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GST - Case Laws
Showing 41 to 60 of 157 Records
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2021 (4) TMI 939
Refund of excess GST paid - GST paid twice over or not - lawful bar or any impediment under procedural law, to justify availing of the refund claims - Section 54 of the CGST Act, 2017 - HELD THAT:- The appellant issued invoice No.1 to M/s RITES of taxable value ₹ 11,74,98,541/- and GST ₹ 1,40,99,825/- and also issued Debit Note of taxable value ₹ 9,53,12,728/- and GST ₹ 1,14,37,527/-. In this regard they issued Credit Note No.1 and 2 of that much of amount to negate effect of invoice and debit Note. The appellant further issued invoices No.2 in the name of MOHFW of taxable value of ₹ 11,83,89,351/- and GST ₹ 1,42,06,722/-. The appellant mentioned wrong place of supply in the invoice, therefore, the appellant issued credit Note 3 against invoice No.2. Thereafter the appellant issued invoice No.3 to MOHFW of the same value and GST.
In this case, the appellant has issued 3 Credit notes and one debit note, therefore this case is covered under the provisions of Section 34 of the CGST Act, 2017. Further it is found that the appellant has reported credit notes involved GST amount of ₹ 3,98,70,298/- in GSTR-1 of Sept.,2018 (which has been filed after 30.09.2018) but from GSTR-3B of Sept.,2018, it appears that they did not adjust liability as per Section 34(2) of the CGST Act, 2017.
The similar issue has been dealt by the Central Board of Indirect Taxes and Customs, New Delhi vide Circular NO.137/07/2020-GST dated 13.04.2020, wherein it has been clarified that liability may be adjusted subject to time limit and conditions as per provisions of Section 34 (2) of the CGST, Act, 2017 - the appellant should adjust the tax liability in the GST return for the month of June, 2018, August, 2018 and September, 2018, but the appellant has failed to do so, therefore, he is not entitled to claim refund as it is not a case of excess payment of tax.
Whether the Appellant entitle to claim refund of excess paid tax in terms of Section 54 of the CGST Act, 2017? - HELD THAT:- In this case 3 credit notes/ one debit note has been issued for value and GST amount against one supply of goods, therefore it is covered under the provisions of Section 34 of CGST Act, 2017 and the appellant was required to adjust such excess payment of tax in GST returns of those particular month (s). Therefore, this case is not related to refund of excess payment of tax as per provisions of Section 54 of CGST Act, 2017.
Appeal disposed off.
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2021 (4) TMI 938
Classification of goods - rate of GST - fruit juice-based drinks - to be classified as “Carbonated beverage with fruit juice” as per Para 3A definition in FSSAI Act or not - taxable under the category of “Other” under CTH 2202 10 90 or otherwise? - persevered percentage of fruit or pulp in the beverages to call them as carbonated fruit beverages or drinks under the GST Act? - challenge to AAR decision - AAR held that product 'K Juice Grape' falls under the category of “Other” under CTH 2202 10 90. The applicable rate of tax is 14% CGST vide Sl.No.12 of Schedule IV under Notification No.11/2017-Central Tax (Rate) and 14% under SGST at 14% vide Sl. No.12 of Schedule IV under Notification No.II(2)/CTR/532(1-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended.
HELD THAT:- The product prepared from juice to which water, peel oil, fruit essences and flavours, salt, sugar, invert sugar, etc appropriate to the product are added and processed by heat in an appropriate manner so as to prevent spoilage is categorised under para 2.3.10, above and the products under this category are not carbonated. The manufacturing process furnished by the appellant, states that the process involves, addition of Grape juice (13%) to the filtered sugar solution (86%-76% RO water and 10% Sugar) in a blending tank which is subjected to Mild Thermal Treatment (loss of water by 2 to 3%), cooled to room temperature, to which additives and preservatives as per the formulation and coloring & flavoring agent are added - the products prepared from fruit juice and water or carbonated water with the minimum Fruit content of not less than 10.0 percent in cases of fruits other than Lime or Lemon juice falls under this category. In the case at hand, the product has a content of fruit juice as required under this Regulation 2.3.30, contains sugar and other ingredients appropriate to the product and is carbonated and therefore we do not find any reason to deviate from the finding of the Lower Authority that the product in hand is 'Carbonated Fruit Beverages or Fruit Drinks'.
The schema of arrangement in the CTH under consideration is based on whether the product is water/ aerated water flavoured with fruit juices and containing sugar, etc which may be carbonated [220210] or a non-alcoholic beverage of Fruit pulp/juice-based drink [220299]. In the case at hand it is evident that the product contains fruit juice but is not 'Fruit pulp or Fruit juice based drink' but a Carbonated fruit beverage as marketed by the appellant and therefore, the product is not classifiable under CTH 22029920 as claimed by the appellant and is rightly classifiable under CTH '2202 1090-Other' as has been decided by the lower authority who have dealt in detail the applicable Food regulations as per FSSAI and the CTH 2202 readwith the explanatory notes to arrive at the said conclusion.
Pre-GST Tax incidence on the product was 40% whereas in the GST regime, it was proposed to be taxed at 28%. GST Council has agreed to the recommendation as can be seen from the Minutes of the Meeting, the relevant para is: From item No. 43 to 57 of Annexure-III. the Council had no objection and approved the recommendation of Fitment Committee. The Hon’ble Minister from Uttar Pradesh raised the issue about item at SI. No. 58 of Annexure III i.e. Extra Neutral Alcohol (ENA).
There are no reason to interfere with the Order of the Advance Ruling Authority in this matter - appeal disposed off.
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2021 (4) TMI 937
Levy of GST - reimbursement of the subsidiary company to its ultimate holding company located in a foreign territory outside India - rate of GST - HELD THAT:- GST is to be paid on such amounts of expenses reimbursed at the time determined as per Section 13 of the GST Act, as it represents the part of consideration received in advance by the appellant from its recipient (notwithstanding that the same is later included in tax invoice of the appellant) and to be paid at the time of reimbursement as by then the actual expenses borne by the recipient is known.
Rate of GST - HELD THAT:- The applicable rate of GST on such expenses incurred by the recipient and reimbursed by the appellant is the same rate at which the appellant charges for the software development service supplied by the appellant to the overseas holding company, on the ground that the expenses are part of the taxable value of such services and attract the same rate indicated in the tax invoice for the software development charges issued by the appellant on the overseas holding company.
Appeal disposed off.
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2021 (4) TMI 936
Seeking clarification from the court in view of the first proviso to section 98(2) of the central goods and service tax act 2017 to enable the sixth respondent to WP namely AAR to pass orders in that application - Whether pendency of the Writ petition 24412 dt 19/08/2019 shall not preclude the AAR from deciding the application made by the Petitioner namely the PHFMS?
HELD THAT:- The appeal was filed by the appellant mainly on the ground that in spite of the facts mentioned in detail on the merits of the case in the application before AAR along with the documentary evidences submitted before the AAR, the AAR have not given their ruling citing the section 98(2) of the CGST Act, as a constraint in giving their rule on the issue raised by the applicant - The applicant has filed this appeal with Appellate authority for Advance Ruling with prayer to direct the AAR to consider their application dt 15/08/2019 and pass appropriate orders as per the law and facts put before them or alternatively modify the order passed by AAR by giving clarification on issues raised by the applicant whether GST is applicable on above said services to be provided by the applicant to DME or whether the said services are exempted under notification no. 12/2017 among other grounds of appeal that may be adduced at the time of hearing.
The Order of the Advance Ruling Authority was right, since at the material time there was a petition filed by the appellant, pending before the Hon'ble High Court in this matter. Therefore, there is no need to interfere with the order of the AAR.
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2021 (4) TMI 935
Exemption from GST - inward supply of services - upfront lease amount paid to M/s. RLDA for the development of Multi functional complex (Operational building) at Erode Railway junction for long term lease for 45 years - HELD THAT:- The provisions of section 103 categorically states that the ruling pronounced is binding only on the appellant. It automatically flows that if a recipient obtains a ruling on the taxability of his inward supply of goods or services, the supplier of such goods or services is not bound by that ruling and he is free to assess the supply according to his own determination, in which case, the ruling loses its relevance and applicability even. Any law provision has to be interpreted in a constructive and harmonious way keeping in mind the object of the purpose of the provision - On a conjoint reading of the provisions of Section 95(a), section 97 (2) and Section 103, it is opined that a supplier in the capacity of a recipient of his inward supplies only and not vice versa is only eligible to seek an advance ruling and not a mere recipient of goods or services in question even when he may otherwise be a supplier of his own goods or services.
The Order of the Advance Ruling Authority in this matter is confirmed - appeal disposed off.
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2021 (4) TMI 934
Classification of supply of services - pure services relating to waste collection, segregation, treatment, transportation and disposal services under the service agreements entered with both concessionaries - N/N. 11/2017- C.T.(Rate) dated 28th June 2017 - Exempt form GST or not - HELD THAT:- When the bid for services to GCC is directly with the appellant and the services are to be done by the appellant to GCC, why appellant entered into agreement with concessionaire, who has been promoted by the appellant itself, though out of question here, appears somewhat strange. However, the answer lies in the fact that the very nature of concessionaire agreement / bid with GCC involves supply of bins, construction of sheds, vehicles, mechanical sweepers, etc., along with other goods and services; therefore, the appellant who only won the bid and should have performed the activities directly to the GCC, floated two concessionaires who will procure the goods and supply to the appellant, who in turn will provide the services, so as to be termed to be ‘pure services’ allegedly to enable them qualify themselves under the exemption notification. This artificial separation of activities to be performed wholly by the successful bidders and to be provided to the GCC, is a colourable device to avail the exemption under GST and legally and factually not tenable.
Appellant is a totally different entity than from concessionaires in as much as they are all separately incorporated and separately registered with GST and they are distinct persons as per GST Act. So, on the basis of holding equity, they cannot claim to be on par with the concessionaire, who otherwise too are ineligible for the exemption, being the provider of composite supply of goods and services to GCC anyway.
The order of the Advance Ruling Authority is upheld - appeal disposed off.
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2021 (4) TMI 933
Levy of GST - leasing of pathway to a person to her/his dwelling unit by CMRL - Challenge to AAR decision - Original Authority has ruled that leasing of pathway by the appellant to Dr. Prema (lessee) by way of shared access of the Non-residential property held by the appellant is taxable under GST.
HELD THAT:- The appellant had initially acquired the property (including the land for which shared access is extended to the land owner) for public purpose from the land owner and paid the considerations. The land owner had disputed the settlement before Civil Court and thereupon the appellant had entered into an MOU for out-of-court settlement. One of the claims accepted by the appellant is to extend the shared access of the pathway to the land owner for a consideration for a specific period. The issue is on this activity of grant of shared access for a consideration by the appellant - easement is a right one possesses over certain other land for the beneficial enjoyment of his land, to do and continue to do something or to prevent and continue to prevent something being done on such land, on parting of the said other land. Thus ‘easement' is a right a person holds on the land which is not his but a necessity for enjoyment of his property and is not granted but acquired. In the case at hand the appellant had acquired the land of the landowner and compensated monetarily along with agreeing to grant the shared access to the pathway for a specific period on payment of lease rentals. In respect of right-to-way as easement, it is the right of the landowner, held with him on account of sale of the land appurtenant to the pathway and such right flows automatically on sale.
In the case at hand, however based on the Memorandum of Understanding, the landowner is granted shared-access of the pathway from the acquired land for a specific period of 35 years on payment of lease rentals and is also termed as 'lease' in the said MOU. Therefore, the shared access granted by the appellant to the land owner against lease rentals is not 'easement' acquired/held by the landowner on account of the sale of land. Once it is held that the nature of shared access is not an easement held by the land owner, the contention of the appellant does not hold any merit.
The land once acquired for business purposes becomes a non-residential property. The Landowner has been granted the right of shared access enabling the land owner access to the road. This right to use the pathway being common to both the appellant and the landowner, the pathway cannot be termed as land appurtenant to the residential dwelling as claimed by the appellant - Transfer of right to use the space without the transfer of space per-se also conveys the right to occupy.
In the instant case, it is not a lease of the pathway but only rights are granted to the land owner by the appellant for the shared access. It is seen that the grant of access to the pathway is a right given by them to the landowner. This activity of agreeing to grant rights for shared access of the pathway is an “act of agreeing to tolerate an act” and is classifiable under SAC 999794 under “other miscellaneous services/Agreeing to tolerate an act' and is taxable to 9% CGST and 9% SGST as per SI.No.35 of Notification 11/2017 CT(Rate) dated 28.06.2017 as rightly held by the Lower Authority.
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2021 (4) TMI 932
Exemption from GST - Supply of Man Power services provided by M/s KEONICS and M/s GEMINI SECURITY AND ALLIED SERVICES to applicant (HDMC) - Pure services - exemption under N/N. 12/ 2017 of CGST (rate) read with Notification No.02/ 2018 CGST (rate) - HELD THAT:- Section 95 (c) of the CGST Act 2017 defines “Applicant” as any person registered or desirous of obtaining registration under the said Act - It could be easily inferred that any person registered or desirous of obtaining registration under CGST Act 2017 can seek advance ruling only in relation to the supply of goods or services or both being undertaken or proposed to be undertaken.
M/s HDMC, who have filed the instant application is not a supplier of either goods or services or both but is a recipient of services. Thus the instant application is not admissible and liable for rejection in terms of Section 98(2) of the CGST Act 2017.
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2021 (4) TMI 931
Levy of IGST - import as well as supply of “Prepared Laboratory Reagents / Pharmaceutical Reference Standards (PRS)” - taxable at the rate of 12% or Entry No.453 to Schedule III attracting a levy of Integrated Tax at the rate of 18%? - Entry No. 80 in Schedule II to the Notification No. 1/2017-Integrated Tax (Rate) dated 28-06-2017 (as amended) - HELD THAT:- The facts of the case are identical to the ruling passed by this authority in the case of IN RE: M/S. CHROCHEMIE LABORATORY PVT. LTD., [2019 (10) TMI 871 - AUTHORITY FOR ADVANCE RULING, KARNATAKA], wherein it was ruled that Entry. No. 80 of Schedule II to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to prepared laboratory reagents - The Karnataka Appellate Authority of Advance Ruling, while disposing the appeal filed by M/s. Chromachemie Laboratory Pvt. Ltd., has set aside the aforesaid ruling in IN RE: M/S. CHROMACHEMIE LABORATORY PRIVATE LIMITED [2020 (1) TMI 795 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA].
The Pharmaceutical Reference Standards (Prepared Laboratory Reagents) imported and supplied by the Appellant and classified under Tariff Item 3822 00 90 of the Customs Tariff Act, 1975 is covered under Entry No. 80 of Schedule-II to Notification No. 1/2017-Integrated Tax (Rate) dated 28th June, 2017 attracting a levy of Integrated Tax at the rate of 12%.
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2021 (4) TMI 930
Classification of goods - prepared laboratory reagents/ Pharmaceutical Reference Standards - correct classification is Notification No. 01/ 2017-IT (R) is Sr. No. 80 of Schedule II attracting a levy of 12% or Sr. No. 453 of Schedule III attracting a levy of 18 %?
HELD THAT:- The facts of the case are identical to the ruling passed by this authority in the case of IN RE: M/S. CHROCHEMIE LABORATORY PVT. LTD., [2019 (10) TMI 871 - AUTHORITY FOR ADVANCE RULING, KARNATAKA], wherein it was ruled that Entry. No. 80 of Schedule II to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to prepared laboratory reagents - The Karnataka Appellate Authority of Advance Ruling, while disposing the appeal filed by M/s. Chromachemie Laboratory Pvt. Ltd., has set aside the aforesaid ruling in IN RE: M/S. CHROMACHEMIE LABORATORY PRIVATE LIMITED [2020 (1) TMI 795 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA].
The Pharmaceutical Reference Standards (Prepared Laboratory Reagents) imported and supplied by the Appellant and classified under Tariff Item 3822 00 90 of the Customs Tariff Act, 1975 is covered under Entry No. 80 of Schedule-II to Notification No. 1/2017-Integrated Tax (Rate), dated 28th June, 2017 attracting a levy of Integrated Tax at the rate of 12%.
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2021 (4) TMI 929
Supply or not - supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India - shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in located in USA, UK and Canada (non-taxable territory) - printing charges for printing of books charged by the Printer located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST - services received by the applicant from Foreign service provider such as warehousing of printed books located in USA (non-taxable territory), under reverse charge mechanism - input tax credit.
Whether the supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India by the applicant are treated as supply under GST? - HELD THAT:- Schedule III, relevant to Section 7 of the CGST Act 2017, at clause 7 specifies that “Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India” shall be treated neither as a supply of goods nor a supply of services - supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India does not amount to supply under GST, in terms of clause 7 of Schedule III, relevant to Section 7 of the CGST Act 2017.
Whether GST is levied on the shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in located in USA, UK and Canada (non-taxable territory)? - HELD THAT:- The supplier providing the shipping services to the applicant is outside India, the recipient of the said service i.e. the applicant is within India and the place of supply is in India in terms of Section 13 of the IGST Act 2017. Thus the impugned service squarely qualifies to be an import of service, in terms of Section 2 (11) of the IGST Act 2017, in the hands of the applicant and hence the amount paid by the applicant towards the said shipment service is exigible to GST, under Reverse Charge Mechanism.
Whether printing charges for printing of books charged by the Printer located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant? - HELD THAT:- In the instant case, the content of the books is supplied by the applicant, who owns the said content i.e. usage right to the intangible inputs. Further the physical input i.e. the paper used for printing the books belongs to the printer and hence both the conditions are fulfilled - it is clearly evident that the supplier providing the printing services to the applicant is outside India, the recipient of the said service i.e. the applicant is within India and the place of supply is in India in terms of Section 13 of the IGST Act 2017. Thus the impugned service squarely qualifies to be an import of service, in terms of Section 2(11) of the IGST Act 2017, in the hands of the applicant. Hence the printing charges for printing of books charged by the Printer located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant.
Whether the services received by the applicant from Foreign service provider such as warehousing of printed books located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST? - HELD THAT:- Though the supplier is located outside India and the recipient is located in India, the place of supply of service is outside India, in terms of Section 13 of IGST Act 2017. Therefore, the impugned service is not covered under import of service and hence is not exigible to GST under RCM basis on expenses incurred on warehousing charges of printed books.
Whether input tax credit can be availed, to the extent of inputs and input service? - HELD THAT:- The applicant is not entitled to avail input tax credit on inputs and input services on the transaction covered in first question as the said transaction does not amount to supply under GST.
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2021 (4) TMI 918
Recovery of Government dues (Central Goods and Services Tax) - period of July, 2017 to March, 2019 - seeking time for filing counter-affidavit - HELD THAT:- Time limit for completion or compliances has been extended further up to 30.11.2020 vide CBIC Circular dated 01.09.2020 at page 259. Petitioner on his own bonafide has deposited ₹ 15 lacs towards the tax dues. However, due to Covid-19 situation and on account of the garnishee notice, his business is at a stand still.
Learned counsel for the respondent CGST Mr. Amit Kumar submits that statement of facts have been received, but he would require one week time to file counter affidavit. Learned counsel for the respondent has however has not been able to reply to the specific contention of the petitioner as to how despite the CBIC Circular dated 03.04.2020 and its extension by circular dated 01.09.2020 such notice has been issued - As prayed for, one week time is allowed to the learned counsel for the respondents to file counter affidavit. Matter be listed on 03.02.2021. Affidavit be filed latest by 29.01.2021 with advance copy to the learned counsel for the petitioner.
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2021 (4) TMI 917
Seeking pre-arrest bail of the accused-petitioner - fake E-way Bills - HELD THAT:- The petitioner is granted interim protection till a final decision is taken, on perusal of the materials in the case diary, till the date fixed, i.e., 03.02.2021.
The accused-petitioner will appear before the Investigating Police Officer within a period of 7 (seven) days from today, and, in the event of his arrest, he shall be released on furnishing a bail bond of ₹ 20,000/- with one suitable surety of the like amount to the satisfaction of the arresting authority, on the conditions imposed - application allowed.
List the matter on 3rd February, 2021.
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2021 (4) TMI 885
Time of supply of goods - facility of supply of different types of Pre-Paid Instruments (PPI's) - supply of goods or supply of service - applicable rate of tax for such supply of goods or services - issue of PPIs by the Third party PPI issuers subject to GST - amount received by the Applicant from Third Party PPI - GST collection at the time of sale of goods or services on redemption of PPIs i.e., own and from Third Party - reatment of discount (the difference between Face value and Discounted Value) in the hands of issuer of PPI in case of third party PPIs - GST on difference Value.
HELD THAT:- Vouchers issued by the appellant are of the nature of actionable claims. Actionable claims, though included within the definition of goods under section 2 (52), have been included in schedule III as entry 6 and therefore cannot be treated either as supply of goods or supply of services. It follows that vouchers are not subject to levy of tax under the GST act - that there is an inherent contradiction in this argument, with the provision in sub sections (4) of section 12 and 13, that deal with determining the time of supply for goods and services respectively, both use the term 'voucher', and therefore indicate that voucher relate to both goods and services. If vouchers are to be treated as actionable claims, they are only goods and not services.
When a voucher is issued, though it is just a means of advance payment of consideration for a future supply, subsection (4) of section 12 and 13 determine the time of supply of the of the underlying good(s) or service(s). Voucher per se is neither a goods not a service. It is a means for payment of consideration - there is no need to determine whether voucher is an actionable claim to arrive at a conclusion that it is neither a goods nor a service.
Voucher by GST law is recognized as an instrument of consideration (non-monetary form) for future supply. Regarding classification of voucher, since voucher is only an instrument of consideration and not goods or services, the same is not classifiable separately but only the supply associated with the voucher is classifiable according to the nature of the goods or services supplied in exchange of the voucher earlier issued to the customer.
Thus, the time of supply of the gift vouchers / gift cards by the applicant to the customers shall be the date of issue of such vouchers and the applicable rate of tax is that applicable to that of the goods.
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2021 (4) TMI 884
Applicability of GST - generation and distribution of electricity - TANGEDCO LTD. & TANTRANSCO LTD. are two subsidiary companies of TNEB Ltd. (Holding company), and both are registered utilities for distribution and Transmission of Electricity respectively under the Electricity Act, 2003 - Applicability of GST on Deposit Contribution Works - Government Entity or not - Applicability of GST on Transmission Charges for Natural Gas - challenge to AAR decision.
HELD THAT:- Electricity duty is a tax on consumption or sale of electricity and is levied under entry 53 of Part-II State list of Schedule 7 of the Constitution. Therefore, clearly the constitution leaves out only tax on consumption for sale of electricity from the purview of GST. The contention of the appellant is therefore rejected.
TANGEDCO is indisputably a generation company and a distribution utility. TANTRANSCO on the other hand is a transmission utility. It is not the case of the appellant that the appellant company is providing transmission services to TANTRANSCO. The appellant contends that the various services extended to TANTRANSCO constitute distribution services. However, as already been stated above, distribution service can be supplied only to consumers in the area of supply of the licensee. Therefore, the services extended by TANGEDCO to TANTRANSCO cannot constitute distribution service.
Deployment of employees to TANSTRANSCO from the appellant - HELD THAT:- As a matter of fact it has been averred by the appellant that there are two modes, one in which the employees deputed from the appellant to TANTRANSCO are paid by TANTRANSCO and the expenses are debited in that company's books of accounts only. The second mode involves where salary payments are made by the appellant and the same is accounted as receivable from TANTRANSCO. This distinction was not made during the time of hearing before the AAR. In our view, the second mode where the salary payments etc., are paid by the appellant company to the employees deputed to TANTRANSCO (as they are still under the rolls of the appellant) and is booked as receivables from TANTRANSCO, there is no reason to interfere with the AAR's order - However, where the employees are paid by TANTRANSCO themselves, there is no service involved in our considered opinion as they are fully under the control of TANTRANSCO only and deemed to be employees of TANTRANSCO for all purposes.
The AAR's ruling is modified depending upon the factual matrix involved with respect to the particular employee, which will have to be determined by the assessing officer concerned - With respect to Deposit Contributory Works which include activities like shifting of service line, etc., we do not find any compelling reasons to differ with the ruling pronounced by the AAR.
Appeal disposed off.
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2021 (4) TMI 883
Exemption form CGST - Pure services or not - services of water supply and sewerage schemes to urban and rural beneficiaries by TWAD Board - conducting Geological surveying and testing (Pure Services) to identify the water potentiality - Governmental Authority or not - exemption from CGST under SI.No.3 of the Notifications No. 12/2017 CT(Rate) dated 28.06.2017 as amended and exempted from SGST under SI.No.3 of the G.O(Ms) No.73 dated 29.06.2017 No.II/CTR/532(d-15)/2017 as amended.
HELD THAT:- The service of testing is being provided by the applicant which is a Government authority to (i) Local bodies, (ii) Government departments and (iii) contractors undertaking the projects executed by TWAD. It is seen from the copies of documents submitted by the applicant vide their letter dt. 15.02.2021 namely Format:C-IlI- Collection of steel samples. Format: C-I -collection of PVC Pipe samples that the tests have been conducted by the applicant to the individual contractors, on payment of the fixed fee towards charges of testing. Thus, it is clear that the applicant is the service provider and the service is provided to both governmental and non-governmental agencies. The services rendered to the contractors, though done as per the contract conditions, at the insistence of TWAD, the same cannot be termed as services provided to Government/Local authority because these tests are done by TWAD for the individual contractors in fulfillment of his contractual obligations for a specific charge. This proves that testing is a service done by the provider viz., TWAD to the receiver, any individual contractor for a consideration which is the fee charged. Hence the service so rendered by TWAD to their contractors is not exempted by the entry at SI.No. 3 above as the services are not provided to the class of service receivers specified in the said entry.
The functions entrusted are clearly mentioned in the schedules and only those activities fall under the functions entrusted to Panchayat/ Municipality. The exemption entry under consideration exempts pure services by way of any activity in relation to any of the functions listed above when provided to the said class of service receivers. The services rendered by the Applicant which is the subject matter of the current proceedings, namely quality testing of materials used in the turnkey contracts is undertaken to assure the quality of materials used in the turnkey projects to maintain the international standards required of a project. It is seen that this is an independent activity and is not in relation to activities listed in the Eleventh and Twelfth Schedule of the Constitution - the word used in the notification is 'Provided' and in the case at hand, without doubt the applicant provides the testing service only to the Contractor, for fulfilling his contractual obligations.
In respect of geophysical survey tests and reports, the applicant conducts the survey and reports on the nature of the site. The applicant has stated that they have not undertaken this service to 'Private agencies so far'. Further from the documents submitted it is seen that such survey has been done by the applicant to the Local Panchayat body of Soolalgiri, on their request to assess the geophysical nature of the land and availability of water. The Local authorities are constitutionally entrusted with the function of 'Water Supply' and TWAD has stated that they undertake the geophysical Investigations and provide the Local Authorities 'survey sketch' of the site.
The services provided by the applicant, namely, Quality material testing works is not exempted from Goods and Services Tax in terms of entry no.3 of the Notification 12/2017- Central Tax (rate) dated 28.06.2017 as amended - The service of Geophysical survey investigation is exempted from Goods and service Tax terms of entry no.3 of the Notification 12/2017- Central Tax (rate) dated 28.06.2017 subject to conditions stated.
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2021 (4) TMI 882
Input tax credit of GST paid - goods and services for laying of transfer pipeline for transporting Propane/Butane from Jetty to the Terminal - goods and services for construction of refrigerated storage tank at Terminal - goods and services for construction of Fire Water reservoir which is a part of firefighting system - goods and services used for foundation and structural support for such reservoir.
HELD THAT:- The construction of Refrigerated Storage Tanks and Fire Water Tanks are undertaken by the vendors of the applicant as Works Contract’. The vendors as per the Purchase Orders are to undertake the construction as an EPC and is to handover after successful demonstration of Performance Guarantee (PG) parameter. In respect of ‘Pile foundation works’ for the project site, it is seen that the entire work is undertaken by the vendor as Works Contract’ as the scope of work includes the entire spectra of activity from Mobilisation to loadtest. The civil & structural works for CCPL is again executed as Works Contract - The applicant sources Pipes on their own account for getting it laid and the said pipes are laid as a ‘Works Contract’ including the foundation and structural supports; the Storage Tanks and water tanks along with the foundation are sourced as ‘Works Contract’; the pile foundation for the entire project site is sourced as ‘Works Contract’. It is not in dispute that the Pipelines, storage tanks and water tanks are put in place for furtherance of their business and thereby the tax paid on these becomes eligible credit subject to limitations under Section 17(5) of the Act as these are constructed under ‘Works Contract” and the resultant is an immovable property.
Goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline - HELD THAT:- It is seen that the applicant sources Pipes on own account and the same is laid as a “Works Contract’ including the foundation. Section 17(5) restricts the credit on such goods received for construction & Works Contract service received except when such ‘goods/Works Contract’ services are availed in respect of ‘Plant and Machinery’ and Explanation, which defines ‘Plant and Machinery’ restricts credit on the ‘Pipelines laid outside the factory’.
The Explanation specifies that apparatus, equipment, and machinery fixed to earth by foundation, used for making outward supply of goods is ‘Plant and Machinery’ and there are specific exclusions, which include ‘Pipelines laid outside the factory premises’ The Act clearly states what constitutes ‘Plant and Machinery’ and in that what is excluded i.e. apparatus, equipment, machinery-used for making outward supplies and fixed to earth by foundation or structural support constitutes ‘Plant and Machinery’ and the ‘Pipelines laid outside the factory premises’ are excluded from the ambit of ‘Plant and Machinery’ for the purposes of eligible Credit - it is evident that the intention of the GST Law is to exclude ‘Pipelines laid outside the factory premises’ from the definition of ‘Plant and Machinery’. In Ute ease at hand, the applicant has slated that the pipelines approximate length of around 4.1 Km are to be laid from jelly to the Terminal and accordingly, we hold without any hesitation that the credit of Pipes and Pipelines laid outside the factory’ is not available for the applicant. The decisions relied upon by the applicant is based on the earlier laws and do not have any application while considering the GST Provisions, in as much as the GST law has clearly defined what is to be considered as ‘capital goods’. ‘Plant and Machinery’ and the specific exclusions.
The applicant is not eligible for availment of input tax credit of GST paid on goods and services for laying of transfer pipeline and the foundation and structural support for such pipeline for transporting propane/Butane from jetty to the Terminal as pipelines laid outside the factory premises as being restricted under Section 17(5) of the act read with the Explanation thereof.
Refrigerated storage tanks - HELD THAT:- The Explanation in Section 17 of the Act defines. ‘Plant and Machinery’ as an apparatus, equipment, machinery fixed to earth by the foundation or structural support used for making outward supply and excludes land building and civil structure. So we find that the moot point to be decided is whether the ‘refrigerated storage tank’ falls under the class of apparatus, equipment, machinery and the proposed foundation or structural support claimed falls under the ‘foundation’ or ‘civil structure’ - the Propane/Butane is stored, processed and maintained in refrigerated storage tanks before being dispatched to the end customers as per their requirements. Refrigerated storage tanks are constructed in a manner which can facilitate storage of Propane/ Butane and maintain its characteristics. It is built with certain equipment along with the concrete inputs to enable it to perform the said functions. Therefore, it is clear that these tanks are used for making outward supply’.
Eligibility of credit of tax paid on construction of water lank to follow the fire protection measure al Terminal - HELD THAT:- The applicant is eligible for availment of input tax credit of GST paid on goods and services for setting up of Fire Water reservoir (tank) including the structural support thereon as per the Purchase Order No 4500405071 dated 11.03.2020 subject to the condition that the tanks are capitalized in their books of accounts as ‘Plant and Machinery’ and not as Immovable Property” and the applicant are not eligible to avail input credit of goods and services used for ‘Pile foundation’ and input credit on goods and services used for such pile foundation.
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2021 (4) TMI 881
Exemption from GST - Services provided by the applicant to the recipient i.e. The Greater Chennai Corporation is a pure service provided to the local authority by way of activity in relation to functions entrusted to a Panchayat under article 243G and Municipality under article 243W of the Constitution - Benefit under Serial No. 3 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 - HELD THAT:- The applicant under the said contract has supplied the RO Plant and undertakes O & M of such plant. The Operation of the plant involves treatment of the raw water supplied to them to treated/purify water for dispensing the same to the designated beneficiaries of the GCC. The operation of the Plant includes providing the security for the plant and also issuance of smart cards whenever necessary - the supplies made by the applicant is not 'pure service' but is a composite supply of purified water(goods), smart cards(goods), maintenance of RO Plant, vending machines(Service), providing security(service). The supply being not a 'Pure Service', the same is not covered by the Description of Service at SI.No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017.
As the primary condition, that the supply must be 'Pure Service' is not satisfied, further conditions are not examined and it is held that the exemption at SI.No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended is not available for the applicant.
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2021 (4) TMI 880
Classification of services - Rate of GST - works contract services to TANGEDCO for carrying out retrofitting work for strengthening the NPKRR Maaligai against seismic and wind effect and modification of elevation in TNEB headquarters building at Chennai - Sl.No.3 item (vi) of the N/N.11/2017-Central Tax (Rate) dated 28.06.2017 as amended - HELD THAT:- As per the scope of the contract it is seen that the work covered in the contract envisages detailed engineering, soil investigation and testing, preparation of design, drawing & submission to TANGEDCO for the approval and carrying out execution of foundation, structure, superstructure works for retrofitting strengthening of structural members of NPKRR Maaligai against seismic, wind effect and modification of elevation of NPKRR Maaligai in TNEB Headquarters Complex including provision of glass cladding and aluminium composite panel works including all civil works viz. pile foundation, pile cap, columns, walls, beams, slab, shear wall etc. by supplying the goods involved and the related services, thereby is a composite supply of works contract. Further the works entrusted involves construction, fitting out, improvement etc of NPKRR Maaligai, the immovable property and there exists transfer of property in goods in the execution of the work. Therefore, it is observed that the works undertaken by the applicant are “Works contract” service as per Section 2 (119) of CGST Act 2017 and the supply is a composite supply, thereby condition at 8.1 (a) above is satisfied.
Government entity or not - HELD THAT:- TANGEDCO is a Public Limited Company established by Government of Tamilnadu with more than 90 percent control for the purposes of generation and distribution of electricity. Hence, TANGEDCO Ltd is a Government Entity. It is further pertinent to note that the Authority for Advance Ruling in the case of Tamil Nadu Generation and Distribution Corporation Limited vide TN/ 14/AAR/2020 dt. 20.04.2020 has viewed that TANGEDCO is a Government Entity.
As per the definition of Business, any trade, commerce or similar activity whether or not it is for pecuniary benefit itself is termed as business. TANGEDCO is involved in generation and distribution of electricity for which revenue is collected for the Energy consumed by the consumers. Revenue collection is based on tariff charged to different category of consumers. TANGEDCO as a state generation and distribution utility and deemed licensee is dependent on the collection of revenue for its operation, maintenance & investigation for future growth. It is evident from the above facts that TANGEDCO is involved in the business of selling electricity to the consumers and collecting charges from them which is their predominant activity - the supply of works contract services as per the applicant’s contract cannot be considered as that meant predominantly for use other than for commerce, industry, or any other business or professional purposes.
Rate of GST - HELD THAT:- The SAC for the Construction Service is SAC 9954 and the applicable rates to the various types of construction service are given under S1.No.3 of Notification No. 11/2017-C.T.(Rate) as amended - The rate of GST to be charged on the services provided by the applicant to TANGEDCO for carrying out retrofitting work for strengthening the NPKRR Maaligai against seismic and wind effect and modification of elevation in TNEB headquarters building at Chennai is 18% as per SL.No.3(xii) of Notification 11/2017 CT(Rate) dated 28.06.2017 as amended .
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2021 (4) TMI 879
Exemption from service tax - Agricultural Service - service of cold storage of tamarind inner pulp without shell and seeds - N/N. 11/2017- C.T.(Rate) and 12/2017- C.T.(Rate) both dated 28/06/2017 - HELD THAT:- In the case at hand, it is seen from the affidavits of the ‘Traders’ and the oath of allegiance of the ‘Cultivators’ that the process of removing the shell and seeds are undertaken as a ‘Cottage Industry’ with the ‘Human Resource’ as a main resource and wooden stick, wooden/iron hammer as equipment. The video CD furnished by the applicant shows the tamarind fruit being sun dried, beaten to remove the shell and take the pulp, then hammered to remove seeds. The photographs furnished shows tamarind with Pod; Tamarind with seed and fibre; tamarind without seed. The product for which the cold storage service is provided by the applicant is the deshelled, destringed 8v deseeded tamarind.
In the present case, the product stored is processed by drying the same in the sun and then by beating with wooden sticks to remove the pod and hammered to deseed and destring for extraction of the endocarp/pulp of the Tamarind. This process is not done at farm level. It is clone as a ‘Cottage Industry’ as furnished in the affidavits of the Traders and the Oath of allegiance of the Farmers to whom the storage services are extended by the applicant. Therefore, as clarified in the Circular above, the Tamarind which is processed by sun drying, deshelling, deseeding, the process which are not farm level processes, is not an ‘Agricultural Produce’ as defined under explanation 2(d) of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. Once the product for which the storage services are extended is held to be not an ‘agricultural produce’, then the exemption at Sl.No. 54 of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 is not available to the product, irrespective of the class of receivers of the service.
The Tamarind inner pulp without shell and seeds is not an ‘Agricultural produce’ as defined under explanation 2(d) of the Notification No. 12/2017- C.T.(Rate) dated 28.06.2017 and therefore the service of cold storage of such tamarind are not exempted under Sl.No. 54(e) of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.
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