GOODS AND SERVICES TAX (GST)

Section 83 of Central Goods and Services Tax Act, 2017 – Since there was a balance of hardly Rs. 22,065 in two bank accounts, there was no good reason to continue the provisional attachment of such accounts

FACTS
The petitioner was engaged in the business of trading in metal scrap. A search, seizure and inspection u/s 67 was conducted at his premises. Further, an order under FORM GST DRC-22 was issued to him under which three of his bank accounts were provisionally attached u/s 83. Of the three, one CC/Current bank account held with AMCO Bank was released by the Hon’ble High Court vide order dated 9th December, 2020. However, the remaining two accounts, i.e., one savings and one current account held with HDFC Bank Limited, were still provisionally attached. The petitioner filed the present petition to lift the attachment over the remaining two accounts.

HELD
Taking a practical view, the High Court held that the accounts shall be provisionally attached only to protect the interest of Revenue. It was found that the amount in these two accounts aggregates to Rs. 22,065 and there was no good purpose the Department achieved by provisionally attaching accounts with such paltry balance. Therefore, the Court lifted the attachment over these two accounts as well. However, the Court clarified that such attachments have to be ordered only when the Commissioner is of the opinion and has reasons to believe in doing the same in the interest of Revenue. Thus, the same shall differ from case-to-case and the order shall be issued after considering the complete facts of the matter.

5 [2021 (45) GSTL 109 (All)] Ansari Construction W.P. No. 626 of 2020 Date of order: 24th November, 2020

FACTS
The petitioner was served with a show cause notice cancelling GST registration on the ground that he failed to file the returns for a continuous period of six months. The petitioner claimed that all the returns were filed; however, despite this the respondent rejected the application for restoration of registration. The respondent stated that the petitioner did not upload any documents online while replying to the query and had simply stated that all the liabilities had been cleared without disclosing the date of filing of the return and that no proper evidence was provided.

HELD
It was held that the order passed was wholly arbitrary and demonstrated the lack of a legally-trained mind as no efforts were made to verify the correctness of the assertions made by the petitioner; the cancellation of registration was revoked and the respondent was directed to pay a cost of Rs. 10,000 to the petitioner.

II. ADVANCE RULING
    
6 [2021-TIOL-60-AAR-GST] M/s VDM Hospitality Pvt. Ltd. Date of order: 21st June, 2020 [AAR-Haryana]

FACTS
The applicant seeks a ruling as to whether the temporary structure that is a hall or pandal or shamiana or any other place built with iron / steel pillars tightened with nuts and bolts and specially created for functions would be treated as movable or immovable property in pursuance of the GST law. The question before the Authority is whether credit of the tax paid on iron / steel pillars tightened with nuts and bolts used for the creation of the temporary structure is admissible u/s 16 of the CGST Act, 2017.

HELD
The Authority noted the decision in the case of Commissioner, Trade Tax vs. Triveni N.L. Limited dated 13th January, 2014 where it has been observed that ‘permanently fastened to anything attached to the earth’ has to be read in context for the reason that nothing can be fastened to the earth permanently so that it can never be removed. If the article cannot be used without fastening or attaching it to the earth and it is ‘not removed under ordinary circumstances’, it may be considered permanently fastened to anything attached to the earth. In the present case, the shamiana and the pandal are built in the company’s own premises which suggests that they are meant for permanent enjoyment. It is not the case of the applicant that it plans to dismantle and move the structure to some other place.

The pictures attached with the application also depict that the civil work has been undertaken on a very large scale at the premises and this also indicates the permanent nature of the construction / erection. Further, the concrete base and the pillars used as platform and support to the structure are also of large dimensions and the platform or the structure cannot be put to beneficial use without the existence of the other. Thus, it is held that the structure is an immovable property and therefore it is not entitled to avail credit of input tax in view of section 17(5)(d) of the CGST Act.

7 [2021-TIOL-67-AAR-GST] M/s KSF-9 Corporate Services Pvt. Ltd. Date of order: 29th January, 2021 [AAR-Karnataka]

FACTS
The applicant entered into an agreement with The Karnataka State Rural Development & Panchayat Raj University, Karnataka State Warehouse Corporation for provision of manpower supply services. The question before the Authority is whether GST @ 18% is leviable only on the service charges or on the total bill amount including the wages?

HELD
The applicant is being paid services charges @ 2%, in addition to the wages. The applicant and the recipients are not related and the price is the sole consideration, therefore in terms of section 15 of the 2017 Act the value of the taxable supply of manpower services shall be the transaction value which is the total bill amount inclusive of actual wages of the manpower supplied and the additional 2% amount paid to the applicant. Thus, GST @ 18% is payable on the entire bill amount.