I. HIGH COURT
21. [2019] (29) GSTL 5 (Ker.) Hyundai Construction Equipment India Pvt.
Ltd. vs. State Tax Officer, Kasargod Date of order: 9th August, 2019
Bank guarantee cannot be encashed before expiry of the
time period to file the appeal is over
FACTS
A
writ petition was filed by the petitioner on the grounds that the respondent
had invoked extraordinary jurisdiction by not accounting for the submissions
and explanation in the records and by ordering encashment of the bank guarantee
before the period for filing the appeal expired.
HELD
The
Hon’ble Court perused the facts of the case and held that the respondent should
have recorded the explanations offered under any given circumstances, even in
case of any delay. Further, that the invocation of bank guarantee even before
the expiry of period of appeal can be deferred by passing appropriate orders,
and thus directed the respondent to not encash the bank guarantee for a period
of 90 days.
22. [2019]
(29) GSTL 29 (Mad.) Assistant Commr. of CGST & C. Ex. vs.
Daejung Moparts Pvt. Ltd. Date of order: 23rd July, 2019
Interest on delayed payment of tax to be calculated on
net tax payable by cash only
FACTS
A
writ petition was filed by the petitioner because the AO calculated interest
amount on gross output tax liability without considering the balance in the
electronic credit ledger and the bank account was sealed for the amount
calculated by the AO. The petition was allowed by the learned Single Judge
observing that the AO was bound to hear the aforesaid objections of the
assessee in determining the correct liability of interest. Further, the Judge
directed the bank to deposit the admitted liability for interest u/s 50 of the
Act to the extent calculated by the assessee. Revenue filed an intra-court
appeal against the judgment passed by the Single Judge.
HELD
The
Hon’ble Chief Justice held that the judgment passed by the Single Judge was
correct. The liability of interest arises on net tax liability and the bank
account was operative with the exception of aforementioned admitted sum which
shall be paid by the bank to the Assistant Commissioner of CGST and Central
Excise.
23. [2019] (29) GSTL 6 (Bom.) Ashish Jain vs. Union of India Date of order: 13th July, 2019
Offences like issue of fake invoices without supplying
goods and fraudulent availment of input tax credit are cognisable and
non-bailable as per section 132(5) of CGST Act
FACTS
In
the given case, the assessee fraudulently availed input tax credit by issuing
fake invoices to fictitious companies without supplying any goods. For this the
Department issued summons under the CGST Act, 2017. The petitioner contended
that investigation cannot be commenced without following the procedure of
section 154 or 155 of the Criminal Code, i.e., the authority first has to
register an FIR and then investigate the case.
HELD
The
Hon’ble High Court relied on the decision of the Union of India vs. Sapna
Jain (Supreme Court) wherein it was held that the Apex Court had
refused to entertain the special leave petition. In the present case, the order
of the Apex Court in the case of Sapna Jain (Supra) was
considered final and thus did not grant any relaxation to the assessee from the
arrest warrant.
24. [2019-TIOL-3411-CESTAT-CHD.] M/s Fresenius KabiOnclogy Ltd. vs. Commissioner, CGST Date of order: 6th November, 2019
Subsequent reversal of credit in TRAN-1 is sufficient
compliance of refund claimed under Notification No. 27/2012-ST which requires
reversal of service tax claimed as refund
FACTS
The
appellant availed input services for export of goods. It filed a refund claim
under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-ST
dated 18th June, 2012. As per the condition of the notification, the
CENVAT credit availed on the services is required to be reversed. It is alleged
that since the credit availed on the services is not reversed, the refund is
liable for rejection. Both the authorities below have rejected the claim and
therefore the present appeal is filed.
HELD
The
Tribunal, relying on the decision in the case of Global Analytics India
Pvt. Ltd – Final Order No. 40942-40943/2019 dated 22nd July, 2010
holding that there was no provision in the ACES system to debit the value of
refund and also the fact that the entire credit which was carried forward in
TRAN-1 stood reversed by the appellant voluntarily in its GSTR3B filed for the
month of April, 2018, is sufficient compliance of the condition of the
Notification. The refund is accordingly allowed.
II. AUTHORITY FOR ADVANCE RULING
[AAR]
25. [2019]
(29) GSTL 778 (AAR – Mah.) Jotun India Pvt. Ltd. Date of order: 4th October, 2019
Recovery of insurance premium from the employees is not
an activity in the course or furtherance of business as applicant was not
involved in business of insurance
FACTS
The
applicant, a manufacturer, supplier and exporter of paints and powder coating,
introduced an optional parental insurance scheme for employees’ parents. It
initially paid the entire premium and then recovered 50% of the premium from
their salary in instalments. The scheme was not the business of the applicant.
The insurance was taken with the Oriental Insurance Company Ltd. Besides,
providing parental insurance cover was not mandatory under any law.
Non-provision of parental insurance would not affect the business of the
applicant by any means.
HELD
The
term ‘supply’ u/s 7 and ‘business’ u/s 2(17) of the CGST Act, 2017 were
referred for analysing the activity of the applicant and it was found that
provision of mediclaim policy for the employees’ parents was not mandatory
under any law. Non-provision of parental insurance would not affect the
business of applicant by any means. ARA of ‘Posco India Pune Processing
Center Private Limited-AAR 2019 (21) G.S.T.L. 351’ was confirmed
wherein it was held that ‘they are not rendering any service of health insurance
to its employees, hence there is no supply of service in instant case’. Thus,
the activity of recovery of 50% of cost of insurance premium was not treated as
an activity done in the course or furtherance of business.
26. [2019-TIOL-493-AAR-GST] Ex-Servicemen’s Resettlement Society Date of order: 29th November, 2019
GST is payable on the bonus paid by the recipient of the
service to provider of service as the persons deployed are not the employees of
the service receiver
FACTS
The
applicant is a registered society providing security services and scavenging
services to various hospitals under the State Government. They seek a ruling as
to whether they are liable to pay GST on the portion of the payment received on
account of the bonus paid or payable to the persons it deploys as security
personnel.
HELD
The
Authority noted that the security personnel engaged are at no point of time
employees of the State Government. The assessee is an employer of the security
personnel deployed and is responsible for paying all statutory dues and payment
of bonus at the Government approved rate. Since the agreement does not create a
master and servant relationship between the recipient of service and the
security personnel, payment received from recipient on account of bonus is not
guided by paragraph 1 of Schedule III. The applicant is, therefore, liable to
pay GST on the portion of the payment received on account of bonus paid or
payable to the persons it deploys as security personnel.
27. [2019-TIOL-448-AAR-GST] M/s Santosh Distributors Date of order: 16th September,
2019
Since prices are determined by the principal company, the
discounts reimbursed are liable to be added to the value of supply. Further,
input credit is not required to be reversed for commercial credit notes
received
FACTS
The
applicant is paying the tax due as per the invoice value issued and availing
the input credit of GST shown in the inward invoice received from the principal
company or their stockist. The question before the Authority is whether
additional discount provided by the principal company attracts GST and whether
the amount shown in the commercial credit note requires any proportionate
reversal of credit.
HELD
The
Authority noted that the price of the products supplied is determined by the
supplier / principal company and they have no control over the same. Therefore,
it is evident that the additional discount given by the supplier which is
reimbursed to the applicant is a special reduced price and such additional
discount is liable to be added to the consideration payable by the customer to
the distributor / applicant to arrive at the value of supply in terms of
section 15 of the Act. Further, the supplier of goods / principal company
issuing the commercial credit note is not eligible to reduce its original tax
liability and hence applicant will not be liable to reverse the input tax
credit.
III. APPELLATE AUTHORITY FOR ADVANCE RULING [AAAR]
28. [2019 (29) GSTL 773 (App. AAR – GST)] Malli Ramalingam Mothilal Date of order: 7th August, 2019
Payment of shortfall of statutory fees for filing appeal
before appellate authority sufficient cause for condoning the delay
FACTS
The
appellant filed an appeal before the Appellate Advance Ruling Authority along
with fees of Rs. 5,000 each under CGST and SGST instead of Rs. 10,000 each
under CGST & SGST. Subsequently, the appellant paid additional amount of
Rs. 5,000 each under CGST and SGST.
HELD
The
Appellate Authority accepted the appeal holding that deficiency was made good
within the further period of 30 days as provided in the law. Therefore, the
lacuna was condonable.
