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GST - Case Laws
Showing 41 to 60 of 218 Records
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2021 (1) TMI 1015 - AUTHORITY FOR ADVANCE RULING, HARYANA
Movable or Immovable property? - Temporary Structure (i.e. hall or pandal or shamiana or any other place) built up with Iron/Steel Pillars tight up with Nuts and Bolts (as shown picture enclosed) specially created for functions - Input Tax Credit - Iron/Steel Pillars tight up with Nuts and Bolt used for the creation of Temporary Structure (i.e. hall or pandal or shamiana or any other place) especially for functions - section 16 of the CGST Act, 2017 - CBEC through its Circular No. 58/1/2002-CX dated 15.01.2002 - HELD THAT:- As per the definition of goods some movable property is excluded from the category of goods whereas at the same time, some immovable properties are treated as goods. But the terms movable and immovable property have not been defined under the GST Act. In laymen terms, any goods that can moved is a movable property and which cannot be moved is immovable property.
The General Clauses Act 1897 and the Transfer of Property Act defines both these terms. Section 3 (26) of the General Clauses Act says: “immovable property” shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth”. Whereas, Section 3(36) defines movable property as “property of every description, except immovable property”. So as per this definition, any property which does not qualify to be immovable property, is a movable property. This definition of immovable property under the General Clauses Act is affirmative in nature as against the definition contained in the Transfer of the property Act 1882, which is negative in nature. As per TPA, immovable property does not include standing timber, growing crops or grass. It further says that “attached to the earth” means:
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
As per the definition of immovable property contained in the General Clauses Act and the Transfer of Property Act, it is clear that things attached to the earth or permanently fastened to anything attached to the earth is immovable property. Anything imbedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, qualifies to be attached to the earth. In the case of applicant, it is an admitted fact that the structure (shamiana, pandal or tent) constructed/ erected by the applicant is fixed to the foundation by nuts and bolts. But the applicant holds that this affixation of pillars and pre-fabricated shelter to the earth is not permanent. So, in essence, the question which needs to be dealt with by this Authority is whether this affixation of the structure with the earth or pillar imbedded in the earth is permanent or temporary - The THE COMMISSIONER TRADE TAX UP. LUCKNOW VERSUS TRIVENI NL. LTD. [2014 (4) TMI 842 - ALLAHABAD HIGH COURT] has observed that “permanently fastened to anything attached to the earth” has to be read in the context for the reason that nothing can be fastened to the earth permanently so that it can never be removed. If the article cannot be used without fastening or attaching it to the earth and it is not removed under ordinary circumstances, it may be considered permanently fastened to anything attached to the earth.
In this case, the applicant company is in the business of organizing wedding and other functions from its own premises at Ambience Golf Drive, Gurugram Haryana. Since, the premises where the structure has been erected is company's own premises, it suggests that the shamiana/ tent/pandal has been constructed/ erected for permanent enjoyment. It is not the case of applicant that it plans to dismantle and move the structure to some other place. The pictures attached with the application also depict that the civil work has been undertaken on a very large scale at the premises and this also indicates the permanent nature of the construction/ erected. Further, the concretionary base and the pillars used as platform and support to the structure is also of large dimensions and the platform or the structure cannot be put to beneficial use without the existence of the other. Merely because the walls and roofs have been replaced with pre-fabricated structure (an Engineering marvel), an immovable property cannot be categorized as movable property. Since, both the degree and nature of annexation/ attachment of the structure to the earth is strong and permanent, the structure in question is an immovable property.
The applicant is not entitle to the credit of input tax in view of the provisions of Section 17(5)(d) of the CGST/ HGST Act, 2017.
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2021 (1) TMI 1014 - GUJARAT HIGH COURT
Release of goods alongwith conveyance - Section 130 of CGST Act, 2017 - HELD THAT:- It appears from the materials on record that the matter is at the stage of MOV-GST 10 issued under the provisions of the Central Goods and Services Tax Act, 2017. Thus, the writ applicant has been issued with the showcause notice under Section 130 of the Act, 2017 calling upon him to show cause as to why the goods and conveyance should not be confiscated for the contravention of the provisions of the Act and the Rules as alleged in MOV 10.
It is expected that the writ applicant to file his reply to the showcause notice and appear before the authority in the confiscation proceedings. However, we direct the authority concerned to immediately look into the application filed by the writ application under Section 67(6) of the Act for the provisional release of the goods and the conveyance and pass an appropriate order in accordance with law, within a period of one week from the date of this order is presented before the authority.
The confiscation proceedings also should be concluded with an appropriate order latest by 28.02.2021. The writ applicant shall be given an adequate opportunity of hearing in the confiscation proceedings - Application disposed off.
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2021 (1) TMI 1013 - DELHI HIGH COURT
Provisional attachment of Bank Accounts - no notice under Sections 73 & 74 of the CGST Act has been issued to the petitioner as yet - Section 83 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- This writ petition is disposed off directing the respondents to, on or before 29th January, 2021, issue instructions to the banks aforesaid, of lapsing of the attachment earlier affected and impugned in this petition. However if there is any other order of attachment of the same bank accounts, the same be served on the petitioner, through the counsel, on or before 29th January, 2021.
It is clarified that even if the respondents, on or before 29th January, 2021 do not issue the instructions as aforesaid to the banks or do not serve on the petitioner through advocate any other order attaching the said bank accounts, the attachment effected on 9th January, 2020 of accounts shall stand quashed and the banks shall allow the petitioner to, after 29th January, 2021, operate the accounts - petition disposed off.
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2021 (1) TMI 1012 - GUJARAT HIGH COURT
Detention of goods alongwith conveyance - Section 129(1) of the GST Act - HELD THAT:- It appears that this writ application was filed at the stage of MOV10 and coordinate Bench of this Court thought fit to pass the order releasing the detained goods together for the conveyance. The matter is still at the stage of adjudication of the showcause notice issued in MOV-10.
It is expected that the writ applicant now to appear before the authority concerned and participate in the confiscation proceedings. It shall be open for the writ applicant to file his reply, if not yet filed, and make submissions for the purpose of getting the notice in MOV10 discharged. The authority concerned shall take appropriate decision in accordance with law bearing in mind the principle of law explained by this Court in the case of Synergy Fertichem Pvt. Ltd. Vs. State of Gujarat [2019 (12) TMI 1213 - GUJARAT HIGH COURT].
Application disposed off.
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2021 (1) TMI 1011 - GUJARAT HIGH COURT
Principles of Natural Justice - cancellation of registration - opportunity of personal hearing not provided - HELD THAT:- This writ application is disposed off, asking the writ applicant to prefer an application under Section 30 of the CGST Act at the earliest. Once such application is filed, the authority concerned shall pass appropriate order within 3 (three) days in accordance with the statement made by Mr. Gandhi, learned Standing Counsel for the respondents.
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2021 (1) TMI 1010 - GUJARAT HIGH COURT
Speaking to minutes is filed for inclusion of the captioned case - HELD THAT:- The speaking to minutes note is not required to be allowed. The captioned matter was already de-tagged at the relevant point of time.
The matter be listed in the week commencing after the regular physical Courts are resumed.
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2021 (1) TMI 1009 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - supply of restaurant service - Applicant had alleged that the Respondent had increased the base prices of his items and did not pass on the benefit of reduction in the GST rate by way of commensurate reduction in prices - contravention of Section 171 of the CGST Act, 2017 - Penalty - HELD THAT:- It is revealed from the record that the Respondent has been operating a total of 133 multiplexes in 18 states and dealing with 1650 items while supplying restaurant services after 15.11.2017. It is also revealed from the plain reading of Section 171 (1) of the CGST Act, 2017 that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the case record that there has been a reduction in the rate of tax from 18% to 5% w.e.f. 15.11.2017, on the restaurant service being supplied by the Respondent, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 without the benefit of ITC. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the present investigation has been carried out w.e.f. 15.11.2017 to 30.04.2019.
It is also evident that the Respondent has been dealing with a total of 1650 items during the period from 15.11.2017 to 30.06.2019. Upon comparing the average selling prices as per the details submitted by the Respondent for the period from 01.08.2017 to 14.11.2017 and the actual selling prices post rate reduction w.e.f. 15.11.2017 to 30.06.2017 the DGAP has reported that the GST rate of 5% has been charged w.e.f. 15.11.2017. however, the base prices of 1434 products have been increased more than their commensurate prices w.e.f. 15.11.2017 which established that because of the increase in the base prices the cum-tax prices paid by the consumers were not reduced commensurately, inspite of the reduction in the GST rate - While comparing the average pre rate reduction base prices with the post rate reduction actual base prices the DGAP has duly taken in to account the impact of denial of ITC in respect of the “restaurant service” being supplied by the Respondent as a percentage of the taxable turnover from the outward supply of the products made during the pre-GST rate reduction period by taking into consideration the period from 01.07.2017 to 31.10.2017 and not up to 14.11.2017.
It is further revealed from the analysis of the details of item-wise outward taxable supplies made during the period from 15.11.2017 to 31.03.2018 that the Respondent had increased the base prices of the items supplied as a part of restaurant service to make up for the denial of ITC post GST rate reduction. The pre and post GST rate reduction prices of the items sold during the period from 01.08.2017 to 14.11.2017 (Pre-GST rate reduction) and 15.11.2017 to 31.03.2019 (Post-GST rate reduction) have been compared and it has been found that the Respondent has increased the base prices by more than what was required to offset the impact of denial of ITC in respect of 1434 items (out of a total of 1650 items) sold during the above period. Thus, it is apparent that the Respondent has resorted to profiteering as the commensurate benefit of reduction in the rate of tax from 18% to 5% has not been passed on by him. However, there was no profiteering in respect of the remaining items on which there was either no increase in the base prices or the increase in base prices was less or equal to the denial of ITC or these were new products launched post-GST rate reduction.
Based on the pre and post-reduction GST rates, the impact of denial of ITC and the details of outward supplies (other than zero-rated, nil rated, and exempted supplies) during the period from 15.11.2017 to 30.04.2019, the amount of net higher sale realization due to increase in the base prices of the products, despite the reduction in the GST rate from 18% to 5% with denial of ITC or the profiteered amount has come to 3,85,30,314/- including the GST on the base profiteered amount. The details of the computation have been given by the DGAP in Annexure-22 of his Report. However, the DGAP vide his Supplementary Report dated 08.10.2020 has partially accepted the objection of the Respondent regarding under-reporting of the eligible ITC allowance - The DGAP has computed the input tax credit as a percentage of the total taxable turnover of the Respondent for the period July 2017 to October 2017 for the reasons cited in paras 26 & 27 of the DGAP report dated 31.01.2020.
Further, with effect from 15.11.2017, Respondent was not allowed to avail ITC in terms of Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017, Therefore, in terms of provisions of Section 16 (2) (a) Respondent was not eligible to take ITC w.e.f. 15.11.2017 on the strength of invoices received post 15.11.2017 when the aforesaid notification debarred the Respondent from ITC availment. As Respondent has received the taxable invoices post 15.11.2017 when he was ineligible to avail ITC in terms of Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017, therefore the same cannot be considered for computation of denial of Input Tax Credit to net turnover ratio.
The office of the DGAP has been charged with the responsibility of conducting a detailed investigation to collect the evidence necessary to determine whether both the above benefits have been passed on or not in terms of the provisions of Section 171 of the CGST Act, 2017 and the Rule 129. The above Rule has been framed by the Central Government under Section 164 of the CGST Act, 2017 read with Section 171 (3) which has the approval of the Parliament and all the State Legislatures and of the GST Council which is a constitutional body established under 101st Amendment of the Constitution and also has the approval of the Central Government and the State Governments. There is no provision in the above Act or the Rules which provides that the investigation shall be limited to the products against which complaint has been received. On the contrary, every product on which the rate of tax has been reduced is required to be investigated by the DGAP and report submitted to this Authority to determine whether the above benefits have been passed on as per the provisions of Section 171 of the above Act - The Respondent cannot get away by appropriating the benefit which he is legally bound to pass, on the ground that no complaint has been made in respect of the other products. Moreover, the benefit is not to be paid by him out of his own pocket, since it has been granted from the public exchequer to benefit the common consumers. Therefore, the above claim of the Respondent is not correct and hence the same cannot be accepted.
The Respondent is trying to deliberately mislead by claiming that he was required to carry out highly complex and exhaustive mathematical computations for passing on the benefit of tax reduction which he could not do in the absence of the procedure framed under the above Act. However, no such elaborate computation was required to be carried out as the Respondent was to maintain the base price of the product which he was charging as of 14.11.2017 and then add 10.22% of the base price on account of denial of ITC and charge GST @5% w.e.f. 15.11.2017. Instead of doing that he has raised his prices by adding more than 10.22% of the base prices as is evident from the above discussion. It is clear from the above narration of facts and the law that no procedure or elaborate mathematical calculations are required to be prescribed separately for passing on the benefit of tax reduction. The Respondent cannot deny the benefit of tax reduction to his customers on the above ground and enrich himself at the expense of his buyers as Section 171 provides a clear cut methodology and procedure to compute the benefit of tax reduction and the profiteered amount. Therefore, the above plea of the Respondent is wrong, and hence, it cannot be accepted.
The profiteered amount is determined as ₹ 3,10,56,9391- as has been revised vide the DGAP’s Supplementary Report dated 08.10.2020. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of ₹ 3,10,56,939/- in two equal parts of ₹ 1,55,28,470/- each in the Central Consumer Welfare Fund and the State Consumer Welfare Funds as mentioned in the Table ‘F’ Revised, as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of ₹ 3,10,56,939/- shall be deposited, as specified above, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner.
Penalty - HELD THAT:- The Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and hence he has committed an offence under section 171 (3A) of the CGST Act. 2017, and therefore, he is liable to penal action under the provisions of the above Section. However, a perusal of the provisions of Section 171 (3A) under which penalty has been prescribed for the above violation shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act,’ 2019 and it was not in operation during the period from 15.11.2017 to 30.04.2019 when the Respondent had committed the above violation and hence, the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, notice for the imposition of penalty is not required to be issued to the Respondent.
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2021 (1) TMI 972 - APPELLATE AUTHORITY FOR ADVANCE, RAJASTHAN
Classification - taxability - provision of hostel accommodation along with food facility to the students wherein consolidated amount is charged from the students - composite supply or principal supply - recovery of entire charge from the students - exemption from GST under Sr. No. 14 of the CGST (Rate) Notification No. 12/2017 dated 28.06.2017 as amended if the charges per day is less than ₹ 1000/- - taxability on supply of hostel accommodation along with food facility - CBEC Flyer No. 40 dated 01.01.2018.
HELD THAT:- In the instant case the appellant is supplying various services like supply of food, TV in dining hall, Playroom, Gym, Housekeeping of entire hostel premises, Room cleaning and Washing/ dry-cleaning of bed sheets & linen of rooms along with Hostel Accommodation service. The supply of various other services as detailed above with Hostel Accommodation service is not naturally bundled in normal course of business. Each service is an independent service and can be supplied separately. It is obvious that a person can live on the hostel without availing other services like food, TV, gym, etc; but to make ones stay more comfortable, the said ancillary services are availed by him - Rajasthan Authority’ of Advance Ruling has held that naturally bundled services are those services wherein one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. If current nature of supply of services is tested based on above factors, it can be ascertained that the provision of hostel accommodation could be a principal supply but ancillary services like food, gym, housekeeping, play room, cannot be said to arise naturally with the principal service of hostel accommodation and therefore are not bundied naturally with principal supply.
Rajasthan Authority of Advance Ruling has placed reliance on the ruling of West Bengal Authority for Advance Ruling in the case of Sarj Educational Centre [2019 (2) TMI 1605 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL] involving similar facts and circumstances, wherein the applicant was engaged in supplying food and other services, etc and it was held that they are not naturally bundled with the lodging service. All these components are independent of each other. The said ruling has been upheld by the Appellate Authority of Advance Ruling of West Bengal.
There are no infirmity in the Advance Ruling pronounced by Rajasthan Authority of Advance Ruling - the Advance Ruling pronounced by the Rajasthan Authority of Advance Ruling upheld - appeal dismissed.
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2021 (1) TMI 971 - SC ORDER
Raid - validity of search and seizure proceedings - Section 67 of the CGST Act - simultaneous proceedings of investigation when audit in progress - attachment of Bank Accounts - allegation of harassment and high-handedness - HELD THAT:- We are not inclined to entertain the Special Leave Petition under Article 136 of the Constitution of India.
SLP dismissed.
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2021 (1) TMI 970 - GUJARAT HIGH COURT
Constitutional validity of the proviso to Section 50 of the Central Goods and Services Tax Act, 2017 - interest on delayed payment of tax - HELD THAT:- Let Notice be issued to the respondents, returnable on 11.02.2021. The respondents shall be served directly through email. In the meantime, Mr. Choksi, the learned counsel appearing for the writ applicants shall furnish one set of entire paperbook to Mr. Devang Vyas, the learned Addl. Solicitor General of India, so that by the next returnable date, Mr. Vyas can seek appropriate instructions in the matter.
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2021 (1) TMI 969 - GUJARAT HIGH COURT
Provisional attachment of Bank Account - Section 83 of the CGST Act, 2017 - HELD THAT:- The Bank Account has been ordered to be provisionally attached under Section 83 of the CGST Act, 2017. This Writ Application need not be adjudicated on merits as the impugned order of provisional adjudication has outlived its statutory life. As per Section 83 of the Act, other provisional attachment shall cease to have effect after the expiry of period of one year from the date of order made under sub-Section (1). The impugned order is dated 24.10.2019. The period of one year expired way back in October 2020 - In such circumstances, it can be said that there is no provisional attachment of Bank Account in existence or in operation as on date.
This writ application disposed off.
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2021 (1) TMI 967 - RAJASTHAN HIGH COURT
Grant of anticipatory Bail - irregular input tax credit on the basis of invoices generated by the non-existing firms formed by the petitioner himself in the name of his employees - Section 438 of Cr.P.C - HELD THAT:- As per rejection bail order petitioner is proprietor of M/s Allied Enterprises and had purchased the goods amounting to about ₹ 32 Crore and got 4.97 Crore of input tax credit and the department is investigating the matter. If the petitioner is found to be correct, he should have to personally produce all the documents before the department and would also raise his grievance as to why he is not appearing before the department but he failed to clarify all these things.
Considering the submissions made by learned counsel for CGST and taking into consideration overall facts and circumstances of the case but without expressing any opinion on the merits/demerits of the case, it is not deemed proper to enlarge the petitioner on anticipatory bail - this anticipatory bail application is dismissed.
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2021 (1) TMI 929 - GUJARAT HIGH COURT
Maintainability of application - alternative remedy of preferring a statutory appeal - Provisional Release of detained goods alongwith Truck - Section 129 and 130 of the GST Act - HELD THAT:- As we are relegating the writapplicants to avail an alternative remedy of preferring a statutory appeal against the final order of confiscation, the request for provisional release of the goods and the vehicle pending final disposal of the appeal also should made before the appellate authority. In this regard, we may say that the writapplicants may prefer an application under Section66(6) of the Act for the provisional release of the goods and the vehicle. If any such application is filed, then the appellate authority shall take it out for hearing and may consider releasing the goods and the vehicle on the writapplicants depositing the amount towards the penalty and fine in lieu of the confiscation. We may clarify that according to Mr. Parikh, the amount of towards the tax has already been deposited. If the writ applicants agreed to deposit the entire amount, then in such circumstances, the appellate authority shall provisionally release the goods and the vehicle pending the final disposal of the appeal.
This writ application stands disposed of.
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2021 (1) TMI 925 - GUJARAT HIGH COURT
Maintainability of application - writ applicant has preferred an Appeal under Section 107 of the Act challenging the order of the confiscation - HELD THAT:- As the appeal has already been filed and is pending before the appellate authority, there is no good or valid reason for us to entertain this writ application.
Ms. Parikh, would submit that this writ application has been filed redressing the grievance with regard to the arbitrary action taken by the respondents. We may only say that while deciding the Appeal, the Appellate Authority can always go into the question as regards the legality and validity of the action taken by the authorities. We dispose of this writ application without expressing any opinion on the merits of the case, directing the Appellate Authority to immediately take up the appeal for hearing and decide the same in accordance with law.
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2021 (1) TMI 895 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Classification of goods - threaded metal nuts which function same as standard nuts - whether merit classification under the Tariff item 7318 16 00 and not under Tariff item 8708 99 00? - Challenge to AAR decision - HELD THAT:- The impugned goods can clearly be construed as the ‘parts and accessories” of the vehicles falling under the Chapter Headings from 8701 to 8705 and will merit classification under the Chapter Heading 8708, which covers the parts and accessories of the vehicles. Our observation is primarily attributed to the fact that the impugned products are manufactured by the Respondent as per the specifications/requirements approved by the automobile manufacturer, which is illustrated by the descriptions contained in the sample Purchase Order, placed by M/s. Tata Motors Ltd. to the Respondent, which amongst other things, mentions the drawing document number and materials, approved by M/s. Tata Motors Ltd. The said drawing document, designed and made by the Respondent, also contains the part number of the automobile manufacturer, i.e., M/s. Tata Motors Ltd., rendering the said impugned product unique, in terms of its specifications, and materials used in the manufacture of the impugned goods which are identified by the material code of the impugned goods, and thereby lending support to our observation that the impugned goods have been manufactured at the behest of the automobile manufacturer as per the materials and design specifications of the motor vehicles to be manufactured by the automobile manufacturer, and the same is supplied solely or primarily to the said automobile manufacturer, which is also corroborated by the condition laid in the said sample Purchase Order placed by M/s. Tata Motors Ltd., which stipulates that Sale of goods mentioned in the Purchase Order to Spare Market is strictly prohibited.
Thus, it has been established beyond doubt that the impugned goods are suitable for use solely or primarily with articles of Chapter Heading Nos. 87.01 to 87.05, and therefore, applying the principle laid down by the Hon’ble Supreme Court in the case of G.S. AUTO INTERNATIONAL LTD. VERSUS COLLECTOR OF C. EX., CHANDIGARH [2003 (1) TMI 700 - SUPREME COURT], it is manifest that the impugned products will be construed as parts of motor vehicles falling under Chapter Heading 87.01 to 87.05, and will merit consideration under the Tariff Item 8708 9900.
The commercial identity of the impugned goods would he the parts of the motor vehicles as discussed above. Further, though there may be some ambiguities as far as the functions of these impugned goods are concerned, which are in the nature of fastening, thereby fomenting the temptation to classify these goods under Chapter Heading 73.18 by considering them as parts of general use, it is to be stated that doing so would not be legal as per the ratio laid down by Hon’ble Supreme Court in M/S CAST METAL INDUSTRIES (P) LTD. VERSUS COMMR. OF CENTRAL EXCISE-IV, KOLKATA [2015 (11) TMI 833 - SUPREME COURT], wherein it has been held by the Hon’ble Apex Court that the functional test for the classification of the goods is not the relevant test. Hence, the impugned goods will not be construed as ‘parts of general use’, and accordingly will not merit consideration under the Chapter Heading 73.18 - further, the impugned goods are customized and tailor made for the automobile customers as per the specification approved by the automobile customers. Thus, the contention of the Respondent that the impugned goods are supplied to the customers across various sectors, and thereby, the impugned goods are to be construed as parts of general use, and therefore, warranting classification of the impugned goods under the Chapter Heading 73.18, is devoid of any merit, and hence not tenable.
The Respondent have heavily relied on the Hon’ble Supreme Court Judgement in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-III VERSUS M/S. UNI PRODUCTS INDIA LTD [2020 (5) TMI 63 - SUPREME COURT]. In this regard, it is observed that the issue involved in the above- mentioned case was classification of ‘Car Mats made of textile material’, and the said decision in the said case was based on the facts that the ‘Car Mats made of textile material’ were specifically excluded from Chapter 87. Hence, in this regard, it is opined that the facts and circumstances of the case referred to by the Respondent is entirely different from those of the case at hand, which involves the classification of Metal Nuts and Metal Nuts are not categorically excluded under any HSN explanatory notes, the Section Notes or the Chapter Notes either, and therefore is clearly distinguishable.
The impugned goods, i.e., Metal Nuts with metrical threading, Metal Nuts without metrical threading, and Metal Spring Nuts, will be considered as parts of motor vehicles falling under Chapter Heading from 87.01 to 87.05, and accordingly will merit classification under the Tariff Item 8708 99 00, as purported by the Appellant - Advance Ruling decision set aside.
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2021 (1) TMI 894 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
Classification of goods - Shatamrut Chyavan - falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST attracting ‘NIL” rate as per Sr. No. 102 of Notification No. 02/2017 - Central Tax (Rate), dated 28.06.2017 or can be treated as ‘waste of sugar manufacture, whether or not in the form of pellets under heading 2303’ attracting 5% of IGST as per Schedule I (Sr. No. 104) of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017 or not? - chalenge to AAR decision.
Whether the classification of the impugned product, falling under TSH 2309 90 10 of the Customs Tariff Act, 1975, as adopted to the CGST Act, 2017, attracting ‘NIL’ as per the List of Exempted Goods in terms of SI. No 102 of Notification No. 02/2017 - Central Tax (Rate), dated 28.06.2017, is correct or not? - HELD THAT:- The impugned product is also advertised, marketed, and sold, as cattle feed, which when fed in certain doses with other fodder to the cattle, like cows, buffaloes, goat, etc., is purported to increase the production of milk from such cattle along with increasing their immunity against the diseases. Thus, it is evident that the impugned product is perceived as cattle food having the aforementioned specific uses - The explanatory notes clearly say that molasses is not covered under heading 2303 but under 1703. A larger part of the Appellant’s product consists of molasses and molasses itself are covered under heading 1703. Moreover, it is also made clear that molasses prepared as animal food fall in heading 2309. Therefore, it is clear that the product of the Appellant does not fall under Heading 2303 but falls under Heading 2309. The Appellant has, neither in the written submissions nor during the hearing, given any concrete reasons or grounds to support his contention that the product does not fall under Heading 2309 but under Heading 2303. As regards the Appellant’s contention that the impugned product is not fed to the cattle in isolation but the same is fed by mixing with the other fodders in fixed prescribed dosage, and thereby, not deserving to be qualified as cattle feed, it is opined that the said fact about the impugned product would not have any bearing, whatsoever, on the status of the said impugned product which remains the “compounded animal feed” having specific use in animal feeding.
CBIC Circular No. 80/54/2018- GST, dated 31.12.2018, issued on the subject of the clarification of the GST rates and classification of goods, which stipulates that while deciding the classification of product claimed as animal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known to the trade as products for a specific use in animal feeding. HS Code 2309 would cover only such products, which in the form supplied, are capable of specific use as food supplement for animal and not capable of any general use. As it has been established that the impugned product is an animal feed having specific use, viz.- increasing the milk production of the cattle and increasing the immunity of the cattle to fight diseases, and the said impugned product is also known in the market as the cattle feed supplement only, therefore, the said impugned product would be classified as animal feed supplement, and accordingly would merit classification under the Chapter Heading 2309 and under the Tariff Item 2309 90 10, and would not attract any GST in terms of Si. No. 102 of the Notification No. 2/2017-C.T. (Rate), dated 28.06.2017.
Whether the impugned product can be considered as ‘waste of sugar manufacturing’ as being purported by the Appellant, and accordingly be classified under the Chapter Heading 2303 - HELD THAT:- The question does not fall within the purview of Section 97 (2) of the CGST Act. 2017. The question is not in relation to supply of goods or services or both, being undertaken or proposed to be undertaken by the Appellant. The MAAR cannot decide whether a specific product can be said to be a waste of sugar manufacture as the said question is not within the scope of Section 97 of the CGST Act. 2017. Also, the Appellant has not given any rebuttal of the finding of the MAAR that the said question does not fall under Section 97 of the CGST Act, 2017.
The ruling of AAR upheld.
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2021 (1) TMI 893 - BOMBAY HIGH COURT
Fraudulent CENVAT credit - section 174 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Direction that that till the next date Shri. Ashok G. Rajani and Shri. Amrit Rajani shall not be taken into custody on the basis of the show cause-cum-demand notice dated 30.12.2020 as well as in connection with the ongoing investigation under the CGST Act subject to compliance with the above condition.
Status-quo order passed yesterday would stand modified accordingly - Stand over to 04.02.2021.
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2021 (1) TMI 892 - DELHI HIGH COURT
Maintainability of petition - alternative remedy of appeal - Direction to the Respondents to grant refund - petitioner submits that though there is a remedy for filing further appeal under the CGST Act, however, since the Goods and Services Tax Appellate Tribunal is presently not constituted, he has no other option but to approach this Court - HELD THAT:- It is noticed that the prayer sought in the present petition does not seek any relief in respect of the order passed by the first Appellate Authority and in absence of any such challenge, we are unable to understand as to how the present petition would be maintainable.
At this stage, learned counsel for the Petitioner states that though he has urged grounds to challenge the order passed by the first Appellate Authority, however, since there is no specific relief sought to set aside the afore-noted order, he would like to amend the present petition by adding an appropriate relief in that regard. He requests for an adjournment to do the needful.
At his request, re-notify on 9th March, 2021.
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2021 (1) TMI 891 - GUJARAT HIGH COURT
Service of summons - calling upon to personally remain present before the concerned authority on 19th January 2021 - Section 70 of the C.G.S.T. Act, 2017 - HELD THAT:- The Form DRC-03 may be filled up provided the assessee decides to voluntarily make any payment. Even if there is any lapse on the part of the assessee and the department wants to recover a particular amount, it cannot exert pressure or administer threats for the purpose of filling up of the Form DRC-03.
Let Notice be issued to the respondents, returnable on 25th January 2021. The writ applicant No.2 shall appear in person before the authority concerned in response to the summons received by him under Section 70 of the Act. However, we make it clear that no coercive measures or steps shall be taken by the concerned authority against the writ applicant No.2. As serious allegations of threats, duress and pressure have been levelled against the team of officers that visited the premises of the writ applicants, we direct the respondents to file their reply by the next date of hearing without fail.
On the returnable date, notify this matter on top of the Board.
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2021 (1) TMI 849 - APPELLATE AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Levy of GST - Reverse Charge Mechanism - salary paid to Director of the company who is paid salary as per employment contract, after deduction of TDS as well as PF - situation if the Director also is a part time Director in other company also - Challenge to AAR decision - HELD THAT:- The Rajasthan Authority for Advance Ruling (AAR) in IN RE: M/S. CLAY CRAFT INDIA PVT. LTD., [2020 (4) TMI 228 - AUTHORITY FOR ADVANCE RULING RAJASTHAN] pronounced that the consideration paid to the Directors by the applicant company will attract GST under reverse charge mechanism and the situation will remain the same if the director is also a part time director in another company.
The CBIC has recently issued a Circular No. 140/10/2020 - GST dated 10.06.2020 under File No. CBEC-20/10/05/2020 -GST and clarified the issue in appeal. It has been clarified that (i) remuneration paid by companies to the independent directors or those directors who are not the employee of the said company is taxable in hands of the company, on reverse charge basis; and (ii) the part of Director’s remuneration which are declared as “Salaries in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017 - it is further clarified that the part of employee Director’s remuneration which is declared separately other than “salaries” in the Company’s accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consideration for providing services which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable. Further, in terms of notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse charge basis.
The remuneration, if any, paid by the appellant to the independent directors or those directors who are not the employee of the appellant is taxable in hands of the appellant, on reverse charge basis. Further, the part of Director’s remuneration which are declared as Salaries in the books of the appellant and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017. The part of employee Director’s remuneration which is declared separately other than “salaries” in the appellant’s accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consideration for providing services which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable and in terms of notification No. 13/2017 - Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e. the appellant, is liable to discharge the applicable GST on it on reverse charge basis.
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