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GST - Case Laws
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2018 (12) TMI 1153
Classification of goods - interpretation of statute - Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907” in entry number 252 of the schedule 1 of the Notification No 01/2017-lntegrated Tax (Rate) - Rate of tax - specific list of inputs raw materials, parts and consumables etc., purchased or imported for use in manufacture of warship - Procedure to be followed with Vendors if rate of tax applicable is as per entry no. 252 of the Schedule I - Input tax credit.
Held that:- We have listed a list of items which cannot be considered as a part of a warship/ submarine. Other than that all the equipments/ tools, etc can be considered as parts of a submarine/warship, without which the same would not be complete and would not exist. These are very integral for the functioning of the submarine/ warship - except for the items listed by us above from the Annexure B and Addendums to Annexure B, all other items can be considered as parts of a ship and therefore would be eligible to concessional rate of GST as contended by the applicant.
Ruling:- Only those Annexure B items which are not listed above will be considered as parts of warship falling under 8906 and will be covered under entry number 252 of the schedule 1 of the Notification No 01/2017-Integrated Tax (Rate).
The items/ goods which are considered as parts of warships, in the discussions above will be covered under entry number 252 of the schedule I of the Notification No. 01/2017-lntegrated Tax (Rate) and liable to GST @ 5% (2.5% each under CGST and SGST) and for the other items, the tax rate will be applicable as per the respective Scheduled Entry in which the goods fall.
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2018 (12) TMI 1152
Detention of goods with vehicle - Held that:- Division Bench of this Court in Renji Lal Damodaran v. State Tax Officer [2018 (8) TMI 1145 - KERALA HIGH COURT] has dealt with an identical issue, where it was held that It is directed to release the goods on the appellant furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules.
The respondent authorities is directed to release the petitioners' goods and vehicle on their furnishing Bank Guarantee for the tax and penalty due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules - petition disposed off.
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2018 (12) TMI 1090
Classification of goods - P P Leno Bags - whether classified under Tariff code 63053300 or otherwise? - Held that:- In Chapter 39, in Tariff heading 3923, under sub-heading 39232990, PP sacks and bags are very well covered. There being a clear sub-heading in Chapter 39 assigned to PP Sacks and bags, the same can not be included in Chapter 63 and more specifically under subheading 63053300.
Polypropylene Leno Bags, as stated by the applicant, are manufactured by weaving polypropylene strips (tapes), Linear Low Density Polyethylene (LLDPE) and Plastic Master Batch. Polypropylene is a wide variety of plastic. LLDPE is a plastic that is softer and more flexible and has lower tensile strength. These raw materials are made from Plastic Granules. The strips of plastic (polypropylene) are used for weaving ‘PP Leno Bags’ which are clearly classifiable under Tariff Item 39232990 of GST Tariff.
PP Leno Bags are classifiable under heading 39232990 and not under 63053300. It is a fact that both the headings bear reference to Sacks and Bags but, in view of the exclusion in the Chapter Note I(h) appearing under Chapter X’, Woven Fabrics and articles thereof specified under Chapter 39 are not to be covered by the articles mentioned against the heading 63053300 - Further, as per the existing CBEC Revised Duty Drawback rates schedule applicable w.e.f. 01.10.2017, “polypropylene woven fabrics/bags/sacks, whether or not laminated, with or without C.V. stabilization, with or without liners/fasteners” are specifically classified under drawback chapter 39 under Tariff Item 392302 - The item under consideration being woven bags of polypropylene therefore merits classification under this Chapter as it stands today without any ambiguity.
Ruling:- The item “Polypropylene Leno Bags (PP leno Bags)”, be classified under GST Tariff Heading ‘3923 29 90’.
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2018 (12) TMI 1089
Input tax credit - Whether ITC of IGST paid on bill to ship to’ model admissible to the applicant? - Held that:- M/s Umax Packaging Jodhpur is acting as a third party, directing M/S Uma Polymers, Guwahati to despatch the goods directly to M/s. Pratap Snacks Ltd., Guwahati. M/s. Uma Polymers, Guwahati would accordingly ‘bill to’ the applicant and ‘ship to’ M/S Pratap Snacks Ltd., Guwahati.
Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business - it is deemed that the applicant has received the goods from M/s. Uma Polymers Ltd., Guwahati and thereafter the said goods are despatched to M/s. Pratap Snacks Ltd., Guwahati.
M/s. Uma Polymers Ltd., Guwahati can charge IGST from the applicant, against which the applicant ie. M/s. Umax Packaging, Jodhpur are eligible to claim full input tax credit as per the relevant provisions of Section 16 and 17 of Chapter V of CGST Act, 2017.
Ruling:- The applicant M/s. Umax Packaging, Jodhpur is eligible to claim the input tax credit (ITC) of IGST paid on ‘bill to ship to’ model as per the relevant provisions of Section 16 and 17 of Chapter V of CGST Act, 2017.
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2018 (12) TMI 1088
Levy of GST - Canteen services - services of serving food - input tax credit - N/N. 13/2018-Central Tax(Rate) dt.26.7.18 - principle supply - rate of GST - composite supply with transport service
Held that:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein.
Earlier, CBEC has clarified the queries seeking clarification regarding the taxability and rate of GST on services by a college hostel mess. As per the Circular No. 28/02/2018-GST dated 08-01-2018 issued in this regard, normally the educational institutions have mess facility for providing food to their students and staff. Such facility is either run by the institution/ students themselves or is outsourced to a third person. Further it has been clarified that the supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7(i) of notification No. 11/2017-CT (Rate) as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017 refers].
Levy of GST - Transport services to a training institute for carting food from one building to another for service/sale - Held that:- The applicant in addition to the supply of food, is also undertaking transportation of food from the place of preparation of food to the premises where it is served. Here the applicant is undertaking two supplies, one is supply of food and another is transportation service. Two supplies are involved and it is a composite supply where the supply of food is a Principal Supply and providing transportation is ancillary supply.
In the instant case, principal supply being supply of food i.e. outdoor catering service, and transportation is ancillary, the whole transaction attracts 18% GST being highest rate of tax compared to tax on transportation service. Therefore, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation ) at the rate of 18% i.e., GST rate of outdoor catering service.
Ruling:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at the rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein.
Where the applicant provides transport services to a training institute for carting food from one building to another for service/sale and the applicant charges a separate transport charges, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation) at the rate of 18% GST.
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2018 (12) TMI 1087
Supply or not - transfer of machines & moulds (capital goods), from the premises of the job-worker to another job-worker, which were originally received by said job-worker - Circular No. 637/28/2002-CX., dt. 08.05.2002 - Held that:- From a reading of the Circular quoted by the applicant it is seen that nowhere it is mentioned that provisions of Rule 4(5)(b) of erstwhile Cenvat Credit Rules, 2004 for receipt back of such capital goods/ moulds by principal manufacturer within stipulated time lime of two years are not applicable.
Transitional provisions - Section 141 of the CGST Act, 2017 - Held that:- Applicant have contravened the above provisions of the Erstwhile CCR, 2004. The goods were not received back by them within the time frame mentioned above and they had also not reversed the credit availed in such case. Now that GST has been introduced in the year 2017, they want to avail the benefit of sending the said capital goods from their first job worker to their second job worker.
As per the Cenvat Credit Rules, 2004, if the capital goods were not received back within two years from the job worker, the manufacturer had to pay an amount equivalent to the CENVAT credit attributable to the capital goods by debiting the CENVAT credit account - In this case, the capital goods have not been received back from the first job worker even after three years and it is felt that the first principal manufacturer has not paid the Central Excise duty or debit the CENVAT account. Since, the duty has not been paid, the applicant is liable to pay GST while transferring the capital goods from the first job worker to the second job-worker namely M/s. Vasanth Tools Crafts Pvt. Ltd.
The provisions of Rule 117 (Transitional Provisions) of the CGST Rules, 2017 provide for tax or duty to be carried forward under any existing law or on goods held in stock on the appointed day. The applicant has not brought on record any details to show that either the first Principal manufacturer or the applicant has submitted the declaration electronically in FORM GST TRAN-I and included the said capital goods in his TRAN-I, as provided under Rule 117 of the CGST Rules, 2017 - Since the details regarding the subject goods have not been carried forward by the applicant or the first principal manufacturer from the earlier law to GST laws, the goods cannot now be brought Into the GST fold.
It appears that neither they, nor the first principal manufacturer have carried forward the capital goods into the GST regime by following the procedure prescribed by Section 117 - Hence the subject transaction Of transferring the capital goods from the first job worker to the second job worker would be an independent and fresh transaction for which the same would be treated as supply of goods and will be liable to tax under the GST Laws.
Ruling:- The transfer of machines & moulds (being capital goods), from the premises of the job-worker to another job-worker, which were originally received by said job-worker under the erstwhile Central Excise Act, 1944 will constitute as “supply” under GST.
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2018 (12) TMI 1086
Levy of GST - supply of services or not - contribution made by Members towards “Annual Membership Fees and registration fees” to the Corpus Fund of BCSBI - recurring expenditure - Principle of Mutuality - whether the applicant is providing supply of services to their members and if so, is there any consideration received by them for such supply of services/ goods?
Held that:- These activities are undertaken only for and in respect of the Member Banks, who have voluntarily become their members. Hence their primary objective is to guide the public and publicise about the Codes and Standards and Commitment of their Member Banks. Hence, the applicant is firstly developing and publishing and then publicizing Banking Codes and Standards for the banks who are their members and after this, they are monitoring its compliance, undertaking further research with regard to codes and standards and are also training bank employees about these codes - the applicant is also advertising and publishing promotional literature in newspapers and are also organizing, teaching and training courses, conferences, seminars and lectures and also publishing journals, pamphlets, reports, books and booklets in this regard.
The applicant are basically drafting certain codes and standards and are directly as well as indirectly ensuring that member banks adhere to these standards and codes and thus provide banking services as per these codes and standards and thus the credibility of services of member banks increases if they are able to provide services as per codes and standards as drafted for adherence by the applicant.
For performing the said activities, the applicant requires funds which are collected by them in the form of Annual Membership Fees and registration fees. Even though these fees are not used by them, it is clear that the said fees which are termed by them as corpus fund are used to generate interest amounts which are further used for performing their activities. In other words if there is no fee there is no corpus fund and no interest payment which can be used to fund their activities which are in the form of supply of services to their member banks. Thus here there is no doubt that consideration is flowing from Banks to the applicant in the form of Annual Membership Fee and Registration Fee which are being utilized by the applicant for generating further income as found feasible by them. Thus the consideration is clearly in the form of Annual Membership Fee and Registration Fee.
Principles of mutuality - Held that:- The essence of the principle of mutuality is present only in situations where a group of persons form an association and contribute to constitute income of the associations in the nomenclature of a common fund, which so collected is used for the benefit of the members. Here the member banks have not come together contributing their resources to form the board like that of the applicant and for the benefits of the members themselves - In the present situation there is no compulsion under any enactment for the member banks to become the member of the applicant since the membership of the applicant body is voluntary. Hence the principle of mutuality is not at all applicable in present case.
The applicant is supplying services to their Member Banks, against a consideration received from them in the form of Annual membership fees and registration fees and their supply is in furtherance of business as defined under Section 2 (17) (e) of the Act.
Ruling:- The activity of BCSBI I.e. The Applicant is falling under the definition of “Supply”, as per Section 7 of the CC,ST Act, 2017.
The contribution made by Member Banks to ‘Corpus Fund” can be considered as “Consideration”, as per Section 2 (31) of the CGST Act, 2017.
Supply is meant to be between 2 persons, the Applicant Association” trust and Its Members are legally distinct from each other.
The “Principle of Mutuality” is non existent in the subject case.
The activity of Applicant is to be termed as “Business” as provided under Section 2 (17) (e) of the CGST Act, 2017.
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2018 (12) TMI 1085
Detention of goods with vehicle - expiration of the validity of e-way bill - Held that:- The learned Division Bench of this Court in Renji Lal Damodaran v. State Tax Officer [2018 (8) TMI 1145 - KERALA HIGH COURT] has dealt with an identical issue where It is directed to release the goods on the appellant furnishing Bank Guarantee for tax and penalty found due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules.
The respondent authorities are directed to release the petitioner's goods and vehicle on his furnishing Bank Guarantee for the tax and penalty due and a bond for the value of goods in the form as prescribed under Rule 140(1) of the CGST Rules - petition disposed off.
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2018 (12) TMI 1084
Appearance for the examination for “GST Practitioner” - declaration of result - Held that:- Initially, the petitioner apprehended that he would not get a chance to write the examination, because his application was processed beyond the cut off date. Now as a matter of policy, the first respondent has condoned the lapse and is allowing all other persons to write the examination. The petitioner has, however, already gone through that process and his results have been kept in the sealed cover.
It serves the interest of justice if the authorities declare the petitioner's result, in stead of giving him another opportunity of writing the examination - petition allowed by way of remand.
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2018 (12) TMI 1083
Extension of time period for filing GST Tran-1 - input tax credit - Held that:- The respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner - petition disposed off.
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2018 (12) TMI 1006
Levy of GST - marketing, promotion and distribution services provided by Sabre India to Sabre APAC - export of service - Section 2(6) of the Integrated Goods and Service Tax Act 2017 read With CGST Act - place of supply of services - distinct person - Composite supply - intermediary services - Held that:- Applicant are on the lookout for potential subscribers who are willing to use the CRS software in their business. It is also important to note that these potential subscribers also require such software for use in their business and require the help/ assistance of the applicant to reach out to Sabre APAC to obtain the said software.
Admittedly, the Applicant also undertakes sales promotion and marketing support activities to advance the business of Sabre APAC in India by way of giving marketing support services which includes activities such as PR, promotions, sponsorship, special events and trade shows, as well as any other services necessary to perform its obligations under the Marketing Agreement and to make the CRS Software the reservation system of choice for subscribers and to strengthen the subscribers trust in the brand ‘Sabre’ so as to augment Sabre APACs business in India.
Whether or not the applicant is providing Intermediary Services? - Held that:- If the services provided are Intermediary Services then as per the GST Laws the applicant will be liable to tax.
An intermediary can be a broker, an agent or any other person and either facilitates the supply of goods and/or services between two or more persons and who cannot change the nature of supply as provided by the principal - the applicant is covered by the said definition of an intermediary because they are definitely acting as a broker/ agent, etc and facilitating the process for sale of CRS Software belonging to their foreign parent company, to the Indian subscribers because they identify such subscribers on their own in India. It is the sales team of the Applicant which approaches potential subscribers in India to whom they explain the features of the CRS Software and the flexibility of said software to integrate with the potential subscriber’s system for smooth functioning. Once the applicant gets a positive response from the subscriber, they scan the credentials and the business potential of the subscriber to whom it is proposed to market the CRS Software.
The applicant is not providing services on their own account but on account of Sabre APAC, and thus it is very apparent that the applicant is providing Intermediary Services in the instant case - Since the applicant, being the supplier of service is located in India and the recipient of Service i.e. supplier of goods is located outside India, Section 13 of the IGST Act, 2017 would be applicable to determine the place of service - Since the place of supply of services in the instant case is in taxable territory, the said intermediary services cannot be treated as export of services under the provisions of the GST laws.
As per intra-state provisions contained in Section 8(2), the said provisions are subject to the provisions of section 12 of the IGST Act. As per section 12, the provisions of section 12 would be applicable only for determining the place of supply of service where the location of supplier of services and the location of recipient of the services is in India. When recipient is located outside India the said provisions of section 12 cannot be made applicable and since provisions of section 8(2) are inter-linked with provisions of section 12, the same cannot be made applicable in case the recipient of service is located outside India.
Ruling:- The marketing, promotion and distribution services provided by the applicant to Sabre APAC would be subject to tax under the provisions of the GST Act.
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2018 (12) TMI 1005
Condonation of delay in filing appeal - time limitation - Held that:- The delay in filing the appeal may not be condoned beyond the period of one month from the expiry of period of limitation, the phrase "communicated to such person" appearing in Section 107(1) of the Act commend a construction that would imply that the order be necessarily brought to the knowledge of the person who is likely to be aggrieved. Unless such construction is offered, the right of appeal would itself be lost though a delay of more than a month would in all such cases be such as may itself not warrant such strict construction.
It is largely undisputed that the impugned penalty order was served on the driver of the truck while the penalty order is directed against the owner of the goods. Therefore, for that reason also it may be accepted that the penalty order had not been communicated to the petitioner prior to the date 25.05.2018.
The Appellate Authority may condone the delay and proceed to decide the appeal as expeditiously as possible - Petition allowed.
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2018 (12) TMI 1004
Detention of goods - discrepancy in e-Way bill - the value of the goods was mentioned as ₹ 388220/- instead of ₹ 3882200 - Held that:- If a human error which can be seen on naked eye is detected, such human error cannot be capitalised for penalisation. Normally, this Court could not have persuaded to accept the contention on prima facie value as it is a matter for decision by competent authority and this Court can only order release of the vehicle and goods as against Bank guarantee.
On verification, if it is found that the petitioner had paid the IGST in accordance with the value shown in Ext.P4, the vehicle and the goods shall be released to the petitioner on executing a simple bond. However, if it is found that the petitioner had not paid the IGST according to the value shown in Ext.P4, the petitioner's goods and vehicle need be released only on furnishing bank guarantee.
Petition disposed off.
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2018 (12) TMI 1002
Profiteering - purchase of one Honda City Car - benefit of Input Tax Credit (ITC) was not passed on - benefit of reduction in the rate of tax - Section 171 of the CGST Act, 2017.
Reduction in the tax rates - Held that:- It is clear from the DGAP's investigation report that there was no reduction in the tax rate in this case hence, the allegation of profiteering by the Respondent on account of change in tax rate is not sustainable.
Benefit of ITC - Held that:- The record also reveals that the base price charged by the Respondent in the post-GST sale invoice dated 14.10.2017 was ₹ 1,73,346/- less than the base price in the preGST sale invoice dated 28.04.2017 due to the reason that in the preGST period, the credit of Excise Duty, NCCD and Cesses etc. was not available to the Respondent as only credit of VAT was admissible while in the post-GST period, the Respondent was entitled to claim the ITC on the entire GST paid @ 45% and when the post-GST purchase invoice dated 29.09.2017 and sale invoice dated 14.10.2017 issued by the Respondent were compared, it was evident that the Respondent had not passed on the burden of the input GST paid @ 45% amounting to ₹ 2,88,661.95/- to the Applicant due to the reason that he was eligible to claim ITC on this amount.
It is also clear that there was increase in the ITC which the Respondent could avail in the post-GST era as compared to the pre-GST era and the pre-GST and post-GST sale invoices issued by the Respondent revealed that the base price charged from the above Applicant had been reduced as the benefit of ITC was passed on by the Respondent to the Applicant No. 1. Therefore, the allegation that the Applicant had not been given the benefit of ITC by the Respondent was not proved.
The provisions of Section 171 (1) of the CGST Act, 2017 have not been contravened in the present case - the application filed by the Applicant No. 1 requesting for action against the Respondent for violation of the provisions of the Section 171 (1) of the CGST Act, 2017 is not maintainable and hence the same is dismissed - application dismissed.
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2018 (12) TMI 1001
Profiteering - supply of "Eastern Meat Masala" - benefit of reduction in the rate of tax not passed - Section 171 of the CGST Act - Held 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. 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 sustainable.
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 Applicant and the same is accordingly dismissed - application dismissed.
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2018 (12) TMI 895
Services by way of conducting religious ceremonies by hiring various Pundits / Brahmins for the welfare of the people through its own website - GST on commission which the Applicant receives from pundits/website users or on the booking value received from website users. - registration u/s 22/24 of CGST Act, 2017 -
Exemption under Sr. No. 13 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017 - Held that:- Entry No.13 (heading-9963) covers the services by a person by way of “Conduct of any religious ceremony”. Thus it would cover services provided by a person who is conducting the religious ceremony - In terms, as per the GST law, applicant is acting as an “Intermediately” person. The applicant is taking booking of services online on his own web site from the customers and intimates the names of pundits/ Brahmins who would perform the job to the customers also on online. For that purpose he is charging to the customers as per the models submitted - the Applicant is not covered under the scope of exemption notification entry No .13.
In the present case Punditji's are the person who are actually performing the services like puja, abhishek to the customers and therefore they are eligible for exemption from GST for their supply of services - Hence the applicant is not covered under the entry No. 13 of exemption notification No. 14/2017-Central Tax (Rate) dated 28th June 2017 and therefore his services are not exempt. Hence it is not applicable to the Applicant.
Registration u/s 22/24 of CGST Act, 2017 - Held that:- The applicant is in state of Maharashtra and is doing the business from this state and therefore, Applicant would be liable to get registered considering the provisions of law and nature of business activity. We find that applicant is providing the services and doing the activities through electronic network of owns website - applicant is covered under section 2 (44) and 2(45) of CGST/MGST ACT as a “Electronic commerce” and “Electronic commerce operator”.
As per the definitions as above, applicant is squarely covered under the “Electronic commerce operator Considering the section 24-and the categories of persons mentioned therein, shall be required to be registered under this Act, the category No (x) is related to “every electronic commerce operator;” - the applicant is covered under Electronic commerce operator and shall be required to be registered under this Act without fulfilling of threshold limit. So that he is liable to get registration under the GST ACT.
If the Applicant is liable to pay GST, then on what value GST liability needs to be discharged, whether on the commission which the Applicant receives from pundits/website users or on the booking value received from website users? - Held that:- Consideration is first received by him on online as a whole and thereafter major part of it, is given to Pundits who are having an agreement with the applicant to provide their services as and when it is requisitioned but they are not the applicant's employees but are providing their services independently. The actual basic services like puja, abheshek etc are performed by the pundits or Brahmins which are exempted by nature of notification issued under GST ACT. The commission portion is received to the applicant out of total consideration received online from the service recipient. As per the provisions of law the commission is the supply of service and it would be the value on which he would be liable for GST and thus the Applicant would be liable to pay GST on the value of commission received from website users not for on total amount received.
Ruling:- The exemption under Sr. No. 13 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017 is not applicable to the Applicant.
Applicant is liable to get registered under section 22/24 of CGST Act, 2017 - As per the provisions of section 24 of CGST/MGST ACT, the applicant, is covered under “Electronic commerce operator Hence, he is liable to get registered.
The Applicant is liable to pay GST on the on the value of commission received from website users/ Pundits , not for on total amount received.
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2018 (12) TMI 894
Levy of GST - consultancy services rendered to Municipal Corporation of Greater Mumbai (MCGM) for an upcoming project of establishment & development of textile museum in Mumbai - functions entrusted to a municipality under Article 243 W - pure services - whether the consultancy services as per details above would be exempt under N/N. 12/2017-Central Tax (Rate) dated 28.06.2018?
Held that:- The applicant in their ARA have stated that Establishment and Development of a museum and recreation ground is not considered as a function entrusted to a Municipality under Article 243 of the Constitution. Since Establishment and Development of a museum and recreation ground is not a function listed in in the 12th Schedule to be read with Article 243 of the Constitution, the applicant has stated that in their view JJ is required to charge GST on consultancy services rendered to MCGM for the above project work, under GST laws.
The applicant has not provided the copies of contract, entered into by them with MCGM which would in detail give the exact nature of activities being done by them and which would be very crucial in deciding whether the services being provided by the applicant are in the nature of Pure Services or Works Contract Services.
The services being provided by the applicant to MCGM are in the nature of Works Contract Services and therefore they would in no way be eligible for exemption under Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2018, in respect of pure services.
Ruling:- The applicant shall charge GST on the consultancy services rendered to Municipal Corporation of Grater Mumbai (MCGM) for an upcoming project of establishment & development of textile museum in Mumbai.
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2018 (12) TMI 893
Levy of GST - Reimbursement of salary on behalf of foreign entity - pure agent or not - Held that:- The applicant is a Crew Recruitment and Placement Agency, and are involved in selecting and recruiting shipping personnel on behalf of their principal/ client who is a Foreign Ship Owner and for which they are charging Administration fees and paying GST on such Administration charges so received.
The Salary of Crews of RMS will be deposited in the account of the applicant in one go and the same will be transferred from the applicant’s account directly to the bank accounts of the Crews, by the bank, on the directions of the applicant - the entire amount received by the applicant from RMS towards salary of crews is disbursed as such. Hence with respect to this transaction it is crystal clear that the applicant is acting as a pure agent of RMS.
The applicant will be acting as a pure agent of RMS in as much as the entire amount received by them as Crews’ Salary will be disbursed to the Crew and no amounts from the said receipt will be used by the applicant for his own interest. In fact, for performing as a pure agent they will also be receiving compensation separately in the form of fixed fees to be charged as service charges.
The applicant will not be liable to pay GST on Salary amount received from RMS and disbursed to the Crew.
Ruling:- GST is not applicable on Reimbursement of salary on behalf of foreign entity.
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2018 (12) TMI 892
Classification of goods - Rates of GST - Unleavened Flatbreads - Leavened Flatbreads - Corn Chips, Corn Taco and Corn Taco Strips - Pancakes - Pizza Base - Applicability of entry No.99A of Schedule to the Notification No. 1/2017 - IGST Act dated 28/06/2017.
Whether Unleavened Flatbreads treated as ‘Khakra, plain chapatti or roti under Entry No. 99A of Schedule or as ‘bread’ as mentioned under Entry No. 97 or as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis or under any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? - Held that:- The food product paratha as is available in hotels and restaurants is plain, folded or stuffed. By applying the common parlance test we understand paratha as different and distinct food commodity from roti, chapatti etc. The product before us is examined from this view point. The product is plain like a chapatti and unstuffed like Gobhi paratha, Laccha paratha. To us, this is nothing but a plain chapatti and paratha is a misnomer for this food product supplied by the applicant. As such we do not find any difficulty in classifying the product as plain chapatti covered by entry 99A of notification no. of 34/2017 - all the products contain similar/ same ingredients, manufacturing process and all the products are used as staple food item in meal we find no difficulty to arrive at a conclusion that the products are covered by entry no. 99A of notification no. 34/2017.
Whether Leavened Flatbreads be treated as ‘as ‘bread’ as mentioned under Entry No. 97 or as Pizza Bread as mentioned under Entry No. 99 of Schedule or as Malt extract, food preparations of flour, groats, meal, starch or malt extract or under any other schedule? - Held that:- As per Webster dictionary the term bread has been defined as a usually baked and leavened food made of a mixture whose basic constituent is flour or meal - Pita is a yeast leavened round flatbread baked from wheat flour, sometimes with a pocket. From the ingredients and the manufacturing chart, we find that applicant uses similar/ same ingredients and same manufacturing process as that of bread - As there is no difference in the conventional bread and pita bread with respect to ingredients and manufacturing process, it is held that Pitta bread would squarely fall under entry 97 of the exemption notification.
Whether Corn Chips, Corn Taco and Corn Taco Strips be treated as ‘wafer’ under Entry No. 16 of Schedule III of Rate Notifications or as Malt extract, food preparations of flour, groats, meal, starch or malt extract not containing coca or containing less than 40% by weight of coca calculated on a totally defatted basis or under any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? - Held that:- The term wafer has not been defined under the Act or notification. However, we understand wafer as chips used as a snack. In fact the terms wafers and chips are often used interchangeably. Further from the facts submitted by the applicant that the end consumer fry the chip products which make them crispy similar to the product such as wafers. The Corn chips, Corn taco and corn taco chips are variants of chips eaten as a snack - the term wafers would include impugned products. And therefore these products would be classifiable under chapter 1905 3290 and liable to tax at @ 9% each under CGST and SGST Act.
Whether Pancakes supplied be treated as All Goods i.e. Waffles and wafers other than coated with chocolate or containing chocolate; biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread) as mentioned under Entry No. 16 of Schedule III of Rate Notifications or classified any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? - Held that:- The pancakes are manufactured by using ingredients like wheat flour, water, sugar, salt, milk, syrup, oil etc. Similarly we find that cake is an item soft sweet food made from a mixture of flour, fat, eggs, sugar, and other ingredients, baked and sometimes iced and decorated - Cake is mentioned under the chapter heading 1905 of customs and tariff Act 1975. The product cake is mentioned in the entry 16 under the head of “All Goods “i.e. waffles and wafers other than coated with chocolate or containing chocolate, biscuits; Pastries and cakes (other than pizza bread, khakhra, plain chapatti or roti, Waffles and wafers coated with chocolate or containing chocolate, papad, bread] - the impugned the product “Pancakes” is covered under the chapter heading 19059010 under the entry 16 of schedule Ill of GST ACT and liable to tax at appropriate rate.
Whether Pizza Base supplied be treated as ‘Pizza Bread’ as mentioned under Entry No. 99 of Schedule / of Rate Notifications or under any other Schedule Entry as per Rate Notification or Exemption Notification as your good office thinks fit? - Held that:- The products are manufactured by the Applicant i.e. pizza base using various ingredients including flour, water, sugar, salt, baking powder, yeast, oil etc. After raw material intake, the ingredients go through various processes including mixing, proofing, dough dividing, baking and cooling. As per entry number 99 of Schedule I to the Central Rate Notifications, the product description is ‘pizza bread’ - The Pizza base is required for manufacture of Pizza. It is not used for any other purpose. The manufacturing process and ingredients are different than bread, chapatti or Roti. It would not be covered under Entry 97 of Rate Notification or Exemption Notification - the impugned product Pizza base IS covered under entry 99 of schedule I of GST Act and would be liable to tax rate at appropriate rate.
Ruling:- The Unleavened Flatbreads products such as plain chapatti, Tortilla, Tortilla Wraps, roti, Roti rolls , Wraps, Paratha and Paratha wraps are covered under Entry No. 99 A of Schedule 1 and they would be liable to tax @ 5% (2.5 % each for CGST and MGST and 5 % for IGST).
The product Leavened Flatbreads stated in application such as Naan, Kulcha and Chalupa are not covered by the expression ‘bread’ as mentioned under Entry No. 97 of Exemption Notifications but they would be covered under residual entry 453 of schedule Ill of GST ACT and they would be liable for taxes @ 18 %( 9% CGST and 9% MGST ). However Pita Bread is covered by the expression ‘bread’ as mentioned under Entry No. 97 of Exemption Notifications.
The products like Corn Chips, Corn Taco and Corn , Taco Strips would be treated as ‘wafer’ under Entry No. 16 of Schedule III of Rate Notifications and it would be liable for taxes @ 18 9% CGST and 9% MGST
The product Pancakes supplied by the applicant would be treated as All Goods as mentioned under Entry No. 16 of Schedule III of Rate Notifications and it would be liable for taxes @ 18% (9% CGST and 9% MGST ).
The product, Pizza Base supplied by the applicant would be treated as ‘Pizza Bread as mentioned under Entry No. 99 of Schedule / of Rate Notifications and it would be liable for taxes @ 18% (9% CGST and 9% MGST ).
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2018 (12) TMI 891
Seeking Adjournment before AAR - Short period fixed for personal hearing - Classification of goods - Mahua De-oiled Cake - De-oiled Rice Bran - Input Tax Credit - purchase of Mahua Oil Cake/Rice Bran Oil cake used in the manufacturer of solvent extracted oil - Held that:- Rejection of the adjournment sought for the first date fixed by the Appellate Authority, that too when the Appellate Authority itself could not convene or could not hear the matter for the first 60 days of the period contemplated under Section 101 (2) of the Act, appears wholly harsh and unreasonable on the part of the Appellate Authority to have refused the short adjournment sought, and to have proceeded to decide the appeal itself on merits.
The frequency and length of the sitting/s may be facts known only to the concerned authorities depending on the number of pending applications/appeals and availbility of the members on certain dates. Communication of the date of hearing at short notice, without any prior indication of the same may often result in parties seeking adjounment for that reason itself. Therefore, a procedure providing for a prior indication of likely date of listing would be enough to put the applicants/appellants to notice in that regard, keeping in mind the spirit of the Act desiring speedy disposal of such matters.
In cases of repeated adjournments being sought, it may remain open to the concerned authority to impose appropriate costs while rejecting any adjournment application, in appropriate case, for just circumstances.
Petition disposed off.
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