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GST - Case Laws
Showing 121 to 128 of 128 Records
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2019 (2) TMI 126 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA
Intermediary services - pure and mere promotion and marketing services - after sale support services - place of supply of services - naturally bundled services - section 12 of the Integrated Goods and Services Tax Act, 2017 - composite supply of services - principal supply - client is overseas entity - exports or not - zero-rated supply - challenge to AAR decision.
Whether the promotion and marketing activities undertaken by the Appellant for the overseas Principal, are to be classified as ‘intermediary services’? - Held that:- There does not seem to be any difference between the meaning of the term “intermediary” under the GST regime and pre-GST regime. In the pre-GST regime, an intermediary referred to a person who facilitates the provision of a main service between two or more person but did not include a person who provided the main service on his account. Similarly, in the GST regime, an intermediary refers to a person who facilitates the supply of goods or services or both between two or more persons but excludes a person who supplies such goods or services or both on his own account. The phrase ‘such goods or services’ used in the definition of ‘intermediary’ implies that the person should not be supplying on his risk and reward entirely, the very goods or services whose supply he is arranging or facilitating - In the instant ease, the Appellant is facilitating the supply of the products of Brabender between the Principal in Germany and the Principal’s customer in India. He is not supplying the products of Brabender on behalf of the Principal. He is only arranging the contact between the Principal and the Principal’s customer and the actual supply of the products is done by the Principal directly to the customer. The service of facilitating a supply of goods between the Principal and the customers is provided by the Appellant to the overseas client. The Appellant is not supplying such goods on his own account.
The argument of the Appellant that the promotion and marketing services are supplied to the Principal on their own account and hence they fall within the exclusion clause of the definition of intermediary is not a correct interpretation of the law - the Appellant is clearly facilitating the supply of the products of the overseas client directly to the client’s customers in the territory of India and is not supplying such goods on his own account. Therefore, the Appellant does not fill within the ambit of the exclusion.
The decision of the AAR is upheld that the service of promotion and marketing of the products of the overseas client is in the nature of facilitating the supply of the products of the overseas client and is appropriately classified as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act - Having concluded that the service supplied by the Appellant is classified as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act, it automatically flows that the place of supply of such service will be in terms of Section 13(8) of the IGST Act.
Whether the after-sales service provided under a composite contract would amount to a composite supply and if so what would be the principal supply? - Held that:- There is no dispute that the Agency contract in question involves two taxable supplies of services i.e promotion and marketing service and after-sales support service. However in order for the supply to be termed as a ‘composite supply’, what is required is that the supply of the said services should at least be bundled, more specifically be ‘naturally bundled’, and supplied in conjugation with each other. The term ‘naturally bundled’ has not been defined in the GST Act - the question of being naturally bundled does not arise for the reason that every promotional activity with prospective customer does not result in a sale. Further, every sale does not necessarily mean that installation support or after sale support is required - the after sales support service, although rendered in a composite manner with the promotion and marketing service is not a composite supply. The price for the after sale support service is clearly identifiable and has been so stated in the contract itself - ruling of AAR upheld.
Whether the above contracts would qualify as exports in terms of Section 2(6) of the IGST Act and Will be a zero-rated supply as provided under Section 16 of the said Act? - Held that:- One of the important requirements for supply of any service to be treated as ‘export of service’ is that the place of supply of service is outside India. The provisions for determination of place of supply of services where the location of the supplier or the location of the recipient of services is outside India are contained in Section 13 of the IGST Act, 2017. Thus. the entire issue is intrinsically related to determination of ‘place of supply’ of service by the applicant - It is evident from the above that determination of place of supply is not a question on which an advance ruling can be sought. The Authority for Advance Ruling has been constituted in exercise of the powers conferred by section 96 of the Karnataka Goods and Services Tax Act, 2017, which Act extends to the whole of the state of Karnataka. The AAR is a creature of statute and has to function within the legal boundary mandated by the Acts. As the ‘place of supply’ is not covered by Section 97(2) of the Acts, the AAR was right in refraining from answering this question on the grounds of of jurisdiction - AAR ruling upheld.
AAR ruling upheld.
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2019 (2) TMI 125 - MADRAS HIGH COURT
Detention of vehicle along with goods - the driver of the vehicle did not extend proper cooperation - specific stand taken by the writ petitioner is that the driver without knowing the correct route had taken a wrong turn and headed towards Sivakasi - evasion taking place or not? - Held that:- It is not in dispute that the bill is addressed only to the writ petitioner's principal office at Sivakasi; delivery alone is to be made at Virudhunagar. Even if by mistake, a wrong instruction had been given to the driver of the vehicle to head towards Sivakasi. Still it would not really matter.
When the writ petitioner is a registered dealer, when the tax in respect of the goods have already been remitted and when the transportation of goods is duly covered by proper documentation, the respondent ought to have taken a sympathetic and indulgent view of the lapse committed by the driver of the vehicle - detention order dated 28.12.2018 and the order dated 11.01.2019 suffer from vice of gross unreasonableness and disproportionality - By directing the writ petitioner to pay a sum of ₹ 5,000/- towards fine to the respondent, the orders impugned in this writ petition stands quashed - petition allowed.
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2019 (2) TMI 124 - MADRAS HIGH COURT
Jurisdiction to detain the goods - classification of goods in dispute - power of Assistant state tax officer to call upon the person in charge of the conveyance to produce the documents in question for verification - Held that:- there cannot be any doubt that the fourth respondent is the notified Proper Officer in this case. - Similar issue came up for consideration before the Hon'ble Kerala High Court in N.V.K. Mohammed Sulthan Rawther and Sons and Willson Vs. Union of India [2018 (11) TMI 1503 - KERALA HIGH COURT] - The Hon'ble Kerala High Court held that in such cases at best the inspecting authority can alert the assessing authority to initiate the proceedings “for assessment of any alleged sale, at which the petitioner will have all his opportunities to put forward his pleas on law and on fact - the squad officer can intercept the goods, detain them for the purpose of preparing the relevant papers for effective transmission to the jurisdictional assessing officer.
The squad officer can intercept the goods, detain them for the purpose of preparing the relevant papers for effective transmission to the jurisdictional assessing officer. It is not open to the squad officer to detain the goods beyond a reasonable period. The process can at best take a few hours.
The Commissioner of Commercial Taxes, Chennai is directed to issue a circular to all the inspecting squad officers in Tamil Nadu not to detain goods or vehicles where there is a bonafide dispute as regards the exigibility of tax or rate of tax.
Petition allowed - decided in favor of petitioner.
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2019 (2) TMI 66 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA
Classification of traded item - Power Bank - Whether the “Power Bank”, traded by the Applicant, is classifiable under Heading 8504 40 90 as ‘Static Converter -Others’? - Held that:- The principal function of the instant product is to store the electricity in the battery of the said product and to supply the same when required. Hence it is pertinent to mention here that the battery in the Power Bank is the main / core part of the device and without the battery the Power Bank would not function in the required manner. The charge management system is an ancillary circuitry for Charging the battery and the voltage boost converter is also an ancillary circuitry to draw the current from the battery at the relevant rating, depends on the load of the device connected. The Power Bank can also be used in the absence of the said voltage booster system, in which Case only the prescribed / pre-determined rate of current only can be drawn - the principal function of Power Bank is only to charge, even though the additional circuitry is embedded in it for drawing required rated current depends on the load.
The accumulators are covered under heading 8507 whether or not they include any ancillary components which contribute to their function of storing and supplying electric energy. Further the. accumulators are classified under the heading 85.07 even if they are designed for use with a specific device. Therefore, even though the battery in the said “Power Bank” is attached to the ancillary circuitry of “Voltage Booster System”, for effective function of the said battery, the principal function of the said Power Bank remains the same i.e storing and supplying of electric energy and ‘hence the said product merits classification of the heading 85 07. as an accumulator.
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2019 (2) TMI 65 - AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH
Classification of supply - Supply of goods or supply of services - composite supply or principal supply? - supply of books by CHHATTISGARH TEXT BOOK CORPORATION as per instruction of School Education Department CG [Loksikshan Sanchnalay) after printing the Syllabus decided by the SCERT - supply of books by CHHATTISCARH TEXT BOOK CORPORATION as per instruction of various agencies of school Education Department CC such as Rajiv Gandhi Siksha Mission/ SCERT/office of District education officer etc.- zero rate sales or not - Held that:- It is clear from the information provided by CHHATTISGARH TEXT BOOK CORPORATION that as per standing order issued by the State Government it performs activities related to various academic classes - the State Government has constituted the CHHATTISGARH TEXT 300K CORPORATION for various task in a continuous manner according to which CHHATTISGARH TEXT BOOK CORPORATION supplies the books owned and printed by it to School Education Department and Rajiv Gandhi Shiksha Mission every year whose syllabus is being approved by the experts.
In the instant case in hand, ownership of printed books is never transferred to the School Education Department and Rajiv Gandhi Shiksha Mission etc. i.e. here the ownership of printed books at all times, lies with the CHHATTISGARH TEXT BOOK CORPORATION and more-over the sale price is being computed with reference to 'sale of books' in applicant's books of accounts.
Supply of books, printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply. It is to be noted that in case of composite supplies, taxability is determined by the principal supply - from the details put forth by the applicant before us, it is observed that had it been the case where the printer of books engaged by Chhattisgarh Text Book Corporation for getting the books printed where only the content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belongs to the printer, supply of printing [of the content supplied by the recipient of supply] would definitely qualify being treated as the principal supply and such supplies would constitute supply of service, which is not the case here.
This, in this case supply of goods is involved i.e. ‘supply of specified printed educational books'/ which is the principal supply and accordingly, the said supply merits being treated as “printed books” attracting zero rate as specified under serial no. 119 (“Printed books, including Braille books”) of notification no. 2/2017-State Tax (Rate) No. F-10-43/2017CT/V/70/ Dated 28-06-2017.
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2019 (2) TMI 64 - AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH
Rate of GST - Exempted supply or not - supply of services to Solid waste management, Garbage Collection, Disposal, Water Supply, Cleaning of Colony - Pure Services - N/N. 12/2017 dated 28th June, 2017 - Governmental Board - Authority issuing work order to the applicant i.e. Chhattisgarh Housing Board - public utility services - Held that:- Chhattisgarh Housing Board is a “Government Authority” as per No. 12/2017-State Tax (Rate) No. F-10- 43/2017/CT/V(80), Naya Raipur, Dated 28.06.2017 and as amended by Notification No. 31/2017-State Tax (Rate) No. F-10-82/2017/CT/V(146), Naya Raipur, Dated 13.10.2017 - Chhattisgarh Housing Board is a Government Authority fully owned by the State Government.
Whether the nature of service supplies being provided by the applicant falls under 12th schedule, Article 243W of the Indian Constitution? - Held that:- The service supply to be provided by the applicant by their very nature appear to fall in the list of services enumerated under serial no. 5, 6, 8, 10, 12 and 17 of 12th schedule of Article 243W of the Indian Constitution, thus qualifying the admissibility criterion. It has also been categorically stated by the applicant that the said services to be provided to Chhattisgarh Housing Board does not involve any transfer/sale of any goods - the said services provided by the applicant to Chhattisgarh Housing Board qualifies being placed under the category of services as stipulated under Notification No. 12/2017-State Tax (Rate) No. F-10-43/2017/CT/V(80), Naya Raipur, Dated 28.06.2017 and hence is exempt.
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2019 (2) TMI 63 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Input tax credit - GST paid for hotel stay in case of rent free hotel accommodation provided to General Manager and Managing Director of the Applicant - invoice for quality claim raised by the Applicant on POSCO Daewoo Corporation located in Korea - export of service - recovery of Parents Health Insurance expenses from employee - supply of service or not.
Whether Input Tax Credit is admissible in respect of GST paid for hotel stay in case of rent free hotel accommodation provided to General Manager and Managing Director of the company? - Held that:- As per Section 16 (1) of the CHST Act, ITC is available on the tax charged on any supply of goods or services or, both to the applicant which are used or intended to be used in the course of furtherance of their business - the Hotel Accommodation is being used by the applicant as a residential premises of their MD/ GM which is for the personal comfort of both and therefore in view of the provisions of Section 17(5)(g) we hold that they are not eligible to claim the ITC for the same.
Whether invoice for quality claim raised by the Applicant on POSCO Daewoo Corporation located in Korea will be treated as '“export of service”? - Held that:- In the present case, in respect of the so called defective goods they have not stated whether the goods were sold as such to their clients or whether the goods were sold to their customers after they have carried out “low value-added processing function in respect of some of the traded goods based on customer's requirements - the complete details regarding the transaction have not been submitted by them and therefore this issue is not answered.
Whether recovery of Parents Health Insurance expenses from employee in respect of the insurance provided by the Applicant amounts to “supply of service” under Section 7 of the Central Goods and Service Tax Act, 2017(CGST Act, 2017)? - Time of supply - value of supply - input tax credit of GST charged by the insurance company - Held that:- Appellant are not rendering any services of health insurance to their employees and hence there is no supply of services in the instant case. Since there is no supply, we do not find the need to answer the second part of this question - the Applicant cannot claim input tax credit of GST charged by the insurance company.
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2019 (2) TMI 62 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Application for withdrawal of appeal - Levy of GST - Export of consultancy service to Foreign Company and Amount received 100% in foreign currency through Bank - Held that:- The Application in GST ARA form No. 01 of M/s. PLATINA BUSINESS MANAGEMENT PRIVATE LIMITED is disposed off as being withdrawn unconditionally.
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