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TMI Blog2019 (12) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... ned a clause that the successful bidder should remit 35% of the bid amount within 7 days of issuance of the acceptance letter. Further stipulation is that, the balance amount along with applicable VAT, FDT and other taxes if any, has to be remitted within 14 days from the issuance of the acceptance letter. In another part of the notification it is stated that, the successful bidder should remit VAT at 14.5%. It is also evident from the sale confirmation letters issued to the writ petitioners, that the total amount required to be remitted included IGST @ 18%. The respondent/writ petitioner challenged the demand for remittance of 18% IGST. Inter alia, they sought for a direction to the appellants to accept the purchase value, excluding the amount of IGST demanded. 4. The writ petitions were allowed by holding that, the transactions in question involves tax liability only at 'zero-rate'. The writ petitioner was given permission to deposit the amounts demanded, excluding the 18% IGST. The writ petitioner was also directed to keep all statutory obligations in the movement of the goods in question to its destination, without any diversion. The appellants are directed to make delive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade or commerce. (4) Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce. (5) Supply of goods or services or both, - (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. 8. Intra-State supply. - (1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply : Provided that the following supply of goods shall not be treated as intra-State supply namely :- (i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of such person; (c) where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; (d) where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly; (e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board. (2) Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed." 8. Section 7(1) provides that subject to Section 10 of the IGST Act, supply of goods shall be treated as a supply of goods in the course of inter-State trade or commerce, where the location of the supplier and the place of supply are in two different States or in two different Union territories or in a State and in a Union territory. 9. Section 10 of the IGST Act provides that, place of the supply of goods, other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the IGST Act, such supply if any made to any Special Economic Zone unit should be treated as a supply of goods in the course of intra-State trade or commerce. Therefore it is evident that the supply of goods involved in the transaction in question can only be treated as a supply of goods in the course of intra-State trade or commerce. 11. Further, going by provisions contained in Section 8 of the IGST Act, which determines what is intra-State supply, which provides that, when the location of the supply and the place of supply of goods are in the same State or same Union territory it shall be treated as intra-State supply. In order to ascertain as to where is the place of supply, the provisions contained in Section 10 can be of assistance. [Clause] (c) of Section 10(1) provides that, where the supply does not involve movement of goods, whether by the supplier or by the recipient, the place of supply shall be the location of such goods at the time of delivery to the recipient. In the case at hand, it cannot be disputed that, pursuant to confirmation of the auction, the goods has to be delivered by the appellants to the respondent on making deposit of the requested amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ially to the effect of informing that they were not liable to pay any tax under the local law, because the intended purchase was in the course of export through their unit situated in a Special Economic Zone at Tamil Nadu. Since such an intimation or claim to the effect that no tax under the local statutes would apply, was not seen raised, it was found that the tenderer is bound by the specific conditions set forth in the tender notification. It was also found that the term 'whenever applicable', mentioned in the tender condition specifies about the different types of taxes, like KVAT, FDT, TCS etc. Therefore it is found that, when the KVAT at the prevalent rate will be applicable to all the successful bidders, irrespective of the destination of transportation of goods, the successful bidder is liable to pay the tax at local 'Value Added Tax', at the rate applicable. It was found that, the State is entitled to get appropriate extent of tax as in any other instance of sale, if the transaction is covered by any taxable event. Therefore the contention raised by the appellants in that case, that they have to be exempted from payment of tax because they are transporting it to a SEZ Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a SEZ unit can only be considered as inter-State supply. As long as such supply remains as a 'zero-rated supply' the demand for payment of 18% IGST cannot be sustained. 16. Lastly, yet another contention was raised to the effect that, the proviso to Section 8(1) exempting supply of goods to SEZ unit from the purview of intra-State supply, can be deemed to apply only with respect to a SEZ unit situated within the State itself. For accepting such a contention, something has to be read into the plain and literal meaning of the proviso, which is not at all warranted, because the literal meaning or the intentional meaning would not give rise to any ambiguity or lack of clarity. Further, Section 7(5)(b) would make it clear that despite the location of the supplier and the place of supplier being not within two different States, it should be treated as a supply of goods in the course of inter-State trade, when the supply is made to a SEZ unit. When the rate applicable to such supply is determined as 'zero-rate supply', the demand for any higher rate cannot be sustained. It is pertinent to note that, neither under Section 7(5)(b) or under the proviso (i) of Section 8(1); nor unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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