I. HIGH
COURT
30. [(2020) 117 TMI 209] Om
Sai Traders vs. State Tax Officer, R/Special Civil Application No. 7395 of
2020; (Gujarat High Court) Date
of order: 15th June, 2020
Article
226, sections 129 and 130– No interference of High Court warranted to order on
validity of show cause notice and authority to adjudicate the notice in
accordance with law
FACTS
The
applicant was engaged in the business of trading of various goods, especially
tobacco, and had purchased unmanufactured tobacco from the supplier. While
transporting the goods, the original vehicle broke down four to five km. from
the destination. Another vehicle was arranged and the goods were transported to
the destination. However, just before the said vehicle could reach there, it
was intercepted by the authorities and the goods were seized. Thereafter, an
undated show cause notice u/s 130 of the CGST Act, 2017 was also issued.
Aggrieved
by this act, the applicant challenged it by way of a writ petition before the
Gujarat High Court; he claimed that the act of the authorities in detaining the
goods u/s 129 of the CGST Act, 2017 was wrongful and that the issuance of an
undated show cause notice was wholly illegal, erroneous and without authority
of law.
HELD
The Hon’ble High Court held and agreed to not interfere
with the impugned show cause notice issued by the authority u/s 130 on merits
and permitted the authority to adjudicate the said notice in accordance with
the law. Further, the Court directed the authority to release the goods upon
deposit of an amount of Rs. 10,00,000 and furnishing of a bank guarantee of Rs.
7,00,000 by the applicant.
31. [(2020) 117 taxmann.com 195] Amba
Industrial Corporation vs. UOI
CWP No. 8213 of 2020 (O&M); (Punjab &
Haryana) Date
of order: 18th June, 2020
Section
140 read with Rule 117 – Technical difficulties cannot be restricted only to
difficulties faced by or on the part of the Department but would also include
any such technical difficulty faced by the assessee as well
FACTS
The
petitioner is engaged in the business of S.S. flats. They were to carry forward
the unutilised
CENVAT Credit in terms of section 140 of CGST Act read with Rule 117. However,
they failed to upload TRAN-1 by the last date, i.e. 27th December,
2017. The respondent extended the date of uploading TRAN-1 till 30th
June, 2020, but only for those who could not submit the declaration by the due
date on account of technical difficulties, thereby denying the petitioner the
opportunity to file their TRAN-1. The petitioner challenged Rule 117(1A) as
being ultra vires and sought direction to be given to the respondent to
permit the petitioner to upload TRAN-1 form or avail Input Tax Credit (ITC) in
monthly return GSTR3B.
HELD
The
Hon’ble High Court relied upon the decision of Adfert Technologies (P)
Ltd. vs. UOI [2019] 111 taxmann.com 27 and the Delhi High Court in Brand
Equity Treaties vs. Union of India 2020-TIOL-900-HC-Del-GST. The Court
found that the technical difficulties cannot be restricted only to difficulties
faced by or on the part of the respondent but would also include any such
technical difficulty faced by the taxpayer as well. However, the petitioner had
challenged the vires of Rule 117(1A); but the Court did not find it appropriate
to interfere as the petitioner was entitled to carry forward CENVAT Credit
accrued under the Central Excise Act, 1944.
But
the repeated extensions of the last date of filing TRAN-1 vindicated the
petitioner’s claim that denial of credit to those dealers who were unable to
furnish evidence of an attempt to upload TRAN-1 would amount to violation of
Article 14 as well as Article 300A of the Constitution of India. Therefore, the
respondents were directed to permit the petitioner to upload TRAN-1 on or
before 30th June, 2020 and in case the petitioner failed to do so,
the petitioner was given liberty to avail ITC in GSTR3B of July, 2020.
32. [2020 (5) TMI 602] [(2020)117
taxmann.com 94 (Del.)] SKH
Sheet Metals Components vs. UOI W.P.(C)
No. 13151 of 2019 Date of order: 16th June, 2020
Article
226, article 14, section 140 read with Rule 117 – On account of a bona fide
or inadvertent mistake, assessee permitted to revise TRAN-1 form and transition
entire Input Tax Credit (ITC)
FACTS
The
petitioner had sought for transition of ITC that had accrued and vested in its
favour under the erstwhile regime by filing the statutory form GST TRAN-I.
However, on submission of the said form, the petitioner realised that CENVAT
credit of Rs. 5,51,33,699 comprising of Central Excise and service tax of Rs.
3,86,54,605 and Rs. 1,64,79,082, respectively, were not displayed in the
electronic credit ledger (ECL). On a suggestion given by the respondents, the
appellant filed a revised declaration in form GST TRAN-1 on 27th
December, 2017 and it reflected the correct figures. However, the amount was
still not transferred to the ECL and was shown as blocked credit.
Thereafter,
the petitioner made various representations towards availing the benefit of the
Circular which granted relief to taxpayers who had faced IT glitches at the
stage of filing an original or revised return on the GSTN portal to resolve the
issue. But no proper response was received from the respondent’s office. The
petitioner, therefore, filed a writ petition (No. 712/2018) before the Bombay
High Court. The Court disposed of the petition with a direction to the
petitioner to file a representation before the authorities concerned in terms
of the 32nd Council Meeting.
Accordingly,
the petitioner filed yet another representation before the respondents, but the
case was rejected without assigning any reasons. The petitioners thereafter
requested the respondents to provide them with reasons for denial; again, no
response was received. Thereafter, the petitioner filed an RTI application
requesting to know the reasons for the rejection, but even this request was
turned down.
Thus,
the present petition was filed against this act of the respondents in denying
the petitioner’s vested right of transitional credit without any basis. Writ of
mandamus was sought for issuance of direction to the respondents to allow the
petitioner to avail the short transitioning of ITC amounting to Rs. 5,51,33,699
based on Brand Equities Treaties Ltd. vs. Union of India (2020) 116
taxmann.com 415 (Delhi) and Micromax Informatics Ltd. vs. Union
of India [WP(C) No. 196/2019] thereby also bringing to the attention of
the Hon’ble High Court that form GST TRAN-1 was filed before the specified
date.
The
respondents in their counter affidavit denied the applicability of benefit to
the petitioner as per the case of Brand Equities Treaties Ltd. (Supra)
and stated that the petitioner fell into the category of ‘the taxpayer has
successfully filed TRAN-1, but no technical error has been found’ and that
since the petitioner did not encounter any technical glitch on the portal, his
request to file revised TRAN-1 was not accepted and that the discrepancy in ECL
is because of human error. The benefit of the Circular was not extended to the
petitioner.
HELD
The
Hon’ble High Court discarded the submission made by the respondent that the
benefit of the judgment of Brand Equity (Supra) is no longer
available and held that the said decision is not entirely resting on the fact
that the statute (the CGST Act, 2017) did not prescribe for any time limit for
availing the transition of the ITC and that there are several other grounds and
reasons enumerated in the said decision that continue to apply with full rigour
regardless of the amendment to section 140 of the CGST Act, 2017. Based on the
above, the petitioner was permitted to revise the TRAN-1 form on or before 30th
June, 2020 and transition the entire ITC; the respondents were directed to file
revised declaration TRAN-1 electronically or to accept the same manually and
thereafter process the claims in accordance with the law.
II. AUTHORITY FOR ADVANCE RULING
33. [2020-TIOL-166-AAR-GST] Apsara
Co-operative Housing Society Limited Date
of order: 17th March, 2020
Society
is making a supply to its members in terms of the GST law and therefore the
contributions received from the members are leviable to GST
FACTS
The
applicant is a co-operative housing society formed by its members. They raise
funds by collecting contributions from the members. The contributions include
property tax, common electricity charges, water charges, contribution to
repairs and maintenance, etc. The question before the Authority is whether the
said activity of collection of contributions qualifies as a supply u/s 7(1) of
the Central Goods and Services Tax Act, 2017.
HELD
The
Authority primarily noted that the activities of managing, maintaining and
administering the property of the society, raising funds for achieving the
objects of the society, undertaking and providing any social, cultural or
recreation activities can clearly be considered as rendering of supply of
service provided to the members. Further, it was noted that the definition of
‘person’ provided in section 2(84)(i) specifically includes ‘a co-operative
society’. Therefore, the members and the society are distinct persons and thus
the transaction is a supply leviable to GST.
Note: In this context readers
may refer to the decisions of the Maharashtra AAAR in the case of Rotary
Club of Mumbai Queens Necklace [2020-TIOL-09-AAAR-GST] and
[2019-TIOL-72-AAAR-GST] wherein it is held that membership fees
received cannot be considered as a consideration received in the course or
furtherance of business and therefore is not liable for GST.
34.
[2020-TIOL-172-AAR-GST] High Tech Refrigeration and Air Conditioning Industries
Date
of order: 25th June, 2020
Goods supplied in the State on behalf of the client
situated outside the State is an interstate supply leviable to IGST
FACTS
The
question before the Authority is whether fixing of air conditioner and VRV
system in Goa on behalf of a client registered outside Goa is an intra-state supply leviable to CGST and
SGST or an interstate supply leviable to IGST.
HELD
Since
the location of the supplier is Goa but goods are supplied on behalf of a
registered person outside Goa to a place in Goa, the place of supply would be
outside Goa as per section 10(1)(b) of the Integrated Goods and Services Tax
Act, 2017. Thus the nature of supply is to be treated as a supply of goods in
the course of interstate trade or commerce and IGST is payable.
35.
[2020-TIOL-144-AAR-GST] M/s Amba Township Pvt. Ltd. Date of order: 19th May, 2020
Though the Sector is separately under the RERA Act, 2016
as a separate project, the same cannot be considered as a standalone housing
project since it shares common land, common facilities and common entrance
FACTS
The
applicant is engaged in construction of residential and commercial premises on
works contract basis. They are engaged in construction and development of a
township in a phased manner. At present, Sector-4 of the township is being
constructed which is divided into two parts – Part A and Part B. The Sector is
registered under the RERA Act, 2016 as three independent projects / phases.
Part-B of Sector-4 is a separate project in itself and also separately
registered under the RERA Act, 2016 as a ‘Real Estate Project’. ‘Part-B’ is
independent of the other projects within its Phase and Township and has its
separate facilities like parking, foyer, electricity connection, water supply,
etc. The said part is used for affordable housing and thus the question before
the Authority is whether the reduced rate of tax provided in Notification No.
11/2017-Central Tax (Rate) Entry Number 3(v)(da) is applicable.
HELD
The
Authority noted that Part-B of Sector-4 of the township cannot be considered as
a standalone housing project since it shares common land, common facilities and
common entrance with Part-A of Sector-4 of the township and since 50% of
FAR/FSI of the entire housing project of Sector-4 comprising of Part-A and
Part-B has not been used for construction of dwelling units with carpet area of
not more than 60 square metres, the said housing project cannot be considered
as an ‘affordable housing project’. Therefore, the applicant is not eligible
for the benefit of reduced rate as provided under Entry Number 3(v)(da) of the
Notification No. 11/2017-Central Tax (Rate) as amended by Notification No.
01/2018-Central Tax (Rate) dated 25th January, 2018 available for
houses constructed with a carpet area of 60 square metres per house.
36.
[2020-TIOL-156-AAR-GST] M/s Liberty Translines Date of order: 5th March, 2020
For a single transaction and same movement of goods,
there cannot be multiple consignment notes. The entire risk of transportation
is with the person who has entered into a contract with the client and
therefore merely providing vehicles does not qualify as Goods Transport Agency
service
FACTS
The
applicant, owner of various goods transport vehicles, is in the business of
road transportation and registered as a Goods Transport Agency. A company named
POSCO has sub-contracted a specific assignment of transportation service to the
applicant. The applicant proposes to issue a consignment note to POSCO who in
turn will issue a second consignment note to the final client for the same
transportation of goods by road for the very consignment by the same vehicle.
The question before the Authority is whether the applicant can issue a
consignment note and charge GST @ 12% under forward charge.
HELD
The
Authority primarily noted that the contract is to undertake transportation of
goods given by the consignee / consignor to POSCO and not to the applicant. The
consignor / consignee may not be aware that the actual transportation is
undertaken by someone else. The role of the applicant is to just provide the
vehicle as and when called for. Thus the transaction is more in the nature of
hiring of vehicles and not that of Goods Transport Operator. Accordingly, it is
held that the applicant is providing the transportation service but not as GTA
but only as a truck owner. For a single transaction and the same movement of
goods, there cannot be multiple consignment notes. Thus, the applicant cannot
charge GST @ 12% since it is not a Goods Transport Agency.
37.
[(2020) 5
TMI 580] M/s Sai Motors KAR ADRG 32/2020; (AAR, Karnataka) Date of order: 20th May, 2020
Notification No. 01/2017-Central Tax (Rate) dated 28th
June, 2017 – The retrofitted vehicle merits classification under heading
87112019 and hence attracts GST @ 28% and also eligible for Input Tax Credit if
used for further supply of such vehicles
FACTS
The
applicant is in the business of supplying two-wheelers. It purchases vehicles
from M/s Hero Motocorp Ltd. under HSN 87112019 liable to GST at 28%. The
retro-fitment fittings under HSN 87131090 liable to GST at 5% are fixed to the
vehicles purchased and sold to the disabled persons. Currently, the applicant
charges two rates on such supplies, i.e. at 28% and 5% for the vehicles and the
retro-fitment, respectively. The applicant had sought advance ruling seeking
clarification for the classification of such supply under HSN 87131090 liable
at GST 5% and whether ITC in respect of vehicles purchased from M/s Hero
Motocorp Ltd. will be eligible to him.
HELD
The
AAR relied upon the Notification No. 01/2017-Central Tax (Rate) dated 28th
June, 2017 and held that the supply of retrofitted vehicles by the applicant
falls under the HSN 87131090 and hence he shall charge 5% GST to his customers.
In respect of eligibility of ITC on purchase of vehicles, the AAR held that ITC
in respect of such purchases shall be eligible to the applicant since the said
purchases are in the furtherance of supply of vehicles as prescribed in the
exceptions to blocked credit stated in 17(5)(a).
38.
[(2020) 5
TMI 604] M/s Dolphine Die Cast (P) Ltd. KAR ADRG 35/2020; (AAR, Karnataka) Date of order: 20th May, 2020
Sections 2(5), 8, 10 of IGST Act, 2017 – Place of supply
in case of export / import transactions without movement of goods shall be
location of the goods at the time of delivery to the recipient
FACTS
The
applicant is engaged in the business of manufacturing and export of aluminium
and zinc die castings. It first manufactures the die, retains it and uses it
for the manufacture and supply of aluminium and zinc die castings for which it
raises an invoice in the name of the overseas customer in foreign currency,
although it does not physically export it. Similarly, the applicant is involved
in the import of aluminium casting and pressure die casting components wherein
the Thailand supplier raises the tax invoice though the die is not physically
imported by the applicant. Therefore, an advance ruling has been sought by the
applicant in respect of taxability of the transactions and the procedure to be
followed for discharging GST liability.
HELD
After
discussing the provisions of place of supply under the IGST Act, 2017 and of
the time of supply under the CGST Act, 2017 along with the definitions of
import and export, the AAR was of the view that the applicant’s transaction
with its overseas customer shall not be counted as export because it does not
fulfil the conditions prescribed for export as the place of supply is in India
due to non-movement of goods, and hence the applicant shall charge applicable
CGST / SGST on its invoice because the said transaction amounts to intra-state
supply. In respect of the transaction relating to import by the applicant, the
AAR held that until the said goods are not brought to India it shall not be
construed as import and in case the applicant instructs the vendor to scrap it outside
India, then such a transaction is not liable to GST as ‘out and out sales’ are
out of the purview of GST.
