TMI Tax Updates - e-Newsletter
July 31, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Valuation under GST - Reduction on account of Discount - Section 15(3)(b) of the CGST Act - Whether the amount paid to authorized dealers towards “rate difference” after effecting the supply of goods by the applicant to aforesaid dealers can be considered for the purpose of arriving at the 'transaction value' in terms of Section 15 of the CGST Act? - Held no.
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Income Tax:
TDS credit - AO directed to allow the credit of the TDS available in the account of the assessee firm which has ceased to exist due to the succession of the business activity by the company in the subsequent year whenever the said receipt or part of the receipt is recognized as income by the company.
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Income Tax:
Rectification order u/s 154 - claim of long term capital loss - the returns filed u/s 139(5) and claim made therein in the revise return, which has no effect on the positive total income as reflected in the return filed under section 139(1), should be allowed to be carried forward and set off.
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Income Tax:
Exclusion of investments in 'Mutual Funds Growth Option' while calculation the disallowance u/s 14A r.w.r. 8D - being investment yielding taxable income - AO directed to make necessary enquiries in light of computation filed by the assessee.
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Income Tax:
Estimation of profit of Suppressed turnover - Generally in real estate/contract cases, profit is estimated at 12.5%. As assessee has mostly sold real estate plots, we are of the opinion that estimation of income at 12.5% on the suppressed turnover will meet the ends of justice.
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Income Tax:
Transfer pricing - Addition on account of the interest on receivables - the six months period granted by assessee is reasonable and so no interest can be levied just because the amounts are shown as outstanding in the balance sheet at the end of the year.
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DGFT:
The exporters/ members of trade are requested to apply in the online module for SEIS only after 01.09.2018.
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Corporate Law:
Declaration from Subscribers and First Directors - Requirement of submission of Affidavit done away with - Mere declaration in specified form will be enough - Rule 15 of the Companies (Incorporation) Rules, 2014.
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Corporate Law:
One Person Company - Meaning of the term "resident in India" who is eligible to incorporate one person company amended - Rule 3 of the Companies (Incorporation) Rules, 2014.
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Service Tax:
Credit Cards Services - issuing bank receiving certain commission from the acquiring bank on swiping of credit cards - the appellant is not engaged in any activity of settlement of the amount. In fact, the appellant is not the settlement agency and is acting only as issuing bank - the amount received by the appellant does not qualify as the ‘credit cards services’.
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Service Tax:
Commercial Training & Coaching Services - appellant is engaged in only selling of study material to the students of these coaching centers and paying VAT on sale of these study material - demand of service tax set aside.
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Service Tax:
Classification of Services - the appellant was providing food services in the premises of Noida Golf Course at Noida - whether the services would fall under the head ‘restaurant service’ or under the head ‘outdoor catering service’? - To be classified as restaurant service.
Notifications
Companies Law-
File No. 1/1/2018-CL.I - dated
27-7-2018
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Co. Law
Central Government appoints the day of 27th July, 2018 as the date on which the provisions of the Companies (Amendment) Act, 2017 shall come into force
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F. No. 1/13/2013-CL-V, part-I, Vol.II - G.S.R. 708(E) - dated
27-7-2018
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Co. Law
Companies (Incorporation) Third Amendment Rules, 2018
GST - States-
F.A-3-22-2018-1-V-(59) - dated
20-7-2018
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Madhya Pradesh SGST
The Madhya Pradesh Goods and Services Tax Rules, 2017
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F.A-3-20-2018-1-V-(58) - dated
5-7-2018
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Madhya Pradesh SGST
The Madhya Pradesh Goods and Services Tax Rules, 2017
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F.A-3-78-2017-1-V-(57) - dated
30-6-2018
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Madhya Pradesh SGST
Corrigendum - Notification of this department No. F-A-3-78-2017-1-V-(31), dated 16th February 2018.
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F.A-3-41-2017-1-V-(56) - dated
29-6-2018
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Madhya Pradesh SGST
Amendment in this department's Notification No. FA-3-41-2017-1-V(47), dated 30th June, 2017.
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F.A-3-20-2018-1-V-(54) - dated
25-6-2018
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Madhya Pradesh SGST
The Madhya Pradesh Goods and Services Tax Rules, 2017.
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F.A-3-19-2018-1-V-(55) - dated
25-6-2018
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Madhya Pradesh SGST
Specifying the goods which may be disposed off by the proper officer after its seizure.
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28/2018-State Tax - dated
29-6-2018
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Maharashtra SGST
The Maharashtra Goods and Services Tax (Sixth Amendment) Rules, 2018.
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27/2018-State Tax - dated
29-6-2018
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Maharashtra SGST
Specifying the goods which may be disposed off by the proper officer after its seizure.
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12/2018-State Tax (Rate) - dated
29-6-2018
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Maharashtra SGST
Exemption of payment under section 9(4) of the MGST Act till 30.09.2018.
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26/2018-State Tax - dated
25-6-2018
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Maharashtra SGST
The Maharashtra Goods and Services Tax (Fifth Amendment) Rules, 2018.
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D.C. (A&R)-2/GST/PWR/Sections/2017-18/ADM-8 - dated
5-6-2018
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Maharashtra SGST
Amendments in the Order No. D.C.(A&R)-2/GST/PWR/Sections/2017-18/ADM-8, dated the 10th October 2017.
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D.C. (A&R)-2/GST/PWR/Sections/2017-18/ADM-8 - dated
5-6-2018
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Maharashtra SGST
Amendments in the Order No. D.C. (A&R)-2/GST/PWR/Sections/2017-18/ADM-8 dated the 10th October 2017
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D.C. (A&R)-2/GST/PWR/Sections/2017-18/ADM-8 - dated
5-6-2018
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Maharashtra SGST
Amendments in the Order No. D.C. (A&R)-2/GST/PWR/Sections/2017-18/ADM-8 dated the 10th October 2017
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ERTS(T) 65/2017/Pt.I/119 - dated
29-6-2018
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Meghalaya SGST
Amendment in the Notification No. ERTS(T) 65/2017/8, dated the 28th June, 2017.
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ERTS(T) 65/2017/Pt.I/107 - dated
13-6-2018
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Meghalaya SGST
The Meghalaya Goods and Services Tax (Fifth Amendment) Rules, 2018.
SEZ-
S.O. 3140(E) - dated
20-6-2018
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SEZ
Central Government notifies an additional area of 1.62 hectares, as a part of Special Economic Zone, thereby making total area of the Special Economic Zone as 31.25 hectares at Hill No. 03, Madhurawada, Visakhapatnam, in the State of Andhra Pradesh
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S.O. 2343(E) - dated
1-6-2018
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SEZ
Central Government de-notifies an area of 16.336 hectares, thereby making resultant area as 179.222 hectares at SIPCOT Industrial Area, Sriperumbudur in the State of Tamil Nadu
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2018 (7) TMI 1761
Valuation under GST - Reduction on account of Discount - Section 15(3)(b) of the CGST Act - Whether the amount paid to authorized dealers towards “rate difference” after effecting the supply of goods by the applicant to aforesaid dealers can be considered for the purpose of arriving at the 'transaction value' in terms of Section 15 of the CGST Act? - Whether the amount paid to authorized dealers towards “rate difference” after effecting the supply of goods would be allowed under Section 15(1) read with Section 34(1) of the CGST Act or under Section 15(3) read with Section 34(1) ibid? Held that:- The discount from the value of supply can be allowed only if discount is in compliance of the provisions of Section 15(3) of the CGST Act, 2017 - the discount that is given after the goods have been sold has to be established in terms of the agreement entered into at or before such supply i.e. the discount that is to be given afterwards has to be mentioned in the terms of the agreement or the criteria for arriving at the quantum or percentage of discount has to be given in the terms of the agreement which is entered into at or before such supply. The wordings of Section 15 (3) (b) (i) very clearly states that quantum of discount is given after the supply of goods has taken place has to be there in the terms of such agreement i.e. it cannot be open ended not based on any criteria. Thus this discount quantum cannot be arrived at without any basis only at the discretion of the supplier. The supplier has to clearly mention the quantum of discount or percentage of discount which is to be worked out on the basis of certain parameters or certain criteria which may be agreed to between the supplier and the recipient and which are predetermined and mentioned in agreement in respect of supply of the goods. It can clearly be seen that the cash discount, price equalization, shoppee discount, quantity discount and annual discount as mentioned in the GST Annexure for Mumbai region at Sr. No. 1, 2, 3, 4, and 5 respectively are clearly complying with the requirements of the CGST Act and the criteria or conditions for availing discount as per Section 15(3)(b)(i) and (ii) of the CGST Act and the criteria or conditions for availing discount as per Section 15(3)(b)(i) are specifically mentioned as per agreement before hand. Ruling:- the amount paid to the Dealer towards “rate difference” and “special discount” as mentioned above, post supply are not complying with the requirements of section 15(3)(b)(i) of the CGST Act and therefore cannot be considered and allowed as discount for the purpose of arriving at the 'transaction value' in terms of Section 15 of the CGST Act.
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Income Tax
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2018 (7) TMI 1757
TPA - comparable selection - functional similarity - Held that:- Assessee is only providing ordinary technical support which is categorized as ITeS BPO services provider in earlier years. We are of the firm opinion that there is no change in assessee’s profile and so it has to be treated as a BPO providing ordinary support services to its AE, whose services may be high end at their end but not by assessee. Accordingly, the analysis of the company’s functional profile and objections on the comparables is considered treating assessee as only BPO. Thus comparing functional profile of comparable company with that of assessee companies dissimlar with that of assessee need to be deselected. Addition on account of the interest on receivables - Held that:- Putting a limit of one month of credit itself by the DRP is arbitrary. Further, as seen from the calculation, AO also calculated the interest wrongly particularly from Sr. No. 34 onwards. Upto Serial No. 1 to 33 in the table given in assessment order, AO has correctly gave thirty days credit period, whereas subsequently, the credit period varied and it has arbitrarily determined, the rationale of which is not forthcoming from the order. Moreover, as relied upon by the Ld. Counsel, the impact of receivables is already been factored in the working capital adjustment by the TPO and as there are no borrowed funds or actual interest liability charging of interest does not arise. We are of the opinion that the six months period granted by assessee is reasonable and so no interest can be levied just because the amounts are shown as outstanding in the balance sheet at the end of the year. The various case law stated above will support assessee contentions. Consequently, we cancel the interest levied and allow assessee’s contentions. Grounds are considered allowed.
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2018 (7) TMI 1756
Suppressed turnover - Held that:- Even though a paper book has been filed, with reference to the admitted turnovers and the rate of profit to be estimated relying on various case law, no material has been placed contesting the turnover determined by the AO as total turnover and the suppressed turnover. Since no evidence has been placed by assessee to differ from the findings of the Ld.CIT(A), we are in agreement with the order of the CIT(A) in para 6.1 with reference to determination of suppressed turnover. Consequently, the impugned suppressed turnover ₹ 6.93 Crores stands confirmed and grounds of assessee on this issue are rejected. Estimation of profit - Held that:- In this case, the quantification itself was done on the third party registers where only the indicative sale prices were recorded. Since more than 70% of the turnover was recorded and the profit at 4% was accepted by AO, we are of the opinion that estimation at 12.5% is reasonable on the facts of the case. Ld. Jurisdictional High Court in the case of ACIT Vs. Ravi Foods Pvt. Ltd., has confirmed net profit rate of 3.91%. That case however, pertain to a food business case, but not real estate. Generally in real estate/contract cases, profit is estimated at 12.5%. As assessee has mostly sold real estate plots, we are of the opinion that estimation of income at 12.5% on the suppressed turnover will meet the ends of justice. Accordingly, modifying the order of CIT(A), we direct the AO to determine the profit at 12.5% of the determined suppressed turnover.
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2018 (7) TMI 1755
Capital gain computation - whether CIT(A) erred in not adopting the fair market value of the property at ₹ 10,69,065/- as on 01.04.1981? - whether the cost of acquisition of the property under question was allowable to the assessee and if yes, to what extent, it was allowable? - indexed cost of acquisition of the property at Rs. Nil - Held that:- The property under question has been sold and undisputedly assessed to revenue. As a logical consequence, the property must have been acquired by the assessee by some mode of acquisition. The cost of acquisition, in terms of computational provisions as contained in Section 48, was clearly allowable to the assessee. Hence, we hold that notwithstanding the fact that cost was not claimed in the return of income, the same was allowable to the assessee. Proceeding further, we find that the FAA has accepted DVO’s valuation of the flat on the date of sale. Nothing has been brought on record to suggest that the same has been contested by the revenue any further. Therefore, there was no reason for not adopting the valuation as on 01/04/1981. The flat, prima facie, was acquired by the assessee before 01/04/1981 and the law provides that in such a case the cost of acquisition would mean cost of acquisition or fair market value as on 01/04/1981, at the option of the assessee. AR, in support of cost of acquisition, has placed on record the copies of purchase documents which apparently have not been considered by Ld. AO. Hence, Ld. AO is directed to appreciate the same and re-compute the income of the assessee in terms of our directions bearing in mind that the assessee’s share in the property was to the extent of 17.14%. Assessee’s appeal stand allowed in terms of our order.
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2018 (7) TMI 1754
Adding the ALV of the residential property as Income from House Property - whether the said property was used for the purpose of business - Held that:- In this case, the assessee failed to prove with any evidence that the said property has been used for its business as guest house. Therefore, the case law relied upon by the assessee is not considered. Thus, we are of the view that the issue needs to be reconsidered by the Assessing Officer in the light of the decision in the case of Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] wherein it was held that if the premises is controlled by Rent Control Act, then the Assessing Officer must undertake the determination of rent himself in terms of the said Act or determine it according to the prevailing rate in the locality. Hence, we set aside the issue to the file of Assessing Officer and direct him to re-consider the issue in the light of our discussion herein above. Disallowing the expenses (i.e. depreciation, electricity, maintenance expenses) pertaining to residential property which was used for the purpose of business - AO disallowed expenses incurred on the ground that once standard deduction as provided u/s. 24 is allowed against rental income/ALV, then no other expenses/expenditure incurred on the said property is allowable - Held that:- Assessing Officer has allowed Standard Deduction u/s. 24 of the Income tax Act, 1961, against ALV determined from the property to compute ‘Income from House Property’. Once standard deduction is allowed, then no further deductions can be allowed towards any expenditure incurred on said property, whether or not such expenses are incurred in the course of carrying out business of the assessee. The expenses, we are of the considered view that the Assessing Officer was right in disallowing expenses towards property. The learned CIT(A) after considering relevant submissions has upheld the additions made by the Assessing Officer. We do not find any error in the order of the CIT(A), hence we are inclined to affirm the findings of the CIT(A) and reject the ground taken by the assessee. Exclusion of investments in 'Mutual Funds Growth Option' while calculation the disallowance u/s 14A r.w.r. 8D - being investment yielding taxable income - Held that:- Being consistency with the view taken by the co-ordinate bench, we direct the Assessing Officer to exclude investment in Mutual Fund Growth Option for the purpose of determining of average value of investments. Further, the assessee has filed a working of disallowance u/s. 14A as per which suo moto disallowance made by the assessee works out to ₹ 51,05,383/-, whereas as per the assessment order the Assessing Officer has taken the suo moto disallowance at ₹ 49,80,383/-. Therefore, we set aside the issue to the file of the AO for the limited purpose of verification of fact with regard to the suo moto disallowance made by the assessee to ascertain whether it is ₹ 49,80,383/- or ₹ 51,05,383/-. Hence, we set aside the issue to the file of the Assessing officer and direct him to make necessary enquiries in light of computation filed by the assessee.
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2018 (7) TMI 1753
Rectification order under section 154 - validity of returns filed under section 139(5) - CIT(A) rectifying the mistake under section 154 of the Act and disallowing the carry forward and set off of the long term capital loss incurred on sale of the property in Netherlands by observing that the assessee is not entitled to claim for carry forward of long term capital loss relying on section 80 r.w.s 139(1) - Held that:- Where the assessee has filed a positive return of income, it cannot be said that the return is a loss return and the return of income is to be treated as a return under section 139 of the Act. The long term capital loss has no effect on the positive total income of the assessee for the current assessment year and hence all the returns of income filed by him need to be considered as a return of income filed under section 139(1) of the Act. Here, the returns filed under section 139(5) of the Act and claim made therein in the revise return, which has no effect on the positive total income as reflected in the return filed under section 139(1) of the Act, should be allowed to be carried forward and set off. We direct the AO accordingly. Both the orders of CIT(A) are quashed on the above issue. Ad hoc disallowance - Held that:- AO to restrict the disallowance at a 10% on all the items above mentioned and recompute the disallowance accordingly. For this we are of the view that neither the AO nor CIT(A) has doubted the genuineness of expenses or unreasonableness of expenses. Just to make it reasonable, we cannot rule out some personal element in some of the expenses, hence, a reasonable disallowance of 10% is restricted. This issue of assessee’s appeal is partly allowed.
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2018 (7) TMI 1752
Entitled to deduction u/s 54F - investments made in a residential house up to the period mentioned u/s 139(1) or 139(4) - whether the CIT(A) was justified in directing the Assessing Officer to treat 50 cents of land as land appurtenant to the residential house for grant of deduction u/s 54F ? - Held that:- In view of the order of the Cochin Bench of the Tribunal (2018 (7) TMI 1640 - ITAT CHANDIGARH) we hold that the assessee is entitled to deduction u/s 54F of the I. T. Act as regards the investments made in a residential house up to the period mentioned u/s 139(4) of the I. T. Act. This ground of appeal of the Revenue is dismissed. Treat 50 cents of land as land appurtenant to the residential house for the grant of deduction u/s 54F - Held that:- In the instant case, the assessee after selling the original asset on 15. 06. 2007, had purchased land admeasuring 196.14 cents of land for construction of residential house on 15. 06. 2007. The CIT(A) in the first round of litigation had considered only the cost of 5 cents of land entitled to deduction u/s 54F. On further appeal by the assessee, the Tribunal restored the issue to the AO. The Tribunal held that for the convenient enjoyment of the residential house and having regard to the social status of the assessee to the extent of land of 5 cents allowed by the CIT(A) was not reasonable. CIT(A) in the second round of litigation, had considered 50 cents of land as land appurtenant to the residential house while granting deduction u/s 54F. DR in the written submission had agreed that 50 cents of land taken as “land appurtenant thereto” was reasonable. Therefore, this issue raised by the Department is dismissed.
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2018 (7) TMI 1749
Treating the liaisoning consultancy receipts as contractual receipts and applying NP @ 8% - Held that:- Keeping in the view the nature of work got done through the sub contractor and the documents produced by the assessee there is no scope of any doubt about the genuineness of the work done and payment made by the assessee to the sub contractor. Even if the AO has wanted to verify the genuineness of the claim then it was open to the AO to summons the concerned persons and examine. Undisputedly the entire work is carried under a composite contract/ work order and assessee is working as one enterprise then in our view the production of separate trading account for each activity is not called for. As regards the net profit apply at 8% we find that the AO has not applied any comparable case or the prevailing rate in the particular industry therefore, the estimation of the net profit @ 8% by the AO is without any basis. Since, we have already decided the issue of rejection of accounts therefore, this issue becomes academic in nature. However, we find that having regard to the fact that this is the first year of the business activity of the assessee and therefore, the income declared by the assessee at GP rate 7.44% in our view cannot be defaulted with. Accordingly, we set aside the order of the authorities below on account of adopting the net profit at 8%. It is well settled law that the rejection of books of account may not necessary lead to an addition to the declared income of the assesee if the income declared by the assessee is reasonable and in line with the comparable bench mark. Having regard to the facts and circumstances of the case we are of considered opinion that no addition is called for even if the books of account are rejected u/s 145(3) of the Income Tax Act. Non grant of TDS credit arising on the amount received by the assessee under the work order - Held that:- As per the provisions of 219 of the Act tax credit on account of TDS is available in respect of the corresponding income offered to tax by the assessee. Since, in the case in hand the TDS was deducted on the amount which was received by the assessee as mobilization advance and the said amount has to be recognized as income of the assessee in the subsequent year however, due to the succession of business of the assessee’s partnership firm by the company the said TDS in the name of the assessee firm will not automatically available for credit to the said company. Accordingly, we direct the AO to allow the credit of the TDS available in the account of the assessee firm which has ceased to exist due to the succession of the business activity by the company in the subsequent year whenever the said receipt or part of the receipt is recognized as income by the company.
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2018 (7) TMI 1748
TPA - comparable selection - Held that:- Assessee is engaged in the business of providing research and development for automotive engineering to its holding company i.e. DAG. It is stated that the assessee-company is compensated on the cost + mark up of 10%, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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Customs
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2018 (7) TMI 1760
Implementation of impugned order - issuance of Advance Licenses - amendments in Licenses - cancellation of licenses - penalty - violation of Rule 10 of the Foreign Trade (FTR) Rules and Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 - Held that:- The finding and conclusion in paragraph 19 of the impugned order having been the sole basis on which these petitions were admitted, a statusquo order was granted restraining the respondents from giving effect to and implementing the impugned order. Rather that was the statement of the respondents themselves and they did not implement it for more than a decade now - no useful purpose will be served by allowing the impugned order to be enforced and implemented. Moreso, when none of the contentions based on the admitted facts are dealt with in the impugned order. Moreso, when none of the contentions based on the admitted facts are dealt with in the impugned order. In the facts peculiar to this case and when the impugned order does not deal with the without prejudice arguments, ignores the mitigating factors, they, all the more we are disinclined to allow the respondents to enforce such an order - The impugned order is quashed and set aside - petition allowed.
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2018 (7) TMI 1751
Valutaion - export of iron ore fines - valuation done on the basis of Fe content - appellant declared Fe content as 61.5% whereas on test the Fe content was found to be 62.32% - demand of differential duty alongwith Interest - Held that:- It is clear from the records, the samples when tested by Deputy Chief Chemist, indicated a Fe content of 62.32 %. The re-test which was sought by the appellant by CRCL Delhi also indicated of 62.2 percent - The findings of the First Appellate Authority on this point are correct. Nothing survives in this case as re-test of Fe content, is indicating Fe content as more than 62% - appeal dismissed - decided against appellant.
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Corporate Laws
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2018 (7) TMI 1763
Winding up petition - sale by Official Liquidator pursuant to orders of the Court - differential premium - whether Transfer of leasehold rights which is an asset of a company in liquidation, either by the BIFR or the Company Court, would qualify as a formal transfer and accordingly no differential premium would be payable on the same? - Held that:- An aid to interpretation is that sales under BIFR schemes, according to Shri Chawan, are formal transfers. Therefore, under SICA (Sections 17(3) and 18(11)) in a restructuring scheme to revive the company, a sale of MIDC lease/assets by the Operating Agency was to be treated as a formal transfer. It would be wholly anomalous and illogical to treat a sale in winding up as a nonformal voluntary sale. Yet another aid to interpretation is the use of the expression “ordinary course of business” in connection with transfers by the process of merger, amalgamation, demerger. This indicates that where such transfers, even if sanctioned by the court, are part of business (i.e. commerce and not necessarily day to day business alone) then such transfers of MIDC land will be voluntary and shall attract differential premium. The position of the company in winding up is the very opposite of ordinary course of business because the company is not carrying on business and is being wound up instead. Hence, it would be reasonable and logical to treat this situation differently under the extant MIDC circulars as forming part of the category of formal/involuntary transfers that do not attract differential premium. In the circumstances, as holding that a sale by Official Liquidator pursuant to orders of the Court will be formal and involuntary transfer, MIDC will not be entitled to any differential premium but only to standard transfer charges. Extension charges - Held that:- For MIDC to claim the extension charges upto the date of winding up or even beyond upto the sale of the property, MIDC has to lodge its claim with Official Liquidator. This is because the extension charges have already accrued in favour of MIDC as against differential premium, which will have to be paid and determined, if payable only at the time of considering the transfer application of a transferee. Therefore, for extension charges, Official Liquidator to consider while adjudicating MIDC's affidavit of proof of debt and decide the quantum of extension charges, if any payable and for what period, whether upto the date of winding up or any earlier period or it is continuing. I am not making any observation with regard to extension charges and that can be decided at the appropriate stage. Therefore, (a) hold that this Court will be the Competent Court and has jurisdiction to decide whether MIDC is entitled to claim differential premium and extension charges; (b) in a sale of leasehold rights by Official Liquidator, it will be a formal and involuntary sale and therefore, no differential premium is payable to MIDC by Official Liquidator but only standard transfer charges and (c) extension charges whether payable and to what extent can be decided at the appropriate stage once MIDC lodges its claim with Official Liquidator.
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2018 (7) TMI 1762
Winding up petition - period of limitation - Held that:- For acknowledgement of a debt it must be an acknowledgment of liability in respect of such amount made in writing signed by the parties. It would be clear that what the Form-C indicates is a statutory averment which is given under the Central State Tax Act. It merely shows delivery of goods as per invoice. It cannot be termed to be an acknowledgement of debt within the meaning of Section 18 of the Limitation Act. Thus the claim which is subject matter of the present winding up petition was barred by limitation when the present winding up petition was filed. In view of the said facts the present petition has no merits and is liable to be dismissed.
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Service Tax
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2018 (7) TMI 1759
Classification of Services - the appellant was providing food services in the premises of Noida Golf Course at Noida - whether the services would fall under the head ‘restaurant service’ or under the head ‘outdoor catering service’? - Held that:- The “outdoor catering service” is to be provided at the premises of the service recipient at his own premises or the premises taken on hire by the service recipient whereas in the case of “restaurant service” to be provided by the service provider in its own premises. Admittedly, in this case the place of service had been provided by the respondent as taken on rent from Noida Golf Course. In that circumstances, place where the service has been provided is premises of the respondent. The service of restaurant and outdoor caterer are distinguishable - Admittedly the services provided by the respondent in a restaurant of Noida Golf Course are in the nature of ‘restaurant service’ as respondent is maintaining menu card, prices fixed in every item and there is no personal interaction with the service recipient in the restaurant - the services provided by the respondent do qualify as ‘restaurant service’. Appeal dismissed - decided against Revenue.
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2018 (7) TMI 1758
Commercial Training & Coaching Services - case of the Revenue is that the appellant themselves are engaged in providing IT Education through the up front companies i.e. M/s APLL - Held that:- The case are not in dispute that the coaching centers are registered coaching center and provide services to their students. The coaching centers are also private limited companies and having separate identity known by the Registrar of Companies - appellant is engaged in only selling of study material to the students of these coaching centers and paying VAT on sale of these study material. It cannot be said that these coaching centers or up front companies of the appellant and the appellant is liable to pay service tax on the payment of sale of study material - demand cannot sustain - appeal allowed - decided in favor of appellant.
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2018 (7) TMI 1750
Credit Cards Services - issuing bank receiving certain commission from the acquiring bank on swiping of credit cards - case of appellant is that the acquiring bank has paid service tax on whole of the amount and out of the said amount some amount has been shared with the appellant - Extended period of limitation - Held that:- It is a fact on record that the acquiring bank is discharging his service tax liability on the amount in question, in that circumstances, no service tax is payable by the appellant and the said fact has also not been disputed by the learned AR during the course of arguments. From the definition of Credit Card Services, it is found that if the appellant is receiving certain commission in relation to settlement of any amount, then and only then the said activity is covered under credit card services - Admittedly, the appellant is not engaged in any activity of settlement of the amount. In fact, the appellant is not the settlement agency and is acting only as issuing bank - the amount received by the appellant does not qualify as the ‘credit cards services’. Extended period of limitation - Held that:- The activity of the appellant was known to the Department much earlier and a show cause notice for the earlier period was also issued to them - extended period is not invocable. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (7) TMI 1764
Penalty u/s 56 (4)(b) read with section 60(4)(b) of the Bihar Value Added Tax Act 2005 - alleged violation of the provision of Section 16(2) of the Bihar Vat Act 2005 - prohibition on sale of all vehicles with B.S. III engines - The simple case of the petitioner is that after the e-suvidha declaration was already generated and handed over to the transport authority, the petitioner came to know about the judgment of the Hon’ble Apex Court in the case of M.C. Mehta [2001 (3) TMI 1063 - SUPREME COURT OF INDIA] and informed that with effect from 01.04.2017, the petitioner would not be able to sell the vehicles of Bharat Stage III. Held that:- Neither in the counter affidavit nor in course of submission before this court the respondent authorities or on their behalf it could be prima facie demonstrated that the petitioner had cancelled the esuvidha declaration generated on 28.03.2017 with any intention to play fraud upon the taxing authorities. There is no answer to the contention of the petitioner that with effect from 01.04.2017, the vehicle loaded on the truck in question were reduced to scraps and were not marketable, if this is the position and not denied by the respondents, this court would be constraint to hold and declare that cancellation of the e-suvidha declaration by the petitioner was only a bona fide act without there being any intention to play fraud with the taxing authorities. Both respondent no. 2 as well as respondent no. 4 have failed to consider the facts and circumstances - No element of fraud or intention to evade tax may be found from the conduct of the petitioner - we have no hesitation in holding Annexure-7 as well as Annexure-11 to the writ application as wholly illegal and without jurisdiction. Application allowed.
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