I.
HIGH COURT
12. 2019 [21] G.S.T.L. 148 (H.C.) Omax Autos Ltd.
vs. State of Haryana, dated 21st December, 2018
The issue of non-reflection of balance
credit carried forward on filing of Tran-1 in the electronic credit ledger was
brought to the notice of the officers concerned and the IT Redressal Committee
several times, but no response. Directions from the High Court to authorities
concerned to resolve issue within 15 days after verification from GSTIN and
Committee.
FACTS
The petitioner,
registered with the Haryana State GST, filed GST Tran-1 Form so as to carry
forward and claim credit of erstwhile laws. But the electronic credit ledger
reflected ‘Nil’ amounts even on the generation of an ARN and on successful
filing of the transition form. The petitioner represented the issue vide
various emails with screen shots evidencing the same, but no response was
received. Later, the IT Grievance Redressal Forum Mechanism was commenced and a
similar issue as of the petitioner was addressed by the High Court of Punjab
and Haryana {reported on petitioner [2018 (19) GSTL 423 (P&H)]}. In the
said matter the Hon’ble High Court directed the Nodal Officers and the IT
Redressal Committee to consider similar issues faced by other entities, in
light of which the petitioner once again via various letters addressed the
issue to the officers concerned, but still no response was received. Aggrieved
by the same, he filed a writ petition before the Hon’ble High Court seeking
relief.
HELD
The Hon’ble High Court on perusal of the facts of the case directed the
revenue authorities concerned to forward the representations of the petitioner
to the IT Redressal Committee within 15 days after verification by the GSTIN.
The Court further directed the IT Redressal Committee to then decide the issue
in terms of clause 5.4 of the GST Circular dated 03.04.2018, by passing a
speaking order in accordance with the law and after providing opportunity of
hearing within 4 weeks from the date of receipt of the said representation.
13. 2019 (21) GSTL 473 (ALL.) Yadu Sugar Ltd. vs.
Union of India, dated 10th January, 2019
Non-filing of GST Tran-1 application due to
flaw in GSTN, interim direction by the High Court to reopen portal within two
weeks and allow assessee to pay tax.
FACTS
Petitioner could not file its GST Tran-1 due to technical flaws in the
GST portal and the last date for filing the same had passed. Consequently, the
petitioner filed a writ petition seeking relief. However, respondent Revenue
stated that the last date for filing GST Tran-1 application was extended up to
31.03.2019 and the assessee could file the same electronically. The petitioner
then placed before the Hon’ble Court the screen shots of GST Tran-1 application
which assessee wanted to file on 09.01.2019 but could not file as the portal
stated that filing of declaration in Tran-1 was not available as the due date
was over.
HELD
The Hon’ble Court after noting the facts directed the respondent to
reopen the portal within two weeks from the order. If they failed to do so,
they shall entertain the application of the petitioner manually and pass orders
after due verification of credits claimed by the petitioner. Further, the Court
directed to ensure that the petitioner was allowed to pay taxes on regular
basis electronically. The respondent was also directed to file a
counter-affidavit within one month to decide the petition.
14. 2019 (21) GSTL 145 (ALL.) S/S Patel Hardware
vs. Commissioner of State GST, dated 10th December, 2018
The phrase
“communicated to such person” to count the limitation to file first appeal
implies that order be necessarily brought to the knowledge of person who is
likely to be aggrieved. Penalty order passed against assessee was not served to
him, rather to his truck driver. The phrase “communicated to such person” to
count the limitation to file first appeal implies that such order be
necessarily brought to the knowledge of person who is likely to be aggrieved.
Delay condoned.
FACTS
The petitioner purchased certain goods from Haryana Plasts Pvt. Ltd.,
which were consigned by the driver of the truck. However, the goods along with
the truck were seized on 12.02.2018 and the penalty order was served to the
truck driver and not to the petitioner assessee. It was first served to the
petitioner only on 25.05.2018 after which the petitioner filed first appeal
within the period of three months. But it was dismissed being time barred, counting
limitation from 12.05.2018. Aggrieved by the same and in the absence of a
statutory forum of second appeal, the petitioner filed a writ petition before
the Hon’ble High Court.
HELD
The Hon’ble High Court held, on being satisfied from the facts of the
case, that the penalty order was not communicated to the petitioner prior to
25.05.2018. U/s. 107(1) of the CGST Act, the phrase “communicated to such
person” implies that the order be necessarily brought to the knowledge of
the person who is likely to be aggrieved. Whereas in the present case it was
communicated to the driver and not to the petitioner, against whom it was
directed, thus debarring him from his right to appeal. Thus, the Court directed
the Appellate Authority to condone the delay and proceed to decide the appeal.
II.
AUTHORITY FOR ADVANCE RULING (AAR)
15. [2019-TIOL-121-AAR-GST] E Square Leisure Pvt.
Ltd., dated 29th December, 2018
Deposits cannot be treated as being
consideration for supply of any service.
FACTS
The applicant company
rented immovable properties to business entities for commercial purpose. It
paid GST on rent received. It also took interest-free security deposit on
account of security against damages. The question before the Authority is
whether GST is payable on the interest-free security deposit and the notional
interest.
HELD
The Authority noted
that as the interest-free deposit is returned to the lessee, these deposits
cannot be treated as being consideration for supply of any service. In such
case, no GST is payable on these amounts. However, if upon completion of lease
tenure any portion of the amount is retained and not returned on account of
charges against damage, then such amount retained will attract GST.
16. [2019-TIOL-96-AAR-GST] The Bengal Rowing
Club, dated 28th March, 2019
Taxability of services provided by the
club.
FACTS
The applicant, a
company limited by guarantee and registered with the ROC as a non-profit-making
company, is providing its members privileges and amenities of a club such as
swimming facility, gymnasium, indoor games and restaurant service. Advance
ruling is sought on the rate of GST applicable on the services it offers along
with the supply of food, services like valet parking, music, decoration and
other such services associated with organising social gatherings. They also
want to know the admissible proportion of input tax credit for services other
than the supply of food.
HELD
The Authority noted
that supply of food, by way of or as part of any service or in any other manner
whatsoever, from the applicant’s restaurant is classifiable under SAC 9963
which includes accommodation, food and beverage services and taxable under Sl.
No. 7(i) or 7(iii) of the Notification 11/2017-CT (Rate) depending upon the
criteria mentioned therein. If food is supplied by way of or as part of
services associated with organising social events at the club premises,
together with renting of such premises, it will be classifiable under SAC 9963
and taxable under Sl. No. 7(vii) of said notification attracting 18% GST.
All other services
offered by the applicant are classifiable under SAC 9995 which pertains to
services of membership organisations and taxable under Sl. No. 33 of the said
rate notification. The applicant should apply the provisions u/s. 17(2) and (6)
of GST Act, read with Rules 42 and 43 of GST Rules, for reversal of input tax
credit, treating supplies, if any, taxable under Sl. No. 7(i) of said rate
notification, as exempt supplies.
17. 2019
[23] G.S.T.L. 60 (App. A.A.R.-GST) In Re: Ajmer Distribution Limited,
dated 18th October, 2018
Exclusion and inclusion of delayed payment
charges of electricity bill and charges for dishonoured cheque in valuation of
supply.
FACTS
The appellant was engaged in distribution of electrical energy which is
exempt from payment of GST. It collected tariff charges as well as fixed
non-tariff charges categorised as application/connection charges, charges for
equipment such as meters, transformers, etc., charges for extension of supply
lines, cheque dishonour fees and delayed payment charges and raised invoices
for the same.
The advance ruling was to confirm the eligibility of the exemption of
non-tariff charges. However, it was held by the AAR that the non-tariff charges
were ineligible for exemption. Aggrieved by the said ruling, the appellant further to the Appellate
Authority for Advance Ruling against the decision of the impugned order in
respect of “cheque dishonour fees” and “delayed payment charges”.
HELD
The Appellate
Authority held that the “cheque dishonour fees” being consideration “to
tolerate an act or situation, or to do an act” would constitute supply and
appropriate GST shall be leviable thereon. Further, it was held that the
“delayed payment charges” collected by the appellant shall be exempted by
virtue of exemption provided to supply of electrical energy, thus allowing the
appeal of the appellant partially.
18. 2019 [23] G.S.T.L. 133 (A.A.R.- GST) In Re:
Dream Runners Foundation Ltd., dated 22nd January, 2019
Service of organising event of marathon by
charitable trust to raise funds not exempt under GST and the amount collected
as donations is liable to GST.
FACTS
The applicant, a
public charitable trust registered with the Income-tax department, organised a
marathon event to raise funds with the object to donate the same to other
trusts, NGOs, etc. To organise the said event the applicant charged fees from
the participants. Advance ruling under GST was sought to confirm whether the
said event through which donations are raised for charity will be an exempted
service under GST. Further, as the service of the applicant’s trust is
charitable in nature as per Income-tax Act, 1961, whether it automatically
becomes charitable activity, therefore exempted under GST? Will it be liable to
register under GST, when service rendered by it was charitable activity within
the definition of “charitable activities” as per clause 2(r) of Notification
12/2017 Central Tax (Rate) dated 28.06.2017, and lastly whether the donations
received from participants of the marathon are exempted from GST as money is
paid for raising funds for charity?
HELD
The Tamil Nadu
Authority for Advance Ruling held that as the money collected from the
participants was used for the expenses of organising the marathon to pay the
registration partners, event management charges, prize money, publicity, etc.,
therefore it was consideration towards supply of service of organising and
conducting the marathon and constitutes a separate supply of service, and thus
liable to GST. Further, it held that the activities of the applicant’s trust do
not qualify under the definition of “charitable activities” as per clause 2(r)
of Notification 12/2017 ibid and SGST Notification
No.II(2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017, thus it
cannot enjoy the benefit of exemption.
In respect of eligibility
of registration under GST, it was held that as the applicant’s aggregate
turnover in a financial year exceeds Rs. 20 lakh, the applicant is thus liable
to register under GST. Thus, conduct of marathon by them for participants not
held as exempt supply, therefore money collected from the participants for
marathon was eligible under GST.
