a composite supply of works contract taxable @ 12% under Serial No 3(v)(a) of Notification no 11/2017-CT(Rate) dated 28.06.2017.
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2018 (12) TMI 1225
Seizure of goods alongwith vehicle - detention on the ground that during physical verification the goods were less in quantity then mentioned in the invoice - Held that:- The seized goods and the vehicle shall be released in favour of the petitioner on furnishing security of the value as provided in accordance with Section 129(1)(a) of the U.P. GST Act - petition disposed off.
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2018 (12) TMI 1224
Seizure of goods - petitioner is ready to furnish security to the satisfaction of the authority concern for the release of the goods - Held that:- The goods and the seized vehicle are directed to be released on the petitioner furnishing security to the satisfaction of the authority concerned in accordance with the provisions of Section 129(1)(a) of the U.P. GST as the petitioner is the owner of the goods - petition disposed off.
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2018 (12) TMI 1223
Rectification of returns - Section 172 of the Central Goods and Services Tax Act, 2017 - Held that:- Petitioners pointed out that apart from the routine rectifications, other corrections such as inadvertent reflection of a mandatory GST registration form, as voluntary or vice versa, which can lead to serious consequences cannot be rectified in the existing format in the GST portal. Learned ASG submitted that on this aspect, instructions would have to be obtained.
List on 18.02.2019.
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2018 (12) TMI 1158
Maintainability of Advance Ruling Application - Rate of GST - Dietary Services to CIMS Hospital - Held that:- The application is not in the prescribed format as specified GST ARA-01 under section 97(1) of Chhattisgarh State GST Act, 2017 and the applicant has also not deposited the full fee of ₹ 10000/- for advance ruling i.e., ₹ 5000/- for SGST and ₹ 5000/- for CGST as specified in circular no 25/25/2017-GST issued by the Central board of Custom and Indirect tax board on 21.12.2017 - Application is hereby REJECTED as it has not been filed as per the act and rules of State GST act and/or Central GST act.
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2018 (12) TMI 1157
Rate of GST - supply of non-air conditioned vehicles on hire to Indian Army - Contract carriage - N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 - Held that:- The essential ingredient of a contract carriage is that it plies under a contract for a fixed set of passengers, and does not allow any other passenger to board or alight from the carriage at will - The applicant does not satisfy the condition prescribed in clause (a) nor specified in clause (b) of clause (7) of section 2 of the Motor Vehicles Act, 1988 and accordingly, they cannot be considered as ‘non-air conditioned contract carriage’ and are hence not eligible for exemption under the serial no. 15 of the exemption notification no. 12/2017 Central Tax (Rate) dated 28.06.2017.
Even if the contract is assumed as ‘non-airconditioned contract carriage’, even then, serial no. 15 of the exemption notification no. 12/2017 Central Tax (Rate) dated 28.06.2017 does not exempt it from GST, as the “hired” non-airconditioned contract carriage are ‘excluded’ from exemption as specifically mentioned in the said notification - the service provided by the applicant falls under ‘rent a cab’ service.
Ruling:- The Service provided by the applicant is not exempted under Notification No. 12/2017 dated 28.06.2017 as this Service does not fall under ‘non-airconditioned contract carriage’ category - The service provided is ‘rent a cab’ Service, which attracts IGST @ 5% (CGST @ 2.5% and SGST @ 2.5%) provided that credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle) has not been taken or IGST @ 12% (CGST @ 6% and SGST @ 6%) if input tax credit is availed.
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2018 (12) TMI 1156
Supply - e-way bill - supply from M/s. SSPL to M/s. X - “Bill to Ship to” mode - Section 10(1) (b) of IGST Act, 2017 - “ship to” of ultimate customer M/s. X - input tax credit - related person.
Held that:- The cycle of supply of goods from the applicant to the final customer, involves four persons. i.e. the applicant, M/s. RSE/RPG, M/s. Goyal and the M/s. X - Section 10(1)(b) of IGST Act, 2017 does nowhere limit the transaction to only three parties/ persons. The said section only contemplates about role of ‘third party’ and declaration of ‘principal place of business’. Therefore, the supply from M/s. SSPL to M/S. X on a “Bill to Ship to” mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible.
The Press Note of ministry of Finance on “Issues regarding Bill to Ship to for e-way bill under CGST rules 2017” dated 23.04.2018 clearly emphasise that only a single e-way bill is to be issued either from the supplier of goods or by third party - In the instant case, the applicant can issue an e-way bill in which the ‘bill to’ will be mentioned in the name of M/S RSE/RPG whereas ‘ship to’ would be in the name of final customer i.e. M/S X.
Input tax credit - Held that:- TMT Steel Bars manufactured by the applicant is similar in quality of what is made by M/s. RSE/RPG, (trademark contract is emphasising on it) and therefore, the value of supply of goods can be ascertained or established in accordance with Section 15 of CGST Act read with second proviso of Rule 28 of CGST Rules, 2017 with eligibility to full Input Tax Credit.
Related party transaction - Held that:- The relationship between M/s Goyal and M/s X is not Related party relationship in accordance with sub-section (4) and (5) of section 25 of CGST Act, 2017. Thus, the transactions between M/s. Goyal and the ultimate customer i.e. M/S. X would be covered by the provisions of Section 15 of CGST Act, 2017.
Ruling:- The supply from M/s. SSPL to M/s. X on a “Bill to Ship to” mode as per provisions of Section 10(1) (b) of IGST Act, 2017 is permissible.
The applicant can issue an e-way bill in which the ‘bill to’ will be mentioned in the name of M/s. RSE/RPG whereas ‘ship to’ would be in the name of final customer i.e. M/s. X.
The provisions of Section 15 of the CGST Act, 2017 read with Rule 28 of CGST Rules, 2017 and in particular the second proviso to Rule 28 would apply for the value of supply for the transactions between M/s. SSPL and M/s. RSE with availability of full Input Tax Credit.
The transactions between M/s. Goyal and M/s. X (the ultimate customer) would be covered under the provisions of Section 15 as both are unrelated persons. (as declared in submissions by the applicant).
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2018 (12) TMI 1155
Levy of GST - Supply of goods or not - pure services - services provided by them by way of providing energy saving street lighting services including OM of the street lighting installations to Bhubaneswar Municipal Corporation (BMC) - Entry No. 3 of Notification No. 12/2017-CentraI Tax.
Held that:- There is no clarity as to whether the service supplied is a case of pure service and whether the contract in pursuance to which the service is being supplied by the applicant to BMC is not a works contract. In fact, the present ruling entirely hinges on answer to the first question i.e., whether the supply is a case of supply of pure service. The term pure service has not been deemed in the said notification for which it has to be understood by applying the common parlance test and general understanding. As per dictionary, pure means unadulterated and unmixed. Accordingly, pure service should mean pure unadulterated service not mixed with any other element (in this case without any mixture of goods).
The consideration payable to the applicant includes the cost of acquisition of the business assets i.e. ‘the energy efficient street light infrastructure’ set up by the applicant at the end of the contract period. Such transfer of business assets from the applicant to BMC is admittedly not covered in clause (c) of para 1 of Schedule II of the CGST/OGST Acts - Thus, it is not a case of supply of pure service but rather a case of supply with substantial use of goods. At the time of personal hearing, on a query raised by the authority it was explained by the applicant that during the period from 01.07.2017, till the date of hearing materials such as street Lights Control Panel and LED Bulbs etc. of value ₹ 3,89,72,117/- have been moved to Bhubaneshwar project from the manufacturing plant. This is a substantial amount and with material movement at this scale, the ultimate supply to BMC cannot be held as a case of supply of puce service. Thus, on this account, the condition is not fulfilled.
The activities undertaken by the applicant do not constitute supply of ‘pure services’ as it involves significant use of goods/materials. It is also a case of supply of works contract service by the Applicant to BMC. The benefit of exemption from tax in terms of S 1.3 of the notification No. 12/2017- Central Tax (Rate), dated 28.06.2017 is not available to the applicant - When there is ambiguity In exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject / assessee and it must be interpreted in favour of the revenue.” Further, Entry at Sl. No. 3 of the notification No. 12/2017-central tax dated 28.06.2017 is unambiguous and it cannot be stretched or construed otherwise. It has no extension and putting any other extension is neither warranted nor intended to and would lead to absurd conclusion not called for and would render the notification entry redundant.
Ruling:- The services provided by the applicant by way of providing energy efficient street lighting services including 0M of the street lighting infrastructure during the contracted period to Bhubaneswar Municipal Corporation (BMC) do not constitute supply of pure services as it involves significant use of goods/materials with stipulation to transfer the total business assets to BMC at the end of the contract period.
The benefit of exemption from tax in terms of S 1.3 of the notification No. 12/2017- Central Tax (Rate), dated 28.06.2017 is not available to the applicant.
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2018 (12) TMI 1154
Levy of GST - penalty/ liquidated damages - supply of service or not - Whether the Bounce Charges collected by the Applicant should be treated as a supply under the GST regime? - Held that:- The receipt of bounce charges would be receipt of amounts for tolerating the act of their customers for having bounced the cheque or any other mode of payment. In view thereof, the same would definitely be a ‘supply’ under the GST Act and therefore, there arises an occasion to levy tax under the GST Act on the impugned transactions - the receipt of bounce charges on dishonor of cheques, etc, would be receipt of amounts for tolerating the act of their customers for having dishonored or where the client could not honour the said cheques and the same, would definitely be a ‘supply’ under the GST Act and therefore, there clearly arises an occasion to levy tax under the GST Act on the impugned transactions.
There is clearly an agreement that the applicant, in the case of bouncing of cheques, etc by their customer, the applicant would tolerate such act of default or a situation and the defaulting party i.e their customer was required to compensate the applicant by way of payment of extra amounts in addition to principal and interest as per the terms and conditions of the Agreement. It is also very clear as to the amount or quantum which is consideration in the form of bounce charges to be received by the applicant if these, are suitable compensation only for tolerating the act of default or situation of default by their customers and they have clearly foreseen that such situation can be there and have, in their agreement, clearly devised a suitable mechanism for receipt of charges for the same and it is not additional interest as claimed by the applicant.
In the present case, there is a clear understanding or agreement between the parties in the present case to foresee and tolerate an act or a situation of default on the part of the client for a monetary consideration which is actually a consideration received by the applicant, though in the agreement they may be giving this consideration, other names such as ‘penal charges’, penalty, Bounce Charges, etc, as thought proper by them, but these different nomenclatures in their Agreement would in no way change the actual nature of monetary “‘consideration” which would clearly be taxable for the supply of services as per Sr.No. 5(e) of Sch. II of the CGST Act, 2018.
The exemption for financial transactions under GST laws is only in respect of the interest/discount earned or paid for loans, deposits or advances. If the transaction, as in the subject case deviates from the above, i.e. the consideration not being an interest or discount, the exemption is not available - Dishonour of cheques i.e. a mode of repayment to the applicant by their customers, is an act which results in delay of receipt of repayments to the applicant. This delay is an act done by their customers which is tolerated by the applicant because inspite of such dishonour the applicant proposes to continue the agreement with the defaulting party.
The recovery of bounce charges is made in view of toleration of the act of the client by the applicant and therefore construes as ‘supply’ as per as per Sr. No. 5(e) of Sch. II of the CGST Act and is therefore taxable under the GST Act.
Ruling:- The Bounce Charges collected by the Applicant should be treated as a supply under the GST regime.
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