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Liquor License Fee is no supply . Is it retrospective or prospective., Goods and Services Tax - GST

Issue Id: - 115556
Dated: 20-10-2019
By:- Rajendra Prasad
Liquor License Fee is no supply . Is it retrospective or prospective.

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Dear Sir,

Liquor License Fee is no supply . Is it retrospective or prospective.

Please clarify ?

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Showing Replies 1 to 12 of 12 Records

1 Dated: 20-10-2019

Applicable prospectively.

2 Dated: 20-10-2019
By:- Atul Rathod

Generally every notification specifies the effective date. but in this case the notification does not specify the effective date.

If you claim retrospectively-could be disputed by department

3 Dated: 21-10-2019
By:- Himansu Sekhar

Circilar is always retrospective if not specifically not provided

4 Dated: 21-10-2019

Here we are talking of Notification No.25/19-CT(Rate) dated 30.9.19 and NOT of circular. Notification is always applicable from the date of issuance unless otherwise specifically mentioned. Here no specific date has been mentioned hence applicable prospectively.

Clarificatory circular is always applicable retrospectively because such circular explains/clarifies the existing position of law i.e. Rule/notification etc. in force

5 Dated: 21-10-2019
By:- Himansu Sekhar


The following Explanation is given in the Notification No. 25/2019-Central Tax (Rate) New Delhi, the 30th September, 2019

"Explanation.- This notification is being issued to implement the recommendation of the 26th Goods and Services Tax council meeting held on the 10th March, 2018 that no GST shall be leviable on licence fee and application fee, by whatever name it is called, payable for alcoholic liquor for human consumption."

My view is derived from the contents of the explanation.

6 Dated: 21-10-2019

Though the decision was taken in March, 18 in the meeting of GST Council but the notification in question does not talk of any specific date. Hence the notification is applicable from the date of issuance i.e. prospectively and not retrospectively.

Let other experts intervene and opine.

7 Dated: 21-10-2019
By:- Himansu Sekhar

You are correct sir, Notf. is always prospective. But in Vandana Global = 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) Case Larger Bench opined that the Explanation to 2(k) will be retrospective. On the basis of that analogy and since it is a beneficial legislation, my view is formed accordingly. But other views are also respected.

8 Dated: 21-10-2019

In the Vandana Global case , the Department wanted to implement retrospectively. The issue is pending with Supreme Court.

(1) Cenvat Credit Rules, 2004 - Amendment to Explanation 2 of Rule 2(k) vide Notification No. 16/2009-C.E. (N.T.), whether clarificatory in nature and thus retrospective in operation?

(2) Cenvat credit of Service Tax - Input Service - Angles, joists, beams, bars and plates used in fabrication of structures embedded to earth, whether eligible as ‘inputs’ for capital goods?

The Supreme Court Bench comprising Hon’ble Mr. Justice Ranjan Gogoi and Hon’ble Mrs. Justice R. Banumathi on 4-7-2018 after condoning the delay granted leave in Special Leave Petition (Civil) Diary No. 16250 of 2018 filed by Commissioner of Customs, Central Excise and Service Tax (Respondent being Rameshwaram Steel and Power Pvt. Ltd.) against the Judgment and Order dated 13-9-2017 of Chhattisgarh High Court in TAXC No. 77 of 2017 as reported in 2018 (16) G.S.T.L. 462 = 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT (Chhattisgarh) (Vandana Global Ltd. v. Commissioner). While granting leave, the Supreme Court passed the following order :


Delay condoned.

Application for exemption from filing C/C of the impugned Judgment is allowed.

Leave granted.

Tag with Civil Appeal Nos. 13921-22 of 2015.”

The Chhattisgarh High Court in its impugned order had held that amendment to Explanation 2 of Rule 2(k) of Cenvat Credit Rules, 2004 vide Notification No. 16/2009-C.E. (N.T.) was not clarificatory in nature and was only prospective in application.

It was further held that angle, joists, beams, bars and plates which go into fabrication of structures embedded in the earth were eligible as ‘inputs’ for capital goods since they were used in relation to their final products as inputs.

[Commissioner v. Rameshwaram Steel and Power Pvt. Ltd. - 2018 (18) G.S.T.L. J220 (S.C.)] = 2018 (7) TMI 2057 - SC ORDER

9 Dated: 21-10-2019
By:- Ganeshan Kalyani

Circular is applicable retrospectively and Notification is prospectively.

10 Dated: 22-10-2019
By:- Rajendra Prasad

Thank you for your excellent answers and sharing of legal knowledge.

In the present case , Can I assume that it is applicable from March 2018 , as aginat the notification in September 2018.

11 Dated: 23-10-2019

No. It is applicable from 1.10.19

12 Dated: 23-10-2019

Dear experts,

The issue will have retrospective effect in view of the following. This decision was taken in the 31st GST Council meeting on the issue of liquor license fees and in the 26th GST Council meeting held on March 2018, it was approved that GST was not leviable on license fee and application fee by whatever name is called, for alcoholic liquors for human consumption and that this would also apply mutatis mutandis to the demand raised by Service tax/Excise authorities in the pre-GST era for similar fees. It is also pertinent to note that the said Agenda item was later withdrawn (Sl.No. 4 of Annexure-II of agenda item 6 (Detailed Agenda Note – Volume 2) (issues recommended by the Fitment Committee for the consideration of the GST Council) stating in the Officers meeting on 21st December 2018 that on merit, no new decision is needed and only the implementation instrumentality needs to be worked out.

In the minutes of the 31st GST Council meeting, it was pointed out that the Hon’ble SC in the case of M/s. Har Shankar v. Others reported in 1975 SCC (1) 737 = 1975 (1) TMI 89 - SUPREME COURT had decided the issue whether the licence fee was an excise revenue and the Hon’ble Chief Minister of Puducherry stated that fee on liquor licence was not under GST and it need not come for discussion to the Council at all. He added that notices were still being issued on this issue for Service tax period and this should also be withdrawn. It is also submitted that the Hon’ble Punjab and Haryana High Court citing the decision of the GST Council also held that no GST/service tax is payable on fees paid for grant of license for sale of liquor for human consumption.

the Hon’ble Punjab and Haryana High Court in the case of M/s. Divya Singla and Others v. UOI and Others reported in 2018 (9) TMI 431, had held that :-

“The petitioners approached this Court seeking quashing of notice dated 15.05.2017 whereby the respondent asked the petitioner to furnish certain information with reference to levy of service tax on the fee paid for award of license for sale of liquor.

Learned counsel for Respondents No. 1 to 3 fairly submitted that he has received instructions to the State that in 26th meeting of GST Council held on 10.03.2018 it has been decided that no GST/Service Tax is leviable on the fee paid for grant of license sale of liquor for human consumption.

Keeping in view the statement made by learned counsel for respondents No.1 to 3, prayer made in the present petition has been rendered infructuous and the same is disposed of accordingly.” (underlining added).

Hope this clarifies and that it will have retrospective effect.

Any other opinion on this subject is welcome


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