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TMI Blog2023 (3) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the employees of various categories. In addition to the remuneration towards wages, the contractee has inter alia agreed to pay the specified amounts as contribution towards EPF, ESI in terms of G.O.Ms.No.151 (Fin-HR-I) Planning & Policy, dated 08.08.2016. In addition to above mandatory payment, the contractee has agreed to pay service charges to the petitioner @ 2.17%. (c) As per Section 9 of the APGST Act, the petitioner is liable to pay GST on receipt of the service charges alone. The petitioner is no way concerned with any other payment. The petitioner collects EPF and ESI from the Government and pays to the respective authorities. While so, the dispute is on account of Form GST DRC-01A which was issued under Section 74(5) of APGST Act as per which, the GST was calculated on the entire value or payment received by the petitioner, though the liability of the petitioner under GST law is only on the service charges being paid and received by the petitioner. (d) The petitioner is only an agent of respondents 4 and 5 for outsourcing of manpower for which, as an agent, the petitioner gets service charges at an agreed percentage. Hence the 3rd respondent has no legal foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, as per Section 15(2) of the AGPST Act, 2017, the value of supply includes taxes, duties, cesses, fees and charges levied under any law for the time being in force other than the APGST Act, 2017 and CGST Act. Further, as per Section 2(31), the term "consideration" in relation to the supply of goods or services or both includes, 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 a recipient or by any other person but shall not include any subsidy given by the Central or State Government. In view of above legal position, the payment received for supply of taxable service shall be treated as "consideration" and GST shall be charged on the total consideration. The above provisions do not specifically mention that the GST shall be charged on service charges alone. The payment of employee's or employer's share in EPF and ESI is a statutory obligation cast upon the petitioner under the EPF Act and ESI Act, but such liability will not have any bearing on the computation of taxable supply under the APGST Act. (c) In addition to above, a perusal of invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is liable to GST, as the short payment of tax was determined as per the provisions of Section 74. The said provision carries with it the applicable penalty and interest. Accordingly, the tax penalty and interest are proposed and are confirmed by following due procedure. The petitioner while charging GST @ 18% on total invoice value, but at the same time paying tax on lesser value only to the extent of service charges is a clear violation of the law leading to unjust enrichment and therefore, the petitioner cannot turn round and claim that the impugned order is illegal. Hence, the writ petition may be dismissed. 4. Heard arguments of learned Senior Counsel Sri M.V.K.Murthy representing Sri M.V.J.K. Kumar, learned counsel for the petitioner and learned Government Pleader for Commercial Taxes-I representing 3rd respondent. 5. Learned Senior Counsel Sri M.V.K.Murthy, argued at length that the components i.e., wages, ESI and EPF, will not form part of the value of the taxable supply of the services for the reason, the wages were paid to the respective employees and the amounts were paid towards ESI and EPF to discharge the statutory obligation and the petitioner has not retained tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents 4 and 5. Hence the petitioner is guilty of undue and enrichment. In that view, the writ petition is not maintainable. He further argued that petitioner cannot contend that she is a mere agent of respondents 4 and 5 and that the wages, EPF, ESI etc., were paid by her to their employees on their behalf and therefore those amounts cannot be taken into consideration to compute the value of taxable supply. Conversely he would argue that there is no employer employee relationship between respondents 4 and 5 on one hand and petitioner and her manpower. He would emphasise that it is a case of pure supply of services of manpower by the petitioner on receiving the monitory consideration. Therefore, the entire value of the services shall be treated as a taxable supply. It is altogether a different aspect that, from out of the consideration received by the petitioner, she has to meet the expenses like wages, statutory deductions like ESI and EPF. He thus prayed to dismiss the petition. 7. The point for consideration is, whether there are merits in the Writ Petition to allow? 8. POINT: We gave our anxious consideration to the above respective submissions. Admittedly the 3rd respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of May 2021 to September 2021, the assessment is confined under the present impugned order for the remaining period i.e., April 2021 and from October 2021 to March 2022. Accordingly, the impugned Assessment Order was passed fixing a total tax liability including interest and penalty at Rs.56,95,19,461/-. 10. In our considered view, no doubt the 3rd respondent has extended some opportunity to the petitioner for personal hearing. However, the fact remains that the petitioner could not avail the said opportunity in view of her old age as she being aged 75 years and also due to her ill health. Having regard to a high tax amount plus interest and penalty proposed to be laid and nature of the contention raised by the petitioner, the 3rd respondent ought to have extended some more opportunity to the petitioner for personal hearing. Therefore, without going into the merits of petitioner's case, we are of the considered opinion that a direction shall be issued to the 3rd respondent to afford a personal hearing to the petitioner and pass Assessment Order afresh in accordance with law on suitable terms. 11. Accordingly, without reference to the merits of the petitioner's case, the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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