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Case-Laws – GST – Highlights – Petitioner challenged ex-parte order demanding tax liability of Rs. 38,361/- including penalty and interest for wrongful availment of input tax credit on fake invoices. Court found no infirmity in impugned order passed after providing opportunity to petitioner. Petitioner has efficacious appeal remedy u/s 107, without exhausting which writ petition is not maintainable. Writ petition dismissed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Dispute concerning value of supply of services by petitioner company to state government, rate of tax applicable, and components included in calculating percentage of goods value in composite supply under Notification 2/2018-Central Tax (Rate). Court granted interim protection to petitioner, allowing response to show cause within 30 days, considering prima facie case and advance ruling. Petition disposed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – This is a case regarding the applicability of GST exemption under Entry 3B of Notification No. 13/2017-CT (Rate) dated 28.06.2017 for services provided by the applicant to a local authority. The key points are: The applicant is engaged in providing 'works contract services' involving supply of goods along with services for an immovable property to Kotputli Municipal Council, a local authority. Entry 3B extends to pure services or composite supplies where the value of goods does not exceed 25%. However, Entries 3 and 3A specifically cover services provided to local authorities. Since the applicant is providing services to a local authority, Entries 3 and 3A are applicable, and there is no need to consider Entry 3B. Therefore, the exemption under Entry 3B is not applicable to the applicant for the services provided to the Kotputli Municipal Council. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Bank attachment order set aside due to lack of opportunity for personal hearing, violating natural justice principles. Order remanded for fresh consideration after petitioner pays 10% of disputed tax within 4 weeks. Petition allowed on remand. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Assessment order quashed due to violation of principles of natural justice. Petitioner not notified of defect in availing Input Tax Credit. Impugned order unsustainable. Case remitted to pass fresh order on merits after issuing show cause notice within 45 days. Petition allowed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Registration cancellation under WB GST/CGST Act due to non-filing of returns. Appeal rejected as time-barred u/s 107(4). Court observed petitioner's case did not involve tax evasion or dubious activities. Suspension/revocation would be counterproductive, impacting revenue recovery as petitioner cannot raise invoices or carry on business. Respondents directed to take pragmatic view, allow petitioner to operate business subject to filing pending returns and paying requisite tax, interest, penalty. Order cancelling petitioner's registration set aside on condition of clearing arrears. Petition disposed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – This case pertains to the liability of an appellant to pay Goods and Services Tax (GST) on a reverse charge basis for two specific services: supply of services by the Managing Director through personal guarantees on loans obtained by the company, and supply of services by extending loans from the petitioner-company to its subsidiary. The High Court held that Circular No. 204/16/2023-GST and Circular No. 218/12/2024-GST issued by the Central Board are binding on the authorities. The respondent department's counsel did not dispute the applicability of these circulars to the issues raised. Consequently, the High Court allowed the writ petition and quashed the impugned show cause notice. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Goods and Services Tax – GST Dated:- 18-10-2024 – News – 1. In order to assist taxpayers in filing their returns and minimizing human errors, GSTN has continuously improving the GST return filing process and in this endeavor the GST Portal now provides a pre-filled GSTR-3B form, where the tax liability is auto-populated from the declared supplies in GSTR-1 / GSTR-1A / IFF by the supplier, while the Input Tax Credit (ITC) is auto-populated from GSTR-2B . A detailed system generated pdf of the auto populated GSTR-3B is also provided to all the taxpayers. 2. Now, taxpayers also have a facility to amend their incorrectly declared outward supplies in GSTR-1 /IFF through GSTR-1A, allowing them an opportunity to correct their liabilities before

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Goods and Services Tax – GST Dated:- 18-10-2024 – News – Additional FAQs on IMS Dated:- 18-10-2024 – Invoice Management System (IMS) is now available to taxpayers. This new system shall facilitate taxpayers in matching their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). Taxpayers can now make use of this facility to seamlessly accept, reject, or keep invoices pending in the system to avail later as and when required. The first GSTR-2B on the basis of actions taken in IMS would be generated for the return period Oct 24 on 14th November, 2024. For some additional frequently asked questions (FAQs) on IMS to get a better understanding of the new functionality. Thanking You, Team GSTN Additional FAQ on IMS 1 Which invoices are visible on IMS dashboard since 14th Oct 2024? IMS is launched from GSTR-2B return period of Oct 24. Hence, all the records eligible for GSTR-2B of Oct 24 return period onwards will be made available on the IMS

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d presently. 5 When should an invoice/debit note be rejected? Rejection of an invoice/debit note should be done very carefully as rejection will result in no ITC for the recipient. A record may be rejected if it does not pertain to the recipient, or the detail of the record is erroneous to such an extent that CN and DN cannot handle the situation. 6 In light of the time limit to avail ITC being till 30th November for FY 2023-24 or furnishing of annual return whichever is earlier, how can the ITC of erroneously rejected invoice in IMS, be taken by the recipient in the FY 2023-24? In case the recipient taxpayer erroneously rejects an invoice in IMS, then the same invoice can be accepted in IMS again before filing of GSTR 3B . After accepting the said invoice, the recipient taxpayer should recompute the updated GSTR-2B for availing the credit in GSTR 3B for the FY 2023-24. 7 How can recipient accept a genuine credit note issued by supplier in IMS as it will result further reduction of the

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e recipient? In the absence of linkage of Credit Note with the corresponding invoices, system cannot understand whether original invoice for this Credit Note was accepted or rejected. Therefore, if the invoice is not correct, then it is advisable to rectify the mistake through amendment of invoices in the GSTR 1 instead of issuance of a Credit Note. 10 Can the Credit Note be kept as pending in IMS? If no, then why? Credit Note cannot be kept pending in the IMS by the recipient as the supplier has reduced its outward tax liability at the time of issuance of credit note. IMS does not change the existing flow where the documents/records reported by the supplier in the GSTR 1 is accepted and corresponding impact is reflected in the GSTR-2B . Now because of IMS, an additional option has been provided to recipient to reject the credit note if it does not belong to him. 11 Whether liability can be added in the same GSTR 3B in case where credit note has been rejected by the recipient before fi

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Case-Laws – GST – Highlights – Composite supply involving works contract services provided to local authority not exempt under GST. Entry 3B of Notification No. 13/2017-CT(Rate) exempting services to government authority not applicable as applicant providing works contract services with supply of goods exceeding 25% value. Entries 3, 3A and 3B interlinked, exemption limited to pure services or composite supply with goods value not exceeding 25%. Applicant providing sewerage system works to Municipal Corporation, a local authority, attracts GST as per entries 3 and 3A covering services to local authorities. Entry 3B inapplicable as works contract with predominant supply of goods. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Supply classified as works contract u/s 2(119) of CGST Act. Applicant executes deposit works on behalf of consumers/agencies under two modes. In second mode, applicant eligible for input tax credit on materials, labor, installation, and overheads as per Section 16, not blocked u/s 17(5). Ownership vests with applicant after construction, but work done on behalf of customers, not on applicant's own account. Hence, input tax credit available despite applicant being custodian of constructed lines credited in books. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The authority classified the product “Vanilla Mix” – dried softy ice cream mix (low fat) in vanilla flavour under Heading 2106 90 99 of the First Schedule to the Tariff Act, attracting tax at 9% CGST and 9% SGST. It held that the product, comprising several ingredients intended for making soft serves, does not fall under Heading 0404 as a dairy produce. As per Chapter Note 5, food preparations subjected to further processing for human consumption are covered under Heading 2106, which includes powders for ice-creams, preparations consisting of milk powder, sugar and other added ingredients, and powders for table cream, jellies, ice-cream and similar preparations. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court held that the respondent-authority had jurisdiction u/s 61 of the Jharkhand Goods and Services Tax Act, 2017 to issue a second show-cause notice seeking further explanation regarding discrepancies pointed out after the petitioner's response to the first show-cause notice. The Court opined that since the petitioner had furnished an explanation to the first notice, no prejudice would be caused by responding to the second notice highlighting additional discrepancies. The petitioner was directed to explain the alleged discrepancies mentioned in the second show-cause notice dated 05.07.2024 for the authority to proceed in accordance with law u/s 61 of the JGST Act. Consequently, the writ petition was disposed of. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The authority classified the product “Vanilla Mix” – dried softy ice cream mix (low fat) in vanilla flavour under Heading 2106 90 99 of the First Schedule to the Tariff Act, attracting tax at 9% CGST and 9% SGST. It held that the product, comprising several ingredients intended for making soft serves, does not fall under Heading 0404 as a dairy produce. As per Chapter Note 5, food preparations subjected to further processing for human consumption are covered under Heading 2106, which includes powders for ice-creams, preparations consisting of milk powder, sugar and other added ingredients, and powders for table cream, jellies, ice-cream and similar preparations. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The High Court held that the petitioner's contention of not having the power to recover amounts during the pendency of an investigation that commenced prior to the issuance of a show cause notice u/ss 67 and 70 is valid. The payments made by the petitioner cannot be considered self-ascertainment u/s 74(5) of the CGST Act, as the element of voluntariness is absent. Since the adjudication is still to conclude and a notice u/s 74(1) has already been issued, the question of going back to the stage of Section 74(5) does not arise. The petition is allowed in part, declaring the recovery of tax from the petitioner as illegal and directing a refund within four weeks, along with applicable interest. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – The court held that blocking of the Electronic Credit Ledger without providing a pre-decisional hearing to the petitioner and without containing cogent reasons to believe in the impugned order violated the principles of natural justice. Relying on the precedent of K-9-ENTERPRISES, KWALITY METALS, K-9-INDUSTRIES VERSUS THE STATE OF KARNATAKA, THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, BELAGAVI, the court ruled that the mandatory requirements and parameters for invoking Rule 86A were not fulfilled by the respondents-revenue. The respondents were not entitled to rely upon the satisfaction of another officer and pass the impugned orders illegally and arbitrarily blocking the petitioner's Electronic Credit Ledger. Consequently, the impugned order was quashed, and the petition was allowed. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Bail cancellation case involving fraudulent input tax credit and creation of fake invoices under GST Act. Court found no procedural lapses by authorities in arrest as summons were issued, reasons recorded, and arrest memo provided. Accused was mastermind causing Rs. 175.88 crore tax evasion. Risk of fleeing abroad and tampering evidence if granted bail. Bail cancelled due to grave economic offence and flight risk. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – Various aspects related to the waiver of interest or penalty or both u/s 128A of the CGST Act. It clarifies eligibility criteria, application process, payment requirements, processing of applications, issuance of orders, and appeals. Key points include the time period covered, payment of full tax amount (excluding certain amounts), treatment of erroneous refund demands, demands spanning multiple periods, and applicability to IGST and Compensation Cess. It also addresses issues like retrospective ITC availability, adjustment of transitional credit demands, utilization of ITC for payment, and applicability to import IGST under Customs Act. The summary provides comprehensive guidance on availing the waiver benefit u/s 128A. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Circulars – GST – Highlights – Sub-section (5) and sub-section (6) inserted in section 16 of CGST Act retrospectively extend the time limit to avail input tax credit in certain specified cases pertaining to financial years 2017-18 to 2020-21. No refund of tax paid or input tax credit reversed is available where now eligible under sub-section (5) or (6). A special procedure notified allows rectification of orders u/ss 73, 74, 107 or 108 confirming demand for wrong availment of input tax credit due to contravention of sub-section (4), now permissible under sub-section (5) or (6). Application for rectification to be filed electronically within 6 months, uploading prescribed details. Proper officer to decide within 3 months, following principles of natural justice if adversely affecting the person. Appeal lies against rectified order. The special procedure applies only where demand confirmed involves issue of wrong input tax credit availment due to sub-section (4) contravention, now rectifiable under sub-section (5) or (6). – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Goods and Services Tax – GST Dated:- 17-10-2024 – News – In order to assist taxpayers in filing their returns and minimizing human errors, GSTN has continuously improved the GST return filing process and in this endeavor the GST Portal now provides a pre-filled GSTR-3B form, where the tax liability is auto-populated from the declared supplies in GSTR-1 / GSTR-1A/ IFF , while the Input Tax Credit (ITC) is auto-populated from GSTR-2B . A detailed system generated pdf of the auto populated GSTR-3B is also provided to all the taxpayers. 2.Now, taxpayers also have a facility to amend their incorrectly declared outward supplies in GSTR-1/IFF through GSTR-1A , allowing them an opportunity to correct their liabilities before filing their GSTR-3B

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Case-Laws – GST – Highlights – The court dismissed the petition, holding that there was no violation of principles of natural justice due to alleged vagueness in the show cause notice (SCN). The SCN was detailed, providing complete information about the case to be addressed. The petitioners' reply was thorough, and no serious grievance was raised regarding vagueness. The court cited Supreme Court precedents emphasizing that writ petitions should not be routinely entertained against SCNs unless there is absolute lack of jurisdiction or violation of natural justice principles. Recipients should respond to SCNs and raise all grounds, with jurisdictional issues adjudicated by the issuing authority initially before approaching the court. When there is a serious dispute over classification, respondents must respond to SCNs with supporting material. Litigation against SCNs should be discouraged to prevent frivolous cases and waste of public money and court time. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Petition maintainable but not entertainable due to availability of statutory remedy of appeal. Supreme Court held that merely because petition is maintainable, court not obligated to entertain it. Discretion lies with court. If petitioner failed to raise objections before authority, can do so in appeal memo before appellate authority. Petitioner unable to show palpable injustice if relegated to appeal remedy. In view of Supreme Court judgments, not required to entertain writ petition when statutory appeal remedy available. Petitioner can avail appeal remedy, time consumed in writ proceedings excluded for limitation purposes. Appellate authority directed to entertain appeal if filed physically. Writ petition disposed of. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – Tobacco pre-mixed with lime undergoes a manufacturing process involving mixing of lime paste, evaporation of water content, and addition of aroma, menthol, and moisturizer, resulting in a new product distinct from raw tobacco leaves. This process transforms the raw material into a marketable/consumable product for chewing needs, classifying it as “manufactured chewing tobacco” under CTH 2403 99 10. Consequently, the applicable GST rate is 28%, and the Compensation Cess rate is 160% as per Notification No. 1/2017-Compensation Cess (R). The ruling relies on the Supreme Court's decision in State of Madras Vs Bell mark Tobacco Company, which held that the cumulative effect of various processes on tobacco amounts to a manufacturing process. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – GST is payable under reverse charge mechanism on issuance of corporate guarantee without consideration by foreign group company to Indian subsidiary for loan taken from banks/financial institutions. The time of supply is the date of entry in books of Indian recipient. Prior to 26.10.2023, GST is payable at the time of execution based on valuation u/r 28(1). Post 26.10.2023, GST is payable one-time at 1% of total loan value u/r 28(2) at the time of execution. For continuing guarantees spanning multiple years, the value needs to be divided equally among relevant years, with GST payable at 1% of such divided value for the first year and 1% of outstanding loan value for subsequent years u/r 28(2). – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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Case-Laws – GST – Highlights – GST is applicable on mining lease payments, including royalty, payable to the Government of Rajasthan under reverse charge mechanism (RCM) at 18% (9% CGST and 9% SGST). The applicant is liable to pay GST on upfront payments made as per tender conditions before issuing Letter of Intent (LOI) and after issuing LOI but before entering into the lease agreement, under RCM. The applicant can claim input tax credit (ITC) of GST paid under RCM, subject to conditions u/s 16 of CGST Act, 2017. The applicant needs to obtain GST registration in Rajasthan for paying GST. – TMI Updates – Highlights, quick notes, marquee, annotation, news, alerts Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – TMI – TaxTMI – TMITax

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