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GST - Case Laws
Showing 81 to 100 of 157 Records
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2021 (4) TMI 648
Rejection of request for filing of GST TRAN-1 - petitioner would state that though he made several attempts to file form GST TRAN-1, he could not do so due to technical glitches - HELD THAT:- There can be no doubt that the petitioner made effort to upload the details in the web portal. Even according to the respondents, though Rule 117 of CGST Rules, 2017, originally stipulates that Form TRAN-1 is filed within 90 days, there was a periodical extension and the final extended date was 31.03.2020. In the present case, the impugned order itself came to be passed on 28.08.2019.
Therefore, applying the decision made in M/S. CHECKPOINT APPAREL LABELING SOLUTIONS INDIA PRIVATE LIMITED VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, 1. THE COMMISSIONER OF GST & CENTRAL EXCISE, THE SUPERINTENDENT OF CENTRAL TAX (CGST) , THE NODAL OFFICER – GST GRIEVANCES, GOODS AND SERVICE TAX NETWORK [2020 (8) TMI 209 - MADRAS HIGH COURT], the communication impugned in the writ petition is quashed. The Writ Petition is allowed.
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2021 (4) TMI 619
Revocation of cancellation of registration - non submission of reply to the SCN within the time specified therein - Rule 23 of the CGST Rules, 2017 - HELD THAT:- The appellant did not discharge their total interest liability rather he stated that since he had not paid any tax liability through cash hence no any interest liability arised as per press note released on 22nd December 2018 - in terms of proviso of Section 50 of CGST Act, 2017 amended vide Notification No.63/2020- C.T dated 25.08.2020 interest liability on net tax has been considered on prospective date i.e. with effect from 1st Sept 2020.
The appellant has not been complied with the first proviso of Rule 23 of CGST Rules, 2017 - the cancellation of registration of appellant may not be considered for revocation - Appeal dismissed - decided against appellant.
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2021 (4) TMI 618
Reverse Charge Mechanism - Liability of GST - rate of GST - pure agent services or not - interest on late payment of invoices of imported goods - reimbursement of Stamp tax paid as a pure agent.
Whether liability to pay GST on reverse charge arises if amount is paid as interest on late payment of invoices of imported goods? - If yes, then at what rate? - HELD THAT:- The foreign buyer has tolerated the act of receiving payment after a lapse of a period of 120 days from the date of the invoice in respect of the goods supplied by them to the applicant for which interest is to be paid by the applicant. We, therefore, find that the aforementioned act will be covered under the Supply of Services under Entry No.5(e) of the aforementioned Schedule-II which reads as “(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”. However, since the payment of interest made by the applicant to the foreign buyer is connected to the goods imported by them and is with regard to the late payment of the value of goods imported by them from the foreign buyer, we find it absolutely necessary to refer to Section 15 of the CGST Act, 2017 which covers the valuation aspect in respect of supply of goods and services - Sub-section (2) of Section 15 pertains to all the things that shall be included in the value of supply. On going through the said sub-section, we find that as per Section-15(2)(d), value of supply also includes “interest or late fee or penalty for delayed payment of any consideration for any supply.”
The payment of interest by the applicant will be covered under the supply of services under Entry No.5(2)(e) of Schedule-II of the CGST Act, 2017 and is liable to GST in view of the provisions of Section-15(2)(d) of the said Act.
Whether liability to pay GST on reverse charge arises if amount is paid for reimbursement of Stamp tax paid as a pure agent by M/s.Enpay, Turkey on our behalf? - HELD THAT:- In the instant case, the supplier of goods i.e. M/s.Enpay, Turkey has incurred the expenditure on stamp duty/tax on behalf of the applicant against the Corporate Guarantee entered into by them with CITI Bank for which they have raised reimbursement invoice of said payment, to M/s.Enpay, India. After going through the aforementioned provisions and comparing the same to the issue in hand, it is found that, the expenditure or costs incurred by the supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if, and only if, the supplier i.e. M/s.Enpay, Turkey satisfies all the conditions envisaged in Rule 33(i) to (iii) as well as the conditions (a) to (d) envisaged in the Explanation to Rule 33 of the CGST Rules, 2017 - taking into consideration the provisions of Rule 33 of the CGST Rules, 2017, we find that the amount of stamp tax incurred by the supplier on behalf of the applicant, shall be excluded from the value of supply, if, and only if, the supplier i.e. M/s.Enpay, Turkey satisfies all the conditions envisaged in Rule 33(i) to (iii) as well as the conditions (a) to (d) envisaged in the Explanation to Rule 33 of the CGST Rules, 2017.
The supplier of the applicant does not fulfil/satisfy all the conditions required for being a ‘Pure agent’ in terms of the provisions of Rule 33 of the CGST Rules, 2017 and therefore, the expenditure or costs incurred by the supplier of the recipient of supply cannot be excluded from the value of supply in terms of the provisions of Rule 33 of the said rules and is liable to GST on reverse charge basis.
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2021 (4) TMI 617
Applicability or determination of liability to pay Tax - Solar HT XLPE & LT XLPE Cables - availability of benefit of concessional rate of GST @ 5% - Entry Sr.No.234 of the Schedule-I to Notification No.1/2017-Integrated Tax (Rate) - non-submission of various details - HELD THAT:- In the event of non-submission of the aforementioned documents by the applicant, it would not be possible for us to take a decision in the matter since the issue in hand covers supply of goods such as cables for the Solar Power Generating System and after going through the subject portion mentioned in the amendment of the original purchase order dated 25.12.2018, there appears to be a distinct possibility of supply of services being involved in the instant case, along with the supply of goods and in such an eventuality, the nature of the transaction as well as the aspect of GST liability thereon are likely to be completely different. There is also every likelihood of such supply of goods i.e. XLPE cables for Solar Power Generating System being accompanied by services such as assembly, installation of the cables with all fittings and accessories etc.
In the instant case, we are not in a position to take any decision on the issue, since the applicant has failed to provide the documents such as contract/agreement/tender. It is thus concluded that in view of non-submission of the documents such as contract/agreement/tender as mentioned above by the applicant and without going through the conditions/provisions envisaged in the aforementioned documents, it will not be possible for us to take a decision in the matter.
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2021 (4) TMI 616
Classification of goods - Flavored Milk sold under trade name of Power Sip - to be classified under Heading 0402, Sub Heading 04029990 or not - HELD THAT:- From the constituents of the product as furnished by the applicant, it is seen that the product consists of Standardized Milk (92.00%) without removal of Fat content thereon, which is sweetened with around 8% of sugar to which color 0.08% and flavor in kesar & Badam Milk 0.120%, Rose milk 0.075% and Elaichi Milk 0.150% etc. are added and is supplied in tetra packs/ Bottle after necessary processes. The products are marketed as “Power Sip” i.e. “Flavoured milk” and are ready for consumption as stated by the applicant. Comparing the product and those covered under CTH 0402/0404, it is evident that the product in hand consisting of milk flavored with Badam/Elaichi/Kesar/Rose being ready for consumption beverages based on Milk is specifically excluded under CTH 0402, as seen from the Explanatory notes to HSN of the said chapter and hence not classifiable under CTH 0402.
Also the product being not ‘Whey’, the plausible CTH will be 0404 90 only and there again the Explanatory notes clearly states that this heading includes products which lack one or more natural milk constituents, to which natural milk constituents are added, whereas in the case at hand, the product do not lack any natural milk constituents nor any natural milk constituents is added to the product. Therefore, the product is not classifiable under either CTH 0402 or 0404.
Classifiable under the said tariff item 22029930 or otherwise? - HELD THAT:- Other non-alcoholic beverages, not including fruit or vegetable juice of Heading 20.09 are covered under ‘2202.99 - Other’ and as per the explanation at (B)(2), the group covers beverages ready for consumption such as those with a basis of milk. The word “beverage”, though not defined under CGST Act, 2017, is considered, in common parlance, as a drink that can be consumed directly and the instant product “flavored milk” can be consumed as it is and hence is a beverage with a basis of milk. Therefore, the product is appropriately classifiable under CTH 2202 99 30.
The ‘flavoured milk’ is classifiable under Tariff Item 2202 99 30 of the First Schedule to the Customs Tariff Act, 1975 as a “beverage containing milk” under HS Code 2202.
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2021 (4) TMI 615
Classification of service - rate of tax - Works Contract - Construction service provided by the applicant in the capacity of sub-contractor to the main contractor - taxable at the rate of 12% for the period prior to 25.01.2018 or not - N/N. 11/2017-CT (Rate) dated 28.06.2017 was amended by N/N. 01/2018-CT (Rate) dated 25.01.2018 - HELD THAT:- Notification No. 01/2018-CT (Rate) dated 25.01.2018 a new entry no. 3(ix) was inserted in the principal rate Notification No. 11/2017-CT (Rate) dated 28.06.2017 vide which “Composite supply of works contract as defined in Clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity” was made taxable @12% . The said amended Notification came into effect from the date of issue of the Notification.
The said Notification is also published on the date of Notification in the Gazette of India. Further, an amendment in the Notification is prospective in nature, unless clearly specified to be clarificatory. Also the effective date of a Notification is always date of issue of Notification unless it is specified date of effect of the Notification. The Notification always came into effect from the date it was published in the Gazette of India and the subject Notification was issued in the Gazette of India on 25.01.2018 i.e. on the date it was issued. Therefore, Notification No. 01/2018-CT (Rate) dated 25.01.2018 is applicable/ came into effect prospectively and from the date of issue i.e. from 25.01.2018.
The GST rate 12% prescribed under Sr. No. (ix) vide Notification No. 01/2018-CT (Rate) dated 25.01.2018 is effective from the date of issue of said Notification i.e. 25.01.2018.
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2021 (4) TMI 614
Classification of supply of goods - Aluminium Foil Type Winding Inverter Duty Transformer - classifiable under Chapter Heading 8504 or not - parts of Transformer supplied / to be supplied for initial setting up of solar project falls under Sr. No. 234 in Schedule-I to Notification No. 01/20017-Central Tax (Rate) dated 28th June, 2017 or otherwise - rate of tax.
HELD THAT:- The components of the solar power plant which are essential for setting up of the power plants would also be eligible for the benefits provided to the solar power plant. Accordingly, Aluminum Foil Type Winding Inverter Duty Transformer and their parts are an essential part/ device of Solar Power Generating System and are eligible for the benefit of Sr. No. 38 of Not. No. 01/2017-CT (Rate) dated 28.06.2017.
A reading of the submitted both P.O. and technical specification leads us to infer that though the Buyer intends to purchase the Aluminium Foil type Winding Inverter Duty Transformers as a whole, by devising certain clauses, it is sought to bring about a splitting up of the intended purchase of the Transformer, as a one whole, into a purchase of goods and a purchase of services. However, the intended purpose to present the agreement as a contract for supply of goods ONLY has not achieved the desired purpose. The agreement is for supply of an effectively running Transformer. The clauses mentioned in Technical Specification reveal that the Supplier is involved in the process right from the early engineering period to procurement and implementation stage - it is seen that the supply of the goods and the supply of service are inextricably linked with each other. It is not that the applicant has been assigned with the work of supply of goods only. But the applicant has been given the task of setting up the ‘Aluminium Foil type Winding Inverter Duty Transformers’. Thus, though the Purchase Order’s are made separately, it is one indivisible contract for the setting up of the Aluminium Foil type Winding Inverter Duty Transformers. In fact the technical specification is single for both the supply of goods and Service - thus, the work order for supply of goods and service is one & whole and not separate as per the technical specification submitted by the applicant.
The applicant is liable for payment of GST in terms of Explanation inserted in Entry No. 234 of Not. No. 01/2017-CT (Rate) dated 28.06.2017 vide Notification No. 24/2018-CT (Rate) dated 31.12.2018 and in terms of Serial No. 38 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 in respect of services considering the total value of both the Purchase Order - Explanation stated that out of the gross value of the supply, 70% shall be deemed to be on account of goods and 30% deemed to be on account of service. Accordingly, the effective rate came to 8.9%.
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2021 (4) TMI 595
Classification of goods - HSN Code - rate of tax - Flavored Milk - to be classified under the Tariff heading 04029990 or otherwise? - HELD THAT:- The product consists of Standardized Milk (92.1%) without removal of Fat content thereon, which is sweetened with around 8% of sugar to which color 0.08% and flavor 0.02%, etc. are added and is supplied in tetra packs/ Bottle/ Tin container after necessary processes. The products are marketed as “Amul Beverages” i.e. “Amul Kool Flavoured Milk”, “Amul Kool Café” “Milk shakes’ “Sports Drink” and “Smoothies” and are ready for consumption as stated by the applicant.
Comparing the product and those covered under CTH 0402/0404, it is evident that the product in hand consisting of milk flavored with Badam/Elaichi/Kesar/Rose/Vanila/Strawberry/Mango/Lemon/Orange/Choclate/Cocoa powder being ready for consumption beverages based on Milk is specifically excluded under CTH 0402, as seen from the Explanatory notes to HSN of the said chapter and hence not classifiable under CTH 0402 - Also the product being not ‘Whey’, the plausible CTH will be 0404 90 only and there again the Explanatory notes clearly states that this heading includes products which lack one or more natural milk constituents, to which natural milk constituents are added, whereas in the case at hand, the product do not lack any natural milk constituents nor any natural milk constituents is added to the product - Therefore, the product is not classifiable under either CTH 0402 or 0404.
Whether classifiable under the said tariff item 22029930 or otherwise? - HELD THAT:- Other non-alcoholic beverages, not including fruit or vegetable juice of Heading 20.09 are covered under ‘2202.99 - Other’ and as per the explanation at (B)(2), the group covers beverages ready for consumption such as those with a basis of milk. The word “beverage”, though not defined under CGST Act, 2017, is considered, in common parlance, as a drink that can be consumed directly and the instant product “flavored milk” can be consumed as it is and hence is a beverage with a basis of milk. Therefore, the product is appropriately classifiable under CTH 2202 99 30.
Thus, ‘flavoured milk’ is classifiable under Tariff Item 2202 99 30 of the First Schedule to the Customs Tariff Act, 1975 as a “beverage containing milk” under HS Code 2202.
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2021 (4) TMI 569
Clandestine Removal - seizure of unaccounted/excess goods - partner and manager of the assessee could not produce any documents or records related to the finished goods found in the premises - Confiscation of goods - redemption fine - penalty.
HELD THAT:- Respondent no where raised any objection of search proceedings as well as Panchnama proceedings conducted by the investigating team from which it may be inferred that the entire proceedings were conducted in transparent and fair manner. During the proceedings the physical stock was also verified and it was found excess against the entries of stock register/books of accounts. The whole proceedings were done in the presence of two independent witnesses and in the presence of employees of the respondent/assessee and on later period the Partner of the Firm had also joined the search proceedings. During the proceedings, the statement of Accountant, Manager and Partner of the Firm were recorded under Section 70 of CGST Act before the proper officer.
From the above facts, it is emerged that during the search proceedings the excess stock were found against the entries of stocks register and this fact have not been objected neither by the employees of the Firm nor by the Partner of the Firm himself. This fact has also been accepted by the adjudicating authority in his findings - the adjudicating authority‘s finding is based are on the submission of respondent/assessee only and he grossly ignored the statement of employees of the Firm which had endorsed rather admitted by the Partner of Firm himself and in the tax matter the statement has the evidential value under the evidence Act. In the various Supreme Court judgments it has been pronounced that the statement recorded before Tax Authority is merely not a statement recorded before Police Officer but it is a piece of evidence.
The statement recorded under the said provisions constitute substantive piece of evidence and can be relied in adjudication proceedings - Even if such statement is retracted or diluted in subsequent statement, it can be appreciated in light of other circumstances and evidence.
Levy of Redemption Fine - HELD THAT:- The adjudicating authority has erred by holding that the seized goods is not liable for confiscation and release the same contrary to this view it is found that the respondent assessee has contravened the provisions of Section 35 of CGST Act read with Rule 56 of CGST Rules, 2017. Therefore, seized goods is liable to confiscation in terms of Section 130 (1), (ii) & (iv) of CGST Act and rules made thereunder. However, since the goods has already been ordered to release the said seized goods by the adjudicating authority therefore there are no option but to impose the fine under Section 130 (2) in lieu of confiscation of the said released goods.
Levy of penalty on firm u/s 122(1) (xvi) and (xviii) of CGST Act, 2017 - HELD THAT:- It has established that the assessee did not maintained the proper books of account at the time of search proceedings hence he violated the provisions of Section 35 of CGST Act and Rules made thereunder - the penalty under Section 122(1) (xvi) and (xviii) of CGST Act, 2017 upon the assessee is very well attracted in the instant case.
Levy of penalty on partner - HELD THAT:- It has been established that the Partner of the firm is the key person who deals all the affairs of the Assessee firm. Therefore, he can not be escaped from any offence of the firm and it can not be imagined that without his involvement such kind of violations of the provisions of the act or rules made thereunder would be happened. Further, the Partner has himself admitted the said offence in his statement recorded under the provisions of law.
Appeal disposed off.
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2021 (4) TMI 568
Maintainability of petition - availability of alternative remedy - Delegation of powers by the commissioner - Provisional attachment - Proceedings initiated u/s 83 - petitioner admits that there is alternate remedy available, but contend that the rule of exclusion of jurisdiction due to availability of alternative remedy is a rule of discretion and not one of the compulsions - It was held by High Court that the writ petitioner has not only efficacious remedy, rather alternative remedy under the GST Act, and therefore, the present petition is not maintainable.
HELD THAT:- Arguments concluded - Judgment reserved.
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2021 (4) TMI 567
Sub-Contract from a Sub-Contractor - Sub-contractor is sub-contracted from a sub-contractor of the main contractor - main contractor is provider of works contract to a Government entity - eligibility for concessional rate of GST - no privity of contract between applicant and main contractor - HELD THAT:- In the instant case, it is seen that there is no privity of contract between the applicant and M/s. Karnataka Neeravari Nigam Ltd. The original contract is awarded by M/s. Karnataka Neeravari Nigam Limited to M/s. Ocean Constructions (India) Private Limite - Hence as per the notification, any subcontractor providing services to Main contractor by executing the works mentioned in the serial number 3 of clause (iii) and clause (vi) which is exclusively covered under the clause (ix) of serial no.3 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended from time to time) will be exempted from payment of GST subject to M/s. Karnataka Neeravari Nigam Limited is qualified to be called as a Government Entity.
In the present case, it is M/s. Shaaz Electricals who is the sub-contractor who is covered under the said entry. As there is no privity of contract between the applicant and M/s. Ocean Constructions (India) Private Limited and the contract is between the applicant and M/s. Shaaz Electricals, the services provided by the applicant is not covered under the said entry.
It is observed that the privity of contract is between the applicant and the M/s. Shaaz Electricals, however M/s. Shaaz Electricals is not covered under Central Government, State Government, Union Territory, a local authority or a Governmental Authority or a Government Entity and hence the supply made by the applicant is not covered entry no.3 (iii) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 - For the same reason, the activity of the applicant is also not covered under entry no. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended).
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2021 (4) TMI 566
Taxability - levy of GST - Rent received from Backward Classes Welfare Department - services of renting an immovable property - exemption under entry number 3 of N/N. 12/2017 -Central Tax (Rate) dated 28-06-2017 - HELD THAT:- The applicant has rented his property to the Backward Classes Welfare Department, Government of Karnataka, who in turn is using the same for providing hostel facilities to the post metric girls of backward classes. This is in relation to the function entrusted to a panchayat under article 243G of the constitution which is covered by 27th entry of 11th schedule which says Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.
Since the applicant is providing to the State Government pure services by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution, the same is covered under the entry number 3 of Notification No. 12/2017 -Central Tax (Rate) dated 28-06-2017 and hence is exempted under the CGST Act, 2017 - the activity is also exempted under the KGST Act, 2017.
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2021 (4) TMI 565
Classification of supply - rate of tax for the scope of supplies - independent supplies or composite supply with principal supply of goods - supplies made by different Cost Centres - naturally bundled services - Time of supply - HELD THAT:- It is seen that the applicant was a successful bidder to the tender invited by the BMRCL and the tender is for “Supply of 150 numbers of Standard Gauge Intermediate Cars compatible with and suitable for integration with the existing trains of Bangalore Metro Rail Project Phase-I”. The applicant has applied and been allotted the work and the applicant has entered into the contract with BMRCL vide Contract No.3 RS-DM dated 25th March, 2017. It is clear that the contract is for manufacture and supply of Standard Gauge Intermediate Cars along with integration with installation and commissioning of cars supplied, including training, supervision and maintenance, supply of spares, preparation of manuals etc. - the contract was for supply of intermediate cars which are compatible with the existing trains and for integration with installation and commissioning of cars supplied, including training, supervision and maintenance and supply of spares and preparation of manuals etc. and this is a single contract.
The contract is verified and found that the contract is a single contract for both supply of goods and also for services related to those goods supplied, like installation, integration, commissioning, training and maintenance and splitting of the entire contract is for the purposes of milestones in the completion of the contract and is a single continuous chain. The Contract agreement also clearly states that the contract is a single contract involving supply of goods and services. Further, it is also seen that the contract cannot be separated and awarded to different persons and since the nature of the spares and services are exclusive to the main supply, it cannot but be awarded to the same person.
It is seen that the Total Contract Price is split up into separate Contract Prices cost centre wise and one of the cost centre H is optional, and is incidental but integral part of the Supply contract. Further, it is also important to note that there is no option on the supplier as far as supplies of spares are concerned - it can be seen that supply covered under Cost Centre H, being optional, cannot be treated as a part of the contract of supply of 150 cars and integration and other services, until that option is exercised by the contractee. This cost centre would be operative only on the request of the contractee and when such request is made by the contractee, the applicant is bound to provide such services at the agreed upon rates.
The Cost Centre C to G would form a composite supply as the supply involves supply of intermediate cars and also integration, commissioning etc. There would be supply of goods and supply of services involved in this activity and hence would form a naturally bundled supply - The supplies made by the applicant under Cost Centres C, D, E and G form a composite supply and since the supply of intermediate cars is the principal supply, would be treated as the supply of intermediate cars as per section 8 of the CGST Act, 2017 and section 12 of the CGST Act, 2017 is applicable to the issues related to the time of supply.
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2021 (4) TMI 564
Export of services or not - levy of GST on foreign supplier on their service charges - services of stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods which are temporarily imported - zero rated supply or not - place of supply of services or not - HELD THAT:- The fertilizers/goods are discharged from the vessel, brought from the vessel to the custom bonded warehouse, packed in smaller bags as per the requirement of the client and thereafter dispatched from the warehouse after 2/3 months ( as per instructions of their clients) for export to the ultimate buyers of the clients of the applicant. It is therefore, apparent that the aforementioned fertilizers/goods never cross the customs barrier and mix-up with the indigenous goods as these goods were temporarily imported to India (for export purpose) and stored in customs bonded warehouses and exported from there to outside India.
Whether the services such as stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods (which are temporarily imported) provided by them can be considered as export of services or not? - HELD THAT:- The service recipients (the clients of the applicant located outside India in the instant case) neither have a place of business in India for which registration has been obtained nor do they have any place of business other than the place of business for which registration has been obtained, in India. In view of the above, we find that the conditions (a) and (b) are not applicable in the instant case. Further, since condition (c) above is also linked to (a) and (b), the said condition can also not be made applicable to the instant case. We, therefore, conclude that only condition(d) which states that in absence of such places as mentioned at (a),(b) and (c) above, the location of the usual place of residence of the recipient, is applicable in the instant case - thus the place of supply of services, in the instant case, will be the location of the recipient of services i.e. out of India. We therefore find that condition(ii) of Section 2(6) of the IGST Act, 2017 is also fulfilled.
As per Sub-section (2) of Section 13, the place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services, provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. However, since the location of the recipient of services is available in the instant case i.e. outside India, we will have to find out under which sub-section of Section-13 the services provided by the applicant falls - the services such as stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods (which have been temporarily imported into India as discussed earlier) would fall under sub-section(3) of Section 13, since the goods are required to be made physically available by the recipient of services to the supplier of services in order to enable the supplier to supply the aforementioned services.
Condition(iii) of Section 2(6) of the IGST Act, 2017 has not been fulfilled in the instant case since the location of supply of service is not located outside India but in India and therefore the services rendered by the applicant will not be covered under ‘export of services’ - the services rendered by the applicant are not covered under ‘Export of services’ as envisaged in Section 2(16) of the IGST Act, 2017 - the aforementioned services of stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods which are temporarily imported, would not be considered as ‘Export of service’ for the period prior to 01.02.2019 but would be considered as ‘Export of service’ w.e.f. 01.02.2019 onwards.
Since it has determined that the services provided by the applicant are covered under ‘export of service’ w.e.f. 01.02.2019, they will be covered under the provisions of Section 16(1)(a) as export of services w.e.f. 01.02.2019. As regards the eligibility of the applicant for ‘Zero rated supply’ under Section 16 of the IGST Act, 2017, we find that the applicant shall not be eligible for ‘Zero rated supply’ as per the provisions of the said section upto 31.01.2019. However, they will be eligible for ‘Zero rated supply’ as per the provisions of Section 16(1)(a) of the IGST Act, 2017 w.e.f. 01.02.2019.
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2021 (4) TMI 563
Local Authority or not - Ahmedabad Municipal Transport Service - engaged in rendering passenger transportation services and runs public buses in the city of Ahmedabad within the limits of Municipal Corporation - GST on procurement of security services received from any person other than body corporate under reverse charge mechanism - GST on advertisement services or the service recipient of AMTS is required to pay GST under reverse charge mechanism - registration as a Deductor under GST as per the provision of Section 24 of the CGST Act.
Whether the applicant i.e. AMTS would be qualified as “local authority” as defined under the CGST Act, 2017? - HELD THAT:- AMTS is a statutory authority established to carry out the functions entrusted to a Municipality under Art. 243W of the Constitution. It is a body discharging municipal functions, although not a municipality as required to be constituted under Art. 243Q of the Constitution and is fit to be included as ‘other authority’ under Section 2(69)(c) of the GST Act. It will also be a local authority within the meaning of the above section of the GST Act if the Applicant is legally entitled to or entrusted by the State Government with the control or management of a municipal or local fund.
Thus, Ahmedabad Municipal Transport Service (AMTS), is a statutory authority discharging municipal functions (although not a municipality as required to be constituted under Art. 243Q of the Constitution), is legally entitled to and entrusted by the State Government with the control or management of a local fund as defined in Gujarat Treasury. In view of the above discussion we hold that Ahmedabad Municipal Transport Service (AMTS) can be termed as a local authority under Section 2(69)(c) of the GST Act.
Liability to pay GST on procurement of security services received from any person other than body corporate under reverse charge mechanism - exemption under Sl. No. 3 of N/N. 12/2017 - Central Tax (Rate) or Sl. No. 3 of N/N. 09/2017 - IGST (Rate) - HELD THAT:- The term ‘in relation to’ is very wide and the intention of the legislature is to encompass all those services which are provided so as to enable the organization to perform function entrusted in Article 243W of Constitution Of India. In the instant case Security Service is necessary to provide the passenger transport service without any hurdle. The security of a transport undertaking is of utmost importance considering possibility of unfortunate events that may threaten the safety of Vehicles. The fact is that security is vital for safe-keep of undertaking and it can be ensured only by way of keeping enough security measures and procedures in place. Thus, the security service has direct nexus with the transportation service. Accordingly, security services would be included within the term ‘in relation to’ and would be covered within pure service as envisaged in the exemption Notification No.12/2017-CT (Rate) dated 28.06.2017.
As per the N/N. 29/2018-CT (Rate) dated 31.12.2018 Reverse Charge Mechanism on Security Service provided to local authority by any other person other than body corporate is not applicable. Therefore, the applicant being a “local authority” in terms of Section 2(69) of CGST Act, 2017 as discuss in above Para’s is not liable for payment of GST under Reverse Charge Mechanism on receipt of Security Service.
Whether the applicant is required to pay GST on advertisement services or the service recipient of AMTS is required pay GST under reverse charge mechanism considering Notification No. 13/2017-Central tax (Rate) dated 28-06-2017? - HELD THAT:- The applicant i.e. AMTS is considered as “local authority” in terms of Section 2(69) of CGST Act, 2017. Therefore, in terms of Sl. No. 5 of Notification No. 13/2017-CT (Rate) dated 28.06.2017, Services supplied by the Central Government, State Government, Union territory or local authority to a business entity located in taxable territory is liable to payment of GST under reverse charge mechanism - In view of the Sl. No. 5 of the Notification No. 13/2017-CT (Rate) dated 28.06.2017 applicant being a “local authority” is providing advertisement service to the business entity, accordingly as per the aforesaid Notification applicant is not liable to payment of GST but under reverse charge mechanism recipient of Service is liable to payment of GST.
Whether AMTS is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act? - HELD THAT:- The applicant is considered as “local authority” under Section 2(69) of CGST Act, 2017. In view of the clause (b) of Section 51 of the CGST Act, 2017 local authority is compulsory required to take GST Registration for the purpose of deduction of TDS on the payments made to the supplier of taxable goods and/or services. Govt. of India vide Notification No. 50/2018-Ct dated 13.09.2018 has specified the category of person which includes local authority to whom TDS is to be deducted - the applicant being “local authority” is required to obtain registration as GST TDS deductor in terms of Section 51 of CGST Act, 2017.
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2021 (4) TMI 562
Classification of goods - rate of GST - Bollards - Bolts, nuts, screw, washer etc. known as fixtures - Frontal Frames - Fascia Pads – UHMW PE pads - Buoys - Chains/Swivel/D-Shackle/Chain tensioner - Rubber Fender (both types) - few products such as frontal frames with fascia pads along with fixture as a complete set - fender panel system along with services such as assembly, installation & supervision service - supply of installation service where usage of chemical is essential to provide effective service - composite supply or not - classification of the bundle.
Classification of goods - rate of GST - Bollards - HELD THAT:- ‘Bollards’ would be rightly covered under Tariff heading 73259999 - N/N. 01/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time), Sub-heading 7325 finds mention at Entry No.237 of Schedule-III of the said notification wherein the GST liability is 18%.
Classification of goods - rate of GST - Bolts, nuts, screw, washer etc. known as fixtures - HELD THAT:- Fixtures such as bolts, nuts, screws and washers are specifically covered under the aforementioned sub-heading 7318 of the First Schedule to the Customs Tariff Act, 1975 - The goods finds place in Sub-heading 7318 which finds mention at Entry No.232 of Schedule-III of the said notification on which GST liability is 18%.
Classification of goods - rate of GST - Frontal Frames - HELD THAT:- Looking to the description of the product given by the applicant as well as the photographs of the Frontal frames provided by the applicant and comparing the same to the above, it appears that the said product will be rightly covered under Sub-heading 7326 and specific tariff heading 73269080 of the First Schedule to the Customs Tariff Act, 1975 - The goods as per Notification No.01/2017-Central Tax(Rate) dated 28.06.2017(as amended from time to time) is found under Sub-heading 7326 finding mention at Entry No.238 of Schedule-III of the said notification on which GST liability is 18%
Classification of goods - rate of GST - Fascia Pads – UHMW PE pads - HELD THAT:- Tariff heading 3920 covers plates, sheets, film, foils and strips of plastics combined with other materials and Tariff heading 392010 covers sheets of polyethylene. Images of UHMW PE pads (as obtained from internet) are placed above. Also, as described by the applicant, fascia pads are made of high quality of plastics (polyethylene )and are applied on the frame structure on which vessels/ship hull touches - the ‘Fascia pads’ which are sheets of polyethylene(made from polymers of ethylene) would be rightly classifiable under the Tariff heading 39201099 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 3920 finds mention at Sr.No.106 of Schedule-III of the said notification on which GST liability is 18%.
Classification of goods - rate of GST - Buoys - HELD THAT:- The said product rightly merits classification under the Tariff Heading 89079000 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 8907 finds mention at Sr.No.251 of Schedule-I of the said notification on which GST liability is 5%.
Classification of goods - rate of GST - Chains/Swivel/D-Shackle/Chain tensioner - HELD THAT:- There is no specific entry for the products i.e. swivel, shackles and chain tensioner under the said sub-heading - chains would be rightly classifiable under Tariff heading 73158900 whereas dshackles and swivels would be rightly classifiable under Tariff heading 73159000 (being parts or accessories). However, since we do not find any specific mention of chain tensioners any where, we find it necessary to know what a chain tensioner is. We therefore, find it prudent to refer to the definition of a ‘chain tensioner’ as per the dictionary - The said product is a device which forms a part or accessory to a chain which adjusts slackness in the chain to enable continuous and proper chain operation and would therefore be rightly classifiable under Tariff heading 73159000 of the First Schedule to the Customs Tariff Act, 1975 - Sub-heading 7315 finds mention at Sr.No.229 of Schedule-III of the said notification on which GST liability is 18%.
Classification of goods - Rubber Fender (both types) - HELD THAT:- The said product rightly merits classification under the Tariff Heading 40169400 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) which reads as Boat or dock fenders, whether or not inflatable - Sub-heading 4016 finds mention at Sr.No.49 of Schedule-IV of the said notification on which GST liability is 28% - the rate of GST in respect of the aforementioned sub-heading i.e. 4016 will be 28% (14% SGST + 14% CGST) upto 14.11.2017 and 18% w.e.f. 15.11.2017 after amendment.
Supply of few products such as frontal frames with fascia pads along with fixture as a complete set - composite supply or not - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 01/2017 dated June 28, 2017 (as amended) - HELD THAT:- The supply is concluded to be a ‘mixed supply’ - ‘Mixed supply’ comprising of two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. However, it is found that the supply of all the three goods involved in the said supply i.e. frontal frames, fascia pads and fixtures are leviable to GST at 18% i.e. all of them attract equal rate of tax. Hence the said ‘Mixed supply’ of goods can be considered to be the supply of any of the three supplies i.e. Frontal frames (Tariff heading 73269080) OR Fascia pads (Tariff heading 39201099) OR Fixtures (Tariff heading-73181500 / 73181600 / 73182200) and the GST leviability on the said supply will be 18%.
Supply of goods i.e. fender panel system along with services such as assembly, installation & supervision service - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 1/2017 dated June 28, 2017 (as amended) - HELD THAT:- The aforementioned supply of goods and services is not a composite supply as well as does not constitute a ‘mixed supply’ - since it has been established that the aforementioned supply is neither a ‘composite supply’ nor a ‘mixed supply’, we conclude that the applicant will have to supply the aforementioned goods as well as services separately and not as a combination - the supply of goods i.e. fender panel system along with services such as assembly, installation & supervision service would not qualify as a composite supply or a mixed supply. Hence, there is no question of either determining the classification of this bundle or deciding it’s applicable tax rate.
Supply of installation service where usage of chemical is essential to provide effective service - classification of this bundle and applicable tax rate thereon in accordance with Notification No. 11/2017 dated June 28, 2017 (as amended) - HELD THAT:- The aforementioned supply of services and goods i.e. chemicals, constitutes a ‘Composite supply’ - since the aforementioned supply is a ‘Composite supply’ in which the ‘Installation Service’ is the principal supply, the said supply will be treated as a supply of ‘Installation Service’ in terms of clause(a) of Section 8 above, and therefore, the GST liability will be the tax leviable on ‘Installation Service’ - ‘Installation Service’ appears at Sr.No.25 (ii)of the said notification on which GST liability is 18%.
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2021 (4) TMI 561
Utilisation of Input Tax Credit - Balance available in the Electronic Credit Ledger legitimately earned on the inputs/raw-materials/inward supplies(meant for outward supply of Bullions) - whether the balance available can be used towards the GST liability on ‘Castor Oil Seed’ which were procured from Agriculturists and subsequently meant for onward supply - ‘Castor Oil Seed’ is intended to be supplied in domestic market or to export it - HELD THAT:- For the applicant, to be eligible to take input tax credit on any supply of goods or services, the same has to be used or should be intended to be used in the course or furtherance of his business i.e. the nexus/connection between the inputs and the final products manufactured from these inputs is required to be proved - For example, inputs such as dores of gold, silver etc. procured by the applicant are used in the manufacture of their final product i.e. Gold(including Gold Plated with Platinum) unwrought or in semi-manufactured forms or in powder form, based metal clad with silver, not further worked than semi-manufactured, coin etc.
The core issue is that the applicant wants to trade in Castor oil seeds on which the GST liability is 5% and wants to utilise the input tax credit (availed on inputs such as gold dores, silver dores etc.) available with him in his electronic credit ledger for the payment of the said GST. However, for the applicant, to be eligible to avail the input tax credit for the payment of the GST leviable on the Castor oil seeds which they intend to supply domestically or to export it, the applicant has to first prove the nexus or connection between the inputs and the castor oil seeds which he intends to supply, in the terms of sub-section(1) of Section 16 of the CGST Act, 2017 i.e. he has to prove as to how the gold dores or silver dores are used or intended to be used in the course or furtherance of his business of supply of Castor oil seeds.
In this regard, firstly, the applicant has not submitted any document/literature etc. in respect of how they wish or intend to carry out the business of supply of castor oil seeds. Secondly, they have not provided/submitted any proof in respect of the input-final product nexus/connection in respect of the inputs i.e. gold and silver dores etc. vis-a-vis Castor oil seeds nor provided any such document/literature in respect of how the inputs i.e. gold dores or silver dores are used or intended to be used in the course or furtherance of their business of supply of Castor oil seeds - Even otherwise, on a plain comparison of the provisions of Section 16(1) of the CGST Act, 2017 with the issue in hand, it can very easily be derived that there is no nexus/connection whatsoever, of the inputs i.e. gold dores or silver dores with the business of supply of Castor oil seeds by the applicant. It can therefore, be seen that the even the basic conditions envisaged in the provisions of Section 16(1) have not been fulfilled in the instant case, it can be undoubtedly concluded that the inputs are not used or intended to be used in the course or furtherance of the business of supply of Castor oil seeds.
The applicant cannot use the Input Tax Credit Balance available in the Electronic Credit Ledger legimately earned on the inputs/raw-materials/inward supplies(meant for outward supply of Bullions) towards the GST liability on ‘Castor Oil Seed’ which were procured from Agriculturists and subsequently meant for onward supply.
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2021 (4) TMI 560
Governmental Authority or not - National Institute of Design, Paldi, Ahmedabad (NID) - liability to pay GST on procurement of services under reverse charge mechanism - Security services received from any person other than body corporate as per N/N.13/2017 – Central Tax (Rate) - Access to e-books/e-database from service provider located outside India as import of service as per N/N.10/2017 – IGST (Rate) - requirement to be registered as a tax deductor under GST as per the provision of Section 24 of the CGST Act.
Whether NID would qualify as ‘governmental authority’ as defined under the Integrated Goods and Services Tax Act, 2017? - HELD THAT:- For the applicant to fall under the definition of ‘Governmental Authority’, the following 3 conditions will be required to be satisfied: (1) It has to be set up by an Act of Parliament or a State Legislature or has to be established by any Government; (2) The Government should have 90 per cent or more participation by way of equity or control and (3) It should be established for carrying out any function entrusted to a municipality under Article 243W of the Constitution or to a Panchayat under Article 243G of the Constitution.
Since the applicant has fulfilled the conditions of being formed by an Act of Parliament and being established to carry out the function entrusted to a municipality under Article 243W of the Constitution and to a Panchayat under Article 243G of the Constitution, it is concluded that the applicant will fall under the definition of Governmental Authority if it also fulfils the condition namely ‘ ninety percent or more participation of Government by way of equity or control.’
Whether NID is liable to pay GST on procurement of (a)security services received from any person other than body corporate as per Notification No.13/2017-central Tax Rate (b)access to e-books/e-database from service provider located outside India as import of service as per Notification No.10/2017-IGST(Rate) under reverse charge mechanism, in view of the exemption granted in Sr.No.3 of Notification No.12/2017-Central Tax(Rate) or Sr.No.3 of Notification No.09/2017-IGST(Rate)? - HELD THAT:- Sr.No.3 of aforementioned Notifications No.12/2017-Central Tax(Rate) dated 28.06.2017 and Notification No.09/2017-IGST(Rate) dated 28.06.2017 exempts Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental Authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
In the present case, in view of non-submission of copies of agreement or contract with regard to the services received/to be received by the applicant, it would not be possible to give a decision in the matter.
Whether NID is required to be registered as a tax deductor under GST as per the provision of Section 24 of the CGST Act? - HELD THAT:- NID has been formed by an Act of Parliament of the Government of India i.e. the NID Act. However, they have not given any proof with regard to ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’. Hence, it is found that since it has been established that NID has been formed by an Act of Parliament, the applicant will have to be registered as a tax deductor under the provisions of Section 24 of the CGST Act read with Section 51 of the Act, if, and only if, they fulfil the condition of ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’. It is therefore concluded that the applicant will have to be registered as a tax deductor under the provisions of Section 24 of the CGST Act read with Section 51 of the Act, if they fulfil the condition of ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’.
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2021 (4) TMI 559
Scope of Advance Ruling - Classification of supply - export of services - zero rated supply or not - Commission paid to foreign agent who is non resident of India and he does not have any permanent establishment or business connection in India - liability of GST on such commission payable to foreign agent related to service provided out of India.
HELD THAT:- Both the questions raised by the applicant do not fall within any of the clauses of (a) to (g) of Sub-section(2) of Section 97 of the said Act, i.e. they do not fall within the ambit of Section 97(2) of the said Act as both the questions are related to export of service which would also require the determination of place of supply of services which is not under the scope of jurisdiction of the Advance Ruling Authorities.
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2021 (4) TMI 558
Classification of goods - rate of GST - Plastic Toys - entitlement to Input Tax Credit in relation to CGST-SGST separately - debit notes issued by the supplier in current financial year i.e. 2020-21, towards the transactions for the period 2018-19 - HELD THAT:- The said toys are made of plastic meant for children and are not electronic toys, and therefore conclude that the plastic toys manufactured and supplied by the applicant are correctly classifiable under Heading 95030030 of Chapter 95 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975).
Tax liability on the product - HELD THAT:- The Toys of plastic manufactured and supplied by the applicant fall under Sr.No.228 of Schedule-II of N/N. 01/2017-Central Tax(Rate) dated 28.06.2017 and the GST applicable on the said product is 12%.
Whether the applicant can claim input tax credit of CGST-SGST charged separately in debit notes issued by the supplier in current financial year of 2020-21 towards transactions for the period 2018-19? - HELD THAT:- From a combined reading of the definition of ‘debit note’, sub-section (3) of Section 34 of the CGST Act, 2017 and the particulars to be provided in a debit note issued under GST, it is amply clear that the debit note is not an independent document or an invoice in itself and is connected to an invoice as it is issued in pursuance to change in value of an invoice. It, therefore, follows that the financial year to which a debit note pertains, is invariably the financial year in which the original invoice (related to the said debit note) was issued - in light of the provisions of amended sub-section(4) of Section 16 of the CGST Act, 2017(amended w.e.f. 01.01.2021), it is concluded that the applicant shall be entitled to claim the input tax credit only in respect of debit notes issued by the supplier towards the transactions entered into and goods supplied to the applicant during the financial year 2018-19, on or before the due date of furnishing of the return under section 39 for the month of September following the end of the said financial year 2018-19 or furnishing of the relevant annual return, whichever is earlier.
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