|
Advanced Search Options
GST - Case Laws
Showing 141 to 160 of 160 Records
-
2021 (7) TMI 350
Maintainability of petition - Court had directed that after hearing the Petitioner an order should be passed on the SCN not later than 15th March, 2021 but Principal Commissioner, GST and Central Excise, Bhubaneswar has passed a detailed order on 17th March 2021 - HELD THAT:- The impugned order is appealable under the statute in question, the Court while leaving it open to the Petitioner to urge all the grounds raised in the present writ petition before the appellate forum declines to interfere in the impugned order, without expressing any view whatsoever on the merits of the contentions of the Petitioner.
Petitioner states that the Petitioner would be filing applications before the Tribunal both for condonation of delay and seeking waiver of pre-deposit. If such applications are filed, they will be considered on their merits and in accordance with law by the appellate forum - petition disposed off.
-
2021 (7) TMI 337
Validity of assessment order - clients were not provided adequate opportunity to submit the documents - violation of principles of natural justice - HELD THAT:- No doubt, the country was reeling under the COVID-19 pandemic, which may have caused inconvenience to petitioner in participating in the hearing. However, nothing prevented him from communicating this fact to the assessing authority and seek adjournment in the matter - the petitioner has annexed documents to show that bills were submitted prior to the introduction of GST Act, 2017 and it is claimed in view of taxes being deducted at source by the Government department the petitioner cannot be saddled with liability under GST Act. As such materials had not been placed before the assessing authority, the said authority had no occasion to consider tax liability from such angle.
To strike a balance between the indolence of petitioner in not responding to the notice and participating in the hearing culminated in passing the impugned orders on one hand and the necessity of fair adjudication based on all relevant materials, the matter is remanded for fresh hearing subject to conditions.
Petition allowed by way of remand.
-
2021 (7) TMI 334
Correction of amount shown in GST TRAN-1 - Transitional credit - Period of limitation - Constitutional validity of Section 140 of the CGST Act - carry forward of Input Tax Credit - revenue neutrality - HELD THAT:- The writ petition is liable to be allowed - Admittedly, there have been multiple difficulties, both technical and otherwise, that have been faced by assesses and the Department post introduction of GST with effect from 01.07.2017. In such a situation a bonafide human error as in the present case should be permitted to be rectified.
There is no dispute expressed by the respondents in its counters on the position that the error committed is inadvertent - the exercise of transitioning ITC is revenue neutral at this juncture, since what is enabled by permitting such transition is only the carryforward of the ITC and the utilization of the same will be subject to proper verification by the Assessing Officer at the time of assessment.
It does not stand to reason that the date of filing of Form-1 and date for revision of the same be one and the same and in order to be viable, there must be a sufficient gap of time in between the two - Section 120A grants only one opportunity to the petitioner to rectify the Form TRAN-1 and there is, in my view, no basis for such restriction. In this case, the last dates for filing of TRAN-1, and seeking revision of the same are both 27.12.2017. The petitioner has uploaded the TRAN 1 on 27.12.2017 and there was thus, no time available for the petitioner to have sought revision of the error that was occasioned in the Form.
The respondent will enable the filing of revised Form TRAN-1 by opening of the portal and this exercise will be completed within a period of eight weeks from today - Petition closed.
-
2021 (7) TMI 315
Constitutional validity of Rule 86A CGST Rules/WBGST and for reading down Section 16(2)(c) of the CGST Act/WBGST Act - HELD THAT:- The issues raised in this writ petition cannot be adjudicated without calling for affidavits. Since the Constitutional validity of both Central and State Act has been challenged, the petitioners have to serve notice upon the Attorney General of India as well as Advocate General of the State of West Bengal. The interim orders as prayed for by the petitioners is same as final relief, which according to this court cannot be granted at the motion stage and furthermore, quashing of the proceedings also cannot be done at the motion stage. It is also settled position of law that every piece of legislation is presumed to be legal and valid so long it is not declared invalid by any court of law.
No interim order at this stage is passed and any action taken against the petitioners during the pendency of the writ petition will abide by the result of the writ petition - Matter to appear in the list for final hearing after eight weeks.
-
2021 (7) TMI 303
Principles of natural justice - credit blocked - Petitioner has not been served with any notice or the reasons for blocking the credit - HELD THAT:- If the powers are exercised under Rule 86(A) of the Goods & Services Tax Rules, 2017, then also, the concerned authority is required to give reasons for blocking the credits in the credit ledger of the Petitioner.
Let Notice be issued, making it returnable on 30.6.2021.
-
2021 (7) TMI 265
Classification of goods - rate of tax - alcohol based hand santizer - classifiable under Heading 3808 under the Customs Tariff Act taxable at 18% or classifiable under HSN 3004 taxable taxable 12%? - HELD THAT:- The alcohol-based hand sanitizers are commonly understood as hand hygiene product used to disinfect the hands from disease spreading germs. It is not commonly considered as a medicine used for the treatment or prevention of any disease or ailment. Even during the current pandemic, the use of alcohol-based hand sanitizer has been propagated only as a good hand hygiene practice which will prevent the transmission of the virus from one human being to another - The survey conducted among a cross section of people from different age groups showed that almost 79% were aware that hand sanitizer is used for maintaining good hand hygiene and to prevent the spread of disease during the Covid pandemic. Therefore, applying this test of common parlance and the fact that the impugned product does not have any therapeutic or prophylactic properties, we hold that the alcohol-based hand sanitizer cannot be classified as a medicament under Chapter Heading 3004 as claimed by the Appellant.
Classification under HSN Heading 38.08 - HELD THAT:- A DGFT Notification is not an authority for determining the classification of goods under GST law. Classification of goods is to be determined based solely on the description of goods given in the First Schedule to the Customs Tariff Act read together with the relevant Section Notes and Chapter Notes. Moreover, the conditions and restrictions contemplated by one statute having a different object and purpose should not be mechanically imported and applied to a fiscal statute. The reference to the ITC HS Code for Alcohol-based hand sanitizers which has been made in the DGFT Notification dated 6-5-2020 is not a standard for interpreting the classification of goods as per the Customs Tariff Act.
Rate of tax - HELD THAT:- The goods falling under Chapter Heading 3808 attract a tax rate of 9% CGST and 9% SGST in terms of entry Sl.No 87 of Schedule III of Notification No 11/2017 CT (R) dated 28-06-2017. With effect from 14th June 2021 up to 30th September 2021, the GST rate on hand sanitizer falling under Chapter Heading 3808.94 has been reduced to 5% GST (i.e 2.5% CGST and 2.5% SGST) vide Notification No 05/2021 CT (R) dated 14th June 2021.
-
2021 (7) TMI 264
Classification of goods - rate of tax - Isopropyl rubbing alcohol IP - Chlorhexidine Gluconate and Isopropyl Alcohol solution - medicaments or not - classifiable under the HSN 3808 taxable at 18% or at 12% under HSN 3004? - applicability of Schedule III of Notification No 01/2017-Central Tax (Rate) dated 28-06-2017 - HELD THAT:- Chapter 3004 of the Customs Tariff covers medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses. Though the terms 'therapeutic and prophylactic' have not been defined in either the Customs Tariff or the GST law, a common understanding of the term 'therapeutic' is treatment of a disease whereas 'prophylactic' is preventing the onset or progression of a disease. For a product to be classified as a medicament under Chapter Heading 3004, it is important that the product has either of the two qualities i.e therapeutic or prophylactic. Even if a product is manufactured using ingredients regulated under the Drugs and Cosmetics Act and according to the formula prescribed in the Pharmacopeia, it cannot be classified as a medicament under Heading 3004 unless it is meant for therapeutic or prophylactic uses - the alcohol-based hand sanitizers viz. Isopropyl Rubbing Alcohol and Chlorhexidine Gluconate and Isopropyl Alcohol solution, cannot be considered as a `medicaments' classifiable under Chapter Heading 3004.
The hand sanitizers do not serve as a replacement for through handwashing with soap and water. Instead, the alcohol-based hand sanitizers are thought to bring the consumers some of the benefits of handwashing when washing hands with soap and water is not practical in certain settings. In fact, alcohol-based hand sanitizers are usually preferred to handwashing with soap in occupational health care setting and in community settings. They are faster, more efficient and easier on the skin than repeated handwashing with soap and water. However, hand sanitizers are not suitable for all settings.
Classification of goods is to be determined based solely on the description of goods given in the First Schedule to the Customs Tariff Act read together with the relevant Section Notes and Chapter Notes. Moreover, the conditions and restrictions contemplated by one statute having a different object and purpose should not be mechanically imported and applied to a fiscal statute. The reference to the ITC HS Code for Alcohol-based hand sanitizers which has been made in the DGFT Notification dated 6-5-2020 is not a standard for interpreting the classification of goods as per the Customs Tariff Act.
Rate of Tax - Isopropyl Rubbing Alcohol - Chlorhexidine Gluconate - Isopropyl Alcohol solution - HELD THAT:- The goods falling under Chapter Heading 3808 attract a tax rate of 9% CGST and 9% SGST in terms of entry Sl.No 87 of Schedule III of Notification No 11/2017 CT (R) dated 28-06-2017. With effect from 14th June 2021 upto 30th September 2021, the GST rate on hand sanitizer falling under Chapter Heading 3808.94 has been reduced to 5% GST vide Notification No 05/2021 CT (R) dated 14th June 2021.
-
2021 (7) TMI 263
Classification of services - services of support services to Airbus SAS which is separately compensated with a service fees computed on a cost-plus markup basis - Intermediary services or business support services? - Zero-Rated Supply or a Normal Supply - relationship of principal and agent - HELD THAT:- The applicant is of the opinion that the activities undertaken by them are classifiable under Heading 9983 with description of ‘Other professional, technical and business services’. As per the explanatory notes to the scheme of classification of services, heading 998399 offers the same description. This heading includes specialty design services including interior design, design originals, scientific and technical consulting services, original compilation of facts/ information services, translation services, trademark services and drafting services.
Intermediary services or not - HELD THAT:- The reliance on principal to principal relationship or calling oneself as an independent contractor is not relevant for the purpose of determining an intermediary as per the definition. An intermediary will merely facilitate or arrange the supply of goods or services between two or more people but will not be providing such supplies on his own account. Here, the word, ‘such’ is of paramount importance. ‘Such’ goods in the present case are the raw materials supplied by the vendors to Airbus Invest SAS, France - the activities performed by the applicant are fulfilling the parameters mentioned in the definition of ‘Intermediary’ as per Section 2 (13) of IGST Act, 2017.
The activities carried out in India by the Applicant would constitute a supply as “Intermediary services” classifiable under SAC 998599 - The services rendered by the Applicant do not qualify as ‘export of services’ in terms of sub-section 2 of Section 6 of the IGST 2017 and consequently, are exigible to GST at the rate of 18% in terms of clause (iii) of entry no. 23 of N/N. 11/2017-Central Tax (R) dated 28.06.2017.
-
2021 (7) TMI 255
Levy of Interest in terms of tax to be remitted by adjustment of credit available in the electronic register - Section 50 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- As per the decision of this Court in M/S. MAANSAROVAR MOTORS PRIVATE LIMITED VERSUS THE ASSISTANT COMMISSIONER, THE SUPERINTENDENT OF GST & CENTRAL EXCISE, THE BRANCH MANAGER [2020 (11) TMI 107 - MADRAS HIGH COURT], where it was held that Learned counsel for the petitioner states that the interest liability relating to belated payment of tax both by cash and reversal of ITC has been coercively recovered. With the insertion of the proviso to be taken to be retrospective, these writ petitions are allowed.
Thus, the impugned order is partly set aside - this writ petition is disposed off.
-
2021 (7) TMI 235
Validity of interim arbitral award - Reimbursement of GST on production charges/supply of meals with effect from 1st July 2017 - welcome drink served to the passengers was provided by IRCTC - welcome drink formed a part of initial period of contract or not? - policy decision dated 07th February, 2017 - pecuniary jurisdiction as per the provision of Section 12(2) of the Commercial Courts Acts, 2015 - HELD THAT:- The contention that the policy decision dated 07th February, 2017 became a part of the contract between the parties has rightly been disallowed by the learned Arbitrator, by holding the same to be a fresh policy decision brought in by IRCTC post entering into the licensing agreement with DC. IRCTC could not give any justification for bearing the burden for the initial period between 19th December, 2016 to 4th March, 2017, despite it’s alleged understanding to the contrary. Its continued supply of welcome drink without expressly affirming that the contractual obligation for the job lay on DC, reaffirms the uncertainty of contractual obligations. On the basis of the conduct and the testimony of witnesses, the learned Arbitrator has rightly held that the actions of IRCTC exhibit ambiguity about DC’s contractually stipulated obligations, which were then redressed by way of the ex post facto policy decision.
The interpretation of the contract, as done by the learned Arbitrator, is based on the conduct of the parties, the contractual stipulations, as well as the evidence on record. This court finds reasoning supporting such interpretation to be rational, balanced, and germane, and sees no reason to disagree with the same, especially when construction of contract falls within the realm of an arbitrator’s jurisdiction. For the aforesaid reasons, the court finds no merit in this ground of challenge.
GST on production charges / supply of meal, post the introduction of the GST regime - HELD THAT:- GST regime has been introduced by the Central Government and is applicable to the services being provided by DC and is not in lieu of VAT, which has since been abolished. Therefore, the payment of GST on production charges is admissible to DC, which is to be reimbursed upon furnishing proof of deposit of the same with the concerned authorities - the quotes for supply/production of food in terms of Annexure-F were inclusive of taxes. There was no GST on production of food, neither on the date of tender nor on the date of award of licence. It was introduced much later, with effect from 1st July 2017. Would this tax be reimbursable to DC, or, in light of contractual provisions, it would be included in the rates quoted in the tender, was the question before the Arbitrator.
The GST laws has replaced the erstwhile indirect taxation regime. This value added tax subsumed several indirect taxes, including VAT, which was an indirect tax, levied state-wise. Earlier, VAT was levied on production, in accordance with State-specific VAT Acts, which was being borne by DC. DC has explained that since the trains were moving through several states and each state had a different rate of tax under State VAT laws, it was not feasible to account for the same, therefore production charges were paid inclusive of taxes. Besides, no Input Tax Credit was available to IRCTC for VAT - The bifurcation of production charges was done under the afore-noted circular and it was advised that GST is to be reimbursed to the service provider on submission of proof of deposit.
IRCTC’s witness admitted that tax invoices uploaded by DC under GSTR-1, in the return filed for outward supplies, have been reflected in GSTR-2, in the return of inward supplies of IRCTC, which is auto populated on the basis of GSTR-1. The tax paid to DC would thus be available as ITC for IRCTC to pay its outgoing tax liability. Further, in the train fare, GST charges are being included and recovered from the passengers on production of catering services (i.e. meals) at the agreed rates - the court does not find any fault with the interpretation of the relevant terms of the contract.
The learned Arbitrator has decided the dispute within the four corners of the contractual provisions, in light of the change in tax regime brought about by the introduction of GST laws. It cannot be held that his findings are unfair or suffer from perversity. Therefore, the court cannot hold the reasoning to be wholly unsustainable, in the absence whereof, it is impermissible for the court to interfere - petition dismissed.
-
2021 (7) TMI 233
Seeking grant of Bail - Input tax credit - credit availed without supply/ receipt of goods and services - offence under Section-132(1)(b)(e)(f)(i)(j)(l) of the Central Goods Services Tax Act, 2017 - HELD THAT:- The statement of the Petitioner being then recorded, the Officers strongly sensed something fishy and dubious going on in the matter touching the unwanted entitlement and availment of ITC. It is said that ten (10) Firms have been created by hatching conspiracy in carrying out such magnitude of business activities like transfer of goods and services inter se without those taking place in reality and showing fake transactions to be genuine with other financial adjustment as those were ascertained upon investigation leading to the arrest of the Petitioner on 16.12.2020. Materials are yet to surface as to the developments with regard to the notices/summons issued to those entitles for deposit of the ITC as according to the Prosecution, illegally availed for pecuniary gain by playing fraud on the system and mechanism in place.
The Petitioner is said to have been involved in commission of the above Economic offences which are considered to be grave. Such dubious activities in committing offences for making huge unlawful gain by causing huge loss to the State Exchequer is a step towards not only scuttling the process of development in the country but also in standing as developed country in the globe in which our march is on - the roles alleged to have been played by the Petitioner stands in the direction of making unlawful financial gain by putting up the show that for such sincere involvement in business and carrying out the same, his entitlement to the huge sum as incentive in the form of Input Tax Credit (ITC) flowed which he received having the tendency of foiling the entire move in introducing this new Tax Regime.
This Court is not inclined to accept the present move of the Petitioner for grant of bail - Application dismissed.
-
2021 (7) TMI 229
Extended period of limitation for filing an appeal - on-going COVID-19 pandemic situation - reliance have been placed in the judgments of the Supreme Court, IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (3) TMI 497 - SC ORDER], IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (1) TMI 261 - SC ORDER], IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 671 - SC ORDER] and IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER] - HELD THAT:- Original orders dated 28.05.2020 passed by R2, i.e., the Assistant Commissioner of Central Tax, had been impugned before the first appellate authority/R1. As per the provisions of the Central Goods and Services Tax Act, 2017, the period of limitation for filing of first appeal is 90 days, extendable by 30 days at the discretion of the appellate authority.
The first respondent is directed to take it on file the appeals filed by the petitioner, hear the same and dispose the same on merits after hearing the petitioner, either virtually or otherwise - Petition disposed off.
-
2021 (7) TMI 228
Principles of Natural Justice - Seeking withdrawal of assessment order - valid return along with the requisite taxes was filed - seeking withdrawal of consequential Composite Notice to Third Person - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences.
Petition disposed off.
-
2021 (7) TMI 223
Transfer of accumulated unutilized Input Tax Credit - shifting of factory from one state to another - Rule 10 of the CENVAT Credit Rules, 2004 - HELD THAT:- There are no transactions within the State of Tamil Nadu after 2016. The petitioner had no scope for utilizing the same. Sub-clause (ii) to first proviso to Section 140 of the Tamil Nadu General and Service Tax Act, 2017 makes it clear that a registered person shall not be allowed to take credit where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date - The credit would have survived for being transitioned under the Tamil Nadu Goods and Service Tax Act, 2017 provided the petitioner continued to have transactions in Tamil Nadu. It is confined to credit which was carried forward under any existing law or goods which were held in stock on the appointed date.
The amount of input tax credit, even if it was lying unutilized as on 01.07.2017 cannot be transitioned to a new registration obtained after implementation of the respective Goods and Service Tax enactments to its Sri City Unit in Andhra Pradesh in the light of Section 25 (5) of the respective Goods and Service Tax Enactments - petitioner’s case also does not fall within the purview of Section 54 of the Tamil Nadu Goods and Service Tax Act, 2017 read with Chapter X of the Tamil Nadu Goods and Service Tax Rules, 2017. Refund of unutilized credit, it is permissible under Section 54(3) of the TNGST Act, 2017, only if such credit is lying unutilized at the end of the tax period.
The prayer of the petitioner for either transfer or refund of such input tax which was credit lying utilized under TNVAT Act, 2006 does not arise - It is quite possible that the petitioner while removing the capital goods, work in progress and inputs had not discharged its liability under Rule 3(5) of the CENVAT Credit Rules, 2004. It would require for detailed examination by the concerned jurisdictional officer. Therefore, refund of input tax credit lying unutilized which has been transitioned by filing with Trans-1 after the implementation of Central Goods and Services Tax Act, 2017 under Section 54 of the Central Goods and Services Tax Act, 2017 as in the Section 54 of the the Tamil Nadu Goods and Services Tax Act, 2017 cannot be considered.
There are no merits in this Writ Petition for either transfer of refund of input tax Credit (CENVAT Credit) which was transitioned by the petitioner by filing Trans-1 - petition dismissed.
-
2021 (7) TMI 174
Validity of assessment order - violation of constitutional provisions and in violation of the Act - HELD THAT:- The appellate authority is the Tribunal constituted and the appeal is to be preferred under Section 86 of the Indian Evidences Act, 1994. The importance of the appellate remedy can never be undermined and the petitioner has to exhaust the same as the mixed question of fact and law are to be considered by the appellate authority, who is the final fact finding authority - Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise.
The High Court cannot conduct a roving enquiry with reference to the facts and circumstances, based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. Thus, the importance of fact finding by the appellate forums is of more value for the purpose of providing complete justice to the parties approaching the Court of law - The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming.
The petitioner is at liberty to approach the appellate authority, by preferring an appeal in a prescribed format, following the procedures contemplated, within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off.
-
2021 (7) TMI 128
Detention of goods alongwith vehicle - detention of goods on the ground that out of the two e-way bills generated by the petitioner validity of one of them had expired - intent to evade was present or not? - Case of petitioner is that detention of such goods at the border check post under unprotected conditions would damage the goods as the product is perishable - HELD THAT:- The consignee has paid the full tax of ₹ 1,78,283/- on the value of the goods.
Considering the submissions made by the counsel for the petitioner it is held that further continued detention of the vehicle and the goods would serve no purpose. Let the vehicle with the goods be released on certain terms and conditions. While permitting the GST authorities to carry on assessment if the competent authority is of the opinion that there has been any infraction of any rules, regulations or statutory requirement. However, pending such adjudication the goods and the vehicle may be released.
The petitioner shall either deposit or give Bank guarantee to the tune of 25% of possible duty with penalty. For such purpose, respondent No.3 shall convey to the petitioner within 2(two) days from today the possible amount of duty with penalty that may ultimately be imposed even if the petitioner’s explanations are not accepted - petition allowed.
-
2021 (7) TMI 127
Continuous Blocking of the electronic credit ledger beyond one year - Input tax credit - fake invoices issued by non-existing firms - Rule 86(A)(1) of C.G.S.T. Rules, 2017 - HELD THAT:- The continuance of blockage of petitioner’s electronic credit ledger cannot continue beyond one year, the writ petition stands allowed.
-
2021 (7) TMI 120
Validity of demand notice - HELD THAT:- The e-mails issued by the respondent calling for payment of interest, one of which the petitioner has replied to. It would be appropriate for this conversation to continue and the respondents to hear the party to arrive at a proper reconciliation of the amount to be paid, if any - In fact, in the counter filed in February 20201, the respondent has quantified the interest demand from 10.11.2010 to 22.02.2018 at a figure of ₹ 24,40,546/- and the petitioner may file its reply to the respondent in regard to the quantification made.
Petition disposed off.
-
2021 (7) TMI 74
Classification of services - services provided by the applicant to its overseas client - export of services or not - Place of supply - intermediary services or not - HELD THAT:- The supplier of service i.e., the applicant is located in India and the recipient of the service i.e., the overseas supplier of goods to whom the applicant provides services is located outside India. However, the nature of activities going to be undertaken by the applicant towards arranging or facilitating supply of goods envisages the services closely akin to the services provided by an ‘intermediary’ as defined in clause (13) of section 2 of the IGST Act, 2017.
The crux of the definition of term ‘intermediary’ is lying with the phrase ‘arranges or facilitates the supply of goods or services or both’ between two or more persons. Another condition which requires to be fulfilled is that the person shall not supply such goods or services on his own account - In the instant case, the applicant has admitted that he procures purchase order for supply of goods from the buyers located in India. He then connects such prospective buyers with the supplier of goods who are located outside the country. The supplier of goods thereafter despatches the goods directly to the buyers.
Intermediary services or not - HELD THAT:- It has been admitted by the applicant that the value of supply of services in the form of commission is determined at the rate normally prevalent in the market which is generally 1% or 2% depending on the volume of trade. It clearly establishes the fact that the supply of services as provided by the applicant is inextricably linked with the supply of goods made by the overseas supplier - the applicant being supplier of services by way of arranging or facilitating sales of goods for various overseas suppliers and admittedly the same is not being done on his own account, satisfies all the conditions to be an intermediary as defined in clause (13) of section 2 of the IGST Act, 2017.
Place of supply - HELD THAT:- The place of supply is determined under section 13 of the IGST Act, 2017 where location of supplier or location of recipient is outside India. In the present case, the applicant being the supplier of services is located in India and the recipient of services being located outside the country attracts the provisions of the aforesaid section of the Act ibid - the supply shall be treated as an intra-State supply in terms of sub-section (2) of section 8 of the IGST Act, 2017 and tax will be levied accordingly. This transaction will, therefore, not be covered within the definition of export of services as provided in Section 2(6) of IGST Act, 2017 as it is not satisfying one of the conditions of place of supply being outside India, as enumerated in Section 2(6)(iii) of the IGST Act, 2017 and consequently shall not be treated as zero-rated supply as provided in section 16 of the IGST Act, 2017.
The services of the applicant by way of arranging sales of goods shall not be considered as ‘export of service’ as defined under clause (6) of section 2 of the IGST Act, 2017.
-
2021 (7) TMI 1
Carry Forward of credit of Education Cess, SHE Cess and KKC - carry forward through TRAN-1 is permissible under GST law or not? - Circular No. 87/06/2019-GST - HELD THAT:- It does not mean that the Appellant became so entitled to carry forward even a dead claim of unutilised Education Cess and Secondary and Higher Education Cess against the Output GST Liability after 01.07.2017. The set off and such adjustments could be allowed only if it clearly fell within the definition of “Eligible Duties” or “Eligible Taxes and Duties” as defined in Explanations 1 and 2. On the contrary, Explanation 3 clearly excluded Cess to be so eligible for carry forward and set off. Therefore, there is no iota of doubt that Cess of any kind except National Calamity Contingent Duty (NCCD), which was so specified in Explanations 1 and 2 specifically could be allowed to be carried forward and adjusted against Output GST Liability. It may be noted here that this NCCD is allowed to be transitioned not as CENVAT credit, but because it is specifically included as “Eligible Duties” in Explanations 1 and 2 of Section 140 of the Act.
The credit of such Education Cess and Secondary and Higher Education Cess which could not be utilised against the Output Education Cess and Secondary and Higher Education Cess Liability, while the said impost was in force prior to Finance Act, 2015, became a dead claim in the year 2015 itself and therefore, there was no question of allowing a carry forward and set off after a gap of two years against the Output GST Liability with effect from 01.07.2017.
The unutilised Education Cess and Secondary and Higher Education Cess in the hands of the appellant had become dead CENVAT Credit claim in the year 2015 itself with these levies dropped by the Finance Act 2015 and therefore, there is no question of it being claimed as a right to be carried forward and set off after 01.07.2017 against Output GST Liability - it can be stated that while Cess is collected from the person on whom such liability is fixed to meet a particular kind of expenditure incurred by the Government and its collection and expenditure is dedicated to that particular object or purpose of imposition of Cess such as Krishi Kalyan Cess imposed for the purpose of agriculture advancement or Education Cess imposed for the purpose of education enhancement. While Tax is a General Revenue, which can be spent by the Government for general public purposes.
The three types of Cess involved, namely Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess were not subsumed in the new GST Laws, either by the Parliament or by the States. Therefore, the question of transitioning them into the GST Regime and giving them credit under against Output GST Liability cannot arise. The plain scheme and object of GST Law cannot be defeated or interjected by allowing such Input Credits in respect of Cess, whether collected as Tax or Duty under the then existing laws and therefore, such set off cannot be allowed.
The appellant was not entitled to carry forward and set off of unutilised Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess against the GST Output Liability with reference to Section 140 of the CGST Act, 2017 - it is clear that carry forward of cesses as ITC through TRAN-1 by the appellant is not proper and in the instant case ample statutory provisions are available to restrict admissibility of cesses as ITC in GST to appellant - Appeal dismissed - decided against appellant.
....
|
