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JUDICIAL DECISIONS ON INDIRECT TAXES, RECOMMENDATIONS UNDER THE 31ST MEETING OF THE GST COUNCIL AND RECENT ADVANCE RULINGS UNDER GST

A.JUDICIAL DECISIONS ON INDIRECT TAXES

Statute: Goods and Services Tax         

Decision in favour of:     Department

Title: Teesta Distributors and Others V. Union of India and Others 

Debangsu Basak J. 

October 10, 2018.

Citation: [2018] 59 GSTR 35 (Cal)

Bench/Court: In The Calcutta High Court

Goonsa Services Tax—Lotteries—“Goods”—“Actionable Claims”—Definitions—Lottery Is “Actionable Claim” and Goods—Lotteries Excluded from Purview of “Actionable Claims” which do not attract Goods and Services Tax—Lottery Chargeable to Tax—Rates imposed by Goods and Services Tax Council after

Extensive Deliberations at meeting attended by States—Court will not Examine—Differential Rates of Tax is Permissible- Central Goods and Services Tax Act (12 of 2017), ss. 2(1), (52), (98),7, 9, 72 ; Sch. III, Entry 6—Integrated Goods and Services Tax Act (13 of 2017)—West Bengal Goods and Services Tax Act (28 of 2017), ss. 2(1), (52), (98), 7, 9—Lotteries (Regulation) Act (17 of 1998),s. 2(b)—Transfer of Property Act (4 of 1882), s. 3—Constitution (one Hundred and First Amendment) Act, 2016—Constitution of India, arts. 279A(4), 366( 12), (29A).


Statute: Goods and Services Tax & Value Added Tax     

Decision in favour of:     Assessee

Title: K. R. Foods Ltd.   v. Union of India and Others

Devendra Kumar Upadhyaya and Rang Nath Pandey JJ.

September 20, 2018.

Citation: [2018] 59 GSTR 82 (All)           

Bench/Court: In The Allahabad High Court – Lucknow Bench

Goods and Services Tax—Value Added Tax—Repeal and Savings—Sick Industrial Company—Government Order Passed Pursuant to Rehabilitation Scheme Sanctioned by BIFR Allowing Dealer

Deferment of Value Added Tax For Five Years From September 24, 2013—Repeal of Value Added Tax Act—Effect—Order Under Which Deferment of Value Added Tax Granted to Dealer In Terms of Rehabilitation Scheme Saved—Order of Addttional Commissioner Declaring Government Order Inoperative—Not Sustainable—Uttar Pradesh Value Added Tax Act (5 of 2008), s. 71—Uttar Pradesh Goods and Services Tax Act (1 of 2017), s. 174(2)(c).


Statute: Value Added Tax

Decision in favour of:     Assessee

Title: Maharaj Readymades  v. Commercial Tax Officer, Ramanathapuram 

 K. Ravichandrabaabu J.

 August 21, 2018.

Citation: [2018] 59 GSTR 87 (Mad)

Bench/Court:  In The Madras High Court – Madurai Bench

Value Added Tax—Value Added Tax Authorities—Assessing Authority A Quasi Judicial Authority and Should Pass Speaking Order—Revision Notices Issued to Petitioner Proposing to Levy Taxes on Estimated Sales Suppression Arrived at by Inspecting Officers and Penalty—Order Passed Confirming Proposals Without Reference to Petitioner’s Reply or Objections to Notices or

Reasons to Overrule Objection—Non-Speaking Order—Set Aside—Tamil Nadu Value Added Tax Act (32 of 2006).


Statute: Sales Tax

Decision in favour of:     Department

Title:Mahindra and Mahindra Limited v. State of Maharashtra and Another

S. C. Dharmadhikari and Smt. Bharati H. Dangre JJ.

August 14, 2018.

Citation: [2018] 59 GSTR 91 (Bom)        

Bench/Court: In The Bombay High Court

Sales Tax—Value Added Tax—Exemption—Deferral of Sales Tax Under Scheme of Incentives Notified Under Act—Benefit Quantified on Basis of Fixed Capital Investment—Amendment With Retrospective Effect Restricting Benefit to Sum Calculated According to Formula Prescribed By Act—Valid—Dealer Not Entitled to Claim That It Had Exhausted Benefit Prior to Amendment—Maharashtra Value Added Tax Act, 2002 (9 of 2005), ss. 93, 94—Bombay Sales Tax Act (51 of 1959), ss. 41, 41A, 41B, 41BB. 

Review—Assessment—Deputy Commissioner Can Review Order of Assistant Commissioner—Maharashtra Value Added Tax Act, 2002 (9 of 2005), ss. 25.


Statute:  Central Sales Tax

Decision in favour of:     Assessee

Title:Dukes Enterprises v. State Tax Officer, K. K. Nagar Assessment Circle, Chennai

T. S. Sivagnanam

 1. July 26, 2018.

Citation: [2018] 59 GSTR 183 (Mad)       

Bench/Court: In The Madras High Court

Central Sales Tax—Assessment—Revision—Assessing Authority—Jurisdiction—Petitioner Producing Form “C” Declarations Obtained From Buyers After Order Under Central Sales Tax Act Passed by Assessing Authority—Due Credit Given, Net Tax Due Modified and Paid by Petitioner—Notice Issued by Assessing Authority Subsequent to Order Attaining Finality Seeking to Revise Assessment and Order Passed Accordingly—Revision of His Own Assessment Order Already Revised Invoking Section 84 of

Value Added Tax Act—Without Jurisdiction—Order Set Aside—Central Sales Tax Act (74 of 1956)—Tamil Nadu Value Added Tax Act (32 of 2006), s. 84.


Statute:  Value Added Tax

Decision in favour of:     Department

Title: Axis Mutual Fund v. State of Maharashtra and Others

S. C. Dharmadhikari and Smt. Anuja Prabhudessi JJ. 

August 6, 2018.

Citation: [2018] 59 GSTR 212 (Bom)       

Bench/Court: In The Bombay High Court

Value Added Tax—Input Tax—Input-Tax Credit—Mutual Fund—Trustee Company Formed by Mutual Fund For Floating Scheme—Scheme Involving Purchase and Sale of Gold on Behalf of Investors—Single Deed of Trust Permitting Floating of one or More Schemes—Contention That Receipts From Gold Scheme Alone to Be Considered Not Tenable—Receipts on Account of Sale Less Than 50 Per Cent. of Gross Receipts In Year—Set-Off Permissible only on Purchases Effected In That Year Where Corresponding Goods Sold Within Six Months—Proper—Maharashtra Value Added Tax Act, 2002 (9 of 2005), s. 48— Maharashtra Value Added Tax Rules, 2005, r. 53.


Statute:  Value Added Tax

Decision in favour of:     Assessee

Title: Elite Furniture Mart  v. Assistant Commissioner (ST), Nawab Hakkim Road Circle, Coimbatore

T. S. Sivagnanam J.

June 11, 2018.

Citation: [2018] 59 GSTR 286 (Mad)       

Bench/Court:  In The Madras High Court

 

Value Added Tax—Input—Tax Credit—cannot be denied merely because selling dealers not paid tax collected from dealer Government Treasury. Value Added Tax—Assessment—finding that defects admitted during inspection illegal—authority bound to consider dealer’s objections and documents produced, examine correctness of and then take a decision—addition of sum equal to stock variation found at time of addition—not sustainable.

Penalty—Suppression of Turnover—No Specific Reason Recorded by Authority Attributing Mens Rea to Dealer—Question of Levy of Penalty Does Not Arise—Tamil Nadu Value Added Tax Act (32 of 2006), s. 27(3).


Statute:  Service Tax    

Decision in favour of:     Department/Assessee

Title: Max Life Insurance Company Ltd.  v. Commissioner of Central Excise & Service Tax

Sanjiv Khanna and Chander Shekhar JJ.

January 3, 2018.

Citation: [2018] 59 GSTR 302 (Delhi)

Bench/Court:  In The Delhi High Court

Service Tax—Writs Under Constitution—appeal to appellate tribunal—appeal filed against order-in-original on other issues—writ petition against demand for service tax paid on reverse charge basis—court will entertain writ petition when part of order challenged before tribunal—however, assesse admittedly having paid full amount of service tax on reverse charge basis on commission payment to agents—tribunal not to dismiss appeal preferred by assessee on ground of “pre-deposit”—liberty to assessee seek amendment of appeal and direction to Tribunal to Consider—Finance Act (32 of 1994), ss. 73A(2), 78.


Statute:  Sales Tax

Decision in favour of:     Assessee

Title: Guru Nanak Rice Mills  V. Commissioner of Trade Tax, U. P.,Lucknow

Saumitra Dayai. Singh J.

November 20, 2018.

Citation: [2018] 59 GSTR 314 (All)

Bench/Court:  In The Allahabad High Court

Sales Tax—exemption—turnover of goods purchased on commission basis for principals outside state—absence of export order placed on principal irrelevant—purchase order on record—dealer not required to make known details of purchase orders to farmers—books of account accepted and no specific finding of any defect—finding that “SATTI BAHI” not complete as regards description of goods not sustainable—irrelevant where full details of farmers available—details of purchase available, on forms 6r and 9r issued under MANDI ADHINIYAM—form H issued by principal outside state who might export goods outside

Country—form H would not alter nature of transaction performed prior to its issuance—claim to inter-state purchases allowable.


Statute:  Value Added Tax

Decision in favour of:     Department/Remanded

Title:Sri Lakshmi Constructions v.  Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad and Others 

Ramesh Ranganathan and Smt. Kongara Vijaya Lakshmi JJ.

August 29, 2018.

Citation: [2018] 59 GSTR 440 (T&AP)

Bench/Court: In The Telangana and Andhra Pradesh High Court

Value Added Tax—works contract—composition of tax—writ—retrospective amendment raising compounded rate of tax from four per cent. to five per cent.—no challenge in writ petition to retrospective amendment—dealer cannot claim to be governed by lower rate for entire duration of contract—tax leviable only on amount received or receivable by dealer towards execution of works contract—whether, and to what extent, assessing authority had levied tax on tax component not to be gone into by court—matter remanded to assessing authority—Andhra Pradesh Value Added Tax Act (5 of 2005), s. 4(7)(b).


Statute:  Sales Tax

Decision in favour of:     Department

Title: Betty Sebastian v. Assistant Commissioner, Department of Commercial Taxes, Special Circle-III, Koch] and Others

K. Vinod Chandran and Ashok Menon JJ.

March 26, 2018.

Citation: [2018] 59 GSTR 275 (Ker)

Bench/Court:  In The  Kerala High Court

Sales Tax—Reassessment—Limitation—assessment completed—fast track team—reassessment with permission of commissioner—not subject to time-limit—reassessment completed within reasonable time—failure to issue notice before permission of commissioner given—remand would be futile—Kerala

General Sales Tax Act (15 of 1963), ss. 17D, 19.


Statute:  Goods and Services Tax

Decision in favour of: Assessee

Title:Kashi Bartan Bhandar  v.  State of U. P. and Others  

Pankaj Mithal and Ashok Kumar JJ.

October 31, 2018.

Citation:  [2018] 59 GSTR 346 (All)         

Bench/Court:  In The Allahabad High Court

Goods and Services Tax—notice—modes of service—service by affixation—only if service by other modes not practicable—authority not coming to conclusion that service by other modes not practicable and directly resorting to service by affixation— service not proper—Uttar Pradesh Goods and Services Tax act (1 of 2017), s. 169.

Goods and Services Tax—registration—cancellation of registration—not permissible on mere prima facie view that assessee not carrying on any business —Uttar Pradesh Goods and Services Tax Act (1 of 2017).

Writ—Existence of Alternative Remedy—Not Bar Where Order In Question Is In Violation of Natural Justice and Illegal—Constitution of India, art. 226.


Statute:  Goods and Services Tax

Decision in favour of:                 Directions

Title: Corp Mediteche Private Limited v.  State of U. P. and Another 

Ashok Kumar J. 

July 31, 2018.

Citation:  [2018] 59 GSTR 350 (All)

Bench/Court:  In The Allahabad High Court

Goods and Services Tax—Seizure—Tax Invoice and Other Documents Accompanying Goods Produced by Driver of Vehicle When Vehicle Carrying Goods Detained But Part B of E-Way Bill Not Produced—Explanation by Driver That He Was Unaware That Part B of E-Way Bill Also to Be Downloaded But Downloaded and Produced on Same Day—Goods Seized and Order Passed Asking Petitioner to Pay Tax and Penalty of Same Amount For Release of Goods and Vehicle—Writ Petition Filed Initially Not Heard and Order of Seizure and Demand of Penalty Affirmed by Additional Commissioner (Appeals)—Writ Petition—Direction to Release Goods Along With Vehicle on Furnishing Indemnity Bond to Extent of Value of Tax only and to Give Permission to Petitioner to Download Fresh E-Way Bill After Release of Goods and Vehicle—Central Goods and Services Tax Act (12 of 2017), s. 129(3).

Goods and Services Tax—Appellate Tribunal—High Court—Practice—Tribunal Not Established Even After Specific Order Given by Court For Forming Thereof—Serious Issue—Respondents to Proceed Forthwith In This Regard—Central Goods and Services Tax Act (12 of 2017), s.112.


Statute:  Cenvat Credit

Decision in favour of:     Assessee

Title:Star Den Media Services Pvt. Ltd. v. Commissioner of Service Tax, Mumbai-II

Ramesh Nair (Judicial Member) and C. J. Mathew (Technical Member)

April 11, 2018.

Citation:  [2018] 59 GSTR 174 (CESTAT_Mum)  

Bench/Court:  Before The Customs, Excise and Service Tax Appellate Tribunal—Mumbai

Cenvat Credit—Input Service—Definition—Assessee Engaged In Distribution of Television Channel—Advertising Agency Service, Air Travel Service, Business Support Service, Telephone and Mobile Service, Service For Making Blueprint, Record Keeping Service, Health Check-Up Service, Repair and Maintenance Service and Banking Service—Are Input Services Eligible For Cenvat Credit—Cenvat Credit Not to Be Denied Merely Because Registration Number Wrongly Mentioned In Input Service Invoices— Cenvat Credit Rules, 2004, r. 2(1).

B. RECOMMENDATIONS UNDER THE 31ST MEETING OF THE GST COUNCIL

The GST Council met for the 31st time on 22nd December 2018, Saturday at Vigyan Bhavan, New Delhi. It was chaired by the Finance Minister Shri Arun Jaitley. Highlights were rate tweaks, relief in the form of due date extensions, clarity on implementation and streamlining of GST compliance like return filing, registration and refund procedure on the portal.

The following are some of the recommendations made during the meeting:

  1. Proposed single cash ledger for particular tax heading and modalities will be settled after the consultation with accounting and GSTN authorities.
  2. Single disbursement authority scheme for the refund amount sanctioned from either the Centre or the State tax authorities will be tried and implemented on the pilot scheme.
  3. The revised return filing system is scheduled for the trial basis from 1st April 2019 and for the mandatory basis from the 1st July 2019.
  4. Annual returns of the forms including FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 due dates extended till 30th June 2019.
  5. Form GSTR 8 due date for the e-commerce operators for the given months i.e. October, November and December 2018 extended till 31st January 2019.
  6. Form GST ITC 04 due date for the time period i.e. July 2017 to December 2018 extended till 31st March 2019.
  7. Invoice issued by the suppliers within the time period of FY 2017-18 in context to ITC is to be availed by the recipient till the due date for the purpose of furnishing Form GSTR 3B for the month of March 2019 pertaining to particular conditions.
  8. Documents supported for the claim of refund in the Form GST RFD 01 is required to be uploaded electronically at the time of filing refund application on the portal.
  9. Forms to be made available via FORM GST RFD 01A:
    1. Refund on account of Assessment/Provisional Assessment/Appeal/Any Other Order;
    2. Paid-up tax on an intra-State supply which is particularly held to be inter-State supply and vice-versa;
    3. Excess payment of Tax; and
    4. Any other refund.
  10. In case of applications for refund in FORM GST RFD-01A (except those relating to refund of excess balance in the cash ledger) which are generated on the common portal before the rollout of the functionality described in point (10) above, and which have not been submitted in the jurisdictional tax office within 60 days of the generation of ARN, the claimants shall be sent communications on their registered email ids containing information on where to submit the said refund applications. If the applications are not submitted within 15 days of the date of the email, the said refund applications shall be summarily rejected, and the debited amount, if any, shall be re-credited to the electronic credit ledger of the claimant.
  11. An additional window for completion of the migration process is being allowed. The due date for the taxpayers who had not filed the complete FORM GST REG-26 but have received Provisional ID (PID) only till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July 2017 to February, 2019/quarters July 2017 to December 2018 by such taxpayers shall be extended till 31.03.2019.
  12. The late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, that are furnished after 22.12.2018 but on or before 31.03.2019.
  13. Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating E-Way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.
  14. Clarifications will be issued on various refund related matters like a refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, the time allowed for the availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.
  15. Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 and the corresponding changes in SGST Acts will be notified w.e.f. 01.02.2019.

In addition to the above, The GST council mentioned Centralised Appellate Authority for Advance Ruling (AAAR) formation for the solution of GST litigations across the country.

The council also took the decision to create Group of Ministers (GoM) to look for any possible support from the state finance ministers on the matter of goods and services tax. The GoM will be further supported with the committee of experts from Central Government, State Governments and the NIPFP (National Institute of Public Finance and Planning).

The council also referred some of the issues to the GoM for review including the extension of the composition scheme to the small service providers with the rate of tax and threshold limit under finalization, residential properties taxation under the real estate sector and MSMEs threshold limit review.

Courtesy: https://blog.saginfotech.com

C. RECENT ADVANCE RULINGS UNDER GST

KERALA AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX DEPARTMENT, TAX TOWER KILLIPALAM, KARAMANA P.O.  THIRUVANANTHAPURAM – 695 002

Advance Ruling No. KER/24/2018                   Dated: 6th OCTOBER 2018

Name and address of the applicant:

M/s Rajagiri Healh Care & Education Trust Chunangamvely, Aluva, Ernakulam

The applicant has sought advance ruling in respect of the following questions:

“Whether the medicines, consumables and implants used in the course of providing health care services to patients admitted to the hospital for diagnosis or treatment would be considered as “Composite Supply” of health care services under GST and consequently exemption under Notification No. 12/2017 read with section 8(a) of GST?”

R U L I N G

The supply of medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment are naturally bundled and are provided in conjunction with each other, would be considered as “Composite Supply” and eligible for exemption under the category of health care services.


KERALA AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX DEPARTMENT

TAX TOWER KILLIPALAM, KARAMANA P.O.  THIRUVANANTHAPURAM – 695 002

Advance Ruling No. KER/10/2018            Dated: 26th September 2018

Name and address of the applicant: M/s A.M. Motors, Varangode, Downhill, Malappuram, Kerala

 

The applicant has sought advance ruling in respect of the following question:

“Whether input tax credit on the motor car purchased for demonstration purpose of the customer can be availed as credit on capital goods and set off against output tax payable under GST in the case of a motor care dealer?”

R U L I N G

The demo car is an indispensable tool for promoting sales by providing trail run to customers and to understand the features of the vehicle. The applicant capitalizes the purchase in the books of accounts. The capital goods which are used in the course of furtherance of business is entitled for input tax credit. As the impugned purchase of demo car is in furtherance of business, the applicant is eligible for input tax credit. Furthermore, this activity does not come under the negative clause, as after a limited period of use as a demo car, the vehicles are sold at the written down book value.


WEST BENGAL AUTHORITY FOR ADVANCE RULINGS

14 BELIAGHATA ROAD, KOLKATA – 700015

Advance Ruling No. 20/WBAAR/2018-19            Dated : 2nd November, 2018

 

Name and address of the applicant:  M/s Premier Vigilance & Security Pvt Ltd, 4B Monalisa Building, Orient Row,  Kolkata – 700017

 

The applicant has sought advance ruling in respect of the following question:

“Whether GST is chargeable on the Toll Taxes reimbursed by its clients or the ability to claim it as a deduction under Rule 33 from the value of supply, being expenditure incurred as a pure agent under the CGST/WBGST Acts, 2017?”

R U L I N G

Toll charges paid are not to be excluded from the value of supply under Rule 33. GST shall, therefore, be payable at the applicable rate on the entire value of the supply, including toll charges paid. The Applicant is not acting as a “pure agent‟ of the Bank while paying toll charges, which are the cost of the service provided to the Banks so that his vehicles can access roads/bridges to provide security services to the recipient.

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