TMI Blog2019 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... he is entitled to recover the penalty as above in the event of default and delay in payment of EMI. Thus, it is evident that although the agreement between appellant and customer has defined separately the terms Default Interest , Penal Charges and Bounce Charges , but they are exclusive and what appellant recovered or recovers from his customer is only the penalty for delayed payment of EMI under the term Penal Charges . The penalty recovered by the appellant does not get covered by the term penal interest as used by the appellant in his grounds of appeal, as per se it is not interest but it is penalty / penal charges. What is exempted vide N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 is the interest as construed under definition provided in the said notification. By abiding to the correct interpretation of term interest as discussed herein above, the penal charges / penalty being not construed as interest, will not qualify for such exemption. The provisions of clause (d) of sub-section (2) of Section 15 of the CGST Act would apply in these cases where interest is not defined separately anywhere else in a specific context. A separate carving out of the word int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act. The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Bajaj Finance Limited(herein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-22/2018-19/B-85 dated 06.08.2018. = 2018 (11) TMI 884 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA BRIEF FACTS OF THE CASE A. The Appellant is a non-banking financial company and is inter alia engaged in providing various types of loans to the customers such as auto loans, loans against the property, personal loans, consumer durable goods loans, etc. B. The Appellant, inter alia, enters into agreements with borrowers/customers for providing loans to them. The loan agreements provide for repayment of the outstanding dues/ Equated Monthly Installments (EMI) through cheque/ Electronic Clearing System CECS )/ National Automated Clearing House ( NACH ) or any other electronic or clearing mandate. The illustr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the GST law, as an abundant caution, the Appellant had filed an application for Advance Ruling before the Maharashtra Authority for Advance Ruling (hereinafter referred to the Ld. AAR ) on 09.05.2018, on the following questions: i) Whether the Penal Interest is to be treated as interest for the purpose of exemption under Sr. No. 27 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sr. No. 27 of Maharashtra State Notification No. 12/2017-State Tax (Rate) dated 29.06.2017, and Sr. No. 28 of Notification No. 9/2017-lntegrated Tax (Rate) dated 28.06.2017? ii) If the answer to the above is negative, whether the activity of collecting penal interest by the Appellant would amount to a taxable supply under the GST regime? H. The AAR passed the Order No. GST-ARA-21/2018-19/B-24 dated 06.08.2018 = 2018 (12) TMI 1154 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA (hereinafter referred to as impugned order ), holding that the penal interest charged by the Appellant amounts to supply of services under Sr. No. 5(e) of Schedule II to the CGST Act, and is therefore liable to GST. I. Aggrieved by the impugned order dated 06.08.2018, the Appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder an obligation to consider each and every submission of the Appellant and record the reasons for acceptance or rejection of every submission of the Appellant, in order to establish the linkage between the facts, and grant sanctity to the order. In this regard, reliance is placed on the following judgements of the Apex Court: State of Orissa v. Dhaniram Luhar, (2004) 5 SCC 568 = 2004 (2) TMI 687 - SUPREME COURT Oryx Fisheries Pvt. Ltd. v. Union of India, 2011 (266) E.LT. 422 (S.C.) = 2010 (10) TMI 660 - SUPREME COURT Asstt. Commr., Commercial Tax Department v. Shukla Brothers, 2010-TIOL-131-SC-CT = 2010 (4) TMI 139 - SUPREME COURT Commissioner of CGST Central Excise v. M/s. Development Credit Bank Ltd., 2018-TlOL-2313-HC-MUM-CX 4. It is an undisputed fact that the Appellant is an NBFC which is engaged in providing various types of loans to the customers such as auto loans, loan against property, personal loan, consumer durable goods loan, etc. Further, it is also undisputed that interest on loans have been kept outside the levy of GST, under Serial No. 27 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Central Bank of India v. Ravindra, 2002 (1) SCC 367 = 2001 (10) TMI 1065 - SUPREME COURT , wherein the Hon ble Supreme Court dealing with the nature of interest , has held as under: Black s Law Dictionary (7th Edition) defines interest inter alia as the compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use; especially, the amount owed to a lender in return for the use of the borrowed money. According to Stroud s Judicial Dictionary of Words And Phrases (5th edition) interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Deptt. v. G.C. Roy [1992] 1 SCC 508 = 1991 (12) TMI 268 - SUPREME COURT , the Constitution Bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages.... this is the principles of section 34. In Dr. Shamlal Narula v. CIT [1964] 7 SCR 668 = 1964 (4) TMI 10 - SUPREME COURT , this Court held that interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras High Court interpreted the word interest as under: ......Halsbury's Laws of England, Vol. 23, Section 253 defines interest as follows: Interest when considered in relation to money denotes the return or consideration or compensation for the use or retention by one party of a sum of money or other property belonging to another. .The definition of interest in the English Money-lenders' Act, after excluding certain charges, says: But save as aforesaid, interest includes any amount, by whatsoever name called, in excess of the principal paid or payable to a money-lender in consideration of or otherwise in respect of a loan. The word 'interest' has a basic meaning of advantage or profit. When used with reference to, a loan, interest means the profit or advantage of the creditor which he gets by giving to another the use of his money. If the contract stipulates that for the use of the creditor's money a certain profit shall be payable to the creditor, that profit is interest, by whatever name it is called, or if it is called by no name at all. Applying Act 4 of 1938 to the present contract it is clear that the principal is ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money denotes the return or consideration or compensation for the use or retention by one party of a sum of money or other property belonging to another, and any amount repaid over and above the principal sum of money is interest only. 12. It is relevant to note that the position in the GST regime is similar to the position in the pre-GST regime. Therefore, reference is also made to para 4.14.2 of the Revised Education Guide on Taxation of Services dated 20.06.2012 issued by the CBEC, which describes interest as the time value of money. The relevant portion of the same is reproduced herein below: 4.14.2 What are the services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount ? The negative list entry covers any such service wherein moneys due are allowed to be used or retained on payment of interest or on a discount. The words used are deposits, loans or advances and have to be taken in the generic sense. They would cover any facility by which an amount of money is lent or allowed to be used or retained on payment of what is commonly called the time value of money which could be in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Default 20 days G Penal Interest rate 2% p.m. H Penal Interest for the period of delay ₹ 133/- (₹ 10000 * 2% * 20/30) 15. The manner of computing Penal Interest, as explained in the above illustration, substantiates that the Penal Interest collected by the Appellant is an additional interest for the delay in payment of loan instalment beyond the due date. It is nothing but the consideration for the usage or retention of money (i.e. overdue loan instalment) by the borrowers for additional time beyond the stipulated time period (i.e. the due date). 16. In other words, Penal Interest reflects the time value of money. To explain further, it is submitted that where the Appellant grants loan to a customer for a specified duration of time, they earn interest on such loan, which represents consideration for use of money for that specified period of time. Similarly, when the customer delays the payment of instalment of loan beyond the due date as provided in the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction that matters and not the nomenclature given to a particular type of discount. 21. It is therefore submitted that the mere fact that the additional interest for the period of default has been termed as penalty, will not alter the nature of such transaction. 22. It is further submitted that the amount of overdue loan instalment on default would be virtually treated as a new loan transaction under the same contract , and the penal interest so charged on the overdue loan instalment would be treated as interest for such loan amount. In the above illustration, the defaulted loan instalment / EMI of ₹ 10,000/- is, in effect, an additional loan given to the customer, for which penal interest is charged at a specified rate, for the period starting from the date of default till the date of payment of such defaulted EMI, i.e., from 10th June 2018 to 30th June 2018. Hence, in any case, the penal interest charged by the Appellant would be treated as interest only. 23. However, the Ld. AAR in the impugned order held that penal interest cannot be construed as additional interest. In this regard, the Ld. AAR recorded a finding that normally, interest is calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a matter of discretion of the lender, and depends on various factors such as the customer credit history, credit worthiness, past payment records, etc. Therefore, the mere difference in the rate of normal interest and penal interest cannot be taken as a factor for distinguishing the nature of interest and penal interest. Further, though the loan agreements entered by the Appellant with customers in certain cases define the penal interest as not exceeding 3% per month , however, the customer account statements clearly evidence that the penal interest is charged at a fixed rate. Therefore, the findings of the Ld. AAR in this regard are erroneous. 26. It is further submitted that the manner of computing penal interest clearly substantiates that it is nothing but time value of money which is interest only. It is undisputed that penal interest is charged only upon default of payment of the EMI, and it is also undisputed that the same is calculated at a specified rate on the defaulted EMI for the period starting from the date of default till the date of payment of such EMI. Further, such interest for the period beyond the due date is not factored in the EMI and is therefore char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST. In any case, penal interest is liable to be included in the value of main supply. under Section 15(2)(d) of the CGST Act, and therefore, any treatment given to the main supply shall be given to the penal interest, and hence, shall be exempt from GST. 30. Without prejudice to the above, it is submitted that in view of clause (d) of subsection (2) of Section 15 of the CGST Act, the penal interest being an interest/penalty for delayed payment of any consideration for a supply would be included in the value of that supply, which is interest. The said provision is extracted herein below for reference: 15. Value of taxable supply. . (2) The value of supply shall include- (d) interest or late fee or penalty for delayed payment of any consideration for any supply; 31. In view of the above provision, any interest or late fee or penalty charged/levied or collected for delayed payment of any consideration for a supply, shall be includible in the value of the said supply. 32. It is relevant to note that sub-section (2) of Section 15 of the CGST Act is applicable for determination of value of any supply , both for taxable as well as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot in the course or furtherance of business; (c) the activities specified in Schedule l, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. 36. On perusal of the above provision, it can be seen that clause (a), (b) and (c) define the scope of supply, whereas, clause (d) classifies certain activities specified in Schedule II as supply of goods or supply of services. Clause (a) covers all kinds of supply of goods or services made or agreed to be made for a consideration by a person in the course or furtherance of business. Clause (b) specifically includes import of services for a consideration, whether or not in the course or furtherance of business. Clause (c) expands the scope of supply by including activities specified in Schedule i, made or agreed to be made without consideration. 37. It is therefore submitted that for an activity to be treated as supply under the GST law, it has to be carried out for a consideration, except those activities specified in Schedule I for which consideration is not necessary. In other words, any activity undertaken wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where there is no consideration, there is no contract . 42. Reference in this regard is also made to the definition of the term consideration provided in Section 2(d) of the Indian Contract Act, 1872, which reads as under: When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. 43. Furthermore, it is submitted that various dictionaries define the term (consideration as follows: BLACK S LAW DICTIONARY Consideration means something which is of value in the eye of law, moving from the plaintiff, either of benefit to the plaintiff or of detriment to the defendant. WEBSTER DICTIONARY Something of value given or done in exchange for something of value given or done by another, in order to make binding contract; inducement for a contract. 44. From the above discussed meaning of the term consideration , it can be said that consideration would necessarily mean quid pro quo , i.e. something in return. It is a benefit which must be ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikely to flow from the breach, it is called liquidated damages. If it is not a genuine pre-estimate of the loss, but an amount intended to secure performance of the contract, it may be penalty. The question whether a particular stipulation in a contract, is in the nature of penalty has to be determined by the court against the background of various relevant factors, such as the character of the transaction and its special nature. 49. It is relevant to note that the Explanation to Section 74 (supra), clearly states that a stipulation for increased interest from the date of default may be a stipulation by way of penalty. 50. In the present case, the Appellant lends money to the customers with one of the conditions in the loan agreement that the customers shall make timely repayment of loan instalments on the due dates as per the repayment schedule, and in case of any default, the Appellant shall be entitled to charge penal/default interest for the period of default at the specified rate. Therefore, upon default in payment of the instalments, the Appellant shall be entitled to receive damages stipulated in the contract in accordance with Section 74 of the Indian Contract A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant do not amount to a supply under Section 7 of the CGST Act, and therefore, the same shall not be leviable to GST. 57. The Ld. AAR has failed to consider the above submissions, and has proceeded on the presumption that the penal interest is consideration for the toleration of the default committed by the borrowers. However, as explained above, the penal interest is nothing but damages for the breach of contract committed by the borrowers, and such damages do not constitute consideration for any supply. Further, the said breach does not constitute toleration of act, as explained in detail in the submissions made in below. Penal interest collected by the Appellant for the breach of contract by the customer, is not covered under the ambit of clause (e) of Entry 5 of Schedule II to the CGST Act. 58. As submitted above, clause (d) of Section 7(1) of the CGST Act states that the activities specified in Schedule II shall be treated as supply of goods or supply of services. Without prejudice to the above submissions, that the penal interest collected by the Appellant do not amount to consideration for any supply, it is submitted that even such amount does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st in return. 65. The above findings of the Ld. AAR are completely erroneous, in as much as none of the clauses in the loan agreements entered into by the Appellant with the customers provide that in case of any breach, the Appellant would tolerate the same subject to receipt of consideration in the form of penal interest in return. As submitted in the ground above, the penal interest is only in the nature of liquidated damages or penalty payable by the borrowers for the breach of the terms of the loan agreement. Such penal interest does not amount to consideration for any supply. 66. It is further submitted that the above said clause 5(e) of Schedule II uses the word obligation . Therefore, it is important to understand the meaning of the said term to give correct interpretation to the entry. The said term has not been defined in the GST law, therefore, reference is being made to the meaning given to it in other Statutes, and its dictionary meaning, as under: Section 2(a) of the Specific Relief Act 1963: Obligation includes every duty enforceable by law. Commentary on Section 2(a) of the Specific Relief Act, 1963, by Pollock Mulla, at P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation comes into existence, only when there is a duty or a liability on the person making the obligation, with a corresponding right to the other person to enforce such obligation. 68. However, in the present case, there is no obligation upon the Appellant to tolerate an act of non-payment or delayed payment by the borrower, in as much as, neither the Appellant has any duty or liability towards the borrower, nor the borrower has any right on the Appellant. The payment of penal interest neither obligates the Appellant not to take any legal action against the borrower, nor the borrower gains any. right to sue the Appellant for any legal action taken by the Appellant. On the contrary, the borrower is under the contractual obligation to make timely repayment of the loan to the Appellant, and upon the breach of such obligation, the Appellant is legally entitled to recover damages for such breach and also sue the borrower for such breach. 69. It is further submitted that a sum which is payable in pursuance of a contractual obligation is different from a sum payable on a breach of contractual obligation. Therefore, the penal interest payable by the borrower on breach of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. This is because the damage, loss or injury in itself does not constitute a supply under the provision of Australian GST. 76. It is pertinent to bear in mind that the definition of supply under the Australian GST legislation includes within its ambit an obligation to tolerate an act . Thus, when the aforesaid GSTR namely GSTR 2001/4 states that payment of liquidated damages is not towards any supply, it is reasonable to conclude that the GSTR has also considered the clause an obligation to tolerate an act . In other words, the GSTR impliedly concludes that the acceptance of liquidated damages does not amount to tolerating an act and hence would not fall within the ambit of supply for the purposes of GST. 77. Similarly, reference is also made to GSTR 2003/11 , pertaining to payment on early termination of a lease of goods . It has been clarified therein that a payment received to compensate the lessor for damage or loss flowing from early termination as a result of a default by the lessee is not consideration for a supply, even though the lessor brings the lease to an end by exercising the right to terminate the lease. The Ruling further provides that in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istere de Economie [2007] S.T.1 1866, Celex No. 605J0277 , wherein the issue was whether a sum paid as deposit in a contract related to the supply of hotel services was subject to tax or not. The Court held that where the client exercises the cancellation option available to him and that sum was retained by the hotelier as a fixed cancellation charge paid as compensation for the loss suffered and which has no direct connection with the supply of any service for consideration, it was not subject to tax. 81. Further, in a decision of the Court of Appeal (UK) in case of M/s. Vehicle Control Services Limited reported at (2013) EWCA Civ 186 , it has been observed that payment in the form of damages/penalty for parking in wrong places/wrong manner is not a consideration for service as the same arises out of breach of contract with the parking manager. 82. In view of the above discussed rulings, the Appellant would like to submit that the very purpose of liquidated damages / penalty is to restitute or make good, the loss incurred by a person because of a default, non-compliance, etc. of the other person. Such liquidated damages/penalty may be in relation to some other supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such penal charges / penalty, thereby, such act of the Appellant falls under Sr. No. 5(e) of Schedule II to the CGST Act. According to the said order of the Advance Ruling Authority, the penal / penalty collected by the appellant is also not covered in exemption under Sr. No. 27 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as it is over and above the interest amount received by the appellant on account of extending deposits, loans, advances in so far as the consideration is represented by way of interest or discount. Thus, the Authority for Advance Ruling held it as a supply as per Sr. No. 5(e) of Schedule II to the CGST Act. The Authority for Advance Ruling also relied on the loan agreements between the Appellant and the customers, which define the penal charges as overdue charges for non-payment on due dates. The definition nowhere mentions that the said charges are additional interest costs to be incurred by the customers. The clauses of the loan agreement show that the Appellant itself is treating the Penal Charges collected by it as Penalty . The contention of the appellant that the amount of overdue loan installments amounts to a new loan transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the nomenclature adopted by appellant, it is evident that the agreement between appellant and customers has clearly defined the terms therein and the terms (Default Interest , Penal Charges and Bounce Charges are defined separately and therefore are exclusive of each other. A further reference to the clause 16 and schedule referred therein shows that the appellant recovers the charges for delay in payment of EMI and for continuing of non-payment as a penalty not exceeding 3% per month on amount due calculated on pro-rata basis from due date till date of actual payment. In clause 3 (iv) of the agreement also the appellant mentioned that he is entitled to recover the penalty as above in the event of default and delay in payment of EMI. Thus, it is evident that although the agreement between appellant and customer has defined separately the terms Default Interest , Penal Charges and Bounce Charges , but they are exclusive and what appellant recovered or recovers from his customer is only the penalty for delayed payment of EMI under the term Penal Charges . Therefore, we are also of the opinion that the penalty recovered by the appellant does not get covered by the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in the said definition. This further proves that the intention of the legislature is to exempt only that interest which is covered under term interest defined in clause 2 (zk). In view of the above background, the penalty / penal charges charged/collected by the appellant does not qualify as interest thereby do not qualify for exemption under entry 270f the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 92. The appellant while relying on various judgments contended that any consideration received in lieu of or for the use or retention of a sum of money or other property belonging to another is nothing but interest only. And, interest when considered in relation to money denotes the return or consideration or compensation, and any amount repaid over and above the principal sum of money is interest only. In this connection, we are of view that the term interest is defined in the notification and the settled position of law in this regard is that it is open to the Legislature to define words and, if the Legislature has defined it, one cannot go by the meaning in common parlance or what may be called as its natural meaning . In case the term has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal charges. 94. The Appellant have also relied upon the various overseas rulings, viz. UK VAT Notice 701/49, GSTR 2001/4, GSTR 2001/4, GSTR 2003/11, GST Determination No. 2005/6 , to substantiate their contention that the charges for deferment of payment are treated as consideration for exempt supply of credit. As regards these international ruling pronounced in overseas countries, we are of the view that the aforementioned rulings cited by the Appellant are not binding on us. We have interpreted the entire issue on the basis of the provisions laid out in the CGST Act, 2017. 95. The Appellant have, inter-alia, contended on the ground that, in view of clause (d) of sub-section (2) of Section 15 of the CGST Act, any interest or late fee or penalty charged/levied or collected for delayed payment of any consideration for a supply, shall be includible in the value of the said supply. Therefore, the penal charges / penalty so levied by the Appellant would be treated at par with interest, and any treatment given to the main consideration (i.e. interest) shall also be equally applicable to such amount (i.e. penal interest). Hence, the penal interest would be exempt from GST und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1881 for dishonor of cheques issued by borrower or under Payment and Settlement System Act, 2007. c. BFL shall be entitled to take possession of the product without prejudice to any other remedy available with BFL .. 97. From the above referred clause 25 of the agreement it is clear that the default in payment of EMIS is hereby deemed to be default under the provisions of agreement entered between appellant and customers. From the above referred clause 26, on any default or breach of the agreement the remedies available with the appellant are either to recall loan or cancellation of agreement, initiation of legal proceedings under Negotiable Instruments Act or as the case may be under Payments and Settlement Act, taking possession of the product, etc. However, the appellant instead of taking recourse to the remedial provisions in the agreement itself is tolerating the act or the situation of delay in payment of EMI by customers, by imposing / recovering penalty as envisaged under the terms of the agreement. Hence, such an activity of tolerance of situation of delay in payment of EMI is adequately covered in the second expression provided therein above said clause 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration whether or not in the course or furtherance of business: (c) the activities specified in Schedule l, made or agreed to be made without a consideration and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. From above said scheme of scope of supply it is evident that Clause (a) covers all kinds of supply of goods or services made or agreed to be made for a consideration by a person in the course or furtherance of business. The wording provided in Clause (a) start with all forms of supply such as It means that the form of supplies enlisted there in as an example and it is inclusive of all other than those of enlisted. Clause (b) specifically includes import of services for a consideration, whether or not in the course or furtherance of business. Clause (c) expands the scope of supply by including activities specified in Schedule I, made or agreed to be made without consideration. 99. Whereas, Clause (d) of the section 7 (1) of the CGST Act is very clear and provides for inclusion of activities enlisted in Schedule II to be treated as supply of goods or as the case may be supply of services in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned charges. The definition is reproduced herein:- consideration in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by another person but shall not include an subsid given by the Central Government or a State Government: (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: The consideration also includes the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both. Here, the bounce charges recovered by the Appellant from their borrower can be construed as the monetary value of the act of the tolerance from the side of Appellant in the case of default by the borrower. Thus, this argument of the Appellant is not tenable. 102. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct legal interpretation. 104. The relevant extract of Hon. Supreme Court judgment in the case of PIL of Shri. Jayant Verma Vs. Union of India, dated 16/02/2018 = 2018 (2) TMI 1326 - SUPREME COURT related to the expressions separated by semicolon is as under: We are afraid we cannot agree for several reasons. firstly, purely grammatically, a semicolon separates the two expressions showing that they are not inextricably connected Entry 5, List III deals with seven completely different subjects, all banded together under Entry 5 and separated by semicolons, making it clear that each subject matter is separate and distinct from what follows each semicolon............. .. The first expression agreeing to the obligation to refrain from is followed by semicolon and word or itself indicates that the legislature intended to read these expressions separately in a disjunctive manner. This has been discussed by the Hon. High Court of Kerala in case of Mr. Vincent Mathew Vs. LIC of India dated 15/01/2013. The relevant portion of said judgment is as under: But, what is more relevant and crucial for the purpose of deciding the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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