Author: admin_gst

2019 (3) TMI 374 – ALLAHABAD HIGH COURT – TMI – Maintainability of petition – alternative remedy of appeal – order passed under Section 73 (9) of the U.P. GST Act, 2017 – Held that:- The aforesaid order is appellable under Section 107 of the U.P. GST Act – In view of the statutory provision for appeal we are not inclined to entertain the petition at all – petition dismissed. – Writ Tax No. – 235 of 2019 Dated:- 1-3-2019 – Pankaj Mithal And Saumitra Dayal Singh JJ. For the Petitioner : Nikhil Agrawal For the Respondent : C.S.C. ORDER Heard Sri Nikhil Agrawal, learned counsel for the petitioner and Sri CB. Tripathi for the respondents. The writ petition is directed against the order passed under Section 73 (9) of the U.P. GST Act, 2017 date

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2019 (3) TMI 429 – NATIONAL ANTI-PROFITEERING AUTHORITY – TMI – Profiteering – Caribbean Wood Tile – benefit of reduction in the rate of tax no passed on – contravention of Section 171 of the Central Goods & Service Tax (CGST) Act, 2017 – Held that:- There was no reduction of tax with the introduction of GST. The DGAP on examining various facts has categorically mentioned that the invoices very clearly show that no VAT was levied and CST was also exempted prior to 01.07.2017. In fact the rate of tax has increased from Central Excise Duty 13.97% to GST 28% w.e.f. 01.07.2017. Therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017 as there has been no reduction in the rate of tax.
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There is no merit in the application – application dismissed. – Case No. 14/2019 Dated:- 1-3-2019 – Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member, Ms. R. Bhagyadevi, Technical Member And Amand Shah, Technical Member Ms. A. Shainamol, A

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he above reference was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of its meeting dated 02.07.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017. 3. The Directorate General of Anti-Profiteering (DGAP), after detailed investigation submitted its present report dated 03.10.2018 under Rule 129 (6) of the CGST Rules, 2017. 4. The DGAP has observed that in the pre-GST era, the rate of tax applicable on the product was Central Excise Duty @ 12.5% of the 60% of the MRP and there was no VAT or CST charged in the invoice whereas after implementation of the GST w.e.f. 01.07.2017, the tax rate of GST on the said product was fixed at 28%. The DGAP has further furnished the pre-GST & the post-GST sale invoice-wise details of the applicable tax rate and base price (excluding CST or GST) of the said product supplied by the Respondent in the table given below:- Period Pre-GST (prior to 01.07.2017) Post-GST (post

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gation of profiteering by the Respondent was not established 6. The above report was considered by the Authority in its meeting held on 03.10.2018 and it was decided that since there was no complainant/other applicant in this case, the Kerala Screening Committee be asked to appear before the Authority on 18.10.2018. Since, no one appeared for the hearing on 18.10.2018, the Authority decided to ask Kerala Screening Committee to appear before the Authority on 31.10.2018. Ms. A. Shainamol, Additional Commissioner, SGST, Kerala appeared on behalf of the Applicant No. 1 on 31.10.2018. During the hearing, it was observed that the DGAP report had not considered the MRP and base price (excluding VAT) of the product in question. 7. The Authority accordingly vide its letter dated 13.12.2018 had returned the report to the DGAP for re-investigation on the above mentioned issue under Rule 133(4) of the CGST Rules, 2017. 8. The DGAP vide his Report dated 20.12.2018 has submitted that as per Annexure

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al Excise duty was leviable @ 12.5% on 60% of the MRP(40 0/o abatement). Since the transaction had taken place at a price lower than the MRP, the MRP has no bearing on the allegation of profiteering. 9. The DGAP has further observed that in the pre-GST invoice dated 27.04.2017, there was no VAT (transaction was exempt from CST) and the Central Excise duty amounted to 13.97%, there was no reduction in the tax rate post implementation of GST. In fact, post-GST, the tax rate increased from 13.97% to 28%. Hence, Section 171 of the CGST Act, 2017, is not attracted. 10. We have carefully examined the report of the DGAP and the documents placed on record and find that the only issue that needs to be dwelled upon is as to whether there was reduction in the rate of tax on the product in question after introduction of GST and whether the provisions of section 171 of CGST Act, 2017, are attracted. Perusal of Section 171 of the CGST Act, 2017, reads as under:- (1). Any reduction in rate of tax on

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2019 (3) TMI 435 – APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – TMI – Valuation – inclusion of amortized cost of the tools in assessable value – tools are supplied by the customer free of cost and used by the Appellant in the manufacture of the components – Section 15 of the CGST Act read with Rule 27 of CGST Rules – challenge to AAR decision – Held that:- Under the erstwhile Central Excise regime, Rule 6 of the Central Excise Valuation Rules, 2000 required an assessee to calculate the intrinsic value of the excisable goods by including any additional consideration flowing directly or indirectly from the buyer to the assessee – Under the GST regime of taxation, the taxable event which attracts the levy of GST is the ‘supply’ of goods or services, in terms of Section 9 of the CGST (and SGST) Act or Section 5 of the IGST Act, depending on whether the transaction of ‘supply’ is intrastate or interstate.
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In so far as the valuation of the supply is concerned, Section 15 of th

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ng that there is uninterrupted supply of their parts. While the first priority is that the supplier should use the DICV Owned Tools for the manufacture of the component parts, there is also the possibility that Non-DICV Owned Tools can also be used for the manufacture of parts for the customer. In the event of the second possibility, the customer, DICV takes ownership of the Non-DICV Owned Tools by way of a security only with the objective of ensuring that the supply of their parts by the Appellant is uninterrupted. In the event there is an interruption in delivery of manufactured components using the Non-DICV Owned Tools, then the customer, DICV, has the right to demand the surrender of the tools and reimburse the Appellant the percentage of the tool cost which has not been amortized. On perusal of the contract, it is understood that, in the case Non- DICV Owned Tools are used in the manufacture of the components, the price agreed upon includes the amortized cost of the Non-DICV Owned

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ions; therefore; unless a mention is particularly made to such a dissimilar provision, a reference to the CGST Act would also mean a reference to the corresponding similar provisions under the KGST Act. The present appeal has been filed under section 100 of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST Act ) by M/s. Nash Industries (I) Private Limited, (herein after referred to as the Appellant ) against the Advance Ruling No. NO. KAR ADRG 24/2018 dated 25th October 2018 = 2018 (11) TMI 607 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA. BRIEF FACTS OF THE CASE 1. M/s. Nash Industries (I) Private Limited is registered under GST with GSTIN No. 29AADCN9558Q1ZC and is a manufacturer of sheet metal pressed components and supplies to industrial customers like Automotive, Banking Hardware, Power Protection, Alternate Energy etc. The tools required to manufacture these components were designed and

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e CGST/KGST Act,2017. 4. Aggrieved by the said ruling of the Authority, the applicant has filed an appeal under section 100 of the CGST Act, 2017 / KGST Act, 2017 on the following grounds: 4.1. The appellant submitted that the purchase order provided by the recipient/customer is only for the manufacture of components out of the tools supplied by the recipient at free of cost. 4.2. Further, the appellant submitted that the CBIC vide Circular No.47/21/2018-GST dated 08.06.2018 has clarified the position regarding amortization of tool cost supplied free of cost by the customer, to the value of components manufactured by the component manufacturer, The relevant extract of the circular is provided below: Sl.No. Issue Clarification 1 Whether moulds and dies owned by Original Equipment Manufacturers(OEM) that are sent free of cost FOC to a component manufacturer is leviable to tax and whether OEMs are required to reverse input tax credit in this case? 1.1. MouIds and dies owned by the origina

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d component manufacturer was for supply of components made by using the moulds/dies belonging to the Component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis; the amortised cost of such moulds/dies shall be added to the value of the components. In such cases, the OEM will be required to reverse the credit availed on such moulds/dies, as the same will not be considered to be provided by OEM to the component manufacturer in the course or furtherance of the former s business 4.3. They submitted that the above circular covers two situations, which are as follows: a. The value of the moulds and dies owned by the original equipment manufacturer (OEM) which are provided to a component manufacturer on FOC basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer. b. The contract between OEM and component manufacturer was for supply of components made by using the

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t of the tool is required to be added only if the tool is belonging to the component manufacturer (Appellant). In the present case, the owner of the tool is the recipient / customer and hence the cost of tool is not required to be added to the price of the component; that the scope of the Appellant s activity is limited to manufacture and supply of components; that, the burden of supply of tools is on the customer and not on the Appellant. Therefore, the tool supplied by the customer at free of cost is not required to be added to the cost of components manufactured by the Appellant. 4.6. The appellant drew attention to the provisions of Section 15 of CGST/KGST Act,2017 and submitted that there is no amount which was liable to be paid by the Appellant but incurred by the recipient. Instead the agreement between the Appellant and the customer is only for manufacture and supply of components and not to manufacture the tool. That being the case, the cost of the tool is not be included in t

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ubmissions before this Authority wherein they stated that the Maharashtra Authority for Advance Ruling in the case of Lear Automotive India Private Ltd had passed a ruling GST-ARA-19/2018-19/B-80 dated 31.07.2018 = 2018 (12) TMI 766 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA on the same issue i.e. whether amortized value of the tool received on FOC basis from the customer is required to be included in the value of finished goods manufactured and supplied by the applicant to the customer. The Maharashtra AAR had based on the facts and circumstances of the case before them, held in the negative. Relying on the above said order they submitted that the same is also applicable in their case. During the personal hearing, this Authority asked for the details of the terms of the contract between the Appellant and their customer to be furnished in order to understand each party s obligations. The representative agreed to submit it in due course. 6. The Appellant through their representative Ch

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n flowing directly or indirectly from the buyer to the assessee. In other words, since excise duty was levied on the activity of manufacture, any activity which was contributing to the manufacturing activity was included in the assessable value irrespective of the fact as to who owned the inputs and capital goods. In view of the same, the Appellant was amortizing the value of such tools supplied by their customers free of charge and was including the same in the assessable value of the final goods for discharging applicable Central Excise duty. With the advent of GST with effect from 1st July 2017, a provision similar to the erstwhile Rule 6 of the Valuation Rules does not exist thereby warranting the question whether, under the GST regime, the value of the tool cost is required to be amortized. 10. Under the GST regime of taxation, the taxable event which attracts the levy of GST is the supply of goods or services, in terms of Section 9 of the CGST (and SGST) Act or Section 5 of the I

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n value which is the price paid or payable by the recipient provided the supplier and recipient are unrelated parties and price is the sole consideration for the supply. Further Section of the said Act specifically states that where any amount which the supplier is liable to pay in relation to a supply but the same has been incurred by the recipient on behalf of the supplier, then such amount is required to be added while determining the transaction value. 11. In the present case, there is no dispute on the fact that the Appellant and their customers are not related parties. We need to examine whether the price paid by the customers is the sole consideration for the supply made by the Appellant. For this purpose, it is necessary to understand the contractual arrangement between the Appellant and their customers to see whether the scope of the supply mandates that, the Appellant is to incur a cost for the manufacture and use of the tool but the same has been supplied by the customer fre

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er has been performed Supplier must hand over the tooling to Buyer following fulfillment of the Purchase Order if so requested by Buyer. 13. The Daimler India Special Terms (DIST) are a set of rules governing the supply arrangement between DICV and the Appellant. The DIST forms an integral part of the contract along with the General Terms and Conditions of DICV for the purchase of products that are specifically mentioned in the purchase contract. The relevant provisions of the DIST relating to tools are reproduced hereunder: 1.4. With regard to tools, a distinction must be made between tools which are or will become the property of DICV (hereinafter DICV Owned Tools ) and tools which are not the property of DICV (hereinafter Non-DICV Owned Tools ) To ensure the aforementioned distinction is made appropriately, DICV Asset Accounting team will provide Asset Identification Tags to the supplier, which should be affixed in the most appropriate place of DICV Owned Tools. Regardless of owners

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lowing terms of maintenance. The supplier must ensure constant defect-free functional capacity and readiness of the tools during their use within the framework of the supply contract with DICV for the purpose of uninterrupted delivery to DICV by means of continuous maintenance and repair at its own expense. 2.5 In the event where changes in DICV s technical specifications require any modifications to the tools, the supplier must submit a prior written offer to DICV to modify the tools with the least possible expenditure. 2.6 The supplier must clearly and permanently identify those tools which are DICV Owned Tools as the property Of DICV. 2.8 At the end of delivery or termination of contractual relationship with the supplier, the supplier shall return the tools to DICV in the condition to be expected following fulfillment of the supplier s duties arising from these DIST. 3. Insofar as Non-DICV Owned are concerned, DICV shall Obtain ownership of the existing and subsequent tools by way o

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ourse of the development of the Tool will be transferred to DICV. The Appellant is entitled to keep the tool in his premises only as a temporary possession until the completion of the supply of components manufactured using the tool. During the course of temporary possession of the tools owned by DICV, the Appellant is required to affix Asset Identification Tags on the DICV Owned Tools in order to identity the DICV owned tool. On completion of the contractual relationship, the Appellant is required to return the tools to DICV. In so far as Non-DICV Owned Tools are concerned, the terms of the contract state that in order to ensure uninterrupted supply of parts, DICV obtain ownership of the existing and subsequent tools by way of security. Thus it is evident that, in this case, the customer, DICV, has assumed the responsibility to provide the tools to the Appellant in the interest of ensuring that there is uninterrupted supply of their parts. While the first priority is that the supplier

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by OEM that are provided to a component manufacturer on FOC basis do not constitute a supply as there is no consideration and in such cases, the value of goods provided on FOC basis shall not be added to the value of supply of components. However, in case the contractual obligation is cast upon the component manufacturer to provide moulds/dies but the same have been provided by the OEM on FOC basis, then the amortized cost of the moulds/dies is required to be added to the value of the components supplied. In the present case, the terms and conditions of the contract between the OEM DICV and the Appellant clearly indicate that no such obligation is cast on the Appellant. The OEM has taken the responsibility to provide the tools. In a case where the tools are developed and manufactured by the Appellant according to the requirements of the customer (DICV), then the total cost of the tools is borne by DICV and the title of the tools transfers to DICV, while the Appellant is allowed to reta

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M/s. TECPRO INFRA PROJECTS LTD. (FORMERLY KNOWN AS BESL INFRA PROJECTS LTD) Versus STATE TAX OFFICER STATE GST DEPARTMENT OF KERALA, ALUVA, THE COMMISSIONER, STATE GOODS AND SERVICES TAX DEPARTMENT, THIRUVANANTHAPURAM, STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT SECRETARIAT, THIRUVANANTHAPURAM AND CENTRAL BOARD OF EXCISE & CUSTOMS DEPARTMENT OF REVENUE, NEW DELHI – 2019 (3) TMI 488 – KERALA HIGH COURT – TMI – Constitutionality of section 174 of KGST Act and 101st Constitutional Amendment – Jurisdiction – power to enact section 174 of KGST Act – Held that:- Identical issue decided in the case of M/S. SHEEN GOLDEN JEWELS (INDIA) PVT. LTD. VERSUS THE STATE TAX OFFICER (IB) -1, AND OTHERS [2019 (2) TMI 300 – KERALA

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that clauses [d] and [e] of section 174 of the Kerala Goods and Services Tax Act 2017 are inconsistent and contradictory with the provisions of Sec.19 of the Constitution One Hundred and First Amendment Act 2016 and hence they are ultravires to the Constitution of India. iii) To declare that the powers under erstwhile Entry 54 do not exist post 15/09/2017 and therefore the provisions of the Kerala Value Added Tax Act cannot be enforced after 15/09/2017 so long as the old Entry 54 has not been saved. iv) To declare that when the provisions of Constitution are inconsistent with the provisions of a statute, the provisions of Constitution will prevail over the provisions of statute and so provisions of Sec.174 of the Kerala Goods and Service T

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GST – Started By: – HIMANSHU GOEL – Dated:- 28-2-2019 Last Replied Date:- 2-3-2019 – As per Rule 96(10) of CGST Rules, 2017, a person cannot claim refund of IGST on export of services where such person has availed benefit of Deemed Export under NN 48/2017-CT dated 18th Oct, 2017. Whether this restriction is applicable for (a) indefinite period, (b) tax period for which refund of IGST paid on export of services is filed, (c) whole FY ? – Reply By KASTURI SETHI – The Reply = Sub-rule 10 of Rule 9

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Commission received by the owner of petrol pump from petroleum company – GST – Started By: – khaja sayeed – Dated:- 28-2-2019 – Sir,Commission paid by the petroleum company for the services provided b

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43rd Civil Accounts Day on March 1, 2019; On the occasion, the Finance Minister, Shri Arun Jaitley to make a Statement on the implementation of PM -KISAN Yojana through PFMS and to release the Compendium on GST Refunds compiled by the Office of Pr. CCA (CBIC) among others – News and Press Release – Dated:- 28-2-2019 – The Indian Civil Accounts Service (ICAS) is celebrating March 1 every year as the Civil Accounts Day . Since its inception, the ICAS has steadily grown in stature and now plays an important role in the management of public finances of the Union Government. A function is being organized on March 1, 2019 at Mavalankar Auditorium, Constitution Club of India, Rafi Marg, New Delhi to mark the 43rd Civil Accounts Day. The 43rd Civil Accounts Day will essentially show case the progress of the flagship project of the Indian Civil Accounts Organization viz the Public Financial Management System (PFMS). Apart from this, the role of PFMS in processing IGST refunds under t

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y the Controller General of Accounts (CGA) on the following 1 -Implementation of PM -KISAN Yojana through PFMS 2 -Processing of GST refunds through the ARPIT application integrated with PFMS The Finance Minister, Shri Jaitley will subsequently make a Statement on the implementation of PM -KISAN Yojana and will release the Compendium on GST refunds compiled by the Office of Pr. CCA (CBIC). PFMS will now also be implementing the Government ambitious PM -KISAN Yojana which would involve an estimated additional 12 -13 crore beneficiaries. This involves a massive exercise of coordination with multiple stakeholders including the Ministry of Agriculture and the Banks for achieving the objective. It is indeed a proud moment for the Indian Civil Accounts Organization that the First Tranche of ₹ 2000 was successfully credited to the Banks Accounts of the first lot of 1.01 crore beneficiaries on 24th February 2019 with the formal launch of the sc

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this, 60 crore (approximately 30%) were effected during the calendar year 2018 alone. • E -payments -PFMS has successfully effected total e -payments of R 46.66 lakh crore during this entire period out of which R 23.05 lakh crore (approximately 50%) were successfully processed during the calendar year 2018 alone. • Bank Integration -PFMS today is integrated with a total of 249 banks under all categories. 67 of these banks were integrated during the calendar Year 2018 alone. DBT transactions – • PFMS has successfully processed in excess of 179 crore DBT transactions involving total DBT payments of R 3.94 lakh crore during this entire period. Almost 40% -45% of these transactions were successfully effected in the calendar year 2018 alone. Currently the total number of DBT beneficiaries being serviced by PFMS is in excess of 1

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thony Lianzuala, Controller General of Accounts – The Controller General of Accounts has developed a (i) Dashboard for monitoring Scheme-wise Budget and Expenditure for all the Civil Ministries, and a (ii) Bank Monitoring Mobile Application to monitor performance of Banks in handling public monies. With the Dashboard, the Department of Expenditure and the Senior Officers of all Civil Ministries can monitor expenditure on a near real-time basis with the expenditure data made available from PFMS (Public Financial management System) up to the previous day. The Dashboard also incorporates data from the treasury systems of the 29 States and 2 UTs with legislature, i.e. releases made by the Government of India to the State Governments under the various Centrally Sponsored Schemes. The data for Non-Tax Receipts (through www.bharatkosh.gov.in) is also available for monitoring. The Dashboard also has a unique feature of monitoring Bank Balance of all the Agencies involved

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Chief Controller General of Accounts (CBIC) & its integration with PFMS- ARPIT (Accounting and Reconciliation Portal of Indirect Taxes) is the accounting and reconciliation Portal for Central Government in respect of Goods & Services Tax which was introduced in the country w.e.f.1.7.2017. The Portal has been designed and developed by the Office of the Principal Chief Controller of Accounts, CBIC under Department of Revenue. Till date ARPIT has successfully processed more than 18 crore transactions amounting to ₹ 8.5 lakh crore with 99.99% accuracy in respect of CGST, IGST, Compensation Cess and UTGST-others. This is a multi-user Portal and provides Dashboard facility and various MIS, Accounting and other Reports. ARPIT owing to its design and system capabilities can also be adopted by all the 29 states and 7 UTs for accounting of State GST/UTGST. • GRameen Internal Audit Portal (GRIP)- GRameen Internal Audit Portal is an

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!supportLists]->• Release of the Operational Manual of Risk Based Internal Audit- One of the events of the 42nd Civil Accounts Day function was the release of the Internal Audit Hand Book which has been prepared by the Institute of Internal Auditors (IIA)- India as part of the Memorandum of Understanding (MoU) which was signed between O/o Controller General of Accounts and Institute of Internal Auditors- India in presence of theUnion Finance Minister on 14th September, 2016. This Hand Book aims at giving in one place, the entire conceptual frame work of Risk Based Internal Audit (RBIA) approach. During the 43rd Civil Accounts Day function it is proposed to release the operational Internal Audit Manual which will contain the checklist questionnaire for use/ reference of Internal Auditors of line Ministries/ Departments. A proposal for creation of 475 posts (Group A & Group B ) for Internal Audit Wings of line Ministries/Departments is under the considera

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GST – Classification of goods – Bags/Sacks – in the absence of any definite material mentioned for the fabric, the General Rules for the Interpretation of the First Schedule of the Customs Tariff, whi

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GST – Classification of supply – service to the students for lodging along with food under MOU with the school / college – Applicant is not an educational institution – Benefit of exemption not availa

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GST – Input tax Credit – ambulances purchased for the benefit of the employees under legal requirement of the Factories Act, 1948 – Not falling within the exception carved out u/s 17(5)(b)(iii)(A) of

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GST – Classification of supply – setting up a project in the school under BOOT model basis – supply of goods and services including training – challenge to AAR Decision – Activity is liable to GST – N

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GST applicability on transfer of brand – GST – Started By: – Mohideen A – Dated:- 28-2-2019 Last Replied Date:- 2-3-2019 – Is transfer of brand (intangible) liable for GST? – Reply By KASTURI SETHI –

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GST – Started By: – sunil kumar – Dated:- 28-2-2019 Last Replied Date:- 4-3-2019 – Dear Sir,Iam a registered dealer under GST.May I request your expert advice as under:If I purchase a repossessed vehicle @ 100000-00( which falls under 12% gst)PURCHASE PRICE :- 100000-00EXPENSES ;- 25000-00 (on insurance cover,MV tax,Parking charges to yard,4 tyre, (incld.GST)Sold the vehicle@ ;- 150000-00Net Dealer Margin :- 25000-00Would I have to pay the GST on Dlr Margin i.e on 25000-00 or on the difference of sale price & purchase price 150000 (-)100000 )= 50000Kindly have your kind advice on the above confusion.Regards,Sunil – Reply By KASTURI SETHI – The Reply = Margin Scheme in GST C.B.E. & C. Flyer No. 30, dated 1-1-2018 – Reply By KASTURI

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yard & transportation charges from yard, after adding nominal services charges. For example :- cost of insurance policy 8000-00 (GST payable) Parking Charges 10000-00 (GST payable) Cost of 04 tyres 7000-00 (GST payable) Tpt charges Pertol & driver 3000-00 (Vat payable on petrol) Gross 28000-00 service charges from customer 2000-00 Do I have to pay the GST on 28000-/ or 2000/- against service charges collectable from customer. May I request for your kind advice? Regards, Sunil – Reply By KASTURI SETHI – The Reply = Dear Querist, First you are requested to reply to the question raised on 2.3.2019 by Sh.Ganeshan Kalyani Ji. Pl. confirm whether you are dealing in Second Hand motor vehicle. – Reply By KASTURI SETHI – The Reply = You cann

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GST – Started By: – vaishali raveshiya – Dated:- 28-2-2019 Last Replied Date:- 2-3-2019 – Respected members,kindly guide me how to deal with in regards to following matter in Income Tax and GST?A business is carried on in the name of mother will be taken over by/ transfer to her son.What procedure to be followed in GST,whether GST is payable ot it is exempt under entry 2 of exemption list?When to take new GST registration no, before surrender of registration no taken in the name of mother or after cancellation of it?Whether ITC can be claimed on closing stoch after transfer of business??Whats other impact in GST and Income Tax?? – Reply By KASTURI SETHI – The Reply = 1. You are required to apply for cancellation of registration in Form REG

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GST – Started By: – Jagdish MAheshwari – Dated:- 28-2-2019 Last Replied Date:- 3-3-2019 – Dear Sir,We have purchase diesel from domestic area for authorised operation purpose in SEZ.how to get GST exemption for the same. – Reply By KASTURI SETHI – The Reply = You have purchased diesel from dealer for SEZ operations. It is treated as export. Thus dealer has exported to SEZ. Either dealer or you can apply for refund of taxes paid..If you want to apply for refund, obtain disclaimer certificate fro

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GST – Started By: – TirumalaRao Vuppala – Dated:- 28-2-2019 Last Replied Date:- 28-2-2019 – Dear Sirs, What is the impact of Section 49A on working capital limits? If IGST not available to adjust to output tax of CGST & SGST, we will be pay by way of Cash. As per my knowledge up to 31-01-2019 ITC GST adjustment is correct. What is the use to dealers as per new adjustment system of GST? – Reply By Spudarjunan S – The Reply = Dear Sir, The probable reason for insertion of section 49A under GST Act is to utilise the IGST credit in first against the tax liability in order to avoid the complexity to Central Government to apportionate the IGST credits to the states. The impact of Section 49A is accumulation of CGST credit and cash outflow fo

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GST – Started By: – Kaustubh Karandikar – Dated:- 28-2-2019 Last Replied Date:- 2-3-2019 – XYZ having manufacturing unit cum Head Office in Maharashtra and other units outside Maharashtra. Certain common services are received at Maharashtra on which 100% credit is taken at Maharashtra. In this situation, they can raise monthly invoice in the name of other units under the category of Business Support Service based on the value mentioned in the invoices of the service provider for common services received at Maharashtra and by adding certain percentage of mark – up on it. Once this figure is arrived at, the same needs to be apportioned in the name of each unit based on cost centre wise expenses maintained by company on monthly basis. Will th

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in various States then first challenge is reverse charge liability cannot on legal service cannot be paid under ISD registration. Thus for compliance the liability has to be paid under regular registration taken for Maharashtra . For doing this payment the invoice ahould be in the address of office/factory having regular registration number. Then a cross charge invoice is to be raised from regular registration number to the ISD registration number . And the credit gets populated to ISD number then it can distribute the credit .In order to overcome such challenges company is instead of taking ISD registration raises cross charge invoices to other branches in other States. First full credit is being taken in Maharashtra .Even though this meth

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 28-2-2019 – In one of the advance rulings, assessee was supplying animal carcass in its natural shape in frozen state in different weights and sizes in bags. The ruling was sought on whether such supplier can be considered to have been supplied such goods in unit containers . In Re: Ahmednagar District Goat Rearing and Processing Cooperative Federation Ltd. 2018 (5) TMI 1393 – AUTHORITY FOR ADVANCE RULING – MAHARASTRA ; In the instant case, Ahmednagar District Goat Rearing and Processing Co-op Ltd. was engaged in slaughtering and processing of sheep/goat meat and supplied these products to Army against tender. It supplied to Army sheep/ goat meat in carcass form i.e. the whole animal carcass in its natural shape in frozen state. Naturally, the carcass would be in different weight and sizes. Further, there was no fixed quantity & size in which these carcasses were dispatched to Army. The said dispatches were made on

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the relevant GST notifications provided for the following conditions: W.e.f. from 1st July, 2017 till 14th November, 2017: Must be frozen Must be packed in unit container W.e.f. from 15th November, 2017 onwards: Must be frozen Must be packed in unit container Must bear a brand The words 'unit container' have been defined similarly in both the Notification No.1-Integrated Tax (Rate) and Notification No, 2/2017- Integrated Tax (Rate) of the IGST Act as under – The phrase unit container means a package, whether large or small (for example, tin, can, box, jar, bottle, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package. The product, in question was sheep/ goat meat in carcass form i.e. the whole animal carcass in its natural shape. It is supplied in frozen state in LDPE and HDPE bags. The above definition covers a package and the examples of such a package include a 'bag'. The aspects which were exam

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iod 1.7.2017 to 13.11.2017. From 14.11.2017 onwards, the products would be covered under schedule entry 1 of Notification No. 1- Integrated Tax (Rate). The appellate Authority for Advance Ruling has however modified this ruling vide Order dated 11.09.2018 and reported hereunder. Appellate Ruling Being aggrieved, the matter went to Appellate Authority for Advance Ruling, Maharashtra [In Re: Ahmednagar District Goat Rearing and Processing Cooperative Federation Ltd. 2018 (9) TMI 1184 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA ]. It was observed that the definition of unit container is provided under the CGST Act as an explanation to the exemption Notification and we do not see any reason to resort to the similar definitions available in other Acts/Statutes. So, we will concentrate and restrict our scope to the definition available under the CGST Act which is the subject matter of appeal. In terms of the said definition, for any package (irrespective of size, nature and shape) t

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2019 (3) TMI 34 – CESTAT HYDERABAD – TMI – Process amounting to manufacture or not – uncoiling the sheets, cutting them to sizes and corrugating them into form to be used as roofs – excisability – extended period of limitation – confiscation – penalties – Held that:- As the appellant is bringing into existence a new commodity as known in the market, there is no hesitation in holding that the appellant has indeed manufactured the profiles from the sheets – the process amounts to manufacture – demand of excise duty upheld.
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Time Limitation – Held that:- Appellant would not have gained much by evading any excise duty as the overwhelming part of the cost is of sheets on which they are entitled to CENVAT credit paid by the suppliers anyway. They are also paying service tax on corrugation element on it. So what is escaping tax is the small profit margin between the purchase price of the sheets and the sale price of the sheets. If the appellant is required to pay excise duty they will b

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cords. 3. The facts of the case in brief are that the main appellant MSC are registered with Central Excise department as a trader for issue of duty paid documents in respect of the steel sheets which they purchase from M/s JSW Steel Ltd and sell to others. They also have taken registration from the Central Excise department for rendering business auxiliary services and storage and warehousing services . The officers of the DGCEI gathered intelligence that the appellant is, under the guise of trading activity, manufacturing colour coated profile sheets (in short profiles ) and cleared the same without accounting for them and without discharging the Central Excise duty. On gathering such intelligence, the officers of DGCEI conducted searches at the factory premises and also premises of their dealers both local and outstation. They have also recorded statements of various officers of the appellant and came to a conclusion that the appellant has indeed manufactured profiles out of steel s

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edge of the department and they have been paying service tax on the process of corrugation under the head of business auxiliary service . He takes the bench through some of the invoices and shows that whenever they sold corrugated sheets to their customers, they have issued tax invoices for the sheet as shown in Pg.191 of the paper book in appeal E/30306/2017. Correspondingly, they have also issued a separate invoice for the corrugation work undertaken by them for the same goods as shown in Pg.210 of the same paper book. He would argue that mere uncoiling sheets from the rolls, cutting them into sizes and corrugating them into corrugated sheets does not amount to manufacture. The sheet continues to be sheet whether or not the profiles are made in the sheet. The profiles are made so as to make it suitable for use as roof. The entire activity of the appellant, both on the trading front and on the profiling is known to the department. They have always held the belief that corrugation does

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s and appropriate service tax has been paid on the same. Therefore, the entire demand is time barred and the show cause notice is not sustainable. (c) The demand is also not computed correctly because if it is held that they are liable to pay excise duty on the final products, they are entitled to the credit of the duty paid on the steel sheets which are their inputs. Once, the CENVAT credit is allowed, the bulk of the demand would extinguish anyway as can be seen from the invoices. Bulk of the price which they recover from their customers is towards steel sheets and only a small amount is collected towards the corrugation. (d) In view of the above, it cannot be alleged that they had an intention to evade payment of duty because on the raw material cost they would have got CENVAT credit anyway and on the value addition by way of corrugation, they have been paying service tax at the rate of 12%. Therefore, by no stretch of imagination can it be said that they have gained anything by eva

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xcise duty. Therefore, the demands are sustainable on merits. He also submits that the appellant neither took Central Excise registration for manufacture of the products nor has he paid the duty thereon. While he was selling the profiles to be used as roof, he was invoicing them as sheets and was raising separate invoices for service charges. This shows that the appellant had the malafide intention of evading payment of Central Excise duty and accordingly, he has been misdeclaring the description of the goods in the invoices and evading excise duty. On the question of payment of service tax on the corrugation, the learned department representative would assert that the appellant never disclosed the nature of the activities to the department and has only filed ST-3 returns indicating that they have paid some amounts as service tax under business auxiliary service . There is nothing on record to show that they appellant has described nature of the activity or sought any clarification fro

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o pieces and corrugated them by putting them through a machine and sold them. Such corrugated sheets/ profiles are used as roofs. The question as to whether this process of corrugation brings into market a new distinct commodity or it is only a minor processing of the goods itself and the commodity continues to be the same has been settled in the case of Proflex Systems (supra) held by the Hon ble High Court of Gujarat and affirmed by the Hon ble Apex Court. The decision in that case is that corrugated sheets meant to be used as roofs are distinct commodities from the sheets which are purchased in the form of coils. As the appellant is bringing into existence a new commodity as known in the market, we have no hesitation in holding that the appellant has indeed manufactured the profiles from the sheets. We do not agree with the learned counsel for the appellant that the processing does not amount to manufacture. 9. On the issue of limitation of time, we find that the appellant was regis

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ure of the activity being undertaken by the assessee. We also find force in the argument of the learned counsel for the appellant that they would not have gained much by evading any excise duty as the overwhelming part of the cost is of sheets on which they are entitled to CENVAT credit paid by the suppliers anyway. They are also paying service tax on corrugation element on it. So what is escaping tax is the small profit margin between the purchase price of the sheets and the sale price of the sheets. If the appellant is required to pay excise duty they will be entitled the CENVAT credit. In this factual matrix, we do not find that the revenue has made out a case to invoke extended period of limitation. 10. We find the entire demand in the show cause notice is beyond the normal period of limitation and therefore, the demand and interest do not sustain. Consequently, the confiscations and penalties also do not sustain. In view of the above, we find that appeals are liable to be allowed

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2019 (3) TMI 108 – CESTAT CHENNAI – TMI – Classification of goods – manifold business forms including printed/ blank continuous computer stationery forms and printed cut sheet forms – classifiable under 4820 of CETA, 1985 or not – SSI Exemption – Held that:- The ld. consultant is correct in his assertion that the classification of the impugned goods has been settled by case laws cited by him, in particular, the Tribunal’s decision in Data Processing Forms Pvt. Ltd. [
2011 (9) TMI 921 – CESTAT AHMEDABAD]. This being so, at least in respect of the items in Table like LIC Intimation letter, share certificates, bus ticket, boarding pass, etc. all generated by computer stationery will not be exigible to tax.
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It is appropriate to remand the matter back to the original authority who will take note of in such re-adjudication and apply the ratios laid down in the decisions cited – The authority shall look into the claim and after applying the ratio of the case laws, it is found that t

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how cause notice was issued to the appellant inter alia proposing to demand duty of ₹ 14,04,409/- with interest in respect of clearances made from 1.4.2006 to 31.3.2008 and for imposing penalties under various provisions of law. In adjudication, the original authority vide order dated 31.5.2010 confirmed the duty liability as proposed in the show cause notice and also imposed equal penalty under section 11AC of Central Excise Act, 1944 and ₹ 10,000/- under Rule 25. In appeal, Commissioner (Appeals) upheld the demand except for setting aside the penalty imposed under Rule 25. Hence this appeal. 2. Today, when the matter came up for hearing, ld. consultant Shri S. Ramachandran appeared on behalf of the appellant and made oral and written submissions, which can be broadly summarized as under:- 2.1 The department has taken the full turnover as per the Profit and Loss account without excluding the non-excisable jobs and confirmed the demand. 2.2 The ld. consultant submitted a ch

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ing decisions:- a. Dy. Chief Manager (P&S) Central Railway Vs. Commissioner of Central Excise, Mumbai – I – 2015 (328) ELT 296 b. Commissioner of Central Excise, Kanpur Vs. Shree Datawares Pvt. Ltd. – 2017 (349) ELT 499 c. B.K. Paper Mills Ltd. Vs. Commissioner of Central Excise, Bombay – 1998 (101) ELT 407 d. Commissioner of Central Excise, Madurai Vs. Chidambaram Litho Press – 2009 (247) ELT 690. 3. On the other hand, ld. AR Supports the impugned order. She submitted that as per law, the product would fall under 4820 of CETA and not under 4911. 4. Heard both sides. 5. We find that the ld. consultant is correct in his assertion that the classification of the impugned goods has been settled by case laws cited by him, in particular, the Tribunal s decision in Data Processing Forms Pvt. Ltd. (supra). This being so, at least in respect of the items in Table like LIC Intimation letter, share certificates, bus ticket, boarding pass, etc. all generated by computer stationery will not be

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rity Job – High Court judgment sheet – Cut sheet 234453 0 Jewel loan form – printed cut sheet 0 48950 TMA forms – thermal paper cut to size (for ATM) 529544 Conductor cash receipt / trip sheet – printed cut sheet 0 2373331 Pothy s cash token – printed cut sheet 506835 341835 O.P. slip – printed cut sheet 34340 172308 Letter head – printed cut sheet 374543 0 Blank forms & blank paper – printed cut sheet 5870479 1648284 8813558 8813558 6333048 6333048 Balance turnover which are excisable 76,64,881 10686928 Well within SSI limits 1 Crore 1.5 crore In the circumstances, we find it appropriate to remand the matter back to the original authority who will take note of in such re-adjudication and apply the ratios laid down in the decisions cited above. The authority shall look into the claim and after applying the ratio of these case laws, it is found that the impugned goods are required to be classified under CETA 4901 and not under CETA 4820, the authority shall exclude the turnover ther

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2019 (3) TMI 119 – CESTAT CHENNAI – TMI – Demand of duty – Penalty – Held that: – it is clear that the appellant has discharged the service tax along with interest before issuance of show cause notice. The same has been appropriated in the adjudication order passed by the adjudicating authority. Sub-section (3) of section 73 says that whenever service tax is paid up along with interest, before issuance of show cause notice, no penalties or in particular no show cause notice has to be issued – Appeal allowed with consequential relief. – Appeal No. ST/599/2012 – Final Order No. 40393/2019 – Dated:- 28-2-2019 – Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Ms. Amrutha Arvind, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent ORDER Per Bench Brief facts are that the appellants are engaged in providing the services of Site Formation and Clearance, Excavation and Earthmoving and Demolition Services. On scrutiny of record

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However, they have discharged the service tax along with interest immediately on being pointed out by the department. That such payment along with interest was much before issuance of the show cause notice. She relied upon sub-section (3) of section73 of Finance Act, 1994 to argue that no penalty can be imposed when the service tax is discharged along with interest before issuance of show cause notice as pointed out by officers. To support this argument, she took assistance of the decision of the Hon ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. – 2012 (26) STR 3 (Kar.). It was also submitted by her that apart from mere allegation that there is suppression of facts with intention to evade payment of service tax, department has not been able to point out any positive act on the part of the appellant indulging in suppression of facts. There was no intention to evade payment of service tax which is very m

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t is clear that the appellant has discharged the service tax along with interest before issuance of show cause notice. The same has been appropriated in the adjudication order passed by the adjudicating authority. Sub-section (3) of section 73 says that whenever service tax is paid up along with interest, before issuance of show cause notice, no penalties or in particular no show cause notice has to be issued. The intent of this section is to reduce litigation and also to encourage the appellant to pay up the tax as and when pointed out by the department or coming to notice of the assessee. Thus, it is only intended for voluntary and easy compliance on the part of the assessee. The decision of the Hon ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. (supra) has held that when the assessee has paid up the demand of service tax along with interest no show cause notice and in particular no penalty can be impo

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2019 (3) TMI 181 – CESTAT MUMBAI – TMI – Extended period of limitation – penalty – irregular credit availed on input services – credit on disputed services was reversed along with interest much before the issuance of the SCN – malafide intent present or not – Held that:- The allegation in the SCN is mere suppression of facts without anything further. There is no such allegation that the Appellants was under legal obligation to give invoice wise and item wise details of Cenvat credit which they have not given. Merely, mentioning malafide intention or suppression of facts or willful default is not sufficient. There has to have something more to prove malafide/ suppression/ willful default on the part of the Appellant.
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In the present case, none of the authorities below have brought out any evidence on record to substantiate the allegation of suppression of fact or willful default on the part of the Appellant. All the transactions were duly reflected in excise return and this itself

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able in the facts of the present case nor penalty is liable to be imposed on the Appellant.
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Appeal allowed – decided in favor of appellant. – APPEAL NO: E/87741/2018 – A/85424/2019 – Dated:- 28-2-2019 – Shri Ajay Sharma, Member (Judicial) Appellants: Shri Sanjay Dwivedi, Advocate Respondent: Shri Sanjay Hasija, Superintendent (AR) ORDER The core of dispute in the present appeal arising out of order-in-appeal nos. PVNS/250/APPEALS/ THANE/TR/2017-18/2423 dated 13/03/2018 is the invocation of the extended period of limitation as well as of penalty. 2. The brief facts of the matter are that the Appellant i.e. AIPL manufactured lubricating oil and grease, and their major input was base oil and additives. They delivered finished good to M/s. VCL for home consumption. In addition to supplying duty paid products to M/s. VCL for home consumption, the appellant also removed finished goods under bond for supplying to M/s. VCL for export to Nepal and for supply to SEZ/EOU. The Audit Team co

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Act, 1944 read with Rule 15 of Cenvat Credit Rules 2004. On appeal filed by the Appellant the ld. Commissioner vide impugned order dated 13.03.2018 upheld the confirmation of demand and rejected the appeal filed by the Appellant. 3. I have heard ld. Counsel for the Appellant and Learned Authorised Representative for the Revenue and perused the record. Learned Counsel for the Appellant submit that the Appellant received services from two different supplier. These services were in the nature of erection, renting of equipment like crane, boom lift, staircase etc., on temporary basis and the said services were essential for carrying out production activity and therefore the Appellant was under bonafide belief that the disputed services are covered within the definition input service as per Rule 2(l) of Cenvat Credit Rules, 2004. He further submitted that immediately after raising objection by the Audit, the Cenvat credit on disputed services was reversed along with interest much before th

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show cause notice is mere suppression of facts without anything further. There is no such allegation that the Appellants was under legal obligation to give invoice wise and item wise details of Cenvat credit which they have not given. Merely, mentioning malafide intention or suppression of facts or willful default is not sufficient. There has to have something more to prove malafide/ suppression/ willful default on the part of the Appellant. The Hon ble Supreme Court in the matter of Uniworth Textiles Ltd. Vs CCE, 2013(288) ELT 161 (SC) has laid down that mere non-payment of duty is not equivalent to collusion or willful suppression of facts and in order to invoke extended period, specific and explicit allegation must be proved by the Revenue. In the present case, none of the authorities below have brought out any evidence on record to substantiate the allegation of suppression of fact or willful default on the part of the Appellant. All the transactions were duly reflected in excise r

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CE 1995(75) ELT 721(SC) has laid down that suppression or mis-statement of facts must be willful to constitute a ground for the purpose of Section 11AC ibid and mis-statement or suppression of facts must be willful and the condition precedent for imposition of penalty is that the authority has to be satisfied that non-payment or short-payment of duty was deliberate with intention to evade payment of duty. Since on the facts of this case I have come to the conclusion that the authorities below have failed to brought on record any evidence to prove suppression on the part of the Appellant and the Appellant by his conduct has proved that there was no malafide intention on the part of the Appellant and it was only a bonafide error/belief on the part of the Appellant, therefore neither extended period of limitation is invocable in the facts of the present case nor penalty is liable to be imposed on the Appellant. The appeal is therefore allowed, with consequential relief, if any. (Pronounce

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GST – Input Tax credit (ITC) – Services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments – such activities

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GST – Input Tax credit (ITC) – provision of housing to its employees by the assessee is nothing but a perquisite – ITC shall not be allowed in respect of tax paid on goods and services procured by it

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GST – Rate of IGST – Imported of specified Equipments delivered to the Eligible Institutions – The Applicant cannot claim exemption from the liability of another taxable person. – TMI Updates – Highlights

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