I. HIGH COURT
23 Hindustan Unilever Ltd. vs. UOI [2021 (49) GSTL 292 (Mad)] Date of order: 12th July, 2021
Petitioner cannot be denied relief merely due to technological limitations of ICES system (Customs Portal)
FACTS
The petitioner had filed 87 bills of entry before the Chennai Customs Authority for import of raw materials required for the manufacture of various toiletries / fast-moving goods. With the advent of GST, in order to facilitate the seamless flow of input tax credit (ITC) of IGST, the GSTIN was required on the bill of entry. At the time of filing the bills of entry, instead of quoting the GSTIN of Tamil Nadu, the petitioner had inadvertently quoted the GSTIN of Maharashtra, Puducherry and Karnataka. Therefore, to avoid the challenge of ITC availment of IGST and to rectify the aforesaid inadvertent errors, the petitioner had filed an application for the amendment of bills of entry u/s 149 of the Customs Act, 1961. In reply to the application, an order was passed by the Customs Authority stating that the ICES system (Customs Portal) is designed in such a way that once the data is transmitted to the GSTN portal, the details of GSTIN cannot be amended. Being aggrieved by this order, the writ petition was filed.
HELD
It was held that the petitioner cannot be denied benefit merely because of the technological limitations of the ICES system. Proper measures must be taken to resolve such technological limitations and the amendments of documents must be considered manually till such technological limitations are resolved.
24 BA Continuum India Pvt. Ltd. vs. UOI [2021 (49) GSTL 370 (Bom)] Date of order: 8th March, 2021
The opportunity of being heard cannot be substituted by telephonic conversations or email exchanges
FACTS
The petitioner was engaged in the business of providing IT and IT-enabled services to various customers located outside India. It had filed five refund applications for claiming refund of the unutilised balance of ITC on account of export of services without payment of tax. As a sequel to the aforesaid refund applications, five identical show cause notices were issued, alleging that the petitioner was facilitating the supply of services between two persons and such services are classifiable as ‘intermediary services’ whose place of supply falls in India. Therefore, the services cannot be considered as export of services. Thus, the refund was liable to be rejected. Due to technical glitches on the GST portal, initially, they (the petitioners) were unable to reply to the notice. The replies were filed through various emails and subsequently uploaded over the GST portal as well.
In the meanwhile, the respondent had called for certain documents. However, due to the pandemic, it was not possible to submit such documents and the petitioner had sought additional time via email. Subsequently, through an email dated 21st April, 2020, the respondent instructed that if documents are not submitted within three days, the matter would be decided ex parte. It also referred to MVAT Circular 3T of 2020 dated 17th March, 2020 which stated that the email reply would be treated as personal hearing. The petitioner made a detailed submission via email and requested a personal hearing before the passing of any adverse order. However, without granting any personal hearing, five identical orders were passed rejecting the refund applications of the petitioner. The petitioner then filed the present writ petition.
HELD
The High Court held that Rule 92 of the CGST Rules, 2017 specifically mandate to grant an opportunity of being heard before rejecting a refund application. Such opportunity of being heard cannot be substituted with mere email exchanges and telephonic conversations. Further, Circular 3T of 2020 dated 17th March, 2020 was issued in the context of MVAT assessment and it cannot be relied upon to dispense with the hearing procedure while rejecting the refund application.
25 Vidyut Majdoor Kalyan vs. State of Uttar Pradesh [2021 (49) GSTL 230 (All)] Date of order: 18th January, 2021
Section 30 of CGST Act, 2017 and Rule 23 of CGST, Rules 2017 – Non-compliance of an order passed by a competent Appellate Authority is neither permitted nor accepted merely because there was no facility on GST portal to restore the GST registration
FACTS
The petitioner had failed to file the monthly returns (GSTR3B) from October, 2017 to June, 2018. Therefore, a show cause notice was uploaded on the GST portal seeking cancellation of its GST registration because of failure to file returns for more than six months. The petitioner was granted seven days’ time to reply to the show cause notice. However, it failed to reply to the same. As a consequence, an order for cancellation of GST registration was passed. Being aggrieved by this order, an appeal was preferred before the Appellate Authority and a favourable order was received directing the respondent to restore the GST registration.
Even after this order, the implementation of restoration of registration was not done on the GST portal. Nothing was brought on record to show that the order passed was illegal or without jurisdiction. The only contention of the respondent for non-compliance of the Appellate Authority’s order was that there was no facility to manually restore a GST registration that was already cancelled. Hence, the present writ petition was filed.
HELD
The High Court held that non-compliance of an order passed by the Appellate Authority cannot be accepted or permitted merely because there was no facility on the GST portal for restoration of a registration that was already cancelled. The Court allowed the writ petition and directed the respondent to restore the registration forthwith.
II. AUTHORITY FOR ADVANCE RULING
26 M/s EVM Motors and Vehicles India Pvt. Ltd. [2021-TIOL-163-AAR-GST] Date of order: 25th May, 2021 (AAR-Kerala)
The transportation of passengers in a house-boat with all the facilities of accommodation and meals is covered under Chapter Heading 996415 liable for GST at 18% – Input tax credit on expenses incurred on refurbishing, maintenance and food is fully allowable
FACTS
The applicant has started a new venture and has acquired house-boats. These are to be used for cruises, both overnight and for day trips. Meals are to be provided as part of the package along with alcohol. The boats are to be furnished with state-of-the-art bedrooms, dining rooms, halls and kitchens. The fare proposed to be charged is an all-inclusive rate for transportation, accommodation, food services and other incidental services. The applicant seeks a ruling on whether the service rendered is covered under Chapter 99, Heading 9964 and Service Code 996415 and whether it is entitled to claim ITC.
HELD
The Authority noted that Heading 9964 pertains to passenger transport services and 996415 pertains to local water transport services of passengers by ferries, cruises and the like. The Explanatory Notes to the Heading 996415 state that the service code includes inland water cruises that include transportation, accommodation, food and other incidental services in an all-inclusive fare. The services rendered squarely fall under the Heading 996415 in view of the Explanatory note, liable to GST at the rate of 18%. The applicant is eligible for ITC in respect of the expenses incurred by it on refurbishing, furnishing, maintaining and repairing the vessel as the supplies are used for providing the taxable outward supply of passenger transport services specified in the exclusion clause in section 17(5)(aa)(i)(B) of the CGST Act. It is also eligible for ITC on the supply of food during the cruise as the supply is an element of the outward taxable supply of passenger transport services and hence covered by the proviso to section 17(5)(b)(i) of the CGST Act.
27 M/s Bindu Projects and Company [2021-TIOL-190-AAR-GST] Date of order: 30th July, 2021 (AAR-Bangalore)
GST rate for repairs and maintenance of residential complex for railway employees is taxable at 12% – Other repair activity for railways will attract GST rate of 18%
FACTS
The applicant has sought a ruling on the applicability of GST rates for works contract services for doing original works with South Western Railways. It submitted that as per the Notification No. 11/2017-Central Tax (Rate) – Serial No. 3(v), the GST rate applicable is 12% if ‘composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 is supplied by way of construction, erection, commissioning of original works pertaining to Railways (including monorail and metro)’. Also, as per the definition of original works provided in clause (zs) of para 2 of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, it is submitted that they are engaged in provision of original works contract services.
HELD
The Authority noted that original works means all new constructions and additions or alterations to abandoned or damaged structures. The Railways is a Central Government Department and hence it is clear that the service provided to them if it is for a purpose other than for business, then the same would be covered under Entry 3(vi) of Notification 11/2017-Central Tax (Rate). However, since the Railways is undertaking the transportation services of goods and passengers, the services provided cannot be considered as for purposes other than business and thus cannot be covered under Entry 3(vi)(a). However, the services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees are covered under Entry 3(vi) of the Notification and hence eligible for tax of 12%. Thus, new constructions will be charged at a GST rate of 12%; similarly, repairs, maintenance, renovation and alteration of residential complex will attract a GST rate of 12%, and other repair works of old constructions will be taxable at the rate of 18%.
